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 Quarterly Period Ended: August 31, 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
incorporation or organization) Identification No.)
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 October 15, 1999: 13,774,221
Page 1 of 16 pages
Exhibit Index appears on Page 14
<PAGE>
MGI PROPERTIES
INDEX
PART I: FINANCIAL INFORMATION Page No.
--------
Item 1: Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Earnings 4
Consolidated Statements of Cash Flow 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 14
Signatures 15
Exhibit 11: Computation of Earnings Per Share 16
-2-
<PAGE>
MGI PROPERTIES
PART I -- FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
August 31, 1999 November 30, 1998
(unaudited)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Properties held for sale $ 93,913,000 $365,543,000
Cash and cash equivalents 53,170,000 12,265,000
Short term investments 19,709,000 --
Accounts receivable 722,000 5,040,000
Other assets 4,643,000 11,655,000
- ------------------------------------------------------------------------------------------
$172,157,000 $394,503,000
==========================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Loans payable $ 34,629,000 $130,517,000
Liquidating liabilities 9,780,000 880,000
Other liabilities 3,136,000 6,284,000
- ------------------------------------------------------------------------------------------
Total liabilities 47,545,000 137,681,000
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 (distribution in excess of) net income (97,525,000) 34,780,000
- ------------------------------------------------------------------------------------------
Total shareholders' equity 124,612,000 256,822,000
- ------------------------------------------------------------------------------------------
$172,157,000 $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 Nine Months Ended
--------------------------------- ---------------------------------
August 31, 1999 August 31, 1998 August 31, 1999 August 31, 1998
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCOME
Rental $8,445,000 $18,166,000 $45,899,000 $51,891,000
Interest 2,042,000 111,000 2,325,000 458,000
- ---------------------------------------------------------------------------------------------------------------------------
Total income 10,487,000 18,277,000 48,224,000 52,349,000
- ---------------------------------------------------------------------------------------------------------------------------
EXPENSES
Property operating expenses 2,237,000 4,219,000 10,423,000 12,145,000
Real estate taxes 926,000 2,030,000 5,353,000 6,022,000
Depreciation and amortization 200,000 3,074,000 935,000 8,642,000
Unrealized loss on property held for sale 7,750,000 -- 8,950,000 --
Interest 1,066,000 2,635,000 5,956,000 7,627,000
General and administrative 853,000 999,000 2,706,000 2,713,000
Liquidation plan 10,991,000 430,000 12,774,000 430,000
- ---------------------------------------------------------------------------------------------------------------------------
Total expenses 24,023,000 13,387,000 47,097,000 37,579,000
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) before net gains (13,536,000) 4,890,000 1,127,000 14,770,000
Net gains 137,797,000 350,000 137,654,000 8,375,000
- ---------------------------------------------------------------------------------------------------------------------------
Income before extraordinary item 124,261,000 5,240,000 138,781,000 23,145,000
Extraordinary item - prepayment of debt -- -- (286,000) --
- ---------------------------------------------------------------------------------------------------------------------------
Net income $124,261,000 $5,240,000 $138,495,000 $23,145,000
===========================================================================================================================
PER SHARE DATA
Basic earnings per share $9.02 $0.38 $10.06 $1.69
===========================================================================================================================
Diluted earnings per share $8.55 $0.37 $9.68 $1.65
===========================================================================================================================
Weighted average shares outstanding 13,774,221 13,760,024 13,773,163 13,728,003
===========================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
MGI PROPERTIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
-----------------------------------
August 31, 1999 August 31, 1998
- -----------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $138,495,000 $23,145,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 935,000 8,642,000
Unrealized loss on property held for sale 8,950,000 --
Net gain (137,654,000) (8,375,000)
Extraordinary item 286,000 --
Other 8,555,000 (404,000)
- -----------------------------------------------------------------------------------------
