UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 11, 2013 (March 5, 2013)
RAMCO-GERSHENSON PROPERTIES TRUST
(Exact name of registrant as specified in its Charter)
Maryland | 1-10093 | 13-6908486 | ||
| (State or other jurisdiction | (Commission | (IRS Employer | ||
| of incorporation) | File Number) | Identification No.) |
31500 Northwestern Highway, Suite 300, Farmington Hills, Michigan | 48334 |
| (Address of principal executive offices) | (Zip Code) |
| Registrant's telephone number, including area code | (248) 350-9900 |
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
| Item 1.01 | Entry Into A Material Definitive Agreement |
On March 5, 2013, Ramco-Gershenson Properties Trust, Inc. (RGPT) through its majority-owned partnership subsidiary, Ramco-Gershenson Properties, L.P. (RGPLP), entered into an agreement to acquire its partner’s 70% ownership interest in 12 properties owned by Ramco/Lion Venture LP for approximately $151.9 million in cash and the assumption of its partner’s pro-rata share of debt of approximately $104.9 million. RGPT currently owns a 30% interest in the properties. Upon closing, RGPT expects to consolidate the 12 properties based upon a value of approximately $366.8 million, together with seven mortgage loans with unpaid principal balances totaling approximately $149.8 million, plus any related assets and liabilities.
The transaction has been approved by the RGPT Board of Directors. It is subject to closing conditions and is expected to close by the end of the second quarter of 2013.
Financial statements required to comply with the rules and regulations of the SEC, including Rule 3-14 of Regulations S-X for real estate properties to be acquired and pro forma financial statements reflecting the effect of the transaction, are included herein under item 9.01.
| Item 2.03 | Creation Of A Direct Financial Obligation Or An Obligation Under An Off-Balance Sheet Arrangement Of A Registrant |
The following table summarizes the debt to be assumed in the agreement described in Item 1.01
Principal Balance at Expected Assumption Date | Stated Interest Rate | Maturity Date | ||||||||
| (In thousands) | ||||||||||
| Winchester Center | $ | 25,408 | 8.1 | % | July-13 | |||||
| Mission Bay | 42,165 | 6.6 | % | July-13 | ||||||
| Hunter's Square | 33,056 | 8.2 | % | August-13 | ||||||
| Village Plaza | 8,960 | 5.0 | % | September-15 | ||||||
| Troy Marketplace | 21,444 | 5.9 | % | June-16 | ||||||
| Treasure Coast | 8,090 | 5.5 | % | June-20 | ||||||
| Vista Plaza | 10,686 | 5.5 | % | June-20 | ||||||
| $ | 149,809 | |||||||||
All of the mortgages have monthly principal and interest payment obligations.
| Item 9.01 | Financial Statements and Exhibits |
| (a) | Financial Statements of Businesses to be Acquired. |
The Acquired Properties |
| Report of Independent Certified Public Accountants. |
Combined Statements of Revenues and Certain Expenses for the years ended December 31, 2012, 2011 and 2010. |
| Notes to Combined Statements of Revenues and Certain Expenses. |
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| (b) | Unaudited Pro Forma Financial Information |
Ramco-Gershenson Properties Trust, Inc. |
| Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2012 (unaudited.) |
| Notes and adjustments to Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2012 (unaudited.) |
| Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2011 (unaudited.) |
| Notes and adjustments to Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2011 (unaudited.) |
| (d) | Exhibits. |
| 23.1 Consent of Independent Certified Public Accountants |
| 99.1 Press Release, dated March 11, 2013 |
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS | Suite 800 Southfield, Michigan 48034-2366 T 248.262.1950 F 248.350.3582 |
Board of Directors and Stockholders of
Ramco-Gershenson Properties Trust
We have audited the accompanying combined statements of revenues and certain expenses (the “Combined Statements”) of Cocoa Commons, Cypress Point, Hunter’s Square Shopping Center, Marketplace of Delray, Mission Bay Plaza, Old Orchard Center, Treasure Coast Commons, Troy Marketplace/Troy II, Village Plaza, Vista Plaza, West Broward Shopping Center, and Winchester Center (the “Pending Acquisition Properties”), to be acquired by Ramco-Gershenson Properties Trust (the “Company”), for each of the three years in the period ended December 31, 2012, and the related notes to the Combined Statements.
