x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
FOR
THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2008,
OR
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
FOR
THE TRANSITION PERIOD FROM _______________ TO
_________________
|
MARYLAND
(State
or other jurisdiction of incorporation or organization)
|
52-2058165
(I.R.S.
Employer Identification No.)
|
Page
Number
|
||
PART
I
|
||
Item
1.
|
||
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
8
|
||
Item
2.
|
23
|
|
Item
4T.
|
34
|
|
PART
II
|
||
Item
1.
|
35
|
|
Item
1A.
|
35
|
|
Item
2
|
35
|
|
Item
3.
|
35
|
|
Item
4.
|
35
|
|
Item
5.
|
35
|
|
Item
6.
|
35
|
|
36
|
AMERICAN COMMUNITY PROPERTIES TRUST
|
||||||||
CONSOLIDATED
STATEMENTS OF INCOME
|
||||||||
(In
thousands, except per share amounts)
|
||||||||
(Unaudited)
|
||||||||
2008
|
2007
|
|||||||
Revenues
|
||||||||
Rental
property revenues
|
$
|
46,673
|
$
|
45,249
|
||||
Community
development-land sales
|
6,457
|
8,032
|
||||||
Homebuilding-home
sales
|
3,476
|
6,113
|
||||||
Management
and other fees, substantially all from related entities
|
568
|
756
|
||||||
Reimbursement
of expenses related to managed entities
|
1,106
|
1,307
|
||||||
Total
revenues
|
58,280
|
61,457
|
||||||
Expenses
|
||||||||
Rental
property operating expenses
|
22,291
|
22,901
|
||||||
Cost
of land sales
|
5,218
|
5,930
|
||||||
Cost
of home sales
|
2,694
|
4,399
|
||||||
General,
administrative, selling and marketing
|
8,969
|
8,600
|
||||||
Depreciation
and amortization
|
7,511
|
7,009
|
||||||
Expenses
reimbursed from managed entities
|
1,106
|
1,307
|
||||||
Total
expenses
|
47,789
|
50,146
|
||||||
Operating
income
|
10,491
|
11,311
|
||||||
Other
income (expense)
|
||||||||
Interest
and other income
|
497
|
1,178
|
||||||
Equity
in earnings from unconsolidated entities
|
489
|
2,020
|
||||||
Interest
expense
|
(12,780
|
)
|
(14,037
|
)
|
||||
Minority
interest in consolidated entities
|
(1,691
|
)
|
(1,750
|
)
|
||||
Loss
before provision for income taxes
|
(2,994
|
)
|
(1,278
|
)
|
||||
Benefit
for income taxes
|
(993
|
)
|
(19
|
)
|
||||
Net
loss
|
$
|
(2,001
|
)
|
$
|
(1,259
|
)
|
||
Loss
per share
|
||||||||
Basic
and Diluted
|
$
|
(0.38
|
)
|
$
|
(0.24
|
)
|
||
Weighted
average shares outstanding
|
||||||||
Basic
and Diluted
|
5,215
|
5,205
|
||||||
Cash
dividends per share
|
$
|
-
|
$
|
0.30
|
||||
The
accompanying notes are an integral part of these consolidated
statements.
|
||||||||
AMERICAN COMMUNITY PROPERTIES TRUST
|
||||||||
FOR
THE THREE MONTHS ENDED SEPTEMBER 30,
|
||||||||
(In
thousands, except per share amounts)
|
||||||||
(Unaudited)
|
||||||||
2008
|
2007
|
|||||||
Revenues
|
||||||||
Rental
property revenues
|
$
|
15,736
|
$
|
15,417
|
||||
Community
development-land sales
|
460
|
2,063
|
||||||
Homebuilding-home
sales
|
494
|
899
|
||||||
Management
and other fees, substantially all from related entities
|
188
|
250
|
||||||
Reimbursement
of expenses related to managed entities
|
344
|
414
|
||||||
Total
revenues
|
17,222
|
19,043
|
||||||
Expenses
|
||||||||
Rental
property operating expenses
|
7,374
|
7,787
|
||||||
Cost
of land sales
|
493
|
1,574
|
||||||
Cost
of home sales
|
394
|
583
|
||||||
General,
administrative, selling and marketing
|
2,920
|
3,232
|
||||||
Depreciation
and amortization
|
2,469
|
2,428
|
||||||
Expenses
reimbursed from managed entities
|
344
|
414
|
||||||
Total
expenses
|
13,994
|
16,018
|
||||||
Operating
income
|
3,228
|
3,025
|
||||||
Other
income (expense)
|
||||||||
Interest
and other income
|
135
|
288
|
||||||
Equity
in earnings from unconsolidated entities
|
158
|
175
|
||||||
Interest
expense
|
(4,224
|
)
|
(4,700
|
)
|
||||
Minority
interest in consolidated entities
|
(370
|
)
|
(193
|
)
|
||||
Loss
before benefit for income taxes
|
(1,073
|
)
|
(1,405
|
)
|
||||
Benefit
for income taxes
|
(443
|
)
|
(307
|
)
|
||||
Net
loss
|
$
|
(630
|
)
|
$
|
(1,098
|
)
|
||
Loss
per share
|
||||||||
Basic
and Diluted
|
$
|
(0.12
|
)
|
$
|
(0.21
|
)
|
||
Weighted
average shares outstanding
|
||||||||
Basic
and Diluted
|
5,222
|
5,207
|
||||||
Cash
dividends per share
|
$
|
-
|
$
|
0.10
|
||||
The
accompanying notes are an integral part of these consolidated
statements.
