SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1995
or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________________ to _________________
Commission file number 1-9349
SIZELER PROPERTY INVESTORS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 72-1082589
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
2542 WILLIAMS BOULEVARD, KENNER, LOUISIANA 70062
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area
code (504) 471-6200
-------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
Indicate by Check 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
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date.
8,556,669 shares of Common Stock ($.01 Par Value) were
outstanding as of August 9, 1995.
Page 1 of 12
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
INDEX
Page
--------
Part I: Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-10
Part II: Other Information
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults upon Senior Securities 11
Item 4. Submission of Matters to a Vote
of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
2
PART I
FINANCIAL STATEMENTS
Item 1. Financial Statements
Sizeler Property Investors, Inc. and Subsidiaries
Consolidated Balance Sheets
June 30, December 31,
1995 1994
------------ ------------
ASSETS
Real estate investments:
Land $ 47,671,000 $ 46,918,000
Buildings and improvements, net of
accumulated depreciation of $25,055,000
in 1995 and $21,309,000 in 1994 217,320,000 210,498,000
Investment in real estate partnership 971,000 973,000
------------ ------------
265,962,000 258,389,000
Cash and cash equivalents 1,103,000 1,423,000
Accounts receivable and accrued revenue,
net of allowance for doubtful accounts
of $440,000 in 1995 and $321,000 in 1994 2,963,000 2,931,000
Prepaid expenses and other assets 9,231,000 7,180,000
------------ ------------
Total Assets $279,259,000 $269,923,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Mortgage notes payable $ 77,547,000 $ 42,139,000
Notes payable 31,784,000 52,987,000
Accounts payable and accrued expenses 4,650,000 4,119,000
Tenant deposits and advance rents 959,000 845,000
Commitments and contingencies -- --
Minority interest in real estate
partnerships 255,000 245,000
------------ ------------
115,195,000 100,335,000
Convertible subordinated debentures 62,878,000 62,878,000
------------ ------------
Total Liabilities 178,073,000 163,213,000
------------ ------------
SHAREHOLDERS' EQUITY
Preferred stock, 3,000,000 shares
authorized, none issued -- --
Common stock, par value $.01 per share,
15,000,000 shares authorized, shares
issued and outstanding--8,929,069
in 1995 and 8,922,819 in 1994 89,000 89,000
Additional paid-in capital 127,264,000 127,199,000
Accumulated distributions in excess of
net earnings (24,205,000) (20,551,000)
------------ ------------
103,148,000 106,737,000
Treasury shares, at cost, 193,500 shares
in 1995 (1,955,000) --
Unrealized loss on securities (7,000) (27,000)
------------ ------------
Total Shareholders' Equity 101,186,000 106,710,000
------------ ------------
Total Liabilities and
Shareholders' Equity $279,259,000 $269,923,000
============ ============
See notes to consolidated financial statements.
3
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
Consolidated Statements of Income
Quarter Ended June 30, Six Months Ended June 30,
---------------------- -------------------------
1995 1994 1995 1994
------- -------- ---------- ----------
OPERATING REVENUE
Rents and other income $10,580,000 $ 8,861,000 $21,078,000 $16,413,000
Equity in income of partnership 31,000 21,000 53,000 30,000
----------- ----------- ----------- -----------
10,611,000 8,702,000 21,131,000 16,443,000
----------- ----------- ----------- ----------
OPERATING EXPENSES
Management & leasing fees 441,000 368,000 963,000 729,000
Utilities 457,000 416,000 896,000 766,000
Real estate taxes 790,000 618,000 1,578,000 1,117,000
Operations & maintenance 1,567,000 1,237,000 3,084,000 2,276,000
Depreciation & amortization 2,101,000 1,472,000 4,046,000 2,786,000
Other operating expenses 596,000 445,000 1,155,000 829,000
----------- ----------- ----------- ----------
5,952,000 4,556,000 11,722,000 8,503,000
----------- ----------- ----------- ----------
INCOME FROM RENTAL OPERATIONS 4,659,000 4,146,000 9,409,000 7,940,000
----------- ----------- ----------- ----------
OTHER INCOME (EXPENSES)
Interest & dividend income 16,000 7,000 24,000 51,000
Interest expense (3,527,000) (2,237,000) (7,078,000) (4,045,000)
Administrative expenses (527,000) (440,000) (1,039,000) (865,000)
----------- ----------- ----------- ----------
4,038,000 2,670,000 8,093,000 4,859,000
----------- ----------- ----------- ----------
INCOME BEFORE GAIN ON SALE OF
INVESTMENT SECURITIES 621,000 1,476,000 1,316,000 3,081,000
----------- ----------- ----------- ----------
Gain on sale of investment
securities -- -- -- 8,000
----------- ----------- ----------- ----------
-- -- -- 8,000
----------- ----------- ----------- ----------
NET INCOME $ 621,000 $ 1,476,000 $ 1,316,000 $3,089,000
=========== =========== =========== ==========
Net income per share $ .07 $ 0.17 $ 0.15 $ 0.35
=========== =========== =========== ==========
See notes to consolidated financial statements.
