-----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, BQF9fwWwH7kcnVEbw4hSXCzG0/YMxby1P8K+p3wVlhyFsxjVKOESEu1PuYt+CHPv Rl9Z2lXMOUh3O5NE6h+NFA== 0000950144-96-000612.txt : 19960222 0000950144-96-000612.hdr.sgml : 19960222 ACCESSION NUMBER: 0000950144-96-000612 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960220 SROS: CSX SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IRT PROPERTY CO CENTRAL INDEX KEY: 0000311099 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 581366611 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 001-07859 FILM NUMBER: 96523451 BUSINESS ADDRESS: STREET 1: 200 GALLERIA PKWY STE 1400 CITY: ATLANTA STATE: GA ZIP: 30339 BUSINESS PHONE: 7709554406 MAIL ADDRESS: STREET 1: 200 GALLERIA PKWY STREET 2: STE 1400 CITY: ATLANTA STATE: GA ZIP: 30339 10-K405/A 1 IRT PROPERTY 10-K405 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A AMENDMENT NO. 1 (X) ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 1995 --------------------------- OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From to ---------- ---------- Commission File Number 1-7859 - -------------------------------------------------------------------------- IRT PROPERTY COMPANY - -------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Georgia 58-1366611 - --------------------------------------- --------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 200 Galleria Parkway, Suite 1400 Atlanta, Georgia 30339 - ---------------------------------------- -------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (770) 955-4406 --------------- Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered ------------------- ------------------------ Shares of Common Stock New York Stock Exchange $1 Par Value Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X ---- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Based upon the assumption that directors and executive officers of the registrant are not affiliates of the registrant, the aggregate market value of the voting stock of the registrant held by nonaffiliates of the registrant at February 9, 1996 was $237,658,363. Presuming that such directors and executive officers are affiliates of the registrant, the aggregate market value of the voting stock of the registrant held by nonaffiliates of the registrant at February 9, 1996 was $234,063,374. 25,692,796 shares of Common Stock, $1 Par Value, outstanding at February 9, 1996. DOCUMENTS INCORPORATED BY REFERENCE The information called for by Part III (Items 10, 11, 12 and 13) is incorporated by reference to the registrant's definitive proxy statement to be filed pursuant to Regulation 14A. 2 Amendment No. 1 The undersigned registrant hereby amends Items 8 and 14 of its Form 10-K for the fiscal year ended December 31, 1995. 3 Item 8. Financial Statements and Supplementary Data. IRT PROPERTY COMPANY INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page ------ Report of Independent Public Accountants 3 Consolidated Balance Sheets - December 31, 1995 and 1994 4 Consolidated Statements of Earnings - For the Years Ended December 31, 1995, 1994 and 1993 5 Consolidated Statements of Changes in Shareholders' Equity - For the Years Ended December 31, 1995, 1994 and 1993 6 Consolidated Statements of Cash Flows - For the Years Ended December 31, 1995, 1994 and 1993 7 Notes to Consolidated Financial Statements - December 31, 1995, 1994 and 1993 9 Schedules: Schedule Number - -------- III Real Estate and Accumulated Depreciation 27 IV Mortgage Loans on Real Estate 39
2 4 Report of Independent Public Accountants To The Shareholders of IRT Property Company: We have audited the accompanying consolidated balance sheets of IRT PROPERTY COMPANY (a Georgia corporation) and subsidiaries as of December 31, 1995 and 1994, and the related consolidated statements of earnings, changes in shareholders' equity, and cash flows for each of the three years in the period ended December 31, 1995. These financial statements and the schedules referred to below are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of IRT Property Company and subsidiaries as of December 31, 1995 and 1994, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1995, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed in the index to consolidated financial statements are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP Atlanta, Georgia January 23, 1996 3 5 IRT PROPERTY COMPANY CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1995 AND 1994
1995 1994 ------------- ------------ ASSETS Real estate investments: Rental properties $452,508,601 $442,642,705 Accumulated depreciation (51,600,890) (41,677,722) ------------ ------------ 400,907,711 400,964,983 Net investment in direct financing leases 9,097,717 9,295,880 Mortgage loans, net 8,499,210 8,292,143 ------------ ------------ Net real estate investments 418,504,638 418,553,006 Cash and cash equivalents 16,400 1,841,388 Accrued interest receivable 544,073 544,712 Prepaid expenses and other assets 8,332,907 7,640,249 ------------ ------------ $427,398,018 $428,579,355 ============ ============ LIABILITIES & SHAREHOLDERS' EQUITY Liabilities: Mortgage notes payable plus net interest premium of $78,657 in 1995 and $92,683 in 1994 $ 99,188,181 $105,107,084 7.3% convertible subordinated debentures due August 15, 2003 84,905,000 86,250,000 Indebtedness to banks 36,000,000 26,000,000 Accrued interest on debentures 2,341,488 2,378,583 Accrued expenses and other liabilities 5,265,202 4,726,224 Deferred income taxes 1,068,000 1,079,000 ------------ ------------ Total liabilities 228,767,871 225,540,891 ------------ ------------ Commitments and Contingencies (Notes 15 and 16) Shareholders' Equity: Common stock, $1 par value, 75,000,000 shares authorized; 25,689,002 shares issued and outstanding in 1995 and 25,420,747 25,689,002 25,420,747 shares in 1994 200,318,168 197,937,465 Additional paid-in capital (27,377,023) (20,319,748) ------------ ------------ Cumulative distributions in excess of net earnings 198,630,147 203,038,464 ------------ ------------ Total shareholders' equity $427,398,018 $428,579,355 ============ ============
The accompanying notes are an integral part of these consolidated balance sheets. 4 6 IRT PROPERTY COMPANY CONSOLIDATED STATEMENTS OF EARNINGS FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993 ---- ---- ---- Revenues: Income from rental properties $58,008,386 $44,681,220 $41,607,391 Interest, including $2,388,308 in 1994 and $846,938 in 1993 on cash equivalents 899,454 3,267,486 2,257,405 Interest on direct financing leases 1,288,407 1,253,438 1,198,115 ----------- ----------- ----------- 60,196,247 49,202,144 45,062,911 ----------- ----------- ----------- Expenses: Operating expenses of rental properties 12,733,705 10,318,596 10,022,610 Interest on mortgages 9,150,400 8,191,240 10,269,423 Interest on debentures 6,210,062 6,202,025 2,438,114 Interest on indebtedness to banks 2,211,980 159,603 384,687 Depreciation 10,427,268 8,214,192 7,668,797 Amortization of debt costs 445,907 446,454 212,421 General & administrative 3,466,899 2,881,111 2,294,594 ----------- ----------- ----------- 44,646,221 36,413,221 33,290,646 ----------- ----------- ----------- Earnings before gain (loss) on real estate investments and extraordinary item 15,550,026 12,788,923 11,772,265 ----------- ----------- ----------- Gain (loss) on real estate investments: Gain on sales of properties 173,025 300,036 4,556,511 Valuation loss - (4,125,454) - ----------- ----------- ----------- 173,025 (3,825,418) 4,556,511 ----------- ----------- ----------- Earnings before extraordinary item 15,723,051 8,963,505 16,328,776 Extraordinary item - Gain (loss) on extinguishment of debt (137,260) 3,748,095 (1,440,478) ----------- ----------- ----------- Net earnings $15,585,791 $12,711,600 $14,888,298 =========== =========== =========== Per Share: Earnings before extraordinary item $ 0.61 $ 0.35 $ 0.72 Extraordinary item - 0.15 (0.06) ----------- ----------- ----------- Net earnings $ 0.61 $ 0.50 $ 0.66 =========== =========== =========== Weighted average number of shares outstanding 25,590,129 25,349,303 22,457,131 =========== =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. 5 7 IRT PROPERTY COMPANY CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
Cumulative Additional Distributions Total Common Paid-In in Excess of Shareholders' Stock Capital Net Earnings Equity ------ ---------- ------------- ------------- Balance at December 31, 1992 $21,016,570 $155,618,551 $ (8,061,119) $168,574,002 Net earnings - - 14,888,298 14,888,298 Cash dividends declared - $.84 per share - - (18,573,786) (18,573,786) Issuance of shares under Dividend Reinvestment Plan, net 109,807 1,138,821 - 1,248,628 Exercise of Incentive Stock Options 5,689 30,891 - 36,580 Issuance of shares for the acquisition of properties 28,978 350,997 - 379,975 Issuance of common stock, net 4,127,580 39,653,890 - 43,781,470 ----------- ------------ ------------ ------------ Balance at December 31, 1993 25,288,624 196,793,150 (11,746,607) 210,335,167 Net earnings - - 12,711,600 12,711,600 Cash dividends declared - $.84 per share - - (21,284,741) (21,284,741) Issuance of shares under Dividend Reinvestment Plan, net 99,477 838,273 - 937,750 Exercise of Incentive Stock Options 1,010 2,131 - 3,141 Issuance of shares for the acquisition of properties 31,636 303,911 - 335,547 ----------- ------------ ------------ ------------ Balance at December 31, 1994 25,420,747 197,937,465 (20,319,748) 203,038,464 Net earnings - - 15,585,791 15,585,791 Cash dividends declared - $.885 per share - - (22,643,066) (22,643,066) Issuance of shares under Dividend Reinvestment Plan, net 121,831 985,430 - 1,107,261 Conversion of debentures, net 119,554 1,175,718 - 1,295,272 Exercise of Incentive Stock Options 7,000 46,375 - 53,375 Issuance of shares for the acquisition of properties 19,870 173,180 - 193,050 ----------- ------------ ------------ ------------ Balance at December 31, 1995 $25,689,002 $200,318,168 $(27,377,023) $198,630,147 =========== ============ ============ ============
