UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Quarterly Period Ended: Commission File Number: 0-20707
June 30, 2002
COLONIAL REALTY LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 63-1098468
(State of organization) (IRS Employer
Identification Number)
2101 Sixth Avenue North 35203
Suite 750 (Zip Code)
Birmingham, Alabama
(Address of principal
executive offices)
(205) 250-8700
(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 ___
COLONIAL REALTY LIMITED PARTNERSHIP
INDEX TO FORM 10-Q
Page
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Condensed Balance Sheets as of
June 30, 2002 and December 31, 2001 3
Consolidated Condensed Statements of Income for the
Three Months and Six Months Ended June 30, 2002
and 2001 4
Consolidated Condensed Statements of Cash Flows
for the Six Months Ended June 30, 2002 and 2001 5
Notes to Consolidated Condensed Financial Statements 6
Report of Independent Accountants 13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
Item 3. Quantitative and Qualitative Disclosures about
Market Risk 21
PART II: OTHER INFORMATION
Item 2. Changes in Securities 22
Item 6. Exhibits and Reports on Form 8-K 22
SIGNATURES 23
EXHIBITS 24
COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
--------------------
(Unaudited)
June 30, December 31,
2002 2001
----------- -----------
ASSETS
Land, buildings, & equipment, net $ 1,776,010 $ 1,756,255
Undeveloped land and construction in progress 160,007 152,084
Cash and equivalents 25,901 10,127
Restricted cash 1,838 2,255
Accounts receivable, net 11,419 12,309
Prepaid expenses 5,690 7,072
Notes receivable 740 12,253
Deferred debt and lease costs, net 20,058 18,568
Investment in unconsolidated subsidiaries 34,791 31,594
Other assets 14,657 11,866
----------- -----------
$ 2,051,111 $ 2,014,383
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Notes and mortgages payable $ 1,183,361 $ 1,191,791
Accounts payable 19,055 20,701
Accrued interest 11,575 11,485
Accrued expenses 10,274 4,520
Tenant deposits 3,259 3,607
Unearned rent 2,526 8,343
Other liabilities 3,430 1,296
----------- -----------
Total liabilities 1,233,480 1,241,743
----------- -----------
Redeemable units, at redemption value 425,075 347,604
Preferred units:
Series A Preferred Units 125,000 125,000
Series B Preferred Units 100,000 100,000
Series C Preferred Units 50,000 50,000
Partners' capital 119,737 151,439
Accumulated other comprehensive loss (2,181) (1,403)
----------- -----------
Total partners' capital 392,556 425,036
----------- -----------
$ 2,051,111 $ 2,014,383
=========== ===========
The accompanying notes are an integral part of these financial statements
COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per unit data)
---------------------
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2002 2001 2002 2001
---------------------- ----------------------
Revenue:
Minimum rent $ 63,068 $ 62,714 $ 125,698 $ 125,230
Percentage rent 674 557 1,159 645
Tenant recoveries 10,478 9,441 20,564 18,340
Other property related revenue 4,511 4,491 8,727 8,434
Other non-property related revenue 1,966 251 3,795 375
--------- --------- --------- ---------
Total revenue 80,697 77,454 159,943 153,024
--------- --------- --------- ---------
Property operating expenses:
General operating expenses 5,367 5,120 10,650 10,405
Salaries and benefits 3,928 3,953 7,787 7,979
Repairs and maintenance 7,932 7,330 15,146 13,919
Taxes, licenses, and insurance 7,504 6,317 15,254 12,865
General and administrative 4,605 2,495 8,492 5,129
Depreciation 17,591 16,027 35,365 31,824
Amortization 2,039 1,801 4,130 3,621
--------- --------- --------- ---------
Total operating expenses 48,966 43,043 96,824 85,742
--------- --------- --------- ---------
Income from operations 31,731 34,411 63,119 67,282
--------- --------- --------- ---------
Other income (expense):
Interest expense (15,223) (18,974) (30,985) (38,443)
Income from unconsolidated subsidiaries 57 382 401 632
Ineffectiveness of hedging activities -0- 1 (7) (30)
Gains (losses) from sales of property 22,304 (33) 32,112 (145)
Other 33 -0- -0- -0-
--------- --------- --------- ---------
Total other income (expense) 7,171 (18,624) 1,521 (37,986)
--------- --------- --------- ---------
Net income $ 38,902 $ 15,787 $ 64,640 $ 29,296
Distributions to preferred unitholders (6,109) (5,094) (12,219) (10,048)
--------- --------- --------- ---------
Net income available to common unitholders $ 32,793 $ 10,693 $ 52,421 $ 19,248
========= ========= ========= =========
Net income per unit - basic $ 0.99 $ 0.33 $ 1.60 $ 0.60
========= ========= ========= =========
Net income per unit - diluted $ 0.98 $ 0.33 $ 1.58 $ 0.60
========= ========= ========= =========
Weighted average units outstanding - basic 33,169 31,984 32,849 31,977
Weighted average units outstanding - diluted 33,488 32,106 33,114 32,058
The accompanying notes are an integral part of these financial statements
COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
-------------------
Six Months Ended
June 30,
--------------------
2002 2001
-------- --------
Cash flows from operating activities:
Net income $ 64,640 $ 29,296
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 39,495 35,445
Income from unconsolidated subsidiaries (401) (632)
(Gains) losses from sales of property (32,112) 145
Other 641 939
Decrease (increase) in:
Restricted cash 417 (277)
Accounts receivable 249 3,582
Prepaid expenses 1,382 295
Other assets (5,384) (1,818)
Increase (decrease) in:
Accounts payable (1,646) (1,140)
Accrued interest 90 (416)
Accrued expenses and other (1,213) 6,886
-------- --------
Net cash provided by operating activities 66,158 72,305
-------- --------
Cash flows from investing activities:
Acquisition of properties (72,442) -0-
Development expenditures (37,731) (73,725)
Tenant improvements (6,810) (8,240)
Capital expenditures (7,446) (7,416)
Proceeds from notes receivable 11,513 9,594
Proceeds from sales of property, net of selling costs 94,160 -0-
Distributions from unconsolidated subsidiaries 1,543 1,444
Capital contributions to unconsolidated subsidiaries (4,339) (558)
-------- --------
Net cash used in investing activities (21,552) (78,901)
-------- --------
Cash flows from financing activities:
Principal reductions of debt (11,917) (920)
Proceeds from additional borrowings 52,750 21,100
Net change in revolving credit balances (49,766) (12,980)
Cash contributions from the issuance of preferred units -0- 48,125
Cash contributions 36,503 215
Capital distributions (55,374) (50,333)
