SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
-----------------
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 20, 1996
BEACON PROPERTIES CORPORATION
(Exact name of Registrant as specified in its Charter)
Maryland
(State of Incorporation)
1-12926 04-3224258
(Commission File Number) (IRS Employer Id. Number)
50 Rowes Wharf
Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
(617) 330-1400
(Registrant's telephone number, including area code)
<PAGE>
Item 7. Financial Statements and Exhibits
(a) Financial Statements Under Rule 3-14 of Regulation S-X
Statement of Excess of Revenues over Specific Operating Expenses of
Shoreline Technology Park for the year ended December 31, 1995
and (unaudited) for the nine months ended September 30, 1996
Statement of Excess of Revenues over Specific Operating Expenses of
Lake Marriott Business Park for the year ended December 31, 1995
and (unaudited) for the nine months ended September 30, 1996
Statement of Excess of Revenues over Specific Operating Expenses of
President's Plaza for the year ended December 31, 1995 and
(unaudited) for the nine months ended September 30, 1996
(b) Pro Forma Financial Statements
Pro Forma Condensed Consolidated Balance Sheet as of September 30,
1996 (Unaudited)
Pro Forma Condensed Consolidated Statement of Operations for the Nine
Months Ended September 30, 1996 (Unaudited)
Pro Forma Condensed Consolidated Statement of Operations for the Year
Ended December 31, 1995 (Unaudited)
(c) Exhibits
23.1 Consent of Coopers & Lybrand L.L.P., Independent Accountants.
2
<PAGE>
BEACON PROPERTIES CORPORATION
SIGNATURE
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.
BEACON PROPERTIES CORPORATION
/s/ Robert J. Perriello
-----------------------------------
Robert J. Perriello,
Senior Vice President,
and Chief Financial Officer
Date: March 7, 1997
3
<PAGE>
SHORELINE TECHNOLOGY PARK
MOUNTAIN VIEW, CALIFORNIA
STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Beacon Properties Corporation:
We have audited the accompanying statement of excess of revenues over specific
operating expenses of Shoreline Technology Park in Mountain View, California
(the "Properties") for the year ended December 31, 1995. This financial
statement is the responsibility of the Properties' management. Our
responsibility is to express an opinion on this financial 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 statement of excess of revenues over specific
operating expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As described in Note 2, this financial statement excludes certain income and
expenses which would not be comparable with those resulting from the operations
of the Properties after acquisition by Beacon Properties Corporation. The
accompanying financial statement was prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission and is not
intended to be a complete presentation of the Properties' revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the excess of revenues over specific operating expenses
(exclusive of income and expenses described in Note 2) of Shoreline Technology
Park in Mountain View, California for the year ended December 31, 1995 in
conformity with generally accepted accounting principles.
Boston, Massachusetts
February 6, 1997
F-2
<PAGE>
SHORELINE TECHNOLOGY PARK
MOUNTAIN VIEW, CALIFORNIA
STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
For the Year For the Nine
Ended Months Ended
December 31, 1995 September 30, 1996
----------------- ------------------
(Unaudited)
Revenues:
Base rent $12,971,269 $9,981,436
Recoveries from tenants 1,080,528 823,848
----------- ----------
14,051,797 10,805,284
----------- ----------
Specific operating expenses (Note 2):
General and administrative 31,504 54,500
Repairs and maintenance - 5,879
Insurance 86,183 67,773
Property taxes 1,080,528 823,848
----------- ----------
1,198,215 952,000
----------- ----------
Excess of revenues over
specific operating expenses $12,853,582 $9,853,284
=========== ==========
The accompanying notes are an integral part of the financial statement.
F-3
<PAGE>
SHORELINE TECHNOLOGY PARK
MOUNTAIN VIEW, CALIFORNIA
NOTES TO STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
1. Organization and Significant Accounting Policies:
Description of Properties
Shoreline Technology Park (the "Properties") is an office complex located in
Mountain View, California consisting of twelve office buildings encompassing
approximately 726,508 square feet. Beacon Properties Corporation has acquired
the entire fee interest in the Properties.
Rental Revenues
Rental income is recognized on the straight-line method over the terms of the
related leases. All twelve buildings are occupied by a single tenant. The excess
of recognized rentals over amounts due pursuant to lease terms is recorded as
accrued rent. The impact of the straight-line rent adjustment increased revenues
by approximately $10,400 for the year ended December 31, 1995.
