<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended JUNE 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-08723
WESTERN PROPERTIES TRUST
------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-6100058
---------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2200 POWELL ST., STE. 600, EMERYVILLE, CA 94608
----------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (510) 597-0160
------------------
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Shares of Beneficial Interest, No Par Value - 17,253,657 shares as of
July 31, 2000
1
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WESTERN PROPERTIES TRUST
INDEX TO 10-Q
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (unaudited) 3
Consolidated Balance Sheets - June 30, 2000, and December 31, 1999 4
Consolidated Statements of Income - Three and six months ended June 30, 2000,
and 1999 5
Consolidated Statements of Shareholders' Equity - Six months ended
June 30, 2000 and year ended December 31, 1999 6
Consolidated Statements of Cash Flows - Six months ended
June 30, 2000, and 1999 7
Notes to Consolidated Financial Statements 8-18
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 19-24
Item 3. Quantitative and Qualitative Disclosures about Market Risk 25
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 26
Item 2. Changes in Securities and Use of Proceeds 26
Item 3. Defaults of Senior Securities 26
Item 4. Submission of Matters to a Vote of Security Holders 26
Item 5. Other Information 26
Item 6. Exhibits and Reports on Form 8-K 26-28
SIGNATURES 29
</TABLE>
2
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PART I. FINANCIAL INFORMATION
ITEM 1 CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS WESTERN PROPERTIES TRUST
---------------------------------------------------------------------------------------------------------------
(Unaudited)
JUNE 30, December 31,
2000 1999
----------- ------------
(In thousands, except share data)
<S> <C> <C>
ASSETS
Real estate investments:
Real estate properties .......................................... $ 299,816 $ 354,690
Less accumulated depreciation and amortization .................. (65,874) (73,189)
----------- ------------
233,942 281,501
Real estate properties held for sale ............................ 116,416 81,697
Less previous accumulated depreciation and amortization ......... (29,314) (22,839)
----------- ------------
87,102 58,858
Real estate under development .................................. 8,255 6,311
Unconsolidated real estate subsidiary .......................... 47,318 46,963
Mortgage notes receivable ...................................... 25,549 17,229
----------- ------------
Net real estate investments ................................. 402,166 410,862
Cash and cash equivalents .......................................... 2,424 2,219
Accounts receivable, exchange escrow and other assets .............. 15,699 13,055
Deferred debt issuance costs, net .................................. 1,151 1,130
----------- ------------
$ 421,440 $ 427,266
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Bank line .......................................................... $ 78,900 $ 84,520
Senior notes, net .................................................. 124,836 124,822
Mortgage payable ................................................... 9,701 9,808
----------- ------------
213,437 219,150
Interest payable ................................................... 3,596 3,561
Prepaid rents and security deposits ................................ 2,275 2,288
Other liabilities .................................................. 2,889 2,939
----------- ------------
8,760 8,788
----------- ------------
Total liabilities ............................................... 222,197 227,938
----------- ------------
Minority interests ................................................. 18,699 18,699
Shareholders' equity:
Preferred Stock, 2,000,000 shares authorized;
No shares issued or outstanding .............................. -- --
Shares of beneficial interest, no par value,
Unlimited share authorization
Issued and outstanding: June 30, 2000 - 17,251,077 shares
December 31, 1999 - 17,236,470 shares 242,711 242,269
Accumulated dividends in excess of net income ................... (62,167) (61,640)
----------- ------------
Total shareholders' equity ...................................... 180,544 180,629
----------- ------------
$ 421,440 $ 427,266
=========== ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME WESTERN PROPERTIES TRUST
-------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
----------- ----------- ------------ -----------
(In thousands, except share and per share data)
<S> <C> <C> <C> <C>
REVENUES:
Minimum rents ......................................... $ 10,886 $ 11,032 $ 22,240 $ 22,100
Percentage rents ...................................... 164 137 435 374
Recoveries from tenants ............................... 2,740 2,649 4,521 4,429
Interest income ....................................... 673 429 1,124 871
Income from unconsolidated real estate subsidiary ..... 147 138 659 145
Other income .......................................... 207 311 429 430
----------- ----------- ------------ -----------
Total revenues ............................................. 14,817 14,696 29,408 28,349
EXPENSES: ----------- ----------- ------------ -----------
Interest .............................................. 3,705 3,516 7,507 7,050
Property operating costs .............................. 2,834 2,847 4,710 4,761
Depreciation and amortization ......................... 2,419 2,977 5,069 5,925
Other operating expenses .............................. 1,343 1,107 2,844 2,435
Provision for loss on real estate investment .......... 1,745 --- 1,745 ---
General and administrative ............................ 872 809 1,828 1,514
----------- ----------- ------------ -----------
Total expenses ............................................. 12,918 11,256 23,703 21,685
----------- ----------- ------------ -----------
Income before gains on sales of real estate investments 1,899 3,440 5,705 6,664
Gains on sales of real estate investments .................. --- 2,113 4,256 2,113
----------- ----------- ------------ -----------
Income before minority interest ....................... 1,899 5,553 9,961 8,777
Minority interest .......................................... 401 399 802 802
----------- ----------- ------------ -----------
Net income ................................................. $ 1,498 $ 5,154 $ 9,159 $ 7,975
=========== =========== ============ ===========
Basic net income per share ................................. $ 0.09 $ 0.30 $ 0.53 $ 0.46
=========== =========== ============ ===========
Diluted net income per share ............................... $ 0.09 $ 0.30 $ 0.53 $ 0.46
=========== =========== ============ ===========
Cash dividends paid ........................................ $ 0.28 $ 0.28 $ 0.56 $ 0.56
=========== =========== ============ ===========
Weighted average number of shares outstanding--Basic 17,245,917 17,222,814 17,242,196 17,220,368
=========== =========== ============ ===========
Weighted average number of shares outstanding--Diluted 17,382,091 18,703,739 17,377,023 17,265,058
=========== =========== ============ ===========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
5
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY WESTERN PROPERTIES TRUST
