\<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 March 31, 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
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
(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 May 13, 1998:
17,766,427
<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 MARCH 31, 1998 AND
DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
----------- ------------
<S> <C> <C>
Assets:
Investment in real estate:
Land and leasehold $ 121,042 $ 124,011
Buildings 413,608 418,303
Building improvements 66,507 64,372
Furniture, fixtures, and equipment 14,854 13,912
Construction in progress 36,569 41,677
----------- ------------
652,580 662,275
Less accumulated depreciation and amortization 46,837 44,352
----------- ------------
Net investment in real estate 605,743 617,923
Cash and cash equivalents 637 1,652
Restricted cash and cash equivalents 57,765 36,509
Tenant accounts receivable, net 15,027 12,416
Mortgage notes receivable 10,167 9,668
Investment in and advances to affiliate 11,247 11,107
Prepaid expenses and other assets 4,154 3,119
Deferred expenses, net 6,878 6,661
----------- ------------
$ 711,618 $ 699,055
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $85,755 $85,755
Tax-exempt debt 75,540 75,540
Line of credit 103,500 97,700
Convertible subordinated debentures payable 11,163 11,740
Preferred dividends payable 1,060 901
Accounts payable 5,501 10,311
Accrued expenses 23,407 24,593
Rents received in advance and security deposits 5,904 4,759
----------- ------------
311,830 311,299
----------- ------------
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; 17,293,936 and 16,891,951
issued and outstanding, respectively 17 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 433,171 420,743
Retained earnings (deficit) (32,957) (32,512)
Unearned compensation - restricted stock (448) (497)
----------- ------------
Total shareholders' equity 399,788 387,756
----------- ------------
$711,618 $699,055
=========== ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AS REVISED FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND
1997 (IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-----------------------------
1998 1997
----------- ----------
<S> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $17,803 $12,771
Straight-line rents 1,364 654
Expense reimbursements 5,458 4,895
Mortgage interest income 555 715
----------- ----------
Total operating and investment revenue 25,180 19,035
----------- ----------
Other revenue:
Real estate fee income 1,711 802
Equity in net income (loss) of affiliate (105) (48)
----------- ----------
Total other revenue 1,606 754
----------- ----------
Total revenue 26,786 19,789
----------- ----------
Expenses:
Real estate taxes 5,948 4,270
Property operating and leasing 3,542 3,023
General and administrative 990 703
Depreciation and amortization 4,696 3,210
Interest expense:
Interest incurred, net 2,928 2,626
Amortization of deferred financing costs 486 192
----------- ----------
Total expenses 18,590 14,024
----------- ----------
Operating income 8,196 5,765
Other income (expense):
Gains on sales of real estate 1,391
Other income (expense) (16) (34)
----------- ----------
Net Income 9,571 5,731
Preferred dividends (1,590)
----------- ----------
Net income available to common shareholders $7,981 $ 5,731
=========== ==========
Per share net income available to common shareholders:
Basic $0.42 $0.33
Diluted $0.41 $0.33
Distributions per common share $0.438 $0.420
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
AS REVISED FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1998 1997
----------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 9,571 $ 5,731
Adjustments to reconcile net income to net cash provided
by operating activities:
Bad debts 100
Depreciation 4,427 2,991
Amortization of deferred financing costs 486 192
Other amortization 269 219
Straight-line rents (1,364) (654)
Incentive stock awards 48 49
Interest on converted debentures 2 9
Equity in net loss of affiliate 105 48
Gain on disposal of real estate (1,391)
Net changes in:
Tenant accounts receivable (1,738) (1,600)
Prepaid expenses and other assets 98 (56)
Rents received in advance and security deposits 1,294 310
Accounts payable and accrued expenses 1,259 (2,604)
----------- ----------
Net cash provided by operating activities 13,166 4,635
----------- ----------
Cash flows from investing activities:
Change in restricted cash and cash equivalents (21,256) 581
Acquisition of real estate (6,706) (6,240)
Construction in progress (9,296) (7,220)
Improvements and additions to properties (9,747) (3,616)
Disposition of real estate 29,104
Change in deposits on acquisitions (1,176) 142
Issuance of mortgage notes receivable (16,760)
Repayment of mortgage notes receivable 15,125 4,750
Investment in and advances to affiliate (245) (6,038)
Receivables from affiliates and employees 77 80
Additions to deferred expenses (1,075) (581)
----------- ----------
Net cash used in investing activities (21,955) (18,142)
----------- ----------
Cash flows from financing activities:
Proceeds from sale of common shares 11,875 71,039
Offering costs paid (12) (3,766)
Proceeds from line of credit 35,900 19,600
Repayment of mortgage notes payable (2,533)
Repayment of line of credit (30,100) (58,200)
Repayment of notes payable (33) (67)
Distributions (9,856) (7,050)
Conversion of convertible subordinated debentures payable (1)
------------ ----------
Net cash provided by financing activities 7,774 19,022
------------ ----------
Net change in cash and cash equivalents (1,015) 5,515
Cash and cash equivalents, beginning of the year 1,652 1,070
------------ ----------
Cash and cash equivalents, end of period $ 637 $ 6,585
============ ==========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<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 11.
