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 SEPTEMBER 30, 1996
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 36-3877868
(State or Other Jurisdiction of Incorporation (I.R.S. Employer
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 NOVEMBER 12, 1996, 46,493,667 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)
September 30, December 31,
1996 1995
-------------- -------------
ASSETS
Investment in rental property
Land $ 263,020 $ 210,369
Depreciable property 2,484,061 1,976,267
-------------- -------------
2,747,081 2,186,636
Accumulated depreciation (273,395) (217,183)
-------------- -------------
Investment in rental property, net of accumulated depreciation 2,473,686 1,969,453
Real estate held for disposition 11,260 -
Cash and cash equivalents 152,545 13,428
Investment in mortgage notes, net 86,486 87,154
Rents receivable 2,126 1,073
Deposits - restricted 5,501 18,272
Escrow deposits - mortgage 14,953 16,745
Deferred financing costs, net 13,062 12,653
Other assets 25,247 22,482
-------------- -------------
TOTAL ASSETS $ 2,784,866 $ 2,141,260
============== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $ 738,862 $ 561,695
Notes, net 498,761 348,524
Line of credit - 92,000
Accounts payable and accrued expenses 36,063 23,544
Accrued interest payable 14,682 8,354
Due to affiliates 778 1,568
Rents received in advance and other liabilities 16,813 11,138
Security deposits 12,945 10,131
Distributions payable 39,233 30,826
-------------- -------------
TOTAL LIABILITIES 1,358,137 1,087,780
-------------- -------------
Commitments and contingencies
Minority Interests 154,839 168,963
-------------- -------------
Shareholders' equity:
Preferred Shares of beneficial interest,
$.01 par value; 10,000,000 shares authorized:
9 3/8% Series A Cumulative Redeemable Preferred
Shares of Beneficial Interest, liquidation preference
$25 per share, 6,120,000 shares issued and outstanding 153,000 153,000
9 1/8% Series B Cumulative Redeemable Preferred
Shares of Beneficial Interest, liquidation preference
$250 per share, 500,000 shares issued and outstanding 125,000 125,000
9 1/8% Series C Cumulative Redeemable Preferred
Shares of Beneficial Interest, liquidation preference
$250 per share, 460,000 shares issued and outstanding 115,000 -
Common Shares of beneficial interest, $.01 par value,
100,000,000 shares authorized, 45,774,868 shares issued
and outstanding as of September 30, 1996 and 35,011,715
shares issued and outstanding as of December 31, 1995 458 350
Paid in capital 962,647 652,829
Employee notes (5,274) (5,331)
Distributions in excess of accumulated earnings (78,941) (41,331)
-------------- -------------
Total shareholders' equity 1,271,890 884,517
-------------- -------------
Total liabilities and shareholders' equity $ 2,784,866 $ 2,141,260
============== =============
The accompanying notes are an integral part of financial statements.
2
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands except for per share data)
(Unaudited)
NINE MONTHS ENDED SEPTEMBER 30, QUARTERS ENDED SEPTEMBER 30,
------------------------------ ---------------------------
1996 1995 1996 1995
------------------------------ ---------------------------
REVENUES
Rental income $ 327,749 $ 273,723 $ 118,510 $ 94,023
Fee and asset management 4,982 5,461 1,679 1,700
Interest income - investment in mortgage notes 9,084 1,934 3,218 1,934
Interest and other income 2,232 3,652 1,052 1,937
------------ ------------ ------------ -----------
Total revenues 344,047 284,770 124,459 99,594
------------ ------------ ------------ -----------
EXPENSES
Property and maintenance 93,128 82,307 34,183 30,713
Real estate taxes and insurance 32,301 27,357 11,072 8,974
Property management 13,136 10,815 4,336 3,127
Fee and asset management 3,037 2,746 911 806
Depreciation 66,759 51,982 23,826 18,062
Interest:
Expense incurred 58,632 58,141 21,608 19,050
Amortization of deferred financing costs 2,860 2,539 965 837
General and administrative 6,690 6,091 2,313 1,997
------------ ------------ ------------ -----------
Total expenses 276,543 241,978 99,214 83,566
------------ ------------ ------------ -----------
Income before gain on disposition of properties,
extraordinary items and allocation to Minority Interests 67,504 42,792 25,245 16,028
Gain on disposition of properties 2,346 1,542 - 1,542
------------ ------------ ------------ ----------
Income before extraordinary items and allocation
to Minority Interests 69,850 44,334 25,245 17,570
Write-off of unamortized costs on refinanced debt (3,134) - (3,134) -
Gain on early extinguishment of debt - 2,000 - -
------------ ------------ ------------ -----------
Income before allocation to Minority Interests 66,716 46,334 22,111 17,570
Income allocated to Minority Interests (8,426) (9,004) (2,503) (3,066)
------------ ------------ ------------ -----------
Net income 58,290 37,330 19,608 14,504
Preferred distributions 19,953 4,781 7,079 3,586
------------ ------------ ------------ -----------
Net income available to Common Shares $ 38,337 $ 32,549 $ 12,529 $ 10,918
============ ============ ============ ===========
Net income per weighted average Common Share outstanding $ 0.94 $ 0.95 $ 0.29 $ 0.32
============ ============ ============ ===========
Weighted average Common Shares outstanding 40,934 34,277 43,781 34,401
============ ============ ============ ===========
Distributions declared per Common Share outstanding $ 1.77 $ 1.59 $ 0.59 $ 0.53
============ ============ ============ ==========
The accompanying notes are an integral part of the financial statements
3
