<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-Q
(Mark One)
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2000
OR
[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-12588
----------------
Center Trust, Inc.
(Exact name of registrant as specified in charter)
<TABLE>
<S> <C>
Maryland 95-4444963
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
</TABLE>
3500 Sepulveda Boulevard, Manhattan Beach, California 90266
(Address of principal executive offices) (Zip Code)
(310) 546-4520
(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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for at least the past 90 days. YES [X] NO [_]
As of August 10, 2000, 26,703,319 shares of Common Stock, Par Value $.01 Per
Share, were outstanding.
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<PAGE>
CENTER TRUST, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 2000 (unaudited)
and December 31, 1999....................................... 3
Consolidated Statements of Operations (unaudited) for the
three and six months ended June 30, 2000 and 1999........... 4
Consolidated Statements of Cash Flows (unaudited) for the six
months ended June 30, 2000 and 1999......................... 5
Notes to Consolidated Financial Statements (unaudited)....... 6
Managements Discussion and Analysis of Financial Condition
Item 2. and Results of Operations................................... 8
PART II OTHER INFORMATION............................................ 12
SIGNATURES.............................................................. 13
</TABLE>
2
<PAGE>
CENTER TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
----------- ------------
(unaudited)
ASSETS
------
<S> <C> <C>
Rental properties..................................... $1,013,488 $1,030,689
Accumulated depreciation and amortization............. (151,817) (143,610)
---------- ----------
Rental properties, net................................ 861,671 887,079
Cash and cash equivalents............................. 5,981 5,204
Tenant receivables, net............................... 13,919 12,267
Other receivables..................................... 8,147 6,181
Restricted cash securities............................ 25,173 20,577
Deferred charges, net................................. 22,065 20,966
Other assets.......................................... 1,549 3,305
---------- ----------
TOTAL............................................... $ 938,505 $ 955,579
========== ==========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S> <C> <C>
LIABILITIES:
Secured debt........................................ $ 511,995 $ 524,468
7 1/2% Convertible subordinated debentures.......... 128,548 128,548
7 1/4% Exchangeable subordinated debentures......... 30,000 30,000
Accrued dividends and distributions................. 5,713 9,963
Accrued interest.................................... 5,300 5,441
Accounts payable and other accrued expenses......... 6,448 6,760
Accrued construction costs.......................... 733 1,753
Tenant security and other deposits.................. 4,651 5,948
---------- ----------
Total liabilities................................. 693,388 712,881
---------- ----------
MINORITY INTERESTS:
Operating Partnership (1,759,442 and 1,654,725 units
issued as of June 30, 2000 and December 31, 1999,
respectively)...................................... 14,794 14,091
Other minority interests............................ 1,469 1,319
---------- ----------
Total minority interests.......................... 16,263 15,410
---------- ----------
COMMITMENTS AND CONTINGENCIES:
STOCKHOLDERS' EQUITY:
Common stock ($.01 par value, 100,000,000 shares
authorized; 26,703,319 26,647,988 shares issued and
outstanding as of June 30, 2000 and December 31,
1999, respectively................................. 266 266
Additional paid-in capital.......................... 361,354 361,412
Accumulated distributions and deficit............... (132,766) (134,390)
---------- ----------
Total stockholders' equity........................ 228,854 227,288
---------- ----------
TOTAL............................................... $ 938,505 $ 955,579
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE>
CENTER TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
---------------- ----------------
2000 1999 2000 1999
------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUES:
Rental revenues............................ $24,452 $26,615 $49,661 $52,840
Expense reimbursements..................... 7,715 7,856 15,425 15,989
Percentage rents........................... 661 391 994 1,009
Other income............................... 1,512 1,331 3,101 2,521
------- ------- ------- -------
Total revenues......................... 34,340 36,193 69,181 72,359
------- ------- ------- -------
EXPENSES:
Interest................................... 15,009 13,511 29,700 26,606
Property Operating Costs:
Common Area.............................. 5,146 5,316 10,272 10,843
Property taxes........................... 3,340 3,698 6,674 7,305
Leasehold rentals........................ 361 423 725 847
