Attached files
| file | filename |
|---|---|
| EX-99.3 - SOUTHSHORE SHOPS FINANCIAL STATEMENTS - Armada Hoffler Properties, Inc. | southshoreshops3-14financi.htm |
| EX-99.2 - SOUTHGATE SQUARE FINANCIAL STATEMENTS - Armada Hoffler Properties, Inc. | southgatesquare3-14financi.htm |
| EX-99.1 - RETAIL PORTFOLIO FINANCIAL STATEMENTS - Armada Hoffler Properties, Inc. | retailportfolio3-14financi.htm |
| EX-23.2 - CONSENT OF CHERRY BEKAERT LLP - Armada Hoffler Properties, Inc. | consentofcherrybekaert.htm |
| EX-23.1 - CONSENT OF PRICEWATERHOUSECOOPERS, LLP - Armada Hoffler Properties, Inc. | consentofpwc.htm |
| 8-K - 8-K - Armada Hoffler Properties, Inc. | a3-14audits8xk.htm |
Exhibit 99.4
ARMADA HOFFLER PROPERTIES, INC.
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
On January 14, 2016, a wholly owned subsidiary of Armada Hoffler Properties, Inc. (the “Company”) completed the previously announced acquisition of a portfolio of 11 retail properties aggregating 1.1 million square feet (the “Retail Portfolio”) for a total purchase price of $170.5 million in cash. The Company funded the acquisition of the Retail Portfolio with the net proceeds from the sale of the Richmond Tower office building, which closed on January 8, 2016, the sale of the Oceaneering office building, which closed on October 30, 2015, and borrowings under the Company’s unsecured credit facility. On December 9, 2015, the Company completed an underwritten public offering of 3.5 million shares of common stock (the “Offering”). The net proceeds to the Company from the Offering after deducting the underwriting discount and related offering costs were $35.1 million, of which the Company used $34.0 million to repay amounts borrowed under its unsecured credit facility.
On April 29, 2016, the Company completed the previously announced acquisition of Southgate Square, a retail center located in Colonial Heights, Virginia for total consideration of $39.5 million, consisting of the assumption of $21.1 million of debt and the issuance of 1,575,185 Class A units of limited partnership interest (“Class A Units”) in Armada Hoffler, L.P., the Company's operating partnership.
On August 4, 2016, the Company completed the previously announced acquisition of Southshore Shops, a retail center located in Midlothian, Virginia for total consideration of $9.3 million, consisting of $6.7 million of cash and the issuance of 189,160 Class A Units.
The accompanying unaudited pro forma consolidated financial statements of the Company have been prepared to reflect the impacts of the acquisitions of the Retail Portfolio, Southgate Square and Southshore Shops, the sales of the Richmond Tower and Oceaneering office buildings and the Offering on the Company’s historical consolidated financial statements.
The unaudited pro forma consolidated balance sheet as of June 30, 2016 is based on the Company’s historical consolidated balance sheet as of the same date and gives effect to the acquisition of Southshore Shops as if it had occurred on June 30, 2016. The unaudited pro forma consolidated statements of operations for the six months ended June 30, 2016 and the year ended December 31, 2015 are based on the historical consolidated statements of operations of the Company for the same periods and give effect to the acquisitions of the Retail Portfolio, Southgate Square and Southshore Shops, the sales of the Richmond Tower and Oceaneering office buildings and the Offering as if each had occurred on January 1, 2015. The Company has based the unaudited pro forma adjustments on available information and assumptions that the Company believes are reasonable.
The accompanying unaudited pro forma consolidated financial information is presented for illustrative purposes only and is not necessarily indicative of what the Company’s actual financial condition or results of operations would have been had the acquisitions of the Retail Portfolio, Southgate Square and Southshore Shops, the sales of the Richmond Tower and Oceaneering office buildings and the Offering been completed on the dates indicated, nor does it purport to be indicative of the Company’s financial condition as of any future date or the Company’s results of operations for any future period.
The accompanying unaudited pro forma consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016 and the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.
