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 June 30, 2004
Commission file number 1-31908
CATELLUS DEVELOPMENT CORPORATION
(Exact name of Registrant as specified in its charter)
| Delaware | 94-2953477 | |
| (State or other jurisdiction of incorporation or organization) |
(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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). x Yes ¨ No
As of August 1, 2004, there were 103,028,193 issued and outstanding shares of the Registrant’s Common Stock.
CATELLUS DEVELOPMENT CORPORATION
INDEX
1
Item 1. Financial Statements (Unaudited)
CATELLUS DEVELOPMENT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| June 30, 2004 |
December 31, 2003 |
|||||||
| (Unaudited) | ||||||||
| Assets |
||||||||
| Properties |
$ | 2,553,387 | $ | 2,498,015 | ||||
| Less accumulated depreciation |
(474,290 | ) | (446,872 | ) | ||||
| 2,079,097 | 2,051,143 | |||||||
| Other assets and deferred charges, net |
290,681 | 292,312 | ||||||
| Notes receivable, less allowance |
94,743 | 119,202 | ||||||
| Accounts receivable, less allowance |
19,881 | 19,752 | ||||||
| Assets held for sale |
19,268 | 2,352 | ||||||
| Restricted cash and investments |
3,482 | 64,617 | ||||||
| Cash and cash equivalents |
40,644 | 45,931 | ||||||
| Total |
$ | 2,547,796 | $ | 2,595,309 | ||||
| Liabilities and stockholders’ equity |
||||||||
| Mortgage and other debt |
$ | 1,326,946 | $ | 1,378,054 | ||||
| Accounts payable and accrued expenses |
120,738 | 157,036 | ||||||
| Deferred credits and other liabilities |
297,116 | 291,530 | ||||||
| Liabilities associated with assets held for sale |
19,403 | 2,296 | ||||||
| Deferred income taxes |
51,475 | 56,712 | ||||||
| Total liabilities |
1,815,678 | 1,885,628 | ||||||
| Commitments and contingencies (Note 8) |
||||||||
| Stockholders’ equity |
||||||||
| Common stock, 104,328 and 103,822 shares issued, and 103,028 and 102,724 shares outstanding at June 30, 2004 and December 31, 2003, respectively |
1,044 | 1,039 | ||||||
| Paid-in capital |
499,593 | 489,143 | ||||||
| Unearned value of restricted stock and restricted stock unit grants (1,300 and 1,098 shares at June 30, 2004 and December 31, 2003, respectively) |
(22,536 | ) | (22,720 | ) | ||||
| Accumulated earnings |
254,017 | 242,219 | ||||||
| Total stockholders’ equity |
732,118 | 709,681 | ||||||
| Total |
$ | 2,547,796 | $ | 2,595,309 | ||||
See notes to condensed consolidated financial statements.
2
CATELLUS DEVELOPMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenues |
||||||||||||||||
| Rental revenue |
$ | 77,107 | $ | 73,067 | $ | 153,240 | $ | 145,958 | ||||||||
| Sales revenue |
7,299 | 24,900 | 44,990 | 32,910 | ||||||||||||
| Management, development and other fees |
758 | 4,863 | 2,457 | 6,947 | ||||||||||||
| 85,164 | 102,830 | 200,687 | 185,815 | |||||||||||||
| Costs and expenses |
||||||||||||||||
| Property operating costs |
(20,156 | ) | (19,800 | ) | (41,358 | ) | (38,950 | ) | ||||||||
| Cost of sales |
(4,874 | ) | (20,281 | ) | (27,964 | ) | (23,253 | ) | ||||||||
| Selling, general and administrative expenses |
(12,611 | ) | (10,167 | ) | (25,562 | ) | (20,058 | ) | ||||||||
| Depreciation and amortization |
(18,980 | ) | (17,443 | ) | (36,780 | ) | (33,730 | ) | ||||||||
| (56,621 | ) | (67,691 | ) | (131,664 | ) | (115,991 | ) | |||||||||
| Operating income |
28,543 | 35,139 | 69,023 | 69,824 | ||||||||||||
| Other income |
||||||||||||||||
| Equity in earnings of operating joint ventures, net |
2,379 | 2,136 | 4,793 | 4,659 | ||||||||||||
| Equity in earnings of development joint ventures, net |
3,391 | 5,427 | 4,618 | 9,281 | ||||||||||||
| Gain on non-strategic asset sales |
16,380 | 1,478 | 16,441 | 7,357 | ||||||||||||
| Interest income |
2,461 | 1,796 | 5,238 | 3,713 | ||||||||||||
| Other |
956 | 792 | 1,257 | 1,949 | ||||||||||||
| 25,567 | 11,629 | 32,347 | 26,959 | |||||||||||||
| Other expenses |
||||||||||||||||
| Interest expense |
(16,525 | ) | (16,913 | ) | (32,058 | ) | (33,453 | ) | ||||||||
| REIT transition costs |
(208 | ) | (1,805 | ) | (420 | ) | (3,363 | ) | ||||||||
| Other |
(1,819 | ) | (196 | ) | (2,249 | ) | (196 | ) | ||||||||
| (18,552 | ) | (18,914 | ) | (34,727 | ) | (37,012 | ) | |||||||||
| Income before income taxes and discontinued operations |
35,558 | 27,854 | 66,643 | 59,771 | ||||||||||||
| Income tax expense |
(982 | ) | (10,651 | ) | (1,913 | ) | (22,222 | ) | ||||||||
| Income from continuing operations |
34,576 | 17,203 | 64,730 | 37,549 | ||||||||||||
| Discontinued operations, net of income tax: |
||||||||||||||||
| Gain from disposal of discontinued operations |
398 | 1,780 | 2,014 | 4,419 | ||||||||||||
| Income from discontinued operations |
360 | 271 | 681 | 697 | ||||||||||||
| Net gain from discontinued operations |
758 | 2,051 | 2,695 | 5,116 | ||||||||||||
| Net income |
$ | 35,334 | $ | 19,254 | $ | 67,425 | $ | 42,665 | ||||||||
| Income per share from continuing operations |
||||||||||||||||
| Basic |
$ | 0.34 | $ | 0.17 | $ | 0.63 | $ | 0.38 | ||||||||
| Assuming dilution |
$ | 0.33 | $ | 0.17 | $ | 0.62 | $ | 0.37 | ||||||||
| Income per share from discontinued operations |
||||||||||||||||
| Basic |
$ | — | $ | 0.03 | $ | 0.03 | $ | 0.05 | ||||||||
| Assuming dilution |
$ | 0.01 | $ | 0.02 | $ | 0.03 | $ | 0.05 | ||||||||
| Net income per share |
||||||||||||||||
| Basic |
$ | 0.34 | $ | 0.20 | $ | 0.66 | $ | 0.43 | ||||||||
| Assuming dilution |
$ | 0.34 | $ | 0.19 | $ | 0.65 | $ | 0.42 | ||||||||
| Average number of common shares outstanding—basic |
103,023 | 98,385 | 102,933 | 98,148 | ||||||||||||