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 Brother
Holdings Inc.
The Company declared a second quarter dividend of $0.4375 per common share of
beneficial interest to be paid May 13, 1998 to shareholders of record on
April 30, 1998. The Company also declared a second quarter dividend of $0.53
per share of Series A Cumulative Redeemable Preferred Shares of Beneficial
Interest to be paid April 30, 1998 to shareholders of record on April 15,
1998.
<PAGE>
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 statements.
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 Company estimates the adoption of this
EITF will not have a significant impact on the results of operations in the
future.
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
<PAGE>
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.
At March 31, 1998, the balance of the proceeds from the qualified tax-free
exchange transactions described above was held as restricted cash.
4. MORTGAGE NOTES RECEIVABLE
In March, 1998, the Company received proceeds from the repayment of one
outstanding mortgage totaling $15.1 million.
5. INVESTMENT IN AND ADVANCES TO AFFILIATE
The Company holds approximately 99% of the economic interest in
CenterPoint Realty Services Corporation ("CRS"). To maintain compliance with
limitations on income from business activities received by REITs and their
qualified REIT subsidiaries, the Company holds its interest in CRS in the
form of non-voting equity ownership, which qualifies CRS as an unconsolidated
taxable subsidiary.
As of March 31, 1998, the Company had advanced to CRS approximately
$8.1 million under a demand loan with an interest rate of 8.125%. 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.
6. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS (IN THOUSANDS)
Supplemental disclosures of cash flow information for three months ended
March 31, 1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
------------- ------------
<S> <C> <C>
Interest paid $ 3,761 $ 3,266
Interest capitalized 594 96
</TABLE>
In conjunction with the acquisition of real estate, for the three months
ended March 31, 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 $ 6,909 $ 6,350
Liabilities, net of other assets (203) (110)
------------- ------------
Acquisition of real estate $ 6,706 $ 6,240
============= ============
</TABLE>
<PAGE>
In conjunction with the disposition of real estate, the Company disposed of the
following asset and liability amounts:
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Disposal of real estate $ 29,575 $ -
Liabilities, net of other assets (471)
------------ ------------
Disposition of real estate $ 29,104 $ -
============ ============
Conversion of convertible subordinated debentures payable:
1998 1997
------------ ------------
Convertible subordinated debentures converted $ 577 $ 2,245
Common shares issued at $18.25 per share;
31,614 and 122,998, respectively 577 2,244
------------ ------------
Cash disbursed for fractional shares $ - $ 1
============ ============
</TABLE>
7. 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 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.
At March 31, 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.
8. SUBSEQUENT EVENTS
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 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.
<PAGE>
Since March 31, 1998, two warehouses/industrial properties have been
purchased. A facility located in Chicago, Illinois was purchased from a
partnership on April 20, 1998. The purchase price of approximately $5.8
million was funded with the Company's working capital and proceeds from the
tax-free exchange account. On April 20, 1998, a fully leased building,
located in Des Plaines, Illinois was purchased from Juno Manufacturing, Inc.
for approximately $5.6 million. The acquisition was funded from proceeds from
the tax-free exchange account.
84,930 convertible subordinated debentures have been converted since March
31, 1998.
9. 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 March 31, 1998 and 1997.
<TABLE>
<CAPTION>
1998 1997
---- ----
(in thousands, except for share data)
<S> <C> <C>
Numerators:
Net income $ 9,571 $ 5,731
Dividends on preferred shares (1,590) -
-------- -------
Net income available to common shareholders - for
basic and diluted EPS $ 7,981 $ 5,731
======= =======
Denominators:
Weighted average common shares outstanding - for
basic EPS 19,215,431 17,364,564
Effect of dilutive securities - options 243,223 259,288
---------- ----------
Weighted average common shares outstanding - for
diluted EPS 19,458,654 17,623,852
========== ==========
</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 March 31, 1998 and 1997 would be anti
dilutive.
