8-K: Current report filing
Published on May 7, 2010
Exhibit 99.2
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Omega Pro Forma Financial Statements
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Unaudited Pro Forma Balance Sheet
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CapitalSource Transaction
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As of December 31, 2009
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12/31/2009
Historical
Balance Sheet
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Adjustments for
Capital Market
Transactions
|
Company Pro
Forma after
Capital Market
Transactions
|
Closing 2
Acquisition
HUD Properties
Historical
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Company Pro
Forma after
Closing 2
Acquisition
|
Closing 3
Acquisition
Properties
Historical
|
Company Pro
Forma after
Closing 2 & 3
Acquisition
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| a | b | f | m | ||||||||||||||||||||||||||||
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ASSETS
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Real estate properties
|
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Land and buildings at cost
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$ | 1,669,843 | $ | - | $ | 1,669,843 | $ | 281,131 | g | $ | 1,950,974 | $ | 320,211 | n | $ | 2,271,185 | |||||||||||||||
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Less accumulated depreciation
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(296,441 | ) | - | (296,441 | ) | - | (296,441 | ) | - | (296,441 | ) | ||||||||||||||||||||
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Real estate properties - net
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1,373,402 | - | 1,373,402 | 281,131 | 1,654,533 | 320,211 | 1,974,744 | ||||||||||||||||||||||||
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Mortgage notes receivable - net
|
100,223 | - | 100,223 | - | 100,223 | - | 100,223 | ||||||||||||||||||||||||
| 1,473,625 | - | 1,473,625 | 281,131 | 1,754,756 | 320,211 | 2,074,967 | |||||||||||||||||||||||||
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Other investments - net
|
32,800 | - | 32,800 | - | 32,800 | - | 32,800 | ||||||||||||||||||||||||
| 1,506,425 | - | 1,506,425 | 281,131 | 1,787,556 | 320,211 | 2,107,767 | |||||||||||||||||||||||||
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Assets held for sale - net
|
877 | - | 877 | - | 877 | - | 877 | ||||||||||||||||||||||||
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Total investments
|
1,507,302 | - | 1,507,302 | 281,131 | 1,788,433 | 320,211 | 2,108,644 | ||||||||||||||||||||||||
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Cash and cash equivalents
|
2,170 | 108,039 | 110,209 | (68,034 | ) | h | 42,175 | - | 42,175 | ||||||||||||||||||||||
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Restricted cash
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9,486 | - | 9,486 | 2,170 | i | 11,656 | 2,883 | o | 14,539 | ||||||||||||||||||||||
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Accounts receivable - net
|
81,558 | - | 81,558 | - | 81,558 | - | 81,558 | ||||||||||||||||||||||||
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Other assets
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50,778 | 4,946 | c | 55,724 | - | 55,724 | (25,000 | ) | p | 30,724 | |||||||||||||||||||||
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Operating assets for owned properties
|
3,739 | - | 3,739 | - | 3,739 | - | 3,739 | ||||||||||||||||||||||||
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Total assets
|
$ | 1,655,033 | $ | 112,985 | $ | 1,768,018 | $ | 215,267 | $ | 1,983,285 | $ | 298,094 | $ | 2,281,379 | |||||||||||||||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Revolving line of credit
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$ | 94,100 | $ | (94,100 | ) | - | $ | - | $ | - | $ | 296,211 | q | $ | 296,211 | ||||||||||||||||
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Secured Borrowings
|
159,354 | (59,354 | ) | 100,000 | 214,147 | j | 314,147 | - | 314,147 | ||||||||||||||||||||||
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Unsecured borrowings
|
485,000 | 200,000 | 685,000 | - | 685,000 | - | 685,000 | ||||||||||||||||||||||||
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Premium/Discount on unsecured borrowings (net)
|
(305 | ) | (3,444 | ) | d | (3,749 | ) | - | (3,749 | ) | - | (3,749 | ) | ||||||||||||||||||
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Accrued expenses and other liabilities
|
49,895 | - | 49,895 | 2,170 | k | 52,065 | 2,883 | r | 54,948 | ||||||||||||||||||||||
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Operating liabilities for owned properties
|
1,762 | - | 1,762 | - | 1,762 | - | 1,762 | ||||||||||||||||||||||||
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Total liabilities
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789,806 | 43,102 | 832,908 | 216,317 | 1,049,225 | 299,094 | 1,348,319 | ||||||||||||||||||||||||
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Stockholders’ equity:
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|||||||||||||||||||||||||||||||
