UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Period Ended: February 28, 1999 Commission File Number: 1-6833
----------------- ------
MGI PROPERTIES
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-6268740
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Winthrop Square, Boston, Massachusetts 02110
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 422-6000
----------------------------
N/A
- -------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
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
---- ----
Common shares outstanding as of April 14, 1999: 13,774,221
<PAGE>
MGI PROPERTIES
INDEX
<TABLE>
<CAPTION>
PART I: FINANCIAL INFORMATION Page No.
--------
<S> <C>
Item 1: Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Earnings 4
Consolidated Statements of Cash Flows 5
Consolidated Statements of Changes in Shareholders' Equity 6
Notes to Consolidated Financial Statements 7
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II: OTHER INFORMATION
Items 1 - 6 15
Signatures 16
</TABLE>
-2-
<PAGE>
MGI PROPERTIES
PART I -- FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
February 28, 1999 November 30, 1998
(unaudited)
- ------------------------------------------------------------------------------------------------------------
ASSETS
Real estate:
<S> <C> <C>
Properties held for sale $365,626,000 $365,543,000
Cash and cash equivalents 11,538,000 12,265,000
Accounts receivable 4,414,000 5,040,000
Other assets 11,437,000 11,655,000
- ------------------------------------------------------------------------------------------------------------
$393,015,000 $394,503,000
============================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Loans payable $125,041,000 $130,517,000
Other liabilities 8,165,000 7,164,000
- ------------------------------------------------------------------------------------------------------------
Total liabilities 133,206,000 137,681,000
Shareholders' equity:
Common shares -- $1 par value; 17,500,000 shares authorized;
13,774,221 issued (13,764,221 at November 30, 1998) 13,774,000 13,764,000
Additional paid-in capital 208,363,000 208,278,000
Undistributed net income 37,672,000 34,780,000
- ------------------------------------------------------------------------------------------------------------
Total shareholders' equity 259,809,000 256,822,000
- ------------------------------------------------------------------------------------------------------------
$393,015,000 $394,503,000
============================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
<PAGE>
MGI PROPERTIES
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------------------
February 28, 1999 February 28, 1998
- ------------------------------------------------------------------------------------------------------
INCOME
<S> <C> <C>
Rental $18,667,000 $16,278,000
Interest 144,000 210,000
- ------------------------------------------------------------------------------------------------------
Total income 18,811,000 16,488,000
- ------------------------------------------------------------------------------------------------------
EXPENSES
Property operating expenses 4,106,000 3,926,000
Real estate taxes 2,215,000 1,938,000
Depreciation and amortization 359,000 2,666,000
Interest 2,560,000 2,349,000
General and administrative 827,000 856,000
Liquidation plan expenses 878,000 -
- ------------------------------------------------------------------------------------------------------
Total expenses 10,945,000 11,735,000
- ------------------------------------------------------------------------------------------------------
Income before net gains 7,866,000 4,753,000
Net (loss) gains on sale of real estate assets (143,000) 6,075,000
- ------------------------------------------------------------------------------------------------------
Income before extraordinary item 7,723,000 10,828,000
Extraordinary item - prepayment of debt (286,000) -
- ------------------------------------------------------------------------------------------------------
Net income $ 7,437,000 $10,828,000
======================================================================================================
PER SHARE DATA
Basic earnings $0.54 $0.79
======================================================================================================
Diluted earnings $0.52 $0.78
======================================================================================================
Weighted average shares outstanding 13,770,999 13,677,429
======================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
MGI PROPERTIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------------
February 28, 1999 February 28, 1998
- -----------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 7,437,000 $10,828,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 359,000 2,666,000
Net loss (gains) on sale of real estate assets 143,000 (6,075,000)
Extraordinary item 286,000 -
Other 1,909,000 377,000
- -----------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 10,134,000 7,796,000