Management’s responsibility for the statements
Management of the Company is responsible for the preparation and fair presentation of these Combined Statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the Combined Statements that are free from material misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on the Combined Statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Combined Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Combined Statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Combined Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the Combined Statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Combined Statements.
Grant Thornton LLP
U.S. member firm of Grant Thornton International Ltd
4
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the Combined Statements referred to above present fairly, in all material respects, the revenues and certain expenses described in Note 1 of the Pending Acquisition Properties for each of the three years in the period ended December 31, 2012 in accordance with accounting principles generally accepted in the United States of America.
Emphasis of matter
We draw attention to Note 1 to the Combined Statements, which describes that the accompanying Combined Statements were prepared for the purpose of complying with the rules and regulations of the United States Securities and Exchange Commission (for inclusion in the filing of Form 8-K of Ramco-Gershenson Properties Trust) and are not intended to be a complete presentation of the Pending Acquisition Properties’ revenues and certain expenses. Our opinion is not modified with respect to this matter.
/S/ GRANT THORNTON LLP
Southfield, Michigan
March 11, 2013
Grant Thornton LLP
U.S. member firm of Grant Thornton International Ltd
5
| THE ACQUIRED PROPERTIES | ||||||||||||
| COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES | ||||||||||||
| (in thousands) | ||||||||||||
| For the Year Ended December 31, 2012 | For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | ||||||||||
| REVENUES: | ||||||||||||
| Minimum rent | $ | 28,850 | $ | 29,156 | $ | 28,127 | ||||||
| Percentage rent | 52 | 15 | 9 | |||||||||
| Recovery income from tenants | 8,353 | 8,268 | 7,895 | |||||||||
| Other property income | 599 | 684 | 2,303 | |||||||||
| TOTAL REVENUES | 37,854 | 38,123 | 38,334 | |||||||||
| CERTAIN EXPENSES: | ||||||||||||
| Real estate taxes | 4,595 | 4,972 | 5,255 | |||||||||
| Recoverable operating expense | 4,270 | 3,835 | 3,735 | |||||||||
| Other non-recoverable operating expense | 1,963 | 2,252 | 2,708 | |||||||||
| General and administrative | 45 | - | 141 | |||||||||
| Interest expense | 9,768 | 10,196 | 11,832 | |||||||||
| TOTAL CERTAIN EXPENSES | 20,641 | 21,255 | 23,671 | |||||||||
| REVENUES IN EXCESS OF CERTAIN EXPENSES | $ | 17,213 | $ | 16,868 | $ | 14,663 | ||||||
| See accompanying notes | ||||||||||||
6
The Acquired Properties
Notes to the Combined Statements of Revenues and Certain Expenses
For the Years Ended December 31, 2012 2011 and 2010
| 1. | Business and Basis of Presentation |
On March 5, 2013, Ramco-Gershenson Properties Trust, Inc. (RGPT) through its majority-owned partnership subsidiary, Ramco-Gershenson Properties, L.P. (RGPLP), entered into an agreement to acquire its partner’s 70% ownership interest in 12 properties held by Ramco/Lion Venture LP for approximately $151.9 million in cash and the assumption of its partner’s pro-rata share of debt of approximately $104.9 million. RGPT currently owns a 30% interest in the properties. Upon closing, RGPT expects to consolidate the 12 properties based upon a value of approximately $366.8 million, together with seven mortgage loans with unpaid principal balances totaling approximately $149.8 million, plus any related assets and liabilities.
