Document

0001482512-18-000088.txt : 20180731 0001482512-18-000088.hdr.sgml : 20180731 20180731164224 ACCESSION NUMBER: 0001482512-18-000088 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20180727 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20180731 DATE AS OF CHANGE: 20180731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Hudson Pacific Properties, Inc. CENTRAL INDEX KEY: 0001482512 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 271430478 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-34789 FILM NUMBER: 18981662 BUSINESS ADDRESS: STREET 1: 11601 WILSHIRE BLVD. STREET 2: SUITE 1600 CITY: LOS ANGELES STATE: CA ZIP: 90025 BUSINESS PHONE: (310) 445-5700 MAIL ADDRESS: STREET 1: 11601 WILSHIRE BLVD. STREET 2: SUITE 1600 CITY: LOS ANGELES STATE: CA ZIP: 90025 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Hudson Pacific Properties, L.P. CENTRAL INDEX KEY: 0001496264 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 800579682 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-202799-01 FILM NUMBER: 18981661 BUSINESS ADDRESS: STREET 1: 11601 WILSHIRE BLVD. STREET 2: SUITE 1600 CITY: LOS ANGELES STATE: CA ZIP: 90025 BUSINESS PHONE: 310-445-5700 MAIL ADDRESS: STREET 1: 11601 WILSHIRE BLVD. STREET 2: SUITE 1600 CITY: LOS ANGELES STATE: CA ZIP: 90025 8-K 1 a8-kpopdisposal.htm 8-K Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________

FORM 8-K

_________________________________

CURRENT REPORT

Pursuant to Section 13 OR 15 (d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 27, 2018

_________________________________

Hudson Pacific Properties, Inc.

Hudson Pacific Properties, L.P.

(Exact name of registrant as specified in its charter)



Maryland (Hudson Pacific Properties, Inc.)		27-1430478 (Hudson Pacific Properties, Inc.)
Maryland (Hudson Pacific Properties, L.P.)		80-0579682 (Hudson Pacific Properties, L.P.)
(State or other jurisdiction		(IRS Employer
of incorporation)		Identification No.)



11601 Wilshire Blvd., Ninth Floor Los Angeles, California		90025
(Address of Principal Executive Offices)		(Zip Code)

(310) 445-5700

Registrant’s Telephone Number, Including Area Code

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

_________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

This Current Report on Form 8-K is filed by Hudson Pacific Properties, Inc. (the "Company”), a Maryland corporation, and Hudson Pacific Properties, L.P. (the “Operating Partnership”), a Maryland limited partnership of which the Company serves as the sole general partner.

Item 2.01 Completion of Acquisition of Disposition of Asset.

On July 27, 2018, the Company completed the sale of our Peninsula Office Park property (the "Property"), a 447,739-square-foot office property located in San Mateo, California, for a gross sale price of $210.0 million (before certain credits, prorations and closing costs). The Property was sold to Harvest Properties, Inc., with whom the Company has no other relationship.

Item 8.01 Other Events.

On July 30, 2018, the Company issued a press release announcing the sale of the Property in an all-cash transaction. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference. The press release is being furnished pursuant to Item 8.01 and shall not be deemed to be filed for the purposes of Section 18 of, or incorporated by reference into the filings of the Company under, the Securities Exchange Act of 1934, or as amended.

Item 9.01 Financial Statements and Exhibits.


(b)	Pro forma financial information

The following unaudited pro-forma consolidated financial information of the Company and Operating Partnership is included in Exhibit 99.2 hereof:


1.	Unaudited Pro Forma Financial Information;


2.	Unaudited Pro Forma Condensed Balance sheet as of March 31, 2018;


3.	Unaudited Pro Forma Consolidated Statement of Operations for the Three Months Ended March 31, 2018; and


4.	Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2017.