Net cash provided by operating activities 19,567,000 23,008,000
- -----------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of real estate (339,000) (57,140,000)
Additions to real estate (1,299,000) (4,200,000)
Tenant improvements (4,769,000) (2,020,000)
Deferred tenant charges (1,384,000) (1,809,000)
Net proceeds from sales of real estate 407,482,000 22,274,000
Short term investments over 90 days (19,709,000) --
Other 373,000 145,000
- -----------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities 380,355,000 (42,750,000)
- -----------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Additions to loans payable, net -- 46,550,000
Repayment of loans payable (88,026,000) (17,663,000)
Mortgage prepayment penalty (286,000) --
Cash distributions (270,800,000) (12,226,000)
Proceeds from issuance of common shares 95,000 1,063,000
- -----------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (359,017,000) 17,724,000
- -----------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 40,905,000 (2,018,000)
- -----------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
Beginning of period 12,265,000 13,964,000
- -----------------------------------------------------------------------------------------
End of period $53,170,000 $11,946,000
=========================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
-5-
<PAGE>
MGI PROPERTIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(unaudited)
- -------------------------------------------------------------------------------
Additional
Common Paid-In Undistributed
Shares Capital Net Income
- -------------------------------------------------------------------------------
Balance at November 30, 1998 $13,764,000 $208,278,000 $ 34,780,000
Net income -- -- 138,495,000
Cash liquidating distributions -- -- (270,800,000)
Options exercised 10,000 85,000 --
- -------------------------------------------------------------------------------
Balance at August 31, 1999 $13,774,000 $208,363,000 $ (97,525,000)
===============================================================================
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 MGI Properties ("MGI" or 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.
Note 3: 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. On June 22, 1999, the Trust completed the sale of 53 New
England properties totaling 4.4 million square feet and on July 1,
1999 the Trust completed the sale of a 178,600 square foot office
building. The aggregate sales price of these two transactions
totaled $421.4 million, which included $46.8 million of debt secured
by certain properties that was repaid or assumed by the buyers.
Subsequent to the close of the quarter, the Trust completed the sale
of two apartment complexes, totaling 583 units, for an aggregate
sales price of $39.8 million, which included $18.6 million of debt
secured by the properties that was repaid or assumed by the buyers.
Following these sales MGI currently owns 11 properties.
As of the date of this report, MGI has entered into three agreements
to sell four additional properties. The sales agreements are subject
to the customary terms and conditions for transactions of this type,
including the respective purchasers' satisfactory completion of due
diligence, engineering and environmental inspections, and approval
of titles and surveys. Of these four properties, the buyers for
MGI's remaining apartment complex and its two office buildings in
Greenville, South Carolina have completed their due diligence. These
sales are expected to close later in MGI's fourth quarter, although
there can be no assurance that any or all of them will be
successfully completed.
-7-
<PAGE>
MGI PROPERTIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 4: On June 22, 1999, the Board of Trustees declared a distribution of
$19.00 per share. The distribution was paid to shareholders on July
30, 1999. This distribution aggregated $265 million. Since the
October 14, 1998 liquidation vote, liquidating distributions total
$19.66 per share. Under the provisions of the Internal Revenue 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 applied 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.
Note 5: 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. Holders of approximately 1.5 million
options, having an aggregate average exercise price of approximately
$19.84, have made this election. 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. In the third quarter of 1999, MGI recognized
approximately $9.4 million of expense related to this election by
option holders. This amount is included in Liquidation Plan
expenses.
Note 6: Cash applied to interest payments amounted to $1.2 million and $2.6
million for the three-month periods ended August 31, 1999 and 1998,
respectively. At the time of the June 22, 1999 sale of 53 New
England properties, MGI repaid all $36.0 million outstanding on its
line of credit.
