SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
July 1, 1999
HOME PROPERTIES OF NEW YORK, INC.
(Exact name of Registrant as specified in its Charter)
MARYLAND 1-13136 16-1455126
(State or other jurisdiction (Commission file number) (I.R.S. Employer
of incorporation or organization Identification
Number)
850 CLINTON SQUARE
ROCHESTER, NEW YORK 14604
(Address of principal executive offices)
Registrant's telephone number, including area code: (716) 546-4900
Not applicable
(Former name or former address, if changed since last report)
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
AMENDMENT NO. 1 TO
CURRENT REPORT
ON FORM 8-K/A
Home Properties of New York, Inc. hereby amends items 2 and 7 of its Current
Report on Form 8-K, which was filed on July 2, 1999, as set forth in the pages
attached hereto:
Item 2. Acquisition of Assets.
Financial Statements for the CRC Portfolio, purchased on July 1, 1999, are
presented in Item 7.
Item 7. Financial Statements and Exhibits.
a. Financial Statements of the business acquired:
Audited statement of revenues and certain expenses of the CRC
Portfolio for the year ended December 31, 1998.
b. Pro Forma Financial Information:
Pro forma condensed balance sheet of the Company as of March 31,
1999 and related notes (unaudited).
Pro forma condensed statement of operations of the Company for the
three months ended March 31, 1999 and for the year ended December
31, 1998 (unaudited).
c. Exhibits:
Exhibit 23.0 - Consent of PricewaterhouseCoopers LLP
<PAGE>
THE CRC PORTFOLIO
STATEMENT OF REVENUES AND
CERTAIN EXPENSES
DECEMBER 31, 1998
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
June 18, 1999
To the Board of Directors and Shareholders of
Home Properties of New York, Inc.
In our opinion, the accompanying statement of revenues and certain expenses, as
defined in Note 1, present fairly, in all material respects, the revenues and
certain expenses, as defined in Note 1, of The CRC Portfolio for the year ended
December 31, 1998 in conformity with generally accepted accounting principles.
The statement of revenues and certain expenses is the responsibility of The CRC
Portfolio's management; our responsibility is to express an opinion on this
financial statement based on our audit. We conducted our audit of the
statement of revenues and certain expenses in accordance with generally
accepted auditing standards, which 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 statement,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above.
The accompanying statement of revenues and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission, as described in Note 1, and is not intended to be a
complete presentation of The CRC Portfolio's revenues and expenses.
/S/ PRICEWATERHOUSECOOPERS LLP
PRICEWATERHOUSECOOPERS LLP
<PAGE>
THE CRC PORTFOLIO
STATEMENT OF REVENUES AND CERTAIN EXPENSES
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the
Period January 1, For the
through Year Ended
March 31, 1999 December 31, 1998
(unaudited)
<S> <C> <C>
Revenues:
Rental income $ 8,196 $ 32,283
Other income 60 219
-------- ----------
8,256 32,502
Certain expenses:
Property operating and maintenance 3,440 14,918
Real estate taxes 429 1,598
-------- ----------
3,869 16,516
-------- ----------
Revenues in excess of certain expenses $ 4,387 $ 15,986
======== ==========
</TABLE>
The accompanying note is an integral part of this financial statement.
<PAGE>
THE CRC PORTFOLIO
NOTE TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
YEAR ENDED DECEMBER 31, 1998
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS
The accompanying statement of revenues and certain expenses includes the
operations (see "Basis of Presentation" below) of The CRC Portfolio, seven
residential properties owned and managed by common parties not related to
Home Properties of New York, Inc. (the "Company").
On July 1, 1999, the Company, through its subsidiary Home Properties of New
York, L.P., acquired 100% of the real estate of The CRC Portfolio, 3,722
apartment units located in seven communities. The properties are primarily
located in suburban markets of Washington, D.C.; Baltimore, MD and
Richmond, VA.
The acquisition was funded through the assumption of approximately $57
million in mortgages, approximately $18 million in cash and the issuance of
Operating Partnership Units in Home Properties of New York, L.P. valued at
approximately $106 million. The mortgages carry a weighted average
interest rate of 7.16% and a weighted average maturity of 12 years.
BASIS OF PRESENTATION
The accompanying financial statement has been prepared on the accrual basis
of accounting, but is not representative of the actual operations of The CRC
Portfolio for the period shown. As required by the Securities and Exchange
Commission, Regulation S-X, Rule 3-14, certain expenses have been excluded
which may not be comparable to the proposed future operations of The CRC
Portfolio. Expenses excluded relate to property management fees, interest
expense, depreciation and amortization expense and other expenses not
directly related to the future operations of The CRC Portfolio. The
Company is not aware of any material factors relating to The CRC Portfolio
that would cause the reported financial information not to be necessarily
indicative of future operating results.
REVENUE RECOGNITION
Rental income attributable to residential leases is recorded when due from
residents. Leases are generally for terms of one year.
