1
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): DECEMBER 16, 1997
BAY APARTMENT COMMUNITIES, INC.
(Exact name of Registrant as specified in charter)
MARYLAND 1-12672 77-0404318
- ---------------------------- ------------ -------------------
(State or other jurisdiction (Commission (IRS employer
of incorporation) file number) identification no.)
4340 STEVENS CREEK BOULEVARD, SUITE 275, SAN JOSE, CA 95129
-----------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(408) 983-1500
----------------------------------------------------
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
This Current Report on Form 8-K of Bay Apartment Communities, Inc. (the
"Company") contains forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. The forward-looking statements contained
herein are statements that involve risks and uncertainties, including, but not
limited to, the demand for apartment homes, the effects of economic conditions,
the impact of competition and competitive pricing, changes in construction
costs, the results of financing efforts, potential acquisitions under agreement,
the effects of the Company's accounting policies and other risks detailed in the
Company's filings with the Securities and Exchange Commission (the
"Commission").
AMENDMENT OF CREDIT FACILITY
On November 21, 1997, the Company amended its $200 million unsecured
acquisition and construction line of credit (the "Unsecured Credit Facility")
from Union Bank of Switzerland and other participating banks, which was
originally received in May 1996, amended in August 1996, and subsequently
amended and restated on July 2, 1997. Under the terms of the Second Amended and
Restated Revolving Loan Agreement, the maximum revolving credit amount was
increased to $350 million. The Unsecured Credit Facility bears interest at the
London Interbank Offered Rate (based on a maturity selected by the Company) plus
0.90% per annum and matures in May 2000.
PROPERTY ACQUISITION
GOVERNOR'S SQUARE. On December 11, 1997, the Company acquired a 302
apartment home community located in Sacramento, California from GSW Associates,
Ltd. & GSE Associates, Ltd. The purchase price for this community was
approximately $24.8 million, which included $14.4 million of assumed
indebtedness. The amount of the purchase price payable to the seller at closing,
approximately $10.3 million, was funded by drawing on the Company's Unsecured
Credit Facility. Neither the Company, any subsidiary of the Company nor any
director or officer of the Company was affiliated with or had a material
relationship with the seller of this community. This community was previously
described in the Company's Current Report on Form 8-K, dated October 31, 1997,
under the section "Proposed Acquisitions," and the financial statements required
under Rule 3-14 of Regulation S-X were filed therewith.
Following this acquisition, the Company's portfolio consists of 49
communities containing 13,124 apartment homes (including apartment homes
delivered at Toscana, a partially developed community) and six land sites on
which it is building, or plans to commence building in the future, six
communities, which will contain an aggregate of approximately 1,698 apartment
homes (including the remaining apartment homes under construction at Toscana).
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PROPOSED ACQUISITIONS
The following are proposed acquisition communities. The Company anticipates
that these proposed acquisitions will be funded by drawing on the Company's
Unsecured Credit Facility and working capital. Because the purchase of each of
the proposed acquisition communities is still pending, there can be no assurance
that the Company will consummate the acquisition of any or all of the proposed
acquisition communities or, if acquired, that they will be purchased on the
terms currently contemplated. Neither the Company, any subsidiary of the Company
nor any director or officer of the Company is affiliated with or has a material
relationship with the seller of the proposed acquisition communities described
below.
WATERHOUSE PLACE ACQUISITION COMMUNITY. The Company has agreed to purchase
a 279 apartment home community located in Beaverton, Oregon from Pacific Gulf
Properties, Inc. The purchase price for this community is anticipated to be
approximately $15.6 million. This acquisition is expected to close in
December 1997.
MISSION BAY CLUB ACQUISITION COMMUNITY. The Company has agreed to purchase
a 564 apartment home community located in San Diego, California from The
Travelers Insurance Company. The purchase price for this community is
anticipated to be approximately $43.8 million. This acquisition is expected to
close in December 1997.
WESTWOOD CLUB ACQUISITION COMMUNITY. The Company has agreed to purchase a
363 apartment home community located in Los Angeles, California from The
Travelers Insurance Company. The purchase price for this community is
anticipated to be approximately $32.1 million. This acquisition is expected to
close in December 1997.