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Preferred stock
|
108,488 | - | 108,488 | - | 108,488 | - | 108,488 | ||||||||||||||||||||||||
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Common stock
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8,827 | 379 | 9,206 | - | 9,206 | - | 9,206 | ||||||||||||||||||||||||
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Additional paid-in capital
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1,157,931 | 73,347 | 1,231,278 | - | 1,231,278 | - | 1,231,278 | ||||||||||||||||||||||||
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Cumulative net earnings
|
522,388 | (3,843 | ) | e | 518,545 | (1,050 | ) | l | 517,495 | (1,000 | ) | s | 516,495 | ||||||||||||||||||
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Cumulative dividends paid
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(932,407 | ) | - | (932,407 | ) | - | (932,407 | ) | - | (932,407 | ) | ||||||||||||||||||||
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Total stockholders’ equity
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865,227 | 69,883 | 935,110 | (1,050 | ) | 934,060 | (1,000 | ) | 933,060 | ||||||||||||||||||||||
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Total liabilities and stockholders’ equity
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$ | 1,655,033 | $ | 112,985 | $ | 1,768,018 | $ | 215,267 | $ | 1,983,285 | $ | 298,094 | $ | 2,281,379 | |||||||||||||||||
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Omega Pro Forma Financial Statements
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|
Unaudited Pro Forma Statement of Operations
|
|
CapitalSource Transaction
|
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For the Year-end December 31, 2009
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12/31/2009
Historical
Balance Sheet
|
Full Year
Impact of
Closing 1
Facilities
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Impact of
Capital Market
Transactions
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Company Pro
Forma after
Closing 1
Acquisition &
Capital Market
Transactions
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Closing 2
Acquisition
Properties
Historical
|
Closing 2
Acquisition
Properties Pro
Forma
Adjustments
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Company Pro
Forma after
Closing 1 & 2
Acquisition
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Closing 3
Acquisition
Properties
Historical
|
Closing 3
Acquisition
Properties Pro
Forma
Adjustments
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Company Pro
Forma after
Closing All
CapitalSource
Acquisitions
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| a | b | h | j | k | ||||||||||||||||||||||||||||||||||||
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Revenues
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Rental income
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$ | 164,468 | $ | 30,036 | c | $ | - | $ | 194,504 | $ | 28,927 | $ | 1,610 | l | $ | 225,041 | $ | 33,947 | $ | (288 | ) | l | $ | 258,700 | ||||||||||||||||
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Mortgage interest income
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11,601 | - | - | 11,601 | - | - | 11,601 | - | - | 11,601 | ||||||||||||||||||||||||||||||
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Other investment income - net
|
2,502 | - | - | 2,502 | 87 | (87 | ) | m | 2,502 | 93 | (93 | ) | m | 2,502 | ||||||||||||||||||||||||||
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Miscellaneous
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437 | - | - | 437 | - | - | 437 | - | - | 437 | ||||||||||||||||||||||||||||||
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Nursing home revenues of owned and operated assets
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18,430 | - | - | 18,430 | - | - | 18,430 | - | - | 18,430 | ||||||||||||||||||||||||||||||
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Total operating revenues
|
197,438 | 30,036 | - | 227,474 | 29,014 | 1,523 | 258,011 | 34,040 | (381 | ) | 291,670 | |||||||||||||||||||||||||||||
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Expenses
|
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Depreciation and amortization
|
44,694 | 11,800 | d | - | 56,494 | 7,911 | 4,321 | n | 68,726 | 10,160 | 4,237 | n | 83,123 | |||||||||||||||||||||||||||
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General and administrative
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11,742 | - | - | 11,742 | 2,731 | (1,531 | ) | o | 12,942 | 3,485 | (3,485 | ) | o | 12,942 | ||||||||||||||||||||||||||
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Acquisition related costs
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1,561 | - | - | 1,561 | - | - | 1,561 | - | - | 1,561 | ||||||||||||||||||||||||||||||
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Provisions for impairment on real estate properties
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159 | - | - | 159 | - | - | 159 | - | - | 159 | ||||||||||||||||||||||||||||||
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Provisions for uncollectible mortgages, notes and accounts receivable
