Exhibit 99.1
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
On June 21, 2016, InvenTrust Properties Corp. (the "Company") completed the previously announced sale of the Company's student housing business ("University House") to UHC Acquisition Sub LLC (the "Acquiror") pursuant to the terms of the Stock Purchase Agreement (the "Agreement"), dated as of January 3, 2016, by and among the Company, University House Communities Group, Inc. and the Acquiror, as amended by that certain Amendment No. 1 to the Agreement, dated as of May 30, 2016, and as further amended by that certain Amendment No. 2 to the Agreement, dated as of June 20, 2016. Following certain adjustments and the repayment of related debt, in each case pursuant to the terms of the Agreement, the Company received net cash consideration, after transaction costs, of approximately $845,000,000, $9,900,000 of which was deposited into escrow and relates to post closing obligations, the majority of which is held pending the expected completion of a development property in the third quarter of 2016.
On April 28, 2016 (the "Distribution Date"), the Company completed the previously announced spin-off ("Spin-off") of Highlands REIT, Inc. ("Highlands") through a taxable pro-rata distribution by the Company of 100% of the outstanding common stock, $0.01 per value per share of Highlands owned by it to holders of record of the Company’s common stock as of the close of business on April 25, 2016 (the “Record Date”). Each holder of record of the Company’s common stock received one share of Highlands' common stock for every one share of the Company’s common stock held at the close of business on the Record Date.
The following unaudited pro forma consolidated financial statements are based upon the historical consolidated financial statements for the Company, adjusted to reflect the sale of University House and the Spin-off, and include the Unaudited Pro Forma Consolidated Balance Sheet at March 31, 2016 and Pro Forma Consolidated Statements of Operations for the three months ended March 31, 2016 and the years ended 2015, 2014 and 2013.
INVENTRUST PROPERTIES CORP.
Unaudited Pro Forma Consolidated Balance Sheet
March 31, 2016
(Dollar amounts in thousands, except share amounts)
|
| | | | | | | | | | | | | | | |
| | Consolidated Company (a) | | Highlands Pro Forma Adjustments | | University House Pro Forma Adjustments | | Pro Forma Consolidated Company |
| | | | | | |
| | March 31, 2016 | | | | March 31, 2016 |
| | | | | | | | |
| Assets | | | | | | | |
| Investment properties: | | | | | | | |
| Land | $ | 747,478 |
| | $ | (138,665 | ) | (f) | $ | (112,891 | ) | (q) | $ | 495,922 |
|
| Building and other improvements | 3,207,275 |
| | (637,910 | ) | (f) | (884,225 | ) | (q) | 1,685,140 |
|
| Construction in progress | 100,038 |
| | — |
| (f) | (96,013 | ) | (q) | 4,025 |
|
| Total | 4,054,791 |
| | (776,575 | ) | | (1,093,129 | ) | | 2,185,087 |
|
| Less accumulated depreciation | (677,321 | ) | | 170,987 |
| (f) | 105,919 |
| (q) | (400,415 | ) |
| Net investment properties | 3,377,470 |
| | (605,588 | ) | | (987,210 | ) | | 1,784,672 |
|
| Cash and cash equivalents | 435,652 |
| | (20,000 | ) | (g) | 854,196 |
| (r) | 1,269,848 |
|
| Restricted cash and escrows | 19,418 |
| | (5,682 | ) | (f) | (299 | ) | (q) | 13,437 |
|
| Investment in marketable securities | 181,138 |
| | — |
| | — |
| | 181,138 |
|
| Investment in unconsolidated entities | 177,837 |
| | — |
| | — |
| | 177,837 |
|
| Intangible assets, net | 62,242 |
| | (10,423 | ) | (f) | (2,767 | ) | (q) | 49,052 |
|
| Accounts and rents receivable | 39,578 |
| | (11,636 | ) | (f) | (1,830 | ) | (q) | 26,112 |
|
| Deferred costs and other assets | 48,406 |
| | (3,251 | ) | (f) | (5,905 | ) | (q) | 39,250 |
|
| Assets of discontinued operations | 2,235 |
| | — |
| | — |
| | 2,235 |
|
| Total assets | $ | 4,343,976 |
| | $ | (656,580 | ) | | $ | (143,815 | ) | | $ | 3,543,581 |
|
| | | | | | | | |
| Liabilities | | | | | | | |
| Debt | $ | 2,022,416 |
| | $ | (398,875 | ) | (f) | $ | (368,192 | ) | (q) | $ | 1,255,349 |
|
| Accounts payable and accrued expenses | 79,333 |
