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Previous: VICON INDUSTRIES INC /NY/, SC 13D, 1996-02-20 |
Next: BABSON D L TAX FREE INCOME FUND INC, NSAR-A, 1996-02-20 |
<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(X) ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1995
---------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From to
---------- ----------
Commission File Number 1-7859
- --------------------------------------------------------------------------
IRT PROPERTY COMPANY
- --------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-1366611
- --------------------------------------- ---------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
200 Galleria Parkway, Suite 1400
Atlanta, Georgia 30339
- ---------------------------------------- --------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 955-4406
---------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- ------------------------
Shares of Common Stock New York Stock Exchange
$1 Par Value
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. X
----
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
--- ---
Based upon the assumption that directors and executive officers of the
registrant are not affiliates of the registrant, the aggregate market value of
the voting stock of the registrant held by nonaffiliates of the registrant at
February 9, 1996 was $237,658,363. Presuming that such directors and executive
officers are affiliates of the registrant, the aggregate market value of the
voting stock of the registrant held by nonaffiliates of the registrant at
February 9, 1996 was $234,063,374.
25,692,796 shares of Common Stock, $1 Par Value, outstanding at February 9,
1996.
DOCUMENTS INCORPORATED BY REFERENCE
The information called for by Part III (Items 10, 11, 12 and 13) is
incorporated by reference to the registrant's definitive proxy statement to be
filed pursuant to Regulation 14A.
<PAGE> 2
Amendment No. 1
The undersigned registrant hereby amends Items 8 and 14 of its Form
10-K for the fiscal year ended December 31, 1995.
<PAGE> 3
Item 8. Financial Statements and Supplementary Data.
IRT PROPERTY COMPANY
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
------
<S> <C>
Report of Independent Public Accountants 3
Consolidated Balance Sheets -
December 31, 1995 and 1994 4
Consolidated Statements of Earnings -
For the Years Ended December 31, 1995,
1994 and 1993 5
Consolidated Statements of Changes
in Shareholders' Equity - For the Years Ended
December 31, 1995, 1994 and 1993 6
Consolidated Statements of Cash Flows -
For the Years Ended December 31, 1995,
1994 and 1993 7
Notes to Consolidated Financial Statements -
December 31, 1995, 1994 and 1993 9
Schedules:
Schedule
Number
- --------
III Real Estate and Accumulated Depreciation 27
IV Mortgage Loans on Real Estate 39
</TABLE>
2
<PAGE> 4
Report of Independent Public Accountants
To The Shareholders of
IRT Property Company:
We have audited the accompanying consolidated balance sheets of IRT
PROPERTY COMPANY (a Georgia corporation) and subsidiaries as of December 31,
1995 and 1994, and the related consolidated statements of earnings, changes in
shareholders' equity, and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements and the schedules referred
to below are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IRT Property
Company and subsidiaries as of December 31, 1995 and 1994, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedules listed in the index
to consolidated financial statements are presented for purposes of complying
with the Securities and Exchange Commission's rules and are not part of the
basic financial statements. These schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, fairly state in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
January 23, 1996
3
<PAGE> 5
IRT PROPERTY COMPANY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
------------- ------------
<S> <C> <C>
ASSETS
Real estate investments:
Rental properties $452,508,601 $442,642,705
Accumulated depreciation (51,600,890) (41,677,722)
------------ ------------
400,907,711 400,964,983
Net investment in direct financing leases 9,097,717 9,295,880
Mortgage loans, net 8,499,210 8,292,143
------------ ------------
Net real estate investments 418,504,638 418,553,006
Cash and cash equivalents 16,400 1,841,388
Accrued interest receivable 544,073 544,712
Prepaid expenses and other assets 8,332,907 7,640,249
------------ ------------
$427,398,018 $428,579,355
============ ============
LIABILITIES & SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable plus net interest premium of
$78,657 in 1995 and $92,683 in 1994 $ 99,188,181 $105,107,084
7.3% convertible subordinated debentures due August
15, 2003 84,905,000 86,250,000
Indebtedness to banks 36,000,000 26,000,000
Accrued interest on debentures 2,341,488 2,378,583
Accrued expenses and other
liabilities 5,265,202 4,726,224
Deferred income taxes 1,068,000 1,079,000
------------ ------------
Total liabilities 228,767,871 225,540,891
------------ ------------
Commitments and Contingencies (Notes 15 and 16)
Shareholders' Equity:
Common stock, $1 par value, 75,000,000 shares
authorized; 25,689,002 shares issued and
outstanding in 1995 and 25,420,747 25,689,002 25,420,747
shares in 1994 200,318,168 197,937,465
Additional paid-in capital (27,377,023) (20,319,748)
------------ ------------
Cumulative distributions in excess of net earnings 198,630,147 203,038,464
------------ ------------
Total shareholders' equity $427,398,018 $428,579,355
============ ============
</TABLE>
The accompanying notes are an integral part of these
consolidated balance sheets.
4
<PAGE> 6
IRT PROPERTY COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Revenues:
Income from rental properties $58,008,386 $44,681,220 $41,607,391
Interest, including $2,388,308 in 1994 and
$846,938 in 1993 on cash equivalents 899,454 3,267,486 2,257,405
Interest on direct financing leases 1,288,407 1,253,438 1,198,115
----------- ----------- -----------
60,196,247 49,202,144 45,062,911
----------- ----------- -----------
Expenses:
Operating expenses of rental
properties 12,733,705 10,318,596 10,022,610
Interest on mortgages 9,150,400 8,191,240 10,269,423
Interest on debentures 6,210,062 6,202,025 2,438,114
Interest on indebtedness to banks 2,211,980 159,603 384,687
Depreciation 10,427,268 8,214,192 7,668,797
Amortization of debt costs 445,907 446,454 212,421
General & administrative 3,466,899 2,881,111 2,294,594
----------- ----------- -----------
44,646,221 36,413,221 33,290,646
----------- ----------- -----------
Earnings before gain (loss) on
real estate investments and
extraordinary item 15,550,026 12,788,923 11,772,265
----------- ----------- -----------
Gain (loss) on real estate investments:
Gain on sales of properties 173,025 300,036 4,556,511
Valuation loss - (4,125,454) -
----------- ----------- -----------
173,025 (3,825,418) 4,556,511
----------- ----------- -----------
Earnings before extraordinary
item 15,723,051 8,963,505 16,328,776
Extraordinary item -
Gain (loss) on extinguishment of debt (137,260) 3,748,095 (1,440,478)
----------- ----------- -----------
Net earnings $15,585,791 $12,711,600 $14,888,298
=========== =========== ===========
Per Share:
Earnings before extraordinary item $ 0.61 $ 0.35 $ 0.72
Extraordinary item - 0.15 (0.06)
----------- ----------- -----------
Net earnings $ 0.61 $ 0.50 $ 0.66
=========== =========== ===========
Weighted average number of shares
outstanding 25,590,129 25,349,303 22,457,131
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
5
<PAGE> 7
IRT PROPERTY COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Cumulative
Additional Distributions Total
Common Paid-In in Excess of Shareholders'
Stock Capital Net Earnings Equity
------ ---------- ------------- -------------
<S> <C> <C> <C> <C>
Balance at December 31, 1992 $21,016,570 $155,618,551 $ (8,061,119) $168,574,002
Net earnings - - 14,888,298 14,888,298
Cash dividends declared -
$.84 per share - - (18,573,786) (18,573,786)
Issuance of shares under
Dividend Reinvestment
Plan, net 109,807 1,138,821 - 1,248,628
Exercise of Incentive Stock
Options 5,689 30,891 - 36,580
Issuance of shares for the
acquisition of properties 28,978 350,997 - 379,975
Issuance of common stock,
net 4,127,580 39,653,890 - 43,781,470
----------- ------------ ------------ ------------
Balance at December 31, 1993 25,288,624 196,793,150 (11,746,607) 210,335,167
Net earnings - - 12,711,600 12,711,600
Cash dividends declared -
$.84 per share - - (21,284,741) (21,284,741)
Issuance of shares under
Dividend Reinvestment
Plan, net 99,477 838,273 - 937,750
Exercise of Incentive Stock
Options 1,010 2,131 - 3,141
Issuance of shares for the
acquisition of properties 31,636 303,911 - 335,547
----------- ------------ ------------ ------------
Balance at December 31, 1994 25,420,747 197,937,465 (20,319,748) 203,038,464
Net earnings - - 15,585,791 15,585,791
Cash dividends declared -
$.885 per share - - (22,643,066) (22,643,066)
Issuance of shares under
Dividend Reinvestment
Plan, net 121,831 985,430 - 1,107,261
Conversion of debentures, net 119,554 1,175,718 - 1,295,272
Exercise of Incentive Stock
Options 7,000 46,375 - 53,375
Issuance of shares for the
acquisition of properties 19,870 173,180 - 193,050
----------- ------------ ------------ ------------
Balance at December 31, 1995 $25,689,002 $200,318,168 $(27,377,023) $198,630,147
=========== ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
6
<PAGE> 8
IRT PROPERTY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 15,585,791 $12,711,600 $14,888,298
Adjustments to reconcile net earnings to net cash flows
from operating activities:
Depreciation 10,427,268 8,214,192 7,668,797
Loss (gain) on real estate investments (173,025) 3,825,418 (4,556,511)
Extraordinary loss (gain) 137,260 (3,748,095) 1,440,478
Amortization of debt costs 445,907 446,454 212,421
Amortization of capitalized leasing income 198,163 166,019 172,418
------------ ------------- ------------
26,621,364 21,615,588 19,825,901
Changes in accrued assets and
liabilities:
Increase (decrease) in accrued
interest on debentures -
7.3% interest payable (37,095) 262,343 2,084,302
2.0% interest payable - - (9,550)
Accrued premium on 2.0%
debentures - - (2,291,542)
Increase in interest receivable,
prepaid expenses and other assets (1,187,639) (592,782) (785,054)
Increase in accrued expenses and
other liabilities 550,357 1,226,582 292,085
------------ ------------- -----------
Net cash flows from operating activities 25,946,987 22,511,731 19,116,142
------------ ------------- -----------
