Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Feb. 28, 2017 | Mar. 31, 2017 | |
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 | Feb. 28, 2017 | |
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 | 5,000,535 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Feb. 28, 2017 | Nov. 30, 2016 |
ASSETS | ||
Real estate assets, net | $ 172,316 | $ 172,260 |
Real estate held for sale | 2,992 | 2,992 |
Cash and cash equivalents | 20,220 | 24,689 |
Deferred income taxes | 5,109 | 4,984 |
Proceeds held in escrow | 3,535 | 3,535 |
Other assets | 16,766 | 15,163 |
Total assets | 220,938 | 223,623 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Mortgage loans, net of debt issuance costs | 108,959 | 109,697 |
Deferred revenue | 10,180 | 9,526 |
Accounts payable and accrued liabilities | 4,760 | 4,140 |
Dividend payable | 1,514 | |
Other liabilities | 8,027 | 7,943 |
Total liabilities | 131,926 | 132,820 |
Commitments and Contingencies (Note 8) | ||
Stockholders' Equity | ||
Common stock, par value $0.01 per share, 10,000,000 shares authorized, 5,541,029 shares issued and 5,000,535 and 5,047,708 shares outstanding, respectively | 55 | 55 |
Additional paid-in capital | 108,520 | 108,438 |
(Deficit) retained earnings | (760) | 179 |
Accumulated other comprehensive loss, net of tax | (509) | (1,049) |
Treasury stock, at cost, 540,494 and 493,321 shares, respectively | (18,294) | (16,820) |
Total stockholders' equity | 89,012 | 90,803 |
Total liabilities and stockholders' equity | $ 220,938 | $ 223,623 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Feb. 28, 2017 | Nov. 30, 2016 |
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 | 5,541,029 |
Common stock, shares outstanding | 5,000,535 | 5,047,708 |
Treasury stock, shares | 540,494 | 493,321 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Consolidated Statements of Operations | ||
Rental revenue | $ 6,979 | $ 6,682 |
Total revenue | 6,979 | 6,682 |
Operating expenses of rental properties | 2,485 | 2,166 |
Depreciation and amortization expense | 2,350 | 2,145 |
General and administrative expenses | 2,230 | 1,567 |
Total expenses | 7,065 | 5,878 |
Operating (loss) income | (86) | 804 |
Interest expense | (1,313) | (1,091) |
Investment income | 9 | 7 |
Loss before income tax benefit (provision) | (1,390) | (280) |
Income tax benefit (provision) | 451 | (55) |
Net loss | $ (939) | $ (335) |
Basic net income (loss) per common share: | ||
Basic net loss per common share (in dollars per share) | $ (0.19) | $ (0.07) |
Diluted net income (loss) per common share: | ||
Diluted net loss per common share (in dollars per share) | $ (0.19) | $ (0.07) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Consolidated Statements of Comprehensive Income (Loss) | ||
Net loss | $ (939) | $ (335) |
Other comprehensive income (loss), net of tax: | ||
Reclassifications included in net loss | 209 | 213 |
Increase (decrease) in fair value of Centaur Media plc | 127 | (256) |
Unrealized gain (loss) on cash flow hedges | 204 | (1,141) |
Total other comprehensive income (loss), net of tax | 540 | (1,184) |
Total comprehensive loss | $ (399) | $ (1,519) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings (Deficit) | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total |
Balance at beginning of period at Nov. 30, 2015 | $ 55 | $ 108,188 | $ 1,117 | $ (1,085) | $ (13,466) | $ 94,809 |
Balance (in shares) at Nov. 30, 2015 | 5,541,029 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 71 | 71 | ||||
Net loss | (335) | (335) | ||||
Total other comprehensive income (loss), net of tax | (1,184) | (1,184) | ||||
Balance at end of period at Feb. 29, 2016 | $ 55 | 108,259 | 782 | (2,269) | (13,466) | 93,361 |
Balance (in shares) at Feb. 29, 2016 | 5,541,029 | |||||
Balance at beginning of period at Nov. 30, 2015 | $ 55 | 108,188 | 1,117 | (1,085) | (13,466) | 94,809 |
Balance (in shares) at Nov. 30, 2015 | 5,541,029 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Repurchase of common stock | $ (3,354) | |||||
Balance at end of period at Nov. 30, 2016 | $ 55 | 108,438 | 179 | (1,049) | (16,820) | 90,803 |
Balance (in shares) at Nov. 30, 2016 | 5,541,029 | |||||
Balance at beginning of period at Nov. 30, 2015 | $ 55 | 108,188 | 1,117 | (1,085) | (13,466) | 94,809 |
Balance (in shares) at Nov. 30, 2015 | 5,541,029 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Repurchase of common stock | $ (4,828) | |||||
Balance at end of period at Feb. 28, 2017 | $ 55 | 108,520 | (760) | (509) | (18,294) | 89,012 |
Balance (in shares) at Feb. 28, 2017 | 5,541,029 | |||||
Balance at beginning of period at Nov. 30, 2016 | $ 55 | 108,438 | 179 | (1,049) | (16,820) | 90,803 |
Balance (in shares) at Nov. 30, 2016 | 5,541,029 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 82 | 82 | ||||
Repurchase of common stock | $ (1,474) | (1,474) | (1,474) | |||
Net loss | (939) | (939) | ||||
Total other comprehensive income (loss), net of tax | 540 | 540 | ||||
Balance at end of period at Feb. 28, 2017 | $ 55 | $ 108,520 | $ (760) | $ (509) | $ (18,294) | $ 89,012 |
Balance (in shares) at Feb. 28, 2017 | 5,541,029 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Operating activities: | ||
Net loss | $ (939) | $ (335) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 2,350 | 2,145 |
Deferred income taxes | (451) | 55 |
Stock-based compensation expense | 82 | 71 |
Amortization of debt issuance costs | 64 | 53 |
Changes in assets and liabilities: | ||
Other assets | (1,043) | 314 |
Accounts payable and accrued liabilities | (295) | 86 |
Deferred revenue | 654 | (489) |
Other liabilities | 571 | (221) |
Net cash provided by operating activities of continuing operations | 993 | 1,679 |
Investing activities: | ||
Additions to real estate assets | (2,233) | (1,933) |
Deferred leasing costs and other | (336) | (434) |
Net cash used in investing activities | (2,569) | (2,367) |
Financing activities: | ||
Dividends paid to stockholders | (1,514) | (1,546) |
Payments on mortgage loans | (771) | (638) |
Repurchase of common stock | (594) | |
Payment of debt issuance costs | (14) | (97) |
Proceeds from mortgage loans | 4,450 | |
Net cash (used in) provided by financing activities | (2,893) | 2,169 |
Net (decrease) increase in cash and cash equivalents | (4,469) | 1,481 |
Cash and cash equivalents at beginning of period | 24,689 | 18,271 |
Cash and cash equivalents at end of period | $ 20,220 | $ 19,752 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Feb. 28, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Basis of Presentation Griffin Industrial Realty, Inc. ("Griffin") is a real estate business principally engaged in developing, managing and leasing industrial properties and, to a lesser extent, commercial properties. Griffin also seeks to add to its property portfolio through the acquisition and development of land or purchase of buildings. 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. These financial statements have been prepared in conformity with the standards of accounting measurement set forth by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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, 2016 (“fiscal 2016”) included in Griffin’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on February 10, 2017. 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, 2016 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 related 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 February 28, 2017, 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 results of operations for the three months ended February 28, 2017 (the “2017 first quarter”) are not necessarily indicative of the results to be expected for the full year. The three months ended February 29, 2016 are referred to herein as the “2016 first quarter.” Certain amounts from the 2016 first quarter have been reclassified to conform to the current presentation. Recent Accounting Pronouncements In March 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-09, “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting,” which relates to the accounting for employee share-based payments. This Update addresses several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. This Update will become effective for Griffin in fiscal 2018. Early adoption is allowed, but all of the guidance must be adopted in the same period. Griffin is evaluating the impact that the application of this Update will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases,” which establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. The accounting applied by lessors under this Update is largely unchanged from that applied under current U.S. GAAP. Leases will be either classified as finance or operating, with classification affecting the pattern of expense recognition in the income statement. This Update also requires significant additional disclosures about the amount, timing and uncertainty of cash flows from leases. This Update will become effective for Griffin in fiscal 2020 using a modified restatement approach for leases in effect as of and after the date of adoption. Early adoption and practical expedients to measure the effect of adoption will also be allowed. Griffin is evaluating the impact that the application of this Update will have