SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
Amendment No. 1 to
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Original Report: March 31, 1997
APPLE RESIDENTIAL INCOME TRUST, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 333-10635 54-1816010
(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
306 East Main Street
Richmond, Virginia 23219
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code:
(804) 643-1761
<PAGE>
APPLE RESIDENTIAL INCOME TRUST, INC.
FORM 8-K/A
Index
Page No.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
a. Independent Auditors' Report
(Polo Run Apartments)
Historical Statement of Income and
Direct Operating Expenses
(Polo Run Apartments)
Note to Historical Statement of
Income and Direct Operating
Expenses (Polo Run Apartments)
b. Independent Auditors' Report
(Wildwood Apartments)
Historical Statement of Income and
Direct Operating Expenses
(Wildwood Apartments)
Note to Historical Statement of
Income and Direct Operating
Expenses (Wildwood Apartments)
c. Independent Auditors' Report
(Toscana Apartments)
Historical Statement of Income and
Direct Operating Expenses
(Toscana Apartments)
Note to Historical Statement of
Income and Direct Operating
Expenses (Toscana Apartments)
-2-
<PAGE>
d. Pro Forma Statement of Operations
for the Year ended December 31, 1996
(unaudited)
Pro Forma Statement of Operations
for the Three Months ended March 31, 1997
(unaudited)
e. Exhibit
23.1 Consent of Independent Auditors
23.2 Consent of Independent Auditors
23.3 Consent of Independent Auditors
-3-
<PAGE>
The Company hereby amends and restates Items 7.a., 7.b.,
7.c. and 7.d. of its Current Report on Form 8-K dated March 31,
1997 as follows:
-4-
<PAGE>
ITEM 7.a.
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
PHONE: (804) 346-2626
FAX: (804) 346-9311
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Apple Residential Income Trust, Inc.
Richmond, Virginia
We have audited the accompanying statement of income and direct
operating expenses exclusive of items not comparable to the proposed future
operations of the property Polo Run Apartments located in Arlington, Texas for
the twelve month period ended February 28, 1997. This statement is the
responsibility of the management of Polo Run Apartments. Our responsibility is
to express an opinion on this statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the statement. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in a filing by Apple Residential Income Trust, Inc.) and excludes
material expenses, described in Note 1 to the statement, that would not be
comparable to those resulting from the proposed future operations of the
property.
In our opinion, the statement referred to above presents fairly, in all
material respects, the income and direct operating expenses of Polo Run
Apartments (as defined above) for the twelve month period ended February 28,
1997, in conformity with generally accepted accounting principles.
/s/ L.P. MARTIN & CO., P.C.
Richmond, Virginia
May 21, 1997
<PAGE>
POLO RUN APARTMENTS
STATEMENT OF INCOME AND DIRECT OPERATING EXPENSES EXCLUSIVE OF
ITEMS NOT COMPARABLE TO THE PROPOSED FUTURE
OPERATIONS OF THE PROPERTY
TWELVE MONTHS ENDED FEBRUARY 28, 1997
INCOME
Rental and Other Income $1,304,547
DIRECT OPERATING EXPENSES
Administrative and Other 101,400
Insurance 28,521
Repairs and Maintenance 257,602
Taxes, Property 133,509
Utilities 128,924
TOTAL DIRECT OPERATING EXPENSES 649,956
Operating income exclusive of items not
comparable to the proposed future --------
operations of the property $ 654,591
========
See accompanying note to the financial statement.
<PAGE>
POLO RUN APARTMENTS
NOTE TO THE STATEMENT OF INCOME AND DIRECT OPERATING EXPENSES
EXCLUSIVE OF ITEMS NOT COMPARABLE TO THE PROPOSED FUTURE
OPERATIONS OF THE PROPERTY
TWELVE MONTHS ENDED FEBRUARY 28, 1997
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
Polo Run Apartments is a 224 unit residential garden style apartment complex
located on 9.15 acres in Arlington, Texas.
During the financial statement period, the assets comprising the property
were owned by A V Polo Run Associates, Ltd. Apple Residential Income Trust,
Inc. subsequently purchased the property.
In accordance with Rule 3-14 of Regulation S-X of the Securities and Exchange
Commission, the statement of income and direct operating expenses excludes
interest and non rent related income and expenses not considered comparable to
those resulting from the proposed future operations of the property. Excluded
expenses are mortgage interest, property depreciation and management fees.
