8-K 1 aml_6158.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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): April 15, 2004 AMLI RESIDENTIAL PROPERTIES TRUST ------------------------------------------------------ (Exact name of registrant as specified in its charter) Maryland 1-12784 36-3925916 --------------- ----------------- ------------------- (State or other (Commission File (IRS Employer jurisdiction of Number) Identification No.) incorporation) 125 South Wacker Drive, Suite 3100, Chicago, Illinois 60606 ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (312) 443-1477 ---------------------------------------------------- (Registrant's telephone number, including area code) N/A ------------------------------------------------------------- (Former name or former address, if changed since last report) 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 (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 1 ITEM 8.01 OTHER EVENTS On April 15, 2004 AMLI Residential Properties, L.P., ("AMLI") acquired a rental community containing 234 units and located in West Palm Beach, Florida. The sellers were partners in a limited partnership whose sole general partner was Altman Development Corporation; AMLI acquired all partnership interests in the partnership for $24,675,000 in cash and has renamed this community AMLI at Ibis. AMLI at Ibis is a luxury apartment community set on approximately 14.9 acres. The community was built in 2001 and contains 280,954 rentable square feet in 13 three-story buildings with 36 (15%) one-bedroom, 128 (55%) two-bedroom and 70 (30%) three-bedroom apartment homes. The average size of the apartment home sis 1,201 square feet. The community offers numerous amenities including a resort-style swimming pool and spa, 24-hour state-of-the-art fitness center, resident business center and controlled access entry. This acquisition represents AMLI's entry into the southeast Florida market. On April 15, 2004 AMLI acquired a 668-unit rental community located in Houston, Texas, from Eldridge Lodge L.P., a Texas limited partnership, for $48,000,000 in cash and has renamed this community AMLI on Eldridge Parkway. AMLI on Eldridge Parkway is a luxury apartment community set on approximately 27.2 acres. Build in two phases in 1998 and 1999, the community contains 590,632 rentable square feet in 26 three-story contemporary buildings with 408 (61%) one-bedroom, 232 (35%) two-bedroom and 28 (4%) three-bedroom apartment homes. The average size of the apartment homes is 884 square feet. Extensive community amenities include two resort-style swimming pools, 24-hour state-of-the art fitness center, racquetball court, cinema room, resident business center and controlled access entry. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits. 23.1 Consent of Reznick Group, P.C., Independent Registered Public Accounting Firm. 23.2 Consent of KPMG LLP. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Trust has duly caused this report to be filed on its behalf by the undersigned thereunto duly authorized. Dated: April 5, 2005 AMLI RESIDENTIAL PROPERTIES TRUST By: /s/ Charles C. Kraft ---------------------------- Name: Charles C. Kraft Title: Principal Accounting Officer 3 HISTORICAL STATEMENTS OF REVENUE IN EXCESS OF CERTAIN EXPENSES AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AMLI AT IBIS PERIOD FROM JANUARY 1, 2004 THROUGH APRIL 15, 2004 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 2003 4 AMLI AT IBIS TABLE OF CONTENTS PAGE REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. . . . . . . . . . . . . . . . . 6 FINANCIAL STATEMENTS HISTORICAL STATEMENTS OF REVENUE IN EXCESS OF CERTAIN EXPENSES . . . . . . . . . . . . . . . . . 7 NOTES TO HISTORICAL STATEMENTS OF REVENUE IN EXCESS OF CERTAIN EXPENSES . . . . . . . . . . . . . . . . . 8 5 Reznick Group, P.C. 7700 Old Georgetown Road, Suite 400 Bethesda, Maryland 20814-6224 Tel: (301) 652-9100 Fax: (301) 652-1848 www.reznickgroup.com REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Trustees AMLI Residential Properties Trust: We have audited the accompanying Historical Statement of Revenue in Excess of Certain Expenses ("Historical Statement") of AMLI at Ibis (the "Community") for the year ended December 31, 2003. This Historical Statement is the responsibility of the management of AMLI Residential Properties Trust. Our responsibility is to express an opinion on the Historical Statement based on our audit. We conducted our audit in accordance with the 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 Historical Statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Statement. We believe that our audit provides a reasonable basis for our opinion. The accompanying Historical Statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in Form 8-K for AMLI Residential Properties Trust) as described in note 2. This presentation is not intended to be a complete presentation of the Community's revenue and expenses. In our opinion, the Historical Statement referred to above presents fairly, in all material respects, the revenue and certain expenses described in note 2 of the Community for the year ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. /s/ Reznick Group, P.C. Bethesda, Maryland March 16, 2005 6 AMLI AT IBIS HISTORICAL STATEMENTS OF REVENUE IN EXCESS OF CERTAIN EXPENSES Period from January 1, 2004 through April 15, 2004 (unaudited) and year ended December 31, 2003 (Dollars in thousands) Period from January 1, 2004 through April 15, Year Ended 2004 December 31, (unaudited) 2003 ------------- ------------ Revenue: Rent. . . . . . . . . . . . . . . . $ 901 2,666 Other . . . . . . . . . . . . . . . 