SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 2001 Commission file number 0-13693
VININGS INVESTMENT PROPERTIES TRUST
(Exact name of registrant as specified in charter)
Massachusetts 13-6850434
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2839 Paces Ferry Road, Suite 1170, Atlanta, GA 30339
- ---------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 984-9500
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for 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___
The number of shares outstanding as of August 7, 2001 was 1,100,487.
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
INDEX OF FINANCIAL INFORMATION
PART I FINANCIAL INFORMATION PAGE
----
Item 1 Financial Statements
Consolidated Balance Sheets (unaudited) as of June 30, 2001
and December 31, 2000 3
Consolidated Statements of Operations (unaudited)
for the three and six months ended June 30, 2001 and 2000 4
Consolidated Statement of Shareholders' Equity (unaudited)
for the six months ended June 30, 2001 5
Consolidated Statements of Cash Flows (unaudited)
for the six months ended June 30, 2001 and 2000 6
Notes to Consolidated Financial Statements 7
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 18
Item 3 Quantitative and Qualitative Disclosures About Market Risk 21
PART II OTHER INFORMATION/SIGNATURE
Item 1 Legal Proceedings 23
Item 2 Changes in Securities and Use of Proceeds 23
Item 3 Defaults upon Senior Securities 23
Item 4 Submission of matters to a vote of Security Holders 23
Item 5 Other Information 23
Item 6 Exhibits and Reports on Form 8-K 23
Signature 24
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
June 30, December 31,
2001 2000
------------- -------------
ASSETS
Real estate assets:
Land $ 8,247,900 $ 8,247,900
Buildings and improvements 55,746,646 55,664,805
Furniture, fixtures & equipment 4,266,928 4,154,701
Less: accumulated depreciation (6,733,562) (5,593,555)
------------- -------------
Net real estate assets 61,527,912 62,473,851
Investment in unconsolidated Joint Venture 1,146,920 1,321,522
Cash and cash equivalents 331,357 813,975
Restricted cash 1,566,528 1,892,288
Receivable from Joint Venture 6,042 12,141
Receivables and other assets 279,867 286,407
Deferred financing costs, less accumulated amortization of $207,528 and
$183,307 at June 30, 2001 and December 31, 2000, respectively 241,854 82,258
Deferred leasing costs, less accumulated amortization of $85,381 and
$78,071 at June 30, 2001 and December 31, 2000, respectively 17,529 18,834
------------- -------------
Total assets $65,118,009 $66,901,276
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage notes payable $56,517,692 $54,742,209
Line of credit 150,000 1,864,990
Accounts payable and accrued liabilities 1,578,217 1,913,845
Dividends payable to Preferred Shareholders 464,750 464,750
-------------- ------------
Total liabilities 58,710,659 58,985,794
-------------- ------------
Minority interests of unitholders in Operating Partnership: (438,896) (171,935)
-------------- ------------
Shareholders' equity:
Series A convertible preferred shares of beneficial interest,
(par value $.01 per share) 2,050,000 authorized, 1,988,235
shares issued and outstanding at June 30, 2001 and
December 31, 2000 8,867,529 8,867,529
Common shares of beneficial interest, without par or stated value,
25,000,000 authorized, 1,100,487 and 1,100,488 shares issued and
outstanding at June 30, 2001 and December 31, 2000, respectively - -
Additional paid in capital 3,288,846 3,295,966
Accumulated deficit (5,310,129) (4,076,078)
-------------- ------------
Total shareholders' equity 6,846,246 8,087,417
-------------- ------------
Total liabilities and shareholders' equity $65,118,009 $66,901,276
============== ============
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the three months For the six months
ended June 30, ended June 30,
2001 2000 2001 2000
------------ ------------ ------------ ------------
REVENUES
Rental revenues $2,593,308 $2,807,741 $5,258,429 $5,538,273
Other property revenues 178,724 164,704 336,770 300,938
Other income 9,405 14,811 24,262 27,431
------------ ------------ ------------ ------------
2,781,437 2,987,256 5,619,461 5,866,642
------------ ------------ ------------ ------------
EXPENSES
Property operating and maintenance 1,163,682 1,104,805 2,332,852 2,208,146
Depreciation and amortization 575,740 564,535 1,147,317 1,127,943
Amortization of deferred financing costs 12,745 15,163 24,221 32,699
Interest expense 1,305,864 1,293,920 2,591,594 2,583,155
General and administrative 258,296 178,115 385,138 365,927
------------ ------------ ------------ ------------
3,316,327 3,156,538 6,481,122 6,317,870
Loss before equity in loss of unconsolidated
Joint Venture and minority interests (534,890) (169,282) (861,661) (451,228)
Equity in loss of unconsolidated Joint Venture (79,986) (43,033) (174,601) (106,740)
------------ ------------ ------------ ------------
Loss before minority interests (614,876) (212,315) (1,036,262) (557,968)
Less minority interests in Operating Partnership:
Preferred partnership interests - - - 336,758
Common partnership interests (150,863) (86,309) (266,961) (209,549)
------------ ------------ ------------ ------------
Net loss (464,013) (126,006) (769,301) (685,177)
------------ ------------ ------------ ------------
Distributions to preferred shareholders 232,375 232,375 464,750 232,375
Accretion to preferred shareholders - 33,144 - 33,144
------------ ------------ ------------ ------------
Net loss available to common shareholders' $ (696,388) $ (391,525) $(1,234,051) $ (950,696)
============ ============ ============ ============
NET LOSS PER SHARE - BASIC $ (0.63) $ (0.36) $ (1.12) $ (0.86)
============ ============ ============ ============
NET LOSS PER SHARE - DILUTED $ (0.63) $ (0.36) $ (1.12) $ (0.86)
============ ============ ============ ============
WTD. AVG. SHARES OUTSTANDING - BASIC 1,100,487 1,100,490 1,100,487 1,100,491
============ ============ ============ ============
WTD. AVG. SHARES OUTSTANDING - DILUTED 1,339,734 1,343,036 1,339,734 1,343,037
============ ============ ============ ============
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
For the six months ended June 30, 2001
(unaudited)
Series A Common Shares Total
Convertible of beneficial Cumulative shareholders'
Preferred Shares interest earnings equity
--------------------- --------------- ------------- ---------------
BALANCE AT DECEMBER 31, 2000 $ 8,867,529 $ 3,295,966 $(4,076,078) $ 8,087,417
Net Loss - - (1,234,051) (1,234,051)
Retirement of shares - (8) - (8)
Adjustment for redemption of minority interest
of unitholders in Operating Partnership - (7,112) - (7,112)
--------------------- ------------- -------------- ---------------
