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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1996 Commission File Number 1-9349
SIZELER PROPERTY INVESTORS, INC.
(Exact name of registrant, as specified in its charter)
Delaware 72-1082589
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2542 Williams Blvd. 70062
Kenner, Louisiana (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (504) 471-6200
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock, $.01 par value New York Stock Exchange
8% Convertible Subordinated
Debentures, due 2003 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None.
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 if disclosure of delinquent files pursuant to Item 405 of
the Registration S-K (S 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statement incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K ( X ).
_____
The aggregate market value of voting stock held by non-affiliates of the
registrant was $78,347,000 at March 20, 1997.
The number of shares of common stock outstanding at March 24, 1997, was
8,419,669.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive proxy statement for the annual meeting
of its shareholders to be held in May 1997 are incorporated by reference in Part
III of this report.
PART I
ITEM 1. BUSINESS.
THE COMPANY
Sizeler Property Investors, Inc. (the "Company") was organized as a Delaware
corporation with perpetual existence on October 28, 1986.
The Company is a self-administered equity real estate investment trust ("REIT")
that invests in income-producing shopping center and apartment properties in
the southern United States. At December 31, 1996, the Company's investment
portfolio included interests in three enclosed regional shopping malls, two
power shopping centers, eleven community shopping centers, and thirteen
apartment communities. The properties are located in Louisiana (15), Florida
(9), Alabama (4), and Texas (1). Leasable area of the retail properties totalled
approximately 2.7 million s.f., and the apartment communities contained 3,157
units. At December 31, 1996, the Company's retail and apartment properties were
approximately 95% and 98% leased, respectively.
The Company has elected to qualify and be treated as a REIT under the Internal
Revenue Code of 1986, as amended (the "Code"), and intends to maintain its
qualification as a REIT in the future. As a qualified REIT, with limited
exceptions, the Company will not be taxed under federal and certain state income
tax laws, at the corporate level on income that it distributes to its
shareholders. For special tax provisions applicable to REITs, refer to Sections
856-860 of the Code.
INVESTMENT OBJECTIVE AND STRATEGIC PLAN
The Company's fundamental investment objective is to create long-term value for
its shareholders. The Company expects to achieve this objective through an
overall strategy, focused on making opportunistic property acquisitions and
employing an effective value-added asset management program, which emphasizes
cash flow growth and the appreciation of property values. The Company may also
participate with other entities in property ownership, through joint ventures or
other types of co-ownership.
The Company's strategy for future growth is to acquire shopping center and
apartment properties in fundamentally strong markets in the southern United
States and to improve the operating performance of those properties through its
effective and efficient leasing and management programs. The Company also
intends, from time to time, to implement programs of redevelopment or expansion
of certain of its properties and, subject to market conditions, develop new
properties within its geographical region. The Company believes that its
regional concentration and substantial knowledge of the markets in which it
operates affords it a competitive advantage in the identification of real estate
trends and investment opportunities within those markets.
At December 31, 1996, approximately 64% of the Company's portfolio consisted of
investments in shopping centers. In order to provide a degree of portfolio risk
diversification, while maintaining a focused approach to asset management, the
Company has elected to expand its ownership of apartment properties and, to the
extent practical, intends to achieve a balanced portfolio of investments in
shopping centers and apartments.
The Company considers numerous factors in the evaluation of potential real
estate investments, including, but not limited to, the following:
-purchase price and initial cash flow in relation to yield objective;
-the potential to increase cash flow through effective property management;
-geographic area and demographic profile;
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-property size and composition of tenants;
-availability of financing, including the possibility of assuming existing
financing or the potential for refinancing;
-condition, quality of design, construction, and other attributes;
-economic environment of local and regional real estate markets;
-the presence of or proximity to potential environmental problems;
-current and historical occupancy levels;
-current and historical sales levels of retail tenants;
-other characteristics of existing tenants, including credit-worthiness;
-anticipated future treatment under applicable federal, state, and local
tax laws and regulations; and
-potential for appreciation in value.
Although the Company presently makes equity investments in real estate, it may
invest in mortgages and other types of interests in real estate. The Company may
also invest in the securities of other entities engaged in real estate
activities or securities of other issuers, subject to the limitations of such
investments necessary to maintain REIT qualification.
An important part of the Company's overall strategic initiative is to increase
cash flow and to enhance the value of its existing portfolio through: (1)
maximizing rental income by achieving an optimum level of rental rates and
occupancy levels; (2) operating properties in a cost-effective manner; (3)
renovating properties in order to maintain or improve their competitive position
and performance in the marketplace; and (4) accessing the most cost effective
sources of capital to finance its properties.
The Company expects to hold its properties as long-term investments and has no
maximum period for retention of each investment. Under ordinary circumstances,
the Company would not expect to sell property held for less than four years.
COMPETITION
There are numerous real estate entities which compete with the Company in
seeking properties for acquisition and tenants for occupancy in its market area.
The Company believes that the principal competitive factors affecting the
attraction and retention of its tenants are property location, visibility, and
accessibility, as well as the quality, condition, and overall appearance of its
properties. The Company also competes with other entities for capital funds
necessary to support its investment activities and asset growth.
ENVIRONMENTAL MATTERS
Investments in real property have the potential for environmental liability on
the part of the owner of such property. The Company is not aware of any
environmental liabilities relating to the Company's investment properties which
would have a material adverse effect on the Company's business, assets, or
results of operations.
The Company's acquisition program guidelines require a Phase I environmental
study prior to the acquisition of a property that, because of its prior use or
its proximity to other properties with environmental risks, may be subject to
possible environmental hazards. Where determined appropriate by a Phase I study,
a more extensive evaluation may be undertaken to further investigate the
potential for environmental liability prior to an acquisition. The Company does
not presently maintain insurance coverage for environmental liabilities.
3
EXECUTIVE OFFICERS
The Company is self-administered and does not engage a separate advisor or pay
an advisory fee for administrative or investment services. Management of the
Company is provided by its officers. The executive officers of the Company are
elected annually by, and serve at the discretion of, the Board of Directors.
The executive officers of the Company are as follows:
NAME AGE POSITION(S) WITH THE COMPANY
---- --- ----------------------------
Sidney W. Lassen 62 Chairman of the Board, Chief Executive Officer, and Director
Thomas A. Masilla, Jr. 50 Vice Chairman, President, Principal Operating and Chief Financial
Officer, and Director
Mr. Lassen has been an executive officer of the Company since its inception in
1986, and has been involved in the acquisition, development, management, and
disposition of shopping center and apartment properties for approximately 40
years. He has previously served as a trustee of the International Council of
Shopping Centers, the national association for the shopping center industry. Mr.
Lassen is Chairman of the Board and Chief Executive Officer of Sizeler Realty
Co., Inc., and a director of the Hibernia Corporation.
Mr. Masilla was elected to the position of Vice Chairman in 1994, Principal
Operating Officer and President in 1995, and Chief Financial Officer in
1996. Mr. Masilla, a certified public accountant, was a consultant to the
Company from 1992 to 1994, was a consultant to Sizeler Realty Co., Inc. from
1992 to 1994, and has been a member of the Company's Board of Directors since
1986. Mr. Masilla has been a corporate executive and manager for more than 25
years, with extensive experience in commercial bank management.
PROPERTY MANAGEMENT
The Company has a management agreement with Sizeler Real Estate Management Co.,
Inc. (the "Management Company"), which is wholly-owned by Sizeler Realty Co.,
Inc. ("Sizeler Realty"). Sizeler Realty is a diversified real estate services
company in which a beneficial minority interest is directly owned by Sidney W.
Lassen and the balance is owned by members of the family of Mr. Lassen's wife,
her mother, and her father's estate.
Under the terms of the management agreement with the Company, the Management
Company performs leasing and management services with respect to the Company's
properties, including, for each property, the annual preparation of detailed
operating and capital budgets, accounting, data processing, collection of rents,
repairs, cleaning, maintenance, and other operating services. Upon request of
the Company, the Management Company also performs, or causes to be performed,
additional services, such as advertising, promotion, market research, and other
management information.
The Management Company is paid a fee based on the Company's gross investment in
real estate, subject to adjustment for year-to-year increases or decreases in
funds from operations per share of the Company.
ECONOMIC CONDITIONS
The Company is affected by national and local economic conditions and changes in
real estate markets. The financial performance of shopping center properties
depends upon the strength of retail sales, which are directly affected by trends
in employment and personal income. Apartment properties are, likewise, affected
by the economic conditions and employment trends of the communities in which
they are located.
Fifteen of the Company's properties, comprising approximately 50% of its
investment portfolio, are located in Louisiana. The Louisiana economy was
adversely affected in the mid- to late 1980's by a decline in crude oil and
natural gas prices, resulting in a severe contraction in the state's economic
activity and a reduction in non-agricultural employment.
4
The Louisiana economy has since experienced a recovery, as reflected in higher
levels of employment and an increase in general economic activity. The national
economy also has an impact on Louisiana, particularly as it affects the tourism
and convention industry, which is an important segment of the Louisiana economy.
To diversify its portfolio and reduce the risks of geographic concentration and
economic dependency on a primary industry, the Company began a program in 1988
of acquiring properties in other states of the Gulf South region.
ITEM 2. PROPERTIES
As of December 31, 1996, the Company's real estate portfolio included interests
in sixteen shopping centers and thirteen apartment communities. The Company
holds, directly, or indirectly through partnerships, a fee interest in all of
its properties, with the exception of the Southwood Shopping Center in Gretna,
Louisiana, and the Westland Shopping Center, in Kenner, Louisiana, in which it
holds its interests under long-term ground leases. Thirteen of the Company's
properties were subject to mortgage loans at December 31, 1996.
In the opinion of Management, all of the Company's properties are well-
maintained and in good repair, suitable for their intended uses, and are
adequately covered by insurance. The Company does not presently maintain
insurance coverage for environmental liabilities.
