SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 2
PURSUANT TO SECTION 12, 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 16, 1996
WALDEN RESIDENTIAL PROPERTIES, INC.
(Exact name of Registrant as specified in its Charter)
MARYLAND
(State of other jurisdiction
of incorporation or
organization)
1-12592
(Commission file number)
75-2506197
(I.R.S. Employer Identification Number)
One Lincoln Centre
5400 LBJ Freeway, Suite 400
Dallas, Texas 75240
(Address of principal executive offices)
Registrant's telephone number,
including area code: (972) 788-0510
Not Applicable
(Former name or former address, if changed since last report)
WALDEN RESIDENTIAL PROPERTIES, INC.
Explanatory Note . . . . . . . . . . . . . . . . . . . . . . . .3
Item 2. Acquisition or Disposition of Assets . . . . . . . . .4
Item 7. Financial Statements and Exhibits
a. Financial Statements of Audited Acquisition
Properties
Independent Auditors' Report. . . . . . . . . . .7
Statements of Revenues and Certain Expenses for
the Six Months Ended June 30, 1996 (Unaudited) and
for the Year Ended December 31, 1995. . . . . . .8
Notes to Statements of Revenues and Certain
Expenses. . . . . . . . . . . . . . . . . . . . .9
b. Pro Forma Financial Information of Walden
Residential Properties, Inc.
Pro Forma Condensed Consolidated Balance Sheet
as of June 30, 1996 (Unaudited) . . . . . . . . 11
Pro Forma Condensed Consolidated Statement of
Income for the Six Months Ended June 30, 1996
(Unaudited) . . . . . . . . . . . . . . . . . . 13
Pro Forma Condensed Consolidated Statement of
Income for the Year Ended December 31, 1995
(Unaudited) . . . . . . . . . . . . . . . . . . 15
EXPLANATORY NOTE
Walden Residential Properties, Inc., a Maryland corporation,
hereby amends its Form 8-K dated September 16, 1996, and filed
with the Securities and Exchange Commission on October 1, 1996,
as follows:
Walden Residential Properties, Inc., hereby submits the Financial
Statements required for the properties acquired in 1996 as
described in Items 2 and 7.
Item 2. Acquisition or Disposition of Assets
Acquisitions
- ------------
Between June 4, 1996 and September 23, 1996, Walden Residential
Properties, Inc. (the "Company"), acquired the following
properties (the "Acquisition Properties"):
<TABLE>
<CAPTION>
Occupancy
Acquisition Acquisition at
Property Location Units Price Date Acquisition
- -------- -------- ----- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Terra Vida Mesa, AZ 384 $ 15,300,000 06/04/96 90%
Villas of St. Moritz San Antonio, TX 216 6,100,000 06/27/96 84%
Remington San Antonio, TX 158 4,800,000 06/27/96 90%
Costa del Sol San Antonio, TX 244 7,300,000 06/27/96 92%
Summer Oaks San Antonio, TX 256 6,400,000 06/27/96 91%
Ashbury Parke Austin, TX 416 13,500,000 06/28/96 89%
Cozumel Jacksonville, FL 224 6,900,000 08/07/96 98%
Princeton Meadows I Jacksonville, FL 218 7,600,000 08/13/96 94%
Brandywine Nashville, TN 300 9,000,000 08/27/96 95%
Raintree Melbourne, FL 210 6,400,000 09/03/96 94%
Princeton Meadows II Jacksonville, FL 226 7,800,000 09/03/96 92%
Quayle Walk Arlington, TX 218 6,400,000 09/16/96 94%
Timber Creek Arlington, TX 160 4,900,000 09/16/96 95%
Waterford Plano, TX 350 13,600,000 09/23/96 96%
----- ------------
3,580 $116,000,000
===== ============
</TABLE>
<TABLE>
<CAPTION>
Property Seller
- -------- ------
<S> <C>
Terra Vida Mid-America Apartment Communities
Villas of St. Moritz IBEX St. Moritz Corp.
Remington IBEX Remington Corp.
Costa del Sol IBEX Costa del Sol Corp.
Summer Oaks IBEX Summer Oaks Corp.
Ashbury Parke Western America Exchange Corp.
Cozumel Cozumel Associates, Ltd.
Princeton Meadows I TE-TWO Real Estate Limited Partnership
Brandywine Woodwinds, Ltd. (Affiliate)
Raintree Florida Raintree I Associates, Ltd.
