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, 1996. Commission File Number 0-9231
ALASKA NORTHWEST PROPERTIES INC.
(Exact name of registrant as specified in its charter)
ALASKA 92-0035034
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.)
23830 PACIFIC HIGHWAY S., SUITE 300 #3, SEATTLE, WA 98032
(Address of principal executive offices)
Registrant's telephone number, including area code: (206) 433-0730
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 company had 29,675 common shares, par value $1.00, outstanding at June 30,
1996.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Attached are the following Alaska Northwest Properties Inc.(ANPI) unaudited
financial statements: (1) Balance sheet as of June 30, 1996 and December 31,
1995; (2) Statements of operations for the three months ended June 30, 1996
and 1995; (3) Statements of operations for the six months ended June 30,
1996 and 1995; (4) Statements of shareholders' equity for the six months
ended June 30, 1996; and (5) Statements of cash flows for the six months
ended June 30, 1996 and 1995.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FINANCIAL CONDITION
In the second quarter of 1996, payments commenced under a mortgage reduction
agreement reached in the first quarter on a 9% note receivable, as discussed
below. To date, all payment have been received in a timely manner.
In the first quarter, the Company reached an agreement with a debtor on an
allocation of insurance proceeds totaling $337,667, received when one of
three apartment buildings, securing a 9% note receivable, was destroyed in a
fire in Fairbanks, Alaska. Under an agreement dated February 23, 1996, the
debtor applied $262,667 to the mortgage on the note receivable, while
retaining the remaining $75,000 for improvements to the remaining collateral.
In addition, the Company agreed to release the portion of the collateral
that was damaged to the debtor and reduce the related monthly payment from
$5,800 to $3,365. During 1995, the debtor received an initial insurance
disbursement of $50,000 and applied half of the proceeds to the mortgage, as
required by the Company. As a result of continued additional investment on
the part of the debtor, to whom the Company sold the property in 1993, the
Company recognized the remaining deferred gain of $260,731, under the full
accrual method of accounting for real estate sales in accordance with FAS 66.
Also in the first quarter, the Company decided that it was not in its best
interest to disburse dividends in 1996.
RESULTS OF OPERATIONS
For the quarter ended June 30, 1996, a net loss of $180,921 was recognized by
the Company, as compared to a net loss of $176,219 for the same period in 1995.
There were no real estate sales in the second quarter of 1996 and 1995,
respectively.
For the three months ended June 30, 1996, total revenues, including interest
income from notes and securities, remained consistent with the same period of
1995. However, the slight difference is a result of timing differences on
certain payments received between the first and second quarters of 1996 and
1995, respectively. Cost and Expenses for the quarter ended June 30, 1996,
including interest expense, decreased approximately $35,000 compared with the
same quarter in 1995. This is primarily due to a decrease in depreciation and
personnel expenses.
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LIQUIDITY AND CAPITAL RESOURCES
Management anticipates that the current level of available liquidity is
adequate to satisfy its known future working capital and capital expenditure
requirements. The Company has no commitments other than normal operating
costs which would require the use of capital resources. The Company met its
liquidity requirements from investing, financing, and operating activities as
of June 30, 1996, as outlined below:
OPERATIONS: As presented in more detail in the accompanying statement of cash
flows, approximated cash used in operating activities was $27,000. The Company
has incurred a net loss of $65,000 in 1996, which included non-cash charges for
depreciation of $50,000, realized and unrealized investment losses of $178,000
and non-cash gain recognition on real estate sales of $260,000.
INVESTING: Net cash provided by investing activities have totaled $52,000.
Cash was paid from the purchase and sale of other assets in the amount of
$170,000, which includes the net difference in the purchase and sale of futures
and futures options contracts. Other uses of investment cash include $73,000
from the purchase of Government Securities, net of maturities.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) No exhibits have been filed herewith.
(b) No Form 8-K reports were filed during the second quarter of 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
ALASKA NORTHWEST PROPERTIES INC.
(REGISTRANT)
Date: August 12, 1996 /s/ Michael W. Shimasaki
------------------------
Michael W. Shimasaki
President and Treasurer, Director and
Principal Financial Officer
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ALASKA NORTHWEST PROPERTIES INC.