1
ARMADA HOFFLER PROPERTIES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
(In thousands, except par value and share data)
(Unaudited)
Historical | Southshore | Pro Forma | ||||||||||
June 30, 2016 | Shops | June 30, 2016 | ||||||||||
ASSETS | ||||||||||||
Real estate investments: | ||||||||||||
Income producing property | $ | 752,783 | $ | 8,279 | (a) | $ | 761,062 | |||||
Held for development | 2,032 | — | 2,032 | |||||||||
Construction in progress | 79,258 | — | 79,258 | |||||||||
834,073 | 8,279 | 842,352 | ||||||||||
Accumulated depreciation | (127,337 | ) | — | (127,337 | ) | |||||||
Net real estate investments | 706,736 | 8,279 | 715,015 | |||||||||
Real estate investments held for sale | 5,829 | — | 5,829 | |||||||||
Cash and cash equivalents | 19,984 | (6,717 | ) | (b) | 13,267 | |||||||
Restricted cash | 3,158 | — | 3,158 | |||||||||
Accounts receivable, net | 14,366 | — | 14,366 | |||||||||
Notes receivable | 39,311 | — | 39,311 | |||||||||
Construction receivables, including retentions | 31,277 | — | 31,277 | |||||||||
Construction contract costs and estimated earnings in excess of billings | 1,756 | — | 1,756 | |||||||||
Other assets | 72,055 | 1,260 | (a) | 73,315 | ||||||||
Total Assets | $ | 894,472 | $ | 2,822 | $ | 897,294 | ||||||
LIABILITIES AND EQUITY | ||||||||||||
Indebtedness, net | $ | 501,940 | — | $ | 501,940 | |||||||
Debt secured by real estate investments held for sale | 6,380 | — | 6,380 | |||||||||
Accounts payable and accrued liabilities | 6,379 | — | 6,379 | |||||||||
Construction payables, including retentions | 49,203 | — | 49,203 | |||||||||
Billings in excess of construction contract costs and estimated earnings | 2,893 | — | 2,893 | |||||||||
Other liabilities | 38,935 | 231 | (c) | 39,166 | ||||||||
Total Liabilities | 605,730 | 231 | 605,961 | |||||||||
Stockholders' equity: | ||||||||||||
Common stock, $0.01 par value, 500,000,000 shares authorized, 32,825,063 shares issued and outstanding | 328 | — | 328 | |||||||||
Additional paid-in capital | 133,915 | — | 133,915 | |||||||||
Distributions in excess of earnings | (45,114 | ) | (37 | ) | (d) | (45,151 | ) | |||||
Total stockholders' equity | 89,129 | (37 | ) | 89,092 | ||||||||
Noncontrolling interests | 199,613 | 2,628 | (e) | 202,241 | ||||||||
Total Equity | 288,742 | 2,591 | 291,333 | |||||||||
Total Liabilities and Equity | $ | 894,472 | $ | 2,822 | $ | 897,294 | ||||||
See accompanying notes to unaudited pro forma consolidated financial statements.
2
ARMADA HOFFLER PROPERTIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Acquisitions | |||||||||||||||||||||||||
Historical Six Months Ended June 30, 2016 | Richmond Tower Disposition | Retail Portfolio | Southgate Square | Southshore Shops | Pro Forma Six Months Ended June 30, 2016 | ||||||||||||||||||||
Revenues | |||||||||||||||||||||||||
Rental revenues | $ | 47,534 | $ | (156 | ) | (f) | $ | 447 | (g) | $ | 924 | (j) | $ | 449 | (k) | $ | 49,198 | ||||||||
General contracting and real estate services revenues | 70,003 | — | — | — | — | 70,003 | |||||||||||||||||||
Total revenues | 117,537 | (156 | ) | 447 | 924 | 449 | 119,201 | ||||||||||||||||||
Expenses | |||||||||||||||||||||||||
Rental expenses | 10,400 | (30 | ) | (f) | 72 | (g) | 101 | (j) | 65 | (k) | 10,608 | ||||||||||||||
Real estate taxes | 4,731 | (14 | ) | (f) | 62 | (g) | 73 | (j) | 37 | (k) | 4,889 | ||||||||||||||
General contracting and real estate services expenses | 67,062 | — | — | — | — | 67,062 | |||||||||||||||||||
Depreciation and amortization | 16,751 | — | 356 | (g) | 560 | (j) | 197 | (k) | 17,864 | ||||||||||||||||
General and administrative expenses | 4,708 | — | — | — | — | 4,708 | |||||||||||||||||||
Acquisition, development and other pursuit costs | 1,141 | — | (671 | ) | (h) | (346 | ) | (h) | (17 | ) | (h) | 107 | |||||||||||||
Impairment charges | 35 | — | — | — | — | 35 | |||||||||||||||||||
Total expenses | 104,828 | (44 | ) | (181 | ) | 388 | 282 | 105,273 | |||||||||||||||||
Operating income (loss) | 12,709 | (112 | ) | 628 | 536 | 167 | 13,928 | ||||||||||||||||||
Interest income | 904 | — | — | — | — | 904 | |||||||||||||||||||
Interest expense | (7,769 | ) | — | (63 | ) | (i) | (171 | ) | (j) | — | (8,003 | ) | |||||||||||||
Gain on real estate dispositions | 26,687 | (26,244 | ) | (f) | — | — | — | 443 | |||||||||||||||||