|
||||||||
AMERICAN COMMUNITY PROPERTIES
TRUST
|
||||||||
(In
thousands, except share and per share amounts)
|
||||||||
As
of September 30, 2008
(Unaudited)
|
As
of December 31, 2007
(Audited)
|
|||||||
ASSETS
|
||||||||
ASSETS:
|
||||||||
Investments
in real estate:
|
||||||||
Operating
real estate, net of accumulated depreciation
|
$
|
159,631
|
$
|
164,352
|
||||
of
$157,494 and $150,292, respectively
|
||||||||
Land
and development costs
|
99,652
|
84,911
|
||||||
Condominiums
under construction
|
1,917
|
4,460
|
||||||
Rental
projects under construction or development
|
3,719
|
853
|
||||||
Investments
in real estate, net
|
264,919
|
254,576
|
||||||
Cash
and cash equivalents
|
19,303
|
24,912
|
||||||
Restricted
cash and escrow deposits
|
20,414
|
20,223
|
||||||
Investments
in unconsolidated real estate entities
|
6,476
|
6,528
|
||||||
Receivable
from bond proceeds
|
2,162
|
5,404
|
||||||
Net
accounts receivable
|
1,959
|
2,676
|
||||||
Deferred
tax assets
|
34,778
|
34,075
|
||||||
Property
and equipment, net of accumulated depreciation
|
967
|
1,045
|
||||||
Deferred
charges and other assets, net of amortization of
|
||||||||
$3,389
and $2,764 respectively
|
10,840
|
11,285
|
||||||
Total
Assets
|
$
|
361,818
|
$
|
360,724
|
||||
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
||||||||
LIABILITIES:
|
||||||||
Non-recourse
debt
|
$
|
277,118
|
$
|
279,981
|
||||
Recourse
debt
|
33,814
|
25,589
|
||||||
Accounts
payable and accrued liabilities
|
22,675
|
24,874
|
||||||
Deferred
income
|
3,017
|
3,214
|
||||||
Accrued
current income tax liability
|
14,581
|
14,620
|
||||||
Total
Liabilities
|
351,205
|
348,278
|
||||||
SHAREHOLDERS'
EQUITY:
|
||||||||
Common
shares, $.01 par value, 10,000,000 shares
authorized,
5,229,954 shares issued and outstanding
as
of September 30, 2008 and December 31, 2007
|
52
|
52
|
||||||
Treasury
stock, 67,709 shares at cost
|
(376
|
)
|
(376
|
)
|
||||
Additional
paid-in capital
|
17,545
|
17,377
|
||||||
Retained
deficit
|
(6,608
|
)
|
(4,607
|
)
|
||||
Total
Shareholders' Equity
|
10,613
|
12,446
|
||||||
Total
Liabilities and Shareholders' Equity
|
$
|
361,818
|
$
|
360,724
|
||||
The
accompanying notes are an integral part of these consolidated balance
sheets.
|
||||||||
AMERICAN COMMUNITY PROPERTIES
TRUST
|
||||||||||||||||||||||||
(In
thousands, except share amounts)
|
||||||||||||||||||||||||
Common
Shares
|
Additional
|
|||||||||||||||||||||||
Par
|
Treasury
|
Paid-in
|
Retained
|
|||||||||||||||||||||
Number
|
Value
|
Stock
|
Capital
|
Deficit
|
Total
|
|||||||||||||||||||
Balance
December 31, 2007 (Audited)
|
5,229,954
|
$
|
52
|
$
|
(376
|
)
|
$
|
17,377
|
$
|
(4,607
|
)
|
$
|
12,446
|
|||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
(2,001
|
)
|
(2,001
|
)
|
||||||||||||||||
Amortization
of Trustee Restricted Shares
|
-
|
-
|
-
|
168
|
-
|
168
|
||||||||||||||||||
Balance
September 30, 2008 (Unaudited)
|
5,229,954
|
$
|
52
|
$
|
(376
|
)
|
$
|
17,545
|
$
|
(6,608
|
)
|
$
|
10,613
|
|||||||||||
The
accompanying notes are an integral part of this consolidated
statement.
