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: October 28, 1998
APPLE RESIDENTIAL INCOME TRUST, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 0-23983 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
(Burney Oaks Apartments)
Historical Statement of Income
and Direct Operating Expenses
(Burney Oaks Apartments)
Note to Historical Statement of Income
and Direct Operating Expenses
(Burney Oaks Apartments)
b. Independent Auditors' Report
(Brandywine Park Apartments)
Historical Statement of Income
and Direct Operating Expenses
(Brandywine Park Apartments)
Note to Historical Statement of Income
and Direct Operating Expenses
(Brandywine Park Apartments)
c. Pro Forma Balance Sheet as of
September 30, 1998 (unaudited)
Pro Forma Statement of Operations for
the Nine Months ended September 30, 1998
(unaudited)
Pro Forma Statement of Operations
for the year ended December 31, 1997
(unaudited)
-2-
<PAGE>
d. Exhibit
23.1 Consent of Independent Auditors
(Burney Oaks Apartments)
23.2 Consent of Independent Auditors
(Brandywine Park Apartments)
-3-
<PAGE>
The Company hereby amends Items 7.a., 7.b., 7.c., and 7.d. of its Current
Report on Form 8-K dated October 28, 1998 as follows:
-4-
<PAGE>
ITEM 7.a.
-5-
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
4132 INNSLAKE DRIVE
GLEN ALLEN, VIRGINIA 23060
PHONE: (804) 346-2626
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 Burney Oaks Apartments located in Arlington, Texas for the twelve
month period ended September 30, 1998. This statement is the responsibility of
the management of Burney Oaks 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 2 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 Burney Oaks
Apartments (as defined above) for the twelve month period ended September 30,
1998, in conformity with generally accepted accounting principles.
/s/ L.P. MARTIN & CO., P.C.
Richmond, Virginia
December 22, 1998
<PAGE>
BURNEY OAKS 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 SEPTEMBER 30, 1998
INCOME
Rental and Other Income $1,571,707
----------
DIRECT OPERATING EXPENSES
Administrative and Other 191,681
Insurance 26,867
Repairs and Maintenance 226,560
Taxes, Property 189,659
Utilities 148,328
---------
TOTAL DIRECT OPERATING EXPENSES 783,095
---------
Operating income exclusive of items not
comparable to the proposed future operations
of the property $ 788,612
=========
See accompanying notes to the financial statement.
<PAGE>
BURNEY OAKS APARTMENTS
NOTES 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 SEPTEMBER 30, 1998
NOTE 1 - ORGANIZATION
Burney Oaks Apartments is a 240 unit garden style apartment complex located on
approximately 9.60 acres in Arlington, Texas. The assets comprising the property
were owned by JMB Institutional Apartment Limited Partnership - II, an entity
unaffiliated with Apple Residential Income Trust, Inc., during the financial
statement period. Apple Residential Income Trust, Inc. purchased the property
October 28, 1998.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue and Expense Recognition - The accompanying statement of rental
operations has been prepared using the accrual method of accounting. 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, management fees and
entity expenses.
Estimates - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Repairs and Maintenance - Repairs and maintenance costs are expensed as
incurred, while significant improvements, renovations and replacements are
capitalized.
Advertising - Advertising costs are expensed in the period incurred.
<PAGE>
ITEM 7.b.
-6-
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
4132 INNSLAKE DRIVE
GLEN ALLEN, VIRGINIA 23060
PHONE: (804) 346-2626
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 Brandywine Park Apartments located in Richardson, Texas for the
twelve month period ended September 30, 1998. This statement is the
responsibility of the management of Brandywine Park 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 2 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 Brandywine Park
Apartments (as defined above) for the twelve month period ended September 30,
1998, in conformity with generally accepted accounting principles.
/s/ L.P. MARTIN & CO., P.C.
Richmond, Virginia
November 23, 1998
<PAGE>
BRANDYWINE PARK 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 SEPTEMBER 30, 1998
INCOME
Rental and Other Income $1,460,686
---------
DIRECT OPERATING EXPENSES
Administrative and Other 112,480
Insurance 22,146
Repairs and Maintenance 237,747
Taxes, Property 153,740
Utilities 165,930
---------
TOTAL DIRECT OPERATING EXPENSES 692,043
---------
Operating income exclusive of items not
comparable to the proposed future operations
of the property $ 768,643
=========
See accompanying notes to the financial statement.