5
The following table sets forth certain information concerning the Company's real
estate investments as of December 31, 1996:
PERCENT LEASED
GROSS LEASABLE AREA DECEMBER 31,
YEAR YEAR LAST IN SQUARE FEET OR ----------------
DESCRIPTION COMPLETED RENOVATED RENTABLE UNITS 1996 1995
----------- ---------- --------- ------------------- ------- -------
REGIONAL ENCLOSED MALLS (3)
Hammond Square (b) 1978 1992 364,035 s.f. 84% 88%
(Hammond, Louisiana) 434,439 (a)
North Shore Square (b) 1986 1995 356,085 97% 94%
(Slidell, Louisiana) 624,134/(a)
Southland Mall (b) 1970, 1981 1995 469,637/ 96% 96%
(Houma, Louisiana) 623,309 (a)
POWER SHOPPING CENTERS (2)
Lantana Plaza 1993 ---- 275,928 98% 96%
(Palm Beach County, Florida)
Westward 1961, 1990 1995 226,547 100% 98%
(W. Palm Beach, Florida)
COMMUNITY SHOPPING CENTERS (11)
Airline Park (b) 1973 1986 71,368 88% 100%
(Metairie, Louisiana)
Azalea Gardens (b) 1950 1986 45,032 100% 100%
(Jefferson, Louisiana)
Camelot Plaza 1981 ---- 80,760 94% 94%
(San Antonio, Texas)
Colonial (b) 1967 1987 43,230 42% 100%
(Harahan, Louisiana)
Delchamps Plaza (b) 1989 ---- 72,649 100% 100%
(Gonzales, Louisiana) 186,649 (a)
Rainbow Square 1986 ---- 74,746 100% 100%
(Dunnellon, Florida) 116,746 (a)
Southwood (c) 1986 ---- 40,000 96% 92%
(Gretna, Louisiana)
Town & Country 1993 ---- 148,782 99% 99%
(Palatka, Florida)
Weeki Wachee Village 1987 ---- 82,349 96% 93%
(Weeki Wachee, Florida)
Westgate (b) 1964 1987 207,519 98% 50%
(Alexandria, Louisiana)
Westland (b) 1966 1990 108,418 98% 99%
----------- ---- ----
(Kenner, Louisiana)
2,667,085 95% 92%
=========== ==== ====
APARTMENTS (13)
Bel Air 1968, 1974 ---- 202 units 98% 98%
(Mobile, Alabama)
Bryn Mawr 1991 ---- 240 units 100% 100%
(Naples, Florida)
Colonial Manor (b) 1967 1992 48 units 98% 94%
(Harahan, Louisiana)
Garden Lane (b) 1966, 1968 ---- 261 units 99% 100%
(Gretna, Louisiana) 1971, 1972
Georgian (b) 1951 1980, 1993 135 units 85% 82%
(New Orleans, Louisiana)
Hampton Park 1977 1995 300 units 99% 94%
(Mobile, Alabama)
Jamestown Estates 1971, 1972 ---- 177 units 97% 99%
(Pensacola, Florida)
Lafayette Square 1969, 1972 1995 675 units 96% 95%
(Mobile, Alabama)
Lakeview Club 1990-1992 ---- 443 units 98% 91%
(Ft. Lauderdale, Florida)
Magnolia Place (b) 1984 ---- 148 units 99% 97%
(New Iberia, Louisiana)
Pine Bend 1979 ---- 152 units 98% 98%
(Mobile, Alabama)
Steeplechase (b) 1982 ---- 192 units 100% 98%
(Lafayette, Louisiana)
Woodcliff 1977 ---- 184 units 100% 100%
----------- ---- ----
(Pensacola, Florida)
3,157 units 98% 96%
=========== ==== ====
6
(a) The larger number is the total area of the indicated center, including
owner-occupied stores in which the Company has no ownership interest. The
Hammond Square and the Southland Mall Shopping Centers have stores owned by
Dillard Department Stores, Inc., comprising 70,404 s.f. and 153,672 s.f. of
space, respectively; the North Shore Square Shopping Mall has stores owned
by Maison Blanche, Inc., a subsidiary of Mercantile Stores Co., Inc.,
Mervyn's, and Dillard Department Stores, Inc., comprising 115,776 s.f.,
75,319 s.f., and 76,954 s.f. of space, respectively; the Delchamps Plaza
and the Rainbow Square Shopping Centers have stores owned by Wal-Mart
Stores, Inc., comprising 114,000 s.f. and 42,000 s.f., respectively.
(b) The Company has a 99% partnership interest in these properties.
(c) The Company has a 50% partnership interest in Southwood Shopping Center.
(d) Percent leased for retail is computed as the ratio of total space leased,
including anchor stores, to total leasable space, expressed as a
percentage. The computation excludes owner-occupied stores in which the
Company has no ownership interest.
ITEM 3. LEGAL PROCEEDINGS.
The Company is not presently involved in any material litigation nor, to its
knowledge, is any material litigation threatened against the Company or its
properties, other than routine litigation arising in the ordinary course of
business or which is expected to be covered by the Company's liability
insurance.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of security holders during the fourth
quarter of fiscal 1996.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS.
The Company's shares of common stock ("Shares") and its 8% convertible
subordinated debentures are listed for trading on the New York Stock Exchange
under the symbol "SIZ" and "SIZ 03," respectively.
The following table sets forth the high and low sales price of the shares for
the periods indicated, as reported by the New York Stock Exchange, and the
dividends paid per share in such periods.
DIVIDENDS
1996 HIGH LOW PAID
- ---- ------- ------- ---------
1st Quarter $ 9 3/4 $ 7 3/8 $0.22
2nd Quarter 9 7 7/8 $0.22
3rd Quarter 9 8 1/2 $0.22
4th Quarter 9 7/8 8 7/8 $0.22
1995
- ----
1st Quarter $11 $10 $0.28
2nd Quarter 10 3/8 9 3/8 $0.28
3rd Quarter 10 1/8 9 3/8 $0.28
4th Quarter 9 5/8 8 1/2 $0.28
As of March 24, 1997, there were 531 individually-listed owners of record of the
Company's shares. Approximately 74.5% of the Company's outstanding shares are
held by CEDE & Co., which is accounted for as
7
a single shareholder of record for multiple beneficial owners. CEDE & Co. is a
nominee of the Depository Trust Company ("DTC"), with respect to securities
deposited by participants with DTC, e.g., mutual funds, brokerage firms, banks,
and other financial organizations.
The Company has paid dividends in each quarter since its inception as a
publicly-owned company in 1987, with a cumulative total of approximately $63
million paid to shareholders over this time period. Cash dividends paid to
shareholders in 1996 amounted to 69% of 1996 funds from operations.
Under the REIT rules of the Internal Revenue Code, the Company must pay at least
95% of its ordinary taxable income as dividends in order to avoid taxation as a
regular corporation. The declaration of dividends is a discretionary decision of
the Board of Directors and depends upon the Company's distributable funds,
financial requirements, tax considerations, and other factors. A portion of the
Company's dividends paid may be deemed capital gain income, a return of capital,
or both, to its shareholders. The Company annually provides its shareholders a
statement as to its designation of the taxability of the dividend.
The federal income tax status of dividends per share paid for each of the five
years ended December 31 was as follows:
1996 1995 1994 1993 1992
----- ----- ----- ----- -----
Ordinary Income $0.37 $0.40 $0.72 $0.59 $0.53
Return of Capital 0.51 0.72 0.38 0.43 0.46
Capital Gain - - - 0.03 0.02
----- ----- ----- ----- -----
Total $0.88 $1.12 $1.10 $1.05 $1.01
===== ===== ===== ===== =====
The Company has a dividend reinvestment plan pursuant to which the Company's
shareholders of record may use their dividends to purchase additional shares.
The Company acquires shares for the plan by open market purchases. Brokerage
commissions on all such purchases are paid by the Company and are not charged to
plan participants.
8
ITEM 6. SELECTED FINANCIAL DATA.
The following table sets forth selected consolidated financial data (in
thousands, except per share data) for the Company and its subsidiaries and
should be read in conjunction with the consolidated financial statements and
notes thereto included herein.
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
OPERATING DATA (1)
Operating Revenue
Rents and other income $ 44,255 $ 43,087 $ 36,621 $ 25,005 $ 14,786
Equity in income of partnerships 103 106 75 72 88
-------- -------- -------- -------- --------
44,358 43,193 36,696 25,077 14,874
Operating Expenses 27,630 26,044 21,382 14,733 8,714
-------- -------- -------- -------- --------
INCOME FROM OPERATIONS 16,728 17,149 15,314 10,344 6,160
-------- -------- -------- -------- --------
Other Income (Expenses)
Interest and dividend income 98 42 82 1,240 270
Interest expense (14,542) (14,497) (10,248) (7,529) (3,807)
-------- -------- -------- -------- --------
(14,444) (14,455) (10,166) (6,289) (3,537)
-------- -------- -------- -------- --------
INCOME BEFORE GAIN (LOSS) ON SALE
OF REAL ESTATE 2,284 2,694 5,148 4,055 2,623
-------- -------- -------- -------- --------
Gain (Loss) on Sale of Real Estate Investments
and Costs Associated with Proposed Real
Estate Investment - - 8 285 (528)
-------- -------- -------- -------- --------
INCOME BEFORE EXTRAORDINARY ITEM 2,284 2,694 5,156 4,340 2,095
Extraordinary item-early extinguishment
of debt (449) - - (1,611) -
-------- -------- -------- -------- --------
NET INCOME $ 1,835 $ 2,694 $ 5,156 $ 2,729 $ 2,095
======== ======== ======== ======== ========
Funds From Operations (2) $ 10,771 $ 10,492 $ 11,118 $ 8,026 $ 5,255
Net Cash Provided by (Used in):
Operating activities $ 13,583 $ 10,117 $ 10,615 $ 9,767 $ 4,633
Investing activities $ (7,555) $(17,857) $(52,748) $(59,510) $(33,277)
Financing activities $ (6,834) $ 7,591 $ 37,257 $ 54,465 $ 19,311
Dividends Paid $ 7,425 $ 9,723 $ 9,806 $ 7,181 $ 4,784
Per Share Data:
Net income $ 0.22 $ 0.31 $ 0.58 $ 0.37 $ 0.44
Dividends Paid $ 0.88 $ 1.12 $ 1.10 $ 1.05 $ 1.01
Weighted Average Shares Outstanding 8,433 8,690 8,914 7,346 4,736
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
BALANCE SHEET DATA
Gross Investment in Real
Estate $304,424 $296,884 $279,698 $203,529 $137,047
Total Assets 278,380 281,857 269,923 202,904 132,178
Mortgage Notes Payable 68,080 68,317 42,139 19,704 41,572
Notes Payable 52,639 51,419 52,987 5,000 24,113
Convertible Subordinated
Debentures 62,878 62,878 62,878 62,955 -
Total Liabilities 189,013 186,534 163,213 91,737 67,032
Shareholders' Equity 89,367 95,323 106,710 111,167 65,146
(1) See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for information regarding factors such as property
acquisitions and dispositions and other transactions which have affected
operating performance during the periods indicated.
(2) Using guidelines established by the National Association of Real Estate
Investment Trusts, funds from operations has been defined by the Company as
net income, excluding gains or losses from sales of property and other non-
operating extraordinary items, plus depreciation on real estate assets, and
after adjustments for unconsolidated partnerships to reflect funds from
operations on the same basis.
9
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Overview
The following discussion should be read in conjunction with the consolidated
financial statements and notes thereto appearing elsewhere in this Annual
Report. Historical results and percentage relationships set forth in the
consolidated statements of income contained in the consolidated financial
statements, including trends which might appear, should not be taken as
indicative of future operations.
The Company's real estate investment portfolio is composed of sixteen shopping
center properties and thirteen apartment properties. As of December 31, 1996,
the Company's gross investment in real estate totalled $304 million, and
consisted of approximately 64%, or $195 million, in shopping centers, and
approximately 36%, or $109 million, in apartments. Total revenue for 1996 was
$44 million, and consisted of approximately 57%, or $25 million, generated by
shopping centers, and approximately 43%, or $19 million, generated by
apartments.
RESULTS OF OPERATIONS
Comparison of the years ended December 31, 1996 and 1995.
For the year ended December 31, 1996, operating revenue from shopping centers
and apartments increased $143,000 and $1.0 million, respectively, resulting in a
combined total increase of approximately $1.2 million. The overall increase in
operating revenue is primarily attributable to higher rental rates coupled with
higher occupancy, and, to a lesser extent, the acquisition of an apartment
property in mid-January 1995. Income from operations totalled $16.7 million,
compared to $17.1 million reported in 1995. Operating expenses, before
depreciation, in 1996 increased approximately $850,000 compared to 1995, thus
income from operations, before depreciation, increased approximately $350,000
over 1995. The increases in operating expenses are attributable to the following
items: (i) an increase in management and leasing fees due to increases in
investments in real estate properties, increase in the rate, .65% to .688%, used
to calculate the management fee due to the increase in funds from operations in
1996 over 1995, and an increase in leasing fees due to leasing activity in 1996;
(ii) an increase in real estate taxes due to increased property value
assessments at several properties; (iii) an increase in administrative expenses
due to higher payroll costs, professional fees, and other administrative costs
associated with the Company's real estate portfolio; and (iv) an increase in
operations and maintenance costs due to maintenance projects completed in 1996.
Depreciation increased $732,000 due to capital improvements made to the
Company's properties during 1996 and 1995.
