UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Period Ended: August 31, 1997 Commission File Number: 1-6833
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MGI PROPERTIES
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(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-6268740
- ----------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Winthrop Square, Boston, Massachusetts 02110
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 422-6000
--------------------------
N/A
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Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Common shares outstanding as of October 15, 1997: 13,625,489
Page 1 of 14 pages
Exhibit Index appears on Page 13
<PAGE>
MGI PROPERTIES
INDEX
PART I: FINANCIAL INFORMATION Page No.
--------
Item 1: Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Earnings 4
Consolidated Statements of Cash Flow 5
Consolidated Statements of Changes in Shareholders' Equity 6
Notes to Consolidated Financial Statements 7
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Exhibit A: Computation of Earnings Per Share 12
PART II: OTHER INFORMATION
Items 1 - 6 13
Signatures 14
- 2 -
<PAGE>
MGI PROPERTIES
PART I -- FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
August 31, 1997 November 30, 1996
(unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Real estate, at cost $384,281,000 $356,024,000
Accumulated depreciation and amortization (51,209,000) (44,810,000)
- ------------------------------------------------------------------------------------------------------------------------------------
Net investments in real estate 333,072,000 311,214,000
Cash and cash equivalents 9,256,000 15,140,000
Accounts receivable 3,463,000 3,665,000
Other assets 10,101,000 9,645,000
====================================================================================================================================
$355,892,000 $339,664,000
====================================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage loans payable $111,587,000 $138,547,000
Other liabilities 5,991,000 6,682,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 117,578,000 145,229,000
Shareholders' equity:
Common shares -- $1 par value; 17,500,000 shares authorized;
13,608,677 issued (11,563,199 at November 30, 1996) 13,609,000 11,563,000
Additional paid-in capital 206,872,000 167,185,000
Undistributed net income 17,833,000 15,687,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 238,314,000 194,435,000
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$355,892,000 $339,664,000
====================================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
- 3 -
<PAGE>
MGI PROPERTIES
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
------------------ -----------------
August 31, 1997 August 31, 1996 August 31, 1997 August 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCOME
Rental and other income $16,028,000 $14,071,000 $46,286,000 $39,892,000
Interest 117,000 116,000 521,000 301,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total income 16,145,000 14,187,000 46,807,000 40,193,000
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Property operating expenses 3,817,000 3,724,000 11,288,000 10,477,000
Real estate taxes 1,890,000 1,641,000 5,562,000 4,743,000
Depreciation and amortization 2,744,000 2,394,000 7,883,000 6,944,000
Interest 2,324,000 2,458,000 7,220,000 6,424,000
General and administrative 826,000 678,000 2,391,000 2,157,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 11,601,000 10,895,000 34,344,000 30,745,000
- ------------------------------------------------------------------------------------------------------------------------------------
Income before net gain and extraordinary item 4,544,000 3,292,000 12,463,000 9,448,000
Net gain -- -- 600,000 9,350,000
- ------------------------------------------------------------------------------------------------------------------------------------
Income before extraordinary item 4,544,000 3,292,000 13,063,000 18,798,000
Extraordinary item - prepayment of debt -- -- (306,000) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net income $4,544,000 $3,292,000 $12,757,000 $18,798,000
====================================================================================================================================
PER SHARE DATA
Net income $0.33 $0.28 $0.97 $1.63
====================================================================================================================================
Weighted average shares outstanding 13,605,703 11,550,910 13,179,891 11,534,604
====================================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
- 4-
<PAGE>
MGI PROPERTIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Nine Months Ended August 31,
----------------------------
1997 1996
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $12,757,000 $18,798,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization expense 7,883,000 6,944,000
Net gain (600,000) (9,350,000)
Net extraordinary items 306,000 --
Other 1,351,000 (1,092,000)
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 21,697,000 15,300,000
