UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 28, 2004
UNITED DOMINION REALTY TRUST, INC.
| Maryland | 1-10524 | 54-0857512 | ||
|
|
||||
| (State or Other Jurisdiction of Incorporation) |
(Commission File No.) | (IRS Employer Identification No.) |
1745 Shea Center Drive,
Suite 200, Highlands Ranch, Colorado 80129
Registrant’s telephone number, including area code: (720) 283-6120
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e- 4(c)) |
| ITEM 8.01. Other Events | ||||||||
| ITEM 9.01. Financial Statements and Exhibits | ||||||||
| Signatures | ||||||||
| Exhibit Index | ||||||||
| Consent of Ernst & Young LLP | ||||||||
ITEM 8.01. Other Events
On September 29, 2004, United Dominion Realty Trust, Inc. (the “Company”) filed with the Securities and Exchange Commission a Current Report on Form 8-K dated September 28, 2004 (Commission File No. 1-10524), reporting that the Company, through a subsidiary, had during the 2004 fiscal year acquired or proposed to acquire various apartment communities located in Maryland, Tennessee, California and Oregon. The Company filed with the Form 8-K dated September 28, 2004 certain financial information indicated under Rule 3-14 and Article 11 of Regulation S-X relating to certain of these properties.
This Current Report on Form 8-K/A is being filed to report that on December 1, 2004, the Company, through its subsidiaries, United Dominion Realty, L.P., a Delaware limited partnership, UDRT of Delaware 4 LLC, a Delaware limited liability company, and UDR Midlands Acquisition LLC, a Delaware limited liability company, completed a transaction to acquire (a) all of the outstanding partnership interests of two partnerships that owned MacAlpine Place, an apartment community in Dunedin, Florida, and The Reserve and The Park at Riverbridge, an apartment community in Greenacres, Florida, and (b) vacant land adjacent to MacAlpine Place, for a total purchase price of $121 million. Individually, this transaction was not a significant acquisition at the time of the transaction or at the date of this filing under the rules governing the reporting of transactions on Form 8-K. However, this transaction, together with the transactions reported on the Form 8-K dated September 28, 2004 and other unrelated acquisitions completed during 2004, in the aggregate were significant pursuant to Rule 3-14 of Regulation S-X. The Company is therefore filing this Current Report on Form 8-K/A to include certain financial information with respect to the additional properties acquired on December 1, 2004 and to provide updated pro forma financial statements for the year ended December 31, 2003 and the nine months ended September 30, 2004.
ITEM 9.01. Financial Statements and Exhibits
(a) Financial Statements of Real Estate Operations Acquired.
The
following financial statements are filed with this Form 8-K/A:
Report of Independent Registered Public Accounting Firm
Combined Statements of Revenue and Certain Expenses for the year
ended December 31, 2003 and for the six-month period ended
June 30, 2004 (unaudited)
Notes to Combined Statements of Revenue and Certain Expenses
The
following financial statements were previously filed under
Item 9.01(a) of the Company's Form 8-K dated
September 28, 2004, filed with the Securities and Exchange
Commission on September 29, 2004 (Commission File
No. 1-10524).
Arborview,
Calvert's Walk and Liriope:
Report
of Independent Registered Public Accounting Firm
Combined
Statement of Revenue and Certain Expenses for the year ended
December 31, 2003
The
Preserve at Brentwood:
Report
of Independent Registered Public Accounting Firm
Statements
of Revenue and Certain Expenses for the year ended December 31,
2003 (audited) and for the three-month period ended March 31,
2004 (unaudited)
The
Essex Properties:
Report
of Independent Registered Public Accounting Firm
Combined
Statements of Revenue and Certain Expenses for the year ended
December 31, 2003 (audited) and for the six-month period ended
June 30, 2004 (unaudited)
(b)
Pro Forma Financial Information.
