<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15
OF THE SECURITIES EXCHANGE ACT
For Quarter Ended September 30, 2000 Commission File No. 06201
BRESLER & REINER, INC.
--------------------------------------------------------------------------------
(Exact name of Registrant as Specified in its Charter)
DELAWARE 52-0903424
--------------------------------------- -------------------------------------
(State or other jurisdiction of (IRS Employer Identification)
incorporation or organization)
401 M Street, S.W., Washington, D.C. 20024
--------------------------------------------------------------------------------
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number including area code: (202) 488-8800
-----------------------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 of the Securities Exchange Act of 1934 during
the preceding twelve months, and (2) has been subject to the filing requirements
for at least ninety (90) days.
Yes: X No: ____
-----
Number of Shares of Common Stock
Outstanding November 9, 2000: 2,738,906
<PAGE>
BRESLER & REINER, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
ASSETS
------
<TABLE>
<CAPTION>
Sept. 30, 2000 Dec. 31, 1999
--------------- ---------------
(Unaudited)
<S> <C> <C>
Rental Property and Equipment, Net $ 59,123,000 $ 34,190,000
Construction in Process 3,882,000 4,244,000
Homes Held for Sale 861,000 974,000
Land Held for Sale 4,266,000 4,254,000
Receivables:
Mortgages and Notes, Affiliates 2,739,000 3,553,000
Mortgages and Notes, Other 504,000 385,000
Other 4,654,000 3,210,000
Investment In and Advances To
Joint Ventures and Partnerships 5,347,000 1,911,000
Cash and Cash Equivalents 3,887,000 7,606,000
Cash Deposits Held in Escrow 8,458,000 6,035,000
Investments 30,512,000 35,806,000
Income Taxes Receivable 2,717,000 1,190,000
Due From Affiliates 0 137,000
Deferred Charges and Other Assets 2,931,000 1,757,000
--------------- ---------------
$ 129,881,000 $ 105,252,000
=============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Liabilities:
Mortgage Loans Payable $ 4,975,000 $ 5,054,000
Notes Payable 8,716,000 0
Accounts Payable 475,000 638,000
Accrued Expenses 2,311,000 1,043,000
Due To Affiliates 60,000 0
Deposits 566,000 259,000
Deferred Income 15,000 19,000
Deferred Income Taxes Payable 3,748,000 3,748,000
--------------- ---------------
Total Liabilities 20,866,000 10,761,000
Minority Interest 7,848,000 1,063,000
Shareholders' Equity 101,167,000 93,428,000
--------------- ---------------
$ 129,881,000 $ 105,252,000
=============== ===============
</TABLE>
<PAGE>
BRESLER & REINER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
-------------- --------------
<S> <C> <C>
Revenues:
Sales of Homes $ 3,398,000 $ 4,011,000
Other Construction (Net) 558,000 671,000
Rentals - Apartments 1,982,000 1,850,000
Rentals - Commercial 13,500,000 8,774,000
Hotel Income 6,046,000 5,670,000
Management Fees, Affiliates 562,000 697,000
Leasing Fee, Affiliates 386,000 561,000
Interest:
Affiliates 356,000 941,000
Other 1,630,000 1,437,000
Gain on Sale of Realty Interests 935,000 446,000
Equipment Leasing and Vending 21,000 25,000
Gain on Sale of Equity Investments 0 2,756,000
Income from Equity Investments 607,000 728,000
Other 48,000 45,000
-------------- --------------
30,029,000 28,612,000
-------------- --------------
Costs And Expenses:
Cost of Home Sales 3,123,000 3,817,000
Rentals - Apartments 1,314,000 1,131,000
Rentals - Commercial 5,466,000 3,325,000
Hotel Expenses 4,102,000 3,785,000
Land Carrying Cost 78,000 77,000
General and Administrative 1,484,000 1,233,000
Interest Expense 524,000 327,000
Equipment Leasing and Vending 19,000 21,000
Other 338,000 6,000
-------------- --------------
16,448,000 13,722,000
-------------- --------------
Net Income Before Income Taxes and
Minority Interest 13,581,000 14,890,000
Provision For Income Taxes 4,310,000 5,571,000
Minority Interest 1,369,000 0
-------------- --------------
Net Income $ 7,902,000 $ 9,319,000
============== ==============
Earnings Per Common Share $ 2.88 $ 3.36
============== ==============
Weighted Average Number of Common
Shares Outstanding 2,740,059 2,770,242
============== ==============
</TABLE>
<PAGE>
BRESLER & REINER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
-------------- --------------
