Attached files
| file | filename |
|---|---|
| 8-K - Lightstone Value Plus Real Estate Investment Trust, Inc. | v196003_8k.htm |
Exhibit
99.1
Lightstone
Value Plus Real Estate Investment Trust, Inc.
Unaudited
Pro Forma Consolidated Financial Information
The
unaudited pro forma consolidated statements of operations for the year ended
December 31, 2009 and the six months ended June 30, 2010 are presented
as if Lightstone Value Plus Real Estate Investment Trust, Inc.’s, (the
“Company”) disposition of its investment in Mill Run LLC (“Mill Run”) and Prime
Outlets Acquisition Company LLC (“POAC”) (the “Disposition”) occurred prior
January 1, 2009 and the effect was carried forward through the year and the
six-month period. The unaudited pro forma balance sheet as of June
30, 2010 reflects the impact of the Disposition on the consolidated financial
position.
The
unaudited pro forma consolidated statements of operations should be read in
conjunction with the historical financial statements and notes thereto as filed
in the Company’s 2009 Annual Report on Form 10-K and the Company’s Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2010. The
unaudited pro forma consolidated balance sheet should be read in conjunction
with the historical financial statements and notes thereto as filed in the
Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2010. The pro forma consolidated statements of operations and pro
Forma consolidated balance sheet are unaudited and are not necessarily
indicative of what the actual results of operations would have been had we
completed the above Disposition prior to January 1, 2009, nor does it purport to
represent our future operations.
Lightstone
Value Plus Real Estate Investment Trust, Inc.
Unaudited
Pro Forma Consolidated Balance Sheet
As
of June 30, 2010
|
As of June 30, 2010,
as reported (a)
|
Pro Forma
Adjustments (b)
|
Pro Forma as of
June 30, 2010
|
||||||||||
|
Assets
|
||||||||||||
|
Investment
property:
|
||||||||||||
|
Land
|
$ | 50,410,265 | $ | $ | 50,410,265 | |||||||
|
Building
|
206,807,213 | 206,807,213 | ||||||||||
|
Construction
in progress
|
50,365 | 50,365 | ||||||||||
|
Gross
investment property
|
257,267,843 | - | 257,267,843 | |||||||||
|
Less
accumulated depreciation
|
(13,666,330 | ) | (13,666,330 | ) | ||||||||
|
Net
investment property
|
243,601,513 | - | 243,601,513 | |||||||||
|
Investments
in unconsolidated affiliated real estate entities
|
109,460,592 | (104,445,114 |
)(c)
|
5,015,478 | ||||||||
|
Investment
in affiliate, at cost
|
5,672,996 | - | 5,672,996 | |||||||||
|
Cash
and cash equivalents
|
6,371,866 | 204,430,391 |
(d)
|
210,802,257 | ||||||||
|
Marketable
securities
|
160,278 | 57,206,781 | (d) | 57,367,059 | ||||||||
|
Restricted
escrows
|
7,222,269 | 1,889,270 | (d) | 9,111,539 | ||||||||
|
Tenant
accounts receivable, net
|
1,368,424 | 1,368,424 | ||||||||||
|
Other
accounts receivable
|
5,419 | 5,419 | ||||||||||
|
Acquired
in-place lease intangibles, net
|
495,438 | 495,438 | ||||||||||
|
Acquired above market lease
intangibles, net
|
173,900 | 173,900 | ||||||||||
|
Deferred
intangible leasing costs, net
|
318,398 | 318,398 | ||||||||||
|
Deferred
leasing costs, net
|
1,479,432 | 1,479,432 | ||||||||||
|
Deferred
financing costs, net
|
1,138,069 | 1,138,069 | ||||||||||
|
Interest
receivable from related parties
|
1,992,525 | 1,992,525 | ||||||||||
|
Prepaid
expenses and other assets
|
2,458,766 | 2,458,766 | ||||||||||
|
Total
Assets
|
$ | 381,919,885 | $ | 159,081,328 | $ | 541,001,213 | ||||||
|
Liabilities
and Stockholders' Equity
|
||||||||||||
|
Mortgage
payable
|
$ | 200,421,258 | $ | $ | 200,421,258 | |||||||
|
Accounts
payable and accrued expenses
|
3,450,035 | 3,450,035 | ||||||||||
|
Due
to sponsor
|
1,408,264 | 1,408,264 | ||||||||||
|
Loans
