SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 10-K/A
AMENDMENT NO. 1
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 0-13754
NOONEY REALTY TRUST, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Missouri
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
43-1339136
- --------------------------------------------------------------------------------
(I.R.S. Employer Identification No.)
7701 Forsyth Boulevard, St. Louis, Missouri 63105
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 863-7700
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- ------------------------------------- -----------------------------------------
None Not Applicable
Securities registered pursuant to Section 12(g) of the Act:
Common Stock - $1.00 Par Value
- --------------------------------------------------------------------------------
(Title of Class)
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 [ ].
<PAGE>
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.
NOONEY REALTY TRUST, INC.
Date: April 17, 1997 By: /s/ Gregory J. Nooney, Jr.
------------------------------------
Gregory J. Nooney, Jr.
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below on April 17, 1997, by the following persons on behalf of
the Registrant and in the capacities indicated.
/s/ Gregory J. Nooney, Jr.
----------------------------------------
Gregory J. Nooney, Jr.
Chief Executive Officer
and Director
/s/ Patricia A. Nooney
----------------------------------------
Patricia A. Nooney
President, Secretary,
Treasurer and Director
<PAGE>
/s/ Gene K. Beare
----------------------------------------
Gene K. Beare
Director
/s/ Bruce P. Hayden
----------------------------------------
Bruce P. Hayden
Director
/s/ James P. Ingram
----------------------------------------
James P. Ingram
Director
/s/ Robert E. Kresko
----------------------------------------
Robert E. Kresko
Director
/s/ John R. Hart .
----------------------------------------
John R. Hart
Director
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------------------------------------------------------------
13 1996 Annual Report to Shareholders. Except for those portions
expressly incorporated by reference in this Form 10-K, the 1996
Annual Report to Shareholders is furnished for the information of
the Commission and is not to be deemed "filed" as part of this
Form 10-K.
EXHIBIT 13
==============================================
NOONEY
----------------------------------------------
REALTY
----------------------------------------------
TRUST
==============================================
A Real Estate Investment Trust
1996
ANNUAL
REPORT
<PAGE>
===============================================================================
NOONEY LOGO
NOONEY REALTY TRUST, INC.
1996 ANNUAL REPORT
CONTENTS PAGE
- -------- ----
Financial Highlights........................................ Inside
Front Cover
The Trust................................................... 1
Market Information.......................................... 1
Dividends................................................... 1
Letter to Shareholders...................................... 2
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 3
Financial Statements and Notes.............................. 7
Directors and Officers...................................... 15
Shareholder Information..................................... 16
------------------------------------
<TABLE>
SELECTED FINANCIAL DATA
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
FOR THE YEAR: 1996 1995 1994 1993 1992
- ------------- ---- ---- ---- ---- ----
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
<S> <C> <C> <C> <C> <C>
Rental and other income......................... $ 3,017,982 $ 2,861,293 $ 2,719,324 $ 2,761,766 $ 2,934,178
Net income...................................... 216,538 185,597 42,217 163,001 284,994
Per share................................... 0.25 0.21 0.05 0.19 0.33
Funds from operations<F*>....................... 974,476 906,637 749,211 880,578 937,937
Distributions declared.......................... 693,299 563,307 424,646 433,312 528,641
Per share................................... 0.80 0.65 0.49 0.50 0.61
Paid in current year:
Taxable to shareholders................. 0.40 0.31 0.22 0.24 0.51
Return of capital....................... 0.40 0.34 0.37 0.16 0.10
Declared 1993, paid in January 1994....... (0.10) 0.10
AT YEAR END:
- ------------
Total assets.................................... $15,481,638 $16,009,017 $16,504,068 $16,761,085 $17,094,706
Investment property - net....................... 14,214,620 14,811,351 15,219,284 15,605,700 16,035,756
Mortgage note payable........................... 4,830,236 4,912,421 4,988,006 4,844,598 4,915,369
Shareholders' equity............................ 10,244,455 10,721,216 11,098,926 11,481,355 11,751,666
Number of shares outstanding.................... 866,624 866,624 866,624 866,624 866,624
<FN>
- --------
<F*>Represents net income adjusted for depreciation and amortization.
See Management's Discussion and Analysis for discussion of comparability of items.
