UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
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: 1-9496
BNP RESIDENTIAL PROPERTIES, INC.
(Exact name of Registrant as specified in its charter)
Maryland 56-1574675
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
3850 One First Union Center, Charlotte, NC 28202-6032
(Address of principal executive offices) (Zip Code)
704/944-0100
(Registrant's telephone number)
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 ____
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of May 11, 2001 (the latest practicable date).
Common Stock, $.01 par value 5,706,950
(Class) (Number of shares)
Total number of pages: 18
TABLE OF CONTENTS
Item No. Page No.
PART I - Financial Information
1 Financial Statements 3
2 Management's Discussion and Analysis of Financial 9
Condition and Results of Operations
3 Quantitative and Qualitative Disclosures 16
About Market Risk
PART II - Other Information
6 Exhibits and Reports on Form 8-K 17
2
PART I - Financial Information
Item 1. Financial Statements.
BNP RESIDENTIAL PROPERTIES, INC.
-------------------------------------------------------------------------------
Consolidated Balance Sheets
March 31 December 31
2001 2000
------------------ ------------------
(Unaudited)
Assets
Real estate investments at cost:
Apartment properties $219,034,217 $217,818,208
Restaurant properties 39,702,060 39,702,060
------------------ ------------------
258,736,277 257,520,268
Less accumulated depreciation (34,969,870) (32,815,205)
------------------ ------------------
223,766,407 224,705,063
Cash and cash equivalents 1,166,235 1,056,052
Other current assets 2,145,914 1,510,541
Investment in and advances to Management Company - 714,892
Notes receivable 100,000 100,000
Intangible assets, net of accumulated amortization:
Intangible related to acquisition of management operations 1,419,738 1,521,288
Deferred financing costs 1,041,144 1,083,560
------------------ ------------------
Total assets $229,639,438 $230,691,396
================== ==================
Liabilities and Shareholders' Equity
Mortgage and other notes payable $163,560,329 $163,611,737
Accounts payable and accrued expenses 1,666,461 944,248
Escrowed security deposits and deferred revenue 1,190,175 1,183,626
Deferred credit for defeasance of interest,
net of accumulated amortization 625,024 666,688
------------------ ------------------
Total liabilities 167,041,989 166,406,299
Minority interest in Operating Partnership 19,348,383 19,737,035
Shareholders' equity:
Common stock, $.01 par value, 100,000,000 shares
authorized; issued and outstanding shares--
5,706,950 at March 31, 2001
and at December 31, 2000 57,069 57,069
Additional paid-in capital 69,707,155 69,707,155
Dividend distributions in excess of net income (26,515,158) (25,216,162)
------------------ ------------------
Total shareholders' equity 43,249,066 44,548,062
------------------ ------------------
Total liabilities and shareholders' equity $229,639,438 $230,691,396
================== ==================
3
BNP RESIDENTIAL PROPERTIES, INC.
-------------------------------------------------------------------------------
Consolidated Statements of Operations
(Unaudited)
Three months ended
March 31
2001 2000
----------------- ----------------
Revenues
Apartment rental income $7,740,980 $7,274,221
Restaurant rental income 1,029,255 1,053,191
Management fee income 112,717 -
Equity in income of
Management Company - 65,286
Interest and other income 74,318 87,791
----------------- ----------------
8,957,270 8,480,489
Expenses
Apartment operations 2,572,591 2,280,668
Apartment administration 215,220 213,000
Corporate administration 523,906 427,743
Depreciation 1,906,638 1,769,481
Amortization of intangibles 144,758 144,804
Interest 2,983,330 2,746,718
----------------- ----------------
8,346,443 7,582,414
----------------- ----------------
Income before
minority interest 610,827 898,075
Minority interest in
Operating Partnership 140,668 207,286
----------------- ----------------
Net income $ 470,159 $ 690,789
================= ================
Per share data:
Basic earnings per share $0.08 $0.12
================= ================
Diluted earnings per share $0.08 $0.12
================= ================
Dividends declared $0.31 $0.31
================= ================
Weighted average shares
outstanding 5,706,950 5,709,408
================= ================
4
BNP RESIDENTIAL PROPERTIES, INC.