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2,765 | - | - | 2,765 | - | - | 2,765 | - | - | 2,765 | ||||||||||||||||||||||||||||||
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Nursing home revenues and expenses of owned and operated assets
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20,632 | - | - | 20,632 | - | - | 20,632 | - | - | 20,632 | ||||||||||||||||||||||||||||||
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Total operating expenses
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81,553 | 11,800 | - | 93,353 | 10,642 | 2,790 | 106,785 | 13,645 | 752 | 121,182 | ||||||||||||||||||||||||||||||
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Income before other income and expense
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115,885 | 18,236 | - | 134,121 | 18,372 | (1,267 | ) | 151,226 | 20,395 | (1,133 | ) | 170,488 | ||||||||||||||||||||||||||||
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Other income (expense):
|
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Interest and other investment income
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21 | - | - | 21 | - | - | 21 | - | - | 21 | ||||||||||||||||||||||||||||||
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Interest
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(36,077 | ) | (15,326 | ) | e | (5,318 | ) | (56,721 | ) | (5,445 | ) | (5,771 | ) | p | (67,937 | ) | (6,883 | ) | (4,965 | ) | p | (79,785 | ) | |||||||||||||||||
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Interest - amortization of deferred financing costs
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(2,472 | ) | (495 | ) | f | 321 | (2,646 | ) | - | - | (2,646 | ) | - | - | (2,646 | ) | ||||||||||||||||||||||||
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Interest - refinancing costs
|
(526 | ) | - | - | (526 | ) | - | - | (526 | ) | - | - | (526 | ) | ||||||||||||||||||||||||||
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Litigation settlements
|
4,527 | - | - | 4,527 | - | - | 4,527 | - | - | 4,527 | ||||||||||||||||||||||||||||||
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Total other (expense) income
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(34,527 | ) | (15,821 | ) | (4,997 | ) | (55,345 | ) | (5,445 | ) | (5,771 | ) | (66,561 | ) | (6,883 | ) | (4,965 | ) | (78,409 | ) | ||||||||||||||||||||
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Income before gain on assets sold
|
81,358 | 2,415 | (4,997 | ) | 78,776 | 12,927 | (7,038 | ) | 84,665 | 13,512 | (6,098 | ) | 92,079 | |||||||||||||||||||||||||||
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Gain (loss) on assets sold - net
|
753 | - | - | 753 | - | - | 753 | - | - | 753 | ||||||||||||||||||||||||||||||
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Income from continuing operations before income taxes
|
82,111 | 2,415 | (4,997 | ) | 79,529 | 12,927 | (7,038 | ) | 85,418 | 13,512 | (6,098 | ) | 92,832 | |||||||||||||||||||||||||||
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Income taxes
|
- | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
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Income from continuing operations
|
82,111 | 2,415 | (4,997 | ) | 79,529 | 12,927 | (7,038 | ) | 85,418 | 13,512 | (6,098 | ) | 92,832 | |||||||||||||||||||||||||||
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Discontinued operations
|
- | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
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Net income
|
82,111 | 2,415 | (4,997 | ) | 79,529 | 12,927 | (7,038 | ) | 85,418 | 13,512 | (6,098 | ) | 92,832 | |||||||||||||||||||||||||||
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Preferred stock dividends
|
(9,086 | ) | - | - | (9,086 | ) | - | - | (9,086 | ) | - | - | (9,086 | ) | ||||||||||||||||||||||||||
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Series C preferred stock conversion charges
|
- | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
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Net income available to common
|
$ | 73,025 | $ | 2,415 | $ | (4,997 | ) | $ | 70,443 | $ | 12,927 | $ | (7,038 | ) | $ | 76,332 | $ | 13,512 | $ | (6,098 | ) | $ | 83,746 | |||||||||||||||||
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Income per common share:
|
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Basic:
|
||||||||||||||||||||||||||||||||||||||||
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Income from continuing operations
|
$ | 0.87 | $ | 0.78 | $ | 0.85 | $ | 0.93 | ||||||||||||||||||||||||||||||||
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Net income
|
$ | 0.87 | $ | 0.78 | $ | 0.85 | $ | 0.93 | ||||||||||||||||||||||||||||||||
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Diluted:
|
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Income from continuing operations
|
$ | 0.87 | $ | 0.78 | $ | 0.85 | $ | 0.93 | ||||||||||||||||||||||||||||||||
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Net income
|
$ | 0.87 | $ | 0.78 | $ | 0.85 | $ | 0.93 | ||||||||||||||||||||||||||||||||
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Dividends declared and paid per common share
