UNITED STATES

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):  October 31, 2012

(Exact Name of Registrant as Specified in its Charter)

(Address of Principal Executive Offices, including zip code)

(Registrant's telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

0	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

0	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

0	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

0	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Explanatory Note

On December 31, 2012, Parkway 550 South Caldwell, LLC (the "Buyer"), an affiliate of Parkway Properties, Inc. (the "Company" or "Parkway"), completed the acquisition of NASCAR Plaza, a 390,000 square foot office tower located in the central business district of Charlotte, North Carolina for $99.9 million.  In connection with the acquisition, the Company assumed the existing first mortgage secured by the property with a stated value of $42.6 million, a fixed interest rate of 4.7% and a maturity date of March 30, 2016.

On November 1, 2012, the Company filed a Current Report on Form 8-K (the "Initial Report") with regard to the execution of the purchase and sale agreement for the acquisition of the NASCAR Plaza.

This amendment is being filed for the sole purpose of filing the financial statements prepared pursuant to Rule 3-14 of Regulation S-X and pro forma financial information required by Item 9.01 of Form 8-K, and should be read in conjunction with the Initial Report.

After reasonable inquiry, the Company is not aware of any other material factors relating to this property that would cause the reported financial information not to be necessarily indicative of future operating results.

The Company and its operations are, however, subject to a number of risks and uncertainties.  For a discussion of such risks, see the risks identified in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and Form 10-Q for the quarter ended September, 30, 2012 under Item 1A Risk Factors and in the other reports filed by the Company with the Securities and Exchange Commission.

Item 9.01  Financial Statements and Exhibits.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this amended report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  February 6, 2013

  PARKWAY PROPERTIES, INC.

 

                                                                           Jeremy R. Dorsett

                                                                           Executive Vice President and

                                                                           General Counsel

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Independent Auditors' Report

The Board of Directors

Parkway Properties, Inc.:

We have audited the accompanying statement of revenues and certain expenses of NASCAR Plaza (the Property) for the year ended December 31, 2011.  This statement of revenues and certain expenses is the responsibility of the Property's management.  Our responsibility is to express an opinion on this financial 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 of revenues and certain expenses is free of material misstatement.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement.  We believe that our audit provides a reasonable basis for our opinion.

The accompanying statement of revenues and certain expenses of the Property was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, as described in Note 2, for inclusion in a Form 8-K/A of Parkway Properties, Inc. and is not intended to be a complete presentation of the Property's revenues and expenses.

In our opinion, the statement of revenues and certain expenses referred to above presents fairly, in all material respects, the revenues and certain expenses described in Note 2 of the Property for the year ended December 31, 2011 in conformity with U.S. generally accepted accounting principles.

  /s/ Ernst & Young LLP

Houston, Texas

February 6, 2013

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NASCAR Plaza


Statements of Revenues
and Certain Expenses

(in thousands)

		Nine Months Ended September 30, 2012				Year Ended December 31, 2011
Revenues:		(unaudited)
Rental property revenue		$	4,474			$	5,760
Other income			44				53
			4,518				5,813
Certain expenses:
Operating expenses			918				1,037
Real estate taxes			581				789
Personnel			222				298
Utilities			301				334
Interest expense			1,099				1,466
			3,121				3,924
Excess of revenues over certain expenses		$	1,397				1,889

See accompanying notes to statements of revenues and certain expenses.

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NASCAR Plaza
Notes to Statements of Revenues
and Certain Expenses

1.    Organization and Significant Accounting Policies

Description of Property

On December 31, 2012, Parkway 550 South Caldwell, LLC (the "Buyer"), an affiliate of Parkway Properties, Inc. (the "Company" or "Parkway"), completed the acquisition of NASCAR Plaza, a 390,000 square foot (unaudited) office tower located in the central business district of Charlotte, North Carolina for $99.9 million.  In connection with the acquisition, the Company assumed the existing first mortgage secured by the property with a stated value of $42.6 million, with a fixed interest rate of 4.7% and a maturity date of March 30, 2016.

Management's Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and certain expenses during the reporting period.  Actual results could differ from those estimates.

Rental Revenue

Minimum rents from leases are recognized as revenue ratably over the term of each lease using the straight-line method.  Tenant reimbursements are recognized as revenue as the applicable services are rendered or expenses incurred.

