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):
April 13, 1999
PROLOGIS TRUST
(Exact name of registrant as specified in its charter)
Maryland 01-12846 74-2604728
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
14100 East 35th Place 80011
Aurora, Colorado (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (303) 375-9292
Not Applicable
(Former name or former address, if changed since last report)
- -------------------------------------------------------------------------------
PAGE>
ITEM 5. OTHER EVENTS
This Current Report on Form 8-K is being filed by ProLogis Trust
("ProLogis") to provide pro forma condensed financial information of Meridian
Industrial Trust, Inc. ("Meridian") as of December 31, 1998. On March 30, 1999,
Meridian was merged with and into ProLogis.
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<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
None
(b) Pro Forma Financial Information:
None
(c) Exhibits:
99.1 Pro Forma Condensed Consolidated Statement of
Operations and Notes of Meridian Industrial Trust, Inc.
for the year ended December 31, 1998.
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<PAGE>
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.
PROLOGIS TRUST
By: /s/ Walter C. Rakowich
-----------------------------
Walter C. Rakowich
Managing Director and
Chief Financial Officer
(Principal Financial Officer)
Date: April 13, 1999 By: /s/ Shari J. Jones
-----------------------------
Shari J. Jones
Vice President
(Principal Accounting Officer)
<PAGE>
EXHIBIT 99.1
MERIDIAN INDUSTRIAL TRUST, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE DATA)
The accompanying unaudited pro forma condensed consolidated statement
of operations for the year ended December 31, 1998 of Meridian Industrial Trust,
Inc. (the "Company") has been prepared to reflect (i) the incremental effect of
properties acquired from January 1, 1998 to December 31, 1998 either directly or
through one of its consolidated partnerships ("Acquisitions"), (ii) the
incremental effect of properties divested from January 1, 1998 to December 31,
1998 either directly or through one of its consolidated partnerships
("Divestitures"), (iii) adjustments to interest expense resulting from the
paydown of the Unsecured Credit Facility using the net proceeds received from a
preferred stock offering and a direct placement of 850,000 shares of the
Company's common stock , (iv) the amendment to the Unsecured Credit Facility
resulting from the reduction in the interest rate to LIBOR plus 1.2%, (v)
adjustments to interest expense to resulting from the short-term loan agreement
entered into by the Company, and (vi) adjustments to interest expense to reflect
additional borrowings on the Unsecured Credit Facility to fund the acquisitions
referred to above, on the operations of the Company as if such transactions and
adjustments had occurred on January 1, 1998.
There were no transactions subsequent to December 31, 1998 that have
been assumed to have occurred as of December 31, 1998. Accordingly, no pro forma
condensed consolidated balance sheet as of December 31, 1998 is presented.
The pro forma condensed consolidated statement of operations should be
read in conjunction with the historical consolidated financial statements of the
Company for the year ended December 31, 1998 that have been filed as an exhibit
to the Current Report on Form 8-K of ProLogis Trust ("ProLogis") on April 13,
1999. On March 30, 1999, the Company was merged with and into ProLogis.
Accordingly, the Company did not file an Annual Report on Form 10-K for the year
ended December 31, 1998. In the opinion of the Company's management, the pro
forma condensed consolidated statement of operations provides for all
adjustments necessary to reflect the effects of the transactions noted above,
excluding the merger with ProLogis.
The pro forma condensed consolidated statement of operations for the
year ended December 31, 1998 and the notes thereto are unaudited and are not
necessarily indicative of the actual results that would have occurred if the
transactions and adjustments reflected therein had been consummated in the
period presented, nor does it purport to represent the results of operations for
future periods.
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<PAGE>
Meridian Industrial Trust, Inc.
Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 1998
(unaudited, in thousands, except share data)
<TABLE>
<CAPTION>
Historical Acquisitions Divestitures Other(4) Pro Forma
(1) (2) (3)
---------- ------------ ------------ ------- ---------
<S> <C> <C> <C> <C> <C>
Revenues:
Rentals from real estate $ 118,988 $ 7,101 $ (2,815) $ - $ 123,274
investments
Income from unconsolidated JV 2,236 - - - 2,236
Income from unconsolidated 2,472 864 - - 3,336
subsidiaries
Interest and other income 2,590 121 224 2,935
--------- -------- ---------- ------- ---------
Total revenue 126,286 8,086 (2,591) 131,781
--------- -------- ---------- ------- ---------
Operating Expenses:
Interest 25,583 - - (555) 25,028
Property taxes 15,889 741 (288) 16,342
Interest Rate Protection Agreement 12,633 12,633
Property operating 8,976 459 (411) - 9,024
General and administrative 8,333 - - - 8,333
Merger related costs 825 825
Depreciation and amortization 23,943 1,764 (414) 25,293
--------- -------- ---------- ------- ---------
Total operating expenses 96,182 2,964 (1,113) (555) 97,478
--------- -------- ---------- ------- ---------
Income before minority interest 30,104 5,122 (1,478) 555 34,303
Minority interest in net income (574) (473) (1,047)
--------- -------- ---------- ------- ---------
Net income (5) 29,530 $ 4,649 $ (1,478) $ 555 33,256
========= ======== ========== =======
Series B Preferred Dividend (6) (2,358) (2,142)
Series D Preferred Dividend (7) (2,199) (4,375)
--------- ---------
Net income allocable to Common Shares $ 24,973 $ 26,739
========= =========
Net income allocable to Common Shares
per Common Share:
Basic (8) $ 0.81 $ 0.84
========= =========
Diluted (8) $ 0.80 $ 0.83
========= =========
Weighted average Common Shares
outstanding:
Basic (8) 30,892,467 31,697,491
========== ==========
Diluted (8) 31,342,959 32,147,983
========== ==========
</TABLE>
The accompanying notes are an integral part of
these statements.