BALANCE AT JUNE 30, 2001 $ 8,867,529 $ 3,288,846 $(5,310,129) $ 6,846,246
===================== ============= ============== ===============
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
For the six months ended June 30,
2001 2000
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (769,301) $ (685,177)
------------ ------------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 1,147,317 1,127,943
Amortization of deferred financing costs 24,221 32,699
Loan prepayment costs 31,742 -
Equity in loss of unconsolidated Joint Venture 174,601 106,740
Minority interests in Operating Partnership:
Preferred partnership interests - 336,758
Common partnership interests (266,961) (209,549)
Distributions to preferred unitholders - (464,750)
Changes in assets and liabilities, net of the effect
of financing activities
Restricted cash 325,760 76,576
Receivable from Joint Venture 6,099 10,816
Receivables and other assets 6,540 48,652
Capitalized leasing costs (6,005) -
Accounts payable and accrued liabilities (335,628) (376,519)
------------ ------------
Total adjustments 1,107,686 689,366
------------ ------------
Net cash provided by operating activities 338,385 4,189
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions from Joint Venture - 10,000
Capital expenditures (194,068) (114,453)
------------ ------------
Net cash used in investing activities (194,068) (104,453)
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred financing costs (183,816) (20,000)
Loan prepayment costs (31,742) -
Net proceeds (repayments) on line of credit (1,714,990) 150,000
Principal repayments on mortgage notes payable (6,304,517) (162,888)
Proceeds from mortgage note payable 8,080,000 -
Purchase of retired shares (8) (22)
Distributions to preferred shareholders (464,750) -
Redemption of minority interests of unitholders in Operating Partnership (7,112) -
------------ ------------
Net cash used by financing activities (626,935) (32,910)
------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (482,618) (133,174)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 813,975 916,215
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 331,357 $ 783,041
============ ============
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001
(unaudited)
NOTE 1 - BUSINESS AND ORGANIZATION
- ----------------------------------
Vinings Investment Properties Trust ("Vinings" or the "Trust") was
organized on December 7, 1984 as a mortgage real estate investment trust
("REIT") whose original plan was to liquidate within approximately ten
years. On February 28, 1996, Vinings Investment Properties, Inc. completed
a tender offer to acquire control of the Trust in order to rebuild Vinings'
assets by expanding into the multifamily real estate markets through the
acquisition of garden style apartment communities that are leased primarily
to middle-income residents. Effective July 1, 2000, Vinings no longer
qualifies as a REIT for federal income tax purposes and will be taxed as a
corporation (See Note 2).
Vinings currently conducts all of its operations through Vinings Investment
Properties, L.P., a Delaware limited partnership (the "Operating
Partnership"). As of June 30, 2001, the Trust was the sole 1% general
partner and a 91.81% limited partner in the Operating Partnership,
controlling 81.16% of the common partnership interests and 100% of the
preferred partnership interests (See Note 5).
Vinings currently owns, through wholly-owned subsidiaries, ten apartment
communities totaling 1,520 units and a 75,000 square foot, single story
business park. In addition, Vinings holds a 20% interest in and is the
general partner of an unconsolidated joint venture, which owns through
subsidiary partnerships five additional apartment communities totaling 968
units (See Note 4). At June 30, 2001, the average occupancy of Vinings'
portfolio, excluding the Joint Venture Properties, (as hereinafter defined
in Note 4,) was 87%.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
Basis of Presentation
---------------------
The consolidated financial statements have been prepared in accordance with
generally accepted accounting principles and with the instructions to Form
10-Q and Article 10 of Regulation S-X.
The accompanying consolidated financial statements of Vinings include the
consolidated accounts of the Trust and its subsidiaries. All significant
intercompany balances and transactions have been eliminated in
consolidation. Vinings accounts for its investment in the unconsolidated
joint venture using the equity method of accounting. The term "Vinings" or
"Trust" hereinafter refers to Vinings Investment Properties Trust and its
subsidiaries, including the Operating Partnership.
The minority interests of the common unitholders in the Operating
Partnership (the "Common Units") reflected on the accompanying balance
sheets are calculated based on the common unitholders' minority interest
ownership percentage (17.84% as of June 30, 2001) multiplied by the
Operating Partnership's net assets. The Preferred Units, (as hereinafter
defined in Note 5,) were exchanged for an equivalent number of Preferred
Shares, (as hereinafter defined in Note 5,) effective April 1, 2000 and are
reflected on the accompanying balance sheet as the cash contributed plus
the accrued liquidation preference of $0.21 per Preferred Share ($417,529
at June 30, 2001).
The minority interests of the common unitholders in the income or loss of
the Operating Partnership on the accompanying statements of operations is
calculated based on the weighted average minority interest ownership
percentage multiplied by income (loss) before minority interests after
subtracting income allocated to the preferred partnership interests. The
minority interests of the preferred unitholders on the statement of
operations for the six months ended June 30, 2000 ($336,758) represents the
accrued preferred 11% return on the Preferred Units and the accrued pro
rata liquidation preference of $0.21 per Preferred Unit.
Income Taxes
------------
Prior to June 30, 2000, Vinings had elected to be taxed as a REIT under the
Internal Revenue Code of 1986, as amended (the "Code"). As a result,
Vinings was generally not subject to federal income taxation on that
portion of its income that qualified as REIT taxable income to the extent
that Vinings distributed at least 95% of its taxable income to its
shareholders and satisfied certain other requirements. Effective July 1,
2000, Vinings no longer qualifies as a REIT for federal income tax purposes
and will be taxed as a corporation. The Trust, however, is not currently
generating taxable income and, accordingly, no provisions for federal
income taxes and deferred income taxes have been included in the
accompanying consolidated financial statements.
