-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MwwS5do/C5HsC2LPtj8pPKy/vnxOxvd8UASy1eCGZ68OT5Tpl3QHjgrhGs6XCPm5 KN/UAby7jMSzR9iRzNCyzg== 0000950146-96-002098.txt : 19961120 0000950146-96-002098.hdr.sgml : 19961120 ACCESSION NUMBER: 0000950146-96-002098 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960831 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961115 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MGI PROPERTIES CENTRAL INDEX KEY: 0000068330 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 046268740 STATE OF INCORPORATION: MA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-06833 FILM NUMBER: 96667403 BUSINESS ADDRESS: STREET 1: 30 ROWES WHARF CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6173305335 MAIL ADDRESS: STREET 1: 30 ROWES WHARF CITY: BOSTON STATE: MA ZIP: 02110 FORMER COMPANY: FORMER CONFORMED NAME: MORTGAGE GROWTH INVESTORS DATE OF NAME CHANGE: 19880225 FORMER COMPANY: FORMER CONFORMED NAME: EASTERN SHOPPING CENTERS INC DATE OF NAME CHANGE: 19711121 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: August 30, 1996 (Date of earliest event reported) MGI PROPERTIES (Exact name of Registrant as specified in its charter) Massachusetts 1-6833 04-6268740 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification Number) One Winthrop Square, Boston, Massachusetts 02110 (Address of Principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 422-6000 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits 1. Pro forma consolidated statements of earnings (unaudited) of the Registrant for the year ended November 30, 1995 and for the nine months ended August 31, 1996. A pro forma balance sheet is not presented, as Eight Forge Park, Franklin, Massachusetts was acquired on August 30, 1996 and is presented in the Form 10-Q for the three months ended August 31, 1996. 2. Historical summary of gross income and direct operating expenses (audited) of Eight Forge Park, Franklin, Massachusetts acquired on August 30, 1996 for the year ended December 31, 1995 (Exhibit A). MGI Properties Pro Forma Consolidated Statement of Earnings Year Ended November 30, 1995 (unaudited) Pro Forma Adjustments ----------------------------- Eight Forge Previous 96 As Reported Park Acquisitions Pro Forma - ------------------------------------------------------------------------------------------------------- Income Rental and other income $44,811,000 $656,000 $8,329,000 a $53,796,000 Interest 514,000 0 (91,000)b 423,000 Other 64,000 0 0 64,000 - ------------------------------------------------------------------------------------------------------- Total Income 45,389,000 656,000 8,238,000 54,283,000 - ------------------------------------------------------------------------------------------------------- Expenses Property operating expenses 12,348,000 25,000 1,260,000 a 13,633,000 Real estate taxes 5,600,000 66,000 1,067,000 a 6,733,000 Depreciation and amortization 7,814,000 104,000 1,116,000 b 9,034,000 Interest 5,807,000 335,000 3,807,000 c 9,949,000 General and administrative 2,651,000 0 0 2,651,000 - ------------------------------------------------------------------------------------------------------- Total expenses 34,220,000 530,000 7,250,000 42,000,000 - ------------------------------------------------------------------------------------------------------- Income before net gains 11,169,000 126,000 988,000 12,283,000 Net gains 3,150,000 0 0 3,150,000 - ------------------------------------------------------------------------------------------------------- Net income $14,319,000 $126,000 $988,000 $15,433,000 - ------------------------------------------------------------------------------------------------------- Per Share Data Net Income $1.25 $1.34 - ------------------------------------------------------------------------------------------------------- Weighted average shares outstanding 11,487,677 11,487,677 - -------------------------------------------------------------------------------------------------------
See Note 1 of the accompanying notes to the pro forma consolidated financial statements. MGI Properties Pro Forma Consolidated Statement of Earnings Nine Months Ended August 31, 1996 (unaudited) Pro Forma Adjustments ------------------------- Actual 9 Month As Reported Results Pro Forma Pro Forma - ------------------------------------------------------------------------------------------------------- Income Rental and other income $39,886,000 ($2,626,000) $7,303,000 a $44,563,000 Interest 301,000 0 0 301,000 Other 6,000 (1,000) 0 5,000 - ------------------------------------------------------------------------------------------------------- Total Income 40,193,000 (2,627,000) 7,303,000 44,869,000 - ------------------------------------------------------------------------------------------------------- Expenses Property operating expenses 10,477,000 (394,000) 1,094,000 a 11,177,000 Real estate taxes 4,743,000 (319,000) 753,000 a 5,177,000 Depreciation and amortization 6,944,000 (366,000) 837,000 c 7,415,000 Interest 6,424,000 (308,000) 3,107,000 d 9,223,000 General and administrative 2,157,000 0 0 2,157,000 - ------------------------------------------------------------------------------------------------------- Total expenses 30,745,000 (1,387,000) 5,791,000 35,149,000 - ------------------------------------------------------------------------------------------------------- Income before net gains 9,448,000 (1,240,000) 1,512,000 9,720,000 Net gains 9,350,000 0 0 9,350,000 - ------------------------------------------------------------------------------------------------------- Net income $18,798,000 ($1,240,000) $1,512,000 $19,070,000 - ------------------------------------------------------------------------------------------------------- Per Share Data Net Income $1.63 $1.65 - ------------------------------------------------------------------------------------------------------- Weighted average shares outstanding 11,534,604 11,534,604 - -------------------------------------------------------------------------------------------------------
