8-K 1 d8k.txt FORM 8-K ============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 DATE OF REPORT (Date of earliest event reported): October 25, 2000 CHARLES E. SMITH RESIDENTIAL REALTY L.P. (Exact name of registrant as specified in its charter) Commission File Number: 1934 Act File Number: 0-25968 Delaware 54-1681657 (State of other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2345 Crystal Drive 22202 Crystal City, VA (Zip Code) (Address of principal executive offices) Registrant's telephone number including area code: (703) 920-8500 ============================================================================== Item 2. Property Acquisitions ------- --------------------- On October 25, 2000, Charles E. Smith Residential Realty L.P. ("the Company"), acquired Harbour House, an 804 unit, high-rise apartment property located on a 10.6 acre, oceanfront site in Southeast Florida. The property consists of two 14-story towers constructed in 1962 and 1964, respectively, with amenities including two pools, 26 cabanas, a tennis court, underground parking and direct beachfront access. The average unit size is approximately 992 square feet. The purchase price of $94.3 million was funded through draws on the Company's lines of credit. The Company plans to invest an additional $25 to $45 million over the next several years, depending upon the incremental return on investment, to upgrade and reposition the property. Item 7. Financial Statements and Exhibits ------- --------------------------------- (A) Pro forma financial information beginning at page F-2 (B) Historical financial information beginning at page F-7 (C) Exhibits 23 Consent of Independent Public Accountants dated November 7, 2000 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized, on this 7th day of August 2001. CHARLES E. SMITH RESIDENTIAL REALTY L.P. By: Charles E. Smith Residential Realty, Inc. its General Partner By: /s/ W.D. Minami ------------------------------------------------- W.D. Minami President Charles E. Smith Residential Realty, Inc. (on behalf of the Registrant and as Principal Financial Officer) /s/ Steven E. Gulley ------------------------------------------------- Steven E. Gulley Chief Accounting Officer and Acting Chief Financial Officer Charles E. Smith Residential Realty, Inc. INDEX TO FINANCIAL STATEMENTS AND PRO FORMA INFORMATION Page ---- CHARLES E. SMITH RESIDENTIAL REALTY L.P. Pro Forma (Unaudited) Consolidated Balance Sheet as of June 30, 2000 F-3 Pro Forma (Unaudited) Consolidated Statement of Operations for the six months ended June 30, 2000 F-4 Pro Forma (Unaudited) Consolidated Statement of Operations for the year ended December 31, 1999 F-5 Notes and Management's Assumptions to Unaudited Pro Forma Consolidated Financial Information F-6 ACQUISITION PROPERTY Report of Independent Public Accountants - F-7 Statements of Revenues and Certain Expenses of Harbo L.P. for the six months ended June 30, 2000 (Unaudited) and for the year ended December 31, 1999. F-8 Notes to Statements of Revenues and Certain Expenses of Harbo L.P. for the six months ended June 30, 2000 (Unaudited) and for the year ended December 31, 1999. F-9 CHARLES E. SMITH RESIDENTIAL REALTY L.P. PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The unaudited Pro Forma Consolidated Balance Sheet as of June 30, 2000, and unaudited Pro Forma Consolidated Statements of Operations for the six months ended June 30, 2000, and the year ended December 31, 1999, are based on the historical financial statements of the Company. The unaudited Pro Forma Consolidated Balance Sheet as of June 30, 2000, is presented as if acquisitions had occurred by June 30, 2000. The unaudited Pro Forma Consolidated Statements of Operations for the six months ended June 30, 2000, and the year ended December 31, 1999, are presented as if the acquisitions and dispositions had occurred at the beginning of each of those periods. The unaudited pro forma information should be read in conjunction with the historical financial statements and notes related thereto appearing in the Company's Forms 10-Q and 10-K. Preparation of the unaudited pro forma financial information was based on assumptions considered appropriate by the Company's management. The pro forma financial information is unaudited and is not necessarily indicative of the results which would have occurred if the acquisitions had been consummated at the beginning of the periods presented, nor does it purport to represent the future financial position and results of operations for future periods. In management's opinion, all adjustments necessary to reflect the effects of the transaction have been made. F-2 CHARLES E. SMITH RESIDENTIAL REALTY L.P. PRO FORMA CONSOLIDATED BALANCE SHEET AS OF JUNE 30,2000 (UNAUDITED) (IN THOUSANDS)

The accompanying notes are an integral part of this statement. F-3 CHARLES E. SMITH RESIDENTIAL REALTY L.P. PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED) (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)

The accompanying notes are an integral part of this statement. F-4 CHARLES E. SMITH RESIDENTIAL REALTY L.P. PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999 (UNAUDITED) (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)

