<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE YEAR ENDED DECEMBER 31, 1995
Commission File Number 1-9948
AMERICAN REALTY TRUST, INC.
--------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Georgia 54-0697989
- ------------------------------- ---------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
10670 North Central Expressway, Suite 300, Dallas, Texas 75231
- -------------------------------------------------------- -----------
(Address of Principal Executive Offices) (Zip Code)
(214) 692-4700
------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Securities Registered Pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------------------ -------------------------
Common Stock, $.01 par value New York Stock Exchange
Share Purchase Rights New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act:
NONE
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 at least the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
As of March 15, 1996, the Registrant had 5,858,328 shares of Common Stock
outstanding. Of the total shares outstanding 2,072,498 were held by other than
those who may be deemed to be affiliates, for an aggregate value of $19,430,000
based on the closing price on the New York Stock Exchange on March 15, 1996
The basis of this calculation does not constitute a determination by the
Registrant that all of such persons or entities are affiliates of the
Registrant as defined in Rule 405 of the Securities Act of 1933, as amended.
Documents Incorporated by Reference:
Consolidated Financial Statements of National Realty, L.P.;
Commission File No. 1-9648
Consolidated Financial Statements of Continental Mortgage and Equity Trust;
Commission File No. 0-10503
Consolidated Financial Statements of Income Opportunity Realty Trust;
Commission File No. 1-9525
Consolidated Financial Statements of Transcontinental Realty Investors, Inc.;
Commission File No. 1-9240
1
<PAGE> 2
This Form 10-K/A amends the Registrant's annual report on Form 10-K for the
fiscal year ended December 31, 1995 as follows:
ITEM 2. PROPERTIES - page 8
ITEM 6. SELECTED FINANCIAL DATA - page 29
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - page 31
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - pages
43, 63 and 76
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT -
page 90
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - page 94
2
<PAGE> 3
ITEM 2. PROPERTIES (Continued)
assets invested in any one category is subject to change and no assurance can
be given that the composition of the Company's assets in the future will
approximate the percentages listed above.
For the year ended December 31, 1995, gross revenues for each of the Denver
Merchandise Mart in Denver, Colorado and the Kansas City Holiday Inn in Kansas
City, Missouri exceeded 10% of the Company's total revenue. The Denver
Merchandise Mart was acquired in March 1994 and the Kansas City Holiday Inn was
recorded as an insubstance foreclosure in March 1993. For information
regarding occupancy rental rates, see the table under "Properties Held for
Investment" below. Neither property had a single tenant occupying 10% or more
of their respective rentable square footage.
At December 31, 1995, the Company's real estate was located in the Midwest,
Southwest and Mountain regions of the continental United States, as shown more
specifically in the table under "Real Estate" below. The Company also holds
mortgage notes receivable secured by real estate located in various geographic
regions of the continental United States, with a concentration in the Mountain
region, as shown more specifically in the table under "Mortgage Loans" below.
Geographic Regions
The Company has divided the continental United States into the following six
geographic regions.
[MAP]
Northeast region comprised of the states of Connecticut, Delaware, Maine,
Maryland, Massachusetts, New Hampshire, New Jersey, New York,
Pennsylvania, Rhode Island and Vermont, and the District of Columbia. The
Company has no properties in this region.
Southeast region comprised of the states of Alabama, Florida, Georgia,
Mississippi, North Carolina, South Carolina, Tennessee and Virginia. The
Company has no properties in this region.
Southwest region comprised of the states of Arizona, Arkansas, Louisiana,
New Mexico, Oklahoma and Texas. The Company has one commercial property
in this region.
Midwest region comprised of the states of Illinois, Indiana, Iowa, Kansas,
Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio,
South Dakota, West Virginia and Wisconsin. The Company has three
commercial properties and one hotel in this region.
Mountain region comprised of the states of Colorado, Idaho, Montana,
Nevada, Utah and Wyoming. The Company has one commercial property and one
hotel in this region.
Pacific region comprised of the states of California, Oregon and
Washington. The Company has no properties in this region.
8
<PAGE> 4
ITEM 2. PROPERTIES (Continued)
Geographic Regions (Continued)
Excluded from the above are eight parcels of developed and undeveloped land, as
described below.
