Document/Exhibit Description Pages Size
1: 10-Q Form 10-Q for Quarter Ended September 30, 1997 34 201K
2: EX-10.29 3rd Amd/Rstd Revolving Credit Agmt, 09/22/97 114 459K
3: EX-27.1 Financial Data Schedule 1 7K
10-Q — Form 10-Q for Quarter Ended September 30, 1997
Document Table of Contents
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED SEPTEMBER 30, 1997
COMMISSION FILE NO 1-13038
CRESCENT REAL ESTATE EQUITIES COMPANY
(formerly known as Crescent Real Estate Equities, Inc.)
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(Exact name of registrant as specified in its charter)
TEXAS 52-1862813
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
777 Main Street, Suite 2100, Fort Worth, Texas 76102
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(Address of principal executive offices)(Zip code)
Registrant's telephone number, including area code (817) 877-0477
Number of shares outstanding of each of the registrant's classes of common
shares, as of November 11, 1997
Common Shares, par value $.01 per share: 112,555,374
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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 twelve (12) months (or for such shorter period that the registrant
was required to file such report) and (2) has been subject to such filing
requirements for the past ninety (90) days.
YES [X] NO [ ]
CRESCENT REAL ESTATE EQUITIES COMPANY
FORM 10-Q
TABLE OF CONTENTS
[Enlarge/Download Table]
PART I: FINANCIAL INFORMATION PAGE
----
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of September 30, 1997 and December 31,
1996 (Audited)............................................................ 3
Consolidated Statements of Operations for the three and nine months
ended September 30, 1997 and 1996......................................... 4
Consolidated Statements of Cash Flows for the nine months ended
September 30, 1997 and 1996............................................... 5
Notes to Financial Statements............................................. 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Historical Results of Operations............................ 18
Item 3. Quantitative and Qualitative Disclosures About Market Risk............... 31
PART II: OTHER INFORMATION
Item 1. Legal Proceedings......................................................... 31
Item 2. Changes in Securities..................................................... 31
Item 3. Defaults Upon Senior Securities........................................... 31
Item 4. Submission of Matters to a Vote of Security Holders....................... 31
Item 5. Other Information......................................................... 31
Item 6. Exhibits and Reports on Form 8-K.......................................... 31
2
CRESCENT REAL ESTATE EQUITIES COMPANY
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(NOTE 1)
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SEPTEMBER 30, DECEMBER 31,
1997 1996
------------ ------------
(UNAUDITED) (AUDITED)
ASSETS:
Investments in real estate:
Land $ 418,625 $ 146,036
Building and improvements 2,647,981 1,561,639
Furniture, fixtures and equipment 47,137 24,951
Less - accumulated depreciation (256,204) (208,808)
------------ ------------
Net investment in real estate 2,857,539 1,523,818
Cash and cash equivalents 47,082 25,592
Restricted cash and cash equivalents 32,462 36,882
Accounts receivable, net 24,010 15,329
Deferred rent receivable 30,649 16,217
Investments in real estate mortgages and common
stock of unconsolidated companies 369,779 41,059
Notes receivable, net 163,219 28,890
Other assets, net 87,293 43,135
------------ ------------
Total assets $ 3,612,033 $ 1,730,922
============ ============
LIABILITIES:
Borrowings under Credit Facility $ 316,500 $ 40,000
Notes payable 1,460,404 627,808
Accounts payable, accrued expenses and other liabilities 88,230 48,462
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Total liabilities 1,865,134 716,270
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MINORITY INTERESTS:
Operating partnership, 6,445,227 and 6,640,336 units,
respectively 110,648 120,227
Investment joint ventures 28,396 29,265
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Total minority interests 139,044 149,492
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SHAREHOLDERS' EQUITY:
Common stock, $.01 par value, authorized 250,000,000 shares, 102,442,050 and
36,146,380 shares issued and outstanding
at September 30, 1997 and December 31, 1996, respectively 1,024 361
Additional paid-in capital 1,666,978 905,724
Deferred compensation on restricted shares (283) (364)
Retained deficit (59,864) (40,561)
------------ ------------
Total shareholders' equity 1,607,855 865,160
------------ ------------
Total liabilities and shareholders' equity $ 3,612,033 $ 1,730,922
============ ============
The accompanying notes are integral part of these financial statements.
3
CRESCENT REAL ESTATE EQUITIES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(NOTE 1)
[Enlarge/Download Table]
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
---------------------------- ----------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
(UNAUDITED) (UNAUDITED)
REVENUES:
Office and retail properties $ 92,014 $ 43,255 $ 247,333 $ 120,080
Hotel properties 9,032 5,051 26,453 13,775
Behavioral healthcare properties 13,824 -- 15,966 --
Interest and other income 5,187 1,062 13,508 3,572
------------ ------------ ------------ ------------
Total revenues 120,057 49,368 303,260 137,427
------------ ------------ ------------ ------------
EXPENSES:
Real estate taxes 10,607 5,077 28,229 13,454
Repairs and maintenance 6,301 2,369 17,244 7,248
Other rental property operating 22,500 9,452 59,100 27,294
Corporate general and administrative 2,372 1,199 9,855 3,498
Interest expense 23,075 11,843 54,687 30,861
Amortization of deferred financing costs 937 745 2,157 2,065
Depreciation and amortization 20,549 11,058 50,840 29,339
------------ ------------ ------------ ------------
Total expenses 86,341 41,743 222,112 113,759
------------ ------------ ------------ ------------
Operating income 33,716 7,625 81,148 23,668
OTHER INCOME:
Equity in net income of unconsolidated
companies 1,119 892 3,118 3,067
------------ ------------ ------------ ------------
INCOME BEFORE MINORITY INTERESTS AND
EXTRAORDINARY ITEM 34,835 8,517 84,266 26,735
Minority interests (4,432) (2,239) (12,018) (5,858)
------------ ------------ ------------ ------------
INCOME BEFORE EXTRAORDINARY ITEM 30,403 6,278 72,248 20,877
Extraordinary item -- -- -- (1,306)
------------ ------------ ------------ ------------
NET INCOME $ 30,403 $ 6,278 $ 72,248 $ 19,571
============ ============ ============ ============
PER SHARE DATA:
Income before extraordinary item $ 0.30 $ 0.13 $ 0.83 $ 0.44
Extraordinary item -- -- -- (0.02)
------------ ------------ ------------ ------------
Net income $ 0.30 $ 0.13 $ 0.83 $ 0.42
============ ============ ============ ============
WEIGHTED AVERAGE
SHARES OUTSTANDING 99,894,600 47,190,564 87,364,374 47,127,264
============ ============ ============ ============
The accompanying notes are integral part of these financial statements.
4
CRESCENT REAL ESTATE EQUITIES COMPANY
CONSOLIDATED STATEMENTS OF CASHFLOWS
(DOLLARS IN THOUSANDS)
(NOTES 1 AND 3)
[Enlarge/Download Table]
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
----------------------------
(UNAUDITED)
1997 1996
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 72,248 $ 19,571
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 52,997 31,404
Minority interest 12,018 5,858
Extraordinary item -- 1,306
Non-cash compensation 157 91
Equity in earnings in excess of distributions
received from unconsolidated companies (252) (363)
Increase in accounts receivable (8,681) (3,997)
Increase in deferred rent receivable (14,432) (2,932)
Increase in other assets (23,879) (1,445)
Decrease in restricted cash and cash equivalents 4,944 1,451
Increase (decrease) in accounts payable, accrued
expenses and other liabilities 39,768 (1,394)
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Net cash provided by operating activities 134,888 49,550
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CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of investment properties (1,356,266) (173,091)
Capital expenditures - rental properties (14,497) (4,504)
Tenant improvement and leasing costs - rental properties (27,121) (8,738)
(Increase) decrease in restricted cash and cash equivalents (524) 1,682
Investment in unconsolidated companies (328,468) (18,924)
Increase in escrow deposits - acquisition of investment
properties (4,190) (6,350)
Increase in notes receivable (134,329) (11,525)
------------ ------------
Net cash used in investing activities (1,865,395) (221,450)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt financing costs (11,329) (4,317)
Borrowings under Credit Facility 612,500 172,500
Payments under Credit Facility (336,000) (20,000)
Debt proceeds 990,696 124,638
Debt payments (158,100) (57,184)
Capital contributions - joint venture -- 750
Capital distributions - joint venture (2,061) (988)
Proceeds from common shares offering 760,460 --
Proceeds from exercise of share options 953 --
Issuance of partnership units -- 1,574
Distribution of Crescent Operating, Inc. shares to
unitholders of Operating Partnership and
shareholders of Crescent Equities (11,907) --
Dividends and unitholder distributions (93,215) (47,637)
------------ ------------
Net cash provided by financing activities 1,751,997 169,336
------------ ------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 21,490 (2,564)
CASH AND CASH EQUIVALENTS,
Beginning of period 25,592 16,931
------------ ------------
CASH AND CASH EQUIVALENTS,
End of period $ 47,082 $ 14,367
============ ============
The accompanying notes are integral part of these financial statements.
5
CRESCENT REAL ESTATE EQUITIES COMPANY
NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
1. ORGANIZATION AND BASIS OF PRESENTATION:
ORGANIZATION
Crescent Real Estate Equities Company ("Crescent Equities" and,
together with its subsidiaries, the "Company") is a fully integrated real estate
company operating as a real estate investment trust for federal income tax
purposes (a "REIT"). The Company provides management, leasing, and development
services with respect to certain of its properties. Crescent Equities is a Texas
real estate investment trust which became the successor to Crescent Real Estate
Equities, Inc., a Maryland corporation (the "Predecessor Corporation"), on
December 31, 1996, through the merger (the "Merger") of the Predecessor
Corporation and CRE Limited Partner, Inc., a Delaware corporation, into Crescent
Equities. The direct and indirect subsidiaries of Crescent Equities include
Crescent Real Estate Equities Limited Partnership (the "Operating Partnership");
Crescent Real Estate Equities, Ltd. (the "General Partner"), which is the sole
general partner of the Operating Partnership; seven single purpose limited
partnerships (formed for the purpose of obtaining securitized debt) in which the
Operating Partnership owns substantially all of the economic interests directly
or indirectly, with the remaining interests owned indirectly by the Company
through seven separate corporations, each of which is a wholly owned subsidiary
of the General Partner and a general partner of one of the seven limited
partnerships. The term "Company" includes, unless the context otherwise
requires, Crescent Equities, the Predecessor Corporation, the Operating
Partnership, and the other subsidiaries of the Company.
As of September 30, 1997, the Company directly or indirectly owned a
portfolio of real estate assets (the "Properties") located primarily in 20
metropolitan submarkets in Texas and Colorado. The Properties include 76 office
properties (the "Office Properties") with an aggregate of approximately 24.7
million net rentable square feet, 91 behavioral healthcare facilities
("Behavioral Healthcare Facilities"), five full-service hotels with a total of
1,900 rooms and two destination health and fitness resorts (the "Hotel
Properties"), seven retail properties (the "Retail Properties") with an
aggregate of approximately .8 million net rentable square feet and real estate
mortgages and non-voting common stock representing economic interest ranging
from 42.5% to 98% in five unconsolidated residential development corporations
(the "Residential Development Corporations"). The Company also, has a 42.5%
partnership interest in an unconsolidated entity whose primary holdings consist
of a 364-room executive conference center and general partner interests ranging
from one to 50%, in additional office, retail, multi-family and industrial
properties.
The Company owns its assets and carries on its operations and other
activities through the Operating Partnership and its other subsidiaries.
