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 December 31, 1998
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:
WALDEN RESIDENTIAL PROPERTIES, INC.
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.
5080 Spectrum Drive
Suite 1000 East
Addison, Texas 75001-6410
<PAGE>
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. Walden Residential Properties, Inc.
The Independent Auditors' Report with respect to the financial
statements and supplemental schedules of the Walden Residential
Properties, Inc. 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 Walden Residential Properties, Inc. 401(k) Plan
Financial Statements and Supplemental Schedules.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities
Exchange Act of 1934, Walden Residential Properties, Inc., as Plan
administrator of the Walden Residential Properties, Inc. 401(k)
Plan, has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WALDEN RESIDENTIAL PROPERTIES, INC.
401(k) PLAN
Date: August 25, 1999 By: Walden Residential Properties, Inc.
-----------------------------------
Plan Administrator
By: / s / Mark S. Dillinger
---------------------------
Mark S. Dillinger
Executive Vice President
& Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
23.1 Consent of Deloitte & Touche LLP,
Independent Auditors.
99.1 Walden Residential Properties, Inc.
401(k) Plan Financial Statements and
Supplemental Schedules.
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 August 4, 1999, included in this
Annual Report on Form 11-K of Walden Residential Properties, Inc.
401(k) Plan, for the year ended December 31, 1998.
/ s / Deloitte & Touche LLP
- -----------------------------
DELOITTE & TOUCHE LLP
August 25 , 1999
Dallas, Texas
Exhibit 99.1
- -------------------------------------------------------------------------
WALDEN RESIDENTIAL PROPERTIES, INC. 401(k) PLAN
Financial Statements for the Year Ended December 31, 1998 and
the three month period ended December 31, 1997 and the Year Ended
September 30, 1997, Supplemental Schedules as of December 31, 1998
and 1997 and for the Year Ended December 31, 1998 and the three month
period ended December 31, 1997 and Independent Auditors' Report.
- --------------------------------------------------------------------------
WALDEN RESIDENTIAL PROPERTIES, INC. 401(k) PLAN
TABLE OF CONTENTS
Page
----
INDEPENDENT AUDITORS' REPORT E-3
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits,
December 31, 1998 and 1997 and September 30, 1997 E-4
Statement of Changes in Net Assets Available for Benefits,
for the Year Ended December 31, 1998, and Three Month
Period Ended December 31, 1997 and the Year Ended
September 30, 1997 E-7
Notes to Financial Statements E-10
SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1998 AND 1997 AND FOR THE
YEAR ENDED DECEMBER 31, 1998 AND THE THREE MONTH PERIOD ENDED
DECEMBER 31, 1997:
Item 27A - Schedule of Assets Held for Investment Purposes E-16
Item 27B - Schedule of Defaulted Loans E-18
Item 27D - Schedule of Reportable Transactions E-19
INDEPENDENT AUDITORS' REPORT
------------------------------
To the Trustees and Participants of
Walden Residential Properties, Inc. 401(k) Plan
Dallas, Texas
We have audited the accompanying statements of net assets available for benefits
of Walden Residential Properties, Inc. 401(k) Plan as of December 31, 1998
and 1997 and September 30, 1997 and the related statements of changes in net
assets available for benefits for the year ended December 31, 1998, the three
month period ended December 31, 1997 and the year ended September 30, 1997.
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 audits.
We conducted our audits 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 audits provide 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 Walden Residential
Properties, Inc. 401(k) Plan at December 31, 1998 and 1997 and September
30, 1997, and the changes in net assets available for benefits for the year
ended December 31, 1998, the three month period ended December 31, 1997 and
the year ended September 30, 1997 in conformity with generally accepted
accounting principles.
