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The factors that affect the value of our real estate include, among other things: · national, regional and local economic conditions; · competition from other available space; · local conditions such as an oversupply of space or a reduction in demand for real estate in the area; · how well we manage our properties; · changes in market rental rates; · the timing and costs associated with property improvements and rentals; · whether we are able to pass all or portions of any increases in operating costs through to tenants; · changes in real estate taxes and other expenses; · whether tenants and users such as customers and shoppers consider a property attractive; · the financial condition of our tenants, including the extent of tenant bankruptcies or defaults; · availability of financing on acceptable terms or at all; · fluctuations in interest rates; · our ability to obtain adequate insurance; · changes in zoning laws and taxation; · government regulation; · consequences of any armed conflict involving, or terrorist attack against, the United States; · potential liability under environmental or other laws or regulations; · natural disasters; · general competitive factors; and · climate changes.
Among the factors that could affect the price of our common shares are: · our financial condition and performance; · the financial condition of our tenants, including the extent of tenant bankruptcies or defaults; · actual or anticipated quarterly fluctuations in our operating results and financial condition; · the reputation of REITs and real estate investments generally and the attractiveness of REIT equity securities in comparison to other equity securities, including securities issued by other real estate companies, and fixed income securities; · uncertainly and volatility in the equity and credit markets; · changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other real estate investment trusts; · failure to meet analysts’ revenue or earnings estimates; · speculation in the press or investment community; · strategic actions by us or our competitors, such as acquisitions or restructurings; · the extent of institutional investor interest in us; · the extent of short-selling of our common shares and the shares of our competitors; · fluctuations in the stock price and operating results of our competitors; · general financial and economic market conditions and, in particular, developments related to market conditions for real estate investment trusts and other real estate related companies; · domestic and international economic factors unrelated to our performance; and · all other risk factors addressed elsewhere in this document.
The factors that affect the value of our real estate include, among other things: · national, regional and local economic conditions; · competition from other available space; · local conditions such as an oversupply of space or a reduction in demand for real estate in the area; · how well we manage our properties; · changes in market rental rates; · the timing and costs associated with property improvements and rentals; · whether we are able to pass some or all of any increases in operating costs through to tenants; · changes in real estate taxes and other expenses; · whether tenants and users such as customers and shoppers consider a property attractive; · the financial condition of our tenants, including the extent of tenant bankruptcies or defaults; · availability of financing on acceptable terms or at all; · fluctuations in interest rates; · our ability to secure adequate insurance; · changes in taxation; · changes in zoning laws; · government regulation; · consequences of any armed conflict involving, or terrorist attack against, the United States; · potential liability under environmental or other laws or regulations; · natural disasters; and · general competitive factors.
Among the factors that could affect the price of our common shares are: · our financial condition and performance; · the financial conditions of our tenants, including the extent of tenant bankruptcies or defaults; · actual or anticipated quarterly fluctuations in our operating results and financial condition; · the reputation of REITs and real estate investments generally and the attractiveness of REIT equity securities in comparison to other equity securities, including securities issued by other real estate companies, and fixed income securities; · the effect of the “credit crisis” on the broader commercial credit and financial markets and the resulting illiquidity and volatility in the equity and bond markets; · changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other real estate investment trusts; · failure to meet analysts’ revenue or earnings estimates; · speculation in the press or investment community; · strategic actions by us or our competitors, such as acquisitions or restructurings; · the extent of institutional investor interest in us; · the extent of short-selling of our common shares and the shares of our competitors; · fluctuations in the stock price and operating results of our competitors; · general financial and economic market conditions and, in particular, developments related to market conditions for real estate investment trusts and other real estate related companies; · domestic and international economic factors unrelated to our performance; and · all other risk factors addressed elsewhere in this document.
This decrease was primarily comprised of (i) a $5,165,000 reversal of a portion of the liability for income taxes in the current year (which was previously recognized as interest expense), due to the expiration of the applicable statute of limitations, (ii) a $4,237,000 decrease in interest from the refinancing of the Rego Park I mortgage loan in March 2009, (iii) a $1,021,000 decrease in interest on the Rego Park II construction loan, primarily due to a lower average interest rate (1.58% in the year ended December 31, 2009 as compared to 3.81% in the prior year), (iv) a $569,000 decrease in interest on the income tax liability due to the reversal of a portion of the liability in the current year, (v) a $519,000 loss on the early extinguishment of debt and (vi) a $507,000 decrease in interest on the leasing commissions due to Vornado, mainly due to a lower rate in the current period, partially offset by (vii) $7,132,000 of lower capitalized interest as a result of placing a portion of the Rego Park II property into service during 2009.
Signature Title Date By: /s/Steven Roth Chairman of the Board of Directors February 22, 2010 (Steven Roth) (Principal Executive Officer) By: /s/Michael D. Fascitelli President and Director February 22, 2010 (Michael D. Fascitelli) By: /s/Joseph Macnow Executive Vice President and February 22, 2010 (Joseph Macnow) Chief Financial Officer (Principal Financial and Accounting Officer) By: /s/Thomas R. DiBenedetto Director February 22, 2010 (Thomas R. DiBenedetto) By: /s/David Mandelbaum Director February 22, 2010 (David Mandelbaum) By: /s/Arthur Sonnenblick Director February 22, 2010 (Arthur Sonnenblick) By: /s/Neil Underberg Director February 22, 2010 (Neil Underberg) By: /s/Richard R. West Director February 22, 2010 (Richard R. West) By: /s/Russell B. Wight Jr. Director February 22, 2010 (Russell B. Wight Jr) ALEXANDER’S, INC. AND SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Amounts in thousands) Alexander’s, inc. AND SUBSIDIARIES SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2009 (Amounts in thousands) __________________________ (1) Initial cost is as of May 15, 1992 (the date on which the Company commenced its real estate operations).
Principal retail tenants include The Home Depot (83,000 square feet), The Container Store (34,000 square feet) and Hennes & Mauritz (27,000 square feet); (ii) the Kings Plaza Regional Shopping Center, located on Flatbush Avenue in Brooklyn, New York, which contains 1,098,000 square feet that is 94% leased and is comprised of a two-level mall containing 470,000 square feet, a 289,000 square foot Sears department store and a 339,000 square foot Macy’s department store, which is owned by Macy’s, Inc.; (iii) the Rego Park I property, located on Queens Boulevard and 63rd Road in Queens, New York, which contains 351,000 square feet and is 86% leased to Sears, Bed Bath & Beyond, Marshalls and Old Navy; (iv) the Paramus property, which consists of 30.3 acres of land located at the intersection of Routes 4 and 17 in Paramus, New Jersey, which is leased to IKEA Property, Inc.; (v) the Flushing property, located at Roosevelt Avenue and Main Street in Queens, New York, which contains a 177,000 square foot building that was sub-leased in February 2009 to a developer for the remainder of our ground lease term; Property under development (vi) the Rego Park II property, containing approximately 6.6 acres of land adjacent to our Rego Park I property in Queens, New York, which comprises the entire square block bounded by the Horace Harding Service Road (of the Long Island Expressway), 97th Street, 62nd Drive and Junction Boulevard.
The factors that affect the value of our real estate include, among other things: • national, regional and local economic conditions; • competition from other available space; • local conditions such as an oversupply of space or a reduction in demand for real estate in the area; • how well we manage our properties; • changes in market rental rates; • the timing and costs associated with property improvements and rentals; • whether we are able to pass some or all of any increased operating costs through to tenants; • changes in real estate taxes and other expenses; • whether tenants and users such as customers and shoppers consider a property attractive; • the financial condition of our tenants, including the extent of tenant bankruptcies or defaults; • availability of financing on acceptable terms or at all; • fluctuations in interest rates; • our ability to secure adequate insurance; • changes in taxation or zoning laws; • government regulation; • consequences of any armed conflict involving, or terrorist attack against, the United States; • potential liability under environmental or other laws or regulations; and • general competitive factors.
Among the factors that could affect the price of our common shares are: • our financial condition and performance; • the financial conditions of our tenants, including the extent of tenant bankruptcies or defaults; • actual or anticipated quarterly fluctuations in our operating results and financial condition; • the reputation of REITs and real estate investments generally and the attractiveness of REIT equity securities in comparison to other equity securities, including securities issued by other real estate companies, and fixed income securities; • the effect of the “credit crisis” on the broader commercial credit and financial markets and the resulting illiquidity and volatility in the equity and bond markets; • changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other real estate investment trusts; • failure to meet analysts’ revenue or earnings estimates; • speculation in the press or investment community; • strategic actions by us or our competitors, such as acquisitions or restructurings; • the extent of institutional interest in us; • the extent of short-selling of our common shares and the shares of our competitors; • fluctuations in the stock price and operating results of our competitors; • general financial and economic market conditions and, in particular, developments related to market conditions for real estate investment trusts and other real estate related companies; • domestic and international economic factors unrelated to our performance; and • all other risk factors addressed elsewhere in this document.
Principal retail tenants include The Home Depot (83,000 square feet), The Container Store (34,000 square feet) and Hennes & Mauritz (27,000 square feet); (ii) the Kings Plaza Regional Shopping Center, located on Flatbush Avenue in Brooklyn, New York, which contains 1,098,000 square feet that is 94% leased and is comprised of a two-level mall containing 470,000 square feet, a 289,000 square foot Sears department store and a 339,000 square foot Macy’s department store, which is owned by Macy’s, Inc.; (iii) the Rego Park I property, located on Queens Boulevard and 63rd Road in Queens, New York, which contains 351,000 square feet and is 86% leased to Sears, Bed Bath & Beyond, Marshalls and Old Navy; (iv) the Paramus property, which consists of 30.3 acres of land located at the intersection of Routes 4 and 17 in Paramus, New Jersey, which is leased to IKEA Property, Inc.; (v) the Flushing property, located at Roosevelt Avenue and Main Street in Queens, New York, which contains a 177,000 square foot building that was sub-leased in February 2009 to a developer for the remainder of our ground lease term; Property under development (vi) the Rego Park II property, containing approximately 6.6 acres of land adjacent to our Rego Park I property in Queens, New York, which comprises the entire square block bounded by the Horace Harding Service Road (of the Long Island Expressway), 97th Street, 62nd Drive and Junction Boulevard; Property to be developed (vii) the Rego Park III property, containing approximately 3.4 acres of land adjacent to our Rego Park II property in Queens, New York, which comprises one-quarter square block at the intersection of Junction Boulevard and the Horace Harding Service Road.
Signature Title Date By: /s/Steven Roth Chairman of the Board of Trustees February 23, 2009 (Steven Roth) (Principal Executive Officer) By: /s/Michael D. Fascitelli President and Trustee February 23, 2009 (Michael D. Fascitelli) By: /s/Joseph Macnow Executive Vice President and February 23, 2009 (Joseph Macnow) Chief Financial Officer (Principal Financial and Accounting Officer) By: /s/Thomas R. DiBenedetto Director February 23, 2009 (Thomas R. DiBenedetto) By: /s/David Mandelbaum Director February 23, 2009 (David Mandelbaum) By: /s/Arthur Sonnenblick Director February 23, 2009 (Arthur Sonnenblick) By: /s/Neil Underberg Director February 23, 2009 (Neil Underberg) By: /s/Richard R. West Director February 23, 2009 (Richard R. West) By: /s/Russell B. Wight Jr. Director February 23, 2009 (Russell B. Wight Jr) ALEXANDER’S, INC. AND SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Amounts in thousands) ALEXANDER'S, INC. AND SUBSIDIARIES SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2008 (Amounts in thousands) __________________________ (1) Initial cost is as of May 15, 1992 (the date on which the Company commenced its real estate operations) unless acquired subsequent to that date.
Principal retail tenants include The Home Depot (83,000 square feet), The Container Store (34,000 square feet) and Hennes & Mauritz (27,000 square feet); (ii) the Kings Plaza Regional Shopping Center, located on Flatbush Avenue in Brooklyn, New York, which contains 1,098,000 square feet that is 94% leased and is comprised of a two-level mall containing 470,000 square feet, a 289,000 square foot Sears department store and a 339,000 square foot Macy’s department store, which is owned by Macy’s, Inc.; (iii) the Rego Park I property, located on Queens Boulevard and 63rd Road in Queens, New York, which contains 351,000 square feet and is 100% leased to Sears, Circuit City, Bed Bath & Beyond, Marshalls and Old Navy; (iv) the Paramus property, which consists of 30.3 acres of land located at the intersection of Routes 4 and 17 in Paramus, New Jersey, which is leased to IKEA Property, Inc.; (v) the Flushing property, located at Roosevelt Avenue and Main Street in Queens, New York, which contains a 177,000 square foot building that is currently vacant; Property under development (vi) the Rego Park II property, containing approximately 6.6 acres of land adjacent to our Rego Park I property in Queens, New York, which comprises the entire square block bounded by the Horace Harding Service Road (of the Long Island Expressway), 97th Street, 62nd Drive and Junction Boulevard.
The factors that affect the value of our real estate include, among other things: • national, regional and local economic conditions; • consequences of any armed conflict involving, or terrorist attack against, the United States; • our ability to secure adequate insurance; • local conditions such as an oversupply of space or a reduction in demand for real estate in the area; • competition from other available space; • whether tenants and users such as customers and shoppers consider a property attractive; • the financial condition of our tenants, including the extent of tenant bankruptcies or defaults; • whether we are able to pass some or all of any increased operating costs through to tenants; • how well we manage our properties; • fluctuations in interest rates; • changes in real estate taxes and other expenses; • changes in market rental rates; • the timing and costs associated with property improvements and rentals; • changes in taxation or zoning laws; • government regulation; • availability of financing on acceptable terms or at all; • potential liability under environmental or other laws or regulations; and • general competitive factors.
Principal retail tenants include The Home Depot (83,000 square feet), The Container Store (34,000 square feet) and Hennes & Mauritz (27,000 square feet); (ii) the Kings Plaza Regional Shopping Center, located on Flatbush Avenue in Brooklyn, New York, which contains 1,098,000 square feet that is 94% leased and is comprised of a two-level mall containing 470,000 square feet, a 289,000 square foot Sears department store and a 339,000 square foot Macy’s department store, which is owned by Macy’s, Inc.; (iii) the Rego Park I property, located on Queens Boulevard and 63rd Road in Queens, New York, which contains 351,000 square feet and is 100% leased to Sears, Circuit City, Bed Bath & Beyond, Marshalls and Old Navy; (iv) the Paramus property, which consists of 30.3 acres of land located at the intersection of Routes 4 and 17 in Paramus, New Jersey, which is leased to IKEA Property, Inc.; (v) the Flushing property, located at Roosevelt Avenue and Main Street in Queens, New York, which contains a 177,000 square foot building that is currently vacant; Property under development (vi) the Rego Park II property, containing approximately 6.6 acres of land adjacent to our Rego Park I property in Queens, New York, which comprises the entire square block bounded by the Horace Harding Service Road (of the Long Island Expressway), 97th Street, 62nd Drive and Junction Boulevard; Property to be developed (vii) the Rego Park III property, containing approximately 3.4 acres of land adjacent to our Rego Park II property in Queens, New York, which comprises one-quarter square block at the intersection of Junction Boulevard and the Horace Harding Service Road.
Principal retail tenants include The Home Depot (83,000 square feet), The Container Store (34,000 square feet) and Hennes & Mauritz (27,000 square feet); (ii) the Kings Plaza Regional Shopping Center, located on Flatbush Avenue in Brooklyn, New York, which contains 1,098,000 square feet that is 97% leased and is comprised of a two-level mall containing 470,000 square feet, a 289,000 square foot department store leased to Sears and another anchor department store owned and operated as a Macy’s by Federated Department Stores, Inc.; (iii) the Rego Park I property, located on Queens Boulevard and 63rd Road in Queens, New York, which contains a 351,000 square foot building that is 100% leased to Sears, Circuit City, Bed Bath & Beyond, Marshalls and Old Navy; (iv) the Paramus property, which consists of 30.3 acres of land located at the intersection of Routes 4 and 17 in Paramus, New Jersey, which is leased to IKEA Property, Inc; (v) the Flushing property, located at Roosevelt Avenue and Main Street in Queens, New York, which contains a 177,000 square foot building that is currently vacant; Property under development (vi) the Rego Park II property, containing approximately 6.6 acres of land adjacent to our Rego Park I property in Queens, New York, which comprises the entire square block bounded by the Horace Harding Service Road (of the Long Island Expressway), 97th Street, 62nd Drive and Junction Boulevard.
