<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 MARCH 31, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR
15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-13136
HOME PROPERTIES OF NEW YORK, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 16-1455126
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)
850 CLINTON SQUARE, ROCHESTER, NEW YORK 14604
(Address of principal executive offices) (Zip Code)
(716) 546-4900
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former
year, if changed since last report)
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
CLASS OF COMMON STOCK OUTSTANDING AT APRIL 30, 1998
$.01 par value 11,905,593
Page 1 of 15
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HOME PROPERTIES OF NEW YORK, INC.
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
1998 1997
(Unaudited) (Note 1)
<S> <C> <C>
ASSETS
Real estate:
Land $ 78,455 $ 62,640
Buildings, improvements and equipment 520,300 462,488
598,755 525,128
Less: accumulated depreciation ( 50,586) ( 46,531)
Real estate, net 548,169 478,597
Cash and cash equivalents 2,821 3,809
Cash in escrows 10,511 10,211
Accounts receivable 3,612 3,531
Prepaid expenses 7,211 5,305
Deposits 2,656 605
Investments in and advances to affiliates 36,287 35,585
Deferred financing costs 1,497 1,637
Other assets 5,326 4,543
Total assets $618,090 $543,823
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage notes payable $217,376 $210,096
Line of credit 22,250 8,750
Accounts payable 4,574 5,082
Accrued interest payable 1,157 1,077
Accrued expenses and other liabilities 3,296 4,374
Security deposits 6,909 6,165
Total liabilities 255,562 235,544
Minority interest 187,841 156,847
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; 10,000,000
shares authorized; no shares issued - -
Common stock, $.01 par value; 30,000,000
shares authorized; 10,334,332 and 9,317,556 shares
issued and outstanding at March 31, 1998 and
December 31, 1997, respectively 104 93
Excess stock, $.01 par value; 10,000,000
shares authorized; no shares issued - -
Additional paid-in capital 200,759 176,021
Distributions in excess of
accumulated earnings ( 21,302) ( 19,700)
Treasury stock, at cost, 20,000 shares ( 426) ( 426)
Officer and director notes for stock purchases( 4,448) ( 4,556)
Total stockholders' equity 174,687 151,432
Total liabilities and
stockholders' equity $618,090 $543,823
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
Page 2 of 15
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
1998 1997
<S> <C> <C>
Revenues:
Rental income $25,094 $12,579
Property other income 502 436
Interest income 914 265
Other income 263 562
Total revenues 26,773 13,842
Expenses:
Operating and maintenance 12,140 6,930
General and administrative 1,209 379
Interest 4,398 2,354
Depreciation and amortization 4,079 2,338
Total expenses 21,826 12,001
Income before minority interest 4,947 1,841
Minority interest 2,172 572
Net income $ 2,775 $ 1,269
Per share data:
Net income - Basic $.29 $.20
- Diluted $.28 $.20
Weighted average number of
shares outstanding - Basic 9,702,975 6,378,441
- Diluted 9,900,451 6,521,345
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
Page 3 of 15
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED, IN THOUSANDS)
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,775 $ 1,269
Adjustments to reconcile net income to net
cash provided by operating activities:
Equity in income of HP Management
and Conifer Realty 208 ( 78)
Income allocated to minority interest 2,172 572
Depreciation and amortization 4,239 2,572
Changes in assets and liabilities:
Other assets ( 2,260) ( 3,510)
Accounts payable and
accrued liabilities ( 762) ( 106)
Total adjustments 3,597 ( 550)
Net cash provided by operating
activities 6,372 719
Cash flows used in investing activities:
Purchase of properties, net of
mortgage notes assumed ( 35,644) ( 17,402)
Additions to properties ( 6,808) ( 2,835)
Deposits on property ( 2,051) -
Advances to affiliates ( 6,068) ( 6,690)
Payments on advances to affiliates 5,366 2,387
Other ( -) ( 169)
Net cash used in
investing activities ( 45,205) ( 24,709)
Cash flows from financing activities:
Proceeds from sale of common stock 24,650 18,458
Proceeds from mortgage and
other notes payable 8,000 -
Payments of mortgage and
other notes payable ( 720) ( 294)
Proceeds from line of credit 33,000 24,700
Payments on line of credit ( 19,500) ( 16,000)
Additions to deferred loan costs ( 21) -
Additions to cash escrows ( 300) ( 390)
Dividends and distributions paid ( 7,264) ( 3,214)
Net cash provided by
financing activities 37,845 23,260
Net increase (decrease) in cash ( 988) ( 730)
Cash and cash equivalents:
Beginning of period 3,809 1,523
End of period $ 2,821 $ 793
Supplemental disclosure of cash flow information:
Cash paid for interest $ 4,157 $2,190
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
Page 4 of 15
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
1. UNAUDITED INTERIM FINANCIAL STATEMENTS
The interim consolidated financial statements of Home Properties of New
York, Inc. (the "Company") are prepared pursuant to the requirements for
reporting on Form 10-Q. Accordingly, certain disclosures accompanying
annual financial statements prepared in accordance with generally accepted
accounting principles are omitted. The year-end balance sheet data was
derived from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles. In the
opinion of management, all adjustments, consisting solely of normal
recurring adjustments, necessary for the fair presentation of the
consolidated financial statements for the interim periods have been
included. The current period's results of operations are not necessarily
indicative of results which ultimately may be achieved for the year. The
interim consolidated financial statements and notes thereto should be read
in conjunction with the financial statements and notes thereto included in
the Company's Form 10-K, as filed with the Securities and Exchange
Commission on March 24, 1998.
