SAN DIEGO, May 15 /PRNewswire/ -- Burnham Pacific Properties, Inc.
(NYSE: BPP) today announced operating results for the first quarter ended
March 31, 2001.
Review of Results
For the first quarter ended March 31, 2001, revenues decreased by
$5,783,000 to $25,277,000 from $31,060,000 in the first quarter of 2000. This
decrease was primarily attributable to a decrease in rental revenues of
$4,224,000 resulting from asset sales and a decrease in management fee income
of $1,200,000 resulting from the termination of the Company's former joint
venture with the State of California Public Employees' Retirement System. Net
income available to common stockholders for three months ended March 31, 2001
was $3,216,000 or $0.10 per share as compared to a net loss of $80,000 for the
first quarter of 2000. This increase was primarily attributable to the
Company not recording depreciation expense in 2001 subsequent to the adoption
of the liquidation basis of accounting for periods subsequent to December 15,
2000. If, for comparison purposes, depreciation expense was eliminated in the
first quarter of 2000, then net income available to common stockholders for
the three months ended March 31, 2000 would have been $6,408,000.
Funds From Operations
The Company has historically reported Funds From Operations (FFO) because
it is generally accepted in the real estate investment trust (REIT) industry
as a meaningful supplemental measure of performance. However, because the
Company is liquidating, it no longer believes that FFO is meaningful to
understanding its performance and is therefore no longer reporting FFO.
Adjustment to Liquidation Basis of Accounting
As a result of the adoption of the Plan of Liquidation by the Company's
Board of Directors and its approval by the Company's stockholders, the Company
adopted the liquidation basis of accounting for all periods subsequent to
December 15, 2000. Accordingly, on December 16, 2000, assets were adjusted to
estimated net realizable value and liabilities were adjusted to estimated
settlement amounts, including estimated costs associated with carrying out the
liquidation. The valuation of real estate held for sale as of March 31, 2001
is based on current contracts, estimates as determined by independent
appraisals or other indications of sales value, net of estimated selling
costs, and capital expenditures of approximately $19,535,000 anticipated
during the liquidation period. The net adjustment at December 16, 2000,
required to convert from the going concern (historical cost) basis to the
liquidation basis of accounting, amounted to a negative adjustment of
$85,228,000, which is included in the December 31, 2000 Consolidated Statement
of Changes in Net Assets (liquidation basis). A further negative adjustment
has been included in the March 31, 2001 Consolidated Statement of Changes in
Net Assets (liquidation basis) to reflect additional capital expenditures and
less-than-anticipated closing costs. Increases (decreases) in the carrying
value of net assets are summarized as follows:
Three Months Ended
March 31, 2001
Increase to reflect estimated net realizable values
of certain real estate properties $60,000
Recognition of deferred gain upon sale of
certain properties 1,186,000
Decrease to reflect estimated net realizable value
of real estate (1,218,000)
Decrease to reflect net realizable value of
investments in unconsolidated subsidiaries (287,000)
Reserve for estimated costs during the period
of liquidation (285,000)
Effect on minority interest of adjustment to
liquidation basis 242,000
Adjustment to reflect the change to liquidation
basis of accounting $(302,000)
Adjusting assets to estimated net realizable value resulted in the write-
up of certain real estate properties and the write-down of other real estate
properties. The anticipated gains associated with the write-up of certain
properties have been deferred until their sales, and the anticipated losses
associated with the write-down of other certain properties have been included
in the Consolidated Statement of Changes of Net Assets.
Under the liquidation basis of accounting, the Company is required to
estimate and accrue the costs associated with executing the Plan of
Liquidation. These amounts can vary significantly due to, among other things,
the timing and realized proceeds from property sales, the costs of retaining
personnel and trustees to oversee the liquidation, including the cost of
insurance, the timing and amounts associated with discharging known and
contingent liabilities and the costs associated with cessation of the
Company's operations. These costs are estimates and are expected to be paid
during the liquidation period.
Dispositions
Since the adoption of the Plan of Liquidation by the Company's Board of
Directors in August 2000 through April 26, 2001, the Company has sold
29 properties.
During the fourth quarter of 2000, the Company sold five shopping centers
and one office building. In October 2000, the Company sold the Anacomp office
building for approximately $21,300,000. On December 5, 2000, the Company sold
the Meridian Village and San Diego Factory Outlet Center for an aggregate of
approximately $48,700,000. On December 29, 2000, the Company sold La Mancha,
the Plaza at Puente Hills and Valley Central shopping center for an aggregate
of approximately $109,900,000. Meridian Village, San Diego Factory Outlet, La
Mancha, the Plaza at Puente Hills, and Valley Central represent a portion of a
portfolio of properties targeted for sale under an agreement with The
Prudential Insurance Company of America.
In February 2001, the Company sold the Puget Park and Cameron Park
shopping centers for approximately $18,953,000. In March 2001, the Company
sold the Richmond shopping center for approximately $10,381,000. These
transactions also represent a portion of a portfolio targeted for sale under
the agreement with Prudential.