The factors that affect the value of our real estate include, among other things: • national, regional and local economic conditions; • consequences of any armed conflict involving, or terrorist attack against, the United States; • our ability to secure adequate insurance; • local conditions such as an oversupply of space or a reduction in demand for real estate in the area; • competition from other available space; • whether tenants and users such as customers and shoppers consider a property attractive; • the financial condition of our tenants, including the extent of tenant bankruptcies or defaults; • whether we are able to pass some or all of any increased operating costs through to tenants; • how well we manage our properties; • fluctuations in interest rates; • changes in real estate taxes and other expenses; • changes in market rental rates; • the timing and costs associated with property improvements and rentals; • changes in taxation or zoning laws; • government regulation; • availability of financing on acceptable terms or at all; • potential liability under environmental or other laws or regulations; and • general competitive factors.
Principal retail tenants include The Home Depot (83,000 square feet), The Container Store (34,000 square feet) and Hennes & Mauritz (27,000 square feet); (ii) the Kings Plaza Regional Shopping Center, located on Flatbush Avenue in Brooklyn, New York, which contains 1,098,000 square feet that is 97% leased and is comprised of a two-level mall containing 470,000 square feet, a 289,000 square foot department store leased to Sears and another anchor department store owned and operated as a Macy’s by Federated Department Stores, Inc.; (iii) the Rego Park I property, located on Queens Boulevard and 63rd Road in Queens, New York, which contains a 351,000 square foot building that is 100% leased to Sears, Circuit City, Bed Bath & Beyond, Marshalls and Old Navy; (iv) the Paramus property, which consists of 30.3 acres of land located at the intersection of Routes 4 and 17 in Paramus, New Jersey, which is leased to IKEA Property, Inc; (v) the Flushing property, located at Roosevelt Avenue and Main Street in Queens, New York, which contains a 177,000 square foot building that is currently vacant; Property under development (vi) the Rego Park II property, containing approximately 6.6 acres of land adjacent to our Rego Park I property in Queens, New York, which comprises the entire square block bounded by the Horace Harding Service Road (of the Long Island Expressway), 97th Street, 62nd Drive and Junction Boulevard; and Property to be developed (vii) the Rego Park III property, containing approximately 3.4 acres of land adjacent to our Rego Park II property in Queens, New York, which comprises one-quarter square block at the intersection of Junction Boulevard and the Horace Harding Service Road.
Signature Title Date By: /s/Steven Roth Chairman of the Board of Trustees February 26, 2007 (Steven Roth) (Principal Executive Officer) By: /s/Michael D. Fascitelli President and Trustee February 26, 2007 (Michael D. Fascitelli) By: /s/Joseph Macnow Executive Vice President and February 26, 2007 (Joseph Macnow) Chief Financial Officer (Principal Financial and Accounting Officer) By: /s/Thomas R. DiBenedetto Director February 26, 2007 (Thomas R. DiBenedetto) By: /s/David Mandelbaum Director February 26, 2007 (David Mandelbaum) By: /s/Stephen Mann Chief Operating Officer and Director February 26, 2007 (Stephen Mann) By: /s/Arthur Sonnenblick Director February 26, 2007 (Arthur Sonnenblick) By: /s/Neil Underberg Director February 26, 2007 (Neil Underberg) By: /s/Richard R. West Director February 26, 2007 Richard R. West By: /s/Russell B. Wight Jr. Director February 26, 2007 (Russell B. Wight Jr) ALEXANDER’S, INC. AND SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Amounts in thousands) ALEXANDER’S, INC. AND SUBSIDIARIES SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2006 (Amounts in thousands) __________________________ (1) Initial cost is as of May 15, 1992 (the date on which the Company commenced its real estate operations) unless acquired subsequent to that date.
As of December 31, 2005, 100 of the 105 residential condominium units were sold and closed; (ii)the Kings Plaza Regional Shopping Center, located on Flatbush Avenue in Brooklyn, New York, which contains 1,098,000 square feet and is comprised of a two-level mall containing 470,000 square feet, a 289,000 square foot department store leased to Sears and another anchor department store owned and operated as a Macy's by Federated Department Stores, Inc.; (iii)the Rego Park I property, located on Queens Boulevard and 63rd Road in Queens, New York, which contains a 351,000 square foot building that is 100% leased to Sears, Circuit City, Bed Bath & Beyond, Marshalls and Old Navy; (iv)the Paramus property, which consists of 30.3 acres of land located at the intersection of Routes 4 and 17 in Paramus, New Jersey, which is leased to IKEA Property, Inc; (v)the Flushing property, located at Roosevelt Avenue and Main Street in Queens, New York, which contains a 177,000 square foot building that is currently vacant; and Property to be developed (vi)the Rego Park II property, which comprises one and one-half square blocks of vacant land adjacent to the Rego Park I property.
The factors that affect the value of our real estate include, among other things: •national, regional and local economic conditions; •local conditions such as an oversupply of space or a reduction in demand for real estate in the area; •competition from other available space; •whether tenants and users such as customers and shoppers consider a property attractive; •the financial condition of our tenants, including the extent of tenant bankruptcies or defaults; •whether we are able to pass some or all of any increased operating costs through to tenants; •how well we manage our properties; •fluctuations in interest rates; •changes in real estate taxes and other expenses; •changes in market rental rates; •the timing and costs associated with property improvements and rentals; •changes in taxation or zoning laws; •government regulation; •Alexander's failure to continue to qualify as a real estate investment trust; •availability of financing on acceptable terms or at all; •consequences of any armed conflict involving, or terrorist attacks against, the United States; •our ability to secure adequate insurance; •potential liability under environmental or other laws or regulations; and •general competitive factors.
As of December 31, 2005, 100 of the 105 residential condominium units were sold and closed; (ii)the Kings Plaza Regional Shopping Center, located on Flatbush Avenue in Brooklyn, New York, which contains 1,098,000 square feet and is comprised of a two-level mall containing 470,000 square feet, a 289,000 square foot department store leased to Sears and another anchor department store owned and operated as a Macy's by Federated Department Stores, Inc.; (iii)the Rego Park I property, located on Queens Boulevard and 63rd Road in Queens, New York, which contains a 351,000 square foot building that is 100% leased to Sears, Circuit City, Bed Bath & Beyond, Marshalls and Old Navy; (iv)the Paramus property, which consists of 30.3 acres of land located at the intersection of Routes 4 and 17 in Paramus, New Jersey, which is leased to IKEA Property, Inc; (v)the Flushing property, located at Roosevelt Avenue and Main Street in Queens, New York, which contains a 177,000 square foot building that is currently vacant; and Property to be developed (vi)the Rego Park II property, which comprises one and one-half square blocks of vacant land adjacent to the Rego Park I property.
Signature Title Date /s/ STEVEN ROTH Steven Roth Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer) February 27, 2006 /s/ MICHAEL D. FASCITELLI Michael D. Fascitelli President and Director February 27, 2006 /s/ JOSEPH MACNOW Joseph Macnow Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) February 27, 2006 /s/ THOMAS R. DIBENEDETTO Thomas R. DiBenedetto Director February 27, 2006 /s/ DAVID MANDELBAUM David Mandelbaum Director February 27, 2006 /s/ STEPHEN MANN Stephen Mann Chief Operating Officer and Director February 27, 2006 /s/ ARTHUR I. SONNENBLICK Arthur I. Sonnenblick Director February 27, 2006 /s/ NEIL UNDERBERG Neil Underberg Director February 27, 2006 /s/ RICHARD R. WEST Richard R. West Director February 27, 2006 /s/ RUSSELL B. WIGHT, JR. Russell B. Wight, Jr. Director February 27, 2006 ALEXANDER'S, INC. AND SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS ALEXANDER'S, INC. AND SUBSIDIARIES SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2005 (Amounts in thousands) (1)Initial cost is as of May 15, 1992 (the date on which the Company commenced its real estate operations) unless acquired subsequent to that date.
10.61 Form of Stock Option Agreement between the Company and certain employees - Incorporated herein by reference from Exhibit 10.61 to the registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, * 10.62 Form of Restricted Stock Option Agreement between the Company and certain employees - Incorporated herein by reference from Exhibit 10.62 to the registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, * 10.63 Stock Appreciation Right Agreement dated as of January 10, 2006, between Michael D. Fascitelli and Alexander's Inc. - Incorporated herein by reference from Exhibit 10.1 to the registrant's Current Report on Form 8-K for January 10, 2006 * Subsidiaries of Registrant Consent of Independent Registered Public Accounting Firm 31.1 Rule 13a-14 (a) Certification of the Chief Executive Officer 31.2 Rule 13a-14 (a) Certification of the Chief Financial Officer 32.1 Section 1350 Certification of the Chief Executive Officer 32.2 Section 1350 Certification of the Chief Financial Officer *Incorporated by reference FORWARD-LOOKING STATEMENTS PART I PART II REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ALEXANDER'S, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share and per share amounts) ALEXANDER'S, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share amounts) ALEXANDER'S, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Amounts in thousands) ALEXANDER'S, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) ALEXANDER'S, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ALEXANDER'S, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ALEXANDER'S, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ALEXANDER'S, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PART III PART IV SIGNATURES ALEXANDER'S, INC. AND SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS ALEXANDER'S, INC. AND SUBSIDIARIES SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2005 (Amounts in thousands) ALEXANDER'S, INC. AND SUBSIDIARIES SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION (Amounts in thousands) EXHIBIT INDEX
Alexander's has six properties in the greater New York City metropolitan area consisting of: Operating properties (i) the 731 Lexington Avenue property, a 1,300,000 square foot multi-use building which comprises the entire square block bounded by Lexington Avenue, East 59th Street, Third Avenue and East 58th Street in Manhattan, New York; (ii) the Kings Plaza Regional Shopping Center, located on Flatbush Avenue in Brooklyn, New York, which contains 1,098,000 square feet and is comprised of a two-level mall containing 470,000 square feet, a 289,000 square foot department store leased to Sears and another anchor department store owned and operated as a Macy's by Federated Department Stores, Inc.; (iii) the Rego Park I property, located on Queens Boulevard and 63rd Road in Queens, New York, which contains a 351,000 square foot building that is 100% leased to Sears, Circuit City, Bed Bath & Beyond, Marshalls and Old Navy; (iv) the Paramus property, which consists of 30.3 acres of land located at the intersection of Routes 4 and 17 in Paramus, New Jersey, which is leased to IKEA Property, Inc; (v) the Flushing property, located at Roosevelt Avenue and Main Street in Queens, New York, which contains a 177,000 square foot building that is currently vacant; and Property to be developed (vi) the Rego Park II property, which comprises one and one-half square blocks of vacant land adjacent to the Rego Park I property.
The factors that affect the value of the Company's real estate include: national, regional and local economic conditions, the consequences of any armed conflict involving, or terrorist attack against, the United States, the Company's ability to secure adequate insurance, local conditions, such as an oversupply of space or a reduction in demand for real estate in the area, competition from other available space, whether tenants consider a property attractive, the financial condition of the Company's tenants, including the extent of tenant bankruptcies or defaults, whether the Company is able to pass some or all of any increased operating costs it incurs through to tenants, how well the Company manages its properties, any increases in (i) interest rates, (ii) real estate taxes and (iii) other expenses, any decreases in market rental rates, the timing and costs associated with property development, improvements and rentals, changes in taxation or zoning laws, government regulations, the Company's failure to continue to qualify as a REIT, availability of financing on acceptable terms or at all, potential liability under environmental or other laws or regulations, and general competitive factors.
Alexander's has six properties in the greater New York City metropolitan area consisting of: Operating properties (i) the 731 Lexington Avenue property, a 1,300,000 square foot multi-use building which comprises the entire square block bounded by Lexington Avenue, East 59th Street, Third Avenue and East 58th Street in Manhattan, New York; (ii) the Kings Plaza Regional Shopping Center, located on Flatbush Avenue in Brooklyn, New York, which contains 1,098,000 square feet and is comprised of a two-level mall containing 470,000 square feet, a 289,000 square foot department store leased to Sears and another anchor department store owned and operated as a Macy's by Federated Department Stores, Inc.; (iii) the Rego Park I property, located on Queens Boulevard and 63rd Road in Queens, New York, which contains a 351,000 square foot building that is 100% leased to Sears, Circuit City, Bed Bath & Beyond, Marshalls and Old Navy; (iv) the Paramus property, which consists of 30.3 acres of land located at the intersection of Routes 4 and 17 in Paramus, New Jersey, which is leased to IKEA Property, Inc; (v) the Flushing property, located at Roosevelt Avenue and Main Street in Queens, New York, which contains a 177,000 square foot building that is currently vacant; and Property to be developed (vi) the Rego Park II property, which comprises one and one-half square blocks of vacant land adjacent to the Rego Park I property.
Alexander's has six properties in the greater New York City metropolitan area consisting of: Operating properties (i) the Kings Plaza Regional Shopping Center, located on Flatbush Avenue in Brooklyn, New York, which contains 1,098,000 square feet and is comprised of a two-level mall containing 470,000 square feet, a 289,000 square foot department store leased to Sears and another anchor department store owned and operated as a Macy's by Federated Department Stores, Inc.; (ii) the Rego Park I property, located on Queens Boulevard and 63rd Road in Queens, New York, which contains a 351,000 square foot building that is 100% leased to Sears, Circuit City, Bed Bath & Beyond, Marshalls and Old Navy; (iii) the Paramus property, which consists of 30.3 acres of land located at the intersection of Routes 4 and 17 in Paramus, New Jersey, which is leased to IKEA Property, Inc; and (iv) the Flushing property, located at Roosevelt Avenue and Main Street in Flushing, New York, which contains a 177,000 square foot building that is currently vacant; Property under development (v) the Lexington Avenue development property, which comprises the entire square block bounded by Lexington Avenue, East 59th Street, Third Avenue and East 58th Street in Manhattan, New York; and Property to be developed (vi) the Rego Park II property, which comprises one and one-half square blocks of vacant land adjacent to the Rego Park I property.
The factors that affect the value of the Company's real estate include: - national, regional and local economic conditions, - the consequences of any armed conflict involving, or terrorist attack against, the United States, - the Company's ability to secure adequate insurance, - local conditions, such as an oversupply of space or a reduction in demand for real estate in the area, - competition from other available space, - whether tenants consider a property attractive, - the financial condition of the Company's tenants, including the extent of tenant bankruptcies or defaults, - whether the Company is able to pass some or all of any increased operating costs it incurs through to tenants, - how well the Company manages its properties, - any increase in interest rates, - any increase in real estate taxes and other expenses, - any decreases in market rental rates, - the timing and costs associated with property development, improvements and rentals, - changes in taxation or zoning laws, - government regulations, - the Company's failure to continue to qualify as a REIT, - availability of financing on acceptable terms or at all, - potential liability under environmental or other laws or regulations, and - general competitive factors.
Alexander's has six properties in the greater New York City metropolitan area consisting of: Operating properties (i) the Kings Plaza Regional Shopping Center, located on Flatbush Avenue in Brooklyn, New York, which contains 1,098,000 square feet and is comprised of a two-level mall containing 470,000 square feet, a 289,000 square foot department store leased to Sears and another anchor department store owned and operated as a Macy's by Federated Department Stores, Inc.; (ii) the Rego Park I property, located on Queens Boulevard and 63rd Road in Queens, New York, which contains a 351,000 square foot building that is 100% leased to Sears, Circuit City, Bed Bath & Beyond, Marshalls and Old Navy; (iii) the Paramus property, which consists of 30.3 acres of land located at the intersection of Routes 4 and 17 in Paramus, New Jersey, which is leased to IKEA Property, Inc; and (iv) the Flushing property, located at Roosevelt Avenue and Main Street in Flushing, New York, which contains a 177,000 square foot building that is currently vacant; Property under development (v) the Lexington Avenue development property, which comprises the entire square block bounded by Lexington Avenue, East 59th Street, Third Avenue and East 58th Street in Manhattan, New York; and Property to be developed (vi) the Rego Park II property, which comprises one and one-half square blocks of vacant land adjacent to the Rego Park I property.