| | (26,153 | ) | (f) | (17,763 | ) | (q) | 35,417 |
|
| Distributions payable | 28,022 |
| | — |
| | — |
| | 28,022 |
|
| Intangible liabilities, net | 40,631 |
| | (4,543 | ) | (f) | — |
| | 36,088 |
|
| Other liabilities | 26,334 |
| | (2,213 | ) | (f) | (9,650 | ) | (q) | 14,471 |
|
| Liabilities of discontinued operations | — |
| | — |
| | — |
| | — |
|
| Total liabilities | 2,196,736 |
| | (431,784 | ) | | (395,605 | ) | | 1,369,347 |
|
| Commitments and contingencies | | | | | | | |
| | | | | | | | |
| Stockholders’ Equity | | | | | | | |
| Preferred stock, $.001 par value | — |
| | — |
| | — |
| | — |
|
| Common stock, $.001 par value | 862 |
| | — |
| | — |
| | 862 |
|
| Additional paid in capital | 6,066,846 |
| | — |
| | — |
| | 6,066,846 |
|
| Accumulated distributions in excess of net loss | (3,958,647 | ) | | (224,796 | ) | (h) | 251,790 |
| (s) | (3,931,653 | ) |
| Accumulated other comprehensive income | 38,179 |
| | — |
| | — |
| | 38,179 |
|
| Total stockholders’ equity | 2,147,240 |
| | (224,796 | ) | | 251,790 |
| | 2,174,234 |
|
| Total liabilities and equity | $ | 4,343,976 |
| | $ | (656,580 | ) | | $ | (143,815 | ) | | $ | 3,543,581 |
|
See accompanying notes to the pro forma consolidated financial statements.
INVENTRUST PROPERTIES CORP.
Unaudited Pro Forma Consolidated Statement of Operations
Three months ended March 31, 2016
(Dollar amounts in thousands, except per share data)
|
| | | | | | | | | | | | | | | |
| | Consolidated Company | | Highlands Pro Forma Adjustments | | University House
Pro Forma Adjustments | | Pro Forma
Consolidated Company |
| | | | | | |
| | March 31, 2016 (b) | | | | March 31, 2016 |
| | | | | | | | |
| Income: | | | | | | | |
| Rental income | $ | 95,348 |
| | $ | (22,367 | ) | (i) | $ | (24,301 | ) | (t) | $ | 48,680 |
|
| Tenant recovery income | 15,881 |
| | (2,664 | ) | (i) | (184 | ) | (t) | 13,033 |
|
| Other property income | 3,060 |
| | (186 | ) | (i) | (1,241 | ) | (t) | 1,633 |
|
| Total income | $ | 114,289 |
| | $ | (25,217 | ) | | $ | (25,726 | ) | | $ | 63,346 |
|
| Expenses: | | | | | | | |
| General and administrative expenses | 17,283 |
| | (129 | ) | (j) | (2,074 | ) | (u) | 15,080 |
|
| Property operating expenses | 17,310 |
| | (2,060 | ) | (k) | (7,078 | ) | (v) | 8,172 |
|
| Real estate taxes | 13,403 |
| | (2,098 | ) | (k) | (1,492 | ) | (v) | 9,813 |
|
| Depreciation and amortization | 38,515 |
| | (7,817 | ) | (k) | (10,141 | ) | (v) | 20,557 |
|
| Provision for asset impairment | 8,390 |
| | — |
| (l) | — |
| | 8,390 |
|
| Total expenses | $ | 94,901 |
| | $ | (12,104 | ) | | $ | (20,785 | ) | | $ | 62,012 |
|
| Operating income | $ | 19,388 |
| | $ | (13,113 | ) | | $ | (4,941 | ) | | $ | 1,334 |
|
| Interest and dividend income | 2,704 |
| | — |
| | — |
| | 2,704 |
|
| Gain on sale of investment properties | 24,026 |
| | — |
| | — |
| (aa) | 24,026 |
|
| Loss on extinguishment of debt | (948 | ) | | — |
| | — |
| | (948 | ) |
| Other income | 1,323 |
| | 2 |
| (n) | 41 |
| (w) | 1,366 |
|
| Interest expense | (24,062 | ) | | 6,178 |
| (o) | 2,897 |
| (x) | (14,987 | ) |
| Equity in earnings of unconsolidated entities | 1,276 |
| | — |
| | (18 | ) | (y) | 1,258 |
|
| Gain on sale of investment in unconsolidated entities | 1,434 |
| | — |
| | 1,434 |
| (y) | 2,868 |
|
| Realized gain on sale of marketable securities, net | 555 |
| | — |
| | — |
| | 555 |
|
| Income from continuing operations before income taxes | $ | 25,696 |
| | $ | (6,933 | ) | | $ | (587 | ) | | $ | 18,176 |
|
| Income tax expense | (288 | ) | | — |
| | 5 |
| (z) | (283 | ) |
| Net income from continuing operations | $ | 25,408 |
| | $ | (6,933 | ) | | $ | (582 | ) | | $ | 17,893 |
|
| Net income per common share, from continuing operations, basic and diluted | $ | 0.03 |
| | | | | | $ | 0.02 |
|
| Weighted average number of common shares outstanding, basic | 862,205,672 |
| | | | | | 862,205,672 |
|
| Weighted average number of common shares outstanding, diluted | 862,291,672 |
| | | | | | 862,291,672 |
|
See accompanying notes to the pro forma consolidated financial statements.