-------------------------------------------------------------------------------
Consolidated Statement of Shareholders' Equity
(Unaudited)
Dividends
Additional Distributed
Common Stock paid-in in excess of
Shares Amount capital net income Total
------------ ----------- --------------- --------------- ---------------
Balance at December 31, 2000 5,706,950 $57,069 $69,707,155 $(25,216,162) $44,548,062
Dividends paid ($0.31) - - - (1,769,155) (1,769,155)
Net income - - - 470,159 470,159
------------ ----------- --------------- --------------- ---------------
Balance at March 31, 2001 5,706,950 $57,069 $69,707,155 $(26,515,158) $43,249,066
============ =========== =============== =============== ===============
5
BNP RESIDENTIAL PROPERTIES, INC.
-------------------------------------------------------------------------------
Consolidated Statements of Cash Flows
(Unaudited)
Three months ended
March 31
2001 2000
----------------- ----------------
Operating activities:
Net income $ 470,159 $ 690,789
Adjustments to reconcile net income to
net cash provided by operations:
Minority interest in Operating Partnership 140,668 207,286
Equity in income of Management Company - (65,286)
Depreciation and amortization of intangibles 2,051,396 1,914,285
Amortization of defeasance credit (41,664) (41,664)
Changes in operating assets and liabilities:
Other current assets (608,501) (210,568)
Accounts payable and accrued expenses 695,118 600,885
Security deposits and deferred revenue 2,919 (42,374)
----------------- ----------------
Net cash provided by operating activities 2,710,095 3,053,353
Investing activities:
Additions to apartment properties (622,176) (462,540)
Investment in/advances to
Management Company 372,939 -
Reduction in notes receivable - 625,000
----------------- ----------------
Net cash (used in) provided by
investing activities (249,237) 162,460
Financing activities:
Redemption of Operating Partnership
minority units - (52,214)
Repurchase of common stock - (254,750)
Distributions to Operating Partnership
minority unitholders (529,320) (511,310)
Dividends paid to common shareholders (1,769,155) (1,769,155)
Proceeds from notes payable 39,611 500,000
Principal payments on notes payable (91,019) (706,259)
(Payment) refund of deferred financing costs (792) 748
----------------- ----------------
Net cash used in financing activities (2,350,675) (2,792,940)
----------------- ----------------
Net increase in cash and cash equivalents 110,183 422,873
Cash and cash equivalents at
beginning of period 1,056,052 431,531
----------------- ----------------
Cash and cash equivalents at end of period $ 1,166,235 $ 854,404
================= ================
6
BNP RESIDENTIAL PROPERTIES, INC.
-------------------------------------------------------------------------------
Notes to Consolidated Financial Statements - March 31, 2001
(Unaudited)
Note 1. Interim financial statements
Our independent accountants have not audited the accompanying financial
statements of BNP Residential Properties, Inc., except for the balance sheet at
December 31, 2000. We derived the amounts in the balance sheet at December 31,
2000, from the financial statements included in our 2000 Annual Report on Form
10-K. We believe that we have included all adjustments (consisting of normal
recurring accruals) necessary for a fair presentation of the financial position
and results of operations for the periods presented.
We have condensed or omitted certain notes and other information from the
interim financial statements presented in this Quarterly Report on Form 10-Q.
You should read these financial statements in conjunction with our 2000 Annual
Report on Form 10-K.
We have reclassified amounts for apartment operations expense and administrative
expense in the 2000 financial statements to conform to our 2001 presentation of
these amounts.