BALANCE SHEETS (UNAUDITED)
(amounts in thousands except # of shares)
ASSETS 6/30/96 12/31/95
- -------------------------------------------------------------------------------
OPERATING PROPERTY AND EQUIPMENT, at cost:
Land and land improvements $ 393 $ 393
Buildings 1,318 1,318
Furniture, fixtures and equipment 197 195
Leasehold costs and other 218 218
-------- --------
2,126 2,124
Less accumulated depreciation and amortization (1,346) (1,311)
-------- --------
780 813
LAND HELD FOR INVESTMENT, at cost
(net of accumulated depreciation of $539
and $523, respectively) 6,999 7,015
NOTES RECEIVABLE (net of deferred
gain of $0 and $247, respectively) 1,320 1,368
CASH AND CASH EQUIVALENTS 259 148
RESTRICTED CASH 76 88
U.S. GOVERNMENT SECURITIES, at cost 290 218
OTHER ASSETS 100 104
-------- --------
TOTAL ASSETS $ 9,824 $ 9,754
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
- -------------------------------------------------------------------------------
NOTES PAYABLE 86 112
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 98 58
LIABILITY FOR UNSETTLED FUTURES AND
OPTIONS CONTRACTS 212 203
-------- --------
TOTAL LIABILITIES 396 373
SHAREHOLDERS' EQUITY:
Common stock $1.00 par value, authorized
50,000 shares, issued 47,641 476 476
Capital in excess of par value 14,756 14,756
Treasury stock, at cost
(1996 - 17,966; 1995 - 18,554 shares) (4,893) (5,005)
Retained deficit (911) (846)
-------- --------
TOTAL SHAREHOLDERS' EQUITY 9,428 9,381
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 9,824 $ 9,754
======== ========
The accompanying notes are an integral part of these financial statements.
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ALASKA NORTHWEST PROPERTIES INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995
(amounts in thousands except # of shares and per share data) 1996 1995
------- ------
REVENUES
Interest Income $32 $28
Building and Land Rents 52 58
Other Income 2 1
------- ------
86 87
EXPENSES
Operating Expenses 79 92
General & Adminstrative Expenses 58 80
Interest Expense 1 1
------- ------
138 173
OTHER INCOME (EXPENSE)
Gain on sale of real estate 0 25
Gain (loss) on sale of investments (62) 5
Decrease in unrealized depreciation
on investments (67) (120)
------- ------
(129) (90)
------- ------
NET LOSS $(181) $(176)
======= ======
AVERAGE SHARES OUTSTANDING 29,381 29,092
======= ======
NET LOSS PER COMMON SHARE: $(6.16) $(6.05)
======= ======
The accompanying notes are an integral part of these financial statements.
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ALASKA NORTHWEST PROPERTIES INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(amounts in thousands except # of shares and per share data) 1996 1995
------- ------
REVENUES
Interest Income $53 $51
Building and Land Rents 95 106
Other Income 2 5
------- -------
150 162
EXPENSES
Operating Expenses 167 188
General & Adminstrative Expenses 128 139
Interest Expense 2 3
------- -------
297 330
OTHER INCOME (EXPENSE)
Gain on sale of real estate 260 42
Loss on sale of investments (263) (12)
Increase (decrease) in unrealized appreciation
(depreciation) on investments 85 (144)
------- -------
82 (114)
------- -------
LOSS FROM OPERATIONS BEFORE INCOME TAXES (65) (282)
PROVISION FOR INCOME TAXES 0 0
------- -------
NET LOSS $(65) $(282)
======= =======
AVERAGE SHARES OUTSTANDING 29,381 29,092
NET LOSS PER COMMON SHARE: $(2.21) $(9.69)
======= =======
The accompanying notes are an integral part of these financial statements.
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ALASKA NORTHWEST PROPERTIES INC.
STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1996
Common Stock
-----------------------------------
Capital in
$1.00 Par Excess of Treasury Retained
(amounts in thousands) Value Par Value Stock Deficit
- --------------------- --------- --------------- ---------- ----------
BALANCES AT
DECEMBER 31, 1995 $476 $14,756 $(5,005) $(846)
Net loss (65)
Treasury shares:
Purchased (2)
Sold 114
--------- --------------- ---------- ---------
BALANCES AT
JUNE 30, 1996 $476 $14,756 $(4,893) $(911)
======== =============== ========== =========
The accompanying notes are an integral part of these financial statements.
