-----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, C2wHOVOm+JGJwxDvlRA1Q0mQNfDE5O1u/11hu7Xu6R6u0V2WqwfkdXFKJlX5aHU9 9E8q7VzM01DVC/mGYZlCvA== 0000729237-97-000012.txt : 19970329 0000729237-97-000012.hdr.sgml : 19970329 ACCESSION NUMBER: 0000729237-97-000012 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970318 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970328 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PARKWAY PROPERTIES INC CENTRAL INDEX KEY: 0000729237 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 742123597 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11533 FILM NUMBER: 97567677 BUSINESS ADDRESS: STREET 1: 300 ONE JACKSON PL STREET 2: 188 E CAPITOL ST STE 300 CITY: JACKSON STATE: MS ZIP: 39225-2728 BUSINESS PHONE: 6019484091 MAIL ADDRESS: STREET 1: P O BOX 22728 STREET 2: P O BOX 22728 CITY: JACKSON STATE: MS ZIP: 39201 FORMER COMPANY: FORMER CONFORMED NAME: PARKWAY CO DATE OF NAME CHANGE: 19951018 8-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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): March 18, 1997 --------------- PARKWAY PROPERTIES, INC. - ------------------------------------------------------------------ (Exact name of Registrant as specified in its charter) Maryland 1-11533 74-2123597 - ------------------------------------------------------------------ (State or other (Commission File Number) (IRS Employer jurisdiction of Identification incorporation) Number) 300 One Jackson Place, 188 E. Capitol St., Jackson, MS 39201 - ------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (601) 948-4091 --------------- - ------------------------------------------------------------------ (Former name or former address, if changed since last report) FORM 8-K PARKWAY PROPERTIES, INC. Item 2. Acquisition or Disposition of Assets. On March 18, 1997, Parkway Properties LP, a limited partnership in which Parkway Properties, Inc. is a 99% limited partner and a wholly-owned subsidiary is a 1% general partner, purchased Charlotte Park Executive Center in Charlotte, North Carolina. Charlotte Park Executive Center is a 30 acre master- planned office park consisting of three office buildings built in 1982, 1984 and 1986 with approximately 187,207 square feet of net rentable area. It is located in the I-77/Southwest corridor, Charlotte's largest office submarket. The Company also purchased 17.64 acres of development land in the office park for $1,721,000. The three buildings are currently 92% leased with Premier Health Systems (59% of total net rentable square feet) and BellSouth (23% of total net rentable square feet) as the principal tenants. The purchase price of $16,071,000 was funded with existing cash reserves. Item 7. Financial Statements and Exhibits. (a) Financial Statements The audited combined financial statement of Charlotte Park Executive Center for the twelve months ended December 31, 1995 is incorporated by reference to the Registrant's Form 8-K dated January 7, 1997 filed on January 10, 1997. Also incorporated is the unaudited combined financial statement of Charlotte Park Executive Center for the nine months ended September 30, 1996. (b) Pro Forma Consolidated Financial Statements The following unaudited Pro Forma Consolidated Financial Statements are attached hereto. PARKWAY PROPERTIES, INC. Page ---- Pro Forma Consolidated Financial Statements (Unaudited) 4 Pro Forma Consolidated Balance Sheet (Unaudited) - As of September 30, 1996 6 Pro Forma Consolidated Statement of Income (Unaudited) - For the Twelve Months Ended December 31, 1995 8 Pro Forma Consolidated Statement of Income (Unaudited) - For the Nine Months Ended September 30, 1996 9 Notes to Pro Forma Consolidated Financial Statements (Unaudited) 10 (c) Exhibits (10) The Purchase and Sale Agreement among Charlotte Park Limited Partnership, CEP Investors Limited Partnership and Parkway Carolina, Inc. dated November 