<PAGE>
______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
____________
For the quarter ended March 31, 1996. Commission File Number 0-9231
ALASKA NORTHWEST PROPERTIES INC.
(Exact name of registrant as specified in its charter)
ALASKA 92-0035034
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
23830 PACIFIC HIGHWAY S., SUITE 300 #3, SEATTLE, WA 98032
(Address of principal executive offices)
Registrant's telephone number, including area code: (206) 433-0730
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
------- -------
The company had 29,087 common shares, par value $1.00, outstanding at March 31,
1996.
______________________________________________________________________________
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Attached are the following Alaska Northwest Properties Inc.(ANPI) unaudited
financial statements: (1) Balance sheet as of March 31, 1996 and December 31,
1995; (2) Statements of operations for the three months ended March 31, 1996
and 1995; (3) Statements of shareholders' equity for the three months ended
March 31, 1996; and (4) Statements of cash flows for the three months ended
March 31, 1996 and 1995.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FINANCIAL CONDITION
In the first quarter of 1996, the Company reached an agreement with a debtor on
an allocation of insurance proceeds totaling $337,667, received when one of
three apartment buildings, securing a 9% note receivable, was destroyed in a
fire in Fairbanks, Alaska. Under the agreement dated February 23, 1996, the
debtor applied $262,667 to the mortgage on the note receivable, while retaining
the remaining $75,000 for improvements to the remaining collateral. In
addition, the Company agreed to release the portion of the collateral that was
damaged to the debtor and reduce the related monthly payment from $5,800 to
$3,365. During 1995, the debtor received an initial insurance disbursement of
$50,000 and applied half of the proceeds to the mortgage, as required by the
Company. As a result of continued additional investment on the part of the
debtor, to whom the Company sold the property in 1993, the Company recognized
the remaining deferred gain of $260,731, under the full accrual method of
accounting for real estate sales in accordance with FAS 66 during the first
quarter.
Also in the first quarter, the Company decided that it was not in its best
interest to disburse dividends in 1996.
RESULTS OF OPERATIONS
For the quarter ended March 31, 1996, net income of $116,082 was recognized by
the Company, as compared to a net loss of $105,742 for the same period in 1995.
There were no real estate sales in the first quarter of 1996. However, the
Company recognized a gain of $260,731, based on the full accrual method of
accounting in accordance with FAS 66, from the sale of real estate in Fairbanks,
Alaska, in 1993. The Company did not realize a gain or loss on the sale of real
estate in the first quarter of 1995.
For the three months ended March 31, 1996, total revenues, including interest
income from notes and securities, decreased $11,000 from the same period of
1995. However, the slight difference is a result of timing differences on
certain payments received between the first and second quarters of 1996 and
1995, respectively. Cost and Expenses for the quarter ended March 31, 1996,
including interest expense, also remained relatively consistent in comparison to
the same quarter in 1995.
1
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LIQUIDITY AND CAPITAL RESOURCES
Management anticipates that the current level of available liquidity is adequate
to satisfy its known future working capital and capital expenditure
requirements. The Company has no commitments other than normal operating costs
which would require the use of capital resources. The Company met its liquidity
requirements from investing, financing, and operating activities as of March 31,
1996, as outlined below:
OPERATIONS: As presented in more detail in the accompanying statement of cash
flows, approximated cash provided by operating activities was $59,000. The
Company incurred a net income of $116,000 in 1996, which included non-cash
charges for depreciation of $28,000, realized and unrealized investment losses
of $49,000 and non-cash gain recognition on real estate sales of $260,000.
INVESTING: Net cash provided by investing activities totaled $141,000. Cash
was paid from the purchase and sale of other assets in the amount of $180,000,
which includes the net difference in the purchase and sale of futures and
futures options contracts. Other sources of investment cash include $48,000
from the maturity of Government Securities, net of purchases.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) No exhibits have been filed herewith.
(b) No Form 8-K reports were filed during the first quarter of 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ALASKA NORTHWEST PROPERTIES INC.