Note 2. Basis of Presentation
The consolidated financial statements include the accounts of BNP Residential
Properties, Inc. (the "company"), and BNP Residential Properties Limited
Partnership (the "Operating Partnership"). The company is the general partner
and owns a majority interest in the Operating Partnership. All significant
intercompany balances and transactions have been eliminated in the consolidated
financial statements.
Effective January 2001, the consolidated financial statements include the
accounts of BNP Management, Inc. (the "Management Company"). Prior to January
2001, the Operating Partnership had a 1% voting interest and 95% economic
interest in the Management Company, and used the equity method to account for
this investment. In January 2001, the Operating Partnership acquired the
outstanding 99% voting interest and 5% economic interest in the Management
Company for approximately $16,000.
The impact of this change in basis of presentation on the balance sheet was to
increase cash by approximately $373,000 and net apartment properties equipment
by approximately $346,000, and to eliminate approximately $715,000 investment in
and advances to the Management Company previously reflected in our balance
sheets.
In addition, we now reflect our third-party management operations, including
management fee income and related administration expenses, directly in our
statements of operations rather than reporting equity in the net income of the
Management Company.
We do not expect this change in basis of presentation to have a significant
impact on our financial position, operating results or cash flows.
7
Note 3. Shareholders' Equity
We calculated basic and diluted earnings per share using the following amounts:
Three months ended
March 31
2001 2000
----------------- ----------------
Numerators:
Numerator for basic earnings
per share - net income $470,159 $690,789
Add minority interest in
Operating Partnership (1) 140,668 207,286
----------------- ----------------
Numerator for diluted earnings
per share - net income
before minority interest (1) $610,827 $898,075
================= ================
Denominators:
Denominator for basic
earnings per share -
weighted average shares
outstanding 5,706,950 5,709,408
Effect of dilutive securities:
Convertible Operating
Partnership units 1,707,480 1,713,386
Stock options (2) - -
----------------- ----------------
Denominator for diluted
earnings per share - adjusted
weighted average shares and
assumed conversions 7,414,430 7,422,794
================= ================
(1) Assumes conversion of Operating Partnership units to common shares.
(2) We excluded 140,000 options granted in 1994 (exercise price $12.50),
110,000 options granted in 1997 (exercise price $12.25), 180,000 options
granted in 1998 (exercise price $13.125 and $11.25), and 47,500 options
granted in February 2000 (exercise price $9.25) from the above calculations
because all outstanding options were antidilutive for these periods.
Note 3. Subsequent events
On April 19, 2001, we declared a regular quarterly cash dividend of $0.31 per
share, which we will pay on May 15, 2001, to shareholders of record on May 1,
2001.
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion contains forward-looking statements within the
meaning of federal securities law. You can identify such statements by the use
of forward-looking terminology, such as "may," "will," "expect," "anticipate,"
"estimate," "continue" or other similar words. These statements discuss future
expectations, contain projections of results of operations or of financial
condition or state other "forward-looking" information.
Although we believe that our plans, intentions, and expectations reflected in or
suggested by these forward-looking statements are reasonable, we cannot assure
you that we will achieve our plans, intentions or expectations. When you
consider such forward-looking statements, you should keep in mind the following
important factors that could cause our actual results to differ materially from
those contained in any forward-looking statement:
o our markets could suffer unexpected increases in the development of
apartment, other rental, or competitive housing alternatives;
o general economic conditions could cause the financial condition of a
large number of our tenants to deteriorate;
o we may not be able to complete development, acquisition or joint venture
projects as quickly or on as favorable terms as anticipated;
o we may not be able to lease or re-lease apartments quickly or on as
favorable terms as under existing leases;
o we may have incorrectly assessed the environmental condition of our
properties;
o an unexpected increase in interest rates could increase our debt
service costs;
o we may not be able to meet our long term liquidity requirements on
favorable terms;
o we could lose key executive officers; and
o our concentrated markets may suffer an unexpected decline in economic
growth or increase in unemployment rates.
