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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 9, 1996
WEEKS CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Georgia 011-13254 58-1525322
- -------------------------- --------- ----------
(State of Incorporation) (Commission File Number) (IRS Employer Identification No.)
</TABLE>
4497 Park Drive, Norcross, Georgia 30093
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(Address of principal executive offices, including zip code)
(770) 923-4076
--------------
(Registrant's telephone number, including area code)
Page 1 of 16
Exhibit Index Located on Page 4
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
The financial statements required by Item 7(a) relating to the
acquisition of 12 industrial properties in Atlanta, Georgia from the
Principal Mutual Life Insurance Company (the "Principal Properties")
described in Item 2 of Form 8-K of Weeks Corporation dated August 9,
1996 are attached hereto as Exhibit A and incorporated herein by this
reference.
(b) Pro Forma Financial Information
The unaudited pro forma financial information required by Item 7(b)
relating to the Principal Properties described in Item 2 of Form 8-K
of Weeks Corporation dated August 9, 1996 is attached hereto as
Exhibit B and incorporated herein by this reference.
(c) Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description
---------------------------------------------------------------------
<S> <C>
A Financial statements required by Item 7(a).
B Pro forma financial information required by Item 7(b).
</TABLE>
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WEEKS CORPORATION
Registrant
Date: October 18, 1996 /s/ David P. Stockert
-------------------------
David P. Stockert
Senior Vice President and
Chief Financial Officer
3
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description Page
- --------- ----------------------------------------------------- ----
<S> <C> <C>
A Financial statements required by Item 7(a) 5
B Pro forma financial information required by Item 7(b) 10
</TABLE>
4
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Exhibit A
PRINCIPAL PROPERTIES
COMBINED STATEMENTS OF REVENUE AND
CERTAIN EXPENSES
FOR THE YEAR
ENDED DECEMBER 31, 1995 AND
FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
5
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of Weeks Corporation:
We have audited the accompanying combined statement of revenue and certain
expenses of the Principal Properties, as defined in Note 1, for the year ended
December 31, 1995. This financial statement is the responsibility of
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 revenue and certain expenses is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenue and certain
expenses. 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 1, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the
Principal Properties after their acquisition by Weeks Corporation. The
accompanying combined statement of revenue and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in the Weeks Corporation Form 8-K and is not
intended to be a complete presentation of the Principal Properties' revenue and
expenses.
In our opinion, the combined statement of revenue and certain expenses presents
fairly, in all material respects, the revenue and certain expenses (exclusive of
expenses described in Note 1) of the Principal Properties for the year ended
December 31, 1995 in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
September 27, 1996
6
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PRINCIPAL PROPERTIES
COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995 AND
FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Six Months
Ended June 30, Year Ended
1996 December 31,
(Unaudited) 1995
-------------- ------------
<S> <C> <C>
Revenue:
Rental income $1,639,353 $3,234,613
Tenant reimbursements 137,111 281,011
-------------- ------------
1,776,464 3,515,624
-------------- ------------
Certain Expenses:
Property operating and
maintenance 197,214 455,166
Real estate taxes 146,028 292,462
-------------- ------------
343,242 747,628
-------------- ------------
Revenue in Excess of
Certain Expenses $1,433,222 $2,767,996
============== ============
</TABLE>
The accompanying notes are an integral part of these statements.
7
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PRINCIPAL PROPERTIES
NOTES TO COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995 AND
FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Description of Real Estate Properties Acquired
The accompanying financial statements include the combined operations (see
"Basis of Presentation" below) of 12 industrial properties (the "Principal
Properties") owned by Principal Mutual Life Insurance Company, a party not
related to Weeks Corporation (the "Company") or Weeks Realty, L.P. (the
"Operating Partnership").
On August 9, 1996, the Company, through the Operating Partnership, acquired
100 percent of the land and buildings of each of these properties:
<TABLE>
<CAPTION>
Property Name Location Description
--------------------------------------------------------------------------------------------------
<S> <C> <C>
1331 Capital Circle Atlanta, Georgia 79,667 square foot service center building
1335 Capital Circle Atlanta, Georgia 59,468 square foot service center building
2725 Northwoods Parkway Atlanta, Georgia 76,686 square foot business distribution building
2755 Northwoods Parkway Atlanta, Georgia 48,270 square foot business distribution building
2775 Northwoods Parkway Atlanta, Georgia 32,192 square foot business distribution building
3040 Northwoods Parkway Atlanta, Georgia 50,480 square foot business distribution building
3055 Northwoods Parkway Atlanta, Georgia 31,946 square foot business distribution building
3075 Northwoods Parkway Atlanta, Georgia 41,420 square foot service center building
3100 Northwoods Parkway Atlanta, Georgia 39,728 square foot service center building
3155 Northwoods Parkway Atlanta, Georgia 40,530 square foot service center building
3175 Northwoods Parkway Atlanta, Georgia 33,405 square foot service center building
6525 Jimmy Carter Blvd. Atlanta, Georgia 92,735 square foot business distribution building
</TABLE>
Basis of Presentation
The accompanying combined financial statements have been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired. Accordingly, the
statements exclude certain historical expenses not comparable to the
operations of the Principal Properties after their acquisition by the
Operating Partnership, such as property management fees, interest,
depreciation, amortization and other costs not directly related to the future
operations of the Principal Properties.