Our audits were 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 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
August 4, 1999
Dallas, Texas
<TABLE>
<CAPTION>
WALDEN RESIDENTIAL PROPERTIES, INC. 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998
Supplemental Information by Fund
----------------------------------------------------------------------------------------------
High Yield
Money Capital Corporate Total Janus
Market Appreciation Convertible Value Bond Return Government Janus Worldwide
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at fair value:
Walden Residential
Properties, Inc.
common stock $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
Mutual funds 431,699 1,332,430 -- 723,830 172,250 135,365 223,699 539,729 425,903
Participant loans -- -- -- -- -- -- -- -- --
-------- ----------- ------- ---------- ------- -------- ------- -------- --------
Total investments 431,699 1,332,430 -- 723,830 172,250 135,365 223,699 539,729 425,903
Cash -- -- -- -- -- -- -- -- --
Contributions receivable:
Employer 4,813 25,055 -- 13,651 4,644 3,423 3,385 4,035 2,706
Participant 5,061 26,031 -- 15,256 5,498 3,601 3,831 4,195 2,793
-------- ---------- ------ -------- -------- -------- -------- -------- --------
NET ASSETS
AVAILABLE
FOR BENEFIT $441,573 $1,383,516 $ -- $752,737 $182,392 $142,389 $230,915 $547,959 $431,402
======== ========== ====== ======== ======== ======== ======== ======== ========
-------------------
Walden Partipant Total
Stock Loans Plan
-----------------------------
<S> <C> <C> <C>
ASSETS
_____
Investments at fair value:
Walden Residential
Properties, Inc.
common stock $284,648 $ -- $ 284,648
Mutual funds -- -- 3,984,905
Participate loans -- 155,092 155,092
-------- --------- ----------
Total investments 284,648 155,092 4,424,645
Cash 7,054 -- 7,054
Contributions receivable:
Employer 8,151 -- 69,863
Participant 8,897 -- 75,163
-------- -------- ----------
NET ASSETS
AVAILABLE
FOR BENEFITS $308,750 $155,092 $4,576,725
======== ======== ==========
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
WALDEN RESIDENTIAL PROPERTIES, INC. 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
Supplemental Information by Fund
---------------------------------------------------------------------------
High Yield
Money Capital Corporate Total
Market Appreciation Convertible Value Bond Return Government
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
- -------
Investments at fair value:
Walden Residential
Properties, Inc.
common stock $ -- $ -- $ -- $ -- $ -- $ -- $ --
Mutual funds 54,266 550,349 2,800 319,416 56,986 70,125 89,607
Participant loans -- -- -- -- -- -- --
------- -------- ------- --------- ------- ------- -------
Total investments 54,266 550,349 2,800 319,416 56,986 70,125 89,607
Cash -- -- -- -- -- -- --
Contributions receivable:
Employer 4,348 31,258 -- 17,796 5,360 4,181 3,822
Participant 4,160 38,129 -- 21,511 5,888 4,587 4,566
-------- --------- -------- --------- ------- ------- -------
NET ASSETS
AVAILABLE FOR
BENEFITS $62,774 $619,736 $2,800 $358,723 $68,234 $78,893 $97,995
======== ======== ======= ======== ======= ======= =======
----------------------------
Walden Participant Total
Stock Loans Plan
----------------------------------------
<S> <C> <C> <C>
ASSETS
- ------
Investment at fair value:
Walden Residential
Properties, Inc.
common stock $198,856 $ -- $ 198,856
Mutual funds -- -- 1,143,549
Participant loans -- 33,346 33,346
--------- --------- -----------
Total investments 198,856 33,346 1,375,751
Cash 17,774 -- 17,774
Contributions receivable:
Employer 10,421 -- 77,186
Participant 80 -- 78,921
-------- -------- -----------
NET ASSETS
AVAILABLE FOR
BENEFITS $227,131 $33,346 $1,549,632
======== ======= ==========
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
WALDEN RESIDENTIAL PROPERTIES, INC. 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
SEPTEMBER 30, 1997
Supplemental Information by Fund
---------------------------------------------------------------------------------
High Yield
Money Capital Corporate Total
Market Appreciation Convertible Value Bond Return Government
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
- ------
Investments at fair value:
Walden Residential
Properties, Inc.
