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Previous: GLENBOROUGH REALTY TRUST INC, 8-K/A, 1996-12-30 |
Next: AUSA ENDEAVOR VARIABLE ANNUITY ACCOUNT, 497, 1996-12-30 |
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)
December 30, 1996 (November 19, 1996)
----------------------------
GLENBOROUGH REALTY TRUST INCORPORATED
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 001-14162 94-3211970
- ---------------- ---------- -------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) I.D. Number)
incorporation)
400 South El Camino Real, Ste. 1100, San Mateo, California 94402
-----------------------------------------------------------------
(Address of principal executive offices)
Registrant's Telephone number, including area code:(415) 343-9300
-------------
Page 1 of 41
<PAGE>
Glenborough Realty Trust Incorporated (the "Company") hereby amends Item 7 of
its Current Report on Form 8-K filed with the Securities and Exchange Commission
(the "Commission") on December 4, 1996, to file the Pro Forma Financial
Statements of the Company and exhibits related to the acquisition of the
Carlsberg Properties (as defined in such Form 8-K) and the acquisition of the
TRP Properties previously reported in the Company's Current Report on Form 8-K
filed with the Commission on November 1, 1996, and defined therein.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 4
Statement of revenues and certain expenses
of the TRP Properties for the nine
months ended September 30, 1996 (unaudited)
and for the year ended December 31, 1995. 5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 8
Statement of revenues and certain expenses
of the Carlsberg Properties for the nine
months ended September 30, 1996 (unaudited)
and for the year ended December 31, 1995. 9
(b) PRO FORMA FINANCIAL STATEMENTS
The accompanying pro forma financial statements represent the Company's
consolidated balance sheet and consolidated statement of operations as of and
for the nine months ended September 30, 1996 and for the year ended December 31,
1995, as if the transactions and the Consolidation (discussed below) took place
on January 1, 1995.
The pro forma adjustments reflect: (a) the acquisition of the TRP Properties and
the Carlsberg Properties; (b) the new debt and interest thereon and (c) the
effect that these adjustments have on minority interest.
The Pro Forma information is unaudited and is not necessarily indicative of the
consolidated results which would have occurred if the transactions had been
consummated in the year presented, or on any particular date in the future, nor
does it purport to represent the financial position or results of operations in
future periods.
Pro Forma Consolidated Balance Sheet at
September 30, 1996 with accompanying notes
and adjustments 12
Pro Forma Consolidated Statement of
Operations for the nine months ended
September 30, 1996 15
Pro Forma Consolidated Statement of
Operations for the year ended
December 31, 1995 17
Page 2 of 41
<PAGE>
Notes and adjustments to Proforma Consolidated
Statements of Operations for the nine months
ended September 30, 1996 and the year ended
December 31, 1995 19
The As Adjusted financial statements represent the Company's consolidated
statement of operations for the year ended December 31, 1995 as if the
consolidation (the "Consolidation") of eight predecessor California Limited
partnerships (Equitec Income Real Estate Investors B, Equitec Income Real Estate
Investors C, Equitec Income Real Estate Investors-Equitec Fund 4, Equitec
Mortgage Investors Fund IV, Equitec 79 Real Estate Investors, Outlook Properties
Fund IV, Glenborough All Suites Hotels, L.P. and Glenborough Pension Investors)
(the "Partnerships") and Glenborough Corporation (previously disclosed on Forms
8-K and 8-K/A filed with the Securities and Exchange Commission on January 15,
1996 and March 15, 1996, respectively) had taken place on January 1, 1995.
The As Adjusted information is unaudited and is not necessarily indicative of
the consolidated results which would have occurred if the transactions had been
consummated in the year presented, or on any particular date in the future, nor
does it purport to represent the financial position or results of operations in
future periods.
The following financial statements reflect the unaudited As Adjusted
Consolidated Financial Statements of Glenborough Realty Trust Incorporated for
the year ended December 31, 1995.
Glenborough Realty Trust Incorporated
As Adjusted Consolidating Statement of
Operations with accompanying notes and
adjustments 22
Glenborough Realty Trust Incorporated
As Adjusted Historical Combining
Statement of Operations with
accompanying notes and adjustments 26
Glenborough Realty Trust Incorporated
As Adjusted Statement of Hotel Lessor
Operations with accompanying notes
and adjustments 29
Glenborough Hotel Group ("GHG") As
Adjusted Statement of Operations with
accompanying notes and adjustments 31
Glenborough Corporation ("GC") As
Adjusted Statement of Operations with
accompanying notes and adjustments 35
Glenborough Inland Realty Corporation
("GIRC") As Adjusted Statement of
Operations with accompanying notes
and adjustments 39
Page 3 of 41
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Glenborough Realty Trust Incorporated:
We have audited the accompanying statement of revenues and certain expenses of
the TRP Properties, as defined in Note 1, for the year ended December 31, 1995.
This financial statement is the responsibility of the management of the Company.
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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. 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.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission, as described in Note 1, and is not intended to be a
complete presentation of the revenues and expenses of the TRP Properties.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenues and certain expenses of the TRP Properties
for the year ended December 31, 1995, in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
San Francisco, California
July 9, 1996
Page 4 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH REALTY TRUST INCORPORATED
STATEMENTS OF REVENUES AND CERTAIN EXPENSES FOR
THE TRP PROPERTIES
For The Nine Months Ended September 30, 1996 (Unaudited)
And The Year Ended December 31, 1995
(in thousands)
Nine Months
Ended Year
September 30, Ended
1996 December 31,
(Unaudited) 1995
--------------- --------------
<S> <C> <C>
REVENUES $ 5,979 $ 7,336
CERTAIN EXPENSES:
Operating 1,338 1,854
Real estate taxes 543 694
------- -------
1,881 2,548
------- -------
REVENUES IN
EXCESS OF CERTAIN
EXPENSES $ 4,098 $ 4,788
======= =======
The accompanying notes are an integral part of these statements.
</TABLE>
Page 5 of 41
<PAGE>
GLENBOROUGH REALTY TRUST INCORPORATED
NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES FOR
THE TRP PROPERTIES
For The Nine Months Ended September 30, 1996 (Unaudited)
And The Year Ended December 31, 1995
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICY
Property Acquired - The accompanying statements of revenues and certain
expenses include the operations (see "Basis of Presentation" below) of the
following TRP Properties (the "TRP Properties") acquired by Glenborough Realty
Trust Incorporated (the "Company") from Trust Realty Partners, an unaffiliated
third party.