(d)	Exhibits



Exhibit No.		Description
99.1**		Press release dated July 30, 2018 regarding the Company’s disposition of Peninsula Office Park
99.2**		Pro Forma Financial Statements

_____________

** Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




		HUDSON PACIFIC PROPERTIES, INC.
Date: July 31, 2018	By:	/s/ MARK T. LAMMAS
		Mark T. Lammas
		Chief Operating Officer, Chief Financial Officer and Treasurer

EXHIBIT INDEX



Exhibit No.		Description
99.1**		Press release dated July 30, 2018 regarding the Company’s disposition of Peninsula Office Park
99.2**		Pro Forma Financial Statements

_____________

** Furnished herewith.

EX-99.1 2 a991dispositionofpeninsula.htm EXHIBIT 99.1 Exhibit

Hudson Pacific Properties Sells

San Mateo Office Campus for $210 Million

Los Angeles, July 30, 2018-Hudson Pacific Properties, Inc. (NYSE: HPP) today announced the sale of the remaining six buildings of Peninsula Office Park in San Mateo for $210 million before credits, prorations and closing costs. The all-cash transaction represents a 5.1% premium to the company’s GAAP basis and a 15.4% premium to the allocated purchase price.

“The sale of Peninsula Office Park’s remaining six buildings exemplifies our approach to recycling capital to further focus on strategic holdings in our core markets,” said Victor Coleman, Hudson Pacific’s Chairman and CEO. “We will continue to enhance our already high-caliber office portfolio by capitalizing on favorable market conditions, and we are always looking for creative ways to maximize value for our shareholders. We intend to re-deploy proceeds from this successful two-part sale to fund prudent, long-term growth, including the acquisition of higher-yielding opportunities.”

Buildings 1-5 and 7 of Peninsula Office Park total 447,739 square feet, and, as of the end of the first quarter of this year, were 83% occupied. Hudson Pacific sold the fully vacant 63,050-square-foot Building 6 in January of this year for a total of $22.5 million before prorations, credits and closing costs.

Net proceeds from the sale were used to repay amounts outstanding on the company’s revolving credit facility, with the remainder held for general corporate purposes.

Additional details about the sale of Peninsula Office Park, including its impact on full-year 2018 FFO guidance, will be provided in connection with the company’s second quarter earnings call on August 1, 2018.

About Hudson Pacific Properties

Hudson Pacific Properties is a vertically integrated real estate company focused on acquiring, repositioning, developing and operating high-quality office and state-of-the-art studio properties in select West Coast markets. Hudson Pacific invests across the risk-return spectrum, favoring opportunities where it can employ leasing, capital investment and management expertise to create additional value. Founded in 2006 as Hudson Capital, the company went public in 2010, electing to be taxed as a real estate investment trust. Through the years, Hudson Pacific has strategically assembled a portfolio in high-growth, high-barrier-to-entry submarkets throughout Northern and Southern California and the Pacific Northwest. The company is a leading provider of design-forward, next-generation workspaces for a variety of tenants, with a focus on Fortune 500 and leading growth companies, many in the technology, media and entertainment sectors. As a long-term owner, Hudson Pacific prioritizes tenant satisfaction and retention, providing highly customized build-outs and working proactively to accommodate tenants’ growth. Hudson Pacific trades as a component of the Russell 2000® and the Russell 3000® indices. For more information visit HudsonPacificProperties.com.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the company’s control, which may cause actual results to differ significantly from those expressed in any forward-looking statement. All forward-looking statements reflect the company’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, the company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods,

future events or other changes. For a further discussion of these and other factors that could cause the company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission, or SEC, on February 16, 2018, and other risks described in documents subsequently filed by the company from time to time with the SEC.

Investor/Media Contact

Hudson Pacific Properties

Laura Campbell

Senior Vice President, Investor Relations & Marketing

310.622.1702

lcampbell@hudsonppi.com

EX-99.2 3 a992proformafinancials.htm EXHIBIT 99.2 Exhibit

Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P.

Unaudited Pro Forma Financial Information

All references in these financial statements to “the Company” refer to Hudson Pacific Properties, Inc. together with its consolidated subsidiaries, including Hudson Pacific Properties, L.P. Unless otherwise indicated or unless the context requires otherwise, all references to “our Operating Partnership” or “the Operating Partnership” refer to Hudson Pacific Properties, L.P. together with its consolidated subsidiaries.

The following unaudited pro forma consolidated balance sheet of the Company and the Operating Partnership as of March 31, 2018 and unaudited pro forma consolidated statements of operations for the year ended December 31, 2017 and the three months ended March 31, 2018 have been prepared as if the disposition of Peninsula Office Park (the “Property”) had occurred on March 31, 2018 for the pro forma consolidated balance sheet, and as if the disposition of the Property had occurred on January 1, 2017 for both pro forma consolidated statements of operations. This asset disposal was a non-strategic property of the Company portfolio.

