Exhibit 99.2
KBS SOR (BVI) HOLDINGS, LTD.
FINANCIAL DATA FROM THE CONSOLIDATED FINANCIAL STATEMENTS
ATTRIBUTED TO THE COMPANY
DECEMBER 31, 2018 (AUDITED)
KBS SOR (BVI) HOLDINGS, LTD.
FINANCIAL INFORMATION FROM THE
CONSOLIDATED FINANCIAL STATEMENTS
ATTRIBUTABLE TO THE COMPANY
AS OF DECEMBER 31, 2018
INDEX
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| |
| | Page |
| | |
| Special Report Presented Pursuant to Regulation 9c | 2 |
| | |
| Financial Information from the Consolidated Statements of Financial Position Attributable to the Company | 3 |
| | |
| Financial Information from the Consolidated Statements of Profit or Loss Attributable to the Company | 4 |
| | |
| Financial Information from the Consolidated Statements of Comprehensive Income Attributable to the Company | 5 |
| | |
| Financial Information from the Consolidated Statements of Cash Flows Attributable to the Company | 6 |
| | |
| Additional Information | 7 - 8 |
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Special Report in accordance with Regulation 9c
Financial Information and Financial Data from the
Consolidated Financial Statements Attributable to the Company
Below is separate financial information and financial data attributable to the Company from the Group's consolidated financial statements as of December 31, 2018, published as part of the periodic reports ("consolidated financial statements"), presented in accordance with Regulation 9c to the Israeli Securities Regulations (Periodic and Immediate Reports), 1970.
The significant accounting policies applied in presenting this financial information is elaborated in Note 2 to the consolidated financial statements.
"Investees" - as defined in Note 1 to the consolidated financial statements.
KBS SOR (BVI) HOLDINGS, LTD.
Financial Information from the Consolidated Statements of Financial Position Attributable to the Company
U.S. dollars in thousands
|
| | | | | | | | | | |
| | | | | December 31, |
| | | Note | | 2018 | | 2017 |
| | | | | | | |
| ASSETS | | | | | | |
| Non-current assets | | | | | | |
| Investments in investees | | | | $ | 852,101 |
| | $ | 1,052,679 |
|
| Restricted cash | | e | | 5,823 |
| | 6,255 |
|
| | | | | | | |
| | | | | 857,924 |
| | 1,058,934 |
|
| | | | | | | |
| Current assets | | | | | | |
| Cash and cash equivalents | | e | | 57,843 |
| | 826 |
|
| Derivative asset | | d | | - |
| | 4,243 |
|
| Due from Owner | | | | 4,500 |
| | - |
|
| | | | | 62,343 |
| | 5,069 |
|
| | | | | | | |
| Total assets | | | | $ | 920,267 |
| | $ | 1,064,003 |
|
| | | | | | | |
| EQUITY | | | | $ | 657,049 |
| | $ | 787,529 |
|
| | | | | | | |
| NON-CURRENT LIABILITIES | | | | | | |
| Debentures, net | | | | 203,099 |
| | 272,316 |
|
| | | | | | | |
| CURRENT liabilities | | | | | | |
| Accounts payable and accrued liabilities | | | | 3,823 |
| | 4,158 |
|
| Debentures, net | | | | 51,903 |
| | - |
|
| Derivative liability | | d | | 4,393 |
| | - |
|
| | | | | | | |
| | | | | 60,119 |
| | 4,158 |
|
| | | | | | | |
| Total liabilities | | | | 263,218 |
| | 276,474 |
|
| | | | | | | |
| Total equity and liabilities | | | | $ | 920,267 |
| | $ | 1,064,003 |
|
The accompanying notes are an integral part of this financial position.
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| | | | | | |
| March 7, 2019 | | /s/ Jeffrey Waldvogel | | /s/ Peter McMillan III | | /s/ Keith David Hall |
| Date of approval of | | Waldvogel, Jeffrey | | McMillan III, Peter | | Hall, Keith David |
| financial statements | | Chief Financial Officer | | Chairman of Board of Directors | | Chief Executive Officer |
KBS SOR (BVI) HOLDINGS, LTD.