INVENTRUST PROPERTIES CORP.
Unaudited Pro Forma Consolidated Statement of Operations
Year ended December 31, 2015
(Dollar amounts in thousands, except per share data)
|
| | | | | | | | | | | | | | | |
| | Consolidated Company | | Highlands Pro Forma Adjustments | | University House Pro Forma Adjustments | | Pro Forma
Consolidated Company |
| | | | | | |
| | December 31, 2015 (c) | | | | December 31, 2015 |
| | | | | | | | |
| Income: | | | | | | | |
| Rental income | $ | 370,662 |
| | $ | (88,804 | ) | (i) | $ | (77,127 | ) | (t) | $ | 204,731 |
|
| Tenant recovery income | 69,668 |
| | (11,214 | ) | (i) | (665 | ) | (t) | 57,789 |
|
| Other property income | 9,714 |
| | (398 | ) | (i) | (4,295 | ) | (t) | 5,021 |
|
| Total income | $ | 450,044 |
| | $ | (100,416 | ) | | $ | (82,087 | ) | | $ | 267,541 |
|
| Expenses: | | | | | | | |
| General and administrative expenses | 78,218 |
| | (501 | ) | (j) | (9,691 | ) | (u) | 68,026 |
|
| Property operating expenses | 77,610 |
| | (9,234 | ) | (k) | (25,219 | ) | (v) | 43,157 |
|
| Real estate taxes | 50,870 |
| | (8,887 | ) | (k) | (4,497 | ) | (v) | 37,486 |
|
| Depreciation and amortization | 150,401 |
| | (32,519 | ) | (k) | (28,702 | ) | (v) | 89,180 |
|
| Provision for asset impairment | 108,154 |
| | — |
| | — |
| | 108,154 |
|
| Total expenses | $ | 465,253 |
| | $ | (51,141 | ) | | $ | (68,109 | ) | | $ | 346,003 |
|
| Operating loss | $ | (15,209 | ) | | $ | (49,275 | ) | | $ | (13,978 | ) | | $ | (78,462 | ) |
| Interest and dividend income | 11,774 |
| | (1 | ) | (n) | — |
| | 11,773 |
|
| Gain on sale of investment properties | 40,682 |
| | 197 |
| (n) | — |
| | 40,879 |
|
| Loss on extinguishment of debt | (4,568 | ) | | — |
| | — |
| | (4,568 | ) |
| Other income | 19,447 |
| | 11 |
| (n) | (168 | ) | (w) | 19,290 |
|
| Interest expense | (94,572 | ) | | 26,291 |
| (o) | 10,228 |
| (x) | (58,053 | ) |
| Loss on contribution to joint venture | (12,919 | ) | | — |
| | — |
| | (12,919 | ) |
| Equity in earnings of unconsolidated entities | 35,167 |
| | — |
| | 89 |
| (y) | 35,256 |
|
| Gain, (loss) and (impairment) of investment in unconsolidated entities, net | 326 |
| | — |
| | — |
| | 326 |
|
| Realized gain on sale of marketable securities, net | 20,459 |
| | — |
| | — |
| | 20,459 |
|
| Income (loss) from continuing operations before income taxes | $ | 587 |
| | $ | (22,777 | ) | | $ | (3,829 | ) | | $ | (26,019 | ) |
| Income tax expense | (1,916 | ) | | 36 |
| (p) | 35 |
| (z) | (1,845 | ) |
| Net loss from continuing operations | $ | (1,329 | ) | | $ | (22,741 | ) | | $ | (3,794 | ) | | $ | (27,864 | ) |
| Net loss per common share, from continuing operations, basic and diluted | $ | 0.00 |
| | | | | | $ | (0.03 | ) |
| Weighted average number of common shares outstanding, basic and diluted | 861,830,627 |
| | | | | | 861,830,627 |
|
See accompanying notes to the pro forma consolidated financial statements.
