-----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, V3uxnva0ZU1V4UltOHFbpCXuI8xBDdTBNI+yFTTmRNpW0xfZZx4F10GW3b5mYdAU 7zmNnPy3BFGKT/kTX532rA== 0000902561-98-000079.txt : 19980305 0000902561-98-000079.hdr.sgml : 19980305 ACCESSION NUMBER: 0000902561-98-000079 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980126 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980304 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SECURITY CAPITAL PACIFIC TRUST CENTRAL INDEX KEY: 0000080737 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 746056896 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-10272 FILM NUMBER: 98556906 BUSINESS ADDRESS: STREET 1: 7670 SOUTH CHESTER ST CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 3037085959 MAIL ADDRESS: STREET 1: 7670 SOUTH CHESTER ST CITY: ENGLEWOOD STATE: CO ZIP: 80112 FORMER COMPANY: FORMER CONFORMED NAME: PROPERTY TRUST OF AMERICA DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: EL PASO REAL ESTATE INVESTMENT TRUST DATE OF NAME CHANGE: 19700108 8-K 1 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) January 26, 1998 -------------------- SECURITY CAPITAL PACIFIC TRUST (Exact Name of Registrant as Specified in its Charter) Maryland (State or Other Jurisdiction of Incorporation) 1-10272 (Commission File Number) 74-6056896 (I.R.S. Employer Identification No.) 7670 South Chester Street, Englewood, Colorado 80112 (Address of Principal Executive Offices) (Zip Code) (303) 708-5959 (Registrant's Telephone Number, Including Area Code) Not Applicable (Former Name or Former Address, if Changed Since Last Report) Item 5. Other Events. On January 26, 1998, Security Capital Pacific Trust ("PTR") reported Funds from Operations ("FFO") attributable to common shares of $39.4 million, or $0.43 per common share, for the quarter ended December 31, 1997. This represents a 13.2% increase in FFO per share, compared with $28.7 million, or $0.38 per common share, for the same quarter of 1996. A copy of the press release describing such increase in FFO is filed as an exhibit to this report and is hereby incorporated herein by reference. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits. Exhibit 99.1. 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. SECURITY CAPITAL PACIFIC TRUST By: /s/ Jeffrey A. Klopf ------------------------- Jeffrey A. Klopf Title: Date: March 3, 1998 INDEX TO EXHIBITS Exhibit Sequential No. Document Description Page No. ------- -------------------- ---------- 99.1 Press release dated January 26, 1998. EX-99.1 2 PRESS RELEASE Exhibit 99.1 Security Capital Pacific Trust (NYSE: PTR) reported Funds from Operations (FFO) attributable to common shares of $39.4 million, or $0.43 per common share, for the quarter ended December 31, 1997. This represents a 13.2% increase in FFO per share, compared with $28.7 million, or $0.38 per common share, for the same quarter of 1996. PTR's development communities generated approximately 55% of the increase in FFO, and 18% was produced by the strong internal growth of the company's same-store operating communities. PTR also achieved very solid growth during the year ended December 31, 1997, reporting FFO attributable to common shares of $131.6 million, or $1.61 per common share on revenues of $354.4 million for the year. This represents an 11.8% increase in FFO per share, compared with FFO of $105.4 million, or $1.44 per common share in 1996. The FFO results reported above are calculated consistent with the methodology used in prior periods. "Our fourth quarter results were very strong and reflect the outstanding performance of our development communities, together with continually improving internal growth from our operating communities," said R. Scot Sellers, president and chief executive officer. PTR achieved growth of 4.27% in revenues and 4.18% in net operating income (NOI) for its same-store communities during the quarter. "This is the fourth consecutive quarter in which PTR's revenue growth has increased, which is a direct result of our extensive redeployment of capital to markets with high barriers to entry," he said. Development Pipeline is a Powerful Component of Long-Term Growth Mr. Sellers noted that PTR's West Coast development pipeline positions the company for significant growth in 1998 and beyond. PTR owns or controls land for the development of $943.0 million of