Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Aug. 31, 2015 | Oct. 02, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | GRIFFIN INDUSTRIAL REALTY, INC. | |
Entity Central Index Key | 1,037,390 | |
Document Type | 10-Q | |
Document Period End Date | Aug. 31, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --11-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 5,152,708 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Aug. 31, 2015 | Nov. 30, 2014 |
ASSETS | ||
Real estate assets at cost, net of accumulated depreciation | $ 156,970 | $ 134,522 |
Real estate held for sale | 9,963 | 9,943 |
Cash and cash equivalents | 6,350 | 17,059 |
Deferred income taxes | 5,640 | 5,996 |
Mortgage proceeds held in escrow | 4,125 | 1,000 |
Available-for-sale securities | 2,562 | 1,924 |
Note receivable | 1,451 | |
Other assets | 15,416 | 14,482 |
Total assets | 201,026 | 186,377 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Mortgage loans | 79,528 | 70,168 |
Deferred revenue | 11,580 | 8,349 |
Accounts payable and accrued liabilities | 5,203 | 3,505 |
Dividend payable | 1,030 | |
Other liabilities | 7,844 | 7,438 |
Liabilities of discontinued operation | 8 | |
Total liabilities | $ 104,155 | $ 90,498 |
Commitments and Contingencies (Note 10) | ||
Stockholders' Equity | ||
Common stock, par value $0.01 per share, 10,000,000 shares authorized, 5,541,029 and 5,537,895 shares issued, respectively, and 5,152,708 and 5,149,574 shares outstanding, respectively | $ 55 | $ 55 |
Additional paid-in capital | 108,159 | 107,887 |
Retained earnings | 2,499 | 2,238 |
Accumulated other comprehensive loss, net of tax | (376) | (835) |
Treasury stock, at cost, 388,321 shares | (13,466) | (13,466) |
Total stockholders' equity | 96,871 | 95,879 |
Total liabilities and stockholders' equity | $ 201,026 | $ 186,377 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Aug. 31, 2015 | Nov. 30, 2014 |
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 5,541,029 | 5,537,895 |
Common stock, shares outstanding | 5,152,708 | 5,149,574 |
Treasury stock, shares | 388,321 | 388,321 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2015 | Aug. 31, 2014 | Aug. 31, 2015 | Aug. 31, 2014 | |
Consolidated Statements of Operations | ||||
Rental revenue | $ 6,608 | $ 5,195 | $ 17,966 | $ 15,225 |
Revenue from property sales | 1,576 | 904 | 2,647 | 1,274 |
Total revenue | 8,184 | 6,099 | 20,613 | 16,499 |
Operating expenses of rental properties | 2,125 | 1,800 | 6,410 | 5,998 |
Depreciation and amortization expense | 1,923 | 1,711 | 5,627 | 4,990 |
Costs related to property sales | 162 | 230 | 484 | 324 |
General and administrative expenses | 1,333 | 1,642 | 5,191 | 5,522 |
Total expenses | 5,543 | 5,383 | 17,712 | 16,834 |
Operating income (loss) | 2,641 | 716 | 2,901 | (335) |
Interest expense | (801) | (987) | (2,645) | (2,665) |
Investment income | 6 | 31 | 111 | 219 |
Gain on sale of common stock in Centaur Media plc | 318 | |||
Loss on debt extinguishment | (51) | (51) | ||
Income (loss) before income tax (provision) benefit | 1,846 | (291) | 367 | (2,514) |
Income tax (provision) benefit | (643) | 93 | (106) | 993 |
Income (loss) from continuing operations | 1,203 | (198) | 261 | (1,521) |
Discontinued operations, net of tax: | ||||
Income from landscape nursery business, including the loss on sale of assets of $28, net of tax, in the 2014 nine month period | 26 | 144 | ||
Net income (loss) | $ 1,203 | $ (172) | $ 261 | $ (1,377) |
Basic net income (loss) per common share: | ||||
Income (loss) from continuing operations (in dollars per share) | $ 0.23 | $ (0.04) | $ 0.05 | $ (0.30) |
Income from discontinued operations (in dollars per share) | 0.01 | 0.03 | ||
Basic net income (loss) per common share (in dollars per share) | 0.23 | (0.03) | 0.05 | (0.27) |
Diluted net income (loss) per common share: | ||||
Income (loss) from continuing operations (in dollars per share) | 0.23 | (0.04) | 0.05 | (0.30) |
Income from discontinued operations (in dollars per share) | 0.01 | 0.03 | ||
Diluted net income (loss) per common share (in dollars per share) | $ 0.23 | $ (0.03) | $ 0.05 | $ (0.27) |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Parenthetical) $ in Thousands | 9 Months Ended |
Aug. 31, 2014USD ($) | |
Consolidated Statements of Operations | |
Loss from sale of assets net of tax | $ (28) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2015 | Aug. 31, 2014 | Aug. 31, 2015 | Aug. 31, 2014 | |
Consolidated Statements of Comprehensive Income (Loss) | ||||
Net income (loss) | $ 1,203 | $ (172) | $ 261 | $ (1,377) |
Other comprehensive income (loss), net of tax: | ||||
Reclassifications included in net income (loss) | 189 | 158 | 557 | (33) |
Increase (decrease) in fair value of Centaur Media plc | 123 | (147) | 414 | 180 |
Unrealized loss on cash flow hedges | (54) | (58) | (512) | (390) |
Total other comprehensive income (loss), net of tax | 258 | (47) | 459 | (243) |
Total comprehensive income (loss) | $ 1,461 | $ (219) | $ 720 | $ (1,620) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total |
Balance at Nov. 30, 2013 | $ 55 | $ 107,603 | $ 4,372 | $ (449) | $ (13,466) | $ 98,115 |
Balance (in shares) at Nov. 30, 2013 | 5,534,687 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 146 | 146 | ||||
Exercise of stock options | 80 | 80 | ||||
Exercise of stock options (shares) | 3,208 | |||||
Net income (loss) | (1,377) | (1,377) | ||||
Total other comprehensive income, net of tax | (243) | (243) | ||||
Balance at Aug. 31, 2014 | $ 55 | 107,829 | 2,995 | (692) | (13,466) | 96,721 |
Balance (in shares) at Aug. 31, 2014 | 5,537,895 | |||||
Balance at Nov. 30, 2014 | $ 55 | 107,887 | 2,238 | (835) | (13,466) | 95,879 |
Balance (in shares) at Nov. 30, 2014 | 5,537,895 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 192 | 192 | ||||
Exercise of stock options | 80 | 80 | ||||
Exercise of stock options (shares) | 3,134 | |||||
Net income (loss) | 261 | 261 | ||||
Total other comprehensive income, net of tax | 459 | 459 | ||||
Balance at Aug. 31, 2015 | $ 55 | $ 108,159 | $ 2,499 | $ (376) | $ (13,466) | $ 96,871 |
Balance (in shares) at Aug. 31, 2015 | 5,541,029 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Aug. 31, 2015 | Aug. 31, 2014 | |
Operating activities: | ||
Net income (loss) | $ 261 | $ (1,377) |
(Income) from discontinued operations | (144) | |
Income (loss) from continuing operations | 261 | (1,521) |
Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used in) operating activities of continuing operations: | ||
Depreciation and amortization | 5,627 | 4,990 |
Gain on sales of property | (2,163) | (950) |
Stock-based compensation expense | 192 | 276 |
Amortization of debt issuance costs | 174 | 196 |
Deferred income taxes | 106 | (993) |
Accretion of discount on note receivable | (49) | (139) |
Gain on sales of common stock in Centaur Media plc | (318) | |
Loss on debt extinguishment | 51 | |
Changes in assets and liabilities: | ||
Other assets | (631) | (1,363) |
Accounts payable and accrued liabilities | 442 | (207) |
Deferred revenue | 5,478 | 504 |
Other liabilities | 477 | 248 |
Net cash provided by (used in) operating activities of continuing operations | 9,914 | 774 |
Net cash used in operating activities of discontinued operations | (69) | |
Net cash provided by (used in) operating activities | 9,914 | 705 |
Investing activities: | ||
Additions to real estate assets | (26,461) | (12,473) |
Proceeds from collection of note receivable | 1,500 | 2,750 |
Deferred leasing costs and other | (836) | (178) |
Proceeds from sales of property | 400 | |
Proceeds from property sales returned from (deposited in) escrow, net | 8,864 | |
Proceeds from sales of common stock in Centaur Media plc | 566 | |
Proceeds from sale of business | 169 | |
Net cash used in investing activities | (25,397) | (302) |
Financing activities: | ||
Proceeds from mortgages | 28,891 | 5,477 |
Payments of debt | (19,531) | (1,512) |
Mortgage proceeds held in escrow | (3,125) | (1,000) |
Dividends paid to stockholders | (1,030) | (1,029) |
Debt issuance costs | (511) | (108) |
Exercise of stock options | 80 | 80 |
Net cash provided by (used in) financing activities | 4,774 | 1,908 |
Net increase (decrease) in cash and cash equivalents | (10,709) | 2,311 |
Cash and cash equivalents at beginning of year | 17,059 | 14,179 |
Cash and cash equivalents at end of year | $ 6,350 | $ 16,490 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Aug. 31, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Basis of Presentation On May 13, 2015, Griffin Land & Nurseries, Inc. changed its name to Griffin Industrial Realty, Inc. (“Griffin”) to reflect better Griffin’s ongoing real estate business that is principally engaged in developing, managing and leasing industrial and, to a lesser extent, commercial properties. Periodically, Griffin may also sell certain portions of its undeveloped land that it has owned for an extended time period and the use of which is not consistent with Griffin’s core development and leasing strategy. The accompanying unaudited consolidated financial statements of Griffin reflect its real estate business after Griffin sold its landscape nursery business in January 2014 (see below). These financial statements have been prepared in conformity with the standards of accounting measurement set forth by Financial Accounting Standards Board (“FASB”) ASC 270, “Interim Reporting” and in accordance with the accounting policies stated in Griffin’s audited consolidated financial statements for the fiscal year ended November 30, 2014 (“fiscal 2014”) included in Griffin’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on February 13, 2015. These financial statements should be read in conjunction with the Notes to Consolidated Financial Statements appearing in that report. All adjustments, comprising only normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of results for the interim periods, have been reflected and all intercompany transactions have been eliminated. The consolidated balance sheet data as of November 30, 2014 was derived from Griffin’s audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. Griffin regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, stock-based compensation expense, deferred income tax asset valuations, valuation of derivative instruments and the estimated costs to complete required offsite improvements to land sold. Griffin bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by Griffin may differ materially and adversely from Griffin’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. As of August 31, 2015, Griffin was a party to several interest rate swap agreements to hedge its interest rate exposure. Griffin does not use derivatives for speculative purposes. Griffin applies FASB ASC 815-10, “Derivatives and Hedging,” (“ASC 815-10”) as amended, which establishes accounting and reporting standards for derivative instruments and hedging activities. ASC 815-10 requires Griffin to recognize all derivatives as either assets or liabilities on its consolidated balance sheet and measure those instruments at fair value. The changes in the fair values of the interest rate swap agreements are measured in accordance with ASC 815-10 and reflected in the carrying values of the interest rate swap agreements on Griffin’s consolidated balance sheet. The estimated fair values are based primarily on projected future swap rates. Griffin applies cash flow hedge accounting to its interest rate swap agreements that are designated as hedges of the variability of future cash flows from floating rate liabilities based on the benchmark interest rates. Changes in the fair values of Griffin’s interest rate