- -----------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of real estate (339,000) (10,219,000)
Additions to real estate (472,000) (955,000)
Tenant improvements (607,000) (1,320,000)
Deferred tenant charges (364,000) (648,000)
Net proceeds from sales of real estate 1,190,000 13,940,000
Other (58,000) (1,110,000)
- -----------------------------------------------------------------------------------------------------------
Net cash used in investing activities (650,000) (312,000)
- -----------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Additions to loans payable, net 7,500,000 11,550,000
Repayment of loans payable (12,975,000) (8,705,000)
Mortgage prepayment penalty (286,000) -
Cash distributions (4,545,000) (3,971,000)
Proceeds from issuance of common shares 95,000 455,000
- -----------------------------------------------------------------------------------------------------------
Net cash used in financing activities (10,211,000) (671,000)
- -----------------------------------------------------------------------------------------------------------
Net (decrease)/increase in cash and short-term investments (727,000) 6,813,000
- -----------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
Beginning of period 12,265,000 13,964,000
- -----------------------------------------------------------------------------------------------------------
End of period $11,538,000 $20,777,000
===========================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
-5-
<PAGE>
MGI PROPERTIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Additional
Common Paid-In Undistributed
Shares Capital Net Income
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at November 30, 1998 $13,764,000 $208,278,000 $34,780,000
Net income -- -- 7,437,000
Cash liquidating distributions -- -- (4,545,000)
Options exercised and other 10,000 85,000 --
- ----------------------------------------------------------------------------------------------
Balance at February 28, 1999 $13,774,000 $208,363,000 $37,672,000
==============================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
-6-
<PAGE>
MGI PROPERTIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1: The results of the interim period are not necessarily indicative of
results to be expected for the entire fiscal year. The figures
contained in this interim report are unaudited and may be subject to
year-end adjustments. Certain prior year amounts have been reclassified
to conform with the current year presentation. In the opinion of
management, all adjustments necessary for a fair presentation of
financial position and results of operations have been included and
such adjustments include only the normal accruals.
Note 2: The shareholders of the Trust approved a Plan of Complete
Liquidation and Termination of the Trust (the "Plan") at a special
meeting held on October 14, 1998. The Plan calls for the sale of all of
the Trust's assets. Net sales proceeds and available cash will be used
to satisfy existing debts and obligations with remaining funds to be
distributed to shareholders. Although it is expected that the Trust
will continue to qualify as a REIT for the period prior to the
distribution of MGI's assets to shareholders, no assurance can be given
that the Trust will not lose or terminate its status as a REIT as a
result of unforeseen circumstances.
Note 3: On March 23, 1999, the Board of Trustees declared a quarterly
distribution of $.33 per share, payable April 16, 1999, to shareholders
of record April 6, 1998. This distribution will aggregate $4.5 million.
Under the provisions of the Code, distributions made within 24 months
of the adoption of the Plan are considered liquidating distributions
and will not be dividend income when received by shareholders.
Distributions in liquidation are first used to reduce a shareholder's
tax basis in his or her shares of MGI with the excess, if any,
generally constituting a capital gain, short or long term, as
applicable. Inclusive of the $.33 distribution to be made on April 16,
1999 and the $.33 distribution paid in January 1999, distributions
since the October 14, 1998 liquidation vote will total $.66 per share.
Note 4: With shareholder approval of the Plan on October 14, 1998, the Trust
reclassified its real estate assets to "properties held for sale" and
on that date ceased depreciation of the assets and reclassified
accumulated depreciation and amortization to the appropriate
categories. Subsequent to the close of the quarter, the Trust entered
into an agreement to sell 53 properties totaling 4.4 million square
feet. The sale is subject to the customary terms and conditions for a
transaction of this size, including the purchaser's satisfactory
completion of due diligence, engineering and environmental inspections,
and approval of title and surveys. This sale is expected to close in
MGI's third quarter, although there can be no assurance that it will be
successfully completed. During the first quarter of 1999, the Trust
completed the sale of a Hagerstown, Maryland retail center and
recognized a net loss of $143,000.
