SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
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 27, 2001
PS BUSINESS PARKS, INC.
-----------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 1-10709 95-4300881
---------- ------- ----------
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification Number)
701 Western Avenue, Glendale, California 91201-2379
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 244-8080
--------------
N/A
---
(Former name or former address, if changed since last report)
ITEM 5. Other Events
PS Business Parks, Inc., through its consolidated partnership (collectively
referred to as the "Company"), acquired a business park consisting of 17
buildings known as "Metro Park North" on December 27, 2001 at an aggregate
purchase price of approximately $127.3 million (including closing costs and
deferred maintenance). The park was acquired through the acquisition of five
limited liability companies controlled by one seller. The Company is not
affiliated with the seller and the purchase price was established through arm's
length negotiations. The acquisition was funded with the Company's existing cash
balances, borrowings of $40 million from its unsecured line of credit with Wells
Fargo Bank and borrowings from an affiliate of $35 million.
The following table provides certain information concerning the facilities
acquired:
Name and Date of Allocation of Net Rentable Occupancy
Location Seller Acquisition Property Type Purchase Price Square Footage at Closing
------------------------- ------------------------ ------------- ------------- --------------- ---------------- ------------
Metro Park I
Rockville, Maryland MP Investments I, LLC 12/27/01 Flex/Office $ 41,939,000 340,424 100%
Metro Park II
Rockville, Maryland MP Investments II, LLC 12/27/01 Flex/Office 13,532,000 109,473 100%
Metro Park III
Rockville, Maryland MP Investments III, LLC 12/27/01 Office 17,594,000 116,753 62%
LLC
Metro Park IV
Rockville, Maryland MP Investments IV, LLC 12/27/01 Office 16,223,000 113,912 100%
Metro Park V
Rockville, Maryland MP Investments V, LLC 12/27/01 Office 38,027,000 224,725 97%
--------------- ---------------- ------------
$127,315,000 905,287 95%
=============== ================ ============
1
Item 7. Financial Statements and Exhibits
(a)(3) Financial Statements Specified by Rule 3.14 of Regulation S-X
-------------------------------------------------------------
Metro Park North
o Report of Independent Auditors
o Combined Statements of Certain Revenues and Certain Operating
Expenses for the six months ended September 30, 2001 (unaudited)
and for the year ended March 31, 2001
o Notes to Combined Statements of Certain Revenues and Certain
Operating Expenses
An audited statement is being presented for the most recent fiscal year
available instead of the three most recent years based on the following
factors: (i) Metro Park North was acquired from a single unaffiliated
party and (ii) based on the investigation of Metro Park North by the
Company, management is not aware of any material factors relating to
Metro Park North that would cause this financial information not to be
necessarily indicative of future operating results other than the
factors specifically considered by the Company as described below.
In the decision to acquire Metro Park North, the Company considered the
competition from other commercial property owners, the location, the
leases, the rental rates and the occupancy levels.
The Company has reviewed the expenses of Metro Park North, including
salaries of on-site personnel, utilities, property taxes, supplies,
insurance and repairs and maintenance. The Company expects that certain
operating expenses in the future will be consistent with those reported
the six months ended September 30, 2001 and for the year ended March
31, 2001.
(b) Pro Forma Consolidated Finanical Statements
-------------------------------------------
(c) Exhibits
--------
23. Consent of Independent Auditors
2
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.
PS BUSINESS PARKS, INC.
Date: January 16, 2002 By: /S/ JACK CORRIGAN
-----------------
Jack Corrigan
Vice President and Chief Financial Officer
3
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
of PS Business Parks, Inc.
We have audited the accompanying combined statement of certain revenues and
certain operating expenses of the operating properties that comprise Metro Park
North, described in Note 1 (the "Statement"), for the year ended March 31, 2001.
The Statement is the responsibility of Metro Park North's management. Our
responsibility is to express an opinion on the Statement based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the Statement is
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the Statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the Statement.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying Statement 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 Metro Park North's
revenues and expenses.
In our opinion, the Statement referred to above presents fairly, in all material
respects, the combined certain revenues and certain operating expenses described
in Note 1 of Metro Park North for the year ended March 31, 2001 in conformity
with accounting principles generally accepted in the United States of America.
