UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
| þ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended September 30, 2003.
| o | 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 1-31717
MAGUIRE PROPERTIES, INC.
| Maryland (State or other jurisdiction of Incorporation or organization) |
04-3692625 (IRS employer identification number) |
|
| 555 West Fifth Street, Suite 5000, Los Angeles, CA (Address of principal executive offices) |
90013-1010 Zip Code |
| Registrant’s telephone number, including area code | (213) 626-3300 | |
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
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes No X
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class Common Stock, $.01 par value per share |
Outstanding at November 3, 2003 42,645,711 |
MAGUIRE PROPERTIES, INC.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2003
TABLE OF CONTENTS
| PAGE NO. | ||||||
PART I. FINANCIAL INFORMATION |
||||||
ITEM 1. Consolidated and Combined Financial Statements |
||||||
Consolidated and Combined Balance Sheets for the
Company as of September 30, 2003 (Unaudited) and for the Maguire Properties Predecessor as of December 31, 2002 |
1 | |||||
Consolidated and Combined Statements of Operations for the Company for the three months ended September 30, 2003, and for the Maguire Properties Predecessor for the three months ended September 30, 2002 (Unaudited) |
2 | |||||
Consolidated and Combined Statements of Operations for
the Company for the period from June 27, 2003 through September 30, 2003, and for the Maguire Properties Predecessor for the period from January 1, 2003 through June 26, 2003 and for the nine months ended September 30, 2002 (Unaudited) |
3 | |||||
Consolidated and Combined Statements of Comprehensive
Loss for the Company for the period from June 27, 2003 through September 30, 2003, and for the Maguire Properties Predecessor for the period from January 1, 2003 through June 26, 2003 and for the nine months ended September 30, 2002 (Unaudited) |
4 | |||||
Consolidated and Combined Statements of Cash Flows for
the nine months ended September 30, 2003 and 2002 (Unaudited) |
5 | |||||
Notes to Consolidated and Combined Financial Statements |
8 | |||||
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
19 | |||||
ITEM 3. Quantitative and Qualitative Disclosure about Market Risk |
30 | |||||
ITEM 4. Controls and Procedures |
31 | |||||
PART II. OTHER INFORMATION |
32 | |||||
ITEM 1. Legal Proceedings |
32 | |||||
ITEM 2. Changes in Securities and Use of Proceeds |
32 | |||||
ITEM 3. Defaults Upon Senior Securities |
34 | |||||
| PAGE NO. | ||||||
ITEM 4. Submission of Matters to a Vote of Security Holders |
34 | |||||
ITEM 5. Other Information |
34 | |||||
ITEM 6. Exhibits and Reports on 8-K |
35 | |||||
Signatures |
36 | |||||
Certifications |
||||||
| PART I | FINANCIAL INFORMATION |
| ITEM 1. | CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS |
MAGUIRE PROPERTIES, INC. AND MAGUIRE PROPERTIES PREDECESSOR
CONSOLIDATED AND COMBINED BALANCE SHEETS
(In thousands)
| THE | THE | |||||||||||
| COMPANY | PREDECESSOR | |||||||||||
| September 30, 2003 | December 31, 2002 | |||||||||||
| (Unaudited) | ||||||||||||
ASSETS |
||||||||||||
Investments in real estate: |
||||||||||||
Land |
$ | 170,244 | $ | 77,504 | ||||||||
Buildings and improvements |
1,170,263 | 486,088 | ||||||||||
Tenant improvements |
107,368 | 63,951 | ||||||||||
Furniture, fixtures, and equipment |
5,174 | 4,704 | ||||||||||
| 1,453,049 | 632,247 | |||||||||||
Less: accumulated depreciation and amortization |
(116,540 | ) | (82,863 | ) | ||||||||
Net investments in real estate |
1,336,509 | 549,384 | ||||||||||