swap agreements are recorded as components of accumulated other comprehensive income (loss) in stockholders’ equity to the extent they are effective. Any ineffective portions of the changes in fair values of these instruments would be recorded as interest expense or interest income. The growing operation of Griffin’s landscape nursery business, previously conducted through its wholly-owned subsidiary, Imperial Nurseries, Inc. (“Imperial”), is reported as a discontinued operation due to the sale, effective January 8, 2014, of its inventory and certain of its assets (the “Imperial Sale”) to Monrovia Connecticut LLC (“Monrovia”), a subsidiary of Monrovia Nursery Company (see Note 8). Concurrent with the Imperial Sale, a subsidiary of Griffin and Imperial entered into a long-term lease with Monrovia for Imperial’s Connecticut production nursery. Imperial was engaged in growing landscape nursery plants in containers for sale to independent retail garden centers and rewholesalers, whose main customers were landscape contractors. As the growing operations of Imperial are reflected as a discontinued operation in Griffin’s unaudited consolidated financial statements, Griffin’s continuing operations presented in the accompanying financial statements solely reflect its real estate business and, therefore, industry segment information is not presented. The results of operations for the three months ended August 31, 2015 (the “2015 third quarter”) and the nine months ended August 31, 2015 (the “2015 nine month period”) are not necessarily indicative of the results to be expected for the full year. The three months and nine months ended August 31, 2014 are referred to herein as the “2014 third quarter” and “2014 nine month period,” respectively. Certain amounts from the 2014 periods have been reclassified to conform to the current presentation. Recent Accounting Pronouncements In August 2015, the FASB issued Accounting Standards Update No. 2015-15, “Interest-Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting,” which addresses line-of-credit arrangements that were omitted from Accounting Standards Update No. 2015-03 (see below). This Update states that the SEC staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing those costs ratably over the term of the arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The adoption of this guidance is not expected to have a material impact on Griffin’s financial position or results of operations. In August 2015, the FASB issued Accounting Standards Update No. 2015-14, “Revenue from Contracts with Customers - Deferral of the Effective Date,” which defers the effective date of Accounting Standards Update No. 2014-09 (see below) for Griffin until fiscal 2019. In April 2015, the FASB issued Accounting Standards Update No. 2015-03, “Interest-Imputation of Interest,” which requires that debt issuance costs related to a recognized liability be presented in the balance sheet as a direct reduction from the carrying amount of the associated debt liability, consistent with debt discounts. The guidance must be applied on a retrospective basis and will be effective for Griffin in fiscal 2017. Early adoption is permitted. The adoption of this guidance is not expected to have a material impact on Griffin’s financial position or results of operations. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers,” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry specific guidance. This standard requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. Additionally, the Update requires improved disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized. The Update permits the use of either the retrospective or cumulative effect transition method. This Update will be effective for Griffin in fiscal 2019 and early adoption is not permitted. Certain aspects of this new standard may affect revenue recognition of Griffin. Griffin is evaluating the impact that the application of this Update will have on its consolidated financial statements. |
Real Estate Assets
Real Estate Assets | 9 Months Ended |
Aug. 31, 2015 | |
Real Estate Assets | |
Real Estate Assets | 2. Real Estate Assets Real estate assets, net consist of: Estimated Useful Lives Aug. 31, 2015 Nov. 30, 2014 Land $ $ Land improvements 10 to 30 years Buildings and improvements 10 to 40 years Tenant improvements Shorter of useful life or terms of related lease Machinery and equipment 3 to 20 years Construction in progress Development costs Accumulated depreciation ) ) $ $ Total depreciation expense and capitalized interest related to real estate assets, net were as follows: For the Three Months Ended, For the Nine Months Ended, Aug. 31, 2015 Aug. 31, 2014 Aug. 31, 2015 Aug. 31, 2014 Depreciation expense $ $ $ $ Capitalized interest $ $ $ $ In the 2013 fourth quarter, Griffin completed the sale of approximately 90 acres of undeveloped land for approximately $9,000 in cash, before transaction costs (the “Windsor Land Sale”). The land sold is located in Windsor, Connecticut and is part of an approximately 253 acre parcel of undeveloped land that straddles the town line between Windsor and Bloomfield, Connecticut. Under the terms of the Windsor Land Sale, Griffin and the buyer are each constructing roadways connecting the land parcel sold with existing town roads. The roads being built will become new town roads, providing public access to the remaining acreage in Griffin’s land parcel. As a result of Griffin’s continuing involvement with the land sold, the Windsor Land Sale is being accounted for under the percentage of completion method. Accordingly, the revenue and pretax gain on the sale are being recognized on a pro rata basis in a ratio equal to the percentage of the total costs incurred to the total anticipated costs of sale, including costs of the required roadwork. Costs included in determining the percentage of completion include the cost of the land sold, allocated master planning costs and the cost of road construction. At the closing of the Windsor Land Sale, cash proceeds of $8,860 were placed in escrow for the potential purchase of a replacement property in a like-kind exchange under Section 1031 of the Internal Revenue Code of 1986, as amended. The proceeds held in escrow (including interest earned) were returned to Griffin in the 2014 second quarter, as a replacement property was not acquired. As of August 31, 2015, approximately 89% of the total costs related to the Windsor Land Sale have been incurred; therefore, from the date of the Windsor Land Sale through August 31, 2015, approximately 89% of the total revenue and pretax gain on the sale have been recognized in Griffin’s consolidated statements of operations. Griffin’s consolidated statements of operations for the 2015 third quarter and 2015 nine month period include revenue of $1,176 and $2,247, respectively, and a pretax gain of $1,014 and $1,763, respectively, from the Windsor Land Sale. Griffin’s consolidated statements of operations for the 2014 third quarter and 2014 nine month period include revenue of $904 and $1,274, respectively, and a pretax gain of $674 and $950, respectively, from the Windsor Land Sale. As of August 31, 2015, Griffin has recognized total revenue of $8,020 and a total pretax gain of $6,111 from the Windsor Land Sale. The balance of the revenue and pretax gain on sale will be recognized when the remaining costs are incurred, which is expected to take place mostly in the fourth quarter of fiscal 2015. Deferred revenue on Griffin’s consolidated balance sheet as of August 31, 2015, includes $948 related to the Windsor Land Sale that will be recognized as the remaining costs are incurred. The total pretax gain on the Windsor Land Sale is expected to be approximately $6,833 after all revenue is recognized and all costs are incurred. While management has used its best estimates, based on industry knowledge and experience, in projecting the total costs of the required roadways being constructed, increases or decreases in future costs as compared with current estimated amounts would reduce or increase the gain recognized in future periods. The Florida farm that had been used by Imperial prior to being shut down in fiscal 200 9 has been leased to a private company grower of landscape nursery products since fiscal 2009. In the 2015 second quarter, the tenant that leases the Florida farm gave notice of its intent to exercise the purchase option for the Florida farm under the terms of its lease for approximately $4,100. On June 1, 2015, Griffin received a deposit of $400 as required under the terms of the lease agreement. In August 2015, that tenant informed Griffin that it would not close on the purchase of the Florida farm. Imperial and the tenant subsequently entered into a Holdover and Settlement Agreement (the “Agreement”) which permits the tenant to continue to lease the Florida farm at an agreed upon rental rate through April 30, 2016. The Agreement also stipulates that Imperial is entitled to retain the deposit against the purchase price made by the tenant when it exercised its option to purchase the Florida farm, therefore, the $400 deposit is reflected as property sales revenue in Griffin’s consolidated statements of operations for the 2015 third quarter and 2015 nine month period. Real estate assets held for sale, net consist of: Aug. 31, 2015 Nov. 30, 2014 Land $ $ Development costs $ $ |
Fair Value
Fair Value | 9 Months Ended |
Aug. 31, 2015 | |
Fair Value | |
Fair Value | 3. Fair Value Griffin applies the provisions of FASB ASC 820, “Fair Value Measurement” (“ASC 820”), which establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value, as follows: Level 1 applies to assets or liabilities for which there are quoted market prices in active markets for identical assets or liabilities. Griffin’s available-for-sale securities are considered Level 1 within the fair value hierarchy. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities in active markets; quoted prices for assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 2 assets include Griffin’s note receivable from Monrovia that was fully collected on June 1, 2015 (see Note 8). Level 2 assets and liabilities include Griffin’s interest rate swap derivatives (see Note 5). These inputs are readily available in public markets or can be derived from information available in publicly quoted markets; therefore, Griffin has categorized these derivative instruments as Level 2 within the fair value hierarchy. Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. During the 2015 nine month period, Griffin did not transfer any assets or liabilities in or out of Levels 1 or 2. The following are Griffin’s financial assets and liabilities carried at fair value and measured at fair value on a recurring basis: August 31, 2015 Quoted Prices in Significant Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Marketable equity securities $ $ — $ — Interest rate swap liabilities $ — $ $ — November 30, 2014 Quoted Prices in Significant Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Marketable equity securities $ $ — $ — Interest rate swap asset $ — $ $ — Interest rate swap liabilities $ — $ $ — The carrying and estimated fair values of Griffin’s financial instruments are as follows: Fair Value August 31, 2015 November 30, 2014 Hierarchy Carrying Estimated Carrying Estimated Level Value Fair Value Value Fair Value Financial assets: Cash and cash equivalents 1 $ $ $ $ Available-for-sale securities 1 Note receivable 2 — — Interest rate swap 2 — — Financial liabilities: Mortgage loans 2 Interest rate swaps 2 The amounts included in the financial statements for cash and cash equivalents, note receivable, leasing receivables and accounts payable and accrued liabilities approximate their fair values because of the short-term maturity of these instruments. The fair values of the available-for-sale securities are based on quoted market prices. The fair values of the mortgage loans are estimated based on current rates offered to Griffin for similar debt of the same remaining maturities and, additionally, Griffin considers its credit worthiness in determining the fair value of its mortgage loans. The fair values of the interest rate swaps (used for purposes other than trading) are determined based on discounted cash flow models that incorporate the cash flows of the derivatives as well as the current OIS rate and swap curve along with other market data, taking into account current interest rates and the credit worthiness of the counterparty for assets and the credit worthiness of Griffin for liabilities. |