</TABLE>
<PAGE>
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THE TRUST
Nooney Realty Trust, Inc. is a corporation formed on June 14, 1984, to make
equity investments in income-producing real properties, primarily commercial and
light industrial properties. The Trust has invested in three properties: The
Atrium at Alpha Business Center, an office building in Bloomington, Minnesota;
the Applied Communications, Inc. Building, an office building in Omaha,
Nebraska; and the Franklin Park Distribution Center, a warehouse and
distribution facility in suburban Chicago, Illinois. Since 1985 the Trust has
qualified as a real estate investment trust ("REIT") under the Internal Revenue
Code.
------------------------------------
MARKET INFORMATION
The Company's common stock trades on The Nasdaq Stock Market under the
symbol NRTI. The Nasdaq high and low prices for the shares during 1995 and 1996
were as follows:
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1995
First Quarter................................. $ 7.50 $6.25
Second Quarter................................ $ 7.00 $6.50
Third Quarter................................. $ 9.50 $6.75
Fourth Quarter................................ $ 8.00 $7.00
1996
First Quarter................................. $ 9.00 $7.25
Second Quarter................................ $ 9.00 $8.00
Third Quarter................................. $10.23 $8.00
Fourth Quarter................................ $10.50 $9.25
</TABLE>
As of February 1, 1997, there were 754 shareholders of record.
DIVIDENDS
The following cash dividends were paid to shareholders during 1995 and 1996:
<TABLE>
<CAPTION>
1ST QTR. 2ND QTR. 3RD QTR. 4TH QTR.
-------- -------- -------- --------
<S> <C> <C> <C> <C>
1995.......................... $.15 $.15 $.17 $.18
1996.......................... $.20 $.20 $.20 $.20
</TABLE>
ONE
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<PAGE>
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April 9, 1997
To Our Shareholders:
For the fiscal year ended December 31, 1996, the Trust's earnings were
$216,538 or $.25 per share, an increase of $30,941 or $.04 per share when
compared to fiscal year 1995. Funds from operations, which adds depreciation and
amortization to net income computed in accordance with generally acceptable
accounting principals, were $974,476 or $1.12 per share for the year ended
December 31, 1996. Funds from operations increased $67,839 or $.07 per share
when compared to fiscal year 1995.
During 1996, the Trust paid $693,299 or $.80 per share in dividends. This
was a 23% increase over 1995. At its last quarterly directors meeting on
February 13, 1997, the Trust increased its quarterly dividend from $.20 per
share to $.22 per share. If operations continue as expected, the Trust should be
able to maintain this level throughout 1997 for a total of $.88 per share for
the year. The operations of the Trust's properties improved in 1996. The
improved operating results are a result of the Trust's ability to maintain a
high occupancy level at the three properties. At the Atrium at Alpha Business
Center, the Trust also benefited in 1996 from the receipt of a termination fee
from one of the major tenants. They will be vacating their space at the end of
May 1997; however, it is anticipated that the space will be re-leased prior to
the expiration of their term. During 1996, the Atrium at Alpha Business Center
had the following leasing activity: four tenants occupying 5,181 square feet
renewed their lease, while one tenant vacated approximately 3,144 square feet.
While overall occupancy declined 4% during the year, rental rates for renewals
have increased between 25% and 30% over existing levels. The Franklin Park
Distribution Center and the Applied Communications, Inc. buildings remain 100%
occupied.
During 1996, the real estate investment market continued the improvement
that started in 1994 and is expected to continue this improvement through the
next several years. Management believes this trend should increase the value of
the Trust's properties in the future. Management will continue to manage the
properties aggressively to produce the maximum dividend possible.
Sincerely,
NOONEY REALTY TRUST, INC.
/s/ Gregory J. Nooney, Jr.
GREGORY J. NOONEY, JR.
Chairman of the Board
TWO
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<PAGE>
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
It should be noted that this Annual Report contains forward-looking
information (as defined in the Private Securities Litigation Reform Act of 1995)
that involves risk and uncertainty, including trends in the real estate
investment market, projected leasing and sales, and the future prospects for the
Trust. Actual results could differ materially from those contemplated by such
statements.