due to affiliate
|
496,471 | 496,471 | ||||||||||
|
Tenant
allowances and deposits payable
|
995,522 | 995,522 | ||||||||||
|
Prepaid
rental revenues
|
1,187,283 | 1,187,283 | ||||||||||
|
Acquired below market lease
intangibles, net
|
486,150 | 486,150 | ||||||||||
|
Total
Liabilities
|
208,444,983 | - | 208,444,983 | |||||||||
|
Commitments and
contingencies Stockholders' equity:
|
||||||||||||
|
Company's
Stockholders Equity:
|
||||||||||||
|
Preferred
shares, $0.01 par value, 10,000,000 shares authorized, none
outstanding
|
- | - | ||||||||||
|
Common
stock, $0.01 par value; 60,000,000 shares authorized,
31,828,941 shares issued and outstanding
|
318,289 | 318,289 | ||||||||||
|
Additional
paid-in-capital
|
283,548,296 | 283,548,296 | ||||||||||
|
Accumulated
other comprehensive income
|
12,245 | 12,245 | ||||||||||
|
Accumulated
distributions in excess of net loss
|
(146,645,334 | ) | 158,827,483 | 12,182,149 | ||||||||
|
Total
Company's stockholder’s equity
|
137,233,496 | 158,827,483 | 296,060,979 | |||||||||
|
Noncontrolling
interests
|
36,241,406 | 253,845 | (e) | 36,495,251 | ||||||||
|
Total
Stockholders' Equity
|
173,474,902 | 159,081,328 | 332,556,230 | |||||||||
|
Total
Liabilities and Stockholders' Equity
|
$ | 381,919,885 | $ | 159,081,328 | $ | 541,001,213 | ||||||
The
accompanying notes are an integral part of these unaudited pro forma financial
statements.
2
Lightstone
Value Plus Real Estate Investment Trust, Inc.
Unaudited
Pro Forma Consolidated Statement of Operations
For
the Six Months Ended June 30, 2010
|
For the Six Months
Ended June 30, 2010
as Originally
Reported (a)
|
Pro Forma
Adjustments (b)
|
Pro Forma For the
Six Months Ended
June 30, 2010
|
||||||||||
|
Revenues:
|
||||||||||||
|
Rental
income
|
$ | 14,410,625 | $ | $ | 14,410,625 | |||||||
|
Tenant
recovery income
|
2,361,081 | 2,361,081 | ||||||||||
|
Total
revenues
|
16,771,706 | - | 16,771,706 | |||||||||
|
Expenses:
|
||||||||||||
|
Property
operating expenses
|
6,365,320 | 6,365,320 | ||||||||||
|
Real
estate taxes
|
1,918,602 | 1,918,602 | ||||||||||
|
Loss
on long-lived assets
|
1,423,678 | 1,423,678 | ||||||||||
|
General
and administrative costs
|
5,261,572 | (1,906,657 | )( c) | 3,354,915 | ||||||||
|
Depreciation
and amortization
|
2,879,590 | 2,879,590 | ||||||||||
|
Total
operating expenses
|
17,848,762 | (1,906,657 | ) | 15,942,105 | ||||||||
|
Operating
(loss) income
|
(1,077,056 | ) | 1,906,657 | 829,601 | ||||||||
|
Other
income, net
|
365,238 | 365,238 | ||||||||||
|
Interest
income
|
2,133,184 | 2,133,184 | ||||||||||
|
Interest
expense
|
(5,973,125 | ) | (5,973,125 | ) | ||||||||
|
Gain
on sale of marketable securities
|
66,756 | 66,756 | ||||||||||
|
Loss
from investments in unconsolidated affiliated real estate
entities
|
(3,716,476 | ) | 3,592,881 | (d) | (123,595 | ) | ||||||
|
Net
income/(loss) from continuing operations
|
(8,201,479 | ) | 5,499,538 | (2,701,941 | ) | |||||||
|
Net
income from discontinued operations
|
16,845,653 | 16,845,653 | ||||||||||
|
Net
income
|
8,644,174 | 5,499,538 | 14,143,712 | |||||||||
|
Less:
net income attributable to noncontrolling interest
|
(126,490 | ) | (80,475 | )(e) | (206,965 | ) | ||||||
|
Net
income applicable to Company's common shares
|
$ | 8,517,684 | $ | 5,419,063 | $ | 13,936,747 | ||||||
|
Basic
and diluted net income/(loss) per Company's common share
|
||||||||||||
|
Continuing
operations
|
$ | (0.26 | ) | $ | (0.09 | ) | ||||||
|
Discontinued
operations
|
0.53 | 0.53 | ||||||||||
|
Net
income per Company's common share, basic and diluted
|
$ | 0.27 | $ | 0.44 | ||||||||
|
Weighted
average number of common shares outstanding, basic and
diluted
|
31,725,364 | 31,725,364 | ||||||||||
The accompanying notes are an integral
part of these unaudited pro forma financial statements.