Alexander's has six properties consisting of: Operating properties: (i) the Kings Plaza Regional Shopping Center on Flatbush Avenue in Brooklyn, New York, which contains 1,100,000 square feet, is comprised of a two-level mall containing 470,000 square feet (the "Mall"), a 289,000 square foot department store leased to Sears and another anchor department store owned and operated as a Macy's by Federated Department Stores, Inc. ("Federated"); (ii) the Rego Park I property located on Queens Boulevard and 63rd Road in Rego Park, Queens, New York, which contains a 351,000 square foot building, which is 100% leased to Sears, Circuit City, Bed Bath & Beyond, Marshalls and Old Navy; (iii) the Paramus property which consists of 30.3 acres of land located at the intersection of Routes 4 and 17 in Paramus, New Jersey which is leased to IKEA Properties, Inc; and Asset held for sale: (iv) the Flushing property located at Roosevelt Avenue and Main Street in Flushing, New York, which contains a 177,000 square foot building that is currently vacant; Property under development: (vi) the Lexington Avenue property which comprises the entire square block bounded by Lexington Avenue, East 59th Street, Third Avenue and East 58th Street in Manhattan, New York; and Property to be developed: (vii) the Rego Park II property, which comprises one and one-half square blocks of vacant land adjacent to the Rego Park I property.
The existing collateral for each of the Vornado loans is as follows: (i) back-up guaranties given by Alexander's of Rego Park II, Inc. ("Rego II"), Alexander's Rego Park III, Inc. ("Rego III") and Alexander's of Flushing, Inc. ("Flushing"), (ii) a pledge given by the Company of its interest in the entities holding the commercial and residential parcels comprising the Lexington Avenue property, Flushing, Rego II and Rego III and (iii) a lockbox agreement between the Company ALEXANDER'S, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- and Vornado, giving Vornado a security interest and springing control of the Company's corporate bank account into which, among other things, any distributions to the Company from its subsidiaries owning the Kings Plaza shopping center, the Rego Park shopping center, and the Paramus property are deposited and (iv) unrecorded mortgages on the Rego II and Rego III properties given by such entities to secure their guaranties.
The Company could be negatively impacted over the medium-to-longer term if the disruptions related to COVID-19 (a) decrease consumer confidence generally or with respect to purchasing a home or cause civil unrest, (b) precipitate a prolonged economic downturn or an extended rise in unemployment or tempering of wage growth, any of which could lower demand for the Company’s products, impair the Company’s ability to sell and build finished lots and homes in a typical manner or at all, impair the Company’s ability to generate revenues and cash flows, or impair the Company’s ability to access the capital or lending markets (or significantly increase the costs of doing so), (c) increase the costs or decrease the supply of construction materials or the availability of subcontractors and other talent, including as a result of infections or medically necessary or recommended self-quarantining, or governmental mandates to direct production activities to support public health efforts or (d) result in the Company recognizing charges in future periods, which may be material, for impairments related to the Company’s inventory or investment assets.
The forward-looking statements contained in this annual report on Form 10-K include, but are not limited to, statements regarding (1) the Company’s ability to finance its future working capital, land development and capital expenditure needs, (2) the Company’s expected liquidity sources, (3) anticipated future development of the Company’s real estate holdings, (4) the development and construction of possible future commercial properties to be marketed to tenants, (5) the designs, pricing and levels of options and amenities with respect to the Company’s internal homebuilding operations, (6) the timing of reimbursements under, and the general effectiveness of, the Company’s public improvement districts and private infrastructure reimbursement covenants, (7) the number of planned residential lots in the Company’s subdivisions, (8) estimates and assumptions used in determining future cash flows of real estate projects, (9) the utilization of existing bank financing, (10) the effect of recent accounting pronouncements, (11) the anticipated contributions by the Company to the pension plan, the amount of future annual benefit payments to pension plan participants payable from plan assets, the appropriateness of valuation methods to determine the fair value of financial instruments in the pension plan, the expected return on assets in the pension plan, the expected long-term rate of return on assets in the pension plan, the effect of changes in the weighted average discount interest rate on the amount of pension plan liabilities and the effect of changes in the investment rate of return on pension plan assets with respect to pension expense, (12) the timing of recognizing unrecognized compensation expense related to shares of common stock issued under the AMREP Corporation 2016 Equity Compensation Plan, (13) the future issuance of deferred stock units to directors of the Company, (14) the adequacy of the Company’s facilities, (15) the materiality of claims and legal actions arising in the normal course of the Company’s business, (16) the negative impact of the COVID-19 pandemic on the Company’s financial position and ability to continue operations at normal levels or at all, (17) the duration, effect and severity of the COVID-19 pandemic and (18) the measures that governmental authorities may take to address the COVID-19 pandemic which may precipitate or exacerbate one or more of the above-mentioned or other risks and significantly disrupt or prevent the Company from operating in the ordinary course for an extended period of time.
Item 9A.Controls and Procedures The Company’s management, with the participation of the Company’s Chief Executive Officer and Vice President, Finance and Accounting, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this annual report on Form 10-K. As a result of such evaluation, the Chief Executive Officer and Vice President, Finance and Accounting have concluded that such disclosure controls and procedures were effective as of April 30, 2020 to provide reasonable assurance that the information required to be disclosed in the reports the Company files or submits under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Vice President, Finance and Accounting, as appropriate, to allow timely decisions regarding disclosure.
The forward-looking statements contained in this annual report on Form 10-K include, but are not limited to, statements regarding (1) the Company’s ability to finance its future working capital, land development and capital expenditure needs, (2) the Company’s expected liquidity sources, (3) anticipated future development of the Company’s real estate holdings, (4) the development and construction of possible future commercial properties to be marketed to tenants, (5) the timing of reimbursements under, and the general effectiveness of, the Company’s public improvement districts and private infrastructure reimbursement covenants, (6) the number of planned residential lots in the Company’s subdivisions, (7) estimates and assumptions used in determining future cash flows of real estate projects, (8) the utilization of existing bank financing, (9) the effect of recent accounting pronouncements, (10) the anticipated contributions by the Company to the pension plan, the amount of future annual benefit payments to the pension plan, the appropriateness of valuation methods to determine the fair value of financial instruments in the pension plan, the expected return on assets in the pension plan, the expected long-term rate of return on assets in the pension plan, the effect of changes in the weighted average discount interest rate on the amount of pension plan liabilities and the effect of changes in the investment rate of return on pension plan assets with respect to pension expense, (11) the timing of recognizing unrecognized compensation expense related to shares of common stock issued under the AMREP Corporation 2006 Equity Compensation Plan or the AMREP Corporation 2016 Equity Compensation Plan, (12) the future issuance of deferred stock units to directors of the Company, (13) the adequacy of the Company’s facilities, and (14) the materiality of claims and legal actions arising in the normal course of the Company’s business.
Item 9A.Controls and Procedures The Company’s management, with the participation of the Company’s chief executive officer and chief financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this annual report on Form 10-K. As a result of such evaluation, the chief executive officer and chief financial officer have concluded that such disclosure controls and procedures were effective as of April 30, 2019 to provide reasonable assurance that the information required to be disclosed in the reports the Company files or submits under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) accumulated and communicated to the Company’s management, including the Company’s chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding disclosure.
The forward-looking statements contained in this annual report on Form 10-K include, but are not limited to, statements regarding (i) the Company’s ability to finance its future working capital, land development and capital expenditure needs, (ii) the Company’s expected liquidity sources, (iii) anticipated future development of the Company’s real estate holdings, (iv) the development and construction of possible future commercial properties to be marketed to tenants, (v) the timing of reimbursements under, and the general effectiveness of, the public improvement district over a portion of the Lomas Encantadas subdivision and a portion of the Enchanted Hills/Commerce Center subdivision, (vi) the number of planned residential lots in the Company’s subdivisions, (vii) estimates and assumptions used in determining future cash flows of real estate projects, (viii) the utilization of existing bank financing, (ix) the expected loss of any customer contract in the Company’s fulfillment services business and the adverse effect of any such loss, (x) the expected revenue from any new customer contracts in the Company’s fulfillment services business, (xi) the effect of recent accounting pronouncements, (xii) the anticipated contributions by the Company to the pension plan, the amount of future annual benefit payments to the pension plan, the appropriateness of valuation methods to determine the fair value of financial instruments in the pension plan, the expected return on assets in the pension plan, the expected long-term rate of return on assets in the pension plan, the effect of changes in the weighted average discount interest rate on the amount of pension plan liabilities and the effect of changes in the investment rate of return on pension plan assets with respect to pension expense, (xiii) the timing of recognizing unrecognized compensation expense related to shares of common stock issued under the AMREP Corporation 2006 Equity Compensation Plan or the AMREP Corporation 2016 Equity Compensation Plan, (xiv) the future issuance of deferred stock units to directors of the Company, (xv) the liability for unrecognized tax benefits not changing in fiscal year 2019, (xvi) the adequacy of the Company’s facilities, (xvii) estimates related to the U.S. Tax Cuts and Jobs Act and (xviii) the materiality of claims and legal actions arising in the normal course of the Company’s business.
Item 9A.Controls and Procedures Evaluation of Disclosure Controls and Procedures The Company’s management, with the participation of the Company’s chief executive officer and chief financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this annual report on Form 10-K. As a result of such evaluation, the chief executive officer and chief financial officer have concluded that such disclosure controls and procedures were effective as of April 30, 2018 to provide reasonable assurance that the information required to be disclosed in the reports the Company files or submits under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) accumulated and communicated to the Company’s management, including the Company’s chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding disclosure.
The forward-looking statements contained in this annual report on Form 10-K include, but are not limited to, statements regarding (i) the Company’s ability to finance its future working capital, land development and capital expenditure needs, (ii) the Company’s expected liquidity sources, (iii) anticipated future development of the Company’s real estate holdings, (iv) the development and construction of possible future commercial properties to be marketed to tenants, (v) the timing of reimbursements under, and the general effectiveness of, the public improvement district over a portion of the Lomas Encantadas subdivision and a portion of the Enchanted Hills/Commerce Center subdivision, (vi) the number of planned residential lots in the Company’s subdivisions, (vii) estimates and assumptions used in determining future cash flows of real estate projects, (viii) the expected loss of any material customer contract and the material adverse effect of any such loss, (ix) the effect of recent accounting pronouncements on the Company, (x) the anticipated contributions by the Company to the pension plan, the amount of future annual benefit payments to the pension plan, the appropriateness of valuation methods to determine the fair value of financial instruments in the pension plan, the expected return on assets in the pension plan, the expected long-term rate of return on assets in the pension plan and the effect of changes on the weighted average discount interest rate on the amount of pension plan liabilities, (xi) the timing of recognizing unrecognized compensation expense related to shares of common stock issued under the AMREP Corporation 2006 Equity Compensation Plan or the AMREP Corporation 2016 Equity Compensation Plan, (xii) the liability for unrecognized tax benefits not changing in fiscal year 2018, (xiii) the adequacy of the Company’s facilities, (xiv) the gain on settlement of, and deferred revenue with respect to, the Settlement Agreement and (xv) the materiality of claims and legal actions arising in the normal course of the Company’s business.
Item 9A.Controls and Procedures Evaluation of Disclosure Controls and Procedures The Company’s management, with the participation of the Company’s chief financial officer and the other person whose certification accompanies this annual report on Form 10-K, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this annual report on Form 10-K. As a result of such evaluation, the chief financial officer and such other person have concluded that such disclosure controls and procedures were effective as of April 30, 2017 to provide reasonable assurance that the information required to be disclosed in the reports the Company files or submits under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) accumulated and communicated to the Company’s management, including the Company’s principal executive and principal financial officers or persons performing such functions, as appropriate, to allow timely decisions regarding disclosure.
(Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed May 4, 2017) 10.8 Promissory Note, dated as of February 9, 2015, made by DFI Holdings, LLC and KPS Holdco, LLC in favor of American Investment Republic Co. (Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.9 Line of Credit Promissory Note, dated as of February 9, 2015, made by Kable Media Services, Inc., Kable Distribution Services, Inc., Kable News Company, Inc., Kable News International, Inc., Kable Distribution Services of Canada, Ltd. and Kable Product Services, Inc. in favor of American Investment Republic Co. (Incorporated by reference to Exhibit 10.7 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.10 Guaranty Agreement, dated as of February 9, 2015, by Kable Media Services, Inc., Kable Distribution Services, Inc., Kable News Company, Inc., Kable News International, Inc., Kable Distribution Services of Canada, Ltd., Kable Product Services, Inc., DFI Holdings, LLC and KPS Holdco, LLC in favor of American Investment Republic Co. (Incorporated by reference to Exhibit 10.8 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.11 Security Agreement, dated as of February 9, 2015, by Kable Media Services, Inc., Kable Distribution Services, Inc., Kable News Company, Inc., Kable News International, Inc., Kable Distribution Services of Canada, Ltd., Kable Product Services, Inc., DFI Holdings, LLC and KPS Holdco, LLC in favor of American Investment Republic Co. (Incorporated by reference to Exhibit 10.9 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.12 Letter Agreement, dated January 20, 2016, among Kable Media Services, Inc., Kable Distribution Services, Inc., Kable News Company, Inc., Kable News International, Inc., Kable Distribution Services of Canada, Ltd., Kable Product Services, Inc., DFI Holdings, LLC and KPS Holdco, LLC and American Republic Investment Co. (Incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q filed March 15, 2016) 10.13 (b) 2006 Equity Compensation Plan.
The forward-looking statements contained in this annual report on Form 10-K include, but are not limited to, statements regarding (i) the Company’s ability to finance its future working capital, land development and capital expenditure needs, (ii) the Company’s expected liquidity sources, (iii) anticipated future development of the Company’s real estate holdings, (iv) the development and construction of possible future commercial properties to be marketed to tenants, (v) the timing of reimbursements under, and the general effectiveness of, the public improvement district over a portion of the Lomas Encantadas subdivision and a portion of the Enchanted Hills/Commerce Center subdivision, (vi) the number of planned residential lots in the Company’s subdivisions, (vii) the timing and extent of the Company’s required return of incentive monies to the State of Florida, (viii) the expected loss of any material customer contract and the material adverse effect of any such loss, (ix) the effect of recent accounting pronouncements on the Company, (x) the anticipated contributions by the Company to the pension plan and the amount of future annual benefit payments to the pension plan, (xi) the effect of changes on the weighted average discount interest rate on the amount of pension plan liabilities, (xii) the timing of recognizing unrecognized compensation expense related to shares of common stock issued under the Equity Plan, (xiii) the timing and amount of recovery of taxes paid after the Company files its federal tax return for 2016, (xiv) the liability for unrecognized tax benefits not changing in the next twelve months and (xv) the adequacy of the Company’s facilities.
Item 9A.Controls and Procedures Evaluation of Disclosure Controls and Procedures The Company’s management, with the participation of the Company’s chief financial officer and the other person whose certification accompanies this annual report on Form 10-K, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this annual report on Form 10-K. As a result of such evaluation, the chief financial officer and such other person have concluded that such disclosure controls and procedures were effective as of April 30, 2016 to provide reasonable assurance that the information required to be disclosed in the reports the Company files or submits under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) accumulated and communicated to the Company’s management, including the Company’s principal executive and principal financial officers or persons performing such functions, as appropriate, to allow timely decisions regarding disclosure.
(Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed November 21, 2012) 4.17 Consent Agreement, dated September 8, 2014, by and between Kappa Lending Group, LLC and AMREP Southwest Inc. (Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed September 9, 2014) 10.1 (a) Amended and Restated Distribution Agreement, dated July 1, 2008, between Kappa Publishing Group, Inc. and Kable Distribution Services, Inc. (Incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q filed March 12, 2009) 10.2 (a) First Amendment, dated February 14, 2011, to the Amended and Restated Distribution Agreement, dated July 1, 2008, between Kappa Publishing Group, Inc. and Kable Distribution Services, Inc. (Incorporated by reference to Exhibit 10.2 to Registrant’s Annual Report on Form 10-K filed July 21, 2011) 10.3 Second Amendment, dated as of June 27, 2014, to Amended and Restated Distribution Agreement, dated as of June 27, 2014, between Kappa Publishing Group, Inc. and Kable Distribution Services, Inc. (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed July 1, 2014) 10.4 Tolling and Forbearance Agreement, dated August 13, 2012, between the Pension Benefit Guaranty Corporation and Registrant.
(Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed September 9, 2014) 10.10 Stock Purchase Agreement, dated as of February 9, 2015, between DFI Holdings, LLC, KPS Holdco, LLC and American Investment Republic Co. (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.11 Promissory Note, dated as of February 9, 2015, made by DFI Holdings, LLC and KPS Holdco, LLC in favor of American Investment Republic Co. (Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.12 Transition Services Agreement, dated as of February 9, 2015, between DFI Holdings, LLC, KPS Holdco, LLC and American Investment Republic Co. (Incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.13 Release Agreement, dated as of February 9, 2015, by American Investment Republic Co. in favor of Kable Media Services, Inc., Kable Distribution Services, Inc., Kable News Company, Inc., Kable News International, Inc., Kable Distribution Services of Canada, Ltd. and Kable Product Services, Inc. (Incorporated by reference to Exhibit 10.4 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.14 Release Agreement, dated as of February 9, 2015, by Kable Media Services, Inc., Kable Distribution Services, Inc., Kable News Company, Inc., Kable News International, Inc., Kable Distribution Services of Canada, Ltd. and Kable Product Services, Inc. in favor of American Investment Republic Co. (Incorporated by reference to Exhibit 10.5 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.15 Release Agreement, dated as of February 9, 2015, by DFI Holdings, LLC, KPS Holdco, LLC and Michael P. Duloc in favor of American Investment Republic Co. (Incorporated by reference to Exhibit 10.6 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.16 Line of Credit Promissory Note, dated as of February 9, 2015, made by Kable Media Services, Inc., Kable Distribution Services, Inc., Kable News Company, Inc., Kable News International, Inc., Kable Distribution Services of Canada, Ltd. and Kable Product Services, Inc. in favor of American Investment Republic Co. (Incorporated by reference to Exhibit 10.7 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.17 Guaranty Agreement, dated as of February 9, 2015, by Kable Media Services, Inc., Kable Distribution Services, Inc., Kable News Company, Inc., Kable News International, Inc., Kable Distribution Services of Canada, Ltd., Kable Product Services, Inc., DFI Holdings, LLC and KPS Holdco, LLC in favor of American Investment Republic Co. (Incorporated by reference to Exhibit 10.8 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.18 Security Agreement, dated as of February 9, 2015, by Kable Media Services, Inc., Kable Distribution Services, Inc., Kable News Company, Inc., Kable News International, Inc., Kable Distribution Services of Canada, Ltd., Kable Product Services, Inc., DFI Holdings, LLC and KPS Holdco, LLC in favor of American Investment Republic Co. (Incorporated by reference to Exhibit 10.9 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.19 Letter Agreement, dated January 20, 2016, among Kable Media Services, Inc., Kable Distribution Services, Inc., Kable News Company, Inc., Kable News International, Inc., Kable Distribution Services of Canada, Ltd., Kable Product Services, Inc., DFI Holdings, LLC and KPS Holdco, LLC and American Republic Investment Co. (Incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q filed March 15, 2016) 10.20 Asset Purchase Agreement, dated as of April 10, 2015, between TSJ Staffing, LLC and Kable Staffing Resources LLC.
(Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed November 21, 2012) 4.17 Consent Agreement, dated September 8, 2014, by and between Kappa Lending Group, LLC and AMREP Southwest Inc. (Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed September 9, 2014) 10.1 (a) Amended and Restated Distribution Agreement, dated July 1, 2008, between Kappa Publishing Group, Inc. and Kable Distribution Services, Inc. (Incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q filed March 12, 2009) 10.2 (a) First Amendment, dated February 14, 2011, to the Amended and Restated Distribution Agreement, dated July 1, 2008, between Kappa Publishing Group, Inc. and Kable Distribution Services, Inc. (Incorporated by reference to Exhibit 10.2 to Registrant’s Annual Report on Form 10-K filed July 21, 2011) 10.3 Second Amendment, dated as of June 27, 2014, to Amended and Restated Distribution Agreement, dated as of June 27, 2014, between Kappa Publishing Group, Inc. and Kable Distribution Services, Inc. (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed July 1, 2014) 10.4 Tolling and Forbearance Agreement, dated August 13, 2012, between the Pension Benefit Guaranty Corporation and Registrant.
(Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed September 9, 2014) 10.8 Stock Purchase Agreement, dated as of February 9, 2015, between DFI Holdings, LLC, KPS Holdco, LLC and American Investment Republic Co. (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.9 Promissory Note, dated as of February 9, 2015, made by DFI Holdings, LLC and KPS Holdco, LLC in favor of American Investment Republic Co. (Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.10 Transition Services Agreement, dated as of February 9, 2015, between DFI Holdings, LLC, KPS Holdco, LLC and American Investment Republic Co. (Incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.11 Release Agreement, dated as of February 9, 2015, by American Investment Republic Co. in favor of Kable Media Services, Inc., Kable Distribution Services, Inc., Kable News Company, Inc., Kable News International, Inc., Kable Distribution Services of Canada, Ltd. and Kable Product Services, Inc. (Incorporated by reference to Exhibit 10.4 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.12 Release Agreement, dated as of February 9, 2015, by Kable Media Services, Inc., Kable Distribution Services, Inc., Kable News Company, Inc., Kable News International, Inc., Kable Distribution Services of Canada, Ltd. and Kable Product Services, Inc. in favor of American Investment Republic Co. (Incorporated by reference to Exhibit 10.5 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.13 Release Agreement, dated as of February 9, 2015, by DFI Holdings, LLC, KPS Holdco, LLC and Michael P. Duloc in favor of American Investment Republic Co. (Incorporated by reference to Exhibit 10.6 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.14 Line of Credit Promissory Note, dated as of February 9, 2015, made by Kable Media Services, Inc., Kable Distribution Services, Inc., Kable News Company, Inc., Kable News International, Inc., Kable Distribution Services of Canada, Ltd. and Kable Product Services, Inc. in favor of American Investment Republic Co. (Incorporated by reference to Exhibit 10.7 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.15 Guaranty Agreement, dated as of February 9, 2015, by Kable Media Services, Inc., Kable Distribution Services, Inc., Kable News Company, Inc., Kable News International, Inc., Kable Distribution Services of Canada, Ltd., Kable Product Services, Inc., DFI Holdings, LLC and KPS Holdco, LLC in favor of American Investment Republic Co. (Incorporated by reference to Exhibit 10.8 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.16 Security Agreement, dated as of February 9, 2015, by Kable Media Services, Inc., Kable Distribution Services, Inc., Kable News Company, Inc., Kable News International, Inc., Kable Distribution Services of Canada, Ltd., Kable Product Services, Inc., DFI Holdings, LLC and KPS Holdco, LLC in favor of American Investment Republic Co. (Incorporated by reference to Exhibit 10.9 to Registrant’s Current Report on Form 8-K filed February 9, 2015) 10.17 Asset Purchase Agreement, dated as of April 10, 2015, between TSJ Staffing, LLC and Kable Staffing Resources LLC.
The effect of an increase or decrease in the Company’s estimated rate of returns of 1% during any period would be dependent upon the mix of magazines involved and the related selling prices and commission rates, but would generally result in a change in that quarter’s net commission revenues of approximately $77,000; ·management determines the allowance for doubtful accounts by attempting to identify troubled accounts by analyzing the credit risk of specific customers and by using historical experience applied to the aging of accounts and, where appropriate within the real estate business, by reviewing any collateral which may secure a receivable; ·real estate development costs are incurred throughout the life of a project, and the costs of initial sales from a project frequently must include a portion of costs that have been budgeted based on engineering estimates or other studies, but not yet incurred; ·asset impairment determinations are based upon the intended use of assets, expected future cash flows and estimates of fair value of assets.
As of April 30, 2014, the effect of every 0.25% change in the investment rate of return on retirement plan assets would increase or decrease the subsequent year’s pension expense by approximately $70,000 per year, and the effect of every 0.25% change in the weighted average discount interest rate would increase or decrease the subsequent year’s pension expense by approximately $38,000; ·the Company assesses risk for uncertain tax positions and recognizes the financial statement effects of a tax position when it is more likely than not that the position will be sustained upon examination by tax authorities; ·projected Company earnings (including currently unrealized gains on real estate inventory) for the recoverability of net deferred tax assets in the future; and ·the Company is currently involved in legal proceedings which are described in Part I, Item 3 of this annual report on Form 10-K and the Company estimates whether the legal proceedings relate to a probable loss and if so, then an estimate of probable loss within a range of potential probable losses is made for accrual in the financial statements.
(Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed November 21, 2012) 10.1 (a) Amended and Restated Distribution Agreement, dated July 1, 2008, between Kappa Publishing Group, Inc. and Kable Distribution Services, Inc. (Incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q filed March 12, 2009) 10.2 (a) First Amendment, dated February 14, 2011, to the Amended and Restated Distribution Agreement, dated July 1, 2008, between Kappa Publishing Group, Inc. and Kable Distribution Services, Inc. (Incorporated by reference to Exhibit 10.2 to Registrant’s Annual Report on Form 10-K filed July 21, 2011) 10.3 Second Amendment, dated as of June 27, 2014, to Amended and Restated Distribution Agreement, dated as of June 27, 2014, between Kappa Publishing Group, Inc. and Kable Distribution Services, Inc. (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed July 1, 2014) 10.4 Tolling and Forbearance Agreement, dated August 13, 2012, between the Pension Benefit Guaranty Corporation and Registrant.
The acquisition, ownership and development of real estate are subject to many risks that may adversely affect the Company’s results of operations, including risks that: • the Company may not be able to acquire a desired property because of competition from other real estate developers or investors who may have greater capital or better access to cash than the Company; • the Company may not be able to obtain or renew financing on acceptable terms, or at all; • an adverse change in market conditions during the interval between acquisition and sale of a property may result in a lower than originally anticipated profit; • the Company may underestimate the cost of development required to bring an acquired property up to standards established for the market position intended for that property; • acquired properties may be located in new markets where the Company may face risks associated with a lack of market knowledge or understanding of the local economy, a lack of business relationships in the area or unfamiliarity with local governmental and permitting procedures; and • the Company may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into the Company’s existing operations.
The effect of an increase or decrease in the Company’s estimated rate of returns of 1% during any period would be dependent upon the mix of magazines involved and the related selling prices and commission rates, but would generally result in a change in that quarter's net commission revenues of approximately $83,000; · management determines the allowance for doubtful accounts by attempting to identify troubled accounts by analyzing the credit risk of specific customers and by using historical experience applied to the aging of accounts and, where appropriate within the real estate business, by reviewing any collateral which may secure a receivable; · real estate development costs are incurred throughout the life of a project, and the costs of initial sales from a project frequently must include a portion of costs that have been budgeted based on engineering estimates or other studies, but not yet incurred; · asset impairment determinations are based upon the intended use of assets, expected future cash flows and estimates of fair value of assets; · benefit obligations and other pension plan accounting and disclosures are based upon numerous assumptions and estimates, including the expected rate of investment return on retirement plan assets, the discount rate used to determine the present value of liabilities, and certain employee-related factors such as turnover, retirement age and mortality.
As of April 30, 2013, the effect of every 0.25% change in the investment rate of return on retirement plan assets would increase or decrease the pension expense by approximately $65,000 per year, and the effect of every 0.25% change in the discount rate would increase or decrease the subsequent year’s pension cost by approximately $45,000; · the Company assesses risk for uncertain tax positions and recognizes the financial statement effects of a tax position when it is more likely than not that the position will be sustained upon examination by tax authorities; · projected Company earnings (including currently unrealized gains on real estate inventory) for the recoverability of net deferred tax assets in the future; and · the Company is currently involved in legal proceedings which are described in Part I, Item 3 of this annual report on Form 10-K and the Company estimates whether the legal proceedings relate to a probable loss and if so, then an estimate of probable loss within a range of potential probable losses is made for accrual in the financial statements.
The forward-looking statements contained in this report include, but are not limited to, statements regarding (i) current and future amounts due under any accelerated funding of the Company’s defined benefit pension plan obligation or the results of discussions with the PBGC about a comprehensive restructuring of the Company’s pension plan funding obligation, (ii) the Company’s ability to finance its future working capital and capital expenditure needs, (iii) the timing and extent of the Company’s required return of tax incentive monies to the State of Florida, (iv) potential losses and liquidity demands associated with the restructuring of a magazine wholesaler who has failed to timely meet its payment obligations to the Company and certain other national distributors, (v) the impact of greater than average selling pressure on the Company’s common stock price, particularly during periods following charitable donations of the Company’s common stock by one of the Company’s largest shareholders, (vi) the material adverse effect of the loss of material customer contracts, including the non-renewal of a significant customer contract in the Company’s Subscription Fulfillment Services business (with a scheduled expiration in February 2015) and of a significant customer contract in the Company’s Newsstand Distribution Services business (with a scheduled expiration in June 2014) and (vii) potential future failure to extend, renew or replace material indebtedness (due May 2015 and December 2017) and material liquidity sources, including liquidity needs that arise through the expiration of a significant customer contract in the Company’s Newsstand Distribution Services business in June 2014, and the associated material operational liquidity source under such contract.
The acquisition, ownership and development of real estate is subject to many risks that may adversely affect the Company’s results of operations, including risks that: • the Company may not be able to acquire a desired property because of competition from other real estate developers or investors who may have greater capital or better access to cash than the Company has; • the Company may not be able to obtain or renew financing on acceptable terms, or at all; • an adverse change in market conditions during the interval between acquisition and sale of a property may result in a lower than originally anticipated profit; • the Company may underestimate the cost of development required to bring an acquired property up to standards established for the market position intended for that property; • acquired properties may be located in new markets where the Company may face risks associated with a lack of market knowledge or understanding of the local economy, a lack of business relationships in the area or unfamiliarity with local governmental and permitting procedures; and • the Company may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into its existing operations.
The effect of an increase or decrease in the Company’s estimated rate of returns of 1% during any period would be dependent upon the mix of magazines involved and the related selling prices and commission rates, but would generally result in a change in that period’s net commission revenues of approximately $90,000; (ii) management determines the allowance for doubtful accounts by attempting to identify troubled accounts by analyzing the credit risk of specific customers and by using historical experience applied to the aging of accounts and, where appropriate within the real estate business, by reviewing any collateral which may secure a receivable; (iii) real estate development costs are incurred throughout the life of a project, and the costs of initial sales from a project frequently must include a portion of costs that have been budgeted based on engineering estimates or other studies, but not yet incurred; (iv) asset impairment determinations are based upon the intended use of assets, expected future cash flows and estimates of fair value of assets; (v) benefit obligations and other pension plan accounting and disclosures are based upon numerous assumptions and estimates, including the expected rate of investment return on retirement plan assets, the discount rate used to determine the present value of liabilities, and certain employee-related factors such as turnover, retirement age and mortality.
As of April 30, 2012, the effect of every 0.25% change in the investment rate of return on retirement plan assets would increase or decrease the pension expense by approximately $50,000 per year, and the effect of every 0.25% change in the discount rate would increase or decrease the subsequent year’s pension cost by approximately $46,000; (vi) the Company assesses risk for uncertain tax positions and recognizes the financial statement effects of a tax position when it is more likely than not that the position will be sustained upon examination by tax authorities; (vii) projected Company earnings (including currently unrealized gains on real estate inventory) for the recoverability of net deferred tax assets in the future and (viii) the Company is currently involved in legal proceedings which are described in Item 3 of this annual report on Form 10-K and the Company estimates whether the legal proceedings relate to a probable loss and if so, then an estimate of probable loss within a range of potential probable losses is made for accrual in the financial statements.
The acquisition, ownership and development of real estate is subject to many risks that may adversely affect the Company’s results of operations, including risks that: • the Company may not be able to acquire a desired property because of competition from other real estate developers or investors who may have greater capital or better access to cash than the Company has; • the Company may not be able to obtain or renew financing on acceptable terms, or at all; • an adverse change in market conditions during the interval between acquisition and sale of a property may result in a lower than originally anticipated profit; • the Company may underestimate the cost of development required to bring an acquired property up to standards established for the market position intended for that property; • acquired properties may be located in new markets where the Company may face risks associated with a lack of market knowledge or understanding of the local economy, a lack of business relationships in the area or unfamiliarity with local governmental and permitting procedures; or • the Company may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into its existing operations.
The effect of an increase or decrease in the Company’s estimated rate of returns of 1% during any period would be dependent upon the mix of magazines involved and the related selling prices and commission rates, but would generally result in a change in that period’s net commission revenues of approximately $100,000; (ii) management determines the allowance for doubtful accounts by attempting to identify troubled accounts by analyzing the credit risk of specific customers and by using historical experience applied to the aging of accounts and, where appropriate within the real estate business, by reviewing any collateral which may secure a receivable; (iii) real estate development costs are incurred throughout the life of a project, and the costs of initial sales from a project frequently A-22 must include a portion of costs that have been budgeted based on engineering estimates or other studies, but not yet incurred; (iv) asset impairment determinations (including goodwill, which is based on the fair value of reporting units) are based upon the intended use of assets and expected future cash flows; (v) benefit obligations and other pension plan accounting and disclosures are based upon numerous assumptions and estimates, including the expected rate of investment return on retirement plan assets, the discount rate used to determine the present value of liabilities, and certain employee-related factors such as turnover, retirement age and mortality.
