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): APRIL 29, 1999
VININGS INVESTMENT PROPERTIES TRUST
-------------------------------------------------
(Exact name of Registrant as specified in charter)
MASSACHUSETTS 0-13693
- ---------------------------- -----------------------
(State or other jurisdiction (Commission file number)
of incorporation)
13-6850434
-------------------
(IRS employer
identification no.)
3111 PACES MILL ROAD, ATLANTA, GEORGIA 30339
-------------------------------------------------
(Address of principal executive offices) (Zip Code)
(770) 984-9500
--------------------------------------------------
(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 1, 1999, Vinings Investment Properties Trust, through its subsidiaries,
(together "Vinings") completed the acquisition of thirteen multifamily
communities (collectively, the "Portfolio Properties") from seventeen limited
partnerships and limited liability companies. Eight of the Portfolio Properties
(the "Vinings Properties") were purchased through subsidiaries of Vinings
Investment Properties, L.P. (the "Operating Partnership"). The remaining
Portfolio Properties (the "Joint Venture Properties") were purchased through a
joint venture in which Vinings has a 20% interest (the "Joint Venture"). For
additional details regarding the description of this acquisition and the
Portfolio Properties, see Item 2 of the Current Report on Form 8-K filed with
the Securities and Exchange Commission on May 7, 1999.
ITEM 5. OTHER EVENTS
On April 29, 1999, in a private transaction, the Operating Partnership issued
1,958,823 Series A Units of the Partnership (the "Preferred Units"), for an
aggregate purchase price of $8,325,000 pursuant to a Securities Purchase
Agreement (the "Purchase Agreement").
On June 7, 1999, in a private transaction, an additional 29,412 Preferred Units
were issued for $125,000 pursuant to the Purchase Agreement for a total of
1,988,235 Preferred Units at an aggregate purchase price of $8,450,000.
The Operating Partnership used the proceeds of such sales of Preferred Units to
pay the cash consideration for the Operating Partnership's interests in the
Joint Venture and in the property partnerships that acquired the Vinings
Properties. For additional details regarding the terms of the Purchase
Agreement, see Item 5 of the Current Report on Form 8-K filed with the
Securities and Exchange Commission on May 7, 1999.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
The financial statements required by Item 7(a) relating to the acquisition
of the Vinings Properties and the Joint Venture Properties are attached
hereto as Exhibit 99.1 and 99.2, respectively, and incorporated herein by
reference.
(b) Pro Forma Financial Information
The unaudited pro forma financial information required by Item 7(b)
relating to the acquisition of the Portfolio Properties is attached hereto
as Exhibit 99.3 and incorporated herein by reference.
(c) Exhibits
Exhibit
No. Description
- --------- ----------------------------------------------------------------------
99.1 Combined Statements of Revenues Over Specific Operating Expenses for
the Vinings Properties for the Period from January 1, 1999 to March
31, 1999 (unaudited) and the year ended December 31, 1998.
99.2 Combined Statements of Revenues Over Specific Operating Expenses for
the Joint Venture Properties for the Period from January 1, 1999 to
March 31, 1999 (unaudited) and the year ended December 31, 1998.
99.3 Unaudited Pro Forma Consolidated Financial Statements
10.1 Vinings/CMS Master Partnership, L.P., Agreement of Limited Partnership
10.2 Sixth Amendment, dated as of April 29, 1999, to the Amended and
Restated Agreement of Limited Partnership of Vinings Investment
Properties, L.P. (incorporated by reference to Exhibit 4.1 to the
Registrant's current report on Form 8-K filed with the Securities and
Exchange Commission on May 7, 1999).
10.3 Securities Purchase Agreement, dated as of April 29, 1999, Relating to
Series A Convertible Preferred Partnership Units of Vinings Investment
Properties, L.P., by and among Vinings Investment Properties Trust,
Vinings Investment Properties, L.P. and the Purchasers named therein
(incorporated by reference to Exhibit 10.1 to the Registrant's current
report on Form 8-K filed with the Securities and Exchange Commission
on May 7, 1999).
10.4 Form of Registration Rights and Lock Up Agreement, dated as of April
29, 1999 (incorporated by reference to Exhibit 10.2 to the
Registrant's current report on Form 8-K filed with the Securities and
Exchange Commission on May 7, 1999).
