EX-99.2 3 a20-1516_1ex99d2.htm EX-99.2

EXHIBIT 99.2

Unaudited Combined Pro Forma Financial Statements

 

The following unaudited pro forma combined financial statements have been included to show the pro forma effect of the Asset Sale and Special Distribution, as described elsewhere in this Current Report on Form 8-K, and have been prepared in accordance with Article 11 of Regulation S-X by applying pro forma adjustments to our historical combined financial information. The unaudited pro forma combined balance sheet gives effect to the transaction as if it had occurred on September 30, 2019. The unaudited pro forma combined statements of operations give effect to the transaction as if it had occurred on January 1, 2016. All significant pro forma adjustments and underlying assumptions are described in the notes to the unaudited pro forma combined financial statements.

 

The following unaudited pro forma combined financial statements give effect to the following:

 

·                  The sale of substantially all of our assets (excluding our interests in the BTC Partnerships) to Prologis pursuant to the Asset Sale;

 

·                  Receipt of the consideration from Prologis in connection with the Asset Sale and payment of various related expenses, including the distribution to our sponsor in respect of its special partnership units in the Operating Partnership and the asset management fee to be paid to our external advisor pursuant to the advisory agreement with our external advisor; and

 

·                  Payment to our stockholders of the Special Distribution consisting of the net Asset Sale consideration, after the expenses described above.

 

The unaudited pro forma combined financial statements do not give effect to the potential impact of current financial conditions, any anticipated synergies, operating efficiencies or cost savings that may result from the transactions described above.  The pro forma adjustments are based on currently available information and assumptions we believe are reasonable, factually supportable, directly attributable to the Asset Sale and Special Distribution, and for purposes of the statements of operations, are expected to have a continuing impact on our business. Our unaudited pro forma combined financial statements and explanatory notes present how our financial statements may have appeared had we completed the above transactions as of the dates noted above.

 

The unaudited pro forma combined financial statements are presented for illustrative purposes only and are not necessarily indicative of the financial position or financial results that would have actually been reported had the transactions occurred on January 1, 2016 or September 30, 2019, as applicable, nor are they indicative of our future financial position or financial results. The differences that may occur between the preliminary estimates and the final accounting could have a material impact on the unaudited pro forma combined financial statements, including the impact on pro forma amortization of intangible assets and depreciation of property, plant and equipment. Additionally, the unaudited pro forma combined statements of operations for the three most recent fiscal years and subsequent interim period are presented as the Asset Sale is a significant disposition that has not yet been reflected in our historical financial statements as discontinued operations.

 

The unaudited pro forma combined financial statements do not indicate results expected for any future period. The unaudited pro forma combined financial statements should be read in conjunction with our historical consolidated financial statements and related notes thereto included in our Quarterly Report on Form 10-Q filed with the Commission on November 12, 2019 and our Annual Report on Form 10-K filed with the Commission on March 6, 2019.

 


 

INDUSTRIAL PROPERTY TRUST INC.

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

AS OF SEPTEMBER 30, 2019

(Unaudited)

 

(in thousands, except per share data)

 

Company
Historical (1)

 

Dispositions (2)

 

Pro Forma
Adjustments

 

Consolidated
Pro Forma

 

ASSETS

 

 

 

 

 

 

 

 

 

Net investment in real estate properties

 

$

2,602,043

 

$

(2,602,043

)

$

 

$

 

Investment in unconsolidated joint venture partnerships

 

121,552

 

 

 

121,552

 

Cash and cash equivalents

 

6,024

 

3,990,000

 

(3,939,024

)(3)

57,000

 

Straight-line and tenant receivables, net

 

32,526

 

(32,526

)

 

 

Due from affiliates

 

28

 

(28

)

 

 

Other assets

 

15,137

 

(14,426

)

 

711

 

Total assets

 

$

2,777,310

 

$

1,340,977

 

$

(3,939,024

)

$

179,263

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

32,362

 

$

(32,362

)