4, 1996 is incorporated by reference to the Registrant's Form 8-K dated January 7, 1997 filed on January 10, 1997. Parkway agrees to furnish supplementally to the Securities and Exchange Commission on request a copy of any omitted schedule or exhibit to this agreement. PARKWAY PROPERTIES, INC. Pro Forma Consolidated Financial Statements (Unaudited) The following unaudited pro forma consolidated balance sheet as of September 30, 1996 and pro forma consolidated statements of income of Parkway Properties, Inc. ("Parkway") for the twelve months ended December 31, 1995 and nine months ended September 30, 1996 give effect to the September 30, 1996 purchase of the BB&T Financial Center ,the October 31, 1996 purchase of the Tensor Building, the January 7, 1997 purchase of Forum II & III, the January 28, 1997 purchase of Ashford II and the March 18, 1997 purchase of Charlotte Park Executive Center as well as the December 24, 1996 sale of the Virginia Beach mortgage loan. The pro forma consolidated financial statements have been prepared by management of Parkway based upon the historical financial statements of Parkway and the adjustments and assumptions in the accompanying notes to the pro forma consolidated financial statements. The pro forma consolidated balance sheet sets forth the effect of Parkway's purchases of the Tensor Building, Forum II & III, Charlotte Park Executive Center and Ashford II and the effect of the sale of the mortgage loan. No pro forma adjustments were needed for the purchase of the BB&T Financial Center due its September 30th purchase date. The pro forma consolidated statements of income set forth the effects of Parkway's purchases of the following buildings as if they had been consummated on January 1, 1995. BUILDING DATE OF PURCHASE Charlotte Park Executive Center 3/18/97 Ashford II 1/28/97 Forum II & III 1/07/97 Tensor 10/31/96 BB&T Financial Center 9/30/96 Falls Pointe 8/09/96 Roswell North 8/09/96 Cherokee 7/09/96 Courthouse 7/09/96 400 Northbelt 4/15/96 Woodbranch 4/15/96 One Park 10 Plaza 3/07/96 Waterstone 12/18/95 IBM Building 10/02/95 MTEL Centre' 7/31/95 In addition to the purchases listed above, the pro forma consolidated statements of income set forth the effect of the May 31, 1996 sale of 157 mortgage loans, the placement of non-recourse mortgage debt on recently acquired properties and the December 24, 1996 sale of the Virginia Beach mortgage loan as if the transactions occurred January 1, 1995. These pro forma consolidated financial statements may not be indicative of the results that actually would have occurred if the purchase, sale and/or financings had been in effect on the dates indicated or which may be obtained in the future. The pro forma consolidated financial statements should be read in conjunction with the financial statements and notes of Parkway included in its annual report on Form 1O-KSB for the period ended December 31, 1995. PARKWAY PROPERTIES, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1996 (Unaudited) Parkway Pro Forma Parkway Historical Adjustments Pro Forma ---------- ----------- --------- (In thousands) Assets Real estate related investments Office buildings.............$129,507 $ 37,523 $167,030 Accumulated depreciation..... (8,671) - (8,671) -------- -------- -------- 120,836 37,523 158,359 Real estate held for sale Land....................... 8,206 - 8,206 Operating properties....... 3,928 - 3,928 Mortgage loans............... 6,173 (5,784) 389 Real estate securities....... 507 - 507 Real estate partnerships and corporate joint venture.... 312 - 312 -------- -------- -------- 139,962 31,739 171,701 Interest and rents receivable and other assets............. 3,865 (227) 3,638 Cash and cash equivalents...... 134 (134) - -------- -------- -------- $143,961 $ 31,378 $175,339 ======== ======== ======== Liabilities Notes payable to banks.........