<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30, 1998
( ) Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
----------------------
Commission file number 1-12630
CENTERPOINT PROPERTIES TRUST
(Exact name of registrant as specified in its charter)
Maryland 36-3910279
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1808 Swift Drive, Oak Brook, Illinois 60523-1501
(Address of principal executive offices)
(630) 586-8000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
----- -----
Number of Common Shares of Beneficial Interest outstanding as of November 12,
1998: 18,749,801. Number of Class B Common Shares of Beneficial Interest
outstanding as of November 12, 1998: 1,398,088
<PAGE>
PART 1. FINANCIAL INFORMATION
This Form 10-Q/A reflects the Company's revision of earnings as announced in our
September 28, 1999 press release, attached as Exhibit 99 to this Form 10-Q/A.
ITEM 1. FINANCIAL STATEMENTS
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS REVISED AS OF SEPTEMBER 30, 1998 AND DECEMBER
31, 1997 (IN THOUSANDS, EXCEPT FOR SHARE AND PER
SHARE INFORMATION)
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- ---------------
<S> <C> <C>
Assets:
Investment in real estate:
Land and leasehold $ 142,326 $ 124,011
Buildings 504,815 418,303
Building improvements 80,082 64,372
Furniture, fixtures, and equipment 17,564 13,912
Construction in progress 13,472 41,677
------------- ---------------
758,259 662,275
Less accumulated depreciation and amortization 56,728 44,352
------------- ---------------
Net investment in real estate 701,531 617,923
Cash and cash equivalents 4,696 1,652
Restricted cash and cash equivalents 31,545 36,509
Tenant accounts receivable, net 19,062 12,416
Mortgage notes receivable 918 9,668
Investment in and advances to affiliate 18,832 11,107
Prepaid expenses and other assets 4,962 3,119
Deferred expenses, net 8,607 6,661
------------- ---------------
$ 790,153 $669,055
------------- ---------------
------------- ---------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $ 106,225 $ 85,755
Senior unsecured debt 100,000
Tax-exempt debt 75,540 75,540
Line of credit 44,000 97,700
Convertible subordinated debentures payable 8,583 11,740
Preferred dividends payable 1,060 901
Accounts payable 4,633 10,311
Accrued expenses 34,420 24,593
Rents received in advance and security deposits 5,372 4,759
------------- ---------------
379,833 311,299
------------- ---------------
Commitments and contingencies
Shareholders' equity:
Preferred shares of beneficial interest, $.001 par value, 10,000,000 shares
authorized; 3,000,000 issued and outstanding having a liquidation
preference of $25 per share ($75,000) 3 3
Common shares of beneficial interest, $.001 par value, 47,727,273 shares
authorized; 17,774,327 and 16,891,951 issued and outstanding, respectively 18 17
Class B common shares of beneficial interest, $.001 par value, 2,272,727
shares authorized; 2,272,727 issued and outstanding 2 2
Additional paid-in-capital 448,606 420,743
Retained earnings (deficit) (37,965) (32,512)
Unearned compensation - restricted stock (344) (497)
------------- ---------------
Total shareholders' equity 410,320 387,756
------------- ---------------
$ 790,153 $ 699,055
------------- ---------------
------------- ---------------
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
2
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AS REVISED FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
1998 1997 1998 1997
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ 20,009 $ 14,681 $ 56,392 $ 41,059
Straight-line rents 742 566 3,263 1,854
Expense reimbursements 5,737 4,283 17,310 13,658
Mortgage interest income 134 397 934 1,637
--------- --------- --------- ---------
Total operating and investment revenue 26,622 19,927 77,899 58,208
--------- --------- --------- ---------
Other Revenue:
Real estate fee income 844 60 3,152 1,424
Equity in net income (loss) of affiliate (362) 1,264 (580) 1,320
--------- --------- --------- ---------
Total other revenue 482 1,324 2,572 2,744
--------- --------- --------- ---------
Total revenue 27,104 21,251 80,471 60,952
--------- --------- --------- ---------
Expenses:
Real estate taxes 5,786 4,187 17,735 12,554
Property operating and leasing 2,674 2,847 9,426 8,294
General and administrative 969 783 2,960 2,225
Depreciation and amortization 5,392 4,179 15,273 10,767
Interest expense:
Interest incurred, net 3,759 2,687 9,743 7,559
Amortization of deferred financing costs 409 193 1,335 589
--------- --------- --------- ---------
Total expenses 18,989 14,876 56,472 41,988
--------- --------- --------- ---------
Operating income 8,115 6,375 23,999 18,964
Other income (expense):
Gain on sale of real estate 1,402
Other income (expense) (7) 59 (44) 126
--------- --------- --------- ---------
Net income 8,108 6,434 25,357 19,090
Preferred dividends (1,590) (4,770)
--------- --------- --------- ---------
Net income available to common shareholders $ 6,518 $ 6,434 $ 20,587 $ 19,090
--------- --------- --------- ---------
--------- --------- --------- ---------
Per share net income available to common shareholders:
Basic $0.32 $0.34 $1.04 $1.03
Diluted $0.32 $0.33 $1.03 $1.01
Distributions per common share $0.438 $0.42 $1.313 $1.26
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
3
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
AS REVISED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------
1998 1997
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 25,357 $ 19,090
Adjustments to reconcile net income to net cash provided
by operating activities:
Bad debts 200 175
Depreciation 14,283 10,159
Amortization of deferred financing costs 1,335 589
Other amortization 990 608
Straight-line rents (3,263) (1,854)
Incentive stock awards 152 265
Interest on converted debentures 35 10
Equity in net (income) loss of affiliate 580 (1,320)
Gain on disposal of real estate (1,402) (140)
Net changes in:
Tenant accounts receivable (2,915) (2,382)
Prepaid expenses and other assets (608) 776
Rents received in advance and security deposits 683 276
Accounts payable and accrued expenses 8,340 (2,731)
---------- ----------
Net cash provided by operating activities 43,767 23,521
---------- ----------
Cash flows from investing activities:
Change in restricted cash and cash equivalents 5,256 (39,302)
Acquisition of real estate (64,017) (59,552)
Additions to construction in progress (26,735) (30,189)
Improvements and additions to properties (17,588) (19,729)
Disposition of real estate 29,104 2,297
Change in deposits on acquisitions (1,279) (1,361)
Issuance of mortgage notes receivable (17,462)
Repayment of mortgage notes receivable 24,375 5,669
Investment in and advances to affiliate (8,304) (17,278)
Receivables from affiliates and employees 44 56
Additions to deferred expenses (4,358) (2,768)
---------- ----------
Net cash used in investing activities (80,964) (162,157)
---------- ----------
Cash flows from financing activities:
Proceeds from sale of common shares 25,095 71,325
Offering costs paid (352) (4,050)
Proceeds from issuance of unsecured notes payable 100,000
Proceeds from line of credit 93,900 129,350
Issuance of mortgage notes payable 55,000
Repayment of mortgage notes payable (117) (2,586)
Repayment of line of credit (147,600) (72,200)
Repayment of notes payable (33) (2,335)
Distributions (30,652) (23,071)
Conversion of convertible subordinated debentures payable (1)
---------- ----------
Net cash provided by financing activities 40,241 151,432
---------- ----------
Net change in cash and cash equivalents 3,044 12,796
Cash and cash equivalents, beginning of the year 1,652 1,070
---------- ----------
Cash and cash equivalents, end of period $ 4,696 $ 13,866
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
4
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION:
These unaudited Consolidated Financial Statements of CenterPoint Properties
Trust, a Maryland real estate investment trust, and Subsidiaries (the
"Company"), have been prepared pursuant to the Securities and Exchange
Commission ("SEC") rules and regulations and should be read in conjunction with
the December 31, 1997, Financial Statements and Notes thereto included in the
Company's Form 10-K/A. References herein to the "Company" shall mean CenterPoint
Properties Trust and Subsidiaries and, prior to October 15, 1997, CenterPoint
Properties Corporation and Subsidiaries which, pursuant to a reorganization of
CenterPoint Properties Corporation from a Maryland corporation to a Maryland
real estate investment trust, was merged with and into CenterPoint Properties
Trust, with CenterPoint Properties Trust as the surviving entity. The following
Notes to Consolidated Financial Statements highlight significant changes to the
Notes included in the December 31, 1997, Audited Financial Statements and
present interim disclosures as required by the SEC. The accompanying
Consolidated Financial Statements reflect, in the opinion of management, all
adjustments necessary for a fair presentation of the interim financial
statements. Except as referred to below, all such adjustments are of a normal
and recurring nature. The consolidated balance sheet as of December 31, 1997 has
been derived from the Company's audited Financial Statements. Certain amounts in
the financial statements have been revised as described in Note 12.
The consolidated statements of operations and statements of cash flows for prior
periods have been reclassified to conform with current classifications with no
effect on results of operations or cash flows.
1. PREFERRED SHARES, COMMON SHARES OF BENEFICIAL INTEREST AND RELATED
TRANSACTIONS
On March 25, 1998, the Company completed a public offering of 370,371 common
shares of beneficial interest at $32.0625 per share in an underwritten offering
to a unit investment trust. Net proceeds from the offering after the
underwriting discounts were approximately $11.9 million. The proceeds were used
to repay a portion of amounts outstanding under the Company's line of credit
co-led by The First National Bank of Chicago and Lehman Brothers Holdings Inc.
On April 8, 1998 the Company completed a private placement to an institutional
investor of 370,000 common shares of beneficial interest at $33.375 per share.
The net proceeds of the offering of approximately $12.3 million were used to
fund working capital requirements.
5
<PAGE>
In July, 1998, the Board of Trustees approved a shareholder protection plan (the
"plan"), declaring a dividend of one right for each share of the Company's
common shares outstanding on or after August 11, 1998. Exercisable 10 days after
any person or group acquires 15 percent or more or commences a tender offer for
15 percent or more of the Company's common shares, each right entitles the
holder to purchase from the Company one one-thousandth of a Junior Preferred
Share of Beneficial Interest, Series A (a "Rights Preferred Share"), at a price
of $120, subject to adjustment. The Rights Preferred Shares (1) are
non-redeemable, (2) are entitled to a minimum preferential quarterly dividend
payment equal to the greater of $25 per share or 1,000 times the Company's
common share dividend, (3) have a minimum liquidation preference equal to the
greater or $100 per share or 1,000 times the liquidation payment made per common
share and (4) are entitled to vote with the common shares with each Rights
Preferred Share having 1,000 votes. 50,000 of the Company's authorized preferred
shares have been designated for the Plan.
The plan was not adopted in response to any takeover attempt but was intended to
provide the Board with sufficient time to consider any and all alternatives
under such circumstances. Its provisions are designed to protect the Company's
shareholders in the event of an unsolicited attempt to acquire the Company at a
value that is not in the best interest of the Company's shareholders.
2. RECENT PRONOUNCEMENTS
In June, 1997, the FASB issued SFAS Statement No. 130, "Reporting Comprehensive
Income." This statement, effective for periods beginning after December 15,
1997, requires the Company to report components of comprehensive income in a
financial statement that is displayed with the same prominence as other
financial statements. Comprehensive income is defined by Concepts Statement No.
6, "Elements of Financial Statements" as the change in equity of a business
enterprise during a period from transactions and other events and circumstances
from nonowner sources. It includes all changes in equity during the period
except those resulting from investment by owners and distributions to owners. As
required by this statement, the Company adopted the new standard for reporting
comprehensive income. The Company's net income is equal to comprehensive income.