(REGISTRANT)
Date: May 10, 1996 /s/ Michael W. Shimasaki
------------------------
Michael W. Shimasaki
President and Treasurer, Director and
Principal Financial Officer
2
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ALASKA NORTHWEST PROPERTIES INC.
BALANCE SHEETS (UNAUDITED)
(amounts in thousands except # of shares)
ASSETS 3/31/96 12/31/95
- ------------------------------------------------------------------------------
OPERATING PROPERTY AND EQUIPMENT, at cost:
Land and land improvements $ 393 $ 393
Buildings 1,318 1,318
Furniture, fixtures and equipment 197 195
Leasehold costs and other 218 218
--------- ---------
2,126 2,124
Less accumulated depreciation and amortization (1,328) (1,311)
--------- ---------
798 813
LAND HELD FOR INVESTMENT, at cost
(net of accumulated depreciation of $512
and $523, respectively) 7,003 7,015
NOTES RECEIVABLE (net of deferred
gain of $0 and $247, respectively) 1,342 1,368
CASH AND CASH EQUIVALENTS 339 148
RESTRICTED CASH 25 88
U.S. GOVERNMENT SECURITIES, at cost 170 218
OTHER ASSETS 90 104
--------- ---------
TOTAL ASSETS $ 9,767 $ 9,754
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
- -------------------------------------------------------------------------------
NOTES PAYABLE 103 112
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 94 58
LIABILITY FOR UNSETTLED FUTURES AND
OPTION CONTRACTS 73 203
--------- ---------
TOTAL LIABILITIES 270 373
SHAREHOLDERS' EQUITY:
Common stock $1.00 par value, authorized
50,000 shares, issued 47,641 476 476
Capital in excess of par value 14,756 14,756
Treasury stock, at cost
(1996 and 1995 - 18,554 shares) (5,005) (5,005)
Retained deficit (730) (846)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 9,497 9,381
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 9,767 $ 9,754
========= =========
The accompanying notes are an integral part of these financial statements.
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ALASKA NORTHWEST PROPERTIES INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(amounts in thousands except # of shares and
per share data) 1996 1995
--------- ---------
REVENUES
Interest Income $21 $22
Building and Land Rents 43 48
Other Income 0 5
--------- ---------
64 75
EXPENSES
Operating Expenses 83 97
General & Adminstrative Expenses 75 59
Interest Expense 1 1
--------- ---------
159 157
OTHER INCOME (EXPENSE)
Gain on sale of real estate 260 16
Loss on sale of investments (201) (17)
Increase (decrease) in unrealized appreciation
(depreciation) on investments 152 (23)
--------- ---------
211 (24)
--------- ---------
NET INCOME (LOSS) $116 $(106)
========= =========
AVERAGE SHARES OUTSTANDING 29,000 28,893
========= =========
NET INCOME (LOSS) PER COMMON SHARE: $4.00 $(3.67)
========= =========
The accompanying notes are an integral part of these financial statements.
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ALASKA NORTHWEST PROPERTIES INC.
STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1996
Common Stock
--------------------------------------
Capital in
$1.00 Par Excess of Treasury Retained
amounts in thousands) Value Par Value Stock Deficit
- --------------------- --------- ---------- -------- --------
BALANCES AT
DECEMBER 31, 1995 $476 $14,756 $(5,005) $(846)
Net income 116
Treasury shares:
Purchased 0
Sold 0
--------- ---------- -------- --------
BALANCES AT
MARCH 31, 1996 $476 $14,756 $(5,005) $(730)
========= ========== ======== ========
The accompanying notes are an integral part of these financial statements.