on its consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall,” which requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee). This Update also requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. This Update eliminates the requirement for an entity to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. In addition, entities must assess the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets. This Update will be effective for Griffin in fiscal 2019. Early adoption is permitted for certain provisions. Upon adoption, changes in the fair value of Griffin's available-for-sale securities will be recognized through net income. In April 2015, the FASB issued Accounting Standards Update No. 2015-03, “Interest-Imputation of Interest,” (“ASU 2015-03”) which requires that debt issuance costs related to a recognized liability be presented on 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 was adopted by Griffin in the fiscal 2016 fourth quarter. The adoption of this guidance required Griffin to reclassify its debt issuance costs on nonrecourse mortgage loans from other assets to mortgage debt on its statement of financial position but did not have an impact on Griffin’s results of operations. The effect of the reclassification on Griffin’s statement of financial position is quantified in Note 4. In May 2014, the FASB issued ASU 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. |
Fair Value
Fair Value | 3 Months Ended |
Feb. 28, 2017 | |
Fair Value | |
Fair Value | 2. 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. Categorization of an asset or a liability 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 and liabilities include Griffin’s interest rate swap agreements (see Note 4). 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 2017 first quarter, Griffin did not transfer any assets or liabilities into 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: February 28, 2017 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 assets $ — $ $ — Interest rate swap liabilities $ — $ $ — November 30, 2016 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 February 28, 2017 November 30, 2016 Hierarchy Carrying Estimated Carrying Estimated Level Value Fair Value Value Fair Value Financial assets: Cash and cash equivalents 1 $ $ $ $ Marketable equity securities 1 Interest rate swaps 2 Financial liabilities: Mortgage loans 2 $ $ $ $ Interest rate swaps 2 The amounts included in the consolidated financial statements for cash and cash equivalents, leasing receivables from tenants 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 Overnight Index Swap 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. |
Real Estate Assets
Real Estate Assets | 3 Months Ended |
Feb. 28, 2017 | |
Real Estate Assets | |
Real Estate Assets | 3. Real Estate Assets Real estate assets consist of: Estimated Useful Lives Feb. 28, 2017 Nov. 30, 2016 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 were as follows: For the Three Months Ended Feb. 28, 2017 Feb. 29, 2016 Depreciation expense $ $ Capitalized interest $ — $ In fiscal 2013, Griffin completed the sale of approximately 90 acres of undeveloped land for $8,968 in cash, before transaction costs (the “Windsor Land Sale”). The land sold is located in Windsor, Connecticut and is part of an approximately 268 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 were each required to construct roadways connecting the land parcel sold with existing town roads. Once completed, the roads constructed by the buyer and the road being constructed by Griffin will become new town roads, thereby 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. During the 2017 first quarter and the 2016 first quarter, there were no costs incurred related to the Windsor Land Sale, therefore, there is no related revenue or pretax gain recognized in Griffin’s consolidated statements of operations for either the 2017 first quarter or the 2016 first quarter. As of February 28, 2017, approximately 99% of the total costs related to the Windsor Land Sale have been incurred; therefore, from the date of the Windsor Land Sale through February 28, 2017, approximately 99% of the total revenue and pretax gain on the sale have been recognized in Griffin’s consolidated statements of operations. The total pretax gain on the Windsor Land Sale is expected to be approximately $6,686 after all revenue is recognized and all costs are incurred. From the time the Windsor Land Sale closed in fiscal 2013 through February 28, 2017, Griffin’s consolidated statements of operations reflected total revenue of $8,864 and a total pretax gain of $6,608 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 be in the second quarter of fiscal 2017. Deferred revenue on Griffin's consolidated balance sheet as of February 28, 2017 includes $104 related to the Windsor Land Sale that will be recognized as the remaining 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. Real estate assets held for sale consist of: Feb. 28, 2017 Nov. 30, 2016 Land $ $ Development costs $ $ |
Mortgage Loans
Mortgage Loans | 3 Months Ended |
Feb. 28, 2017 | |
Mortgage Loans | |
Mortgage Loans | 4. Mortgage Loans Griffin’s mortgage loans, which are nonrecourse, consist of: Feb. 28, 2017 Nov. 30, 2016 Variable rate, due October 2, 2017 * $ $ Variable rate, due February 1, 2019 * Variable rate, due January 27, 2020 * Variable rate, due January 2, 2025 * Variable rate, due May 1, 2026 * Variable rate, due November 17, 2026 * 5.09%, due July 1, 2029 5.09%, due July 1, 2029 4.33%, due August 1, 2030 Nonrecourse mortgage loans prior to debt issuance costs Debt issuance costs, net Nonrecourse mortgage loans, net $ $ *Griffin entered into interest rate swap agreements to effectively fix the interest rates on these loans (see below). As of November 30, 2016, Griffin retrospectively applied the provisions of ASU 2015-03, regarding the reclassification of debt issuance costs (see Note 1). As a result of the adoption of ASU 2015-03, Griffin reclassified $1,442 as of November 30, 2016 from other assets to mortgage loans, as reflected in the table above. On December 10, 2015, Griffin received additional mortgage proceeds of $2,600 (the “Webster Earn-Out”) on the mortgage (the “2015 Webster Mortgage”) obtained by one of its subsidiaries with Webster Bank, N.A. (“Webster”) on an approximately 280,000 square foot industrial building (“5220 Jaindl”) in the Lehigh Valley of Pennsylvania. The 2015 Webster Mortgage closed on September 1, 2015, at which time initial proceeds of $11,500 (before transaction costs) were received. At the time the 2015 Webster Mortgage closed, Griffin had leased approximately 196,000 square feet of 5220 Jaindl. Griffin received the Webster Earn-Out when the tenant that leased that space exercised its option to lease the balance of the building. Subsequently, on November 17, 2016, Griffin closed on a new nonrecourse mortgage (the “2016 Webster Mortgage”) for $26,725. The 2016 Webster Mortgage refinanced the amount then outstanding under the 2015 Webster Mortgage and is now collateralized by 5220 Jaindl along with an adjacent approximately 252,000 square foot industrial building (“5210 Jaindl”). Griffin received mortgage proceeds of $13,000 (before transaction costs), net of $13,725 used to refinance the 2015 Webster Mortgage. The 2016 Webster Mortgage has a variable interest rate of the one month LIBOR rate plus 1.70% and is due on November 17, 2026. At the time the 2016 Webster Mortgage closed, Griffin entered into an interest rate swap agreement with Webster that, combined with two existing swap agreements with Webster, effectively fixes the interest rate of the 2016 Webster Mortgage at 3.79% over the mortgage loan’s ten year term. On December 11, 2015, Griffin received additional mortgage proceeds of $1,850 (the “KeyBank Earn-Out”) on the mortgage (the “2025 KeyBank Mortgage”) obtained by two of its subsidiaries with KeyBank, N.A. (“KeyBank”), formerly First Niagara Bank, on its properties at 4270 Fritch Drive (“4270 Fritch”) and 4275 Fritch Drive (“4275 Fritch”) in the Lehigh Valley of Pennsylvania. The 2025 KeyBank Mortgage closed on December 31, 2014, at which time initial proceeds of $10,891 (before transaction costs) were received, in addition to $8,859 used to refinance the existing mortgage on 4275 Fritch with KeyBank. The 2025 KeyBank Mortgage is collateralized by 4270 Fritch, an approximately 303,000 square foot industrial/warehouse building, and 4275 Fritch, an adjacent approximately 228,000 square foot industrial/warehouse building. When the 2025 KeyBank Mortgage closed, approximately 201,000 square feet of 4270 Fritch was leased. The KeyBank Earn-Out was subsequently received by Griffin when the remaining vacant space of approximately 102,000 square feet was leased. The 2025 KeyBank Mortgage has a variable interest rate of the one month LIBOR rate plus 1.95% and is due on January 2, 2025. At the time the KeyBank Earn-Out was received, Griffin entered into an interest rate swap agreement with KeyBank that, when combined with two existing swap agreements with KeyBank, effectively fixes the interest rate on the 2025 KeyBank Mortgage at 4.39% over the remainder of the mortgage loan’s ten year term. As of February 28, 2017, Griffin