<PAGE>
UNITED STATES
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): October 3, 1997
WEEKS CORPORATION
(Exact name of registrant as specified in its charter)
Georgia 011-13254 58-1525322
------- --------- ----------
(State of Incorporation) (Commission File (IRS Employer
Number) Identification No.)
4497 Park Drive, Norcross, Georgia 30093
----------------------------------------
(Address of principal executive offices, including zip code)
(770) 923-4076
--------------
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
In accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired under Rule 3-14 of
Regulation S-X, the following audited and unaudited statements of revenues and
certain expenses and pro forma financial information relating to Weeks
Corporation's (the "Company") acquisition of certain real estate properties of
NWI Warehouse Group, L.P. ("NWI") and Lichtin Properties, Inc. and its
affiliated entities ("Lichtin") are attached as exhibits to this Current Report.
During the period from January 1, 1997 through the date of this Current Report,
the Company through its 78% majority owned subsidiary, Weeks Realty, L.P. (the
"Operating Partnership") acquired 13 industrial properties located in Nashville,
Tennessee and the Research Triangle area of North Carolina from NWI and Lichtin,
respectively, for aggregate acquisition consideration of approximately $49.4
million, including closing costs and acquisition expenses.
The acquisition prices were determined through arm's length negotiations between
the Operating Partnership and NWI and Lichtin after an evaluation of the
properties' physical condition, lease characteristics, operating expense rates
and future capital improvement needs. The aggregate acquisition consideration
consisted of assumed mortgage indebtedness of approximately $24.0 million, the
assumption and repayment of other indebtedness and the payment of cash through
borrowings under the Company's revolving credit facility with Wachovia Bank of
Georgia, N.A. totaling approximately $9.2 million, and units of partnership
interest in the Operating Partnership valued at $16.2 million. The NWI real
estate properties were acquired pursuant to the Contribution Agreement for
Development Properties between the Operating Partnership and NWI dated November
1, 1996, and the Lichtin real estate properties were acquired pursuant to the
Contribution Agreement for Completed Properties -- Lichtin Portfolio and the
Contribution Agreement for Northern Telecom Properties between the Operating
Partnership and Lichtin, both dated December 31, 1996.
On November 30, 1996 and December 31, 1996, respectively, the Company through
the Operating Partnership, acquired the business operations of NWI and Lichtin
and a significant portion of their industrial and suburban office portfolios.
In conjunction with the initial closing transactions, the Company agreed,
subject to completion of certain properties under development and the updating
of its due diligence procedures, to acquire these additional industrial
properties from NWI and Lichtin pursuant to the terms of the acquisition
agreements referred to above.
The 13 properties total approximately 959,000 square feet of leasable space with
11 of the properties located in the Research Triangle area of North Carolina and
two of the properties located in Nashville, Tennessee. Four of the properties
are multi-tenant business distribution buildings, eight of the properties are
business service buildings (five plus a portion of a sixth building are leased
to Northern Telecom, Ltd. and three are multi-tenant buildings) and the final
property is a multi-tenant bulk distribution building. The properties were
constructed between 1982 and 1995. The properties are leased to a number of
tenants and were on average 97% occupied at June 30, 1997. The Operating
Partnership expects to continue to operate the properties as business
distribution, business service and bulk distribution buildings, as applicable,
held for lease to tenants.
2
<PAGE>
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
The financial statements required by Item 7(a)(3) relating to the
acquisition of 11 industrial properties in the Research Triangle
area of North Carolina from Lichtin (the "Lichtin 1997 Acquisition
Properties") and the acquisition of two industrial properties in
Nashville, Tennessee from NWI (the "NWI 1997 Acquisition
Properties") described in Item 5 are attached hereto as Exhibits A
and B 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 NWI and Lichtin 1997 Acquisition Properties
described in Item 5 is attached hereto as Exhibit C and incorporated
herein by this reference.
(c) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
-----------------------------------------------------------------
<S> <C>
A Financial statements of the Lichtin 1997
Acquisition Properties required by Item 7(a)(3).
B Financial statements of the NWI 1997 Acquisition
Properties required by Item 7(a)(3).
C Pro forma financial information required by Item
7(b).
</TABLE>
3
<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 hereunto duly authorized.
