SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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) August 31, 1994
UNITED DOMINION REALTY TRUST, INC.
(Exact name of registrant as specified in its charter)
Virginia 1-10524 54-0857512
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation of organization) File Number) Identification No.)
10 South Sixth Street, Suite 203, Richmond, Virginia 23219-3802
(Address of principal executive offices)
Registrant's telephone number, including area code (804) 780-2691
NO CHANGE
(Former name or former address, if changed since last report)
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ITEM 5. Other Events
On July 1, 1994, the Trust closed on 21 properties included in a 25
property portfolio which had been under contract since April 1, 1994.
The communities contain 4,390 units and were purchased for $143.7
million, including closing costs, from entities affiliated with Clover
Financial Corporation, a New Jersey Corporation (previously reported on
Form 8-K dated May 26, 1994). The 21 apartment communities are located
in Alabama (2), Delaware (2), Florida (1), Georgia (1), Maryland (2),
North Carolina (4), South Carolina (7) and Virginia (2). On August 16,
1994, 3 additional apartment communities included in the portfolio
containing 628 units were purchased for $18.8 million, including closing
costs. The apartment communities are located in Maryland (2) and South
Carolina (1). The remaining property, located in South Carolina, is
expected to be purchased on or about November 1, 1994.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
Description Location
(a) Financial Statements of Businesses Acquired
The combined audited statements of rental
operations for the 21 apartment properties
which were purchased on July 1, 1994, the 3
apartment properties purchased on August 16, 1994
and the one property that will be purchased on
or about November 1, 1994, from certain affiliates
of Clover Financial Corporation, were filed
with the Commission on Form 8-K dated May 26, 1994.
(b) Pro Forma Financial Information 4 through 11
(c) Exhibits
(99) Computation of Ratio of Earnings to
Fixed Charges 12
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UNITED DOMINION REALTY TRUST, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1994
(UNAUDITED)
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ACQUISITIONS
PREVIOUSLY
REPORTED ON
FORM 8-K DATED
MAY 26, 1994
(PORTFOLIO PRO
HISTORICAL (A) ACQUISITION) FORMA
<S> <C> <C> <C>
BALANCE SHEET
ASSETS
Real estate owned
Apartments............................................................ $604,436 $164,807(B) $769,243
Shopping centers...................................................... 74,614 74,614
Office and industrial................................................. 4,595 4,595
683,645 164,807 848,452
Less accumulated depreciation......................................... 103,464 103,464
580,181 164,807 744,988
Cash and cash equivalents............................................... 85,994 (80,000)(C) 5,994
Other assets............................................................ 16,252 (6,258)(D) 9,994
$682,427 $78,549 $760,976
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage notes payable.................................................. $ 95,834 $ 11,696(E) $107,530
Notes payable........................................................... 202,761 59,444(F) 262,205
Accounts payable, accrued expenses and other............................ 11,623 274(G) 11,897
Tenants' deposits and rents paid in advance............................. 3,999 665(G) 4,664
Distributions payable to shareholders................................... 9,744 9,744
323,961 72,079 396,040
Shareholders' equity:
Common stock, $1 par value; 60,000,000 shares authorized
49,723,912 shares issued and outstanding (50,203,312
in pro forma).................................................... 49,724 479(H) 50,203
Preferred stock, 25,000,000 shares authorized, no shares
outstanding........................................................ -- -- --
Additional paid in capital............................................ 403,109 5,991(H) 409,100
Notes receivable from officer shareholders............................ (4,090) (4,090)
Distributions in excess of earnings................................... (90,277) (90,277)
Total shareholders equity............................................. 358,466 6,470 364,936
$682,427 $ 78,549 $760,976
</TABLE>
2
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UNITED DOMINION REALTY TRUST
NOTES TO PRO FORMA BALANCE SHEET
JUNE 30, 1994
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited Pro Forma Balance Sheet assumes the
completion as of June 30, 1994, of (i) the sale of 479,400 shares of
Common Stock at $14.25 per share on July 15, 1994 (representing the
exercise by the underwriters of their over-allotment option related to
the June, 1994 public offering of 8,000,000 shares of Common Stock at
$14.25), (ii) the acquisition of 21 apartment communities on July 1,
1994, 3 apartment communities on August 16, 1994 and 1 apartment
community to be acquired on or about November 1, 1994 from partnerships
affiliated with the Clover Financial Corporation, a New Jersey
Corporation (previously reported on Form 8-K dated May 26, 1994) (the
"Portfolio Acquisition"), (iii) the borrowing of $59,444,000 necessary
to fund a portion of the Portfolio Acquisition. In management's opinion,
all significant adjustments necessary to reflect these transactions have
been made. The Pro Forma Balance Sheet should be read in conjunction
with the Trust's audited financial statements for the year ended
December 31, 1993 and its unaudited financial statements for the second
quarter ended June 30, 1994.