<PAGE>
BRANDYWINE PARK APARTMENTS
NOTES 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 SEPTEMBER 30, 1998
NOTE 1 - ORGANIZATION
Brandywine Park Apartments is a 196 unit garden style apartment complex located
on approximately 11.0 acres in Richardson, Texas. The assets comprising the
property were owned by Abrams One Properties Limited Partnership, an entity
unaffiliated with Apple Residential Income Trust, Inc., during the financial
statement period. Apple Residential Income Trust, Inc.
purchased the property on October 29, 1998.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue and Expense Recognition - The accompanying statement of rental
operations has been prepared using the accrual method of accounting. 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.
Estimates - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Repairs and Maintenance - Repairs and maintenance costs are expensed as
incurred, while significant improvements, renovations and replacements are
capitalized.
Advertising - Advertising costs are expensed in the period incurred.
<PAGE>
ITEM 7.c.
-8-
<PAGE>
Pro Forma Consolidated Balance Sheet as of September 30, 1998 (unaudited)
The accompanying Unaudited Pro Forma Consolidated Balance Sheet as of September
30, 1998 is presented as if the Company had owned the properties included in the
table below as of September 30 1998. In the opinion of management all
adjustments necessary to reflect the effects of the Offering have been made.
The Unaudited Pro Forma Consolidated 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 September 30, 1998, nor does it
purport to represent the future financial position of the Company. This
Unaudited Pro Forma Consolidated Balance Sheet should be read in conjunction
with, and is qualified in its entirety by, the Company's respective historical
financial statements and notes thereto.
<TABLE>
<CAPTION>
Brandywine Burney
Historical Park Oaks
Balance Pro Forma Pro Forma Total
Sheet Adjustments Adjustments Pro Forma
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Date of acquisition 10/29/98 10/28/98
ASSETS
Investment in rental property
Land $ 35,291,836 $ 1,982,880 $ 1,043,460 $ 38,318,176
Building and improvements 169,230,344 6,279,120 8,442,540 183,952,004
Furniture and fixtures 2,139,825 - - 2,139,825
-----------------------------------------------------------------
206,662,005 8,262,000 9,486,000 224,410,005
Less accumulated depreciation (5,578,003) - - (5,578,003)
-----------------------------------------------------------------
201,084,002 8,262,000 9,486,000 218,832,002
Cash and cash equivalents 47,090,703 (8,262,000) (9,486,000) 29,342,703
Prepaid expenses 142,156 - - 142,156
Other assets 1,668,108 - - 1,668,108
-----------------------------------------------------------------
48,900,967 (8,262,000) (9,486,000) 31,152,967
-----------------------------------------------------------------
Total Assets $ 249,984,969 $ - $ - $ 249,984,969
=================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgage notes payable $ 25,323,184 - - $ 25,323,184
Accounts payable 763,854 - - 763,854
Accrued expenses 4,334,180 - - 4,334,180
Rents received in advance 46,966 - - 46,966
Tenant security deposits 838,286 - - 838,286
-----------------------------------------------------------------
31,306,470 - - 31,306,470
Shareholders' equity
Common stock 219,628,535 - - 219,628,535
Class B convertible stock 20,000 - - 20,000
Distributions greater than net income (970,036) - - (970,036)
-----------------------------------------------------------------
218,678,499 - - 218,678,499
-----------------------------------------------------------------
Total Liabilities and Shareholders' Equity $ 249,984,969 $ - $ - $ 249,984,969
=================================================================
</TABLE>
Notes to Pro Forma Balance Sheet
Pro Forma adjustments represent the purchase price of the related property ,
including the 2% acquisition fee to Apple Residential Management Group, Inc.
allocated between land and building. Adjustments to cash reflect the use of cash
on hand to purchase properties.
<PAGE>
Pro Forma Consolidated Statement of Operations for the nine month period ended
September 30, 1998 (unaudited)
The Unaudited Pro Forma Consolidated Statement of Operations for the nine month
period ended September 30, 1998 is presented as if the 15 property acquisitions
during 1998 had occurred on January 1, 1998. The Unaudited Pro Forma
Consolidated Statement of Operations assumes the Company qualifying as a REIT,
distributing at least 95% of its taxable income, and, therefore, incurring no
federal income tax liability for the period presented. In the opinion of
management, all adjustments necessary to reflect the effects of these
transactions have been made.