----------------------------------------------------------------------------------------------------------------------
(Unaudited)
Six Months Ended June 30, 2000, and
Year Ended December 31, 1999 (In
thousands, except share data)
Accumulated
Dividends Total
Shares of in Excess of Share-
Beneficial Interest Net holders'
Number Amount Income Equity
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, January 1, 1999 ..................... 17,216,550 $ 241,741 $ (62,117) $ 179,624
Shares issued under restricted stock plan .... 19,920 268 -- 268
Loan forgiveness ............................. -- 260 -- 260
Net income ................................... -- -- 19,814 19,814
Cash dividends paid .......................... -- -- (19,337) (19,337)
---------- ---------- ----------- -----------
Balance, December 31, 1999 ................... 17,236,470 242,269 (61,640) 180,629
Shares issued under restricted stock plan .... 14,607 182 -- 182
Loan forgiveness ............................. -- 260 -- 260
Net income ................................... -- -- 9,159 9,159
Cash dividends paid .......................... -- -- (9,686) (9,686)
----------- ---------- ----------- -----------
BALANCE, JUNE 30, 2000 ....................... 17,251,077 $ 242,711 $ (62,167) $ 180,544
=========== ========== =========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
6
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS WESTERN PROPERTIES TRUST
------------------------------------------------------------------------------------------------------------------------
(Unaudited)
Six Months Ended
June 30,
---------
2000 1999
-------- ---------
(In thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ..................................................................... $ 9,159 $ 7,975
Adjustments to reconcile net income to net cash
provided by operating activities:
Minority interest ........................................................ 802 802
Depreciation and amortization ............................................ 5,069 5,925
Amortization of deferred debt issuance costs ............................. 261 229
Gains on sales of real estate investments ................................ (4,256) (2,113)
Earned compensation on restricted stock plan ............................. 182 131
Decrease (increase) in accounts receivable and other assets .............. 225 (875)
Increase in deferred rent receivable ..................................... (107) (283)
Increase (decrease) in interest payable .................................. 35 (160)
Decrease in prepaid rents and security deposits
and other liabilities ................................................ (820) (119)
Provision for loss on real estate investment ............................. 1,745 ---
Loan forgiveness ......................................................... 260 260
------- ---------
Net cash provided by operating activities ................................ 11,772 12,555
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of real estate investments ................................. 14,869 10,315
Investment in mortgage note receivable ......................................... (2,570) (1,364)
Acquisition of real estate investments ......................................... (1,228) ---
Investment in unconsolidated real estate subsidiary ............................ (355) (620)
Deposits into exchange escrow .................................................. (3,594) 2,625
Improvements of real estate investments:
Build-to-suit developments ............................................... (14) ---
New leases ............................................................... (2,014) (1,084)
General .................................................................. (212) (678)
Development .............................................................. (815) ---
Recovery of investment in direct financing leases .............................. 66 83
-------- ---------
Net cash provided by investing activities ................................ 9,277 4,133
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances on bank line of credit ................................................ 29,750 20,450
Principal payments on bank line of credit ...................................... (35,370) (31,050)
Principal payments on mortgage note payable .................................... (107) (99)
Deferred long term issuance costs .............................................. (268) (290)
Cash distributions to minority interest ........................................ (802) (802)
Cash dividends paid ............................................................ (9,668) (9,686)
-------- ---------
Net cash used in financing activities .................................... (16,483) (21,459)
-------- ---------
Net increase (decrease) in cash and cash equivalents ..................... 205 (410)
Cash and cash equivalents, at the beginning of period ......................... 2,219 1,512
-------- ---------
Cash and cash equivalents, at the end of period ................................ $ 2,424 $ 1,102
======== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest net of capitalized interest of
$664,000 in 2000 and $719,000 in 1999 .......................................... $ 7,214 $ 6,981
======== =========
SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES:
Note received in connection with sale of real estate investments ............... $ 5,098 $ ---
======== =========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7
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WESTERN PROPERTIES TRUST
Notes to Consolidated Financial Statements
June 30, 2000
(Unaudited)
NOTE A: ORGANIZATION, BASIS OF PRESENTATION AND RECENT ACCOUNTING
PRONOUNCEMENTS
(1) DESCRIPTION OF ORGANIZATION AND PRINCIPLES OF CONSOLIDATION
Founded in 1962, Western Properties Trust ("WPT") and its affiliates own and
operate community and neighborhood shopping centers located in the western
United States. The corporate office of the self-administered equity real estate
investment trust is in the San Francisco Bay Area city of Emeryville,
California. WPT shares are traded on the American Stock Exchange under the
symbol "WIR".
Western Properties Trust's consolidated financial statements include the
accounts of the following entities: WPT; Western/Kienow's L.P., a Delaware
limited partnership; Western Pinecreek L.P., a Delaware limited partnership;
GW100, a general partnership; and WPT's wholly owned subsidiary, WIRET Asset
Management Services (a California corporation and a licensed real estate
broker in the State of California) (collectively, "Western"). These entities
comprise all of the subsidiaries over which WPT exercises direct or indirect
voting control. Western is in the business of acquiring, managing, leasing
and developing retail and commercial properties. WPT is the sole general
partner in Western/Kienow's L.P. and owned a 60% interest therein as of June
30, 2000. WPT is also the sole general partner in Western Pinecreek L.P. and
owned a 75% interest therein as of June 30, 2000.
Through an unconsolidated real estate subsidiary, Western owns 11 properties
comprising approximately 457,222 square feet of retail gross leasable area
("GLA"). Throughout this Form 10-Q reference to the unconsolidated real estate
subsidiary is a reference to this 11 property portfolio. The properties in this
portfolio generally consist of the remaining Kienow's Food Stores, Inc.
properties, which were acquired by the unconsolidated real estate subsidiary in
1998.
