-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, GqZEEbw/4PoLjjyUCEZ/p8/a5Yi7k1bE+F+CT/GVI+1BqinN5Lgi366c9w1bmCwA ue8eVi3cZ6s7IPLV8kz6FA== 0000950118-94-000097.txt : 19940527 0000950118-94-000097.hdr.sgml : 19940527 ACCESSION NUMBER: 0000950118-94-000097 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19940526 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Other events FILED AS OF DATE: 19940526 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED DOMINION REALTY TRUST INC CENTRAL INDEX KEY: 0000074208 STANDARD INDUSTRIAL CLASSIFICATION: 6798 IRS NUMBER: 540857512 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10524 FILM NUMBER: 94530856 BUSINESS ADDRESS: STREET 1: 10 S 6TH ST STE 203 CITY: RICHMOND STATE: VA ZIP: 23219-3802 BUSINESS PHONE: 8047802691 MAIL ADDRESS: STREET 1: 10 SOUTH SIXTH STREET STREET 2: SUITE 203 CITY: RICHMOND STATE: VA ZIP: 23219-3802 FORMER COMPANY: FORMER CONFORMED NAME: OLD DOMINION REAL ESTATE INVESTMENT TRUST DATE OF NAME CHANGE: 19850110 FORMER COMPANY: FORMER CONFORMED NAME: OLD DOMINION REIT ONE DATE OF NAME CHANGE: 19770921 FORMER COMPANY: FORMER CONFORMED NAME: OLD DOMINION REAL ESTATE INVESTMENT TRUS DATE OF NAME CHANGE: 19741216 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) May 26, 1994 UNITED DOMINION REALTY TRUST, INC. (Exact name of registrant as specified in its charter) Virginia 1-10524 54-0857512 (State or other jurisdiction of (Commission (I.R.S. Employer incorporation of organization) File Number) Identification No.) 10 South Sixth Street, Suite 203, Richmond, Virginia 23219-3802 (Address of principal executive offices) Registrant's telephone number, including area code (804) 780-2691 NO CHANGE (Former name or former address, if changed since last report) ITEM 2. Acquisition or Disposition of Assets On April 1, 1994, the registrant, United Dominion Realty Trust, Inc. (the "Trust") signed 25 separate contracts to acquire a portfolio of 25 apartment communities, located primarily in the Southeast, in separate but related transactions from certain affiliates of Clover Financial Corporation, a New Jersey corporation for $162,997,000, including estimated closing costs (the "Portfolio Acquisition"). The proposed acquisition will be financed through several sources of cash which include (i) the net proceeds from a public offering of 7,000,000 shares of Common Stock, estimated to be $98,700,000, (ii) the assumption of two mortgage loans encumbering two properties in the Portfolio Acquisition totaling $11,700,000, and (iii) senior unsecured debt comprised of a combination of bank line borrowings and term debt. The 25 apartment communities consist of 5,170 total units located on a total of 365 acres, built at various times between 1964 and 1987. ITEM 5. Other Events The Trust anticipates financing a portion of its 1994 property acquisitions, including the Portfolio Acquisition, through the issuance of $75 million to $100 million of 7 to 10 year senior unsecured debt during the third quarter of 1994. To mitigate the risks of rising interest rates, on May 18, 1994, the Trust entered into an interest rate hedge agreement with Goldman, Sachs & Co., a New York limited partnership, which agreement has the effect of limiting the Trust's exposure to an increase in the 10-year Treasury Rate to a maximum of 7.197% for $75,000,000 of its debt to be issued on or before September 15, 1994. ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits Description Location (a) Financial Statements of Businesses Acquired 5 through 14 (b) Pro Forma Financial Information 14 through 23 (c) Exhibits (23) Consents of Independent Auditors 25 through 26 (99) Rate Hedge Agreement, dated May 18, 1994, between United Dominion Realty Trust, Inc. and Goldman, Sachs & Co. 27 through 33 Report of Independent Certified Public Accountants Holly Tree Park Apartments, Knolls at Newgate and Mallard Green Apartments Merchantville, New Jersey We have audited the accompanying combined historical summary of gross income and direct operating expenses of Holly Tree Park Apartments, Knolls at Newgate and Mallard Green Apartments, as defined in Note 2, for the year ended December 31, 1993. This combined historical summary is the responsi- bility of the management of Holly Tree Park Apartments, Knolls at Newgate and Mallard Green Apartments. Our responsibility is to express an opinion on this combined historical summary based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined historical summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined historical summary. An audit also includes assessing the basis of accounting used and the significant estimates made by management, as well as evaluating the overall presentation of the combined historical summary. We believe that our audit provides a reasonable basis for our opinion. The accompanying combined historical summary 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 gross income and direct operating expenses of Holly Tree Park Apartments, Knolls at Newgate and Mallard Green Apartments. In our opinion, the combined historical summary referred to above presents fairly, in all material respects, the combined gross income and combined direct operating expenses described in Note 2 of Holly Tree Park Apartments, Knolls at Newgate and Mallard Green Apartments for the year ended Decem- ber 31, 1993, in conformity with generally accepted accounting principles. /s/ BDO Seidman February 4, 1994 Combined Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1993 Gross income Net revenue $2,628,734 Direct operating expenses Real estate taxes 151,878 Repairs and maintenance 322,839 Utilities 296,193 Property management fees 128,486 Other operating expenses 427,649 Total direct operating expenses 1,327,045 Gross income in excess of direct operating expenses $1,301,689 See accompanying notes to combined historical summary of gross income and direct operating expenses. Notes to Combined Historical Summary of Gross Income and Direct Operating Expenses 1. Basis of Presentation The Holly Tree Park Apartments, Knolls at Newgate and Mallard Green Apartments (the "Properties") consist of three residential apartment properties located in Maryland, Virginia and North Carolina, respectively, together with the existing leases and property management agreements. The assets that comprise the Properties have been held as an investment of Clover Income Properties, L.P., Clover Income Properties II, L.P. and Clover Income Properties III, L.P., respectively (the "Owner"), throughout the period ended December 31, 1993. The accompanying financial statement presents the combined results of the Properties as a stand-alone entity. 