-----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, HymMjqxnENQOndr47MJg+X9yjAk4FhCA1r1t7oPt7umVANalJqLQB0lkl+WM+sE+ vU66ztxGPpsm4/LRvLKORQ== 0001029869-98-001270.txt : 19981116 0001029869-98-001270.hdr.sgml : 19981116 ACCESSION NUMBER: 0001029869-98-001270 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981112 ITEM INFORMATION: FILED AS OF DATE: 19981113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HRPT PROPERTIES TRUST CENTRAL INDEX KEY: 0000803649 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 046558834 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09317 FILM NUMBER: 98749013 BUSINESS ADDRESS: STREET 1: 400 CENTRE ST CITY: NEWTON STATE: MA ZIP: 02158 BUSINESS PHONE: 6173323990 MAIL ADDRESS: STREET 1: 400 CENTRE STREET CITY: NEWTON STATE: MA ZIP: 02158 FORMER COMPANY: FORMER CONFORMED NAME: HEALTH & RETIREMENT PROPERTIES TRUST DATE OF NAME CHANGE: 19940811 FORMER COMPANY: FORMER CONFORMED NAME: HEALTH & REHABILITATION PROPERTIES TRUST DATE OF NAME CHANGE: 19920703 8-K 1 HRPT PROPERTIES TRUST FORM 8-K 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): November 12, 1998 HRPT PROPERTIES TRUST (Exact name of registrant as specified in its charter) Maryland 1-9317 04-6558834 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 400 Centre Street, Newton, Massachusetts 02458 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 617-332-3990 THIS CURRENT REPORT CONTAINS FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTITIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE ANTICIPATED OR PROJECTED. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS WHICH SPEAK ONLY AS OF THE DATE HEREOF. THE REGISTRANT UNDERTAKES NO OBLIGATION TO PUBLISH REVISED FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (b) Unaudited Pro Forma Consolidated Financial Statements (set forth beginning on page F-1) HRPT PROPERTIES TRUST Unaudited Pro Forma Consolidated Financial Statements The following unaudited pro forma consolidated balance sheet at September 30, 1998 is intended to present the consolidated financial position of the Company as if the transactions described in the notes hereto were consummated at September 30, 1998. The following unaudited pro forma consolidated statements of income are intended to present the consolidated results of operations of the Company as if the transactions were consummated as of January 1, 1997. These unaudited pro forma consolidated financial statements should be read in conjunction with, and are qualified in their entirety by reference to, the separate consolidated financial statements of the Company for the year ended December 31, 1997, incorporated herein by reference to the Company's Current Report on Form 8-K dated February 27, 1998 and the Company's unaudited consolidated financial statements for the quarter ended September 30, 1998, incorporated herein by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998. These unaudited pro forma consolidated financial statements are not necessarily indicative of what the actual consolidated financial position or results of operations of the Company would have been as of the date or for the period indicated, nor do they represent the expected consolidated financial position or results of operations for any future period. Differences would result from, among other considerations, future changes in the Company's portfolio of investments, changes in interest rates, changes in the capital structure of the Company, changes in the occupancies of properties, changes in rent which the Company receives, delays in the acquisition of certain properties and changes in property level operating expenses. F-1 HRPT PROPERTIES TRUST Pro Forma Consolidated Balance Sheet September 30, 1998 (dollars in thousands, except per share amounts) (unaudited)
Recent Proposed Historical Acquisitions (A) Offering (B) Pro Forma ---------- --------------- ------------ --------- ASSETS Real estate properties, at cost: Land $ 347,408 $ 29,284 $ - $ 376,692 Buildings and improvements 2,439,848 101,455 - 2,541,303 ------------ --------- --------- ------------ 2,787,256 130,739 - 2,917,995 Less accumulated depreciation (153,137) - - (153,137) ------------ --------- --------- ------------ 2,634,119 130,739 - 2,764,858 Real estate mortgages and notes, net 69,369 - - 69,369 Investment in Hospitality Properties Trust 111,345 - - 111,345 Cash and cash equivalents 46,942 (37,107) - 9,835 Interest and rents receivable 29,557 - - 29,557 Other assets, net 34,764 (132) 2,500 37,132 ------------ --------- --------- ------------ $ 2,926,096 $ 93,500 $ 2,500 $ 3,022,096 ============ ========= ========= ============ LIABILITIES AND SHAREHOLDERS' EQUITY Bank notes payable $ 95,000 $ 93,500 $ (72,500) $ 116,000 