<PAGE> 1
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 (Date of earliest event reported) June 30, 1994
-------------------------------
IRT Property Company
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(Exact name of registrant as specified in its charter)
Georgia 1-7859 58-1366611
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
200 Galleria Parkway, Suite 1400, Atlanta, GA 30339
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 955-4406
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N/A
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(Former name or former address, if changed since last report)
<PAGE> 2
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items,
financial statements, exhibits or other portions of its June 30, 1994 Report on
Form 8-K filed on July 14, 1994 as set forth in the pages attached hereto:
1. Financial Statements.
Combined statement of revenues and certain continuing expenses
of the two shopping centers listed below for the year ended
December 31, 1993 (audited) and for the three months ended
March 31, 1994 (unaudited).
Countryside Shops, Cooper City, Florida
Westgate Square, Sunrise, Florida
2. Pro Forma Financial Information (Unaudited).
a. Pro forma combined balance sheet of the Registrant as
of March 31, 1994 and pro forma statements of
earnings of the Registrant for the year ended
December 31, 1993 and the three months ended March
31, 1994.
b. Estimated pro forma earnings from operations and
funds from operations of the two shopping centers.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
IRT PROPERTY COMPANY
--------------------
Date: August 1, 1994 By:/s/Mary M. Thomas
---------------- --------------------------
Mary M. Thomas
Executive Vice President &
Chief Financial Officer
<PAGE> 3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of
IRT Property Company:
We have audited the accompanying combined statement of revenues and certain
continuing expenses of the two shopping centers identified in Note 1 of the
notes to the combined statement of revenues and certain continuing expenses for
the year ended December 31, 1993. This financial statement is the
responsibility of the management of the shopping centers. Our responsibility
is to express an opinion on this financial 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 financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. 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 audit provides a reasonable basis
for our opinion.
The accompanying statement of revenues and certain continuing expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Form 8-K of IRT
Property Company, as described in Note 1, and is not intended to be a complete
presentation of the two shopping centers' revenues and expenses.
In our opinion, the combined statement of revenues and certain continuing
expenses referred to above presents fairly, in all material respects, the
revenues and certain continuing expenses of the two shopping centers for the
year ended December 31, 1993 in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN & CO.
Atlanta, Georgia
June 22, 1994
<PAGE> 4
IRT PROPERTY COMPANY
COMBINED STATEMENTS OF REVENUES AND
CERTAIN CONTINUING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1993 AND
THE THREE MONTHS ENDED MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
1993 1994
---- ----
(Unaudited)
<S> <C> <C>
REVENUES:
Base Rent $2,451,329 $628,701
Percentage rent 36,458 0
Expense recoveries 712,906 191,697
--------- -------
Total revenues 3,200,693 820,398
--------- -------
CERTAIN CONTINUING EXPENSES:
Property taxes 441,262 115,418
Common area maintenance 385,544 109,516
Management fees 99,511 25,148
Insurance 43,131 10,783
Other 14,344 5,619
--------- -------
Total certain continuing
expenses 983,792 266,484
--------- -------
REVENUES IN EXCESS OF CERTAIN
CONTINUING EXPENSES $2,216,901 $553,914
========= =======
</TABLE>
The accompanying notes are an integral part of these
combined statements.
<PAGE> 5
IRT PROPERTY COMPANY
NOTES TO COMBINED STATEMENTS OF REVENUES AND
CERTAIN CONTINUING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1993 AND
THE THREE MONTHS ENDED MARCH 31, 1994 (UNAUDITED)
1. GENERAL
On May 31, 1994, IRT Property Company ("IRT" or the "Company"), a real
estate investment trust, entered into a contract to purchase two
shopping centers owned by Countryside Shops and Westgate Square,
Florida general partnerships with common partners. The two shopping
centers are managed by Southeast Shopping Center Corporation, a
related party. Therefore, the accompanying combined statements of
revenues and certain continuing expenses include the results of
operations of the following two shopping centers (the "properties"):
- Countryside Shops--Cooper City, Florida
- Westgate Square--Sunrise, Florida
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying combined financial statements are not representative
of the actual operations of the shopping centers for the periods
presented. Certain expenses may not be comparable to the expenses
expected to be incurred by the Company in the proposed future
operations of the shopping centers. The Company is not aware of any
material factors relating to the shopping centers that would cause the
reported financial information not to be indicative of future
operating results. Excluded expenses consist of interest,
depreciation and amortization, and other costs not directly related to
the future operations of the shopping centers.
Revenue Recognition
Expense recoveries are based on common area maintenance, property tax,
and insurance expenses, as defined in the leases, and are accrued on a
monthly basis. Administrative fees are assessed against applicable
tenants to offset the shopping centers' overhead costs and are
included in expense recoveries. The accrual of income is suspended
if rental payments are delinquent 60 days or more. Percentage rents,
based on tenants' sales volumes, are recognized as revenue when
earned.
<PAGE> 6
Management Fees
Management fees are included in the combined statements of revenues
and certain continuing expenses to the extent the charges conform to
IRT's current policy of charging 4% of base and percentage rents.