23.1 Consent of Arthur Andersen LLP - Independent Public Accountants
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 hereunto duly authorized.
VININGS INVESTMENT PROPERTIES TRUST
Date: July 15, 1999 By: /s/ Stephanie A. Reed
---------------------
Stephanie A. Reed
Vice President and Treasurer
INDEX TO EXHIBITS
Exhibit
No. Description
- --------- ----------------------------------------------------------------------
99.1 Combined Statements of Revenues Over Specific Operating Expenses for
the Vinings Properties for the Period from January 1, 1999 to March
31, 1999 (unaudited) and the year ended December 31, 1998.
99.2 Combined Statements of Revenues Over Specific Operating Expenses for
the Joint Venture Properties for the Period from January 1, 1999 to
March 31, 1999 (unaudited) and the year ended December 31, 1998.
99.3 Unaudited Pro Forma Consolidated Financial Statements
10.1 Vinings/CMS Master Partnership, L.P., Agreement of Limited Partnership
10.2 Sixth Amendment, dated as of April 29, 1999, to the Amended and
Restated Agreement of Limited Partnership of Vinings Investment
Properties, L.P. (incorporated by reference to Exhibit 4.1 to the
Registrant's current report on Form 8-K filed with the Securities and
Exchange Commission on May 7, 1999).
10.3 Securities Purchase Agreement, dated as of April 29, 1999, Relating to
Series A Convertible Preferred Partnership Units of Vinings Investment
Properties, L.P., by and among Vinings Investment Properties Trust,
Vinings Investment Properties, L.P. and the Purchasers named therein
(incorporated by reference to Exhibit 10.1 to the Registrant's current
report on Form 8-K filed with the Securities and Exchange Commission
on May 7, 1999).
10.4 Form of Registration Rights and Lock Up Agreement, dated as of April
29, 1999 (incorporated by reference to Exhibit 10.2 to the
Registrant's current report on Form 8-K filed with the Securities and
Exchange Commission on May 7, 1999).
23.1 Consent of Arthur Andersen LLP - Independent Public Accountants
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To Vinings Investment Properties Trust:
We have audited the accompanying combined statement of revenues over specific
operating expenses of the Vinings Properties (see Note 1) for the year ended
December 31, 1998. This combined financial statement is the responsibility of
management. Our responsibility is to express an opinion on this combined
financial statement 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 statement of revenues
over specific operating expenses is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the combined statement of revenues over specific operating
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As described in Note 1, this combined financial statement excludes certain
expenses that would not be comparable with those resulting from the operations
of the Vinings Properties after acquisition by the Trust. The accompanying
combined statement of revenues over specific operating expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission and is not intended to be a complete presentation of
the Vinings Properties' revenues and expenses.
In our opinion, the combined statement of revenues over specific operating
expenses presents fairly, in all material respects, the revenues over specific
operating expenses of the Vinings Properties for the year ended December 31,
1998 in conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Atlanta, Georgia
June 30, 1999
VININGS PROPERTIES
COMBINED STATEMENTS OF REVENUES OVER
SPECIFIC OPERATING EXPENSES
-------------------------------------
For the Period
From
January 1, 1999 to Year Ended
March 31, 1999 December 31,
(Unaudited) 1998
------------------- ------------
REVENUES:
Rental revenues $ 1,772,002 $7,026,704
Other property revenues 91,250 432,968
----------------- ------------
Total property revenues 1,863,252 7,459,672
----------------- ------------
SPECIFIC OPERATING EXPENSES:
Property operating and maintenance 661,773 2,672,206
Interest expense 957,564 3,853,806
----------------- ------------
Total specific operating expenses 1,619,337 6,526,012
----------------- ------------
REVENUES OVER SPECIFIC OPERATING EXPENSES $ 243,915 $ 933,660
================= ============
See accompanying notes to financial statements.