Payment of mortgage financing cost (1,028) (1,102)
Other, net -0- (187)
-------- --------
Net cash provided by (used in) financing activities (28,832) 3,918
-------- --------
Increase (decrease) in cash and equivalents 15,774 (2,678)
Cash and equivalents, beginning of period 10,127 4,275
-------- --------
Cash and equivalents, end of period $ 25,901 $ 1,597
======== ========
The accompanying notes are an integral part of these financial statements
COLONIAL REALTY LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED
CONDENSED FINANCIAL STATEMENTS
June 30, 2002
(Unaudited)
Note 1 -- Basis of Presentation
Colonial Realty Limited Partnership ("CRLP") is the operating
partnership of Colonial Properties Trust (the "Company"), an Alabama real estate
investment trust whose shares are traded on the New York Stock Exchange. The
accompanying unaudited consolidated condensed financial statements of CRLP have
been prepared by management in accordance with generally accepted accounting
principles for interim financial reporting and in conjunction with the rules and
regulations of the Securities and Exchange Commission. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments considered necessary for a fair presentation have
been included. The results of operations for the three and six month periods
ended June 30, 2002 are not necessarily indicative of the results that may be
expected for the full year. These financial statements should be read in
conjunction with the information included in CRLP's Annual Report as filed with
the Securities and Exchange Commission on Form 10-K for the year ended December
31, 2001, and with the information filed with the Securities and Exchange
Commission on Form 10-Q for the quarter ended March 31, 2002. The December 31,
2001 balance sheet data presented herein was derived from audited financial
statements but does not include all disclosures required by generally accepted
accounting principles. Certain 2001 amounts have been reclassified to conform to
the current year's financial statement presentation.
Effective January 1, 2002 CRLP adopted Statement of Financial
Accounting Standard ("SFAS") No. 144, Accounting for the Impairment or Disposal
of Long-Lived Assets. SFAS 144 provides additional guidance on the accounting
for impairments of long-lived assets and updates the accounting and reporting
requirements for discontinued operations. In accordance with the provisions of
SFAS 144, CRLP records individual property sales as discontinued operations,
unless CRLP maintains significant continuing involvement with properties that
have been sold. During the second quarter of 2002 and year-to-date, CRLP did not
have any property sales that were required to be classified as discontinued
operations.
In April 2002, FASB issued SFAS 145, Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.
SFAS 145 rescinds SFAS 4, which required all gains and losses from
extinguishment of debt to be aggregated and, if material, classified as an
extraordinary item, net of related income tax effect. As a result, the criteria
in Accounting Principles Board Opinion 30, will now be used to classify those
gains and losses. SFAS 64 amended SFAS 4, and is no longer necessary because
SFAS 4 has been rescinded. SFAS 44 and the amended sections of SFAS 13 are not
applicable to CRLP and therefore have no effect on CRLP's financial statements.
SFAS 145 is effective for fiscal years beginning after May 15, 2002 with early
application encouraged. The adoption of SFAS 145 will likely not have a material
effect on CRLP as the gains and losses on the extinguishment of debt are
generally not material to CRLP's financial statements.
Note 2 -- Capital Structure
At June 30, 2002, the Company controlled CRLP as the sole general
partner and as the holder of 67.3% of the common units of CRLP ("Redeemable
Units") and 63.6% of the preferred units (the "Series A Preferred Units" and
"Series C Preferred Units). The limited partners of CRLP who hold units, are
those persons (including certain officers and directors) who, at the time of the
Initial Public Offering, elected to hold all or a portion of their interest in
the form of Units rather than receiving shares of common stock of the Company,
or individuals from whom the Company acquired certain properties, who elected to
receive Units in exchange for the properties. Each Unit may be redeemed by the
holder thereof for either one share of Common Stock or cash equal to the fair
market value thereof at the time of such redemption, at the option of CRLP.
Additionally, in 1999, CRLP issued $100 million of Series B Cumulative
Redeemable Perpetual Preferred Units ("Series B Units") in a private placement,
that are exchangeable for Series B Preferred Shares of the Company after ten
years at the option of the holders of the Series B Units.
The Board of Trustees of the Company manages CRLP by directing the
affairs of the Company. The Company's interests in CRLP entitle it to share in
cash distributions from, and in the profits and losses of, CRLP in proportion to
the Company's percentage interest therein and entitle the Company to vote on all
matters requiring a vote of the limited partners.
Note 3 --Acquisitions and Dispositions
Acquisitions
During the second quarter 2002, CRLP acquired The Colonnade, a
mixed-use development located in Birmingham, Alabama for a total purchase price
of $55.6 million. The development includes five Class A office buildings
totaling 451,950 square feet and The Shops of Colonnade, a 112,200 square foot
village style retail center. Adjacent sites include such amenities as hotels,
restaurants, banking and financial services, and shopping. The acquisition was
primarily funded through the sale of certain multifamily properties sold earlier
in the quarter (See discussion of dispositions below).
On May 31, 2002, the 50% joint venture partner in our Orlando Fashion
Square retail property located in Orlando, Florida elected to exercise its
option to convert its 50% interest in the property to common shares of the
Company. The conversion value of the joint venture partner's interest is
currently being negotiated in accordance with the procedures set forth in the
joint venture agreement. The conversion value of the joint venture partner's
interest will be reduced by the joint venture partner's pro rata share of the
mortgage indebtedness in the amount of $65.0 million, $32.5 million of which
represents our joint venture partner's pro rata share.