The following table details the properties to be acquired:
| Property Name | Location | Total GLA | Anchor Tenants (1) | ||
| FLORIDA [8] | |||||
| Cocoa Commons | Cocoa | 90,116 | Publix | ||
| Cypress Point | Clearwater | 167,280 | Burlington Coat Factory, The Fresh Market | ||
| Marketplace of Delray | Delray Beach | 238,901 | Office Depot, Ross Dress for Less, Winn-Dixie | ||
| Mission Bay Plaza | Boca Raton | 263,721 | The Fresh Market, Golfsmith, LA Fitness Sports Club, OfficeMax, Toys "R" Us | ||
| Treasure Coast Commons | Jensen Beach | 92,979 | Barnes & Noble, OfficeMax, Sports Authority | ||
| Village Plaza | Lakeland | 146,755 | Big Lots | ||
| Vista Plaza | Jensen Beach | 109,761 | Bed Bath & Beyond, Michaels, Total Wine & More | ||
| West Broward Shopping Center | Plantation | 152,973 | Badcock, DD's Discounts, Save-A-Lot, US Postal Service | ||
| MICHIGAN [4] | |||||
| Hunter's Square | Farmington Hills | 354,323 | Bed Bath & Beyond, Buy Buy Baby, Loehmann's, Marshalls, T.J. Maxx | ||
| The Shops at Old Orchard | West Bloomfield | 96,994 | Plum Market | ||
| Troy Marketplace | Troy | 217,754 | Airtime Trampoline, Golfsmith, LA Fitness, Nordstrom Rack, PetSmart, (REI) | ||
| Winchester Center | Rochester Hills | 314,575 | Bed Bath & Beyond, Dick's Sporting Goods, Marshalls, Michaels, PetSmart, (Kmart) | ||
| Total | 2,246,132 | ||||
(1) Anchor tenants are any tenant greater than or equal to 19,000 square feet. Tenants in parenthesis represent non-company owned gross leaseable area (“GLA”). | |||||
The accompanying combined statements of revenues and certain expenses (the “Statements”) have been prepared on the accrual basis of accounting. The Statements have been prepared for the purpose of complying with the rules and regulations of the United States Securities and Exchange Commission ("SEC"), Regulation S-X, Rule 3-14, and for inclusion in a Current Report on Form 8-K of RGPT. The Statements are not intended to be a complete presentation of the revenues and expenses of the Acquired Properties. Certain expenses, primarily depreciation and amortization, and other costs not directly related to the future operations of the Acquired Properties have been excluded.
Subsequent events
We have evaluated whether any subsequent events have occurred up through the time of issuing these statements on March 11, 2013.
| 2. | Summary of Significant Accounting Policies |
Revenue Recognition
Our shopping center space is generally leased to retail tenants under leases that are classified as operating leases. We recognize minimum rents using the straight-line method over the terms of the leases commencing when the tenant takes possession of the space and when construction of landlord funded improvements is substantially complete. Certain of the leases also provide for contingent percentage rental income which is recorded on an accrual basis once the specified sales target is achieved. The leases also provide for recoveries from tenants of common area maintenance expenses, real estate taxes and other operating expenses. These recoveries are estimated and recognized as revenue in the period the recoverable costs are incurred or accrued. Lease termination income is recognized when a lease termination agreement is executed by the parties and the tenant vacates the space. Lease termination income of $0.3 million, $0.3 million, and $1.8 million was recognized in other property income for the years ended December 31, 2012, 2011, and 2010, respectively.
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Expenses
Property operating expenses include real estate taxes, recoverable operating expenses such as common area maintenance, insurance premiums, and other non-recoverable expenses such as management fees, bad debt expenses and collection-related legal costs. Real estate taxes and insurance expense are accrued monthly. Expenditures for common area maintenance, management fees, and legal costs are charged to operations as incurred. Allowances for bad debt are taken for accounts receivable balances when we have reason to believe they will be uncollectible.
