Delaware		1-35278		90-0750824
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

1114 Avenue of the Americas, Suite 2800 New York, New York		10036
(Address of principal executive offices)		(Zip Code)

 

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

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

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

 

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(1) The Company assumed the respective mortgages loans associated to Chesterfield Towne Center and The Centre at Salisbury.  In addition $55.0 million was drawn on the Company's term loan revolver in order to fund the remaining proceeds required to complete the acquisition.

 

 

(C)

Acquired intangibles represent above and below market leases and the difference between the property valued with existing in-place leases and the property valued as if vacant. The value of the acquired intangibles will be amortized over the lease term. Allocations are preliminary and subject to change.

 

(D)	Pro forma demand deposit with affiliate of $(12.8) million represents the net proceeds used to acquire Chesterfield Towne Center and the The Centre at Salisbury.

 

 

 

 

		Historical (A)				Pro Forma Adjustments (B)				Pro Forma
		(In thousands, except per share amounts)
Revenues:
Minimum rents (C)		$	119,296			$	15,877			$	135,173
Tenant recoveries		50,254				8,185				58,439
Overage rents		2,479				58				2,537
Other		4,161				528				4,689
Total revenues		176,190				24,648				200,838
Expenses:
Real estate taxes		18,300				2,246				20,546
Property maintenance costs		8,361				1,554				9,915
Marketing		2,032				316				2,348
Other property operating costs		43,831				3,606				47,437
Provision for doubtful accounts		364				177				541
General and administrative		15,675				—				15,675
Depreciation and amortization (C)		47,418				9,044				56,462
Other		2,052				—				2,052
Total expenses		138,033				16,943				154,976
Operating income		38,157				7,705				45,862
Interest income		492				—				492
Interest expense (D)		(59,305		)		(10,100		)		(69,405		)
Loss before income taxes and discontinued operations		(20,656		)		(2,395		)		(23,051		)
Provision for income taxes		(235		)		—				(235		)
Loss from continuing operations		(20,891		)		(2,395		)		(23,286		)
Discontinued operations:
Loss from discontinued operations		(23,158		)		—				(23,158		)
Gain on extinguishment of debt		13,995				—				13,995
Discontinued operations, net		(9,163		)		—				(9,163		)
Net loss		$	(30,054	)		$	(2,395	)		$	(32,449	)
Loss from continuing operations per share - Basic and Diluted		$	(0.42	)		$	(0.05	)		$	(0.47	)
Net loss per share - Basic and Diluted		$	(0.61	)		$	(0.05	)		$	(0.66	)
Dividends declared per share		$	0.39			$	—			$	0.39

(A)	The historical column represents the Company's Consolidated Statement of Operations for the nine months ended September 30, 2013 as filed with the Securities and Exchange Commission on its quarterly report on Form 10-Q for the quarter ended September 30, 2013.

(B)	Total pro forma adjustments for significant acquisitions consummated through the date of this filing are as though the properties were acquired on January 1, 2012.

Total revenues and expenses for the nine months ended September 30, 2013 are based on information provided by the sellers for Chesterfield Towne Center and the The Centre at Salisbury.  Both Chesterfield Towne Center and the The Centre at Salisbury were purchased on December 11, 2013 and, as such, the pro forma adjustments represent the period from January 1, 2013 to September 30, 2013.  Furthermore, the Company drew down on its revolver as a result of the acquisitions and therefore reflected the adjustment associated with this transaction.

The pro forma adjustments for the nine months ended September 30, 2013 are composed of the following adjustments:

		Chesterfield Towne Center				The Centre at Salisbury				Revolver Draw				Total Pro Forma Adjustments
		(In thousands)
Revenues:
Minimum rents		$	8,850			$	7,027			$	—			$	15,877
Tenant recoveries		4,636				3,549				—				8,185
Overage rents		23				35				—				58
Other		299				229				—				528
Total revenues		13,808				10,840				—				24,648
Expenses:
Real estate taxes		878				1,368				—				2,246
Property maintenance costs		810				744				—				1,554
Marketing		185				131				—				316
Other property operating costs		2,135				1,471				—				3,606
Provision for doubtful accounts		60				117				—				177
General and administrative		—				—				—				—
Depreciation and amortization		5,123				3,921				—				9,044
Other		—				—				—				—
Total expenses		9,191				7,752				—				16,943
Operating income		4,617				3,088				—				7,705
Interest income		—				—				—				—
Interest expense		(4,013		)		(5,064		)		(1,023		)		(10,100		)
Loss before income taxes		604				(1,976		)		(1,023		)		(2,395		)
Provision for income taxes		—				—				—				—
Net loss		$	604			$	(1,976	)		(1,023		)		$	(2,395	)

(C)	Depreciation or amortization expense is computed using the straight-line method based upon the following estimated useful lives:

 

 

	Years
Buildings and improvements	40
Equipment and fixtures	5 - 10
Tenant improvements	Shorter of useful life or applicable lease term

The portion of the purchase price allocated to above and below market lease intangibles will be amortized on a straight-line basis over the life of the related leases as an adjustment to rental income.  In-place lease intangibles will be amortized on a straight-line basis over the life of the related leases as a component of amortization expense.

(D)	The pro forma adjustments relating to incremental interest expense were based on the following debt terms (amounts in thousands):

		Principal Balance		Interest Rate		Maturity Date		Market Rate Adjustment
Chesterfield Towne Center		$109,737		4.75%		October 2022		$1,251
The Centre at Salisbury		115,000		5.79		May 2016		(1,243)
Revolver Draw		55,000		2.48		November 2017		—

 

 

		Historical (A)				Pro Forma Adjustments (B)				Pro Forma
		(In thousands, except per share amounts)
Revenues:
Minimum rents (C)		$	154,401			$	21,188			$	175,589
Tenant recoveries		68,181				10,653				78,834
Overage rents		6,050				330				6,380
Other		5,342				993				6,335
Total revenues		233,974				33,164				267,138
Expenses:
Real estate taxes		23,447				2,899				26,346
Property maintenance costs		14,084				2,108				16,192
Marketing		3,787				483				4,270
Other property operating costs		61,110				5,025				66,135
Provision for doubtful accounts		1,919				34				1,953
General and administrative		20,652				—				20,652
Depreciation and amortization (C)		71,090				12,060				83,150
Other		9,965				1,234				11,199
Total expenses		206,054				23,843				229,897
Operating income		27,920				9,321				37,241
Interest income		755				—				755
Interest expense (D)		(96,889		)		(13,465		)		(110,354		)
Loss before income taxes		(68,214		)		(4,144		)		(72,358		)
Provision for income taxes		(445		)		—				(445		)
Net loss		$	(68,659	)		$	(4,144	)		$	(72,803	)
Net loss per share - Basic and Diluted		$	(1.49	)		$	(0.09	)		$	(1.58	)
Dividends declared per share		$	0.21			$	—			$	0.21