The future minimum rents for the Property's non-cancelable operating leases at December 31, 2011 are as follows (in thousands):

 

Year		Amount
2012		$	4,541
2013			8,395
2014			8,944
2015			8,687
2016			8,694
Thereafter			54,681
		$	93,942

 

 

 

 

 

 

 

 

The above amounts do not include tenant reimbursements for utilities, taxes, insurance and common area maintenance.

During the year ended December 31, 2011, two tenants accounted for approximately 77.9% of the Property's rental property revenue.  No other tenant accounted for more than 10% of rental property revenue in 2011.

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2.     Basis of Accounting

The accompanying statement of revenues and certain expenses is presented on the accrual basis.  The statement has been prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for real estate properties acquired.  Accordingly, the statement excludes certain expenses not comparable to the future operations of the Property such as depreciation and amortization, management fees, income taxes and payroll and other costs not directly related to the proposed future operations of the Property.  Management is not aware of any material factors relating to the Property that would cause the reported financial information not to be necessarily indicative of future operating results.

The accompanying unaudited interim statement of revenues and certain expenses was prepared on the same basis as the statement of revenues and certain expenses for the year ended December 31, 2011.  In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of the information for this interim period have been made.  The excess of revenues over certain expenses for such interim period is not necessarily indicative of the excess of revenue over certain expenses for the full year.

3.     Mortgage Note Payable

In connection with the acquisition, the Company assumed the existing first mortgage secured by the property with a stated value of $42.6 million, with a fixed interest rate of 4.7% and a maturity date of March 30, 2016.  As the Company assumed the existing mortgage secured by the property, interest expense associated with the existing mortgage is presented within certain expenses at an effective rate of 3.4% as it is comparable to the future operations of the Property.

4.     Subsequent Events

The acquisition of the Property was completed on December 31, 2012.  Management has evaluated subsequent events related to the Property for recognition of disclosure through February 6, 2013, which is the date the statement of revenues and certain expenses was available to be issued and determined that there are no other items to disclose.

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PARKWAY PROPERTIES, INC.

Pro Forma Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

       The following pro forma consolidated balance sheet (unaudited) as of September 30, 2012 and pro forma consolidated statements of operations and comprehensive income (unaudited) of the Company for the year ended December 31, 2011 and nine months ended September 30, 2012 give effect to the purchase of NASCAR Plaza for the periods stated.  The pro forma consolidated financial statements have been prepared by management of Parkway based upon the historical financial statements of Parkway and the adjustments and assumptions in the accompanying notes to the pro forma consolidated financial statements.

       The pro forma consolidated balance sheet sets forth the effect of NASCAR Plaza as if the purchase had been consummated on September 30, 2012.

       The pro forma consolidated statements of operations and comprehensive income set forth the effect of NASCAR Plaza as if the purchase had been consummated on January 1, 2011.

       These pro forma consolidated financial statements may not be indicative of the results that actually would have occurred if the transaction had occurred on the dates indicated or which may be obtained in the future.  The pro forma consolidated financial statements should be read in conjunction with the consolidated financial statements and notes of Parkway included in its annual report on Form 10-K for the year ended December 31, 2011.

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PARKWAY PROPERTIES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2012

(Unaudited)

		Parkway Historical				Pro Forma Adjustments (1)				Parkway Pro Forma
Assets						(In thousands)
Real estate related investments:
Office and parking properties		$	1,442,759			$	87,325			$	1,530,084
Accumulated depreciation			(190,154	)			-				(190,154	)
			1,252,605				87,325				1,339,930
Land available for sale			250				-				250
			1,252,855				87,325				1,340,180
Rents receivable and other assets			109,874				3,491				113,365
Intangible assets, net			114,018				13,508				127,526
Assets held for sale			7,031				-				7,031
Management contracts, net			47,010				-				47,010
Cash and cash equivalents$			53,556				-				53,556
Total assets		$	1,584,344			$	104,324			$	1,688,668
Liabilities
Notes payable to banks		$	125,000			$	56,600			$	181,600
Mortgage notes payable			549,429				42,977				592,406
Accounts payable and other liabilities			79,868				4,747				84,615
Liabilities related to assets held for sale			361				-				361
Total liabilities			754,658				104,324				858,982
Stockholders' Equity
8.00% Series D Preferred stock, $.001 par value, 5,421,296   shares authorized, issued and outstanding			128,942				-				128,942
Common stock, $.001 par value, 98,578,704 shares authorized, 41,191,461 shares issued and outstanding			41				-				41
Common stock held in trust, at cost, 9,964 shares			(186	)			-				(186	)
Additional paid-in capital			719,031				-				719,031
Accumulated other comprehensive loss			(4,711	)			-				(4,711	)
Accumulated deficit			(278,923	)			-				(278,923	)
Total Parkway Properties, Inc. stockholders' equity			564,194				-				564,194
Noncontrolling interests			265,492				-				265,492
Total equity			829,686				-				829,686
Total liabilities and equity		$	1,584,344			$	104,324			$	1,688,668