|
$ | 1.20 | $ | 1.20 | $ | 1.20 | $ | 1.20 | ||||||||||||||||||||||||||||||||
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Weighted-average shares outstanding, basic
|
83,556 | 2,641 | g | 3,787 | i | 89,984 | - | - | 89,984 | - | - | 89,984 | ||||||||||||||||||||||||||||
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Weighted-average shares outstanding, diluted
|
83,649 | 2,641 | g | 3,787 | i | 90,077 | - | - | 90,077 | - | - | 90,077 | ||||||||||||||||||||||||||||
Omega Pro Forma Financial Statements
Unaudited Pro Forma Balance Sheet Adjustments
CapitalSource Transaction
Balance Sheet Pro Forma Adjustments:
|
a
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Reflects the Company’s historical balance sheet for the period ended December 31, 2009.
|
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b
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Reflects capital market activity in 2010 in connection with the CapitalSource transactions. In February 2010, the Company issued $200 million of its 7.5% 10 year senior notes at a discount and used the net proceeds to repay (i) amounts outstanding under its 2009 $200 million revolving credit facility and (ii) $59.4 million of secured borrowings assumed in connection with the December 22, 2009 acquisition of 40 facilities from CapitalSource (Closing 1). The discount on the $200 million 7.5% 10 year senior notes was approximately $3.4 million. In addition, the Company issued approximately 3.8 million shares of common stock under its Equity Shelf Program for net proceeds of approximately $73.8 million. In 2010, the Company incurred deferred financing costs associated with entering into a new $320 million revolving credit facility.
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|
c
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Reflects: (i) approximately $4.3 million in debt issuance cost associated with the $200 million 7.5% 10 year senior notes offering completed in February 2010 and $4.5 million in debt issuance costs associated with the new $320 million revolving credit facility completed in April 2010, and (ii) the write-off of December 31, 2009 unamortized debt issuance costs of $3.8 million associated with the 2009 $200 million revolving credit facility.
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d
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Reflects the discount on the issuance of the $200 million 7.5% 10 year senior notes issued in February 2010.
|
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e
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Reflects the write-off of December 31, 2009 unamortized debt issuance costs associated with the 2009 $200 million credit facility.
|
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f
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The aggregate consideration for the entities owning an additional 40 facilities to be acquired from CapitalSource (Closing 2) is estimated to be approximately $270.4 million, to consist of the following:
|
|
Preliminary estimated fair value of land, building and FF&E
|
$ | 281.1 | |||
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Estimated market adjustment for assumed HUD debt
|
(10.7 | ) | |||
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Total Consideration paid at closing
|
$ | 270.4 | |||
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Funding of Consideration:
|
|||||
|
Assumption of 9.0% subordinated debt
|
$ | 20.0 | |||
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Assumption of 6.41% HUD debt
|
53.8 | ||||
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Assumption of 4.85% HUD debt
|
129.6 | ||||
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Funds drawn from the Company’s revolving credit facility
|
67.0 | ||||
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Total Funding of consideration at Closing 2
|
$ | 270.4 |
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g
|
Reflects the pending acquisition of entities owning an additional 40 facilities from CapitalSource at Closing 2, which is expected to be completed during the second quarter of 2010. The aggregate consideration for the additional 40 facilities is estimated to be $270.4 million. The Company intends to account for the acquisition in accordance with guidance for business combinations and is currently in the process of analyzing the fair value of the acquired properties and the related in-place leases. The Company estimates that the value of the above and below market lease intangibles approximates one another and as a result no value has been assigned to in-place leases and no adjustment has been reflected for the amortization of the acquired lease intangibles. The purchase price allocations are preliminary and subject to change. Our preliminary allocation of the purchase price to real estate assets is as follows:
|
|
Land
|
$ | 34.3 | ||
|
Building and FF&E
|
246.8 | |||
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Total
|
$ | 281.1 |
|
h
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Reflects cash used to fund the acquisition of the 40 facilities in Closing 2 and estimated acquisition related costs.