Risks and Uncertainties
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
2. Basis of Accounting:
The accompanying statement of excess of revenues over specific operating
expenses is presented on the accrual basis. This statement has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired or to be acquired.
Accordingly, the statement excludes certain historical income and expenses not
comparable to the operations of the property after acquisition, such as
depreciation expense.
Continued
F-4
<PAGE>
SHORELINE TECHNOLOGY PARK
MOUNTAIN VIEW, CALIFORNIA
NOTES TO STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES, CONTINUED
3. Description of Leasing Arrangements:
The commercial and office space is leased to tenants under leases with terms
that vary in length. Certain of the leases contain real estate tax reimbursement
clauses, operating expense reimbursement clauses and renewal options. Minimum
lease payments to be received during the next five years for noncancelable
operating leases in effect at December 31, 1995 are approximately as follows:
Year Ending December 31,
------------------------
1996 $12,853,786
1997 13,154,684
1998 13,425,042
1999 13,704,509
2000 10,523,608
Thereafter 22,508,580
As of December 31, 1995, one tenant occupied 100% of leasable square feet and
represented 100% of total 1995 revenue.
F-5
<PAGE>
LAKE MARRIOTT BUSINESS PARK
SANTA CLARA, CALIFORNIA
STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
F-6
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Beacon Properties Corporation:
We have audited the accompanying statement of excess of revenues over specific
operating expenses of Lake Marriott Business Park in Santa Clara, California
(the "Properties") for the year ended December 31, 1995. This financial
statement is the responsibility of the Properties' management. Our
responsibility is to express an opinion on this financial 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 statement of excess of revenues over specific
operating expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As described in Note 2, this financial statement excludes certain income and
expenses which would not be comparable with those resulting from the operations
of the Properties after acquisition by Beacon Properties Corporation. The
accompanying financial statement was prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission and is not
intended to be a complete presentation of the Properties' revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the excess of revenues over specific operating expenses
(exclusive of income and expenses described in Note 2) of Lake Marriott Business
Park in Santa Clara, California for the year ended December 31, 1995 in
conformity with generally accepted accounting principles.
Boston, Massachusetts
December 20, 1996
F-7
<PAGE>
LAKE MARRIOTT BUSINESS PARK
SANTA CLARA, CALIFORNIA
STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
For the Year For the Nine
Ended Months Ended
December 31, 1995 September 30, 1996
----------------- ------------------
(Unaudited)
Revenues:
Base rent $3,275,297 $2,949,087
Recoveries from tenants 1,109,714 767,899
--------- ----------
4,385,011 3,716,986
--------- ----------
Specific operating expenses (Note 2):
Utilities 213,982 225,888
Janitorial and cleaning 113,796 79,841
Security 21,431 13,600
General and administrative 64,243 6,114
Repairs and maintenance 158,984 169,317
Property taxes 387,786 305,381
Landscaping 45,723 65,363
--------- ----------
1,005,945 865,504
--------- ----------
Excess of revenues over specific
operating expenses $3,379,066 $2,851,482
========== ==========
The accompanying notes are an integral part of the financial statement.
F-8
<PAGE>
LAKE MARRIOTT BUSINESS PARK
SANTA CLARA, CALIFORNIA
NOTES TO STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
1. Organization and Significant Accounting Policies:
Description of Properties
Lake Marriott Business Park (the "Properties") is an office complex located in
Santa Clara, California consisting of seven office buildings encompassing
approximately 400,000 square feet. Beacon Properties Corporation has acquired
the entire fee interest in the Properties.
Rental Revenues
Rental income is recognized on the straight-line method over the terms of the
related leases. Four buildings are occupied by single tenants. The excess of
recognized rentals over amounts due pursuant to lease terms is recorded as
accrued rent. The impact of the straight-line rent adjustment increased revenues
by approximately $22,000 for the year ended December 31, 1995.
Risks and Uncertainties
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
2. Basis of Accounting:
The accompanying statement of excess of revenues over specific operating
expenses is presented on the accrual basis. This statement has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired or to be acquired.
Accordingly, the statement excludes certain historical income and expenses not
comparable to the operations of the property after acquisition, such as interest
income, management fees and depreciation expense.