Interest and dividend income increased in 1996 over 1995 due to interest
earnings on mortgage escrow deposits associated with the mortgage debt
financings completed in 1995.
Interest expense increased $45,000 over 1995, attributable to the following:
(1) an increase of $292,000 in interest on bank debt (average bank borrowings
were approximately $51.9 million and $44.0 million, with an average interest
rate of 7.6% and 8.6% in 1996 and 1995, respectively) offset by (2) a net
decrease of approximately $247,000 in mortgage interest due to: (i) repayment
of approximately $25.9 million of mortgage debt during the third quarter of
1995, (ii) mortgage debt financings totalling approximately $16.4 million
completed during the forth quarter of 1995, and (iii) refinancing of existing
mortgage debt of approximately $19.8 million in the first quarter of 1996, and
$3.4 million in the third quarter of 1996, whereby there were reductions in the
interest rates of approximately 200 and 113 basis points, respectively.
The 1996 refinancing described above resulted in an extraordinary non-cash
charge of $449,000, due to expensing deferred financing costs associated with
the original financing.
Net income in 1996, compared to 1995, decreased in the aggregate and on a per-
share basis, due principally to the extraordinary non-cash charge, combined with
the increase in depreciation expense, as explained above; the impact on net
income was $0.05 and $0.09 per share, respectively.
10
Comparison of the years ended December 31, 1995 and 1994.
For the year ended December 31, 1995, results of operations reflected increases
over corresponding 1994 amounts, resulting primarily from the Company's
acquisition of properties during 1995 and 1994, as shown below:
GROSS INVESTMENT (A)
(IN MILLIONS)
-------------------
1995 1994 Total
----- ----- -----
Shopping Centers $ 0.9 $39.3 $40.2
Apartments 5.1 29.3 34.4
----- ----- -----
TOTAL $ 6.0 $68.6 $74.6
===== ===== =====
- ------------------
(a) Gross investment is initial purchase price plus costs capitalized
subsequent to acquisition through December 31, 1995.
Operating revenue from all properties in the portfolio for the year ended
December 31, 1995, compared to 1994, increased by $6.5 million, due principally
to newly-acquired properties and, to a lesser extent, higher rental rates on
properties which were a part of the portfolio during both comparative periods.
Revenue from shopping centers and apartments increased by $3.8 million and $2.7
million, respectively. Income from operations totalled $17.1 million, compared
to $15.3 million reported in 1994. Operating expenses, before depreciation, from
all properties increased $2.6 million and income from operations, before
depreciation, from all properties increased $3.9 million. The reported increases
in operating revenue, operating expenses, and income from operations were due
principally to newly-acquired properties.
Operating revenue from shopping center and apartment properties owned during
both comparable periods increased 4% in 1995, compared to 1994, attributable to
higher average rental rates. Direct operating expenses from these same
properties increased 7% over the same period a year ago, principally
attributable to higher depreciation expenses resulting from renovation projects
at several of the Company's properties. As a result, income from rental
operations from shopping center and apartment properties owned during both
comparable periods increased 1%.
Interest, dividend, and other income decreased $40,000 for the year 1995,
compared to 1994, due to disposition of marketable securities in 1994.
Interest expense increased $4.2 million (41%) for the year ended December 31,
1995, compared to 1994, attributable to the following: (1) increase of $1.1
million in interest expense on bank debt, due to higher average borrowings to
fund acquisitions and capital improvements, and higher interest rates (average
borrowings were approximately $44.0 million and $32.5 million, with a weighted
average interest rate of 8.6% and 7.7% in 1995 and 1994, respectively), and (2)
an increase of $3.1 million in interest expense on mortgage debt, due to higher
mortgage debt outstanding during 1995, net of the Company's repayment of
mortgage debt in 1995. To mitigate the future impact of interest rate changes on
the Company's borrowing costs, the Company focused on refinancing short-term
debt with long-term, fixed-rate debt. Accordingly, during 1995, the Company
completed new mortgage financing totalling $52.2 million, repaid mortgage debt
totalling $25.9 million, and paid down bank lines with the remaining proceeds.
Bank lines were also used to finance capital improvements and other investments,
which resulted in subsequent increases in bank debt to a level approximately
$1.5 million below year-end 1994.
The reduction in net income between 1995 and 1994 was, in the aggregate and on a
per-share basis, principally attributable to the increase in depreciation
expense due to additional investment in real estate properties, interest
expense resulting from increased borrowings from acquisitions and capital
improvements, and higher interest rate levels during 1995 over those of the
preceding year.
11
LIQUIDITY AND CAPITAL RESOURCES
The primary source of working capital for the Company is net cash provided by
operating activities, from which the Company funds normal operating requirements
and distributions to shareholders. In addition, the Company maintains unsecured
credit lines with commercial banks, which it utilizes to temporarily finance the
cost of portfolio growth, property improvements, and other expenditures. At
December 31, 1996, the Company had $468,000 in cash and cash equivalents, and
commitments for a total of $95.0 million of bank lines of credit, of which
approximately $42.4 million was available. Utilization of the bank lines is
subject to certain restrictive covenants that impose maximum borrowing levels by
the Company through the maintenance of prescribed debt-to-equity or other
financial ratios.
Net cash flows from operating activities increased $3.5 million in 1996 from
1995, and decreased $498,000 in 1995 from 1994. The increase between 1996 and
1995 is attributable to an increase in income from operations before
depreciation, the recognition of an extraordinary item in connection with the
early extinguishment of mortgage debt, a net decrease in operating assets, and a
net increase in operating liabilities. The decrease between 1995 and 1994 was
primarily attributable to higher interest charged on the Company's borrowings
and changes in operating liabilities caused by growth in the Company's
investment portfolio.
Net cash flows used in investing activities decreased $10.3 million in 1996 from
1995, attributable to a decrease in the acquisition of and capital improvements
made to real estate properties. The decrease in capital improvements to existing
properties was the result of the completion in 1995 of renovation programs at
two of the Company's retail centers, a mall and power center. The Company had no
material commitments for capital improvements at December 31, 1996.
Net cash flows used in investing activities decreased $34.9 million in 1995 from
1994, attributable to a decrease in the addition of investment properties,
offset by an increase in improvements to existing properties. In 1995, the
Company acquired an apartment community for approximately $4.75 million, and
additional land adjoining two of its existing shopping centers during 1995, at a
combined cost of $847,000. The increase in improvements to real estate
investments during 1995 was attributable to the completion of renovation
programs at two of the Company's shopping centers and on-going renovation
projects at certain existing apartment properties. The renovation programs
completed at the shopping centers during 1995 were under non-cancellable
construction contracts with non-affiliated companies, for total contract amounts
of $5.0 million. The Company had no major commitments for capital improvements
at December 31, 1995.
Net cash flows used in financing activities increased $14.4 million in 1996 from
1995. The increase was primarily due to mortgage debt financings completed in
1996 compared to 1995, offset by a decrease in treasury shares purchased and
cash dividends paid, in 1996 compared to 1995. In 1996, the Company completed
mortgage debt refinancing totalling $23.4 million, from which the Company
realized a reduction in the interest rates ranging from 113 to 200 basis points.
In 1995, the Company completed mortgage debt financing totalling $52.2 million,
which the Company utilized to reduce variable-rate debt, and to fund investment
activity. The principal purpose of the 1995 mortgage debt financing was to limit
exposure to rising interest rates by replacing a substantial amount of the
Company's variable-rate, short-term bank debt with fixed-rate, long-term debt.
Bank debt was subsequently increased due to the financing of capital
improvements to real estate properties. Pursuant to the Company's stock
repurchase program initiated in 1995, during 1996, 62,800 shares were
repurchased at a total cost of $516,000, compared to 460,900 shares repurchased
in 1995 at a total cost of $4.5 million.
Net cash flows provided by financing activities decreased $29.7 million in 1995
from 1994. The decrease was primarily attributable to the Company's increased
principal payments on mortgage notes payable and notes payable to banks,
increased debt issuance costs, and the repurchase of 460,900 shares of treasury
stock. As stated above, in 1995, the Company completed mortgage debt financing
totalling $52.2 million. With these proceeds, the Company repaid other mortgage
debt totalling $25.9 million, and paid down variable rate bank debt with the
remaining proceeds. Bank lines were also used to finance capital improvements
and other investments, which resulted in subsequent increases in bank debt to a
level approximately $1.5 million below year-end 1994.
12
As of December 31, 1996, thirteen of the Company's properties, comprising
approximately 38% of its gross investment in real estate, were subject to a
total of $68.1 million in mortgage debt, all of which bears a fixed rate of
interest for a fixed term. The remaining sixteen properties in the portfolio are
currently unencumbered by debt. The Company anticipates that its current cash
balance, operating cash flows, and borrowings (including borrowings under its
lines of credit) will be adequate to fund the Company's future (i) operating and
administrative expenses, (ii) debt service obligations, (iii) distributions to
shareholders, (iv) capital improvements, and (v) normal repair and maintenance
expenses at its properties.
The Company's current dividend policy is to pay quarterly dividends to
shareholders, based upon, among other factors, funds from operations, as opposed
to net income. Because funds from operations excludes the deduction of non-cash
charges, principally depreciation of real estate assets, and certain non-
operating items, quarterly dividends will typically be greater than net income
and may include a tax-deferred return of capital component. The Board of
Directors, on January 30, 1997, declared a cash dividend with respect to the
period October 1, 1996, through December 31, 1996, of $.22 per share, to
shareholders of record as of February 20, 1997.
FUNDS FROM OPERATIONS
Real estate industry analysts utilize the concept of funds from operations as an
important analytical measure of a REIT's financial performance. The Company
considers funds from operations in evaluating its operating results, and its
dividend policy is also based, in part, on the concept of funds from operations.
On January 1, 1996, the Company adopted a new definition of funds from
operations, in keeping with industry guidelines as established by the National
Association of Real Estate Investment Trusts (NAREIT). Accordingly, for years
prior to 1996, funds from operations have been restated to reflect it on a
consistent basis. Funds from operations is defined by the Company as net income,
excluding gains or losses from sales of property and other non-operating
extraordinary items, plus depreciation on real estate assets, and after
adjustments for unconsolidated partnerships to reflect funds from operations on
the same basis. Funds from operations do not represent cash flows from
operations as defined by generally accepted accounting principles, nor is it
indicative that cash flows are adequate to fund all cash needs. Funds from
operations should not be considered as an alternative to net income as defined
by generally accepted accounting principles or to cash flows as a measure of
liquidity.
For the year ended December 31, 1996, funds from operations totalled $10.8
million, compared to $10.5 million in 1995, an increase of approximately
$300,000. This increase in funds from operations is attributable to the
operating performance of the Company's real estate properties, which experienced
overall income growth, primarily from higher rental rates coupled with higher
occupancy, and to a lesser extent, the acquisition of an apartment property in
mid-January 1995, offset by a slight increase in interest expense due to a
higher level of average borrowings.
Funds from operations decreased approximately $600,000 in 1995, compared to
$11.1 million reported in 1994. The decrease in funds from operations in 1995 is
due primarily to higher interest charges on the Company's borrowings and
amortization of deferred financing costs in connection with mortgage debt
financings completed in 1995, offset by an increase in income from rental
operations, primarily due to new property acquisitions in 1995 and 1994.
