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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 15, 2004
ACADIA REALTY TRUST
(Exact name of registrant as specified in its charter)
Maryland 1-12002 23-2715194
(State or other (Commission (I.R.S. Employer
jurisdiction of incorporation) File Number) Identification No.)
1311 Mamaroneck Avenue
Suite 260
White Plains, New York 10605
(Address of principal executive offices) (Zip Code)
(914) 288-8100
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Exhibit Number Description
- ------------------- --------------------------------
99.1 Press release dated March 15, 2004
ITEM 12. Results of Operations and Financial Condition
On March 15, 2004, the Registrant issued a press release in which it announced
an upward revision in its earnings from that previously reported in its press
release of February 17, 2004 with respect to its consolidated financial results
for the quarter and year ended December 31, 2003. A copy of the Registrant's
press release is furnished as Exhibit 99.1 to this report on Form 8-K. The
information contained in Item 12. of this report on Form 8-K, including Exhibit
99.1, shall not be deemed "filed" with the Securities and Exchange Commission
nor incorporated by reference in any registration statement filed by the
Registrant under the Securities Act of 1933, as amended.
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 hereunto duly authorized.
ACADIA REALTY TRUST
(Registrant)
Date: March 15, 2004 By: /s/ Michael Nelsen
-------------------
Name: Michael Nelsen
Title: Sr. Vice President and Chief Financial
Officer
2
Exhibit 99.1
Acadia Realty Trust Upwardly Adjusts Previously Announced 2003 Operating Results
NEW YORK--(BUSINESS WIRE)--March 15, 2004--Acadia Realty Trust
(NYSE:AKR - "Acadia" or the "Company"), a real estate investment trust
("REIT") and owner and operator of shopping centers anchored by
grocery and value-oriented retail, today announced an upward revision
of its previously released operating results for the quarter and year
ended December 31, 2003. All per share amounts in the following
discussion are on a diluted basis.
The Company adopted the fair value method of accounting for stock
options on a prospective basis in accordance with Statement of
Financial Accounting Standards No. 123 ("SFAS 123") effective January
1, 2002. During 2003, in connection with the settlement of certain
vested stock options, the Company made cash payments in an amount
equal to the difference between the option price and the market price
of the Company's shares at the time of settlement. In consultation
with its auditors, the Company recorded such payments as a charge
against earnings of $1.05 million, or $0.03 per share, as reported in
the Company's press release dated February 17, 2004. This charge
resulted in announced (loss) earnings per share of $(0.04) and $0.27
for the quarter and year ended December 31, 2003, respectively, and
funds from operations ("FFO") per share of $0.19 and $0.92 for the
quarter and year ended December 31, 2003, respectively.
Upon further review of the accounting guidance contained in SFAS
123 as it applies to the settlement of options that had originally
been issued under Accounting Principles Board Opinion No. 25, the
Company and its auditors concluded that the earnings charge should
have been limited to the cash paid in excess of the fair value of the
options at the settlement date. Such excess amounted to $300,000. The
amount representing the fair value of the options settled should be
charged directly against shareholders' equity. Accordingly the
original charge recorded by the Company against earnings has been
reduced by $750,000, before minority interest, to reflect the portion
of the settlement charge made directly against shareholders' equity.
As such, the Company is currently announcing revised (loss) earnings
per share of $(0.02) and $0.29 for the quarter and year ended December
31, 2003, respectively, and FFO per share of $0.22 and $0.95 for the
quarter and year ended December 31, 2003, respectively.
This revision has no effect on the Company's assets, liabilities
or aggregate shareholders' equity and minority interest.