LIQUIDITY AND CAPITAL RESOURCES
Cash reserves on hand as of December 31, 1996, were $641,127, an increase of
$123,810 from year ended December 31, 1995. The increase in cash is attributable
to an increase in cash provided by operating activities which increased the
Trust's cash reserves. The Trust's current cash position and the properties'
ability to provide operating cash flow should enable the Trust to fund
anticipated capital expenditures in 1997. The anticipated capital expenditures
by property are as follows:
<TABLE>
<CAPTION>
OTHER LEASING
CAPITAL CAPITAL TOTAL
------- ------- -----
<S> <C> <C> <C>
Atrium at Alpha......................... $33,000 $219,151 $252,151
Franklin Park Dist. Center.............. 15,000 0 15,000
Applied Communications Inc. Bldg........ 0 0 0
------- -------- --------
$48,000 $219,151 $267,151
</TABLE>
Throughout 1997 the Trust anticipates capital expenditures of $267,151. The
capital expenditures include leasing capital at Atrium at Alpha for tenant
alterations along with lease commissions for new tenant leases and renewals.
Along with leasing capital, Atrium at Alpha has set aside funds to install new
restroom fixtures and replace the HVAC control board. At Franklin Park
Distribution Center a contingency reserve has been set aside for capital
expenditures arising from annual inspections to the property. Capital
expenditures at Applied Communications Inc. building are expected to be minimal.
RESULTS OF OPERATIONS
The results of operations for the Trust's properties for the years ended
December 31, 1996, 1995 and 1994 are detailed in the schedule below.
Administrative expenses of the Trust are excluded.
<TABLE>
<CAPTION>
ATRIUM AT FRANKLIN PARK APPLIED COMM.
ALPHA DIST. CENTER INC. BLDG.
---------- ------------- -------------
<S> <C> <C> <C>
1996
Revenues................................ $1,211,306 $ 770,247 $ 1,035,582
Expenses................................ 1,020,102 604,580 909,586
---------- --------- -----------
Net Income.............................. $ 191,204 $ 165,667 $ 125,996
Depreciation and Amortization........... 362,549 182,374 196,529
---------- --------- -----------
Funds from Operations................... $ 553,753 $ 348,041 $ 322,525
</TABLE>
THREE
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<PAGE>
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<TABLE>
<CAPTION>
ATRIUM AT FRANKLIN PARK APPLIED COMM.
ALPHA DIST. CENTER INC. BLDG.
---------- ------------- -------------
<S> <C> <C> <C>
1995
Revenues................................ $1,092,488 $ 752,875 $ 1,002,033
Expenses................................ 919,264 583,418 887,751
---------- --------- -----------
Net Income.............................. $ 173,224 $ 169,457 $ 114,282
Depreciation and Amortization........... 336,993 177,021 190,406
---------- --------- -----------
Funds from Operations................... $ 510,217 $ 346,478 $ 304,688
1994
Revenues................................ $ 988,232 $ 719,834 $ 995,846
Expenses................................ 879,581 559,536 942,008
---------- --------- -----------
Net Income.............................. $ 108,651 $ 160,298 $ 53,838
Depreciation and Amortization........... 320,357 163,717 190,406
---------- --------- -----------
Funds from Operations................... $ 429,008 $ 324,015 $ 244,244
</TABLE>
Operating results at The Atrium at Alpha improved for the third year in a
row. Revenues increased from 1995 to 1996, due primarily to increases in base
rental rate in the tenants renewing at the building, the receipt of a lease
cancellation fee from one of the major tenants prior to year-end, and an
increase in escalation income due to increasing expenses. Expenses increased
during the three year period as a result of increases in real estate taxes and
snow removal. Occupancy at The Atrium building fell from 99% at the beginning of
the year to 95% at the end of the year, however, leasing activity has been good
and we anticipate maintaining these high occupancy levels in 1997.
The operating results at Franklin Park Distribution Center for the year
ended December 31, 1996, were very comparable to the year ended December 31,
1995. The leases in place will provide a steady level of income. Increases in
income will only be attributable to increases in reimbursements for expenditures
for real estate taxes. During 1996, the real estate taxes did increase, which
increased expenses and increased the related income from the tenants.
At Applied Communications Inc. building, the operating results improved for
the third year in a row. For the years ended December 31, 1994, December 31,
1995, and December 31, 1996, net income was $53,838, $114,282, and $125,996
respectively. The net income increase is related to built-in rent step ups from
the building's only tenant. Expenses increased slightly due to an increase in
depreciation expense.
