Maryland
|
1-11533
|
74-2123597
|
(State or Other Jurisdiction
|
(Commission File Number)
|
(IRS Employer
|
Of Incorporation)
|
|
Identification No.)
|
0 | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
0 | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
0 | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
0 | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(a) Financial Statements of Selected Acquisition Properties.
|
|
|
|
The following audited financial statement of NASCAR Plaza for the year ended December 31, 2011 is attached hereto.
|
|
|
Page
|
Independent Auditors' Report
|
F-1
|
Statements of Revenues and Certain Expenses
|
F-2
|
Notes to Statements of Revenues and Certain Expenses
|
F-3
|
|
|
|
|
|
|
|
|
|
|
(b) Pro forma financial information.
|
|
The following unaudited Pro Forma Consolidated Financial Statements of Parkway for the year ended December 31, 2011 and as of and for the nine months ended September 30, 2012 are attached hereto:
|
|
|
|
Pro Forma Consolidated Financial Statements (Unaudited)
|
F-4
|
Pro Forma Consolidated Balance Sheet (Unaudited) – As of September 30, 2012
Pro Forma Consolidated Statements of Operations and Comprehensive Income
|
F-5
|
(Unaudited) – for the Year Ended December 31, 2011
|
F-6
|
Pro Forma Consolidated Statements of Operations and Comprehensive Income
|
|
(Unaudited) – for the Nine Months Ended September 30, 2012
|
F-7
|
Notes to Pro Forma Consolidated Statements of Operations and Comprehensive Income (Unaudited)
|
F-8
|
As this property is directly owned by an entity that has elected to be treated as a real estate investment trust (as specified under sections 856-860 of the Internal Revenue Code of 1986) for Federal income tax purposes, a presentation of estimated taxable operating results is not applicable.
|
|
(d) Exhibits
|
|
|
|
23.1 Consent of Ernst & Young LLP
|
|
|
|
|
Nine Months Ended
September 30, 2012
|
Year Ended
December 31, 2011
|
||||||
Revenues:
|
(unaudited)
|
|||||||
Rental property revenue
|
$
|
4,474
|
$
|
5,760
|
||||
Other income
|
|
44
|
53
|
|||||
|
|
4,518
|
5,813
|
|||||
|
||||||||
Certain expenses:
|
||||||||
Operating expenses
|
|
918
|
1,037
|
|||||
Real estate taxes
|
|
581
|
789
|
|||||
Personnel
|
|
222
|
298
|
|||||
Utilities
|
|
301
|
334
|
|||||
Interest expense
|
|
1,099
|
1,466
|
|||||
|
|
3,121
|
3,924
|
|||||
Excess of revenues over certain expenses
|
$
|
1,397
|
1,889
|
Year
|
Amount
|
|||
2012
|
$
|
4,541
|
||
2013
|
|
8,395
|
||
2014
|
|
8,944
|
||
2015
|
|
8,687
|
||
2016
|
|
8,694
|
||
Thereafter
|
|
54,681
|
||
|
$
|
93,942
|
|
Parkway
Historical
|
Pro Forma
Adjustments (1)
|
Parkway
Pro Forma
|
|||||||||
Assets
|
(In thousands)
|
|||||||||||
Real estate related investments:
|
||||||||||||
Office and parking properties
|
$
|
1,442,759
|
$
|
87,325
|
$
|
1,530,084
|
||||||
Accumulated depreciation
|
(190,154
|
)
|
-
|
(190,154
|
)
|
|||||||
|
1,252,605
|
87,325
|
1,339,930
|
|||||||||
|
||||||||||||
Land available for sale
|
250
|
-
|
250
|
|||||||||
|
1,252,855
|
87,325
|
1,340,180
|
|||||||||
|
||||||||||||
Rents receivable and other assets
|
109,874
|
3,491
|
113,365
|
|||||||||
Intangible assets, net
|
114,018
|
13,508
|
127,526
|
|||||||||
Assets held for sale
|
7,031
|
-
|
7,031
|
|||||||||
Management contracts, net
|
47,010
|
-
|
47,010
|
|||||||||
Cash and cash equivalents$
|
53,556
|
-
|
53,556
|
|||||||||
Total assets
|
$
|
1,584,344
|
$
|
104,324
|
$
|
