UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March 31, 1998
CV REIT, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-8073 59-0950354
(Commission File No.) (I.R.S. Employer
Identification No.)
100 Century Blvd.
West Palm Beach, Florida 33417
(Address of principal executive offices)
(561) 640-3155
Registrant's telephone number, including area code
Not Applicable
(Former name or former address,
if changed since last report)
<PAGE>1
ITEM 5. OTHER EVENTS
CV Reit, Inc. (the "Company") previously reported its acquisition
of the Newtown Village Shopping Center in the Current Report on
Form 8-K filed with the Securities and Exchange Commission on
April 14, 1998. The Company is filing this Current Report on
Form 8-K/A to include financial statements of Newtown Village
Partnership and pro forma financial information of the Company.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
The following financial statement and pro forma financial
information are filed as part of this report:
(a) Financial statement of real estate operations acquired,
prepared pursuant to Rule 3.14 of Regulation S-X:
Newtown Village Partnership: Page No.
Report of Independent Certified
Public Accountant 4
Statement of Revenues and Certain
Expenses 5
Notes to Statement of Revenues and
Certain Expenses 6
(b) Pro Forma financial information required pursuant to Article
11 of Regulation S-X:
Unaudited Pro Forma Condensed Consolidated Balance Sheet -
March 31, 1998*
Unaudited Pro Forma Condensed Consolidated Statement of
Income - Quarter ended March 31, 1998
Unaudited Pro Forma Condensed Consolidated Statement of
Income - Year ended December 31, 1997
* No Pro Forma Condensed Consolidated Balance Sheet as of
March 31, 1998 is filed since the acquisition of the Acquired
Property is reflected in the actual balance sheet of CV Reit,
Inc. as of March 31, 1998.
<PAGE>2
(c) Exhibits: None
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act
of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
CV REIT, INC.
/s/ ELAINE HAUFF
___________________________
Elaine Hauff, Vice President
Date: June 5, 1998
<PAGE> 3
FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
NEWTOWN VILLAGE PARTNERSHIP
(A Limited Partnership)
December 31, 1997
<PAGE> 4
Report of Independent Certified Public Accountants
Partners
Newtown Village Partnership
We have audited the accompanying statement of revenues and
certain expenses of Newtown Village Partnership (a limited
partnership) for the year ended December 31, 1997. The financial
statement is the responsibility of the Partnership's management.
Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the statement of revenues and certain expenses is free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
statement of revenues and certain expenses. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
presentation of the statement of revenues and certain expenses.
We believe that our audit provides a reasonable basis for our
opinion.
The accompanying statement of revenues and certain expenses
was prepared for the purposes of complying with the rules and
regulations of the Securities and Exchange Commission for
inclusion in the Current Report on Form 8-K of CV REIT, Inc. and
excludes certain material amounts, as described in note B, that
would not be comparable to those resulting from the proposed
future operations of the property.
In our opinion, the statement of revenues and certain
expenses referred to above presents fairly, in all
material respects, the revenues and certain expenses of Newtown
Village Partnership for the year ended December 31, 1997 in
conformity with generally accepted accounting principles.
Philadelphia, Pennsylvania
April 16, 1998
<PAGE> 5
Newtown Village Partnership
(A Limited Partnership)
STATEMENT OF REVENUES AND CERTAIN EXPENSES
Year ended December 31, 1997
REVENUES
Base rents $ 2,807,284
Percentage rent 38,687
Tenant reimbursements 781,585
Other 10,067
-----------
3,637,623
-----------
CERTAIN EXPENSES
General operating 463,239
Real estate taxes 334,516
Repairs and maintenance 106,890
Utilities 39,141
-----------
943,786
-----------
REVENUES IN EXCESS OF CERTAIN EXPENSES $ 2,693,837
===========
The accompanying notes are an integral part of this statement.
<PAGE> 6
Newtown Village Partnership
(A Limited Partnership)
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
December 31, 1997
NOTE A - ORGANIZATION
Newtown Village Partnership (the Partnership), a
Pennsylvania limited partnership, owns and operates a shopping
center in Newtown, Pennsylvania. The shopping center consists of
various retail shops with approximately 177,000 square feet of
rentable space.