3
Lightstone
Value Plus Real Estate Investment Trust, Inc.
Unaudited
Pro Forma Consolidated Statement of Operations
For
the Year Ended December 31, 2009
|
For the Year Ended
December 31, 2009
as Originally
Reported (a)
|
Pro Forma
Adjustments (b)
|
Pro Forma For the
Year Ended
December 31, 2009
|
||||||||||
|
Revenues:
|
||||||||||||
|
Rental
income
|
$ | 30,956,600 | $ | 4,972,612 |
(c)
|
$ | 35,929,212 | |||||
|
Tenant
recovery income
|
2,929,460 | 1,967,954 |
(c)
|
4,897,414 | ||||||||
|
Total
revenues
|
33,886,060 | 6,940,566 | 40,826,626 | |||||||||
|
Expenses:
|
||||||||||||
|
Property
operating expenses
|
13,564,676 | 2,706,616 |
(c)
|
16,271,292 | ||||||||
|
Real
estate taxes
|
3,757,062 | 475,414 |
(c)
|
4,232,476 | ||||||||
|
Impairment
of long lived assets, net of (gain)/loss on disposal
|
44,960,802 | 44,960,802 | ||||||||||
|
General
and administrative costs
|
8,627,264 | (2,189,857 | )(c)(d) | 6,437,407 | ||||||||
|
Depreciation
and amortization
|
7,285,198 | 2,458,162 |
(c)
|
9,743,360 | ||||||||
|
Total
operating expenses
|
78,195,002 | 3,450,335 | 81,645,337 | |||||||||
|
Operating
(loss) income
|
(44,308,942 | ) | 3,490,231 | (40,818,711 | ) | |||||||
|
Other
income, net
|
584,638 | 61,181 |
(c)
|
645,819 | ||||||||
|
Interest
income
|
4,186,168 | 14,220 |
(c)
|
4,200,388 | ||||||||
|
Interest
expense
|
(12,864,468 | ) | (1,667,997 |
)(c)
|
(14,532,465 | ) | ||||||
|
Gain
on sale of marketable securities
|
343,724 | 343,724 | ||||||||||
|
Other
than temporary impairment - marketable securities
|
(3,373,716 | ) | (3,373,716 | ) | ||||||||
|
Loss
from investments in unconsolidated affiliated real estate
entities
|
(10,310,720 | ) | 10,349,856 |
(e)
|
39,136 | |||||||
|
Net
income/(loss) from continuing operations
|
(65,743,316 | ) | 12,247,491 | (53,495,825 | ) | |||||||
|
Net
loss from discontinued operations
|
(360,328 | ) | 360,328 |
(c)
|
- | |||||||
|
Net
income/(loss)
|
(66,103,644 | ) | 12,607,819 | (53,495,825 | ) | |||||||
|
Less:
net income/(loss) attributable to noncontrolling interest
|
908,991 | (173,370 |
)(f)
|
735,621 | ||||||||
|
Net
income/(loss) applicable to Company's common shares
|
$ | (65,194,653 | ) | $ | 12,434,449 | $ | (52,760,204 | ) | ||||
|
Basic
and diluted net loss per Company's common share
|
||||||||||||
|
Continuing
operations
|
$ | (2.07 | ) | $ | (1.69 | ) | ||||||
|
Discontinued
operations
|
(0.01 | ) | - | |||||||||
|
Net
loss per Company's common share, basic and diluted
|
$ | (2.08 | ) | $ | (1.69 | ) | ||||||
|
Weighted
average number of common shares outstanding, basic and
diluted
|
31,276,697 | 31,276,697 | ||||||||||
The accompanying notes are an integral
part of these unaudited pro forma financial statements.