Note 7: MGI intends to qualify for the year ending 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 shareholders of the Trust
approved the Plan at a special meeting held on October 14, 1998. 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. 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. Through the nine months ended August 31, 1999,
MGI completed the sale of 55 properties, of which 53 properties, totaling 4.4
million square feet, were located in New England. The aggregate sales price for
these transactions were $422.5 million, which included $46.8 million of mortgage
debt that was repaid or assumed by the buyers. Since the October 14, 1998
liquidation vote, liquidating distributions, including one of $19.00 per share
paid on July 30, 1999, total $19.66 per share.
At August 31, 1999, MGI owned 13 properties, which aggregated 1.1 million
square feet of commercial space and 959 residential apartments. Subsequent to
August 31, 1999, MGI sold two apartment complexes totaling 583 units, for an
aggregate sales price of $39.8 million, which included $18.6 million of debt
secured by the properties that was repaid or assumed by the buyers. Following
these sales, MGI owns 11 properties. The 11 properties are being actively
marketed with four properties currently under agreement. The sales agreements
are subject to the customary terms and conditions, including the respective
purchasers' satisfactory completion of due diligence, engineering and
environmental inspections, and approval of titles and surveys. Of these four
properties, the buyers for MGI's remaining apartment complex and its two office
buildings in Greenville, South Carolina have completed their due diligence.
These sales are expected to close later in MGI's fourth quarter, although there
can be no assurance that all or any of them will be successfully completed.
Liquidity and Capital Resources
Shareholders' equity at August 31, 1999 was $124.6 million, compared to
$256.8 million at November 30, 1998. The decrease primarily reflects the excess
of distributions paid over net income. At August 31, 1999, financial liquidity
was provided by $53.2 million in cash and cash equivalents and by $19.7 million
in short term investments.
-9-
<PAGE>
MGI PROPERTIES
PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Loans payable totaled $34.6 million at August 31, 1999, a net decrease of
$95.9 million compared to $130.5 million at November 30, 1998. During the nine
months ended August 31, 1999, the Trust repaid a $12.3 million mortgage loan
that was secured by an Aurora, Illinois retail center and another $46.8 of
mortgage debt was repaid or assumed by the buyers of certain properties.
Additionally, at the time of the June 22, 1999 sale of 53 New England
properties, MGI repaid the $36.0 million balance outstanding on its $75 million
line of credit and terminated the line. Scheduled loan principal payments
associated with the remaining unsold properties due within 12 months of August
31, 1999 total $0.3 million. MGI has no debt which is scheduled to mature prior
to the anticipated completion of the Plan.
Cash requirements during the balance of fiscal 1999 may 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 anticipates funding approximately $0.4
million of capital and tenant improvement projects associated with the remaining
unsold properties. MGI anticipates meeting these obligations through the short
term investments, cash and cash equivalents held at August 31, 1999 and through
the net sale proceeds of its remaining assets.
Results of Operations
The sale of 54 properties pursuant to the Plan during the third quarter of
1999 created a fundamental transformation in MGI and is the primary factor in
explaining the changes in operating results when 1999 is compared to prior
periods. Net income for the fiscal quarter ended August 31, 1999 was $124.3
million, or $9.02 per share (basic), as compared to $5.2 million, or $.38 per
share (basic), in the corresponding quarter of 1998. Net income for the nine
months ended August 31, 1999, was $138.5 million, or $10.06 per share (basic),
as compared to $23.1 million, or $1.69 per share (basic), a year ago. Included
in the 1999 third quarter net income were net gains of $137.8 million, as
compared to $0.4 million recognized a year ago. In connection with the 1999
sales, MGI incurred a variety of expenses including legal, transfer fees, state
and other taxes, broker fees and fees to its financial advisor and property
sales agent. For the nine months ended August 31, 1999, net gains approximated
$137.7 million as compared to $8.4 million recognized from the sale of seven
properties in the same nine-month period in 1998.