Continued
F-9
<PAGE>
LAKE MARRIOTT BUSINESS PARK
SANTA CLARA, CALIFORNIA
NOTES TO STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES, CONTINUED
3. Description of Leasing Arrangements:
The commercial and office space is leased to tenants under leases with terms
that vary in length. Certain of the leases contain real estate tax reimbursement
clauses, operating expense reimbursement clauses and renewal options. Minimum
lease payments to be received during the next five years for noncancelable
operating leases in effect at December 31, 1995 are approximately as follows:
Year Ending December 31,
------------------------
1996 $3,932,603
1997 4,083,269
1998 3,256,589
1999 3,242,228
2000 2,398,305
Thereafter 6,227,788
As of December 31, 1995, three tenants occupied approximately 63% of leasable
square feet and represented 66% of total 1995 base rent revenues.
F-10
<PAGE>
PRESIDENT'S PLAZA
CHICAGO, ILLINOIS
STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
F-11
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Beacon Properties Corporation:
We have audited the accompanying statement of excess of revenues over specific
operating expenses of President's Plaza in Chicago, Illinois (the "Properties")
for the year ended December 31, 1995. This financial statement is the
responsibility of the Properties' management. Our responsibility is to express
an opinion on this financial 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 statement of excess of revenues over specific
operating expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As described in Note 2, this financial statement excludes certain income and
expenses which would not be comparable with those resulting from the operations
of the Properties after acquisition by Beacon Properties Corporation. The
accompanying financial statement was prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission and is not
intended to be a complete presentation of the Properties' revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the excess of revenues over specific operating expenses
(exclusive of income and expenses described in Note 2) of President's Plaza in
Chicago, Illinois for the year ended December 31, 1995 in conformity with
generally accepted accounting principles.
Boston, Massachusetts
December 20, 1996
F-12
<PAGE>
PRESIDENT'S PLAZA
CHICAGO, ILLINOIS
STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
For the Year For the Nine
Ended Months Ended
December 31, 1995 September 30, 1996
----------------- ------------------
(Unaudited)
Revenues:
Base rent $ 6,987,989 $ 7,007,932
Recoveries from tenants 3,146,878 3,059,339
Other income 299,935 356,299
----------- -----------
10,434,802 10,423,570
----------- -----------
Specific operating expenses (Note 2):
Utilities 743,771 841,367
Janitorial and cleaning 615,212 517,416
Security 329,446 251,486
General and administrative 425,062 334,417
Repairs and maintenance 1,279,825 979,558
Insurance 160,718 112,048
Property taxes 3,950,464 2,708,110
Landscaping 103,405 92,531
----------- -----------
7,607,903 5,836,933
----------- -----------
Excess of revenues over specific
operating expenses $ 2,826,899 $ 4,586,637
=========== ===========
The accompanying notes are an integral part of the financial statement.
F-13
<PAGE>
PRESIDENT'S PLAZA
CHICAGO, ILLINOIS
NOTES TO STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
1. Organization and Significant Accounting Policies:
Description of Properties
President's Plaza (the "Properties") is an office portfolio located in Chicago,
Illinois consisting of four office buildings encompassing 790,958 square feet of
office and retail space. Beacon Properties Corporation has acquired the entire
fee interest in the Properties.
Rental Revenues
Rental income is recognized on the straight-line method over the terms of the
related leases. The excess of recognized rentals over amounts due pursuant to
lease terms is recorded as accrued rent. The impact of the straight-line rent
adjustment increased revenues by approximately $1,055,000 for the year ended
December 31, 1995.
Risks and Uncertainties
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
2. Basis of Accounting:
The accompanying statement of excess of revenues over specific operating
expenses is presented on the accrual basis. This statement has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired or to be acquired.
Accordingly, the statement excludes certain historical income and expenses not
comparable to the operations of the property after acquisition, such as lease
buyout expenses, interest income, management fees, depreciation and amortization
expense.
Continued
F-14
<PAGE>
PRESIDENT'S PLAZA
CHICAGO, ILLINOIS
NOTES TO STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES, CONTINUED
3. Description of Leasing Arrangements:
The commercial and office space is leased to tenants under leases with terms
that vary in length. Certain of the leases contain real estate tax reimbursement
clauses, operating expense reimbursement clauses and renewal options. Minimum
lease payments to be received during the next five years for noncancelable
operating leases in effect at December 31, 1995 are approximately as follows:
Year Ending December 31,
------------------------
1996 $5,345,393
1997 5,980,087
1998 6,322,680
1999 6,620,818
2000 6,159,088
Thereafter 31,677,148
As of December 31, 1995, two tenants occupied approximately 24% of leasable
square feet and represented 36% of total 1995 base revenues.