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<PAGE>
Meridian Industrial Trust, Inc.
Notes and Adjustments To
Pro Forma Condensed Consolidated Statement of Operations
For The Year Ended December 31, 1998
(Unaudited, In Thousands, Except Share Data)
(1) Represents the historical condensed consolidated results of operations for
the year ended December 31, 1998. Included in the historical consolidated
results of operations were the following completed developments which the
Company either placed in service or acquired from the Seller upon
completion of the development project during the year ended December 31,
1998:
<TABLE>
<CAPTION>
Book Value
Before Property
Development Date Placed Accumulated Rental Property Operating
Property in Service Depreciation Revenue Tax Expenses
----------- ------------ ------------ --------- -------- ---------
<S> <C> <C> <C> <C> <C>
Enterprise B June 6, 1998 $ 4,632 $ 213 $ 25 $ 16
Enterprise C June 8, 1998 6,557 348 38 6
Gateway One June 30, 1998 19,251 549 51 --
2235 Spiegel Drive July 24, 1998 19,270 356 8 3
Carowinds Aug. 5, 1998 21,822 560 -- --
4000 Miller Circle Sept.3, 1998 19,099 173 20 --
2600 Brodhead Rd. Oct. 9, 1998 26,032 599 -- 6
Meridian Distribution
Center Dec. 7, 1998 19,910 144 -- 16
--------- --------- ------- ------
Total $ 136,573 $ 2,942 $ 142 $ 47
========= ========= ======= ======
</TABLE>
Excludes gains on divestitures of properties of $4,436.
(2) Reflects the incremental effect (i.e. as if such Acquisitions had occurred
or been completed on January 1, 1998) of the Acquisitions made by the
Company either directly or through one of its consolidated partnerships
during the period from January 1, 1998 to December 31, 1998. The
incremental depreciation and amortization is based upon estimated useful
lives of 35 years.
The following table sets forth the revenues and expenses of the
Acquisitions for the period from January 1, 1998 to the earlier of the date
of acquisition or December 31, 1998:
<TABLE>
<CAPTION>
Property Minority
Rental Interest Operating Interest in
Property Market Revenue Income Property Tax Expenses Net Income
-------- ------ ------- -------- ------------ --------- -----------
<S> <C> <C> <C> <C> <C> <C>
25 Otis Street New Jersey $ 287 $ -- $ 27 $ 34 $ --
2300 Principal Row Orlando 133 -- 13 13 --
624 Krona Drive Dallas 60 -- 10 7 --
Foothills Ranch (2 Properties) LA Basin 121 -- 16 3 --
7050 Alan Schwartzwalder Columbus 101 -- 2 6 --
15450 E. Salt Lake Avenue LA Basin 97 -- 23 9 --
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Property Minority
Rental Interest Property Operating Interest in
Property Market Revenue Income Tax Expenses Net Income
-------- --------- ------- -------- -------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Security Capital Swap (5 Properties) Memphis $ 870 $ -- $ 100 $ 90 $ --
701 Malaga LA Basin 157 -- 73 60 --
Romeo Portfolio (2 Properties) Chicago 593 -- 71 40 --
8399 Zionsville Road Indianapolis 270 -- 49 -- --
5141 E. Santa Ana LA Basin 314 -- 34 11 --
Jackson Shaw II (7 Properties) Dallas and 1,335 121 153 110 473
Las Vegas
Oates Portfolio (3 Properties) SF Bay Area 1,222 -- 153 57 --
Pizzuti Portfolio (4 Properties) Columbus, 1,541 -- 17 19 --
Kentucky and
Florida ------- ------- ------ ------ -------
Total $ 7,101 $ 121 $ 741 $ 459 $ 473
======= ======= ====== ====== =======
</TABLE>
Included in the Pizzuti Portfolio are three completed developments that
were placed in service by the seller during the year ended December 31,
1998:
<TABLE>
<CAPTION>
Book Value
Before Property
Development Date Placed Accumulated Rental Property Operating
Property in Service Depreciation Revenue Tax Expenses
----------- ---------- ------------ ------- -------- --------
<S> <C> <C> <C> <C> <C>
2000 Park Oaks Ave. March 1, 1998 $ 6,251 $ 312 $ 2 $ 12
7111 Trade Port Drive May 1, 1998 9,476 379 2 3
2701 Charter Street Aug. 4, 1998 8,020 127 1 2
--------- ----- ---- -----
Total $ 23,747 $ 818 $ 5 $ 17
========= ===== ==== =====
</TABLE>
The Acquisitions were funded with: (i) funds released from an escrow
account amounting to $4,228, (ii) draws on the Unsecured Credit Facility,
(iii) the assumption of mortgage notes payable in the principal amount of
$16,153, (iv) an additional borrowing under a mortgage note payable in the
principal amount of $16,000, and (v) cash on hand.