The following table sets forth, by subsidiary, the Properties owned by
such subsidiary as of September 30, 1997:
Operating Partnership: The Addison, Addison Tower, The Amberton, AT&T Building,
Bank One Tower, Canyon Ranch-Tucson, Cedar Springs
Plaza, Central Park Plaza, Chancellor Park(1), Concourse
Office Park, Denver Marriott City Center, Four Seasons
Hotel-Houston, Frost Bank Plaza, Greenway I and IA,
Greenway II, Houston Center Office Properties, MCI
Tower, The Meridian, Miami Center, One Preston Park,
Palisades Central I, Palisades Central II, The Park
Shops in Houston Center, Reverchon Plaza, Sonoma Mission
Inn & Spa, Spectrum Center(2), Stemmons Place, Three
Westlake Park(3), Trammell Crow Center(4), The Woodlands
Office Properties(5), The Woodlands Retail
Properties(5), Valley Centre, Walnut Green, 44 Cook, 55
Madison, 160 Spear Street, 301 Congress Avenue(6), 1615
Poydras, 3333 Lee Parkway, 5050 Quorum, and 6225 North
24th Street
Crescent Real Estate The Aberdeen, The Avallon, Caltex House, The Citadel,
Funding I, L.P.: Continental Plaza, The Crescent Atrium, The Crescent
("Funding I") Office Towers, Regency Plaza One, and Waterside Commons
6
Crescent Real Estate Albuquerque Plaza, Barton Oaks Plaza One, Briargate
Funding II, L.P.: Office and Research Center, Hyatt Regency Albuquerque,
("Funding II") Hyatt Regency Beaver Creek, Las Colinas Plaza, Liberty
Plaza I & II, MacArthur Center I & II, Ptarmigan Place,
Stanford Corporate Centre, Two Renaissance Square, and
12404 Park Central
Crescent Real Estate Greenway Plaza Portfolio(7)
Funding III, IV, and
V, L.P.: ("Funding
III, IV and V")
Crescent Real Estate Canyon Ranch-Lenox
Funding VI, L.P.:
("Funding VI")
Crescent Real Estate Behavioral Healthcare Facilities
Funding VII, L.P.:
("Funding VII")
-------------
(1) The Operating Partnership owns Chancellor Park through its ownership of a
mortgage note secured by the building and through its direct and indirect
interests in the partnership which owns the building.
(2) The Operating Partnership owns the principal economic interest in Spectrum
Center through an interest in the limited partnership which owns both a
mortgage note secured by Spectrum Center and the ground lessor's interest in
the land underlying the building.
(3) The Operating Partnership owns the principal economic interest in Three
Westlake Park through its ownership of a mortgage note secured by Three
Westlake Park.
(4) The Operating Partnership owns the principal economic interest in Trammell
Crow Center through its ownership of fee simple title to the property
(subject to a ground lease and a leasehold estate regarding the building)
and two mortgage notes encumbering the leasehold interests in the land and
building.
(5) The Operating Partnership owns a 75% limited partner interest and an
indirect approximately 10% general partner interest in the partnerships that
own The Woodlands Office and Retail Properties.
(6) The Operating Partnership owns a 49% limited partner interest and
Crescent/301, L.L.C., a wholly owned subsidiary of the General Partner and
the Operating Partnership, owns a 1% general partner interest in 301
Congress Avenue, L.P., the partnership that owns 301 Congress Avenue.
(7) Funding III owns the Greenway Plaza Portfolio, except for the central heated
and chilled water plant building and Coastal Tower Office property, both
located within Greenway Plaza, which are owned by Funding IV and Funding V,
respectively.
BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In management's opinion, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation of the
unaudited interim financial statements have been included. Operating results for
interim periods reflected are not necessarily indicative of the results that may
be expected for a full fiscal year. These financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's Form 10-K.
Certain reclassifications have been made to previously reported amounts to
conform with current presentation.
2. NEW ACCOUNTING PRONOUNCEMENT:
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" ("EPS") ("SFAS
128") which supersedes APB No. 15 for periods ending after December 15, 1997.
SFAS 128 specifies the computation, presentation and disclosure requirements for
earnings per share. Primary EPS and Fully Diluted EPS are replaced by Basic EPS
and Diluted EPS, respectively. Basic EPS, unlike Primary EPS, excludes all
dilution while Diluted EPS, like Fully Diluted EPS, reflects the potential
dilution that could occur if securities or other contracts to issue common
shares were exercised or converted into common shares. The Company does not
expect the effect of its adoption of SFAS 128 to be material.
7
3. SUPPLEMENTAL DISCLOSURES TO STATEMENTS OF CASH FLOWS:
[Enlarge/Download Table]
Nine months ended
September 30,
-----------------
1997 1996
------- -------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest paid $52,594 $30,930
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Two-for-one stock split $ 361 $ --
Conversion of operating partnership units to common shares with resulting
reduction in minority interest and increases in common share and
additional paid-in capital $ 426 $ 857
Minority interest - joint venture capital $ -- $21,635
Issuance of operating partnership units in conjunction
with property acquisition $ -- $27,056
4. INVESTMENTS IN REAL ESTATE MORTGAGES AND COMMON STOCK OF UNCONSOLIDATED
COMPANIES:
The Company reports its share of income and losses based on its ownership
interest in the respective equity investments. The following summarized
information for all unconsolidated companies (see Note 1) has been presented on
an aggregated basis as of September 30, 1997.
[Download Table]
For the three For the nine
months ended months ended
September 30, 1997 September 30, 1997
------------------ ------------------
Total revenues $ 27,685 $ 34,105
Total expenses 26,247 30,853
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Net income $ 1,438 $ 3,252
======== ========
Company equity in net income
of unconsolidated companies $ 1,119 $ 3,118
======== ========
8
5. NOTES PAYABLE AND BORROWINGS UNDER CREDIT FACILITY:
Following is a summary of the Company's debt financing:
[Enlarge/Download Table]
September 30,
1997
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Note payable to LaSalle National Bank, as Trustee for Commercial Mortgage
Pass-Through Certificates, Series 1995-MD IV ("LaSalle Note I") bears interest
at 7.83% with an initial seven-year interest-only term (through August 2002),
followed by principal amortization based on a 25-year amortization schedule
through maturity in August 2027 (1), secured by the Funding I
properties ..................................................................... $239,000
Note payable to LaSalle National Bank, as Trustee for Commercial Mortgage
Pass-Through Certificates, Series 1996-MD V ("LaSalle Note II") bears interest
at 7.79% with an initial seven-year interest-only term (through March 2003),
followed by principal amortization based on a 25-year amortization schedule
through maturity in March 2028(2), secured by the Funding II
properties ..................................................................... 161,000
Note payable to LaSalle National Bank, as Trustee for Commercial Mortgage
Pass-Through Certificates, Series 1994-MD II ("LaSalle Note III") due July 1999,
bears interest at 30-day LIBOR plus a weighted average rate of 2.135% (at
September 30, 1997 the rate was 7.82% subject to a rate cap of 10%) with a
five-year interest-only term, secured by the Funding III, IV and V
properties ..................................................................... 115,000
Note payable to Connecticut General Life Insurance Company ("CIGNA") due
December 2002, bears interest at 7.47% with a seven-year interest-only term,
secured by the MCI Tower and Denver Marriott City Center properties ............ 63,500
Note payable to Northwestern Mutual Life Insurance Company due January 2004,
bears interest at 7.66% with a seven-year interest-only term, secured by the 301
Congress Avenue property ....................................................... 26,000
Note payable to Metropolitan Life Insurance Company due September 2001, bears
interest at 8.88% with monthly principal and interest payments, secured by five
of The Woodlands Office Properties ............................................. 12,188
Note payable to Nomura Asset Capital Corporation ("Nomura Funding VI Note")
bears interest at 10.07% with monthly principal and interest payments based on a
25-year amortization schedule through July 2020(3), secured by the Funding VI
property ....................................................................... 8,716
Short-term unsecured note payable to BankBoston, N.A. ("BankBoston") due
October 1997, bears interest at Eurodollar rate plus 137.5 basis points (at
September 30, 1997, the rate was 7.03%) ........................................ 235,000(4)
Short-term unsecured note payable to BankBoston due August 1998, bears interest
at Eurodollar rate plus 120 basis points (at September 30, 1997, the rate was
6.86%) ........................................................................ 200,000
9
[Enlarge/Download Table]
September 30,
1997
-----------------
Senior unsecured notes to State Street Bank & Trust Company of Missouri,
N.A., as Trustee, bear interest at a fixed rate of 6.63% with a five-year
interest-only term, due September 2002 (see description of Notes offering
below) .................................................................... 150,000
Senior unsecured notes to State Street Bank & Trust Company of Missouri,
N.A., as Trustee, bear interest at a fixed rate of 7.13% with a ten-year
interest-only term, due September 2007 (see description of Notes offering
below) .................................................................... 250,000
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Total Notes Payable ....................................................... $1,460,404
==========
(1) In August 2007, the interest rate increases, and the Company is
required to remit, in addition to the monthly debt service payment,
excess property cash flow, as defined, to be applied first against
principal until the note is paid in full and thereafter, against
accrued excess interest, as defined. It is the Company's intention to
repay the note in full at such time (August 2007) by making a final
payment of approximately $220,000.
(2) In March 2006, the interest rate increases, and the Company is required
to remit, in addition to the monthly debt service payment, excess
property cash flow, as defined, to be applied first against principal
until the note is paid in full and thereafter, against accrued excess
interest, as defined. It is the Company's intention to repay the note
in full at such time (March 2006) by making a final payment of
approximately $154,000.
(3) In July 1998, the Company may defease the note by purchasing Treasury
obligations to pay the note without penalty. In July 2010, the interest
rate due under the note will change to a 10-year Treasury yield plus
500 basis points or, if the Company so elects, it may repay the note
without penalty.
(4) On October 15, 1997, the note was repaid in full through a draw under
the Company's Credit Facility (see Note 11 - October 1997 Offering).
On September 22, 1997, the Company's line of credit from a consortium
of banks led by BankBoston (the "Credit Facility") was increased to $450,000 to
enhance the Company's financial flexibility in making new real estate
investments. Concurrently with such increase, the interest rate on advances
under the Credit Facility was decreased from the Eurodollar rate plus 137.5
basis points to the Eurodollar rate plus 120 basis points. The Credit Facility
is unsecured and expires in June 2000. The Credit Facility requires the Company
to maintain compliance with a number of customary financial and other covenants
on an ongoing basis, including leverage ratios based on book value and debt
service coverage ratios, limitations on additional secured and total
indebtedness and distributions, and a minimum net worth requirement. As of
September 30, 1997, the Company was in compliance with all covenants. As of
September 30, 1997, the interest rate was 6.86% and the outstanding balance was
$316,500, with availability of $133,500.
On September 22, 1997, the Operating Partnership completed a private
note offering of senior unsecured notes in an aggregate principal amount of
$400,000 (the "Notes"). The Notes were issued in two series, the 6 5/8%,
$150,000 notes with maturity on September 15, 2002, yielding a 6.73% effective
rate (the "2002 Notes") and the 7 1/8%, $250,000 notes with maturity on
September 15, 2007, yielding a 7.151% effective rate (the "2007 Notes"). The
Notes pay interest semi-annually in arrears. The interest rate on the Notes is
subject to temporary increase by 50 basis points in the event that a registered
offer to exchange the Notes for notes of the Operating Partnership with terms
identical in all material respects to the Notes is not consummated or a shelf
registration statement with respect to the resale of the Notes is not declared
effective by the Securities and Exchange Commission (the "SEC") on or before the
180th day following the date of original issuance of the Notes. The interest
rate on the Notes also is subject to temporary or permanent increase by 37.5
basis points in the event that, within the period from the date of original
issuance of the Notes to the first anniversary of original issuance, the Notes
are assigned a rating that is not an investment grade rating (as defined in the
Notes) or are not assigned or do not retain, a rating by specified rating
agencies. These adjustments may apply simultaneously.
The Notes are redeemable, in whole or in part, at the option of the
Operating Partnership upon payment of principal, accrued and unpaid interest,
and the premium specified in the Notes. The Notes also
10
contain certain covenants, including limitations on the ability of the Operating
Partnership and its subsidiaries to incur additional debt, other than certain
intercompany debt that is subordinate to payment of the Notes, unless certain
asset and income tests are satisfied.
The net proceeds of the Notes offering were used to fund the
approximately $327,600 purchase price of Houston Center, to repay approximately
$50,000 of borrowings under the Credit Facility, to fund
approximately $10,000 of the purchase price of Miami Center, and to repay
approximately $7,200 of short term indebtedness.
