ACADIA REALTY TRUST AND SUBSIDIARIES UNAUDITED PRO FORMA FINANCIAL INFORMATION
ACADIA REALTY TRUST AND SUBSIDIARIES
UNAUDITED PRO FORMA FINANCIAL INFORMATION
As previously announced, during September 2013, subsidiaries of Acadia Strategic Opportunity Fund II, LLC ("Fund II"), which in turn is a subsidiary of Acadia Realty Trust (the "Company"), entered into a purchase and sale agreement (the "Agreement") to sell Pelham Manor Shopping Plaza and Fordham Place (the "Properties") for an aggregate sales price of $192.4 million to an unaffiliated entity. On November 6, 2013, Fund II completed the sale of one of the Properties, Pelham Manor Shopping Plaza, for a sales price of $58.5 million. The sale of Fordham Place is expected to be completed within the next 60 days, although the sale remains subject to customary closing conditions and, accordingly, no assurance can be given as to the timing or successful completion of the sale of this property.
The accompanying Unaudited Pro Forma Consolidated Balance Sheet is presented as if the Properties were sold on September 30, 2013. The accompanying Unaudited Pro Forma Consolidated Statements of Income are presented as if the Properties had been sold as of January 1, 2010. The accompanying Unaudited Pro Forma Consolidated Financial Statements should be read in conjunction with the Company's 2012 Annual Report on Form 10-K and the Company's Quarterly Report on Form 10-Q for the nine months ended September 30, 2013.
Pro forma information is intended to provide investors with information about the impact of transactions by showing how specific transactions might have affected historical financial statements, illustrating the scope of the change in the historical financial position and results of operations. The adjustments made to historical financial information give effect to events that are directly attributable to the sale of the Properties and are factually supportable. The Unaudited Pro Forma Consolidated Financial Statements are prepared in accordance with Article 11 of Regulation S-X.
The Unaudited Pro Forma Consolidated Financial Statements set forth below are not fact and there can be no assurance that the Company's results would not have differed significantly from those set forth below. Accordingly, the Unaudited Pro Forma Consolidated Financial Statements are presented for illustrative purposes only and do not purport to represent, and are not necessarily indicative of, what our actual financial position and results of operations would have been had the sale of the Properties occurred on the date indicated, nor are they indicative of our future financial position or results of operations. Readers are cautioned not to place undue reliance on such information and the Company makes no representations regarding the information set forth below or its ultimate performance compared to it.
ACADIA REALTY TRUST AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As of September 30, 2013
(Amount in thousands, except share and per share data) | Company Historical (a) | Disposition of Properties (b) | Company Pro Forma | ||||||||
ASSETS | |||||||||||
Operating real estate | |||||||||||
Land | $ | 318,539 | $ | — | $ | 318,539 | |||||
Building and improvements | 1,023,184 | — | 1,023,184 | ||||||||
Construction in progress | 7,256 | — | 7,256 | ||||||||
1,348,979 | — | 1,348,979 | |||||||||
Less: accumulated depreciation | 218,921 | — | 218,921 | ||||||||
Net operating real estate | 1,130,058 | — | 1,130,058 | ||||||||
Real estate under development | 334,445 | — | 334,445 | ||||||||
Notes receivable, net | 95,352 | — | 95,352 | ||||||||
Investments in and advances to unconsolidated affiliates | 199,113 | — | 199,113 | ||||||||
Cash and cash equivalents | 88,421 | 16,290 | 104,711 | ||||||||
▇▇▇▇ in escrow | 19,971 | — | 19,971 | ||||||||
Restricted cash | 134,392 | — | 134,392 | ||||||||
Rents receivable, net | 23,731 | — | 23,731 | ||||||||
Deferred charges, net | 29,941 | — | 29,941 | ||||||||
Acquired lease intangibles, net | 32,583 | — | 32,583 | ||||||||
Prepaid expenses and other assets | 44,858 | — | 44,858 | ||||||||