common stock $ -- $ -- $ -- $ -- $ -- $ -- $ --
Mutual funds 26,943 475,954 33,705 277,306 40,993 50,778 73,940
Participant loans -- -- -- -- -- -- --
--------- -------- -------- ---------- ------- -------- -------
Total investments 26,943 475,954 33,705 277,306 40,993 50,778 73,940
Cash -- -- -- -- -- -- --
Contributions
receivable-employer -- 44,274 2,880 30,367 5,848 5,177 10,157
---------- --------- ------- --------- -------- ------- -------
NET ASSETS
AVAILABLE FOR
BENEFITS $26,943 $520,228 $36,585 $307,673 $46,841 $55,955 $84,097
=========== ======== ======= ======== ======= ======= =======
-------------------------
Walden Participant Total
Stock Loans Plan
--------------------------------------
<S> <C> <C> <C>
ASSETS
- ------
Investments at fair value:
Walden Residential
Properties, Inc.
common stock $156,104 $ -- $156,104
Mutual funds -- -- 979,619
Participant loans -- 19,101 19,101
--------- -------- ----------
Total investments 156,104 19,101 1,154,824
Cash 1,223 -- 1,223
Contributions
receivable-employer 25,293 -- 123,996
-------- ------- ----------
NET ASSETS
AVAILABLE FOR
BENEFITS $182,620 $19,101 $1,280,043
======== ======= ==========
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
WALDEN RESIDENTIAL PROPERTIES, INC. 401(k) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1998
Supplemental Information by Fund
----------------------------------------------------------------------------------
High Yield
Money Capital Corporate Total
Market Appreciation Convertible Value Bond Return Government
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Net appreciation
(depreciation) in fair value
of investments $ -- $284,671 $ 129 $(168,591) $ (12,482) $ 15,037 $ 3,762
Dividend income 24,510 60,650 -- 100,652 14,652 10,621 11,395
-------- -------- ------- --------- --------- -------- --------
24,510 345,321 129 (67,939) 2,170 25,658 15,157
Employer contributions 18,455 117,201 -- 64,636 21,551 19,968 15,741
Participant contributions 29,634 326,790 -- 187,316 60,429 51,375 41,461
-------- -------- ------- --------- --------- -------- --------
Total additions 72,599 789,312 129 184,013 84,150 97,001 72,359
Benefits paid to participants (149,977) (150,076) -- (110,414) (16,761) (23,162) (32,315)
Administrative Expenses (42) (70) -- (44) (2) (1) (16)
--------- -------- ------- --------- --------- --------- --------
Total deductions (150,019) (150,146) -- (110,458) (16,763) (23,163) (32,331)
Loans to participants (109,954) (46,474) -- (20,799) (2,924) (15,909) (6,040)
Participant loan payments 33,577 19,674 -- 12,704 4,775 3,635 3,375
Transfer from predecessor
plan 490,732 176,150 -- 407,384 58,919 -- 104,273
Transfers from (to) other
funds 41,864 (24,736) (2,929) (78,830) (13,999) 1,932 (8,716)
-------- -------- ------- -------- --------- --------- --------
Net increase (decrease) 378,799 763,780 (2,800) 394,014 114,158 63,496 132,920
NET ASSETS AVAILABLE
FOR BENEFITS:
BEGINNING OF YEAR 62,774 619,736 2,800 358,723 68,234 78,893 97,995
-------- ---------- -------- -------- -------- -------- --------
END OF YEAR $441,573 $1,383,516 $ -- $752,737 $182,392 $142,389 $230,915
======== ========== ======== ======== ======== ======== ========
------------------------------------------------
Janus Walden Participant Total
Janus Worldwide Stock Loans Plan
---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Net appreciation
(depreciation) in fair value
of investments $132,953 $ 90,114 $(57,711) $ -- $ 287,882
Dividend income 14,899 2,085 23,425 -- 262,889
