-----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, IO0CFkdMTC45u2pY3A0W/c2CGMfE9Y3lNGVM3cDTKSWx6OMmdxK4IQl0LpuJUDZS aAApWtqPV4E+4AuKKrBdNw== 0000018934-98-000013.txt : 19980907 0000018934-98-000013.hdr.sgml : 19980907 ACCESSION NUMBER: 0000018934-98-000013 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980625 ITEM INFORMATION: FILED AS OF DATE: 19980904 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CV REIT INC CENTRAL INDEX KEY: 0000018934 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 590950354 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-08073 FILM NUMBER: 98704453 BUSINESS ADDRESS: STREET 1: 100 CENTURY BLVD CITY: WEST PALM BEACH STATE: FL ZIP: 33417 BUSINESS PHONE: 4076403155 MAIL ADDRESS: STREET 1: 100 CENTURY BOULEVARD CITY: WEST PALM BEACH STATE: FL ZIP: 33417 FORMER COMPANY: FORMER CONFORMED NAME: CENVILL INVESTORS INC DATE OF NAME CHANGE: 19900515 FORMER COMPANY: FORMER CONFORMED NAME: CENVILL COMMUNITIES INC DATE OF NAME CHANGE: 19810812 8-K/A 1 FORM 8-K/A DATED 6/25/98 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): June 25, 1998 CV REIT, INC. (Exact name of registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation) 1-8073 59-0950354 (Commission File No.) (I.R.S. Employer Identification No.) 100 Century Blvd. West Palm Beach, Florida 33417 (Address of principal executive offices) (561) 640-3155 Registrant's telephone number, including area code Not Applicable (Former name or former address, if changed since last report) 2 ITEM 5. OTHER EVENTS CV Reit, Inc. (the "Company") previously reported its acquisition of the Marlton Crossing Shopping Center - Phase II in the Current Report on Form 8-K filed with the Securities and Exchange Commission on July 10, 1998. The Company is filing this Current Report on Form 8-K/A to include financial statements of Marlton KDA Limited Partnership and pro forma financial information of the Company. After reasonable inquiry, the Company is not aware of any material factors relating to the Property that would cause the financial information reported herein not to be necessarily indicative of future operating results. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS The following financial statement and pro forma financial information are filed as part of this report: (a) Financial statement of real estate operations acquired, prepared pursuant to Rule 3.14 of Regulation S-X: Marlton KDA Limited Partnership: Page No. Report of Independent Certified Public Accountant 4 Statement of Revenues and Certain Expenses 5 Notes to Statement of Revenues and Certain Expenses 6 (b) Pro Forma financial information required pursuant to Article 11 of Regulation S-X: Unaudited Pro Forma Condensed Consolidated Balance Sheet - June 30, 1998* Unaudited Pro Forma Condensed Consolidated Statement of Income - Six months ended June 30, 1998 3 Unaudited Pro Forma Condensed Consolidated Statement of Income - Year ended December 31, 1997 * No Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1998 is filed since the acquisition of the Acquired Property is reflected in the actual balance sheet of CV Reit, Inc. as of June 30, 1998. (c) Exhibits: None SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CV REIT, INC. /s/ ELAINE HAUFF ___________________________ Elaine Hauff, Vice President Date: September 4, 1998 4 FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS MARLTON KDA LIMITED PARTNERSHIP (A Limited Partnership) December 31, 1997 5 Report of Independent Certified Public Accountants Partners Marlton KDA Limited Partnership We have audited the accompanying statement of revenues and certain expenses of Marlton KDA Limited Partnership (a limited partnership) for the year ended December 31, 1997. The financial statement is the responsibility of the Partnership's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenues and certain expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenues and certain expenses. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the statement of revenues and certain expenses. We believe that our audit provides a reasonable basis for our opinion. The accompanying statement of revenues and certain expenses was prepared for the purposes of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Current Report on Form 8-K of CV Reit, Inc. and excludes certain material amounts, as described in Note B, that would not be comparable to those resulting from the proposed future operations of the property. In our opinion, the statement of revenues and certain expenses referred to above presents fairly, in all material respects, the revenues and certain expenses of Marlton KDA Limited Partnership for the year ended December 31, 1997, in conformity with generally accepted accounting principles. Philadelphia, Pennsylvania August 10, 1998 6 Marlton KDA Limited Partnership (A Limited Partnership) STATEMENT OF REVENUES AND CERTAIN EXPENSES Year ended December 31, 1997 REVENUES Base rents $ 1,107,606 Tenant reimbursements 305,458 Percentage rent 8,571 Other 3,540 ----------- 1,425,175 ----------- CERTAIN EXPENSES General operating 165,683 Real estate taxes 262,814 Repairs and maintenance 120,961 Utilities 28,035 ----------- 577,493 ----------- REVENUES IN EXCESS OF CERTAIN EXPENSES $ 847,682 =========== The accompanying notes are an integral part of this statement. 