35 160 -------- -------- Total . . . . . . . . . . . . . . . . 936 2,826 -------- -------- Certain expenses: Personnel . . . . . . . . . . . . . 91 231 Building repairs and maintenance. . 40 140 Landscaping and grounds maintenance 17 55 Advertising and promotion . . . . . 15 123 Utilities . . . . . . . . . . . . . 21 100 Real estate taxes . . . . . . . . . 172 524 Insurance . . . . . . . . . . . . . 46 212 Other operating expenses. . . . . . 10 50 Property management fee . . . . . . 32 111 -------- -------- Total . . . . . . . . . . . . . . . . 444 1,546 -------- -------- Revenue in excess of certain expenses. . . . . . . . $ 492 1,280 ======== ======== See accompanying notes to Historical Statements of Revenue in Excess of Certain Expenses. 7 AMLI AT IBIS NOTES TO HISTORICAL STATEMENTS OF REVENUE IN EXCESS OF CERTAIN EXPENSES Period from January 1, 2004 through April 15, 2004 (unaudited) and year ended December 31, 2003 (Dollars in thousands) NOTE 1 - COMMUNITY ACQUIRED AMLI Residential Properties Trust ("AMLI") acquired AMLI at Ibis (the "Community"), a 234-unit apartment home community located in Palm Beach County, Florida, on April 15, 2004 from the partners of a limited partnership in which Altman Development Corporation, an unrelated entity, was the sole general partner. The Community was developed by Altman Development Corporation. AMLI acquired 100% of the partnership interests in the Community at the time of purchase for an aggregate purchase price of $24,675. NOTE 2 - BASIS OF PRESENTATION The Historical Statements of Revenue in Excess of Certain Expenses have been prepared for the purpose of complying with Rule 3-14 of the Securities and Exchange Commission Regulation S-X and for inclusion in Form 8-K for AMLI and are not intended to be a complete presentation of the Community's revenue and expenses. The Historical Statements of Revenue in Excess of Certain Expenses are presented at 100% on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. The Historical Statements of Revenue in Excess of Certain Expenses are not representative of the actual operations for the periods presented as certain expenses, which may not be comparable to the expenses expected to be incurred in the proposed future operations of the Community, have been excluded. Expenses excluded consist of mortgage interest, depreciation, amortization and partnership expenses not directly related to the future operations of the Community. NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REVENUE RECOGNITION ------------------- Apartment homes are rented under lease agreements with terms of one year or less. Rental income is recognized when earned. This policy effectively results in income recognition on the straight-line method over the related terms of the leases. PROPERTY MANAGEMENT FEES ------------------------ The Community was managed by Altman Management Company, an unrelated entity of AMLI, pursuant to the terms of the management agreement. Property management fees were calculated at 4% of gross income. Subsequent to AMLI's acquisition of its partnership interest in the Community, this management agreement ceased and the Community became subject to the Master Property Management Agreement between AMLI and AMLI Management Company ("AMC"), under which the Community will be managed by AMC for a property management fee of 3.0% of total revenue. 8 AMLI AT IBIS NOTES TO HISTORICAL STATEMENTS OF REVENUE IN EXCESS OF CERTAIN EXPENSES - Continued Period from January 1, 2004 through April 15, 2004 (unaudited) and year ended December 31, 2003 (Dollars in thousands) USE OF ESTIMATES ---------------- Management is required to make estimates and assumptions that affect the reported amounts of revenue and expenses during the periods presented in order to prepare these Historical Statements of Revenue in Excess of Certain Expenses in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from these estimates. UNAUDITED INTERIM HISTORICAL STATEMENT -------------------------------------- The Historical Statement of Revenue in Excess of Certain Expenses for the period from January 1, 2004 through April 15, 2004 is unaudited. In the opinion of management, all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the Historical Statement of Revenue in Excess of Certain Expenses for the interim period have been included. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year for the Community. 