|
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i
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Reflects cash expected to be received from CapitalSource that relates to liquidity deposits held for leases.
|
| j | Reflects debt that the Company expects to assume as part of Closing 2. The $203.4 million in assumed debt includes: $20.0 million in 9% subordinated debt that matures in December 2021, $53.8 million in Housing and Urban Development (“HUD”) Mortgage debt at a weighted average of 6.41% that matures between January 2036 and May 2040, and $129.6 million of new HUD debt at 4.85% that matures in 2039. The Company intends to account for the acquisition in accordance with guidance for business combinations and is currently in the process of analyzing the fair value of the assumed debt. The Company estimates that the current fair market value of the $53.8 million HUD debt at current market rates is approximately $64.5 million. No other adjustments have been made regarding fair market value adjustments for any of the other assumed debt as the Company has estimated that the carrying amount of such debt approximates fair value based on current borrowing rates of similar instruments. The purchase price allocations are preliminary and subject to change. Closing 2 is expected to occur during the second quarter of 2010. |
|
k
|
Reflects the liabilities associated with liquidity deposits noted above in footnote (i).
|
|
l
|
Reflects the Company’s estimate of acquisition related costs associated with Closing 2. The Company assumed that the costs were paid with available cash.
|
|
m
|
The aggregate consideration for the entities owning the additional 63 facilities to be acquired from CapitalSource upon the exercise of the Company’s purchase option at Closing 3 is estimated to be approximately $320.2 million, to consist of the following:
|
|
Preliminary estimated fair value of land, building and FF&E
|
$ | 320.2 | |||
|
Payment of deposit for purchase option paid during Closing 1
|
(25.0 | ) | |||
|
Total Consideration paid at closing
|
$ | 295.2 |
The Company plans to use funds from its line of credit to fund the $295.2 million in consideration due at closing.
|
n
|
Reflects the pending acquisition of entities owning an additional 63 facilities from CapitalSource at Closing 3, which is expected to be completed during the second quarter of 2010. The aggregate consideration for the additional 63 facilities is estimated to be $320.2 million. The Company intends to account for the acquisition in accordance with guidance for business combinations and is currently in the process of analyzing the fair value of the acquired properties and the related in-place leases. The Company estimates that the value of the above and below market lease intangibles approximates one another and as a result no value has been assigned to in-place leases and no adjustment has been reflected for the amortization of the acquired lease intangibles. The purchase price allocations are preliminary and subject to change. Our preliminary allocation of the purchase price to real estate assets is as follows:
|
|
Land
|
$ | 33.1 | ||
|
Building and FF&E
|
287.1 | |||
|
Total
|
$ | 320.2 |
|
o
|
Reflects cash expected to be received from CapitalSource that relates to liquidity deposits held for leases.
|
|
p
|
Reflects the exercise of the Company’s option to purchase the additional 63 facilities at Closing 3. The purchase option is applied to the total consideration for Closing 3 and is allocated to acquired assets and assumed liabilities.
|
|
q
|
Reflects funds used from the new 2010 $320 million revolving credit facility to fund the acquisition of 63 facilities from CapitalSource at Closing 3.
|
|
r
|
Reflects the liabilities associated with liquidity deposits noted above in footnote (o).
|
|
s
|
Reflects the Company’s estimate of acquisition related costs associated with Closing 3. The Company assumed that the costs were paid with funds drawn from the new 2010 $320 million revolving credit facility.
