UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of report (Date of earliest event reported) December 20, 2011
Equity One, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Maryland
(State or Other Jurisdiction of Incorporation)
001-13499 | 52-1794271 | |
(Commission File Number) | (IRS Employer Identification No. |
1600 NE Miami Gardens Drive
North Miami Beach, Florida 33179
(Address of Principal Executive Offices) (Zip Code)
(305) 947-1664
(Registrants Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c) |
Item 2.01 Completion of Acquisition or Disposition of Assets.
On December 20, 2011, Equity One, Inc. (Equity One) completed its previously announced sale of 36 shopping centers, comprising 3.9 million square feet, for a total sales price of $473.1 million (inclusive of assumed debt of $145.8 million as of the date of sale) to an affiliate of Blackstone Real Estate Partners VII. The shopping centers sold in this transaction are predominantly located in the Atlanta, Tampa and Orlando markets, with additional properties located in the states of North Carolina, South Carolina, Alabama, Tennessee and Maryland. The sale occurred pursuant to the terms of the Purchase and Sale Agreement, dated as of September 26, 2011, by and between Equity One, certain of its subsidiaries and affiliates named therein, as sellers, and BRE Southeast Retail Holdings, LLC, an affiliate of Blackstone Real Estate Partners VII L.P., previously filed as Exhibit 10.1 to Equity Ones Form 10-Q for the quarterly period ended September 30, 2011.
The operations of these properties and the related assets and liabilities are included in discontinued operations in the accompanying unaudited pro forma condensed consolidated financial statements for all periods presented, unless otherwise noted. In connection with this sale, Equity One recognized an impairment loss of $33.8 million during the three and nine months ended September 30, 2011, which amount was in the estimated range previously disclosed by Equity One.
ITEM 9.01 Financial Statements and Exhibits.
(b) | Pro Forma Financial Information |
The unaudited pro forma condensed consolidated balance sheet of Equity One as of September 30, 2011 and unaudited pro forma condensed consolidated statements of operations of Equity One for the nine months ended September 30, 2011 and the years ended December 31, 2010, 2009 and 2008, including notes thereto, are filed as Exhibit 99.1 hereto and incorporated herein by reference.
(d) | Exhibits |
Exhibit No. |
Description | |
99.1 | Unaudited pro forma condensed consolidated balance sheet of Equity One as of September 30, 2011 and unaudited pro forma condensed consolidated statements of operations of Equity One for the nine months ended September 30, 2011 and the years ended December 31, 2010, 2009 and 2008, including notes thereto. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
December 27, 2011 | EQUITY ONE, INC. | |||||
/s/ Mark Langer | ||||||
Mark Langer | ||||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
EXHIBIT INDEX
Exhibit No. |
Description | |
99.1 | Unaudited pro forma condensed consolidated balance sheet of Equity One as of September 30, 2011 and unaudited pro forma condensed consolidated statements of operations of Equity One for the nine months ended September 30, 2011 and the years ended December 31, 2010, 2009 and 2008, including notes thereto. |
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
On December 20, 2011, Equity One, Inc. (Equity One or the Company) completed the sale of 36 shopping centers for a total sales price of $473.1 million to BRE Southeast Retail Holdings, LLC, an affiliate of Blackstone Real Estate Partners VII (the Sale). The following unaudited pro forma condensed consolidated financial statements have been prepared to reflect the effect of the Sale as described in Item 2.01 of the Current Report on Form 8-K with which this Exhibit 99.1 is filed.
The following unaudited pro forma financial statements of Equity One are presented to comply with Article 11 of Regulation S-X and follow guidelines of the Securities and Exchange Commission (SEC). The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2011 and the years ended December 31, 2010, 2009 and 2008, are based on the Companys historical consolidated statements of operations, and give effect to the Sale as if it had occurred on January 1, 2008. The unaudited pro forma condensed consolidated balance sheet as of September 30, 2011 is based on Equity Ones historical balance sheet as of that date, and gives effect to the Sale as if it had occurred on September 30, 2011.
The unaudited pro forma condensed consolidated financial statements presented below are based on the assumptions and adjustments set forth in the notes thereto. The unaudited pro forma adjustments made in the compilation of the unaudited pro forma condensed consolidated financial statements were directly attributable to the Sale, are factually supportable, are based upon available information and assumptions that the Company considers to be reasonable, and have been made solely for purposes of developing such unaudited pro forma financial information for illustrative purposes in compliance with the disclosure requirements of the SEC. The unaudited pro forma condensed consolidated financial information is presented for informational purposes only and should not be considered indicative of actual results that would have been achieved had the Sale actually been consummated on the dates indicated and does not purport to be indicative of the financial condition as of any future date or results of operation for any future period.