Also reflects estimated incremental income from unconsolidated subsidiaries
based on (i) pro forma equity income from Meridian Refrigerated, Inc.
("MRI") totaling $156, (ii) secured loans extended to MRI totaling $29,758
($14,400 in February, 1998 and $15,358 in June, 1998) accruing interest at
9% per annum, and (iii) unsecured loans extended to MRI totaling $5,567
($2,400 in February, 1998 and $3,167 in June, 1998) accruing interest at
10% per annum. The incremental interest income accrued by the Company on
the secured and unsecured loans extended to MRI amounted to $576 and $132,
respectively.
Also reflects a loan extended by the Company to a minority limited partner
aggregating to $6,000. The note receivable is secured by the limited
partner's partnership units, bears interest at the one-month LIBOR rate
plus 2.75% (7.81% at December 31, 1998) with interest payable monthly, and
matures on March 20, 2001.
(3) Reflects the divestiture of seven properties during 1998, three of which
were through a property-for-property swap transaction. The net proceeds
from the remaining divestitures aggregated to $23,297 and were used to
repay borrowings under the Unsecured Credit Facility. In connection with
the sale of the San Carlos property, the Company received a note receivable
in the principal amount of $8,000. The note receivable accrues interest at
8.5% per annum, requires monthly payments of interest only, and matures on
May 1, 2007. No gain or loss on divestiture was recognized in connection
with the property swap transaction.
(4) The adjustments to the pro forma interest expense for the year ended
December 31, 1998 are based upon the Company's pro forma debt balance as of
December 31, 1998 as follows:
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<TABLE>
<CAPTION>
<S> <C>
Unsecured notes:
Balance of $135,000 bearing interest at 7.25%...................$ 9,788
Balance of $25,000 bearing interest at 7.30%.................... 1,825
Mortgage loan balance of $66,094 bearing interest at 8.63%........ 5,703
Unsecured Credit Facility, balance of $301,700 bearing
interest at LIBOR + 1.2% (6.54% at December 31, 1998)........... 19,731
Mortgage notes payable bearing interest at rates ranging
from 6.74% to 8.30%............................................. 2,714
Unused commitment fee based on unadjusted pro forma debt
balance on the Unsecured Credit Facility of $48,300............. 72
Amortization of loan fees......................................... 1,173
Agency fee........................................................ 50
Capitalized interest, based on average historical construction
in process of $221,305 at an effective interest rate of 6.54%... (16,028)
-------
Pro forma interest expense for the year ended
December 31, 1998............................................... $25,028
=======
</TABLE>
(5) Pro forma taxable income for the nine months ended December 31, 1998 was
approximately $41,561.
(6) Pro forma Series B Preferred Stock dividends are based upon 1,623,376
shares outstanding on December 31, 1998, paying dividends at an annual rate
of $1.32 per share. 649,351 shares of Series B Preferred Stock were
converted into Common Stock on a one-for-one basis in July, 1998.
(7) Reflects the incremental effect of the Company's Preferred Stock Offering
of 2,000,000 shares of Series D Preferred Stock, paying dividends at an
annual rate of $2.1875 per share. The net proceeds of approximately $48,125
were used to repay borrowings on the Company's Unsecured Credit Facility.
(8) Basic earnings per share is computed as net income or loss allocable to
common divided by the weighted average number of shares of Common Stock
outstanding, excluding the dilutive effects of stock options and other
potentially dilutive securities.
Diluted earnings per share is computed as net income or loss allocable to
common divided by the weighted average number of shares of Common Stock
outstanding, plus the dilutive effect of stock options and other
potentially dilutive securities.
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