The unaudited Pro Forma Balance Sheet is not necessarily indicative
of what the Trust's financial position would have been assuming the
Common Stock offering and related acquisitions had been consummated as
of June 30, 1994, nor do they purport to be indicative of the Trust's
financial position for future periods.
2. ADJUSTMENTS TO PRO FORMA BALANCE SHEET
(A) Represents the Trust's Historical Balance Sheet contained in the
Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994.
(B) Represents the estimated aggregate cost, including closing costs,
for the Portfolio Acquisition.
(C) Represents the use of $80,000,000 of the net proceeds from the
sale of 8,000,000 shares of Common Stock in a public offering at $14.25
in mid-June, 1994 to acquire the Portfolio Acquisition.
(D) Represents acquisition deposits and deferred costs associated with
the Portfolio Acquisition.
(E) Represents the assumption of two mortgage loans encumbering two
properties included in the Portfolio Acquisition as follows:
<TABLE>
<CAPTION>
LOAN INTEREST
PROPERTY NAME AMOUNT RATE
<S> <C> <C>
Harris Pond Apartments.............................................. $5,209,000 8.75%
Royal Oaks Apartments............................................... 6,487,000 8.50
</TABLE>
(F) Represents assumed additional borrowings of $59,444,000
necessary to fund a portion of the Portfolio Acquisition in (B).
(G) Represents estimated accrued expenses, tenant deposits and
rents paid in advance which have been or will be assumed by the Trust in
the Portfolio Acquisition.
(H) Represents the issuance of 479,400 shares of Common Stock at
$14.25, net of the underwriting discounts of $362,000 which were
incurred.
3
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<TABLE>
UNITED DOMINION REALTY TRUST, INC.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1994
(Unaudited)
(In thousands, except per share data)
ACQUISITIONS ACQUISITIONS
PREVIOUSLY REPORTED PREVIOUSLY REPORTED
ON FORM 8-K ON FORM 8-K
DATED MAY 26, 1994 DATED APRIL 15, 1994
(PORTFOLIO AND FORM 8-K PRO FORMA PRO
HISTORICAL(A) ACQUISITION)(B) DATED MAY 17, 1994(C) ADJUSTMENTS FORMA
<S> <C> <C> <C> <C> <C>
Income
Property operations:
Rental income $56,379 $14,399 $2,432 $73,210
Property expenses:
Utilities 4,856 1,333 120 6,309
Repairs and maintenance 8,441 2,602 353 11,396
Real estate taxes 3,864 1,007 184 5,055
Property management 1,808 710 106 ($321)(E) 2,303
Other operating expenses 4,854 2,128 278 (277)(F) 6,983
Depreciation of real
estate owned 12,020 2,509 (G) 14,529
35,843 7,780 1,041 1,911 46,575
Income from property
operations 20,536 6,619 1,391 (1,911) 26,635
Interest income 386 (89)(H) 297
20,922 6,619 1,391 (2,000) 26,932
Expenses
Interest 10,474 3,524 (I) 13,998
General and administrative 2,595 2,595
Other depreciation and
amortization 371 371
13,440 3,524 16,964
Income before gains (losses)
on investments and
extraordinary item 7,482 6,619 1,391 (5,524) 9,968
Gains (losses) on sale of
investments
Income before extraordinary
item 7,482 6,619 1,391 (5,524) 9,968
Extraordinary item-early
extinguishment of debt (89) (89)
Net income $7,393 $6,619 $1,391 ($5,524) $9,879
Net Income per share $ 0.18 $ 0.20
Distributions declared per
share $ 0.39 $ 0.39
Weighted Average shares
outstanding 42,100 7,617 49,717
</TABLE>
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<TABLE>
UNITED DOMINION REALTY TRUST, INC.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1993
(Unaudited)
(In thousands, except per share data)
ACQUISITIONS ACQUISITIONS
PREVIOUSLY REPORTED PREVIOUSLY REPORTED
ON FORM 8-K ON FORM 8-K ACQUISITIONS
DATED MAY 26, 1994 DATED APRIL 15, 1994 PREVIOUSLY REPORTED
(PORTFOLIO AND FORM 8-K ON FORM 8-K DATED PRO FORMA PRO
HISTORICAL(A) ACQUISITION)(B) DATED MAY 17, 1994(C) DECEMBER 31,1993(D) ADJUSTMENTS FORMA
<S> <C> <C> <C> <C> <C> <C>
Income
Property operations:
Rental income $89,084 $28,345 $10,459 $9,424 $137,312
Property expenses:
Utilities 7,838 2,461 555 846 11,700
Repairs and maintenance 13,950 4,439 1,407 1,407 21,203
Real estate taxes 5,777 1,975 850 780 9,382
Property management 2,782 1,413 446 422 ($863)(E) 4,200
Other operating expenses 7,512 4,489 1,275 1,552 (554)(F) 14,274
Depreciation of real
estate owned 19,764 7,846 (G) 27,610
57,623 14,777 4,533 5,007 6,429 88,369
Income from property
operations 31,461 13,568 5,926 4,417 (6,429) 48,943
Interest income 708 (438)(H) 270
