SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: February 9, 2000
(Date of earliest event reported)
Inland Retail Real Estate Trust, Inc.
(Exact name of registrant as specified in the charter)
Maryland 333-64391 36-4246655
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
2901 Butterfield Road
Oak Brook, Illinois 60523
(Address of Principal Executive Offices)
(630) 218-8000
(Registrant's telephone number including area code)
Not Applicable
(Former name or former address, if changed since last report)
-1-
We filed a Form 8-K dated February 9, 2000 on February 22, 2000 with regard to
the acquisition of Conway Plaza without the requisite financial information.
Accordingly, we are filing this Form 8-K/A to include that financial
information.
Item 7. Financial Statements and Exhibits
Index to Financial Statements
Page
Inland Retail Real Estate Trust, Inc.:
Pro Forma Consolidated Balance Sheet (unaudited)
at December 31, 1999.............................................. F- 1
Notes to Pro Forma Consolidated Balance Sheet (unaudited)
at December 31, 1999.............................................. F- 3
Pro Forma Consolidated Statement of Operations (unaudited)
for the year ended December 31, 1999.............................. F- 5
Notes to Pro Forma Consolidated Statement of Operations (unaudited)
for the year ended December 31, 1999.............................. F- 7
Conway Plaza:
Independent Auditors' Report........................................ F- 9
Historical Summary of Gross Income and Direct Operating Expenses
for the year ended December 31, 1999.............................. F-10
Notes to the Historical Summary of Gross Income and Direct
Operating Expenses for the year ended December 31, 1999........... F-11
-2-
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.
Inland Retail Real Estate Trust, Inc.
(Registrant)
By:/s/ BARRY L. LAZARUS
Barry L. Lazarus
President, Chief Operating Officer,
Treasurer and Chief Financial Officer
Date: April 24, 2000
-3-
Inland Retail Real Estate Trust, Inc.
Pro Forma Consolidated Balance Sheet
December 31, 1999
(unaudited)
The following unaudited Pro Forma Consolidated Balance Sheet is presented as if
the acquisition of the property indicated in Note B had occurred on December
31, 1999.
A Pro Forma Consolidated Balance Sheet provides investors with information
about the continuing impact of particular transactions by showing how they may
affect historical financial statements if the transactions were consummated at
an earlier time. Such statements should assist investors in analyzing the
future prospects of the registrant because they illustrate the possible scope
of the change in the registrant's historical financial position and results of
operations caused by the transactions.
This unaudited Pro Forma Consolidated Balance Sheet is not necessarily
indicative of what the actual financial position would have been at December
31, 1999, nor does it purport to represent our future financial position.
Unless otherwise defined, capitalized terms used herein shall have the same
meaning as in the Prospectus.
F-1
Inland Retail Real Estate Trust, Inc.
Pro Forma Consolidated Balance Sheet
December 31, 1999
(unaudited)
Pro Forma
Adjustments
-------------
(A) Property Pro Forma
Historical Acquisition as adjusted
------------- -------------- -------------
Assets
- ------
Net investment in
properties(B)............. $126,000,016 8,500,000 134,500,016
Cash........................ 14,869,164 - 14,869,164
Restricted cash............. 1,246,889 - 1,246,889
Accounts and rents
receivable................ 1,331,213 - 1,331,213
Real estate tax and
insurance escrows (E)..... 227,123 - 227,123
Furniture and Equipment..... 9,776 - 9,776
Loan fees................... 164,433 - 164,433
Leasing fees................ 34,106 - 34,106
Other assets................ 105,416 - 105,416
------------- -------------- -------------
Total assets................ $143,988,136 8,500,000 152,488,136
============= ============== =============
Liabilities and Stockholders' Equity
- ------------------------------------
Accrued real estate taxes... - 8,039 8,039
Security deposits........... 232,370 33,294 265,664
Mortgages payable (D)....... 93,099,852 - 93,099,852
Unearned income............. 9,585 - 9,585
Accounts payable............ 74,094 - 74,094
Accrued interest payable.... 419,003 - 419,003
Other liabilities........... 1,359,209 191,518 1,550,727
Distribution payable........ 331,467 - 331,467
Due to Affiliates........... 582,787 - 582,787
Accrued offering costs...... 2,863,904 - 2,863,904
------------- -------------- -------------
Total liabilities........... 98,972,271 232,851 99,205,122
------------- -------------- -------------
Minority interest in
partnership (C)........... 2,000 - 2,000
Common Stock................ 54,338 9,613 63,951
Additional paid-in capital
(net of Offering costs)... 44,959,527 8,257,536 53,217,063
------------- -------------- -------------
Total stockholders' equity.. 45,015,865 8,267,149 (F) 53,281,014
------------- -------------- -------------
Total liabilities and
stockholders' equity...... $143,988,136 8,500,000 152,488,136
============= ============== =============
See accompanying notes to pro forma consolidated balance sheet.
