-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NE6NXhaec8eTpqMEAI7INZnKN9oNpSXKUOsEQa/kebbwLZkLXnwjxEdznLCI1gDa cPloRdfVuelptJwgECnDOQ== 0000912057-00-023387.txt : 20000512 0000912057-00-023387.hdr.sgml : 20000512 ACCESSION NUMBER: 0000912057-00-023387 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EQUITY RESIDENTIAL PROPERTIES TRUST CENTRAL INDEX KEY: 0000906107 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 363877868 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12252 FILM NUMBER: 626471 BUSINESS ADDRESS: STREET 1: TWO N RIVERSIDE PLZ STREET 2: STE 400 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3124741300 MAIL ADDRESS: STREET 1: TWO N RIVERSIDE PLAZA STREET 2: SUITE 450 CITY: CHICAGO STATE: IL ZIP: 60606 10-Q 1 10-Q FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 2000 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 1-12252 EQUITY RESIDENTIAL PROPERTIES TRUST (Exact Name of Registrant as Specified in Its Charter) MARYLAND 13-3675988 (State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification No.) TWO NORTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS 60606 (Address of Principal Executive Offices) (Zip Code) (312) 474-1300 (Registrant's Telephone Number, Including Area Code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No / / APPLICABLE ONLY TO CORPORATE USERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: At May 10, 2000, 128,180,450 of the Registrant's Common Shares of Beneficial Interest were outstanding. EQUITY RESIDENTIAL PROPERTIES TRUST CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS EXCEPT FOR SHARE AMOUNTS) (UNAUDITED)
MARCH 31, DECEMBER 31, 2000 1999 ------------ ------------ ASSETS Investment in real estate Land $ 1,547,929 $ 1,550,378 Depreciable property 10,677,391 10,670,550 Construction in progress 23,507 18,035 ------------ ------------ 12,248,827 12,238,963 Accumulated depreciation (1,166,702) (1,070,487) ------------ ------------ Investment in real estate, net of accumulated depreciation 11,082,125 11,168,476 Real estate held for disposition 29,183 12,868 Cash and cash equivalents 72,510 29,117 Investment in mortgage notes, net 83,290 84,977 Rents receivable 1,226 1,731 Deposits - restricted 165,952 111,270 Escrow deposits - mortgage 72,210 75,328 Deferred financing costs, net 33,437 33,968 Other assets 244,233 197,954 ------------ ------------ TOTAL ASSETS $ 11,784,166 $ 11,715,689 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Mortgage notes payable $ 3,076,211 $ 2,883,583 Notes, net 2,289,982 2,290,285 Line of credit - 300,000 Accounts payable and accrued expenses 104,995 102,955 Accrued interest payable 62,701 44,257 Rents received in advance and other liabilities 74,860 74,196 Security deposits 40,037 39,687 Distributions payable 125,275 18,813 ------------ ------------ TOTAL LIABILITIES 5,774,061 5,753,776 ------------ ------------ COMMITMENTS AND CONTINGENCIES Minority Interests: Operating Partnership 515,700 456,979 Partially Owned Properties 1,073 - ------------ ------------ Total Minority Interests 516,773 456,979 ------------ ------------ Shareholders' equity: Preferred Shares of beneficial interest, $.01 par value; 100,000,000 shares authorized; 24,956,652 shares issued and outstanding as of March 31, 2000 and 25,085,652 shares issued and outstanding as of December 31, 1999 1,307,041 1,310,266 Common Shares of beneficial interest, $.01 par value; 350,000,000 shares authorized; 127,946,018 shares issued and outstanding as of March 31, 2000 and 127,450,798 shares issued and outstanding as of December 31, 1999 1,279 1,275 Paid in capital 4,539,951 4,523,919 Employee notes (4,611) (4,670) Distributions in excess of accumulated earnings (350,328) (325,856) ------------ ------------ TOTAL SHAREHOLDERS' EQUITY 5,493,332 5,504,934 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 11,784,166 $ 11,715,689 ============ ============
SEE ACCOMPANYING NOTES 2 EQUITY RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF OPERATIONS (AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA) (UNAUDITED)
QUARTER ENDED MARCH 31, ------------------------- 2000 1999 ------------------------- REVENUES Rental income $ 473,547 $ 406,062 Fee and asset management 1,298 1,234 Interest income - investment in mortgage notes 2,762 2,895 Interest and other income 7,803 5,946 --------- --------- Total revenues 485,410 416,137 --------- --------- EXPENSES Property and maintenance 113,868 97,047 Real estate taxes and insurance 48,334 42,048 Property management 18,914 14,201 Fee and asset management 1,066 867 Depreciation 111,886 96,901 Interest: Expense incurred 95,111 79,197 Amortization of deferred financing costs 1,341 845 General and administrative 6,698 5,767 --------- --------- Total expenses 397,218 336,873 --------- --------- Income before gain on disposition of properties, net and allocation to Minority Interests 88,192 79,264 Gain on disposition of properties, net 19,998 21,416 Allocation to Minority Interests: Operating Partnership (7,096) (7,126) Partially Owned Properties 45 - --------- --------- Net income 101,139 93,554 Preferred distributions (28,388) (29,377) --------- --------- Net income available to Common Shares $ 72,751 $ 64,177 ========= ========= Weighted average Common Shares outstanding - basic 127,798 118,956 ========= ========= Distributions declared per Common Share outstanding $ 0.76 $ 0.71 ========= ========= Net income per share - basic $ 0.57 $ 0.54 ========= ========= Net income per share - diluted $ 0.57 $ 0.54 ========= =========
SEE ACCOMPANYING NOTES 3 EQUITY RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS (AMOUNTS IN THOUSANDS) (UNAUDITED)
QUARTER ENDED MARCH 31, ------------------------- 2000 1999 ------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 101,139 $ 93,554 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Allocation to Minority Interests - Operating Partnership 7,096 7,126 Allocation to Minority Interests - Partially Owned Properties (45) - Depreciation 111,886 96,901 Amortization of deferred financing costs 1,341 845 Amortization of discounts and premiums on debt (576) (608) Amortization of deferred settlements on interest rate protection agreements 201 257 Gain on disposition of properties, net (19,998) (21,416) Compensation paid with Company Common Shares 1,422 - CHANGES IN ASSETS AND LIABILITIES: Decrease in rents receivable 723 2,661 (Increase) in deposits - restricted (2,802) (3,465) (Increase) decrease in other assets (2,025) 4,362 Increase (decrease) in accounts payable and accrued expenses 1,944 (12,627) Increase in accrued interest payable 16,683 14,509 (Decrease) increase in rents received in advance and other liabilities (2,652) 12,687 Increase (decrease) in security deposits 80 (531) --------- --------- Net cash provided by operating activities 214,417 194,255 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Investment in real estate, net (18,307) (107,058) Improvements to real estate (27,193) (24,922) Additions to non-real estate property (1,038) (2,450) Interest capitalized for real estate under construction (236) (609) Proceeds from disposition of real estate, net 92,241 75,997 Decrease in investment in mortgage notes 1,687 1,128 (Increase) decrease in deposits on real estate acquisitions, net (51,948) 24,527 Decrease in mortgage deposits 4,596 1,864 Investment in joint ventures, net (46,149) (15,847) Investment in limited partnerships and other, net (588) - Proceeds from disposition of Unconsolidated Properties, net 4,400 - Purchase of management contract rights (779) (285) Costs related to Mergers (3,472) (2,612) Other investing activities (772) (355) --------- --------- Net cash (used for) investing activities (47,558) (50,622) --------- ---------
SEE ACCOMPANYING NOTES 4 EQUITY RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (AMOUNTS IN THOUSANDS) (UNAUDITED)
QUARTER ENDED MARCH 31, ------------------------- 2000 1999 ------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Loan and bond acquisition costs $ (574) $ (52) MORTGAGE NOTES PAYABLE: Proceeds, net 147,683 - Lump sum payoffs (12,801) - Scheduled principal payments (7,509) (4,161) LINES OF CREDIT: Proceeds 48,000 298,000 Repayments (348,000) (423,000) Proceeds from settlement of interest rate protection agreements 7,055 - Proceeds from sale of Common Shares 2,900 2,197 Proceeds from sale of Preferred Shares/Units, net 64,350 - Proceeds from exercise of options 4,000 15,374 Payment of offering costs (32) (182) DISTRIBUTIONS: Common Shares (257) (71) Preferred Shares/Units (28,197) (29,377) Minority Interests - Operating Partnership (143) (316) Principal receipts on employee notes, net 59 47 Principal receipts on other notes receivable, net - 4,681 --------- --------- Net cash (used for) financing activities (123,466) (136,860) --------- --------- Net increase in cash and cash equivalents 43,393 6,773 Cash and cash equivalents, beginning of period 29,117 3,965 --------- --------- Cash and cash equivalents, end of period $ 72,510 $ 10,738 ========= ========= SUPPLEMENTAL INFORMATION: Cash paid during the period for interest $ 78,961 $ 65,648 ========= ========= Transfers to real estate held for disposition $ 29,183 $ - ========= ========= Net real estate contributed in exchange for OP Units or Preference Units $ 636 $ 8,929 ========= ========= Mortgage loans assumed and/or entered into through acquisitions of real estate $ - $ 16,903 ========= ========= Mortgage loans assumed through consolidation of Partially Owned Properties $ 65,095 $ - ========= ========= Net (assets acquired) liabilities assumed through consolidation of Partially Owned Properties $ 792 $ - ========= =========
SEE ACCOMPANYING NOTES 5 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) DEFINITION OF SPECIAL TERMS: Capitalized terms used but not defined in this Quarterly Report on Form 10-Q are as defined in the Company's Annual Report on Form 10-K for the year ended December 31, 1999 ("Form 10-K"). 1. BUSINESS Equity Residential Properties Trust, formed in March 1993, ("EQR"), is a self-administered and self-managed equity real estate investment trust ("REIT"). As used herein, the term "Company" means EQR, and its subsidiaries, as the survivor of the mergers between EQR and each of Wellsford Residential Property Trust ("Wellsford") (the "Wellsford Merger"), Evans Withycombe Residential, Inc. ("EWR") (the "EWR Merger"), Merry Land & Investment Company, Inc. ("MRY") (the "MRY Merger") and Lexford Residential Trust ("LFT") ("the LFT Merger"). The Company has elected to be taxed as a REIT under Section 856(c) of the Internal Revenue Code 1986, as amended (the "Code"). The Company is engaged in the acquisition, disposition, ownership, management and operation of multifamily properties. As of March 31, 2000, the Company owned or had interests in a portfolio of 1,052 multifamily properties containing 223,724 apartment units (individually a "Property" and collectively the "Properties") consisting of the following:
Number of Number Properties of Units ------------------------------------------------------------- Wholly Owned Properties 975 212,414 Partially Owned Properties 14 2,995 Unconsolidated Properties 63 8,315 ---------------------------------- Total Properties 1,052 223,724 ==================================