Note 5: Cash applied to interest payments amounted to $2.6 million and $2.3
million for the three-month periods ended February 28, 1999 and
February 28, 1998, respectively.
-7-
<PAGE>
MGI PROPERTIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Continued)
Note 6: Following shareholder approval of the Plan on October 14, 1998,
option holders, in accordance with their option agreements, have
elected, as an alternative to exercising their options, to receive in
cash the difference between the per share option exercise price and the
aggregate per share net liquidation proceeds to be distributed to
shareholders. The estimated expense associated with these elections,
which is the difference between the per share option exercise price and
the aggregate per share net liquidation proceeds expected to be
distributed to shareholders, will be recognized upon declaration of the
related liquidating distributions. Holders of approximately 1.5 million
options having an aggregate average exercise price of approximately
$19.84 have made this election.
Note 7: MGI intends to qualify for the year ended November 30, 1999 as a
real estate investment trust under the provisions of Sections 856-860
of the Internal Revenue Code of 1986, as amended. Accordingly, no
provision has been made for Federal income taxes.
-8-
<PAGE>
MGI PROPERTIES
PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
- --------
MGI is a self-administered equity REIT that is operating under a Plan
of Complete Liquidation and Termination of the Trust (the "Plan"). The Trust
owns and operates a diversified portfolio of income-producing real estate
consisting of 65 commercial properties and three multi-family residential
properties. The commercial portfolio consists of 5.6 million square feet, 87% of
which is comprised of office, office/R&D and industrial properties. The
multi-family properties consist of three residential communities aggregating 959
units. At February 28, 1999, the commercial and residential properties were
97.4% and 91.2% leased, respectively. Since 1992, the Trust has focused on the
commercial segment of the real estate market, specifically industrial and office
properties located in New England. At February 28, 1999, 66%, based upon cost,
of MGI's real estate assets were located in New England.
The shareholders of the Trust approved the Plan at a special meeting
held on October 14, 1998. The Plan is discussed in the Trust's Form 10-K for the
year ended November 30, 1998, and in the definitive Proxy Statement dated
September 10, 1998, including risk factors, income tax consequences and certain
other considerations. As part of that discussion, management estimated that
substantially all of the properties would be sold within 12 to 15 months of
shareholder adoption of the Plan. Subsequent to the close of the quarter, the
Trust entered into an agreement to sell 53 properties totaling 4.4 million
square feet. The sale is subject to the customary terms and conditions for a
transaction of this size, including the purchaser's satisfactory completion of
due diligence, engineering and environmental inspections, and approval of title
and surveys. This sale is expected to close in MGI's third quarter, although
there can be no assurance that it will be successfully completed. To the extent
the sale of the 53 properties closes in the third quarter as currently
anticipated, a significant portion of the sale proceeds after expenses,
repayment of secured and corporate debt, and the establishment of appropriate
reserves, can be expected to be distributed in the third quarter. As of the date
hereof, management believes that the purchase price for the sale of these
properties, coupled with management's current estimate of sale prices and other
assumptions with respect to the remainder of the portfolio, is expected to
result in aggregate net liquidation proceeds of between $29 and $30 per share,
after all fees and liquidation costs have been paid; however, no assurance can
be given as to the timing of distributions or that per share net cash proceeds
will be within this range or will reach this range. During the quarter, the
Trust completed the sale of a Hagerstown, Maryland retail center and recognized
a net loss of $143,000.