Assets of discontinued operations | 216,503 | (191,351 | ) | 25,152 | |||||||
Total assets | $ | 2,349,368 | $ | (175,061 | ) | $ | 2,174,307 | ||||
LIABILITIES | |||||||||||
Mortgage and other notes payable | $ | 1,004,175 | $ | — | $ | 1,004,175 | |||||
Convertible notes payable | 380 | — | 380 | ||||||||
Distributions in excess of income from, and investments in, unconsolidated affiliates | 12,426 | — | 12,426 | ||||||||
Accounts payable and accrued expenses | 36,694 | — | 36,694 | ||||||||
Dividends and distributions payable | 11,984 | — | 11,984 | ||||||||
Acquired lease intangibles, net | 22,204 | — | 22,204 | ||||||||
Other liabilities | 16,318 | — | 16,318 | ||||||||
Liabilities of discontinued operations | 132,031 | (112,625 | ) | 19,406 | |||||||
Total liabilities | 1,236,212 | (112,625 | ) | 1,123,587 | |||||||
EQUITY | |||||||||||
Shareholders' equity Common shares, $.001 par value, authorized 100,000,000 shares; issued and outstanding 55,448,856 | 55 | — | 55 | ||||||||
Additional paid-in capital | 660,160 | — | 660,160 | ||||||||
Accumulated other comprehensive loss | (746 | ) | — | (746 | ) | ||||||
Retained earnings | 38,294 | 687 | 38,981 | ||||||||
Total shareholders' equity | 697,763 | 687 | 698,450 | ||||||||
Noncontrolling interests | 415,393 | (63,123 | ) | 352,270 | |||||||
Total equity | 1,113,156 | (62,436 | ) | 1,050,720 | |||||||
Total liabilities and equity | $ | 2,349,368 | $ | (175,061 | ) | $ | 2,174,307 | ||||
The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
ACADIA REALTY TRUST AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
For the Year Ended December 31, 2012
(dollars in thousands, except per share amounts) | Company Historical (aa) | Disposition of Properties (bb) | Company Pro Forma | ||||||||
Revenues | |||||||||||
Rental income | $ | 99,697 | (17,060 | ) | $ | 82,637 | |||||
Interest income | 7,879 | — | 7,879 | ||||||||
Expense reimbursements | 24,385 | (3,741 | ) | 20,644 | |||||||
Management fee income | 1,455 | — | 1,455 | ||||||||
Other | 1,009 | (108 | ) | 901 | |||||||
Total revenues | 134,425 | (20,909 | ) | 113,516 | |||||||
Operating Expenses | |||||||||||
Property operating | 21,991 | (6,105 | ) | 15,886 | |||||||
Other operating | 3,898 | — | 3,898 | ||||||||
Real estate taxes | 18,811 | (2,375 | ) | 16,436 | |||||||
General and administrative | 21,532 | (307 | ) | 21,225 | |||||||
Depreciation and amortization | 32,931 | (5,060 | ) | 27,871 | |||||||
Reserve for notes receivable | 405 | — | 405 | ||||||||
Total operating expenses | 99,568 | (13,847 | ) | 85,721 | |||||||
Operating income | 34,857 | (7,062 | ) | 27,795 | |||||||
Equity in earnings of unconsolidated affiliates | 550 | — | 550 | ||||||||
Gain on sale of unconsolidated affiliates | 3,061 | — | 3,061 | ||||||||
Impairment of unconsolidated affiliates | (2,032 | ) | — | (2,032 | ) | ||||||
Other interest income | 148 | — | 148 | ||||||||
Gain on involuntary conversion of asset | 2,368 | — | 2,368 | ||||||||
Loss on debt extinguishment | (198 | ) | — | (198 | ) | ||||||
Interest and other finance expense | (28,768 | ) | 5,911 | (22,857 | ) | ||||||
Income (loss) from continuing operations before income taxes | 9,986 | (1,151 | ) | 8,835 | |||||||
Income tax benefit | 568 | — | 568 | ||||||||
Net income | 10,554 | (1,151 | ) | 9,403 | |||||||
Loss (income) attributable to noncontrolling interests | 13,480 | 923 | 14,403 | ||||||||
Net income attributable to Common Shareholders | $ | 24,034 | $ | (228 | ) | $ | 23,806 | ||||
Basic earnings per share | $ | 0.51 | $ | — | $ | 0.51 | |||||
Diluted earnings per share | $ | 0.51 | $ | — | $ | 0.51 | |||||
The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
ACADIA REALTY TRUST AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
For the Year Ended December 31, 2011
(dollars in thousands, except per share amounts) | Company Historical (aa) | Disposition of Properties (bb) | Company Pro Forma | ||||||||
Revenues | |||||||||||
Rental income | $ | 80,140 | (15,507 | ) | $ | 64,633 | |||||
Interest income | 11,429 | — | 11,429 | ||||||||