6. MINORITY INTERESTS:
Minority interests represents (i) the limited partnership interests
owned by unitholders in the Operating Partnership ("units") and (ii) joint
venture interests held by outside interests. Due to the March 26, 1997
two-for-one stock split, the exchange factor has been adjusted in accordance
with the Operating Partnership's limited partnership agreement and each unit may
be exchanged for either two common shares or, at the election of the Company,
cash equal to the fair market value of two common shares at the time of the
exchange. When a unitholder exchanges a unit, the Company's investment in the
Operating Partnership is increased. During the nine months ended September 30,
1997, there were 18,551 units exchanged for 37,102 common shares.
7. SHAREHOLDERS' EQUITY:
On February 4, 1997, the Company paid a cash dividend and unitholder
distribution of $26,100 or $.61 per share and equivalent unit, to shareholders
and unitholders of record on January 21, 1997. The dividend represented an
annualized distribution of $2.44 per share and equivalent unit.
On March 2, 1997, the Company declared a two-for-one stock split in the
form of a 100% share dividend. The share dividend was paid on March 26, 1997 to
shareholders of record on March 20, 1997.
On April 28, 1997, the Company completed an offering (the "April 1997
Offering") of 24,150,000 common shares (including the underwriters'
overallotment option) at $25.375 per share. Net proceeds from the April 1997
Offering to the Company after underwriting discount of $29,222 and other
offering costs of $3,000 were approximately $580,584. On May 14, 1997, the
Company completed an additional offering of 500,000 common shares to several
underwriters who participated in the April 1997 Offering. The common shares were
sold at $25.875 per share, totaling gross proceeds of approximately $12,938
(collectively, the "Offerings").
In the second quarter of 1997, the Company used net proceeds of
$593,522 from the Offerings and approximately $314,700 from borrowings under the
Credit Facility and $160,000 of short-term borrowings from BankBoston (i) to
fund approximately $30,000 in connection with the formation and capitalization
of Crescent Operating, Inc. ("Crescent Operating"); (ii) to repay the $150,000
BankBoston short-term note payable; (iii) to reduce by $131,000 borrowings under
the Credit Facility; (iv) to fund approximately $306,300 of the purchase price
of the Carter-Crowley Portfolio (as defined in Note 9) acquired by the Company;
and (v) to fund the commitments of the Company and Crescent Operating related to
the Magellan transaction totaling approximately $419,700. The remaining $31,222
has been used for working capital purposes.
On May 14, 1997, the Company paid a cash dividend and unitholder
distribution of $33,476 or $.305 per share and equivalent unit, to shareholders
and unitholders of record on April 30, 1997. The dividend represented an
annualized distribution of $1.22 per share and equivalent unit.
On July 23, 1997, the Company sold to Merrill Lynch & Co. 351,185
common shares at $28.475 per share (the "Merrill Offering"). The proceeds were
used to repay approximately $10,000 of borrowings under the Credit Facility.
11
On August 5, 1997, the Company paid a cash dividend and unitholder
distribution of $33,639 or $.305 per share and equivalent unit, to shareholders
and unitholders of record on July 16, 1997. The dividend represented an
annualized distribution of $1.22 per share and equivalent unit.
On August 12, 1997, the Company entered into two transactions with
affiliates of Union Bank of Switzerland ("UBS"). In one transaction, the Company
sold 4,700,000 common shares at $31.5625 per share to UBS Securities, LLC for
approximately $148 million (approximately $145 million of net proceeds) ("UBS
Offering"). In the other transaction, the Company entered into a forward share
purchase agreement with Union Bank of Switzerland, London Branch ("UBS-LB")
which provides that the Company will purchase 4,700,000 common shares from
UBS-LB within one year. The purchase price will be determined on the date the
Company settles the agreement and will include a forward accretion component,
minus an adjustment for the Company's distribution rate. The Company may
complete the settlement for cash or common shares at its option. The net
proceeds were used to repay borrowings under the Credit Facility.
On September 22, 1997, in connection with the acquisition of Houston
Center, the Company sold to the seller of Houston Center, 307,831 common shares
at $32.485 per share (the "HC Offering"). The proceeds were used to repay
approximately $10,000 of borrowings under the Credit Facility.
8. FORMATION AND CAPITALIZATION OF CRESCENT OPERATING, INC.
In April 1997, the Company established a new Delaware Corporation,
Crescent Operating. All of the outstanding common stock of Crescent Operating
was distributed, effective June 12, 1997, to those persons who were limited
partners of the Operating Partnership or shareholders of the Company on May 30,
1997, in a spin-off.
Crescent Operating was formed to become a lessee and operator of
various assets and to perform the Intercompany Agreement between Crescent
Operating and the Company, pursuant to which each has agreed to provide the
other with rights to participate in certain transactions. As a result of the
formation of Crescent Operating and the execution of the Intercompany Agreement,
persons who own equity interests in both Crescent Operating and the Company have
the opportunity to participate in the benefits of both the real estate
investments of the Company (including ownership of real state assets) and the
lease of certain of such assets and the ownership of other non-real estate
assets by Crescent Operating. The certificate of incorporation, as amended and
restated, of Crescent Operating generally prohibits Crescent Operating for so
long as the Intercompany Agreement remains in effect, from engaging in
activities or making investments that a REIT could make, unless the Company was
first given the opportunity but elected not to pursue such activities or
investments.
In connection with the formation and capitalization of Crescent
Operating, the Company provided to Crescent Operating approximately $50,000 in
the form of cash contributions and loans to be used by Crescent Operating to
acquire certain assets described in Note 9. The Company also made available to
Crescent Operating a line of credit in the amount of $20,400 to be used by
Crescent Operating to fulfill certain ongoing obligations associated with these
assets.
9. ACQUISITIONS:
Greenway II. On January 17, 1997, the Company acquired Greenway II, a
seven-story Class A office building containing approximately 154,000 net
rentable square feet and located in the Richardson/Plano submarket of Dallas,
Texas. The purchase price was approximately $18,200, which was funded through a
draw under the Credit Facility.
Trammell Crow Center. On February 28, 1997, the Company acquired
substantially all of the economic interest in Trammell Crow Center, a 50-story
Class A office building, which contains approximately 1,128,000 net rentable
square feet. The property is located in the cultural and financial district of
the Central Business District ("CBD") submarket of Dallas, Texas. The Company
acquired its interest in Trammell Crow Center through the purchase of fee simple
title to the property (subject to a
12
ground lease and a leasehold estate regarding the building) and two mortgage
notes encumbering the leasehold interests in the land and building. The purchase
price was approximately $162,000, of which $150,000 was funded through proceeds
from an unsecured, short-term loan with BankBoston and the remaining balance of
$12,000 through a draw under the Credit Facility.
Denver Properties. On February 28, 1997, the Company acquired three
office buildings in Denver, Colorado, in a single transaction: 44 Cook, 55
Madison and the AT&T Building. 44 Cook, a 10-story Class A office building
containing approximately 119,000 net rentable square feet, and 55 Madison, an
eight-story Class A office building containing approximately 125,000 net
rentable square feet, are both located in the Cherry Creek submarket of Denver,
Colorado. The AT&T Building, a 15-story office building, contains approximately
170,000 net rentable square feet and is located in the Denver CBD submarket. The
three office properties were acquired for an aggregate purchase price of
approximately $42,675, which was funded through a draw under the Credit
Facility.
Carter-Crowley Portfolio. On February 10, 1997, the Company entered
into a contract to acquire for approximately $383,300, substantially all of the
assets (the "Carter-Crowley Portfolio") of Carter-Crowley Properties, Inc.
("Carter-Crowley"), an unaffiliated company controlled by the family of Donald
J. Carter. At the time the contract was executed, the Carter-Crowley Portfolio
included 14 office properties (the "Carter-Crowley Office Portfolio"), with an
aggregate of approximately 3.0 million net rentable square feet, approximately
1,216 acres of commercially zoned, undeveloped land located in the Dallas/Fort
Worth metropolitan area, two multifamily residential properties located in the
Dallas/Fort Worth metropolitan area, marketable securities, an approximately 12%
limited partner interest in the limited partnership that owns the Dallas
Mavericks NBA basketball franchise, secured and unsecured promissory notes,
certain direct non-operating working interests in various oil and gas wells, an
approximately 35% limited partner interest in two oil and gas limited
partnerships, and certain other assets (including operating businesses).
Pursuant to an agreement between Carter-Crowley and the Company, Carter-Crowley
liquidated approximately $51,000 of such assets originally included in the
Carter-Crowley Portfolio, consisting primarily of the marketable securities and
the oil and gas investments, resulting in a reduction in the total purchase
price by a corresponding amount to approximately $332,300. On May 9, 1997, the
Company and Crescent Operating acquired the Carter-Crowley Portfolio.
The Company acquired certain assets from the Carter-Crowley Portfolio,
with an aggregate purchase price of approximately $306,300, consisting primarily
of the Carter-Crowley Office Portfolio, the two multifamily residential
properties, the approximately 1,216 acres of undeveloped land and the secured
and unsecured promissory notes relating primarily to the Dallas Mavericks. In
addition to the promissory notes relating to the Dallas Mavericks, the Company
obtained rights from the current holders of the majority interest in the Dallas
Mavericks to a contingent $10,000 payment after a new arena is constructed
within a 75-mile radius of Dallas.
Crescent Operating purchased the remainder of the Carter-Crowley
Portfolio utilizing cash contributions and loan proceeds provided to Crescent
Operating by the Company. These assets, which have an allocated cost of
approximately $26,000, consisted primarily of the approximately 12% limited
partner interest in the limited partnership that owns the Dallas Mavericks, an
approximately 1% interest in a private venture capital fund, and a 100% interest
in a construction equipment sale, leasing and services company.
Dallas Mavericks Interest. On June 11, 1997, DBL Holdings, Inc.
("DBL"), a wholly owned subsidiary of the Operating Partnership was formed. In
connection with the formation of DBL, the Operating Partnership acquired all the
voting and non-voting common stock of DBL, for an aggregate purchase price of
approximately $2,500 and loaned to DBL approximately $10,100. The voting common
stock, which represented a 5% effective interest in DBL, was subsequently sold
to Gerald W. Haddock , the President and Chief Executive Officer of the Company
and Crescent Operating, and John C. Goff, the Vice Chairman of the Company and
Crescent Operating, for $126. On June 11, 1997, DBL acquired from Crescent
Operating, for approximately $12,550, the limited partner interest in the
partnership that owns the Dallas Mavericks.
13
Magellan Transaction. On June 17, 1997, the Company acquired
substantially all of the real estate assets of the domestic hospital provider
business of Magellan Health Services, Inc. ("Magellan"), as previously owned and
operated by a wholly owned subsidiary of Magellan. The Magellan transaction
involved various components, certain of which related to the Company and certain
of which related to Crescent Operating.
The total purchase price of the assets acquired in the Magellan
transaction was approximately $419,700. Of this amount, the Company paid
approximately $387,200 for the acquisition of the 91 Behavioral Healthcare
Facilities (and one additional behavioral healthcare facility, which
subsequently was sold) and $12,500 for the acquisition of warrants to purchase
1,283,311 shares of common stock of Magellan. Crescent Operating paid $5,000 for
its interest in Charter Behavioral Health Systems, LLC, a limited liability
company ("CBHS"), $12,500 for the acquisition of warrants to purchase 1,283,311
shares of common stock of Magellan and $2,500 to CBHS after the closing. CBHS is
owned 50% by Crescent Operating and 50% by a wholly owned subsidiary of
Magellan, subject to potential dilution of each by up to 5% in connection with
future incentive compensation of management of CBHS.
The principal component of the transaction was the Company's
acquisition of the Behavioral Healthcare Facilities, which are leased to CBHS,
and the subsidiaries of CBHS, under a triple-net lease. The lease requires the
payment of annual minimum rent in the amount of $41,700, increasing in each
subsequent year during the 12-year term at a 5% compounded annual rate. The
lease provides for four, five-year renewal options. All maintenance and capital
improvement costs are the responsibility of CBHS during the term of the lease.
In addition, CBHS is required to pay annually an additional $20,000 under the
lease, at least $10,000 of which must be used, as directed by CBHS, for capital
expenditures each year and up to $10,000 of which may be used, if requested by
CBHS, to cover capital expenditures, property taxes, insurance premiums, and
franchise fees.