Dispositions
During the second quarter 2002, CRLP sold the following properties:
Property Location # of Units Sales Price
Colonial Village at Monte D'Oro Birmingham, AL 200 $11.2 million
Colonial Village at Hillcrest Mobile, AL 104 5.2 million
Ski Lodge - Tuscaloosa Tuscaloosa, AL 304 9.2 million
Colonial Village at Cordova Pensacola, FL 152 5.4 million
Colonial Village at Oakleigh Pensacola, FL 176 11.0 million
Colonial Village at McGehee Montgomery, AL 468 18.4 million
Colonial Grand at Carrollwood Tampa, FL 244 15.2 million
--------------- ------------------
Total 1,648 $75.6 million
--------------- ------------------
Under each of the sales agreements for the foregoing properties, CRLP
will continue to manage the properties. A portion of the proceeds from the sales
were used to fund the acquisition of The Colonnade, noted above, and the
remaining proceeds will be used to support CRLP's future investment activities.
As a result of these sales, at June 30, 2002 CRLP had $22.2 million of
cash, which was held in an escrow account and designated to be used in a 1031
like-kind exchange during the third quarter of 2002. The designated cash is
reflected as cash and equivalents on CRLP's balance sheet. See Note 8 for
discussion of the acquisition of Heathrow International Business Center during
the third quarter.
Note 4 -- Net Income Per Unit
The following table sets forth the computation of basic and diluted
earnings per unit:
(amounts in thousands, except
per unit data)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
----------- ----------- ----------- -----------
Numerator:
Net Income $ 38,902 $ 15,787 $ 64,640 $ 29,296
Less: Preferred stock dividends (6,109) (5,094) (12,219) (10,048)
----------- ----------- ----------- -----------
Income available to common unitholders $ 32,793 $ 10,693 $ 52,421 $ 19,248
----------- ----------- ----------- -----------
Denominator:
Denominator for basic net income per unit -
weighted average common units 33,169 31,984 32,849 31,977
Effect of dilutive securities:
Trustee and employee stock options, treasury
method 319 122 265 81
----------- ----------- ----------- -----------
Denominator for diluted net income per unit -
adjusted weighted average common units
33,488 32,106 33,114 32,058
----------- ----------- ----------- -----------
Basic net income per unit $ 0.99 $ 0.33 $ 1.60 $ 0.60
----------- ----------- ----------- -----------
Diluted net income per unit $ 0.98 $ 0.33 $ 1.58 $ 0.60
----------- ----------- ----------- -----------
All options outstanding were included in the computation of diluted net income
per unit.
Note 5 -- Segment Information
CRLP is organized into, and manages its business based on the
performance of three separate and distinct operating divisions: Multifamily,
Retail, and Office. Each division has a separate management team that is
responsible for acquiring, developing, managing, and leasing properties within
each division. The applicable accounting policies of the segments are
substantially the same as those described in the "Summary of Significant
Accounting Policies" in CRLP's 2001 Annual Report. However, the pro rata portion
of the revenues, net operating income ("NOI"), and assets of the partially owned
entities and joint ventures that CRLP has entered into are included in the
applicable segment information. Subsequently, in the reconciliation to total
revenues, total NOI, and total assets, the amounts are eliminated, as the
investment in the partially owned entities and joint ventures are reflected in
the consolidated financial statements as investments accounted for under the
equity method.
Three Months Ended Six Months Ended
June 30 June 30
------------------------------------- --------------------------------
(in thousands) 2002 2001 2002 2001
------------------ ------------------ --------------- ---------------
Revenues:
Divisional Revenues
Multifamily $ 26,534 $ 29,869 $ 54,809 $ 59,804
Office 16,952 14,138 31,782 27,599
Retail 37,809 36,352 74,974 71,020
------------------ ------------------ --------------- ---------------
Total Divisional Revenues: 81,295 80,359 161,565 158,423
Partially-owned subsidiaries (3,021) (3,262) (6,156) (6,567)
Unallocated corporate revenues 2,423 357 4,534 1,168
------------------ ------------------ --------------- ---------------
Total Consolidated Revenues: $ 80,697 $ 77,454 $ 159,943 $ 153,024
------------------ ------------------ --------------- ---------------
NOI:
Divisional NOI
Multifamily $ 17,263 $ 20,458 $ 35,938 $ 40,519
Office 11,842 10,178 22,281 19,616
Retail 26,068 25,730 51,838 50,463
------------------ ------------------ --------------- ---------------
Total Divisional NOI: 55,173 56,366 110,057 110,598
Partially-owned subsidiaries (1,585) (1,972) (3,404) (3,874)
Unallocated corporate revenues 2,423 357 4,534 1,168
General and administrative expenses (4,605) (2,495) (8,492) (5,129)
Depreciation (17,591) (16,027) (35,365) (31,824)
Amortization (2,039) (1,801) (4,130) (3,621)
Other (45) (17) (81) (36)
------------------ ------------------ --------------- ---------------
Income from operations 31,731 34,411 63,119 67,282
------------------ ------------------ --------------- ---------------
Total other income (expense) 7,171 (18,146) 1,521 (37,542)
------------------ ------------------ --------------- ---------------
Net income $ 38,902 $ 16,265 $ 64,640 $ 29,740
------------------ ------------------ --------------- ---------------
(in thousands) June 30, December 31,
Assets: 2002 2001
------------------ ------------------
Divisional Assets
Multifamily $ 654,989 $ 723,447
Office 474,241 377,255
Retail 914,664 905,964
------------------ ------------------
Total Divisional Assets: 2,043,894 2,006,666
Partially-owned subsidiaries (115,859) (106,191)
Unallocated corporate assets (1) 123,076 113,908
------------------ ------------------
$ 2,051,111 $ 2,014,383
------------------ ------------------
(1) Includes the Company's investment in partially-owned entities of
$34,791 as of June 30, 2002, and $31,594 as of December 31, 2001.
Management evaluates the performance of its segments and allocates resources to
them based on NOI. NOI consists of revenues in excess of general operating
expenses, salaries and wages, repairs and maintenance, taxes, licenses, and
insurance. Segment information for the three and six months ended June 30, 2002
and 2001, and total divisional assets to total assets as of June 30, 2002 and
December 31, 2001 is as follows:
Note 6 -- Derivative Instruments
In the normal course of business, CRLP is exposed to the effect of
interest rate changes. CRLP limits these risks by following established risk
management policies and procedures including the use of derivatives. For
interest rate exposures, derivatives are used primarily to align rate movements
between interest rates associated with CRLP's leasing income and other financial
assets with interest rates on related debt, and manage the cost of borrowing
obligations.
