-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T9bd2nuNdjRYMQUnEhINF6nWk/wK1FDnq5/+JBe+mXeVbOzSWRWtyd+hUAP4eGwr kEswfdHrUVklbeMyXx17RQ== 0000914317-97-000329.txt : 19970729 0000914317-97-000329.hdr.sgml : 19970729 ACCESSION NUMBER: 0000914317-97-000329 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970711 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970728 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VALUE PROPERTY TRUST CENTRAL INDEX KEY: 0000079259 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 231862664 STATE OF INCORPORATION: MD FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06613 FILM NUMBER: 97646076 BUSINESS ADDRESS: STREET 1: 120 ALBANY STREET STREET 2: 8TH FLOOR CITY: NEW BRUNSWICK STATE: NJ ZIP: 08901- BUSINESS PHONE: 9082963080 FORMER COMPANY: FORMER CONFORMED NAME: MORTGAGE & REALTY TRUST DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PNB MORTGAGE & REALTY INVESTORS DATE OF NAME CHANGE: 19850102 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------------- FORM 8-K CURRENT REPORT -------------------------------- PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 11, 1997 ------------- VALUE PROPERTY TRUST ----------------------------------- (Exact name of registrant as specified in its charter) Maryland 1-6613 23-1862664 - ---------------------------- ------------ ------------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 120 Albany Street, 8th Floor New Brunswick, New Jersey 08901-2163 - ----------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (908) 296-3080 VALUE PROPERTY TRUST AND SUBSIDIARIES INDEX Page No. -------- Item 2. Acquisition or Disposition of Assets.................... 2 Item 7. Financial Statements and Exhibits ...................... 3 Signatures ........................................ 4 Appendix A ............................................. F-1 - F-8 -1- VALUE PROPERTY TRUST AND SUBSIDIARIES FORM 8-K ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On July 11, 1997 and July 15, 1997, Value Property Trust (the "Trust") received net cash proceeds of $6.3 million and provided mortgage financing in the amount of $6.2 million from the sale of two real estate properties to unaffiliated third parties. The carrying value of these two real estate properties was approximately $7.4 million. The properties were located in California and were divested based on a number of factors including the price offered, the Trust's evaluation of the property's potential for future appreciation and the current return to the Trust. The Trust continues to operate 21 properties in eight states. One of the properties sold was encumbered under the terms of the indenture relating to the Floating Rate Notes (the "New Indenture"). On August 1, 1997, the Trust will use $2.6 million of the net proceeds from the sale of the encumbered property to prepay a portion of the Floating Rate Notes, as required under the terms of the New Indenture. During the third quarter of fiscal 1997, as previously reported on Form 8-K filed with the Securities and Exchange Commission on July 9, 1997, the Trust received net cash proceeds of $40.1 million from the sale of three real estate properties to an unaffiliated third party. The carrying value of these real estate properties was approximately $28.6 million. The properties were located in California and were divested based on a number of factors including the price offered, the Trust's evaluation of the property's potential for future appreciation and the then current return to the Trust. Two of the properties sold during the third quarter were encumbered under the terms of the New Indenture. On July 1, 1997, the Trust used $22.1 million of the net proceeds from the sale of the encumbered properties to prepay a portion of the Floating Rate Notes, as required under the terms of the New Indenture. During the second quarter of fiscal 1997, as previously reported on Form 8-K filed with the Securities and Exchange Commission on April 1, 1997, the Trust received net cash proceeds of $28.2 million from the sale of four real estate properties to unaffiliated third parties. These sales occurred between February 21, 1997 and March 17, 1997. The carrying value of these real estate properties was approximately $22.4 million. Three of the properties, located in Maine, Oregon and Washington, were outside of the geographic regions in which the Trust is focusing its operating activities. The fourth property, located in Pennsylvania, was divested based on a number of factors including the price offered, the Trust's evaluation