The acquisition, ownership and development of real estate is subject to many risks that may adversely affect the Company’s results of operations, including the risks that: • the Company may not be able to acquire a desired property because of competition from other real estate investors who may have greater capital or better access to cash than the Company has; • the Company may not be able to obtain or renew financing on acceptable terms, or at all; • an adverse change in market conditions during the interval between acquisition and sale of a property may result in a lower than originally anticipated profit; • the Company may underestimate the cost of development required to bring an acquired property up to standards established for the market position intended for that property; • acquired properties may be located in new markets where the Company may face risks associated with a lack of market knowledge or understanding of the local economy, a lack of business relationships in the area or unfamiliarity with local governmental and permitting procedures; and • the Company may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into its existing operations.
Company Name / Index AMREP Corporation 222.48 293.29 261.37 93.17 72.67 S&P 500 Index 115.42 133.00 126.78 82.01 113.87 Similar Cap Issuers 134.84 150.35 133.94 89.73 121.15 The Similar Cap Issuers are: Aceto Corporation, AEP Industries Inc., Alnylam Pharmaceuticals, Inc., Atlantic Coast Federal Corporation, Bank of Marin Bancorp, BRT Realty Trust, Bryn Mawr Bank Corporation, Cascade Financial Corporation, Celadon Group, Inc., CenterState Banks, Inc., Cornell Companies, Inc., Curis, Inc. Dynamics Research Corporation, Eastern American Natural Gas Trust, Endologix, Inc., Gerber Scientific, Inc., Joe’s Jeans Inc., Kendle International Inc., LeCroy Corporation, National Bankshares, Inc., Nevada Gold & Casinos, Inc., Omnicell, Inc., Opnet Technologies, Inc., Sigma Designs, Inc., Team, Inc., Unifi, Inc. and Weyco Group, Inc. As a result of changes in market capitalizations from year to year, only Bank of Marin Bancorp in the Similar Cap Issuer index in the Company’s 2009 Form 10-K met the criteria for inclusion in the Similar Cap Issuer index in this Form 10-K.
The effect of an increase or decrease in the Company’s estimated rate of returns of 1% during any period would be dependent upon the mix of magazines involved and the related selling prices and commission rates, but would generally result in a change in that period’s net commission revenues of approximately $100,000; (ii) management determines the allowance for doubtful accounts by attempting to identify troubled accounts by analyzing the credit risk of specific customers and by using historical experience applied to the aging of accounts and, where appropriate within the real estate business, by reviewing any collateral which may secure a receivable; (iii) real estate development costs are incurred throughout the life of a project, and the costs of initial sales from a project frequently must include a portion of costs that have been budgeted based on engineering estimates or other studies, but not yet incurred; (iv) asset impairment determinations (including that of goodwill, which is based on the fair value of reporting units) are based upon the intended use of assets and expected future cash flows; (v) benefit obligations and other pension plan accounting and disclosures are based upon numerous assumptions and estimates, including the expected rate of investment return on retirement plan assets, the discount rate used to determine the present value of liabilities, and certain employee-related factors such as turnover, retirement age and mortality.
In the last three fiscal years, land sales in Rio Rancho have been as follows: Acres Revenues Sold Revenues Per Acre ---------- ----------------- --------------- 2009: Developed Residential 13 $ 3,109,000 $ 239,200 Commercial 1 126,000 126,000 ---------- ----------------- --------------- Total Developed 14 3,235,000 231,100 Undeveloped 134 5,679,000 42,400 ---------- ----------------- --------------- Total 148 $ 8,914,000 $ 60,200 ---------- ----------------- --------------- 2008: Developed Residential 30 $ 9,542,000 $ 318,100 Commercial 39 8,651,000 221,800 ---------- ----------------- --------------- Total Developed 69 18,193,000 263,700 Undeveloped 337 9,709,000 28,800 ---------- ----------------- --------------- Total 406 $ 27,902,000 $ 68,700 ---------- ----------------- --------------- 2007: Developed Residential 138 $ 39,407,000 $ 285,600 Commercial 56 15,728,000 280,900 ---------- ----------------- --------------- Total Developed 194 55,135,000 284,200 Undeveloped 857 40,690,000 47,500 ---------- ----------------- --------------- Total 1,051 $ 95,825,000 $ 91,200 ---------- ----------------- --------------- Since early 1977, AMREP Southwest has sold no individual lots without homes at Rio Rancho to consumers.
The acquisition, ownership and development of real estate is subject to many risks that may adversely affect the Company's results of operations, including the risks that: - the Company may not be able to acquire a desired property because of competition from other real estate investors who may have greater capital than the Company has; - the Company may not be able to obtain financing on acceptable terms, or at all; - an adverse change in market conditions during the interval between acquisition and sale of a property may result in a lower than originally anticipated profit; - the Company may underestimate the cost of development required to bring an acquired property up to standards established for the market position intended for that property; - acquired properties may be located in new markets where the Company may face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area and unfamiliarity with local governmental and permitting procedures; and - the Company may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into its existing operations.
Company Name / Index 2004 2005 2006 2007 2008 2009 ------------------------------------------------ ----------- ----------- ----------- ----------- ---------- ----------- AMREP Corporation 100 143.34 318.89 420.39 374.64 133.55 S&P 500 Index 100 106.34 122.73 141.43 134.82 87.21 Similar Cap Issuers 100 110.01 140.12 153.58 146.21 86.98 The Similar Cap Issuers are: American Dental Partners, Inc., American Safety Insurance Holdings, Ltd., American Software, Inc., Bank of Marin Bancorp, Cavalier Homes, Inc., Century Bancorp, Inc., Citizens South Banking Corporation, Combimatrix Corporation, Consolidated Water Co. Ltd., Continucare Corporation, Emcore Corporation, FNB United Corp., Frequency Electronics, Inc., Hawaiian Holdings, Inc., HMN Financial, Inc., HMS Holdings Corp., Indiana Community Bancorp, Luby's Inc., Markwest Energy Partners, L.P., Multi-Color Corporation, Northern States Financial Corporation, Olympic Steel, Inc., Oncothyreon, Inc., Osteotech, Inc., Pennsylvania Commerce Bancorp, Inc., Syms Corp. and Utah Medical Products, Inc. As a result of changes in market capitalizations from year to year, there was one company in the Similar Cap Issuer index in the Company's 2008 Form 10-K that met the criteria for inclusion in the Similar Cap Issuer index in this Form 10-K, Consolidated Water Co. Ltd.
The effect of an increase or decrease in the Company's estimated rate of returns of 1% during any period would be dependent upon the mix of magazines involved and the related selling prices and commission rates, but would generally result in a change in that period's net commission revenues of approximately $100,000; (ii) management determines the allowance for doubtful accounts by attempting to identify troubled accounts by analyzing the credit risk of specific customers and by using historical experience applied to the aging of accounts and, where appropriate within the real estate business, by reviewing any collateral which may secure a receivable; (iii) real estate development costs are incurred throughout the life of a project, and the costs of initial sales from a project frequently must include a portion of costs that have been budgeted based on engineering estimates or other studies, but not yet incurred; (iv) asset impairment determinations (including that of goodwill, which is based on the fair value of reporting units) are based upon the intended use of assets and expected future cash flows; (v) benefit obligations and other pension plan accounting and disclosures are based upon numerous assumptions and estimates, including the expected rate of investment return on retirement plan assets, the discount rate used to determine the present value of liabilities, and certain employee-related factors such as turnover, retirement age and mortality.
/s/ McGladrey & Pullen, LLP July 14, 2009 AMREP CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS APRIL 30, 2009 AND 2008 (Dollar amounts in thousands, except per share amount) ASSETS 2009 2008 ------ ---------------- ----------------- CASH AND CASH EQUIVALENTS $ 29,018 $ 32,608 RECEIVABLES, net: Real estate operations 3,367 13,124 Media services operations 34,614 45,701 ---------------- ----------------- 37,981 58,825 TAXES RECEIVABLE 3,009 - REAL ESTATE INVENTORY 81,561 70,252 INVESTMENT ASSETS, net 11,389 10,300 PROPERTY, PLANT AND EQUIPMENT, net 34,656 28,914 INTANGIBLE AND OTHER ASSETS, net 26,145 29,913 GOODWILL 3,893 54,139 ---------------- ----------------- TOTAL ASSETS $ 227,652 $ 284,951 ================ ================= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ LIABILITIES: ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 81,699 $ 98,532 NOTES PAYABLE: Amounts due within one year 25,770 4,816 Amounts subsequently due 12,166 21,164 ---------------- ----------------- 37,936 25,980 TAXES PAYABLE - 980 DEFERRED INCOME TAXES 1,071 12,358 ACCRUED PENSION COST 10,665 2,045 ---------------- ----------------- TOTAL LIABILITIES 131,371 139,895 ---------------- ----------------- SHAREHOLDERS' EQUITY: Common stock, $.10 par value; shares authorized - 20,000,000; shares issued - 7,420,704 at April 30, 2009 and 7,419,704 at April 30, 2008 742 742 Capital contributed in excess of par value 46,100 46,085 Retained earnings 84,942 128,408 Accumulated other comprehensive loss, net (8,846) (3,522) Treasury stock, 1,424,492 shares at April 30, 2009 and 2008, at cost (26,657) (26,657) ---------------- ----------------- TOTAL SHAREHOLDERS' EQUITY 96,281 145,056 ---------------- ----------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 227,652 $ 284,951 ================ ================= The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.
AMREP CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share amounts) Year Ended April 30, ------------------------------------------------------ 2009 2008 2007 --------------- --------------- --------------- REVENUES: Real estate land sales $ 8,914 $ 27,902 $ 95,825 Media services operations 136,206 138,696 100,505 Interest and other 781 5,463 8,509 --------------- --------------- --------------- 145,901 172,061 204,839 --------------- --------------- --------------- COSTS AND EXPENSES: Real estate land sales 2,156 9,760 31,154 Operating expenses: Media services operations 127,324 120,021 85,262 Real estate commissions and selling 342 731 1,404 Restructuring and fire recovery costs 1,050 1,513 - Other 1,489 840 1,376 General and administrative: Media services operations 12,694 12,053 9,235 Real estate operations and corporate 4,239 4,550 5,038 Goodwill impairment 50,246 - - Interest expense, net of capitalized amounts 715 1,012 702 --------------- --------------- ---------------- 200,255 150,480 134,171 --------------- --------------- ---------------- INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (54,354) 21,581 70,668 PROVISION (BENEFIT) FOR INCOME TAXES FROM CONTINUING OPERATIONS (10,888) 7,819 23,971 --------------- --------------- ---------------- INCOME (LOSS) FROM CONTINUING OPERATIONS (43,466) 13,762 46,697 LOSS FROM OPERATIONS OF DISCONTINUED BUSINESS (NET OF INCOME TAXES) - (57) (1,591) --------------- --------------- ---------------- NET INCOME (LOSS) $ (43,466) $ 13,705 $ 45,106 =============== =============== ================ EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS $ (7.25) $ 2.20 $ 7.02 LOSS PER SHARE FROM DISCONTINUED OPERATIONS - (0.01) (0.24) --------------- --------------- ---------------- EARNINGS (LOSS) PER SHARE - BASIC AND DILUTED $ (7.25) $ 2.19 $ 6.78 =============== =============== ================ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 5,996 6,248 6,650 =============== =============== ================ The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.
AMREP CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Amounts in thousands) Capital Accumulated Treasury Common Stock Contributed in Other Stock, ------------------- Excess of Retained Comprehensive at Shares Amount Par Value Earnings Loss Cost Total ------- -------- --------------- ---------- ------------- ---------- ----------- BALANCE, April 30, 2006 7,417 $ 742 $ 45,771 $ 81,875 $ (4,072) $ (5,346) $ 118,970 Net income - - - 45,106 - - 45,106 Other comprehensive income - - - - 1,210 - 1,210 ----------- Total comprehensive income 46,316 ----------- Cash dividend, $0.85 per share - - - (5,648) - - (5,648) Issuance of stock under Directors' Plan - - 287 - - 52 339 Exercise of stock options 3 - 27 - - - 27 ------- -------- --------------- ---------- ------------- ---------- ----------- BALANCE, April 30, 2007 7,420 742 46,085 121,333 (2,862) (5,294) 160,004 Net income - - - 13,705 - - 13,705 Other comprehensive income (loss) - - - - (660) - (660) ----------- Total comprehensive income 13,045 ----------- Cash dividend, $1.00 per share - - - (6,630) - - (6,630) Acquisition of treasury stock, 658,400 shares - - - - - (21,363) (21,363) ------- -------- --------------- ---------- ------------- ---------- ----------- BALANCE, April 30, 2008 7,420 742 46,085 128,408 (3,522) (26,657) 145,056 Net loss - - - (43,466) - - (43,466) Other comprehensive loss - - - - (5,324) - (5,324) ----------- Total comprehensive loss (48,790) ----------- Exercise of stock options 1 - 15 - - - 15 ------- -------- --------------- ---------- ------------- ---------- ----------- BALANCE, April 30, 2009 7,421 $ 742 $ 46,100 $ 84,942 $ (8,846) $ (26,657) $ 96,281 ============================================================================================== The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.
AMREP CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) Year Ended April 30, -------------------------------------------------- 2009 2008 2007 -------------- -------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (43,466) $ 13,705 $ 45,106 Adjustments to reconcile net income to net cash provided (used in) by operating activities: Goodwill impairment 50,246 - - Depreciation and amortization 10,159 10,524 7,319 Non-cash credits and charges: Gain on disposition of assets 114 (1,679) (4,115) Provision for doubtful accounts 6,775 (676) (227) Pension accrual 34 (967) 26 Stock based compensation - Directors' Plan - - 339 Changes in assets and liabilities, excluding the effect of acquisitions: Receivables 7,647 10,901 (10,901) Real estate inventory (4,313) (19,696) 1,064 Taxes receivable (3,009) - - Other assets (189) 272 (1,852) Accounts payable and accrued expenses, and deferred revenue (17,520) 11,328 33,156 Taxes payable (980) 925 (4,493) Deferred income taxes (8,025) 1,614 3,267 -------------- -------------- -------------- Net cash provided by (used in) operating activities (2,527) 26,251 68,689 -------------- -------------- -------------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures - property, plant, and equipment (5,212) (5,169) (1,797) Capital expenditures - investment assets - (1,208) (2,870) Proceeds from disposition of assets - 4,749 6,173 Acquisition, net of cash acquired (3,075) 195 (95,636) -------------- -------------- -------------- Net cash used in investing activities (8,287) (1,433) (94,130) -------------- -------------- -------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from debt financing 54,136 86,860 81,255 Principal debt payments (46,927) (93,179) (54,973) Exercise of stock options 15 - 27 Acquisition of treasury stock - (21,363) - Cash dividends - (6,630) (5,648) -------------- -------------- -------------- Net cash provided by (used in) financing activities 7,224 (34,312) 20,661 -------------- -------------- -------------- DECREASE IN CASH AND CASH EQUIVALENTS (3,590) (9,494) (4,780) Cash and cash equivalents, beginning of year 32,608 42,102 46,882 -------------- -------------- -------------- Cash and cash equivalents, end of year $ 29,018 $ 32,608 $ 42,102 ============== ============== =============== SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid - net of amounts capitalized $ 694 $ 1,085 $ 735 ============== ============== =============== Income taxes paid - net of refunds $ 1,648 $ 2,453 $ 24,261 ============== ============== =============== Non-cash transactions: Transfer to real estate inventory from receivables $ 6,979 $ 3,892 $ - ============== ============== =============== Transfer to real estate investment assets from receivables $ 1,125 $ - $ - ============== ============== =============== The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.
Net periodic pension cost (benefit) for 2009, 2008 and 2007 was comprised of the following components: Year Ended April 30, ----------------------------------------------------- 2009 2008 2007 --------------- ---------------- --------------- (Thousands) Interest cost on projected benefit obligation $ 1,806 $ 1,736 $ 1,789 Expected return on assets (2,077) (2,310) (2,224) Plan expenses 253 146 180 Recognized net actuarial loss 291 164 325 --------------- ---------------- --------------- Total cost (benefit) recognized in pretax income 273 (264) 70 Cost (benefit) recognized in pretax other comprehensive income 8,586 1,065 (2,017) --------------- ---------------- --------------- Net periodic pension cost (benefit) $ 8,859 $ 801 $ (1,947) =============== ================ =============== The estimated net loss, transition obligation and prior service cost for the plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $1,160,000, $0 and $0, respectively.