The "Partially Owned Properties" are controlled and partially owned by the Company but have partners with minority interests (see further discussion in Notes 3 and 4). The "Unconsolidated Properties" are partially owned but not controlled by the Company and consist of investments in partnership interests and/or subordinated mortgages. The Properties are located in 35 states throughout the United States. 2. BASIS OF PRESENTATION The balance sheet and statements of operations and cash flows as of and for the quarter ended March 31, 2000 represent the consolidated financial information of the Company and its subsidiaries. Due to the Company's ability as general partner to control either through ownership or by contract the Operating Partnership, a series of management limited partnerships and companies (collectively, the "Management Partnerships" or the "Management Companies"), the Financing Partnerships, the LLC's, and certain other entities, each such entity has been consolidated with the Company for financial reporting purposes. In regard to the Management Companies, the Company does not have legal control; however, these entities are consolidated for financial reporting purposes, the effects of which are immaterial. Certain reclassifications have been made to the prior year's financial statements in order to conform to the current year presentation. These unaudited Consolidated Financial Statements of the Company have been prepared pursuant to the Securities and Exchange Commission ("SEC") rules and regulations and should be read in conjunction with the Financial Statements and Notes thereto included in the Company's Annual Report on Form 10-K. The following Notes to Consolidated Financial Statements highlight significant changes to the 6 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) notes included in the Form 10-K and present interim disclosures as required by the SEC. The accompanying Consolidated Financial Statements reflect, in the opinion of management, all adjustments necessary for a fair presentation of the interim financial statements. All such adjustments are of a normal and recurring nature. 3. SHAREHOLDERS' EQUITY AND MINORITY INTERESTS The following table presents the changes in the Company's issued and outstanding Common Shares for the quarter ended March 31, 2000:
------------------------------------------------------ ---------------- 2000 ------------------------------------------------------ ---------------- Common Shares outstanding at January 1, 127,450,798 COMMON SHARES ISSUED: Conversion of Series E Preferred Shares 778 Conversion of Series H Preferred Shares 60,958 Conversion of Series J Preferred Shares 26,628 Employee Share Purchase Plan 79,720 Dividend Reinvestment - DRIP Plan 193 Share Purchase - DRIP Plan 4,303 Exercise of options 52,779 Restricted share grants, net 235,002 Conversion of OP Units 34,859 ------------------------------------------------------ ---------------- Common Shares outstanding at March 31, 127,946,018 ===========
The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for a partnership interest are collectively referred to as the "Minority Interests - Operating Partnership". As of March 31, 2000, the Minority Interests - Operating Partnership held 12,465,971 OP Units. As a result, the Minority Interests - Operating Partnership had an 8.88% interest in the Operating Partnership at March 31, 2000. Assuming conversion of all OP Units into Common Shares, total Common Shares outstanding at March 31, 2000 would have been 140,411,989. Net proceeds from the Company's Common Share and Preferred Share offerings are contributed by the Company to the Operating Partnership in return for an increased ownership percentage and are treated as capital transactions in the Company's Consolidated Financial Statements. As a result, the net offering proceeds from Common Shares are allocated between shareholders' equity and Minority Interests - Operating Partnership to account for the change in their respective percentage ownership of the underlying equity of the Operating Partnership. The Guilford portfolio properties (see further discussion in Note 4) are controlled and partially owned by the Company but have partners with minority interests. Effective January 1, 2000, the Company has included 100% of the financial condition and results of operations of these Partially Owned Properties in the Consolidated Financial Statements due to an increased ownership interest in these properties. The equity interests of the unaffiliated partners are reflected as Minority Interests - Partially Owned Properties. On March 3, 2000, Lexford Properties, L.P., a subsidiary of the Operating Partnership, issued 1.1 million units of 8.50% Series B Cumulative Convertible Redeemable Preference Units (also known as "Preference Interests") with an equity value of $55.0 million. Lexford Properties, L.P. received $53.6 million in net proceeds from this transaction. The liquidation value of these units is $50 per unit. The 1.1 million units are exchangeable into 1.1 million shares of 8.50% Series M-1 Cumulative Redeemable 7 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) Preferred Shares of Beneficial Interest of the Company. The Series M-1 Preferred Shares are not convertible into EQR Common Shares. Dividends for the Series B Preference Interests or the Series M-1 Preferred Shares are payable quarterly at the rate of $4.25 per unit/share per year. The value of these preference interests is included in Minority Interests - Operating Partnership in the Consolidated Balance Sheets and the distributions incurred are included in preferred distributions in the Consolidated Statements of Operations. On March 23, 2000, Lexford Properties, L.P., a subsidiary of the Operating Partnership, issued 220,000 units of 8.50% Series C Cumulative Convertible Redeemable Preference Units with an equity value of $11.0 million. Lexford Properties, L.P. received $10.7 million in net proceeds from this transaction. The liquidation value of these units is $50 per unit. The 220,000 units are exchangeable into 220,000 shares of 8.50% Series M-1 Cumulative Redeemable Preferred Shares of Beneficial Interest of the Company. The Series M-1 Preferred Shares are not convertible into EQR Common Shares. Dividends for the Series C Preference Interests or the Series M-1 Preferred Shares are payable quarterly at the rate of $4.25 per unit/share per year. The value of these preference interests is included in Minority Interests - Operating Partnership in the Consolidated Balance Sheets and the distributions incurred are included in preferred distributions in the Consolidated Statements of Operations. The following table presents the Company's issued and outstanding Preferred Shares as of March 31, 2000 and December 31, 1999: 8 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- -------------------------------------------------------------------------------------------------------------------------------- AMOUNTS ARE IN THOUSANDS ------------------------ ANNUAL DIVIDEND REDEMPTION CONVERSION RATE PER MARCH DECEMBER DATE (1)(2) RATE (2) SHARE (3) 31, 2000 31, 1999 - -------------------------------------------------------------------------------------------------------------------------------- Preferred Shares of beneficial interest, $.01 par value; 100,000,000 shares authorized: 9 3/8% Series A Cumulative Redeemable Preferred; liquidation 6/1/00 N/A $2.34375 $ 153,000 $ 153,000 value $25 per share; 6,120,000 shares issued and outstanding at March 31, 2000 and December 31, 1999 9 1/8% Series B Cumulative Redeemable Preferred; liquidation 10/15/05 N/A $22.81252 125,000 125,000 value $250 per share; 500,000 shares issued and outstanding at March 31, 2000 and December 31, 1999 9 1/8% Series C Cumulative Redeemable Preferred; liquidation 9/9/06 N/A $22.81252 115,000 115,000 value $250 per share; 460,000 shares issued and outstanding at March 31, 2000 and December 31, 1999 8.60% Series D Cumulative Redeemable Preferred; liquidation 7/15/07 N/A $21.50000 175,000 175,000 value $250 per share; 700,000 shares issued and outstanding at March 31, 2000 and December 31, 1999 Series E Cumulative Convertible Preferred; liquidation value 11/1/98 0.5564 $1.75000 99,815 99,850 $25 per share; 3,992,600 and 3,994,000 shares issued and outstanding at March 31, 2000 and December 31, 1999, respectively 9.65% Series F Cumulative Redeemable Preferred; liquidation 8/24/00 N/A $2.41250 57,500 57,500 value $25 per share; 2,300,000 shares issued and outstanding at March 31, 2000 and December 31, 1999 7 1/4% Series G Convertible Cumulative Preferred; liquidation 9/15/02 4.2680 $18.12500 316,250 316,250 value $250 per share; 1,265,000 shares issued and outstanding at March 31, 2000 and December 31, 1999 7.00% Series H Cumulative Convertible Preferred; liquidation 6/30/98 0.7240 $1.75000 1,581 3,686 value $25 per share; 63,252 and 147,452 shares issued and outstanding at March 31, 2000 and December 31, 1999, respectively 8.60% Series J Cumulative Convertible Preferred; liquidation 3/31/00 0.6136 $2.15000 113,895 114,980 value $25 per share; 4,555,800 and 4,599,200 shares issued and outstanding at March 31, 2000 and December 31, 1999, respectively 8.29% Series K Cumulative Redeemable Preferred; liquidation 12/10/26 N/A $4.14500 50,000 50,000 value $50 per share; 1,000,000 shares issued and outstanding at March 31, 2000 and December 31, 1999 7.625% Series L Cumulative Redeemable Preferred; liquidation 2/13/03 N/A $1.90625 100,000 100,000 value $25 per share; 4,000,000 shares issued and outstanding at March 31, 2000 and December 31, 1999 - -------------------------------------------------------------------------------------------------------------------------------- $1,307,041 $1,310,266 - --------------------------------------------------------------------------------------------------------------------------------
(1) On or after the redemption date, redeemable preferred shares (Series A, B, C, D, F, K and L) may be redeemed for cash at the option of the Company, in whole or in part, at a redemption price equal to the liquidation price per share, plus accrued and unpaid distributions, if any. 9 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) (2) On or after the redemption date, convertible preferred shares (Series E, G, H & J) may be redeemed under certain circumstances for cash or Common Shares at the option of the Company, in whole or in part, at various redemption prices per share based upon the contractual conversion rate, plus accrued and unpaid distributions, if any. The conversion rate listed for Series G is the Preferred Share rate and the equivalent Depositary Share rate is 0.4268. (3) Dividends on all series of Preferred Shares are payable quarterly at various pay dates. Dividend rates listed for Series B, C, D and G are Preferred Share rates and the equivalent Depositary Share annual dividend rates are $2.281252, $2.281252, $2.15 and $1.8125, respectively. 4. REAL ESTATE ACQUISITIONS On January 19, 2000, the Company acquired Windmont Apartments, a 178- unit multifamily property located in Atlanta, GA, from an unaffiliated party for a purchase price of approximately $10.3 million. The cash portion of this transaction was partially funded from proceeds received from the disposition of one property and the remainder from working capital. On January 19, 2000, the Company paid $1.25 million to acquire an additional ownership interest in LFT's Guilford portfolio (14 properties containing 2,995 units located in four states). The transaction was effective on January 1, 2000. Prior to January 1, 2000, the Company accounted for this portfolio under the equity method of accounting. As a result of this additional ownership acquisition, the Company acquired a controlling interest, and as such, now consolidates these properties for financial reporting purposes. The Company recorded additional investments in real estate totaling $69.4 million in connection with this transaction. 5. REAL ESTATE DISPOSITIONS During the quarter ended March 31, 2000, the Company disposed of the nine properties listed below to unaffiliated parties. The Company recognized a net gain for financial reporting purposes of approximately $20 million.
