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 quarter ended March 31, 1998.
___ Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ________________ to
_______________.
Commission File Number 1-12222
BEDFORD PROPERTY INVESTORS, INC.
(Exact name of Registrant as specified in its charter)
MARYLAND 68-0306514
(state or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
270 Lafayette Circle, Lafayette, CA 94549
(Address of principal executive offices)
Registrant's telephone number, including area code (510)283-8910
Indicate by check mark whether 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 Registrant was required
to file such reports and (2) has been subject to such filing requirements for
the past 90 days. Yes x No___
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class Outstanding as of May 12, 1998
Common Stock, $0.02 par value 22,583,867
<PAGE>
BEDFORD PROPERTY INVESTORS, INC.
INDEX
PART I. FINANCIAL INFORMATION Page
ITEM 1. FINANCIAL STATEMENTS
Statement 1
Consolidated Balance Sheets as of March 31, 1998
and December 31, 1997 2
Consolidated Statements of Income for the three months ended
March 31, 1998 and 1997 3
Consolidated Statements of Stockholders' Equity for the year ended
December 31, 1997 and the three months ended March 31, 1998 4
Consolidated Statements of Cash Flows for the three months ended
March 31, 1998 and 1997 5
Notes to Consolidated Financial Statements 6-10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Management's Discussion and Analysis of Results of Operations
and Financial Condition 10-13
PART II. OTHER INFORMATION
ITEMS 1 - 6 14
SIGNATURES 15
Exhibit 11 16
Exhibit 27 17
<PAGE>
BEDFORD PROPERTY INVESTORS, INC.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
STATEMENT
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. The information furnished reflects all adjustments which
are, in the opinion of management, necessary for a fair presentation of results
of operations for the interim periods. Such adjustments are of a normal
recurring nature. These financial statements should be read in conjunction with
the notes to financial statements appearing in the annual report to stockholders
for the year ended December 31, 1997.
<PAGE>
BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 1998 AND DECEMBER 31, 1997 (Unaudited)
(in thousands, except share and per share amounts)
March 31, 1998 December 31, 1997
Assets:
Real estate investments:
Industrial buildings $256,662 $237,184
Office buildings 179,149 170,948
Properties under development 62,482 18,227
Land held for development 1,601 5,712
499,894 432,071
Less accumulated depreciation 10,908 8,985
488,986 423,086
Cash 1,070 1,361
Other assets 10,501 9,456
$500,557 $433,903
Liabilities and Stockholders' Equity:
Bank loan payable 54,785 8,216
Mortgage loans payable 81,062 60,323
Accounts payable and
accrued expenses 5,775 6,026
Dividend and distributions payable 6,804 6,804
Other liabilities 3,341 4,611
Total liabilities 151,767 85,980
Minority interest in
consolidated partnership 1,497 1,497
Stockholders' equity:
Common stock, par value $0.02 per share;
authorized 50,000,000 shares; issued
and outstanding 22,583,867 shares 452 452
Additional paid-in capital 408,394 408,209
Accumulated losses and distributions in
excess of net income (61,553) (62,235)
Total stockholders' equity 347,293 346,426
$500,557 $433,903
See accompanying notes to consolidated financial statements.
<PAGE>
BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (Unaudited)
(in thousands, except share and per share amounts)
1998 1997
Property operations:
Rental income $15,361 $ 9,056
Rental expenses:
Operating expenses 2,127 1,463
Real estate taxes 1,299 825
Depreciation and amortization 2,055 1,126
Income from property operations 9,880 5,642
General and administrative expenses (835) (539)
Interest income 47 100
Interest expense (1,606) (1,523)
Income before minority interest 7,486 3,680
Minority interest (29) (25)
Net income $ 7,457 $ 3,655
Net income applicable to
common stockholders $ 7,457 $ 2,530
Basic earnings per share $ 0.33 $ 0.28
Weighted average number of shares 22,583,867 8,939,693
Earnings per common share - assuming
dilution $ 0.33 $ 0.27
Weighted average number of
shares - assuming dilution 22,956,590 13,418,959
See accompanying notes to consolidated financial statements.
BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1997 AND
THE THREE MONTHS ENDED MARCH 31, 1998
(in thousands, except share and per share amounts)
<TABLE>
<S> <C> <C> <C> <C>
Total
Accumulated common
losses and stock and
Additional distributions other stock-
Common paid-in in excess of holders'
stock capital net income equity
Balance, December 31, 1996 $ 131 $147,622 $(73,997) $73,756
Issuance of common stock 321 265,622 - 265,943
Costs of issuance of common stock - (4,990) - (4,990)
Redemption of partnership units - (45) - (45)
Net income - - 31,291 31,291
Dividends to common stockholders
($1.13 per share) - - (16,029) (16,029)
Dividends to preferred stockholders - - (3,500) (3,500)
Balance, December 31, 1997 $ 452 $408,209 $(62,235) $346,426
Issuance of common stock - 185 - 185
Net income - - 7,457 7,457
Dividends to common stockholders
($0.30 Per share) - - (6,775) (6,775)
Balance, March 31, 1998 $ 452 $408,394 $(61,553) $347,293
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (Unaudited)
(in thousands)
1998 1997
Operating Activities:
Net income $ 7,457 $ 3,655
Adjustments to reconcile net income to net cash
provided by operating activities:
Minority Interest 29 25
Depreciation and amortization 2,358 1,340
Change in other assets (1,626) (884)
Change in accounts payable and
accrued expenses 399 (563)
Change in other liabilities (1,270) (319)
Net cash provided by operating activities 7,347 3,254
Investing Activities:
Investments in real estate (68,474) (33,550)
Net cash used by investing activities (68,474) (33,550)
Financing Activities:
Proceeds from bank loan 63,494 12,014
Proceeds from mortgage loan 21,110 -
Repayments of bank loan (16,989) (54,909)
Repayments of mortgage loans (161) (93)
Proceeds from issuance of common stock 185 75,980
Redemption of partnership units - (257)
Payment of dividends and distributions (6,803) (2,822)
Net cash provided by financing activities 60,836 29,913
Net decrease in cash (291) (383)
Cash at beginning of period 1,361 1,328
Cash at end of period $ 1,070 $ 945
Supplemental disclosure of cash flow information:
a) Non cash investing and financing activities:
Debt incurred with real estate acquired - $ 58
b) Cash paid during the period for interest,
net of amounts capitalized $ 1,109 $ 1,817
See accompanying notes to consolidated financial statements.
BEDFORD PROPERTY INVESTORS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. The Company and Basis of Presentation
The Company
Bedford Property Investors Inc. (the Company) is a Maryland real estate
investment trust with investments primarily in industrial and suburban office
properties concentrated in the Western United States. The Company's Common
Stock trades under the symbol "BED" on both the New York Stock Exchange and the
Pacific Exchange.
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with the instructions to Form 10-Q and, therefore, do not include all
information and footnotes necessary for a fair presentation of financial
condition, results of operations, and cash flows in conformity with generally
accepted accounting principles. The unaudited interim financial statements
reflect all adjustments which are, in the opinion of management, necessary to
a fair statement of the results for the interim periods presented. All such
adjustments are of a normal, recurring nature.
Per Share Data
Per share data are based on the weighted average number of common and common
equivalent shares outstanding during the year. Stock options issued under the
Company's stock option plans are included in the calculation of per share data
if, upon exercise, they would have a dilutive effect. The diluted earnings per
share calculation assumes conversion of the limited partnership units of Bedford
Realty Partners, L.P., if such conversions would have dilutive effects, as of
the beginning of the year.
Effective December 15, 1997, the Company adopted Statement of Financial
Accounting Standard No. 128, Earnings per share (FAS 128). Earnings per share
data for previous periods have been restated to conform to FAS 128.