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ALASKA NORTHWEST PROPERTIES INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(amounts in thousands) Net increase (decrease) in cash
1996 1995
-------- --------
Cash flows from operating activites:
Net income (loss) $116 $(106)
Adjustments to reconcile net income (loss) to cash
provided by (used in) operating activities:
Depreciation and amortization 28 39
Gain on sale of real estate (260) (16)
Loss on sale of investments 201 17
Increase (decrease) in unrealized depreciation
(appreciation) on investments (152) 23
Decrease in restricted cash 63 0
Other 63 41
-------- --------
Net cash provided by (used in) operating activites $59 $(2)
-------- --------
Cash flows from investing activities:
Proceeds from disposal of assets 0 15
Collection of notes receivable 274 12
Maturing U.S. Government securities 169 170
Acquisition of U.S. Government securities (121) (168)
Addition to property and equipment (1) (24)
(Purchase) Sale of other assets (180) 171
-------- --------
Net cash provided by investing activities $141 $176
-------- --------
Cash flows from financing activities:
Treasury stock sales and purchases 0 9
Decrease in long term debt (9) (8)
Unclaimed dividends 0 2
-------- --------
Net cash provided by (used in) financing activities $(9) $3
-------- --------
Net increase in cash and cash equivalents 191 177
Cash and cash equivalents:
Beginning of period 148 111
-------- --------
End of period $339 $288
======== ========
The accompanying notes are an integral part of these financial statements.
6
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ALASKA NORTHWEST PROPERTIES INC.
NOTES TO FINANCIAL STATEMENTS
1. The 1995 Annual Report on Form 10-K of the Company includes a summary of
significant accounting policies and should be read in conjunction with this Form
10-Q. The financial statements presented herein include all adjustments which
are, in the opinion of management, necessary to present fairly the operating
results for the interim periods reported. The results of operations for the
three months ended March 31, 1996 and 1995, are not necessarily indicative of
the results of operations for the entire year. The financial statements for the
three months ended March 31, 1996 and 1995, are unaudited, condensed and do not
contain all information required by generally accepted accounting principles to
be included in a full set of annual financial statements. Certain
reclassification's have been made to prior year's financial statements to
conform to the current format.
2. The Company reached an agreement with a debtor on an allocation of insurance
proceeds totaling $337,667, received when one of three apartment buildings,
securing a 9% note receivable, was destroyed in a fire in Fairbanks, Alaska.
The debtor received an initial insurance disbursement of $50,000 and applied
half of the proceeds to the mortgage, as required by the Company, in an
agreement dated September 8, 1995. Under the agreement dated February 23, 1996,
the debtor applied $262,667 to the mortgage on the note receivable, while
retaining the remaining $75,000 for improvements to the remaining collateral.
As a result of continued additional investment on the part of the debtor, to
whom the Company sold the property in 1993, the Company recognized a real estate
gain of $260,731, including $13,290 in deferred interest income in the first
quarter, under the full accrual method of accounting for real estate sales in
accordance with FAS 66.
3. The Company's futures and futures options contracts are relatively
short-term, generally 6 months to less than 2 years. At March 31, 1996,
notional (or contract) amounts of unsettled futures and futures options
contracts approximated $950,000 and $1.3 million, relating to precious metals
and stock index derivatives, respectively. The notional amounts do not
represent amounts exchanged, and thus, are not a measure of the Company's
exposure through its use of such financial instruments. The Company realized
a loss of approximately $201,000 from the termination of futures and futures
options contracts for the first quarter of 1996, compared to a realized loss
of approximately $17,000 for the same period in 1995. At March 31, 1996, an
increase in the unrealized appreciation on investments, primarily futures and
futures options, was approximately $152,000, compared to an increase in the
unrealized depreciation of approximately $23,000 at March 31, 1995. The
liability for unsettled futures and options contracts approximated $73,000
and $203,000 at March 31, 1996, and December 31, 1995, respectively.
4. Earnings per share are computed using the weighted-average number of common
shares outstanding.
7
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 364,000
<SECURITIES> 52,554
<RECEIVABLES> 1,363,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 1,328,000
<TOTAL-ASSETS> 9,767,000
<CURRENT-LIABILITIES> 270,000
<BONDS> 0
0
0
<COMMON> 476,409
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 64,000
<CGS> 0
<TOTAL-COSTS> 159,000
<OTHER-EXPENSES> 211,000
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<INCOME-PRETAX> 116,000
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<DISCONTINUED> 0
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<CHANGES> 0
<NET-INCOME> 116,000
<EPS-PRIMARY> 4.00
<EPS-DILUTED> 0
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