7 Marlton KDA Limited Partnership (A Limited Partnership) NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES December 31, 1997 NOTE A - ORGANIZATION Marlton KDA Limited Partnership (the Partnership), a New Jersey limited partnership, owns and operates Marlton Crossing Shopping Center - Phase II (the Shopping Center) in Burlington County, New Jersey. The shopping center consists of various retail shops with approximately 142,000 square feet of rentable space. The Partnership's activities consist of the operation of the shopping center and the leasing of retail stores to various tenants. Tenant reimbursements represent property operating expenses billed to tenants, including common area maintenance, real estate taxes and other recoverable costs. Tenant reimbursements are recognized in the period the expenses are incurred. All leases are classified as operating leases and expire at various times thorough 2005. NOTE B - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1. Basis of Presentation Marlton Plaza Associates, L.P., a Delaware limited partnership, purchased the Shopping Center on June 25, 1998. CV Reit, Inc. (the Registrant) has an indirect ownership interest in the shopping center through Montgomery CV Realty Trust (the Trust), a Delaware business trust of which the Registrant is the 100% beneficial owner. The Trust holds the general partner interest in, and approximately 82% of the limited partner interest in, Montgomery CV Realty, L.P. (the Operating Partnership). The Operating Partnership is the sole member of Marlton Plaza LLC, a Delaware limited liability company which is the sole general partner of Marlton Plaza Associates, L.P. The statement of revenues and certain expenses has been prepared for the purpose of complying with Regulation S-X, Rule 3-14 of the Securities and Exchange Commission (SEC), which requires certain information with respect to real estate operations be included with certain filings with the SEC. The statement of revenues and expenses includes the historical revenues and expenses of the shopping center, exclusive of certain items of expenses which are not comparable to the proposed future operations of the shopping center, such as interest, depreciation, amortization, and certain legal and accounting expenses. Upon the purchase of the shopping center, Marlton Plaza Associates, L.P. began operating the shopping center under its policies and procedures. 8 2. Revenue Recognition Lease revenue is recognized over the lease term on a straight-line basis as it is earned. Revenue from reimbursements by tenants of costs incurred on their behalf is recognized when the expenses are incurred. These expenses include property taxes, common area maintenance costs, and other recoverable costs. 3. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. NOTE C - LEASING ACTIVITIES The Partnership leases space to tenants under operating leases. Leases generally provide for minimum rents, as well as reimbursement of the lessor for certain operating expenses and real estate taxes. The approximate minimum future rentals on the existing long-term noncancellable operating leases, excluding tenant reimbursements of operating expenses, as of December 31, 1997, are as follows: 1998 $ 1,052,000 1999 1,045,000 2000 1,016,000 2001 918,000 2002 619,000 Thereafter 1,252,000 ----------- $ 5,902,000 =========== During 1997, one tenant accounted for approximately 49% of total base rental revenue. NOTE D - RELATED PARTY TRANSACTIONS The Partnership employs the use of Drexel Realty, Inc., which is indirectly owned by the Operating Partnership, as its rent collection agent. A 5% management fee on rent collected is paid to the parent company. Total management fee paid in 1997 was approximately $74,000, which is included in general operating expenses on the statement of revenues and certain expenses. 