Given these uncertainties, we caution you not to place undue reliance
on forward-looking statements. We undertake no obligation to publicly release
the results of any revision to these forward-looking statements that may be made
to reflect any future events or circumstances or to reflect the occurrence of
unanticipated events.
You should read the discussion in conjunction with the financial
statements and notes thereto included in this Quarterly Report and our Annual
Report on Form 10-K.
Company Profile
BNP Residential Properties, Inc., is a self-administered and self-managed
real estate investment trust that owns and operates apartment communities in
North Carolina and Virginia.
9
We currently own and operate 15 apartment communities containing 3,681 units and
have the right to acquire one additional apartment community containing 108
units. We also own 42 restaurant properties, which we lease to a third party
under a master lease on a triple-net basis. In addition, we manage three other
apartment communities for a third-party owner.
We are structured as an UpREIT, or umbrella partnership real estate
investment trust. The company is the sole general partner and owns a controlling
interest in BNP Residential Properties Limited Partnership, through which we
conduct all of our operations. We refer to this partnership as the Operating
Partnership. We refer to the limited partners of the Operating Partnership as
minority unitholders or as the minority interest.
Our executive offices are located at 3850 One First Union Center,
Charlotte, North Carolina 28202-6032, telephone 704/944-0100.
Results of Operations
Revenues
Total revenues for the first quarter of 2001 were $9.0 million, an
increase of 5.6% compared to the first quarter of 2000. Our primary source of
revenue is apartment rental income, which generated approximately 86.4% of our
total revenues in the first quarter of 2001, compared to 85.8% in the first
quarter of 2000.
Apartment rental income totaled $7.7 million in the first quarter of 2001,
an increase of 6.4% compared to the first quarter of 2000. This increase is
primarily attributable to $458,000 of rental income at Oak Hollow Apartments
Phase 2, which we acquired in December 2000.
For the first quarter of 2001, overall average economic occupancy declined
by 1.2%, while average revenue per occupied unit increased by 1.0%, compared to
the first quarter of 2000. On a same units basis (those units that we owned
throughout the first quarters of both years), average economic occupancy
declined by 0.9%, while average monthly revenue per occupied unit increased by
1.3%.
Summary amounts for our apartment communities' occupancy and revenue per
occupied unit for the first quarter of 2001 follow:
Three months ended March 31
-----------------------------------
Average
monthly
Number revenue
of Average Average per
apartment physical economic occupied
units occupancy occupancy unit
-----------------------------------------------
Abbington Place 360 95.7% 96.8% $763
Allerton Place 228 94.4% 95.0% 778
Chason Ridge 252 94.9% 95.9% 672
Harris Hill 184 95.5% 97.6% 714
Latitudes 448 96.3% 97.5% 759
Madison Hall 128 94.1% 95.5% 608
Oakbrook 162 94.8% 95.5% 772
Oak Hollow 221 93.5% 94.7% 740
Oak Hollow Ph2* 240 89.9% 90.1% 707
10
Three months ended March 31
-----------------------------------
Average
monthly
Number revenue
of Average Average per
apartment physical economic occupied
units occupancy occupancy unit
-----------------------------------------------
Paces Commons 336 91.9% 92.8% 702
Paces Village 198 90.7% 91.4% 680
Pepperstone 108 98.9% 99.8% 682
Savannah Place 172 92.3% 94.0% 698
Summerlyn Place 140 90.5% 92.1% 788
Waterford Place 240 94.1% 95.1% 851
Woods Edge 264 97.3% 98.1% 766
All apartments 3,681
- 2001 94.2% 95.2% 736
- 2000 95.7% 96.4% 729
Same units 3,440
- 2001 94.5% 95.5% 738
- 2000 95.7% 96.4% 729
*acquired December 2000
Apartment rental income was consistent with our expectations in the first
quarter of 2001. We do not expect any significant improvement in our apartment
markets in 2001. In light of this, we will continue to emphasize occupancy as a
means of maximizing cash flow from our apartment communities. We will also
strive to maintain our competitive position by keeping the apartment communities
in an excellent state of repair and by making selective improvements. We believe
that we have good properties in excellent locations, and that we are well
positioned to compete effectively in our markets.