Similar fees, based on a different rate, were paid to a related party
in 1993.
3. TENANT LEASE TERMS
The properties were leased to various tenants under operating leases
that expire at various dates. The occupancy levels during 1993 and
other leasing information were as follows:
<TABLE>
<CAPTION>
Percent Expiration
Occupied Dates Expiration
Percent by Anchor of Anchor Dates of Other
Property Leased Tenant Tenants Tenants
-------- ------- --------- ---------- --------------
<S> <C> <C> <C> <C>
Westgate Square 94% 47% 2004 1994-2001
2024
Countryside Shops 95 54 2005 1994-2006
</TABLE>
<PAGE> 7
IRT Property Company
Pro Forma Combined Balance Sheet
March 31, 1994
(Unaudited)
The following unaudited pro forma combined balance sheet sets forth,
on a pro forma basis, the effect of the acquisition by IRT Property Company
(the "Company") of two centers, Countryside Shops and Westgate Square, under
common control (the "Centers") as if the transaction had been consummated on
March 31, 1994.
This pro forma balance sheet should be read in conjunction with its
notes together with the financial statements of the Company included in its
1993 Annual Report to Shareholders and its Report on Form 10-Q for the
three-month period ended March 31, 1994.
<TABLE>
<CAPTION>
Pro Forma
Adjustments IRT Property
IRT PROPERTY Increase Company Pro Forma
COMPANY (Decrease) Combined
------------ ----------- -----------------
<S> <C> <C> <C>
ASSETS
Real estate investments:
Rental properties, at cost $331,350,472 $ 25,598,906 (a) $356,949,378
Less-Accumulated depreciation (35,439,213) (35,439,213)
----------- ----------- -----------
295,911,259 25,598,906 321,510,165
Net investment in direct financing
leases 9,418,797 9,418,797
Mortgage loans, net 8,359,160 8,359,160
----------- ----------- -----------
Net real estate investments 313,689,216 25,598,906 339,288,122
Cash 77,811,475 (25,180,103)(b) 52,631,372
Accrued interest receivable 732,349 732,349
Prepaid expenses and other assets 6,958,928 114,185 (b) 7,073,113
----------- ----------- -----------
$399,191,968 $ 532,988 $399,724,956
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $ 98,415,940 $ 98,415,940
7.3% convertible subordinated
debentures 86,250,000 86,250,000
Accrued interest on debentures 804,521 804,521
Accrued expenses and other
liabilities 4,103,747 $ 532,988 (b) 4,636,735
Deferred income taxes 1,122,000 1,122,000
----------- ----------- -----------
Total liabilities 190,696,208 532,988 191,229,196
----------- ----------- -----------
Shareholders' Equity:
Common Stock 25,321,489 25,321,489
Additional paid-in capital 197,099,558 197,099,558
Cumulative distributions in
excess of net earnings (13,925,287) (13,925,287)
----------- ----------- -----------
Total shareholders' equity 208,495,760 0 208,495,760
----------- ----------- -----------
$399,191,968 $ 532,988 $399,724,956
=========== =========== ===========
</TABLE>
<PAGE> 8
IRT PROPERTY COMPANY
NOTES TO PRO FORMA COMBINED BALANCE SHEET
MARCH 31, 1994
(Unaudited)
(a) Additions to Rental Properties
The increase in real estate investments is based on the initial
purchase price plus the estimated costs of acquisition.
Initial purchase price $25,350,000
Estimated costs of acquisition 248,906
----------
$25,598,906
==========
(b) Changes in Cash and Other Assets and Liabilities
The $25,180,103 decrease in cash reflects the payment of the purchase
price, net of normal prorations, plus costs of acquisition. The
increase in prepaid expenses and other assets and in accrued expenses
and other liabilities reflect the normal prorations from the sellers.
<PAGE> 9
IRT PROPERTY COMPANY
PRO FORMA COMBINED STATEMENTS OF EARNINGS
(Unaudited)
The following unaudited pro forma combined statements of earnings for
the year ended December 31, 1993 and the three-month period ended March 31,
1994 have been prepared by combining the consolidated statements of earnings of
IRT Property Company (the "Company") with the combined statements of
operations, as adjusted, of the Centers for the periods indicated.
The pro forma combined statements presented below assume that the
purchase of the Centers had been consummated as of January 1, 1993.
The pro forma combined statements of earnings do not necessarily
reflect operations as they would have been if IRT had owned the Centers during
such periods and should not be deemed to be necessarily indicative of the
future results of the Company after the purchase.
The pro forma combined statements of earnings should be read in
conjunction with their notes, together with the combined statement of revenues
and certain continuing operating expenses of the Centers for the year ended
December 31, 1993, included as an exhibit herein, and the financial statements
of the Company included in its 1993 Annual Report to Shareholders and its
Report on Form 10-Q for the three-month period ended March 31, 1994.