See Note 2 of the accompanying notes to the pro forma consolidated financial statements. Notes to Pro Forma Consolidated Financial Statements: The accompanying pro forma consolidated financial statements have been prepared by MGI Properties' management. Management is not aware of any material factors relating to the properties which would have caused the pro forma financial information not to be indicative of future operating results. The pro forma consolidated statements of earnings should be read in conjunction with MGI Properties audited financial statements as of November 30, 1995 and the unaudited Form 10-Q for the quarter ended August 31, 1996. Note 1: The pro forma consolidated statement of earnings for the year ended November 30, 1995 combines the audited consolidated statement of earnings of MGI Properties with the audited historical summary of gross income and direct operating expenses of the property for the year ended, described on the Form 8-K dated August 30, 1996, and, for all other properties acquired from December 1, 1995 through August 30, 1996, the historical summaries of gross income and direct operating expenses. The pro forma consolidated statement of earnings assumes the acquisition of the properties as if they had occurred on December 1, 1994. The pro forma information is based upon the historical financial statements of MGI Properties after giving effect to the acquisition of these properties. (a) Rental income represents that which would have been derived from leases in place during the period from December 1, 1994 through November 30, 1995. The operating expenses for the unaudited properties were provided by the buildings' prior owners. (b) The reduction in interest income is due to the pro forma use of cash and short-term investments which would have been required to purchase the properties if they had been acquired on December 1, 1994. (c) The adjustment for depreciation applies a forty-year life based upon the straight line method to the building component of acquisitions for twelve months. (d) The increase in interest expense is due to the pro forma use of debt to acquire properties, which would have been outstanding for the period from December 1, 1994 to November 30, 1995. The pro forma acquisition of the nine properties assumes the Trust borrowed $31.0 million at a floating rate of 7.45%, of which $4.5 million is related to the acquisition of Eight Forge Park. Also reflected is the interest expense related to debt incurred with the July 2, 1996 acquisition of real estate in Portland, Maine which totaled $21.3 million at an average rate of 8.7%. Note 2: The accompanying pro forma consolidated statement of earnings for the nine-month period ended August 31, 1996 assumes the acquisition of the properties as if they were owned as of December 1, 1995. The pro forma information is based upon the historical statements of the Trust after giving effect to the acquisition of these properties. Rental income and operating expenses for the period of Trust ownership are deducted as pro forma adjustments. (a) Rental income represents that which would have been derived from leases in place during the period from December 1, 1995 through August 31, 1996. The operating expenses for the nine-month period are estimated based upon MGI's actual experience and upon information provided by the prior owner. (b) The adjustment for depreciation reflects the building component of acquisitions for nine months using a forty-year life based upon the straight line method. (c) The increase in interest expense is due to the pro forma use of debt that would have been outstanding for the period from December 1, 1995 to August 31, 1996. 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. Date: November 15, 1996 /s/ Phillip C. Vitali ------------------------------------------ Phillip C. Vitali Executive Vice President and Treasurer (Chief Financial Officer) Date: November 15, 1996 /s/ David P. Morency ------------------------------------------ David P. Morency Controller (Principal Accounting Officer) EIGHT FORGE PARK Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1995 (With Independent Auditors' Report Thereon) Independent Auditors' Report To the Board of Directors of MGI Properties: We have audited the accompanying Historical Summary of Gross Income and Direct Operating Expenses ("Historical Summary") for Eight Forge Park (the "Property") for the year ended December 31, 1995. This Historical Summary is the responsibility of the Property's management. Our responsibility is to express an opinion on the Historical Summary based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summary. An audit also includes assessing the basis of accounting used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in Form 8-K of MGI Properties as described in Note 1 and is not intended to be a complete presentation of the Property's revenues and expenses. In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the gross income and direct operating expenses described in Note 1 of the Property for the year ended December 31, 1995, in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Boston, Massachusetts November 13, 1996 EIGHT FORGE PARK Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1995 Gross income: Rental income $ 587,442 Operating expense contributions 68,568 --------- Total gross income 656,010 --------- Direct operating expenses: Rental property operating expenses 25,023 Real estate taxes 65,795 --------- Total direct operating expenses 90,818 --------- Gross income in excess of direct operating expenses $ 565,192 ========= See accompanying notes to historical summary of gross income and direct operating expenses. EIGHT FORGE PARK Notes to Historical Summary of Gross Income and Direct Operating Expenses For the year ended December 31, 1995 (1) Business Eight Forge Park (the "Property") is comprised of land and a 100,000 square-foot research and development industrial building located in Franklin, Massachusetts. On August 30, 1996, MGI Properties acquired the Property from Prudential Insurance Company of America. (2) Basis of Presentation The Historical Summary has been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission for the acquisition of real estate operations for inclusion in Form 8-K of the acquirer, MGI Properties. Therefore, the Historical Summary presents only specified revenues and expenses and is not a complete presentation of the revenues and expenses of the Property. The Historical Summary has been prepared on the accrual basis of accounting. (a) Gross Income The Property is 100% leased to and occupied by one tenant under an operating lease that was scheduled to expire on June 30, 1997. In February 1996, a new lease was executed with this tenant which is scheduled to expire on January 31, 2006. Both leases provide for rents where the tenant pays for property operating expenses, real estate tax and insurance. Only income from the operating lease is included in gross income. All other forms of revenue are excluded from this Historical Summary, as they are not comparable to the proposed future operations of the Property. (b) Direct Operating Expenses Direct operating expenses include only those costs comparable to the future operation of the Property. Costs such as depreciation, amortization and certain professional and administrative costs are excluded from the Historical Summary. -----END PRIVACY-ENHANCED MESSAGE-----