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30,
----------------------------
1996 1995
----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 58,290 $ 37,330
Adjustments to reconcile net income to
net cash provided by operating activities:
Income allocated to Minority Interests 8,426 9,004
Depreciation 66,759 51,982
Amortization of deferred financing costs (including discount on 1999 and 2002 Notes) 3,097 2,733
Gain on disposition of properties (2,346) (1,542)
Write-off of unamortized costs on refinanced debt 3,134 -
Gain on early extinguishment of debt - (2,000)
Changes in assets and liabilities:
(Increase) in rents receivable (1,021) (212)
Decrease (increase) in deposits - restricted 14,471 (675)
(Increase) decrease in other assets (2,801) 1,230
(Decrease) increase in due to affiliates (606) 1,294
Increase in accounts payable and accrued expenses 12,847 9,137
Increase in accrued interest payable 6,328 8,119
Increase (decrease) in rents received in advance and other liabilities 5,134 (307)
--------- ---------
Net cash provided by operating activities 171,712 116,093
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in rental properties, net (460,825) (195,842)
Improvements to rental property (23,381) (23,754)
Additions to non-rental property (1,672) (2,845)
Proceeds from disposition of rental property 10,183 4,738
Decrease (increase) in mortgage deposits 1,792 (4,447)
Deposits (made) on rental property acquisitions (1,800) -
Deposits applied on rental property acquisitions 100 1,820
Decrease (increase) in investment in mortgage notes, net 668 (88,594)
Other investing activities (629) 4,421
--------- ---------
Net cash (used for) investing activities (475,564) (304,503)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of Common Shares 304,787 -
Proceeds from sale of Preferred Shares 115,000 153,000
Proceeds from exercise of options 3,358 2,039
Proceeds from sale of 2002 Notes, net of discount - 124,011
Proceeds from sale of 2026 Notes 150,000 -
Redemption of Preference Units (1,083) (1,352)
Payment of offering costs (4,347) (6,166)
Distributions to Common Share and Preferred Share owners (87,775) (55,227)
Distributions to Minority Interests (15,297) (13,859)
Principal receipts on employee notes 57 134
Proceeds from refinancing of tax-exempt bonds, net 112,980 -
Loan to title holding entities (4,092) -
Proceeds from line of credit 250,000 275,000
Repayments on line of credit (342,000) (252,000)
Principal payments on mortgage notes payable (35,725) (44,209)
Loan and bond acquisition costs (5,767) (2,712)
Increase in security deposits 2,873 1,129
--------- ---------
Net cash provided by financing activities 442,969 179,788
--------- ---------
Net increase (decrease) in cash and cash equivalents 139,117 (8,622)
Cash and cash equivalents, beginning of period 13,428 20,038
--------- ---------
Cash and cash equivalents, end of period $ 152,545 $ 11,416
========= =========
The accompanying notes are an integral part of the financial statements.
4
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30,
----------------------------
1996 1995
----------------------------
Supplemental information:
Cash paid during the period for interest $ 52,304 $ 50,022
======== ========
Mortgage loans assumed through acquisitions of rental properties $ 99,912 $ 23,554
======== ========
Rental property assumed through foreclosure $ 10,854 $ -
======== ========
Net rental properties contributed in exchange for OP units $ - $ 17,834
======== ========
Rental property conveyed in exchange for release of mortgage
indebtedness $ - $ 20,500
======== ========
The accompanying notes are an integral part of the financial statements.
5
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
DEFINITION OF SPECIAL TERMS:
Capitalized terms used herein and not defined are as defined in the Company's
Annual Report on Form 10-K, as amended by Form 10-K/A for the year ended
December 31, 1995.
1. BUSINESS
Equity Residential Properties Trust, formed in March 1993, and its
subsidiaries (collectively, the "Company"), is a self-administered and self-
managed equity real estate investment trust ("REIT"). As of September 30, 1996,
the Company controlled a portfolio of 210 multifamily residential properties
(individually a "Property" and collectively the "Properties"). The Company's
interest in six of these Properties consists solely of ownership of debt
collateralized by such Properties. The Company also has an investment in
partnership interests and subordinated mortgages collateralized by 21 properties
(the "Additional Properties")
2. BASIS OF PRESENTATION
The balance sheet and statements of operations and cash flows as of and for
the quarter and nine months ended September 30, 1996 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, the Management Partnerships
and the Financing Partnerships, each such entity has been consolidated with the
Company for financial reporting purposes. In regard to Management Corp. and
Management Corp. II, the Company does not have legal control; however, these
entities are consolidated for financial reporting purposes, the effects of which
are immaterial.
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 for the year
ended December 31, 1995 ("Form 10-K"). The following Notes to Consolidated
Financial Statements highlight significant changes to the notes included in the
Form 10-K, as amended by Form 10-K/A 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. Certain reclassifications have been made to the prior period's financial
statements in order to conform with the current period presentation.