The Unaudited Pro Forma Consolidated 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 nine month period ended
September 30, 1998 if the acquisitions 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 Consolidated Statement of
Operations should be read in conjunction with, and is qualified in its entirety
by, the Company's respective historical financial statements and notes thereto.
<TABLE>
<CAPTION>
Copper Bitter Summer
Historical Main Park Timberglen Ridge Creek Tree
Statement of Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma
Operations Adjustments Adjustments Adjustments Adjustments Adjustments
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Date of Acquisition - 2/4/98 2/13/98 3/31/98 5/8/98 6/1/98
Rental income $20,256,606 $ 122,458 $ 162,912 $ 228,612 $ 876,661 $ 505,033
Rental expenses:
Property and maintenance 5,555,743 44,674 39,814 147,405 308,738 202,428
Taxes and insurance 2,832,675 18,797 21,513 29,927 98,600 63,114
Property management 1,109,495 - - - - -
General and administrative 579,015 - - - - -
Amortization 28,544 - - - - -
Depreciation of rental property 3,680,000 - - - - -
-----------------------------------------------------------------------------
Total expenses 13,785,472 63,471 61,327 177,332 407,338 265,542
Income before interest income (expense) 6,471,134 58,987 101,585 51,280 469,323 239,491
Interest income 1,188,355 - - - - -
Interest expense (338,297) - - - - -
-----------------------------------------------------------------------------
Net income $7,321,192 $58,987 $101,585 $51,280 $469,323 $239,491
Basic and diluted earnings per common share $0.41
Wgt. avg. number of common shares outstanding 17,823,314
</TABLE>
<TABLE>
<CAPTION>
Park Hayden's Pace's Pepper
Village Cottonwood Crossing Point Square Newport
Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma
Adjustments Adjustments Adjustments Adjustments Adjustments Adjustments
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Date of Acquisition 7/1/98 7/9/98 7/24/98 7/17/98 7/17/98 7/24/98
Rental income $ 641,049 $ 565,147 $ 536,970 $ 1,167,372 $ 534,027 $ 686,911
Rental expenses:
Property and maintenance 224,466 216,861 188,406 349,407 156,111 235,111
Taxes and insurance 79,850 74,067 61,559 143,119 75,941 109,875
Property management - - - - - -
General and administrative - - - - - -
Amortization - - - - - -
Depreciation of rental property - - - - - -
---------------------------------------------------------------------------------
Total expenses 304,316 290,928 249,965 492,526 232,052 344,986
Income before interest income (expense) 336,733 274,219 287,005 674,846 301,975 341,925
Interest income - - - - - -
Interest expense - - - - - -
---------------------------------------------------------------------------------
Net income $336,733 $274,219 $287,005 $674,846 $301,975 $341,925
Basic and diluted earnings per common share
Wgt. avg. number of common shares outstanding
</TABLE>
<TABLE>
<CAPTION>
Emerald Brandywine Burney
Oaks Estrada Park Oaks
Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma Total
Adjustments Adjustments Adjustments Adjustments Adjustments Pro Forma
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Date of Acquisition 7/24/98 7/27/98 10/29/98 10/28/98 - -
Rental income $ 1,046,462 $ 962,727 $ 1,095,515 $ 1,178,780 - $30,567,242
Rental expenses:
Property and maintenance 284,868 281,613 387,118 424,927 - 9,047,690
Taxes and insurance 133,916 124,830 131,915 162,395 - 4,162,093
Property management - - - - $ 565,232 (A) 1,674,727
General and administrative - - - - 109,492 (B) 688,507
Amortization - - - - - 28,544
Depreciation of rental property - - - - 1,730,984 (C) 5,410,984
-------------------------------------------------------------------------------------
Total expenses 418,784 406,443 519,033 587,322 2,405,708 21,012,545
Income before interest income (expense) 627,678 556,284 576,482 591,458 (2,405,708) 9,554,697
Interest income - - - - (1,188,355)(F) -
Interest expense - - - - (1,069,313)(D) (1,407,610)
------------------------------------------------------------------- --------------
Net income $627,678 $556,284 $576,482 $591,458 ($4,663,376) $8,147,087
Basic and diluted earnings per common share $0.38
============
Wgt. avg. number of common shares outstanding 3,425,795 (E) 21,249,109
============= ============
</TABLE>
(A) Represents the property management fees of 5% of rental income and
processing costs equal to $2.50 per apartment per month charged by the
external management company for the period not owned by the Company.