2. Summary of Significant Accounting Policies Revenue and Expense Recognition The accompanying financial statement has been prepared using the accrual method of accounting. Rental revenue is recognized when earned and represents potential billings, net of vacancies and bad debts. Certain ex- penses such as depreciation, income taxes, interest expense and corporate expenses are not reflected in the financial statement, as required by Rule 3-14 of Regulation S-X of the Securities and Exchange Commission. Repairs and Maintenance Repairs and maintenance costs are expensed as incurred, while significant improvements, renovations and replacements (including appliances and carpeting) are capitalized. 3. The Properties The Properties are located in Maryland, Virginia and North Carolina. There are 364 apartment units contained within the Properties. The apartments, which are typically garden-style units with one, two or three bedrooms, are managed by Allstate Management Corporation, an affiliate of the owner of the properties. The apartments are generally leased for terms of six months to one year. Average occupancy of the Properties was approxi- mately 93% during 1993. 4. Property Management Fees Property management services are provided through Allstate Management Corporation, an affiliate of the owner of the Properties. Fees for such services were 5% of gross receipts from operations, as defined in the applicable property management agreements. 5. Commitments and Contingencies The Knolls at Newgate Apartments was acquired subject to an existing ground lease from an unaffiliated third party which expires April 12, 2039. Lease payments of $1,440 ($17,280 per annum) are paid monthly. Additional rent, which is defined as 10% of all collections from tenants in excess of $316,000 for each calendar year, is payable within 90 days after the close of the calendar year. Additional rent payable at December 31, 1993 was $65,987. Report of Independent Auditors To the Board of Directors United Dominion Realty Trust, Inc. We have audited the accompanying combined statement of rental operations of Clover Financial Partnership Properties, as defined in Note 2, for the year ended December 31, 1993. This combined statement is the responsibility of the management of Clover Financial Partnership Properties. Our responsibility is to express an opinion on this combined statement based on our audit. We did not audit the statement of rental operations of Crossroads I, II, and III, Overlook, Park I and II, and Hunting Ridge Apartment Communities, which statements reflect total revenues of $5,638,277 for the year ended December 31, 1993. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Crossroads I, II and III, Overlook, Park I and II and Hunting Ridge Apartment Communities, is based solely on the report of the other auditors. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined statement 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 basis of accounting used and the significant estimates made by management, as well as evaluating the overall presentation of the combined statement. 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 on a Current Report on Form 8-K of United Dominion Realty Trust as described in Note 1 and is not intended to be a complete presentation of the gross income and direct operating expenses of Clover Financial Partnership Properties. Page 2 In our opinion, based on our audit and the report of other auditors, the combined statement referred to above presents fairly, in all material respects, the combined gross income and combined direct operating expenses described in Note 2 of Clover Financial Partnership Properties for the year ended December 31, 1993, in conformity with generally accepted accounting principles. /s/ ALLOY, SILVERSTEIN, SHAPIRO, ADAMS, MULFORD & CO. ALLOY, SILVERSTEIN, SHAPIRO, ADAMS, MULFORD & CO. May 19, 1994 CLOVER FINANCIAL PARTNERSHIP PROPERTIES COMBINED STATEMENT OF RENTAL OPERATIONS YEAR ENDED DECEMBER 31, 1993 REVENUES FROM RENTAL PROPERTY $ 25,715,828 RENTAL PROPERTY EXPENSES Real Estate Taxes $ 1,823,358 Repairs and Maintenance 4,115,651 Utilities, Water and Sewer 2,165,124 Property Management Fees 1,284,581 Other Operating Expenses 4,061,508 TOTAL RENTAL PROPERTY EXPENSES 13,450,222 INCOME FROM RENTAL OPERATIONS $ 12,265,606 The accompanying notes are an integral part of this statement. Page 3 CLOVER FINANCIAL PARTNERSHIP PROPERTIES NOTES TO THE COMBINED STATEMENT OF RENTAL OPERATIONS YEAR ENDED DECEMBER 31, 1993 1. Basis of Presentation The Clover Financial Partnership Properties consist of residential apartment communities together with the existing leases and property management agreements. The assets that comprise the Properties have been held as investments of Partnerships affiliated with Clover Financial Corp. throughout the year ended December 31, 1993. The accompanying financial statement presents the results of the combined rental operations of the Properties as a single entity. The residential apartment communities included in the financial statement are as follows: Apartment Community Location # of Units Crossroads I, II and III Columbia, South Carolina 622 Overlook Greenville, South Carolina 237 Park I and II Columbia, South Carolina 292 Dover Country Club Dover, Delaware 224 Excalibur Charlotte, North Carolina 