2. ORGANIZATION AND BASIS OF PRESENTATION
ORGANIZATION
Home Properties of New York, Inc. (the " Company " ) was formed in
November 1993, as a Maryland corporation and is engaged primarily in the
ownership, management, acquisition and development of residential
apartment communities in the Northeastern, Mid-Atlantic and Midwestern
United States. As of March 31, 1998, the Company operated 162 apartment
communities with 22,862 apartments. Of this total, the Company owned 67
communities, consisting of 15,514 apartments, managed as general partner
4,802 apartments and fee managed 2,546 apartments for affiliates and third
parties. The Company also fee manages 1.7 million square feet of office
and retail properties.
BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
the Company and its 55.0% (70.6% at March 31, 1997) general partnership
interest in the Operating Partnership. The remaining 45.0% (29.4% at
March 31, 1997) is reflected as Minority Interest in these consolidated
financial statements.
All significant intercompany balances and transactions have been
eliminated in these consolidated financial statements.
3. EARNINGS PER COMMON SHARE
The Company has adopted Statement of Financial Accounting Standards (SFAS)
No. 128, "Earnings per Share", which was issued by the Financial
Accounting Standards Board in February 1997. SFAS No. 128 requires dual
presentation of basic earnings per share (EPS) and diluted EPS on the face
of all statements of earnings for periods ending after December 15, 1997.
Basic EPS is computed as net income divided by the weighted average number
of common shares outstanding for the period. Diluted EPS reflects the
potential dilution that could occur from common shares issuable through
stock-based compensation including stock options. The exchange of an
Operating Partnership Unit for common stock will have no effect on diluted
EPS as unitholders and stockholders effectively share equally in the net
income of the Operating Partnership.
Page 5 of 15
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONT'D
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
3. EARNINGS PER COMMON SHARE CONT'D
Net income is the same for both the basic and diluted calculation. The
reconciliation of the basic weighted average shares outstanding and
diluted weighted average shares outstanding for the three months ended
March 31, 1998 and 1997 is as follows:
1998 1997
Basic weighted average number
of shares outstanding 9,702,975 6,378,441
Effect of dilutive stock options 197,476 142,904
Diluted weighted average number
of shares outstanding 9,900,451 6,521,345
Page 6 of 15
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
4. PRO FORMA FINANCIAL INFORMATION
Pro Forma Combined Statement of Operations
FOR THE THREE MONTHS ENDED MARCH 31, 1998
Home
Properties Pro Forma Company
HISTORICAL ADJUSTMENT PRO FORMA
Revenue:
Rental income $25,094 $1,594 $26,688
Property other income 502 26 528
Interest income 914 - 914
Other income 263 - 263
Total Revenues 26,773 1,620 28,393
Expenses:
Operating and Maintenance 12,140 720 12,860
General and administrative 1,209 50 1,259
Interest 4,398 477 4,875
Depreciation and amortization 4,079 300 4,379
Total Expenses 21,826 1,547 23,373
Income before minority interest $ 4,947 $ 73 5,020
Minority Interest 2,342
Net income $ 2,678
Net income per common share - Basic $0.28
- Diluted $0.27
Weighted average number of
shares outstanding - Basic 9,702,975
- Diluted 9,900,451
The pro forma information was prepared as if the transactions related to
the acquisition of Candlewood Apartments (on January 9, 1998, 310 units
for $13,350), Cedar Glen Apartments (on March 2, 1998, 110 units for
$2,600), Park Shirlington Apartments and Braddock Lee Apartments (on March
13, 1998, 548 units for $26,401) and Apple Hill Apartments (on
March 27, 1998, 498 units for $23,500) had occurred on January 1, 1998.