Our pro forma consolidated financial statements are presented for informational purposes only and should be read in conjunction with our forms 10-K and 10-Q filed with the Securities and Exchange Commission. The adjustments to our pro forma consolidated financial statements are based on available information and assumptions that we consider reasonable. Our pro forma consolidated financial statements do not purport to (1) represent our financial position that would have actually occurred had the disposition of the Property occurred on March 31, 2018, (2) represent the results of our operations that would have actually occurred had the disposition of the Property occurred on January 1, 2017 or (3) project our financial position or results of operations as of any future date or for any future period, as applicable.

Hudson Pacific Properties, Inc.

Unaudited Pro Forma Consolidated Balance Sheet

As of March 31, 2018



	Hudson Pacific Properties, Inc. (A)			Sale of the Property (B)			Notes	Pro Forma
ASSETS
Investment in real estate, at cost	$	6,499,393		$	(204,835	)		$	6,294,558
Accumulated depreciation and amortization	(574,814		)	13,045				(561,769		)
Investment in real estate, net	5,924,579			(191,790		)		5,732,789
Cash and cash equivalents	64,080			202,405			(C)	266,485
Restricted cash	10,900			—				10,900
Accounts receivable, net	5,945			(221		)		5,724
Straight-line rent receivables, net	119,436			(3,060		)		116,376
Deferred leasing costs and lease intangible assets, net	241,912			(5,326		)		236,586
Prepaid expenses and other assets, net	69,735			—				69,735
Assets associated with real estate held for sale	11,704			—				11,704
TOTAL ASSETS	$	6,448,291		$	2,008			$	6,450,299

LIABILITIES AND EQUITY
Notes payable, net	$	2,240,688		$	—			$	2,240,688
Accounts payable and accrued liabilities	146,588			(2,728		)		143,860
Lease intangible liabilities, net	45,651			(324		)		45,327
Security deposits and prepaid rent	65,692			(1,262		)		64,430
Liabilities associated with real estate held for sale	630			—				630
TOTAL LIABILITIES	2,499,249			(4,314		)		2,494,935
6.25% Series A cumulative redeemable preferred units of the operating partnership	10,177			—				10,177
EQUITY
Hudson Pacific Properties, Inc. stockholders’ equity:
Common stock, $0.01 par value, 490,000,000 authorized, 155,626,055 shares outstanding at March 31, 2018	1,556			—				1,556
Additional paid-in capital	3,625,673			—				3,625,673
Accumulated other comprehensive income	22,936			—				22,936
Retained earnings	9,500			6,327			(D)	15,827
Total Hudson Pacific Properties, Inc. stockholders’ equity	3,659,665			6,327				3,665,992
Non-controlling interest—members in consolidated entities	263,556			—				263,556
Non-controlling interest—units in the operating partnership	15,644			(5		)		15,639
TOTAL EQUITY	3,938,865			6,322				3,945,187
TOTAL LIABILITIES AND EQUITY	$	6,448,291		$	2,008			$	6,450,299

Hudson Pacific Properties, Inc.