Cash and Cash Equivalents
-------------------------
Vinings considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.
Restricted Cash
---------------
Restricted cash consists of real estate tax, insurance, replacement reserve
and repair escrows held by mortgagees, most of which are funded monthly
from property operations and released solely for the purpose for which they
were established. Restricted cash also includes security deposits collected
and held on behalf of the residents and tenants.
Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Real Estate Assets
------------------
Real estate assets are stated at depreciated cost less reductions for
impairment, if any. In identifying potential impairment, management
considers such factors as declines in a property's operating performance or
market value, a change in use, or adverse changes in general market
conditions. In determining whether an asset is impaired, management
estimates the future cash flows expected to be generated from the asset's
use and its eventual disposition. If the sum of these estimated future cash
flows on an undiscounted basis is less than the asset's carrying cost, the
asset is written down to its fair value. In management's opinion, there has
been no impairment of Vinings' real estate assets as of June 30, 2001.
Ordinary repairs and maintenance are expensed as incurred. Major
improvements and replacements are capitalized and depreciated over their
estimated useful lives when they extend the useful life, increase capacity
or improve efficiency of the related asset. Depreciation is computed on a
straight-line basis over the useful lives of the real estate assets
(buildings and improvements, 5-40 years; furniture, fixtures and equipment,
3-10 years; and tenant improvements, generally over the life of the related
lease).
Revenue Recognition
-------------------
All leases are classified as operating leases and rental income is
recognized when earned, which materially approximates revenue recognition
on a straight-line basis.
Deferred Financing Costs and Amortization
-----------------------------------------
Deferred financing costs include fees and costs incurred to obtain
financing and are capitalized and amortized over the term of the related
debt.
Net Loss Per Share
------------------
The following is a reconciliation of net loss available to the common
shareholders and the weighted average shares used in Vinings' basic and
diluted net loss per share computations:
For the three months For the six months
ended June 30, ended June 30,
2001 2000 2001 2000
--------------------------------------------------------
Net loss - basic $(696,388) $(391,525) $(1,234,051) $ (950,696)
Minority interests in Operating Partnership:
Common partnership interests (150,863) (86,309) (266,961) (209,549)
----------------------------------------------------------
Total minority interest (150,863) (86,309) (266,961) (209,549)
-----------------------------------------------------------
Net loss - diluted $(847,251) $(477,834) $(1,501,012) $(1,160,245)
==========================================================
Weighted average shares - basic 1,100,487 1,100,490 1,100,487 1,100,491
Dilutive Securities
Weighted average Common Units 239,247 242,546 239,247 242,546
Weighted average Preferred Shares - - - -
Share options - - - -
----------------------------------------------------------
Weighted average shares - diluted 1,339,734 1,343,036 1,339,734 1,343,037
==========================================================
Common Units in the Operating Partnership held by the minority unitholders
and Preferred Shares of the Trust are redeemable for common shares of
beneficial interest of the Trust ("Common Shares") on a one-for-one basis,
or for cash, at the option of the Trust. For the three and the six months
ended June 30, 2000 and 2001, options to purchase 103,500 shares and 99,750
shares, respectively, were excluded as the impact of such options was
antidilutive. For the three and six months ended June 30, 2001 and for the
three months ended June 30, 2000, Preferred Shares totaling 1,988,235 were
excluded as the impact of such Preferred Shares was antidilutive. For the
six months ended June 30, 2002, Preferred Units totaling 1,988,235 were
excluded as the impact of such Preferred Units was antidilutive.
Recent Accounting Pronouncement
-------------------------------
On June 15, 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (FAS 133). FAS 133, as
amended by FAS 137, "Deferral of the Effective Date of FAS 133," is
effective for all fiscal quarters of all fiscal years beginning after June
15, 2000. FAS 133 requires that all derivative instruments be recorded on
the balance sheet at their fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other
comprehensive income, depending on whether a derivative is designated as
part of a hedge transaction and, if it is the type of hedge transaction.
The adoption of FAS 133 did not have a significant effect on the Company's
results of operations or its financial position.
On December 3, 1999, the Securities and Exchange Commission (SEC) issued
Staff Accounting Bulletin No. 101 (SAB 101), Revenue Recognition, which
provides guidance on the recognition, presentation, and disclosure of
revenue in financial statements. SAB 101 was required to be implemented in
the fourth fiscal quarter of 2000. SAB 101 did not have a significant
effect on the Company's results of operations or its financial position.
Reclassifications
-----------------
Certain 2000 financial statement amounts may have been reclassified to
conform to the current year presentation.
NOTE 3 - REAL ESTATE ASSETS
- ---------------------------
On May 1, 1999, Vinings, through its subsidiaries, acquired thirteen
multifamily communities totaling 1,064 units (collectively, the "Portfolio
Properties") from seventeen limited partnerships and limited liability
companies. Eight of the Portfolio Properties (the "Mississippi Properties")
were purchased through subsidiary partnerships of the Operating
Partnership. The remaining five Portfolio Properties were purchased through
a joint venture structure. (See Note 4.)
In addition, Vinings, through subsidiary partnerships of the Operating
Partnership, owns two additional multifamily communities in the
metropolitan Atlanta area with 456 units for a total of 1,520 units in ten
communities, as well as a 75,000 square foot business center. All of the
multifamily communities are encumbered by fixed rate mortgage financing and
the business center is security for the Trust's line of credit.
NOTE 4 - INVESTMENT IN UNCONSOLIDATED JOINT VENTURE
- ---------------------------------------------------
On May 1, 1999, Vinings purchased, through a joint venture structure, five
apartment communities, totaling 968 units (the "Joint Venture Properties").
The Joint Venture Properties were purchased by nine individual partnerships
in each of which Vinings Holdings, Inc., a wholly owned subsidiary of the
Trust, owns a .1% general partnership interest and Vinings/CMS Master
Partnership, L.P., a Delaware limited partnership (the "Joint Venture"),
owns a 99.9% limited partnership interest. The Operating Partnership has a
.1% general partner interest and a 19.98% limited partner interest in the
Joint Venture, for which it paid $1,705,100. The remaining limited
partnership interests in the Joint Venture are held by an unaffiliated
third party.