FUTURE RESULTS
This Form 10-K and other documents prepared, and statements made by the Company,
may contain certain forward-looking statements that are subject to risk and
uncertainty. Investors and potential investors in the Company's securities [Bare
cautioned that a number of factors could adversely affect the Company and cause
actual results to differ materially from those in the forward-looking
statements, including (a) the inability to lease currently vacant space in the
Company's properties; (b) decisions by tenants and anchor tenants who own their
space to close stores at the Company's properties; (c) the inability of tenants
to pay rent and other expenses; (d) tenant bankruptcies; (e) decreases in rental
rates available from tenants; (f) increases in operating costs at the Company's
properties; (g) lack of availability of financing for acquisition, development
and rehabilitation of properties by the Company; (h) increases in interest
rates; (i) a general economic downturn resulting in lower retail sales and
causing
13
downward pressure on occupancies and rents at retail properties; as well as (j)
the adverse tax consequences if the Company were to fail to qualify as a REIT in
any taxable year; and (k) the competitive factors described in "Item 1 -
Competition" of this report.
EFFECTS OF INFLATION
Substantially all of the Company's retail leases contain provisions designed to
provide the Company with a hedge against inflation. Most of the Company's retail
leases contain provisions which enable the Company to receive percentage rentals
based on tenant sales in excess of a stated breakpoint and/or provide for
periodic increases in minimum rent during the lease term. The majority of the
Company's retail leases are for terms of less than ten years, which allows the
Company to adjust rentals to changing market conditions. In addition, most
retail leases require tenants to pay a contribution towards property operating
expenses, thereby reducing the Company's exposure to higher costs caused by
inflation. The Company's apartment leases are written for short terms, generally
six to twelve months, and are adjusted according to changing market conditions.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Company's Consolidated Balance Sheets as of December 31, 1996 and 1995, and
its Consolidated Statements of Income, Shareholders' Equity, Cash Flows, and
Notes to Consolidated Financial Statements for the years ended December 1996,
1995, and 1994, together with the Reports of Independent Auditors thereon, are
included under Item 14 of this report and are incorporated herein by reference.
Unaudited quarterly results of operations included in the Notes to
Consolidated Financial Statements are also incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There have be no disagreements with Accountants on accounting and financial
disclosures.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
For information regarding the executive officers of the Company, see "Executive
Officers" in Part I, Item 1 of this report. The other information required by
this Item 10 is incorporated herein by reference to the Company's definitive
proxy statement, which will be filed with the Securities and Exchange
Commission, pursuant to Regulation 14A within 120 days of the end of the
Company's fiscal year.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this Item 11 is incorporated herein by reference to
the Company's definitive proxy statement, which will be filed with the
Securities and Exchange Commission pursuant to Regulation 14A within 120 days of
the end of the Company's fiscal year.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this Item 12 is incorporated herein by reference to
the Company's definitive proxy statement, which will be filed with the
Securities and Exchange Commission pursuant to Regulation 14A within 120 days of
the end of the Company's fiscal year.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this Item 13 is incorporated herein by reference to
the Company's definitive proxy statement, which will be filed with the
Securities and Exchange Commission pursuant to Regulation 14A within 120 days of
the end of the Company's fiscal year.
14
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) (1) and (2) Financial Statements and Financial Statement Schedules
INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
PAGE
-----
Reports of Independent Auditors 16-17
Consolidated Balance Sheets as of December 31, 1996 and 1995 18
Consolidated Statements of Income for the years ended December 31,
1996, 1995, and 1994 19
Consolidated Statements of Shareholders' Equity for the years ended
December 31, 1996, 1995, and 1994 20
Consolidated Statements of Cash Flows for the years ended December 31,
1996, 1995, and 1994 21
Notes to Consolidated Financial Statements 22-31
Financial Statement Schedules
Schedule II. Valuation and Qualifying Accounts 32
Schedule III. Real Estate and Accumulated Depreciation 33-34
All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not submitted because
they are not required or the required information appears in the financial
statements or notes thereto.
15
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Sizeler Property Investors, Inc.
We have audited the consolidated balance sheets of Sizeler Property Investors,
Inc. and subsidiaries as of December 31, 1996 and 1995, and the related
consolidated statements of income, shareholders' equity, and cash flows for each
of the years in the two-year period ended December 31, 1996. In connection with
our audits of the consolidated financial statements, we have also audited the
financial statement schedules listed in the Index at Item 14(a). These
consolidated financial statements and financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements and the financial statement
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Sizeler Property
Investors, Inc. and subsidiaries as of December 31, 1996 and 1995, and the
results of their operations and their cash flows for each of the years in the
two-year period ended December 31, 1996, in conformity with general accepted
accounting principles. Also, in our opinion, the related financial statement
schedules, when considered in relation to the basic consolidated financial
statements taken as a whole, present fairly, in all material respects, the
information set forth therein.
KPMG PEAT MARWICK LLP
New Orleans, Louisiana
January 30, 1997
16
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Sizeler Property Investors, Inc.
We have audited the accompanying related consolidated statements of income,
shareholders' equity, and cash flows of Sizeler Property Investors, Inc. and
subsidiaries for the year ended December 31, 1994. Our audit also included the
financial statement schedules listed in the Index at Item 14(a). These financial
statements and schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements and the financial statement schedules based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated results of operations of Sizeler
Property Investors, Inc. and subsidiaries and their cash flows for the year
ended December 31, 1994, in conformity with general accepted accounting
principles. Also, in our opinion, the related financial statement schedules,
when considered in relation to the basic consolidated financial statements taken
as a whole, present fairly in all material respects the information set forth
therein.
ERNST & YOUNG LLP
Jackson, Mississippi
February 3, 1995
17
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31,
----------------------------
1996 1995
------------- -------------
ASSETS
Real estate investments (Notes B and D)
Land $ 48,645,000 $ 48,402,000
Buildings and improvements, net of accumulated depreciation of
$37,518,000 in 1996 and $29,041,000 in 1995 217,313,000 218,478,000
Investments in real estate partnership (Note A) 948,000 963,000
------------ ------------
266,906,000 267,843,000
Cash and cash equivalents 468,000 1,274,000
Accounts receivable and accrued revenue, net of allowance for
doubtful accounts of $204,000 in 1996 and $166,000 in 1995 3,028,000 3,088,000
Prepaid expenses and other assets, net 7,978,000 9,652,000
------------ ------------
Total Assets $278,380,000 $281,857,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Mortgage notes payable (Note D) $ 68,080,000 $ 68,317,000
Notes payable (Note D) 52,639,000 51,419,000
Accounts payable and accrued expenses 4,372,000 2,762,000
Tenant deposits and advance rents 832,000 896,000
Commitments and contingencies (Note J) - -
Minority interest in real estate partnerships (Note K) 212,000 262,000
------------ ------------
126,135,000 123,656,000
Convertible subordinated debentures (Note D) 62,878,000 62,878,000
------------ ------------
Total Liabilities 189,013,000 186,534,000
------------ ------------
SHAREHOLDERS' EQUITY (Notes E and L)
Preferred stock, 3,000,000 shares authorized, none issued - -
Common stock, par value $.01 per share, 15,000,000 shares authorized,
shares issued and outstanding-8,946,369 in 1996 and 8,930,069 in 1995 89,000 89,000
Additional paid-in capital 127,420,000 127,273,000
Accumulated distributions in excess of net income (Note G) (33,170,000) (27,580,000)
------------ ------------
94,339,000 99,782,000
Treasury shares, at cost, 523,700 shares in 1996 and 460,900 shares in 1995 (4,970,000) (4,454,000)
Unrealized loss on securities (Note A) (2,000) (5,000)
------------ ------------
Total Shareholders' Equity 89,367,000 95,323,000
------------ ------------
Total Liabilities and Shareholders' Equity $278,380,000 $281,857,000
============ ============
See notes to consolidated financial statements.
18
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31,
-------------------------------------------
1996 1995 1994
------------- ------------- -------------
OPERATING REVENUE (Notes C and F)
Rents and other income $ 44,255,000 $ 43,087,000 $ 36,621,000
Equity in income of partnership 103,000 106,000 75,000
------------ ------------ ------------
44,358,000 43,193,000 36,696,000
------------ ------------ ------------
OPERATING EXPENSES
Management and leasing (Note F) 2,228,000 1,969,000 1,495,000
Utilities 1,977,000 1,918,000 1,737,000
Real estate taxes 3,363,000 3,189,000 2,625,000
Administrative expenses 2,194,000 2,028,000 1,886,000
Operations and maintenance (Note F) 6,391,000 6,228,000 5,301,000
Other operating expenses 2,358,000 2,325,000 1,995,000
Depreciation 9,119,000 8,387,000 6,343,000
------------ ------------ ------------
27,630,000 26,044,000 21,382,000
------------ ------------ ------------
INCOME FROM OPERATIONS 16,728,000 17,149,000 15,314,000
------------ ------------ ------------
OTHER INCOME (EXPENSES)
Interest, dividends, and other income 98,000 42,000 82,000
Interest expense (Note D) (14,542,000) (14,497,000) (10,248,000)
------------ ------------ ------------
(14,444,000) (14,455,000) (10,166,000)
------------ ------------ ------------
INCOME BEFORE GAIN ON SALE OF
REAL ESTATE AND EXTRAORDINARY ITEM 2,284,000 2,694,000 5,148,000
------------ ------------ ------------
Gain on sale of investments in real estate companies
and other securities - - 8,000
------------ ------------ ------------
- - 8,000
------------ ------------ ------------
INCOME BEFORE EXTRAORDINARY ITEM 2,284,000 2,694,000 5,156,000
Extraordinary item-early extinguishment of debt (Note A) (449,000) - -
------------ ------------ ------------
NET INCOME $ 1,835,000 $ 2,694,000 $ 5,156,000
============ ============ ============
PER SHARE DATA:
Income before extraordinary item $ 0.27 $ 0.31 $ 0.58
============ ============ ============
Extraordinary item $ (0.05) $ - $ -
============ ============ ============
Net income $ 0.22 $ 0.31 $ 0.58
============ ============ ============
See notes to consolidated financial statements.
19
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
ACCUMULATED
COMMON STOCK ADDITIONAL DISTRIBUTION UNREALIZED
------------------- PAID-IN IN EXCESS OF TREASURY LOSS ON
SHARES AMOUNT CAPITAL NET INCOME STOCK SECURITIES TOTAL
--------- ------- ------------ ------------ ----------- ---------- ------------
Balance at January 1, 1994 8,901,704 $89,000 $126,979,000 $(15,901,000) $ -- $ -- $111,167,000
--------- ------- ------------ ------------ ----------- -------- ------------
Conversion of debentures 5,922 77,000 77,000
Offering costs from 1993 offering (10,000) (10,000)
Net income for 1994 5,156,000 5,156,000
Cash dividends declared and paid
($1.10 per share) (Note G) (9,806,000) (9,806,000)
Exercise of stock options (Note E) 10,693 95,000 95,000
Shares issued pursuant to Directors'
Stock Ownership Plan (Note E) 4,500 58,000 58,000
Unrealized loss on securities (Note A) (27,000) (27,000)
--------- ------- ------------ ------------ ----------- -------- ------------
Balance at December 31, 1994 8,922,819 $89,000 $127,199,000 $(20,551,000) $ -- $ -- $106,710,000
--------- ------- ------------ ------------ ----------- -------- ------------
Net income for 1995 2,694,000 2,694,000
Cash dividends declared and paid
($1.12 per share) (Note G) (9,723,000) (9,723,000)
Exercise of stock options (Note E) 2,000 17,000 17,000
Shares issued pursuant to Directors'
Stock Ownership Plan (Note E) 5,250 57,000 57,000
Unrealized loss on securities (Note A) 22,000 22,000
Purchase of treasury shares, 460,900
shares (4,454,000) (4,454,000)
--------- ------- ------------ ------------ ----------- -------- ------------
Balance at December 31, 1995 8,930,069 $89,000 $127,273,000 $(27,580,000) $(4,454,000) $ (5,000) $ 95,323,000
Net income for 1996 1,835,000 1,835,000
Cash dividends declared and paid
($.88 per share) (Note G and H) (7,425,000) (7,425,000)
Exercise of stock options (Note E) 10,000 88,000 88,000
Shares issued pursuant to Directors'
Stock Ownership Plan (Note E) 6,000 56,000 56,000
Shares issued pursuant to Incentive
Award Plan 300 3,000 3,000
Unrealized loss on securities (Note A) 3,000 3,000
Purchase of treasury shares, 62,800
shares (516,000) (516,000)
--------- ------- ------------ ------------ ------------ -------- ------------
Balance at December 31, 1996 8,946,369 $89,000 $127,420,000 $(33,170,000) $(4,970,000) $ (2,000) $ 89,367,000
========= ======= ============ ============ =========== ======== ============
See notes to consolidated financial statements.