The
following pro forma financial information is filed with this
Form 8-K/A:
Pro Forma Condensed Consolidated Balance Sheet as of
September 30, 2004 (unaudited)
Pro Forma Condensed Consolidated Statements of Operations for the
nine-month period ended September 30, 2004 (unaudited) and for the
year ended December 31, 2003 (unaudited)
(c)
Exhibits.
| Exhibit No. | Description | |
| 23.1 | Consent of Ernst & Young LLP |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| UNITED DOMINION REALTY TRUST, INC. | ||||
| Date: December 13, 2004 | By: | /s/ Christopher
D. Genry Name: Christopher D. Genry Title: Executive Vice President and Chief Financial Officer |
||
Report of Independent Registered Public Accounting Firm
The Board of Directors
United Dominion Realty Trust, Inc.
We have audited the accompanying combined statement of revenue and certain expenses of Riverbridge and MacAlpine Place (the Communities) for the year ended December 31, 2003. This combined statement is the responsibility of the management of the Communities. Our responsibility is to express an opinion on this combined statement based on our audit.
We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall combined statement presentation. We believe that our audit provides a reasonable basis for our opinion.
The accompanying combined statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in a Current Report on Form 8-K of United Dominion Realty Trust, Inc., as described in Note 1, and is not intended to be a complete presentation of the Communities’ revenue and expenses.
In our opinion, the combined statement referred to above presents fairly, in all material respects, the revenue and certain expenses of Riverbridge and MacAlpine Place for the year ended December 31, 2003, in conformity with U.S. generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Richmond, Virginia
September 1, 2004
1
Riverbridge and MacAlpine Place
Combined Statements of Revenue and Certain Expenses
| Six-month period | ||||||||
| Year ended | ended June 30, 2004 | |||||||
| December 31, 2003 |
(unaudited) |
|||||||
Rental and other property income |
$ | 12,096,593 | $ | 6,077,357 | ||||
Rental expenses: |
||||||||
Personnel |
910,296 | 459,485 | ||||||
Utilities |
604,611 | 295,704 | ||||||
Repairs and maintenance |
687,133 | 406,776 | ||||||
Administrative and marketing |
608,569 | 295,624 | ||||||
Property management |
362,898 | 182,319 | ||||||
Real estate taxes and insurance |
2,183,098 | 1,039,157 | ||||||
Total rental expenses |
5,356,605 | 2,679,065 | ||||||
Revenue in excess of certain expenses |
$ | 6,739,988 | $ | 3,398,292 | ||||
See accompanying notes.
2
Riverbridge and MacAlpine Place
Notes to Combined Statements of Revenue and Certain Expenses
1. Basis of Presentation
In August 2004, a subsidiary of United Dominion Realty Trust, Inc. signed a letter of intent to acquire Riverbridge and MacAlpine Place (the Communities) from The Ballast Point Group.
The combined statements of revenue and certain expenses relate to the operations of the Communities and were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, including Rule 3-14 of Regulation S-X. Accordingly, the accompanying combined statements of revenue and certain expenses have been prepared using the accrual method of accounting, and certain expenses such as depreciation, amortization, income taxes, mortgage interest expense and entity expenses are not reflected in the combined statements of revenue and certain expenses, as required by Rule 3-14 of Regulation S-X of the Securities and Exchange Commission. Consequently, the combined statements of revenue and certain expenses for the periods presented are not representative of the actual operations for the periods presented, as certain revenues and expenses which may not be in the proposed future operations of the Communities have been excluded in accordance with Rule 3-14 of Regulation S-X.
The accompanying unaudited interim combined statement of revenue and certain expenses has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and was prepared on the same basis as the combined statement of revenue and certain expenses for the year ended December 31, 2003. In the opinion of management of the Communities, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of the information for this interim period have been made. The revenue in excess of certain expenses for such interim period is not necessarily indicative of the excess of revenue over certain expenses for the full year.
The Communities consist of the following:
| Number of | ||||||
| Property Name |
Units |
Location |
||||
Riverbridge
|
636 | West Palm Beach, FL | ||||
MacAlpine Place
|
476 | Dunedin, FL | ||||
3
Riverbridge and MacAlpine Place
Notes to Combined Statements of Revenue and Certain Expenses
(continued)
2. Summary of Significant Accounting Policies
Revenue Recognition
The apartment homes are leased under operating leases with terms of generally one year or less. Rental income is recognized as it is earned, which is not materially different than on a straight-line basis.