The accompanying notes are an integral part of this statement. F-5 CHARLES E. SMITH RESIDENTIAL REALTY L.P. NOTES AND MANAGEMENT'S ASSUMPTIONS TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) (DOLLAR AMOUNTS IN THOUSANDS) 1. Basis of Presentation On October 25, 2000, Charles E. Smith Residential Realty L.P. ("the Company"), acquired Harbour House, an 804 unit, high-rise apartment property located on a 10.6 acre, oceanfront site in Southeast Florida. The property consists of two 14-story towers constructed in 1962 and 1964, respectively, with amenities including two pools, 26 cabanas, a tennis court, underground parking and direct beachfront access. The average unit size is approximately 992 square feet. The purchase price of $94.3 million was funded through draws on the Company's lines of credit. The Company plans to invest an additional $25 to 45 million over the next several years, depending upon the incremental return on investment, to upgrade and reposition the property. Additionally, the Pro Forma information contained within reflects other acquisitions and dispositions of the Company as of June 30, 2000 and during the year ending December 31, 1999. The unaudited Pro Forma Consolidated Balance Sheet as of June 30, 2000 and unaudited Pro Forma Consolidated Statements of Operations for the six months ended June 30, 2000 and the year ended December 31, 1999 are based on the historical financial statements of the Company and Operating Partnership. The unaudited Pro Forma Consolidated Balance Sheet as of June 30, 2000 is presented as if the acquisitions had occurred by June 30, 2000. The unaudited Pro Forma Consolidated Statements of Operations for the six months ended ended June 30, 2000 and the year ended December 31, 1999 are presented as if the acquisitions had occurred at the beginning of each of those periods. The unaudited pro forma information should be read in conjunction with the historical financial statements and notes related thereto appearing in the Company's Forms 10-Q and 10-K. 2. Adjustments to Pro Forma Consolidated Balance Sheet (A) Acquisitions (in thousands): Harbour House ------- Purchase price of rental property $94,300 ======= Proceeds from line of credit $94,300 ------- $94,300 ======= 3. Adjustments to Pro Forma Consolidated Statements of Operations (B) The proforma statements of operations for the year ended December 31, 1999, includes or excludes the results of operations of the properties prior to acquisition as follows:

Management believes that the amounts excluded are not material to the proforma statements taken as a whole. For the year ended December 31, 1999, adjustments to results of operations for acquisitions are as follows:

The proforma statements of operations for the six months ended June 30, 2000 includes or excludes the results of operations of the properties prior to acquisition as follows:

Management believes that the amounts excluded are not material to the proforma statements taken as a whole. For the six months ended June 30, 2000, adjustments to results of operations are as follows:

The 1999 1031 properties include Surburban Towers, Columbian Stratford, Windsor Towers and Fort Chaplin For the six months ended June 30, 2000

(D) Operating expenses have been adjusted to eliminate management fees since the Company's affiliate manages owned properties. (E) Depreciation and amortization has been adjusted based on the allocated purchase price of the assets acquired and an estimated useful life of 40 years, as if the purchases occurred on January 1, 2000 for the six months ended June 30, 2000 and January 1, 1999 for the year ended December 31, 1999. (F) Represents interest expense for draws on the line of credit (assuming weighted average interest rates of 7.33% and 7.14% for the six months ended June 30, 2000 and the year ended December 31, 1999, respectively) and interest expense for the assumed mortgage loan related to the acquisition. F-6 [ARTHUR ANDERSEN, LLP LETTERHEAD APPEARS HERE] Report of Independent Public Accountants To Charles E. Smith Residential Realty L.P. We have audited the accompanying statement of revenues and certain expenses of Harbo, L.P. (the "Property") for the year ended December 31, 1999. This statement is the responsibility of the Property's management. Our responsibility is to express an opinion on this statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. 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. The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Form 8-K of Charles E. Smith Residential Realty L.P. Material amounts, described in Note 1 to the statements of revenue and certain expenses, that would not be comparable to those resulting from the proposed future operations of the Property are excluded and the statement is not intended to be a complete presentation of the revenues and expenses of this Property. In our opinion, the statement referred to above presents fairly, in all material respects, the revenues and certain expenses of Harbo, L.P. for the year ended December 31, 1999 in conformity with accounting principles generally accepted in the United States. /s/ ARTHUR ANDERSEN LLP Vienna, VA October 20, 2000 F-7 Harbo, L.P. Statement Of Revenues And Certain Expenses For The Six months Ended June 30, 2000 (Unaudited) And The Year Ended December 31, 1999

The accompanying notes are an integral part of this statement. F-8 Harbo, L.P. Notes to Statement of Revenues and Certain Expenses For The Six months Ended June 30, 2000 (Unaudited) And For The Year Ended December 31, 1999 1. Basis of Presentation --------------------- The accompanying statement of revenues and certain expenses relates to the operations of Harbo, L.P. which owns an 804 unit, 2-building high-rise apartment complex located in Bal Harbour, Florida. The Property was acquired by Charles E. Smith Residential Realty, Inc. (the "Company") on October 25, 2000. The accompanying statement has been prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission and thus excludes certain expenses, such as interest expense, depreciation and amortization, certain professional fees, and other costs not related to the future operations of the Property. Management is not aware of any material factors relating to the Property which would cause the reported financial information not to be indicative of future operating results. 2. Significant Accounting Policies ------------------------------- The accompanying statement was prepared on the accrual basis accounting. Rental income attributable to residential leases is recognized when due from tenants. 3. Interim Financial Information ------------------------------ The interim statement of revenues and certain expenses is unaudited but reflect all adjustments which are, in the opinion of management, necessary to a fair presentation of the interim period presented. The adjustments consist of normal recurring accruals. The statement of revenues and certain expenses for the interim period will not necessarily be indicative of the operating results of the fiscal year. F-9

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