<PAGE>
ITEM 7.b.
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
PHONE: (804) 346-2626
FAX: (804) 346-9311
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Apple Residential Income Trust, Inc.
Richmond, Virginia
We have audited the accompanying statement of income and direct
operating expenses exclusive of items not comparable to the proposed future
operations of the property Wildwood Apartments located in Euless, Texas for the
twelve month period ended February 28, 1997. This statement is the
responsibility of the management of Wildwood Apartments.
Our responsibility is to express an opinion on this statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the statement. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in a filing by Apple Residential Income Trust, Inc.) and excludes
material expenses, described in Note 1 to the statement, that would not be
comparable to those resulting from the proposed future operations of the
property.
In our opinion, the statement referred to above presents fairly, in all
material respects, the income and direct operating expenses of Wildwood
Apartments (as defined above) for the twelve month period ended February 28,
1997, in conformity with generally accepted accounting principles.
/s/ L.P. MARTIN & CO., P.C.
Richmond, Virginia
June 4, 1997
<PAGE>
WILDWOOD APARTMENTS
STATEMENT OF INCOME AND DIRECT OPERATING EXPENSES EXCLUSIVE OF
ITEMS NOT COMPARABLE TO THE PROPOSED FUTURE
OPERATIONS OF THE PROPERTY
TWELVE MONTH PERIOD ENDED FEBRUARY 28, 1997
INCOME
Rental and Other Income $ 809,555
----------
DIRECT OPERATING EXPENSES
Administrative and Other 110,035
Insurance 15,246
Repairs and Maintenance 123,470
Taxes, Property 85,616
Utilities 78,937
----------
TOTAL DIRECT OPERATING EXPENSES 413,304
----------
Operating income exclusive of items not
comparable to the proposed future operations
of the property $ 396,251
==========
See accompanying note to the financial statement.
<PAGE>
WILDWOOD APARTMENTS
NOTE TO THE STATEMENT OF INCOME AND DIRECT OPERATING EXPENSES
EXCLUSIVE OF ITEMS NOT COMPARABLE TO THE PROPOSED FUTURE
OPERATIONS OF THE PROPERTY
TWELVE MONTH PERIOD ENDED FEBRUARY 28, 1997
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
Wildwood Apartments is a 120 unit garden style apartment complex located on
10.01 acres in Euless, Texas.
The assets comprising the property were owned by Western Rim Investors 1991-4,
L.P., an entity unaffiliated with Apple Residential Income Trust, Inc., during
the financial statement period. Apple Residential Income Trust, Inc.
subsequently purchased the property.
In accordance with Rule 3-14 of Regulation S-X of the Securities and Exchange
Commission, the statement of income and direct operating expenses excludes
interest and non rent related income and expenses not considered comparable to
those resulting from the proposed future operations of the property. Excluded
expenses are property depreciation, amortization, professional fees and
management fees.
<PAGE>
ITEM 7.c.
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
PHONE: (804) 346-2626
FAX: (804) 346-9311
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Apple Residential Income Trust, Inc.
Richmond, Virginia
We have audited the accompanying statement of income and direct
operating expenses exclusive of items not comparable to the proposed future
operations of the property Toscana Apartments located in Dallas, Texas for the
twelve month period ended February 28, 1997. This statement is the
responsibility of the management of Toscana Apartments. Our responsibility is to
express an opinion on this statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the statement. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in a filing by Apple Residential Income Trust, Inc.) and excludes
material expenses, described in Note 1 to the statement, that would not be
comparable to those resulting from the proposed future operations of the
property.
In our opinion, the statement referred to above presents fairly, in all
material respects, the income and direct operating expenses of Toscana
Apartments (as defined above) for the twelve month period ended February 28,
1997, in conformity with generally accepted accounting principles.
/s/ L.P. MARTIN & CO., P.C.