Woodlands Transaction. On July 31, 1997, the Company and certain Morgan
Stanley funds (the "Morgan Stanley Group") acquired The Woodlands Corporation, a
subsidiary of Mitchell Energy Corporation, for approximately $543,000. In
connection with the acquisition, the Company and the Morgan Stanley Group made
equity investments of approximately $80,000 and $109,000, respectively. The
Company's contribution was funded through the $235,000 BankBoston loan. The
remaining approximately $354,000 and associated acquisition and financing costs
of approximately $15,000 were financed by the two limited partnerships,
described below, through which the investment was made. The Woodlands
Corporation was the principal owner, developer and operator of The Woodlands, an
approximately 27,000-acre, master-planned residential and commercial community
located 27 miles north of downtown Houston, Texas. The Woodlands which is
approximately 50% developed, includes a shopping mall, retail centers, office
buildings, a hospital, club facilities, a community college, a performance
pavilion, and numerous other amenities.
The acquisition was made through The Woodlands Commercial Properties
Company, L.P. ("Woodlands-CPC"), a limited partnership in which the Morgan
Stanley Group holds a 57.5% interest and the Company holds a 42.5% interest, and
the Woodlands Land Development Company, L.P. ("Woodlands-LDC"), a limited
partnership in which the Morgan Stanley Group holds a 57.5% interest and a newly
formed Residential Development Corporation, The Woodlands Land Company, Inc.
("WLC"), holds a 42.5% interest. The Company currently owns all of the
non-voting common stock, representing a 95% economic interest in WLC and,
effective September 29, 1997, Crescent Operating owns all of the voting common
stock, representing a 5% economic interest, in WLC. The Company is the managing
general partner of Woodlands-CPC and WLC is the managing general partner of
Woodlands-LDC.
In connection with the acquisition, Woodlands-CPC acquired The
Woodlands Corporation's 25% general partner interest in the partnerships that
own approximately 1.2 million square feet of The Woodlands Office and Retail
Properties. The Company previously held a 75% limited partner interest in each
of these partnerships and, as a result of the acquisition, the Company's
indirect economic ownership interest in these Properties increased to
approximately 85%. The other assets acquired by Woodlands-CPC include a 364-room
executive conference center, a private golf and tennis club serving
approximately 1,600 members and offering 81 holes of golf, and approximately 400
acres of land that will support commercial development of more than 3.5 million
square feet of office, multi-family, industrial, retail and
14
lodging properties. In addition, Woodlands-CPC acquired The Woodlands
Corporation's general partner interests, ranging from one to 50%, in additional
office and retail properties and in multi-family and light industrial
properties. Woodlands-LDC acquired approximately 6,400 acres of land that will
support development of more than 20,000 lots for single-family homes and
approximately 2,500 acres of land that will support more than 21.5 million net
rentable square feet of commercial development. The executive conference
center, including the golf and tennis club and golf courses, is operated and
leased by a wholly owned subsidiary of a partnership owned 42.5% by a
subsidiary of Crescent Operating and 57.5% by the Morgan Stanley Group.
Desert Mountain. On August 29, 1997, the Company acquired, through a
newly formed Residential Development Corporation, Desert Mountain Development
Corporation ("DMDC"), the majority economic interest in Desert Mountain
Properties Limited Partnership ("DMPLP"), the partnership that owns Desert
Mountain, a master-planned, luxury residential and recreational community in
northern Scottsdale, Arizona. Desert Mountain is an 8,300-acre property that is
zoned for the development of approximately 4,500 lots, approximately 1,500 of
which have been sold. Desert Mountain also includes The Desert Mountain Club, a
private golf, tennis and fitness club serving over 1,600 members. The
partnership interest was acquired from a subsidiary of Mobil Land Development
Corporation for approximately $214,000, which was funded through the $200,000
BankBoston loan and a draw under the Credit Facility. The sole limited partner
of DMPLP is Sonora Partners Limited Partnership ("Sonora") whose principal owner
is Lyle Anderson, the original developer of Desert Mountain. A portion of
Sonora's interest in DMPLP is exchangeable for common shares of the Company.
Sonora currently owns a 7% economic interest in DMPLP, and DMDC, which is the
sole general partner of DMPLP, owns the remaining 93% economic interest. The
Company owns all of the non-voting common stock, representing a 95% economic
interest, and, effective September 29, 1997, Crescent Operating owns all of the
voting common stock, representing a 5% economic interest, in DMDC. The Company
also holds a residential development property mortgage on Desert Mountain.
Houston Center. On September 22, 1997, the Company acquired Houston
Center, an approximately 3.0 million square foot, mixed-use property located in
the CBD submarket of Houston, Texas. Houston Center consists of three high-rise
Class A office buildings aggregating approximately 2.8 million net rentable
square feet ("Houston Center Office Properties"), a 399-room Four Seasons
Hotel-Houston, 114 luxury apartments, The Park Shops in Houston Center (a retail
property containing approximately 191,000 net rentable square feet), and
approximately 20 acres of contiguous undeveloped commercial land. The aggregate
purchase price for Houston Center was approximately $327,600 which was funded
from the proceeds of the Notes offering (described in Note 5).
Miami Center. On September 30, 1997, the Company acquired Miami
Center, a 34-story Class A office building containing approximately 783,000 net
rentable square feet located in the Downtown-CBD submarket of Miami, Florida.
The Company acquired fee simple title, subject to a Condominium Declaration, to
Miami Center for approximately $131,500. The purchase price was funded through
an approximately $121,500 draw under the Credit Facility and $10,000 from
proceeds of the Notes offering. The Company owns the single condominium unit
that comprises the Miami Center office building and an unaffiliated party owns
the hotel unit. The Condominium Declaration grants each unit a 50% interest in
common areas, as well as in the common operating expenses of the condominium.
10. PRO FORMA FINANCIAL INFORMATION
The pro forma financial information for the nine months ended September
30, 1997 and 1996 assumes the completion, in each case as of January 1, 1996, of
(i) the 11,500,000 common share offering on October 2, 1996 and the additional
450,000 common share offering on October 9, 1996; (ii) the Offerings; (iii) the
Merrill Offering; (iv) the UBS Offering; (v) the Notes offering; (vi) the HC
Offering; (vii) the 1996 and 1997 completed acquisitions inclusive of subsequent
events (see Note 11), except for the Refrigerated Warehouses transaction
(collectively referred to as the, "Acquisitions"); and (viii) the October 1997
Offering (as defined in Note 11). Proforma information assumes as of January 1,
1996, all offering proceeds were used for repayment of indebtedness for
Acquisitions.
15
[Enlarge/Download Table]
Nine Months Ended Nine Months Ended
September 30,1997 September 30,1996
----------------- -----------------
Total revenue .............................................. $437,619 $408,865
Operating income ............................................. $100,440 $ 79,165
Income before minority interests
and extraordinary item .................................. $120,339 $ 95,185
Net income ................................................... $107,694 $ 84,109
Per share:
Income before extraordinary item ........................ $ .96 $ .76
Net income .............................................. $ .96 $ .75
The pro forma operating results combine the Company's historical
operating results with the historical incremental rental income and operating
expenses including an adjustment for depreciation based on the acquisition price
associated with the Office and Retail Property acquisitions. Pro forma
adjustments primarily represent the following: (i) rental income to the Company
from the hotels acquired during 1996 and 1997, based on the lease payments from
the hotel lessees and calculated on a pro forma basis by applying the rent
provisions (as set forth in the lease agreements); (ii) rental income based on
the lease payment from CBHS to the Company by applying the rent provisions (as
set forth in the lease agreement); (iii) adjustment for depreciation expense for
Hotel Properties and Magellan Facilities; (iv) adjustment for equity in net
income for the Woodlands and Desert Mountain transactions; (v) interest income
for the notes acquired in the Carter-Crowley transaction, the loans to Crescent
Operating and the loans to DMPL; and (vi) interest costs assuming the borrowings
to finance acquisitions and assumption of debt for property acquisitions.
These pro forma amounts are not necessarily indicative of what the
actual financial position of the Company would have been assuming the above
investments had been consummated as of the beginning of the period, nor do they
purport to represent the future financial position of the Company.
11. SUBSEQUENT EVENTS
Distribution. On September 10, 1997, the Company declared a cash
distribution of $.38 per share and equivalent unit, to shareholders and
unitholders of record on October 16, 1997. The cash dividend and unitholder
distribution were paid on November 4, 1997, and represented an annualized
distribution of $1.52 per share and equivalent unit.
October 1997 Offering. On October 8, 1997, the Company completed an
offering (the "October 1997 Offering") of 10,000,000 common shares at $39.00 per
share. Net proceeds from the October 1997 Offering to the Company after
underwriting discount of $19,900 were approximately $370,100 (with other
estimated offering costs of $1,500). The net proceeds of $370,100 were used to
partially repay approximately $325,100 of borrowings under the Credit
Facility and to fund approximately $45,000 of the purchase price of the U.S.
Home Building.
U.S. Home Building. On October 15, 1997, the Company acquired U.S. Home
Building, a 21-story Class A office building located in the West Loop/Galleria
submarket of Houston, Texas, containing approximately 400,000 net rentable
square feet. The purchase price was approximately $45,000, which was funded from
proceeds of the October 1997 Offering (as defined below).
Bank One Center. On October 22, 1997, the Company, together with
affiliates of TrizecHahn Corporation ("Trizec") acquired Bank One Center, a
60-story Class A office building located in the CBD submarket of Dallas, Texas.
Bank One Center contains approximately 1.5 million net rentable square feet. The
acquisition was made by Main Street Partners, L.P. (the "Partnership"), a Texas
limited partnership in which the Company and Trizec each own a 50% interest.
Crescent 1717 Main, L.L.C., a Texas limited liability company that is wholly
owned by the Operating Partnership and TrizecHahn 1717 Main St., Inc., a
Delaware corporation, serve as the general partners of the Partnership. The
Partnership acquired Bank One Center for approximately $238,000 from two
unaffiliated entities. The purchase price was funded through (i) proceeds from
two secured loans aggregating $155,000 provided by The Travelers Insurance
Company and (ii) capital contributions of $41,500 from each of the Company and
Trizec partner groups. The Company's capital contribution of $41,500 was funded
through a draw under the Credit Facility.
16
Registration Statement. On October 29, 1997, the Company filed a shelf
registration with the SEC for an aggregate of $1.5 billion of common shares,
preferred shares, and warrants exercisable for common shares. Any securities
issued under the registration statement may be offered from time to time in
amounts, at prices, and on terms to be determined at the time of the offering.
Management believes this shelf registration will provide the Company with more
efficient and immediate access to the capital markets at such time as it is
considered appropriate. Net proceeds from any offering of these securities are
expected to be used for general business purposes, including the acquisition
and development of additional properties and other acquisition transactions,
the payment of certain outstanding debt, and improvements to certain properties
in the Company's portfolio.
Refrigerated Warehouses Transaction. Effective September 28, 1997, the
Company entered into a partnership with Vornado Realty Trust ("Vornado" and,
collectively with its affiliates, "VNO") to participate in the acquisition of
Americold Corporation ("Americold") and URS Logistics, Inc. ("URS"), two
suppliers of refrigerated warehouse space in the United States. On October 30,
1997, the Company and VNO agreed to the termination of that partnership and the
formation of two new partnerships, one of which was formed to consummate the
acquisition of Americold (the "Americold Partnership") and the other to
consummate the acquisition of URS (the "URS Partnership"). The Company, through
two newly formed subsidiaries ("Crescent Subsidiaries"), will own 40% of
these partnerships, and Vornado, through two newly formed subsidiaries ("Vornado
Subsidiaries"), will own 60%.
On October 31, 1997, the Americold Partnership acquired all of the
common stock of Americold through the merger of a subsidiary of Vornado into
Americold, and the URS Partnership acquired all of the common stock of URS
through the merger of a separate subsidiary of Vornado into URS. As a result,
the Americold Partnership and the URS Partnership became the owners and
operators of approximately 79 refrigerated warehouses with an aggregate of
approximately 368 million cubic feet.