The accompanying notes are an integral part of these consolidated financial statements. 6 8 IRT PROPERTY COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993 ---- ---- ---- Cash flows from operating activities: Net earnings $ 15,585,791 $12,711,600 $14,888,298 Adjustments to reconcile net earnings to net cash flows from operating activities: Depreciation 10,427,268 8,214,192 7,668,797 Loss (gain) on real estate investments (173,025) 3,825,418 (4,556,511) Extraordinary loss (gain) 137,260 (3,748,095) 1,440,478 Amortization of debt costs 445,907 446,454 212,421 Amortization of capitalized leasing income 198,163 166,019 172,418 ------------ ------------- ------------ 26,621,364 21,615,588 19,825,901 Changes in accrued assets and liabilities: Increase (decrease) in accrued interest on debentures - 7.3% interest payable (37,095) 262,343 2,084,302 2.0% interest payable - - (9,550) Accrued premium on 2.0% debentures - - (2,291,542) Increase in interest receivable, prepaid expenses and other assets (1,187,639) (592,782) (785,054) Increase in accrued expenses and other liabilities 550,357 1,226,582 292,085 ------------ ------------- ----------- Net cash flows from operating activities 25,946,987 22,511,731 19,116,142 ------------ ------------- ----------- Cash flows from (used in) investing activities: Proceeds from sales of properties, net 1,310,531 562,070 7,779,046 Additions to real estate investments, net - Acquisitions, expansions and renovations (7,672,184) (98,461,982) (27,697,142) Improvements (1,200,302) (1,253,360) (1,208,045) Collections of mortgage loans, net 52,933 100,816 4,135,583 Additions to mortgage loans (260,000) - - ------------ ------------- ----------- Net cash flows used in investing activities (7,769,022) (99,052,456) (16,990,558) ------------ ------------- ----------- Cash flows from (used in) financing activities: Cash dividends paid, net of dividends reinvested (21,535,805) (20,346,991) (17,325,158) Issuance of common stock, net - - 43,781,470 Cash in lieu of fractional shares on - - conversion of debentures (15) Exercise of Incentive Stock Options, net 53,375 3,141 36,580 Issuance of 7.3% convertible subordinated debentures, net - - 82,548,826 Redemption of 2.0% convertible subordinated debentures - - (5,730,000) Principal amortization of mortgage notes payable, net (1,546,572) (1,273,737) (1,484,658) Repayment of mortgage notes payable, net (6,836,676) (8,378,095) (22,815,915) Increase (decrease) in bank indebtedness, net 10,000,000 26,000,000 (1,200,100) Extraordinary item - Gain (loss) on extinguishment of debt (137,260) 3,748,095 (1,440,478) ------------ ------------- ----------- Net cash flows from (used in) financing activities (20,002,953) (247,587) 76,370,567 ------------ ------------- ----------- Net increase (decrease) in cash and cash equivalents (1,824,988) (76,788,312) 78,496,151 Cash and cash equivalents at beginning of year 1,841,388 78,629,700 133,549 ------------ ------------- ----------- Cash and cash equivalents at end of year $ 16,400 $ 1,841,388 $78,629,700 ============ ============= ===========
The accompanying notes are an integral part of these consolidated financial statements. 7 9 IRT PROPERTY COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993 ---- ---- ---- Supplemental disclosures of cash flow information: Cash paid during the year for interest related to: Mortgage notes payable $ 9,207,974 $ 8,082,615 $10,428,907 Convertible subordinated debentures - 7.3% interest, net of $94,225 capitalized in 1994 6,247,157 6,033,906 - 2.0% interest - - 57,404 Premiums on 2.0% debentures - - 2,578,500 Indebtedness to banks, net of $93,591 capitalized in 1995 2,449,034 153,941 457,816 ----------- ------------ ----------- Total cash paid during the year for interest $17,904,165 $ 14,270,462 $13,522,627 =========== ============ =========== Supplemental schedule of noncash investing and financing activities: Acquisitions, expansions and renovations: Cost of acquisitions, expansions and renovations $10,329,579 $114,677,940 $35,877,117 Additions to mortgage notes payable - Assumed (2,464,345) (15,880,411) (7,800,000) Acquired - - - Issuance of common stock (193,050) (335,547) (379,975) ----------- ------------ ----------- Cash paid for acquisitions, expansions and renovations of real estate investments $ 7,672,184 $ 98,461,982 $27,697,142 =========== ============ =========== Dispositions: Fair values of assets sold $ 1,310,531 $ 562,070 $ 7,779,046 Repayment of mortgage notes payable - - - ----------- ------------ ----------- Proceeds from sales of properties, net $ 1,310,531 $ 562,070 $ 7,779,046 =========== ============ =========== Conversion of debentures: Debentures converted $ 1,345,000 $ - $ - Associated unamortized debenture costs (49,713) - - Equity issued on conversion (1,295,272) - - ----------- ------------ ----------- Cash paid in lieu of fractional shares $ 15 $ - $ - =========== ============ ===========
The accompanying notes are an integral part of these consolidated financial statements. 8 10 IRT PROPERTY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1995, 1994 and 1993 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Consolidation- The accompanying consolidated financial statements include the accounts of IRT Property Company and its wholly-owned subsidiaries, IRT Management Company and VW Mall, Inc., (collectively, the "Company"). Intercompany transactions and balances have been eliminated in consolidation. Business - IRT Property Company, founded in 1969, is a self-administered and self-managed equity real estate investment trust which invests primarily in neighborhood and community shopping centers which are located in the Southeastern United States and are anchored by necessity-oriented retailers such as supermarkets, drug stores and/or discount variety stores. No one retailer accounts for more than 8% of the Company's gross revenues. Income Taxes - The Company has in past years elected to qualify, and intends to continue such election, to be taxed as a "Real Estate Investment Trust" ("REIT") under Sections 856-860 of the Internal Revenue Code, as amended. In general terms, under such Code provisions a trust or corporation which, in any taxable year, meets certain requirements and distributes to its shareholders at least 95% of its taxable income will not be subject to Federal income tax to the extent of the income which it distributes. The Company computes taxable income on a basis different from that used for financial reporting purposes due to differences in the estimated useful lives used to compute depreciation, timing differences in the recognition of loan commitment fees, and certain interest discounts which are not recognized for tax purposes. The Company also reports certain gains on sales of properties on the installment basis for tax purposes. 9 11 Income Recognition- The Company follows the policy of suspending the accrual of income on any investments where interest or rental payments are delinquent 60 days or more. Percentage rental income is recorded upon collection. Gains from the sale of real estate are deferred until such time as minimum down payment and loan amortization requirements are met in conformity with the provisions of Statement of Financial Accounting Standards No. 66. Interest discounts are imputed on financed sales when the contractual interest rates are less than prevailing market rates at the time of sale. Depreciation- The Company provides depreciation on buildings and other improvements on the straight-line basis over their estimated useful lives. Such lives are from 14 to 40 years for buildings and 6 years for improvements. Maintenance and repairs are charged to expense as incurred, while significant improvements are capitalized. The profit or loss on assets retired or otherwise disposed of is credited or charged to operations and the cost and related accumulated depreciation are removed from the asset and accumulated depreciation accounts. Valuation Loss- The need for any allowance for possible losses or reductions in carrying values applicable to the Company's investments is evaluated by management by means of quarterly reviews of the portfolio on an individual investment basis considering such factors as current and projected net operating income and other market factors. Rental properties are carried at the lower of depreciated cost or net realizable value. 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 assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 10 12 Cash Equivalents- The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Earnings Per Share- Earnings per share is computed by dividing net earnings by the weighted average number of shares outstanding. The effect on earnings per share assuming conversion of the 2% and the 7.3% convertible subordinated debentures would be anti-dilutive. Exercise of the outstanding stock options would not have a material dilutive effect on earnings per share. Reclassification of Prior Year Amounts- Certain items in the consolidated financial statements have been reclassified to conform with the 1995 presentation. Recent Accounting Pronouncements- In March 1995, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 121 ("FAS 121") "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," which becomes effective for fiscal years beginning after December 15, 1995. FAS 121 establishes standards for determining when impairment losses on long-lived assets have occurred and how impairment losses should be measured. The Company intends to adopt FAS 121 in 1996. The financial statement impact of adopting FAS 121 is not expected to be material. In October 1995, the FASB issued Statement of Financial Accounting Standards No. 123 ("FAS 123") "Accounting for Stock-Based Compensation," which becomes effective for fiscal years beginning after December 15, 1995. FAS 123 establishes new financial accounting and reporting standards for stock-based compensation plans. Entities will be allowed to measure compensation cost for stock-based compensation under FAS 123 or APB Opinion No. 25, "Accounting for Stock Issued to Employees." Entities electing to remain with the accounting in APB Opinion No. 25 will be required to make pro forma disclosures of net income and earnings per share as if the provisions of FAS 123 had been applied. The Company is in the process of evaluating FAS 123. The potential impact on the Company of adopting the new standard has not been quantified at this time. The Company must adopt FAS 123 no later than January 1, 1996. 11 13 2. PUBLIC OFFERINGS: On August 31, 1993, the Company completed concurrent public offerings of 4,127,580 shares of its common stock at $11.25 per share and $86,250,000 of 7.3% convertible subordinated debentures due August 15, 2003. Net proceeds from these offerings totaled approximately $126,330,000. For more information regarding the convertible debentures, see Note 7. 3. RENTAL PROPERTIES: Rental properties are comprised of the following:
