-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DLWYi3hrQhnC2PkmcvUSpC4V53hPjBCEJPFI4kcvX3QpjFvN5/KeLjwwMquY5YVP cef2bIk84AIBjAnlWxJCuQ== 0000950134-97-000248.txt : 19970116 0000950134-97-000248.hdr.sgml : 19970116 ACCESSION NUMBER: 0000950134-97-000248 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961218 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970115 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN REALTY TRUST INC ET AL CENTRAL INDEX KEY: 0000827165 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE OPERATORS (NO DEVELOPERS) & LESSORS [6510] IRS NUMBER: 540697989 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09948 FILM NUMBER: 97506243 BUSINESS ADDRESS: STREET 1: 10670 N CENTRAL EXPRESSWAY STREET 2: STE 300 CITY: DALLAS STATE: TX ZIP: 75231 BUSINESS PHONE: 214-692-47 MAIL ADDRESS: STREET 1: 10670 N CENTRAL EXPRESSWAY STREET 2: SUITE 600 CITY: DALLAS STATE: TX ZIP: 75231 8-K 1 FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 December 18, 1996 ---------------------------------------------------------------------- Date of Report (Date of Earliest Event Reported) AMERICAN REALTY TRUST, INC. ---------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Georgia 1-9948 54-0697989 - -------------------------------------------------------------------------------- (State of Incorporation) (Commission (IRS Employer File No.) Identification No.) 10670 North Central Expressway, Suite 300, Dallas, TX 75231 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (214) 692-4700 ----------------- Not Applicable ------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) 1 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On December 17, 1996, American Realty Trust, Inc. (the "Company") purchased the Best Western Oceanside in Virginia Beach, Virginia for $6.8 million (4.2% of the Company's assets at December 31, 1995). The seller of the property was Atlantic Resort Associates, L.P. ("ARALP"), a Virginia partnership.. The property was constructed in 1983 and consists of 110 rooms. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Pro forma financial information: Pro forma statements of operations are presented for the year ended December 31, 1995 and the nine months ended September 30, 1996. A pro forma balance sheet as of September 30, 1996 is also presented. A summary of the pro forma transaction follows: On December 17, 1996, the Company purchased the Best Western Oceanside in Virginia Beach, Virginia for $6.8 million exclusive of commissions and closing costs. The Company acquired the property through Ocean Beach Partners, L.P. ("OCPLP"), a newly formed partnership of which ART Oceanview Corporation, a wholly-owned subsidiary of the Company is the 1% general partner and the Company is the 99% Class B limited partner. In conjunction with the acquisition, OCPLP issued 1,813,660 Class A limited partner units in OCPLP having an agreed value of $1.00 per partnership unit to the former limited partners of ARALP. The Class A limited partner units are entitled to a $.095 per unit preferred annual return. The Class A limited partners do not otherwise participate in the income, loss or cash flow of the property. The Class A limited partner units may be exchanged for Series D Cumulative Preferred Stock in the Company at a rate of 20 units per share of preferred stock. No more than one-third of the Class A limited partner units held may be exchanged between January 1, 1997 and May 31, 2001. Between June 1, 2001 and May 31, 2006 all unexchanged Class A units are exchangeable. The Company obtained new mortgage financing for the remaining $5.0 million of the purchase price. The mortgage bears interest at 9.94% per annum, requires monthly payments of principal and interest of $48,685 and matures January 1, 2017. The pro forma statements of operations present the Company's operations as if the transaction described above had occurred at the beginning of each of the periods presented. [THIS SPACE INTENTIONALLY LEFT BLANK.] 2 3 AMERICAN REALTY TRUST, INC. PRO FORMA CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1996
Best Western Actual Oceanside Pro forma ---------- ------------ --------- (dollars in thousands) Assets Notes and interest receivable Performing............................................... $ 51,392 $ - $ 51,392 Nonperforming, nonaccruing............................... 1,827 - 1,827 --------- ------------ --------- 53,219 - 53,219 Less - allowance for estimated losses......................... (3,926) - (3,926) --------- ------------ --------- 49,293 - 49,293 Real estate held for sale, net of accumulated depreciation.... 60,403 - 60,403 Less - allowance for estimated losses......................... (3,328) - (3,328) --------- ------------ --------- 57,075 - 57,075 Real estate held for investment, net of accumulated depreciation............................................. 31,924 6,879 38,803 Investments in marketable equity securities, at market........ 1,947 - 1,947 Investments in equity investees............................... 54,335 - 54,335 Cash and cash equivalents..................................... 1,097 - 1,097 Other assets.................................................. 9,454 - 9,454 --------- ------------ --------- $ 205,125 $ 6,879 $ 212,004 ========= ============ =========
