<PAGE>
FORM 10-Q/A
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel. No. 34-26589, eff. 4/12/89.)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended September 30, 1994
Commission File Number: 1-12286
MID-ATLANTIC REALTY TRUST
(Exact name of registrant as specified in its charter)
MARYLAND 52-1832411
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1306 Concourse Drive, Suite 200, Linthicum 21090-0497
(Address of principal executive offices) (Zip Code)
(410) 684-2000
(Registrant's telephone number, including area code)
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 Sections 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
6,291,407 Common Shares were outstanding as of September 30, 1994.
<PAGE>1
MID-ATLANTIC REALTY TRUST
AND SUBSIDIARIES
Part I. FINANCIAL INFORMATION
Item 1. CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF OPERATIONS
CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Part II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Item 2. CHANGES IN SECURITIES
Item 3. DEFAULTS UPON SENIOR SECURITIES
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Item 5. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
2
<PAGE>2
Part I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
MID-ATLANTIC REALTY TRUST
Consolidated Balance Sheets
As of
September 30, 1994 December 31, 1993
(UNAUDITED)
ASSETS
Properties:
Operating properties................$ 139,784,300 127,713,850
Development operations ............. 1,828,629 2,128,434
Property held for development or sale 9,096,670 9,169,232
------------ ------------
150,709,599 139,011,516
Cash and cash equivalents ........... 30,868 687,108
Notes and accounts
receivable - tenants and other...... 1,098,121 2,381,836
Due from joint venture partners ...... 1,896,931 1,701,708
Prepaid expenses and deposits ....... 931,841 403,075
Net assets of properties to be sold .. - 449,219
Deferred financing costs ............. 3,537,291 3,928,590
------------ ------------
$ 158,204,651 148,563,052
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Notes payable ......................$ 16,341,731 2,800,000
Accounts payable and accrued expenses 2,225,308 4,396,992
Mortgages payable .................. 53,369,825 53,694,372
Convertible subordinated debentures. 60,000,000 60,000,000
Deferred income..................... 853,016 133,468
Minority interest in
consolidated joint ventures ...... 322,269 250,432
------------ ------------
133,112,149 121,275,264
Shareholders' Equity:
Preferred shares of beneficial interest,
$.01 par value, authorized 2,000,000 shares,
issued and outstanding, none ..... - -
Common shares of beneficial interest
and stock, $.01 par value,
authorized 100,000,000 shares, issued
and outstanding, 6,291,407 shares 62,914 62,914
Additional paid-in capital.......... 42,602,505 42,602,505
Accumulated deficit ............... (17,572,917) (15,377,631)
------------ ------------
25,092,502 27,287,788
------------ ------------
$ 158,204,651 148,563,052
============ ============
See accompanying notes to consolidated financial statements.
3
<PAGE>3
<PAGE>
MID-ATLANTIC REALTY TRUST
Consolidated Statements of Operations
(UNAUDITED)
Mid-Atlantic Mid-Atlantic
Realty Trust Realty Trust
Nine Months Ended from 9/11/93 to
September 30, 1994 9/30/93
REVENUES:
Rentals ............................$ 16,119,996 1,021,098
Gain on properties held for sale and
residential sales, net ............ 49,495 -
Other .............................. 699,463 69,582
------------ ------------
16,868,954 1,090,680
------------ ------------
COSTS AND EXPENSES:
Interest .......................... 7,571,071 554,509
Depreciation and amortization
of property and improvements ..... 3,746,255 266,901
Operating ......................... 2,517,944 146,733
General and administrative ......... 1,165,534 58,622
Unrecoverable development costs .... - -
------------ ------------
15,000,804 1,026,765
------------ ------------
EARNINGS (LOSS) FROM OPERATIONS
BEFORE MINORITY INTEREST .......... 1,868,150 63,915
Minority interest (expense) benefit... (435,213) (25,294)
------------ ------------
EARNINGS (LOSS) FROM OPERATIONS ..... 1,432,937 38,621
Gain on sales of operating properties 335,363 -
------------ ------------
EARNINGS (LOSS) BEFORE INCOME TAXES .. 1,768,300 38,621
Income taxes benefit ................. - -
------------ ------------
EARNINGS (LOSS) BEFORE
EXTRAORDINARY ITEM .................. 1,768,300 38,621
Extraordinary Item ................... - -
------------ ------------
NET EARNINGS (LOSS) ..................$ 1,768,300 $38,621
============ ============
EARNINGS (LOSS) BEFORE
EXTRAORDINARY ITEM PER SHARE ........ $0.28 $0.01
============ ============
Extraordinary Item ................... - -
============ ============
NET EARNINGS (LOSS) PER SHARE ........ $0.28 $0.01
============ ============
See accompanying notes to consolidated financial statements.