Use of Estimates
The preparation of the Statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts in the Statements and accompanying footnotes. Actual results could differ from those estimates.
| 3. | Future Minimum Rental Income |
The Acquired Properties are leased to tenants pursuant to lease agreements. Tenant leases typically provide for minimum rent and other charges to cover operating costs. Future minimum rent under non-cancellable operating leases in effect at December 31, 2012 are as follows:
| Year Ending December 31, | ||||
| (In thousands) | ||||
| 2013 | $ | 28,317 | ||
| 2014 | 25,873 | |||
| 2015 | 23,068 | |||
| 2016 | 19,828 | |||
| 2017 | 15,386 | |||
| Thereafter | 59,485 | |||
| Total | $ | 171,957 | ||
| 4. | Interest Expense |
RGPLP will assume seven mortgage loans secured by certain of the Acquired Properties. The following table includes the significant terms of these mortgages:
| Principal Balance as of December 31, | |||||||||||||||||
| (In thousands) | |||||||||||||||||
| 2012 | 2011 | 2010 | 2012 Interest Rate | Maturity Date | |||||||||||||
| Winchester Center | $ | 25,650 | $ | 26,550 | $ | 27,392 | 8.1 | % | July-13 | ||||||||
| Mission Bay | 42,320 | 42,867 | 43,387 | 6.6 | % | July-13 | |||||||||||
| Hunter's Square | 33,367 | 34,519 | 35,596 | 8.2 | % | August-13 | |||||||||||
| Village Plaza | 8,998 | 9,135 | 9,268 | 5.0 | % | September-15 | |||||||||||
| Troy Marketplace | 21,517 | 21,776 | 21,900 | 5.9 | % | June-16 | |||||||||||
| Treasure Coast | 8,122 | 8,244 | 8,359 | 5.5 | % | June-20 | |||||||||||
| Vista Plaza | 10,727 | 10,889 | 11,042 | 5.5 | % | June-20 | |||||||||||
| $ | 150,701 | $ | 153,980 | $ | 156,944 | ||||||||||||
All of the mortgages have monthly principal and interest payment obligations.
| 5. | Transactions with Related Parties |
RGPT, through its wholly-owned subsidiary, Ramco-Gershenson, Inc., provides property management, leasing, development, and other administrative services to the Acquired Properties.
8
RAMCO-GERSHENSON PROPERTIES TRUST
PRO FORMA FINANCIAL INFORMATION INTRODUCTION
(Unaudited)
The accompanying unaudited condensed consolidated balance sheet as of December 31, 2012 has been presented as if the acquisition of the Acquired Properties had occurred on December 31, 2012.
The accompanying unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2012 and 2011 are presented as if the acquisition of The Acquired Properties had occurred on January 1, 2011.
These unaudited pro forma condensed consolidated statements should be read in connection with the historical consolidated financial statements and notes thereto filed with the U.S Securities and Exchange Commission. In management’s opinion, all adjustments necessary to reflect the significant effects of these transactions have been made. These statements are based on assumptions and estimates considered appropriate by our management; however, they are unaudited and are not necessarily, and should not be assumed to be, an indication of our financial position or results of operations that would have been achieved had the acquisitions been completed as of the dates indicated or that may be achieved in the future.