Senior notes payable, net 659,402 - 75,000 734,402 Mortgage notes payable 25,399 - - 25,399 Convertible subordinated debentures 204,863 - - 204,863 Accounts payable and accrued expenses 34,780 - - 34,780 Deferred rents 34,696 - - 34,696 Security deposits 18,143 - - 18,143 Due to affiliates 15,245 - - 15,245 Shareholders' equity: Preferred shares of beneficial interest, $.01 par value; 50,000,000 shares authorized; none issued - - - - Common shares of beneficial interest, $.01 par value; 150,000,000 shares authorized and pro forma, 131,547,178 shares issued and outstanding and pro forma 1,315 - - 1,315 Additional paid-in capital 1,964,878 - - 1,964,878 Cumulative net income 525,602 - - 525,602 Dividends (653,227) - - (653,227) ------------ --------- --------- ------------ Total shareholders' equity 1,838,568 - - 1,838,568 ------------ --------- --------- ------------ $ 2,926,096 $ 93,500 $ 2,500 $ 3,022,096 ============ ========= ========= ============ - - - -
See accompanying notes. F-2 HRPT PROPERTIES TRUST Pro Forma Consolidated Statement of Income For the Nine Months Ended September 30, 1998 (amounts in thousands, except per share data) (unaudited)
1998 1998 First Quarter 1600 Market Second Quarter 1735 Market Historical Acquisitions (C) Street (D) Acquisitions (C) Street (E) ---------- --------------- ----------- ---------------- ----------- Revenues: Rental income $ 239,045 $ 2,455 $ 4,721 $ 10,184 $ 12,472 Interest and other income 13,158 - - - - --------- ---------- -------- ---------- -------- Total revenues 252,203 2,455 4,721 10,184 12,472 --------- ---------- -------- ---------- -------- Expenses: Operating expenses 51,535 338 1,915 2,965 4,098 Interest 45,788 1,028 1,869 3,962 6,641 Depreciation and amortization 43,093 479 650 1,619 2,784 General and administrative 12,354 104 145 361 525 --------- ---------- -------- ---------- -------- Total expenses 152,770 1,949 4,579 8,907 14,048 --------- ---------- -------- ---------- -------- Income (loss) before equity in earnings of Hospitality Properties Trust 99,433 506 142 1,277 (1,576) Equity in earnings of Hospitality Properties Trust 5,541 - - - - Gain on equity transaction of Hospitality Properties Trust 2,470 - - - - --------- ---------- -------- ---------- -------- Income (loss) before extraordinary item $ 107,444 $ 506 $ 142 $ 1,277 $ (1,576) ========= ========== ======== ========== ======== Weighted average shares outstanding 115,931 ========= Basic and diluted earnings per common share: Income before extraordinary item $ 0.93 ========= Third Quarter Recent Proposed Acquisitions (C) Acquisitions (C) Other (F) Offering (G) Pro Forma ---------------- ---------------- -------- ----------- --------- Revenues: Rental income $ 8,915 $ 12,077 $ - $ - $ 289,869 Interest and other income - - - - 13,158 ------- -------- -------- -------- --------- Total revenues 8,915 12,077 - - 303,027 ------- -------- -------- -------- --------- Expenses: Operating expenses 1,726 3,623 - - 66,200 Interest 3,630 3,681 (12,295) 1,247 55,551 Depreciation and amortization 1,666 1,903 - 125 52,319 General and administrative 370 491 - - 14,350 ------- -------- -------- -------- --------- Total expenses 7,392 9,698 (12,295) 1,372 188,420 ------- -------- -------- -------- --------- Income (loss) before equity in earnings of Hospitality Properties Trust 1,523 2,379 12,295 (1,372) 114,607 Equity in earnings of Hospitality Properties Trust - - - - 5,541 Gain on equity transaction of Hospitality Properties Trust - - - - 2,470 ------- -------- -------- -------- --------- Income (loss) before extraordinary item $ 1,523 $ 2,379 $ 12,295 $ (1,372) $ 122,618 ======= ======== ======== ======== ========= Weighted average shares outstanding 131,323 ========= Basic and diluted earnings per common share: Income before extraordinary item $ 0.93 $ 0.93 ======= =========
See accompanying notes. F-3 HRPT PROPERTIES TRUST Pro Forma Consolidated Statement of Income For the Year Ended December 31, 1997 (amounts in thousands, except per share data) (unaudited)