Cash and cash equivalents |
49,085 | 2,976 | ||||||||||
Restricted cash |
43,833 | 24,307 | ||||||||||
Rents and other receivables, net |
7,553 | 2,235 | ||||||||||
Deferred rents |
13,402 | 9,687 | ||||||||||
Due from affiliates |
2,265 | 5,194 | ||||||||||
Deferred leasing costs, net |
68,140 | 11,265 | ||||||||||
Deferred loan costs, net |
21,261 | 6,714 | ||||||||||
Acquired above market leases, net |
13,532 | — | ||||||||||
Other assets |
8,734 | 10,277 | ||||||||||
Total assets |
$ | 1,564,314 | $ | 622,039 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY AND OWNERS’ DEFICIT |
||||||||||||
Mortgage loans |
$ | 955,000 | $ | 553,000 | ||||||||
Other secured loans |
30,000 | 105,038 | ||||||||||
Losses and distributions in excess of investments in real estate
entities and loans payable to such entities |
— | 78,609 | ||||||||||
Accounts payable and other liabilities |
65,099 | 33,078 | ||||||||||
Dividends and distributions payable |
22,402 | — | ||||||||||
Capital leases payable |
6,804 | 2,350 | ||||||||||
Acquired lease obligations |
42,855 | 4,099 | ||||||||||
Accrued interest payable |
2,815 | 5,033 | ||||||||||
Total liabilities |
1,124,975 | 781,207 | ||||||||||
Minority deficit |
— | (12,889 | ) | |||||||||
Minority interests |
90,082 | — | ||||||||||
Stockholders’ equity and owners’ deficit: |
||||||||||||
Preferred stock, $.01 par value, 50,000,000 shares authorized,
none issued or outstanding |
— | — | ||||||||||
Common stock, $.01 par value, 100,000,000 shares authorized,
42,645,711 shares issued and outstanding |
426 | — | ||||||||||
Additional paid in capital |
407,001 | — | ||||||||||
Unearned and accrued stock compensation |
(5,389 | ) | — | |||||||||
Accumulated deficit and dividends |
(56,854 | ) | — | |||||||||
Accumulated other comprehensive income, net |
4,073 | — | ||||||||||
Owners’ deficit |
— | (146,279 | ) | |||||||||
Total stockholders’ equity and owners’ deficit |
349,257 | (146,279 | ) | |||||||||
Total liabilities and stockholders’ equity and owners’ deficit |
$ | 1,564,314 | $ | 622,039 | ||||||||
See accompanying notes to consolidated and combined financial statements
1
MAGUIRE PROPERTIES, INC. AND
MAGUIRE PROPERTIES PREDECESSOR
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| THE | THE | |||||||||
| COMPANY | PREDECESSOR | |||||||||
| Three months ended | Three months ended | |||||||||
| September 30, 2003 | September 30, 2002 | |||||||||
Revenues: |
||||||||||
Rental |
$ | 33,986 | $ | 10,741 | ||||||
Tenant reimbursements |
16,070 | 5,139 | ||||||||
Hotel operations |
4,392 | 4,448 | ||||||||
Parking |
6,371 | 1,865 | ||||||||
Management, leasing, and development services to affiliates |
1,313 | 2,795 | ||||||||
Interest and other |
391 | 154 | ||||||||
Total revenues |
62,523 | 25,142 | ||||||||
Expenses: |
||||||||||
Rental property operating and maintenance |
13,857 | 4,947 | ||||||||
Hotel operating and maintenance |
3,287 | 3,137 | ||||||||
Real estate taxes |
4,757 | 1,035 | ||||||||
General and administrative |
3,450 | 4,858 | ||||||||
Depreciation and amortization |
13,696 | 3,903 | ||||||||
Interest |
11,650 | 9,383 | ||||||||
Loss from early extinguishment of debt |
2,431 | 3,967 | ||||||||
Other |
286 | 470 | ||||||||
Total expenses |
53,414 | 31,700 | ||||||||
Income (loss) before equity in net loss of real estate
entities and minority interests |
9,109 | (6,558 | ) | |||||||
Equity in net loss of real estate entities |
(31 | ) | (237 | ) | ||||||
Income (loss) before minority interests |
9,078 | (6,795 | ) | |||||||
Minority interests |
1,882 | 2 | ||||||||
Net income (loss) |
$ | 7,196 | $ | (6,797 | ) | |||||
Basic earnings per share |
$ | 0.17 | ||||||||
