SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
**********************************************************************
Date of Report (Date of earliest event reported): August 23, 1999
Merry Land Properties, Inc.
(Exact name of registrant as specified in its charter)
Georgia
(State or other jurisdiction of incorporation)
000-29778 58-2412761
(Commission File Number) (I.R.S.Employer I.D. Number)
624 Ellis Street, Augusta, Georgia 30901
(Address of principal executive offices) (Zip Code)
706/722-6756
(Registrant's telephone number including area code)
____________________________________________________________
(Former name or former address, if changed since last report)
**********************************************************************
Filed: September 13, 1999
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
The undersigned registrant hereby amends its current Report on Form 8-K (date
of event reported: August 23, 1999; date filed: August 26, 1999) by filing the
following described exhibit as set forth in the pages attached hereto:
Combined Statements of Excess of Revenues Over Specific Operating Expenses for
the Years Ended December 31, 1996, 1997 and 1998 and the Six Months Ended June
30, 1999 (Unaudited)for the properties acquired from the Equity Residential
Properties Trust Limited Liability Companies and Unaudited Pro Forma
Consolidated Balance Sheet and Statements of Income.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
MERRY LAND PROPERTIES, INC.
(Registrant)
/s/ Dorrie E. Green
By:____________________________
Dorrie E. Green
As Its Vice President
<PAGE>
MERRY LAND PROPERTIES, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
The unaudited consolidated statements of income are presented as if Merry Land
Properties, Inc. ("the Company") acquired Hammocks at Long Point Apartments,
Huntington Apartments, Magnolia Villas Apartments, Summit Place Apartments,
Windsor Place Apartments and Woodcrest Apartments ("the Properties") as of the
beginning of each period presented. In management's opinion, all adjustments
necessary to present fairly the effects of the property acquisitions have been
made.
The unaudited pro forma consolidated statements of income are not necessarily
indicative of what the actual results of operations of the Company would have
been assuming the Company had acquired the Properties as of the beginning of
each period presented, nor do they purport to represent the results of
operations for future periods.
<PAGE>
MERRY LAND PROPERTIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Combined
Results of
Company Acquired Pro Forma Company
Historical Properties Adjustments Pro Forma
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
INCOME:
Rental income $4,070,347 $4,820,162 (a) $ 8,890,509
Royalty income 938,830 0 938,830
Interest income 144,974 0 $(36,605) (f) 108,369
Management income 432,606 0 (192,807) (g) 239,799
Development fees 1,014,516 0 0 1,014,516
Long term loss (29,512) 0 0 (29,512)
--------- --------- --------- ----------
6,571,761 4,820,162 (229,412) 11,162,511
EXPENSES:
Rental expense 1,577,353 1,665,487 (a) 0 3,242,840
Interest expense 1,684,328 0 2,022,460 (c) 3,754,118
47,330 (d)
Depreciation 718,144 0 570,593 (b) 1,288,737
Amortization 0 0 13,142 (e) 13,142
General and administrative
expenses 1,171,347 0 0 1,171,347
--------- --------- ---------- ---------
5,151,172 1,665,487 2,653,525 9,470,184
INCOME BEFORE TAXES AND
EXTRAORDINARY ITEM 1,420,589 3,154,675 (2,882,937) 1,692,327
0
INCOME TAX PROVISION 386,230 0 103,260 (h) 489,490
--------- --------- ---------- ---------
INCOME BEFORE EXTRAORDINARY ITEM 1,034,359 3,154,675 (2,986,197) 1,202,837
EXTRAORDINARY GAIN--DISCOUNT ON --------- --------- ---------- ---------
REPAYMENT OF DEBT, NET OF INCOME
TAX PROVISION OF $441,746 721,969 0 0 721,969
--------- --------- ---------- ---------
NET INCOME 1,756,328 3,154,675 (2,986,197) 1,924,806
--------- --------- ---------- ---------
DISCOUNT ON REDEMPTION OF
PREFERRED STOCK 1,163,715 0 0 1,163,715
--------- --------- ---------- ---------