The combined GLA of Western and its unconsolidated real estate subsidiary at
June 30, 2000 was approximately 5.4 million square feet of GLA. At June 30,
2000, Western and its unconsolidated real estate subsidiary's real estate
portfolio was comprised of 58 investments, 51 of which were retail properties.
(2) BASIS OF PRESENTATION AND USE OF ESTIMATES
The consolidated financial statements included in this report have been prepared
by Western, without audit, pursuant to the rules of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles has been condensed or omitted pursuant to such rules. Interim results
are not necessarily indicative of results for a full year. The interim
8
<PAGE>
consolidated financial statements reflect all adjustments which are, in the
opinion of management, normal and recurring and necessary to a fair presentation
of the results for interim periods.
These financial statements should be read in conjunction with the audited
financial statements and notes thereto included in Western's latest annual
report on Form 10-K. When necessary, reclassifications have been made to prior
period balances to conform to current period presentation.
(3) RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued Financial Accounting Statement No. 133 (FASB 133),
"ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES." Western will
adopt FASB 133 for interim periods beginning in 2001, the effective date of FASB
133, as amended. Management believes that the adoption of this Statement will
not have a material impact on Western's consolidated financial statements.
In December 1999, the SEC issued Staff Accounting Bulletin ("SAB") 101, "REVENUE
RECOGNITION IN FINANCIAL STATEMENTS." Western will adopt SAB 101 during the
fourth quarter of 2000, the effective date of SAB 101. Management believes that
the adoption of this Bulletin will not have a material impact on Western's
consolidated financial statements.
Note B: REAL ESTATE INVESTMENTS
At June 30, 2000, Western and its unconsolidated real estate subsidiary owned 58
investments, totaling 5.4 million square feet of GLA. Included in this total are
15 properties, which were held for sale and total 1,375,000 square feet of GLA.
Occupancy percentages for Western's portfolios for the applicable periods are as
follows:
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999 June 30, 1999
------------- ----------------- --------------
<S> <C> <C> <C>
Shopping centers 93.7% 93.7% 92.7%
Single-tenant retail 100.0% 100.0% 65.5%(1)
Commercial and other 100.0% 93.9% 94.4%
Overall occupancy 94.1% 93.8% 91.2%
</TABLE>
Occupancy percentage is based on square footage of GLA leased as a percent of
total leasable square feet.
(1) The Single-tenant retail occupancy rate reflects the January, 1999
expiration of the Kmart/Napa lease of 103,284 square feet, and vacancy
thereof, until this property was leased to Wal Mart in November, 1999.
Western's shopping center development-in-progress, Olympic Place, located in
Walnut Creek, California, is not included in the above occupancy percentages.
Additionally, the 11 retail properties which are held through an unconsolidated
real estate subsidiary are not included in the above occupancy percentages due
to the extensive re-tenanting and redevelopment currently taking place in these
properties. Including the portfolio in the unconsolidated real estate
subsidiary, overall occupancy would be 93.1%, 92.8% and 89.7% for June 30, 2000,
December 31, 1999 and June 30, 1999, respectively.
9
<PAGE>
During the quarter ended June 30, 2000, Western made the decision to market for
sale six shopping center properties, with a gross book value of approximately
$57.4 million. As of June 30th, 2000, Western had 15 properties held for sale
with a gross book value of $116.4 million. Additionally, during the quarter,
Western reviewed the net book value of all properties it is marketing for sale
and determined that two properties are expected to generate sales proceeds less
than the net book value. As such, Western recorded a $1,745,000 impairment
charge ("Provision for loss on real estate investment") during the quarter
related to the two properties.
Note C: UNCONSOLIDATED REAL ESTATE SUBSIDIARY
In October 1998, Western acquired, through its unconsolidated real estate
subsidiary, an interest in Kienow's Food Stores, Inc. ("Kienow's"), a Portland,
Oregon-based grocery wholesaler and retailer, whose principal assets were its
real estate properties comprising six shopping centers and four freestanding
stores, which comprise the "10 core retail properties" and eight non-core
properties. During 1999 and the first and second quarters of 2000, Western's
unconsolidated real estate subsidiary caused Kienow's to sell the eight non-core
properties as well as one core free-standing store. The net proceeds from these
sales were reinvested using tax-deferred exchange rules into two properties - a
free standing grocery store, located in Portland, Oregon, and land located in
Lodi, California. The land in Lodi is subject to a ground lease. Over the past
21 months Western has been redeveloping and re-tenanting the core retail
properties, located in the greater Portland area. From inception to June 30,
2000, Western's unconsolidated real estate subsidiary has capitalized
$1,908,000 ($255,000 in 1998, $1,299,000 in 1999, $354,000 in 2000) of interest
in connection with the redevelopment of the retail properties.
10
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Note D: INVESTMENTS IN MORTGAGE LOANS
The following table provides information summarizing Western's investment in
mortgage loans:
<TABLE>
<CAPTION>
JUNE 30 December 31 Interest Rate
--------- ----------- -------------
2000 1999 (per annum)
(In thousands)
<S> <C> <C> <C>
Loan on a retail property in Concord,
California, secured by a first deed of
trust on the property Western sold in
1997. Mortgage is due August 2007............. $ 1,169 $ 1,236 8.5% through August 31, 2002
--- --- 9.0% after August 31, 2002
Loan on a shopping center in Dublin,
California, secured by a first deed of
trust on the property. Interest only
is payable monthly. Mortgage is due
August 2004................................... 8,200 8,200 8.5%
Participating loan on a shopping
center under development in Walnut Creek,
California, secured by a first deed of
trust on the property. Total loan
commitment is $42 million. Mortgage
is due December 2008.......................... 10,430 7,793 9.0% on balances up to $26.5 million
--- --- 10.5% on balances above $26.5 million
Loan on a shopping center in Red Bluff,
California, secured by a first deed of
trust on the property Western sold in
March 2000. Mortgage is due July 2000......... 5,750 --- 10.0%
-------- ---------
$25,549 $17,229
======== =========
</TABLE>
During July 2000, Western received payment in full of the $5,750,000 loan
received in connection with the sale of the Red Bluff property in the second
quarter. The net proceeds were used to pay down the balance under the bank line
of credit.
