SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number: 1-12592
A. Full title of the Plan and the address of the Plan, if
different from that of the issuer named below:
WDN MANAGEMENT COMPANY
401(k) PLAN
B. Name of issuer of the securities held pursuant to the Plan and
the address of its principal executive offices:
WALDEN RESIDENTIAL PROPERTIES, INC.
One Lincoln Centre
5400 LBJ Freeway, Suite 400
Dallas, Texas 75240
<Page 1>
1. Financial Statements and Schedules
The financial statements and supplemental schedules for the
Plan have been prepared in accordance with the Employee Retirement
Income Security Act of 1974, and are filed as Exhibit 99.1 hereto
and incorporated by reference herein.
2. WDN Management Company 401(k) Plan
The Independent Auditors' Report with respect to the financial
statements and supplemental schedules of the WDN Management Company
401(k) Plan is set forth in such financial statements and
supplemental schedules filed as Exhibit 99.1 hereto and
incorporated by reference herein.
3. Exhibits
23.1 Consent of Deloitte & Touche LLP, Independent
Auditors.
99.1 WDN Management Company 401(k) Plan Financial
Statements and Supplemental Schedules.
<Page 2>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities
Exchange Act of 1934, Walden Residential Properties, Inc.,
successor to WDN Management Company, as Plan administrator of the
WDN Management Company 401(k) Plan, has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
WDN MANAGEMENT COMPANY 401(k) PLAN
Date: April 14, 1997 By: Walden Residential Properties, Inc.
Plan Administrator
By: / s / Mark S. Dillinger
-----------------------
Mark S. Dillinger
Executive Vice President
& Chief Financial Officer
<Page 3>
EXHIBIT INDEX
Exhibit No. Description
23.1 Consent of Deloitte & Touche LLP,
Independent Auditors.
99.1 WDN Management Company 401(k) Plan
Financial Statements and Supplemental
Schedules.
<Page E-1>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration
Statement No. 333-24247 of Walden Residential Properties, Inc. on
Form S-8 of our report dated April 10, 1997, included in this
Annual Report on Form 11-K of WDN Management Company 401(k) Plan,
for the year ended September 30, 1996.
/s/ Deloitte & Touche LLP
- -------------------------
DELOITTE & TOUCHE LLP
April 10, 1997
Dallas, Texas
<Page E-2>
Exhibit 99.1
------------------------------------------
WDN MANAGEMENT COMPANY 401(k) PLAN
Financial Statements and Supplemental Schedules
for the Year Ended September 30, 1996
and Independent Auditors' Report
------------------------------------------
<Page E-3>
WDN MANAGEMENT COMPANY 401(k) PLAN
TABLE OF CONTENTS
- ------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT Page
----
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Benefits,
September 30, 1996 E-5
Statement of Changes in Net Assets Available
for Benefits, for the Year Ended
September 30, 1996 E-6
Notes to Financial Statements E-7
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE
YEAR ENDED SEPTEMBER 30, 1996:
Item 27A - Schedule of Assets Held for
Investment Purposes E-12
Item 27D - Schedule of Reportable Transactions E-13
<Page E-4>
INDEPENDENT AUDITORS' REPORT
To the Trustees and Participants of
WDN Management Company 401(k) Plan
Dallas, Texas
We have audited the accompanying statement of net assets
available for benefits of WDN Management Company 401(k) Plan as of
September 30, 1996, and the related statement of changes in net
assets available for benefits for the year then ended. These
financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these
financial statements 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 statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. 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.
In our opinion, such financial statements present fairly, in
all material respects, the net assets available for benefits of the
WDN Management Company 401(k) Plan at September 30, 1996, and the
changes in net assets available for benefits for the year then
ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supplemental schedules listed in the Table of Contents are
presented for the purpose of additional analysis and are not a
required part of the basic financial statements, but are
supplementary information required by the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. The supplemental
information by fund in the statement of net assets available for
benefits and the statement of changes in net assets available for
benefits is presented for the purpose of additional analysis rather
than to present the net assets available for benefits and changes
in net assets available for benefits of the individual funds. The
supplemental schedules and supplemental information by fund are the
responsibility of the Plan's management. Such supplemental
schedules and supplemental information by fund have been subjected
to the auditing procedures applied in our audit of the basic
financial statements and, in our opinion, are fairly stated in all
material respects when considered in relation to the basic
financial statements taken as a whole.