INVENTRUST PROPERTIES CORP.
Unaudited Pro Forma Consolidated Statement of Operations
Year ended December 31, 2014
(Dollar amounts in thousands, except per share data)
|
| | | | | | | | | | | | | | | |
| | Consolidated Company | | Highlands Pro Forma Adjustments | | University House Pro Forma Adjustments | | Pro Forma
Consolidated Company |
| | | | | | |
| | December 31, 2014 (d) | | | | December 31, 2014 |
| | | | | | | | |
| Income: | | | | | | | |
| Rental income | $ | 377,067 |
| | $ | (90,001 | ) | (i) | $ | (66,351 | ) | (t) | $ | 220,715 |
|
| Tenant recovery income | 66,046 |
| | (12,200 | ) | (i) | (542 | ) | (t) | 53,304 |
|
| Other property income | 9,361 |
| | (629 | ) | (i) | (3,594 | ) | (t) | 5,138 |
|
| Total income | $ | 452,474 |
| | $ | (102,830 | ) | | $ | (70,487 | ) | | $ | 279,157 |
|
| Expenses: | | | | | | | |
| General and administrative expenses | 64,332 |
| | (352 | ) | (j) | (4,171 | ) | (u) | 59,809 |
|
| Property operating expenses | 91,111 |
| | (12,081 | ) | (k) | (27,463 | ) | (v) | 51,567 |
|
| Real estate taxes | 45,604 |
| | (8,136 | ) | (k) | (3,602 | ) | (v) | 33,866 |
|
| Depreciation and amortization | 153,737 |
| | (30,292 | ) | (k) | (25,222 | ) | (v) | 98,223 |
|
| Business manager fee | 2,605 |
| | — |
| | — |
| | 2,605 |
|
| Provision for asset impairment | 80,774 |
| | (77,555 | ) | (m) | — |
| | 3,219 |
|
| Total expenses | $ | 438,163 |
| | $ | (128,416 | ) | | $ | (60,458 | ) | | $ | 249,289 |
|
| Operating income | $ | 14,311 |
| | $ | 25,586 |
| | $ | (10,029 | ) | | $ | 29,868 |
|
| Interest and dividend income | 12,713 |
| | (3 | ) | (n) | — |
| | 12,710 |
|
| Gain on sale of investment properties | 73,232 |
| | 2,937 |
| (n) | (3,652 | ) | (w) | 72,517 |
|
| Gain on extinguishment of debt | 34,515 |
| | (11,964 | ) | (n) | — |
| | 22,551 |
|
| Other income | 2,669 |
| | (483 | ) | (n) | (19 | ) | (w) | 2,167 |
|
| Interest expense | (120,668 | ) | | 29,269 |
| (o) | 11,719 |
| (x) | (79,680 | ) |
| Equity in earnings of unconsolidated entities | 81,179 |
| | — |
| | (150 | ) | (y) | 81,029 |
|
| Gain, (loss) and (impairment) of investment in unconsolidated entities, net | 56,352 |
| | — |
| | — |
| | 56,352 |
|
| Realized gain on sale of marketable securities, net | 43,025 |
| | — |
| | — |
| | 43,025 |
|
| Income from continuing operations before income taxes | $ | 197,328 |
| | $ | 45,342 |
| | $ | (2,131 | ) | | $ | 240,539 |
|
| Income tax expense | (917 | ) | | 112 |
| (p) | 58 |
| (z) | (747 | ) |
| Net income from continuing operations | $ | 196,411 |
| | $ | 45,454 |
| | $ | (2,073 | ) | | $ | 239,792 |
|
| Net income per common share, from continuing operations, basic and diluted | $ | 0.22 |
| | | | | | $ | 0.27 |
|
| Weighted average number of common shares outstanding, basic and diluted | 878,064,982 |
| | | | | | 878,064,982 |
|
See accompanying notes to the pro forma consolidated financial statements.
INVENTRUST PROPERTIES CORP.