3. INVESTMENT IN RENTAL PROPERTY
During the nine months ended September 30, 1996, the Company acquired the
37 Properties listed below. Each Property was purchased from an unaffiliated
third party. The cash portion of these transactions was funded from either the
Company's line of credit or proceeds raised through various
6
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
capital transactions as discussed in the Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Total
Date Number Acquisition Cost
Acquired Property Location of Units (in thousands)
- -------- -------- -------- -------- ------------
02/07/96 7979 Westheimer Houston, TX 459 $ 14,493
02/27/96 Sabal Pointe (formerly
Vinings at Coral Springs) Coral Springs, FL 275 19,452
03/01/96 Woodbridge (formerly The
Plantations) Cary, NC 344 19,906
03/05/96 Heron Landing (formerly
Oxford & Sussex) Sunrise, FL 144 7,161
03/12/96 Pines of Cloverlane Ann Arbor, MI 592 20,209
03/14/96 Regency Palms Huntington Beach, CA 310 18,648
03/21/96 Port Royale II Ft. Lauderdale, FL 161 10,283
04/16/96 Twenty-nine Hundred on
First Seattle, WA 135 11,792
05/22/96 Woodland Hills Decatur, GA 228 12,291
05/31/96 Ivy Place (formerly Post
Place) Atlanta, GA 122 8,035
06/03/96 Ridgetree Dallas, TX 798 21,202
06/05/96 Country Ridge Farmington Hills, MI 252 16,221
06/07/96 Rosehill Pointe Lenexa, KS 498 20,983
06/07/96 Forest Ridge Arlington, TX 660 23,629
06/12/96 Canyon Sands Phoenix, AZ 412 14,893
06/12/96 Desert Sands Phoenix, AZ 412 14,806
06/25/96 Chandler Court Chandler, AZ 311 13,551
06/28/96 Lands End Pacifica, CA 260 18,258
07/01/96 Sunny Oak Village Overland Park, KS 548 22,445
07/01/96 Mallard Cove Greenville, SC 211 8,141
07/16/96 Pine Meadow Greensboro, NC 204 7,220
07/19/96 Summer Ridge Riverside, CA 136 6,014
07/19/96 Promenade Terrace Corona Hills, CA 330 22,824
07/19/96 South Creek Mesa, AZ 528 26,729
08/01/96 Pueblo Villas Albuquerque, NM 232 8,553
08/28/96 Brixworth Nashville, TN 216 11,726
08/30/96 Brierwood Jacksonville, FL 196 5,495
08/30/96 Woodscape Raleigh, NC 240 9,563
09/03/96 Park Place Plymouth, MN 500 24,343
09/19/96 Eagle Canyon Chino Hills, CA 252 18,068
09/19/96 Summerset Village Chatsworth, CA 280 26,285
7
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
09/19/96 Canterchase Nashville, TN 235 8,625
09/20/96 Songbird San Antonio, TX 262 10,816
09/20/96 Willowglen Aurora, CO 384 17,080
09/26/96 Merrimac Woods Costa Mesa, CA 123 6,736
09/27/96 Casa Capricorn San Diego, CA 192 12,605
09/30/96 Hunter's Glen Chesterfield, MO 192 9,141
------ --------
11,634 $548,222
====== ========
In addition to the Properties mentioned above, on February 1, 1996,
Management Corp. II transferred to the Company its interest in Desert Park, a
368-unit Property located in Las Vegas, Nevada, subject to $8.1 million of
indebtedness, in exchange for the forgiveness of a $2.7 million note payable to
the Company.
4. DISPOSITION OF RENTAL PROPERTIES
On January 31, 1996, the Company sold Sanddollar Apartments located in
Tulsa, Oklahoma for a sales price of $6.2 million. The gain for financial
reporting purposes was approximately $1.3 million.
On June 25, 1996, the Company sold Deer Run Apartments located in
Charleston, South Carolina for a sales price of $3.95 million. The gain for
financial reporting purposes was approximately $1 million.
5. COMMITMENTS TO ACQUIRE AND DISPOSE OF RENTAL PROPERTIES
As of September 30, 1996, the Company had entered into separate agreements
to acquire three multifamily residential properties (excluding the properties
which were subsequently acquired as discussed in Note 14 of the Notes to
Consolidated Financial Statements) containing 727 units from unaffiliated third
parties. The expected combined purchase price is approximately $33.95 million,
which includes the assumption of mortgage indebtedness of approximately $11.15
million.
Also as of September 30, 1996, the Company had entered into separate
agreements to dispose of three Properties containing 800 units to unaffiliated
third parties. The expected combined sales price is $30.25 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 two preceding paragraphs.
6. INVESTMENT IN MORTGAGE NOTES
Investment in mortgage notes, net represents the Company's investment in
subordinated mortgages collateralized by the Additional Properties.
8
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
7. SHAREHOLDERS' EQUITY AND MINORITY INTERESTS
On May 21, 1996, the Company completed an offering of 2,300,000 publicly
registered Common Shares, which were sold at a net price of $30.50 per share. On
May 28, 1996, the Company completed the sale of 73,287 publicly registered
Common Shares to employees of the Company and to employees of EGI and certain of
their respective affiliates and consultants at a price equal to $30.50 per
share. On May 30, 1996, the Company completed an offering of 1,264,400 publicly
registered Common Shares, which were sold at a net price of $30.75 per share.
The Company received net proceeds of approximately $111.3 million in connection
with the sale of the 3,637,687 Common Shares mentioned above (collectively, the
"May 1996 Common Share Offerings") .