On April 2, 2001, the Company sold a portfolio of 19 shopping centers to
Weingarten Realty for aggregate sales proceeds of approximately $288,500,000.
On April 26, 2001, the Company sold the Downtown Pleasant Hill shopping
center for approximately $62,400,000. This transaction also represents a
portion of a portfolio targeted for sale under the agreement with Prudential.
Redemption of Preferred Equity
On April 3, 2001, the Company used approximately $126,000,000 of the cash
proceeds from the Weingarten sale to redeem all of the outstanding shares of
Series 2000-C Convertible Preferred Stock and Series 1997-A Preferred Units of
limited partnership interest in Burnham Pacific Operating Partnership.
Burnham Pacific Properties, Inc. is a real estate investment trust (REIT)
that focuses on retail real estate. More information on Burnham may be
obtained by visiting the Company's web site at http://www.burnhampacific.com.
This press release contains forward-looking statements that predict or
indicate future events or trends or that do not relate to historical matters.
There are a number of important factors that could cause actual events to
differ materially from those indicated by such forward-looking statements.
These factors include, but are not limited to, the following: we may be
unsuccessful in implementing our liquidation strategy; we may not be able to
complete the liquidation in a timely manner or realize proceeds from the sales
of assets in amounts that will enable us to provide currently anticipated
liquidating distributions to our stockholders; we have outstanding
indebtedness maturing at various times during 2001, and we may be unable to
repay, refinance, replace or extend any or all of this indebtedness on terms
that are favorable to the Company, or at all; and occupancy rates and market
rents may be adversely affected by economic and market conditions which are
beyond our control, including imbalances in supply and demand for retail
shopping center space and the financial condition of our tenants.
You should also read the risk factors that are discussed in the Company's
periodic reports filed with the Securities and Exchange Commission, including
the risk factors that were disclosed in our Form 10-K which was filed with the
SEC on April 3, 2001. You should be aware that the risk factors contained in
that Form 10-K may not be exhaustive. Therefore, we recommend that you read
the information in that Form 10-K together with other reports and documents
that we file with the SEC from time to time, including our Forms 10-K, 10-Q
and 8-K and Proxy Statements, which may supplement, modify, supersede or
update those risk factors.
BURNHAM PACIFIC PROPERTIES, INC.
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
For the Three Months Ended March 31, 2001 (Liquidation Basis) and
STATEMENT OF INCOME
for the Three Months Ended March 31, 2000 (Going Concern Basis)
(in thousands)
(UNAUDITED)
Three Months Ended
March 31,
2001 2000
REVENUES
Rents $25,071 $29,295
Fee Income 1,200
Interest and Other Income 206 565
Total Revenues 25,277 31,060
COSTS AND EXPENSES
Interest 8,217 10,120
Rental Operating 8,081 9,427
Provision for Bad Debt 901 86
General and Administrative 2,220 2,246
Costs Associated with Pursuit of
Strategic Alternatives and Plan of Liquidation 339
Depreciation and Amortization 6,488
Total Costs and Expenses 19,419 28,706
Income from Operations Before Income from
Unconsolidated Subsidiaries and Minority Interest 5,858 2,354
Income from Unconsolidated Subsidiaries 49
Minority Interest (442) (1,083)
Net Income 5,416 1,320
Dividends Paid to Preferred Stockholders (2,200) (1,400)
Income (Loss) Available to Common Stockholders 3,216 $(80)
Net Assets at December 31, 2000 177,447
Adjustment to Liquidation Basis (302)
Net Assets at March 31, 2001 $180,361
Basic and Diluted Earnings Per Common Share: $0.10 $(0.002)
BURNHAM PACIFIC PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF NET ASSETS (Liquidation Basis)
As of March 31, 2001 and December 31, 2000
(in thousands)
(UNAUDITED)
ASSETS March 31, 2001 December 31, 2000
Real Estate Held for Sale $715,973 $743,527
Cash and Cash Equivalents 2,979 5,110
Restricted Cash 6,759 9,004
Receivables-Net 9,948 8,467
Investment in Unconsolidated Subsidiaries 5,222 5,131
Other Assets 2,600 1,993
Total Assets 743,481 773,232
LIABILITIES
Accounts Payable and Other Liabilities 12,699 21,235
Tenant Security Deposits 2,158 2,246
Notes Payable 322,820 349,237
Line of Credit Advances 59,013 51,267
Reserve for Estimated Costs During
the Period of Liquidation 14,934 19,116
Deferred Gain on Real Estate Assets 16,160 17,347
Total Liabilities 427,784 460,448
Minority Interest 19,836 19,837
Mandatorily Redeemable Series 2000-C
Convertible Preferred Stock 115,500 115,500
NET ASSETS IN LIQUIDATION $180,361 $177,447
SOURCE Burnham Pacific Properties, Inc.
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Related links:
http://www.burnhampacific.com
CONTACT:
Daniel B. Platt, Chief Financial Officer of
Burnham Pacific Properties, Inc., 619-652-4700, fax,
619-652-4711, dbplatt@bpac.com
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