of the property's potential for future appreciation and the then current return to the Trust. Two of the properties sold during the second quarter of fiscal 1997 were encumbered under the terms of the New Indenture. The Trust used $11.1 million of the net proceeds from the sale of the encumbered properties to prepay a portion of the Floating Rate Notes on March 3, 1997 and April 1, 1997, as required under the terms of the New Indenture. -2- VALUE PROPERTY TRUST AND SUBSIDIARIES FORM 8-K ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (b) Pro Forma Financial Information The Pro Forma Balance Sheet as of March 31, 1997, the Pro Forma Statement of Operations for the Six Months Ended March 31, 1997 and for the Year Ended September 30, 1996, which are attached as Appendix A, hereto, have been prepared to reflect the sale of nine real estate properties and the repayment of related debt. The pro-forma financial information is based on and should be read in conjunction with the historical financial statements and the notes thereto filed as part of the Trust's quarterly report on Form 10-Q for the quarter ended March 31, 1997 and the Trust's annual report on Form 10-K for the fiscal year ended September 30, 1996. The Pro Forma Balance Sheet as of March 31, 1997 was prepared as if the third and fourth quarter property sales, the mortgage financing and the related loan repayments had occurred on March 31, 1997. In addition, the Pro Forma Balance Sheet as of March 31, 1997 reflects the loan repayment from an encumbered second quarter property sale which was required on April 1, 1997 under the terms of the New Indenture. The Pro Forma Statement of Operations for the six months ended March 31, 1997 and for the year ended September 30, 1996 were prepared as if the property sales which occurred during the second, third and fourth quarters of fiscal 1997 and the related loan repayments had occurred on October 1, 1995. In addition, the Pro Forma Statement of Operations for the year ended September 30, 1996 was prepared as if the mortgage financing had occurred on October 1, 1995 and matured on September 30, 1996. The pro forma financial information is unaudited and not necessarily indicative of the results that would have actually occurred had the nine property sales and related loan repayments been consummated on October 1, 1995 nor does it purport to represent the financial position and results of operations for future periods. -3- VALUE PROPERTY TRUST AND SUBSIDIARIES FORM 8-K 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. Value Property Trust /s/Robert T. English -------------------- Robert T. English Secretary, Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer) DATE: July 28, 1997 -4- VALUE PROPERTY TRUST AND SUBSIDIARIES FORM 8-K APPENDIX A TO CURRENT REPORT ON FORM 8-K ITEMS 2 AND 7 Pro Forma Unaudited Financial Statements as of March 31, 1997 and audited and Pro Forma unaudited Financial Statements as of September 30, 1996. -5- VALUE PROPERTY TRUST AND SUBSIDIARIES FORM 8-K FORM 8-K -- Item 2 and 7 (b) INDEX OF PRO FORMA FINANCIAL STATEMENTS Page No. -------- Pro Forma Balance Sheet as of March 31, 1997......................... F-2 Pro Forma Statement of Operations for the Six Months Ended March 31, 1997 ................................... F-4 Pro Forma Statement of Operations for the Year Ended September 30, 1996 ...................................... F-5 Notes and Management's Assumptions to the Unaudited Pro Forma Financial Statements................................. F-6 F-1 VALUE PROPERTY TRUST AND SUBSIDIARIES FORM 8-K
- ------------------------------------------------------------------------------------------------------------ PRO FORMA CONSOLIDATED BALANCE SHEETS (Unaudited) (In Thousands) - ------------------------------------------------------------------------------------------------------------ Pro Forma Adjustments ------------------------------- Historical Third Fourth Pro Forma March 31, Quarter Quarter Amount 1997 Sales Sales (As Adjusted) --------- --------- --------- --------- ASSETS Assets Held for Sale: Investment in partnerships ............. $ 15,906 $ (4,590) A $ (5,535) B $ 5,781 Real estate owned ...................... 47,076 (23,811) A (1,898) B 21,367 --------- --------- --------- --------- Total Assets Held for Sale ....... 62,982 (28,401) (7,433) 27,148 --------- --------- --------- --------- Assets Held for Investment: Mortgage loans ......................... 605 6,257 B 6,862 Real estate owned ...................... 37,801 37,801 --------- --------- --------- --------- Total Assets Held for Investment . 