SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 2000 Commission File Number 0-7716
CENTURY REALTY TRUST
(Exact name of Registrant as specified in its charter)
INDIANA 35-1284316
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
823 Chamber of Commerce Building 46204
Indianapolis, Indiana (ZipCode)
Address of principal executive offices)
Registrant's telephone number, including area code (317)632-5467
Indicate by check mark whether this registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or such shorter period that
the registrant was required to file such reports), and(2) has been subject
to such filing requirements for the past 90 days. YES X NO __.
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date.
Shares of Beneficial Interest, no par value 1,718,331 shares
Century Realty Trust and Subsidiaries
Consolidated Balance Sheets
March December
31, 2000 31, 1999
___________ ___________
Assets
Real estate investments:
Land $3,776,383 $3,776,383
Buildings 52,131,126 52,085,208
Equipment 1,336,703 1,304,834
Allowances for depreciation (12,124,134) (11,690,079)
___________ ___________
45,120,078 45,476,346
Net investment in direct financing leases 254,413 262,651
___________ ___________
45,374,491 45,738,997
Cash and cash equivalents 1,108,976 883,730
Restricted cash 1,511,492 1,257,705
Accounts and accrued income receivable 366,600 434,583
Unamortized management contracts 498,602 514,861
Unamortized mortgage costs 478,332 490,661
Undeveloped land 99,675 99,675
Other assets 101,938 112,473
___________ ___________
$49,540,106 $49,532,685
___________ ___________
___________ ___________
Liabilities and shareholders' equity
Liabilities:
Short-term debt $100,000 $100,000
Mortgage notes payable 34,915,115 35,071,414
Accounts payable and accrued liabilities 428,802 516,089
Interest 261,630 263,795
State income and property taxes 1,781,874 1,392,522
Tenants' security deposits and unearned rent 548,945 485,553
___________ ___________
38,036,366 37,829,373
Minority interest in operating partnerships 1,537,054 3,475,699
Shareholders' equity:
Shares of Beneficial Interest, no par
value - authorized 5,000,000 shares,
issued 1,713,638 shares (1,553,528 shares
at December 31, 1999), including 15,727
shares (5,914 shares at December 31, 1999)
in treasury 8,691,948 6,759,417
Undistributed income other than from
gain on the sale of real estate 116,882 192,584
Undistributed net realized gain from the
sale of real estate 1,316,078 1,316,078
Cost of treasury shares (158,222) (40,466)
___________ ___________
9,966,686 8,227,613
___________ ___________
$49,540,106 $49,532,685
___________ ___________
___________ ___________
See accompanying notes.
Century Realty Trust and Subsidiaries
Consolidated Statements of Income
Three Months
Ended March 31
2000 1999
__________ __________
Income:
Real estate operations:
Rental Income $3,189,364 $3,212,316
Income from direct financing leases 8,286 9,333
Other income 73,455 66,213
__________ __________
3,271,105 3,287,862
Less:
Real estate operating expenses 1,271,118 1,261,389
Depreciation 452,099 457,432
Real estate taxes 357,284 367,534
__________ __________
2,080,501 2,086,355
__________ __________
1,190,604 1,201,507
Interest 19,395 14,682
__________ __________
1,209,999 1,216,189
Expenses:
Interest 748,937 769,177
State income taxes 31,676 40,512
General and administrative 151,079 134,491
__________ __________
931,692 944,180
Income before minority interest
in operating partnerships 278,307 272,009
Minority interest in operating
partnerships 14,427 50,581
__________ __________
Net income $263,880 $221,428
__________ __________
__________ __________
Per share data:
Basic earnings per share $0.15 $0.14
Diluted earnings per share $0.15 $0.14
See accompanying notes.