240 Great Oaks Ellicott City, Maryland 300 Grove Park Raleigh, North Carolina 65 Hampton Forest Greenville, South Carolina 130 Harris Pond Charlotte, North Carolina 170 Hunting Ridge Greenville, South Carolina 152 Huntingwood Lynchburg, Virginia 114 Indian Hills Anniston, Alabama 140 Landing Greenville, South Carolina 224 Marina Park North Miami, Florida 88 Royal Oaks Savannah, Georgia 228 Somerset Summerville, South Carolina 240 St. Andrews Columbia, South Carolina 232 Three Fountains Montgomery, Alabama 242 Twin Coves Glen Burnie, Maryland 132 Waterford Columbia, South Carolina 268 West Knoll Newark, Delaware 100 Woodside Glen Burnie, Maryland 366 2. Summary of Significant Accounting Policies Revenue and Expense Recognition The accompanying combined statement of rental operations has been prepared using the accrual method of accounting. Certain expenses such as depreciation, amortization, income taxes and mortgage interest expense are not reflected in the statement of rental operations, as required by Rule 3-14 of Regulation S-X of the Securities and Exchange Commission. Page 4 CLOVER FINANCIAL PARTNERSHIP PROPERTIES NOTES TO THE COMBINED STATEMENT OF RENTAL OPERATIONS YEAR ENDED DECEMBER 31, 1993 (Continued) 2. Summary of Significant Accounting Policies Repairs and Maintenance Repairs and maintenance costs were expensed as incurred, while significant improvements, renovations and replacements were capitalized. 3. Property Management Fees Property management services were provided through affiliates of Clover Financial Corp. Fees for such services vary by apartment community, as defined in the applicable property management agreements. Property management fees for the year ended December 31, 1993 are summarized as follows: Apartment Community % of Gross Receipts Amount Crossroads I, II and III 4% $ 124,111 Overlook 4% 35,530 Park I and II 4% 44,987 Dover Country Club 6% 84,484 Excalibur Apartments 5% 65,788 Great Oaks 6% 129,550 Grove Park 5% 18,466 Hampton Forest 5% 28,688 Harris Pond - (a) 60,000 Hunting Ridge 5% 27,261 Huntingwood 5% 32,657 Indian Hills 5% 37,032 Landing 5% 51,995 Marina Park 5% 32,453 Royal Oaks - (b) 107,143 Somerset 6% 59,892 St. Andrews 5% 65,069 Three Fountains 3% 38,842 Twin Coves 5% 36,592 Waterford 3% 38,145 West Knoll 5% 32,453 Woodside 6% 133,443 Total $ 1,284,581 (a) Annual fee of $60,000 (b) Seven year agreement for $750,000 ($107,143 annually) Page 5 UNITED DOMINION REALTY TRUST, INC. CERTAIN PROPERTIES PROPOSED TO BE ACQUIRED SUMMARY OF REVENUES AND CERTAIN RENTAL EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1993 (IN THOUSANDS OF DOLLARS) Rental income $28,345 Rental expenses (excluding depreciation): Utilities $2,461 Repairs and maintenance 4,439 Real estate taxes 1,975 Property management 1,413 Other rental expenses 4,489 14,777 Excess of revenues over certain rental expenses $13,568 CERTAIN PROPERTIES PROPOSED TO BE ACQUIRED SUMMARY OF REVENUES AND CERTAIN RENTAL EXPENSES FOR THE THREE MONTHS ENDED MARCH 31, 1994 (IN THOUSANDS OF DOLLARS) Rental income $ 7,149 Rental expenses (excluding depreciation): Utilities $ 737 Repairs and maintenance 1,174 Real estate taxes 511 Property management 357 Other rental expenses 1,127 3,906 Excess of revenues over certain rental expenses $ 3,243 NOTES TO SUMMARY OF REVENUES AND CERTAIN RENTAL EXPENSES The summaries of revenues and certain rental expenses reflect the operations of the Portfolio Acquisition (the "property") for the year ended December 31, 1993 based upon the audited statement of rental operations of the properties appearing elsewhere herein and for the three month period ended March 31, 1994 based upon the unaudited statement of rental operations of the property. The summaries have been prepared on the accrual method of accounting. Rental expenses include repair and maintenance expenses, utilities, real estate taxes, insurance and certain other expenses. In accordance with the regulations of the Securities and Exchange Commission, mortgage interest expenses, depreciation, and general and administrative costs have been excluded from operating expenses, as they are dependent upon a particular owner, purchase price or financial arrangement. In assessing the properties, management considered the existing and potential tenant base, expected job growth in the area, occupancy rates, the competitive nature of the market and comparative rental rates. Furthermore, current and anticipated maintenance and repair costs, real estate taxes and anticipated capital improvements were assessed. UNITED DOMINION REALTY TRUST, INC. PRO FORMA CONDENSED FINANCIAL STATEMENTS (UNAUDITED) The following balance sheet at March 31, 1994 gives effect to the proposed acquisition by the Trust of the 25 apartment communities included in the Portfolio Acquisition from certain affiliates of the Clover Financial Corporation, a New Jersey corporation. The pro forma condensed statements of operations for the year ended December 31, 1993 and the three months ended March 31, 1994 assume the acquisition of the property as if it had occurred at the beginning of each period presented. The pro forma condensed statements have been prepared by the management of the Trust. The pro forma condensed financial statements of operations may not be indicative of the results that would have occurred had the acquisitions been completed on the dates indicated. Also, they necessarily are not indicative of future results. The pro forma condensed financial statements should be read in conjunction with the Trust's audited financial statements for the year ended December 31, 1993 (included in the Trust's Form 10-K for the year ended December 31, 1993) and the unaudited financial statements as of March 31, 1994 and for the three months then ended (included in the Trust's Form 10-Q for the periods ended March 31, 1994) and the accompanying notes. UNITED DOMINION REALTY TRUST, INC. PRO FORMA BALANCE SHEET MARCH 31, 1994 (UNAUDITED) (IN THOUSANDS OF DOLLARS, EXCEPT SHARE DATA)