VININGS PROPERTIES
NOTES TO COMBINED STATEMENTS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE PERIOD FROM JANUARY 1, 1999 TO
MARCH 31, 1999 (UNAUDITED) AND
FOR THE YEAR ENDED DECEMBER 31, 1998
---------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Description of Real Estate Property Acquired
--------------------------------------------
On May 1, 1999, Vinings Investment Properties Trust (the "Trust" or
"Vinings"), through its subsidiaries, completed the acquisition of thirteen
multifamily communities (collectively, the "Portfolio Properties") from
seventeen limited partnerships and limited liability companies. Eight of
the Portfolio Properties (the "Vinings Properties") were purchased through
subsidiary partnerships of Vinings Investment Properties, L.P. (the
"Operating Partnership"), a majority-owned subsidiary of the Trust. The
remaining Portfolio Properties (the "Joint Venture Properties") were
purchased through a joint venture in which the Operating Partnership has a
20% interest (the "Joint Venture").
Properties Purchased through Operating Partnership
--------------------------------------------------
The Vinings Properties, totaling 1,064 units, were purchased by eight
individual partnerships in each of which Vinings Holdings, Inc., a wholly
owned subsidiary of the Trust, owns a .1% general partnership interest and
the Operating Partnership owns a 99.9% limited partnership interest. The
aggregate purchase price for the Vinings Properties was $47,665,396
(excluding closing costs), which included the assumption of debt of
approximately $41,693,000 and the balance being paid in cash. A total of
approximately $749,200 in escrows held by the mortgagees was also
purchased.
Properties Purchased Through Joint Venture
------------------------------------------
The Joint Venture Properties, totaling 968 units, were purchased by nine
individual partnerships in each of which Vinings Holdings, Inc. owns a .1%
general partnership interest and Vinings/CMS Master Partnership, L.P. (the
"Joint Venture") owns a 99.9% limited partnership interest. The Operating
Partnership is the general partner and a 19.98% limited partner in the
Joint Venture, for which it paid $1,705,000. The remaining limited
partnership interests in the Joint Venture are held by an unaffiliated
third party. The Joint Venture was formed on March 22, 1999, primarily to
acquire the limited partner interest in limited partnerships that acquire,
operate, manage, hold and sell certain real property, specifically the
Joint Venture Properties. The aggregate purchase price paid by the property
partnerships for the Joint Venture Properties was $46,634,603 (excluding
closing costs), which included the assumption of approximately $39,265,000
of debt and the balance being paid in cash. A total of approximately
$716,400 in escrows held by the mortgagees was also purchased.
Use of Estimates
----------------
The preparation of the accompanying combined statements of revenues over
specific operating expenses in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Revenue Recognition
-------------------
All leases are classified as operating leases and rental income is
recognized when earned which materially approximates revenue recognition on
a straight-line basis.
Basis of Presentation
---------------------
The accompanying combined statements of revenues over specific operating
expenses include the combined operations of the Vinings Properties, which
were owned by parties not related to the Trust prior to their acquisition.
The accompanying combined statements of revenues over specific operating
expenses have been prepared in accordance with the applicable rules and
regulations of the Securities and Exchange Commission for real estate
properties acquired. Accordingly, the statements exclude certain historical
expenses not comparable to the operations after acquisition by the Trust,
such as management fees, depreciation and amortization.
2. RELATED PARTY TRANSACTIONS
In connection with the acquisition of the Vinings Properties, MFI Realty,
Inc., an affiliate of the officers, who are also trustees of the Trust,
received a fee totaling $167,103, which was paid by Vinings. In addition,
the Vinings Properties will be managed by an affiliate of the officers of
the trust for a percentage of gross revenues.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To Vinings Investment Properties Trust:
We have audited the accompanying combined statement of revenues over specific
operating expenses of the Joint Venture Properties (see Note 1) for the year
ended December 31, 1998. This combined financial statement is the
responsibility of management. Our responsibility is to express an opinion on
this combined financial statement 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 statement of revenues
over specific operating expenses is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the combined statement of revenues over specific operating
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As described in Note 1, this combined financial statement excludes certain
expenses that would not be comparable with those resulting from the operations
of the Joint Venture Properties after acquisition by the Trust. The
accompanying combined statement of revenues over specific operating expenses
was prepared for the purpose of complying with the rules and regulations of
the Securities and Exchange Commission and is not intended to be a complete
presentation of the Joint Venture Properties' revenues and expenses.