 

See accompanying notes.

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PARKWAY PROPERTIES, INC.

PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2011

(Unaudited)

See accompanying notes.

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PARKWAY PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(Unaudited)

See accompanying notes.

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PARKWAY PROPERTIES, INC.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)

The pro forma adjustments to the Consolidated Balance Sheet as of September 30, 2012 set forth the effects of Parkway's purchase of NASCAR Plaza as if the purchase had been consummated on September 30, 2012.

The pro forma effect of the allocation of purchase price to assets acquired and liabilities assumed with the purchase of NASCAR Plaza is as follows (in thousands):

 

		Pro Forma Adjustments
Real estate investments:
Building		$	76,771
Site improvements			20
Tenant improvements			10,534
Total real estate investments acquired			87,325
Lease costs			3,329
Intangible assets:
Above-market leases			7,558
Lease in place value			5,950
Total assets acquired		$	104,162
Liabilities assumed:
Below market leases		$	2,663
Fair value of interest rate swap			1,787
Mortgage notes payable			42,977
Total liabilities assumed			47,427
Pro forma effect of net assets acquired		$	56,735

          

 

The pro forma effect of additional amounts paid by Parkway or received from the seller in connection with the purchase and related financing of these office properties are as follows (in thousands):

 

		Pro Forma Adjustments
Rents receivable and other assets:
Escrows and other deposits		$	138
Capitalized loan costs, net			24
		$	162
Accounts payable and other liabilities:
Prepaid rent		$	258
Security deposits payable			39
		$	297

See note 2(c) for discussion of notes payable to banks and mortgage notes payable.

The pro forma adjustments are detailed below for the year ended December 31, 2011 and nine months ended September 30, 2012.

          The effect of the purchase of NASCAR Plaza on income and expenses from real estate properties is as follows:

(a)   For the year ended December 31, 2011 (in thousands):

 

		Pro Forma Adjustments
Rental property revenue		$	5,760
Other income			53
Above market lease value amortization			(608	)
Income from office and parking properties			5,205
Property operating expenses			2,458
Depreciation and amortization			4,338
Total expenses			6,796
Operating loss			(1,591	)
Interest expense			(3,751	)
Loss from continuing operations			(5,342	)
Net loss attributable to noncontrolling interests			-
Loss from continuing operations attributable to common stockholders		$	(5,342	)

F-9

(b)   For the nine months ended September 30, 2012 (in thousands):

 

		Pro Forma Adjustments
Rental property revenue		$	4,474
Other income			44
Above market lease value amortization			(456	)
Income from office and parking properties			4,062
Property operating expenses			2,022
Depreciation and amortization			3,254
Total expenses			5,276
Operating loss			(1,214	)
Interest expense			(2,159	)
Loss from continuing operations			(3,373	)
Net loss attributable to noncontrolling interests			-
Loss from continuing operations attributable to common stockholders		$	(3,373	)

(c)   The pro forma effect of the NASCAR Plaza acquisition on interest expense related to additional borrowings on the Company's notes payable to banks ($56.6 million at September 30, 2012 with an effective interest rate of 4.0% for the year ended December 31, 2011 and 2.5% for the nine months ended September 30, 2012) was $2.3 million for the year ended December 31, 2011 and $­1.1 million for the nine months ended September 30, 2012.  The pro forma effect on interest expense related to mortgage notes payable ($43.0 million at September 30, 2012 with an effective interest rate of 3.4%) was $1.5 million for the year ended December 31, 2011 and $1.1 million for the nine months ended September 30, 2012.

2.       No additional income tax expenses were provided because of the Company's net operating loss carryover and status as a REIT.