| ** **

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, DC 20549**

** **

_____________________________________________

** **

** **

**FORM 10-Q**

 

**                    T                            Quarterly Report Pursuant  to Section 13 or 15(d)**

**of the Securities Exchange Act of 1934  For Quarterly Period Ended June 30, 2008  or**

**                     £                            Transition  Report Pursuant to Section 13 or 15(d)**

**of the Securities Exchange Act of 1934  For the Transition Period from ________ to ________  Commission File Number 1-11533****Parkway Properties, Inc.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (Exact name of registrant as specified in its  charter)

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **Maryland**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | ** ** | **74-2123597** |
| (State or other jurisdiction of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | (IRS Employer Identification No.) |
| incorporation or organization)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
| **One Jackson Place Suite 1000    188 East Capitol Street    P. O. Box 24647    Jackson, Mississippi 39225-4647**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (Address of principal executive offices) (Zip Code)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Registrant’s telephone number, including area code                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **(601) 948-4091** |
| Registrant's web site **www.pky.com**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (Former name, former address and former fiscal year,  if changed since last report)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|         Indicate by check mark whether the registrant (1) has filed all reports  required to be filed by Section 13 or 15(d) of the Securities Exchange Act of  1934 during the preceding 12 months (or for such shorter period that the  registrant was required to file such reports), and (2) has been subject to  such filing requirements for the past 90 days.

Yes   **T**   No  **£**

 

        Indicate  by check mark whether the registrant is a large accelerated filer, an  accelerated filer, a non-accelerated filer or a smaller reporting company.  See  the definitions of “large accelerated filer,” “accelerated filer” and  “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

                                        Large  accelerated filer     **T**                                      Accelerated  filer                    **£**

 

                                        Non-accelerated  filer       **£**                                      Smaller  reporting company  **£**

 

        Indicate  by check mark whether the registrant is a shell company (as defined in Rule  12b-2 of the Exchange Act).  Yes  **£**  No  **T**

        15,290,003 shares of Common Stock, $.001 par value, were outstanding as  of August 1, 2008. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |  |  |

| Page  1 of 39 |
|---------------|

 

----

 

 

 

 

 

**PARKWAY PROPERTIES, INC. FORM 10-QTABLE OF CONTENTSFOR THE QUARTER ENDED JUNE 30, 2008**

**Part I. Financial Information**

| Item  1.                       | Financial  Statements                                                                       | **Page** |
|--------------------------------|---------------------------------------------------------------------------------------------|----------|
|                           |                                                                                        |     |
|                           | Consolidated  Balance Sheets, June 30, 2008 and December 31, 2007                           | 3        |
|                           |                                                                                        |     |
|                           | Consolidated  Statements of Income for the Three Months and Six Months Ended                |     |
|                           |        June  30, 2008 and 2007                           | 4        |
|                           |                                                                                        |     |
|                           | Consolidated  Statements of Stockholders’ Equity for the Six Months Ended              |     |
|                           |        June  30, 2008 and 2007                           | 6        |
|                           |                                                                                        |     |
|                           | Consolidated  Statements of Cash Flows for the Six Months Ended                             |     |
|                           |        June  30, 2008 and 2007                           | 7        |
|                           |                                                                                        |     |
|                           | Notes  to Consolidated Financial Statements                                                 | 8        |
|                           |                                                                                        |     |
| Item  2.                       | Management’s  Discussion and Analysis of Financial Condition and Results of Operations | 23       |
|                           |                                                                                        |     |
| Item  3.                  | Quantitative  and Qualitative Disclosures About Market Risk                                 | 37       |
|                           |                                                                                        |     |
| Item  4.                       | Controls  and Procedures                                                                    | 37       |
|                           |                                                                                        |     |
|                           |                                                                                        |     |
| **Part II. Other Information** |
| Item  1A.                      | Risk  Factors                                                                               | 38       |
|                           |                                                                                        |     |
| Item  2.                       | Unregistered  Sales of Equity Securities and Use of Proceeds                                | 38       |
|                           |                                                                                        |     |
| Item  4.                       | Submission  of Matters to a Vote of Security Holders                                        | 38       |
|                           |                                                                                        |     |
| Item  6.                  | Exhibits                                                                                    | 39       |
|                           |                                                                                        |     |
|                           |                                                                                        |     |
| **Signatures**                 |
|                           |                                                                                        |     |
| Authorized  Signatures         | 39                                                                                          |

 

  

| Page  2 of 39 |
|---------------|

 

----

 

 

 

| **PARKWAY PROPERTIES, INC.**                                                                        |
|-----------------------------------------------------------------------------------------------------|
| **CONSOLIDATED BALANCE SHEETS**                                                                     |
| (In thousands, except share data)                                                                   |
| ** **                                                                                          | ** ** |   | ** ** |
|                                                                                                |   |   |   |
|                                                                                                | **June 30** |   | **December 31** |
|                                                                                                | **2008** |   | **2007** |
|                                                                                                | (Unaudited) |   |   |
| **Assets**                                                                                          |   |   |   |
| Real estate related  investments:                                                                   |   |   |   |
|         Office and parking  properties                           |  $ | 1,753,108  |   |  $ | 1,551,707  |
|         Office property  held for sale                           | 10,203  |   | -  |
|         Office property  development                             | 29,217  |   | 14,686  |
|         Accumulated  depreciation                                | (277,969) |   | (251,791) |
|                                                                                                | 1,514,559  |   | 1,314,602  |
|                                                                                                |   |   |   |
|         Land available for  sale                                 | 1,467  |   | 1,467  |
|         Mortgage loan                                            | 7,250  |   | 7,001  |
|         Investment in  unconsolidated joint ventures             | 11,091  |   | 11,236  |
|                                                                                                | 1,534,367  |   | 1,334,306  |
|                                                                                                |   |   |   |
| Rents receivable and other  assets                                                                  | 112,661  |   | 119,457  |
| Intangible assets, net                                                                              | 91,457  |   | 70,719  |
| Cash and cash equivalents                                                                           | 14,187  |   | 11,312  |
| ** **                                                                                          |  $ | 1,752,672  |   |  $ | 1,535,794  |
| **Liabilities**                                                                                     |   |   |   |
| Notes payable to banks                                                                              |  $ | 238,861  |   |  $ | 212,349  |
| Mortgage notes payable                                                                              | 875,743  |   | 714,501  |
| Accounts payable and other  liabilities                                                             | 86,336  |   | 88,496  |
|                                                                                                | 1,200,940  |   | 1,015,346  |
| **Minority Interest**                                                                               |   |   |   |
| Minority Interest – unit  holders                                                              | 33  |   | 34  |
| Minority Interest – real  estate partnerships                                                  | 135,243  |   | 80,506  |
|                                                                                                | 135,276  |   | 80,540  |
| **Stockholders' Equity**                                                                            |   |   |   |
| 8.00% Series D Preferred  stock, $.001 par value,                                                   |   |   |   |
|         2,400,000 shares  authorized, issued and outstanding     | 57,976  |   | 57,976  |
| Common stock, $.001 par  value, 67,600,000 shares authorized,                                       |   |   |   |
|         15,290,003 and 15,223,350  shares issued and outstanding |   |   |   |
|         in 2008 and 2007,  respectively                          | 15  |   | 15  |
| Common stock held in trust,  at cost, 85,800 and 104,500                                            |   |   |   |
|         shares in 2008 and  2007, respectively                   | (2,914) |   | (3,540) |
| Additional paid-in capital                                                                          | 427,058  |   | 425,221  |
| Accumulated other  comprehensive income (loss)                                                      | 471  |   | (358) |
| Accumulated deficit                                                                                 | (66,150) |   | (39,406) |
| ** **                                                                                          | 416,456  |   | 439,908  |
| ** **                                                                                          |  $ | 1,752,672  |   |  $ | 1,535,794  |

 

 

  

 

See notes to consolidated financial statements.

 

| Page  3 of 39 |
|---------------|

 

----

 

| **PARKWAY PROPERTIES, INC.**                                                         |
|--------------------------------------------------------------------------------------|
| **CONSOLIDATED STATEMENTS OF INCOME**                                                |
| (In thousands, except per share data)                                                |
|                                                                                 |
| ** **                                                                           | **Three Months Ended** |
| ** **                                                                           | **June 30** |
| ** **                                                                           | **2008** |   | **2007** |
| ** **                                                                           | (Unaudited) |
| **Revenues**                                                                         |   |   |   |
| Income from office and  parking properties                                           |  $ | 68,684  |   |  $ | 60,523  |
| Management company income                                                            | 410  |   | 431  |
|         Total revenues                            | 69,094  |   | 60,954  |
| ** **                                                                           |   |   |   |
| **Expenses**                                                                         |   |   |   |
| Property operating expense                                                           | 32,683  |   | 28,573  |
| Depreciation and  amortization                                                       | 23,269  |   | 19,022  |
| Management company expenses                                                          | 432  |   | 276  |
| General and administrative                                                           | 2,092  |   | 1,601  |
|         Total expenses                            | 58,476  |   | 49,472  |
|                                                                                 |   |   |   |
| **Operating income**                                                                 | 10,618  |   | 11,482  |
| ** **                                                                           |   |   |   |
| **Other income and expenses**                                                        |   |   |   |
| Interest and other income                                                            | 306  |   | 72  |
| Equity in earnings of  unconsolidated joint ventures                                 | 289  |   | 243  |
| Gain on sale of real estate                                                          | -  |   | 20,260  |
| Interest expense                                                                     | (15,352) |   | (14,052) |
| ** **                                                                           |   |   |   |
| **Income (loss) before  minority interest and discontinued operations**              | (4,139) |   | 18,005  |
| Minority interest - real  estate partnerships                                        | 2,063  |   | 1,016  |
| ** **                                                                           |   |   |   |
| **Income (loss) from  continuing operations**                                        | (2,076) |   | 19,021  |
| ** **                                                                           |   |   |   |
| **Discontinued operations**:                                                         |   |   |   |
| Income from discontinued  operations                                                 | 140  |   | 219  |
| **Net income (loss)**                                                                | (1,936) |   | 19,240  |
| Change in market value of  interest rate swaps                                       | 1,936  |   | 197  |
| Change in unrealized loss on  equity securities                                      | -  |   | (3) |
| **Comprehensive income**                                                             |  $ | -  |   |  $ | 19,434  |
|                                                                                 |   |   |   |
| **Net income (loss)  available to common stockholders:**                             |   |   |   |
| Net income (loss)                                                                    |  $ | (1,936) |   |  $ | 19,240  |
| Dividends on preferred stock                                                         | (1,200) |   | (1,200) |
| **Net income (loss)  available to common stockholders**                              |  $ | (3,136) |   |  $ | 18,040  |
| ** **                                                                           |   |   |   |   |   |
| **Net income (loss) per  common share:**                                             |   |   |   |   |   |
| Basic:                                                                               |   |   |   |   |   |
|         Income (loss) from  continuing operations |  $ | (0.22) |   |  $ | 1.14  |
|         Discontinued  operations                  |   | 0.01  |   |   | 0.01  |
|         Net income (loss)                         |  $ | (0.21) |   |  $ | 1.15  |
| ** **                                                                           |   |   |   |   |   |
| Diluted:                                                                             |   |   |   |   |   |
|         Income (loss) from  continuing operations |  $ | (0.22) |   |  $ | 1.13  |
|         Discontinued  operations                  |   | 0.01  |   |   | 0.01  |
|         Net income (loss)                         |  $ | (0.21) |   |  $ | 1.14  |
| ** **                                                                           |   |   |   |   |   |
| **Dividends per common  share**                                                      |  $ | 0.65  |   |  $ | 0.65  |
| ** **                                                                           |   |   |   |   |   |
| **Weighted average shares  outstanding:**                                            |   |   |   |   |   |
| Basic                                                                                |   | 15,024  |   |   | 15,672  |
| Diluted                                                                              |   | 15,024  |   |   | 15,847  |

 

 

  

 

See notes to consolidated financial statements.

 

| Page  4 of 39 |
|---------------|

 

----

 

 

 

| **PARKWAY PROPERTIES, INC.**                                                         |
|--------------------------------------------------------------------------------------|
| **CONSOLIDATED STATEMENTS OF INCOME**                                                |
| (In thousands, except per share data)                                                |
|                                                                                 |
| ** **                                                                           | **Six Months Ended** |
| ** **                                                                           | **June 30** |
| ** **                                                                           | **2008** |   | **2007** |
| ** **                                                                           | (Unaudited) |
| **Revenues**                                                                         |   |   |   |
| Income from office and  parking properties                                           |  $ | 134,136  |   |  $ | 121,500  |
| Management company income                                                            | 907  |   | 764  |
|         Total revenues                            | 135,043  |   | 122,264  |
| ** **                                                                           |   |   |   |
| **Expenses**                                                                         |   |   |   |
| Property operating expense                                                           | 64,108  |   | 56,482  |
| Depreciation and  amortization                                                       | 45,262  |   | 38,079  |
| Management company expenses                                                          | 921  |   | 544  |
| General and administrative                                                           | 4,388  |   | 3,247  |
|         Total expenses                            | 114,679  |   | 98,352  |
|                                                                                 |   |   |   |
| **Operating income**                                                                 | 20,364  |   | 23,912  |
| ** **                                                                           |   |   |   |
| **Other income and expenses**                                                        |   |   |   |
| Interest and other income                                                            | 674  |   | 218  |
| Equity in earnings of  unconsolidated joint ventures                                 | 547  |   | 548  |
| Gain on sale of real estate                                                          | -  |   | 20,310  |
| Interest expense                                                                     | (30,873) |   | (27,136) |
| ** **                                                                           |   |   |   |
| **Income (loss) before  minority interest and discontinued operations**              | (9,288) |   | 17,852  |
| Minority interest - real  estate partnerships                                        | 4,550  |   | 1,487  |
| ** **                                                                           |   |   |   |
| **Income (loss) from  continuing operations**                                        | (4,738) |   | 19,339  |
| ** **                                                                           |   |   |   |
| **Discontinued operations**:                                                         |   |   |   |
| Income from discontinued  operations                                                 | 207  |   | 329  |
| **Net income (loss)**                                                                | (4,531) |   | 19,668  |
| Change in market value of  interest rate swaps                                       | 829  |   | (37) |
| Change in unrealized loss on  equity securities                                      | -  |   | (7) |
| **Comprehensive income  (loss)**                                                     |  $ | (3,702) |   |  $ | 19,624  |
|                                                                                 |   |   |   |
| **Net income (loss)  available to common stockholders:**                             |   |   |   |
| Net income (loss)                                                                    |  $ | (4,531) |   |  $ | 19,668  |
| Dividends on preferred stock                                                         | (2,400) |   | (2,400) |
| **Net income (loss)  available to common stockholders**                              |  $ | (6,931) |   |  $ | 17,268  |
| ** **                                                                           |   |   |   |   |   |
| **Net income (loss) per  common share:**                                             |   |   |   |   |   |
| Basic:                                                                               |   |   |   |   |   |
|         Income (loss) from  continuing operations |  $ | (0.47) |   |  $ | 1.08  |
|         Discontinued  operations                  |   | 0.01  |   |   | 0.02  |
|         Net income (loss)                         |  $ | (0.46) |   |  $ | 1.10  |
| ** **                                                                           |   |   |   |   |   |
| Diluted:                                                                             |   |   |   |   |   |
|         Income (loss) from  continuing operations |  $ | (0.47) |   |  $ | 1.07  |
|         Discontinued  operations                  |   | 0.01  |   |   | 0.02  |
|         Net income (loss)                         |  $ | (0.46) |   |  $ | 1.09  |
| ** **                                                                           |   |   |   |   |   |
| **Dividends per common  share**                                                      |  $ | 1.30  |   |  $ | 1.30  |
| ** **                                                                           |   |   |   |   |   |
| **Weighted average shares  outstanding:**                                            |   |   |   |   |   |
| Basic                                                                                |   | 15,013  |   |   | 15,644  |
| Diluted                                                                              |   | 15,013  |   |   | 15,831  |

 

 

See notes to consolidated financial statements.