Princeton Meadows II Florida Princeton Meadows II Associates
Quayle Walk Quayle Walk Apartments Partners
Timber Creek Timber Creek Apartments Partners
Waterford Waterford Apartments Partners
</TABLE>
NOTE: The Company combined Princeton Meadows I and Princeton
Meadows II at the date of purchase and will present them
as one property going forward.
The above acquisitions were financed as follows:
<TABLE>
<CAPTION>
Source Date Funds
- ------ ---- -----
<S> <C> <C>
Preferred Stock Offering 04/26/96 $ 43,600,000
Bonds Assumed on Purchase of Terra Vida 06/04/96 7,600,000
Common Stock Offering 08/27/96 29,600,000
Common Stock Over Allotment 09/03/96 3,000,000
Property Sales Various 23,400,000
Credit Facility Various 8,800,000
------------
$116,000,000
============
</TABLE>
Except for Woodwinds, Ltd., (the Seller of Brandywine), the
Sellers are not affiliated with the Company, any director or
officer of the Company or any associate of any such director or
officer. The Properties were previously operated by the Sellers
as multifamily apartment properties, and it is the intent of the
Company to continue to operate the Acquisition Properties as
multifamily apartment properties. Brandywine was purchased from
an affiliate of the Company. All of such proceeds received from
the sale were utilized to retire all liabilities of the property.
Therefore, no proceeds from the sale of this property were
retained by such affiliate.
The purchase prices, which were negotiated with the Sellers, were
determined through internal analysis by the Company of historical
cash flows and fair market values of the Acquisition Properties
with adjustments for the Company's estimates of the cost of
operation.
Dispositions
- ------------
Between April 24, 1996 and September 27, 1996, Walden Residential
Properties, Inc. (the "Company"), disposed of the following
properties:
<TABLE>
<CAPTION>
Disposition Disposition
Property Location Units Price Date
- -------- -------- ----- ----------- -----------
<S> <C> <C> <C> <C>
Northwest Territory Wichita, KS 384 $ 8,400,000 04/24/96
Christiwood Corpus Christi, TX 304 9,200,000 08/30/96
Chimney Trace Stone Mountain, GA 144 5,800,000 09/27/96
--- -----------
832 $23,400,000
=== ===========
</TABLE>
<TABLE>
<CAPTION>
Property Purchaser
- -------- ---------
<S> <C>
Northwest Territory Floyd R. Hardesty
Christiwood Christiwood Apartments L.L.P.
Chimney Trace RCP Chimney Trace, L.L.C.
</TABLE>
The Purchasers are not affiliated with the Company, any director
or officer of the Company or any associate of any such director
or officer.
The sales prices, which were negotiated with the Purchasers, were
determined through internal analysis by the Company of historical
cash flows and fair market values of the disposed Properties with
adjustments for the Company's estimates of the cost of operation.
Item 7. Financial Statements and Exhibits
The undersigned Registrant hereby submits the Financial
Statements for the Acquisition Properties referred to in Item 2.,
except for Terra Vida, Princeton Meadows I and Brandywine, which
were not audited (the "Audited Acquisition Properties").
a. Financial Statements
Statements of Revenues and Certain Expenses of the
Audited Acquisition Properties for the six months ended
June 30, 1996 (unaudited) and for the year ended December
31, 1995, notes to the financial statements and the
report of Deloitte & Touche LLP with respect to the
Statement of Revenues and Certain Expenses for the year
ended December 31, 1995, are presented on pages 7 through 9.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
of Walden Residential Properties, Inc.
We have audited the accompanying combined statement of
revenues and certain expenses (defined as being operating
revenues less direct operating expenses) of Villas of St. Moritz,
Remington, Costa del Sol, Summer Oaks, Ashbury Parke, Cozumel,
Princeton Meadows II, Raintree, Quayle Walk, Timber Creek and
Waterford (the "Audited Acquisition Properties") for the year
ended December 31, 1995. This financial statement is the
responsibility of the management of Walden Residential
Properties, Inc. Our responsibility is to express an opinion of
this 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 combined statement of revenues and certain expenses 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 combined statement of revenues and certain
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 Walden Residential Properties, Inc.
Material amounts, described in Note 1 to the combined statement
of revenues and certain expenses, that would not be comparable to
those resulting from the proposed future operations of the
Acquisition Properties are excluded and the statement is not
intended to be a complete presentation of the revenues and
expenses of these apartments.