Financial Information from the Consolidated Statements of Profit or Loss Attributable to the Company
USD in thousands
|
| | | | | | | | | | | | |
| | | Years ended December 31, |
| | | 2018 | | 2017 | | 2016 |
| | | | | | | |
| Share of profit from investees, net | | $ | 54,435 |
| | $ | 89,342 |
| | $ | 86,098 |
|
| Asset management fees to affiliate | | (8,525) |
| | (10,686) |
| | (8,253) |
|
| General and administrative expenses | | (1,276) |
| | (1,708) |
| | (1,466) |
|
| | | | | | | |
| Operating income | | 44,634 |
| | 76,948 |
| | 76,379 |
|
| | | | | | | |
| Finance expense | | (13,455) |
| | (13,333) |
| | (10,311) |
|
| Foreign currency transaction adjustments, net | | 10,141 |
| | (15,298) |
| | (2,997) |
|
| | | | | | | |
| | | | | | | |
| Net income | | $ | 41,320 |
| | $ | 48,317 |
| | $ | 63,071 |
|
The accompanying notes are an integral part of this financial position.
KBS SOR (BVI) HOLDINGS, LTD.
Financial Information from the Consolidated Statements of Comprehensive Income Attributable to the Company
U.S. dollars in thousands
|
| | | | | | | | | | | | |
| | | Years ended December 31, |
| | | 2018 | | 2017 | | 2016 |
| | | | | | | |
| Net income | | $ | 41,320 |
| | $ | 48,317 |
| | $ | 63,071 |
|
| | | | | | | |
| Total comprehensive income | | $ | 41,320 |
| | $ | 48,317 |
| | $ | 63,071 |
|
The accompanying notes are an integral part of this financial position.
KBS SOR (BVI) HOLDINGS, LTD.
Financial Information from the Consolidated Statements of Cash Flows Attributable to the Company
USD in thousands
|
| | | | | | | | | | | | |
| | | Years ended December 31, |
| | | 2018 | | 2017 | | 2016 |
| | | | | | | |
| Cash flows from operating activities | | | | | | |
| Net income for the period | | $ | 41,320 |
| | $ | 48,317 |
| | $ | 63,071 |
|
| | | | | | | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | |
| Share of profit from investees | | (54,435) |
| | (89,342) |
| | (86,098) |
|
| Finance expense | | 13,455 |
| | 13,333 |
| | 10,311 |
|
| Distribution from investees, net | | 41,847 |
| | 55,418 |
| | 48,854 |
|
| Foreign currency transaction adjustments, net | | (10,141) |
| | 15,298 |
| | 2,997 |
|
| Changes in operating assets and liabilities: | | | | | | |
| Accounts payable and accrued liabilities | | (62) |
| | 47 |
| | 86 |
|
| | | | | | | |
| Net cash provided by operating activities | | 31,984 |
| | 43,071 |
| | 39,221 |
|
| | | | | | | |
| Cash flows from investing activities | | | | | | |
| Investments in investees | | (178,281) |
| | (76,105) |
| | (333,994) |
|
| Escrow deposits for investments in investees | | - |
| | - |
| | (2,000) |
|
| Distribution from investees, net | | 391,447 |
| | 163,103 |
| | 118,838 |
|
| Purchase of interest rate cap | | - |
| | - |
| | (15) |
|
| Purchase of derivative financial instrument | | - |
| | (3,434) |
| | - |
|
| Proceeds from termination of derivative financial instrument | | - |
| | 6,557 |
| | - |
|
| Due from Owner | | (4,500) |
| | - |
| | - |
|
| | | | | | | |
| Net cash provided by (used in) investing activities | | 208,666 |
| | 90,121 |
| | (217,171) |
|
| | | | | | | |
| Cash flows from financing activities | | | | | | |
| Proceeds from issuance of debentures | | - |
| | - |
| | 249,211 |
|
| Payments of deferred financing costs | | - |
| | - |
| | (8,680) |
|
| Restricted cash for debt service obligations | | - |
| | - |
| | (5,595) |
|
| Interest paid | | (11,604) |
| | (11,284) |
| | (5,232) |
|
| Repayments to Parent Company | | - |
| | - |
| | (5,512) |
|
| Borrowings from Parent Company | | - |
| | - |
| | 4,375 |
|
| Distribution to Owner | | (171,800) |
| | (123,500) |
| | (51,700) |
|
| | | | | | | |
| Net cash (used in) provided by financing activities | | (183,404) |
| | (134,784) |
| | 176,867 |
|
| | | | | | | |
| Effect of exchange rate changes on cash and cash equivalents | | (229) |
| | 5 |
| | 3,496 |
|
| | | | | | | |
| Increase (decrease) in cash | | 57,017 |
| | (1,587) |
| | 2,413 |
|
| Cash, beginning of the period | | 826 |
| | 2,413 |
| | - |
|
| | | | | | | |
| Cash, end of the period | | $ | 57,843 |
| | $ | 826 |
| | $ | 2,413 |
|
| | | | | | | |
| Non-cash activities | | | | | | |
| Investment in investees | | $ | — |
| | $ | — |
| | $ | 809,682 |
|
| | | | | | | |
The accompanying notes are an integral part of this financial position.