1,688,668
|
||||||
|
||||||||||||
Liabilities
|
||||||||||||
Notes payable to banks
|
$
|
125,000
|
$
|
56,600
|
$
|
181,600
|
||||||
Mortgage notes payable
|
549,429
|
42,977
|
592,406
|
|||||||||
Accounts payable and other liabilities
|
79,868
|
4,747
|
84,615
|
|||||||||
Liabilities related to assets held for sale
|
361
|
-
|
361
|
|||||||||
Total liabilities
|
754,658
|
104,324
|
858,982
|
|||||||||
|
||||||||||||
Stockholders' Equity
|
||||||||||||
8.00% Series D Preferred stock, $.001 par value, 5,421,296 shares authorized, issued and outstanding
|
128,942
|
-
|
128,942
|
|||||||||
Common stock, $.001 par value, 98,578,704 shares authorized, 41,191,461 shares issued and outstanding
|
41
|
-
|
41
|
|||||||||
Common stock held in trust, at cost, 9,964 shares
|
(186
|
)
|
-
|
(186
|
)
|
|||||||
Additional paid-in capital
|
719,031
|
-
|
719,031
|
|||||||||
Accumulated other comprehensive loss
|
(4,711
|
)
|
-
|
(4,711
|
)
|
|||||||
Accumulated deficit
|
(278,923
|
)
|
-
|
(278,923
|
)
|
|||||||
Total Parkway Properties, Inc. stockholders' equity
|
564,194
|
-
|
564,194
|
|||||||||
Noncontrolling interests
|
265,492
|
-
|
265,492
|
|||||||||
Total equity
|
829,686
|
-
|
829,686
|
|||||||||
Total liabilities and equity
|
$
|
1,584,344
|
$
|
104,324
|
$
|
1,688,668
|
|
Parkway Historical
|
Pro Forma
Adjustments (1)
|
Parkway
Pro Forma
|
|||||||||
|
(In thousands, except per share data)
|
|||||||||||
Revenues
|
||||||||||||
Income from office and parking properties
|
$
|
149,000
|
$
|
5,205
|
$
|
154,205
|
||||||
Management company income
|
16,896
|
-
|
16,896
|
|||||||||
Total revenues
|
165,896
|
5,205
|
171,101
|
|||||||||
|
||||||||||||
Expenses and other
|
||||||||||||
Property operating expense
|
61,637
|
2,458
|
64,095
|
|||||||||
Depreciation and amortization
|
57,002
|
4,338
|
61,340
|
|||||||||
Impairment loss on real estate
|
6,420
|
-
|
6,420
|
|||||||||
Impairment loss on mortgage loan receivable
|
9,235
|
-
|
9,235
|
|||||||||
Change in fair value of contingent consideration
|
(13,000
|
)
|
-
|
(13,000
|
)
|
|||||||
Management company expenses
|
13,337
|
-
|
13,337
|
|||||||||
General and administrative
|
18,805
|
-
|
18,805
|
|||||||||
Acquisition costs
|
17,219
|
-
|
17,219
|
|||||||||
Total expenses and other
|
170,655
|
6,796
|
177,451
|
|||||||||
|
||||||||||||
Operating loss
|
(4,759
|
)
|
(1,591
|
)
|
(6,350
|
)
|
||||||
|
||||||||||||
Other income and expenses
|
||||||||||||
Interest and other income
|
938
|
-
|
938
|
|||||||||
Equity in earnings of unconsolidated joint ventures
|
57
|
-
|
57
|
|||||||||
Gain on sale of real estate
|
743
|
-
|
743
|
|||||||||
Interest expense
|
(31,612
|
)
|
(3,751
|
)
|
(35,363
|
)
|
||||||
|
||||||||||||
Loss before income taxes
|
(34,633
|
)
|
(5,342
|
)
|
(39,975
|
)
|
||||||
|
||||||||||||
Income tax expense
|
(56
|
)
|
-
|
(56
|
)
|
|||||||
|
||||||||||||
Loss from continuing operations
|
(34,689
|
)
|
(5,342
|
)
|
(40,031
|
)
|
||||||
Discontinued operations:
|
||||||||||||
Loss from discontinued operations
|
(195,139
|
)
|
-
|
(195,139
|
)
|
|||||||
Gain on sale of real estate from discontinued operations
|
17,825
|
-
|
17,825
|
|||||||||
Total discontinued operations
|
(177,314
|
)
|
-
|
(177,314
|
)
|
|||||||
|
||||||||||||
Net loss
|
(212,003
|
)
|
(5,342
|
)
|
(217,345
|
)
|
||||||
Net loss attributable to noncontrolling interests
|
85,100
|
-
|
85,100
|
|||||||||
|
||||||||||||
Net loss for Parkway Properties, Inc.