PACIFICA CLUB ACQUISITION COMMUNITY. The Company has agreed to purchase a
304 apartment home community located in Huntington Beach, California from The
Travelers Insurance Company. The purchase price for this community is
anticipated to be approximately $26.8 million. This acquisition is expected to
close in December 1997.
AMBERWAY ACQUISITION COMMUNITY. The Company has agreed to purchase a 272
apartment home community located in Anaheim, California from The Travelers
Insurance Company. The purchase price for this community is anticipated to be
approximately $17.5 million. This acquisition is expected to close in
January 1998.
ARBOR PARK ACQUISITION COMMUNITY. The Company has agreed to purchase a 260
apartment home community located in Upland, California from The Travelers
Insurance Company. The purchase price for this community is anticipated to be
approximately $12.4 million. This acquisition is expected to close in
January 1998.
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Each of the Mission Bay, Westwood Club, Pacifica Club, Amberway and Arbor
Park Acquisition Communities will be acquired from The Travelers Insurance
Company. The aggregate purchase price of $102.7 million for the Mission Bay,
Westwood Club and Pacifica Club Acquisition Communities, each of which the
Company intends to acquire in December 1997, will be subject to an increase in
the amount of $2.3 million in the event the Company does not consummate the
acquisition of each of the Amberway and Arbor Park Acquisition Communities in
January 1998.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements under Rule 3-14 of Regulation S-X
(b) Pro Forma Financial Statements
(c) Exhibits
1.1 Underwriting Agreement dated December 8, 1997, between the Company
and PaineWebber Incorporated, relating to the sale of 156,600 shares
of the Company's common stock, par value $.01 per share.
10.1 Second Amended and Restated Revolving Loan Agreement dated
November 21, 1997, between the Company, Union Bank of Switzerland, as
Co-Agent and Bank, Union Bank of California, N.A, as Co-Agent and
Bank, Union Bank of Switzerland, as Administrative Agent, and the
other Banks signatory thereto.
23.1 Consent of Coopers & Lybrand L.L.P., Independent Accountants.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Company has duly caused this report to be filed on its behalf by
the undersigned thereunto duly authorized.
BAY APARTMENT COMMUNITIES, INC.
Dated: December 16, 1997 By:/s/ Jeffrey B. Van Horn
----------------------------------------------
Name: Jeffrey B. Van Horn
Title: Vice President, Chief Financial Officer
and Secretary
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REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Bay Apartment Communities, Inc.:
We have audited the accompanying Historical Summary of Revenues and Direct
Operating Expenses (the Historical Summary) of Arbor Park Apartments, Upland,
California (the Property) for the 12 months ended May 31, 1997. The Historical
Summary is the responsibility of the Property's owner. Our responsibility is to
express an opinion on the 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 Historical Summary is free of material misstatement.
An audit includes examining on a test basis, evidence supporting the amounts and
disclosures in the Historical Summary. An audit also includes assessing the
basis of accounting used and significant estimates made by management, as well
as evaluating the overall presentation of the Historical Summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with rules and regulations of the Securities and Exchange Commission, as
described in Note A, and is not intended to be a complete presentation of the
Property's revenues and expenses and may not be comparable to results from
proposed future operations of the Property.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses, described in Note
A, of Arbor Park Apartments, Upland, California, for the 12 months ended May 31,
1997, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
San Francisco, California
November 14, 1997
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ARBOR PARK APARTMENTS
HISTORICAL SUMMARY OF REVENUES AND
DIRECT OPERATING EXPENSES
-------
Twelve Months
Ended
May 31, 1997
-------------
Revenues:
Rental income $1,623,510
Other 87,614
----------
1,711,124
----------
Direct operating expenses:
On-site management 226,801
Real property tax 112,022
Utilities 152,340
Repairs and maintenance 321,442
Other 49,881
----------
862,486
----------
Revenue in excess of direct
operating expenses $ 848,638
==========
The accompanying note is an integral
part of this Historical Summary
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ARBOR PARK APARTMENTS
NOTE TO HISTORICAL SUMMARY OF REVENUES
AND DIRECT OPERATING EXPENSES
-------
A. PROPERTY AND BASIS OF ACCOUNTING:
The accompanying Historical Summary of Revenues and Direct Operating
Expenses has been prepared in accordance with Rule 3-14 of Regulation S-X
of the Securities and Exchange Commission and relates to the operations of
Arbor Park Apartments located in Upland, California with 260 apartment
homes.