$

2,000

(4)

$

2,000

 

Debt, net

 

1,546,229

 

(1,603,229

)

57,000

(5)

 

Due to affiliates

 

390

 

(390

)

1,500

(6)

1,500

 

Distributions payable

 

23,941

 

 

(23,941

)

 

Distribution fees payable to affiliates

 

12,259

 

 

(12,259

)

 

Other liabilities

 

38,651

 

(38,651

)

 

 

Total liabilities

 

1,653,832

 

(1,674,632

)

24,300

 

3,500

 

Equity

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value

 

 

 

 

 

Class A common stock, $0.01 par value per share

 

1,060

 

 

720

(7)

1,780

 

Class T common stock, $0.01 par value per share

 

720

 

 

(720

)(7)

 

Additional paid-in capital

 

1,607,537

 

2,886,444

 

(3,963,324

)

530,657

 

Accumulated deficit

 

(488,920

)

132,245

 

 

(356,675

)

Accumulated other comprehensive income

 

3,080

 

(3,080

)

 

 

Total stockholders’ equity

 

1,123,477

 

3,015,609

 

(3,963,324

)

175,762

 

Noncontrolling interests

 

1

 

 

 

1

 

Total equity

 

1,123,478

 

3,015,609

 

(3,963,324

)

175,763

 

Total liabilities and equity

 

$

2,777,310

 

$

1,340,977

 

$

(3,939,024

)

$

179,263

 

 


(1)                   Reflects the Company’s historical condensed consolidated balance sheet as of September 30, 2019. Refer to the Company’s historical consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 12, 2019.

(2)                   Represents the pro forma adjustments to reflect the disposition of all of our wholly-owned properties pursuant to the Asset Sale and subsequent payment of the Special Distribution to the Company’s stockholders, as if such transactions had occurred on September 30, 2019. This includes the elimination of the related assets and liabilities. Upon closing of the Asset Sale, the Company will pay off its outstanding indebtedness not assumed by Prologis or its affiliates.

(3)                   Represents the payment of various expenses, including the distribution to our sponsor in respect to its special partnership units in the Operating Partnership and the asset management fee to be paid to our external advisor pursuant to the advisory agreement with our external advisor, and payment to our stockholders of the Special Distribution consisting of the net Asset Sale consideration, after the various expenses previously described.

(4)                   Amount represents estimated one-time transitional costs that are expected to be incurred as a result of completing the sale subsequent to December 31, 2019. These one-time transitional costs relate to general and administration activities that will be required as a result of owning and selling the wholly-assets after December 31, 2019.

(5)                   Prior to closing the Asset Sale, the Company will borrow $57.0 million under our Operating Partnership’s revolving credit facility.

(6)                   Amount represents asset management fees that are expected to be incurred as a result of completing the sale subsequent to December 31, 2019.

(7)                   Upon closing of the Asset Sale and as a result of the payment to broker dealers of the remaining distribution fees, each Class T share will automatically convert to one Class A share.

 


 

INDUSTRIAL PROPERTY TRUST INC.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

(Unaudited)

 

(in thousands, except per share data)

 

Company
Historical (1)

 

Dispositions (2)

 

Pro Forma
Adjustments

 

Consolidated
Pro Forma

 

Revenues:

 

 

 

 

 

 

 

 

 

Rental revenues

 

$

188,114

 

$

(188,114

)

$

 

$

 

Total revenues

 

188,114

 

(188,114

)

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Rental expenses

 

50,222

 

(50,222

)

 

 

Real estate-related depreciation and amortization

 

79,239

 

(79,239

)

 

 

General and administrative expenses

 

7,546

 

 

(5,120

)(3)

2,426

 

Asset management fees, related party

 

18,030

 

(17,489

)

 

541

 

Total operating expenses

 

155,037

 

(146,950

)

(5,120

)

2,967

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

Equity in income of unconsolidated joint venture partnerships

 

1,783

 

 

 

1,783

 

Interest expense and other

 