Cash flows from (used in) investing activities:
Proceeds from sales of properties, net 1,310,531 562,070 7,779,046
Additions to real estate investments, net -
Acquisitions, expansions and renovations (7,672,184) (98,461,982) (27,697,142)
Improvements (1,200,302) (1,253,360) (1,208,045)
Collections of mortgage loans, net 52,933 100,816 4,135,583
Additions to mortgage loans (260,000) - -
------------ ------------- -----------
Net cash flows used in investing
activities (7,769,022) (99,052,456) (16,990,558)
------------ ------------- -----------
Cash flows from (used in) financing activities:
Cash dividends paid, net of dividends
reinvested (21,535,805) (20,346,991) (17,325,158)
Issuance of common stock, net - - 43,781,470
Cash in lieu of fractional shares on - -
conversion of debentures (15)
Exercise of Incentive Stock Options, net 53,375 3,141 36,580
Issuance of 7.3% convertible subordinated
debentures, net - - 82,548,826
Redemption of 2.0% convertible subordinated
debentures - - (5,730,000)
Principal amortization of mortgage notes
payable, net (1,546,572) (1,273,737) (1,484,658)
Repayment of mortgage notes payable, net (6,836,676) (8,378,095) (22,815,915)
Increase (decrease) in bank indebtedness, net 10,000,000 26,000,000 (1,200,100)
Extraordinary item -
Gain (loss) on extinguishment of debt (137,260) 3,748,095 (1,440,478)
------------ ------------- -----------
Net cash flows from (used in) financing
activities (20,002,953) (247,587) 76,370,567
------------ ------------- -----------
Net increase (decrease) in cash and cash
equivalents (1,824,988) (76,788,312) 78,496,151
Cash and cash equivalents at beginning of year 1,841,388 78,629,700 133,549
------------ ------------- -----------
Cash and cash equivalents at end of year $ 16,400 $ 1,841,388 $78,629,700
============ ============= ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
7
<PAGE> 9
IRT PROPERTY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Supplemental disclosures of cash flow information:
Cash paid during the year for interest related to:
Mortgage notes payable $ 9,207,974 $ 8,082,615 $10,428,907
Convertible subordinated debentures -
7.3% interest, net of $94,225
capitalized in 1994 6,247,157 6,033,906 -
2.0% interest - - 57,404
Premiums on 2.0% debentures - - 2,578,500
Indebtedness to banks, net of $93,591
capitalized in 1995 2,449,034 153,941 457,816
----------- ------------ -----------
Total cash paid during the year for
interest $17,904,165 $ 14,270,462 $13,522,627
=========== ============ ===========
Supplemental schedule of noncash
investing and financing activities:
Acquisitions, expansions and renovations:
Cost of acquisitions, expansions and
renovations $10,329,579 $114,677,940 $35,877,117
Additions to mortgage notes payable -
Assumed (2,464,345) (15,880,411) (7,800,000)
Acquired - - -
Issuance of common stock (193,050) (335,547) (379,975)
----------- ------------ -----------
Cash paid for acquisitions, expansions and
renovations of real estate investments
$ 7,672,184 $ 98,461,982 $27,697,142
=========== ============ ===========
Dispositions:
Fair values of assets sold $ 1,310,531 $ 562,070 $ 7,779,046
Repayment of mortgage notes payable - - -
----------- ------------ -----------
Proceeds from sales of properties, net $ 1,310,531 $ 562,070 $ 7,779,046
=========== ============ ===========
Conversion of debentures:
Debentures converted $ 1,345,000 $ - $ -
Associated unamortized debenture costs (49,713) - -
Equity issued on conversion (1,295,272) - -
----------- ------------ -----------
Cash paid in lieu of fractional shares $ 15 $ - $ -
=========== ============ ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
8
<PAGE> 10
IRT PROPERTY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 and 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Consolidation-
The accompanying consolidated financial statements include the
accounts of IRT Property Company and its wholly-owned subsidiaries,
IRT Management Company and VW Mall, Inc., (collectively, the
"Company"). Intercompany transactions and balances have been
eliminated in consolidation.
Business -
IRT Property Company, founded in 1969, is a self-administered
and self-managed equity real estate investment trust which invests
primarily in neighborhood and community shopping centers which are
located in the Southeastern United States and are anchored by
necessity-oriented retailers such as supermarkets, drug stores and/or
discount variety stores. No one retailer accounts for more than 8% of
the Company's gross revenues.
Income Taxes -
The Company has in past years elected to qualify, and intends
to continue such election, to be taxed as a "Real Estate Investment
Trust" ("REIT") under Sections 856-860 of the Internal Revenue Code,
as amended. In general terms, under such Code provisions a trust or
corporation which, in any taxable year, meets certain requirements and
distributes to its shareholders at least 95% of its taxable income
will not be subject to Federal income tax to the extent of the income
which it distributes.
The Company computes taxable income on a basis different from
that used for financial reporting purposes due to differences in the
estimated useful lives used to compute depreciation, timing
differences in the recognition of loan commitment fees, and certain
interest discounts which are not recognized for tax purposes. The
Company also reports certain gains on sales of properties on the
installment basis for tax purposes.
9
<PAGE> 11
Income Recognition-
The Company follows the policy of suspending the accrual of
income on any investments where interest or rental payments are
delinquent 60 days or more. Percentage rental income is recorded upon
collection.
Gains from the sale of real estate are deferred until such
time as minimum down payment and loan amortization requirements are
met in conformity with the provisions of Statement of Financial
Accounting Standards No. 66. Interest discounts are imputed on
financed sales when the contractual interest rates are less than
prevailing market rates at the time of sale.
Depreciation-
The Company provides depreciation on buildings and other
improvements on the straight-line basis over their estimated useful
lives. Such lives are from 14 to 40 years for buildings and 6 years
for improvements. Maintenance and repairs are charged to expense as
incurred, while significant improvements are capitalized. The profit
or loss on assets retired or otherwise disposed of is credited or
charged to operations and the cost and related accumulated
depreciation are removed from the asset and accumulated depreciation
accounts.
Valuation Loss-
The need for any allowance for possible losses or reductions
in carrying values applicable to the Company's investments is
evaluated by management by means of quarterly reviews of the portfolio
on an individual investment basis considering such factors as current
and projected net operating income and other market factors. Rental
properties are carried at the lower of depreciated cost or net
realizable value.
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 reporting period. Actual results
could differ from those estimates.
10
<PAGE> 12
Cash Equivalents-
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.
Earnings Per Share-
Earnings per share is computed by dividing net earnings by the
weighted average number of shares outstanding. The effect on earnings
per share assuming conversion of the 2% and the 7.3% convertible
subordinated debentures would be anti-dilutive. Exercise of the
outstanding stock options would not have a material dilutive effect on
earnings per share.
Reclassification of Prior Year Amounts-
Certain items in the consolidated financial statements
have been reclassified to conform with the 1995 presentation.
Recent Accounting Pronouncements-
In March 1995, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No. 121
("FAS 121") "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of," which becomes effective for
fiscal years beginning after December 15, 1995. FAS 121 establishes
standards for determining when impairment losses on long-lived assets
have occurred and how impairment losses should be measured. The
Company intends to adopt FAS 121 in 1996. The financial statement
impact of adopting FAS 121 is not expected to be material.
In October 1995, the FASB issued Statement of Financial
Accounting Standards No. 123 ("FAS 123") "Accounting for Stock-Based
Compensation," which becomes effective for fiscal years beginning
after December 15, 1995. FAS 123 establishes new financial accounting
and reporting standards for stock-based compensation plans. Entities
will be allowed to measure compensation cost for stock-based
compensation under FAS 123 or APB Opinion No. 25, "Accounting for
Stock Issued to Employees." Entities electing to remain with the
accounting in APB Opinion No. 25 will be required to make pro forma
disclosures of net income and earnings per share as if the provisions
of FAS 123 had been applied. The Company is in the process of
evaluating FAS 123. The potential impact on the Company of adopting
the new standard has not been quantified at this time. The Company
must adopt FAS 123 no later than January 1, 1996.
11
<PAGE> 13
2. PUBLIC OFFERINGS:
On August 31, 1993, the Company completed concurrent public
offerings of 4,127,580 shares of its common stock at $11.25 per share
and $86,250,000 of 7.3% convertible subordinated debentures due August
15, 2003. Net proceeds from these offerings totaled approximately
$126,330,000. For more information regarding the convertible
debentures, see Note 7.
3. RENTAL PROPERTIES:
Rental properties are comprised of the following:
<TABLE>
<CAPTION>
December 31,
---------------------------
1995 1994
---- ----
<S> <C> <C>
Land covered by purchase-
leaseback agreements $ 928,292 $ 928,292
Land related to buildings
and improvements 92,453,973 91,181,819
Buildings & improvements 359,126,336 350,532,594
------------ ------------
$452,508,601 $442,642,705
============ ============
</TABLE>
Upon expiration of the leases for land covered by
purchase-leaseback agreements, all improvements on the land will
become the property of the Company.
At December 31, 1995, land covered by two purchase-leaseback
agreements having an aggregate cost of $677,792 is subordinate to
first mortgage liens of $721,347 which are on both land and
improvements but are not obligations of the Company. In addition,
the lessees of these two properties have the option, subject to
certain conditions, to repurchase the land. Such option prices are
for amounts greater than the Company's carrying value of the related
land.