Richmond, Virginia
June 4, 1997
<PAGE>
TOSCANA APARTMENTS
STATEMENT OF INCOME AND DIRECT OPERATING EXPENSES EXCLUSIVE OF
ITEMS NOT COMPARABLE TO THE PROPOSED FUTURE
OPERATIONS OF THE PROPERTY
TWELVE MONTH PERIOD ENDED FEBRUARY 28, 1997
INCOME
Rental and Other Income $1,083,249
----------
DIRECT OPERATING EXPENSES
Administrative and Other 128,884
Insurance 18,985
Repairs and Maintenance 117,117
Taxes, Property 123,710
Utilities 84,886
---------
TOTAL DIRECT OPERATING EXPENSES 473,582
---------
Operating income exclusive of items not
comparable to the proposed future operations
of the property $ 609,667
===========
See accompanying note to the financial statement.
<PAGE>
TOSCANA APARTMENTS
NOTE TO THE STATEMENT OF INCOME AND DIRECT OPERATING EXPENSES
EXCLUSIVE OF ITEMS NOT COMPARABLE TO THE PROPOSED FUTURE
OPERATIONS OF THE PROPERTY
TWELVE MONTH PERIOD ENDED FEBRUARY 28, 1997
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
Toscana Apartments is a 192 unit garden style apartment complex located on 3.975
acres in Dallas, Texas.
The assets comprising the property were owned by Western Rim Investors 1993-2,
L.P., an entity unaffiliated with Apple Residential Income Trust, Inc., during
the financial statement period. Apple Residential Income Trust, Inc.
subsequently purchased the property.
In accordance with Rule 3-14 of Regulation S-X of the Securities and Exchange
Commission, the statement of income and direct operating expenses excludes
interest and non rent related income and expenses not considered comparable to
those resulting from the proposed future operations of the property. Excluded
expenses are property depreciation, amortization, professional fees and
management fees.
<PAGE>
ITEM 7.d.
<PAGE>
PRO FORMA STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996
(UNAUDITED)
The accompanying Unaudited Pro Forma Statement of Operations for the
twelve months ended December 31, 1996 is presented as if (a) the Company had
acquired the properties shown below on January 1, 1996; (b) the Company had
qualified as a REIT , distributed at least 95% of its taxable income and,
therefore, incurred no federal income tax liability for the period presented;
and (b) the Company had used proceeds from its best efforts offering to acquire
the properties. The Company had no operations during the period ending December
31, 1996. Accordingly, the Company had no revenue or operating profits or loss.
The Unaudited Pro Forma Statement of Operations is presented for comparative
purposes only and is not necessarily indicative of what the actual results of
the Company would have been for the year ended December 31, 1996 if the
acquisitions and Offering had occurred at the beginning of the period presented,
nor does it purport to be indicative of the results of operations in future
periods. The Unaudited Pro Forma Statement of Operations should be read in
conjunction with, and is qualified in its entirety by, the respective historical
financial statements and notes thereto of the Company.
<TABLE>
<CAPTION>
Historical Brookfield Eagle Crest Tahoe Mill Crossing
Statement of Pro Forma Pro Forma Pro Forma Pro Forma
Operations Adjustments Adjustments Adjustments Adjustments
---------------------------------------------------------------------------------
<S> <C>
Date of Acquisitions - 1/31/97 1/31/97 1/31/97 2/28/97
Rental income - $1,198,543 $3,196,618 $1,200,270 $908,336
Expenses
Utilities - 92,664 305,101 149,166 148,270
Repairs and maintenance - 174,233 379,120 351,750 216,500
Taxes and insurance - 152,636 438,546 145,184 115,377
Property management fee - - - - -
Advertising - 30,567 53,153 29,695 25,631
Other operating expenses - - - - -
General and administrative - - - - -
Depreciation of real estate - - - - -
Amortization - - - - -
Other - 91,702 159,460 89,086 76,891
---------------------------------------------------------------------------------
541,802 1,335,380 764,881 582,669
Income before interest income - 656,741 1,861,238 435,389 325,667
Interest income - - - - -
---------------------------------------------------------------------------------
Net income - 656,741 1,861,238 435,389 325,667
=================================================================================
Net income per share -
==============
Weighted average number of shares outstanding -
==============
</TABLE>
<TABLE>
<CAPTION>
Polo Run Wildwood Toscana 1997
Pro Forma Pro Forma Pro Forma Pro Forma Total
Adjustments Adjustments Adjustments Adjustments Pro Forma