Occupancy at the Trust's properties during the fourth quarter remained at a
high level. This can be attributable to the Trust's ability to renew tenants at
The Atrium at Alpha Business Center as their leases expired. The occupancy
levels at December 31 are as follows:
<TABLE>
<CAPTION>
OCCUPANCY LEVELS AT DECEMBER 31,
----------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Atrium at Alpha................................... 95% 99% 95%
Franklin Park Dist. Center........................ 100% 100% 100%
Applied Communications Inc. Bldg.................. 100% 100% 100%
</TABLE>
During the fourth quarter the occupancy level at Atrium at Alpha remained
steady at 95% occupancy. One tenant occupying 834 square feet renewed their
lease during the quarter. For the year, occupancy decreased 4% as a result of
one tenant vacating approximately 3,144 square feet
FOUR
- ------------
<PAGE>
===============================================================================
during the second quarter. Throughout the year, four tenants occupying 5,181
square feet, or 6% of the property, were renewed. The property has two major
tenants which lease 23% and 20% of the building with leases expiring in May 1999
and July 2001, respectively.
Franklin Park Distribution Center has been fully leased by two tenants
throughout 1996. The larger of the two tenants occupies 57% of the building
while the other occupies 43% of the building. Their leases expire in December
1999 and June 1998, respectively.
The Applied Communications Inc. building has a single tenant who has
occupied the entire building throughout 1996. This tenant's lease expires in
August 1999.
1996 COMPARISONS
For the year ended December 31, 1996, the Trust's consolidated revenues were
$3,033,511 compared to $2,865,261 for the year ended December 31, 1995. This is
a 6% increase, or $168,250. The increase in consolidated revenues relates mainly
to the Atrium at Alpha Business Center and the Applied Communications Inc.
building. At Atrium at Alpha Business Center, revenues increased due to the
receipt of a tenant's lease cancellation fee and an increase in escalation
income accrued at year-end. Revenues increased at the Applied Communications
Inc. building due to the single tenant's built-in step up rent increase.
The Trust's consolidated expenses for the year ended December 31, 1996, were
$2,816,973 compared to $2,679,664 for the year ended December 31, 1995. The
increase in expenses is attributable to real estate taxes, property management
fee increases due to higher income and an increase in repair and maintenance
expense.
Net income increased $30,941 or $.04 per share when compared to the year
ended December 31, 1995. For the year ended December 31, 1996, net income was
$216,538 resulting in earnings of $.25 per share. Cash flow from operations from
the year ended December 31, 1996, was $905,964 or $1.05 per share. The Trust
paid out dividends of $693,299 or $.80 per share during 1996.
Cash flow from operations was also used to fund minor property capital
expenditures and principal payments on the Trust's note payable of $82,185.
1995 COMPARISONS
For the year ended December 31, 1995, the Trust's consolidated revenues were
$2,865,261 compared to $2,726,920 for the year ended December 31, 1994. The
increase in revenues are $138,341 or 5.07%. The increase in consolidated
revenues relates to the three properties held by the Trust. Atrium at Alpha's
revenues increased $104,256; Franklin Park Distribution Center's revenues
increased $33,041; and Applied Communications Inc. building's revenues increased
$6,187. As previously stated, Atrium at Alpha's increased revenues related to
increased average occupancy when comparing 1994 to 1995; at Franklin Park
Distribution Center, revenue increases related to the renewal of a major tenant
effective January 1, 1995; and at Applied Communications Inc. building, revenues
increased due to step-up rents received from the property's only tenant.
The Trust's consolidated expenses for the year ended December 31, 1995, were
$2,679,664 compared to $2,684,703 for the year ended December 31, 1994.
Consolidated expenses remained relatively flat for the two-year period, however,
individual expenses such as interest, real estate taxes, and depreciation and
amortization had noteworthy fluctuations. Interest expense decreased $36,623 due
to the refinancing of the note payable in November 1994 at a lower interest
FIVE
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<PAGE>
===============================================================================
rate. Real estate taxes increased $23,954 due to tax rate changes at Atrium at
Alpha and Franklin Park Distribution Center. Depreciation and amortization
increased $14,046 due to tenant alteration expenditures at Atrium at Alpha.