WEEKS CORPORATION
Registrant
Date: October 3, 1997 /s/ David P. Stockert
---------------------------
David P. Stockert
Senior Vice President and
Chief Financial Officer
4
<PAGE>
Index to Exhibits
<TABLE>
<CAPTION>
Exhibit Description Page
------- ----------- ----
<S> <C> <C>
A Financial statements of the Lichtin 1997
Acquisition Properties required by Item 7(a)(3) 6
B Financial statements of the NWI 1997
Acquisition Properties required by Item 7(a)(3) 11
C Pro forma financial information required by Item 7(b) 16
</TABLE>
5
<PAGE>
Exhibit A
LICHTIN 1997 ACQUISITION PROPERTIES
(AS DEFINED IN NOTE 1)
COMBINED STATEMENTS OF REVENUE AND
CERTAIN EXPENSES FOR THE YEARS
ENDED DECEMBER 31, 1996, 1995 AND 1994 AND
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
6
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of Weeks Corporation:
We have audited the accompanying combined statements of revenue and certain
expenses of the Lichtin 1997 Acquisition Properties, as defined in Note 1, for
each of the three years in the period ended December 31, 1996. These financial
statements are the responsibility of management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statements of revenue and certain
expenses are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statements 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
audits provide a reasonable basis for our opinion.
As described in Note 1, these financial statements exclude certain expenses that
would not be comparable with those resulting from the operations of the Lichtin
1997 Acquisition Properties after their acquisition by Weeks Corporation. The
accompanying combined statements of revenue and certain expenses were prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission for inclusion in Weeks Corporation's Form 8-K and are
not intended to be a complete presentation of the Lichtin 1997 Acquisition
Properties' revenue and expenses.
In our opinion, the combined statements of revenue and certain expenses present
fairly, in all material respects, the revenue and certain expenses (exclusive of
expenses described in Note 1) of the Lichtin 1997 Acquisition Properties for
each of the three years in the period ended December 31, 1996 in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
September 8, 1997
7
<PAGE>
LICHTIN 1997 ACQUISITION PROPERTIES
(AS DEFINED IN NOTE 1)
COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Six Months Year Ended Year Ended Year Ended
Ended June 30, December 31, December 31, December 31,
(In thousands) 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Revenue:
Rental income $1,952 $4,347 $4,670 $4,555
Tenant reimbursements 1,067 2,187 2,362 2,408
- -----------------------------------------------------------------------------------------
3,019 6,534 7,032 6,963
- -----------------------------------------------------------------------------------------
Certain Expenses:
Property operating and
maintenance 1,023 2,100 2,241 2,302
Real estate taxes 171 381 381 418
- -----------------------------------------------------------------------------------------
1,194 2,481 2,622 2,720
- -----------------------------------------------------------------------------------------
Revenue in Excess of
Certain Expenses $1,825 $4,053 $4,410 $4,243
=========================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
LICHTIN 1997 ACQUISITION PROPERTIES
NOTES TO COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
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 11 industrial properties (the "Lichtin
1997 Acquisition Properties") located in the Research Triangle area of North
Carolina and owned by entities affiliated with Lichtin Properties, Inc.
("Lichtin"). The Lichtin entities are a related party of Weeks Corporation
(the "Company") and Weeks Realty, L.P. (the "Operating Partnership")
resulting from their ownership interests in the Company and the Operating
Partnership.
On December 31, 1996, the Company, through the Operating Partnership,
acquired the business operations of Lichtin and a significant portion of its
industrial and suburban office portfolio. In conjunction with the initial
closing transaction, the Company agreed, subject to completion of certain
properties under development and the updating of its due diligence
procedures, to acquire additional industrial and suburban office properties
from Lichtin. As detailed in the table below, the Company has acquired the
following properties from Lichtin during 1997 on the dates detailed below.
<TABLE>
<CAPTION>
Date Year Square
Acquired Property Name Constructed Feet Property Type
--------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
1/31/97 409A Airport Blvd. 1982 85,129 Business distribution
1/31/97 409B Airport Blvd. 1983 42,712 Business distribution
1/31/97 409C Airport Blvd 1986 26,215 Business distribution
7/1/97 100 Perimeter Park Dr. 1987 55,664 Service center
7/1/97 200 Perimeter Park Dr. 1987 55,664 Service center
7/1/97 300 Perimeter Park Dr. 1986 55,664 Service center
7/1/97 400 Perimeter Park Dr. 1983 74,088 Service center
7/1/97 500 Perimeter Park Dr. 1985 74,017 Service center
7/1/97 800 Perimeter Park Dr. 1984 55,637 Service center
7/1/97 1000 Perimeter Park Dr. 1982 56,436 Service center
8/1/97 1100 Perimeter Park Dr. 1990 84,950 Service center
</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 Lichtin 1997 Acquisition 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 Lichtin 1997 Acquisition Properties.