The aggregate purchase price for the acquisition of Americold and URS
(including the retention of approximately $660,000 of pre-existing debt of
Americold and URS) was approximately $991,000. In accordance with the
partnership agreements of the Americold Partnership and the URS Partnership, the
Company paid an aggregate of 40% of the approximately $331,000 cash purchase
price or approximately $132,400.
The Company currently owns all of the voting common stock,
representing an approximately 95% economic interest, and all of the nonvoting
common stock, representing an approximately 5% economic interest, of the
Crescent Subsidiaries. The Company expects to offer its interest in the voting
common stock to Crescent Operating, but no offer has been made at this time.
It is intended that the transfer of the voting common stock to another entity
will take place in the near future and in no event later than December 31, 1997.
The parties have not yet determined certain matters relating to the
future ownership and operations of Americold and URS, including the
identification and division of the assets that will continue to be owned by
one of the partnerships and those that will be owned by one or more other
entities formed to conduct the business operations currently conducted by
Americold and URS, and the nature and terms of any lease that may be entered
into between the operating entity and the owner of the warehouses.
17
Term Loan. On November 3, 1997, the Company negotiated a term loan with
BankBoston in the amount of $50,000 (the "BankBoston Term Loan"). The loan bears
interest at Eurodollar plus 120 basis points and matures on March 31, 1998. The
BankBoston Term Loan can be increased to $150,000 subject to certain conditions.
Fountain Place. On November 7, 1997, the Company acquired Fountain
Place, a 60-story Class A office building located in the CBD submarket of
Dallas, Texas containing approximately 1.2 million net rentable square feet. The
purchase price was approximately $114,000 of which the Company funded $16,900
through the BankBoston Term Loan and $97,100 through the assumption of
nonrecourse indebtedness.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
HISTORICAL RESULTS OF OPERATIONS
The changes in operating results from period to period are primarily
the result of increases in the total square feet of office and retail properties
and number of hotel/resort rooms/guest nights contained in the portfolio due to
acquisitions made by the Company. The weighted average square feet of
consolidated office and retail properties for the three and nine months ended
September 30, 1997, were approximately 21.6 and 19.8 million, respectively,
compared to 10.3 and 9.4 million for the same periods in 1996. These increases
represent an 120.4% and 110.6% increase in square feet for the three and nine
months ended September 30, 1997, respectively, compared to the same periods in
1996. The weighted average number of rooms/guest nights for consolidated hotel
properties for the three months and nine months ended September 30, 1997, were
approximately 1,939 and 1,922 compared to 1,463 and 1,356, for the same periods
in 1996. These increases represent a 32.5% and 41.7% increase in rooms/guest
nights for the three and nine months ended September 30, 1997.
This Form 10-Q contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Although the Company believes that the expectations
reflected in such forward-looking statements are based upon reasonable
assumptions, the Company's actual results could differ materially from those set
forth in the forward-looking statements. Certain factors that might cause such a
difference include the following: changes in real estate conditions (including
rental rates and competing properties) or in industries in which the Company's
principal tenants compete, the failure to consummate anticipated transactions,
the ability to identify acquisition opportunities meeting the Company's
investment strategy, timely leasing of unoccupied square footage, timely
releasing of occupied square footage upon expiration, and the Company's ability
to generate revenues sufficient to meet debt service payments and other
operating expenses; and financing risks, such as the availability of equity and
debt financing, the Company's ability to service existing debt, the possibility
that the Company's outstanding debt (which requires so-called balloon payments
of principal) may be refinanced at higher interest rates or otherwise on terms
less favorable to the Company and the fact that interest rates under the Credit
Facility and certain other loans may increase.
This information should be read in conjunction with the accompanying
consolidated financial statements and notes thereto. These financial statements
include all adjustments which are, in the opinion of management, necessary to
reflect a fair statement of the results for the interim periods presented, and
all such adjustments are of a normal and recurring nature.
18
RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
Total revenues increased approximately $70.7 million, or 143.1%, to
$120.1 million for the three months ended September 30, 1997, as compared to
$49.4 million for the three months ended September 30, 1996. An increase in
office and retail property revenues of $48.8 million is primarily attributable
to the acquisition of: a) 23 office properties in 1997 which resulted in $19.7
million of incremental revenues; b) 16 office properties and four retail
properties in the fourth quarter of 1996 which resulted in $24.0 million of
incremental revenues; and c) four office properties in the third quarter of 1996
which resulted in $2.2 million of incremental revenues. An increase in hotel
property revenues of $4.0 million is primarily attributable to the acquisition
of two destination health and fitness resorts and one full-service hotel
property in the third and fourth quarters of 1996. The increase in behavioral
healthcare facilities revenues of $13.8 million is attributable to the
acquisition of the facilities in June 1997. The increase in interest and other
income of $4.1 million is primarily attributable to the $134.3 million increase
in notes receivable as a result of the acquisition of certain notes in the
Carter-Crowley transaction, loans to Crescent Operating, Inc. ("Crescent
Operating"), loans to Desert Mountain Properties Limited Partnership ("DMPLP")
and the acquisition of a note receivable secured by a hotel property.
Total expenses increased $44.6 million, or 107.0%, to $86.3 million for
the three months ended September 30, 1997, as compared to $41.7 million for the
three months ended September 30, 1996. The increase in rental property operating
expenses of $22.5 million is primarily attributable to the acquisition of: a)
23 office properties in 1997 which resulted in $9.7 million of incremental
expenses; b) 16 office properties and four retail properties in the fourth
quarter of 1996 which resulted in $9.8 million of incremental expenses; and c)
four office properties in the third quarter of 1996 which resulted in $1.0
million of incremental expenses during the period. Depreciation and amortization
increased $9.5 million due primarily to the acquisition of office properties
and behavioral healthcare facilities. The increase in interest expense of $11.2
million is primarily attributable to: (i) $.5 million of interest payable under
the financing arrangement with Northwestern Mutual Life Insurance Company, which
was in place as of December 1996; (ii) $2.3 million payable under LaSalle Note
III, which was assumed in the acquisition of the Greenway Plaza Portfolio in
October 1996; (iii) $5.1 million of interest payable under the $200 million and
$235 million short-term notes with BankBoston, N.A. ("BankBoston") which were
obtained in June and August of 1997, respectively; (iv) $2.6 million of
incremental interest payable due to draws under the Credit Facility (average
balance outstanding for the third quarter 1997 and 1996 was $294.1 million and
$115.4 million, respectively); and (v) $.7 million of interest payable under the
senior unsecured notes aggregating $400 million ("Notes"). All of the financing
arrangements, except for LaSalle Note III, were used to fund acquisitions. The
increase in corporate general and administrative expense of $1.2 million was
attributable to incremental costs associated with the corporate operations of
the Company as a direct result of recent property additions to the Company's
portfolio.
RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
Total revenues increased approximately $165.9 million, or 120.7%, to
$303.3 million for the nine months ended September 30, 1997, as compared to
$137.4 million for the nine months ended September 30, 1996. An increase in
office and retail property revenues of $127.3 million is primarily attributable
to the acquisition of: a) 23 office properties in 1997 which resulted in $38.4
million of incremental revenues; b) six office properties during the nine months
ended September 30, 1996, which resulted in $14.8 million of incremental
revenues; and c) 16 office properties and four retail properties in the fourth
quarter of 1996, which resulted in $68.9 million of incremental revenues. In
addition, office property revenues increased due to The Crescent's increase in
rental rates and occupancy which resulted in $1.7 million of incremental
revenues. An increase in hotel property revenues of $12.7 million is primarily
attributable to the acquisition of two destination health and fitness resorts
and one full-service hotel property in the third and fourth quarters of 1996,
which resulted in $11.9 million of incremental revenues. The increase in
behavioral healthcare facilities revenues of $16.0 million is attributable to
the acquisition of the facilities in June 1997. The increase in interest and
other income of $9.9 million for the nine months ended September 30, 1997, is
primarily attributable to: a) the $3.1 million profit distribution related to
the Company's investment in HBCLP, Inc., the primary asset of which is the
investment in Hudson Bay Partners,
19
L.P., an investment partnership in which the Company holds an effective 95%
economic interest; b) the $134.3 million increase in notes receivable as a
result of the acquisition of certain notes in the Carter-Crowley transaction,
loans to Crescent Operating, loans to DMPLP and the acquisition of a note
receivable secured by a hotel property; and c) interest earned on available cash
from the Offerings (as defined below).
Total expenses increased $108.3 million, or 95.2%, to $222.1 million
for the nine months ended September 30, 1997, as compared to $113.8 million for
the nine months ended September 30, 1996. An increase in rental property
operating expenses of $56.6 million is primarily attributable to the acquisition
of: a) 23 office properties in 1997 which resulted in $17.2 million of
incremental expenses; b) six office properties during the nine months ended
September 30, 1996, which resulted in $5.7 million of incremental expenses; and
c) 16 office properties and four retail properties in the fourth quarter of
1996, which resulted in $30.0 million of incremental expenses during the period.
Depreciation and amortization increased $21.5 million primarily due to the
acquisitions of office properties and behavioral healthcare facilities. An
increase in interest expense of $23.8 million is primarily attributable to: (i)
$1.5 million of interest payable under the financing arrangement with
Northwestern Mutual Life Insurance Company, which was in place as of December
1996; (ii) $6.7 million of interest payable under LaSalle Note III, which was
assumed in the acquisition of the Greenway Plaza Portfolio transaction in
October 1996; (iii) $5.6 million of interest payable under the $200 million and
$235 million short-term notes with BankBoston, which were obtained in June and
August of 1997, respectively; (iv) $7.2 million of incremental interest payable
due to draws under the Credit Facility (average balance outstanding for nine
months ended September 30, 1997 and 1996 was $236.3 and $47.1, respectively);
and (v) $.7 million of interest payable under the Notes. All of the financing
arrangements, except for LaSalle Note III, were used to fund acquisitions. An
increase in corporate general and administrative expense of $6.4 million was
primarily attributable to incentive compensation awarded to the Company's
executive officers and also to incremental costs associated with the corporate
operations of the Company as a direct result of recent property additions to the
Company's portfolio.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents were $47.1 million and $25.6 million at
September 30, 1997 and December 31, 1996, respectively. The increase is
attributable to $1,752.0 million and $134.9 million of cash provided by
financing and operating activities, respectively, offset by $1,865.4 million
used in investing activities. The Company's inflow of cash provided by
financing activities is primarily attributable to proceeds received from the
common share offerings ($760.5 million), the net borrowings under the Credit
Facility and borrowings under the short-term BankBoston notes ($711.5 million),
and proceeds from the Notes offering ($400.0 million). These sources were
partially offset by the distributions paid to shareholders and unitholders
($93.2 million) and the distribution of Crescent Operating shares to
unitholders of the Operating Partnership and shareholders of the Company ($11.9
million). The cash inflow from operating activities is primarily attributable
to: (i) property operations; (ii) a decrease in restricted cash reserves for
payment of real estate taxes; and (iii) an increase in accounts payable which
is primarily attributable to 1997 acquisitions. The inflows from operating
activities were partially offset by an increase in other assets which is
primarily attributable to the purchase of the Magellan warrants ($12.5
million). The Company utilized $1,865.4 million of cash flow primarily in the
following investing activities: (i) the acquisition of 23 office properties and
91 behavioral healthcare facilities ($1,356.3 million); (ii) notes receivable
($134.3 million) primarily attributable to the acquisition of a note receivable
secured by a hotel property ($6.3 million), the acquisition as a part of the
Carter-Crowley transaction of certain secured and unsecured promissory notes
relating primarily to the Dallas Mavericks ($56.1 million), loans to Crescent
Operating ($37.0 million), loans to DMPLP ($26.2 million) and loans to Houston
Area Development Corporation ($3.5 million); (iii) investments in
unconsolidated companies ($328.5 million) primarily attributable to DBL
Holdings, Inc. ($12.6 million), Desert Mountain Development Corporation ($210.9
million), Woodland Commercial Properties Company, L.P. ($38.6 million), and
Woodlands Land Development Company, L.P. ($41.2 million); and (iv) capital
expenditures for rental properties ($14.5 million) primarily attributable to
non-recoverable building improvements for the office and retail properties, and
replacement of furniture, fixtures and equipment for the hotel properties; and
(v) recurring and non-recurring tenant improvement and leasing costs for the
office and retail properties ($27.1 million).