In September 1996 the Company sold 4,600,000 depositary shares (the "1996
Depositary Shares") pursuant to the Second Shelf Registration. Each 1996
Depositary Share represents a 1/10 fractional interest in a 9 1/8% Series C
Cumulative Redeemable Preferred Share of Beneficial Interest, $0.01 par value
per share (the "Series C Preferred Shares"). The liquidation preference of each
of the Series C Preferred Shares is $250.00 (equivalent to $25 per 1996
Depositary Share). The Company raised gross proceeds of $115 million from this
offering (the "Series C Preferred Share Offering"). The net proceeds of
approximately $111.4 million from the Series C Preferred Share Offering were
contributed by the Company to the Operating Partnership in exchange for 460,000
9 1/8% series C cumulative preference units. The Series C Preferred Shares are
cumulative from the date of original issue and are payable quarterly on or about
the fifteenth day of January, April, July and October of each year, commencing
on October 15, 1996, at the annual rate of 9 1/8% of the liquidation preference
of $25 per 1996 Depositary Share. The Series C Preferred Shares are not
redeemable prior to September 9, 2006. On and after September 9, 2006, the
Series C Preferred Shares may be redeemed for cash at the option of the Company,
in whole or in part, at a redemption price of $250 per share (equivalent to
$25.00 per 1996 Depositary Share), plus accrued and unpaid distributions, if
any, thereon.
Also in September 1996, the Company completed the sale of 2,272,728
publicly registered Common Shares which were sold at a price of $33 per share.
The Company received proceeds of approximately $75 million in connection with
this offering (the "September 1996 Common Share Offering").
The following table presents the changes in the Company's issued and
outstanding Common Shares for the nine months ended September 30, 1996:
Balance at January 1, 1996 35,011,715
Common Shares issued through January 1996 Common Share Offering 1,725,000
Common Shares issued through February 1996 Common Share Offering 2,300,000
Common Shares issued through May 1996 Common Share Offerings 3,637,687
Common Shares issued through September 1996 Common Share Offering 2,272,728
Conversion of OP Units into Common Shares 667,943
Common Shares issued through restricted share awards 21,879
9
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Common Shares issued through exercise of options 127,915
Common Shares issued for profit-sharing contribution 10,001
-------
Balance at September 30, 1996 45,774,868
==========
Assuming conversion of all OP Units into Common Shares, total Common Shares
outstanding at September 30, 1996 would have been 54,498,642.
On March 1, 1996, the Operating Partnership exercised its option to convert
all of the Preference Units into OP Units. This conversion resulted in 1,182,835
OP Units being issued.
On June 26, 1996, the Company filed with the SEC a Form S-3 Registration
Statement to register 608,665 Common Shares which may be issued by the Company
to holders of 608,665 OP Units. The SEC declared this Registration Statement
effective on September 6, 1996.
On September 18, 1996, the Company filed with the SEC a Form S-3
Registration Statement to register $500 million of equity securities (the "1996
Equity Shelf Registration"). The SEC declared the Registration Statement
effective on September 23, 1996.
On September 18, 1996, the Operating Partnership filed with the SEC a Form
S-3 Registration Statement to register $500 million of debt securities (the
"1996 Debt Shelf Registration"). The SEC declared the Registration Statement
effective on September 23, 1996.
On September 27, 1996, the Company filed with the SEC a Form S-3
Registration Statement to register 1,182,835 Common Shares which may be issued
by the Company to holders of 1,182,835 OP Units. The SEC declared the
Registration Statement effective on October 3, 1996.
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". As of
September 30, 1996, the Minority Interests held 8,723,774 OP Units which
represented a 16.01% interest in the Operating Partnership.
Net proceeds from the Company's Common 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 are allocated
between shareholders' equity and Minority Interests to account for the change in
their respective percentage ownership of the underlying equity of the Operating
Partnership.
The Company paid a $0.59 per Common Share distribution on October 11, 1996
for the quarter ended September 30, 1996, to Common Share holders of record on
September 27, 1996.
On October 15, 1996, the Company paid, for the quarter ended September 30,
1996, a $0.5859 per Series A Preferred Share distribution and a $5.703
distribution per $250 Series B Preferred Share (or a
10
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
$0.5703 distribution per $25 Depositary Share). For the period September 9, 1996
through September 30, 1996, the Company paid a $1.394 per $250 Series C
Preferred Share distribution (or a $.1394 distribution per $25 1996 Depositary
Share).
8. MORTGAGE NOTES PAYABLE
As of September 30, 1996, the Company had outstanding mortgage indebtedness
of approximately $738.9 million encumbering 92 of the Properties. The carrying
value of such Properties (net of accumulated depreciation of $155.2 million) was
approximately $1.1 billion. In connection with the Properties acquired during
the period ended September 30, 1996, the Company assumed the outstanding
mortgage balances on ten Properties in the aggregate amount of $99.9 million. In
addition, during the period ended, in two separate transactions, the Company
refinanced certain of its tax-exempt bonds resulting in an increase in mortgage
indebtedness of approximately $113 million. As a result of the most recent
transaction, the Company recorded an extraordinary loss in the amount of
approximately $3.1 million, which represented the write-off of unamortized
deferred financing costs from the early retirement of debt. Concurrent with the
most recent refinanced tax-exempt bonds and as a requirement of the credit
provider of the bonds, the Company entered into interest rate swap agreements to
fix the interest rate on the bonds, which swap agreements were assigned to the
credit provider as additional security. The Company simultaneously entered into
identical reverse swap agreements in order to convert the interest rate on the
tax-exempt bonds back to a lower floating interest rate.