December 31, --------------------------- 1995 1994 ---- ---- Land covered by purchase- leaseback agreements $ 928,292 $ 928,292 Land related to buildings and improvements 92,453,973 91,181,819 Buildings & improvements 359,126,336 350,532,594 ------------ ------------ $452,508,601 $442,642,705 ============ ============
Upon expiration of the leases for land covered by purchase-leaseback agreements, all improvements on the land will become the property of the Company. At December 31, 1995, land covered by two purchase-leaseback agreements having an aggregate cost of $677,792 is subordinate to first mortgage liens of $721,347 which are on both land and improvements but are not obligations of the Company. In addition, the lessees of these two properties have the option, subject to certain conditions, to repurchase the land. Such option prices are for amounts greater than the Company's carrying value of the related land. 12 14 Minimum base rentals on noncancellable operating leases for the Company's shopping center, industrial and land purchase-leaseback investments for the next five years and thereafter are as follows:
Year Amount ---- ------ 1996 $ 46,514,923 1997 42,227,154 1998 37,793,317 1999 33,678,716 2000 37,905,657 Thereafter 258,720,430 ------------ $456,840,197 ============
4. NET INVESTMENT IN DIRECT FINANCING LEASES: Four retail facilities are leased to Wal-Mart Stores, Inc. at a total annual rental of $827,925 plus percentage rentals of 1% of gross sales in excess of the tenant's actual sales for its fiscal year ended January 31, 1990. Rental income from these leases totaled $1,175,284 (including $347,359 of percentage rentals) in 1995, $1,120,161 (including $292,236 of percentage rentals) in 1994 and $1,046,737 (including $218,812 of percentage rentals) in 1993. Of this rental income, $198,163, $166,019 and $172,418 were recorded as amortization of capitalized leasing income in 1995, 1994 and 1993, respectively. The Company acquired ten branch bank buildings in a 1984 merger. These facilities are leased to The Old Phoenix National Bank at a total annual rental of $313,049. The Company is to receive minimum lease payments of $1,140,974 per year during 1996 through 2000 and a total of $12,183,091 thereafter through the remaining lease terms. The estimated residual values of the leased properties included in net investment in direct financing leases totaled $644,872 as of December 31, 1995 and 1994. 13 15 5. MORTGAGE LOANS: The Company's investments in mortgage loans, all of which are secured by real estate investments, are summarized by type of loan at December 31, 1995 and 1994, as follows:
1995 1994 ----------------------- -------------------------- Number Amount Number Amount of Loans Outstanding of Loans Outstanding -------- ----------- -------- ----------- First mortgage 2 $ 3,358,578 2 $3,390,491 Mortgage participation 1 38,415 1 40,504 Wrap-around mortgage 1 5,390,104 1 5,194,228 - ----------- - ---------- 4 8,787,097 4 8,625,223 Less-Interest discounts and negative goodwill - (287,887) - (333,080) - ----------- - ---------- Mortgage loans, net 4 $ 8,499,210 4 $8,292,143 = =========== = ==========
During April, 1994, the borrower under the Spanish Quarter Apartments wrap-around mortgage loan filed Chapter 11 bankruptcy. In December, 1994, the Bankruptcy Court approved the plan of reorganization which amended the loan effective December 1, 1994 to extend the term for 3 years to September 1, 2001 and to reduce the cash interest rate from 10% to 9.5% prospectively. Additional interest at an annual rate of 1% continues to accrue through the remainder of the term. In addition, during 1995, the Company funded additional principal of $260,000 under this mortgage for capital improvements. The Company will realize total proceeds in excess of the carrying value of the indebtedness at the time of the restructuring over the remaining term of the mortgage. Therefore, no loss has been recorded related to the restructuring in accordance with SFAS No. 15. 14 16 Annual principal payments applicable to mortgage loan investments in the next five years and thereafter are as follows:
Year Amount ---- ------ 1996 $ 84,375 1997 97,355 1998 3,241,594 1999 90,468 2000 103,835 Thereafter 4,881,583 ---------- $8,499,210 ==========
Based on current rates at which similar loans would be made, the estimated fair value of mortgage loans was approximately $9,079,000 and $8,576,000 at December 31, 1995 and 1994, respectively. 6. MORTGAGE NOTES PAYABLE: Mortgage notes payable are collateralized by various real estate investments having a net carrying value of approximately $132,695,208 as of December 31, 1995. These notes have stated interest rates ranging from 7.6% to 13.875% and are due in monthly installments with maturity dates ranging from 1996 to 2013. During 1995, the Company (a) repaid at maturity two variable rate mortgages totaling $3,524,000, (b) repaid at maturity an $860,000 mortgage bearing interest at 13.875% (discounted to 9.5% for financial reporting purposes), (c) refinanced a $9,000,000 mortgage, reducing the face of the mortgage to $7,500,000 and the interest rate from 9.75% to 8.375% and (d) refinanced a $12,330,000 mortgage, reducing the face of the mortgage to $11,377,000 and the interest rate from 9.375% to 8.194%. In addition, a 9.5% fully amortizing mortgage note payable was extinguished at maturity in August 1995. The mortgage note payable secured by one of the two shopping centers acquired during 1995 totals $2,383,000 at a rate of 11.00% with a March 1998 maturity. During 1994, the Company purchased for $4,500,000 the mortgage note payable secured by Valley West Mall which had a balance outstanding of approximately $8,248,000. During 1993, the Company paid in full eleven mortgage notes payable aggregating approximately $22,816,000. See also Note 10 where some of these prepayments resulted in extraordinary gains and losses. 15 17 Principal amortization and balloon payments applicable to mortgage notes payable in the next five years and thereafter are as follows:
BALLOON YEAR AMORTIZATION PAYMENTS TOTAL ---- ------------ -------- ----- 1996 $ 1,305,172 $13,882,380 $15,187,552 1997 1,079,895 34,653,165 35,733,060 1998 881,160 2,385,917 3,267,077 1999 958,888 - 958,888 2000 695,988 12,079,779 12,775,767 Thereafter 10,656,758 20,609,079 31,265,837 ----------- ----------- ----------- $15,577,861 $83,610,320 $99,188,181 =========== =========== ===========
Based on the borrowing rates currently available to the Company for mortgages with similar terms and maturities, the estimated fair value of mortgage notes payable was approximately $99,417,000 and $102,098,000 at December 31, 1995 and 1994, respectively. 7. CONVERTIBLE SUBORDINATED DEBENTURES: Pursuant to the terms of the debentures, the Company redeemed $5,530,000 of its 2% convertible subordinated debentures on August 1, 1991 at a premium to par of 27% and the remaining $5,730,000 of this issue on August 1, 1993 at a premium to par of 45%. The premium paid by the Company totaled $2,578,500 and $1,493,100 on August 1, 1993 and 1991, respectively. Effective August 31, 1993, the Company issued $86,250,000 of 7.3% convertible subordinated debentures due August 15, 2003, $84,905,000 of which is outstanding as of December 31, 1995. Interest on the debentures is payable semi-annually on February 15 and August 15. The debentures are convertible at any time prior to maturity into common stock of the Company at $11.25 per share, subject to adjustment in certain events. The Company has the option to redeem the debentures at par at any time after August 15, 1996. In March 1995, $1,345,000 of the Company's 7.3% convertible subordinated debentures were converted into 119,554 shares of common stock at $11.25 per share. Based upon the $11.25 conversion price, 7,547,111 authorized but unissued common shares have been reserved for possible issuance if the $84,905,000 debentures outstanding at December 31, 1995 are converted. Costs associated with the issuance of the debentures were approximately $3,701,000 and are being amortized over the life of the debentures. 16 18 Based on the closing market price at year end, the estimated fair value of the 7.3% debentures was approximately $80,660,000 and $79,350,000 at December 31, 1995 and 1994, respectively. 