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| ACC > SEC Filings for ACC > Form 8-K/A on 25-Aug-2008 | All Recent SEC Filings |
25-Aug-2008
Completion of Acquisition or Disposition of Assets, Financial S
We previously disclosed our acquisition of GMH Communities Trust on Form 8-K filed on June 13, 2008. This Form 8-K was filed without the requisite financial information. Accordingly, we are filing this Form 8-K/A to include such financial information.
(a) and (b) Financial Statements of Business Acquired and Pro Forma Financial Information
Unaudited Pro Forma Consolidated Statement of Operations for the Six Months Ended June 30, 2008
Notes to Unaudited Pro Forma Consolidated Statement of Operations for the Six Months Ended June 30, 2008
Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2007
Notes to Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2007
At the time of closing, the GMH student housing portfolio consisted of 42 wholly-owned properties containing 24,953 beds located in various markets throughout the country. The total purchase price of GMH was approximately $1.1 billion which was paid as follows: (i) the issuance of approximately $154.9 million of common stock of ACC and common units of the ACC Operating Partnership valued at $28.43 per share or unit; (ii) cash consideration of approximately $239.6 million which represented the payment of $3.36 per share for each GMH common share and each unit in the GMH Operating Partnership issued and outstanding as of the date of the Merger Agreement (February 11, 2008); (iii) the assumption of $598.8 million of fixed-rate mortgage debt, which includes a net debt discount of $9.4 million; and (iv) an estimated $52.7 million of merger costs incurred as it relates to severance payments, legal, banking, accounting and finance costs.
Under the terms of the Merger Agreement, each GMH common share and each unit in the GMH Operating Partnership issued and outstanding immediately prior to the effective time of the Transaction received cash consideration of $3.36 per share or unit and 0.07642 of a share of the Company's common stock, or at the election of the GMH Operating Partnership unitholder, 0.07642 of a unit in the ACC Operating Partnership.
Immediately prior to the closing of the Transaction, ACC formed a joint venture (the "New Fidelity Joint Venture") with a wholly-owned subsidiary of Fidelity Real Estate Growth Fund III, LP ("Fidelity") and 15 GMH student housing properties were contributed to the New Fidelity Joint Venture with an estimated value of $325.9 million. In the merger, ACC acquired GMH's equity interest in an existing joint venture with Fidelity that owns six properties. ACC serves as property manager for all of the joint venture properties and owns a 10% equity interest in these joint ventures.
The historical consolidated financial statements of ACC and GMH are contained in the companies' respective Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other information filed with the Securities and Exchange Commission. The unaudited pro forma consolidated financial statements should be read in conjunction with, and are qualified in their entirety by, the notes thereto and the historical consolidated financial statements of both companies, including the respective notes thereto.
The accompanying unaudited pro forma consolidated statements of operations for the six months ended June 30, 2008 and the year ended December 31, 2007 have been prepared to reflect the effect of the Transaction, The New Fidelity Joint Venture and the previous sale by GMH of approximately $96 million of assets related to its military housing division, as if such transactions had occurred on January 1, 2007.
The unaudited pro forma consolidated statements of operations also give effect to properties acquired by ACC during 2007 and 2008, ACC's October 2007 and April 2008 equity offerings, the reclassification of nine properties owned by GMH from continuing operations to discontinued operations and the formation of the New Fidelity Joint Venture, as if these transactions had occurred on January 1, 2007.
In the opinion of management, the pro forma consolidated financial information provides for all significant adjustments necessary to reflect the effects of the above transactions. The pro forma adjustments as presented, are based on estimates and certain information that is currently available to ACC's management.