/s/ Deloitte & Touche LLP
- -------------------------
DELOITTE & TOUCHE LLP
April 10, 1997
Dallas, Texas
<Page E-5>
WDN MANAGEMENT COMPANY 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Supplemental Information by Fund
------------------------------------------------------------------------------------------
Money Capital High Yield Total Walden Participant
Market Appreciation Convertible Value Corporate Bond Return Government Stock Loans Total Plan
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
- ------
Investments at fair value:
Walden Residential
Properties, Inc.common
stock $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ 66,607 $ -- $ 66,607
Mutual funds 5,346 170,117 13,555 95,315 11,037 23,524 26,684 -- -- 345,578
Participant loans -- -- -- -- -- -- -- -- 1,100 1,100
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total investments 5,346 170,117 13,555 95,315 11,037 23,524 26,684 66,607 1,100 413,285
Cash 11,218 -- -- -- -- -- -- -- -- 11,218
Receivables:
Employer's contribution 216,894 -- -- -- -- -- -- -- -- 216,894
Participants'
contributions 4,199 -- -- -- -- -- -- -- -- 4,199
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total receivables 221,093 -- -- -- -- -- -- -- -- 221,093
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
NET ASSETS AVAILABLE
FOR BENEFITS $237,657 $170,117 $ 13,555 $ 95,315 $ 11,037 $ 23,524 $ 26,684 $ 66,607 $ 1,100 $645,596
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
</TABLE>
<Page E-6>
WDN MANAGEMENT COMPANY 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Supplemental Information by Fund
-----------------------------------------------------------------------------------------
Money Capital High Yield Total Walden Participant
Market Appreciation Convertible Value Corporate Bond Return Government Stock Loans Total Plan
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Net appreciation
depreciation)
in fair value
of investments $ -- $ 16,589 $ 309 $ 4,872 $ 186 $ 1,640 $ (517) $ 3,582 $ -- $ 26,661
Dividend income 613 60 223 739 328 142 646 2,948 -- 5,699
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
613 16,649 532 5,611 514 1,782 129 6,530 -- 32,360
Employer contribution 216,894 -- -- -- -- -- -- -- -- 216,894
Participants' contribution 39,923 160,526 13,163 93,503 10,880 21,789 27,022 60,077 -- 426,883
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total additions 257,430 177,175 13,695 99,114 11,394 23,571 27,151 66,607 -- 676,137
Insurance premium
payments (19,773) -- -- -- -- -- -- -- -- (19,773)
Benefits paid to
participants -- (6,308) (140) (3,599) (357) (47) (317) -- -- (10,768)
Transfers -- (750) -- (200) -- -- (150) -- 1,100 --
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total deductions (19,773) (7,058) (140) (3,799) (357) (47) (467) -- 1,100 (30,541)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase 237,657 170,117 13,555 95,315 11,037 23,524 26,684 66,607 1,100 645,596
NET ASSETS AVAILABLE
FOR BENEFITS:
BEGINNING OF YEAR -- -- -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
END OF YEAR $237,657 $170,117 $ 13,555 $ 95,315 $ 11,037 $ 23,524 $ 26,684 $ 66,607 $ 1,100 $645,596
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
</TABLE>
<Page E-7>
WDN MANAGEMENT COMPANY 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 1996
- -----------------------------------------------------------------------
1. DESCRIPTION OF PLAN
The following description of the WDN Management Company 401(k)
Plan (the "Plan") provides only general information.
Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
General Plan Description
------------------------
The Plan was formed on October 1, 1995 and is a defined
contribution plan covering substantially all employees of WDN
Management Company (the "Company") and Walden Residential
Properties, Inc. ("Walden") who have one year of service and
are age 18 or older. The Company acted as the Plan
administrator and controlled and managed the operation and
administration of the Plan through December 31, 1996, at which
time the Company was merged with Walden and Walden became the
Plan administrator. For the year ended September 30, 1996,
Administrators Plan Services, Inc. sponsored the plan and two
executive officers of the Company and Walden served as the
trustees of the Plan. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974
(ERISA).
Contributions
-------------
Each year, participants may contribute up to 15% of pretax
annual compensation, as defined in the Plan. The Company
makes a discretionary matching contribution. For the Plan
year ended September 30, 1996, the matching contribution
represented 100% up to 6% and 50% up to 6% of eligible
compensation for the periods from October 1, 1995 through
March 31, 1996 and from April 1, 1996 through September 30,
1996, respectively.
