<PAGE> 1
EXHIBIT 99.2
PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma consolidated balance sheet as of September 30,
2000, has been prepared to reflect (i) the disposition of multifamily assets and
liabilities of the Multifamily Portfolio; (ii) assumption by the Buyer and
retirement of certain mortgage loans and term debt and the repayment of the
Company's line of credit facility, and (iii) repurchase of common stock of the
Company from affiliates of the Buyer as if each of such transactions had been
completed on September 30, 2000.
The following unaudited pro forma consolidated statements of operations for the
nine months ended September 30, 2000, and for the year ended December 31, 1999,
have been prepared to reflect (i) the disposition of multifamily assets and
liabilities of the Multifamily Portfolio; (ii) assumption by the Buyer and
retirement of certain mortgage loans and term debt and the repayment of the
Company's line of credit facility; and (iii) repurchase of common stock of the
Company from affiliates of the Buyer as if each of such transactions had been
completed on January 1, 1999.
These unaudited pro forma consolidated financial statements should be read in
conjunction with the financial statements and related notes of the Company
included in the Company's reports filed under the Exchange Act. In the opinion
of management, all adjustments necessary to reflect the effects of the
transactions have been made.
The pro forma consolidated financial information is unaudited and is not
necessarily indicative of the results that would have occurred if the
transactions had been consummated in the periods presented or on any particular
date in the future, nor does it purport to represent the financial position,
results of operations, or cash flows for future periods.
<PAGE> 2
GLENBOROUGH REALTY TRUST INCORPORATED
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2000
(UNAUDITED, DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PROPERTY REPAYMENT OF
HISTORICAL (1) DISPOSITIONS (2) DEBT (3) PRO FORMA
---------------- ------------------ -------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Rental properties, gross $ 1,603,498 $ (403,433) $ - $ 1,200,065
Accumulated depreciation (141,262) 32,548 - (108,714)
---------------- ------------------ -------------- --------------
Rental properties, net 1,462,236 (370,885) - 1,091,351
Investments in development 42,873 - - 42,873
Investments in joint ventures 9,018 - - 9,018
Mortgage loans receivable 36,902 - - 36,902
Investment in associated company 9,198 - - 9,198
Cash and cash equivalents 21,864 263,989 (235,085) 50,768
Other assets 51,714 (8,972) (3,136) 39,606
---------------- ------------------ -------------- --------------
$ 1,633,805 $ (115,868) $ (238,221) $ 1,279,716
================ ================== ============== ==============
LIABILITIES:
Mortgage loans $ 679,106 $ (96,931) $ (162,327) $ 419,848
Unsecured term debt and bank line 142,481 - (70,231) 72,250
Other liabilities 24,115 (2,693) - 21,422
---------------- ------------------ -------------- --------------
845,702 (99,624) (232,558) 513,520
---------------- ------------------ -------------- --------------
MINORITY INTEREST 78,767 2,503 (651) 80,619
---------------- ------------------ -------------- --------------
STOCKHOLDERS' EQUITY
Common stock 29 (2) - 27
Preferred stock 10 - - 10
Additional paid-in capital 794,003 (38,022) - 755,981
Deferred compensation (526) - - (526)
Retained deficit (84,180) 19,277 (5,012) (69,915)
---------------- ------------------ -------------- --------------
Total equity 709,336 (18,747) (5,012) 685,577
---------------- ------------------ -------------- --------------
$ 1,633,805 $ (115,868) $ (238,221) $ 1,279,716
================ ================== ============== ==============
</TABLE>
The accompanying notes are an integral part of this balance sheet.
<PAGE> 3
GLENBOROUGH REALTY TRUST INCORPORATED
NOTES AND ADJUSTMENTS TO PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2000
(UNAUDITED)
1. Reflects the historical consolidated balance sheet of the Company as of
September 30, 2000.
2. Reflects the completed disposition of the Multifamily Portfolio, composed
of 36 apartment communities or approximately 9,253 units to Bush Gardens,
LLC, an affiliate of Westdale Properties America I, Ltd., for approximately
$399 million. The bulk of the multifamily portfolio is concentrated in
Texas and other southern states. The Texas component comprises 17
communities (5,422 units), with 13 properties (2,399 units) located in
North Carolina, Georgia, and Tennessee. The balance of the portfolio
comprises 6 communities (1,432 units) in Indiana, Arizona, and Nevada.