 

| Page  5 of 39 |
|---------------|

 

----

 

 

 

| ** PARKWAY PROPERTIES, INC.**                                                                                                             |
|------------------------------------------------------------------------------------------------------------------------------------------------|
| **CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY**                                                                                            |
| (In thousands)                                                                                                                                 |
|                                                                                                                                           | ** ** |
|                                                                                                                                           | **Six Months Ended** |
|                                                                                                                                           | **June 30** |
|                                                                                                                                           | **2008** |   | **2007** |
|                                                                                                                                           | (Unaudited) |
|                                                                                                                                           | ** ** |   | ** ** |
| **8.00% Series D Preferred  stock, $.001 par value**                                                                                           |   |   |   |
|         Balance at beginning  of period                                                                     |  $ | 57,976  |   |  $ | 57,976  |
|         Balance at end of  period                                                                           | 57,976  |   | 57,976  |
| ** **                                                                                                                                     |   |   |   |
| **Common stock, $.001 par  value**                                                                                                             |   |   |   |
|         Balance at beginning  of period                                                                     | 15  |                 | 16  |
|         Balance at end of  period                                                                           | 15  |   | 16  |
| ** **                                                                                                                                     |   |   |   |
| **Common stock held in  trust**                                                                                                                |   |   |   |
|         Balance at beginning  of period                                                                     | (3,540) |   | (3,894) |
|                 Shares  distributed from deferred compensation plan | 626  |   | 354  |
|         Balance at end of  period                                                                           | (2,914) |   | (3,540) |
| ** **                                                                                                                                     |   |   |   |
| **Additional paid-in  capital**                                                                                                                |   |   |   |
|         Balance at beginning  of period                                                                     | 425,221  |   | 449,141  |
|                 Stock options exercised                             | 779  |   | 2,788  |
|                 Shares  issued in lieu of Directors’ fees      | 140  |   | 251  |
|                 Shares  issued – DRIP plan                     | -  |   | 363  |
|                 Issuance  costs – stock offering               | -  |   | (30) |
|                 Employee  Stock Purchase Plan                       | -  |   | 36  |
|                 Share based  compensation expense                   | 918  |   | 727  |
|         Balance  at end of period                                                                           | 427,058  |   | 453,276  |
| ** **                                                                                                                                     |   |   |   |
| **Accumulated other  comprehensive income (loss)**                                                                                             |   |   |   |
|         Balance at beginning  of period                                                                     | (358) |   | 828  |
|                 Change in  unrealized loss on equity securities     | -  |   | (7) |
|                 Change in  market value of interest rate swaps      | 829  |   | (37) |
|         Balance at end of  period                                                                           | 471  |   | 784  |
| ** **                                                                                                                                     |   |   |   |
| **Accumulated deficit**                                                                                                                        |   |   |   |
|         Balance at beginning  of period                                                                     | (39,406) |   | (13,761) |
|                 Net income  (loss)                                  | (4,531) |   | 19,668  |
|                 Preferred  stock dividends declared                 | (2,400) |   | (2,400) |
|                 Common stock  dividends declared                    | (19,813) |   | (20,616) |
|         Balance at end of  period                                                                           | (66,150) |   | (17,109) |
| ** **                                                                                                                                     |   |   |   |   |   |
| **Total stockholders'  equity**                                                                                                                |  $ | 416,456  |   |  $ | 491,403  |

 

 

| See notes to consolidated  financial statements. 

 

Page 6 of 39 |
|-------------------------------------------------------------------------|

 

----

 

 

 

 

 

** **

| **PARKWAY PROPERTIES, INC.**
**CONSOLIDATED STATEMENTS OF CASH FLOWS**

(In thousands)

** **

 

 

 

** **

**Six Months Ended**

** **

**June 30**

** **

**2008**

 

**2007**

** **

(Unaudited)

**Operating  activities**

 

 

 

        Net  income (loss)

 $

(4,531)

 

 $

19,668 

        Adjustments  to reconcile net income (loss) to cash provided by 

 

 

 

                 operating  activities:

 

 

 

                 Depreciation  and amortization

45,262 

 

38,079 

                 Depreciation  and amortization – discontinued operations

344 

 

301 

                 Amortization  of above market leases 

247 

 

698 

                 Amortization  of loan costs

872 

 

583 

                 Amortization  of mortgage loan discount

(249)

 

- 

                 Share  based compensation expense

918 

 

727 

                 Operating  distributions from unconsolidated joint ventures

661 

 

670 

                 Loss  allocated to minority interests

(4,550)

 

(1,487)

                 Gain  on sale of real estate

- 

 

(20,310)

                 Equity  in earnings of unconsolidated joint ventures

(547)

 

(548)

                 Increase  in deferred leasing costs

(4,694)

 

(1,780)

                 Changes  in operating assets and liabilities:

 

 

 

                         Change  in receivables and other assets

9,894 

 

(2,434)

                         Change  in accounts payable and other liabilities

(4,833)

 

1,171 

** **

 

 

 

**        Cash  provided by operating activities**

38,794 

 

35,338 

** **

 

 

 

**Investing  activities**

 

 

 

        Distributions  from unconsolidated joint ventures        

38 

 

89 

        Purchases  of real estate related investments

(231,814)

 

(49,600)

        Proceeds  from sale of real estate

- 

 

56,787 

        Real  estate development

(13,685)

 

(1,909)

        Improvements  to real estate related investments

(14,535)

 

(23,212)

 

 

 

 

**        Cash  used in investing activities**

(259,996)

 

(17,845)

** **

 

 

 

**Financing  activities**

 

 

 

        Principal  payments on mortgage notes payable

(52,123)

 

(33,490)

        Proceeds  from long-term financing

213,365 

 

59,500 

        Proceeds  from bank borrowings

116,227 

 

94,561 

        Payments  on bank borrowings

(89,715)

 

(103,566)

        Debt  financing costs

(1,686)

 

(648)

        Stock  options exercised

779 

 

2,788 

        Dividends  paid on common stock

(19,656)

 

(20,459)

        Dividends  paid on preferred stock

(2,400)

 

(2,400)

        Contributions  from minority interest partners

60,501 

 

36,915 

        Distributions  to minority interest partners

(1,215)

 

(47,378)

        Employee  stock purchase plan

- 

 

36 

        Proceeds  from DRIP plan

- 

 

363 

        Issuance  costs from stock offering

- 

 

(30)

** **

 

 

 

**        Cash  provided by (used in) financing activities**

224,077 

 

(13,808)

** **

 

 

 

**        Change  in cash and cash equivalents**

2,875 

 

3,685 

 

 

 

 

**        Cash  and cash equivalents at beginning of period**

11,312 

 

4,474 

** **

 

 

 

 

 

**        Cash  and cash equivalents at end of period**

 $

14,187 

 

 $

8,159 

 

 

See notes to consolidated financial statements.

 

Page  7 of 39

 

 
****
 

 

 

 

**Parkway Properties, Inc.Notes to Consolidated Financial Statements (Unaudited)June 30, 2008(1)           Basis of Presentation**

 

                Theconsolidated financial statements include the accounts of Parkway Properties,Inc. ("Parkway" or "the Company"), its wholly-ownedsubsidiaries and joint ventures in which the Company has a controllinginterest.  The other partners’ equity interests in the consolidated jointventures are reflected as minority interests in the consolidated financialstatements.  Parkway also consolidates subsidiaries where the entity is avariable interest entity and Parkway is the primary beneficiary, as defined inFASB Interpretation 46R, *Consolidation of Variable Interest Entities*(“FIN 46R”).  All significant intercompany transactions and accounts have beeneliminated in the accompanying financial statements.

                The Company determines consolidation for joint ventures basedon standards set forth in EITF 96-16, *Investor’s Accounting for an InvesteeWhen the Investor Has a Majority of the Voting Interest but the MinorityShareholder or Shareholders Have Certain Approval or Veto Rights;*EITF04-5, *Determining Whether a General Partner, or the General Partners as aGroup, Controls a Limited Partnership or Similar Entity When the LimitedPartners Have Certain Rights;*Statement of Position 78-9*, Accounting forInvestments in Real Estate Ventures;* and FIN 46R.  Based on the guidanceset forth in these pronouncements, the Company consolidates certain jointventures where it exercises significant control over major operating andmanagement decisions, or where the Company is the sole general partner and thelimited partners do not possess kick-out rights or other substantiveparticipating rights or where the entity is a variable interest entity andParkway is the primary beneficiary.  The equity method of accounting is usedfor those joint ventures that do not meet the criteria for consolidation andwhere Parkway exercises significant influence but does not control these jointventures. 

 

                Theaccompanying unaudited condensed consolidated financial statements have beenprepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q andArticle 10 of Regulation S-X.  Accordingly, they do not include all of theinformation and footnotes required by United States generally accepted accountingprinciples for complete financial statements.

 

                Theaccompanying financial statements reflect all adjustments which are, in theopinion of management, necessary for a fair statement of the results for theinterim periods presented.  All such adjustments are of a normal recurringnature.  The preparation of financial statements in conformity with GAAPrequires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities, the disclosures of contingent assets andliabilities at the date of the financial statements and the reported amounts ofrevenues and expenses during the reporting period.  Operating results for thethree months and six months ended June 30, 2008 are not necessarily indicativeof the results that may be expected for the year ended December 31, 2008.  Thefinancial statements should be read in conjunction with the annual report andthe notes thereto.

 

                Thebalance sheet at December 31, 2007 has been derived from the audited financialstatements at that date but does not include all of the information and footnotesrequired by United States generally accepted accounting principles for completefinancial statements.

 

                Certainreclassifications have been made in the 2007 financial statements to conform tothe 2008 classifications.

               

The 2008 consolidated statements of incomeinclude a $657,000 non-cash reduction to net income as a result of a purchaseprice adjustment recorded to income during the third quarter of 2006 throughthe end of 2007.  The non-cash purchase price adjustment was corrected inthe first quarter of 2008.  Parkway’s Management as well as the AuditCommittee of the Board of Directors have reviewed this accounting errorutilizing Securities and Exchange Commission Staff Accounting Bulletins (SAB)Nos. 99 and 108 and believe the impact of correcting this error is not materialto the current and prior period consolidated financial statements.

 

 

Page  8 of 39

 

 
 
 

 

 

 

In September 2006, the FASB issued SFAS No. 157, “FairValue Measurements” (“SFAS No. 157”).  SFAS No. 157 defines fair value,establishes a framework for measuring fair value in generally acceptedaccounting principles (GAAP), and expands disclosures about fair valuemeasurements.  The provisions of SFAS No.157, with the exception of nonfinancial assets and liabilities, were effectivefor financial statements issued for fiscal years beginning after November 15,2007.  The FASB deferred for one year the Statement’s fair value measurementrequirements for nonfinancial assets and liabilities that are not required orpermitted to be measured at fair value on a recurring basis.  These provisionswill be effective for fiscal years beginning after November 15, 2008, and theCompany is in the process of evaluating the impact that the adoption of theseprovisions will have on the Company’s overall financial position and results ofoperations.  The application of SFAS 157 had an immaterial impact on theCompany’s overall financial position and results of operations upon adoptionJanuary 1, 2008.

 

                InDecember 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (SFASNo. 141R), which revised the previously issued SFAS No. 141 (SFAS No. 141). SFAS No. 141R retains the fundamental requirements of SFAS No. 141, but expandsthe scope to include all transactions and other events in which one entity obtainscontrol over one or more other businesses.  SFAS No. 141R applies prospectivelyto business combinations for which the acquisition date is on or after thebeginning of the first annual reporting period beginning on or after December 15, 2008.  SFAS No. 141R requires that the acquisition related transaction costsbe expensed as incurred.  SFAS No. 141R also includes new disclosurerequirements. The Company is currently evaluating the impact of SFAS No. 141Ron the Company’s consolidated financial statements.

 

In December 2007, the FASB issued SFAS No. 160,“Noncontrolling Interests in Consolidated Financial Statements—an amendment ofARB No. 51” (SFAS No. 160).  SFAS No. 160 amends ARB No. 51 to establishaccounting and reporting standards for the noncontrolling interest in asubsidiary and for the deconsolidation of a subsidiary.  SFAS No. 160 alsoamends certain of ARB No. 51’s consolidation procedures for consistency withthe requirements of SFAS No. 141R.  SFAS No. 160 is effective for fiscal years,and interim periods within those fiscal years, beginning on or after December 15, 2008.  The Company is currently evaluating the impact of SFAS No. 160 on theCompany’s consolidated financial statements.

 

                InMarch 2008, the FASB issued SFAS No. 161, “Disclosures about DerivativeInstruments and Hedging Activities” (SFAS No. 161), which is an amendment ofFASB Statement No. 133. SFAS No. 161 requires all entities with derivativeinstruments to disclose information regarding how and why the entity usesderivative instruments and how derivative instruments and related hedged itemsaffect the entity’s financial position, financial performance, and cash flows.The Statement is effective prospectively for periods beginning on or afterNovember 15, 2008.  The Company is currently evaluating the impact of SFAS No.161 and does not expect the adoption of this Statement on January 1, 2009 tohave a material impact on the Company’s overall financial position and resultsof operations.

 

** (2)          NetIncome (Loss) Per Common Share**

                Basic earnings per share (“EPS”) are computed by dividingincome available to common stockholders by the weighted-average number ofcommon shares outstanding for the period.  In arriving at income available tocommon stockholders, preferred stock dividends are deducted.  Diluted EPSreflects the potential dilution that could occur if share equivalents such asemployee stock options, restricted shares and deferred incentive share units wereexercised or converted into common stock that then shared in the earnings ofParkway.

The computation of diluted EPS is as follows (in thousands, except per sharedata):

 

 

**Three Months Ended**

** **

**Six Months Ended**

 

**June 30**

** **

**June 30**

 

**2008**

** **

**2007**

** **

**2008**

** **

**2007**

Numerator:

 

 

 

 

 

 

 

    Basic  and diluted net income (loss)

 

 

 

 

 

 

 

        available  to common stockholders

 $

(3,136)

 

 $

18,040 

 

 $

(6,931)

 

 $

17,268 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

    Basic  weighted average shares

15,024 

 

15,672 

 

15,013 

 

15,644 

    Dilutive  effect of share equivalents

- 

 

175 

 

- 

 

187 

    Dilutive  weighted average shares

15,024 

 

15,847 

 

15,013 

 

15,831 

Diluted  earnings (loss) per share

 $

(0.21)

 

 $

1.14 

 

 $

(0.46)

 

 $

1.09 

 

Page  9 of 39

 

 

 

 

 

 

                Thecomputation of diluted EPS for the three months and six months ended June 30,2008 did not include the effect of share equivalents because their inclusionwould have been anti-dilutive.

** **

**(3)           SupplementalCash Flow Information and Schedule of Non-Cash Investing and Financing Activity**

** **

                TheCompany considers all highly liquid investments with a maturity of three monthsor less when purchased to be cash equivalents.

 

 

**Six Months Ended**

 

**June 30**

 

**2008**

 

**2007**

 

(in thousands)

 

 

 

 

Supplemental  cash flow information:

 

 

 

        Cash  paid for interest (net of amount capitalized)

 $

29,886 

 

 $

26,332 

        Income  taxes paid

4 

 

30 

Supplemental  schedule of non-cash investing and financing activity:

 

 

 

        Shares  issued in lieu of Directors’ fees

140 

 

251 

** **

**(4)                Acquisitions**

** **

                OnJanuary 18, 2008, the discretionary fund with Ohio PERS (“Ohio PERS Fund I”),of which Parkway owns 25%, purchased Gateway Center, a 228,000 square footoffice property in the central business district of Orlando, Florida for apurchase price of $55.0 million.  The fund expects to spend an additional $2.8million for closing costs, building improvements, leasing costs and tenantimprovements during the first two years of ownership.  The purchase was fundedwith a $33.0 million first mortgage placement by the fund and with equity contributionsfrom the partners.

 

                OnJanuary 31, 2008, the Company purchased Desert Ridge Corporate Center, a293,000 square foot office project in Phoenix, Arizona for a purchase price of$81.6 million on behalf of Ohio PERS Fund I.  An additional $2.3 million isexpected to be spent for closing costs, building improvements, leasing costsand tenant improvements during the first two years of ownership.  The purchasewas funded with a $49.2 million first mortgage placement and with equitycontributions from the partners.  Due to Ohio PERS Fund I’s $80.0 million limiton a single investment, Parkway’s effective ownership interest in this asset is26.5%.

 

                OnFebruary 15, 2008, the Company purchased Citicorp Plaza, a 600,000 square footoffice project in Chicago, Illinois for a purchase price of $100.0 million onbehalf of Ohio PERS Fund I.  An additional $9.2 million is expected to be spentfor closing costs, building improvements, leasing costs and tenant improvementsduring the first two years of ownership.  The purchase was funded with a $60.0million first mortgage placement and with equity contributions from thepartners.  Due to the Ohio PERS Fund I’s $80.0 million limit on a singleinvestment, Parkway’s effective ownership interest in this asset is 40%.

 

                Thepreliminary allocation of purchase price allocated to intangible assets and(liabilities) and weighted average amortization period (in years) for eachclass of asset or liability for Gateway Center, Desert Ridge Corporate Centerand Citicorp Plaza is as follows (in thousands, except weighted average life):

 

 

** **

**Weighted**

 

**Amount**

**Average Life**

Lease  in place value

$17,456 

5

Above  market leases

4,119 

4

Below  market leases

(1,435)

6

 

Page  10 of 39

 

 

 

 

 

 

**(5)   Office Property Heldfor Sale**

 

During the quarter ended June 30, 2008, Parkwayclassified Town Point Center, a 131,000 square foot office building in Norfolk,Virginia, as held for sale.    On July 15, 2008, the Company sold Town PointCenter to an unrelated third party for a gross sales price of $12.8 million andwill record a gain on the sale of approximately $1.6 million in the third quarterof 2008.  In accordance with generally accepted accounting principles, allcurrent and prior period income from Town Point Center has been classified asdiscontinued operations. 