F-2
Inland Retail Real Estate Trust, Inc.
Notes to Pro Forma Consolidated Balance Sheet
December 31, 1999
(unaudited)
(continued)
(A) The historical column represents our Consolidated Balance Sheet as of
December 31, 1999. We were formed on September 3, 1998. As of December
31, 1999, the Company had sold 5,370,632 Shares to the public resulting in
gross proceeds of $53,689,324 and an additional 43,207 Shares pursuant to
the DRP for $410,465 of additional gross proceeds. In addition, we have
received the Advisor's capital contribution of $200,000 for which it was
issued 20,000 Shares.
(B) The pro forma adjustments reflect the acquisition of Conway Plaza which was
purchased on February 9, 2000 from an unaffiliated third party for cash:
Assets
- ------
Net investment in
properties........... $ 8,500,000
Cash................... -
------------
Total assets........... $ 8,500,000
============
Liabilities and Stockholders' Equity
- ------------------------------------
Accrued real
estate taxes......... 8,039
Security deposits...... 33,294
Mortgages payable...... -
Other liabilities...... 191,518
------------
Total liabilities...... 232,851
------------
Common Stock........... 9,613
Additional paid in
capital (net of
Offering costs)...... 8,257,536
------------
Total stockholders'
equity (F)........... 8,267,149
------------
Total liabilities and
stockholders' equity. $ 8,500,000
============
F-3
Inland Retail Real Estate Trust, Inc.
Notes to Pro Forma Consolidated Balance Sheet
December 31, 1999
(unaudited)
(continued)
(C) The Pro Forma Consolidated Balance Sheet includes the accounts of the
Operating Partnership in which the Company has an approximately 99%
controlling general partner interest. The Advisor owns the remaining
approximately 1% limited partnership common units in the Operating
Partnership for which it paid $2,000 and which is reflected as a minority
interest.
(D) Represents the first mortgage loans assumed and originated in conjunction
with the acquisition of properties. These mortgage loans with an aggregate
principal balance of approximately $93,099,852 are payable to third parties
at interest rates ranging from 6.9% to 8.3% per annum and have maturities
ranging from March 2000 to November 2008.
(E) Represents real estate tax and insurance escrows held.
(F) Additional offering proceeds of $9,613,000, net of offering costs of
$1,345,851 are reflected as received as of December 31, 1999. Offering
costs consist principally of registration costs, printing and selling
costs, including commissions.
Subsequent to December 31, 1999 and through April 18, 2000, additional
offering proceeds of $15,915,000, net of offering costs of $2,228,100 have
been received by the Company.
F-4
Inland Retail Real Estate Trust, Inc.
Pro Forma Consolidated Statement of Operations
For the year ended December 31, 1999
(unaudited)
The following unaudited Pro Forma Consolidated Statement of Operations is
presented to effect the acquisition of the property indicated in Note B of the
Notes to the Pro Forma Consolidated Statement of Operations as though it
occurred on January 1, 1999.
This unaudited Pro Forma Consolidated Statement of Operations is not
necessarily indicative of what the actual results of operations would have been
for the year ended December 31, 1999, nor does it purport to represent our
future financial position. Unless otherwise defined, capitalized terms used
herein shall have the same meaning as in the Prospectus.
F-5
Inland Retail Real Estate Trust, Inc.
