SAN DIEGO, Aug. 14 /PRNewswire/ -- Burnham Pacific Properties, Inc.
(NYSE: BPP) today announced operating results for the second quarter ended
June 30, 2001.
Review of Results
For the second quarter ended June 30, 2001, revenues decreased $16,349,000
to $13,698,000 from $30,047,000 in the second quarter of 2000. This decrease
is primarily attributable to asset sales completed since June of 2000,
partially offset by an increase in rental revenues from development and
redevelopment properties being placed into service. Net income available to
common stockholders for the three months ended June 30, 2001 was $3,435,000,
or $0.11 per share, as compared to a net loss of $3,723,000 for the second
quarter of 2000. This increase was primarily attributable to the Company not
recording depreciation and amortization expenses in 2001 subsequent to the
adoption of the liquidation basis of accounting on December 15, 2000. If, for
comparison purposes, depreciation and amortization expenses were eliminated in
the second quarter of 2000, then net income available to common stockholders
for the three months ended June 30, 2000 would have been $3,182,000.
For the six months ended June 30, 2001, revenues decreased $21,735,000 to
$38,975,000 from $60,710,000 for the six months ended June 30, 2000. Rental
revenues decreased $20,562,000 primarily as a result of asset sales completed
since June of 2000, partially offset by an increase in rental revenues from
development and redevelopment properties being placed into service.
Management fee income decreased $803,000 as a result of the termination of the
Company's former joint venture with the State of California Public Employees'
Retirement System. Net income (loss) available to common stockholders for the
six months ended June 30, 2001 was $6,651,000, as compared to a net loss of
$3,803,000 for the six months ended June 30, 2000. This increase was
primarily attributable to the Company not recording depreciation and
amortization expenses in 2001 subsequent to the adoption of the liquidation
basis of accounting on December 15, 2000. If, for comparison purposes,
depreciation and amortization expenses were eliminated for the first six
months of 2000, then net income available to common stockholders for the six
months ended June 30, 2000 would have been $9,590,000.
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 June 30, 2001
is based on current contracts, estimates as determined by independent
appraisals or other indications of sales value. This valuation is net of
estimated selling costs, and capital expenditures of approximately $14,742,000
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). Further adjustments were
included in the June 30, 2001 Consolidated Statement of Changes in Net Assets
(liquidation basis) to reflect additional capital expenditures and lower than
anticipated closing costs. Increases (decreases) in the carrying value of net
assets are summarized as follows:
Six Months
Ended
June 30, 2001
Increase to reflect estimated net realizable values of
certain real estate properties $60,000
Recognition of deferred gain upon sale of certain
properties 3,859,000
Decrease to reflect estimated net realizable value of
real estate (1,331,000)
Decrease to reflect net realizable value of Investments in
Unconsolidated Subsidiaries (467,000)
Reserve for estimated costs during the period of liquidation (285,000)
Effect of minority interest on adjustment to liquidation
basis 397,000
Adjustment to reflect the change to liquidation basis of
accounting $2,233,000
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 one or more 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 August 9, 2001, the Company has sold
31 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.
On May 17, 2001, the Company sold the Design Market center for
approximately $14,300,000.
On August 9, 2001, the Company sold Olympiad Plaza for approximately
$11,800,000. This transaction also represents a portion of the 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 STATEMENTS OF NET ASSETS (Liquidation Basis)
As of June 30, 2001 and December 31, 2000
(in thousands)
(UNAUDITED)
ASSETS June 30, 2001 December 31, 2000
Real Estate Held for Sale $341,107 $743,527
Cash and Cash Equivalents 12,876 5,110
Restricted Cash 4,202 9,004
Receivables-Net 10,368 8,467
Investment in Unconsolidated Subsidiaries 5,238 5,131
Other Assets 1,936 1,993
Total Assets 375,727 773,232
LIABILITIES
Accounts Payable and Other Liabilities 6,569 21,235
Tenant Security Deposits 1,253 2,246
Notes Payable 116,397 349,237
Line of Credit Advances 34,013 51,267
Reserve for Estimated Costs During the Period of
Liquidation 11,658 19,116
Deferred Gain on Real Estate Assets 13,488 17,347
Total Liabilities 183,378 460,448
Minority Interest 9,252 19,837
Mandatorily Redeemable Series 2000-C Convertible
Preferred Stock -- 115,500
NET ASSETS IN LIQUIDATION $183,097 $177,447
BURNHAM PACIFIC PROPERTIES, INC.
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
For the Three Months and Six Months Ended June 30, 2001
(Liquidation Basis) and
STATEMENT OF INCOME
For the Three Months and Six Months Ended June 30, 2000
(Going Concern Basis)
(in thousands)
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
REVENUES
Rents $13,476 $29,814 $38,547 $59,109
Fee Income -- -- -- 803
Interest and Other Income 222 233 428 798
Total Revenues 13,698 30,047 38,975 60,710
COSTS AND EXPENSES
Interest 2,813 10,589 11,030 20,709
Rental Operating 5,233 8,206 13,314 17,001
Provision for Bad Debt 345 322 1,247 407
General and
Administrative 1,667 2,458 3,886 4,704
Litigation -- 2,400 -- 2,636
Costs Associated with
Pursuit of Strategic
Alternatives and Plan
of Liquidation -- 983 -- 1,322
Depreciation and
Amortization -- 6,905 -- 13,393
Total Costs and
Expenses 10,058 31,863 29,477 60,172
Income (Loss) from
Operations Before
Income from
Unconsolidated
Subsidiaries, Minority
Interest, and Gain on
Sales of Real Estate 3,640 (1,816) 9,498 538
Income from Unconsolidated
Subsidiaries -- 19 -- 66
Minority Interest (156) (920) (598) (2,001)
Gain on Sales of Real
Estate -- 394 -- 394
Net Income (Loss) 3,484 (2,323) 8,900 (1,003)
Dividends Paid to
Preferred Stockholders (49) (1,400) (2,249) (2,800)
Income (Loss) Available to
Common Stockholders $3,435 $(3,723) 6,651 $(3,803)
Net Assets at
December 31, 2000 177,447
Adjustment to Liquidation
Basis 2,233
Liquidating Distributions
to Common Stockholders (3,234)
Net Assets at
June 30, 2001 $183,097
Basic and Diluted
Earnings Per Common
Share: $0.11 $(0.12) $0.21 $(0.12)
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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