38,406 6,257 44,663 --------- --------- --------- --------- Total Invested Assets ............ 101,388 (28,401) (7,433) 71,811 Cash and cash equivalents ................. 53,526 18,040 A 3,688 B 75,254 Restricted cash ........................... 11,943 (6,847) A 5,096 Interest receivable and other assets ...... 3,908 3,908 --------- --------- --------- --------- Total Assets ..................... $ 170,765 $ (17,208) $ 2,512 $ 156,069 ========= ========= ========= ========= LIABILITIES Senior secured notes (due 1999) ........... $ 49,729 $ (28,936) A (2,570) B $ 18,223 Accounts payable and accrued expenses ..... 1,540 1,540 Interest payable .......................... 252 252 --------- --------- --------- --------- Total Liabilities ................ 51,521 (28,936) (2,570) 20,015 --------- ---------- --------- ---------
F-2 VALUE PROPERTY TRUST AND SUBSIDIARIES FORM 8-K
- ------------------------------------------------------------------------------------------------------------ PRO FORMA CONSOLIDATED BALANCE SHEETS (Unaudited)(continued) (In Thousands) - ------------------------------------------------------------------------------------------------------------ Pro Forma Adjustments Historical Third Fourth Pro Forma March 31, Quarter Quarter Amount 1997 Sales Sales (As Adjusted) --------- --------- --------- --------- SHAREHOLDERS' EQUITY Preferred shares, $1 par value: 3,500,000 shares authorized, none issued -- -- -- -- Common shares, $1 par value: 20,000,000 shares authorized, 11,226,310 shares issued and outstanding ............... 11,226 11,226 Additional paid-in capital ................ 88,848 88,848 Accumulated earnings ...................... 19,170 11,728 A 5,082 B 35,980 --------- --------- --------- --------- Total Shareholders' Equity ....... 119,244 11,728 5,082 136,054 --------- --------- --------- --------- Total Liabilities and Shareholders' Equity ........... $ 170,765 $ (17,208) $ 2,512 $ 156,069 ========= ========= ========= ========= See accompanying notes to the consolidated financial statements.
F-3 VALUE PROPERTY TRUST AND SUBSIDIARIES FORM 8-K
- ------------------------------------------------------------------------------------------------------------------------------------ PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In Thousands Except Per Share Data) - ------------------------------------------------------------------------------------------------------------------------------------ Pro Forma Adjustments Six Months ------------------------------------------------- Ended Second Third Fourth Pro Forma March 31, Quarter Quarter Quarter Amount 1997 Sales Sales Sales (As Adjusted) ----------- ----------- ----------- ---------- ------------- Revenue: Rental properties: Rental income........................... $ 11,649 $ (1,918) C $ (2,026) F (642) H $ 7,063 Operating expense reimbursements........ 1,675 (41) C (627) F (197) H 810 Interest and fee income on mortgage loans... 42 42 Interest on short-term investments.......... 1,114 1,114 Other....................................... 8 8 ----------- ----------- ----------- ---------- ------------- Total Revenue........................... 14,488 (1,959) (2,653) (839) 9,037 ----------- ----------- ----------- ---------- ------------- Expenses: Interest.................................... 2,773 (692) D (903) G (105) I 1,073 Rental properties: Operating............................... 4,931 (658) C (786) F (333) H 3,154 Depreciation and amortization........... 944 (4) C (253) F (63) H 624 Other operating expenses.................... 1,515 1,515 ----------- ----------- ----------- ---------- ------------- Total Expenses.......................... 10,163 (1,354) (1,942) (501) 6,366 ----------- ----------- ----------- ----------- ------------- Income before gain on sale of real estate...... 4,325 (605) (711) (338) 2,671 Gain on sale of real estate.................... 7,872 (6,077) E 1,795 ----------- ----------- ----------- ---------- ------------- Net income..................................... $ 12,197 $ (6,685) $ (711) (338) $ 4,466 =========== =========== =========== ========== ============= Per share: Income before gain on sale of real estate...... $ .39 $ .24 Gain on sale of real estate.................... .70 .16 ----------- ------------- Net income .................................... $ 1.09 $ .40 =========== ============= Weighted average number of common shares outstanding.......................... 11,226 11,226 =========== ============= See accompanying notes to the consolidated financial statements.