12
<PAGE> 14
Minimum base rentals on noncancellable operating leases for
the Company's shopping center, industrial and land purchase-leaseback
investments for the next five years and thereafter are as follows:
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1996 $ 46,514,923
1997 42,227,154
1998 37,793,317
1999 33,678,716
2000 37,905,657
Thereafter 258,720,430
------------
$456,840,197
============
</TABLE>
4. NET INVESTMENT IN DIRECT FINANCING LEASES:
Four retail facilities are leased to Wal-Mart Stores, Inc. at
a total annual rental of $827,925 plus percentage rentals of 1% of
gross sales in excess of the tenant's actual sales for its fiscal year
ended January 31, 1990. Rental income from these leases totaled
$1,175,284 (including $347,359 of percentage rentals) in 1995,
$1,120,161 (including $292,236 of percentage rentals) in 1994 and
$1,046,737 (including $218,812 of percentage rentals) in 1993. Of
this rental income, $198,163, $166,019 and $172,418 were recorded as
amortization of capitalized leasing income in 1995, 1994 and 1993,
respectively.
The Company acquired ten branch bank buildings in a 1984
merger. These facilities are leased to The Old Phoenix National Bank
at a total annual rental of $313,049.
The Company is to receive minimum lease payments of $1,140,974
per year during 1996 through 2000 and a total of $12,183,091
thereafter through the remaining lease terms. The estimated residual
values of the leased properties included in net investment in direct
financing leases totaled $644,872 as of December 31, 1995 and 1994.
13
<PAGE> 15
5. MORTGAGE LOANS:
The Company's investments in mortgage loans, all of which are
secured by real estate investments, are summarized by type of loan at
December 31, 1995 and 1994, as follows:
<TABLE>
<CAPTION>
1995 1994
----------------------- --------------------------
Number Amount Number Amount
of Loans Outstanding of Loans Outstanding
-------- ----------- -------- -----------
<S> <C> <C> <C> <C>
First mortgage 2 $ 3,358,578 2 $3,390,491
Mortgage
participation 1 38,415 1 40,504
Wrap-around
mortgage 1 5,390,104 1 5,194,228
- ----------- - ----------
4 8,787,097 4 8,625,223
Less-Interest
discounts and
negative
goodwill - (287,887) - (333,080)
- ----------- - ----------
Mortgage
loans, net 4 $ 8,499,210 4 $8,292,143
= =========== = ==========
</TABLE>
During April, 1994, the borrower under the Spanish Quarter
Apartments wrap-around mortgage loan filed Chapter 11 bankruptcy. In
December, 1994, the Bankruptcy Court approved the plan of
reorganization which amended the loan effective December 1, 1994 to
extend the term for 3 years to September 1, 2001 and to reduce the
cash interest rate from 10% to 9.5% prospectively. Additional
interest at an annual rate of 1% continues to accrue through the
remainder of the term. In addition, during 1995, the Company funded
additional principal of $260,000 under this mortgage for capital
improvements. The Company will realize total proceeds in excess of
the carrying value of the indebtedness at the time of the
restructuring over the remaining term of the mortgage. Therefore, no
loss has been recorded related to the restructuring in accordance with
SFAS No. 15.
14
<PAGE> 16
Annual principal payments applicable to mortgage loan
investments in the next five years and thereafter are as follows:
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1996 $ 84,375
1997 97,355
1998 3,241,594
1999 90,468
2000 103,835
Thereafter 4,881,583
----------
$8,499,210
==========
</TABLE>
Based on current rates at which similar loans would be made,
the estimated fair value of mortgage loans was approximately
$9,079,000 and $8,576,000 at December 31, 1995 and 1994, respectively.
6. MORTGAGE NOTES PAYABLE:
Mortgage notes payable are collateralized by various real
estate investments having a net carrying value of approximately
$132,695,208 as of December 31, 1995. These notes have stated
interest rates ranging from 7.6% to 13.875% and are due in monthly
installments with maturity dates ranging from 1996 to 2013.
During 1995, the Company (a) repaid at maturity two variable
rate mortgages totaling $3,524,000, (b) repaid at maturity an $860,000
mortgage bearing interest at 13.875% (discounted to 9.5% for financial
reporting purposes), (c) refinanced a $9,000,000 mortgage, reducing
the face of the mortgage to $7,500,000 and the interest rate from
9.75% to 8.375% and (d) refinanced a $12,330,000 mortgage, reducing
the face of the mortgage to $11,377,000 and the interest rate from
9.375% to 8.194%. In addition, a 9.5% fully amortizing mortgage note
payable was extinguished at maturity in August 1995.
The mortgage note payable secured by one of the two shopping
centers acquired during 1995 totals $2,383,000 at a rate of 11.00%
with a March 1998 maturity.
During 1994, the Company purchased for $4,500,000 the mortgage
note payable secured by Valley West Mall which had a balance
outstanding of approximately $8,248,000. During 1993, the Company
paid in full eleven mortgage notes payable aggregating approximately
$22,816,000. See also Note 10 where some of these prepayments
resulted in extraordinary gains and losses.
15
<PAGE> 17
Principal amortization and balloon payments applicable to
mortgage notes payable in the next five years and thereafter are as
follows:
<TABLE>
<CAPTION>
BALLOON
YEAR AMORTIZATION PAYMENTS TOTAL
---- ------------ -------- -----
<S> <C> <C> <C>
1996 $ 1,305,172 $13,882,380 $15,187,552
1997 1,079,895 34,653,165 35,733,060
1998 881,160 2,385,917 3,267,077
1999 958,888 - 958,888
2000 695,988 12,079,779 12,775,767
Thereafter 10,656,758 20,609,079 31,265,837
----------- ----------- -----------
$15,577,861 $83,610,320 $99,188,181
=========== =========== ===========
</TABLE>
Based on the borrowing rates currently available to the
Company for mortgages with similar terms and maturities, the estimated
fair value of mortgage notes payable was approximately $99,417,000 and
$102,098,000 at December 31, 1995 and 1994, respectively.
7. CONVERTIBLE SUBORDINATED DEBENTURES:
Pursuant to the terms of the debentures, the Company redeemed
$5,530,000 of its 2% convertible subordinated debentures on August 1,
1991 at a premium to par of 27% and the remaining $5,730,000 of this
issue on August 1, 1993 at a premium to par of 45%. The premium paid
by the Company totaled $2,578,500 and $1,493,100 on August 1, 1993 and
1991, respectively.
Effective August 31, 1993, the Company issued $86,250,000 of
7.3% convertible subordinated debentures due August 15, 2003,
$84,905,000 of which is outstanding as of December 31, 1995. Interest
on the debentures is payable semi-annually on February 15 and August
15. The debentures are convertible at any time prior to maturity into
common stock of the Company at $11.25 per share, subject to adjustment
in certain events. The Company has the option to redeem the
debentures at par at any time after August 15, 1996.
In March 1995, $1,345,000 of the Company's 7.3% convertible
subordinated debentures were converted into 119,554 shares of common
stock at $11.25 per share. Based upon the $11.25 conversion price,
7,547,111 authorized but unissued common shares have been reserved for
possible issuance if the $84,905,000 debentures outstanding at
December 31, 1995 are converted.
Costs associated with the issuance of the debentures were
approximately $3,701,000 and are being amortized over the life of the
debentures.
16
<PAGE> 18
Based on the closing market price at year end, the estimated
fair value of the 7.3% debentures was approximately $80,660,000 and
$79,350,000 at December 31, 1995 and 1994, respectively.
8. INDEBTEDNESS TO BANKS:
On November 1, 1990, the Company obtained from a financial
institution a $25,000,000 revolving term loan maturing November 1,
1995. On July 31, 1992, the Company amended and restated this
revolving term loan to increase the lender's commitment to a maximum
of $50,000,000 ($38,520,000 at December 31, 1994, based on existing
collateral) and extend the maturity to August 1, 1997. The interest
rate was, at the option of the Company, either a) prime, fluctuating
daily, or b) 1.25% over the adjusted London Interbank Offered Rates
("LIBOR"), set for periods of one, two, three, or six months at the
option of the Company. Prepayments could be made with no fee at any
time on prime rate advances and at the maturity of LIBOR advances.
The Company paid a fee of 0.25% per annum of the aggregate unused
portion of the commitment.
On December 15, 1995, the Company terminated the $50,000,000
secured revolving term loan, and obtained a $100,000,000 unsecured
revolving term loan maturing January 4, 1999. Not later than June
30th of each year commencing June 30, 1996, the Company may request to
extend the maturity date for an additional twelve-month period beyond
the existing maturity date.
The interest rate is, at the option of the Company, either a)
prime fluctuating daily, or b) LIBOR plus the "Applicable Margin"
ranging from 1.3% to 1.5% based upon the rating of the senior unsecured
long-term debt obligations of the Company. LIBOR borrowings may be
set for periods of one, two, three, six or twelve months at the option
of the Company. The Applicable Margin based on the Company's
current rating is 1.5%.
Prepayments may be made on prime rate and LIBOR advances
provided that the Company will reimburse the lenders for any loss or
out-of-pocket expense incurred in connection with any LIBOR
prepayment. The Company pays a fee of 0.25% per annum of the
aggregate unused portion of the commitment.
The loan agreement contains restrictive covenants pertaining
to net worth, the ratio of debt to equity, interest coverage, debt
service coverage, net operating losses, and the ratio of total
liabilities to total assets. The Company has agreed not to encumber
certain properties ("Negative Pledge Properties"). The commitment may
fluctuate up to a maximum of $100,000,000 based on 65% of the value of
the Negative Pledge Properties and as of December 31, 1995, the
Company may borrow the maximum commitment amount.
