-----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, OXD7LceQSo0eTX58QpidkBRS3WfIC4QrOa5NPNj8qkxjgoBqj+HWX9xkkTyYRmZS 89TWYGvNXgdy77S+0BCt+w== 0000950131-97-001181.txt : 19970222 0000950131-97-001181.hdr.sgml : 19970222 ACCESSION NUMBER: 0000950131-97-001181 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970220 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970220 SROS: NONE 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: 1934 Act SEC FILE NUMBER: 001-10272 FILM NUMBER: 97540025 BUSINESS ADDRESS: STREET 1: 7777 MARKET CENTER AVE CITY: EL PASO STATE: TX ZIP: 79912 BUSINESS PHONE: 9158773900 MAIL ADDRESS: STREET 1: 7777 MARKET CENTER AVE CITY: EL PASO STATE: TX ZIP: 79912 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 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): FEBRUARY 20, 1997 SECURITY CAPITAL PACIFIC TRUST (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MARYLAND 1-10272 74-6056896 (STATE OR OTHER (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER JURISDICTION OF IDENTIFICATION NO.) INCORPORATION) 7777 MARKET CENTER AVENUE, 79912 EL PASO, TEXAS (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (915) 877-3900 NOT APPLICABLE (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ITEM 5. OTHER EVENTS ACQUISITIONS AND PROBABLE ACQUISITIONS: The following acquisitions of multifamily communities, including three communities under contract, were or will be made by Security Capital Pacific Trust (PTR) from unrelated parties. PTR acquired, or will acquire, these communities because PTR and its REIT manager, Security Capital Pacific Incorporated, believe that multifamily community investments in the western United States present excellent long term opportunities for consistent rental increases, high occupancies and value appreciation. PTR acquired Telegraph Hill apartments on October 15 1996 from a limited partnership. Telegraph Hill is a 200 unit, moderate income complex located in Albuquerque, New Mexico. PTR acquired this community for approximately $8.1 million. At date of purchase, the community's occupancy rate was 91.0%. PTR acquired Villa Marseille apartments on November 13, 1996 from a general partnership. Villa Marseille is a 192 unit, middle income complex located in Aliso Viejo (Orange County), California. PTR acquired this community for approximately $13.1 million. At date of purchase, the community's occupancy rate was 98.4%. PTR acquired The Palisades apartments on November 27, 1996 from a corporation. The Palisades is a 296 unit, upper middle income complex located in La Jolla (San Diego County), California. PTR acquired this community for approximately $31.6 million. At date of purchase, the community's occupancy rate was 96.6%. PTR acquired Clubhouse apartments on December 19, 1996 from a limited partnership. Clubhouse is a 194 unit, moderate income complex located in Seattle, Washington. PTR acquired this community for approximately $8.0 million and assumed a mortgage note payable in the amount of $5.8 million. At date of purchase, the community's occupancy rate was 96.4%. PTR acquired Harborside apartments on December 31, 1996 from a limited partnership. Harborside is a 148 unit, upper middle income complex located in San Francisco, California. PTR acquired this community for approximately $21.4 million. At date of purchase, the community's occupancy rate was 97.3%. PTR acquired Newport Crossing apartments on January 10, 1997 from a corporation. Newport Crossing is a 192 unit, middle income complex located in Seattle, Washington. PTR acquired this community for approximately $11.3 million. At date of purchase, the community's occupancy rate was 94.3%. PTR acquired Reflections apartments on January 27, 1997 from a general partnership. Reflections is a 496 unit, middle income complex located in San Francisco, California. PTR acquired this community for approximately $52.1 million. At date of purchase, the community's occupancy rate was 92.7%. PTR has entered into a contract with a general partnership to purchase Marina Lakes apartments, scheduled to close in February, 1997. PTR's earnest money has become non-refundable and acquisition of this community is likely. However, there can be no assurance that the community will be acquired. Marina Lakes consists of two moderate income complexes, Marina Lakes East which consists of 220 units and Marina Lakes West which consists of 248 units. Both are located in Oakland, California and on January 9, 1997 were 98% occupied on a combined basis. The anticipated aggregate cost of the property is approximately $39.5 million which, for purposes of this