Investment in Centaur Media plc
Investment in Centaur Media plc | 9 Months Ended |
Aug. 31, 2015 | |
Investment in Centaur Media plc | |
Investment in Centaur Media plc | 4. Investment in Centaur Media plc As of August 31, 2015, Griffin held 1,952,462 shares of common stock in Centaur Media plc (“Centaur Media”). Griffin’s investment in the common stock of Centaur Media is accounted for as an available-for-sale security under ASC 320-10, “Investments — Debt and Equity Securities.” Accordingly, changes in the fair value of Centaur Media, reflecting both changes in the stock price and changes in the foreign currency exchange rate, are included, net of income taxes, in accumulated other comprehensive income (see Note 7). In the 2014 nine month period, Griffin had a pretax gain of $318 from the sale of 500,000 shares of its Centaur Media common stock, which generated total cash proceeds of $566, after transaction costs. Griffin has not sold any of its Centaur Media common stock since the sale in the 2014 nine month period. The fair value, cost and unrealized gain of Griffin’s investment in Centaur Media are as follows: Aug. 31, 2015 Nov. 30, 2014 Fair value $ $ Cost Unrealized gain $ $ |
Mortgage Loans
Mortgage Loans | 9 Months Ended |
Aug. 31, 2015 | |
Mortgage Loans | |
Mortgage Loans | 5. Mortgage Loans Griffin’s mortgage loans, which are nonrecourse, consist of: Aug. 31, 2015 Nov. 30, 2014 5.73%, due August 1, 2015 $ — $ Variable rate mortgage, due October 2, 2017* Variable rate mortgage, due February 1, 2019* Variable rate mortgage, due August 1, 2019* Variable rate mortgage, due January 27, 2020* Variable rate mortgage, due September 1, 2023* — Variable rate mortgage, due January 2, 2025* — 5.09%, due July 1, 2029 5.09%, due July 1, 2029 4.33%, due August 1, 2030 — Total nonrecourse mortgages $ $ * Griffin entered into interest rate swap agreements effectively to fix the interest rates on these loans (see below). On July 29, 2015, a subsidiary of Griffin closed on a new nonrecourse mortgage with 40|86 Mortgage Capital, Inc. (“the 40|86 Mortgage”) for $18,000. The 40|86 Mortgage refinanced an existing 5.73% nonrecourse mortgage which was due on August 1, 2015 and was collateralized by three industrial buildings totaling approximately 392,000 square feet (“75 International Drive,” “754 Rainbow Road” and “758 Rainbow Road”) in New England Tradeport, Griffin’s industrial park located in Windsor and East Granby, Connecticut. The 40|86 Mortgage is collateralized by the same three properties. Griffin received proceeds of $14,875 at closing (before transaction costs), which were applied to the payoff of the maturing existing mortgage of $17,891. The remaining $3,125 of loan proceeds were placed in escrow at closing. As per the terms of the 40|86 Mortgage, $2,500 of the escrowed proceeds are expected to be released to Griffin in the 2015 fourth quarter as the tenant that was leasing approximately 88,000 square feet on a month-to-month basis in 754 Rainbow Road has extended into a long-term lease for that space. $600 of mortgage proceeds deposited into escrow will be released to Griffin when tenant improvement work for the full building tenant in 758 Rainbow Road is completed and $25 placed in escrow was released subsequent to August 31, 2015 upon renewal of insurance coverage on the mortgaged properties. The 40|86 Mortgage has a fifteen year term with monthly payments based on a thirty year amortization schedule. The interest rate for the 40|86 Mortgage is 4.33%. On December 31, 2014, two subsidiaries of Griffin closed on a new nonrecourse mortgage (“the 2025 First Niagara Mortgage”) for $21,600. The 2025 First Niagara Mortgage refinanced an existing mortgage with First Niagara Bank (“First Niagara”) which was due on September 1, 2023 and was collateralized by an approximately 228,000 square foot industrial building (“4275 Fritch Drive”) in Lower Nazareth, Pennsylvania. The 2025 First Niagara Mortgage is collateralized by 4275 Fritch Drive along with an adjacent approximately 303,000 square foot industrial building (“4270 Fritch Drive”). Griffin received net proceeds of $10,891 at closing (before transaction costs), in addition to $8,859 used to refinance the existing mortgage with First Niagara. The remaining $1,850 of loan proceeds will not be advanced until a portion of the remaining vacant space of approximately 101,000 square feet in 4270 Fritch Drive is leased. The 2025 First Niagara Mortgage has a ten year term with monthly payments based on a twenty-five year amortization schedule. The interest rate for the 2025 First Niagara Mortgage is a floating rate of the one month LIBOR rate plus 1.95%. At the time the 2025 First Niagara Mortgage closed, Griffin entered into an interest rate swap agreement with First Niagara that, combined with an existing interest rate swap agreement with First Niagara, effectively fixes the rate of the 2025 First Niagara Mortgage at 4.43% over the mortgage loan’s ten year term. As of August 31, 2015, Griffin was a party to several interest rate swap agreements related to its variable rate nonrecourse mortgages on certain of its real estate assets. Griffin accounts for its interest rate swap agreements as effective cash flow hedges (see Note 3). No ineffectiveness on the cash flow hedges was recognized as of August 31, 2015 and none is anticipated over the term of the agreements. Amounts in accumulated other comprehensive income (loss) will be reclassified into interest expense over the term of the swap agreements to achieve fixed rates on each mortgage. None of the interest rate swap agreements contain any credit risk related contingent features. In the 2015 and 2014 nine month periods, Griffin recognized losses (included in other comprehensive loss) before taxes of $812 and $619, respectively, on its interest rate swap agreements. As of August 31, 2015, $1,068 was expected to be reclassified over the next twelve months from accumulated other comprehensive loss to interest expense. As of August 31, 2015, the net fair value of Griffin’s interest rate swap agreements was $2,251 and is included in other liabilities on Griffin’s consolidated balance sheet. On September 1, 2015, a subsidiary of Griffin closed on a new nonrecourse mortgage with Webster Bank (the “2015 Webster Mortgage”) for $14,100. The 2015 Webster Mortgage is collateralized by an approximately 280,000 square foot industrial building in the Lehigh Valley of Pennsylvania (“5220 Jaindl Boulevard”) that was completed and placed in service at the end of the 2015 third quarter. Griffin received proceeds of $11,500 at closing (before transaction costs), with the remaining $2,600 of loan proceeds to be advanced when, and if, the tenant that is leasing approximately 196,000 square feet in 5220 Jaindl Boulevard exercises its option to lease the balance of the building or when, and if, another tenant leases the currently unleased space on terms acceptable to Webster Bank. The tenant’s option to lease the balance of the building expires December 15, 2015. The 2015 Webster Mortgage has a ten year term with monthly payments based on a twenty-five year amortization schedule. The interest rate for the 2015 Webster Mortgage is a floating rate of the one month LIBOR rate plus 1.65%. At the time the 2015 Webster Mortgage closed, Griffin also entered into an interest rate swap agreement with Webster Bank for a notional principal amount of $11,500 at inception to fix the interest rate on the funds advanced under the 2015 Webster Mortgage at 3.77%. |
Revolving Credit Agreement
Revolving Credit Agreement | 9 Months Ended |
Aug. 31, 2015 | |
Revolving Credit Agreement | |
Revolving Credit Agreement | 6. Revolving Credit Agreement Griffin has a $12,500 revolving credit line with Webster Bank (the “Webster Credit Line”) that expires May 1, 2016. The Webster Credit Line was scheduled to expire on May 1, 2015, however, prior to that date Griffin exercised its option to extend the Webster Credit Line for one year. Interest on borrowings under the Webster Credit Line is at the one month LIBOR rate plus 2.75%. The Webster Credit Line is collateralized by Griffin’s properties in Griffin Center South, aggregating approximately 235,000 square feet, and an approximately 48,000 square foot single-story office building in Griffin Center. There have been no borrowings under the Webster Credit Line since its inception. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Aug. 31, 2015 | |
Stockholders' Equity | |
Stockholders' Equity | 7. Stockholders’ Equity Per Share Results Basic and diluted per share results were based on the following: For the Three Months Ended, For the Nine Months Ended, Aug. 31, 2015 Aug. 31, 2014 Aug. 31, 2015 Aug. 31, 2014 Income (loss) from continuing operations for computation of basic and diluted per share results, net of tax $ $ ) $ $ ) Income from discontinued operations for computation of basic and diluted per share results, net of tax — — Net income (loss) $ $ ) $ $ ) Weighted average shares outstanding for computation of basic per share results Incremental shares from assumed exercise of Griffin stock options (a) — — Adjusted weighted average shares for computation of diluted per share results (a) Incremental shares from the assumed exercise of Griffin stock options are not included in periods where the inclusion of such shares would be anti-dilutive. Such assessment is based on income (loss) from continuing operations when net income includes discontinued operations. The incremental shares from the assumed exercise of stock options for the three months and nine months ended August 31, 2014 would have been 3,000 and 12,000, respectively. Griffin Stock Option Plan Stock options are granted by Griffin under the Griffin Industrial Realty, Inc. 2009 Stock Option Plan (the “2009 Stock Option Plan”). Options granted under the 2009 Stock Option Plan may be either incentive stock options or non-qualified stock options issued at fair market value on the date approved by Griffin’s Compensation Committee. Vesting of all of Griffin’s previously issued stock options is solely based upon service requirements and does not contain market or performance conditions. Stock options issued will expire ten years from the grant date. In accordance with the 2009 Stock Option Plan, stock options issued to non-employee directors upon their initial election to the board of directors are fully exercisable immediately upon the date of the option grant. Stock options issued to non-employee directors upon their re-election to the board of directors vest on the second anniversary from the date of grant. Stock options issued to employees vest in equal installments on the third, fourth and fifth anniversaries from the date of grant. None of the stock options outstanding