17
<PAGE> 19
The following data is presented with respect to the line of
credit agreements in 1995 and 1994:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Unused at year-end $64,000,000 $12,520,000
Average borrowing for
the period 33,506,945 788,890
Maximum amount outstanding
during the period 36,000,000 26,000,000
Average interest rate for
the period 7.63% 8.16%
Interest rate at
year-end 7.4375% 8.1250%
</TABLE>
9. DEFERRED INCOME TAXES, GAIN ON SALES AND VALUATION LOSS:
During 1984, the Company recognized a gain on sale for
financial reporting purposes, net of a deferred tax provision of
$1,122,000, which reflected the timing differences arising from the
Company's election to recognize the gain on this property sale on the
installment basis for tax purposes. Installment gains are recognized
for tax purposes based on the principal payments received in each year
under the purchase-money financing taken back on the sales.
The purchase-money financing on this sale commenced principal
amortization in 1987 based on a 25-year amortization period, with a
balloon payment in 2001. The Company had a deferred tax liability
related to this sale of $1,068,000 and $1,079,000 at December 31, 1995
and 1994, respectively. Should the Company elect to distribute the
taxable installment gain recognized in future years to its
shareholders as capital gain distributions, the reversal of this
previously recorded tax liability would be reflected in income for
financial reporting purposes in the periods in which the distributions
are elected.
During 1995, the Company sold three shopping center
investments and two parcels of land for gains totaling approximately
$160,000. In addition, the company recorded gains of approximately
$2,000 on the condemnation of 2,814 square feet of land at two of the
Company's shopping center investments.
18
<PAGE> 20
During 1994, the Company sold two parcels of land for gains
totaling approximately $257,000. During 1993, the Company sold an
apartment investment, two parcels of land and a third parcel of land
with the buildings thereon for a total gain of approximately
$4,557,000.
In 1994, the Company recorded approximately $4,125,000 of
reductions in the carrying values of certain investments, primarily
Valley West Mall due to permanent impairments in the values of the
investments. In addition, in December 1992 the Company recorded a
$3,565,000 reduction in the carrying value of Valley West Mall. These
adjustments to carrying value were a result of the Company's quarterly
evaluations of its individual investments based on current and
forecasted net operating income of the investment, competition
resulting from new properties in the market place and other changes in
the local economy. For tax purposes, the Company will not be able to
claim these deductions until the actual disposition of the properties.
10. EXTRAORDINARY ITEM:
During 1995, the Company recognized an extraordinary loss of
approximately $137,000 on the early extinguishment of debt. This
extraordinary loss represented the unamortized portion of loan costs
on the $50 million secured revolver terminated in December 1995.
During 1994, the Company purchased the 9.5% mortgage note
payable secured by Valley West Mall in Glendale, Arizona for
$4,500,000. The mortgage note payable had an outstanding principal
balance of $8,248,000 at the time of purchase, which resulted in an
extraordinary gain on extinguishment of this indebtedness of
approximately $3,748,000 for both financial reporting and tax
purposes.
During 1993, the Company prepaid in full nine mortgage notes
payable totaling approximately $21,896,000 with interest rates ranging
from 9.3% to 13.625% for financial reporting purposes. The Company
recognized an extraordinary loss on these prepayments of approximately
$1,440,000, representing $186,000 of unamortized net interest
discounts and $1,254,000 of prepayment penalties.
19
<PAGE> 21
11. CASH DISTRIBUTIONS AND DIVIDEND REINVESTMENT PLAN:
The taxability of per share distributions paid to shareholders
during the years ended December 31, 1995, 1994 and 1993 was as
follows:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C>
Ordinary income $.635 $ .72 $ .39
Capital gains - .04 .45
Return of capital .250 .08 -
----- ----- -----
$.885 $ .84 $ .84
===== ===== =====
</TABLE>
In addition, the 5% discount received upon purchase of shares
under the Dividend Reinvestment Plan is taxable as ordinary income to
the participant.
In 1984, the Company implemented a Dividend Reinvestment Plan
(the "Plan") under which shareholders of the Company may elect to
reinvest all or a portion of their dividends in the purchase of newly
issued shares of the Company. The price of shares so purchased is 95%
of the average high and low sales prices of the Company's common stock
on the applicable dividend payment date. During 1995, 1994 and 1993,
shares issued under the Plan totaled 121,831, 99,477 and 109,807,
respectively, and dividends totaling $1,107,261, $937,750 and
$1,248,628, respectively, were reinvested to purchase these shares.
12. STOCK OPTIONS:
Effective May 8, 1989, the Company adopted and its
shareholders approved the 1989 Stock Option Plan (the "1989 Plan").
In May 1993, the shareholders approved a 750,000 share increase in the
number of shares authorized to be granted under the 1989 Plan. The
1989 Plan, which expires on May 8, 1999, replaces the prior Key
Employee Stock Option Plan (the "Prior Plan"), except that options
granted under the Prior Plan and unexercised as of the date of the
1989 Plan shall remain in full force and effect.
The 1989 Plan includes provisions for a) the granting of both
Incentive Stock Options ("ISOs") (as defined in Section 422A of the
Internal Revenue Code) and nonqualified options to officers and
employees and b) the automatic granting of nonqualified options for
1,250 shares to each non-employee director upon the election and each
annual re-election of each non-employee director. Under the terms of
the 1989 Plan, the option price shall be no less than the fair market
value of the optioned shares at the date of grant.
20
<PAGE> 22
Details of the stock option activity during 1995, 1994 and
1993 are as follows:
<TABLE>
<CAPTION>
Number of Shares
---------------- Option Price
Employees Directors Per Share
--------- --------- --------------
<S> <C> <C> <C>
Options outstanding,
December 31, 1992 130,015 37,500 $7.63-$15.10
Granted, 1993 56,000 - $12.00
Granted, 1993 - 8,750 $13.38
Exercised, 1993 (1,800) (6,250) $7.63-$10.25
Expired unexercised,
1993 (3,000) - $ 9.25
------- ------
Options outstanding,
December 31, 1993 181,215 40,000 $7.63-$15.10
Granted, 1994 66,000 - $10.75
Granted, 1994 - 7,500 $10.63
Exercised, 1994 (6,210) - $7.63-$10.24
Expired unexercised,
1994 (16,350) - $9.25-$15.10
------- ------
Options outstanding,
December 31, 1994 224,655 47,500 $7.63-$15.10
Granted, 1995 80,500 - $10.125
Granted, 1995 - 7,500 $ 9.75
Granted, 1995 50,000 - $ 9.625
Exercised, 1995 (7,000) - $ 7.625
Expired unexercised,
1995 (12,000) - $10.125-$12.00
------- ------
Options outstanding,
December 31, 1995 336,155 55,000
======= ======
</TABLE>
There are currently ISOs outstanding on 372,343 shares
(including 40,625 shares granted under the Prior Plan), non-qualified
options outstanding on 105,000 shares, and 577,050 unoptioned shares
remaining in the 1989 Plan after the granting of ISOs for 89,000
additional shares at $9.25 per share on January 2, 1995 and the
expiration of an option on 2,812 shares at $10.16 per share on January
19, 1996.
13. EMPLOYEE RETIREMENT BENEFITS:
During 1980 the Board of Directors approved and adopted a
pension program for the employees of the Company. The program
included a noncontributory pension plan for all employees of the
Company, under which the Company accrued and funded pension costs each
year equal to 12% of employees' salaries. Effective June 30, 1990,
the Board of Directors of the Company elected to terminate the pension
plan.
Upon termination of the pension plan, the Board of Directors
determined that it would be appropriate to substitute in lieu thereof
a program of year-end cash payments to certain employees of the
Company. This program was instituted in 1990. Under this program,
participants receive a year-end cash payment from the Company, the
amount of which is based upon each participant's length of service
with the Company. Each participant who has been employed by the
Company for more than five years will receive a year-end cash
21
<PAGE> 23
payment equal to 12% of his or her salary. Each participant with less
than five years will receive year-end cash payments in graduated
amounts designed to produce a cumulative 12% payment after completion
of five years of service. The Company accrued approximately $200,000,
$168,000 and $154,000 under this program in 1995, 1994 and 1993,
respectively.
Certain employees whose time in service with the Company was
significantly greater than that of the remaining employees were
provided with employment contracts during 1980. These employment
contracts call for annual payments to each of these employees equal to
12% of the employee's salary in the event the Company's pension plan
is terminated and deferred compensation amounts to be paid at
retirement. The Company accrued approximately $23,000 for these
contracts in 1995, $23,000 in 1994, and $21,000 in 1993.
The Company currently has no postretirement or postemployment
benefits, and therefore Statements of Financial Accounting Standards
Nos. 106 and 112 have no effect on the Company.
14. TRANSACTIONS WITH RELATED PARTIES:
The former Chairman of the Executive Committee of the Company,
who is also a member of the Board of Directors and was appointed
President and Chief Operating Officer of the Company effective October
1, 1995, received consulting fees included in general and
administrative expenses for the years ended December 31, 1994 and 1993
totaling approximately $2,000 and $24,000, respectively. This
consulting arrangement was discontinued in January 1994.
The holdback shares and dividend equivalents related thereto
on the Sofran Centers were issued or paid to entities which were
directly or indirectly owned or controlled by Norman Zavalkoff, a
director of the Company from August 14, 1992 to January 27, 1994, and
nine other investors. (See Note 15).