Second Quarter Third Quarter Historical GPI (H) CSMC (I) Acquisitions (J) Acquisitions (J) ---------- ------- -------- ---------------- ---------------- Revenues: Rental income $ 188,000 $ 11,959 $ 6,831 $ 2,948 $ 3,179 Interest and other income 20,863 (366) - - - --------- -------- ------- ------- ------- Total revenues 208,863 11,593 6,831 2,948 3,179 --------- -------- ------- ------- ------- Expenses: Operating expenses 26,765 2,053 1,910 - 954 Interest 36,766 (1,216) 3,232 1,087 1,463 Depreciation and amortization 39,330 4,156 1,119 627 501 General and administrative 11,670 2,105 249 139 111 --------- -------- ------- ------- ------- Total expenses 114,531 7,098 6,510 1,853 3,029 --------- -------- ------- ------- ------- Income (loss) before equity in earnings of Hospitality Properties Trust, gain on sale of properties and extraordinary item 94,332 4,495 321 1,095 150 Equity in earnings of Hospitality Properties Trust 8,590 - - - - Gain on equity transaction of Hospitality Properties Trust 9,282 - - - - --------- -------- ------- ------- ------- Income (loss) before gain on sale of properties and extraordinary item 112,204 4,495 321 1,095 150 Gain on sale of properties, net 2,898 - - - - --------- -------- ------- ------- ------- Income (loss) before extraordinary item $ 115,102 $ 4,495 $ 321 $ 1,095 $ 150 ========= ======== ======= ======= ======= Weighted average shares outstanding 92,168 ========= Basic and diluted earnings per common share: Income before extraordinary item $ 1.25 ========= West 34th Bridgepoint Fourth Quarter 1998 Street (K) Franklin Plaza (L) Square (M) Acquisitions (J) Acquisitions (N) ---------- ------------------ ----------- ---------------- ---------------- Revenues: Rental income $ 10,771 $ 9,614 $ 5,599 $ 8,461 $ 72,392 Interest and other income - - - - - -------- -------- ------- ------- -------- Total revenues 10,771 9,614 5,599 8,461 72,392 -------- -------- ------- ------- -------- Expenses: Operating expenses 3,641 4,904 2,162 2,634 17,645 Interest 2,876 2,486 3,216 4,338 26,293 Depreciation and amortization 1,869 1,334 1,175 1,269 12,410 General and administrative 415 296 262 283 2,849 -------- -------- ------- ------- -------- Total expenses 8,801 9,020 6,815 8,524 59,197 -------- -------- ------- ------- -------- Income (loss) before equity in earnings of Hospitality Properties Trust, gain on sale of properties and extraordinary item 1,970 594 (1,216) (63) 13,195 Equity in earnings of Hospitality Properties Trust - - - - - Gain on equity transaction of Hospitality Properties Trust - - - - - -------- -------- ------- ------- -------- Income (loss) before gain on sale of properties and extraordinary item 1,970 594 (1,216) (63) 13,195 Gain on sale of properties, net - - - - - -------- -------- ------- ------- -------- Income (loss) before extraordinary item $ 1,970 $ 594 $ (1,216) $ (63) $ 13,195 ======== ======== ======= ======= ======== Weighted average shares outstanding Basic and diluted earnings per common share: Income before extraordinary item 1600 Market 1735 Market Proposed Street (O) Street (P) Other (Q) Offering (R) Pro Forma ----------- ----------- --------- ------------ ---------- Revenues: Rental income $ 18,883 $ 29,836 $ - $ - $ 368,473 Interest and other income - - - 20,497 -------- -------- -------- -------- ---------- Total revenues 18,883 29,836 - - 388,970 -------- -------- -------- -------- ---------- Expenses: Operating expenses 7,659 10,276 - - 80,603 Interest 7,475 15,665 (33,625) 1,662 71,718 Depreciation and amortization 2,601 5,569 - 167 72,127 General and administrative 578 1,238 - - 20,195 -------- -------- -------- -------- ---------- Total expenses 18,313 32,748 (33,625) 1,829 244,643 -------- -------- -------- -------- ---------- Income (loss) before equity in earnings of Hospitality Properties Trust, gain on sale of properties and extraordinary item 570 (2,912) 33,625 (1,829) 144,327 Equity in earnings of Hospitality Properties Trust - - - - 8,590 Gain on equity transaction of Hospitality Properties Trust - - - - 9,282 -------- -------- -------- -------- ---------- Income (loss) before gain on sale of properties and extraordinary item 570 (2,912) 33,625 (1,829) 162,199 Gain on sale of properties, net - - - - 2,898 -------- -------- -------- -------- ---------- Income (loss) before extraordinary item $ 570 $ (2,912) $ 33,625 $ (1,829) $ 165,097 ======== ======== ======== ======== ========== Weighted average shares outstanding 130,725 ========== Basic and diluted earnings per common share: Income before extraordinary item $ 1.26 ==========
See accompanying notes F-4 HRPT Properties Trust Notes To Unaudited Pro Forma Consolidated Financial Statements (dollars in thousands) Consolidated Balance Sheet Adjustments A. Represents the Company's acquisitions in October 1998 of developable land and five commercial office properties located in Texas and a commercial office property located in Maryland (the "Recent Acquisitions"). These acquisitions were funded with available cash and by drawings under the Company's revolving line of credit. B. Represents the proposed debt offering of $75,000 8.5% senior notes due 2013 (the "Proposed Offering"). Net proceeds from the Proposed Offering will be used to repay amounts outstanding under the Company's revolving line of credit. Consolidated Statement of Income Adjustments for the Nine Months Ended September 30, 1998 C. Represents the increases