CRLP does not use derivatives for trading or speculative purposes.
Further, CRLP has a policy of only entering into contracts with major financial
institutions based upon their credit ratings and other factors. When viewed in
conjunction with the underlying and offsetting exposure that the derivatives are
designed to hedge, CRLP has not sustained a material loss from those instruments
nor does it anticipate any material adverse effect on its net income or
financial position in the future from the use of derivatives.
CRLP has entered into several different hedging transactions in an
effort to manage exposure to changes in interest rates. The following table
summarizes the notional values, fair values and other characteristics of CRLP's
derivative financial instruments at June 30, 2002. The notional value at June
30, 2002 provides an indication of the extent of CRLP's involvement in these
instruments at that time, but does not represent total exposure to credit,
interest rate, or market risk.
Interest Fair Value
Product Type Notional Value Rate Maturity (in thousands)
- ------------------------------------------ ----------------------- ------------- ------------ -------------------
1) Interest Rate SWAP, Cash Flow $30.2-$27.7 million 5.932% 1/01/06 $ (2,049)
2) Interest Rate SWAP, Cash Flow $75.0 million 2.130% 12/10/02 (114)
3) Interest Rate SWAP, Cash Flow $50.0 million 2.319% 1/01/03 (135)
4) Interest Rate SWAP, Cash Flow $25.0 million 2.430% 1/01/03 (84)
5) Interest Rate SWAP, Fair Value $50.0 million 5.015% 7/26/04 1,796
6) Interest Rate CAP, Cash Flow $21.1 million 6.850% 6/29/04 26
7) Interest Rate CAP, Cash Flow $17.9 million 6.850% 7/06/04 22
8) Interest Rate CAP, Cash Flow $30.4 million 11.200% 6/30/03 0
9) Interest Rate CAPS, Cash Flow $53.0 million 4.840% 4/01/04 131
On June 30, 2002, the derivative instruments were reported at their
fair value as Other Assets of $2.0 million and Other Liabilities of $2.4
million. For the quarter and the first half of the year, adjustments of $1.3
million and $0.3 million were recorded, respectively, as unrealized losses in
accumulated other comprehensive income (loss), and there was an adjustment to
fixed rate debt of $0.5 million during the second quarter 2002. Additionally,
CRLP recorded a nominal loss in earnings due to some ineffectiveness on the caps
and one of the swaps. The ineffectiveness resulted from a timing difference
regarding rate reset dates on the swap and minor differences in the cap and
hedged debt notional amounts.
Most of CRLP's hedges are designated as cash flow hedges. Cash flow
hedges protect against the variability in future cash outflows of current or
forecasted debt. Interest rate swaps that convert variable payments to fixed
payments are cash flow hedges. The changes in the fair value of these hedges are
reported on the balance sheet with a corresponding adjustment to either
accumulated other comprehensive income (loss) or in earnings--depending on the
type of hedging relationship. Over time, the unrealized gains and losses held in
accumulated other comprehensive income (loss) will be reclassified to earnings.
This reclassification occurs in the same period or periods that the hedged cash
flows affect earnings. Within the next twelve months, CRLP expects to reclassify
to earnings approximately $1.2 million of the current balance held in
accumulated other comprehensive income (loss) to earnings as interest expense.
CRLP hedges its exposure to the variability in future cash flows for
forecasted transactions over a maximum period of 12 months. During the
forecasted period, unrealized gains and losses in the hedging instrument will be
reported in accumulated other comprehensive income (loss). Once the hedged
transaction takes place, the hedge gains and losses will be reported in earnings
during the same period in which the hedged item is recognized in earnings.
Note 7 -- Comprehensive Income (Loss)
Comprehensive income (loss) consisted of the following:
(in thousands) Three Months ended Six Months ended
June 30, 2002 June 30, 2002
-------------------------- --------------------------
Net income $ 38,902 $ 64,640
Other comprehensive income (loss)
Unrealized income (loss) on cash flow
hedging activities (1,788) (778)
-------------------------- --------------------------
Comprehensive income $ 37,114 $ 63,862
-------------------------- --------------------------
Accumulated other comprehensive income (loss) consisted of the
following:
(in thousands) Accumulated Other
Comprehensive Income (Loss)
-------------------------------------
Balance at December 31, 2001 $ (1,403)
Current period change in fair value of
derivative instruments (778)
-------------------------------------
Balance at June 30, 2002 $ (2,181)
-------------------------------------
Note 8 -- Subsequent Events
Distribution
On July 25, 2002, a cash distribution was declared to partners of CRLP
in the amount of $0.66 per unit, totaling $22.0 million. The distribution was
declared to partners of record as of August 5, 2002, and was paid on August 12,
2002.
Dispositions
On July 11, 2002, CRLP sold University Park Plaza, an office asset, and
Colonial Promenade University Park, Phase II, a retail asset, both located in
Orlando, Florida. University Park Plaza consists of three office buildings
totaling 72,500 square feet and Colonial Promenade University Park, Phase II
contains 183,450 square feet. The total sales price for these assets was $16.7
million. The proceeds from the sales were used to acquire Heathrow International
Business Center in Orlando, Florida, as noted below.
Acquisitions
Effective August 1, 2002, CRLP acquired Heathrow International Business
Center, a seven-building office park totaling 805,765 rentable square feet and
102 acres of land for potential future development, located in the Lake
Mary/Heathrow submarket of Orlando, Florida. Current tenants include national
and regional companies like Veritas, Bank One, FiServ, and The United States
Government. The total purchase price of the office park was $122.0 million,
which was primarily funded through CRLP's recent sales of multifamily and retail
assets and the assumption of $45.9 million of existing debt. The remaining
balance was funded through CRLP's unsecured line of credit. Additionally, CRLP
has agreed to acquire one new office building that contains 192,000 square feet.
The closing for this acquisition will occur upon the earlier of the third
anniversary of the date of the agreement or at such time that the seller
achieves certain leasing targets for the property. The purchase price will be
determined based on the percentage of gross leasable area actually leased and
the net operating income generated by the leases at the time of acquisition.
