UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
| x | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 |
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO
Commission file number 1-09349
Sizeler Real Estate Management Co., Inc. 401(k) plan
Sizeler Property Investors, Inc.
2542 Williams Blvd
Kenner, LA 70062
SIZELER REAL ESTATE MANAGEMENT CO., INC. 401(k) PLAN
Table of Contents
| Page | ||
Plan financial statements and schedules prepared in accordance with the financial reporting requirements of the Employment Retirement Income Security Act of 1974. | ||
| 3 | ||
Statements of Net Assets Available for Benefits as of December 31, 2005 and 2004 | 4 | |
| 5 | ||
| 6 – 9 | ||
Schedule H, Line 4i-Schedule of Assets (Held at End of Year) | 10 | |
| 11 | ||
| Exhibit 23.1 | ||
2
Report of Independent Registered Public Accounting Firm
The Plan Administrator
Sizeler Real Estate Management Co., Inc. 401(k) Plan:
We have audited the accompanying statements of net assets available for benefits of Sizeler Real Estate Management Co., Inc. 401(k) Plan as of December 31, 2005 and 2004, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate under the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2005 and 2004, and the changes in its net assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2005, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
June 29, 2006
New Orleans, LA
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SIZELER REAL ESTATE MANAGEMENT CO., INC. 401 (K) PLAN
Statements of Net Assets Available for Benefits
December 31, 2005 and 2004
| 2005 | 2004 | |||||
Assets | ||||||
Investments, at fair value: | ||||||
Cash and cash equivalents | $ | 85,594 | $ | 88,393 | ||
Common stock | 337,223 | 441,192 | ||||
Mutual funds | 2,604,905 | 2,292,914 | ||||
Participants’ loans | 27,523 | 22,018 | ||||
Total investments | 3,055,245 | 2,844,517 | ||||
Receivables: | ||||||
Employer contributions | 6,099 | 2,832 | ||||
Employee contributions | 13,309 | 6,641 | ||||
Total receivables | 19,408 | 9,473 | ||||
Total assets | 3,074,653 | 2,853,990 | ||||
Liabilities | ||||||
Excess contributions payable | 2,611 | 28,140 | ||||
Net assets available for benefits | $ | 3,072,042 | $ | 2,825,850 | ||
See accompanying notes to financial statements.
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SIZELER REAL ESTATE MANAGEMENT CO., INC. 401 (K) PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 2005 and 2004
| 2005 | 2004 | |||||||
Additions to net assets attributed to: | ||||||||
Investment income: | ||||||||
Net appreciation (depreciation) in fair value of mutual funds | $ | (6,577 | ) | $ | 163,823 | |||
Net appreciation in fair value of common stock | 27,610 | 46,272 | ||||||
Interest and dividends | 174,790 | 75,154 | ||||||
| 195,823 | 285,249 | |||||||
Participants’ contributions | 246,770 | 225,431 | ||||||
Employer contributions, net of forfeitures | 92,175 | 82,023 | ||||||
Total additions | 534,768 | 592,703 | ||||||
Deductions: | ||||||||
Withdrawals and benefits paid | (287,749 | ) | (153,679 | ) | ||||
Administrative expenses | (827 | ) | (525 | ) | ||||
Total deductions | (288,576 | ) | (154,204 | ) | ||||
Net increase in net assets available for benefits | 246,192 | 438,499 | ||||||
Net assets available for benefits: | ||||||||
Beginning of year | 2,825,850 | 2,387,351 | ||||||
End of year | $ | 3,072,042 | $ | 2,825,850 | ||||
See accompanying notes to financial statements.
5
SIZELER REAL ESTATE MANAGEMENT CO., INC. 401(K) PLAN
Notes to Financial Statements
December 31, 2005 and 2004
1. Description of the Plan
The following description of the Sizeler Real Estate Management Co., Inc. 401(k) Plan (the “Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.
General
The Plan is a defined contribution plan sponsored by Sizeler Real Estate Management Co., Inc. and its subsidiaries (the Plan Sponsor or Company). The Plan was established on November 1, 2001. Substantially all employees of the Plan Sponsor, except union and non-resident alien employees, are eligible to participate in the Plan on the first day of the month following their attainment of age 21 and the completion of one year of eligible service. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Contributions and Benefits
Participants may contribute to the Plan up to 15% of their eligible compensation. The employer will match up to 50% of the employee’s contribution not to exceed 6% of the employee’s eligible compensation. In addition, the employer may make a discretionary contribution to the Plan. No such contribution was made for 2005 and 2004.