** **

        Themajor classes of assets and liabilities classified as held for sale for TownPoint Center as of June 30, 2008 are as follows (in thousands):

 

 

**June 30**

 

**2008**

 

 

**Balance  Sheet:**

 

Investment  property

$    14,510 

Accumulated  depreciation

(4,307)

Office  property held for sale

10,203 

Rents  receivable and other assets

453 

**Total  assets**

$    10,656 

 

 

Accounts  payable and other liabilities

$         294 

Stockholders’  equity

10,362 

**Total  liabilities and stockholders’ equity**

$    10,656 

 

Theamounts of revenue and expense for Town Point Center reported in discontinued operationsfor the three months and six months ended June 30, 2008 and 2007 are as follows(in thousands):

** **

** **

**Three Months Ended**

** **

**Six Months Ended**

** **

**June 30**

** **

**June 30**

** **

**2008**

** **

**2007**

** **

**2008**

** **

**2007**

**Income  Statement:**

** **

** **

** **

** **

** **

** **

** **

**Revenues**

 

 

 

 

 

 

 

Income from office and  parking properties

 $

592

 

 $

611

 

 $

1,162

 

 $

1,174 

** **

592 

 

611

 

1,162

 

1,174 

**Expenses**

 

 

 

 

 

 

 

Office and parking  properties:

 

 

 

 

 

 

 

        Operating expense

283

 

245

 

611

 

544 

        Depreciation and  amortization

169

 

147

 

344

 

301 

** **

452

 

392

 

955

 

845 

**Income from discontinued  operations**

 $

140

 

 $

219

 

 $

207

 

 $

329 

** **

 

 

 

 

 

 

 

(6)           Office Property Development

 

                Asof June 30, 2008, the Company had incurred $29.2 million in total developmentcosts for the construction of The Pinnacle at Jackson Place, which is a 194,000square foot Class A+ office building development adjacent to the Company’sheadquarters building in Jackson, Mississippi.  The estimated cost of thedevelopment is $48.5 million with expected completion in the fall of 2008.  TheCompany has received commitments to lease approximately 71% of the new officespace from four major customers.  Parkway is considering a joint venturestructure for the development whereby Parkway will retain an ownership interestof approximately 20%.  The development is designed to utilize benefitsavailable under the Gulf Opportunity Zone Act for new developments in areasaffected by Hurricane Katrina.

 

Page  11 of 39

 

 

 

 

 

 

**(7)           Mortgage Loan**

 

                TheCompany owns the B participation piece (the “B piece”) of a first mortgagesecured by an 844,000 square foot office building in Dallas, Texas known as2100 Ross for $6.9 million.  The B piece was originated by Wachovia Bank, N.A.and has a face value of $10 million and a stated coupon rate of 6.065%.  Uponmaturity in May 2012, the Company will receive a principal payment of $10million, which produces a yield to maturity of 15.6%.  The balance of themortgage loan was $7.3 million as of June 30, 2008.

** **

**(8)           Investmentin Unconsolidated Joint Ventures**

 

In addition to the 63 office and parking propertiesincluded in the consolidated financial statements, the Company is also investedin four unconsolidated joint ventures with unrelated investors.  Theseinvestments are accounted for using the equity method of accounting, as Parkwaydoes not control any of these joint ventures.  Accordingly, the assets andliabilities of the joint ventures are not included on Parkway's consolidatedbalance sheets as of June 30, 2008 and December 31, 2007.  Information relatingto these unconsolidated joint ventures is detailed below (in thousands).

 

** **

** **

** **

**Parkway's**

** **

**Percentage**

** **

** **

** **

**Ownership**

**Square**

**Leased**

**Joint Venture Entity**

**Property Name**

**Location**

**Interest**

**Feet**

**As of 07/01/08**

** **

** **

** **

** **

** **

** **

Wink-Parkway Partnership

Wink Building

New Orleans, LA

50.0%

32

100.0%

Parkway Joint Venture, LLC  (“Jackson JV”)

UBS Building/River Oaks

Jackson, MS

20.0%

167

91.6%

RubiconPark I, LLC (“Rubicon  JV”)

Lakewood/Falls Pointe

Atlanta, GA

20.0%

552

97.9%

 

Carmel Crossing

Charlotte, NC

 

 

 

RubiconPark II, LLC  (“Maitland JV”)

Maitland 200

Orlando, FL

20.0%

204

99.0%

 

 

 

 

955

97.1%

 

        Cashdistributions from unconsolidated joint ventures are made to each partner basedon their percentage of ownership in each entity.  Cash distributions madeto partners in joint ventures where the percentage of debt assumed isdisproportionate to the ownership percentage in the venture is distributedbased on each partner’s share of cash available for distribution before debtservice, based on their ownership percentage, less the partner’s share of debtservice based on the percentage of debt assumed by each partner.

 

                Parkwayprovides management, construction and leasing services for all of theunconsolidated joint ventures except for the Wink-Parkway Partnership, andreceives market based fees for these services.  The portion of fees earned onunconsolidated joint ventures attributable to Parkway’s ownership interest iseliminated in consolidation.

 

Page  12 of 39

 

 

 

 

 

 

                Balancesheet information for the unconsolidated joint ventures is summarized below asof June 30, 2008 and December 31, 2007 (in thousands):

 

**Balance Sheet Information**

 

**June 30, 2008**

 

**Wink**

**Jackson**

**Rubicon**

**Maitland**

**Combined**

 

**Building**

**JV**

**JV**

**JV**

**Total**

**Unconsolidated  Joint Ventures (at 100%):**

 

 

 

 

 

Real  Estate, Net

$

1,180

$

16,127 

$

66,042

$

29,079

$

112,428

Other  Assets

368

699 

8,128

1,236

10,431

        Total  Assets

$

1,548

$

16,826 

$

74,170

$

30,315

$

122,859

 

 

 

 

 

 

Mortgage  Debt (a)

$

123

$

12,600 

$

52,000

$

18,388

$

83,111

Other  Liabilities

29

418 

1,674

801

2,922

Partners’  and Shareholders’ Equity

1,396

3,808 

20,496

11,126

36,826

        Total  Liabilities & Partners’/Shareholders’ Equity

$

1,548

$

16,826 

$

74,170

$

30,315

$

122,859

 

 

 

 

 

 

**Parkway’s  Share of Unconsolidated**

 

 

 

 

 

**        Joint  Ventures**

 

 

 

 

 

Real  Estate, Net

$

590

$

3,225 

$

13,208

$

5,816

$

22,839

Mortgage  Debt

$

61

$

2,520 

$

7,200

$

-

$

9,781

Investment  in Joint Ventures

$

698

$

(282)

$

5,507

$

5,168

$

11,091

 

 

 

 

 

 

 

**December 31, 2007**

 

**Wink**

**Jackson**

**Rubicon**

**Maitland**

**Combined**

 

**Building**

**JV**

**JV**

**JV**

**Total**

**Unconsolidated  Joint Ventures (at 100%):**

 

 

 

 

 

Real  Estate, Net

$

1,191

$

15,945 

$

66,914

$

29,341

$

113,391

Other  Assets

282

1,444 

7,117

1,109

9,952

        Total  Assets

$

1,473

$

17,389 

$

74,031

$

30,450

$

123,343

 

 

 

 

 

 

Mortgage  Debt (a)

$

176

$

12,600 

$

52,000

$

18,617

$

83,393

Other  Liabilities

23

728 

1,580

686

3,017

Partners’  and Shareholders’ Equity

1,274

4,061 

20,451

11,147

36,933

        Total  Liabilities & Partners’/Shareholders’ Equity

$

1,473

$

17,389 

$

74,031

$

30,450

$

123,343

 

 

 

 

 

 

**Parkway’s  Share of Unconsolidated**

 

 

 

 

 

**        Joint  Ventures**

 

 

 

 

 

Real  Estate, Net

$

595

$

3,189 

$

13,383

$

5,868

$

23,035

Mortgage  Debt

$

88

$

2,520 

$

7,200

$

-

$

9,808

Investment  in Joint Ventures

$

637

$

(244)

$

5,433

$

5,410

$

11,236

 

        (a)   Themortgage debt, all of which is non-recourse, is collateralized by theindividual real estate properties within each venture.

 

Page  13 of 39

 

 

 

 

 

 

In most cases the Company’s share of debt related toits unconsolidated joint ventures is the same as its ownership percentage inthe venture.  However, in the case of the Rubicon Joint Venture and the MaitlandJoint Venture, the Company’s share of debt is disproportionate to its ownershippercentage.  The disproportionate debt structure was created to meet theCompany’s partner’s financing criteria.  In the Rubicon Joint Venture,Parkway owns a 20% interest in the venture but assumed 13.85% of thedebt.  In the Maitland Joint Venture, the Company owns a 20% interest inthe venture and assumed none of the debt. The terms related to Parkway's shareof unconsolidated joint venture mortgage debt are summarized below (inthousands):

 

** **

** **

** **

** **

**Parkway’s**

**Monthly**

**Loan**

**Loan**

** **

**Type of**

**Interest**

** **

**Share of**

**Debt**

**Balance**

**Balance**

**Joint Venture**

**Debt Service**

**Rate**

**Maturity**

**Debt**

**Service**

**06/30/08**

**12/31/07**

 

 

 

 

 

 

 

 

Wink-Parkway Partnership

Amortizing

8.625%

07/01/09

50.00%

$           5 

$         61

$         88

Maitland JV

Amortizing

4.390%

06/01/11

0.00%

- 

-

-

Rubicon JV

Interest Only

4.865%

01/01/12

13.85%

30 

7,200

7,200

Jackson JV

Interest Only

5.840%

07/01/15

20.00%

12 

2,520

2,520

 

 

 

 

 

$         47 

$    9,781

$    9,808

 

 

 

 

 

 

 

 

**Weighted average interest  rate at end of period**

 

 

 

5.140%

5.149%

 

                Thefollowing table presents Parkway's proportionate share of principal paymentsdue for mortgage debt in unconsolidated joint ventures as of June 30, 2008 (inthousands):

 

 

**Wink**

** **

**Jackson**

** **

**Rubicon**

** **

**Maitland**

** **

** **

 

**Partnership**

** **

**JV**

** **

**JV**

** **

**JV**

** **

**Total**

2008  (Remaining six months)

$

28

 

$

-

 

$

-

 

$

-

 

$

28

2009

33

 

12

 

100

 

-

 

145

2010

-

 

33

 

114

 

-

 

147

2011

-

 

35

 

119

 

-

 

154

2012

-

 

37

 

6,867

 

-

 

6,904

2013

-

 

39

 

-

 

-

 

39

Thereafter

-

 

2,364

 

-

 

-

 

2,364

 

$

61

 

$

2,520

 

$

7,200

 

$

-

 

$

9,781

 

Page  14 of 39

 

 

 

 

 

 

                Incomestatement information for the unconsolidated joint ventures is summarized belowfor the three months ended June 30, 2008 and 2007 (in thousands):

 

**Results of Operations**

** **

**Three Months Ended June 30, 2008**

** **

**Viad**

**Wink**

**Jackson**

**Rubicon**

**Maitland**

**Combined**

** **

**JV**

**Building**

**JV**

**JV**

**JV**

**Total**

 

 

 

 

 

 

 

**Unconsolidated Joint  Ventures (100%):**

** **

** **

** **

** **

** **

** **

Revenues

 $

108 

$

94 

$

655 

$

2,566 

$

1,155 

$

4,578 

Operating Expenses

(2)

(20)

(345)

(977)

(400)

(1,744)

        Net Operating Income

106 

74 

310 

1,589 

755 

2,834 

Interest Expense

- 

(7)

(184)

(639)

(202)

(1,032)

Loan Cost Amortization

- 

(1)

(1)

(16)

(3)

(21)

Depreciation and  Amortization

- 

(6)

(153)

(513)

(214)

(886)

        Net Income (Loss)

 $

106 

$

60 

$

(28)

$

421 

$

336 

$

895 

 

 

 

 

 

 

 

**Parkway’s Share of  Unconsolidated**

 

 

 

 

 

 

**        Joint Ventures:**

 

 

 

 

 

 

Net Income (Loss)

 $

32 

$

30 

$

(6)

$

125 

$

108 

$

289 

Depreciation and  Amortization

 $

- 

$

3 

$

30 

$

103 

$

43 

$

179 

Property Management Fees

 $

- 

$

- 

$

39 

$

99 

$

31 

$

169 

Incentive Fee

 $

5 

$

- 

$

- 

$

- 

$

- 

$

5 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense 

 $

- 

$

3 

$

37 

$

89 

$

- 

$

129 

Loan Cost Amortization

 $

- 

$

1 

$

- 

$

1 

$

- 

$

2 

** **

 

 

 

 

 

 

**Other Supplemental  Information:**

 

 

 

 

 

 

Distributions from  Unconsolidated JVs

 $

38 

$

- 

$

13 

$

95 

$

171 

$

317 

 

 

**Results of Operations**

** **

**Three Months Ended June 30, 2007**

** **

**Viad**

**Wink**

**Jackson**

**Rubicon**

**Maitland**

**Combined**

** **

**JV**

**Building**

**JV**

**JV**

**JV**

**Total**

 

 

 

 

 

 

 

**Unconsolidated Joint  Ventures (100%):**

** **

** **

** **

** **

** **

** **

Revenues

 $

2 

$

87 

$

649 

$

2,566 

$

1,093 

$

4,397 

Operating Expenses

(12)

(33)

(301)

(1,025)

(429)

(1,800)

        Net Operating Income  (Loss)

(10)

54 

348 

1,541 

664 

2,597 

Interest Expense

- 

(5)

(184)

(639)

(207)

(1,035)

Loan Cost Amortization

- 

(1)

(1)

(16)

(3)

(21)

Depreciation and  Amortization

- 

(6)

(135)

(493)

(165)

(799)

        Net Income (Loss)

 $

(10)

$

42 

$

28 

$

393 

$

289 

$

742 

 

 

 

 

 

 

 

**Parkway’s Share of  Unconsolidated**

 

 

 

 

 

 

**        Joint Ventures:**

 

 

 

 

 

 

Net Income (Loss)

 $

(3)

$

21 

$

6 

$

119 

$

100 

$

243 

Depreciation and  Amortization

 $

- 

$

3 

$

27 

$

98 

$

33 

$

161 

Property Management Fees

 $

- 

$

- 

$

26 

$

108 

$

40 

$

174 

Incentive Fee

 $

27 

$

- 

$

- 

$

- 

$

- 

$

27 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense 

 $

- 

$

3 

$

37 

$

88 

$

- 

$

128 

Loan Cost Amortization

 $

- 

$

1 

$

- 

$

2 

$

- 

$

3 

** **

 

 

 

 

 

 

**Other Supplemental  Information:**

 

 

 

 

 

 

Distributions from  Unconsolidated JVs

 $

89 

$

- 

$

23 

$

173 

$

69 

$

354 

** **

** **

Page  15 of 39

 

 

 

 

 

 

** **

**Results of Operations**

** **

**Six Months Ended June 30, 2008**

** **

**Viad**

**Wink**

**Jackson**

**Rubicon**

**Maitland**

**Combined**

** **

**JV**

**Building**

**JV**

**JV**

**JV**

**Total**

 

 

 

 

 

 

 

**Unconsolidated Joint  Ventures (100%):**

** **

** **

** **

** **

** **

** **

Revenues

 $

108 

$

189 

$

1,289 

$

5,120 

$

2,308 

$

9,014 

Operating Expenses

(2)

(47)

(686)

(1,953)

(787)

(3,475)

        Net Operating Income

106 

142 

603 

3,167 

1,521 

5,539 

Interest Expense

- 

(7)

(368)

(1,279)

(405)

(2,059)

Loan Cost Amortization

- 

(1)

(2)

(32)

(7)

(42)

Depreciation and  Amortization

- 

(12)

(295)

(1,025)

(424)

(1,756)

        Net Income (Loss)

 $

106 

$

122 

$

(62)

$

831 

$

685 

$

1,682 

 

 

 

 

 

 

 

**Parkway’s Share of  Unconsolidated**

 

 

 

 

 

 

**        Joint Ventures:**

 

 

 

 

 

 

Net Income (Loss)

 $

32 

$

61 

$

(12)

$

247 

$

219 

$

547 

Depreciation and  Amortization

 $

- 

$

6 

$

59 

$

205 

$

85 

$

355 

Property Management Fees

 $

- 

$

- 

$

108 

$

189 

$

86 

$

383 

Incentive Fee

 $

5 

$

- 

$

- 

$

- 

$

- 

$

5 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense 

 $

- 

$

3 

$

74 

$

177 

$

- 

$

254 

Loan Cost Amortization

 $

- 

$

1 

$

- 

$

4 

$

- 

$

5 

** **

 

 

 

 

 

 

**Other Supplemental  Information:**

 

 

 

 

 

 

Distributions from  Unconsolidated JVs

 $

38 

$

- 

$

26 

$

174 

$

461 

$

699 

** **

** **

**Results of Operations**

 

**Six Months Ended June 30, 2007**

 

**Viad**

**Wink**

**Jackson**

**Rubicon**

**Maitland**

**Combined**

 

**JV**

**Building**

**JV**

**JV**

**JV**

**Total**

** **

 

 

 

 

 

 

**Unconsolidated Joint  Ventures (100%):**

 

 

 

 

 

 

Revenues

 $

2 

 $

200 

 $

1,329 

 $

5,150 

 $

2,206 

 $

8,887 

Operating Expenses

(37)

(49)

(643)

(1,907)

(809)

(3,445)

        Net Operating Income  (Loss)

(35)

151 

686 

3,243 

1,397 

5,442 

Interest Expense

- 

(11)

(368)

(1,272)

(414)

(2,065)

Loan Cost Amortization

- 

(1)

(2)

(31)

(8)

(42)

Depreciation and  Amortization

- 

(12)

(275)

(984)

(322)

(1,593)

Income (Loss) Before Gain on  Sale of Real Estate

(35)

127 

41 

956 

653 

1,742 

Gain on Sale of Real Estate

166 

- 

- 

- 

- 

166 

        Net Income

 $

131 

 $

127 

 $

41 

 $

956 

 $

653 

 $

1,908 

**Parkway’s Share of  Unconsolidated**

 

 

 

 

 

 

**        Joint Ventures:**

 

 

 

 

 

 

Income (Loss) Before Gain of  Sale of Real Estate

 $

(11)

 $

64 

 $

9 

 $

271 

 $

215 

 $

548 

Gain on Sale of Real Estate

50 

- 

- 

- 

- 

50 

Net Income

 $

39 

 $

64 

 $

9 

 $

271 

 $

215 

 $

598 

Depreciation and  Amortization

 $

- 

 $

6 

 $

55 

 $

196 

 $

65 

 $

322 

Property Management Fees

 $

- 

 $

- 

 $

84 

 $

178 

 $

74 

 $

336 

Incentive Fee

 $

27 

 $

- 

 $

- 

 $

- 

 $

- 

 $

27 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense 

 $

- 

 $

6 

 $

74 

 $

175 

 $

- 

 $

255 

Loan Cost Amortization

 $

- 

 $

2 

 $

- 

 $

4 

 $

- 

 $

6 

** **

 

 

 

 

 

 

**Other Supplemental  Information:**

 

 

 

 

 

 

Distributions from  Unconsolidated JVs

 $

89 

 $

- 

 $

47 

 $

450 

 $

173 

 $

759 

** **

** **

Page  16 of 39

 

 

 

 

 

 

** **

**(9)           Capitaland Financing Transactions**

 

                Asof June 30, 2008, the Company had a total of $238.9 million outstanding underthe line of credit and was in compliance with all loan covenants under thecredit facility.  The Company’s line of credit allows Parkway to borrow up to acombined $311.0 million.  Based on the loan covenants, the Company had $44.5 millionin additional capacity available on the line of credit as of June 30, 2008.