Additionally, during July 2002, CRLP acquired three single family homes
located in Montgomery, Alabama for a total purchase price of approximately $0.5
million, which will be operated as rental property. The homes were purchased as
part of a "corporate rental program" for an automobile manufacturer that is
building a manufacturing plant near Montgomery, Alabama. Under the corporate
rental program, executives of the automobile manufacturer will rent the homes
from CRLP for an initial term of three years, with the option to extend the
lease, and have agreed to have other employees lease additional multifamily
units at Colonial Grand at Promenade located in Montgomery, Alabama. The homes
were purchased from Lowder New Homes, Inc., a related party, and were funded
through CRLP's unsecured line of credit.
Debt Financing
On July 31, 2002, CRLP completed a $100.0 million public debt offering
of unsecured senior notes. The notes, which mature in July 2012, bear a coupon
rate of 6.88%, and were priced to yield an effective rate of 6.99% over the
ten-year term. CRLP used the net proceeds of the offering to repay a $57.5
million medium-term note that matured on August 9, 2002 and the remaining amount
was used to pay down a portion of the outstanding balance on its unsecured line
of credit.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
Colonial Properties Trust:
We have reviewed the accompanying consolidated condensed balance sheet
of Colonial Realty Limited Partnership (the "Partnership") as of June 30, 2002,
and the related consolidated condensed statements of income for the three-month
and six-month periods ended June 30, 2002 and 2001, and the consolidated
condensed statements of cash flows for the six-month periods ended June 30, 2002
and 2001. These financial statements are the responsibility of the Partnership's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States of
America, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying consolidated condensed financial
statements for them to be in conformity with accounting principles generally
accepted in the United States of America.
We have previously audited, in accordance with auditing standards
generally accepted in the United States of America, the consolidated balance
sheet as of December 31, 2001, and the related consolidated statements of
operations, partners' capital, and cash flows for the year then ended (not
presented herein); and in our report dated January 18, 2002, except for Note 16,
as to which the date is February 25, 2002, we expressed an unqualified opinion
on those consolidated financial statements. In our opinion, the information set
forth in the accompanying consolidated condensed balance sheet as of December
31, 2001, is fairly stated in all material respects in relation to the
consolidated balance sheet from which it has been derived.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Birmingham, Alabama
August 12, 2002
COLONIAL REALTY LIMITED PARTNERSHIP
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Colonial Realty Limited Partnership ("CRLP"), a Delaware limited
partnership, is the operating partnership of Colonial Properties Trust, an
Alabama real estate investment trust (the "Company") whose shares are listed on
the New York Stock Exchange. The Company is engaged in the ownership,
development, management, and leasing of multifamily communities, office
buildings, retail malls and shopping centers. The Company is organized as a real
estate investment trust (REIT) and owns and operates properties in nine states
in the Sunbelt region of the United States. As of June 30, 2002, CRLP's real
estate portfolio consisted of 41 multifamily communities, 20 office properties,
and 43 retail properties.
CRLP is one of the largest diversified REITs in the United States.
Consistent with its diversified strategy, Colonial manages its business with
three separate and distinct operating divisions: Multifamily, Office, and
Retail. Each division has an Executive Vice President that oversees growth and
operations and has a separate management team that is responsible for acquiring,
developing, and leasing properties within each division. This structure allows
CRLP to utilize specialized management personnel for each operating division.
Constant communication among the Executive Vice Presidents and centralized
functions of accounting, information technology, due diligence and
administrative services provide CRLP with unique synergy allowing CRLP to take
advantage of a variety of investment opportunities. Decisions for investments in
acquisitions and developments and for dispositions are also centralized.
The following discussion should be read in conjunction with
management's discussion and analysis of financial condition and results of
operations and all of the other information appearing in CRLP's 2001 Financial
Statements as filed with the Securities and Exchange Commission on Form 10-K and
with the financial statements included therein and the notes thereto.
Any statement contained in this report which is not a historical fact,
or which might be otherwise considered an opinion or projection concerning CRLP
or its business, whether express or implied, is meant as, and should be
considered, a forward-looking statement as that term is defined in the Private
Securities Litigation Reform Act of 1996. Forward-looking statements are based
upon assumptions and opinions concerning a variety of known and unknown risks,
including but not limited to changes in market conditions, the supply and demand
for leasable real estate, interest rates, increased competition, changes in
governmental regulations, and national and local economic conditions generally,
as well as other risks more completely described in CRLP's prospectuses and
annual reports filed with the Securities and Exchange Commission. If any of
these assumptions or opinions prove incorrect, any forward-looking statements
made on the basis of such assumptions or opinions may also prove materially
incorrect in one or more respects.
Results of Operations -- Three Months Ended June 30, 2002 and 2001
Revenue -- Total revenue increased by $3.2 million, or 4.2%, for the
second quarter of 2002 when compared to the second quarter of 2001. Of this
increase, $0.7 million represents revenues generated by properties acquired or
developed during 2001 and the first half of 2002, net of revenues from
properties disposed of in 2002 and 2001, and $0.6 million relates to the
consolidation of Colonial Properties Services, Inc (CPSI) effective September 1,
2001. The remaining increase primarily relates to increases in rental rates at
existing properties, other ancillary income, and third party management fee
income.
Same-property revenue increased by $0.5 million, or 0.7%, for the
second quarter of 2002 when compared to the second quarter of 2001. This
increase is primarily related to the increase in rental rates and lease buyouts
at our retail operating properties, offset by lease buyouts that occurred in our
office division in the second quarter of 2001, and an increase in move-in
concessions in our multifamily properties during the second quarter of 2002 as a
result of a slowdown in the U.S. economy during the last year.
Operating Expenses -- Total operating expenses increased by $5.9
million, or 13.8%, for the second quarter of 2002 when compared to the second
quarter of 2001. Of this increase, $1.2 million is related to increases in real
estate taxes, licenses, and insurance at existing properties, $1.3 million is
related to the consolidation of CPSI effective September 1, 2001, and $0.7
million is related to depreciation and amortization expense on newly acquired or
developed properties, net of properties disposed of in 2002 and 2001. The
remaining increase is associated with increases in general operating expenses
and repairs and maintenance expenses.
Same-property operating expenses increased by $2.3 million, or 11.6%,
for the second quarter of 2002 when compared to the second quarter of 2001. Of
the increase, $1.2 million is related to the increase in real estate taxes and
insurance in our current markets. The remaining increase is associated with
increases in general operating expenses, utilities expenses, and repairs and
maintenance expenses.