4
Lightstone
Value Plus Real Estate Investment Trust, Inc.
Unaudited
Notes to Pro Forma Consolidated Financial Statements
Unaudited
Pro Forma Consolidated Balance Sheet as of June 30, 2010
|
(a)
|
Represents
the Company’s historical financial position as of June 30,
2010.
|
|
(b)
|
Reflects
the pro forma adjustments associated with the Disposition as if it
occurred prior to January 2009.
|
|
(c)
|
Pro
forma adjustment reflects the removal of the investments in unconsolidated
affiliated real estate entities associated with the
Disposition.
|
|
(d)
|
Reflects
the pro forma adjustment of the net proceeds received related to the
Disposition of $263.5 million before allocation to non-controlling
interests, of which $204.4 million is in the form of cash, $57.2 million
in the form of Simon OP units and $1.9 million in the form of cash held in
escrow. The Company plans to use the net proceeds from the
Disposition to invest in other real estate investments in the
future. However, the potential impact is not reflected in the
unaudited pro forma consolidated statements of operations or balance
sheet.
|
|
(e)
|
Pro
forma adjustment to reflect the impact of the removal of the results of
operations allocated to noncontrolling interests associated with the
Disposition.
|
Unaudited
Pro Forma Consolidated Statement of Operations for the Six Months Ended June 30,
2010
|
(a)
|
Represents
the Company’s historical results of operations for the six months ended
June 30, 2010.
|
|
(b)
|
Reflects
the pro forma adjustments associated with the Disposition as if it
occurred prior to January 2009.
|
|
(c)
|
Reflects
the pro forma adjustment to asset management fees to remove the asset
management fee incurred and associated with the Disposition
assets. The Company’s advisor receives an annual asset
management fee of 0.95% of the average invested
assets.
|
|
(d)
|
Reflects
the pro forma adjustment associated with the removal of the Company’s
portion of net income/loss allocated from its investments in POAC and Mill
Run (excluding Grand Prairie and Livermore development projects) plus the
removal of the step up adjustment associated with the difference between
the carrying values of the net assets compared to fair
value.
|
|
(e)
|
Pro
forma adjustment to reflect the impact of the removal of the results of
operations allocated to noncontrolling interests associated with the
Disposition.
|
5
Lightstone
Value Plus Real Estate Investment Trust, Inc.
Unaudited
Notes to Pro Forma Consolidated Financial Statements
Unaudited
Pro Forma Consolidated Statement of Operations for the Year Ended December 31,
2009
|
(a)
|
Represents
the Company’s historical results of operations for the year ended December
31, 2009.
|
|
(b)
|
Reflects
the pro forma adjustments associated with the Disposition as if it
occurred prior to January 2009.
|
|
(c)
|
The
original disposition agreement included the disposition of the Company’s
St. Augustine Outlet Center. As a result, the Company reported
the results of operations of St. Augustine in discontinued operations for
the year ended December 31, 2009. On June 28, 2010, the
disposition agreement was amended to remove St. Augustine from the
Disposition. The pro forma adjustments reflect transferring the
results of operations of the St. Augustine Outlet Center from discontinued
operations to continuing operations as this asset no longer meets the
criteria for held for sale.
|
|
(d)
|
Reflects
the pro forma adjustment to asset management fees to remove the asset
management fee incurred and associated with the Disposition assets of
$2,257,963. The Company’s advisor receives an annual asset
management fee of 0.95% of the average invested
assets.
|
|
(e)
|
Reflects
the pro forma adjustment associated with the removal of the Company’s
portion of net income/loss allocated from its investments in POAC and Mill
Run (excluding Grand Prairie and Livermore development projects) plus the
removal of the step up adjustment associated with the difference between
the carrying values of the net assets compared to fair
value.
|
|
(f)
|
Pro
forma adjustment to reflect the impact of the removal of the results of
operations allocated to noncontrolling interests associated with the
Disposition.
|
6