ACQUISITIONS PREVIOUSLY REPORTED ON PORTFOLIO FORM 8-K DATED HISTORICAL (A) ACQUISITION APRIL 15, 1994 BALANCE SHEET ASSETS Real estate owned Apartments............................................................. $532,227 $ 162,997(B) $ 21,198(G) Shopping centers....................................................... 74,450 Office and Industrial.................................................. 4,593 611,270 162,997 21,198 Less accumulated depreciation.......................................... 97,150 514,120 162,997 21,198 Cash and cash equivalents................................................ 10,489 Other assets............................................................. 10,993 $535,602 $ 162,997 $ 21,198 LIABILITIES AND SHAREHOLDERS' EQUITY Mortgage notes payable................................................... $ 72,660 $ 11,700(C) Notes payable............................................................ 188,101 52,597(D) $ 21,198(H) Accounts payable, accrued expenses and other............................. 7,259 Tenants' deposits and rents paid in advance.............................. 3,372 Distributions payable to shareholders.................................... 8,130 279,522 64,297 21,198 Shareholders' equity Common stock, $1 par value; 60,000,000 shares authorized 41,703,785 shares issued and outstanding (48,703,785 in pro forma)..................... 41,704 7,000(E) Additional paid in capital............................................. 302,981 91,700(F) Notes receivable from office shareholders.............................. (4,096) Distributions in excess of earnings.................................... (84,509) Total shareholders' equity............................................. 256,080 98,700 -- $535,602 $ 162,997 $ 21,198 PRO FORMA BALANCE SHEET ASSETS Real estate owned Apartments............................................................. $716,422 Shopping centers....................................................... 74,450 Office and Industrial.................................................. 4,593 795,465 Less accumulated depreciation.......................................... 97,150 698,315 Cash and cash equivalents................................................ 10,489 Other assets............................................................. 10,993 $719,797 LIABILITIES AND SHAREHOLDERS' EQUITY Mortgage notes payable................................................... $ 84,360 Notes payable............................................................ 261,896 Accounts payable, accrued expenses and other............................. 7,259 Tenants' deposits and rents paid in advance.............................. 3,372 Distributions payable to shareholders.................................... 8,130 365,017 Shareholders' equity Common stock, $1 par value; 60,000,000 shares authorized 41,703,785 shares issued and outstanding (48,703,785 in pro forma)..................... 48,704 Additional paid in capital............................................. 394,681 Notes receivable from office shareholders.............................. (4,096) Distributions in excess of earnings.................................... (84,509) Total shareholders' equity............................................. 354,780 $719,797
UNITED DOMINION REALTY TRUST, INC. NOTES TO PRO FORMA BALANCE SHEET MARCH 31, 1994 (UNAUDITED) (A) Represents the Trust's Historical Balance Sheet contained in the Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 1994. (B) Represents the initial purchase price of $161,950,000 for the 25 properties proposed to be acquired in the Portfolio Acquisition plus estimated closing costs of $1,047,000. (C) Represents the assumption of two mortgage loans encumbering two properties included in the Portfolio Acquisition as follows:
LOAN INTEREST PROPERTY NAME AMOUNT RATE Harris Pond Apartments................................................... $5,200,000 8.75% Royal Oaks Apartments.................................................... 6,500,000 8.50%
(D) Represents assumed additional borrowings of $52,597,000 necessary to fund a portion of the Portfolio Acquisition. (E) Represents the issuance of 7,000,000 shares in the Offering. (F) Represents the net proceeds from the Offering attributable to Additional Paid in Capital. In determining net proceeds, underwriting discounts and other offering costs equal to 6% of gross proceeds, or $6,300,000, have been assumed. (G) Represents the aggregate purchase price of $21,198,000 of two apartment communities purchased on April 8, 1994 and April 14, 1994, as previously reported on Form 8-K dated April 15, 1994. (H) Represents assumed additional borrowings of $21,198,000 on unsecured notes payable necessary to fund the acquisitions of the properties in (G). UNITED DOMINION REALTY TRUST, INC. PRO FORMA STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1994 (UNAUDITED) (IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
ACQUISITIONS PREVIOUSLY REPORTED ON PRO PORTFOLIO FORM 8-K DATED FORMA HISTORICAL (A) ACQUISITION (B) APRIL 15, 1994 (C) ADJUSTMENTS STATEMENT OF OPERATIONS INCOME Property operations: Rental income........................................... $ 26,706 $ 7,149 $1,421 Property expenses: Utilities............................................. 2,712 737 81 Repairs & maintenance................................. 3,716 1,174 257 Real estate taxes..................................... 1,802 511 64 Property management................................... 921 357 72 $ (177)(E) Other operating expenses.............................. 2,234 1,127 283 (139)(F) Depreciation of real estate owned..................... 5,706 1,168(G) 17,091 3,906 757 852 Income from property operations........................... 9,615 3,243 664 (852) Interest income........................................... 114 9,729 3,243 664 (852) EXPENSES Interest................................................ 4,655 1,581(I) General and administrative.............................. 1,474 Other depreciation and amortization..................... 