20
On February 14, 1997, the Company filed a shelf registration with the
Securities and Exchange Commission ("SEC") for an aggregate of $1.2 billion of
common shares, preferred shares and warrants exercisable for common shares.
Securities issued under the registration statement (an aggregate of $1,184
million to date) were offered from time to time in amounts, at prices, and on
terms that were determined at the time of the offering. Net proceeds from the
offerings of these securities were used as described below (see also, Note 7 to
Item 1. Financial Statements), for general business purposes, including the
acquisition and development of additional properties and other acquisition
transactions, the payment of certain outstanding debt and improvements to
certain properties in the Company's portfolio.
On April 28, 1997, the Company completed an offering (the "April 1997
Offering") of 24,150,000 common shares (including the underwriters'
overallotment option) at $25.375 per share. Net proceeds from the April 1997
Offering to the Company after underwriting discount of $29.2 million and other
offering costs of $3.0 million were approximately $580.6 million. On May 14,
1997, the Company completed an additional offering of 500,000 common shares to
several underwriters who participated in the April 1997 Offering. The common
shares were sold at $25.875 per share, with gross proceeds of $12.9 million
(collectively, the "Offerings").
In the second quarter of 1997, the Company used net proceeds of $593.5
million from the Offerings and approximately $314.7 million from borrowings
under the Credit Facility and $160.0 million of short-term borrowings from
BankBoston (i) to fund approximately $30.0 million in connection with the
formation and capitalization of Crescent Operating; (ii) to repay the $150.0
million BankBoston short-term note payable; (iii) to reduce by $131.0 million
borrowings under the Credit Facility; (iv) to fund approximately $306.3 million
of the purchase price of the Carter-Crowley Portfolio acquired by the Company
and (v) to fund the commitments of the Company and Crescent Operating related to
the Magellan transaction totaling approximately $419.7 million. The remaining
$31.2 million has been used for working capital purposes.
On August 12, 1997, the Company entered into two transactions with
affiliates of Union Bank of Switzerland ("UBS"). In one transaction, the Company
sold 4,700,000 common shares at $31.5625 per share to UBS Securities, LLC for
approximately $148 million (approximately $145 million of net proceeds) ("UBS
Offering"). In the other transaction, the Company entered into a forward share
purchase agreement with Union Bank of Switzerland, London Branch ("UBS-LB")
which provides that the Company will purchase 4,700,000 common shares from
UBS-LB within one year. The purchase price will be determined on the date the
Company settles the agreement and will include a forward accretion component,
minus an adjustment for the Company's distribution rate. The Company may
complete the settlement for cash or common shares at its option. The net
proceeds were used to repay borrowings under the Credit Facility.
On October 8, 1997, the Company completed an offering ("October 1997
Offering") of 10,000,000 common shares at $39.00 per share. Net proceeds from
the October 1997 Offering to the Company after underwriting discount of $19.9
million were approximately $371.1 million (with other estimated offering costs
of $1.5 million). The net proceeds of $370.1 million were used to partially
repay approximately $325.1 million of borrowings under the Credit Facility and
to fund approximately $45.0 million of the purchase price of the U.S. Home
Building.
On October 29, 1997, the Company filed a shelf registration with the
SEC for an aggregate of $1.5 billion of common shares, preferred shares and
warrants exercisable for common shares. Any securities issued under the
registration statement may be offered from time to time in amounts, at prices,
and on terms to be determined at the time of the offering. Management believes
this shelf registration will provide the Company with more efficient and
immediate access to the capital markets at such time as it is considered
appropriate. Net proceeds from any offering of these securities are expected to
be used for general business purposes, including the acquisition and development
of additional properties and other acquisition transactions, the payment of
certain outstanding debt and improvements to certain properties in the Company's
portfolio.
21
The significant terms of the Company's debt financing arrangements are
shown below (dollars in thousands):
[Enlarge/Download Table]
INTEREST BALANCE
MAXIMUM RATE AT EXPIRATION OUTSTANDING AT
DESCRIPTION BORROWINGS SEPT. 30, 1997 DATE SEPT. 30, 1997
----------- ---------- -------------- ---- --------------
SECURED FIXED RATE DEBT:
LaSalle Note I(a) $ 239,000 7.83% August 2027 $ 239,000
LaSalle Note II(b) 161,000 7.79% March 2028 161,000
CIGNA Note (c) 63,500 7.47% December 2002 63,500
Northwestern Life Note(d) 26,000 7.66% January 2004 26,000
Metropolitan Life Note(e)(f) 12,188 8.88% September 2001 12,188
Nomura Funding VI Note(f)(g) 8,716 10.07% July 2020 8,716
---------- ----- ----------
Subtotal /Weighted Average $ 510,404 7.83% $ 510,404
---------- ----- ----------
SECURED VARIABLE RATE DEBT:
LaSalle Note III(f)(h) $ 115,000 7.82% July 1999 $ 115,000
---------- ----- ----------
UNSECURED FIXED RATE DEBT:
The 2002 Notes(i) $ 150,000 6.63% September 2002 $ 150,000
The 2007 Notes(i) 250,000 7.13% September 2007 250,000
---------- ----- ----------
Subtotal /Weighted Average $ 400,000 6.94% $ 400,000
---------- ----- ----------
UNSECURED VARIABLE RATE DEBT:
Line of Credit(j) $ 450,000 6.86% June 2000 $ 316,500
BankBoston Note I(k) 235,000 7.03% October 1997 235,000
BankBoston Note II(l) 200,000 6.86% August 1998 200,000
---------- ----- ----------
Subtotal/Weighted Average $ 885,000 6.91% $ 751,500
---------- ----- ----------
TOTAL/WEIGHTED AVERAGE $1,910,404 7.23% $1,776,904
========== ===== ==========
NOTES:
(a) The note provides for the payment of interest only through August 2002,
followed by principal amortization based on a 25-year amortization
schedule through maturity. In August 2007, the interest rate increases,
and the Company is required to remit, in addition to the monthly debt
service payment, excess property cash flow, as defined, to be applied
first against principal until the note is paid in full and thereafter,
against accrued excess interest, as defined. It is the Company's intention
to repay the note in full at such time (August 2007) by making a final
payment of approximately $220 million. LaSalle Note I is secured by
Funding I properties (see Note 1 to Item 1. Financial Statements).
(b) The note provides for the payment of interest only through March 2003,
followed by principal amortization based on a 25-year amortization
schedule through maturity. In March 2006, the interest rate increases, and
the Company is required to remit, in addition to the monthly debt service
payment, excess property cash flow, as defined, to be applied first
against principal until the note is paid in full and thereafter, against
accrued excess interest, as defined. It is the Company's intention to
repay the note in full at such time (March 2006) by making a final payment
of approximately $154 million. LaSalle Note II is secured by Funding II
properties (see Note 1 to Item 1. Financial Statements).
(c) The note requires payments of interest only during its term. The CIGNA
Note is secured by the MCI Tower and Denver Marriott City Center
properties.
(d) The note requires payments of interest only during its term. The
Northwestern Life note is secured by the 301 Congress Avenue property.
(e) The note requires monthly payments of principal and interest and is
secured by five of The Woodlands Office Properties.
(f) The note was assumed in connection with an acquisition and was not
subsequently retired by the Company because of prepayment penalties.
(g) Under the terms of the note, principal and interest are payable based on a
25-year amortization schedule. In July 1998, the Company may defease the
note by purchasing Treasury obligations to pay the note without penalty.
The Nomura Funding VI Note is secured by Canyon Ranch-Lenox, the Property
owned by Funding VI. In July 2010, the interest rate due under the note
will change to a 10-year Treasury yield plus 500 basis points or, if the
Company so elects, it may repay the note without penalty.
(h) The note bears interest at the rate for 30-day LIBOR plus a weighted
average rate of 2.135% (subject to a rate cap of 10%) and requires
payments of interest only during its term. The LaSalle Note III is secured
by the Properties owned by Funding III, IV and V (See Note 1 to Item 1.
Financial Statements).
(i) The Notes are unsecured and require payments of interest only during their
terms. The interest rate on the Notes is subject to temporary increase by
50 basis points in the event that a registered offer to exchange the Notes
for notes of the Operating Partnership with terms identical in all
material respects to the Notes is not consummated or a shelf registration
statement with respect to the resale of the Notes is not declared
effective by the SEC on or before the 180th day following the date of
original issuance of the Notes. The interest rate on the Notes also is
subject to temporary or permanent increase by 37.5 basis points in
22
the event that, within the period from the date of original issuance of
the Notes to the first anniversary of original issuance, the Notes are
assigned a rating that is not an investment grade rating (as defined in
the Notes) or are not assigned or do not retain, a rating by specified
rating agencies. These adjustments may apply simultaneously.
(j) The Credit Facility is unsecured with an interest rate of the Eurodollar
rate plus 120 basis points.
(k) The note is unsecured with an interest rate of the Eurodollar rate plus
137.5 basis points. The note requires payments of interest only during its
term. On October 15, 1997, the note was repaid in full with proceeds from
the Credit Facility (See Note 11 to Item 1. Financial Statements).
(l) The note is unsecured with an interest rate of the Eurodollar rate plus
120 basis points. The note requires payments of interest only during its
term.
In September 1997, the Notes along with the Company's cumulative
preferred stock and non-cumulative and junior preferred stock issuable under the
Company's shelf registration were assigned investment grade ratings from Moody's
Investors Service.
Based on the Company's total market capitalization of $6.4 billion at
September 30, 1997 (at a $40.00 share price, which was the closing price of the
common shares on the NYSE on September 30, 1997, and including the full
conversion of all units of minority interest in the Operating Partnership plus
total indebtedness), the Company's debt represented 28% of its total market
capitalization. After the October 1997 Offering and subsequent events (see Note
11 to Item 1. Financial Statements) (excluding the Refrigerated Warehouses
transaction), the Company's pro forma total market capitalization was $6.3
billion (at a $36.00 share price, which was the closing price of the common
shares on the NYSE on October 31, 1997 and including the full conversion of all
units of minority interest in the Operating Partnership plus total indebtedness)
and the Company's debt represented 28% of its total market capitalization. The
Company currently intends to maintain a conservative capital structure with
total debt targeted at 40% of total market capitalization.
The Company expects to meet its short-term liquidity requirements
primarily through cash flow provided by operating activities, which the Company
believes will be adequate to fund normal recurring operating expenses, debt
service requirements, recurring capital expenditures, and distributions to
shareholders and unitholders. To the extent the Company's cash flow from
operating activities is not sufficient to finance non-recurring capital
expenditures, such as investment property acquisition costs or tenant
improvement and leasing costs related to previously unoccupied space, the
Company expects to finance such activities with proceeds available under the
Credit Facility, available cash reserves and other debt and equity financing.
The Company expects to meet its long-term liquidity requirements,
consisting primarily of maturities under the Company's fixed and variable rate
debt, through long-term secured and unsecured borrowings and the issuance of
debt securities and/or additional equity securities of the Company.
The Company intends to maintain its qualification as a real estate
investment trust ("REIT") under the Internal Revenue Code of 1986, as amended
(the "Code"). As a REIT, the Company will generally not be subject to corporate
federal income taxes as long as it satisfies certain technical requirements of
the Code, including the requirement to distribute 95% of its taxable income to
its shareholders.
FUNDS FROM OPERATIONS
Funds from Operations ("FFO"), based on the definition adopted by the
Board of Governors of the National Association of Real Estate Investment Trusts
("NAREIT") and as used herein, means net income (loss) (determined in accordance
with generally accepted accounting principles or "GAAP"), excluding gains (or
losses) from debt restructuring and sales of property, plus depreciation and
amortization of real estate assets, and after adjustments for unconsolidated
partnerships and joint ventures. FFO was developed by NAREIT as a relative
measure of performance and liquidity of an equity REIT in order to recognize
that income-producing real estate historically has not depreciated on the basis
determined under GAAP. The Company considers FFO an appropriate measure of
performance of an equity REIT. However, FFO (i) does not represent cash
generated from operating activities determined in accordance with GAAP (which,
unlike FFO, generally reflects all cash effects of transactions and other events
that enter into the determination of net income), (ii) is not necessarily
indicative of cash flow available to fund cash needs, and (iii) should not be
considered as an alternative to net income determined
23
in accordance with GAAP as an indication of the Company's operating performance,
or to cash flow from operating activities determined in accordance with GAAP as
a measure of either liquidity or the Company's ability to make distributions.
