-----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, OCm2Amyd6j2H8/042bip5S4OV1EZ8emHfkkNzBnHEBq0Dz5T7IMK71d8UrXEyUVq xhJhUHcP3qQQsREcvXFUJA== 0000950124-06-006329.txt : 20061101 0000950124-06-006329.hdr.sgml : 20061101 20061101153342 ACCESSION NUMBER: 0000950124-06-006329 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20061101 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061101 DATE AS OF CHANGE: 20061101 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: 061178761 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 k09613e8vk.txt CURRENT REPORT, DATED NOVEMBER 1, 2006 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: November 1, 2006 AGREE REALTY CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MARYLAND 1-12928 (State of other jurisdiction of (Commission File Number) incorporation or organization)
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 (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 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 31, 2006 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 31, 2006, the Company issued a press release describing its results of operations for the third quarter ending September 30, 2006. 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, 2005. 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: November 1, 2006 EXHIBIT INDEX
Exhibit Number Description - ------- ----------- 99.1 Press Release of Agree Realty Corporation dated October 31, 2006
EX-99.1 2 k09613exv99w1.txt PRESS RELEASE, DATED OCTOBER 31, 2006 Exhibit 99.1 FOR IMMEDIATE RELEASE CONTACT: Kenneth R. Howe, Chief Financial Officer (248) 737-4190 AGREE REALTY CORPORATION REPORTS THIRD QUARTER 2006 OPERATING RESULTS THIRD QUARTER 2006 HIGHLIGHTS: FINANCIAL INFORMATION - Diluted FFO per share of $0.59 - $0.49 per share quarterly dividend paid October 12, 2006 FARMINGTON HILLS, MI (October 31, 2006) - Agree Realty Corporation (NYSE: ADC) today announced results for the quarter ended September 30, 2006. For the third quarter, funds from operations were $4,901,000 compared with funds from operations in the third quarter of 2005 of $4,948,000. Diluted funds from operations per share were $0.59 per share compared with $0.59 per share for the third quarter of 2005. Net income was $3,406,000, or $0.44 per share on a diluted basis, compared with net income for the third quarter of 2005 of $3,454,000, or $0.45 per share. Total revenues increased 5.4% to $8,114,000, compared with total revenues of $7,697,000 in the third quarter of 2005. A reconciliation of net income to funds from operations is included in the financial table accompanying this press release. For the nine months ended September 30, 2006, funds from operations were $14,724,000 compared with funds from operations for the nine months ended September 30, 2005 of $14,741,000. Diluted funds from operations per share were $1.76 per share compared with $1.79 per share for the nine months ended September 30, 2005. Net income was $10,255,000, or $1.34 per share on a diluted basis, compared with net income for the comparable period last year of $10,274,000, or $1.36 per share. Total revenues increased 5.6% to $24,554,000, compared with total revenues of $23,257,000 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 12, 2006 to shareholders of record on September 29, 2006. 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, 2006, Agree Realty Corporation's total assets were $218,612,000 and our portfolio consisted of 60 properties totaling 3,355,234 million square feet located in 15 states. The portfolio was 99.5% leased at the end of the quarter. For the nine month and three month periods ended September 30, 2006 our fully diluted weighted average shares outstanding were 7,666,366 shares and 7,672,549 shares, respectively. At September 30, 2006 our construction in progress balance totaled approximately $3,967,000 and we capitalized $53,000 of construction period interest during the third quarter 2006. 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, 2006 --------------------------------------------- Gross Leasable Area Annualized Base Rent Number -------------------- ---------------------- Expiration of Leases Square Percent Percent Year Expiring Footage of Total Amount of Total - ---------- --------- --------- -------- ----------- -------- 2007 7 34,800 1.0% $ 303,205 1.0% 2008 28 316,925 9.5% 1,416,358 4.7% 2009 20 193,326 5.8% 964,753 3.2% 2010 20 328,035 9.8% 2,030,828 6.7% 2011 24 228,524 6.8% 1,619,555 5.4% 2012 7 41,760 1.3% 325,568 1.1% 2013 1 51,868 1.6% 492,746 1.6% 2014 3 172,958 5.2% 824,206 2.7% 2015 11 730,525 21.9% 5,075,265 16.8% 2016 5 80,945 2.4% 1,584,222 5.2% Thereafter 41 1,158,948 34.7% 15,573,051 51.6% --- --------- ----- ----------- ----- Total 167 3,338,614 100.0% $30,209,757 100.0% === ========= ===== =========== =====