185 6,314 -- -- 1,581 Income before gains (losses) on investments............... 3,415 3,243 664 (2,433) Gains (losses) on sale of investments..................... Net income................................................ $ 3,415 $ 3,243 $ 664 $(2,433) Net income per share...................................... $ 0.08 Distributions declared per share.......................... .195 Weighted average number of shares outstanding............. 41,688 7,000 PRO FORMA STATEMENT OF OPERATIONS INCOME Property operations: Rental income........................................... $35,276 Property expenses: Utilities............................................. 3,530 Repairs & maintenance................................. 5,147 Real estate taxes..................................... 2,377 Property management................................... 1,173 Other operating expenses.............................. 3,505 Depreciation of real estate owned..................... 6,874 22,606 Income from property operations........................... 12,670 Interest income........................................... 114 12,784 EXPENSES Interest................................................ 6,236 General and administrative.............................. 1,474 Other depreciation and amortization..................... 185 7,895 Income before gains (losses) on investments............... 4,889 Gains (losses) on sale of investments..................... Net income................................................ $ 4,889 Net income per share...................................... $ 0.10 Distributions declared per share.......................... .195 Weighted average number of shares outstanding............. 48,688
UNITED DOMINION REALTY TRUST, INC. PRO FORMA STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1993 (UNAUDITED) (IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
ACQUISITIONS ACQUISITIONS PREVIOUSLY PREVIOUSLY REPORTED ON REPORTED ON PRO PORTFOLIO FORM 8-K DATED FORM 8-K DATED FORMA HISTORICAL (A) ACQUISITION (B) APRIL 15, 1994 (C) DECEMBER 31, 1993 (D) ADJUSTMENTS STATEMENT OF OPERATIONS INCOME Property operations: Rental income..................... $ 89,084 $28,345 $6,990 $ 9,424 Property expenses: Utilities....................... 7,838 2,461 379 846 Repairs & maintenance........... 13,950 4,439 773 1,407 Real estate taxes............... 5,777 1,975 565 780 Property management............. 2,782 1,413 297 422 $ (816)(E) Other operating expenses........ 7,512 4,489 1,236 1,552 (554)(F) Depreciation of real estate owned......................... 19,764 6,878(G) 57,623 14,777 3,250 5,007 5,508 Income from property operations..... 31,461 13,568 3,740 4,417 (5,508) Interest income..................... 708 (438)(H) 32,169 13,568 3,740 4,417 (5,946) EXPENSES Interest.......................... 16,938 8,183(I) General and administrative........ 3,349 Other depreciation and amortization.................... 596 20,883 -- -- -- 8,183 Income before gains (losses) on investments....................... 11,286 13,568 3,740 4,417 (14,129) Gains (losses) on sale of investments....................... (89) Net income.......................... $ 11,197 $13,568 $3,740 $ 4,417 $ (14,129) Net income per share................ $ 0.29 Distributions declared per share.... 0.70 Weighted average number of shares outstanding....................... 38,202 7,000 PRO FORMA STATEMENT OF OPERATIONS INCOME Property operations: Rental income..................... $133,843 Property expenses: Utilities....................... 11,524 Repairs & maintenance........... 20,569 Real estate taxes............... 9,097 Property management............. 4,098 Other operating expenses........ 14,235 Depreciation of real estate owned......................... 26,642 86,165 Income from property operations..... 47,678 Interest income..................... 270 47,948 EXPENSES Interest.......................... 25,121 General and administrative........ 3,349 Other depreciation and amortization.................... 596 29,066 Income before gains (losses) on investments....................... 18,882 Gains (losses) on sale of investments....................... (89 ) Net income.......................... $ 18,793 Net income per share................ $ 0.42 Distributions declared per share.... 0.70 Weighted average number of shares outstanding....................... 45,202
UNITED DOMINION REALTY TRUST, INC. NOTES TO PRO FORMA STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND THE YEAR ENDED DECEMBER 31, 1993 (UNAUDITED) (A) Represents the Trust's Historical Statements of Operations contained in its Quarterly Report on Form 10-Q for the three months ended March 31, 1994 and its Annual Report on Form 10-K for the year ended December 31, 1993. (B) Represents actual rental income and related operating expenses of the proposed Portfolio Acquisition, as reported elsewhere herein. (C) Represents rental income and related operating expenses of four apartment acquisitions, as previously reported on Form 8-K dated April 15, 1994. (D) Reflects the net adjustments required to allow for a full year of rental income and operating expenses for the year ended December 31, 1993, for the Trust's acquisitions reported on Form 8-K during 1993. (E) Reflects the net decrease in property management fees for the Portfolio Acquisition and the Trust's 1993 and 1994 acquisitions. The Trust internally manages its apartment properties at a cost of approximately 3% of rental income. (F) Reflects the net decrease in insurance expense to reflect that the Trust insures its apartments for approximately $107 per unit less that the historical insurance expense of the Portfolio Acquisition. (G) Represents the net adjustments to depreciation expense as outlined in the table below. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets. Buildings have been depreciated over 35 years and other improvements over 15 years based upon an assumed allocation of the estimated initial cost of the Portfolio Acquisition.