|
(126,903
|
)
|
(5,342
|
)
|
(132,245
|
)
|
||||||
Change in market value of interest rate swaps
|
(337
|
)
|
(1,709
|
)
|
(2,046
|
)
|
||||||
Comprehensive loss
|
$
|
(127,240
|
)
|
$
|
(7,051
|
)
|
$
|
(134,291
|
)
|
|||
|
||||||||||||
Net loss for Parkway Properties, Inc.
|
$
|
(126,903
|
)
|
$
|
(5,342
|
)
|
$
|
(132,245
|
)
|
|||
Dividends on preferred stock
|
(10,052
|
)
|
-
|
(10,052
|
)
|
|||||||
Net loss attributable to common stockholders
|
$
|
(136,955
|
)
|
$
|
(5,342
|
)
|
$
|
(142,297
|
)
|
|||
|
||||||||||||
Net loss per common share attributable to Parkway Properties, Inc.:
|
||||||||||||
Basic and Diluted:
|
||||||||||||
Loss from continuing operations attributable to Parkway Properties, Inc.
|
$
|
(1.80
|
)
|
$
|
(2.05
|
)
|
||||||
Discontinued operations
|
(4.57
|
)
|
(4.57
|
)
|
||||||||
Basic and diluted net loss attributable to Parkway Properties, Inc.
|
$
|
(6.37
|
)
|
$
|
(6.62
|
)
|
||||||
|
||||||||||||
Weighted average shares outstanding:
|
||||||||||||
Basic
|
21,497
|
21,497
|
||||||||||
Diluted
|
21,497
|
21,497
|
||||||||||
|
||||||||||||
Amounts attributable to Parkway Properties, Inc. common stockholders:
|
||||||||||||
Loss from continuing operations attributable to Parkway Properties, Inc.