Real Estate
At December 31, 1995, approximately two-thirds of the Company's assets were
invested in real estate and the equity securities of real estate entities. The
Company has invested in real estate located throughout
8A
<PAGE> 5
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
For the Years Ended December 31,
--------------------------------------------------------------------------------
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
EARNINGS DATA (dollars in thousands, except per share)
<S> <C> <C> <C> <C> <C>
Revenue..................... $ 22,952 $ 23,070 $ 13,427 $ 11,481 $ 13,687
Expense..................... 33,437 29,019 22,142 21,631 25,465
------------ ------------ ------------ ------------ ------------
(Loss) before gain on sale
of real estate and
extraordinary gain........ (10,485) (5,949) (8,715) (10,150) (11,778)
Gain on sale of real
estate.................... 6,866 3,200 481 566 1,271
------------ ------------ ------------ ------------ ------------
(Loss) before extraordinary
gain...................... (3,619) (2,749) (8,234) (9,584) (10,507)
Extraordinary gain.......... 783 323 3,807 - 7,628
------------ ------------ ------------ ------------ ------------
Net (loss).................. (2,836) (2,426) (4,427) (9,584) (2,879)
Redeemable Common Stock,
accretion of discount..... - - (129) (258) -
------------ ------------ ------------ ------------ ------------
(Loss) applicable to
Common shares............. $ (2,836) $ (2,426) $ (4,556) $ (9,842) $ (2,879)
============ ============ ============ ============ ============
PER SHARE DATA
(Loss) before extra-
ordinary gain............. $ (.61) $ (.45) $ (1.36) $ (1.95) $ (2.48)
Extraordinary gain.......... .13 .05 .63 - 1.80
------------ ------------ ------------ ------------ ------------
Net (loss).................. (.48) (.40) (.73) (1.95) (.68)
Redeemable Common Stock,
accretion of discount..... - - (.02) (.05) -
------------ ------------ ------------ ------------ ------------
(Loss) applicable to
Common shares............. $ (.48) $ (.40) $ (.75) $ (2.00) $ (.68)
============ ============ ============ ============ ============
Dividends per share......... $ - $ - $ - $ - $ -
Weighted average shares
outstanding............... 5,858,328 6,104,438 6,050,550 4,906,584 4,235,398
<CAPTION> December 31,
--------------------------------------------------------------------------------
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
(dollars in thousands, except per share)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Notes and interest
receivable................. $ 49,741 $ 45,664 $ 51,769 $ 72,808 $ 68,507
Real estate................. 59,424 47,526 52,437 45,317 52,654
Total assets................ 162,033 137,362 139,861 151,010 153,131
Notes and interest
payable................... 61,163 45,695 53,693 63,698 65,074
Stockholders' equity........ 53,058 55,894 56,120 60,476 70,221
Book value per share........ $ 9.06 $ 9.54 $ 11.11 $ 11.88 $ 16.58
</TABLE>
- ----------------------
Shares and per share data have been adjusted for the 2 for 1 forward Common
Stock split effected January 2, 1996.
29
<PAGE> 6
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Liquidity and Capital Resources (Continued)
The Company expects an increase in cash flow from property operations in 1996.
Such increase is expected to be derived from operations of the Denver
Merchandise Mart, the Inn at the Mart and the Oak Tree Village Shopping Center.
See NOTE 3. "NOTES AND INTEREST RECEIVABLE." The Company is also expecting
continued lot sales at its Texas residential subdivision and substantial sales
of the Las Colinas, Texas, land to generate additional cash flow.
In March 1995, the Company completed the sale of the Boulevard Villas
Apartments in Las Vegas, Nevada, which property had been acquired through
foreclosure in 1993. The Company received net cash of $3.4 million after the
payoff of the $5.9 million in existing mortgage debt. See NOTE 4. "REAL
ESTATE." Also in March 1995, the Company collected a second lien mortgage note
receivable with a principal balance of $860,000 in full. See NOTE 3. "NOTES
AND INTEREST RECEIVABLE."
In May 1995, the Company purchased 74.9 acres of partially developed land in
Las Colinas, Texas, for $13.5 million. See NOTE 4. "REAL ESTATE." The Company
borrowed $15.0 million under a term loan to purchase the land which is
discussed below in "Notes Payable". In September 1995 the Company sold 6.9
acres for $2.9 million in cash. The Company applied the net proceeds of the
sale, $2.6 million, to pay down the term loan. In March 1996, the Company sold
an additional 2.3 acres for $961,000 in cash, the net sales proceeds of
$891,000 were also used to paydown the term loan.
