INDEX TO PRO FORMA FINANCIAL STATEMENTS
NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated balance sheet as of March 31, 2014 is presented as if NorthStar Healthcare Income, Inc. (the “Company”) acquired a significant equity investment in a $1.05 billion healthcare real estate portfolio comprised of over 8,500 beds across 43 senior housing and 37 skilled nursing facilities, located primarily in Florida, Illinois, Oregon and Texas (the “Properties”) on March 31, 2014. The Properties consist of six portfolios, one portfolio acquired on June 28, 2013 (herein referred to as “Ranger Predecessor”) and five other portfolios all acquired prior to January 1, 2013 (these five portfolios for the year ended December 31, 2013, together with Ranger Predecessor from June 28, 2013 to December 31, 2013, are herein collectively referred to as “Eclipse Predecessor”).
The following unaudited pro forma condensed consolidated statement of operations for the three months ended March 31, 2014 and year ended December 31, 2013 are presented as if the Company acquired its significant equity investment in the Properties on January 1, 2013.
This unaudited pro forma condensed consolidated financial information should be read in conjunction with the historical consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 and the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2014 and are not necessarily indicative of what the actual financial position or results of operations would have been had the Company completed the transaction as of the beginning of the period presented, nor is it necessarily indicative of future results. In the opinion of the Company’s management, the pro forma condensed consolidated financial statements include all significant necessary adjustments that can be factually supported to reflect the effects of the acquisition.
NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2014
(In Thousands, Except Per Share Data)
|
| | | | | | | | | | | | |
| | | Historical(1) | | Pro Forma Adjustment | | Pro Forma |
| Revenues | | | | | | |
| Rental income | | $ | 1,032 |
| | $ | — |
| | $ | 1,032 |
|
| Interest income | | 483 |
| | — |
| | 483 |
|
| Resident fee income | | 2,932 |
| | — |
| | 2,932 |
|
| Total revenue | | 4,447 |
| | — |
| | 4,447 |
|
| Expenses | | | | | | |
| Property operating expenses | | 1,873 |
| | — |
| | 1,873 |
|
| Interest expense | | 611 |
| | — |
| | 611 |
|
| Transaction costs | | 1,680 |
| | — |
| | 1,680 |
|
| Asset management and other fees-related party | | 2,166 |
| | — |
| | 2,166 |
|
| General and administrative expenses | | 856 |
| | — |
| | 856 |
|
| Depreciation and amortization | | 699 |
| | — |
| | 699 |
|
| Total expenses | | 7,885 |
| | — |
| | 7,885 |
|
| Income (loss) from operations | | (3,438 | ) | | — |
| | (3,438 | ) |
| Equity in earnings (losses) of unconsolidated venture | | — |
| | 115 |
| (2) | 115 |
|
| Net income (loss) | | (3,438 | ) | | 115 |
| | (3,323 | ) |
| Net (income) loss attributable to non-controlling interests | | 28 |
| | — |
| | 28 |
|
| Net income (loss) attributable to NorthStar Healthcare Income, Inc. common stockholders | | $ | (3,410 | ) | | $ | 115 |
| | $ | (3,295 | ) |
| Net income (loss) per share of common stock, basic/diluted | | $ | (0.22 | ) | | | | $ | (0.21 | ) |
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2013
(In Thousands, Except Per Share Data)
|
| | | | | | | | | | | | |
| | | Historical(1) | | Pro Forma Adjustment | | Pro Forma |
| Revenues | | | | | | |
| Rental income | | $ | 488 |
| | $ | — |
| | $ | 488 |
|
| Interest income | | 375 |
| | — |
| | 375 |
|
| Resident fee income | | 38 |
| | — |
| | 38 |
|
| Total revenue | | 901 |
| | — |
| | 901 |
|
| Expenses | | | | | | |
| Property operating expenses | | 24 |
| | — |
| | 24 |
|
| Interest expense | | 98 |
| | — |
| | 98 |
|
| Transaction costs | | 1,570 |
| | — |
| | 1,570 |
|
| Asset management and other fees-related party | | 1,334 |
| | — |
| | 1,334 |
|
| General and administrative expenses | | 312 |
| | — |
| | 312 |
|