Use of Estimates
The preparation of the combined statements of revenue and certain expenses in
accordance with generally accepted accounting principles requires management
to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ from
those estimates.
Revenue Recognition
All leases are classified as operating leases, and rental revenue is
recognized on a straight-line basis over the terms of the leases.
8
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PRINCIPAL PROPERTIES
NOTES TO COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995 AND
FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
2. LEASING ACTIVITY:
Future minimum rentals due under noncancelable operating leases with tenants as
of December 31, 1996, are as follows:
<TABLE>
<CAPTION>
Year Amount
---------- -----------
<S> <C>
1996 $ 3,323,588
1997 3,265,094
1998 2,745,886
1999 2,030,684
2000 1,270,735
Thereafter 757,589
-----------
$13,393,576
===========
</TABLE>
In addition to minimum rental payments, tenants pay reimbursements for their pro
rata share of specified operating expenses, which amounted to $137,111 for the
six months ended June 30, 1996 and $281,011 for the year ended December 31,
1995. Certain leases contain options to renew.
During the year ended December 31, 1995, 11% and 10% of rental income was
received from two tenants, respectively. These leases expire in 1999 and 2001,
respectively.
9
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EXHIBIT B
WEEKS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
The unaudited condensed consolidated statements of operations are presented as
if the Company acquired the Principal Properties (described in the Company's
Current Report on Form 8-K dated August 9, 1996), as of January 1, 1995. In
management's opinion, all adjustments necessary to present fairly the effects of
the acquisition of the Principal Properties have been made.
These unaudited pro forma condensed consolidated statements of operations should
be read in conjunction with unaudited pro forma condensed consolidated balance
sheet of the Company, the consolidated financial statements and accompanying
notes thereto of the Company included in its Annual Report on Form 10-K for the
year ended December 31, 1995, and the unaudited condensed consolidated financial
statements and accompanying notes thereto of the Company included in its June
30, 1996 Quarterly Report on Form 10-Q.
The unaudited pro forma condensed consolidated statements of operations are not
necessarily indicative of what the actual results of operations of the Company
would have been assuming the Company had acquired the Principal Properties as of
the beginning of each period presented, nor do they purport to represent the
results of operations for future periods.
10
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WEEKS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Company Principal Pro Forma
Historical/(a)/ Properties/(b)/ Adjustments Pro Forma
--------------- --------------- ------------- ---------
<S> <C> <C> <C> <C>
Revenue
Rental income $21,943 $1,639 $ -- $23,582
Tenant reimbursements 2,007 137 -- 2,144
Income from direct
financing lease 384 -- -- 384
Other 174 -- -- 174
--------------- --------------- ------------- ---------
Total Revenue 24,508 1,776 -- 26,284
Expenses
Property operating
and maintenance 2,687 197 -- 2,884
Real estate taxes 2,153 146 -- 2,299
Depreciation and amortization 6,000 -- 516/(c)/ 6,516
Interest 4,955 -- 1,083/(d)/ 6,038
Amortization of deferred
financing costs 421 -- -- 421
General and administrative 1,414 -- -- 1,414
--------------- --------------- ------------- ---------
Total Expenses 17,630 343 1,599 19,572
--------------- --------------- ------------- ---------
Operating Income 6,878 1,433 (1,599) 6,712
Interest income 198 -- -- 198
Equity in earnings of
unconsolidated subsidiaries 543 -- -- 543
--------------- --------------- ------------- ---------
Income before Minority Interests 7,619 1,433 (1,599) 7,453
Minority Interests (1,426) -- 31/(e)/ (1,395)
--------------- --------------- ------------- ---------
Net Income $ 6,193 $1,433 $(1,568) $ 6,058
=============== =============== ============= =========
Per Share Data:
Net income $0.56 $0.54
======= =========
Weighted average
shares outstanding 11,156 11,156
======= =========
</TABLE>
11
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WEEKS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Company Principal Pro Forma
Historical/(a)/ Properties/(b)/ Adjustments Pro Forma
--------------- --------------- ------------ ---------
<S> <C> <C> <C> <C>
Revenue
Rental income $31,217 $3,235 $ -- $34,452
Tenant reimbursements 2,464 281 -- 2,745
Income from direct
financing lease 776 -- -- 776
Other 480 -- -- 480
--------------- --------------- ------------ ---------
Total Revenue 34,937 3,516 -- 38,453
--------------- --------------- ------------ ---------
Expenses
Property operating
and maintenance 3,565 455 -- 4,020
Real estate taxes 2,997 293 -- 3,290
Depreciation and amortization 8,177 -- 1,033/(c)/ 9,210
Interest 8,106 -- 2,167/(d)/ 10,273
Amortization of deferred
financing costs 691 -- -- 691
General and administrative 1,848 -- -- 1,848
--------------- --------------- ------------ ---------
Total Expenses 25,384 748 3,200 29,332
--------------- --------------- ------------ ---------
Operating Income 9,553 2,768 (3,200) 9,121
Interest income 334 -- -- 334
Equity in earnings of
unconsolidated subsidiaries 1,220 -- -- 1,220
--------------- --------------- ------------ ---------
Income before Minority Interests 11,107 2,768 (3,200) 10,675
Minority Interests (2,681) -- 104/(e)/ (2,577)
--------------- --------------- ------------ ---------
Net Income $ 8,426 $2,768 $(3,096) $ 8,098
=============== =============== ============ =========
Per Share Data:
Net income $1.03 $0.99
======= =========
Weighted average
shares outstanding 8,171 8,171
======= =========
</TABLE>
12
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WEEKS CORPORATION
NOTES AND ASSUMPTIONS TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(a) Represents the Company's condensed consolidated statement of operations
contained in its Quarterly Report on Form 10-Q for the six months ended
June 30, 1996, and the Company's consolidated statement of operations
contained in its Annual Report on Form 10-K for the year ended December 31,
1995.