20
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31,
-------------------------------------------
1996 1995 1994
------------- ------------- ---------
- ----
OPERATING ACTIVITIES:
Net income $ 1,835,000 $ 2,694,000 $ 5,156,000
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 9,119,000 8,387,000 6,343,000
Gain on sale of investments in real estate companies
and other securities - - (8,000)
Extraordinary item-early extinguishment of debt 449,000 - -
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable and
accrued revenue 60,000 (157,000) (354,000)
(Increase) decrease in prepaid expenses and
other assets 538,000 (242,000) (1,039,000)
Increase (decrease) in accounts payable and
accrued expenses 1,610,000 (686,000) 421,000
Other, net (28,000) 121,000 96,000
------------ ------------ -------------
Net Cash Provided by Operating Activities 13,583,000 10,117,000 10,615,000
------------ ------------ -------------
INVESTING ACTIVITIES:
Acquisitions of real estate investments, net of debt
assumed - (5,594,000) (41,564,000)
Improvements to real estate investments (7,555,000) (12,263,000) (11,184,000)
------------ ------------ -------------
Net Cash Used in Investing Activities (7,555,000) (17,857,000) (52,748,000)
------------ ------------ -------------
FINANCING ACTIVITIES:
Proceeds from mortgage notes payable and notes
payable to banks 24,649,000 52,210,000 50,987,000
Principal payments on mortgage notes payable and
notes payable to banks (23,664,000) (27,600,000) (3,315,000)
Debt issuance costs and mortgage escrow deposits 82,000 (2,876,000) (735,000)
Cash dividends paid (7,425,000) (9,723,000) (9,806,000)
Issuance of shares pursuant to stock option plans 90,000 17,000 95,000
Minority interest in real estate partnerships (50,000) 17,000 31,000
Purchases of treasury shares (516,000) (4,454,000) -
------------ ------------ -------------
Net Cash (Used In) Provided by Financing Activities (6,834,000) 7,591,000 37,257,000
------------ ------------ -------------
Net decrease in cash and cash equivalents (806,000) (149,000) (4,876,000)
Cash and cash equivalents at beginning of year 1,274,000 1,423,000 6,299,000
------------ ------------ -------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 468,000 $ 1,274,000 $ 1,423,000
============ ============ =============
See notes to consolidated financial statements.
21
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995, and 1994
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation. The consolidated financial statements include the
accounts of Sizeler Property Investors, Inc., and its majority-owned and
controlled subsidiaries and partnerships (the "Company"). All significant
intercompany transactions and balances have been eliminated in consolidation.
The Company's investment in a real estate partnership at December 31, 1996 and
1995, represents a 50% interest in a partnership which owns a community shopping
center and is accounted for by the equity method.
Cash and Cash Equivalents. Cash equivalents represent investments that are
highly liquid and have a maturity of three months or less at the time the
investment is made.
Real Estate Investments. Real estate investments are recorded at cost.
Depreciation of buildings and improvements is provided by the straight-line
method over the estimated useful lives of the assets, ranging from ten to forty
years. Betterments and major replacements are capitalized, and the replaced
asset and accumulated depreciation are removed from the accounts. Tenant
improvement costs are depreciated using the straight-line method over the term
of the related leases. Maintenance and repairs are expensed in the period
incurred.
The Company adopted the provisions of the Financial Accounting Standards Board,
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of", effective January 1, 1995. Accordingly, the Company reviews real estate
(and other long-lived assets) and certain identifiable intangibles to be held
and used, whenever events or changes in circumstances indicate that the carrying
amounts of an asset may not be recoverable. If it is indicated that the carrying
amount may not be recoverable from future cash flows generated by the asset, an
impairment loss will be recognized. The adoption of Statement No. 121 had no
effect on the 1996 or 1995 financial statements. No real estate is held for sale
at December 31, 1996.
Securities. The Company has adopted the provisions of the Financial Accounting
Standards Board, Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities". Investment
securities have been classified as available-for-sale and are stated at fair
value, with the unrealized gains and losses, net of taxes, reported as a
separate component of shareholders' equity.
Deferred Charges. Debt issuance costs in connection with issuance of the
Company's 8% Convertible Subordinated Debentures (the "Debentures"), and other
financings are included in prepaid expense and other costs and are being
amortized over the term of the related obligations. Unamortized costs are
charged to expense upon prepayment of financing. Unamortized costs related to
the Debentures are offset against shareholders' equity upon conversion by
debenture-holders. Costs incurred in connection with the execution of leases are
included in prepaid expenses and other assets, and are amortized over the term
of the respective leases. Unamortized costs are charged to expense upon
cancellation of leases prior to expiration of lease terms.
Rental Income. Rental income includes rents from shopping center and apartment
properties. Minimum rents from shopping center leases are accounted for ratably
over the term of the lease. Percentage rents are recognized based upon tenant
sales that exceed specific levels. Tenant reimbursements are recognized as the
applicable services are rendered or expenses incurred.
Federal Income Taxes. The Company has elected to be taxed as a real estate
investment trust ("REIT") under the Internal Revenue Code and intends to
maintain its qualification as a REIT in the future. As a REIT, the Company is
allowed to reduce taxable income by all or a portion of its distribution to
shareholders. As distributions have exceeded taxable income, no provision for
federal or state income taxes has been recorded.
22
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
A real estate investment trust is required to distribute to shareholders at
least 95% of its ordinary taxable income and meet certain income source and
investment restriction requirements. Taxable income differs from net income for
financial reporting purposes principally because of differences in the amount
and timing of depreciation of the properties. At December 31, 1996, the income
tax basis, net of accumulated tax depreciation, of the Company's real estate
properties was approximately $261 million.
Earnings Per Share. Primary earnings per share are based upon weighted average
number of shares outstanding during each period for capital stock and stock
options, when dilutive. The weighted average number of shares outstanding
were 8,432,676 in 1996, 8,690,063 in 1995, and 8,914,054 in 1994.
Fully-diluted per-share amounts are similarly computed, but also include the
effect, when dilutive, of the Company's outstanding Debentures. The Company's
outstanding Debentures are excluded in these calculations for 1996, 1995 and
1994, due to their antidilutive effect.
Preferred Stock. The rights and preferences of the Company's authorized
preferred stock may be fixed by the Board of Directors.
Stock Option Plans. Prior to January 1, 1996, the Company accounted for its
stock option plan in accordance with the provisions of Accounting Principles
Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and
related interpretations. As such, compensation expense was recorded on the date
of grant only if the current market price of the underlying stock exceeded the
exercise price. On January 1, 1996, the Company adopted SFAS No. 123, Accounting
for Stock-Based Compensation, which permits entities to recognize, as expense
over the vesting period, the fair value of all stock-based awards on the date of
grant. Alternatively, SFAS No. 123 also allows entities to continue to apply the
provisions of APB Opinion No. 25 and provide pro forma net income and pro forma
earnings per share disclosures for employee stock option grants made in 1995 and
future years as if the fair-value-based method defined in SFAS No. 123 had been
applied. The Company has elected to continue to apply the provisions of APB
Opinion No. 25 and provide the pro forma disclosure provisions of SFAS No. 123.
Extraordinary Item. Net income for 1996 includes an extraordinary non-cash
charge of $449,000 resulting from deferred financing costs expensed in
connection with the refinancing of approximately $20 million of mortgage debt.
Use of Estimates. The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual amounts could differ from these
estimates.
Reclassifications. Certain reclassifications have been made in the 1995 and 1994
Consolidated Financial Statements to conform to the 1996 financial statement
presentation.
NOTE B: REAL ESTATE INVESTMENTS
There were no acquisitions of real estate properties made by the Company in
1996. Certain real estate with a book value of approximately $104,000,000 at
December 31, 1996 is pledged as collateral for notes payable described in Note
D. In addition, certain notes are secured by assignments of rents and leases on
such real estate. Certain real estate is located on land subject to long-term
ground leases expiring at dates through 2046.
In 1995, the Company acquired an apartment property and additional outparcels
and other developable land adjacent to several retail centers owned by the
Company for approximately $5,594,000.
In 1994, the Company acquired a regional enclosed shopping mall, an apartment
property, and additional outparcels
23
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
and other developable land adjacent to several retail centers owned by the
Company for approximately $64,340,000. In connection with the acquisition of
these properties, the Company assumed mortgage notes payable totalling
$22,750,000, all of which was repaid in 1995.
NOTE C: REAL ESTATE OPERATIONS
The Company's principal business is investing in shopping centers and apartment
communities located in the southern United States. Tenants in the Company's
shopping centers include national, regional, and local retailers. Most of the
Company's shopping center leases provide for the payment of fixed monthly
rentals (minimum rents), reimbursement of common area maintenance, utilities,
taxes and insurance expenses, and payment of additional rents based upon a
percentage of retail sales in excess of stated minimums. The non-cancellable
portions of such lease terms range from one to forty years.
Financial instruments that potentially subject the Company to concentrations of
credit risk consist primarily of cash and cash equivalents with high credit-
quality financial institutions. With respect to accounts receivable and accrued
revenue, the Company believes that such items do not represent significant
concentrations of credit risk due to diversity in the Company's tenant base and
its geographical dispersion throughout the southern United States.
Rents and other income in the Company's Consolidated Statements of Income
include reimbursed expenses comprised of the following items:
YEAR ENDED DECEMBER 31,
----------------------------------
1996 1995 1994
---------- ---------- ----------
Common area maintenance $2,802,000 $2,841,000 $2,159,000
Real estate tax and insurance 1,796,000 1,631,000 1,407,000
Utility charges 949,000 1,011,000 898,000
Other tenant income 877,000 817,000 800,000
Other income 460,000 717,000 381,000
---------- ---------- ----------
$6,884,000 $7,017,000 $5,645,000
========== ========== ==========
The Company's shopping centers are leased to tenants under operating leases. The
future minimum rents on non-cancellable operating leases at December 31, 1996,
are as follows:
YEAR AMOUNT
---- ------------
1997 $ 16,827,000
1998 15,715,000
1999 14,652,000
2000 12,976,000
2001 11,931,000
Thereafter 72,780,000
------------
$144,881,000
============
The above amounts do not include rental income that is based on tenants' sales
or reimbursed expenses.