Vinings accounts for its investment in the Joint Venture using the equity
method of accounting. The following is a summary of the results of
operations of the Joint Venture and Vinings' share of the equity in the
loss from the Joint Venture for the three months and six months ended June
30, 2001:
For the three For the six
months ended months ended
June 30,2001 June 30, 2001
-------------- -------------
Revenues $1,557,284 $ 3,064,562
Expenses:
Property operating and maintenance 700,422 1,423,736
General and administrative 11,960 24,988
Depreciation and amortization 387,126 772,282
Interest expense 857,707 1,716,563
------------ -------------
Total Expenses 1,957,215 3,937,569
------------ -------------
Net loss (399,931) (873,007)
Vinings' equity percentage 20% 20%
------------ -------------
Vinings' equity in loss of unconsolidated Joint Venture $ (79,986) $ (174,601)
============ =============
Distributions received by Vinings from Joint Venture - -
============ =============
Cash flows used by operating activities $ (65,570)
=============
Cash flows used in investing activities $ (97,779)
=============
Cash flows used in financing activities $ (137,521)
=============
The following summarizes the balance sheet of the Joint Venture as of June
30, 2001:
Real estates assets, net of accumulated depreciation $44,203,409
Cash and other assets 1,241,837
-------------
Total assets $45,445,246
=============
Mortgage notes payable $38,818,437
Other liabilities 892,608
-------------
Total liabilities 39,711,045
-------------
Capital - Vinings 1,146,920
Capital - Other 4,587,281
-------------
Total capital 5,734,201
-------------
Total liabilities and capital $45,445,246
=============
Mortgage notes payable held by the Joint Venture are non-recourse fixed
rate notes secured by the individual properties. All of the notes except
one are insured by the U.S. Department of Housing and Urban Development
("HUD") and, therefore, distributions from the properties are subject to
"surplus cash" as defined by HUD. The maturity dates of the notes payable
range from June 2007 to November 2037 and interest rates range from 8.00%
to 8.75% per annum.
NOTE 5 - SHAREHOLDERS' EQUITY AND PREFERRED PARTNERSHIP INTERESTS
- -----------------------------------------------------------------
On April 29, 1999, the Operating Partnership offered, in a private
transaction pursuant to a Securities Purchase Agreement (the "Purchase
Agreement"), Series A Convertible Preferred Partnership interests (the
"Preferred Units"). A total of 1,988,235 Preferred Units were issued for an
aggregate purchase price of $8,450,000. The Operating Partnership used the
proceeds of the sale of the Preferred Units to pay the cash consideration
for the Operating Partnership's interests in the property partnerships that
acquired the Mississippi Properties, and its interest in the Joint Venture.
(See Notes 3 and 4.)
Effective April 1, 2000, 100% of the 1,988,235 Preferred Units were
exchanged for an equivalent number of Series A Convertible Preferred Shares
of the Trust (the "Preferred Shares") having substantially the same rights,
preferences and privileges as the Preferred Units. The holders of Preferred
Shares are entitled to receive cumulative preferential cash distributions
at the per annum rate of $0.4675 per Preferred Share. Upon the occurrence
of certain triggering events, the holders of Preferred Shares are entitled
to receive, in addition to an amount equal to any accumulated and unpaid
distributions on such holder's Preferred Shares, a liquidation preference
of $4.46 per Preferred Share.
Under certain circumstances, the holders of Preferred Shares may convert
any part or all of such Preferred Shares into Common Shares. In lieu of
converting Preferred Shares into Common Shares, the Trust, in its sole
discretion, may satisfy its conversion obligations through certain cash
payments, as further set forth in the Certificate of Designation relating
to the terms of the Preferred Shares and the Declaration of Trust.
Generally, the holders of Preferred Shares do not have the right to vote on
any matter on which any of the holders of Common Shares may vote. The
holders of Preferred Shares do, however, have the right to vote as a
separate class of shareholders on certain transactions including, without
limitation, certain authorizations and issuances of preferred shares
designated as ranking senior to the Preferred Shares, certain amendments to
the Declaration of Trust, and certain sales or other dispositions of assets
of the Trust or the Operating Partnership, certain mergers or
consolidations of the Trust or the Operating Partnership, and transactions
that result in the liquidation of the Trust or the Operating Partnership.
As of June 30, 2001, a total of 1,988,235 Preferred Shares were
outstanding. In addition, as of June 30, 2001 a total of $417,529 had been
accrued as a liquidation preference on the Preferred Shares.
On May 14, 2001, the Board of Trustees of Vinings announced that it had
approved a proposal to effect a 1-for-1000 reverse share split of both its
Common Shares and Preferred Shares. If the reverse share split is ratified
by the Trust's shareholders and becomes effective, each holder of Common
Shares who, as a result of the reverse share split, would otherwise receive
a fraction of a Common Share will be entitled to receive an amount of cash
in lieu thereof based upon a pre-split price per common share of $3.20.
Fractional Preferred Shares would be issued as a result of the reverse
share split.
If ratified by the Trust's shareholders, the reverse share split should
reduce the number of registered common shareholders below 300, which would
provide Vinings the option to cease public registration of its Common
Shares. The reverse share split is structured as a "going private"
transaction within the meaning of Rule 13e-3 under the Securities Exchange
Act of 1934 because it is intended to, and, if completed, will likely
result in the termination of Vinings' reporting requirements under the
Exchange Act. Vinings' shareholders will be asked to vote on the reverse
share split, certain amendments to the terms of the Preferred Shares and
the election of Trustees at the 2001 Annual Meeting of Shareholders to be
held on September 14, 2001. For a discussion of the proposals to be
considered at the 2001 Annual Meeting, please read Vinings' definitive
Proxy Statement and Schedule 13E-3, each of which were filed with the SEC
on August 7, 2001.