The Company has historically distributed an amount less than FFO, primarily due
to reserves required for capital expenditures, including leasing costs. The
aggregate cash distributions paid to shareholders and unitholders for the nine
months ended September 30, 1997 and 1996 were $93.2 and $47.6 million,
respectively. An increase in FFO does not necessarily result in an increase in
aggregate distributions because the Company's board of trustees is not required
to increase distributions on a quarterly basis unless necessary in order to
enable the Company to maintain REIT status. However, the Company must distribute
95% of its real estate investment trust taxable income (as defined in the Code),
therefore, a significant increase in FFO will generally require an increase in
distributions to shareholders and unitholders although not necessarily on a
proportionate basis. Accordingly, the Company believes that in order to
facilitate a clear understanding of the consolidated historical operating
results of the Company, FFO should be considered in conjunction with the
Company's net income (loss) and cash flows as reported in the consolidated
financial statements and notes thereto. However, the Company's measure of FFO
may not be comparable to similarly titled measures of other REIT's because these
REIT's may not apply the definition of FFO in the same manner as the Company.
24
STATEMENTS OF FUNDS FROM OPERATIONS
(dollars in thousands)
[Enlarge/Download Table]
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------- -------------------------------
1997 1996 1997 1996
------------- ------------ ------------- ------------
Income before minority interests $ 34,835 $ 8,517 $ 84,266 $ 26,735
Adjustments:
Depreciation and amortization of real
estate assets 20,214 10,670 49,434 28,488
Adjustment for investments in real estate
mortgages and common stock of
unconsolidated companies 1,434 461 2,107 1,473
Minority interest in joint ventures (390) (635) (1,192) (955)
------------- ------------ ------------- ------------
Funds from operations $ 56,093 $ 19,013 $ 134,615 $ 55,741
============= ============ ============= ============
Weighted average common shares outstanding and
issuable in exchange for units 113,034,099 58,838,944 100,592,573 58,116,124
RECONCILIATION OF FUNDS FROM OPERATIONS TO NET CASH PROVIDED
BY OPERATING ACTIVITIES
(dollars in thousands)
[Download Table]
Nine Months Ended
September 30,
1997 1996
--------- --------
Funds from operations $ 134,615 $ 55,741
Adjustments:
Depreciation and amortization of non-real estate assets 905 578
Amortization of deferred financing costs 2,157 2,065
Minority interest in joint ventures profit and
depreciation and amortization of real estate assets 1,693 1,228
Adjustment in investments in real estate mortgages
and common stock of unconsolidated companies (2,107) (1,473)
Change in deferred rent receivable (14,432) (2,932)
Change in current assets and liabilities 12,152 (5,385)
Other (95) (272)
--------- --------
Net cash provided by operating activities $ 134,888 $ 49,550
========= ========
25
The following table sets forth certain information about the Office
Properties as of September 30, 1997.
OFFICE PROPERTIES
[Enlarge/Download Table]
WEIGHTED
AVERAGE
FULL-SERVICE
NET RENTAL
RENTABLE RATE
YEAR AREA PERCENT PER LEASED
STATE, CITY, PROPERTY SUBMARKET COMPLETED (SQ. FT.) LEASED SQ. FT.(1)
--------------------- --------- --------- --------- ------ ----------
Texas
DALLAS
The Crescent Office Towers .................. Uptown/Turtle Creek 1985 1,210,899 98% $ 25.86
Trammell Crow Center(2) ..................... CBD 1984 1,128,331 83(4) 23.25
Stemmons Place .............................. Stemmons 1983 634,381 89 13.45
Spectrum Center(3) .......................... Far North Dallas 1983 598,250 93 16.84
Waterside Commons ........................... Las Colinas 1986 458,739 100 13.72
Caltex House ................................ Las Colinas 1982 445,993 96 23.43
Reverchon Plaza ............................. Uptown/Turtle Creek 1985 374,165 92(4) 14.75
The Aberdeen ................................ Far North Dallas 1986 320,629 100 17.31
MacArthur Center I &II ...................... Las Colinas 1982/1986 294,069 99 17.02
Stanford Corporate Centre ................... Far North Dallas 1985 265,507 100 14.74
The Amberton ................................ Central Expressway 1982 255,052 79 10.58
Concourse Office Park ....................... LBJ Freeway 1972-1986 244,879 90 11.61
12404 Park Central .......................... LBJ Freeway 1987 239,103 63(4) 15.59
Palisades Central II ........................ Richardson/Plano 1985 237,731 100 15.05
3333 Lee Parkway ............................ Uptown/Turtle Creek 1983 233,484 39(4) 17.38
Liberty Plaza I & II ........................ Far North Dallas 1981/1986 218,813 100 12.82
The Addison ................................. Far North Dallas 1981 215,016 100 14.95
The Meridian ................................ LBJ Freeway 1984 213,915 97 12.89
Palisades Central I ......................... Richardson/Plano 1980 180,503 100 13.40
Walnut Green ................................ Central Expressway 1986 158,669 97 13.05
Greenway II ................................. Richardson/Plano 1985 154,329 100 19.02
Addison Tower ............................... Far North Dallas 1987 145,886 97 12.84
5050 Quorum ................................. Far North Dallas 1981 133,594 96(4) 14.10
Cedar Springs Plaza ......................... Uptown/Turtle Creek 1982 110,923 89 15.00
Greenway IA ................................. Richardson/Plano 1983 94,784 100 14.31
Valley Centre ............................... Las Colinas 1985 74,861 99 13.18
Greenway I .................................. Richardson/Plano 1983 51,920 100 14.31
One Preston Park ............................ Far North Dallas 1980 40,525 87 13.37
--------- --- ---------
Subtotal/Weighted Average ................ 8,734,950 92% $ 17.75
--------- --- ---------
FORT WORTH
Continental Plaza ........................... CBD 1982 954,895 54%(4) $ 15.99
--------- --- ---------
26
[Enlarge/Download Table]
WEIGHTED
AVERAGE
FULL-SERVICE
NET RENTAL
RENTABLE RATE
YEAR AREA PERCENT PER LEASED
STATE, CITY, PROPERTY SUBMARKET COMPLETED (SQ. FT.) LEASED SQ. FT.(1)
--------------------- --------- --------- --------- ------ ----------
HOUSTON
Greenway Plaza Office Portfolio(5) .......... Richmond-Buffalo 1969-1982 4,286,277 84%(4) $ 13.89
Speedway
The Woodlands Office Properties(6) .......... The Woodlands 1980-1996 812,227 93 14.49
Houston Center Office Properties(7) ......... CBD 1974-1983 2,764,418 92 14.14
Three Westlake Park(8) ...................... Katy Freeway 1983 414,251 87 13.58
--------- --- ---------
Subtotal/Weighted Average ................ 8,277,173 87% $ 14.02
--------- --- ---------
AUSTIN
Frost Bank Plaza ............................ CBD 1984 433,024 74% $ 16.79
301 Congress Avenue(9) ...................... CBD 1986 418,338 95 22.90
Bank One Tower .............................. CBD 1974 389,503 95 15.68
The Avallon ................................. Northwest 1993/1997 232,301 78(10) 17.04
Barton Oaks Plaza One ....................... Southwest 1986 99,792 94 19.30
--------- --- ---------
Subtotal/Weighted Average ................. 1,572,958 87% $ 18.48
--------- --- ---------
COLORADO
DENVER
MCI Tower ................................... CBD 1982 550,807 98% $ 17.10
Ptarmigan Place ............................. Cherry Creek 1984 418,565 82(4) 15.58
Regency Plaza One ........................... DTC 1985 309,862 86 20.40
AT&T Building ............................... CBD 1982 169,610 92 13.65
The Citadel ................................. Cherry Creek 1987 130,652 98 19.03
55 Madison .................................. Cherry Creek 1982 125,690 87 15.47
44 Cook ..................................... Cherry Creek 1984 119,363 79(4) 17.82
--------- --- ---------
Subtotal/Weighted Average ................ 1,824,549 90% $ 17.07
--------- --- ---------
COLORADO SPRINGS
Briargate Office and Research Center ........ Colorado Springs 1988 252,857 100% $ 15.23
--------- --- ---------
FLORIDA
MIAMI
Miami Center ................................ Downtown-CBD 1983 782,686 78% $ 23.50
--------- --- ---------
ARIZONA
PHOENIX
Two Renaissance Square ...................... CBD 1990 476,373 89% $ 23.31
6225 North 24th Street ...................... Camelback Corridor 1981 86,451 67 21.24
--------- --- ---------
Subtotal/Weighted Average ................ 562,824 85% $ 23.06
--------- --- ---------
27
[Enlarge/Download Table]
WEIGHTED
AVERAGE
FULL-SERVICE
NET RENTAL
RENTABLE RATE
YEAR AREA PERCENT PER LEASED
STATE, CITY, PROPERTY SUBMARKET COMPLETED (SQ. FT.) LEASED SQ. FT.(1)
--------------------- --------- --------- --------- ------ ----------
LOUISIANA
NEW ORLEANS
1615 Poydras CBD 1984 508,741 75% $ 14.62
--------- --- ---------
NEBRASKA
OMAHA
Central Park Plaza CBD 1982 409,850 100% $ 13.21
--------- --- ---------
NEW MEXICO
ALBUQUERQUE
Albuquerque Plaza CBD 1990 366,236 94% $ 18.26
--------- --- ---------
CALIFORNIA
SAN FRANCISCO
160 Spear Street South of Market-CBD 1984 276,420 83% $ 22.66
--------- --- ---------
SAN DIEGO
Chancellor Park(11) UTC 1988 195,733 86% $ 20.64
--------- --- ---------
TOTAL/WEIGHTED AVERAGE 24,719,872 88%(4) $ 16.65
========== === =========
Notes:
(1) Calculated based on base rent payable as of September 30, 1997, without
giving effect to free rent or scheduled rent increases that would be taken
into account under generally accepted accounting principles, and including
adjustments for expenses payable by or reimbursable from tenants.
(2) The Company owns the principal economic interest in Trammell Crow Center
through its ownership of fee simple title to the property (subject to a
ground lease and a leasehold estate regarding the building) and two mortgage
notes encumbering the leasehold interests in the land and building.
(3) The Company owns the principal economic interest in Spectrum Center through
an interest in the limited partnership which owns both a mortgage note
secured by Spectrum Center and the ground lessor's interest in the land
underlying the office building.
(4) The Company has executed leases at certain properties that had not commenced
as of September 30, 1997. If such leases had commenced as of September 30,
1997, the percent leased for all office properties would have been 92%. The
total percent leased for such properties would have been as follows:
Trammell Crow Center - 87%, Reverchon Plaza - 99%, 12404 Park Central -
100%; 3333 Lee Parkway - 99%; 5050 Quorum - 99%; Continental Plaza - 100%;
Greenway Plaza Office Portfolio - 86%; Ptarmigan Place - 95%; and 44 Cook -
95%.
(5) Consists of 10 office properties.
(6) The Company has a 75% limited partner interest and an indirect approximately
10% general partner interest in the partnerships that own the 12 office
properties that comprise The Woodlands Office Properties.
(7) Consists of three office properties.
(8) The Company owns the principal economic interest in Three Westlake Park
through its ownership of a mortgage note secured by Three Westlake Park.
(9) The Company has a 1% general partner and a 49% limited partner interest in
the partnership that owns 301 Congress Avenue.
(10)In August 1997, construction was completed on a 106,342 square foot office
property. The entire building is leased to BMC Software, Inc., which is
expect to occupy in stages over the next 24 months.
(11)The Company owns Chancellor Park through its ownership of a mortgage note
secured by the building and through its direct and indirect interests in the
partnership which owns the building.
28
HOTEL PROPERTIES
The following table sets forth certain information about the Hotel
Properties for the nine months ended September 30, 1997 and 1996. The
information for the Hotel Properties is based on available rooms, except for
Canyon Ranch-Tucson and Canyon Ranch-Lenox, which are destination health and
fitness resorts that measure performance based on available guest nights.