PricewaterhouseCoopers LLP
San Francisco, California
January 4, 2002
4
METRO PARK NORTH
Combined Statements of Certain Revenus and Certain Operating Expenses
Six months ended Year ended
September 30, 2001 March 31, 2001
-------------------- -----------------
(Unaudited)
Certain rental revenues................ $ 8,121,000 $ 15,646,000
Certain operating expenses............. (2,868,000) (5,690,000)
-------------------- -----------------
Certain rental revenues in excess of
certain operating expenses......... $ 5,253,000 $ 9,956,000
==================== =================
See accompanying notes
5
METRO PARK NORTH
Notes to Combined Statements of Certain Revenues and Certain Operating Expenses
1. Background and Basis for Presentation
The accompanying combined statements of certain revenues and certain
operating expenses include the accounts of the operating properties
that comprise Metro Park North, located in Maryland and acquired by PS
Business Parks, Inc., through its consolidated partnership
(collectively referred to as the "Company") on December 27, 2001 for
approximately $127 million. The statements have been prepared in order
to comply with Rule 3-14 of Regulation S-X, "Special instructions for
real estate operations to be acquired" and are prepared on the accrual
basis of accounting.
The following table summarizes the properties acquired:
Name and Location Seller Property Type
--------------------------- ------------------------- ---------------
Metro Park I
Rockville, Maryland MP Investments I, LLC Flex/Office
Metro Park II
Rockville, Maryland MP Investments II, Flex/Office
LLC
Metro Park III
Rockville, Maryland MP Investments III, Office
LLC
Metro Park IV
Rockville, Maryland MP Investments IV, Office
LLC
Metro Park V
Rockville, Maryland MP Investments V, LLC Office
The combined statements of certain revenues and certain operating
expenses include only the accounts and activities of the operating
properties that comprise Metro Park North. Items that are not
comparable to the future operations of Metro Park North have been
excluded. Such items include depreciation, amortization, management
fees, interest expense, interest income, professional fees,
miscellaneous income and straight line rent adjustments.
2. Summary of Significant Accounting Policies
Revenue Recognition
Metro Park North leases space to tenants for which they charge minimum
rents and receive reimbursement for certain operating expenses. The
leases are accounted for as operating leases and are non-cancelable
with varying terms and expiration dates. Recoveries from tenants are
recognized as income in the period the applicable costs are accrued.
Certain Operating Expenses
Certain operating expenses include costs paid or incurred by the owners
for maintaining, operating and repairing the operating properties. This
includes utilities, repairs and maintenance and real estate taxes.
6
METRO PARK NORTH
Notes to Combined Statements of Certain Revenues and Certain Operating Expenses
Use of Estimates
The preparation of the statements of certain revenues and certain
operating expenses in conformity with accounting principles generally
accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the
statements of certain revenues and certain operating expenses and
accompanying notes. Actual results could differ from those estimates.
Interim Statements
The interim financial data for the six months ended September 30, 2001
is unaudited; however, in the opinion of the management of the Company,
the interim data includes all adjustments, consisting only of normal
recurring adjustments, necessary for a fair statement of the results
for the interim period. The results for the period presented are not
necessarily indicative of the results for the full year.
7
ITEM 7 (b) PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
The following unaudited pro forma consolidated financial statements were
prepared to reflect the acquisition of real estate facilities by PS Business
Parks, Inc., through its consolidated partnership (collectively referred to as
the "Company").
The Company acquired a business park consisting of 17 buildings known as "Metro
Park North" on December 27, 2001 at an aggregate purchase price of approximately
$127.3 million (including closing costs and deferred maintenance). The Company
is not affiliated with the sellers and the purchase price was established
through arm's length negotiations. The acquisition was funded with the Company's
existing cash balances, borrowings of $40 million from its unsecured line of
credit with Wells Fargo Bank and borrowings from an affiliate of $35 million.
The Company acquired 12 buildings known as the "Prosperity Business Campus" and
12 buildings (including 24 acres of developable land) known as the "Cornell Oaks
Corporate Center" on June 1, 2001 and November 20, 2001, respectively, at an
aggregate purchase price of approximately $175.9 million. The Company is not
affiliated with the sellers and the purchase price was established through arm's
length negotiations. The acquisitions were funded with the Company's existing
cash balances, proceeds from preferred offerings (see below) and borrowings of
$60 million from its unsecured line of credit with Wells Fargo Bank.
