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| AKR > SEC Filings for AKR > Form 8-K on 27-Jan-2012 | All Recent SEC Filings |
27-Jan-2012
Other Events, Financial Statements and Exhibits
Recent Developments
Property Acquisitions
During December 2011, Acadia Realty Trust (the "Company"), through Acadia Strategic Opportunity Fund III LLC ("Fund III"), acquired two properties, one located in Baltimore, Maryland and the other in metropolitan New York, for an aggregate purchase price of $34.7 million. These were previously disclosed as under contract as of September 30, 2011. In addition, the Company, also through Fund III, acquired a shopping center located in the metropolitan New York area for $11.3 million
During January 2012, the Company purchased a property located in Chicago, Illinois for $3.9 million.
Note Repurchase
During December 2011, pursuant to the terms of its outstanding 3.75% Convertible Notes due 2026 (the "Notes"), the Company repurchased $24.0 million of the Notes at face value plus accrued interest to the date of repurchase. Notes with a principal amount of $0.9 million remain outstanding after the repurchase.
The above acquisitions and repurchase of the Notes were funded with available Company working capital a portion of which came from the proceeds of the Company's November 2011 follow-on public offering that raised $45.2 million in gross proceeds and contributions from non-controlling interests.
Financial Statements.
During December 2011, the Company, through Fund III, and together with an unaffiliated joint venture partner, acquired Parkway Crossing ("Parkway") for $21.5 million, of which $14.0 million was funded with new mortgage debt obtained at closing and the balance of $7.5 million funded with cash. Fund III's share of cash required for the acquisition was $6.7 million. The following financial information with respect to Parkway together with the financial information filed with the Securities and Exchange Commission by the Company on Form 8-K on November 3, 2011, constitutes the required audited financial information and unaudited pro forma information with respect to a portion of the Company's acquisition activity since January 1, 2011.
Index to Financial Information
Parkway Crossing: Page
Independent Auditors' Report 2
Statements of Revenues and Certain Expenses for the Year Ended December 3
31, 2010
and the Nine Months Ended September 30, 2011 (unaudited)
Notes to Statements of Revenues and Certain Expenses 4
Unaudited Pro Forma Condensed Consolidated Financial Statements
As of, and For, the Nine Months Ended September 30, 2011
For the Year Ended December 31, 2010
Notes to Financial Statements
Independent Auditors' Report
To the Board of Directors and Management of
Acadia Realty Trust
White Plains, New York
We have audited the accompanying statement of revenues and certain expenses of Parkway Crossing (the "Company") for the year ended December 31, 2010. The statement of revenues and certain expenses is the responsibility of Acadia Realty Trust's management. Our responsibility is to express an opinion on the statement of revenues and certain expenses based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in a Form 8-K of Acadia Realty Trust. As described in Note 2, material amounts that would not be comparable to those resulting from the proposed future operations of Parkway Crossing are excluded from the statement of revenues and certain expenses and the statement of revenues and certain expenses is not intended to be a complete presentation of the Company's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of Parkway Crossing for the year ended December 31, 2010, on the basis of accounting described in Note 2.
/s/ BDO USA, LLP
January 5, 2012
Parkway Crossing
Statements of Revenues and Certain Expenses
(in thousands) Nine Months
ended
September
Year ended 30, 2011
December 31, 2010 (unaudited)
Revenues:
Rental revenue $ 1,733 $ 1,177
Reimbursement revenue 577 537
Other revenue 5 3
Total Revenues 2,315 1,717
Certain Expenses:
Operating expenses 483 350
Real estate taxes 216 160
Insurance expense 30 23
Total Certain Expenses 729 533
Revenues in Excess of Certain Expenses $ 1,586 $ 1,184
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See accompanying notes to the statements of revenues and certain expenses.
Notes to Statements of Revenues and Certain Expenses
1. Organization
Parkway Crossing ("Parkway") is a 27-tenant shopping center located on Perring Parkway in Baltimore County, Maryland.
Acadia Realty Trust (the "Trust") and subsidiaries (collectively, the "Company") is a fully integrated equity real estate investment trust focused on the acquisition, ownership, management and redevelopment of high-quality retail properties and urban/infill mixed-use properties with a strong retail component located primarily in high-barrier-to-entry, densely-populated metropolitan areas along the East Coast and in Chicago, Illinois.
During December 2011, the Company, through Acadia Strategic Opportunity Fund III LLC ("Fund III"), and together with an unaffiliated joint venture partner, acquired Parkway Crossing ("Parkway") for $21.5 million.
2. Basis of Presentation and Significant Accounting Policies
Presented herein are the statements of revenues and certain expenses of the Property.