at August 31, 2015 may be exercised as stock appreciation rights. The following options were granted by Griffin under the 2009 Stock Option Plan to non-employee directors either upon their initial election or their re-election to Griffin’s Board of Directors: For the Nine Months Ended, August 31, 2015 August 31, 2014 Number of Shares Fair Value per Option at Grant Date Number of Shares Fair Value per Option at Grant Date Non-employee directors $ $ The fair values of all options granted were estimated as of the grant date using the Black-Scholes option-pricing model. Assumptions used in determining the fair value of the stock options granted in the 2015 and 2014 nine month periods were as follows: For the Nine Months Ended, August 31, 2015 August 31, 2014 Expected volatility % % Risk free interest rate % % Expected option term (in years) Annual dividend yield % % Activity under the 2009 Stock Option Plan is summarized as follows: For the Nine Months Ended, August 31, 2015 August 31, 2014 Number of Shares Weighted Avg. Exercise Price Number of Shares Weighted Avg. Exercise Price Outstanding at beginning of period $ $ Granted Exercised ) ) Forfeited ) ) Outstanding at end of period $ $ Range of Exercise Prices Outstanding at August 31, 2015 Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life (in years) Total Intrinsic Value $23.00-$28.00 $ 6.4 $ $28.00-$32.00 5.6 $32.00-$39.00 3.1 — $ 4.8 $ Number of option holders at August 31, 2015 Compensation expense and related tax benefits for stock options were as follows: For the Three Months Ended, For the Nine Months Ended, Aug. 31, 2015 Aug. 31, 2014 Aug. 31, 2015 Aug. 31, 2014 Compensation expense - continuing operations $ $ $ $ Compensation benefit - discontinued operations — — — ) Net compensation expense $ $ $ $ Related tax benefit - continuing operations $ $ $ $ Related tax expense - discontinued operations — — — ) Net related tax benefit $ $ $ $ As of August 31, 2015, the unrecognized compensation expense related to nonvested stock options that will be recognized during future periods is as follows: Balance of Fiscal 2015 $ Fiscal 2016 $ Fiscal 2017 $ Accumulated Other Comprehensive Loss Accumulated other comprehensive loss, net of tax, is comprised of the following: For the Nine Months Ended August 31, 2015 Unrealized gain Unrealized loss on on investment in cash flow hedges Centaur Media Total Balance November 30, 2014 $ ) $ $ ) Other comprehensive (loss) income before reclassfications ) ) Amounts reclassified — Net activity for other comprehensive loss Balance August 31, 2015 $ ) $ $ ) For the Nine Months Ended August 31, 2014 Unrealized gain Actuarial gain Unrealized loss on on investment in on postretirement cash flow hedges Centaur Media benefits program Total Balance November 30, 2013 $ ) $ $ $ ) Other comprehensive (loss) income before reclassifications ) — ) Amounts reclassified ) ) ) Net activity for other comprehensive loss ) ) ) Balance August 31, 2014 $ ) $ $ — $ ) The components of other comprehensive income (loss) are as follows: For the Three Months Ended, August 31, 2015 August 31, 2014 Pre-Tax Tax (Expense) Benefit Net-of-Tax Pre-Tax Tax (Expense) Benefit Net-of-Tax Reclassifications included in net income (loss): Loss on cash flow hedges (interest expense) $ $ ) $ $ $ ) $ Total reclassifications included in net income (loss) ) ) Mark to market adjustment on Centaur Media for an increase (decrease) in the foreign currency exchange rate ) ) ) Mark to market adjustment on Centaur Media for an increase (decrease) in fair value ) ) ) Decrease in fair value adjustments on Griffin’s cash flow hedges ) ) ) ) Total other changes in other comprehensive income (loss) ) ) ) Other comprehensive income (loss) $ $ ) $ $ ) $ $ ) For the Nine Months Ended, August 31, 2015 August 31, 2014 Pre-Tax Tax (Expense) Benefit Net-of-Tax Pre-Tax Tax (Expense) Benefit Net-of-Tax Reclassifications included in net income (loss): Loss on cash flow hedges (interest expense) $ $ ) $ $ $ ) $ Termination of postretirement benefits program ($283, net of tax, to discontinued operations, $21, net of tax, to general and administrative expense) — — — ) ) Realized gain on sale of Centaur Media (gain on sale) — — — ) ) Total reclassifications included in net income (loss) ) ) ) Mark to market adjustment on Centaur Media for a (decrease) increase in the foreign currency exchange rate ) ) ) Mark to market adjustment on Centaur Media for an increase in fair value ) ) Decrease in fair value adjustments on Griffin’s cash flow hedges ) ) ) ) Total change in other comprehensive income (loss) ) ) ) ) Other comprehensive income (loss) $ $ ) $ $ ) $ $ ) Cash Dividend Griffin did not declare a cash dividend in the 2015 or 2014 nine month periods. During the 2015 first quarter, Griffin paid $1,030 for the cash dividend declared in the 2014 fourth quarter. During the 2014 first quarter, Griffin paid $1,029 for the cash dividend declared in the 2013 fourth quarter. |
Discontinued Operation
Discontinued Operation | 9 Months Ended |
Aug. 31, 2015 | |
Discontinued Operation | |
Discontinued Operation | 8. Discontinued Operation Effective January 8, 2014, in accordance with the terms of the Imperial Sale, Imperial sold its inventory and certain assets for $732 in cash and a non-interest bearing note receivable of $4,250 (the “Promissory Note”). The Promissory Note was due in two installments: $2,750 was due and paid on June 1, 2014 and $1,500 was due and paid on June 1, 2015. The Promissory Note was discounted at 7% to its present value of $4,036 at inception and was secured by an irrevocable letter of credit. Under the terms of the Imperial Sale, Griffin and Imperial agreed to indemnify Monrovia for any potential environmental liabilities relating to periods prior to the effective date of the Imperial Sale and also agreed to certain non-competition restrictions for a four-year period. Net cash of $732 was received from Monrovia in the 2014 nine month period and Griffin paid $563 in severance and other expenses related to the Imperial Sale. Concurrent with the Imperial Sale, Imperial and River Bend Holdings, LLC, a wholly-owned subsidiary of Griffin, entered into a Lease and Option Agreement and an Addendum to such agreement (the “Imperial Lease” and together with the Imperial Sale, the “Imperial Transaction”) with Monrovia, pursuant to which Monrovia is leasing Imperial’s Connecticut production nursery for a ten-year period, with options to extend for up to an additional fifteen years exercisable by Monrovia. The Imperial Lease provides for net annual rent payable to Griffin of $500 for each of the first five years with rent for subsequent years determined in accordance with the Imperial Lease. The Imperial Lease also grants Monrovia an option to purchase most of the land, land improvements and other operating assets that were used by Imperial in its Connecticut growing operations during the first thirteen years of the lease period for $10,500, or $7,000 if only a certain portion of the land is purchased, subject in each case to certain adjustments as provided for in the Imperial Lease. Accordingly, the operating results of Imperial’s growing operations are reflected as a discontinued operation in Griffin’s consolidated statements of operations for all periods presented and the assets and liabilities of the growing operations of Imperial (excluding those assets that are part of the Imperial Lease) are shown as assets and liabilities of the discontinued operation on Griffin’s consolidated balance sheets. Revenue and the pretax income from Imperial’s growing operations, reflected as a discontinued operation in Griffin’s consolidated statements of operations, were as follows: For the Three Months Ended August 31, 2014 For the Nine Months Ended August 31, 2014 Net sales and other revenue $ $ Pretax income $ $ The pretax loss from the Imperial Sale in the 2014 nine month period was as follows: Consideration received from Monrovia, reflecting initial cash of $732 and note receivable of $4,036 $ Carrying value of assets sold, principally inventory ) Curtailment of employee benefit plan Severance and other expenses ) $ ) |
Supplemental Financial Statemen
Supplemental Financial Statement Information | 9 Months Ended |
Aug. 31, 2015 | |
Supplemental Financial Statement Information | |
Supplemental Financial Statement Information | 9. Supplemental Financial Statement Information Other Assets Griffin’s other assets are comprised of the following: Aug. 31, 2015 Nov. 30, 2014 Deferred leasing costs $ $ Deferred rent receivable Prepaid expenses Deferred financing costs Lease receivables Mortgage escrows Intangible assets, net Property and equipment, net Assets of discontinued operation Other $ $ Accounts Payable and Accrued Liabilities Griffin’s accounts payable and accrued liabilities are comprised of the following: Aug. 31, 2015 Nov. 30, 2014 Accrued construction costs and retainage $ $ Trade payables Accrued salaries, wages and other compensation Accrued interest payable Other $ $ Other Liabilities Griffin’s other liabilities are comprised of the following: Aug. 31, 2015 Nov. 30, 2014 Deferred compensation plan $ $ Interest rate swap agreements Prepaid rent from tenants Conditional asset retirement obligations Security deposits Other $ $ Supplemental Cash Flow Information Increases of $638 and $277 in the 2015 and 2014 nine month periods, respectively, in Griffin’s Investment in Centaur Media reflect the mark to market adjustments of this investment and did not affect Griffin’s cash. In the 2014 nine month period, Griffin sold 500,000 shares of its Centaur Media common stock (see Note 4). Accounts payable and accrued liabilities related to additions to real estate assets increased by $1,256 and $20 in the 2015 nine month period and 2014 nine month period, respectively. Interest payments were as follows: For the Three Months Ended, For the Nine Months Ended, Aug. 31, 2015 Aug. 31, 2014 Aug. 31, 2015 Aug. 31, 2014 $ $ $ $ Income Taxes Griffin’s effective income tax rate on continuing operations was 28.9% for the 2015 nine month period as compared to 39.5% for the 2014 nine month period. The effective tax rate in the 2015 nine month period is based on management’s projections for the balance of the year. To the extent that actual results differ from current projections, the effective income tax rate may change. As of August 31, 2015, Griffin’s consolidated balance sheet includes a net deferred tax asset of $5,640. Although Griffin has incurred a cumulative pretax loss from continuing operations (excluding nonrecurring items) for the three fiscal years ended November 30, 2014, management has concluded that a valuation allowance against its net deferred tax assets is not required. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Aug. 31, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | 10. Commitments and Contingencies As of August 31, 2015, Griffin had committed purchase obligations of approximately $1,269, principally for building and tenant improvements in its properties. On June 27, 2014, Griffin entered into an agreement to sell approximately 29 acres of an approximately 45 acre land parcel of the undeveloped land in Griffin Center for a minimum purchase price of $3,250, subject to adjustment based on the actual number of acres conveyed. If this sale were to be completed, the development potential of the remaining unsold acreage of the land parcel will be severely limited. Completion of this transaction is subject to significant contingencies, including a period for due diligence by the purchaser, which does not expire until fiscal 2016. There is no guarantee that this transaction will be completed under its current terms, or at all. Griffin is involved, as a defendant, in various litigation matters arising in the ordinary course of business. In the opinion of management, based on the advice of legal counsel, the ultimate liability, if any, with respect to these matters is not expected to be material, individually or in the aggregate, to Griffin’s consolidated financial position, results of operations or cash flows. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Aug. 31, 2015 | |