<TABLE>
<CAPTION>
NUMBER OF
PROPERTY CITY STATE UNITS
--------------------------------- --------------- --------- -----------
<S> <C> <C> <C>
Overlook Scottsdale AZ 224
Stone Ridge at Vinings Atlanta GA 440
Woodmere Trace Duluth GA 220
Crosscreek Indianapolis IN 208
Harcourt Club Indianapolis IN 148
Island Club Indianapolis IN 314
Arrowood Crossing Charlotte NC 200
Chase on Commonwealth Charlotte NC 132
Courtyard Charlotte NC 55
Landing on Farmhurst Charlotte NC 125
Sharonridge Charlotte NC 75
Wendover Glen Charlotte NC 96
Chase Monroe I & II Monroe NC 216
Willow Glen Monroe NC 120
Sabal Point Pineville NC 374
Oaks Raleigh NC 88
Sahara Gardens Las Vegas NV 312
Villas De Mission Las Vegas NV 226
Players Club of Brentwood Nashville TN 258
Hunters Chase Austin TX 424
Hunterwood Austin TX 160
Longspur Austin TX 252
Silvervale Crossing Austin TX 336
Walnut Creek Crossing Austin TX 280
Wind River Crossing Austin TX 352
Bear Creek Crossing Houston TX 200
Cypress Creek Houston TX 256
North Park Crossing Houston TX 336
Willow Brook Crossing Houston TX 208
Park at Woodlake Houston TX 564
Jefferson Creek Irving TX 300
Jefferson Place Irving TX 424
La Costa Plano TX 462
Bandera Crossing San Antonio TX 204
Hollows San Antonio TX 432
Vista Crossing San Antonio TX 232
-----------
Total units 9,253
===========
Total number of properties sold: 36
</TABLE>
In connection with the sale, the Company incurred approximately $5.4
million in selling costs. These charges are not reflected as an expense in
the pro forma consolidated statements of operations for the nine months
ended September 30, 2000, and for the year ended December 31, 1999, as they
relate directly to the disposition and are considered nonrecurring.
<PAGE> 4
Also, reflects assumption of mortgage loans of approximately $97 million by
the Buyer. In conjunction with the assumption of mortgage loans by the
Buyer, the Company has written off approximately $700,000 in unamortized
loan fees. These fees are not reflected as an expense in the pro forma
consolidated statements of operations for the nine months ended September
30, 2000, and for the year ended December 31, 1999, as the expenses have
been recorded as an extraordinary item. However, the write-off is shown as
a reduction of other assets on the accompanying pro forma balance sheet as
of September 30, 2000.
Also, reflects the repurchase of 2,010,700 common shares of Company stock
previously held by Westdale Properties America I, Ltd. and affiliates
(based on an agreed per share value of $18.50 plus $0.4109 per share being
a pro rata portion of the per share amount of any dividend on or
distribution payable on the shares of common stock of the Company during
the fiscal quarter ended December 31, 2000).
Also, reflects the assumption of certain assets and liabilities by the
Buyer comprising impound accounts, prepayments, security deposits,
interest, and property taxes payables.
After costs associated with the disposition of the Multifamily Portfolio,
the pro forma gain on sale was approximately $22.5 million.
3. Reflects the retirement of mortgage loans of approximately $162 million and
unsecured term debt of $39 million and the repayment of approximately $31
million of the Company's line of credit facility from sales proceeds.
In conjunction with the retirement of the mortgage loans and unsecured term
loan amounts, the Company has incurred approximately $2.5 million in
prepayment penalty fees and has written off approximately $3.1 million in
unamortized loan fees. These charges are not reflected as expenses in the
pro forma consolidated statement of operations for the nine months ended
September 30, 2000, and for the year ended December 31, 1999, as the
expense has been recorded as an extraordinary item. However, the payment of
the prepayment penalty fees as a use of cash and the write-off are shown on
the accompanying pro forma consolidated balance sheet as of September 30,
2000.
4. Reflects the change in minority interest based on pro forma adjustments to
retained deficit and the repurchase of 2,010,700 shares of the Company's
common stock as of January 1, 1999.
<PAGE> 5
GLENBOROUGH REALTY TRUST INCORPORATED
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PROPERTY
HISTORICAL (1) DISPOSITIONS (2) PRO FORMA
---------------- ------------------- -------------
<S> <C> <C> <C>
REVENUES:
Rental revenue $ 182,869 $ (50,077) $ 132,792
Fees and reimbursements from affiliates 2,841 - 2,841
Interest and other income 6,867 - 6,867
Equity in earnings of associated company 1,027 - 1,027
Equity in loss of unconsolidated joint ventures (263) - (263)
Net gain on sales of real estate assets 1,652 1,652
---------------- ------------------- -------------
Total revenue 194,993 (50,077) 144,916
---------------- ------------------- -------------
OPERATING EXPENSES:
Operating expenses 62,361 (22,318) 40,043
General and administrative 7,326 (1,225) 6,101
Depreciation and amortization 44,595 (10,580) 34,015
Interest expense 47,349 (18,825) 28,524
---------------- ------------------- -------------
Total expenses 161,631 (52,948) 108,683
---------------- ------------------- -------------
Income from operations before minority interests 33,362 2,871 36,233
MINORITY INTERESTS (1,833) (515) (2,348)
---------------- ------------------- -------------
Net income (3) 31,529 2,356 33,885
PREFERRED DIVIDENDS (15,822) - (15,822)
---------------- ------------------- -------------
Net income allocable to common stockholders $ 15,707 $ 2,356 $ 18,063
================ =================== =============
BASIC PER SHARE DATA (4):
Net income available to common stockholders $0.53 $0.66
Basic weighted average shares outstanding 29,451,451 27,440,751
DILUTED PER SHARE DATA (4):
Net income available to common stockholders $0.53 $0.65
Diluted weighted average shares outstanding 33,279,375 31,268,675
</TABLE>
The accompanying notes are an integral part of this statement of operations.