24
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
NOTE D: NOTES PAYABLE
The Company's mortgage notes payable at December 31, 1996 and 1995, are as
follows:
SECURED BY LAND, BALANCE
BUILDINGS, AND OUTSTANDING AT
IMPROVEMENTS, DECEMBER 31,
PRINCIPAL INTEREST WITH BOOK VALUE ON ----------------------------
MATURITY RATE(D) DECEMBER 31, 1996 1996 1995
- ------------------------ ----------- ------------------ -------------- ------------
March 1, 1998 (a) 9.00% $ 3,310,000 $ 1,984,000 $ 2,229,000
December 1, 1999 10.88% 4,442,000 3,527,000 3,561,000
May 1, 2000 8.35% 27,235,000 16,000,000 16,000,000
July 1, 2000 8.25% 10,415,000 6,783,000 6,852,000
November 1, 2000 7.70% 3,801,000 3,000,000 3,000,000
November 1, 2000 7.70% 4,052,000 3,600,000 3,600,000
November 1, 2000 7.70% 4,366,000 3,250,000 3,250,000
November 1, 2000 7.70% 5,149,000 3,220,000 3,220,000
November 1, 2000 7.70% 4,870,000 3,315,000 3,315,000
February 1, 2001 (b) 7.44% 19,052,000 12,200,000 12,025,000
February 1, 2001 (b) 7.44% 12,798,000 7,800,000 7,800,000
September 30, 2001 (c) 8.63% 4,443,000 3,401,000 3,465,000
------------ ----------- -----------
$103,933,000 $68,080,000 $68,317,000
============ =========== ===========
(a) In November 1996, the term of this mortgage note was extended one year
pursuant to the mortgage note agreement whereby the Company made a
principal payment of $210,000, which equaled 10% of the mortgage note
balance. Pursuant to the mortgage note agreement, the Company has the
option to extend the term for an additional one year period.
(b) In January 1996, the Company refinanced these mortgage notes, thereby
reducing the fixed rates of interest from 9.47% to 7.44%.
(c) In September 1996, the Company refinanced this mortgage note, thereby
reducing the fixed rate of interest from 9.75% to 8.63%.
(d) The weighted average interest rate on mortgage debt at December 31, 1996,
was 8.08%.
Future principal payments on the Company's mortgage notes payable at December
31, 1996, are as follows:
YEAR AMOUNT
------ -----------
1997 $ 293,000
1998 2,173,000
1999 3,679,000
2000 39,081,000
2001 22,854,000
-----------
$68,080,000
===========
In May 1993, the Company completed an offering of $65 million of 8% Convertible
Subordinated Debentures, due 2003 (less $2.6 million of underwriting costs). The
debentures are convertible into common stock of the Company, based on $13.00 per
share, at any time prior to maturity, unless previously redeemed. During 1994,
$77,000 of debentures were converted into 5,922 shares of common stock. No
debentures were converted in 1996 or 1995.
25
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
The Company has commitments for lines of credit from commercial banks totalling
$95 million, of which $42.4 million was available at December 31, 1996. The
weighted average interest rate was 7.64% and 8.55% for the years ended December
31, 1996 and 1995, respectively. The terms of the agreements for the bank lines
of credit are renewable on an annualized basis, and generally provide for the
right of the banks to terminate such commitments and to accelerate all
outstanding advances upon the occurrence of any material adverse change in the
financial condition or operation of the Company. In addition, the bank credit
agreements also contain restrictive covenants that impose maximum borrowing
levels by the Company through the maintenance of prescribed debt-to-equity or
other financial ratios. The Company was in compliance with the bank debt
covenant agreements at December 31, 1996.
NOTE E: STOCK OPTION AND OWNERSHIP PLANS
On February 1, 1996, the Company adopted the 1996 Stock Option Plan (the "1996
Plan"). Under the 1996 Plan, 10-year options may be granted to key employees,
and are annually granted to directors at the fair market value of the Company's
common stock on the date of grant. A total of 350,000 shares of common stock of
the Company shall be available for grant, of which a maximum of 125,000 shares
may be issued to non-employee directors upon the exercise of non-qualified stock
options granted. Options granted under the 1996 Plan vest, for key employees,
50% after one year, and the remaining 50% after two years, from the grant date;
for directors, 100% six months from the grant date. No options will be granted
under the 1996 Plan after February 1, 2006. During 1996, the Company granted
16,500 options under the 1996 Plan, with exercise prices ranging from $8.56 to
$9.13 per share. No options were exercisable under the 1996 Plan at December 31,
1996.
The Company had a 1986 Stock Option Plan (the "1986 Plan"), which terminated in
October 1996. Under the 1986 Plan, 10-year options were granted to key employees
and were annually granted to directors at the fair market value of the Company's
common stock at the date of grant. At December 31, 1996, there were a total of
311,000 shares of common stock reserved for issuance upon exercise of options
granted under the 1986 Plan. Options granted under the 1986 Plan vest, for key
employees, 50% after one year, and the remaining 50% after two years, from the
grant date; for directors, 100% six months from the grant date.
26
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
The Company applies APB Opinion No. 25 in accounting for its plans and,
accordingly, no compensation cost has been recognized for its stock options in
the financial statements. Had the Company determined compensation cost based on
the fair value at the grant date for its stock options under SFAS No. 123, the
Company's net income would have been reduced to pro forma amounts indicated
below:
AS REPORTED PRO FORMA RESULTS
---------------------- -----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
Net income $1,835,000 $2,694,000 $1,821,000 $2,686,000
========== ========== ========== ==========
Net income per share $ 0.22 $ 0.31 $ 0.22 $ 0.31
========== ========== ========== ==========
Pro forma net income reflects only options granted in 1996 and 1995. Therefore,
the full impact of calculating compensation cost for stock options under SFAS
No. 123 is not reflected in the pro forma net income amounts presented above
because compensation cost is reflected over the options' vesting period and
compensation cost for options granted prior to January 1, 1995 is not
considered.
The fair value of each option grant is estimated on the date of grant using an
option pricing model with the following assumptions used for grants in 1996 and
1995:
1996 1995
--------- ---------
Risk free interest rate 6.6% 6.8%
Expected life 10 years 10 years
Expected volatility 29.5% 29.5%
Expected dividend 10.5% 11.2%
The following summary is on the Company's 1996 and 1986 Plans combined for the
years ended December 31, 1996 and 1995:
1996 1995 1994
------------------ ------------------ --------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
-------- -------- -------- -------- --------- --------
Outstanding at beginning of year 309,500 $12.83 275,500 $13.15 296,500 $ 13.08
Granted 115,500 8.67 36,000 10.14 22,000 12.86
Exercised (10,000) 8.75 (2,000) 8.63 (10,000) 8.75
Expired (87,500) 13.02 0 0.00 (33,000) 13.68
------- ------ ------- ------ -------- -------
Outstanding at end of year 327,500 $11.44 309,500 $12.83 $275,500 $ 13.15
======= ====== ======= ====== ======== =======
Options exercisable at
December 31, 205,500 $13.00 279,500 $13.07 221,750 $ 13.14
======= ====== ======= ====== ======== =======
The weighted-average grant-date fair value of options granted in 1996 and 1995
was $8.67 and $10.14, respectively.
The following table summarizes information about the Company's stock option
plans outstanding at December 31, 1996:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
- ---------------------------------------------------------------------------- ----------------------------------------
NUMBER WEIGHTED-AVERAGE NUMBER
RANGE OF OUTSTANDING AT REMAINING WEIGHTED-AVERAGE EXERCISABLE AT WEIGHTED-AVERAGE
EXERCISE PRICES DECEMBER 31, 1996 CONTRACTUAL LIFE EXERCISE PRICE DECEMBER 31, 1996 EXERCISE PRICE
- ---------------------------------------------------------------------------- ----------------------------------------
$8.50-$10.13 145,500 8.6 yrs. $ 8.77 36,000 $ 9.13
$10.18-$12.94 56,000 7.5 yrs. 11.46 43,500 11.82
$13.56-$17.38 126,000 4.2 yrs. 14.51 126,000 14.51
--------------------------------------------------------- ----------------------------------------
327,500 6.7 yrs. $11.44 205,500 $13.00
========================================================= ========================================
The 1994 Directors' Stock Ownership Plan, effective in January 1994, provides
that directors of the Company, who are not salaried officers of the Company, are
entitled to receive an annual director's fee of 750 shares. The number of shares
entitled was amended to 1,000 shares, effective January 1, 1996, and amended to
1,500 shares, effective January 1, 1997. Alternatively, a director may elect to
be paid a cash substitute, equal to 90% of the value of the shares for which the
director elects the cash substitute, in lieu of all or part of the annual stock
award. In 1996, 1995, and 1994, 6,000, 5,250 and 4,500 shares were issued,
respectively.
The Company adopted an Incentive Award Plan, effective January 1, 1994. The
purpose of the Plan is to reward eligible officers of the Company on the basis
of their contribution to the Company, and in particular on the basis of their
contribution to the Company's achievement of planned growth in funds from
operations per share. The Plan is administered by a committee of the Board of
Directors of the Company, composed of those members of the Compensation
Committee. An award under this Plan is payable by the Company one-half in cash
and one-half in shares of common stock of the Company. The Company awarded
2,000 and 300 shares, in 1996 and 1995, respectively, recognizing compensation
costs totaling $35,000 and $5,000 respectively.
27
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
NOTE F: RELATED PARTY TRANSACTIONS
The Company has a contract with Sizeler Real Estate Management Co., Inc. (the
"Management Company") to manage the Company's real estate properties. Certain of
the Company's shareholders and an officer have an ownership interest in Sizeler
Realty Co., Inc. ("Sizeler Realty"), the parent of the Management Company. The
agreement is renewable annually, subject to the approval of a majority of the
unaffiliated directors of the Company, and subject to the termination rights of
the parties. The management agreement may be terminated for any reason by either
party upon 180 days' written notice.
The management fee is based on the Company's gross investment in real estate,
adjusted for year-to-year increases (or decreases) in funds from operations per
share. The annual management fee, which is calculated based upon .65% of the
Company's gross investment in real estate at the beginning of each year, is paid
ratably on a monthly basis, adjusted for acquisitions or dispositions of
property during a year. At the end of each year, the management fee for that
year will be adjusted (either upward or downward) by the percentage increase or
decrease in the Company's funds from operations per share, compared to the
previous year. Accordingly, the management fee paid to the Management Company
for 1996 was based upon .688% of the Company's gross investment in real estate
due to an increase in 1996 funds from operations per share as compared to 1995.
In 1995, the rate was adjusted to .643% of the Company's gross investment in
real estate due to a small decline in 1995 funds from operations per share as
compared to 1994. The Management Company also receives a leasing fee equal to 3%
of the total fixed minimum rent payable for retail properties during the term of
a new lease (2.5% on renewal leases). In addition to management and leasing
fees, the Management Company is reimbursed for certain administrative expenses
of the Company.
Under the management contract, the Company made cash payments to the Management
Company of $2,448,000, $2,388,000, and $1,779,000 in 1996, 1995, and 1994,
respectively. At December 31, 1996, $110,000 was accrued and payable, and no
amounts were accrued or payable at December 31, 1995.
The Company leases approximately 14,000 s.f. at the Westland Shopping Center to
Sizeler Realty. Under this lease, Sizeler Realty paid annual rent, including
expense reimbursements, of $100,000 in 1996, $96,000 in 1995, and $94,000 in
1994. The lease provides for three five-year renewal options.
The Company holds its interest in the Westland Shopping Center pursuant to a
long-term ground lease, expiring on December 31, 2046, with Trusts of certain
family members of an officer and director of the Company. The Company was
charged $52,000 in 1996 and in 1995, and $51,000 in 1994 under this lease.
In March 1991, the Company purchased a 50% interest in the Southwood Shopping
Center ("Southwood") from Sizeler Realty (LaPalco), Inc. ("LaPalco"), a wholly-
owned subsidiary of Sizeler Realty, for $900,000. Southwood is subject to a
long-term ground lease from certain family members of an officer and director of
the Company, expiring on March 31, 2031. The rent under the ground lease is 50%
of cash flow up to a maximum of $225,000, and, in the event the rental payment
shall reach $225,000 in any year, it shall remain fixed at $225,000 for each
year thereafter. No ground rent was payable under the lease agreement in 1996,
1995, or 1994. LaPalco is the primary obligor on a mortgage note payable,
guaranteed by Sizeler Realty, which LaPalco is solely obligated to pay out of
its partnership distributions or other sources. At December 31, 1996, the
balance of the mortgage note payable was $1,291,000. Although the Company is not
an obligor on the mortgage note payable, the partnership's interest in Southwood
is subordinated to the mortgage encumbering the property.