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ALASKA NORTHWEST PROPERTIES INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(amounts in thousands) Net increase (decrease) in cash
1996 1995
--------------- -------------
Cash flows from operating activites:
Net loss $(65) $(282)
Adjustments to reconcile net loss to cash
used in operating activities:
Depreciation and amortization 50 75
Gain on sale of real estate (260) (42)
Loss on sale of investments 263 12
Increase (decrease) in unrealized depreciation
(appreciation) on investments (85) 144
Increase in accounts payable 40 23
Other 30 30
--------- ---------
Net cash used in operating activites $(27) $(40)
--------- ---------
Cash flows from investing activities:
Proceeds from disposal of assets 0 15
Collection of notes receivable 296 44
Maturing U.S. Government securities 218 170
Acquisition of U.S. Government securities (291) (217)
Addition to property and equipment (1) (43)
Sale of land held for investment 0 36
(Purchase) Sale of other assets (170) 161
--------- ---------
Net cash provided by investing activities $52 $166
--------- ---------
Cash flows from financing activities:
Treasury stock sales and purchases 111 43
Decrease in long term debt (25) (30)
Unclaimed dividends 0 2
Net cash provided by financing activities $86 $15
--------- ---------
Net increase in cash and cash equivalents 111 141
Cash and cash equivalents:
Beginning of period 148 111
--------- ---------
End of period $259 $252
========= =========
The accompanying notes are an integral part of these financial statements.
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ALASKA NORTHWEST PROPERTIES INC.
NOTES TO FINANCIAL STATEMENTS
1. The 1995 Annual Report on Form 10-K of the Company includes a summary of
significant accounting policies and should be read in conjunction with this
Form 10-Q. The financial statements presented herein include all adjustments
which are, in the opinion of management, necessary to present fairly the
operating results for the interim periods reported. The results of
operations for the three months ended June 30, 1996 and 1995, are not
necessarily indicative of the results of operations for the entire year. The
financial statements for the three months ended June 30, 1996 and 1995, are
unaudited, condensed and do not contain all information required by generally
accepted accounting principles to be included in a full set of annual
financial statements. Certain reclassification's have been made to prior
year's financial statements to conform to the current format.
2. The Company reached an agreement with a debtor on an allocation of
insurance proceeds totaling $337,667, received when one of three apartment
buildings, securing a 9% note receivable, was destroyed in a fire in
Fairbanks, Alaska. The debtor received an initial insurance disbursement of
$50,000 and applied half of the proceeds to the mortgage, as required by the
Company, in an agreement dated September 8, 1995. Under the agreement dated
February 23, 1996, the debtor applied $262,667 to the mortgage on the note
receivable, while retaining the remaining $75,000 for improvements to the
remaining collateral. As a result of continued additional investment on the
part of the debtor, to whom the Company sold the property in 1993, the
Company recognized a real estate gain of $260,731, including $13,290 in
deferred interest income in the first quarter, under the full accrual method
of accounting for real estate sales in accordance with FAS 66.
3. The Company's futures and futures options contracts are relatively
short-term, generally 6 months to less than 2 years. At June 30, 1996,
notional (or contract) amounts of unsettled futures and futures options
contracts approximated $950,000 and $1,000,000, relating to precious metals
and stock index derivatives, respectively. The notional amounts do not
represent amounts exchanged, and thus, are not a measure of the Company's
exposure through its use of such financial instruments. The Company realized
a loss of approximately $62,000 from the termination of futures and futures
options contracts for the second quarters of 1996, compared to a realized
gain of approximately $5,000 for the same period in 1995. At June 30, 1996,
an increase in the unrealized appreciation on investments, primarily futures
and futures options, was approximately $85,000, compared to an increase in
the unrealized depreciation of approximately $144,000 at June 30, 1995. The
liability for unsettled futures and options contracts approximated $212,000
and $203,000 at June 30, 1996, and December 31, 1995, respectively.
4. Earnings per share are computed using the weighted-average number of
common shares outstanding.
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