Change in fair value of interest rate derivatives | (2,762 | ) | — | — | — | — | (2,762 | ) | |||||||||||||||||
Other income | 119 | — | — | — | — | 119 | |||||||||||||||||||
Income before taxes | 29,888 | (26,356 | ) | 565 | 365 | 167 | 4,629 | ||||||||||||||||||
Income tax provision | (224 | ) | — | — | — | — | (224 | ) | |||||||||||||||||
Net income | 29,664 | (26,356 | ) | 565 | 365 | 167 | 4,405 | ||||||||||||||||||
Net income attributable to noncontrolling interests | (10,260 | ) | (1,607 | ) | |||||||||||||||||||||
Net income attributable to stockholders | $ | 19,404 | $ | 2,798 | |||||||||||||||||||||
Net income per share and unit: | |||||||||||||||||||||||||
Basic and diluted | $ | 0.62 | $ | 0.09 | |||||||||||||||||||||
Weighted average outstanding: | |||||||||||||||||||||||||
Common shares | 30,964 | 30,964 | |||||||||||||||||||||||
Operating partnership units | 16,570 | 17,789 | (l) | ||||||||||||||||||||||
Basic and diluted | 47,534 | 48,753 | |||||||||||||||||||||||
See accompanying notes to unaudited pro forma consolidated financial statements.
3
ARMADA HOFFLER PROPERTIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Dispositions | Acquisitions | ||||||||||||||||||||||||||||
Historical Year Ended December 31, 2015 | Richmond Tower | Oceaneering | Retail Portfolio | Southgate Square | Southshore Shops | Pro Forma Year Ended December 31, 2015 | |||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||
Rental revenues | $ | 81,172 | $ | (8,611 | ) | (f) | $ | (1,661 | ) | (m) | $ | 16,601 | (n) | $ | 2,882 | (j) | $ | 833 | (k) | $ | 91,216 | ||||||||
General contracting and real estate services revenues | 171,268 | — | — | — | — | — | 171,268 | ||||||||||||||||||||||
Total revenues | 252,440 | (8,611 | ) | (1,661 | ) | 16,601 | 2,882 | 833 | 262,484 | ||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||
Rental expenses | 19,204 | (1,148 | ) | (f) | (72 | ) | (m) | 2,965 | (n) | 290 | (j) | 126 | (k) | 21,365 | |||||||||||||||
Real estate taxes | 7,782 | (685 | ) | (f) | (117 | ) | (m) | 1,840 | (n) | 284 | (j) | 74 | (k) | 9,178 | |||||||||||||||
General contracting and real estate services expenses | 165,344 | — | — | — | — | — | 165,344 | ||||||||||||||||||||||
Depreciation and amortization | 23,153 | (1,584 | ) | (f) | (678 | ) | (m) | 8,466 | (n) | 1,680 | (j) | 393 | (k) | 31,430 | |||||||||||||||
General and administrative expenses | 8,397 | (4 | ) | (f) | (4 | ) | (m) | — | — | — | 8,389 | ||||||||||||||||||
Acquisition, development and other pursuit costs | 1,935 | — | — | (402 | ) | (h) | — | — | 1,533 | ||||||||||||||||||||
Impairment charges | 41 | — | — | — | — | — | 41 | ||||||||||||||||||||||
Total expenses | 225,856 | (3,421 | ) | (871 | ) | 12,869 | 2,254 | 593 | 237,280 | ||||||||||||||||||||
Operating income | 26,584 | (5,190 | ) | (790 | ) | 3,732 | 628 | 240 | 25,204 | ||||||||||||||||||||
Interest income | 126 | — | — | — | — | — | 126 | ||||||||||||||||||||||
Interest expense | (13,333 | ) | — | 259 | (m) | (956 | ) | (i) | (463 | ) | (j) | — | (14,493 | ) | |||||||||||||||
Loss on extinguishment of debt | (512 | ) | — | 102 | (m) | — | — | — | (410 | ) | |||||||||||||||||||
Gain on real estate dispositions | 18,394 | — | (4,987 | ) | (m) | — | — | — | 13,407 | ||||||||||||||||||||
Change in fair value of interest rate derivatives | (229 | ) | — | — | — | — | — | (229 | ) | ||||||||||||||||||||
Other income | 119 | — | — | — | — | — | 119 | ||||||||||||||||||||||
Income before taxes | 31,149 | (5,190 | ) | (5,416 | ) | 2,776 | 165 | 240 | 23,724 | ||||||||||||||||||||
Income tax benefit | 34 | — | — | — | — | — | 34 | ||||||||||||||||||||||
Net income | 31,183 | (5,190 | ) | (5,416 | ) | 2,776 | 165 | 240 | 23,758 | ||||||||||||||||||||
Net income attributable to noncontrolling interests | (11,541 | ) | (8,780 | ) | |||||||||||||||||||||||||
Net income attributable to stockholders | $ | 19,642 | $ | 14,978 | |||||||||||||||||||||||||
Net income per share and unit: | |||||||||||||||||||||||||||||
Basic and diluted | $ | 0.75 | $ | 0.51 | |||||||||||||||||||||||||
Weighted average outstanding: | |||||||||||||||||||||||||||||
Common shares | 26,006 | 29,239 | (o) | ||||||||||||||||||||||||||
Operating partnership units | 15,377 | 17,141 | (l) | ||||||||||||||||||||||||||
Basic and diluted | 41,383 | 46,380 | |||||||||||||||||||||||||||
See accompanying notes to unaudited pro forma consolidated financial statements.
