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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): February 18, 1998
WEEKS CORPORATION
(Exact name of registrant as specified in its charter)
Georgia 011-13254 58-1525322
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(State of (Commission File (IRS Employer
Incorporation) Number) Identification No.)
4497 Park Drive, Norcross, Georgia 30093
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(Address of principal executive offices, including zip code)
(770) 923-4076
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
Statement of Financial Accounting Standards ("SFAS") 128, "Earnings Per Share,"
was issued requiring a new method for computing earnings per share. SFAS 128 is
effective for financial statements issued after December 15, 1997 and requires a
restatement of prior period earnings per share data and additional disclosures
regarding the details of the computation of both basic and diluted earnings per
share as set forth in SFAS 128. Weeks Corporation (the "Company") has provided,
in an exhibit to this Form 8-K, restated earnings per share for the Company's
Annual Report on Form 10-K for the year ended December 31, 1996 and the
Company's Quarterly Reports on Form10-Q for the quarters ended March 31, 1997,
June 30, 1997 and September 30, 1997.
On February 17, 1998, the Company announced its results of operations for the
fourth quarter and year ended December 31, 1997. A copy of the related news
release is attached as an exhibit to this Current Report.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit No. Description
- ----------- ------------------------------------------------------------
99.1 Earnings per share -- restated for Statement of Financial
Accounting Standards No. 128
99.2 News release of Weeks Corporation dated February 17, 1998
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: February 18, 1998 /s/ David P. Stockert
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David P. Stockert
Senior Vice President and
Chief Financial Officer
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INDEX TO EXHIBITS
Exhibit Description Page
- ------- ----------- ----
99.1 Earnings per share -- restated for Statement
of Financial Accounting Standards No. 128 5
99.2 News release of Weeks Corporation dated
February 17, 1998 8
4
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EXHIBIT 99.1
Earnings Per Share -- Restated for Statement of
Financial Accounting Standards No. 128
The table below contains earnings per share data as restated under the
provisions of Statement of Financial Accounting Standards ("SFAS") 128. This
data restates the Company's selected financial data included in its Annual
Report on Form 10-K, Item 6 for the periods detailed below.
<TABLE>
<CAPTION>
Year ended Year ended Aug. 24 to
Dec. 31, 1996 Dec. 31, 1995 Dec. 31, 1994
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<S> <C> <C> <C>
Per Share Data:
Income before extraordinary loss -- basic $1.11 $1.03 $0.36
Income before extraordinary loss -- diluted $1.10 $1.03 $0.36
Net income -- basic $1.11 $1.03 $0.10
Net income -- diluted $1.10 $1.03 $0.10
</TABLE>
Earnings per share data for periods prior to August 24, 1994, the date the
Company completed its initial public offering, are not relevant as prior to this
date the Company's predecessor represented a combination of partnerships and
corporations under common control.
The table below contains restated earnings per share data under SFAS 128
applicable to the Company's unaudited quarterly financial information included
in footnote 17 to the Company's financial statements included in its Annual
Report on Form 10-K for the year ended December 31, 1996.
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
1996
Net income per share -- basic $0.28 $0.28 $0.27 $0.28
Net income per share -- diluted $0.28 $0.28 $0.27 $0.28
1995
Net income per share -- basic $0.27 $0.28 $0.25 $0.24
Net income per share -- diluted $0.27 $0.27 $0.25 $0.24
Earnings per share data for periods prior to August 24, 1994, the date the
Company completed its initial public offering, are not relevant as prior to this
date the Company's predecessor represented a combination of partnerships and
corporations under common control.
1
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The table below presents additional required disclosures regarding the
computation of basic and diluted earnings per share under SFAS 128 for the
periods detailed and included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1996.
<TABLE>
<CAPTION>
Year ended Year ended Aug. 24 to
Dec. 31, 1996 Dec. 31, 1995 Dec. 31, 1994
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<S> <C> <C> <C>
Computation of Earnings Per Share:
Income before extraordinary loss -- basic $12,745 $ 8,426 $ 2,791
Minority interest in earnings of the
Operating Partnership 3,064 2,681 943
- ----------------------------------------------------------------------------------------------------
Income before extraordinary loss -- diluted $15,809 $11,107 $ 3,734
- ----------------------------------------------------------------------------------------------------
Net income -- basic $12,745 $ 8,426 $ 798
Minority interests in earnings of the
Operating Partnership 3,064 2,681 943
Minority interests in extraordinary loss -- -- (674)
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Net income -- diluted $15,809 $11,107 $ 1,067
- ----------------------------------------------------------------------------------------------------
Weighted average shares -- basic 11,512 8,171 7,675
Dilutive securities --
Units of limited partnership interest in the
Operating Partnership 2,768 2,589 2,593
Stock options 106 72 18
- ----------------------------------------------------------------------------------------------------
Weighted average shares -- diluted 14,386 10,832 10,286
- ----------------------------------------------------------------------------------------------------
Earnings Per Share Data:
Income before extraordinary loss -- basic $ 1.11 $ 1.03 $ 0.36
Income before extraordinary loss -- diluted $ 1.10 $ 1.03 $ 0.36
Net income -- basic $ 1.11 $ 1.03 $ 0.10
Net income -- diluted $ 1.10 $ 1.03 $ 0.10
</TABLE>
Basic earnings per share were computed by dividing net income -- basic by the
weighted average number of common shares -- basic outstanding during the period.