------------------------------------------------------------------------------------------------------- DISPOSITION DATE NUMBER PRICE DISPOSED PROPERTY LOCATION OF UNITS (IN THOUSANDS) ------------------------------------------------------------------------------------------------------- 02/04/00 Lakeridge at the Moors Miami, FL 175 $10,000 02/09/00 Sonnet Cove I & II Lexington, KY 331 12,300 02/25/00 Yuma Court Colorado Springs, CO 40 2,350 02/25/00 Indigo Plantation Daytona Beach, FL 304 14,200 02/25/00 The Oaks of Lakebridge Ormond Beach, FL 170 7,800 03/23/00 Tanglewood Lake Oswego, OR 158 10,750 03/30/00 Preston Lake Tucker, GA 320 17,325 03/31/00 Cypress Cove Melbourne, FL 326 18,800 ------------------------------------------------------------------------------------------------------- 1,824 $ 93,525 -------------------------------------------------------------------------------------------------------
In addition, during the quarter ended March 31, 2000, the Company sold its entire interest in two Unconsolidated Properties containing 338 units for approximately $4.4 million. 10 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) 6. COMMITMENTS TO ACQUIRE/DISPOSE OF REAL ESTATE As of March 31, 2000, in addition to the Property that was subsequently acquired as discussed in Note 14 of the Notes to Consolidated Financial Statements, the Company entered into a separate agreement to acquire one multifamily property containing 332 units from an unaffiliated party. The Company expects a purchase price of approximately $33.5 million. As of March 31, 2000, in addition to the Properties that were subsequently disposed of as discussed in Note 14 of the Notes to Consolidated Financial Statements, the Company entered into separate agreements to dispose of thirteen multifamily properties containing 4,141 units to unaffiliated parties. The Company expects a combined disposition price of approximately $207.4 million. The closings of these pending transactions are subject to certain contingencies and conditions; therefore, there can be no assurance that these transactions will be consummated or that the final terms thereof will not differ in material respects from those summarized in the preceding paragraphs. 7. DEPOSITS - RESTRICTED Deposits-restricted as of March 31, 2000 primarily included the following: - a deposit in the amount of $25 million held in a third party escrow account to provide collateral for third party construction financing in connection with two separate joint venture agreements; - approximately $96.3 million held in third party escrow accounts, representing proceeds received in connection with the Company's disposition of nine properties and earnest money deposits made for four additional acquisitions; - a good faith deposit in the amount of $4.5 million held in a third party escrow account for a mortgage financing transaction that closed during the quarter. These funds were refunded in April 2000; - approximately $34 million for tenant security, utility deposits, and other deposits for certain of the Company's Properties; and - approximately $6.1 million of other deposits. 8. MORTGAGE NOTES PAYABLE As of March 31, 2000, the Company had outstanding mortgage indebtedness of approximately $3.1 billion encumbering 567 of the Properties. The carrying value of such Properties (net of accumulated depreciation of $486.5 million) was approximately $4.9 billion. The mortgage notes payables are generally due in monthly installments of principal and interest. During the quarter ended March 31, 2000 the Company: - recorded additional third-party mortgage debt totaling $65.1 million in connection with the consolidation of the Guilford portfolio on January 1, 2000 (see Note 4); - repaid the outstanding mortgage balances on three Properties in the aggregate amount of $12.8 million; - obtained new mortgage financing on eleven previously unencumbered properties in the amount of $148.3 million on March 20, 2000; and - settled on a $100 million forward starting swap and received $7.1 million. This amount is being amortized over the life of the financing for the eleven previously unencumbered 11 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) Properties that occurred in March 2000. As of March 31, 2000, scheduled maturities for the Company's outstanding mortgage indebtedness are at various dates through October 1, 2033. The interest rate range on the Company's mortgage debt was 3.15% to 10.13% at March 31, 2000. During the quarter ended March 31, 2000, the weighted average interest rate on the Company's mortgage debt was 6.77%. 9. NOTES The following tables summarize the Company's unsecured note balances and certain interest rate and maturity date information as of and for the quarter ended March 31, 2000:
Weighted March 31, 2000 Net Principal Average Maturity Date (AMOUNTS ARE IN THOUSANDS) Balance Interest Rate Ranges Interest Rate Ranges - ------------------------------------------------------------------------------------------------------------------ Fixed Rate Public Notes $ 2,062,438 6.150% - 9.375% 7.07% 2000 - 2026 Floating Rate Public Notes 99,764 (1) 7.00% 2003 Fixed Rate Tax-Exempt Bonds 127,780 4.750% - 5.200% 5.11% 2024 - 2029 ------------------- Totals $ 2,289,982 ===================
(1) As of March 31, 2000, floating rate public notes consisted of one note. The interest rate on this note was LIBOR (reset quarterly) plus a spread equal to 0.75% at March 31, 2000 (reset annually in August). As of March 31, 2000, the Company had outstanding unsecured notes of approximately $2.3 billion net of a $4.3 million discount and including a $6.5 million premium. As of March 31, 2000, the remaining unamortized balance of deferred settlement receipts and payments from treasury locks and interest rate protection agreements was $9.3 million and $3.3 million, respectively. 10. LINE OF CREDIT The Company has a revolving credit facility with Bank of America Securities LLC and Chase Securities Inc. acting as joint lead arrangers to provide the Operating Partnership with potential borrowings of up to $700 million. As of March 31, 2000 no amounts were outstanding under this facility and $51.3 million was restricted on the line of credit. During the quarter ended March 31, 2000, the weighted average interest rate on the Company's line of credit was 6.56%. 11. CALCULATION OF NET INCOME PER WEIGHTED AVERAGE COMMON SHARE The following tables set forth the computation of net income per share - - basic and net income per share - diluted. 12 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
QUARTER ENDED MARCH 31, ----------------------------------- 2000 1999 ----------------------------------- (AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) NUMERATOR: Income before gain on disposition of properties, net, allocation to Minority Interests and preferred distributions $ 88,192 $ 79,264 Allocation to Minority Interests: Operating Partnership (7,096) (7,126) Partially Owned Properties 45 - Distributions to preferred shareholders (28,388) (29,377) ----------------------------------- Income before gain on disposition of properties, net 52,753 42,761 Gain on disposition of properties, net 19,998 21,416 ----------------------------------- Numerator for net income per share - basic 72,751 64,177 Effect of dilutive securities: Allocation to Minority Interests - Operating Partnership 7,096 7,126 ----------------------------------- Numerator for net income per share - diluted $ 79,847 $ 71,303 =================================== DENOMINATOR: Denominator for net income per share - basic 127,798 118,956 Effect of dilutive securities: Dilution for assumed exercise of stock options 422 568 OP Units 12,466 13,209 ----------------------------------- Denominator for net income per share - diluted 140,686 132,733 =================================== Net income per share - basic $ 0.57 $ 0.54 =================================== Net income per share - diluted $ 0.57 $ 0.54 ===================================
13 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
QUARTER ENDED MARCH 31, ----------------------------------- 2000 1999 ----------------------------------- (AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) NET INCOME PER SHARE - BASIC: Income before gain on disposition of properties, net per share - basic $ 0.43 $ 0.38 Gain on disposition of properties, net 0.14 0.16 ----------------------------------- Net income per share - basic $ 0.57 $ 0.54 =================================== NET INCOME PER SHARE - DILUTED: Income before gain on disposition of properties, net per share - diluted $ 0.43 $ 0.38 Gain on disposition of properties, net 0.14 0.16 ----------------------------------- Net income per share - diluted $ 0.57 $ 0.54 ===================================
CONVERTIBLE PREFERRED SHARES AND JUNIOR CONVERTIBLE PREFERENCE UNITS THAT COULD BE CONVERTED INTO 10,643,083 AND 13,123,062 WEIGHTED COMMON SHARES WERE OUTSTANDING FOR THE QUARTERS ENDED MARCH 31, 2000 AND 1999, RESPECTIVELY, BUT WERE NOT INCLUDED IN THE COMPUTATION OF DILUTED EARNINGS PER SHARE BECAUSE THE EFFECTS WOULD BE ANTI-DILUTIVE. 12. COMMITMENTS AND CONTINGENCIES The Company, as an owner of real estate, is subject to various environmental laws of Federal and local governments. Compliance by the Company with existing laws has not had a material adverse effect on the Company's financial condition and results of operations. However, the Company cannot predict the impact of new or changed laws or regulations on its current Properties or on properties that it may acquire in the future. The Company does not believe there is any litigation threatened against the Company other than routine litigation arising out of the ordinary course of business, some of which is expected to be covered by liability insurance, none of which is expected to have a material adverse effect on the consolidated financial statements of the Company. In regards to the funding of Properties in the development and/or earnout stage and the joint venture agreements with two multifamily residential real estate developers, the Company funded a total of $48.4 million during the quarter ended March 31, 2000. During the remainder of 2000, the Company expects to fund approximately $71.9 million in connection with these Properties. In connection with one joint venture agreement, the Company has an obligation to fund up to an additional $20 million to guarantee third party construction financing. 14 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) In connection with the Wellsford Merger, the Company provided a $14.8 million credit enhancement with respect to certain tax-exempt bonds issued to finance certain public improvements at a multifamily development project. As of March 31, 2000, this enhancement was still in effect. 13. REPORTABLE SEGMENTS The following tables set forth the reconciliation of net income and total assets for the Company's reportable segments for the quarters ended March 31, 2000 and 1999.
RENTAL REAL CORPORATE/ MARCH 31, 2000 (AMOUNTS IN THOUSANDS) ESTATE(1) OTHER(2) CONSOLIDATED - ---------------------------------------------------------------------------------------------------------- Rental income $ 473,547 $ - $ 473,547 Property and maintenance expense (113,868) - (113,868) Real estate tax and insurance expense (48,334) - (48,334) Property management expense (18,914) - (18,914) ------------------------------------------------- Net operating income 292,431 - 292,431 Fee and asset management income - 1,298 1,298 Interest income - investment in mortgage notes - 2,762 2,762 Interest and other income - 7,803 7,803 Fee and asset management expense - (1,066) (1,066) Depreciation expense on non-real estate assets - (1,567) (1,567) Interest expense: Expense incurred - (95,111) (95,111) Amortization of deferred financing costs - (1,341) (1,341) General and administrative expense - (6,698) (6,698) Preferred distributions - (28,388) (28,388) Allocation to Minority Interests - Partially Owned Properties - 45 45 Adjustment for depreciation expense related to Unconsolidated and Partially Owned Properties - (238) (238) ------------------------------------------------- Funds from operations available to Common Shares and OP Units 292,431 (122,501) 169,930 Depreciation expense on real estate assets (110,319) - (110,319) Gain on disposition of properties, net 19,998 - 19,998 Allocation to Minority Interests - Operating Partnership - (7,096) (7,096) Adjustment for depreciation expense related to Unconsolidated and Partially Owned Properties - 238 238 ------------------------------------------------- Net income available to Common Shares $ 202,110 $(129,359) $ 72,751 ================================================= Investment in real estate, net of accumulated depreciation $ 11,065,344 $ 16,781 $ 11,082,125 ================================================= Total assets $ 11,094,527 $ 689,639 $ 11,784,166 =================================================
15 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
RENTAL REAL CORPORATE/ MARCH 31, 1999 (AMOUNTS IN THOUSANDS) ESTATE(1) OTHER(2) CONSOLIDATED - -------------------------------------------------------------------------------------------------- Rental income $ 406,062 $ - $ 406,062 Property and maintenance expense (97,047) - (97,047) Real estate tax and insurance expense (42,048) - (42,048) Property management expense (14,201) - (14,201) ----------------------------------------- Net operating income 252,766 - 252,766 Fee and asset management income - 1,234 1,234 Interest income - investment in mortgage notes - 2,895 2,895 Interest and other income - 5,946 5,946 Fee and asset management expense - (867) (867) Depreciation expense on non-real estate assets - (1,705) (1,705) Interest expense: Expense incurred - (79,197) (79,197) Amortization of deferred financing costs - (845) (845) General and administrative expense - (5,767) (5,767) Preferred distributions - (29,377) (29,377) Adjustment for depreciation expense related to Unconsolidated Properties - 276 276 ----------------------------------------- Funds from operations available to Common Shares and OP Units 252,766 (107,407) 145,359 Depreciation expense on real estate assets (95,196) - (95,196) Gain on disposition of properties, net 21,416 - 21,416 Allocation to Minority Interests - Operating Partnership - (7,126) (7,126) Adjustment for depreciation expense related to Unconsolidated Properties - (276) (276) ----------------------------------------- Net income available to Common Shares $ 178,986 $(114,809) $ 64,177 =========================================