3 4 AMERICAN REALTY TRUST, INC. PRO FORMA CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1996
Best Western Actual Oceanside Pro forma ---------- ------------ --------- (dollars in thousands) Liabilities and Shareholders' Equity - ------------------------------------ Liabilities Notes and interest payable.................................... $ 107,613 $ 5,066 $ 112,679 Margin borrowings............................................. 36,843 - 36,843 Other liabilities............................................. 7,640 - 7,640 --------- ------------ --------- 152,096 5,066 157,162 Minority interest............................................. 1,097 1,813 2,910 Commitments and contingencies Shareholders' equity Preferred Stock, authorized 20,000,000 shares, issued and outstanding 4,000 shares Series B, 10% cumulative, $2.00 par value... 8 - 8 15,489 shares Series C, 10% cumulative, $2.00 par value.. 31 - 31 Common Stock, $.01 par value; authorized 16,667,000 shares, 6,739,540 shares in 1996 and 5,858,328 in 1995 issued.... 68 - 68 Paid-in capital............................................... 68,623 - 68,623 Accumulated distributions in excess of accumulated earnings................................................. (16,795) - (16,795) Treasury stock at cost, 282,352............................... (3) - (3) --------- ------------ --------- 51,932 - 51,932 --------- ------------ --------- $ 205,125 $ 6,879 $ 212,004 ========= ============ =========
4 5 AMERICAN REALTY TRUST, INC. PRO FORMA STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1996
Best Western Actual Oceanside(1) Proforma ------------ ----------- ---------- (dollars in thousands, except per share) Income Rents...................... $ 14,733 $ 1,735 $ 16,468 Interest................... 3,416 - 3,416 Other...................... 1,293 - 1,293 --------- -------- --------- 19,442 1,735 21,177 Expenses Property operations........ 11,166 1,263 12,429 Equity in losses of investees............... 3,122 - 3,122 Interest................... 10,656 316 10,972 Depreciation and amortization............ 1,319 - 1,319 Advisory fee to affiliate.. 1,093 - 1,093 General and administrative 1,855 - 1,855 Minority interest.......... - 57 57 --------- -------- --------- 29,211 1,636 30,847 --------- -------- --------- Income (loss) before gain on sale of real estate and extraordinary gain......... (9,769) 99 (9,670) Gain on sale of real estate... 7,799 - 7,799 --------- -------- --------- Income (loss) before extra- ordinary gain.............. (1,970) 99 (1,871) Extraordinary gain............ 381 - 381 --------- -------- --------- Net income (loss)............. (1,589) $ 99 (1,490) ======== Preferred dividend requirement................ (65) (65) --------- --------- Net income (loss) applicable to Common shares........... $ (1,654) $ (1,555) ========= ========= Earnings per share Income before extraordinary gain...... $ (.32) (.30) Extraordinary gain......... .06 .06 --------- --------- Net (loss)................. $ (.26) (.24) ========= ========= Weighted average shares of Common Stock used in computing earnings per share...................... 6,357,447 6,357,447 ========= =========
- --------------------- (1) Assumes acquisition by the Company on January 1, 1996. 5 6 AMERICAN REALTY TRUST, INC. PRO FORMA STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1995
Best Western Actual Oceanside(1) Proforma ---------- ------------- ----------- (dollars in thousands, except per share) Income Rents..................... $ 17,869 $ 2,357 $ 20,226 Interest.................. 4,929 - 4,929 Other..................... 154 - 154 ---------- ------------- ----------- 22,952 2,357 25,309 Expenses Property operations....... 13,260 883 14,143 Equity in losses of investees.............. 5,123 - 5,123 Interest.................. 8,941 503 9,444 Depreciation and amortization........... 1,691 - 1,691 Advisory fee to affiliate. 1,195 - 1,195 General and administrative 2,554 - 2,554 Minority interest......... 671 172 843 ---------- ------------- ----------- 33,435 1,558 34,993 ---------- ------------- ----------- Income (loss) from operations (10,483) 799 (9,684) Income tax expense........... 2 - 2 ---------- ------------- ----------- Income (loss) before gain on sale of real estate and extraordinary gain........ (10,485) 799 (9,686) Gain on sale of real estate.. 6,866 - 6,866 ---------- ------------- ----------- Income (loss) before extra- ordinary gain............. (3,619) 799 (2,820) Extraordinary gain........... 783 - 783 ---------- ------------- ----------- Net (loss)................... $ (2,836) $ 799 $ (2,037) ========== ============= =========== Earnings per share Income (loss) before extraordinary gain..... $ (.62) $ (.48) Extraordinary gain........ .14 .14 ---------- ----------- Net (loss)................ $ (.48) $ (.34) ========== =========== Weighted average shares of Common Stock used in computing earnings per share..................... 5,858,328 5,858,328 ========= ===========
- --------------------- (1) Assumes acquisition by the Company on January 1, 1995. 6 7 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued) (b) Financial statements of properties acquired:
Exhibit Number Description - ------- ------------------------------------------------------------- 99.0 The Best Western Oceanside Audited Statement of Revenues and Direct Operating Expenses for the year ended December 31, 1995.