<TABLE>
<CAPTION>
Property City State Type
- -------- ----- ----- ----
<S> <C> <C> <C>
Auburn North Auburn WA Shopping Cntr
One Professional Square Omaha NB Office
Warner Village Medical Center Fountain
Valley CA Office
The Globe Office Building Mercer
Island WA Office
Rancho Bernardo R & D Center Rancho
Bernardo CA Industrial
Hoover Industrial Center Mesa AZ Industrial
Walnut Creek Business Center Austin TX Industrial
Mercantile Industrial I Dallas TX Industrial
Quaker Industrial (formerly
Mercantile Industrial II) Dallas TX Industrial
Pinewood Industrial (formerly
Mercantile Industrial III) Arlington TX Industrial
Villas de Mission Apartments Las Vegas NV Multifamily
Sahara Gardens Apartments Las Vegas NV Multifamily
</TABLE>
Basis of Presentation - The accompanying statements of revenues and certain
expenses are not intended to be a complete presentation of the actual operations
of the TRP Properties for the periods presented. Certain expenses may not be
comparable to the expenses expected to be incurred by the Company in the future
operations of the Properties; however, the Company is not aware of any material
factors relating to the TRP Properties that would cause the reported financial
information not to be indicative of future operating results. Excluded expenses
consist of property management fees, interest expense, depreciation and
amortization and other costs not directly related to the future operations of
the TRP Properties.
These financial statements have been prepared for the purpose of complying
with certain rules and regulations of the Securities and Exchange Commission.
The financial information presented for the nine months ended September 30,
1996 is not audited. In the opinion of management,
Page 6 of 41
<PAGE>
the unaudited financial information contains all adjustments, consisting of
normal recurring accruals, necessary for a fair presentation of the statements
of revenues and certain expenses for the TRP Properties.
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
The minimum future rental revenues from leases in effect as of October 1,
1996, for the remainder of 1996 and annually thereafter are as follows (in
thousands)
Year Amount
------------------ ---------
1996 (three months) $ 903
1997 2,993
1998 1,845
1999 1,270
2000 734
2001 475
Thereafter 1,020
---------
Total $ 9,240
=========
In addition to minimum rental payments, tenants pay reimbursements for their pro
rata share of specified operating expenses, which amounted to $395 (unaudited)
for the nine months ended September 30, 1996, and $418 for the year ended
December 31, 1995. Certain leases contain lessee renewal options.
Page 7 of 41
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Glenborough Realty Trust Incorporated:
We have audited the accompanying statement of revenues and certain expenses of
the Carlsberg Properties, as defined in Note 1, for the year ended December 31,
1995. This financial statement is the responsibility of the management of the
Company. 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. 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.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission, as described in Note 1, and is not intended to be a
complete presentation of the revenues and expenses of the Carlsberg Properties.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenues and certain expenses of the Carlsberg
Properties for the year ended December 31, 1995, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
San Francisco, California
November 15, 1996
Page 8 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH REALTY TRUST INCORPORATED
STATEMENTS OF REVENUES AND CERTAIN EXPENSES FOR
THE CARLSBERG PROPERTIES
For The Nine Months Ended September 30, 1996 (Unaudited)
And the Year Ended December 31, 1995
(in thousands)
Nine Months
Ended Year
September 30, Ended
1996 December 31,
(unaudited) 1995
---------- -----------
<S> <C> <C>
REVENUES $ 2,291 $ 2,836
CERTAIN EXPENSES:
Operating 650 783
Real estate taxes 206 278
--------- ---------
856 1,061
--------- ---------
REVENUES IN EXCESS OF
CERTAIN EXPENSES $ 1,435 $ 1,775
========= =========
The accompanying notes are an integral part of these statements.
</TABLE>
Page 9 of 41
<PAGE>
GLENBOROUGH REALTY TRUST INCORPORATED
NOTES TO COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES FOR
THE CARLSBERG PROPERTIES
For the Nine Months Ended September 30, 1996 (unaudited)
and the Year Ended December 31, 1995
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICY
Properties Acquired - The accompanying combined statements of revenues and
certain expenses include the operations (see "Basis of Presentation") of the
following five properties (the "Carlsberg Properties") acquired by Glenborough
Realty Trust Incorporated (the "Company"), from an unaffiliated third party.
<TABLE>
<CAPTION>
Property City State Type
- -------- ----- ----- ----
<S> <C> <C> <C>
Sonora Plaza Sonora CA Shopping Cntr
Vintage Pointe (formerly
Carlsberg Plaza) Phoenix AZ Office
Hillcrest Office Plaza Fullerton CA Office
Dallidet Professional Center San Luis
Obispo CA Office
Trade Winds Financial Center Mesa AZ Office
</TABLE>
Basis of Presentation - The accompanying statements of revenues and certain
expenses are not intended to be a complete presentation of the actual operations
of the Carlsberg Properties for the periods presented. Certain expenses may not
be comparable to the expenses incurred by the Company in the future operations
of the Carlsberg Properties; however, the Company is not aware of any material
factors relating to the Carlsberg Properties that would cause the reported
financial information not to be indicative of future operating results. Excluded
expenses consist of property management fees, interest expense, depreciation and
amortization and other costs not directly related to the future operations of
the Carlsberg Properties.
These financial statements have been prepared for the purpose of complying
with certain rules and regulations of the Securities and Exchange Commission.
The financial information presented for the nine months ended September 30,
1996 is not audited. In the opinion of management, the unaudited financial
information contains all adjustments, consisting of normal recurring accruals,
necessary for a fair presentation of the combined statements of revenues and
certain expenses for the Carlsberg Properties.
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.
Page 10 of 41
<PAGE>
GLENBOROUGH REALTY TRUST INCORPORATED
NOTES TO COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES FOR
THE CARLSBERG PROPERTIES - (Continued)
For the Nine Months Ended September 30, 1996 (unaudited)
and the Year Ended December 31, 1995
2. LEASING ACTIVITY
The minimum future rental revenues from leases in effect as of October 1,
1996, for the remainder of 1996 and annually thereafter are as follows (in
thousands):
Year Amount
------------------ ---------
1996 (three months) $ 640
1997 2,492
1998 2,122
1999 1,629
2000 1,476
2001 1,179
Thereafter 5,536
---------
Total $ 15,074
=========
In addition to minimum rental payments, tenants pay reimbursements for their pro
rata share of specified operating expenses, which amounted to $195 (unaudited)
for the nine months ended September 30, 1996 and $231 for the year ended
December 31, 1995. Certain leases contain lessee renewal options.
