<PAGE>
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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 quarterly period ended June 30, 1997
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.)
170 West Ridgely Road, Suite 300, Lutherville 21093
(Address of principal executive offices) (Zip Code)
(410) 684-2000
(Registrant's telephone number, including area code)
1302 Concourse Drive - Suite 202, Linthicum, MD 21090
(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 (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
8,293,770 Common Shares were outstanding as of July 21, 1997.
<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
<PAGE> 2
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
MID-ATLANTIC REALTY TRUST
Consolidated Balance Sheets
<TABLE>
<CAPTION>
As of
June 30, December 31,
1997 1996
(UNAUDITED)
<S> <C> <C>
ASSETS
Properties:
Operating properties................$ 196,781,150 200,563,845
Less accumulated depreciation and
amortization ................... 44,246,351 42,702,472
------------- -------------
152,534,799 157,861,373
Development operations ............. 8,637,983 2,866,625
Property held for development or sale 6,752,980 6,828,311
------------ -------------
167,925,762 167,556,309
Cash and cash equivalents ........... 2,563,713 1,013,838
Notes and accounts
receivable - tenants and other...... 713,705 1,373,113
Prepaid expenses and deposits ....... 84,446 896,798
Deferred financing costs ............. 1,885,289 2,438,183
------------ -------------
$ 173,172,915 173,278,241
============ =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses$ 4,188,582 4,518,588
Notes payable ....................... 16,000,000 16,400,000
Construction loan payable ........... 2,829,202 -
Mortgages payable ................... 69,785,187 70,210,495
Convertible subordinated debentures.. 36,186,000 47,195,000
Deferred income...................... 819,090 984,261
Minority interest in
consolidated joint ventures ....... 2,731,078 3,158,595
------------ -------------
132,539,139 142,466,939
Shareholders' Equity:
Preferred shares of beneficial interest,
$.01 par value, authorized 2,000,000 shares,
issued and outstanding, none ..... - -
Common shares of beneficial interest,
$.01 par value, authorized
100,000,000, issued
and outstanding, 8,277,867 and
7,225,103, respectively .......... 82,779 72,251
Additional paid-in capital.......... 63,313,183 52,635,713
Distributions in excess of accumulated
earnings .................... (22,762,186) (21,896,662)
------------ ------------
40,633,776 30,811,302
------------ ------------
$173,172,915 173,278,241
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 3
<PAGE>
MID-ATLANTIC REALTY TRUST
Consolidated Statements of Operations
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1997 1996
<S> <C> <C>
REVENUES:
Rentals ............................$ 13,760,586 12,907,312
Tenant recovery .................... 2,489,336 2,355,782
Other .............................. 147,175 497,171
------------ -----------
16,397,097 15,760,265
COSTS AND EXPENSES:
Interest .......................... 5,362,560 6,298,334
Depreciation and amortization
of property and improvements ..... 2,749,266 2,670,734
Operating ......................... 4,223,257 4,228,320
General and administrative ......... 1,134,746 974,677
------------ -----------
13,469,829 14,172,065
EARNINGS FROM OPERATIONS
BEFORE MINORITY INTEREST .......... 2,927,268 1,588,200
Minority interest expense ............ (137,722) (376,459)
------------ -----------
EARNINGS FROM OPERATIONS ............ 2,789,546 1,211,741
Gain on properties ................... 91,172 699,721
------------ -----------
NET EARNINGS .........................$ 2,880,718 1,911,462
============ ===========
NET EARNINGS PER SHARE ...............$ 0.37 0.32
============ ===========
</TABLE>
MID-ATLANTIC REALTY TRUST
Consolidated Statements of Operations
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
1997 1996
<S> <C> <C>
REVENUES:
Rentals ............................$ 6,815,341 6,463,827
Tenant recovery .................... 1,287,424 1,152,345
Other .............................. 89,564 237,373
------------ -----------
8,192,329 7,853,545
COSTS AND EXPENSES:
Interest .......................... 2,586,519 3,132,498
Depreciation and amortization
of property and improvements ..... 1,355,273 1,336,801
Operating ......................... 2,105,070 2,182,908
General and administrative ......... 562,092 503,911
------------ -----------
6,608,954 7,156,118
EARNINGS FROM OPERATIONS
BEFORE MINORITY INTEREST .......... 1,583,375 697,427
Minority interest expense ............ (70,449) (197,491)
------------ -----------
EARNINGS FROM OPERATIONS ............ 1,512,926 499,936
Gain on properties ................... 15,999 178,005