________________________________ SIGNATURE 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 hereto duly authorized. AMERICAN REALTY TRUST, INC. Date: January 15, 1996 By: /s/ Thomas A. Holland -------------------------- --------------------------------- Thomas A. Holland Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 7 8 AMERICAN REALTY TRUST, INC. EXHIBIT TO ITS CURRENT REPORT ON FORM 8-K Dated December 18, 1996
Exhibit Page Number Description Number - ------- -------------------------------------------- ------ 99.0 Best Western Oceanside Audited Statement of 9 Revenues and Direct Operating Expenses for the year ended December 31, 1995.
EX-99.0 2 STATEMENT OF REVENUES-DOE FOR THE YEAR END 12-3-95 1 EXHIBIT 99.0 THE BEST WESTERN OCEANSIDE STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES YEAR ENDED DECEMBER 31, 1995 2 Independent Auditors' Report To the Board of Trustees American Realty Trust We have audited the accompanying statement of revenues and direct operating expenses of The Best Western Oceanside for the year ended December 31, 1995. This statement of revenues and direct operating expenses is the responsibility of the Property's management. Our responsibility is to express an opinion on this statement of revenues and direct operating expenses 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 statement of revenues and direct operating expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenues and direct operating expenses. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement of revenues and direct operating expenses presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying financial statement is prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in Form 8-K of American Realty Trust) and, as described in Note 1, is not intended to be a complete presentation of the results of operations. In our opinion, the statement of revenues and direct operating expenses referred to above presents fairly, in all material respects, the revenues and direct operating expenses of The Best Western Oceanside for the year ended December 31, 1995, in conformity with generally accepted accounting principles. Farmer, Fuqua, Hunt & Munselle, P.C. Dallas, Texas December 11, 1996 10 3 THE BEST WESTERN OCEANSIDE STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES YEAR ENDED DECEMBER 31, 1995 REVENUES Room revenues $ 2,225,209 Telephone revenues 43,677 Parking revenues 39,493 Rental revenues 29,061 Other revenues 19,778 ----------- Total revenues 2,357,218 OPERATING EXPENSES Salaries and benefits 418,704 Utilities 169,948 Repairs and maintenance 108,956 Lease expense 87,738 Property taxes 67,821 Insurance and licenses 29,785 ----------- Total direct operating expenses 882,952 ----------- REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES $ 1,474,266 ===========
The accompanying notes are an integral part of this statement. 11 4 THE BEST WESTERN OCEANSIDE NOTES TO STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES DECEMBER 31, 1995 NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION The Best Western Oceanside is a 110 room hotel located in Virginia Beach, Virginia. During 1995, the property was owned by Atlantic Resort Associates, LLP. The accompanying financial statement does not include a provision for depreciation and amortization, bad debt expense, interest expense or income taxes. Accordingly, this statement is not intended to be a complete presentation of the results of operations. NOTE 2: ACCOUNTING ESTIMATES 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 3: OTHER REVENUES Other revenues consist of the following: Furniture sales $ 12,010 Snack machines 5,109 Miscellaneous 2,659 -------- Total $ 19,778 -------- NOTE 4: SUBSEQUENT EVENT The property was sold to American Realty Trust, a Georgia trust, on December 17, 1996. 12 -----END PRIVACY-ENHANCED MESSAGE-----