Repairs and Maintenance
Repairs and maintenance costs are expensed as incurred, while significant improvements, renovations and replacements are capitalized.
Estimates
The preparation of the combined statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
3. Related Party Transactions
Affiliates of the Communities performed the property management function and charged total management fees of 3% of rental and other property income for this service for 2003 and the six-month period ended June 30, 2004. Management fees in the amount of $362,898 and $182,319 were charged to the Communities during 2003 and the six-month period ended June 30, 2004, respectively.
4
Pro Forma Condensed Consolidated Balance Sheet
The accompanying unaudited Pro Forma Condensed Consolidated Balance Sheet of United Dominion Realty Trust, Inc. (the “Company”) is presented as if Arborview, Calvert’s Walk, Liriope, The Preserve at Brentwood, The Essex Properties, MacAlpine Place and The Reserve and The Park at Riverbridge had been acquired on September 30, 2004. This Pro Forma Condensed Consolidated Balance Sheet should be read in conjunction with the Pro Forma Condensed Consolidated Statement of Operations for the nine-month period ended September 30, 2004 and for the year ended December 31, 2003 and the historical consolidated financial statements and notes thereto of the Company reported on Form 10-Q for the nine-month period ended September 30, 2004 and on Form 10-K for the year ended December 31, 2003, as updated on Form 8-K dated December 13, 2004. In management’s opinion, all adjustments necessary to reflect the acquisition of Arborview, Calvert’s Walk, Liriope, The Preserve at Brentwood, The Essex Properties, MacAlpine Place and The Reserve and The Park at Riverbridge have been made. The following Pro Forma Condensed Consolidated Balance Sheet is not necessarily indicative of what the actual financial position would have been assuming the above transaction had been consummated at September 30, 2004, nor does it purport to represent the future financial position of the Company.
UNITED DOMINION REALTY TRUST, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 2004
(UNAUDITED AND IN THOUSANDS)
| HISTORICAL | PRO FORMA | PRO FORMA | ||||||||||
| AMOUNTS(A) |
ADJUSTMENTS(B) |
AMOUNTS |
||||||||||
Assets |
||||||||||||
Real estate investments, net |
$ | 3,803,636 | $ | 307,678 | $ | 4,111,314 | ||||||
Cash and cash equivalents |
8,442 | — | 8,442 | |||||||||
Deferred financing costs, net |
21,263 | 1,774 | 23,037 | |||||||||
Notes receivable |
15,604 | — | 15,604 | |||||||||
Other assets |
42,203 | 1,713 | 43,916 | |||||||||
Total assets |
$ | 3,891,148 | $ | 311,165 | $ | 4,202,313 | ||||||
Liabilities and Stockholders’ Equity |
||||||||||||
Secured debt |
$ | 1,070,769 | $ | 174,750 | $ | 1,245,519 | ||||||
Unsecured debt |
1,448,955 | 136,415 | 1,585,370 | |||||||||
Accrued expenses and other liabilities |
125,494 | — | 125,494 | |||||||||
Distributions payable |
42,986 | — | 42,986 | |||||||||
Total liabilities |
2,688,204 | 311,165 | 2,999,369 | |||||||||
Minority interests |
86,837 | — | 86,837 | |||||||||
Preferred stock — Series B |
135,400 | — | 135,400 | |||||||||
Preferred stock — Series D |
48,958 | — | 48,958 | |||||||||
Preferred stock — Series E |
56,893 | — | 56,893 | |||||||||
Common Stock |
127,819 | — | 127,819 | |||||||||
Other equity |
747,037 | — | 747,037 | |||||||||
Total
stockholders’ equity |
1,116,107 | — | 1,116,107 | |||||||||
Total
liabilities and stockholders’ equity |
$ | 3,891,148 | $ | 311,165 | $ | 4,202,313 | ||||||
See accompanying notes.