As of February 28, 1999, the Trust's real estate investments were
located by geographic region as follows:
-9-
<PAGE>
MGI PROPERTIES
PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
<TABLE>
<CAPTION>
% of
Portfolio
% of Based on 1999
Square Feet of Portfolio Property
Number of Commercial Apartment Based Operating
Location Properties Property Units on Cost Income
- -------- ---------- -------- ----- ------- ------
<S> <C> <C> <C> <C> <C>
New England 55 4,522,000 -- 66.0% 71.8%
Mid-West 5 442,500 722 17.8% 14.2%
Southeast 5 318,800 -- 6.8% 5.2%
Mid-Atlantic 3 325,300 237 9.4% 8.8%
-- --------- --- ------ ------
Total Portfolio 68 5,608,600 959 100.0% 100.0%
== ========= === ====== ======
</TABLE>
Liquidity and Capital Resources
- -------------------------------
Shareholders' equity at February 28, 1999 was $259.8 million, compared
to $256.8 million at November 30, 1998. The increase primarily reflects the
excess of net income over distributions paid in the first quarter. At February
28, 1999, financial liquidity was provided by $11.5 million in cash and cash
equivalents and by unused lines of credit aggregating $32.5 million.
Loans payable totaled $125.0 million at February 28, 1999, a net
decrease of $5.5 million compared to $130.5 million at November 30, 1998. During
the quarter, the Trust repaid a $12.3 million mortgage loan that was secured by
an Aurora, Illinois retail center and incurred a $0.3 million penalty which was
recorded as an extraordinary item. In addition, the Trust drew $7.5 million from
its line of credit primarily to fund the loan prepayment. The balance of the
change represents scheduled principal payments. Scheduled loan principal
payments due within 12 months of February 28, 1999 total $2.9 million. MGI
believes it will continue to be able to extend or refinance maturing mortgage
loans upon satisfactory terms.
Cash requirements during the balance of fiscal 1999 include
distributions to shareholders, capital and tenant improvements and other leasing
expenditures required to maintain MGI's occupancy levels and other investment
undertakings. Currently, the Trust is contractually committed to approximately
$3.5 million of capital and tenant improvement projects, which are anticipated
to be completed during the next two fiscal quarters.
-10-
<PAGE>
MGI PROPERTIES
PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
In connection with the Plan, MGI anticipates incurring a variety of
costs and fees including costs related to sales, fees to advisors and other
professionals, severance compensation, payments to holders of stock options, and
other expenses related to liquidation. Among the costs is an estimated $4.2
million of employee severance compensation, which includes a base and incentive
component. Payment of employee severance compensation is contingent upon the
employee's continuing employment and is being recognized as an expense over a
15-month period beginning October 14, 1998. The Trust has entered into
agreements with a financial advisor and an exclusive property sales agent. Each
agreement provides for a fee of $1.5 million to be paid in the event of a
complete liquidation or merger, with a minimum of $400,000 to be paid to each.
In addition, the Trust has agreed to reimburse their out-of-pocket expenses up
to $650,000 in the aggregate, of which $132,000 has been paid to date.
Sources of funds in the future are expected to be derived from property
operations, sales of properties, mortgaging or refinancing of existing mortgages
on properties, borrowing under MGI's lines of credit and MGI's portfolio of
investment securities. MGI believes the combination of available cash and cash
equivalents, the value of MGI's unencumbered properties and other resources are
sufficient to meet its liquidity requirements while implementing the Plan.
Results of Operations
- ---------------------
Net income for the quarter ended February 28, 1999 was $7,437,000, or
$.54 per share, compared to $10,828,000, or $.79 per share, for the first
quarter one year ago. Net income in the first quarter of 1999 included a
$143,000 loss from the sale of one property, a $286,000 loan prepayment fee and
liquidation-related expenses of $878,000. Pursuant to the required accounting
for properties held for sale, there was no depreciation or amortization of real
estate assets recognized in the first quarter of 1999. Included in 1998 first
quarter net income were net gains of $6,075,000, from four property sales.
Funds from operations ("FFO") totaled $9.1 million in the first quarter
of fiscal 1999, compared to $7.4 million in the corresponding quarter of 1998.