---------- -------- -------- ---------- ----------
147,852 92,199 (34,286) -- 550,771
Employer contributions 10,430 6,924 45,435 -- 320,341
Participant contributions 27,502 17,908 121,868 -- 864,283
---------- -------- -------- --------- ---------
Total additions 185,784 117,031 133,017 -- 1,735,395
Benefits paid to participants (83,270) (88,414) (46,273) -- (700,662)
Administrative Expenses (38) (38) -- -- (251)
---------- --------- -------- -------- ----------
Total deductions (83,308) (88,452) (46,273) -- (700,913)
Loans to participants (7,004) (2,611) -- 211,715 --
Participant loan payments 5,973 1,473 4,783 (89,969) --
Transfer from predecessor
plan 381,449 373,704 -- -- 1,992,611
Transfers from (to) other
funds 65,065 30,257 (9,908) -- --
--------- -------- -------- -------- ----------
Net increase (decrease) 547,959 431,402 81,619 121,746 3,027,093
NET ASSETS AVAILABLE
FOR BENEFITS:
BEGINNING OF YEAR -- -- 227,131 33,346 1,549,632
-------- -------- -------- -------- ----------
END OF YEAR $547,959 $431,402 $308,750 $155,092 $4,576,725
======== ======== ======== ======== ==========
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
WALDEN RESIDENTIAL PROPERTIES, INC. 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
THREE MONTHS ENDED DECEMBER 31, 1997
Supplemental Information by Fund
------------------------------------------------------------------------------------
High Yield
Money Capital Corporate Total
Market Appreciation Convertible Value Bond Return Government
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Net appreciation
(depreciation) in fair value
of investments $ -- $ (21,471) $(3,696) $(30,092) $(3,374) $ (5,245) $ 1,147
Dividend income 221 18,796 2,118 35,267 3,406 5,459 1,402
--------- --------- --------- -------- ------- -------- --------
221 (2,675) (1,578) 5,175 32 214 2,549
Employer contributions 4,348 31,258 -- 17,796 5,360 4,181 3,822
Participant contributions 10,644 95,223 2,462 52,380 16,391 11,543 10,307
--------- -------- -------- -------- ------- -------- --------
Total additions 15,213 123,806 884 75,351 21,783 15,938 16,678
Insurance premium payments (1,150) -- -- -- -- -- --
Benefits paid to participants (4,005) (16,713) (6,602) (14,863) (207) (205) (1,032)
--------- -------- -------- -------- ------- ------- --------
Total deductions (5,155) (16,713) (6,602) (14,863) (207) (205) (1,032)
Loans to participants (1,119) (9,503) -- (5,577) (198) (618) (1,785)
Participant loan payments 3,447 429 -- 312 15 -- 133
Transfers from (to) other
funds 23,445 1,489 (28,067) (4,173) -- 7,823 (96)
-------- -------- -------- -------- ------- ------- -------
Net increase (decrease) 35,831 99,508 (33,785) 51,050 21,393 22,938 13,898
NET ASSETS AVAILABLE
FOR BENEFITS:
BEGINNING OF PERIOD 26,943 520,228 36,585 307,673 46,841 55,955 84,097
------- -------- ------- -------- ------- ------- -------
END OF PERIOD $62,774 $619,736 $ 2,800 $358,723 $68,234 $78,893 $97,995
======= ======== ======= ======== ======= ======= =======
----------------------------
Walden Participant
Stock Loans Total Plan
---------------------------------------------
<S> <C> <C> <C>
Investment income:
Net appreciation
(depreciation) in fair value
of investments $ 6,775 $ -- $(55,956)
Dividend income 3,855 -- 70,524
---------- --------- ----------
10,630 -- 14,568
Employer contributions 10,421 -- 77,186
Participant contributions 32,994 -- 231,944
--------- -------- ----------
Total additions 54,045 -- 323,698
