UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-KA
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 31, 2004
--------------
ONE LIBERTY PROPERTIES, INC.
----------------------------
(Exact name of registrant as specified in charter)
Maryland 001-09279 13-3147497
------------------------------------------------------------------------------
(State or other (Commission File No.) (IRS Employer
jurisdiction of I.D. No.)
incorporation)
60 Cutter Mill Road, Suite 303, Great Neck, New York 11021
----------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 516-466-3100
------------
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant hereby amends the following items, financial statements, exhibits or
other portions of its Current Report on Form 8-K dated March 31, 2004, as set
forth in the pages attached hereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) and (b) Financial Statements of Property Acquired and Pro Forma
Financial Statements
Report of Independent Auditors 1
Statement of Revenues and Certain Expenses 2
Notes to Statement of Revenues and Certain Expenses 3-4
One Liberty Pro Forma Consolidated Financial Statements (Unaudited)
Pro Forma Consolidated Financial Statements (Unaudited) 5
Pro Forma Consolidated Income Statements (Unaudited) 6-7
Notes to Pro Forma Consolidated Income Statements (Unaudited) 8-9
(c) Exhibits
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ONE LIBERTY PROPERTIES, INC.
Dated: Great Neck, NY By: /s/ David W. Kalish
June 10, 2004 ----------------------------------
David W. Kalish
Senior Vice President and
Chief Financial Officer
Report of Independent Auditors
Board of Directors and Stockholders
One Liberty Properties, Inc.
We have audited the statement of revenues and certain expenses of CarMax Auto
Dealership ("CarMax") as described in Note 1 to be acquired by OLP Knoxville
LLC, a wholly owned subsidiary of One Liberty Properties, Inc. (the "Company")
for the period from July 28, 2003 (commencement of lease) to December 31, 2003.
The statement of revenues and certain expenses is the responsibility of the
Company's management. Our responsibility is to express an opinion on this
statement of revenues and certain expenses based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the statement of revenues and
certain expenses is free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
statement of revenues and certain expenses. An audit also includes assessing the
accounting principles used and the significant estimates made by management, as
well as evaluating the overall statement of revenues and certain expenses
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with Rule 3-14 of Regulation S-X of the Securities and
Exchange Commission for inclusion in Form 8-K of One Liberty Properties, Inc.
and is not intended to be a complete presentation of CarMax's revenues and
expenses.
In our opinion, the statement of revenues and certain expenses referred to above
presents fairly, in all material respects, the revenues and certain expenses of
CarMax as described in Note 1 for the year ended December 31, 2003, in
conformity with accounting principles generally accepted in the United States.
New York, New York /s/ Ernst & Young LLP
March 15, 2004
1
CarMax Auto Dealership
Statement of Revenues and Certain Expenses
For the Period
July 28, 2003
(lease commence-
Three months ended ment) to
March 31, December 31,
2004 2003
---- ----
(unaudited)
Revenues:
Base rents $ 251,016 $ 429,155
--------- ---------
Total rental revenue 251,016 429,155
--------- ---------
Certain expenses:
Property operating expenses - -
--------- ---------
Total certain expenses - -
--------- ---------
Revenues in excess of certain expenses $ 251,016 $ 429,155
========= =========
See accompanying notes.
2
CarMax Auto Dealership
Notes to Statement of Revenues and Certain Expenses
December 31, 2003
1. Organization and Basis of Presentation
Presented herein is the statement of revenues and certain expenses related to
the operation of CarMax (the "Property"), an auto dealership located in
Knoxville, Tennessee for the period from July 28, 2003 (lease commencement) to
December 31,2003. The Property which has approximately 35,330 square feet of
leasable space is leased in its entirety by CarMax, Inc. The Property, which is
currently owned by GECBAF Rainier Trust, is not a legal entity, but rather a
property which is under contract for purchase by OLP Knoxville LLC, a wholly
owned subsidiary of One Liberty Properties, Inc. (the "Company").
The accompanying statement of revenues and certain expenses has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for the acquisition of real estate properties. Accordingly,
the statement of revenues and certain expenses exclude certain expenses that may
not be comparable to those expected to be incurred in the future operations of
the aforementioned property. Items excluded consist of interest, depreciation,
and amortization.
2. Use of Estimates
The preparation of the statement of revenues and certain expenses in conformity
with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the statement of revenues and certain expenses and accompanying notes. Actual
results could differ from those estimates.