Pro Forma Consolidated Statement of Operations
For the year ended December 31, 1999
(unaudited)
Historical
------------
Company Pro Forma
(A) Adjustment Pro Forma
------------ ------------ ------------
Rental income.................... $ 4,339,614 483,054 4,822,668
Additional rental income......... 1,452,868 96,237 1,549,105
Interest income.................. 237,261 - 237,261
Other income..................... 350 2,377 2,727
------------ ------------ ------------
Total income..................... 6,030,093 581,668 6,611,761
------------ ------------ ------------
Professional services............ 76,844 - 76,844
General and administrative
expenses....................... 208,625 - 208,625
Advisor asset management fee (C). - 85,000 85,000
Property operating expenses...... 1,646,393 172,708 1,819,101
Management fee (G)............... 225,665 26,175 251,840
Interest expense (H)............. 2,367,882 - 2,367,882
Acquisition costs expensed....... 83,587 - 83,587
Depreciation and amortization(D) 1,253,101 257,833 1,510,934
------------ ------------ ------------
Total expenses................... 5,862,097 541,716 6,403,813
------------ ------------ ------------
Net income applicable to
common shareholders (F)........ 167,996 39,952 $ 207,948
============ ============ ============
Weighted average number of
shares of common stock
outstanding (E)................ 5,433,800 - 6,395,100
============ ============
Basic and diluted net income
per weighted average number of
shares of common stock
outstanding (E)................ .03 - $ .03
============ ============
See accompanying notes to pro forma consolidated statement of operations.
F-6
Inland Retail Real Estate Trust, Inc.
Notes to Pro Forma Consolidated Statement of Operations
For the year ended December 31, 1999
(unaudited)
(A) Historical information represents the historical statement of operations of
the Company for the year ended December 31, 1999 as filed with the SEC on
Form 10-K.
(B) Total pro forma adjustments for the acquisition of Conway Plaza is as
though it was acquired January 1, 1999.
Rental income (I).... 483,054
Additional rental
income (I)......... 96,237
Other income......... 2,377
-----------
Total income......... 581,668
-----------
Advisor asset
management fee (C). 85,000
Property operating
expenses........... 172,708
Management fee (G)... 26,175
Interest expense..... -
Depreciation (D)..... 257,833
-----------
Total expenses....... 541,716
-----------
Net income........... 39,952
===========
F-7
Inland Retail Real Estate Trust, Inc.
Notes to Pro Forma Consolidated Statement of Operations
For the year ended December 31, 1999
(unaudited)
(C) The advisor asset management fee has been calculated as 1% of the cost of
acquisition of the property, prorated for the 12 months.
(D) Depreciation expense is computed using the straight-line method, based upon
an estimated useful life of thirty years for building and fifteen years for
improvements. The allocation of land, building and improvements was based
upon values stated in the related appraisal.
(E) The pro forma weighted average number of shares of common stock outstanding
for the year ended December 31, 1999 was calculated using the additional
shares sold to purchase the property on a weighted average basis plus the
20,000 shares purchased by the Advisor in connection with our organization.
(F) The net income allocable to the minority interest is immaterial, and
therefore, has been excluded.
(G) Management fees are calculated as 4.5% of gross revenues.
(H) The Company purchased Conway Plaza from an unaffiliated third party by
paying the entire purchase price for the property in cash. The property
will be financed in the future.
(I) Beginning January 1, 1999, Conway's anchor tenant, occupying approximately
32% of the gross leasable area, underwent significant renovations. During
the construction, the tenant ceased operations and payment of base rent and
recoveries. As a result of the construction, another significant tenant,
occupying approximately 10% of the gross leasable area, ceased base rent
payments, as stipulated in their lease. Construction concluded during
November 1999. As a result, future base rent and recovery income may
differ from the amounts reflected in the Historical Summary.
F-8
Independent Auditors' Report
The Board of Directors
Inland Retail Real Estate Trust, Inc.:
We have audited the accompanying Historical Summary of Gross Income and Direct
Operating Expenses (Historical Summary) of Conway Plaza for the year ended
December 31, 1999. This Historical Summary is the responsibility of the
management of Inland Retail Real Estate Trust, Inc. Our responsibility is to
express an opinion on the Historical Summary 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 Historical Summary is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Historical Summary. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the Historical Summary. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and
for inclusion in the Current Report on Form 8-K/A of Inland Retail Real Estate
Trust, Inc., as described in note 2. The presentation is not intended to be a
complete presentation of Conway Plaza's revenues and expenses.