Unaudited Pro Forma Consolidated Statement of Operations

For the Three Months Ended March 31, 2018



	Hudson Pacific Properties, Inc. (AA)			Sale of Property (BB)			Notes	Pro Forma
REVENUES
Office
Rental	$	130,082		$	(4,841	)		$	125,241
Tenant recoveries	20,904			(161		)		20,743
Parking and other	5,546			(4		)		5,542
Total Office revenues	156,532			(5,006		)		151,526
Studio
Rental	10,383			—				10,383
Tenant recoveries	354			—				354
Other property-related revenue	6,435			—				6,435
Other	414			—				414
Total Studio revenues	17,586			—				17,586
TOTAL REVENUES	174,118			(5,006		)		169,112
OPERATING EXPENSES
Office operating expenses	53,240			(1,667		)		51,573
Studio operating expenses	9,664			—				9,664
General and administrative	15,564			—				15,564
Depreciation and amortization	60,553			(1,746		)		58,807
TOTAL OPERATING EXPENSES	139,021			(3,413		)		135,608
INCOME FROM OPERATIONS	35,097			(1,593		)		33,504
OTHER EXPENSE (INCOME)
Interest expense	20,503			—				20,503
Interest income	(9		)	—				(9		)
Transaction-related expenses	118			—				118
Other income	(404		)	—				(404		)
TOTAL OTHER EXPENSES	20,208			—				20,208
INCOME BEFORE GAINS ON SALE OF REAL ESTATE	14,889			(1,593		)		13,296
Gains on sale of real estate	37,674			—				37,674
NET INCOME	52,563			(1,593		)		50,970
Net income attributable to preferred stock and units	(159		)	—				(159		)
Net income attributable to participating securities	(327		)	9			(CC)	(318		)
Net income attributable to non-controlling interest in consolidated entities	(3,323		)	—				(3,323		)
Net income attributable to non-controlling interest in the operating partnership	(177		)	5			(CC)	(172		)
Net income attributable to Hudson Pacific Properties, Inc. common stockholders	$	48,577		$	(1,579	)		$	46,998
Basic and diluted per share amounts:
Net income attributable to common stockholders—basic	$	0.31		$	(0.01	)	(DD)	$	0.30
Net income attributable to common stockholders—diluted	$	0.31		$	(0.01	)	(DD)	$	0.30
Weighted average shares of common stock outstanding—basic	155,626,055							155,626,055
Weighted average shares of common stock outstanding—diluted	156,714,822							156,714,822
Dividends declared per share	$	0.25						$	0.25

Hudson Pacific Properties, Inc.

Unaudited Pro Forma Consolidated Statement of Operations

Year Ended December 31, 2017



	Hudson Pacific Properties, Inc. (AA)			Sale of Property (BB)			Notes	Pro Forma
REVENUES
Office
Rental	$	545,453		$	(19,085	)		$	526,368
Tenant recoveries	92,244			(1,109		)		91,135
Parking and other	29,413			(5		)		29,408
Total Office revenues	667,110			(20,199		)		646,911
Studio
Rental	36,529			—				36,529
Tenant recoveries	1,336			—				1,336
Other property-related revenue	22,805			—				22,805
Other	359			—				359
Total Studio revenues	61,029			—				61,029
TOTAL REVENUES	728,139			(20,199		)		707,940
OPERATING EXPENSES
Office operating expenses	218,873			(6,794		)		212,079
Studio operating expenses	34,634			—				34,634
General and administrative	54,459			—				54,459
Depreciation and amortization	283,570			(7,511		)		276,059
TOTAL OPERATING EXPENSES	591,536			(14,305		)		577,231
INCOME FROM OPERATIONS	136,603			(5,894		)		130,709
OTHER EXPENSE (INCOME)
Interest expense	90,037			—				90,037
Interest income	(97		)	—				(97		)
Unrealized loss on ineffective portion of derivatives	70			—				70
Transaction-related expenses	598			—				598
Other income	(2,992		)	—				(2,992		)
TOTAL OTHER EXPENSES	87,616			—				87,616
INCOME BEFORE GAINS ON SALE OF REAL ESTATE	48,987			(5,894		)		43,093
Gains on sale of real estate	45,574			—				45,574
NET INCOME	94,561			(5,894		)		88,667
Net income attributable to preferred stock and units	(636		)	—				(636		)
Net income attributable to participating securities	(1,003		)	—				(1,003		)
Net income attributable to non-controlling interest in consolidated entities	(24,960		)	—				(24,960		)
Net income attributable to non-controlling interest in the operating partnership	(375		)	33			(CC)	(342		)
Net income attributable to Hudson Pacific Properties, Inc. common stockholders	$	67,587		$	(5,861	)		$	61,726
Basic and diluted per share amounts:
Net income attributable to common stockholders—basic	$	0.44		$	(0.04	)	(DD)	$	0.40
Net income attributable to common stockholders—diluted	$	0.44		$	(0.04	)	(DD)	$	0.40
Weighted average shares of common stock outstanding—basic	153,488,730							153,488,730
Weighted average shares of common stock outstanding—diluted	153,882,814							153,882,814

Hudson Pacific Properties, L.P.