|
$
|
(38,710
|
)
|
$
|
(44,052
|
)
|
||||||
Discontinued operations
|
(98,245
|
)
|
(98,245
|
)
|
||||||||
Net loss attributable to common stockholders
|
$
|
(136,955
|
)
|
$
|
(142,297
|
)
|
|
Parkway Historical
|
Pro Forma
Adjustments (1)
|
Parkway
Pro Forma
|
|||||||||
|
(In thousands, except per share data)
|
|||||||||||
Revenues
|
||||||||||||
Income from office and parking properties
|
$
|
149,995
|
$
|
4,062
|
$
|
154,057
|
||||||
Management company income
|
14,996
|
-
|
14,996
|
|||||||||
Total revenues
|
164,991
|
4,062
|
169,053
|
|||||||||
|
||||||||||||
Expenses and other
|
||||||||||||
Property operating expense
|
58,803
|
2,022
|
60,825
|
|||||||||
Depreciation and amortization
|
59,046
|
3,254
|
62,300
|
|||||||||
Change in fair value of contingent consideration
|
216
|
-
|
216
|
|||||||||
Management company expenses
|
12,966
|
-
|
12,966
|
|||||||||
General and administrative
|
11,266
|
-
|
11,266
|
|||||||||
Acquisition costs
|
1,491
|
-
|
1,491
|
|||||||||
Total expenses and other
|
143,788
|
5,276
|
149,064
|
|||||||||
|
||||||||||||
Operating income
|
21,203
|
(1,214
|
)
|
19,989
|
||||||||
|
||||||||||||
Other income and expenses
|
||||||||||||
Interest and other income
|
205
|
-
|
205
|
|||||||||
Gain on sale of real estate
|
48
|
-
|
48
|
|||||||||
Recovery of losses on mortgage loan receivable
|
500
|
-
|
500
|
|||||||||
Interest expense
|
(26,301
|
)
|
(2,159
|
)
|
(28,460
|
)
|
||||||
|
||||||||||||
Loss before income taxes
|
(4,345
|
)
|
(3,373
|
)
|
(7,718
|
)
|
||||||
|
||||||||||||
Income tax expense
|
(143
|
)
|
-
|
(143
|
)
|
|||||||
|
||||||||||||
Loss from continuing operations
|
(4,488
|
)
|
(3,373
|
)
|
(7,861
|
)
|
||||||
Discontinued operations:
|
||||||||||||
Income from discontinued operations
|
2,538
|
-
|
2,538
|
|||||||||
Gain on sale of real estate from discontinued operations
|
9,767
|
-
|
9,767
|
|||||||||
Total discontinued operations
|
12,305
|
-
|
12,305
|
|||||||||
|
||||||||||||
Net Income
|
7,817
|
(3,373
|
)
|
4,444
|
||||||||
Net loss attributable to noncontrolling interest – real estate partnerships
|
1,789
|
-
|
1,789
|
|||||||||
Net income attributable to noncontrolling interests – unit holders
|
1
|
-
|
1
|
|||||||||
|
||||||||||||
Net income for Parkway Properties, Inc.
|
9,607
|
(3,373
|
)
|
6,234
|
||||||||
Change in market value of interest rate swaps
|
(1,371
|
)
|
(200
|
)
|
(1,571
|
)
|
||||||
Comprehensive income
|
$
|
8,236
|
$
|
(3,573
|
)
|
$
|
4,663
|
|||||
|
||||||||||||
Net income for Parkway Properties, Inc.
|
$
|
9,607
|
$
|
(3,373
|
)
|
$
|
6,264
|
|||||
Dividends on preferred stock
|
(8,132
|
)
|
-
|
(8,132
|
)
|
|||||||
Dividends on convertible preferred stock
|
(1,011
|
)
|
-
|
(1,011
|
)
|
|||||||
Net income (loss) attributable to common stockholders
|
$
|
464
|
$
|
(3,373
|
)
|
$
|
(2,909
|
)
|
||||
|
||||||||||||
Net income (loss) per common share attributable to Parkway Properties, Inc.:
|
||||||||||||
Basic and Diluted:
|
||||||||||||
Loss from continuing operations attributable to Parkway Properties, Inc.
|
$
|
(0.28
|
)
|
$
|
(0.41
|
)
|
||||||
Discontinued operations
|
0.30
|
0.30
|
||||||||||
Basic and diluted net income (loss) attributable to Parkway Properties, Inc.
|
$
|
0.02
|
$
|
(0.11
|
)
|
|||||||
|
||||||||||||
Weighted average shares outstanding:
|
||||||||||||
Basic
|
27,199
|
27,199
|
||||||||||
Diluted
|
27,199
|
27,199
|
||||||||||
|
||||||||||||
Amounts attributable to Parkway Properties, Inc. common stockholders:
|
||||||||||||
Loss from continuing operations attributable to Parkway Properties, Inc.