Marketing................................ 314 204 532 345
Other operating.......................... 838 1,011 1,941 2,349
Depreciation and amortization.............. 6,314 6,098 12,783 12,124
General and administrative................. 1,324 1,431 2,631 2,961
------- ------- ------- -------
Total expenses......................... 32,646 31,692 65,258 63,380
------- ------- ------- -------
INCOME BEFORE OTHER ITEMS.................. 1,694 4,501 3,923 8,979
NET GAIN ON SALE OF RENTAL PROPERTIES...... 9,149 -- 11,724 20,575
MINORITY INTERESTS:
Operating Partnership...................... (675) (40) (821) (4,129)
Other minority interests................... (76) (73) (150) (145)
------- ------- ------- -------
INCOME BEFORE EXTRAORDINARY ITEM........... 10,092 4,388 14,676 25,280
EXTRAORDINARY LOSS ON EARLY EXTINGUISHMENT
OF DEBT................................... -- (4,048) (1,864) (4,048)
------- ------- ------- -------
NET INCOME................................. $10,092 $ 340 $12,812 $21,232
======= ======= ======= =======
BASIC INCOME PER SHARE:
Income before extraordinary item........... $ 0.38 $ 0.17 $ 0.55 $ 1.00
Extraordinary loss on early extinguishment
of debt................................... -- (0.16) (0.07) (0.16)
------- ------- ------- -------
Net Income................................. 0.38 $ 0.01 0.48 $ 0.84
======= ======= ======= =======
DILUTED INCOME PER SHARE...................
Income before extraordinary item........... 0.38 $ 0.17 0.55 $ 0.93
Extraordinary loss on early extinguishment
of debt................................... -- (0.16) (0.07) (0.12)
------- ------- ------- -------
Net Income................................. 0.38 $ 0.01 0.48 $ 0.81
======= ======= ======= =======
Weighted Average Basic Shares Outstanding.. 26,686 25,230 26,667 25,236
======= ======= ======= =======
Weighted Average Diluted Shares
Outstanding............................... 26,686 25,230 26,667 34,578
======= ======= ======= =======
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
CENTER TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------
2000 1999
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................................. $ 12,812 $ 21,232
Adjustment to reconcile net income to net cash Provided
by operating activities:
Depreciation and amortization of rental properties... 12,783 12,124
Amortization of deferred financing costs............. 1,712 1,523
Net gain on Sale of rental properties................ (11,724) (20,575)
Extraordinary loss--Early Extinguishment of Debt..... 1,864 4,048
Minority interests in operations..................... 971 4,274
Net changes in operating assets and liabilities........ (13,063) (1,987)
--------- ---------
Net cash provided by operating activities.......... 5,355 20,639
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of properties.............................. -- (18,484)
Construction and development costs..................... (7,790) (7,176)
Proceeds from sale of rental property.................. 36,109 45,415
--------- ---------
Net cash provided by investing activities.......... 28,319 19,755
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on mortgage financing............... (2,273) (2,015)
Proceeds from mortgages................................ 17,390 110,500
Repayment of mortgages................................. (17,390) (63,915)
Purchase of Convertible Debentures..................... -- (9,561)
Borrowings on secured line of credit................... 190,250 111,627
Repayment of secured line of credit.................... (200,191) (115,353)
Proceeds from the sale of common stock................. 344 33,903
Purchase of common stock............................... -- (20,071)
Repurchase of OP Units................................. -- (48,142)
Costs of obtaining financing........................... -- (1,788)
(Increase) decrease in restricted cash................. (4,596) (10,245)
Dividends to shareholders.............................. (15,191) (17,930)
Distributions to minority interests.................... (1,240) (3,789)
--------- ---------
Net cash used in financing activities.............. (32,897) (36,779)
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS................ 777 3,615
CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD........ 5,204 6,636
--------- ---------
CASH AND CASH EQUIVALENTS, AT END OF PERIOD.............. $ 5,981 $ 10,251
========= =========
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE>
CENTER TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis Of Presentation
Center Trust, Inc., (the "Company"), a Maryland Corporation, is a self-
administered and self-managed real estate investment trust ("REIT"). The
Company engages in the ownership, management, leasing, acquisition,
development and redevelopment of unenclosed retail shopping centers in the
western United States. As of June 30, 2000 the Company owned 55 retail
shopping centers (the "Properties") comprising 9.3 million square feet of
total shopping center gross leasable area ("GLA").
