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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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) June 30, 1997
IRVINE APARTMENT COMMUNITIES, INC.
IRVINE APARTMENT COMMUNITIES, L.P.
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(Exact Name of Registrant as Specified in Its Charter)
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<S> <C> <C>
Maryland 1-12478 33-0698698
Delaware 0-22569 33-0587829
(State of Incorporation) (Commission File Number) (I.R.S. Employer Identification Number)
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550 Newport Center Drive, Suite 300, Newport Beach, California 92660
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 720-5500
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ITEM 2. ACQUISITION OF ASSETS
Irvine Apartment Communities, L.P. is a Delaware limited partnership (the
"Operating Partnership"). As of December 31, 1997, Irvine Apartment Communities,
Inc., a Maryland corporation (the "Company"), owned a 44.4% general partnership
interest in and was the sole general partner of the Operating Partnership.
On June 30, 1997, the Operating Partnership purchased a 923-unit apartment
community (the "Property") located in La Jolla, California from AOKI
Construction (CA) Co., Ltd. (the "Seller") for $127.0 million. $118.0 million of
the purchase price was funded by borrowings under the Operating Partnership's
$250 million unsecured line of credit. The balance of the purchase price was
paid in cash. Neither the Operating Partnership, the Company, any subsidiary of
the Company, any subsidiary of the Operating Partnership nor any director or
officer of the Company was affiliated with or had a material relationship with
the Seller. This current report on Form 8-K is being filed to include pro forma
financial information for the Company and the Operating Partnership for the year
ended December 31, 1997. Audited historical financial information for the
Property and pro forma financial information for the Company and the Operating
Partnership for the year ended December 31, 1996, were included in a current
report on Form 8-K of the Company and the Operating Partnership dated July 22,
1997 (filed on July 23, 1997).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
a. Pro Forma Consolidated Statement of Operations for the Year Ended
December 31, 1997
- Irvine Apartment Communities, Inc............................. 3
- Irvine Apartment Communities, L.P............................. 4
Notes to Pro Forma Consolidated Financial Statements ............ 5
b. Signatures ..................................................... 7
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Irvine Apartment Communities, Inc.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1997
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<CAPTION>
(unaudited, in thousands, except per share amounts) Historical Acquisition Pro Forma
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<S> <C> <C>
REVENUES
Rental income $181,902 $6,019 (a) $187,921
Other income 4,203 60 (a) 4,263
Interest income 840 840
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186,945 6,079 193,024
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EXPENSES
Property expenses 39,370 1,115 (b) 40,485
Real estate taxes 15,013 711 (c) 15,724
Property management fees 5,186 120 (d) 5,306
Interest expense, net 30,368 3,946 (e) 34,314
Amortization of deferred financing costs 2,369 2,369
Depreciation and amortization 29,309 1,394 (f) 30,703
General and administrative 6,747 6,747
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128,362 7,286 135,648
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INCOME BEFORE MINORITY INTEREST IN INCOME (LOSS) 58,583 (1,207) 57,376
Minority interest in income (loss) 32,179 (662)(g) 31,517
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NET INCOME (LOSS) $26,404 ($545) $25,859
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EARNINGS PER SHARE:
Basic $1.34 $1.32
Diluted $1.33 $1.31
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WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
Basic 19,656 19,656
Diluted 19,793 19,793
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</TABLE>
See accompanying notes.
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Irvine Apartment Communities, L.P.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
(unaudited, in thousands, except per unit amounts) Historical Acquisition Pro Forma
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<S> <C> <C>
REVENUES
Rental income $181,902 $6,019 (a) $187,921
Other income 4,203 60 (a) 4,263
Interest income 840 840
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186,945 6,079 193,024
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EXPENSES
Property expenses 39,370 1,115 (b) 40,485
Real estate taxes 15,013 711 (c) 15,724
Property management fees 5,186 120 (d) 5,306
Interest expense, net 30,368 3,946 (e) 34,314
Amortization of deferred financing costs 2,369 2,369
Depreciation and amortization 29,309 1,394 (f) 30,703
General and administrative 6,747 6,747
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128,362 7,286 135,648
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NET INCOME (LOSS) $58,583 ($1,207) $57,376
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ALLOCATION OF NET INCOME (LOSS):
General partner $26,404 ($545) $25,859
Limited partners $32,179 ($662)(g) $31,517
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EARNINGS PER UNIT:
Basic $1.34 $1.32
Diluted $1.34 $1.31
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WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING:
Basic 43,586 43,586
Diluted 43,723 43,723
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</TABLE>
See accompanying notes.