Recent Accounting Pronouncements
In June 1997, the FASB issued Financial Accounting Standard No. 130 (SFAS 130),
Reporting Comprehensive Income. SFAS 130 is effective with the year-end 1998
financial statements; however, the total comprehensive income is required in the
financial statements for interim periods beginning in 1998. In June 1997, the
FASB issued Financial Accounting Standard No. 131, Disclosure About Segments of
An Enterprise and Related Information. SFAS 131 is effective with the year-end
1998 financial statements. In February 1998, the FASB issued Financial
Accounting Standard No. 132, Employers Disclosures About Pensions and Other
Postretirement Benefits. SFAS 132 is effective with the year-end 1998 financial
statements. Management believes that the adoption of these statements will not
have a material impact on the Company's financial statements.
Note 2. Real Estate Investments
As of March 31, 1998, the Company's real estate investments were diversified by
property type as follows (dollars in thousands):
Number of Percent
Properties Cost of Total
Industrial Buildings 55 $256,662 51
Office Buildings 22 179,149 36
Properties Under Development 12 62,482 12
Land Held for Development 2 1,601 1
Total 91 $499,894 100%
<PAGE>
Note 2 - Real Estate Investments
The following table sets forth the Company's real estate investments as of March
31, 1998 (in thousands):
<TABLE>
<S> <C> <C> <C> <C>
Less
Accumulated
Land Building Depreciation Total
INDUSTRIAL PROPERTIES
Northern California $46,540 $100,413 $3,921 $143,032
Southern California 14,463 32,478 1,606 45,335
Denver, Colorado 1,911 3,305 177 5,039
Arizona 8,025 18,992 354 26,663
Greater Portland Area 2,652 8,377 535 10,494
Greater Kansas City Area 3,398 13,346 747 15,997
Dallas, Texas 1,105 1,657 9 2,753
Total Industrial 78,094 178,568 7,349 249,313
SUBURBAN OFFICE PROPERTIES
Northern California 4,313 13,191 354 17,150
Southern California 7,312 18,076 467 24,921
Salt Lake City 359 6,558 811 6,106
Greater Kansas City Area 3,330 5,390 232 8,488
Greater Seattle Area 15,116 30,225 638 44,703
Reno, Nevada 2,102 10,475 215 12,362
Austin, Texas 2,766 7,088 131 9,723
Arizona 11,895 25,844 398 37,341
Denver, Colorado 1,860 13,249 123 14,986
Total Suburban Office 49,053 130,096 3,369 175,780
PROPERTIES UNDER DEVELOPMENT
Northern California 3,079 5,536 58 8,557
Southern California 360 - - 360
Arizona 3,204 3,534 85 6,653
Greater Kansas City Area 518 3,064 47 3,535
Greater Seattle Area - 41,537 - 41,537
Denver, Colorado 1,645 5 - 1,650
Total Properties Under Development 8,806 53,676 190 62,292
LAND HELD FOR DEVELOPMENT
Northern California 980 - - 980
Southern California 621 - - 621
Total Land Held for Development 1,601 - - 1,601
Total 137,554 362,340 10,908 488,986
</TABLE>
The Company internally manages all but 7 of its properties from its regional
offices in Lafayette, CA; Tustin, CA; Phoenix, AZ; Lenexa, KS; Denver, CO;
Dallas, TX; and Seattle, WA. For the 7 properties located in markets not served
by a regional office, the Company has subcontracted on-site management to local
firms. All financial record-keeping is centralized at the Company's corporate
office in Lafayette, CA. Effective May 1, 1998 the regional office in Dallas,
TX was closed and on-site management for one additional property has been
subcontracted to a local firm.<PAGE>
Note 3. Consolidated Partnership
In December 1996 the Company formed Bedford Realty Partners, L.P. (the
"Operating Partnership"), with the Company as the sole general partner, for the
purpose of acquiring real estate. In exchange for contributing a property into
the Operating Partnership, the owners of the property received limited
partnership units ("OP Units"). A limited partner can seek redemption of the
OP Units at any time after 90 days. The Company, at its option, may redeem the
OP Units by either (i) issuing common stock at the rate of one share of common
stock for each OP Unit, or (ii) paying cash to a limited partner based on the
average trading price of the Company's common stock. Each OP Unit is allocated
partnership income and cash flow at a rate equal to the dividend being paid by
the Company on a share of common stock. Additional partnership income and cash
flow is allocated 99% to the Company and 1% to the limited partners.