3. Revenue Recognition
The lease with the tenant is accounted for as an operating lease. Rental income
includes base rent that the tenant is required to pay in accordance with the
terms of its lease.
4. Risks and Uncertainties
The Property is leased to a single tenant, CarMax, Inc. ("the Tenant"), which
occupies 100% of the Property's total gross leasable area under a triple-net
lease. Therefore, the Property's results of operations are significantly
dependent on the overall health of the Tenant and the auto industry.
3
CarMax Auto Dealership
Notes to Statement of Revenues and Certain Expenses (Continued)
5. Future Minimum Rents
Future minimum lease payments to be received by the Property as of December 31,
2003 under a noncancellable operating lease are approximately as follows:
2004 $ 1,004,063
2005 1,004,063
2006 1,004,063
2007 1,004,063
2008 1,004,063
Thereafter 9,622,266
---------
$14,642,581
6. Interim Unaudited Financial Information
The statement of revenues and certain expenses for the three months ended March
31, 2004 is unaudited, however, in the opinion of management, all adjustments
(consisting solely of normal, recurring adjustments) necessary for the fair
presentation of the statement of revenues and certain expenses for the interim
period have been included. The results of the interim period are not necessarily
indicative of the results to be obtained for a full fiscal year.
4
One Liberty Properties, Inc.
Pro Forma Consolidated Financial Statements
(Unaudited)
On March 31, 2004, OLP Knoxville LLC, a wholly-owned subsidiary of One Liberty
Properties, Inc. (the "Company") acquired real estate, in an arms length
transaction, which is leased in its entirety by CarMax, Inc., an auto dealership
located in Knoxville, Tennessee (the "Property").
The unaudited pro forma consolidated income statements for the year ended
December 31, 2003 and for the three months ended March 31, 2004, are presented
as if the Company's acquisition of the Property had occurred on July 28, 2003
(commencement of lease) and the effect was carried forward through the year
ended December 31, 2003 and three month period ended March 31, 2004.
The pro forma consolidated financial statements do not purport to represent what
the Company's financial position or results of operations would have been
assuming the completion of the Company's acquisition of the Property had
occurred on July 28, 2003 (commencement of lease), nor do they purport to
project the Company's financial position or results of operations at any future
date or for any future period. These pro forma consolidated financial statements
should be read in conjunction with (a) the Company's 2003 annual report on Form
10-K and the Company's Quarterly report on Form 10-Q for the period ended March
31, 2004 and (b) the Company's Form 8-K filed on March 31, 2004.
5
One Liberty Properties, Inc.
Pro Forma Consolidated Income Statement (Unaudited)
For the Year Ended December 31, 2003
(Amounts in thousands, except per share data)
The Pro The
Company Purchase Forma Company
Historical of Adjust- Pro Forma
(A) Property (B) ments as Adjusted
---------- ------------ -------- -----------
Revenues:
Rental income $ 19,284 $ 429 $ (3)(C) $ 19,710
Interest and other income (including
$194 from an affiliated joint venture) 512 - - 512
-------- -------- -------- --------
19,796 429 (3) 20,222
-------- -------- -------- --------
Expenses:
Depreciation and amortization 3,473 - 107 (D) 3,580
Interest - mortgages payable 6,844 - 198 (E) 7,042
Interest - line of credit 564 - - 564
General and administrative 2,203 - - 2,203
Public offering expenses 69 - - 69
Real estate expenses 543 - - 543
-------- -------- -------- --------
13,696 - 305 14,001
-------- -------- -------- --------
Earnings before equity in earnings of
unconsolidated joint ventures and
gain on sale 6,100 429 (308) 6,221
Equity in earnings of unconsolidated
joint ventures 2,411 - - 2,411
Gain on sale of real estate 14 - - 14
-------- -------- -------- --------
Net income $ 8,525 $ 429 $ (308) $ 8,646
======== ======== ======== ========
Calculation of net income applicable to common stockholders:
Net income $ 8,525 $ 429 $ (308) $ 8,646
Less dividends on preferred stock 1,037 - - 1,037
-------- -------- -------- --------
Net income applicable to
common stockholders $ 7,488 $ 429 $ (308) $ 7,609
======== ======== ======== ========
Net income per common share
Basic (F) $ 1.18 $ 1.20
======== ========
Diluted (F) $ 1.18 $ 1.20
======== ========
See accompanying notes.