Subsequent Events. | |
Subsequent Events | 11. Subsequent Events See Note 5 for disclosure of the subsequent event related to the closing on a nonrecourse mortgage loan on September 1, 2015. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Aug. 31, 2015 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation On May 13, 2015, Griffin Land & Nurseries, Inc. changed its name to Griffin Industrial Realty, Inc. (“Griffin”) to reflect better Griffin’s ongoing real estate business that is principally engaged in developing, managing and leasing industrial and, to a lesser extent, commercial properties. Periodically, Griffin may also sell certain portions of its undeveloped land that it has owned for an extended time period and the use of which is not consistent with Griffin’s core development and leasing strategy. The accompanying unaudited consolidated financial statements of Griffin reflect its real estate business after Griffin sold its landscape nursery business in January 2014 (see below). These financial statements have been prepared in conformity with the standards of accounting measurement set forth by Financial Accounting Standards Board (“FASB”) ASC 270, “Interim Reporting” and in accordance with the accounting policies stated in Griffin’s audited consolidated financial statements for the fiscal year ended November 30, 2014 (“fiscal 2014”) included in Griffin’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on February 13, 2015. These financial statements should be read in conjunction with the Notes to Consolidated Financial Statements appearing in that report. All adjustments, comprising only normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of results for the interim periods, have been reflected and all intercompany transactions have been eliminated. The consolidated balance sheet data as of November 30, 2014 was derived from Griffin’s audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. Griffin regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, stock-based compensation expense, deferred income tax asset valuations, valuation of derivative instruments and the estimated costs to complete required offsite improvements to land sold. Griffin bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by Griffin may differ materially and adversely from Griffin’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. As of August 31, 2015, Griffin was a party to several interest rate swap agreements to hedge its interest rate exposure. Griffin does not use derivatives for speculative purposes. Griffin applies FASB ASC 815-10, “Derivatives and Hedging,” (“ASC 815-10”) as amended, which establishes accounting and reporting standards for derivative instruments and hedging activities. ASC 815-10 requires Griffin to recognize all derivatives as either assets or liabilities on its consolidated balance sheet and measure those instruments at fair value. The changes in the fair values of the interest rate swap agreements are measured in accordance with ASC 815-10 and reflected in the carrying values of the interest rate swap agreements on Griffin’s consolidated balance sheet. The estimated fair values are based primarily on projected future swap rates. Griffin applies cash flow hedge accounting to its interest rate swap agreements that are designated as hedges of the variability of future cash flows from floating rate liabilities based on the benchmark interest rates. Changes in the fair values of Griffin’s interest rate swap agreements are recorded as components of accumulated other comprehensive income (loss) in stockholders’ equity to the extent they are effective. Any ineffective portions of the changes in fair values of these instruments would be recorded as interest expense or interest income. The growing operation of Griffin’s landscape nursery business, previously conducted through its wholly-owned subsidiary, Imperial Nurseries, Inc. (“Imperial”), is reported as a discontinued operation due to the sale, effective January 8, 2014, of its inventory and certain of its assets (the “Imperial Sale”) to Monrovia Connecticut LLC (“Monrovia”), a subsidiary of Monrovia Nursery Company (see Note 8). Concurrent with the Imperial Sale, a subsidiary of Griffin and Imperial entered into a long-term lease with Monrovia for Imperial’s Connecticut production nursery. Imperial was engaged in growing landscape nursery plants in containers for sale to independent retail garden centers and rewholesalers, whose main customers were landscape contractors. As the growing operations of Imperial are reflected as a discontinued operation in Griffin’s unaudited consolidated financial statements, Griffin’s continuing operations presented in the accompanying financial statements solely reflect its real estate business and, therefore, industry segment information is not presented. The results of operations for the three months ended August 31, 2015 (the “2015 third quarter”) and the nine months ended August 31, 2015 (the “2015 nine month period”) are not necessarily indicative of the results to be expected for the full year. The three months and nine months ended August 31, 2014 are referred to herein as the “2014 third quarter” and “2014 nine month period,” respectively. Certain amounts from the 2014 periods have been reclassified to conform to the current presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2015, the FASB issued Accounting Standards Update No. 2015-15, “Interest-Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting,” which addresses line-of-credit arrangements that were omitted from Accounting Standards Update No. 2015-03 (see below). This Update states that the SEC staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing those costs ratably over the term of the arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The adoption of this guidance is not expected to have a material impact on Griffin’s financial position or results of operations. In August 2015, the FASB issued Accounting Standards Update No. 2015-14, “Revenue from Contracts with Customers - Deferral of the Effective Date,” which defers the effective date of Accounting Standards Update No. 2014-09 (see below) for Griffin until fiscal 2019. In April 2015, the FASB issued Accounting Standards Update No. 2015-03, “Interest-Imputation of Interest,” which requires that debt issuance costs related to a recognized liability be presented in the balance sheet as a direct reduction from the carrying amount of the associated debt liability, consistent with debt discounts. The guidance must be applied on a retrospective basis and will be effective for Griffin in fiscal 2017. Early adoption is permitted. The adoption of this guidance is not expected to have a material impact on Griffin’s financial position or results of operations. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers,” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry specific guidance. This standard requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. Additionally, the Update requires improved disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized. The Update permits the use of either the retrospective or cumulative effect transition method. This Update will be effective for Griffin in fiscal 2019 and early adoption is not permitted. Certain aspects of this new standard may affect revenue recognition of Griffin. Griffin is evaluating the impact that the application of this Update will have on its consolidated financial statements. |
Real Estate Assets (Tables)
Real Estate Assets (Tables) | 9 Months Ended |
Aug. 31, 2015 | |
Real Estate Assets | |
Schedule of real estate assets | Estimated Useful Lives Aug. 31, 2015 Nov. 30, 2014 Land $ $ Land improvements 10 to 30 years Buildings and improvements 10 to 40 years Tenant improvements Shorter of useful life or terms of related lease Machinery and equipment 3 to 20 years Construction in progress Development costs Accumulated depreciation ) ) $ $ |
Schedule of total depreciation expense and capitalized interest related to real estate assets, net | For the Three Months Ended, For the Nine Months Ended, Aug. 31, 2015 Aug. 31, 2014 Aug. 31, 2015 Aug. 31, 2014 Depreciation expense $ $ $ $ Capitalized interest $ $ $ $ |
Assets held for sale | |
Real Estate Assets | |
Schedule of real estate assets | Aug. 31, 2015 Nov. 30, 2014 Land $ $ Development costs $ $ |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Aug. 31, 2015 | |
Fair Value | |
Schedule of financial assets and liabilities carried at fair value and measured at fair value on a recurring basis: | August 31, 2015 Quoted Prices in Significant Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Marketable equity securities $ $ — $ — Interest rate swap liabilities $ — $ $ — November 30, 2014 Quoted Prices in Significant Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Marketable equity securities $ $ — $ — Interest rate swap asset $ — $ $ — Interest rate swap liabilities $ — $ $ — |
Schedule of carrying and estimated fair values of financial instruments | Fair Value August 31, 2015 November 30, 2014 Hierarchy Carrying Estimated Carrying Estimated Level Value Fair Value Value Fair Value Financial assets: Cash and cash equivalents 1 $ $ $ $ Available-for-sale securities 1 Note receivable 2 — — Interest rate swap 2 — — Financial liabilities: Mortgage loans 2 Interest rate swaps 2 |
Investment in Centaur Media p23
Investment in Centaur Media plc (Tables) | 9 Months Ended |
Aug. 31, 2015 | |
Investment in Centaur Media plc | |
Schedule of fair value, cost and unrealized gain of Griffin's investment in Centaur Media | Aug. 31, 2015 Nov. 30, 2014 Fair value $ $ Cost Unrealized gain $ $ |
Mortgage Loans (Tables)
Mortgage Loans (Tables) | 9 Months Ended |
Aug. 31, 2015 | |
Mortgage Loans | |
Schedule of long- term debt | Aug. 31, 2015 Nov. 30, 2014 5.73%, due August 1, 2015 $ — $ Variable rate mortgage, due October 2, 2017* Variable rate mortgage, due February 1, 2019* Variable rate mortgage, due August 1, 2019* Variable rate mortgage, due January 27, 2020* Variable rate mortgage, due September 1, 2023* — Variable rate mortgage, due January 2, 2025* — 5.09%, due July 1, 2029 5.09%, due July 1, 2029 4.33%, due August 1, 2030 — Total nonrecourse mortgages $ $ * Griffin entered into interest rate swap agreements effectively to fix the interest rates on these loans (see below). |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Aug. 31, 2015 | |
Stockholders' Equity | |
Schedule of basic and diluted per share results | For the Three Months Ended, For the Nine Months Ended, Aug. 31, 2015 Aug. 31, 2014 Aug. 31, 2015 Aug. 31, 2014 Income (loss) from continuing operations for computation of basic and diluted per share results, net of tax $ $ ) $ $ ) Income from discontinued operations for computation of basic and diluted per share results, net of tax — — Net income (loss) $ $ ) $ $ ) Weighted average shares outstanding for computation of basic per share results Incremental shares from assumed exercise of Griffin stock options (a) — — Adjusted weighted average shares for computation of diluted per share results (a) Incremental shares from the assumed exercise of Griffin stock options are not included in periods where the inclusion of such shares would be anti-dilutive. Such assessment is based on income (loss) from continuing operations when net income includes discontinued operations. The incremental shares from the assumed exercise of stock options for the three months and nine months ended August 31, 2014 would have been 3,000 and 12,000, respectively. |