In June, 1997, the FASB issued SFAS Statement No. 131, "Disclosures about
Segments of an Enterprise and Related Information." This statement, effective
for financial statements for fiscal years beginning after December 15, 1997,
requires that a public business enterprise report financial and descriptive
information about its reportable operating segments. Generally, financial
information is required to be reported on the basis that it is used internally
for evaluating segment performance and deciding how to allocate resources to
segments. The Company has not yet determined the impact of this SFAS on its
financial statement disclosure.
In March, 1998, the FASB's Emerging Issues Task Force ("EITF") issued EITF Issue
No. 97-11, "Accounting for Internal Costs Related to Real Estate Acquisitions."
This
6
<PAGE>
statement, effective as of March 19, 1998, requires that internal costs of
identifying and acquiring operating properties should be expensed as incurred.
Prior to March 19, 1998, the Company capitalized internal preacquisition costs.
The adoption of this EITF has not had a significant impact on the results of
current operations and the Company this EITF estimates will not have a
significant impact on the results of operations in the future.
In May, 1998, the FASB issued SFAS Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement, effective for financial
statements for fiscal years beginning after June 15, 1999, provides a
comprehensive and consistent standard for the recognition and measurement of
derivatives and hedging activities. The Company has not yet determined the
impact of this SFAS on its financial statements.
3. ACQUISITION AND DISPOSITION OF REAL ESTATE
In February, 1998, the Company disposed of an industrial property located in Elk
Grove Village for a sales price of $10.4 million. The disposition of the
property qualified for treatment as a tax-free exchange under the Internal
Revenue Code. With a portion of the proceeds, the Company purchased two
industrial properties located in Elk Grove Village for an aggregate purchase
price of $6.9 million. The remaining amount was used to acquire qualified
replacement property in the second quarter.
In March, 1998, two industrial properties located in Libertyville and Buffalo
Grove, Illinois were disposed of for an aggregate sales price of $17.8 million
and a property in Bolingbook, Illinois was disposed of for an aggregate sales
price of $5.0 million. The disposition of the Libertyville and Buffalo Grove
properties qualified for treatment as a tax-free exchange under the Internal
Revenue Code. A portion of the proceeds was used to acquire qualified
replacement property in the second quarter, and the remaining proceeds will be
used to acquire other qualified replacement property in the near future.
In April, 1998, the Company purchased two properties. The first property,
located in Chicago, Illinois, was purchased for approximately $5.8 million from
a partnership. It was funded with the Company's working capital and proceeds
from the tax-free exchange account. The second property, located in Des Plaines,
Illinois, was purchased for approximately $5.6 million. The acquisition was
funded from proceeds from the tax-free exchange account.
In May, 1998, the Company purchased two properties. The first property, located
in Wood Dale, Illinois, was purchased from a partnership in which one of the
Company's Senior Officers and a Company Trustee were partners, for approximately
$3.5 million. The transaction satisfied the Company's investment criteria and
was approved by the Company's independent trustees. The second property, located
in Batavia, Illinois, was purchased for approximately $6.1 million from a
partnership. Both acquisitions were funded with proceeds from the tax-free
exchange account.
In June, 1998, the Company purchased two properties. The first property, located
in Chicago, Illinois, was purchased from a partnership for approximately $3.4
million. The
7
<PAGE>
second property, located in University Park, Illinois, was purchased from a
partnership for approximately $1.9 million. Both acquisitions were funded with
proceeds from the tax-free exchange account.
In July, 1998, the Company acquired sixteen properties for an aggregate total of
$43.0 million located as follows: one in Des Plaines, Illinois, six in Franklin
Park, Illinois, four in Bedford Park, Illinois, one in Melrose Park, Illinois,
three in Lake Forest, Illinois and one in Elgin, Illinois. The purchase was
funded with a portion of the proceeds from the tax-free exchange account, the
assumption of $15.6 million in mortgage debt, and the remainder with a draw on
the Company's line of credit.
In September, 1998, the Company purchased two properties. The first property,
located in Alsip, Illinois, was purchased from a partnership for approximately
$8.0 million. The second property, located in Elgin, Illinois, was purchased for
approximately $3.9 million. Both acquisitions were funded with draws from the
Company's line of credit.
At September 30, 1998, there were no remaining proceeds from the qualified
tax-free exchanges.
4. MORTGAGE NOTES RECEIVABLE
In March, 1998, the Company received proceeds from the repayment of an
outstanding mortgage totaling $15.1 million.
In July, 1998, the Company received proceeds for the repayment of a mortgage
outstanding totaling $9.3 million.
5. INVESTMENT IN AND ADVANCES TO AFFILIATE
The Company holds approximately 99% of the economic interest in CenterPoint
Realty Services Corporation ("CRS"), an unconsolidated taxable subsidiary, in
the form of non-voting common equity. CRS and its subsidiaries engage in
businesses and services which compliment the Company's business, including the
provision of services and commodities to tenants of the Company, the development
of real property and the management of properties owned by third parties. Income
from these activities, received by REITs and their qualified REIT subsidiaries,
is limited under current REIT tax regulations.
As of September 30, 1998, the Company had advanced to CRS approximately $14.5
million under a demand loan with interest rates ranging from 8.125% to 11%. The
proceeds of the loan were applied towards development projects currently under
construction and the purchase of land held for future development. Principal and
interest are due upon demand.
The Company typically purchases development projects upon completion of
construction on a turnkey basis or develops the property under guaranteed
maximum price contracts, substantially eliminating any construction risk.
8
<PAGE>
6. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS (IN THOUSANDS)
Supplemental disclosures of cash flow information for nine months ended
September 30, 1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Interest paid $ 8,396 $ 8,308
Interest capitalized 1,611 383
</TABLE>
In conjunction with the acquisition of real estate, for the nine months ended
September 30, 1998 and 1997 the Company acquired the following asset and assumed
the following liability amounts:
<TABLE>
<CAPTION>
1998 1997
----------- ---------
<S> <C> <C>
Purchase of real estate $ 87,331 $ 61,415
Mortgage notes assumed (20,586)
Liabilities, net of other assets (2,728) (1,863)
----------- ---------
Acquisition of real estate $ 64,017 $ 59,552
----------- ---------
----------- ---------
</TABLE>
In conjunction with the disposition of real estate, the Company disposed of the
following asset and liability amounts for the nine months ended September 30,
1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
----------- ---------
<S> <C> <C>
Disposal of real estate $ 29,575 $ 2,276
Liabilities, net of other assets (471) 21
----------- ---------
Disposition of real estate $ 29,104 $ 2,297
----------- ---------
----------- ---------
</TABLE>
Conversion of convertible subordinated debentures payable for the nine months
ended September 30, 1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
----------- ---------
<S> <C> <C>
Convertible subordinated debentures converted $ 3,157 $ 2,590
Common shares issued at $18.25 per share
172,982 and 141,901, respectively 3,157 2,589
----------- ---------
Cash disbursed for fractional shares $ - $ 1
----------- ---------
----------- ---------
</TABLE>
7. SENIOR UNSECURED DEBT
On April 5, 1998 the Company issued $100 million, 6.75 percent senior unsecured
notes due April 1, 2005. The net proceeds of $99 million were used to repay
substantially all amounts then outstanding under the Company's line of credit
co-led by The First National Bank of Chicago and Lehman Brothers Holdings Inc.
8. COMMITMENTS AND CONTINGENCIES
In the normal course of business, from time to time, the Company is involved in
legal actions relating to the ownership and operations of its properties. In
management's opinion, the liabilities, if any, that may ultimately result from
such legal actions are not
9
<PAGE>
expected to have a materially adverse effect on the consolidated financial
position, results of operations and liquidity of the Company.
The Company has entered into other contracts for the acquisition of properties.
Each acquisition is subject to satisfactory completion of due diligence and, in
the case of development projects, completion and occupancy of the projects.
In September, 1998, the Company entered into an interest rate lock arrangement
to fix the interest rate on $25 million of anticipated borrowings at 4.835% plus
the market spread to the 7 year Treasury on the date of issuance of the debt.
The arrangement expires in May, 1999.
At September 30, 1998, seven of the properties owned by the Company are subject
to purchase options held by certain tenants. The purchase options are
exercisable at various intervals through 2006, each for an amount greater than
the net book value of the asset. Management is not currently aware of planned
exercises of options and believes that any potential exercises would not
materially affect the results or prospects of the Company.
9. SUBSEQUENT EVENTS
In October 1998, the Company purchased a property, located in Chicago, Illinois,
for $0.8 million with proceeds from a draw on the Company's line of credit.
Also in October, the Company disposed of two properties located in Schaumburg
and Chicago, Illinois for an aggregate price of $3.2 million. The disposition of
the properties qualified for treatment as a tax-free exchange under the Internal
Revenue Code. The Company expects to use the proceeds to acquire qualified
replacement property.
In October 1998, 874,639 of the Company's Class B common shares were converted
by the holder of the Class B common shares into 874,639 common shares which
constituted 4.9% of the then total outstanding shares of the Company.
Since September 30, 1998, $0.5 million worth of convertible subordinated
debentures have been converted to 27,397 common shares.
10
<PAGE>
10. EARNINGS PER COMMON SHARE
The following are the reconciliations of the numerators and denominators of the
basic and diluted EPS for the three months ended September 30, 1998 and 1997 and
the nine months ended September 30, 1998 and 1997.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
1998 1997 1998 1997
------------ ------------- ----------- ------------
<S> <C> <C> <C> <C>
(in thousands, except for share data)
Numerators:
Net income $ 8,108 $ 6,434 $ 25,357 $ 19,090
Dividends on preferred shares (1,590) (4,770)
------------ ------------- ----------- ------------
Net income available to common shareholders - for
basic and diluted EPS $ 6,518 $ 6,434 $ 20,587 $ 19,090
------------ ------------- ----------- ------------
------------ ------------- ----------- ------------
Denominators:
Weighted average common shares outstanding - for
basic EPS 20,103,160 19,027,709 19,771,256 18,472,253
Effect of dilutive securities - options 227,618 349,628 235,890 346,616
------------ ------------- ----------- ------------
Weighted average common shares outstanding - for
diluted EPS 20,330,778 19,377,337 20,007,146 18,818,869
------------ ------------- ----------- ------------
------------ ------------- ----------- ------------
</TABLE>
The assumed conversion of the convertible subordinated debentures into common
shares for purposes of computing diluted EPS by adding interest expense for the
debentures to the numerators, and adding assumed share conversions to the
denominators for the three months ended September 30, 1998 and 1997 and the nine
months ended September 30, 1998 and 1997 would be anti-dilutive.
11
<PAGE>
11. PRO FORMA FINANCIAL INFORMATION
Due to the effect of securities offerings in March, 1997, November, 1997, March,
1998, and April 1998, and the 1997 and 1998 acquisitions and dispositions of
properties, the historical results are not indicative of the future results of
operations. The following unaudited pro forma information for the nine months
ended September 30, 1998 and 1997 is presented as if the 1997 acquisitions and
dispositions, the 1998 acquisitions and dispositions, the 1997 and 1998
securities offerings, and the corresponding repayment of certain debt had all
occurred on January 1, 1997 (or the date the property first commenced operations
with a third party tenant, if later). The pro forma information is based upon
historical information and does not purport to present what actual results would
have been had the offerings and related transactions, in fact, occurred at
January 1, 1997, or to project results for any future period.