MID-ATLANTIC REALTY TRUST
Consolidated Statements of Operations
(UNAUDITED)
BTR Realty, Inc.
(Predecessor
Company)
from 01/01/93
to 9/10/93
REVENUES:
Rentals ............................$ 14,620,418
Gain on properties held for sale and
residential sales, net ............ 55,026
Other .............................. 228,292
------------
14,903,736
------------
COSTS AND EXPENSES:
Interest .......................... 9,278,198
Depreciation and amortization
of property and improvements ..... 3,233,530
Operating ......................... 2,649,341
General and administrative ......... 1,053,295
Unrecoverable development costs .... 1,278,817
------------
17,493,181
------------
EARNINGS (LOSS) FROM OPERATIONS
BEFORE MINORITY INTEREST .......... (2,589,445)
Minority interest (expense) benefit... 124,129
------------
EARNINGS (LOSS) FROM OPERATIONS ..... (2,465,316)
Gain on sales of operating properties -
------------
EARNINGS (LOSS) BEFORE INCOME TAXES .. (2,465,316)
Income taxes benefit ................. 408,210
------------
EARNINGS (LOSS) BEFORE
EXTRAORDINARY ITEM .................. (2,057,106)
Extraordinary Item ................... (548,323)
------------
NET EARNINGS (LOSS) ..................$ (2,605,429)
============
EARNINGS (LOSS) BEFORE
EXTRAORDINARY ITEM PER SHARE ........ ($0.24)
============
Extraordinary Item ................... ($0.06)
============
NET EARNINGS (LOSS) PER SHARE ........ ($0.30)
============
See accompanying notes to consolidated financial statements.
4
<PAGE>4<PAGE>
MID-ATLANTIC REALTY TRUST
Consolidated Statements of Operations
(UNAUDITED)
Mid-Atlantic Mid-Atlantic
Realty Trust Realty Trust
Three Months Ended from 9/11/93 to
September 30, 1994 9/30/93
REVENUES:
Rentals ............................$ 5,145,478 1,021,098
Gain on properties held for sale and
residential sales, net ............ 49,495 -
Other .............................. 249,693 69,582
------------ ------------
5,444,666 1,090,680
------------ ------------
COSTS AND EXPENSES:
Interest .......................... 2,493,518 554,509
Depreciation and amortization
of property and improvements ..... 1,264,874 266,901
Operating ......................... 859,166 146,733
General and administrative ......... 383,582 58,622
Unrecoverable development costs .... - -
------------ ------------
5,001,140 1,026,765
------------ ------------
EARNINGS (LOSS) FROM OPERATIONS
BEFORE MINORITY INTEREST .......... 443,526 63,915
Minority interest (expense) benefit... (126,065) (25,294)
------------ ------------
EARNINGS (LOSS) FROM OPERATIONS ..... 317,461 38,621
Gain on sales of operating properties - -
------------ ------------
EARNINGS (LOSS) BEFORE INCOME TAXES .. 317,461 38,621
Income taxes benefit ................. - -
------------ ------------
EARNINGS (LOSS) BEFORE
EXTRAORDINARY ITEM .................. 317,461 38,621
Extraordinary Item ................... - -
------------ ------------
NET EARNINGS (LOSS) ..................$ 317,461 $38,621
============ ============
EARNINGS (LOSS) BEFORE
EXTRAORDINARY ITEM PER SHARE ........ $0.05 $0.01
============ =============
Extraordinary Item ................... - -
============ ============
NET EARNINGS (LOSS) PER SHARE ........ $0.05 $0.01
============ ============
See accompanying notes to consolidated financial statements.
MID-ATLANTIC REALTY TRUST
Consolidated Statements of Operations
(UNAUDITED)
BTR Realty, Inc.