In October 1995, the Company acquired an additional 92.6 acres of partially
developed land in Las Colinas, Texas, for $7.0 million. The Company paid
$959,000 in cash and borrowed the remainder of the purchase price. The loan
terms are discussed below in "Notes Payable". See NOTE 4. "REAL ESTATE."
The Company expects that funds from existing cash resources, collections on
mortgage notes receivable, sales or refinancing of real estate and/or mortgage
notes receivable, and borrowings against its investments in marketable equity
securities, mortgage notes receivable, and to the extent available borrowings,
if required, from the Company's advisor, which totaled $2.5 million at December
31, 1995, will be sufficient to meet the cash requirements associated with the
Company's current and anticipated level of operations, maturing debt
obligations and existing commitments. To the extent that the Company's
liquidity permits or financing sources are available, the Company may make
investments in real estate, primarily investments in raw and/or partially
developed land, continue making additional investments in real estate entities
and marketable equity securities, and fund or acquire mortgage notes.
The Company expects that it will be necessary for it to sell at least $13.5
million, $6.0 million and $3.0 million of such land in each of the next three
years, respectively, to satisfy the debt on its land holdings as it matures.
31
<PAGE> 7
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Liquidity and Capital Resources (Continued)
If the Company is unable to sell at least the minimum amount of land to satisfy
the debt obligations on such land as it matures, the Company, if it was not
able to extend such debt, would either sell other of its assets to pay such
debt or return the property to the lender.
Notes Receivable. Scheduled principal maturities of $38.4 million are due in
1996 of which $1.8 million is due on nonperforming notes receivable. The
balance of the Company's mortgage notes receivable are due over the next one to
ten years and provide for "balloon" principal
31A
<PAGE> 8
AMERICAN REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------------------------------
1995 1994 1993
------------- ------------- --------------
(dollars in thousands, except per share)
<S> <C> <C> <C>
Income
Rents..................................... $ 17,869 $ 18,013 $ 7,885
Interest (including $506 in 1995, $366 in
1994 and $48 in 1993 from affiliates)... 4,929 3,959 4,984
Other..................................... 154 1,098 558
------------- ------------- --------------
22,952 23,070 13,427
Expenses
Property operations (including $1,200 in
1995, $899 in 1994 and $348 in 1993 to
affiliates)............................. 13,260 13,013 5,273
Interest (including $437 in 1995, $589 in
1994 and $1,029 in 1993 to affiliates).. 8,941 7,875 6,497
Advisory and servicing fees to affiliate.. 1,195 1,242 1,257
General and administrative (including
$516 in 1995, $434 in 1994 and $288
in 1993 to affiliate)................... 2,554 2,562 1,819
Depreciation and amortization............. 1,691 1,620 1,130
Provision for losses...................... - - 2,300
Equity in losses of investees............. 5,123 2,529 4,014
Minority interest......................... 671 169 (159)
------------- ------------- --------------
33,435 29,010 22,131
------------- ------------- --------------
(Loss) from operations...................... (10,483) (5,940) (8,704)
Income tax expense.......................... 2 9 11
------------- ------------- --------------
(Loss) before gain on sale of real estate
and extraordinary gain.................... (10,485) (5,949) (8,715)
Gain on sale of real estate................. 6,866 3,200 481
------------- ------------- --------------
(Loss) before extraordinary gain............ (3,619) (2,749) (8,234)
Extraordinary gain.......................... 783 323 3,807
------------- ------------- --------------
Net (loss).................................. (2,836) (2,426) (4,427)
Redeemable Common Stock,
accretion of discount..................... - - (129)
------------- ------------- --------------
Net (loss) applicable to Common shares...... $ (2,836) $ (2,426) $ (4,556)
============= ============= ==============
</TABLE>
The accompanying notes are an integral part of these Consolidated Financial
Statements.
43
<PAGE> 9
AMERICAN REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 6. INVESTMENTS IN REAL ESTATE ENTITIES (Continued)
$226,000 in return of capital distributions and $120,000 in profit
distributions from the partnership. See NOTE 8. "NOTES AND INTEREST PAYABLE".
In November 1994, the Company sold four apartment complexes to a newly formed
limited partnership in exchange for cash, a 27% limited partner interest in the
partnership and two mortgage notes receivable, secured by one of the properties
sold by the Company. In conjunction with the exchange transaction the Company
recorded a deferred gain of $5.6 million which is offset against the Company's
investment in the partnership. See NOTE 3. "NOTES AND INTEREST RECEIVABLE" and
NOTE 4. "REAL ESTATE."
