RREEF America, L.L.C.
VIA E-MAIL December 13, 2002 Mr. Jonathan G. Katz
Re: File No. S7-43-02 Dear Mr. Katz: RREEF America, L.L.C. ("RREEF") 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. RREEF America, L.L.C, a wholly owned subsidiary of Deutsche Bank AG, .is a full service real estate investment advisor with $17.6 billion in real estate assets under management, $2.7 billion of which is in equity REITs. Executive Summary RREEF 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 and agree with most of the Commission's proposals relating to the use of Non-GAAP financial measures. However, we are concerned that one aspect of the proposals could be counterproductive to the interests of investors. RREEF opposes the Commission's proposal that would prohibit the use of Non-GAAP per share information in corporate earnings releases, investor conference calls and web site information. RREEF 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. As an investor, we use Non-GAAP per-share measures, including Funds From Operations ("FFO") per share and Net Asset Value ("NAV") per share, as important supplemental indicators of a real estate company's operating profitability and financial condition. Reporting these measures on an absolute basis only, without considering the impact of a company's issuing or repurchasing shares would be less meaningful to our analysis. We support the requirement in the proposed rule that both the numerator and denominator used in the calculation of these per share amounts be reconciled to comparable GAAP measures. Being able to examine alternative measures of performance, like FFO per share, benefits investors like my company and the clients for whom we manage money. The final rule should allow per-share reporting of Non-GAAP measures in earnings releases and other public communications, so long as the company reconciles the financial measure (the numerator) with the comparable GAAP measure and the number of shares used in the calculation (the denominator) to the number of shares used to calculate GAAP net income per share. RREEF thanks the Commission for the opportunity to comment on this proposal. Please contact me if you have any questions regarding this letter.
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