Vesting
Each participant is fully vested in his/her contributions at all times. A participant becomes vested in the employer contributions as follows: 20% after two years of service, 40% after three years of service, 60% after four years of service, 80% after five years of service, and 100% after six years of service.
Payment of Benefits
Participants are eligible for lump-sum or monthly benefit payments upon reaching age 65, or participants may elect early retirement upon reaching age 55. A participant is also eligible to receive 100% of their account balance in the event of death or disability, paid as either monthly benefit payments or a lump-sum distribution. Terminated participants are eligible to receive lump-sum payments of their vested accounts as soon as practicable after their termination date.
Participant Loans
Each participant may borrow the lesser of 50% of their vested account balance or $50,000 reduced by the outstanding balance of loans from the Plan during the one year period ending on the day before the date on which such loan is made. The term of the loan may not exceed five years, unless the proceeds are used to acquire the principal residence of the participant. Repayments are made through payroll deductions. The annual loan interest rate is based on the Prime Rate as posted in the Wall Street Journal.
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Participant Accounts
Valuation of the trust assets held in each fund is performed daily and, on the basis thereof, the value of each participant’s account is determined. Each participant’s account is credited with the participant’s and employer’s contributions to each fund and plan earnings and charged with any distributions made to the participant. Allocations are based upon annual compensation and/or fund account balances, as defined by the Plan. The benefit to which a participant is entitled is the vested benefit that can be provided from the participant’s account.
Forfeitures
If a participant terminates his employment, the non-vested portion of his account is forfeited and may be used to reduce current or future Company contributions payable to the Plan.
Plan Termination
Although it has not expressed any intent to do so, the Plan Sponsors have the right under the Plan to, at any time, amend or terminate the Plan subject to the terms of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared on an accrual basis of accounting. Benefits are recorded when paid.
Cash and Cash Equivalents
The Plan considers cash equivalents to be all highly-liquid investments with maturities of three months or less at the date of acquisition.
Use of Estimates
The preparation of financial statements requires management to make estimates that affect amounts reported in the financial statements and accompanying notes and schedule. Such estimates could change in the future as additional information becomes known, which could impact the amounts reported and disclosed herein.
Risks and Uncertainties
The Plan provides for investments in various investment securities, which in general are exposed to various risks, such as interest rate, credit, and overall market volatility risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits and participant account balances.
Valuation of Investments
The Plan’s funds are primarily invested in mutual funds, common stock, and a money market fund. Mutual funds and common stock are stated at fair value based on quoted market prices and the money market fund is based on quoted redemption values. Loans to participants are valued at their outstanding balances, which approximate fair value.
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3. Investments
The Plan Administrator is Sizeler Real Estate Management Co., Inc., with State Street Bank and Princeton Retirement Group named as Trustees of the Plan. The following investment opportunities are available to participants: AIM Dynamics Fund-Investor Class, AIM Small Company Growth Fund-Investor Class, AIM Global Growth Fund, JP Morgan Diversified Mid Cap Value-A Fund, JP Morgan Large Cap Growth-A Fund, JP Morgan Equity Index-A Fund, JP Morgan Investor Growth-A Fund, JP Morgan Liquid Assets Money Market-Reserve Fund, JP Morgan Diversified-A Fund, JP Morgan Government Bond-A Fund, Fidelity Advisor High Income Advantage Fund, and Sizeler Property Investors, Inc. Common Stock.
The Trustees maintain accounts on behalf of the Plan and make investments in common trust funds, in accordance with written instructions from the participants. These funds are distinguished by the level of risk of the investments contained within the fund.