Participant Accounts
--------------------
Each participant's account is credited with the participant's
contributions and withdrawals, as applicable, and allocations
of (a) the Company's contributions and (b) Plan earnings.
Allocations are based on participant earnings or account
balances, as defined. Forfeited balances of terminated
participants' nonvested accounts are used to reduce the
Company's future contributions. The benefit to which a
participant is entitled is the benefit that can be provided
from the participant's account.
At September 30, 1996, the Plan had a receivable of $221,093
for a matching contribution due from the Company and
participant contributions. Upon receipt, such amounts will be
allocated to participant accounts based upon the investment
options elected by each participant.
<Page E-8>
Vesting
-------
Participants are immediately vested in their contributions
plus actual earnings thereon. Vesting in the Company's
contribution portion of their accounts plus actual earnings
thereon is based on years of credited service. Vesting occurs
in accordance with the following table:
Years of Service % Vested
---------------- --------
less than 3 years 0%
3 years 20%
4 years 40%
5 years 60%
6 years 80%
after 7 years 100%
Investment Options
------------------
Upon enrollment in the Plan, a participant may direct employee
contributions in 1% increments in any of eight investment
options. The Company matching contributions are contributed
into the investment options elected for employee
contributions, except for the Walden Stock Fund.
Mainstay Money Market Fund - Investment in short-
term cash accounts which provides as high a level
of current income as is considered consistent
with the preservation of capital and liquidity.
Mainstay Capital Appreciation Fund - Invests in a
portfolio of equity securities with a focus on
long-term growth of capital. Dividend income, if
any, is an incidental consideration.
Mainstay Convertible Fund - Invests in a portfolio
of equity securities with a focus on capital
appreciation together with current income.
Mainstay Value Fund - Invests in equity securities
geared to maximize long-term total return from a
combination of capital growth and income.
Mainstay High Yield Corporate Bond Fund - Invests
in a diversified portfolio of high yield debt
securities with a focus on maximum current income
with capital appreciation as a secondary objective.
Mainstay Total Return Fund - Invests in a portfolio
of equity securities with the objective of
obtaining current income and a reasonable
opportunity for future growth of capital and
income.
Mainstay Government Fund - Invests in government
securities with the objective of a high level of
current income and the safety of the principal.
<Page E-9>
Walden Residential Properties, Inc. Common Stock
Fund ("Walden Stock Fund") - Funds are invested in
the common stock of Walden.
Participants may change or transfer their investments
options daily.
Loans to Participants
---------------------
Participants may borrow from their fund accounts up to 50% of
their account balance, with a minimum of $1,000 up to a
maximum of $50,000. Loan transactions are treated as a
transfer between the investment fund and the loan fund. Loan
terms range from 1 to 5 years or up to 25 years for the
purchase of a primary residence. The loans are secured by the
balance in the participant's account and bear interest at a
rate commensurate with local prevailing rates as determined
quarterly by the Plan administrator. Principal and interest
is paid ratably through biweekly payroll deductions.
Payment of Benefits
-------------------
On termination of service, a participant may elect to receive
either a lump-sum amount equal to the value of the
participant's vested interest in his or her account, or annual
installments beginning the first day of the month coincident
with the attainment of the normal retirement age, as defined.
Amounts payable to such participants at September 30, 1996
were $2,582.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Valuation of Investments
------------------------
The investments in the Walden Stock Fund are stated at fair
value based on closing sales prices reported on recognized
securities exchanges on the last business day of the Plan
year. The mutual funds are valued at quoted market prices
which represent the net asset values of shares held by the
Plan at year-end.
The loans to participants are valued at cost plus accrued
interest which approximates fair value.
Administrative Expenses
-----------------------
The Plan's expenses are paid by the Company. During the plan
year ended September 30, 1996, the Company paid $16,703 in
administrative expenses on behalf of the Plan.