NET INCOME--COMMON $2,920,043 $3,154,675 $(2,986,197) $3,088,521
WEIGHTED AVERAGE COMMON SHARES:
Basic 2,181,070 2,181,070
--------- ---------
Diluted 2,264,523 2,264,523
--------- ---------
EARNINGS PER SHARE:
Basic $1.34 $1.42
----- -----
Diluted $1.30 $1.36
----- -----
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>
MERRY LAND PROPERTIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Combined
Results of
Company Acquired Pro Forma Company
Historical Properties Adjustments Pro Forma
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
INCOME:
Rental income $ 8,120,569 $9,121,974 (a) $17,242,543
Royalty income 1,693,489 0 1,693,489
Interest income 136,644 0 $(73,211) (f) 63,443
Management income 148,958 0 (75,088) (g) 73,870
Development fees 515,016 0 0 515,016
---------- --------- -------- ----------
10,614,676 9,121,974 (148,299) 19,588,351
EXPENSES:
Rental expense 3,449,045 3,485,783 (a) 6,934,828
Interest expense 694,462 0 4,044,920 (c) 4,841,307
101,925 (d)
Depreciation 1,556,457 0 1,141,187 (b) 2,697,644
Amortization 0 0 26,283 (e) 26,283
Insurance 42,066 0 0 42,066
General and administrative expenses 611,335 0 0 611,335
Impairment charge 1,666,463 0 0 1,666,463
--------- --------- --------- ----------
8,019,828 3,485,783 5,314,315 16,819,926
--------- --------- --------- ----------
INCOME BEFORE TAXES 2,594,848 5,636,191 (5,462,614) 2,768,425
INCOME TAX BENEFIT (PROVISION) 462,597 0 (65,959) (h) 396,618
--------- --------- --------- ----------
NET INCOME $3,057,445 $5,636,191 $(5,528,573) $3,165,073
--------- --------- --------- ----------
WEIGHTED AVERAGE COMMON SHARES:
Basic 2,113,393 2,113,393
Diluted 2,129,479 2,129,479
--------- ----------
EARNINGS PER SHARE:
Basic $1.45 $1.50
Diluted $1.44 $1.49
---- ----
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>
MERRY LAND PROPERTIES, INC.
NOTES AND ASSUMPTIONS TO UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF INCOME
(a) Reflects rental revenue, other property revenues, and
property operating and maintenance expenses (exclusive of
depreciation expense) for the Properties. All of the
properties were operational for both periods presented.
(b) Reflects depreciation expense for the properties
during the periods presented based on the depreciable
lives used by the company for similar properties.
(c) Reflects interest expense during the periods
presented associated with the mortgage debt issued to fund
the acquisitions of the properties. The weighted average
interest rate for the mortgages was 7.98% for both periods
presented.
(d) Reflects interest expense during the periods
presented associated with borrowings under the company's
line of credit facility which was utilized to acquire the
properties. The company's borrowings bear interest at
LIBOR plus 1.25%. The weighted average rates used for the
periods ended December 31, 1998 and June 30, 1999 were
6.80% and 6.31%, respectively.
(e) Reflects the amortization of the loan costs
associated with the acquisitions of the Properties based
on the lives of the loans.
(f) Reflects the reduction in interest income during the
periods presented associated with the cash used to fund
the acquisitions of the properties. The weighted average
interest rate was 5% for both periods.
(g) Reflects the reduction in management fee income
during the periods presented associated with the
management fees earned relating to the Properties
acquired.
(h) Reflects the income tax impact of operations of the
Properties acquired and other pro forma adjustments
computed at an estimated effective rate of 38%.
<PAGE>
MERRY LAND PROPERTIES, INC.
UNAUDITED PRO FORMA
CONSOLIDATED BALANCE SHEET
JUNE 30, 1999
The unaudited pro forma consolidated balance sheet is
presented as if all of the acquisitions of the Properties
had been consummated as of June 30, 1999.
The unaudited pro forma consolidated balance sheet is not
necessarily indicative of what the actual position would
have been at June 30, 1999, nor does it purport to
represent the future financial position of the Company.