Scheduled maturities for the Company's outstanding mortgage indebtedness
are at various dates through April 1, 2027. As of September 30, 1996, fixed
interest rates on certain of these mortgage notes ranged from 4% to 10.27% and
variable interest rates on certain of the mortgage notes ranged from 3.65% to
7.073%. During the nine months ended September 30, 1996, the Company repaid the
outstanding mortgage balances on four Properties in the aggregate amount of $33
million. Subsequent to September 30, 1996, the Company repaid the outstanding
mortgage balance on two Properties in the amount of approximately $11.8 million.
9. LINE OF CREDIT
The Company, through the Operating Partnership, has a $250 million
unsecured line of credit with Wells Fargo Realty Advisors Funding, Incorporated,
as agent. This line of credit will mature on November 14, 1996. Borrowings under
this line of credit currently bear interest at a rate equal to the one month
LIBOR, plus 1.375%. As of September 30, 1996, no amounts were outstanding under
this facility.
10. NOTES
In August 1996, the Operating Partnership issued $150 million of unsecured
fixed rate notes (the "2026 Notes") in connection with the Debt Shelf
Registration in a public debt offering (the "Third Public Debt Offering"). The
2026 Notes are due on August 15, 2026 and bear interest at 7.57%, which
11
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
is payable semi-annually in arrears on February 15 and August 15, commencing
February 15, 1997. The Operating Partnership received net proceeds of
approximately $149 million in connection with this issuance. Prior to the
issuance of the 2026 Notes, the Company entered into an interest rate swap
agreement to effectively reduce the overall interest rate cost of this issuance
to 7.5%. The Operating Partnership received a one time settlement payment of
this swap transaction, which was approximately $0.6 million and is being
amortized over the term of the 2026 Notes. As of September 30, 1996, the
unamortized balance was approximately $0.6 million.
Included in the note balance are the 1999 Notes, the Floating Rate Notes,
the 2002 Notes and the 2026 Notes. As of September 30, 1996 the unamortized
discount balances related to the 1999 Notes and the 2002 Notes were
approximately $0.4 million and $0.8 million, respectively.
11. DEPOSITS - RESTRICTED
Deposits - restricted shown on the Company's Consolidated Balance Sheet as
of September 30, 1996 included approximately $1.8 million of earnest money
deposits made for property acquisitions. Also included in the deposits -
restricted amount were tenant security and utility deposits made for certain of
the Company's Properties.
12. SUMMARIZED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
The following unaudited Pro Forma Condensed Statement of Operations for the
nine months ended September 30, 1996 has been presented as if the January 1996
Common Share Offering, the February 1996 Common Share Offering, the May 1996
Common Share Offerings, the Third Public Debt Offering, the Series C Preferred
Share Offering, the September 1996 Common Share Offering, the acquisition of 38
multifamily residential properties, the disposition of two multifamily
residential properties and the repayment of mortgage indebtedness for four
properties had occurred on January 1, 1996. In management's opinion, the Pro
Forma Condensed Statement of Operations does not purport to present what actual
results would have been had the above transactions occurred on January 1, 1996,
or to project results for any future period. The amounts presented in the
following statement are
12
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
in thousands except for per share amounts:
Summarized Pro Forma
Condensed Statement
of Operations
For the Nine Months ended
September 30, 1996
------------------
Total Revenues $384,323
--------
Total Expenses 307,080
--------
Pro Forma income before allocation to Minority
Interests 77,243
========
Pro Forma net income 64,876
Preferred distributions 27,183
--------
Pro Forma net income available for Common Shares $ 37,693
========
Pro Forma net income per Common Share outstanding $ 0.82
========
Pro Forma funds from operations available for
Common Shares (A) $123,260
========
- ----------
(A) The Company generally considers funds from operations ("FFO") to be one
measure of the performance of real estate companies, including an equity
REIT. In accordance with the new definition of FFO adopted by the Board of
Governors of the National Association of Real Estate Investment Trusts
("NAREIT"), FFO represents income (loss) computed in accordance with
generally accepted accounting principles ("GAAP"), excluding gains (or
losses) from debt restructuring and sales of property, plus depreciation on
real estate assets, and after adjustments for unconsolidated partnerships
and joint ventures. Adjustments for unconsolidated partnerships and joint
ventures are calculated to reflect FFO on the same basis. The Company
believes that FFO is helpful to investors as a measure of the performance of
an equity REIT 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 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.
13. COMMITMENTS AND CONTINGENCIES
There have been no new or significant developments related to the
commitments and contingencies that were discussed in Note 16 to the Company's
Form 10-K, as amended by Form 10K/A for the year ended December 31, 1995.
14. SUBSEQUENT EVENTS
On October 11, 1996, the Company acquired Marbrisa Apartments, a 224-unit
multifamily residential property located in Tampa, Florida from an unaffiliated
third party. The purchase price was approximately $7.8 million.
On October 31, 1996, the Company acquired Lakeville Resort Apartments, a
492-unit multifamily residential property located in Petaluma, California from
an unaffiliated third party. The purchase price was $27.2 million, which
included the assumption of mortgage indebtedness of approximately $20.9 million.
In October, 1996, the Company entered into an agreement to dispose of one
Property containing 174 units to an unaffiliated third party. The expected sales
price is $6 million.
On November 1, 1996, the Company acquired Cedar Crest Apartments, a 466-
unit multifamily residential property located in Overland Park, Kansas from an
unaffiliated third party. The purchase price was $21.55 million.