The accompanying statements of revenues and certain expenses (the "Statements") have been prepared for the purpose of complying with the applicable rules and regulations of the Securities and Exchange Commission, Regulation S-X, Rule 3-14 and for inclusion in a Current Report on Form 8-K of the Company. The Statements are not intended to be a complete presentation of the revenues and expenses of the Property. Accordingly, the Statements exclude depreciation and amortization of fixed assets, amortization of intangible assets and liabilities and asset management fees not directly related to the future operations.
Revenue Recognition
Minimum rental revenue is recognized on a straight-line basis over the term of the lease. Certain of the leases acquired provide for the reimbursement to the owner of Parkway of real estate taxes, insurance and other property operating expenses. These reimbursements are recognized as revenue in the period the expenses are incurred.
Income Taxes
Parkway was organized as a limited liability company and is not directly subject to federal, state, or city income taxes.
Use of Estimates
The preparation of the Statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the statement of revenues and certain expenses and accompanying notes. Actual results could differ from those estimates.
3. Rental Income
The Company is the lessor to tenants under operating leases with expiration dates ranging from 2011 to 2032. The minimum rental amounts due under the leases are generally either subject to scheduled fixed increases or adjustments. The leases generally also require that the tenants reimburse the Company for the tenants pro rata share of increases in certain operating costs and real estate taxes. Future minimum rents to be received over the next five years and thereafter for noncancelable operating leases in effect at December 31, 2010 are as follows:
(in thousands)
2011 $ 1,623 2012 1,539 2013 1,384 2014 1,325 2015 1,254 Thereafter 2,872 Total $ 9,997 |
As of, and For, the Nine Months Ended September 30, 2011 and For the Year Ended December 31, 2010
During December 2011, the Company, through Fund III, and together with an unaffiliated joint venture partner, acquired Parkway Crossing ("Parkway") for $21.5 million, of which $14.0 million was funded with new mortgage debt obtained at closing and the balance of $7.5 million funded with cash. Fund III's share of cash required for the acquisition was $6.7 million.
The accompanying unaudited pro forma condensed consolidated balance sheet as of September 30, 2011 has been prepared as if the acquisition of Parkway occurred on September 30, 2011. The accompanying unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2011 and for the year ended December 31, 2010 have been prepared as if the acquisition of Parkway occurred as of January 1, 2010.
Our pro forma condensed consolidated financial statements are presented for informational purposes only and should be read in conjunction with the historical financial statements and related notes thereto filed with the U.S. Securities and Exchange Commission. In the opinion of the Company's management, the pro forma condensed consolidated financial statements include all significant necessary adjustments that can be factually supported to reflect the effect of the Acquisitions. The unaudited pro forma condensed consolidated financial statements are based on assumptions and estimates considered appropriate by the Company's management; however, they are not necessarily, and should not be assumed to be, an indication of the Company's financial position or results of operations that would have been achieved had the acquisition of Parkway been completed as of the date indicated or that may be achieved in the future.
ACADIA REALTY TRUST AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of September 30, 2011
(Amount in thousands, except Company Previous Acquisition of
share and per share data) Historical Acquisitions Parkway Company Pro Forma
(a) (b)
ASSETS
Operating real estate
Land $ 268,077 $ 28,544 $ - $ 296,621
Building and improvements 958,549 66,603 1,025,152
Construction in progress 3,983 3,983
1,230,609 95,147 1,325,756
Less: accumulated depreciation 200,840 200,840
Net operating real estate 1,029,769 95,147 1,124,916
Real estate under development 229,223 229,223
Notes receivable, net 41,304 41,304
Investments in and advances to
unconsolidated affiliates 78,420 6,728 85,148
Cash and cash equivalents 98,027 (34,514 ) (6,728 ) 56,785
Cash in escrow 27,553 27,553
Rents receivable, net 23,179 23,179
Deferred charges, net 25,696 25,696
Acquired lease intangibles, net 22,975 22,975
Prepaid expenses and other
assets 27,637 27,637
Assets of discontinued
operations 2,684 2,684
Total assets $ 1,606,467 $ 60,633 $ - $ 1,667,100
LIABILITIES
Mortgage notes payable $ 846,399 $ 47,133 $ - $ 893,532
Convertible notes payable, net 24,824 24,824
Distributions in excess of
income from, and investments in,
unconsolidated affiliates 21,401 21,401
Accounts payable and accrued
expenses 31,992 31,992
Dividends and distributions
payable 7,507 7,507
Acquired lease and other
intangibles, net 5,592 5,592
Other liabilities 18,914 18,914
Liabilities of discontinued
operations 289 289
Total liabilities 956,918 47,133 - 1,004,051
EQUITY
Shareholders' equity
Common shares, $.001 par value,
authorized 100,000,000 shares;
issued and outstanding
40,331,366 and 40,254,525
shares, respectively 40 40
Additional paid-in capital 303,783 303,783
Accumulated other comprehensive
loss (4,231 ) (4,231 )
Retained earnings 39,098 39,098
Total shareholders' equity 338,690 338,690
Noncontrolling interests 310,859 13,500 324,359
Total equity 649,549 13,500 663,049
Total liabilities and equity $ 1,606,467 $ 60,633 $ - $ 1,667,100
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The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.