The unaudited pro forma condensed consolidated financial information should be read in conjunction with the Companys audited consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2010 filed with the SEC on March 11, 2011 and the unaudited consolidated financial statements and notes thereto included in the Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 filed with the SEC on November 9, 2011.
Equity One, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2011
(in thousands, except per share data)
Equity One, Inc. as reported (a) |
Pro Forma Adjustments (b) |
Pro Forma | ||||||||||
ASSETS |
||||||||||||
Properties: |
||||||||||||
Income producing |
$ | 2,685,314 | $ | | $ | 2,685,314 | ||||||
Less: accumulated depreciation |
(286,296 | ) | | (286,296 | ) | |||||||
|
|
|
|
|
|
|||||||
Income producing properties, net |
2,399,018 | | 2,399,018 | |||||||||
Construction in progress and land held for development |
69,135 | | 69,135 | |||||||||
Properties held for sale |
501,642 | (466,870 | ) c | 34,772 | ||||||||
|
|
|
|
|
|
|||||||
Properties, net |
2,969,795 | (466,870 | ) | 2,502,925 | ||||||||
Cash and cash equivalents |
30,602 | | 30,602 | |||||||||
Cash held in escrow |
47,321 | 167,714 | d | 215,035 | ||||||||
Accounts and other receivables, net |
18,198 | | 18,198 | |||||||||
Investments in and advances to unconsolidated joint ventures |
50,216 | | 50,216 | |||||||||
Mezzanine loan receivable, net |
45,284 | | 45,284 | |||||||||
Goodwill |
9,117 | | 9,117 | |||||||||
Other assets |
168,417 | (1,863 | ) c | 166,554 | ||||||||
|
|
|
|
|
|
|||||||
TOTAL ASSETS |
$ | 3,338,950 | $ | (301,019 | ) | $ | 3,037,931 | |||||
|
|
|
|
|
|
|||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||
Liabilities: |
||||||||||||
Notes payable: |
||||||||||||
Mortgage notes payable |
$ | 436,048 | $ | | $ | 436,048 | ||||||
Unsecured senior notes payable |
691,136 | | 691,136 | |||||||||
Unsecured revolving credit facilities |
177,500 | (130,219 | ) d | 47,281 | ||||||||
|
|
|
|
|
|
|||||||
1,304,684 | (130,219 | ) | 1,174,465 | |||||||||
Unamortized premium on notes payable, net |
397 | | 397 | |||||||||
|
|
|
|
|
|
|||||||
Total notes payable |
1,305,081 | (130,219 | ) | 1,174,862 | ||||||||
Other liabilities: |
||||||||||||
Accounts payable and accrued expenses |
53,880 | 4,218 | e | 58,098 | ||||||||
Tenant security deposits |
8,406 | | 8,406 | |||||||||
Deferred tax liabilities, net |
8,495 | 2,932 | e | 11,427 | ||||||||
Other liabilities |
112,566 | | 112,566 | |||||||||
Liabilities associated with assets held for sale |
194,630 | (174,759 | ) c | 19,871 | ||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
1,683,058 | (297,828 | ) | 1,385,230 | ||||||||
Redeemable noncontrolling interests |
3,852 | | 3,852 | |||||||||
Commitments and contingencies |
| | | |||||||||
Stockholders equity: |
||||||||||||
Preferred stock, $0.01 par value 10,000 shares authorized but unissued |
| | | |||||||||
Common stock, $0.01 par value 150,000 shares authorized, 112,551 shares issued and outstanding at September 30, 2011. |
1,126 | | 1,126 | |||||||||
Additional paid-in capital |
1,585,964 | | 1,585,964 | |||||||||
Distributions in excess of earnings |
(141,776 | ) | (3,191 | ) c,d | (144,967 | ) | ||||||
Accumulated other comprehensive loss |
(1,302 | ) | | (1,302 | ) | |||||||
|
|
|
|
|
|
|||||||
Total stockholders equity of Equity One, Inc |
1,444,012 | (3,191 | ) | 1,440,821 | ||||||||
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|
|
|
|||||||
Noncontrolling interests |
208,028 | | 208,028 | |||||||||
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|
|
|
|
|
|||||||
Total stockholders equity |
1,652,040 | (3,191 | ) | 1,648,849 | ||||||||
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|
|
|
|
|||||||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |
$ | 3,338,950 | $ | (301,019 | ) | $ | 3,037,931 | |||||
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.
