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
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Date of Report (Date of earliest event reported): July 29, 1994
MERRY LAND & INVESTMENT COMPANY, INC.
(Exact name of registrant as specified in its charter)
Georgia 0-10384
(State or other jurisdiction of incorporation) (Commission File Number)
58-0961876
(I.R.S. Employer I.D. Number)
624 Ellis Street, Augusta, GA 30901
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 706/722-6756
____________________________________________________________
(Former name or former address, if changed since last report)
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The undersigned registrant hereby amends the following items,
financial statements, exhibits or other portions of its current Report on
Form 8-K (date of event reported: July 29, 1994) filed August 15, 1994, as
previously amended on form 8-K/A filed on September 27, 1994, as set forth
in the pages attached hereto.
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, thereunto duly authorized.
MERRY LAND & INVESTMENT
COMPANY, INC.
By: /S/
----------------------------
W. Tennent Houston
Filed: February 7, 1995 As Its President
<PAGE>
COMBINED OPERATIONS OF THE PROPERTIES OF
FOGELMAN SECURED EQUITY LIMITED PARTNERSHIP
STATEMENTS OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1993
TOGETHER WITH AUDITORS' REPORT
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and
Board of Directors of
Merry Land & Investment Company, Inc.:
We have audited the accompanying statement of excess of revenues over
specific operating expenses of the combined operations of the PROPERTIES OF
FOGELMAN SECURED EQUITY LIMITED PARTNERSHIP for the year ended December 31,
1993. This financial statement is the responsibility of management. 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 statement of excess of
revenue over specific operating expenses is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the statement 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 audit provides a reasonable basis for our opinion.
As described in Note 2, the financial statement excludes certain expenses
that would not be comparable with those resulting from the operations of
the property after acquisition by Merry Land & Investment Company, Inc.
The accompanying financial statement was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the
property's revenue and expenses.
In our opinion, the statement of excess of revenues over specific operating
expenses referred to above presents fairly, in all material respects, the
excess of revenues over specific operating expenses (exclusive of expenses
described in Note 2) of the combined operations of the Properties of
Fogelman Secured Equity Limited Partnership for the year ended December 31,
1993 in conformity with generally accepted accounting principles.
/S/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP
Atlanta, Georgia
September 16, 1994
<PAGE>
THE COMBINED OF OPERATIONS OF THE PROPERTIES OF
FOGELMAN SECURED EQUITY LIMITED PARTNERSHIP
STATEMENTS OF EXCESS OF REVENUES OVER
SPECIFIC OPERATING EXPENSES
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
1994 1993
------------ ------------
(Unaudited)
<S> <C> <C>
REVENUES:
Rents (Note 1) $16,854,587 $21,331,739
Other income 920,713 1,101,438
Total revenues 17,775,300 22,433,177
SPECIFIC OPERATING EXPENSES (Note 2):
Personnel 1,837,718 2,424,187
General and administrative 716,788 644,233
Marketing 540,035 711,907
Repairs, maintenance,
and contract services 1,857,909 1,983,257
Utilities 853,515 1,106,263
Property insurance 247,249 263,553
Real estate taxes 1,407,744 1,881,304
------------ ------------
7,460,958 9,014,704
------------ ------------
EXCESS OF REVENUES OVER SPECIFIC
OPERATING EXPENSES $ 10,314,342 $ 13,418,473
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
THE COMBINED OPERATIONS OF THE PROPERTIES OF
FOGELMAN SECURED EQUITY LIMITED PARTNERSHIP
NOTES TO THE STATEMENTS OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1993
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Description of Properties
Fogelman Secured Equity Limited Partnership ("FSELP") owns 3,343
apartment units throughout the eastern United States as follows:
<TABLE>
<CAPTION>
Apartments Locations Units
---------------- ------------------------- -----
<S> <C> <C>
Steeplechase Charlotte, North Carolina 247
Landings Memphis, Tennessee 292
Champions Park Atlanta, Georgia 252
Champions Club Richmond, Virginia 212
Duraleigh Woods Raleigh, North Carolina 362
Sawmill Village Columbus, Ohio 340
Clary's Crossing Columbia, Maryland 198
Windridge Atlanta, Georgia 272
English Hills Charlotte, North Carolina 280
Hunters Chase Westlake, Ohio 244
Hickory Creek Richmond, Virginia 294
Bermuda Cove Jacksonville, Florida 350
-----
3,343
=====
</TABLE>
On July 29, 1994, Merry Land & Investment Company, Inc. ("Merry Land")
entered into a definitive agreement to purchase these 12 apartment
complexes for $160 million cash. The seller has also agreed to pay
claims for defects identified by Merry Land during its due diligence
investigations of the properties. These claims total $5.6 million,
and Merry Land will receive credit at closing toward the purchase
price.