Assumptions used in determining net periodic pension cost and the benefit obligations were: Year Ended April 30, ----------------------------------------------------- 2009 2008 2007 -------------- --------------- --------------- Discount rate used to determine net periodic pension cost 6.42% 5.75% 5.75% Discount rate used to determine pension benefit obligation 7.08% 6.42% 5.75% Expected long-term rate of return on assets 8.0% 8.0% 8.0% The following table sets forth changes in the plan's benefit obligations and assets, and summarizes components of amounts recognized in the Company's consolidated balance sheets: April 30, ---------------------------------------------------- 2009 2008 2007 --------------- ------------- ------------- (Thousands) Change in benefit obligation: Benefit obligation at beginning of year $ 29,270 $ 31,283 $ 32,159 Interest cost 1,806 1,736 1,789 Actuarial (gain) loss (529) (1,616) (757) Benefits paid (2,300) (2,133) (1,908) --------------- ------------- ------------- Benefit obligation at end of year $ 28,247 $ 29,270 $ 31,283 --------------- ------------- ------------- Change in plan assets: Fair value of plan assets at beginning of year $ 27,225 $ 30,040 $ 28,925 Contributions 240 - 44 Actual return on plan assets (7,393) (507) 3,125 Benefits paid (2,300) (2,133) (1,908) Plan expenses (190) (175) (146) --------------- ------------- ------------- Fair value of plan assets at end of year $ 17,582 $ 27,225 $ 30,040 --------------- ------------- ------------- Funded (underfunded) status: $ (10,665) $ (2,045) $ (1,243) =============== ============= ============= Recognition of underfunded status: Accrued pension costs $ (10,665) $ (2,045) $ (1,243) =============== ============= ============= The following table summarizes the amounts recorded in accumulated other comprehensive loss, which have not yet been recognized as a component of net periodic pension expense (in thousands): 2009 2008 2007 --------------- ------------- ------------- Pre-tax accumulated comprehensive loss $ 14,423 $ 5,836 $ 4,771 --------------- ------------- ------------- Due to the adoption of SFAS No.
The following table summarizes the changes in accumulated other comprehensive loss related to the plan for the years ended April 30, 2009 and 2008 (in thousands): Pension Benefits ------------------------------- Pre-tax Net of Tax -------------- ------------- Accumulated comprehensive loss, May 1, 2007 $ 4,771 $ 2,862 Net actuarial loss 1,229 762 Amortization of net loss (164) (102) -------------- ------------- Accumulated comprehensive loss, April 30,2008 5,836 3,522 Net actuarial loss 8,877 5,504 Amortization of net loss (290) (180) -------------- ------------- Accumulated comprehensive loss, April 30,2009 $ 14,423 $ 8,846 ============== ============= The average asset allocation for the retirement plan by asset category was as follows: April 30, ------------------------------- 2009 2008 -------------- ------------- Equity securities 68% 74% Fixed income securities 28 23 Other (principally cash and cash equivalents) 4 3 -------------- ------------- Total 100% 100% ============== ============= The Company recorded other comprehensive income (loss), net of tax, of ($5,324,000) in 2009, ($660,000) in 2008 and $1,210,000 in 2007 to account for the net effect of changes to the unfunded pension liability.
A summary of activity in the Company's stock option plan is as follows: Year Ended April 30, ----------------------------------------------------------------------- 2009 2008 2007 -------------------- ----------------------- ---------------------- Weighted Weighted Weighted Number Average Number Average Number Average of Exercise of Exercise of Exercise Shares Price Shares Price Shares Price ------ ----- ------ ----- ------ ----- Options outstanding at beginning of year 4,500 $ 20.28 4,500 $ 20.28 7,000 $ 18.56 Granted - - - - - - Exercised (1,000) $ 15.19 - - (2,500) $ 15.47 Expired or canceled - - - - - - ----------------- ---------------- ---------------- Options outstanding at end of year 3,500 $ 21.74 4,500 $ 20.28 4,500 $ 20.28 ================= ================ ================ Available for grant at end of year - - - ================= ================ ================ Options exercisable at end of year 3,500 4,500 4,500 ================= ================ ================ Range of exercise prices for options exercisableat end of year $17.55 to $24.88 $15.19 to $24.88 $15.19 to $24.88 ================= ================ ================ Options outstanding at April 30, 2009 are presently exercisable and expire, in part in September 2009 with the balance expiring in September 2010.
(12) INCOME TAXES: ------------- The provision (benefit) for income taxes consists of the following: Year Ended April 30, ------------------------------------------------------- 2009 2008 2007 ---------------- --------------- --------------- (Thousands) Current: Federal $ (3,169) $ 5,511 $ 18,228 State and local 305 (812) 1,540 ---------------- --------------- --------------- (2,864) 4,699 19,768 ---------------- --------------- --------------- Deferred: Federal (6,746) 2,777 2,940 State and local (1,278) 309 328 ---------------- --------------- --------------- (8,024) 3,086 3,268 ---------------- --------------- --------------- Total provision (benefit) for income taxes $ (10,888) $ 7,785 $ 23,036 ================ =============== =============== The provision (benefit) for income taxes has been allocated as follows: Year Ended April 30, ------------------------------------------------------- 2009 2008 2007 ---------------- --------------- --------------- (Thousands) Continuing operations $ (10,888) $ 7,819 $ 23,971 Discontinued operations - (34) (935) ---------------- --------------- --------------- Total provision for income taxes $ (10,888) $ 7,785 $ 23,036 ================ =============== =============== The components of the net deferred income tax liability are as follows: April 30, ------------------------------------- 2009 2008 --------------- ---------------- (Thousands) Deferred income tax assets: State tax loss carryforwards $ 3,956 $ 3,679 Accrued pension costs 3,719 785 Federal NOL carryforward 1,790 1,752 Vacation accrual 1,175 1,236 Intangibles and deductible goodwill 9,712 1,098 Other (195) (285) --------------- ---------------- Total deferred income tax assets 20,157 8,265 --------------- ---------------- Deferred income tax liabilities: Real estate basis differences (1,765) (1,527) Reserve for periodical returns (1,883) (2,210) Depreciable assets (5,772) (2,532) Deferred gains on investment assets (5,869) (7,019) Capitalized costs for financial reporting purposes, expensed for tax (3,525) (4,670) --------------- ---------------- Total deferred income tax liabilities (18,814) (17,958) --------------- ---------------- Valuation allowance for realization of state tax loss carryforwards (2,414) (2,665) --------------- ---------------- Net deferred income tax liability $ (1,071) $ (12,358) =============== ================ The following table reconciles taxes computed at the U.S. federal statutory income tax rate from continuing operations to the Company's actual tax provision: Year Ended April 30, --------------------------------------------------------- 2009 2008 2007 ----------------- ---------------- --------------- (Thousands) Computed tax provision at statutory rate $ (19,013) $ 7,554 $ 24,734 Increase (reduction) in tax resulting from: State income taxes, net of federal income tax effect (631) (325) 1,296 Real estate charitable land contribution - (481) (1,419) Adjustment for unrecognized tax benefits (481) 1,160 - Non-deductible goodwill impairment (see Note 10) 9,367 - - Other (130) (89) (640) ----------------- ---------------- ---------------- Actual tax provision $ (10,888) $ 7,819 $ 23,971 ================= ================ ================ A valuation allowance is provided when it is considered more likely than not that certain deferred tax assets will not be realized.
Summarized data relative to the industry segments in which the Company has continuing operations is as follows (amounts in thousands): Product Real Estate Subscription Newsstand Fulfillment Operations Fulfillment Distribution Services and Corporate Services Services Other and Other Consolidated ------------------------------------------------------------------------------------------ Year ended April 30, 2009 (a): Revenues $ 9,621 $ 115,964 $ 12,400 $ 7,842 $ 74 $ 145,901 Income (loss) from continuing operations 2,565 (43,839) (3,510) 304 1,014 (43,466) Provision (benefit) for income taxes from continuing operations 465 (10,490) (1,786) 223 700 (10,888) Interest expense (income), net (b) 73 2,855 (1,050) 31 (1,194) 715 Depreciation and amortization 39 9,423 564 56 77 10,159 Goodwill impairment - 50,246 - - - 50,246 ------------------------------------------------------------------------------------------ EBITDA (c) $ 3,142 $ 8,195 $ (5,782) $ 614 $ 597 $ 6,766 ------------------------------------------------------------------------------------------ Goodwill $ - $ - $ 3,893 $ - $ - $ 3,893 Total assets $ 97,970 $ 56,111 $ 55,918 $ 4,618 $ 13,035 $ 227,652 Capital expenditures $ 3,114 $ 1,698 $ 10 $ 326 $ 64 $ 5,212 --------------------------------------------------------------------------------------------------------------------------------------- Year ended April 30, 2008 (a): Revenues $ 33,073 $ 122,521 $ 12,916 $ 3,259 $ 292 $ 172,061 Income (loss) from continuing operations 12,187 (1,554) 1,293 141 1,695 13,762 Provision (benefit) for income taxes from continuing operations 6,932 (830) 812 75 830 7,819 Interest expense (income), net (b) - 5,041 (1,571) - (2,458) 1,012 Depreciation and amortization 135 9,434 872 77 6 10,524 ------------------------------------------------------------------------------------------ EBITDA (c) $ 19,254 $ 12,091 $ 1,406 $ 293 $ 73 $ 33,117 ------------------------------------------------------------------------------------------ Goodwill $ - $ 50,246 $ 3,893 $ - $ - $ 54,139 Total assets $ 94,610 $ 135,335 $ 51,297 $ - $ 3,709 $ 284,951 Capital expenditures $ 1,312 $ 4,888 $ 174 $ - $ 3 $ 6,377 --------------------------------------------------------------------------------------------------------------------------------------- Year ended April 30, 2007 (a): Revenues $ 102,848 $ 83,011 $ 14,384 $ 3,110 $ 1,486 $ 204,839 Income from continuing operations 43,190 49 2,009 105 1,344 46,697 Provision (benefit) for income taxes from continuing operations 22,688 44 1,226 94 (81) 23,971 Interest expense (income), net (b) - 2,202 (716) - (784) 702 Depreciation and amortization 201 6,001 953 159 5 7,319 ------------------------------------------------------------------------------------------ EBITDA (c) $ 66,079 $ 8,296 $ 3,472 $ 358 $ 484 $ 78,689 ------------------------------------------------------------------------------------------ Goodwill $ - $ 50,441 $ 3,893 $ - $ - $ 54,334 Total assets $ 88,756 $ 142,563 $ 39,214 $ - $ 22,126 $ 292,659 Capital expenditures $ 2,871 $ 1,779 $ - $ - $ 17 $ 4,667 (a) Segment information reported above does not include net income (loss) from discontinued operations of $0, ($57,000) and ($1,591,000) in 2009, 2008 and 2007.
(21) SELECTED QUARTERLY FINANCIAL DATA (Unaudited): ---------------------------------------------- (In thousands of dollars, except per share amounts) Quarter Ended --------------------------------------------------------------- Year ended April 30, 2009: July 31, October 31, January 31, April 30, 2008 2008 2009 2009 (b) -------------- --------------- -------------- -------------- Revenues $ 35,570 $ 40,290 $ 35,720 $ 34,321 Gross profit 4,201 9,443 4,131 (3,893) Net income (loss) $ 71 $ 2,895 $ (100) $ (46,332) ============== =============== ============== ============== Earnings (loss) per share - basic and diluted (a) $ .01 $ .48 $ (.02) $ (7.73) ============== =============== ============== ============== Year ended April 30, 2008: July 31, October 31, January 31, April 30, 2007 2007 2008 2008 -------------- --------------- -------------- -------------- Revenues $ 51,359 $ 42,090 $ 43,435 $ 35,177 Gross profit 15,057 9,829 10,529 4,893 Income from continuing operations 6,320 3,467 3,446 529 -------------- --------------- -------------- -------------- Loss from operations of discontinued business, net of taxes (57) - - - -------------- --------------- -------------- -------------- Net income $ 6,263 $ 3,467 $ 3,446 $ 529 ============== =============== ============== ============== Earnings per share - Basic and Diluted (a): Continuing operations $ .95 $ .55 $ .57 $ .09 Discontinued operations (.01) - - - -------------- --------------- -------------- -------------- Total $ .94 $ .55 $ .57 $ .09 ============== =============== ============== ============== (a) The sum of the quarters does not equal the full year earnings per share due to rounding in 2009 and changes in outstanding shares during 2008.
/s/ Peter M. Pizza /s/ Albert V. Russo ------------------------- -------------------------- Peter M. Pizza Albert V. Russo Vice President and Chief Financial Director Officer Principal Financial Dated: July 14, 2009 Officer and Principal Accounting Officer* Dated: July 14, 2009 /s/ Edward B. Cloues II /s/ Samuel N. Seidman ------------------------ -------------------------- Edward B. Cloues II Samuel N. Seidman Director Director Dated: July 14, 2009 Dated: July 14, 2009 /s/ Lonnie A. Coombs /s/ James Wall ------------------------ -------------------------- Lonnie A. Coombs James Wall Director Director* Dated: July 14, 2009 Dated: July 14, 2009 /s/ Jonathan B, Weller ------------------------ -------------------------- Nicholas G. Karabots Jonathan B, Weller Director Director Dated: July __, 2009 Dated: July 14, 2009 /s/ Michael P. Duloc -------------------------- Michael P. Duloc President, Kable Media Services, Inc.* Dated: July 14, 2009 ----------------- *The Registrant is a holding company that does substantially all of its business through two indirect wholly-owned subsidiaries (and their subsidiaries).
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS ----------------------------------------------- (Thousands) Additions -------------------------------- Charges Charged Balance at (Credits) to (Credited) to Beginning Costs and Other Balance at End Description of Period Expenses Accounts Deductions of Period ----------- --------------- --------------- ---------------- -------------- -------------- FOR THE YEAR ENDED APRIL 30, 2009: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 112 $ - $ - $ 22 $ 90 Allowance for estimated returns and doubtful accounts (included in receivables - media services operations on the consolidated balance sheet) $ 56,585 $ (264) $ - $ 184 $ 56,137 ---------------- --------------- ---------------- -------------- -------------- FOR THE YEAR ENDED APRIL 30, 2008: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 48 $ 64 $ - $ - $ 112 ---------------- --------------- ---------------- -------------- -------------- Allowance for estimated returns and doubtful accounts (included in receivables - media services operations on the consolidated balance sheet) $ 53,606 $ 3,521 $ - $ 542 $ 56,585 --------------- --------------- ---------------- -------------- -------------- FOR THE YEAR ENDED APRIL 30, 2007: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 96 $ - $ - $ 48 $ 48 --------------- --------------- ---------------- -------------- -------------- Allowance for estimated returns and doubtful accounts (included in receivables - media services operations on the consolidated balance sheet) $ 55,606 $ (1,447) $ - $ 553 $ 53,606 --------------- --------------- ---------------- -------------- -------------- Note: Charges (credits) recorded in magazine circulation operations include a reserve for the estimate of magazine returns from wholesalers, which are substantially offset by offsetting credits related to the return of these magazines to publishers.
In the last three fiscal years, land sales in Rio Rancho have been as follows: Acres Revenues Sold Revenues Per Acre ---------- ----------------- --------------- 2008: Developed Residential 30 $ 9,542,000 $ 318,100 Commercial 39 8,651,000 221,800 ---------- ----------------- --------------- Total Developed 69 18,193,000 263,700 Undeveloped 337 9,709,000 28,800 ---------- ----------------- --------------- Total 406 $ 27,902,000 $ 68,700 ---------- ----------------- --------------- 2007: Developed Residential 138 $ 39,407,000 $ 285,600 Commercial 56 15,728,000 280,900 ---------- ----------------- --------------- Total Developed 194 55,135,000 284,200 Undeveloped 857 40,690,000 47,500 ---------- ----------------- --------------- Total 1,051 $ 95,825,000 $ 91,200 ---------- ----------------- --------------- 2006: Developed Residential 147 $ 31,920,000 $ 217,100 Commercial 22 6,376,000 289,800 ---------- ----------------- --------------- Total Developed 169 38,296,000 226,600 Undeveloped 746 19,514,000 26,200 ---------- ----------------- --------------- Total 915 $ 57,810,000 $ 63,200 ---------- ----------------- --------------- Other Properties The Company also owns two tracts of land in Colorado, consisting of one residential property of approximately 160 acres planned for approximately 350 homes that the Company intends to offer for sale upon obtaining all necessary entitlements, and one property of approximately 10 acres zoned for commercial use, which is being offered for sale.