$ 6,836 $ 22,438 $ 29,274 Mortgage notes payable without recourse..................... 53,452 9,850 63,302 Mortgage notes payable on wrap mortgages.................... 4,470 (4,470) - Accounts payable and other liabilities.................. 5,999 - 5,999 -------- -------- -------- 70,757 27,818 98,575 -------- -------- -------- Shareholders' Equity Preferred stock, $.001 par value, 576,000 shares authorized, 576,000 shares issued in 1996............... 1 1 Common stock, $.001 par value, 69,424,000 shares authorized, 3,636,421 shares issued...... 3 - 3 Additional paid-in capital..... 51,924 - 51,924 Retained earnings.............. 21,061 3,560 24,621 -------- -------- -------- 72,989 3,560 76,549 Unrealized gain on securities.. 215 - 215 -------- -------- -------- 73,204 3,560 76,764 -------- -------- -------- $143,961 $ 31,378 $175,339 ======== ======== ======== PARKWAY PROPERTIES, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE TWELVE MONTHS ENDED 12/31/95 (Unaudited) Parkway Pro Forma Parkway Historical Adjustments Pro Forma ---------- ----------- --------- (In thousands, except per share data) Revenues Income from real estate properties.......................$ 8,941 $25,140 (a)$34,081 Interest on mortgage loans......... 1,421 (1,265)(e) 156 Management company income.......... 1,041 - 1,041 Equity in earnings Real estate companies............ 135 - 135 Real estate partnerships and corporate joint venture........ 116 - 116 Interest on investments............ 167 - 167 Dividend income.................... 601 - 601 Deferred gains and other income.... 345 - 345 Gain on real estate and mortgage loans............... 6,552 - 6,552 Gain on securities................. 4,314 - 4,314 ------- ------- ------- 23,633 23,875 47,508 ------- ------- ------- Expenses Real estate owned Operating expense................ 4,876 12,000 (a) 16,876 Interest expense................. 2,230 3,457 (c) 5,687 Depreciation and amortization.... 1,331 2,855 (a) 4,186 Minority interest................ (100) - (100) Interest expense Notes payable to banks........... 156 2,360 (e) 2,516 Notes payable on wrap mortgages.. 135 (135) - Management company expenses........ 804 - 804 Other expenses..................... 2,299 - 2,299 ------- ------- ------- 11,731 20,537 32,268 ------- ------- ------- Income before taxes................ 11,902 3,338 15,240 Income tax provision............... 82 - (8) 82 ------- ------- ------- Net income.........................$11,820 $ 3,338 $15,158 ======= ======= ======= Net income per share...............$ 4.24 $ 3.86 ======= ======= Weighted average shares outstanding...................... 2,787 3,927 ======= ======= PARKWAY PROPERTIES, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED 9/30/96 (Unaudited) Parkway Pro Forma Parkway Historical Adjustments Pro Forma ---------- ----------- --------- (In thousands, except per share data) Revenues Income from real estate properties...................... $13,559 $11,725 (b) $25,284 Management company income......... 537 - 537 Interest on mortgage loans........ 1,435 (1,384)(f) 51 Equity in earnings: Real estate partnerships and corporate joint venture....... 121 - 121 Gain on securities................ 304 - 304 Interest on investments........... 471 - 471 Deferred gains and other income... 91 - 91 Dividend income................... 118 - 118 Gain on real estate and mortgage loans........................... 5,863 - 5,863 ------- ------- ------- 22,499 10,341 32,840 ------- ------- ------- Expenses Real estate owned: Operating expense............... 6,570 5,376 (b) 11,946 Interest expense................ 2,390 1,452 (d) 3,842 Depreciation and amortization... 1,591 1,457 (b) 3,048 Minority interest............... (12) - (12) Interest expense: Notes payable to banks.......... 95 1,770 (f) 1,865 Notes payable on wrap mortgages. 340 (340) - Management company expenses....... 483 - 483 Other expenses.................... 