in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from a) the Recent Acquisitions, b) the Company's acquisitions during January 1998, February 1998 and March 1998 of two medical office properties and three commercial office properties located in Pennsylvania, two commercial office properties and two medical office properties located in Texas, a medical office property located in Massachusetts, a commercial office property located in Maryland, three commercial office properties located in Minnesota and three medical office properties and a commercial office property located in Florida (collectively, "1998 First Quarter Acquisitions"), c) the Company's acquisitions during April 1998, May 1998 and June 1998 of three commercial office properties located in Massachusetts, one medical office property located in California, three commercial office properties located in New Jersey, one commercial office property located in Connecticut, one commercial office property located in Pennsylvania, one commercial office property located in Ohio, one commercial office property located in Washington, D.C., and one commercial office property located in New York (collectively, "1998 Second Quarter Acquisitions") and d) the Company's acquisitions during July 1998, August 1998, and September 1998 of a medical office property located in Texas, a commercial office property located in Delaware, a commercial office property located in New Jersey, a commercial office property located in Virginia, a commercial office property located in Tennessee and a commercial office property located in Pennsylvania (collectively, "1998 Third Quarter Acquisitions"), and the increase in interest expense from the use of the Company's revolving line of credit to fund these acquisitions. D. Represents the increase in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from the Company's acquisition on March 30, 1998 of a commercial office property located at 1600 Market Street in Philadelphia, Pennsylvania ("1600 Market Street") and the increase in interest expense from the use of the Company's revolving line of credit to fund this acquisition. E. Represents the increase in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from the Company's acquisition on May 22, 1998 of a mortgage secured by, and subsequent acquisition on June 30, 1998 of a controlling interest in, a commercial office property located in Philadelphia, Pennsylvania ("1735 Market Street"), as well as the increase in interest expense from the use of the Company's revolving line of credit to fund this acquisition. F. Represents the net decrease in interest expense relating to the issuance of additional Remarketed Reset Notes and 6.7% Senior Notes due 2005 in February 1998 and the issuance of 6 7/8% Senior Notes due 2002 in August 1998 (collectively the "1998 Notes") and the issuance of 31,977,575 common shares in February 1998, March 1998 and June 1998. The proceeds of these offerings were used to repay amounts then outstanding on the Company's revolving credit facility. G. Reflects the increase in interest and amortization expense as a result of the Proposed Offering and the application of the net proceeds to the Company's revolving line of credit. F-5 HRPT PROPERTIES TRUST Notes To Unaudited Pro Forma Consolidated Financial Statements (dollars in thousands) Consolidated Statement of Income Adjustments for the Year Ended December 31, 1997 H. Represents the increase in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from the Company's acquisition of the government office properties ("Government Office Properties") from Government Property Investors, Inc ("GPI"). Also reflects the decrease in interest expense arising from the Company's issuance of common shares in a March 1997 offering, the proceeds of which were used, in part, to repay amounts then outstanding under the Company's revolving line of credit, net of an increase in interest expense related to the Company's assumption of certain debt in connection with the acquisition of the Government Office Properties. I. Represents the increase in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from the Company's acquisition of two medical office properties and two parking structures located in Los Angeles, California ("CSMC"), as well as the increase in interest expense due to the use of the Company's revolving line of credit to fund this acquisition. J. Represents the increase in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from the Company's acquisition of a) a 200 unit retirement housing property located in Spokane, Washington and 20 medical office clinics and ancillary structures located in Massachusetts during the second quarter ("Second Quarter Acquisitions"), b) three medical and two