Subsequent to September 30, 1996 and through November 12, 1996, the Company
entered into separate agreements to acquire three multifamily residential
properties consisting of 1,347 units from unaffiliated third parties. The
expected combined purchase price is approximately $69.8 million, which includes
the assumption of mortgage indebtedness of $38.9 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 paragraph.
13
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, the
Financing Partnerships and the LLCs, 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, as amended
by Form 10-K/A for the year ended December 31, 1995.
RESULTS OF OPERATIONS
Since the Company's IPO, the Company has acquired direct or indirect
interests in 149 properties (the "Acquired Properties"), containing 46,016 units
in the aggregate for a total purchase price of approximately $2.2 billion,
including the assumption of approximately $511.8 million of mortgage
indebtedness. The Company's interest in six of the Acquired Properties consists
solely of ownership of the debt collateralized by such Acquired Properties. The
Company purchased ten of such Acquired Properties consisting of 2,694 units
between the IPO and December 31, 1993 (the "1993 Acquired Properties"); 84 of
such Acquired Properties consisting of 26,285 units in 1994 (the "1994 Acquired
Properties"); 17 of such Acquired Properties consisting of 5,035 units in 1995
(the "1995 Acquired Properties"); and 38 of such Acquired Properties consisting
of 12,002 units between January 1, 1996 and September 30, 1996 (the "1996
Acquired Properties"). In addition, in August 1995, the Company made an
investment in partnership interests and subordinated mortgages collateralized by
the 21 Additional Properties. The Acquired Properties were presented in the
Consolidated Financial Statements of the Company from the date of each
acquisition.
During 1995, the Company also disposed of six properties containing 2,445
units (the "1995 Disposed Properties") for a total sales price of approximately
$52 million and the release of mortgage indebtedness of $20.5 million. During
the nine months ended September 30, 1996, the Company disposed of two properties
(the "1996 Disposed Properties") for a total sales price of $10.15 million.
The Company's overall results of operations for the quarter and nine months
ended September 30, 1996 have been impacted by the Company's acquisition and
disposition activity. The significant increases in rental revenues, property
and maintenance expenses, real estate taxes and insurance, depreciation expense
and property management can all primarily be attributed to the acquisition of
the 1995 Acquired Properties and 1996 Acquired Properties. The impact of the
1995 Acquired Properties is discussed in greater detail in the following
paragraphs. The Company's disposition activity partially offset the increases
to these same accounts.
Properties that the Company owned for all of both the nine months ended
September 30, 1996 and September 30, 1995 (the "Nine-Month 1996 Same Store
Properties") and Properties that the Company owned for all of both the quarters
ended September 30, 1996 and September 30, 1995 (the
14
EQUITY RESIDENTIAL PROPERTIES TRUST
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (CONTINUED)
"Third-Quarter 1996 Same Store Properties") also impacted the Company's results
of operations and are discussed as well in the following paragraphs.
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1996 TO NINE MONTHS ENDED
SEPTEMBER 30, 1995
For the nine months ended September 30, 1996, income before gain on
disposition of properties, extraordinary items and allocation to Minority
Interests increased by $24.7 million when compared to the nine months ended
September 30, 1995. This increase was primarily due to increases in rental
revenues net of increases in property and maintenance expenses, real estate
taxes and insurance, property management expenses, fee and asset management,
depreciation, interest expense and general and administrative expenses. All of
the increases in the various line item accounts mentioned above can be primarily
attributed to the 1996 Acquired Properties and 1995 Acquired Properties. These
increases were partially offset by the 1995 Disposed Properties and the 1996
Disposed Properties. Interest income earned on the Company's mortgage note
investment increased by $7.2 million and was an additional factor that impacted
the nine month to nine month changes.
In regard to the Nine-Month 1996 Same Store Properties, rental revenues
increased by approximately $14.2 million or 5.6% primarily as a result of higher
rental rates charged to new tenants and tenant renewals and higher average
occupancy levels. Overall property operating expenses which include property and
maintenance, real estate taxes and insurance and an allocation of property
management expenses increased approximately $2.3 million or 2.1%. This increase
was primarily the result of higher payroll expenses and utilities costs. For
1996 the Company also increased its per unit charge for property level insurance
which increased insurance expense by approximately $0.8 million.
Property management represents expenses associated with the management of
the Company's Properties. These expenses increased by approximately $2.3 million
primarily as a result of the expansion of the Company's property management with
the addition of a regional operations center in Seattle, Washington and during
the third quarter of 1996 the addition of two new area offices located in
Raleigh, North Carolina and Ft. Lauderdale, Florida. Other factors that impacted
this increase were higher payroll and travel costs and legal and professional
fees.
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 decreased by $0.5 million primarily due
to the disposition of certain of these properties.
Interest expense, including amortization of deferred financing costs,
increased by approximately $0.8 million. This increase was primarily the result
of an increase in the Company's average indebtedness outstanding which increased
by $36.4 million. However, the Company's effective interest costs decreased from
8.12% in 1995 to 7.93% in 1996.
15
EQUITY RESIDENTIAL PROPERTIES TRUST
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (CONTINUED)
General and administrative expenses, which include corporate operating
expenses, increased approximately $0.6 million between the periods under
comparison. This increase was primarily due to higher salary costs and
shareholder reporting costs as well as an increase in professional fees. General
and administrative expenses as a percentage of total revenues decreased from
2.1% for the nine months ended September 30, 1995 to 1.9% for the nine months
ended September 30, 1996.