11
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Note E: CAPITAL EXPENDITURES
It is Western's practice to capitalize certain expenditures that exceed $4,000
and which are associated with the improvement and rental of real estate
investments. Capitalized costs include leasing-related costs and property
improvements. Capital expenditures for the three and six months ended June 30,
2000, and 1999 are as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2000 1999 2000 1999
---------------------- -------------------------
(In thousands) (In thousands)
<S> <C> <C> <C> <C>
"Build to Suit" capital improvements .................... $ 6 $ -- $ 14 $ --
Capitalized costs incurred in connection with
leasing previously UNLEASED space ................. (46) 2 (31) 13
Capitalized costs incurred in connection with
leasing previously LEASED space .................... 1,057 706 2,045 1,071
Capitalized costs which relate to
improvements to common areas ...................... 38 557 212 678
Capitalized costs which relate to
development ....................................... 355 --- 815 --
--------- -------- --------- --------
Total capitalized expenditures .......................... $ 1,410 $ 1,265 $ 3,055 $ 1,762
========= ======== ========= ========
Improvements ............................................ $ 1,311 $ 1,251 $ 2,854 $ 1,714
Leasing-related costs ................................... 99 14 201 48
--------- -------- --------- --------
Total capitalized expenditures .......................... $ 1,410 $ 1,265 $ 3,055 $ 1,762
========= ======== ========= ========
</TABLE>
12
<PAGE>
During the three months ended June 30, 2000, Western entered into leases that
obligate Western to fund certain leasing commissions and property improvements.
These obligations relate to new leases, a portion of which was paid and
capitalized during the quarter ended June 30, 2000, and is reflected in the
preceding table.
The aggregate and per square foot information representing expenditures
associated with leasing for the quarter ended June 30, 2000, is as follows:
<TABLE>
<CAPTION>
New Leases
TENANT IMPROVEMENTS
-------------------
Capitalized Cost All Expenditures
------------------------------------------ ------------------------------------------
Per Per
Aggregate Square Square Aggregate Square Square
Property Type Amount Feet of GLA Foot of GLA Amount Feet of GLA Foot of GLA
------------- ---------- ----------- ----------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Shopping centers and
single-tenant retail
properties $254,895 12,457 $20.46 $255,895 27,036 $9.46
<CAPTION>
LEASING COMMISSIONS
-------------------
Capitalized Cost All Expenditures
------------------------------------------ ------------------------------------------
Per Per
Aggregate Square Square Aggregate Square Square
Property Type Amount Feet of GLA Foot of GLA Amount Feet of GLA Foot of GLA
------------- ---------- ----------- ----------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Shopping centers and
single-tenant retail
properties $ 34,965 5,297 $ 6.60 $ 37,590 27,036 $1.39
</TABLE>
13
<PAGE>
Note F: SEGMENT DISCLOSURE
FASB No. 131 requires disclosure about segments of Western and related
information.
Western evaluates performance and makes resource-allocation decisions on an
individual property basis. For financial reporting purposes, Western has grouped
its properties into three segments: shopping centers (including shopping centers
under development), single-tenant retail and other commercial properties.
Investments principally consist of real estate, but also include real estate
secured loans (four) and real estate joint ventures (three).
Non-segment assets include cash, accounts receivable and deferred financing
costs.
The accounting policies of the segments are the same as those described in Note
2 to Western's annual report on Form 10-K for the year ended December 31, 1999.
Western assesses and measures segment operating results based on a performance
measure referred to as Funds From Operations ("FFO"). Prior to January 1, 2000,
the National Association of Real Estate Investment Trusts defined FFO as net
income, calculated in accordance with generally accepted accounting principles
(GAAP) plus depreciation and amortization of real estate rental property (a)
reduced by gains and increased by losses on (i) sales of property and (ii)
extraordinary and unusual items, and (b) after adjustments for unconsolidated
partnerships and joint ventures. Effective January 1, 2000, net income is not
adjusted for unusual items unless they qualify as extraordinary items under GAAP
in calculating FFO. This new interpretation did not have a significant impact on
Western. FFO does not represent cash flows from operations as defined by GAAP
and should not be considered a substitute for net income as an indicator of
Western's operating performance, or for cash flows as a measure of liquidity.
Furthermore, FFO as disclosed by other REITS may not be comparable to Western's
calculation of FFO for itself.