was a party to several interest rate swap agreements related to its variable rate nonrecourse mortgage loans on certain of its real estate assets. Griffin accounts for its interest rate swap agreements as effective cash flow hedges (see Note 2). No ineffectiveness on the cash flow hedges was recognized as of February 28, 2017 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 2017 first quarter, Griffin recognized a net gain, included in other comprehensive income, before taxes of $671 on its interest rate swap agreements. In the 2016 first quarter, Griffin recognized a net loss, included in other comprehensive loss, before taxes of $1,474 on its interest rate swap agreements. As of February 28, 2017, $1,030 was expected to be reclassified over the next twelve months from accumulated other comprehensive loss to interest expense. As of February 28, 2017, the net fair value of Griffin’s interest rate swap agreements was $1,014, with $391 included in other assets and $1,405 included in other liabilities on Griffin’s consolidated balance sheet. On March 15, 2017, a subsidiary of Griffin closed on a new $12,000 nonrecourse mortgage with People’s United Bank, N.A. (“PUB”) (the “2017 PUB Mortgage”). The 2017 PUB Mortgage is collateralized by two industrial/warehouse buildings in New England Tradeport, Griffin’s industrial park located in Windsor and East Granby, Connecticut. The 2017 PUB Mortgage has a ten year term with monthly principal payments based on a twenty-five year amortization schedule. The interest rate for the 2017 PUB Mortgage is a floating rate of the one month LIBOR rate plus 1.95%. At the time the 2017 PUB Mortgage closed, Griffin also entered into an interest rate swap agreement with PUB for a notional principal amount of $12,000 at inception to effectively fix the interest rate at 4.45% for its full term. Griffin entered into a master lease for 759 Rainbow Road (“759 Rainbow”), one of two buildings that collateralizes the 2017 PUB Mortgage. The master lease would only become effective if the full building tenant in 759 Rainbow does not renew its lease when it is scheduled to expire in fiscal 2019. |
Revolving Credit Agreement
Revolving Credit Agreement | 3 Months Ended |
Feb. 28, 2017 | |
Revolving Credit Agreement | |
Revolving Credit Agreement | 5. Revolving Credit Agreement Griffin has a $15,000 revolving credit line with Webster (the “Webster Credit Line”) that expires July 31, 2018. Griffin has the option to further extend the term of the Webster Credit Line for an additional year, provided there is no default at the time such extension is requested. 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 in fiscal 2013. The Webster Credit Line secures certain unused standby letters of credit aggregating $1,827 that are related to Griffin's development activities. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Feb. 28, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | 6. Stockholders’ Equity Per Share Results Basic and diluted per share results were based on the following: For the Three Months Ended Feb. 28, 2017 Feb. 29, 2016 Net 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. The incremental shares from the assumed exercise of stock options for the 2017 first quarter and the 2016 first quarter would have been 23,000 and 1,000, 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 an exercise price not less than fair market value on the date approved by Griffin’s Compensation Committee. Vesting of all of Griffin's 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 February 28, 2017 may be exercised as stock appreciation rights. The following options were granted by Griffin under the 2009 Stock Option Plan to Griffin employees: For the Three Months Ended Feb. 28, 2017 Feb. 29, 2016 Fair Value per Fair Value per Number of Option at Number of Option at Shares Grant Date Shares Grant Date Employees $ - $ - 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 2017 first quarter were as follows: For the Three Months Ended Feb. 28, 2017 Feb. 29, 2016 Expected volatility % — Risk free interest rates % — Expected option term (in years) — Annual dividend yield % — Number of option holders at February 28, 2017 Compensation expense and related tax benefits for stock options were as follows: For the Three Months Ended Feb. 28, 2017 Feb. 29, 2016 Net compensation expense $ $ Net related tax benefit $ $ For all periods presented, the forfeiture rate for directors was 0%, forfeiture rates for executives ranged from 17.9% to 22.6% and forfeiture rates for employees ranged from 38.3% to 41.1%. These rates were utilized based on the historical activity of the grantees. As of February 28, 2017, the unrecognized compensation expense related to nonvested stock options that will be recognized during future periods is as follows: Balance of Fiscal 2017 $ Fiscal 2018 $ Fiscal 2019 $ Fiscal 2020 $ Fiscal 2021 $ Fiscal 2022 $ A summary of the activity under the 2009 Griffin Stock Option Plan is as follows: For the Three Months Ended February 28, 2017 February 29, 2016 Weighted Weighted Avg. Avg. Number of Exercise Number of Exercise Shares Price Shares Price Outstanding at beginning of period $ $ Granted $ — $ — Outstanding at end of period $ $ Weighted Avg. Remaining Range of Exercise Prices for Outstanding at Weighted Avg. Contractual Life Total Intrinsic Vested and Nonvested Options February 28, 2017 Exercise Price (in years) Value $23.00 - $28.00 $ 8.7 $ $28.00 - $32.00 $ 4.5 $32.00 - $39.00 $ 1.6 — $ 5.4 $ Accumulated Other Comprehensive Loss Accumulated other comprehensive loss, net of tax, is comprised of the following: For the Three Months Ended Feb. 28, 2017 Unrealized gain Unrealized loss on on investment in cash flow hedges Centaur Media Total Balance November 30, 2016 $ $ $ Other comprehensive income before reclassifications Amounts reclassified — Net activity for other comprehensive loss Balance February 28, 2017 $ $ $ For the Three Months Ended Feb. 29, 2016 Unrealized gain Unrealized loss on on investment in cash flow hedges Centaur Media Total Balance November 30, 2015 $ $ $ Other comprehensive loss before reclassifications Amounts reclassified — Net activity for other comprehensive loss Balance February 29, 2016 $ $ $ The components of other comprehensive loss are as follows: For the Three Months Ended February 28, 2017 February 29, 2016 Tax Tax (Expense) Net-of (Expense) Net-of Pre-Tax Benefit Tax Pre-Tax Benefit Tax Reclassifications included in net loss: Loss on cash flow hedges (interest expense) $ $ $ $ $ $ Total reclassifications included in net loss Mark to market adjustment on Centaur Media for a decrease in the foreign currency exchange rate Mark to market adjustment on Centaur Media for an increase (decrease) in fair value Increase (decrease) in fair value adjustments on Griffin’s cash flow hedges Total change in other comprehensive income (loss) Other comprehensive income (loss) $ $ $ $ $ $ Stock Repurchases In fiscal 2016, Griffin’s Board of Directors authorized a stock repurchase program whereby, starting on May 11, 2016, Griffin could repurchase up to $5,000 of its outstanding common stock over a twelve month period in privately negotiated transactions. The repurchase program expires on May 10, 2017. The stock repurchase program does not obligate Griffin to repurchase any specific amount of common stock and may be suspended at any time at management’s discretion. In the 2017 first quarter, Griffin repurchased 47,173 shares of its outstanding common stock for approximately $1,474, including 28,000 shares for $880 on February 27, 2017 that was paid for subsequent to February 28, 2017. In fiscal 2016, Griffin repurchased a total of 105,000 shares of its outstanding common stock under this program for $3,354. As of February 28, 2017, under the stock repurchase program in place, Griffin was authorized to purchase an additional $172 of its outstanding common stock. Cash Dividend Griffin did not declare a cash dividend in the 2017 or 2016 first quarters. During the 2017 first quarter, Griffin paid $1,514 for the cash dividend declared in the 2016 fourth quarter. During the 2016 first quarter, Griffin paid $1,546 for the cash dividend declared in the 2015 fourth quarter. |
Supplemental Financial Statemen
Supplemental Financial Statement Information | 3 Months Ended |
Feb. 28, 2017 | |
Supplemental Financial Statement Information | |