|
Omega Pro Forma Financial Statements
Unaudited Pro Forma Statement of Operation Adjustments
CapitalSource Transaction
Statement of Operations Pro Forma Adjustments:
|
a
|
Reflects the Company’s historical statements of operation for the year-ended December 31, 2009.
|
|
b
|
Reflects the full year impact of the December 22, 2009 (Closing 1) acquisition of 40 facilities from CapitalSource Inc. (CapitalSource) and related financing activities, including (i) a new five year $100 million in new 6.5% term loan which closed on December 18, 2009, (ii) the issuance of approximately 2.7 million shares of Company common stock valued at approximately $52.8 million on December 22, 2009 to an affiliate of CapitalSource, (iii) the assumption of $59.4 million in 6.8% CapitalSource mortgage debt and (iv) a draw of approximately $90 million under our 2009 $200 million revolving credit facility. The aggregate consideration for the 40 facilities was approximately $270 million. At Closing 1, the Company also purchased an option for $25 million to purchase an additional 63 CapitalSource facilities. The Company accounted for the acquisition in accordance with guidance for business combinations and is currently in the process of finalizing the analysis of the fair value of the acquired properties and the related in-place leases. The purchase price allocations are preliminary and subject to change.
|
|
c
|
Reflects full year impact of straight-line rents for Closing 1 facilities as if the lease start dates were January 1, 2009 and the estimated impact of in-place lease amortization associated with the purchased leases acquired at Closing 1.
|
|
d
|
Reflects the full year impact of depreciation and amortization associated with the Closing 1 facilities as if the facilities were acquired on January 1, 2009.
|
|
e
|
The adjustment is to reflect the full year impact of the interest costs related to the debt issued and assumed to finance Closing 1 as if the transaction had occurred on January 1, 2009. See footnote (b) above for additional details related to the debt issued and assumed in connection with Closing 1.
|
|
f
|
Reflects the full year impact of debt issuance cost associated with the $100 million term loan issued on December 18, 2009 related to Closing 1. The adjustment is to reflect the amortization of debt issuance costs related to the $100 million term loan as if the transaction had occurred on January 1, 2009.
|
|
g
|
Reflects the share impact as if Closing 1 had occurred on January 1, 2009 not December 22, 2009.
|
|
h
|
Reflects capital market activity in 2010 in preparation for the completion of the CapitalSource transactions. In February 2010, the Company issued $200 million of 7.5% 10 year bonds at a discount and used the net proceeds to repay all of the outstanding amounts under its 2009 $200 million revolving credit facility and $59.4 million of mortgage debt (i.e., secured borrowings) that was assumed from CapitalSource as part of Closing 1. The discount on the $200 million 7.5% 10 year bonds was approximately $3.4 million. In addition, the Company issued approximately 3.8 million shares of common stock under its Equity Shelf Program for net proceeds of approximately $73.8 million. In 2010, the Company incurred deferred financing costs associated with entering into a new 2010 $320 million revolving credit facility, replacing the existing 2009 $200 million revolving credit facility.
|
|
i
|
Represents the number of shares issued in capital market transactions in 2010 associated with our Equity Shelf Program. The adjustment is to reflect the issuance of these shares as if they occurred on January 1, 2009.
|
|
j
|
Reflects the historical financial results of operations for an additional 40 facilities to be acquired from CapitalSource (Closing 2), which the Company expects to acquire during the second quarter of 2010, for the year-end December 31, 2009. The aggregate consideration for the additional 40 facilities to be acquired at Closing 2 is estimated to be $270 million. The Company expects to assume approximately $203 million in debt as a result of Closing 2 from CapitalSource. The Company intends to account for the acquisition in accordance with guidance for business combinations and is currently in the process of analyzing the fair value of the acquired properties, the related in-place leases and assumed debt. The purchase price allocations are preliminary and subject to change.
|
|
k
|
Reflects the historical financial results of operations for an additional 63 facilities to be acquired from CapitalSource (Closing 3), which the Company expects to acquire during the second quarter of 2010, for the year-end December 31, 2009. The aggregate consideration for the additional 63 facilities to be acquired at Closing 3 is estimated to be $320 million. The Company intends to account for the acquisition in accordance with guidance for business combinations and is currently in the process of analyzing the fair value of the acquired properties, the related in-place leases and assumed debt. The purchase price allocations are preliminary and subject to change.