In addition to adjustments to reflect the recently acquired properties, pro
forma adjustments were made to reflect the following transactions:
1. On May 10, 2001 and June 18, 2001, the Company issued 1,840,000
and 800,000 depositary shares, respectively, each representing
1/1,000 of a share of the Company's 9 1/2% Cumulative Preferred
Stock, Series D at $25.00 per share. Net proceeds were
approximately $64.3 million and were used for investment in real
estate.
2. On September 21, 2001, the Company completed a private placement
of 2,120,000 preferred units with a preferred distribution rate of
9 1/4%. Net proceeds were approximately $51.6 million and were
used for investment in real estate.
8
The pro forma consolidated balance sheet at September 30, 2001 has been prepared
to reflect the subsequent acquisitions of commercial properties.
The pro forma consolidated statements of income for the nine months ended
September 30, 2001 and the year ended December 31, 2000 have been prepared
assuming (i) the aforementioned acquisitions of commercial properties and (ii)
the aforementioned public offerings of depositary shares representing fractional
interest in preferred stock and the private placement of preferred units, as if
all such transactions were consummated at the beginning of the periods
presented. The operations of all property acquisitions are based on historical
operating results.
As a result of the different existing fiscal year-ends of December 31 for the
Company and March 31 for Metro Park North, the unaudited pro forma condensed
combined statement of income for the year ended December 31, 2000 includes the
actual operations of the Company for the year ended December 31, 2000 and the
actual operations of Metro Park North for the year ended March 31, 2001. As
such, the operating results of Metro Park North for the three months ended March
31, 2001 are included in the unaudited pro forma condensed combined income
statements for the year ended December 31, 2000 and also for the nine months
ended September 30, 2001.
The pro forma adjustments are based upon available information and upon certain
assumptions as set forth in the notes to the pro forma consolidated financial
statements that the Company believes is reasonable in the circumstances. The pro
forma consolidated financial statements and accompanying notes should be read in
conjunction with the historical financial statements of the Company and other
documents filed with the Securities and Exchange Commission (such as Form 8-K's
which reference property acquisitions) from time to time. The following pro
forma consolidated financial statements do not purport to represent what the
Company's results of operations would actually have been if the transactions had
in fact occurred at the beginning of the dates indicated or to project the
Company's results of operations for any future date or period.
9
PS BUSINESS PARKS, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
September 30, 2001
(Unaudited)
(Amounts in thousands, except per share data)
Property
Acquisitions
Historical (Note 1) Pro Forma
ASSETS ------------------- ------------------- ---------------------
------
Cash and cash equivalents................................. $ 66,291 $ (66,291) $ -
Marketable securities..................................... 8,657 - 8,657
Real estate, net of accumulated depreciation.............. 941,998 214,815 1,156,813
Receivables and other assets.............................. 11,559 - 11,559
------------------- ------------------- ---------------------
Total assets......................................... $ 1,028,505 $ 148,524 $ 1,177,029
=================== =================== =====================
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Accrued and other liabilities............................. $ 35,202 $ - $ 35,202
Line of credit............................................ - 100,000 100,000
Mortgage notes payable.................................... 30,354 - 30,354
Notes payable to affiliate................................ - 48,524 48,524
Minority interests:
Preferred units........................................ 197,750 - 197,750
Common units........................................... 162,338 - 162,338
Shareholders' equity:
Preferred stock, $0.01 par value, 50,000,000 shares
authorized, 4,840 shares issued and outstanding at
September 30, 2001.................................. 121,000 - 121,000
Common stock, $0.01 par value, 100,000,000 shares
authorized, 21,704,067 shares issued and outstanding
at September 30, 2001............................... 217 - 217
Paid-in capital........................................ 426,546 - 426,546
Cumulative net income.................................. 162,134 - 162,134
Other comprehensive loss............................... (740) - (740)
Cumulative distributions............................... (106,296) - (106,296)
------------------- ------------------- ---------------------
Total shareholders' equity......................... 602,861 - 602,861
------------------- ------------------- ---------------------
Total liabilities and shareholders' equity............. $ 1,028,505 $ 148,524 $ 1,177,029
=================== =================== =====================
Book value per common share (Note 2)...................... $ 22.20 $ 22.20
=================== =================== =====================
Shares outstanding........................................ 21,704 21,704
=================== =================== =====================
See Accompanying Notes to Pro Forma Consolidated Balance Sheet.