COMPARISON OF QUARTER ENDED SEPTEMBER 30, 1996 TO QUARTER ENDED SEPTEMBER
30, 1995
For the quarter ended September 30, 1996, income before gain on disposition
of property, extraordinary item and allocation to Minority Interests increased
by $9.2 million when compared to the quarter ended September 30, 1995. This
increase was primarily due to increases in rental revenues net of increases in
property and maintenance expenses, real estate taxes and insurance, property
management expenses, fee and asset management, depreciation, interest expense
and general and administrative expenses. All of the increases in the various
line item accounts mentioned above can be primarily attributed to the 1996
Acquired Properties and 1995 Acquired Properties. These increases were partially
offset by the 1995 Disposed Properties and the 1996 Disposed Properties.
Interest income earned on the Company's mortgage note investment increased by
$1.3 million and was an additional factor that impacted the quarter to quarter
changes.
In regard to the Third Quarter 1996 Same Store Properties, rental revenues
increased by approximately $4.4 million or 5% as a result of higher rental rates
charged to new tenants and tenant renewals and higher average occupancy levels.
Overall property operating expenses which include property and maintenance, real
estate taxes and insurance and an allocation of property management expenses
decreased approximately $0.5 million or 1.4%. This decrease was primarily the
result of lower leasing and advertising costs and better management of the
maintenance costs associated with readying vacated units for occupancy by new
tenants. Offsetting this decrease, the Company increased for 1996 its per unit
charge for property level insurance which increased insurance expense by $0.2
million.
Property management represents expenses associated with the management of
the Company's Properties. These expenses increased by approximately $1.2 million
primarily as a result of the expansion of the Company's property management with
the addition during the third quarter of 1996 of two new area offices located in
Raleigh, North Carolina and Ft. Lauderdale, Florida. Other factors that impacted
this increase were higher payroll and travel costs and legal and professional
fees.
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 decreased slightly between the periods
under comparison primarily due to the disposition of certain of these
properties.
Interest expense, including amortization of deferred financing costs,
increased by approximately
16
EQUITY RESIDENTIAL PROPERTIES TRUST
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (CONTINUED)
$2.7 million. This increase was the result of an increase in the Company's
average indebtedness outstanding which increased by $179.8 million. However, the
Company's effective interest costs decreased from 8.09% in 1995 to 7.77% in
1996.
General and administrative expenses, which include corporate operating
expenses, increased approximately $0.3 million between the quarters under
comparison. This increase was primarily due to higher salary costs and
shareholder reporting costs as well as an increase in professional fees. General
and administrative expenses as a percentage of total revenues decreased from 2%
for the quarter ended September 30, 1995 to 1.9% for the quarter ended September
30, 1996.
LIQUIDITY AND CAPITAL RESOURCES
As of January 1, 1996, the Company had approximately $13.4 million of cash
and cash equivalents and $158 million available on its line of credit. After
taking into effect the various transactions discussed in the following
paragraphs, the Company's cash and cash equivalents balance at September 30,
1996 was approximately $152.5 million and the amount available on the Company's
line of credit was $250 million. The following discussion also explains the
changes in net cash provided by operating activities, net cash (used for)
investing activities and net cash provided by financing activities, which
amounts for each period under comparison are presented in the Company's
Statements of Cash Flows.
Part of the Company's strategy in funding the purchase of multifamily
residential properties is to utilize its line of credit and to subsequently
repay the line of credit with proceeds from the issuance of additional equity or
debt securities. Continuing to employ this strategy, the Company completed the
January 1996 Common Share Offering and received net proceeds of approximately
$50.7 million, substantially all of which were applied to repay a portion of the
outstanding balance on the Company's line of credit. In addition, the Company
completed the February 1996 Common Share Offering and received net proceeds of
approximately $67.8 million. Of these proceeds, $60 million were applied to
repay the remaining outstanding balance on the Company's line of credit. The
remaining proceeds were subsequently used to purchase additional properties. In
connection with the May 1996 Common Share Offerings, the Company received net
proceeds of approximately $111.3 million. Of these proceeds, $57 million were
applied to repay the remaining outstanding balance on the Company's line of
credit and the remaining proceeds were subsequently used to purchase additional
Properties.
In June 1996, the Company refinanced certain of its tax-exempt bonds and
received approximately $77.1 million of proceeds in connection therewith. Of
these proceeds, $70 million were used to repay the remaining outstanding balance
on the Company's line of credit. Also in connection with this transaction, the
Company made a loan in the amount of $4.1 million to the entities that hold
title to the Properties that collateralize the tax-exempt bond indebtedness.
The proceeds of this loan were used to pay the costs related to this
transaction.
17
EQUITY RESIDENTIAL PROPERTIES TRUST
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (CONTINUED)
In August 1996, the Operating Partnership issued the 2026 Notes and
received net proceeds of approximately $149 million in connection therewith. Of
these proceeds, $113 million were used to repay amounts outstanding on the
Company's line of credit and the remaining proceeds were used to purchase
additional Properties.