| Depreciation and amortization | | 132 |
| | — |
| | 132 |
|
| Total expenses | | 3,470 |
| | — |
| | 3,470 |
|
| Income (loss) from operations | | (2,569 | ) | | — |
| | (2,569 | ) |
| Equity in earnings (losses) of unconsolidated venture | | — |
| | 549 |
| (2) | 549 |
|
| Net income (loss) | | (2,569 | ) | | 549 |
| | (2,020 | ) |
| Net (income) loss attributable to non-controlling interests | | 10 |
| | — |
| | 10 |
|
| Net income (loss) attributable to NorthStar Healthcare Income, Inc. common stockholders | | $ | (2,559 | ) | | $ | 549 |
| | $ | (2,010 | ) |
| Net income (loss) per share of common stock, basic/diluted | | $ | (1.26 | ) | | | | $ | (0.99 | ) |
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2014
(Dollars in Thousands)
|
| | | | | | | | | | | | |
| | | Historical(5) | | Pro Forma Adjustments | | Pro Forma |
| Assets | | | | | | |
| Cash | | $ | 75,542 |
| | $ | (23,400 | ) | (2) | $ | 52,142 |
|
| Restricted cash | | 3,970 |
| | — |
| | 3,970 |
|
| Operating real estate, net | | 136,325 |
| | — |
| | 136,325 |
|
| Investment in and advances to unconsolidated venture | | — |
| | 23,400 |
| (2) | 23,400 |
|
| Real estate debt investments, net | | 25,887 |
| | — |
| | 25,887 |
|
| Receivables, net | | 1,568 |
| | — |
| | 1,568 |
|
| Deferred costs, net | | 2,656 |
| | — |
| | 2,656 |
|
| Other assets | | 341 |
| | — |
| | 341 |
|
| Total assets | | $ | 246,289 |
| | $ | — |
| | $ | 246,289 |
|
| | | | | | | |
| Liabilities | | | | | | |
| Mortgage notes payable | | $ | 59,735 |
| | $ | — |
| | $ | 59,735 |
|
| Due to related party | | 1,145 |
| | — |
| | 1,145 |
|
| Escrow deposits payable | | 2,980 |
| | — |
| | 2,980 |
|
| Distribution payable | | 1,095 |
| | — |
| | 1,095 |
|
| Accounts payable and accrued expenses | | 2,274 |
| | — |
| | 2,274 |
|
| Other liabilities | | 134 |
| | — |
| | 134 |
|
| Total liabilities | | 67,363 |
| | — |
| | 67,363 |
|
| | | | | | | |
| Equity | | | | | | |
| NorthStar Healthcare Income, Inc. Stockholders' Equity | | | | | | |
| Preferred stock, $0.01 par value; 50,000,000 shares authorized, no shares issued and outstanding as of March 31, 2014 | | — |
| | — |
| | — |
|
| Common stock, $0.01 par value; 400,000,000 shares authorized and 21,193,752 shares issued and outstanding as of March 31, 2014 | | 212 |
| | — |
| | 212 |
|
| Additional paid-in capital | | 187,467 |
| | — |
| | 187,467 |
|
| Retained earnings (accumulated deficit) | | (9,844 | ) | | — |
| | (9,844 | ) |
| Total NorthStar Healthcare Income, Inc. stockholders' equity | | 177,835 |
| | — |
| | 177,835 |
|
| Non-controlling interests | | 1,091 |
| | — |
| | 1,091 |
|
| Total equity | | 178,926 |
| | — |
| | 178,926 |
|
| Total liabilities and equity | | $ | 246,289 |
| | $ | — |
| | $ | 246,289 |
|
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| |
| (1) | Represents the Company's condensed consolidated statement of operations for the three months ended March 31, 2014 and year ended December 31, 2013. |
| |
| (2) | In May 2014, the Company, through a general partnership with a subsidiary of NorthStar Realty Finance Corp., entered into a joint venture with an affiliate of Formation Capital, LLC to acquire the Properties. The Company contributed $23.4 million for an approximate 5.6% interest in the Properties. For the three months ended March 31, 2014 and year ended December 31, 2013, Ranger Predecessor and Eclipse Predecessor generated aggregate net income of $5.0 million and $13.9 million, respectively. For the three months ended March 31, 2014 and year ended December 31, 2013, the impact of adjusting for the effects of the preliminary purchase price allocation of the Properties and the removal of transaction costs resulted in net income of $2.0 million and $9.7 million, respectively. For the three months ended March 31, 2014 and year ended December 31, 2013, the Company’s proportionate interest in earnings from such investment was $0.1 million and $0.5 million, respectively. |
| |
| (3) | Represents the Company’s condensed consolidated balance sheet as of March 31, 2014. |