(1) The Company has one primary reportable business segment, which consists of investment in rental real estate. The Company's primary business is owning, managing, and operating multifamily residential properties which includes the generation of rental and other related income through the leasing of apartment units to tenants. (2) The Company has a segment for corporate level activity including such items as interest income earned on short-term investments, interest income earned on investment in mortgage notes, general and administrative expenses, and interest expense on mortgage notes payable and unsecured note issuances. In addition, the Company has a segment for third party management activity that is immaterial and does not meet the threshold requirements of a reportable segment as provided for in Statement No. 131. Interest expense on debt is not allocated to individual Properties, even if the Properties secure such debt. Further, income allocated to Minority Interests is not allocated to the Properties. 16 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) 14. SUBSEQUENT EVENTS On April 5, 2000, the Company acquired Alborada Apartments, a 442-unit multifamily property located in Fremont, CA, from an unaffiliated party for a total purchase price of $83.5 million. On April 20, 2000, the Company disposed of Village of Sycamore Ridge Apartments, a 114-unit multifamily property located in Memphis, TN, to an unaffiliated party for a total sales price of $5.2 million. On April 28, 2000, the Company disposed of Towne Centre III & IV Apartments, 220-unit and 342-unit multifamily properties, respectively, located in Laurel, MD, to an unaffiliated party for a total sales price of $29.2 million. Mortgage debt on these two properties totaling $15.2 million ($5.9 million on Towne Centre III and $9.3 million on Towne Centre IV) was fully paid off using a portion of the proceeds from the disposition of both properties. On May 1, 2000, Lexford Properties, L.P., a subsidiary of the Operating Partnership, issued 420,000 units of 8.375% Series D Cumulative Convertible Redeemable Preference Units with an equity value of $21.0 million. Lexford Properties, L.P. received $20.5 million in net proceeds from this transaction. The liquidation value of these units is $50 per unit. The 420,000 units are exchangeable into 420,000 shares of 8.375% Series M-2 Cumulative Redeemable Preferred Shares of Beneficial Interest of the Company. The Series M-2 Preferred Shares are not convertible into EQR Common Shares. Dividends for the Series D Preference Interests or the Series M-2 Preferred Shares are payable quarterly at the rate of $4.1875 per unit/share per year. On May 1, 2000, the Company repaid the outstanding mortgage balances on 51 separate Properties totaling $76.4 million. On May 2, 2000, the Company announced that it will redeem all of its issued and outstanding Series J Cumulative Convertible Preferred Shares of Beneficial Interest on June 2, 2000. At that time, the preferred shares will be redeemed for such number of common shares as are issuable at a conversion rate of 0.6136 of a common share of EQR for each Series J Preferred Share. Pursuant to the terms of a Stock Purchase Agreement with Wellsford Real Properties, Inc. ("WRP Newco"), the Company had agreed to purchase up to 1,000,000 shares of WRP Newco Series A Preferred at $25.00 per share on a standby basis over a three-year period ending on May 30, 2000. This agreement was terminated on May 5, 2000, and, as such, the Company has no further obligations under this agreement. On May 5, 2000, the Company acquired an aggregate principal amount of $25.0 million of 8.25% preferred securities of WRP Convertible Trust I, an affiliate of WRP Newco. These preferred securities are indirectly convertible into WRP Newco common shares under certain circumstances. During the second quarter of 2000, the Company expects to close on its acquisition, in an all cash and debt transaction, of Globe Business Resources, Inc. ("Globe"), one of the nation's largest providers of temporary corporate housing and furniture rental. Shareholders of Globe will receive $13.00 per share upon closing, which would approximate $62.4 million in cash based on the 4.8 million Globe shares currently outstanding. In addition, the Company will assume approximately $66.4 million in debt. The acquisition does not require approval of the Company's shareholders but does require Globe shareholder approval. 17 EQUITY RESIDENTIAL PROPERTIES TRUST PART I ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW The following discussion and analysis of the results of operations and financial condition of the Company should be read in connection with the Consolidated Financial Statements and Notes thereto. Due to the Company's ability to control the Operating Partnership, the Management Partnerships and Management Companies, the Financing Partnerships, the LLC's and certain other entities, each entity has been consolidated with the Company for financial reporting purposes. Capitalized terms used herein and not defined, are as defined in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. Forward-looking statements in this report are intended to be made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "believes", "expects" and "anticipates" and other similar expressions which are predictions of or indicate future events and trends and which do not relate solely to historical matters identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results, performance, or achievements of the Company to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such differences include, but are not limited to, the following: - alternative sources of capital to the Company are higher than anticipated; - occupancy levels and market rents may be adversely affected by local economic and market conditions, which are beyond the Company's control; and - additional factors as discussed in Part I of the Annual Report on Form 10-K. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. RESULTS OF OPERATIONS The acquired properties are presented in the Consolidated Financial Statements of the Company from the date of each acquisition or the closing dates of the Mergers. The following table summarizes the number of Acquired and Disposed Properties and related units for the periods presented:
ACQUISITIONS DISPOSITIONS ------------------------------------------------------------------ Number of Number of Number of YEAR Properties Number of Units Properties Units ---------------------------------------------------------------------------------------------- 1999 366 35,450 36 7,886 2000 1 178 9 1,824
In addition, during the quarter ended March 31, 2000, the Company sold its entire interest in two Unconsolidated Properties containing 338 units for approximately $4.4 million. The Company's overall results of operations for the quarters ended March 31, 2000 and 1999 have been significantly impacted by the Company's acquisition and disposition activity. The significant changes in rental revenues, property and maintenance expenses, real estate taxes and insurance, 18 EQUITY RESIDENTIAL PROPERTIES TRUST PART I ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) depreciation expense, property management and interest expense can all primarily be attributed to the acquisition of the 1999 Acquired Properties, partially offset by the disposition of the 1999 Disposed Properties and the 2000 Disposed Properties. The impact of the 1999 Acquired Properties, the 1999 Disposed Properties and the 2000 Disposed Properties are discussed in greater detail in the following paragraphs. Properties that the Company owned for all of the quarter ended March 31, 2000 and March 31, 1999 (the "First Quarter 2000 Same Store Properties"), which represented 174,261 units, also impacted the Company's results of operations and are discussed as well in the following paragraphs. COMPARISON OF QUARTER ENDED MARCH 31, 2000 TO QUARTER ENDED MARCH 31, 1999 For the quarter ended March 31, 2000, income before gain on disposition of properties, net and allocation to Minority Interests increased by approximately $8.9 million when compared to the quarter ended March 31, 1999. This increase was primarily due to the acquisition of the 1999 Acquired Properties as well as increases in rental revenues net of increases in property and maintenance expenses, real estate taxes and insurance, property management expenses, depreciation expense, interest expense and general and administrative expenses. In regard to the First Quarter 2000 Same Store Properties, total revenues increased by approximately $14.4 million to $398.0 million or 3.75% primarily as a result of higher rental rates charged to new tenants and tenant renewals and an increase in income from billing tenants for their share of utility costs as well as other ancillary services provided to tenants. Overall, property operating expenses, which include property and maintenance, real estate taxes and insurance and an allocation of property management expenses, increased approximately $2.6 million or 1.83%. This increase was primarily the result of higher expenses for on-site compensation costs and an increase in real estate taxes on certain properties, but was partially offset by lower leasing and advertising, administrative, maintenance, building and insurance costs. Property management represents expenses associated with the self-management of the Company's Properties. These expenses increased by approximately $4.7 million primarily due to the property management business obtained through the LFT Merger. Fee and asset management revenues and fee and asset management expenses are associated with the management of properties not owned by the Company that are managed for affiliates. These revenues and expenses increased slightly. Interest expense, including amortization of deferred financing costs, increased by approximately $16.4 million. This increase was primarily the result of an $813.5 million increase in the Company's average indebtedness outstanding. The effective interest cost on all of the Company's indebtedness for the quarter ending March 31, 2000 was 7.15% as compared to 7.04% for the quarter ended March 31, 1999. General and administrative expenses, which include corporate operating expenses, increased approximately $0.9 million between the periods under comparison. This increase was primarily due to recording higher compensation expense related to the issuance of restricted shares. However, by gaining certain economies of scale with a much larger operation, these expenses as a percentage of total revenues were 1.38% for the quarter ended March 31, 2000 compared to 1.39% of total revenues for the quarter ended March 31, 1999. 19 EQUITY RESIDENTIAL PROPERTIES TRUST PART I ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) LIQUIDITY AND CAPITAL RESOURCES As of January 1, 2000, the Company had approximately $29.1 million of cash and cash equivalents and the amount available on the Company's line of credit was $400 million, of which $65.8 million was restricted. After taking into effect the various transactions discussed in the following paragraphs, the Company's cash and cash equivalents balance at March 31, 2000 was approximately $72.5 million and the amount available on the Company's line of credit was $700 million, of which $51.3 million was restricted. The following discussion also explains the changes in net cash provided by operating activities, net cash (used for) investing activities and net cash (used for) financing activities, all of which are presented in the Company's Statements of Cash Flows. Part of the Company's strategy in funding the purchase of multifamily properties, funding its Properties in the development and/or earnout stage and the funding of the Company's investment in two joint ventures with multifamily real estate developers is to utilize its line of credit and to subsequently repay the line of credit from the disposition of Properties or the issuance of additional equity or debt securities. Utilizing this strategy during the first three months of 2000, the Company: - obtained new mortgage financing on eleven previously unencumbered properties and received net proceeds of $147.7 million; - disposed of eleven properties (including the sale of the Company's entire interest in two Unconsolidated Properties) and received net proceeds of $96.6 million; - issued approximately 0.1 million Common Shares and received net proceeds of $6.9 million; and - issued the 8.50% Series B and C Cumulative Convertible Redeemable Preference Units and received net proceeds of $64.3 million. All of these proceeds were utilized to either: - repay the line of credit; - repay mortgage indebtedness on certain Properties; - provide funding for properties in the development and/or earnout stage including the joint venture agreements; and/or - purchase one additional property. During the quarter ended March 31, 2000, the Company: - repaid approximately $12.8 million of mortgage indebtedness on three Properties; - settled on a $100 million interest rate protection agreement and received approximately $7.1 million in connection therewith. This amount is being amortized over the life of the financing for the eleven previously unencumbered Properties that occurred in March 2000; - funded $48.4 million related to the development, earnout and joint venture agreements; - purchased one Property for a total purchase price of approximately $10.3 million; and - funded $1.25 million to acquire an additional ownership interest in LFT's Guilford portfolio. As of March 31, 2000, the Company had total indebtedness of approximately $5.4 billion, which included mortgage indebtedness of $3.1 billion (including premiums of $3.1 million), of which $837.4 million represented tax-exempt bond indebtedness, and unsecured debt of $2.3 billion (including net discounts and premiums in the amount of $2.2 million), of which $127.8 million represented tax-exempt bond indebtedness. 