The accompanying financial statements and related notes of the Company are
unaudited; however, they have been prepared in accordance with accounting
standards or principals generally accepted in the United States of America for
interim financial reporting and the instructions to Form 10-Q and the rules
and regulations of the Securities and Exchange Commission. Accordingly,
certain information and footnote disclosures normally included in financial
statements prepared under generally accepted accounting principles have been
condensed or omitted pursuant to such rule. In the opinion of management, all
adjustments considered necessary for fair presentation of the Company's
financial position, results of operations and cash flows have been included.
These financial statements should be read in conjunction with the Company's
Form 10-K for the year ended December 31, 1999.
In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), Revenue Recognition in
Financial Statements. SAB 101 provides guidance on applying generally accepted
accounting principles to revenue recognition issues in financial statements.
The Company is required to adopt SAB 101 by the fourth quarter of 2000.
Management does not expect the adoption of SAB 101 to have a material effect
on the Company's results of operations or on its financial position.
2. Secured Debt
On March 31, 2000, the Company obtained a $200 million secured credit
facility with GE Capital Real Estate. Borrowings under the credit facility are
secured by deeds of trust on certain of the Company's assets. The credit
facility bears interest at a rate of LIBOR plus 250 basis points. The credit
facility has a two-year maturity with the ability to extend the term for an
additional year. The new credit facility replaced the Company's previous
credit facility which would have matured on December 31, 2000 and included a
required pay-down to $85 million by June 30, 2000. In connection with
replacement of the old credit facility, the Company recorded an extraordinary
loss on the early extinguishment of debt of $1.9 million.
3. Property Disposition
On April 17, 2000 the Company sold its AMC Theater located in its Covina
Town Square Shopping Center in Covina, California for $23 million or $242 per
square foot. The buyer of the theater assumed the $17.4 million mortgage that
the Company obtained in March 2000. The Company recorded a $9.1 million gain
on sale of the facility. Net proceeds of approximately $5.3 million were used
to reduce the outstanding balance on the Company's secured credit facility.
On June 2, 2000, the Company completed a sale-leaseback transaction on its
corporate office building in Manhattan Beach, California. The sale of the
office building generated approximately $5 million of cash, which was used to
reduce the outstanding balance on the credit facility. The Company entered
into a long term lease with the buyer of the property.
6
<PAGE>
CENTER TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
4. Per Share Data
In accordance with SFAS No. 128 (Earnings Per Share), basic earnings per
share ("EPS") is based on the weighted average number of shares of common
stock outstanding during the period and diluted EPS is based on the weighted
average number of shares of common stock outstanding combined with the
incremental weighted average shares that would have been outstanding if all
dilutive potential common shares had been issued as of the beginning of the
period. The weighted average number of shares of common stock used in the
computation of basic and diluted EPS for the three month period ended June 30,
2000 and 1999 were 26,686,000 and 25,230,000, respectively. The weighted
average number of shares of common stock used in the computation of basic EPS
for the six month period ended June 30, 2000 and 1999 were 26,667,000 and
25,236,000, respectively. The weighted average number of shares of common
stock used in the computation of diluted EPS for the six month period ended
June 30, 2000 and 1999 were 26,667,000 and 34,578,000, respectively. Units
held by limited partners in the Operating Partnership may be exchanged for
shares of common stock of the Company on a one-for-one basis, in certain
circumstances, and therefore are not dilutive. Accordingly, the increase in
weighted average shares outstanding under the diluted method over the basic
method in every period presented is due entirely to the effect of outstanding
options issued under the Company's Amended and Restated 1993 Stock Option and
Incentive Plan and the Company's convertible and exchangeable debentures.
On July 20, 2000, the Company paid a $0.21 dividend per share to
shareholders of record as of June 30, 2000.