14
<PAGE>
The revenues and profit (loss), for each of the reportable segments are
summarized as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2000 1999 2000 1999
------------------------ ------------------------
(In thousands) (In thousands)
<S> <C> <C> <C> <C>
REVENUES:
Shopping centers....................................... $13,606 $13,052 $26,778 $24,949
Single tenant retail................................... 423 399 859 827
Commercial and other................................... 697 1,191 1,630 2,437
Non-segment............................................ 91 54 141 136
------- ------- ------- -------
Total revenues...................................... $14,817 $14,696 $29,408 $28,349
======= ======= ======= =======
PROFIT (LOSS):
Funds from operations:
Shopping centers....................................... $10,782 $10,016 $21,986 $19,788
Single tenant retail................................... 423 389 830 779
Commercial and other................................... 652 1,028 1,480 2,274
------- ------- ------- -------
Total segment FFO................................... 11,857 11,433 24,296 22,841
Interest income........................................ 83 62 107 142
Other income........................................... 8 13 33 15
Interest expense....................................... (3,705) (3,516) (7,507) (7,050)
Other operating expense................................ (965) (953) (2,089) (1,788)
Non-Real Estate Depreciation........................... (85) (48) (156) (91)
General and administrative............................. (872) (623) (1,828) (1,514)
------- ------- ------- -------
Consolidated FFO................................... 6,321 6,368 12,856 12,555
Gains (less loss) on sales of real estate investments.. -- 2,113 4,256 2,113
Gains on sale of unconsolidated
Real estate investments............................ 339 -- 339 --
Provision for loss of real estate investments.......... (1,745) -- (1,745) --
Depreciation and amortization.......................... (2,334) (2,928) (4,912) (5,834)
Depreciation and amortization, unconsolidated
Real estate ....................................... (682) -- (833) --
Minority interest...................................... (401) (399) (802) (802)
Change in accounting principle......................... -- -- -- (57)
------- ------- ------- -------
Net income......................................... $1,498 $5,154 $9,159 $7,975
======= ======= ======= =======
</TABLE>
15
<PAGE>
The assets for each of the reportable segments are summarized as follows as of
June 30, 2000 and December 31, 1999 (in thousands):
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
--------------------------------
<S> <C> <C>
ASSETS:
Shopping centers............................................... $380,798 $387,078
Single tenant retail........................................... 5,382 8,512
Commercial and other........................................... 20,970 22,343
Non-segment.................................................... 14,290 9,333
-------- --------
Total assets................................................ $421,440 $427,266
======== ========
<CAPTION>
June 30, June 30,
2000 1999
--------------------------------
<S> <C> <C>
REAL ESTATE INVESTMENT CAPITAL EXPENDITURES:
Developments:
Shopping centers............................................ $ 3,102 $ 1,543
Single tenant retail........................................ (66) 168
Commercial and other........................................ 19 51
-------- --------
Total developments....................................... $ 3,055 $ 1,762
======== ========
</TABLE>
16
<PAGE>
Note G: EARNINGS PER SHARE
In February 1997, the FASB issued FAS No. 128, EARNINGS PER SHARE. The purpose
of this pronouncement is to show the effect of the exercise of certain options
and other convertible securities on earnings per share. A reconciliation of the
denominator used in the calculation of diluted earnings per share for the three
and six months ended June 30, 2000 and 1999 is shown below:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
---------------------- ---------------------
(In thousands) (In thousands)
<S> <C> <C> <C> <C>
Weighted average shares outstanding........................ 17,245,917 17,222,814 17,242,196 17,220,368
Plus: Options with exercise prices below period-end
market price of common stock......................... 1,503 8,976 156 5,105
Western stock issued under restricted stock plan..... 46,173 39,585 46,173 39,585
Western Kienow OP units convertible into shares of
beneficial interest.................................. --- 1,432,364 --- ---
Pinecreek OP units convertible into shares of
beneficial interest.................................. 88,498 ---- 88,498 ---
---------- ---------- ---------- ----------
Adjusted weighted average shares outstanding............... 17,382,091 18,703,739 17,377,023 17,265,058
========== ========== ========== ==========
</TABLE>
During the three and six-months ended June 30, 2000, and the six-months ended
June 30, 1999, conversion of the Western/Kienow OP units would have had the
effect of increasing earnings per share, and as such, conversion was not assumed
in the above calculation.
The following stock options are not included in the diluted earnings per share
calculation because the options' exercise price was greater than the average
market price of the shares of beneficial interest for the three and six-months
ended June 30, 2000 and, therefore, the effect would be to increase earnings.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
2000 2000
------------------ ----------------
<S> <C> <C>
Number of options......................................... 818,000 839,600
Range of exercise prices.................................. $11.25 - $14.78 $11.00 - $14.78
</TABLE>
17
<PAGE>
Note H: COMMITMENTS AND CONTINGENCIES
In connection with the redevelopment of a property located in Walnut Creek,
California (Plaza Escuela), Western committed to fund $42 million on a
participating note secured by a first deed of trust on the property under
development. At June 30, 2000, Western had funded a total of $10.4 million
relating to this investment.
As of June 30, 2000, Western had commitments under several new and renewal
leases which will result in expenditures of approximately $790,000 in real
estate improvements and leasing commissions.
Note I: SUBSEQUENT EVENTS
During July 2000, Western received payment in full of the $5,750,000 loan
received in connection with the sale of the Red Bluff property in the second
quarter. The net proceeds were used to pay down the balance under the bank line
of credit.
Also during July 2000, Western sold a 102,555 square foot shopping center
located in Gridley, California, for $3,275,000, at a loss of approximately $1.1
million. The net sales proceeds were used to pay down the balance under the bank
line of credit.
18
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
INTRODUCTION
The following discussion and analysis of the consolidated financial condition
and results of operations of Western Properties Trust and its subsidiaries
("Western") should be read in conjunction with the Consolidated Financial
Statements and Notes thereto appearing elsewhere in this report on Form 10-Q.
Historical results and percentage relationships set forth herein are not
necessarily indicative of future operations.
CAUTIONARY STATEMENTS
The discussions in Management's Discussion and Analysis of Financial Condition
and Results of Operations contain certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 that reflect
management's current views with respect to future events and financial
performance. The matters described in such forward-looking statements are
subject to risks and uncertainties including, but not limited to: the effects of
future events on Western's financial performance; the risk that Western may be
unable to finance its planned acquisition and development activities; risks
related to the retail or commercial businesses in which Western's properties
compete, including the potential adverse impact of external factors, such as
inflation, consumer confidence, unemployment rates, consumer tastes and
preferences, and the e-commerce environment; risks associated with Western's
development activities, such as the potential for cost overruns, delays and lack
of predictability with respect to the financial returns associated with these
development activities; the risk of potential increase in market interest rates
from current rates; and risks associated with real estate ownership, such as the
potential adverse impact of environmental contamination or changes in the local
economic climate on the revenues and the value of Western's properties.
OVERVIEW
Founded in 1962, Western Properties Trust ("WPT") and its affiliates own and
operate community and neighborhood shopping centers located in the western
United States. The corporate office of the self-administered equity real estate
investment trust is in the San Francisco Bay Area city of Emeryville,
California. Its shares are traded on the American Stock Exchange under the
symbol "WIR".
