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| AMLI Residential Announces Earnings Expectations For Fourth Quarter 2000, Full Year 2000 and Calendar Year 2001 |
CHICAGO, Jan. 9 /PRNewswire/ -- AMLI Residential Properties Trust (NYSE: AML) announces today that it currently expects Funds From Operations (FFO) for the fourth quarter 2000 to be $0.68 per share, $0.04 less than the previously expected $0.72 per share. As a result, the Company currently estimates full year 2000 FFO to be $2.75 per share, again $0.04 less than the previously expected $2.79 per share. Based on the estimates and assumptions set forth below, the Company currently projects its full year 2001 FFO per share to be in the range of $2.75 ($0.61, $0.67, $0.72, and $0.75 per quarter, respectively) to $2.79. The Company had previously expected FFO of approximately $3.00 per share for 2001. Commenting on the above, Allan Sweet, AMLI President and Co-CEO stated, "Naturally, we are disappointed. We accomplished many positive things during the fourth quarter, but our community operations, as a whole, did not produce the results we had anticipated. We had been cautiously optimistic about the state of the economy, in general, and about the recovery potential for several of our markets, in particular. It now appears that the weakness felt in the general economy in the fourth quarter had a significant impact on us." Mr. Sweet continued, "Notwithstanding the disappointing quarter, we currently expect our same store NOI results for 2000 to reflect approximately 2.4% growth, and we are currently anticipating same store NOI growth in 2001 of about 4%. Although we expect that our customary property operations and related business activities, including same store operations, will generate about 8% growth in FFO per share in 2001, that growth is not translating into bottom line FFO expansion. There are two principal reasons for the difference. First, our current projections for 2001 do not include any gains from land sales or any fees from sales of co-investment properties, both of which occurred last year; and we are not currently projecting these additions to earnings during 2000 being made up from any other source during 2001. Second, we expect to reduce the amount of interest we capitalize, and correspondingly increase the amount of interest we expense in 2001, related to the carrying of our land held for residential development as we defer development plans for some of those land parcels." Additional assumptions supporting the Company's earnings outlook for 2001 are described below. FOURTH QUARTER 2000 RESULTS The Company currently believes that differences in its same store operations accounted for almost the entire 2000 FFO shortfall. Five of the Company's markets produced results in the fourth quarter that were below the Company's internal projections, and two performed better than projected. Unfortunately, the negative variances to projections were not offset by the positive variances. Although general weakness in the Dallas and Houston apartment markets is well documented, the Company believes that its relative performance in these challenging markets was actually comparatively good. The increase in new supply in Kansas City has not been absorbed as quickly as the Company had projected; however, the Company is optimistic that the long-term prospects in this market are good. Atlanta produced positive results for the year, but the market's adverse variance to projections for the quarter was unexpected. The results of operations in Chicago and Indianapolis were very close to projections for the fourth quarter, with Chicago performing well on an absolute basis. On a positive note, the results in Austin for the quarter exceeded the Company's projections. The following table summarizes the differences in same store community net operating income between expected actual results and the Company's fourth quarter internal projections, which is approximately equivalent to the $0.04 per share shortfall. Combined Same Store Communities (a) Net Operating Income Variance (b) Percent Growth (e) Market Amount (c) Per Share (d) 4th Qtr Year Atlanta $ (250) $ (0.01) (5.6)% 2.6% Austin 100 - 14.1 10.4 Chicago 50 - 10.6 8.7 Dallas/Ft. Worth (300) (0.01) 2.0 1.2 Indianapolis (50) - 19.2 3.9 Kansas City (475) (0.02) (13.9) (5.7) Houston (50) - (14.7) (7.1) Total $ (975) $ (0.04) 1.0% 2.4% (a) Includes wholly-owned and co-investment communities. (b) Represents the difference between the Company's internal projections and expected actual results for the Company's share of community operations. (c) Rounded for simplification and in 000's. (d) Rounded for simplification. (e) Based on wholly-owned and co-investment communities (at 100%), comparing similar periods in 2000 to those in 1999. 2001 EARNINGS OUTLOOK The primary assumptions underlying the Company's current estimate of $2.75 to $2.79 FFO per share for 2001 are as follows: Per Share Estimated 2000 FFO $2.75 Less: Earnings in 2000, not currently projected to recur in 2001: Gain on land sales (0.09) Fee income from sale of co-investment community (0.06) Less: Additional interest expense in 2001 relating to carrying land (0.06) Add: Increased earnings, net, in 2001 from all other business activities 0.21 Estimated 2001 FFO $2.75 Note that projected reductions in FFO attributable to land sales, fees from sales of co-investment properties, and changes in interest capitalization on land held for development offset projected growth from property operations and other business activities. Material internal assumptions included in the Company's current 2001 FFO projections are as follows: Property Operations -- Combined (wholly-owned and co-investment at 100%) same store community revenue growth is estimated to range from approximately 4.25% to 4.75%. -- Combined (wholly-owned and co-investment at 100%) same store operating expense growth is estimated to range from approximately 5.0% to 5.5%, which includes an approximate $0.04 per share increase in the cost of exterior painting over 2000. The Company expenses exterior painting as a matter of policy. -- Combined (wholly-owned and co-investment at 100%) same store community NOI growth is estimated to range from approximately 3.75 % to 4.25%. Acquisitions and Dispositions -- Three to five wholly-owned acquisitions, are projected in connection with a similar number of "1031" tax-deferred sales of wholly-owned communities. Such transactions are currently assumed to occur on an FFO-neutral basis. -- Three to five