In June 1995, the Company purchased the corporate general partner of a limited
partnership which owns apartment complexes in Illinois, Florida and Minnesota,
with a total of 900 units. The purchase price of the corporate general partner
was $628,000 in cash. The corporate general partner has a 1% interest in the
partnership which is subordinated to a priority return of the limited partner.
Set forth below are summary financial data for equity investees owned over 50%:
<TABLE>
<CAPTION>
1995 1994
-------- ----------
<S> <C> <C> <C>
Property and notes
receivable, net.............. $239,728 $ 253,067
Other assets.................. 53,202 37,073
Notes payable................. (338,534) (337,544)
Other liabilities............. (53,663) (44,419)
-------- ----------
Equity........................ $(99,267) $ (91,823)
======== ==========
<CAPTION>
1995 1994 1993
-------- ---------- -------------
<S> <C> <C> <C>
Revenues...................... $110,892 $ 107,546 $ 103,044
Depreciation.................. (10,268) (10,034) (10,168)
Interest...................... (34,956) (34,145) (34,699)
Operating expenses............ (69,572) (66,602) (65,972)
-------- ---------- -------------
(Loss) before gains on sale of
real estate and extra-
ordinary gains............... (3,904) (3,235) (7,795)
Gains on sale of real estate.. 7,701 8,252 -
Extraordinary gains........... - - 9,046
-------- ---------- -------------
Net income .................. $ 3,797 $ 5,017 $ 1,251
======== ========== =============
</TABLE>
63
<PAGE> 10
AMERICAN REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 6. INVESTMENTS IN REAL ESTATE ENTITIES (Continued)
The Company's equity share of:
<TABLE>
<CAPTION>
1995 1994 1993
------------- -------------- ------------
<S> <C> <C> <C>
(Loss) before gains on sale of
real estate and extra-
ordinary gains............... $ (1,767) $ (1,279) $ (2,584)
Gains on sale of real estate.. 1,884 1,923 -
Extraordinary gains........... - - 3,364
------------- -------------- ------------
Net income.................... $ 117 $ 644 $ 780
============= ============== ============
Set forth below are summary financial data for equity investees owned less than 50%:
<CAPTION>
1995 1994
------------- --------------
<S> <C> <C> <C>
Property and notes
receivable, net.............. $ 466,220 $ 427,384
Other assets.................. 61,697 52,454
Notes payable................. (318,161) (253,714)
Other liabilities............. (20,396) (28,608)
------------- --------------
Equity........................ $ 189,360 $ 197,516
============= ==============
<CAPTION>
1995 1994 1993
------------- -------------- ------------
<S> <C> <C> <C>
Revenues...................... $ 94,730 $ 74,093 $ 63,006
Depreciation.................. (13,950) (10,276) (8,816)
Provision for losses.......... (541) (1,429) (1,094)
Interest...................... (28,102) (20,264) (15,962)
Operating expenses............ (65,471) (54,213) (47,003)
------------- -------------- ------------
(Loss) before gains on sale of
real estate and extra-
ordinary gains.............. (13,334) (12,089) (9,869)
Gains on sale of real estate.. 5,822 6,375 389
Extraordinary gains........... 1,437 1,189 2,400
------------- -------------- ------------
Net (loss).................... $ (6,075) $ (4,525) $ (7,080)
============= ============== ============
The Company's equity share of:
<CAPTION>
1995 1994 1993
------------- -------------- ------------
<S> <C> <C> <C>
(Loss) before gains on sale of
real estate and extra-
ordinary gains............... $ (3,356) $ (1,250) $ (1,430)
Gains on sale of real estate.. 2,463 895 -
Extraordinary gains........... 783 273 -
------------- -------------- ------------
Net (loss).................... $ (110) $ (82) $ (1,430)
============= ============== ============
</TABLE>
The difference between the carrying value of the Company's investment and the
equivalent investee book value is being amortized over the life of the
properties held by each investee.
The Company's cash flow from the Trusts and NRLP is dependent on the ability of
each of the entities to make distributions. In the first quarter of 1993, CMET
and IORI resumed regular quarterly distributions,
63A
<PAGE> 11
SCHEDULE IV
AMERICAN REALTY TRUST, INC.
MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Periodic
Interest Maturity Payment Prior
Description Rate (1) Date (1) Terms Liens
- ----------------- --------- -------- ------------------------ ---------
<S> <C> <C> <C> <C>
FIRST MORTGAGE LOANS
- --------------------
Hall Land........................ 10.00% 08/94 Principal and interest due $ -
- --------- at maturity.
Secured by 4.2 acres of
residential land in Maricopa
County, Arizona.
Osceola Land..................... 12.00% 11/93 Principal and interest due -
- ------------ monthly.
Secured by unimproved land in
Osceola County, Florida.
Webster & Banc Boston............. Various Various Principal and interest -
- --------------------- monthly.
Secured by condominiums in Ft.
Lauderdale, Florida.
J. W. Sherman..................... 7.00% 08/98 Principal and interest -
- ------------- payments due monthly.
Secured by 1 co-op apartment in
Brooklyn, NY.
Nak Chung Building................ 8.00% 04/99 Interest due monthly. -
- ------------------ Principal to be paid down
Secured by restaurant in to $50,000 by May 1, 1997,
Los Angeles, California. balance due at maturity.
WRAPAROUND MORTGAGE LOANS
Las Vegas Plaza................... 9.74% 12/97 Principal and interest due 7,758
- --------------- monthly of $168,000 based
Secured by 93,320 square foot on 25 year amortization.
retail shopping center in Las
Vegas, Nevada
Continental Hotel................ 11.00% 07/96 Principal and interest of 3,542
- ----------------- $175,000 due monthly.
Secured by a hotel and casino
in Las Vegas, Nevada.
JUNIOR MORTGAGE LOANS
Williamsburg Hospitality
- ------------------------
House(3)......................... 9.75% 04/96 Pay greater of available 11,677
- ----- cash or 6% from 2/1/94 to
Secured by 297 room hotel in 7/1/94. Thereafter, pay
Williamsburg, Virginia. greater of available cash
or 8%.
NO. SO. II...................... 12.00% 09/96 Interest due monthly, with 1,317
- ---------- principal reductions of
Secured by shopping center in $25,000 due quarterly.
Columbia, South Carolina. Principal balance due at maturity.
</TABLE>
<TABLE>
<CAPTION>
Principal Amount of
Face Carrying Loan Subject to
Amount of Amount of Delinquent Principal
Description Mortgages Mortgages (2) or Interest
- ----------------- --------- ------------- --------------------
(dollars in thousands)
<S> <C> <C> <C>
FIRST MORTGAGE LOANS
- --------------------
Hall Land........................ $ 100 $ 112 $ 112
- ---------
Secured by 4.2 acres of
residential land in Maricopa
County, Arizona.
Osceola Land..................... 1,960 1,592 1,592
- ------------
Secured by unimproved land in
Osceola County, Florida.
Webster & Banc Boston............. 158 143 -
- ---------------------
Secured by condominiums in Ft.
Lauderdale, Florida.
J. W. Sherman..................... 32 31 -
- -------------
Secured by 1 co-op apartment in
Brooklyn, NY.
Nak Chung Building................ 100 100 -
- ------------------
Secured by restaurant in
Los Angeles, California.
WRAPAROUND MORTGAGE LOANS
Las Vegas Plaza................... 17,600 18,458 -
- ---------------
Secured by 93,320 square foot
retail shopping center in Las
Vegas, Nevada
Continental Hotel................ 22,000 22,713 -
- -----------------
Secured by a hotel and casino
in Las Vegas, Nevada.
JUNIOR MORTGAGE LOANS
Williamsburg Hospitality
- ------------------------
House(3)......................... 8,862 9,422 -
- -----
Secured by 297 room hotel in
Williamsburg, Virginia.
NO. SO. II...................... 852 279 -
- ----------
Secured by shopping center in
Columbia, South Carolina.
</TABLE>
76
<PAGE> 12
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Security Ownership of Certain Beneficial Owners. The following table sets
forth the ownership of the Company's Common Stock both beneficially and of
record, both individually and in the aggregate, for those persons or entities
known by the Company to be the owner of more than 5% of the shares of the
Company's Common Stock as of the close of business on March 15, 1996.