<Page E-10>
3. INVESTMENTS EXCEEDING 5% OF NET ASSETS
The Plan's investments which exceeded 5% of net assets
available for benefits as of September 30, 1996 are as
follows:
<TABLE>
<S> <C>
Capital Appreciation Fund $170,117
Value Fund 95,315
Total Return Fund 23,524
Government Fund 26,684
Walden Stock Fund 66,607
</TABLE>
4. NET APPRECIATION IN FAIR VALUE OF INVESTMENTS
For the year ended September 30, 1996, the Plan's investments
(including investments bought, sold, as well as held during
the year) appreciated in value by $26,661, as follows:
<TABLE>
<CAPTION>
Year Ended
September 30, 1996
------------------
<S> <C>
Investments at Fair Value:
Mutual Funds $23,079
Walden Common Stock 3,582
-------
$26,661
=======
</TABLE>
5. PLAN TERMINATION
Although it has not expressed any intention to do so, the
Company has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject to
the provisions set forth in ERISA. In the event of any
termination of the Plan, or upon complete or partial
discontinuance of contributions, the accounts of each affected
participant shall become fully vested.
6. TAX STATUS
The Company believes that the Plan is currently designed and
is being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, no
provision for income taxes has been included in the Plan's
financial statements.
The Plan is in the process of filing a request to obtain a
determination letter from the Internal Revenue Service
indicating the Plan, as designed, is in compliance with the
applicable requirements of the Internal Revenue Code.
<Page E-11>
7. CHANGES IN THE PLAN
Effective October 1, 1996, the Plan was amended to adopt the
Delaware Charter Guarantee and Trust Company ("Delaware
Charter") prototype plan document and to name Delaware Charter
as the trustee. Effective December 31, 1996, the Company was
merged into Walden and Walden became the Plan administrator.
8. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for
benefits per the financial statements to the Form 5500 for the
Plan year ended September 30, 1996:
<TABLE>
<S> <C>
Net assets available for
benefits per the financial statements $645,596
Amounts allocated for benefits claims payable (2,582)
--------
Net assets available for benefits per the
Form 5500 $643,014
========
</TABLE>
The following is a reconciliation of benefits per the
financial statements to the Form 5500 as of year ended
September 30, 1996:
<TABLE>
<S> <C>
Benefits paid per the financial statements $ 10,768
Add amounts allocated to benefits due and
payable at September 30, 1996 2,582
--------
Benefits paid for the Form 5500 $ 13,350
========
</TABLE>
WDN MANAGEMENT COMPANY 401(k) PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Identity of Issue, Borrower, Current
Lessor or Similar Party Description of Investment Units/Shares Cost Value
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Equity Securities
- ------------------
Walden Residential
Properties, Inc. * Common Stock 3,153 $ 63,025 $ 66,607
Mutual Funds
- ------------------
NY Life Securities Mainstay Money Market Fund 5,346 5,346 5,346
Mainstay Capital Appreciation Fund 5,667 153,528 170,117
Mainstay Convertible Fund 949 13,246 13,555
Mainstay Value Fund 4,775 90,443 95,315
Mainstay High Yield Corporate Bond 1,335 10,851 11,037
Mainstay Total Return Fund 1,166 21,884 23,524
Mainstay Government Fund 3,352 27,201 26,684
-------- --------
Total Mutual Funds 322,499 345,578
Participant Loans Loan Maturing September 10, 1999;
- ----------------- Interest Rate of 10.25% per Annum -- 1,100 1,100
-------- --------
TOTAL INVESTMENTS $385,524 $412,185
======== ========
</TABLE>
* Known to be a party-in-interest.
<Page E-13>
WDN MANAGEMENT COMPANY 401(k) PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Purchases Sales
----------------------- --------------------------------------------
Identity of #of Purchase # of Selling Cost of Net Gain
Party Involved Description of Asset Transactions Price Transactions Price Asset or (Loss)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NY Life Securities Common Stock 37 $310,657 27 $305,924 $305,924 $ --
Mainstay Capital Appreciation Fund 29 162,273 13 8,805 8,454 351
Mainstay Convertible Fund 25 13,641 3 618 612 6
Mainstay Total Value Fund 28 94,545 12 4,841 4,655 186
Mainstay High Yield Corporate
Bond Fund 23 10,819 6 296 298 (2)
Mainstay Total Return Fund 24 21,902 3 160 157 3
Mainstay Government Fund 25 28,514 12 1,959 2,009 (50)
Bank of Boston Walden Residential Properties, Inc. * 10 60,077 -- -- -- --
</TABLE>
* Known to be a party-in-interest.