|
$
|
(7,622
|
)
|
$
|
(10,995
|
)
|
||||||
Discontinued operations
|
8,086
|
8,086
|
||||||||||
Net income (loss) attributable to common stockholders
|
$
|
464
|
$
|
(2,909
|
)
|
|
Pro Forma Adjustments
|
|||
Real estate investments:
|
||||
Building
|
$
|
76,771
|
||
Site improvements
|
20
|
|||
Tenant improvements
|
10,534
|
|||
Total real estate investments acquired
|
87,325
|
|||
Lease costs
|
3,329
|
|||
Intangible assets:
|
||||
Above-market leases
|
7,558
|
|||
Lease in place value
|
5,950
|
|||
Total assets acquired
|
$
|
104,162
|
||
|
||||
Liabilities assumed:
|
||||
Below market leases
|
$
|
2,663
|
||
Fair value of interest rate swap
|
1,787
|
|||
Mortgage notes payable
|
42,977
|
|||
Total liabilities assumed
|
47,427
|
|||
|
||||
Pro forma effect of net assets acquired
|
$
|
56,735
|
|
Pro Forma Adjustments
|
|||
Rents receivable and other assets:
|
||||
Escrows and other deposits
|
$
|
138
|
||
Capitalized loan costs, net
|
24
|
|||
|
$
|
162
|
||
Accounts payable and other liabilities:
|
||||
Prepaid rent
|
$
|
258
|
||
Security deposits payable
|
39
|
|||
|
$
|
297
|
|
Pro Forma Adjustments
|
|||
Rental property revenue
|
$
|
5,760
|
||
Other income
|
53
|
|||
Above market lease value amortization
|
(608
|
)
|
||
Income from office and parking properties
|
5,205
|
|||
|
||||
Property operating expenses
|
2,458
|
|||
Depreciation and amortization
|
4,338
|
|||
Total expenses
|
6,796
|
|||
Operating loss
|
(1,591
|
)
|
||
Interest expense
|
(3,751
|
)
|
||
Loss from continuing operations
|
(5,342
|
)
|
||
Net loss attributable to noncontrolling interests
|
-
|
|||
Loss from continuing operations attributable to common stockholders
|
$
|
(5,342
|
)
|
|
Estimated Useful Life
|
Building and garage
|
40 years
|
Building improvements
|
15 years
|
Tenant improvements
|
Remaining term of lease
|
Lease in place value
|
Remaining term of lease including expected renewals
|
Lease costs
|
Remaining term of lease
|
Above and below market leases
|
Remaining term of lease
|
|
Pro Forma Adjustments
|
|||
Rental property revenue
|
$
|
4,474
|
||
Other income
|
44
|
|||
Above market lease value amortization
|
(456
|
)
|
||
Income from office and parking properties
|
4,062
|
|||
|
||||
Property operating expenses
|
2,022
|
|||
Depreciation and amortization
|
3,254
|
|||
Total expenses
|
5,276
|
|||
Operating loss
|
(1,214
|
)
|
||
Interest expense
|
(2,159
|
)
|
||
Loss from continuing operations
|
(3,373
|
)
|
||
Net loss attributable to noncontrolling interests
|
-
|
|||
Loss from continuing operations attributable to common stockholders
|
$
|
(3,373
|
)
|
(1)
|
Registration Statement (Form S-3 No. 333-178003) of Parkway Properties, Inc.
|
(2)
|
Registration Statement (Form S-3 No. 333-178001) of Parkway Properties, Inc.
|
(3)
|
Registration Statement (Form S-3D No. 333-156051) of Parkway Properties, Inc.
|
(4)
|
Registration Statement (Form S-8 No. 333-100565) of Parkway Properties, Inc.
|
(5)
|
Registration Statement (Form S-8 No. 333-166922) of Parkway Properties, Inc.
|
(6)
|
Registration Statement (Form S-8 No. 333-134069) of Parkway Properties, Inc.
|
(7)
|
Registration Statement (Form S-8 No. 333-174300) of Parkway Properties, Inc.
|