In our opinion, the combined statement of revenues over specific operating
expenses presents fairly, in all material respects, the revenues over specific
operating expenses of the Joint Venture Properties for the year ended December
31, 1998 in conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Atlanta, Georgia
June 30, 1999
JOINT VENTURE PROPERTIES
COMBINED STATEMENTS OF REVENUES OVER
SPECIFIC OPERATING EXPENSES
------------------------------------
For the Period
From
January 1, 1999 to Year Ended
March 31, 1999 December 31,
(Unaudited) 1998
------------------ ------------
REVENUES:
Rental revenues $ 1,668,069 $6,708,599
Other property revenues 75,012 258,939
---------------- ------------
Total property revenues 1,758,081 6,967,538
---------------- ------------
SPECIFIC OPERATING EXPENSES:
Property operating and maintenance 650,981 2,738,818
Interest expense 866,143 3,485,860
---------------- ------------
Total specific operating expenses 1,517,124 6,224,678
---------------- ------------
REVENUES OVER SPECIFIC OPERATING EXPENSES $ 240,957 $ 742,860
================ ============
See accompanying notes to financial statements.
JOINT VENTURE PROPERTIES
NOTES TO COMBINED STATEMENTS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE PERIOD FROM JANUARY 1, 1999 TO
MARCH 31, 1999 (UNAUDITED) AND
FOR THE YEAR ENDED DECEMBER 31, 1998
----------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Description of Real Estate Property Acquired
--------------------------------------------
On May 1, 1999, Vinings Investment Properties Trust (the "Trust" or
"Vinings"), through its subsidiaries, completed the acquisition of thirteen
multifamily communities (collectively, the "Portfolio Properties") from
seventeen limited partnerships and limited liability companies. Eight of
the Portfolio Properties (the "Vinings Properties") were purchased through
subsidiary partnerships of Vinings Investment Properties, L.P. (the
"Operating Partnership"), a majority-owned subsidiary of the Trust. The
remaining Portfolio Properties (the "Joint Venture Properties") were
purchased through a joint venture in which the Operating Partnership has a
20% interest (the "Joint Venture").
Properties Purchased through Operating Partnership
--------------------------------------------------
The Vinings Properties, totaling 1,064 units, were purchased by eight
individual partnerships in each of which Vinings Holdings, Inc., a wholly
owned subsidiary of the Trust, owns a .1% general partnership interest and
the Operating Partnership owns a 99.9% limited partnership interest. The
aggregate purchase price for the Vinings Properties was $47,665,396
(excluding closing costs), which included the assumption of debt of
approximately $41,693,000 and the balance being paid in cash. A total of
approximately $749,200 in escrows held by the mortgagees was also
purchased.
Properties Purchased Through Joint Venture
------------------------------------------
The Joint Venture Properties, totaling 968 units, were purchased by nine
individual partnerships in each of which Vinings Holdings, Inc. owns a .1%
general partnership interest and Vinings/CMS Master Partnership, L.P. (the
"Joint Venture") owns a 99.9% limited partnership interest. The Operating
Partnership is the general partner and a 19.98% limited partner in the
Joint Venture, for which it paid $1,705,000. The remaining limited
partnership interests in the Joint Venture are held by an unaffiliated
third party. The Joint Venture was formed on March 22, 1999, primarily to
acquire the limited partner interest in limited partnerships that acquire,
operate, manage, hold and sell certain real property, specifically the
Joint Venture Properties. The aggregate purchase price paid by the property
partnerships for the Joint Venture Properties was $46,634,603 (excluding
closing costs), which included the assumption of approximately $39,265,000
of debt and the balance being paid in cash. A total of approximately
$716,400 in escrows held by the mortgagees was also purchased.
Use of Estimates
----------------
The preparation of the accompanying combined statements of revenues over
specific operating expenses in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Revenue Recognition
-------------------
All leases are classified as operating leases and rental income is
recognized when earned which materially approximates revenue recognition on
a straight-line basis.
Basis of Presentation
---------------------
The accompanying combined statements of revenues over specific operating
expenses include the combined operations of the Joint Venture Properties,
which were owned by entities that are not related to the Joint Venture or
the Trust prior to their acquisition.
The accompanying combined statements of revenues over specific operating
expenses have been prepared in accordance with the applicable rules and
regulations of the Securities and Exchange Commission for real estate
properties acquired. Accordingly, the statements exclude certain historical
expenses not comparable to the operations after acquisition by the Joint
Venture, such as management fees, depreciation and amortization.