3 MONTHS ENDED 12 MONTHS ENDED MARCH 31, 1994 DECEMBER 31, 1993 Increase related to the Portfolio Acquisition $1,022,000 $ 4,088,000 Increase related to the acquisitions previously reported on Form 8-K dated April 15, 1994 146,000 1,280,000 Increase related to the acquisitions previously reported on Form 8-K dated December 31, 1993 -- 1,510,000 Total $1,168,000 $ 6,878,000
(H) Reflects the reduction of interest income associated with the use of short-term investments to acquire the properties at assumed interest rates in effect at the time of each respective acquisition for the year ended December 31, 1993, for the Trust's 1993 acquisitions reported on Form 8-K during 1993. (I) Reflects the additional interest expense associated with the increase in bank lines of credit and the assumption of two mortgage notes assumed to have been incurred by the Trust to purchase (i) the Portfolio Acquisition at interest rates and maturities which are currently available to the Trust, (ii) the 1994 apartment acquisitions through May 13, 1994 at interest rates under the Trust's bank lines of credit on the date of purchase, and (iii) the 1993 apartment acquisitions made by the Trust at interest rates and maturities that were available at the time of each acquisition as follows:
3 MONTHS ENDED 12 MONTHS ENDED MARCH 31, 1994 DECEMBER 31, 1993 Increase related to the Portfolio Acquisition $1,192,000 $ 4,769,000 Increase related to the acquisitions previously reported on Form 8-K dated April 15, 1994 389,000 1,871,000 Increase related to the acquisitions previously reported on Form 8-K dated December 31, 1993 -- 1,543,000 Total $1,581,000 $ 8,183,000
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: May 26, 1994 /s/ James Dolphin James Dolphin, Senior Vice President Chief Financial Officer Date: May 26, 1994 /s/ Jerry A. Davis Jerry A. Davis, Vice President Controller EX-23 2 EXH. 23(A) CONSENT OF BDO SEIDMAN CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS United Dominion Realty Trust, Inc. Richmond, Virginia We consent to the incorporation by reference in the previously filed Registration Statement Form S-3 No. 33-40433, Registration Statement Form S-3 No. 33-32930, Registration Statement Form S-8 No. 33-47926 and Registration Statement Form S-8 No. 33-48000 of United Dominion Realty Trust, Inc. of our report dated February 4, 1994, with respect to the combined Historical Summary of Gross Income and Direct Operating Expenses of Holly Tree Park Apartments, Knolls at Newgate and Mallard Green Apartments for the year ended December 31, 1993 included in this Form 8-K dated May 26, 1994. /s/ BDO SEIDMAN Philadelphia , Pennsylvania May 26, 1994 EX-23 3 EXH. 23(B) CONSENT OF ALLOY, SILVERSTEIN CONSENT OF INDEPENDENT AUDITORS The Board of Directors United Dominion Realty Trust, Inc. We consent to the incorporation by reference in the previously filed Registration Statement Form S-3 No. 33-40433, Registration Statement Form S-3 No. 33-32930, Registration Statement Form S-8 No. 33-47926 and Registration Statement Form S-8 No. 33-48000 of United Dominion Realty Trust, Inc. of our report dated May 19, 1994, with respect to the Statement of Rental Operations of Clover Financial Partnership Properties for the year ended December 31, 1993, included in this Form 8-K dated May 26, 1994. /s/ Alloy, Silverstein, Shapiro, Adams, Mulford & Co. Alloy, Silverstein, Shapiro, Adams, Mulford & Co. Certified Public Accountants May 24, 1994 EX-99 4 RATE HEDGE AGREEMENT Exhibit 99 RATE HEDGE AGREEMENT This Agreement is made the 18th of May, 1994, between United Dominion Realty Trust, a Virginia corporation (the "Customer"), and Goldman, Sachs & Co., a New York limited partnership ("Goldman Sachs"). WHEREAS, the Customer intends to issue, within the term of this Agreement, its debt Securities ("Debt"), with a maturity of approximately 1O years, and wishes to enter into a notional principal contract in the amount of $75MM to hedge itself against the risk that the general level of interest rates for securities with similar maturities might rise from their current level during the term of this Agreement; and WHEREAS, the Customer intends this Agreement to qualify as a hedging transaction within the meaning of Section 1256(e)(2) of the Internal Revenue Code of 1986 as amended: NOW, THEREFORE, THIS AGREEMENT WITNESSETH: 1. Definitions. For the purposes of this Agreement, the following terms shall have the meanings indicated: (a) "Adjustment Price": the number determined in accordance with the formula set forth in paragraph 3 of Schedule A hereto. (b) "Agreement Date": the date set forth in the first paragraph hereof. (c) "Alternate Takedown Price": the price (stated in percent) determined in accordance with Section 2(c) hereof. (d) "Base Treasury Price": the price, expressed in percent, set forth in paragraph 1 of Schedule A hereto. (e) "Base Treasury Securities": the securities set forth in paragraph 2 of Schedule A hereto. (f) "Business Day": each Monday, Tuesday, Wednesday, Thursday, and Friday which is not a day on which Goldman Sachs, the Customer, or the Federal Reserve Bank of New York are closed or banking institutions in the State of New York are authorized or obligated by law or executive order to close. (g) "Determination Date": the date on which the Takedown Price shall be accepted, or deemed to be accepted, by the Customer. (h) "Price Differential": the amount obtained by multiplying (i) the difference (stated in percent) between the Base Treasury Price and the Takedown Price, times (ii) the Base Treasury Securities. (i) "Readjustment Factor": the number determined in accordance with the formula set forth in paragraph 3(b) of Schedule A hereto. (j) "Takedown Price": the price (stated in percent) determined in accordance with Sections 2 and 3 hereof and Schedule A hereto. (k) "Termination Date": the date set forth in paragraph 4 of Schedule A hereto. 