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1998 1997
-------- --------
<S> <C> <C>
(in thousands, except for per share data)
Total revenues $ 86,272 $ 70,129
Total expenses 60,116 45,253
-------- --------
Net income 26,156 24,876
Preferred dividends (4,770) (4,770)
-------- --------
Net income available to common
shareholders $ 21,386 $ 20,106
-------- --------
-------- --------
Per share income available to common
shareholders:
Basic $ 1.04 $ 1.01
Diluted $ 1.03 $ .99
</TABLE>
12. REVISION
During the third quarter of 1999, the Company determined that it had recognized
certain participation, assignment, consulting and financing fees in periods in
advance of that permitted and has revised previously issued financial statements
accordingly. In addition, the Company revised previously issued financial
statements to recognize, for financial reporting purposes, certain gains in
connection with tax-deferred exchanges that had not been previously recognized.
The financial statement revisions effect only the timing of fee revenue and HAVE
NO EFFECT ON PREVIOUSLY REPORTED CASH FLOW or on the total fee revenue to be
recognized.
12
<PAGE>
The effect of this revised reporting on the Company's condensed balance sheets,
condensed statements of operations, net income and earnings per share is as
follows:
<TABLE>
<CAPTION>
(in thousands, except for per share data)
For the nine months ended
Sept 30,
--------
1998 1997
---- ----
Previously As Previously As
Reported Revised Reported Revised
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Condensed Balance Sheets:
Investment in real estate, net $681,392 $701,531 $498,307 $508,221
Mortgage notes receivable 19,655 918 19,584 9,670
Other assets 91,469 87,704 111,431 111,114
-------- -------- -------- --------
Total assets $792,516 $790,153 $629,322 $629,005
-------- -------- -------- --------
-------- -------- -------- --------
Long term debt $334,348 $334,348 $281,988 281,988
Other liabilities 45,485 45,485 32,682 32,832
Shareholders' equity 412,683 410,320 314,652 314,185
-------- -------- -------- --------
Total liabilities and
shareholders' equity $792,516 $790,153 $629,322 $629,005
-------- -------- -------- --------
-------- -------- -------- --------
Condensed Statements of Operations:
Operating and investment revenue $ 77,785 $ 77,899 $57,994 $58,208
Other revenue 6,083 2,572 3,425 2,744
-------- -------- -------- --------
Total revenue 83,868 80,471 61,419 60,952
Operating expenses (56,472) (56,472) (41,988) (41,988)
Other income (expense) (45) 1,358 126 126
-------- -------- -------- --------
Net income $ 27,351 $ 25,357 $ 19,557 $ 19,090
-------- -------- -------- --------
-------- -------- -------- --------
Net income available to common shareholders per share:
Net income per share- basic $ 1.14 $ 1.04 $ 1.06 $ 1.03
Net income per share- diluted $ 1.13 $ 1.03 $ 1.04 $ 1.01
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
(in thousands, except for per share data)
For the nine months ended
Sept 30,
--------
1998 1997
---- ----
Previously As Previously As
Reported Revised Reported Revised
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Condensed Statements of Operations:
Operating and investment revenue $ 26,558 $ 26,622 $19,840 $19,927
Other revenue 2,008 482 1,719 1,324
-------- -------- -------- --------
Total revenue 28,566 27,104 21,559 21,251
Operating expenses (18,989) (18,989) (14,876) (14,876)
Other income (expense) (7) (7) 59 59
-------- -------- -------- --------
Net income $ 9,570 $ 8,108 $ 6,742 $ 6,434
-------- -------- -------- --------
-------- -------- -------- --------
Net income available to common shareholders per share:
Net income per share- basic $ .40 $ .32 $ .35 $ .34
Net income per share- diluted $ .39 $ .32 $ .35 $ .33
</TABLE>
14
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION.
The following is a discussion of the historical operating results of the
Company. The discussion should be read in conjunction with the Form 10-K/A filed
for the fiscal year ended December 31, 1997 and the unaudited Financial
Statements presented with this Form 10-Q/A.
The Company announced in the 3rd quarter 1999 that it was restating previously
audited and unaudited financial statements for the years 1997, 1998 and 1999.
See Exhibit 99 to this Form 10-Q/A.
The revision reflects the recognition of gains, for financial reporting
purposes, on certain completed sales structured as tax-deferred exchanges under
Section 1031 of the Internal Revenue Code, where gains are not recognized for
tax purposes. Secondly, the revision reflects the timing of gain recognition
from other property sales related to the Company's development activity. While
the timing of the reported gains from these latter transactions has been
shifted, the aggregate gain remains unchanged and no cash or tax effect has
resulted. As of the 3rd quarter 1999, all gains have been recognized.
RESULTS OF OPERATIONS
COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1998 TO THREE MONTHS ENDED
SEPTEMBER 30, 1997.
REVENUES
Total revenues increased by $5.9 million or 27.5% over the same period last
year.
In the third quarter of 1998, 98.2% of total revenues of the Company were
derived primarily from base rents, straight-line rents, expense reimbursements
and mortgage income (operating and investment revenue), pursuant to the terms of
tenant leases and mortgages held for space at the warehouse/industrial
properties.
Operating and investment revenues increased by $6.7 million in the third quarter
of 1998. A portion of the increase from the prior year is due to income from
twenty-seven properties acquired in the first nine months of 1998 and two
build-to-suit properties coming on line totaling 4.2 million square feet, net of
fourdispositions as of September 30, 1998. The remainder of the increase was
attributable to a full period of income from the 1997 acquisition of twenty-one
properties, totaling 7.1 million square feet and seven build-to-suit properties
totaling 1.6 million square feet coming on-line in 1997, net of three property
dispositions.
Other revenues decreased $0.8 million due to decreased fees earned by the
Company in connection with build-to-suit, development and leasing activities
which was partially
15
<PAGE>
offset by decreased property and build-to suit sales by the Company's
unconsolidated affiliate.
OPERATING AND NONOPERATING EXPENSES
Real estate tax expense and property operating and leasing expense increased by
$1.4 million from period to period. The majority of the increase, $1.6 million,
resulted from a full period of real estate taxes on 1997 acquisitions and a
partial period of real estate taxes on 1998 acquisitions, net of dispositions.
Property operating and leasing costs decreased in part due to lower insurance,
utilities and repairs and maintenance. Property operating and leasing costs as a
percentage of total revenues decreased from 13.4% to 9.9% when comparing the
third quarter of 1997 to the third quarter of 1998 due mainly to "economies of
scale" realized by the Company.
General and administrative expenses increased by $0.2 million for the period due
primarily to the growth of the Company, but as a percentage of total revenues
decreased from 3.7% to 3.6% when comparing the third quarter of 1997 to the
third quarter of 1998.
Depreciation and amortization increased by $1.2 million due to a full period of
depreciation on 1997 acquisitions and partial period depreciation on 1998
acquisitions.
Interest incurred increased by approximately $1.1 million over the same period
last year due to the Company holding higher average balances outstanding in the
third quarter of 1998 compared to 1997.
Other income (expenses) decreased due to the non-recurring disposal of fixed
assets for a gain which occurred in the third quarter of 1997. There was no
corresponding disposal in the third quarter of 1998.
NET INCOME AND OTHER MEASURES OF OPERATIONS
Net income increased $1.7 million or 26.0% due to the growth of the Company
through the net acquisition of warehouse/industrial real estate.
Funds from operations (FFO) increased 11.0% from $10.9 million to $12.1 from the
third quarter of 1997 to the third quarter of 1998. The National Association of
Real Estate Investment Trusts (NAREIT) defines funds from operations as net
income before extraordinary items plus depreciation and amortization less the
amortization of deferred financing costs. The Company considers FFO and FFO
growth to be one relevant measure of financial performance of equity REITs that
provides a relevant basis for comparison among REITs, and it is presented to
assist investors in analyzing the performance of the Company.
When comparing the third quarter results of operations of properties owned at
July 1, 1997 with the results of operations of the same properties for the third
quarter 1998 (the "same property" portfolio), the Company recognized an increase
of approximately 4.64%
16
<PAGE>
in net operating income. This same property increase was due to the timely lease
up of vacant space, rental increases on renewed leases and contractual increases
in minimum rent under leases in place.
The Company assesses its operating results, in part, by comparing the Net
Revenue Margin between periods. Net Revenue Margin is calculated for the "in
service" portfolio by dividing net revenue (total operating and investment
revenue less real estate taxes and property operating and leasing expense) by
adjusted operating and investment revenue (operating and investment revenue less
expense reimbursements, adjusted for leases containing expense stops). This
margin indicates the percentage of revenue actually retained by the Company or,
alternatively, the amount of property related expenses not recovered by tenant
reimbursements. The margin for the third quarter of 1998 was 94.1% compared with
89.7% for the same period last year. The third quarter margin was in line with
the Company's expectations.
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1998 TO NINE MONTHS ENDED
SEPTEMBER 30, 1997.
REVENUES
Total revenues increased by $19.5 million or 32.0% over the same period last
year.
In the nine months of 1998, 96.8% of total revenues of the Company were derived
primarily from base rents, straight-line rents, expense reimbursements and
mortgage income (operating and investment revenue), pursuant to the terms of
tenant leases and mortgages for occupied space at the warehouse/industrial
properties.
Operating and investment revenues increased by $19.7 million in the first nine
months of 1998. A portion of the increase from the prior year is due to income
from twenty-seven properties acquired in the first nine months of 1998 and two
build-to-suit properties coming on line totaling 4.2 million square feet, net of
four dispositions as of September 30, 1998. The remainder of the increase was
attributable to a full period of income from the 1997 acquisition of twenty-one
properties, totaling 7.1 million square feet and seven build-to-suit properties
totaling 1.6 million square feet coming on-line in 1997, net of property
dispositions.
The company incurred gains on the sale of four properties during the first half
of 1998. In 1997, the Company sold one property resulting in a much lower gain.
OPERATING AND NONOPERATING EXPENSES
Real estate tax expense and property operating and leasing expense increased by
$6.3 million from period to period. The majority of the increase, $5.2 million,
resulted from a full period of real estate taxes on 1997 acquisitions and a
partial period of real estate taxes on 1998 acquisitions, net of dispositions.
The balance of the increase was due to
17
<PAGE>
increased leasing expenses, insurance, utilities, repairs and maintenance and
property management costs which increased proportionate to the level of
acquisitions. However, property operating and leasing costs as a percentage of
total revenues decreased from 13.6% to 11.7% when comparing the first nine
months of 1997 to the same period in 1998 due to "economies of scale" realized
by the Company.
General and administrative expenses increased by $0.7 million for the period due
primarily to the growth of the Company, but as a percentage of total revenues
remained constant from 3.7% to 3.7% comparing periods.
Depreciation and amortization increased by $4.5 million due to a full period of
depreciation on 1997 acquisitions and depreciation on 1998 acquisitions.
Interest incurred increased by approximately $2.2 million over the same period
last year due to the Company holding higher average balances outstanding in the
second quarter of 1998 compared to 1997.
Other income (expenses) decreased due to the non-recurring disposal of fixed
assets for a gain which occurred in the second quarter of 1997.