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| RAMCO-GERSHENSON PROPERTIES TRUST | |||||||||||||
| PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||
| December 31, 2012 | |||||||||||||
| (In thousands, except per share amounts) | |||||||||||||
Historical (1) | Acquisitions and Pro forma Allocations | Pro Forma | |||||||||||
| ASSETS | |||||||||||||
| Net real estate | $ | 980,250 | $ | 339,857 | (2) | $ | 1,320,107 | ||||||
| Equity investments in unconsolidated joint ventures | 95,987 | (65,100 | ) | (3) | 30,887 | ||||||||
| Cash and cash equivalents | 4,233 | - | 4,233 | ||||||||||
| Restricted cash | 3,892 | - | 3,892 | ||||||||||
| Accounts receivable, net | 7,976 | - | 7,976 | ||||||||||
| Other assets, net | 72,953 | 29,553 | (2) | 102,506 | |||||||||
| TOTAL ASSETS | $ | 1,165,291 | $ | 304,310 | $ | 1,469,601 | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||
| Mortgages payable | $ | 541,281 | $ | 304,310 | (4) | $ | 845,591 | ||||||
| Capital lease obligation | 6,023 | - | 6,023 | ||||||||||
| Accounts payable and accrued expenses | 21,589 | - | 21,589 | ||||||||||
| Other liabilities | 26,187 | 26,187 | |||||||||||
| Distributions payable | 10,379 | - | 10,379 | ||||||||||
| TOTAL LIABILITIES | 605,459 | 304,310 | 909,769 | ||||||||||
| Commitments and Contingencies | |||||||||||||
| Ramco-Gershenson Properties Trust ("RPT") Shareholders' Equity: | |||||||||||||
| Preferred shares, $0.01 par, 2,000 shares authorized: 7.25% Series D | $ | 100,000 | $ | - | $ | 100,000 | |||||||
| Cumulative Convertible Perpetual Preferred Shares, (stated at liquidation | |||||||||||||
| preference $50 per share), 2,000 shares issued and outstanding as of | |||||||||||||
| December 31, 2012 and December 31, 2011 | |||||||||||||
| Common shares of beneficial interest, $0.01 par, 80,000 shares authorized, | 485 | - | 485 | ||||||||||
| 48,489 and 38,735 shares issued and outstanding as of December 31, 2012 | |||||||||||||
| and 2011, respectively | |||||||||||||
| Additional paid-in capital | 683,609 | - | 683,609 | ||||||||||
| Accumulated distributions in excess of net income | (249,070 | ) | - | (249,070 | ) | ||||||||
| Accumulated other comprehensive loss | (5,241 | ) | - | (5,241 | ) | ||||||||
| TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT | 529,783 | - | 529,783 | ||||||||||
| Noncontrolling interest | 30,049 | 30,049 | |||||||||||
| TOTAL SHAREHOLDERS' EQUITY | 559,832 | - | 559,832 | ||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,165,291 | $ | 304,310 | $ | 1,469,601 | |||||||
| The accompanying notes are an integral part of these consolidated financial statements. | |||||||||||||
10
RAMCO-GERSHENSON PROPERTIES TRUST
NOTES AND ADJUSTMENTS TO PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET
FOR THE YEAR ENDED DECEMBER 31, 2012
(Unaudited)
| (1) | As reported in the Registrant’s Consolidated Balance Sheet as of December 31, 2012, as presented in the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012. |
| (2) | Represents the pro forma acquisition of the Acquired Properties and the estimated allocation of the $366.8 million purchase price to the assets acquired. |
| (3) | Represents the pro forma adjustment for our 30% ownership in the Acquired Properties, net of debt. |
| (4) | The consideration for the Acquired Properties consists of $149.8 million of debt assumed and $151.9 million in additional borrowing. |
In addition to the $149.8 million of contractual debt assumed, the adjustment to mortgage notes payable includes $2.6 million to record the debt assumed at fair value. This additional mortgage premium will be amortized over the remaining life of the loans, with amortization recorded to reduce the monthly interest expense recorded on the loans.