|
AMERICAN COMMUNITY PROPERTIES
TRUST
|
||||||||
FOR
THE NINE MONTHS ENDED SEPTEMBER 30,
|
||||||||
(In
thousands)
|
||||||||
(Unaudited)
|
||||||||
2008
|
2007
|
|||||||
Cash
Flows from Operating Activities
|
||||||||
Net
loss
|
$
|
(2,001
|
)
|
$
|
(1,259
|
)
|
||
Adjustments
to reconcile net loss to net cash used in
|
||||||||
operating
activities:
|
||||||||
Depreciation
and amortization
|
7,511
|
7,009
|
||||||
Distribution
to minority interests in excess of basis
|
1,587
|
1,988
|
||||||
Benefit
for deferred income taxes
|
(703
|
)
|
(5,019
|
)
|
||||
Equity
in earnings-unconsolidated entities
|
(489
|
)
|
(2,020
|
)
|
||||
Distribution
of earnings from unconsolidated entities
|
490
|
521
|
||||||
Cost
of land sales
|
5,251
|
5,930
|
||||||
Cost
of home sales
|
2,694
|
4,399
|
||||||
Stock
based compensation expense
|
91
|
190
|
||||||
Amortization
of deferred loan costs
|
633
|
643
|
||||||
Changes
in notes and accounts receivable
|
717
|
1,806
|
||||||
Additions
to community development assets
|
(19,992
|
)
|
(23,180
|
)
|
||||
Right
of way easement
|
-
|
2,000
|
||||||
Homebuilding-construction
expenditures
|
(151
|
)
|
(547
|
)
|
||||
Deferred
income
|
(197
|
)
|
(479
|
)
|
||||
Changes
in accounts payable, accrued liabilities
|
(2,161
|
)
|
(1,050
|
)
|
||||
Net
cash used in operating activities
|
(6,720
|
)
|
(6,968
|
)
|
||||
Cash
Flows from Investing Activities
|
||||||||
Investment
in office building and apartment construction
|
(2,866
|
)
|
(452
|
)
|
||||
Change
in investments - unconsolidated entities
|
51
|
1,538
|
||||||
Change
in restricted cash
|
(191
|
)
|
(1,841
|
)
|
||||
Additions
to rental operating properties, net
|
(2,561
|
)
|
(6,298
|
)
|
||||
Other
assets
|
(339
|
)
|
(221
|
)
|
||||
Net
cash used in investing activities
|
(5,906
|
)
|
(7,274
|
)
|
||||
Cash
Flows from Financing Activities
|
||||||||
Cash
proceeds from debt financing
|
6,386
|
23,339
|
||||||
Payment
of debt
|
(2,888
|
)
|
(19,678
|
)
|
||||
County
Bonds proceeds, net of undisbursed funds
|
5,106
|
5,301
|
||||||
Payments
of distributions to minority interests
|
(1,587
|
)
|
(1,988
|
)
|
||||
Dividends
paid to shareholders
|
-
|
(1,548
|
)
|
|||||
Net
cash provided by financing activities
|
7,017
|
5,426
|
||||||
Net
Decrease in Cash and Cash Equivalents
|
(5,609
|
)
|
(8,816
|
)
|
||||
Cash
and Cash Equivalents, Beginning of Period
|
24,912
|
27,459
|
||||||
Cash
and Cash Equivalents, End of Period
|
$
|
19,303
|
$
|
18,643
|
||||
The
accompanying notes are an integral part of these consolidated
statements.
|
(1)
|
ORGANIZATION
|
(2)
|
BASIS
OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
|
Alturas
del Senorial Associates Limited Partnership
|
Land
Development Associates S.E.
|
American
Housing Management Company
|
LDA
Group, LLC
|
American
Housing Properties L.P.
|
Milford
Station I, LLC
|
Bannister
Associates Limited Partnership
|
Milford
Station II, LLC
|
Bayamon
Garden Associates Limited Partnership
|
Monserrate
Associates Limited Partnership
|
Carolina
Associates Limited Partnership S.E.
|
New
Forest Apartments, LLC
|
Coachman's
Apartments, LLC
|
Nottingham
South, LLC
|
Colinas
de San Juan Associates Limited Partnership
|
Owings
Chase, LLC
|
Crossland
Associates Limited Partnership
|
Palmer
Apartments Associates Limited Partnership
|
Escorial
Office Building I, Inc.
|
Prescott
Square, LLC
|
Essex
Apartments Associates Limited Partnership
|
St.
Charles Community, LLC
|
Fox
Chase Apartments, LLC
|
San
Anton Associates S.E.
|
Gleneagles
Apartments, LLC
|
Sheffield
Greens Apartments, LLC
|
Headen
House Associates Limited Partnership
|
Torres
del Escorial, Inc.
|
Huntington
Associates Limited Partnership
|
Turabo
Limited Dividend Partnership
|
Interstate
Commercial Properties, Inc.
|
Valle
del Sol Associates Limited Partnership
|
Interstate
General Properties Limited Partnership, S.E.
|
Village
Lake Apartments, LLC
|
Jardines
de Caparra Associates Limited Partnership
|
Wakefield
Terrace Associates Limited Partnership
|
Lancaster
Apartments Limited Partnership
|
Wakefield
Third Age Associates Limited
Partnership
|
·
|
Buildings
and improvements are depreciated over five to forty years using the
straight-line or double declining balance methods,
|
·
|
Furniture,
fixtures and equipment are depreciated over five to seven years using the
straight-line method,
|
·
|
Leasehold
improvements are capitalized and depreciated over the lesser of the life
of the lease or their estimated useful
life,
|
·
|
Maintenance
and other repair costs are charged to operations as
incurred.