15. COMMITMENTS AND CONTINGENCIES:
During 1992, the Company purchased 17 shopping centers (the
"Sofran Centers" and the "Dreyfus Centers") which had certain rental
guaranties from the sellers. At the time of the purchases, 290,762
shares of the Company's common stock (representing approximately
$3,003,000 of the purchase prices) were retained as "holdback shares."
The Company was required to issue all or a portion of the holdback
shares at various dates over the holdback periods if certain occupancy
levels on a portfolio basis or on agreed-upon spaces were achieved by
the end of the respective periods.
22
<PAGE> 24
The Sofran holdback, which expired January 1995, contained a
total of 169,290 shares. Over the term of this holdback, 9,182 shares
were earned by and issued to the sellers and the remaining 160,108
shares were forfeited.
The Dreyfus holdback, which expired December 1995, contained a
total of 121,472 shares. For the period December 23, 1992 through
September 30, 1995, the number of shares available to the sellers was
reduced by 34,378 shares and the Company issued 81,623 shares to the
sellers, leaving a balance of 5,471 holdback shares. Of the remaining
balance of holdback shares, 5,158 were issued to the sellers and 313
were forfeited in January 1996.
The shares issued represented additional cost of acquisition
for financial reporting purposes. In addition, during the holdback
periods, the sellers were entitled to amounts equivalent to dividends
on the holdback shares until such time as their right to receive such
holdback shares was extinguished. The Company paid dividend
equivalents of $41,637 and $100,466 during 1994 and 1993,
respectively, to the sellers of the Sofran Centers. Also, the Company
paid dividend equivalents of $12,100, $45,700 and $87,697 during 1995,
1994 and 1993, respectively, to the sellers of the Dreyfus Centers.
These payments were considered part of the cost of acquisition on the
respective payment dates.
Additionally, the seller of one of the Dreyfus Centers pledged
115,343 of its IRT Property Company shares to the Company as
collateral for a guarantee of rents payable by one of the anchor
tenants which had filed bankruptcy. For the period December 23, 1992
through September 30, 1995, 40,662 shares held as collateral were
released to the seller and 10,321 shares were retired, leaving a
balance of 64,360 shares.
In December 1995, the Company entered into a contract for the
expansion of one of its shopping center investments. The cost to the
Company will be approximately $693,000 of which approximately $34,000
had been incurred through December 31, 1995.
Effective October 1, 1995, the Company entered into agreements
with the Chairman, the President and the Executive Vice President and
Chief Financial Officer. The agreements contain provisions entitling
each such officer to receive from two to three times his or her annual
compensation (as defined) if there is a change in control of the
Company (as defined) and a termination of his or her employment.
Additionally, the President's agreement entitles him to
receive an amount equal to his annual compensation (as defined) if his
23
<PAGE> 25
employment is terminated within two years (a) by the Company
without cause or (b) by the President if his position and duties are
materially reduced or diminished.
16. ENVIRONMENTAL INVESTIGATIONS:
The Charlotte industrial facility contained underground
petroleum and used oil storage tanks ("USTs") believed to have been
owned by the previous owner of this property. The Company (through an
environmental consulting firm) removed the USTs in December 1993, and
on March 2, 1994, DEHNR notified the Company that certain
investigative, corrective and/or remedial actions ("Corrective
Actions") must be performed by the Company to, among other things,
determine the level of soil and/or groundwater contamination due to
suspected leakage from some of the USTs. The Company has investigated
the property to the satisfaction of DEHNR. The investigation
confirmed the presence of petroleum product-related substances in soil
and groundwater at levels that exceed applicable standards. The
investigation also revealed the presence of free phase liquids in one
monitoring well at the property.
The Company has begun removing free phase liquids from the
well on the property. In addition, the Company has submitted to DEHNR
a Corrective Action Plan ("CAP") and schedule to address
petroleum-impacted soil and groundwater at the site. Soil excavation
work has been completed, and the Company plans to address
petroleum-impacted groundwater in due course. According to the CAP,
the estimated remaining cost for site remediation ranges from $129,000
to $193,000 over a period of 3 to 6 years. Although the Company
believes that certain of the costs of Corrective Action are
reimburseable under the North Carolina Commercial Leaking Petroleum
Underground Storage Tank Cleanup Fund, the Company has accrued
$129,000 based on these estimates. The CAP may be revised, and the
estimated costs may change, but based on the information presently
available, the Company believes any additional costs of any such
Corrective Action would not have a material adverse effect on the
Company's results of operations, financial position or liquidity.
During its soil and groundwater investigation at Bluebonnet
Village Shopping Center in Baton Rouge, Louisiana, the Company's
environmental consultant discovered concentrations of various
chemicals in a single groundwater monitoring well that exceeded the
maximum contaminant levels under the Federal Safe Drinking Water Act.
The Company has notified the Louisiana Department of Environmental
Quality-Groundwater Protection Division ("LDEQ-GWPD") of such
discovery. The Company has been advised that the groundwater impact
appears to be very localized, since six other groundwater monitoring
wells placed around the initial well
24
<PAGE> 26
did not exhibit any impact. There can be no assurance that the
LDEQ-GWPD will not require remediation, but based on information
presently available to the Company and discussions with the Company's
environmental consultant, the Company believes the cost of any such
remediation would not have a material adverse effect on the Company's
results of operations, financial position or liquidity.
25
<PAGE> 27
17. QUARTERLY FINANCIAL INFORMATION (UNAUDITED):
The following is a summary of the unaudited quarterly financial
information for the years ended December 31, 1995 and 1994.
<TABLE>
<CAPTION>
1995
-----------------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- ------
<S> <C> <C> <C> <C>
Revenues $15,280,307 $14,837,565 $14,986,831 $15,091,544
=========== =========== =========== ===========
Earnings before gain (loss) on real
estate investments and extraordinary
item $ 4,196,221 $ 3,890,861 $ 3,910,440 $ 3,552,504
Gain (loss) on sales of properties,
net (16,673) (58,084) - 247,782
----------- ----------- ----------- -----------
Earnings before extraordinary
item 4,179,548 3,832,777 3,910,440 3,800,286
Extraordinary item - - - (137,260)
----------- ----------- ----------- -----------
Net earnings $ 4,179,548 $ 3,832,777 $ 3,910,440 $ 3,663,026
=========== =========== =========== ===========
Per Share:
Earnings before extraordinary
item $ .16 $ .15 $ .15 $ .14
Extraordinary item - - - -
----------- ----------- ----------- -----------
Net earnings $ .16 $ .15 $ .15 $ .14
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
1994
-----------------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues $12,038,799 $11,755,214 $12,306,661 $13,101,470
=========== =========== =========== ===========
Earnings before gain (loss) on real
estate investments and extraordinary
item $ 3,131,931 $ 2,888,770 $ 3,150,599 $ 3,617,623
----------- ----------- ----------- -----------
Gain (loss) on real estate
investments: - - 257,036 43,000
Gain on sales of properties - (3,685,454) - (440,000)
----------- ----------- ----------- -----------
Valuation loss - (3,685,454) 257,036 (397,000)
----------- ----------- ----------- -----------
Earnings before extraordinary
item 3,131,931 (796,684) 3,407,635 3,220,623
Extraordinary item - 3,748,095 - -
----------- ----------- ----------- -----------
Net earnings $ 3,131,931 $ 2,951,411 $ 3,407,635 $ 3,220,623
=========== =========== =========== ===========
Per Share:
Earnings before extraordinary
item $ .12 $ (.03) $ .13 $ .13
Extraordinary item - .15 - -
----------- ----------- ----------- -----------
Net earnings $ .12 $ .12 $ .13 $ .13
=========== =========== =========== ===========
</TABLE>
26
<PAGE> 28
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995
<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
Abbeville Plaza
Abbeville, SC
Land $ - $ 48,066 $ - $ 48,066
Buildings 458,062 10,470 468,532
Ambassador Row
Lafayette, LA
Land - 2,451,860 - 2,451,860
Buildings 7,244,580 70,500 7,315,080
Ambassador Row Courtyard
Lafayette, LA
Land - 2,899,438 - 2,899,438
Buildings 8,698,313 - 8,698,313
Asheville Plaza
Asheville, NC
Land - 52,710 15,000 67,710
Buildings 335,717 1,860 337,577
Bluebonnet Village
Baton Rouge, LA
Land - 2,540,594 - 2,540,594
Buildings 5,509,995 24,742 5,534,737
The Boulevard
Lafayette, LA
Land - 948,334 - 948,334
Buildings 2,845,003 4,350 2,849,353
Carolina Place