The current value of the following investments is in excess of 5% of the Plan’s net assets available for benefits:
| December 31 | ||||||
| 2005 | 2004 | |||||
JP Morgan Diversified Fund | $ | 254,842 | $ | 195,697 | ||
JP Morgan Diversified Mid Cap Value Fund | 481,588 | 407,368 | ||||
JP Morgan Government Bond Fund | 303,231 | 289,541 | ||||
JP Morgan Large Cap Growth Fund | 259,979 | 210,407 | ||||
JP Morgan Equity Index Fund | 454,168 | 381,535 | ||||
AIM Small Company Growth Fund | 278,507 | 339,720 | ||||
AIM Global Growth Fund | 154,272 | 103,092 | ||||
Fidelity Advisor High Income Advantage Fund | 222,617 | 187,819 | ||||
Sizeler Property Investors, Inc. Common Stock | 337,223 | 441,192 | ||||
4. Reconciliation of Financial Statements to Form 5500
The amount of excess contributions payable, which arose as a result of elective contributions of highly compensated employees exceeding the amount permitted under the nondiscriminatory rule as defined by the Internal Revenue Code, is not reported as a plan liability on Form 5500.
8
The following is a reconciliation of net assets available for benefits as of December 31, 2005 and 2004, per the financial statements to Form 5500:
| 2005 | 2004 | ||||
Net assets available per the financial statements | $ | 3,072,042 | 2,825,850 | ||
Excess contributions payable | 2,611 | 28,140 | |||
Net Assets available for benefits per the Form 5500 | $ | 3,074,653 | 2,853,990 | ||
The following is a reconciliation of the increase in net assets available for benefits for the years ended December 31, 2005 and 2004, per the financial statements to Form 5500:
| 2005 | 2004 | ||||||
Net increase per the financial statements | $ | 246,192 | 438,499 | ||||
Excess contributions at December 31, 2005 | 2,611 | 28,140 | |||||
Excess contributions at December 31, 2004 | (28,140 | ) | (27,445 | ) | |||
Net increase per the Form 5500 | $ | 220,663 | 439,194 | ||||
5. Fees and Expenses
The Plan Sponsor has absorbed the cost of the personnel required to maintain the personnel, payroll and other records required by the Plan, as well as investment management fees.
6. Income Tax Status
The underlying non-standardized prototype has received an opinion letter from the Internal Revenue Service (“IRS”) dated August 30, 2001, stating that the form of the plan is qualified under Section 401(a) of the Internal Revenue Code (the “Code”), and therefore, the related trust is tax exempt. In accordance with Revenue Procedure 2002-6 and Announcement 2001-77, the Plan Sponsor has determined that it is eligible to and has chosen to rely on the current IRS prototype plan opinion letter. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Sponsor has indicated that it will take the necessary steps, if any, to bring the Plan’s operations into compliance with the Code.
9
SIZELER REAL ESTATE MANAGEMENT CO., INC 401(k) PLAN
Schedule of Assets (Held at End of Year)
December 31, 2005
Identity of Issue | Shares | Current Value | |||
Cash and cash equivalents: | |||||
Cash | 17,921 | $ | 17,921 | ||
JP Morgan Liquid Assets Money Market Fund | 67,673 | 67,673 | |||
Mutual funds: | |||||
JP Morgan Diversified Fund | 18,151 | 254,842 | |||
JP Morgan Diversified Mid Cap Value Fund | 31,663 | 481,587 | |||
JP Morgan Government Bond Fund | 29,699 | 303,231 | |||
JP Morgan Large Cap Growth Fund | 16,068 | 259,979 | |||
JP Morgan Equity Index Fund | 15,992 | 454,168 | |||
JP Morgan Investor Growth Fund | 4,635 | 67,768 | |||
*AIM Dynamics Fund | 7,025 | 127,934 | |||
*AIM Small Company Growth Fund | 21,004 | 278,507 | |||
*AIM Global Growth Fund | 7,633 | 154,272 | |||
Fidelity Advisor High Income Advantage Fund | 22,810 | 222,617 | |||
Common Stock: | |||||
*Sizeler Property Investors, Inc. Common Stock | 13,988 | 337,223 | |||
*Loans to Plan participants, bearing an interest rate of 5.5% | 27,523 | ||||
| $ | 3,055,245 | ||||
| * | Party-in-interest transaction. |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the Plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
SIZELER REAL ESTATE MANAGEMENT CO., INC 401(K) PLAN.
By: | /s/ GUY M. CHERAMIE
| |
| Guy M. Cheramie | ||
| Chief Financial Officer | ||
Date: June 29, 2006
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