co-investment communities, with an aggregate cost ranging from approximately $75 million to $150 million, will be acquired, in which the Company's ownership interest would likely range from 20% to 50%. Such acquisitions are assumed to be levered approximately 65% with long-term, fixed-rate mortgage indebtedness and purchased at capitalization rates with a range between 8.5% and 8.75%. -- Acquisition fee income in 2001 is estimated to be approximately $500,000. -- No promote or disposition fee income is projected. It is not clear at this time when the sale of a co-investment community will occur, and none is currently assumed for 2001. Development Of the Company's interests in eight communities containing 2,845 apartment homes under development and/or in lease-up at January 1, 2001: -- Two completed communities, containing 628 apartment homes, are expected to become stabilized communities during 2001. -- Approximately 1,000 to 1,250 apartment homes are expected to be delivered in 2001. In addition, the Company currently estimates: -- Starting four to six new developments in 2001 having estimated total costs ranging from $150 million to $200 million. These new developments are expected to achieve unlevered first-year yields on cost of approximately 9.75% to 10.5%, except on any developments in urban or suburban "in-fill" locations where yields are expected to be less by approximately 50 basis points. -- Generating development fee income for 2001 of approximately $2.5 million to $3.0 million, net of unrecovered overhead. The Company presently owns approximately $50 million of land that is being held for multifamily apartment development. The Company currently intends that some of this land will be developed in 2001, some will be held for future development, and some may be sold. As noted above, the Company currently projects that it will expense an amount equal to approximately $0.06 per share during 2001 in connection with holding this land. Overhead General and administrative expenses and other overhead costs are projected to increase to approximately $4.5 million for 2001 from approximately $3.7 million in 2000 due to wage pressure, business expansion and increased technology costs. CONFERENCE CALL The Company will hold a conference call at 10:00 a.m. EST tomorrow, Wednesday, January 10, 2001, to discuss this press release. The call may be joined by calling 800-946-0782 and should be accessed approximately five minutes prior to conference time. A replay of the call will be available on January 11, 2001 at 12:00 p.m. EST and on January 15, 2001 at 4:00 p.m. EST. The toll free number for the replay is 800-937-3082. A live webcast and replay can be accessed at http://www.amli.com/company_info or at http://www.streetevents.com . Additionally, an on-line replay of the webcast will be available for 60 days following the call. The AMLI(R) portfolio currently includes 66 apartment communities containing 25,767 apartment homes, with an additional 2,845 apartment homes under development or in lease-up in eight locations. AMLI Residential is focused on the development, acquisition and management of institutional quality multifamily communities in the Southeast, Southwest, Midwest and Mountain regions of the U.S. AMLI Residential also serves as institutional advisor and asset manager for large pension funds, tax-exempt foundations and other financial institutions with respect to their multifamily investment activities. AMLI employs approximately 850 people who are dedicated to achieving AMLI's mission--Provide An Outstanding Living Environment For Our Residents. AMLI press releases and other company information are available at AMLI's web site located at http://www.amli.com . FORWARD LOOKING STATEMENTS Certain matters discussed in this press release are forward looking statements within the meaning of Federal Securities Law. Although the Company believes expectations reflected in such forward looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking statements can be identified by the Company's use of the words "project", "believe," "expect," "anticipate," "intend," "estimate," "assume," and other similar expressions that predict or indicate future events, achievements or trends or that do not relate to historical matters. The Company does not assure the future results or outcome of the matters described in forward-looking statements; rather, these statements merely reflect the Company's current expectations of the approximate outcomes of the matters discussed. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond the Company's control. The reader is cautioned to make her/her own judgement with regard to the statements discussed in this press release and the assumption noted by the Company herein. The Company is making forward-looking statements because it believes investors, analysts and others, many of whom prepare models and projections of the Company's performance, are interested in the Company's current estimates of its future activities. The Company advises such parties to make their own determination of any relevant or material assumption used by them. Many factors may cause the Company's actual performance in any period or periods to differ materially from the anticipated future performance expressed or implied by these forward-looking statements. Certain of the factors that could cause the Company's actual performance to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, general economic conditions, local real estate conditions, the timely development and lease-up of communities, other risks detailed from time to time in the Company's SEC reports, including the annual report on form 10-K for the year ended December 31, 1999. The Company will hold its usual conference call on January 31 to discuss the fourth quarter actual results. The Company does not intend to provide any additional disclosure regarding its expected operating results for full year 2001 other than the disclosure contained herein and does not undertake a duty to update the information provided above. The Company may, in its discretion, provide information regarding its outlook that may be of interest to the investment community. The format and extent of future guidance may be different from the format and extent of the information contained herein.SOURCE AMLI Residential
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Company News On-Call:
800-758-5804, ext. 116726
CONTACT:
Robert J. Chapman, 312-984-6845, or Allan J.
Sweet, President, 312-984-2602, both of AMLI Residential