(B) Represents the advisory fee of .25% of accumulated capital contributions
under the "best efforts" offering for the period of time not owned by the
Company.
(C) Represents the depreciation expense of the properties acquired based on the
purchase price, excluding amounts allocated to land, for the period of time
not owned by the Company. The weighted average life of the property
depreciated was 27.5 years.
(D) Represents the interest expense for 5 of the 15 properties for the period in
which the properties were not owned for the nine months period ended
September 30, 1998, interest was computed based on interest rates on the
properties debt that was assumed at acquisition.
(E) Represents additional common shares assuming the properties were acquired on
January 1, 1998 with the net proceeds from the "best efforts" offering of
$10 per share (net $8.70 per share).
(F) Represents reduction of interest income associated with $23.7 million of
cash used to purchase properties at an interest rate of 5%.
<PAGE>
Pro Forma Consolidated Statement of Operations for the year ended December 31,
1997 (unaudited)
The Unaudited Pro Forma Consolidated Statement of Operations for the year ended
December 31, 1997 is presented as if the 12 property acquisitions during 1997
and the 15 property acquisitions during 1998 had occurred on January 1, 1997.
The Unaudited Pro Forma Consolidated Statement of Operations assumes the Company
qualifying as a REIT, distributing at least 95% of its taxable income, and,
therefore, incurring no federal income tax liability for the period presented.
In the opinion of management, all adjustments necessary to reflect the effects
of these transactions have been made.
The Unaudited Pro Forma Consolidated 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, 1997 if
the acquisitions 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 Consolidated Statement of Operations should be read in
conjunction with, and is qualified in its entirety by, the Company's respective
historical financial statements and notes thereto.
<TABLE>
<CAPTION>
Historical 1997 Pro Forma Main Park
Statement of Acquisitions Pro Forma Before 1998 Pro Forma
Operations Adjustments Adjustments Acquisitions Adjustments
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Date of Acquisition - - - - 2/4/98
Rental income $12,005,968 $ 5,392,558 - $17,398,526 $ 1,469,496
Rental expenses:
Property and maintenance 3,571,484 1,982,189 - 5,553,673 536,090
Taxes and insurance 1,765,741 706,939 - 2,472,680 225,564
Property management 656,267 - $ 295,813 (A) 952,080 -
General and administrative 351,081 - 67,262 (B) 418,343 -
Amortization 28,490 - - 28,490 -
Depreciation of rental property 1,898,003 - 792,074 (C) 2,690,077 -
-------------------------------------------------------------------------------
Total expenses 8,271,066 2,689,128 1,155,149 12,115,343 761,654
Income before interest income (expense) 3,734,902 2,703,430 (1,155,149) 5,283,183 707,842
Interest income 222,676 - - 222,676 -
Interest expense (458,384) - - (458,384) -
-------------------------------------------- ------------------------------
Net income $3,499,194 $ 2,703,430 ($1,155,149) $5,047,475 $707,842
Basic and diluted earnings per common share $0.54 $0.53
Wgt. avg. number of common shares outstanding 6,493,114 3,106,405 (E) 9,599,519
============== ==============
</TABLE>
<TABLE>
<CAPTION>
Copper Bitter Summer Park
Timberglen Ridge Creek Tree Village Cottonwood
Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma
Adjustments Adjustments Adjustments Adjustments Adjustments Adjustments
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Date of Acquisition 2/13/98 3/31/98 5/8/98 6/1/98 7/1/98 7/9/98
Rental income $ 1,954,938 $ 914,447 $ 2,629,983 $ 1,212,080 $ 1,282,097 $ 1,130,293
Rental expenses:
Property and maintenance 477,771 589,618 926,213 485,827 448,932 433,721
Taxes and insurance 258,159 119,708 295,801 151,473 159,700 148,133
Property management - - - - - -
General and administrative - - - - - -
Amortization - - - - - -
Depreciation of rental property - - - - - -