|
September
30,
|
December
31,
|
|||||
2008
|
2007
|
|||||
(Unaudited)
|
(Audited)
|
|||||
Building
|
$
|
265,816
|
$
|
265,115
|
||
Building
improvements
|
10,606
|
10,414
|
||||
Equipment
|
15,191
|
13,603
|
||||
291,613
|
289,132
|
|||||
Less: Accumulated
depreciation
|
157,494
|
150,292
|
||||
134,119
|
138,840
|
|||||
Land
|
25,512
|
25,512
|
||||
Operating
properties, net
|
$
|
159,631
|
$
|
164,352
|
(3)
|
INVESTMENT
IN UNCONSOLIDATED REAL ESTATE
ENTITIES
|
Land
|
||||||||||||||||
Development
|
||||||||||||||||
Apartment
|
Commercial
|
Joint
|
||||||||||||||
Properties
|
Property
|
Venture
|
Total
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Summary
Financial Position:
|
||||||||||||||||
Total
Assets
|
||||||||||||||||
September
30, 2008
|
$
|
4,822
|
$
|
27,867
|
$
|
12,714
|
$
|
45,403
|
||||||||
December
31, 2007
|
4,980
|
27,379
|
12,397
|
44,756
|
||||||||||||
Total
Non-Recourse Debt
|
||||||||||||||||
September
30, 2008
|
3,136
|
22,960
|
4,998
|
31,094
|
||||||||||||
December
31, 2007
|
3,189
|
22,960
|
4,722
|
30,871
|
||||||||||||
Total
Other Liabilities
|
||||||||||||||||
September
30, 2008
|
967
|
490
|
783
|
2,240
|
||||||||||||
December
31, 2007
|
976
|
147
|
741
|
1,864
|
||||||||||||
Total
Equity
|
||||||||||||||||
September
30, 2008
|
719
|
4,417
|
6,933
|
12,069
|
||||||||||||
December
31, 2007
|
815
|
4,272
|
6,934
|
12,021
|
||||||||||||
Company's
Investment, net (1)
|
||||||||||||||||
September
30, 2008
|
-
|
4,649
|
1,828
|
6,477
|
||||||||||||
December
31, 2007
|
(1
|
)
|
4,701
|
1,828
|
6,528
|
|||||||||||
Summary
of Operations:
|
||||||||||||||||
Total
Revenue
|
||||||||||||||||
Nine
Months Ended September 30, 2008
|
620
|
2,653
|
-
|
3,273
|
||||||||||||
Nine
Months Ended September 30, 2007
|
604
|
2,730
|
5,560
|
8,894
|
||||||||||||
Three
Months Ended September 30, 2008
|
202
|
864
|
-
|
1,066
|
||||||||||||
Three
Months Ended September 30, 2007
|
203
|
909
|
1,951
|
3,063
|
||||||||||||
Net
Income (Loss)
|
||||||||||||||||
Nine
Months Ended September 30, 2008
|
(97
|
)
|
1,339
|
-
|
1,242
|
|||||||||||
Nine
Months Ended September 30, 2007
|
(155
|
)
|
1,407
|
2
|
1,254
|
|||||||||||
Three
Months Ended September 30, 2008
|
(30
|
)
|
430
|
-
|
400
|
|||||||||||
Three
Months Ended September 30, 2007
|
(58
|
)
|
470
|
-
|
412
|
|||||||||||
Company's
recognition of equity in earnings
|
||||||||||||||||
Nine
Months Ended September 30, 2008
|
-
|
490
|
-
|
490
|
||||||||||||
Nine
Months Ended September 30, 2007 (2)
|
(1
|
)
|
521
|
-
|
520
|
|||||||||||
Three
Months Ended September 30, 2008
|
-
|
159
|
-
|
159
|
||||||||||||
Three
Months Ended September 30, 2007
|
-
|
175
|
-
|
175
|
||||||||||||
Land
|
||||||||||||||||
Development
|
||||||||||||||||
Apartment
|
Commercial
|
Joint
|
||||||||||||||
Properties
|
Property
|
Venture
|
Total
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Summary
of Cash Flows:
|
||||||||||||||||
Cash
flows provided by (used in) operating activities
|
||||||||||||||||
Nine
Months Ended September 30, 2008
|
$
|
61
|
$
|
1,627
|
$
|
42
|
$
|
1,730
|
||||||||
Nine
Months Ended September 30, 2007
|
38
|
1,710
|
5,508
|
7,256
|
||||||||||||
Three
Months Ended September 30, 2008
|
11
|
650
|
40
|
701
|
||||||||||||
Three
Months Ended September 30, 2007
|
(12
|
)
|
865
|
2,359
|
3,212
|
|||||||||||
Company's
share of cash flows from operating activities
|
||||||||||||||||
Nine
Months Ended September 30, 2008
|
1
|
736
|
21
|
758
|
||||||||||||
Nine
Months Ended September 30, 2007
|
-
|
774
|
2,754
|
3,528
|
||||||||||||
Three
Months Ended September 30, 2008
|
-
|
294
|
20
|
314
|
||||||||||||
Three
Months Ended September 30, 2007