Adjustments to the pro forma combined statements of operations for the
three months ended March 31, 1998, consist principally of providing net
property operating activity and recording interest, depreciation and
amortization from January 1, 1998 to the acquisition date.
Page 7 of 15
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following discussion is based primarily on the consolidated financial
statements of Home Properties of New York, Inc. as of March 31, 1998 and 1997
and for the three month periods then ended. This information should be read in
conjunction with the accompanying consolidated financial statements and notes
thereto.
FORWARD-LOOKING STATEMENTS
This discussion contains forward-looking statements. Although the Company
believes expectations reflected in such forward-looking statements are based on
reasonable assumptions, it can give no assurance that its expectations will be
achieved. Factors that may cause actual results to differ include general
economic and local real estate conditions, other conditions that might affect
operating expenses, the timely completion of repositioning and current
development activities within anticipated budgets, the actual pace of future
acquisitions and developments and continued access to capital to fund growth.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal liquidity demands are expected to be distributions to
stockholders, capital improvements and repairs and maintenance for the
properties, acquisition of additional properties, property development and
scheduled debt maturities.
The Company intends to meet its short-term liquidity requirements through net
cash flows provided by operating activities and its unsecured line of credit.
The Company considers its ability to generate cash to continue to be adequate
to meet all operating requirements and make distributions to its stockholders
in accordance with the provisions of the Internal Revenue Code, as amended, to
enable the Company to qualify as a REIT.
The Company has an unsecured line of credit from Chase Manhattan Bank of $50
million with an available capacity of $27.8 million at March 31, 1998.
Borrowings under the line of credit bear interest at 1.25% over the one-month
LIBOR rate. Accordingly, increases in interest rates will increase the
Company's interest expense and as a result will effect the Company's results of
operations and financial condition. The unsecured line of credit expires on
September 4, 1999, with a one year extension at the Company's option. As of
April 30, 1998, the entire $50 million is available as a result of using the
net proceeds from equity raised in a direct placement to a major institutional
investor to repay the outstanding balance.
To the extent that the Company does not satisfy its long-term liquidity
requirements through net cash flows provided by operating activities and its
unsecured line of credit, it intends to satisfy such requirements through the
issuance of UPREIT units, proceeds from the Dividend Reinvestment Plan
("DRIP"), long term secured or unsecured indebtedness, or the issuance of
additional equity securities. As of March 31, 1998, the Company owned twenty-
four properties with 4,962 apartment units, which were unencumbered by debt.
As of February 28, 1997, the Company's Form S-3 Registration Statement was
declared effective relating to the issuance of up to $100 million of shares of
common stock or other securities. At December 31, 1997, $59 million remained
available under the shelf. During March 1998, $10.5 million of common shares
were issued under the shelf registration, with an additional $35 million of
common shares issued in a direct placement to a major institutional investor in
April 1998, leaving a capacity of $13.5 million. On May 14, 1998, the Company
filed a Form S-3 Registration Statement relating to the issuance of up to $400
million of unsecured debt, preferred stock or other equity securities.
Page 8 of 15
HOME PROPERTIES OF NEW YORK, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION CONT'D
The issuance of UPREIT Units for property acquisitions continues to be a
significant source of capital. During 1997, 5,636 apartment units in four
separate transactions were acquired for a total cost of $195 million using
UPREIT Units valued in excess of $106 million, with the balance paid in cash or
assumed debt. During 1998, 858 apartment units in two separate transactions
were acquired for a total cost of $40 million using UPREIT Units valued in
excess of $31 million, with the balance paid in cash or assumed debt.
In addition, over $36 million was raised during 1997 through the Company's
DRIP, including over $4.5 million from officers and directors financed
partially by a Company loan of $2.3 million. An additional $20 million has
been raised through the DRIP program during the first four months of 1998.
The Company's Board of Directors approved a stock repurchase program under
which the Company may repurchase up to one million shares of its outstanding
common stock. The Board's action did not establish a target price or a
specific timetable for repurchase. During June 1997, the Company repurchased
20,000 shares at a cost of $.426 million.