 

                Inconnection with the Ohio PERS Fund I investments during the first quarter of2008 discussed in Note 4 – Acquisitions, total non–recourse first mortgage debtwas placed in the amount of $142.2 million at a weighted average interest rateof 5.7%.  The portion of mortgage debt attributable to the fund was $129.2million, and $13.0 million was attributable to Parkway.  The mortgages aresecured by the respective properties, have one to three year interest onlyperiods and mature in 2016.

 

                OnAugust 3, 2007, the Board of Directors authorized the repurchase of up to 1.7 millionshares of Parkway’s outstanding common stock through July 30, 2008.  The sharesmay be purchased in the open market or in privately negotiated transactions,and at times and in amounts that the Company deems appropriate.  In 2007, theCompany had purchased approximately 687,000 shares for $29.1 million, whichequates to an average price of $42.36 per share.  No shares were purchasedunder this authorization during the six months ended June 30, 2008.

 

                OnFebruary 1, 2008, the Company paid off two mortgage notes payable secured bythe 400 North Belt and Woodbranch buildings in Houston, Texas with a totalprincipal balance of $3.5 million with advances under the line of credit.  Themortgages had an interest rate of 8.25% and were scheduled to mature on August1, 2011.  The Company recognized a total of $401,000 in expense associated withthe prepayment of these mortgages.

 

On May 2, 2008, the Company completed a $60.0 millionrecourse mortgage loan related to the refinance of a $41.4 million mortgage thatwas scheduled to mature in September 2008.  The loan is secured by theCompany’s Capital City Plaza building in Atlanta, Georgia.  The interest rateon the loan is a variable rate based on LIBOR plus 165 basis points.  The loanterm is for two years, with a one-year extension option at the Company’sdiscretion. The excess loan proceeds of $18.4 million were used to pay down theCompany’s line of credit.  The Company recorded a gain on the prepayment of $388,000associated with the write off of the debt premium in the second quarter of2008.  The mortgage represented the Company’s only outstanding maturity in2008.  

 

                Duringthe second quarter of 2008, the Company entered into the following interestrate swap agreements:

 

•        Interest rate swap agreement withRegions Bank for a $100 million notional amount that fixes the 30-day LIBORinterest rate at 3.635%, which equates to a total interest rate of 4.935%, forthe period January 1, 2009, through March 31, 2011. The swap agreement servesas a hedge of the variable interest rates on a portion of the borrowings underthe Company’s line of credit.

 

•        Interest rate swap agreement withUS Bank for a $23.5 million notional amount that fixes the 30-day LIBORinterest rate at 4.05%, which equates to a total interest rate of 5.55%, forthe period January 1, 2009, through December 1, 2014. The swap agreement servesas a hedge of the variable interest rates on the borrowings under the Pinnacleat Jackson Place Senior New Market Tax Credits mortgage loan.

 

Page  17 of 39

 

 

 

 

 

 

**(10)         MinorityInterest – Real Estate Partnerships**

** **

The Company has an interest in two joint ventures thatare included in its consolidated financial statements. Information relating tothese consolidated joint ventures is detailed below.

 

** **

** **

**Parkway’s**

**Square Feet**

**Joint Venture Entity and Property Name**

**Location**

**Ownership %**

**(In thousands)**

Parkway Moore, LLC/ Moore  Building Associates, LP 

 

 

 

      Toyota  Center

Memphis, TN

75.025%

     175

 

 

 

 

Parkway Properties Office  Fund, LP

 

 

 

      Desert  Ridge I, II and Shops            

Phoenix, AZ

26.500%

293

      Maitland  100

Orlando, FL

25.000%

128

      555  Winderley

Orlando, FL

25.000%

102

      Gateway  Center

Orlando, FL

25.000%

228

      BellSouth  Building

Jacksonville, FL

25.000%

92

      Centurion  Centre

Jacksonville, FL

25.000%

88

      100  Ashford Center

Atlanta, GA

25.000%

157

      Peachtree  Ridge

Atlanta, GA

25.000%

163

      Overlook  II

Atlanta, GA

25.000%

261

      Citicorp  Plaza

Chicago, IL

40.000%

600

      Chatham  Centre

Schaumburg, IL

25.000%

206

      Renaissance  Center

Memphis, TN

25.000%

190

      1401  Enclave Parkway

Houston, TX

25.000%

   209

Total Parkway Properties  Office Fund, LP

 

 

2,717

 

 

 

 

Total Consolidated Joint  Ventures

 

 

2,892

 

Moore Building Associates, LP (“MBALP”) wasestablished for the purpose of owning a commercial office building (the ToyotaCenter in Memphis, Tennessee).  In acting as the general partner, Parkway iscommitted to providing additional funding to meet partnership operatingdeficits up to an aggregate amount of $1 million.  Parkway receives income fromMBALP in the form of interest from a construction note receivable, incentivemanagement fees and property management fees.  Parkway also receives interestincome on a note receivable from Parkway Moore, LLC (“PMLLC”).  Any intercompanyasset, liability, revenue and expense accounts between Parkway and MBALP andPMLLC have been eliminated.

 

Parkway serves as the general partner of ParkwayProperties Office Fund, LP (“Ohio PERS Fund I”) and provides asset management,property management, leasing and construction management services to the fund,for which it is paid market-based fees.  Cash distributions from the fund aremade to each joint venture partner based on their percentage of ownership in thefund.  Since Parkway is the sole general partner and has the authority to makemajor decisions on behalf of the fund, Parkway is considered to have acontrolling interest.  Accordingly, Parkway is required to include the fund inits consolidated financial statements.  As of February 15, 2008, Ohio PERS FundI was fully invested.

 

Minority interest in real estate partnershipsrepresents the other partners’ proportionate share of equity in thepartnerships discussed above at June 30, 2008.  Income is allocated to minorityinterest based on the weighted average percentage ownership during the year.

 

On May 14, 2008 Parkway formed Parkway PropertiesOffice Fund II, LP (“Texas Teachers Fund II”), a $750 million discretionaryfund with the Teacher Retirement System of Texas (“TRS”), for the purpose ofacquiring high-quality multi-tenant office properties.   TRS will be a 70%investor, and Parkway will be a 30% investor in the fund, which will becapitalized with approximately $375 million of equity capital and $375 millionof non-recourse, fixed-rate first mortgage debt.  Parkway’s share of the equitycontribution for the fund will be $112.5 million and will be funded withproceeds from sales, line of credit advances and/or sales of securities.  The fundwill target investments in office buildings in Houston, Austin, San Antonio,Chicago, Atlanta, Phoenix, Charlotte, Memphis, Nashville, Jacksonville,Orlando, Tampa/St. Petersburg, Ft. Lauderdale, as well as other growth marketsto be determined at Parkway’s discretion.

 

Page  18 of 39

 

 

 

 

 

 

 

Parkway will serve as the general partner of TexasTeachers Fund II and will provide asset management, property management, andleasing and construction management services to the fund for which it will bepaid market-based fees.  Parkway will have four years to identify and acquireproperties, with funds contributed as needed to complete acquisitions.  Parkwaywill exclusively represent the fund in making acquisitions within the targetmarkets and within certain predefined criteria.  Parkway may continue to makefee-simple acquisitions in markets outside of the target markets, acquireproperties within the target markets that do not meet the fund’s specificcriteria or sell any currently owned properties.  As of June 30, 2008, therehave been no acquisitions of assets on behalf of Texas Teachers Fund II.

 

**(11)         ShareBased Compensation**

 

                EffectiveJanuary 1, 2003, the stockholders of the Company approved Parkway’s 2003 EquityIncentive Plan (the “2003 Plan”) that authorized the grant of up to 200,000equity based awards to employees of the Company.  At present, it is Parkway’sintention to grant restricted shares and/or deferred incentive share unitsinstead of stock options.  Restricted shares and deferred incentive share unitsare valued based on the New York Stock Exchange closing market price of Parkwaycommon shares (NYSE ticker symbol, PKY) as of the date of grant.

 

                Compensationexpense, including estimated forfeitures, is recognized over the expectedvesting period, which is four to seven years from grant date for restrictedshares subject to service conditions and four years from grant date for deferredincentive share units.  Certain restricted shares have been granted to officersof the Company where vesting is contingent upon achieving the cumulative goalsof the GEAR UP Plan, which began January 1, 2006 and ends December 31, 2008. Compensation expense will not be recorded on the shares that vest based onperformance conditions until the Company determines that it is probable thatthe goal will be achieved.  Therefore, no expense has been recorded in 2006,2007 and 2008 for these shares.

 

Compensation expense related to restricted shares anddeferred incentive share units of $918,000 and $727,000 was recognized for the sixmonths ended June 30, 2008 and 2007, respectively.  Total compensation expenserelated to nonvested awards subject to service conditions not yet recognizedwas $4.5 million as of June 30, 2008.  The weighted average period over whichthis expense is expected to be recognized is approximately 2.5 years.  Totalpotential compensation expense associated with shares that vest based onperformance conditions is $1.5 million as of June 30, 2008.

 

                Restrictedshares and deferred incentive share units are forfeited if an employee leavesthe Company before the vesting date.  Shares and/or units that are forfeitedbecome available for future grant under the 2003 Plan.

 

                Duringthe six months ended June 30, 2008, the Board of Directors approved the grantof 38,017 restricted shares to officers of the Company.  The shares were valuedat $1.2 million and 36,975 shares will vest four years from grant date and1,042 shares will vest subject to achievement of the cumulative goals of theGEAR UP plan, which will end on December 31, 2008.  

 

                Asummary of the Company’s restricted shares and deferred incentive share unitactivity for the six months ended June 30, 2008 is as follows:

 

 

** **

**Weighted**

** **

**Weighted**

 

** **

**Average**

**Deferred**

**Average**

 

**Restricted**

**Grant-Date**

**Incentive**

**Grant-Date**

 

**Shares**

**Fair Value**

**Share Units**

**Fair Value**

Outstanding  at December 31, 2007

220,999

$40.72

21,835 

$45.96

Granted

38,017

32.39

- 

-

Forfeited

-

-

(1,045)

45.42

Outstanding  at June 30, 2008

259,016

$39.50

20,790 

$45.99

Page  19 of 39

 

 

 

 

 

 

** (12)        SegmentInformation**

 

                Parkway’sprimary business is the ownership and operation of office properties. TheCompany accounts for each office property or groups of related officeproperties as an individual operating segment.  Parkway has aggregated itsindividual operating segments into a single reporting segment due to the factthat the individual operating segments have similar operating and economiccharacteristics.

 

                TheCompany believes that the individual operating segments exhibit similareconomic characteristics such as being leased by the square foot, sharing thesame primary operating expenses and ancillary revenue opportunities and beingcyclical in the economic performance based on current supply and demandconditions.  The individual operating segments are also similar in thatrevenues are derived from the leasing of office space to customers and eachoffice property is managed and operated consistently in accordance withParkway’s standard operating procedures.  The range and type of customer usesof our properties is similar throughout our portfolio regardless of location orclass of building and the needs and priorities of our customers do not varyfrom building to building. Therefore, Parkway’s management responsibilities donot vary from location to location based on the size of the building,geographic location or class.

 

The management of the Company evaluates theperformance of the reportable office segment based on funds from operationsapplicable to common shareholders (“FFO”).  Management believes that FFO is anappropriate measure of performance for equity REITs and computes this measurein accordance with the National Association of Real Estate Investment Trusts'("NAREIT") definition of FFO.  Funds from operations is defined byNAREIT as net income (computed in accordance with generally accepted accountingprinciples "GAAP"), excluding gains or losses from sales of propertyand extraordinary items under GAAP, plus depreciation and amortization, andafter adjustments to derive the Company’s pro rata share of FFO of consolidatedand unconsolidated joint ventures.  Further, the Company does not adjust FFO toeliminate the effects of non-recurring charges.  The Company believes that FFOis a meaningful supplemental measure of its operating performance becausehistorical cost accounting for real estate assets in accordance with GAAPimplicitly assumes that the value of real estate assets diminishes predictablyover time, as reflected through depreciation and amortization expenses. However, since real estate values have historically risen or fallen with marketand other conditions, many industry investors and analysts have consideredpresentation of operating results for real estate companies that use historicalcost accounting to be insufficient.  Thus, NAREIT created FFO as a supplementalmeasure of operating performance for real estate investment trusts thatexcludes historical cost depreciation and amortization, among other items, fromnet income, as defined by GAAP.  The Company believes that the use of FFO,combined with the required GAAP presentations, has been beneficial in improvingthe understanding of operating results of real estate investment trusts amongthe investing public and making comparisons of operating results among suchcompanies more meaningful.  FFO as reported by Parkway may not be comparable toFFO reported by other REITs that do not define the term in accordance with thecurrent NAREIT definition.  Funds from operations do not represent cashgenerated from operating activities in accordance with accounting principlesgenerally accepted in the United States and is not an indication of cashavailable to fund cash needs.  Funds from operations should not be consideredan alternative to net income as an indicator of the Company's operatingperformance or as an alternative to cash flow as a measure of liquidity.

 

Page  20 of 39

 

 

 

 

 

 

The following is a reconciliation of FFOand net income available to common stockholders for office properties and totalconsolidated entities for the three months ended June 30, 2008 and 2007. Amounts presented as “Unallocated and Other” represent primarily income andexpense associated with providing management services, corporate general andadministration expense, interest expense on unsecured lines of credit andpreferred dividends.

** **

 

**As of or for the three months ended**

**June 30, 2008**

 

**As of or for the three months ended**

**June 30, 2007**

 

**Office**

**Unallocated**

** **

 

**Office**

**Unallocated**

** **

 

**Properties**

**and Other**

**Consolidated**

 

**Properties**

**and Other**

**Consolidated**

 

 (in thousands) 

 

 (in thousands) 

 

 

 

 

 

 

 

 

Property operating revenues (a)

 $

68,684 

 $

- 

 $

68,684 

 

 $

60,523 

 $

- 

 $

60,523 

Property operating expenses (b)

(32,683)

- 

(32,683)

 

(28,573)

- 

(28,573)

Property net operating income from 

        continuing operations

36,001 

- 

36,001 

 

31,950 

- 

31,950 

 

 

 

 

 

 

 

 

Management company income

- 

410 

410 

 

- 

431 

431 

Interest and other income

- 

306 

306 

 

- 

72 

72 

Interest expense (c)

(12,249)

(3,103)

(15,352)

 

(11,267)

(2,785)

(14,052)

Management company expenses

- 

(432)

(432)

 

- 

(276)

(276)

General and administrative expenses

- 

(2,091)

(2,091)

 

- 

(1,600)

(1,600)

Other expense

- 

(1)

(1)

 

- 

(1)

(1)

Equity in earnings of unconsolidated joint ventures

289 

- 

289 

 

243 

- 

243 

Adjustment for depreciation and amortization –

        unconsolidated joint ventures

179 

- 

179 

 

161 

- 

161 

Adjustment for depreciation and amortization –         discontinued  operations

169 

- 

169 

 

147  

- 

147 

Adjustment for minority interest – 

        real estate partnerships

(2,835)

- 

(2,835)

 

(1,268)

- 

(1,268)

Income from discontinued operations

140 

- 

140 

 

219 

- 

219 

Dividends on preferred stock

- 

(1,200)

(1,200)

 

- 

(1,200)

(1,200)

Funds from operations available 

        to common stockholders

21,694 

(6,111)

15,583 

 

20,185 

(5,359)

14,826 

 

 

 

 

 

 

 

 

Depreciation and amortization

(23,269)

- 

(23,269)

 

(19,022)

- 

(19,022)

Depreciation and amortization –

        unconsolidated joint ventures

(179)

- 

(179)

 

(161)

- 

(161)

Depreciation and amortization –         

        discontinued  operations

(169)

- 

(169)

 

(147)

- 

(147)

Depreciation and amortization - minority

        interest - real estate partnerships

4,898 

- 

4,898 

 

2,284 

- 

2,284 

Gain on sale of real estate

 

- 

 

- 

 

-

 

 

20,260 

 

- 

 

20,260 

Net income (loss) available to common

        stockholders

 $

2,975 

 $

(6,111)

 $

(3,136)

 

 $

23,399 

 $

(5,359)

 $

18,040 

 

 

 

 

 

 

 

 

Capital expenditures (d)

 $

9,563 

 $

- 

 $

9,563 

 

 $

18,628 

 $

- 

 $

18,628 

 

 

 

 

 

(a)    Included in property operating revenues are  rental revenues, customer reimbursements, parking income and other income.