- ----------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of real estate (25,679,000) (38,627,000)
Additions to real estate (4,185,000) (4,534,000)
Deferred tenant charges (1,684,000) (1,101,000)
Net proceeds from sales of real estate interests 704,000 6,072,000
Other (252,000) 184,000
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (31,096,000) (38,006,000)
- ----------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from mortgage and other loans payable, net 15,500,000 32,500,000
Repayment of mortgage and other loans payable (42,458,000) (1,538,000)
Mortgage prepayment penalty (306,000) --
Cash distributions (10,611,000) (8,419,000)
Proceeds from sale of common shares 41,390,000 563,000
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 3,515,000 23,106,000
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Net increase (decrease) in cash and cash equivalents (5,884,000) 400,000
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CASH AND SHORT-TERM INVESTMENTS
Beginning of year 15,140,000 7,045,000
- ----------------------------------------------------------------------------------------------------------------------------------
End of period $ 9,256,000 $ 7,445,000
==================================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
- 5 -
<PAGE>
MGI PROPERTIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(unaudited)
<TABLE>
<CAPTION>
------------------------------------------- ----------------------- ---------------------- --------------------
Additional
Common Paid-In Undistributed
Shares Capital Net Income
------------------------------------------- ----------------------- ---------------------- --------------------
<S> <C> <C> <C> <C>
Balance at November 30, 1996 $11,563,000 $167,185,000 $15,687,000
Net income -- -- 12,757,000
Distributions -- -- (10,611,000)
Sale of common shares 2,000,000 39,075,000 --
Options exercised and other 46,000 612,000 --
------------------------------------------- ----------------------- --------------------- --------------------
Balance at August 31, 1997 $13,609,000 $206,872,000 $17,833,000
=========================================== ======================= ====================== ====================
</TABLE>
See accompanying notes to consolidated financial statements.
- 6 -
<PAGE>
MGI PROPERTIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1: The results of the interim period are not necessarily
indicative of results to be expected for the entire fiscal year.
The figures contained in this interim report are unaudited and may
be subject to year-end adjustments. Certain prior year amounts
have been reclassified to conform to the current year
presentation. In the opinion of management, all adjustments
necessary for a fair presentation of financial position and
results of operations have been included and such adjustments
include only the normal accruals.
Note 2: On September 18, 1997, the Board of Trustees declared a cash
dividend of $.28 per common share payable on October 10, 1997 to
shareholders of record on September 30, 1997. This dividend
payment will aggregate $3.8 million.
Note 3: Cash paid for interest amounted to $2.3 million and $2.4
million for the three-month periods ended August 31, 1997 and
August 31, 1996, respectively.
Note 4: At August 31, 1997, options to purchase an aggregate of 994,961
common shares at exercise prices ranging from $7.375 to $21.375
per share were outstanding under MGI's stock option plans for key
employees and trustees. All options outstanding at August 31, 1997
expire by April 2007.
Note 5: During the first quarter of fiscal 1997, the Trust prepaid a
$12.3 million mortgage and incurred a $306,000 penalty ($.03 per
share), which was recorded as an extraordinary loss.
Note 6: Subsequent to the close of the quarter, the Trust completed the
sale of its seven St. Louis, Missouri properties for an aggregate
sales price of $14.8 million. The properties had been secured by
mortgages totaling $8.7 million that were assumed by the
purchaser. The Trust will recognize a gain on sale of $1.1 million
in the fourth quarter ending November 30, 1997. Immediately
following the St. Louis, Missouri sale, the Trust acquired five
properties located in Nashua, New Hampshire at prices aggregating
$16.6 million. The properties aggregate 376,600 square feet and
are 89% leased.
Note 7: MGI intends to qualify for the year ended November 30, 1997 as
a real estate investment trust under the provisions of Sections
856-860 of the Internal Revenue Code of 1986, as amended.
Accordingly, no provision has been made for Federal income taxes.
- 7 -
<PAGE>
MGI PROPERTIES
PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Shareholders' equity at August 31, 1997 was $238.3 million, compared to
$194.4 million at November 30, 1996. The increase primarily reflects net
proceeds of $41.1 million from an equity offering of 2,000,000 common shares as
well as the excess of net income over distributions paid. At August 31, 1997,
financial liquidity was provided by $9.3 million in cash and cash equivalents
and by unused lines of credit aggregating $40.5 million.