Restaurant rental income was $1.0 million in the first quarter of 2001, a
2.3% decrease compared to the first quarter of 2000. The decrease in restaurant
rental income is due to the sale of one restaurant property in June 2000. As of
March 31, 2001, we had sold four of the original 47 restaurants to Boddie-Noell
Enterprises, Inc. ("Enterprises"), the lessee, under the non-economic clause of
an agreement that allows Enterprises to close up to seven restaurants and buy
them back for no less than net carrying value. In January 2001, Enterprises
notified us of its intention to close and buy back one additional restaurant;
this sale was completed on April 30, 2001.
Restaurant rental income in the first quarters of both 2001 and 2000 was
the minimum rent specified in the lease agreement. Under our master lease with
Enterprises, restaurant rental income payments are the greater of a specified
minimum rent or 9.875% of food sales. The minimum rent is reduced by
approximately $8,000 per month, or $96,000 per year, for each restaurant that is
sold.
"Same store" sales (for the 42 restaurants that were open throughout the
first quarter of both 2001 and 2000) declined by 6.9% in 2001 compared to 2000.
Sales at these restaurants would have to increase by approximately 19% before we
would receive rent exceeding the minimum rent.
11
As we discussed in the notes to our financial statements, effective
January 1, 2001, we acquired the minority 5% economic interest and 99% voting
interest in BNP Management, Inc. (the "Management Company"). We now include the
revenues and expenses of our third-party management activities in our
consolidated revenue and expense amounts. Management fee income totaled $113,000
in the first quarter of 2001, while equity income from the Management Company
was $65,000 in the first quarter of 2000. If these activities had been reflected
on a comparable basis in our 2000 financial statements, management fee income
for the first quarter of 2000 would have been approximately $113,000.
Expenses
Total expenses for the first quarter of 2001 were $8.3 million, an
increase of 10.1% compared to the first quarter of 2000.
Apartment operations expense for the first quarter of 2001 totaled $2.6
million, an increase of 12.8% compared to the first quarter of 2000.
Approximately $157,000 of this increase is attributable to the addition of Oak
Hollow Apartments Phase 2, while the remaining $135,000 increase reflects higher
costs for on-site compensation, property taxes and insurance.
Apartment operations expense includes only direct costs of on-site
operations. Apartment operations expense represented 33.2% of related apartment
rental income in the first quarter of 2001, compared to 31.4% in the first
quarter of 2000.
Operating expenses for restaurant properties are insignificant because the
triple-net lease arrangement requires the lessee to pay virtually all of the
expenses associated with the restaurant properties.
We are now able to identify and compare apartment administration expenses
for 2001 and 2000. These costs include our property management activities as
well as accounting and support activities directly related to apartment
management, and were previously included in our line item for administrative
expenses. Apartment administration expense totaled $215,000 for the first
quarter of 2001, an increase of 1.0% compared to the first quarter of 2000.
Corporate administration expense totaled $524,000 in the first quarter of
2001, a 22.5% increase compared to the first quarter of 2000. The $96,000
increase is primarily attributable to earlier completion and payment for audit
and tax return preparation services. In addition, we now include the revenues
and expenses of our third-party management activities in our consolidated
revenue and expense amounts. If these activities had been reflected on a
consolidated basis in our 2000 financial statements, administrative expenses
would have been approximately $48,000 higher in the first quarter of 2000.
Depreciation expense totaled $1.9 million in the first quarter of 2001, a
7.8% increase compared to the first quarter of 2000. This increase is
attributable to the addition of Oak Hollow Apartments Phase 2 as well as the
impact of additions and replacements at other apartment communities.