------------ -----------
NET EARNINGS .........................$ 1,528,925 677,941
============ ===========
NET EARNINGS PER SHARE ...............$ 0.19 0.11
============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 4
<PAGE>
MID-ATLANTIC REALTY TRUST
Consolidated Statements of Cash Flows
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net earnings .......................$ 2,880,718 1,911,462
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization .... 2,749,266 2,670,734
Gain on properties ............... (91,172) (699,721)
Minority interest in earnings, net 137,722 376,459
Changes in operating assets and liabilities:
Decrease in operating assets .... 1,471,760 1,212,439
Decrease in operating
liabilities .................... (495,177) (1,177,684)
------------ -----------
Total adjustments ............ 3,772 399 2,382,227
------------ ----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES ......................... 6,653,117 4,293,689
Cash flows from investing activities:
Additions to properties ............ (8,089,484) (2,335,536)
Proceeds from sales of properties... 5,137,111 10,209,536
Receipts from minority partners .... 17,607 51,000
Payments to minority partners ...... (658,020) (407,970)
------------ ------------
NET CASH (USED IN) PROVIDED BY INVESTING
ACTIVITIES ........................ (3,592,786) 7,517,030
------------ ------------
Cash flows from financing activities:
Proceeds from notes payable ....... 26,200,000 24,680,565
Principle payments on notes payable (26,600,000) (36,210,708)
Proceeds from mortgages payable .... - 18,900,000
Principal payments on mortgages
payable .......................... (425,308) (5,798,094)
Proceeds from construction loan
payable .......................... 2,829,202 194,222
Principle payments on construction loan
payable .......................... - (10,293,732)
Additions to deferred financing costs (11,501) (222,960)
Amortization of deferred financing costs 204,664 280,945
Proceeds from exercise of share options 39,026 -
Shares purchased ................... (297) (80,914)
Dividends paid .................... (3,746,242) (2,782,526)
------------ -----------
NET CASH USED IN FINANCING
ACTIVITIES ................. (1,510,456) (11,333,202)
NET INCREASE IN CASH
AND CASH EQUIVALENTS ............... 1,549,875 477,517
CASH AND CASH EQUIVALENTS,
beginning of period ................ 1,013,838 514,386
------------ ------------
CASH AND
CASH EQUIVALENTS, end of period ...$ 2,563,713 991,903
============ ============
</TABLE>
In the first six months of 1997, $11,009,000 in convertible debentures
were converted to 1,048,452 common shares of beneficial interest
decreasing convertible subordinated debentures by $11,009,000, decreasing
deferred financing costs by $359,731 and increasing shareholders' equity by
$10,649,269. In the first six months of 1996, $717,000 in convertible
debentures were converted to 68,284 common shares of beneficial interest
decreasing convertible subordinated debentures by $717,000, decreasing
deferred financing costs by $26,780 and increasing shareholders' equity
by $690,220.
During the six month periods ended June 30, 1997 and 1996, $81,130 and
$65,614, respectively, in interest costs were capitalized as construction
period interest in development operations.
See accompanying notes to consolidated financial statements.
<PAGE> 5<PAGE>
MID-ATLANTIC REALTY TRUST
Notes To Consolidated Financial Statements
(UNAUDITED)
ORGANIZATION
Mid-Atlantic Realty Trust (the "Company", or "MART") was formed 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 June 30, 1997 and the consolidated
statements of operations for the Company for the six and three month periods
ended June 30, 1997 and June 30, 1996 and the consolidated statements of cash
flows for the periods ended June 30, 1997 and June 30, 1996, 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, results of operations and cash flows
have been included. The results of operations for the periods ended June 30,
1997 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, 1996
Annual Report to Shareholders.
Certain amounts for 1996 have been reclassified to conform to 1997
presentation.
TENANT RECOVERY REVENUES
Effective January 1, 1997 the Company changed its reporting of tenant expense
recoveries. During the year ended December 31, 1996 and previously, tenant
expense recoveries were reported in the operating expense line in the
consolidated statements of operations. Manangement believes reporting tenant
expense recoveries separately as a component of revenue will provide a better
presentation of revenues and expenses. The comparative prior period revenue
and operating expense line items have been reclassified to reflect this
change.