|
-
|
392
|
1,179
|
1,571
|
||||||||||||
Operating
cash distributions
|
||||||||||||||||
Nine
Months Ended September 30, 2008
|
-
|
1,194
|
-
|
1,194
|
||||||||||||
Nine
Months Ended September 30, 2007
|
-
|
1,236
|
-
|
1,236
|
||||||||||||
Three
Months Ended September 30, 2008
|
-
|
421
|
-
|
421
|
||||||||||||
Three
Months Ended September 30, 2007
|
-
|
442
|
-
|
442
|
||||||||||||
Company's
share of operating cash distributions
|
||||||||||||||||
Nine
Months Ended September 30, 2008
|
-
|
541
|
-
|
541
|
||||||||||||
Nine
Months Ended September 30, 2007
|
-
|
560
|
-
|
560
|
||||||||||||
Three
Months Ended September 30, 2008
|
-
|
191
|
-
|
191
|
||||||||||||
Three
Months Ended September 30, 2007
|
-
|
200
|
-
|
200
|
||||||||||||
(4)
|
DEBT
|
Maturity
|
Interest
|
Outstanding
as of
|
|||||||||||
Dates
|
Rates
|
September
30,
|
December
31,
|
||||||||||
From/To
|
From/To
|
2008
|
2007
|
||||||||||
(Unaudited)
|
(Audited)
|
||||||||||||
Recourse
Debt
|
|||||||||||||
Community
Development (a), (b), (c), (d)
|
05-01-09/03-01-23
|
4%/8%
|
$
|
33,620
|
$
|
25,490
|
|||||||
General
obligations (e)
|
06-01-09/03-03-12
|
Non-interest
|
|||||||||||
bearing/8.55%
|
194
|
99
|
|||||||||||
Total
Recourse Debt
|
33,814
|
25,589
|
|||||||||||
Non-Recourse
Debt
|
|||||||||||||
Investment
Properties (f)(g)
|
04-30-09/08-01-47
|
4.95%/10%
|
277,118
|
279,981
|
|||||||||
Total
debt
|
$
|
310,932
|
$
|
305,570
|
a)
|
As
of September 30, 2008, $25,629,000 of the community development recourse
debt relates to the general obligation bonds issued by the Charles County
government as described in detail under the heading "Financial
Commitments" in Note 5.
|
b)
|
On
April 14, 2006, the Company closed a three year $14,000,000 revolving
acquisition and development line of credit loan (“the Revolver”) secured
by a first lien deed of trust on property located in St. Charles,
MD. The maximum amount of the loan at any one time is
$14,000,000, bears interest at Prime plus 0.75% (5.75% at September 30,
2008) and matures on May 1, 2009. The facility includes various
sub-limits on a revolving basis for amounts to finance apartment project
acquisitions and land development in St. Charles. The terms
require certain financial covenants to be calculated annually as of
December 31, including a tangible net worth to senior debt ratio for ALD
and a minimum net worth test for ACPT. As of September 30, 2008
$3,026,000 was outstanding on the Revolver.
|
c) | LDA has a $10,000,000 revolving line of credit facility that bears interest at a fluctuating rate equivalent to the LIBOR Rate plus 225 basis points (5.038% at September 30, 2008). The facility is to be used to fund the development of infrastructure in Parque Escorial and Parque El Comandante and matures on August 31, 2009. The outstanding balance of this facility on September 30, 2008, was $2,754,000. |
d) | On April 2, 2008, the Company secured a two-year, $3,600,000 construction loan for the construction of a commercial restaurant/office building within the O'Donnell Lake Restaurant Park. The facility is secured by the land along with any improvements constructed and bears interest at Wall Street Journal published Prime Rate (5.0% at September 30, 2008). At the end of the two-year construction period, the Company may convert the loan to a 5-year permanent loan, amortized over a 30 year period at a fixed interest rate to be determined. As of September 30, 2008, $2,211,000 was outstanding under this facility leaving $1,389,000 available to fund completion of the building. |