(b) Represents adjustments to reflect rental income, tenant reimbursements,
real estate taxes and property operating and maintenance expenses for the
Principal Properties for the periods indicated.
(c) Represents the adjustment to reflect depreciation expense based upon the
assumed allocation of the acquisition price to land, buildings and
improvements using a 35 year life for buildings and the life of the lease
for tenant improvements for the periods indicated.
(d) Represents increased interest expense associated with borrowings utilized
to acquire the Principal Properties. Amounts reflect additional borrowings
under the Company's revolving credit facility of $30.9 million at a
weighted average interest rate of 7.0%. If interest rates under the
revolving credit facility fluctuated .125%, interest costs on the pro forma
credit facility borrowings would increase or decrease by approximately
$39,000 on an annualized basis.
(e) Represents the adjustment necessary to decrease the pro forma consolidated
minority interest amount to reflect the weighted average ownership
percentage of the unitholders in the Operating Partnership of 18.7% for the
six months ended June 30, 1996 and the weighted average percentage of 24.1%
for the year ended December 31, 1995.
13
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WEEKS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1996
(UNAUDITED)
The unaudited pro forma condensed consolidated balance sheet is presented as if
the acquisition of the Principal Properties had occurred as of June 30, 1996.
The unaudited pro forma condensed consolidated balance sheet is not necessarily
indicative of what the actual financial position would have been at June 30,
1996, nor does it purport to represent the future financial position of the
Company.
The unaudited pro forma condensed consolidated balance sheet should be read in
conjunction with the unaudited pro forma condensed consolidated statements of
operations of the Company, the consolidated financial statements and
accompanying notes thereto of the Company included in its Annual Report on Form
10-K for the year ended December 31, 1995, and the unaudited condensed
consolidated financial statements and accompanying notes thereto of the Company
included in its June 30, 1996 Quarterly Report on Form 10-Q.
14
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WEEKS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1996
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Company Principal
Historical/(a)/ Properties Pro Forma
--------------- ---------- ---------
<S> <C> <C> <C>
ASSETS
Real estate assets, net $313,446 30,955/(b)/ $344,401
Cash and cash equivalents 107 -- 107
Direct financing lease 5,188 -- 5,188
Deferred costs, net 9,486 -- 9,486
Investments in and notes receivable
from unconcolidated subsidiaries 7,639 -- 7,639
Receivables and other assets 11,929 -- 11,929
--------------- ---------- ---------
Total Assets $347,795 $30,955 $378,750
=============== ========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage notes payable $112,785 $ -- $112,785
Bank credit facility borrowings 65,685 30,955/(b)/ 96,640
Accounts payable
and accrued expenses 7,250 -- 7,250
Other liabilities 1,819 -- 1,819
--------------- ---------- ---------
Total Liabilities 187,539 30,955 218,494
--------------- ---------- ---------
Minority Interests in
Operating Partnership 30,034 -- 30,034
--------------- ---------- ---------
Shareholders' equity:
Common stock 112 -- 112
Preferred stock -- -- --
Additional paid-in capital 191,263 -- 191,263
Accumulated deficit (61,153) -- (61,153)
--------------- ---------- ---------
Total shareholders' equity 130,222 -- (61,153)
--------------- ---------- ---------
Total Liabilities
and Shareholders' Equity $347,795 $30,955 $378,750
=============== ========== =========
</TABLE>
15
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WEEKS CORPORATION
NOTES AND ASSUMPTIONS TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED BALANCE SHEET
(a) Represents the Company's condensed consolidated balance sheet contained in
the Company's Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 1996.
(b) Represents the aggregate purchase price, including closing costs, of
$30,955,000 for the Principal Properties. The aggregate purchase price was
paid in cash funded through borrowings under the Company's revolving credit
facility.
16