Equity One, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the nine months ended September 30, 2011
(in thousands, except per share data)
Equity One, Inc. as reported (f) |
Pro Forma Adjustments |
Pro Forma | ||||||||||
REVENUE: |
||||||||||||
Minimum rent |
$ | 166,854 | $ | | $ | 166,854 | ||||||
Expense recoveries |
48,596 | | 48,596 | |||||||||
Percentage rent |
2,822 | | 2,822 | |||||||||
Management and leasing services |
1,590 | | 1,590 | |||||||||
|
|
|
|
|
|
|||||||
Total revenue |
219,862 | | 219,862 | |||||||||
COSTS AND EXPENSES: |
||||||||||||
Property operating |
62,907 | | 62,907 | |||||||||
Rental property depreciation and amortization |
59,182 | | 59,182 | |||||||||
General and administrative |
38,402 | | 38,402 | |||||||||
|
|
|
|
|
|
|||||||
Total costs and expenses |
160,491 | | 160,491 | |||||||||
|
|
|
|
|
|
|||||||
INCOME BEFORE OTHER INCOME AND EXPENSE, TAX AND DISCONTINUED OPERATIONS |
59,371 | | 59,371 | |||||||||
OTHER INCOME AND EXPENSE: |
||||||||||||
Investment income |
3,175 | | 3,175 | |||||||||
Equity in income in unconsolidated joint ventures |
4,694 | | 4,694 | |||||||||
Other income |
255 | | 255 | |||||||||
Interest expense |
(49,899 | ) | 1,074 | g | (48,825 | ) | ||||||
Amortization of deferred financing fees |
(1,660 | ) | | (1,660 | ) | |||||||
Gain on bargain purchase |
30,561 | | 30,561 | |||||||||
Gain on sale of real estate |
5,565 | | 5,565 | |||||||||
Gain on extinguishment of debt |
255 | | 255 | |||||||||
Impairment loss |
(20,701 | ) | | (20,701 | ) | |||||||
|
|
|
|
|
|
|||||||
INCOME FROM CONTINUING OPERATIONS BEFORE TAX AND DISCONTINUED OPERATIONS |
31,616 | 1,074 | 32,690 | |||||||||
Income tax benefit of taxable REIT subsidiaries |
3,480 | | 3,480 | |||||||||
|
|
|
|
|
|
|||||||
INCOME FROM CONTINUING OPERATIONS |
$ | 35,096 | $ | 1,074 | $ | 36,170 | ||||||
|
|
|
|
|
|
|||||||
EARNINGS PER COMMON SHARE - BASIC: |
||||||||||||
Continuing operations |
$ | 0.25 | $ | 0.01 | $ | 0.26 | ||||||
|
|
|
|
|
|
|||||||
Number of Shares Used in Computing Basic Earnings per Share |
109,267 | 109,267 | 109,267 | |||||||||
|
|
|
|
|
|
|||||||
EARNINGS PER COMMON SHARE - DILUTED: |
||||||||||||
Continuing operations |
$ | 0.25 | $ | 0.01 | $ | 0.26 | ||||||
|
|
|
|
|
|
|||||||
Number of Shares Used in Computing Diluted Earnings per Share |
109,424 | 109,424 | 109,424 | |||||||||
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.