5. Subsequent Event
On July 21, 2000, the Company entered into an agreement with Kimco Realty
Corporation to sell six properties for a purchase price of $160.6 million
including the assumption of $68.3 million in debt. The properties are located
in California, Washington, and Nevada. The sale, subject to due diligence and
other closing conditions, is expected to close late in the third quarter of
2000.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
The following discussion should be read in conjunction with the accompanying
consolidated financial statements and notes thereto.
Forward Looking Statements
The following discussion of financial condition and Results of Operations
contains certain forward-looking statements that are subject to risk and
uncertainty. In particular, statements pertaining to our capital resources,
portfolio performance and results of operations contain forward-looking
statements. Likewise, all our statements regarding anticipated growth in our
funds from operations and anticipated market conditions, demographics and
results of operations are forward-looking statements. Forward looking
statements involve numerous risks and uncertainties and you should not rely on
them as predictions of future events. Forward-looking statements depend on
assumptions, data or methods which may be incorrect or imprecise and we may
not be able to realize them. We do not guarantee that the transactions and
events described will happen as described, or that they will happen at all.
You can identify forward-looking statements by the use of forward-looking
terminology such as "believes," "expects," "may," "will," "should," "would,"
"seeks," "approximately," "intends," "plans," "pro forma" "estimates" or
"anticipates" or the negative of these words and phrases or similar words or
phrases. You can also identify forward-looking statements by discussions of
strategy, plans or intentions. The following factors, among others, could
cause actual results and future events to differ materially from those set
forth or contemplated in the forward-looking statements:
. defaults on or non-renewal of leases by tenants;
. increased interest rates and operations costs;
. our failure to obtain necessary outside financing;
. difficulties in identifying properties to acquire and completing
acquisitions;
. difficulties in disposing of properties;
. our failure to successfully operate acquired properties and operations;
. our failure to successfully develop property;
. our failure to maintain our status as a REIT;
. environmental uncertainties and risks related to natural disasters;
. financial market fluctuations; and
. changes in real estate and zoning laws and increases in real property
tax rates.
Our success also depends upon economic trends generally, as well as income
tax laws, governmental regulation, legislation, population changes and other
matters discussed above in section entitled "Risk Factors." We caution you,
however, that any list of risk factors may not be exhaustive.
Results of Operations
Comparison of the six months ended June 30, 2000 to the six months ended June
30, 1999.
Rental revenues decreased by $3.1 million to $49.7 million for the six
months ended June 30, 2000 from $52.8 million for the six months ended June
30, 1999. The decrease of approximately $3.4 million is due to the sale of two
community retail centers, five single tenant facilities and one free standing
theater from the period June 30, 1999 through June 30, 2000. The decrease was
partially offset by increased revenues at the Company's existing stable
properties.
8
<PAGE>
Property operating costs decreased by $1.6 million to $20.1 million for the
six months ended June 30, 2000 from $21.7 million for the six months ended
June 30, 1999. The decrease is a result of decreased property taxes and
operating costs from the sale of eight properties previously discussed. In
addition, there was slightly lower operating costs at the Company's existing
properties.
Interest expense increased to $29.7 million for the six months ended June
30, 2000 from $26.6 million for the six months ended June 30, 1999. The
increase resulted from a higher effective interest cost partially offset by
lower average debt outstanding for the six-month period ended June 30, 2000
compared to the same period in 1999. The decrease in the average debt
outstanding was primarily due to proceeds received from sales of the AMC
Theater in Covina, California, a single tenant facility in Glendora,
California and the Company's corporate office building that were used to pay-
down the Company's credit facility. The increase in the effective interest
rate is primarily related to the Company's new credit facility and higher
borrowing rates. See additional discussion in the following "Liquidity Sources
and Requirements."
General and Administrative costs decreased by $0.4 million from $3.0 million
for the six months ended June 30, 1999 to $2.6 million for the six months
ended June 30, 2000. The decrease is primarily due to the Company's
reorganization in the 4th quarter of 1999 to reduce its operating costs.
Net income decreased by $8.4 million to $12.8 million for the six months
ended June 30, 2000 from $21.2 million for the six months ended June 30, 1999.