 

 

 

 

 

 

 

 

(b)   Included in property operating expenses are  real estate taxes, insurance, contract services, repairs and maintenance and other  property operating expenses.

 

 

 

 

 

 

 

 

(c)    Interest expense for office properties  represents interest expense on property secured mortgage debt and interest on  subsidiary redeemable preferred         membership interests.  It does not  include interest expense on the unsecured lines of credit, which is included  in “Unallocated and Other”.

 

(d)   Capital expenditures include building  improvements, tenant improvements and deferred leasing costs.

 

Page  21 of 39

 

 

 

 

 

 

The following is a reconciliation of FFOand net income available to common stockholders for office properties and totalconsolidated entities for the six months ended June 30, 2008 and 2007.  Amountspresented as “Unallocated and Other” represent primarily income and expenseassociated with providing management services, corporate general andadministration expense, interest expense on unsecured lines of credit andpreferred dividends.

** **

 

**As of or for the six months ended**

**June 30, 2008**

 

**As of or for the six months ended**

**June 30, 2007**

 

**Office**

**Unallocated**

** **

 

**Office**

**Unallocated**

** **

 

**Properties**

**and Other**

**Consolidated**

 

**Properties**

**and Other**

**Consolidated**

 

 (in thousands) 

 

 (in thousands) 

 

 

 

 

 

 

 

 

Property operating revenues (a)

 $

134,136 

 $

- 

 $

134,136 

 

 $

121,500 

 $

- 

 $

121,500 

Property operating expenses (b)

(64,108)

- 

(64,108)

 

(56,482)

- 

(56,482)

Property net operating income from 

        continuing operations

70,028 

- 

70,028 

 

65,018 

- 

65,018 

 

 

 

 

 

 

 

 

Management company income

- 

907 

907 

 

- 

764 

764 

Interest and other income

- 

674 

674 

 

- 

218 

218 

Interest expense (c)

(24,521)

(6,352)

(30,873)

 

(21,775)

(5,361)

(27,136)

Management company expenses

- 

(921)

(921)

 

- 

(544)

(544)

General and administrative expenses

- 

(4,386)

(4,386)

 

- 

(3,245)

(3,245)

Other expense

- 

(2)

(2)

 

- 

(2)

(2)

Equity in earnings of unconsolidated joint ventures

547 

- 

547 

 

548 

- 

548 

Adjustment for depreciation and amortization –

        unconsolidated joint ventures

355 

- 

355 

 

322 

- 

322 

Adjustment for depreciation and amortization –         discontinued  operations

344 

- 

344 

 

301 

- 

301 

Adjustment for minority interest – 

        real estate partnerships

(4,558)

- 

(4,558)

 

(3,188)

- 

(3,188)

Income from discontinued operations

207 

- 

207 

 

329 

- 

329 

Gain on non depreciable assets

- 

- 

- 

 

50 

- 

50 

Dividends on preferred stock

- 

(2,400)

(2,400)

 

- 

(2,400)

(2,400)

Funds from operations available 

        to common stockholders

42,402 

(12,480)

29,922 

 

41,605 

(10,570)

31,035 

 

 

 

 

 

 

 

 

Depreciation and amortization

(45,262)

- 

(45,262)

 

(38,079)

- 

(38,079)

Depreciation and amortization –

        unconsolidated joint ventures

(355)

- 

(355)

 

(322)

- 

(322)

Depreciation and amortization -         discontinued  operations

(344)

- 

(344)

 

(301)

- 

(301)

Depreciation and amortization - minority

        interest - real estate partnerships

9,108 

- 

9,108 

 

4,675 

- 

4,675 

Gain on sale of real estate

 

- 

 

- 

 

- 

 

 

20,260 

 

- 

 

20,260 

Net income (loss) available to common

        stockholders

 $

5,549 

 $

(12,480)

 $

(6,931)

 

 $

27,838 

 $

(10,570)

 $

17,268 

 

 

 

 

 

 

 

 

Total assets

 $

1,737,518 

 $

15,154 

 $

1,752,672 

 

 $

1,515,144 

 $

6,625 

 $

1,521,769 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office and parking properties

 $

1,514,559 

 $

- 

 $

1,514,559 

 

 $

1,313,142 

 $

- 

 $

1,313,142 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment in unconsolidated joint ventures

 $

11,091 

 $

- 

 $

11,091 

 

 $

11,066 

 $

- 

 $

11,066 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures (d)

 $

19,229 

 $

- 

 $

19,229 

 

 $

24,992 

 $

- 

 $

24,992 

 

 

 

 

 

(a)    Included in property operating revenues are  rental revenues, customer reimbursements, parking income and other income.

 

 

 

 

 

 

 

 

(b)   Included in property operating expenses are  real estate taxes, insurance, contract services, repairs and maintenance and other  property operating expenses.

 

 

 

 

 

 

 

 

(c)    Interest expense for office properties  represents interest expense on property secured mortgage debt and interest on  subsidiary redeemable preferred         membership interests.  It does not  include interest expense on the unsecured lines of credit, which is included  in “Unallocated and Other”.

 

(d)   Capital expenditures include building  improvements, tenant improvements and deferred leasing costs.

 

Page  22 of 39

 

 

 

 

 

 

**(13)         SubsequentEvents**

 

As discussed in Note 5 – Office Property Held forSale, on July 15, 2008, the Company sold Town Point Center to an unrelatedthird party for a gross sales price of $12.8 million and will record a gain onthe sale of approximately $1.6 million in the third quarter of 2008.  Inaccordance with generally accepted accounting principles, all current and priorperiod income from Town Point Center has been classified as discontinuedoperations. 

 

                Subsequentto June 30, 2008, the Company executed respective purchase and sale agreements,with $3.0 million in combined non-refundable deposits, on Capitol Center inColumbia, South Carolina, and Wachovia Plaza in St. Petersburg, Florida.  Grosssales proceeds are estimated to be $73.5 million with estimated gains to berecorded of approximately $21.0 million.  The net proceeds from the sales willbe used to reduce the Company’s line of credit and to retire the existingmortgage debt on Capitol Center of $18.2 million.  The Company will incur adebt prepayment penalty of approximately $2.2 million in connection with theearly extinguishment of the Capitol Center mortgage.  The asset sales aresubject to customary final closing requirements and due diligencedocumentation, and the Company expects that these sales will be completed latein the third quarter of 2008.

** **

**Item2.  Management’s Discussion and Analysis of Financial Condition andResults of Operations.**

 **Overview**

 

Parkway is a self-administered and self-managed REITspecializing in the operation, leasing, acquisition and ownership of officeproperties.  The Company performs these services for its own account and forother institutional investors through co-ownership structures such asdiscretionary funds and/or partnerships.  The Company is geographically focusedon the Southeastern and Southwestern United States and Chicago.  Currently, Parkwayowns or has an interest in 68 office properties located in 11 states with anaggregate of approximately 14.0 million square feet of leasable space.  Includedin the portfolio are one discretionary fund and several partnershiparrangements which encompass 21 properties totaling 3.8 million square feet,representing 27% of the portfolio.  With the discretionary fund and/orpartnerships, the Company receives fees for asset management, propertymanagement, leasing and construction management services and potentiallyreceives incentive fees upon sale if certain investment targets are achieved. Increasing the number of co-investments, and consequently the related feeincome, is part of the Company’s strategy to transform itself to anoperator-owner versus an owner-operator.   The strategy highlights theCompany’s strength in providing excellent service in the operation andacquisition of office properties for investment clients in addition to itsdirect ownership of real estate assets. Fee-based real estate services areoffered through the Company’s wholly owned subsidiary, Parkway Realty ServicesLLC, which also manages and/or leases approximately 1.8 million square feet forthird party owners as of July 1, 2008. A significant phase of thetransformation to an operator-owner is currently under way through theCompany’s GEAR UP Plan, which started January 1, 2006 and ends December 31,2008.  The Company generates revenue primarily by leasing office space to itscustomers and providing management and leasing services to third party officeproperty owners (including joint venture interests).  The primary driversbehind Parkway’s revenues are occupancy, rental rates and customer retention.  

*Occupancy*.  Parkway’s revenues are dependent on the occupancy of itsoffice buildings.  As of July 1, 2008, occupancy of Parkway’s office portfoliowas 91.3% compared to 90.3% as of April 1, 2008 and 91.6% as of July 1, 2007. Not included in the July 1, 2008 occupancy rate are 34 signed leases totaling 117,000square feet, which commence during the third and fourth quarters of 2008 andwill raise Parkway’s percentage leased to 92.1%.  To combat rising vacancy,Parkway utilizes innovative approaches to produce new leases.  These includethe Broker Bill of Rights, a short-form service agreement and customer advocacyprograms which are models in the industry and have helped the Company maintainoccupancy around 90% during a time when the national occupancy rate isapproximately 86%.

*****Rental Rates.*  An increase in vacancy rates has the effect ofreducing market rental rates and vice versa.  Parkway’s leases typically havethree to seven year terms.  As leases expire, the Company replaces the existingleases with new leases at the current market rental rate.  As of July 1, 2008,Parkway had $1.34 per square foot in rental rate embedded growth in its officeproperty leases.  Embedded growth is defined as the difference between theweighted average in place cash rents and the weighted average market rentalrate.   

 

Page  23 of 39

 

 

 

 

 

 

*CustomerRetention*.  Keeping existingcustomers is important as high customer retention leads to increased occupancy,less downtime between leases, and reduced leasing costs.  Parkway estimatesthat it costs five to six times more to replace an existing customer with a newone than to retain the customer.  In making this estimate, Parkway takes intoaccount the sum of revenue lost during downtime on the space plus leasingcosts, which rise as market vacancies increase.  Therefore, Parkway focuses agreat deal of energy on customer retention.  Parkway's operating philosophy isbased on the premise that it is in the customer retention business.  Parkwayseeks to retain its customers by continually focusing on operations at itsoffice properties.  The Company believes in providing superior customerservice; hiring, training, retaining and empowering each employee; and creatingan environment of open communication both internally and externally withcustomers and stockholders.  Over the past ten years, Parkway maintained anaverage 73% customer retention rate.  Parkway’s customer retention for the threemonths and six months ended June 30, 2008 was 87.1% and 73.7%, respectively,compared to 81.0% and 69.2% for the three months and six months ended June 30,2007, respectively.

*Strategic Planning*.   Parkway is a focused office REIT with ahands-on, service-oriented approach, a disciplined asset allocation program anda willingness to recycle assets.  However, we see the future transformationtaking Parkway from being an owner-operator to being an operator-owner.  OnJanuary 1, 2006, the Company initiated a new three-year operating plan referredto as the “GEAR UP” Plan that will serve as the spring board to transformParkway from being first an owner of real estate and secondarily an operator ofreal estate for others to being first an operator of real estate for othersthat also owns an interest in the real estate.  The goals of the GEAR UP Planare as follows:

 

•     ***Great People***.  Great customer service starts with hiring greatpeople, training them well and retaining them.  It will take great people toaccomplish the ambitious goals of the Plan.

 

•     ***Equity Opportunities***.  Over the last several years management has createda broad array of equity opportunities for Parkway.  On the private equity sidethis includes the use of discretionary funds, such as the funds with Ohio PERSand the Teacher Retirement System of Texas, and partnerships.  The judicioususe of private equity provides a greater return on equity to the publicshareholders. Parkway intends to contribute assets from its balance sheet toform new joint ventures and expects these subsequent ventures to be similar todiscretionary funds in their duration and economics. On the public equity side,this includes the judicious use of common equity and preferred equity to managethe balance sheet and growth.  

 

•      ***Asset Recycling***. The Company has demonstrated its willingness in thepast to sell assets when management believed the time was right.  At the startof the GEAR UP Plan, Parkway identified 25 buildings in twelve markets,totaling approximately 5 million rentable square feet to be part of the assetrecycling program.  Most of these properties are smaller assets or located insmaller markets that do not fit with the Company strategy of owning largerassets in institutional markets.  The dispositions that are planned will helpalign the Company’s portfolio with its current acquisition criteria, whichfocuses on larger properties in institutional markets.  In most cases, Parkwaywill seek to keep a 10% to 30% joint venture interest in the properties beingrecycled and retain management and leasing agreements.  This is a fluid list ofassets based on the Company’s evaluation of specific market conditions andreview of the portfolio.  The other side of Asset Recycling is the reinvestmentof proceeds from dispositions into other assets, either owned in the fee-simpleformat or owned jointly with a partner.

 

                Thesetwo goals, ***Equity Opportunities*** and ***Asset Recycling***,are what combine to transform Parkway from being an owner-operator to being anoperator-owner.  Management strongly believes that these actions will result inParkway better leveraging its core strength of operating office properties andwill be advantageous for the Company’s shareholders over the long term.  Sowhether we are in  an economy characterized by growth or recession, we believe purchasingassets with a good partner and leveraging our operating expertise throughearning recurring fees allows us to increase our core portfolio in larger andmore institutional markets and increase our earnings potential from theservices provided.

 

•     ***Retain Customers***.  Customer retention remains the cornerstone of theCompany’s business and is why partners choose to partner with Parkway.  Thegoal is a customer retention rate of 70% to 75%.  The average customerretention rate since the inception of the GEAR UP Plan on January 1, 2006 is 71%,and we anticipate that the annual customer retention rate for 2008 will be inthe range of 70% to 75%.

 

Page  24 of 39

 

 

 

 

 

 

 

•      ***Uncompromising Focus onOperations***.  Parkway isreaffirming its commitment to do that which it does best, and that is tooperate office properties for maximum returns.

 

•     ***Performance***.  In the planning process, management first decidedwhat actions to take strategically over the three years of the GEAR UP Plan andsecondly, modeled the economic impact of these actions.  Given the largecomponent of Asset Recycling in the Plan, management selected a financialmetric that would be most appropriate to measure the success of the Plan.  This led to the adoption of Cumulative Adjusted Funds Available forDistribution (“Cumulative Adjusted FAD”) as the metric for the GEAR UP Plan,with a target of $7.18 per share cumulative over three years.  Actual AdjustedFAD for 2006 and 2007 exceeded the amount projected by the Company at thebeginning of the Plan.   Management set an internal target for fixed chargecoverage before principal payments of 2.5 times as a measure of leverage forthe plan.  While not a requirement in the plan, this self-imposed target servesto prevent the performance goals being met by over-leveraging the Company.

 

For the GEAR UP Plan, Parkway is not abandoning Fundsfrom Operations, but rather carrying it a step further to includeaccountability for capital items and removing the accounting adjustments whichare not directly influenced by the operations of its properties.  Management believes an Adjusted FAD goal provides an effective alignment withthe shareholders by focusing the team on maximizing income from operationswhile being mindful of capital expenses and ultimately the funds available tocover the dividend.   Cumulative Adjusted FAD is calculated as thesum of Adjusted FAD for each of the three years of the plan.    Theadjustments that will be made to FAD reported each quarter principally includecharges for impairment of value and expenses related to the earlyextinguishment of debt.  

 

                Parkwayhas made progress on its ***Asset Recycling*** and ***EquityOpportunities*** goals in 2006, 2007 and 2008 as follows:

 

•      *Dispositions*.   Parkway sold ten office properties for a grosssales price totaling $153.8 million and recorded a total gain on the sales forfinancial reporting purposes in the amount of $43.1 million.

 

•      *Fund I Acquisitions*.  The Ohio PERS Fund I and Parkway purchased elevenoffice properties at an aggregate contract purchase price of $465.9 million,which is comprised of investments by the fund totaling $444.3 million plus anadditional investment by Parkway of $21.6 million.  The Ohio PERS Fund I wasfully invested as of February 15, 2008.

* *

•    *Fund II Formation. *On May 14, 2008, Parkway entered into a $750 milliondiscretionary fund with the Teacher Retirement System of Texas (“TRS”) for thepurpose of acquiring office properties.  TRS is a 70% investor and Parkway is a30% investor.    

 

•     *Fee Simple Purchases*.  Parkway purchased One Illinois Center in Chicago, Illinois at a contract purchase price of $198 million.

 

•    *Other Purchases*.  Parkway purchased an additional interest in MooreBuilding Associates, LP, which owns the Toyota Center in Memphis, Tennessee, for $1.4 million raising Parkway’s total ownership interest to 75.025%.

 

•     *Equity Offering*.  On December 18, 2006, the Company sold 600,000shares of common stock to Banc of America Securities LLC at a gross offeringprice of $50.25 per share and a net price of $49.37 per share. The Company usedthe net proceeds of approximately $29.6 million to repay indebtednessoutstanding under a $19.3 million mezzanine loan incurred in connection withthe purchase of One Illinois Center and to make additional investments inoffice properties.

* *

•     *Stock Buyback*.  On August 3, 2007, the Board of Directorsauthorized the repurchase of up to 1.7 million shares of Parkway’s outstandingcommon stock through July 30, 2008.  During 2007, the Company purchased approximately687,000 shares of Parkway common stock under this authorization for $29.1 million,which equates to an average price of $42.36 per share.