Supplemental Financial Statement Information | 7. Supplemental Financial Statement Information Available-for-Sale Securities As of February 28, 2017, 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, “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 loss (see Note 6). Griffin did not sell any of its Centaur Media common stock in the 2017 or 2016 first quarters. Griffin’s investment in Centaur Media is included in other assets on Griffin’s consolidated balance sheet as detailed below. The fair value, cost and unrealized gain of Griffin’s investment in Centaur Media are as follows: Feb. 28, 2017 Nov. 30, 2016 Fair value $ $ Cost Unrealized gain (loss) $ $ Other Assets Griffin's other assets are comprised of the following: Feb. 28, 2017 Nov. 30, 2016 Deferred leasing costs $ $ Deferred rent receivable Prepaid expenses Lease receivables from tenants Available-for-sale securities Mortgage escrows Deposits and other expenditures related to potential real estate acquisitions Interest rate swap assets Property and equipment, net Intangible assets, net Deferred financing costs related to Webster Credit Line Other Total other assets $ $ Accounts Payable and Accrued Liabilities Griffin's accounts payable and accrued liabilities are comprised of the following: Feb. 28, 2017 Nov. 30, 2016 Accrued construction costs and retainage $ $ Trade payables Accrued liability for common stock repurchased — Accrued lease commissions Accrued interest payable Accrued salaries, wages and other compensation Other Total accounts payable and accrued liabilities $ $ Other Liabilities Griffin's other liabilities are comprised of the following: Feb. 28, 2017 Nov. 30, 2016 Deferred compensation plan $ $ Interest rate swap liabilities Prepaid rent from tenants Security deposits of tenants Conditional asset retirement obligations Other Total other liabilities $ $ Supplemental Cash Flow Information An increase of $195 in the 2017 first quarter and a decrease of $393 in the 2016 first quarter in Griffin’s investment in Centaur Media reflect the mark to market adjustments of this investment and did not affect Griffin’s cash. Accounts payable and accrued liabilities related to additions to real estate assets decreased by $82 in the 2017 first quarter and increased by $588 in the 2016 first quarter. Interest payments were as follows: For the Three Months Ended Feb. 28, 2017 Feb. 29, 2016 $ $ Income Taxes Griffin’s effective income tax benefit rate was 32.4% for the 2017 first quarter as compared to an income tax provision rate of 19.6% for the 2016 first quarter. The effective tax benefit rate for the 2017 first quarter reflected the federal statutory income tax rate adjusted for the effects of permanent differences and state income taxes. The effective tax rate in the 2017 first quarter is based on management’s projections of pretax results for the balance of the year. To the extent that actual results differ from current projections, the effective income tax rate may change. The income tax provision for the 2016 first quarter included a charge of approximately $157 for the effect of a change in Connecticut tax law, effective for Griffin in fiscal 2016, whereby the future usage of state net operating loss carryforwards is limited to 50% of taxable income. Therefore, in the 2016 first quarter, Griffin decreased its expected realization of the tax benefit related to its Connecticut state net operating loss carryforwards. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Feb. 28, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 8. Commitments and Contingencies As of February 28, 2017, Griffin had committed purchase obligations of approximately $2,516, principally related to the development of Griffin’s real estate assets. On January 25, 2016, Griffin entered into an Option Purchase Agreement (the “Option Agreement”) whereby Griffin granted the buyer an exclusive three month option, in exchange for a nominal fee, to purchase approximately 280 acres of land for approximately $7,700. The buyer may extend the option period for up to three years upon payment of additional option fees. In the 2017 first quarter, the buyer paid $80 of additional option fees to extend their option period through January 2018. The land subject to the Option Agreement is undeveloped and does not have any of the approvals that would be required for the buyer’s planned use of the land. A closing on the land sale contemplated by the Option Agreement is subject to several significant contingencies, including the buyer securing contracts under a competitive bidding process that would require changes in the use of the land and obtaining local and state approvals for that planned use. There is no guarantee that the sale of land as contemplated under the Option Agreement will be completed under its current terms, or at all. On March 23, 2016, Griffin entered into an Agreement of Sale and Purchase (the “East Allen Purchase Agreement”) to acquire, for a purchase price of $6,200, an approximately 31 acre site in East Allen Township, Northampton County, Pennsylvania for development of an industrial/warehouse building. Subsequently, Griffin exercised its right to terminate the East Allen Purchase Agreement based on its due diligence findings. After the East Allen Purchase Agreement was terminated, Griffin continued negotiations with the seller to reach a new agreement. Subsequent to the end of the 2017 first quarter, Griffin agreed to terms to acquire this site for a purchase price of $5,600. Closing of this land acquisition is subject to completion of a definitive purchase agreement. There is no guarantee that this acquisition will be completed under the current terms, or at all. On May 4, 2016, Griffin entered into an Agreement of Sale and Purchase, as amended (the “Macungie Purchase Agreement”), to acquire, for a purchase price of $1,800, an approximately 14 acre site in Upper Macungie Township, Lehigh County, Pennsylvania for development of an approximately 134,000 square foot industrial/warehouse building. A closing on the land acquisition contemplated by the Macungie Purchase Agreement is subject to significant contingencies, including Griffin obtaining all governmental approvals for its planned development of the land that would be acquired. There is no guarantee that the land acquisition as contemplated under the Macungie Purchase Agreement will be completed under its current terms, or at all. On December 23, 2016, Griffin entered into an agreement to sell approximately 67 acres of an approximately 268 acre business park master planned by Griffin that straddles the town line between Windsor and Bloomfield, Connecticut. The purchase price is approximately $10,250 before transaction costs. Completion of this transaction is contingent on a number of factors, including the buyer obtaining all necessary final permits from governmental authorities for its development plans for the site it would acquire and the buyer receiving municipal and state economic development incentives it deems adequate. Under the current terms, Griffin expects to record a material pretax gain on this transaction. There is no guarantee that this transaction will be completed under the current terms, or at all. Under its $5,000 stock repurchase program, as of February 28, 2017, Griffin has repurchased 152,173 shares of its outstanding common stock for approximately $4,828, resulting in approximately $172 remaining for additional stock repurchases under the current repurchase program. The program to repurchase common stock expires on May 10, 2017, does not obligate Griffin to repurchase any specific number of shares, and may be suspended at any time at management’s discretion (see Note 6). 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 | 3 Months Ended |
Feb. 28, 2017 | |
Subsequent Events. | |
Subsequent Events | 9. Subsequent Events In accordance with FASB ASC 855, “Subsequent Events,” Griffin has evaluated all events or transactions occurring after February 28, 2017, the balance sheet date, and noted that there have been no such events or transactions which would require recognition or disclosure in the consolidated financial statements as of and for the quarter ended February 28, 2017, other than the disclosures herein. See Note 4 for disclosure of the subsequent event related to the closing on a nonrecourse mortgage loan on March 15, 2017. On March 23, 2017, Griffin received approximately $3,500 of cash, after transaction costs, from the fiscal 2016 sale of approximately 29 acres of undeveloped land in Griffin Center (the “Griffin Center Land Sale”). The proceeds from the Griffin Center Land Sale were deposited into escrow at the time the sale closed 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. As a replacement property was not acquired in the time period required under applicable tax code, the sale proceeds were released from escrow and returned to Griffin. Subsequent to February 28, 2017, the full building tenant in an approximately 100,000 square foot industrial/warehouse building in NE Tradeport filed for protection under Chapter 11 of the U.S. Bankruptcy Code. The effect of the tenant’s filing under Chapter 11 of the U.S. Bankruptcy Code on the lease of Griffin’s industrial/warehouse building, which expires in fiscal 2024, is unclear at this time. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Feb. 28, 2017 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation Griffin Industrial Realty, Inc. ("Griffin") is a real estate business principally engaged in developing, managing and leasing industrial properties and, to a lesser extent, commercial properties. Griffin also seeks to add to its property portfolio through the acquisition and development of land or purchase of buildings. 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. These financial statements have been prepared in conformity with the standards of accounting measurement set forth by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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, 2016 (“fiscal 2016”) included in Griffin’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on February 10, 2017. 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, 2016 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 related 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. |