In September 1996 the Company completed its offering of the Series C
Preferred Shares, the sale of 2,272,727 Common Shares and the refinancing of
$138,400,000 of tax-exempt bonds in conjunction with the completion of a new
credit enhancement facility with the Federal National Mortgage Association. As
a result of these three transactions the Company received net proceeds of $111.4
million, $75 million and $35.9 million, respectively. All of these proceeds
have been or will be utilized to purchase additional properties and/or repay
mortgage indebtedness on certain properties.
With respect to Property acquisitions during the nine month period, the
Company purchased 38 Properties containing 12,002 units for a total of
approximately $550.5 million, which included the assumption of $99.9 million of
mortgage indebtedness. These acquisitions were primarily funded from amounts
drawn on the Company's line of credit, proceeds funded from third party escrow
accounts related to the tax-deferred exchange of certain properties and a
portion of the proceeds received in connection with the various capital
transactions as mentioned in the previous paragraphs. Subsequent to September
30, 1996, the Company acquired three additional properties for a purchase price
of $56.55 million. These acquisitions were primarily funded with proceeds from
the capital transactions completed in September 1996. The Company is actively
seeking to acquire additional multifamily residential properties with physical
and market characteristics similar to the Properties and is currently under
contract with various sellers to purchase up to 727 units. The combined purchase
price of these probable acquisitions is approximately $33.95 million. The
closings of these 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 will not differ in material respects.
During the nine months ended September 30, 1996, the Company disposed of
two properties which generated net proceeds of $10 million. These proceeds were
ultimately applied to purchase additional Properties.
As of September 30, 1996, the Company had total indebtedness of
approximately $1.2 billion, which included conventional mortgages of $464
million, unsecured debt of $500 million (net of a $1.2 million discount), and
tax exempt bond indebtedness of $274.9 million.
During the nine months ended September 30, 1996, total capital expenditures
for the Company approximated $33.8 million. Of this amount, $8.7 million related
to capital improvements and major repairs for the Acquired Properties. Such
capital expenditures were primarily funded from working capital reserves and
from net cash provided by operating activities.
18
EQUITY RESIDENTIAL PROPERTIES TRUST
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (CONTINUED)
Total capital expenditures for the remaining portion of 1996 including amounts
for the 1996 Acquired Properties are budgeted to be approximately $10 million.
Minority Interests as of September 30, 1996 decreased by $14.1 million when
compared to December 31, 1995. The primary factors that impacted this account
during the nine month period were distributions declared to Minority Interests,
which amounted to $15.6 million for the nine month period, the allocation of
income from operations in the amount of $8.4 million and the conversion of OP
Units into Common Shares.
Total distributions paid during the nine months ended September 30, 1996
amounted to $103 million. On August 22, 1996, the Company declared a $0.59
distribution per Common Share, $0.5859 distribution per Series A Preferred
Share, $5.703 distribution per $250 Series B Preferred Share and a $1.394
distribution per $250 Series C Preferred Share. Total distributions paid in
October 1996 for the quarter ended September 30, 1996 amounted to approximately
$39.2 million.
The Company expects to meet its short-term liquidity requirements generally
through its working capital and net cash provided by operating activities. 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 mortgage
debt maturities, reduction of outstanding amounts under its line of credit,
property acquisitions and significant capital improvements by long-term
collateralized and un-collateralized borrowings and the issuance of equity
securities including additional OP Units as well as from 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 capital to the Company in such markets is too high.
The Company currently has a $250 million line of credit which is scheduled
to mature on November 14, 1996. As of November 12, 1996, no amounts were
outstanding under this facility. The Company is currently negotiating a new
credit facility and has reached an agreement with Morgan Guaranty and Bank of
America to provide this facility up to an amount of $250 million. The Company
expects to close this transaction by November 15, 1996.
FUNDS FROM OPERATIONS
The Company generally considers FFO to be one measure of the performance of
real estate companies including an equity REIT. In accordance with the new
definition of FFO adopted by the Board of Governors of NAREIT, FFO represents
net income (loss) (computed in accordance with GAAP), excluding gains (or
losses) from debt restructuring and sales of property, plus depreciation on real
estate assets, and after adjustments for unconsolidated partnerships and joint
ventures. Adjustments for unconsolidated partnerships and joint ventures are
calculated to reflect FFO on the
19
EQUITY RESIDENTIAL PROPERTIES TRUST
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (CONTINUED)
same basis. The Company believes that FFO is helpful to investors as a measure
of the performance of an equity REIT 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 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.
For the nine months ended September 30, 1996, FFO, based on the new
definition (except for the effect of amortization of deferred financing costs
related to Predecessor Business of approximately $463,000), increased by $23.6
million when compared to the nine months ended September 30, 1995 to
approximately $113.3 million. For the quarter ended September 30, 1996, FFO,
based on the new definition (except for the effect of amortization of deferred
financing costs related to Predecessor Business of approximately $147,000),
increased by $11.3 million when compared to the quarter ended September 30, 1995
to approximately $41.6 million.
20
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The discussion in Note 12 of "Notes to Consolidated Financial Statements" is
incorporated herein by reference.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits: None
(B) Reports on Form 8-K:
A report on Form 8-K , dated September 4, 1996, was filed on September 9, 1996.
21
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: November 12, 1996 By: /s/ Bruce C. Strohm
----------------- ------------------------------------------
Bruce C. Strohm
Executive Vice President, General Counsel
and Secretary
Date: November 12, 1996 By: /s/ Michael J. McHugh
----------------- ----------------------------------------
Michael J. McHugh
Senior Vice President, Chief Accounting
Officer and Treasurer
22