The following tables have been revised to reflect the effect of
the above revision and supercede the tables contained in Acadia's
February 17, 2004 press release:
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
For the Quarters and Years ended December 31, 2003 and 2002
(dollars in thousands, except per share data)
STATEMENTS OF INCOME
For the quarters ended For the years ended
December 31, December 31,
Revenues 2003 2002 2003 2002
--------------------------------------------
Minimum rents $12,818 $12,592 $50,168 $48,488
Percentage rents 467 477 1,012 1,079
Expense reimbursements 3,914 3,358 13,539 11,419
Lease termination income -- -- -- 3,945
Other property income 268 83 749 536
Other 684 1,080 3,977 3,880
--------------------------------------------
Total revenues 18,151 17,590 69,445 69,347
--------------------------------------------
Operating expenses
Property operating 4,470 4,061 15,170 12,274
Real estate taxes 2,502 2,166 8,799 8,447
General and
administrative 2,803 2,886 10,734 10,173
Depreciation and
amortization 6,632 3,845 17,909 14,804
Abandoned project costs -- -- -- 274
--------------------------------------------
Total operating
expenses 16,407 12,958 52,612 45,972
--------------------------------------------
Operating income 1,744 4,632 16,833 23,375
Equity in earnings of
unconsolidated
partnerships 634 303 2,411 628
Interest expense (2,818) (2,810) (11,231) (11,017)
Gain on sale -- -- 1,187 1,530
Minority interest (37) (653) (1,347) (2,999)
--------------------------------------------
Income (loss) from
continuing operations (477) 1,472 7,853 11,517
--------------------------------------------
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
For the Quarters and Years ended December 31, 2003 and 2002
(dollars in thousands, except per share data)
STATEMENTS OF INCOME (continued)
For the quarters ended For the years ended
December 31, December 31,
2003 2002 2003 2002
-------------------------------------------
Discontinued operations:
Operating income from
discontinued operations $-- $151 $-- $1,165
Impairment of real estate -- -- -- (197)
Gain on sale of properties -- 6,349 -- 8,132
Minority interest -- (742) -- (1,218)
-------------------------------------------
Income from discontinued
operations -- 5,758 -- 7,882
-------------------------------------------
Net income (loss) $(477) $7,230 $7,853 $19,399
===========================================
Net income (loss) per
Common Share - Basic
Net income (loss) per
Common Share - Continuing
operations $(.02) $.06 $.30 $.46
Net income (loss) per
Common Share -
Discontinued operations -- .23 -- .31
-------------------------------------------
Net income (loss) per
Common Share $(.02) $.29 $.30 $.77
===========================================
Weighted average Common
Shares 27,335 25,174 26,589 25,321
===========================================
Net income (loss) per
Common Share - Diluted (a)
Net income (loss) per
Common Share - Continuing
operations n/a $.06 $.29 $.45
Net income (loss) per
Common Share -
Discontinued operations n/a .22 -- .31
-------------------------------------------
Net income (loss) per
Common Share n/a $.28 $.29 $.76
-------------------------------------------
Weighted average Common
Shares n/a 25,684 27,496 25,806
===========================================
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
For the Quarters and Years ended December 31, 2003 and 2002
(dollars in thousands, except per share data)
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS (b)
For the quarters ended For the years ended
December 31, December 31,
2003 2002 2003 2002
-------------------------------------------
Net income (loss) $(477) $7,230 $7,853 $19,399
Depreciation of real estate
and amortization of
leasing costs:
Wholly owned and
consolidated
partnerships 6,416 3,625 16,957 15,305
Unconsolidated
partnerships 550 183 2,107 662
Income attributable to
minority interest in
Operating Partnership (11) 948 747 2,928
Gain on sale of
properties (b) -- (6,349) -- (8,132)
-------------------------------------------
Funds from operations 6,478 5,637 27,664 30,162
Funds from operations -
Discontinued operations -- (168) -- (2,743)
-------------------------------------------
Funds from operations -
Continuing operations $6,478 $5,469 $27,664 $27,419
===========================================
Funds from operations per
share - Basic
Weighted average Common
Shares and OP Units (c) 28,475 28,420 28,457 28,998
===========================================
Funds from operations per
share - Continuing
operations $.23 $.19 $.97 $.95
Funds from operations per
share - Discontinued
operations -- .01 -- .09
-------------------------------------------
Funds from operations per
share $.23 $.20 $.97 $1.04
===========================================
Funds from operations per
share - Diluted
Weighted average Common
Shares and OP Units (c) 29,692 28,931 29,364 29,483
===========================================
Funds from operations per
share - Continuing
operations $.22 $.19 $.95 $.94
Funds from operations per
share - Discontinued
operations -- .01 -- .09
===========================================
Funds from operations per
share $.22 $.20 $.95 $1.03
===========================================
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
As of December 31, 2003 and 2002
(dollars in thousands, except per share data)
SELECTED BALANCE SHEET INFORMATION
December 31, December 31,
2003 2002
------------------------------
Cash and cash equivalents $14,663 $45,168
Rental property, at cost 427,628 413,878
Total assets 388,184 410,935
Mortgage notes payable 190,444 202,361
Total liabilities 208,765 224,487
Fixed rate debt: (d) 156,433 145,236
% of outstanding debt 82% 72%
Weighted average interest rate 6.6% 6.8%
Variable rate debt $34,011 $57,125
% of outstanding debt 18% 28%
Weighted average interest rate 2.9% 3.3%
Total weighted average interest rate 5.9% 5.8%
Notes:
(a) Reflects the potential impact if certain Preferred OP Units and
Common Share options were converted to Common Shares at the
beginning of the period. Assuming such conversion, net income
would be increased by $36 and $50 for the quarters ended December
31, 2003 and 2002, respectively, and $185 and $199 for the years
then ended.