Insurance premium payments -- -- (1,150)
Benefits paid to participants (9,332) -- (52,959)
--------- -------- ----------
Total deductions (9,332) -- (54,109)
Loans to participants -- 18,800 --
Participant loan payments 219 (4,555) --
Transfers from (to) other
funds (421) -- --
-------- ------- ----------
Net increase (decrease) 44,511 14,245 269,589
NET ASSETS AVAILABLE
FOR BENEFITS:
BEGINNING OF PERIOD 182,620 19,101 1,280,043
-------- ------- ----------
END OF PERIOD $227,131 $33,346 $1,549,632
======== ======= ==========
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
WALDEN RESIDENTIAL PROPERTIES, INC. 401(k) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED SEPTEMBER 30, 1997
Supplemental Information by Fund
------------------------------------------------------------------------------------
High Yield
Money Capital Corporate Total
Market Appreciation Convertible Value Bond Return Government
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Net appreciation in fair
value of investments $ -- $ 89,019 $ 3,021 $ 37,627 $ 1,587 $ 6,694 $ 357
Dividend income 548 3,213 2,149 14,943 2,659 1,655 3,296
------- --------- -------- --------- -------- -------- --------
548 92,232 5,170 52,570 4,246 8,349 3,653
Employer contributions -- 44,274 2,880 30,367 5,848 5,177 10,157
Participant contributions 24,967 157,675 11,805 95,233 18,836 14,782 34,573
-------- --------- -------- --------- -------- -------- --------
Total additions 25,515 294,181 19,855 178,170 28,930 28,308 48,383
Insurance premium payments (12,278) -- -- -- -- -- --
Benefits paid to participants (1,032) (32,002) (5,625) (20,932) (5,367) (5,144) (4,903)
Administrative expenses -- (17) -- (14) (1) -- (4)
-------- -------- -------- --------- -------- -------- --------
Total deductions (13,310) (32,019) (5,625) (20,946) (5,368) (5,144) (4,907)
Loans to participants (900 ) (8,638) -- (7,420) (230) -- (1,862)
Participant loan payments -- 431 -- 301 24 -- 67
Transfers from (to) other
funds (222,019) 96,156 8,800 62,253 12,448 9,267 15,732
-------- -------- -------- -------- -------- -------- --------
Net increase (decrease) (210,714) 350,111 23,030 212,358 35,804 32,431 57,413
NET ASSETS AVAILABLE
FOR BENEFITS:
BEGINNING OF YEAR 237,657 170,117 13,555 95,315 11,037 23,524 26,684
--------- -------- ------- -------- ------- --------- --------
END OF YEAR $ 26,943 $520,228 $36,585 $307,673 $46,841 $ 55,955 $ 84,097
========= ======== ======= ======== ======= ========= ========
-------------------------
Walden Participant Total
Stock Loans Plan
------------------------------------
<S> <C> <C> <C>
Investment income:
Net appreciation in fair
value of investments $14,388 $ -- $152,693
Dividend income 8,791 -- 37,254
--------- ---------- --------
23,179 -- 189,947
Employer contributions 25,293 -- 123,996
Participant contributions 58,670 -- 416,541
-------- --------- ---------
Total additions 107,142 -- 730,484
Insurance premium payments -- -- (12,278)
Benefits paid to participants (8,704) -- (83,709)
Administrative expenses (14) -- (50)
-------- --------- ---------
Total deductions (8,718) -- (96,037)
Loans to participants -- 19,050 --
Participant loan payments 226 (1,049) --
Transfers from (to) other
funds 17,363 -- --
-------- --------- ---------
Net increase (decrease) 116,013 18,001 634,447
NET ASSETS AVAILABLE
FOR BENEFITS:
BEGINNING OF YEAR 66,607 1,100 645,596
------- ------- ----------
END OF YEAR 182,620 $19,101 $1,280,043
======= ======== ==========
See accompanying notes to financial statements.