F-15
<PAGE>
BEACON PROPERTIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma Condensed Consolidated Balance Sheet of
Beacon Properties Corporation (the "Company") as of September 30, 1996, is
presented as if the October & November 1996 acquisitions and the December 1996
acquisitions had occurred on September 30, 1996. The pro forma Condensed
Consolidated Statements of Operations are presented as if the Offering, the
acquisition of the Properties acquired since January 1, 1995 (including
Perimeter Center, New York Life and the Fairfax Virginia Portfolios and related
assumption of debt) and the closing of the MetLife Mortgage loan, the October &
November 1996 acquisitions and the December 1996 acquisitions had occurred as of
January 1, 1995; the Company qualified as a REIT, distributed all of its taxable
income and, therefore, incurred no income tax expense during the period.
In management's opinion, all adjustments necessary to reflect the above
discussed transactions have been made. The unaudited pro forma Condensed
Consolidated Balance Sheet and Statement of Operations are not necessarily
indicative of what actual results of operations of the Company would have been
for the period, nor does it purport to represent the Company's results of
operations for future periods.
F-16
<PAGE>
BEACON PROPERTIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma Adjustments
-------------------------------------
Beacon October &
Properties November December
Corporation 1996 1996 Pro Forma
Historical Acquisitions Acquisitions Consolidated
---------- ------------ ------------ ------------
(dollars in thousands)
<S> <C> <C> <C> <C>
ASSETS
Real estate, net $974,676 $352,050 (A) $260,000 (B) $1,586,726
Deferred financing and leasing costs, net 15,908 15,908
Cash and cash equivalents 16,751 55,838 (C) (30,171) (D) 42,418
Mortgage notes receivable 51,490 51,490
Other assets 29,292 (9,000) (E) 20,292
Investments in and note receivable
from joint ventures and corporations 55,890 55,890
----------- --------- --------- -----------
Total assets $1,144,007 $398,888 $229,829 $1,772,724
=========== ========= ========= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage notes payable $440,526 $440,526
Note payable, Credit Facility 18,000 --- (F) 153,000 (G) 171,000
Other liabilities 27,293 27,293
Investment in joint venture 24,467 24,467
----------- --------- --------- -----------
Total liabilities 510,286 153,000 663,286
Minority interest in Operating Partnership 70,098 38,997 (H) 109,095
Stockholders' equity 563,623 398,888 (I) 37,832 (J) 1,000,343
----------- --------- --------- -----------
Total liabilities and stockholders' equity $1,144,007 $398,888 $229,829 $1,772,724
=========== ========= ========= ===========
</TABLE>
Notes:
(A) Acquisition of Rosslyn, Virginia Portfolio, New England Executive
Park, 10960 Wilshire Boulevard and 245 First Street.
(B) Acquisition of Lake Marriott Business Park, Shoreline Technology Park
and President's Plaza.
(C) Excess proceeds from offering.
(D) Cash utilized for acquisitions.
(E) Application of deposits
(F) Credit Facility utilized to acquire certain properties ($175,000) net
of proceeds ($175,000) from Offering.
(G) Credit Facility draw.
(H) Operating Partnership units issued in connection with acquisition of
Presidents Plaza.