Amortization expense was essentially the same for the first quarters of 2001 and
2000.
Interest expense was $3.0 million in the first quarter of 2001, an
increase of 8.6% compared to the first quarter of 2000. This increase is
attributable to the $12.8 million increase in long-term
12
debt between the first quarter of 2000 and the first quarter of 2001. Overall,
weighted average interest rates were 7.3% in both the first quarter of 2001 and
2000.
Net income
Net income available to common shareholders in the first quarter of 2001
was $470,000, a decrease of 31.9% compared to the first quarter of 2000. This
decline reflects the impact of increased interest expense as well as increased
non-cash charges for depreciation and amortization. Operating Partnership
earnings before interest, depreciation and amortization increased by 1.6% for
the first quarter of 2001 compared to the first quarter of 2000.
Funds from Operations
Funds from operations is defined by the National Association of Real
Estate Investment Trusts ("NAREIT") as "net income (computed in accordance with
generally accepted accounting principles), excluding gains (losses) from sales
of property, plus depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures."
We calculate funds available for distribution as funds from operations
plus non-cash expense for amortization of loan costs, less recurring capital
expenditures.
We consider funds from operations and funds available for distribution to
be useful in evaluating potential property acquisitions and measuring the
operating performance of an equity REIT. We believe that, together with net
income and cash flows, funds from operations and funds available for
distribution provide investors with additional measures to evaluate the ability
of the REIT to incur and service debt and to fund acquisitions and other capital
expenditures. Funds from operations and funds available for distribution do not
represent net income or cash flows from operations as defined by generally
accepted accounting principles. You should not consider funds from operations or
funds available for distribution:
o to be alternatives to net income as reliable measures of our
operating performance, or
o to be alternatives to cash flows as measures of liquidity.
Funds from operations and funds available for distribution do not measure
whether cash flow is sufficient to fund all of our cash needs, including
principal amortization, capital improvements and distributions to shareholders.
Funds from operations and funds available for distribution do not represent cash
flows from operating, investing or financing activities as defined by generally
accepted accounting principles. Further, funds from operations and funds
available for distribution as disclosed by other REITs might not be comparable
to our calculation of funds from operations or funds available for distribution.
Funds from operations of the Operating Partnership declined by 5.4% for
the first quarter of 2001 compared to the first quarter of 2000. This decline
reflects the impact of the increase in interest expense.
13
We calculated funds from operations of the Operating Partnership as
follows (all amounts in thousands):
Three months ended
March 31
2001 2000
--------------- ---------------
Income before minority interest $ 611 $ 898
Depreciation 1,907 1,769
Amortization of
management intangible 102 102
--------------- ---------------
Funds from operations -
Operating Partnership $2,619 $2,769
=============== ===============
A reconciliation of funds from operations to funds available for
distribution follows (all amounts in thousands):
Three months ended
March 31
2001 2000
-------------- ---------------
Funds from operations -
Operating Partnership $2,619 $2,769
Amortization of loan costs 43 43
Recurring capital expenditures (251) (160)
-------------- ---------------
Funds available for distribution $2,412 $2,652
============== ===============
A further reconciliation of funds from operations of the Operating
Partnership to basic funds from operations available to common shareholders
follows (all amounts in thousands):
Three months ended
March 31
2001 2000
--------------- ---------------
Funds from operations -
Operating Partnership $2,619 $2,769
Minority interest in
funds from operations (603) (639)
--------------- ---------------
Basic funds from operations
available to common shareholders $2,016 $2,130
=============== ===============
14
Other information about our historical cash flows follows (all amounts in
thousands):
Three months ended
March 31
2001 2000
--------------- ---------------
Net cash provided by (used in):
Operating activities $ 2,710 $ 3,053
Investing activities (249) 162
Financing activities (2,351) (2,793)
Dividends and distributions paid to:
Shareholders $ 1,769 $ 1,769
Minority unitholders in
Operating Partnership 529 511
Scheduled debt principal payments $ 91 $ 81
Non-recurring capital expenditures 371 303
Weighted average common
shares outstanding 5,707 5,709
Weighted average Operating
Partnership minority units
outstanding 1,707 1,713
Capital Resources and Liquidity
Capital Resources
At March 31, 2001, total long-term debt was $163.6 million, including
$116.3 million of notes payable at fixed interest rates ranging from 6.345% to
8.55%, and $47.3 million at variable rates indexed on 30-day LIBOR rates.