</TABLE>
WALDEN RESIDENTIAL PROPERTIES, INC. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998, THREE MONTHS ENDED
DECEMBER 31, 1997 AND YEAR ENDED SEPTEMBER 30, 1997
1. DESCRIPTION OF PLAN
The following description of the Walden Residential Properties, Inc. 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
("WDN") and Walden Residential Properties, Inc. ("Walden") who have
one year of service and are age 18 or older. WDN acted as the Plan
Administrator and controlled and managed the operation and
administration of the Plan through December 31, 1996, at which time WDN
was merged with Walden and Walden became the Plan administrator. In
connection with the merger, the Plan name was changed to Walden Residential
Properties, Inc. 401(k) Plan. Effective October 1, 1996, the Plan
sponsor and administrator became Walden and Delaware Charter Guarantee
& Trust Company became the trustee. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
Effective October 1, 1997, the Plan was amended and restated in its
entirety. In connection with the acquisition of Drever Partners, Inc. and
affiliates ("Drever") on October 1, 1997, the Plan was amended to add
the eligible employees of Drever to the Plan. As a result of the Plan's
restatement, effective December 31, 1997, the Plan year was changed to a
calendar year.
Contributions
Prior to October 1, 1997, participants could contribute up to 15% of
pretax annual compensation, as defined in the Plan. Effective October 1,
1997, the maximum participant contribution was increased to 20% of
eligible compensation. The Company makes a discretionary matching
contribution (the "Matching Contribution"). For the Plan year ended
December 31, 1998, the three month period ended December 31, 1997 and
the year ended September 30, 1997, the matching contribution represented
50% of participant's contributions up to 6% of eligible compensation.
Effective October 1, 1997, the Matching Contributions was changed to a
quarterly funding rather than annual funding.
Participant Accounts
Each participant's account is credited with the participant's
contributions and withdrawals, as applicable, and allocations of (a)
the Matching 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
future Matching Contributions. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's
account.
Vesting
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Matching Contribution portion of their
accounts plus actual earnings thereon is based on years of credited
service. Prior to October 1, 1997, vesting occurred in accordance with
the following table:
<TABLE>
<CAPTION>
Years of Service % Vested
----------------- -------
<S> <C>
less than 3 years 0%
3 years 20%
4 years 40%
5 years 60%
6 years 80%
after 7 years 100%
</TABLE>
Effective October 1, 1997, the vesting in the Matching Contribution was
decreased from seven years to five years. Vesting occurs in accordance
with the following schedule:
<TABLE>
<CAPTION>
Years of Service % Vested
---------------- --------
<S> <C>
less than 1 years 0%
1 years 20%
2 years 40%
3 years 60%
4 years 80%
after 5 years 100%
</TABLE>
Investment Options
Upon enrollment in the Plan, a participant may direct employee
contributions in 1% increments in any of eight investment options. The
Matching Contributions are contributed into the investment options
elected for employee contributions, except for the Walden Stock Fund.
The following are descriptions of the investment options, as
described in the related fund prospectus.
Mainstay Money Market Fund - Invests in short-term dollar-denominated
securities maturing in 397 days (13 months) or less 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 convertible and
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 income
with capital appreciation as a secondary objective.
Mainstay Total Return Fund - Invests in a portfolio of equity and debt
securities with the objective of realizing current income consistent
with reasonable opportunity for future growth of capital and income.
Mainstay Government Fund - Invests in primarily government securities
with the objective of a high level of current income, consistent with
safety of the principal.
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.
Effective January 1, 1998, Mainstay Convertible Fund was no longer an
option for participants. In addition, participants may direct employee
contributions in the following two new investment options.
Janus Fund - Invests primarily in common stocks selected for their growth
potential. Although the Fund can invest in companies of any size, it
generally invests in larger, more established companies.
Janus Worldwide Fund - Invests primarily in common stocks for companies
of any size throughout the world. The Fund normally invests in issuers
from at least five different countries, including the United States.
The fund may at times invest in fewer than five countries
or even a single country.
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 December 31, 1998
was $13,212. No amounts were payable at December 31, 1997 or at September
30, 1997.
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 period. The mutual funds are valued at quoted
market prices which represent the net asset values of shares held by the
Plan at period-end.