2. RELATED PARTY TRANSACTIONS
In connection with the acquisition of the Joint Venture Properties, MFI
Realty, Inc., an affiliate of the officers, who are also trustees of the
Trust, received a fee totaling $233,173, which was paid by the Joint
Venture. In addition, the Joint Venture Properties will be managed by an
affiliate of the officers of the trust for a percentage of gross revenues.
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
------------------------------------------------
The unaudited consolidated statements of operations are presented as if the
Trust acquired the Vinings Properties and the Trust's interest in the Joint
Venture as of January 1, 1998. The unaudited pro forma consolidated statements
of operations of the Trust for the three months ended March 31, 1999 and for the
year ended December 31, 1998 include the historical revenues and specific
operating expenses of the Vinings Properties, and the Trust's 20% interest in
the historical revenues and specific operating expenses of the Joint Venture
Properties under the equity method of accounting. In management's opinion, all
adjustments necessary to present fairly the effects of the acquisition of the
Vinings Properties and the Trust's interest in the Joint Venture have been made.
The unaudited consolidated statements of operations of the Trust should be read
in conjunction with the unaudited pro forma consolidated balance sheet of the
Trust included herein, the consolidated financial statements and accompanying
notes thereto of the Trust included in its Annual Report on Form 10-K for the
year ended December 31, 1998, and the unaudited consolidated financial
statements and accompanying notes thereto of the Trust included in its March 31,
1999 Quarterly Report on Form 10-Q.
The unaudited pro forma statements of operations are not necessarily indicative
of what the actual results of operations of the Trust would have been assuming
the Trust had acquired the Vinings Properties and the Trust's interest in the
Joint Venture as of January 1, 1998, nor do they purport to represent the
results of operations for future periods.
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(UNAUDITED)
-----------------------------------------------
Pro Forma
Historical Acquisition
(A) Adjustments Pro Forma
----------- ----------------- --------------
REVENUES
Rental revenues $ 998,389 $ 1,772,002 (B) $2,770,391
Other property revenues 40,374 91,250 (B) 131,624
Other income 12,000 - 12,000
----------- --------------- -----------
1,050,763 1,863,252 2,914,015
----------- --------------- -----------
EXPENSES
Property operating and maintenance 397,549 661,773 (B) 1,124,536
65,214 (C)
Depreciation and amortization 166,557 384,146 (D) 550,703
Amortization of deferred financing costs 7,726 - 7,726
Interest expense 332,079 957,564 (E) 1,289,643
General and administrative 143,537 - 143,537
----------- --------------- -----------
1,047,448 2,068,697 3,116,145
----------- --------------- -----------
Income (loss) before equity in loss of unconsolidated
joint venture and minority interests 3,315 (205,445) (202,130)
Equity in loss of unconsolidated joint venture - (41,009)(F) (41,009)
----------- --------------- -----------
Income (loss) before minority interests 3,315 (246,454) (243,139)
Minority interest in Operating Partnership:
Preferred partnership interests - (232,375)(G) (232,375)
Common partnership interests (599) 86,473 (H) 85,874
---------- --------------- -----------
Net income (loss) $ 2,716 $ (392,356) $ (389,640)
=========== =============== ===========
NET INCOME PER SHARE - BASIC $ 0.00 $ (0.35)
=========== ===========
NET INCOME PER SHARE - DILUTED $ 0.00 $ (0.35)
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 1,100,505 1,100,505
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED (I) 1,343,051 1,343,051
=========== ===========
<FN>
See accompanying notes to financial statements.
