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: February 21, 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
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APPLE RESIDENTIAL INCOME TRUST, INC.
FORM 8-K/A
Index
Page No.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibit
a. Independent Auditors' Report
(Mill Crossing Apartments)
Historical Statement of Income and
Direct Operating Expenses
(Mill Crossing Apartments)
Note to Historical Statement of
Income and Direct Operating
Expenses (Mill Crossing Apartments)
b. Pro Forma Balance Sheet as of
December 31, 1996 (unaudited)
Pro Forma Statement of Operations
for the Year ended December 31, 1996
(unaudited)
c. Exhibit
23.1 Consent of Independent Auditors
-2-
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The Company hereby amends and restates Item 7.a. and 7.b. of its Current
Report on Form 8-K dated February 21, 1997 as follows:
-3-
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ITEM 7.A.
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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 Mill Crossing Apartments located in Arlington, Texas
for the twelve month period ended January 31, 1997. This statement is the
responsibility of the management of Mill Crossing 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 Mill Crossing
Apartments (as defined above) for the twelve month period ended January 31,
1997, in conformity with generally accepted accounting principles.
/s/ L. P. Martin & Co., P.C.
Richmond, Virginia
April 29, 1997
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MILL CROSSING 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 JANUARY 31, 1997
INCOME
Rental and Other Income $ 908,336
----------
DIRECT OPERATING EXPENSES
Administrative and Other 102,522
Insurance 23,714
Repairs and Maintenance 216,500
Taxes, Property 91,663
Utilities 148,270
----------
TOTAL DIRECT OPERATING EXPENSES 582,669
----------
Operating income exclusive of items not
comparable to the proposed future operations
of the property $ 325,667
==========
See accompanying note to the financial statement.
<PAGE>
MILL CROSSING 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 JANUARY 31, 1997
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
Mill Crossing Apartments is a 184 unit garden style apartment complex located on
8 acres in Arlington, Texas. Living space totals 127,168 square feet.
During the financial statement period, the assets comprising the property were
owned by two separate entities, neither of which was affiliated with Apple
Residential Income Trust, Inc. Apple Residential Income Trust, Inc. purchased
the property in February 1997.
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, amortization, legal fees
and management fees.
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ITEM 7.B.
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Pro Forma Balance Sheet as of December 31, 1996 (unaudited)
The accompanying Unaudited Pro Forma Balance Sheet as of December 31, 1996 is
presented as if the Company had owned the following properties held on December
31, 1996. In the opinion of management, all adjustments necessary to reflect the
effects of the Offering have been made.
The Unaudited Pro Forma Balance Sheet is presented for comparative purposes
only, and is not necessarily indicative of what the actual financial position of
the Company would have been at December 31, 1996, nor does it purport to
represent the future financial position of the Company. This Unaudited Pro Forma
Balance Sheet should be read in conjunction with, and is qualified in its
entirety by, the respective historical financial statements and notes thereto of
the Company. The Pro Forma column assumes the Company used the proceeds from its
offerings to acquire certain properties.
<TABLE>
<CAPTION>
Mill
Historical Brookfield Eagle Crest Tahoe Crossing
Balance Pro Forma Pro Forma Pro Forma Pro Forma Total
Sheet Adjustments Adjustments Adjustments Adjustments Pro Forma
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<S> <C>
ASSETS
Investment in rental property
Land - $1,169,208 $3,032,970 $1,102,830 $772,501 $6,077,509
Building - 4,398,447 12,930,030 4,701,541 3,771,620 25,801,638
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- 5,567,655 15,963,000 5,804,371 4,544,121 31,879,147
Less accumulated depreciation - - - - - -
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- 5,567,655 15,963,000 5,804,371 4,544,121 31,879,147
Cash and cash equivalents $100 - - - - 100
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Total Assets $100 $5,567,655 $15,963,000 $5,804,371 $4,544,121 $31,879,247
=====================================================================================
SHAREHOLDERS' EQUITY
Common stock, no par value $100 $5,567,655 $15,963,000 $5,804,371 $4,544,121 $31,879,247
Class B Convertible Stock, no par value 20,000 - - - - 20,000
Receivable from principal shareholder (20,000) - - - - (20,000)
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Total Shareholders' equity $100 $5,567,655 $15,963,000 $5,804,371 $4,544,121 $31,879,247
=====================================================================================
</TABLE>
Notes to Pro Forma Balance Sheet
Pro Forma adjustments represents the purchase price of the related property,
including the 2% acquisition fee to Apple Realty Group, Inc. allocated between
land and building. Adjustments to common stock reflect the proceeds from sales
of common stock from the Company's continuous offering net of all offering
costs.
<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 (c) 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 Balance Sheet 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>
Mill
Historical Brookfield Eagle Crest Tahoe Crossing 1996
Statement of Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma Total
Operations Adjustments Adjustments Adjustments Adjustments Adjustments Pro Forma
------------------------------------------------------------------------------------------
<S> <C>
Rental income - $1,198,543 $3,196,618 $1,200,270 $908,336 - $6,503,767
Expenses
Utilities - 92,664 305,101 149,166 148,270 - 695,201
Repairs and maintenance - 174,233 379,120 351,750 216,500 - 1,121,603
Taxes and insurance - 152,636 438,546 145,184 115,377 - 851,743
Property management fee - - - - - 359,388 (A) 359,388
Advertising - 30,567 53,153 29,695 25,631 - 139,046
General and administrative - - - - - 79,698 (B) 79,698
Depreciation of real estate - - - - - 938,241 (C) 938,241
Other - 91,702 159,460 89,086 76,891 - 417,139
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- 541,802 1,335,380 764,881 582,669 1,377,328 4,602,060
Net income - $656,741 $1,861,238 $435,389 $325,667 ($1,377,328) $1,901,707
==========================================================================================
Net income per share - $0.50
============ ============
Weighted average number of
shares outstanding - 3,830,936
============ ============
</TABLE>
The pro forma information reflects adjustments for the actual rental income and
rental expenses for the properties for the period in 1996 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 monthly 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: May 8, 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 February 21, 1997
Exhibit Number Exhibit Page Number
23.1 Consent of Independent Auditors
Exhibit 23.1
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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 3, 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 Mill Crossing
Apartments for the twelve month period ended January 31, 1997, for inclusion in
a form 8K filing with the Securities and Exchange Commission by Apple
Residential Income Trust, Inc.
Richmond, Virginia /s/ L. P. Martin & Co., P.C.
May 3, 1997