This acquisition strategy is referred to as a "Down REIT" transaction; as long
as certain tax attributes are maintained, the income tax consequences to a
limited partner are generally deferred until such time as the limited partner
redeems their OP Units.
On December 17, 1996, the Company acquired a $3.6 million industrial property
located in Modesto, California utilizing the Operating Partnership. A director
of the Company was a 9% owner of the property and received 8,991 OP units in
connection with the Down REIT transaction. This director did not participate
in the approval of the acquisition. The sellers of the property received
108,495 OP Units. In March 1997, the Company redeemed 13,446 OP units
for cash.
Note 4. Stock Options
In September 1995, the Company established a Management Stock Acquisition
program. Under the program, options exercised by key members of management
within thirty days of the grant date may be exercised either in cash or with a
note payable to the Company. Such note bears interest at 7.5% or the Applicable
Federal Rate as defined by the Internal Revenue Service, whichever is higher.
The note is due in five years or within ninety days from termination of
employment, with interest payable quarterly. During 1996 and 1995, options for
155,000 shares of Common Stock were exercised in exchange for notes payable to
the Company. The notes bear interest at 7.5%. The unpaid balance of the notes
is $1,063,000 and is included in the accompanying consolidated balance sheet as
a reduction of additional paid-in capital.
Note 5. Debt
Bank Loan Payable
In June 1997, the Company expanded its secured revolving credit facility with
Bank of America from $100 million to $150 million, maturing on June 1, 2000.
In September 1997, the credit facility was further expanded to $175 million.
Under this facility, the Company can borrow up to $25 million on an unsecured
basis. The secured loans bear interest at a floating rate equal to either the
lender's published "reference rate" or LIBOR plus 1.5%. The interest rate of
the unsecured loans is 25 basis points higher than that of the secured loans.
The credit facility is secured by mortgages on 32 properties (which properties
collectively accounted for approximately 39 % of the Company's Annualized Base
Rent and approximately 34% of the Company's total assets as of March 31, 1998),
together with the rental proceeds from such properties. The credit facility
contains various restrictive covenants including, among other things, a covenant
limiting quarterly dividends to 95% of average Funds From Operations for the
immediately preceding two fiscal quarters.
The Company is in the process of renegotiating its secured line of credit, to
reflect lower interest rates, to increase the unsecured subline and to increase
advanced rates based on loan to value ratios.
The daily weighted average amount owing to the bank was $18,226,000 and
$24,751,000 for the three months ended March 31, 1998 and 1997, respectively.
The weighted average interest rates in each of these periods was 7.62%. The
effective interest rate at March 31, 1998 was 7.40%.
Mortgage Loans Payable
Mortgage loans payable at March 31, 1998 consist of the following (in
thousands):
Floating rate note due December 15, 1999
current rate of 8.75% $ 1,817
7.5% note due January 1, 2002 24,584
7.02% note due March 15, 2003 25,000
8.9% note due July 31, 2006 8,787
6.91% note due July 31, 2006 20,874
$ 81,062
The mortgage loans are collaterized by 21 properties (which Properties
collectively accounted for approximately 31% of the Company's Annualized
Base Rent and approximately 24% of the Company's total assets as of
March 31, 1998).