As of March 31, 1998, the weighted average rate of interest on mortgage debt is
7.6% and the weighted average maturity is 7.0 years. Most of the debt is fixed
rate, with only 9% variable rate debt. This limits the exposure to changes in
interest rates, minimizing the effect on results of operations and financial
condition.
Page 9 of 15
<PAGE>
The following table sets forth information regarding the mortgage indebtedness
at March 31, 1998.
Principal
Interest Balance as of
Rate as of Maturity March 31, 1998
<TABLE>
<CAPTION>
<S> <C> <C> <S> <C>
COMMUNITIES LOCATION MARCH 31, 1998 DATE (000'S)
FIXED RATE
Landon Court Philadelphia, PA 7.75% 11/01/98 1,189
Williamstowne
Village Buffalo, NY 2.50% 12/31/99 28
Westminster Syracuse, NY 7.22% 09/01/00 3,222
Perinton and
Riverton Rochester, NY 6.75% (1) 09/01/00 11,956
Executive House Philadelphia, PA 8.50% 06/01/01 2,564
Harmark Village
Square Philadelphia, PA 8.50% 06/01/01 2,885
Karen Court Philadelphia, PA 8.00% 09/01/01 1,307
Patricia Court Philadelphia, PA 8.00% 09/01/01 1,720
Springwood Philadelphia, PA 8.50% 11/01/01 1,507
Valley View Philadelphia, PA 8.50% 11/01/01 3,416
Royal Gardens Piscataway, NJ 7.66% 08/01/02 11,834
Williamstowne
Village Buffalo, NY 7.37% (2) 10/27/02 9,838
Brook Hill Rochester, NY 7.75% 11/01/02 4,923
Garden Village Buffalo, NY 7.75% 11/01/02 4,633
1600 Elmwood Rochester, NY 7.75% 11/01/02 5,405
Village Green Syracuse, NY 7.75% 11/01/02 4,826
Chesterfield Philadelphia, PA 8.25% 01/01/03 6,800
Curren Terrace Philadelphia, PA 8.355% 11/01/03 9,699
Fairview Heights Ithaca, NY 7.71% (3) 11/01/03 3,993
Finger Lakes
Manor Rochester, NY 7.71% (3) 11/01/03 3,993
Glen Manor Philadelphia, PA 8.125% 05/01/04 3,740
Springcreek/
Meadows Rochester, NY 7.63% (4) 08/01/04 3,191
Idylwood Buffalo, NY 8.625% 11/01/05 9,370
Mid Island Estates Bay Shore, NY 7.25% (5) 05/01/06 6,675
Newcastle Rochester, NY 6.00% (6) 07/31/06 6,150
Raintree Island Buffalo, NY 8.50% 11/01/06 6,472
Woodgate Place Rochester, NY 7.865% 01/01/07 3,465
Valley Park South Bethlehem, PA 6.93% 01/01/08 10,158
Hamlet Court Rochester, NY 7.11% 02/01/08 1,809
Candlewood South Bend, ID 7.02% 03/01/08 8,000
Ten Communities Detroit, MI 7.51% 06/01/08 49,828
Conifer Village Syracuse, NY 7.20% 06/01/10 2,910
Harborside Manor Syracuse, NY 8.92% 04/01/14 4,180
Village Green
(Fairways) Syracuse, NY 8.23% 10/01/19 4,494
Raintree Island Buffalo, NY 8.50% 05/01/20 1,196
217,376
</TABLE>
Page 10 of 15
<PAGE>
Interest Balance as of
Rate as of Maturity March 31, 1998
COMMUNITIES LOCATION MARCH 31, 1998 DATE (000'S)
LINE OF CREDIT
<TABLE>
<CAPTION>
<S> <C> <C> <S> <C>
Unsecured N/A 30 day LIBOR On Demand 22,250
+1.25%
$239,626
</TABLE>
(1) Fixed through August 4, 1999, then prime +.5% until maturity.
(2) Fixed through November 1, 2000, then prime +.5% until maturity.
(3) Fixed through April 30, 2000, then prime +.5% until maturity.
(4) Fixed through July 31, 2000, then prime +.5% until maturity.
(5) Fixed through March 31, 1998; 7.5%. April 1, 1998 through March 31, 2001;
then 7.75% until maturity.
(6) Fixed through July 31, 1999, then variable.