The loans to participants are valued at cost plus accrued interest which
approximates fair value.
Administrative Expenses
The Plan's expenses are generally paid by Walden. During the Plan year
ended December 31, 1998, the three month period ended December 31, 1997
and the year ended September 30, 1997, Walden paid $59,109, $3,948 and
$29,756, respectively, in administrative expenses on behalf of the Plan.
3. INVESTMENTS EXCEEDING 5% OF NET ASSETS
<TABLE>
<CAPTION>
The Plan's investments which exceeded 5% of net assets available for
benefits are as follows:
December 31, December 31, September 30,
1998 1997 1997
------------- ------------ -------------
<S> <C> <C> <C>
Money Market $ 431,699 $ -- $ --
Capital Appreciation Fund 1,332,430 550,349 475,954
Value Fund 723,830 319,416 277,306
Government Fund 223,699 89,607 73,940
Janus Fund 539,729 -- --
Janus Worldwide Fund 425,903 -- --
Walden Stock Fund 284,648 198,856 156,104
</TABLE>
4. NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS
<TABLE>
<CAPTION>
The Plan's investments (including investments bought, sold, as well
as held during the period) appreciated (depreciated) in value as
follows:
Year Three Months Year
Ended Ended Ended
December 31, December 31, September 30,
1998 1997 1997
---- ---- ----
<S> <C> <C> <C>
Investments at Fair Value:
Mutual Funds $345,593 $(62,731) $138,305
Walden Common Stock (57,711) 6,775 14,388
-------- -------- --------
$287,882 $(55,956) $152,693
======== ======== ========
</TABLE>
5. PLAN TERMINATION
Although it has not expressed any intention to do so, Plan management 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 Plan's management believes that the Plan is currently designed and is
being operated in compliance with the applicable requirements of the
Internal Revenue Code. The Plan is in the process of filing a request
to obtain a determination letter from the Internal Revenue Service
indicating that the Plan, as designed, is in compliance with the
applicable requirements of the Internal Revenue Code.
7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is as reconciliation of net assets available for benefits
per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31,
1998
----
<S> <C>
Net assets available for benefits per the financial statements $4,576,725
Amounts allocated for benefits claims payable (13,212)
----------
Net assets available for benefits per the Form 5500 $4,563,513
==========
The following is a reconciliation of benefits paid per the financial statements to the Form
5500 as of the year ended December 31, 1998:
Benefits paid per the financial statements $700,662
Add amounts allocated to benefits due and
payable at December 31, 1998 13,212
--------
Benefits paid per the Form 5500 $713,874
========
</TABLE>
<TABLE>
<CAPTION>
WALDEN RESIDENTIAL PROPERTIES, INC. 401(k) PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
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 13,921 $338,521 $284,648
Cash 7,054 7,054
Mutual Funds
NY Life Securities Mainstay Money Market Fund 431,699 431,699
Mainstay Capital Appreciation Fund 27,967 1,045,416 1,332,430
Mainstay Value Fund 41,809 878,516 723,830
Mainstay High Yield Corporate
Bond Fund 22,817 184,271 172,250
Mainstay Total Return Fund 5,423 120,389 135,365
Mainstay Government Fund 26,288 220,074 223,699
Janus Janus Fund 16,039 402,490 539,729
Janus Worldwide Fund 8,993 331,405 425,903
--------- ---------
Total Mutual Funds 3,614,260 3,984,905
Participant Loans Loans maturing January 1999 to
December 2003 with interest rates
ranging from 8.0% to 9.75%. 155,092 155,092
---------- ----------
TOTAL INVESTMENTS $4,114,927 $4,431,699
========== ==========
* Known to be a party-in-interest.