Page 11 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH REALTY TRUST INCORPORATED
PRO FORMA CONSOLIDATED BALANCE SHEET
(in thousands, except shares)
September 30, 1996
(Unaudited)
Property
Historical(1) Acquisitions(2) Offering(3)
-------------- -------------- -----------
ASSETS
<S> <C> <C> <C>
Rental property, net $ 99,165 $ 64,388 $ ---
Investments in Associated Companies
and Glenborough Partners 6,189 500 ---
Investments in management contracts
and other, net 355 --- ---
Mortgage loans receivable, net 7,213 3,600 ---
Cash and cash equivalents 610 (23,457) 46,714
Other assets 5,673 --- ---
-------- -------- --------
TOTAL ASSETS $ 119,205 $ 45,031 $ 46,714
======== ======== ========
LIABILITIES
Mortgage loans $ 29,542 $ 25,200 $ ---
Secured bank line 29,002 14,744 ---
Other liabilities 3,541 1,338 ---
-------- -------- --------
Total liabilities 62,085 41,282 ---
-------- -------- --------
MINORITY INTEREST 8,285 760 ---
-------- -------- --------
STOCKHOLDERS' EQUITY
Common stock (9,661,553 shares
issued and outstanding) 6 --- 4
Additional paid-in capital 56,147 2,989 46,710
Deferred compensation (446) --- ---
Retained earnings (deficit) (6,872) --- ---
-------- -------- --------
Total stockholders' equity 48,835 2,989 46,714
-------- -------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $119,205 $ 45,031 $ 46,714
======== ======== ========
- continued -
</TABLE>
Page 12 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH REALTY TRUST INCORPORATED
PRO FORMA CONSOLIDATED BALANCE SHEET
(in thousands, except shares) - continued
September 30, 1996
(Unaudited)
Repayment
of Debt(4) Pro Forma
---------- ---------
ASSETS
<S> <C> <C>
Rental property, net $ --- $163,553
Investments in Associated Companies
and Glenborough Partners --- 6,689
Investments in management contracts
and other, net --- 355
Mortgage loans receivable --- 10,813
Cash and cash equivalents (23,128) 739
Other assets --- 5,673
-------- --------
TOTAL ASSETS $(23,128) $187,822
======== ========
LIABILITIES
Mortgage loans $ --- $ 54,742
Secured bank line (23,128) 20,618
Other liabilities --- 4,879
-------- --------
Total liabilities (23,128) 80,239
-------- --------
MINORITY INTEREST --- 9,045
-------- --------
STOCKHOLDERS' EQUITY
Common stock (9,661,553 shares
issued and outstanding) --- 10
Additional paid-in capital --- 105,846
Deferred compensation --- (446)
Retained earnings (deficit) --- (6,872)
-------- --------
Total stockholders' equity --- 98,538
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $(23,128) $187,822
======== ========
</TABLE>
Page 13 of 41
<PAGE>
GLENBOROUGH REALTY TRUST INCORPORATED
NOTES AND ADJUSTMENTS TO PRO FORMA CONSOLIDATED
BALANCE SHEET AS OF SEPTEMBER 30, 1996
(unaudited, dollars in thousands)
1. Reflects the historical consolidated balance sheet of the Company as of
September 30, 1996, which includes the acquisitions of the following properties:
Property Purchase Price
---------------------- --------------
UCT Property $18,600,000
San Antonio Hotel $ 2,700,000
Kash n' Karry Property $ 1,540,000
Bond Street Property $ 3,200,000
2. Reflects the acquisition of the Carlsberg Properties (including a note
receivable secured by the Grunow Medical Building) and the acquisition of the
TRP Properties for total acquisition prices of $19,589 and $43,200,
respectively, including acquisition costs of approximately $1,599. These
acquisitions were funded with approximately $23,457 of the net proceeds from the
Offering, assumption of approximately $25,200 of mortgage debt, borrowings on
the secured bank line (the "Facility") of approximately $14,744, and the
issuance of 52,386 Operating Partnership units with an aggregate approximate
value of $760 and 206,844 shares of unregistered Common Stock with an aggregate
approximate value of $2,989. The assumed mortgages bear interest rates of 8.00%
to 9.25% and mature between August 1998 and August 2015.
3. Reflects the net proceeds from the Offering. In connection with the Offering,
the Company incurred costs of approximately $4,145.
4. Reflects the repayment of borrowings on the Facility of approximately
$23,128. After the Offering and the completion of the acquisitions of the
Carlsberg and TRP Properties, the Company had approximately $29,382 of remaining
borrowing capacity on the Facility.