9 CV REIT, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME On June 25, 1998, Montgomery CV Realty L.P. (the "Operating Partnership") (indirectly 81.7% owned by CV Reit, Inc.) indirectly acquired 100% of the Marlton Crossing Shopping Center - - Phase II (the "Acquired Property"), an approximately 141,795 square foot retail shopping center located in New Jersey, from Marlton KDA Limited Partnership (the "Seller"). The purchase price amounted to $12,544,000, including transaction costs, consisting of $3,206,000 paid in cash and $9,338,000 of liabilities incurred, principally mortgage indebtedness. The cash was principally borrowed under the Company's $100 million line of credit. The acquisition was accounted for as a purchase, with assets acquired and liabilities incurred recorded at fair value, effective June 25, 1998. Operating results of the Acquired Property have been included in the Company's consolidated financial statements, effective June 25, 1998. The following Unaudited Pro Forma Condensed Consolidated Statements of Income for the six months ended June 30, 1998 and the year ended December 31, 1997 (the "Pro Forma Financial Information") are derived from, and should be read in conjunction with, the Company's historical Statements of Income for the six months ended June 30, 1998 and the year ended December 31, 1997, respectively, as presented in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 and Annual Report on Form 10-K for the year ended December 31, 1997. It should also be read in conjunction with the Seller's historical Statement of Revenues and Certain Expenses for the year ended December 31, 1997, included elsewhere herein. The Pro Forma Financial Information for the six months ended June 30, 1998 and year ended December 31, 1997 gives effect to the acquisition as if it had occurred as of January 1, 1997. The pro forma adjustments are based on certain estimates and currently available information. Such adjustments could change as additional information becomes available, as estimates are refined or as additional events occur. The Pro Forma Financial Information does not purport to be indicative of the results of operations which would have actually been reported had the acquisition been consummated on January 1, 1997, or which may be reported in the future. 10 CV REIT, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (dollars in thousands, except per share data) Historical ------------------- CV Reit, Acquired Pro-Forma Inc. Property Consolidated Six January 1, Six Months 1998 Months Ended Through Ended June 30, June 24, Pro-Forma June 30, 1998 1998 Adjustments 1998 --------- --------- ----------- ------------ REVENUES: Interest, substantially from mortgage notes $ 4,704 $ - $ - $ 4,704 Rent 6,537 754 - 7,291 ------- ------- ------ ------- 11,241 754 - 11,995 ------- ------- ------ ------- EXPENSES: Interest 3,318 - 454 (1) 3,772 Operating 1,974 262 - 2,236 General and administrative 718 - - 718 Depreciation and amortization 1,029 - 135 (2) 1,164 ------- ------- ------ ------- 7,039 262 589 7,890 ------- ------- ------ ------- 4,202 492 (589) 4,105 Equity in income of uncon- solidated affiliates 253 - - 253 Gain on sale of real estate 2,347 - - 2,347 Minority interests in income of Operating Partnership (1,245) - 18 (3) (1,227) ------- ------- ------ ------- Net income $ 5,557 $ 492 ($ 571) $ 5,478 ======= ======= ====== ======= Net income per common share, basic and diluted $ .70 $ .69 ======= ======= Average common shares outstanding, Basic 7,966,621 7,966,621 ========= ========= Diluted 7,969,844 7,969,844 ========= ========= 11 CV REIT, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (dollars in thousands, except per share data) YEAR ENDED DECEMBER 31, 1997 Historical ------------------- CV Reit, Acquired Pro-Forma Pro-Forma Inc. Property Adjustments Consolidated --------- -------- ----------- ------------ REVENUES: Interest, substantially from mortgage notes $10,612 $ - $ - $10,612 Rent 2,703 1,425 - 4,128 ------- ------- ------ ------- 13,315 1,425 - 14,740 ------- ------- ------ ------- EXPENSES: Interest 3,306 - 939 (1) 4,245 Operating 870 577 - 1,447 General and administrative 654 - - 654 Depreciation and amortization 409 - 280 (2) 689 ------- ------- ------ ------- 5,239 577 1,219 7,035 ------- ------- ------ ------- 8,076 848 (1,219) 7,705 Equity in income of uncon- solidated affiliates 439 - - 439 Minority interests in income of Operating Partnership - - 68 (3) 68 ------- ------- ------ ------- Net income $ 8,515 $ 848 ($1,151) $ 8,212 ======= ======= ====== ======= Net income per common share, basic and diluted $ 1.07 $ 1.03 ======= ======= Average common shares outstanding, basic and diluted 7,966,621 7,966,621 ========= ========= 12 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME PRO FORMA ADJUSTMENTS The following pro forma adjustments for the six months ended June 30, 1998 and the year ended December 31, 1997 assume that the Acquired Property was purchased on January 1, 1997: (1) Represents additional interest expense, at 7.41% per annum, on approximately $12.5 million mortgage indebtedness incurred as a result of the acquisition. (2) Represents additional depreciation expense resulting from allocating 10% of the fair value of the Acquired Property to land and depreciating the balance (90%) on a straight-line basis over 40 years. (3) Reflects earnings attributable to minority interests. -----END PRIVACY-ENHANCED MESSAGE-----