<S> <C> <C>
Revenues:
Sales of Homes $ 1,327,000 $ 1,789,000
Other Construction (Net) 166,000 207,000
Rentals - Apartments 656,000 632,000
Rentals - Commercial 7,369,000 3,072,000
Hotel Income 2,089,000 1,877,000
Management Fees, Affiliates 98,000 243,000
Leasing Fee, Affiliates 4,000 187,000
Interest:
Affiliates 99,000 282,000
Other 701,000 607,000
Gain on Sale of Realty Interests 613,000 154,000
Equipment Leasing and Vending 7,000 10,000
Gain on Sale of Equity Investments 0 2,756,000
Income from Equity Investments 28,000 267,000
Other 14,000 13,000
-------------- --------------
13,171,000 12,096,000
-------------- --------------
Costs And Expenses:
Cost of Home Sales 1,247,000 1,774,000
Rentals - Apartments 550,000 412,000
Rentals - Commercial 3,363,000 1,134,000
Hotel Expenses 1,429,000 1,313,000
Land Carrying Cost 26,000 25,000
General and Administrative 427,000 354,000
Interest Expense 309,000 109,000
Equipment Leasing and Vending 7,000 6,000
Other 129,000 0
-------------- --------------
7,487,000 5,127,000
-------------- --------------
Net Income Before Income Taxes and
Minority Interest 5,684,000 6,969,000
Provision For Income Taxes 1,208,000 2,466,000
Minority Interest 1,369,000 0
-------------- --------------
Net Income $ 3,107,000 $ 4,503,000
============== ==============
Earnings Per Common Share $ 1.13 $ 1.63
============== ==============
Weighted Average Number of Common
Shares Outstanding 2,738,906 2,762,528
============== ==============
</TABLE>
<PAGE>
BRESLER & REINER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
-------------- --------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 7,902,000 $ 9,319,000
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 1,727,000 1,678,000
Gain on Sale of Realty Interest (935,000) (446,000)
Gain on Sale of Equity Investments 0 (2,756,000)
(Income) from Equity Investments (607,000) (728,000)
Changes in Other Assets and Liabilities:
(Increase) Decrease In:
Construction in Process 362,000 1,122,000
Homes Held for Sale 113,000 (67,000)
Mortgages and Notes Receivable 1,630,000 909,000
Income Taxes Receivable (1,527,000) (237,000)
Cash Deposits Held in Escrow (2,423,000) 4,188,000
Other Assets (2,730,000) 397,000
Increase (Decrease) In Other Liabilities 8,390,000 (559,000)
-------------- --------------
Total Adjustments 4,000,000 3,501,000
-------------- --------------
Net Cash Provided by Operating Activities 11,902,000 12,820,000
-------------- --------------
Cash Flows from Investing Activities:
Investment in Joint Ventures (2,829,000) 4,113,000
Investment in US Treasury Instruments and
Municipal Bonds 5,294,000 (13,044,000)
Other (26,560,000) (791,000)
-------------- --------------
Net Cash Used in Investing Activities (24,095,000) (9,722,000)
-------------- --------------
Cash Flows from Financing Activities:
Repayment of Mortgage Loans Payable (79,000) (72,000)
Proceeds from Notes Payable 8,716,000 0
Purchase of Treasury Stock (163,000) (491,000)
-------------- --------------
Net Cash Provided by (Used in) Financing Activities 8,474,000 (563,000)
-------------- --------------
Net Increase (Decrease) in Cash and
Cash Equivalents (3,719,000) 2,535,000
Cash and Cash Equivalents, Beginning of Year 7,606,000 5,338,000
-------------- --------------
Cash and Cash Equivalents, End of Period $ 3,887,000 $ 7,873,000
============== ==============
</TABLE>
<PAGE>
Page Two
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
2000 1999
-------------- --------------
<S> <C> <C>
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Period for:
Interest (Net of Amount Capitalized) $ 328,000 $ 352,000
Income Taxes (Current and Estimated) 5,928,000 5,007,000
Supplemental Disclosure of Non-Cash Activities:
Escrowed Cash Deposits Received 457,000 117,000
Escrowed Cash Deposits Refunded 150,000 96,000
</TABLE>
<PAGE>
BRESLER & REINER, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
General:
The information contained in this report is furnished for the Registrant,
Bresler & Reiner, Inc., and its subsidiaries referred to collectively as the
"Company". In the opinion of Management, the information in this report
reflects all adjustments of a normal recurring nature which are necessary to
present a fair statement of the results for the interim period shown.
