SAN DIEGO, May 15 /PRNewswire-FirstCall/ -- Burnham Pacific Properties,
Inc. (NYSE: BPP) today announced financial results for the first quarter ended
March 31, 2002. Net income available to common stockholders for the first
quarter of 2002 was $707,000, or $0.02 per share, as compared to net income of
$3,216,000, or $0.10 per share, for the quarter ended March 31, 2001.
Review of Results
For the first quarter ended March 31, 2002, total revenues decreased
$18,250,000 to $7,027,000 from $25,277,000 in the first quarter of 2001. This
decrease was primarily attributable to asset sales completed in 2001 and the
first quarter of 2002 under the Company's Plan of Complete Liquidation and
Dissolution. Total expenses decreased $13,116,000 to $6,303,000 from
$19,419,000 in the first quarter of 2001 resulting from the Company's
implementation of the Plan of Liquidation.
Liquidation Basis of Accounting
As a result of the adoption of the Plan of Liquidation 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, in accordance with the liquidation basis of accounting,
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, 2002 and December 31, 2001 is based on current contracts,
estimates as determined by independent appraisals and other indications of
sales value, net of (i) estimated selling costs and (ii) anticipated capital
expenditures during the remaining liquidation period of approximately $731,000
and $6,337,000, respectively. Actual values realized for assets and
settlement of liabilities may differ materially from the amounts estimated.
Factors that may cause such variations include, among other factors, the
possibility that assets currently under contract may not be sold on the terms
currently provided in those contracts or at all, and the other risk factors
discussed under Forward-Looking Statements and Certain Risk Factors beginning
on page one of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2001 filed with the Securities and Exchange Commission.
Adjustments to Net Assets in Liquidation
Significant increases (decreases) in the carrying value of net assets are
summarized for the first quarter of 2002 as follows:
Three Months Ended
March 31, 2002
Recognition of deferred gain on
sale of certain properties $3,881,000
Decrease to reflect estimated net
realizable value of certain
Real Estate properties (2,241,000)
Reserve for estimated costs during
the period of liquidation (880,000)
Effect of minority interest on
Adjustment to Net Assets in Liquidation 4,000
Adjustment to reflect the change
in Net Assets in Liquidation $764,000
The adjustments to reflect the change in Net Assets in Liquidation are
included in the Consolidated Statement of Changes in Net Assets in the
accompanying financial statements.
Adjustment to Deferred Gain on Real Estate Assets
Adjusting assets to estimated net realizable value resulted in the write-
up of certain real estate properties. The anticipated gains associated with
the write-up of these real estate properties have been deferred until their
sales. The amount of Deferred Gain on Real Estate Assets at December 31, 2001
was $5,819,000. During the first quarter of 2002, the Deferred Gain on Real
Estate Assets was adjusted as follows:
Deferred Gain at December 31, 2001 $5,819,000
Deferred Gain recognized upon
sales of Real Estate (3,881,000)
Deferred Gain at March 31, 2002 $1,938,000
Net Assets in Liquidation
Net Assets in Liquidation at March 31, 2002 of $62,725,000, or $1.91 per
share, does not include the Deferred Gain on Real Estate Assets of $1,938,000,
or $0.06 per share, as the recognition of these amounts has been deferred
until their sales. The valuation of Net Assets in Liquidation is based on
estimates as of March 31, 2002, and the actual values realized for assets and
settlement of liabilities may differ materially from the amounts estimated.
Dispositions and Distributions
Since the adoption of the Plan of Liquidation by the Company's Board of
Directors in August 2000 through May 15, 2002, the Company has disposed of
54 properties and two parcels of undeveloped land for aggregate proceeds of
approximately $854,984,000, consisting of approximately $520,125,000 in cash,
2,512,778 shares of common stock of Developers Diversified Realty Corporation
("DDR") valued at $20.21 per share (the value of a share of DDR common stock
as of the close of business on the closing date of the sale by the Company of
two properties to DDR), and the assumption of approximately $284,076,000 of
liabilities. The Company applied approximately $126,000,000 of the cash
proceeds to redeem all of the Company's outstanding preferred equity,
approximately $2,578,000 to redeem units of limited partnership interests in
conjunction with the sale of certain assets, and approximately $243,397,000 to
further reduce the Company's outstanding indebtedness. The Company has also
made liquidating distributions to its common stockholders and the holders of
common units of limited partnership interest in its subsidiaries of
approximately $73,591,000 in cash ($2.20 per share and common unit) and has
distributed all of the shares of DDR common stock at a ratio of 0.07525 of a
share of DDR common stock for each share of the Company's common stock and
each common unit. The remainder of the net proceeds (excluding current cash
reserves) was used for capital improvements in development projects, tenant
improvements and leasing commissions, litigation costs, severance and other
liquidation costs, and the repayment of other obligations. The aggregate
amount of liquidating distributions made to date, using the value of the DDR
common stock of $20.21 per share, is $3.72 per share and common unit.
Based on current facts and circumstances, the Board of Directors is not
yet able to determine whether it will be appropriate to authorize an
additional liquidating distribution prior to June 28, 2002, but it expects to
be in a position to determine whether or not to do so by the middle of June
2002 based upon a variety of factors. Such factors include, without
limitation, the timing of and the net proceeds realized from the sale of the
Company's properties, the realization and timing of payments to the Company
pursuant to promissory notes received in connection with such sales, the
status of pending and potential litigation, the collection of delinquent
tenant receivables associated with such sales, and the anticipated amounts of
liquidation-related expenses and other obligations and liabilities that must
be satisfied by the Company and the BPP Liquidating Trust or for which
reserves must be established. There can be no assurance that any liquidating
distribution will be authorized by the Board of Directors prior to June 28,
2002.
