From: Howard Sipzner [hsipzner@equityone.net] Sent: Thursday, December 12, 2002 3:35 AM To: rule-comments@sec.gov Subject: S7-43-02 VIA E-MAIL December 13, 2002 Mr. Jonathan G. Katz Secretary U.S. Securities and Exchange Commission 450 Fifth Street, NW Washington, DC 20549-0609 Re: Conditions for Use of Non-GAAP Financial Measures (File No. S7-43-02) Dear Mr. Katz: Equity One 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 and 34-46788 ("Releases"). Equity One is a publicly traded real estate investment trust focusing on neighborhood shopping centers in the states of Florida and Texas. We currently have in excess of 6,000 individual shareholders.. Equity One supports the Commission's efforts to reform the use of Non-GAAP 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, Equity One is concerned that one aspect of the proposals could be counterproductive to the interests of investors. Equity One opposes the Commission's proposal that would prohibit the use of Non-GAAP per share information in corporate earnings releases. Equity One supports 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, we use a non-GAAP measure, Funds From Operations (FFO), as an important supplemental indicator of our company's operating profitability. Reporting FFO, as well as other 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. Additionally, investors have advised us that these Non-GAAP per-share measures, including Funds From Operations and Net Asset Value, are important supplemental indicators of a real estate company's operating profitability and financial condition. Additionally, we use EBITDA with appropriate disclosure and footnoting in other useful calculations which investors, financial analysts and rating agencies have requested. We recommend that the final rule allow per share reporting of non-GAAP measures and require that both the numerator (the non-GAAP measure) and the denominator (the applicable diluted number of shares) be reconciled to GAAP net income and the number of diluted shares used to calculate GAAP net income per share respectively. This position agrees with the alternative suggested in "Questions regarding amendments to Item 10 of Regulation S-K, Item 10 of Regulation S-B and Form 20-F" of the Release. Equity One thanks the Commission for the opportunity to comment on this proposal. Please contact me if you have any questions regarding this letter. Respectfully submitted, Howard M. Sipzner Chief Financial Officer Equity One, Inc. 1696 NE Miami Gardens Drive North Miami Beach, FL 33179 Tel: 305-947-1664 x 110 Fax: 305-947-1734 Cell: 305-773-5444 http://www.equityone.net