new communities in its West Coast markets that are either under construction or in planning. "Our early entry into these markets allowed us to control very well-located sites at prices that in many cases are less than 60% of current land values," said Mr. Sellers. "This will allow us to compete and stabilize more than $200 million in new development communities annually at very attractive yields, during each of the next four years. These new development communities will be a powerful component of our future growth in FFO per share," he said. During the quarter, PTR commenced construction on more than $131.9 million of new communities, including two communities in the San Francisco Bay area which represent a total expected investment of $69.9 million. PTR will also start an additional $114.5 million of new communities in the San Francisco Bay area and San Diego during the first quarter of 1998. "These communities are exceptionally well-located in dynamic growth markets with high barriers to entry, and should have a very positive impact on our future performance," said Mr. Sellers. Well Positioned for Growth in 1998 "We believe PTR is very well positioned for solid growth in 1998," said Mr. Sellers. The company expects to start a total of over $300 million in new development communities in 1998, in markets and submarkets with high barriers to entry. "These developments are expected to contribute substantially to our growth in FFO going forward," he said. "In addition, the strength of our markets should result in very consistent revenue growth throughout 1998, due to the limited new competition and continuing strong demand fundamentals." PTR is the preeminent real estate operating company focusing on the development, acquisition, operation and long-term ownership of multifamily communities in the growing markets of the western United States. PTR's primary objective is generating long-term, sustainable growth in per share cash flow. As of December 31, 1997, PTR's portfolio of garden-style multifamily communities included 43,465 operating units, 5,545 units under construction and an estimated 10,558 units in planning. In addition to historical information, this press release contains forward-looking statements under the federal securities law. These statements are based on current expectations, estimates and projections -1- about the industry and markets in which PTR operates, management's beliefs and assumptions made by management. Forward-looking statements are not guarantees of future performance and involve certain credit risks and uncertainties which are difficult to predict. Actual operating results may be affected by changes in national and local economic conditions, competitive market conditions, weather, obtaining governmental approvals and meeting development schedules, and therefore, may differ materially from what is expressed or forecasted in this press release.
SECURITY CAPITAL PACIFIC TRUST Fourth Quarter 1997 Financial Highlights In thousands, except per share amounts and percentages Three Months Ended Twelve Months Ended December 31, December 31, % % 1997 1996 Change 1997 1996 Change ---- ---- ------ ---- ---- ------ Operating Performance (A) Rental Revenues $87,938 $79,924 10.03% $335,060 $296,679 12.94% Net Operating Income $56,950 $49,260 15.61% $212,009 $180,630 17.37% Funds From Operations Attributable to Common Shares $39,371 $28,737 37.00% $131,621 $105,422 24.85% Funds From Operations per Common Share (Primary and Basic) (B) $0.43 $0.38 13.16% $1.61 $1.44 11.81% Cash Distributions per Common Share (C) $0.325 $0.310 4.84% $1.30 $1.24 4.84% As of December 31, Financial Position 1997 1996 % Change ---- ---- --------- Assets Real Estate Investments Before Depreciation $2,604,919 $2,153,363 20.97% Total Assets $2,805,686 $2,282,432 22.93% Book Capitalization Total Long-Term Debt $895,652 $797,188 12.35% Total Debt $1,127,152 $907,388 24.22% Total Long Term Undepreciated Book Capitalization $2,565,806 $2,162,270 18.66% Total Undepreciated Book Capitalization $2,797,306 $2,272,470 23.10% Total Long-Term Debt/Total Long Term Undepreciated Book Capitalization 34.91% 36.87% (5.32%) Total Debt/Total Undepreciated Book Capitalization 40.29% 39.93% 0.90% -2- 1997 1996 % Change ---- ---- --------- Market Capitalization Total Common Shares Outstanding 92,634 75,511 22.68% Share Price $24.375 $22.875 6.56% Market Capitalization of Common Equity $2,257,954 $1,727,314 30.72% Total Series A Convertible Preferred Shares Outstanding 5,408 6,495 (16.74%) Share Price $32.750 $30.625 6.94% Market Capitalization of Series A Convertible Preferred Shares $177,112 $198,909 (10.95%) Total Series B Cumulative Redeemable Preferred Shares Outstanding 4,200 4,200 0.00% Share Price $25.813 $25.625 0.73% Market Capitalization of Series B Cumulative Redeemable Preferred Shares $108,415 $107,625 0.73% Total Equity Market Capitalization $2,543,481 $2,033,848 25.06% NOTES (A) Operating Performance: Except for distributions, 1996 information reflects pro forma data assuming the spin-off of PTR's Homestead Village extended-stay lodging assets ("Homestead Assets") to a newly formed company, Homestead Village Incorporated ("Homestead") as of January 1, 1996. Distributions and all 1997 information reflect actual amounts. (B) PTR's FFO per Common Share calculated under SFAS No. 128, "Earnings Per Share" for the "basic" computation is as presented above, which is equivalent to the "primary" computation under APB 15. FFO per Common Share on a "diluted" basis is as follows: Three Months Ended Twelve Months Ended December 31, December 31, ------------------ -------------------- % % 1997 1996 Change 1997 1996 Change ---- ---- ------ ---- ---- ------ FFO Attributable to Common Shares $39,371 $28,737 $131,621 $105,422 Series A Preferred Share dividends 2,396 2,849 9,934 14,717 Adjusted FFO attributable to Common Shares $41,767 $31,586 $141,555 $120,139 Weighted Average Common Shares Outstanding 92,524 75,147 81,870 73,057 Conversion of Series A Preferred Shares 7,326 9,110 8,322 11,197 Incremental options 107 86 38 86 Adjusted Weighted Average Common Shares 99,957 84,343 90,230 84,340 Diluted FFO per Common Share $0.42 $0.37 13.51% $1.57 $1.42 10.56% NOTES (C) In connection with PTR's acquisition of its REIT and property managers, PTR shareholders received 0.052646 Security Capital Group warrants for each PTR Common Share held. Based upon the closing price of the warrants on December 31, 1997, the value of the warrants was $0.28 per PTR common share. -4- Fourth Quarter 1997 Statements of Funds from Operations (FFO) (A) In thousands, except per share amounts Three Months Ended Twelve Months Ended December 31, December 31, 1997 1996 1997 1996 Revenues: Rental Revenues $87,938 $79,924 $335,060 $296,679 Interest Income on Homestead Notes 4,870 2,296 15,406 5,993 Other Income 1,891 576 3,915 2,160 $94,699 $82,796 $354,381 $304,832 Expenses: Rental Expenses $24,509 $19,800 $87,220 $78,364 Real Estate Taxes 6,327 6,843 27,386 24,999 Property Management Fees: Paid to Affiliate --- 3,747 7,642 11,610 Paid to Third Party 152 274 803 1,076 Interest 15,451 13,162 61,153 38,126 REIT Management Fee Paid to Affiliate --- 4,689 13,040 19,434 General and Administrative 2,725 302 4,036 1,076 Administrative Services Fee Paid to Affiliate 1,046 --- 1,274 --- Other 359 31 822 558 $ 50,569 $ 48,848 $ 203,376 $ 175,243 FFO $ 44,130 $ 33,948 $ 151,005 $ 129,589 Less Preferred Share Dividends 4,759 5,211 19,384 24,167 FFO Attributable to Common Shares $39,371 $28,737 $ 131,621 $105,422 Weighted Average Common Shares Outstanding 92,524 75,147 81,870 73,057 FFO Attributable to Common Shares per Common Share (Primary and Basic) (B) $0.43 $0.38 $1.61 $1.44
-4- Incremental Value per PTR Share Resulting From the Ownership of Homestead Convertible Mortgages During early 1998, PTR will complete the funding of $221.3 million of convertible mortgages on Homestead development properties. These mortgages are convertible into Homestead common shares at a price of $11.50 per share. PTR's ownership of the Homestead mortgages results in the following incremental value per PTR share: Homestead Common Share Price (at 12/31/97) $15.063 Conversion Price $11.500 Incremental Value per Homestead Common Share $ 3.563 Homestead Common Shares Upon Conversion (at full funding) 19,246 Total Incremental Value from Conversion $68,573 PTR Common Shares Outstanding (at 12/31/97) 92,634 Incremental Value per PTR Common Share $0.74 NOTES (A) The 1996 Statements of Funds From Operations were prepared on a pro forma basis assuming the spin-off of Homestead Assets as of January 1, 1996. The 1997 Statements of Funds From Operations reflect actual results. (B) See Previous Note B.