9
<PAGE>
The unaudited combined financial statement for the period from January 1,
1997 to the earlier of the building acquisition dates or June 30, 1997 has
been included to comply with the applicable rules and regulations of the
Securities and Exchange Commission and is not intended to be a complete
presentation of historical revenue and certain expenses for such properties
for any period other than as defined herein. The historical revenue and
certain expenses of the above listed properties subsequent to their
acquisition dates have been excluded from this financial statement as such
amounts are included in the historical financial statements of the Company.
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.
2. LEASING ACTIVITY:
Future minimum rentals due under noncancelable operating leases with tenants
as of December 31, 1996, are as follows (in thousands):
<TABLE>
<CAPTION>
------------------------------------------------------------------------
Year Amount
------------------------------------------------------------------------
<S> <C>
1997 $ 4,147
1998 3,843
1999 3,616
2000 2,642
2001 288
Thereafter 199
------------------------------------------------------------------------
$ 14,735
------------------------------------------------------------------------
</TABLE>
In addition to minimum rental payments, tenants pay reimbursements for their
pro rata share of specified operating expenses, which amounted to $1,067,000
for the six months ended June 30, 1997 (unaudited) and $2,187,000,
$2,362,000 and $2,408,000 for the years ended December 31, 1996, 1995 and
1994, respectively. Certain leases contain options to renew.
During the years ended December 31, 1996, 1995 and 1994, respectively, 64%,
60% and 62% of rental revenues were received from one tenant (Northern
Telecom, Ltd.), which occupies space in six of the buildings. The lease for
these spaces expires in July 2005 and includes an option for the tenant to
terminate the lease in June 2000 subject to the payment of termination fees
and certain space restoration costs. Future minimum rents, excluding the
termination fee of $634,000 included in 2000, would be $3,400,000,
$3,070,000 and $9,938,000 for 2000, 2001 and the periods thereafter,
respectively, if the tenant discussed herein does not exercise its early
termination option in 2000.
10
<PAGE>
Exhibit B
NWI 1997 ACQUISITION PROPERTIES
(AS DEFINED IN NOTE 1)
COMBINED STATEMENTS OF REVENUE AND
CERTAIN EXPENSES FOR THE YEAR
ENDED DECEMBER 31, 1996, FOR THE PERIOD FROM
AUGUST 1, 1995 (THE RENTAL COMMENCEMENT DATE) TO DECEMBER 31, 1995
AND FOR THE THREE MONTHS ENDED MARCH 31, 1997 (UNAUDITED)
11
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of Weeks Corporation:
We have audited the accompanying combined statements of revenue and certain
expenses of the NWI 1997 Acquisition Properties, as defined in Note 1, for each
of the year ended December 31, 1996, and for the period from August 1, 1995 (the
rental commencement date) to December 31, 1995. These financial statements are
the responsibility of management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statements of revenue and certain
expenses are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statements 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
audits provide a reasonable basis for our opinion.
As described in Note 1, these financial statements exclude certain expenses that
would not be comparable with those resulting from the operations of the NWI 1997
Acquisition Properties after their acquisition by Weeks Corporation. The
accompanying combined statements of revenue and certain expenses were prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission for inclusion in Weeks Corporation's Form 8-K and are
not intended to be a complete presentation of the NWI 1997 Acquisition
Properties' revenue and expenses.