8. INDEBTEDNESS TO BANKS: On November 1, 1990, the Company obtained from a financial institution a $25,000,000 revolving term loan maturing November 1, 1995. On July 31, 1992, the Company amended and restated this revolving term loan to increase the lender's commitment to a maximum of $50,000,000 ($38,520,000 at December 31, 1994, based on existing collateral) and extend the maturity to August 1, 1997. The interest rate was, at the option of the Company, either a) prime, fluctuating daily, or b) 1.25% over the adjusted London Interbank Offered Rates ("LIBOR"), set for periods of one, two, three, or six months at the option of the Company. Prepayments could be made with no fee at any time on prime rate advances and at the maturity of LIBOR advances. The Company paid a fee of 0.25% per annum of the aggregate unused portion of the commitment. On December 15, 1995, the Company terminated the $50,000,000 secured revolving term loan, and obtained a $100,000,000 unsecured revolving term loan maturing January 4, 1999. Not later than June 30th of each year commencing June 30, 1996, the Company may request to extend the maturity date for an additional twelve-month period beyond the existing maturity date. The interest rate is, at the option of the Company, either a) prime fluctuating daily, or b) LIBOR plus the "Applicable Margin" ranging from 1.3% to 1.5% based upon the rating of the senior unsecured long-term debt obligations of the Company. LIBOR borrowings may be set for periods of one, two, three, six or twelve months at the option of the Company. The Applicable Margin based on the Company's current rating is 1.5%. Prepayments may be made on prime rate and LIBOR advances provided that the Company will reimburse the lenders for any loss or out-of-pocket expense incurred in connection with any LIBOR prepayment. The Company pays a fee of 0.25% per annum of the aggregate unused portion of the commitment. The loan agreement contains restrictive covenants pertaining to net worth, the ratio of debt to equity, interest coverage, debt service coverage, net operating losses, and the ratio of total liabilities to total assets. The Company has agreed not to encumber certain properties ("Negative Pledge Properties"). The commitment may fluctuate up to a maximum of $100,000,000 based on 65% of the value of the Negative Pledge Properties and as of December 31, 1995, the Company may borrow the maximum commitment amount. 17 19 The following data is presented with respect to the line of credit agreements in 1995 and 1994:
1995 1994 ---- ---- Unused at year-end $64,000,000 $12,520,000 Average borrowing for the period 33,506,945 788,890 Maximum amount outstanding during the period 36,000,000 26,000,000 Average interest rate for the period 7.63% 8.16% Interest rate at year-end 7.4375% 8.1250%
9. DEFERRED INCOME TAXES, GAIN ON SALES AND VALUATION LOSS: During 1984, the Company recognized a gain on sale for financial reporting purposes, net of a deferred tax provision of $1,122,000, which reflected the timing differences arising from the Company's election to recognize the gain on this property sale on the installment basis for tax purposes. Installment gains are recognized for tax purposes based on the principal payments received in each year under the purchase-money financing taken back on the sales. The purchase-money financing on this sale commenced principal amortization in 1987 based on a 25-year amortization period, with a balloon payment in 2001. The Company had a deferred tax liability related to this sale of $1,068,000 and $1,079,000 at December 31, 1995 and 1994, respectively. Should the Company elect to distribute the taxable installment gain recognized in future years to its shareholders as capital gain distributions, the reversal of this previously recorded tax liability would be reflected in income for financial reporting purposes in the periods in which the distributions are elected. During 1995, the Company sold three shopping center investments and two parcels of land for gains totaling approximately $160,000. In addition, the company recorded gains of approximately $2,000 on the condemnation of 2,814 square feet of land at two of the Company's shopping center investments. 18 20 During 1994, the Company sold two parcels of land for gains totaling approximately $257,000. During 1993, the Company sold an apartment investment, two parcels of land and a third parcel of land with the buildings thereon for a total gain of approximately $4,557,000. In 1994, the Company recorded approximately $4,125,000 of reductions in the carrying values of certain investments, primarily Valley West Mall due to permanent impairments in the values of the investments. In addition, in December 1992 the Company recorded a $3,565,000 reduction in the carrying value of Valley West Mall. These adjustments to carrying value were a result of the Company's quarterly evaluations of its individual investments based on current and forecasted net operating income of the investment, competition resulting from new properties in the market place and other changes in the local economy. For tax purposes, the Company will not be able to claim these deductions until the actual disposition of the properties. 10. EXTRAORDINARY ITEM: During 1995, the Company recognized an extraordinary loss of approximately $137,000 on the early extinguishment of debt. This extraordinary loss represented the unamortized portion of loan costs on the $50 million secured revolver terminated in December 1995. During 1994, the Company purchased the 9.5% mortgage note payable secured by Valley West Mall in Glendale, Arizona for $4,500,000. The mortgage note payable had an outstanding principal balance of $8,248,000 at the time of purchase, which resulted in an extraordinary gain on extinguishment of this indebtedness of approximately $3,748,000 for both financial reporting and tax purposes. During 1993, the Company prepaid in full nine mortgage notes payable totaling approximately $21,896,000 with interest rates ranging from 9.3% to 13.625% for financial reporting purposes. The Company recognized an extraordinary loss on these prepayments of approximately $1,440,000, representing $186,000 of unamortized net interest discounts and $1,254,000 of prepayment penalties. 19 21 11. CASH DISTRIBUTIONS AND DIVIDEND REINVESTMENT PLAN: The taxability of per share distributions paid to shareholders during the years ended December 31, 1995, 1994 and 1993 was as follows:
1995 1994 1993 ---- ---- ---- Ordinary income $.635 $ .72 $ .39 Capital gains - .04 .45 Return of capital .250 .08 - ----- ----- ----- $.885 $ .84 $ .84 ===== ===== =====
In addition, the 5% discount received upon purchase of shares under the Dividend Reinvestment Plan is taxable as ordinary income to the participant. In 1984, the Company implemented a Dividend Reinvestment Plan (the "Plan") under which shareholders of the Company may elect to reinvest all or a portion of their dividends in the purchase of newly issued shares of the Company. The price of shares so purchased is 95% of the average high and low sales prices of the Company's common stock on the applicable dividend payment date. During 1995, 1994 and 1993, shares issued under the Plan totaled 121,831, 99,477 and 109,807, respectively, and dividends totaling $1,107,261, $937,750 and $1,248,628, respectively, were reinvested to purchase these shares. 12. STOCK OPTIONS: Effective May 8, 1989, the Company adopted and its shareholders approved the 1989 Stock Option Plan (the "1989 Plan"). In May 1993, the shareholders approved a 750,000 share increase in the number of shares authorized to be granted under the 1989 Plan. The 1989 Plan, which expires on May 8, 1999, replaces the prior Key Employee Stock Option Plan (the "Prior Plan"), except that options granted under the Prior Plan and unexercised as of the date of the 1989 Plan shall remain in full force and effect. The 1989 Plan includes provisions for a) the granting of both Incentive Stock Options ("ISOs") (as defined in Section 422A of the Internal Revenue Code) and nonqualified options to officers and employees and b) the automatic granting of nonqualified options for 1,250 shares to each non-employee director upon the election and each annual re-election of each non-employee director. Under the terms of the 1989 Plan, the option price shall be no less than the fair market value of the optioned shares at the date of grant. 20 22 Details of the stock option activity during 1995, 1994 and 1993 are as follows:
Number of Shares ---------------- Option Price Employees Directors Per Share --------- --------- -------------- Options outstanding, December 31, 1992 130,015 37,500 $7.63-$15.10 Granted, 1993 56,000 - $12.00 Granted, 1993 - 8,750 $13.38 Exercised, 1993 (1,800) (6,250) $7.63-$10.25 Expired unexercised, 1993 (3,000) - $ 9.25 ------- ------ Options outstanding, December 31, 1993 181,215 40,000 $7.63-$15.10 Granted, 1994 66,000 - $10.75 Granted, 1994 - 7,500 $10.63 Exercised, 1994 (6,210) - $7.63-$10.24 Expired unexercised, 1994 (16,350) - $9.25-$15.10 ------- ------ Options outstanding, December 31, 1994 224,655 47,500 $7.63-$15.10 Granted, 1995 80,500 - $10.125 Granted, 1995 - 7,500 $ 9.75 Granted, 1995 50,000 - $ 9.625 Exercised, 1995 (7,000) - $ 7.625 Expired unexercised, 1995 (12,000) - $10.125-$12.00 ------- ------ Options outstanding, December 31, 1995 336,155 55,000 ======= ======