The following table presents scheduled principal payments on mortgage loans as
of March 31, 1998 (in thousands):
Twelve months period ending March 31, 1999 $ 3,060
Twelve months period ending March 31, 2000 1,353
Twelve months period ending March 31, 2001 1,442
Twelve months period ending March 31, 2002 24,402
Twelve months period ending March 31, 2003 23,946
Thereafter 26,859
$81,062
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
When used in the following discussion, the words "believes," "expects,"
"intends," "anticipates" and similar expressions are intended to identify
forward-looking statements. Such statements are subject to certain risks and
uncertainties which could cause actual results to differ materially from those
projected, including, but not limited to, those set forth in the section
entitled "Potential Factors Affecting Future Operating Results," below. Readers
are cautioned not to place undue reliance on these forward-looking statements
which speak only as of the date hereof. The Company undertakes no obligation
to publicly release the result of any revisions to these forward-looking
statements which may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
Results of Operations
The Company's operations consist of owning and operating industrial and suburban
office properties located primarily in the Western United States.
<PAGE>
Increases in revenues, expenses, net income in the three months ended March 31,
1998 when compared with the same period in 1997 were due primarily to the
acquisition, development and sale of operating properties as follows:
Number of Square
Operating Properties Feet
Acquisitions
Industrial 14 1,054,000
Office 14 1,135,000
28 2,189,000
Development
Industrial 1 65,000
Sales
Office 2 213,000
Retail 1 84,000
3 297,000
Three Months Ended March 31, 1998 Compared with Three Months Ended March 31,
1997
Income from Property Operations
Income from property operations (defined as rental income less rental expenses)
increased $4,238,000 or 75% in 1998 compared with 1997. This is due to an
increase in rental income of $6,305,000 partially offset by an increase in
rental expenses (which include operating expenses, real estate taxes and
depreciation and amortization) of $2,067,000.
This increase in rental income and expenses is primarily attributable to the
acquisition of real estate investments. This acquisition activity increased
rental income and rental expenses by $7,114,000 and $2,404,000, respectively.
This was partially offset by the sale of two office properties in July 1997 and
one retail property in October 1997 which generated a reduction in rental income
and rental expenses of $1,252,000 and $558,000 respectively.
Expenses
Interest expense, which includes amortization of loan fees, increased $83,000
or 5% in 1998 compared with 1997. The increase is attributable to the Company's
higher level of borrowings to finance the acquisition of properties in 1998, and
higher financing costs incurred in connection with the credit facility and
mortgage loans. The amortization of loan fees was $253,000 and $183,000 in the
first quarter of 1998 and 1997, respectively. General and administrative
expenses increased $296,000 or 55% in 1998 compared with 1997, primarily the
result of the Company's growth in assets.
Liquidity and Capital Resources
The Company completed the sale of 4,600,000 shares of common stock at $17 3/8
per share in February 1997 and 7,245,000 shares of common stock at $19 5/8 per
share in November 1997. Net cash proceeds from these offerings were used to pay
off the outstanding borrowings under the Company's credit facility. The
facility was amended and expanded to $150 million in June 1997. It was further
expanded to $175 million in September 1997. Under this facility, the Company
can borrow up to $25 million on an unsecured basis. The secured loans bear
interest at a rate of LIBOR plus 1.50% and the unsecured loans bear interest at
LIBOR plus 1.75%. The facility matures on July 1, 2000. The Company is in the
process of renegotiating its secured line of credit, to reflect lower interest
rates, to increase the unsecured subline and to increase advanced rates based
on loan to value ratios. At April 30, 1998, the Company was in compliance with
the covenants and requirements of its revolving credit facility which has an
outstanding balance of $62,860,000.
The Company anticipates that the cash flow generated by its real estate
investments and funds available under the above credit facility will be
sufficient to meet its short-term liquidity requirements.