32,169 13,568 5,926 4,417 (6,867) 49,213
Expenses
Interest 16,938 9,985 (I) 26,923
General and administrative 3,349 3,349
Other depreciation and
amortization 596 596
20,883 9,985 30,868
Income before gains on sales
ofinvestments and
extraordinary items 11,286 13,568 5,926 4,417 (16,852) 18,345
Gains (losses) on sale
of investments (89) (89)
Net income $11,197 $13,568 $5,926 $4,417 ($16,852) $18,256
Net Income per share $ 0.29 $ 0.39
Distributions declared per
share $ 0.70 $ 0.70
Weighted Average shares
outstanding 38,202 8,479 46,681
</TABLE>
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4
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UNITED DOMINION REALTY TRUST
NOTES TO PRO FORMA STATEMENTS OF OPERATIONS
JUNE 30, 1994
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited Pro Forma Statements of Operations
assumes the completion of (i) the sale of 8,479,400 shares of Common
Stock (which includes the July, 1994 sale of 479,400 shares exercised by
the underwriters) in a public offering at $14.25 per share, (ii) the
acquisition of 21 apartment communities on July 1, 1994, 3 apartment
communities on August 16, 1994 and 1 apartment community to be acquired
on or about November 1, 1994 from partnerships affiliated with the
Clover Financial Corporation, a New Jersey Corporation (previously
reported on Form 8-K dated May 26, 1994) (the "Portfolio Acquisition"),
(iii) the acquisition of five apartment communities purchased in 1994
(previously reported on Forms 8-K dated April 15, 1994 and May 17,
1994), and (iv) the acquisition of eleven apartment communities
previously reported on Form 8-K dated December 31, 1993, at the
beginning of each pro forma period presented. In addition, such Pro
Forma Statements of Operation also assume that approximately $59,444,000
of 10 year senior unsecured notes are outstanding for approximately 8
months for the year ended December 31, 1993 and 4 months for the six
months ended June 30, 1994. In management's opinion, all significant
adjustments necessary to reflect these transactions have been made. The
Pro Forma Statements of Operation should be read in conjunction with the
Trust's audited financial statements for the year ended December 31,
1993 and its unaudited financial statements for the six months ended
June 30, 1994.
The unaudited Pro Forma Statements of Operations are not
necessarily indicative of what the Trust's results would have been for
the six months ended June 30, 1994 and the year ended December 31, 1993
if the Common Stock offering and related acquisitions had been
consummated at the beginning of each period presented, nor do they
purport to represent the results of operations of the Trust for future
periods.
2. ADJUSTMENTS TO PRO FORMA STATEMENTS OF OPERATIONS
(A) Represents the Trust's Historical Statement of Operations contained in
its Quarterly Report on Form 10-Q for the six months ended June 30, 1994 and its
Annual Report on Form 10-K for the year ended December 31, 1993.
(B) Represents actual rental income and related operating expenses
of the Portfolio Acquisition for the full year ended December 31, 1993,
as reported on Form 8-K dated May 26, 1994. Represents actual rental
income and related operating expenses of the Portfolio Acquisition for
the six months ended June 30, 1994.
(C) Represents actual rental income and related operating expenses of five
apartment acquisitions, as previously reported on Forms 8-K dated April 15, 1994
and May 17, 1994.
(D) Represents the net adjustments required to allow for a full
year of actual rental income and related operating expenses for the
Trust's acquisitions reported on Forms 8-K during 1993.
(E) Reflects the net decrease in property management fees for the Portfolio
Acquisition and the Trust's 1994 and 1993 acquisitions. The Trust internally
manages its apartment portfolio at a cost of approximately 3% of rental income.
(F) Reflects the net decrease in insurance expense to reflect that the
Trust insures its apartments for approximately $107 per unit less than the
historical insurance expense of the Portfolio Acquisition.
(G) Represents the net adjustments to depreciation expense as outlined
below. Depreciation is computed on a straight-line basis over the estimated
useful lives of the related assets. Buildings were depreciated using a 35 year
life and other improvements using a 15 year useful life.