(I) Net increase in stockholders' equity:
Proceeds of Offering $421,982
Expenses of Offering (23,094)
--------------
$398,888
==============
(J) Net increase in stockholders' equity:
Proceeds of Offering $37,896
Expenses of Offering (64)
--------------
$37,832
==============
F-17
<PAGE>
BEACON PROPERTIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Beacon October &
Properties New York Life November December
Corporation Perimeter and Fairfax Va. 1996 1996 Pro Forma Pro Forma
Historical Center (A) Portfolios (B) Acquisitions (G) Acquisitions (H) Adjustments Consolidated
---------- ---------- -------------- ---------------- ---------------- ----------- ------------
(dollars in thousands except per share amounts and shares outstanding)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Rental income $97,308 $6,420 19,098 34,118 20,550 $177,494
Management fees 2,248 2,248
Recoveries from tenants 11,001 304 3,788 3,156 4,651 22,900
Mortgage interest income 3,567 611 (I) 4,178
Other income 7,585 208 845 2,639 356 11,633
--------- ------- ------- ------- ------- -------- --------
Total revenue 121,709 6,932 23,731 39,913 25,557 611 218,454
--------- ------- ------- ------- ------- -------- --------
Expenses:
Property expenses 24,607 1,562 4,875 10,195 3,422 44,661
Real estate taxes 12,491 591 1,708 3,452 3,840 22,082
General and administrative 11,963 378 812 1,496 395 250 (J) 15,294
Mortgage interest expense 20,739 1,895 (C) 2,912 (F) 6,986 (K) 32,531
Interest - amortization of
financing costs 1,618 15 (D) 1,633
Depreciation and amortization 21,737 1,196 (E) 4,374 (E) 7,921 (E) 5,025 (E) 40,254
--------- ------- ------- ------- ------- -------- --------
Total expenses 93,155 5,637 14,681 23,064 12,682 7,236 156,455
--------- ------- ------- ------- ------- -------- --------
Income from operations 28,554 1,295 9,050 16,849 12,875 (6,625) 61,998
Equity in net income of joint
ventures and corporations 2,053 2,053(1)
--------- ------- ------- ------- ------- -------- --------
Income before minority interest 30,607 1,295 9,050 16,849 12,875 (6,625) 64,051
Minority interest in Operating
Partnership (4,231) (3,161) (L) (7,392)
--------- ------- ------- ------- ------- -------- --------
Net income before extraordinary
items $26,376 $1,295 $9,050 16,849 12,875 ($9,786) $56,659(2)
========= ======= ======= ======= ======= ======== ========
Common shares outstanding 48,088,655
Net income per common share $1.18
(1) Includes :
Depreciation and amortization $2,998
Amortization of financing costs $673
(2) Company share of Operating Partnership is 88.46%
</TABLE>
See accompanying notes to pro forma condensed consolidated
statement of operations.
F-18
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 1996
(Unaudited)
(A) Results of operations of Perimeter Center for the period ended February 14,
1996.
(B) Results of operations of the Fairfax County Portfolio and the New York
Life Portfolio for the periods ended September 4, 1996 and August 15,
1996, respectively.
(C) Net interest expense associated with the MetLife Mortgage Loan in the
amount of $218 million based on a 7.08% interest rate for the period ended
prior to March 15, 1996.
(D) Amortization of the costs of obtaining the permanent financing at $1.2
million over 10 years.
(E) Detail of depreciation expense by property is presented as follows:
Basis Life Depreciation
----- ---- ------------
Perimeter Center $287,130 30 yrs $1,196
========
Fairfax County Portfolio $69,300 30 yrs $1,568
The New York Life Portfolio 135,000 30 yrs 2,806
--------
$4,374
========
October & November 1996 Acquisitions:
Rosslyn, Virginia Portfolio 89,145 30 yrs $2,229
New England Executive Park 67,500 30 yrs 1,688
245 First Street 40,500 30 yrs 1,013
10960 Wilshire Boulevard 119,700 30 yrs 2,993
--------
$7,921
========
December 1996 Acquisitions:
Lake Marriott Business Park 31,110 30 yrs $778
Shoreline Technology Park 100,650 30 yrs 2,516
Presidents Plaza 69,250 30 yrs 1,731
--------
$5,025
========
(F) Fairfax County Portfolio interest expense on debt assumed for period prior
to acquisition:
Principal Rate Expense
------------ ------ ------------
JOHN MARSHAL $21,068 8.38% $1,197
EJ RANDOLPH (1) 18,016 7.44% 909
NORTHRIDGE 16,306 7.28% 806
------------ ------ ------------
$55,390 $2,912
============ ============
(1) Paid off by Credit Facility proceeds at closing.
F-19
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 1996
(Unaudited)
(G) Results of operations of the Rosslyn, Virginia Portfolio, New England
Executive Park, 245 First Street and 10960 Wilshire Boulevard for the nine
months ended September 30, 1996.
(H) Results of operations of Lake Marriott Business Park, Shoreline
Technology Park and President's Plaza for the nine months ended September
30, 1996.