NOTE 6 - NOTES PAYABLE
- ----------------------
Mortgage Notes Payable
----------------------
Mortgage notes payable were secured by the following apartment communities
at June 30, 2001 and December 31, 2000, as follows:
Fixed
interest rate Balance as of: Balance as of:
Maturity as of 6/30/01 6/30/01 12/31/00
---------- -------------- -------------- --------------
Cottonwood 10/01/2036 8.875% $ 4,657,283 $ 4,666,546
Delta Bluff 08/01/2036 9.25 % 6,171,135 6,182,456
Foxgate I 06/01/2037 8.50 % 6,559,609 6,573,142
Hampton House 08/01/2037 8.50 % 5,137,980 5,148,819
Heritage Place 10/01/2036 8.75 % 3,123,429 3,129,845
Northwood 06/01/2034 8.75 % 4,450,314 4,461,640
River Pointe 01/01/2037 8.625% 5,946,025 5,958,353
Trace Ridge 07/01/2036 8.50 % 5,296,011 5,307,867
The Thicket 07/01/2003 9.04 % 7,095,906 7,132,347
Windrush 07/01/2011 6.99 % 8,080,000 6,181,194
------------------- -------------- -------------
Total $56,517,692 $54,742,209
------------------- ============== =============
On June 1, 2001 Vinings refinanced the existing mortgage loan on Windrush
Apartments. The original principal amount of the new mortgage loan is
$8,080,000, with a fixed interest rate of 6.99% per annum. Monthly payments
of principal and interest are $53,702 and the loan matures on June 1, 2011.
After paying in full the balance due on the mortgage loan in effect prior
to the refinancing and all costs associated with the new mortgage loan,
approximately $1,600,000 in excess proceeds from the refinancing was used
to reduce Vinings' revolving line of credit.
All of the notes except The Thicket and Windrush are insured by HUD and,
therefore, distributions from the properties are subject to "surplus cash"
as defined by HUD.
Scheduled maturities of the mortgage notes payable as of June 30, 2001 are
as follows:
2001 $ 164,482
2002 352,104
2003 7,269,892
2004 317,269
2005 346,127
Thereafter 48,067,818
-------------
Total $56,517,692
=============
Line of Credit
--------------
On April 27, 1999 Vinings obtained a line of credit in the amount of
$2,000,000 from a financial institution. The line of credit is secured by
Peachtree Business Center. Interest is payable monthly at one percent over
prime as announced by the bank from time to time. At June 30, 2001, the
interest rate on the line of credit was 7.75% per annum. The principal
balance of the line of credit as of June 30, 2001 and December 31, 2000 was
$150,000 and $1,864,990, respectively. The line of credit matured on April
30, 2001 and was renewed until March 15, 2002.
NOTE 7 - RELATED PARTY TRANSACTIONS
- -----------------------------------
Vinings has entered into management agreements with VIP Management, LLC
("VIP"), an affiliate of the officers, who are also Trustees of Vinings, to
provide property management services for a fee equal to 3.5% of gross
revenues, plus a fee for data processing on all of the multifamily
communities and 5% of gross revenues on the business center. In addition,
effective July 1, 2000, VIP has administered the Trust for an advisory fee
equal to 1 1/2% of gross revenues, including the revenues from the Joint
Venture Properties. The advisory fee is in lieu of reimbursing VIP for all
overhead, salaries and other indirect costs attributable to the Trust's
operations, which were paid prior to July 1, 2000.
The following table reflects payments made to VIP:
Three months ended Six months ended
June 30, June 30,
---------------------- ---------------------
2001 2000 2001 2000
--------- --------- --------- ----------
Vinings
-------
Management fees $100,206 $105,720 $201,003 $209,006
Data processing fees 16,416 16,416 32,832 32,832
Overhead reimbursements - 94,298 - 189,219
Advisory fee 64,745 - 129,751 -
--------- --------- --------- ---------
Total $181,367 $216,434 $363,586 $431,057
========= ========= ========= =========
Joint Venture
-------------
Management fees $ 32,376 $ 35,913 $ 64,522 $ 71,340
Data processing fees 14,520 14,520 29,040 29,040
--------- --------- --------- ---------
Total $ 46,896 $ 50,433 $ 93,562 $100,380
========= ========= ========= =========
Effective March 1, 2000, 628,927 Common Shares of Vinings were purchased in
a privately negotiated transaction by the officers of Vinings, an affiliate
of the officers and an affiliate of one of the Trustees of Vinings from a
limited number of shareholders, which included three of the Trustees and
certain of their affiliates (the "Stock Transaction"). In connection with
the Stock Transaction, the three selling Trustees -- James D. Ross, Martin
H. Petersen and Gilbert H. Watts, Jr. -- resigned from the Board of
Trustees.
Of the 628,927 Common Shares purchased, Mr. Anzo acquired control of
547,982 shares. A portion of the consideration for Mr. Anzo's shares was a
Promissory Note executed by Mr. Anzo in favor of Watts Agent, L.P. dated
March 1, 2000 in the amount of $1,285,000, which is secured by a pledge of
566,966 of Mr. Anzo's Common Shares, evidenced by the Margin Stock Pledge
Agreement and the Amendment to the Margin Stock Pledge Agreement both dated
as of March 1, 2000 and which have been filed as exhibits to Mr. Anzo's
Amendment No. 4 to Schedule 13D filed on May 2, 2000 and the Schedule 13E-3
filed jointly by Mr. Anzo and Vinings on August 7, 2001.
In September 2000, Gilbert H. Watts, Jr., Watts Agent, L.P. and certain of
their affiliates initiated a lawsuit against Mr. Anzo and certain other
defendants in the Superior Court of Fulton County, Georgia alleging, among
other claims, that Mr. Anzo breached the terms of the Promissory Note and
the Margin Stock Pledge Agreement by failing to timely deliver all of the
pledged Common Shares to Watts Agent, L.P. and failing to deliver certain
financial statements. The Trust is not a party to the lawsuit. The
plaintiffs are seeking monetary damages against Mr. Anzo consisting of the
accelerated payment of the principal balance of the Promissory Note,
accrued interest, attorneys fees and other costs. Because Mr. Anzo's Common
Shares of the Trust continue to secure his obligations under the Promissory
Note, if the plaintiffs are successful on this default claim and Mr. Anzo
fails to pay the secured debt, then the plaintiffs may force a sale of the
pledged shares. Such a forced sale would result in a change of control of
the Trust. Mr. Anzo believes the complaint is without merit and is
vigorously defending against the suit.