The Company incurred $41,000, $33,000, and $34,000 in 1996, 1995, and 1994,
respectively, for maintenance services provided by an affiliate of the
Management Company.
28
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
A director and officer of the Company is a director of Hibernia National Bank
("Hibernia"). At December 31, 1996, $20,000,000 of the Company's $95,000,000
bank lines of credit was provided by Hibernia. The Company had borrowings under
this line totalling $12,000,000 at December 31, 1996 and 1995.
NOTE G: DIVIDEND DISTRIBUTION
The dividends paid in 1996, 1995, and 1994 for federal income tax purposes were
as follows:
1996 1995 1994
----------------- ----------------- -----------------
PER PER PER
TOTAL SHARE TOTAL SHARE TOTAL SHARE
---------- ----- ---------- ----- ---------- -----
Ordinary income $3,118,000 $0.37 $3,080,000 $0.40 $6,156,000 $0.72
Return of capital 4,307,000 0.51 6,643,000 0.72 3,650,000 0.38
---------- ----- ---------- ----- ---------- -----
$7,425,000 $0.88 $9,723,000 $1.12 $9,806,000 $1.10
========== ===== ========== ===== ========== =====
NOTE H: SUBSEQUENT EVENTS (UNAUDITED)
On March 4, 1997, the Company paid a $.22 per share quarterly dividend, to
shareholders of record as of February 20, 1997.
NOTE I: CASH FLOWS
The Company, during 1996, refinanced three mortgage notes payable, whereby it
reduced fixed rates of interest from a high of 9.75% and 9.47% to a low of 8.63%
and 7.44%, respectively, and extended the maturity dates ranging from one to
five years. The Company also exercised an option to extend the maturity date on
another mortgage note payable for one year (see Note D).
The Company, during 1995, completed mortgage financing involving nine apartment
properties incurring mortgage notes payable totalling $52,210,000. A mortgage
note payable totalling $22,750,000, assumed in connection with the purchase of a
regional enclosed mall in 1994, was repaid in 1995.
Cash interest payments made in 1996, 1995, and 1994 totalled $14,659,000,
$14,631,000, and $10,250,000, respectively.
NOTE J: COMMITMENTS AND CONTINGENCIES
The Company's officers defer a portion of their current compensation. Total
charges to earnings associated with such deferred compensation were $114,000,
$294,000, and $218,000, in 1996, 1995, and 1994, respectively.
The Company, from time to time, may be subject to litigation arising from the
conduct of its business. Management of the Company does not believe that any
existing litigation involving the Company will materially affect its financial
condition or future results of operations.
NOTE K: MINORITY INTEREST IN REAL ESTATE PARTNERSHIPS
The Company, directly or through wholly-owned subsidiaries, owns its interests
in its Louisiana-based properties (with the exception of the Southwood Shopping
Center) through separate partnerships, in which the Company has a 99% interest
and its partner has a 1% interest. In each case, its partner is a wholly-owned
subsidiary of Sizeler Realty (see Note F). The Company's consolidated financial
statements include 100% of the assets, liabilities, and operations of its
29
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Louisiana-based properties. Sizeler Realty's ownership portion is reflected in
the Company's consolidated financial statements as minority interest.
NOTE L: SHAREHOLDERS' RIGHTS PLAN
In 1989, the Company's Board of Directors adopted a shareholders' rights plan
(the "Plan") and simultaneously declared a dividend of one share purchase right
("right") for each outstanding share of the Company's Common Stock outstanding
at May 19, 1989, and any stock subsequently issued. The rights do not become
exercisable until the earlier of (i) the date of the Company's public
announcement that a person or affiliated group has acquired, or obtained the
right to, beneficial ownership of 20% or more of the Company's Common Stock,
(ii) ten business days following the commencement of a tender offer that would
result in a person or affiliated group owning 30% or more of the Company's
Common Stock, or (iii) ten business days after the Company's Board of Directors
determines that a person or affiliated group has become the beneficial owner of
at least 15% of the Company's Common Stock and that person or affiliated group
intends to sell these shares back to the Company causing a material adverse
impact to the Company.
The exercise price of a right has been established at $60. Once exercisable,
each right would entitle the holder to purchase common stock of the Company
having a value equal to two times the value of the right. The rights expire on
May 19, 1999.
NOTE M: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosure of the estimated fair value of financial instruments is
made in accordance with the requirements of SFAS No. 107, Disclosure about Fair
Value of Financial Instruments. The estimated fair value amounts have been
determined by the Company using available market information and appropriate
valuation methodologies and are described in the following paragraphs.
Fair value estimates are subject to certain inherent limitations. Estimates of
fair value are made at a specific point in time, based on relevant market
information and information about the financial instrument. The estimated fair
values of financial instruments presented below are not necessarily indicative
of amounts the Company might realize in actual market transactions. Estimates of
fair value are subjective in nature and involve uncertainties and matters of
significant judgement and, therefore, cannot be determined with precision.
Changes in assumptions could significantly affect the estimates.
The carrying amounts of cash and cash equivalents, accounts receivable and
accrued revenue, accounts payable, accrued expenses and deposits approximate
fair value because of the short maturity of these items. The carrying amounts of
notes payable outstanding under the Company's lines of credit with commercial
banks approximate fair value because the interest rates on these instruments
change with market interest rates.
The carrying value of mortgage notes payable is $68.1 million and $68.3 million
at December 31, 1996 and 1995, respectively, while the estimated fair value is
$67.7 million and $70.9 million, respectively. The estimated fair value is based
upon interest rates available to the Company for issuance of similar debt with
similar terms and remaining maturities. The estimated fair value of the
Company's 8% convertible subordinated debentures, with a carrying value of $62.9
million at December 31, 1996 and 1995, was $57.5 million and $54.2 million,
respectively, based upon the quoted market prices of the securities as of the
end of the respective years.
30
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
NOTE N: QUARTERLY FINANCIAL DATA (UNAUDITED)
Summarized (unaudited) quarterly financial data for the years ended 1996 and
1995 are as follows (in thousands, except per share data):
THREE MONTHS ENDED IN 1996
--------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
-------- ------- ------------ -----------
Revenues $10,849 $10,914 $11,167 $11,428
Income before gains (losses) and
extraordinary item $ 591 $ 546 $ 531 $ 616
Net income $ 142 $ 546 $ 531 $ 616
Net income per share $ 0.02 $ 0.07 $ 0.06 $ 0.07
THREE MONTHS ENDED IN 1995
--------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
-------- ------- ------------ -----------
Revenues $10,520 $10,611 $10,759 $11,303
Income before gains (losses) and
extraordinary item $ 695 $ 621 $ 693 $ 685
Net income $ 695 $ 621 $ 693 $ 685
Net income per share $ 0.08 $ 0.07 $ 0.08 $ 0.08
31
SCHEDULE II
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
---------- --------- ----------- --------
BALANCE AT ADDITIONS BALANCE
BEGINNING CHARGED TO AT END
OF PERIOD OPERATIONS DEDUCTIONS OF PERIOD
---------- ---------- ---------- ---------
Year ended December 31, 1996
Allowance for doubtful accounts $166,000 $191,000 $153,000 $204,000
======== ======== ======== ========
Year ended December 31, 1995
Allowance for doubtful accounts $321,000 $214,000 $369,000 $166,000
======== ======== ======== ========
Year ended December 31, 1994
Allowance for doubtful accounts $261,000 $134,000 $ 74,000 $321,000
======== ======== ======== ========
32
SCHEDULE III
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1996
COLUMN D
COLUMN A COLUMN B COLUMN C ------------- COLUMN E
- ----------- ----------- ----------------------- COST ----------------------------------------
CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT AT WHICH
INITIAL COST TO COMPANY ACQUISITION CARRIED AT CLOSE OF PERIOD
----------------------- ------------ ----------------------------------------
BUILDINGS & NET BUILDING &
DESCRIPTION ENCUMBRANCE LAND IMPROVEMENTS IMPROVEMENTS LAND IMPROVEMENTS TOTAL
- ----------- ----------- ---------- ------------ ------------ ------------ ------------- ------------
Regional enclosed malls:
Hammond Square $ 0 $ 2,574,000 $ 23,664,000 $ 1,649,000 $ 2,559,000 $ 25,328,000 $ 27,887,000
North Shore Square 0 4,000,000 30,150,000 3,481,000 4,058,000 33,573,000 37,631,000
Southland 0 2,408,000 28,289,000 11,134,000 2,937,000 38,894,000 41,831,000
----------- ----------- ------------ ----------- ----------- ------------ ------------
0 8,982,000 82,103,000 16,264,000 9,554,000 97,795,000 107,349,000
----------- ----------- ------------ ----------- ----------- ------------ ------------
Power shopping centers:
Lantana Plaza 0 6,000,000 14,107,000 3,460,000 7,808,000 15,759,000 23,567,000
Westward Plaza 0 5,676,000 13,506,000 2,856,000 5,677,000 16,361,000 22,038,000
----------- ----------- ------------ ----------- ----------- ------------ ------------
0 11,676,000 27,613,000 6,316,000 13,485,000 32,120,000 45,605,000
----------- ----------- ------------ ----------- ----------- ------------ ------------
Community shopping centers:
Airline Park 0 977,000 1,037,000 67,000 977,000 1,104,000 2,081,000
Azalea Gardens 0 574,000 806,000 496,000 574,000 1,302,000 1,876,000
Camelot Plaza 1,984,000 993,000 2,281,000 346,000 1,126,000 2,494,000 3,620,000
Colonial 0 554,000 555,000 259,000 559,000 809,000 1,368,000
Delchamps Plaza 3,527,000 713,000 4,381,000 91,000 713,000 4,472,000 5,185,000
Rainbow Square 3,401,000 970,000 4,443,000 104,000 984,000 4,533,000 5,517,000
Town & Country 0 860,000 3,194,000 746,000 1,491,000 3,309,000 4,800,000
Weeki Wachee 0 2,185,000 4,179,000 636,000 2,819,000 4,181,000 7,000,000
Westgate 0 1,809,000 2,162,000 761,000 1,774,000 2,958,000 4,732,000
Westland (e) 0 0 3,068,000 2,039,000 0 5,107,000 5,107,000
----------- ----------- ------------ ----------- ----------- ------------ ------------
8,912,000 9,635,000 26,106,000 5,545,000 11,017,000 30,269,000 41,286,000
----------- ----------- ------------ ----------- ----------- ------------ ------------
Apartments:
Bel Air 3,250,000 500,000 3,674,000 718,000 500,000 4,392,000 4,892,000
Bryn Mawr 6,783,000 1,575,000 9,020,000 670,000 1,575,000 9,690,000 11,265,000
Colonial Manor 0 212,000 771,000 321,000 212,000 1,092,000 1,304,000
Garden Lane 3,600,000 500,000 3,117,000 931,000 500,000 4,048,000 4,548,000
Georgian 0 839,000 2,420,000 1,133,000 839,000 3,553,000 4,392,000
Hampton Park 5,460,000 1,305,000 6,616,000 2,447,000 1,305,000 9,063,000 10,368,000
Jamestown 3,220,000 712,000 4,035,000 666,000 712,000 4,701,000 5,413,000
Lafayette Square 12,200,000 2,632,000 14,282,000 4,465,000 2,632,000 18,747,000 21,379,000
Lakeview Club 16,000,000 4,400,000 23,200,000 1,463,000 4,400,000 24 663,000 29,063,000
Magnolia Place 0 175,000 2,050,000 391,000 175,000 2,441,000 2,616,000
Pine Bend 2,340,000 450,000 3,029,000 485,000 450,000 3,514,000 3,964,000
Steeplechase 3,000,000 458,000 3,068,000 1,137,000 594,000 4,069,000 4,663,000
Woodcliff 3,315,000 695,000 4,047,000 627,000 695,000 4,674,000 5,369,000
----------- ----------- ------------ ----------- ----------- ----------- ------------
59,168,000 14,453,000 79,329,000 15,454,000 14,589,000 94,647,000 109,236,000
----------- ----------- ------------ ----------- ----------- ------------ ------------
TOTAL $68,080,000 $44,746,000 $215,151,000 $43,579,000 $48,645,000 $254,831,000 $303,476,000
=========== =========== ============ =========== =========== ============ ============
COLUMN F COLUMN G COLUMN H COLUMN I
------------ ------------ -------- --------------
LIFE ON
WHICH
DEPRECIATION
IN LATEST
INCOME
ACCUMULATED DATE OF DATE STATEMENTS IS
DESCRIPTIONS DEPRECIATION CONSTRUCTION ACQUIRED COMPLETED
- ------------ ------------ ------------ -------- --------------
Regional enclosed malls:
Hammond Square $ 6,306,000 1978 1987 10-40 yrs
North Shore Square 2,778,000 1986 1994 10-40 yrs
Southland 9,018,000 1970, 1981,1994 1986 10-40 yrs
------------ 1994
18,102,000
------------
Power shopping centers:
Lantana Plaza 1,249,000 1992 1993 10-40 yrs
Westward Plaza 2,072,000 1961,1990,1995 1992 10-40 yrs
------------
3,321,000
------------
Community shopping centers:
Airline Park 296,000 1973 1987 10-40 yrs
Azalea Gardens 331,000 1950 1987 10-40 yrs
Camelot Plaza 310,000 1981 1992 10-40 yrs
Colonial 260,000 1967 1987 10-40 yrs
Delchamps Plaza 743,000 1989 1991 10-40 yrs
Rainbow Square 1,074,000 1986 1988 10-40 yrs
Town & Country 254,000 1989 1993 10-40 yrs
Weeki Wachee 1,037,000 1987 1988 10-40 yrs
Westgate 846,000 1964 1987 10-40 yrs
Westland (e) 1,262,000 1966 1987 10-40 yrs
--------------
6,413,000
--------------
Apartments:
Bel Air 526,000 1968,1974 1992 10-40 yrs
Bryn Mawr 850,000 1991 1993 10-40 yrs
Colonial Manor 293,000 1967 1987 10-40 yrs
Garden Lane 496,000 1966,1971 1992 10-40 yrs
Georgian 480,000 1951,1980 1992 10-40 yrs
Hampton Park 989,000 1977 1993 10-40 yrs
Jamestown 264,000 1971-1972 1995 10-40 yrs
Lafayette Square 2,153,000 1969-1972 1993 10-40 yrs
Lakeview Club 1,831,000 1992 1994 10-40 yrs
Magnolia Place 429,000 1984 1991 10-40 yrs
Pine Bend 386,000 1979 1992 10-40 yrs
Steeplechase 485,000 1982 1992 10-40 yrs
Woodcliff 500,000 1977 1993 10-40 yrs
-----------
9,682,000
-----------
TOTAL $37,518,000
===========
NOTE: This schedule does not incude the Company's 50% interest in a real estate partnership.