In accordance with Rule 3-14, direct operating expenses are presented
exclusive of depreciation, interest, management fees, and income taxes.
Rental income attributable to residential leases is recorded when due from
tenants.
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REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Bay Apartment Communities, Inc.:
We have audited the accompanying Historical Summary of Revenues and Direct
Operating Expenses (the Historical Summary) of Amberway Apartments, Anaheim,
California (the Property) for the 12 months ended May 31, 1997. The Historical
Summary is the responsibility of the Property's owner. Our responsibility is to
express an opinion on the 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 Historical Summary is free of material misstatement.
An audit includes examining on a test basis, evidence supporting the amounts and
disclosures in the Historical Summary. An audit also includes assessing the
basis of accounting used and significant estimates made by management, as well
as evaluating the overall presentation of the Historical Summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with rules and regulations of the Securities and Exchange Commission, as
described in Note A, and is not intended to be a complete presentation of the
Property's revenues and expenses and may not be comparable to results from
proposed future operations of the Property.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses, described in
Note A, of Amberway Apartments, Anaheim, California, for the 12 months ended
May 31, 1997, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
San Francisco, California
November 14, 1997
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AMBERWAY APARTMENTS
HISTORICAL SUMMARY OF REVENUES AND
DIRECT OPERATING EXPENSES
-------
Twelve Months
Ended
May 31, 1997
-------------
Revenues:
Rental income $1,997,047
Other 117,828
----------
2,114,875
----------
Direct operating expenses:
On-site management 231,553
Real property tax 173,026
Utilities 70,775
Repairs and maintenance 348,880
Other 59,777
----------
884,011
----------
Revenue in excess of direct
operating expenses $1,230,864
==========
The accompanying note is an integral
part of this Historical Summary
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AMBERWAY APARTMENTS
NOTE TO HISTORICAL SUMMARY OF REVENUES
AND DIRECT OPERATING EXPENSES
-------
A. PROPERTY AND BASIS OF ACCOUNTING:
The accompanying Historical Summary of Revenues and Direct Operating
Expenses has been prepared in accordance with Rule 3-14 of Regulation S-X
of the Securities and Exchange Commission and relates to the operations of
Amberway Apartments located in Anaheim, California with 272 apartment
homes.
In accordance with Rule 3-14, direct operating expenses are presented
exclusive of depreciation, interest, management fees, and income taxes.
Rental income attributable to residential leases is recorded when due from
tenants.
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REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Bay Apartment Communities, Inc.:
We have audited the accompanying Historical Summary of Revenues and Direct
Operating Expenses (the Historical Summary) of Mission Bay Club Apartments, San
Diego, California (the Property) for the 12 months ended May 31, 1997. The
Historical Summary is the responsibility of the Property's owner. Our
responsibility is to express an opinion on the 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 Historical Summary is free of material misstatement.
An audit includes examining on a test basis, evidence supporting the amounts and
disclosures in the Historical Summary. An audit also includes assessing the
basis of accounting used and significant estimates made by management, as well
as evaluating the overall presentation of the Historical Summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with rules and regulations of the Securities and Exchange Commission, as
described in Note A, and is not intended to be a complete presentation of the
Property's revenues and expenses and may not be comparable to results from
proposed future operations of the Property.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses, described in
Note A, of Mission Bay Club Apartments, San Diego, California, for the 12 months
ended May 31, 1997, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
San Francisco, California
November 14, 1997
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MISSION BAY CLUB APARTMENTS
HISTORICAL SUMMARY OF REVENUES AND
DIRECT OPERATING EXPENSES
-------
Twelve Months
Ended
May 31, 1997
-------------
Revenues:
Rental income $4,537,879
Other 318,305
----------
4,856,184
----------
Direct operating expenses:
On-site management 534,329
Real property tax 332,875
Utilities 337,877
Repairs and maintenance 782,162
Other 120,258
----------
2,107,501
----------
Revenue in excess of direct
operating expenses $2,748,683
==========
The accompanying note is an integral
part of this Historical Summary
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MISSION BAY CLUB APARTMENTS
NOTE TO HISTORICAL SUMMARY OF REVENUES
AND DIRECT OPERATING EXPENSES
-------
A. PROPERTY AND BASIS OF ACCOUNTING:
The accompanying Historical Summary of Revenues and Direct Operating
Expenses has been prepared in accordance with Rule 3-14 of Regulation S-X
of the Securities and Exchange Commission and relates to the operations of
Mission Bay Club Apartments located in San Diego, California with 564
apartment homes.