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Irvine Apartment Communities, Inc. and
Irvine Apartment Communities, L.P.
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
1. BASIS OF PRESENTATION
Irvine Apartment Communities, L.P. (the "Operating Partnership") acquired
a 923-unit apartment community (the "Property") located in La Jolla,
California on June 30, 1997. As of December 31, 1997, Irvine Apartment
Communities, Inc. (the "Company"), owned a 44.4% general partnership
interest in and was the sole general partner of the Operating Partnership.
The pro forma consolidated statements of operations of the Company and the
Operating Partnership are unaudited and have been prepared based on the
historical financial statements of the Company and the Operating
Partnership for the year ended December 31, 1997.
The unaudited pro forma consolidated statement of operations for the year
ended December 31, 1997, has been prepared based on the historical
operations of the Company and the Operating Partnership for such period as
if the acquisition of the Property occurred as of January 1, 1997. As the
Property was acquired on June 30, 1997, the results of operations of the
Property after June 30, 1997, are included in the historical operations of
the Company and the Operating Partnership and accordingly are not
reflected in the pro forma adjustments. In management's opinion, all
adjustments necessary to reflect the effect of the acquisition of the
Property have been made in the pro forma financial statements.
The pro forma information is not necessarily indicative of what the
Company's or the Operating Partnership's results of operations would have
been if the acquisition of the Property had occurred at the beginning of
the period presented, nor does it purport to project the Company's or the
Operating Partnership's results or operations at any future date or for
any future period.
The following information should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations
and all of the financial statements in the Company's and the Operating
Partnership's annual report on Form 10-K for the year ended December 31,
1997.
2. PRO FORMA ADJUSTMENTS
(a) Increase in rental income and other income reflects the operations of
the Property for the period indicated prior to the acquisition by the
Operating Partnership.
(b) Increase in property expenses reflects the operations of the Property
for the period indicated prior to the acquisition by the Operating
Partnership reduced for the estimated savings in property and
liability insurance expense in the amount of $28 for the year ended
December 31, 1997. It is the opinion of management that the Property
is adequately covered by insurance.
(c) Increase in real estate taxes for the period indicated prior to the
acquisition by the Operating Partnership based on an estimated
increase in the assessed value of the Property resulting from the
purchase.
(d) Increase in property management fees for the period indicated prior to
the acquisition by the Operating Partnership based on the negotiated
independent third party property management contract for the Property
in the amount of $20 per month.
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2. PRO FORMA ADJUSTMENTS (CONTINUED)
(e) Reflects additional interest expense for the period indicated prior to
the acquisition by the Operating Partnership associated with
borrowings used to finance the acquisition of the Property in the
amount of $118,000, calculated based on the interest rate in effect at
the time of the borrowing of 6.69%. A .125% change in the interest
rate of the variable rate borrowings used to finance the acquisition
of the Property would change pro forma interest expense by $147 for
the year ended December 31, 1997.
(f) Represents additional depreciation for the period indicated prior to
the acquisition by the Operating Partnership computed on a straight
line basis using (1) estimated remaining useful life of 40 years and
the depreciable cost basis of the Property ($102,863, excluding land
and personal property) and (2) estimated seven year useful life for
the related personal property ($1,500).
(g) Represents the portion of all preceding pro forma adjustments
attributable to the limited partners in the Operating Partnership
based on an average ownership interest of 54.83% for the six months
ended June 30, 1997 (date of acquisition of the Property).
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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.
IRVINE APARTMENT COMMUNITIES, INC.
Date: April 7, 1998 By: /s/ Shawn Howie
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Shawn Howie
Vice President, Corporate
Finance and Controller
IRVINE APARTMENT COMMUNITIES, L.P.
By: Irvine Apartment Communities,
Inc., its sole general partner
Date: April 7, 1998 By: /s/ Shawn Howie
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Shawn Howie
Vice President, Corporate
Finance and Controller
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