4
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Six Months Ended June 30,
1995 1994
------------ ------------
OPERATING ACTIVITIES:
Net income $ 1,316,000 $ 3,089,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 4,046,000 2,786,000
Gain on sale of investment securities -- (8,000)
Equity in depreciation of real estate partnership,
net of minority interest depreciation 2,000 20,000
Changes in operating assets and liabilities:
Increase in accounts receivable and accrued
revenue (32,000) (37,000)
Increase in prepaid expenses and other assets (120,000) (268,000)
Increase in accounts payable and accrued
expense 826,000 1,048,000
Increase in tenant deposits and advance rents 114,000 289,000
----------- ------------
Net Cash Provided by Operating Activities 6,152,000 6,919,000
----------- ------------
INVESTING ACTIVITIES:
Acquisitions of real estate investments, net of
debt assumed (4,747,000) (29,808,000)
Improvements to real estate investments (6,867,000) (3,309,000)
----------- ------------
Net Cash Used In Investing Activities (11,614,000) (33,117,000)
----------- ------------
FINANCING ACTIVITIES:
Proceeds from mortgage notes payable and notes
payable to banks 35,825,000 29,500,000
Principal payments on mortgage notes payable and
notes payable to banks (21,620,000) (3,154,000)
Debt issuance costs and mortgage escrow deposits (2,214,000) (150,000)
Cash dividends paid (4,969,000) (4,811,000)
Issuance of shares pursuant to stock options/
ownership plans 65,000 125,000
Purchases of treasury shares (1,955,000)
Minority interest in real estate partnerships 10,000 20,000
----------- ------------
Net Cash Provided By Financing
Activities 5,142,000 21,530,000
----------- ------------
Net increase (decrease) in cash and cash
equivalents (320,000) (4,668,000)
Cash and cash equivalents at beginning of year 1,423,000 6,299,000
----------- ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,103,000 $ 1,631,000
=========== ============
See notes to consolidated financial statements.
5
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
NOTES A--SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION: The accompanying consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with 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. In the opinion of management, all adjustments (consisting
of normal recurring accruals) necessary for a fair presentation have been
included. Operating results for the three-month period ended June 30,1995, are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1995. The consolidated balance sheet at December 31, 1994
has been derived from the audited consolidated financial statements at that
date, but does 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 Sizeler Property Investors, Inc. Annual Report
on Form 10-K for the year ended December 31, 1994.
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of Sizeler Property Investors, Inc. and its majority-owned subsidiaries
and partnerships (the "Company"). All significant intercompany transactions and
accounts have been eliminated in consolidation.
REAL ESTATE INVESTMENTS: Real estate investments are carried at cost.
Depreciation of buildings and improvements is provided by the straight-line
method over the estimated useful lives of the assets, ranging from ten to forty
years. Maintenance and repairs are expensed in the period incurred.
INVESTMENT IN REAL ESTATE PARTNERSHIP: An investment in a partnership for which
the Company owns a 50% interest is accounted for by use of the equity method.
RENTAL INCOME: Rental income includes rents from shopping center and apartment
properties. Minimum rents from shopping center leases are accounted for ratably
over the term of the lease. Percentage rents are recognized based upon tenant
sales that exceed specified levels. Tenant reimbursements are recognized as the
applicable services are rendered or related expenses incurred.
INCOME TAXES: The Company has elected to be taxed as a real estate investment
trust (REIT) under the Internal Revenue Code and intends to maintain its
qualification as a REIT in the future. Accordingly, no provision for federal or
state income taxes was made.
A real estate investment trust is required to distribute to shareholders at
least 95% of its ordinary taxable income. Taxable income differs from net income
for financial reporting purposes principally because of differences in the
method and timing of depreciation of the properties.
EARNINGS PER SHARE: Primary earnings per share is based upon the weighted
average number of shares outstanding. The weighted average number of shares
outstanding were 8,791,000 and 8,909,000 for the three months ended
6
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
NOTE A--SIGNIFICANT ACCOUNTING POLICIES (continued)
June 30, 1995 and 1994, respectively, and 8,857,000 and 8,905,000 for the six
months ended June 30, 1995 and 1994, respectively.