In our opinion, such combined statement of revenues and
certain expenses presents fairly, in all material respects, the
revenues and certain expenses, as defined above, of the Audited
Acquisition Properties for the year ended December 31, 1995, in
conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
Dallas, Texas
November 1, 1996
AUDITED ACQUISITION PROPERTIES
COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1996 December 31, 1995
---------------- -----------------
(unaudited)
<S> <C> <C>
Revenues
Rental income. . . . . . . . . . . . . . . $ 7,390 $14,435
Other property income. . . . . . . . . . . 283 551
------- -------
Total revenues. . . . . . . . . . . . . 7,673 14,986
------- -------
Certain Expenses
Property operating and maintenance . . . . 2,920 5,865
Real estate taxes. . . . . . . . . . . . . 855 1,632
Management fees. . . . . . . . . . . . . . 367 721
------- -------
Total expenses. . . . . . . . . . . . . 4,142 8,218
------- -------
Revenues in Excess of Certain Expenses . . . $ 3,531 $ 6,768
======= =======
</TABLE>
See Notes to Combined Statements of Revenues and Certain Expenses
AUDITED ACQUISITION PROPERTIES
NOTES TO COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
Note 1 - Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation. The combined operating revenues and
direct operating expenses of the twelve properties described in
Note 2 (the "Audited Acquisition Properties") are presented on
the accrual basis of accounting. The accompanying financial
statements are not representative of the actual operations for
the periods presented as certain expenses, which may not be
comparable to the expenses expected to be incurred by Walden
Residential Properties, Inc., in the proposed future operations
of the Audited Acquisition Properties, have been excluded.
Expenses excluded consist of interest, depreciation and
amortization, professional fees, and other costs not directly
related to the future operations of the Audited Acquisition
Properties.
Income Recognition. Rental income is recorded when it is
earned and due from tenants. Apartment units are rented under
lease agreements with terms of one year or less.
Management Fees. The Audited Acquisition Properties have
various management agreements with affiliated and unaffiliated
management companies to maintain and manage the operations of the
apartment complexes. Management fees are based on a range of 4%
to 5% of total income collected.
Note 2 - Description of the Audited Acquisition Properties
The following Audited Acquisition Properties are included in
the combined statement of revenues and certain expenses:
<TABLE>
<CAPTION>
Number
Property Location of Units
- -------- -------- --------
<S> <C> <C>
Villas of St. Moritz San Antonio, Texas 216
Remington San Antonio, Texas 158
Costa del Sol San Antonio, Texas 244
Summer Oaks San Antonio, Texas 256
Ashbury Parke Austin, Texas 416
Cozumel Jacksonville, Florida 224
Princeton Meadows II Jacksonville, Florida 226
Raintree Melbourne, Florida 210
Quayle Walk Arlington, Texas 218
Timber Creek Arlington, Texas 160
Waterford Plano, Texas 350
-----
2,678
=====
Item 7. Financial Statements and Exhibits
b. Pro Forma Financial Information
The following June 30, 1996, unaudited Pro Forma
Condensed Balance Sheet of Walden Residential Properties,
Inc., (the "Company") reflects the June 30, 1996 Balance
Sheet adjusted for (1) the acquisition of the eight
properties acquired between August 7, 1996 and September
23, 1996, (see Item 2.), (2) the sale of two properties
sold between August 30, 1996 and September 27, 1996 (see
Item 2.), (3) the sale of 1,680,250 shares of Common
Stock on August 27, 1996, and (4) the estimated Credit
Facility borrowings necessary to finance the
acquisitions.
The following unaudited Pro Forma Condensed Consolidated
Statements of Income for the six months ended June 30, 1996,
and the twelve months ended December 31, 1995, were prepared
from the financial statements of the Company by adjusting
for properties acquired or disposed of through September
23, 1996, including the related debt or stock offerings
used to finance the acquisitions, debt that was repaid
from the proceeds of dispositions, or estimated Credit
Facility borrowings as described above as if all of these
transactions had occurred on January 1, 1996, and 1995,
respectively. This is not necessarily indicative of what
the performance would have been had the Company owned
these properties for the entire period, nor does it
purport to represent future results of operations of the
Company.