NET EARNINGS PER SHARE
Primary net earnings per common share was computed by dividing 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 six month periods ended June 30,
1997 and June 30, 1996 was 7,818,154 and 6,036,632, respectively. The weighed
average number of common shares and common share equivalents for the three
month periods ended June 30, 1997 and June 30, 1996 was 8,175,462 and
6,051,699, respectively.
CONVERTIBLE SUBORDINATED DEBENTURES
The Company sold $60,000,000 in convertible subordinated debentures in
September, 1993. During the six months ended June 30, 1997, $11,009,000 in
debentures were converted to 1,048,452 common shares of beneficial interest.
The balance of the debentures, of $36,186,000, convertible at $10.50 per
share, if fully converted, would produce an additional 3,446,286 shares.
During the period July 1, 1997 thru July 21, 1997 an additional $167,000,000
in debentures were converted to 15,903 common shares of beneficial interest
reducing the balance of the debentures to $36,019,000.
MART INCENTIVE STOCK OPTION PLANS
MART has an Omnibus Share Plan, (Plan), under which trustees, officers and
employees may be granted awards of stock options, stock appreciation rights,
performance shares and restricted stock. The purpose of the Plan is to
provide equity-based incentive compensation based on long-term appreciation
in value of MART's shares and to promote the interests of MART and its
shareholders by encouraging greater management ownership of MART's shares.
Pursuant to the Plan, the Company authorized on February 1, 1994 the
availability of 300,000 shares for the Plan. Upon inception at February 1,
1994, trustees, officers and key employees were granted 256,000 stock
options. During 1995 additional grants and cancellations of stock options
totaled 1,332 and 3,000, respectively. The outstanding stock options at
June 30, 1997, totaling 254,332, allow holders to purchase one share of
MART stock for $10.50 per share. All outstanding stock options were vested
and exercisable at June 30, 1997. The closing price of MART shares at
June 30, 1997 was $11.25 per share. No options were exercised during the
period ended June 30, 1997 and, based on the market value of MART shares,
the options, if exercised, would be dilutive producing 18,071 in additional
weighted average shares for the period ended June 30, 1997.
On September 14, 1995, the Company authorized the availability of 180,000
shares for a new plan, the 1995 Stock Option Plan (New Plan). The New Plan
granted options to purchase a number of shares equal to approximately 56% of
the number awarded under the Plan, or 141,300. As options vest, they are
priced at the market price on the close of business at that date. One third
of the stock options, or 47,100, vested on September 30, 1995, exercisable at
$8.9375 per share. An additional third of the options, or 47,100, vested on
September 30, 1996, exercisable at $9.75 per share. The balance of the
options will vest on September 30, 1997, to be priced at the market price on
the close of business at that date. In the quarter ended June 30, 1997,
4,312 share options were exercised. Based on the balance of unexercised
vested shares of 89,888 and the market value of MART shares, the options, if
exercised, would be dilutive producing 15,625 in additional weighted average
shares for the period ended June 30, 1997.
CONTINUED
<PAGE> 6
<PAGE>
MID-ATLANTIC REALTY TRUST
Notes To Consolidated Financial Statements - Continued
(UNAUDITED)
SHAREHOLDERS' EQUITY
During the six months ended June 30, 1997, shareholders' equity
changed for the following items:
- Net earnings of $2,880,718
- Dividend paid by MART of $3,746,242
- Fractional shares purchased by MART of
$297 due to the conversion of debentures
- Common shares and additional paid-in capital
increased by $10,649,269 due to conversion of
$11,009,000 in debentures.
- Proceeds of $39,026 due to the exercise of
4,312 share options.
ACQUISITION OF JHP COMMERCIAL PROPERTIES
Effective July 1, 1997 the Company acquired a portfolio of 9 shopping centers
and one medical office building in the Baltimore Metropolitan area from family
members and affiliates of the Pechter family, (JHP), comprising 1.07 million
square feet. At closing of the transaction, MART formed a Maryland limited
partnership, MART Limited Partnership, (MLP), of which MART is the general
partner and members of JHP were admitted as limited partners. MART assigned
to MLP its beneficial interest in the properties owned by MART and its
subsidiaries in exchange for a number of units of limited partnership
interests, (Units), of MLP equal to the number of outstanding common shares
of beneficial interest of MART. For the JHP properties, MLP issued to the
members of JHP 3.235 million Units. The acquisition was accounted for using
the purchase method. The approximate aggregate fair market value of assets
acquired was approximately $121 million subject to the assumed existing
mortgage indebtedness with a fair value of approximately $84 million. Under
the Agreement of Limited Partnership of MLP, subject to certain restrictions,
the Units may be "put" to the partnership for cash at any time after one year
following the closing. MART may assume the payment obligation at any time and
pay it in cash or, at its option, may substitute common shares of MART on
a one-for-one basis.
