EX-99 3 ex99-2.txt EX99-2.TXT PRO FORMA CONSOLIDATED FINANCIAL DATA (UNAUDITED) The following unaudited pro forma consolidated financial data reflects our historical results as adjusted on a pro forma basis to give effect to Atlas Pipeline Partners, L.P. April 2004 offering of common units, the completion of the Spectrum acquisition on July 16, 2004 and APL's July 2004 offering of common units. The unaudited pro forma consolidated balance sheet is prepared as though these transactions occurred as of March 31, 2004. The unaudited pro forma consolidated statement of operations for the year ended September 30, 2003 and the six months ended March 31, 2004 are prepared as though these transactions occurred as of October 1, 2002. The acquisition and offering adjustments are described in the notes to the unaudited pro forma consolidated financial data. The unaudited pro forma consolidated financial data and accompanying notes should be read together with our "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our and Spectrum's historical financial statements and related notes included elsewhere, or incorporated by reference, in this filing. We accounted for the acquisition of Spectrum in the unaudited pro forma financial statements using the purchase method in accordance with the guidance of Statement of Financial Accounting Standards No. 141, "Business Combinations." For purposes of developing the unaudited pro forma consolidated financial information, we have allocated the purchase price to Spectrum's gas gathering and transmission facilities based on fair market value. The unaudited pro forma consolidated financial statements presented are for informational purposes only and are based upon available information and assumptions that we believe are reasonable under the circumstances. You should not construe the unaudited pro forma consolidated financial statements as indicative of the combined financial position or results of operations that we and Spectrum would have achieved had the transaction been consummated on the dates assumed. Moreover, they do not purport to represent our and Spectrum's combined financial position or results of operations for any future date or period.
RESOURCE AMERICA, INC. PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED) MARCH 31, 2004 (IN THOUSANDS) Historical Pro forma Resource Historical Pre-offering Offering Pro forma America Spectrum Adjustments Consolidated Adjustments Consolidated ---------- -------- ----------- ------------ ----------- ------------ ASSETS Current assets: Cash and cash equivalents..... $ 27,089 $ - $ 25,000 (a) $ 9,215 $ 23,916 (h) $ 33,131 (42,874) (b) Accounts receivable and prepaid expenses............ 32,074 9,545 41,619 41,619 FIN 46 entities' and other assets held for sale........ 108,893 108,893 108,893 Other......................... - 672 (10) (b) 662 662 -------- -------- --------- -------- -------- -------- Total current assets........ 168,056 10,217 (17,884) 160,389 23,916 184,305 Investments in real estate loans and real estate............... 69,603 69,603 69,603 FIN 46 entities' assets.......... 61,595 61,595 61,595 Investment in RAIT Investment Trust......................... 13,169 13,169 13,169 Property and equipment, net...... 155,523 49,596 94,366 (b) 299,485 299,485 Goodwill......................... 37,471 37,471 37,471 Deferred income taxes............ - 1,645 (1,645) (b) - - Intangible assets, net........... 7,933 7,933 7,933 Other assets..................... 27,808 1,613 3,349 (b) 32,573 32,573 (197) (b) -------- -------- --------- -------- -------- -------- $541,158 $ 63,071 $ 77,989 $682,218 $ 23,916 $706,134 ======== ======== ========= ======== ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt........................ $ 12,202 $ 4,992 $ (4,992) (b) $ 12,202 $ - $ 12,202 Secured revolving credit facilities - leasing........ 13,836 13,836 13,836 Accounts payable and accrued liabilities......... 32,159 13,186 (2,392) (b) 42,953 42,953 FIN 46 entities' and other liabilities associated with assets held for sale........ 69,375 69,375 69,375 Liabilities associated with drilling contracts.......... 15,465 15,465 15,465 -------- -------- --------- -------- -------- -------- Total current liabilities... 143,037 18,178 (7,384) 153,831 153,831 Long-term debt................... 70,725 42,433 105,266 (b) 175,991 (45,266) (h) 130,725 (42,433) (b) Deferred revenue and other liabilities................... 3,855 3,855 3,855 FIN 46 entities' liabilities..... 30,304 30,304 30,304 Deferred income taxes............ 14,860 14,860 14,860 Minority interest in Atlas Pipeline Partners, L.P........ 43,163 25,000 (a) 68,163 69,182 (h) 137,345 Commitments and contingencies.... - - - Stockholders' equity: Preferred stock............... - 13,856 (13,856) (b) - Common stock.................. 