The Partnership's activities consist of the operation of the
shopping center and the leasing of retail stores to various
tenants. Tenant reimbursements represent property operating
expenses billed to tenants, including common area maintenance,
real estate taxes and other recoverable costs. Tenant
reimbursements are recognized in the period the expenses are
incurred. All leases are classified as operating leases and
expire at various times through 2008.
NOTE B - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
1. Basis of Presentation
Newtown Village Plaza Associates, L.P., a Pennsylvania
limited partnership, purchased the shopping center on
March 31, 1998. CV REIT, Inc. (the Registrant) has an indirect
ownership interest in the shopping center through Montgomery CV
Realty Trust (the Trust), a Delaware business trust of which the
Registrant is the 100% beneficial owner. The Trust holds the
general partner interest in, and approximately 82% of the limited
partner interest in, Montgomery CV Realty, L.P. (the Operating
Partnership). The Operating Partnership is the sole member of
Newtown Village LLC, a Delaware limited liability company which
is the sole general partner of Newtown Village Plaza Associates,
L.P. The statement of revenues and certain expenses has been
prepared for the purpose of complying with Regulation S-X, Rule
3-14 of the Securities and Exchange Commission (SEC), which
requires certain information with respect to real estate
operations be included with certain filings with the SEC. The
statement of revenues and certain expenses includes the
historical revenues and expenses of the shopping center,
exclusive of certain items of expenses which are not comparable
to the proposed future operations of the shopping center, such as
interest, depreciation, amortization, and certain legal and
accounting expenses. Upon the purchase of the shopping center,
Newtown Village Plaza Associates, L.P. began operating the
shopping center under its policies and procedures.
<PAGE> 7
2. Revenue Recognition
Lease revenue is recognized over the lease term on a
straight-line basis as it is earned. Revenue from reimbursements
by tenants of costs incurred on their behalf is recognized when
the expenses are incurred. These expenses include property taxes
and common area maintenance costs.
3. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the period.
Actual results could differ from those estimates.
<PAGE> 8
Newtown Village Partnership
(A Limited Partnership)
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
December 31, 1997
NOTE C - LEASING ACTIVITIES
The Partnership leases space to tenants under operating
leases. Leases generally provide for minimum rents, as
well as reimbursement of the lessor for certain operating
expenses and real estate taxes. The minimum future rentals on
the existing long-term noncancellable operating leases, excluding
tenant reimbursements of operating expenses, as of December 31,
1997 are as follows:
1998 $ 2,911,209
1999 2,607,632
2000 2,110,427
2001 1,949,102
2002 1,645,257
Thereafter 6,434,618
------------
$ 17,658,245
============
During 1997, one tenant accounted for approximately 19% of
total base rental revenue.
NOTE D - RELATED PARTY TRANSACTIONS
The Partnership paid management fees of approximately
$87,000 to REM Management Company, a related party, based on 3%
of cash receipts as defined in the management agreement. These
management fees are included within general operating expenses in
the statement of revenues and certain expenses.
<PAGE> 9
CV REIT, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
On March 31, 1998, Newtown Village Plaza Associates, L.P.
(indirectly 81.7% owned by CV Reit, Inc.) consummated the
acquisition of the Newtown Village Shopping Center (the "Acquired
Property"), an approximately 177,000 square foot retail shopping
center, from Newtown Village Partnership (the "Seller"). The
purchase price amounted to $27,739,000, consisting of $7,500,000
paid in cash and $20,239,000 of liabilities assumed, principally
existing mortgage indebtedness.
The acquisition was accounted for as a purchase, with assets
acquired and liabilities assumed recorded at fair value,
effective March 31, 1998. Operating results of the Acquired
Property will be included in the Company's consolidated financial
statements, effective April 1, 1998.
The following Unaudited Pro Forma Condensed Consolidated
Statements of Income for the quarter ended March 31, 1998, and
the year ended December 31, 1997 (the "Pro Forma Financial
Information") are derived from, and should be read in conjunction
with, the Company's historical Statements of Income for the three
months ended March 31, 1998 and the year ended December 31, 1997,
as presented in the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1998 and Annual Report on Form 10-K
for the year ended December 31, 1997. It should also be read in
conjunction with the Seller's historical Statement of Revenues
and Certain Expenses for the year ended December 31, 1997,
included elsewhere herein.