Approximately $1 million additional borrowings are available under our line of
credit arrangements.
The weighted average interest rate on debt outstanding at March 31, 2001,
was 7.1%, compared to 7.5% at December 31, 2000, and 7.3% at March 31, 2000. A
1% fluctuation in variable interest rates would increase or decrease our annual
interest expense by approximately $480,000.
Cash flows and liquidity
As we discussed in the notes to our financial statements, effective
January 1, 2001, we acquired the minority 5% economic interest and 99% voting
interest in BNP Management, Inc. (the "Management Company"). We now include the
assets and liabilities related to our third-party management operations in our
consolidated balance sheet. The effect of this transaction and change in basis
of presentation was to increase cash by approximately $373,000 and net apartment
properties equipment by approximately $346,000.
Net cash flows from operating activities for the first quarter of 2001
were $2.7 million, a decrease of 11.2% compared to the first quarter of 2000.
Investing and financing activities
15
focused on capital expenditures at apartment communities, along with payments of
dividends and distributions.
To date we have produced sufficient cash flow to fund our regular
dividend. We have announced that the company will pay a regular quarterly
dividend of $0.31 per share on May 15, 2001, to shareholders of record on May 1,
2001.
We capitalize our expenditures to acquire new assets, to materially
enhance the value of existing assets, or to substantially extend the useful life
of existing assets. We record all floor covering, appliance, and HVAC
replacements, as well as major capital maintenance projects, as capital
expenditures.
We generally expect to meet our short-term liquidity requirements through
net cash provided by operations and utilization of credit facilities. We believe
that net cash provided by operations is, and will continue to be, adequate to
meet the REIT operating requirements in both the short term and the long term.
We anticipate funding our future acquisition activities primarily by using
short-term credit facilities as an interim measure, to be replaced by funds from
equity offerings, long-term debt, or joint venture investments. We expect to
meet our long-term liquidity requirements, such as scheduled debt maturities and
repayment of short-term financing of possible property acquisitions, through
long-term secured and unsecured borrowings and the issuance of debt securities
or additional equity securities. We believe we have sufficient resources to meet
our short-term liquidity requirements.
We do not believe that inflation poses a material risk to the company. The
leases at our apartment properties are short term in nature; none are longer
than two years. The restaurant properties are leased on a triple-net basis,
which places the risk of rising operating and maintenance costs on the lessee.
Recently Issued Accounting Standards
We adopted Financial Accounting Standards Board Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities, as amended by
Statements No. 137 and No. 138, effective January 2001. This Statement requires
the recognition of all derivatives on our consolidated balance sheet at fair
value. This adoption had no impact on our results of operations or financial
position.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in information that would be provided
under Item 305 of Regulation S-K since December 31, 2000. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Capital Resources and Liquidity" above.
16
PART II - Other Information
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits:
None
b) Reports on Form 8-K:
None
17
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.
BNP RESIDENTIAL PROPERTIES, INC.
(Registrant)
May 14, 2001 /s/ Philip S. Payne
Philip S. Payne
Executive Vice President and
Chief Financial Officer
(Duly authorized officer)
May 14, 2001 /s/ Pamela B. Bruno
Pamela B. Bruno
Vice President, Controller and
Chief Accounting Officer
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