NET INCOME AND OTHER MEASURES OF OPERATIONS
Net income increased $6.3 million or 32.9% due to the growth of the Company
through the net acquisition of Warehouse/Industrial real estate.
Funds from operations (FFO) increased 15.3% from $30.7 million to $35.4 million
the nine months ended September 30, 1997 to the nine months ended September 30,
1998.
When comparing the first nine month's results of operations of properties owned
at January 1, 1997 with the results of operations of the same properties for the
first nine months of 1998 (the "same property" portfolio), the Company
recognized an increase of approximately 1.6% in net operating income. This same
property increase was due to the timely lease up of vacant space, rental
increases on renewed leases and contractual increases in minimum rent under
leases in place.
The Net Revenue Margin for the first nine months of 1998 was 89.2% compared with
89.8% for the same period last year. The decrease was primarily attributable to
transitional vacancy.
LIQUIDITY AND CAPITAL RESOURCES
OPERATING AND INVESTMENT CASH FLOW
Cash flow generated from Company operations has historically been utilized for
working capital purposes and distributions, while proceeds from financings and
capital raises have been used to fund acquisitions and other capital costs.
However, cash flow from operations during the first nine months of 1998 of $43.8
million net of $30.7 million of
18
<PAGE>
1998 distributions provided $13.1 million of retained capital. The Company
expects retained capital to fund a portion of future investment activities.
For the first nine months of 1998, the Company's investment activities include
acquisitions of $64.0 million, advances for construction in progress of $26.7
million, advances on mortgage notes receivable of $17.5 million, and
improvements and additions to properties of $17.6 million. These activities were
funded with dispositions of real estate of $29.1 million, advances on the
company's line of credit of $93.9 million and a portion of the Company's
retained capital.
EQUITY AND SHARE ACTIVITY
On March 25, 1998, the Company completed a public offering of 370,371 common
shares of beneficial interest at $32.0625 per share in an underwritten offering
to a unit investment trust. Net proceeds of $11.9 million from the public
offering, proceeds from the repayment of mortgage notes receivable, and working
capital were used to repay amounts outstanding under the Company's line of
credit of $30.1 million.
On April 8, 1998 the Company completed the private placement of 370,000 common
shares of beneficial interest at $33.375 per share to an institutional investor.
The net proceeds of the offering of approximately $12.3 million were used to
fund working capital requirements.
During the first nine months of 1998, the Company paid distributions on common
shares of $23.0 million or $1.313 per share and on class B common shares of $3.1
million or $1.348 per share. Also, in January of 1998, the Company paid
dividends on preferred shares of $1.43 million or $0.477 per share, and in July
and October of 1998, paid dividends of $1.59 million or $0.53 per share each
time. The following factors, among others, will affect the future availability
of funds for distribution: (i) scheduled increases in base rents under existing
leases and (ii) changes in minimum base rents attributable to replacement of
existing leases with new or replacement leases.
DEBT CAPACITY
As of November 12, 1998, the Company has a $150 million unsecured credit
facility co-led by The First National Bank of Chicago and Lehman Brothers
Holdings Inc. As of November 15, 1998, the Company had outstanding borrowings of
approximately $60.1 million under the unsecured revolving line of credit
(approximately 5.5% of the Company's fully diluted total market capitalization),
and the Company had remaining availability of approximately $89.9 million under
its unsecured line of credit.
At September 30, 1998, the Company's debt constituted approximately 28.5% of its
fully diluted total market capitalization. Also, the Company's debt service
coverage ratio remained high at 5.9 to 1, and the Company's fixed charge
coverage ratio decreased to 3.9 to 1 due to preferred dividends. The Company's
fully diluted common equity market capitalization was approximately $746.4
million, and its fully diluted total market
19
<PAGE>
capitalization exceeded $1.1 billion. The Company's leverage ratios benefited
during the first nine months of 1998 from the conversion of approximately $3.2
million of its 8.22% Convertible Subordinated Debentures, due 2004, to 172,982
common shares.
In February, 1998, Duff & Phelps Credit Rating Co. joined Moody's Investors
Service's January, 1997 evaluation by assigning investment grade rating to the
Company's senior unsecured debt and preferred stock issuable under the Company's
shelf registration statement and convertible subordinated notes. Also in 1997,
Standard and Poors assigned an investment grade rating to the Company's senior
unsecured debt. These investment grade ratings further enhance the Company's
financial flexibility.
The Company has considered its short-term (one year or less) capital needs, in
conjunction with its estimated future cash flow from operations and other
expected sources. The Company believes that its ability to fund operating
expenses, building improvements, debt service requirements and the minimum
distribution required to maintain the Company's REIT qualification under the
Internal Revenue Code, will be met by recurring operating and investment revenue
and other real estate income.
Long-term (greater than one year) capital needs for property acquisitions,
scheduled debt maturities, major redevelopment projects, expansions, and
construction of build-to-suit properties will be supported, initially, by draws
on the Company's unsecured line of credit, followed by the issuance of long-term
unsecured indebtedness and the issuance of equity securities. Management expects
that a significant portion of the Company's investment funds will be supplied by
the proceeds of property dispositions.
INFLATION
Inflation has not had a significant impact on the Company because of the
relatively low inflation rates in the Company's markets of operation. Most of
the Company's 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. In addition, many of the leases are for
remaining terms less than five years which may enable the Company to replace
existing leases with new leases at higher base rental rates if rents of existing
leases are below the then-existing market rate.
YEAR 2000 COMPLIANCE
In response to the Year 2000 issue, the Company initiated a project in early
1997 to identify, evaluate and implement a new computerized real estate
management system. The Company is addressing the issue through a combination of
modifications to existing programs and conversion to Year 2000 compliant
software. In addition, the Company is discussing with its tenants, vendors, and
other service providers the possibility of any interface difficulties relating
to the Year 2000 issue which may affect the Company. If the Company and those it
conducts business with do not make modifications or conversions in a timely
manner, the Year 2000 issue may have a material adverse effect on the Company's
20
<PAGE>
business, financial condition, and results of operations. The total cost
associated with the required modifications is not expected to be material to
the Company's consolidated results of operations, liquidity and financial
position, and is being expensed as incurred.
RECENT PRONOUNCEMENTS
In June, 1997, the FASB issued SFAS Statement No. 130, "Reporting Comprehensive
Income." This statement, effective for periods beginning after December 15,
1997, would require the Company to report components of comprehensive income in
a financial statement that is displayed with the same prominence as other
financial statements. Comprehensive income is defined by Concepts Statement No.
6, "Elements of Financial Statements" as the change in equity of a business
enterprise during a period from transactions and other events and circumstances
from nonowner sources. It includes all changes in equity during the period
except those resulting from investment by owners and distributions to owners. As
required by this statement, the Company adopted the new standard for reporting
comprehensive income. The Company's net income is equal to comprehensive income.
In June, 1997, the FASB issued SFAS Statement No. 131, "Disclosures about
Segments of an Enterprise and Related Information." This statement, effective
for financial statements for fiscal years beginning after December 15, 1997,
requires that a public business enterprise report financial and descriptive
information about its reportable operating segments. Generally, financial
information is required to be reported on the basis that it is used internally
for evaluating segment performance and deciding how to allocate resources to
segments. The Company has not yet determined the impact of this SFAS on its
financial statement disclosures.
In March, 1998, the FASB's Emerging Issues Task Force ("EITF") issued EITF Issue
No. 97-11, "Accounting for Internal Costs Related to Real Estate Acquisitions."
This statement, effective as of March 19, 1998, requires that internal costs of
identifying and acquiring operating properties should be expensed as incurred.
Prior to March 19, 1998, the Company capitalized internal preacquisition costs.
The adoption of this EITF has not had a significant impact on the results of
current operations and estimates will not have a significant impact on the
results of operations in the future.
In May, 1998, the FASB issued SFAS Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement, effective for financial
statements for fiscal years beginning after June 15, 1999, provides a
comprehensive and consistent standard for the recognition and measurement of
derivatives and hedging activities. The Company has not yet determined the
impact of this SFAS on its financial statements.
FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q/A contains forward looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. The Company's
actual results could
21
<PAGE>
differ materially from those set forth in the forward looking statements as a
result of various factors, including, but not limited to, uncertainties
affecting real estate businesses generally (such as entry into new leases,
renewals of leases and dependence on tenants' business operations), risks
relating to acquisition, construction and development activities, possible
environmental liabilities, risks relating to leverage, debt service and
obligations with respect to the payment of dividends (including availability of
financing terms acceptable to the Company and sensitivity of the Company's
operations to fluctuations in interest rates), the potential for the need to use
borrowings to make distributions necessary for the Company to qualify as a REIT,
dependence on the primary market in which the Company's properties are located,
the existence of complex regulations relating to the Company's status as a REIT,
the failure of the Company and entities the Company does business with to make
necessary modifications and conversions to Year 2000 compliant software in a
timely manner and the potential adverse impact of the market interest rates on
the cost of borrowings by the Company and on the market price for the Company's
securities.
22
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Exhibit 27 - Financial Data Schedule
(2) Exhibit 99 - Press release dated September 28, 1999.
(b) The Company filed a Report on Form 8-K on August 3, 1998 to report
the adoption by the Board of Trustees of a Shareholder Rights Plan.
23
<PAGE>
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.
CENTERPOINT PROPERTIES TRUST
a Maryland Company
By: /s/ Paul S. Fisher
---------------------------------------
Paul S. Fisher
Executive Vice President and
Chief Financial Officer
December 29, 1999 (Principal Accounting Officer)
24
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 36,241
<SECURITIES> 0
<RECEIVABLES> 19,062
<ALLOWANCES> 575
<INVENTORY> 0
<CURRENT-ASSETS> 33,319
<PP&E> 758,259
<DEPRECIATION> 56,728
<TOTAL-ASSETS> 790,153
<CURRENT-LIABILITIES> 45,485
<BONDS> 334,348
0
3
<COMMON> 20
<OTHER-SE> 410,297
<TOTAL-LIABILITY-AND-EQUITY> 790,153
<SALES> 0
<TOTAL-REVENUES> 80,471
<CGS> 0
<TOTAL-COSTS> 56,472
<OTHER-EXPENSES> (1,358)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,078
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,587
<EPS-BASIC> 1.04
<EPS-DILUTED> 1.03
</TABLE>
<PAGE>
1808 SWIFT DRIVE
OAK BROOK, ILLINOIS 60523-1501
[CENTERPOINT LOGO] PHONE: 630.586.8000
FAX: 630.586.8010
WWW.CENTERPOINT-PROP.COM
NEWS RELEASE
CONTACT AT THE COMPANY:
---------------------------------------------------------------------
John S. Gates, Jr. Rhonda Mork
CEO & President Director of External Affairs
630-586-8000 630-586-8101
[email protected]
FOR IMMEDIATE RELEASE
SEPTEMBER 28, 1999
CENTERPOINT REPORTS RESTATEMENT OF
1997, 1998 AND 1999 FINANCIAL RESULTS;
CUMULATIVE NET INCOME INCREASES BY $2.1 MILLION
CUMULATIVE FFO INCREASES $0.03 PER SHARE FOR THE SAME PERIODS
OAK BROOK, SEPTEMBER 28, 1999. CenterPoint Properties Trust (NYSE: CNT)
announced today that the Company is restating previously audited results for the
years 1997 and 1998, as well as the unaudited first two quarters of 1999. The
Company's independent accountants, PricewaterhouseCoopers ("PwC"), are in
concurrence with these reported changes. The restatement, which concerns gain
recognition related to completed property sales, results in a cumulative
increase in net income of $2.1 million over previously reported net income.