The financial information presented herein should be read in conjunction
with the financial statements included in the Registrant's Form 10-K for the
year ended December 31, 1999 as filed with the Securities and Exchange
Commission.
Certain accounts on the Balance Sheet reflect a substantial change
percentage-wise as compared to the December 31, 1999 statement. This is due to
the consolidation of the Waterside Complex into a new entity, B&R Waterfront
Properties, L.L.C., which included the Company's portion of the East Mall. The
accounts affected are: 1) Rental Property and Equipment, 2) Receivables -
Mortgages and Notes - Affiliates, 3) Receivables - Mortgages and Notes, Other,
4) Receivables - Other, 5) Deferred Charges and Other Assets, 6) Notes Payable,
7) Accrued Expenses, 8) Deposits and 9) Minority Interest.
Commitments and Contingencies:
At September 30, 2000, the Company had approximately $950,000 of
outstanding letters of credit for land improvements in housing projects that it
is developing.
Subsequent Events:
On October 13, 2000, B&R Waterfront Properties, L.L.C. entered into an
agreement with K/FCE Investment, L.L.C. and K/FCE Management, L.L.C., ("K/FCE")
a joint venture between
<PAGE>
Washington, D. C. based developer, The Kaempfer Company, Inc. and the national
developer, Forest City Enterprises, Inc. Pursuant to the terms of this
agreement, K/FCE Joint Venture, at its expense, will undertake physical and
economic studies and propose a redevelopment plan for the Waterside Complex. It
is expected that this will take approximately one year. In the event that K/FCE
can create a feasible plan, the parties will form a joint venture to redevelop
the property following the expiration, in September 2002, of the Government
(GSA) lease. Commencing with the fourth quarter of 2002 and during the ensuing
two to three year period necessary for the redevelopment and re-tenanting of the
Complex, the Company may experience a significant reduction of revenue.
Segment Information:
The company reports segment information for the following categories:
1)Home Sales, 2)Commercial Rental, 3)Residential Rental and 4)Hotel Operations.
Home Sales reflect the sale of homes constructed by the Company and settled
during the current period. Commercial Rental includes income from leases to
tenants ranging from retail businesses to governmental agencies. Residential
Rental income is generated from the leasing of apartments in the Washington
Metropolitan area. Hotel Operations consist of income generated by the Company's
two hotel properties.
The accounting policies of the segments are the same as those described in
the summary of significant accounting policies. The Company evaluates
performance based upon gross operating income from the combined properties in
each segment.
The Company's reportable segments are a consolidation of related
subsidiaries which offer different products. They are operated separately as
each segment requires different operating, pricing and leasing strategies. All
of the properties have been constructed by the Company and are incorporated into
the applicable segment.