Income before net gains and extraordinary item was $1.1 million and $14.8
million for the nine months ended August 31, 1999 and 1998, respectively. The
$13.6 million and the $18.4 million decreases in income before net gain and
extraordinary item when the nine months and the quarter ended August 31, 1999,
respectively, are compared to the same periods in fiscal 1998 are directly
attributable to the disposition of the 54 properties in the third quarter of
1999. These changes, when the third quarter of 1999 is compared to the third
quarter of 1998, primarily resulted from the $10.6 million increase in
Liquidation Plan expenses, the $7.8 million recognized as an unrealized loss on
properties held for sale and a $6.6 million decrease ($5.3 million in 1999
versus $11.9 million in 1998) in property operating income (which is defined as
rental income less property operating expenses and real estate taxes), which
were partially offset by a $1.6 million reduction in interest expense, a $2.9
million decrease in depreciation and amortization and a $1.9 million increase in
interest income.
-10-
<PAGE>
MGI PROPERTIES
PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
The $10.9 million in Liquidation Plan expenses is primarily comprised of
$9.4 million related to the election made by option holders in lieu of
exercising their options that was recognized and accrued and $1.4 million of
employee severance compensation. In the third quarter of 1999, the Trust
recognized an unrealized loss of $7.8 million, the amount by which the carrying
value of certain properties exceeded their estimated fair value, according to
management's estimate. This reevaluation occurred in connection with the Trust's
decision to sell its remaining properties in single property sales and its
evaluation of changing market conditions. Also reflecting the 1999 third quarter
sale of 54 properties was the decrease in interest expense of $1.6 million due
primarily to the approximate $96.1 million of debt that was repaid or assumed in
connection with the sale of properties and higher interest income due to the
amount of net sale proceeds held by MGI pending distribution to shareholders.
Moreover, depreciation and amortization decreased by $2.9 million, as the Trust
stopped depreciating its real estate assets on October 14, 1998, the date
shareholders approved the Plan.
The change in property operating income reflects a 7.9%, or a $0.2 million
increase in income from "same store" properties owned throughout the third
quarters of both fiscal 1999 and 1998, offset by the income effect of $6.9
million due to the sale of properties. With respect to the comparable
properties, which, at August 31, 1999 totaled only 13 properties, the increase
in property operating income primarily resulted from increased revenues at an
Aurora, Illinois shopping center due to a lower vacancy rate.
Change in Property Operating Income for Quarter Ended August 31, 1999 versus
August 31, 1998
Properties Held 1999 and 1998
Both Fiscal Years Sales Net Change
----------------- ------------- ----------
Office $(25,000) $(3,011,000) $(3,036,000)
Industrial -- (1,829,000) (1,829,000)
Office R&D -- (1,920,000) (1,920,000)
Apartment 46,000 -- 46,000
Retail 222,000 (44,000) 178,000
Land and Other (2,000) (71,000) (73,000)
-------- ----------- ------------
$241,000 $(6,875,000) $(6,634,000)
======== ============ ============
The increase in property operating income of $0.9 million, or 10.0%, from
the 13 properties held in both the nine months ended August 31, 1999 and 1998,
was primarily due to leasing completed at the retail properties and increased
rental income at the apartment complexes. Average occupancy for both nine-month
periods was approximately 95%.
-11-
<PAGE>
MGI PROPERTIES
PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Schedule of portfolio leasing as of August 31, 1999 is as follows:
Property Total Percentage
Type Square Feet Leased
---- ----------- ------
Retail 715,200 98.0%
Office 299,700 87.4%
---------
Total 1,014,900 94.8%
=========
There are no significant fiscal 1999 lease expirations associated with the
Trust's remaining unsold properties.