Page 14 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH REALTY TRUST INCORPORATED
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the nine months ended September 30, 1996
(in thousands, except per share amounts)
(Unaudited)
Facility and Property
Historical(1) Term Loan(2) Acquisitions(3)
------------- ------------ --------------
REVENUES
<S> <C> <C> <C>
Rental revenue $ 11,281 $ --- $ 11,376
Fees and reimbursements from
affiliates 199 --- ---
Interest and other income 623 --- ---
Equity in earnings of
Associated Companies 1,363 --- ---
Gain on sale of rental
properties 321 --- ---
-------- -------- --------
Total revenue 13,787 --- 11,376
-------- -------- --------
OPERATING EXPENSES
Operating expenses 3,244 --- 3,978
General and administrative 977 --- ---
Depreciation and amortization 2,694 --- 1,412
Interest expense 2,546 1,681 1,937
-------- -------- --------
Total operating expenses 9,461 1,681 7,327
-------- -------- --------
Income from operations before
minority interest 4,326 (1,681) 4,049
Minority interest (312) --- ---
-------- -------- --------
Net income $ 4,014 $ (1,681) $ 4,049
======== ======== ========
Net income per share $ 0.70
========
Weighted average number of
common shares outstanding 5,763,742
=========
- continued -
</TABLE>
Page 15 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH REALTY TRUST INCORPORATED
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS - continued
For the nine months ended September 30, 1996
(in thousands, except per share amounts)
(Unaudited)
Repayment
of Debt(4) Other(5) Pro Forma(6)
---------- --------- ------------
REVENUES
<S> <C> <C> <C>
Rental revenue $ --- $ (260) $ 22,397
Fees and reimbursements from
affiliates --- --- 199
Interest and other income --- (24) 599
Equity in earnings of
Associated Companies --- 79 1,442
Gain on sale of rental
properties --- --- 321
-------- -------- --------
Total revenue --- (205) 24,958
-------- -------- --------
OPERATING EXPENSES
Operating expenses --- (128) 7,094
General and administrative --- 150 1,127
Depreciation and amortization --- (50) 4,056
Interest expense (1,344) --- 4,820
-------- -------- --------
Total operating expenses (1,344) (28) 17,097
-------- -------- --------
Income from operations before
minority interest 1,344 (177) 7,861
Minority interest --- (290) (602)
-------- -------- --------
Net income $ 1,344 $ (467) $ 7,259
======== ======== ========
Net income per share $ 0.75
========
Weighted average number of
common shares outstanding 9,661,553
=========
</TABLE>
Page 16 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH REALTY TRUST INCORPORATED
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 31, 1995
(in thousands, except per share amounts)
(Unaudited)
Facility and Property
Historical(1) Term Loan(2) Acquisitions(3)
------------- ------------ ---------------
REVENUES
<S> <C> <C> <C>
Rental revenue $ 13,472 $ --- $ 15,561
Fees and reimbursements from
affiliates 260 --- ---
Interest and other income 982 --- ---
Equity in earnings of
Associated Companies 1,691 --- ---
-------- -------- --------
Total revenue 16,405 --- 15,561
-------- -------- --------
OPERATING EXPENSES
Operating expenses 4,061 --- 5,953
General and administrative 983 --- ---
Depreciation and amortization 3,654 --- 1,763
Interest expense 2,767 2,202 3,303
Loss provision 863 --- ---
-------- -------- --------
Total operating expenses 12,328 2,202 11,019
-------- -------- --------
Income from operations before
minority interest 4,077 (2,202) 4,542
Minority interest (281) --- ---
-------- -------- --------
Net income $ 3,796 $ (2,202) $ 4,542
======== ======== ========
Net income per share $ 0.66
========
Weighted average number of
common shares outstanding 5,753,709
=========
- continued -
</TABLE>
Page 17 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH REALTY TRUST INCORPORATED
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS - continued
For the year ended December 31, 1995
(in thousands, except per share amounts)
(Unaudited)
Repayment
of Debt(4) Other(5) Pro Forma(6)
----------- --------- ------------
REVENUES
<S> <C> <C> <C>
Rental revenue $ --- $ (595) $ 28,438
Fees and reimbursements from
affiliates --- --- 260
Interest and other income --- 396 1,378
Equity in earnings of
Associated Companies --- 106 1,797
-------- -------- --------
Total Revenue --- (93) 31,873
-------- -------- --------
OPERATING EXPENSES
Operating expenses --- (273) 9,741
General and administrative --- 200 1,183
Depreciation and amortization --- (116) 5,301
Interest expense (1,792) --- 6,480
Loss provision --- --- 863
-------- -------- --------
Total operating expense (1,792) (189) 23,568
-------- -------- --------
Income from operations before
minority interest 1,792 96 8,305
Minority interest --- (352) (633)
-------- -------- --------
Net income $ 1,792 $ (256) $ 7,672
======== ======== ========
Net income per share $ 0.79
========
Weighted average number of
common shares outstanding 9,661,553
=========
</TABLE>
Page 18 of 41
<PAGE>
GLENBOROUGH REALTY TRUST INCORPORATED
NOTES AND ADJUSTMENTS TO PRO FORMA CONSOLIDATED
STATEMENTS OF OPERATIONS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1996 AND THE YEAR ENDED DECEMBER 31, 1995
(unaudited, dollars in thousands)
1. Reflects the historical consolidated operations of the Company for the nine
months ended September 30, 1996, excluding extraordinary items and Consolidation
costs, and the as adjusted consolidated operations of the Company for the year
ended December 31, 1995. The as adjusted operations reflect the Consolidation
and related transactions as if such transactions had occurred on January 1,
1995. These Proforma Consolidated Statements of Operations should be read in
conjunction with the unaudited As Adjusted Statement of Operations of the
Company for the year ended December 31, 1995 included on pages 22 to 28 of this
Form 8-K/A.
2. Reflects the repayment of the Company's original secured bank line with
borrowings on the Company's replacement Facility and Term Loan. The repayment
results in a net increase in interest expense consisting of the following:
Nine Months Year
Ended Ended
September 30, December 31,
1996 1995
------------ -----------
Interest differential $ 1,461 $ 1,933
Amortization of new loan fees 221 295
Amortization of old loan fees (56) (99)
Unused Facility fees 55 73
------- -------
$ 1,681 $ 2,202
======= =======
The amortization of the new loan fees is based upon total estimated fees and
costs of $1,309 over the respective terms of the Facility and Term Loan. The
unused Facility fees are based upon 0.25% of the pro forma unused Facility
capacity as of September 30, 1996 of approximately $29,382.
The Facility provides for maximum borrowings of up to $50,000, but is limited to
a specified borrowing base ($50,000 on a pro forma basis), has an initial term
of two years which can be extended an additional three years at the option of
the Company, bears interest at LIBOR plus 2.375% (assumed to be 7.750%),
requires monthly interest-only payments and requires annual unused Facility fees
equal to 0.25% of the unused Facility balance. The Term Loan has a term of two
years and bears interest at LIBOR plus 2.375% (assumed to be 7.750%). In
connection with obtaining the Facility and Term Loan, the Company incurred
commitment fees and other costs totaling approximately $1,309.
Page 19 of 41
<PAGE>
3. Reflects the historical operations of the Carlsberg Properties, TRP
Properties, UCT Property, Bond Street Property, Kash n' Karry Property and the
San Antonio Hotel.