During the three months ended March 31, 1998, the Company's operating activities
provided cash flow of $7,347,000. Investing activities utilized cash of
$68,474,000 for real estate acquisitions. Financing activities provided net
cash flow of $60,836,000 consisting of the proceeds from bank borrowings and
mortgage loans of $84,604,000 and net proceeds from the issuance of common stock
of $185,000 offset by repayment of bank borrowings and mortgage loans of
$17,150,000 and payment of dividends of $6,803,000.
The Company expects to fund the cost of acquisitions, capital expenditures,
costs associated with lease renewals and reletting of space, repayment of
indebtedness, and development of properties from (i) cash flow from operations,
(ii) borrowings under the credit facility and, if available, other indebtedness
(which may include indebtedness assumed in acquisitions), (iii) the sale of real
estate investments, and (iv) the sale of equity securities and, possibly, the
issuance of equity securities in connection with acquisitions.
The ability to obtain mortgage loans on income producing property is dependent
upon the ability to attract and retain tenants and the economics of the various
markets in which the properties are located, as well as the willingness of
mortgage-lending institutions to make loans secured by real property. The
ability to sell real estate investments is partially dependent upon the ability
of purchasers to obtain financing at commercially reasonable rates.
Potential Factors Affecting Future Operating Results
At the present time, borrowings under the Company's credit facility bear
interest at a floating rate. The Company anticipates that its results from
operations may be impacted negatively by future increases in interest rates and
substantial additional borrowings to finance additional property acquisitions.
While the Company has historically been successful in renewing and reletting
space, the Company will be subject to the risk that certain leases expiring in
1998 may not be renewed or the terms of renewal may be less favorable to the
Company than current lease terms. The Company expects to incur costs in making
improvements or repairs to its portfolio of properties required by new or
renewing tenants and expects to incur expenses associated with brokerage
commissions payable in connection with the reletting of space.
Many other factors affect the Company's actual financial performance and may
cause the Company's future results to be markedly outside of the Company's
current expectations.
Inflation
Most of the leases require the tenants to pay their share of operating expenses,
including common area maintenance, real estate taxes and insurance, thereby
reducing the Company's exposure to increases in costs and operating expenses
resulting from inflation. Inflation, however, could result in an increase in
the Company's borrowing costs.
Dividends
Common stock dividends declared for the first quarter of 1998 were $0.30 per
share. Distributions declared for the first quarter of 1998 were $0.30 per OP
Unit. Consistent with the Company's policy, dividends and distributions were
paid in the quarter after they were declared.
Government Regulations
The Company's properties are subject to various federal, state and local
regulatory requirements such as local building codes and other similar
regulations. The Company believes its properties are currently in
substantial compliance with all applicable regulatory requirements, although
expenditures at its properties may be required to comply with changes in
these laws. No material expenditures are contemplated at this time in order
to comply with any such laws or regulations.
Under various federal, state and local laws, ordinances and regulations, an
owner or operator of real estate is liable for the costs of removal or
remediation of certain hazardous or toxic substances released on, above, under,
or in such property. Such laws often impose such liability without regard to
whether the owner knew of, or was responsible for, the presence of such
hazardous or toxic substances. The costs of such removal or remediation could
be substantial.
Additionally, the presence of such substances or the failure to properly
remediate such substances may adversely affect the owner's ability to borrow
using such real estate as collateral.
The Company believes that it is in compliance in all material respects with all
federal, state and local laws regarding hazardous or toxic substances, and the
Company has not been notified by any governmental authority of any non-
compliance or other claim in connection with any of its present or former
properties. The Company does not anticipate that compliance with federal, state
and local environmental protection regulations will have any material adverse
impact on the financial position, results of operations or liquidity of the
Company.