Notes to Proforma Condensed Consolidated Balance Sheet
| (A) | Represents the condensed consolidated balance sheet of the Company as of September 30, 2004, as contained in the historical consolidated financial statements and notes thereto filed on Form 10-Q. This includes the completed acquisition of Arborview, Calvert’s Walk, Liriope, the Preserve at Brentwood and certain of the Essex Properties. These properties were purchased during the nine months ended September 30, 2004 for a total purchase price of $255.5 million. These acquisitions were funded through draws under the Company’s line of credit facility and assumptions of secured mortgages. | |||
| (B) | Represents the acquisition of certain of the Essex Properties, MacAlpine Place and The Reserve and The Park at Riverbridge for a total purchase price of $309 million of which $1.7 million has preliminarily been allocated to the acquisition of in-place leases. These acquisitions were funded through draws under the Company's line of credit facility and assumptions of secured mortgages. | |||
Pro Forma Condensed Consolidated Statements of Operations
The accompanying unaudited Pro Forma Condensed Consolidated Statements of Operations for the nine-month period ended September 30, 2004 and for the year ended December 31, 2003 of the Company is presented as if Arborview, Calvert’s Walk, Liriope, The Preserve at Brentwood, the Essex Properties, MacAlpine Place and The Reserve and The Park at Riverbridge (collectively, the “Properties”) had been acquired on January 1, 2003.
These unaudited Pro Forma Condensed Consolidated Statements of Operations should be read in conjunction with the historical consolidated financial statements included in the Company’s previous filings with the Securities and Exchange Commission.
The unaudited Pro Forma Condensed Consolidated Statements of Operations are not necessarily indicative of what the actual results of operations would have been for the nine-month period ended September 30, 2004 or for the year ended December 31, 2003 assuming the above transactions had been consummated on January 1, 2003, nor do they purport to represent the future results of operations of the Company.
UNITED DOMINION REALTY TRUST, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2004
(UNAUDITED AND IN THOUSANDS, EXCEPT PER-SHARE DATA)
| HISTORICAL | PRO FORMA | PRO FORMA | ||||||||||
| AMOUNTS(A) |
ADJUSTMENTS(B) |
AMOUNTS |
||||||||||
Revenues |
||||||||||||
Rental income |
$ | 455,217 | $ | 36,598 | $ | 491,815 | ||||||
Non-property income |
2,213 | — | 2,213 | |||||||||
Total revenues |
457,430 | 36,598 | 494,028 | |||||||||
Expenses |
||||||||||||
Real estate taxes and insurance |
53,910 | 4,588 | 58,498 | |||||||||
Personnel |
48,380 | 3,389 | 51,769 | |||||||||
Utilities |
28,218 | 1,669 | 29,887 | |||||||||
Repair and maintenance |
29,716 | 1,565 | 31,281 | |||||||||
Administrative and marketing |
16,286 | 1,425 | 17,711 | |||||||||
Property management |
13,163 | — | 13,163 | |||||||||
Other operating expenses |
850 | — | 850 | |||||||||
Depreciation and amortization |
126,239 | 17,083 | 143,322 | |||||||||
Interest |
88,218 | 13,332 | 101,550 | |||||||||
General and administrative |
13,235 | — | 13,235 | |||||||||
Hurricane related expenses |
5,503 | — | 5,503 | |||||||||
Other expenses |
2,590 | — | 2,590 | |||||||||
Total expenses |
426,308 | 43,051 | 469,359 | |||||||||
Income/(loss) before allocation to minority interests and
discontinued operations |
31,122 | (6,453 | ) | 24,669 | ||||||||
Minority interests of outside partnerships |
(166 | ) | — | (166 | ) | |||||||
Minority interests of unitholders in operating
partnerships |
(698 | ) | 417 | (281 | ) | |||||||
Income/(loss) from continuing operations, net of minority
interests |
30,258 | (6,036 | ) | 24,222 | ||||||||
Distributions to preferred stockholders |
(15,271 | ) | — | (15,271 | ) | |||||||
Premium on preferred share conversion |
(4,687 | ) | — | (4,687 | ) | |||||||
Income/(loss) from continuing operations available to
common stockholders |
$ | 10,300 | $ | (6,036 | ) | $ | 4,264 | |||||
Income/(loss) from continuing operations available to
common stockholders – basic and diluted |
$ | 0.08 | $ | (0.05 | ) | $ | 0.03 | |||||
Weighted average number of common shares outstanding -
basic |
127,099 | 127,099 | 127,099 | |||||||||
Weighted average number of common shares outstanding -
diluted |
128,063 | 127,099 | 128,063 | |||||||||
See accompanying notes.