Fully-diluted per share amounts are similarly computed, but include the effect,
when dilutive, of the Company's common stock equivalents. The Company's
outstanding debentures and options are excluded in these calculations for 1995
and 1994, due to their antidilutive effect.
NOTE B--MORTGAGE NOTES PAYABLE
The Company's mortgage notes payable are secured by certain land, buildings, and
improvements. The respective book values of the mortgaged properties and related
mortgage balances at June 30, 1995, are as follows:
Interest Maturity Book Mortgage
Rate Date Value Balance
-------- ------------- ------------ -----------
9.75% Sept. 1, 1996 $ 4,605,000 $ 3,491,000
8.35% Nov. 1, 1996 35,304,000 22,750,000
9.00% Mar. 1, 1997 3,380,000 2,246,000
10.88% Dec. 1, 1999 4,587,000 3,576,000
9.00% Dec. 27, 1999 4,031,000 2,207,000
9.47% Feb. 1, 2000 18,318,000 12,025,000
9.47% Feb. 1, 2000 12,021,000 7,800,000
8.35% May 1, 2000 27,664,000 16,000,000
8.25% July 1, 2000 10,511,000 6,884,000
8.50% July 15, 2003 4,330,000 568,000
------------ -----------
$100,818,000 $77,547,000
============ ===========
NOTE C--ISSUANCE OF COMMON STOCK AND CONVERTIBLE SUBORDINATED DEBENTURES
On March 7, 1994, the Company filed a shelf Registration Statement (Form S-3)
with the Securities and Exchange Commission, pursuant to which it may offer for
sale, from time to time, convertible subordinated debentures, preferred stock,
or common stock, with a cumulative public offering price of up to $150 million.
To date, no securities have been issued pursuant to this Registration.
7
FINANCIAL INFORMATION (continued)
RESULTS OF OPERATIONS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994.
Operating revenue from all properties in the portfolio for the quarter
ended June 30, 1995, compared to 1994, increased $1.9 million (22%), due
principally to newly-acquired properties, and, to a lesser extent, higher rental
rates on properties which were a part of the Company's portfolio during both
comparative periods. Revenue from shopping centers and apartments increased $1.4
million and $499,000, respectively. Rental operating expenses of all properties
increased $1.4 million (31%); rental operating expenses of shopping centers and
apartments increased $968,000 and $428,000, respectively. Income from rental
operations of all properties increased $513,000 (12%); income from rental
operations of shopping centers and apartments increased $463,000 and $629,000,
respectively. The reported increases in operating revenue, operating expenses,
and income from rental operations were due principally to newly-acquired
properties.
Operating revenue from properties owned during both comparable periods
increased $82,000 (1%) in 1995, attributable to higher rental rates and higher
average occupancies at certain of the Company's properties. Income from rental
operations of these properties decreased $151,000 (4%) for the quarter ended
June 30, 1995, compared to 1994, primarily attributable to an increase in
depreciation expense resulting from capital improvements completed at several of
the Company's properties during 1994 and 1995. At June 30, 1995, the Company's
shopping center and apartment properties were 96% and 97% leased, respectively.
Interest expense increased $1.3 million for the quarter ended June 30,
1995, compared to that of 1994, attributable to the following: (1) an increase
of $1.2 million in mortgage interest expense resulting from mortgage debt
assumed in the third quarter of 1994 for the term financing of the North Shore
Square Shopping Mall ($22.8 million principal amount at 8.35%); mortgage
financing completed in the first quarter of 1995 on the Lafayette Square,
Hampton Park, and Pine Bend Apartments ($19.8 million principal amount at
9.47%); and mortgage financing completed in the second quarter of 1995 on the
Lakeview Club Apartments ($16.0 million principal amount at 8.35%); and (2)
$129,000 of interest expense on bank debt (average bank borrowings were
approximately $37.3 million and $17.8 million, with an average rate of interest
of 8.2% and 7.0% for the second quarter of 1995 and 1994, respectively).
Administrative expenses increased $87,000 (20%) for the quarter ended June
30, 1995, compared to 1994, principally attributable to increased payroll costs,
professional fees, and other administrative costs associated with the Company's
increased portfolio size and capital structure.
Net income decreased between the quarters ended June 30, 1995 and 1994 in
the aggregate and on a per-share basis. The decrease was attributable to an
increase in income from rental operations principally offset by increased
depreciation expense relative to the Company's additional investment in real
estate properties and higher interest expense resulting from increased
borrowings and higher interest rates.
8
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994.
