SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March 8, 1999
Gables Realty Limited Partnership
(Exact name of Registrant as specified in its charter)
Delaware 000-22683 58-2077966
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
2859 Paces Ferry Road, Suite 1450
Atlanta, Georgia 30339
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
770-436-4600
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ITEM 5. OTHER EVENTS
This Form 8-K is filed in connection with Gables Residential Trust's and
Gables Realty Limited Partnership's Registration Statement on Form S-3
(Registration No. 333-68359) filed with the Securities and Exchange Commission
on December 3, 1998, as amended, and supplements unaudited pro forma
consolidated financial information filed under cover of Form 8-K dated April 1,
1998, as amended, in connection with the April 1, 1998 acquisition of the
properties and operations of Trammell Crow Residential South Florida Group
("TCR/SF") by Gables Realty Limited Partnership (the "Operating Partnership").
The unaudited pro forma consolidated statement of operations of the
Operating Partnership for the nine months ended September 30, 1998 giving effect
to the TCR/SF acquisition set forth in Item 7(b) of this Form 8-K expands on,
but is otherwise consistant with, the supplementary pro forma results of
operations giving effect to the TCR/SF acquisition for the nine months ended
September 30, 1998 which the Operating Partnership previously disclosed in its
Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1998.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired:
Not applicable.
(b) Pro Forma Financial Information:
Pro forma financial information for the Registrant is filed with this report as
Attachment A.
(c) Exhibits:
Not applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 8, 1999 GABLES REALTY LIMITED PARTNERSHIP
By: Gables GP, Inc., its general partner
/s/ Marvin R. Banks, Jr.
---------------------------
By: Marvin R. Banks, Jr.
Chief Financial Officer
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Attachment A
GABLES REALTY LIMITED PARTNERSHIP
PREFACE TO UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL INFORMATION
BASIS OF PRESENTATION
- ---------------------
The following unaudited pro forma consolidated statement of operations is
presented as if the Operating Partnership acquired the properties and operations
of Trammell Crow Residential South Florida Group (TCR/SF) on January 1, 1998 and
includes the historical operating results of the properties and residential
construction and development and third-party management activities acquired. The
acquisition has been accounted for under the purchase method of accounting in
accordance with Accounting Principles Board Opinion No. 16. Accordingly, assets
acquired and liabilities assumed have been reflected herein at their estimated
fair values which may be subject to further modification based upon the final
determination of the acquired properties' fair values and the final
determination of actual closing costs associated with the transaction.
Management believes that its final allocation of the purchase price will not
differ materially from the purchase price allocation included herein. In
management's opinion, all material adjustments necessary to present fairly the
effects of the acquisition have been made.
The unaudited pro forma consolidated statement of operations should be read in
conjunction with the consolidated financial statements and accompanying notes
thereto of the Operating Partnership included in its Annual Report on Form 10-K
for the year ended December 31, 1997 and in its Quarterly Report on Form 10-Q
for the nine months ended September 30, 1998.
The unaudited pro forma consolidated statement of operations is not necessarily
indicative of what the actual results of operations of the Operating Partnership
would have been assuming the Operating Partnership had consummated the
acquisition as of the beginning of the period presented, nor does it purport to
represent the results of operations for future periods.
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GABLES REALTY LIMITED PARTNERSHIP
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(Amounts in Thousands, Except Per Unit Amounts)
<TABLE>
<CAPTION>
Operating Pro Forma Operating
Partnership TCR/SF Acquisition Partnership
Historical(A) Historical(B) Adjustments Pro Forma
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Rental revenues .................................................... $ 144,526 $ 8,845 $ -- $ 153,371
Other property revenues ............................................ 7,369 489 -- 7,858
-------- ------- ----- --------
Total property revenues ....................................... 151,895 9,334 -- 161,229
-------- ------- ----- --------
Property management revenues ....................................... 3,213 669 -- 3,882
Other .............................................................. 1,772 25 -- 1,797
-------- ------- ----- --------
Total other revenues .......................................... 4,985 694 -- 5,679
-------- ------- ----- --------
Total revenues ................................................ 156,880 10,028 -- 166,908
-------- ------- ----- --------
Property operating and maintenance (exclusive of items shown
separately below) ............................................. 51,751 3,879 -- 55,630
Depreciation and amortization ...................................... 28,927 1,865 277 (C) 31,069
Amortization of deferred financing costs ........................... 787 238 (206)(D) 819
Property management - owned ........................................ 3,520 176 -- 3,696
Property management - third party .................................. 2,328 440 -- 2,768
General and administrative ......................................... 4,438 -- -- 4,438
Interest ........................................................... 28,059 2,806 763 (E) 31,628
Credit enhancement fees ............................................ 1,006 303 37 (F) 1,346
------- ------- ------ --------
Total expenses ................................................ 120,816 9,707 871 131,394
------- ------- ------ --------
Equity in income of joint ventures ................................. 270 -- -- 270
Interest income .................................................... 293 58 (58)(G) 293
Loss on treasury locks ............................................. (5,637) -- -- (5,637)
------- ------- ------ --------
Net income ......................................................... 30,990 379 (929) 30,440
Dividends to preferred unitholders ................................. (7,222) -- -- (7,222)
------- ------- ------ --------
Net income available to common unitholders ......................... $ 23,768 $ 379 $ (929) $ 23,218
======= ======= ====== ========
Weighted average number of common Units outstanding - basic ........ 29,400 -- 783 (H) 30,183
Weighted average number of common Units outstanding - diluted ...... 29,820 -- 500 (I) 30,320
Per Common Unit Information:
Net income - basic ................................................. $ 0.81 $ 0.77
Net income - diluted ............................................... $ 0.81 $ 0.77
<FN>
The accompanying notes are an integral part of this statement.