RESULTS OF OPERATIONS
COMPARISON OF THREE MONTHS ENDED MARCH 31, 1998 TO THE SAME PERIOD IN 1997
The Company had 27 apartment communities with 6,552 units and one small
ancillary convenience shopping area which were owned during both of the three
month periods being presented (the "Core Properties"). The Company has
acquired an additional 40 apartment communities with 8,962 units during 1997
and 1998 (the "Acquired Communities"). The inclusion of these Acquired
Communities generally accounted for the significant changes in operating
results for three months ended March 31, 1998.
A summary of the Core Property net operating income is as follows:
1998 1997 %CHANGE
Rent $11,467,000 $11,108,000 3.2%
Property other income 376,000 322,000 16.8%
Total income 11,843,000 11,430,000 3.6%
Operating and Maintenance ( 5,805,000) ( 6,189,000) 6.2%
Net operating income $ 6,038,000 $ 5,241,000 15.2%
Of the $12,515,000 increase in rental income, $12,156,000 is attributable to
the Acquired Communities. The balance of this increase, which is from the Core
Properties, was the result of an increase of 2.5% in weighted average rental
rates, plus an increase in occupancy from 93.0% to 93.7%.
Of the $66,000 increase in property other income, $261,000 is attributable to
the Acquired Communities, with $54,000 representing a 17% increase for the Core
Properties. This increase reflects bringing more laundry "in-house" versus
contracting out. The balance, a $249,000 decrease, is from the Company's share
of income/loss from various general partnership interests.
Interest income increased $649,000, primarily attributable to an increase in
construction loans and advances made to affiliated tax credit development
partnerships.
Other income decreased by $299,000 due primarily to differences in the amount
of bonus accruals recorded during each period by the Management Companies.
Page 11 of 15
Of the $5,210,000 increase in operating and maintenance expenses, $5,594,000 is
attributable to the Acquired Communities. The balance for the Core Properties
represents a 6.2% decrease over 1997. The major areas of decrease in the Core
Properties occurred in utilities and snow removal costs. Our extreme mild 1998
weather, combined with normal gas rates (compared to very high rates in 1997)
resulted in a positive variance in utilities of $357,000, or 21.4%, and
$47,000, or 16.7% in snow removal costs.
General and administrative expense increased in 1998 by $830,000, or 219%
during a period when the Company more than doubled the number of owned
apartment units. General and administrative expenses as a percentage of total
revenues increased from 2.7% in 1997 to 4.5% in 1998. The biggest reason for
this percentage growth is a result of the Company's incentive compensation plan
which rewards exceptional FFO growth per share. The extraordinary growth
during the first quarter of 1998 resulted in a $200,000 bonus accrual this year
compared to no bonus accrual in the first quarter of 1997. In addition, the
Company recorded a $73,000 non-recurring expense related to doing business in
the State of Pennsylvania.
FUNDS FROM OPERATIONS
Management considers funds from operations to be an appropriate measure of
performance of an equity REIT. The National Association of Real Estate
Investment Trusts ("NAREIT") revised White Paper definition of funds from
operations is income (loss) before gains (losses) from the sale of property and
extraordinary items, before minority interest in the Operating Partnership,
plus real estate depreciation. Management believes that in order to facilitate
a clear understanding of the combined historical operating results of the
Company, funds from operations should be considered in conjunction with net
income as presented in the consolidated financial statements included elsewhere
herein. Funds from operations does not represent cash generated from operating
activities in accordance with generally accepted accounting principles and is
not necessarily indicative of cash available to fund cash needs. Funds from
operations should not be considered as an alternative to net income as an
indication of the Company's performance or to cash flow as a measure of
liquidity.
The calculation of funds from operations for the previous six quarters are
presented below:
March 31 Dec. 31 Sept. 30 June 30 March 31 Dec. 31
1998 1997 1997 1997 1997 1996
Net income $2,775 $2,417 $ 828 $1,876 $1,269 $1,215
Minority interest 2,172 2,451 423 802 572 271
Extraordinary item - 1,037 - - - -
Depreciation from
real property 4,038 3,715 2,654 2,389 2,305 2,241
Depreciation from real
property from
unconsolidated entities 196 168 76 76 4 183
(Gain) Loss from sale of
property - ( 872) 2,155 - - -
FFO $9,181 $8,916 $6,136 $5,143 $4,150 $3,910
Weighted average common shares/
units outstanding
- Basic 17,303.6 15,215.0 10,827.1 10,139.1 9,254.7 7,168.4
- Diluted 17,501.1 15,417.7 10,950.1 10,229.5 9,397.6 7,223.9
All REITs may not be using the strict White Paper definition for new FFO.