--------------------------------------------------------------------------------------
Total expenses 735,930 709,326 1,222,014 637,300 608,632 581,854
Income before interest income (expense) 1,219,008 205,121 1,407,969 574,780 673,465 548,439
Interest income - - - - - -
Interest expense - - - - - -
--------------------------------------------------------------------------------------
Net income $1,219,008 $205,121 $1,407,969 $574,780 $673,465 $548,439
Basic and diluted earnings per common share
Wgt. avg. number of common shares outstanding
</TABLE>
<TABLE>
<CAPTION>
Hayden's Pace's Pepper Emerald
Crossing Point Square Newport Oaks
Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma
Adjustments Adjustments Adjustments Adjustments Adjustments
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Date of Acquisition 7/24/98 7/17/98 7/17/98 7/24/98 7/24/98
Rental income $ 920,520 $ 2,001,209 $ 915,474 $ 1,177,562 $ 1,793,934
Rental expenses:
Property and maintenance 322,981 598,984 267,618 403,047 488,345
Taxes and insurance 105,530 245,347 130,185 188,357 229,570
Property management - - - - -
General and administrative - - - - -
Amortization - - - - -
Depreciation of rental property - - - - -
---------------------------------------------------------------------------
Total expenses 428,511 844,331 397,803 591,404 717,915
Income before interest income (expense) 492,009 1,156,878 517,671 586,158 1,076,019
Interest income - - - - -
Interest expense - - - - -
---------------------------------------------------------------------------
Net income $492,009 $1,156,878 $517,671 $586,158 $1,076,019
Basic and diluted earnings per common share
Wgt. avg. number of common shares outstanding
</TABLE>
<TABLE>
<CAPTION>
Brandywine Burney
Estrada Park Oaks
Pro Forma Pro Forma Pro Forma Pro Forma Total
Adjustments Adjustments Adjustments Adjustments Pro Forma
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Date of Acquisition 7/27/98 10/29/98 10/28/98 - -
Rental income $ 1,650,389 $ 1,460,686 $ 1,571,707 - $39,483,341
Rental expenses:
Property and maintenance 482,765 516,157 566,569 - 13,098,311
Taxes and insurance 214,029 175,886 216,526 - 5,336,648
Property management - - - $ 1,211,821 (A) 2,163,901
General and administrative - - - 248,870 (B) 667,213
Amortization - - - - 28,490
Depreciation of rental property - - - 3,690,513 (C) 6,380,590
---------------------------------------------------------------------------
Total expenses 696,794 692,043 783,095 5,151,204 27,675,153
Income before interest income (expense) 953,595 768,643 788,612 (5,151,204) 11,808,188
Interest income - - - - 222,676
Interest expense - - - (1,833,108)(D) (2,291,492)
---------------------------------------------------------- -------------
Net income $953,595 $768,643 $788,612 ($6,984,312) $9,739,373
Basic and diluted earnings per common share $0.46
Wgt. avg. number of common shares outstanding 11,442,287 (E) 21,041,806
==============
</TABLE>
(A) Represents the property management fees of 5% of rental income and
processing costs equal to $2.50 per apartment per month charged by the
external management company for the period not owned by the Company.
(B) Represents the advisory fee of .25% of accumulated capital contributions
under the "best efforts" offering for the period of time not owned by the
Company.
(C) Represents the depreciation expense of the properties acquired based on the
purchase price, excluding amounts allocated to land, for the period of time
not owned by the Company. The weighted average life of the property
depreciated was 27.5 years.
(D) Represents the interest expense for 5 of the 15 properties for the period in
which the properties were not owned for the nine months period ended
September 30, 1998, interest was computed based on interest rates on the
properties debt that was assumed at acquisition.
(E) Represents additional common shares assuming the properties were acquired on
January 1, 1997 with the net proceeds from the "best efforts" offering of $9
per share (net $7.83 per share) for the first $15 million and $10 per share
(net $8.70 per share) above $15 million.