The acquisition, ownership and development of real estate is subject to many risks that may adversely affect the Company's results of operations, including the risks that: - the Company may not be able to acquire a desired property because of competition from other real estate investors with greater capital than the Company has; - the Company may not be able to obtain financing on acceptable terms, or at all; - an adverse change in market conditions during the interval between acquisition and sale of a property may result in a lower than originally anticipated profit; - the Company may underestimate the cost of development required to bring an acquired property up to standards established for the market position intended for that property; - acquired properties may be located in new markets where the Company may face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area and unfamiliarity with local governmental and permitting procedures; and - the Company may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into its existing operations, and this could have an adverse effect on its results of operations.
Company Name / Index 2003 2004 2005 2006 2007 2008 ----------------------------------------------------------------------------------------------------- AMREP CORP 100 187.86 269.27 599.07 789.75 703.81 S&P 500 INDEX 100 122.88 130.67 150.81 173.79 165.66 SIMILAR CAP ISSUERS 100 258.59 293.77 400.95 402.50 275.44 The Similar Cap Issuers are: Array Biopharma Inc., ATP Oil & Gas Corporation, Avigen, Inc., Bar Harbor Bankshares, Blue Coat Systems, Inc., California Coastal Communities, Inc., Capital Senior Living Corporation, Charles & Colvard, Ltd., ChipMOS Technologies (Bermuda) Ltd., Communications Systems, Inc., Consolidated Water Co. Ltd., Dynamex Inc., Heska Corporation, Interleukin Genetics, Inc., Ladish Co., Inc., Landec Corporation, LCA-Vision Inc., Mesabi Trust, Network Engines, Inc., Peoples Community Bancorp, Inc., Performance Technologies, Incorporated, Pioneer Drilling Company, Poniard Pharmaceuticals, Inc., Sparton Corporation, Tandy Brands Accessories, Inc., USA Mobility, Inc., Vist Financial Corp. As a result of changes in market capitalizations from year to year, none of the companies comprising the Similar Cap Issuer index in the Company's 2007 Form 10-K met the criteria for inclusion in the Similar Cap Issuer index in this Form 10-K.
The effect of an increase or decrease in the Company's estimated rate of returns of 1% during any period would be dependent upon the mix of magazines involved and the related selling prices and commission rates, but would generally result in a change in that period's net commission revenues of approximately $125,000; (ii) management determines the allowance for doubtful accounts by attempting to identify troubled accounts by analyzing the credit risk of specific customers and by using historical experience applied to the aging of accounts and, where appropriate within the real estate business, by reviewing any collateral which may secure a receivable; (iii) real estate development costs are incurred throughout the life of a project, and the costs of initial sales from a project frequently must include a portion of costs that have been budgeted based on engineering estimates or other studies, but not yet incurred; (iv) percentage-of-completion revenue recognition for certain development contracts is based on the percentage of total costs incurred to date in proportion to total estimated costs to complete the contract.
/s/ McGladrey & Pullen, LLP July 14, 2008 AMREP CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS APRIL 30, 2008 AND 2007 (Dollar amounts in thousands) ASSETS 2008 2007 ------ ---------------- ----------------- CASH AND CASH EQUIVALENTS $ 32,608 $ 42,102 RECEIVABLES, net: Real estate operations 13,124 25,117 Media services operations 45,701 47,825 ---------------- ----------------- 58,825 72,942 REAL ESTATE INVENTORY 70,252 46,584 INVESTMENT ASSETS, net 10,300 12,165 PROPERTY, PLANT AND EQUIPMENT, net 28,914 30,518 INTANGIBLE AND OTHER ASSETS, net 29,913 34,014 GOODWILL 54,139 54,334 ---------------- ----------------- TOTAL ASSETS $ 284,951 $ 292,659 ================ ================= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ LIABILITIES: ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 98,532 $ 83,557 DEFERRED REVENUE - 4,352 NOTES PAYABLE: Amounts due within one year 4,816 5,297 Amounts subsequently due 21,164 27,002 ---------------- ----------------- 25,980 32,299 TAXES PAYABLE 980 55 DEFERRED INCOME TAXES 12,358 11,149 ACCRUED PENSION COST 2,045 1,243 ---------------- ----------------- TOTAL LIABILITIES 139,895 132,655 ---------------- ----------------- SHAREHOLDERS' EQUITY: Common stock, $.10 par value; shares authorized - 20,000,000; shares issued - 7,419,704 at April 30, 2008 and 2007 742 742 Capital contributed in excess of par value 46,085 46,085 Retained earnings 128,408 121,333 Accumulated other comprehensive loss, net (3,522) (2,862) Treasury stock, 1,424,492 shares at April 30, 2008 and 766,092 shares at April 30, 2007, at cost (26,657) (5,294) ---------------- ----------------- TOTAL SHAREHOLDERS' EQUITY 145,056 160,004 ---------------- ----------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 284,951 $ 292,659 ================ ================= The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.
AMREP CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share amounts) Year Ended April 30, ------------------------------------------------------- 2008 2007 2006 --------------- --------------- ---------------- REVENUES: Real estate land sales $ 27,902 $ 95,825 $ 57,810 Media services operations 138,696 100,505 88,463 Interest and other 5,463 8,509 2,023 --------------- --------------- ---------------- 172,061 204,839 148,296 --------------- --------------- ---------------- COSTS AND EXPENSES: Real estate land sales 9,760 31,154 26,732 Operating expenses: Media services operations 120,021 85,262 73,956 Real estate commissions and selling 731 1,404 1,427 Restructuring and fire recovery costs 1,513 - - Other 840 1,376 1,114 General and administrative: Media services operations 12,053 9,235 7,686 Real estate operations and corporate 4,550 5,038 4,310 Interest expense, net of capitalized amounts 1,012 702 344 --------------- --------------- ---------------- 150,480 134,171 115,569 --------------- --------------- ---------------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 21,581 70,668 32,727 PROVISION FOR INCOME TAXES FROM CONTINUING OPERATIONS 7,819 23,971 10,233 --------------- --------------- ---------------- INCOME FROM CONTINUING OPERATIONS 13,762 46,697 22,494 INCOME (LOSS) FROM OPERATIONS OF DISCONTINUED BUSINESS (NET OF INCOME TAXES) (57) (1,591) 3,556 --------------- --------------- ---------------- NET INCOME $ 13,705 $ 45,106 $ 26,050 =============== =============== ================ EARNINGS PER SHARE FROM CONTINUING OPERATIONS $ 2.20 $ 7.02 $ 3.39 EARNINGS (LOSS) PER SHARE FROM DISCONTINUED OPERATIONS (0.01) (0.24) .54 --------------- --------------- ---------------- EARNINGS PER SHARE - BASIC AND DILUTED $ 2.19 $ 6.78 $ 3.93 =============== =============== ================ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 6,248 6,650 6,633 =============== =============== ================ The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.
AMREP CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Amounts in thousands) Capital Accumulated Treasury Common Stock Contributed in Other Stock, ------------------- Excess of Retained Comprehensive at Shares Amount Par Value Earnings Loss Cost Total ------- -------- --------------- ---------- ------------- ---------- ----------- BALANCE, April 30, 2005 7,415 $ 741 $ 45,395 $ 82,695 $ (5,976) $ (5,450) $ 117,405 Net income - - - 26,050 - - 26,050 Other comprehensive income - - - - 1,904 - 1,904 ----------- Total comprehensive income 27,954 ----------- Cash dividend, $4.05 per share - - - (26,870) - - (26,870) Issuance of stock under Directors' Plan - 1 336 - - 104 441 Exercise of stock options 2 - 40 - - - 40 ------- -------- --------------- ---------- ------------- ---------- ----------- BALANCE, April 30, 2006 7,417 742 45,771 81,875 (4,072) (5,346) 118,970 Net income - - - 45,106 - - 45,106 Other comprehensive income - - - - 1,210 - 1,210 ----------- Total comprehensive income 46,316 ----------- Cash dividend, $0.85 per share - - - (5,648) - - (5,648) Issuance of stock under Directors' Plan - - 287 - - 52 339 Exercise of stock options 3 - 27 - - - 27 ------- -------- --------------- ---------- ------------- ---------- ----------- BALANCE, April 30, 2007 7,420 742 46,085 121,333 (2,862) (5,294) 160,004 Net income - - - 13,705 - - 13,705 Other comprehensive income (loss) - - - - (660) - (660) ----------- Total comprehensive income 13,045 ----------- Cash dividend, $1.00 per share - - - (6,630) - - (6,630) Acquisition of treasury stock, 658,400 shares - - - - - (21,363) (21,363) ------- -------- --------------- ---------- ------------- ---------- ----------- BALANCE, April 30, 2008 7,420 $ 742 $ 46,085 $ 128,408 $ (3,522) $ (26,657) $ 145,056 ======= ======== =============== ========== ============= ========== =========== The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.
AMREP CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) Year Ended April 30, --------------------------------------------------- 2008 2007 2006 -------------- -------------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 13,705 $ 45,106 $ 26,050 Adjustments to reconcile net income to net cash provided by operating activities- Depreciation and amortization 10,524 7,319 5,568 Non-cash credits and charges: Gain on disposition of assets (1,679) (4,115) (5,345) Provision for doubtful accounts (676) (227) (104) Pension accrual (967) 26 627 Stock based compensation - Directors' Plan - 339 441 Changes in assets and liabilities, excluding the effect of acquisitions: Receivables 10,901 (10,901) 4,202 Real estate inventory (19,696) 1,064 6,942 Other assets 272 (1,852) (4,027) Accounts payable and accrued expenses, and deferred revenue 11,328 33,156 3,400 Taxes payable 925 (4,493) 2,328 Deferred income taxes 1,614 3,267 1,764 -------------- -------------- --------------- Net cash provided by operating activities 26,251 68,689 41,846 -------------- -------------- --------------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures - property, plant, and equipment (5,169) (1,797) (3,683) Capital expenditures - investment assets (1,208) (2,870) (213) Proceeds from disposition of assets 4,749 6,173 4,057 Acquisition, net of cash acquired 195 (95,636) - -------------- -------------- --------------- Net cash provided by (used in) investing activities (1,433) (94,130) 161 -------------- -------------- --------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from debt financing 86,860 81,255 29,162 Principal debt payments (93,179) (54,973) (35,200) Exercise of stock options - 27 40 Acquisition of treasury stock (21,363) - - Cash dividends (6,630) (5,648) (26,870) -------------- -------------- --------------- Net cash provided by (used in) financing activities (34,312) 20,661 (32,868) -------------- -------------- --------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (9,494) (4,780) 9,139 CASH AND CASH EQUIVALENTS, beginning of year 42,102 46,882 37,743 -------------- -------------- --------------- CASH AND CASH EQUIVALENTS, end of year $ 32,608 $ 42,102 $ 46,882 ============== ============== =============== SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid - net of amounts capitalized $ 1,085 $ 735 $ 377 ============== ============== =============== Income taxes paid - net of refunds $ 2,453 $ 24,261 $ 8,230 ============== ============== =============== Non-cash transactions: Foreclosure on land sale contract $ 3,892 $ - $ 1,795 Transfer of development costs from inventory to investment assets $ - $ - $ 262 ============== ============== =============== The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.
Assumptions used in determining net periodic pension cost and the benefit obligations were: Year Ended April 30, ----------------------------------------------------- 2008 2007 2006 -------------- --------------- --------------- Discount rate used to determine net periodic pension cost 5.75% 5.75% 5.75% Discount rate used to determine pension benefit obligation 6.42% 5.75% 5.75% Expected long-term rate of return on assets 8.0% 8.0% 8.0% The following table sets forth changes in the plan's benefit obligations and assets, and summarizes components of amounts recognized in the Company's consolidated balance sheets: April 30, --------------------------------------------------- 2008 2007 2006 ------------- ------------- -------------- (Thousands) Change in benefit obligation: Benefit obligation at beginning of year $ 31,283 $ 32,159 $ 31,808 Interest cost 1,736 1,789 1,780 Actuarial (gain) loss (1,616) (757) 418 Benefits paid (2,133) (1,908) (1,847) ------------- ------------- -------------- Benefit obligation at end of year $ 29,270 $ 31,283 $ 32,159 ------------- ------------- -------------- Change in plan assets: Fair value of plan assets at beginning of year $ 30,040 $ 28,925 $ 26,028 Contributions - 44 - Actual return on plan assets (507) 3,125 4,924 Benefits paid (2,133) (1,908) (1,847) Plan expenses (175) (146) (180) ------------- ------------- -------------- Fair value of plan assets at end of year $ 27,225 $ 30,040 $ 28,925 ------------- ------------- -------------- Funded status: Benefit obligation in excess of plan assets $ (2,045) $ (1,243) $ (3,234) Unrecognized net actuarial loss 5,836 4,771 6,788 ------------- ------------- -------------- Net asset (liability) recognized in the balance sheets $ (3,791) $ (3,528) $ 3,554 ============= ============= ============== Amounts recognized on the balance sheets: Accrued pension costs $ (2,045) $ (1,243) $ (3,234) Pre-tax accumulated comprehensive loss 5,836 4,771 6,788 ------------- ------------- -------------- $ (3,791) $ (3,528) $ 3,554 ============= ============= ============== Due to the adoption of SFAS No.
A summary of activity in the Company's stock option plan is as follows: Year Ended April 30, ----------------------------------------------------------------------- 2008 2007 2006 -------------------- ----------------------- ---------------------- Weighted Weighted Weighted Number Average Number Average Number Average of Exercise of Exercise of Exercise Shares Price Shares Price Shares Price ------ ----- ------ ----- ------ ----- Options outstanding at beginning of year 4,500 $ 20.28 7,000 $ 18.56 7,000 $ 14.92 Granted - - - - 3,000 24.88 Exercised - - (2,500) 15.47 (2,500) 16.13 Expired or canceled - - - - (500) 17.56 ----------------- ----------------- --------------- Options outstanding at end of year 4,500 $ 20.28 4,500 $ 20.28 7,000 $ 18.56 ================= ================= =============== Available for grant at end of year - - - ================= ================= =============== Options exercisable at end of year 4,500 4,500 4,000 ================= ================= =============== Range of exercise prices for options exercisable at end of year $15.19 to $24.88 $15.19 to $24.88 $3.95 to $24.88 ================= ================= =============== Options outstanding at April 30, 2008 were exercisable over a four-year period beginning one year from date of grant.
(12) INCOME TAXES: ------------- The provision for income taxes consists of the following: Year Ended April 30, ------------------------------------------------------- 2008 2007 2006 ---------------- --------------- --------------- (Thousands) Current: Federal $ 5,511 $ 18,228 $ 9,735 State and local (812) 1,540 823 ---------------- --------------- --------------- $ 4,699 19,768 10,558 ---------------- --------------- --------------- Deferred: Federal $ 2,777 2,940 1,587 State and local 309 328 176 ---------------- --------------- --------------- 3,086 3,268 1,763 ---------------- --------------- --------------- Total provision for income taxes $ 7,785 $ 23,036 $ 12,321 ================ =============== =============== The provision for income taxes has been allocated as follows: Year Ended April 30, ------------------------------------------------------- 2008 2007 2006 ---------------- --------------- --------------- (Thousands) Continuing operations $ 7,819 $ 23,971 $ 10,233 Discontinued operations (34) (935) 2,088 ---------------- --------------- --------------- Total provision for income taxes $ 7,785 $ 23,036 $ 12,321 ================ =============== =============== The components of the net deferred income tax liability are as follows: April 30, ------------------------------------- 2008 2007 --------------- ---------------- (Thousands) Deferred income tax assets: State tax loss carryforwards $ 3,679 $ 3,359 Accrued pension costs 785 450 Federal NOL carryforward 1,752 2,895 Vacation accrual 1,236 1,236 Other (285) 1,097 --------------- ---------------- Total deferred income tax assets $ 7,167 9,037 --------------- ---------------- Deferred income tax liabilities: Real estate basis differences $ (1,527) (2,181) Reserve for periodical returns (2,210) (1,888) Depreciable assets (2,532) (4,680) Deferred gains on investment assets (7,019) (5,150) Capitalized costs for financial reporting purposes, expensed for tax (3,572) (3,624) --------------- ---------------- Total deferred income tax liabilities (16,860) (17,523) --------------- ---------------- Valuation allowance for realization of state tax loss carry forwards (2,665) (2,663) --------------- ---------------- Net deferred income tax liability $ (12,358) $ (11,149) =============== ================ The following table reconciles taxes computed at the U.S. federal statutory income tax rate from continuing operations to the Company's actual tax provision: Year Ended April 30, -------------------------------------------------------- 2008 2007 2006 ----------------- --------------- --------------- (Thousands) Computed tax provision at statutory rate $ 7,554 $ 24,734 $ 11,455 Increase (reduction) in tax resulting from: State income taxes, net of federal income tax effect (325) 1,296 552 Real estate charitable land contribution (481) (1,419) (1,543) Other 1,071 (640) (231) ----------------- --------------- ---------------- Actual tax provision $ 7,819 $ 23,971 $ 10,233 ================= =============== ================ Other in 2008 principally includes additions related to unrecognized tax benefits and related interest from tax positions of prior years.