report, has been prorated between the two communities based on the number of units ($18.6 million for Marina Lakes East and $20.9 million for Marina Lakes West). PTR anticipates assuming a mortgage note payable in the amount of $13.6 million in connection with Marina Lakes East. PTR has entered into a contract with a corporation to purchase Folsom Ranch apartments, scheduled to close in March, 1997. PTR's earnest money has become non-refundable and acquisition of this community is likely. However, there can be no assurance that the community will be acquired. Folsom Ranch is a 344 unit middle income complex located in Sacramento, California and on December 12, 1996 was 98.0% occupied. The anticipated cost of the community is approximately $23.2 million. 2 PTR has entered into a contract with a corporation to purchase River Meadows apartments, scheduled to close in March, 1997. PTR's earnest money has become non-refundable and acquisition of this community is likely. However, there can be no assurance that the community will be acquired. River Meadows is a 152 unit middle income complex located in Huntington Beach (Orange County), California and on January 16, 1997 was 96.0% occupied. The anticipated cost of the community is approximately $13.9 million. PTR anticipates assuming a mortgage note payable in the amount of $10 million in connection with the acquisition. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBIT (a) Financial Statements: Combined Statements of Revenues and Certain Expenses for Certain Multifamily Communities with Independent Auditors' Report thereon. (b) Pro Forma Financial Information: Pro Forma Balance Sheet as of September 30, 1996 (unaudited) Pro Forma Statement of Earnings for the year ended December 31, 1995 (unaudited) Pro Forma Statement of Earnings for the nine months ended September 30, 1996 (unaudited) (c) Exhibit: Exhibit 23.1--Independent Auditors' Consent 3 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 THEREUNTO DULY AUTHORIZED. Security Capital Pacific Trust /s/ Bryan Flanagan _____________________________________ Bryan Flanagan Senior Vice President and Principal Financial Officer /s/ Ash Atwood _____________________________________ Ash Atwood Vice President of Financial Reporting and Duly Authorized Officer Date: February 20, 1997 4 INDEPENDENT AUDITORS' REPORT The Board of Trustees and Shareholders Security Capital Pacific Trust: We have audited the accompanying Combined Statement of Revenues and Certain Expenses for Certain Multifamily Communities (the Combined Statement) described in note 1 for the year ended December 31, 1995. This Combined Statement is the responsibility of management. Our responsibility is to express an opinion on the Combined Statement 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 Combined Statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Combined Statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Combined Statement. We believe that our audit provides a reasonable basis for our opinion. The accompanying Combined Statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and for inclusion in Form 8-K to be filed by Security Capital Pacific Trust as described in note 2. The presentation is not intended to be a complete presentation of the Communities' revenues and expenses. In our opinion, the Combined Statement referred to above presents fairly, in all material respects, the combined revenues and certain expenses as described in note 2 for certain multifamily Communities for the year ended December 31, 1995, in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Chicago, Illinois February 7, 1997 5 SECURITY CAPITAL PACIFIC TRUST COMBINED STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR CERTAIN MULTIFAMILY COMMUNITIES (NOTE 1) YEAR ENDED DECEMBER 31, 1995 AND THE PERIOD FROM JANUARY 1, 1996 THROUGH THE EARLIER OF SEPTEMBER 30, 1996 OR DATE OF ACQUISITION (IN THOUSANDS)
PERIOD FROM JANUARY 1, 1996 THROUGH THE EARLIER OF SEPTEMBER 30, 1996 OR DATE OF ACQUISITION 1995 (UNAUDITED) ------- --------------- Revenues: Rental income......................................... $23,758 17,172 Other real estate income.............................. 536 416 ------- ------ 24,294 17,588 ------- ------ Certain expenses: Salaries and benefits................................. 1,944 1,312 Utilities............................................. 1,600 1,056 Repairs and maintenance............................... 1,572 1,162 Management fees (note 4).............................. 919 664 Real estate taxes..................................... 2,228 1,573 Advertising and promotion............................. 323 248 Insurance (note 4).................................... 571 412 Interest expense on debt assumed (note 5)............. 3,107 2,153 Other................................................. 521 275 ------- ------ 12,785 8,855 ------- ------ Revenues in excess of certain expenses.............. $11,509 8,733 ======= ======