On March 15, 2000, the Board of Trustees voted to waive the ownership
limitations in Vinings' Declaration of Trust with respect to shareholders
acquiring shares in the Stock Transaction, as well as with respect to
certain holders of Preferred Shares.
NOTE 8 - DISTRIBUTIONS
- ----------------------
Vinings did not declare or pay any dividends on its Common Shares during
the three and six months ended June 30, 2000 or 2001.
Effective April 1, 2000, Vinings exchanged all of the Preferred Units for
Preferred Shares. (See Note 5). The holders of Preferred Shares are
entitled to receive cumulative preferential cash dividends at the per annum
rate of $0.4675 per Preferred Share. For the six months ended June 30,
2001, Vinings paid dividends totaling $464,750 to Preferred Shareholders.
NOTE 9 - LEASING ACTIVITY
- -------------------------
The following is a schedule of future minimum rents due under operating
leases at Peachtree that have initial or remaining noncancellable lease
terms in excess of one year as of June 30, 2001:
2001 $281,984
2002 336,087
2003 142,367
2004 35,997
----------
Total $796,435
==========
One tenant generated 48% of Peachtree's revenues for the period ended June
30, 2001. The same tenant accounts for 40% of the future minimum lease
payments.
NOTE 10 - CONTINGENCIES
- -----------------------
Vinings is, from time to time, subject to various claims that arise in the
ordinary course of business. These matters are generally covered by
insurance. While the resolution of these matters cannot be predicted with
certainty, management believes that the final outcome of these matters will
not have a material adverse effect on the financial position or results of
operations of Vinings.
NOTE 11 - SUPPLEMENTAL CASH FLOW INFORMATION
- --------------------------------------------
Vinings paid interest of $2,440,043 and $2,465,771 for the six months ended
June 30, 2001 and 2000, respectively.
NOTE 12 - DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
- --------------------------------------------------------------
Based on interest rates and other pertinent information available to
Vinings as of June 30, 2001 and December 31, 2000, the Trust estimates that
the carrying value of cash and cash equivalents, the mortgage notes
payable, the line of credit, and other liabilities approximate their fair
values when compared to instruments of similar types, terms and maturity.
Disclosure about fair value of financial instruments is based on pertinent
information available to management as of June 30, 2001 and December 31,
2000. Although management is not aware of any factors that would
significantly affect its estimated fair value amounts, such amounts have
not been comprehensively revalued for purposes of these financial
statements since June 30, 2001.
NOTE 13 - 1997 STOCK OPTION AND INCENTIVE PLAN
- ----------------------------------------------
Vinings' 1997 Stock Option and Incentive Plan (the "Plan") provides
incentives to officers, employees, Trustees, and other key persons
including the grant of share options, share appreciation rights, restricted
and unrestricted share awards, performance share awards, and dividend
equivalent rights. Under the Plan, the maximum number of shares that may be
reserved and available for issuance is 10% of the total number of
outstanding shares at any time plus 10% of the number of partnership units
in the Operating Partnership outstanding at any time that are subject to
redemption rights. As of June 30, 2001, the total number of shares
authorized for issuance under the Plan was 132,305. Options granted under
the Plan expire ten years from the date of grant.
During 1998 and 1997, Vinings granted non-qualified share options to the
officers, Trustees and certain key persons. The options vested in full
after one year from the date of the grant. A total of 25,000 outstanding
options were granted in 1997, which have an exercise price of $5.00 per
share as compared to a fair value of $4.56 per share on the date of the
grant. Of the outstanding options granted in 1998, 73,250 have an exercise
price of $4.00 per share as compared to a fair value of $3.63 on the date
of the grant and 1,500 have an exercise price of $4.75 per share, which was
equal to the fair value on the date of grant. There were no options granted
during 1999, 2000 or 2001.
On July 1, 1998, Vinings awarded 20,000 shares of restricted common stock
to the officers and certain trustees (the "Restricted Stock"), representing
a total value of $80,000 (based on the fair market value of a share of the
Trust on the award date) which was reflected in compensation expense and
shareholders' equity in 1998. The Restricted Stock was awarded as
compensation for services to the Trust provided by such officers and
Trustees as well as by The Vinings Group.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
- -------------------------------------------------------------------------------
Forward-looking Statements
- --------------------------
This Form 10-Q, including the notes to Vinings' consolidated financial
statements, contains "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. These forward-looking statements include discussions of expectations
concerning future operations, profitability, liquidity and capital resources and
the expected effects on Vinings and its shareholders if the reverse share split
is implemented. You can identify these forward-looking statements by our use of
the words "expects," "estimates," "believes," "plans," "anticipates" or similar
expressions. Vinings' actual results could differ materially from those
expressed or implied by the forward-looking statements as a result of known and
unknown risks, uncertainties and other factors. Factors that might cause such a
difference include the following: uncertainties as to the outcome of the
proposed reverse share split; uncertainties as to the cost savings to be
realized after ceasing public registration of the Common Shares; limited
marketability of the securities after ceasing public registration of the Common
Shares; the inability of Vinings to identify properties for acquisition; the
inability of Vinings to continue to acquire properties in the future; the less
than satisfactory performance of any property that might be acquired by Vinings;
the inability to access the capital markets in order to fund Vinings' growth and
expansion strategy; the cyclical nature of the real estate market generally and
in Georgia, Mississippi and the surrounding southeastern states in particular;
the national economic climate; the local economic climate in Georgia,
Mississippi and the surrounding southeastern states; the local real estate
conditions and competition in Georgia, Mississippi and the surrounding
southeastern states; and the ability of Vinings to generate sufficient cash flow
to pay the entire preferred distribution. There can be no assurance that, as a
result of the foregoing factors, Vinings' growth and expansion strategy will be
successful or that the business and operations of Vinings will not be adversely
affected thereby.
Vinings notes, however, that the safe harbor for forward-looking statements
provided by Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 is not available for forward-looking statements
made in connection with the reverse share split proposal because that proposal
is a "going private transaction" under the rules issued under those acts.