(Predecessor
Company)
from 07/01/93
to 9/10/93
REVENUES:
Rentals ............................$ 3,902,974
Gain on properties held for sale and
residential sales, net ............ 23,525
Other .............................. (874)
------------
3,925,625
------------
COSTS AND EXPENSES:
Interest .......................... 2,582,537
Depreciation and amortization
of property and improvements ..... 923,222
Operating ......................... 837,200
General and administrative ......... 294,594
Unrecoverable development costs .... 315,000
------------
4,952,553
------------
EARNINGS (LOSS) FROM OPERATIONS
BEFORE MINORITY INTEREST .......... (1,026,928)
Minority interest (expense) benefit... 63,020
------------
EARNINGS (LOSS) FROM OPERATIONS ..... (963,908)
Gain on sales of operating properties -
------------
EARNINGS (LOSS) BEFORE INCOME TAXES .. (963,908)
Income taxes benefit ................. 444,210
------------
EARNINGS (LOSS) BEFORE
EXTRAORDINARY ITEM .................. (519,698)
Extraordinary Item ................... (548,323)
------------
NET EARNINGS (LOSS) ..................$ (1,068,021)
============
EARNINGS (LOSS) BEFORE
EXTRAORDINARY ITEM PER SHARE ........ ($0.06)
============
Extraordinary Item ................... ($0.06)
============
NET EARNINGS (LOSS) PER SHARE ........ ($0.12)
============
See accompanying notes to consolidated financial statements.
5
<PAGE>5<PAGE>
MID-ATLANTIC REALTY TRUST
Consolidated Statements of Cash Flows
(UNAUDITED)
Mid-Atlantic Mid-Atlantic
Realty Trust Realty Trust
Nine Months Ended from 9/11/93 to
September 30, 1994 9/30/93
Cash flows from operating activities:
Net earnings (loss) ................$ 1,768,300 38,621
Adjustments to reconcile net earnings
(loss) to net cash provided by
operating activities:
Gain on sales of properties held for
sale and residential sales, net . (49,495) -
Gain on sales of operating properties (335,363) -
Unrecoverable development costs .. - -
Extraordinary loss on early
extinguishment of debt .......... - -
Depreciation and amortization .... 3,746,255 266,901
Deferred income taxes benefit .... - -
Minority interest in earnings(loss),net 435,213 25,294
Changes in operating assets and liabilities:
Decrease in operating assets .... 754,949 594,792
(Decrease)increase in
operating liabilities .......... (1,452,136) (920,176)
------------ ------------
Total adjustments ........... 3,099,423 (33,189)
------------ ------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 4,867,723 5,432
------------ ------------
Cash flows from investing activities:
Additions to properties ............ (15,681,491) (292,129)
Proceeds from sales of properties... 1,471,602 -
(Payments to) receipts from minority
partners, net (558,599) (33,932)
------------ ------------
NET CASH (USED IN) PROVIDED BY
INVESTING ACTIVITIES .... (14,768,488) (326,061)
------------ ------------
Cash flows from financing activities:
Payments on construction loans payable - -
Proceeds from mortgages payable .... - -
Principal payments on mortgages payable (324,547) (3,039,245)
Proceeds from notes payable ....... 19,056,366 -
Principal payments on notes payable (5,514,635) (87,028,884)
Proceeds from sale of convertible
subordinated debentures ........... - 60,000,000
Proceeds from sale of common shares - 33,454,873
Additions to deferred finance costs (9,073) (2,763,274)
Stock issued - options exercised
in compensation plan ............. - -
Stock canceled - employee note payment - -
Dividends paid .................... (3,963,586) -
------------ ------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES ..... 9,244,525 623,470
------------ ------------
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS ............... (656,240) 302,841
CASH AND CASH EQUIVALENTS,
beginning of period ................ 687,108 1,221,997
------------ ------------
CASH AND
CASH EQUIVALENTS, end of period ...$ 30,868 1,524,838
============ ============
See accompanying notes to consolidated financial statements.
<PAGE>
MID-ATLANTIC REALTY TRUST
Consolidated Statements of Cash Flows
(UNAUDITED)
BTR Realty, Inc.