With the increase in consolidated income and the decrease in consolidated
expenses, net income has increased $143,380 or $.16 per share when compared to
year ended December 31, 1994. For the year ended December 31, 1995, net income
was $185,597 resulting in earnings of $.21 per share. Cash flow from operations
for the year ended December 31, 1995, was $760,565 or $.88 per share, which
enabled the Trust to pay out $563,307 in dividends or $.65 per share. The
remaining cash flow from operations was used to fund various property capital
expenditures along with principal payments on the Trust's note payable.
INFLATION
The effects of inflation did not have a material impact upon the Trust's
operation in fiscal 1994, 1995 and 1996 and are not expected to have a material
impact in 1997.
SIX
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<PAGE>
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INDEPENDENT AUDITORS' REPORT
To the Shareholders of
Nooney Realty Trust, Inc.:
We have audited the accompanying balance sheets of Nooney Realty Trust, Inc.
(the "Trust") as of December 31, 1996 and 1995, and the related statements of
operations, shareholders' equity, and cash flows for each of the three years in
the period ended December 31, 1996. These financial statements are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements 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, such financial statements present fairly, in all material
respects, the financial position of Nooney Realty Trust, Inc. as of December 31,
1996 and 1995, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1996 in conformity with
generally accepted accounting principles.
/S/ Deloitte & Touche LLP
January 27, 1997
SEVEN
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<PAGE>
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<TABLE>
NOONEY REALTY TRUST, INC.
BALANCE SHEETS
ASSETS
<CAPTION>
DECEMBER 31,
----------------------
1996 1995
---- ----
<S> <C> <C>
CASH....................................................................... $ 641,127 $ 517,317
ACCOUNTS RECEIVABLE--no allowance for doubtful accounts considered
necessary................................................................ 353,619 261,972
PREPAID EXPENSES........................................................... 29,266 84,803
INVESTMENT PROPERTY--at cost (Note 3):
Land................................................................... 2,568,955 2,568,955
Buildings and improvements............................................. 17,593,831 17,587,161
----------- -----------
20,162,786 20,156,116
Less accumulated depreciation.......................................... (5,948,166) (5,344,765)
----------- -----------
14,214,620 14,811,351
DEFERRED EXPENSES--at amortized cost....................................... 243,006 333,574
----------- -----------
TOTAL...................................................................... $15,481,638 $16,009,017
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Mortgage note payable (Note 3)......................................... $ 4,830,236 $ 4,912,421
Accounts payable and accrued expenses.................................. 406,947 375,380
----------- -----------
Total liabilities.............................................. 5,237,183 5,287,801
----------- -----------
SHAREHOLDERS' EQUITY:
Common stock, $1 par value--Authorized, 5,000,000 shares; issued and
outstanding, 866,624 shares.......................................... 866,624 866,624
Additional paid-in capital............................................. 14,252,532 14,252,532
Distributions in excess of net income.................................. (4,874,701) (4,397,940)
----------- -----------
Total shareholders' equity..................................... 10,244,455 10,721,216
----------- -----------
TOTAL...................................................................... $15,481,638 $16,009,017
=========== ===========
See notes to financial statements.
</TABLE>
EIGHT
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<PAGE>
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<TABLE>
NOONEY REALTY TRUST, INC.
STATEMENTS OF OPERATIONS
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
REVENUES:
Rental and other income (Notes 4 and 6)................................ $ 3,017,982 $ 2,861,293 $ 2,719,324
Interest income........................................................ 15,529 3,968 7,596
----------- ----------- -----------
Total revenues..................................................... 3,033,511 2,865,261 2,726,920
----------- ----------- -----------
EXPENSES:
Depreciation and amortization.......................................... 757,938 721,040 706,994
Real estate taxes...................................................... 579,305 523,735 499,781
Interest on mortgage note.............................................. 411,220 416,126 452,749
Advisory fee--related party (Note 5)................................... 117,864 116,309 115,704
Professional fees...................................................... 49,836 54,256 57,433
Property management fees--related party (Note 5)....................... 112,982 106,367 100,943
Repairs and maintenance................................................ 89,299 60,081 62,737
Trustee fees and expenses.............................................. 18,323 14,879 16,565
Utilities.............................................................. 280,400 289,392 290,045
Other operating expenses............................................... 399,806 377,479 381,752
----------- ----------- -----------
Total expenses..................................................... 2,816,973 2,679,664 2,684,703
----------- ----------- -----------
NET INCOME................................................................. $ 216,538 $ 185,597 $ 42,217
=========== =========== ===========
PER SHARE DATA:
Net income............................................................. $ 0.25 $ 0.21 $ 0.05
=========== =========== ===========
Distributions:
Paid in current year:
Taxable to shareholders........................................ $ 0.40 $ 0.31 $ 0.22
Return of capital.............................................. 0.40 0.34 0.37
----------- ----------- -----------
Total paid in current year......................................... 0.80 0.65 0.59
Declared 1993, paid in January 1994................................ (0.10)
----------- ----------- -----------
Total declared in current year..................................... $ 0.80 $ 0.65 $ 0.49
=========== =========== ===========
Weighted average shares outstanding.................................... 866,624 866,624 866,624
=========== =========== ===========
See notes to financial statements.