commercial office buildings located in Pennsylvania during the third quarter ("Third Quarter Acquisitions") and c) a medical office property located in Colorado, a medical office property located in Maryland, a medical office property located in Rhode Island, three medical office properties located in California, and a medical office property located in Washington, D.C. during the fourth quarter ("Fourth Quarter Acquisitions"), as well as the increase in interest expense due to the use of the Company's revolving line of credit to fund these acquisitions. K. Represents the increase in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from the Company's acquisition of West 34th Street in New York City ("West 34th Street"), as well as the increase in interest expense due to the use of the Company's revolving line of credit to fund the acquisition. L. Represents the increase in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from the Company's acquisition of Franklin Plaza in Philadelphia, Pennsylvania ("Franklin Plaza"), as well as the increase in interest expense due to the use of the Company's revolving line of credit to fund the acquisition. M. Represents the increase in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from the Company's acquisition of Bridgepoint Square, Austin, Texas ("Bridgepoint Square"). Bridgepoint Square consists of five properties, of which one property was under construction at September 30, 1997 and one property was completed in July 1997. Also represents the increase in interest expense due to the use of the Company's revolving line of credit to fund the acquisition. N. Represents the increase in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from the Company's Recent Acquisitions, the 1998 First Quarter Acquisitions, the 1998 Second Quarter Acquisitions and the 1998 Third Quarter Acquisitions (collectively, "1998 Acquisitions"), as well as the increase in interest expense due to the use of the Company's revolving line of credit to fund these acquisitions. O. Represents the increase in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from the Company's acquisition of 1600 Market Street, as well as the increase in interest expense due to the use of the Company's revolving line of credit to fund the acquisition. P. Represents the increase in rental income, depreciation and amortization and general and administrative expenses arising from the Company's acquisition of 1735 Market Street, as well as the increase in interest expense due to the use of the Company's revolving line of credit to fund the acquisition. F-6 HRPT PROPERTIES TRUST Notes To Unaudited Pro Forma Consolidated Financial Statements (dollars in thousands) Consolidated Statement of Income Adjustments for the Year Ended December 31, 1997 - continued Q. Represents the net decrease in interest expense relating to the issuance of Remarketed Reset Notes in July 1997, the issuance of 6.75% Senior Notes due 2002 in December 1997, the issuance of the 1998 Notes, the prepayment of Floating Rate Senior Notes in July 1997, and the issuance of common shares in February 1998, March 1998 and June 1998. R. Reflects the increase in interest and amortization expense as a result of the Company's Proposed Offering and the application of net proceeds to the Company's revolving line of credit. S. The Company has proposed acquisitions, which include a commercial office property located in California and two commercial office properties located in Texas (the "Proposed Acquisitions"). Upon the consummation of the Proposed Acquisitions, adjusted pro forma total assets, total real estate investments, total borrowings and shareholders' equity at September 30, 1998 would be, $3,032,596, $2,938,585, $1,091,164 and $1,838,568, respectively. For the nine months ended September 30, 1998, adjusted pro forma total revenues, total expenses and net income before extraordinary item would be $305,585, $190,175 and $123,421, respectively. For the year ended December 31, 1997, adjusted pro forma total revenues, total expenses and net income before extraordinary item would be $400,600, $251,266 and $170,104, respectively. The Proposed Acquisitions are subject to various closing conditions customary in real estate transactions, including, but not limited to, due diligence and final documentation. No assurances can be given as to when or if these Proposed Acquisitions will be consummated. F-7 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has dully caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HRPT PROPERTIES TRUST By: /s/ Ajay Saini ------------------------------------------------- Ajay Saini, Treasurer and Chief Financial Officer Date: November 12, 1998 -----END PRIVACY-ENHANCED MESSAGE-----