255 27 (27) (b) 255 255 Additional paid-in capital.... 227,413 3,149 (3,149) (b) 227,413 227,413 Less treasury stock, at cost.. (78,648) (10,010) 10,010 (b) (78,648) (78,648) Less ESOP loan receivable..... (1,121) (1,121) (1,121) Deferred compensation......... - (43) 43 (b) - Accumulated other comprehensive income (loss). 4,594 (310) 310 (b) 4,594 4,594 Retained earnings (deficit)... 82,721 (4,209) 4,209 (b) 82,721 82,721 -------- -------- --------- -------- -------- -------- Total stockholders' equity.. 235,214 2,460 (2,460) 235,214 235,214 -------- -------- --------- -------- -------- -------- $541,158 $ 63,071 $ 77,989 $682,218 $ 23,916 $706,134 ======== ======== ========= ======== ======== ========
See notes to pro forma consolidated financial statements
RESOURCE AMERICA, INC. PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) FOR THE YEAR ENDED SEPTEMBER 30, 2003 (IN THOUSANDS, EXCEPT PER SHARE DATA) Historical Pro forma Resource Historical Pre-offering Offering Pro forma America Spectrum Adjustments Consolidated Adjustments Consolidated ---------- -------- ----------- ------------ ----------- ------------ REVENUES: Energy....................... $105,262 $ 97,929 $ - $203,191 $ - $ 203,191 Real estate.................. 14,335 14,335 14,335 Leasing...................... 4,071 4,071 4,071 Equity in earnings of financial services investees 1,444 1,444 1,444 Interest, dividends, gains and other....................... 7,417 7,417 7,417 -------- -------- --------- -------- -------- --------- 132,529 97,929 - 230,458 - 230,458 COSTS AND EXPENSES: Energy....................... 67,215 89,411 156,626 156,626 Real estate.................. 5,464 5,464 5,464 Leasing...................... 5,883 5,883 5,883 General and administrative... 6,925 6,925 6,925 Depreciation, depletion and amortization................ 12,148 16,050 (16,050) (d) 21,127 21,127 8,979 (d) Interest..................... 13,092 2,725 (2,725) (c) 19,320 (2,979)(j) 17,115 5,532 (c) 968 (k) 696 (e) (194)(j) Provision for possible losses 1,848 1,848 1,848 Provision for legal settlement 1,185 1,185 1,185 Minority interest in Atlas Pipeline Partners, L.P...... 4,439 (4,959) (f) (520) 3,046 (l) 2,526 -------- -------- --------- -------- -------- --------- 118,199 108,186 (8,527) 217,858 841 218,699 -------- -------- --------- -------- -------- --------- Income from continuing operations before income taxes and cumulative effect of change in accounting principle.................. 14,330 (10,257) 8,527 12,600 (841) 11,759 Provision for income taxes..... 4,586 (4,303) 4,303 (g) 4,032 (269)(m) 3,763 (554) (g) -------- -------- --------- -------- -------- --------- Income from continuing operations before cumulative effect of change in accounting principle..... $ 9,744 $ (5,954) $ 4,778 $ 8,568 $ (572) $ 7,996 ======== ======== ========= ======== ======== ========= Income from continuing operations per common share - basic............... $ .57 $ .50 $ .47 ======== ======== ========= Weighted average common shares outstanding.......... 17,172 17,172 17,172 ======== ======== ========= Income from continuing operations per common share - diluted............. $ .55 $ .49 $ .46 ======== ======== ========= Weighted average common shares...................... 17,568 17,568 17,568 ======== ======== =========
See notes to pro forma consolidated financial statements
RESOURCE AMERICA, INC. PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED MARCH 31, 2004 (IN THOUSANDS, EXCEPT PER SHARE DATA) Historical Pro forma Resource Historical Pre-offering Offering Pro forma America Spectrum Adjustments Consolidated Adjustments Consolidated ---------- -------- ----------- ------------ ----------- ------------ REVENUES: Energy....................... $ 77,673 $ 51,013 $ - $128,686 $ - $ 128,686 Real estate.................. 9,790 9,790 9,790 Leasing...................... 3,708 3,708 3,708 Equity in earnings of financial services investees 2,880 2,880 2,880 Interest, dividends, gains and other....................... 4,878 4,878 4,878 -------- -------- --------- -------- -------- --------- 98,929 51,013 - 149,942 149,942 COSTS AND EXPENSES: Energy....................... 52,361 46,974 99,335 99,335 Real estate.................. 8,034 8,034 8,034 Leasing...................... 4,426 4,426 4,426 Financial services........... 413 413 413 General and administrative... 3,566 3,566 3,566 Depreciation, depletion and amortization................ 7,210 2,578 4,490 (d) 11,700 11,700 (2,578) (d) Interest..................... 