WALDEN RESIDENTIAL PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 1996
(Unaudited)
(In thousands)
</TABLE>
<TABLE>
<CAPTION>
Historical Acquisitions/Sales/Offerings Pro Forma
---------- ---------------------------- ---------
<S> <C> <C> <C>
ASSETS
Real estate assets -- net. . . . . . . . $515,549 $ 62,600 (a) $578,149
Real estate held for sale. . . . . . . . 13,744 (13,744) (b) --
Receivable from and investment
in WDN Management . . . . . . . . . . 1,072 1,072
Other assets . . . . . . . . . . . . . . 8,373 (338) (c) 8,035
Cash and cash equivalents. . . . . . . . 3,241 3,241
Restricted cash. . . . . . . . . . . . . 15,536 (8,300) (d) 7,236
-------- -------- --------
Total assets. . . . . . . . . . . . . $557,515 $ 40,218 $597,733
======== ======== ========
LIABILITIES
Mortgage notes payable . . . . . . . . . 256,409 (4,206) (e) 252,203
Credit facility. . . . . . . . . . . . . 16,000 10,788 (f) 26,788
Other liabilities. . . . . . . . . . . . 14,173 800 (g) 14,973
-------- -------- --------
Total liabilities . . . . . . . . . . 286,582 7,382 293,964
-------- -------- --------
STOCKHOLDERS' EQUITY
Convertible equity securities. . . . . . 18,608 18,608
Common stock . . . . . . . . . . . . . . 141 17 (h) 158
Preferred stock. . . . . . . . . . . . . 18 18
Additional paid in capital . . . . . . . 281,413 32,583 (h) 313,996
Notes receivable from Company Officers . (5,263) (5,263)
Distributions in excess of net income. . (23,984) 236 (i) (23,748)
-------- -------- --------
Total stockholders' equity. . . . . . 270,933 32,836 303,769
-------- -------- --------
Total liabilities and
stockholders' equity . . . . . . . $557,515 $ 40,218 $597,733
======== ======== ========
</TABLE>
(a) Represents properties acquired between August 7, 1996 and
September 23, 1996.
(b) Represents properties sold between August 30, 1996 and
September 27, 1996.
(c) Represents write off of amortizable assets related to
mortgage on property sold on September 27, 1996, (-$488)
net of security deposit escrows required on acquisition
properties ($150).
(d) Represents application of escrowed proceeds of April 24,
1996, property sale applied to acquisition of properties
in August and September 1996.
(e) Represents mortgage assumed by purchaser on property sold
on September 27, 1996.
(f) Represents estimated draws on Credit Facility to finance
acquisitions between August 7, 1996 and September 23,
1996.
(g) Represents Real Estate Tax Liabilities and Security
Deposit Liabilities that would be assumed had the
properties acquired between August 7, 1996 and September
23, 1996 been acquired on June 30, 1996.
(h) Represents Sale of Common Stock on August 27, 1996, used
to finance acquisitions.
(i) Represents net gain on sale of properties sold between
August 30, 1996 and September 27, 1996 ($724) net of
write off of amortizable assets related to the September
27, 1996 sale (-$488).
WALDEN RESIDENTIAL PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Six Months Ended June 30, 1996
(Unaudited)
(In thousands, except per share information)
<TABLE>
<CAPTION>
1996 (a) Sales Pro Forma 6/30/96
Historical Acquisitions (b) Adjustments Pro Forma
---------- ------------ ----- ----------- ---------
<S> <C> <C> <C> <C> <C>
REVENUES
Rental income. . . . . . . . . . . . . $48,570 $ 9,784 $(1,921) $ $56,433
Other property income. . . . . . . . . 1,746 384 (62) 2,068
Interest income. . . . . . . . . . . . 719 (349) (c) 370
Income from WDN Management . . . . . . 202 202
------- -------- ------- ------ -------
Total revenues. . . . . . . . . . . 51,237 10,168 (1,983) (349) 59,073
------- -------- ------- ------ -------
EXPENSES
Property operating and maintenance . . 17,471 3,764 (688) 20,547
Real estate taxes. . . . . . . . . . . 4,649 1,009 (146) 5,512
General and administrative . . . . . . 2,406 2,406
Interest . . . . . . . . . . . . . . . 9,687 649 (d) 10,336
Financing costs and amortization . . . 394 30 (e) 424
Depreciation . . . . . . . . . . . . . 9,265 1,229 (f) 10,494
------- ------- ------- ------ -------
Total expenses. . . . . . . . . . . 43,872 4,773 (834) 1,908 49,719
------- ------- ------- ------- -------
Net income before preferred
distribution. . . . . . . . . . . . . $ 7,365 $ 5,395 $(1,149) $(2,257) 9,354
======= ======= ======= =======
Income allocated to Convertible
Equity Securities . . . . . . . . . . (3,003)
-------
Net income . . . . . . . . . . . . . . . $ 6,351
=======
Net income per share . . . . . . . . . . $ 0.40
=======
Weighted average shares of common stock. 15,859
=======
</TABLE>
(a) Represents historical revenues and certain expenses for
properties acquired in 1996 from January 1, 1996, through
the earlier of June 30, 1996, or date of acquisition,
excludes third party management fees.
