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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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, 1999
AVATAR HOLDINGS INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 0-7616 23-1739078
(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File Number) Identification No.)
201 ALHAMBRA CIRCLE, CORAL GABLES, FLORIDA 33134
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (305) 442-7000
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 15, 1999, Florida Cities Water Company and Poinciana
Utilities, Inc., two operating subsidiaries of Avatar Utilities Inc., a
wholly-owned subsidiary of Avatar Holdings Inc. (Avatar or the Company), that
own and operate water and wastewater utilities located in the counties of
Brevard, Collier, Hillsborough, Lee, Osceola, Polk and Sarasota, Florida, closed
on the sale of substantially all of their assets used in the Florida utilities
operations.
For purposes of the transaction, certain of the counties organized The
Florida Governmental Utility Authority. The Florida Governmental Utility
Authority obtained the financing for the acquisition through the issuance of
municipal bonds.
The cash sales price of $209 million, subject to certain adjustments
for the period December 31, 1998 to the closing date, was determined through
arms-length negotiation. The sale is expected to result in a gain to the Company
of approximately $102 million, subject to certain adjustments for the period
December 31, 1998 to the closing date.
Avatar's contract management services subsidiary has entered into
definitive agreements to provide operation and maintenance services as well as
billing and customer services for each of the water and wastewater systems.
These agreements have initial terms ranging from 14 months to five years.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(B) PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated balance sheet
gives effect to the sale of substantially all of the assets used in the Florida
utilities operations as if it had occurred on December 31, 1998. For the year
ended December 31, 1998, the Company's consolidated statement of operations
presents the Florida utilities operations as discontinued. The gain on the sale
transaction will be classified in the Company's consolidated statement of
operations during the six months ended June 30, 1999 as a gain from the sale of
discontinued operations. Consequently, the sale transaction will have no effect
on the Company's loss from continuing operations or loss per share from
continuing operations, and accordingly, no pro forma condensed consolidated
statement of operations is presented herein.
The unaudited pro forma condensed consolidated balance sheet is not
necessarily indicative of the results which would have actually been obtained
had the sale transaction been consummated on such date. The pro forma condensed
consolidated balance sheet should be read in conjunction with the Notes to the
Pro Forma Condensed Consolidated Balance Sheet included herein, as well as the
Company's historical Financial Statements and Notes thereto filed with its 1998
Annual Report on Form 10-K.
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AVATAR HOLDINGS INC. AND SUBSIDIARIES
Pro Forma Condensed Consolidated Balance Sheet
(Unaudited)
(Dollars in thousands)
December 31, Florida December 31,
1998 Utilities 1998
As Reported Disposition Pro Forma
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ASSETS
Cash and cash equivalents $ 32,521 $ 137,740 (a) $ 170,261
Restricted cash 5,232 -- 5,232
Contracts and mortgage notes receivable, net 13,737 -- 13,737
Other receivables, net 4,257 -- 4,257
Land and other inventories 170,555 4,089 (d) 174,644
Property, plant and equipment, net 26,366 (2,787)(d) 23,579
Other assets 11,724 2,617 (d) 14,341
Deferred income taxes -- 14,359 (e) 14,359
Assets of discontinued operations 208,599 (169,086)(b) 39,513
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Total Assets $ 472,991 $ (13,068) $ 459,923
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LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Notes, mortgage notes and other debt:
Corporate $ 130,000 $ (15,000)(a) $ 115,000
Notes, collateralized by contracts and mortgage
notes receivable 9,060 -- 9,060
Real estate 18,493 -- 18,493
Estimated development liability for sold land 8,671 8,525 (d) 17,196
Accounts payable 3,385 -- 3,385
Accrued and other liabilities 35,182 1,000 (d) 36,182
Deferred customer betterment fees 18,837 (18,828)(d) 9
Income taxes payable -- 14,359 (e) 14,359
Liabilities of discontinued operations 137,106 (105,392)(c) 31,714
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Total Liabilities 360,734 (115,336) 245,398
Stockholders' equity, net 112,257 102,268 214,525
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Total Liabilities and Stockholders' Equity $ 472,991 $ (13,068) $ 459,923
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AVATAR HOLDINGS INC.
Notes to Pro Forma Condensed Consolidated Balance Sheet
(Unaudited)
(Dollars in thousands)
On April 15, 1999, substantially all of the assets used in the Florida utilities
operations were sold to The Florida Governmental Utility Authority for a cash
sales price of $208,619, subject to certain adjustments for the period December
31, 1998 through the closing date. The pro forma adjustments to the Pro Forma
Condensed Consolidated Balance Sheet as of December 31, 1998 are as follows:
(a) To record the estimated proceeds from the sale transaction and the
anticipated use of proceeds therefrom:
Total cash proceeds from sale $208,619
Transaction expenses related to the sale (1,568)
Contingent proceeds remaining in escrow (2,900)
Repayment of utilities loans and preferred stock (44,974)
Repayment of bank credit line (15,000)
Cash included in discontinued operations
for payment of utilities liabilities (6,437)
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Net cash $137,740
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(b) To record the disposal of the Florida utilities assets as a result of this
sale transaction.
(c) To record the effect on the liabilities of discontinued operations as it
relates to the disposal of the assets used in the Florida utilities
operations:
Repayment of utilities loans and
preferred stock $(44,974)
Extinguishment of CIAC (60,359)
Change in accruals of utilities liabilities (59)
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$105,392
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Contributions in aid of construction (CIAC) are advances from real estate
developers and other direct contributions for plant construction.
(d) Adjustments to the basis of assets sold and retained that were applicable to
utilities operations and the accrual of liabilities as a result of this sale
transaction.
(e) Reflects the effect of deferred tax assets and current tax liabilities as a
result of this sale transaction.
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(C) EXHIBITS
2.1 Utility System Asset Acquisition Agreement, dated as of April 1, 1999,
by and between Florida Governmental Utility Authority and Florida
Cities Water Company and Poinciana Utilities, Inc.*
2.2 Addendum to Utility System Asset Acquisition Agreement concerning the
Fort Myers Utility System, dated as of April 1, 1999.
2.3 Assignment (of the Fort Myers Utility System to Lee County), dated as
of April 1, 1999, by and among Florida Governmental Utility Authority;
Board of County Commissioners of Lee County, Florida; Florida Cities
Water Company; and Poinciana Utilities, Inc.
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* Certain schedules and similar attachments have been omitted. The Registrant
agrees to furnish supplementally a copy of any omitted schedule or attachment to
the Commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed by the undersigned,
thereunto duly authorized.
AVATAR HOLDINGS INC.
Dated: April 30, 1999 By: /s/ Juanita I. Kerrigan
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Juanita I. Kerrigan
Vice President and Corporate Secretary
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EXHIBIT INDEX
* Certain schedules and similar attachments have been omitted. The Registrant
agrees to furnish supplementally a copy of any omitted schedule or attachment to
the Commission upon request.
2.1 Utility System Asset Acquisition Agreement, dated as of April 1, 1999,
by and between Florida Governmental Utility Authority and Florida
Cities Water Company and Poinciana Utilities, Inc.*
2.2 Addendum to Utility System Asset Acquisition Agreement concerning the
Fort Myers Utility System, dated as of April 1, 1999.
2.3 Assignment (of the Fort Myers Utility System to Lee County), dated as of
April 1, 1999, by and among Florida Governmental Utility Authority; Board
of County Commissioners of Lee County, Florida; Florida Cities Water
Company; and Poinciana Utilities, Inc.
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