-----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, JCN+mthQxcaD1bZt5K36yxTaTcFQx4BvHpccURMbnvNHsBLTIg6Vo+az3bTnZB4D cMOiE22KJbTh42bNMRFm6A== 0000950124-05-005990.txt : 20051028 0000950124-05-005990.hdr.sgml : 20051028 20051028121843 ACCESSION NUMBER: 0000950124-05-005990 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051028 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051028 DATE AS OF CHANGE: 20051028 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AGREE REALTY CORP CENTRAL INDEX KEY: 0000917251 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 383148187 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12928 FILM NUMBER: 051162185 BUSINESS ADDRESS: STREET 1: 31850 NORTHWESTERN HGWY CITY: FARMINGTON HILLS STATE: MI ZIP: 48334 BUSINESS PHONE: 8107374190 MAIL ADDRESS: STREET 1: 31850 NORTHWESTERN HIGHWAY CITY: FARMINGTON HILLS STATE: MI ZIP: 48334 8-K 1 k99479e8vk.txt CURRENT REPORT, DATED OCTOBER 28, 2005 UNITED STATES 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: October 28, 2005 AGREE REALTY CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MARYLAND (State of other jurisdiction of (Commission File Number) incorporation or organization) 1-12928 ------- 31850 Northwestern Highway 38-3148187 Farmington Hills, MI 48334 (I.R.S. Employer (Address of principal executive offices) identification No.) (Registrant's telephone number, including area code) (248) 737-4190 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2 (b)) [ ] Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4 (c)) - -------------------------------------------------------------------------------- ITEM 9.01. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits Exhibit 99.1 - Press Release issued by Agree Realty Corporation, dated October 28, 2005 ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION The information under this caption is furnished by Agree Realty Corporation (the "Company") in accordance with Securities Exchange Commission Release No. 33-8216. This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. On October 28, 2005, the Company issued a press release describing its results of operations for the third quarter ended September 30, 2005. A copy of the press release is attached as Exhibit 99.1 to this report. In the earnings release, the Company used the non-GAAP financial measure of Funds from Operations ("FFO"). A reconciliation of FFO to the comparable GAAP financial measure (Net Income) is contained in the attached earnings release. Disclosure regarding the definition of FFO used by the Company and why the Company's management believes the presentation of FFO provides useful information to investors is included in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2004. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused the report to be signed on its behalf by the undersigned, thereunto duly authorized. AGREE REALTY CORPORATION /s/ Kenneth R. Howe --------------------------------------- Vice President, Finance, Chief Financial Officer DATED: October 28, 2005 EXHIBIT INDEX
Exhibit Number Description - -------------- ----------- 99.1 Press Release of Agree Realty Corporation dated October 28, 2005
EX-99.1 2 k99479exv99w1.txt PRESS RELEASE, DATED OCTOBER 28, 2005 PRESS RELEASE - FOR IMMEDIATE RELEASE CONTACT: Kenneth R. Howe, Chief Financial Officer (248) 737-4190 AGREE REALTY CORPORATION REPORTS THIRD QUARTER 2005 OPERATING RESULTS - -------------------------------------------------------------------------------- THIRD QUARTER 2005 HIGHLIGHTS: FINANCIAL INFORMATION o Diluted FFO per share of $0.59 o $0.49 per share quarterly dividend paid October 13, 2005 FARMINGTON HILLS, MI (October 28, 2005) - Agree Realty Corporation (NYSE: ADC) today announced results for the quarter ended September 30, 2005. For the third quarter, funds from operations increased 2.6% to $4,948,000 compared with funds from operations in the third quarter of 2004 of $4,824,000. Diluted funds from operations per share were $0.59 per share compared with $0.67 per share for the third quarter of 2004. Net income was $3,454,000, or $0.45 per share on a diluted basis, compared with net income for the third quarter of 2004 of $3,895,000, or $0.60 per share. Total revenues increased 4.3% to $7,696,000, compared with total revenues of $7,380,000 in the third quarter of 2004. A reconciliation of net income to FFO is included in the financial table accompanying this press release. For the nine months ended September 30, 2005, funds from operations increased 8.8% to $14,741,000 compared with funds from operations for the nine months ended September 30, 2004 of $13,545,000. Diluted funds from operations per share were $1.79 per share compared with $1.90 per share for the nine months