ANNUALIZED BASE RENT OF OUR PROPERTIES The following is a breakdown of base rents in place at September 30, 2006 for each type of retail tenant: National $26,976,447 89% Regional 2,182,579 7% Local 1,086,731 4% ----------- --- Total $30,245,757 100% =========== ===
MAJOR TENANTS The following is a breakdown of base rents in place at September 30, 2006 for each of our Major Tenants: Borders (18) $ 9,781,436 32% Walgreen (18) 6,593,929 22% Kmart (12) 3,847,911 13% ----------- --- Total $20,223,276 67% =========== ===
OPERATING PARTNERSHIP UNITS As of September 30, 2006 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 fifteen (15) 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 Nine months ended ended September 30, September 30, --------------- ----------------- 2006 2005 2006 2005 ------ ------ ------- ------- REVENUE Minimum rents $7,453 $7,062 $22,416 $21,097 Percentage rent 14 14 41 39 Operating cost reimbursements 639 613 2,060 2,097 Other income 8 8 37 24 ------ ------ ------- ------- TOTAL REVENUE 8,114 7,697 24,554 23,257 ------ ------ ------- ------- EXPENSES Real estate taxes 450 444 1,352 1,316 Property operating expenses 389 342 1,318 1,435 Land lease payments 195 195 586 586 General and administration 1,006 912 3,079 2,665 Depreciation and amortization 1,213 1,168 3,618 3,461 Interest expense 1,157 1,029 3,449 3,057 ------ ------ ------- ------- TOTAL EXPENSES 4,410 4,090 13,402 12,520 ------ ------ ------- ------- INCOME BEFORE MINORITY INTEREST AND DISCONTINUED OPERATIONS 3,704 3,607 11,152 10,737 Minority interest expense 298 291 897 879 ------ ------ ------- ------- INCOME BEFORE DISCONTINUED OPERATIONS 3,406 3,316 10,255 9,858 Income from discontinued operations -- 138 -- 416 ------ ------ ------- ------- NET INCOME $3,406 $3,454 $10,255 $10,274 ------ ------ ------- ------- NET INCOME - PER SHARE - DILUTIVE $ .44 $ .45 $ 1.34 $ 1.36 ------ ------ ------- ------- RECONCILIATION OF FUNDS FROM OPERATIONS TO NET INCOME Net income $3,406 $3,454 $10,255 $10,274 Depreciation of real estate assets 1,185 1,185 3,540 3,521 Amortization of leasing costs 12 12 32 36 Gain on sale of assets -- (6) -- (6) Minority interest 298 303 897 916 ------ ------ ------- ------- FUNDS FROM OPERATIONS $4,901 $4,948 $14,724 $14,741 ------ ------ ------- ------- FUNDS FROM OPERATIONS - PER SHARE - DILUTIVE $ .59 $ .59 $ 1.76 $ 1.79 ------ ------ ------- ------- WEIGHTED AVERAGE NUMBER OF SHARES AND OP UNITS OUTSTANDING - DILUTIVE 8,346 8,346 8,340 8,234 ------ ------ ------- -------
AGREE REALTY CORPORATION CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) (UNAUDITED)
SEPT 30, DEC. 31 2006 2005 -------- -------- ASSETS Land $ 74,034 $ 73,035 Buildings 186,408 185,032 Accumulated depreciation (47,150) (43,772) Property under development 2,767 265 Cash and cash equivalents 164 5,715 Rents receivable 406 731 Deferred costs, net of amortization 1,180 1,241 Other Assets 803 1,213 -------- -------- TOTAL ASSETS $218,612 $223,460 -------- -------- LIABILITIES AND STOCKHOLDERS' EQUITY Mortgages payable $ 48,914 $ 50,722 Notes payable 15,650 17,500 Deferred revenue 12,276 12,794 Dividends and distributions payable 4,111 4,089 Other liabilities 1,505 1,749 -------- -------- TOTAL LIABILITIES 82,456 86,854 -------- -------- TOTAL MINORITY INTEREST 5,885 5,979 -------- -------- Common stock 1 1 Additional paid-in capital 141,066 140,343 Accumulated deficit (10,796) (9,717) -------- -------- TOTAL STOCKHOLDERS' EQUITY 130,271 130,627 -------- -------- $218,612 $223,460 ======== ========
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