(Predecessor
Company)
from 01/01/93 to
9/10/93
Cash flows from operating activities:
Net earnings (loss) ................$ (2,605,429)
Adjustments to reconcile net earnings
(loss) to net cash provided by
operating activities:
Gain on sales of properties held for
sale and residential sales, net . (7,976)
Gain on sales of operating properties -
Unrecoverable development costs .. 1,188,817
Extraordinary loss on early
extinguishment of debt .......... 273,308
Depreciation and amortization .... 3,233,530
Deferred income taxes benefit .... (460,570)
Minority interest in earnings(loss),net (124,129)
Changes in operating assets and liabilities:
Decrease in operating assets .... 555,067
(Decrease)increase in
operating liabilities .......... 1,987,017
------------
Total adjustments ........... 6,645,064
------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 4,039,635
------------
Cash flows from investing activities:
Additions to properties ............ (1,334,859)
Proceeds from sales of properties... 1,646,748
(Payments to) receipts from minority
partners, net 170,224
------------
NET CASH (USED IN) PROVIDED BY
INVESTING ACTIVITIES .... 482,113
------------
Cash flows from financing activities:
Payments on construction loans payable (37,831,945)
Proceeds from mortgages payable .... 2,682,600
Principal payments on mortgages payable(46,709,513)
Proceeds from notes payable ....... 90,832,649
Principal payments on notes payable (7,475,452)
Proceeds from sale of convertible
subordinated debentures ........... -
Proceeds from sale of common shares -
Additions to deferred finance costs -
Stock issued - options exercised
in compensation plan ............. 225,258
Stock canceled - employee note payment (177,051)
Dividends paid .................... (4,944,879)
------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES ..... (3,398,333)
------------
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS ............... 1,123,415
CASH AND CASH EQUIVALENTS,
beginning of period ................ 98,582
------------
CASH AND
CASH EQUIVALENTS, end of period ...$ 1,221,997
============
See accompanying notes to consolidated financial statements.
6
<PAGE>6
<PAGE>
MID-ATLANTIC REALTY TRUST
Notes To Consolidated Financial Statements
(UNAUDITED)
ORGANIZATION
Mid-Atlantic Realty Trust (the Company, or MART) was incorporated on June
29, 1993 and commenced operations effective with the completion of its
initial public share offering on September 11, 1993. The Company is the
successor to the operations of BTR Realty, Inc. (the predecessor to the
company), (BTR), and qualifies as a real estate investment trust (REIT) for
Federal income tax purposes.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated balance sheet as of September 30, 1994 and the
consolidated statement of operations for the Company for the periods ended
September 30, 1994 and September 30, 1993 and the consolidated statement of
cash flows for the periods ended September 30, 1994 and September 30, 1993,
have been prepared by the Company without audit. In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position and the results of
operations have been included. The results of operations for the periods
ended September 30, 1994 are not necessarily indicative of the operating
results for the full year.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these consolidated
financial statements be read in conjunction with the consolidated financial
statements and notes thereto included in the Mid-Atlantic Realty Trust
December 31, 1993 Annual Report to Shareholders.
EARNINGS (LOSS) PER SHARE
Earnings (Loss) per share of common share and common share equivalents were
computed by dividing net loss or net earnings by the weighted average number
of common share and common share equivalents outstanding for each period.
The weighted average number of common shares and common share equivalents for
the period ended September 30, 1994 was 6,291,407. The weighted average
number of common shares and common share equivalents for the period January
1, 1993 thru September 10, 1993 was 8,512,718. The weighted average number of
common share and common share equivalents for the period July 1, 1993 thru
September 10, 1993 was 8,530,381.
The Company sold $60,000,000 in convertible subordinated debentures in
September, 1993. The debentures, which are convertible at $10.50 per share,
if fully converted, would produce an additional 5,714,286 shares.
Pursuant to the 1993 Omnibus Share Plan (Plan), the Company authorized on
February 1, 1994 the availability of 300,000 shares for the Plan. Trustees,
officers and key employees of the Company, are eligible for the Plan. At
February 1, 1994, the executive compensation committee of the Board of
Trustees granted to trustees, officers and key employees 256,000 option
shares at an option price of $10.50 per share with 89,333 shares vesting on
February 1, 1994 and the balance vesting over the next 2 years. The average
market price of MART shares for the period ended September 30, 1994 was $9.22
per share and the closing market price at September 30, 1994 was $9.25 per
share. No options were exercised during the period ended September 30, 1994
and based on the market value of MART shares, the options, if converted,
would be anti-dilutive producing 10,701 fewer weighted average shares for the
nine month period ended September 30, 1994 and 12,072 fewer weighted average
shares for the three month period ended September 30, 1994.