INTERIM UNAUDITED FINANCIAL STATEMENT
The accompanying interim unaudited statement of revenues and certain
expenses for the period from January 1 through March 31, 1999 has been
prepared pursuant to the rules and regulations of the Securities and
Exchange Commission described above. The results of operations of such
interim period are not necessarily indicative of the results for the full
year.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1999
(Unaudited, In Thousands)
This unaudited pro forma Condensed Consolidated Balance Sheet is presented as
if the Company had purchased the CRC Portfolio on March 31, 1999. This
unaudited pro forma Condensed Consolidated Balance Sheet should be read in
conjunction with the Statement of Revenues and Certain Expenses of the CRC
Portfolio and note thereto included elsewhere herein. In management's opinion,
all adjustments necessary to reflect the purchase of the CRC Portfolio have
been made.
<TABLE>
<CAPTION>
Home
Properties of
New York, Pro Forma Company
INC. (A) CRC Portfolio (B) Adjustm. (C) Pro Forma
---------------- ---------------- ------------ ---------
<S> <C> <C> <C> <C>
ASSETS
Real Estate, net $ 885,073 $19,541 $156,900(D) $1,061,514
Cash and cash equivalents 27,341 (17,417) 9,924
Other assets 102,943 575(E) 103,518
--------- ------- -------- ---------
Total assets $1,015,357 $19,541 $140,058 $1,174,956
========= ====== ======= =========
LIABILITIES
Mortgage notes payable $419,185 $57,034 $ $476,219
Line of credit -
Other liabilities 24,761 24,761
-------- ------ ------- ---------
Total liabilities 443,946 57,034 500,980
-------- ------ ------- ---------
Minority interest 203,240 105,990(F) 309,230
-------- ------ ------- ---------
STOCKHOLDERS' EQUITY
Common Stock 182 182
Additional paid-in capital 413,524 (37,493) 37,493(G) 413,524
Distributions in excess of
accumulated earnings (29,492) (3,425)(E) (32,917)
Unrealized loss on available-
for-sale securities (2,360) (2,360)
Treasury stock, at cost (3,726) (3,726)
Officer and Director notes for
stock purchases (9,957) (9,957)
--------- ------ ------- ---------
Total stockholders' equity 368,171 (37,493) 34,068 364,746
--------- ------ ------- ---------
Total liabilities and
stockholders' equity $1,015,357 $19,541 $140,058 $1,174,956
========= ====== ======= =========
</TABLE>
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1999
(Unaudited, In Thousands, Except Share and Per Share Data)
(A) Reflects the Company's historical consolidated balance sheet as of March
31, 1999 as reported on form 10-Q.
(B) Reflects the CRC Portfolio historical balance sheet as of March 31, 1999
for the assets acquired by the Company.
(C) The pro forma adjustments reflect the purchase of the CRC Portfolio for
$176,441. The purchase price will be allocated $26,282 to land, $3,882 to
appliances and equipment and $146,277 to building. The appliances and
equipment have an estimated useful life of ten years and the building has
an estimated useful life of thirty-five years.
(D) Reflects the excess of the cash purchase price of $176,441 over the
historical seller's cost basis of $19,541.
(E) Management contracts were purchased for $4,000 from an unrelated third
party management company. The management contracts purchased are for the
properties included in the CRC Portfolio and additional properties in
which the Company does not have an ownership interest. The Company will
self-manage the CRC Portfolio and will directly expense $3,425 of the
contracts allocated to these properties. The remaining contracts of $575
will be recorded as goodwill and be expensed over approximately 40 years.
(F) Reflects the issuance of 4,085,684 shares of operating units at a price
of $25.94.
(G) Represents historical seller's capital account zeroed out.
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(Unaudited, In Thousands, Except Share and Per Share Data)
The unaudited pro forma Consolidated Statement of Operations for the three
months ended March 31, 1999 and for the year ended December 31, 1998 is
presented as if the acquisition of the CRC Portfolio had occurred on January 1,
1998. The unaudited pro forma Consolidated Statement of Operations should be
read in conjunction with the Statements of Revenues and Certain Expenses of the
CRC Portfolio and notes thereto included elsewhere herein. In management's
opinion, all adjustments necessary to reflect the effects of the purchase of
the CRC Portfolio have been made.
The unaudited pro forma Consolidated Statement of Operations is not necessarily
indicative of what the actual results of operations would have been assuming
the transactions had occurred as of the beginning of the period presented, nor
does it purport to represent the results of operations for future periods.