OVERVIEW
- --------
Vinings Investment Properties Trust ("Vinings" or the "Trust") was organized on
December 7, 1984 as a mortgage real estate investment trust ("REIT") whose
original plan was to liquidate within approximately ten years. On February 28,
1996, Vinings Investment Properties, Inc. completed a tender offer to acquire
control of the Trust in order to rebuild Vinings' assets by expanding into the
multifamily real estate markets through the acquisition of garden style
apartment communities that are leased to middle-income residents. Effective July
1, 2000 Vinings no longer qualifies as a REIT for federal income tax purposes
and will be taxed as a corporation. (See Note 2 to Vinings' June 30, 2001
consolidated financial statements.)
Vinings currently conducts all of its operations through Vinings Investment
Properties, L.P., a Delaware limited partnership (the "Operating Partnership").
As of June 30, 2001, the Trust was the sole 1% general partner and a 91.81%
limited partner in the Operating Partnership, controlling 81.16% of the common
partnership interests and 100% of the preferred partnership interests (See Note
5 to Vinings' June 30, 2001 consolidated financial statements.)
The following discussion and analysis of the financial condition and results of
operations should be read in conjunction with the accompanying consolidated
financial statements of Vinings and the notes thereto.
RESULTS OF OPERATIONS
- ---------------------
Rental and other property revenues decreased $200,413 or 7%, from $2,972,445 for
the three months ended June 30, 2000 to $2,772,032 for the same period in 2001,
and $244,012 or 4%, from $5,839,211 for the six months ended June 30, 2000 to
$5,595,199 for the same period in 2001. This decrease is due to a change in
market conditions in several locations, which has resulted in a decrease in
occupancy and revenues at a number of properties.
Other income decreased $5,406 or 36%, from $14,811 for the three months ended
June 30, 2000 to $9,405 for the same period in 2001, and $3,169 or 11%, from
$27,431 for the six months ended June 30, 2000 to $24,262 for the same period in
2001. Other income is attributable to interest earned on cash balances and the
decrease is due to falling interest rates.
Property operating and maintenance expense increased $58,877 or 5%, from
$1,104,805 for the three months ended June 30, 2000 to $1,163,682 for the same
period in 2001, and $124,706 or 6%, from $2,208,146 for the six months ended
June 30, 2000 to $2,332,852 for the same period in 2001. This is due primarily
to the following: (1) increased utilities expense at a number of properties; (2)
increased marketing and advertising expense due to the increase in vacancies;
(3) increased maintenance and repairs at Windrush, one of the Trust's older
communities, and Foxgate, a community with higher apartment turnover costs due
to a student resident profile; (4) increased property and liability insurance
for the entire portfolio; and (5) increased real estate taxes as the result of a
reassessment of property values in Long Beach, Mississippi.
Depreciation and amortization increased by $11,205, or 2%, from $564,535 for the
three months ended June 30, 2000 to $575,740 for the same period in 2001, and
$19,374 or 2% from $1,127,943 for the six months ended June 30, 2000 to
$1,147,317 for the same period in 2001, due to depreciation on additional
capital expenditures.
Amortization of deferred financing costs decreased by $2,418, or 16%, from
$15,163 for the three months ended June 30, 2000 to $12,745 for the same period
in 2001, and $8,478 or 26% from $32,699 for the six months ended June 30, 2000
to $24,221 for the same period in 2001, due to additional costs associated with
the line of credit in 1999, which were amortized through April 2000.
Interest expense increased $11,944, or 0.9%, from $1,293,920 for the three
months ended June 30, 2000 to $1,305,864 for the same period in 2001, and $8,439
or 0.3% from $2,583,155 for the six months ended June 30, 2000 to $2,591,594 for
the same period in 2001. This increase is due primarily to prepayment fees in
connection with refinancing the Windrush mortgage note totaling $31,742, which
was partially offset by a decrease in interest on the line of credit totaling
$14,162 and $11,259, respectively, for the three months and the six months ended
June 30, 2001.
General and administrative expense increased $80,181, or 45%, from $178,115 for
the three months ended June 30, 2000 to $258,296 for the same period in 2001,
and $19,211 or 5%, from $365,927 for the six months ended June 30, 2000 to
$385,138 for the same period in 2001. For the three months ended June 30, 2001,
this increase consists of professional fees incurred primarily in connection
with the proposed reverse share split totaling $125,173, which is offset by a
decrease in overhead allocations and advisory fees paid to VIP totaling $29,553
and office expense totaling $17,464. The increase for the six months ended June
30, 2001 consists of professional fees incurred primarily in connection with the
proposed reverse share split totaling $114,722, which is offset by a decrease in
overhead allocation and advisory fees paid to VIP totaling $59,468 and office
expense totaling $32,190.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Net cash provided by operating activities increased $334,196, from $4,189 for
the six months ended June 30, 2000 to $338,385 for the same period in 2001. Of
this increase, approximately $200,000 is due to a decrease in restricted cash
balances and approximately $128,000 is due to the conversion of Preferred Units
to Preferred Shares on April 1, 2000. As a result of the conversion, the
distributions paid to holders of Preferred Shares for the six months ended June
30, 2001 are reflected on the Statements of Cash Flows as a financing activity,
whereas the income allocated to and the distributions made to the holders of
Preferred Units for the six months ended June 30, 2000 are reflected on the
Statements of Cash Flows as an operating activity.
Net cash used in investing activities increased $89,615 from $104,453 for the
six months ended June 30, 2000 to $194,068 for the same period in 2001. This
increase is due to additional capital expenditures made in the first six months
of 2001 offset by a $10,000 distribution from the Joint Venture during the first
six months of 2000.