F-4 VALUE PROPERTY TRUST AND SUBSIDIARIES FORM 8-K
- ------------------------------------------------------------------------------------------------------------------- PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (In Thousands Except Per Share Data) - ------------------------------------------------------------------------------------------------------------------------------------ Pro Forma Adjustments Year ----------------------------------------------- Ended Second Third Fourth Pro Forma September 30, Quarter Quarter Quarter Amount 1996 Sales Sales Sales (As Adjusted) -------- --------- ----------- ---------- --------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenue: Rental properties: Rental income................................. $ 26,925 $ (4,312) J $ (3,908) M (1,447) P $ 17,258 Operating expense reimbursements.............. 3,557 (140) J (1,113) M (454) P 1,850 Interest and fee income on mortgage loans 2,853 558 Q 3,411 Interest on short-term investments................ 1,713 1,713 Other............................................. 18 18 -------- --------- ----------- ---------- --------- Total Revenue................................. 35,066 (4,452) (5,021) (1,343) 24,250 -------- --------- ----------- ---------- --------- Expenses: Interest.......................................... 10,489 (386) K (765) N (89) R 9,249 Rental properties: Operating..................................... 12,084 (1,525) J (1,633) M (743) P 8,183 Depreciation and amortization................. 2,347 (67) J (763) M (183) P 1,334 Other operating expenses.......................... 3,173 3,173 -------- --------- ----------- ---------- --------- Total Expenses................................ 28,093 (1,978) (3,161) (1,015) 21,939 -------- --------- ----------- ---------- --------- Net income........................................... $ 6,973 $ (2,474) L $ (1,860) O (328) S $ 2,311 ======== ========= =========== ========== ========= Net income per share................................. $ .62 $ .21 ======== ========= Weighted average number of common shares outstanding................................ 11,226 11,226 ======== ========= See accompanying notes to the consolidated financial statements.
F-5 VALUE PROPERTY TRUST AND SUBSIDIARIES FORM 8-K NOTES AND MANAGEMENT'S ASSUMPTIONS TO THE UNAUDITED PRO FORMA FINANCIAL STATEMENTS MARCH 31, 1997 AND SEPTEMBER 30, 1996 NOTE 1 - BASIS OF PRESENTATION The accompanying Pro Forma Balance Sheet as of March 31, 1997 is presented as if the real estate property sales which occurred during the third and fourth quarters of fiscal 1997, the mortgage financing and the related loan repayments had occurred on March 31, 1997. The accompanying Pro Forma Statement of Operations for the six months ended March 31, 1997 and the year ended September 30, 1996 are presented as if the real estate property sales which occurred during the second, third and fourth quarters of fiscal 1997 and the related loan repayments had occurred on October 1, 1995. In addition, the Pro Forma Statement of Operations for the year ended September 30, 1996 was prepared as if the mortgage financing had occurred on October 1, 1995 and matured on September 30, 1996. The Pro Forma Statements of Operations do not assume an increase in investment income for the periods presented. These pro forma financial statements should be read in conjunction with the historical financial statements and notes hereto as of March 31, 1997 and September 30, 1996 filed as part of the Trust's quarterly report on Form 10-Q for the quarter ended March 31, 1997 and the Trust's annual report on Form 10-K for the fiscal year ended September 30, 1996, respectively. In management's opinion, all adjustments necessary to reflect the effects of these real estate property sales by the Trust have been made. The unaudited pro forma financial statements are not necessarily indicative of the actual financial position as of March 31, 1997 or what the actual results of operations would have been assuming the real estate property sales had been consummated on October 1, 1995, nor do they represent the financial position and results of operations for future periods. NOTE 2 - ADJUSTMENTS TO THE PRO FORMA FINANCIAL STATEMENTS A) Reflects the net cash proceeds of $40.1 million received from the sale of three real estate properties with a carrying value of approximately $28.4 million as of March 31, 1997. Reflects the use of $22.1 million of the net cash proceeds from the sale of two encumbered properties during the third quarter of fiscal 1997 to prepay a portion of the Floating Rate Notes, as required under the terms of the New Indenture. Reflects the use of $6.8 million of the net proceeds from the sale of an encumbered property in the second quarter to prepay a portion of the Floating Rate Notes, which was required on April 1, 1997 under the terms of the New Indenture. B) Reflects the net cash proceeds received of $6.3 million and the mortgage financing of $6.2 million from the sale of two real estate properties with a carrying value of approximately $7.4 million as of March 31, 1997. The real estate transaction involving the mortgage financing is considered a sale under the requirements