<PAGE>
MERRY LAND PROPERTIES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Company Pro Forma Company
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
ASSETS:
Real estate assets, at cost:
Land held for mining, development, and sale $ 5,802,298 $ 5,802,298
Apartment 41,198,653 $53,528,659 (a) 94,717,312
Commercial rental property 2,627,652 0 2,627,652
Furniture and equipment 1,890,555 0 1,890,555
Development in progress 2,483,516 0 2,483,516
Total cost 53,992,674 53,528,659 (a) 107,521,333
Accumulated depreciation and depletion (12,184,117) 0 (12,184,117)
----------- ----------- -----------
41,808,557 53,528,659 (a) 95,337,216
----------- ----------- -----------
CASH AND CASH EQUIVALENTS 4,065,482 (2,283,572)(a) 1,781,910
RESTRICTED CASH 360,367 819,358 (a) 1,179,725
OTHER ASSETS:
Notes receivable 1,222,686 0 1,222,686
Other receivables 265,200 0 265,200
Deferred tax asset 5,649,625 0 5,649,625
Deferred loan costs 574,819 262,833 (a) 837,652
Other 142,659 158,028 (a) 300,687
7,854,989 420,861 8,275,850
Total assets $54,089,395 $52,485,306 $106,574,701
----------- ----------- -----------
NOTES PAYABLE:
Senior debt $ 0 $ 0 $ 0
Line of credit 0 1,500,000 (a) 1,500,000
Subordinated debt 0 0 0
Mortgage debt 41,241,000 50,683,000 (a) 91,924,000
----------- ----------- -----------
41,241,000 52,183,000 93,424,000
----------- ----------- -----------
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES:
Accrued interest 0 0 0
Accrued income taxes (478,183) 0 (478,183)
Accrued property taxes 237,213 258,079 (a) 495,292
Accrued dividends payable 0 0 0
Deferred revenue 182,373 0 182,373
Other 703,571 44,227 (a) 747,798
----------- ----------- -----------
644,974 302,306 947,280
PREFERRED STOCK 0 0 0
STOCKHOLDERS' EQUITY:
Common stock, at $1 stated value, 2,597,633
shares issued and outstanding 2,595,300 0 2,595,300
Capital surplus 10,277,229 0 10,277,229
Unamortized compensation (1,776,848) 0 (1,776,848)
Cumulative undistributed net earnings 1,107,740 0 1,107,740
----------- ----------- -----------
12,203,421 0 12,203,421
----------- ----------- -----------
Total liabilities and stockholders' equity $54,089,395 $52,485,306 $106,574,701
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of this balance sheet.
<PAGE>
MERRY LAND PROPERTIES, INC.
NOTES AND ASSUMPTIONS TO UNAUDITED PRO FORMA
CONSOLIDATED BALANCE SHEET
JUNE 30, 1999
(a) Reflects the acquisitions of the Properties, which took place after
June 30, 1999, the related application of the earnest money deposits to the
purchase price, issuance of mortgage debt, borrowings under the credit facility
and the assumption of security deposits, accrued property taxes, and other
liabilities.
<PAGE>
PROPERTIES ACQUIRED FROM THE EQUITY RESIDENTIAL
PROPERTIES TRUST LIMITED LIABILITY COMPANIES
COMBINED STATEMENTS OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1996, 1997, AND 1998
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Merry Land Properties, Inc.:
We have audited the accompanying combined statements of excess of revenues over
specific operating expenses of the PROPERTIES ACQUIRED FROM THE EQUITY
RESIDENTIAL PROPERTIES TRUST LIMITED LIABILITY COMPANIES for the years ended
December 31, 1996, 1997, and 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statements of excess of revenues
over specific operating expenses are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the combined statements of excess of revenues over specific
operating expenses. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
As described in Note 2, the financial statements exclude certain expenses that
would not be comparable with those resulting from the operations of the
property after acquisition by Merry Land Properties, Inc. The accompanying
financial statements were prepared for the purpose of complying with the rules
and regulations of the Securities and Exchange Commission and are not intended
to be a complete presentation of the properties' revenues and expenses.