UNRECOVERABLE DEVELOPMENT COSTS
The $1,278,817 unrecoverable development cost included on BTR's Statement
of Operations represents a write-down to net realizable value of two
residential properties under contract for sale and one property held for
sale. The write-down reduced Operating Properties by $499,093, and
Development Operations by $489,724, and Property Held for Development or Sale
by $200,000. The balance of $90,000 is an accrual for costs required in order
to complete the sale of the residential Operating property.The sales are
pursuant to a divestiture plan further described in the July 19, 1993 proxy
statement.
INCOME TAXES BENEFIT, NET
The income taxes benefit, net, in BTR, for the period January 1, 1993 thru
September 10, 1993 includes a currently payable income tax expense of
$52,360, offset by a deferred income tax benefit of $460,570. The income
taxes benefit, net, in BTR, for the period July 1, 1993 thru September 10,
1993 includes a currently payable income tax expense of $22,360, offset by a
deferred income tax benefit of$466,570. At September 10, 1993 the balance of
deferred income taxes payable of $466,570 in BTR was recognized as an income
tax benefit. It was determined by BTR that it was more likely than not that
there would be no payment in the future of any deferred tax temporary
differences due to the expected merger with the Company (a non-taxable Real
Estate Investment Trust). This was in accordance with the Financial
Accounting Standards Board Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes." adopted by BTR January 1, 1992.
SHAREHOLDERS' EQUITY
During the nine months ended September 30, 1994, shareholders' equity
changed for the following items:
- Net earnings of $1,768,300.
- Dividend paid by MART of $3,963,586.
7
<PAGE>7
<PAGE>
Part I. FINANCIAL INFORMATION
Item 2.
MID-ATLANTIC REALTY TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion compares the operations for the nine and three
month periods ended September 30, 1994 with the operations for the nine and
three month periods ended September 30, 1993, which includes the summation of
the Company's and BTR's operations.
Comparison of nine months ended September 30, 1994 to nine months ended
September 30, 1993
Rental revenues increased by $478,000 or 3% to $16,120,000 for the nine
months ended September 30, 1994 from $15,642,000 for the nine months ended
September 30, 1993. Net increases in occupancy and CPI rates resulted in
rental increases of approximately $823,000. The purchase of Timonium Mall in
October, 1993 contributed to increased revenues by approximately $562,000.The
increases were offset by a $690,000 decrease in revenues attributable to the
sale in February, 1994 and discontinuation of operations in September, 1993
of Orchard Landing Apartments and net decreases in percentage rent of $31,000
and other rental decreases of $186,000.
Gains on properties held for sale and residential sales decreased by
$5,000.
Other income increased by $402,000 to $700,000 from $298,000 primarily due
to additional interest income from partner notes of $374,000 and by other
changes in other income.
As a result of the above changes total revenues increased by $875,000 to
$16,869,000 from $15,994,000.
Interest expense decreased by $2,262,000 to $7,571,000 from $9,833,000
primarily due to the payoff in September, 1993 of higher fixed rate mortgage
debt which was replaced by the sale of lower interest convertible
subordinated debentures and the sale of common shares. Approximately
$1,443,000 in interest expense decreases for the period can be attributed to
the payoff of mortgage debt and replacement with debentures and common
shares. Approximately $472,000 in interest expense decreases can be related
to the sale in 1993 of the two residential projects, Orchard Landing &
Harbour Island.
Depreciation and amortization increased by $246,000 to $3,746,000 from
$3,500,000 primarily due to depreciation increases of approximately $374,000
related to the amortization of debenture costs issued in September, 1993 and
the purchase in October, 1993 of the Timonium Mall operating property and
increased tenant improvements in Gateway II Office, offset by depreciation
decreases of $111,000 related to the sale of Orchard Landing.
Operating expenses decreased by $278,000 to $2,518,000 from $2,796,000
primarily due to a decrease in operating expenses related to the sale and
discontinuation of Orchard Landing $321,000 and Harbour Island $83,000 offset
by increases related to the purchase of Timonium Mall, $168,000.
General and administrative expenses increased by $54,000 to $1,166,000 from
$1,112,000 due primarily to increases in the following: gross payroll costs
of 27,000, a reduction in capitalized payroll of $84,000, and $59,000 in
other general and administrative expense increases offset by decreases in
professional fees of $67,000 and stock compensation costs of $49,000.