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1996
(or portion of 1996 prior to acquisition)
----------------------------------------
Carlsberg TRP UCT
Properties Properties Property
----------- ----------- ---------
<S> <C> <C> <C>
Revenues $ 2,291 $ 5,979 $ 2,290
Operating expenses (856) (1,881) (1,016)
------- ------- -------
$ 1,435 $ 4,098 $ 1,274
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1996
(or portion of 1996 prior to acquisition)
----------------------------------------
Bond Kash n' San
Street Karry Antonio Combined
Property Property Hotel Total
-------- -------- ------- -------
<S> <C> <C> <C> <C>
Revenues $ 519 $ 93 $ 204 $ 11,376
Operating expenses (190) --- (35) (3,978)
------ ------ ------ -------
$ 329 $ 93 $ 169 $ 7,398
====== ====== ====== =======
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1995
----------------------------
Carlsberg TRP UCT
Properties Properties Property
----------- ----------- ---------
<S> <C> <C> <C>
Revenues $ 2,836 $ 7,336 $ 4,239
Operating expenses (1,061) (2,548) (2,042)
------- ------- -------
$ 1,775 $ 4,788 $ 2,197
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1995
----------------------------
Bond Kash n' San
Street Karry Antonio Combined
Property Property Hotel Total
-------- -------- ------- -------
<S> <C> <C> <C> <C>
Revenues $ 631 $ 166 $ 353 $ 15,561
Operating expenses (241) --- (61) (5,953)
------- ------- ------- -------
$ 390 $ 166 $ 292 $ 9,608
======= ======= ======= =======
</TABLE>
Also, reflects estimated depreciation and amortization, based upon estimated
useful lives of 40 years on a straight-line basis, estimated interest on the pro
forma Facility borrowings of approximately $14,744 used to acquire the Carlsberg
Page 20 of 41
<PAGE>
Properties in 1996 and approximately $38,849 used to acquire the Carlsberg
Properties, UCT Property, Bond Street Property, Kash n' Karry Property and San
Antonio Hotel in 1995 and estimated interest on the pro forma mortgage debt
assumed of approximately $25,200 in connection with the acquisition of the
Carlsberg Properties and the TRP Properties in 1996 and 1995. The estimated
interest on the Facility borrowing is based on an assumed interest rate of
7.750% and estimated interest on the mortgage loans assumed is based upon an
assumed weighted average rate of 8.570%.
4. Reflects the reduction of interest expense resulting from the repayment of
borrowings on the Facility of approximately $23,128 at an assumed interest rate
of 7.750%. The Company's Facility and Term Loan are subject to changes in LIBOR.
Based upon the pro forma Facility and Term Loan balances as of September 30,
1996, a 1/8% increase or decrease in LIBOR will result in increased or decreased
annual interest expense of approximately $32.
5. Reflects a (i) net increase in the Company's equity in earnings from its
investments in GC and GHG, (ii) interest income on the note receivable from
Carlsberg secured by the Grunow Medical Building, (iii) the elimination of
actual revenues and expenses of the All American Self Storage properties that
were sold in June 1996, (iv) the minority interests' share of the pro forma
adjustments to the net income of the Operating Partnership and (v) increased
general and administrative expenses of approximately $150 per year related to
the property acquisitions. The net increase in equity in earnings from its
investments in GC and GHG is comprised primarily of (i) a decrease due to a
reduction of annual management fees of approximately $152 received by GC from
the UCT Property and the Bond Street Property net of estimated taxes, (ii)
approximately $300 in additional management fees for GC from certain related
Carlsberg properties not acquired by the Company and (iii) an increase due to an
estimated annual increase in GHG's net income of approximately $38 due to its
leasing of the San Antonio Hotel from the Company.
6. The pro forma taxable income before dividends paid deduction for the Company
for the nine months ended September 30, 1996 was approximately $8,825 which has
been calculated as pro forma net income from operations of approximately $7,881
plus GAAP basis depreciation and amortization of approximately $4,036 less tax
basis depreciation and amortization and other tax differences of approximately
$3,092.
Page 21 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH REALTY TRUST INCORPORATED
AS ADJUSTED CONSOLIDATING STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(unaudited, in thousands, except per share amounts)
Glenborough As Adjusted
Realty Trust Historical Hotel Management
Incorporated(a) Combined(b) Operations(c) Operations(d)
-------------- ----------- ----------- ------------
REVENUES:
<S> <C> <C> <C> <C>
Rental revenues $ --- $ 9,189 $ 2,182 $ ---
Management fee income --- 260 --- ---
Interest and other income --- 982 --- ---
Equity in earnings of
Associated Companies --- --- 32 1,659
-------- -------- -------- --------
Total revenues --- 10,431 2,214 1,659
-------- -------- -------- --------
OPERATING EXPENSES:
Operating expenses --- 3,698 363 ---
General and administrative --- 953 --- ---
Depreciation and
amortization --- 2,488 944 ---
Interest expense --- 1,993 --- ---
Loss provision --- 863 --- ---
-------- -------- -------- --------
Total operating
expenses --- 9,995 1,307 ---
-------- -------- -------- --------
Income from operations
before minority interest --- 436 907 1,659
Minority interest --- --- --- ---
-------- -------- -------- --------
Net income (loss) $ --- $ 436 $ 907 $ 1,659
======== ======== ======== ========
-continued-
</TABLE>
Page 22 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH REALTY TRUST INCORPORATED
AS ADJUSTED CONSOLIDATING STATEMENT OF OPERATIONS - continued
For the Year Ended December 31, 1995
(unaudited, in thousands, except per share amounts)
Glenborough
Debt Pay Other Realty Trust
GPA Down and Pro-Forma Incorporated
Properties(e) Refinancings(f) Adjustments Consolidated
-------------- ----------- ----------- ------------
REVENUES:
<S> <C> <C> <C> <C>
Rental revenues $ 2,101 $ --- $ --- $ 13,472
Management fee income --- --- --- 260
Interest and other income --- --- --- 982
Equity in earnings of
Associated Companies --- --- --- 1,691
-------- -------- -------- --------
Total revenues 2,101 --- --- 16,405
-------- -------- -------- --------
OPERATING EXPENSES:
Operating expenses --- --- --- 4,061
General and administrative --- --- 30 (g) 983
Depreciation and
amortization --- --- 222 (h) 3,654
Interest expense --- 774 --- 2,767
Loss provision --- --- --- 863
-------- -------- -------- --------
Total operating
expenses --- 774 252 12,328
-------- -------- -------- --------
Income from operations
before minority interest 2,101 (774) (252) 4,077
Minority interest --- --- (281) (i) (281)
-------- -------- -------- --------
Net income (loss) $ 2,101 $ (774) $ (533) $ 3,796
======== ======== ======== ========
Net income per share $ 0.66
========
Weighted average shares
outstanding 5,753,709(j)
=========
</TABLE>
Page 23 of 41
<PAGE>
GLENBOROUGH REALTY TRUST INCORPORATED
NOTES AND ADJUSTMENTS TO
AS ADJUSTED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Year ended December 31, 1995
(unaudited, in thousands)
a) Not applicable as the Company had no operations prior to the
Consolidation.
b) Reflects the as adjusted historical combined statements of
operations of the Partnerships and GC. See as adjusted
historical combining statement of operations.