11
| RAMCO-GERSHENSON PROPERTIES TRUST | |||||||||||||||||
| PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
| FOR THE YEAR ENDED DECEMBER 31, 2012 | |||||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
Historical (1) | Statement of Revenues and Certain Expenses - The Acquired Properties (2) | Pro Forma Adjustments | Pro Forma | ||||||||||||||
| REVENUE | |||||||||||||||||
| Minimum rent | $ | 90,354 | $ | 28,850 | $ | 177 | (3) | $ | 119,381 | ||||||||
| Percentage rent | 601 | 52 | - | 653 | |||||||||||||
| Recovery income from tenants | 31,664 | 8,353 | - | 40,017 | |||||||||||||
| Other property income | 2,055 | 599 | - | 2,654 | |||||||||||||
| Management and other fee income | 4,064 | - | (1,421 | ) | (4) | 2,643 | |||||||||||
| TOTAL REVENUE | 128,738 | 37,854 | (1,244 | ) | 165,348 | ||||||||||||
| EXPENSES | |||||||||||||||||
| Real estate taxes | 17,076 | 4,595 | - | 21,671 | |||||||||||||
| Recoverable operating expense | 15,879 | 4,270 | - | 20,149 | |||||||||||||
| Other non-recoverable operating expense | 2,838 | 1,963 | (1,396 | ) | (4) | 3,405 | |||||||||||
| Depreciation and amortization | 39,479 | - | 8,035 | (5) | 47,514 | ||||||||||||
| General and administrative expense | 19,445 | 45 | - | 19,490 | |||||||||||||
| TOTAL EXPENSES | 94,717 | 10,873 | 6,639 | 112,229 | |||||||||||||
| INCOME BEFORE OTHER INCOME AND EXPENSES AND TAX | 34,021 | 26,981 | (7,883 | ) | 53,119 | ||||||||||||
| OTHER INCOME AND EXPENSES | |||||||||||||||||
| Other income, net | (66 | ) | - | - | (66 | ) | |||||||||||
| Gain on sale of real estate | 69 | - | - | 69 | |||||||||||||
| Earnings from unconsolidated joint ventures | 3,248 | - | (1,545 | ) | (6) | 1,703 | |||||||||||
| Interest expense | (25,895 | ) | (9,768 | ) | (2,390 | ) | (7) | (38,053 | ) | ||||||||
| Amortization of deferred financing fees | (1,449 | ) | - | - | (1,449 | ) | |||||||||||
| Provision for impairment | (1,766 | ) | - | - | (1,766 | ) | |||||||||||
| Provision for impairment on equity investments in unconsolidated joint ventures | (386 | ) | - | - | (386 | ) | |||||||||||
| Deferred gain recognized | 845 | - | - | 845 | |||||||||||||
| INCOME FROM CONTINUING OPERATIONS BEFORE TAX | 8,621 | 17,213 | (11,818 | ) | 14,016 | ||||||||||||
| Income tax benefit | 34 | - | - | 34 | |||||||||||||
| INCOME FROM CONTINUING OPERATIONS | 8,655 | 17,213 | (11,818 | ) | 14,050 | ||||||||||||
| NET INCOME | 8,655 | 17,213 | (11,818 | ) | 14,050 | ||||||||||||
| Net loss (income) attributable to noncontrolling partner interest | 112 | - | (248 | ) | (136 | ) | |||||||||||
| NET INCOME ATTRIBUTABLE TO RPT | 8,767 | 17,213 | (12,066 | ) | 13,914 | ||||||||||||
| Preferred share dividends | (7,250 | ) | - | - | (7,250 | ) | |||||||||||
| NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ | 1,517 | $ | 17,213 | $ | (12,066 | ) | $ | 6,664 | ||||||||
EARINGS PER COMMON SHARE (8) | |||||||||||||||||
| Continuing operations - basic | $ | 0.03 | $ | 0.15 | |||||||||||||
| Continuing operations - diluted | $ | 0.03 | $ | 0.15 | |||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | |||||||||||||||||
| Basic | 44,101 | 44,101 | |||||||||||||||
| Diluted | 44,485 | 44,485 | |||||||||||||||
| See accompanying notes. | |||||||||||||||||
12
RAMCO-GERSHENSON PROPERTIES TRUST
NOTES AND ADJUSTMENTS TO PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2012
(Unaudited)
| (1) | Represents the condensed consolidated continuing operations of the Registrant for the year ended December 31, 2012. Revenues and expenses related to discontinued operations are not included. See the historical consolidated financial statements and notes thereto presented in the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012. |
| (2) | Represents the revenues and certain expenses of The Acquired Properties for the year ended December 31, 2012 as presented in the statement of revenues and certain expenses included in this Form 8-K. |
| (3) | Represents the net adjustments to record tenant rents on a straight-line basis from the acquisition date over the remaining term of the in-place leases. |