Funds from operations ("FFO") totaled $5.4 million in the third quarter of
fiscal 1999, compared to $8.3 million in the corresponding quarter of 1998. The
approximate $2.9 million decrease is attributable to the property sales that
occurred in the third quarter of 1999. FFO for the nine months ended August 31,
1999 and 1998 was $23.7 million in each period. 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:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
August 31, 1999 August 31,1998 August 31, 1999 August 31, 1998
--------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
Net income $124,261,000 $5,240,000 $138,495,000 $23,145,000
Plus net loss/(less net gain)
and extraordinary item (137,797,000) (350,000) (137,368,000) (8,375,000)
Plus unrealized loss on
property held for sale 7,750,000 -- 8,950,000 --
Plus building depreciation -- 2,347,000 -- 6,631,000
Plus tenant improvement and
commission amortization 177,000 681,000 861,000 1,880,000
Plus liquidation plan expenses 10,991,000 430,000 12,774,000 430,000
---------- ---------- ----------- -----------
FFO $5,382,000 $8,348,000 $23,712,000 $23,711,000
========== ========== =========== ===========
</TABLE>
-12-
<PAGE>
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. Such factors include, among other things, the
risks of future action or inaction by the Board of Trustees with respect to the
Plan (and the actual results thereof), including the possibility of litigation
pertaining thereto; the net realizable value and the timing of the sale of the
Trust's remaining properties during the course of the liquidation; the amount
and timing of liquidating distributions; changes in national and local economic
and financial market conditions; the successful completion of the pending sales
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."
-13-
<PAGE>
MGI PROPERTIES
PART II - OTHER INFORMATION
Item 1: Legal Proceedings: Not applicable.
Item 2: Changes in Securities and Use of Proceeds: Not applicable.
Item 3: Defaults upon Senior Securities: Not applicable.
Item 4: None
Item 5: Other Information: Not applicable.
Item 6: Exhibits and Reports on Form 8-K:
a) Exhibits:
Part I - Exhibit 11 -- Computation of Earnings Per Share (see
page 16).
b) Reports on Form 8-K: Dated June 22, 1999, filed on June 23, 1999
Dated June 22, 1999, filed on July 7, 1999
-14-
<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: October 15, 1999 /s/ Phillip C. Vitali
---------------- --------------------------------
Phillip C. Vitali
Executive Vice President and Treasurer
(Principal Financial and Accounting Officer)
-15-
Exhibit 11
MGI PROPERTIES
PART I - EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended August 31, Nine Months Ended August 31,
----------------------------- ----------------------------
1999 1998 1999 1998
<S> <C> <C> <C> <C>
BASIC
Net income $124,261,000 $5,240,000 $138,495,000 $23,145,000
=================================================================================================================================
Weighted average number of shares outstanding during the period 13,774,221 13,760,024 13,773,163 13,728,003
=================================================================================================================================
Basic earnings per share $9.02 $0.38 $10.06 $1.69
=================================================================================================================================
DILUTED EARNINGS PER SHARE
Net income $124,261,000 $5,240,000 $138,495,000 $23,145,000
=================================================================================================================================
Weighted average number of shares outstanding assuming full dilution 14,535,038 14,098,903 14,310,825 14,026,394
=================================================================================================================================
Diluted earnings per share $8.55 $0.37 $9.68 $1.65
=================================================================================================================================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-END> AUG-31-1999
<CASH> 53,170
<SECURITIES> 19,709
<RECEIVABLES> 722
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 4,643
<PP&E> 93,913
<DEPRECIATION> 000
<TOTAL-ASSETS> 172,157
<CURRENT-LIABILITIES> 12,916
<BONDS> 34,629
<COMMON> 13,774
000
000
<OTHER-SE> 110,838
<TOTAL-LIABILITY-AND-EQUITY> 172,157
<SALES> 8,445
<TOTAL-REVENUES> 10,487
<CGS> 000
<TOTAL-COSTS> 22,957
<OTHER-EXPENSES> 000
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 1,066
<INCOME-PRETAX> (13,536)
<INCOME-TAX> 000
<INCOME-CONTINUING> (13,536)
<DISCONTINUED> 137,797
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> 124,261
<EPS-BASIC> 9.02
<EPS-DILUTED> 8.55
</TABLE>