</TABLE>
<TABLE>
<CAPTION>
WALDEN RESIDENTIAL PROPERTIES, INC. 401(k) PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
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 7,798 $191,745 $198,856
Cash 17,774 17,774
Mutual Funds
NY Life Securities Mainstay Money Market Fund 54,266 54,266
Mainstay Capital Appreciation Fund 15,279 571,588 550,349
Mainstay Convertible Fund 207 2,824 2,800
Mainstay Value Fund 14,693 348,977 319,416
Mainstay High Yield Corporate
Bond Fund 6,992 60,356 56,986
Mainstay Total Return Fund 3,269 75,368 70,125
Mainstay Government Fund 10,861 88,487 89,607
--------- ---------
Total Mutual Funds 1,201,866 1,143,549
Participant Loans Loans maturing July 1998 to
October 2002 with interest rates
ranging from 8.5% to 10.25%. 33,346 33,346
--------- ---------
TOTAL INVESTMENTS $1,444,731 $1,393,525
========== ==========
* Known to be a party-in-interest.
</TABLE>
<TABLE>
<CAPTION>
WALDEN RESIDENTIAL PROPERTIES, INC. 401(k) PLAN
ITEM 27B - SCHEDULE OF DEFAULTED LOANS
YEAR ENDED DECEMBER 31, 1998
Amount Received During
Reporting Year
Identity and Original ------------------------- Unpaid Balance
Address of Change Amount of Loan Principal Interest at End of Year
------------------ --------------- ------------- ----------- --------------
<S> <C> <C> <C> <C>
John Almonrode $ 1,500 $ 985 $ 39 $ 180
Randle James Bush 3,800 -- -- 3,800
Linda Faye Leach 2,400 1,003 57 1,397
Gail B. McGowan 718 604 18 112
Amount Change
Identify and -------------------
Address Change Detailed Description of Loan Principal Interest
----------------- ----------------------------------- --------- --------
<S> <C> <C> <C>
John Almonrode Participant Loan 9/29/97 at 8.5% $ 180 $ --
Randle James Bush Participant Loan 7/2/98 at 8.0% 3,800 --
Linda Faye Leach Participant Loan 1/2/98 and 1,397 --
9/11/98 at 8.5 and 8.0%,
respectively
Gail B. McGowan Participant Loan 4/2/98 at 9.5% 112 --
</TABLE>
<TABLE>
<CAPTION>
WALDEN RESIDENTIAL PROPERTIES, INC. 401(k) PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
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 Mainstay Money Market Fund 11 $694,624 2 $342,845 $342,845 $ --
Mainstay Capital Appreciation Fund 36 702,798 66 268,450 270,793 (2,343)
Mainstay Total Value Fund 45 681,806 85 226,255 240,160 (13,905)
Mainstay High Yield Corporate Bond Fund 64 152,259 39 39,587 40,048 (461)
Mainstay Total Return Fund 39 85,503 20 45,910 45,848 62
Mainstay Government Fund 59 169,660 38 52,535 52,398 137
Janus Janus Fund 40 506,140 25 114,264 118,550 (4,286)
Janus Worldwide Fund 38 427,375 18 93,671 98,055 (4,384)
Bank of Boston Walden Residential Properties, Inc.* 22 200,536 35 57,168 61,006 (3,838)
* Known to be a party-in-interest.
</TABLE>
<TABLE>
<CAPTION>
WALDEN RESIDENTIAL PROPERTIES, INC. 401(k) PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
THREE MONTHS ENDED DECEMBER 31, 1997
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 Mainstay Money Market Fund 23 $44,157 8 $16,835 $16,835 $ --
Mainstay Capital Appreciation Fund 18 128,850 13 32,983 33,215 (232)
Mainstay Convertible Fund 7 7,460 8 34,669 38,342 (3,673)
Mainstay Total Value Fund 14 96,816 10 24,614 25,145 (531)
Mainstay High Yield Corporate Bond Fund 17 19,771 3 405 409 (4)
Mainstay Total Return Fund 17 25,510 3 917 920 (3)
Mainstay Government Fund 18 17,516 8 2,996 2,969 27
Bank of Boston Walden Residential Properties, Inc. * 6 45,729 2 9,754 10,089 (335)
* Known to be a party-in-interest.
</TABLE>