The Pro Forma Financial Information for the three months ended
March 31, 1998 and year ended December 31, 1997 gives effect to
the acquisition as if it had occurred as of January 1, 1998 and
January 1, 1997, respectively. The pro forma adjustments are
based on certain estimates and currently available information.
Such adjustments could change as additional information becomes
available, as estimates are refined or as additional events
occur.
The Pro Forma Financial Information does not purport to be
indicative of the results of operations which would have actually
been reported had the acquisition been consummated on the dates
indicated, or which may be reported in the future.
<PAGE> 10
CV REIT, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF INCOME
(dollars in thousands, except per share data)
THREE MONTHS ENDED MARCH 31, 1998
Historical
-------------------
CV Reit, Acquired Pro-Forma Pro-Forma
Inc. Property Adjustments Consolidated
--------- -------- ----------- ------------
REVENUES:
Interest, substantially
from mortgage notes $ 2,454 $ - ($ 95)(1) $ 2,359
Rent 2,794 909 - 3,703
------- ------ ------ -------
5,248 909 ( 95) 6,062
------- ------ ------ -------
EXPENSES:
Interest 1,435 - 373 (2) 1,808
Operating 854 236 - 1,090
General and administrative 349 - - 349
Depreciation and
amortization 444 - 177 (3) 621
------- ------ ------ -------
3,082 236 550 3,868
------- ------ ------ -------
2,166 673 ( 645) 2,194
Equity in income of uncon-
solidated affiliates 131 - - 131
Minority interests in income
of Operating Partnership (420) - (23)(4) (443)
------- ------ ------ -------
Net income $ 1,877 $ 673 ($ 668) $ 1,882
======= ====== ====== =======
Net income per common
share, basic and
diluted $ .24 $ .24
======= =======
Average common shares
outstanding:
Basic 7,966,621 7,966,621
========= =========
Diluted 7,973,533 7,973,533
========= =========
<PAGE> 11
CV REIT, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF INCOME
(dollars in thousands, except per share data)
YEAR ENDED DECEMBER 31, 1997
Historical
-------------------
CV Reit, Acquired Pro-Forma Pro-Forma
Inc. Property Adjustments Consolidated
--------- -------- ----------- ------------
REVENUES:
Interest, substantially
from mortgage notes $10,612 $ 3 ($ 380)(1) $10,235
Rent 2,703 3,635 - 6,338
------- ------ ------ -------
13,315 3,638 (380) 16,573
------- ------ ------ -------
EXPENSES:
Interest 3,306 - 1,492 (2) 4,798
Operating 870 944 - 1,814
General and administrative 654 - - 654
Depreciation and
amortization 409 - 708 (3) 1,117
------- ------ ------ -------
5,239 944 2,200 8,383
------- ------ ------ -------
8,076 2,694 (2,580) 8,190
Equity in income of uncon-
solidated affiliates 439 - - 439
Minority interests in income
of Operating Partnership - - (90)(4) (90)
------- ------ ------ -------
Net income $ 8,515 $2,694 ($2,670) $ 8,539
======= ====== ====== =======
Net income per common
share, basic and
diluted $ 1.07 $ 1.07
======= =======
Average common shares
outstanding, basic
and diluted 7,966,621 7,966,621
========= =========
<PAGE> 12
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
PRO FORMA ADJUSTMENTS
The following pro forma adjustments for the quarter ended March
31, 1998 and the year ended December 31, 1997 assume that the
Acquired Property was purchased on January 1, 1997:
(1) Reflects reduced interest income on cash paid for Acquired
Property.
(2) Represents additional interest expense, at 7.35% per annum,
on mortgage indebtedness assumed.
(3) Represents additional depreciation expense resulting from
allocating 10% of the fair value of the Acquired Property to
land and depreciating the balance (90%) on a straight-line
basis over 35 years.
(4) Reflects earnings attributable to minority interests.