In our opinion, the combined statements of revenue and certain expenses present
fairly, in all material respects, the revenue and certain expenses (exclusive of
expenses described in Note 1) of the NWI 1997 Acquisition Properties for the
year ended December 31, 1996, and for the period from August 1, 1995 (the rental
commencement date) to December 31, 1995, in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
September 8, 1997
12
<PAGE>
NWI 1997 ACQUISITION PROPERTIES
(AS DEFINED IN NOTE 1)
COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Period From
Three Months Year Ended Aug. 1, 1995
Ended Mar. 31, Dec. 31, to Dec. 31,
(In thousands) 1997 1996 1995
- -----------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C>
Revenue:
Rental income $ 231 $ 702 $ 122
Tenant reimbursements 49 114 12
- -----------------------------------------------------------------------------
280 816 134
- -----------------------------------------------------------------------------
Certain Expenses:
Property operating and
maintenance 27 110 29
Real estate taxes 24 52 4
- -----------------------------------------------------------------------------
51 162 33
- -----------------------------------------------------------------------------
Revenue in Excess of
Certain Expenses $ 229 $ 654 $ 101
=============================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
13
<PAGE>
NWI 1997 ACQUISITION PROPERTIES
NOTES TO COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
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 two industrial properties (the "NWI 1997
Acquisition Properties") located in Nashville, Tennessee and owned by NWI
Warehouse Group, L.P. NWI is a related party of Weeks Corporation (the
"Company") and Weeks Realty, L.P. (the "Operating Partnership") resulting
from its ownership interests in the Company and the Operating Partnership.
On November 30, 1996, the Company, through the Operating Partnership,
acquired the business operations of NWI and a significant portion of its
industrial property portfolio. In conjunction with the initial closing
transactions, the Company agreed, subject to completion of certain
properties under development and the updating of its due diligence
procedures, to acquire additional industrial properties from NWI. As
detailed in the table below, the Company has acquired the following
properties from NWI during 1997 on the dates detailed below.
<TABLE>
<CAPTION>
Date Year Square
Acquired Property Name Constructed Feet Property Type
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
3/31/97 277 Mallory Station Rd. 1995 127,285 Business distribution
3/31/97 735 Melrose Ave. 1995 165,902 Bulk warehouse
</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 NWI 1997 Acquisition 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 NWI 1997 Acquisition Properties.
The NWI 1997 Acquisition Properties commenced rental operations on August 1,
1995. In periods prior to August 1, 1995, the buildings were under
development. As such, the accompanying statements of revenue and certain
expenses reflect only periods subsequent to the commencement of rental
operations.
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.
14
<PAGE>
2. LEASING ACTIVITY:
Future minimum rentals due under noncancelable operating leases with tenants
as of December 31, 1996, are as follows (in thousands):
<TABLE>
<CAPTION>
---------------------------------------------------------------
Year Amount
---------------------------------------------------------------
<S> <C>
1997 $ 904
1998 901
1999 881
2000 722
2001 312
Thereafter 584
---------------------------------------------------------------
$4,304
---------------------------------------------------------------
</TABLE>
In addition to minimum rental payments, tenants pay reimbursements for their pro
rata share of specified operating expenses, which amounted to $49,000 for the
three months ended March 31, 1997 (unaudited), $114,000 for the year ended
December 31, 1996, and $12,000 for the period from August 1, 1995 to December
31, 1995. Certain leases contain options to renew.
15
<PAGE>
Exhibit C
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 NWI and Lichtin 1997 Acquisition Properties as
described herein, as of January 1, 1996. The unaudited combined results of
operations of the NWI and Lichtin 1997 Acquisition Properties for the six months
ended June 30, 1997 include the historical revenue and certain operating
expenses of the properties through their respective acquisition dates (see Note
1 to the combined statements of revenue and certain expenses included herein as
Exhibits A and B). The actual operating results of the acquired properties
subsequent to their acquisition dates are included in the historical financial
statements of the Company. In management's opinion, all adjustments necessary
to present fairly the effects of the acquisition of the NWI and Lichtin 1997
Acquisition Properties have been made.
These unaudited pro forma condensed consolidated statements of operations should
be read in conjunction with the unaudited pro forma condensed consolidated
balance sheet of the Company included herein, 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, 1996, and the unaudited
condensed consolidated financial statements and accompanying notes thereto of
the Company included in its June 30, 1997 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 NWI and Lichtin 1997
Acquisition Properties as of the beginning of each period presented, nor do they
purport to represent the results of operations for future periods.