UNITED DOMINION REALTY TRUST, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
(UNAUDITED AND IN THOUSANDS, EXCEPT PER-SHARE DATA)
| HISTORICAL | PRO FORMA | PRO FORMA | ||||||||||
| AMOUNTS(A) |
ADJUSTMENTS(C) |
AMOUNTS |
||||||||||
Revenues |
||||||||||||
Rental income |
$ | 562,377 | $ | 53,733 | $ | 616,110 | ||||||
Non-property income |
1,068 | — | 1,068 | |||||||||
Total revenues |
563,445 | 53,733 | 617,178 | |||||||||
Expenses |
||||||||||||
Real estate taxes and insurance |
64,454 | 6,764 | 71,218 | |||||||||
Personnel |
57,452 | 4,941 | 62,393 | |||||||||
Utilities |
33,543 | 2,469 | 36,012 | |||||||||
Repair and maintenance |
36,643 | 2,611 | 39,254 | |||||||||
Administrative and marketing |
20,880 | 2,214 | 23,094 | |||||||||
Property management |
16,873 | — | 16,873 | |||||||||
Other operating expenses |
1,205 | — | 1,205 | |||||||||
Depreciation and amortization |
150,905 | 29,105 | 180,010 | |||||||||
Interest |
117,460 | 19,846 | 137,306 | |||||||||
General and administrative |
20,626 | — | 20,626 | |||||||||
Other expenses |
4,523 | — | 4,523 | |||||||||
Total expenses |
524,564 | 67,950 | 592,514 | |||||||||
Income/(loss) before allocation to minority interests and
discontinued operations |
38,881 | (14,217 | ) | 24,664 | ||||||||
Minority interests of outside partnerships |
(614 | ) | — | (614 | ) | |||||||
Minority interests of unitholders in operating
partnerships |
505 | 906 | 1,411 | |||||||||
Income/(loss) from continuing operations, net of minority
interests |
38,772 | (13,311 | ) | 25,461 | ||||||||
Distributions to preferred stockholders |
(26,326 | ) | — | (26,326 | ) | |||||||
Premium on preferred share conversion |
(19,271 | ) | — | (19,271 | ) | |||||||
Loss from continuing operations available to common
stockholders |
$ | (6,825 | ) | $ | (13,311 | ) | $ | (20,136 | ) | |||
Loss from continuing operations available to common
stockholders – basic and diluted |
$ | (0.06 | ) | $ | (0.12 | ) | $ | (0.18 | ) | |||
Weighted average number of common shares outstanding –
basic and diluted |
114,672 | 114,672 | 114,672 | |||||||||
See accompanying notes.
Notes to Pro Forma Condensed Consolidated Statements of Operations
| (A) | Represents the historical consolidated statement of operations of the Company as contained in the historical consolidated financial statements included in previous filings with the Securities and Exchange Commission. | |||
| (B) | Represents the unaudited pro forma revenues and expenses for the nine months ended September 30, 2004 attributable to the Properties as if the acquisitions had occurred on January 1, 2003. Interest expense of $13.3 million includes pro forma interest of $9.3 million attributable to new mortgage loans payable and $4.0 million attributable to draws under the line of credit to fund these acquisitions. | |||
| (C) | Represents the unaudited pro forma revenues and expenses for the year ended December 31, 2003 attributable to the Properties as if the acquisitions had occurred on January 1, 2003. Interest expense of $19.8 million includes pro forma interest of $12.5 million attributable to new mortgage loans payable and $7.3 million attributable to draws under the line of credit to fund these acquisitions. Depreciation and amortization expense of $29.1 million includes pro forma amortization expense of $3.4 million attributed to the acquisition of in-place leases. | |||
Exhibit Index
| Exhibit No. | Description | |
| 23.1 | Consent of Ernst & Young LLP |