2. Selection of a Takedown Price. (a) On any Business Day, between the hours of 9:00 a.m. and 3:00 p.m. (New York City time), the Customer may request Goldman Sachs to quote a Takedown Price. Within one hour of receipt by Goldman Sachs of such a request, Goldman Sachs shall quote an unadjusted Takedown Price to the Customer; provided, however, that Goldman Sachs may, but shall not be obligated to, quote a Takedown Price (i) at any time within one hour before an expected announcement of money supply data or other economic statistics by the government of the United States of America or any agency thereof, (ii) if an event (including an announcement of money supply data or other economic statistics) shall have occurred that would, in the judgment of Goldman Sachs, materially affect the quotation of a Takedown Price, or (iii) if in the opinion of Goldman Sachs there does not at such time exist an active dealer market for the Base Treasury Securities. Upon receipt by the Customer of such quotation subject to paragraph (c) of this Section, the Customer shall immediately accept or reject such unadjusted Takedown Price. If the Customer shall not have accepted such unadjusted Takedown Price, the Customer shall be deemed to have rejected such unadjusted Takedown Price. (b) If the Customer shall not have accepted a quoted Takedown Price, and Goldman Sachs and the Customer shall not be deemed to have accepted an Alternate Takedown Price, prior to 11:30 a.m. (New York City time) on the Termination Date, Goldman Sachs shall quote an unadjusted Takedown Price to the Customer at or prior to 4:00 p.m. (New York City time), and except as provided in paragraph (c) of this Section the Customer shall be deemed to have accepted such Takedown Price. (c) Notwithstanding paragraphs (a) and (b) of this Section, if, following the quotation by Goldman Sachs to the Customer of an unadjusted Takedown Price pursuant to either such paragraph, the Customer immediately rejects such unadjusted Takedown Price and notifies Goldman Sachs that the Customer has received from another leading U.S. Government securities dealer a firm bona fide offer to sell the Base Treasury Securities to the Customer at a price (stated in percent) (an "Alternate Takedown Price"), lower than the price quoted by Goldman Sachs, then Goldman Sachs shall immediately quote a new unadjusted Takedown Price (which may be the same as its previously quoted unadjusted Takedown Price) to the Customer, and the Customer shall immediately accept or reject such new unadjusted Takedown Price. If the Customer does not immediately accept such new unadjusted Takedown Price, the Customer and Goldman Sachs shall be deemed to have accepted the Alternate Takedown Price, provided, that in addition the Customer shall be deemed to have agreed to sell to Goldman Sachs the Base Treasury Securities at the Alternate Takedown Price. The settlement date for such sale to Goldman Sachs shall be the next settlement date that, in accordance with customary trade practices, would apply if the Base Treasury Securities had been bought back on the Determination Date. The method of settlement shall be the method that, in accordance with customary trade practices, is employed with respect to the Base Treasury Securities. 3. Settlement Price. Upon acceptance pursuant to Section 2 hereof of the unadjusted Takedown Price by the Customer, or of the Alternate Takedown Price by Goldman Sachs, the following calculations and payments shall be made: (a) The Takedown Price or the Alternate Takedown Price (as the case may be) established pursuant to Section 2 above shall be adjusted (up or down) by adding thereto the Adjustment Price (positive or negative) determined in accordance with paragraph 3(a) of Schedule A hereto, such Adjustment Price to be modified by the Readjustment Factor determined pursuant to paragraph 3(b) of Schedule A if the Takedown Price (or Alternate Takedown Price) is determined on a date prior to the Termination Date. The Takedown Price or Alternate Takedown Price, as adjusted, shall be the "Takedown Price" for purposes of determining the settlement price below. (b) If the Takedown Price exceeds the Base Treasury Price, the Customer shall owe Goldman Sachs the amount of the Price Differential. If the Takedown Price is less than the Base Treasury Price, Goldman Sachs shall owe the amount of the Price Differential to the Customer. (c) The payment of the Price Differential shall be made in immediately available federal funds by wire transfer on the Business Day immediately following the Determination Date to the appropriate account of the receiving party specified in paragraph 5 or 6 of Schedule A hereto. (d) If the party required to pay the Price Differential hereunder fails to do so in a timely manner, interest on such amount shall accrue from and including the Determination Date through the date that such amount plus interest is paid in full at an annual rate equal to 2% above the prime brokers' loan rate. The prime brokers' loan rate will be determined by Goldman Sachs for this purpose, in Goldman Sachs' sole discretion, in accordance with prevailing money market conditions. It is understood that in making such determination, Goldman Sachs will consider, among other things, the rates quoted for brokers' loans by one or more New York banks which are members of the New York Clearing House Association. Interest shall be computed daily, using a 360 day base year. 4. Transfer. This Agreement may not be assigned or otherwise transferred by either party hereto without the prior written consent of the other party. 5. Representations and Warranties of the Customer. The Customer represents and warrants to Goldman Sachs as follows: (a) The Customer is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it has been incorporated. (b) The Customer has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, the persons giving instructions or confirming transactions hereunder on behalf of the Customer shall be duly authorized to do so, and this Agreement has been duly authorized, executed, and delivered by the Customer and is enforceable against the Customer in accordance with its terms. (c) The Customer is entering into this Agreement in the ordinary course of its business in order to hedge its exposure on a proposed debt securities issuance and not for speculative purposes. 