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31, 1999
------------------------------------------------------------------------------
Home Properties of New
York, Inc. CRC Pro forma Company
Historical (A) Portfolio (B) Adjustments Pro Forma
---------------------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues
Rental Income $43,943 $8,196 $ $52,139
Property other income 1,286 60 1,346
Other income 2,537 (7)(C) 2,530
------ ----- ----- ------
Total revenues 47,766 8,256 (7) 56,015
------ ----- ----- ------
Expenses:
Operating and maintenance 20,999 3,869 24,868
General and administrative 2,156 248(D) 2,404
Interest 7,716 1,020(E) 8,736
Depreciation & Amortization 7,541 1,130(F) 8,671
------ ----- ----- ------
Total Expenses 38,412 3,869 2,398 44,679
------ ----- ----- ------
Income before minority interest $9,354 $4,387 ($2,405) 11,336
====== ===== =====
Minority interest of Unit holders 4,984
------
Net income $6,352
======
Net income per share - Basic $0.36
======
- Diluted $0.35
======
Weighted average number of shares
outstanding:
- Basic 17,871,753
==========
- Diluted 17,960,058
==========
</TABLE>
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(Unaudited, In Thousands, Except Share and Per Share Data)
<TABLE>
<CAPTION>
Community
Home Properties of New Realty Pro forma Company
York, Inc. (A) Portfolio (B) Adjmt Pro-Forma
---------------------- ------------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Rental income $137,557 $32,283 $169,840
Property other income 3,614 219 3,833
Other income 8,072 ( 28)(C) 8,044
------- ------ ------ -------
Total revenues 149,243 32,502 ( 28) 181,717
------- ------ ------ -------
Expenses:
Operating and Maintenance 63,136 16,516 79,652
General and administrative 6,685 975 (D) 7,660
Interest 23,980 4,082 (E) 28,062
Depr. & Amort. 23,191 4,582 (F) 27,773
------- ------ ------ -------
Total expenses 116,992 16,516 9,639 143,147
------- ------ ------ -------
Net income before minority interest and
extraordinary item $32,251 $15,986 ($ 9,667) 38,570
======= ====== ======
Minority interest of Unit holders 18,685
------
Income before extraordinary item 19,885
Extraordinary item (802)
------
Net Income $19,083
======
Basic earnings per share data:
Income before extraordinary item $1.43
Extraordinary item ($0.06)
----
Net Income $1.37
====
Diluted earnings per share data:
Income before extraordinary item $1.42
Extraordinary item ($0.06)
----
Net Income $1.36
====
Weighted Average Number of shares
outstanding:
- Basic 13,898,221
==========
- Diluted 14,022,329
==========
</TABLE>
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND
FOR THE YEAR ENDED DECEMBER 31, 1998
(Unaudited, In Thousands)
(A) Reflects the historical consolidated statement of operations for the
Company for the three months ended March 31, 1999 and the historical
consolidated statement of operations for the Company for the year ended
December 31, 1998.
(B) Reflects the historical revenues and certain expenses of the CRC Portfolio
which was not owned by the Company for the three months ended March 31,
1999 and for the year ended December 31, 1998.
(C) The resulting reduction in interest income (from decrease in cash used to
finance the acquisition) is calculated at 4% and amounts to
$151 and $603, net of management fee income from third party
management contracts in the amount of $144 and $575 for the three
months ended March 31, 1999 and for the year ended December 31, 1998,
respectively.
(D) Reflects additional general and administrative expenses.
(E) Reflects the assumption of debt borrowed to finance the acquisition. The
interest rates range from 6.6% to 8.4% and amounts to $1,020 and $4,082
for the three months ended March 31, 1999 and for the year ended December
31, 1998, respectively.
(F) Reflects depreciation and amortization related to the acquisition. See
Notes C and E on page 8 for further information on useful lives of these
assets.
(G) Management contracts amounting to $3,425 which were expensed at closing
have not been included in these Pro Forma Consolidated Statement of
Operations because they are material nonrecurring charges.
<PAGE>
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.
HOME PROPERTIES OF NEW YORK, INC.
(Registrant)
Date: July 29, 1999
By: /S/ DAVID P. GARDNER
David P. Gardner
Vice President
Chief Financial Officer and
Treasurer
Date: July 29, 1999
By: /S/ NORMAN LEENHOUTS
Norman Leenhouts
Chairman of the Board of Directors
Co-Chief Executive Officer and Director
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
EXHIBIT INDEX
LOCATION
EXHIBIT 23.0
Consent of PricewaterhouseCoopers LLP Attached hereto
Exhibit 23.0
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statements on
Forms S-3 (Nos. 33-96004, 333-37229, 333-46243, 333-2672, 333-2674, 333-58799,
333-67733, 333-64069, 333-52601 and 333-75253) and on Forms S-8 (Nos.
333-05705, 333-12551, 333-58801 and 333-60731) filed by Home Properties of
New York, Inc. of our report dated June 18, 1999 of our audit of The CRC
Portfolio for the year ended December 31, 1998, which report is included
in the accompanying Form 8-K. We also consent to the reference to our firm
under the caption "Experts."
/S/PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Rochester, New York
July 27, 1999