The accompanying notes are an integral part of the combined statement of revenues and certain expenses for certain multifamily communities. 6 SECURITY CAPITAL PACIFIC TRUST NOTES TO COMBINED STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR CERTAIN MULTIFAMILY COMMUNITIES YEAR ENDED DECEMBER 31, 1995 AND THE PERIOD FROM JANUARY 1, 1996 THROUGH THE EARLIER OF SEPTEMBER 30, 1996 OR DATE OF ACQUISITION (IN THOUSANDS) (1) OPERATING PROPERTIES The Combined Statement of Revenues and Certain Expenses for Certain Multifamily Communities (the Combined Statement) for the year ended December 31, 1995 and the period from January 1, 1996 through the earlier of September 30, 1996 or date of acquisition, relates to the operations of the following communities which have been or are expected to be acquired by Security Capital Pacific Trust (PTR) from unaffiliated parties:
ACQUISITION MULTIFAMILY COMMUNITY LOCATION DATE PURCHASE PRICE --------------------- -------- ----------- -------------- Woodsong................ San Bernardino, California 08-28-96 $ 12,300 El Dorado............... San Diego, California 08-30-96 29,350 Telegraph Hill.......... Albuquerque, New Mexico 10-15-96 8,100 Villa Marseille......... Aliso Viejo, California 11-13-96 13,125 Palisades............... La Jolla, California 11-27-96 31,600 Clubhouse............... Seattle, Washington 12-19-96 8,030 Harborside.............. San Francisco, California 12-31-96 21,385 Newport Crossing........ Seattle, Washington 01-10-97 11,290 Reflections............. San Francisco, California 01-27-97 52,100 Marina Lakes East....... Oakland, California under contract 18,600 -------- $205,880 ========
(2) BASIS OF PRESENTATION The accompanying Combined Statement for Certain Multifamily Communities has been prepared on the accrual basis of accounting. The Combined Statement for Certain Multifamily Communities has been prepared for the purpose of complying with the rules and regulation of the Securities and Exchange Commission and for inclusion in Form 8-K to be filed by PTR. The Combined Statement for Certain Multifamily Communities is not intended to be a complete presentation of combined revenues and expenses of the communities above for the year ended December 31, 1995 and the period from January 1, 1996 through the earlier of September 30, 1996 or date of acquisition. The Combined Statement for Certain Multifamily Communities excludes certain amounts which would not be comparable to the proposed future operations of the communities as follows: (a) depreciation of the building and improvements; (b) interest expense related to debt not assumed; (c) interest income; (d) income taxes; and (e) other income and expense items unique to the prior owners. 7 SECURITY CAPITAL PACIFIC TRUST NOTES TO COMBINED STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR CERTAIN MULTIFAMILY COMMUNITIES--(CONTINUED) (3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition Rental income from leasing activities consist of lease payments earned from tenants under lease agreements with terms of one year or less. Capitalization Policy Ordinary repairs and maintenance are expensed as incurred; major replacements and betterments are capitalized. Advertising and Promotion The cost of advertising and promotion is expensed as incurred. Use of Estimates The preparation of the Combined Statement for Certain Multifamily Communities in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the Combined Statement for Certain Multifamily Communities and accompanying notes. Actual results could differ from those estimates. Unaudited Interim Combined Statement The Combined Statement for Certain Multifamily Communities for the period from January 1, 1996 through the earlier of September 30, 1996 or date of acquisition is unaudited. In the opinion of management, all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the Combined Statement for Certain Multifamily Communities for the interim period have been included. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year for the communities. (4) RELATED PARTY TRANSACTIONS Approximately $640 and $382 (unaudited) was accrued and paid in management fees to affiliates of prior owners in 1995 and 1996, respectively. Approximately $236 and $191 (unaudited) was paid in insurance expense to prior owners in 1995 and 1996, respectively. (5) DEBT ASSUMPTION PTR assumed outstanding debt of approximately $5,831 in connection with the acquisition of Clubhouse. The debt consists of an 8.75% fixed rate mortgage note which requires monthly principal and interest payments of $51 through December 31, 1999 when all remaining principal and interest will be due and payable. PTR assumed outstanding debt of approximately $16,758 in connection with the acquisition of El Dorado. The debt consists of a 7.53% fixed rate mortgage note which requires monthly principal and interest payments of $119 through October 1, 2002 when all remaining principal and interest will be due and payable. 8 SECURITY CAPITAL PACIFIC TRUST NOTES TO COMBINED STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR CERTAIN MULTIFAMILY COMMUNITIES--(CONCLUDED) PTR anticipates assuming outstanding debt of approximately $13,600 in connection with the acquisition of Marina Lakes East. The debt consists of a 9.125% fixed rate mortgage note which requires monthly interest-only payments through December 31, 1995. Beginning January 1, 1996, monthly principal and interest payments of .847% of the unpaid principal balance are required until August 1, 2000 when all remaining principal and interest will be due and payable. 9 SECURITY CAPITAL PACIFIC TRUST PRO FORMA FINANCIAL STATEMENTS (UNAUDITED) The following unaudited pro forma financial statements for Security Capital Pacific Trust (PTR) reflect the acquisition by PTR of the communities disclosed in this Form 8-K, Item 5 and those reported in Forms 8-K, Item 5 dated August 1, 1996 and October 14, 1996 (the "1996 Forms 8-K"). The proforma financial statements have been prepared based upon certain pro forma adjustments to the historical financial statements of PTR. The accompanying unaudited pro forma balance sheet as of September 30, 1996 has been prepared as if the operating communities acquired, or under contract to be acquired, subsequent to September 30, 1996 had been acquired as of the balance sheet date. The accompanying unaudited proforma statements of earnings for the year ended December 31, 1995 and for the nine months ended September 30, 1996 have been prepared as if (i) the operating community acquisitions, including three operating communities under contract, reported in this Form 8-K, Item 5 and (ii) the operating community acquisitions reported in Forms 8-K mentioned above had occurred as of January 1, 1995. The unaudited pro forma financial statements do not purport to be indicative of the results which would actually have been obtained had the transactions described above been completed on the dates indicated or which may be obtained in the future. The unaudited pro forma financial statements should be read in conjunction with the combined statement of revenues and certain expenses for certain multifamily communities included herein and the financial statements of PTR. 10 SECURITY CAPITAL PACIFIC TRUST PRO FORMA BALANCE SHEET SEPTEMBER 30, 1996 (IN THOUSANDS, EXCEPT SHARE DATA) (UNAUDITED)
PRO FORMA ASSETS HISTORICAL ADJUSTMENTS PRO FORMA ------ ---------- ----------- ---------- Real Estate............................... $2,257,560 $240,105(a) $2,497,665 Less accumulated depreciation............. 102,496 -- 102,496 ---------- -------- ---------- 2,155,064 240,105 2,395,169 Mortgage notes receivable................. 14,394 -- 14,394 ---------- -------- ---------- Total investments..................... 2,169,458 240,105 2,409,563 Cash and cash equivalents--unrestricted... 7,172 -- 7,172 Restricted tax deferred exchange proceeds. 13,503 -- 13,503 Accounts receivable....................... 4,083 -- 4,083 Other assets.............................. 28,783 -- 28,783 ---------- -------- ---------- Total assets.......................... $2,222,999 $240,105 $2,463,104 ========== ======== ========== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ Liabilities: Line of credit.......................... $ 171,350 $201,985(b) $ 373,335 Long term debt.......................... 450,000 -- 450,000 Mortgages payable....................... 219,460 38,120(c) 257,580 Accounts payable........................ 30,212 -- 30,212 Accrued expenses and other liabilities.. 35,585 -- 35,585 ---------- -------- ---------- Total liabilities..................... 906,607 240,105 1,146,712 ---------- -------- ---------- Shareholders' Equity: Series A Preferred shares (8,703,000 convertible shares issued; stated liquidation preference of $25 per share)................................. 217,575 -- 217,575 Series B Preferred shares (4,200,000 shares issued; stated liquidation preference of $25 per share)........... 105,000 105,000 Common shares (72,980,268 shares issued)................................ 72,980 -- 72,980 Additional paid-in capital.............. 964,500 -- 964,500 Distributions in excess of net earnings. (41,725) -- (41,725) Treasury shares (164,956 shares)........ (1,938) -- (1,938) ---------- -------- ---------- Total shareholders' equity............ 1,316,392 -- 1,316,392 ---------- -------- ---------- Total liabilities and shareholders' equity............................... $2,222,999 $240,105 $2,463,104 ========== ======== ==========