20 EQUITY RESIDENTIAL PROPERTIES TRUST PART I ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Subsequent to March 31, 2000 and through May 10, 2000, the Company: - repaid the outstanding mortgage balances on 53 Properties totaling approximately $91.6 million; - disposed of three properties for a total sales price of $34.4 million; - acquired one property containing 442 units for a total purchase price of approximately $83.5 million; and - issued the 8.375% Series D Cumulative Convertible Redeemable Preference Units and received net proceeds of $20.5 million. During the remainder of 2000, the Company expects to fund $71.9 million related to the development, earnout and joint venture agreements. In connection with one joint venture agreement, the Company has an obligation to fund up to an additional $20 million to guarantee third party construction financing. The Company has a policy of capitalizing expenditures made for new assets, including newly acquired properties and the costs associated with placing these assets into service. Expenditures for improvements and renovations that significantly enhance the value of existing assets or substantially extend the useful life of an asset are also capitalized. Expenditures for in-the-unit replacement-type items such as appliances, draperies, carpeting and floor coverings, mechanical equipment and certain furniture and fixtures is also capitalized. Expenditures for ordinary maintenance and repairs are expensed to operations as incurred. With respect to acquired properties, the Company has determined that it generally spends $1,000 per unit during its first three years of ownership to fully improve and enhance these properties to meet the Company's standards. In regard to replacement-type items described above, the Company generally expects to spend $250 per unit on an annual recurring basis. During the quarter ended March 31, 2000, total capital expenditures for the Company approximated $28.2 million. Of this amount, approximately $5.2 million, or $58 per unit, related to capital improvements and major repairs for the 1998, 1999 and 2000 Acquired Properties. Capital improvements and major repairs for all of the Company's pre-EQR IPO properties and 1993, 1994, 1995, 1996 and 1997 Acquired Properties approximated $6.6 million, or $53 per unit. Capital spent for replacement-type items approximated $12.1 million, or $57 per unit. In addition, approximately $2.7 million was spent on nine specific assets related to major renovations and repositioning of these assets. Also included in total capital expenditures was approximately $1.0 million expended for non-real estate additions such as computer software, computer equipment, and furniture and fixtures and leasehold improvements for the Company's property management offices and its corporate headquarters, $0.3 million spent on commercial/other assets and $0.3 million spent on the Partially Owned Properties. Such capital expenditures were primarily funded from working capital reserves and from net cash provided by operating activities. Total capital expenditures for the remaining portion of 2000 are estimated to be approximately $90.0 million. Minority Interests as of March 31, 2000 increased by $59.8 million when compared to December 21 EQUITY RESIDENTIAL PROPERTIES TRUST PART I ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) 31, 1999. The primary factors that impacted this account during the quarter were: - distributions declared to Minority Interests, which amounted to $9.5 million for the quarter (excluding preference unit/interest distributions); - the allocation of income from operations in the amount of $7.1 million; - the allocation of Minority Interests from Partially Owned Properties in the amount of $1.1 million; - the conversion of OP Units into Common Shares; and - the issuance of Common Shares, OP Units and Preference Interests during the quarter ended March 31, 2000. Total distributions paid in April 2000 amounted to approximately $128.0 million, which included distributions declared for the quarter ended March 31, 2000. The Company expects to meet its short-term liquidity requirements, including capital expenditures related to maintaining its existing Properties and certain scheduled unsecured note and mortgage note repayments, generally through its working capital, net cash provided by operating activities and borrowings under its line of credit. The Company considers its cash provided by operating activities to be adequate to meet operating requirements and payments of distributions. The Company also expects to meet its long-term liquidity requirements, such as scheduled unsecured note and mortgage debt maturities, property acquisitions, financing of construction and development activities and capital improvements through the issuance of unsecured notes and equity securities including additional OP Units as well as from undistributed FFO and proceeds received from the disposition of certain Properties. In addition, the Company has certain uncollateralized Properties available for additional mortgage borrowings in the event that the public capital markets are unavailable to the Company or the cost of alternative sources of capital to the Company is too high. The Company has a revolving credit facility with Bank of America Securities LLC and Chase Securities Inc. acting as joint lead arrangers to provide the Operating Partnership with potential borrowings of up to $700 million. As of May 10, 2000, $50.0 million was outstanding under this facility bearing interest at a weighted average interest rate of 6.42%. In connection with the Wellsford Merger, the Company provided a $14.8 million credit enhancement with respect to certain tax-exempt bonds issued to finance certain public improvements at a multifamily development project. As of May 10, 2000, this enhancement was still in effect. Pursuant to the terms of a Stock Purchase Agreement with Wellsford Real Properties, Inc. ("WRP Newco"), the Company had agreed to purchase up to 1,000,000 shares of WRP Newco Series A Preferred at $25.00 per share on a standby basis over a three-year period ending on May 30, 2000. This agreement was terminated on May 5, 2000, and, as such, the Company has no further obligations under this agreement. On May 5, 2000, the Company acquired an aggregate principal amount of $25.0 million of 8.25% preferred securities of WRP Convertible Trust I, an affiliate of WRP Newco. These preferred securities are indirectly convertible into WRP Newco common shares under certain circumstances. FUNDS FROM OPERATIONS Funds from Operations ("FFO") represents net income (loss) (computed in accordance with generally accepted accounting principles ("GAAP")), excluding gains or losses from sales of property, 22 EQUITY RESIDENTIAL PROPERTIES TRUST PART I ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. This definition of FFO is in accordance with the National Association of Real Estate Investment Trust's ("NAREIT") recommended definition. NAREIT modified this definition effective January 1, 2000. However, as a result of this modification, no changes were required to the Company's calculation of FFO for either the current or prior periods presented. The Company believes that FFO is helpful to investors as a supplemental measure of the operating performance of a real estate company because, along with cash flows from operating activities, financing activities and investing activities, it provides investors an understanding of the ability of the Company to incur and service debt and to make capital expenditures. FFO in and of itself does not represent cash generated from operating activities in accordance with GAAP and therefore should not be considered an alternative to net income as an indication of the Company's performance or to net cash flows from operating activities as determined by GAAP as a measure of liquidity and is not necessarily indicative of cash available to fund cash needs. The Company's calculation of FFO may differ from the methodology for calculating FFO utilized by other real estate companies and may differ as a result of differences between the Company's and other real estate company's accounting policies for replacement type items and, accordingly, may not be comparable to such other real estate companies. Net income per share and FFO per share and OP Unit are presented giving affect to the Statement of Financial Accounting Standards No. 128 "Earnings Per Share". For the quarter ended March 31, 2000, FFO available to Common Shares and OP Units increased by $24.6 million, or 16.9%, and FFO per share and OP Unit - - diluted increased by $0.11, or 10.2%, when compared to the quarter ended March 31, 1999. The following is a reconciliation of net income to FFO available to Common Shares and OP Units for the quarters ended March 31, 2000 and 1999:
QUARTER ENDED MARCH 31, ------------------------ 2000 1999 ------------------------ STATEMENTS OF FUNDS FROM OPERATIONS Net income $ 101,139 $ 93,554 Adjustments: Allocation to Minority Interests - Operating Partnership 7,096 7,126 Depreciation on real estate assets* 110,081 95,472 Gain on disposition of properties, net (19,998) (21,416) --------- --------- FFO 198,318 174,736 Preferred distributions (28,388) (29,377) --------- --------- FFO available to Common Shares and OP Units $ 169,930 $ 145,359 ========= ========= Weighted average Common Shares and OP Units outstanding - basic 140,264 132,165 ========= ========= FFO per share and OP Unit - basic $ 1.21 $ 1.10 ========= ========= FFO per share and OP Unit - diluted $ 1.19 $ 1.08 ========= =========
* Includes $105,000 and $276,000 related to the Company's share of depreciation from Unconsolidated Properties for the quarters ended March 31, 2000 and 1999, respectively. Excludes $343,000 related to the minority interests' share of depreciation from Partially Owned Properties for the quarter ended March 31, 2000. 23 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS There have been no new or significant developments related to the legal proceedings that were discussed in Part I, Item III of the Company's Form 10-K for the year ended December 31, 1999. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) Exhibits: 4 Amended and Restated 1993 Share Option and Share Award Plan (as last amended January 1, 2000) 12 Computation of Ratio of Earnings to Fixed Charges 27 Financial Data Schedule (B) Reports on Form 8-K: A Report on Form 8-K dated March 24, 2000, providing a tax opinion of Piper Marbury Rudnick & Wolfe. This opinion stated that EQR was organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code for each of the taxable years beginning January 1, 1993 and continuing through December 31, 1999. 24 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. EQUITY RESIDENTIAL PROPERTIES TRUST Date: May 11, 2000 By: /s/ Bruce C. Strohm ------------ -------------------------------- Bruce C. Strohm Executive Vice President, General Counsel and Secretary Date: May 11, 2000 By: /s/ Michael J. McHugh ------------ -------------------------------- Michael J. McHugh Executive Vice President, Chief Accounting Officer and Treasurer 25 EX-4 2 EXHIBIT 4 EXHIBIT 4 EQUITY RESIDENTIAL PROPERTIES TRUST AMENDED AND RESTATED 1993 SHARE OPTION AND SHARE AWARD PLAN (AS LAST AMENDED JANUARY 1, 2000) 1. PURPOSES. The Equity Residential Properties Trust 1993 Share Option and Share Award Plan (the "Plan") was established by Equity Residential Properties Trust, a Maryland real estate investment trust (the "Company"), to secure for the Company and its shareholders the benefits arising from capital ownership by those key employees, officers, trustees and consultants of the Company and its Subsidiaries (as defined below) who are and will be responsible for its future growth and continued success. The Plan is hereby amended and restated to further accomplish those objectives. The Plan will provide a means whereby such individuals may: (i) receive authorized common shares of beneficial interest of the Company ("Shares"), subject to conditions and restrictions described herein and otherwise determined by the Committee (defined below) ("Share Awards"); (ii) acquire Shares pursuant to grants of options to purchase such Shares ("Options"); (iii) acquire Share Appreciation Rights ("SARs") in tandem with or independent of Options referred to in item (ii) above; or (iv) receive dividend equivalent rights with respect to Shares ("Dividend Equivalents"). The term "Subsidiary" means each entity the Company owns or controls directly or indirectly either through voting control or as a general partner, provided that, for purposes of Incentive Stock Options (as defined below) such term shall have the meaning given in Section 424 of the Internal Revenue Code of 1986, amended (the "Code"). 2. ADMINISTRATION. The authority to manage and control the operation and administration of the Plan shall be vested in a Committee (the "Committee") consisting of two or more members of the Board of Trustees of the Company, each of whom is a "disinterested person" as such term is defined in Section 16b-3(c)(2)(i) of the General Rules and Regulations promulgated under the Securities Exchange Act of 1934 (the "Act") (except that, with respect to grants of Options and SARs, such grant or award is made by a Committee consisting of two or more "outside directors" as such term is defined in Treasury Regulation Section 1.162-27(e)(3)), who shall be appointed by, and may be removed by, such Board, provided that the Committee shall have no authority, power or discretion to determine the number or timing of Options granted pursuant to paragraph 3(b) below, or to alter the terms and conditions of Options or Share Awards as set forth therein. Any interpretation of the Plan by the Committee and any decision made by the Committee on any other matter within its discretion is final and binding on all persons. No member of the Committee shall be liable for any action or determination made with respect to the Plan. The day-to-day administration of the Plan may be carried out by an Option Coordinator designated by the General Counsel of the Company. 