2,198 - 2,198 ------- ------- ------- 13,655 9,715 23,370 ------- ------- ------- Income before taxes............... 8,844 626 9,470 Income tax provision.............. 23 - (8) 23 ------- ------- ------- Net income........................ $ 8,821 $ 626 $ 9,447 ======= ======= ======= Net income per share.............. $ 2.54 $ 2.27 ======= ======= Weighted average shares outstanding 3,474 4,169 ======= ======= PARKWAY PROPERTIES, INC. Notes to Pro Forma Consolidated Financial Statements (Unaudited) 1. On September 30, 1996, Parkway Carolina, Inc., a wholly- owned subsidiary of Parkway Properties, Inc. ("Parkway" or the "Company"), purchased the BB&T Financial Center for $24,500,000 from an unrelated party. This building consists of approximately 239,000 net rentable square feet. No pro forma adjustments were needed to the Consolidated Balance Sheet as of September 30, 1996 due to the September 30th purchase date. 2. On October 31, 1996, Parkway Houston, Inc., a wholly-owned subsidiary of Parkway Properties, Inc. ("Parkway"), purchased the Tensor Building in Houston, Texas from a major property company. The Tensor Building consists of approximately 92,000 square feet of rentable square feet. The purchase price of $2,820,000 was funded with existing cash reserves. 3. On December 24, 1996, Parkway Properties, Inc. ("Parkway" or the "Company") sold the Virginia Beach mortgage loan to an unrelated party for $9,700,000 in cash. A portion of the proceeds from the sale were used to repay the underlying first mortgages on the buildings totaling $4,415,000. 4. On January 7, 1997, Parkway Properties LP purchased Forum II & III for $16,425,000 from an unrelated party. The buildings consist of approximately 173,000 net rentable square feet. The purchase was funded with existing cash reserves and borrowings of $7,440,000 on a line of credit with Deposit Guaranty National Bank, Jackson, Mississippi, at a rate equal to 8.0062%. 5. On March 18, 1997, Parkway Properties LP purchased Charlotte Park Executive Center for $16,071,000. The 30 acre master- planned office park consists of three buildings with approximately 187,207 square feet of net rentable area. The Company also purchased 17.64 acres of development land in the office park for $1,721,000. The purchases were funded with existing cash reserves. 6. The pro forma adjustments to the Consolidated Balance Sheet as of September 30, 1996 include the January 28, 1997 purchase of Ashford II for $2,207,000. 7. The pro forma adjustments to the Consolidated Statements of Income for the twelve months ended December 31, 1995 and the nine months ended September 30, 1996 set forth the effects of Parkway's purchases of the following buildings as if they had been consummated on January 1, 1995. BUILDING DATE OF PURCHASE Charlotte Park Executive Center 3/18/97 Ashford II 1/28/97 Forum II & III 1/07/97 Tensor 10/31/96 BB&T Financial Center 9/30/96 Falls Pointe 8/09/96 Roswell North 8/09/96 Cherokee 7/09/96 Courthouse 7/09/96 400 Northbelt 4/15/96 Woodbranch 4/15/96 One Park 10 Plaza 3/07/96 Waterstone 12/18/95 IBM Building 10/02/95 MTEL Centre' 7/31/95 In addition to the purchases listed above, the adjustments on the pro forma consolidated statements of income set forth the effect of the May 31, 1996 sale of 157 mortgage loans, the December 24, 1996 sale of the Virginia Beach mortgage loan and the placement of non-recourse mortgage debt on recently acquired properties as if the transactions occurred January 1, 1995. These pro forma adjustments are detailed below by property for the twelve months ended December 31, 1995 and nine months ended September 30, 1996. The effect on income and expenses from real estate properties due to the above purchases are as follows: (a) For the twelve months ended December 31, 1995: Revenue Expenses ----------- --------------------------- Income From Real Estate Owned Real Estate Operating Depreciation Properties Expense Expense ----------- ------------ ------------ MTEL Centre' $ 2,420,000 $ 1,442,000 $ 177,000 IBM Building 959,000 449,000 102,000 Waterstone 1,183,000 499,000 181,000 One Park 10 Plaza 1,731,000 1,006,000 151,000 400 North Belt & Woodbranch 3,470,000 1,970,000 313,000 Cherokee & Courthouse Road Bldgs. 