6
One Liberty Properties, Inc.
Pro Forma Consolidated Income Statement (Unaudited)
For the Three Months Ended March 31, 2004
(Amounts in thousands, except per share data)
The Pro The
Company Purchase Forma Company
Historical of Adjust- Pro Forma
(A) Property (B) ments as Adjusted
---------- ------------ ------- -----------
Revenues:
Rental income $ 5,558 $ 251 $ (4)(C) $ 5,805
Interest and other income 92 - - 92
-------- -------- -------- --------
5,650 251 (4) 5,897
-------- -------- -------- --------
Expenses:
Depreciation and amortization 1,024 - 49 (D) 1,073
Interest - mortgages payable 2,011 - 114 (E) 2,125
Interest - line of credit 51 - - 51
General and administrative 855 - - 855
Real estate expenses 140 - - 140
-------- -------- -------- --------
4,081 - 163 4,244
-------- -------- -------- --------
Earnings before equity in earnings of
unconsolidated joint ventures and gain
on sale 1,569 251 (167) 1,653
Equity in earnings of unconsolidated
joint ventures 675 - - 675
Gain on sale of available-for-sale securities 1 - - 1
-------- -------- -------- --------
Net income $ 2,245 $ 251 $ (167) $ 2,329
======== ======== ======== ========
Calculation of net income applicable to common stockholders:
Net income $ 2,245 $ 251 $ (167) $ 2,329
Less dividends on preferred stock - - - -
-------- -------- -------- --------
Net income applicable to
common stockholders $ 2,245 $ 251 $ (167) $ 2,329
======== ======== ======== ========
Net income per common share
Basic (F) $ .23 $ .24
======== ========
Diluted (F) $ .23 $ .24
======== ========
See accompanying notes.
7
One Liberty Properties, Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
1. Notes to Pro Forma Consolidated Income Statement for the Year Ended December
31, 2003
(A) To reflect the consolidated historical income statement of the Company
for the year ended December 31, 2003, as reported on the Company's Form
10-K.
(B) To reflect the historical operations of the Property for the period
from July 28, 2003 (commencement of lease) to December 31, 2003.
(C) To reflect the amortization of the value of the in-place lease, in
accordance with SFAS 141 and 142, over the remaining life of the lease
(approximately fifteen years).
(D) To reflect straight line depreciation for the Property based on an
estimated useful life of 40 years for the period from July 28, 2003 to
December 31, 2003. Also includes straight line amortization of tenant
origination costs, in accordance with SFAS 141 and 142, over the
remaining life of the lease (approximately fifteen years).
(E) To reflect the interest expense for borrowings under the mortgage note
assumed and secured by the Property (approximately $7.08 million at
6.5%).
(F) Basic net income per common share is calculated based on approximately
6,329,000 weighted average common shares outstanding and diluted net
income per common share is calculated based on approximately 6,361,000
weighted average common shares and common share equivalents
outstanding.
2. Notes to Pro Forma Consolidated Income Statement for the Three Months Ended
March 31, 2004
(A) To reflect the consolidated historical income statement of the Company
for the three months ended March 31, 2004, as reported on the Company's
Quarterly Report on Form 10-Q.
(B) To reflect the historical operations of the Property for the three
months ended March 31, 2004.
(C) To reflect the amortization of the value of the in-place lease, in
accordance with SFAS 141 and 142, over the remaining life of the lease
(approximately fifteen years). Also deducts the rental income for the
one day of the Property that is included in the Company's historical
income statement for the three months ended March 31, 2004.
(D) To reflect straight line depreciation for the Property based on an
estimated useful life of 40 years less the depreciation for the
Property that is included in the Company's historical income statement
for the three months ended March 31, 2004. Also includes straight line
amortization of tenant origination costs, in accordance with SFAS 141
and 142, over the remaining life of the lease (approximately fifteen
years).
8
One Liberty Properties, Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited) - Continued
(E) To reflect the interest expense for borrowings under the mortgage note
assumed and secured by the Property (approximately $7.08 million at
6.5%).
(F) Basic net income per common share is calculated based on approximately
9,635,000 weighted average common shares outstanding and diluted net
income per common share is calculated based on approximately 9,669,000
weighted average common shares and common share equivalents
outstanding.
9