Diluted earnings per share were computed by dividing net income -- diluted by
the weighted average shares -- diluted during the period. Diluted earnings per
share was determined on the assumption that units of limited partnership
interest in the Operating Partnership were converted into common stock upon the
later of their issuance or the beginning of the period presented and based on
the dilutive effect of stock options outstanding.
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The table below presents earnings per share data as restated under the
provisions of SFAS 128 and the additional disclosures required under SFAS 128
for the periods ended March 31, 1997, June 30, 1997 and September 30, 1997
included in the Company's Quarterly Reports on Form 10-Q.
<TABLE>
<CAPTION>
Quarter Quarter Six Months Quarter Nine Months
Ended Ended Ended Ended Ended
March 31 June 30 June 30 Sept. 30 Sept. 30
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<S> <C> <C> <C> <C> <C>
Computation of Earnings Per Share Data:
1997
Net income -- basic $ 3,826 $ 5,080 $ 8,906 $ 5,768 $14,673
Minority interests in earnings of the
Operating Partnership 1,232 1,618 2,850 1,683 4,533
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Net income -- diluted $ 5,058 $ 6,698 $11,756 $ 7,451 $19,206
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Weighted average shares -- basic 14,073 15,906 14,994 17,693 15,904
Dilutive securities --
Units of limited partnership interest
in the Operating Partnership 4,532 5,057 4,797 5,141 4,912
Stock options 235 200 217 183 202
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Weighted average shares -- diluted 18,840 21,163 20,008 23,017 21,018
- -----------------------------------------------------------------------------------------------------------
1996
Net income -- basic $ 3,101 $ 3,092 $ 6,193 $ 3,033 $ 9,226
Minority interests in earnings of the
Operating Partnership 713 713 1,426 698 2,124
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Net income -- diluted $ 3,814 $ 3,805 $ 7,619 $ 3,731 $11,350
- -----------------------------------------------------------------------------------------------------------
Weighted average shares -- basic 11,156 11,156 11,156 11,174 11,162
Dilutive securities --
Units of limited partnership interest
in the Operating Partnership 2,567 2,567 2,567 2,567 2,567
Stock options 108 67 65 119 84
- -----------------------------------------------------------------------------------------------------------
Weighted average shares -- diluted 13,831 13,790 13,788 13,860 13,813
- -----------------------------------------------------------------------------------------------------------
Earnings Per Share Data:
1997
Net income per share -- basic $ 0.27 $ 0.32 $ 0.59 $ 0.33 $ 0.92
Net income per share -- diluted $ 0.27 $ 0.32 $ 0.59 $ 0.32 $ 0.91
1996
Net income per share -- basic $ 0.28 $ 0.28 $ 0.56 $ 0.27 $ 0.83
Net income per share -- diluted $ 0.28 $ 0.28 $ 0.55 $ 0.27 $ 0.82
</TABLE>
Basic earnings per share were computed by dividing net income -- basic by the
weighted average number of common shares -- basic during the period. Diluted
earnings per share was computed by dividing net income -- diluted by the
weighted average shares -- diluted during the period. Diluted earnings per
share was determined on the assumption that units of limited partnership
interest in the Operating Partnership were converted into common stock upon the
later of their issuance or the beginning of the period presented and based on
the dilutive effect of stock options outstanding.
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EXHIBIT 99.2
News Release
CONTACTS: A. Ray Weeks, Jr., Chairman and Chief Executive Officer, 770-717-3202
David P. Stockert, Senior Vice President and Chief Financial Officer,
770-717-3204
Susan C. Walker, Vice President, Investor Relations, 770-717-3260
WEEKS CORPORATION (WKS) ANNOUNCES 14.6% INCREASE IN PER SHARE 1997
FFO; INVESTMENT PIPELINE TOTALS $302 MILLION WITH 10.8% INITIAL YIELD
ATLANTA (February 17, 1998)-- Weeks Corporation (NYSE:WKS) today announced that
for the fourth quarter ended December 31, 1997, the Company's funds from
operations (FFO) were $10.8 million, compared with $6.7 million for the fourth
quarter of 1996. On a per share basis, the Company's FFO increased 13.0%, to
$0.61 for the fourth quarter of 1997, compared with $0.54 for the fourth quarter
of 1996. The Company's payout ratio of FFO was 76.2% for the fourth quarter of
1997, compared with 80.2% for the fourth quarter of 1996. For the full year
1997, the Company's FFO was $38.5 million, compared with $23.6 million for the
full year 1996. On a per share basis, the Company's FFO increased 14.6%, to
$2.35 for 1997, compared with $2.05 for 1996. The Company's payout ratio of FFO
was 74.5% for 1997, compared with 79.4% for 1996.