There are currently ISOs outstanding on 372,343 shares (including 40,625 shares granted under the Prior Plan), non-qualified options outstanding on 105,000 shares, and 577,050 unoptioned shares remaining in the 1989 Plan after the granting of ISOs for 89,000 additional shares at $9.25 per share on January 2, 1995 and the expiration of an option on 2,812 shares at $10.16 per share on January 19, 1996. 13. EMPLOYEE RETIREMENT BENEFITS: During 1980 the Board of Directors approved and adopted a pension program for the employees of the Company. The program included a noncontributory pension plan for all employees of the Company, under which the Company accrued and funded pension costs each year equal to 12% of employees' salaries. Effective June 30, 1990, the Board of Directors of the Company elected to terminate the pension plan. Upon termination of the pension plan, the Board of Directors determined that it would be appropriate to substitute in lieu thereof a program of year-end cash payments to certain employees of the Company. This program was instituted in 1990. Under this program, participants receive a year-end cash payment from the Company, the amount of which is based upon each participant's length of service with the Company. Each participant who has been employed by the Company for more than five years will receive a year-end cash 21 23 payment equal to 12% of his or her salary. Each participant with less than five years will receive year-end cash payments in graduated amounts designed to produce a cumulative 12% payment after completion of five years of service. The Company accrued approximately $200,000, $168,000 and $154,000 under this program in 1995, 1994 and 1993, respectively. Certain employees whose time in service with the Company was significantly greater than that of the remaining employees were provided with employment contracts during 1980. These employment contracts call for annual payments to each of these employees equal to 12% of the employee's salary in the event the Company's pension plan is terminated and deferred compensation amounts to be paid at retirement. The Company accrued approximately $23,000 for these contracts in 1995, $23,000 in 1994, and $21,000 in 1993. The Company currently has no postretirement or postemployment benefits, and therefore Statements of Financial Accounting Standards Nos. 106 and 112 have no effect on the Company. 14. TRANSACTIONS WITH RELATED PARTIES: The former Chairman of the Executive Committee of the Company, who is also a member of the Board of Directors and was appointed President and Chief Operating Officer of the Company effective October 1, 1995, received consulting fees included in general and administrative expenses for the years ended December 31, 1994 and 1993 totaling approximately $2,000 and $24,000, respectively. This consulting arrangement was discontinued in January 1994. The holdback shares and dividend equivalents related thereto on the Sofran Centers were issued or paid to entities which were directly or indirectly owned or controlled by Norman Zavalkoff, a director of the Company from August 14, 1992 to January 27, 1994, and nine other investors. (See Note 15). 15. COMMITMENTS AND CONTINGENCIES: During 1992, the Company purchased 17 shopping centers (the "Sofran Centers" and the "Dreyfus Centers") which had certain rental guaranties from the sellers. At the time of the purchases, 290,762 shares of the Company's common stock (representing approximately $3,003,000 of the purchase prices) were retained as "holdback shares." The Company was required to issue all or a portion of the holdback shares at various dates over the holdback periods if certain occupancy levels on a portfolio basis or on agreed-upon spaces were achieved by the end of the respective periods. 22 24 The Sofran holdback, which expired January 1995, contained a total of 169,290 shares. Over the term of this holdback, 9,182 shares were earned by and issued to the sellers and the remaining 160,108 shares were forfeited. The Dreyfus holdback, which expired December 1995, contained a total of 121,472 shares. For the period December 23, 1992 through September 30, 1995, the number of shares available to the sellers was reduced by 34,378 shares and the Company issued 81,623 shares to the sellers, leaving a balance of 5,471 holdback shares. Of the remaining balance of holdback shares, 5,158 were issued to the sellers and 313 were forfeited in January 1996. The shares issued represented additional cost of acquisition for financial reporting purposes. In addition, during the holdback periods, the sellers were entitled to amounts equivalent to dividends on the holdback shares until such time as their right to receive such holdback shares was extinguished. The Company paid dividend equivalents of $41,637 and $100,466 during 1994 and 1993, respectively, to the sellers of the Sofran Centers. Also, the Company paid dividend equivalents of $12,100, $45,700 and $87,697 during 1995, 1994 and 1993, respectively, to the sellers of the Dreyfus Centers. These payments were considered part of the cost of acquisition on the respective payment dates. Additionally, the seller of one of the Dreyfus Centers pledged 115,343 of its IRT Property Company shares to the Company as collateral for a guarantee of rents payable by one of the anchor tenants which had filed bankruptcy. For the period December 23, 1992 through September 30, 1995, 40,662 shares held as collateral were released to the seller and 10,321 shares were retired, leaving a balance of 64,360 shares. In December 1995, the Company entered into a contract for the expansion of one of its shopping center investments. The cost to the Company will be approximately $693,000 of which approximately $34,000 had been incurred through December 31, 1995. Effective October 1, 1995, the Company entered into agreements with the Chairman, the President and the Executive Vice President and Chief Financial Officer. The agreements contain provisions entitling each such officer to receive from two to three times his or her annual compensation (as defined) if there is a change in control of the Company (as defined) and a termination of his or her employment. Additionally, the President's agreement entitles him to receive an amount equal to his annual compensation (as defined) if his 23 25 employment is terminated within two years (a) by the Company without cause or (b) by the President if his position and duties are materially reduced or diminished. 16. ENVIRONMENTAL INVESTIGATIONS: The Charlotte industrial facility contained underground petroleum and used oil storage tanks ("USTs") believed to have been owned by the previous owner of this property. The Company (through an environmental consulting firm) removed the USTs in December 1993, and on March 2, 1994, DEHNR notified the Company that certain investigative, corrective and/or remedial actions ("Corrective Actions") must be performed by the Company to, among other things, determine the level of soil and/or groundwater contamination due to suspected leakage from some of the USTs. The Company has investigated the property to the satisfaction of DEHNR. The investigation confirmed the presence of petroleum product-related substances in soil and groundwater at levels that exceed applicable standards. The investigation also revealed the presence of free phase liquids in one monitoring well at the property. The Company has begun removing free phase liquids from the well on the property. In addition, the Company has submitted to DEHNR a Corrective Action Plan ("CAP") and schedule to address petroleum-impacted soil and groundwater at the site. Soil excavation work has been completed, and the Company plans to address petroleum-impacted groundwater in due course. According to the CAP, the estimated remaining cost for site remediation ranges from $129,000 to $193,000 over a period of 3 to 6 years. Although the Company believes that certain of the costs of Corrective Action are reimburseable under the North Carolina Commercial Leaking Petroleum Underground Storage Tank Cleanup Fund, the Company has accrued $129,000 based on these estimates. The CAP may be revised, and the estimated costs may change, but based on the information presently available, the Company believes any additional costs of any such Corrective Action would not have a material adverse effect on the Company's results of operations, financial position or liquidity. During its soil and groundwater investigation at Bluebonnet Village Shopping Center in Baton Rouge, Louisiana, the Company's environmental consultant discovered concentrations of various chemicals in a single groundwater monitoring well that exceeded the maximum contaminant levels under the Federal Safe Drinking Water Act. The Company has notified the Louisiana Department of Environmental Quality-Groundwater Protection Division ("LDEQ-GWPD") of such discovery. The Company has been advised that the groundwater impact appears to be very localized, since six other groundwater monitoring wells placed around the initial well 24 26 did not exhibit any impact. There can be no assurance that the LDEQ-GWPD will not require remediation, but based on information presently available to the Company and discussions with the Company's environmental consultant, the Company believes the cost of any such remediation would not have a material adverse effect on the Company's results of operations, financial position or liquidity. 25 27 17. QUARTERLY FINANCIAL INFORMATION (UNAUDITED): The following is a summary of the unaudited quarterly financial information for the years ended December 31, 1995 and 1994.
1995 ----------------------------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter ------- ------- ------- ------ Revenues $15,280,307 $14,837,565 $14,986,831 $15,091,544 =========== =========== =========== =========== Earnings before gain (loss) on real estate investments and extraordinary item $ 4,196,221 $ 3,890,861 $ 3,910,440 $ 3,552,504 Gain (loss) on sales of properties, net (16,673) (58,084) - 247,782 ----------- ----------- ----------- ----------- Earnings before extraordinary item 4,179,548 3,832,777 3,910,440 3,800,286 Extraordinary item - - - (137,260) ----------- ----------- ----------- ----------- Net earnings $ 4,179,548 $ 3,832,777 $ 3,910,440 $ 3,663,026 =========== =========== =========== =========== Per Share: Earnings before extraordinary item $ .16 $ .15 $ .15 $ .14 Extraordinary item - - - - ----------- ----------- ----------- ----------- Net earnings $ .16 $ .15 $ .15 $ .14 =========== =========== =========== ===========
1994 ----------------------------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter ------- ------- ------- ------- Revenues $12,038,799 $11,755,214 $12,306,661 $13,101,470 =========== =========== =========== =========== Earnings before gain (loss) on real estate investments and extraordinary item $ 3,131,931 $ 2,888,770 $ 3,150,599 $ 3,617,623 ----------- ----------- ----------- ----------- Gain (loss) on real estate investments: - - 257,036 43,000 Gain on sales of properties - (3,685,454) - (440,000) ----------- ----------- ----------- ----------- Valuation loss - (3,685,454) 257,036 (397,000) ----------- ----------- ----------- ----------- Earnings before extraordinary item 3,131,931 (796,684) 3,407,635 3,220,623 Extraordinary item - 3,748,095 - - ----------- ----------- ----------- ----------- Net earnings $ 3,131,931 $ 2,951,411 $ 3,407,635 $ 3,220,623 =========== =========== =========== =========== Per Share: Earnings before extraordinary item $ .12 $ (.03) $ .13 $ .13 Extraordinary item - .15 - - ----------- ----------- ----------- ----------- Net earnings $ .12 $ .12 $ .13 $ .13 =========== =========== =========== ===========