As of May 15, 2002, the Company owned the following five properties:
Central Shopping Center -- Ventura, CA
Crenshaw Imperial Shopping Center -- Inglewood, CA
Gateway Center -- Marin City, CA
Palms To Pines -- Palm Desert, CA
Simi Valley Plaza -- Simi Valley, CA
Liquidating Trust
On May 10, 2002, the Company announced that it intends to enter into a
liquidating trust agreement (the "Trust Agreement") on June 28, 2002 for the
purpose of winding up its affairs and liquidating its assets. The Company
currently anticipates that it will transfer its then remaining assets to (and
its then remaining liabilities will be assumed by) the Trustees of the BPP
Liquidating Trust on June 28, 2002, and the Company will be dissolved. It is
anticipated that June 27, 2002 (the "Record Date") will be the last day of
trading of the Company's common stock on the New York Stock Exchange, and the
Company's stock transfer books will be closed as of the close of business on
such date.
Under the terms of the proposed Trust Agreement, on June 28, 2002 each of
the Company's stockholders on the Record Date (each a "beneficiary")
automatically will become the holder of one unit of beneficial interest
("Unit") in the BPP Liquidating Trust for each share of the Company's common
stock then held of record by such stockholder. On and after June 28, 2002,
all outstanding shares of the Company's common stock automatically will be
deemed cancelled, and the rights of beneficiaries in their Units will not be
represented by any form of certificate or other instrument. Stockholders on
the Record Date will not be required to take any action to receive their
Units. The Trustees will maintain a record of the name and address of each
beneficiary and such beneficiary's aggregate Units in the BPP Liquidating
Trust. Subject to certain exceptions related to transfer by will, intestate
succession or operation of law, the Units will not be transferable, nor will a
beneficiary have authority or power to sell or in any other manner dispose of
any Units.
This press release contains forward-looking statements that predict or
indicate future events 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: the Company may be
unable to transfer all of its remaining assets and liabilities to the BPP
Liquidating Trust if it fails to obtain all necessary third party consents to
such transfer or such transfer may be otherwise materially delayed; the BPP
Liquidating Trust may be unable to consummate sale transactions with respect
to some or all of the Company's remaining properties or such sales may be
materially delayed; the BPP Liquidating Trust 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 it to provide liquidating distributions to
beneficiaries; the Company's board of directors may terminate the Plan of
Complete Liquidation and Dissolution due to unstable or unfavorable real
estate or financial market conditions or for any other reason; and occupancy
rates and market rents may be adversely affected by economic and market
conditions which are beyond our and the Trustees' control, including
imbalances in supply and demand for retail shopping center space and the
financial condition of 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 are contained in our Form 10-K for the year ended
December 31, 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-Q and 8-K,
which may supplement, modify, supersede or update those risk factors. The
Company assumes no obligation to update the forward-looking statements
included in this press release. However, if the Board of Directors of the
Company should determine to extend the Record Date beyond June 27, 2002, the
Company will issue a press release announcing such date. Further questions
with respect to the foregoing may be addressed to Mr. Daniel Platt, Chief
Financial Officer, at (619) 652-4700 or 110 West A Street, Suite 900, San
Diego CA 92101.
BURNHAM PACIFIC PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF NET ASSETS
As of March 31, 2002 and December 31, 2001 (Liquidation Basis)
(in thousands)
(UNAUDITED)
March 31, December 31,
ASSETS 2002 2001
Real Estate Held for Sale $63,963 $212,274
Cash and Cash Equivalents 41,011 75,122
Restricted Cash 1,168 8,816
Receivables-Net 5,344 7,796
Investment in Unconsolidated Subsidiaries -- 1,886
Other Assets 1,882 1,270
Total Assets 113,368 307,164
LIABILITIES
Accounts Payable and Other Liabilities 4,517 6,108
Liquidating Distributions Payable -- 41,731
Deposits for Property Sales 497 6,593
Tenant Security Deposits 385 715
Notes Payable 36,449 102,204
Reserve for Estimated Costs
During the Period of Liquidation 5,802 5,709
Deferred Gain on Real Estate Assets 1,938 5,819
Total Liabilities 49,588 168,879
Minority Interest 1,055 2,425
NET ASSETS IN LIQUIDATION $62,725 $135,860
BURNHAM PACIFIC PROPERTIES, INC.
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
For the Three Months Ended March 31, 2002 and 2001 (Liquidation Basis)
(in thousands)
(UNAUDITED)
Three Months Ended
March 31,
2002 2001
REVENUES
Rents $6,717 $25,071
Interest and Other Income 310 206
Total Revenues 7,027 25,277
COSTS AND EXPENSES
Interest 1,185 8,217
Rental Operating 3,186 7,854
Provision for Bad Debt 566 901
General and Administrative 1,240 2,079
Litigation and Legal 126 368
Total Costs and Expenses 6,303 19,419
Income from Operations before Minority Interest 724 5,858
Minority Interest (17) (442)
Net Income 707 5,416
Dividends Paid to Preferred Stockholders -- (2,200)
Income Available to Common Stockholders $707 $3,216
Net Assets in Liquidation at
December 31, 2001 and 2000 135,860 177,447
Adjustment to Net Assets in Liquidation 764 (302)
Liquidating Distributions (74,606) --
Net Assets in Liquidation at
March 31, 2002 and 2001 $62,725 $180,361
Basic and Diluted Earnings Per Common Share: $0.02 $0.10
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., +1-619-652-4700, fax
+1-619-652-4711, dbplatt@bpac.com
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