Operating revenue from all properties in the portfolio for the six months
ended June 30, 1995, compared to the same period in 1994 increased $4.69 million
(29%), due principally to newly-acquired properties and, to a lesser extent,
higher rental rates on properties which were a part of the portfolio during both
comparable periods; revenue from shopping centers and apartments increased $2.99
million and $1.70 million, respectively; rental operating expenses of all
properties increased $3.22 million (39%); rental operating expenses of shopping
centers and apartments increased $1.97 million and $1.24 million, respectively;
and income from rental operations of all properties increased $1.47 million
(18%); income from rental operations of shopping centers and apartments
increased $1.02 million and $458,000, respectively. The reported increases in
operating revenue, operating expenses, and income from rental operations were
due principally to newly-acquired properties.
Operating revenue from properties owned during both comparable periods
increased $411,000 (3%) in 1995, attributable to higher rental rates and higher
average occupancies at several of the Company's properties. Rental operating
expenses of these properties increased $592,000 (8%), due to higher maintenance
and repair, payroll, insurance costs, and depreciation expense. Income from
rental operations of these properties decreased $181,000 (2%) in the first six
months of 1995, compared to the same period a year ago, principally attributable
to the increase in depreciation expense resulting from capital improvements
completed at several of the Company's properties during 1994 and 1995.
Interest, dividend, and other income decreased $25,000 in the first six
months of 1995, compared to the same period a year ago, due to the Company
selling a portion of its investments in marketable securities in 1994.
Interest expense increased $3.03 million (75%) for the six-month period
ended June 30, 1995, compared to the same period in 1994, attributable to (1) an
increase of $2.04 million in mortgage interest expense resulting from mortgage
debt assumed in the third quarter of 1994 for the term financing of the North
Shore Square Shopping Mall ($22.8 million principal amount at 8.35%); mortgage
financing completed in the first quarter of 1995 on the Lafayette Square,
Hampton Park, and Pine Bend Apartments ($19.8 million principal amount at
9.47%); and mortgage financing completed in the second quarter of 1995 on the
Lakeview Club Apartments ($16.0 million principal amount at 8.35%); (2) $993,000
of interest expense on bank debt, due to higher average interest rates on
borrowed funds used to finance new acquisitions (average borrowings were
approximately $41.6 million and $14.6 million, with an average interest rate of
8.3% and 6.9%, for the 1995 and 1994 periods, respectively).
Administrative expenses increased $174,000 (20%) in the six months ended
June 30, 1995, as compared to the same period of 1994. The increase is
principally attributable to the same factors described above in the three-month
comparison.
The decrease in net income between 1995 and 1994 is principally
attributable to the same factors described above in the three-month comparison,
and to a lesser degree, was affected by the recognition of an $8,000 (less than
$.01 per share) gain on sale of the Company's investments in marketable
securities in 1994.
9
LIQUIDITY AND CAPITAL RESOURCES
The primary source of working capital for the Company is net cash provided
by operating activities, from which the Company funds normal operating
requirements and distributions to shareholders. In addition, the Company
maintains unsecured credit lines with commercial banks, which it utilizes to
temporarily finance the cost of portfolio growth, property improvements, and
other expenditures.
At the beginning of 1995, the Company had $1.4 million of cash and cash
equivalents and $78 million of bank lines of credit, of which $25 million was
available. During the first six months of 1995, these lines of credit were
increased to $95 million, of which $63.2 million was available as of June 30,
1995.
Net cash flows from operating activities decreased $767,000 in the first
six months of 1995 compared to 1994. The decrease was primarily attributable to
the reduction in net income, offset by increased depreciation expense, as a
result of the factors described in the previous section.
Net cash flows used in investing activities decreased $21.5 million in 1995
from 1994. This decrease is attributable to a reduction in the Company's
property acquisition program during the first six months of 1995 compared to
1994. In January 1995, the Company acquired the Jamestown Estates Apartments in
Pensacola, Florida, at a cost of $4.75 million. During the first six months of
1994 the Company acquired additional land adjoining the Lantana Plaza Shopping
Center and acquired the Lakeview Club Apartments at costs of $1.8 million and
$27.6 million, respectively. The increase in the cost of improvements to real
estate properties during 1995 was attributable to renovation programs at the
Company's Southland Mall Shopping Center and Westward Shopping Center, both of
which were substantially complete as of June 30, 1995.