26 28 IRT PROPERTY COMPANY SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1995
Costs Gross Amount Initial Capitalized at Which Cost to Subsequent to Carried at Description Encumbrances Company Acquisition Close of Year ----------- ------------ ------- ----------- ------------- Abbeville Plaza Abbeville, SC Land $ - $ 48,066 $ - $ 48,066 Buildings 458,062 10,470 468,532 Ambassador Row Lafayette, LA Land - 2,451,860 - 2,451,860 Buildings 7,244,580 70,500 7,315,080 Ambassador Row Courtyard Lafayette, LA Land - 2,899,438 - 2,899,438 Buildings 8,698,313 - 8,698,313 Asheville Plaza Asheville, NC Land - 52,710 15,000 67,710 Buildings 335,717 1,860 337,577 Bluebonnet Village Baton Rouge, LA Land - 2,540,594 - 2,540,594 Buildings 5,509,995 24,742 5,534,737 The Boulevard Lafayette, LA Land - 948,334 - 948,334 Buildings 2,845,003 4,350 2,849,353 Carolina Place Hartsville, SC Land - 345,000 - 345,000 Buildings 2,006,494 - 2,006,494 Centre Pointe Plaza Smithfield, NC Land - 983,138 12,583 995,721 Buildings 7,999,263 146,922 8,146,185 Estimated Accumulated Useful Depreciation Life of at Close Buildings Date Year Description of Year (Years) Acquired Completed ----------- ------- ------- -------- --------- Abbeville Plaza Abbeville, SC Land $ - 30 April, 1986 1970 Buildings 189,270 Ambassador Row Lafayette, LA Land - 40 December, 1994 1980 & Buildings 184,787 1991 Ambassador Row Courtyard Lafayette, LA Land - 40 December, 1994 1986 & Buildings 222,382 1991 Asheville Plaza Asheville, NC Land - 30 April, 1986 1967 Buildings 110,568 Bluebonnet Village Baton Rouge, LA Land - 40 December, 1994 1983 Buildings 142,265 The Boulevard Lafayette, LA Land - 40 December, 1994 1976 & Buildings 73,004 1994 Carolina Place Hartsville, SC Land - 40 May, 1989 1989 Buildings 328,380 Centre Pointe Plaza Smithfield, NC Land - 40 December, 1992 1989 & Buildings 613,538 1993
27 29 IRT PROPERTY COMPANY SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1995
Costs Gross Amount Initial Capitalized at Which Cost to Subsequent to Carried at Description Encumbrances Company Acquisition Close of Year ----------- ------------ ------- ----------- ------------- Chadwick Square Hendersonville, NC Land $ - $ 276,778 $ - $ 276,778 Buildings 1,179,949 - 1,179,949 Chelsea Place New Port Richey, FL Land - 1,387,517 - 1,387,517 Buildings 5,550,068 - 5,550,068 Chester Plaza Chester, SC Land - 68,649 143,504 212,153 Buildings 414,117 1,573,701 1,987,818 Chestnut Square Brevard, NC Land 1,069,609 295,984 - 295,984 Buildings 1,113,464 7,539 1,121,003 Colony Square Fitzgerald, GA Land - 272,833 - 272,833 Buildings 2,455,826 200,571 2,656,397 Commerce Crossing Commerce, GA Land - 379,380 889 380,269 Buildings 4,086,850 15,569 4,102,419 Country Club Plaza Slidell, LA Land 1,068,686 1,068,686 Buildings 3,010,039 12,275 3,022,314 Countryside Shops Cooper City, FL Land - 5,675,614 - 5,675,614 Buildings 10,954,065 62,953 11,017,018 Estimated Accumulated Useful Depreciation Life of at Close Buildings Date Year Description of Year (Years) Acquired Completed ----------- ------- ------- -------- --------- Chadwick Square Hendersonville, NC Land $ - 40 January, 1992 1985 Buildings 115,526 Chelsea Place New Port Richey, FL Land - 40 July, 1993 1992 Buildings 341,109 Chester Plaza Chester, SC Land - 30 April, 1986 1967 & Buildings 423,860 1992 Chestnut Square Brevard, NC Land - 40 January, 1992 1985 Buildings 112,436 Colony Square Fitzgerald, GA Land - 40 February, 1988 1987 Buildings 584,587 Commerce Crossing Commerce, GA Land - 40 December, 1992 1988 Buildings 309,275 Country Club Plaza Slidell, LA Land - 40 January, 1995 1982 Buildings 74,241 Countryside Shops Cooper City, FL Land - 40 June, 1994 1986, 1988 Buildings 413,470 & 1991
28 30 IRT PROPERTY COMPANY SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1995
Costs Gross Amount Initial Capitalized at Which Cost to Subsequent to Carried at Description Encumbrances Company Acquisition Close of Year ----------- ------------ ------- ----------- ------------- The Crossing Slidell, LA Land $ - $ 1,282,036 $ - $ 1,282,036 Buildings 3,213,616 69,850 3,283,466 Delchamps Plaza Pascagoula, MS Land 3,233,587 359,000 - 359,000 Buildings 4,130,247 25,986 4,156,233 Douglas Commons Douglasville, GA Land 6,270,451 2,543,385 2,951 2,546,336 Buildings 5,958,475 104,280 6,062,755 Eden Centre Eden, NC Land - 625,901 - 625,901 Buildings 2,901,316 - 2,901,316 Elmwood Oaks Harahan, LA Land 7,500,000 4,558,654 - 4,558,654 Buildings 6,560,014 7,120 6,567,134 First Street Station Albemarle, NC Land - 202,578 - 202,578 Buildings 2,832,092 6,998 2,839,090 Forest Hills Centre Wilson, NC Land - 869,981 (9,160) 860,821 Buildings 4,102,906 552,594 4,655,500 Forrest Gallery Tullahoma, TN Land - 2,136,573 10,639 2,147,212 Buildings 9,976,227 228,743 10,204,970 Estimated Accumulated Useful Depreciation Life of at Close Buildings Date Year Description of Year (Years) Acquired Completed ----------- ------- ------- -------- --------- The Crossing Slidell, LA Land $ - 40 December, 1994 1988 & Buildings 83,581 1993 Delchamps Plaza Pascagoula, MS Land - 40 April, 1988 1987 Buildings 805,129 Douglas Commons Douglasville, GA Land - 40 August, 1992 1988 Buildings 527,432 Eden Centre Eden, NC Land - 40 November, 1994 1991 Buildings 84,621 Elmwood Oaks Harahan, LA Land - 40 January, 1992 1989 Buildings 649,249 First Street Station Albemarle, NC Land - 40 August, 1994 1989 Buildings 94,399 Forest Hills Centre Wilson, NC Land - 40 August, 1990 1990 Buildings 522,773 Forrest Gallery Tullahoma, TN Land - 40 December, 1992 1987 Buildings 782,487
29 31 IRT PROPERTY COMPANY SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1995
Costs Gross Amount Initial Capitalized at Which Cost to Subsequent to Carried at Description Encumbrances Company Acquisition Close of Year ----------- ------------ ------- ----------- ------------- Ft. Walton Beach Plaza Ft. Walton Beach, FL Land $ - $ 787,583 $ - $ 787,583 Buildings 1,860,360 28,774 1,889,134 The Galleria Wrightsville Beach, NC Land - 1,069,672 - 1,069,672 Buildings 5,256,991 1,256,043 6,513,034 Gulf Gate Plaza Naples, FL Land - 277,562 - 277,562 Buildings 1,857,532 2,158,202 4,015,734 Harris Teeter Lexington, VA Land - 312,105 - 312,105 Buildings 1,638,552 650,000 2,288,552 Heritage Walk Milledgeville, GA Land - 810,292 - 810,292 Buildings 7,944,260 3,200 7,947,460 Hoffner Plaza Orlando, FL Land - 185,293 - 185,293 Buildings 476,469 485,171 961,640 Lancaster Plaza Lancaster, SC Land - 120,790 - 120,790 Buildings 743,852 299,267 1,043,119 Lancaster Shopping Center Lancaster, SC Land - 338,355 - 338,355 Buildings 1,227,552 29,760 1,257,312 Estimated Accumulated Useful Depreciation Life of at Close Buildings Date Year Description of Year (Years) Acquired Completed ----------- ------- ------- -------- --------- Ft. Walton Beach Plaza Ft. Walton Beach, FL Land $ - 30 July, 1986 1986 Buildings 589,312 The Galleria Wrightsville Beach, NC Land - 40 August, 1986 & 1986 & Buildings 1,336,073 December, 1987 1990 Gulf Gate Plaza Naples, FL Land - 28 June, 1979 1969 & Buildings 2,278,348 1974 Harris Teeter Lexington, VA Land - 30 June, 1988 & 1981 & Buildings 561,740 June, 1989 1989 Heritage Walk Milledgeville, GA Land - 40 June,1993 1991 & Buildings 511,492 1992 Hoffner Plaza Orlando, FL Land - 28 June, 1979 1972 Buildings 719,116 Lancaster Plaza Lancaster, SC Land - 30 April, 1986 1971 Buildings 407,423 Lancaster Shopping Center Lancaster, SC Land - 30 August, 1986 & 1963 & Buildings 352,435 December, 1987 1987
30 32 IRT PROPERTY COMPANY SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1995
Costs Gross Amount Initial Capitalized at Which Cost to Subsequent to Carried at Description Encumbrances Company Acquisition Close of Year ----------- ------------ ------- ----------- ------------- Lawrence Commons Lawrenceburg, TN Land $ 2,739,060 $ 715,653 $ 829 $ 716,482 Buildings 2,726,635 16,056 2,742,691 Litchfield Landing North Litchfield, SC Land - 475,000 - 475,000 Buildings 2,118,429 39,256 2,157,685 Macland Pointe Marietta, GA Land 3,834,068 1,252,098 - 1,252,098 Buildings 4,317,234 544,073 4,861,307 Masonova Plaza Daytona Beach, FL Land - 296,643 - 296,643 Buildings 1,680,977 1,053,232 2,734,209 Millervillage Shopping Center Baton Rouge, LA Land - 1,926,535 - 1,926,535 Buildings 5,661,992 34,125 5,696,117 New Smyrna Beach Regional New Smyrna Beach, FL Land - 3,704,368 6,757 3,711,125 Buildings 6,400,556 236,152 6,636,708 North River Village Ellenton, FL Land - 2,949,031 - 2,949,031 Buildings 7,150,403 64,321 7,214,724 North Village Center North Myrtle Beach, SC Land 2,779,144 483,400 - 483,400 Buildings 2,785,154 15,479 2,800,633 Estimated Accumulated Useful Depreciation Life of at Close Buildings Date Year Description of Year (Years) Acquired Completed ----------- ------- ------- -------- --------- Lawrence Commons Lawrenceburg, TN Land $ - 40 August, 1992 1987 Buildings 234,480 Litchfield Landing North Litchfield, SC Land - 40 August, 1986 1984 Buildings 514,750 Macland Pointe Marietta, GA Land - 40 January, 1993 1992 & Buildings 354,239 1993 Masonova Plaza Daytona Beach, FL Land - 16 June, 1979 1969 Buildings 2,089,261 Millervillage Shopping Center Baton Rouge, LA Land - 40 December, 1994 1983 & Buildings 146,264 1992 New Smyrna Beach Regional New Smyrna Beach, FL Land - 40 August, 1992 1987 Buildings 576,362 North River Village Ellenton, FL Land - 40 December, 1992 & 1988 & Buildings 434,841 December, 1993 1993 North Village Center North Myrtle Beach, SC Land - 37 August, 1986 1984 Buildings 608,074
31 33 IRT PROPERTY COMPANY SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1995