Western Properties Trust's consolidated financial statements include the
accounts of the following entities: WPT; Western/Kienow's L.P., a Delaware
limited partnership; Western Pinecreek L.P., a Delaware limited partnership;
GW100, a general partnership; and WPT's wholly owned subsidiary, WIRET Asset
Management Services (a California corporation and a licensed real estate
broker in the State of California) (collectively, "Western"). These entities
comprise all of the subsidiaries over which WPT exercises direct or indirect
voting control. Western is in the business of acquiring, managing, leasing
and developing retail, commercial and industrial properties. WPT is the sole
general partner in Western/Kienow's L.P. and owned a 60% interest therein as
of June 30, 2000. WPT is also the sole general partner in Western Pinecreek
L.P. and owned a 75% interest therein as
19
<PAGE>
of June 30, 2000. Through an unconsolidated real estate subsidiary, Western
owns 11 properties comprising approximately 457,000 square feet of retail
gross leasable area ("GLA"). Throughout this Form 10-Q reference to the
unconsolidated real estate subsidiary is a reference to this 11 property
portfolio. The combined GLA of Western and its unconsolidated real estate
subsidiary at June 30, 2000 was approximately 5.4 million square feet of GLA.
At June 30, 2000, Western and its unconsolidated real estate subsidiary's
real estate portfolio was comprised of 58 properties, 51 of which were retail
properties.
LIQUIDITY AND CAPITAL RESOURCES
Western anticipates that cash flows provided by operations and other sources
available to Western will continue to provide adequate funds for all current
principal and interest payments as well as dividend payments required to
maintain its status as a real estate investment trust under the Internal Revenue
Code. Cash on hand, net proceeds from the sale of properties held for sale and
borrowings under the existing bank line, as well as other debt and equity
alternatives, are expected to provide the necessary funds to achieve future
growth. At June 30, 2000, 15 properties comprising 1,375,000 square feet of GLA
were held for sale. The book value of these properties (before deduction for
depreciation) was $116,416,000.
The agreements executed in connection with Western's senior notes and its bank
line contain certain covenants (including minimum shareholder's equity, maximum
ratio of debt to net worth and income coverage requirements) which impose
certain limitations on the incurrence of additional debt and other restrictions
on Western.
As of June 30, 2000, Western's aggregate outstanding indebtedness of
$213,437,000 consisted of $134,537,000 in fixed rate, long-term debt and
$78,900,000 of borrowings under Western's variable rate, unsecured bank line.
As of June 30, 2000, Western had $17.6 million available under its $100 million
bank line. The availability on the $100 million bank line is net of a $3.5
million outstanding letter of credit which is related to Western's investment in
the Walnut Creek development. Western intends to replace or renew the bank line
before it expires on September 30, 2001.
COMMITMENTS AND CONTINGENCIES
In connection with the redevelopment of a property located in Walnut Creek,
California, Western committed to fund $42 million on a note secured by a first
deed of trust on the property under development. At June 30, 2000, Western had
funded a total of $10.4 million relating to this investment.
As of June 30, 2000, Western had commitments under several new and renewal
leases which will result in expenditures of approximately $790,000 in real
estate improvements and leasing commissions.
20
<PAGE>
FUNDS FROM OPERATIONS
Industry analysts and Western consider Funds From Operations ("FFO") to be an
alternative measure of an equity REIT's performance since such measure does not
recognize depreciation and amortization of real estate assets as reductions of
income from operations. Historical cost accounting for real estate assets
implicitly assumes that the value of real estate assets diminishes predictably
over time. Yet, since real estate values have historically risen or fallen with
market conditions, Western, along with many other industry investors, considers
presentation of operating results for real estate companies that use historical
cost accounting to be less than fully informative.
Prior to January 1, 2000, the National Association of Real Estate Investment
Trusts defined FFO as net income, calculated in accordance with generally
accepted accounting principles (GAAP) plus depreciation and amortization of real
estate rental property (a) reduced by gains and increased by losses on (i) sales
of property and (ii) extraordinary and unusual items, and (b) after adjustments
for unconsolidated partnerships and joint ventures. Effective January 1, 2000,
net income is not adjusted for unusual items unless they qualify as
extraordinary items under GAAP in calculating FFO. This new interpretation did
not have a significant impact on Western. FFO does not represent cash flows from
operations as defined by GAAP and should not be considered a substitute for net
income as an indicator of Western's operating performance, or for cash flows as
a measure of liquidity. Furthermore, FFO as disclosed by other REITS may not be
comparable to Western's calculation of FFO for itself.
21
<PAGE>
The table below provides a reconciliation of net income in accordance with GAAP
to FFO as calculated under NAREIT guidelines for the three month period ended
June 30, 2000 and 1999 (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------- ---------
2000 1999 2000 1999
------------------------ -----------------------
(In thousands) (In thousands)
<S> <C> <C> <C> <C>
Net income................................................. $ 1,498 $ 5,154 $ 9,159 $ 7,975
Less: Gains on sales of real estate investments......... -- (2,113) (4,256) (2,113)
Real property depreciation........................ 2,096 2,594 4,375 5,185
Amortization of tenant improvement costs.......... 167 251 391 481
Amortization of leasing-commission costs.......... 71 83 146 168
Minority interest................................. 401 399 802 802
Provision for loss on real estate
Investments....................................... 1,745 -- 1,745 --
Unconsolidated real estate subsidiary -
Gains on sales of real estate investments...... (339) -- (339) --
Real property depreciation..................... 112 -- 243 --
Amortization of tenant improvement 568 -- 587 --
costs..........................................
Amortization of leasing-commission 2 -- 3 --
costs..........................................
Cumulative effect of change in accounting
principle......................................... -- -- -- 57
------- ------- -------- -------
Funds From Operations...................................... $ 6,321 $ 6,368 $12,856 $12,555
======= ======= ======== =======
</TABLE>
The dividend payout ratio for the quarter ended June 30, 2000 and 1999
(calculated as dividend distributions made by Western for the applicable period
divided by diluted FFO) was 83% and 82%, respectively.