33
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - (CONTINUED)
Note (a) Changes in real estate owned were as follows:
1996 1995 1994
------------ ------------ ------------
Balance at beginning of year $295,921,000 $278,725,000 $202,530,000
Additions during period:
Investments in properties - 5,594,000 64,340,000
Improvements 7,555,000 11,602,000 11,855,000
------------ ------------ ------------
Balance at end of year $303,476,000 $295,921,000 $278,725,000
============ ============ ============
Note (b) Changes in accumulated depreciation of real estate assets owned were as follows:
1996 1995 1994
------------ ------------ ------------
Balance at beginning of year $ 29,041,000 $ 21,309,000 $ 15,409,000
Additions during period:
Depreciation on real estate assets 8,477,000 7,732,000 5,900,000
------------ ------------ ------------
Balance at end of year $ 37,518,000 $ 29,041,000 $ 21,309,000
============ ============ ============
Note (c) The income tax basis of real estate, net of accumulated tax depreciation, is approximate ly $261,355,000 at
December 31, 1996.
Note (d) Depreciation is provided by the straight-line method over the estimated useful lives, wh ich are as follows:
Buildings and improvements 10-40 years
Parking lots 20 years
Tenant improvements Lease term
Note (e) The Company holds its interest in the Westland Shopping Center under a long-term ground lease.
34
FORM 10-K EXHIBITS
NUMBER TITLE METHOD OF FILING
------ ----- ----------------
3.1A Restated Certificate of Incorporation, as amended Incorporated by Reference (1)
3.1B Amendment No. 1 to Restated Certificate of Incorporated by Reference (6)
Incorporation, as amended
3.1C Amendment No. 2 to Restated Certificate of Incorporated by Reference (12)
Incorporation, as amended
3.2 Restated By-Laws as amended through February 26, 1996 Incorporated by Reference (8)
4.0A Form of Certificate for Common Stock, $.01 par value Incorporated by Reference (3)
4.1A Indenture for the Registrant's 8% Convertible Incorporated by Reference (13)
Subordinated Debentures, due 2003
4.2A Debenture for the Registrant's 8% Convertible Incorporated by Reference (13)
Subordinated Debentures, due 2003
10.1A Management Agreement Incorporated by Reference (1)
10.1B Amendment No. 1 to Management Agreement Incorporated by Reference (3)
10.1C Amendment No. 2 to Management Agreement Incorporated by Reference (4)
10.1D Amendment No. 3 to Management Agreement Incorporated by Reference (10)
10.1E Amendment No. 5 to Management Agreement Incorporated by Reference (12)
10.1F Amendment No. 4 to Management Agreement Incorporated by Reference (16)
10.1G Amendment No. 6 to Management Agreement Incorporated by Reference (16)
10.1H Amendment No. 7 to Management Agreement Incorporated by Reference (16)
10.2 Form of Indemnification Agreement (which the Company Incorporated by Reference (1)
has entered into with each officer and director)
10.3 Form of Right of First Refusal which has been Incorporated by Reference (2)
Entered into by the Company and each of Sidney W.
Lassen and Sizeler Realty Co., Inc.
10.4 The Company's 1986 Stock Option Plan, as amended Incorporated by Reference (9)
through January 25, 1991*
10.5 Form of Deferred Compensation Agreement (the Incorporated by Reference (11)
Company has such an agreement with Sidney W.
Lassen)*
10.6 The Company's 1989 Directors Stock Option Plan Incorporated by Reference (5)
10.7 Sizeler Property Investors, Inc. Incentive Award Incorporated by Reference (14)
Plan*
10.8 First Amendment to the Sizeler Property Investors, Incorporated by Reference (14)
Inc. Incentive Award Plan*
10.9 Sizeler Property Investors, Inc. 1994 Directors' Incorporated by Reference (17)
Stock Ownership Plan, as amended
10.10 Agreement between the Company and Sidney W. Lassen* Incorporated by Reference (14)
10.11 Agreement between the Company and Thomas A.
Masilla, Jr.* Incorporated by Reference (15)
10.12 Non-Elective Deferred Compensation Agreement Incorporated by Reference (15)
between Company and Thomas A. Masilla, Jr.
(The Company also has a Non-Elective Deferred
Compensation Agreement with Sidney W. Lassen,
which is identical to Mr. Masilla's Agreement).*
10.13 The Company's 1996 Stock Option Plan, as amended Incorporated by Reference (17)
19.1 The Company's Shareholder Rights Plans dated as of Incorporated by Reference (7)
April 28, 1989
19.2 First Amendment to Shareholder Rights Plan Incorporated by Reference (8)
21. List of Subsidiaries Filed herewith
24.1 Consent of KPMG Peat Marwick LLP Filed herewith
24.2 Consent of Ernst & Young LLP Filed herewith
35
- ---------------
(1) Incorporated by reference to the exhibits filed on November 5, 1986, with
the Company's original registration statement on Form S-11 (No. 33-9973).
(2) Incorporated by reference to the exhibits filed on November 24, 1986, with
Amendment No. 1 to the Company's registration statement on Form S-11.
(3) Incorporated by reference to the exhibits filed on January 14, 1987, with
Amendment No. 3 to the Company's registration statement on Form S-11.
(4) Incorporated by reference to the exhibits filed on February 6, 1987, with
Post-Effective Amendment No. 1 to the Company's registration statement on
Form S-11.
(5) Incorporated by reference to the Exhibit A to the Company's Proxy
Statement, dated March 23, 1989.
(6) Incorporated by reference to the exhibits to the Company's Form 10-K
for the year ended December 31, 1988.
(7) Incorporated by reference to the exhibit to the Company's Form 8-A, filed
on May 4, 1989.
(8) Incorporated by reference to the exhibits to the Company's Form 8-K, dated
February 27, 1996.
(9) Incorporated by reference to the Exhibit A to the Company's Proxy
Statement, dated April 5, 1991.
(10) Incorporated by reference to the exhibits filed with the Company's Form 10-
K for the year ended December 31, 1990.
(11) Incorporated by reference to the exhibits filed with the Company's Form 10-
K for the year ended December 31, 1991.
(12) Incorporated by reference to the exhibits filed with the Company's Form 10-
K for the year ended December 31, 1992.
(13) Incorporated by reference to the exhibits filed with the Company's Form 8-
K, dated May 26, 1993.
(14) Incorporated by reference to the exhibits filed on March 7, 1994, with the
Company's registration statement on Form S-3 (No. 33-76134).
(15) Incorporated by reference to the exhibits filed with the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1995.
(16) Incorporated by reference to the Exhibits filed with the Company's Annual
Report on Form 10-K for the year ended December 31, 1995.
(17) Incorporated by reference to the exhibits to the Company's definitive proxy
material for its 1997 Annual Meeting of Stockholders.
* Management compensation plan agreements.
36
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf of the undersigned, thereunto duly authorized.
Sizeler Property Investors, Inc.
By: /s/Sidney W. Lassen
---------------------------
Sidney W. Lassen
Chairman of the Board
(Principal Executive Officer)
Date: March 26, 1997
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT
HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND
IN THE CAPACITIES AND ON THE DATES INDICATED.
Signature Title Date
--------- ----- ----
By: /s/ SIDNEY W. LASSEN Chairman of the Board March 26, 1997
---------------------------- (Principal Executive Officer)
Sidney W. Lassen
By: /s/ THOMAS A. MASILLA, JR. Vice Chairman, President and March 26, 1997
--------------------------- Director (Principal Operating
Thomas A. Masilla, Jr. and Chief Financial Officer)
By: /s/ DAVID A. O'FLYNN, JR. Controller/Secretary March 26, 1997
--------------------------- (Principal Accounting Officer)
David A. O'Flynn, Jr.
By: /s/ J. TERRELL BROWN Director March 26, 1997
---------------------------
J. Terrell Brown
By: /s/ FRANCIS L. FRAENKEL Director March 26, 1997
---------------------------
Francis L. Fraenkel
By: /s/ HAROLD B. JUDELL Director March 26, 1997
---------------------------
Harold B. Judell
By: /s/ JAMES W. McFARLAND Director March 26, 1997
---------------------------
James W. McFarland
By: /s/ RICHARD L. PEARLSTONE Director March 26, 1997
---------------------------
Richard L. Pearlstone
By: /s/ THEODORE H. STRAUSS Director March 26, 1997
---------------------------
Theodore H. Strauss
37