Included in net income for 2000 was a $2.6 million gain on the single tenant
facility in Glendora, California and a $9.1 million net gain on the sale of
the AMC Theater located in its Covina Town Square Shopping Center. Net income
for 1999 included a $20.6 million gain resulting from the sale of the Sam's
Club in Fountain Valley, California, a single tenant facility and The City
Center, in San Francisco, California.
Selected Property Financial Information
Net operating income (defined as revenues, less property operating costs)
for the Company's properties is as follows:
<TABLE>
<CAPTION>
Six Months
Ended June 30,
---------------
2000 1999
------- -------
<S> <C> <C>
Retail Properties (55 in 2000 and 62 in 1999):
Regional Malls............................................ $ 8,623 $ 9,440
Community Centers......................................... 38,007 37,844
Single Tenants............................................ 1,746 2,970
Other income.............................................. 661 416
------- -------
Net Operating Income.................................... $49,037 $50,670
======= =======
</TABLE>
The following summarizes the percentage of leased GLA (excluding non-owned
GLA as of:
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
-------- ------------
<S> <C> <C>
Retail Properties (55 in 2000 and 56 in 1999):
Community Centers.................................... 95.4% 95.0%
Regional Malls....................................... 91.3 90.9
Single Tenants....................................... 100.0 100.0
Aggregate Portfolio.................................. 95.1 94.9
</TABLE>
9
<PAGE>
Funds from Operations
The Company considers funds from operations ("FFO") to be an alternative
measure of the performance of an equity REIT since such measure does not
recognize depreciation and amortization expenses as operating expenses. FFO is
defined, as outlined in the October 1999 White Paper, by the National
Association of Real Estate Investment Trusts ("NAREIT") as net income plus
depreciation and amortization of real estate, less gains or losses on sales of
properties.
The Company computes FFO on both a basic and diluted basis. The diluted
basis assumes the conversion of the convertible and exchangeable debentures
into shares of common stock. The following table summarizes the Company's
computation of FFO and provides certain additional disclosures (dollars in
thousands):
<TABLE>
<CAPTION>
Three Months Six Months Ended
Ended June 30, June 30,
---------------- ------------------
2000 1999 2000 1999
------- ------- -------- --------
<S> <C> <C> <C> <C>
FUNDS FROM OPERATIONS
Net income.............................. $10,092 $ 340 $ 12,812 $ 21,232
Adjustments to reconcile net income to
funds from operations:
Depreciation and Amortization:
Buildings and improvements.......... 4,327 4,236 8,663 8,518
Tenant improvements and allowances.. 1,271 1,301 2,700 2,558
Leasing costs....................... 653 530 1,299 984
Minority Interests.................... 571 (45) 630 3,964
Extraordinary loss--early
extinguishment of debt............... -- 4,048 1,864 4,048
Gain on Sale of Assets................ (9,149) -- (11,724) (20,575)
Other................................. 354 253 817 636
------- ------- -------- --------
Funds from Operations, basic............ 8,119 10,663 17,061 21,365
Debenture interest expense.............. 2,954 3,125 5,908 6,267
Amortization of debenture financing
costs.................................. 321 323 641 648
------- ------- -------- --------
Funds from operations, diluted.......... $11,394 $14,111 $ 23,610 $ 28,280
======= ======= ======== ========
</TABLE>
Funds from operations, on a basic basis, decreased $4.3 million to $17.1
million for the six months ended June 30, 2000, from $21.4 million for the
same period in 1999. On a diluted basis, assuming conversion of the debentures
and other common stock equivalents, funds from operations decreased $4.7
million to $23.6 million from $28.3 million. The decrease in funds from
operations is principally a result of the reasons stated above under Results
of Operations.
Funds from operations do not represent cash flows from operations as defined
by Generally Accepted Accounting Principles and should not be considered as an
alternative to net income as an indicator of Center Trust's operating
performance or to cash flows as a measure of liquidity.
Liquidity Sources and Requirements
The Company intends to meet its short-term cash requirements from cash
generated operations. The company anticipates that revenues generated from the
Company's real estate will be sufficient to cover operating expenses, debt
service requirements and dividends to shareholders.