(I) Interest income related to the acquisition of the Rowes Wharf mortgage.
(J) Additional general and administrative expense attributable to acquisitions.
(K) Credit facility interest expense:
Pro Forma Credit Facility balance $153,000
Average Credit Facility rate through September 30, 1996 7.44%
---------
Pro Forma Credit Facility interest expense full year 11,377
Proration for 9 months 75%
---------
Pro Forma Credit Facility interest expense 9 months 8,533
Less year to date September 30, 1996
Credit Facility interest expense 1,547
---------
Pro Forma adjustment $6,986
=========
(L) Reflects decrease for minority interest (11.54%) in Operating Partnership.
F-20
<PAGE>
BEACON PROPERTIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Beacon October &
Properties Properties New York Life November December Pro Forma
Corporation Acquired Perimeter and Fairfax Va. 1996 1996 Pro Forma Consoli-
Historical In 1995 (A) Center (B) Portfolios (F) Acquisitions(H) Acquisitions(I) Adjustments dated
---------- ----------- ---------- -------------- --------------- --------------- ----------- -----
(dollars in thousands except per share amounts and shares outstanding)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Rental income $71,050 $5,339 $52,117 $30,623 $36,894 $24,649 $220,672
Management fees 2,203 $723 (J) 2,926
Recoveries from tenants 9,742 1,193 2,244 6,308 3,409 5,338 28,234
Mortgage interest income 2,546 3,027 (K) 5,573
Other income 5,502 26 862 1,111 2,758 300 10,559
-------- ------- -------- -------- -------- -------- ------ --------
Total revenue 91,043 6,558 55,223 38,042 43,061 30,287 3,750 267,964
-------- ------- -------- -------- -------- -------- ------ --------
Expenses:
Property expenses 18,090 1,560 12,376 7,485 12,594 3,872 55,977
Real estate taxes 10,217 949 4,107 2,680 4,540 5,420 27,913
General and administrative 9,755 111 2,116 1,254 2,198 521 750 (L) 16,705
Mortgage interest expense 15,226 15,434 (C) 4,438 (G) 4,396 (M) 39,494
Interest - amortization of
financing costs 1,370 120 (D) 1,490
Depreciation and amortization 17,428 1,047 (E) 9,571 (E) 6,810 (E) 10,562 (E) 6,700 (E) 52,118
-------- ------- -------- --------- --------- --------- ------- --------
Total expenses 72,086 3,666 43,724 22,667 29,894 16,513 5,146 193,696
-------- -------- --------- --------- --------- --------- -------- --------
Income from operations 18,957 2,892 11,499 15,375 13,168 13,774 (1,396) 74,268
Equity in net income of joint
ventures and corporations 3,222 1,338 4,560(1)
-------- ------- -------- --------- -------- --------- -------- --------
Income before minority interest 22,179 4,230 11,499 15,375 13,168 13,774 (1,396) 78,828
Minority interest in Operating
Partnership (4,119) (4,978)(N) (9,097)
-------- ------- -------- --------- -------- --------- -------- ---------
Net income before extraordinary
items $18,060 $4,230 $11,499 $15,375 $13,168 $13,774 ($6,375) $69,731(2)
======== ======= ======== ========= ======== ========= ======== ==========
Common shares outstanding 48,088,655
Net income per common share $1.45
(1) Includes :
Depreciation and amortization $3,895
Amortization of financing costs $896
(2) Company share of Operating Partnership is 88.46%
</TABLE>
See accompanying notes to pro forma condensed consolidated statement of
operations.
F-21
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(Unaudited)
(A) Results of operations of properties acquired during 1995 for the period
prior to their acquisition:
<TABLE>
<CAPTION>
Wellesley Westlakes 75-101 2 Oliver Ten Canal
Building 8 Building 2 Federal St. Street Park Total
----------- ---------- ----------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Rental income $308 $1,010 $2,474 $1,547 $5,339
Management fees
Recoveries from tenants 425 112 656 1,193
Mortgage interest income
Other income 7 15 4 26
--------- ------- -------- ------- ------- -------
Total revenue 308 1,442 2,601 2,207 6,558
--------- ------- -------- ------- ------- -------
Expenses:
Property expenses 61 413 573 513 1,560
Real estate taxes 20 89 505 335 949
General and administrative 8 27 18 58 111
Mortgage interest expense
Interest - amortization of financing costs
Depreciation and amortization 50 239 404 354 1,047
--------- ------- -------- ------- ------- -------
Total expenses 138 768 1,500 1,260 3,666
--------- ------- -------- ------- ------- -------
Income from operations 170 674 1,101 947 2,892
Equity in net income of joint
ventures and corporations $1,338 1,338
--------- ------- -------- ------- ------- -------
Income before minority interest 170 674 1,338 1,101 947 4,230
Minority interest in Operating Partnership
--------- ------- -------- ------- ------- -------
Net income before extraordinary item $170 $674 $1,338 $1,101 $947 $4,230
========= ======= ======== ======= ======= =======
(B) Results of operations of Perimeter Center for 1995.