</FN>
</TABLE>
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GABLES REALTY LIMITED PARTNERSHIP
NOTES AND ASSUMPTIONS TO UNAUDITED PRO FORMA
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited and Amounts in Thousands)
(A) Represents the historical unaudited consolidated statement of operations of
the Operating Partnership contained in its Quarterly Report on Form 10-Q
for the nine months ended September 30, 1998. Such results include the
operating results of TCR/SF since April 1, 1998, the closing date of the
acquisition.
(B) Represents the historical unaudited combined statement of operations of
TCR/SF for the three months ended March 31, 1998.
(C) Represents the net increase in depreciation of real estate owned as a
result of recording the TCR/SF real estate assets at fair value versus
historical cost. The acquisition price of the real estate assets was
allocated to land, buildings, furniture, fixtures and equipment, and
construction in progress and the related depreciation is calculated
utilizing an estimated useful life of 40 years for the buildings and 5
years for furniture, fixtures and equipment. Depreciation expense is
provided to the extent the real estate was operational during the period.
The components of the pro forma adjustment pertaining to the three months
ended March 31, 1998 are as follows:
Pro forma depreciation expense for acquired assets at
fair value $2,142
Less TCR/SF historical depreciation expense (1,865)
------
Pro forma adjustment $ 277
======
(D) Represents the net adjustment to amortization of deferred financing costs
for the three months ended March 31, 1998 as follows:
To record the amortization of deferred financing
costs related to the credit enhancement facility
put into effect on April 1, 1998 to enhance the
bond indebtedness assumed by the Operating Partnership
(the "Bond Enhancement Facility") $ 32
To eliminate the amortization of TCR/SF's deferred
financing costs which have a zero fair value at
April 1, 1998 (238)
------
Pro forma adjustment $ (206)
======
(E) Represents the net adjustment to interest expense for the three months
ended March 31, 1998 as follows:
To record interest expense on the cash portion of the TCR/SF
purchase price financed with borrowings under the
Operating Partnership's unsecured credit
facilities $ 2,504
To record the amortization of the discount required to
record the $12,500 portion of the purchase price
that was deferred until January 1, 2000 at fair
value 193
To record the interest expense on bond indebtedness
that was assumed by the Operating Partnership 1,598
To record capitalized interest for qualifying
construction expenditures at fair value (726)
------
Pro forma interest expense for acquisition 3,569
Less TCR/SF historical interest expense (2,806)
------
Pro forma adjustment $ 763
======
The Operating Partnership's borrowings under its current unsecured credit
facilities currently bear interest at LIBOR plus 0.80%. If interest rates under
the credit facilities fluctuated 0.125%, interest costs on the pro forma credit
facility indebtedness would increase or decrease by approximately $194 on an
annualized basis.
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(F) Represents the net adjustment to credit enhancement fees for the three
months ended March 31, 1998 as follows:
To record the credit enhancement fees under the
Bond Enhancement Facility $ 340
To eliminate the credit enhancement fees incurred
by TCR/SF related to enhancements that do not remain
in place at April 1, 1998 (303)
------
Pro forma adjustment $ 37
======
(G) Represents the adjustment to eliminate interest income included in the
TCR/SF historical amounts as the interest-bearing cash balances were not
acquired by the Operating Partnership.
(H) Reflects the issuance of Units in connection with the acquisition for the
three months ended March 31, 1998.
(I) Reflects the issuance of Units in connection with the acquisition for the
three months ended March 31, 1998 that are not antidilutive.