e) | The general recourse debt outstanding as of September 30, 2008, is made up of various capital leases outstanding within our U.S. and Puerto Rico operations, as well as installment loans for vehicles and other miscellaneous equipment. |
f) | The non-recourse debt related to the investment properties is collateralized by the multifamily rental properties and the office building in Parque Escorial. As of September 30, 2008, approximately $73,913,000 of this debt is secured by the Federal Housing Administration ("FHA") or the Maryland Housing Fund. |
g) | On May 12, 2008, IGP agreed to provide a fixed charge and debt service guarantee related to the Escorial Office Building I, Inc ("EOB") mortgage. The fixed charge and debt service guarantee requires IGP to contribute capital in cash in such amounts required to cause EOB to comply with the related financial convenants. The guarantee will remain in full force until EOB has complied with the financial covenants for four consecutive quarters. |
(5)
|
COMMITMENTS
AND CONTINGENT LIABILITIES
|
(6)
|
RELATED
PARTY TRANSACTIONS
|
CONSOLIDATED
STATEMENT OF INCOME:
|
Nine
Months Ended
|
Three
Months Ended
|
||||||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||
Management
and Other Fees
|
||||||||||||||||||||
Unconsolidated
subsidiaries with third party partners
|
(A)
|
$
|
32
|
$
|
32
|
$
|
11
|
$
|
11
|
|||||||||||
Affiliates
of J. Michael Wilson, CEO and Chairman
|
-
|
43
|
-
|
-
|
||||||||||||||||
$
|
32
|
$
|
75
|
$
|
11
|
$
|
11
|
|||||||||||||
Rental
Property Revenues
|
(B)
|
$
|
36
|
$
|
43
|
$
|
6
|
$
|
15
|
|||||||||||
Interest
and Other Income
|
||||||||||||||||||||
Unconsolidated
real estate entities with third party partners
|
$
|
6
|
$
|
6
|
$
|
2
|
$
|
2
|
||||||||||||
General
and Administrative Expense
|
||||||||||||||||||||
Reserve
additions (reductions) and other write-offs-
|
||||||||||||||||||||
Unconsolidated
real estate entities with third party partners
|
(A)
|
$
|
(2
|
)
|
$
|
25
|
$
|
7
|
$
|
14
|
||||||||||
Reimbursement
to IBC for ACPT's share of J. Michael
Wilson's
compensation
|
311
|
293
|
104
|
98
|
||||||||||||||||
Reimbursement
of administrative costs-
|
||||||||||||||||||||
Affiliates
of J. Michael Wilson, CEO and Chairman
|
(14
|
)
|
(18
|
)
|
(4
|
)
|
(5
|
)
|
||||||||||||
Reimbursement
of legal fees to attorney for J. Michael Wilson
|
(C1
|
)
|
188
|
140
|
||||||||||||||||
Consulting
Fees
|
||||||||||||||||||||
James
J. Wilson, IGC Chairman and Director
|
(C2
|
)
|
150
|
150
|
50
|
50
|
||||||||||||||
Thomas
J. Shafer, Trustee
|
(C3
|
)
|
45
|
45
|
15
|
15
|
||||||||||||||
$
|
490
|
$
|
683
|
$
|
172
|
$
|
312
|
|||||||||||||
BALANCE
SHEET:
|
Balance
|
Balance
|
||||||||||||||||||
September
30,
|
December
31,
|
|||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||
Other
Assets
|
||||||||||||||||||||
Receivables
- All unsecured and due on demand
|
||||||||||||||||||||
Unconsolidated
Subsidiaries
|
$
|
5
|
$
|
-
|
||||||||||||||||
Affiliate
of J. Michael Wilson, CEO and Chairman
|
-
|
5
|
||||||||||||||||||
Total
|
$
|
5
|
$
|
5
|
||||||||||||||||
Other
Liabilities
|
||||||||||||||||||||
Payable
due to Affiliate of J. Michael Wilson, CEO and Chairman
|
$
|
13
|
$
|
-
|
1)
|
In
second quarter 2007, The Independent Trustees concluded that certain legal
fees and expenses incurred by J. Michael Wilson related to seeking a
strategic partner would be reimbursed by the Company. The
Independent Trustees authorized the Company to fund up to $225,000 of such
costs, $188,000 of which were incurred through the third quarter of
2007.
|
|
2)
|
Represents
fees paid to James J. Wilson pursuant to a consulting and retirement
agreement. At Mr. Wilson's request, payments are made to
Interstate Waste Technologies, Inc.