10. PRO FORMA FINANCIAL INFORMATION
Due to the effect of the March, 1997 public offering, November, 1997
public offering, the March, 1998 public offering, 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 three months ended March 31, 1998 and 1997 is
presented as if the 1997 acquisitions and dispositions, the 1998 acquisitions
and dispositions, the March, 1997 public offering, November 1997 public
offering, the March, 1998 private placement and the corresponding repayment
of
<PAGE>
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>
THREE MONTHS ENDED MARCH 31,
----------------------------
1998 1997
---- ----
(in thousands, except for per share data)
<S> <C> <C>
Total revenues $ 26,110 $ 21,370
Total expenses 16,706 13,749
--------- ---------
Income before extraordinary item 9,404 7,621
Preferred dividends (1,590) (1,590)
--------- ---------
Income available to common shareholders
Before extraordinary item $ 7,814 $ 6,031
========= =========
Per share income available to common
Shareholders before extraordinary item:
Basic $ 0.40 $ 0.31
Diluted $ 0.39 $ 0.30
</TABLE>
11. 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.
<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 three months ended
March 31,
---------
1998 1997
---- ----
Previously As Previously As
Reported Revised Reported Revised
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Condensed Balance Sheets:
Investment in real estate, net $586,632 $605,743 $411,308 $415,865
Mortgage notes receivable 27,887 10,167 19,809 15,252
Other assets 96,609 95,708 42,751 42,811
-------- -------- -------- --------
Total assets $711,128 $711,618 $473,868 $473,928
======== ======== ======== ========
Long term debt $275,958 $275,958 $131,552 131,552
Other liabilities 35,872 35,872 26,082 26,082
Shareholders' equity 399,298 399,788 316,234 316,294
-------- -------- -------- --------
Total liabilities and
shareholders' equity $711,128 $711,618 $473,868 $473,928
======== ======== ======== ========
Condensed Statements of Operations:
Operating and investment revenue $ 25,225 $ 25,180 $ 18,975 $ 19,035
Other revenue 2,092 1,606 754 754
-------- -------- -------- --------
Total revenue 27,317 26,786 19,729 19,789
Operating expenses (18,590) (18,590) (14,024) (14,024)
Other income (expense) (16) 1,375 (34) (34)
-------- -------- -------- --------
Net income $ 8,711 $ 9,571 $ 5,671 $ 5,731
======== ======== ======== ========
Net income available to common shareholders per share:
Net income per share- basic $ .37 $ .42 $ .33 $ .33
Net income per share- diluted $ .37 $ .41 $ .32 $ .33
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION.
GENERAL BACKGROUND
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 MARCH 31, 1998 TO THREE MONTHS ENDED
MARCH 31, 1997.
Total revenues increased by $7.0 million or 35.4% over the same period last
year. The revenues of the Company are derived primarily from base rents and
additional rents from expense reimbursements, pursuant to the terms of tenant
leases for occupied space at the warehouse/industrial properties.
Warehouse/industrial properties represented approximately 98% of the gross
leasable area of the Company's portfolio as of March 31, 1998.
Rental revenues increased by $6.3 million in the first quarter 1998. This
increase was attributable in part to a full period of income from twenty-one
properties acquired in 1997 totaling 7.1 million square feet and seven
build-to-suit properties totaling 1.6 million square feet in 1997 coming
on-line, net of three property dispositions. In addition, the increase was
caused by income from two properties acquired in the first quarter of 1998
totaling 0.2 million square feet, net of dispositions.
In addition, real estate fee income primarily consisting of fees earned by
the Company in connection with its build-to-suit and development activities
and third party management fees increased by $0.9 million. The Company's
equity in income of affiliate and mortgage interest income experienced only a
slight change.
<PAGE>
On a "same-store" basis (comparing the results of operations, on a cash
basis, of the properties owned at January 1, 1997, with the results of
operations of the same properties at March 31, 1998), the Company recognized
an increase of approximately 1.7% in net operating income primarily due to
lease up of vacant space, rental increases on renewed leases and contractual
increases in minimum rent under leases in place.
Real estate tax expense and property operating and leasing expense increased
by $2.2 million, from $7.3 million in the first quarter of 1997 to $9.5
million for the same period in 1998. $1.7 million of the increase is due to
real estate taxes. The majority of the real estate tax increase, $1.4
million, resulted from a full period of 1997 acquisitions and the balance,
$0.3 million, from net tax increases throughout the portfolio. Property
operating and leasing expenses, including insurance, utilities, repairs and
maintenance and property management costs increased at levels comparable to
the level of acquisitions. However, property operating and leasing costs as a
percentage of total revenues decreased consistently when comparing the first
quarter of 1997 to the first quarter of 1998 due to "economies of scale"
realized by the Company.