SECURITY CAPITAL PACIFIC TRUST Fourth Quarter 1997 Statement of Earnings (A) In thousands, except per share amounts Three Months Ended Twelve Months Ended December 31, December 31, ------------------------- ------------------------ 1997 1996 1997 1996 ---- ---- ---- ---- Revenues: Rental Revenues $87,938 $81,944 $335,060 $322,046 Interest Income on Homestead Notes 5,283 2,035 16,687 2,035 Other Income 1,891 576 3,915 2,165 $95,112 $84,555 $355,662 $326,246 Rental Expenses $24,509 $21,473 $87,220 $88,474 Real Estate Taxes 6,327 7,009 27,386 26,962 Property Management Fees: Paid to Affiliate --- 2,822 7,642 11,610 Paid to Third Party 152 273 803 1,076 Depreciation on Real Estate Investments 14,841 12,657 52,893 44,887 Interest 15,451 12,887 61,153 35,288 -5- Three Months Ended Twelve Months Ended December 31, December 31, ------------------------- -------------------------- 1997 1996 1997 1996 ---- ---- ---- ---- REIT Management Fee Paid to Affiliate --- 5,046 13,040 22,191 General and Administrative 2,725 307 4,036 1,077 Administrative Services Fee Paid to Affiliate 1,046 --- 1,274 --- Costs Incurred in Acquiring Management Companies from an Affiliate (B) --- --- 71,707 --- Other 1,859 91 3,822 592 $66,910 $62,565 $330,976 $232,157 Earnings from Operations $28,202 $21,990 $24,686 $94,089 Gain on Disposition of Investments, net 302 4,152 48,232 37,492 Net Earnings Before Extraordinary Item $28,504 $26,142 $72,918 $131,581 Less Extraordinary Item -- Loss on Early Extinguishment of Debt --- --- --- 870 Net Earnings $28,504 $26,142 $72,918 $130,711 Less Preferred Share Dividends 4,759 5,211 19,384 24,167 Net Earnings Attributable to Common Shares $23,745 $20,931 $53,534 $106,544 Weighted Average Common Shares Outstanding (Primary and Basic) 92,524 75,147 81,870 73,057 Weighted Average Common Shares Outstanding (Diluted) 99,957 84,343 90,230 84,340 Net Earnings Attributable to Common Shares per Common Share Primary and Basic $0.26 $0.28 $0.65 $1.46 Diluted $0.26 $0.28 $0.65 $1.44 Cash Distributions Paid Per Common Share $0.325 $0.310 $1.30 $1.24 Reconciliation of Funds From Operations (A) Net Earnings Attributable to Common Shares $23,745 $20,931 $53,534 $106,544 Depreciation on Real Estate Investments 14,841 12,657 52,893 44,887 Gain on Disposition of Investments (302) (4,152) (48,232) (37,492) -6- Three Months Ended Twelve Months Ended December 31, December 31, ------------------------- ------------------------ 1997 1996 1997 1996 ---- ---- ---- ---- Costs Incurred in Acquiring Management Companies from an Affiliate --- --- 71,707 --- Other, net 1,087 (190) 1,719 598 Funds from Operations Attributable to Common Shares $39,371 $29,246 $131,621 $114,537 Weighted Average Common Shares Outstanding 92,524 75,147 81,870 73,057 Funds From Operations per Common Share (Primary and Basic) $0.43 $0.39 $1.61 $1.57
NOTES (A) Statements of Earnings represent PTR's historical earnings and are reconciled to PTR's historical Funds From Operations. The 1996 statements do not give effect to pro forma calculations relating to the spin-off of Homestead Assets. (B) The difference between the merger purchase price and the estimated fair value of the net tangible assets acquired was recorded as a non-recurring charge. This one-time adjustment was recorded as an operating expense but it was not deducted for purposes of calculating Funds From Operations, due to the non-recurring and non-cash nature of the expense. -7-
SECURITY CAPITAL PACIFIC TRUST Fourth Quarter 1997 Balance Sheets In thousands December 31, December 31, 1997 1996 Assets Real Estate $2,604,919 $2,153,363 Less: Accumulated Depreciation 129,718 97,574 2,475,201 2,055,789 Investment in Homestead Convertible Mortgages 272,556 176,304 Other Mortgage Notes Receivable 12,682 13,525 Net Investments 2,760,439 2,245,618 Cash and Cash Equivalents 4,927 5,643 Accounts Receivable and Accrued Interest 11,544 4,157 Other Assets 28,776 27,014 Total Assets $2,805,686 $2,282,432 Liabilities and Shareholders' Equity Liabilities: Credit Facilities $231,500 $110,200 Long-term Debt 630,000 580,000 Mortgages Payable 265,652 217,188 Payables, Accrued Expenses and Other Liabilities 138,098 107,536 Total Liabilities 1,265,250 1,014,924 Shareholders' Equity: Series A Cumulative Convertible Preferred Shares (A) 135,210 162,374 Series B Cumulative Redeemable Perpetual Preferred Shares 105,000 105,000 Common Shares, $1 Par Value 92,634 75,511 Additional Paid-In Capital 1,251,503 918,434 Unrealized Holding Gain on Homestead Mortgages 83,794 74,923 Distributions in Excess of Net Earnings (127,705) (68,734) Total Shareholders' Equity 1,540,436 1,267,508 Total Liabilities and Shareholders' Equity $2,805,686 $2,282,432 -8- December 31, December 31, 1997 1996 Share Data: Total Common Shares Outstanding (A) 92,634 75,511 NOTES (A) During 1997, 1,086,574 Series A Cumulative Convertible Preferred Shares were converted into 1,463,448 Common Shares.
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