Cumulative Funds From Operations ("FFO") increases $0.7 million, equal to $0.03
per share.
CenterPoint President and CEO, John Gates, emphasized that the restatement will
not affect the Company's business or strategy. "This is a technical reporting
change. It has no impact whatsoever on the economics of the sales involved and
will have no impact on anticipated future selling. CenterPoint is committed to
our strategy of recycling capital through sales and the Company's business
prospects remain exceptionally strong."
The restatement reflects the recognition of gains, not previously reported,
related to certain completed sales structured as tax-deferred exchanges under
Section 1031 of the Internal Revenue Code, where gains were not reported for tax
purposes. Secondly, the restatement reflects the retiming of gain recognition
from other completed property sales related to the Company's development
activity. While the timing of reported gains from these latter transactions has
been shifted, the aggregate gain remains unchanged and no cash or tax effect has
resulted.
As part of the restatement, $3.5 million in net income originally reported in
1998 will be shifted into the third quarter of 1999. Other than this shift,
management expects third quarter 1999 results to be in line with current
expectations.
Stated Gates, "In the final analysis, when CenterPoint reports its third quarter
results, cumulative retained earnings will be $2.1 million higher than
heretofore anticipated."
<PAGE>
BACKGROUND
On August 9, 1999, CenterPoint announced that, based on a recommendation by its
independent accountants, PricewaterhouseCoopers, it was shifting $1.5 million of
net income from the second quarter of 1999 to the third quarter of 1999.
Although the shift had no effect on the full year results, the August 9th
release specified that the independent accountants would review prior, similar
transactions. Based on the results of the review, which is now complete, the
Company is restating the affected periods from 1997 to 1999.
Revised quarterly statements follow (6 pages).
CENTERPOINT PROPERTIES TRUST
Statements in this release, which are not historical, may be deemed
forward-looking statements under federal securities laws. There can be not
assurance that future results will be achieved and actual results could defer
materially from forecasts and estimates. Factors that could cause actual results
to differ materially are general business and economic conditions, completion of
pending acquisitions, competitive market conditions, weather, pricing of debt
and equity capital markets and other risks inherent in the real estate business.
CenterPoint is a publicly traded real estate investment trust (REIT). It is the
largest industrial property company in the 1.25 billion square foot Chicago
regional market, with a current portfolio of approximately 30 million square
feet and an additional 605 acres of land upon which 12.2 million square feet
could be developed. The Company is focused on providing unsurpassed tenant
satisfaction and adding value to its shareholders through customer driven
management, investment, development and redevelopment of warehouse/industrial
facilities. The first major REIT to focus on the industrial property sector,
CenterPoint has a current total market capitalization of approximately $1.3
billion.
###
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
MARCH 31, 1997
(UNAUDITED)
------------------------------------------
REPORTED ADJUSTMENT RESTATED
-------- ---------- --------
<S> <C> <C> <C>
ASSETS
Assets:
Investment in real estate:
Land $80,299 $ - $80,299
Buildings 289,867 - 289,867
Building improvements 45,063 - 45,063
Furniture, fixtures, and equipment 10,885 - 10,885
Construction in progress 18,522 4,557 23,079
------------------------------------------
444,636 4,557 449,193
Less accumulated
depreciation and amortization 33,328 - 33,328
------------------------------------------
Net investment in real estate 411,308 4,557 415,865
Cash and cash equivalents 6,585 - 6,585
Restricted cash and cash equivalents 396 - 396
Tenant accounts receivable, net 12,440 - 12,440
Mortgage notes receivable 19,809 (4,557) 15,252
Investment in and advances to affiliate 15,664 - 15,664
Prepaid expenses and other assets 3,404 60 3,464
Deferred expenses, net 4,262 - 4,262
------------------------------------------
$473,868 $ 60 $473,928
==========================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt $111,917 $ - $111,917
Senior unsecured debt - - -
Tax-exempt debt - - -
Line of credit 7,500 - 7,500
Convertible subordinated debentures
payable 12,135 - 12,135
Preferred dividends payable - - -
Accounts payable 3,498 - 3,498
Accrued expenses 18,576 - 18,576
Rents received in advance and
security deposits 4,008 - 4,008
------------------------------------------
157,634 - 157,634
------------------------------------------
Stockholders' equity:
Perferred Stock, $.001 par value - - -
Common stock, $.001 par value 17 - 17
Class B common stock, $.001 par value 2 - 2
Additional paid-in-capital 345,982 - 345,982
Retained earnings(deficit) (29,105) 60 (29,045)
Unearned compensation - restricted stock (662) - (662)
------------------------------------------
Total stockholders' equity 316,234 60 316,294
------------------------------------------
$473,868 $ 60 $473,928
==========================================
</TABLE>
<TABLE>
<CAPTION>
JUNE 30,1997 SEPTEMBER 30, 1997
(UNAUDITED) (UNAUDITED)
---------------------------------------------------------------------------
REPORTED ADJUSTMENT RESTATED REPORTED ADJUSTMENT RESTATED
-------- ---------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Assets:
Investment in real estate:
Land $86,407 $ 997 $87,404 $ 90,411 $ 997 $ 91,408
Buildings 321,846 3,989 325,835 357,868 3,989 361,857
Building improvements 50,029 - 50,029 60,119 - 60,119
Furniture, fixtures, and equipment 11,284 - 11,284 12,983 - 12,983
Construction in progress 19,812 - 19,812 17,332 4,928 22,260
------------------------------------ ---------------------------------
489,378 4,986 494,364 538,713 9,914 548,627
Less accumulated
depreciation and amortization 36,404 - 36,404 40,406 - 40,406
------------------------------------ ---------------------------------
Net investment in real estate 452,974 4,986 457,960 498,307 9,914 508,221
Cash and cash equivalents 2,006 - 2,006 13,866 - 13,866
Restricted cash and cash equivalents 866 - 866 40,279 - 40,279
Tenant accounts receivable, net 13,153 - 13,153 14,071 - 14,071
Mortgage notes receivable 20,225 (4,986) 15,239 19,584 (9,914) 9,670
Investment in and advances to affiliate 15,120 (36) 15,084 32,957 (36) 32,921
Prepaid expenses and other assets 3,412 27 3,439 4,647 (281) 4,366
Deferred expenses, net 4,481 - 4,481 5,611 - 5,611
------------------------------------ ---------------------------------
$512,237 $ (9) $512,228 $629,322 $ (317) $629,005
==================================== =================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt $111,892 $ - $111,892 $166,865 $ - $166,865
Senior unsecured debt - - - - - -
Tax-exempt debt 42,550 - 42,550 103,250 - 103,250
Line of credit - - - 11,790 - 11,790
Convertible subordinated debentures
payable 12,055 - 12,055 83 - 83
Preferred dividends payable - - - - - -
Accounts payable 5,163 - 5,163 11,315 - 11,315
Accrued expenses 21,722 150 21,872 17,171 150 17,321
Rents received in advance and
security deposits 3,483 - 3,483 4,196 - 4,196
------------------------------------ ---------------------------------
196,865 150 197,015 314,670 150 314,820
------------------------------------ ---------------------------------
Stockholders' equity:
Perferred Stock, $.001 par value - - - - - -
Common stock, $.001 par value 17 - 17 17 - 17
Class B common stock, $.001 par value 2 - 2 2 - 2
Additional paid-in-capital 345,850 - 345,850 346,377 - 346,377
Retained earnings(deficit) (29,964) (159) (30,123) (31,241) (467) (31,708)
Unearned compensation - restricted stock (533) - (533) (503) - (503)
------------------------------------ ---------------------------------
Total stockholders' equity 315,372 (159) 315,213 314,652 (467) 314,185
------------------------------------ ---------------------------------
$512,237 $ (9) $512,228 $629,322 $ (317) $629,005
==================================== =================================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1997
-----------------------------------------
REPORTED ADJUSTMENT RESTATED
-------- ---------- --------
<S> <C> <C> <C>
ASSETS
Assets:
Investment in real estate:
Land $123,014 $ 997 $124,011
Buildings 414,314 3,989 418,303
Building improvements 64,372 - 64,372
Furniture, fixtures, and equipment 13,912 - 13,912
Construction in progress 26,034 15,643 41,677
-----------------------------------------
641,646 20,629 662,275
Less accumulated
depreciation and amortization 44,352 - 44,352
-----------------------------------------
Net investment in real estate 597,294 20,629 617,923
Cash and cash equivalents 1,652 - 1,652
Restricted cash and cash equivalents 36,509 - 36,509
Tenant accounts receivable, net 12,416 - 12,416
Mortgage notes receivable 30,297 (20,629) 9,668
Investment in and advances to affiliate 11,143 (36) 11,107
Prepaid expenses and other assets 3,303 (184) 3,119
Deferred expenses, net 6,661 - 6,661
-----------------------------------------
$699,275 $ (220) $699,055
=========================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt $85,755 $ - $85,755
Senior unsecured debt - - -
Tax-exempt debt 75,540 - 75,540
Line of credit 97,700 - 97,700
Convertible subordinated debentures
payable 11,740 - 11,740
Preferred dividends payable 901 - 901
Accounts payable 10,311 - 10,311
Accrued expenses 24,443 150 24,593
Rents received in advance and
security deposits 4,759 - 4,759
-----------------------------------------
311,149 150 311,299
-----------------------------------------
Stockholders' equity:
Perferred Stock, $.001 par value 3 - 3
Common stock, $.001 par value 17 - 17
Class B common stock, $.001 par value 2 - 2
Additional paid-in-capital 420,743 - 420,743
Retained earnings(deficit) (32,142) (370) (32,512)
Unearned compensation - restricted stoc (497) - (497)
-----------------------------------------
Total stockholders' equity 388,126 (370) 387,756
-----------------------------------------
$699,275 $ (220) $699,055
=========================================
</TABLE>
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE THREE MONTHS ENDED
MARCH 31, 1997 (UNAUDITED) JUNE 30, 1997 (UNAUDITED)
------------------------------------- ------------------------------------
REPORTED ADJUSTMENT RESTATED REPORTED ADJUSTMENT RESTATED
-------- ---------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ 12,771 $ - $ 12,771 $ 13,540 $ 66 $ 13,606
Straight-line rents 654 - 654 633 - 633
Expense reimbursements 4,895 - 4,895 4,480 - 4,480
Mortgage interest income 655 60 715 524 1 525
------------------------------------- ------------------------------------
Total operating and investment revenue 18,975 60 19,035 19,177 67 19,244
------------------------------------- ------------------------------------
Other revenue:
Fee income 802 - 802 813 (250) 563
Equity in net income of affiliate (48) - (48) 140 (36) 104
------------------------------------- ------------------------------------
Total other revenue 754 - 754 953 (286) 667
------------------------------------- ------------------------------------
Total revenue 19,729 60 19,789 20,130 (219) 19,911
------------------------------------- ------------------------------------