</TABLE>
NINE
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<PAGE>
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<TABLE>
NOONEY REALTY TRUST, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<CAPTION>
COMMON STOCK
--------------------- ADDITIONAL DISTRIBUTIONS
NUMBER PAID-IN IN EXCESS OF
OF SHARES AMOUNT CAPITAL NET INCOME
--------- ------- ---------- -------------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1994.......................... 866,624 $ 866,624 $ 14,252,532 $ (3,637,801)
Net income.................................... 42,217
Dividends declared............................ (424,646)
---------- --------- ------------ ------------
BALANCE, DECEMBER 31, 1994........................ 866,624 866,624 14,252,532 (4,020,230)
Net income.................................... 185,597
Dividends declared............................ (563,307)
---------- --------- ------------ ------------
BALANCE, DECEMBER 31, 1995........................ 866,624 866,624 14,252,532 (4,397,940)
Net income.................................... 216,538
Dividends declared............................ (693,299)
---------- --------- ------------ ------------
BALANCE, DECEMBER 31, 1996........................ 866,624 $ 866,624 $ 14,252,532 $ (4,874,701)
========== ========= ============ ============
See notes to financial statements.
</TABLE>
TEN
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<PAGE>
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<TABLE>
NOONEY REALTY TRUST, INC.
STATEMENTS OF CASH FLOWS
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income from operations............................................. $ 216,538 $ 185,597 $ 42,217
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation....................................................... 626,300 613,893 592,057
Amortization of deferred expenses.................................. 131,638 107,147 114,937
Changes in accounts affecting operations:
Accounts receivable............................................ (91,647) 15,093 (82,377)
Prepaid expenses............................................... 55,537 (48,194) (7,363)
Deferred expenses.............................................. (41,070) (71,215) (225,556)
Accounts payable and accrued expenses.......................... 31,567 (41,756) 68,666
---------- ---------- ------------
Net cash provided by operating activities.................. 928,863 760,565 502,581
---------- ---------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net additions to investment property................................... (29,569) (205,960) (205,641)
---------- ---------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid to shareholders......................................... (693,299) (563,307) (511,308)
Payments on mortgage note payable...................................... (82,185) (75,585) (4,856,592)
Proceeds from mortgage note payable.................................... 5,000,000
---------- ---------- ------------
Net cash used in financing activities...................... (775,484) (638,892) (367,900)
---------- ---------- ------------
NET INCREASE (DECREASE) IN CASH............................................ 123,810 (84,287) (70,960)
CASH, BEGINNING OF YEAR.................................................... 517,317 601,604 672,564
---------- ---------- ------------
CASH, END OF YEAR.......................................................... $ 641,127 $ 517,317 $ 601,604
========== ========== ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for interest................................. $ 411,220 $ 416,126 $ 452,749
========== ========== ============
See notes to financial statements.
</TABLE>
ELEVEN
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<PAGE>
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NOONEY REALTY TRUST, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE 1--BUSINESS:
Nooney Realty Trust, Inc. (the "Trust"), a Missouri corporation, was formed
on June 14, 1984 for the purpose of making equity investments in
income-producing real properties, primarily commercial and light industrial
properties. The Trust's portfolio is comprised of a multi-tenant office building
located in Bloomington, Minnesota; a single-tenant office building located in
Omaha, Nebraska; and a warehouse and distribution facility in Franklin Park,
Illinois. These properties generated 40.2%, 34.3% and 25.5% of rental and other
income, respectively, for the year ended December 31, 1996.