Accordingly, the above presentation may not be comparable to other similarly
titled measures of FFO of other REITs.
INFLATION
Substantially all of the leases at the communities are for a term of one year
or less, which enables the Company to seek increased rents upon renewal of
existing leases or commencement of new leases. These short-term leases
minimize the potential adverse effect of inflation on rental income, although
Page 12 of 15
residents may leave without penalty at the end of their lease terms and may do
so if rents are increased significantly.
DECLARATION OF DIVIDEND
On May 5, 1998, the Board of Directors approved a dividend of $.45 per share
for the period from October 1, 1997 to December 31, 1997. This is the
equivalent of an annual distribution of $1.80 per share. The dividend is
payable May 27, 1998 to shareholders of record on May 15, 1998.
SUBSEQUENT EVENTS
On April 30, 1998, the Company acquired 1,589 apartment units plus 6.8 acres of
vacant land in 4 communities located in Baltimore, Maryland and its suburbs.
The total purchase price and closing costs of $53.7 million included the
assumption of existing debt of approximately $8.8 million plus the issuance of
UPREIT units valued at approximately $21.4 million, new mortgage financing in
the amount of $20.6 million, plus cash of $2.9 million. The Company paid $.5
million in prepayment penalties at closing, which will be expensed during the
second quarter.
OTHER INCOME
Other income for the three months ended March 31, 1998 and 1997 is summarized
as follows:
1998 1997
Management fees $271 $116
Development fees 171 353
Other 29 15
Management Companies ( 208) 78
$263 $562
Certain property management, leasing and development activities are performed
by Home Properties Management, Inc. and Conifer Realty Corporation (the
"Management Companies"). The Operating Partnership owns non-voting common
stock in the Management Companies which entitles the Operating Partnership to
receive 99% of the economic interest in the Management Companies. The
Company's share of income from the Management Companies for the three months
ended March 31, 1998 and 1997 is summarized as follows:
1998 1997
Management fees $793 $738
Development fees 954 519
Miscellaneous 26 25
General and administrative (1,789) (1,106)
Interest expense ( 130) ( 59)
Other expenses ( 64) ( 38)
Net income ($ 210) $ 79
Company's share ($ 208) $ 78
Page 13 of 15
<PAGE>
PART II - OTHER INFORMATION
HOME PROPERTIES OF NEW YORK, INC.
ITEM 6. EXHIBITS AND REPORTS OR FORM 8-K
(a) Exhibits: There are no exhibits which are filed with, or incorporated by
reference, to this report.
(b) Reports or Form 8-K:
-- Form 8-K was filed on April 15, 1998, date of report April 13, 1998,
with respect to an item 5 disclosure concerning an agreement with a
major institutional investor to purchase $35,000,000 of common
shares, before expenses.
-- Form 8-K was filed on March 26, 1998, date of report March 24, 1998,
with respect to an item 5 disclosure concerning an underwriting
agreement with Wheat First Securities, Inc. to purchase $9,500,000
of common shares, before expenses.
Page 14 of 15
<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.
HOME PROPERTIES OF NEW YORK, INC.
(Registrant)
Date: MAY 15, 1998
By: /S/ DAVID P. GARDNER
David P. Gardner
Vice President
Chief Financial Officer and Treasurer
Date: MAY 15, 1998
By: /S/ NORMAN LEENHOUTS
Norman Leenhouts
Chairman and Co-Chief
Executive Officer
Page 15 of 15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
HOME PROPERTIES OF NEW YORK, INC.'S FINANCIAL STATEMENTS CONTAINED IN ITS
MARCH 31, 1998 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 2,821
<SECURITIES> 0
<RECEIVABLES> 3,612
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 598,755
<DEPRECIATION> 50,586
<TOTAL-ASSETS> 618,090
<CURRENT-LIABILITIES> 0
<BONDS> 217,376
0
0
<COMMON> 104
<OTHER-SE> 174,583
<TOTAL-LIABILITY-AND-EQUITY> 618,090
<SALES> 0
<TOTAL-REVENUES> 26,773
<CGS> 0
<TOTAL-COSTS> 17,428
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,398
<INCOME-PRETAX> 4,947
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,775
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,775
<EPS-PRIMARY> .29
<EPS-DILUTED> .28
</TABLE>