10
PS BUSINESS PARKS, INC.
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
September 30, 2001
(Unaudited)
1. Property Acquisitions
---------------------
On November 20, 2001, the Company acquired 12 buildings known as the
Cornell Oaks Corporate Center from an unaffiliated third party at an
aggregate cost of approximately $87.5 million. On December 27, 2001,
the Company acquired 17 buildings known as Metro Park North from an
unaffiliated third party at an aggregate cost of approximately $127.3
million.
The following pro forma adjustments have been made to the pro forma
consolidated balance sheet to reflect the aforementioned transaction as
if these properties had been owned by the Company as of September 30,
2001.
o Pro forma adjustments have been made to cash and cash equivalents to
reflect:
o The acquisition cost of Cornell Oaks Corporate Center......................... $ (87,500,000)
o The acquisition cost of Metro Park North...................................... (127,315,000)
o Borrowings from the line of credit to fund the acquisition.................... 100,000,000
o Borrowings from an affiliate to fund the acquisition.......................... 48,524,000
------------------
$ (66,291,000)
==================
o A pro forma adjustment has been made to real estate facilities to reflect the
acquisition cost of the facilities acquired....................................... $ 214,815,000
==================
o A pro forma adjustment has been made to reflect borrowings from the line of
credit to fund the acquisition.................................................... $ 100,000,000
==================
o A pro forma adjustment has been made to reflect borrowings from an affiliate
to fund the acquisition........................................................... $ 48,524,000
==================
2. Book value per common share
---------------------------
Book value per common share has been determined by dividing total
common shareholders' equity by the outstanding common shares. The
following summarizes the common shares outstanding:
Common shares
outstanding
-------------------
o Historical shares outstanding at September 30, 2001........................... 21,704,000
See Accompanying Notes to Pro Forma Consolidated Statements of Income.
11
PS BUSINESS PARKS, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Nine Months Ended September 30, 2001
(Unaudited)
(Amounts in thousands, except per share data)
Property Other
Acquisitions Adjustments
Historical (Note 1) (Note 2) Pro Forma
---------------- ----------------- ---------------- ---------------
REVENUES:
Rental income............................ $ 121,964 $ 25,270 $ - $ 147,234
Facility management fees primarily from
affiliates............................. 499 - - 499
Business services........................ 308 - - 308
Interest income 1,659 - (1,280) 379
Dividend income.......................... 12 - - 12
---------------- ----------------- ---------------- ---------------
124,442 25,270 (1,280) 148,432
---------------- ----------------- ---------------- ---------------
EXPENSES:
Cost of operations....................... 32,852 7,805 - 40,657
Cost of facility management.............. 111 - - 111
Cost of business services................ 460 - - 460
Depreciation and amortization............ 30,058 4,765 - 34,823
General and administrative............... 3,157 - - 3,157
Interest expense......................... 932 - 3,461 4,393
---------------- ----------------- ---------------- ---------------
67,570 12,570 3,461 83,601
---------------- ----------------- ---------------- ---------------
Income (loss) before gain on real estate
investments and minority interest in income. 56,872 12,700 (4,741) 64,831
Gain on investment in Pacific Gulf
Properties, Inc.......................... 15 - - 15
---------------- ----------------- ---------------- ---------------
Income (loss) before minority interest in
income...................................... 56,887 12,700 (4,741) 64,846
Minority interest in income - preferred
units................................... (9,696) - (3,541) (13,237)
Minority interest in income - common
units (Note 4)........................... (10,047) (3,099) 2,632 (10,514)
---------------- ----------------- ---------------- ---------------
Net income (loss)........................... $ 37,144 $ 9,601 $ (5,650) $ 41,095
================ ================= ================ ===============
Net income (loss) allocation:
Allocable to preferred shareholders...... $ 6,014 $ - $ 2,504 $ 8,518
Allocable to common shareholders......... 31,130 9,601 (8,154) 32,577
---------------- ----------------- ---------------- ---------------
$ 37,144 $ 9,601 $ (5,650) $ 41,095
================ ================= ================ ===============
Net income per common share (Note 3):
Basic.................................. $ 1.38 $ 1.44
================ ===============
Diluted................................ $ 1.37 $ 1.44
================ ===============
Weighted average common shares outstanding
(Note 3):
Basic.................................. 22,610 22,610
================ ===============
Diluted................................ 22,685 22,685
================ ===============
See Accompanying Notes to Pro Forma Consolidated Statements of Income.