<PAGE>
<TABLE>
<CAPTION>
For the Nine Months Ended
-------------------------
9/30/00 9/30/99
------------ ------------
<S> <C> <C>
Revenues:
Home sales & Other construction $ 3,956,000 $ 4,682,000
Commercial rental 13,500,000 11,529,000
Residential rental 1,982,000 1,850,000
Hotel operations 6,046,000 5,670,000
Other 4,545,000 7,922,000
Consolidation entries -0- (3,041,000)
------------ ------------
Total 30,029,000 28,612,000
------------ ------------
Gross operating income:
Home sales & Other construction 833,000 865,000
Commercial rental 8,034,000 6,907,000
Residential rental 668,000 608,000
Hotel operations 1,944,000 1,885,000
Other 2,102,000 6,545,000
SG&A (1,484,000) (1,233,000)
Income taxes and minority interest (5,679,000) (5,571,000)
Consolidation entries 1,484,000 (687,000)
------------ ------------
Total 7,902,000 9,319,000
------------ ------------
Assets:
Home sales 5,779,000 7,572,000
Commercial rental 72,735,000 40,178,000
Residential rental 1,906,000 1,821,000
Hotel management 9,890,000 10,502,000
Other 44,694,000 54,582,000
Income taxes receivable 2,717,000 249,000
Consolidation entries (7,840,000) (8,032,000)
------------ ------------
Total $129,881,000 $106,872,000
============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For the Three Months Ended
--------------------------
9/30/00 9/30/99
------------ ------------
<S> <C> <C>
Revenues:
Home sales & Other construction $ 1,493,000 $ 1,996,000
Commercial rental 7,369,000 4,046,000
Residential rental 656,000 632,000
Hotel operations 2,089,000 1,877,000
Other 1,564,000 5,022,000
Consolidation entries -0- (1,477,000)
------------ ------------
Total 13,171,000 12,096,000
------------ ------------
Gross operating income:
Home sales & Other construction 246,000 222,000
Commercial rental 4,006,000 2,469,000
Residential rental 106,000 182,000
Hotel operations 660,000 564,000
Other 666,000 4,918,000
SG&A (427,000) (354,000)
Income taxes and minority interest (2,577,000) (2,466,000)
Consolidation entries 427,000 (1,032,000)
------------ ------------
Total 3,107,000 4,503,000
------------ ------------
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Results of Operations
---------------------
Sales of Homes and Lots. 23 homes were settled in the first nine months of
------------------------
2000 compared with 27 homes in the same period of 1999. Net income from Home
Sales was $275,000 in the first nine months of 2000 as compared to $194,000 for
the same period of 1999. In the third quarter of 2000, 9 homes were settled as
compared to 12 homes in the same period of 1999. Net income from Home Sales was
$80,000 in the third quarter of 2000 as compared to $15,000 for the same period
of 1999.
Registrant's backlog of homes under contract of sale as of September 30
was 26 in 2000 as compared to 36 in 1999. Registrant receives a deposit of $500
to $2,000 which may be forfeited if the buyer terminates the agreement.
Rentals - Apartments: Income and Expenses. Rental income from apartments
------------------------------------------
was $1,982,000 in the first nine months of 2000, an increase of 7.14% as
compared to $1,850,000 for the same period in 1999. Income for the third quarter
of 2000 was $656,000, an increase of 3.80% as compared to $632,000 for the same
period in 1999. Expenses for the first nine months of 2000 were $1,314,000 as
compared to $1,131,000 in 1999, a 16.18% increase. Expenses for the third
quarter of 2000 were $550,000 as compared to $412,000 for the same period in
1999, an increase of 33.50%. Net income was $668,000 for the first nine months
of 2000 as compared to $719,000 for the same period in 1999, a decrease of
7.09%. For the third quarter of 2000, net income was $106,000 as compared to
$220,000 for the same period in 1999, a decrease of 51.82%. The increase in
rental expenses was the result of extraordinary maintenance and repair costs at
one of Registrant's apartment buildings.
Rentals - Commercial: Income and Expenses. Rental income from commercial
------------------------------------------
operations was $13,500,000 in the first nine months of 2000 as compared to
$8,774,000 for the same period in 1999, an increase of 53.87%. Income for the
third quarter of 2000 was $7,369,000, an increase of 139.88% over $3,072,000 for
the same period of 1999. Expenses for the first nine months of 2000 were
$5,466,000 as compared to $3,325,000 in 1999, an increase of 64.39%. Expenses
for the third quarter of 2000 were $3,363,000 as compared to $1,134,000 for the
same period in 1999, an increase of 196.56%. Net income was $8,034,000 for the
first nine months of 2000 as compared to $5,449,000 for the same period in 1999,
an increase of 47.44%. For the third quarter of 2000, net income was $4,006,000
as compared to $1,938,000 for the same period in 1999, an increase of 106.71%.
<PAGE>
The increase in Rental income and Rental expenses reflects the assignment
to the Company of leasehold interests in the Waterside Complex by S.E.W.
Investors and Town Center East Investors on July 1, 2000. Thereafter, the
Company consolidated the leasehold interests in the Waterside Complex into a
newly formed single entity, B&R Waterfront Properties, L.L.C. The Company holds
a 54% membership interest in this entity. Accordingly, effective July 1, 2000,
Registrant has reported the results of operations of the Complex on a
consolidated basis with elimination of the Minority Interest.