 

Page  25 of 39

 

 

 

 

 

 

*DiscretionaryFunds*.  On July 6, 2005, Parkway,through affiliated entities, entered into a limited partnership agreementforming a $500 million discretionary fund with Ohio PERS (“Ohio PERS Fund I”) forthe purpose of acquiring high-quality multi-tenant office properties.  OhioPERS is a 75% investor and Parkway is a 25% investor in the fund, which iscapitalized with approximately $200 million of equity capital and $300 millionof non-recourse, fixed-rate first mortgage debt.  As of February 15, 2008, the OhioPERS Fund I was fully invested.

 

                TheOhio PERS Fund I targeted properties with an anticipated leveraged internalrate of return of greater than 11%.  Parkway serves as the general partner of thefund and provides asset management, property management, leasing andconstruction management services to the fund, for which it is paid market-basedfees.  After each partner has received a 10% annual cumulative preferred returnand a return of invested capital, 20% of the excess cash flow will be paid tothe general partner and 80% will be paid to the limited partners.    Throughits general partner and limited partner ownership interests, Parkway mayreceive a distribution of the cash flow equivalent to 40%.  The term of OhioPERS Fund I will be seven years until February 2015, with provisions to extendthe term for two additional one-year periods. 

 

On May 14, 2008, Parkway, through affiliated entities,entered into a limited partnership agreement forming a $750 milliondiscretionary fund, known as Parkway Properties Office Fund II, L.P., (“TexasTeachers Fund II”) with the Teacher Retirement System of Texas (“TRS”) for thepurpose of acquiring high-quality multi-tenant office properties.  TRS is a 70%investor and Parkway is a 30% investor in the fund, which will be capitalizedwith approximately $375 million of equity capital and $375 million ofnon-recourse, fixed-rate first mortgage debt.  Parkway’s share of the equitycontribution for the fund will be $112.5 million and will be funded withproceeds from sales, line of credit advances and/or sales of securities.  TheTexas Teachers Fund II targets acquisitions in the core markets of Houston,Austin, San Antonio, Chicago, Atlanta, Phoenix, Charlotte, Memphis, Nashville,Jacksonville, Orlando, Tampa/St. Petersburg,  and other growth markets to bedetermined by Parkway.

 

The Texas Teachers Fund II targets properties with ananticipated leveraged internal rate of return of greater than 10%.  Parkwayserves as the general partner of the fund and provides asset management,property management, leasing and construction management services to the fund,for which it will be paid market-based fees.  Cash will be distributed pro ratato each partner until a 9% annual cumulative preferred return is received andinvested capital is returned.  Thereafter, 56% will be distributed to TRS and44% to Parkway.  Parkway has four years from the inception date of TexasTeachers Fund II to identify and acquire properties (the “Investment Period”),with funds contributed as needed to close acquisitions.  Parkway willexclusively represent the fund in making acquisitions within the target marketsand acquisitions with certain predefined criteria.  Parkway will not beprohibited from making fee-simple or joint venture acquisitions in marketsoutside of the target markets, acquiring properties within the target marketsthat do not meet Texas Teachers Fund II’s specific criteria or selling or jointventuring currently owned properties.  The term of Texas Teachers Fund II willbe seven years from the expiration of the Investment Period, with provisions toextend the term for two additional one-year periods at the discretion ofParkway.

** **

**FinancialCondition**

***Comments are for the balance sheet dated June 30, 2008 compared to thebalance sheet dated December 31, 2007.***

 

*                Officeand Parking Properties.*  In 2008,Parkway continued the application of its strategy of operating and acquiringoffice properties, joint venturing interests in office assets, as well asliquidating non-core assets and office assets that no longer meet the Company’sinvestment criteria and/or the Company has determined value will be maximizedby selling.  During the six months ended June 30, 2008, total assets increased $216.9million or 14.1% and office and parking properties (before depreciation)increased $201.4 million or 13.0%.

 

Page  26 of 39

 

 

 

 

 

 

                *Purchases,Improvements and Development.* Parkway’s investment in office and parkingproperties increased $200.0 million net of depreciation to a carrying amount of$1.5 billion at June 30, 2008, and consisted of 63 office and parkingproperties and one office property development.  The primary reason for the increasein office and parking properties relates to the net effect of the purchase of officeproperties, building improvements, development costs and depreciation recordedduring the year.

 

                Duringthe six months ended June 30, 2008, the Company incurred $14.5 million indevelopment costs for the construction of The Pinnacle at Jackson Place, whichis a 194,000 square foot Class A+ office building development adjacent to theCompany’s headquarters building in Jackson, Mississippi.  The estimated cost ofthe development is $48.5 million with expected completion in the fall of 2008. The Company has received commitments to lease approximately 71% of the newoffice space from four major customers.  Parkway is considering a joint venturestructure for the development whereby Parkway will retain an ownership interestof approximately 20%.  The development is designed to utilize benefitsavailable under the Gulf Opportunity Zone Act for new developments in areasaffected by Hurricane Katrina.

                

                OnJanuary 18, 2008, Ohio PERS Fund I, of which Parkway owns 25%, purchasedGateway Center, a 228,000 square foot office property in the central businessdistrict of Orlando, Florida for a purchase price of $55.0 million.  The fundexpects to spend an additional $2.8 million for closing costs, buildingimprovements, leasing costs and tenant improvements during the first two yearsof ownership.  The purchase was funded with a $33.0 million first mortgageplacement by the fund and with equity contributions from the partners.  

 

                OnJanuary 31, 2008, the Company purchased Desert Ridge Corporate Center, a293,000 square foot office project in Phoenix, Arizona for a purchase price of$81.6 million on behalf of Ohio PERS Fund I.  An additional $2.3 million isexpected to be spent for closing costs, building improvements, leasing costsand tenant improvements during the first two years of ownership.  The purchasewas funded with a $49.2 million first mortgage placement and with equitycontributions from the partners.  Due to Ohio PERS Fund I’s $80.0 million limiton a single investment, Parkway’s effective ownership interest in this asset is26.5%.   

 

                OnFebruary 15, 2008, the Company purchased Citicorp Plaza, a 600,000 square footoffice project in Chicago, Illinois for a purchase price of $100.0 million onbehalf of Ohio PERS Fund I.  An additional $9.2 million is expected to be spentfor closing costs, building improvements, leasing costs and tenant improvementsduring the first two years of ownership.  The purchase was funded with a $60.0million first mortgage placement and with equity contributions from thepartners.  Due to Ohio PERS Fund I’s $80.0 million limit on a singleinvestment, Parkway’s effective ownership interest in this asset is 40%.

 

                Duringthe six months ended June 30, 2008, the Company capitalized buildingimprovements and additional purchase expenses of $15.3 million and recordeddepreciation expense of $33.3 million related to its office and parkingproperties.

 

*Office Property Held for Sale. *During the quarter ended June 30, 2008, Parkwayclassified Town Point Center, a 131,000 square foot office building in Norfolk,Virginia, as held for sale.    On July 15, 2008, the Company sold Town PointCenter to an unrelated third party for a gross sales price of $12.8 million andwill record a gain on the sale of approximately $1.6 million during the thirdquarter of 2008.  In accordance with generally accepted accounting principles,all current and prior period income from Town Point Center has been classifiedas discontinued operations. 

 

*Intangible Assets, Net.* For the six months ended June 30, 2008, intangible assets net of relatedamortization increased $20.7 million or 29.3% and was primarily due to the neteffect of the purchase of three office investments during the period andamortization of the existing intangible assets for the period.

 

*Notes Payable to Banks. *Notes payable to banks increased $26.5 million or 12.5%during the six months ended June 30, 2008. At June 30, 2008, notes payable to banks totaled $238.9 million and the net increaseis primarily attributable to the advances under the line of credit to purchaseand develop real estate and make improvements to office properties offset byproceeds received from refinancing the mortgage secured by Capital City Plazain Atlanta, Georgia.

 

Page  27 of 39

 

 

 

 

 

 

                OnMay 7, 2008, the Company entered into an interest rate swap agreement withRegions Bank.  The interest rate swap is for a $100 million notional amount andfixes the 30-day LIBOR interest rate at 3.635%, which equates to a totalinterest rate of 4.935% for the period January 1, 2009 through March 31, 2011. The swap serves as a hedge on the variable interest rates on a portion of the borrowingsunder the Company’s line of credit.

 

*                MortgageNotes Payable. *During the six monthsended June 30, 2008, mortgage notes payable increased $161.2 million or 22.6% andis due to the net effect of scheduled principal payments on mortgages of $7.3million, the prepayment of existing mortgage debt of $44.9 million, theplacement of mortgage debt of $202.2 million and advances on mortgage debt of $11.2million to fund The Pinnacle development.

 

                OnFebruary 1, 2008, the Company paid off the mortgage notes payable secured bythe 400 North Belt and Woodbranch buildings in Houston, Texas, with a totalprincipal balance of $3.5 million with advances under bank lines of credit. The mortgages had an interest rate of 8.25% and were scheduled to mature onAugust 1, 2011.  The Company recognized a total of $401,000 in expenseassociated with the prepayment of these mortgages.  

 

                Inconnection with the Ohio PERS Fund I investments during the first quarter of2008 discussed under “Financial Condition – Office and Parking Properties –Purchases, Improvements and Development”,  total non–recourse first mortgagedebt was placed in the amount of $142.2 million at a weighted average interestrate of 5.7%.  The portion of mortgage debt attributable to Ohio PERS Fund I was$129.2 million, and $13.0 million was attributable to Parkway.  The mortgagesare secured by the respective properties, have one to three year interest onlyperiods and mature in 2016.

 

On April 4, 2008, the Company entered into an interestrate swap agreement with US Bank.  The interest rate swap is for a $23.5million notional amount and fixes the 30-day LIBOR interest rate at 4.05%,which equates to a total interest rate of 5.55%, for the period January 1, 2009through December 1, 2014.  The swap serves as a hedge of the variable interestrates on a portion of the mortgage debt placed on the Pinnacle development.

 

                OnMay 2, 2008, the Company completed a $60.0 million recourse mortgage loanrelated to the refinance of a $41.4 million mortgage that was scheduled tomature in September 2008.  The loan is secured by the Company’s Capital CityPlaza building in Atlanta, Georgia.  The interest rate on the loan is avariable rate based on LIBOR plus 165 basis points.  The loan term is for twoyears, with a one-year extension option at the Company’s discretion. The excessloan proceeds of approximately $18.4 million were used to pay down theCompany’s line of credit.  The Company recorded a gain on the prepayment ofapproximately $388,000 associated with the write off of the debt premium in thesecond quarter of 2008.  The mortgage represented the Company’s onlyoutstanding maturity in 2008.  

 

                TheCompany expects to continue seeking fixed-rate, non-recourse mortgage financingwith maturities from five to ten years typically amortizing over 25 to 30 yearson select office building investments as additional capital is needed.  TheCompany targets a debt to total market capitalization rate at a percentage inthe range of 45% to 50%. This rate may vary at times pending acquisitions,sales and/or equity offerings.  In addition, volatility in the price of theCompany’s common stock may affect the debt to total market capitalizationratio.  However, over time the Company plans to maintain a percentage in therange of 45% to 50%.  The Company calculates this ratio by including itsproportionate share of any debt on assets held in funds and partnerships.  Inaddition to this debt ratio, the Company monitors interest, fixed charge andmodified fixed charge coverage ratios.  The interest coverage ratio is computedby comparing the cash interest accrued to earnings before interest, taxes,depreciation and amortization ("EBITDA"). The fixed charge coverageratio is computed by comparing the cash interest accrued, principal paymentsmade on mortgage loans and preferred dividends paid to EBITDA.  The modifiedfixed charge coverage ratio is computed by comparing cash interest accrued andpreferred dividends paid to EBITDA. In connection with the GEAR UP Plan,management set an internal target for the modified fixed charge coverage ratioof 2.5 times as a measure of leverage for the plan.  While not a requirement ofthe plan, this self-imposed target serves to prevent the performance goalsbeing met by over-leveraging the Company.  Management believes the debt to marketcapitalization, interest coverage, fixed charge coverage and modified fixedcharge coverage ratios provide useful information on total debt levels as wellas the Company’s ability to cover interest, principal and/or preferred dividendpayments with current income. As of June 30, 2008, Parkway’s debt to totalmarket capitalization rate was 61.3%, which is higher than the Company’s targetrange of 45% to 50%.  The increase in the rate was due primarily to a stockprice decrease.

 

Page  28 of 39

 

 

 

 

 

 

                Thecomputation of the interest, fixed charge and modified fixed charge coverageratios and the reconciliation of net income to EBITDA is as follows for the sixmonths ended June 30, 2008 and 2007 (in thousands):

 

 

**Six Months Ended**

 

**June 30**

 

**2008**

** **

**2007**

**Net  Income (Loss)**

$     (4,531)

 

$     19,668 

**Adjustments  to Net Income (Loss):**

 

 

 

        Interest  expense

29,988 

 

26,183 

        Amortization  of financing costs

872 

 

583 

        Prepayment  expense – early extinguishment of debt

13 

 

370 

        Depreciation  and amortization

45,606 

 

38,380 

        Amortization  of share based compensation

918 

 

727 

        Gain  on real estate and non depreciable assets

- 

 

(20,310)

        Tax  expense

- 

 

105 

        EBITDA  adjustments - unconsolidated joint ventures

614 

 

583 

        EBITDA  adjustments - minority interest in real estate partnerships

(14,926)

 

(7,470)

**EBITDA  (1)**

$     58,554 

 

$    58,819 

** **

 

 

 

**Interest  Coverage Ratio:**

 

 

 

EBITDA

$    58,554 

 

$    58,819 

Interest  expense:

 

 

 

       Interest  expense

$    29,988 

 

$    26,183 

       Capitalized  interest

343 

 

37 

       Interest  expense - unconsolidated joint ventures

254 

 

255 

       Interest  expense - minority interest in real estate partnerships

(5,689)

 

(2,723)

Total  interest expense

$    24,896 

 

$    23,752 

**Interest  Coverage Ratio**

2.35 

 

2.48 

** **

 

 

 

**Fixed  Charge Coverage Ratio:**

 

 

 

EBITDA

$    58,554 

 

$    58,819 

Fixed  charges:

 

 

 

       Interest  expense

$    24,896 

 

$    23,752 

       Preferred  dividends

2,400 

 

2,400 

       Principal  payments (excluding early extinguishment of debt)

7,250 

 

8,059 

       Principal  payments - unconsolidated joint ventures

26 

 

24 

       Principal  payments - minority interest in real estate partnerships

(172)

 

(146)

Total  fixed charges

$    34,400 

 

$    34,089 

**Fixed  Charge Coverage Ratio**

1.70 

 

1.73 

** **

 

 

 

**Modified  Fixed Charge Coverage Ratio:**

 

 

 

EBITDA

$    58,554 

 

$    58,819 

Modified  fixed charges:

 

 

 

       Interest  expense

$    24,896 

 

$    23,752 

       Preferred  dividends

2,400 

 

2,400 

Total  modified fixed charges

$    27,296 

 

$    26,152 

**Modified  Fixed Charge Coverage Ratio**

2.15 

 

2.25 

 

(1)           Parkwaydefines EBITDA, a non-GAAP financial measure, as net income before interest,income taxes, depreciation, amortization, losses on early extinguishment ofdebt and other gains and losses.  EBITDA, as calculated by us, is notcomparable to EBITDA reported by other REITs that do not define EBITDA exactlyas we do.

 

Page  29 of 39

 

 

 

 

 

 

                TheCompany believes that EBITDA helps investors and Parkway’s management analyzethe Company’s ability to service debt and pay cash distributions.  However, thematerial limitations associated with using EBITDA as a non-GAAP financialmeasure compared to cash flows provided by operating, investing and financingactivities are that EBITDA does not reflect the Company’s historical cash expendituresor future cash requirements for working capital, capital expenditures or thecash required to make interest and principal payments on the Company’soutstanding debt.  Although EBITDA has limitations as an analytical tool, theCompany compensates for the limitations by using EBITDA only to supplement GAAPfinancial measures.  Additionally, the Company believes that investors shouldconsider EBITDA in conjunction with net income and the other required GAAPmeasures of its performance and liquidity to improve their understanding ofParkway’s operating results and liquidity.  

 

                Parkwayviews EBITDA primarily as a liquidity measure and, as such, the GAAP financialmeasure most directly comparable to it is cash flows provided by operatingactivities.  Because EBITDA is not a measure of financial performancecalculated in accordance with GAAP, it should not be considered in isolation oras a substitute for operating income, net income, cash flows provided byoperating, investing and financing activities prepared in accordance withGAAP.  The following table reconciles EBITDA to cash flows provided byoperating activities for the six months ended June 30, 2008 and 2007 (inthousands):

 

 

**Six Months Ended**

 

**June 30**

 

**2008**

 

**2007**

 

 

 

 

EBITDA

$    58,554 

 

$    58,819 

 

 

 

 

Amortization  of above market leases

247 

 

698 

Amortization  of mortgage loan discount

(249)

 

- 

Operating  distributions from unconsolidated joint ventures

661 

 

670 

Interest  expense

(29,988)

 

(26,183)

Prepayment  expense early extinguishment of debt

(13)

 

(370)

Tax  expense

- 

 

(105)

Change  in deferred leasing costs

(4,694)

 

(1,780)

Change  in receivables and other assets

9,894 

 

(2,434)

Change  in accounts payable and other liabilities

(4,833)

 

1,171 

Adjustments  for minority interests

10,376 

 

5,983 

Adjustments  for unconsolidated joint ventures

(1,161)

 

(1,131)

Cash  flows provided by operating activities

$    38,794 

 

$    35,338 

* *

                *MinorityInterest – Real Estate Partnerships.* During the six months ended June 30,2008, minority interest associated with real estate partnerships increased $54.7million or 68.0%.  The increase is attributable to the minority interestpartner’s equity contribution toward the three Ohio PERS Fund I office investmentsduring the first quarter of 2008 discussed under “Financial Condition – Officeand Parking Properties – Purchases, Improvements and Development”.