Schedule of options granted by Griffin under the Stock Option Plan to non-employee directors | For the Nine Months Ended, August 31, 2015 August 31, 2014 Number of Shares Fair Value per Option at Grant Date Number of Shares Fair Value per Option at Grant Date Non-employee directors $ $ |
Schedule of assumptions used in determining fair values of each option | For the Nine Months Ended, August 31, 2015 August 31, 2014 Expected volatility % % Risk free interest rate % % Expected option term (in years) Annual dividend yield % % |
Summary of the activity under the Griffin Stock Option Plan | For the Nine Months Ended, August 31, 2015 August 31, 2014 Number of Shares Weighted Avg. Exercise Price Number of Shares Weighted Avg. Exercise Price Outstanding at beginning of period $ $ Granted Exercised ) ) Forfeited ) ) Outstanding at end of period $ $ |
Schedule of options by range of exercise prices | Range of Exercise Prices Outstanding at August 31, 2015 Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life (in years) Total Intrinsic Value $23.00-$28.00 $ 6.4 $ $28.00-$32.00 5.6 $32.00-$39.00 3.1 — $ 4.8 $ Number of option holders at August 31, 2015 |
Schedule of compensation expense and related tax benefits for stock options | For the Three Months Ended, For the Nine Months Ended, Aug. 31, 2015 Aug. 31, 2014 Aug. 31, 2015 Aug. 31, 2014 Compensation expense - continuing operations $ $ $ $ Compensation benefit - discontinued operations — — — ) Net compensation expense $ $ $ $ Related tax benefit - continuing operations $ $ $ $ Related tax expense - discontinued operations — — — ) Net related tax benefit $ $ $ $ |
Schedule of unrecognized compensation expense related to nonvested stock options that will be recognized during future periods | Balance of Fiscal 2015 $ Fiscal 2016 $ Fiscal 2017 $ |
Schedule of accumulated other comprehensive loss, and activity | For the Nine Months Ended August 31, 2015 Unrealized gain Unrealized loss on on investment in cash flow hedges Centaur Media Total Balance November 30, 2014 $ ) $ $ ) Other comprehensive (loss) income before reclassfications ) ) Amounts reclassified — Net activity for other comprehensive loss Balance August 31, 2015 $ ) $ $ ) For the Nine Months Ended August 31, 2014 Unrealized gain Actuarial gain Unrealized loss on on investment in on postretirement cash flow hedges Centaur Media benefits program Total Balance November 30, 2013 $ ) $ $ $ ) Other comprehensive (loss) income before reclassifications ) — ) Amounts reclassified ) ) ) Net activity for other comprehensive loss ) ) ) Balance August 31, 2014 $ ) $ $ — $ ) |
Schedule of components of other comprehensive (loss) income | For the Three Months Ended, August 31, 2015 August 31, 2014 Pre-Tax Tax (Expense) Benefit Net-of-Tax Pre-Tax Tax (Expense) Benefit Net-of-Tax Reclassifications included in net income (loss): Loss on cash flow hedges (interest expense) $ $ ) $ $ $ ) $ Total reclassifications included in net income (loss) ) ) Mark to market adjustment on Centaur Media for an increase (decrease) in the foreign currency exchange rate ) ) ) Mark to market adjustment on Centaur Media for an increase (decrease) in fair value ) ) ) Decrease in fair value adjustments on Griffin’s cash flow hedges ) ) ) ) Total other changes in other comprehensive income (loss) ) ) ) Other comprehensive income (loss) $ $ ) $ $ ) $ $ ) For the Nine Months Ended, August 31, 2015 August 31, 2014 Pre-Tax Tax (Expense) Benefit Net-of-Tax Pre-Tax Tax (Expense) Benefit Net-of-Tax Reclassifications included in net income (loss): Loss on cash flow hedges (interest expense) $ $ ) $ $ $ ) $ Termination of postretirement benefits program ($283, net of tax, to discontinued operations, $21, net of tax, to general and administrative expense) — — — ) ) Realized gain on sale of Centaur Media (gain on sale) — — — ) ) Total reclassifications included in net income (loss) ) ) ) Mark to market adjustment on Centaur Media for a (decrease) increase in the foreign currency exchange rate ) ) ) Mark to market adjustment on Centaur Media for an increase in fair value ) ) Decrease in fair value adjustments on Griffin’s cash flow hedges ) ) ) ) Total change in other comprehensive income (loss) ) ) ) ) Other comprehensive income (loss) $ $ ) $ $ ) $ $ ) |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Aug. 31, 2015 | |
Discontinued Operation | |
Schedule of revenue and pretax income from Imperial's growing operations, reflected as a discontinued operation in entity's consolidated statements of operations | For the Three Months Ended August 31, 2014 For the Nine Months Ended August 31, 2014 Net sales and other revenue $ $ Pretax income $ $ |
Schedule of pretax loss from the Imperial Sale | Consideration received from Monrovia, reflecting initial cash of $732 and note receivable of $4,036 $ Carrying value of assets sold, principally inventory ) Curtailment of employee benefit plan Severance and other expenses ) $ ) |
Supplemental Financial Statem27
Supplemental Financial Statement Information (Tables) | 9 Months Ended |
Aug. 31, 2015 | |
Supplemental Financial Statement Information | |
Schedule of other assets | Aug. 31, 2015 Nov. 30, 2014 Deferred leasing costs $ $ Deferred rent receivable Prepaid expenses Deferred financing costs Lease receivables Mortgage escrows Intangible assets, net Property and equipment, net Assets of discontinued operation Other $ $ |
Schedule of accounts payable and accrued liabilities | Aug. 31, 2015 Nov. 30, 2014 Accrued construction costs and retainage $ $ Trade payables Accrued salaries, wages and other compensation Accrued interest payable Other $ $ |
Schedule of other liabilities | Aug. 31, 2015 Nov. 30, 2014 Deferred compensation plan $ $ Interest rate swap agreements Prepaid rent from tenants Conditional asset retirement obligations Security deposits Other $ $ |
Schedule of interest payments | For the Three Months Ended, For the Nine Months Ended, Aug. 31, 2015 Aug. 31, 2014 Aug. 31, 2015 Aug. 31, 2014 $ $ $ $ |
Real Estate Assets (Details)
Real Estate Assets (Details) $ in Thousands | Jun. 01, 2015USD ($) | Aug. 31, 2015USD ($) | Aug. 31, 2014USD ($) | Aug. 31, 2015USD ($) | Aug. 31, 2014USD ($) | Nov. 30, 2014USD ($) | May. 31, 2015USD ($) | Nov. 30, 2013USD ($)a |
Real Estate Assets | ||||||||
Real estate assets, gross | $ 235,980 | $ 235,980 | $ 209,284 | |||||
Accumulated depreciation | (79,010) | (79,010) | (74,762) | |||||
Real estate assets, net | 156,970 | 156,970 | 134,522 | |||||
Depreciation expense | 1,619 | $ 1,459 | 4,765 | $ 4,527 | ||||
Capitalized interest | 290 | 49 | 657 | 424 | ||||
Sales | ||||||||
Deferred revenue | 11,580 | 11,580 | 8,349 | |||||
Imperial's landscape nursery business | ||||||||
Sales | ||||||||
Sale price | 4,100 | 4,100 | $ 4,100 | |||||
Windsor undeveloped land sale | ||||||||
Sales | ||||||||
Revenue from sale of land | 8,020 | |||||||
Pretax gain on land sale | 6,111 | |||||||
Assets held for sale | ||||||||
Real Estate Assets | ||||||||
Real estate assets, net | 9,963 | 9,963 | 9,943 | |||||
Imperial's Florida farm | Imperial's landscape nursery business | ||||||||
Sales | ||||||||
Deposit received in real estate sale | $ 400 | |||||||
Revenue from sale of land | 400 | 400 | ||||||
Land | ||||||||
Real Estate Assets | ||||||||
Real estate assets, gross | $ 17,955 | $ 17,955 | 17,955 | |||||
Land | Windsor undeveloped land sale | ||||||||
Sales | ||||||||
Number of acres sold | a | 90 | |||||||
Sale price | $ 9,000 | |||||||
Number of acres of undeveloped land | a | 253 | |||||||
Proceeds from land sale deposited in escrow | $ 8,860 | |||||||
Percentage of cost incurred on sale of land | 89.00% | 89.00% | ||||||
Percentage of total revenue and pretax gain on sale have been recognized | 89.00% | |||||||
Revenue from sale of land | $ 1,176 | 904 | $ 2,247 | 1,274 | ||||
Pretax gain on land sale | 1,014 | $ 674 | 1,763 | $ 950 | ||||
Deferred revenue | 948 | 948 | ||||||
Estimated pretax gain on sale that would be recognized after incurring total costs and recognizing total revenue | 6,833 | 6,833 | ||||||
Land | Assets held for sale | ||||||||
Real Estate Assets | ||||||||
Real estate assets, gross | 286 | 286 | 286 | |||||
Land improvements | ||||||||
Real Estate Assets | ||||||||
Real estate assets, gross | 22,755 | $ 22,755 | 18,527 | |||||
Land improvements | Minimum | ||||||||
Real Estate Assets | ||||||||
Estimated Useful Lives | 10 years | |||||||
Land improvements | Maximum | ||||||||
Real Estate Assets | ||||||||
Estimated Useful Lives | 30 years | |||||||
Buildings and improvements | ||||||||
Real Estate Assets | ||||||||
Real estate assets, gross | 147,480 | $ 147,480 | 135,857 | |||||
Buildings and improvements | Minimum | ||||||||
Real Estate Assets | ||||||||
Estimated Useful Lives | 10 years | |||||||
Buildings and improvements | Maximum | ||||||||
Real Estate Assets | ||||||||
Estimated Useful Lives | 40 years | |||||||
Tenant improvements | ||||||||
Real Estate Assets | ||||||||
Real estate assets, gross | 19,570 | $ 19,570 | 14,820 | |||||
Machinery and equipment | ||||||||
Real Estate Assets | ||||||||
Real estate assets, gross | 11,810 | $ 11,810 | 11,810 | |||||
Machinery and equipment | Minimum | ||||||||
Real Estate Assets | ||||||||
Estimated Useful Lives | 3 years | |||||||
Machinery and equipment | Maximum | ||||||||
Real Estate Assets | ||||||||
Estimated Useful Lives | 20 years | |||||||
Construction in progress | ||||||||
Real Estate Assets | ||||||||
Real estate assets, gross | 9,104 | $ 9,104 | 3,927 | |||||
Development costs | ||||||||
Real Estate Assets | ||||||||
Real estate assets, gross | 7,306 | 7,306 | 6,388 | |||||
Development costs | Assets held for sale | ||||||||
Real Estate Assets | ||||||||
Real estate assets, gross | $ 9,677 | $ 9,677 | $ 9,657 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Thousands | Aug. 31, 2015 | Nov. 30, 2014 |
Financial assets and liabilities carried at fair value and measured at fair value on a recurring basis: | ||
Marketable equity securities | $ 2,562 | $ 1,924 |
Interest rate swap liabilities | 2,251 | 2,330 |
Recurring basis | Level 1 | ||
Financial assets and liabilities carried at fair value and measured at fair value on a recurring basis: | ||
Marketable equity securities | 2,562 | 1,924 |
Recurring basis | Level 2 | ||
Financial assets and liabilities carried at fair value and measured at fair value on a recurring basis: | ||
Interest rate swap asset | 8 | |
Interest rate swap liabilities | $ 2,251 | $ 2,330 |
Fair Value (Details 2)
Fair Value (Details 2) - USD ($) $ in Thousands | Aug. 31, 2015 | Nov. 30, 2014 |
Financial assets: | ||
Available-for-sale securities | $ 2,562 | $ 1,924 |
Financial liabilities: | ||
Interest rate swaps | 2,251 | 2,330 |
Carrying Value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 6,350 | 17,059 |
Available-for-sale securities | 2,562 | 1,924 |
Carrying Value | Level 2 | ||
Financial assets: | ||
Note receivable | 1,451 | |
Interest rate swap | 8 | |
Financial liabilities: | ||
Mortgage loans | 79,528 | 70,168 |
Interest rate swaps | 2,251 | 2,330 |
Estimated Fair Value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 6,350 | 17,059 |
Available-for-sale securities | 2,562 | 1,924 |
Estimated Fair Value | Level 2 | ||
Financial assets: | ||
Note receivable | 1,451 | |
Interest rate swap | 8 | |