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Trust has qualified and elected to be taxed as a real estate investment
trust (REIT) under the Internal Revenue Code. The Trust intends to continue to
qualify as a REIT and to distribute substantially all of its taxable income to
its shareholders. Accordingly, no provision for income taxes is reflected in the
financial statements. At December 31, 1996, the Trust has net operating loss
carryforwards of approximately $835,000 for tax purposes which expire in various
amounts through 2005.
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.
Investment property is recorded at the lower of cost or net realizable
value. Impairment is determined if the sum of the expected future cash flows
(undiscounted and without interest charges) is less than the carrying amount of
the property.
Buildings and improvements are depreciated over their estimated useful lives
using the straight-line method.
Deferred expenses consist of lease fees and financing costs and are
amortized over the terms of the respective leases or notes. Amortization of such
costs charged to expense amounted to $132,000 in 1996 ($107,000 and $115,000 in
1995 and 1994, respectively).
Lease agreements are accounted for as operating leases and rentals from such
leases are reported as revenues ratably over the terms of the leases. Certain
lease agreements provide for rent concessions. At December 31, 1996, accounts
receivable include approximately $166,000 ($165,000 in 1995) of accrued rent
concessions which is not yet due under the terms of the various lease
agreements.
Included in rental and other income are amounts received from tenants under
provisions of lease agreements which require the tenants to pay additional rent
equal to specified portions of certain expenses such as real estate taxes,
insurance, utilities and common area maintenance. The income is recorded in the
same period that the related expense is incurred.
TWELVE
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NOONEY REALTY TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
Net income per share was computed based upon the weighted average number of
shares of common stock outstanding during each year. Distributions per share are
stated at the amount per share declared by the Directors. The taxability of all
distributions paid is based upon earnings and profits as defined by the Internal
Revenue Code. The taxability of distributions declared but unpaid is determined
in the year the dividend is paid.
NOTE 3--MORTGAGE NOTE PAYABLE:
Mortgage note payable at December 31 consists of the following:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
8.4%, due in monthly installments of $40,976 including interest to
November 2001 when remaining principal payment of $4,330,508 is
due.................................................................. $ 4,830,236 $ 4,912,421
=========== ===========
</TABLE>
The mortgage note is collateralized by deeds of trust and assignments of
rents on all investment properties. Principal payments required during the next
five years are as follows:
<TABLE>
<S> <C>
1997....................................................................... $ 89,360
1998....................................................................... 97,162
1999....................................................................... 105,646
2000....................................................................... 114,870
2001....................................................................... 4,423,198
</TABLE>
In accordance with Statement of Financial Accounting Standards No. 107,
Disclosures about Fair Value of Financial Instruments, the estimated fair value
of mortgage notes payable with maturities greater than one year is determined
based on rates currently available to the Partnership for mortgage notes with
similar terms and remaining maturities. The carrying amount and estimated fair
value of the Trust's debt at December 31, 1996 and 1995 are summarized as
follows:
<TABLE>
<CAPTION>
1996 1995
----------------------- -----------------------
CARRYING ESTIMATED CARRYING ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Mortgage notes payable............................ $ 4,830,236 $ 4,858,000 $4,912,421 $5,090,000
</TABLE>
Fair value estimates are made at a specific point in time, are subjective in
nature and involve uncertainties and matters of significant judgment. Settlement
of the Trust's debt obligation at fair value may not be possible and may not be
a prudent management decision. The potential loss on extinguishment at December
31, 1996 does not take into consideration expenses that would be incurred to
settle the debt obligation at fair value.
THIRTEEN
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NOONEY REALTY TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTE 4--RENTAL REVENUES UNDER OPERATING LEASES:
Minimum future rental revenues under noncancelable operating leases in
effect as of December 31, 1996 are as follows:
<TABLE>
<S> <C>
1997.............................................. $2,544,000
1998.............................................. 2,210,000
1999.............................................. 1,557,000
2000.............................................. 276,000
2001.............................................. 159,000
Thereafter........................................ 295,000
----------
Total......................................... $7,041,000
==========
</TABLE>
NOTE 5--RELATED PARTY TRANSACTIONS:
The Trust has entered into an agreement with Nooney Advisors Ltd., L.P. (the
"Advisor"), a Missouri limited partnership, to advise the Trust with respect to
the Trust's investments and investment policies and to administer the operations
of the Trust. This advisory agreement is renewable annually by a vote of the
Directors. Its current term expires on March 31, 1997. An Officer and Director
of the Trust is a general partner of Nooney Advisors Ltd., L.P. The Advisor
receives a fee for its services based upon net invested assets or net operating
income as defined in the agreement. The fees were $117,864, $116,309 and
$115,704 for the years ended December 31, 1996, 1995 and 1994, respectively.