Net cash flows from financing activities decreased $16.4 million in 1995
from 1994, primarily attributable to a reduction in incremental borrowings
related to the Company's acquisition program as described above. During the
first six months of 1995, the Company mortgaged four of its apartment
properties, three of which were for a combined loan amount of $19.8 million, and
one for a loan amount of $16.0 million, at fixed rates of interest of 9.47% and
8.35%, respectively. Proceeds from the financings were used to pay down
outstanding borrowings from the Company's bank lines of credit and to fund
investing activities and other cash requirements. In connection with these
mortgage financings, and a financing assumed subsequent to the second quarter
of 1994, the Company paid $ 2.1 million in debt issuance costs and mortgage
escrow deposits during 1995. In June, 1995, the Company paid off a mortgage loan
encumbering one of its properties ($293,000 remaining principal balance). In
February, 1995, the Company announced that its board of directors authorized a
program pursuant to which it may repurchase up to an aggregate of $10 million of
its common stock and convertible subordinated debentures. Pursuant to this
program, the Company acquired 193,500 shares of its common stock at a cost of
$1,955,000, during the first six months of 1995.
As of June 30, 1995, eleven of the Company's properties, comprising
approximately 45% of its gross investment in real estate, were subject to a
total of $77.5 million in mortgage debt, all of which bears a fixed rate of
interest for a fixed term. The remainder of the portfolio is available for
additional debt financing, if determined appropriate. The Company anticipates
that its current cash balance, operating cash flows and borrowings (including
borrowings under its lines of credit) will be adequate to fund the Company's
future (i) operating the administrative expenses, (ii) debt service obligations,
(iii) distributions to shareholders, (iv) capital improvements, and (v) normal
repair and maintenance expenses at its properties.
The Company's current dividend policy is to pay quarterly dividends to
shareholders, based upon, among other factors, funds from operations. Because
funds from operations excludes the deduction of non-cash charges, principally
depreciation and non-operating items, quarterly dividends will typically be
greater than net income and may include a tax-deferred return of capital
component. On August 3, 1995, the Company's Board of Directors declared a cash
dividend with respect to the period April 1, 1995 through June 30, 1995, of
$.28 per share, payable to shareholders of record as of August 22, 1995, on
September 5, 1995.
10
FUNDS FROM OPERATIONS
Funds from operations is defined by the Company as net income, excluding
gains (or losses) from sales of property and other non-operating extraordinary
items, plus depreciation, and after adjustments for unconsolidated partnerships
to reflect funds from operations on the same basis. Funds from operations does
not represent cash flows from operations as defined by generally accepted
accounting principles, nor is it indicative that cash flows are adequate to fund
all cash needs. Funds from operations is not to be considered as an alternative
to net income as defined by generally accepted accounting principles or to cash
flows as a measure of liquidity. Real estate industry analysts utilize the
concept of funds from operations as an important measure of a REIT's financial
performance. The Company considers funds from operations in evaluating its
operating results, and its dividend policy is also based, in part, on the
concept of funds from operations.
For the quarter ended June 30, 1995, funds from operations totalled $2.7
million, a decrease of $230,000 (8%), and for the six months ended June 30,
1995, $5.4 million, a decrease of $523,000 (8.9%), over the same respective
periods in 1994. During the first six months of 1995, funds from operations was
affected by several factors, as described above. The operating performance of
the Company's real estate properties experienced overall growth in income from
rental operations, in line with the Company's expectations. However, rising
interest rates, combined with a higher level of borrowings, resulted in
increased interest expense, and a negative impact on 1995 funds from operations.
EFFECTS OF INFLATION
Substantially all of the Company's retail leases contain provisions
designed to provide the Company with a hedge against inflation. Most of the
Company's retail leases contain provisions which enable the Company to receive
percentage rentals based on tenant sales in excess of a stated breakpoint and/or
provide for periodic increases in minimum rent during the lease term. Also, the
majority of the Company's retail leases are for terms of less than ten years,
which allows the Company to adjust rentals to changing market conditions. In
addition, most retail leases require tenants to contribute towards property
operating expenses, thereby reducing the Company's exposure to higher costs
caused by inflation. Apartment leases are written for short terms, generally six
to twelve months.
11
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no pending legal proceedings to which the Company is a party
or to which any of its properties is subject, which in the opinion of
management has resulted or will result in any materially adverse effect
on the financial position of the Company.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
10A Severance Agreement between the Company and Thomas A.
Masilla, Jr., dated June 1, 1995.
10B Non-elective Deferred Compensation Agreement between the
Company and Thomas A. Masilla, Jr., dated June 1, 1995.
27 Financial Data Schedule.
(b) Reports on Form 8-K
None.
12
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.
SIZELER PROPERTY INVESTORS, INC.
-------------------------------------------
(Registrant)
BY: /s/ John J. Gilluly, Jr.
-------------------------------------------
John J. Gilluly, Jr.
Vice President/Treasurer
Principal Financial and
Accounting Officer
Date: August 14, 1995
---------------------
13