Depreciation and other amortization increased by $1.5 million, from $3.2
million in the first quarter of 1997 to $4.7 million in the first quarter of
1998. The increase is due primarily to full period depreciation on
acquisitions completed during 1997 and depreciation from dates of acquisition
for the 1998 acquisitions and fixed asset additions. General and
administrative expenses increased by $0.3 million, from $0.7 million in the
first quarter of 1997 to $1.0 million in the first quarter of 1998, due
primarily to the growth of the Company.
Interest incurred increased by approximately $0.3 million over last year due
to the effect of a common equity offering in March, 1997 and the subsequent
pay-down of a portion of the Company's debt. Other income (expenses) remained
almost unchanged from quarter to quarter.
The Company earned gains upon the sale of four properties during the first
quarter of 1998. In 1997, the Company had no comparable gains.
As a result of the factors described above, operating income increased by
$2.5 million from $5.7 million in the first quarter of 1997 to $8.2 million
in the first quarter of 1998, an increase of 43.9%. Earnings before interest,
income taxes, depreciation and amortization increased by $5.9 million, from
$11.8 million in the first quarter of 1997 to $17.7 million in the first
quarter of 1998.
The Company reviews its operating results by comparing Net Revenue Margin
between periods. Net Revenue Margin is calculated 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,
<PAGE>
the amount of operating expenses not recovered by tenant reimbursements. The
margin for the first three months of 1998 was 87.9% compared with 89.3% for
the same period last year.
LIQUIDITY AND CAPITAL RESOURCES
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 quarter of
1998 of $13.2 million net of $9.9 million of first quarter distributions
provided $3.3 million of retained capital. The Company expects retained
capital to fund a portion of future investment activities.
Acquisition of real estate, advances for construction in progress on
development projects, advances on mortgage notes receivable, and improvements
and additions to properties of approximately $42.5 million for the first
quarter of 1998 were partially funded with borrowings under the Company's
unsecured line of credit totaling $35.9 million. Acquisitions of $6.7 million
were funded with a portion of the proceeds from the disposition of real
estate of $29.1 million.
In addition, 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.
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 March 31,
1998, the Company had outstanding borrowings of approximately $103.5 million
under the unsecured revolving line of credit (approximately 9.9% of the
Company's fully diluted total market capitalization), and the Company had
remaining availability of approximately $46.5 million under its unsecured
line of credit.
At March 31, 1998, the Company's debt constituted approximately 25.5% of its
fully diluted total market capitalization. Also, the Company's debt service
coverage ratio remained high at 6.2 to 1. The Company's fully diluted equity
market capitalization was approximately $776 million, and its fully diluted
total market capitalization exceeded $1.0 billion. The Company's leverage
ratios benefited during the first quarter of 1998 from the conversion of
approximately $0.6 million of its 8.22% Convertible Subordinated Debentures,
due 2004, to 31,614 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.
<PAGE>
During the first quarter of 1998, the Company paid distributions on common
shares of $7.4 million or $0.4375 per share and on class B common shares of
$1.0 million or $0.4492 per share. Also, in January of 1998, the Company paid
dividends on preferred shares of $1.43 million or $0.477 per share, and
declared dividends of $1.59 million or $0.53 per share. 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.
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 through draws on
the Company's unsecured line of credit, the issuance of long-term unsecured
indebtedness and the issuance of equity securities.
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 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.
<PAGE>
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 statements.
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 Company estimates the adoption of this
EITF will not have a significant impact on the results of operations in the
future.
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 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 lease 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
<PAGE>
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.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
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.
<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)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 58,402
<SECURITIES> 0
<RECEIVABLES> 15,027
<ALLOWANCES> 372
<INVENTORY> 0
<CURRENT-ASSETS> 32,446
<PP&E> 652,580
<DEPRECIATION> 46,837
<TOTAL-ASSETS> 711,618
<CURRENT-LIABILITIES> 35,872
<BONDS> 275,958
0
3
<COMMON> 19
<OTHER-SE> 399,766
<TOTAL-LIABILITY-AND-EQUITY> 711,618
<SALES> 0
<TOTAL-REVENUES> 26,786
<CGS> 0
<TOTAL-COSTS> 18,590
<OTHER-EXPENSES> (1,375)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,414
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,981
<EPS-BASIC> 0.42
<EPS-DILUTED> 0.41
</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>