The consolidated statements of operation for the three and six months ended
June 30, 1997 do not include revenues and expenses related to the acquisition.
The Company's pro forma consolidated results of operations for the six months
ended June 30, 1997 and 1996, assuming the acquisition of JHP occurred at the
beginning of each period, are summarized as follows (in thousands, except per
share data)
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Revenues $23,570 22,229
Net Earnings $ 3,017 2,070
Earnings per share $ 0.39 0.34
</TABLE>
The pro forma revenues and earnings summarized above are not necessarily
indicative of the results that would have occurred if the acquisition had
been consummated at the beginning of each period or of future results of
operations of the combined companies.
<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 Company's results of operations for
the six and three months ended June 30, 1997, with those for the six and three
months ended June 30, 1996.
Comparison of six months ended June 30, 1997 to six months ended June
30, 1996
Rental revenues increased by $854,000 or 7% to $13,761,000 for the six
months ended June 30, 1997 from $12,907,000 for the six months ended June
30, 1996. Owings Mills New Town shopping center and the redevelopment of
Harford Mall Annex and York Road Plaza contributed $700,000 in additional
revenues for the period. Occupancy and rental rate increases contributed
approximately $404,000. The increases were partly offset by $151,000 in
rental revenue decreases attributable to the sales in January, 1996 of the
Dolton bowling center and the Park Sedona shopping center, the sale in May,
1996 of the Dobson-Guadalupe shopping center and the sale in September, 1996
of the Chandler shopping center and the sale in March 1997 of the Union Hills
shopping center and the sale in May 1997 of the Plaza Del Rio shopping center.
In addition, $99,000 in rental decreases were primarily related to
vacancies and lower percentage rents.
Tenant recovery revenues increased by $133,000 to $2,489,000 from
$2,356,000. The increased tenant recoveries primarily due to occupancy
increases from the redevelopment of Harford Mall Annex and York Road Plaza
and higher tenant reserves in 1996.
Other revenues decreased by $350,000 to $147,000 from $497,000 primarily
due to lower interest income on partner notes receivable exchanged in July,
1996 for additional partnership interests in several properties.
As a result of the above changes total revenues increased by $637,000 to
$16,397,000 from $15,760,000.
Interest expense decreased by $936,000 to $5,362,000 from $6,298,000
primarily due to the conversion of debentures, $813,000, and lower interest
rates on loans for Columbia and Colonie shopping centers.
Depreciation and amortization increased by $78,000 to $2,749,000 from
$2,671,000 primarily due to depreciation related to the redevelopment of the
Harford Mall Annex.
Operating expenses decreased by $5,000 to $4,223,000 from $4,228,000
primarily due to reduced operating expenses related to property sales
partly offset by increased operating expenses for the redevelopment projects
of Harford Mall Annex and York Road Plaza.
General and administrative expenses increased by $160,000 to $1,135,000 from
$975,000 due primarily to increased incentive compensation.
Minority interest expense decreased by $238,000 to $138,000 from $376,000
due primarily to the acquisition of minority partnership interests in 1996.
For the six months ended June 30, 1997, earnings from operations increased
by $1,578,000 to $2,790,000 from $1,212,000. MART also recognized a had a
gain on properties of $91,000, (net of minority interest of $75,000). The
gain on properties, when combined with earnings from operations, resulted
in net earnings of $2,881,000 for the period. For the six months ended
June 30, 1996, MART had a gain on properties of $699,000, which when
combined with earnings from operations, resulted in net earnings of
$1,911,000 for the period.
Comparison of three months ended June 30, 1997 to three months ended June 30,
1996
Rental revenues increased by $351,000 or 5% to $6,815,000 for the three
months ended June 30, 1997 from $6,464,000 for the three months ended June
30, 1996. Owings Mills New Town shopping center and the redevelopment of
Harford Mall Annex and York Road Plaza contributed $307,000 in additional
revenues for the period. Occupancy and rental rate increases contributed
approximately $199,000. The increases were partly offset by $104,000 in
rental revenue decreases attributable to the sales in January, 1996 of the
Dolton bowling center and the Park Sedona shopping center, the sale in
May, 1996 of the Dobson-Guadalupe shopping center, the sale in September,
1996 of the Chandler shopping center, the sale in March, 1997 of the
Union Hills shopping center and the sale in May, 1997 of the Plaza Del Rio
shopping center. In addition, $51,000 in rental decreases were primarily
related to vacancies and lower percentage rents.