12
PS BUSINESS PARKS, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Nine Months Ended September 30, 2001
(Unaudited)
(Amounts in thousands, except per share data)
Property Other
Acquisitions Adjustments
Historical (Note 1) (Note 2) Pro Forma
---------------- ----------------- ---------------- ---------------
REVENUES:
Rental income............................ $ 144,171 $ 36,712 $ - $ 180,883
Facility management fees primarily from
affiliates............................. 581 - - 581
Business services........................ 505 - - 505
Interest income.......................... 4,076 - (2,520) 1,556
Dividend income.......................... 1,301 - - 1,301
---------------- ----------------- ---------------- ---------------
150,634 36,712 (2,520) 184,826
---------------- ----------------- ---------------- ---------------
EXPENSES:
Cost of operations....................... 39,290 11,285 - 50,575
Cost of facility management.............. 111 - - 111
Cost of business services................ 344 - - 344
Depreciation and amortization............ 35,637 7,358 - 42,995
General and administrative............... 3,954 - - 3,954
Interest expense......................... 1,481 - 4,615 6,096
---------------- ----------------- ---------------- ---------------
80,817 18,643 4,615 104,075
---------------- ----------------- ---------------- ---------------
Income (loss) before gain on real estate
investments and minority interest in income. 69,817 18,069 (7,135) 80,751
Gain on disposition of real estate....... 256 - - 256
Gain on investment in Pacific Gulf
Properties, Inc.......................... 7,849 - - 7,849
---------------- ----------------- ---------------- ---------------
Income (loss) before minority interest in
income...................................... 77,922 18,069 (7,135) 88,856
Minority interest in income - preferred
units.................................... (12,185) - (4,903) (17,088)
Minority interest in income - common
units (Note 4)........................... (14,556) (4,337) 4,394 (14,499)
---------------- ----------------- ---------------- ---------------
Net income (loss)........................... $ 51,181 $ 13,732 $ (7,644) $ 57,269
================ ================= ================ ===============
Net income allocation:
Allocable to preferred shareholders...... $ 5,088 $ - $ 6,270 $ 11,358
Allocable to common shareholders......... 46,093 13,732 (13,914) 45,911
---------------- ----------------- ---------------- ---------------
$ 51,181 $ 13,732 $ (7,644) $ 57,269
================ ================= ================ ===============
Net income per common share (Note 3):
Basic.................................. $ 1.98 $ 1.97
================ ===============
Diluted................................ $ 1.97 $ 1.96
================ ===============
Weighted average common shares outstanding
(Note 3):
Basic.................................. 23,284 23,284
================ ===============
Diluted................................ 23,365 23,365
================ ===============
See Accompanying Notes to Pro Forma Consolidated Statements of Income.
13
PS BUSINESS PARKS, INC.
NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
For the nine months ended September 30, 2001
and the year ended December 31, 2000
(Unaudited)
1. Property Acquisitions
---------------------
The following pro forma adjustments have been made to reflect the
operations of the newly acquired properties as if such properties had
been owned and operated by the Company throughout the entire periods
presented:
Nine months ended Year ended
September 30, 2001 December 31, 2000
---------------------- -------------------
(Amounts in thousands)
o Rental income has been adjusted to reflect:
o the pro forma rental income as if the acquired
properties were owned by the Company for the periods
presented:
Prosperity Business Campus........................... $ 9,731 $ 11,572
Cornell Oaks Corporate Center........................ 7,625 9,494
Metro Park North..................................... 12,287 15,646
o the rental income of these properties which are already
included in the Company's historical amounts............ (4,373) -
---------------------- -------------------
$ 25,270 $ 36,712
====================== ===================
o Cost of operations has been adjusted to reflect:
o the pro forma cost of operations as if the acquired
properties were owned by the Company for the periods
presented:
Prosperity Business Campus........................... $ 2,625 $ 3,254
Cornell Oaks Corporate Center........................ 1,758 2,341
Metro Park North..................................... 4,503 5,690
o the cost of operations of these properties which are
already included in the Company's historical amounts..... (1,081) -
---------------------- -------------------
$ 7,805 $ 11,285
====================== ===================
o A pro forma adjustment has been made to reflect the
incremental depreciation expense of the acquired properties
as if they were owned by the Company for the periods
presented.................................................... $ 4,765 $ 7,358
====================== ===================
o Minority interest in income allocable to common
unitholders has been adjusted based upon its pro rata
ownership interest in the pro forma adjustments above........ $ (3,099) $ (4,337)
====================== ===================
14
PS BUSINESS PARKS, INC.
NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
For the nine months ended September 30, 2001
and the year ended December 31, 2000
(Unaudited)
2. Other Pro Forma Adjustments
---------------------------
Nine months ended Year ended
September 30, 2001 December 31, 2000
---------------------- -------------------
(Amounts in thousands,
except per share data)
o Interest income has been adjusted to reduce the interest
earned on average cash balances that would not have existed
had the acquisitions been consummated at the beginning of
the periods presented....................................... $ 1,280 $ 2,520
====================== ===================
o Interest expense has been adjusted to reflect the interest
expense associated with the line of credit and note payable
to affiliate as if the borrowings had been completed at the
beginning of the periods presented.......................... $ 3,461 $ 4,615
====================== ===================
o Minority interest in income - preferred has been adjusted to
reflect the incremental preferred distributions as if the
preferred unit offering had been completed at the beginning
of the periods presented.................................... $ (3,541) $ (4,903)
====================== ===================
o Net income allocable to preferred shareholders has been
adjusted to reflect the incremental preferred dividends as
if the preferred stock offering had been completed at the
beginning of the periods presented.......................... $ 2,504 $ 6,270
====================== ===================
o Minority interest in income allocable to common unitholders
has been adjusted based upon its pro rata ownership interest
in the above pro forma adjustments........................... $ 2,632 $ 4,394
====================== ===================
15
PS BUSINESS PARKS, INC.
NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
For the nine months ended September 30, 2001
and the year ended December 31, 2000
(Unaudited)
3. Net income per common share has been computed as follows:
---------------------------------------------------------
Nine months ended Year ended
September 30, 2001 December 31, 2000
---------------------- -------------------
(Amounts in thousands,
except per share data)
Historical net income allocable to common shareholders........... $ 31,130 $ 46,093
====================== ===================
Historical weighted average common shares - basic................ 22,610 23,284
Dilutive effect of stock options............................ 75 81
---------------------- -------------------
Historical weighted average common shares - diluted.............. 22,685 23,365
====================== ===================
Historical net income per common share - basic................... $ 1.38 $ 1.98
Historical net income per common share - diluted................. $ 1.37 $ 1.97
---------------------------------------------------------------------------------------------------------------------
Pro forma net income allocable to common shareholders............ $ 32,577 $ 45,911
====================== ===================
Pro forma weighted average common shares - basic................. 22,610 23,284
Dilutive effect of stock options............................ 75 81
---------------------- -------------------
Pro forma weighted average common shares - diluted............... 22,685 23,365
====================== ===================
Pro forma net income per common share - basic.................... $ 1.44 $ 1.97
Pro forma net income per common share - diluted.................. $ 1.44 $ 1.96
16
PS BUSINESS PARKS, INC.
NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
For the nine months ended September 30, 2001
and the year ended December 31, 2000
(Unaudited)
4. Minority Interest
-----------------
Minority interest represents ownership interests of common OP units in
the consolidated Operating Partnership which are not owned by the
Company. The common OP units, subject to certain conditions of the
Operating Partnership Agreement, are convertible into common shares of
the Company on a one-for-one basis. The following table summarizes the
ownership interests:
Nine months ended Year ended
September 30, 2001 December 31, 2000
---------------------- ---------------------
(Amounts in thousands,
except per share data)
Pro forma weighted average common shares outstanding.............. 22,610 23,284
Pro forma weighted average common OP units owned by minority
interests....................................................... 7,307 7,363
---------------------- ---------------------
Pro forma weighted average common shares outstanding assuming
conversion of common OP units..................................... 29,917 30,647
====================== =====================
Percentage owned by common shareholders........................... 75.6% 76.0%
Percentage owned by common unitholders............................ 24.4% 24.0%
---------------------- ---------------------
Total ownership interest..................................... 100.0% 100.0%
====================== =====================
17