16
<PAGE>
Weeks Corporation
Pro Forma Condensed Consolidated Statement of Operations
For the Six Months Ended June 30, 1997
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Lichtin 1997 NWI 1997
Company Acquisition Acquisition Pro Forma
Historical(a) Properties(b) Properties(b) Adjustments Pro Forma
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue
Rental income $36,279 $1,952 $231 $ -- $38,462
Tenant reimbursements 4,416 1,067 49 -- 5,532
Direct financing lease 376 -- -- -- 376
Other 267 -- -- -- 267
- ------------------------------------------------------------------------------------------------------------------------
41,338 3,019 280 -- 44,637
- ------------------------------------------------------------------------------------------------------------------------
Expenses
Property operating
and maintenance 4,622 1,023 27 -- 5,672
Real estate taxes 3,467 171 24 -- 3,662
Depreciation and amortization 11,044 -- -- 587(c) 11,631
Interest 9,554 -- -- 1,271(d) 10,825
Amortization of deferred
financing costs 452 -- -- -- 452
General and administrative 2,419 -- -- -- 2,419
- ------------------------------------------------------------------------------------------------------------------------
31,558 1,194 51 1,858 34,661
- ------------------------------------------------------------------------------------------------------------------------
Income before equity in earnings of
unconsolidated subsidiaries,
interest income and gain on sale
of real estate asset 9,780 1,825 229 (1,858) 9,976
Equity in earnings of unconsolidated
subsidiaries 1,224 -- -- -- 1,224
Interest income 543 -- -- -- 543
Gain on sale of real estate asset 209 -- -- -- 209
- ------------------------------------------------------------------------------------------------------------------------
Income before minority interests 11,756 1,825 229 (1,858) 11,952
Minority interests (2,850) -- -- (200)/(e)/ (3,050)
- ------------------------------------------------------------------------------------------------------------------------
Net income $ 8,906 $1,825 $229 $(2,058) $ 8,902
- ------------------------------------------------------------------------------------------------------------------------
Per Share Data:
Net income $0.59 $0.59
- ------------------------------------------------------------------------------------------------------------------------
Weighted average shares outstanding 14,994 14,994
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
Weeks Corporation
Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 1996
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Lichtin 1997 NWI 1997
Company Acquisition Acquisition Pro Forma
Historical(a) Properties(b) Properties(b) Adjustments Pro Forma
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue
Rental $48,162 $4,347 $702 $ -- $53,211
Tenant reimbursements 4,517 2,187 114 -- 6,818
Direct financing lease 768 -- -- -- 768
Other 436 -- -- -- 436
- ------------------------------------------------------------------------------------------------------------------------
53,883 6,534 816 -- 61,233
- ------------------------------------------------------------------------------------------------------------------------
Expenses
Property operating
and maintenance 6,025 2,100 110 -- 8,235
Real estate taxes 4,725 381 52 -- 5,158
Depreciation and amortization 13,474 -- -- 1,412(c) 14,886
Interest 11,779 -- -- 2,813(d) 14,592
Amortization of deferred
financing costs 864 -- -- -- 864
General and administrative 3,039 -- -- -- 3,039
- ------------------------------------------------------------------------------------------------------------------------
39,906 2,481 162 4,225 46,774
- ------------------------------------------------------------------------------------------------------------------------
Income before equity in earnings of
unconsolidated subsidiaries and
interest income 13,977 4,053 654 (4,225) 14,459
Equity in earnings of
unconsolidated subsidiaries 1,340 -- -- -- 1,340
Interest income 492 -- -- -- 492
- ------------------------------------------------------------------------------------------------------------------------
Income before minority interests 15,809 4,053 654 (4,225) 16,291
Minority interests (3,064) -- -- (657)(e) (3,721)
- ------------------------------------------------------------------------------------------------------------------------
Net income $12,745 $4,053 $654 $(4,882) $12,570
- ------------------------------------------------------------------------------------------------------------------------
Per Share Data:
Net Income $ 1.11 $ 1.09
- ------------------------------------------------------------------------------------------------------------------------
Weighted average shares outstanding 11,512 11,512
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
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, 1997, and the Company's consolidated statement of operations
contained in its Annual Report on Form 10-K for the year ended December 31,
1996, as applicable.
(b) Represents adjustments to reflect historical rental revenue, tenant
reimbursements, real estate taxes and certain property operating and
maintenance expenses for the Lichtin 1997 Acquisition Properties as
detailed in Exhibit A and the NWI 1997 Acquisition Properties as detailed
in Exhibit B.
(c) Represents adjustment to reflect depreciation expense for the NWI and
Lichtin 1997 Acquisition Properties based upon the Company's 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 periods prior to the buildings' respective acquisition
dates (see Note 1 to the combined statements of revenue and certain
expenses included herein as Exhibits A and B).
(d) Represents interest expense for periods prior to the buildings' respective
acquisition dates (see Note 1 to the combined statements of revenue and
certain expenses included herein as Exhibits A and B) associated with
approximately $24.0 million of mortgage debt assumed at a weighted average
interest rate of approximately 9.0% and additional Company revolving credit
facility borrowings of approximately $9.2 million at an interest rate of
7.15% which were utilized to acquire the Lichtin 1997 Acquisition
Properties.