4
ARMADA HOFFLER PROPERTIES, INC.
Notes to Pro Forma Consolidated Financial Statements
(In thousands)
(Unaudited)
1. | Preliminary Purchase Price Allocation |
The following table summarizes the estimated acquisition date fair values of the assets acquired and liabilities assumed of Southshore Shops:
Land | $ | 1,770 | |
Site improvements | 490 | ||
Buildings and improvements | 6,019 | ||
In-place leases | 1,140 | ||
Above-market leases | 120 | ||
Below-market leases | (190) | ||
Net assets acquired | $ | 9,349 | |
The preceding represents the Company’s preliminary allocation of the purchase price of Southshore Shops. The Company is in the process of completing the allocation of the purchase price of Southshore Shops, which the Company expects to complete later this year. The final allocation of the purchase price of Southshore Shops will be based on the Company’s assessment of the fair value of the acquired assets and liabilities assumed. The Company’s final purchase price allocation could differ materially from that presented herein.
2. | Pro Forma Adjustments |
(a) | Represents the acquired assets of Southshore Shops as described in Note 1. |
(b) | Represents the cash paid as partial consideration to acquire Southshore Shops. |
(c) | Represents the identified intangible liabilities of Southshore Shops as described in Note 1, as well as tenant security deposits. |
(d) | Represents the attribution to stockholders of acquisition costs directly related to Southshore Shops. |
(e) | Represents the fair value of the 189,160 Class A Units issued as partial consideration to acquire Southshore Shops and the attribution to noncontrolling interests of acquisition costs directly related to Southshore Shops. |
(f) | Represents the elimination of the revenues, expenses, gains and losses directly attributable to the Richmond Tower office building. |
(g) | Reflects the estimated revenues and expenses directly attributable to the acquired Retail Portfolio for the period January 1, 2016 through January 13, 2016. |
(h) | Represents the acquisition costs recognized in the historical consolidated financial statements. |
5
(i) | Reflects the estimated interest expense on the net borrowings under the Company’s unsecured credit facility to partially fund the acquisition of the Retail Portfolio. |
(j) | Represents the historical operations of Southgate Square as presented in the accompanying statements of revenues and certain operating expenses and reflects estimated amortization of above (below) market leases, depreciation of real estate assets, amortization of in-place lease assets and interest expense on assumed debt. The interim pro forma statement of operations also reflects the estimated revenues and expenses directly attributable to Southgate Square for the period April 1, 2016 through April 28, 2016. |
(k) | Represents the historical operations of Southshore Shops as presented in the accompanying statements of revenues and certain operating expenses and reflects estimated amortization of above (below) market leases, depreciation of real estate assets and amortization of in-place lease assets. |
(l) | Reflects the Class A Units issued in connection with the acquisitions of Southgate Square and Southshore Shops. |
(m) | Represents the elimination of the revenues, expenses, gains and losses directly attributable to the Oceaneering office building. |
(n) | Represents the historical operations of Retail Portfolio as presented in the accompanying statement of revenues and certain operating expenses and reflects estimated amortization of above (below) market leases, depreciation of real estate assets and amortization of in-place lease assets. |
(o) | Reflects the shares of common stock issued in the Offering. |
6