<PAGE> 6
GLENBOROUGH REALTY TRUST INCORPORATED
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PROPERTY
HISTORICAL (1) DISPOSITIONS(2) PRO FORMA
---------------- ------------------- -------------
<S> <C> <C> <C>
REVENUES:
Rental revenue $ 255,339 $ (65,084) $ 190,255
Fees and reimbursements from affiliates 3,312 - 3,312
Interest and other income 6,404 - 6,404
Equity in earnings of associated company 1,222 - 1,222
Equity in loss of unconsolidated joint ventures (310) - (310)
Net gain on sales of real estate assets 9,013 - 9,013
---------------- ------------------- -------------
Total revenue 274,980 (65,084) 209,896
---------------- ------------------- -------------
OPERATING EXPENSES:
Operating expenses 88,037 (29,246) 58,791
General and administrative 9,688 (1,527) 8,161
Depreciation and amortization 58,295 (13,185) 45,110
Interest expense 64,782 (24,062) 40,720
Loss on sale of mortgage loan receivable 1,229 - 1,229
---------------- ------------------- -------------
Total expenses 222,031 (68,020) 154,011
---------------- ------------------- -------------
Income from operations before minority interests 52,949 2,936 55,885
MINORITY INTEREST (3,647) (448) (4,095)
---------------- ------------------- -------------
Net income (3) 49,302 2,488 51,790
PREFERRED DIVIDENDS (22,280) - (22,280)
---------------- ------------------- -------------
Net income allocable to common stockholders $ 27,022 $ 2,488 $ 29,510
================ =================== =============
BASIC PER SHARE DATA (4):
Net income available to common stockholders $0.86 $0.99
Basic weighted average shares outstanding 31,346,568 29,842,675
DILUTED PER SHARE DATA (4):
Net income available to common stockholders $0.86 $0.99
Diluted weighted average shares outstanding 35,522,627 34,018,733
</TABLE>
The accompanying notes are an integral part of this statement of operations.
<PAGE> 7
GLENBOROUGH REALTY TRUST INCORPORATED
NOTES AND ADJUSTMENTS TO PRO FORMA
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000, AND
FOR THE YEAR ENDED DECEMBER 31, 1999
(UNAUDITED)
1. Reflects the historical consolidated operations before extraordinary items
of the Company for the nine months ended September 30, 2000, and for the
year ended December 31, 1999
2. Reflects the elimination of rental revenue, property operating expenses,
general and administrative, and depreciation and amortization directly
related to the Multifamily Portfolio for the nine months ended September
30, 2000, and for the year ended December 31, 1999.
Also, reflects the elimination of interest on the mortgage loans and
unsecured term debt and bank line assumed and repaid in connection with the
sale of the Multifamily Portfolio for the nine months ended September 30,
2000, and for the year ended December 31, 1999.
Also, reflects the change in minority interest based on pro forma
adjustments to historical net income and the repurchase of 2,010,700 shares
of the Company's common stock as of January 1, 1999.
3. The pro forma taxable income before dividends paid deduction for the
Company for the nine months ended September 30, 2000, and for the year
ended December 31, 1999, is calculated as follows:
<TABLE>
<CAPTION>
FOR THE NINE
MONTHS ENDED FOR THE YEAR ENDED
SEPTEMBER 30, 2000 DECEMBER 31, 1999
------------------------ -----------------------
<S> <C> <C>
Pro forma net income from operations before minority
interests $ 36,233 $ 55,885
Add: GAAP-basis depreciation and amortization 34,015 45,110
Less: Tax-basis depreciation and amortization (21,260) (29,180)
Other book-to-tax differences (12,036) (14,058)
------------------------ -----------------------
Pro forma taxable income $ 36,952 $ 57,757
======================== =======================
</TABLE>
4. Pro forma basic and diluted per share amounts and weighted average shares
outstanding reflects the purchase of 2,010,700 shares of the Company's
common stock as of January 1, 1999.