Through the first three quarters of fiscal 1997, the Trust has acquired
seven properties totaling 476,200 square feet for an aggregate price of $25.6
million. The properties were 99% leased as of August 31, 1997. All of the
properties are located in New England, including two office properties totaling
80,800 square feet in suburban Hartford, Connecticut. The remaining five
buildings consist of both office/research and development and industrial
properties that are located in the metropolitan Boston Massachusetts area. At
the end of the third quarter, the Trust's New England investments equal
approximately 52% of the total cost of its real estate. Subsequent to the close
of the quarter, the Trust completed the sale of its seven St. Louis, Missouri
properties for an aggregate sales price of $14.8 million. The properties had
been secured by mortgages totaling $8.7 million that were assumed by the
purchaser. The Trust will recognize a gain on the sale of $1.1 million in the
fourth quarter ending November 30, 1997. In September 1997, immediately
following the St. Louis, Missouri sale, the Trust acquired five additional
properties located in Nashua, New Hampshire at prices aggregating $16.6 million.
The Nashua, New Hampshire acquisition is comprised of three multi-tenant office
buildings equaling 128,200 square feet and two industrial "flex" buildings
totaling 248,400 square feet. The properties are 89% occupied. The acquisitions
were financed with available cash, the St. Louis sale proceeds and by an $8.7
million advance from the Trust's line of credit.
Mortgage and other loans payable totaled $111.6 million at August 31,
1997, a net decrease of $26.9 million, compared to $138.5 million at November
30, 1996. The Trust utilized $28.0 million of the offering proceeds to repay the
outstanding balances on its lines of credit. The line was subsequently drawn
down by $4.5 million in connection with property acquisitions. In addition, the
Trust refinanced a $12.3 million, 9.3% mortgage loan with an $11.0 million loan
bearing interest at a rate of 8.12%. The balance of the change represents
scheduled principal payments. Scheduled loan principal payments due within
twelve months of August 31, 1997 total $3.3 million. MGI believes it will
continue to be able to extend or refinance maturing mortgage loans upon
satisfactory terms.
Cash requirements during the balance of fiscal 1997 include
distributions to shareholders, capital and tenant improvements and other leasing
expenditures required to maintain MGI's occupancy levels and other investment
undertakings. Principal sources of funds in the future are expected to be from
property operations, lines of credit, mortgaging or refinancing of existing
mortgages on properties and MGI's portfolio of investment securities. Other
potential sources of funds include the proceeds of public or private offerings
of additional equity or debt securities of the Trust or the sale of real estate
investments. The cost of new borrowings or issuances of the Trust's equity
securities will be measured against the anticipated returns of investments to be
acquired with such funds.
The Trust presently anticipates that in the near term primarily cash,
short-term investments and debt will finance the purchase of additional
properties. MGI believes the combination of available cash and short-term
investment securities, the value of MGI's unencumbered properties and other
resources available to it are sufficient to meet its short and long-term
liquidity requirements.
- 8 -
<PAGE>
MGI PROPERTIES
PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Results of Operations
Net income for the quarter ended August 31, 1997, was $4.5 million, or
$.33 per share on the increased average number of shares outstanding, as
compared to $3.3 million, or $.28 per share, in the corresponding quarter of
1996. Net income for the nine months ended August 31, 1997, was $12.8 million,
or $.97 per share on the increased average number of shares outstanding, as
compared to $18.8 million, or $1.63 per share, a year ago. Income before net
gain and extraordinary item was $12.5 million and $9.4 million for the nine
months ended August 31, 1997 and August 31, 1996, respectively. Included in 1997
year-to-date net income was a gain of $0.6 million which was partially offset by
an extraordinary loss of $0.3 million incurred in connection with a loan
refinancing prepayment fee. Included in the 1996 year-to-date net income was a
gain of $9.4 million recognized from the sale of MGI's interests in a California
apartment complex.
Funds from operations ("FFO") totaled $7.3 million in the third quarter
of fiscal 1997, compared to $5.7 million in the corresponding quarter of 1996.
Funds from operations for the nine months ended August 31, 1997 and 1996 were
$20.3 million and $16.3 million, respectively. MGI calculates FFO in conformity
with the NAREIT definition which is net income (computed in accordance with
generally accepted accounting principles), excluding gains (or losses) from debt
restructuring and sales of property, plus depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint ventures. MGI
believes FFO is an appropriate supplemental measure of operating performance.