Costs Gross Amount Initial Capitalized at Which Cost to Subsequent to Carried at Description Encumbrances Company Acquisition Close of Year ----------- ------------ ------- ----------- ------------- Old Kings Commons Palm Coast, FL Land $ - $ 1,491,458 $ - $ 1,491,458 Buildings 4,474,372 137,113 4,611,485 Palm Gardens Largo, FL Land - 98,279 - 98,279 Buildings 657,716 1,274,417 1,932,133 Parkmore Plaza Milton, FL Land - 1,797,774 8,141 1,805,915 Buildings 6,448,360 60,948 6,509,308 Paulding Commons Dallas, GA Land 8,732,846 2,312,372 2,687 2,315,059 Buildings 10,606,781 40,624 10,647,405 Pensacola Plaza Pensacola, FL Land - 130,688 - 130,688 Buildings 2,392,249 121,642 2,513,891 Pinhook Plaza Lafayette, LA Land 7,422,055 2,768,151 - 2,768,151 Buildings 8,304,453 19,500 8,323,953 Plaza Acadienne Eunice, LA Land 2,388,785 - - - Buildings 2,917,925 12,000 2,929,925 Plaza North Hendersonville, NC Land - 657,797 121 657,918 Buildings 1,795,992 6,185 1,802,177 Estimated Accumulated Useful Depreciation Life of at Close Buildings Date Year Description of Year (Years) Acquired Completed ----------- ------- ------- -------- --------- Old Kings Commons Palm Coast, FL Land $ - 40 May, 1988 1988 Buildings 903,702 Palm Gardens Largo, FL Land - 26 June, 1979 1970 & Buildings 767,811 1993 Parkmore Plaza Milton, FL Land - 40 December, 1992 1986 & Buildings 490,451 1992 Paulding Commons Dallas, GA Land - 40 August, 1992 1991 Buildings 909,810 Pensacola Plaza Pensacola, FL Land - 30 July, 1986 1985 Buildings 813,629 Pinhook Plaza Lafayette, LA Land - 40 December, 1994 1979 & Buildings 213,275 1992 Plaza Acadienne Eunice, LA Land - 40 December, 1994 1980 Buildings 74,898 Plaza North Hendersonville, NC Land - 40 August, 1992 1986 Buildings 153,940
32 34 IRT PROPERTY COMPANY SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1995
Costs Gross Amount Initial Capitalized at Which Cost to Subsequent to Carried at Description Encumbrances Company Acquisition Close of Year ----------- ------------ ------- ----------- ------------- Providence Square Charlotte, NC Land $ - $ 450,000 $ 300 $ 450,300 Buildings 1,895,606 1,965,327 3,860,933 Riverview Shopping Center Durham, NC Land - 400,000 322 400,322 Buildings 1,822,918 4,128,911 5,951,829 Scottsville Square Bowling Green, KY Land - 653,010 765 653,775 Buildings 1,782,340 2,089 1,784,429 Seven Hills Spring Hill, FL Land 3,800,000 1,903,090 - 1,903,090 Buildings 2,976,628 17,502 2,994,130 Shelby Plaza Shelby, NC Land - - - - Buildings 937,483 177,666 1,115,149 Sherwood South Baton Rouge, LA Land - 496,174 - 496,174 Buildings 1,488,521 - 1,488,521 Siegen Village Baton Rouge, LA Land - 2,375,168 (325,000) 2,050,168 Buildings 4,302,715 19,830 4,322,545 Smyrna Village Smyrna, TN Land 4,172,360 968,358 20,601 988,959 Buildings 4,743,708 113,474 4,857,182 Estimated Accumulated Useful Depreciation Life of at Close Buildings Date Year Description of Year (Years) Acquired Completed ----------- ------- ------- -------- --------- Providence Square Charlotte, NC Land $ - 35 December, 1971 1973 Buildings 2,333,015 Riverview Shopping Center Durham, NC Land - 35 March, 1972 1973 Buildings 1,730,023 Scottsville Square Bowling Green, KY Land - 40 August, 1992 1986 Buildings 152,319 Seven Hills Spring Hill, FL Land - 40 July, 1993 1991 Buildings 185,439 Shelby Plaza Shelby, NC Land - 30 April, 1986 1972 Buildings 409,838 Sherwood South Baton Rouge, LA Land - 40 December, 1994 1972, 1988 Buildings 38,628 & 1992 Siegen Village Baton Rouge, LA Land - 40 December, 1994 1988 Buildings 108,498 Smyrna Village Smyrna, TN Land - 40 August, 1992 1992 Buildings 411,689
33 35 IRT PROPERTY COMPANY SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1995
Costs Gross Amount Initial Capitalized at Which Cost to Subsequent to Carried at Description Encumbrances Company Acquisition Close of Year ----------- ------------ ------- ----------- ------------- Smyth Valley Crossing Marion, VA Land $ - $ 1,692,081 $ 6,523 $ 1,698,604 Buildings 5,226,952 114,519 5,341,471 South Beach Regional Jacksonville Beach, FL Land 15,365,624 3,972,815 19,710 3,992,525 Buildings 17,115,106 741,735 17,856,841 Spalding Village Griffin, GA Land 11,376,691 2,813,854 3,281 2,817,135 Buildings 12,470,446 95,205 12,565,651 Stadium Plaza Phenix City, AL Land 3,850,000 1,828,942 2,130 1,831,072 Buildings 2,614,155 18,096 2,632,251 Stanley Market Place Stanley, NC Land - 198,103 - 198,103 Buildings 1,602,832 - 1,602,832 Tarpon Heights Galliano, LA Land 2,443,428 705,570 705,570 Buildings 2,116,712 3,125 2,119,837 Taylorsville Shopping Center Taylorsville, NC Land - 89,689 - 89,689 Buildings 1,443,704 1,078,766 2,522,470 Thomasville Commons Thomasville, NC Land 5,582,694 963,333 - 963,333 Buildings 6,183,052 26,576 6,209,628 Estimated Accumulated Useful Depreciation Life of at Close Buildings Date Year Description of Year (Years) Acquired Completed ----------- ------- ------- -------- --------- Smyth Valley Crossing Marion, VA Land $ - 40 December, 1992 1989 Buildings 413,008 South Beach Regional Jacksonville Beach, FL Land - 40 August, 1992 1990 & Buildings 1,539,668 1991 Spalding Village Griffin, GA Land - 40 August, 1992 1989 Buildings 1,070,692 Stadium Plaza Phenix City, AL Land - 40 August, 1992 1988 Buildings 226,501 Stanley Market Place Stanley, NC Land - 35 January, 1992 1980 & Buildings 156,980 1991 Tarpon Heights Galliano, LA Land - 40 January, 1995 1982 Buildings 52,209 Taylorsville Shopping Center Taylorsville, NC Land - 40 August, 1986 & 1982 & Buildings 538,702 December, 1988 1988 Thomasville Commons Thomasville, NC Land - 40 August, 1992 1991 Buildings 537,022
34 36 IRT PROPERTY COMPANY SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1995
Costs Gross Amount Initial Capitalized at Which Cost to Subsequent to Carried at Description Encumbrances Company Acquisition Close of Year ----------- ------------ ------- ----------- ------------- University Center Greenville, NC Land $ - $ 750,000 $ - $ 750,000 Buildings 3,159,065 61,907 3,220,972 Valley West Mall Glendale, AZ Land - 1,500,000 - 1,500,000 Buildings 5,801,772 2,905,826 8,707,598 Venice Plaza Venice, FL Land - 333,127 - 333,127 Buildings 1,887,721 582,501 2,470,222 Village at Northshore Slidell, LA Land 5,710,182 2,065,633 - 2,065,633 Buildings 6,196,900 5,673 6,202,573 Waterlick Plaza Lynchburg, VA Land - 1,071,000 - 1,071,000 Buildings 5,091,222 104,652 5,195,874 Watson Central Warner Robins, GA Land - 1,644,699 12,478 1,657,177 Buildings 11,312,051 88,121 11,400,172 Wesley Chapel Crossing Decatur, GA Land - 3,827,798 9,154 3,836,952 Buildings 7,029,915 47,541 7,077,456 West Gate Plaza Mobile, AL Land - 475,270 - 475,270 Buildings 3,779,546 481,190 4,260,736 Estimated Accumulated Useful Depreciation Life of at Close Buildings Date Year Description of Year (Years) Acquired Completed ----------- ------- ------- -------- --------- University Center Greenville, NC Land $ - 40 December, 1989 1989 Buildings 488,033 Valley West Mall Glendale, AZ Land - 30 March, 1986 1973 Buildings 4,902,642 Venice Plaza Venice, FL Land - 27 June, 1979 1971 & Buildings 1,477,401 1979 Village at Northshore Slidell, LA Land - 40 December, 1994 1988 & Buildings 159,094 1993 Waterlick Plaza Lynchburg, VA Land - 40 October, 1989 1973 & Buildings 831,056 1988 Watson Central Warner Robins, GA Land - 40 December, 1992 & 1989 & Buildings 817,596 October, 1993 1993 Wesley Chapel Crossing Decatur, GA Land - 40 December, 1992 1989 Buildings 536,891 West Gate Plaza Mobile, AL Land - 25 June, 1974 & 1974 Buildings 721,733 January, 1985
35 37 IRT PROPERTY COMPANY SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1995
Costs Gross Amount Initial Capitalized at Which Cost to Subsequent to Carried at Description Encumbrances Company Acquisition Close of Year ----------- ------------ ------- ----------- ------------- West Towne Square Rome, GA Land $ - $ 324,800 $ - $ 324,800 Buildings 5,580,776 97,275 5,678,051 Westgate Square Sunrise, FL Land - 2,238,886 - 2,238,886 Buildings 6,839,969 60,749 6,900,718 Willowdaile Shopping Center Durham, NC Land - 936,977 (60,579) 876,398 Buildings 7,351,612 306,538 7,658,150 Whitehall Kent Apartments Kent, OH Land - 136,404 117,938 254,342 Buildings 2,136,996 1,253,021 3,390,017 Industrial Buildings Charlotte, NC - Industrial Land - 143,160 178,490 321,650 Buildings 2,170,057 472,435 2,642,492 Plasti-Kote Medina, OH - Industrial Land - 81,390 - 81,390 Buildings 346,979 54,570 401,549 Lawrence County Shopping Center Sybene, OH Land - 435,994 - 435,994 Grand Marche Shopping Center Lafayette, LA Land - 250,000 500 250,500 Estimated Accumulated Useful Depreciation Life of at Close Buildings Date Year Description of Year (Years) Acquired Completed ----------- ------- ------- -------- --------- West Towne Square Rome, GA Land $ - 40 April, 1990 1988 Buildings 823,086 Westgate Square Sunrise, FL Land - 40 June, 1994 1984 & Buildings 256,747 1988 Willowdaile Shopping Center Durham, NC Land - 40 August, 1986 & 1986 Buildings 1,671,009 December, 1987 Whitehall Kent Apartments Kent, OH Land - 29 June, 1979 1968 Buildings 2,137,235 Industrial Buildings Charlotte, NC - Industrial Land - 14 June, 1979 1956 & Buildings 2,642,492 1963 Plasti-Kote Medina, OH - Industrial Land - 14 June, 1979 1961 & Buildings 401,549 1966 Lawrence County Shopping Center Sybene, OH Land - May, 1971 1971 Grand Marche Shopping Center Lafayette, LA Land - September, 1972 1969
36 38 IRT PROPERTY COMPANY SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1995
Costs Gross Amount Initial Capitalized at Which Cost to Subsequent to Carried at Description Encumbrances Company Acquisition Close of Year ----------- ------------ ------- ----------- ------------- Manatee County Shopping Center Bradenton, FL Land $ - $ 241,798 $ - $ 241,798 -------------- ------------- -------------- --------------- $ 98,270,584 $ 425,589,664 $ 26,918,937 $ 452,508,601 ============== ============= ============== ================ Estimated Accumulated Useful Depreciation Life of at Close Buildings Date Year Description of Year (Years) Acquired Completed ----------- ------- ------- -------- --------- Manatee County Shopping Center Bradenton, FL Land $ - May, 1971 1971 -------------- $ 51,600,890 ==============