Century Realty Trust and Subsidiaries
Consolidated Statements of Cash Flows
Three Months
Ended March 31
2000 1999
__________ __________
Operating Activities
Net income $263,880 $221,428
Adjustments to reconcile net
income to cash provided by
operating activities:
Depreciation and amortization 464,427 469,696
Minority interest 14,427 50,581
Changes in operating assets
and liabilities:
Restricted cash (174,685) (292,084)
Accounts and accrued income receivable 50,125 (385,464)
Other assets 8,751 (7,801)
Accounts payable and accrued liabilities 384,824 505,584
Tenants' security deposits and
unearned rent (85,110) (30,432)
__________ __________
Net cash provided by operations 926,639 531,508
Investing Activities:
Purchase of property and improvements (77,786) (76,111)
Lease principal payments received 8,238 9,738
__________ __________
Net cash used in investing activities (69,548) (66,373)
Financing Activities:
Principal payments on mortgage notes payable (156,299) (138,759)
Shares purchased for treasury (117,756) 0
Dividends paid to shareholders (337,250) (307,267)
Distributions to minority interest (20,540) (42,190)
__________ __________
Net cash used in financing activities (631,845) (488,216)
__________ __________
Net increase in cash and cash equivalents 225,246 (23,081)
Balance at beginning of period 883,730 744,901
__________ __________
Balance at end of period $1,108,976 $721,820
__________ __________
__________ __________
Supplemental Data:
Selected noncash activities related to
investing and financing activities were
as follows:
Issued 160,110 shares of beneficial
interest in exchange for 160,110
operating partnership units of
controlled partnerships $1,932,532 $0
__________ __________
__________ __________
See accompanying notes.
NOTES TO FINANCIAL STATEMENTS
CENTURY REALTY TRUST
March 31, 2000
Unaudited
NOTE 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Trust's annual
report on Form 10-K for the year ended December 31, 1999.
NOTE 2 - MORTGAGE NOTES PAYABLE
Ten of the fifteen properties owned by the Trust are encumbered by
mortgage loans that are payable in monthly installments totaling approximately
$210,000, including interest at fixed rates ranging from 6.97% to 9% per annum,
and which mature from December 1, 2000 to August 1, 2008. Scheduled payments
during the three months ended March 31, 2000 decreased mortgage loan balances,
in the aggregate, by $128,965.
The five apartment properties owned by the operating partnerships
controlled by the Trust have long-term mortgage loans that are payable in
monthly installments totaling approximately $76,000. The loans have interest
rates ranging from 8 1/8% to 8 7/8%, and mature from June 1, 2006 to May 1,
2030. Scheduled payments during the three months ended March 31, 2000
decreased mortgage loan balances, in the aggregate, by $27,334.
Note 3 - Real Estate Investment Transactions
In November, 1997, the Trust, through its wholly-owned subsidiary, CR
Management, Inc., acquired for 286,908 operating partnership units and other
consideration, the general partner interest in five limited partnerships each
of which owned as its principal asset a single apartment property. In
accordance with a provision in the agreement the Trust granted, effective
January 1, 2000, to all beneficial owners of partnership units the right to
exchange their units for an equal number of shares of the Trust. Holders of
160,110 units elected to exchange units for shares as of January 1, 2000.
The Trust immediately repurchased for treasury 9,813 of those shares. On
April 1, 2000, holders of 21,499 units elected to exchange units for shares.
The Trust immediately repurchased 1,079 of those shares for treasury. The
exchange offer provides that exchanges will be exercised effective on the first
day of each calendar quarter. Following the exchanges as of April 1, 2000,
105,299 operating partnership units were outstanding.
NOTE 4 - FEDERAL INCOME TAXES
The Trust intends to continue as a real estate investment trust as defined
in the Internal Revenue Code and to distribute its taxable income. Assuming
compliance with other requirements of the Code, income distributed will not be
taxable to the Trust. Accordingly, no provision for federal income taxes is
made in the financial statements. Distributions, however, to the extent that
such payments are from earnings and profits of the Trust, are taxable to the
shareholder recipients as dividend income.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
Contained in this discussion are forward-looking statements which
management believe to be reasonable and informative. Such statements are
based on assumptions which may not prove to be correct for reasons management
cannot predict. Consequently, the inclusion of forward-looking statements
should not be considered as representations by the Trust or its management
that expected results will be achieved or that stated objectives will be
attained.
At March 31, 2000 and 1999, and throughout the quarters then ended, the
Trust owned or controlled fifteen apartment communities containing 2,136
apartment units, three multi-tenant commercial properties containing 89,000
rentable square feet, and two restaurant properties leased to operators under
net leases. Five of the fifteen apartment communities containing a total of
586 units are owned by partnerships over which the Trust has exclusive control.
A detailed listing of the investment real estate is contained on Page 2 of the
Trust's 1999 annual report. At March 31, 2000 and 1999 the Trust's net
investment in real estate consisted of apartment properties (94%), commercial
properties (5%) and net-leased restaurant properties (1%). Except for one
restaurant property in Orlando, Florida, the Trusts' real estate investments
are located in Indiana.
The apartment communities, which comprise 94% of the Trust's investment
property, also account for most of the rental income and expenses reported.