The following is a reconciliation of net income to FFO:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
August 31, August 31, August 31, August 31,
---------- ---------- ---------- ----------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Income $4,544,000 $3,292,000 $12,757,000 $18,798,000
Less net gain and extraordinary item -- -- (294,000) (9,350,000)
Plus building depreciation 2,131,000 1,903,000 6,223,000 6,012,000
Plus tenant improvement and
commission amortization
582,000 468,000 1,585,000 885,000
------- ----------- ----------- -----------
FFO $7,257,000 $5,663,000 $20,271,000 $16,345,000
========== ========== =========== ===========
</TABLE>
The change in FFO, compared to the corresponding periods in 1996, is
attributable to the same factors that affected income before net gain and
extraordinary item in such periods, with the exception of depreciation and
amortization expense.
- 9 -
<PAGE>
MGI PROPERTIES
PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
In comparing the third quarter of fiscal 1997 to that of the previous
year, property operating income, which is defined as rental and other income
less property operating expenses and real estate taxes, has increased by $1.6
million, $10.3 versus $8.7 million for the third quarter of 1996. Other changes
include an increase in depreciation and amortization of $0.4 million due to the
additional number of properties owned. General and administrative expense has
increased largely due to personnel related expenses. The change in property
operating income reflects the additional income from the acquisition of
properties totaling $1.2 million, offset, in part, by the income effect of $0.1
million due to the sale of properties. Income from properties owned throughout
the third quarters of both fiscal 1997 and 1996, i.e. "comparable properties",
in the aggregate, increased by $.5 million or 6.5%.
Change in Property Operating Income for Quarter Ended August 31, 1997 versus
August 31, 1996
<TABLE>
<CAPTION>
Fiscal Fiscal
Properties Held 1997 and 1996 1997 and 1996 Net Change
Both Fiscal Years Acquisitions Sales ----------
----------------- ------------ -----
<S> <C> <C> <C> <C>
Industrial $102,000 $ 427,000 $ (98,000) $ 430,000
Office 200,000 523,000 -- 723,000
Office R&D (64,000) 242,000 -- 178,000
Apartment 246,000 -- -- 246,000
Retail 6,000 -- -- 6,000
Land and Partnership -- 35,000 (16,000) 19,000
----------- ----------- --------- ----------
$490,000 $1,227,000 $(114,000) $1,603,000
======= ========= ======== =========
</TABLE>
For the nine months ended August 31, 1997 property operating income
from properties held in both fiscal years had increased approximately 3.3%, on
an annualized basis, when compared to the comparable 1996 period. When the
quarter and nine months ended August 31, 1997 are compared to the prior year
periods, the performance of the "comparable properties" reflects an increase in
rental rates as well as lower operating costs. The increase in property
operating income related to the acquisitions of properties reflects the Trust's
focus on New England over the past several years. The portfolio of New England
properties at September 30, 1997, including the Nashua, New Hampshire purchase,
totals 3,957,000 square feet. During the third quarter of 1997 the Trust began
to internalize property management with the objective of having the New England
properties under management within twelve months.
Scheduled lease expirations and completed leasing (in square feet) for
the portfolio as a whole are as follows at August 31, 1997:
Scheduled Expirations
---------------------
Fiscal Remaining Scheduled
Property Percentage 1997 Fiscal Fiscal
Type Leased Leasing 1997 1998
---- ------ ------- ------- --------
Industrial 99.9% 490,200 23,800 660,200
Office 96.0% 48,700 10,600 122,900
Office/R&D 100.0% 220,200 -- 284,200
Retail 89.2% 48,400 2,000 61,800
----- -------- ------- ----------
Total 97.5% 807,500 36,400 1,129,100
===== ======= ====== =========
- 10 -
<PAGE>
MGI PROPERTIES
PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Of the 807,500 total square feet leased year-to-date in 1997,
754,000 square feet, (which includes the 315,000 square feet in New England),
pertained to renewals or new leases of previously occupied space. Rents on the
754,000 square feet increased an aggregate 20% over prior rent levels, which is
equal to $1.2 million per annum once all the lease renewals have commenced. Of
this $1.2 million, approximately $290,000 has been reflected in earnings for the
first nine months of 1997; the balance will be recognized as new lease rates go
into effect over the next twelve months. Rents on the 315,000 square feet of New
England leases signed increased by 36% over prior rent levels.