Hotel Income and Hotel Expense. Hotel Income and Hotel Expense reflect
------------ --------------
the operating results for the Company's two hotel properties for the nine months
ended September 30, as follows:
<TABLE>
<CAPTION>
Colonnade Holiday Inn Express
--------- -------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income 3,995,000 3,787,000 2,051,000 1,883,000
Expense 2,495,000 2,310,000 1,607,000 1,475,000
--------- --------- --------- ---------
Net Before Taxes 1,500,000 1,477,000 444,000 408,000
</TABLE>
The 2000 Colonnade operations reflect an occupancy rate of 73.00% for the
nine months ended September 30, 2000 as compared to a 72.80% occupancy rate in
the same period of 1999. The average daily room rate of $128.80 increased by
5.07% in 2000 over the 1999 average daily room rate of $122.59. Income from the
Colonnade operations was $3,995,000 in the first nine months of 2000 as compared
to $3,787,000 for the same period in 1999 or an increase of 5.49%. Income for
the third quarter of 2000 was $1,379,000, an increase of 7.82% over $1,279,000
for the same period of 1999. Expenses for the first nine months of 2000 were
$2,495,000 as compared to $2,310,000 in 1999, an increase of 8.01%. Expenses for
the third quarter of 2000 were $879,000 as compared to $803,000 for the same
period in 1999, an increase of 9.46%. Net income was $1,500,000 for the first
nine months of 2000 as compared to $1,477,000 for the same period in 1999, an
increase of 1.56%. For the third quarter of 2000, net income was $500,000 as
compared to $476,000 for the same period in 1999, an increase of 5.04%.
The 2000 Holiday Inn Express operations reflect a higher occupancy rate of
69.60% for the nine months ended September 30, 2000 as compared to a 61.90% rate
in the same period of 1999. The average daily room rate increased by 2.46% in
2000 over the same period of 1999. Income from the Holiday Inn Express
operations was $2,051,000 in the first nine months of 2000 as compared to
$1,883,000 for the same period in 1999 or an increase of 8.92%. Income for the
third quarter of 2000 was $710,0000, an increase of 18.73% over $598,000 for the
same period of 1999. Expenses for the first nine months of 2000 were $1,607,000
as
<PAGE>
compared to $1,475,000 in 1999, an increase of 8.95%. Expenses for the third
quarter of 2000 were $550,000 as compared to $510,000 for the same period in
1999, an increase of 7.84%. Net income was $444,000 for the first nine months of
2000 as compared to $408,000 for the same period in 1999, an increase of 8.82%.
For the third quarter of 2000, net income was $160,000 as compared to $88,000
for the same period in 1999, an increase of 81.82%.
Management Fees, Affiliates. Management fees, affiliates decreased in the
----------------------------
first nine months of 2000 by $135,000 and decreased in the third quarter of 2000
by $145,000. These decreases primarily resulted from the consolidation of the
results of operations of the B&R Waterfront Properties, L.L.C. as discussed
above.
Leasing Fees, Affiliates. Leasing fees, affiliates decreased in the first
-------------------------
nine months of 2000 by $175,000 and decreased in the third quarter of 2000 by
$183,000. These decreases primarily resulted from the consolidation of the
results of operations of the B&R Waterfront Properties, L.L.C. as discussed
above.
Interest - Affiliates: Interest income for the first nine months of 1999
----------------------
includes $518,000 of deferred interest earned as the result of Registrant's
purchase of the mortgage loan on one of its partnership's commercial properties.
There was no such income in the same period of 2000.
Gain on Sale of Realty Interests. The increase reflects the deferred
---------------------------------
profit recognized as the result of the payment by S.E.W. Investors of the
balance of the deferred purchase price of the 1980 sale of this portion of the
Waterside Complex.
Gain on Sale of Equity Investments. The 1999 results reflect revenue of
-----------------------------------
$2,756,000 from the sale of the apartment properties in Florida owned by two
partnerships, in which the Registrant held substantial partnership interests.
There was no such transaction in 2000.
Interest Expense. Interest expense for the first nine months increased as
-----------------
the result of the interest accrued on the two notes issued July 1, 2000 to
affiliated partnerships upon the assignment by the partnerships to the Company
of leasehold interests in the Waterside Complex. (See Notes Payable).