(39,469

)

39,469

 

 

 

Net gain on disposition of real estate properties

 

6,083

 

 

(6,083

)(4)

 

Total other (expenses) income

 

(31,603

)

39,469

 

(6,083

)

1,783

 

Net income (loss)

 

1,474

 

(1,695

)

(963

)

(1,184

)

Net (income) loss attributable to noncontrolling interests

 

 

 

 

 

Net income (loss) attributable to common stockholders

 

$

1,474

 

$

(1,695

)

$

(963

)

$

(1,184

)

Weighted-average shares outstanding

 

177,552

 

 

 

 

 

177,552

 

Net income (loss) per common share - basic and diluted

 

$

0.01

 

 

 

 

 

$

(0.01

)

 


(1)                     Reflects the Company’s historical consolidated statement of operations for the nine months ended September 30, 2019. Refer to the Company’s historical consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 12, 2019.

(2)                     Represents adjustments to reflect the disposition of all of our wholly-owned properties pursuant to the Asset Sale and subsequent payment of the Special Distribution to the Company’s stockholders, as if such transactions had occurred on January 1, 2016. Amounts reflect the historical operations that are included in the Company’s historical condensed consolidated statement of operations for the nine months ended September 30, 2019.

(3)                     Represents adjustment to reduce general and administrative expenses as a result of selling substantially all of our assets pursuant to the Asset Sale and is derived from the Company’s estimate of general and administrative expenses.

(4)                     Adjustment reflects the elimination of the net gain recorded in the Company’s historical consolidated statement of operations statements. The net gain relates to disposition of real estate properties during the nine months ended September 30, 2019. For purposes of the pro forma information presented above, it is assumed that if those wholly-owned real estate properties had not previously been disposed of they would be included in the Asset Sale.

 


 

INDUSTRIAL PROPERTY TRUST INC.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2018

(Unaudited)

 

(in thousands, except per share data)

 

Company
Historical (1)

 

Dispositions (2)

 

Pro Forma
Adjustments

 

Consolidated
Pro Forma

 

Revenues:

 

 

 

 

 

 

 

 

 

Rental revenues

 

$

241,299

 

$

(241,299

)

$

 

$

 

Total revenues

 

241,299

 

(241,299

)

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Rental expenses

 

63,670

 

(63,670

)

 

 

Real estate-related depreciation and amortization

 

111,942

 

(111,942

)

 

 

General and administrative expenses

 

9,557

 

 

(6,323

)(3)

3,234

 

Asset management fees, related party

 

24,852

 

(24,135

)

 

717

 

Total operating expenses

 

210,021

 

(199,747

)

(6,323

)

3,951

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

Equity in income of unconsolidated joint venture partnerships

 

8,736

 

 

 

8,736

 

Interest expense and other

 

(50,401

)

50,401

 

 

 

Net gain on disposition of real estate properties

 

3,550

 

 

(3,550

)(4)

 

Total other (expenses) income

 

(38,115

)

50,401

 

(3,550

)

8,736

 

Net (loss) income

 

(6,837

)

8,849

 

2,773

 

4,785

 

Net loss (income) attributable to noncontrolling interests

 

 

 

 

 

Net (loss) income attributable to common stockholders

 

$

(6,837

)

$

8,849

 

$

2,773

 

$

4,785

 

Weighted-average shares outstanding

 

176,283

 

 

 

 

 

176,283

 

Net (loss) income per common share - basic and diluted

 

$

(0.04

)

 

 

 

 

$

0.03

 

 


(1)                     Reflects the Company’s historical consolidated statement of operations for the year ended December 31, 2018. Refer to the Company’s historical consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the Commission on March 6, 2019.

(2)                     Represents adjustments to reflect the disposition of all of our wholly-owned properties pursuant to the Asset Sale and subsequent payment of the Special Distribution to the Company’s stockholders, as if such transactions had occurred on January 1, 2016. Amounts reflect the historical operations that are included in the Company’s historical condensed consolidated statement of operations for the year ended December 31, 2018.