| (4) | The management and other fee income adjustment represents our 70% share of property management fee and other income from services provided by RPT to the Acquired Properties which are eliminated. The other non-recoverable operating expense adjustment represents the Acquired Properties management fee expense which is being eliminated. |
| (5) | Represents the estimated depreciation and amortization of the acquired assets on a straight-line basis. Tenant improvements and the value of in-place leases are depreciated over the remaining lives of the related leases. Buildings are depreciated over the estimated remaining useful lives which are 40 years. Site improvements are depreciated over 10-30 years. |
| (6) | Represents the elimination of RPT’s share of the Acquired Properties earnings for the year ended December 31, 2012. |
| (7) | Represents a reduction in interest expense of $0.5 million as a result of recording the mortgages assumed on the acquisition of the properties at fair value. Offsetting this reduction is the estimated interest expense on the increase of $151.9 million of debt utilized to fund the acquisitions. The assumed interest rate on this for the period is 1.9% which is the same as the interest rate on our line of credit as of December 31, 2012. |
| (8) | Earnings per share is calculated in accordance with Accounting Standards Codification 260 – “Earnings per Share,” which requires the allocation of non-controlling interest between continuing and discontinued operations. The historical earnings per share amounts are the amounts reported in the Registrant’s Form 10-Q for the year ended December 31, 2012. |
13
| RAMCO-GERSHENSON PROPERTIES TRUST | |||||||||||||||||
| PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
| FOR THE YEAR ENDED DECEMBER 31, 2011 | |||||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
Historical (1) | Statement of Revenues and Certain Expenses - The Acquired Properties (2) | Pro Forma Adjustments | Pro Forma | ||||||||||||||
| REVENUE | |||||||||||||||||
| Minimum rent | $ | 79,440 | $ | 29,156 | $ | 842 | (3) | $ | 109,438 | ||||||||
| Percentage rent | 244 | 15 | - | 259 | |||||||||||||
| Recovery income from tenants | 29,673 | 8,268 | - | 37,941 | |||||||||||||
| Other property income | 4,091 | 684 | - | 4,775 | |||||||||||||
| Management and other fee income | 4,126 | - | (1,673 | ) | (4) | 2,453 | |||||||||||
| TOTAL REVENUE | 117,574 | 38,123 | (831 | ) | 154,866 | ||||||||||||
| EXPENSES | |||||||||||||||||
| Real estate taxes | 16,452 | 4,972 | - | 21,424 | |||||||||||||
| Recoverable operating expense | 14,404 | 3,835 | - | 18,239 | |||||||||||||
| Other non-recoverable operating expense | 3,540 | 2,252 | (1,358 | ) | (4) | 4,434 | |||||||||||
| Depreciation and amortization | 34,594 | - | 8,035 | (5) | 42,629 | ||||||||||||
| General and administrative expense | 19,646 | - | - | 19,646 | |||||||||||||
| TOTAL EXPENSES | 88,636 | 11,059 | 6,677 | 106,372 | |||||||||||||
| INCOME BEFORE OTHER INCOME AND EXPENSES AND TAX | 28,938 | 27,064 | (7,508 | ) | 48,494 | ||||||||||||
| OTHER INCOME AND EXPENSES | |||||||||||||||||
| Other expense, net | (257 | ) | - | - | (257 | ) | |||||||||||
| Gain on sale of real estate | 231 | - | - | 231 | |||||||||||||
| Earnings from unconsolidated joint ventures | 1,669 | - | (1,354 | ) | (6) | 315 | |||||||||||
| Interest expense | (27,636 | ) | (10,196 | ) | (3,757 | ) | (7) | (41,589 | ) | ||||||||
| Amortization of deferred financing fees | (1,861 | ) | - | - | (1,861 | ) | |||||||||||
| Provision for impairment | (16,917 | ) | - | - | (16,917 | ) | |||||||||||
| Provision for impairment on equity investments in unconsolidated joint ventures | (9,611 | ) | - | - | (9,611 | ) | |||||||||||
| Loss on early extinguishment of debt | (1,968 | ) | - | - | (1,968 | ) | |||||||||||
| (LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE TAX | (27,412 | ) | 16,868 | (12,619 | ) | (23,163 | ) | ||||||||||
