Exhibit 99.2
Pro Forma Consolidated Balance Sheet
December 31, 2013
(Unaudited)
(In thousands, except share and per share data)
| | Pro Forma
Physicians Realty
Trust Prior to
Acquisition | | Atlanta
Property | | Sarasota
Properties | | San Antonio
Property | | Pro Forma
Reflecting
Acquisition | |
ASSETS | | | | | | | | | | | |
Real estate investments | | | | | | | | | | | |
Income producing property | | $ | 192,959 | | $ | 26,520 | | $ | 12,485 | | $ | 23,349 | (1) | $ | 255,313 | |
Tenant improvements | | 5,458 | | — | | — | | — | | 5,458 | |
Property under development | | 225 | | — | | — | | — | | 225 | |
Land | | 26,088 | | 6,013 | | 2,436 | | 2,230 | (1) | 36,767 | |
| | 224,730 | | 32,533 | | 14,921 | | 25,579 | | 297,763 | |
Accumulated depreciation | | (20,299 | ) | — | | — | | — | | (20,299 | ) |
Real estate investments, net | | 204,431 | | 32,533 | | 14,921 | | 25,579 | | 277,464 | |
Cash and cash equivalents | | 56,478 | | — | | (17,546 | ) | (14,779 | )(2) | 24,153 | |
Tenant receivables, net | | 837 | | — | | — | | — | | 837 | |
Deferred costs, net | | 2,105 | | — | | — | | — | | 2,105 | |
Lease intangibles, net | | 23,108 | | 4,272 | | 2,552 | | — | | 29,932 | |
Other assets | | 5,901 | | — | | — | | — | | 5,901 | |
Total Assets | | $ | 292,860 | | $ | 36,805 | | $ | (73 | ) | $ | 10,800 | | $ | 340,392 | |
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 | | — | | 10,800 | (3) | 93,626 | |
Total Liabilities | | 52,023 | | 40,005 | | — | | 10,800 | | 102,828 | |
Shareholders’ equity | | 212,295 | | (3,200 | ) | (73 | ) | — | | 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 | ) | $ | 10,800 | | $ | 340,392 | |
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 surgical hospital, located in San Antonio, Texas (the “San Antonio Property”) as if the purchase had occurred on December 31, 2013 and our previously reported acquisitions of the Atlanta Property and Sarasota Properties, reported on 8-K on March 4, 2014 and March 3, 2014, respectively, and Form 8-K/A on May 1, 2014 and May 5, 2014, respectively. The pro forma consolidated balance sheet of the Company prior to the acquisition of the San Antonio Property 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 San Antonio Property was accounted asset acquisition and recorded at its purchase price, inclusive of acquisition costs, allocated between land and building based upon their fair values at the date of acquisition. |
2. | Represents an adjustment to reflect the cash used to acquire the San Antonio Property. |
3. | Represents the debt assumed in the acquisition |
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 | | | | | | | | | |
| | Physicians | | | | | | | | | |
| | Realty Trust | | | | | | San | | Pro Forma | |
| | Prior to | | Atlanta | | Sarasota | | Antonio | | Reflecting | |
| | Acquisition | | Property | | Properties | | Property | | Acquisition | |
Revenues: | | | | | | | | | | | |
Rental revenues | | $ | 13,565 | | $ | 3,355 | | $ | 1,750 | | $ | 2,413 | (1) | $ | 21,083 | |
Expenses recoveries | | 3,234 | | 573 | | 194 | | 389 | (2) | 4,390 | |
Interest income on real estate loans and other | | — | | 1,105 | | — | | — | | 1,105 | |
Total revenues | | 16,799 | | 5,033 | | 1,944 | | 2,802 | | 26,578 | |
Expenses: | | | | | | | | | | | |
Management fee | | 475 | | — | | — | | — | | 475 | |
General and administrative | | 3,214 | | — | | — | | — | | 3,214 | |
Operations expenses | | 4,650 | | 2,169 | | 194 | | 389 | (2) | 7,402 | |
Depreciation and amortization | | 5,107 | | 1,908 | | 624 | | 672 | (3) | 8,311 | |
Loss on sale of development property | | 2 | | — | | — | | — | | 2 | |
Acquisition costs | | 1,938 | | — | | — | | — | | 1,938 | |
Total expenses | | 15,386 | | 4,077 | | 818 | | 1,061 | | 21,342 | |
Operating income | | 1,413 | | 956 | | 1,126 | | 1,741 | | 5,236 | |
Interest expense, net | | 4,295 | | 1,120 | | — | | 473 | | 5,888 | |
Change in fair value of derivatives, net | | (246 | ) | — | | — | | — | | (246 | ) |
Combined net loss | | (2,636 | ) | (164 | ) | 1,126 | | 1,268 | | (406 | ) |
Less: Net loss attributable to Predecessor | | 576 | | — | | — | | — | | 576 | |
Less: Net loss attributable to noncontrolling Interests | | 399 | | 24 | | (164 | ) | (185 | )(4) | 74 | |
Net (loss)/income attributable to shareholders | | $ | (1,661 | ) | $ | (140 | ) | $ | 962 | | $ | 1,083 | | $ | 244 | |
Net loss per share | | | | | | | | | | | |
Basic and diluted | | $ | (0.13 | ) | | | | | | | $ | 0.02 | |
| | | | | | | | | | | |
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, reflects the acquisition of the surgical hospital, located in San Antonio, Texas (the “San Antonio Property”) as if the purchase had occurred on January 1, 2013 and our previously reported acquisitions of the Atlanta Property and Sarasota Properties, reported on 8-K on March 4, 2014 and March 3, 2014, respectively, and Form 8-K/A on May 1, 2014 and May 5, 2014, respectively. The pro forma consolidated and combined statement of operations of the Company, prior to the acquisition of the San Antonio Property 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 San Antonio Property. |
2. | Reflects operating expenses incurred by lessor and reimbursed by the tenants. |
3. | Reflects depreciation expense over an average of a 35 year period based on the fair value allocated to the income producing property. |
4. | Reflects the interest expense on the assumed debt. |
5. | Represents an adjustment to deduct noncontrolling interest income from net income to arrive at net income available to common shareholders. |