Tenant recovery revenues increased by $135,000 to $1,287,000 from $1,152,000.
The increased tenant recoveries were primarily due to occupancy increases
from the redevelopment of Harford Mall Annex and York Road Plaza and higher
tenant reserves in 1996.
<PAGE> 8
<PAGE>
MID-ATLANTIC REALTY TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Comparison of three months ended June 30, 1997 to
three months ended June 30, 1996 - Continued
Other revenues decreased by $148,000 to $90,000 from $238,000 primarily
due to lower interest income on partner notes receivable exchanged in July,
1996 for additional partnership interests in several properties.
As a result of the above changes total revenues increased by $338,000 to
$8,192,000 from $7,854,000.
Interest expense decreased by $546,000 to $2,587,000 from $3,133,000
primarily due to the conversion of debentures, $479,000, and lower interest
rates on loans for Columbia and Colonie shopping centers.
Depreciation and amortization increased by $18,000 to $1,355,000 from
$1,337,000 primarily due to depreciation related to the redevelopment of the
Harford Mall Annex.
Operating expenses decreased by $78,000 to $2,105,000 from $2,183,000
primarily due to reduced operating expenses related to property sales and
higher electrical expenses in 1996 for Timonium shopping center & higher
advertising expense in 1996 for Owings Mills New Town shopping center.
The increases were partly offset by increased operating expenses for the
redevelopment project at Harford Mall Annex and Brandywine shopping center.
General and administrative expenses increased by $58,000 to $562,000 from
$504,000 due primarily to increased incentive compensation and increased costs
written off for discontinued projects.
Minority interest expense decreased by $127,000 to $70,000 from $197,000
due primarily to the acquisition of minority partnership interests in 1996.
For the three months ended June 30, 1997, earnings from operations increased
by $1,013,000 to $1,513,000 from $500,000. MART also recognized a gain on
properties of $16,000. The gain on properties, when combined with earnings
from operations, resulted in net earnings of $1,529,000 for the period. For
the three months ended June 30, 1996, MART had a gain on properties of
$178,000, which when combined with earnings from operations, resulted in
net earnings of $678,000 for the period.
Cash Flow Comparison
The following discussion compares the statement of cash flows information for
1997 with the information for 1996.
Net cash flow provided by operating activities was $6,653,000 and $4,294,000
in the six months ended 1997 and 1996, respectively. The changes in cash
provided by operating activities were due primarily to the factors discussed
above in the comparisons of operating results. The level of net cash provided
by operating activities is also affected by the timing of receipt of revenues
and the payment of operating and interest expenses.
Net cash flow from investing activities decreased by $11,110,000, to a net
cash flow used in investing activities of $3,593,000 in 1997 from a net cash
flow provided by investing activities of $7,517,000 in 1996. The decrease
was primarily a result of increased levels of acquisitions and additions to
properties in 1997 (primarily due to the Timonium Mall redevelopment project)
and a decrease in proceeds from sales of properties.
Net cash flow used in financing activities decreased by $9,823,000, to
$1,510,000 in 1997 from $11,333,000 in 1996. The decrease was primarily a
result of higher levels of net principal paydowns in 1996 of $10,532,000,
partly offset by an increase in dividends paid of $964,000 in 1997.
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
Continued
<PAGE> 9<PAGE>
MID-ATLANTIC REALTY TRUST
Part II. OTHER INFORMATION - CONTINUED
Item 4. Submission of Matters to a Vote of Security Holders - The Annual
Meeting of Shareholders was held on May 9, 1997. Elected to serve as
trustees for the ensuing year and until the election and qualification of
their successors were: Marc P. Blum, Robert A. Frank, LeRoy E. Hoffberger,
F. Patrick Hughes, M. Ronald Lipman, Daniel S. Stone, David F. Benson,
and Stanley J. Moss.