Pro Forma Consolidated Statement of Operations
Year ended December 31, 2013
(Dollar amounts in thousands, except per share data)
|
| | | | | | | | | | | | | | | |
| | Consolidated Company | | Highlands Pro Forma Adjustments | | University House Pro Forma Adjustments | | Pro Forma
Consolidated Company |
| | | | | | |
| | December 31, 2013 (e) | | | | December 31, 2013 |
| | | | | | | | |
| Income: | | | | | | | |
| Rental income | $ | 377,876 |
| | $ | (94,609 | ) | (i) | $ | (52,594 | ) | (t) | $ | 230,673 |
|
| Tenant recovery income | 71,207 |
| | (13,137 | ) | (i) | (521 | ) | (t) | 57,549 |
|
| Other property income | 7,202 |
| | (657 | ) | (i) | (2,412 | ) | (t) | 4,133 |
|
| Total income | $ | 456,285 |
| | $ | (108,403 | ) | | $ | (55,527 | ) | | $ | 292,355 |
|
| Expenses: | | | | | | | |
| General and administrative expenses | 48,318 |
| | (95 | ) | (j) | (2,155 | ) | (u) | 46,068 |
|
| Property operating expenses | 84,735 |
| | (12,446 | ) | (k) | (17,968 | ) | (v) | 54,321 |
|
| Real estate taxes | 50,380 |
| | (9,980 | ) | (k) | (3,883 | ) | (v) | 36,517 |
|
| Depreciation and amortization | 167,071 |
| | (40,043 | ) | (k) | (23,731 | ) | (v) | 103,297 |
|
| Business manager fee | 37,962 |
| | — |
| | — |
| | 37,962 |
|
| Provision for asset impairment | 195,680 |
| | (185,359 | ) | (m) | — |
| | 10,321 |
|
| Total expenses | $ | 584,146 |
| | $ | (247,923 | ) | | $ | (47,737 | ) | | $ | 288,486 |
|
| Operating (loss) income | $ | (127,861 | ) | | $ | 139,520 |
| | $ | (7,790 | ) | | $ | 3,869 |
|
| Interest and dividend income | 18,855 |
| | (1,004 | ) | (n) | (1 | ) | (w) | 17,850 |
|
| Gain on sale of investment properties | 14,001 |
| | — |
| | — |
| | 14,001 |
|
| Loss on extinguishment of debt | (472 | ) | | 50 |
| (n) | 775 |
| (w) | 353 |
|
| Other income | 3,627 |
| | (889 | ) | (n) | (273 | ) | (w) | 2,465 |
|
| Interest expense | (133,454 | ) | | 32,699 |
| (o) | 10,844 |
| (x) | (89,911 | ) |
| Equity in earnings of unconsolidated entities | 11,474 |
| | — |
| | 136 |
| (y) | 11,610 |
|
| Loss and impairment of investment in unconsolidated entities, net | (2,957 | ) | | — |
| | — |
| | (2,957 | ) |
| Realized gain on sale of marketable securities, net | 31,539 |
| | — |
| | — |
| | 31,539 |
|
| Loss from continuing operations before income taxes | $ | (185,248 | ) | | $ | 170,376 |
| | $ | 3,691 |
| | $ | (11,181 | ) |
| Income tax expense | (1,231 | ) | | 91 |
| (p) | 23 |
| (z) | (1,117 | ) |
| Net loss from continuing operations | $ | (186,479 | ) | | $ | 170,467 |
| | $ | 3,714 |
| | $ | (12,298 | ) |
| Net loss per common share, from continuing operations, basic and diluted | $ | (0.21 | ) | | | | | | $ | (0.01 | ) |
| Weighted average number of common shares outstanding, basic and diluted | 899,842,722 |
| | | | | | 899,842,722 |
|
See accompanying notes to the pro forma consolidated financial statements
INVENTRUST PROPERTIES CORP.
Notes to Pro Forma Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands)
1) Basis of Presentation
The unaudited pro forma financial information is presented to illustrate the effect of the Spin-off and the sale of University House on the Company’s historical financial position and operating results. The unaudited pro forma consolidated balance sheet is as of March 31, 2016 and is based upon the Company's historical statements after giving effect to the Spin-off and the sale of University House as if they had occurred on March 31, 2016. The unaudited pro forma consolidated statement of operations for the three months ended March 31, 2016 and the years ended December 31, 2015, 2014 and 2013 are based upon the Company's historical statements for such periods after giving effect to the Spin-off and the sale of University House as if they had occurred on January 1 of the earliest period presented. The unaudited pro forma financial information should be read in conjunction with the historical consolidated financial statements and notes thereto of the Company contained in the Annual Report on Form 10-K for the year ended December 31, 2015 and the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.