Unrecoverable development costs decreased by $1,279,000 due to a write-down
to net realizable value of two residential properties under contract of sale
pursuant to a divestiture plan further described in the July 19, 1993 proxy
statement and the write-down to net realizable value of property held for
sale.
Minority interest decreased by $534,000 to an expense of $435,000 from a
benefit of $99,000 generally due to higher earnings in minority interest
ventures.
Earnings (loss) from operations increased by $3,860,000 to earnings of
$1,433,000 from a loss of $2,427,000. In the nine month period ended
September 30, 1994, MART recognized a gain on sales of operating properties
of $335,000 (which included gains on the sales of Plantation Bowling Center
of $279,000 and Orchard Landing Apartments of $56,000), combined with the
earnings from operations resulted in net earnings of $1,768,000 for the
period. For the nine month period ended September 30, 1993, BTR had an income
tax benefit of $408,000, and an extraordinary loss due to early
extinguishment of debt of $548,000, which, when combined with the loss from
operations, resulted in a net loss of $2,567,000 for the period.
Continued
8
<PAGE>8
<PAGE>
MID-ATLANTIC REALTY TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Comparison of three months ended September 30, 1994 to three months ended
September 30, 1993
Rental revenues increased by $221,000 or 4% to $5,145,000 for the three
months ended September 30, 1994 from $4,924,000 for the three months ended
September 30, 1993. Net increases in occupancy and CPI rates resulted in
rental increases of approximately $306,000. The purchases of Timonium Mall in
October, 1993 and the Shoppes at Easton in September, 1994 increased revenues
by approximately $223,000. The rental revenue increases were offset by a
$243,000 decrease in revenues attributable to the sale in February, 1994 and
discontinuation of operations in September, 1993 if Orchard Landing
Apartments and other rental decreases of $65,000.
Gains on properties held for sale and residential sales increased by
$26,000. The increase included a $49,000 gain in September, 1994 on the sale
of a land parcel in Fallston offset by a $23,000 gain on the sales of
residential properties at Harbour Island in July, 1993.
Other income increased by $181,000 to $250,000 from $69,000 primarily due
to a net loss of $102,000 in note reserves in September, 1993 and additional
interest income from partner notes of $68,000 and by other changes in other
income.
As a result of the above changes total revenues increased by $428,000 to
$5,445,000 from $5,016,000.
Interest expense decreased by $643,000 to $2,494,000 from $3,137,000
primarily due to the payoff in September, 1993 of higher fixed rate mortgage
debt which was replaced by the sale of lower interest convertible
subordinated debentures and the sale of common shares. Approximately $467,000
in interest expense decreases for the period can be attributed to the payoff
of mortgage debt and replacement with debentures and common shares.
Approximately $144,000 in interest expense decreases can be related to the
sale in 1993 of the two residential projects, Orchard Landing and Harbour
Island.
Depreciation and amortization increased by $75,000 to $1,265,000 from
$1,190,000 primarily due to depreciation increases of approximately $104,000
related to the amortization of debenture costs issued in September, 1993 and
the purchase in October, 1993 of the Timonium Mall operating property and
increased tenant improvements in Gateway II Office, offset by depreciation
decreases of $36,000 related to the sale of Orchard Landing.
Operating expenses decreased by $125,000 to $859,000 from $984,000
primarily due to a decrease in operating expenses related to the sale and
discontinuation of Orchard Landing $115,000 and Harbour Island $49,000 offset
by increases related to the purchase of Timonium Mall, $58,000.
General and administrative expenses increased by $30,000 to $383,000 from
$353,000 due primarily to increases in the following: a reduction in
capitalized payroll of $24,000, and $6,000 in other net general and
administrative expense changes.
Unrecoverable development costs decreased by $315,000 due to a write-down
to net realizable value of a residential property under contract of sale
pursuant to a divestiture plan further described in the July 19, 1993 proxy
statement and the write-down to net realizable value of land held for sale.
Minority interest decreased by $164,000 to an expense of $126,000 from a
benefit of $38,000 generally due to higher earnings in minority ventures.
