SAN DIEGO, Nov. 15 /PRNewswire/ -- Burnham Pacific Properties, Inc.
(NYSE: BPP) today announced operating results for the third quarter ended
September 30, 2001.
Review of Results
For the third quarter ended September 30, 2001, total revenues decreased
$17,248,000 to $13,352,000 from $30,600,000 in the third quarter of 2000.
This decrease is primarily attributable to asset sales completed since June of
2000.
Net income available to common stockholders for the three months ended
September 30, 2001 was $3,799,000 or $0.12 per share, as compared to a net
loss of $39,133,000 for the third quarter of 2000. The 2000 three month
period was favorably impacted by a net gain on sales of real estate of
$832,000. The 2000 three month period was unfavorably impacted by litigation
expenses of $977,000, costs of $3,320,000 associated with the Company's
pursuit of its strategic alternatives, a restructuring charge of
$2,144,000 for costs associated with the termination of the Company's joint
venture with the State of California Public Employees' Retirement System
("CalPERS"), and an impairment write-off of $32,330,000 taken in connection
with the Company's plan to liquidate. In addition, because of its adoption of
the liquidation basis of accounting on December 15, 2000, the Company has not
recorded depreciation expense in 2001. In the 2000 three month period, the
Company recorded depreciation and amortization expense of $6,567,000.
For the nine months ended September 30, 2001, total revenues decreased
$38,982,000 to $52,328,000 from $91,310,000 for the nine months ended
September 30, 2000. Rental revenues decreased $38,526,000 primarily as a
result of asset sales completed since September of 2000. Management fee
income decreased $803,000 as a result of the termination of the Company's
former joint venture with CalPERS in September of 2000.
Net income available to common stockholders for the nine months ended
September 30, 2001 was $10,450,000 or $0.32 per share, as compared to a net
loss of $42,936,000 for the nine months ended September 30, 2000. The 2000
nine month period was favorably impacted by a net gain on sales of real estate
of $1,226,000. The 2000 nine month period was unfavorably impacted by
litigation expenses of $3,613,000, costs of $4,642,000 associated with the
Company's pursuit of its strategic alternatives, a restructuring charge of
$2,144,000 for costs associated with the termination of the Company's joint
venture with CalPERS, and an impairment write-off of $32,330,000 taken in
connection with the Company's plan to liquidate. In addition, because of its
adoption of the liquidation basis of accounting on December 15, 2000, the
Company has not recorded depreciation expense in 2001. In the 2000 nine month
period, the Company recorded depreciation and amortization expense of
$19,960,000.
Funds From Operations
The Company 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 implementing its Plan of Complete Liquidation and Dissolution, 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 September 30, 2001 is
based on current contracts, estimates as determined by independent appraisals
or other indications of sales value. As a result, this valuation is only an
estimate and the actual aggregate amount realized by the Company upon the sale
of its assets may be materially different from this estimate. Factors that
may cause such a variation include, among other factors, general economic
conditions in the Company's markets, including continued economic effects
resulting from the September 11, 2001 terrorist incidents and tenant financial
difficulties, as well as the possibility that assets currently under contract
may not be sold on the terms currently provided in those contracts or at all.
This valuation is net of (i) estimated selling costs and (ii) anticipated
capital expenditures of approximately $10,804,000 during the remaining
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 increases (decreases) were included in the September 30, 2001
Consolidated Statement of Changes in Net Assets (liquidation basis) as
follows:
Nine Months Ended
September 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 5,655,000
Decrease to reflect estimated net realizable
value of real estate (15,369,000)
Decrease to reflect net realizable value of
Investments in Unconsolidated Subsidiaries (593,000)
Reserve for estimated costs during the period of
liquidation (285,000)
Effect of minority interest on adjustment to
liquidation basis 568,000
Adjustment to reflect the change to liquidation
basis of accounting $(9,964,000)
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, 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 September 30, 2001, the Company has sold
32 properties for aggregate proceeds of approximately $599,226,000, consisting
of approximately $365,763,000 in cash and the assumption of approximately
$233,463,000 of liabilities. The Company applied approximately $126,000,000
of the cash proceeds to redeem all of the Company's outstanding preferred
equity, approximately $1,455,000 to redeem units of limited partnership
interests, and approximately $200,504,000 to further reduce the Company's
outstanding indebtedness. The remainder was used for capital improvements in
development and redevelopment properties, litigation costs, severance and
other liquidation costs, and the repayment of other obligations.