Other Income and Expense -- Interest expense decreased by $3.8 million,
or 19.8%, for the second quarter of 2002 when compared to the second quarter of
2001. The decrease in interest expense is primarily attributable to the decrease
in the interest rate environment in the second quarter 2002 as compared to the
second quarter 2001. Overall, CRLP's weighted average interest rate decreased
from 7.04% at June 30, 2001 to 5.97% at June 30, 2002. Gains (losses) on sales
of property increased $22.3 million in the second quarter of 2002 when compared
to the second quarter of 2001, which is attributable to the sales of seven
multifamily properties during the quarter. See Liquidity and Capital Resources
for further discussion.
Results of Operations -- Six Months Ended June 30, 2002 and 2001
Revenue -- Total revenue increased by $6.9 million, or 4.5%, for the
six months ended June 30, 2002 when compared to the six months ended June 30,
2001. Of this increase, $1.1 million relates to the consolidation of CPSI
effective September 1, 2001, $0.4 million represents revenues generated by
properties acquired or developed during 2002 and the second half of 2001, net of
properties disposed of in 2002 and 2001. The remaining increase primarily
relates to increases in rental rates at existing properties, other ancillary
income, and third party management fee income.
Same-property revenue increased by $3.0 million, or 2.2%, for the six
months ended June 30, 2002 when compared to the six months ended June 30, 2001.
This increase is primarily related to the increase in rental rates and specialty
leasing income in our retail operating properties, offset by an increase in
move-in concessions in our multifamily properties during the six months ended
June 30, 2002 as a result of a slowdown in the U.S. economy during the last
year.
Operating Expenses -- Total operating expenses increased by $11.1
million, or 12.9%, for the six months ended June 30, 2002 when compared to the
six months ended June 30, 2001. Of this increase, $2.4 million is related to
increases in real estate taxes, licenses, and insurance, $2.3 million is related
to the consolidation of CPSI effective September 1, 2001, and $1.4 million is
related to depreciation and amortization expense on newly developed or acquired
properties, net of properties disposed of in 2002 and 2001. The remaining
increase primarily relates to increases in general operating expenses and
repairs and maintenance at existing properties.
Same-property operating expenses increased by $3.8 million, or 9.7%,
for the six months ended June 30, 2002 when compared to the six months ended
June 30, 2001. Of the increase, $2.4 million is related to the increase in real
estate taxes and insurance in our current markets. The remaining increase is
associated with increases in general operating expenses, utilities expenses, and
repairs and maintenance expenses.
Other Income and Expense -- Interest expense decreased by $7.5 million,
or 19.4%, for the six months ended June 30, 2002 when compared to the six months
ended June 30, 2001. The decrease in interest expense is primarily attributable
to the decrease in the interest rate environment in the second quarter 2002 as
compared to the second quarter 2001. Overall, CRLP's weighted average interest
rate decreased from 7.04% at June 30, 2001 to 5.97% at June 30, 2002. Gains
(losses) on sales of property increased $32.3 million for the six months ended
June 30, 2002 when compared to the six months ended June 30, 2001, which is
attributable to the sales of eight multifamily properties during the period. See
Liquidity and Capital Resources and CRLP's quarterly report of Form 10-Q for the
period ended March 31, 2002 for further discussion.
Summary of Critical Accounting Policies
Management of CRLP considers the following accounting policies to be
critical to the reported operating results of CRLP:
Real Estate Development
CRLP capitalizes all costs, including interest, real estate taxes that
are associated with the development, construction, expansion, or leasing of real
estate investments as a cost of the property. All other expenditures necessary
to maintain a property in ordinary operating condition are expensed as incurred.
CRLP evaluates its properties, at least annually or upon the occurrence
of significant changes in the operations, to assess whether any impairment
indications are present, including recurring operating losses and significant
adverse changes in legal factors or business environment that affect the
recovery of the recorded value. If any property is considered impaired, a loss
will be provided to reduce the carrying value of the property to its estimated
fair value. The valuation of real estate investments involves many subjective
assumptions dependent upon future economic events that affect the ultimate value
of the property.
Valuation of Receivables
CRLP is subject to tenant defaults and bankruptcies at our Office and
Retail properties that could affect the collection of outstanding receivables.
In order to mitigate these risks, CRLP performs credit review and analysis on
all commercial tenants and significant leases before they are executed. CRLP
evaluates the collectibility of outstanding receivables and records allowances
as appropriate.
Liquidity and Capital Resources
During the second quarter of 2002, CRLP invested $80.8 million in the
acquisition and development of properties. CRLP financed this growth through
advances on its bank line of credit, cash from operations, proceeds from CRLP's
dividend reinvestment plan, disposition of assets, and financing of certain
properties. As of June 30, 2002, CRLP had an unsecured bank line of credit
providing for total borrowings of $300 million. The line, which is used by CRLP
primarily to finance property acquisitions and development, bears interest at
LIBOR plus 115 basis points, which matures in April 2003, and provides for a
two-year amortization in the case of non-renewal. The line of credit agreement
includes a competitive bid feature that will allow CRLP to convert up to $150
million under the line of credit to a fixed rate, for a fixed term not to exceed
90 days. The balance outstanding on this line at June 30, 2002, was $211.6
million.
At June 30, 2002, CRLP's total outstanding debt balance was $1.2
billion. The outstanding balance includes fixed-rate debt of $931.9 million, or
78.8% of the total debt balance, and floating-rate debt of $251.4 million, or
21.2% of the total debt balance. CRLP's total market capitalization as of June
30, 2002 was $2.8 billion and its ratio of debt to market capitalization was
42.9%. Certain loan agreements of CRLP contain restrictive covenants, which
among other things require maintenance of various financial ratios. At June 30,
2002, CRLP was in compliance with these covenants.