(C) Interest expense associated with the MetLife Mortgage Loan in the amount
of $218 million based on a 7.08% interest rate.
(D) Amortization of the costs of obtaining the permanent financing at $1.2
million over 10 years.
</TABLE>
F-22
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(Unaudited)
(E) Detail of depreciation expense by property is presented as follows:
Basis Life Depreciation
Previously Acquired Properties:
Wellesley Building 8 $4,500 30 yrs $50
Westlakes Building 2 12,306 30 yrs 239
2 Oliver Street 16,174 30 yrs 404
Ten Canal Park 10,609 30 yrs 354
--------
$1,047
========
Perimeter Center $287,130 30 yrs $9,571
========
Fairfax County Portfolio $69,300 30 yrs $2,310
The New York Life Portfolio 135,000 30 yrs 4,500
--------
$6,810
========
October & November 1996 Acquisitions:
Rosslyn, Virginia Portfolio 89,145 30 yrs $2,972
New England Executive Park 67,500 30 yrs 2,250
245 First Street 40,500 30 yrs 1,350
10960 Wilshire Boulevard 119,700 30 yrs 3,990
--------
$10,562
========
December 1996 Acquisitions:
Lake Marriott Business Park 31,110 30 yrs $1,037
Shoreline Technology Park 100,650 30 yrs 3,355
Presidents Plaza 69,250 30 yrs 2,308
--------
$6,700
========
(F) Results of operations of the Fairfax County Portfolio and the New York Life
Portfolio for 1995.
(G) Fairfax County Portfolio interest expense on debt assumed:
Principal Rate Expense
-------- ----- --------
JOHN MARSHAL $21,068 8.38% $1,764
EJ RANDOLPH (1) 18,016 8.25% 1,486
NORTHRIDGE 16,306 7.28% 1,187
-------- -------
$55,390 $4,438
======== ========
(1) Paid off by Credit Facility proceeds at closing.
F-23
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(Unaudited)
(H) Results of operations of the Rosslyn, Virginia Portfolio, New England
Executive Park, 245 First Street and 10960 Wilshire Boulevard for 1995.
(I) Results of operations of Lake Marriott Business Park, Shoreline Technology
Park and Presidents Plaza for 1995.
(J) Management fee from 75-101 Federal Street.
(K) Interest income related to the acquisition of the Rowes Wharf mortgage.
(L) Additional general and administrative expense attributable to acquisitions.
(M) Credit facility interest expense:
Pro Forma Credit Facility balance $153,000
Average 1995 Credit Facility rate 8.25%
--------
Pro Forma Credit Facility interest expense 12,620
Less 1995 historical Credit Facility interest expense 8,224
---------
Pro Forma adjustment $4,396
=========
(N) Reflects decrease for minority interest (11.54%) in Operating Partnership.
F-24
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
of Beacon Properties Corporation on Form S-3 (No. 333-17237) of our report dated
February 6, 1997, on our audit of the statement of excess of revenues over
specific operating expenses of Shoreline Technology Park in Mountain View,
California for the year ended December 31, 1995, which report is included in
this Form 8-K, of our report dated December 20, 1996, on our audit of the
statement of excess of revenues over specific operating expenses of Lake
Marriott Business Park in Santa Clara, California for the year ended December
31, 1995, which report is included in this Form 8-K, and of our report dated
December 20, 1996, on our audit of the statement of excess of revenues over
specific operating expenses of President's Plaza in Chicago, Illinois for the
year ended December 31, 1995, which report is included in this Form 8-K.
We also consent to the reference to our Firm under the caption "Experts" in such
Prospectus.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
March 6, 1997