|
|
3) | Represents fees paid to Thomas J. Shafer, a trustee, pursuant to a consulting agreement. |
(7)
|
INCOME
TAXES
|
Unrecognized
tax benefit at beginning of period (December 31, 2007)
|
$
|
14,869
|
|
Change
attributable to tax positions taken during a prior period
|
252
|
||
Change
attributable to tax positions taken during the current
period
|
-
|
||
Decrease
attributable to settlements with taxing authorities
|
-
|
||
Decrease
attributable to lapse of statute of limitations
|
(26
|
)
|
|
Unrecognized
tax benefit at end of period (September 30, 2008)
|
$
|
15,095
|
(8)
|
SEGMENT
INFORMATION
|
United
|
Puerto
|
Inter-
|
||||||||
States
|
Rico
|
Segment
|
Total
|
|||||||
Nine
Months Ended September 30, 2008 (Unaudited):
|
($)
|
($)
|
($)
|
($)
|
||||||
Rental
property revenues
|
29,676
|
16,997
|
-
|
46,673
|
||||||
Rental
property operating expenses
|
13,736
|
8,571
|
(16
|
)
|
22,291
|
|||||
Land
sales revenue
|
6,457
|
-
|
-
|
6,457
|
||||||
Cost
of land sales
|
5,218
|
-
|
-
|
5,218
|
||||||
Home
sales revenue
|
-
|
3,476
|
-
|
3,476
|
||||||
Cost
of home sales
|
-
|
2,694
|
-
|
2,694
|
||||||
Management
and other fees
|
117
|
471
|
(20
|
)
|
568
|
|||||
General,
administrative, selling and marketing expense
|
7,045
|
1,928
|
(4
|
)
|
8,969
|
|||||
Depreciation
and amortization
|
4,684
|
2,827
|
-
|
7,511
|
||||||
Operating
income
|
5,567
|
4,924
|
-
|
10,491
|
||||||
Interest
income
|
300
|
29
|
(14
|
)
|
315
|
|||||
Equity
in earnings from unconsolidated entities
|
(1
|
)
|
490
|
-
|
489
|
|||||
Interest
expense
|
8,506
|
4,288
|
(14
|
)
|
12,780
|
|||||
Minority
interest in consolidated entities
|
456
|
1,235
|
-
|
1,691
|
||||||
(Loss)
income before benefit for income taxes
|
(3,081
|
)
|
87
|
-
|
(2,994
|
)
|
||||
Income
tax benefit
|
(931
|
)
|
(62
|
)
|
-
|
(993
|
)
|
|||
Net
(loss) income
|
(2,150
|
)
|
149
|
-
|
(2,001
|
)
|
||||
Gross
profit on land sales
|
1,239
|
-
|
-
|
1,239
|
||||||
Gross
profit on home sales
|
-
|
782
|
-
|
782
|
||||||
Total
assets
|
262,446
|
99,741
|
(369
|
)
|
361,818
|
|||||
Additions
to long lived assets
|
4,633
|
794
|
-
|
5,427
|
||||||
United
|
Puerto
|
Inter-
|
|||||||
States
|
Rico
|
Segment
|
Total
|
||||||
Nine
Months Ended September 30, 2007 (Unaudited):
|
($)
|
($)
|
($)
|
($)
|
|||||
Rental
property revenues
|
28,529
|
16,720
|
-
|
45,249
|
|||||
Rental
property operating expenses
|
14,376
|
8,543
|
(18
|
)
|
22,901
|
||||
Land
sales revenue
|
8,032
|
-
|
-
|
8,032
|
|||||
Cost
of land sales
|
5,930
|
-
|
-
|
5,930
|
|||||
Home
sales revenue
|
-
|
6,113
|
-
|
6,113
|
|||||
Cost
of home sales
|
-
|
4,399
|
-
|
4,399
|
|||||
Management
and other fees
|
299
|
479
|
(22
|
)
|
756
|
||||
General,
administrative, selling and marketing expense
|
6,355
|
2,249
|
(4
|
)
|
8,600
|
||||
Depreciation
and amortization
|
4,252
|
2,757
|
-
|
7,009
|
|||||
Operating
income
|
5,947
|
5,364
|
-
|
11,311
|
|||||
Interest
income
|
843
|
228
|
(80
|
)
|
991
|
||||
Equity
in earnings from unconsolidated entities
|
(1
|
)
|
2,021
|
-
|
2,020
|
||||
Interest
expense
|
9,436
|
4,681
|
(80
|
)
|
14,037
|
||||
Minority
interest in consolidated entities
|
332
|
1,418
|
-
|
1,750
|
|||||
(Loss)
income before (benefit) provision for income taxes
|
(2,975
|
)
|
1,697
|
-
|
(1,278
|
)
|
|||
Income
tax (benefit) provision
|
(829
|
)
|
810
|
-
|
(19
|
)
|
|||
Net
(loss) income
|
(2,146
|
)
|
887
|
-
|
(1,259
|
)
|
|||
Gross
profit on land sales
|
2,102
|
-
|
-
|
2,102
|
|||||
Gross
profit on home sales
|
-
|
1,714
|
-
|
1,714
|
|||||
Total
assets
|
260,772
|
101,056
|
(1,624
|
)
|
360,204
|
||||
Additions
to long lived assets
|
6,226
|
524
|
-
|
6,750
|
|||||
United
|
Puerto
|
Inter-
|
||||||||||||||
States
|
Rico
|
Segment
|
Total
|
|||||||||||||
Three
Months Ended September 30, 2008 (Unaudited):
|
($)
|
($)
|
($)
|
($)
|
||||||||||||
Rental
property revenues
|
9,982 | 5,754 | - | 15,736 | ||||||||||||