Expenses:
Real estate taxes 4,270 - 4,270 4,097 - 4,097
Property operating and leasing 3,023 - 3,023 2,424 - 2,424
General and administrative 703 - 703 739 - 739
Depreciation and amortization 3,210 - 3,210 3,379 - 3,379
Interest expense:
Interest incurred, net 2,626 - 2,626 2,246 - 2,246
Amortization of deferred financing costs 192 - 192 203 - 203
------------------------------------- ------------------------------------
Total expenses 14,024 - 14,024 13,088 - 13,088
------------------------------------- ------------------------------------
Operating income 5,705 60 5,765 7,042 (219) 6,823
Other income (expense)
Gain or (loss) on sale of real estate - - - - - -
Other income (34) - (34) 101 - 101
------------------------------------- ------------------------------------
Income before extraordinary item 5,671 60 5,731 7,143 (219) 6,924
Extraordinary item, early extinguishment of debt - - - - - -
------------------------------------- ------------------------------------
Net income 5,671 60 5,731 7,143 (219) 6,924
Preferred Dividends - - - - - -
------------------------------------- ------------------------------------
Net income available to common shareholders $ 5,671 $ 60 $ 5,731 $ 7,143 $ (219) $ 6,924
===================================== ====================================
Net income available to common shareholders per share
Basic $ 0.33 $ 0.00 $ 0.33 $ 0.38 $ (0.01) $ 0.36
Diluted $ 0.32 $ 0.00 $ 0.33 $ 0.37 $ (0.01) $ 0.36
Funds from operations
Add back:
Depreciation and amortization 3,210 - 3,210 3,379 - 3,379
Amortization of deferred financing - - - - - -
costs on debentures 13 - 13 12 - 12
Convertible subordinated debenture interest 266 - 266 248 - 248
------------------------------------- ------------------------------------
Funds from operations $ 9,160 $ 60 $ 9,220 $ 10,782 $ (219) $ 10,563
------------------------------------- ------------------------------------
Funds from operations per share $ 0.51 $ 0.00 $ 0.51 $ 0.55 $ (0.01) $ 0.54
===================================== ====================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1997 (UNAUDITED) DECEMBER 31, 1997 (UNAUDITED)
----------------------------------- -----------------------------------
REPORTED ADJUSTMENT RESTATED REPORTED ADJUSTMENT RESTATED
-------- ---------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ 14,544 $ 137 $ 14,681 $ 16,663 $ 156 $ 16,819
Straight-line rents 566 - 566 878 - 878
Expense reimbursements 4,283 - 4,283 4,570 - 4,570
Mortgage interest income 447 (50) 397 520 (59) 461
------------------------------------ ------------------------------------
Total operating and investment revenue 19,840 87 19,927 22,631 97 22,728
------------------------------------ ------------------------------------
Other revenue:
Fee income 455 (395) 60 1,090 - 1,090
Equity in net income of affiliate 1,264 - 1,264 818 - 818
------------------------------------ ------------------------------------
Total other revenue 1,719 (395) 1,324 1,908 - 1,908
------------------------------------ ------------------------------------
Total revenue 21,559 (308) 21,251 24,539 97 24,636
------------------------------------ ------------------------------------
Expenses:
Real estate taxes 4,187 - 4,187 4,537 - 4,537
Property operating and leasing 2,847 - 2,847 3,798 - 3,798
General and administrative 783 - 783 880 - 880
Depreciation and amortization 4,179 - 4,179 4,511 - 4,511
Interest expense:
Interest incurred, net 2,687 - 2,687 2,512 - 2,512
Amortization of deferred financing costs 193 - 193 211 - 211
------------------------------------ ------------------------------------
Total expenses 14,876 - 14,876 16,449 - 16,449
------------------------------------ ------------------------------------
Operating income 6,683 (308) 6,375 8,090 97 8,187
Other income (expense)
Gain or (loss) on sale of real estate - - - - - -
Other income 59 - 59 (17) - (17)
------------------------------------ ------------------------------------
Income before extraordinary item 6,742 (308) 6,434 8,073 97 8,170
Extraordinary item, early extinguishment of debt - - - - - -
------------------------------------ ------------------------------------
Net income 6,742 (308) 6,434 8,073 97 8,170
Preferred Dividends - - - (901) - (901)
------------------------------------ ------------------------------------
Net income available to common shareholders $ 6,742 $ (308) $ 6,434 $ 7,172 $ 97 $ 7,269
==================================== ====================================
Net income available to common shareholders per share
Basic $ 0.35 $ (0.02) $ 0.34 $ 0.38 $ 0.01 $ 0.38
Diluted $ 0.35 $ (0.02) $ 0.33 $ 0.37 $ 0.01 $ 0.38
Funds from operations
Add back:
Depreciation and amortization 4,179 - 4,179 4,511 - 4,511
Amortization of deferred financing - - - - - -
costs on debentures 12 - 12 12 - 12
Convertible subordinated debenture interest 243 - 243 242 - 242
------------------------------------ ------------------------------------
Funds from operations $ 11,176 $ (308) $ 10,868 $ 11,937 $ 97 $ 12,034
------------------------------------ ------------------------------------
Funds from operations per share $ 0.57 $ (0.02) $ 0.55 $ 0.60 $ 0.00 $ 0.61
==================================== ====================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1997
------------------------------------
REPORTED ADJUSTMENT RESTATED
-------- ---------- --------
<S> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ 57,519 $ 359 $ 57,878
Straight-line rents 2,732 - 2,732
Expense reimbursements 18,228 - 18,228
Mortgage interest income 2,146 (48) 2,098
-------------------------------------
Total operating and investment revenue 80,625 311 80,936
-------------------------------------
Other revenue:
Fee income 3,159 (645) 2,514
Equity in net income of affiliate 2,174 (36) 2,138
-------------------------------------
Total other revenue 5,333 (681) 4,652
-------------------------------------
Total revenue 85,958 (370) 85,588
-------------------------------------
Expenses:
Real estate taxes 17,091 - 17,091
Property operating and leasing 12,091 - 12,091
General and administrative 3,105 - 3,105
Depreciation and amortization 15,278 - 15,278
Interest expense:
Interest incurred, net 10,071 - 10,071
Amortization of deferred financing costs 800 - 800
-------------------------------------
Total expenses 58,436 - 58,436
-------------------------------------
Operating income 27,522 (370) 27,152
Other income (expense)
Gain or (loss) on sale of real estate - - -
Other income 108 - 108
-------------------------------------
Income before extraordinary item 27,630 (370) 27,260
Extraordinary item, early extinguishment of debt - - -
-------------------------------------
Net income 27,630 (370) 27,260
Preferred Dividends (901) - (901)
-------------------------------------
Net income available to common shareholders $ 26,729 $ (370) $26,359
=====================================
Net income available to common shareholders per share
Basic $ 1.43 $ (0.02) $ 1.41
Diluted $ 1.41 $ (0.02) $ 1.39
Funds from operations
Add back:
Depreciation and amortization 15,278 - 15,278
Amortization of deferred financing - - -
costs on debentures 48 - 48
Convertible subordinated debenture interest 999 - 999
-------------------------------------
Funds from operations $ 43,054 $ (370) $42,684
-------------------------------------
Funds from operations per share $ 2.23 $ (0.02) $ 2.21
=====================================
</TABLE>
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
MARCH 31, 1998 JUNE 30, 1998
(UNAUDITED) (UNAUDITED)
--------------------------------- ---------------------------------
REPORTED ADJUSTMENT RESTATED REPORTED ADJUSTMENT RESTATED
-------- ---------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Assets:
Investment in real estate:
Land $120,764 $ 278 $121,042 $126,280 $ 4,007 $130,287
Buildings 412,495 1,113 413,608 435,096 16,029 451,125
Building improvements 66,507 - 66,507 70,542 - 70,542
Furniture, fixtures, and equipment 14,854 - 14,854 16,561 - 16,561
Construction in progress 18,849 17,720 36,569 20,453 - 20,453
---------------------------------- ---------------------------------
633,469 19,111 652,580 668,932 20,036 688,968
Less accumulated depreciation and amortization 46,837 - 46,837 51,704 - 51,704
---------------------------------- ---------------------------------
Net investment in real estate 586,632 19,111 605,743 617,228 20,036 637,264
Cash and cash equivalents 637 - 637 2,039 - 2,039
Restricted cash and cash equivalents 57,765 - 57,765 33,828 - 33,828
Tenant accounts receivable, net 15,027 - 15,027 17,492 - 17,492
Mortgage notes receivable 27,887 (17,720) 10,167 28,802 (18,634) 10,168
Investment in and advances to affiliate 11,513 (266) 11,247 17,885 (1,314) 16,571
Prepaid expenses and other assets 4,789 (635) 4,154 7,883 (989) 6,894
Deferred expenses, net 6,878 - 6,878 8,000 - 8,000
---------------------------------- ---------------------------------
$711,128 $ 490 $711,618 $733,157 $ (901) $732,256
================================== =================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt $85,755 $ - $85,755 $185,755 $ - $185,755
Senior unsecured debt - - - - - -
Tax-exempt debt 75,540 - 75,540 75,540 - 75,540
Line of credit 103,500 - 103,500 12,500 - 12,500
Convertible subordinated debentures payable 11,163 - 11,163 9,613 - 9,613
Preferred dividends payable 1,060 - 1,060 1,060 - 1,060
Accounts payable 5,501 - 5,501 3,714 - 3,714
Accrued expenses 23,407 - 23,407 28,219 - 28,219
Rents received in advance and security deposits 5,904 - 5,904 4,535 - 4,535
---------------------------------- ---------------------------------
311,830 - 311,830 320,936 - 320,936
---------------------------------- ---------------------------------
Stockholders' equity:
Perferred Stock, $.001 par value 3 - 3 3 - 3
Common stock, $.001 par value 17 - 17 18 - 18
Class B common stock, $.001 par value 2 - 2 2 - 2
Additional paid-in-capital 433,171 - 433,171 447,352 - 447,352
Retained earnings(deficit) (33,447) 490 (32,957) (34,761) (901) (35,662)
Unearned compensation - restricted stock (448) - (448) (393) - (393)
---------------------------------- ---------------------------------
Total stockholders' equity 399,298 490 399,788 412,221 (901) 411,320
---------------------------------- ---------------------------------
$711,128 $ 490 $711,618 $733,157 $ (901) $732,256
================================== =================================
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
(UNAUDITED) DECEMBER 31, 1998
--------------------------------- ---------------------------------
REPORTED ADJUSTMENT RESTATED REPORTED ADJUSTMENT RESTATED
-------- ---------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Assets:
Investment in real estate:
Land $138,298 $ 4,028 $142,326 $128,045 $ 4,225 $132,270
Buildings 488,704 16,111 504,815 487,996 16,899 504,895
Building improvements 80,082 - 80,082 94,474 - 94,474
Furniture, fixtures, and equipment 17,564 - 17,564 18,817 - 18,817
Construction in progress 13,472 - 13,472 18,401 - 18,401
--------------------------------- ---------------------------------
738,120 20,139 758,259 747,733 21,124 768,857
Less accumulated depreciation and amortization 56,728 - 56,728 62,257 - 62,257
--------------------------------- ---------------------------------
Net investment in real estate 681,392 20,139 701,531 685,476 21,124 706,600
Cash and cash equivalents 4,696 - 4,696 475 - 475
Restricted cash and cash equivalents 31,545 - 31,545 33,056 - 33,056
Tenant accounts receivable, net 19,062 - 19,062 18,067 - 18,067