Unaudited Pro Forma Consolidated Balance Sheet

As of March 31, 2018



	Hudson Pacific Properties, L.P. (A)			Sale of the Property (B)			Notes	Pro Forma
ASSETS
Investment in real estate, at cost	$	6,499,393		$	(204,835	)		$	6,294,558
Accumulated depreciation and amortization	(574,814		)	13,045				(561,769		)
Investment in real estate, net	5,924,579			(191,790		)		5,732,789
Cash and cash equivalents	64,080			202,405			(C)	266,485
Restricted cash	10,900			—				10,900
Accounts receivable, net	5,945			(221		)		5,724
Straight-line rent receivables, net	119,436			(3,060		)		116,376
Deferred leasing costs and lease intangible assets, net	241,912			(5,326		)		236,586
Prepaid expenses and other assets, net	69,735			—				69,735
Assets associated with real estate held for sale	11,704			—				11,704
TOTAL ASSETS	$	6,448,291		$	2,008			$	6,450,299

LIABILITIES
Notes payable, net	$	2,240,688		$	—			$	2,240,688
Accounts payable and accrued liabilities	146,588			(2,728		)		143,860
Lease intangible liabilities, net	45,651			(324		)		45,327
Security deposits and prepaid rent	65,692			(1,262		)		64,430
Liabilities associated with real estate held for sale	630			—				630
TOTAL LIABILITIES	2,499,249			(4,314		)		2,494,935
6.25% Series A cumulative redeemable preferred units of the operating partnership	10,177			—				10,177
CAPITAL
Hudson Pacific Properties, L.P. partner's capital:
Common units, 156,195,100 issued and outstanding at March 31, 2018	3,652,289			—				3,652,289
Accumulated other comprehensive income	23,020			6,322			(D)	29,342
Total Hudson Pacific Properties, L.P. partner’s capital	3,675,309			6,322				3,681,631
Non-controlling interest—members in Consolidated Entities	263,556			—				263,556
TOTAL CAPITAL	3,938,865			6,322				3,945,187
TOTAL LIABILITIES AND CAPITAL	$	6,448,291		$	2,008			$	6,450,299

Hudson Pacific Properties, L.P.

Unaudited Pro Forma Consolidated Statement of Operations

For the Three Months Ended March 31, 2018



	Hudson Pacific Properties, L.P. (AA)			Sale of Property (BB)			Notes	Pro Forma
REVENUES
Office
Rental	$	130,082		$	(4,841	)		$	125,241
Tenant recoveries	20,904			(161		)		20,743
Parking and other	5,546			(4		)		5,542
Total Office revenues	156,532			(5,006		)		151,526
Studio
Rental	10,383			—				10,383
Tenant recoveries	354			—				354
Other property-related revenue	6,435			—				6,435
Other	414			—				414
Total Studio revenues	17,586			—				17,586
TOTAL REVENUES	174,118			(5,006		)		169,112
OPERATING EXPENSES
Office operating expenses	53,240			(1,667		)		51,573
Studio operating expenses	9,664			—				9,664
General and administrative	15,564			—				15,564
Depreciation and amortization	60,553			(1,746		)		58,807
TOTAL OPERATING EXPENSES	139,021			(3,413		)		135,608
INCOME FROM OPERATIONS	35,097			(1,593		)		33,504
OTHER EXPENSE (INCOME)
Interest expense	20,503			—				20,503
Interest income	(9		)	—				(9		)
Transaction-related expenses	118			—				118
Other income	(404		)	—				(404		)
TOTAL OTHER EXPENSES	20,208			—				20,208
INCOME BEFORE GAINS ON SALE OF REAL ESTATE	14,889			(1,593		)		13,296
Gains on sale of real estate	37,674			—				37,674
NET INCOME	52,563			(1,593		)		50,970
Net income attributable to non-controlling interest in consolidated entities	(3,323		)	—				(3,323		)
Net income attributable to Hudson Pacific Properties, L.P.	49,240			(1,593		)	(CC)	47,647
Net income attributable to preferred units	(159		)	—				(159		)
Net income attributable to participating securities	(327		)	9			(CC)	(318		)
Net income available to common unitholders	$	48,754		$	(1,584	)		$	47,170
Basic and diluted per unit amounts:
Net income attributable to common unitholders—basic	$	0.31		$	(0.01	)	(DD)	$	0.30
Net income attributable to common unitholders—diluted	$	0.31		$	(0.01	)	(DD)	$	0.30
Weighted average shares of common unit outstanding—basic	156,195,100							156,195,100
Weighted average shares of common unit outstanding—diluted	157,283,867							157,283,867
Dividends declared per unit	$	0.25						$	0.25

Hudson Pacific Properties, L.P.