Rental
property operating expenses
|
4,512 | 2,867 | (5 | ) | 7,374 | |||||||||||
Land
sales revenue
|
460 | - | - | 460 | ||||||||||||
Cost
of land sales
|
493 | - | - | 493 | ||||||||||||
Home
sales revenue
|
- | 494 | - | 494 | ||||||||||||
Cost
of home sales
|
- | 394 | - | 394 | ||||||||||||
Management
and other fees
|
38 | 157 | (7 | ) | 188 | |||||||||||
General,
administrative, selling and marketing expense
|
2,266 | 655 | (1 | ) | 2,920 | |||||||||||
Depreciation
and amortization
|
1,525 | 944 | - | 2,469 | ||||||||||||
Operating
income
|
1,684 | 1,545 | (1 | ) | 3,228 | |||||||||||
Interest
income
|
71 | 12 | - | 83 | ||||||||||||
Equity
in earnings from unconsolidated entities
|
(1 | ) | 159 | - | 158 | |||||||||||
Interest
expense
|
2,822 | 1,402 | - | 4,224 | ||||||||||||
Minority
interest in consolidated entities
|
333 | 37 | - | 370 | ||||||||||||
(Loss)
income before (benefit) provision for income taxes
|
(1,399 | ) | 326 | - | (1,073 | ) | ||||||||||
Income
tax (benefit) provision
|
(512 | ) | 69 | - | (443 | ) | ||||||||||
Net
(loss) income
|
(887 | ) | 257 | - | (630 | ) | ||||||||||
Loss
on land sales
|
(33 | ) | - | - | (33 | ) | ||||||||||
Gross
profit on home sales
|
- | 100 | - | 100 | ||||||||||||
Total
assets
|
262,446 | 99,741 | (369 | ) | 361,818 | |||||||||||
Additions
to long lived assets
|
1,912 | 313 | - | 2,225 | ||||||||||||
United
|
Puerto
|
Inter-
|
||||||
States
|
Rico
|
Segment
|
Total
|
|||||
Three
Months Ended September 30, 2007 (Unaudited):
|
($)
|
($)
|
($)
|
($)
|
||||
Rental
property revenues
|
9,823
|
5,594
|
-
|
15,417
|
||||
Rental
property operating expenses
|
4,887
|
2,905
|
(5
|
)
|
7,787
|
|||
Land
sales revenue
|
2,063
|
-
|
-
|
2,063
|
||||
Cost
of land sales
|
1,574
|
-
|
-
|
1,574
|
||||
Home
sales revenue
|
-
|
899
|
-
|
899
|
||||
Cost
of home sales
|
-
|
583
|
-
|
583
|
||||
Management
and other fees
|
91
|
166
|
(7
|
)
|
250
|
|||
General,
administrative, selling and marketing expense
|
2,432
|
801
|
(1
|
)
|
3,232
|
|||
Depreciation
and amortization
|
1,507
|
921
|
-
|
2,428
|
||||
Operating
income
|
1,577
|
1,449
|
(1
|
)
|
3,025
|
|||
Interest
income
|
252
|
2
|
(25
|
)
|
229
|
|||
Equity
in earnings from unconsolidated entities
|
-
|
175
|
-
|
175
|
||||
Interest
expense
|
3,210
|
1,515
|
(25
|
)
|
4,700
|
|||
Minority
interest in consolidated entities
|
159
|
34
|
-
|
193
|
||||
(Loss)
income before (benefit) provision for income taxes
|
(1,539
|
)
|
134
|
-
|
(1,405
|
)
|
||
Income
tax (benefit) provision
|
(348
|
)
|
41
|
-
|
(307
|
)
|
||
Net
(loss) income
|
(1,191
|
)
|
93
|
-
|
(1,098
|
)
|
||
Gross
profit on land sales
|
489
|
-
|
-
|
489
|
||||
Gross
profit on home sales
|
-
|
316
|
-
|
316
|
||||
Total
assets
|
260,772
|
101,056
|
(1,624
|
)
|
360,204
|
|||
Additions
to long lived assets
|
1,707
|
102
|
-
|
1,809
|
||||
(9)
|
SUBSEQUENT
EVENTS
|
Nine
Months Ended September 30,
|
||||||
2008
|
2007
|
|||||
|
||||||
Operating
Activities
|
$
|
(6,720
|
)
|
$
|
(6,968
|
)
|
Investing
Activities
|
(5,906
|
)
|
(7,274
|
)
|
||
Financing
Activities
|
7,017
|
5,426
|
||||
Net Decrease in Cash
|
$
|
(5,609
|
)
|
$
|
(8,816
|
)
|
ITEM
4T.
|
PART
II
|
ITEM
1.
|
ITEM
1A.
|
ITEM
3.
|
ITEM
5.
|
ITEM
6.
|
(A)
|
Exhibits
|
|
|
31.1
|
Rule 13a-14(a)/15d-14(a)
Certification of Chief Executive Officer
|
31.2
|
Rule 13a-14(a)/15d-14(a)
Certification of Chief Financial Officer
|
32.1
|
Section 1350 Certification
of Chief Executive Officer
|
32.2
|
Section 1350 Certification of
Chief Financial Officer
|
AMERICAN
COMMUNITY PROPERTIES TRUST
|
||
(Registrant)
|
||
Dated: November
12, 2008
|
By:
|
/s/
J. Michael Wilson
|
J.
Michael Wilson
Chairman
|
||
Dated: November
12, 2008
|
By:
|
/s/
Stephen Griessel
|
Stephen
Griessel
Chief
Executive Officer
|
||
Dated: November
12, 2008
|
By:
|
/s/
Matthew M. Martin
|
Matthew
M. Martin
Chief
Financial Officer
|