Expense reimbursements | 21,141 | (3,085 | ) | 18,056 | |||||||
Management fee income | 1,674 | — | 1,674 | ||||||||
Other | 694 | (11 | ) | 683 | |||||||
Total revenues | 115,078 | (18,603 | ) | 96,475 | |||||||
Operating Expenses | |||||||||||
Property operating | 17,513 | (5,772 | ) | 11,741 | |||||||
Other operating | 1,455 | — | 1,455 | ||||||||
Real estate taxes | 15,320 | (2,107 | ) | 13,213 | |||||||
General and administrative | 23,066 | (63 | ) | 23,003 | |||||||
Depreciation and amortization | 25,672 | (4,846 | ) | 20,826 | |||||||
Total operating expenses | 83,026 | (12,788 | ) | 70,238 | |||||||
Operating income | 32,052 | (5,815 | ) | 26,237 | |||||||
Equity in earnings of unconsolidated affiliates | 1,555 | — | 1,555 | ||||||||
Other interest income | 276 | — | 276 | ||||||||
Gain on debt extinguishment | 1,268 | 1,268 | |||||||||
Interest and other finance expense | (29,632 | ) | 6,224 | (23,408 | ) | ||||||
Income from continuing operations before income taxes | 5,519 | 409 | 5,928 | ||||||||
Income tax provision | (461 | ) | — | (461 | ) | ||||||
Net income | 5,058 | 409 | 5,467 | ||||||||
Loss (income) attributable to noncontrolling interests | 13,655 | (328 | ) | 13,327 | |||||||
Net income attributable to Common Shareholders | $ | 18,713 | $ | 81 | $ | 18,794 | |||||
Basic earnings per share | $ | 0.45 | $ | — | $ | 0.45 | |||||
Diluted earnings per share | $ | 0.45 | $ | — | $ | 0.45 | |||||
The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
ACADIA REALTY TRUST AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
For the Year Ended December 31, 2010
(dollars in thousands, except per share amounts) | Company Historical (aa) | Disposition of Properties (bb) | Company Pro Forma | ||||||||
Revenues | |||||||||||
Rental income | $ | 75,082 | (14,524 | ) | $ | 60,558 | |||||
Interest income | 19,161 | — | 19,161 | ||||||||
Expense reimbursements | 19,883 | (3,120 | ) | 16,763 | |||||||
Management fee income | 1,424 | — | 1,424 | ||||||||
Other | 840 | (50 | ) | 790 | |||||||
Total revenues | 116,390 | (17,694 | ) | 98,696 | |||||||
Operating Expenses | |||||||||||
Property operating | 19,508 | (6,040 | ) | 13,468 | |||||||
Real estate taxes | 14,006 | (1,933 | ) | 12,073 | |||||||
General and administrative | 20,209 | (160 | ) | 20,049 | |||||||
Depreciation and amortization | 23,419 | (3,563 | ) | 19,856 | |||||||
Total operating expenses | 77,142 | (11,696 | ) | 65,446 | |||||||
Operating income | 39,248 | (5,998 | ) | 33,250 | |||||||
Equity in earnings of unconsolidated affiliates | 12,450 | — | 12,450 | ||||||||
Loss on sale of unconsolidated affiliates | (1,479 | ) | — | (1,479 | ) | ||||||
Other interest income | 406 | — | 406 | ||||||||
Gain from bargain purchase | 33,805 | — | 33,805 | ||||||||
Interest and other finance expense | (34,414 | ) | 8,432 | (25,982 | ) | ||||||
Income from continuing operations before income taxes | 50,016 | 2,434 | 52,450 | ||||||||
Income tax provision | (2,869 | ) | — | (2,869 | ) | ||||||
Net income | 47,147 | 2,434 | 49,581 | ||||||||
(Income) loss attributable to noncontrolling interests | (18,914 | ) | (1,952 | ) | (20,866 | ) | |||||
Net income attributable to Common Shareholders | $ | 28,233 | $ | 482 | $ | 28,715 | |||||
Basic earnings per share | $ | 0.69 | $ | 0.01 | $ | 0.70 | |||||
Diluted earnings per share | $ | 0.69 | $ | 0.01 | $ | 0.70 | |||||
The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Adjustments to Unaudited Pro Forma Consolidated Balance Sheet
(a) Represents the unaudited historical consolidated balance sheet of the Company as of September 30, 2013.
(b) Reflects the disposition of the Properties and removal of the book value of the net assets and liabilities of the Properties.
Note 2 - Adjustments to Unaudited Pro Forma Consolidated Statements of Income
(aa) Represents the audited historical consolidated statements of income for the Company for each of the fiscal years ended December 31, 2012, 2011, and 2010.
(bb) Represents the unaudited historical statements of income for the Properties for each of the fiscal years ended December 31, 2012, 2011, and 2010.