Summarized data relative to the industry segments in which the Company has continuing operations is as follows (amounts in thousands): Newsstand Real Estate Fulfillment Distribution Operations Services Services Corporate Consolidated ------------- ------------ ------------ ------------ ------------- Year ended April 30, 2008 (a): Revenues $ 33,073 $ 125,780 $ 12,916 $ 292 $ 172,061 Income from continuing operations 12,187 (1,413) 1,293 1,695 13,762 Provision (benefit) for income taxes from continuing operations 6,932 (755) 812 830 7,819 Interest expense (income), net (b) - 5,041 (1,571) (2,458) 1,012 Depreciation and amortization 135 9,511 872 6 10,524 ------------- ------------ ------------ ------------ ------------- EBITDA (c) $ 19,254 $ 12,384 $ 1,406 $ 73 $ 33,117 ------------- ------------ ------------ ------------ ------------- Goodwill $ - $ 50,246 $ 3,893 $ - $ 54,139 Total assets $ 94,610 $ 135,335 $ 51,297 $ 3,709 $ 284,951 Capital expenditures $ 1,312 $ 4,888 $ 174 $ 3 $ 6,377 ---------------------------------------------------------------------------------------------------------------------------- Year ended April 30, 2007 (a): Revenues $ 102,848 $ 86,121 $ 14,384 $ 1,486 $ 204,839 Income from continuing operations 43,190 154 2,009 1,344 46,697 Provision (benefit) for income taxes from continuing operations 22,688 138 1,226 (81) 23,971 Interest expense (income), net (b) - 2,202 (716) (784) 702 Depreciation and amortization 201 6,160 953 5 7,319 ------------- ------------ ------------ ------------ ------------- EBITDA (c) $ 66,079 $ 8,654 $ 3,472 $ 484 $ 78,689 ------------- ------------ ------------ ------------ ------------- Goodwill $ - $ 50,441 $ 3,893 $ - $ 54,334 Total assets $ 88,756 $ 142,563 $ 39,214 $ 22,126 $ 292,659 Capital expenditures $ 2,871 $ 1,779 $ - $ 17 $ 4,667 ---------------------------------------------------------------------------------------------------------------------------- Year ended April 30, 2006 (a): Revenues $ 59,169 $ 75,332 $ 13,131 $ 664 $ 148,296 Income from continuing operations 18,856 2,289 1,113 236 22,494 Provision (benefit) for income taxes from continuing operations 8,412 1,388 692 (259) 10,233 Interest expense (income), net (b) - 452 (108) - 344 Depreciation and amortization 235 4,552 749 32 5,568 ------------- ------------ ------------ ------------ ------------- EBITDA (c) $ 27,503 $ 8,681 $ 2,446 $ 9 $ 38,639 ------------- ------------ ------------ ------------ ------------- Goodwill $ - $ 1,298 $ 3,893 $ - $ 5,191 Total assets $ 80,456 $ 44,359 $ 32,631 $ 31,595 $ 189,041 Capital expenditures $ 252 $ 3,500 $ 140 $ 4 $ 3,896 (a) Segment information reported above does not include net income (loss) from discontinued operations of ($57,000) in 2008, ($1,591,000) in 2007 and $3,556,000 in 2006.
(20) SELECTED QUARTERLY FINANCIAL DATA (Unaudited): ---------------------------------------------- (In thousands of dollars, except per share amounts) Quarter Ended --------------------------------------------------------------- Year ended April 30, 2008: July 31, October 31, January 31, April 30, 2007 2007 2008 2008 -------------- --------------- -------------- -------------- Revenues $ 51,359 $ 42,090 $ 43,435 $ 35,177 Gross profit 15,057 9,829 10,529 4,893 Income from continuing operations 6,320 3,467 3,446 529 Loss from operations of discontinued business, net of taxes (57) - - - -------------- --------------- -------------- -------------- Net income $ 6,263 $ 3,467 $ 3,446 $ 529 ============== =============== ============== ============== Earnings per share - Basic and Diluted: (a) Continuing operations $ .95 $ .55 $ .57 $ .09 Discontinued operations (.01) - - - -------------- --------------- -------------- -------------- Total $ .94 $ .55 $ .57 $ .09 ============== =============== ============== ============== Year ended April 30, 2007: July 31, October 31, January 31, April 30, 2006 2006 2007 2007 -------------- --------------- -------------- -------------- Revenues $ 58,269 $ 56,055 $ 42,189 $ 48,326 Gross Profit 28,313 29,150 14,948 14,636 Income from continuing operations 15,804 16,062 6,930 7,901 -------------- --------------- -------------- -------------- Income(loss) from operations of discontinued business, net of taxes - - - (1,591) -------------- --------------- -------------- -------------- Net income $ 15,804 $ 16,062 $ 6,930 $ 6,310 ============== =============== ============== ============== Earnings per share - Basic and Diluted: (a) Continuing operations $ 2.38 $ 2.42 $ 1.04 $ 1.19 Discontinued operations - - - (0.24) -------------- --------------- -------------- -------------- Total $ 2.38 $ 2.42 $ 1.04 $ 0.95 ============== =============== ============== ============== (a) The sum of the quarters does not equal the full year earnings per share due to the change in outstanding shares throughout the year in 2008 and due to rounding in 2007.
/s/ Peter M. Pizza /s/ Albert V. Russo ------------------------- -------------------------- Peter M. Pizza Albert V. Russo Vice President and Chief Financial Director Officer Principal Financial Dated: July 14, 2008 Officer and Principal Accounting Officer* Dated: July 14, 2008 /s/ Edward B. Cloues II /s/ Samuel N. Seidman ------------------------ -------------------------- Edward B. Cloues II Samuel N. Seidman Director Director Dated: July 14, 2008 Dated: July 14, 2008 /s/ Lonnie A. Coombs /s/ James Wall ------------------------ -------------------------- Lonnie A. Coombs James Wall Director Director* Dated: July 14, 2008 Dated: July 14, 2008 /s/ Nicholas G. Karabots /s/ Jonathan B, Weller ------------------------ -------------------------- Nicholas G. Karabots Jonathan B, Weller Director Director Dated: July 14, 2008 Dated: July 14, 2008 /s/ Michael P. Duloc -------------------------- Michael P. Duloc President, Kable Media Services, Inc.* Dated: July 14, 2008 ----------------- *The Registrant is a holding company that does substantially all of its business through two indirect wholly-owned subsidiaries (and their subsidiaries).
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS ----------------------------------------------- (Thousands) Additions -------------------------------- Charges Charged Balance at (Credits) to (Credited) to Beginning Costs and Other Balance at End Description of Period Expenses Accounts Deductions of Period ----------- --------------- --------------- ---------------- -------------- -------------- FOR THE YEAR ENDED APRIL 30, 2008: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 48 $ 64 $ - $ - $ 112 ---------------- --------------- ---------------- -------------- -------------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet) $ 53,606 $ 3,521 $ - $ 542 $ 56,585 --------------- --------------- ---------------- -------------- -------------- FOR THE YEAR ENDED APRIL 30, 2007: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 96 $ - $ - $ 48 $ 48 --------------- --------------- ---------------- -------------- -------------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet) $ 55,606 $ (1,447) $ - $ 553 $ 53,606 --------------- --------------- ---------------- -------------- -------------- FOR THE YEAR ENDED APRIL 30, 2006: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 96 $ - $ - $ - $ 96 --------------- --------------- ---------------- -------------- -------------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet) $ 59,165 $ (3,483) $ - $ 76 $ 55,606 --------------- --------------- ---------------- -------------- -------------- Note: Charges (credits) recorded in magazine circulation operations include a reserve for the estimate of magazine returns from wholesalers, which are substantially offset by offsetting credits related to the return of these magazines to publishers.
In the last three fiscal years, land sales in Rio Rancho have been as follows: Acres Revenues Sold Revenues Per Acre ------------- ----------------- ------------------ 2007: Developed 194 $ 55,135,000 $ 284,200 Undeveloped 857 40,690,000 47,500 ------------- ----------------- ------------------ Total 1,051 $ 95,825,000 $ 91,200 ------------- ----------------- ------------------ 2006: Developed 169 $ 38,296,000 $ 226,600 Undeveloped 746 19,514,000 26,200 ------------- ----------------- ------------------ Total 915 $ 57,810,000 $ 63,200 ------------- ----------------- ------------------ 2005: Developed 114 $ 22,177,000 $ 194,500 Undeveloped 790 12,064,000 15,300 ------------- ----------------- ------------------ Total 904 $ 34,241,000 $ 37,900 ------------- ----------------- ------------------ Other Real Estate Properties The Company has various investment properties, principally consisting of vacant, undeveloped land in Rio Rancho not held for development or sale in the normal course of business and a 29,000 square foot commercial rental property it owns in Rio Rancho that is presently leased.
The acquisition, ownership and development of real estate is subject to many risks that may adversely affect the Company's results of operations, including the risks that: - the Company may not be able to acquire a desired property because of competition from other real estate investors with greater capital than the Company has; - the Company may not be able to obtain financing on acceptable terms, or at all; - an adverse change in market conditions during the interval between acquisition and sale of a property may result in a lower than originally anticipated profit; - the Company may underestimate the cost of development required to bring an acquired property up to standards established for the market position intended for that property; - acquired properties may be located in new markets where the Company may face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area and unfamiliarity with local governmental and permitting procedures; and - the Company may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into its existing operations, and this could have an adverse effect on its results of operations.
The effect of an increase or decrease in the Company's estimated rate of returns of 1% during any period would be dependent upon the mix of magazines involved and the related selling prices and commission rates, but would generally result in a change in that period's net commission revenues of approximately $125,000; (ii) management determines the allowance for doubtful accounts by attempting to identify troubled accounts by analyzing the credit risk of specific customers and by using historical experience applied to the aging of accounts and, where appropriate within the real estate business, by reviewing any collateral which may secure a receivable; (iii) real estate development costs are incurred throughout the life of a project, and the costs of initial sales from a project frequently must include a portion of costs that have been budgeted based on engineering estimates or other studies, but not yet incurred; (iv) percentage-of-completion revenue recognition for certain development contracts is based on the percentage of total costs incurred to date in proportion to total estimated costs to complete the contract.
/s/ McGladrey & Pullen, LLP Davenport, Iowa July 16, 2007 AMREP CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS APRIL 30, 2007 AND 2006 (Dollar amounts in thousands) ASSETS 2007 2006 ------ ----------------------- ----------------------- CASH AND CASH EQUIVALENTS $ 42,102 $ 46,882 RECEIVABLES, net: Real estate operations 25,117 14,592 Media services operations 47,825 37,140 ----------------------- ----------------------- 72,942 51,732 REAL ESTATE INVENTORY 46,584 47,533 INVESTMENT ASSETS, net 12,165 11,586 PROPERTY, PLANT AND EQUIPMENT, net 30,518 10,879 INTANGIBLE AND OTHER ASSETS, net 34,014 15,238 GOODWILL 54,334 5,191 ----------------------- ----------------------- TOTAL ASSETS $ 292,659 $ 189,041 ======================= ======================= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ LIABILITIES: ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 83,557 $ 39,382 DEFERRED REVENUE 4,352 7,741 NOTES PAYABLE: Amounts due within one year 5,297 1,673 Amounts subsequently due 27,002 4,343 ----------------------- ----------------------- 32,299 6,016 TAXES PAYABLE 55 4,548 DEFERRED INCOME TAXES 11,149 9,150 ACCRUED PENSION COST 1,243 3,234 ----------------------- ----------------------- TOTAL LIABILITIES 132,655 70,071 ----------------------- ----------------------- SHAREHOLDERS' EQUITY: Common stock, $.10 par value; shares authorized - 20,000,000; shares issued - 7,419,704 at April 30, 2007 and 7,417,204 at April 30, 2006 742 742 Capital contributed in excess of par value 46,085 45,771 Retained earnings 121,333 81,875 Accumulated other comprehensive loss, net (2,862) (4,072) Treasury stock, 766,092 shares at April 30, 2007 and 773,592 shares at April 30, 2006, at cost (5,294) (5,346) ----------------------- ----------------------- TOTAL SHAREHOLDERS' EQUITY 160,004 118,970 ----------------------- ----------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 292,659 $ 189,041 ======================= ======================= The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.
AMREP CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share amounts) Year Ended April 30, ------------------------------------------------------------------------- 2007 2006 2005 --------------------- --------------------- -------------------- REVENUES: Real estate land sales $ 95,825 $ 57,810 $ 36,154 Media services operations 100,505 88,463 96,913 Interest and other 8,509 2,023 1,439 --------------------- --------------------- -------------------- 204,839 148,296 134,506 --------------------- --------------------- -------------------- COSTS AND EXPENSES: Real estate land sales 31,154 26,732 16,105 Operating expenses: Media services operations 85,262 73,956 79,324 Real estate commissions and selling 1,404 1,427 1,863 Other 1,376 1,114 1,453 General and administrative: Media services operations 9,235 7,686 8,507 Real estate operations and corporate 5,038 4,310 3,680 Interest expense, net of capitalized amounts 702 344 660 --------------------- --------------------- -------------------- 134,171 115,569 111,592 --------------------- --------------------- -------------------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 70,668 32,727 22,914 PROVISION FOR INCOME TAXES FROM CONTINUING OPERATIONS 23,971 10,233 7,326 --------------------- --------------------- -------------------- INCOME FROM CONTINUING OPERATIONS 46,697 22,494 15,588 INCOME (LOSS) FROM OPERATIONS OF DISCONTINUED BUSINESS (NET OF INCOME TAXES) (1,591) 3,556 (63) --------------------- --------------------- -------------------- NET INCOME $ 45,106 $ 26,050 $ 15,525 ===================== ===================== ==================== EARNINGS PER SHARE FROM CONTINUING OPERATIONS $ 7.02 $ 3.39 $ 2.36 EARNINGS (LOSS) PER SHARE FROM DISCONTINUED OPERATIONS (0.24) .54 (0.01) --------------------- --------------------- -------------------- EARNINGS PER SHARE - BASIC AND DILUTED $ 6.78 $ 3.93 $ 2.35 ===================== ===================== ==================== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 6,650 6,633 6,616 ===================== ===================== ==================== The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.
AMREP CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Amounts in thousands) Capital Accumulated Treasury Common Stock Contributed in Other Stock, ------------------- Excess of Retained Comprehensive at Shares Amount Par Value Earnings Loss Cost Total ------- -------- --------------- --------- ------------- ---------- ----------- BALANCE, April 30, 2004 7,409 $ 741 $ 45,133 $ 69,815 $ (4,614) $ (5,553) $ 105,522 Net income - - - 15,525 - - 15,525 Other comprehensive (loss) - - - - (1,362) - (1,362) ----------- ------------------- Total comprehensive income 14,163 ----------- Cash dividends, $0.40 per share - - - (2,645) - - (2,645) Issuance of stock under Directors' Plan - - 227 - - 103 330 Exercise of stock options 6 - 35 - - - 35 ------- -------- --------------- --------- ------------- ---------- ----------- BALANCE, April 30, 2005 7,415 741 45,395 82,695 (5,976) (5,450) 117,405 Net income - - - 26,050 - - 26,050 Other comprehensive income - - - - 1,904 - 1,904 ----------- Total comprehensive income 27,954 ----------- Cash dividends, $4.05 per share - - - (26,870) - - (26,870) Issuance of stock under Directors' Plan - 1 336 - - 104 441 Exercise of stock options 2 - 40 - - - 40 ------- -------- --------------- --------- ------------- ---------- ----------- BALANCE, April 30, 2006 7,417 742 45,771 81,875 (4,072) (5,346) 118,970 Net income - - - 45,106 - - 45,106 Other comprehensive income - - - - 1,210 - 1,210 ----------- Total comprehensive income 46,316 ----------- Cash dividends, $0.85 per share - - - (5,648) - - (5,648) Issuance of stock under Directors' Plan - - 287 - - 52 339 Exercise of stock options 3 - 27 - - - 27 ------- -------- --------------- --------- ------------- ---------- ----------- BALANCE, April 30, 2007 7,420 $ 742 $ 46,085 $121,333 $ (2,862) $ (5,294) $ 160,004 ======= ======== =============== ========= ============= ========== =========== The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.