MGI calculates FFO in conformity with the NAREIT definition which is net income
(computed in accordance with generally accepted accounting principles),
excluding gains (or losses) from debt restructuring and sales of property, plus
depreciation and amortization, and after adjustments for unconsolidated
partnerships and joint ventures, and for significant non-recurring events (such
as Liquidation Plan expenses). MGI believes FFO is an appropriate supplemental
measure of operating performance. The following is a reconciliation of net
income to FFO:
-11-
<PAGE>
MGI PROPERTIES
PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
<TABLE>
<CAPTION>
Three Months Ended
------------------
February 28, 1999 February 28, 1998
----------------- -----------------
<S> <C> <C>
Net income $7,437,000 $10,828,000
Plus net loss/(less net gain) and extraordinary item 429,000 (6,075,000)
Plus building depreciation - 2,035,000
Plus tenant improvement and
commission amortization 334,000 590,000
Plus liquidation plan expenses 878,000 -
---------- -----------
FFO $9,078,000 $ 7,378,000
========== ===========
</TABLE>
The $3.1 million increase in income before net gains, when 1999 is
compared to 1998, resulted from a $1.9 million increase ($12.3 million versus
$10.4 million, respectively) in property operating income (which is defined as
rental income less property operating expenses and real estate taxes), offset by
increases in interest and liquidation plan expenses. Moreover, depreciation and
amortization decreased by $2.3 million, as the Trust stopped depreciating its
real estate assets on October 14, 1998, the date shareholders approved the Plan.
The increase in interest expense of $0.2 million was due primarily to debt
incurred in connection with the acquisition of properties in 1998. Liquidation
plan expenses of $878,000 primarily reflects employee severance costs which are
being recognized over a 15-month period beginning with the approval of the Plan
The change in 1999 FFO when compared to 1998 is attributable to the same factors
that affected income before net gains in such periods, excluding the effect of
changes in depreciation and amortization and liquidation plan expenses.
The change in property operating income from 1998 to 1999 reflects
improved results from comparable properties (which is defined as properties
owned throughout both 1998 and 1999), as well as the effect of the sale and
acquisition of properties, is detailed below:
<TABLE>
<CAPTION>
Net Change in
Properties Held 1998 1999 and 1998 Property Operating
Property Type Both Years Acquisitions Sales Income
------------- ---------- ------------ ------------- ------------------
<S> <C> <C> <C> <C>
Office $ 248,000 $ 898,000 $ (54,000) $1,092,000
Office/R&D 382,000 447,000 -- 829,000
Industrial 182,000 61,000 (138,000) 105,000
Retail 210,000 -- (152,000) 58,000
Multi-family 72,000 -- (316,000) (244,000)
Management and other 95,000 -- -- 95,000
---------- ---------- --------- ----------
Total $1,189,000 $1,406,000 $(660,000) $1,935,000
========== ========== ========= ==========
</TABLE>
-12-
<PAGE>
MGI PROPERTIES
PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
The 12.3% increase in "same store" property operating income from the
54 comparable properties reflects increased rental revenue from higher rents due
to leasing activity and higher overall occupancy than the comparable quarter in
fiscal 1998. Rental rates for leases signed during 1999 are expected to increase
by approximately 48% compared to the previous rents in place. Rental revenue has
also been positively impacted by the portfolio's overall leased rate which
increased from 93.4% at February 28, 1998 to 96.6% at February 28, 1999. The
Trust's property management operation contributed an additional $95,000 for the
quarter, reflecting the benefit of 4.1 million square feet of property under
management in 1999.
Commercial leases signed in 1999, the percentage of the commercial
properties leased and scheduled commercial lease expirations in 1999 (in square
feet) are as follows:
<TABLE>
<CAPTION>
Scheduled Expirations
Property Percentage 1999 Remaining
Type Leased Leasing 1999
---------- ------------- --------- ---------------------
<S> <C> <C> <C>
Office 96.1% 49,000 88,700
Industrial 97.7% 44,900 145,800
Office/R&D 98.0% 46,100 130,400
Retail 99.1% 25,500 25,000
---- ------ -------
Total Commercial 97.4% 165,500 389,900
===== ======= =======
</TABLE>
Scheduled expirations in 1999 represent 7.0% of the Trust's total
commercial square feet at February 28, 1999, compared to scheduled expirations
in 1998 of 327,100 square feet, which represented 6% of the Trust's total
commercial square feet at February 28, 1998.