See accompanying notes to pro forma financial statements. 11 SECURITY CAPITAL PACIFIC TRUST PRO FORMA STATEMENT OF EARNINGS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
YEAR ENDED DECEMBER 31, 1995 -------------------------------------------------------- HISTORICAL ------------------------------- ACQUISITIONS ---------------------- PRIOR CURRENT PRO FORMA PTR PTR REPORTS (D) REPORT (E) ADJUSTMENTS PRO FORMA -------- ----------- ---------- ----------- --------- Revenues: Rental income......... $262,473 $43,434 $25,165 $ -- $331,072 Interest.............. 2,400 -- -- -- 2,400 -------- ------- ------- -------- -------- 264,873 43,434 25,165 -- 333,472 -------- ------- ------- -------- -------- Expenses: Rental expenses....... 73,808 13,818 7,110 -- 94,736 Real estate taxes..... 21,326 2,948 2,303 -- 26,577 Property management fees paid to affiliates........... 8,912 1,763 902 (549)(f) 11,028 Depreciation.......... 36,685 -- -- 10,493 (g) 47,178 Interest.............. 19,584 7,688 3,867 26,046 (h) 57,185 REIT management fee paid to affiliate.... 20,354 -- -- 432 (i) 20,786 General and administrative....... 952 -- -- -- 952 Provision for possible loss on investments.. 420 -- -- -- 420 Other................. 1,136 -- -- -- 1,136 -------- ------- ------- -------- -------- 183,177 26,217 14,182 36,422 259,998 -------- ------- ------- -------- -------- Earnings from operations............. 81,696 17,217 10,983 (36,422) 73,474 Gain on sale of investments............ 2,623 -- -- -- 2,623 -------- ------- ------- -------- -------- Net earnings............ 84,319 17,217 10,983 (36,422) 76,097 Less Preferred share dividends.............. 21,823 -- -- -- 21,823 -------- ------- ------- -------- -------- Net earnings attributable to common shares...... $ 62,496 $17,217 $10,983 $(36,422) $ 54,274 ======== ======= ======= ======== ======== Weighted average common shares outstanding (j). 67,052 67,052 ======== ======== Per common shares amounts: Net earnings attributable to common shares...... $ 0.93 $ 0.81 ======== ========
See accompanying notes to pro forma financial statements. 12 SECURITY CAPITAL PACIFIC TRUST PRO FORMA STATEMENT OF EARNINGS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1996 -------------------------------------------------------- HISTORICAL ------------------------------- PRO FORMA PTR ACQUISITIONS ADJUSTMENTS PRO FORMA ---------------------- ----------- --------- PRIOR CURRENT PTR REPORTS (D) REPORT (E) -------- ----------- ---------- Revenues: Rental income......... $240,102 $23,882 $19,548 $ -- $283,532 Interest.............. 1,589 -- -- -- 1,589 -------- ------- ------- -------- -------- 241,691 23,882 19,548 -- 285,121 -------- ------- ------- -------- -------- Expenses: Rental expenses....... 67,804 7,484 4,858 -- 80,146 Real estate taxes..... 19,953 1,523 1,725 -- 23,201 Property management fees paid to affiliates........... 8,788 1,093 706 (457)(f) 10,130 Depreciation.......... 32,230 -- -- 6,718 (g) 38,948 Interest.............. 22,401 4,972 2,689 16,035 (h) 46,097 REIT management fee paid to affiliate.... 17,145 -- -- 448 (i) 17,593 General and administrative....... 770 -- -- -- 770 Other................. 501 -- -- -- 501 -------- ------- ------- -------- -------- 169,592 15,072 9,978 22,744 217,386 -------- ------- ------- -------- -------- Earnings from operations............. 72,099 8,810 9,570 (22,744) 67,735 Gain on sale of investments............ 33,340 -- -- -- 33,340 -------- ------- ------- -------- -------- Net earnings before extraordinary item..... 105,439 8,810 9,570 (22,744) 101,075 Less extraordinary item- loss on early extinguishment of debt. 870 -- -- -- 870 -------- ------- ------- -------- -------- Net earnings............ 104,569 8,810 9,570 (22,744) 100,205 Less Preferred share dividends.............. 18,956 -- -- -- 18,956 -------- ------- ------- -------- -------- Net earnings attributable to common shares...... $ 85,613 $ 8,810 $ 9,570 $(22,744) $ 81,249 ======== ======= ======= ======== ======== Weighted average common shares outstanding (j). 72,355 72,355 ======== ======== Per common shares amounts: Net earnings attributable to common shares...... $ 1.18 $ 1.12 ======== ========