Financial liabilities: | ||
Mortgage loans | 80,522 | 71,014 |
Interest rate swaps | $ 2,251 | $ 2,330 |
Investment (Details)
Investment (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Aug. 31, 2014 | Aug. 31, 2015 | Nov. 30, 2014 | |
Investment in Centaur Media plc | |||
Shares of common stock held in Centaur Media | 1,952,462 | ||
Pre-Tax Gain on sale of common stock in Centaur Media plc | $ 318 | ||
Shares of Centaur Media common stock sold | 500,000 | ||
Proceeds from sale of shares | $ 566 | ||
Investment in Centaur Media | |||
Fair value | $ 2,562 | $ 1,924 | |
Cost | 1,014 | 1,014 | |
Unrealized gain | $ 1,548 | $ 910 |
Mortgage Loan (Details )
Mortgage Loan (Details ) $ in Thousands | Sep. 01, 2015USD ($)ft² | Aug. 01, 2015USD ($)ft²building | Jul. 29, 2015USD ($)ft²building | Dec. 31, 2014USD ($)ft²subsidiary | Aug. 31, 2015USD ($)item | Aug. 31, 2014USD ($) | Aug. 31, 2015USD ($)item | Aug. 31, 2014USD ($) | Nov. 30, 2014USD ($) |
Long-Term Debt | |||||||||
Nonrecourse mortgages | $ 79,528 | $ 79,528 | $ 70,168 | ||||||
Debt disclosures | |||||||||
Ineffectiveness on cash flow hedges | 0 | ||||||||
Anticipated ineffectiveness on cash flow hedges | 0 | ||||||||
Net fair values of interest rate swap agreements included in other liabilities | $ 2,251 | $ 2,251 | 2,330 | ||||||
Loss on debt extinguishment | $ (51) | $ (51) | |||||||
Interest rate swap agreement | |||||||||
Debt disclosures | |||||||||
Number of agreements containing credit risk related contingent features | item | 0 | 0 | |||||||
Recognized net losses (included in other comprehensive loss), before taxes, on interest rate swap agreements | $ 812 | $ 619 | |||||||
Loss expected to be reclassified over next twelve months from accumulated other comprehensive loss to interest expense | $ 1,068 | 1,068 | |||||||
Nonrecourse mortgages | |||||||||
Long-Term Debt | |||||||||
Nonrecourse mortgages | $ 79,528 | $ 79,528 | 70,168 | ||||||
Nonrecourse mortgages | 5220 Jaindl Boulevard | |||||||||
Long-Term Debt | |||||||||
Nonrecourse mortgages | $ 14,100 | ||||||||
Debt disclosures | |||||||||
Area of properties (in square feet) | ft² | 280,000 | ||||||||
Proceeds from issuance of debt | $ 11,500 | ||||||||
Currently Leased space at the time of borrowing | ft² | 196,000 | ||||||||
Term of debt | 10 years | ||||||||
Amortization period of debt | 25 years | ||||||||
Variable interest rate base | one month LIBOR | ||||||||
Variable interest rate margin (as a percent) | 1.65% | ||||||||
Mortgage proceeds to be deposited into an escrow account | $ 2,600 | ||||||||
Nonrecourse mortgages | Interest rate swap agreement | 5220 Jaindl Boulevard | |||||||||
Debt disclosures | |||||||||
Fixed interest rate pursuant to interest rate swap agreement (as a percent) | 3.77% | ||||||||
Notional principal amount of interest rate swap agreement | $ 11,500 | ||||||||
Nonrecourse mortgages: 5.73%, due August 1, 2015 | |||||||||
Long-Term Debt | |||||||||
Interest rate (as a percent) | 5.73% | 5.73% | |||||||
Nonrecourse mortgages | $ 17,891 | 18,189 | |||||||
Debt disclosures | |||||||||
Area of collateralized properties (in square feet) | ft² | 392,000 | ||||||||
Number of collateralized industrial buildings | building | 3 | ||||||||
Nonrecourse variable rate loans, due October 2, 2017 | |||||||||
Long-Term Debt | |||||||||
Nonrecourse mortgages | $ 6,262 | $ 6,262 | 6,394 | ||||||
Nonrecourse variable rate loans, due February 1, 2019 | |||||||||
Long-Term Debt | |||||||||
Nonrecourse mortgages | 10,681 | 10,681 | 10,888 | ||||||
Nonrecourse variable rate loans, due August 1, 2019 | |||||||||
Long-Term Debt | |||||||||
Nonrecourse mortgages | 7,550 | 7,550 | 7,691 | ||||||
Nonrecourse Variable rate loans, due January 27, 2020 | |||||||||
Long-Term Debt | |||||||||
Nonrecourse mortgages | 3,759 | 3,759 | 3,848 | ||||||
Nonrecourse Variable rate loans, due September 1, 2023 | |||||||||
Long-Term Debt | |||||||||
Nonrecourse mortgages | 8,875 | ||||||||
Nonrecourse Variable rate loans, due January 2, 2025 | |||||||||
Long-Term Debt | |||||||||
Nonrecourse mortgages | $ 19,494 | $ 19,494 | |||||||
5.09%, due July 1, 2029 GCD Mortgage Loan member | |||||||||
Long-Term Debt | |||||||||
Interest rate (as a percent) | 5.09% | 5.09% | |||||||
Nonrecourse mortgages | $ 7,478 | $ 7,478 | 7,750 | ||||||
5.09%, due July 1, 2029 TD mortgage loan member | |||||||||
Long-Term Debt | |||||||||
Interest rate (as a percent) | 5.09% | 5.09% | |||||||
Nonrecourse mortgages | $ 6,304 | $ 6,304 | $ 6,533 | ||||||
4.33%, due August 1, 2030 mortgage loan member | |||||||||
Long-Term Debt | |||||||||
Interest rate (as a percent) | 4.33% | 4.33% | 4.33% | ||||||
Nonrecourse mortgages | $ 18,000 | $ 18,000 | $ 18,000 | ||||||
Debt disclosures | |||||||||
Proceeds from issuance of debt | $ 14,875 | ||||||||
Term of debt | 15 years | ||||||||
Amortization period of debt | 30 years | ||||||||
Number of collateralized industrial buildings | building | 3 | ||||||||
Mortgage proceeds deposited into an escrow account | $ 3,125 | ||||||||
4.33%, due August 1, 2030 mortgage loan member | New England Tradeport Industrial Park | |||||||||
Debt disclosures | |||||||||
Mortgage proceeds deposited into an escrow account | 25 | ||||||||
4.33%, due August 1, 2030 mortgage loan member | New England Tradeport Industrial Park | Location 1 | |||||||||
Debt disclosures | |||||||||
Mortgage proceeds deposited into an escrow account | $ 2,500 | ||||||||
Threshold of leased space to release escrow deposits (in square feet) | ft² | 88,000 | ||||||||
4.33%, due August 1, 2030 mortgage loan member | New England Tradeport Industrial Park | Location 2 | |||||||||
Debt disclosures | |||||||||
Mortgage proceeds deposited into an escrow account | $ 600 | ||||||||
2025 First Niagara Mortgage | |||||||||
Long-Term Debt | |||||||||
Nonrecourse mortgages | $ 21,600 | ||||||||
Debt disclosures | |||||||||
Number of subsidiaries which are refinancing nonrecourse mortgage loan | subsidiary | 2 | ||||||||
Proceeds from issuance of debt | $ 10,891 | ||||||||
Debt, Refinanced, Amount | 8,859 | ||||||||
Amount held back from net proceeds | $ 1,850 | ||||||||
Space to be leased to secure the additional borrowing (in square feet) | ft² | 101,000 | ||||||||
Term of debt | 10 years | ||||||||
Amortization period of debt | 25 years | ||||||||
Variable interest rate base | one month LIBOR | ||||||||
Variable interest rate margin (as a percent) | 1.95% | ||||||||
2025 First Niagara Mortgage | Lower Nazareth, Pennsylvania | Location 1 | |||||||||
Debt disclosures | |||||||||
Area of collateralized properties (in square feet) | ft² | 228,000 | ||||||||
2025 First Niagara Mortgage | Lower Nazareth, Pennsylvania | Location 2 | |||||||||
Debt disclosures | |||||||||
Area of collateralized properties (in square feet) | ft² | 303,000 | ||||||||
2025 First Niagara Mortgage | Interest rate swap agreement | |||||||||
Debt disclosures | |||||||||
Fixed interest rate pursuant to interest rate swap agreement (as a percent) | 4.43% |
Revolving Credit Agreement (Det
Revolving Credit Agreement (Details) - Webster Credit Line $ in Thousands | 9 Months Ended |
Aug. 31, 2015USD ($)ft² | |
Revolving credit agreement | |
Maximum borrowing capacity | $ | $ 12,500 |
Variable interest rate base | one month LIBOR |
Variable interest rate margin (as a percent) | 2.75% |
Borrowings under credit line | $ | $ 0 |
Option to extend credit line | 1 year |
Griffin Center South, Bloomfield, CT | |
Revolving credit agreement | |
Area of collateralized properties (in square feet) | 235,000 |
Single-story office building in Griffin Center | |
Revolving credit agreement | |
Area of collateralized properties (in square feet) | 48,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2015 | Aug. 31, 2014 | Aug. 31, 2015 | Aug. 31, 2014 | |
Per Share Results | ||||
Income (loss) from continuing operations for computation of basic and diluted per share results, net of tax | $ 1,203 | $ (198) | $ 261 | $ (1,521) |
Income from discontinued operations for computation of basic and diluted per share results, net of tax | 26 | 144 | ||
Net income (loss) | $ 1,203 | $ (172) | $ 261 | $ (1,377) |
Weighted average shares outstanding for computation of basic per share results | 5,153,000 | 5,150,000 | 5,151,000 | 5,148,000 |
Incremental shares from assumed exercise of Griffin stock options | 23,000 | 21,000 | ||
Adjusted weighted average shares for computation of diluted per share results | 5,176,000 | 5,150,000 | 5,172,000 | 5,148,000 |
Incremental shares from assumed exercise of stock options excluded due to anti-dilutive effect | 3,000 | 12,000 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - 2009 Stock Option Plan - $ / shares | 9 Months Ended | |
Aug. 31, 2015 | Aug. 31, 2014 | |
Activity under the Griffin Stock Option Plan | ||
Outstanding at beginning of period (in shares) | 222,001 | 239,677 |
Granted (in shares) | 8,282 | 8,532 |
Exercised (in shares) | (3,134) | (3,208) |
Forfeited (in shares) | (1,422) | (23,000) |
Outstanding at end of period (in shares) | 225,727 | 222,001 |
Weighted Avg. Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ 30.35 | $ 30.35 |
Granted (in dollars per share) | 31.38 | 28.12 |
Exercised (in dollars per share) | 25.53 | 24.94 |
Forfeited (in dollars per share) | 28.12 | 30.27 |
Outstanding at end of period (in dollars per share) | $ 30.47 | $ 30.35 |
Stockholders' Equity (Details 3
Stockholders' Equity (Details 3) - 2009 Stock Option Plan $ / shares in Units, $ in Thousands | 9 Months Ended |
Aug. 31, 2015USD ($)$ / sharesshares | |
Griffin Stock Option Plan | |
Outstanding at ending of the year (in shares) | shares | 225,727 |
Weighted Avg. Exercise Price (in dollars per share) | $ 30.47 |
Weighted Avg. Remaining Contractual Life | 4 years 9 months 18 days |
Total Intrinsic Value | $ | $ 401 |
$23.00-$28.00 | |
Griffin Stock Option Plan | |
Exercise prices, low end of range (in dollars per share) | $ 23 |
Exercise prices, high end of range (in dollars per share) | $ 28 |
Outstanding at ending of the year (in shares) | shares | 14,934 |
Weighted Avg. Exercise Price (in dollars per share) | $ 25.43 |
Weighted Avg. Remaining Contractual Life | 6 years 4 months 24 days |
Total Intrinsic Value | $ | $ 91 |
$28.00-$32.00 | |
Griffin Stock Option Plan | |
Exercise prices, low end of range (in dollars per share) | $ 28 |
Exercise prices, high end of range (in dollars per share) | $ 32 |
Outstanding at ending of the year (in shares) | shares | 127,718 |
Weighted Avg. Exercise Price (in dollars per share) | $ 29.07 |
Weighted Avg. Remaining Contractual Life | 5 years 7 months 6 days |
Total Intrinsic Value | $ | $ 310 |
$32.00-$39.00 | |
Griffin Stock Option Plan | |
Exercise prices, low end of range (in dollars per share) | $ 32 |
Exercise prices, high end of range (in dollars per share) | $ 39 |
Outstanding at ending of the year (in shares) | shares | 83,075 |
Weighted Avg. Exercise Price (in dollars per share) | $ 33.52 |
Weighted Avg. Remaining Contractual Life | 3 years 1 month 6 days |
Stockholders' Equity (Details 4
Stockholders' Equity (Details 4) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2015USD ($)individual | Aug. 31, 2014USD ($) | Aug. 31, 2015USD ($)individual$ / sharesshares | Aug. 31, 2014USD ($)$ / sharesshares | |
Employee and directors' stock options | ||||
Other Disclosures | ||||
Number of option holders | individual | 15 | 15 | ||
2009 Stock Option Plan | ||||
Griffin Stock Option Plan | ||||
Granted (in shares) | shares | 8,282 | 8,532 | ||
2009 Stock Option Plan | Employee and directors' stock options | ||||
Griffin Stock Option Plan | ||||
Expiration term | 10 years | |||
Assumptions used in determining the fair value of the stock options granted | ||||