37 39 IRT PROPERTY COMPANY SCHEDULE III SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1995 NOTE: Real estate activity is summarized as follows:
Year Ended December 31, -------------------------------------------------- 1995 1994 1993 ---- ---- ---- RENTAL PROPERTIES: Cost - Balance at beginning of year $442,642,705 $331,012,764 $300,285,526 Acquisitions and improvements 11,518,502 115,813,729 37,157,578 Retirements - - - Reduction in carrying value - (3,878,754) - ------------ ------------ ------------ 454,161,207 442,947,739 337,443,104 Cost of properties sold (1,652,606) (305,034) (6,430,340) ------------ ------------ ------------ Balance at end of year $452,508,601 $442,642,705 $331,012,764 ============ ============ ============ Accumulated depreciation - Balance at beginning of year $41,677,722 $33,463,530 $29,002,538 Depreciation 10,427,268 8,214,192 7,668,797 Retirements - - - ------------ ------------ ------------ 52,104,990 41,677,722 36,671,335 Accumulated depreciation related to rental properties sold (504,100) - (3,207,805) ------------ ------------ ------------ Balance at end of year $ 51,600,890 $ 41,677,722 $ 33,463,530 ============ ============ ============
38 40 IRT PROPERTY COMPANY SCHEDULE IV MORTGAGE LOANS ON REAL ESTATE December 31, 1995
Principal Amount of Face Amount Loans Subject Final Periodic and Carrying to Delinquent Type of Type of Interest Maturity Payment Amount of Principal Location of Property Loan Property Rate Date Terms Prior Liens Mortgages or Interest - -------------------- ---- -------- ---- ---- ----- ----------- --------- ----------- (See Notes) (See Notes) Augusta, GA First Mortgage Shopping Center 10.25% August, 1998 (1) $ - $3,220,575 - Lauderdale Lakes, FL First Mortgage Condominiums 10.00% May, 2009 (2) - 138,003 - Nashville, TN First Mortgage Condominiums 8.63% - 2006-2007 (2) - 38,415 - Participation 12.38% Montgomery, AL Wrap-Around Apartments (3) September, 2001 (3) - 5,390,104 - ------- ---------- - 8,787,097 ------- ---------- Less interest discounts and negative goodwill - (287,887) $ - $8,499,210 ======= ==========
NOTES: (1) Monthly payments of principal and interest at an annual rate of 10.25%, with a balloon payment at maturity August 1, 1998. (2) Monthly payments include principal and interest. (3) Modified effective, December 1, 1994 to extend the term for 3 years to September 1, 2001 and to reduce the cash interest rate from 10% to 9.5% prospectively, requiring monthly payments of $45,382 of principal and interest for the remaining term, with a balloon payment at maturity. Additional interest at an annual rate of 1% accrues for the periods September 1,1984 through August 31, 1989 and September 1,1991 through August 31, 2001 and is payable at maturity or on sale of the property. In addition, the Company funded additional principal of $260,000 under this mortgage during 1995 to make certain capital improvements. This wrap-around mortgage is subject to two first mortgages having an aggregate balance of $917,598 as of December 31, 1995. 39 41 IRT PROPERTY COMPANY SCHEDULE IV SCHEDULE IV MORTGAGE LOANS ON REAL ESTATE December 31, 1995 Mortgage loan activity is summarized as follows:
Year Ended December 31, ------------------------------------------ 1995 1994 1993 ---- ---- ---- Balance at beginning of year $8,292,143 $8,392,959 $12,528,542 New mortgage loans - - - Additions to mortgage loans 260,000 - - Amortization of interest discounts and negative goodwill 45,193 7,076 93,801 Collections of principal (98,126) (107,892) (4,229,384) ---------- ---------- ----------- Balance at end of year $8,499,210 $8,292,143 $ 8,392,959 ========== ========== ===========
40 42 PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. Financial Statements and Schedules. Included in Part II of this Report are the following: Report of Independent Public Accountants Consolidated Balance Sheets at December 31, 1995 and 1994 Consolidated Statements of Earnings for the Years Ended December 31, 1995, 1994 and 1993 Consolidated Statements of Changes in Shareholders' Equity for the Years Ended December 31, 1995, 1994 and 1993 Consolidated Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993 Notes to Consolidated Financial Statements Schedule III - Real Estate and Accumulated Depreciation Schedule IV - Mortgage Loans on Real Estate Exhibits. (3)(a) The Company's Articles of Incorporation, as amended, were filed as Exhibit 4.1 to the Company's Registration Statement on Form S-3 (No. 33-65604) dated July 6, 1993, to which reference is hereby made. (3)(b) The Company's By-Laws, as amended, were filed as Exhibit 3 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, to which reference is hereby made. (4)(a) The Indenture dated August 15, 1993 between the Company and Trust Company Bank, as Trustee, relating to the 7.3% Convertible Subordinated Debentures due August 15, 2003 was filed as an exhibit to the Company's Form 10-K for the year ended December 31, 1993, to which reference is hereby made. (4)(b) The form of 7.3% Convertible Subordinated Debenture was included in (4)(a) above. (4)(c)* The Indentures dated as of November 9, 1995 between the Company and SunTrust Bank, Atlanta, as Trustee, relating to Senior Debt Securities and Subordinated Debt Securities are filed herewith. 41 43 (10)(a) The Deferred Compensation Agreement between the Company and Donald W. MacLeod was filed as an exhibit to the Company's Registration Statement on Form S-2 (No. 2-88716) dated January 4, 1984, to which reference is hereby made. (10)(b) The Company's 1989 Stock Option Plan was filed as an exhibit to the Company's Form 8-K dated March 22, 1989, to which reference is hereby made. (10)(c) Amendment No. 1 to the Company's 1989 Stock Option Plan was filed as an exhibit to the Company's Form 10-K for the year ended December 31, 1993, to which reference is hereby made. (10)(d) The Company's Key Employee Stock Option Plan was filed as an exhibit to the Company's Registration Statement on Form S-2 (No. 2-88716) dated January 4, 1984, to which reference is hereby made. (10)(e)* The Company's Deferred Compensation Plan for Outside Directors dated December 22, 1995 is filed herewith. (10)(f)* Agreements between the Company and Donald W. MacLeod, Thomas H. McAuley and Mary M. Thomas effective October 1, 1995 are filed herewith. (10)(g) The Company's amended and restated $50 million revolving term loan agreement dated July 31, 1992 was filed as Exhibit (10)(e) to the Company's Form 10-K for the year ended December 31, 1992, to which reference is hereby made. The Company's revolving term loan agreement dated November 1, 1990 was filed as Exhibit (10)(e) to the Company's Form 10-K for the year ended December 31, 1990, to which reference is hereby made. (10)(h) The Company's $100 million revolving term loan agreement dated December 15, 1995 was filed as an exhibit to the Company's Form 8-K dated January 2, 1996, to which reference is hereby made. (10)(i) The Real Property Purchase Agreement and first amendment thereto dated June 23, 1992 relative to the Company's acquisition of the ten Sofran Centers was filed as an exhibit to the Company's report on Form 8-K dated August 12, 1992 (date of event reported, July 31, 1992), to which reference is hereby made. (10)(j) Form of Agreement for the Sale and Purchase of Property dated October 30, 1992 and the letter amendment thereto dated November 19, 1992 relative to the Company's acquisition of the seven Dreyfus 42 44 Centers was filed as an exhibit to the Company's report on Form 8-K dated January 6, 1993 (date of event reported, December 23, 1992), to which reference is hereby made. (10)(k) The letter agreement dated December 23, 1992 between the IBM Retirement Plan Trust Fund and its seven wholly-owned subsidiaries and the Company was filed as an exhibit to the Company's report on Form 8-K dated January 6, 1993 (date of event reported, December 23, 1992), to which reference is hereby made. (10)(l) The letter agreement dated July 29, 1993 between the IBM Retirement Plan Trust Fund and its seven wholly-owned subsidiaries and the Company was filed as an exhibit to the Company's Form 10-K for the year ended December 31, 1993, to which reference is hereby made. (21) The Company has two subsidiaries, IRT Management Company ("IRTMC") and VW Mall, Inc. ("VWM"), Georgia corporations which are wholly owned by the Company. IRTMC was formed in 1990 and VWM in 1994. (23) Consent of Arthur Andersen LLP to the incorporation of their report included in this Form 10-K in the Company's previously filed Registration Statements File Nos. 33-65604, 33-66780, 33-51238, 33-59938, 33-64628, 33-64741 and 33-63523. (27)* Financial Data Schedule (for S.E.C. use only) * Previously Filed Reports on Form 8-K . The Company filed a Current Report on Form 8-K dated January 2, 1996 (date of event reported, December 15, 1995), reporting under Items 5 and 7, the $100 million unsecured revolving term loan obtained December 15, 1995, which Form 8-K is incorporated herein by reference. 43 45 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this amended and restated Form 10-K/A Amendment No. 1 to be signed on its behalf by the undersigned, thereunto duly authorized. February 20, 1996 IRT PROPERTY COMPANY By:/s/ Mary M. Thomas ----------------------------- Mary M. Thomas Executive Vice President & Chief Financial Officer 44 EX-23 2 CONSENT OF ARTHUR ANDERSEN 1 Exhibit (23) CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS IRT Property Company: As independent public accountants, we hereby consent to the incorporation of our report included in this Form 10-K/A Amendment No. 1 into the Company's previously filed Registration Statements File Nos. 33-65604, 33-66780, 33-51238, 33-59938, 33-64628, 33-64741 and 33-63523. ARTHUR ANDERSEN LLP Atlanta, Georgia February 20, 1996 -----END PRIVACY-ENHANCED MESSAGE-----