(b) Represents historical revenues and expenses on properties
sold in 1996 from January 1, 1996, through the earlier of
June 30, 1996, or date of sale.
(c) Represents pro forma adjustment for interest earned on
escrowed funds which were used for 1996 acquisitions.
(d) Represents pro forma adjustment required to present
interest expense as if the debt reflected on the pro
forma condensed consolidated balance sheet at June 30,
1996, had been outstanding for the entire period at the
then applicable rates.
(e) Represents pro forma adjustment required to present
financing costs and amortization expense as if the
amortizable assets on the pro forma condensed
consolidated balance sheet at June 30, 1996, had been in
place for the entire period.
(f) Represents pro forma adjustment required to present
depreciation expense as if the depreciable assets on the
pro forma condensed consolidated balance sheet at June
30, 1996, had been in place for the entire period.
WALDEN RESIDENTIAL PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Year Ended December 31, 1995
(Unaudited)
(In thousands, except per share information)
<TABLE>
<CAPTION>
1995 (a) 1996 (b) Sales Pro Forma 12/31/95
Historical Acquisitions Acquisitions (c) Adjustments Pro Forma
---------- ------------ ------------ ----- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
REVENUES
Rental income. . . . . . $78,469 $16,072 $19,490 $(5,613) $ $108,418
Other property income. . 3,090 621 819 (198) 4,332
Interest income. . . . . 856 856
Income from WDN
Management. . . . . . 409 409
------- ------- ------- ------- ------- --------
Total revenues. . . . 82,824 16,693 20,309 (5,811) -- 114,015
------- ------- ------- ------- ------- --------
EXPENSES
Property operating
and maintenance . . . 28,748 5,870 7,814 (1,928) 40,504
Real estate taxes. . . . 7,337 1,806 1,958 (455) 10,646
General and
administrative. . . . 3,811 56 (d) 3,867
Interest . . . . . . . . 17,111 3,881 (e) 20,992
Financing costs and
amortization . . . . . 900 (52)(f) 848
Depreciation . . . . . . 15,734 5,254 (g) 20,988
------- ------- ------- ------- ------- --------
Total expenses. . . . 73,641 7,676 9,772 (2,383) 9,139 97,845
Net income before
preferred distribution. $ 9,183 $ 9,017 $10,537 $(3,428) $(9,139) 16,170
======= ======= ======= ======= =======
Income allocated to
Convertible Equity
Securities. . . . . . . (6,006)
---------
Net income . . . . . . . . 10,164
=========
Net income per share . . . $ 0.65
=========
Weighted average shares
of common stock . . . . 15,606
=========
</TABLE>
(a) Represents historical revenues and certain expenses for
properties acquired in 1995 from January 1, 1995, through
the earlier of December 31, 1995, or date of acquisition,
excludes third party management fees.
(b) Represents historical revenues and certain expenses for
properties acquired in 1996 for the year ended December
31, 1995, excludes third party management fees.
(c) Represents historical revenues and expenses on properties
sold in 1995 and 1996 from the later of January 1, 1995,
or date of purchase through the earlier of December 31,
1995, or date of sale.
(d) Represents pro forma adjustment for administrative fees
on properties purchased in 1995.
(e) Represents pro forma adjustment required to present
interest expense as if the debt reflected on the pro
forma condensed consolidated balance sheet at June 30,
1996, had been outstanding for the entire period at the
then applicable rates.
(f) Represents pro forma adjustment required to present
financing costs and amortization expense as if the
amortizable assets on the pro forma condensed
consolidated balance sheet at June 30, 1996, had been in
place for the entire period.
(g) Represents pro forma adjustment required to present
depreciation expense as if the depreciable assets on the
pro forma condensed consolidated balance sheet at June
30, 1996, had been in place for the entire period.
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 thereunto duly authorized.
WALDEN RESIDENTIAL PROPERTIES, INC.
/ s / Mark S. Dillinger November 8, 1996
- ------------------------ ----------------
Mark S. Dillinger Date
Executive Vice President,
Chief Financial Officer and Director
(Principal Financial and Accounting Officer)