Subsequent to the end of the quarter, the scheduled fiscal
1998 lease expirations have been reduced to 870,000 square feet from 1,129,100
square feet. The St. Louis sale reduced schedule expirations by 338,000 square
feet, while the Nashua acquisition added 79,000 square feet. In addition,
management has reached an agreement in principle to extend and expand the leased
space of a 50,000 square foot tenant at Yorkshire Plaza in Aurora, Illinois. The
lease is included in the 1998 expirations. Taking into consideration the sales
and acquisitions, expirations are scheduled throughout fiscal 1998 as follows:
326,700 square feet in the first quarter, 54,900 square feet in the second
quarter, 346,100 square feet in the third quarter and 142,600 square feet in the
fourth quarter. Expirations on the New England properties in 1998 total 552,000
square feet. Existing rent levels relative to New England space coming up for
renewal appear to be generally below prevailing market rents.
Forward Looking Statements
Statements made or incorporated in this Report may contain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934,
as amended. These forward-looking statements are dependent on a number of
factors that could cause actual results to differ materially from those
expressed or implied in the forward-looking statements. Such factors include,
among other things, current market conditions remaining the same or improving,
satisfactory completion of anticipated acquisitions, maintaining or improving
the current occupancy and rent levels at newly acquired and existing properties,
as well as those set forth in Risk Factors (Item 1) and Management's Discussion
and Analysis of Financial Condition and Results of Operations in MGI's Form 10-K
for the year ended November 30, 1996.
- 11 -
<PAGE>
MGI PROPERTIES
PART I - EXHIBIT A
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended August 31, Nine Months Ended August 31,
----------------------------- ----------------------------
1997 1996 1997 1996
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY
Net income $ 4,544,000 $ 3,292,000 $12,757,000 $18,798,000
===================================================================================================================================
Weighted average number of shares outstanding during the period 13,605,703 11,550,910 13,179,891 11,534,604
===================================================================================================================================
Primary earnings per share $0.33 $0.28 $0.97 $1.63
===================================================================================================================================
ASSUMING FULL DILUTION
Net income $ 4,544,000 $3,292,000 $12,757,000 $18,798,000
===================================================================================================================================
Weighted average number of shares outstanding during the period 13,605,703 11,550,910 13,179,891 11,534,604
===================================================================================================================================
Earnings per share assuming full dilution $0.33 $0.28 $0.97 $1.63
===================================================================================================================================
</TABLE>
Note: Net income per share is based upon the weighted average shares
outstanding taking into consideration common stock equivalents, if
dilutive. Outstanding stock options are not taken into account in the
computation of earnings per share as they are not materially dilutive.
- 12 -
<PAGE>
MGI PROPERTIES
PART II - OTHER INFORMATION
Item 1: Legal Proceedings: Not applicable.
Item 2: Changes in Securities: Not applicable.
Item 3: Defaults upon Senior Securities: Not applicable.
Item 4: Submission of Matters to a Vote of Security Holders: None.
Item 5: Other Information: Not applicable.
Item 6: Exhibits and Reports on Form 8-K:
a) Exhibits:
Computation of Earnings Per Share (see page 12).
b) Reports on Form 8-K:
None
- 13 -
<PAGE>
MGI PROPERTIES
SIGNATURES
Pursuant to the requirements to 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.
Date: October 15, 1997 /s/ Phillip C. Vitali
---------------- --------------------------------------
Phillip C. Vitali
Executive Vice President and Treasurer
(Chief Financial Officer)
Date: October 15, 1997 /s/ David P. Morency
---------------- --------------------------------------
David P. Morency
Controller
(Principal Accounting Officer)
- 14 -
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> AUG-31-1997
<CASH> 9,256
<SECURITIES> 000
<RECEIVABLES> 3,463
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 10,101
<PP&E> 384,281
<DEPRECIATION> (51,209)
<TOTAL-ASSETS> 355,892
<CURRENT-LIABILITIES> 5,991
<BONDS> 111,587
<COMMON> 13,609
000
000
<OTHER-SE> 224,705
<TOTAL-LIABILITY-AND-EQUITY> 355,892
<SALES> 16,145
<TOTAL-REVENUES> 16,028
<CGS> 000
<TOTAL-COSTS> 9,277
<OTHER-EXPENSES> 000
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 2,324
<INCOME-PRETAX> 4,544
<INCOME-TAX> 000
<INCOME-CONTINUING> 4,544
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> 4,544
<EPS-PRIMARY> .33
<EPS-DILUTED> .33
</TABLE>