Equity One, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the year ended December 31, 2010
(in thousands, except per share data)
Equity One, Inc. as reported (h) |
Amounts transferred to discontinued operations (i) |
As adjusted | Pro Forma Adjustments |
Pro Forma | ||||||||||||||||
REVENUE: |
||||||||||||||||||||
Minimum rent |
$ | 221,632 | $ | (43,869 | ) | $ | 177,763 | | $ | 177,763 | ||||||||||
Expense recoveries |
60,350 | (10,155 | ) | 50,195 | | 50,195 | ||||||||||||||
Percentage rent |
1,685 | (141 | ) | 1,544 | | 1,544 | ||||||||||||||
Management and leasing services |
1,557 | | 1,557 | | 1,557 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total revenue |
285,224 | (54,165 | ) | 231,059 | | 231,059 | ||||||||||||||
COSTS AND EXPENSES: |
||||||||||||||||||||
Property operating |
78,852 | (15,385 | ) | 63,467 | | 63,467 | ||||||||||||||
Rental property depreciation and amortization |
67,339 | (16,773 | ) | 50,566 | | 50,566 | ||||||||||||||
General and administrative |
42,041 | (54 | ) | 41,987 | | 41,987 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total costs and expenses |
188,232 | (32,212 | ) | 156,020 | | 156,020 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
INCOME BEFORE OTHER INCOME AND EXPENSE, TAX AND DISCONTINUED OPERATIONS |
96,992 | (21,953 | ) | 75,039 | | 75,039 | ||||||||||||||
OTHER INCOME AND EXPENSE: |
||||||||||||||||||||
Investment income |
937 | | 937 | | 937 | |||||||||||||||
Equity in loss in unconsolidated joint ventures |
(116 | ) | | (116 | ) | | (116 | ) | ||||||||||||
Other income |
648 | | 648 | | 648 | |||||||||||||||
Interest expense |
(77,922 | ) | 13,668 | (64,254 | ) | 236 | g | (64,018 | ) | |||||||||||
Amortization of deferred financing fees |
(1,924 | ) | 15 | (1,909 | ) | | (1,909 | ) | ||||||||||||
Gain on sale of real estate |
254 | | 254 | | 254 | |||||||||||||||
Gain on extinguishment of debt |
63 | (30 | ) | 33 | | 33 | ||||||||||||||
Impairment loss |
(687 | ) | 130 | (557 | ) | | (557 | ) | ||||||||||||
|
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|
|
|
|
|
|
|
|
|||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE TAX AND DISCONTINUED OPERATIONS |
18,245 | (8,170 | ) | 10,075 | 236 | 10,311 | ||||||||||||||
Income tax benefit of taxable REIT subsidiaries |
3,765 | (2,038 | ) | 1,727 | | 1,727 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
INCOME FROM CONTINUING OPERATIONS |
$ | 22,010 | $ | (10,208 | ) | $ | 11,802 | $ | 236 | $ | 12,038 | |||||||||
|
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|
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|
|||||||||||
EARNINGS (LOSS) PER COMMON SHARE - BASIC: |
||||||||||||||||||||
Continuing operations |
$ | 0.24 | $ | (0.11 | ) | $ | 0.13 | $ | 0.00 | $ | 0.13 | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Number of Shares Used in Computing Basic Earnings (Loss) per Share |
91,536 | 91,536 | 91,536 | 91,536 | 91,536 | |||||||||||||||
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|
|||||||||||
EARNINGS (LOSS) PER COMMON SHARE - DILUTED: |
||||||||||||||||||||
Continuing operations |
$ | 0.24 | $ | (0.11 | ) | $ | 0.13 | $ | 0.00 | $ | 0.13 | |||||||||
|
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|
|
|
|
|
|
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|
|||||||||||
Number of Shares Used in Computing Diluted Earnings (Loss) per Share |
91,710 | 91,710 | 91,710 | 91,710 | 91,710 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.
Equity One, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the year ended December 31, 2009
(in thousands, except per share data)
Equity One, Inc. as reported (h) |
Amounts transferred to discontinued operations (i) |
As adjusted | ||||||||||
REVENUE: |
||||||||||||
Minimum rent |
$ | 209,857 | $ | (45,904 | ) | $ | 163,953 | |||||
Expense recoveries |
57,961 | (10,478 | ) | 47,483 | ||||||||
Percentage rent |
1,679 | (54 | ) | 1,625 | ||||||||
Management and leasing services |
1,675 | | 1,675 | |||||||||
|
|
|
|
|
|
|||||||
Total revenue |
271,172 | (56,436 | ) | 214,736 | ||||||||
COSTS AND EXPENSES: |
||||||||||||
Property operating |
78,070 | (15,389 | ) | 62,681 | ||||||||
Rental property depreciation and amortization |
62,122 | (18,512 | ) | 43,610 | ||||||||
General and administrative |
38,835 | (375 | ) | 38,460 | ||||||||
|
|
|
|
|
|
|||||||
Total costs and expenses |
179,027 | (34,276 | ) | 144,751 | ||||||||