<TABLE>
<CAPTION>
Matter Voted Upon For Against Withheld
<S> <C> <C> <C>
a. Election of Trustees:
Marc P. Blum 5,428,166 - 97,624
Robert A. Frank 5,428,266 - 97,524
LeRoy E. Hoffberger 5,428,316 - 97,474
F. Patrick Hughes 5,429,316 - 96,474
M. Ronald Lipman 5,429,266 - 96,524
Daniel S. Stone 5,428,316 - 97,474
David F. Benson 5,428,316 - 97,474
Stanley J. Moss 5,428,216 - 97,574
b. Proposal to approve the appointment of KPMG
Peat Marwick LLP as the independent certified
public accountants of MART for the fiscal year
ending December 31, 1997: 5,494,857 20,398 10,535
</TABLE>
Because the matters voted upon at the meeting required the approval of only a
majority of the votes cast at the meeting, votes withheld, abstentions and
broker non-votes had no effect upon the ultimate outcome of the vote.
Item 5. Other Information -
Summary Financial Data
The following sets forth summary financial data which has been prepared
by the Company without audit. 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.
MID-ATLANTIC REALTY TRUST
Summary Financial Data
(In thousands, except per share data)
<TABLE>
<CAPTION>
Six months Three months
ended June 30, ended June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues $16,397 15,760 $8,192 7,854
Net earnings $2,881 1,911 $1,529 678
Net earnings per share $0.37 0.32 $0.19 0.11
OTHER FINANCIAL DATA:
Funds from operations
(FFO) (1) - primary $5,539 3,882 $2,868 1,837
FFO - fully diluted (1) $7,148 6,305 $3,595 3,043
Weighted average number of
shares outstanding - primary 7,818 6,037 8,175 6,052
Weighted average number of shares
outstanding - fully diluted 11,756 11,681 11,757 11,696
SELECTED CASH FLOW DATA:
Net cash flow provided by
operating activities $6,653 4,294
Net cash flow (used in) provided
by investing activities ($3,593) 7,517
Net cash flow used in financing
activities ($1,510) (11,333)
RECONCILIATION OF NET EARNINGS TO FFO - PRIMARY:
Net earnings $2,881 1,911 $1,529 678
Less: Non Recurring items - - - -
Add: Depreciation &
amortization 2,749 2,671 1,355 1,337
Less: Gains on properties (91) (700) (16) (178)
---------- -------- -------- -------
(FFO)- primary $5,539 3,882 $2,868 1,837
========= ======== ======== =======
</TABLE>
(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 cumulative effects of changes in accounting principles,
extraordinary or unusual items, and gains or losses from debt restructuring
and sales of property, plus depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures. FFO does not
represent cash flows from operations as defined by generally accepted
accounting principles (GAAP). FFO is not indicative that cash flows are
adequate to fund all cash needs and is not to be considered as an alternative
to net income as defined by GAAP. The presentation of funds from operations
is not normally included in financial statements prepared in accordance
with GAAP.
Item 6. Exhibits and Reports on Form 8-K -
Form 8K - Acquisition of Assets - JHP Commercial Properties
Filed July 15, 1997
Exhibit No. 27 - Financial Data Schedule
Filed thru EDGAR
<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 07/23/97 By: /s/ F. Patrick Hughes
F. Patrick Hughes
President
Principal Executive Officer
Date 07/23/97 By: /s/ Paul G. Bollinger
Paul G. Bollinger
Vice President and Controller
Principal Financial Officer
<PAGE> 11<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,564
<SECURITIES> 0
<RECEIVABLES> 714
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS><F1> 0
<PP&E> 167,926
<DEPRECIATION> 44,246
<TOTAL-ASSETS> 173,173
<CURRENT-LIABILITIES><F1> 0
<BONDS> 105,971
<COMMON> 83
0
0
<OTHER-SE> 40,551
<TOTAL-LIABILITY-AND-EQUITY> 173,173
<SALES> 0
<TOTAL-REVENUES> 16,397
<CGS> 0
<TOTAL-COSTS> 13,470
<OTHER-EXPENSES> 138
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,363
<INCOME-PRETAX> 2,881
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,881
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,881
<EPS-PRIMARY> .37
<EPS-DILUTED> .38
<FN>
<F1> Mid-Atlantic Realty Trust (MART) is in the specialized real estate
<F1> industry for which the current/noncurrent distinction is deemed in
<F1> practice to have little or no relevance. Therefore, MART prepares
<F1> unclassified balance sheets which do not report current assets or
<F1> current liabilities.
</FN>
</TABLE>