The unaudited pro forma consolidated financial statements are presented for illustrative purposes only and are not intended to represent or be indicative of the Company's consolidated results of operations or financial position that would have been reported had the Spin-off and the sale of University House been completed as of the dates presented, and should not be taken as representation of the Company's future consolidated results of operations or financial condition. The pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable under the circumstances; however, actual amounts could differ.
2) Pro Forma adjustments
| |
| (a) | Reflects the Company’s unaudited consolidated balance sheet as of March 31, 2016. |
| |
| (b) | Reflects the Company's historical consolidated statement of operations for the three months ended March 31, 2016. |
| |
| (c) | Reflects the Company's historical consolidated statement of operations for the year ended December 31, 2015. |
| |
| (d) | Reflects the Company's historical consolidated statement of operations for the year ended December 31, 2014. |
| |
| (e) | Reflects the Company's historical consolidated statement of operations for the year ended December 31, 2013. |
For references (f) through (p) - On the Distribution Date, the Company completed the previously announced Spin-off.
| |
| (f) | Reflects the elimination of assets and liabilities of Highlands as of March 31, 2016. |
| |
| (g) | Reflects an adjustment, such that following the capital contribution from the Company, Highlands will hold approximately $20,000 in cash. |
| |
| (h) | Reflects the pro forma recapitalization of the Company's equity. As of the Distribution Date, the Company distributed the net assets of the Company's investment in Highlands through the distribution of shares of Highlands’ common stock. Each holder of record of the Company’s common stock received one share of Highlands’ common stock for every one share of the Company’s common stock held at the close of business on the Record Date. |
| |
| (i) | Reflects the elimination of rental income, tenant recovery income and other property income of Highlands. |
| |
| (j) | Reflects the elimination of general and administrative expense of Highlands related to general corporate expense. |
| |
| (k) | Reflects the elimination of expenses of Highlands that are necessary for and associated with revenue producing activities, such as property operating expense and real estate taxes. |
| |
| (l) | The Company recorded approximately $55,000 of asset impairment charges at the time of the Spin-off. |
| |
| (m) | Reflects the elimination of asset impairment charges of investment properties of Highlands. |
| |
| (n) | Reflects the elimination of interest and dividend income, other income, gain on the sale of investment properties and gain (loss) on the extinguishment of debt associated with Highlands. |
| |
| (o) | Reflects the elimination of interest expense incurred on debt directly attributable to investment properties of Highlands. |
| |
| (p) | Reflects the elimination of income tax expense directly attributable to Highlands. |
For references (q) through (aa) - On the Closing Date, the Company completed the previously announced sale of University House. The following pro forma adjustments reflect that sale.
| |
| (q) | Reflects the elimination of assets and liabilities of University House as of March 31, 2016. |
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| (r) | Reflects the receipt of net proceeds of the sale of University House plus cash retained by the Company at close. The Company anticipates using the net proceeds from the transaction to advance the growth strategy of retail portfolio, which includes, among other things, acquisitions, debt reduction and general corporate purposes, which may include a share buyback. |
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| (s) | Reflects the estimated gain and net proration credits arising from the sale of University House. |
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| (t) | Reflects the elimination of rental income, tenant recovery income and other property income of University House. |
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| (u) | Reflects the elimination of general and administrative expense of University House. |
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| (v) | Reflects the elimination of expenses of University House that are necessary for and associated with revenue producing activities, such as property operating expenses and real estate taxes. This adjustment does not reflect any one-time non-recurring costs, primarily transaction costs and prepayment penalties, directly related to the closing of the sale of University House which will be included in the statement of operations of the Company within the twelve months following the closing. |
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| (w) | Reflects the elimination of interest and dividend income, other income, gain on the sale of investment properties, and loss on extinguishment of debt of University House. |
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| (x) | Reflects the elimination of interest expense incurred on debt directly attributable to investment properties of University House. |
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| (y) | Reflects the elimination of the equity in earnings and the gain on sale of the investment in an unconsolidated entity. |
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| (z) | Reflects the elimination of income tax expense directly attributable to University House. |
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| (aa) | The estimated gain on sale of University House, which closed on June 21, 2016 is $364,000, including proration credits. The gain on sale has not been included in the pro forma statement of operations for the periods presented. |