The aggregate consideration paid for the merger was as follows:
Fair value of the ACC common stock issued $ 154,739 Fair value of common units of the ACC Operating Partnership issued 199 Cash consideration paid for GMH common shares and partnership units 239,616 Merger costs 52,681 Total consideration 447,235 Fair value of mortgage loans assumed 598,804 Total purchase price $ 1,046,039 |
AMERICAN CAMPUS COMMUNITIES, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2008
(UNAUDITED)
(in thousands, except per share amounts)
GMH GMH ACC ACC Pro
Historical Pre-Merger Acquisitions ACC Merger Forma ACC Pro
ACC Historical (A) Period (B) (C) Adjustments (D) Adjustments Forma
Revenues:
Wholly-owned properties $ 68,975 $ 46,597 $ 38,054 $ 325 $ (32,037 ) $ - $ 121,914
Expense reimbursements:
Related party - 687 - - - - 687
Third party - 1,592 1,347 - - - 2,939
On-campus participating - -
properties 10,692 - - - 10,692
Third party development - -
services 2,307 - - - 2,307
Third party development
services - on-campus
participating properties 72 - - - - - 72
Third party management services 2,144 609 440 - - - 3,193
Related party management fees - 209 137 - - 920 (E) 1,266
Resident services 799 - - - - - 799
Total revenues 84,989 49,694 39,978 325 (32,037 ) 920 143,869
Operating expenses:
Wholly-owned properties 30,623 22,538 18,038 72 (16,723 ) - 54,548
On-campus participating - -
properties 4,794 - - - 4,794
Third party development and -
management
services 4,436 1,502 2,528 - - 8,466
Reimbursed expenses - 2,279 1,347 - - - 3,626
General and administrative 5,371 5,839 3,723 - - - 14,933
Depreciation and amortization 19,143 5,051 3,185 175 (1,924 ) (330 ) (F) 25,300
Ground/facility leases 727 - - - - - 727
Total operating expenses 65,094 37,209 28,821 247 (18,647 ) (330 ) 112,394
Operating income 19,895 12,485 11,157 78 (13,390 ) 1,250 31,475
Nonoperating income and
(expenses):
Interest income 804 56 1,446 - (1,370 ) - 936
Interest expense (15,712 ) (13,039 ) (5,908 ) (198 ) 8,770 (2,464 ) (G) (28,551 )
Amortization of deferred 137
financing costs (759 ) (343 ) (1,078 ) (1 ) 714 (H) (1,330 )
(Loss) income from
unconsolidated joint ventures (255 ) (84 ) (92 ) - 865 - 434
Total nonoperating income (15,922 (13,410 (5,632 (199 8,402 (1,750 (28,511
(expenses) ) ) ) ) ) )
Income (loss) from continuing
operations before taxes and
minority interests 3,973 (925 ) 5,525 (121 ) (4,988 ) (500 ) 2,964
Income tax (provision) benefit (133 ) 20 - - - - (113 )
Minority interests (473 ) 313 - - - (160 ) (I) (320 )
Income (loss) from continuing
operations
$ 3,367 $ (592 ) $ 5,525 $ (121 ) $ (4,988 ) $ (660 ) $ 2,531
Basic earnings per share:
Income from continuing
operations per share $ 0.11 $ 0.06
Diluted earnings per share: (J)
Income from continuing
operations per share $ 0.11 $ 0.06
Weighted-average common shares
outstanding:
Basic 31,512,271 (K) 42,069,050
Diluted 33,272,354 (L) 43,835,367
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(A) Represents the historical results of operations of GMH for the three months ended March 31, 2008. As a result of the sale of the military housing division to Balfour Beatty on April 30, 2008, the military housing division was presented in discontinued operations.
(B) The pre-merger period represents the historical results of operations of GMH from April 1, 2008 through June 10, 2008.
(C) ACC acquired Pirate's Place and Sunnyside Commons in February 2008. The amounts in this column represent adjustments to reflect these properties' results of operations as if they were acquired as of January 1, 2007.
(D) Represents the reclassification of historical results of operations from continuing operations to discontinued operations for the nine disposition properties which are assumed to be classified as held for sale as of January 1, 2007, the 15 wholly-owned properties that are assumed to be contributed to the New Fidelity Joint Venture as of January 1, 2007, and operations associated with GMH's corporate office building, which was sold before the closing of the Transaction.
(E) Represents a 4% management fee ACC expects to earn on the 15 properties contributed to the New Fidelity Joint Venture.
(F) Represents the following adjustments to depreciation and amortization:
Elimination of GMH historical in-place lease amortization $ (1,570 )
Depreciation expense based on purchase price allocated to
building and furniture, fixtures and equipment, assuming 40 year
and seven year useful lives, respectively
1,240
$ (330 )
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(G) The following two adjustments represent an increase to interest expense as a result of (i) a new debt commitment entered into by ACC to partially finance the Transaction at current interest rates and (ii) a fair value adjustment recorded to account for the difference between the fixed rates and market rates on the mortgage debt assumed.
Borrowing under $100 million committed term loan facility $ 100,000
Average interest rate (LIBOR plus spread) 3.96 %
Interest expense $ 3,960
Pro-rated amount for the period from Jan. 1, 2008 - June 10, 2008
(162 days) $ 1,782
Fair value adjustment recorded upon assumption of mortgage debt
(net discount) $ 9,401
Average term to maturity of mortgage debt at the time of
assumption 6.2 years
Interest expense $ 1,516
Pro-rated amount for the period from Jan. 1, 2008 - June 10, 2008
(162 days) $ 682
Total interest expense adjustment related to new debt commitment
and fair value adjustment $ 2,464
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If market rates of interest on the variable debt changed by 1/8 of 1%, then the increase or decrease on the variable debt would be approximately $56 for the six months ended June 30, 2008.
costs:
Elimination of GMH's historical amortization of deferred finance
costs $ (1,284 )
Additional deferred finance costs of $4,126 incurred in
connection with the assumption of GMH mortgage loans; amortized
over an average term to maturity of 6.5 years and pro-rated for
the period from Jan. 1, 2008 - June 10, 2008 (162 days) 286
New financing costs of $1,276 incurred by ACC in connection with
the $100 million secured term loan; amortized over a three year
term to maturity and pro-rated for the period from Jan. 1, 2008 -
June 10, 2008 (162 days) 191
New financing costs of $259 incurred by ACC in connection with an
increase to the unsecured revolving credit facility from $115
million to $160 million; amortized over a 1.3 year term to
maturity and pro-rated for the period from Jan. 1, 2008 - June
10, 2008 (162 days) 93
$ (714 )
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(I) Represents the elimination of GMH's minority interest of $313 and an adjustment to ACC's minority interest of $153 due to a decrease in income from continuing operations before minority interests, offset by a lower weighted average minority interest resulting from additional common stock issued in connection with the Transaction and the assumption that the April 2008 equity offering occurred on January 1, 2007.