Mortgage notes receivable 19,655 (18,737) 918 20,353 (19,452) 901
Investment in and advances to affiliate 21,534 (2,702) 18,832 48,564 (4,768) 43,796
Prepaid expenses and other assets 6,025 (1,063) 4,962 5,264 (1,234) 4,030
Deferred expenses, net 8,607 - 8,607 10,681 - 10,681
--------------------------------- ---------------------------------
$792,516 $ (2,363) $790,153 $821,936 $ (4,330) $817,606
================================= =================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt $106,225 $ - $106,225 $103,520 $ - 103,520
Senior unsecured debt 100,000 - 100,000 100,000 - 100,000
Tax-exempt debt 75,540 - 75,540 75,540 - 75,540
Line of credit 44,000 - 44,000 77,600 - 77,600
Convertible subordinated debentures payable 8,583 - 8,583 8,058 - 8,058
Preferred dividends payable 1,060 - 1,060 1,060 - 1,060
Accounts payable 4,633 - 4,633 7,986 - 7,986
Accrued expenses 34,420 - 34,420 30,810 250 31,060
Rents received in advance and security deposits 5,372 - 5,372 5,323 - 5,323
--------------------------------- ---------------------------------
379,833 - 379,833 409,897 250 410,147
--------------------------------- ---------------------------------
Stockholders' equity:
Perferred Stock, $.001 par value 3 - 3 3 - 3
Common stock, $.001 par value 18 - 18 19 - 19
Class B common stock, $.001 par value 2 - 2 1 - 1
Additional paid-in-capital 448,606 - 448,606 449,229 - 449,229
Retained earnings(deficit) (35,602) (2,363) (37,965) (36,917) (4,580) (41,497)
Unearned compensation - restricted stock (344) - (344) (296) - (296)
--------------------------------- ---------------------------------
Total stockholders' equity 412,683 (2,363) 410,320 412,039 (4,580) 407,459
--------------------------------- ---------------------------------
$792,516 $ (2,363) $790,153 $821,936 $ (4,330) $817,606
================================= =================================
</TABLE>
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE THREE MONTHS ENDED
MARCH 31, 1998 (UNAUDITED) JUNE 30, 1998 (UNAUDITED)
-------------------------------- ---------------------------------
REPORTED ADJUSTMENT RESTATED REPORTED ADJUSTMENT RESTATED
-------- ---------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ 17,747 $ 56 $ 17,803 $ 18,050 $ 530 $ 18,580
Straight-line rents 1,364 - 1,364 1,157 - 1,157
Expense reimbursements 5,458 - 5,458 6,115 - 6,115
Mortgage interest income 656 (101) 555 679 (434) 245
-------------------------------- ---------------------------------
Total operating and investment revenue 25,225 (45) 25,180 26,001 96 26,097
-------------------------------- ---------------------------------
Other revenue:
Fee income 1,967 (256) 1,711 1,707 (1,110) 597
Equity in net income of affiliate 125 (230) (105) 275 (388) (113)
-------------------------------- ---------------------------------
Total other revenue 2,092 (486) 1,606 1,982 (1,498) 484
-------------------------------- ---------------------------------
Total revenue 27,317 (531) 26,786 27,983 (1,402) 26,581
-------------------------------- ---------------------------------
Expenses:
Real estate taxes 5,948 - 5,948 6,001 - 6,001
Property operating and leasing 3,542 - 3,542 3,210 - 3,210
General and administrative 990 - 990 1,001 - 1,001
Depreciation and amortization 4,696 - 4,696 5,186 - 5,186
Interest expense:
Interest incurred, net 2,928 - 2,928 3,056 - 3,056
Amortization of deferred financing costs 486 - 486 439 - 439
-------------------------------- ---------------------------------
Total expenses 18,590 - 18,590 18,893 - 18,893
-------------------------------- ---------------------------------
Operating income 8,727 (531) 8,196 9,090 (1,402) 7,688
Other income (expense)
Gain or (loss) on sale of real estate - 1,391 1,391 - 11 11
Other income (16) - (16) (21) - (21)
-------------------------------- ---------------------------------
Income before extraordinary item 8,711 860 9,571 9,069 (1,391) 7,678
Extraordinary item, early extinguishment of debt - - - - - -
-------------------------------- ---------------------------------
Net income 8,711 860 9,571 9,069 (1,391) 7,678
Preferred Dividends (1,590) - (1,590) (1,590) - (1,590)
-------------------------------- ---------------------------------
Net income available to common shareholders $ 7,121 $ 860 $ 7,981 $ 7,479 $ (1,391) $ 6,088
================================ =================================
Net income available to common shareholders per share
Basic $ 0.37 $ 0.04 $ 0.42 $ 0.37 $ (0.07) $ 0.30
Diluted $ 0.37 $ 0.04 $ 0.41 $ 0.37 $ (0.07) $ 0.30
FUNDS FROM OPERATIONS
Add back:
Depreciation and amortization 4,696 - 4,696 5,186 - 5,186
Amortization of deferred financing
costs on debentures 11 - 11 10 - 10
Convertible subordinated debenture interest 233 - 233 205 - 205
Depreciation on sold properties - (1,064) (1,064) - - -
-------------------------------- ---------------------------------
Funds from operations $ 12,061 $ (204) $ 11,857 $ 12,880 $ (1,391) $ 11,489
-------------------------------- ---------------------------------
Funds from operations per share $ 0.61 $ (0.01) $ 0.60 $ 0.63 $ (0.07) $ 0.56
================================ =================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1998 (UNAUDITED) DECEMBER 31, 1998 (UNAUDITED)
-------------------------------- --------------------------------
REPORTED ADJUSTMENT RESTATED REPORTED ADJUSTMENT RESTATED
-------- ---------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ 19,479 $ 530 $ 20,009 $20,487 $ 530 $ 21,017
Straight-line rents 742 - 742 767 - 767
Expense reimbursements 5,737 - 5,737 4,614 - 4,614
Mortgage interest income 600 (466) 134 637 (511) 126
-------------------------------- --------------------------------
Total operating and investment revenue 26,558 64 26,622 26,505 19 26,524
-------------------------------- --------------------------------
Other revenue:
Fee income 1,962 (1,118) 844 2,946 (2,440) 506
Equity in net income of affiliate 46 (408) (362) (210) (66) (276)
-------------------------------- --------------------------------
Total other revenue 2,008 (1,526) 482 2,736 (2,506) 230
-------------------------------- --------------------------------
Total revenue 28,566 (1,462) 27,104 29,241 (2,487) 26,754
-------------------------------- --------------------------------
Expenses:
Real estate taxes 5,786 - 5,786 4,484 - 4,484
Property operating and leasing 2,674 - 2,674 4,056 - 4,056
General and administrative 969 - 969 1,080 - 1,080
Depreciation and amortization 5,392 - 5,392 6,145 - 6,145
Interest expense:
Interest incurred, net 3,759 - 3,759 3,917 - 3,917
Amortization of deferred financing costs 409 - 409 482 - 482
-------------------------------- --------------------------------
Total expenses 18,989 - 18,989 20,164 - 20,164
-------------------------------- --------------------------------
Operating income 9,577 (1,462) 8,115 9,077 (2,487) 6,590
Other income (expense)
Gain or (loss) on sale of real estate - - - - 270 270
Other income (7) - (7) 30 - 30
-------------------------------- --------------------------------
Income before extraordinary item 9,570 (1,462) 8,108 9,107 (2,217) 6,890
Extraordinary item, early extinguishment of debt - - - - - -
-------------------------------- --------------------------------
Net income 9,570 (1,462) 8,108 9,107 (2,217) 6,890
Preferred Dividends (1,590) - (1,590) (1,590) - (1,590)
-------------------------------- --------------------------------
Net income available to common shareholders $ 7,980 $ (1,462) $ 6,518 $ 7,517 $ (2,217) $ 5,300
================================ ================================
Net income available to common shareholders per share
Basic $ 0.40 $ (0.07) $ 0.32 $ 0.37 $ (0.11) $ 0.26
Diluted $ 0.39 $ (0.07) $ 0.32 $ 0.37 $ (0.11) $ 0.26
FUNDS FROM OPERATIONS
Add back:
Depreciation and amortization 5,392 - 5,392 6,145 - 6,145
Amortization of deferred financing
costs on debentures 9 - 9 8 - 8
Convertible subordinated debenture interest 180 - 180 166 - 166
Depreciation on sold properties - (286) (286) - - -
-------------------------------- --------------------------------
Funds from operations $ 13,561 $ (1,748) $ 11,813 $13,836 $ (2,217) $ 11,619
-------------------------------- --------------------------------
Funds from operations per share $ 0.66 $ (0.08) $ 0.57 $ 0.67 $ (0.11) $ 0.56
================================ ================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1998
----------------------------------
REPORTED ADJUSTMENT RESTATED
-------- ---------- ---------
<S> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $75,763 $ 1,646 $ 77,409
Straight-line rents 4,030 - 4,030
Expense reimbursements 21,924 - 21,924
Mortgage interest income 2,573 (1,512) 1,061
----------------------------------
Total operating and investment revenue 104,290 134 104,424
----------------------------------
Other revenue:
Fee income 8,581 (4,924) 3,657
Equity in net income of affiliate 237 (1,092) (855)
----------------------------------
Total other revenue 8,818 (6,016) 2,802
----------------------------------
Total revenue 113,108 (5,882) 107,226
----------------------------------
Expenses:
Real estate taxes 22,218 - 22,218
Property operating and leasing 13,482 - 13,482
General and administrative 4,041 - 4,041
Depreciation and amortization 21,418 - 21,418
Interest expense:
Interest incurred, net 13,659 - 13,659
Amortization of deferred financing costs 1,817 - 1,817
----------------------------------
Total expenses 76,635 - 76,635
----------------------------------
Operating income 36,473 (5,882) 30,591
Other income (expense)
Gain or (loss) on sale of real estate - 1,672 1,672
Other income (15) - (15)
----------------------------------
Income before extraordinary item 36,458 (4,210) 32,248
Extraordinary item, early extinguishment of debt - - -
----------------------------------
Net income 36,458 (4,210) 32,248
Preferred Dividends (6,360) - (6,360)
----------------------------------
Net income available to common shareholders $30,098 $ (4,210) $25,888
==================================
Net income available to common shareholders per share
Basic $1.51 $ (0.21) $ 1.30
Diluted $1.50 $ (0.21) $ 1.29
FUNDS FROM OPERATIONS
Add back:
Depreciation and amortization 21,418 - 21,418
Amortization of deferred financing
costs on debentures 38 - 38
Convertible subordinated debenture interest 783 - 783
Depreciation on sold properties - (1,350) (1,350)
----------------------------------
Funds from operations 52,337 $ (5,560) 46,777
----------------------------------
Funds from operations per share $2.57 $ (0.27) $ 2.29
==================================
</TABLE>
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
MARCH 31, 1999
(UNAUDITED)
---------------------------------------------
REPORTED ADJUSTMENT RESTATED
-------- ---------- --------
<S> <C> <C> <C>
ASSETS
Assets:
Investment in real estate:
Land $131,996 $ 4,315 $136,311
Buildings 505,173 17,257 522,430
Building improvements 99,852 - 99,852
Furniture, fixtures, and equipment 18,855 - 18,855
Construction in progress 27,432 - 27,432
------------------------------------------
783,308 21,572 804,880
Less accumulated depreciation and amortization 67,821 - 67,821
------------------------------------------
Net investment in real estate 715,487 21,572 737,059
Cash and cash equivalents 45,577 - 45,577
Restricted cash and cash equivalents 29,324 - 29,324
Tenant accounts receivable, net 19,884 - 19,884
Mortgage notes receivable 20,348 (19,452) 896
Investment in and advances to affiliate 46,927 (3,454) 43,473
Prepaid expenses and other assets 6,902 (436) 6,466