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and Address of Beneficial Owner Beneficial Ownership Class (1)
- ------------------------------------ ---------------------- ----------
<S> <C> <C>
Basic Capital Management, Inc. 2,465,930 (2) 42.1%
10670 N. Central Expressway
Suite 300
Dallas, Texas 75231
Davister Corp./Nanook Partners, L.P. 834,718 (3) 14.2%
10670 N. Central Expressway
Suite 640
Dallas, TX 75231
Rosedale Equities, Inc. 762,352 (4) 13.0%
10670 N. Central Expressway
Suite 300
Dallas, Texas 75231
Continental Mortgage and Equity
Trust 409,044 (5) 7.0%
10670 N. Central Expressway
Suite 300
Dallas, Texas 75231
Ryan T. Phillips 2,515,096 (2)(6) 42.9%
10670 N. Central Expressway
Suite 600
Dallas, Texas 75231
</TABLE>
- --------------------------
(1) Percentages are based upon 5,858,238 shares outstanding as of March 15,
1996.
(2) Includes 2,465,930 shares owned by BCM over which Ryan T. Phillips may be
deemed to be the beneficial owner by virtue of his position as a director
of BCM. Mr. Phillips disclaims beneficial ownership of such shares.
(3) Each of the directors of Davister Corp., Ronald F. Akin, Ronald F. Bruce
and Richard A. Green, may be deemed to be the beneficial owners by virtue
of their positions as directors of Davister Corp. Messrs. Akin, Bruce and
Green disclaim beneficial ownership of such shares.
(4) Rosedale Equities, Inc. is a wholly owned subsidiary of the Company. Such
shares are pledged as additional collateral for loans to the Company.
90
<PAGE> 13
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT (Continued)
(5) Each of the Trustees of CMET, Ted P. Stokely, John P. Parsons, Bennett B.
Sims, Edward L. Tixier, Martin L. White and Edward G. Zampa, may be deemed
to be the beneficial owners by virtue of their positions as Trustees of
CMET. The Trustees of CMET disclaim such beneficial ownership.
(6) Includes 49,166 shares owned by the Gene E. Phillips' Children's Trust.
Ryan T. Phillips is a beneficiary of such trust.
90A
<PAGE> 14
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS (Continued)
Certain Business Relationships (Continued)
The Company owns an equity interest in each of CMET, IORI, TCI, NRLP and SAMLP.
In addition, CMET and NRLP own an equity interest in the Company and SAMLP owns
an equity interest in TCI. See ITEM 1. "PROPERTIES - Investments in Real
Estate Investment Trusts and Real Estate Partnerships."
Related Party Transactions
In January 1992, the Company entered into a partnership agreement with an
entity affiliated with Donald C. Carter, a private investor, to acquire 287
developed residential lots adjacent to the Company's other residential lots in
Fort Worth, Texas. The Company paid $717,000 in cash for its 50% general
partner interest. The partnership agreement designates the Company as managing
general partner. The partnership agreement also provides each of the partners
with a guaranteed 10% return on their respective investments. Through December
31, 1994, 60 of the lots were sold and during 1995 an additional 42 lots were
sold and at December 31, 1995, 155 lots remained to be sold. Through December
31, 1995, Mr. Carter had received $226,000 in return of capital distributions
and $120,000 in profit distributions from the partnership.
In June 1992, the Company obtained a $3.3 million loan from Mr. Carter. The
note was collateralized by an assignment of the Company's interest in a
partnership which owns residential lots in Fort Worth, Texas and the Company's
interest in undeveloped land in downtown Atlanta, Georgia. The loan also
provided for Mr. Carter's participation in the proceeds from either the sale or
refinancing of the Company's land in Atlanta, Georgia. Mr. Carter also had the
right to put his participation to the Company in exchange for a payment of
$623,000. On December 2, 1993, Mr. Carter exercised his put which required
full payment by the Company by January 2, 1996. The put was paid in full in
May 1995 and the note was paid off at its May 11, 1995 maturity.
The Company paid BCM and its affiliates $1.2 million in 1995 and 1994 and $1.3
million in 1993 in advisory and mortgage servicing fees; $905,000 in 1995,
$497,000 in 1994 and $180,000 in 1993 in real estate brokerage commissions;
$95,000 in 1993, $25,000 in 1994 and $102,000 in 1993 in loan arrangement fees
and $1.2 million in 1995, $899,000 in 1994 and $348,000 in 1993 in property and
construction management fees and leasing commissions, net of property
management fees paid to subcontractors, other than Carmel Realty. In addition,
as provided in the Advisory Agreement, BCM received cost reimbursements from
the Company of $516,000 in 1995, $434,000 in 1994 and $288,000 in 1993.
[THIS SPACE INTENTIONALLY LEFT BLANK.]
94