</FN>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED)
----------------------------------------------
Pro Forma
Historical Acquisition
(A) Adjustments Pro Forma
------------- --------------- ------------
REVENUES
Rental revenues $3,946,828 $ 7,026,704 (B) $10,973,532
Other property revenues 153,092 425,803 (B) 578,895
Interest income 1,519 7,165 (B) 8,684
Other income 564 - 564
------------- --------------- ------------
4,102,003 7,459,672 11,561,675
------------- --------------- ------------
EXPENSES
Property operating and maintenance 1,652,207 2,672,206 (B) 4,585,502
261,089 (C)
Depreciation and amortization 647,760 1,536,583 (D) 2,184,343
Amortization of deferred financing costs 30,903 - 30,903
Interest expense 1,329,277 3,853,806 (E) 5,183,083
General and administrative 598,873 - 598,873
Unusual item, net (260,910) - (260,910)
------------- --------------- ------------
3,998,110 8,323,684 12,321,794
------------- --------------- ------------
Income (loss) before equity in loss of unconsolidated
joint venture and minority interests 103,893 (864,012) (760,119)
Equity in loss of unconsolidated joint venture - (206,923)(F) (206,923)
------------- --------------- ------------
Income (loss) before minority interests 103,893 (1,070,935) (967,042)
Minority interests in Operating Partnership:
Preferred partnership interests - (1,347,029)(G) (1,347,029)
Common partnership interests (18,900) 439,879 (H) 420,979
------------- --------------- ------------
Net income (loss) $ 84,993 $(1,978,085) $(1,893,092)
============= =============== ============
NET INCOME PER SHARE - BASIC $0.08 $(1.74)
============= ============
NET INCOME PER SHARE - DILUTED $0.08 $(1.74)
============= ============
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 1,090,701 1,090,701
============= ============
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED (I) 1,336,391 1,336,391
============= ============
<FN>
See accompanying notes to pro forma financial statements.
</FN>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
NOTES AND ASSUMPTIONS TO UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF OPERATIONS
----------------------------------------------
(A) Represents the Trust's unaudited historical consolidated statement of
operations contained in its Quarterly Report on Form 10-Q for the three
months ended March 31, 1999 and the Trust's historical consolidated
statement of operations contained in its Annual Report on Form 10-K for the
year ended December 31, 1998, as applicable.
(B) Represents the pro forma adjustments necessary to reflect the historical
rental revenues, other property revenues, and property operating and
maintenance expenses for the Vinings Properties for the three months ended
March 31, 1999 and for the year ended December 31, 1998, respectively, as
derived from the statements of revenues over specific operating expenses
included herein.
(C) Represents the pro forma adjustments necessary to reflect management fees
for the three months ended March 31, 1999 and for the year ended December
31, 1998, respectively, calculated at 3.5% of gross revenues, which will be
paid to an affiliate of the officers of the Trust.
(D) Represents the pro forma adjustments necessary to reflect depreciation
expense for the three months ended March 31, 1999 and for the year ended
December 31, 1998, respectively, calculated based on the costs associated
with the acquisition of the Vinings Properties using the straight-line
method of depreciation over a 40-year life for buildings and improvements
and a 5-year life for furniture, fixtures and equipment.
(E) Represents the pro forma adjustments necessary to reflect historical
interest expense, including the FHA insurance premium associated with the
mortgages, which were assumed at closing for the three months ended March
31, 1999 and for the year ended December 31, 1998, respectively, as derived
from the statements of revenues over specific operating expenses included
herein.
(F) Represents the pro forma adjustments necessary to reflect the Trust's 20%
interest in the historical rental revenues, other property revenues,
property operating and maintenance expenses, and interest expense for the
Joint Venture Properties for the three months ended March 31, 1999 and for
the year ended December 31, 1998, respectively, as derived from the
statements of revenues over specific operating expenses included herein,
adjusted for management fees calculated at 4.25% of gross revenues, which
will be paid to an affiliate of the officers of the Trust, and for
depreciation expense calculated based on the costs associated with the
acquisition of the Joint Venture Properties using the straight-line method
of depreciation over a 40-year life for buildings and improvements and a
5-year life for furniture, fixtures and equipment. The Trust accounts for
its investment in the Joint Venture using the equity method of accounting
as follows:
For the Period
From
January 1, 1999 to Year Ended
March 31, 1999 December 31,
(Unaudited) 1998
---------------- --------------
Revenues over specific operating expenses $ 240,957 $ 742,860
Less pro forma adjustments for:
Management fees 74,718 296,121
Depreciation 371,283 1,481,353
-------------- --------------
Pro forma revenues over specific
operating expenses (205,044) (1,034,614)
Trust's interest in Joint Venture 20% 20%
-------------- --------------
Pro forma equity in loss of
unconsolidated Joint Venture $ (41,009) $ (206,923)
============== ==============
(G) Represents the accrued preferred 11% return on the preferred partnership
interests for the three months ended March 31, 1999 and for the year ended
December 31, 1998, respectively, and the accrued liquidation preference of
$.21 per preferred partnership unit for the year ended December 31, 1998.
(H) Represents the 18% minority common partnership interests in income before
minority interest and after the accrued preferred return.