See accompanying notes to pro forma financial statements. 13 (a) Represents PTR's multifamily community acquisitions and three multifamily communities under contract to be acquired subsequent to September 30, 1996, as follows:
ACQUISITION ACQUISITION COMMUNITY DATE COST --------- -------------- ----------- Previously Reported: Summer Tree..................................... 10/29/96 $ 10,000 Fox Creek....................................... 12/17/96 7,900 -------- Total Previously Reported..................... 17,900 -------- Not Previously Reported: Telegraph Hill.................................. 10/15/96 8,100 Villa Marseilles................................ 11/13/96 13,125 The Palisades................................... 11/27/96 31,600 Clubhouse....................................... 12/19/96 8,030 Harborside...................................... 12/31/96 21,385 Newport Crossing................................ 01/10/97 11,290 Reflections..................................... 01/27/97 52,100 Marina Lakes East............................... under contract 18,600 Marina Lakes West............................... under contract 20,900 Folsom Ranch.................................... under contract 23,150 River Meadows................................... under contract 13,925 -------- Total Not Previously Reported................. 222,205 -------- $240,105 ========
(b) Reflects the use of line of credit borrowings of $201,985 to fund the pro forma acquisition of communities subsequent to September 30, 1996. (c) PTR assumed, or anticipates assuming approximately $38,120 in mortgage notes payable upon the purchase of Summer Tree, Fox Creek, River Meadows, Marina Lakes East and Club House apartments. (d) Reflects historical revenues and certain expenses, including mortgage interest if applicable, on communities previously reported by PTR on the 1996 Forms 8-K for the year ended December 31, 1995 or for the period from January 1, 1996 to the earlier of the respective dates of acquisition or September 30, 1996. Historical revenues and certain expenses exclude amounts which would not be comparable to the proposed future operations of the communities such as certain interest expense, interest income, income taxes and depreciation. The following table reconciles the historical financial information for the communities previously reported (as defined below) to the pro forma statements of earnings:
FOR THE YEAR ENDED DECEMBER 31, 1995 ----------------------------------------------- PROPERTY RENTAL RENTAL REAL ESTATE MANAGEMENT INTEREST INCOME EXPENSE TAXES FEES EXPENSE ------- ------- ----------- ---------- -------- Group A Communities (i)... $32,151 10,405 $2,065 $1,291 $6,415 Group B Communities (ii).. 5,820 1,228 462 250 1,273 Group C Communities (iii). 5,463 2,185 421 222 -- ------- ------- ------ ------ ------ Total communities previously reported.... $43,434 $13,818 $2,948 $1,763 $7,688 ======= ======= ====== ====== ======
FOR THE PERIOD JANUARY 1, 1996 TO THE EARLIER OF THE DATE OF ACQUISITION OR SEPTEMBER 30, 1996 ----------------------------------------------- PROPERTY RENTAL RENTAL REAL ESTATE MANAGEMENT INTEREST INCOME EXPENSE TAXES FEES EXPENSE ------- ------- ----------- ---------- -------- Group A Communities (i)... $18,676 $5,664 $1,112 $ 875 $4,127 Group B Communities (ii).. 3,285 1,019 256 143 845 Group C Communities (iii). 1,921 801 155 75 -- ------- ------ ------ ------ ------ Total communities previously reported.... $23,882 $7,484 $1,523 $1,093 $4,972 ======= ====== ====== ====== ======
14 (i) Group A Communities consist of the following communities which were previously reported in the 1996 Forms 8-K, and for which audited combined statements of revenues and certain expenses for the year ended December 31, 1995 were previously provided therein:
COMMUNITY LOCATION DATE ACQUIRED --------- -------- ------------- Ocean Crest........................ San Diego, California 3/29/96 Timberline......................... Portland, Oregon 4/17/96 Club Pacifica...................... San Diego, California 4/23/96 The Crossing....................... Corona, California 5/21/96 Mission Springs.................... Ontario, California 5/31/96 Newpointe.......................... Orange County, California 7/10/96 Brighton........................... Portland, Oregon 8/16/96 Oakwood............................ San Jose, California 9/16/96 Redwood............................ San Francisco, California 9/20/96 Summer Tree........................ Salt Lake City, Utah 10/29/96 Fox Creek.......................... Layton, Utah 12/17/96