Hartsville, SC
Land - 345,000 - 345,000
Buildings 2,006,494 - 2,006,494
Centre Pointe Plaza
Smithfield, NC
Land - 983,138 12,583 995,721
Buildings 7,999,263 146,922 8,146,185
<CAPTION>
Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
Abbeville Plaza
Abbeville, SC
Land $ - 30 April, 1986 1970
Buildings 189,270
Ambassador Row
Lafayette, LA
Land - 40 December, 1994 1980 &
Buildings 184,787 1991
Ambassador Row Courtyard
Lafayette, LA
Land - 40 December, 1994 1986 &
Buildings 222,382 1991
Asheville Plaza
Asheville, NC
Land - 30 April, 1986 1967
Buildings 110,568
Bluebonnet Village
Baton Rouge, LA
Land - 40 December, 1994 1983
Buildings 142,265
The Boulevard
Lafayette, LA
Land - 40 December, 1994 1976 &
Buildings 73,004 1994
Carolina Place
Hartsville, SC
Land - 40 May, 1989 1989
Buildings 328,380
Centre Pointe Plaza
Smithfield, NC
Land - 40 December, 1992 1989 &
Buildings 613,538 1993
</TABLE>
27
<PAGE> 29
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995
<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
Chadwick Square
Hendersonville, NC
Land $ - $ 276,778 $ - $ 276,778
Buildings 1,179,949 - 1,179,949
Chelsea Place
New Port Richey, FL
Land - 1,387,517 - 1,387,517
Buildings 5,550,068 - 5,550,068
Chester Plaza
Chester, SC
Land - 68,649 143,504 212,153
Buildings 414,117 1,573,701 1,987,818
Chestnut Square
Brevard, NC
Land 1,069,609 295,984 - 295,984
Buildings 1,113,464 7,539 1,121,003
Colony Square
Fitzgerald, GA
Land - 272,833 - 272,833
Buildings 2,455,826 200,571 2,656,397
Commerce Crossing
Commerce, GA
Land - 379,380 889 380,269
Buildings 4,086,850 15,569 4,102,419
Country Club Plaza
Slidell, LA
Land 1,068,686 1,068,686
Buildings 3,010,039 12,275 3,022,314
Countryside Shops
Cooper City, FL
Land - 5,675,614 - 5,675,614
Buildings 10,954,065 62,953 11,017,018
<CAPTION>
Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
Chadwick Square
Hendersonville, NC
Land $ - 40 January, 1992 1985
Buildings 115,526
Chelsea Place
New Port Richey, FL
Land - 40 July, 1993 1992
Buildings 341,109
Chester Plaza
Chester, SC
Land - 30 April, 1986 1967 &
Buildings 423,860 1992
Chestnut Square
Brevard, NC
Land - 40 January, 1992 1985
Buildings 112,436
Colony Square
Fitzgerald, GA
Land - 40 February, 1988 1987
Buildings 584,587
Commerce Crossing
Commerce, GA
Land - 40 December, 1992 1988
Buildings 309,275
Country Club Plaza
Slidell, LA
Land - 40 January, 1995 1982
Buildings 74,241
Countryside Shops
Cooper City, FL
Land - 40 June, 1994 1986, 1988
Buildings 413,470 & 1991
</TABLE>
28
<PAGE> 30
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995
<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
The Crossing
Slidell, LA
Land $ - $ 1,282,036 $ - $ 1,282,036
Buildings 3,213,616 69,850 3,283,466
Delchamps Plaza
Pascagoula, MS
Land 3,233,587 359,000 - 359,000
Buildings 4,130,247 25,986 4,156,233
Douglas Commons
Douglasville, GA
Land 6,270,451 2,543,385 2,951 2,546,336
Buildings 5,958,475 104,280 6,062,755
Eden Centre
Eden, NC
Land - 625,901 - 625,901
Buildings 2,901,316 - 2,901,316
Elmwood Oaks
Harahan, LA
Land 7,500,000 4,558,654 - 4,558,654
Buildings 6,560,014 7,120 6,567,134
First Street Station
Albemarle, NC
Land - 202,578 - 202,578
Buildings 2,832,092 6,998 2,839,090
Forest Hills Centre
Wilson, NC
Land - 869,981 (9,160) 860,821
Buildings 4,102,906 552,594 4,655,500
Forrest Gallery
Tullahoma, TN
Land - 2,136,573 10,639 2,147,212
Buildings 9,976,227 228,743 10,204,970
<CAPTION>
Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
The Crossing
Slidell, LA
Land $ - 40 December, 1994 1988 &
Buildings 83,581 1993
Delchamps Plaza
Pascagoula, MS
Land - 40 April, 1988 1987
Buildings 805,129
Douglas Commons
Douglasville, GA
Land - 40 August, 1992 1988
Buildings 527,432
Eden Centre
Eden, NC
Land - 40 November, 1994 1991
Buildings 84,621
Elmwood Oaks
Harahan, LA
Land - 40 January, 1992 1989
Buildings 649,249
First Street Station
Albemarle, NC
Land - 40 August, 1994 1989
Buildings 94,399
Forest Hills Centre
Wilson, NC
Land - 40 August, 1990 1990
Buildings 522,773
Forrest Gallery
Tullahoma, TN
Land - 40 December, 1992 1987
Buildings 782,487
</TABLE>
29
<PAGE> 31
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995
<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
Ft. Walton Beach Plaza
Ft. Walton Beach, FL
Land $ - $ 787,583 $ - $ 787,583
Buildings 1,860,360 28,774 1,889,134
The Galleria
Wrightsville Beach, NC
Land - 1,069,672 - 1,069,672
Buildings 5,256,991 1,256,043 6,513,034
Gulf Gate Plaza
Naples, FL
Land - 277,562 - 277,562
Buildings 1,857,532 2,158,202 4,015,734
Harris Teeter
Lexington, VA
Land - 312,105 - 312,105
Buildings 1,638,552 650,000 2,288,552
Heritage Walk
Milledgeville, GA
Land - 810,292 - 810,292
Buildings 7,944,260 3,200 7,947,460
Hoffner Plaza
Orlando, FL
Land - 185,293 - 185,293
Buildings 476,469 485,171 961,640
Lancaster Plaza
Lancaster, SC
Land - 120,790 - 120,790
Buildings 743,852 299,267 1,043,119
Lancaster Shopping Center
Lancaster, SC
Land - 338,355 - 338,355
Buildings 1,227,552 29,760 1,257,312
<CAPTION>
Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
Ft. Walton Beach Plaza
Ft. Walton Beach, FL
Land $ - 30 July, 1986 1986
Buildings 589,312
The Galleria
Wrightsville Beach, NC
Land - 40 August, 1986 & 1986 &
Buildings 1,336,073 December, 1987 1990
Gulf Gate Plaza
Naples, FL
Land - 28 June, 1979 1969 &
Buildings 2,278,348 1974
Harris Teeter
Lexington, VA
Land - 30 June, 1988 & 1981 &
Buildings 561,740 June, 1989 1989
Heritage Walk
Milledgeville, GA
Land - 40 June,1993 1991 &
Buildings 511,492 1992
Hoffner Plaza
Orlando, FL
Land - 28 June, 1979 1972
Buildings 719,116
Lancaster Plaza
Lancaster, SC
Land - 30 April, 1986 1971
Buildings 407,423
Lancaster Shopping Center
Lancaster, SC
Land - 30 August, 1986 & 1963 &
Buildings 352,435 December, 1987 1987
</TABLE>
30
<PAGE> 32
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995
<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
Lawrence Commons
Lawrenceburg, TN
Land $ 2,739,060 $ 715,653 $ 829 $ 716,482
Buildings 2,726,635 16,056 2,742,691
Litchfield Landing
North Litchfield, SC
Land - 475,000 - 475,000
Buildings 2,118,429 39,256 2,157,685
Macland Pointe
Marietta, GA
Land 3,834,068 1,252,098 - 1,252,098
Buildings 4,317,234 544,073 4,861,307
Masonova Plaza
Daytona Beach, FL
Land - 296,643 - 296,643
Buildings 1,680,977 1,053,232 2,734,209
Millervillage Shopping Center
Baton Rouge, LA
Land - 1,926,535 - 1,926,535
Buildings 5,661,992 34,125 5,696,117
New Smyrna Beach Regional
New Smyrna Beach, FL
Land - 3,704,368 6,757 3,711,125
Buildings 6,400,556 236,152 6,636,708
North River Village
Ellenton, FL
Land - 2,949,031 - 2,949,031
Buildings 7,150,403 64,321 7,214,724
North Village Center
North Myrtle Beach, SC
Land 2,779,144 483,400 - 483,400
Buildings 2,785,154 15,479 2,800,633
<CAPTION>
Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
Lawrence Commons
Lawrenceburg, TN
Land $ - 40 August, 1992 1987
Buildings 234,480
Litchfield Landing
North Litchfield, SC
Land - 40 August, 1986 1984
Buildings 514,750
Macland Pointe
Marietta, GA
Land - 40 January, 1993 1992 &
Buildings 354,239 1993
Masonova Plaza
Daytona Beach, FL
Land - 16 June, 1979 1969
Buildings 2,089,261
Millervillage Shopping Center
Baton Rouge, LA
Land - 40 December, 1994 1983 &
Buildings 146,264 1992
New Smyrna Beach Regional
New Smyrna Beach, FL
Land - 40 August, 1992 1987
Buildings 576,362
North River Village
Ellenton, FL
Land - 40 December, 1992 & 1988 &
Buildings 434,841 December, 1993 1993
North Village Center
North Myrtle Beach, SC
Land - 37 August, 1986 1984
Buildings 608,074
</TABLE>
31
<PAGE> 33
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995
<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
Old Kings Commons
Palm Coast, FL
Land $ - $ 1,491,458 $ - $ 1,491,458
Buildings 4,474,372 137,113 4,611,485
Palm Gardens
Largo, FL
Land - 98,279 - 98,279
Buildings 657,716 1,274,417 1,932,133
Parkmore Plaza
Milton, FL
Land - 1,797,774 8,141 1,805,915
Buildings 6,448,360 60,948 6,509,308
Paulding Commons
Dallas, GA
Land 8,732,846 2,312,372 2,687 2,315,059
Buildings 10,606,781 40,624 10,647,405
Pensacola Plaza
Pensacola, FL
Land - 130,688 - 130,688
Buildings 2,392,249 121,642 2,513,891
Pinhook Plaza
Lafayette, LA
Land 7,422,055 2,768,151 - 2,768,151
Buildings 8,304,453 19,500 8,323,953
Plaza Acadienne
Eunice, LA
Land 2,388,785 - - -
Buildings 2,917,925 12,000 2,929,925
Plaza North
Hendersonville, NC
Land - 657,797 121 657,918
Buildings 1,795,992 6,185 1,802,177
<CAPTION>
Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
Old Kings Commons
Palm Coast, FL
Land $ - 40 May, 1988 1988
Buildings 903,702
Palm Gardens
Largo, FL
Land - 26 June, 1979 1970 &
Buildings 767,811 1993
Parkmore Plaza
Milton, FL
Land - 40 December, 1992 1986 &
Buildings 490,451 1992
Paulding Commons
Dallas, GA
Land - 40 August, 1992 1991
Buildings 909,810
Pensacola Plaza
Pensacola, FL
Land - 30 July, 1986 1985
Buildings 813,629
Pinhook Plaza
Lafayette, LA
Land - 40 December, 1994 1979 &
Buildings 213,275 1992
Plaza Acadienne
Eunice, LA
Land - 40 December, 1994 1980
Buildings 74,898
Plaza North
Hendersonville, NC
Land - 40 August, 1992 1986
Buildings 153,940
</TABLE>
32
<PAGE> 34
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995
<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
Providence Square
Charlotte, NC
Land $ - $ 450,000 $ 300 $ 450,300
