Exhibit 99.2
Pro Forma Consolidated Balance Sheet
December 31, 2013
(Unaudited)
(In thousands, except share and per share data)
|
| Pro Forma |
| Atlanta |
| Sarasota |
| Pro Forma |
| ||||
ASSETS |
|
|
|
|
|
|
|
|
| ||||
Real estate investments |
|
|
|
|
|
|
|
|
| ||||
Income producing property |
| $ | 192,959 |
| $ | 26,520 |
| $ | 12,485 | (1) | $ | 219,479 |
|
Tenant improvements |
| 5,458 |
| — |
| — |
| 5,458 |
| ||||
Property under development |
| 225 |
| — |
| — |
| 225 |
| ||||
Land |
| 26,088 |
| 6,013 |
| 2,436 | (1) | 34,537 |
| ||||
|
| 224,730 |
| 32,533 |
| 14,921 |
| 272,184 |
| ||||
Accumulated depreciation |
| (20,299 | ) | — |
| — |
| (20,299 | ) | ||||
Real estate investments, net |
| 204,431 |
| 32,533 |
| 14,921 |
| 251,885 |
| ||||
Cash and cash equivalents |
| 56,478 |
| — |
| (17,546 | )(2) | 38,932 |
| ||||
Tenant receivables, net |
| 837 |
| — |
| — |
| 837 |
| ||||
Deferred costs, net |
| 2,105 |
| — |
| — |
| 2,105 |
| ||||
Lease intangibles, net |
| 23,108 |
| 4,272 |
| 2,552 | (1) | 29,932 |
| ||||
Other assets |
| 5,901 |
| — |
| — |
| 5,901 |
| ||||
Total Assets |
| $ | 292,860 |
| $ | 36,805 |
| $ | (73 | ) | $ | 329,592 |
|
LIABILITES AND EQUITY |
|
|
|
|
|
|
|
|
| ||||
Accounts Payable |
| $ | 836 |
| $ | — |
| $ | — |
| $ | 836 |
|
Dividends payable |
| 5,681 |
| — |
| — |
| 5,681 |
| ||||
Accrued expenses and other liabilities |
| 2,288 |
| — |
| — |
| 2,288 |
| ||||
Derivative liabilities |
| 397 |
| — |
| — |
| 397 |
| ||||
Debt |
| 42,821 |
| 40,005 |
| — |
| 82,826 |
| ||||
Total Liabilities |
| 52,023 |
| 40,005 |
| — |
| 92,028 |
| ||||
Shareholders equity |
| 212,295 |
| (3,200 | ) | (73 | )(3) | 209,022 |
| ||||
Noncontrolling interest |
| 28,542 |
| — |
| — |
| 28,542 |
| ||||
Total Equity |
| 240,837 |
| (3,200 | ) | (73 | ) | 237,564 |
| ||||
Total Liabilities and Equity |
| $ | 292,860 |
| $ | 36,805 |
| $ | (73 | ) | $ | 329,592 |
|
See Notes to Unaudited Pro Forma Consolidated Balance Sheet.
Notes to Unaudited Pro Forma Consolidated and Combined Balance Sheet
The unaudited Pro Forma Consolidated Balance Sheet of Physicians Realty Trust (the “Company”) as of December 31, 2013 reflects the acquisition of the medical office buildings, located in Sarasota, Florida (the “Sarasota Properties”) as if the purchase had occurred on December 31, 2013 and our previously reported acquisition of the Altanta Property, reported on 8-K on March 4, 2014, and Form 8-K/A on May 1, 2014. The pro forma consolidated balance sheet of the Company prior to the acquisition of the Sarasota Properties has been derived from the audited consolidated balance sheet included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on March 21, 2014.
Notes and Management Assumptions
1. The acquisition of the Sarasota Properties was accounted for using preliminary estimates of the fair value of the tangible and intangible assets acquired and liabilities assumed in connection with the acquisition and are therefore subject to change. The fair value of the real estate acquired was determined on an “as if vacant” basis and the cost of the property was allocated between income producing property and in-place leases.