Net cash used by financing activities increased $594,025, from $32,910 for the
six months ended June 30, 2000 to $626,935 for the same period in 2001. This
increase is due primarily to: (1) the conversion of the Preferred Units to
Preferred Shares and distributions paid on those shares totaling $464,750 for
the six months ended June 30, 2001; (2) deferred financing costs primarily
attributable to the refinancing of the Windrush mortgage note totaling $183,816
for the six months ended June 30, 2001 as compared to $20,000 paid in connection
with the line of credit for the same period in 2000; (3) loan prepayment costs
paid in connection with the early payoff of the Windrush mortgage note totaling
$31,742 for the six months ended June 30, 2001; (4) payments made to reduce the
line of credit totaling $1,714,990 for the six months ended June 30, 2001 as
opposed to borrowings from the line of credit totaling $150,000 for the six
months ended June 30, 2000; and (5) the redemption of minority interests of
unitholders in the Operating Partnership totaling $7,112. These payments were
offset by excess loan proceeds from the refinancing of the Windrush mortgage
note totaling $1,943,486 for the six months ended June 30, 2001.
The cash held by Vinings at June 30, 2001, plus the cash flow from Vinings'
assets, is expected to provide sources of liquidity to allow Vinings to meet
current operating obligations excluding the distributions on the Preferred
Shares. While Vinings has been able to pay currently the preferred
distributions, Vinings may not have sufficient cash flow from operations to make
future distributions on the Preferred Shares without drawing on its line of
credit. This is due to a decline in revenues due to market conditions at several
locations and the less than anticipated distributions from the Joint Venture.
However, Vinings has refinanced the existing mortgage loan on one of its
apartment communities and paid down the line of credit leaving sufficient
borrowing capacity for the foreseeable future. For more information regarding
the Trust's line of credit, see Note 6 to Vinings' June 30, 2001 Consolidated
Financial Statements. There can be no assurance, however, that sufficient cash
flow will be generated from the Trust's operations to meet future obligations.
In addition, management continues to explore financing alternatives as well as
continues its efforts to increase revenues and decrease its general and
administrative expenses.
PROPOSED REVERSE SHARE SPLIT
- ----------------------------
On May 14, 2001, the Board of Trustees of Vinings announced that it had approved
a proposal to effect a 1-for-1000 reverse share split of both its Common Shares
and Preferred Shares. If the reverse share split is ratified by the Trust's
shareholders and becomes effective, each holder of Common Shares who, as a
result of the reverse share split, would otherwise receive a fraction of a
Common Share will be entitled to receive an amount of cash in lieu thereof based
upon a pre-split price per Common Share of $3.20. Fractional Preferred Shares
would be issued as a result of the reverse share split.
If ratified by the Trust's shareholders, the reverse share split should reduce
the number of registered common shareholders below 300, which would provide
Vinings the option to cease public registration of its Common Shares. The
reverse share split is structured as a "going private" transaction within the
meaning of Rule 13e-3 under the Securities Exchange Act of 1934 because it is
intended to, and, if completed, will likely result in the termination of
Vinings' reporting requirements under the Exchange Act. Vinings expects that
this will enable the Trust to reduce its administrative overhead expenses.
Vinings' shareholders will be asked to vote on the reverse share split, certain
amendments to the terms of the Preferred Shares and the election of Trustees at
the 2001 Annual Meeting of Shareholders to be held September 14, 2001. For a
discussion of the proposals to be considered at the 2001 Annual Meeting, please
read Vinings' definitive Proxy Statement and Schedule 13E-3, each of which were
filed with the SEC on August 7, 2001.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- -------------------------------------------------------------------
Vinings is exposed to market risk from changes in interest rates, which may
adversely affect its financial position, results of operations and cash flows.
In seeking to minimize the risks from interest rate fluctuations, Vinings
manages exposures through its regular operating and financing activities.
Vinings does not use financial instruments for trading or other speculative
purposes. Vinings is exposed to interest rate risk primarily through its
borrowing activities, which are described in Note 6 to Vinings' June 30, 2001
Consolidated Financial Statements. All of Vinings' borrowings are under fixed
borrowings are under fixed rate instruments, except the line of credit, which is
at prime plus 1% per annum. However, Vinings has determined that there is no
material market risk exposure to its consolidated financial position, results of
operations or cash flows due to changes in interest rates because of the fixed
rate nature of its long-term debt.
The following table presents principal reductions and related weighted average
interest rates by year of expected maturity for Vinings' debt obligations as of
June 30, 2001 and should be read in conjunction with Vinings' Annual Report on
Form 10-K for the fiscal year ended December 31, 2000, which was filed with the
SEC:
Fair Value
There June 30,
(In Thousands) 2001 2002 2003 2004 2005 -after Total 2001
- -----------------------------------------------------------------------------------------------------------------------
Principal Reductions
In Mortgage Notes $164 $352 $7,270 $ 317 $ 346 $48,068 $56,517 $56,517
Average Interest Rates 8.58% 8.58% 8.58% 8.58% 8.58% 8.58% 8.58% 8.58%
Line Of Credit $ 150 - - - - - $ 150 $ 150
Interest Rate 7.75% - - - - - 7.75% 7.75%
- -----------------------------------------------------------------------------------------------------------------------
PART II
OTHER INFORMATION
-----------------
Item 1. Legal Proceedings
- --------------------------
Not Applicable
Item 2. Changes in Securities and Use of Proceeds
- --------------------------------------------------
Not Applicable
Item 3. Defaults Upon Senior Securities
- ----------------------------------------
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
Not Applicable
Item 5. Other Information
- --------------------------
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
3.1 Third Amended and Restated Declaration of Trust of Vinings effective
July 1, 1999 (incorporated by reference to Exhibit 3.1 to Vinings'
Quarterly Report on Form 10-Q for the quarter ended September 30,
1999, File No. 0-13693).
3.2 Certificate of Designation Classifying and designating a series of
Preferred Shares as Series A Convertible Preferred Shares of the Trust
(incorporated by reference to Exhibit 3.3 to Vinings' Quarterly Report
on Form 10-Q for the quarter ended March 31, 2000, File No. 0-13693).
3.3 Amended and Restated Bylaws of the Trust (incorporated by reference to
Exhibit 3.2 to Vinings' Registration Statement on Form S-11, File No.
2-94776).
3.4 Amendment dated June 4, 2001 to Amended and Restated Bylaws of the
Trust (filed herewith).
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Vinings Investment Properties Trust
By: /s/ Stephanie A. Reed
---------------------------------
Stephanie A. Reed
Vice President and Treasurer
Dated: August 13, 2001