Other Expenses. During the first nine months of 2000, Registrant expensed
---------------
cash advances of $338,000 to a partnership operating at a loss. In the first
nine months of 1999,
<PAGE>
Registrant expensed cash advances of $6,000 to the same partnership.
Earnings Per Common Share. The 1999 nine months and three months results
--------------------------
reflect the earnings of $1,676,000, or $0.61 per share, from the above described
sale of the Florida apartment properties.
Assets and Liabilities
----------------------
Rental Property and Equipment, Net. $17,843,000 of the increase resulted
-----------------------------------
from the acquisition of two leasehold interests in the Waterside Complex on July
1, 2000.
Registrant also purchased an office building at the end of September 2000
for a price of $7,090,000. The Company has an 80% interest in the ownership of
the building. Registrant has submitted an application for permanent financing of
$5.75 million for the building. (See Investments).
Investments. The decrease in Investments of $5.3 million resulted from the
------------
sale of municipal bonds by Registrant. The $5.3 million proceeds plus $1.8
million from Registrant's operating activities totaling $7.1 million was used to
purchase an office building.
Investment In and Advances To Joint Ventures and Partnerships. The
--------------------------------------------------------------
increase of $3,436,000 resulted from earnings of joint ventures of $607,000 and
the payment of $2,829,000.
Income Taxes Receivable. Income Taxes Receivable consist of estimated tax
------------------------
payments in excess of the Provision For Income Taxes.
Notes Payable. The increase in Notes Payable reflects Registrant's
--------------
issuance of notes payable to two affiliated partnerships upon the acquisition of
two leasehold interests in the Waterside Complex.
Minority Interest. The increase of $6,785,000 represents the 46%
------------------
membership interest of the Trilon Plaza Company, an affiliated partnership, in
B&R Waterfront Properties L.L.C.
Liquidity and Capital Resources
-------------------------------
Registrant continues to fund its obligations out of current cash flow.
There is no assurance that Registrant will be able to meet all of its needs out
of cash flow or that additional funding will be available to Registrant if
needed.
<PAGE>
During the nine month period ended September 30, 2000, cash flow from
operating, investing and financing activities resulted in a decrease of
$3,719,000 in cash and cash equivalents. Registrant generated cash flow of
$11,902,000 from operating activities. Cash flow from operating activities and
cash and cash equivalents were used to fund Registrant's purchase of an office
building and the acquisition of two leasehold interests in the Waterside
Complex. Cash flow from investing activities was provided by the sale of
municipal bonds in the amount of $7,000,000, offset by the purchase of
additional municipal bonds totaling $1,706,000. Cash flow from operating
activities was also used for the repayment of mortgages payable in the amount of
$79,000 and the purchase of Treasury Stock in the amount of $163,000. Cash flow
from financing activities was provided by the issuance of notes payable in the
amount of $8,716,000.
Registrant estimates it will require substantial cash for capital
improvements, tenant fit up, leasing fees and allowances as the result of the
expiration in the year 2002 of the GSA lease in the Waterside Complex property.
Without a major tenant for the space that will be vacated, it may not be
possible to finance the project. Consequently, Registrant must be prepared to
finance these anticipated costs from its cash reserves.
Disclaimer
----------
Except for historical matters, the matters discussed in this Form 10-Q are
forward looking statements which reflect the Company's current views with
respect to future events and financial performance. These forward-looking
statements are subject to certain risks and uncertainties which could cause
actual results to differ materially from historical results or those
anticipated. Readers are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of their dates. The Company undertakes
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. The
following factors could cause actual results to differ materially from
historical results or those anticipated: 1) changes in operations, 2) market
conditions for the Company's properties, 3) the Company's ability to lease and
re-lease, 4) development risks, 5) competition, and 6) changes in the economic
climate.
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibit 27 - Financial Data Statement
(b) Reports on Form 8-K
<PAGE>
No reports on Form 8-K have been filed during the quarter ended September
30, 2000.
<PAGE>
S I G N A T U R E S
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.
BRESLER & REINER, INC.
(Registrant)
Date: November 9, 2000 /S/ Burton J. Reiner
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Burton J. Reiner, President
Date: November 9, 2000 /S/ William Oshinsky
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William Oshinsky, Treasurer
(Principal Financial Officer)