 

*                Stockholders’Equity.*Stockholders’ equity decreased$23.5 million or 5.3% during the six months ended June 30, 2008, as a result ofthe following (in thousands):

 

 

**Increase**

 

**(Decrease)**

Net  loss

 $

(4,531)

Change  in market value of interest rate swaps

829 

Comprehensive  loss

(3,702)

Common  stock dividends declared

(19,813)

Preferred  stock dividends declared

(2,400)

Exercise  of stock options

779 

Shares  issued in lieu of Directors fees

140 

Share  based compensation expense

918 

Shares  distributed from deferred compensation plan

626 

 

 $

(23,452)

 

                OnAugust 3, 2007, the Board of Directors authorized the repurchase of up to 1.7million shares of Parkway’s outstanding common stock through July 30, 2008. The shares may be purchased in the open market or in privately negotiatedtransactions, and at times and in amounts that the Company deems appropriate.  Noshares were purchased under this authorization during the six months ended June30, 2008.

 

Page  30 of 39

 

 

 

 

 

 

**Resultsof Operations**

***Comments are for the three months and six months ended June 30, 2008 comparedto the three months and six months ended June 30, 2007***.

** **

                Netloss available to common stockholders for the three months ended June 30, 2008 was$3.1 million ($0.21 per basic common share) as compared to net income availableto common stockholders of $18.0 million ($1.15 per basic common share) for thethree months ended June 30, 2007.  Net loss available to common stockholdersfor the six months ended June 30, 2008 was $6.9 million ($0.46 per basic commonshare) as compared to net income available to common stockholders of $17.3million ($1.10 per basic common share) for the six months ended June 30, 2007. The primary reason for the increase in net loss is due to net gains on the saleof real estate of $20.3 during the three months and six months ended June 30,2007.

 

*                Officeand Parking Properties. *The analysisbelow includes changes attributable to same store properties, acquisitions anddispositions of office properties.  Same store properties are those that theCompany owned for the current and prior year reporting periods, excludingproperties classified as discontinued operations.  At June 30, 2008, same storeproperties consisted of 57 properties comprising 11.6 million square feet. Properties acquired in 2007 and 2008 that do not meet the definition of samestore properties consisted of five properties with 1.4 million square feet.

 

                Thefollowing table represents revenue from office and parking properties for thethree months and six months ended June 30, 2008 and 2007 (in thousands):

 

 

**Three Months Ended June 30**

** **

**Six Months Ended June 30**

 

** **

** **

**Increase**

**%**

** **

** **

** **

**Increase**

**%**

 

**2008**

**2007**

**(Decrease)**

**Change**

** **

**2008**

**2007**

**(Decrease)**

**Change**

Revenue from office and  parking

    properties:

 

 

 

 

 

 

 

 

 

    Same  store properties

$60,381 

$58,239 

$2,142 

3.7%

 

$120,246 

$117,135 

$3,111 

2.7%

    Properties  acquired in 2007

1,614 

274 

1,340 

489.1%

 

3,446 

274 

3,172 

1,157.7%

    Properties  acquired in 2008

6,691 

- 

6,691 

0.0%

 

10,454 

- 

10,454 

0.0%

    Properties  disposed

(2)

2,010 

(2,012)

-100.1%

 

(10)

4,091 

(4,101)

-100.2%

Total  revenue from office and

 

 

 

 

 

 

 

 

 

    parking  properties

$68,684 

$60,523 

$8,161 

13.5%

 

$134,136 

$121,500 

$12,636 

10.4%

 

                Revenuefrom office and parking properties for same store properties increased $2.1million and $3.1 million for the three months and six months ended June 30,2008, respectively, compared to the same period for 2007.  The primary reasonfor the increase is due to an increase in same store average rental rates forsame store properties for the six months ended June 30, 2008 compared to June30, 2007.  Average same store rental rates increased 2.7% for the six monthsended June 30, 2008 compared to the same period of 2007.  Additionally, expensereimbursement income increased as a result of higher property operatingexpenses.

                Thefollowing table represents property operating expenses for the three months andsix months ended June 30, 2008 and 2007 (in thousands):

 

 

**Three Months Ended June 30**

** **

**Six Months Ended June 30**

 

** **

** **

**Increase**

**%**

** **

** **

** **

**Increase**

**%**

 

**2008**

**2007**

**(Decrease)**

**Change**

** **

**2008**

**2007**

**(Decrease)**

**Change**

Expenses from office and  parking 

    properties:

 

 

 

 

 

 

 

 

 

    Same  store properties

$28,608 

$27,410 

1,198 

4.4%

 

$57,369 

$54,343 

$3,026 

5.6%

    Properties  acquired in 2007

907 

110 

797 

724.5%

 

1,745 

110 

1,635 

1486.4%

    Properties  acquired in 2008

3,179 

- 

3,179 

0.0%

 

4,966 

- 

4,966 

0.0%

    Office  property development

5 

57 

(52)

-91.2%

 

7 

57 

(50)

-87.7%

    Properties  disposed

(16)

996 

(1,012)

-101.6%

 

21 

1,972 

(1,951)

-98.9%

Total expenses from office  and 

 

 

 

 

 

 

 

 

 

    parking  properties

$32,683 

$28,573 

$4,110 

14.4%

 

$64,108 

$56,482 

$7,626 

13.5%

        

                Propertyoperating expenses for same store properties increased $1.2 million and $3.0million for the three months and six months ended June 30, 2008, respectively, comparedto the same period of 2007.  The primary reason for the increase is due to increasedutilities and real estate taxes.

 

Page  31 of 39

 

 

 

 

 

 

                Depreciationand amortization expense attributable to office and parking propertiesincreased  $4.2 million and $7.2 million for the three months and six months endedJune 30, 2008, respectively, compared to the same period for 2007 and is due tothe additional depreciation associated with the acquisition of officeproperties and improvements to properties.

 

                *ShareBased Compensation Expense*.  Effective January 1, 2006, Parkway adopted FASBStatement No. 123R, Share-Based Payment (“FAS 123R”) using themodified-prospective transition method. In the past the Company had grantedstock options for a fixed number of shares to employees and directors with anexercise price equal to or above the fair value of the shares at the date ofgrant.  However, no stock options have been granted to employees since 2002 orto directors since 2003.  Since 2003, Parkway has elected to grant restrictedshares and deferred incentive share units instead of stock options.  Therefore,the adoption of FAS 123R has not had a material impact on income fromcontinuing operations, net income, cash flow from operations, cash flow fromfinancing activities or basic and diluted earnings per share.  

 

                Duringthe six months ended June 30, 2008, the Board of Directors approved the grantof 38,017 restricted shares to officers of the Company.  The shares were valuedat $1.2 million and 36,975 shares will vest four years from grant date and1,042 shares will vest subject to achievement of the cumulative goals of theGEAR UP plan, which will end on December 31, 2008.  Compensation expense willnot be recorded on the shares that vest based on performance conditions untilthe Company determines that it is probable that the goal will be achieved. Therefore, no expense has been recorded to date for the shares that vest basedon achievement of the cumulative goals of the GEAR UP Plan.

 

                Sharebased compensation expense of $918,000 and $727,000 was recognized for the sixmonths ended June 30, 2008 and 2007, respectively.  Total compensation expenserelated to nonvested awards subject to service conditions not yet recognizedwas $4.5 million as of June 30, 2008.  The weighted average period over whichthis expense is expected to be recognized is approximately 2.5 years.  Totalpotential compensation expense associated with shares that vest based onperformance conditions is $1.5 million as of June 30, 2008.

 

                *Generaland Administrative Expense*.  General and administrative expense increased $491,000and $1.1 million for the three months and six months ended June 30, 2008, respectively,compared to the same period of 2007 and is primarily attributable to increasedpersonnel costs and share based compensation expense.

 

*                InterestExpense. *Interest expense, includingamortization, increased $1.3 million  and $3.7 million for the three monthsended and six months ended June 30, 2008, compared to the same period of 2007and is comprised of the following (in thousands):

 

 

**Three Months Ended June 30**

** **

**Six Months Ended June 30**

 

** **

** **

**Increase**

**%**

** **

** **

** **

**Increase**

**%**

 

**2008**

**2007**

**(Decrease)**

**Change**

** **

**2008**

**2007**

**(Decrease)**

**Change**

Interest expenses:

 

 

 

 

 

 

 

 

 

     Mortgage  interest expense

$12,362 

$10,394 

$1,968 

18.9%

 

$23,942 

$20,644

$3,298 

16.0%

     Bank  line interest expense

2,952 

2,687 

265 

9.9%

 

6,046 

5,166

880 

17.0%

     Subsidiary  redeemable preferred

 

 

 

 

 

 

 

 

 

          membership  interest

- 

187 

(187)

-100.0%

 

- 

373

(373)

-100.0%

     Debt  prepayment (income) expense

(388)

494 

(882)

-178.5%

 

13 

370

(357)

-96.5%

     Mortgage  loan cost amortization

276 

192 

84 

43.8%

 

567 

389

178 

45.8%

     Bank  loan cost amortization

150 

98 

52 

53.1%

 

305 

194

111 

57.2%

 

 

 

 

 

 

 

 

 

 

Total interest expense

$15,352 

$14,052 

$1,300 

9.3%

 

$30,873 

$27,136

$3,737 

13.8%

 

                Mortgageinterest expense increased $2.0 million and $3.3 million for the three months andsix months ended June 30, 2008, respectively, compared to the same period for2007 and is due to the net effect of new loans placed in 2007 and 2008, therefinancing of one loan and the early extinguishment of two mortgages in 2008. The average interest rate on mortgage notes payable as of June 30, 2008 and 2007was 5.7% and 5.8%, respectively.

* *

                Bankline interest expense increased $265,000 and $880,000 for the three monthsended and six months ended June 30, 2008, respectively, compared to the sameperiod of 2007 and is primarily due to an increase in average borrowings due toadditional purchases of office investments offset by a decrease in averageinterest rate from 6.3% for the six months ended June 30, 2007 to 5.2% for the sixmonths ended June 30, 2008.

 

Page  32 of 39

 

 

 

 

 

 

**Liquidityand Capital Resources**

* *

*Statement of Cash Flows.  *Cash and cash equivalents were $14.2 million and $11.3million at June 30, 2008 and December 31, 2007, respectively.  Cash flowsprovided by operating activities for the six months ended June 30, 2008 were $38.8million compared to $35.3 million for the same period of 2007.  The increase incash flows from operating activities of $3.5 million is primarily attributableto the net effect of the timing of receipt of revenues and payment of expensesand offset by an increase in deferred leasing costs.

 

Cash used in investing activities was $260.0 millionfor the six months ended June 30, 2008 compared to cash used in investingactivities of $17.8 million for the same period of 2007.  The increase in cash usedin investing activities of $242.2 million is primarily due to office propertypurchases, office property improvements and development costs in 2008.

 

                Cashprovided by financing activities was $224.1 million for the six months ended June30, 2008 compared to cash used in financing activities of $13.8 million for thesame period of 2007.  The increase in cash provided by financing activities of $237.9million is primarily due to additional mortgage placements in 2008 andcontributions from minority interest partners to fund office propertypurchases.

** **

*Liquidity.  *TheCompany plans to continue pursuing the acquisition of additional investmentsthat meet the Company’s investment criteria and intends to use the Company’sline of credit, proceeds from the sale of non-core assets and officeproperties, proceeds from the sale of portions of owned assets through jointventures, possible sales of securities and cash balances to fund thoseacquisitions.  

 

                TheCompany's cash flows are exposed to interest rate changes primarily as a resultof its line of credit used to maintain liquidity and fund capital expendituresand expansion of the Company’s real estate investment portfolio andoperations.  The Company’s interest rate risk management objective is to limitthe impact of interest rate changes on earnings and cash flows and to lower itsoverall borrowing costs.  To achieve its objectives, the Company borrows atfixed rates, but also utilizes a four-year unsecured revolving credit facility,a five-year unsecured term loan and two one-year unsecured lines of credit(“the Company’s line of credit”).

 

                TheCompany’s line of credit allows Parkway to borrow up to a combined $311.0million.  At June 30, 2008, the Company had a total of $238.9 millionoutstanding under its line of credit.  Based on the loan covenants,Parkway had $44.5 million in additional capacity available at June 30, 2008. At June 30, 2008, the following amounts were outstanding under the line ofcredit (in thousands):

 

** **

** **

** **

** **

**Outstanding**

**Line of Credit**

**Lender**

**Interest Rate**

**Maturity**

**Balance**

$9  Million Unsecured Line of Credit

Trustmark  National Bank

3.8%

12/07/08

$        9,000

$15  Million Unsecured Line of Credit

PNC  Bank

3.8%

01/28/09

10,861

$236  Million Unsecured Line of Credit (1)

Wachovia  Bank

4.8%

04/27/10

159,000

$60  Million Unsecured Term Loan (2)

Wachovia  Bank

5.6%

04/27/11

60,000

 

 

4.9%

 

$    238,861

 

(1)    The interest rate on the $236 millionunsecured line of credit interest rate is currently LIBOR plus 130 basispoints.  The interest rate noted above represents the weighted average interestrate of short-term LIBOR borrowings, a $30 million interest rate swap thatexpires August 31, 2008 and a $50 million interest rate swap that expired June30, 2008.    The Company pays an annual administration fee of $35,000 and feeson the unused portion of the revolver ranging between 12.5 and 20 basis pointsbased upon overall Company leverage, with the rate set at 12.5 basis points at June30, 2008.  The line includes rights to a one-year extension with the same termsthrough April 2011. 

 

(2)   The interest rate on the $60 million term loanrepresents the weighted average interest rate of two interest rate swaps thatexpire December 31, 2008.

 

Page  33 of 39

 

 

 

 

 

 

                The Company’s $236million unsecured revolving credit facility and $60 million unsecured term loanare both led by Wachovia Bank and syndicated to nine other banks.  The creditfacility requires compliance with a number of restrictive financial covenants,including tangible net worth, fixed charge coverage ratio, unencumberedinterest coverage ratio, total debt to total asset ratio, secured debt to totalasset value ratio, secured recourse debt to total asset value ratio andunencumbered pool restrictions.  As of June 30, 2008, the Company was incompliance with these financial covenants.

 

The $15 million line is expected to fund the dailycash requirements of the Company’s treasury management system.  The interestrate on the $15 million line is based on LIBOR plus 80 to 130 basis points,depending upon overall Company leverage, with the current rate set at LIBORplus 130 basis points as of June 30, 2008.  Under the $15 million line, theCompany does not pay annual administration fees or fees on the unused portionof the line.

 

The $9 million line with Trustmark National Bank has acurrent interest rate equal to the 30-day LIBOR rate plus 132.5 basis points.  Theproceeds of the loan were used to finance the construction of the City CentreGarage, which was completed in 2005.

 

To protect against the potential for rapidly risinginterest rates, the Company entered into interest rate swap agreements in 2008,2007, 2005 and 2004.  The Company designated the swaps as hedges of thevariable interest rates on the Company’s borrowings under the Wachoviaunsecured revolving credit facility and a portion of the debt placed on the Pinnacledevelopment.  These swaps are considered to be fully effective and changes inthe fair value of the swaps are recognized in accumulated other comprehensiveincome.  The Company's interest rate hedge contracts as of June 30,2008 and 2007 are summarized as follows (in thousands):

 

** **

** **

** **

** **

** **

**Fair Market Value**

**Type of**

**Notional**

**Maturity**

** **

**Fixed**

**June 30**

**Hedge**

**Amount**

**Date**

**Reference Rate**

**Rate**

**2008**

**2007**

Swap

$30,000

08/31/08

1-Month LIBOR

4.924%

$   (116)

$          -

Swap

$40,000

12/31/08

1-Month LIBOR

4.360%

(333)

506

Swap

$20,000

12/31/08

1-Month LIBOR

4.245%

(161)

289

Swap

$100,000

03/31/11

1-Month LIBOR

4.935%

589 

-

Swap

$23,500

12/01/14

1-Month LIBOR

5.550%

492 

- 

 

 

 

 

 

$    471 

$     795

 

                AtJune 30, 2008, the Company had $875.7 million in mortgage notes payable with anaverage interest rate of 5.7% secured by office properties and $238.9 milliondrawn under the Company’s line of credit.  Parkway's pro rata share ofunconsolidated joint venture debt was $9.8 million with an average interestrate of 5.1% at June 30, 2008.  Based on the Company’s total marketcapitalization of approximately $1.5 billion at June 30, 2008 (using the June30, 2008 closing price of $33.73 per common share), the Company’s debtrepresented approximately 61.3% of its total market capitalization.  TheCompany targets a debt to total market capitalization rate at a percentage inthe range of 45% to 50%.  This rate may vary at times pending acquisitions,sales and/or equity offerings.  In addition, volatility in the price of theCompany’s common stock may affect the debt to total market capitalizationratio.  However, over time the Company plans to maintain a percentage in the rangeof 45% to 50%.  The increase in the debt to total market capitalization rate atJune 30, 2008 was due primarily to a stock price decrease.