(b) The Company considers funds from operations ("FFO") as defined by
the National Association of Real Estate Investment Trusts
("NAREIT") to be an appropriate supplemental disclosure of
operating performance for an equity REIT due to its widespread
acceptance and use within the REIT and analyst communities. FFO is
presented to assist investors in analyzing the performance of the
Company. It is helpful as it excludes various items included in
net income that are not indicative of the operating performance,
such as gains (or losses) from sales of property and depreciation
and amortization. However, the Company's method of calculating FFO
may be different from methods used by other REITs and,
accordingly, may not be comparable to such other REITs. FFO does
not represent cash generated from operations as defined by
generally accepted accounting principles ("GAAP") and is not
indicative of cash available to fund all cash needs, including
distributions. It should not be considered as an alternative to
net income for the purpose of evaluating the Company's performance
or to cash flows as a measure of liquidity. Consistent with the
NAREIT definition, the Company defines FFO as net income (computed
in accordance with GAAP), excluding gains (or losses) from sales
of depreciated property, plus depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint
ventures. The Company historically has added back impairments in
real estate in calculating FFO, in accordance with prior NAREIT
guidance. However, NAREIT, based on discussions with the SEC, has
provided revised guidance that provides that impairments should
not be added back to net income in calculating FFO. As such,
historical FFO has been restated consistent with this revised
guidance.
Included in FFO for the years ended December 31, 2003 and 2002 are
gains from the sale of land of $659 and $957, respectively
(amounts are net of minority interests).
(c) In addition to the weighted average Common Shares outstanding for
the period, diluted FFO also assumes full conversion of a weighted
average 1,140 and 3,246 OP Units into Common Shares for the
quarters ended December 31, 2003 and 2002, and 1,868 and 3,677 OP
Units into Common Shares for the years then ended.
(d) Fixed-rate debt includes $86,669 of notional principal fixed
through swap transactions. Conversely, variable-rate debt excludes
this amount.
Acadia Realty Trust, headquartered in White Plains, NY, is a fully
integrated and self-managed real estate investment trust which
specializes in the acquisition, redevelopment and operation of
shopping centers which are anchored by grocery and value-oriented
retail. Acadia currently owns (or has interests in) and operates 62
properties totaling approximately nine million square feet, located
primarily in the Eastern United States.
Certain matters in this press release may constitute
forward-looking statements within the meaning of federal securities
law and as such may involve known and unknown risk, uncertainties and
other factors which may cause the actual results, performances or
achievements of Acadia to be materially different from any future
results, performances or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements speak only
as of the date of this document. Acadia expressly disclaims any
obligation or undertaking to release publicly any updates or revisions
to any forward-looking statements contained herein to reflect any
change in Acadia's expectations with regard thereto or change in
events, conditions or circumstances on which any such statement is
based. The Company also refers you to the documents filed by the
Company, from time to time, with the Securities and Exchange
Commission, including without limitation the Company's Annual Report
on Form 10-K and the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" incorporated by
reference therein, for a discussion of such risks and uncertainties.
The Company considers funds from operations ("FFO") as defined by
the National Association of Real Estate Investment Trusts ("NAREIT")
to be an appropriate supplemental disclosure of operating performance
for an equity REIT due to its widespread acceptance and use within the
REIT and analyst communities. FFO is presented to assist investors in
analyzing the performance of the Company. It is helpful as it excludes
various items included in net income that are not indicative of the
operating performance, such as gains (or losses) from sales of
property and depreciation and amortization. However, the Company's
method of calculating FFO may be different from methods used by other
REITs and, accordingly, may not be comparable to such other REITs. FFO
does not represent cash generated from operations as defined by
generally accepted accounting principles ("GAAP") and is not
indicative of cash available to fund all cash needs, including
distributions. It should not be considered as an alternative to net
income for the purpose of evaluating the Company's performance or to
cash flows as a measure of liquidity. Consistent with the NAREIT
definition, the Company defines FFO as net income (computed in
accordance with GAAP), excluding gains (or losses) from sales of
depreciated property, plus depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures. The
Company historically has added back impairments in real estate in
calculating FFO, in accordance with prior NAREIT guidance. However,
NAREIT, based on discussions with the SEC, has provided revised
guidance that provides that impairments should not be added back to
net income in calculating FFO. As such, historical FFO has been
restated consistent with this revised guidance.
For more information visit Acadia Realty Trust's Web site at
www.acadiarealty.com
CONTACT: Acadia Realty Trust
Jon Grisham, 914-288-8142