Interest Rate Swap Agreements | As of February 28, 2017, 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. |
Fiscal Year | The results of operations for the three months ended February 28, 2017 (the “2017 first quarter”) are not necessarily indicative of the results to be expected for the full year. The three months ended February 29, 2016 are referred to herein as the “2016 first quarter.” |
Reclassifications | Certain amounts from the 2016 first quarter have been reclassified to conform to the current presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-09, “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting,” which relates to the accounting for employee share-based payments. This Update addresses several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. This Update will become effective for Griffin in fiscal 2018. Early adoption is allowed, but all of the guidance must be adopted in the same period. Griffin is evaluating the impact that the application of this Update will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases,” which establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. The accounting applied by lessors under this Update is largely unchanged from that applied under current U.S. GAAP. Leases will be either classified as finance or operating, with classification affecting the pattern of expense recognition in the income statement. This Update also requires significant additional disclosures about the amount, timing and uncertainty of cash flows from leases. This Update will become effective for Griffin in fiscal 2020 using a modified restatement approach for leases in effect as of and after the date of adoption. Early adoption and practical expedients to measure the effect of adoption will also be allowed. Griffin is evaluating the impact that the application of this Update will have on its consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall,” which requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee). This Update also requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. This Update eliminates the requirement for an entity to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. In addition, entities must assess the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets. This Update will be effective for Griffin in fiscal 2019. Early adoption is permitted for certain provisions. Upon adoption, changes in the fair value of Griffin's available-for-sale securities will be recognized through net income. In April 2015, the FASB issued Accounting Standards Update No. 2015-03, “Interest-Imputation of Interest,” (“ASU 2015-03”) which requires that debt issuance costs related to a recognized liability be presented on 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 was adopted by Griffin in the fiscal 2016 fourth quarter. The adoption of this guidance required Griffin to reclassify its debt issuance costs on nonrecourse mortgage loans from other assets to mortgage debt on its statement of financial position but did not have an impact on Griffin’s results of operations. The effect of the reclassification on Griffin’s statement of financial position is quantified in Note 4. In May 2014, the FASB issued ASU 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. |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Feb. 28, 2017 | |
Fair Value | |
Schedule of financial assets and liabilities carried at fair value and measured at fair value on a recurring basis: | February 28, 2017 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 assets $ — $ $ — Interest rate swap liabilities $ — $ $ — November 30, 2016 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 February 28, 2017 November 30, 2016 Hierarchy Carrying Estimated Carrying Estimated Level Value Fair Value Value Fair Value Financial assets: Cash and cash equivalents 1 $ $ $ $ Marketable equity securities 1 Interest rate swaps 2 Financial liabilities: Mortgage loans 2 $ $ $ $ Interest rate swaps 2 |
Real Estate Assets (Tables)
Real Estate Assets (Tables) | 3 Months Ended |
Feb. 28, 2017 | |
Real Estate Assets | |
Schedule of real estate assets, excluding those held for sale | Estimated Useful Lives Feb. 28, 2017 Nov. 30, 2016 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 | For the Three Months Ended Feb. 28, 2017 Feb. 29, 2016 Depreciation expense $ $ Capitalized interest $ — $ |
Schedule of real estate held for sale | Feb. 28, 2017 Nov. 30, 2016 Land $ $ Development costs $ $ |
Mortgage Loans (Tables)
Mortgage Loans (Tables) | 3 Months Ended |
Feb. 28, 2017 | |
Mortgage Loans | |
Schedule of mortgage loans | Feb. 28, 2017 Nov. 30, 2016 Variable rate, due October 2, 2017 * $ $ Variable rate, due February 1, 2019 * Variable rate, due January 27, 2020 * Variable rate, due January 2, 2025 * Variable rate, due May 1, 2026 * Variable rate, due November 17, 2026 * 5.09%, due July 1, 2029 5.09%, due July 1, 2029 4.33%, due August 1, 2030 Nonrecourse mortgage loans prior to debt issuance costs Debt issuance costs, net Nonrecourse mortgage loans, net $ $ *Griffin entered into interest rate swap agreements to effectively fix the interest rates on these loans (see below). |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Feb. 28, 2017 | |
Stockholders' Equity | |
Schedule of basic and diluted per share results | For the Three Months Ended Feb. 28, 2017 Feb. 29, 2016 Net 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. The incremental shares from the assumed exercise of stock options for the 2017 first quarter and the 2016 first quarter would have been 23,000 and 1,000, respectively. |
Schedule of options granted to employees | For the Three Months Ended Feb. 28, 2017 Feb. 29, 2016 Fair Value per Fair Value per Number of Option at Number of Option at Shares Grant Date Shares Grant Date Employees $ - $ - |
Schedule of assumptions used in determining fair values of options | For the Three Months Ended Feb. 28, 2017 Feb. 29, 2016 Expected volatility % — Risk free interest rates % — Expected option term (in years) — Annual dividend yield % — |
Schedule of option holders | Number of option holders at February 28, 2017 |
Schedule of compensation expense and related tax benefits for stock options | For the Three Months Ended Feb. 28, 2017 Feb. 29, 2016 Net compensation expense $ $ Net related tax benefit $ $ |
Schedule of unrecognized compensation expense related to nonvested stock options | Balance of Fiscal 2017 $ Fiscal 2018 $ Fiscal 2019 $ Fiscal 2020 $ Fiscal 2021 $ Fiscal 2022 $ |
Summary of the activity under the Griffin Stock Option Plan | For the Three Months Ended February 28, 2017 February 29, 2016 Weighted Weighted Avg. Avg. Number of Exercise Number of Exercise Shares Price Shares Price Outstanding at beginning of period $ $ Granted $ — $ — Outstanding at end of period $ $ |
Schedule of options by range of exercise prices | Weighted Avg. Remaining Range of Exercise Prices for Outstanding at Weighted Avg. Contractual Life Total Intrinsic Vested and Nonvested Options February 28, 2017 Exercise Price (in years) Value $23.00 - $28.00 $ 8.7 $ $28.00 - $32.00 $ 4.5 $32.00 - $39.00 $ 1.6 — $ 5.4 $ |
Schedule of accumulated other comprehensive loss | For the Three Months Ended Feb. 28, 2017 Unrealized gain Unrealized loss on on investment in cash flow hedges Centaur Media Total Balance November 30, 2016 $ $ $ Other comprehensive income before reclassifications Amounts reclassified — Net activity for other comprehensive loss Balance February 28, 2017 $ $ $ For the Three Months Ended Feb. 29, 2016 Unrealized gain Unrealized loss on on investment in cash flow hedges Centaur Media Total Balance November 30, 2015 $ $ $ Other comprehensive loss before reclassifications Amounts reclassified — Net activity for other comprehensive loss Balance February 29, 2016 $ $ $ |
Schedule of components of accumulated other comprehensive income (loss) | For the Three Months Ended February 28, 2017 February 29, 2016 Tax Tax (Expense) Net-of (Expense) Net-of Pre-Tax Benefit Tax Pre-Tax Benefit Tax Reclassifications included in net loss: Loss on cash flow hedges (interest expense) $ $ $ $ $ $ Total reclassifications included in net loss Mark to market adjustment on Centaur Media for a decrease in the foreign currency exchange rate Mark to market adjustment on Centaur Media for an increase (decrease) in fair value Increase (decrease) in fair value adjustments on Griffin’s cash flow hedges Total change in other comprehensive income (loss) Other comprehensive income (loss) $ $ $ $ $ $ |
Supplemental Financial Statem22
Supplemental Financial Statement Information (Tables) | 3 Months Ended |
Feb. 28, 2017 | |
Supplemental Financial Statement Information | |
Schedule of fair value, cost and unrealized gain of Griffin's investment in Centaur Media | Feb. 28, 2017 Nov. 30, 2016 Fair value $ $ Cost Unrealized gain (loss) $ $ |
Schedule of other assets | Feb. 28, 2017 Nov. 30, 2016 Deferred leasing costs $ $ Deferred rent receivable Prepaid expenses Lease receivables from tenants Available-for-sale securities Mortgage escrows Deposits and other expenditures related to potential real estate acquisitions Interest rate swap assets Property and equipment, net Intangible assets, net Deferred financing costs related to Webster Credit Line Other Total other assets $ $ |