6. Representations and Warranties of Goldman Sachs. Goldman Sachs represents and warrants to the Customer as follows: (a) Goldman Sachs has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, the persons giving instructions or confirming transactions hereunder on behalf of Goldman Sachs shall be duly authorized to do so, and this Agreement has been duly authorized, executed, and delivered by Goldman Sachs and is enforceable against Goldman Sachs in accordance with its terms. (b) Goldman Sachs is entering into this Agreement in the ordinary course of its business and not for speculative purposes. 7. Notices. Any notice hereunder may be given by telephone, telecopy, telex, or other written instrument, in the case of telephone to be confirmed in writing, delivered to the parties at their respective addresses and in accordance with the telecommunications instructions set forth below. 8. Governing Law and Jurisdiction. This Agreement shall be governed by and construed in accordance with the law of the State of New York. The Customer hereby irrevocably submits to the jurisdiction of the Supreme Court of the State of New York and the United States District Court for the Southern District of New York, in either case in the Borough of Manhattan, The City of New York, in connection with any claim, suit, action, or proceeding arising out of or relating to this Agreement. 9. Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute one and the same instrument. 10. Amendments. This Agreement may be amended only by a written instrument signed by each of the parties hereto. 11. No Waiver. No failure on the part of either party hereto to exercise, and no delay in exercise of, any contractual right hereunder shall operate as a waiver thereof. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives. United Dominion Realty Trust Signature by: James Dolphin Address: 10 South Sixth Street Suite 203 Richmond, Virginia 23219 Attention: James Dolphin Telecopy No.:(804) 644-4829 Telephone No.:(804) 780-2691 Goldman, Sachs & Co.. Signature By: Address: 85 Broad Street New York, NY 10004 Attention: James O. Rhodes Telecopy No.: 212 902-0659 Telephone No.: 212-902-8376 Schedule A 1. Base Treasury Price (initial spot price): 101.59375%. 2. Base Treasury Securities: UST 7.25% of 5/15/2004. 3. Adjustment of Takedown Price: (a) The Adjustment Price ("AP") shall be determined on the Agreement Date as follows: "AP" = (Coupon x a) (Principal x RP x a) = 1.245732% ------ - --- 2 c 360 where: "Coupon" = Coupon rate of interest payable on Base Treasury Security, expressed in percent= 7.25%. "Principal" = BTP+I, where: "BTP" = Base Treasury Price (expressed as a decimal)=1.0159375. "I" = Accrued coupon interest (expressed as a decimal) on the Base Treasury Security computed as of the Business Day following the Agreement Date =.00078804. "RP" = Term repurchase rate quoted by Goldman Sachs for the Base Treasury Securities for the number of days from and including the Business Day following the date of this Agreement to the Business Day following the Termination Date (stated in percent)=3.30% "a" = The actual number of days in the period from the Business Day following the Agreement Date, or the Settlement Date of the Base Treasury Issue whichever is later to the Business Day following the Termination Date if the Base Treasury Security coupon date does not fall in such period; otherwise, "a" means the actual number of days in the period from the Business Day following the Agreement Date to the Base Treasury Security coupon date falling within such period = 120 Days. "c" = The actual number of days in the period from and including the last Base Treasury Security coupon date falling before the period to but excluding the next following Base Treasury Security coupon date = 184 Days. (b) If the Determination Date occurs on a date other than the Termination Date, the Adjustment Price shall be adjusted (up or down) by subtracting from the Adjustment Price (not rounded up) a "Readjustment Factor" ("RF") (positive or negative) determined as follows: "RF" = (Coupon x f) - (P2 x RV x f) ----- - - 2 c 360 where: "P2"=TP+ I2 "TP" = Takedown Price or Alternate Takedown Price, expressed as a decimal. "I2" = Accrued coupon interest on the Base Treasury Security on the Business Day following the Determination Date. "RV" = The term reverse repurchase rate quoted by Goldman Sachs for the Base Treasury Security for the period from and including the Business Day following the Determination Date to but excluding the Business Day following the Termination Date, stated in percent. Goldman Sachs shall quote a bid/ask spread in determining RV equal to no more than 50 basis points. "f" = The actual number of days in the period from the Business Day following the Determination Date to the Business Day following the Termination Date if the Base Treasury Security coupon date does not fall in such period; otherwise "f" means the actual number of days in the period from the Business Day following the Determination Date to the Base Treasury Security coupon date falling within such period. 4. Termination Date: September 15, 1984 5. Payments to the Customer (unless the Customer notifies Goldman Sachs otherwise in writing): Institution: Signet Bank ABA#: 051006778 Attention: United Dominion Realty Trust, Inc. Account Number: # 5527629892 Location: Richmond, Virginia 6. Payments to Goldman Sachs (unless Goldman Sachs notifies the Customer otherwise in writing): Institution: The Chase Manhattan Bank ABA #: 021-000021 Account: Goldman, Sachs & Co. Account#: 930-1-011483 Location: One Chase Manhattan Plaza New York, New York -7- -----END PRIVACY-ENHANCED MESSAGE-----