Deferred expenses, net 12,434 - 12,434
------------------------------------------
$896,883 $ (1,770) $895,113
==========================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt $103,256 $ - $103,256
Senior unsecured debt 200,000 - 200,000
Tax-exempt debt 75,540 - 75,540
Line of credit 52,900 - 52,900
Convertible subordinated debentures payable 7,878 - 7,878
Preferred dividends payable 1,060 - 1,060
Accounts payable 6,705 - 6,705
Accrued expenses 32,694 - 32,694
Rents received in advance and security deposits 6,241 - 6,241
------------------------------------------
486,274 - 486,274
------------------------------------------
Stockholders' equity:
Perferred Stock, $.001 par value 3 - 3
Common stock, $.001 par value 20 - 20
Class B common stock, $.001 par value - - -
Additional paid-in-capital 449,612 - 449,612
Retained earnings(deficit) (38,742) (1,770) (40,512)
Unearned compensation - restricted stock (284) - (284)
------------------------------------------
Total stockholders' equity 410,609 (1,770) 408,839
------------------------------------------
$896,883 $ (1,770) $895,113
==========================================
</TABLE>
<TABLE>
<CAPTION>
JUNE 30,1999
(UNAUDITED)
---------------------------------------------
REPORTED ADJUSTMENT RESTATED
-------- ---------- --------
<S> <C> <C> <C>
ASSETS
Assets:
Investment in real estate:
Land $152,880 $ 425 $153,305
Buildings 585,638 1,695 587,333
Building improvements 107,353 - 107,353
Furniture, fixtures, and equipment 19,713 - 19,713
Construction in progress 22,282 - 22,282
------------------------------------------
887,866 2,120 889,986
Less accumulated depreciation and amortization 74,533 - 74,533
------------------------------------------
Net investment in real estate 813,333 2,120 815,453
Cash and cash equivalents 2,659 - 2,659
Restricted cash and cash equivalents 28,200 - 28,200
Tenant accounts receivable, net 21,733 - 21,733
Mortgage notes receivable 890 - 890
Investment in and advances to affiliate 90,364 (3,454) 86,910
Prepaid expenses and other assets 6,893 - 6,893
Deferred expenses, net 14,193 - 14,193
------------------------------------------
$978,265 $ (1,334) $976,931
==========================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt $92,899 $ - $92,899
Senior unsecured debt 200,000 - 200,000
Tax-exempt debt 55,000 - 55,000
Line of credit 111,600 - 111,600
Convertible subordinated debentures payable 7,551 - 7,551
Preferred dividends payable 1,132 - 1,132
Accounts payable 10,507 - 10,507
Accrued expenses 38,898 - 38,898
Rents received in advance and security deposits 5,572 - 5,572
------------------------------------------
523,159 - 523,159
------------------------------------------
Stockholders' equity:
Perferred Stock, $.001 par value 3 - 3
Common stock, $.001 par value 1 - 1
Class B common stock, $.001 par value 20 - 20
Additional paid-in-capital 498,371 - 498,371
Retained earnings(deficit) (43,017) (1,334) (44,351)
Unearned compensation - restricted stock (272) - (272)
------------------------------------------
Total stockholders' equity 455,106 (1,334) 453,772
------------------------------------------
$978,265 $ (1,334) $976,931
==========================================
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999
(UNAUDITED)
------------------
ADJUSTMENT
----------
<S> <C>
ASSETS
Assets:
Investment in real estate:
Land $ 425
Buildings 1,695
Building improvements -
Furniture, fixtures, and equipment -
Construction in progress -
--------------------------
2,120
Less accumulated depreciation and amortization -
--------------------------
Net investment in real estate 2,120
Cash and cash equivalents -
Restricted cash and cash equivalents -
Tenant accounts receivable, net -
Mortgage notes receivable -
Investment in and advances to affiliate -
Prepaid expenses and other assets -
Deferred expenses, net -
--------------------------
$ 2,120
==========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt $ -
Senior unsecured debt -
Tax-exempt debt -
Line of credit -
Convertible subordinated debentures payable -
Preferred dividends payable -
Accounts payable -
Accrued expenses -
Rents received in advance and security deposits -
--------------------------
-
--------------------------
Stockholders' equity:
Perferred Stock, $.001 par value -
Common stock, $.001 par value -
Class B common stock, $.001 par value -
Additional paid-in-capital -
Retained earnings(deficit) 2,120
Unearned compensation - restricted stock -
--------------------------
Total stockholders' equity 2,120
--------------------------
$ 2,120
==========================
</TABLE>
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 (UNAUDITED)
---------------------------------------
REPORTED ADJUSTMENT RESTATED
-------- ---------- --------
<S> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ 20,813 $ 530 $ 21,343
Straight-line rents 844 - 844
Expense reimbursements 6,568 - 6,568
Mortgage interest income 554 (510) 44
---------------------------------------
Total operating and investment revenue 28,779 20 28,799
---------------------------------------
Other revenue:
Fee income 2,701 1,688 4,389
Equity in net income of affiliate (246) 654 408
---------------------------------------
Total other revenue 2,455 2,342 4,797
---------------------------------------
Total revenue 31,234 2,362 33,596
---------------------------------------
Expenses:
Real estate taxes 6,565 - 6,565
Property operating and leasing 3,581 - 3,581
General and administrative 905 - 905
Depreciation and amortization 5,997 - 5,997
Interest expense:
Interest incurred, net 4,359 - 4,359
Amortization of deferred financing costs 458 - 458
---------------------------------------
Total expenses 21,865 - 21,865
---------------------------------------
Operating income 9,369 2,362 11,731
Other income (expense)
Gain or (loss) on sale of real estate - 448 448
Other income (20) - (20)
---------------------------------------
Income before extraordinary item 9,349 2,810 12,159
Extraordinary item, early extinguishment of debt - - -
---------------------------------------
Net income 9,349 2,810 12,159
Preferred Dividends (1,590) - (1,590)
---------------------------------------
Net income available to common shareholders $ 7,759 $ 2,810 $ 10,569
=======================================
Net income available to common shareholders per share
before extraordinary item
Basic $ 0.49 $ 0.15 $ 0.63
Diluted $ 0.48 $ 0.14 $ 0.62
Net income available to common shareholders per share
Basic $ 0.40 $ 0.15 $ 0.55
Diluted $ 0.40 $ 0.14 $ 0.54
FUNDS FROM OPERATIONS
Add back:
Depreciation and amortization 5,997 - 5,997
Amortization of deferred financing
costs on debentures 8 - 8
Convertible subordinated debenture interest 161 - 161
Depreciation from unconsolidated
subsidiary, net of tax - - -
Extraordinary item, early extinquishment of debt - - -
Convertible preferred dividend - - -
Depreciation on sold properties - (99) (99)
---------------------------------------
Funds from operations $ 13,925 $ 2,711 $ 16,636
---------------------------------------
Funds from operations per share $ 0.68 $ 0.13 $ 0.81
=======================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
JUNE 30, 1999 (UNAUDITED)
----------------------------------------
REPORTED ADJUSTMENT RESTATED
-------- ---------- --------
<S> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ 21,598 $ - $ 21,598
Straight-line rents 1,420 - 1,420
Expense reimbursements 6,229 - 6,229
Mortgage interest income 364 - 364
----------------------------------------
Total operating and investment revenue 29,611 - 29,611
----------------------------------------
Other revenue:
Fee income 1,542 436 1,978
Equity in net income of affiliate 465 - 465
----------------------------------------
Total other revenue 2,007 436 2,443
----------------------------------------
Total revenue 31,618 436 32,054
----------------------------------------
Expenses:
Real estate taxes 7,127 - 7,127
Property operating and leasing 3,282 - 3,282
General and administrative 940 - 940
Depreciation and amortization 7,223 - 7,223
Interest expense:
Interest incurred, net 5,018 - 5,018
Amortization of deferred financing costs 505 - 505
----------------------------------------
Total expenses 24,095 - 24,095
----------------------------------------
Operating income 7,523 436 7,959
Other income (expense)
Gain or (loss) on sale of real estate - - -
Other income (7) - (7)
----------------------------------------
Income before extraordinary item 7,516 436 7,952
Extraordinary item, early extinguishment of debt (582) - (582)
----------------------------------------
Net income 6,934 436 7,370
Preferred Dividends (1,662) - (1,662)
----------------------------------------
Net income available to common shareholders $ 5,272 $ 436 $ 5,708
========================================
Net income available to common shareholders per share
before extraordinary item
Basic $ 0.38 $ 0.02 $ 0.40
Diluted $ 0.37 $ 0.02 $ 0.39
Net income available to common shareholders per share
Basic $ 0.26 $ 0.02 $ 0.29
Diluted $ 0.26 $ 0.02 $ 0.28
FUNDS FROM OPERATIONS
Add back:
Depreciation and amortization 7,223 - 7,223
Amortization of deferred financing
costs on debentures 6 - 6
Convertible subordinated debenture interest 184 - 184
Depreciation from unconsolidated
subsidiary, net of tax 135 - 135
Extraordinary item, early extinquishment of debt 582 - 582
Convertible preferred dividend 72 - 72
Depreciation on sold properties - - -
----------------------------------------
Funds from operations $ 13,474 $ 436 $ 13,910
----------------------------------------
Funds from operations per share $ 0.65 $ 0.02 $ 0.67
========================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1999 (UNAUDITED)
----------------------------
ADJUSTMENT
----------
<S> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ -
Straight-line rents -
Expense reimbursements -
Mortgage interest income -
----------------------------
Total operating and investment revenue -
----------------------------
Other revenue:
Fee income 2,980
Equity in net income of affiliate 474
----------------------------
Total other revenue 3,454
----------------------------
Total revenue 3,454
----------------------------
Expenses:
Real estate taxes -
Property operating and leasing -
General and administrative -
Depreciation and amortization
Interest expense:
Interest incurred, net -
Amortization of deferred financing costs -
----------------------------
Total expenses -
----------------------------
Operating income 3,454
Other income (expense)
Gain or (loss) on sale of real estate -
Other income -
----------------------------
Income before extraordinary item 3,454
Extraordinary item, early extinguishment of debt -
----------------------------
Net income 3,454
Preferred Dividends -
----------------------------
Net income available to common shareholders $ 3,454
============================
Net income available to common shareholders per share
before extraordinary item
Basic
Diluted
Net income available to common shareholders per share
Basic
Diluted
FUNDS FROM OPERATIONS
Add back:
Depreciation and amortization -
Amortization of deferred financing
costs on debentures -
Convertible subordinated debenture interest -
Depreciation from unconsolidated
subsidiary, net of tax -
Extraordinary item, early extinquishment of debt -
Convertible preferred dividend -
Depreciation on sold properties -
----------------------------
Funds from operations $ 3,454
----------------------------
Funds from operations per share $ 0.17
============================
</TABLE>