Management expects the real estate portfolio will be unchanged during the
second quarter of 2000, and that operating income and expenses will be
comparable with the second quarter of 1999.
RESULTS OF OPERATIONS
For the first quarter of 2000, the Trust reported a $16,700, or .5%,
decrease in income from real estate operations from the comparable 1999 period.
Income from apartment operations decreased by $10,000, or .3%, from the prior
year. Higher average rental rates in 2000, up 1.1%, were more than offset by
lower economic occupancy rates. Economic occupancy for the first quarter of
2000 was 92.8%, down from 94% in the prior year quarter.
Rental properties other than apartments accounted for 5.6% of total income
from rental operations in the first quarter of 2000. Gross income from
non-apartment properties decreased $6,800 from the prior year quarter due
primarily to lower occupancy rates. Occupancy rates averaged 93% during the
first quarter of 2000, down from 97% during the comparable quarter of 1999.
Operating expenses, excluding interest and depreciation, for all of the
apartment properties amounted to 48.1% of gross possible income for the first
quarter of 2000, down from 48.4% for the prior year period, and amounted to
an increase of $6,582, or .4%, in total operating expenses. A comparatively
moderate winter season following an unusually severe winter a year ago resulted
in lower utility costs and winter-related repair expenses during the 2000
quarter. Snow and ice removal costs during the 2000 quarter amounted to
approximately $18,000, one half the cost incurred in the first quarter a year
ago.
Real estate taxes on Indiana property are assessed on March 1 each year
and are payable in two installments in the following calendar year. Real
estate tax expense for the first quarter represents one-fourth of the estimated
real estate taxes payable during the next calendar year. Estimates are based
on actual tax payments during the preceding year with allowances for anticipated
rate increases comparable with past experience.
Annual listing fees for NASDAQ of $6,900 and an increase of $10,600 in
legal fees related to general business matters accounted for the increase in
general and administrative expenses between the quarters ended March 31, 2000
and 1999.
Administrative salaries and related payroll taxes and benefits, increased
by less than $600, approximately 1%, over the prior year quarter. In the first
quarter of 2000, general and administrative expenses consumed 4.6% of income
from real estate operations, up from 4.1% in the first quarter of 1999.
Interest expense, all of which related to loans outstanding throughout
the first quarters of 2000 and 1999, decreased by $20,240 due the scheduled
reduction of loan balances. Interest expense applicable to mortgage loans on
partnership-owned properties accounted for $2,100 of the reduction.
FINANCIAL CONDITION AND LIQUIDITY
On April 6, 2000, the Trust declared a $.20 per share cash distribution
payable May 15, 2000 to shareholders of record April 28, 2000. With 1,697,911
shares outstanding, that distribution will require $339,582. Four of the five
controlled partnerships declared surplus cash distributions aggregating $52,300
payable May 25, 2000 to partners of record April 28, 2000.
Other than the requirement of $391,882 for declared, but unpaid
distributions management is not aware of any significant transactions or events
which would require material expenditures in 2000.
Except for $100,000 of short-term debt, the Trust has no obligations, nor
has it made any commitments, which will require expenditures in excess of funds
anticipated to be provided by operations during the remainder of 2000. No
transactions or events have occurred to indicate that funds provided by
operations during the balance of 2000 will differ disproportionately from the
first quarter of the year. At March 31, 2000, the Trust held cash and cash
equivalents of approximately $936,000 in its own accounts and $172,000 in
partnership accounts which management believes is sufficient to meet anticipated
working capital requirements.
INFLATION
Management believes that the direct effects of inflation on the Trust's
quarterly operations have been insignificant during 1999 and 2000.
PART II
Item 6(b). No events occurred during the three months ended March 31,
2000, which would have necessitated the filing of a report on Form 8K.
MANAGEMENT REPRESENTATIONS
The information furnished in this report, while not audited, includes
all adjustments, in the opinion of management, necessary for a fair
representation of the financial position of Century Realty Trust at March
31, 2000, and December 31, 1999, and the results of its operations and its
cash flow for the three months ended March 31, 2000, and March 31, 1999, in
accordance with generally accepted accounting principles consistently applied.
The interim results reported are not necessarily indicative of expected results
for the full year, and should be considered in conjunction with the audited
financial statements contained in the Trust's 1999 annual report.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CENTURY REALTY TRUST
Date_____________ By___________________________
John I. Bradshaw, Jr.
President and Treasurer
Date_____________ By____________________________
David F. White
Controller