In our opinion, the Historical Summary referred to above presents fairly, in
all material respects, the gross income and direct operating expenses described
in note 2 of Conway Plaza for the year ended December 31, 1999, in conformity
with generally accepted accounting principles.
KPMG LLP
Chicago, Illinois
February 1, 2000
F-9
Conway Plaza
Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1999
Gross income:
Base and percentage rental income............... $ 483,054
Operating expense and real estate
tax recoveries................................ 96,237
Other Income.................................... 2,377
-----------
Total Gross Income.............................. 581,668
-----------
Direct operating expenses:
Operating expenses.............................. 67,609
Real estate taxes............................... 77,772
Management fees................................. 25,929
Insurance....................................... 23,006
Utilities....................................... 4,321
-----------
Total direct operating expenses................. 198,637
-----------
Excess of gross income over
direct operating expenses..................... $ 383,031
===========
See accompanying notes to historical summary of gross income and direct
operating expenses.
F-10
Conway Plaza
Notes to Historical Summary of Gross Income and Direct Operating Expenses
For the Year ended December 31, 1999
1. Business
Conway Plaza (Conway) is located in Orlando, Florida. It consists of
approximately 119,000 square feet of gross leasable area and was 90%
occupied at December 31, 1999. Inland Retail Real Estate Trust, Inc. has
signed a sale and purchase agreement for the purchase of Conway from an
unaffiliated third party with an anticipated closing date of February 2000.
2. Basis of Presentation
The Historical Summary of Gross Income and Direct Operating Expenses
(Historical Summary) has been prepared for the purpose of complying with
Rule 3-14 of the Securities and Exchange Commission Regulation S-X and for
inclusion in the Current Report on Form 8-K/A of Inland Retail Real Estate
Trust, Inc. and is not intended to be a complete presentation of Conway's
revenues and expenses. The Historical Summary has been prepared on the
accrual basis of accounting and requires management of Conway to make
estimates and assumptions that affect the reported amounts of the revenues
and expenses during the reporting period. Actual results may differ from
those estimates.
3. Gross Income
Conway leases retail space under various lease agreements with its tenants.
All leases are accounted for as operating leases. Certain of the leases
include provisions under which Conway is reimbursed for common area costs,
real estate taxes, and insurance costs. Certain of the leases contain
renewal options for various periods at various rental rates. Certain of
the leases contain additional rental income based on a stated percentage of
gross sales over the tenant's annual break point. Percentage rental income
of $17,626 is included in Base and Percentage Rental Income.
Base rentals are reported as income over the lease term as they become
receivable under the lease provisions. However, when rentals vary from a
straight-line basis due to short-term rent abatements or escalating rents
during the lease term, the income is recognized based on effective rental
rates. Related adjustments increased base rental income by $17,337 for the
year ended December 31, 1999.
Beginning January 1, 1999, Conway's anchor tenant, occupying approximately
32% of the gross leasable area, underwent significant renovations. During
the construction, the tenant ceased operations and payment of base rent and
recoveries. As a result of the construction, another significant tenant,
occupying approximately 10% of the gross leasable area, ceased base rent
payments, as stipulated in their lease. Construction concluded during
November 1999. As a result, future base rent and recovery income may
differ from the amounts reflected in the Historical Summary.
F-11
Conway Plaza
Notes to Historical Summary of Gross Income and Direct Operating Expenses
For the Year ended December 31, 1999
Minimum rents to be received from tenants under operating leases in effect
or executed at December 31, 1999, are as follows:
Year Amount
---- ------
2000 $ 810,059
2001 670,901
2002 557,366
2003 531,109
2004 515,924
Thereafter 4,695,117
-----------
$ 7,780,476
===========
4. Direct Operating Expenses
Direct operating expenses include only those costs expected to be
comparable to the proposed future operations of Conway. Costs such as
mortgage interest, depreciation, amortization and professional fees are
excluded from the Historical Summary.
Conway is managed pursuant to the terms of a management agreement for an
annual fee of 4% of base rent collection (as defined). Subsequent to the
sale of Conway (note 1), Inland Retail Real Estate Trust, Inc. will execute
a management agreement with an affiliate pursuant to which an annual
management fee would be charged. A new management agreement may cause
future operating expenses to differ from the amounts reflected in the
Historical Summary.
F-12