The remaining fiscal 1999 commercial lease expirations are scheduled as
follows: 228,400 square feet in the second quarter, 107,000 square feet in the
third quarter and 54,500 square feet in the fourth quarter. In the Trust's New
England portfolio, leases relating to 314,000 square feet are scheduled to
expire during the balance of 1999, which management believes are subject to
rents that are generally below the current market. Included in the 1999
expirations is a 105,500 square-foot lease, which space the tenant is scheduled
to vacate at the end of April 1999, at an Andover, Massachusetts office
building. The Trust is currently seeking a tenant for such space.
-13-
<PAGE>
MGI PROPERTIES
PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Forward Looking Statements
- --------------------------
Statements made or incorporated in this Report may contain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934,
as amended. These forward-looking statements are dependent on a number of
factors which could cause actual results to differ materially from those
expressed or implied in the forward-looking statements. This Report contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements are dependent on a number of factors which could
cause actual results to differ materially from those expressed or implied in the
forward-looking statements. Such factors include, among other things, the risks
of future action or inaction by the Board of Trustees with respect to the Plan
of Liquidation (and the actual results thereof), including the possibility of
litigation pertaining thereto; the net realizable value of the Trust's
properties in the event the Plan of Liquidation is implemented; changes in
national and local economic and financial market conditions; the successful
completion of the sale described in this Report, as well as those factors set
forth in MGI's Form 10-K for the year ended November 30, 1998, including those
set forth under "Forward-Looking Statements," "Other" and Item 1 - "Adoption of
Liquidation Plan."
-14-
<PAGE>
MGI PROPERTIES
PART II - OTHER INFORMATION
Item 1: Legal Proceedings: Not applicable.
Item 2: Changes in Securities: Not applicable.
Item 3: Defaults upon Senior Securities: Not applicable.
Item 4: Submission of Matters to a Vote of Security Holders: None
Item 5: Other Information: Not applicable.
Item 6: Exhibits and Reports on Form 8-K:
a) Exhibit:
Exhibit 27.1 - Financial Data Schedule
b) Reports on Form 8-K: None
-15-
<PAGE>
MGI PROPERTIES
SIGNATURES
Pursuant to the requirements to 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.
Date: April 14, 1999 /s/ Phillip C. Vitali
-------------- --------------------------------------
Phillip C. Vitali
Executive Vice President and Treasurer
(Chief Financial Officer)
Date: April 14, 1999 /s/ David P. Morency
-------------- --------------------------------------
David P. Morency
Controller
(Principal Accounting Officer)
-16-
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000068330
<NAME> MGI PROPERTIES
<MULTIPLIER> 1,000
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-END> FEB-28-1999
<EXCHANGE-RATE> 1
<CASH> 11,538
<SECURITIES> 000
<RECEIVABLES> 4,414
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 11,437
<PP&E> 365,626
<DEPRECIATION> 000
<TOTAL-ASSETS> 393,015
<CURRENT-LIABILITIES> 8,165
<BONDS> 125,041
000
000
<COMMON> 13,774
<OTHER-SE> 246,035
<TOTAL-LIABILITY-AND-EQUITY> 393,015
<SALES> 18,667
<TOTAL-REVENUES> 18,811
<CGS> 000
<TOTAL-COSTS> 8,385
<OTHER-EXPENSES> 000
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 2,560
<INCOME-PRETAX> 7,866
<INCOME-TAX> 000
<INCOME-CONTINUING> 7,866
<DISCONTINUED> (143)
<EXTRAORDINARY> (286)
<CHANGES> 000
<NET-INCOME> 7,437
<EPS-PRIMARY> .54
<EPS-DILUTED> .52
</TABLE>