------------------------------------------------------------------------
<S> <C>
Date of Acquisitions 03/31/97 03/31/97 03/31/97 - -
Rental income $1,304,547 $809,555 $1,083,249 - $9,701,118
Expenses
Utilities 128,924 78,937 84,886 - 987,948
Repairs and maintenance 257,602 123,470 117,117 - 1,619,792
Taxes and insurance 162,030 100,862 142,695 - 1,257,330
Property management fee - - - 535,336 (A) 535,336
Advertising 25,350 27,509 32,221 - 224,126
Other operating expenses - - - - -
General and administrative - - - 121,390 (B) 121,390
Depreciation of real estate - - - 1,452,183 (C) 1,452,183
Amortization - - - - -
Other 76,050 82,526 96,663 - 672,378
-------------------------------------------------------------------------
649,956 413,304 473,582 2,108,909 6,870,483
Income before interest income 654,591 396,251 609,667 (2,108,909) 2,830,635
Interest income - - - - 0
-------------------------------------------------------------------------
Net income 654,591 396,251 609,667 (2,108,909) 2,830,635
=========================================================================
Net income per share $0.49
==============
Weighted average number of shares outstanding 5,747,837
==============
</TABLE>
The pro forma information reflects adjustments for the actual rental income and
rental expenses for the properties for the period in 1997 prior to their
acquisition by the Company. Net income has been adjusted as follows: (A)
property management and advisory expenses have been adjusted based on the
Company's contractual arrangements of 5% of revenues from rental income plus
reimbursement of certain expenses estimated to be $2.50 per unit; (B) advisory
expenses have been adjusted based on the Company's contractual arrangement of
.25% of gross proceeds from sales of common stock; (C) depreciation has been
adjusted based on the Company's allocation of purchase price to buildings over
an estimated useful life of 27.5 years.
<PAGE>
PRO FORMA STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997
(UNAUDITED)
The accompanying Unaudited Pro Forma Statement of Operations for the
three months ended March 31, 1997 is presented as if (a) the Company had
acquired the properties shown below on January 1, 1997; (b) the Company had
qualified as a REIT , distributed at least 95% of its taxable income and,
therefore, incurred no federal income tax liability for the period presented;
and (b) the Company had used proceeds from its best efforts offering to acquire
the properties.
The Unaudited Pro Forma Statement of Operations is presented for comparative
purposes only and is not necessarily indicative of what the actual results of
the Company will be for the year ended December 31, 1997 if the
acquisitions and Offering had occurred at the beginning of the period presented,
nor does it purport to be indicative of the results of operations in future
periods. The Unaudited Pro Forma Statement of Operations should be read in
conjunction with, and is qualified in its entirety by, the respective historical
financial statements and notes thereto of the Company.
<TABLE>
<CAPTION>
Historical Brookfield Eagle Crest Tahoe Mill Crossing Polo Run
Statement of Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma
Operations Adjustments Adjustments Adjustments Adjustments Adjustments
-------------------------------------------------------------------------------------
<S> <C>
Date of Acquisitions - 1/31/97 1/31/97 1/31/97 2/28/97 03/31/97
Rental income $1,155,766 $99,879 $266,385 $100,023 $151,389 $326,137
Expenses
Utilities 98,538 7,722 25,425 12,431 24,712 32,231
Repairs and maintenance 59,600 14,519 31,593 29,313 36,083 64,401
Taxes and insurance 106,098 12,720 36,546 12,099 19,230 40,508
Property management fee 60,663 - - - -
Advertising 33,475 2,547 4,429 2,475 4,272 6,338
Other operating expenses 92,970 - - - - -
General and administrative 77,502 - - - - -
Depreciation of real estate 137,689 - - - - -
Amortization 8,476 - - - - -
Other 9,434 7,642 13,288 7,424 12,815 19,013
------------------------------------------------------------------------------------
684,445 45,150 111,281 63,742 97,112 162,491
Income before interest income 471,321 54,729 155,104 36,281 54,277 163,646
Interest income 84,934 - - - - -
-------------------------------------------------------------------------------------
Net income 556,255 54,729 155,104 36,281 54,277 163,646
=====================================================================================
Net income per share 0.16
==========
Weighted average number of shares outstanding 3,403,759