of Statement of Financial Accounting Standards Number 66 F-6 VALUE PROPERTY TRUST AND SUBSIDIARIES FORM 8-K "Accounting for Sales of Real Estate." The Trust provided a nine percent per annum, one year balloon mortgage with a 20 year term. Reflects the use of $2.6 million of the net cash proceeds from the sale of an encumbered property during the fourth quarter of fiscal 1997 to prepay a portion of the Floating Rate Notes, as required under the terms of the New Indenture. C) Reflects the reversal of revenue and expense associated with the operations of the four properties sold during the second quarter of fiscal 1997. D) Reflects the reduction in interest expense related to the two encumbered properties sold during the second quarter of fiscal 1997. E) Reflects the reversal of the gain on sale of real estate assuming the four property sales were consummated on October 1, 1995. In conjunction with the adoption of Fresh Start Reporting on September 30, 1995, all gains and losses for a period of one year after such adoption are applied against the carrying value of long lived assets held for investment. Therefore, as a result of the adoption of Fresh Start Reporting, the pro forma statement of operations does not report the gain on sale of $6.1 million in net income from the four real estate sales during the second quarter of fiscal 1997, but rather applies the $6.1 million as a reduction of the carrying value of the remaining assets held for investment. F) Reflects the reversal of revenue and expense associated with the operations of the three properties sold during the third quarter of fiscal 1997. G) Reflects the reduction in interest expense related to the two encumbered properties sold during the third quarter of fiscal 1997. H) Reflects the reversal of revenue and expense associated with the operations of the two properties sold during the fourth quarter of fiscal 1997. I) Reflects the reduction in interest expense related to an encumbered property sold during the fourth quarter of fiscal 1997. J) Reflects the reversal of revenue and expense associated with the operations of the four sold properties during the second quarter of fiscal 1997. K) Reflects the reduction in interest expense related to the two encumbered properties sold during the second quarter of fiscal 1997. L) Does not reflect the gain on sale of real estate assuming the property sales were consummated on October 1, 1995. In conjunction with the adoption of Fresh Start Reporting on September 30, 1995, all gains and losses for a period of one year after such adoption are applied against the carrying value of long lived assets held for investment. Therefore, as a result of the adoption of Fresh Start Reporting, the pro forma statement of operations does not report the gain on sale of $5.9 million in net income from the four real estate sales during the second quarter of fiscal 1997, but rather applies the $5.9 million as a reduction of the carrying value of the remaining assets held for investment. M) Reflects the reversal of revenue and expense associated with the operations of the three sold properties during the third quarter of fiscal 1997. F-7 VALUE PROPERTY TRUST AND SUBSIDIARIES FORM 8-K N) Reflects the reduction in interest expense related to the two sold encumbered properties during the third quarter of fiscal 1997. O) Does not reflect the gain on sale of real estate assuming the property sales were consummated on October 1, 1995. In conjunction with the adoption of Fresh Start Reporting on September 30, 1995, all gains and losses for a period of one year after such adoption are applied against the carrying value of long lived assets held for investment. Therefore, as a result of the adoption of Fresh Start Reporting, the pro forma statement of operations does not report the gain on sale of $11.7 million in net income from the three real estate sales during the third quarter of fiscal 1997, but rather applies the $11.7 million as a reduction of the carrying value of the remaining assets held for investment. P) Reflects the reversal of revenue and expense associated with the operations of the two sold properties during the fourth quarter of fiscal 1997. Q) Reflects the increase in interest income associated with the mortgage financing from the sale of a property during the fourth quarter of fiscal 1997. R) Reflects the reduction in interest expense related to an encumbered property sold during the fourth quarter of fiscal 1997. S) Does not reflect the gain on sale of real estate assuming the property sales were consummated on October 1, 1995. In conjunction with the adoption of Fresh Start Reporting on September 30, 1995, all gains and losses for a period of one year after such adoption are applied against the carrying value of long lived assets held for investment. Therefore, as a result of the adoption of Fresh Start Reporting, the pro forma statement of operations does not report the gain on sale of $5.1 million in net income, from the two real estate sales during the fourth quarter of fiscal 1997, but rather applies the $5.1 million as a reduction of the carrying value of the remaining assets held for investment. F-8 -----END PRIVACY-ENHANCED MESSAGE-----