2. Represents an adjustment to reflect the cash used to acquired the Sarasota Properties.
3. Represents acquisition costs incurred and paid upon closing of the transaction.
Pro Forma Consolidated and Combined Statement of Operations
For the Year Ended December 31, 2013
(Unaudited)
(In thousands, except share and per share data)
|
| Pro Forma |
| Atlanta |
| Sarasota |
| Pro Forma |
| ||||
Revenues: |
|
|
|
|
|
|
|
|
| ||||
Rental revenues |
| $ | 13,565 |
| $ | 3,355 |
| $ | 1,750 | (1) | $ | 18,670 |
|
Expenses recoveries |
| 3,234 |
| 573 |
| 194 | (2) | 4,001 |
| ||||
Interest income on real estate loans and other |
| — |
| 1,105 |
| — |
| 1,105 |
| ||||
Total revenues |
| 16,799 |
| 5,033 |
| 1,944 |
| 23,776 |
| ||||
Expenses: |
|
|
|
|
|
|
|
|
| ||||
Management fee |
| 475 |
| — |
| — |
| 475 |
| ||||
General and administrative |
| 3,214 |
| — |
| — |
| 3,214 |
| ||||
Operations expenses |
| 4,650 |
| 2,169 |
| 194 | (2) | 7,013 |
| ||||
Depreciation and amortization |
| 5,107 |
| 1,908 |
| 624 | (3) | 7,639 |
| ||||
Loss on sale of development property |
| 2 |
| — |
| — |
| 2 |
| ||||
Acquisition costs |
| 1,938 |
| — |
| — |
| 1,938 |
| ||||
Total expenses |
| 15,386 |
| 4,077 |
| 818 |
| 20,281 |
| ||||
Operating income |
| 1,413 |
| 956 |
| 1,126 |
| 3,495 |
| ||||
Interest expense, net |
| 4,295 |
| 1,120 |
| — |
| 5,415 |
| ||||
Change in fair value of derivatives, net |
| (246 | ) | — |
| — |
| (246 | ) | ||||
Combined net loss |
| (2,636 | ) | (164 | ) | 1,126 |
| (1,674 | ) | ||||
Less: Net loss attributable to Predessor |
| 576 |
| — |
| — |
| 576 |
| ||||
Less: Net loss attributable to noncontrolling Interests |
| 399 |
| 24 |
| (164 | )(4) | 259 |
| ||||
Net (loss)/income attributable to shareholders |
| $ | (1,661 | ) | $ | (140 | ) | $ | 962 |
| $ | (839 | ) |
Net loss per share |
|
|
|
|
|
|
|
|
| ||||
Basic and diluted |
| $ | (0.13 | ) |
|
|
|
| $ | (0.07 | ) | ||
|
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares: |
|
|
|
|
|
|
|
|
| ||||
Basic and diluted |
| 12,883,917 |
|
|
|
|
| 12,883,917 |
|
See Notes to Unaudited Pro Forma Consolidated and Combined Statement of Operations.
Basis of Presentation
The unaudited Pro Forma Consolidated and Combined Statements of Operations of Physicians Realty Trust (“the Company”) for the year ended December 31, 2013, reflect the acquisition of the medical office building, located in Sarasota, Florida (the “Sarasota Properties”) as if the purchase had occurred on January 1, 2013 and our previously reported acquisition of the Altanta Property, reported on 8-K on March 4, 2014, and Form 8-K/A on May 1, 2014. The pro forma consolidated and combined statement of operations of the Company, prior to the acquisition of the Sarasota Properties for the year ended December 31, 2013 has been derived from the audited consolidated and combined statement of operations included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on March 21, 2014.
Notes and Management Assumptions
1. Reflects the effect of straight line rental revenue of the Sarasota Properties.
2. Reflects operating expenses incurred by lessor and reimbursed by the tenants.
3. Reflects depreciation expense over an average of a 34 year period based on the fair value allocated to the income producing property and amortization of the intangible asset relating to the acquired in-place leases over the remaining life of the leases.
4. Represents an adjustment to deduct noncontrolling interest income from net income to arrive at net income available to common shareholders.