| Income tax provision | (795 | ) | - | - | (795 | ) | |||||||||||
| (LOSS) INCOME FROM CONTINUING OPERATIONS | (28,207 | ) | 16,868 | (12,619 | ) | (23,958 | ) | ||||||||||
| NET (LOSS) INCOME | (28,207 | ) | 16,868 | (12,619 | ) | (23,958 | ) | ||||||||||
| Net loss (income) attributable to noncontrolling partner interest | 1,742 | - | (268 | ) | 1,474 | ||||||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO RPT | (26,465 | ) | 16,868 | (12,887 | ) | (22,484 | ) | ||||||||||
| Preferred share dividends | (5,244 | ) | - | - | (5,244 | ) | |||||||||||
| NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ | (31,709 | ) | $ | 16,868 | $ | (12,887 | ) | $ | (27,728 | ) | ||||||
LOSS PER COMMON SHARE (8) | |||||||||||||||||
| Continuing operations - basic | $ | (0.83 | ) | $ | (0.72 | ) | |||||||||||
| Continuing operations - diluted | $ | (0.83 | ) | $ | (0.72 | ) | |||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | |||||||||||||||||
| Basic | 38,466 | 38,466 | |||||||||||||||
| Diluted | 38,466 | 38,466 | |||||||||||||||
| See accompanying notes. | |||||||||||||||||
14
RAMCO-GERSHENSON PROPERTIES TRUST
NOTES AND ADJUSTMENTS TO PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2011
(Unaudited)
| (1) | Represents the condensed consolidated continuing operations of the Registrant for the year ended December 31, 2011. Revenues and expenses related to discontinued operations are not included. See the historical consolidated financial statements and notes thereto presented in the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012. |
| (2) | Represents the revenues and certain expenses of The Acquired Properties for the year ended December 31, 2011 as presented in the statement of revenues and certain expenses included in this Form 8-K. |
| (3) | Represents the net adjustments to record tenant rents on a straight-line basis from the acquisition date over the remaining term of the in-place leases. |
| (4) | The management and other fee income adjustment represents our 70% share of property management fee and other income from services provided by RPT to the Acquired Properties which are eliminated. The other non-recoverable operating expense adjustment represents the Acquired Properties management fee expense which is being eliminated. |
| (5) | Represents the estimated depreciation and amortization of the acquired assets on a straight-line basis. Tenant improvements and the value of in-place leases are depreciated over the remaining lives of the related leases. Buildings are depreciated over the estimated remaining useful lives which are 40 years. Site improvements are depreciated over 10-30 years. |
| (6) | Represents the elimination of RPT’s share of the Acquired Properties earnings for the year ended December 31, 2011. |
| (7) | Represents a reduction in interest expense of $0.5 million as a result of recording the mortgages assumed on the acquisition of the properties at fair value. Offsetting this reduction is the estimated interest expense on the increase of $151.9 million of debt utilized to fund the acquisitions. The assumed interest rate on this for the period is 2.8% which is the same as the interest rate on our line of credit as of December 31, 2011. |
| (8) | Earnings per share is calculated in accordance with Accounting Standards Codification 260 – “Earnings per Share,” which requires the allocation of non-controlling interest between continuing and discontinued operations. The historical earnings per share amounts are the amounts reported in the Registrant’s Form 10-K for the year ended December 31, 2012. |
15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| RAMCO-GERSHENSON PROPERTIES TRUST | ||
| Date: March 11, 2013 | By: | /s/ GREGORY R. ANDREWS |
| Gregory R. Andrews | ||
| Chief Financial Officer and Secretary | ||
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EXHIBIT INDEX
| Exhibit | Description |
| 23.1 | Consent of Independent Certified Public Accountants |
| 99.1 | Press Release dated March 11, 2013 |
17