(ii) Group B Communities consist of the following communities (two communities were previously reported but unaudited in the 1996 Forms 8-K) for which an audited combined statement of revenues and certain expenses for the year ended December 31, 1995 is presented in this Form 8-K:
COMMUNITY LOCATION DATE ACQUIRED --------- -------- -------------- Previously Reported: El Dorado............... San Diego, California 8/30/96 Woodsong Village........ San Bernardino, California 8/28/96 Not Previously Reported: Telegraph Hill.......... Albuquerque, New Mexico 10/15/96 Villa Marseilles........ Aliso Viejo (Orange County), California 11/13/96 Palisades............... La Jolla (San Diego County), California 11/27/96 Clubhouse............... Seattle, Washington 12/19/96 Harborside.............. San Francisco, California 12/31/96 Newport Crossing........ Seattle, Washington 1/10/97 Reflections............. San Francisco, California 1/27/97 Marina Lakes East....... Oakland, California under contract
(iii) Group C Communities consist of the following unaudited communities which have been previously reported in the 1996 Forms 8-K filed by PTR:
COMMUNITY LOCATION DATE ACQUIRED --------- -------- ------------- Quail Ridge....................... San Francisco, California 6/13/96 Westcourt Village................. San Bernardino, California 3/27/96
15 (e) Reflects historical revenues and certain expenses, including mortgage interest if applicable, on communities reported in this Form 8-K Item 5, for the year ended December 31, 1995 or for the period from January 1, 1996 to the earlier of the respective date of acquisition or September 30, 1996. Historical revenues and certain expenses exclude amounts which would not be comparable to the proposed future operations of the communities such as certain interest expense, interest income, income taxes and depreciation. The following table reconciles the historical financial information for the Group B Properties to the pro forma statements of earnings:
FOR THE YEAR ENDED DECEMBER 31, 1995 ------------------------------------------------- PROPERTY RENTAL RENTAL REAL ESTATE MANAGEMENT INTEREST INCOME EXPENSE TAXES FEES EXPENSE ------- ------- ----------- ---------- -------- Total Group B Communities. $24,294 $ 6,531 $2,228 $ 919 $ 3,107 Less: Group B Communities, previously reported.... (5,820) (1,228) (462) (250) (1,273) ------- ------- ------ ----- ------- Group B Communities, not previously reported.... 18,474 5,303 1,766 669 1,834 Group D Communities (i). 6,691 1,807 537 233 2,033 ------- ------- ------ ----- ------- Total communities, not previously reported.. $25,165 $ 7,110 $2,303 $ 902 $ 3,867 ======= ======= ====== ===== =======
FOR THE PERIOD JANUARY 1, 1996 TO THE EARLIER OF THE DATE OF ACQUISITION OR SEPTEMBER 30, 1996 -------------------------------------------------- PROPERTY RENTAL RENTAL REAL ESTATE MANAGEMENT INTEREST INCOME EXPENSE TAXES FEES EXPENSE -------- ------- ----------- ---------- -------- Total Group B Communities............ $ 17,588 $ 4,465 $ 1,573 $ 664 $2,153 Less: Group B Communities, previously reported.. (3,285) (1,019) (256) (143) (845) -------- ------- ------- ----- ------ Group B Communities, not previously reported............. 14,303 3,446 1,317 521 1,308 Group D Communities (i).................. 5,245 1,412 408 185 1,381 -------- ------- ------- ----- ------ Total communities, not previously reported........... $ 19,548 $ 4,858 $ 1,725 $ 706 $2,689 ======== ======= ======= ===== ======
(i) Group D consists of the following unaudited communities, which have not been previously reported:
COMMUNITY LOCATION DATE ACQUIRED --------- -------- -------------- Marina Lakes West......... Oakland, California under contract Folsom Ranch.............. Sacramento, California under contract River Meadows............. Huntington Beach (Orange County), California under contract
(f) Reflects the difference between historical property management fee expense and the fee which would have been charged by PTR's property manager, SCG Realty Services Incorporated. 16 (g) Reflects pro forma depreciation expense adjustment resulting from acquired communities, or communities under contract to be acquired, based on the depreciable basis of PTR's acquisition cost, assuming asset lives ranging from 10 to 40 years. The pro forma depreciation expense adjustment amounts by community are as follows:
TWELVE NINE COMMUNITY ACQUISITION MONTHS MONTHS --------- ---------------------- ENDED ENDED DATE COSTS 12/31/95 9/30/96 -------------- ------- -------- ------- Previously Reported: Westcourt Village.................... 3/27/96 $12,762 $ 256 $ 61 Ocean Crest.......................... 3/29/96 15,600 316 77 Timberline .......................... 4/17/96 7,043 140 40 Club Pacifica........................ 4/23/96 14,300 286 88 The Crossing......................... 5/21/96 14,850 297 116 Missions Springs..................... 5/31/96 38,500 771 321 Quail Ridge.......................... 6/13/96 17,550 351 159 Newpointe............................ 7/10/96 9,400 188 99 Brighton............................. 8/16/96 11,150 223 140 El Dorado............................ 8/30/96 29,350 587 391 Woodsong Village..................... 8/28/96 12,300 246 162 Redwood.............................. 9/20/96 37,000 740 535 Oakwood.............................. 9/16/96 64,800 1,296 923 Summer Tree.......................... 10/29/96 10,000 200 150 Fox Creek ........................... 12/17/96 7,900 158 119 ------- ------ Total Previously Reported.......... 6,055 3,381 ------- ------ Not Previously Reported: Telegraph Hill....................... 10/15/96 $ 8,100 $ 160 $ 122 Villa Marseilles..................... 11/13/96 13,125 262 197 Palisades............................ 11/27/96 31,600 631 474 Club House........................... 12/19/96 8,030 161 121 Harborside........................... 12/31/96 21,385 427 321 Newport Crossing..................... 1/10/97 11,290 225 171 Reflections.......................... 1/27/97 52,100 1,042 782 Marina Lakes East.................... under contract 18,600 371 279 Marina Lakes West.................... under contract 20,900 419 314 Folsom Ranch......................... under contract 23,150 462 347 River Meadows........................ under contract 13,925 278 209 ------- ------ Total Not Previously Reported...... 4,438 3,337 ------- ------ Grand Total...................... $10,493 $6,718 ======= ======
(h) Represents the pro forma interest expense adjustments related to utilization of line of credit borrowings that would have been required if the community acquisitions had occurred at January 1, 1995:
TWELVE NINE MONTHS MONTHS ENDED ENDED 12/31/95 9/30/96 -------- -------- Pro forma line of credit borrowings for operating communities acquired or under contract to be acquired, subsequent to September 30, 1996....................... $201,985 $201,985 Line of credit borrowings required for 1996 acquisitions made prior to September 30, 1996....................... 194,902 123,815 -------- -------- Total pro forma line of credit borrowings............... 396,887 325,800 Current interest rate................................... 6.5625% 6.5625% Proration factor........................................ 1.0 .75 -------- -------- Pro forma interest expense adjustment................... $ 26,046 $ 16,035 ======== ========
17 (i) Reflects adjustments to PTR's REIT management fee expense related to (i) the increase in cash flow resulting from acquisition of multifamily communities discussed in (d) and (e) and (ii) adjustments discussed in (f) and (h):
TWELVE NINE MONTHS MONTHS ENDED ENDED 12/31/95 9/30/96 -------- -------- Historical earnings from operations from acquisitions: Previously reported.................................... $ 17,217 $ 8,810 Not Previously reported................................ 10,983 9,570 Pro Forma adjustments: Property management fees paid to affiliates............ 549 457 Interest expense....................................... (26,046) (16,035) -------- -------- 2,703 2,802 REIT management fee percentage......................... 16% 16% -------- -------- Pro Forma REIT management fee expense adjustment....... $ 432 $ 448 ======== ========
(j) Primary and fully diluted earnings per share were approximately the same for both periods as there was no reportable dilution from conversions of Series A Preferred Shares. 18 EX-23.1 2 INDEPENDENT AUDITOR'S CONSENT EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT The Board of Trustees and Shareholders of Security Capital Pacific Trust: We consent to incorporation by reference in registration statements No. 33- 25317 (Form S-8), No. 333-4455 (Form S-4), and No. 333-12885 (Form S-3) of Security Capital Pacific Trust of our report dated February 7, 1997 relating to the Combined Statement of Revenues and Certain Expenses for Certain Multifamily Communities for the year ended December 31, 1995, which report appears in the current report on Form 8-K of Security Capital Pacific Trust dated February 20, 1997. KPMG Peat Marwick LLP Chicago, Illinois February 20, 1997 -----END PRIVACY-ENHANCED MESSAGE-----