CRLP continued its asset recycling program, which allows CRLP to sell
mature, slower growing assets and reinvest the proceeds into opportunities with
more growth potential. During the second quarter of 2002, CRLP sold the
following seven multifamily properties:
Property Location # of Units Sales Price
Colonial Village at Monte D'Oro Birmingham, AL 200 $11.2 million
Colonial Village at Hillcrest Mobile, AL 104 5.2 million
Ski Lodge - Tuscaloosa Tuscaloosa, AL 304 9.2 million
Colonial Village at Cordova Pensacola, FL 152 5.4 million
Colonial Village at Oakleigh Pensacola, FL 176 11.0 million
Colonial Village at McGehee Montgomery, AL 468 18.4 million
Colonial Grand at Carrollwood Tampa, FL 244 15.2 million
--------------- ------------------
Total 1,648 $75.6 million
--------------- ------------------
Under each of the sales agreements for the foregoing properties, CRLP will
continue to manage the properties.
The proceeds from these sales were primarily used to fund the
acquisition of The Colonnade, a mixed-use development located in Birmingham,
Alabama, which was purchased for a total purchase price of $55.6 million. The
development includes five Class A office buildings totaling 451,950 square feet
and The Shops of Colonnade, a 112,200 square foot village style retail center.
Adjacent sites include such amenities as three hotels, restaurants, banking and
financial services, and shopping. The remaining proceeds will be used to support
CRLP's investment activities.
Through its taxable REIT subsidiary, CPSI, CRLP provides management
services for properties owned by third parties, and provides construction
management and development services for third parties, for which CRLP recognizes
management and development fees. Additionally, CRLP makes the following types of
investments through CPSI; (a) purchases undeveloped land and sells parcels land
to a third parties, (b) develops a property, and upon completion sells the
property to a third party, or (c) purchases an operating property to be sold to
a third party within a short period of time.
CRLP expects to meet its short-term liquidity requirements generally
through its net cash provided by operations, proceeds from the Company's
dividend reinvestment plan, and borrowings under credit arrangements and expects
to meet certain of its long-term liquidity requirements, such as scheduled debt
maturities, repayment of financing of construction and development activities,
and possible property acquisitions, through long-term secured and unsecured
borrowings and the issuance of debt securities or additional equity securities
of the Company, sales of properties, joint ventures, or, possibly in connection
with acquisitions of land or improved properties, issuance of limited
partnership units. CRLP believes that its net cash provided by operations will
be adequate and anticipates that it will continue to be adequate to meet both
operating requirements and payment of dividends by CRLP in accordance with REIT
requirements in both the short and the long term.
Financial Instruments: Derivatives and Hedging
In the normal course of business, CRLP is exposed to the effect of
interest rate changes. CRLP limits these risks by following established risk
management policies and procedures including the use of derivatives. For
interest rate exposures, derivatives are used primarily to align rate movements
between interest rates associated with CRLP's leasing income and other financial
assets with interest rates on related debt, and manage the cost of borrowing
obligations.
CRLP does not use derivatives for trading or speculative purposes.
Further, CRLP has a policy of only entering into contracts with major financial
institutions based upon their credit ratings and other factors. When viewed in
conjunction with the underlying and offsetting exposure that the derivatives are
designed to hedge, CRLP has not sustained a material loss from those instruments
nor does it anticipate any material adverse effect on its net income or
financial position in the future from the use of derivatives.
CRLP has entered into several different hedging transactions in an
effort to manage exposure to changes in interest rates. The following table
summarizes the notional values, fair values and other characteristics of CRLP's
derivative financial instruments at June 30, 2002. The notional value at June
30, 2002 provides an indication of the extent of CRLP's involvement in these
instruments at that time, but does not represent exposure to credit, interest
rate, or market risk.
Interest Fair Value
Product Type Notional Value Rate Maturity (in thousands)
- ------------------------------------------ ----------------------- ------------- ------------ -------------------
1) Interest Rate SWAP, Cash Flow $30.2-$27.7 million 5.932% 1/01/06 $ (2,049)
2) Interest Rate SWAP, Cash Flow $75.0 million 2.130% 12/10/02 (114)
3) Interest Rate SWAP, Cash Flow $50.0 million 2.319% 1/01/03 (135)
4) Interest Rate SWAP, Cash Flow $25.0 million 2.430% 1/01/03 (84)
5) Interest Rate SWAP, Fair Value $50.0 million 5.015% 7/26/04 1,796
6) Interest Rate CAP, Cash Flow $21.1 million 6.850% 6/29/04 26
7) Interest Rate CAP, Cash Flow $17.9 million 6.850% 7/06/04 22
8) Interest Rate CAP, Cash Flow $30.4 million 11.200% 6/30/03 0
9) Interest Rate CAPS, Cash Flow $53.0 million 4.840% 4/01/04 131
On June 30, 2002, the derivative instruments were reported at their
fair value as Other Assets of $2.0 million and Other Liabilities of $2.4
million. For the quarter and year-to-date, adjustments of $1.3 million and $0.3
million were recorded, respectively, as unrealized gains in accumulated other
comprehensive income (loss), and there was an adjustment to fixed rate debt of
$0.5 million. Additionally, CRLP recorded a nominal loss in earnings due to some
ineffectiveness on the caps and one of the swaps. The ineffectiveness resulted
from a timing difference regarding rate reset dates on the swap and minor
differences in the cap and hedged debt notional.
Most of CRLP's hedges are designated as cash flow hedges. Cash flow
hedges protect against the variability in future cash outflows of current or
forecasted debt. Interest rate swaps that convert variable payments to fixed
payments are cash flow hedges. The changes in the fair value of these hedges are
reported on the balance sheet with a corresponding adjustment to either
accumulated other comprehensive income (loss) or in earnings--depending on the
type of hedging relationship. Over time, the unrealized gains and losses held in
accumulated other comprehensive income (loss) will be reclassified to earnings.
This reclassification occurs in the same period or periods that the hedged cash
flows affect earnings. Within the next twelve months, CRLP expects to reclassify
to earnings approximately $1.2 million of the current balance held in
accumulated other comprehensive income (loss) to earnings as interest expense.
CRLP hedges its exposure to the variability in future cash flows for
forecasted transactions over a maximum period of 12 months. During the
forecasted period, unrealized gains and losses in the hedging instrument will be
reported in accumulated other comprehensive income (loss). Once the hedged
transaction takes place, the hedge gains and losses will be reported in earnings
during the same period in which the hedged item is recognized in earnings.