 

                Inaddition to the debt to total market capitalization ratio, the Company alsomonitors interest, fixed charge and modified fixed charge coverage ratios.  Theinterest coverage ratio is computed by comparing the cash interest accrued toearnings before interest, taxes, depreciation and amortization (“EBITDA”). This ratio for the six months ended June 30, 2008 and 2007 was 2.35 and 2.48 times,respectively.  The fixed charge coverage ratio is computed by comparing thecash interest accrued, principal payments made on mortgage loans and preferred dividendspaid to EBITDA.  This ratio for the six months ended June 30, 2008 and 2007 was1.70 and 1.73 times, respectively.  The modified fixed charge coverage ratio iscomputed by comparing the cash interest accrued and preferred dividends paid toEBITDA.  This ratio for the three months ended June 30, 2008 and 2007 was 2.15and 2.25 times, respectively.  In connection with the GEAR UP Plan, managementset an internal target for the modified fixed charge coverage ratio of 2.5times as a measure of leverage for the plan.  While not a requirement of theplan, this self-imposed target serves to prevent the performance goals beingmet by over-leveraging the Company.  Management believes the debt to marketcapitalization, interest coverage, fixed charge coverage and modified fixedcharge coverage ratios provide useful information on total debt levels as wellas the Company’s ability to cover interest, principal and/or preferred dividendpayments with current income.

 

Page  34 of 39

 

 

 

 

 

 

 

                The table below presents the principal paymentsdue and weighted average interest rates for the mortgage notes payable as ofJune 30, 2008.

 

 

**Average**

 

**Mortgage Notes Payable**

 

**Interest Rate**

 

**(In thousands)**

2008*

5.7%

 

$    6,513

2009

5.7%

 

35,822

2010

5.8%

 

157,253

2011

6.0%

 

112,754

2012

5.9%

 

65,070

2013

5.9%

 

8,434

Thereafter

3.9%

 

489,897

Total

 

 

$875,743

 

 

 

 

Fair value at 06/30/08

 

 

$851,021

 

*Remaining six months

 

The Company presently has plans to make additionalcapital improvements at its office properties in 2008 of approximately $25 million. These expenditures include tenant improvements, capitalized acquisition costsand capitalized building improvements.  Approximately $11 million of theseimprovements relate to upgrades on properties acquired in recent years thatwere anticipated at the time of purchase.  All such improvements are expectedto be financed by cash flow from the properties, capital expenditure escrowaccounts, advances on the bank lines of credit or contributions from partners.

 

In the fall of 2008, the Company expects to completethe development of a 194,000 square foot Class A+ office building in Jackson,Mississippi known as The Pinnacle at Jackson Place, adjacent to the Company’sheadquarters building.  The total estimated cost of the development is $48.5million, and for the remainder of 2008, the Company expects to incurapproximately $19.3 million in construction costs, which will be funded withadvances under mortgage notes payable secured by The Pinnacle.  The Company hascommitments to lease approximately 71% of the new office space from four majorcustomers.  Parkway is considering a joint venture structure for thedevelopment whereby Parkway will retain an ownership interest of approximately20%.  The development is designed to utilize benefits available under the GulfOpportunity Zone Act for new developments in areas affected by HurricaneKatrina.

 

On May 2, 2008, the Company completed a $60.0 millionrecourse mortgage loan related to the refinance of a $41.4 million mortgagethat was scheduled to mature in September 2008.  The loan is secured by theCompany’s Capital City Plaza building in Atlanta, Georgia.  The interest rateon the loan is a variable rate based on LIBOR plus 165 basis points.  The loanterm is for two years, with a one-year extension option at the Company’sdiscretion. The excess loan proceeds of approximately $18.4 million were usedto pay down the Company’s line of credit.  The Company recorded a gain on theprepayment of approximately $388,000 associated with the write off of the debtpremium in the second quarter of 2008.  The mortgage represented the Company’sonly outstanding maturity in 2008.  

 

On May 14, 2008 Parkway formed Parkway PropertiesOffice Fund II, LP (“Texas Teachers Fund II”), a $750 million discretionaryfund with the Teacher Retirement System of Texas (“TRS”), for the purpose ofacquiring high-quality multi-tenant office properties.   TRS will be a 70%investor, and Parkway will be a 30% investor in the fund, which will becapitalized with approximately $375 million of equity capital and $375 millionof non-recourse, fixed-rate first mortgage debt.    Parkway’sshare of the equity contribution for the fund will be $112.5 million and willbe funded with proceeds from sales, line of credit advances and/or sales of securities.

 

On July 15, 2008, the Company sold Town Point Centerto an unrelated third party for a gross sales price of $12.8 million and willrecord a gain on the sale of approximately $1.6 million in the third quarter of2008.  The net proceeds from the sale of approximately $12.0 million were usedto reduce the Company’s line of credit.

 

Page  35 of 39

 

 

 

 

 

 

                Subsequentto June 30, 2008, the Company executed respective purchase and sale agreements,with $3.0 million in combined non-refundable deposits, on Capitol Center in Columbia,South Carolina, and Wachovia Plaza in St. Petersburg, Florida.  Gross salesproceeds are estimated to be $73.5 million with estimated gains to be recorded ofapproximately $21.0 million.  The net proceeds from the sales will be used toreduce the Company’s line of credit and to retire the existing mortgage debt onCapitol Center of $18.2 million.  The Company will incur a debt prepaymentpenalty of approximately $2.2 million in connection with the earlyextinguishment of the Capitol Center mortgage.  The asset sales are subject tocustomary final closing requirements and due diligence documentation, and theCompany expects that these sales will be completed late in the third quarter of2008.

 

                The Company anticipates that its current cashbalance, operating cash flows, contributions from partners and borrowings(including borrowings under the Company’s line of credit) will be adequate topay the Company's (i) operating and administrative expenses, (ii) debt serviceobligations, (iii) distributions to shareholders, (iv) capital improvements,and (v) normal repair and maintenance expenses at its properties, both in theshort and long term.  In addition, the Company may use proceeds from sales ofassets, possible sales of securities and borrowings to fund propertyacquisitions.

**Contractual Obligations**

 

                Seeinformation appearing under the caption “Financial Condition – Notes Payable toBanks and Mortgage Notes Payable” in Item 2, Management’s Discussion andAnalysis of Financial Condition and Results of Operations for a discussion ofchanges in long-term debt since December 31, 2007.  

** **

**FundsFrom Operations**

 

Management believes that funds from operationsavailable to common shareholders (“FFO”) is an appropriate measure ofperformance for equity REITs and computes this measure in accordance with theNational Association of Real Estate Investment Trusts' ("NAREIT")definition of FFO.  Funds from operations is defined by NAREIT as net income(computed in accordance with generally accepted accounting principles"GAAP"), excluding gains or losses from sales of property andextraordinary items under GAAP, plus depreciation and amortization, and afteradjustments to derive the Company’s pro rata share of FFO of consolidated andunconsolidated joint ventures.  Further, the Company does not adjust FFO toeliminate the effects of non-recurring charges.  The Company believes that FFOis a meaningful supplemental measure of its operating performance becausehistorical cost accounting for real estate assets in accordance with GAAPimplicitly assumes that the value of real estate assets diminishes predictablyover time, as reflected through depreciation and amortization expenses. However, since real estate values have historically risen or fallen with marketand other conditions, many industry investors and analysts have consideredpresentation of operating results for real estate companies that use historicalcost accounting to be insufficient.  Thus, NAREIT created FFO as a supplementalmeasure of operating performance for real estate investment trusts thatexcludes historical cost depreciation and amortization, among other items, fromnet income, as defined by GAAP.  The Company believes that the use of FFO,combined with the required GAAP presentations, has been beneficial in improvingthe understanding of operating results of real estate investment trusts amongthe investing public and making comparisons of operating results among suchcompanies more meaningful.  FFO as reported by Parkway may not be comparable toFFO reported by other REITs that do not define the term in accordance with thecurrent NAREIT definition.  Funds from operations do not represent cashgenerated from operating activities in accordance with accounting principlesgenerally accepted in the United States and is not an indication of cashavailable to fund cash needs.  Funds from operations should not be consideredan alternative to net income as an indicator of the Company's operatingperformance or as an alternative to cash flow as a measure of liquidity.

 

Page  36 of 39

 

 

 

 

 

 

The following table presents a reconciliation of theCompany’s net income to FFO for the three months ended June 30, 2008 and 2007(in thousands):

 

 

**Three Months Ended**

** **

**Six Months Ended**

 

**June 30**

** **

**June 30**

 

**2008**

 

**2007**

** **

**2008**

 

**2007**

Net  income (loss)

 $

(1,936)

 

 $

19,240 

 

 $

(4,531)

 

 $

19,668 

Adjustments  to net income (loss):

 

 

 

 

 

 

 

        Preferred dividends

(1,200)

 

(1,200)

 

(2,400)

 

(2,400)

        Depreciation and amortization

23,269 

 

19,022 

 

45,262 

 

38,079 

      Depreciation and amortization – discontinued  operations

169 

 

147 

 

344 

 

301 

        Minority interest depreciation and  amortization

(4,898)

 

(2,284)

 

(9,108)

 

(4,675)

        Adjustments for unconsolidated joint ventures

179 

 

161 

 

355 

 

322 

        Gain on sale of real estate

- 

 

(20,260)

 

- 

 

(20,260)

Funds from operations available to common

 

 

 

 

 

 

 

        shareholders

 $

15,583 

 

 $

14,826 

 

 $

29,922 

 

 $

31,035 

**Inflation**

 

                Inflationhas not had a significant impact on the Company because of the relatively lowinflation rate in the Company’s geographic areas of operation.  Additionally,most of the leases require the customers to pay their pro rata share ofoperating expenses, including common area maintenance, real estate taxes,utilities and insurance, thereby reducing the Company’s exposure to increasesin operating expenses resulting from inflation.  The Company’s leases typicallyhave three to seven year terms, which may enable the Company to replaceexisting leases with new leases at market base rent, which may be higher orlower than the existing lease rate.

 

**Forward-LookingStatements**

 

                Inaddition to historical information, certain sections of this Form 10-Q maycontain forward-looking statements within the meaning of Section 27A of theSecurities Act of 1933 and Section 21E of the Securities Exchange Act of 1934,such as those that are not in the present or past tense, that discuss theCompany’s beliefs, expectations or intentions or those pertaining to theCompany’s capital resources, profitability and portfolio performance andestimates of market rental rates.  Forward-looking statements involve numerousrisks and uncertainties.  The following factors, among others discussed hereinand in the Company’s filings under the Securities Exchange Act of 1934, couldcause actual results and future events to differ materially from those setforth or contemplated in the forward-looking statements:  defaults ornon-renewal of leases, increased interest rates and operating costs, failure toobtain necessary outside financing, difficulties in identifying properties toacquire and in effecting acquisitions, the failure to acquire or sellproperties as and when anticipated, failure to qualify as a real estateinvestment trust under the Internal Revenue Code of 1986, as amended,environmental uncertainties, risks related to natural disasters, financialmarket fluctuations, changes in real estate and zoning laws and increases inreal property tax rates.  The success of the Company also depends upon thetrends of the economy, including interest rates, income tax laws, governmentalregulation, legislation, population changes and those risk factors discussedelsewhere in this Form 10-Q and in the Company’s filings under the SecuritiesExchange Act of 1934.  Readers are cautioned not to place undue reliance onforward-looking statements, which reflect management’s analysis only as thedate hereof.  The Company assumes no obligation to update forward-lookingstatements.

** **

**Item3.  Quantitative and Qualitative Disclosures About Market Risk**

** **

                Seeinformation appearing under the caption “Liquidity” in Item 2, Management’sDiscussion and Analysis of Financial Condition and Results of Operations.

 

**Item 4.  Controls andProcedures**

** **

                TheCompany carried out an evaluation, under the supervision and with theparticipation of the Company's management, including the Company's ChiefExecutive Officer and Chief Financial Officer, of the effectiveness of thedesign and operation of the Company's disclosure controls and procedurespursuant to Exchange Act Rule 13a‐15.  Based upon that evaluation, theChief Executive Officer and Chief Financial Officer concluded that as of theend of the Company’s most recent fiscal quarter, the Company's disclosurecontrols and procedures are effective in timely alerting them to materialinformation relating to the Company (including its consolidated subsidiaries)required to be included in the Company's periodic SEC filings.

 

Page  37 of 39

 

 

 

 

 

 

                Duringthe period covered by this report, the Company reviewed its internal controls,and there have been no changes in the Company's internal controls overfinancial reporting that have materially affected, or are reasonably likely tomaterially affect, the Company’s internal controls over financial reporting.

 

** **

**PART II.  OTHER INFORMATION**

**Item 1A.  Risk Factors**

 

There have been no material changes to the riskfactors disclosed in Parkway’s Form 10-K for the year ended December 31, 2007.

 

**Item 2.  UnregisteredSales of Equity Securities and Use of Proceeds**

 

On August 3, 2007, the Board of Directors authorizedthe repurchase of up to 1.7 million shares of Parkway’s outstanding commonstock through July 30, 2008.  The shares may be purchased in the open market orin privately negotiated transactions, and at times and in amounts that theCompany deems appropriate.  In 2007, the Company purchased 687,245 shares ofParkway common stock for $29.1 million, which equates to an average price of$42.36 per share, with 1,012,755 shares still authorized for repurchase.  Noshares were purchased under this authorization during the six months ended June30, 2008.  

 

**Item4.       Submission of Matters to a Vote of Security Holders**

** **

On May 8, 2008, the Company held its Annual Meeting ofStockholders.  At the Annual Meeting, the following eight directors wereelected to serve until the next Annual Meeting.

** **

 

 

**SHARES OF**

**COMMON STOCK**

 

 

 

**FOR**

 

**WITHHOLD**

**AUTHORITY**

Daniel P. Friedman

 

13,880,533

 

165,075

Roger P. Friou

 

13,746,605

 

299,001

Martin L. Garcia

 

13,879,399

 

166,209

Michael J. Lipsey

 

13,749,674

 

295,934

Steven G. Rogers

 

13,750,763

 

294,845

Leland R. Speed

 

13,746,630

 

298,978

Troy A. Stovall

 

13,886,147

 

159,460

Lenore M. Sullivan

 

13,884,104

 

161,504

In addition, the following items were also approved at the May 8, 2008 AnnualMeeting:

 

                Proposal to consider and ratify theappointment of Ernst &Young LLP as independent accountants of the Companyfor the 2008 fiscal year.

 

 

 

**SHARES OF**

**COMMON STOCK**

FOR

 

13,238,588

AGAINST

 

172,343

ABSTAIN

 

634,677

 

                Subsequentto the Annual Meeting and as previously disclosed, on June 30, 2008, our Audit Committee dismissed Ernst & Young LLP (“E&Y”) and engaged KPMG LLP(“KPMG”) to serve as the Company’s independent registered public accountingfirm.

 

Page  38 of 39

 

 

 

 

 

 

                TheAudit Committee of the Board of Directors of the Company, in accordance withsound corporate governance practices, issued a request for proposal (“RFP”)with regard to the audit engagement of the Company.  The Audit Committeedecided to issue the RFP because it wanted to consolidate the audits ofParkway, the Ohio PERS Fund I and the Texas Teachers Fund II with oneindependent registered public accounting firm and wanted the opportunity toreview other auditing firms as prospective independent registered publicaccounting firms.  This decision was not related to the quality of servicesprovided by E&Y.  The RFP was issued to several large public accountingfirms, including E&Y, in May, 2008.  KPMG has audited the consolidatedhistorical-cost and consolidated current-value financial statements of OhioPERS Fund I since 2005.

 

                Duringthe Company’s two most recent fiscal years ended December 31, 2007, and in theinterim period between December 31, 2007 and June 30, 2008, there were nodisagreements between the Company and E&Y on any matter of accountingprinciples or practices, financial statement disclosure or auditing scope orprocedure which, if not resolved to E&Y’s satisfaction, would have causedE&Y to make reference to the matter of the disagreement in connection withtheir reports.  

 

**Item6.  Exhibits**

** **

10.1    Form of Change inControl Agreement with each of the Company’s Executive Officers (incorporatedby reference to Exhibit 10.1 to the Company’s Form 8-K filed May 14, 2008).

10.2    Limited Partnership Agreementof Parkway Properties Office Fund II, L.P. by and among PPOF II, LLC, ParkwayProperties, L.P. and Teacher Retirement System of Texas (incorporated byreference to Exhibit 10.1 to the Company's Form 8-K filed May 19, 2008).

31.1    Certificationof Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of2002.

31.2    Certificationof Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of2002.

32.1    Certificationof Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of2002.

32.2    Certificationof Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of2002.

 

** **

**SIGNATURES**

** **

        Pursuant to therequirements of the Securities Exchange Act of 1934, the Registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.

 

**DATE**:   August	7, 2008

**PARKWAY PROPERTIES, INC.**

** **

** **

** **

** **

** **

** **

** **

**BY**:

/s/ Mandy  M. Pope

** **

 

Mandy M. Pope, CPA

** **

 

Senior Vice President and

** **

 

Chief Accounting Officer

 

Page  39 of 39

 

 

  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|