In accordance with Rule 3-14, direct operating expenses are presented
exclusive of depreciation, interest, management fees, and income taxes.
Rental income attributable to residential leases is recorded when due from
tenants.
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REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Bay Apartment Communities, Inc.:
We have audited the accompanying Historical Summary of Revenues and Direct
Operating Expenses (the Historical Summary) of Pacifica Club Apartments,
Huntington Beach, California (the Property) for the 12 months ended May 31,
1997. The Historical Summary is the responsibility of the Property's owner. Our
responsibility is to express an opinion on the 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 Historical Summary is free of material misstatement.
An audit includes examining on a test basis, evidence supporting the amounts and
disclosures in the Historical Summary. An audit also includes assessing the
basis of accounting used and significant estimates made by management, as well
as evaluating the overall presentation of the Historical Summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with rules and regulations of the Securities and Exchange Commission, as
described in Note A, and is not intended to be a complete presentation of the
Property's revenues and expenses and may not be comparable to results from
proposed future operations of the Property.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses, described in
Note A, of Pacifica Club Apartments, Huntington Beach, California, for the
12 months ended May 31, 1997, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
San Francisco, California
November 14, 1997
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PACIFICA CLUB APARTMENTS
HISTORICAL SUMMARY OF REVENUES AND
DIRECT OPERATING EXPENSES
-------
Twelve Months
Ended
May 31, 1997
-------------
Revenues:
Rental income $2,609,793
Other 169,096
----------
2,778,889
----------
Direct operating expenses:
On-site management 268,855
Real property tax 207,184
Utilities 128,990
Repairs and maintenance 327,544
Other 74,756
----------
1,007,329
----------
Revenue in excess of direct
operating expenses $1,771,560
==========
The accompanying note is an integral
part of this Historical Summary.
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PACIFICA CLUB APARTMENTS
NOTE TO HISTORICAL SUMMARY OF REVENUES
AND DIRECT OPERATING EXPENSES
-------
A. PROPERTY AND BASIS OF ACCOUNTING:
The accompanying Historical Summary of Revenues and Direct Operating
Expenses has been prepared in accordance with Rule 3-14 of Regulation S-X
of the Securities and Exchange Commission and relates to the operations of
Pacifica Club Apartments located in Huntington Beach, California with
304 apartment homes.
Inaccordance with Rule 3-14, direct operating expenses are presented
exclusive of depreciation, interest, management fees, and income taxes.
Rental income attributable to residential leases is recorded when due from
tenants.
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REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Bay Apartment Communities, Inc.:
We have audited the accompanying Historical Summary of Revenues and Direct
Operating Expenses (the Historical Summary) of Westwood Club Apartments, Los
Angeles, California (the Property) for the 12 months ended May 31, 1997. The
Historical Summary is the responsibility of the Property's owner. Our
responsibility is to express an opinion on the 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 Historical Summary is free of material misstatement.
An audit includes examining on a test basis, evidence supporting the amounts and
disclosures in the Historical Summary. An audit also includes assessing the
basis of accounting used and significant estimates made by management, as well
as evaluating the overall presentation of the Historical Summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with rules and regulations of the Securities and Exchange Commission, as
described in Note A, and is not intended to be a complete presentation of the
Property's revenues and expenses and may not be comparable to results from
proposed future operations of the Property.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses, described in
Note A, of Westwood Club Apartments, Los Angeles, California, for the 12 months
ended May 31, 1997, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
San Francisco, California
November 14, 1997
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WESTWOOD CLUB APARTMENTS
HISTORICAL SUMMARY OF REVENUES AND
DIRECT OPERATING EXPENSES
-------
Twelve Months
Ended
May 31, 1997
-------------
Revenues:
Rental income $3,777,156
Other 219,410
----------
3,996,566
----------
Direct operating expenses:
On-site management 565,622
Real property tax 187,962
Utilities 276,190
Repairs and maintenance 989,537
Other 81,853
----------
2,101,164
----------
Revenue in excess of direct
operating expenses $1,895,402
==========
The accompanying note is an integral
part of this Historical Summary.