(e) Represents the net adjustment of pro forma minority interest to adjust the
pro forma consolidated minority interest amount to reflect the weighted
average ownership percentage of the Unitholders in the Operating
Partnership of 25.5% for the six months ended June 30, 1997, and the
weighted average ownership percentage of 22.8% for the year ended December
31, 1996.
19
<PAGE>
Weeks Corporation
Pro Forma Condensed Consolidated Balance Sheet
June 30, 1997
(Unaudited)
The unaudited pro forma condensed consolidated balance sheet is presented as if
the acquisition of certain of the Lichtin and NWI 1997 Acquisition Properties
which occurred subsequent to June 30, 1997 (consisting of eight properties
acquired from Lichtin for total acquisition consideration of approximately $31.7
million) had occurred as of June 30, 1997. The unaudited pro forma condensed
consolidated balance sheet is not necessarily indicative of what the actual
financial position of the Company would have been at June 30, 1997, 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 included herein, 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, 1996, and the unaudited condensed
consolidated financial statements and accompanying notes thereto of the Company
included in its June 30, 1997 Quarterly Report on Form 10-Q.
20
<PAGE>
Weeks Corporation
Pro Forma Condensed Consolidated Balance Sheet
June 30, 1997
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Company Pro Forma
Historical/(a)/ Adjustments/(b)/ Pro Forma
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Land $ 88,644 $ 4,206 $ 92,850
Buildings and improvements 516,266 27,451 543,717
Accumulated depreciation (51,031) -- (51,031)
- -------------------------------------------------------------------------------------------------------
Operating real estate assets 553,879 31,657 585,536
Developments in progress 73,236 -- 73,236
Land held for future developments 9,763 -- 9,763
- -------------------------------------------------------------------------------------------------------
Net real estate assets 636,878 31,657 668,535
Real estate loans 16,112 -- 16,112
Cash and cash equivalents 124 -- 124
Direct financing lease 5,075 -- 5,075
Receivables 7,427 -- 7,427
Deferred costs, net 11,324 -- 11,324
Investments in and notes receivable
from unconcolidated subsidiaries 8,909 -- 8,909
Other assets 2,346 -- 2,346
- -------------------------------------------------------------------------------------------------------
Total Assets $688,195 $31,657 $719,852
=======================================================================================================
Liabilities and Shareholders' Equity
Mortgage notes payable $169,056 $20,260 $189,316
Bank credit facility borrowings 101,790 9,161 110,951
Accounts payable
and accrued expenses 13,910 -- 13,910
Other liabilities 3,873 -- 3,873
- -------------------------------------------------------------------------------------------------------
Total Liabilities 288,629 29,421 318,050
- -------------------------------------------------------------------------------------------------------
Minority interests in
Operating Partnership 88,863 1,663/(b)(c)/ 90,526
- -------------------------------------------------------------------------------------------------------
Shareholders' equity:
Common stock 177 -- 177
Preferred stock -- -- --
Additional paid-in capital 375,638 -- 375,638
Deferred compensation (1,005) -- (1,005)
Accumulated deficit (64,107) 573/(c)/ (63,534)
- -------------------------------------------------------------------------------------------------------
Total shareholders' equity 310,703 573 311,276
- -------------------------------------------------------------------------------------------------------
Total Liabilities
and Shareholders' Equity $688,195 $31,657 $719,852
=======================================================================================================
</TABLE>
21
<PAGE>
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, 1997.
(b) Represents the aggregate purchase price, including closing costs, of
approximately $31.7 million for the eight properties acquired from Lichtin
subsequent to June 30, 1997 (see Note 1 to the combined statements of
revenue and certain expenses included herein as Exhibit A). The aggregate
acquisition consideration for these eight properties consisted of assumed
mortgage indebtedness of approximately $20.3 million, the assumption and
repayment of other indebtedness and the payment of cash through the
Company's revolving credit facility of approximately $9.2 million, and
units of partnership interest in the Operating Partnership valued at $2.2
million.
(c) Represents the adjustment to state the consoldiated pro forma shareholders'
equity balance and minority interest balance to 77.5% and 22.5%,
respectively, of the total consolidated pro forma equity interests (both
shareholders' equity and minority interests) in the Company.
22