Financial Condition
Management considers Funds From Operations (FFO) to be one measure of the
performance of an equity REIT. FFO during the three months ended March 31, 1998
and 1997 amounted to $9,541,000 and $4,806,000, respectively. Funds From
Operations is used by financial analysts in evaluating REITs and can be one
measure of a REIT's ability to make cash distributions. Presentation of this
information provides the reader with an additional measure to compare the
performance of REITs. Funds From Operations generally is defined by the
National Association of Real Estate Investment Trusts as net income (computed
in accordance with generally accepted accounting principles), excluding gains
from debt restructurings and sales of property, plus depreciation and
amortization, and after adjustments for unconsolidated partnerships and joint
ventures. Funds From Operations was computed by the Company in accordance with
this definition. The Company's computation of Funds From Operations may,
however, differ from the methodology for calculating Funds From Operations
utilized by other equity REIT's and, therefore, may not be comparable to such
other REIT's. Funds From Operations does not represent cash generated by
operating activities in accordance with generally accepted accounting
principles; it is not necessarily indicative of cash available to fund cash
needs and should not be considered as an alternative to net income as an
indicator of the Company's operating performance or as an alternative to cash
flow as a measure of liquidity.
Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1997
Funds From Operations (in thousands):
Net Income $ 7,457 $ 3,655
Add Back:
Depreciation and Amortization 2,055 1,126
Minority Interest 29 25
Funds From Operations $ 9,541 $ 4,806
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
Exhibit No. Exhibit
3.1 Charter of the Company, as amended, is incorporated herein by
reference to Exhibit 3.1 to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1997.
3.2 Amended and Restated Bylaws of the Company are incorporated
herein by reference to Exhibit 3.2 to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1995.
11* Statement of Computation of Earnings Per Share.
27* Financial Data Schedule
* Filed herewith
B. Reports on Form 8-K
None
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 of the
undersigned, hereunto duly authorized.
Dated: May 12, 1998
BEDFORD PROPERTY INVESTORS, INC.
(Registrant)
By: /s/ SCOTT R. WHITNEY
Scott R. Whitney
Senior Vice President and
Chief Financial Officer
By: /s/ HANH KIHARA
Hanh Kihara
Vice President and Controller
(Principal Accounting Officer)
<PAGE>
Exhibit 11
Bedford Property Investors, Inc.
Statement of Computation of Earnings per Share
(in thousands, except share and share amounts)
<TABLE>
<S> <C> <C>
Three Months Ended March 31,
1998 1997
Basic:
Net income $ 7,457 $ 3,655
Less:Dividends on the Series A Convertible
Preferred Stock - 1,125
Distributions to Operating
Partnership Unit Holders - -
Net income applicable to common stockholders 7,457 2,530
Weighted average number of shares 22,583,867 8,939,693
Basic earnings per share $ 0.33 $ 0.28
Diluted:
Net income $ 7,457 $ 3,655
Add: Minority interest 29 25
Net income for diluted earnings per share 7,486 3,680
Weighted average number of shares (from above) 22,583,867 8,939,693
Weighted average shares issuable upon
conversion of the Series A Convertible
Preferred Stock - 4,166,667
Weighted average shares of dilutive stock
options using average period stock price
under the treasury stock method 277,674 205,299
Weighted average shares issuable upon the
conversion of operating partnership units 95,049 107,300
Weighted average number of common shares -
assuming dilution 22,956,590 13,418,959
Earnings per share - assuming dilution $ 0.33 $ 0.27
</TABLE>
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<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> $ 1,070
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,909
<PP&E> 499,894
<DEPRECIATION> (10,908)
<TOTAL-ASSETS> 500,557
<CURRENT-LIABILITIES> 13,296
<BONDS> 135,847
0
0
<COMMON> 452
<OTHER-SE> 346,841
<TOTAL-LIABILITY-AND-EQUITY> 500,557
<SALES> 0
<TOTAL-REVENUES> 15,408
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (6,316)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,606)
<INCOME-PRETAX> 7,457
<INCOME-TAX> 0
<INCOME-CONTINUING> 7,457
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> $ 7,457
<EPS-PRIMARY> $ 0.33
<EPS-DILUTED> $ 0.33
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