c) Reflects (i) estimated revenues and expenses related to the
Company's hotels leased to and operated by GHG and (ii) the
Company's equity in GHG's earnings. See as adjusted statement
of hotel lessor operations and statement of operations for
GHG.
d) Reflects the Company's equity in the earnings of GC of
approximately $449 and GIRC of approximately $1,210.
e) Reflects the historical revenues and expenses of the GPA
properties acquired.
f) Reflects a net increase in interest expense resulting from the
refinancing of mortgage loans and other notes payable with
borrowings of (i) $20,000 on a secured bank line with an
investment bank, (ii) $10,000 on secured lines of credit with
a bank and (iii) $2,650 of secured loan with a bank. The
$20,000 secured bank line has a term of ten years and bears a
fixed interest rate of 7.57%. The $10,000 secured bank line
of credit has a term of three years and bears a variable
interest rate at LIBOR plus 2.365% (7.88% at December 31,
1995). The secured loan with a bank has a term of 10 years
and bears a fixed interest rate of 7.75%. The net increase in
interest expense is comprised of the following:
Increase due to new borrowings on secured
bank lines, lines of credit and loans $ 2,507
Increase due to amortization of new loan
origination fees 177
Reduction due to repayment of mortgage
loans and other notes payable (1,910)
-------
Net increase $ 774
=======
g) Reflects estimated state income and franchise taxes.
h) Reflects estimated depreciation and amortization of the GPA
Properties acquired, based upon asset lives of 40 years.
Page 24 of 41
<PAGE>
i) Reflects GPA's approximate 13.63% ownership interest in the
operations of Glenborough Properties, L.P. (the "Operating
Partnership"), of which the Company is a 84.37% owner. GPA's
minority interest is calculated as follows;
Pro forma income before minority
interest of the Company $ 4,077
Add Company expenses before
Consolidation 983
Equity in earnings of Associated
Companies and management fees
earned by the Company (1,951)
Less fees paid by the Operating
Partnership to the Company (1,047)
Pro forma income from operations
of the Operating Partnership 2,062
-------
GPA's minority interest $ 281
=======
j) Represents the weighted average shares outstanding assuming
that GPA's Units in the Operating Partnership are not
converted into Common Stock of the Company.
Page 25 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH REALTY TRUST INCORPORATED
AS ADJUSTED HISTORICAL COMBINING STATEMENT OF OPERATIONS
For the Year ended December 31, 1995
(unaudited, in thousands)
1995
Historical Hotel Management
Combined(a) Operations(b) Operations(c)
----------- ----------- ------------
Revenues:
<S> <C> <C> <C>
Rental revenues $ 15,454 $ (6,265) $ ---
Fee and reimbursements 16,019 --- (16,019)
Interest and other 2,698 (302) (560)
-------- -------- --------
Total revenues 34,171 (6,567) (16,579)
-------- -------- --------
Expenses:
Operating 8,576 (4,998) ---
General and administrative 15,947 --- (14,361)
Depreciation and
amortization 4,762 (944) (1,487)
Interest expense 2,129 --- (1,439)
Loss provision 1,876 --- (1,013)
-------- -------- --------
Total expenses 33,290 (5,942) (18,300)
-------- -------- --------
Operating income (loss) 881 (625) 1,721
Income taxes (357) --- 357
-------- -------- --------
Net income (loss) $ 524 $ (625) $ 2,078
======== ======== ========
-continued-
</TABLE>
Page 26 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH REALTY TRUST INCORPORATED
AS ADJUSTED HISTORICAL COMBINING STATEMENT OF OPERATIONS - continued
For the Year ended December 31, 1995
(unaudited, in thousands)
As Adjusted
Internalize Other Historical
Management (d) Adjustments Combined
-------------- ------------ ---------
Revenues:
<S> <C> <C> <C>
Rental revenues $ --- $ --- $ 9,189
Fee and reimbursements --- 260 (f) 260
Interest and other --- (854)(e) 982
-------- -------- --------
Total revenues --- (594) 10,431
-------- -------- --------
Expenses:
Operating 120 --- 3,698
General and administrative (633) --- 953
Depreciation and
amortization --- 157 (f) 2,488
Interest expense --- 1,303 (e,g) 1,993
Loss provision --- --- 863
-------- -------- --------
Total expenses (513) 1,460 9,995
-------- -------- --------
Operating income (loss) 513 (2,054) 436
Income taxes --- --- ---
-------- -------- --------
Net income (loss) $ 513 $ (2,054) $ 436
======== ======== ========
</TABLE>
Page 27 of 41
<PAGE>
GLENBOROUGH REALTY TRUST INCORPORATED
NOTES AND ADJUSTMENTS TO
AS ADJUSTED HISTORICAL COMBINING STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(unaudited, in thousands)
a) Reflects the historical combined operations of the
Partnerships and GC.
b) Reflects the elimination of historical revenues and expenses
of the three hotels (Arlington, Tucson and Ontario) owned by
the Company, that are leased to and operated by GHG.
c) Represents the elimination of certain revenues and expenses
that are included in GC's historical statements of operations
due to the internalization of management.
d) Further reflects the internalization of management including
(i) property administration costs that were reimbursed to GC
by the Partnerships, but excluded by elimination of
intercompany transactions in the historical combined financial
statements of the Partnerships and GC and (ii) a reduction of
general and administrative expenses (including legal,
accounting and investor relations) resulting from the
Consolidation and internalization of management.
e) Represents the elimination of interest income and expense
related to the Finley note receivable and related mortgage
debt that were repaid in April 1995.
f) Reflects management fees related to Glenborough Institutional
Fund I that are earned by the Company that were previously
earned by GC and amortization of the related management
contract.
g) Reflects the historical interest expense related to notes
payable contributed by GC.
Page 28 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH REALTY TRUST INCORPORATED
AS ADJUSTED STATEMENT OF HOTEL LESSOR OPERATIONS
For the year ended December 31, 1995
(unaudited, in thousands)
Lease Other
Adjustments(a) Adjustments As Adjusted
------------- ----------- -----------
Revenues:
<S> <C> <C> <C>
Rental revenues $ 2,182 $ --- $ 2,182
Equity in earnings of GHG --- 32 (b) 32
-------- -------- --------
Total revenues 2,182 32 2,214
-------- -------- --------
Expenses:
Operating 275 88 (c) 363
Depreciation and amortization 944 --- 944
-------- -------- --------
Total expenses 1,219 88 1,307
-------- -------- --------
Net income (loss) $ 963 $ (56) $ 907
======== ======== ========
</TABLE>
Page 29 of 41
<PAGE>
GLENBOROUGH REALTY TRUST INCORPORATED
NOTES AND ADJUSTMENTS TO
AS ADJUSTED STATEMENT OF HOTEL LESSOR OPERATIONS
For the Year Ended December 31, 1995
(unaudited, in thousands)
a) Reflects the estimated lease payments, property taxes and
depreciation and amortization associated with the hotels owned
by the Company and leased to and operated by GHG. See as
adjusted statement of operations for GHG.
b) Reflects the Company's equity in earnings of GHG. See as
adjusted statement of operations for GHG.
c) Reflects management fees to be paid by the Company to GHG.