|
|
l
|
Reflects increased straight-line rents as if the lease start dates for Closing 2 and Closing 3 facilities were January 1, 2009.
|
|
Year-end
|
|||||
|
December 31,
|
|||||
|
2009
|
|||||
|
Closing 2, 40 Facilities expected to be acquired during the second quarter of 2010:
|
|||||
|
Rental income recorded by CapitalSource
|
$ | 28,927 | |||
|
Revenue income assuming the acquisition occurred on January 1, 2009
|
30,537 | ||||
|
Pro Forma adjustment to rental income
|
$ | 1,610 | |||
|
Closing 3, 63 Facilities expected to be acquired during the second quarter of 2010:
|
|||||
|
Rental income recorded by CapitalSource
|
$ | 33,947 | |||
|
Revenue income assuming the acquisition occurred on January 1, 2009
|
33,659 | ||||
|
Pro Forma adjustment to rental income
|
$ | (288 | ) | ||
|
m
|
Reflects an adjustment to eliminate the other investment income because we do not intend to purchase other assets from CapitalSource.
|
|
n
|
Reflects an adjustment to depreciation and amortization as if Closing 2 and Closing 3 facilities were purchased on January 1, 2009. The estimate is based on our preliminary estimate of the purchase price allocation for the 40 facilities expected to be acquired at Closing 2 during the second quarter of 2010 and the 63 additional facilities that are expected to be acquired at Closing 3 during the second quarter of 2010. The aggregate consideration for the 40 facilities that we expect to acquire at Closing 2 is approximately $270 million and the aggregate consideration for the additional 63 facilities that we expect to acquire at Closing 3 is approximately $320 million, including the $25 million in purchase option deposits that paid at Closing 1 related to Closing 3. The Company intends to account for both of these acquisitions in accordance with guidance for business combinations and is currently in the process of analyzing the fair value of these facilities and the related in-place leases. The purchase price allocations are preliminary and subject to change.
|
|
Year-end
|
|||||
|
December 31,
|
|||||
|
2009
|
|||||
|
Closing 2, 40 Facilities expected to be acquired during the second quarter of 2010:
|
|||||
|
Depreciation & amortization recorded by CapitalSource
|
$ | 7,911 | |||
|
Depreciation & amortization assuming the acquisition occurred on January 1, 2009
|
12,232 | ||||
|
Pro Forma adjustment to depreciation & amortization
|
$ | 4,321 | |||
|
Closing 3, 63 Facilities expected to be acquired during the second quarter of 2010:
|
|||||
|
Depreciation & amortization recorded by CapitalSource
|
$ | 10,160 | |||
|
Depreciation & amortization assuming the acquisition occurred on January 1, 2009
|
14,397 | ||||
|
Pro Forma adjustment to depreciation & amortization
|
$ | 4,237 | |||
|
o
|
Reflects the estimated reduction in general and administrative costs relating to allocations of corporate costs of CapitalSource that are not recurring direct costs of the Closing 2 and Closing 3 facilities, as applicable.
|
|
p
|
Represents interest expense on the assumed debt as part of Closing 2 and the anticipated draw on the Company’s new 2010 $320 million revolving credit facility in connection with Closing 3.
|
|
Year-end
|
|||||
|
December 31,
|
|||||
|
2009
|
|||||
|
Closing 2, 40 Facilities expected to be acquired during the second quarter of 2010:
|
|||||
|
Interest Expense Recorded by CapitalSource
|
$ | (5,445 | ) | ||
|
Interest expense assuming the acquisition occurred on January 1, 2009
|
(11,216 | ) | |||
|
Pro Forma adjustment to interest expense
|
$ | (5,771 | ) | ||
|
Closing 3, 63 Facilities expected to be acquired during the second quarter of 2010:
|
|||||
|
Interest Expense Recorded by CapitalSource
|
$ | (6,883 | ) | ||
|
Interest expense assuming the acquisition occurred on January 1, 2009
|
(11,848 | ) | |||
|
Pro Forma adjustment to interest expense
|
$ | (4,965 | ) | ||