In our opinion, the combined statements of excess of revenues over specific
operating expenses referred to above present fairly, in all material respects,
the excess of revenues over specific operating expenses (exclusive of expenses
described in Note 2) of the Properties Acquired from the Equity Residential
Properties Trust Limited Liability Companies for the years ended December 31,
1996, 1997, and 1998 in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
August 27, 1999
<PAGE>
PROPERTIES ACQUIRED FROM THE EQUITY RESIDENTIAL
PROPERTIES TRUST LIMITED LIABILITY COMPANIES
COMBINED STATEMENTS OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1996, 1997, AND 1998
AND THE SIX MONTHS ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
1996 1997 1998 1999
---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C>
REVENUES:
Rents (Note 1) $5,371,850 $6,417,773 $8,670,730 $4,570,227
Other income 297,801 415,909 451,244 249,935
Total revenues 5,669,651 6,833,682 9,121,974 4,820,162
SPECIFIC OPERATING EXPENSES (Note 2):
Operating 1,967,490 2,288,552 2,591,636 1,196,759
General and administrative 122,223 208,931 232,526 98,972
Real property taxes 417,432 440,204 661,621 369,756
Total specific operating expenses 2,507,145 2,937,687 3,485,783 1,665,487
EXCESS OF REVENUES OVER SPECIFIC OPERATING
EXPENSES $3,162,506 $3,895,995 $5,636,191 $3,154,675
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
PROPERTIES ACQUIRED FROM THE EQUITY RESIDENTIAL
PROPERTIES TRUST LIMITED LIABILITY COMPANIES
NOTES TO COMBINED STATEMENTS OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1996, 1997, AND 1998
AND THE SIX MONTHS ENDED JUNE 30, 1999
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF TRANSACTION
In six separate transactions on August 23, 1999, Merry Land Properties, Inc.
and a wholly owned subsidiary (collectively, the "Company") acquired all of
the membership interests in six limited liability companies, each of which own
one of the acquired apartment communities. Each of the six acquired
communities had been owned by one of six Delaware limited liability companies
whose members were the Company and ERP Operating Partnership, a subsidiary of
Equity Residential Properties Trust. ERP Operating Partnership held
substantially all of the capital accounts of each limited liability company,
having contributed the apartment communities to the limited liability
companies. The Company held a 50% profits interest, after payment of a
preferred return to ERP Operating Partnership, in each Delaware limited
liability company. The Company also had an option to purchase the Delaware
limited liability company interests owned by ERP Operating Partnership. The
acquisition cost of the properties listed below for each property represents
the option price paid directly or indirectly to ERP Operating partnership for
indirect ownership interests in the properties.
DESCRIPTION OF PROPERTIES
Below are descriptions of the properties acquired:
<TABLE>
<CAPTION>
Name of Market Date Acquisition
Apartments Location Units Built Cost
- ---------- -------- ----- ----- -----------
<S> <C> <C> <C> <C>
HAMMOCKS AT LONG POINT Savannah, Georgia 308 1997 $20,621,789
Huntington Savannah, Georgia 147 1986 5,752,204
Magnolia Villa Savannah, Georgia 144 1986 5,001,066
Summit Place Charleston, South Carolina 226 1985 6,939,825
Windsor Place Charleston, South Carolina 224 1984 9,753,695
Woodcrest Augusta, Georgia 248 1982 5,991,757
</TABLE>
<PAGE>
RENTAL INCOME
Rents from leases are accounted for ratably over the term of each lease, which
is generally for a period of 12 months or less.
2. BASIS OF ACCOUNTING
The accompanying combined statements of excess of revenues over specific
operating expenses are presented on the accrual basis of accounting. The
statements have been prepared in accordance with the applicable rules and
regulations of the Securities and Exchange Commission for real estate
properties acquired. Accordingly, the statements exclude certain historical
expenses not comparable to the operations of the properties after acquisition
by the Company, such as depreciation, interest, and management fees.