GHG will provide fee management services related to the Irving
hotel.
Page 30 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH HOTEL GROUP
AS ADJUSTED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(unaudited, in thousands)
Historical (a)
--------------------------------------------------------------------------
Arlington Tucson Ontario Sub-total
--------- ------ ------- --------
Revenues:
<S> <C> <C> <C> <C>
Room revenues $ 2,210 $ 2,667 $ 1,388 $ 6,265
Management fees --- --- --- ---
Interest and other 97 121 84 302
-------- -------- -------- --------
Total revenues 2,307 2,788 1,472 6,567
-------- -------- -------- --------
Expenses:
Operating 1,113 1,225 869 3,207
Salaries & administration 615 635 541 1,791
Depreciation and
amortization 325 386 233 944
Interest --- --- --- ---
Lease expense --- --- --- ---
-------- -------- -------- --------
Total operating
expenses 2,053 2,246 1,643 5,942
-------- -------- -------- --------
Operating income
(loss) 254 542 (171) 625
Income taxes --- --- --- ---
-------- -------- -------- --------
Income before minority
interest 254 542 (171) 625
Minority interest --- --- --- ---
-------- -------- -------- --------
Net income (loss) $ 254 $ 542 $ (171) $ 625
======== ======== ======== ========
-continued-
</TABLE>
Page 31 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH HOTEL GROUP
AS ADJUSTED STATEMENT OF OPERATIONS - continued
For the Year Ended December 31, 1995
(unaudited, in thousands)
As Adjusted
--------------------------------------
Lease Other As Adjusted
Adjustments(b) Adjustments GHG
------------ ------------ --------
Revenues:
<S> <C> <C> <C>
Room revenues $ --- $ --- $ 6,265
Management fees --- 2,225 (c) 2,225
Interest and other --- --- 302
-------- -------- --------
Total revenues --- 2,225 8,792
-------- -------- --------
Expenses:
Operating (275) (644) (d) 2,288
Salaries & administration --- 2,320 (c) 4,111
Depreciation and amortization (944) 87 (f) 87
Interest --- 9 9
Lease expense 2,182 --- 2,182
-------- -------- --------
Total operating
expenses 963 1,772 8,677
-------- -------- --------
Operating income
(loss) (963) 453 115
Income taxes --- (46) (g) (46)
-------- -------- --------
Income before minority
interest (963) 407 69
Minority interest --- (36) (h) (36)
-------- -------- --------
Net income (loss) $ (963) $ 371 $ 33
======== ======== ========
Preferred stock dividends $ 98 (i)
Common stock dividends 23
</TABLE>
Page 32 of 41
<PAGE>
GLENBOROUGH HOTEL GROUP
NOTES AND ADJUSTMENTS TO AS ADJUSTED STATEMENTS OF OPERATIONS
For the Year Ended December 31, 1995
(unaudited, in thousands, except per share amounts)
a) Reflects the historical operations of the three hotels
(Arlington, Tucson and Ontario) owned by the Company that are
leased to and operated by GHG.
b) Reflects the estimated lease payments, property taxes and
depreciation and amortization associated with the hotels owned
by the Company that will be included in the operations of the
Company. See as adjusted statement of hotel lessor operations
for the Company.
c) Reflects management fees of $718 and reimbursement of salaries
of $1,507 associated with fee management services provided to
third parties and the Company related to the contracts owned
by Resort Group Inc., the Irving hotel and the Outlook Income
Fund 9 Hotels ("OIF 9 Hotels"). The estimated fees and
reimbursements are comprised of the following:
Resort Group, Inc.:
Galveston, Texas $ 347
Port Aransas, Texas 73
Irving Hotel 514
OIF 9 Hotels 1,291
--------
Total $ 2,225
========
d) Reflects the elimination of historical management fees paid
by the three hotels (Arlington, Tucson and Ontario) owned by
the Company resulting from the internalization of hotel
management.
e) Reflects an increase in general and administrative expenses,
including salaries, associated with operating as a separate
entity and fee management services provided the third parties
by GHG. Under the prior ownership structure general and
administrative expenses were recorded at the partnership level
and not at the property operating level. The increase
consists of the following:
Reimbursable salaries and benefits $ 1,507
Corporate and administrative
salaries and benefits 546
Rent and other overhead, including
utilities 95
Resort Group Inc. expenses 20
General and administrative expenses,
including accounting, legal and
directors fees 152
--------
Total $ 2,320
========
Page 33 of 41
<PAGE>
f) Reflects estimated depreciation for the year ended December
31, 1995 of furniture, equipment and buildings of $3 that will
be owned by GHG, and amortization of the contracts owned by
Resort Group, Inc. of $84.
g) Reflects estimated income tax expense of GHG.
h) Reflects the approximately 20% minority ownership interest in
the Resort Group Inc. held by an unaffiliated third party.
i) Reflects estimated dividends paid by GHG equal to $600 a share
plus 75% of any remaining cash flow. The primary source of
dividends paid by GHG will be cash flow from operations which
is in excess of GHG's earnings.