<PAGE>
Pro Forma Consolidated Statement of Operations for the year ended December 31,
1997 (unaudited)
The following schedule provides detail of 1997 acquisitions by property included
in the Pro Forma Consolidated Statement of Operations for the year ended
December 31, 1997.
<TABLE>
<CAPTION>
Brookfield Eagle Crest Aspen Hills Mill Crossing Polo Run Wildwood
Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma
Adjustments Adjustments Adjustments Adjustments Adjustments Adjustments
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Date of Acquisitions 1/31/97 1/31/97 1/31/97 2/28/97 03/31/97 03/31/97
Rental income $99,879 $266,385 $100,023 $151,389 $326,137 $202,389
Expenses
Property and maintenance 32,430 74,735 51,643 77,882 121,983 78,111
Taxes and insurance 12,720 36,546 12,099 19,230 40,508 25,216
Property management - - - - - -
General and administrative - - - - - -
Depreciation of real estate - - - - - -
Amortization - - - - - -
------------------------------------------------------------------------------------
45,150 111,281 63,742 97,112 162,491 103,327
Income before interest income 54,729 155,104 36,281 54,277 163,646 99,062
Interest income - - - - - -
Interest expense - - - - - -
------------------------------------------------------------------------------------
Net income $54,729 $155,104 $36,281 $54,277 $163,646 $99,062
====================================================================================
</TABLE>
<TABLE>
<CAPTION>
Copper
Toscana The Arbors Paces Cove Chaparosa Riverhill Crossing
Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma Total
Adjustments Adjustments Adjustments Adjustments Adjustments Adjustments Pro Forma
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Date of Acquisitions 03/31/97 4/25/97 6/30/97 8/6/97 8/6/97 11/25/97
Rental income $270,812 $460,338 $916,348 $801,713 $892,295 $904,850 $5,392,558
Expenses
Property and maintenance 82,722 102,132 314,521 286,943 338,906 420,181 1,982,189
Taxes and insurance 35,674 60,729 128,306 97,242 124,028 114,641 706,939
Property management - - - - - - 0
General and administrative - - - - - - 0
Depreciation of real estate - - - - - - 0
Amortization - - - - - - 0
--------------------------------------------------------------------------------------------
118,396 162,861 442,827 384,185 462,934 534,822 2,689,128
Income before interest income 152,416 297,477 473,521 417,528 429,361 370,028 2,703,430
Interest income - - - - - - 0
Interest expense - - - - - - 0
--------------------------------------------------------------------------------------------
Net income $152,416 $297,477 $473,521 $417,528 $429,361 $370,028 $2,703,430
============================================================================================
</TABLE>
<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: January 8, 1999 By:/s/ Glade M. Knight
---------------------------------------
Glade M. Knight
President of
Apple Residential Realty Income
Trust, Inc.
<PAGE>
ITEM 7.d.
<PAGE>
EXHIBIT INDEX
Apple Residential Income Trust, Inc.
Form 8-K/A to Form 8-K dated October 28, 1998
Exhibit Number Exhibit Page Number
- -------------- ------- -----------
23.1 Consent of Independent Auditors
(Burney Oaks Apartments)
23.2 Consent of Independent Auditors
(Brandywine Park Apartments)
[L.P. MARTIN & COMPANY LETTERHEAD]
4132 INNSLAKE DRIVE
GLEN ALLEN, VIRGINIA 23060
PHONE: (804) 346-2626
Consent of Independent Auditors'
The Board of Directors
Apple Residential Income Trust, Inc.
Richmond, Virginia
We consent to the use of our report dated December 22, 1998 with respect
to the statement of income and direct operating expenses exclusive of items not
comparable to the proposed future operations of the property Burney Oaks
Apartments for the twelve month period ended September 30, 1998, 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
December 22, 1998
[L.P. MARTIN & COMPANY LETTERHEAD]
4132 INNSLAKE DRIVE
GLEN ALLEN, VIRGINIA 23060
PHONE: (804) 346-2626
Consent of Independent Auditors'
The Board of Directors
Apple Residential Income Trust, Inc.
Richmond, Virginia
We consent to the use of our report dated November 23, 1998 with respect
to the statement of income and direct operating expenses exclusive of items not
comparable to the proposed future operations of the property Brandywine Park
Apartments for the twelve month period ended September 30, 1998, 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
November 23, 1998