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WESTWOOD CLUB APARTMENTS
NOTE TO HISTORICAL SUMMARY OF REVENUES
AND DIRECT OPERATING EXPENSES
-------
A. PROPERTY AND BASIS OF ACCOUNTING:
The accompanying Historical Summary of Revenues and Direct Operating
Expenses has been prepared in accordance with Rule 3-14 of Regulation S-X
of the Securities and Exchange Commission and relates to the operations of
Westwood Club Apartments located in Los Angeles, California with
363 apartment homes.
In accordance with Rule 3-14, direct operating expenses are presented
exclusive of depreciation, interest, management fees, and income taxes.
Rental income attributable to residential leases is recorded when due from
tenants.
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REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Bay Apartment Communities, Inc.:
We have audited the accompanying Historical Summary of Revenues and Direct
Operating Expenses (the Historical Summary) of Waterhouse Place Apartments,
Beaverton, Oregon (the Property) for the year ended December 31, 1996. The
Historical Summary is the responsibility of the Property's owner. Our
responsibility is to express an opinion on the 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 Historical Summary is free of material misstatement.
An audit includes examining on a test basis, evidence supporting the amounts and
disclosures in the Historical Summary. An audit also includes assessing the
basis of accounting used and significant estimates made by management, as well
as evaluating the overall presentation of the Historical Summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with rules and regulations of the Securities and Exchange Commission, as
described in Note A, and is not intended to be a complete presentation of the
Property's revenues and expenses and may not be comparable to results from
proposed future operations of the Property.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses, described in
Note A, of Waterhouse Place Apartments, Los Angeles, California, for the year
ended December 31, 1997, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
San Francisco, California
December 11, 1997
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WATERHOUSE PLACE APARTMENTS
HISTORICAL SUMMARY OF REVENUES AND
DIRECT OPERATING EXPENSES
-------
Year Ended
December 31,
1996
------------
Revenues:
Rental income $2,030,418
Other 59,325
----------
2,089,743
----------
Direct operating expenses:
On-site management 215,105
Real property tax 183,704
Utilities 157,517
Repairs and maintenance 243,804
Other 14,549
----------
814,679
----------
Revenue in excess of direct
operating expenses $1,275,064
==========
The accompanying note is an integral
part of this Historical Summary.
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WATERHOUSE PLACE APARTMENTS
NOTE TO HISTORICAL SUMMARY OF REVENUES
AND DIRECT OPERATING EXPENSES
-------
A. PROPERTY AND BASIS OF ACCOUNTING:
The accompanying Historical Summary of Revenues and Direct Operating
Expenses has been prepared in accordance with Rule 3-14 of Regulation S-X
of the Securities and Exchange Commission and relates to the operations of
Waterhouse Place Apartments located in Beaverton, Oregon with 279 apartment
homes.
In accordance with Rule 3-14, direct operating expenses are presented
exclusive of depreciation, interest, management fees, and income taxes.
Rental income attributable to residential leases is recorded when due from
tenants.