==========
</TABLE>
<TABLE>
<CAPTION>
Wildwood Toscana 1997
Pro Forma Pro Forma Pro Forma Total
Adjustments Adjustments Adjustments Pro Forma
---------------------------------------------------------------
<S> <C>
Date of Acquisitions 03/31/97 03/31/97 - -
Rental income $202,389 $270,812 - $2,572,780
Expenses
Utilities 19,734 21,222 - 242,015
Repairs and maintenance 30,868 29,279 - 295,656
Taxes and insurance 25,216 35,674 - 288,091
Property management fee - - 78,179 (A) 138,842
Advertising 6,877 8,055 - 68,468
Other operating expenses - - - 92,970
General and administrative - - 18,011 (B) 95,513
Depreciation of real estate - - 218,101 (C) 355,790
Amortization - - - 8,476
Other 20,632 24,166 - 114,414
---------------------------------------------------------------
103,327 118,396 314,291 1,700,235
Income before interest income 99,062 152,416 (314,291) 872,545
Interest income - - - 84,934
---------------------------------------------------------------
Net income 99,062 152,416 (314,291) 957,479
===============================================================
Net income per share $0.13
============
Weighted average number of shares outstanding 6,970,645
============
</TABLE>
The pro forma information reflects adjustments for the actual rental income and
rental expenses for the properties for the period in 1997 prior to their
acquisition by the Company. Net income has been adjusted as follows: (A)
property management and advisory expenses have been adjusted based on the
Company's contractual arrangements of 5% of revenues from rental income plus
reimbursement of certain expenses estimated to be $2.50 per unit; (B) advisory
expenses have been adjusted based on the Company's contractual arrangement of
.25% of gross proceeds from sales of common stock; (C) depreciation has been
adjusted based on the Company's allocation of purchase price to buildings over
an estimated useful life of 27.5 years.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report on Form 8-K/A to be signed on its behalf
by the undersigned hereunto duly authorized.
Apple Residential Income Trust, Inc.
Date: June __, 1997 By: /s/ Glade M. Knight
-------------------
Glade M. Knight
President of
Apple Residential Income
Trust, Inc.
<PAGE>
EXHIBIT INDEX
Apple Residential Income Trust, Inc.
Form 8-K/A for Form 8-K dated March 31, 1997
Exhibit Number Exhibit Page Number
23.1 Consent of Independent Auditors
23.2 Consent of Independent Auditors
23.3 Consent of Independent Auditors
Exhibit 23.1
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
PHONE: (804) 346-2626
FAX: (804) 346-9311
Consent of Independent Auditors'
The Board of Directors
Apple Residential Income Trust, Inc.
Richmond, Virginia
We consent to the use of our report dated May 21, 1997 with respect to
the statement of income and direct operating expenses exclusive of items not
comparable to the proposed future operations of the property Polo Run Apartments
for the twelve month period ended February 28, 1997, for inclusion in a form 8K
filing with the Securities and Exchange Commission by Apple Residential Income
Trust, Inc.
/s/ L.P. MARTIN & CO., P.C.
Richmond, Virginia
June 9, 1997
Exhibit 23.2
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
PHONE: (804) 346-2626
FAX: (804) 346-9311
Consent of Independent Auditors'
The Board of Directors
Apple Residential Income Trust, Inc.
Richmond, Virginia
We consent to the use of our report dated June 4, 1997 with respect to
the statement of income and direct operating expenses exclusive of items not
comparable to the proposed future operations of the property Wildwood Apartments
for the twelve month period ended February 28, 1997, for inclusion in a form 8K
filing with the Securities and Exchange Commission by Apple Residential Income
Trust, Inc.
/s/ L.P. MARTIN & CO., P.C.
Richmond, Virginia
June 9, 1997
Exhibit 23.3
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
PHONE: (804) 346-2626
FAX: (804) 346-9311
Consent of Independent Auditors'
The Board of Directors
Apple Residential Income Trust, Inc.
Richmond, Virginia
We consent to the use of our report dated June 4, 1997 with respect to
the statement of income and direct operating expenses exclusive of items not
comparable to the proposed future operations of the property Toscana Apartments
for the twelve month period ended February 28, 1997, for inclusion in a form 8K
filing with the Securities and Exchange Commission by Apple Residential Income
Trust, Inc.
/s/ L.P. MARTIN & CO., P.C.
Richmond, Virginia
June 9, 1997