KBS SOR (BVI) HOLDINGS, LTD.
Additional Information
U.S. dollars in thousands
This separate financial information has been prepared in a condensed format as of December 31, 2018 and for the year then ended, in accordance with Regulation 9C of the Securities Regulations (Periodic and Immediate Reports), 1970. This separate financial information should be read in conjunction with the consolidated financial statements as of December 31, 2018.
According to the relevant tax laws in the BVI and in the U.S.A, substantially all of the companies in the Group are considered as a "pass through" entities. Accordingly, no provision has been made for federal and state income taxes or other income tax benefits in the accompanying financial statements as taxable income and losses are reported in the tax return of the shareholders.
In order to continue to qualify as a REIT, the Parent Company conducts certain business activities through a taxable REIT subsidiary (“TRS”). Any TRSs the Company forms will incur taxes or accrue tax benefits consistent with a “C” corporation; however, such amount is not material as of December 31, 2018.
During the years ended December 31, 2018 and 2017, the Company declared and paid distributions in the aggregate of $171.8 million and $123.5 million to the Owner, respectively.
As of December 31, 2018, the Company had entered into one foreign currency collar to hedge against a change in the exchange rate of the Israeli new Shekel versus the U.S. Dollar. As of December 31, 2018, the Company used Level 2 inputs to measure the foreign currency collar fair value at $4.4 million liability. The foreign currency collar expired in February 2019 and had an aggregate Israeli new Shekels notional amount of 776.2 million. The foreign currency collar consisted of a purchased call option to buy Israeli new Shekels at 3.5445 and a sold put option to sell the Israeli new Shekels at 3.6592. The foreign currency collar was intended to permit the Company to exchange, on the settlement date of the collar, 776.2 million Israeli new Shekels for an amount ranging from $212.1 million to $219.0 million. In February 2019, the collar expired without an exchange of cash.
On February 27, 2019, the Company entered into a foreign currency collar with an aggregate Israeli new Shekels notional amount of 776.2 million which expires on August 23, 2019. The foreign currency collar consists of a purchased call option to buy Israeli new Shekels at 3.4860 and a sold put option to sell the Israeli new Shekels at 3.6185. The foreign currency collar is intended to permit us to exchange, on the settlement date of the collar, 776.2 million Israeli new Shekels for an amount ranging from $214.5 million to $222.7 million.
KBS SOR (BVI) HOLDINGS, LTD.
Additional Information
U.S. dollars in thousands
| |
| e. | CASH AND RESTRICTED CASH |
As of December 31, 2018, the Company held 214.7 million Israeli new Shekels ($57.4 million) and 21.8 million Israeli new Shekels ($5.8 million) in cash and restricted cash, respectively.
As of December 31, 2017, the Company held 0.2 million Israeli new Shekels ($0.1 million) and 21.8 million Israeli new Shekels ($6.3 million) in cash and restricted cash, respectively.
Due from Owner:
As of December 31, 2018, the Company had a $4.5 million due from Owner. In February 2019, the Owner repaid the $4.5 million plus interest of approximately $30 thousand based on a fixed annual interest rate of 4.25%
Debentures:
On March 1, 2019, the Company paid the first principal installment payment of 194.0 million Israeli new Shekels (approximately $53.6 million as of March 1, 2019).
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