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BAY APARTMENT COMMUNITIES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
(In thousands, except share and per share data)
(Unaudited)
Acquisition
Historical Communities Pro Forma
---------- ----------- ---------
Assets:
Real estate assets:
Land $152,277 $ 32,304 A $184,581
Buildings and improvements 511,583 108,526 A 620,109
Furniture, fixtures & equipment 35,542 7,540 A 43,082
-------- -------- --------
699,402 148,370 847,772
Less: accumulated depreciation (52,554) 0 (52,554)
-------- -------- --------
Operating real estate assets 646,848 148,370 795,218
Construction in progress 50,945 0 50,945
-------- -------- --------
Net real estate assets 697,793 148,370 846,163
Cash & cash equivalents 920 0 920
Restricted cash 960 0 960
Other assets, net 12,236 0 12,236
-------- -------- --------
Total Assets $711,909 $148,370 $860,279
======== ======== ========
Liabilities and Shareholders' Equity:
Liabilities:
Notes payable $273,688 $148,370 B $422,058
Accounts payable and accrued expenses 5,450 0 5,450
Dividends payable 8,939 0 8,939
Other liabilities 4,553 0 4,553
-------- -------- --------
Total Liabilities 292,630 148,370 441,000
Minority interest 7,002 0 7,002
Shareholders' Equity:
Preferred stock 27 0 27
Common stock 190 0 190
Paid in capital 435,723 0 435,723
Dividends in excess of accumulated earnings (23,663) 0 (23,663)
-------- -------- --------
Total Shareholders Equity 412,277 0 412,277
-------- -------- --------
Total Liabilities and Shareholders' Equity $711,909 $148,370 $860,279
======== ======== ========
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BAY APARTMENT COMMUNITIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996
(In thousands, except share and per share data)
(Unaudited)
Acquisition
Historical Communities Pro Forma
----------- ----------- -----------
Revenue:
Rental $ 80,377 $16,576 C $ 96,953
Other 2,216 972 C 3,188
----------- ------- -----------
Total revenue 82,593 17,548 100,141
----------- ------- -----------
Expenses:
Property operating 18,924 6,179 D 25,103
Property taxes 6,353 1,197 D 7,550
General and administrative 3,895 401 D 4,296
Interest and financing 14,276 10,193 E 24,469
Depreciation and amortization 18,689 4,695 F 23,384
----------- ------- -----------
Total expenses 62,137 22,665 84,802
----------- ------- -----------
Income before minority interest and
extraordinary item 20,456 (5,117) 15,339
Minority interest (319) - (319)
----------- ------- -----------
Income before extraordinary item 20,137 (5,117) 15,020
Extraordinary item (511) - (511)
----------- ------- -----------
Net income 19,626 (5,117) 14,509
Preferred dividend requirement (4,264) 0 (4,264)
----------- ------- -----------
Earnings available to common shares $ 15,362 ($5,117) $ 10,245
=========== ======= ===========
Weighted average shares outstanding 15,126,242 15,126,242
=========== ===========
Per share $ 1.02 $ 0.68
=========== ===========
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1. Basis of Presentation:
The pro forma financial statements of Bay Apartment Communities, Inc. (the
"Company"), which are unaudited, have been prepared based on the historical
financial statements of the Company. The pro forma consolidated balance sheet
has been prepared as if the probable acquisition of six apartment communities
during the period of December 1997 through January 1998 (the "Acquisition
Communities"), had occurred on December 31, 1996. The pro forma consolidated
statement of operations for the twelve months ended December 31, 1996, has been
prepared as if the above mentioned events had occurred on January 1, 1996. In
management's opinion, all adjustments necessary to reflect the effects of these
transactions have been made. The pro forma financial statements should be read
in conjunction with the historical financial statements of the Company.
2. PRO FORMA ADJUSTMENTS:
A - Additional real estate assets are attributable to the Acquisition
Communities which consist of the following acquisitions (000's):
Waterhouse Place, Beaverton, OR $ 15,620
Arbor Park, Upland, CA 12,445
Amberway, Anaheim, CA 17,545
Pacifica Club, Huntington Beach, CA 26,820
Mission Bay Club, San Diego, CA 43,820
Westwood Club, Los Angeles, CA 32,120
--------
$148,370
B - Increase in notes payable is attributable to cash used to acquire the
Acquisition Communities which was drawn from the Credit Facility.
C - Additional rental and other revenue is attributable to the Acquisition
Communities.
D - Additional property operating expense, property tax expense, and general
and administrative expense are attributable to the Acquisition
Communities.
E - Additional interest and financing expense is attributable to the interest
incurred on funds obtained from the Credit Facility.
F - Depreciation expense attributable to the Acquisition Communities has been
computed using the straight-line method over 30 years for buildings and
7 years for furniture, fixtures and equipment.
F-21