3. PARTICIPATION. (a) Generally. Subject to the terms and conditions of the Plan, the Committee shall determine and designate from time to time the key employees, officers, trustees and consultants of the Company and its Subsidiaries to whom Share Awards, Options, SARs or Dividend Equivalents are to be granted ("Grantees" and individually, a "Grantee") and the number of Shares subject to such Share Awards, Options, SARs or Dividend Equivalents to be granted to the Grantees. Notwithstanding the foregoing, the maximum number of Shares with 1 respect to which Options and SARs may be granted during any calendar year to any Grantee is 500,000 Shares. (b) BOARD OF TRUSTEES. An Option to purchase 5,000 Shares shall be awarded to each member of the Board of Trustees of the Company on the date of each annual meeting of the Company's shareholders. A Trustee shall become a Grantee in the Plan on the first date on which the Trustee is awarded an Option under the Plan. Trustees who are not members of the Committee may, in addition to Options awarded under this paragraph, also be entitled to Options under paragraph 3(a). (c) ANNUAL INCENTIVE BONUS PLAN. As of a date (the "Bonus Date") selected by the Committee that is not less than 30 days before or after the date on which a bonus (a "Bonus") is earned by an individual under the Company's Annual Incentive Bonus Plan (the "Bonus Plan"), the Committee may, in its discretion, elect to pay all or a portion of such Bonus in the form of a Share Award, Option, SAR or Dividend Equivalent, or some combination thereof, having an aggregate Grant Value (defined below), determined as of the Bonus Date, equal to the cash amount of the Grantee's bonus being so replaced (the "Award Portion"). All grants made pursuant to the foregoing shall be in full satisfaction of the applicable portion of the Award Portion, shall be made without other payment therefor, and shall be governed by paragraphs 5, 6, 7 or 8 hereof, as applicable. Such opportunity provided under this subparagraph (c) is subject to compliance with all applicable federal and state securities laws. (b) VALUE. For all purposes of the Plan: (i) the "Grant Value" of grants made pursuant to paragraph 3(c) shall equal (a) for a Share Award, the Fair Market Value of a Share (as defined below), as of the date of grant, (b) for an Option or SAR, the difference between the Fair Market Value of a Share and the exercise or base price of the Option or SAR, times the number of Shares subject to the Option or SAR; and (c) for a Dividend Equivalent, the Fair Market Value of a Share times the number of Shares subject to the Dividend Equivalent; and (ii) the "Fair Market Value" of a Share as of any date means the closing price of the Shares on the New York Stock Exchange on such date. 4. SHARES SUBJECT TO THE PLAN. Subject to the provisions of paragraph 13, (i) the aggregate number of Shares for which Share Awards, Options and Dividend Equivalents may be granted under the Plan shall not exceed 12,500,000 Shares and (ii) no more than half of the number of Shares described in clause (i) may be subject to Share Awards granted under the Plan. Shares subject to the Plan may be authorized but unissued Shares, Shares now held in the treasury of the Company or Shares hereafter acquired by the Company. In the event that (i) any Option granted under the Plan expires unexercised or is terminated, surrendered or canceled (other than in connection with the exercise of a "Tandem SAR" (defined below)) without being exercised, in whole or in part, for any reason, or (ii) any Tandem SAR grant under the Plan expires unexercised or is terminated, surrendered or canceled (other than in connection with the exercise of its related Option), or (iii) any "Non-Tandem SAR" (defined below) granted under the Plan expires unexercised or is terminated, surrendered or canceled without being exercised, in whole 2 or in part, for any reason, then the number of Shares then subject to the Option or SAR, or the unexercised, terminated, surrendered, forfeited, canceled or reacquired portion thereof, shall be added to the remaining number of Shares available for grant under the Plan unless the Plan shall have terminated. 5. SHARE AWARDS. This paragraph 5 sets forth specific terms and conditions applicable to Share Awards under the Plan. (a) CONDITIONS AND RESTRICTIONS. Share Awards shall be subject to the following conditions and/or restrictions: (i) A Share Award granted under paragraph 3(a) shall be subject to the conditions that it is subject to a minimum vesting period of one year from the date of grant and it will be forfeited to the Company upon the Grantee's termination of employment with the Company within one year from the date of grant of the Share Award ("Date of Grant'), and may be subject to such further conditions and restrictions established by the Committee at the Date of Grant (including conditions requiring employment by the Grantee for a period in excess of one year). (ii) A Share Award granted under paragraph 3(c) shall be forfeited to the Company upon the Grantee's termination of employment with the Company within two years from the Date of Grant, unless (A) such Grantee has five years of service for vesting purposes under the Equity Residential Properties Trust Advantage Retirement Plan at the time of such termination of employment, (B) such termination of employment occurs other than involuntarily and for "cause" (as determined by the Committee in its discretion), and (C) within one year following such termination of employment, the Grantee does not become employed by a competitor of the Company. (iii) The Committee may, but need not, establish performance goals to be achieved within such performance periods as may be selected by it in its sole discretion, using such measures of the performance of the Company and/or its Subsidiaries as it may select. Performance-based Share Awards will be fully vested in the Grantee at the discretion of the Committee, but in no event earlier than upon the one-year anniversary of the date of the grant, provided that the Grantee's employment with the Company has not been terminated. (iv) Notwithstanding the foregoing, the restrictions set forth in the preceding paragraphs (i), (ii) and (iii) shall immediately lapse such that they are of no effect: (A) in the event of the termination of a Grantee's employment because of the Grantee's "Disability" (as defined below) or death, (B) in connection with the Grantee's retirement at or after age 62, (C) upon a "Change in Control" of the Company or (D) under circumstances deemed to warrant such treatment by the Committee. For purposes of the Plan, "Plan Administrator" shall mean the President and Chief Executive Officer of the Company and any one member of the Committee, or the full Committee. Notwithstanding the foregoing, where the affected Grantee is a "covered employee" for purposes of Section 162(m) of the Code, (i) any authority of the Plan Administrator under the Plan may only be exercised if the existence of such authority would not cause the related Share Award, Option or SAR to fail to constitute performance based compensation on its Date of Grant under Treasury Regulation Section 1.162-27; and (ii) "Plan Administrator" shall mean only the full Committee if the exercise of such authority by the President and Chief Executive Officer and any one member of the Committee would adversely affect the grant's status as performance 3 based compensation and its exercise by the full Committee would not so affect such status. For purposes of this Plan, "Disability" shall mean a physical or mental condition that entitles a Participant to benefits under the Employer-sponsored long-term disability plan in which he or she participates, as determined by the Plan Administrator in its sole and absolute discretion. For purposes of the Plan, a "Change in Control" shall mean any of the following events: (A) An acquisition (other than directly from the Company) of any voting securities of the Company (the "Voting Securities") by any "Person" (as the term person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act")), immediately after which such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of 30% or more of the combined voting power of the Company's then outstanding Voting Securities; PROVIDED, HOWEVER, that in determining whether a Change in Control has occurred, Voting Securities which are acquired in a "Non-Control Acquisition" (as hereinafter defined) shall not constitute an acquisition which would cause a Change in Control. A "Non-Control Acquisition" shall mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof) maintained by (x) the Company or (y) any corporation or other Person of which a majority of its voting power or its equity securities or equity interest is owned directly or indirectly by the Company (a "Subsidiary"), (ii) the Company or any Subsidiary or (iii) any Person in connection with a "Non-Control Transaction" (as hereinafter defined); (B) Approval by stockholders of the Company of: (I) A merger, consolidation or reorganization involving the Company, unless: (a) the stockholders of the Company, immediately before such merger, consolidation or reorganization, own, directly or indirectly, immediately following such merger, consolidation or reorganization, at least seventy percent (70%) of the combined voting power of the outstanding Voting Securities of the corporation resulting from such merger or consolidation or reorganization (the "Surviving Corporation") in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, consolidation or reorganization; and (b) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation or reorganization constitute at least a majority of the members of the board of directors of the Surviving Corporation or a corporation beneficially owning, directly or indirectly, a majority of the Voting Securities of the Surviving Corporation; (A transaction described in clauses (a) and (b) shall herein be referred to as a "Non-Control Transaction); 4 (II) A complete liquidation or dissolution of the Company; or (III) An agreement for the sale or other disposition of all or substantially all of the assets of the Company to any Person (other than to an entity of which the Company directly or indirectly owns at least 70% of the Voting Securities). Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person (the "Subject Person") acquired Beneficial Ownership of more than the permitted amount of the outstanding Voting Securities as a result of the acquisition of Voting Securities by the Company which, by reducing the number of Voting Securities outstanding, increases the proportional number of shares Beneficially Owned by the Subject Person, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company, and after such share acquisition by the Company, the Subject Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the then outstanding Voting Securities Beneficially Owned by the Subject Person, then a Change in Control shall occur. (C) The rejection by the voting Beneficial Owners of the outstanding Shares of the entire slate of trustees that the Board proposes at a single election of trustees; or (D) The rejection by the voting Beneficial Owners of the outstanding Shares of one-half or more of the trustees that the Board proposes over any two or more consecutive elections of trustees. (b) RIGHTS OF GRANTEE. The Grantee shall be entitled to all of the rights of a shareholder with respect to the Share Awards including the right to vote such Shares and to receive dividends and other distributions payable with respect to such Shares from and after the Date of Grant; provided that any securities or other property (but not cash) received in any such distribution with respect to a Share Award that is still subject to the restrictions in paragraphs (a)(i), (ii), (iii) or (iv) above, shall be subject to all of the restrictions set forth herein with respect to such Share Award. (c) ISSUANCE. Certificates for the Share Award shall be issued in the Grantee's name and shall be held in escrow by the Company, with stock powers for such Shares executed in blank by the Grantee, until all restrictions lapse or such Shares are forfeited as provided herein. A certificate or certificates representing a Share Award as to which restrictions have lapsed shall be delivered to the Grantee upon such lapse. 6. SHARE OPTIONS. This paragraph 6 addresses specific terms and conditions for Share Options. (a) ISO/NQSO. Any Option to purchase Shares granted under paragraph 3(a) that satisfies all of the requirements of Section 422 of the Code, may be designated by the Committee as an "Incentive Stock Option." Options that are not so designated, or that do not satisfy the requirements of Section 422 of the Code or that are granted under paragraph 3(b) shall not constitute Incentive Stock Options and shall be Non-Qualified Share Options. 5 (b) EXERCISE PRICE. The Option price of an Incentive Stock Option shall not be less than the Fair Market Value of a Share on the date the Option is awarded under the Plan and, with respect to a Grantee who owns on the Date of Grant more than 10% of the Company's Shares, shall not be less than 110% of its Fair Market Value on such date. The price at which a Share may be purchased pursuant to the exercise of any Non-Qualified Share Option shall not be less than 100% of its Fair Market Value on the date the Option is awarded under the Plan. (c) GENERAL EXERCISABILITY. Each Option granted under paragraph 3(a) shall be exercisable, either in whole or in part, at such time or times as shall be determined by the Committee at the time the Option is granted or at such earlier times as the Committee shall subsequently determine, but in no event later than the Option's "Expiration Date" (defined below). The Committee may establish performance goals to be achieved within such periods as may be selected by it in its discretion using such measures of performance of the Company and/or its subsidiaries as it may select. Unless the Committee provides for earlier exercisability at the time of grant or subsequently, each Option granted under paragraph 3(b) shall be exercisable, either in whole or in part, (i) with respect to 1,667 of the Shares at any time on or after six (6) months from the Date of Grant, (ii) with respect to an additional 1,667 of the Shares at any time on or after the first anniversary of the Date of Grant and (iii) with respect to the remaining Shares at any time on or after the second anniversary of the Date of Grant, but, in each case, not after the Option's Expiration Date. The "Expiration Date" with respect to an Option or any portion thereof granted under paragraph 3(a) means the date established by the Committee at the Date of Grant (subject to any earlier termination by the Committee), but in no event later than the date which is ten (10) years after the date on which the Option is granted. The Expiration Date with respect to an Option or any portion thereof granted under paragraph 3(b) means the date which is ten (10) years after the date on which the Option is granted. All rights to purchase Shares pursuant to an Option shall cease as of the Option's Expiration Date. (d) ISO EXERCISABILITY. Shares with respect to which Incentive Stock Options are exercisable for the first time by a Grantee during any calendar year may not exceed one hundred thousand dollars ($100,000). Any Options that are intended to be Incentive Stock Options but that become exercisable in excess of such amount shall be deemed to be a Non-Qualified Stock Option to the extent of such excess. (e) ACCELERATION. Notwithstanding the provisions of paragraph (c), each Option granted under the Plan to an individual and as to which the Expiration Date has not occurred shall be immediately and fully exercisable, for the period indicated, in the event of (I) a Change in Control of the Company (in which case, subject to clause (i) of paragraph 13, it shall be exercisable until its Expiration Date), or (II) the termination of a Grantee's "Service" (defined below): (i) with respect to a Grantee who is an employee, because of the Grantee's death (in which case it shall be exercisable until the earlier of (A) the first anniversary of such termination or (B) its Expiration Date, and shall be exercisable by the person or persons to whom the Grantee's right passes by will or by the laws of descent and distribution), or (ii) with respect to a Grantee who is an employee, because of Disability, or in connection with his retirement at or after age 62 (in which case it shall be exercisable until its Expiration Date). 