Diluted earnings per share |
$ | 0.17 | ||||||||
Weighted-average common shares outstanding: |
||||||||||
Basic |
41,913,231 | |||||||||
Diluted |
41,974,245 | |||||||||
See accompanying notes to consolidated and combined financial statements
2
MAGUIRE PROPERTIES, INC. AND
MAGUIRE PROPERTIES PREDECESSOR
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| THE COMPANY |
THE | THE | |||||||||||||
| PREDECESSOR | PREDECESSOR | ||||||||||||||
| Period June 27, 2003 | |||||||||||||||
| through September 30, | Period January 1, 2003 | Nine months ended | |||||||||||||
| 2003 | through June 26, 2003 | September 30, 2002 | |||||||||||||
Revenues: |
|||||||||||||||
Rental |
$ | 35,292 | $ | 28,732 | $ | 30,115 | |||||||||
Tenant reimbursements |
16,646 | 13,165 | 12,769 | ||||||||||||
Hotel operations |
4,567 | 8,738 | 14,933 | ||||||||||||
Parking |
6,598 | 5,637 | 5,026 | ||||||||||||
Management, leasing, and development services
to affiliates |
1,334 | 2,349 | 6,136 | ||||||||||||
Interest
and other |
2,727 | 124 | 168 | ||||||||||||
Total revenues |
67,164 | 58,745 | 69,147 | ||||||||||||
Expenses: |
|||||||||||||||
Rental property operating and maintenance |
14,467 | 11,941 | 11,011 | ||||||||||||
Hotel operating and maintenance |
3,430 | 6,784 | 10,373 | ||||||||||||
Real estate taxes |
4,901 | 3,006 | 2,819 | ||||||||||||
General and administrative |
17,633 | 9,080 | 12,644 | ||||||||||||
Depreciation and amortization |
14,100 | 11,387 | 11,159 | ||||||||||||
Interest |
12,490 | 24,853 | 26,812 | ||||||||||||
Loss from early extinguishment of debt |
46,760 | 6,667 | 3,967 | ||||||||||||
Other |
4,206 | 7,549 | 782 | ||||||||||||
Total expenses |
117,987 | 81,267 | 79,567 | ||||||||||||
Loss before equity in net income (loss) of
real estate entities and minority interests |
(50,823 | ) | (22,522 | ) | (10,420 | ) | |||||||||
Equity in net (loss) income of real estate entities |
(25 | ) | 1,648 | (755 | ) | ||||||||||
Loss before minority interests |
(50,848 | ) | (20,874 | ) | (11,175 | ) | |||||||||
Minority interests |
(11,802 | ) | 275 | (336 | ) | ||||||||||
Net loss |
$ | (39,046 | ) | $ | (21,149 | ) | $ | (10,839 | ) | ||||||
Basic loss per share |
$ | (0.94 | ) | ||||||||||||
Diluted loss per share |
$ | (0.94 | ) | ||||||||||||
Weighted-average common shares outstanding: |
|||||||||||||||
Basic |
41,702,405 | ||||||||||||||
Diluted |
41,702,405 | ||||||||||||||
See accompanying notes to consolidated and combined financial statements
3
MAGUIRE PROPERTIES, INC. AND
MAGUIRE PROPERTIES PREDECESSOR
CONSOLIDATED AND COMBINED STATEMENTS OF
COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
| THE COMPANY | THE PREDECESSOR | |||||||||||||
| Period from | Period from | THE PREDECESSOR | ||||||||||||
| June 27, 2003 | January 1, 2003 | |||||||||||||
| through September 30, | through June 26, | Nine months ended | ||||||||||||
| 2003 | 2003 | September 30, 2002 | ||||||||||||
Net loss |
$ | (39,046 | ) | $ | (21,149 | ) | $ | (10,839 | ) | |||||
Other comprehensive income — unrealized Increase in fair value of interest rate swap agreements |
5,124 | — | — | |||||||||||
Minority interests in increase in
fair value of interest rate swap agreements |
(1,051 | ) | — | — | ||||||||||
Comprehensive net loss |
$ | (34,973 | ) | $ | (21,149 | ) | $ | (10,839 | ) | |||||
See accompanying notes to consolidated and combined financial statements
4
MAGUIRE PROPERTIES, INC. AND
MAGUIRE PROPERTIES PREDECESSOR
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Nine Months Ended | Nine Months Ended | |||||||||||
| September 30, 2003 | September 30, 2002 | |||||||||||
Cash flows from operating activities: |
||||||||||||
Net loss |
$ | (60,195 | ) | $</ | ||||||||