3,906 1,562 (1,562) (c) 6,833 (1,589)(i) 6,115 2,579 (c) 968 (j) 348 (e) (97)(k) Provision for possible losses 400 400 400 Minority interest in Atlas Pipeline Partners, L.P...... 2,595 (3,439) (f) (844) 1,003 (l) 159 -------- -------- --------- -------- -------- --------- 82,911 51,114 (162) 133,863 285 134,148 -------- -------- --------- -------- -------- --------- Income from continuing operations before income taxes and cumulative effect of change in accounting principle................... 16,018 (101) 162 16,079 (285) 15,794 Provision for income taxes..... 5,446 (341) 341 (c) 5,467 (97)(m) 5,370 21 (c) -------- -------- --------- -------- -------- --------- Income from continuing operations before cumulative effect of change in accounting principle..... $ 10,572 $ 240 $ (200) $ 10,612 $ (188) $ 10,424 ======== ======== ========= ======== ======== ========= Income from continuing operations per common share - basic............... $ .61 $ .61 $ .60 ======== ======== ========= Weighted average common shares outstanding.......... 17,364 17,364 17,364 ======== ======== ========= Income from continuing operations per common share - diluted............. $ .59 $ .59 $ .58 ======== ======== ========= Weighted average common shares...................... 18,052 18,052 18,052 ======== ======== =========
See notes to pro forma consolidated financial statements RESOURCE AMERICA, INC. NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) a. Reflects the net proceeds from the issuance of 750,000 common units by APL in April 2004. b. Reflects the purchase of 100% of the equity of Spectrum for $148.1 million, including estimated transaction costs. The acquisition was financed by $25 million of the net proceeds from APL's April 2004 common unit offering, a $100 million term loan, a $5.3 million revolving loan under APL's new credit facility and $17.9 million of cash from the Company and Atlas America, Inc. As part of the purchase price, $47.4 million of Spectrum's long-term debt (including the $4.99 million current portion of that long-term debt) was repaid by APL. Adjustments include the payment of $3.3 million of estimated financing costs which appear in the pro forma balance sheet as other assets, elimination of a liability for $2.4 million of dividends related to Spectrum's preferred stock which was not assumed by APL and the write-off of $197,000 of Spectrum's deferred financing costs. c. Reflects the adjustment to interest expense resulting from $105.3 million of borrowing under APL's new credit facility bearing interest at the London Interbank Offered Rate, or LIBOR, plus 375 basis points, assumed to be 5.51% for the six months ended March 31, 2003, 5.00% for the six months ended September 30, 2003 and 4.90% for the six months ended March 31, 2004. Holding all other variables constant, a 1/8% change in interest rates would have an impact of $132,000 and $66,000 for the year ended September 30, 2003 and the six months ended March 31, 2004, respectively. d. Reflects the adjustment to depreciation expense based upon the cost of the acquired gas gathering and transmission facilities using depreciable lives ranging from 3 to 26.5 years and using the straight-line method. e. Reflects the amortization of deferred financing costs related to APL's new credit facility to finance the acquisition. f. Reflects the adjustment to minority interest to eliminate income attributed to the public unitholders of APL. g. Reflects the elimination of federal and state income taxes following the conversion of Spectrum, currently a C-Corporation, to a limited liability company concurrent with its acquisition by APL and the adjustment to the Company's taxes. Although Spectrum and APL do not incur a federal income tax liability, the Company pays federal income taxes on its share of APL's earnings. The tax rates assumed for the year ended September 30, 2003 and the six months ended March 31, 2004 are 32% and 34%, respectively. h. Reflects net proceeds of $69.2 million after offering costs of $3.8 million from APL's July 2004 common unit offering, used to repay $45.3 million of borrowings under APL's $100 million credit facility. i. Reflects the adjustment to interest expense resulting from the issuance of common units and the repayment of debt incurred to finance the Spectrum acquisition. j. Reflects a pro-rata write-off of deferred financing costs in connection with a permanent $40 million repayment of the $100 million term loan. k. Reflects the adjustment to amortization as a result of the write-off of deferred financing costs as noted in (j) above. l. Reflects the adjustment to minority interest as a result of the offering of common units of APL. m. Reflects the adjustment to the Company's taxes.