On August 9, 2001, the Company sold Olympiad Plaza for approximately
$11,763,000. This transaction represents a portion of the portfolio targeted
for sale under the previously announced agreement with Prudential Insurance
Company of America.
On September 27, 2001, the Company sold the Keizer Creekside shopping
center for approximately $5,898,000.
Subsequent Event
On October 12, 2001, the Company sold 2.9 acres of undeveloped land
located in Pleasant Hill, California for approximately $2,200,000.
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.
For further information, please contact Daniel B. Platt, Chief Financial
Officer of Burnham Pacific Properties, Inc., +1-619-652-4700, fax,
+1-619-652-4711, dbplatt@bpac.com.
BURNHAM PACIFIC PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF NET ASSETS (Liquidation Basis)
As of September 30, 2001 and December 31, 2000
(in thousands)
(UNAUDITED)
ASSETS September 30, 2001 December 31, 2000
Real Estate Held for Sale $ 311,282 $ 743,527
Cash and Cash Equivalents 12,278 5,110
Restricted Cash 3,268 9,004
Receivables-Net 9,012 8,467
Investment in Unconsolidated Subsidiaries 4,210 5,131
Other Assets 1,550 1,993
Total Assets 341,600 773,232
LIABILITIES
Accounts Payable and Other Liabilities 7,519 21,235
Tenant Security Deposits 1,096 2,246
Notes Payable 106,252 349,237
Line of Credit Advances 23,703 51,267
Reserve for Estimated Costs During the
Period of Liquidation 10,123 19,116
Deferred Gain on Real Estate Assets 11,437 17,347
Total Liabilities 160,130 460,448
Minority Interest 6,771 19,837
Mandatorily Redeemable Series 2000-C
Convertible Preferred Stock -- 115,500
NET ASSETS IN LIQUIDATION $ 174,699 $ 177,447
BURNHAM PACIFIC PROPERTIES, INC.
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
For the Three Months and Nine Months Ended September 30, 2001
(Liquidation Basis) and
CONSOLIDATED STATEMENT OF INCOME
For the Three Months and Nine Months Ended September 30, 2000
(Going Concern Basis)
(in thousands)
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
REVENUES
Rents $ 12,203 $ 30,232 $ 50,751 $ 89,277
Fee Income -- -- -- 803
Interest and Other Income 1,149 368 1,577 1,230
Total Revenues 13,352 30,600 52,328 91,310
COSTS AND EXPENSES
Interest 2,591 11,310 13,622 32,019
Rental Operating 4,520 8,808 17,834 26,216
Provision for Bad Debt 851 377 2,097 785
General and Administrative 1,420 3,713 5,307 8,009
Litigation -- 977 -- 3,613
Costs Associated with
Pursuit of Strategic
Alternatives and Plan of
Liquidation -- 3,320 -- 4,642
Alternatives and Plan of
Liquidation -- 3,320 -- 4,642
Restructuring Charge -- 2,144 -- 2,144
Impairment Write-Off -- 32,330 -- 32,330
Depreciation and
Amortization -- 6,567 -- 19,960
Total Costs and Expenses 9,382 69,546 38,860 129,718
Income (Loss) from
Operations Before Income
from Unconsolidated
Subsidiaries, Minority
Interest, and Gain on
Sales of Real Estate 3,970 (38,946) 13,468 (38,408)
Income from Unconsolidated
Subsidiaries -- 33 -- 99
Minority Interest (171) 615 (769) (1,386)
Gain on Sales of Real Estate -- 832 -- 1,226
Net Income (Loss) 3,799 (37,466) 12,699 (38,469)
Dividends Paid to
Preferred Stockholders -- (1,667) (2,249) (4,467)
Income (Loss) Available to
Common Stockholders $3,799 $ (39,133) $ 10,450 $ (42,936)
Net Assets at
December 31, 2000 177,447
Adjustment to Liquidation
Basis (9,964)
Liquidating Distributions
to Common Stockholders
Stockholders (3,234)
Net Assets at
September 30, 2001 $ 174,699
Basic and Diluted Earnings
Per Common Share: $ 0.12 $ (1.21) $ 0.32 $ (1.33)
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, or fax,
+1-619-652-4711, dbplatt@bpac.com
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