Schedule of accounts payable and accrued liabilities | Feb. 28, 2017 Nov. 30, 2016 Accrued construction costs and retainage $ $ Trade payables Accrued liability for common stock repurchased — Accrued lease commissions Accrued interest payable Accrued salaries, wages and other compensation Other Total accounts payable and accrued liabilities $ $ |
Schedule of other liabilities | Feb. 28, 2017 Nov. 30, 2016 Deferred compensation plan $ $ Interest rate swap liabilities Prepaid rent from tenants Security deposits of tenants Conditional asset retirement obligations Other Total other liabilities $ $ |
Schedule of interest payments | For the Three Months Ended Feb. 28, 2017 Feb. 29, 2016 $ $ |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Nov. 30, 2016 |
Financial assets and liabilities carried at fair value and measured at fair value on a recurring basis: | ||
Assets, transfers from Level 1 to Level 2 | $ 0 | |
Liabilities, transfers from Level 1 to Level 2 | 0 | |
Assets, transfers from Level 2 to Level 1 | 0 | |
Liabilities, transfers from Level 2 to Level 1 | 0 | |
Marketable equity securities | 1,172 | $ 977 |
Interest rate swap liabilities | 1,014 | |
Recurring basis | Level 1 | ||
Financial assets and liabilities carried at fair value and measured at fair value on a recurring basis: | ||
Marketable equity securities | 1,172 | 977 |
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 | 391 | 207 |
Interest rate swap liabilities | $ 1,405 | $ 1,892 |
Fair Value - Assets and Liabili
Fair Value - Assets and Liabilities (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Nov. 30, 2016 |
Financial assets: | ||
Available-for-sale securities | $ 1,172 | $ 977 |
Financial liabilities: | ||
Interest rate swap liabilities | 1,014 | |
Carrying Value | ||
Financial assets: | ||
Interest rate swap | 391 | 207 |
Carrying Value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 20,220 | 24,689 |
Available-for-sale securities | 1,172 | 977 |
Carrying Value | Level 2 | ||
Financial liabilities: | ||
Mortgage loans | 108,959 | 109,697 |
Interest rate swap liabilities | 1,405 | 1,892 |
Estimated Fair Value | ||
Financial assets: | ||
Interest rate swap | 391 | 207 |
Estimated Fair Value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 20,220 | 24,689 |
Available-for-sale securities | 1,172 | 977 |
Estimated Fair Value | Level 2 | ||
Financial liabilities: | ||
Mortgage loans | 109,759 | 111,103 |
Interest rate swap liabilities | $ 1,405 | $ 1,892 |
Real Estate Assets (Details)
Real Estate Assets (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | 42 Months Ended | ||
Feb. 28, 2017USD ($)a | Feb. 29, 2016USD ($) | Nov. 30, 2013USD ($)a | Feb. 28, 2017USD ($)a | Nov. 30, 2016USD ($) | |
Real Estate Assets | |||||
Land | $ 17,895 | $ 17,895 | $ 17,895 | ||
Land improvements | 27,615 | 27,615 | 27,592 | ||
Buildings and improvements | 164,678 | 164,678 | 164,353 | ||
Tenant improvements | 22,619 | 22,619 | 21,925 | ||
Machinery and equipment | 11,022 | 11,022 | 11,022 | ||
Construction in progress | 2,667 | 2,667 | 1,659 | ||
Development costs | 14,616 | 14,616 | 14,615 | ||
Real estate assets, gross | 261,112 | 261,112 | 259,061 | ||
Accumulated depreciation | (88,796) | (88,796) | (86,801) | ||
Real estate assets, net | 172,316 | 172,316 | 172,260 | ||
Depreciation expense | 2,095 | $ 1,884 | |||
Capitalized interest | 84 | ||||
Sales | |||||
Deferred revenue | 10,180 | 10,180 | 9,526 | ||
Real estate held for sale | 2,992 | 2,992 | 2,992 | ||
Windsor undeveloped land sale | |||||
Real Estate Assets | |||||
Development costs | $ 0 | 0 | $ 0 | ||
Sales | |||||
Number of acres sold | a | 90 | ||||
Proceeds from sale of undeveloped land | $ 8,968 | ||||
Number of acres | a | 268 | 268 | |||
Percentage of cost incurred on sale of land | 99.00% | 99.00% | |||
Percentage of total revenue and pretax gain on sale have been recognized | 99.00% | 99.00% | |||
Revenue from property sales | $ 0 | 0 | $ 8,864 | ||
Estimated total pre-tax gain | 6,686 | ||||
Pretax gain on land sale | 0 | $ 0 | 6,608 | ||
Deferred revenue | 104 | 104 | |||
Land. | |||||
Sales | |||||
Real estate held for sale | $ 264 | 264 | 264 | ||
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 | Minimum | |||||
Real Estate Assets | |||||
Estimated Useful Lives | 10 years | ||||
Buildings and improvements | Maximum | |||||
Real Estate Assets | |||||
Estimated Useful Lives | 40 years | ||||
Machinery and equipment. | Minimum | |||||
Real Estate Assets | |||||
Estimated Useful Lives | 3 years | ||||
Machinery and equipment. | Maximum | |||||
Real Estate Assets | |||||
Estimated Useful Lives | 20 years | ||||
Development costs | |||||
Sales | |||||
Real estate held for sale | $ 2,728 | $ 2,728 | $ 2,728 |
Mortgage Loan (Details)
Mortgage Loan (Details) $ in Thousands | Mar. 15, 2017USD ($)building | Nov. 17, 2016USD ($)ft²derivative | Dec. 11, 2015USD ($)ft²derivativesubsidiary | Dec. 10, 2015USD ($)subsidiary | Sep. 01, 2015USD ($)ft² | Dec. 31, 2014USD ($)ft² | Feb. 28, 2017USD ($)ft²item | Feb. 29, 2016USD ($) | Nov. 30, 2016USD ($) |
Long-Term Debt | |||||||||
Mortgage loans, prior to debt issuance costs | $ 110,368 | $ 111,139 | |||||||
Debt issuance costs, net | (1,409) | (1,442) | |||||||
Mortgage loans, net | 108,959 | 109,697 | |||||||
Debt disclosures | |||||||||
Other assets | 16,766 | 15,163 | |||||||
Proceeds from issuance of debt | $ 4,450 | ||||||||
Ineffectiveness on cash flow hedges | 0 | ||||||||
Anticipated ineffectiveness on cash flow hedges | 0 | ||||||||
Net fair values of interest rate swap agreements | 1,014 | ||||||||
Other assets | |||||||||
Debt disclosures | |||||||||
Net fair values of interest rate swap agreements | 391 | ||||||||
Other liabilities caption | |||||||||
Debt disclosures | |||||||||
Net fair values of interest rate swap agreements | 1,405 | 1,892 | |||||||
Accounting Standards Update 2015-03 [Member] | Restatement Adjustment [Member] | |||||||||
Long-Term Debt | |||||||||
Mortgage loans, net | (1,442) | ||||||||
Debt disclosures | |||||||||
Other assets | (1,442) | ||||||||
Nonrecourse variable rate loans, due October 2, 2017 | |||||||||
Long-Term Debt | |||||||||
Mortgage loans, prior to debt issuance costs | 5,987 | 6,034 | |||||||
Nonrecourse variable rate loans, due February 1, 2019 | |||||||||
Long-Term Debt | |||||||||
Mortgage loans, prior to debt issuance costs | 10,237 | 10,313 | |||||||
Nonrecourse variable rate loans, due January 27, 2020 | |||||||||
Long-Term Debt | |||||||||
Mortgage loans, prior to debt issuance costs | 3,575 | 3,606 | |||||||
Nonrecourse variable rate loans, due January 2, 2025 | |||||||||
Long-Term Debt | |||||||||
Mortgage loans, prior to debt issuance costs | 20,617 | 20,744 | |||||||
Debt disclosures | |||||||||
Proceeds from issuance of debt | $ 10,891 | ||||||||
Term of debt | 10 years | ||||||||
Number of subsidiaries which are party to the mortgage | subsidiary | 2 | ||||||||
Debt amount refinanced | $ 8,859 | ||||||||
Nonrecourse variable rate mortgage, due September 1, 2025 | |||||||||
Debt disclosures | |||||||||
Leased space | ft² | 196,000 | ||||||||
Number of subsidiaries which are party to the mortgage | subsidiary | 1 | ||||||||
Nonrecourse Variable Rate Mortgage, Refinanced, Due In September 2026 [Member] | |||||||||
Long-Term Debt | |||||||||
Mortgage loans, prior to debt issuance costs | $ 26,725 | ||||||||
Debt disclosures | |||||||||
Proceeds from issuance of debt | $ 13,000 | ||||||||
Term of debt | 10 years | ||||||||
Debt amount refinanced | $ 13,725 | ||||||||
Nonrecourse Variable Rate Mortgage Due On 1 May 2026 [Member] | |||||||||
Long-Term Debt | |||||||||
Mortgage loans, prior to debt issuance costs | 14,103 | 14,187 | |||||||
Nonrecourse Variable Rate Mortgage Due On November 17, 2026 [Member] | |||||||||
Long-Term Debt | |||||||||
Mortgage loans, prior to debt issuance costs | 26,565 | 26,725 | |||||||
5.09%, due July 1, 2029 GCD mortgage loan | |||||||||
Long-Term Debt | |||||||||
Mortgage loans, prior to debt issuance costs | $ 6,902 | 7,001 | |||||||
Interest rate (as a percent) | 5.09% | ||||||||
5.09%, due July 1, 2029 TD mortgage Loan | |||||||||
Long-Term Debt | |||||||||
Mortgage loans, prior to debt issuance costs | $ 4,836 | 4,905 | |||||||
Interest rate (as a percent) | 5.09% | ||||||||
4.33%, due August 1, 2030 mortgage loan | |||||||||
Long-Term Debt | |||||||||
Mortgage loans, prior to debt issuance costs | $ 17,546 | $ 17,624 | |||||||
Interest rate (as a percent) | 4.33% | ||||||||
2017 PUB Mortgage | Subsequent events | |||||||||
Debt disclosures | |||||||||
New mortgage | $ 12,000 | ||||||||
Number of buildings used as collateral | building | 2 | ||||||||
Term of debt | 10 years | ||||||||
Amortization period of debt | 25 years | ||||||||
Number of buildings subject to master lease | building | 1 | ||||||||
First Collateralized Property | Nonrecourse variable rate loans, due January 2, 2025 | |||||||||
Debt disclosures | |||||||||
Area of collateralized properties (in square feet) | ft² | 303,000 | ||||||||