Page 34 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH CORPORATION
(FORMERLY GLENBOROUGH REALTY CORPORATION)
AS ADJUSTED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(unaudited, in thousands)
As Adjusted
Management Expired Participating Hotel
Operations(a) Contracts(b) Partnerships(c) Group(d)
------------- ----------- ------------- --------
REVENUES:
<S> <C> <C> <C> <C>
Fees and reimbursements $ 16,019 $ (1,036) $ (186) $ (4,331)
Interest and other 560 (336) (98) (29)
-------- -------- -------- --------
Total revenues 16,579 (1,372) (284) (4,360)
-------- -------- -------- --------
EXPENSES:
Salaries & administration 14,361 (3,192) (697) (3,862)
Depreciation and
amortization 1,487 (562) (121) (87)
Interest expense 1,439 --- (1,438) ---
Loss provision 1,013 (1,013) --- ---
-------- -------- -------- --------
Total expenses 18,300 (4,767) (2,256) (3,949)
-------- -------- -------- --------
Income (loss) before provisions
for income taxes (1,721) 3,395 1,972 (411)
Income taxes (357) --- --- ---
-------- -------- -------- --------
Net income (loss) $ (2,078) $ 3,395 $ 1,972 $ (411)
======== ======== ======== ========
-continued-
</TABLE>
Page 35 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH CORPORATION
(FORMERLY GLENBOROUGH REALTY CORPORATION)
AS ADJUSTED STATEMENT OF OPERATIONS - continued
For the Year Ended December 31, 1995
(unaudited, in thousands)
As
Rancon Other Adjusted
Contracts(e) Adjustments GC
------------ ----------- ---------
REVENUES:
<S> <C> <C> <C>
Fees and reimbursements $ (5,863) $ --- $ 4,603
Interest and other --- --- 97
-------- -------- --------
Total revenues (5,863) --- 4,700
-------- -------- --------
EXPENSES:
Salaries & administration (3,118) 12 (f) 3,504
Depreciation and
amortization (717) 284 (g) 284
Interest expense --- 79 (h) 80
Loss provision --- --- ---
-------- -------- --------
Total expenses (3,835) 375 3,868
-------- -------- --------
Income (loss) before provision
for income taxes (2,028) (375) 832
Income taxes --- 24 (i) (333)
-------- -------- --------
Net income (loss) $ (2,028) $ (351) $ 499
======== ======== ========
Preferred stock
dividends $ 745 (j)
Common stock
dividends $ 38
</TABLE>
Page 36 of 41
<PAGE>
GLENBOROUGH CORPORATION
(FORMERLY GLENBOROUGH REALTY CORPORATION)
NOTES AND ADJUSTMENTS TO AS ADJUSTED STATEMENTS OF OPERATIONS
For the Year Ended December 31, 1995
(unaudited in thousands, except per share amounts)
a) Reflects the as adjusted consolidated historical management
operations of GC, GHG and GIRC.
b) Reflects the historical revenues and expenses associated with
certain management contracts which expired prior to the date
of Consolidation.
c) Reflects the historical revenues and expenses associated with
management services provided to the Partnerships by GC which
were eliminated as a result of the internalization of
management.
d) Reflects the historical revenues and expenses associated with
hotel management services provided to the Partnerships by GC
and it's subsidiaries which were eliminated as a result of the
internalization of management or are now incurred by GHG.
e) Reflects actual revenues and expenses, including salaries,
benefits and other administrative costs related to the Rancon
Contracts that were purchased by GC on January 1, 1995 and
that were contributed to GIRC by the Company. On a historical
basis such revenues and expenses were included in the
operations of GC.
f) Reflects an estimated net increase of salaries and general and
administrative expenses (including legal, accounting and
office expenses) resulting from the Consolidation. The net
increase consists of the following:
Net increase in general and administrative
expenses, including accounting, legal
and directors fees $ 100
Reduction of officers' salaries ( 88)
--------
Total $ 12
========
g) Reflects the estimated depreciation and amortization related
to furniture and equipment and the estimated amortization of
contracts.
h) Reflects the estimated interest associated with the note
payable of $1,000 contributed to GC by the Company. The note
payable bears interest at 9%, with interest only payments, and
matures in March of 1998.
i) Reflects estimated decrease in income tax expense of GC.
Page 37 of 41
<PAGE>
j) Reflects dividends paid by GC equal to $0.80 per share plus
95% of any remaining cash flow. The primary source of
dividends paid by GC is cash flow from operations which is in
excess of GC's earnings.
Page 38 of 41
<PAGE>
<TABLE>
<CAPTION>
GLENBOROUGH INLAND REALTY CORPORATION
AS ADJUSTED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(unaudited, in thousands)
Rancon Other As Adjusted
Adjustments(a) Adjustments GIRC
------------ ---------- ----------
Revenues:
Fees and
<S> <C> <C> <C>
reimbursements $ 5,863 $ --- $ 5,863
Interest and other --- --- ---
-------- -------- --------
Total revenues 5,863 --- 5,863
-------- -------- --------
Expenses:
Salaries &
administration 3,118 (224) (b) 2,894
Depreciation and
amortization 717 30 (c) 747
Interest expense --- 101 (d) 101
-------- -------- --------
Total expenses 3,835 (93) 3,742
-------- -------- --------
Income (loss)
before provision for
income taxes 2,028 93 2,121
Income taxes --- (848) (e) (848)
-------- -------- --------
Net income (loss) $ 2,028 $ (755) $ 1,273
======== ======== ========
Preferred stock
dividends $ 1,919 (f)
Common stock
dividends $ 100
</TABLE>
Page 39 of 41
<PAGE>
GLENBOROUGH INLAND REALTY CORPORATION
NOTES AND ADJUSTMENTS TO AS ADJUSTED STATEMENTS OF OPERATIONS
For the Year Ended December 31, 1995
(unaudited, in thousands, except per share amounts)
a) Reflects the historical management fees and expenses related to the
Rancon Contracts with a carrying value of $6,813 contributed to
GIRC by the Company.
b) Reflects an estimated reduction of salaries, benefits and other
expenses resulting primarily from reductions in officers' salaries
resulting from the Consolidation.
c) Reflects estimated depreciation of furniture and equipment
contributed to GIRC by the Company.
d) Reflects the estimated interest expense associated with a note
payable consisting of $2,566 contributed to GIRC by the Company and
$2,100 related to the acquisition of certain land parcels. The
notes payable bears interest at 9%, with interest only payments,
and matures in March of 1998.
e) Reflects estimated income tax expense of GIRC.
f) Reflects estimated dividends paid by GIRC equal to $0.80 per share
plus 95% of any remaining cash flow. The primary source of
dividends paid by GIRC is cash flow from operations which is in
excess of GIRC's earnings.
Page 40 of 41
<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.
GLENBOROUGH REALTY TRUST INCORPORATED
By: Glenborough Realty Trust Incorporated,
Date:December 30, 1996 /s/ Andrew Batinovich
Andrew Batinovich
Director, Executive Vice President,
Chief Operating Officer
and Chief Financial Officer
(Principal Financial Officer)
Date:December 30, 1996 /s/ Terri Garnick
Terri Garnick
Senior Vice President,
Chief Accounting Officer,
Treasurer
(Principal Accounting Officer)
Page 41 of 41
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1.000
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0
0
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</TABLE>
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