Outlook
Management intends to maintain CRLP's strength through continued
diversification, while pursuing acquisitions and developments that meet
Colonial's criteria for property quality, market strength, and investment
return. Management will continue to use its line of credit to provide short-term
financing for acquisition, development, and expansion activities and plans to
continue to replace significant borrowings under the bank line of credit with
funds generated from the sale of additional equity securities of the Company,
sale of assets, and permanent financing, as market conditions permit. Management
believes that these potential sources of funds, along with the possibility of
issuing limited partnership units in exchange for properties, will provide CRLP
with the means to finance additional acquisitions, developments, and expansions.
In addition to the issuance of equity and debt, management is
investigating alternate financing methods and sources to raise future capital.
Private placements, joint ventures, and non-traditional equity and debt
offerings are some of the alternatives CRLP is contemplating.
Management anticipates that its net cash provided by operations and its
existing cash balances will provide the necessary funds on a short- and long-
term basis to cover its operating expenses, interest expense on outstanding
indebtedness, recurring capital expenditures, and dividends to shareholders in
accordance with Internal Revenue Code requirements applicable to real estate
investment trusts.
Inflation
Leases at the multifamily properties generally provide for an initial
term of six months to one year and allow for rent adjustments at the time of
renewal. Leases at the office properties typically provide for rent adjustments
and the pass-through of certain operating expenses during the term of the lease.
Substantially all of the leases at the retail properties provide for the
pass-through to tenants of certain operating costs, including real estate taxes,
common area maintenance expenses, and insurance. All of these provisions permit
CRLP to increase rental rates or other charges to tenants in response to rising
prices and, therefore, serve to minimize CRLP's exposure to the adverse effects
of inflation.
An increase in general price levels may immediately precede, or
accompany, an increase in interest rates. At June 30, 2002, CRLP's exposure to
rising interest rates was mitigated by the existing debt level of 42.9% of
CRLP's total market capitalization, the high percentage of fixed rate debt
(78.8%), and the use of interest rate swaps to effectively fix the interest rate
on $75.0 million through December 2002, $75.0 million through January 2003, and
approximately $30.0 million through January 2006. As a result, for the
short-term, increases in interest expense resulting from increasing inflation is
anticipated to be less than future increases in income before interest.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
CRLP is exposed to interest rate changes primarily as a result of its
line of credit and long-term debt used to maintain liquidity and fund capital
expenditures and expansion of CRLP's real estate investment portfolio and
operations. CRLP's interest rate risk management objective is to limit the
impact of interest rate changes on earnings and cash flows and to lower its
overall borrowing costs. To achieve its objectives, CRLP borrows primarily at
fixed rates and may enter into derivative financial instruments such as interest
rate swaps, caps and treasury locks in order to mitigate its interest rate risk
on a related financial instrument. CRLP does not enter into derivative or
interest rate transactions for speculative purposes.
The table below presents the principal amounts, weighted average
interest rates, fair values and other terms required by year of expected
maturity to evaluate the expected cash flows and sensitivity to interest rate
changes. Also included is a summary of CRLP's swap contracts and rate caps at
June 30, 2002.
Estimated
Fair
(amounts in thousands) 2002 2003 2004 2005 2006 Thereafter Total Value
- ----------------------------------------------------------------------------------------------------------------------------------
Fixed Rate Debt $57,500 253,048 54,909 76,528 75,000 414,959 931,944 942,583
Average interest rate
at June 30, 2002 7.93% 4.79% 7.67% 7.61% 7.97% 7.33% 6.72% -
Variable Debt $ 524 61,599 50,000 - - 139,294 251,417 251,417
Average interest rate
at June 30, 2002 2.98% 2.99% 3.82% - - 2.70% 3.18% -
Interest Rate SWAPs
Variable to fixed $ - 150,000 - - 29,447 - 179,447 (2,382)
Average pay rate - 2.24% - - 6.59% - 2.95% -
Fixed to variable $ - - 50,000 - - - 50,000 1,796
Average pay rate - - 5.02% - - - 5.02% -
Interest Rate Cap $ - 30,379 90,819 - - - 121,198 179
Interest Rate - 11.20% 5.69% - - - 7.07% -
The table incorporates only those exposures that exist as of June 30, 2002 and
it does not consider those exposures or positions that could arise after that
date. Moreover, because firm commitments are not presented in the table above,
the information presented therein has limited predictive value. As a result,
CRLP's ultimate realized gain or loss with respect to interest rate fluctuations
will depend on the exposures that arise during the period, CRLP's hedging
strategies at that time, and interest rates.
COLONIAL REALTY LIMITED PARTNERSHIP
PART II -- OTHER INFORMATION
Item 2. Changes in Securities.
The Company from time to time issues common shares of beneficial
interest ("Common Shares") pursuant to its Dividend Reinvestment and Share
Purchase Plan, its Non-Employee Trustee Share Option Plan, its Non-Employee
Trustee Share Plan, and its Employee Share Option and Restricted Share Plan, in
transactions that are registered under the Securities Act of 1933, as amended
(the "Act"). Pursuant to CRLP's Third Amended and Restated Agreement of Limited
Partnership, each time the Company issues Common Shares pursuant to the
foregoing plans, CRLP issues to Colonial Properties Trust, its general partner,
an equal number of Units for the same price at which the Common Shares were
sold, in transactions that are not registered under the Act in reliance on
Section 4(2) of the Act. During the quarter ended June 30, 2002, CRLP issued
299,268 Units in such transactions for an aggregate of approximately $11.0
million.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
12. Ratio of Earnings to Fixed Charges
15. Letter re: Unaudited Interim Financial Information
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended June
30, 2002. Subsequent to quarter-end, a Form 8-K dated July 31,
2002, reported a $100.0 million public debt offering of unsecured
senior notes, under Item 5, "Other Events".
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
COLONIAL REALTY LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Colonial Properties Trust,
its general partner
Date: August 14, 2002 By: /s/ Howard B. Nelson, Jr.
-----------------------------------
Howard B. Nelson, Jr.
Chief Financial Officer
(Duly Authorized Officer
and Principal Financial Officer)
Date: August 14, 2002 /s/ Kenneth E. Howell
-----------------------------------
Kenneth E. Howell
Senior Vice President and
Chief Accounting Officer
(Principal Accounting Officer)