22
<PAGE>
RESULTS OF OPERATIONS
COMPARISON OF QUARTERS ENDED JUNE 30, 2000 AND 1999
Net income decreased $3,656,000 to $1,498,000 for the quarter ended June 30,
2000 as compared to $5,154,000 for the quarter ended June 30, 1999. The primary
factors in this decrease were (i) the $1,745,000 provision for loss on real
estate investment and (ii) the absence of gains on sales of real estate
investments. During the three months ended June 30, 1999, Western recognized
$2,113,000 of gains resulting from the sales of real estate investments.
On a per share basis (calculated using diluted weighted average shares
outstanding), net income decreased $0.21 from $0.30 during the second quarter of
1999 to $0.09 in the same period of 2000.
In addition to the two primary factors mentioned above, other factors resulting
in the decrease include decreased minimum rents and other income, increased
interest expense and other operating expense, partially offset by increased
interest income and decreased depreciation expense.
Minimum rents decreased $146,000 from $11,032,000 for the quarter ended June 30,
1999 to $10,886,000 for the quarter ended June 30, 2000. This decrease mainly
results from the dispositions that occurred in the third and fourth quarters of
1999, as well as the first quarter of 2000, partially offset by the (i) fourth
quarter of 1999 acquisitions and (ii) significant lease.
Other income decreased $104,000 from $311,000 for the quarter ended June 30,
1999 to $207,000 for the same period in 2000. This decrease is primarily due to
decreased development fees earned in connection with the Plaza Escuela
development and decreased lease termination fee income. Western entered into the
development agreement with Plaza Escuela, LLC for the Plaza Escuela project
during the second quarter of 1998.
Interest expense increased $189,000 from $3,516,000 for the quarter ended June
30, 1999 to $3,705,000 for the second quarter ended June 30, 2000. This increase
is primarily due to increased interest rates on Western's variable rate bank
line of credit in 2000. The average interest rate for the second quarter of 2000
was 7.4% per annum compared with 6.2% per annum in the same period of 1999.
Other operating expense increased $236,000 from $1,343,000 for the three-month
period ended June 30, 1999 to $1,107,000 for the same period in 2000. This
increase is primarily due to reduced capitalization of development personnel
compensation expense in the current year.
Interest income is $244,000 higher in the three-month period ended June 30, 2000
from the same period a year earlier. This increase primarily results from
interest earned in connection with the $5,750,000 purchase money promissory
note, bearing 10% per annum, which was received from the purchaser in connection
with the sale of the Red Bluff, California property (the "Red Bluff Note"). This
note was paid in full in July 2000.
Depreciation expense is $558,000 lower in the three-month period ended June 30,
2000 from the same period in 1999. This decrease is primarily due to the
discontinuance of depreciation on properties held for sale. As of June 30, 2000,
15 properties totaling 1,375,000 of square feet of GLA are being held for sale.
23
<PAGE>
COMPARISON OF SIX MONTHS ENDED JUNE 30, 2000 AND 1999
Net income increased $1,184,000 to $9,159,000 for the six months ended June 30,
2000 as compared to $7,975,000 for the same period in 1999. On a per share basis
(calculated suing diluted weighted average shares outstanding), net income
increased $0.07 from $0.46 for the six-month period ended June 30, 1999 to $0.53
for the comparable period in 2000.
The factors contributing to the higher net income are increased gains on sales
of real estate investments, income from our unconsolidated real estate
subsidiary, interest income, minimum rents and decreased depreciation expense.
Partially offsetting this income are the provision for loss on real estate
investments, as well as increased interest expense, other operating expense and
general and administrative expenses.
During the six-month period ended June 30, 2000, Western sold three properties
recognizing gains on sales of $4,256,000, as compared with the same period in
1999 sales of three properties that resulted in gains on sales of $2,113,000. As
a consequence, Western's gains on sale of real estate investments increased
$2,143,000 in 2000.
Income from our unconsolidated real estate subsidiary increased $514,000 to
$659,000 for the six-month period ended June 30, 2000, as compared to $145,000
for the same six-month period of 1999. Most of this increase reflects the
benefit of redevelopment and re-tenanting of eight of the Kienow's ten core
properties. Western anticipates that the remaining two core properties will be
leased and generating rental income during the latter part of 2000.
Interest income was $1,124,000 for the six-month period ended June 30, 2000, an
increase of $253,000 from $871,000 for the comparable period in 1999. This
increase primarily results from interest earned in connection with the
$5,750,000 Red Bluff Note received in connection with the sale of the Red Bluff,
California property. This note was paid in full during July 2000.
Minimum rent increased $140,000 to $22,240,000 for the six-month period ended
June 30, 2000, as compared to $22,100,000 for the same 1999 six-month period.
Most of this increase results from the significant lease of the Napa property to
Walmart, which occurred in late 1999.
Depreciation expense is $856,000 lower in the six-month period ended June 30,
2000 from the same period in 1999. This decrease is primarily due to the
discontinuance of depreciation on properties held for sale.
Interest expense increased $457,000 from $7,507,000 for the six months ended
June 30, 1999 to $7,050,000 for the same period ended June 30, 2000. This
increase is primarily due to increased interest rates on Western's variable rate
bank line of credit in 2000.
Other operating expense is $409,000 higher in the six-month period ended June
30, 2000, as compared to the comparable period in 1999. General and
administrative expense is $314,000 higher in the six-month period ended June 30,
2000, as compared to the same period a year earlier. These increases primarily
are attributable to increased accounting costs and increased compensation costs,
as well as reduced capitalization of development personnel compensation expense
in the current year.
24
<PAGE>
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Western is exposed to interest rate changes primarily through its bank line and
long-term debt used to maintain liquidity and fund capital expenditures and
expansion of Western's real estate portfolio and operations. Western's interest
rate risk-management objective is to limit the impact of interest rate changes
on earnings and cash flows and to lower its overall borrowing costs. Western's
objective with regard to long-term debt is to borrow primarily at fixed rates.