5
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<TABLE>
<CAPTION>
SIX MONTHS ENDED TWELVE MONTHS ENDED
JUNE 30, 1994 DECEMBER 31, 1993
<S> <C> <C>
Increase related to the Portfolio
Acquisition................................. $2,197,000 $ 4,393,000
Increase related to the acquisitions
previously reported on Form 8-K dated April
15, 1994 and Form 8-K dated May 17, 1994.... 312,000 1,943,000
Increase related to the acquisitions
previously reported on Form 8-K dated
December 31, 1993 1,510,000
Total.................................... $2,509,000 $ 7,846,000
</TABLE>
(H) Reflects the reduction of interest income associated with the
use of short-term investments to acquire the properties at assumed
interest rates in effect at the time of each respective acquisition. For
the year ended December 31, 1993, such acquisitions consist of the
Trust's 1993 acquisitions reported on Forms 8-K during 1993. For the six
months ended June 30, 1994, such acquisitions consist of the Portfolio
Acquisition.
(I) Reflects the additional interest expense associated with the increase
in bank lines of credit and the assumption of tax-exempt bonds on one of the
1994 property acquisitions and of two mortgage notes assumed to have been
incurred by the Trust to purchase (i) the Portfolio Acquisition at interest
rates and maturities which are currently available to the Trust, (ii) the 1994
apartment acquisitions at interest rates under the Trust's bank lines of credit
on the date of purchase, and (iii) the 1993 apartment acquisitions made by the
Trust at interest rates and maturities that were available at the time of each
acquisition as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED TWELVE MONTHS ENDED
JUNE 30, 1994 DECEMBER 31, 1993
<S> <C> <C>
Increase related to the Portfolio
Acquisition................................. $2,629,000 $ 5,259,000
Increase related to the acquisitions
previously reported on Form 8-K dated April
15, 1994 and Form 8-K dated May 17, 1994.... 895,000 3,183,000
Increase related to the acquisitions
previously reported on Form 8-K dated
December 31, 1993........................... 1,543,000
Total.................................... $3,524,000 $ 9,985,000
</TABLE>
6
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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.
UNITED DOMINION REALTY TRUST, INC.
Date: August 31, 1994 /s/ James Dolphin
James Dolphin, Senior Vice President
Chief Financial Officer
Date: August 31, 1994 /s/ Jerry A. Davis
Jerry A. Davis, Vice President
Controller
<TABLE>
Exhibit 99
United Dominion Realty Trust, Inc.
Compulation of Ratio of Earnings to Fixed Charges
(Dollar in thousands)
Year Ended Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31,
1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C>
Income before extraordinary item $ 5,572 $ 4,973 $ 3,604 $ 6,577 $11,197
Add:
Portion of rents representative
of the interest factor 37 47 103 126 143
Interest on indebtedness 9,934 9,435 11,859 11,697 16,938
Amortization of debt expense 51 80 59 122 321
Income as adjusted $15,594 $14,535 $15,625 $18,522 $28,599
Add:
Depreciation on real estate 8,762 10,464 12,845 15,732 19,764
Other depreciation and amortization 150 93 160 178 275
Other income (755) (34)
(Gains)losses on investments (1,433) (417) (26) 1,564 89
Other
Funds from operations as adjusted $22,318 $24,641 $28,604 $35,996 $48,727
Fixed charges-
Interest on indebtedness $ 9,934 $ 9,435 $11,859 $11,697 $16,938
Amortization of debt expense 51 80 59 122 321
Capitalized interest 717 597 291 73 0
Portion of rents representative
of the interest factor 37 47 103 126 143
Fixed Charges $10,739 $10,159 $12,312 $12,018 $17,402
Ratio of earnings to fixed charges 1.45x 1.43x 1.27x 1.54x 1.64x
Ratio of funds from operation to fixed charges 2.08 2.43 2.32 3.00 2.80
</TABLE>
<TABLE>
Six Six PRO FORMA
Months Months PRO FORMA Six Months
Ended Ended Year Ended Ended
June 30, June 30, December 31, June 30,
1993 1994 1993 1994
<S> <C> <C> <C> <C>
Income before extraordinary item $ 4,839 $ 7,482 $18,345 $ 9,968
Add:
Portion of rents representative
of the interest factor 68 78 155 84
Interest on indebtedness 8,387 10,474 26,923 13,998
Amortization of debt expense 158 152 321 152
Income as adjusted $13,452 $18,186 $45,744 $24,202
Add:
Depreciation on real estate 9,516 12,020 27,610 14,529
Other depreciation and amortization 258 371 275 371
Other income
(Gains)losses on investments 0 0 89 0
Other 450 450
Funds from operations as adjusted $23,226 $31,027 $73,718 $39,552
Fixed charges-
Interest on indebtedness $ 8,387 $10,474 $26,923 $13,998
Amortization of debt expense 158 152 321 152
Capitalized interest 0 0 0 0
Portion of rents representative
of the interest factor 68 78 155 84
Fixed Charges $ 8,613 $10,704 $27,399 $14,234
Ratio of earnings to fixed charges 1.56x 1.70x 1.67x 1.70x
Ratio of funds from operation to fixed charges 2.70 2.90 2.69 2.78
</TABLE>