First Collateralized Property | Nonrecourse variable rate mortgage, due September 1, 2025 | |||||||||
Debt disclosures | |||||||||
Area of collateralized properties (in square feet) | ft² | 280,000 | ||||||||
Second Collateralized Property | Nonrecourse variable rate loans, due January 2, 2025 | |||||||||
Debt disclosures | |||||||||
Area of collateralized properties (in square feet) | ft² | 228,000 | ||||||||
Leased space | ft² | 201,000 | ||||||||
Second Collateralized Property | Nonrecourse Variable Rate Mortgage, Refinanced, Due In September 2026 [Member] | |||||||||
Debt disclosures | |||||||||
Area of collateralized properties (in square feet) | ft² | 252,000 | ||||||||
Interest rate swap agreement | |||||||||
Debt disclosures | |||||||||
Number of agreements containing credit risk related contingent features | item | 0 | ||||||||
Recognized net losses (included in other comprehensive loss), before taxes, on interest rate swap agreements | $ 671 | $ 1,474 | |||||||
Loss expected to be reclassified over next twelve months from accumulated other comprehensive loss to interest expense | $ 1,030 | ||||||||
Interest rate swap agreement | Nonrecourse variable rate loans, due January 2, 2025 | |||||||||
Debt disclosures | |||||||||
Fixed interest rate pursuant to interest rate swap agreement (as a percent) | 4.39% | ||||||||
Number of interest rate swap derivatives | derivative | 2 | ||||||||
Interest rate swap agreement | Nonrecourse Variable Rate Mortgage, Refinanced, Due In September 2026 [Member] | |||||||||
Debt disclosures | |||||||||
Fixed interest rate pursuant to interest rate swap agreement (as a percent) | 3.79% | ||||||||
Number of interest rate swap derivatives | derivative | 2 | ||||||||
Interest rate swap agreement | 2017 PUB Mortgage | Subsequent events | |||||||||
Debt disclosures | |||||||||
Fixed interest rate pursuant to interest rate swap agreement (as a percent) | 4.45% | ||||||||
Notional amount of interest rate swap agreement | $ 12,000 | ||||||||
Nonrecourse Mortgage, Proceeds Excluding Contingent Portion [Member] | Nonrecourse variable rate mortgage, due September 1, 2025 | |||||||||
Debt disclosures | |||||||||
Proceeds from issuance of debt | $ 11,500 | ||||||||
Nonrecourse Mortgage, Proceeds Excluding Contingent Portion [Member] | Second Collateralized Property | Nonrecourse variable rate loans, due January 2, 2025 | |||||||||
Debt disclosures | |||||||||
Leased space | ft² | 102,000 | ||||||||
Nonrecourse Mortgage, Contingent Portion [Member] | Nonrecourse variable rate loans, due January 2, 2025 | |||||||||
Debt disclosures | |||||||||
Proceeds from issuance of debt | $ 1,850 | ||||||||
Nonrecourse Mortgage, Contingent Portion [Member] | Nonrecourse variable rate mortgage, due September 1, 2025 | |||||||||
Debt disclosures | |||||||||
Proceeds from issuance of debt | $ 2,600 | ||||||||
LIBOR | Nonrecourse variable rate loans, due January 2, 2025 | |||||||||
Debt disclosures | |||||||||
Variable interest rate margin (as a percent) | 1.95% | ||||||||
LIBOR | Nonrecourse Variable Rate Mortgage, Refinanced, Due In September 2026 [Member] | |||||||||
Debt disclosures | |||||||||
Variable interest rate margin (as a percent) | 1.70% | ||||||||
LIBOR | 2017 PUB Mortgage | Subsequent events | |||||||||
Debt disclosures | |||||||||
Variable interest rate margin (as a percent) | 1.95% |
Revolving Credit Agreement (Det
Revolving Credit Agreement (Details) - Webster Credit Line | 3 Months Ended | 51 Months Ended |
Feb. 28, 2017USD ($)ft² | Feb. 28, 2017USD ($)ft² | |
Revolving credit agreement | ||
Maximum borrowing capacity | $ 15,000,000 | $ 15,000,000 |
Proceeds from Lines of Credit | 0 | |
Standby letters of credit aggregate amount | $ 1,827,000 | $ 1,827,000 |
Griffin Center South, Bloomfield, CT | ||
Revolving credit agreement | ||
Area of collateralized properties (in square feet) | ft² | 235,000 | 235,000 |
Single-story office building in Griffin Center | ||
Revolving credit agreement | ||
Area of collateralized properties (in square feet) | ft² | 48,000 | 48,000 |
LIBOR | ||
Revolving credit agreement | ||
Variable interest rate margin (as a percent) | 2.75% |
Stockholders' Equity - Per Shar
Stockholders' Equity - Per Share Results (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Per Share Results | ||
Net loss | $ (939) | $ (335) |
Weighted average shares outstanding for computation of basic per share results | 5,040,000 | 5,153,000 |
Adjusted weighted average shares for computation of diluted per share results | 5,040,000 | 5,153,000 |
Incremental shares from assumed exercise of stock options excluded due to anti-dilutive effect | 23,000 | 1,000 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Grants, Activity And Expense (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Feb. 28, 2017USD ($)individual$ / sharesshares | Feb. 29, 2016USD ($)$ / sharesshares | |
Other Disclosures | ||
Number of option holders | individual | 32 | |
Compensation expense for stock options | ||
Compensation expense (benefit) | $ 82 | $ 71 |
Related tax benefit (expense) | 20 | $ 12 |
Unrecognized compensation expense related to non-vested stock options that will be recognized during future periods | ||
Balance of fiscal 2017 | 243 | |
Fiscal 2,018 | 296 | |
Fiscal 2,019 | 215 | |
Fiscal 2,020 | 113 | |
Fiscal 2,021 | 33 | |
Fiscal 2,022 | $ 1 | |
Other Disclosures | ||
Number of options that may be exercised as stock appreciation rights | shares | 0 | |
2009 Stock Option Plan | ||
2009 Stock Option Plan | ||
Expiration term | 10 years | |
Granted (in shares) | shares | 5,000 | |
Activity under the 2009 Stock Option Plan | ||
Outstanding at beginning of period (in shares) | shares | 324,546 | 225,727 |
Granted (in shares) | shares | 5,000 | |
Outstanding at end of period (in shares) | shares | 329,546 | 225,727 |
Weighted Avg. Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 29.23 | $ 30.47 |
Granted (in dollars per share) | $ / shares | 30.81 | |
Outstanding at end of period (in dollars per share) | $ / shares | $ 29.25 | $ 30.47 |
2009 Stock Option Plan | Non-employee directors | ||
Compensation expense for stock options | ||
Forfeiture rates (as a percent) | 0.00% | 0.00% |
2009 Stock Option Plan | Employee [Member] | ||
2009 Stock Option Plan | ||
Granted (in shares) | shares | 5,000 | |
Fair values of stock options granted (in dollars per share) | $ / shares | $ 11.13 | |
Activity under the 2009 Stock Option Plan | ||
Granted (in shares) | shares | 5,000 | |
2009 Stock Option Plan | Employee and directors' stock options | ||
Assumptions used in determining the fair value of the stock options granted | ||
Expected volatility (as a percent) | 32.70% | |
Range of risk free interest rate (as a percent) | 2.10% | |
Expected option term (in years) | 7 years 6 months | |
Annual dividend yield (as a percent) | 0.90% | |
Minimum | 2009 Stock Option Plan | Executives | ||
Compensation expense for stock options | ||
Forfeiture rates (as a percent) | 17.90% | 17.90% |
Minimum | 2009 Stock Option Plan | Employee [Member] | ||
Compensation expense for stock options | ||
Forfeiture rates (as a percent) | 38.30% | 38.30% |
Maximum | 2009 Stock Option Plan | Executives | ||
Compensation expense for stock options | ||
Forfeiture rates (as a percent) | 22.60% | 22.60% |
Maximum | 2009 Stock Option Plan | Employee [Member] | ||
Compensation expense for stock options | ||
Forfeiture rates (as a percent) | 41.10% | 41.10% |
Stockholders' Equity - Range Of
Stockholders' Equity - Range Of Exercise Prices (Details) - 2009 Stock Option Plan $ / shares in Units, $ in Thousands | 3 Months Ended |
Feb. 28, 2017USD ($)$ / sharesshares | |
2009 Stock Option Plan | |
Outstanding at ending of the year (in shares) | shares | 329,546 |
Weighted Avg. Exercise Price (in dollars per share) | $ 29.25 |
Weighted Avg. Remaining Contractual Life | 5 years 4 months 24 days |
Total Intrinsic Value | $ | $ 799 |
$23.00-$28.00 | |
2009 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 | 124,793 |
Weighted Avg. Exercise Price (in dollars per share) | $ 26.67 |
Weighted Avg. Remaining Contractual Life | 8 years 8 months 12 days |
Total Intrinsic Value | $ | $ 547 |
$28.00-$32.00 | |
2009 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 | 121,678 |
Weighted Avg. Exercise Price (in dollars per share) | $ 28.99 |
Weighted Avg. Remaining Contractual Life | 4 years 6 months |
Total Intrinsic Value | $ | $ 252 |
$32.00-$39.00 | |
2009 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 | 1 year 7 months 6 days |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Income Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Change in accumulated other comprehensive loss, net of tax | ||
Balance at beginning of period | $ 90,803 | $ 94,809 |
Other comprehensive (loss) income before reclassifications | 331 | (1,397) |
Reclassifications included in net loss | 209 | 213 |
Total other comprehensive income (loss), net of tax | 540 | (1,184) |
Balance at end of period | 89,012 | 93,361 |
Accumulated Other Comprehensive Income (Loss) | ||
Change in accumulated other comprehensive loss, net of tax | ||
Balance at beginning of period | (1,049) | (1,085) |
Other comprehensive (loss) income before reclassifications | 331 | (1,397) |
Reclassifications included in net loss | 209 | 213 |
