SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
| For the fiscal quarter ended March 31, 2003 |
Commission file number 1-10622 |
CATELLUS DEVELOPMENT CORPORATION
(Exact name of Registrant as specified in its charter)
| Delaware |
94-2953477 | |
| (State or other jurisdiction of |
(I.R.S. Employer Identification No.) |
201 Mission Street
San Francisco, California 94105
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code:
(415) 974-4500
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 ¨
As of May 12, 2003, there were 87,374,238, issued and outstanding shares of the Registrant’s Common Stock.
CATELLUS DEVELOPMENT CORPORATION
INDEX
| Page No. | ||||||
| PART I. FINANCIAL INFORMATION |
||||||
| Item 1. |
||||||
| Condensed Consolidated Balance Sheet as of March 31, 2003 and December 31, 2002 |
2 | |||||
| Condensed Consolidated Statement of Operations for the three months ended March 31, 2003 and 2002 |
3 | |||||
| Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2003 and 2002 |
4 | |||||
| 5 | ||||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
14 | ||||
| Item 3. |
42 | |||||
| Item 4. |
42 | |||||
| PART II. OTHER INFORMATION |
43 | |||||
| Item 1. |
||||||
| Item 2. |
||||||
| Item 3. |
||||||
| Item 4. |
||||||
| Item 5. |
||||||
| Item 6. |
||||||
| 46 | ||||||
1
PART I
Item 1. Financial Statements (Unaudited)
CATELLUS DEVELOPMENT CORPORATION
Condensed Consolidated Balance Sheet
(In thousands)
| March 31, |
December 31, |
|||||||
| (Unaudited) |
||||||||
| Assets |
||||||||
| Properties |
$ |
2,476,382 |
|
$ |
2,448,081 |
| ||
| Less accumulated depreciation |
|
(413,127 |
) |
|
(399,923 |
) | ||
|
|
2,063,255 |
|
|
2,048,158 |
| |||
| Other assets and deferred charges, net |
|
287,792 |
|
|
273,853 |
| ||
| Notes receivable, less allowance |
|
31,408 |
|
|
44,947 |
| ||
| Accounts receivable, less allowance |
|
13,565 |
|
|
14,211 |
| ||
| Assets held for sale |
|
— |
|
|
2,760 |
| ||
| Restricted cash and investments |
|
41,801 |
|
|
36,593 |
| ||
| Cash and cash equivalents |
|
201,499 |
|
|
274,927 |
| ||
| Total |
$ |
2,639,320 |
|
$ |
2,695,449 |
| ||
| Liabilities and stockholders’ equity |
||||||||
| Mortgage and other debt |
$ |
1,498,321 |
|
$ |
1,500,955 |
| ||
| Accounts payable and accrued expenses |
|
97,339 |
|
|
117,493 |
| ||
| Deferred credits and other liabilities |
|
155,670 |
|
|
151,466 |
| ||
| Liabilities associated with assets held for sale |
|
— |
|
|
3,233 |
| ||
| Deferred income taxes |
|
316,277 |
|
|
318,970 |
| ||
| Total liabilities |
|
2,067,607 |
|
|
2,092,117 |
| ||
| Commitments and contingencies (Note 8) |
||||||||
| Minority interests |
|
— |
|
|
57,363 |
| ||
| Stockholders’ equity |
||||||||
| Common stock, 110,965 and 110,817 shares issued and 87,318 and 87,170 shares outstanding at March 31, 2003 and December 31, 2002, respectively |
|
1,109 |
|
|
1,108 |
| ||
| Paid-in capital |
|
533,694 |
|
|
531,362 |
| ||
| Treasury stock, at cost (23,647 shares at March 31, 2003 and December 31, 2002) |
|
(401,082 |
) |
|
(401,082 |
) | ||
| Accumulated earnings |
|
437,992 |
|
|
414,581 |
| ||
| Total stockholders’ equity |
|
571,713 |
|
|
545,969 |
| ||
| Total |
$ |
2,639,320 |
|
$ |
2,695,449 |
| ||
See notes to Condensed Consolidated Financial Statements
2
CATELLUS DEVELOPMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
| Three Months Ended |
||||||||
| 2003 |
2002 |
|||||||
| (Unaudited) |
||||||||
| Rental properties |
||||||||
| Rental revenue |
$ |
74,137 |
|
$ |
62,967 |
| ||
| Property operating costs |
|
(19,446 |
) |
|
(15,701 |
) | ||
| Equity in earnings of operating joint ventures, net |
|
2,523 |
|
|
3,521 |
| ||
|
|
57,214 |
|
|
50,787 |
| |||
| Property sales and fee services |
||||||||
| Sales revenue |
|
8,010 |
|
|
54,694 |
| ||
| Cost of sales |
|
(2,972 |
) |
|
(39,085 |
) | ||
| Gain on property sales |
|
5,038 |
|
|
15,609 |
| ||
| Equity in earnings of development joint ventures, net |
|
3,854 |
|
|
7,447 |
| ||
| Total gain on property sales |
|
8,892 |
|
|
23,056 |
| ||
| Management and development fees |
|
2,084 |
|
|
1,132 |
| ||
| Selling, general and administrative expenses |
|
(5,492 |
) |
|
(7,850 |
) | ||
| Other, net |
|
2,825 |
|
|
9,954 |
| ||
|
|
8,309 |
|
|
26,292 |
| |||
| Interest expense |
|
(16,807 |
) |
|
(12,571 |
) | ||
| Depreciation and amortization |
|
(16,568 |
) |
|
(13,438 |
) | ||
| Corporate administrative costs |
|
(4,399 |
) |
|
(4,102 |
) | ||
| Gain (loss) on non-strategic asset sales |
|
5,879 |
|
|
(238 |
) | ||
| Other, net |
|
249 |
|
|
67 |
| ||
| REIT transition costs |
|
(1,558 |
) |
|
— |
| ||
| Income before minority interests, income taxes, and discontinued operations |
|
32,319 |
|
|
46,797 |
| ||
| Minority interests |
|
— |
|
|
(1,527 |
) | ||
| Income before income taxes and discontinued operations |
|
32,319 |
|
|
45,270 |
| ||
| Income tax expense |
|
(11,732 |
) |
|
(18,209 |
) | ||
| Income from continuing operations |
|
20,587 |
|
|
27,061 |
| ||
| Discontinued operations, net of income tax: |
||||||||
| Gain from disposal of discontinued operations |
|
2,639 |
|
|
4,505 |
| ||
| Income (loss) from discontinued operations |
|
185 |
|
|
(82 |
) | ||
| Gain from discontinued operations |
|
2,824 |
|
|
4,423 |
| ||
| Net income |
$ |
23,411 |
|
$ |
31,484 |
| ||
| Income per share from continuing operations |
||||||||
| Basic |
$ |
0.24 |
|
$ |
0.31 |
| ||
| Assuming dilution |
$ |
0.23 |
|
$ |
0.30 |
| ||
| Income per share from discontinued operations |
||||||||
| Basic |
$ |
0.03 |
|
$ |
0.05 |
| ||
| Assuming dilution |
$ |
0.03 |
|
$ |
0.05 |
| ||
| Net income per share |
||||||||
| Basic |
$ |
0.27 |
|
$ |
0.36 |
| ||
| Assuming dilution |
$ |
0.26 |
|
$ |
0.35 |
| ||
| Average number of common shares outstanding—basic |
|
87,255 |
|
|
86,652 |
| ||
| Average number of common shares outstanding—diluted |
|
89,944 |
|
|
89,115 |
| ||
See notes to Condensed Consolidated Financial Statements