ended September 30, 2004. Net income was $10,274,000, or $1.36 per share on a diluted basis, compared with net income for the comparable period last year of $9,848,000, or $1.52 per share. Total revenues increased 8.3% to $23,256,000, compared with total rental revenues of $21,471,000 for the comparable period last year. FUNDS FROM OPERATIONS Management considers Funds from Operations (FFO) to be a useful supplemental measure to evaluate operating performance. The Company considers FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions and excluding depreciation, FFO can help one compare the operating performance of a company's real estate between periods or as compared to different companies. FFO is defined by the National Association of Real Estate Investment Trusts, Inc. (NAREIT) to mean net income computed in accordance with generally accepted accounting principles (GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization. FFO should not be considered as an alternative to net income as the primary indicator of the Company's operating performance or as an alternative to cash flow as a measure of liquidity. In addition, our method of calculating FFO may not be comparable to the methods used by other REITs and, accordingly may be different from similarly titled measures reported by other companies. DIVIDEND We paid a cash dividend of $0.49 per share on October 13, 2005 to shareholders of record on September 30, 2005. The dividend is equivalent to an annualized dividend of $1.96 per share and represents a payout ratio of 83.1% of funds from operations for the quarter. PORTFOLIO RESULTS At September 30, 2005, Agree Realty Corporation's total assets were $215,730,000. At quarter end our portfolio consisted of 56 properties totaling 3,492,491 million square feet located in 14 states. The portfolio was 98.7% leased at the end of the quarter. On August 22, 2005 we completed the development of a retail property in Grand Rapids, Michigan. The property is leased to Walgreen Co. At September 30, 2005 our construction in progress balance totaled approximately $5.7 million and we capitalized $118,000 of construction period interest during the third quarter 2005. LEASE EXPIRATIONS The following table shows lease expirations for the next 10 years for our freestanding properties and community shopping centers, assuming that none of the tenants exercise renewal options.
September 30, 2005 ------------------ Gross Leasable Area Annualized Base Rent ------------------- -------------------- Number Expiration of Leases Square Percent Percent Year Expiring Footage of Total Amount of Total - ---------- -------- ------- -------- ------ -------- 2006 30 107,247 3.07 $ 690,023 2.36 2007 15 80,630 2.31 597,559 2.04 2008 29 325,995 9.33 1,449,333 4.96 2009 12 172,990 4.95 818,531 2.80 2010 17 301,885 8.64 1,801,840 6.16 2011 16 248,322 7.11 1,625,235 5.56 2012 - - - - - 2013 1 51,868 1.49 492,746 1.69 2014 3 172,958 4.95 824,206 2.82 2015 12 821,632 23.53 5,267,493 18.03 --- --------- ----- ----------- ----- Total 135 2,283,527 65.38% $13,566,966 46.42% --- --------- ----- ----------- -----
ANNUALIZED BASE RENT OF OUR PROPERTIES The following is a breakdown of base rents in place at September 30, 2005 for each type of retail tenant: National $26,094,131 89.28% Regional 1,988,446 6.80 Local 1,144,709 3.92 ----------- ------ Total $29,227,286 100.00% ----------- ------
MAJOR TENANTS The following is a breakdown of base rents in place at September 30, 2005 for each of our Major Tenants: Borders $ 9,543,489 32.65% Walgreen 5,936,999 20.31 Kmart 4,213,717 14.42 ----------- ----- Total $19,694,205 67.38% ----------- -----
OPERATING PARTNERSHIP UNITS As of September 30, 2005 there were 673,547 operating partnership units outstanding. Agree Realty Corporation owns, manages and develops properties which are primarily single tenant properties and neighborhood community shopping centers, located in fourteen (14) states and leased to major retail tenants. Agree Realty Corporation considers portions of the information contained in this release to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 27E of the Securities Exchange Act of 1934, both as amended, with respect to the Company's expectation for future periods. Such statements are, by their nature, subject to certain risks and uncertainties. The Company cautions that, as a result of a number of factors, actual results could differ materially from those set forth in this presentation. Other risks, uncertainties and factors that could cause actual results to differ materially than those projected are detailed from time to time in reports filed by the Company with the Securities and Exchange Commission, including Forms 8-K, 10-Q and 10-K. For additional information, visit the Company's home page on the Internet at http://www.agreerealty.com AGREE REALTY CORPORATION OPERATING RESULTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