9 THE LODGE ON THE PARKWAY HISTORICAL STATEMENTS OF REVENUE IN EXCESS OF CERTAIN EXPENSES PERIOD FROM JANUARY 1, 2004 THROUGH March 31, 2004 (unaudited) AND YEAR ENDED DECEMBER 31, 2003 (With Independent Auditors' Report Thereon) 10 INDEPENDENT AUDITORS' REPORT The Board of Trustees AMLI Residential Properties Trust: We have audited the accompanying Historical Statement of Revenue in Excess of Certain Expenses (Historical Statement) of The Lodge on the Parkway (Community) for the year ended December 31, 2003. This Historical Statement is the responsibility of the management of AMLI Residential Properties Trust. Our responsibility is to express an opinion on the Historical Statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Statement is free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Community's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Statement. We believe that our audit provides a reasonable basis for our opinion. The accompanying Historical Statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in Form 8-K of AMLI Residential Properties Trust) as described in note 2. This presentation is not intended to be a complete presentation of the Community's revenue and expenses. In our opinion, the Historical Statement referred to above presents fairly, in all material respects, the revenue and certain expenses described in note 2 of the Community for the year ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. /s/ KPMG LLP Chicago, Illinois March 29, 2005 11 THE LODGE ON THE PARKWAY HISTORICAL STATEMENTS OF REVENUE IN EXCESS OF CERTAIN EXPENSES Period from January 1, 2004 through May 31, 2004 (unaudited) and year ended December 31, 2003 (Dollars in thousands) Period from January 1, 2004 through March 31, Year Ended 2004 December 31, (unaudited) 2003 ------------- ------------ Revenue: Rent. . . . . . . . . . . . . . . . $ 1,399 5,651 Other . . . . . . . . . . . . . . . 59 238 -------- -------- Total . . . . . . . . . . . . . . . . 1,458 5,889 -------- -------- Certain expenses: Personnel . . . . . . . . . . . . . 103 458 Building repairs and maintenance. . 75 411 Landscaping and grounds maintenance 16 79 Advertising and promotion . . . . . 40 206 Utilities . . . . . . . . . . . . . 88 266 Real estate taxes . . . . . . . . . 289 1,144 Insurance . . . . . . . . . . . . . 41 168 Other operating expenses. . . . . . 44 127 -------- -------- Total . . . . . . . . . . . . . . . . 696 2,859 -------- -------- Revenue in excess of certain expenses. . . . . . . . $ 762 3,030 ======== ======== See accompanying notes to Historical Statements of Revenue in Excess of Certain Expenses. 12 THE LODGE ON THE PARKWAY NOTES TO HISTORICAL STATEMENTS OF REVENUE IN EXCESS OF CERTAIN EXPENSES Period form January 1, 2004 through March 31, 2004 (unaudited) and year ended December 31, 2003 (1) COMMUNITY ACQUIRED On April 15, 2004, AMLI Residential Properties, L.P. (AMLI or the Company) acquired The Lodge on the Parkway (Community), a 668 apartment home community located in Houston, Texas. The Community was previously owned by Eldridge Lodge L.P. (2) BASIS OF PRESENTATION The Historical Statements of Revenue in Excess of Certain Expenses have been prepared for the purpose of complying with Rule 3-14 of the Securities and Exchange Commission Regulation S-X and for inclusion in Form 8-K for the Company and are not intended to be a complete presentation of the Community's revenue and expenses. The Historical Statements of Revenue in Excess of Certain Expenses are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. The Historical Statements of Revenue in Excess of Certain Expenses are not representative of the actual operations for the periods presented as certain expenses, which may not be comparable to the expenses expected to be incurred in the proposed future operations of the Community, have been excluded. Expenses excluded consist of property management fees, depreciation and amortization and other expenses not directly related to the future operations of the Community. (3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) REVENUE RECOGNITION Apartment homes are rented under lease agreements with terms of one year or less. Rental income is recognized when earned. This policy effectively results in income recognition on the straight-line method over the related terms of the leases. (b) USE OF ESTIMATES Management has made a number of estimates and assumptions relating to the reporting of revenue and certain expenses for the periods presented to prepare these Historical Statements of Revenue in Excess of Certain Expenses in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from these estimates. (c) UNAUDITED INTERIM HISTORICAL STATEMENT The Historical Statement of Revenue in Excess of Certain Expenses for the period from January 1, 2004 through March 31, 2004 is unaudited. In the opinion of management, all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the Historical Statement of Revenue in Excess of Certain Expenses for the interim period have been included. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year for the Community. 13 EXHIBIT INDEX Exhibit Number Description ------- ----------- 23.1 Consent of Reznick Group, P.C., Independent Registered Public Accounting Firm. 23.2 Consent of KPMG LLP. 14