At June 30, 2000, the outstanding balance on Western's variable rate bank line
was $78,900,000, and the weighted average interest rate was 7.80% per annum. The
bank line facility matures September 30, 2001. At June 30, 2000, the outstanding
balance of Western's fixed rate senior notes was $124,836,000 and the weighted
average coupon interest rate for all senior notes was 7.47% per annum. The
senior notes mature February 2004 ($49,947,000), September 2006 ($24,976,000),
September 2008 ($24,956,000) and September 2010 ($24,957,000). At June 30, 2000,
the outstanding principle balance of Western's fixed rate mortgage note was
$9,701,000, which bears an interest rate of 7.61% per annum. This amortizing
note is due May 2004 with a balloon payment of $8,737,000 due at that time.
The preceding information incorporates only those exposures that exist as of
June 30, 2000, and does not consider those exposures or positions that could
arise after that date. Moreover, because current and future funding commitments
are not presented in the preceding paragraph, the information presented therein
has limited predictive value. As a result, the impact on Western's operating
results with respect to interest rate fluctuations will depend on the exposures
that arise during the period, Western' interest rate risk management strategies
at that time and interest rates.
This discussion of Western's risk-management activities includes
"forward-looking statements" that involve risk and uncertainties. Actual
results could differ materially from those projected in the forward-looking
statements.
25
<PAGE>
PART II. OTHER INFORMATION
Item 1 - 3 None
Item 4. Submission of Matters to a Vote of Security Holders
At the regular Annual Meeting of Shareholders of Western Properties Trust, held
on May 11, 2000, the following matters were submitted to a vote of security
holders:
(a) The election of the following trustees to serve for a term of
three years expiring at the conclusion of the 2003 annual
meeting of shareholders: Reginald B. Oliver and Joseph
Colmery.
Reginald B. Oliver: Approved - 15,693,859 shares were voted in
favor and 219,205 shares withheld authority to vote.
Joseph Colmery: Approved - 15,689,976 shares were voted in
favor and 223,088 shares withheld authority to vote.
(b) Ratification of the appointment of KPMG LLP, independent
certified public accountants, as the Company's auditors for
the year ending December 31, 2000.
Approved - 15,808,321 shares were voted in favor, 31,624
shares were voted against, and 73,120 shares abstained from
voting.
Item 5. None
Item 6. Exhibits and reports on Form 8-K.
(a) Exhibits
(numbered in accordance with Item 601 of Regulation S-K)
(3) Declaration of Trust, as amended (filed as Exhibit
3 to Registrant's 10-Q for the quarter ended
September 30, 1998, and incorporated herein by
reference).
26
<PAGE>
<TABLE>
<S> <C>
(4.1) Form of Indenture relating to the Senior Notes
(filed as Exhibit 4.1 to Registration Statement on
Form S-3 No. 33-71270 and incorporated herein by
reference).
(4.2) Form of Senior Notes (filed as Exhibit 4.2 to
Registration Statement on Form S-3 No. 33-71270 and
incorporated herein by reference).
(4.3) Form of Supplemental Indenture relating to the
7.1% Senior Notes (filed as Exhibit 4.5 on Form
8-K, dated September 24, 1997, and incorporated
herein by reference).
(4.4) Form of Supplemental Indenture relating to the
7.2% Senior Notes (filed as Exhibit 4.6 on Form
8-K, dated September 24, 1997, and incorporated
herein by reference).
(4.5) Form of Supplemental Indenture relating to the
7.3% Senior Notes (filed as Exhibit 4.7 on Form
8-K, dated September 24, 1997, and incorporated
herein by reference).
(10.1) Western's Nonqualified Stock Option Plan (filed as
Exhibit 4.2 to Registration Statement on Form S-8
No. 33-27016 and incorporated herein by
reference).
(10.2)+ Compensation Agreement (filed as Exhibit 10.3 to
Registrant's 10-K for the fiscal year ended
December 31, 1997, and incorporated herein by
reference).
(10.3)+ Management Contracts (filed as Exhibit 10.4 to
Registrant's 10-Q for the quarter ended March 31,
1998, and incorporated herein by reference).
(10.4)+ Western's 1998 Equity Incentive Plan (filed as
Exhibit 10.4 to Registrant's 10-Q for the quarter
ended June 30, 1998, and incorporated herein by
reference).
(10.5)+ Stock Purchase and Contribution agreement dated
September 29, 1998 (Kienow's Acquisition) (filed as
Exhibit 10.5 to Registrant's 10-Q for the quarter
ended September 30, 1998, and incorporated herein
by reference).
27
<PAGE>
(10.6) Agreement of Limited Partnership of
Western/Kienow's, LP dated October 30,1998 (filed
as Exhibit 10.6 to Registrant's 10-Q for the
quarter ended September 30, 1998, and incorporated
herein by reference).
(10.7)+ Management Contract (filed as Exhibit 10.7 to
Registrant's 10-Q for the quarter ended September
30, 1999, and incorporated herein by reference).
(10.8) Agreement of Limited Partnership of Western
Pinecreek, L.P. dated November 17, 1999 (filed as
Exhibit 10.8 to Registrant's 10-K for the year
ended December 31, 1999, and incorporated herein by
reference).
(27) * Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
None.
----------
* Filed with this report.
+ Management Contract or compensatory plan or arrangement.
28
<PAGE>
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 thereunto duly authorized.
WESTERN PROPERTIES TRUST
------------------------
(Registrant)
Dated: August 11, 2000 By: s/Bradley N. Blake
-------------------- ----------------------------------
Bradley N. Blake
Chairman of the Board,
President, Chief Executive Officer
and Trustee
Dated: August 11, 2000 By: s/Dennis D. Ryan
-------------------- ----------------------------------
Dennis D. Ryan
Executive Vice President,
Chief Financial Officer
and Trustee
29