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 statements of excess of revenues over specific
operating expenses are presented on the accrual basis. 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 property
after acquisition by Merry Land, such as depreciation, interest, and
management fees. Merry Land has elected to be taxed as a real estate
investment trust ("REIT") under the Internal Revenue Code and intends
to maintain its qualification as a REIT in the future. Accordingly,
no provision for federal or state income taxes is required.
<PAGE>
<TABLE>
<CAPTION>
MERRY LAND & INVESTMENT COMPANY, INC.
PRO FORMA STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994
(Unaudited)
(In thousands, except per share data)
Prior 1994
Apartment Acquisitions Fogelman Acquisition
---------------------- --------------------
Combined Combined Interest
Results of Results of and
As Acquired Acquired Dividend
Reported Properties Adjustments Properties Adjustments Adjustment Pro Forma
-------- ---------- ----------- ---------- ----------- ---------- ---------
increase
(decrease)
<S> <C> <C> <C> <C> <C> <C> <C>
Income from property operations:
Rental and mineral royalty revenue $73,223 $4,342 (a) $17,775 (a) $95,340
Rental expenses, property tax 27,248 1,887 (b) 23 (c) 7,460 (b) 45 (c) 36,663
and insurance
Depreciation of real estate owned 12,483 708 (d) 3,240 (d) 16,431
------- ------- ------- ------- ------- ------- -------
Operating income from properties 33,492 2,455 (731) 10,315 (3,285) 0 42,246
Other income:
Other interest and dividend income 1,579 1,579 0
Other 0
------- ------- ------- ------- ------- ------- -------
1,579 0 0 0 0 1,579 0
Expenses:
Interest 7,756 4,279 (f) 12,035
General and administrative 1,129 11 (e) 18 (e) 1,158
Other 746 746
Costs associated with refinancing 0 0
of debt
------- ------- ------- ------- ------- ------- -------
9,631 0 11 0 18 4,279 13,939
Income before gains and income taxes 25,440 2,455 (742) 10,315 (3,303) (2,700) 28,307
Gains on sales of assets:
Gains on sales of investments 254 254
Gains on sales of real estate 0 0
------- ------- ------- ------- ------- ------- -------
254 0 0 0 0 0 254
------- ------- ------- ------- ------- ------- -------
Net income 25,694 $2,455 ($742) $10,315 ($3,303) ($2,700) $28,561
======= ======= ======= ======= ======== ======== =======
Preferred dividend requirement 5,353 4,923 (g)
------- -------
Net income available for common shares $20,341 $23,638
======= =======
Net income per common share $0.81 $0.81
(fully diluted)
Weighted Average number of common shares
outstanding 25,007 29,012
See notes and assumptions to unaudited pro forma statements of income.
</TABLE>
<PAGE>
MERRY LAND & INVESTMENT COMPANY, INC.
Notes and Assumptions to Unaudited Pro Forma Income Statement
(a) Represents adjustments to reflect a full period of rental income from
the properties acquired during 1994, as appropriate for the period
presented.
(b) Represents adjustments to reflect a full period of operating expenses
on properties acquired during 1994, as appropriate for the period
presented.
(c) Represents adjustments to reflect additional management costs on
properties acquired during 1994, as appropriate for the period
presented.
(d) Represents adjustments to reflect a full period of depreciation on
properties acquired during 1994, as appropriate for the period
presented.
(e) Represents adjustments to reflect the additional general and
administrative expenses required by an increase in personnel and
associated costs related to properties acquired during 1994, as
appropriate for the period presented.
(f) Represents adjustment to interest expense and other interest and
dividend income resulting from the sale of the 6.625% senior notes,
property acquisitions, payoff of other debt and the use of common and
preferred stock offering proceeds, as appropriate for the period
presented.
(g) Represents the 7% dividend requirement on the preferred stock
outstanding.
NOTE: No pro forma balance sheet has been prepared. The Company
financed the purchase of the $160 million property acquisition
and the July 29, 1994 apartment acquisition ($12.5 million)
through collection of the proceeds from the June 1994 stock
offering ($76,760,000), July proceeds from the overallotment on
the offering ($11,514,000), sales of securities and additional
draws on the unsecured bank line. Giving effect to these
transactions, pro forma balances as of September 30, 1994 are as
follows (in 000's):
Properties $747,328
Total assets $754,801
Total debt $225,851
Shareholders' equity $491,362