Unaudited Pro Forma Consolidated Statement of Operations

Year Ended December 31, 2017



	Hudson Pacific Properties, L.P. (AA)			Sale of Property (BB)			Notes	Pro Forma
REVENUES
Office
Rental	$	545,453		$	(19,085	)		$	526,368
Tenant recoveries	92,244			(1,109		)		91,135
Parking and other	29,413			(5		)		29,408
Total Office revenues	667,110			(20,199		)		646,911
Studio
Rental	36,529			—				36,529
Tenant recoveries	1,336			—				1,336
Other property-related revenue	22,805			—				22,805
Other	359			—				359
Total Studio revenues	61,029			—				61,029
TOTAL REVENUES	728,139			(20,199		)		707,940
OPERATING EXPENSES
Office operating expenses	218,873			(6,794		)		212,079
Studio operating expenses	34,634			—				34,634
General and administrative	54,459			—				54,459
Depreciation and amortization	283,570			(7,511		)		276,059
TOTAL OPERATING EXPENSES	591,536			(14,305		)		577,231
INCOME FROM OPERATIONS	136,603			(5,894		)		130,709
OTHER EXPENSE (INCOME)
Interest expense	90,037			—				90,037
Interest income	(97		)	—				(97		)
Unrealized loss on ineffective portion of derivatives	70			—				70
Transaction-related expenses	598			—				598
Other income	(2,992		)	—				(2,992		)
TOTAL OTHER EXPENSES	87,616			—				87,616
INCOME BEFORE GAINS ON SALE OF REAL ESTATE	48,987			(5,894		)		43,093
Gains on sale of real estate	45,574			—				45,574
NET INCOME	94,561			(5,894		)		88,667
Net income attributable to non-controlling interest in consolidated entities	(24,960		)	—				(24,960		)
Net income attributable to Hudson Pacific Properties, L.P.	69,601			(5,894		)		63,707
Net income attributable to preferred stock and units	(636		)	—				(636		)
Net income attributable to participating securities	(1,003		)	—				(1,003		)
Net income available to common unitholders	$	67,962		$	(5,894	)		$	62,068
Basic and diluted per unit amounts:
Net income attributable to common unitholders—basic	$	0.44		$	(0.04	)	(DD)	$	0.40
Net income attributable to common unitholders—diluted	$	0.44		$	(0.04	)	(DD)	$	0.40
Weighted average shares of common unit outstanding—basic	154,276,773							154,276,773
Weighted average shares of common unit outstanding—diluted	154,670,857							154,670,857

Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P.

Notes to Unaudited Pro Forma Consolidated Financial Statements

1. Balance sheet adjustments


(A)	Represents the historical balance sheet as of March 31, 2018.


(B)	Reflects the disposition of the Property, which was completed on July 27, 2018.


(C)	Reflects receipt of cash consideration at the closing of the disposition.


(D)	Reflects the gain arising the disposition as of the property on July 27, 2018. This estimated gain has not been reflected in the pro forma consolidated statements of operations because it is considered to be non-recurring in nature. No adjustment has been made to the sale proceeds to give effect to any potential post-closing adjustments under the terms of the sales agreement.

2. Income statement adjustments


(AA)	Reflects our historical consolidated statement of operations for the three-month period ended March 31, 2018 and for the year ended December 31, 2017.


(BB)	The pro forma adjustments reflect the disposition of the Property for the three-month period ended March 31, 2018 and for the year ended December 31, 2017 as if the Property was disposed of on January 1, 2017.


(CC)	Reflects the incremental impact on our pro forma results of operations for the three-month period ended March 31, 2018 and for the year ended December 31, 2017 to reflect the income allocation to participating securities and unitholders in our operating partnership as a result of the proforma adjustments described in (BB).


(DD)	Pro forma income per share from continuing operations attributable to common shareholders/unitholders—basic and diluted is calculated by dividing pro forma consolidated net income allocable to common stockholders/unitholders by the number of weighted average shares of common stock/units outstanding for the three-month period ended March 31, 2018 and for the year ended December 31, 2017.