Compared with the fourth quarter of 1996, the Company's revenues increased
66.9%, to $26.4 million, and net income available to common shareholders
increased 58.6%, to $5.6 million. On a per share basis, net income for the
fourth quarter increased 14.3%, to $0.32. Compared with the full year 1996, the
Company's revenues increased 70.8%, to $92.0 million, and net income available
to common shareholders increased 58.9%, to $20.3 million. On a per share basis,
net income for the year increased 11.7%, to $1.24. The Company had 17.7 million
weighted average common shares outstanding in the fourth quarter of 1997,
compared with 12.6 million in the fourth quarter of 1996. The Company had 16.4
million weighted average common shares outstanding for the full year 1997,
compared with 11.5 million for the full year 1996. All of the per share amounts
included above refer to basic earnings per share. Diluted earnings per share
amounts are included in the accompanying financial highlights table.
Commenting on the year, Chairman and Chief Executive Officer A. Ray Weeks, Jr.,
stated, "Weeks achieved all of the major strategic goals for 1997 that we
articulated at the outset of the year: We made Florida our top geographic
priority and secured positions in each of the four most important markets in
that state, operated the core portfolio to match or beat the prior year's
results, produced attractive development returns and achieved our goal to win a
greater volume of build-to-suit opportunities, maintained a disciplined approach
to acquisitions, using them largely to open new markets and submarkets, attained
investment-grade rated status, and maintained a strong balance sheet. As a
result of all of this, we achieved another consecutive year of more than 14% per
share FFO growth."
1
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1997 COMPANY HIGHLIGHTS
NEW MARKET EXPANSION -- MAJOR FLORIDA PRESENCE
During the year, Weeks completed several transactions to build a significant
presence in Tampa and Jacksonville and to augment its market position in
Orlando. The Company also entered into agreements (1998 closings) on a major
acquisition and expansion into Miami/Fort Lauderdale, including a strategic
alliance in that market with Codina Group, Inc., a leading South Florida
commercial and industrial real estate company, and St. Joe Corporation, which,
together with its affiliates, is Florida's single largest private landholder.
Including those transactions, Weeks now operates in eight, rapidly growing
markets across the Southeast.
HIGH-LEVEL CORE PORTFOLIO OPERATING PERFORMANCE
The Company also maintained the consistently high-level performance of its core
portfolio. At year-end 1997, the average occupancy of Weeks' in-service
portfolio was 96.0%, approximately the same average occupancy as at year-end
1996 (96.2%). For the year 1997, the Company produced average same-space rent
increases, computed on a per square foot cash basis for second-generation
leases, of 6.0%, substantially more than the 4.2% average increases recorded in
1996. The Company's tenant retention rate also increased in 1997, to 72%, from
67% in 1996, reflecting Weeks' focus on client service.
LARGER PIPELINE OF COMMITTED INVESTMENTS
During the year, Weeks stabilized $95.9 million of development, with an average
current occupancy of 98% and with an estimated average initial unleveraged
return of 11.0%, and closed $118.5 million of acquisitions, with an estimated
average initial unleveraged return of 10.5%. In addition, in January 1998, the
Company closed the $175 million acquisition of Beacon Centre in Miami, with an
estimated average initial unleveraged return of 8.7%, in connection with its
expansion into South Florida.
Weeks currently has a pipeline of committed developments and contracted
acquisitions totaling $302 million (not including the Beacon Centre acquisition
discussed above), with an estimated average initial unleveraged return of 10.8%.
This amount represents a 36% increase in the size of Weeks' forward investment
pipeline compared with the same time last year. A portion of this increase
reflects a doubling of the Company's build-to-suit volume as a result of a
greater emphasis on this business beginning in 1997.
INVESTMENT-GRADE STATUS ATTAINED, STRONG CAPITALIZATION, INCREASED DIVIDENDS
During the year, Weeks was awarded corporate senior credit ratings of BBB from
Standard & Poor's, Baa2 from Moody's and BBB from Duff & Phelps, which, among
other things, allowed the Company to complete an attractively priced preferred
stock offering and reduce its interest costs under its line of credit by 30
basis points. In total, Weeks raised $284 million in common and preferred
equity and unit transactions in 1997, resulting in a year-end debt-to-total
market capitalization ratio of 25% (32% on a pro forma basis for the Beacon
Centre acquisition discussed above).