Expected volatility (as a percent) | 40.80% | 38.90% | ||
Range of risk free interest rate (as a percent) | 2.00% | 2.20% | ||
Expected option term | 8 years 6 months | 8 years 6 months | ||
Annual dividend yield (as a percent) | 0.70% | 0.70% | ||
Compensation expense for stock options | ||||
Compensation expense (benefit) | $ 30 | $ 63 | $ 192 | $ 146 |
Related tax benefit (expense) | 8 | 19 | $ 49 | $ 44 |
2009 Stock Option Plan | Employee and directors' stock options | Non-employee directors | ||||
Griffin Stock Option Plan | ||||
Fair values of stock options granted (in dollars per share) | $ / shares | $ 14.39 | $ 12.42 | ||
Granted (in shares) | shares | 8,282 | 8,532 | ||
Continuing operations | 2009 Stock Option Plan | Employee and directors' stock options | ||||
Compensation expense for stock options | ||||
Compensation expense (benefit) | 30 | 63 | $ 192 | $ 276 |
Related tax benefit (expense) | $ 8 | $ 19 | $ 49 | 59 |
Discontinued operations. | 2009 Stock Option Plan | Employee and directors' stock options | ||||
Compensation expense for stock options | ||||
Compensation expense (benefit) | 130 | |||
Related tax benefit (expense) | $ 15 |
Stockholders' Equity (Details 5
Stockholders' Equity (Details 5) - Nonvested Options $ in Thousands | Aug. 31, 2015USD ($) |
Unrecognized compensation expense related to non-vested stock options that will be recognized during future periods | |
Fiscal 2,015 | $ 38 |
Fiscal 2,016 | 75 |
Fiscal 2,017 | $ 19 |
Stockholders' Equity (Details 6
Stockholders' Equity (Details 6) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Aug. 31, 2015 | Feb. 28, 2015 | Aug. 31, 2014 | Feb. 28, 2014 | Aug. 31, 2015 | Aug. 31, 2014 | |
Change in accumulated other comprehensive loss, net of tax | ||||||
Balance at the beginning of the period | $ (835) | $ (449) | $ (835) | $ (449) | ||
Other comprehensive (loss) income before reclassifications | $ 69 | $ (205) | (98) | (210) | ||
Reclassifications included in net income (loss) | 189 | 158 | 557 | (33) | ||
Total other comprehensive income, net of tax | 459 | (243) | ||||
Balance at the end of the period | (376) | (692) | (376) | (692) | ||
Reclassifications included in net loss: | ||||||
Termination of postretirement benefits program | (485) | |||||
Loss on cash flow hedges (interest expense) | 300 | 252 | 884 | 755 | ||
Realized gain on sale of Centaur Media (gain on sale) | (321) | |||||
Total reclassifications included in net income (loss) | 300 | 252 | 884 | (51) | ||
Mark to market adjustment on Centaur Media for a (decrease) increase in the foreign currency exchange rate | 10 | (17) | (39) | 45 | ||
Mark to market adjustment on Centaur Media for an increase (decrease) in fair value | 179 | (209) | 677 | 232 | ||
Decrease in fair value adjustments on Griffin's cash flow hedges | (85) | (93) | (812) | (619) | ||
Total other changes in other comprehensive (loss) income | 104 | (319) | (174) | (342) | ||
Total other comprehensive (loss) income | 404 | (67) | 710 | (393) | ||
Reclassifications included in net loss: | ||||||
Termination of postretirement benefits program tax | 181 | |||||
Loss on cash flow hedges (interest expense) | (111) | (94) | (327) | (280) | ||
Realized gain on sale of Centaur Media (gain on sale) | 117 | |||||
Total reclassifications included in net loss | (111) | (94) | (327) | 18 | ||
Mark to market adjustment on Centaur Media for a (decrease) increase in the foreign currency exchange rate | (4) | 6 | 13 | (16) | ||
Mark to market adjustment on Centaur Media for an increase in fair value | (62) | 73 | (237) | (81) | ||
Decrease in fair value adjustments on Griffin's cash flow hedges | 31 | 35 | 300 | 229 | ||
Total change in other comprehensive (loss) income | (35) | 114 | 76 | 132 | ||
Total other comprehensive (loss) income | (146) | 20 | (251) | 150 | ||
Reclassifications included in net loss: | ||||||
Termination of postretirement benefits program net of tax | (304) | |||||
Loss on cash flow hedges (interest expense) | 189 | 158 | 557 | 475 | ||
Realized gain on sale of Centaur Media (gain on sale) | (204) | |||||
Total reclassifications included in net loss | 189 | 158 | 557 | (33) | ||
Mark to market adjustment on Centaur Media for a (decrease) increase in the foreign currency exchange rate | 6 | (11) | (26) | 29 | ||
Mark to market adjustment on Centaur Media for an increase in fair value | 117 | (136) | 440 | 151 | ||
Decrease in fair value adjustments on Griffin's cash flow hedges | (54) | (58) | (512) | (390) | ||
Total change in other comprehensive (loss) income | 69 | (205) | (98) | (210) | ||
Total other comprehensive income (loss), net of tax | 258 | (47) | 459 | (243) | ||
Cash Dividend | ||||||
Cash dividend paid | 1,030 | 1,029 | 1,030 | 1,029 | ||
General and Administrative Expense | ||||||
Reclassifications included in net loss: | ||||||
Termination of postretirement benefits program, net of tax | 21 | 21 | ||||
Discontinued operations. | ||||||
Reclassifications included in net loss: | ||||||
Termination of postretirement benefits program, net of tax | (283) | (283) | ||||
Unrealized loss on cash flow hedges | ||||||
Change in accumulated other comprehensive loss, net of tax | ||||||
Balance at the beginning of the period | (1,464) | (1,401) | (1,464) | (1,401) | ||
Other comprehensive (loss) income before reclassifications | (512) | (390) | ||||
Reclassifications included in net income (loss) | 557 | 475 | ||||
Total other comprehensive income, net of tax | 45 | 85 | ||||
Balance at the end of the period | (1,419) | (1,316) | (1,419) | (1,316) | ||
Reclassifications included in net loss: | ||||||
Total reclassifications included in net loss | 557 | 475 | ||||
Total change in other comprehensive (loss) income | (512) | (390) | ||||
Unrealized gain on investment in Centaur Media | ||||||
Change in accumulated other comprehensive loss, net of tax | ||||||
Balance at the beginning of the period | $ 629 | 648 | 629 | 648 | ||
Other comprehensive (loss) income before reclassifications | 414 | 180 | ||||
Reclassifications included in net income (loss) | (204) | |||||
Total other comprehensive income, net of tax | 414 | (24) | ||||
Balance at the end of the period | $ 1,043 | $ 624 | 1,043 | 624 | ||
Reclassifications included in net loss: | ||||||
Total reclassifications included in net loss | (204) | |||||
Total change in other comprehensive (loss) income | $ 414 | 180 | ||||
Actuarial gain on postretirement benefit program | ||||||
Change in accumulated other comprehensive loss, net of tax | ||||||
Balance at the beginning of the period | $ 304 | 304 | ||||
Reclassifications included in net income (loss) | (304) | |||||
Total other comprehensive income, net of tax | (304) | |||||
Reclassifications included in net loss: | ||||||
Total reclassifications included in net loss | $ (304) |
Discontinued Operation (Details
Discontinued Operation (Details) $ in Thousands | Jan. 08, 2014USD ($)item | Aug. 31, 2014USD ($) | Aug. 31, 2015USD ($) | Aug. 31, 2014USD ($) |
Discontinued operation | ||||
Proceeds from Collection of Notes Receivable | $ 1,500 | $ 2,750 | ||
Pretax loss from the sale of assets | ||||
Proceeds from sale of real estate assets | 169 | |||
Discontinued operations | ||||
Discontinued operation | ||||
Net annual rent receivable for each of the first five years | $ 500 | |||
Income statement disclosure | ||||
Sales revenue | 159 | |||
Pre tax income (loss) | $ 306 | |||
Imperial's landscape nursery business | ||||
Discontinued operation | ||||
Present value | $ 4,036 | 4,036 | ||
Pretax loss from the sale of assets | ||||
Proceeds from sale of real estate assets | 732 | |||
Note receivable | 4,036 | 4,036 | ||
Imperial's landscape nursery business | Discontinued operations | ||||
Income statement disclosure | ||||
Sales revenue | 79 | |||
Pre tax income (loss) | $ 62 | |||
Pretax loss from the sale of assets | ||||
Consideration received | 4,768 | |||
Carrying value of assets sold, principally inventory | (4,561) | |||
Curtailment of employee benefit plan | 309 | |||
Severance and other expenses | (563) | |||
Pretax loss | $ (47) | |||
Imperial's landscape nursery business | Discontinued operations | Inventory and certain assets | ||||
Discontinued operation | ||||
Non-interest bearing note receivable | $ 4,250 | |||
Number of installments in which promissory note will become due | item | 2 | |||
Amount of promissory note receivable due on June 1, 2014 | $ 2,750 | |||
Amount of promissory note receivable due on June 1, 2015 | $ 1,500 | |||
Period of non-competition restrictions | 4 years | |||
Proceeds from sale of nursery inventory | $ 732 | |||
Discount rate (as a percent) | 7.00% | |||
Present value | $ 4,036 | |||
Pretax loss from the sale of assets | ||||
Note receivable | $ 4,036 | |||
Imperial's landscape nursery business | Discontinued operations | Connecticut production nursery | ||||
Discontinued operation | ||||
Lease period | 10 years | |||
Optional extension period of lease | 15 years | |||
Period during which purchase option is available | 13 years | |||
Price of land, land improvements and other operating assets under option to purchase | $ 10,500 | |||
Price of a portion of land under option to purchase | $ 7,000 |
Supplemental Financial Statem41
Supplemental Financial Statement Information (Detailss) - USD ($) $ in Thousands | Aug. 31, 2015 | Nov. 30, 2014 |
Other Assets | ||
Deferred leasing costs | $ 4,175 | $ 4,059 |
Deferred rent receivable | 4,027 | 3,454 |
Prepaid expenses | 3,075 | 2,133 |
Deferred financing costs | 1,064 | 727 |
Lease receivables | 959 | 1,343 |
Mortgage escrows | 539 | 1,073 |
Intangible assets | 335 | 506 |
Property and equipment, net | 176 | 230 |
Assets of discontinued operation | 36 | 36 |
Other | 1,030 | 921 |
Total | 15,416 | 14,482 |
Accounts Payable and Accrued Liabilities | ||
Accrued construction costs and retainage | 3,166 | 1,910 |
Trade payables | 638 | 670 |
Other accrued liabilities | 488 | 362 |
Accrued interest payable | 330 | 321 |
Accrued salaries, wages and other compensation | 581 | 242 |
Total | 5,203 | 3,505 |
Other Liabilities | ||
Deferred compensation plan | 3,786 | 3,784 |
Interest rate swap liabilities | 2,251 | 2,330 |
Prepaid rent from tenants | 1,156 | 690 |
Conditional asset retirement obligations | 288 | 288 |
Security deposits | 268 | 224 |
Other | 95 | 122 |
Other liabilities | $ 7,844 | $ 7,438 |
Supplemental Financial Statem42
Supplemental Financial Statement Information (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2015 | Aug. 31, 2014 | Aug. 31, 2015 | Aug. 31, 2014 | |
Supplemental Cash Flow Information | ||||
Increase in value of available-for-sale securities: Investment in Centaur Media Plc | $ 638 | $ 277 | ||
Shares of Centaur Media common stock sold | 500,000 | 500,000 | ||
Increase in accounts payable and accrued liabilities related to additions to real estate assets | 1,256 | $ 20 | ||
Interest paid | ||||
Interest payments, inclusive of capitalized interest | $ 1,070 | $ 963 | $ 3,119 | $ 2,893 |
Income Taxes | ||||
Effective income tax rate (as a percent) | 28.90% | 39.50% | ||
Net deferred tax asset | $ 5,640 | $ 5,640 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Aug. 31, 2015USD ($) | Jun. 27, 2014USD ($)ft² |
Undeveloped land | ||
Commitments and Contingencies | ||
Area of Land | 45 | |
Undeveloped land | Agreement to sell | ||
Commitments and Contingencies | ||
Number Of Acres To Be Sold | 29 | |
Undeveloped land | Agreement to sell | Minimum | ||
Commitments and Contingencies | ||
Sale Price of Land | $ | $ 3,250 | |
Property and inventory purchase commitments | ||
Commitments and Contingencies | ||
Purchase obligations | $ | $ 1,269 |