|
|
|
|
|
|
|||||||
INCOME BEFORE OTHER INCOME AND EXPENSE, TAX AND DISCONTINUED OPERATIONS |
92,145 | (22,160 | ) | 69,985 | ||||||||
OTHER INCOME AND EXPENSE: |
||||||||||||
Investment income |
10,154 | | 10,154 | |||||||||
Equity in loss in unconsolidated joint ventures |
(88 | ) | | (88 | ) | |||||||
Other income |
1,503 | | 1,503 | |||||||||
Interest expense |
(73,450 | ) | 17,411 | (56,039 | ) | |||||||
Amortization of deferred financing fees |
(1,520 | ) | 61 | (1,459 | ) | |||||||
Gain on acquisition of controlling interest in subsidiary |
27,501 | | 27,501 | |||||||||
Gain on sale of real estate |
| | | |||||||||
Gain on extinguishment of debt |
12,345 | | 12,345 | |||||||||
Impairment loss |
(368 | ) | | (368 | ) | |||||||
|
|
|
|
|
|
|||||||
INCOME FROM CONTINUING OPERATIONS BEFORE TAX AND DISCONTINUED OPERATIONS |
68,222 | (4,688 | ) | 63,534 | ||||||||
Income tax benefit of taxable REIT subsidiaries |
5,017 | (1,898 | ) | 3,119 | ||||||||
|
|
|
|
|
|
|||||||
INCOME FROM CONTINUING OPERATIONS |
$ | 73,239 | $ | (6,586 | ) | $ | 66,653 | |||||
|
|
|
|
|
|
|||||||
EARNINGS (LOSS) PER COMMON SHARE - BASIC: |
||||||||||||
Continuing operations |
$ | 0.90 | $ | (0.08 | ) | $ | 0.82 | |||||
|
|
|
|
|
|
|||||||
Number of Shares Used in Computing Basic Earnings (Loss) per Share |
83,290 | 83,290 | 83,290 | |||||||||
|
|
|
|
|
|
|||||||
EARNINGS (LOSS) PER COMMON SHARE - DILUTED: |
||||||||||||
Continuing operations |
$ | 0.89 | $ | (0.08 | ) | $ | 0.81 | |||||
|
|
|
|
|
|
|||||||
Number of Shares Used in Computing Diluted Earnings (Loss) per Share |
83,857 | 83,857 | 83,857 | |||||||||
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.
Equity One, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the year ended December 31, 2008
(in thousands, except per share data)
Equity One, Inc. as reported (h, j) |
Amounts transferred to discontinued operations (i) |
As adjusted | ||||||||||
REVENUE: |
||||||||||||
Minimum rent |
$ | 181,798 | $ | (19,099 | ) | $ | 162,699 | |||||
Expense recoveries |
51,753 | (5,537 | ) | 46,216 | ||||||||
Percentage rent |
1,901 | (113 | ) | 1,788 | ||||||||
Management and leasing services |
1,789 | | 1,789 | |||||||||
|
|
|
|
|
|
|||||||
Total revenue |
237,241 | (24,749 | ) | 212,492 | ||||||||
COSTS AND EXPENSES: |
||||||||||||
Property operating |
64,190 | (9,718 | ) | 54,472 | ||||||||
Rental property depreciation and amortization |
45,429 | (4,791 | ) | 40,638 | ||||||||
General and administrative |
31,957 | | 31,957 | |||||||||
|
|
|
|
|
|
|||||||
Total costs and expenses |
141,576 | (14,509 | ) | 127,067 | ||||||||
|
|
|
|
|
|
|||||||
INCOME BEFORE OTHER INCOME AND EXPENSE, TAX AND DISCONTINUED OPERATIONS |
95,665 | (10,240 | ) | 85,425 | ||||||||
OTHER INCOME AND EXPENSE: |
||||||||||||
Investment income |
10,220 | | 10,220 | |||||||||
Equity in loss in unconsolidated joint ventures |
108 | | 108 | |||||||||
Other income |
967 | | 967 | |||||||||
Interest expense |
(60,851 | ) | 2,115 | (58,736 | ) | |||||||
Amortization of deferred financing fees |
(1,629 | ) | 20 | (1,609 | ) | |||||||
Gain on sale of real estate |
21,542 | | 21,542 | |||||||||
Gain on extinguishment of debt |
6,473 | | 6,473 | |||||||||
Impairment loss |
(37,497 | ) | 2,385 | (35,112 | ) | |||||||
|
|
|
|
|
|
|||||||
INCOME FROM CONTINUING OPERATIONS BEFORE TAX AND DISCONTINUED OPERATIONS |
34,998 | (5,720 | ) | 29,278 | ||||||||
Income tax benefit of taxable REIT subsidiaries |
(1,015 | ) | 190 | (825 | ) | |||||||
|
|
|
|
|
|
|||||||
INCOME FROM CONTINUING OPERATIONS |
33,983 | (5,530 | ) | 28,453 | ||||||||
|
|
|
|
|
|
|||||||
EARNINGS (LOSS) PER COMMON SHARE - BASIC: |
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Continuing operations |
$ | 0.45 | $ | (0.07 | ) | $ | 0.38 | |||||
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Number of Shares Used in Computing Basic Earnings (Loss) per Share |
74,075 | 74,075 | 74,075 | |||||||||
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EARNINGS (LOSS) PER COMMON SHARE - DILUTED: |
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Continuing operations |
$ | 0.45 | $ | (0.07 | ) | $ | 0.38 | |||||
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Number of Shares Used in Computing Diluted Earnings (Loss) per Share |
74,098 | 74,098 | 74,098 | |||||||||
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The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.