1,848,000 841,000 249,000 Falls Pointe & Roswell North 2,270,000 929,000 315,000 BB&T Financial Center 3,999,000 1,378,000 551,000 Tensor 1,001,000 618,000 63,000 Forum II & III 2,858,000 1,289,000 370,000 Charlotte Ex.Park 2,732,000 1,172,000 333,000 Ashford II 669,000 407,000 50,000 ----------- ----------- ----------- $25,140,000 $12,000,000 $ 2,855,000 =========== =========== =========== (b) For the nine months ended September 30, 1996: Revenue Expenses ----------- --------------------------- Income From Real Estate Owned Real Estate Operating Depreciation Properties Expense Expense ----------- ------------ ------------ One Park 10 $ 299,000 $ 160,000 $ 25,000 400 North Belt & Woodbranch 1,036,000 551,000 92,000 Cherokee & Courthouse Road Bldgs. 917,000 480,000 124,000 Falls Pointe & Roswell North 1,161,000 439,000 191,000 BB&T Financial Center 3,072,000 1,055,000 413,000 Tensor 729,000 477,000 48,000 Forum II & III 2,062,000 998,000 277,000 Charlotte Park 1,962,000 885,000 250,000 Ashford II 487,000 331,000 37,000 ----------- ----------- ----------- $11,725,000 $ 5,376,000 $ 1,457,000 =========== =========== =========== Depreciation is provided by the straight-line method over the estimated useful lives of the buildings (40 years). Pro forma interest expense on real estate owned reflects the non-recourse debt placed on the buildings at the actual amounts and rates by property as if placed January 1, 1995 is as follows: Property/Placement Twelve Months Nine Months Date/Rate Debt 12/31/95 (c) 9/30/96 (d) ------------------ ----------- ------------- ----------- MTEL Centre 12/95 7.75% $11,000,000 $ 595,000 $ - IBM Building 2/96 7.78% 4,800,000 370,000 41,000 Waterstone 6/96 8.00% 5,620,000 450,000 185,000 One Park 10 7/96 8.35% 4,700,000 392,000 196,000 400 North Belt & Woodbranch 7/96 8.25% 10,000,000 825,000 412,000 Falls Pointe & Roswell North 12/96 8.375% 9,850,000 825,000 618,000 ---------- ---------- $3,457,000 $1,452,000 ========== ========== The January 1, 1995 pro forma effect of the sale of 157 mortgage loans on May 31, 1996 and the December 24, 1996 sale of the Virginia Beach mortgage loan is as follows: Twelve Months Nine Months 12/31/95 (e) 9/30/96 (f) ------------- ----------- Interest Income: Mortgage loans $(1,265,000) $(1,384,000) The pro forma effect of the purchases of BB&T, Tensor, Forum II & III, Charlotte Park Executive Center and Ashford II on interest expense on notes payable to banks for the twelve months ended December 31, 1995 and the nine months ended September 30, 1996 is $2,360,000 and $1,770,000, respectively. The pro forma effect of the sale of the Virginia Beach mortgage loan on interest expense on notes payable on wrap mortgages for the twelve months ended December 31, 1995 and the nine months ended September 30, 1996 is a decrease of $135,000 and $340,000, respectively. 8. No additional income tax expenses were provided because of the Company's net operating loss carryover. 9. All per share information for the twelve months ended December 31, 1995 has been restated to reflect a 3 for 2 common stock split effected as a dividend of one share for every two shares outstanding on April 30, 1996 as well as the June 14, 1996 private placement of 1,140,000 shares as if both transactions had occurred January 1, 1995. FORM 8-K PARKWAY PROPERTIES, INC. 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: March 28, 1997 PARKWAY PROPERTIES, INC. BY: /s/Sarah P. Clark Sarah P. Clark Vice President, Chief Financial Officer Treasurer and Secretary -----END PRIVACY-ENHANCED MESSAGE-----