National Multi Housing Council


December 12, 2002

Mr. Jonathan G. Katz
U.S. Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0609

Re: File No. S7-43-02

Dear Mr. Katz:

The National Multi Housing Council is pleased to have the opportunity to respond to the Securities and Exchange Commission ("Commission") regarding the proposals set forth in Release No. 33-8145. Based in Washington, DC, NMHC is a national association representing the interests of the larger and most prominent apartment firms in the U.S. NMHC's members are the principal officers of firms engaged in all aspects of the apartment industry, including ownership, development, management, and financing. NMHC advocates on behalf of rental housing, conducts apartment-related research, encourages the exchange of strategic business information, and promotes the desirability of apartment living.

We support the Commission's efforts to reform the use of Non-GAAP (Generally Accepted Accounting Principles) financial measures by public companies. We agree with the need to improve the transparency and quality of public disclosures, including pro forma financial information. We agree with most of the Commission's proposals relating to the use of Non-GAAP financial measures. However, the National Multi Housing Council is concerned that one aspect of the proposals could be counterproductive to the interests of investors and we, therefore, oppose the Commission's proposal that would prohibit the use of Non-GAAP per share information in corporate earnings releases.

We support the Commission's proposal that any Non-GAAP financial measure must be reconciled with the comparable GAAP measure. Additionally, we agree that any comparable GAAP measure must be presented with equal or greater prominence of the comparable non-GAAP measure.

However, reporting Non-GAAP measures on only an absolute basis, not on a per-share basis, would be inappropriate since the issuance of shares or the repurchase of shares could affect the absolute measure. We understand that investors see these Non-GAAP per-share measures, including Funds From Operations and Net Asset Value, as important supplemental indicators of a publicly-traded real estate company's operating profitability and financial condition.

The final rule should allow per-share reporting of Non-GAAP measures in earnings releases and other public communications, as long as the company reconciles the financial measure with the comparable GAAP measure in the release.

We thank the Commission for the opportunity to comment on this proposal. Please contact Jim Arbury, NMHC Vice President of Tax, at 202-974-2321 or via e-mail at if you have any questions regarding these comments.

Respectfully submitted,

Clarine Nardi Riddle
Senior Vice President