Total other comprehensive income (loss), net of tax | 540 | (1,184) |
Balance at end of period | (509) | (2,269) |
Unrealized Gain (Loss) on Cash Flow Hedges | ||
Change in accumulated other comprehensive loss, net of tax | ||
Balance at beginning of period | (1,062) | (1,744) |
Other comprehensive (loss) income before reclassifications | 204 | (1,141) |
Reclassifications included in net loss | 209 | 213 |
Total other comprehensive income (loss), net of tax | 413 | (928) |
Balance at end of period | (649) | (2,672) |
Unrealized Gain (Loss) on Investment in Centaur Media | ||
Change in accumulated other comprehensive loss, net of tax | ||
Balance at beginning of period | 13 | 659 |
Other comprehensive (loss) income before reclassifications | 127 | (256) |
Total other comprehensive income (loss), net of tax | 127 | (256) |
Balance at end of period | $ 140 | $ 403 |
Stockholders' Equity - AOCI T2
Stockholders' Equity - AOCI T2 rows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Accumulated other comprehensive loss | ||
Reclassifications, before tax | $ (339) | $ (338) |
Reclassifications, tax (expense) benefit | (130) | (125) |
Reclassifications, net of tax | (209) | (213) |
Other changes, before reclassifications, before tax | 527 | (2,205) |
Other changes, before reclassifications, tax (expense) benefit | (196) | 808 |
Total other changes before reclassifications, net of tax | 331 | (1,397) |
Total other comprehensive income (loss), net of tax | 540 | (1,184) |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated other comprehensive loss | ||
Reclassifications, net of tax | (209) | (213) |
Total other changes before reclassifications, net of tax | 331 | (1,397) |
Total other comprehensive (loss) income, before tax | 866 | (1,867) |
Total other comprehensive income (loss), tax | (326) | 683 |
Total other comprehensive income (loss), net of tax | 540 | (1,184) |
Mark-to-market foreign currency adjustment | ||
Accumulated other comprehensive loss | ||
Other changes, before reclassifications, before tax | (12) | (128) |
Other changes, before reclassifications, tax (expense) benefit | 4 | 45 |
Total other changes before reclassifications, net of tax | (8) | (83) |
Mark-to-market fair value adjustment | ||
Accumulated other comprehensive loss | ||
Other changes, before reclassifications, before tax | 207 | (265) |
Other changes, before reclassifications, tax (expense) benefit | (72) | 92 |
Total other changes before reclassifications, net of tax | 135 | (173) |
Unrealized Gain (Loss) on Cash Flow Hedges | ||
Accumulated other comprehensive loss | ||
Reclassifications, net of tax | (209) | (213) |
Other changes, before reclassifications, before tax | 332 | (1,812) |
Other changes, before reclassifications, tax (expense) benefit | (128) | 671 |
Total other changes before reclassifications, net of tax | 204 | (1,141) |
Total other comprehensive income (loss), net of tax | 413 | (928) |
Unrealized Gain (Loss) on Cash Flow Hedges | Interest Expense [Member] | ||
Accumulated other comprehensive loss | ||
Reclassifications, before tax | (339) | (338) |
Reclassifications, tax (expense) benefit | (130) | (125) |
Reclassifications, net of tax | $ (209) | $ (213) |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchases, Cash Dividend (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 27, 2017 | Feb. 28, 2017 | Feb. 29, 2016 | Nov. 30, 2016 | Feb. 28, 2017 | May 11, 2016 |
Stock Repurchases | ||||||
Stock repurchased | $ 1,474 | |||||
Cash Dividend | ||||||
Cash dividend paid | $ 1,514 | $ 1,546 | ||||
Cash dividends declared (in dollars per share) | $ 0 | $ 0 | ||||
Common Stock | ||||||
Stock Repurchases | ||||||
Stock repurchase program, authorized amount | $ 5,000 | $ 5,000 | $ 5,000 | |||
Stock repurchased (in shares) | 28,000 | 47,173 | 105,000 | 152,173 | ||
Stock repurchased | $ 880 | $ 1,474 | $ 3,354 | $ 4,828 | ||
Common stock repurchase program, remaining authorized amount | $ 172 | $ 172 |
Supplemental Financial Statem34
Supplemental Financial Statement Information - AFS Securities (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Nov. 30, 2016 | Feb. 29, 2016 |
Investments | |||
Shares of common stock held in Centaur Media | 1,952,462 | ||
Shares of Centaur Media common stock sold | 0 | 0 | |
Investment in Centaur Media | |||
Fair value | $ 1,172 | $ 977 | |
Cost | 1,014 | 1,014 | |
Unrealized (loss) | $ (37) | ||
Unrealized gain | $ 158 |
Supplemental Financial Statem35
Supplemental Financial Statement Information - Other And Intangible Assets (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Nov. 30, 2016 |
Other Assets | ||
Deferred leasing costs | $ 4,946 | $ 4,746 |
Deferred rent receivable | 4,570 | 4,474 |
Prepaid expenses | 1,984 | 2,333 |
Lease receivables from tenants | 1,528 | 369 |
Available for sale securities | 1,172 | 977 |
Mortgage escrows | 759 | 717 |
Deposits and other expenditures related to potential real estate acquisitions | 619 | 497 |
Interest rate swap asset | 391 | 207 |
Property and equipment, net | 268 | 280 |
Intangible assets, net | 240 | 247 |
Deferred financing costs related to Webster Credit Line | 100 | 117 |
Other | 189 | 199 |
Total other assets | $ 16,766 | $ 15,163 |
Supplemental Financial Statem36
Supplemental Financial Statement Information - Liabilities (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Nov. 30, 2016 |
Accounts Payable and Accrued Liabilities | ||
Accrued construction costs and retainage | $ 1,170 | $ 1,252 |
Trade payables | 1,342 | 1,060 |
Accrued liability for common stock repurchased | 880 | |
Accrued lease commissions | 604 | 487 |
Accrued interest payable | 407 | 390 |
Accrued salaries, wages and other compensation | 258 | 725 |
Other | 99 | 226 |
Total accounts payable and accrued liabilities | 4,760 | 4,140 |
Other Liabilities | ||
Deferred compensation plan | 4,603 | 4,334 |
Interest rate swap liabilities | 1,014 | |
Prepaid rent from tenants | 911 | 938 |
Security deposits of tenants | 739 | 413 |
Conditional asset retirement obligations | 288 | 288 |
Other | 81 | 78 |
Total other liabilities | 8,027 | 7,943 |
Other liabilities caption | ||
Other Liabilities | ||
Interest rate swap liabilities | $ 1,405 | $ 1,892 |
Supplemental Financial Statem37
Supplemental Financial Statement Information - Cash flow, etc. (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Supplemental Cash Flow Information | ||
Increase (decrease) in value of available-for-sale securities: Investment in Centaur Media Plc | $ 195 | $ (393) |
Increase (decrease) in accounts payable and accrued liabilities related to additions to real estate assets | (82) | 588 |
Interest paid | ||
Interest payments | $ 1,232 | $ 1,111 |
Income Taxes | ||
Effective income tax rate (as a percent) | 32.40% | 19.60% |
Effect of change in state law | $ 157 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Mar. 01, 2017USD ($)ft² | Feb. 27, 2017USD ($)shares | May 04, 2016USD ($)aft² | Jan. 25, 2016USD ($)a | Feb. 28, 2017USD ($)shares | Nov. 30, 2016USD ($)shares | Feb. 28, 2017USD ($)shares | Dec. 23, 2016USD ($)a | May 11, 2016USD ($) | Mar. 23, 2016USD ($)a |
Commitments and Contingencies | ||||||||||
Stock repurchased | $ 1,474 | |||||||||
Subsequent events | ||||||||||
Commitments and Contingencies | ||||||||||
Area Of Building | ft² | 100,000 | |||||||||
Agreement to sell | ||||||||||
Commitments and Contingencies | ||||||||||
Purchase obligations | $ 7,700 | |||||||||
Purchase Option Term | 3 months | |||||||||
Agreement Term of Extension | 3 years | |||||||||
Agreement Extension Fee | $ 80 | |||||||||
Number of acres to be sold | a | 67 | |||||||||
Sale price | $ 10,250 | |||||||||
Number of acres | a | 280 | 268 | ||||||||
Common Stock | ||||||||||
Commitments and Contingencies | ||||||||||
Stock repurchase program, authorized amount | $ 5,000 | $ 5,000 | $ 5,000 | |||||||
Stock repurchased (in shares) | shares | 28,000 | 47,173 | 105,000 | 152,173 | ||||||
Stock repurchased | $ 880 | $ 1,474 | $ 3,354 | $ 4,828 | ||||||
Common stock repurchase program, remaining authorized amount | 172 | 172 | ||||||||
Obligations For Investments In Real Estate Assets [Member] | ||||||||||
Commitments and Contingencies | ||||||||||
Purchase obligations | $ 2,516 | $ 2,516 | ||||||||
East Allen Township Northampton County PA Site [Member] | Obligations For Investments In Real Estate Assets [Member] | ||||||||||
Commitments and Contingencies | ||||||||||
Purchase obligations | $ 6,200 | |||||||||
Number of acres | a | 31 | |||||||||
East Allen Township Northampton County PA Site [Member] | Obligations For Investments In Real Estate Assets [Member] | Subsequent events | ||||||||||
Commitments and Contingencies | ||||||||||
Purchase obligations | $ 5,600 | |||||||||
Upper Macungie Township Lehigh County PA Site [Member] | Obligations For Investments In Real Estate Assets [Member] | ||||||||||
Commitments and Contingencies | ||||||||||
Purchase obligations | $ 1,800 | |||||||||
Number of acres | a | 14 | |||||||||
Area Of Building | ft² | 134,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent events $ in Thousands | Mar. 23, 2017USD ($)a | Mar. 01, 2017ft² |
Subsequent events | ||
Proceeds from Sale of Real Estate Assets | $ | $ 3,500 | |
Number of Acres Sold | a | 29 | |
Area Of Building | ft² | 100,000 |