6 For purposes of the Plan, a Grantee's "Service" shall be terminated when the Grantee is no longer an employee, consultant, trustee or director of the Company or an entity designated as an "Extended Company" by the Committee. (f) OTHER TERMINATION. If the Service of a Grantee who is an employee terminates other than as described above and other than for "good cause" (for purposes of the Plan, as determined by the Committee in its reasonable discretion), or the Service of a Grantee who is a consultant or a member of the Board of Trustees terminates for any reason other than for good cause, his Option shall not become exercisable with respect to any additional Shares unless the Committee accelerates the exercisability of the Option pursuant to paragraph (c), and the Option shall be exercisable until the earlier of (i) 90 days after such termination unless extended by the Committee or (ii) its Expiration Date. (g) GOOD CAUSE. If the Service of a Grantee terminates for good cause, his Option shall expire immediately. The Committee may establish guidelines for determining whether a Grantee's Service has terminated for good cause and communicate such guidelines in the Grantee's award agreement, or in any other manner, including but not limited to such term sheets and supplements hereto as are approved by the Committee from time to time. (h) EXERCISE PROCEDURE. A Grantee may exercise an Option by giving written notice thereof prior to the Option's expiration to the Secretary of the Company at the principal executive offices of the Company. Contemporaneously with the delivery of notice with respect to exercise of an Option, the full purchase price of the Shares purchased pursuant to the exercise of the Option, together with any required state or federal withholding taxes, shall be paid in cash, by tender of share certificates in proper form for transfer to the Company valued at the Fair Market Value of the Shares on the preceding day, by any combination of the foregoing or with any other consideration. (i) SUSPENSION OF RIGHT. Notwithstanding any other provision of this paragraph 6, the General Counsel of the Company, in his sole and absolute discretion, may suspend the right of any person to exercise an Option for up to 30 days if the Grantee's Service has been or, in the sole and absolute judgment of the General Counsel of the Company, may be suspended or terminated for any reason. (j) PARTIES ENTITLED TO EXERCISE OPTIONS. An Option may be exercised only by the Grantee (or by a legatee or legatees of such Option under his last will), by his executors, personal representatives or distributees, by an assignee or assignees, or by a transferee to the extent that a transfer of the Option is permitted pursuant to paragraph 11(b). 7. SHARE APPRECIATION RIGHTS. The Committee may grant an SAR to a Grantee who is awarded an Option under paragraph 3(a) or 3(b) or to any other key employee, officer, trustee or consultant of the Company. Each SAR shall be subject to such restrictions and conditions and other terms as the Committee may specify when the SAR is granted. (a) GRANT. An SAR granted at the time a related Option is granted may be granted either in addition to the related Option ("Non-Tandem SAR") or in tandem with the related Option ("Tandem SAR"). An SAR not related to an Option will be subject to the provisions applicable to Non-Tandem SARs. At the time a Non-Tandem SAR is granted, the Committee shall specify the base price of the Shares to be used in connection with the calculation described in subsection (b)(i) below. The base price of a Non-Tandem SAR shall be a percentage (as low as zero) of the Fair Market Value of a Share on the date of grant. The number of Shares subject to a 7 Tandem SAR shall not exceed one for each Share subject to the related Option. No Tandem SAR may be granted to a key employee in connection with an Incentive Stock Option in a manner that will disqualify the Incentive Stock Option under Section 422 of the Code unless the key employee consents thereto. (b) VALUE. Upon exercise, an SAR shall entitle the Grantee to receive from the Company the number of Shares (or cash equivalent thereof) having an aggregate Fair Market Value equal to the following: (i) in the case of a Non-Tandem SAR, the excess of the Fair Market Value of one Share as of the date on which the SAR is exercised over the base Share price specified in such SAR, multiplied by the number of Shares then subject to the SAR, or the portion thereof being exercised. (ii) in the case of a Tandem SAR, the excess of the Fair Market Value of one Share as of the date on which the SAR is exercised over the exercise price per Share specified in such Option, multiplied by the number of Shares then subject to the Option, or the portion thereof as to which the SAR is being exercised. Cash shall be delivered in lieu of any fractional shares. The Committee, in its discretion, shall be entitled to cause the Company to elect to settle any part or all of its obligation arising out of the exercise of an SAR by the payment of cash in lieu of all or part of the Shares it would otherwise be obligated to deliver in an amount equal to the Fair Market Value of such Shares on the date of exercise. So long as the Grantee is subject to Section 16(b) of the Securities Exchange Act of 1934 with respect to securities of the Company, the Committee may not cause the Company to elect to settle any part or all of its obligation arising out of the exercise of an SAR by the payment of cash pursuant to this subparagraph, unless (A) such exercise occurs no earlier than six months after the date of grant of the SAR, and (B) the Committee approves such form of settlement. (c) EXERCISE OF TANDEM SARs. A Tandem SAR shall be exercisable during such time, and be subject to such restrictions and conditions and other terms, as the Committee shall specify at the time such Tandem SAR is granted which restrictions and conditions and other terms need not be the same for all Grantees. Notwithstanding the preceding sentence, the Tandem SAR shall be exercisable only at such time as the Option to which it relates is exercisable and shall be subject to the restrictions and conditions and other terms applicable to such Option. Upon the exercise of a Tandem SAR, the unexercised Option, or the portion thereof to which the exercised portion of the Tandem SAR is related, shall expire. The exercise of any Option shall cause the expiration of the Tandem SAR related to such Option, or portion thereof, that is exercised. (d) NON-TANDEM SAR EXERCISABILTY. Each Non-Tandem SAR granted under the Plan shall be exercisable, either in whole or in part, at such time or times as shall be determined by the Committee at the time the Non-Tandem SAR is granted or at such earlier times as the Committee shall subsequently determine, but in no event later than the Non-Tandem SAR's "Expiration Date" (defined below). The Committee may establish performance goals to be achieved within such periods as may be selected by it in its discretion using such measures of performance of the Company and/or its subsidiaries as it may select." The "Expiration Date" with respect to a Non-Tandem SAR or any portion thereof granted under the 8 Plan means the date established by the Committee at the Date of Grant (subject to any earlier termination by the Committee), but in no event later than the date which is ten (10) years after the date on which the Non-Tandem SAR is granted. (e) ACCELERATION. Notwithstanding the above, each SAR granted under the Plan to an individual and as to which the Expiration Date has not occurred shall be immediately and fully exercisable, for the period indicated, in the event of (I) a Change in Control of the Company (in which case it shall be exercisable until its Expiration Date), or (II) the termination of a Grantee's Service: (i) with respect to a Grantee who is an employee, because of the Grantee's death (in which case it shall be exercisable until the earlier of (A) the first anniversary of such termination or (B) its Expiration Date, and shall be exercisable by the person or persons to whom the Grantee's right passes by will or by the laws of descent and distribution), or (ii) with respect to a Grantee who is an employee, because of Disability, or in connection with his retirement at or after age 62 (in which case it shall be exercisable until its Expiration Date). (f) OTHER TERMINATION. If the Service of a Grantee who is an employee terminates other than as described above and other than for good cause, or the Service of a Grantee who is a consultant or a member of the Board of Trustees terminates for any reason other than for good cause, his SAR shall not become exercisable with respect to any additional Shares unless the Committee accelerates the exercisability of the SAR pursuant to paragraph (d), and the SAR shall be exercisable until the earlier of (i) 90 days after such termination unless extended by the Committee or (ii) its Expiration Date. (g) GOOD CAUSE. If the Service of a Grantee terminates for good cause, his SAR shall expire immediately. The Committee may establish guidelines for determining whether a Grantee's Service has terminated for good cause and communicate such guidelines in the Grantee's award agreement, or in any other manner, including but not limited to such term sheets and supplements hereto as are approved by the Committee from time to time. (h) EXERCISE PROCEDURE. A Grantee may exercise an SAR by giving written notice thereof prior to the SAR expiration to the Secretary of the Company at the principal executive offices of the Company. Contemporaneously with the delivery of notice with respect to exercise of an SAR, any required state or federal withholding taxes shall be paid in cash, by tender of share certificates in proper form for transfer to the Company valued at the Fair Market Value of the Shares on the preceding day, by any combination of the foregoing or with any other consideration." (i) PARTIES ENTITLED TO EXERCISE SARs. An SAR may be exercised only by the Grantee (or by a legatee or legatees of such SAR under his last will), by his executors, personal representatives or distributees, by an assignee or assignees, or by a transferee to the extent that a transfer of the SAR is permitted pursuant to paragraph 11(b). (j) SETTLEMENT OF SARs. As soon as is reasonably practicable after the exercise of an SAR, the Company shall (i) issue, in the name of the Grantee, stock certificates representing 9 the total number of full Shares to which the Grantee is entitled pursuant to subparagraph 7(d) hereof and cash in an amount equal to the Fair Market Value, as of the date of exercise, of any resulting fractional Shares, and (ii) if the Committee causes the Company to elect to settle all or part of its obligations arising out of the exercise of the SAR in cash, deliver to the Grantee an amount in cash equal to the Fair Market Value, as of the date of exercise, of the Shares it would otherwise be obligated to deliver. (k) SUSPENSION OF RIGHT. Notwithstanding any other provisions of this paragraph 7, the General Counsel of the Company, in his sole and absolute discretion, may suspend the right of any person to exercise an SAR for up to 30 days if the Grantee's Service has been or, in the sole and absolute judgment of the General Counsel of the Company, may be suspended or terminated for any reason. (l) PARTIES ENTITLED TO EXERCISE SARs. An SAR may be exercised only by the Grantee, or by a legatee or legatees of such SAR under his last will, by his executors, personal representatives or distributees, or by a transferee to the extent that a transfer of the SAR is permitted pursuant to paragraph 11(b). 8. DIVIDEND EQUIVALENTS. A Dividend Equivalent shall be related to a number of Shares specified at the time of grant and shall entitle the holder to cash payments that equal the cash dividend, if any, paid with respect to such Shares provided that the Dividend Equivalent is outstanding on the record date thereof and that it is not subject to any condition limiting the Grantee's right to receive such payments. A Dividend Equivalent shall be subject to such restrictions and conditions and other terms including those relating to expiration of forfeiture, as the Committee shall specify at the time such Dividend Equivalent is granted. A Dividend Equivalent granted pursuant to subsection 3(c) shall not be subject to any restriction or condition limiting the Grantee's right to receive the cash payment discussed above from and after the second anniversary of its Date of Grant. Notwithstanding the foregoing, any restriction or condition (other than expiration or forfeiture) limiting the Grantee's right to receive the cash payment described above shall lapse under the same circumstances in which option exercisability accelerates as described in paragraph 6(e) or (f). 9. WITHHOLDING. Whenever under the Plan a Grantee recognizes income with respect to any Share Award, Option, SAR or Dividend Equivalent (the "Award") hereunder, the Company shall have the right to withhold from amounts payable to such recipient in any manner, as necessary to satisfy all federal, state and local payroll tax withholding requirements. Without limiting the generality of the foregoing, (i) a Grantee may elect to satisfy all or part of the foregoing withholding requirements by delivery of unrestricted Shares owned by the Grantee having a Fair Market Value (determined as of the date of such delivery by the Grantee) equal to the amount to be so withheld; and (ii) the Committee may permit any such delivery to be made by withholding Shares otherwise issuable pursuant to the award giving rise to the tax withholding obligation (in which event the date of delivery shall be deemed the date such award was exercised). If Shares are being surrendered by or withheld for a Grantee who is subject to Section 16 of the Act, the foregoing shall be accomplished in a manner consistent with Rule 16b-3(e) thereunder. 