[SCHEDULE ON FOLLOWING PAGE]
<PAGE> 10
<TABLE>
<CAPTION>
IRT
Operations of the Pro Forma Property
Countryside & Adjustments Company
IRT PROPERTY Westgate Increase Pro Forma
COMPANY Centers (Decrease) Combined
---------- --------------- ----------- ---------
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993
----------------------------
REVENUES:
Income from rental properties $41,607,391 $3,200,693 $44,808,084
Interest 2,257,405 $ (251,801) (a) 2,005,604
Interest on direct financing
leases 1,198,115 1,198,115
---------- --------- ---------- ----------
45,062,911 3,200,693 (251,801) 48,011,803
---------- --------- ---------- ----------
EXPENSES:
Operating expenses of rental
properties 10,022,610 983,792 (d) 11,006,402
Interest on mortgages 10,269,423 10,269,423
Interest on debentures 2,578,387 2,578,387
Interest on indebtedness to
banks 456,835 698,000 (b) 1,154,835
Depreciation 7,668,797 442,944 (c) 8,111,741
General and administrative 2,294,594 (d) 2,294,594
---------- --------- ---------- ----------
33,290,646 983,792 1,140,944 35,415,382
---------- --------- ---------- ----------
Earnings before gain on sales
of properties and
extraordinary items $11,772,265 $2,216,901 $(1,392,745) $12,596,421
========== ========= ========== ==========
Per share earnings before gain on
sales of properties and
extraordinary items $ 0.52 $ 0.56
========== ==========
Average shares outstanding 22,457,131 22,457,131
========== ==========
THREE MONTHS ENDED MARCH 31, 1994
---------------------------------
REVENUES:
Income from rental properties $10,646,645 $ 820,398 $11,467,043
Interest 857,844 $ (201,441) (a) 656,403
Interest on direct financing
leases 534,310 534,310
---------- --------- ---------- ----------
12,038,799 820,398 (201,441) 12,657,756
---------- --------- ---------- ----------
EXPENSES:
Operating expenses of rental
properties 2,407,360 266,484 (d) 2,673,844
Interest on mortgages 2,182,824 2,182,824
Interest on debentures 1,571,413 1,571,413
Interest on indebtedness to
banks 23,991 23,991
Depreciation & amortization 2,086,779 110,736 (c) 2,197,515
General and administrative 634,501 (d) 634,501
---------- --------- ---------- ----------
8,906,868 266,484 110,736 9,284,088
---------- --------- ---------- ----------
Earnings before gain on sales
of properties and
extraordinary items $ 3,131,931 $ 553,914 $ (312,177) $ 3,373,668
========== ========= ========== ==========
Per share earnings before gain on
sales of properties and
extraordinary items $ 0.12 $ 0.13
========== ==========
Average shares outstanding 25,297,019 25,297,019
========== ==========
</TABLE>
<PAGE> 11
IRT PROPERTY COMPANY
NOTES TO PRO FORMA COMBINED STATEMENTS OF EARNINGS
(Unaudited)
Adjustments assuming that the acquisition of the Centers occurred at the
beginning of the period, with the acquisition funded through borrowings under
the Company's revolving term loan and repayment of such borrowings upon
completion of the Company's 1993 stock and debenture offerings:
(a) Decrease in interest income from short-term investments due to
utilization of otherwise idle cash at interest rates of approximately
3.00% for the period of September 1, 1993 through December 31, 1993
and 3.20% for the first quarter of 1994.
(b) Increase in interest expense on bank indebtedness based on estimated
borrowings for the period January 1, 1993 through August 31, 1993 of
$25,000,000 at 4.438% partially offset by lower commitment fees.
(c) Increase in depreciation expense for two additional operating centers
in 1993 and for the three-month period ended March 31, 1994.
(d) The operating expenses of rental properties for the Centers includes
management fees of $99,511 for the year ended December 31, 1993 and
$25,148 for the three-month period ended March 31, 1994. It is
assumed that these fees would offset any increase in general and
administrative expenses required by an increase in personnel and
associated costs.
<PAGE> 12
IRT Property Company
Estimated Pro Forma Earnings from Operations
and Funds from Operations of the Centers
(Unaudited)
The following presents the estimated pro forma earnings from
operations and funds from operations of the Centers for the year ended December
31, 1993 based on the audited combined statement of revenues and certain
continuing expenses and pro forma adjustments thereto. Earnings from
operations is not taxable to the Registrant because it qualifies as a real
estate investment trust under the Internal Revenue Code. Funds from operations
is defined as net cash flows from operating activities before changes in
accrued assets and liabilities. These estimated pro forma results do not
purport to present expected results of operations for these properties in the
future and were prepared on the basis described in the notes to the pro forma
financial statements which should be read in conjunction herewith.
<TABLE>
<S> <C>
Estimate of Pro Forma Earnings from Operations:
- - ----------------------------------------------
Operations of the Centers $2,192,825
Pro forma depreciation (442,944)
---------
Estimated pro forma earnings
from operations of the Centers $1,749,881
=========
Estimate of Pro Forma Funds from Operations:
- - -------------------------------------------
Estimated pro forma earnings
from operations of the Centers $1,749,881
Add - Depreciation 442,944
---------
Estimated pro forma funds from
operations of the Centers $2,192,825
=========
</TABLE>