Buildings 1,895,606 1,965,327 3,860,933
Riverview Shopping Center
Durham, NC
Land - 400,000 322 400,322
Buildings 1,822,918 4,128,911 5,951,829
Scottsville Square
Bowling Green, KY
Land - 653,010 765 653,775
Buildings 1,782,340 2,089 1,784,429
Seven Hills
Spring Hill, FL
Land 3,800,000 1,903,090 - 1,903,090
Buildings 2,976,628 17,502 2,994,130
Shelby Plaza
Shelby, NC
Land - - - -
Buildings 937,483 177,666 1,115,149
Sherwood South
Baton Rouge, LA
Land - 496,174 - 496,174
Buildings 1,488,521 - 1,488,521
Siegen Village
Baton Rouge, LA
Land - 2,375,168 (325,000) 2,050,168
Buildings 4,302,715 19,830 4,322,545
Smyrna Village
Smyrna, TN
Land 4,172,360 968,358 20,601 988,959
Buildings 4,743,708 113,474 4,857,182
<CAPTION>
Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
Providence Square
Charlotte, NC
Land $ - 35 December, 1971 1973
Buildings 2,333,015
Riverview Shopping Center
Durham, NC
Land - 35 March, 1972 1973
Buildings 1,730,023
Scottsville Square
Bowling Green, KY
Land - 40 August, 1992 1986
Buildings 152,319
Seven Hills
Spring Hill, FL
Land - 40 July, 1993 1991
Buildings 185,439
Shelby Plaza
Shelby, NC
Land - 30 April, 1986 1972
Buildings 409,838
Sherwood South
Baton Rouge, LA
Land - 40 December, 1994 1972, 1988
Buildings 38,628 & 1992
Siegen Village
Baton Rouge, LA
Land - 40 December, 1994 1988
Buildings 108,498
Smyrna Village
Smyrna, TN
Land - 40 August, 1992 1992
Buildings 411,689
</TABLE>
33
<PAGE> 35
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995
<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
Smyth Valley Crossing
Marion, VA
Land $ - $ 1,692,081 $ 6,523 $ 1,698,604
Buildings 5,226,952 114,519 5,341,471
South Beach Regional
Jacksonville Beach, FL
Land 15,365,624 3,972,815 19,710 3,992,525
Buildings 17,115,106 741,735 17,856,841
Spalding Village
Griffin, GA
Land 11,376,691 2,813,854 3,281 2,817,135
Buildings 12,470,446 95,205 12,565,651
Stadium Plaza
Phenix City, AL
Land 3,850,000 1,828,942 2,130 1,831,072
Buildings 2,614,155 18,096 2,632,251
Stanley Market Place
Stanley, NC
Land - 198,103 - 198,103
Buildings 1,602,832 - 1,602,832
Tarpon Heights
Galliano, LA
Land 2,443,428 705,570 705,570
Buildings 2,116,712 3,125 2,119,837
Taylorsville Shopping Center
Taylorsville, NC
Land - 89,689 - 89,689
Buildings 1,443,704 1,078,766 2,522,470
Thomasville Commons
Thomasville, NC
Land 5,582,694 963,333 - 963,333
Buildings 6,183,052 26,576 6,209,628
<CAPTION>
Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
Smyth Valley Crossing
Marion, VA
Land $ - 40 December, 1992 1989
Buildings 413,008
South Beach Regional
Jacksonville Beach, FL
Land - 40 August, 1992 1990 &
Buildings 1,539,668 1991
Spalding Village
Griffin, GA
Land - 40 August, 1992 1989
Buildings 1,070,692
Stadium Plaza
Phenix City, AL
Land - 40 August, 1992 1988
Buildings 226,501
Stanley Market Place
Stanley, NC
Land - 35 January, 1992 1980 &
Buildings 156,980 1991
Tarpon Heights
Galliano, LA
Land - 40 January, 1995 1982
Buildings 52,209
Taylorsville Shopping Center
Taylorsville, NC
Land - 40 August, 1986 & 1982 &
Buildings 538,702 December, 1988 1988
Thomasville Commons
Thomasville, NC
Land - 40 August, 1992 1991
Buildings 537,022
</TABLE>
34
<PAGE> 36
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995
<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
University Center
Greenville, NC
Land $ - $ 750,000 $ - $ 750,000
Buildings 3,159,065 61,907 3,220,972
Valley West Mall
Glendale, AZ
Land - 1,500,000 - 1,500,000
Buildings 5,801,772 2,905,826 8,707,598
Venice Plaza
Venice, FL
Land - 333,127 - 333,127
Buildings 1,887,721 582,501 2,470,222
Village at Northshore
Slidell, LA
Land 5,710,182 2,065,633 - 2,065,633
Buildings 6,196,900 5,673 6,202,573
Waterlick Plaza
Lynchburg, VA
Land - 1,071,000 - 1,071,000
Buildings 5,091,222 104,652 5,195,874
Watson Central
Warner Robins, GA
Land - 1,644,699 12,478 1,657,177
Buildings 11,312,051 88,121 11,400,172
Wesley Chapel Crossing
Decatur, GA
Land - 3,827,798 9,154 3,836,952
Buildings 7,029,915 47,541 7,077,456
West Gate Plaza
Mobile, AL
Land - 475,270 - 475,270
Buildings 3,779,546 481,190 4,260,736
<CAPTION>
Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
University Center
Greenville, NC
Land $ - 40 December, 1989 1989
Buildings 488,033
Valley West Mall
Glendale, AZ
Land - 30 March, 1986 1973
Buildings 4,902,642
Venice Plaza
Venice, FL
Land - 27 June, 1979 1971 &
Buildings 1,477,401 1979
Village at Northshore
Slidell, LA
Land - 40 December, 1994 1988 &
Buildings 159,094 1993
Waterlick Plaza
Lynchburg, VA
Land - 40 October, 1989 1973 &
Buildings 831,056 1988
Watson Central
Warner Robins, GA
Land - 40 December, 1992 & 1989 &
Buildings 817,596 October, 1993 1993
Wesley Chapel Crossing
Decatur, GA
Land - 40 December, 1992 1989
Buildings 536,891
West Gate Plaza
Mobile, AL
Land - 25 June, 1974 & 1974
Buildings 721,733 January, 1985
</TABLE>
35
<PAGE> 37
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995
<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
West Towne Square
Rome, GA
Land $ - $ 324,800 $ - $ 324,800
Buildings 5,580,776 97,275 5,678,051
Westgate Square
Sunrise, FL
Land - 2,238,886 - 2,238,886
Buildings 6,839,969 60,749 6,900,718
Willowdaile Shopping Center
Durham, NC
Land - 936,977 (60,579) 876,398
Buildings 7,351,612 306,538 7,658,150
Whitehall Kent Apartments
Kent, OH
Land - 136,404 117,938 254,342
Buildings 2,136,996 1,253,021 3,390,017
Industrial Buildings
Charlotte, NC - Industrial
Land - 143,160 178,490 321,650
Buildings 2,170,057 472,435 2,642,492
Plasti-Kote
Medina, OH - Industrial
Land - 81,390 - 81,390
Buildings 346,979 54,570 401,549
Lawrence County
Shopping Center
Sybene, OH
Land - 435,994 - 435,994
Grand Marche
Shopping Center
Lafayette, LA
Land - 250,000 500 250,500
<CAPTION>
Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
West Towne Square
Rome, GA
Land $ - 40 April, 1990 1988
Buildings 823,086
Westgate Square
Sunrise, FL
Land - 40 June, 1994 1984 &
Buildings 256,747 1988
Willowdaile Shopping Center
Durham, NC
Land - 40 August, 1986 & 1986
Buildings 1,671,009 December, 1987
Whitehall Kent Apartments
Kent, OH
Land - 29 June, 1979 1968
Buildings 2,137,235
Industrial Buildings
Charlotte, NC - Industrial
Land - 14 June, 1979 1956 &
Buildings 2,642,492 1963
Plasti-Kote
Medina, OH - Industrial
Land - 14 June, 1979 1961 &
Buildings 401,549 1966
Lawrence County
Shopping Center
Sybene, OH
Land - May, 1971 1971
Grand Marche
Shopping Center
Lafayette, LA
Land - September, 1972 1969
</TABLE>
36
<PAGE> 38
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995
<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
Manatee County
Shopping Center
Bradenton, FL
Land $ - $ 241,798 $ - $ 241,798
-------------- ------------- -------------- ---------------
$ 98,270,584 $ 425,589,664 $ 26,918,937 $ 452,508,601
============== ============= ============== ================
<CAPTION>
Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
Manatee County
Shopping Center
Bradenton, FL
Land $ - May, 1971 1971
--------------
$ 51,600,890
==============
</TABLE>
37
<PAGE> 39
IRT PROPERTY COMPANY SCHEDULE III
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995
NOTE:
Real estate activity is summarized as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
RENTAL PROPERTIES:
Cost -
Balance at beginning of year $442,642,705 $331,012,764 $300,285,526
Acquisitions and improvements 11,518,502 115,813,729 37,157,578
Retirements - - -
Reduction in carrying value - (3,878,754) -
------------ ------------ ------------
454,161,207 442,947,739 337,443,104
Cost of properties sold (1,652,606) (305,034) (6,430,340)
------------ ------------ ------------
Balance at end of year $452,508,601 $442,642,705 $331,012,764
============ ============ ============
Accumulated depreciation -
Balance at beginning of year $41,677,722 $33,463,530 $29,002,538
Depreciation 10,427,268 8,214,192 7,668,797
Retirements - - -
------------ ------------ ------------
52,104,990 41,677,722 36,671,335
Accumulated depreciation related to
rental properties sold (504,100) - (3,207,805)
------------ ------------ ------------
Balance at end of year $ 51,600,890 $ 41,677,722 $ 33,463,530
============ ============ ============
</TABLE>
38
<PAGE> 40
IRT PROPERTY COMPANY SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE December 31, 1995
<TABLE>
<CAPTION>
Principal
Amount of
Face Amount Loans Subject
Final Periodic and Carrying to Delinquent
Type of Type of Interest Maturity Payment Amount of Principal
Location of Property Loan Property Rate Date Terms Prior Liens Mortgages or Interest
- -------------------- ---- -------- ---- ---- ----- ----------- --------- -----------
(See Notes) (See Notes)
<S> <C> <C> <C> <C> <C> <C> <C>
Augusta, GA First Mortgage Shopping Center 10.25% August, 1998 (1) $ - $3,220,575 -
Lauderdale Lakes, FL First Mortgage Condominiums 10.00% May, 2009 (2) - 138,003 -
Nashville, TN First Mortgage Condominiums 8.63% - 2006-2007 (2) - 38,415 -
Participation 12.38%
Montgomery, AL Wrap-Around Apartments (3) September, 2001 (3) - 5,390,104 -
------- ----------
- 8,787,097
------- ----------
Less interest discounts and negative goodwill - (287,887)
$ - $8,499,210
======= ==========
</TABLE>
NOTES:
(1) Monthly payments of principal and interest at an annual rate of 10.25%,
with a balloon payment at maturity August 1, 1998.