10 10. COMPLIANCE WITH APPLICABLE LAWS. Notwithstanding any other provision in the Plan, the Company shall have no liability to issue any Shares under the Plan unless such issuance would comply with all applicable laws and applicable requirements of any securities exchange or similar entity. Prior to the issuance of any Shares under the Plan, the Company may require a written statement that the recipient is acquiring the Shares for investment and not for the purpose of or with the intention of distributing the Shares. Notwithstanding any other provision of the Plan, a Grantee or such other persons as are entitled to exercise an Option or SAR (as described in paragraph 11(b)) will be prohibited from exercising the Option or SAR to the extent that the General Counsel of the Company has determined that purchases and sales of the Company securities shall be restricted because of the existence or potential existence of material nonpublic information concerning the Company, whether or not such determination has been communicated to the Grantee or such persons. If the General Counsel of the Company has made such a determination and the Grantee or such persons give notice of an intent to exercise the Option or SAR (and satisfy all other conditions to the exercise thereof), the General Counsel of the Company shall advise the Grantee or such persons concerning such restrictions, and the effective time of the Grantee's exercise shall be postponed to the earlier of the date that the General Counsel of the Company determines that such restriction is no longer necessary with respect to exercises of the Option or SAR, or the day before the date that the Option or SAR expires. 11. TRANSFERABILITY. This paragraph 11 shall govern the transferability of the various benefits under this Plan. (a) SHARE AWARDS. The Shares subject to Share Awards granted under paragraph 3(a) or 3(c) shall not be sold, assigned, pledged or otherwise transferred, voluntarily or involuntarily, by the Grantee, while they are subject to the restrictions described in paragraph 5(a). (b) OPTIONS, SARs AND DIVIDEND EQUIVALENTS. Options, SARs and Dividend Equivalents granted under the Plan are not transferable except (i) by will or by the laws of descent and distribution or, to the extent not inconsistent with the applicable provisions of the Code, pursuant to a qualified domestic relations order (as that term is defined in the Code); and (ii) a Grantee may transfer all or part of an Option that is not an Incentive Stock Option, or an SAR, to the Grantee's spouse, child or children, grandchild or grandchildren, or other relatives or to a trust for the benefit of the Grantee and/or any of the foregoing; provided that the transferee thereof shall hold such Option or SAR subject to all of the conditions and restrictions contained herein and otherwise applicable to the Option or SAR, and that, as a condition to such transfer, the Company may require the transferee to agree in writing (in a form acceptable to the Company) that the transfer is subject to such conditions and restrictions. Except as provided in paragraphs 6(e) and 7(f), Options and SARs may be exercised during the lifetime of the Grantee only by the Grantee or the Grantee's transferees as provided in this paragraph, and after the death of the Grantee, only as provided herein. 12. EMPLOYMENT AND SHAREHOLDER STATUS. The Plan does not constitute a contract of employment or continued service, and selection as a Grantee will not give any employee or Grantee the right to be retained in the employ of the Company or any Subsidiary or the right to continue as a trustee of the Company. Any Option or a Share Award granted under the Plan shall not confer upon the holder thereof any right as a shareholder of the Company prior to the issuance of Shares pursuant to the exercise thereof. No person entitled to exercise any Option or SAR granted under the Plan shall have any of the rights or privileges of a shareholder of record with 11 respect to any Shares issuable upon exercise of such Option or SAR until certificates representing such Shares have been issued and delivered. If the redistribution of Shares is restricted pursuant to paragraph 13, certificates representing such Shares may bear a legend referring to such restrictions. 13. ADJUSTMENTS TO NUMBER OF SHARES SUBJECT TO THE PLAN AND TO TERMS OF OPTIONS, SARS AND DIVIDEND EQUIVALENTS. Subject to the following provisions of this paragraph 13, in the event of any change in the outstanding Shares by reason of any share dividend, split, recapitalization, merger, consolidation, combination, exchange of shares or other similar corporate change, the aggregate number and kind of Shares reserved for issuance under the Plan or subject to Options, SARs or Dividend Equivalents outstanding or to be granted under the Plan shall be proportionately adjusted so that the value of each such unit shall not be changed, and the terms of any outstanding Option, SAR or Dividend Equivalent may be adjusted by the Committee in such manner as it deems equitable, provided that, (i) if, in connection with a transaction, Shares are changed into an ownership interest in the Company or another entity, which interest is registered under the Act, then each such unit shall be converted into an identical unit relating to such interest (it being the intent of the Company that, upon a merger, consolidation or reorganization involving the Company in which the Company's Shares are exchanged or otherwise converted into publicly traded shares of the acquiring entity (or affiliates thereof)), all Shares, Options, SARs and Dividend Equivalents granted under this Plan shall be automatically converted into fully vested similar interests in the acquiring entity (or affiliates thereof); (ii) in no event shall the Option price for a Share be adjusted below the par value of such Share, and (iii) in no event shall any fraction of a Share be issued upon the exercise of an Option. Shares subject to a Share Award shall be treated in the same manner as other outstanding Shares; provided that any conditions and restrictions applicable to a Share Award shall continue to apply to any Shares, other security or other consideration received in connection with the foregoing. 14. AGREEMENT WITH COMPANY. At the time of a grant, the Committee may require a Grantee to enter into an agreement with the Company in a form specified by the Committee agreeing to the terms and conditions of the Plan and to such additional terms and conditions, not inconsistent with the Plan, as the Committee may, in its sole discretion, prescribe. 15. TERM OF PLAN. The Plan was effective May 21, 1993. This amendment and restatement is effective as of January 1, 2000. No Options, Share Awards or Share Appreciation Rights may be granted under the Plan after May 21, 2003 or, if earlier, the date on which the Plan is terminated pursuant to paragraph 16. 16. AMENDMENT AND TERMINATION OF PLAN. Subject to any approval of the shareholders of the Company which may be required by law, the Board of Trustees of the Company may at any time amend, suspend or terminate the Plan. No amendment, suspension or termination of the Plan shall alter or impair any Share Award, Option, SAR or Dividend Equivalent previously granted under the Plan without the consent of the holder thereof. No amendment requiring shareholder approval under Section 240.16b-3 of the Act, Treasury Regulation Section 1.162-27 or Section 422 of the Code shall be valid unless such shareholder approval is secured as provided therein. 12 17. HEADINGS, REFERENCES AND CONSTRUCTION. The headings to sections of this Plan have been included for the convenience of reference only. This Plan shall be interpreted and construed in accordance with the laws of the State of Maryland. 13 EX-12 3 EXHIBIT 12 EQUITY RESIDENTIAL PROPERTIES TRUST CONSOLIDATED HISTORICAL EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS RATIO
HISTORICAL ------------------------------------------------------------------------ 3/31/00 3/31/99 12/31/99 12/31/98 ------------------------------------------------------------------------ (Amounts in thousands) REVENUES Rental income $ 473,547 406,062 $ 1,711,738 $ 1,293,560 Fee income - outside managed 1,298 1,234 4,970 5,622 Interest income - investment in mortgage notes 2,762 2,895 12,559 18,564 Interest and other income 7,803 5,946 23,851 19,250 ----------------- ---------------- ---------------- -------------- Total revenues 485,410 416,137 1,753,118 1,336,996 ----------------- ---------------- ---------------- -------------- EXPENSES Property and maintenance 113,868 97,047 414,026 326,733 Real estate taxes and insurance 48,334 42,048 171,289 126,009 Property management 18,914 14,201 61,626 53,101 Fee and asset management 1,066 867 3,587 4,279 Depreciation 111,886 96,901 408,688 301,869 Interest: Expense incurred 95,111 79,197 337,189 246,585 Amortization of deferred financing costs 1,341 845 4,084 2,757 General and administrative 6,698 5,767 22,296 20,631 ----------------- ---------------- ---------------- -------------- Total expenses 397,218 336,873 1,422,785 1,081,964 ----------------- ---------------- ---------------- -------------- Income before extraordinary items $ 88,192 $ 79,264 $ 330,333 $ 255,032 ================= ================ ================ ============== Combined Fixed Charges and Preferred Distributions: Interest and other financing costs $ 95,111 $ 79,197 $ 337,189 $ 246,585 Amortization of deferred financing costs 1,341 845 4,084 2,757 Preferred distributions 28,388 29,377 113,196 92,917 ----------------- ---------------- ---------------- -------------- TOTAL COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS $ 124,840 $ 109,419 $ 454,469 $ 342,259 ================= ================ ================ ============== EARNINGS BEFORE COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS $ 184,644 $ 159,306 $ 671,606 $ 504,374 ================= ================ ================ ============== FUNDS FROM OPERATIONS BEFORE COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS * $ 294,725 $ 254,778 $ 1,074,072 $ 801,065 ================= ================ ================ ============== RATIO OF EARNINGS BEFORE COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS TO COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS 1.48 1.46 1.48 1.47 ================= ================ ================ ============== RATIO OF FUNDS FROM OPERATIONS BEFORE COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS TO COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS 2.36 2.33 2.36 2.34 ================= ================ ================ ============== - ------------------------------------------------------------------------------------------------------------------------------------ * Includes the Company's share of depreciation from Unconsolidated Properties $ 105 $ 276 $ 1,009 $ 183 ================= ================ ================ ============== * Excludes non-real estate depreciation $ (1,567) $ (1,705) $ (7,231)$ (5,361) ================= ================ ================ ============== * Excludes the minority interests' share of depreciation from Partially Owned Properties $ (343) $ - $ - $ - ================= ================ ================ ============== HISTORICAL -------------------------------------------------- 12/31/97 12/31/96 12/31/95 -------------------------------------------------- (Amounts in thousands) REVENUES Rental income $ 707,733 $ 454,412 $ 373,919 Fee income - outside managed 5,697 6,749 7,030 Interest income - investment in mortgage notes 20,366 12,819 4,862 Interest and other income 13,282 4,405 4,573 ------------- ------------- -------------- Total revenues 747,078 478,385 390,384 ------------- ------------- -------------- EXPENSES Property and maintenance 176,075 127,172 112,186 Real estate taxes and insurance 69,520 44,128 37,002 Property management 26,793 17,512 15,213 Fee and asset management 3,364 3,837 3,887 Depreciation 156,644 93,253 72,410 Interest: Expense incurred 121,324 81,351 78,375 Amortization of deferred financing costs 2,523 4,242 3,444 General and administrative 14,821 9,857 8,129 ------------- ------------- -------------- Total expenses 571,064 381,352 330,646 ------------- ------------- -------------- Income before extraordinary items $ 176,014 $ 97,033 $ 59,738 ============= ============= ============== Combined Fixed Charges and Preferred Distributions: Interest and other financing costs $ 121,324 $ 81,351 $ 78,375 Amortization of deferred financing costs 2,523 4,242 3,444 Preferred distributions 59,012 29,015 10,109 ------------- ------------- -------------- TOTAL COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS $ 182,859 $ 114,608 $ 91,928 ============= ============= ============== EARNINGS BEFORE COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS $ 299,861 $ 182,626 $ 141,557 ============= ============= ============== FUNDS FROM OPERATIONS BEFORE COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS * $ 453,387 $ 273,800 $ 212,138 ============= ============= ============== RATIO OF EARNINGS BEFORE COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS TO COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS 1.64 1.59 1.54 ============= ============= ============== RATIO OF FUNDS FROM OPERATIONS BEFORE COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS TO COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS 2.48 2.39 2.31 ============= ============= ============== - ---------------------------------------------------------------------------------------------------------- * Includes the Company's share of depreciation from Unconsolidated Properties $ - $ - $ - ============= ============= ============== * Excludes non-real estate depreciation $ (3,118) $ (2,079)$ (1,829) ============= ============= ============== * Excludes the minority interests' share of depreciation from Partially Owned Properties $ - $ - $ - ============= ============= ==============
EX-27 4 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 72,510 0 1,226 0 0 423,616 12,248,827 1,166,702 11,784,166 407,868 5,366,193 0 1,307,041 1,279 4,185,012 11,784,166 477,607 485,410 0 182,182 6,698 0 96,452 88,192 0 88,192 19,998 0 0 79,847 0.57 0.57
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