(I) The diluted weighted average shares outstanding do not include 1,988,235
preferred partnership units that are convertible into common shares of the
Trust on a one-for-one basis as the impact of these preferred partnership
units was antidilutive.
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
(UNAUDITED)
------------------------------------
The unaudited pro forma consolidated balance sheet is presented as if the Trust
acquired the Vinings Properties and the Trust's interest in the Joint Venture as
of March 31, 1999. The unaudited pro forma consolidated balance sheet is not
necessarily indicative of what the actual financial position of the Trust would
have been at March 31, 1999, nor does it purport to represent the future
financial position of the Trust.
The unaudited consolidated balance sheet should be read in conjunction with the
unaudited pro forma consolidated statements of operations of the Trust included
herein, the consolidated financial statements and accompanying notes thereto of
the Trust included in its Annual Report on Form 10-K for the year ended December
31, 1998, and the unaudited consolidated financial statements and accompanying
notes thereto of the Trust included in its March 31, 1999 Quarterly Report on
Form 10-Q.
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1999
(UNAUDITED)
-------------------------------------
Pro Forma
Historical Acquisition
(A) Adjustments Pro Forma
------------ --------------- ------------
ASSETS
Real estate assets:
Land $ 2,884,500 $ 5,363,400 (B) $ 8,247,900
Buildings and improvements 15,519,694 40,008,128 (B) 55,527,822
Furniture, fixtures & equipment 1,034,124 2,687,292 (B) 3,721,416
Less: accumulated depreciation (1,824,545) - (1,824,545)
------------ --------------- ------------
Net real estate assets 17,613,773 48,058,820 65,672,593
Investment in unconsolidated partnership - 1,705,000 (C) 1,705,000
Cash and cash equivalents 243,978 - 243,978
Restricted cash 472,860 1,025,471 (B) 1,498,331
Receivables and other assets 688,988 85,494 (B) 149,118
(625,364)(B)
Deferred financing costs, less accumulated amortization
of $84,984 at March 31, 1999 131,339 - 131,339
Deferred leasing costs, less accumulated amortization of
$39,552 at March 31, 1999 57,354 - 57,354
------------ --------------- ------------
Total Assets $19,208,292 $50,249,421 $69,457,713
============ =============== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage notes payable $13,602,078 $41,692,503 (B) $55,294,581
Line of credit 2,000,000 - 2,000,000
Accounts payable and accrued liabilities 641,038 106,918 (B) 747,956
------------ --------------- ------------
Total Liabilities 16,243,116 41,799,421 58,042,537
------------ --------------- ------------
Minority interest in Operating Partnership:
Preferred partnership interest - 8,450,000 (D) 8,450,000
Common partnership interest 535,491 - 535,491
------------ --------------- ------------
Total minority interest 535,491 8,450,000 8,985,491
Shareholders' Equity:
Shares of beneficial interest, without par value 19,502,908 - 19,502,908
Cumulative earnings 37,305,306 - 37,305,306
Cumulative distributions (54,378,529) - (54,378,529)
------------ --------------- ------------
Total Shareholders' Equity 2,429,685 - 2,429,685
------------ --------------- ------------
Total Liabilities and Shareholders' Equity $19,208,292 $50,249,421 $69,457,713
============ =============== ============
<FN>
See accompanying notes to pro forma financial statements.
</FN>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
NOTES AND ASSUMPTIONS TO UNAUDITED PRO FORMA BALANCE SHEET
----------------------------------------------------------
(A) Represents the Trust's unaudited historical consolidated balance sheet
contained in its Quarterly Report on Form 10-Q for the three months ended
March 31, 1999.
(B) Represents the proforma adjustments necessary to reflect the aggregate
acquisition costs of the Vinings Properties, the assumption of related
mortgage indebtedness and related liabilities and the acquisition of the
tax, insurance and replacement reserve escrows and security deposit cash
accounts.
(C) Represents the proforma adjustment necessary to reflect the Trust's
investment in the Joint Venture.
(D) Represents the proforma adjustment necessary to reflect the issuance of
1,988,235 preferred operating partnership units in Vinings Investment
Properties, L.P. in connection with the acquisition of the Vinings
Properties and the Trust's investment in the Joint Venture, which are
convertible into common shares of the Trust on a one-for-one basis.