On March 31, 2000, the Company obtained a $200 million secured credit
facility with GE Capital Real Estate. Borrowings under the credit facility are
secured by deeds of trust on certain of the Company's assets. The credit
facility expires in March 2000 and the Company has the ability to extend the
term for an additional year. The credit facility bears interest at a rate of
LIBOR plus 250 basis points. As of June 30, 2000 the outstanding borrowings on
the Credit Facility were $148 million.
10
<PAGE>
Borrowings on the new credit facility were used to pay down the remaining
balance of the Company's previous credit facility, which would have matured on
December 31, 2000. In connection with the repayment of this debt, the Company
recorded a 1.9 million first quarter extraordinary loss for the early
extinguishment of debt.
During the first quarter, the Company sold a single tenant facility located
in Glendora, California. The Company recorded a $2.6 million net gain on the
sale of the facility. Net proceeds of $7.8 million from the sale were used to
reduce the outstanding balance on the Company's secured credit facility.
During the second quarter, the Company sold its AMC Theatre located in its
Covina Town Square Shopping Center and its corporate office building in
Manhattan Beach, California for total net proceeds of $10.5 million. The
proceeds were used to reduce the outstanding balance on the credit facility.
See additional discussion in Note 3 of the Notes to Consolidated Financial
Statements.
On July 21, 2000, the Company entered into an agreement with Kimco Realty
Corporation to sell six properties for a purchase price of $160.6 million
including the assumption of $68.3 million in debt. The properties are located
in California, Washington, and Nevada. The sale, subject to due diligence and
other closing conditions, is expected to close late in the third quarter of
2000. Proceeds from the sale, along with anticipated proceeds from certain
refinancing transactions, combined with funds available under the credit
facility will be used to repay the Company's convertible debentures that
mature in January 2001.
Cash Flows
Net cash provided by operating activity decreased by $15.2 million from
$20.6 million for the six months ended June 30, 1999 to $5.4 million for the
same period of 2000. The decrease resulted primarily from the additional
working capital used by operations and from the sale of nine properties in the
period from June 30, 1999 through June 30, 2000, as previously discussed.
Net cash from investment activities was $28.3 million for the six months
ended June 30, 2000 as compared to $19.8 million for the six months ended June
30, 1999. The increase was the result of the sale of three properties in 2000
compared to the sale of one property and purchase of two properties in 1999.
Financing activities used cash of $32.9 million for the six months ended June
30, 2000 as compared to cash used by financing activities for the six months
ended June 30, 1999 of $36.8 million.
Inflation
Center Trust's long term leases contain provisions designed to mitigate the
adverse impact of inflation on its results from operations. Such provisions
include clauses enabling Center Trust to receive percentage rents based upon
tenants' gross sales, which generally increase as prices rise, and/or, in
certain cases, escalation clauses are often related to increases in the CPI or
similar inflation indices. In addition, many of Center Trust's leases are for
terms of less than ten years, which permits Center Trust to seek to increase
rents upon re-rental at market rates if rents are below then existing market
rates. Many of Center Trust's leases require the tenants to pay a pro rata
share of operating expenses, including common area maintenance, real estate
taxes, insurance and utilities, thereby reducing Center Trust's exposure to
increases in costs and operating expenses from inflation.
11
<PAGE>
PART II--OTHER INFORMATION
Item 1: Legal Proceedings
None
Item 2: Changes in Securities
Item 3: Defaults Upon Senior Securities
None
Item 4: Submission of Matters to a Vote of Security Holders
None
Item 5: Other Information
None
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
On May 4, 2000, the Company filed a report on Form 8-K to make available
additional financial and operational information concerning the Company and
properties owned as of March 31, 2000.
12
<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.
CENTER TRUST RETAIL PROPERTIES, INC.
/s/ Stuart J.S. Gulland
By: _________________________________
Stuart J.S. Gulland
Chief Operating Officer
(Principal Financial Officer)
/s/ Edward A. Stokx
By: _________________________________
Edward A. Stokx
Senior Vice President of Finance
(Principal Accounting Officer)
Dated: August 14, 2000
13