Earnings (loss) from operations increased by $1,242,000 to earnings of
$317,000 from a loss of $925,000. In the three month period ended September
30, 1994, MART had net earnings of $317,000 for the period. For the three
month period ended September 30, 1993, BTR had an income tax benefit of
$444,000, and an extraordinary loss due to early extinguishment of debt of
$548,000, which, when combined with the loss from operations, resulted in a
net loss of $1,029,000 for the period.
9
<PAGE>9
<PAGE>
MID-ATLANTIC REALTY TRUST
Part II. OTHER INFORMATION
Item 1. Legal Proceedings - In the ordinary course of business, the
Company is involved in legal proceedings. However, there are no material
legal proceedings pending against the Company.
Item 2. Changes in Securities - None
Item 3. Defaults upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holder - None
Item 5. Other Information -
Pro Forma Data
MID-ATLANTIC REALTY TRUST
The following sets forth summary financial data on an actual and pro forma
basis. Management believes the following data should be used as a
supplement to the historical statements of operations. The data should be
read in conjunction with the historical financial statements and the notes
thereto for MART. The pro forma financial data is unaudited and is not
necessarily indicative of the results which actually would have occurred if
the transactions had been consummated at January 1, 1992, nor does it purport
to represent the financial position and results of operations for future
periods. The following assumes the MART public offering took place on
January 1, 1992.
Summary Actual and Pro Forma Financial Data
(In thousands, except per share data)
Nine months ended Three months ended
September 30, September 30,
MART BTR MART BTR
Actual Pro Forma Actual Pro Forma
1994 1993 1994 1993
Revenues $16,869 15,291 $5,445 4,775
Earnings (loss) $1,768 788 $317 (58)
Earnings (loss) per share $0.28 0.13 $0.05 (0.01)
OTHER FINANCIAL DATA:
Funds from operations (FFO) (1) $5,130 4,370 $1,533 1,150
Funds from operations -
fully diluted $8,590 7,801 $2,677 2,294
Weighted average number of
shares outstanding - primary 6,291 6,291 6,291 6,291
Weighted average number of shares
outstanding - fully diluted 12,005 12,005 12,005 12,005
Nine months ended
SELECTED CASH FLOW DATA: September 30, 1994
Net cash flow provided by
operating activities $4,868
(1) Funds from operations as defined by the National Association of Real
Estate Investment Trusts, Inc. (NAREIT) - Funds from operations means 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. The presentation of funds
from operations is not normally included in financial statements prepared in
accordance with generally accepted accounting principles (GAAP).
Item 6. Exhibits and Reports on Form 8-K - None
10
<PAGE>10
<PAGE>
MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements 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.
MID-ATLANTIC REALTY TRUST AND
SUBSIDIARIES
(Registrant)
Date 11/15/94 By /s/ F. Patrick Hughes
F. Patrick Hughes
President
Principal Executive Officer
Date 11/15/94 By /s/ Paul G. Bollinger
Paul G. Bollinger
Controller
Principal Financial Officer
11
<PAGE>11
MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements 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.
MID-ATLANTIC REALTY TRUST AND
SUBSIDIARIES
(Registrant)
Date 12/30/94 By /s/ F. Patrick Hughes
F. Patrick Hughes
President
Principal Executive Officer
Date 12/30/94 By /s/ Paul G. Bollinger
Paul G. Bollinger
Controller
Principal Financial Officer
12
<PAGE>12
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 31
<SECURITIES> 0
<RECEIVABLES> 1,098
<ALLOWANCES> 361
<INVENTORY> 0
<CURRENT-ASSETS><F1> 0
<PP&E> 150,710
<DEPRECIATION> 35,790
<TOTAL-ASSETS> 158,205
<CURRENT-LIABILITIES><F1> 0
<BONDS> 113,370
<COMMON> 63
0
0
<OTHER-SE> 25,030
<TOTAL-LIABILITY-AND-EQUITY> 158,205
<SALES> 0
<TOTAL-REVENUES> 16,869
<CGS> 0
<TOTAL-COSTS> 15,001
<OTHER-EXPENSES> 435
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,571
<INCOME-PRETAX> 1,768
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,768
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,768
<EPS-PRIMARY> .28
<EPS-DILUTED> .45
<F1>Mid-Atlantic Realty Trust (MART) is in the specialized real estate
industry for which the current/noncurrent distinction is deemed in practice
to have little or no relevance. Therefore, MART prepares unclassified
balance sheets which do not report current assets or current liabilities.
</F1>
</TABLE>