Beginning with the dividend paid for the fourth quarter of 1997, the Company
increased its dividend rate by 8.1% to $1.86 per share annually.
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CAVEAT ABOUT FORWARD-LOOKING INFORMATION
When used in this news release, the words "believes," "expects," "estimates" and
similar expressions are intended to identify forward-looking information. Such
forward-looking information is subject to certain risks, trends and
uncertainties that could cause actual results to differ materially from those
projected. Among those risks, trends and uncertainties are the general economic
climate; competition and the supply of and demand for industrial and suburban
office properties in the Company's markets; interest rate levels; the
availability of financing; potential environmental liability and other risks
associated with the ownership, development and acquisition of properties,
including risks that tenants will not take or remain in occupancy or pay rent,
or that construction or operating costs may be greater than anticipated. For
further information on factors that could affect the Company and the statements
contained herein, please refer to the Company's filings with the Securities and
Exchange Commission.
<TABLE>
<CAPTION>
WEEKS CORPORATION FINANCIAL HIGHLIGHTS
Three Months Three Months Year Year
Ended Ended Ended Ended
(Unaudited; in thousands, except per share amounts) Dec. 31, 1997 Dec. 31, 1996 Dec. 31, 1997 Dec. 31, 1996
- --------------------------------------------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Operating data:
Revenue $ 26,403 $ 15,820 $92,020 $53,883
Income before minority interests $ 9,987 $ 4,459 $29,194 $15,809
Net income $ 8,301 $ 3,519 $22,975 $12,745
Net income available to common shareholders $ 5,581 $ 3,519 $20,255 $12,745
Earnings per common share --
Basic $ 0.32 $ 0.28 $ 1.24 $ 1.11
Diluted(a) $ 0.31 $ 0.28 $ 1.23 $ 1.10
Weighted average common shares --
Basic 17,703 12,556 16,357 11,512
Diluted(b) 23,241 16,075 21,580 14,386
Funds from operations $ 14,067 $ 8,527 $50,343 $29,323
Funds from operations available to
common shareholders $ 10,803 $ 6,733 $38,517 $23,640
Funds from operations per common share --
Basic $ 0.61 $ 0.54 $ 2.35 $ 2.05
Diluted(c) $ 0.61 $ 0.53 $ 2.33 $ 2.04
Dividends per common share $ 0.465 $ 0.43 $ 1.755 $ 1.63
Dividend payout ratio of funds from operations 76.2% 80.2% 74.5% 79.4%
Dec. 31, 1997 Dec. 31, 1996
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Consolidated balance sheet data:
Real estate assets, net $794,952 $551,372
Total assets 852,361 591,849
Total debt 275,515 296,975
Shareholders' equity 459,048 213,711
</TABLE>
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(a) Computed by dividing income before minority interests less dividends to
preferred shareholders ($2,720,000 for the three months and year ended
December 31, 1997) by weighted average common shares - diluted.
(b) Represents the weighted average shares of common stock outstanding plus the
weighted average common units of limited partnership interest of Weeks
Realty L.P. (the Operating Partnership) outstanding (common units are
convertible into common shares on a one-for-one basis) and the dilutive
effect of outstanding stock options. Weighted average common units
outstanding totaled 5,348,000 and 3,362,000 for the three months and
5,023,000 and 2,768,000 for the years ended December 31, 1997 and 1996,
respectively. Common stock equivalents related to outstanding stock options
totaled 190,000 and 157,000 for the three months and 200,000 and 106,000
for the years ended December 31, 1997 and 1996, respectively.
(c) Computed by dividing funds from operations by weighted average common
shares - diluted.
OVERVIEW OF WEEKS CORPORATION
Weeks Corporation is a self-administered real estate investment trust that owns,
develops and acquires industrial and suburban office buildings and business
parks in metropolitan Atlanta, Georgia; Nashville, Tennessee; the Research
Triangle area of North Carolina; Jacksonville, Miami/Fort Lauderdale, Orlando
and Tampa, Florida; and Spartanburg, South Carolina. Weeks Corporation provides
leasing, management, development, construction, landscaping and other tenant-
related services for its own properties and for properties owned by others. The
Company's portfolio currently consists of 313 primarily industrial and suburban
office properties, totaling approximately 25.4 million square feet, including
properties under development and/or under agreement to acquire.
To look up recent news releases, EDGAR filings, and stock quotes, find Weeks
Corporation on the internet at http://www.businesswire.com/cnn/wks.htm
Send e-mail correspondence to [email protected]
A copy of supplemental materials on the Company's fourth quarter and full year
1997 results is available by request to:
Susan C. Walker
Vice President/Investor Relations
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
770-717-3260
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