Equity One, Inc.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Pro Forma Adjustments
The following pro forma adjustments are included in the unaudited pro forma condensed consolidated balance sheet and/or the unaudited pro forma condensed consolidated statements of operations:
a) | Reflects the Companys consolidated balance sheet as of September 30, 2011, as contained in the historical financial statements and notes thereto presented in the Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2011. |
b) | The pro forma adjustments represent the elimination of the assets and liabilities of the 36 shopping centers sold as if the Sale had occurred on September 30, 2011, and the receipt of proceeds of approximately $473.1 million, net of adjustments and costs of approximately $6.0 million, including mortgages assumed by the buyer of approximately $145.8 million as of the date of sale. The pro forma adjustments also reflect the satisfaction of an additional $27.2 million in mortgage debt related to the sold properties which occurred subsequent to September 30, 2011. |
c) | The pro forma adjustments reflect the elimination of the assets and liabilities of the 36 shopping centers sold on December 20, 2011. |
d) | The pro forma adjustments reflect the application of the net cash proceeds received in connection with the Sale. |
For purposes of the pro forma adjustment, it is assumed that net cash proceeds are used to repay amounts outstanding under the Companys unsecured revolving credit facility. Proceeds related to certain of the shopping centers are assumed to be placed in escrow held by a qualified intermediary in anticipation of the acquisition of replacement properties in tax-free exchanges under Section 1031 of the Internal Revenue Code. Additionally, $23.4 million of proceeds are assumed to be held in escrow in connection with certain requirements under the Foreign Investment in Real Property Tax Act.
In accordance with Securities and Exchange Commission guidance, the pro forma condensed consolidated statements of operations do not assume any interest income on the estimated net cash proceeds from the Sale.
e) | The pro forma adjustments represent the accrual for income taxes payable of $320,000 and the change in the deferred tax liability of $2.9 million related to the gain on the sale of those properties that were owned by our taxable REIT subsidiaries. Income taxes are based on the statutory tax rate in those jurisdictions. |
In addition, the adjustments reflect other expense accruals of $3.9 million representing nonrecurring costs, primarily costs directly related to the closing of the Sale which will be included in the Companys statements of operations within the 12 months following the closing.
f) | Reflects the Companys unaudited condensed consolidated statement of operations as of September 30, 2011 as contained in the historical financial statements and notes thereto presented in the Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2011. The unaudited condensed consolidated statement of operations for the nine months ended September 30, 2011, as reported in the Quarterly Report on Form 10-Q, already presented the results of operations of the 36 shopping centers sold in the Sale as discontinued operations and thus are not reflected in the as reported column. |
g) | The pro forma adjustment represents the estimated reduction in interest expense had the Companys unsecured revolving line of credit been repaid with the proceeds from the Sale. |
h) | Reflects the Companys consolidated statement of operations as of December 31, 2010, 2009 and 2008, as contained in the historical financial statements and notes thereto presented in the Companys Annual Report on Form 10-K for the year ended December 31, 2010. |
i) | Reflects income and expense items related to the shopping centers sold in the Sale and which were classified as discontinued operations at September 30, 2011 and will be reflected as discontinued operations in future historical financial statements. |
j) | Included in the 36 shopping centers sold in connection with the Sale are 17 shopping centers which were owned by DIM Vastgoed, N.V., a company organized under the laws of the Netherlands in which we acquired a controlling interest on January 14, 2009. Prior to acquiring a controlling interest, the Company accounted for its investment as an available-for-sale security. Accordingly, the historical consolidated statement of operations for the year ended December 31, 2008 does not reflect the operations of these 17 shopping centers and, therefore, no pro forma adjustments related to these properties are warranted. |