Three months ended Nine months ended September 30, September 30, ----------------------------------------------------------- 2005 2004 2005 2004 --------------------------------------------------- REVENUE Minimum rents $ 7,062 $ 6,740 $ 21,097 $ 19,153 Percentage rent 14 (12) 39 22 Operating cost reimbursements 613 599 2,097 2,047 Unconsolidated entities - 23 - 217 Other income 7 30 23 32 - ------------------------------------------------------------------------------------------------------------------- TOTAL REVENUE 7,696 7,380 23,256 21,471 - ------------------------------------------------------------------------------------------------------------------- EXPENSES Real estate taxes 444 425 1,316 1,295 Property operating expenses 342 349 1,434 1,352 Land lease payments 195 180 586 541 General and administration 911 687 2,665 1,983 Depreciation and amortization 1,168 1,060 3,461 3,107 Interest expense 1,029 1,076 3,057 3,339 - ------------------------------------------------------------------------------------------------------------------- TOTAL EXPENSES 4,089 3,777 12,519 11,617 - ------------------------------------------------------------------------------------------------------------------- INCOME BEFORE MINORITY INTEREST AND DISCONTINUED OPERATIONS 3,607 3,603 10,737 9,854 Minority interest expense 291 340 879 929 - ------------------------------------------------------------------------------------------------------------------- INCOME BEFORE DISCONTINUED OPERATIONS 3,316 3,263 9,858 8,925 Gain on sale of asset from discontinued operations - 523 - 523 Income from discontinued operations 138 109 416 400 - ------------------------------------------------------------------------------------------------------------------- NET INCOME $ 3,454 $ 3,895 $ 10,274 $ 9,848 - ------------------------------------------------------------------------------------------------------------------- NET INCOME - PER SHARE $ .45 $ .60 $ 1.36 $ 1.52 - ------------------------------------------------------------------------------------------------------------------- RECONCILIATION OF FUNDS FROM OPERATIONS TO NET INCOME Net income $ 3,454 $ 3,895 $ 10,274 $ 9,848 Depreciation of real estate assets 1,185 1,089 3,521 3,215 Amortization of leasing costs 12 12 36 34 Gain on sale of assets (6) (577) (6) (577) Minority interest 303 405 916 1,025 - ------------------------------------------------------------------------------------------------------------------- FUNDS FROM OPERATIONS $ 4,948 $ 4,824 $ 14,741 $ 13,545 - ------------------------------------------------------------------------------------------------------------------- FUNDS FROM OPERATIONS - PER SHARE $ .59 $ .67 $ 1.79 $ 1.90 - ------------------------------------------------------------------------------------------------------------------- WEIGHTED AVERAGE NUMBER OF SHARES AND "OP" UNITS OUTSTANDING 8,346 7,148 8,234 7,147 - -------------------------------------------------------------------------------------------------------------------
AGREE REALTY CORPORATION CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) (UNAUDITED)
SEPT 30, DEC 31 2005 2004 ------------------------ ASSETS Land $ 69,114 $ 69,914 Buildings 178,136 173,089 Accumulated depreciation (42,579) (39,252) Operating property held for sale 5,578 5,709 Property under development 2,447 2,105 Cash and cash equivalents 190 587 Rents receivable 152 627 Deferred costs, net of amortization 1,291 1,261 Other Assets 1,401 1,662 - ---------------------------------------------------------------------------- TOTAL ASSETS $ 215,730 $ 215,702 - ---------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Mortgages payable $ 52,151 $ 53,809 Notes payable 11,200 39,200 Deferred revenue 12,966 13,483 Dividends and distributions payable 4,088 3.509 Other liabilities 1,077 2,194 - ---------------------------------------------------------------------------- TOTAL LIABILITIES 81,482 112,195 - ---------------------------------------------------------------------------- TOTAL MINORITY INTEREST 5,800 5,875 - ---------------------------------------------------------------------------- Common stock 1 1 Additional paid-in capital 142,091 109,600 Accumulated deficit (11,731) (10,727) Unearned compensation (1,913) (1,242) - ---------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY 128,448 97,632 - ---------------------------------------------------------------------------- $ 215,730 $ 215,702 - ----------------------------------------------------------------------------
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