ACADIA REALTY TRUST AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Nine Months Ended September 30, 2011
Company Previous Acquisition of
(dollars in thousands, except Historical Acquisitions Parkway Company
per share amounts) (aa) (bb) (cc) Pro Forma
Revenues
Rental income $ 85,564 $ 5,522 $ 91,086
Interest income 9,493 9,493
Expense reimbursements 16,213 1,633 17,846
Management fee income 1,169 1,169
Other 1,849 1,849
Total revenues 114,288 7,155 121,443
Operating Expenses
Property operating 22,565 543 23,108
Real estate taxes 13,792 1,220 15,012
General and administrative 17,147 17,147
Depreciation and amortization 24,626 1,560 26,186
Total operating expenses 78,130 3,323 81,453
Operating income 36,158 3,832 39,990
Equity in earnings of
unconsolidated affiliates 3,025 562 3,587
Other interest income 219 219
Gain on debt extinguishment 1,268 1,268
Interest and other finance
expense (27,598 ) (2,105 ) (29,703 )
Income from continuing
operations before income taxes 13,072 1,727 562 15,361
Income tax provision (7 ) (7 )
Income from continuing
operations 13,065 1,727 562 15,354
Discontinued Operations
Operating income from
discontinued operations 702 702
Impairment of asset (6,925 ) (6,925 )
Gain on sale of property 32,498 32,498
Income from discontinued
operations 26,275 26,275
Net income 39,340 1,727 562 41,629
Noncontrolling interests
Continuing operations 3,597 (391 ) (451 ) 2,755
Discontinued operations 731 731
Net loss (income) attributable
to noncontrolling interests 4,328 (391 ) (451 ) 3,486
Net income attributable to
Common Shareholders $ 43,668 $ 1,336 $ 111 $ 45,115
Basic Earnings per Share
Income from continuing
operations $ 0.41 $ 0.03 $ 0.00 $ 0.45
Income from discontinued
operations 0.67 - - 0.67
Basic earnings per share $ 1.08 $ 0.03 $ 0.00 $ 1.12
Diluted Earnings per Share
Income from continuing
operations $ 0.41 $ 0.03 $ 0.00 $ 0.45
Income from discontinued
operations 0.67 - - 0.67
Diluted earnings per share $ 1.08 $ 0.03 $ 0.00 $ 1.12
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The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.
ACADIA REALTY TRUST AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Year Ended December 31, 2010
Company Previous Acquisition of
(dollars in thousands, except Historical Acqusitions Parkway Company
per share amounts) (aa) (bb) (cc) Pro Forma
Revenues
Rental income $ 106,913 $ 9,276 $ 116,189
Mortgage interest income 19,161 19,161
Expense reimbursements 22,030 2,848 24,878
Lease termination income 290 290
Management fee income 1,424 1,424
Other 2,140 2,140
Total revenues 151,958 12,124 164,082
Operating Expenses
Property operating 30,914 831 31,745
Real estate taxes 18,245 2,171 20,416
General and administrative 20,220 20,220
Depreciation and amortization 40,115 2,486 42,601
Total operating expenses 109,494 5,488 114,982
Operating income 42,464 6,636 49,100
Equity in earnings of
unconsolidated affiliates 10,971 749 11,720
Other interest income 408 408
Gain from bargain purchase 33,805 33,805
Interest and other finance
expense (34,471 ) (2,993 ) (37,464 )
Income from continuing
operations before income taxes 53,177 3,643 749 57,569
Income tax provision (2,890 ) (2,890 )
Income from continuing
operations 50,287 3,643 749 54,679
Discontinued Operations
Operating income from
discontinued operations 380 380
Income from discontinued
operations 380 380
Net income 50,667 3,643 749 55,059
Noncontrolling interests
Continuing operations (20,307 ) (1,926 ) (602 ) (22,835 )
Discontinued operations (303 ) (303 )
Net income attributable to
noncontrolling interests (20,610 ) (1,926 ) (602 ) (23,138 )
Net income attributable to
Common Shareholders $ 30,057 $ 1,717 $ 147 $ 31,921
Basic Earnings per Share
Income from continuing
operations $ 0.75 $ 0.04 $ 0.00 $ 0.80
Income from discontinued
operations - - - -
Basic earnings per share $ 0.75 $ 0.04 $ 0.00 $ 0.80
Diluted Earnings per Share
Income from continuing
operations $ 0.74 $ 0.04 $ 0.00 $ 0.80
Income from discontinued
operations - - - -
Diluted earnings per share $ 0.74 $ 0.04 $ 0.00 $ 0.80
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