(2) Monthly payments include principal and interest.
(3) Modified effective, December 1, 1994 to extend the term for 3 years to
September 1, 2001 and to reduce the cash interest rate from 10% to 9.5%
prospectively, requiring monthly payments of $45,382 of principal and
interest for the remaining term, with a balloon payment at maturity.
Additional interest at an annual rate of 1% accrues for the periods
September 1,1984 through August 31, 1989 and September 1,1991 through
August 31, 2001 and is payable at maturity or on sale of the property.
In addition, the Company funded additional principal of $260,000 under
this mortgage during 1995 to make certain capital improvements. This
wrap-around mortgage is subject to two first mortgages having an
aggregate balance of $917,598 as of December 31, 1995.
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<PAGE> 41
IRT PROPERTY COMPANY SCHEDULE IV
SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE
December 31, 1995
Mortgage loan activity is summarized as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year $8,292,143 $8,392,959 $12,528,542
New mortgage loans - - -
Additions to mortgage loans 260,000 - -
Amortization of interest discounts and negative
goodwill 45,193 7,076 93,801
Collections of principal (98,126) (107,892) (4,229,384)
---------- ---------- -----------
Balance at end of year $8,499,210 $8,292,143 $ 8,392,959
========== ========== ===========
</TABLE>
40
<PAGE> 42
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
Financial Statements and Schedules. Included in Part II of this
Report are the following:
Report of Independent Public Accountants
Consolidated Balance Sheets at December 31, 1995 and 1994
Consolidated Statements of Earnings for the Years Ended December 31,
1995, 1994 and 1993
Consolidated Statements of Changes in Shareholders' Equity for the
Years Ended December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows for the Years Ended December 31,
1995, 1994 and 1993
Notes to Consolidated Financial Statements
Schedule III - Real Estate and Accumulated Depreciation
Schedule IV - Mortgage Loans on Real Estate
Exhibits.
(3)(a) The Company's Articles of Incorporation, as amended, were
filed as Exhibit 4.1 to the Company's Registration Statement
on Form S-3 (No. 33-65604) dated July 6, 1993, to which
reference is hereby made.
(3)(b) The Company's By-Laws, as amended, were filed as Exhibit 3 to
the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995, to which reference is hereby made.
(4)(a) The Indenture dated August 15, 1993 between the Company and
Trust Company Bank, as Trustee, relating to the 7.3%
Convertible Subordinated Debentures due August 15, 2003 was
filed as an exhibit to the Company's Form 10-K for the year
ended December 31, 1993, to which reference is hereby made.
(4)(b) The form of 7.3% Convertible Subordinated Debenture was
included in (4)(a) above.
(4)(c)* The Indentures dated as of November 9, 1995 between the
Company and SunTrust Bank, Atlanta, as Trustee, relating to
Senior Debt Securities and Subordinated Debt Securities are
filed herewith.
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<PAGE> 43
(10)(a) The Deferred Compensation Agreement between the Company and
Donald W. MacLeod was filed as an exhibit to the Company's
Registration Statement on Form S-2 (No. 2-88716) dated January
4, 1984, to which reference is hereby made.
(10)(b) The Company's 1989 Stock Option Plan was filed as an exhibit
to the Company's Form 8-K dated March 22, 1989, to which
reference is hereby made.
(10)(c) Amendment No. 1 to the Company's 1989 Stock Option Plan was
filed as an exhibit to the Company's Form 10-K for the year
ended December 31, 1993, to which reference is hereby made.
(10)(d) The Company's Key Employee Stock Option Plan was filed as an
exhibit to the Company's Registration Statement on Form S-2
(No. 2-88716) dated January 4, 1984, to which reference is
hereby made.
(10)(e)* The Company's Deferred Compensation Plan for Outside Directors
dated December 22, 1995 is filed herewith.
(10)(f)* Agreements between the Company and Donald W. MacLeod, Thomas
H. McAuley and Mary M. Thomas effective October 1, 1995 are
filed herewith.
(10)(g) The Company's amended and restated $50 million revolving term
loan agreement dated July 31, 1992 was filed as Exhibit
(10)(e) to the Company's Form 10-K for the year ended December
31, 1992, to which reference is hereby made. The Company's
revolving term loan agreement dated November 1, 1990 was filed
as Exhibit (10)(e) to the Company's Form 10-K for the year
ended December 31, 1990, to which reference is hereby made.
(10)(h) The Company's $100 million revolving term loan agreement dated
December 15, 1995 was filed as an exhibit to the Company's
Form 8-K dated January 2, 1996, to which reference is hereby
made.
(10)(i) The Real Property Purchase Agreement and first amendment
thereto dated June 23, 1992 relative to the Company's
acquisition of the ten Sofran Centers was filed as an exhibit
to the Company's report on Form 8-K dated August 12, 1992
(date of event reported, July 31, 1992), to which reference is
hereby made.
(10)(j) Form of Agreement for the Sale and Purchase of Property dated
October 30, 1992 and the letter amendment thereto dated
November 19, 1992 relative to the Company's acquisition of the
seven Dreyfus
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<PAGE> 44
Centers was filed as an exhibit to the Company's report on
Form 8-K dated January 6, 1993 (date of event reported,
December 23, 1992), to which reference is hereby made.
(10)(k) The letter agreement dated December 23, 1992 between the IBM
Retirement Plan Trust Fund and its seven wholly-owned
subsidiaries and the Company was filed as an exhibit to the
Company's report on Form 8-K dated January 6, 1993 (date of
event reported, December 23, 1992), to which reference is
hereby made.
(10)(l) The letter agreement dated July 29, 1993 between the IBM
Retirement Plan Trust Fund and its seven wholly-owned
subsidiaries and the Company was filed as an exhibit to the
Company's Form 10-K for the year ended December 31, 1993, to
which reference is hereby made.
(21) The Company has two subsidiaries, IRT Management Company
("IRTMC") and VW Mall, Inc. ("VWM"), Georgia corporations
which are wholly owned by the Company. IRTMC was formed in
1990 and VWM in 1994.
(23) Consent of Arthur Andersen LLP to the incorporation of their
report included in this Form 10-K in the Company's previously
filed Registration Statements File Nos. 33-65604, 33-66780,
33-51238, 33-59938, 33-64628, 33-64741 and 33-63523.
(27)* Financial Data Schedule (for S.E.C. use only)
* Previously Filed
Reports on Form 8-K . The Company filed a Current Report on Form 8-K
dated January 2, 1996 (date of event reported, December 15, 1995), reporting
under Items 5 and 7, the $100 million unsecured revolving term loan obtained
December 15, 1995, which Form 8-K is incorporated herein by reference.
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<PAGE> 45
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amended and restated Form 10-K/A Amendment
No. 1 to be signed on its behalf by the undersigned, thereunto duly authorized.
February 20, 1996 IRT PROPERTY COMPANY
By:/s/ Mary M. Thomas
-----------------------------
Mary M. Thomas
Executive Vice
President & Chief
Financial Officer
44
<PAGE> 1
Exhibit (23)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
IRT Property Company:
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 10-K/A Amendment No. 1 into
the Company's previously filed Registration Statements File Nos. 33-65604,
33-66780, 33-51238, 33-59938, 33-64628, 33-64741 and 33-63523.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 20, 1996
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