[Enlarge/Download Table]
For the nine months ended
September
30,
-------------------------------------------------------
Revenue
Average Average Per
Year Occupancy Daily Available
Completed/ Rate Rate Room
Property Location Renovated Rooms 1997 1996 1997 1996 1997 1996
-------- -------- --------- ----- ---- ---- ---- ---- ---- ----
FULL-SERVICE HOTELS
Denver Marriott City Center Denver, CO 1982/1994 613 84% 83% $117 $107 $ 98 $ 89
Four Seasons Hotel-Houston Houston, TX 1982 399 68 65 159 144 108 93
Hyatt Regency Albuquerque Albuquerque,NM 1990 395 75 79 99 92 74 72
Hyatt Regency Beaver Creek Avon, CO 1989 295 70 72 231 212 162 151
Sonoma Mission Inn & Spa Sonoma, CA 1927/1987 198 90 93 205 177 185 165
----- -- -- ---- ---- ---- ----
Total / Weighted Average 1,900 77% 77% $147 $133 $113 $103
===== == == ==== ==== ==== ====
DESTINATION HEALTH & FITNESS RESORTS
Canyon Ranch - Tucson Tucson, AZ 1980 240(1) 84%(2) 80%(2) $486(3) $467(3) $385(4) $354(4)
Canyon Ranch - Lenox Lenox, MA 1989 202(1) 81 (2) 83 (2) 446(3) 401(3) 353(4) 322(4)
----- -- -- ---- ---- ---- ----
Total/Weighted Average 442 83% 81% $468 $436 $370 $339
===== == == ==== ==== ==== ====
Notes:
(1) Represents available guest nights, which is the maximum number of guests
that the resort can accommodate per night.
(2) Represents the number of paying and complimentary guests for the period,
divided by the maximum number of available guest nights for the period.
(3) Represents the average daily "all-inclusive" guest package charges for the
period, divided by the average daily number of paying guests for the period.
(4) Represents the total "all-inclusive" guest package charges for the period,
divided by the maximum number of available guest nights for the period.
29
AGGREGATE LEASE EXPIRATIONS OF OFFICE PROPERTIES
The following table sets forth a schedule of aggregate lease
expirations for the Office Properties' leases in place as of September 30, 1997,
for each of the 10 years beginning with the remainder of 1997, assuming that
none of the tenants exercises renewal options and excluding an aggregate of
3,087,787 square feet of unleased space.
[Enlarge/Download Table]
ANNUAL
PERCENTAGE FULL
NET RENTABLE PERCENTAGE OF TOTAL -SERVICE
AREA OF LEASED ANNUAL FULL ANNUAL RENT PER
NUMBER OF REPRESENTED NET RENTABLE SERVICE FULL-SERVICE NET
TENANTS WITH BY EXPIRING AREA REPRESENTED RENT UNDER RENT RENTABLE
EXPIRING LEASES BY EXPIRING EXPIRING REPRESENTED AREA
YEAR OF LEASE EXPIRATION LEASES (SQUARE FEET) LEASES LEASES(1) BY EXPIRING EXPIRING(1)
LEASES
-------------------------------------------------------------------------------------------------------------
1997 168 660,217 3.1% $10,932,926 2.8% $16.56
1998 422 2,219,561 10.3 33,953,999 8.7 15.30
1999 346 2,796,387 13.0 47,765,570 12.2 17.08
2000 279 2,646,648 12.3 41,986,033 10.8 15.86
2001 237 3,112,899 14.5 55,633,047 14.2 17.87
2002 165 2,568,527 11.9 48,865,020 12.5 19.02
2003 57 1,361,435 6.3 23,330,684 6.0 17.14
2004 48 2,273,047 10.6 44,602,154 11.4 19.62
2005 29 1,673,621 7.8 30,643,554 7.9 18.31
2006 16 386,396 1.8 8,099,788 2.1 20.96
2007 and thereafter 22 1,835,789 8.4 44,545,683 11.4 24.27
(1)Calculated based on base rent payable as of the expiration day of the lease
for net rentable square feet expiring, without giving effect to free rent or
scheduled rent increases that would be taken into account under generally
accepted accounting principles, and including adjustments for expenses
payable by or reimbursable from tenants based on current levels.
30
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
On August 31, 1997, the Registrant issued to Sanjay Varma, in
consideration of the receipt of $1,561,431 in cash from Mr. Varma, an
option to purchase 217,530 common shares at an exercise price of
$31.625 per common share. The option, which was issued in a private
offering in reliance upon an exemption from the registration
requirements of the federal securities laws pursuant to Section 4(2) of
the Securities Act of 1933, is exercisable at any time, in whole or in
part, on or before August 31, 2000. The Registrant issued the option
directly. In connection with the purchase of the option, Mr. Varma
represented, among other matters, that he was an "accredited investor"
within the meaning of the federal securities laws and a sophisticated
investor.
On August 29, 1997, Desert Mountain Properties Limited Partnership,
a Delaware limited partnership ("DMPLP") whose sole partners are a
corporation affiliated with the Registrant and Sonora Partners Limited
Partnership ("Sonora"), acquired Desert Mountain, a master-planned,
luxury residential and recreational community in northern Scottsdale,
Arizona. In connection with the acquisition, the Registrant agreed
that, subject to the terms set forth in an exchange agreement with
Sonora and the terms of the DMPLP limited partnership agreement, a
portion of the limited partner interest of Sonora in DMPLP could be
exchanged, in whole or in part at any time from and after September 30,
1998 until termination of DMPLP (which may occur as late as December
31, 2020), or an earlier date in certain circumstances for 664,294
common shares of the Registrant or, at the option of the Registrant,
cash. Upon any such exchange, the Registrant will be entitled to
receive a portion of the capital account balance of the limited partner
interest of Sonora and certain preferred return payments attributable
thereto. The portion of the capital account balance and related
preferred return payments will be based on the number of common shares
that Sonora has requested be issued in connection with the exchange,
compared to the total number of exchange shares issuable at such time.
The Registrant anticipates that any common shares that may be issued
upon exchange of a portion of the limited partner interest of Sonora
will be issued in a private offering in reliance upon an exemption from
the registration requirements of the federal securities laws pursuant
to Section 4(2) of the Securities Act of 1933.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits Description
10.29 Third Amended and Restated Revolving Credit Agreement,
dated September 22, 1997 among Crescent Real Estate
Equities Limited Partnership and BankBoston, N.A. and the
other banks named therein (filed herewith)
27.1 Financial Data Schedule (filed herewith)
Complete exhibit listing on file with Securities and Exchange
Commission
(b) Reports on Form 8-K.
The Company's Current Report on Form 8K/A dated January 29, 1997,
as amended on July 2, 1997, describing the completion of the
Magellan transaction and certain financial information and pro
forma financial information relating to the transaction.
The Company's Current Report on Form 8K dated June 20, 1997 and
filed on September 30, 1997, as amended on October 1, 1997,
describing the proposed acquisition of Fountain Place and certain
financial information relating to this acquisition.
The Company's Current Report on Form 8K dated July 22, 1997 and
filed on July 23, 1997, for the purpose of filing certain
exhibits in connection with the Company's offering of 351,185
common shares.
31
The Company's Current Report on Form 8K dated August 11, 1997 and
filed on August 13, 1997, for the purpose of filing certain
exhibits in connection with the Company's offering of 4,700,000
common shares.
The Company's Current Report on Form 8K dated September 22, 1997
and filed on September 22, 1997, for the purpose of filing
certain exhibits in connection with the Company's offering of
307,831 common shares.
The Company's Current Report on Form 8K dated September 22, 1997
and filed on September 30, 1997, as amended on October 1, 1997,
describing the acquisition of Houston Center and certain
financial information relating to this acquisition.
The Company's Current Report on Form 8K dated September 30, 1997
and filed on September 30, 1997, as amended on October 1, 1997,
describing the acquisition of Miami Center and certain financial
information relating to this acquisition.
32
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CRESCENT REAL ESTATE EQUITIES COMPANY
/s/ Gerald W. Haddock
----------------------------------------
Date: November 13, 1997 Gerald W. Haddock, President and Chief
Executive Officer
/s/ Dallas E. Lucas
----------------------------------------
Date: November 13, 1997 Dallas E. Lucas, Senior Vice President,
Chief Financial Officer and Chief
Accounting Officer
33
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit
------ ----------------------
10.29 Third Amended and Restated Revolving Credit Agreement, dated
September 22, 1997 among Crescent Real Estate Equities Limited
Partnership and BankBoston, N.A. and the other banks named
therein (filed herewith)
27.1 Financial Data Schedule (filed herewith)
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘10-Q’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 12/31/20 | | 31 |
| | 9/15/07 | | 10 |
| | 9/15/02 | | 10 |
| | 8/31/00 | | 31 |
| | 9/30/98 | | 31 | | | | | 10-Q, S-3/A |
| | 3/31/98 | | 18 | | | | | 10-K, 10-Q |
| | 12/31/97 | | 17 | | | | | 10-K, 10-K/A, 11-K |
| | 12/15/97 | | 7 |
| | 11/19/97 |
| Filed on: | | 11/14/97 |
| | 11/13/97 | | 33 |
| | 11/11/97 | | 1 |
| | 11/7/97 | | 18 |
| | 11/4/97 | | 16 |
| | 11/3/97 | | 18 |
| | 10/31/97 | | 17 | | 23 |
| | 10/30/97 | | 17 |
| | 10/29/97 | | 17 | | 21 | | | S-3/A |
| | 10/22/97 | | 16 | | | | | 8-K |
| | 10/16/97 | | 16 | | | | | S-3 |
| | 10/15/97 | | 10 | | 23 | | | 8-K |
| | 10/8/97 | | 16 | | 21 | | | 8-K |
| | 10/1/97 | | 31 | | 32 | | | 8-K, 8-K/A, S-3/A |
| For Period End: | | 9/30/97 | | 1 | | 32 | | | 10-Q/A, 8-K, 8-K/A |
| | 9/29/97 | | 14 | | 15 |
| | 9/28/97 | | 17 | | | | | 8-K/A |
| | 9/22/97 | | 10 | | 34 | | | 8-K |
| | 9/10/97 | | 16 |
| | 8/31/97 | | 31 |
| | 8/29/97 | | 15 | | 31 |
| | 8/13/97 | | 32 | | | | | 424B5, 8-K |
| | 8/12/97 | | 12 | | 21 |
| | 8/11/97 | | 32 |
| | 8/5/97 | | 12 |
| | 7/31/97 | | 14 |
| | 7/23/97 | | 11 | | 31 | | | 424B5, 8-K |
| | 7/22/97 | | 31 | | | | | 8-K |
| | 7/16/97 | | 12 |
| | 7/2/97 | | 31 | | | | | 8-K/A |
| | 6/20/97 | | 31 | | | | | 8-K |
| | 6/17/97 | | 14 |
| | 6/12/97 | | 12 |
| | 6/11/97 | | 13 |
| | 5/30/97 | | 12 |
| | 5/14/97 | | 11 | | 21 |
| | 5/9/97 | | 13 |
| | 4/30/97 | | 11 | | | | | 10-K405/A |
| | 4/28/97 | | 11 | | 21 |
| | 3/26/97 | | 11 |
| | 3/20/97 | | 11 |
| | 3/2/97 | | 11 |
| | 2/28/97 | | 12 | | 13 | | | 8-K, 8-K/A |
| | 2/14/97 | | 21 | | | | | POS AM, S-3, SC 13G/A |
| | 2/10/97 | | 13 | | | | | SC 13G/A |
| | 2/4/97 | | 11 |
| | 1/29/97 | | 31 | | | | | 8-K, 8-K/A |
| | 1/21/97 | | 11 |
| | 1/17/97 | | 12 |
| | 12/31/96 | | 2 | | 20 | | | 10-K405, 10-K405/A, 11-K |
| | 10/9/96 | | 15 |
| | 10/2/96 | | 15 |
| | 9/30/96 | | 2 | | 29 | | | 10-Q, 10-Q/A, 424B5 |
| | 1/1/96 | | 15 |
| List all Filings |
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