(J) Diluted earnings per share reflects the assumed conversion of common units and preferred units of limited partnership interest in the ACC Operating Partnership. Accordingly, the calculation includes the add back of preferred unit distributions as well as the pro rata share of the ACC Operating Partnership's income from continuing operations allocated to common units.
(K) Includes the number of shares assumed to be issued on January 1, 2007 in connection with the Transaction of 5,442,801, as well as the addition of 9,200,000 shares assumed to be issued on January 1, 2007 in connection with the April 2008 equity offering, offset by the removal of the weighted average shares impact of these two items (4,086,022).
(L) In addition to the items included in footnote (K), 7,004 common units of limited partnership interest in the ACC Operating Partnership assumed to be issued on January 1, 2007 in connection with the Transaction has been added, offset by the removal of the weighted average shares impact (770).
AMERICAN CAMPUS COMMUNITIES, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2007
(UNAUDITED)
(in thousands, except per share amounts)
ACC Sale of GMH ACC Merger
GMH Acquisitions Military Adjustments ACC Pro Forma ACC Pro
ACC Historical Historical (M) Housing (N) (O) Adjustments Forma
Revenues:
Wholly-owned properties $ 116,286 $ 188,889 $ 4,242 $ - $ (68,710 ) $ - $ 240,707
Expense reimbursements:
Related party - 86,860 - (85,122 ) - - 1,738
Third party - 8,942 - - - - 8,942
On-campus participating - -
properties 20,966 - - - 20,966
Third party development - -
services 5,346 - - - 5,346
Third party development
services - on-campus
participating properties 144 - - - - - 144
Third party management - -
services 2,821 2,877 - - 5,698
Related party management -
fees - 11,429 - (10,751 ) 1,747 (P) 2,425
Other related party income - 32,790 - (30,333 ) - - 2,457
Resident services 1,572 - - - - - 1,572
Total revenues 147,135 331,787 4,242 (126,206 ) (68,710 ) 1,747 289,995
Operating expenses:
Wholly-owned properties 55,155 94,434 1,924 - (40,935 ) - 110,578
On-campus participating - -
properties 9,379 - - - 9,379
Military housing - 9,447 - (9,447 ) - - -
Third party development and - -
management services 5,708 6,600 - - 12,308
Reimbursed expenses - 93,681 - (85,122 ) - - 8,559
General and administrative 17,660 19,351 - - (1,104 ) (1,844 ) (Q) 34,063
Depreciation and
amortization 30,444 44,679 2,841 (611 ) (16,581 ) 17,962 (R) 78,734
Ground/facility leases 1,622 - - - - - 1,622
Total operating expenses 119,968 268,192 4,765 (95,180 ) (58,620 ) 16,118 255,243
Operating income 27,167 63,595 (523 ) (31,026 ) (10,090 ) (14,371 ) 34,752
Nonoperating income and
(expenses):
Interest income 1,477 735 - (52 ) (77 ) - 2,083
Interest expense (27,871 ) (58,730 ) (1,078 ) 5,258 19,521 (5,476 ) (S) (68,376 )
Amortization of deferred 438
financing costs (1,340 ) (3,086 ) (25 ) - 1,381 (T) (2,632 )
Gain on sale to joint -
venture and development
land - 24,341 - - (24,341 ) (U) -
(Loss) income from
unconsolidated joint
ventures (108 ) 4,524 - (4,864 ) 128 - (320 )
Total nonoperating income
(expenses) (27,842 ) (32,216 ) (1,103 ) 342 20,010 (28,436 ) (69,245 )
(Loss) income from
continuing operations
before taxes and minority
interests (675 ) 31,379 (1,626 ) (30,684 ) 9,920 (42,807 ) (34,493 )
Income tax provision (756 ) (7,616 ) - 7,318 - - (1,054 )
Minority interests (255 ) (10,252 ) - - - 11,242 (V) 735
(Loss) income from
continuing operations $ (1,686 ) $ 13,511 $ (1,626 ) $ (23,366 ) $ 9,920 $ (31,565 ) $ (34,812 )
Basic earnings per share:
Loss from continuing
operations per share $ (0.07 ) $ (0.84 )
Diluted earnings per share:
(W)
Loss from continuing
operations per share $ (0.07 ) $ (0.83 )
Weighted-average common
shares outstanding:
Basic 24,186,213 (X) 41,533,124
Diluted 26,099,140 (Y) 43,453,055
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