Certain other affiliates of the Advisor receive lease commissions and
property management fees in connection with the operation of investment real
estate owned by the Trust. In 1996, lease commissions of $35,746 ($67,837 and
$43,595 in 1995 and 1994, respectively) were paid by the Trust to Nooney
Krombach Company, an affiliate of the Advisor. Additionally, property management
fees paid to Nooney Krombach Company were $112,982, $106,367 and $100,943 for
the years ended December 31, 1996, 1995 and 1994, respectively.
NOTE 6--MAJOR TENANTS:
A substantial amount of the Trust's revenue in 1996 was derived from three
major tenants whose rentals amounted to $1,035,600, $463,000 and $343,900 or
34.3%, 15.4% and 11.4%, respectively, of total revenues. A substantial amount of
the Trust's revenue in 1995 was derived from three major tenants whose rentals
amounted to $978,000, $411,000 and $335,000 or 34%, 14% and 12%, respectively,
of total revenues. A substantial amount of the Trust's revenue in 1994 was
derived from four major tenants whose rentals amounted to $996,000, $391,000 and
$329,000 or 37%, 14% and 12%, respectively, of total revenues.
FOURTEEN
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<TABLE>
DIRECTORS AND OFFICERS
Board of Directors
<S> <C>
Gregory J. Nooney, Jr. ........ Chairman of the Board and Chief Executive Officer,
Nooney Company. Nooney Company is a real estate
investment management firm.
Patricia A. Nooney............ Senior Vice President and Chief Financial Officer,
Nooney Krombach Company, a wholly-owned subsidiary
of Nooney Company.
Robert E. Kresko............... Private investor.
Gene K. Beare.................. Corporate consultant.
Bruce P. Hayden................ Chairman of the Board, Hayden Associates, Inc.,
Bloomfield, Connecticut. Hayden Associates, Inc. is
a real estate investment advisory, counseling and
brokerage firm.
James P. Ingram................ President, Cambridge Savings Bank, Cambridge,
Massachusetts.
John R. Hart................... Self employed investor and serves as President, CEO
and Director of PICO Holdings, Inc.
Officers
Gregory J. Nooney, Jr......... Chairman of the Board and Chief Executive Officer.
Patricia A. Nooney............ President, Secretary and Treasurer.
</TABLE>
FIFTEEN
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NOONEY LOGO
SHAREHOLDER INFORMATION
The 1997 Annual Meeting of Shareholders will be held at 10:00 A.M. at the
Pierre Laclede Conference Center, 7733 Forsyth Boulevard, 2nd Floor, in Clayton,
Missouri, on Tuesday, May 13, 1997.
Transfer Agent:
Boatmen's Trust Company
510 Locust Street
P.O. Box 14768
St. Louis, Missouri 63178
Advisor:
Nooney Advisors, Ltd., L.P.
St. Louis, Missouri
Legal Counsel:
Bryan Cave LLP
St. Louis, Missouri
Independent Accountants:
Deloitte & Touche LLP
St. Louis, Missouri
The following information is available to shareholders without charge upon
written request to Patricia A. Nooney, Secretary, Nooney Realty Trust, Inc.,
7701 Forsyth Boulevard, St. Louis, Missouri 63105:
Annual Report on Form 10-K filed with the Securities and Exchange Commission.
Form 10-K is available in April.
Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission.
Forms 10-Q are available in May, August and November.
Nooney Realty Trust, Inc. Dividend Reinvestment Plan and Enrollment Card
SIXTEEN
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<PAGE>
INVESTMENT PROPERTIES
THE ATRIUM
AT ALPHA BUSINESS CENTER
BLOOMINGTON, MINNESOTA
APPLIED COMMUNICATIONS, INC. BUILDING
OMAHA, NEBRASKA
FRANKLIN PARK DISTRIBUTION CENTER
FRANKLIN PARK, ILLINOIS
NOONEY REALTY TRUST
7701 FORSYTH BOULEVARD
ST. LOUIS, MISSOURI 63105