(3)                     Represents adjustment to reduce general and administrative expenses as a result of selling substantially all of our assets pursuant to the Asset Sale and is derived from the Company’s estimate of general and administrative expenses.

(4)                     Adjustment reflects the elimination of the net gain recorded in the Company’s historical consolidated statement of operations. The net gain relates to disposition of real estate properties during 2018. For purposes of the pro forma information presented above, it is assumed that if those wholly-owned real estate properties had not previously been disposed of they would be included in the Asset Sale.

 


 

INDUSTRIAL PROPERTY TRUST INC.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2017

(Unaudited)

 

(in thousands, except per share data)

 

Company
Historical (1)

 

Dispositions (2)

 

Pro Forma
Adjustments

 

Consolidated
Pro Forma

 

Revenues:

 

 

 

 

 

 

 

 

 

Rental revenues

 

$

223,358

 

$

(223,358

)

$

 

$

 

Total revenues

 

223,358

 

(223,358

)

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Rental expenses

 

58,053

 

(58,053

)

 

 

Real estate-related depreciation and amortization

 

111,649

 

(111,649

)

 

 

General and administrative expenses

 

9,191

 

 

(6,081

)(3)

3,110

 

Asset management fees, related party

 

22,470

 

(21,963

)

 

507

 

Total operating expenses

 

201,363

 

(191,665

)

(6,081

)

3,617

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

Equity in income of unconsolidated joint venture partnerships

 

1,479

 

 

 

1,479

 

Interest expense and other

 

(41,750

)

41,750

 

 

 

Net gain on disposition of real estate properties

 

44

 

 

(44

)(4)

 

Total other (expenses) income

 

(40,227

)

41,750

 

(44

)

1,479

 

Net (loss) income

 

(18,232

)

10,057

 

6,037

 

(2,138

)

Net loss (income) attributable to noncontrolling interests

 

(85

)

 

 

(85

)

Net (loss) income attributable to common stockholders

 

$

(18,317

)

$

10,057

 

$

6,037

 

$

(2,223

)

Weighted-average shares outstanding

 

169,270

 

 

 

 

 

169,270

 

Net (loss) income per common share - basic and diluted

 

$

(0.11

)

 

 

 

 

$

(0.01

)

 


(1)                     Reflects the Company’s historical consolidated statement of operations for the year ended December 31, 2017. Refer to the Company’s historical consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the Commission on March 6, 2019.

(2)                     Represents adjustments to reflect the disposition of all of our wholly-owned properties pursuant to the Asset Sale and subsequent payment of the Special Distribution to the Company’s stockholders, as if such transactions had occurred on January 1, 2016. Amounts reflect the historical operations that are included in the Company’s historical condensed consolidated statement of operations for the year ended December 31, 2017.

(3)                     Represents adjustment to reduce general and administrative expenses as a result of selling substantially all of our assets pursuant to the Asset Sale and is derived from the Company’s estimate of general and administrative expenses.

(4)                     Adjustment reflects the elimination of the net gain recorded in the Company’s historical consolidated statement of operations. The net gain relates to disposition of real estate properties during 2017. For purposes of the pro forma information presented above, it is assumed that if those wholly-owned real estate properties had not previously been disposed of they would be included in the Asset Sale.

 


 

INDUSTRIAL PROPERTY TRUST INC.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2016

(Unaudited)

 

(in thousands, except per share data)

 

Company
Historical (1)

 

Dispositions (2)

 

Pro Forma
Adjustments

 

Consolidated
Pro Forma

 

Revenues:

 

 

 

 

 

 

 

 

 

Rental revenues

 

$

176,289

 

$

(176,289

)

$

 

$

 

Total revenues

 

176,289

 

(176,289

)

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Rental expenses

 

45,488

 

(45,488

)

 

 

Real estate-related depreciation and amortization

 

96,629

 

(96,629

)

 

 

General and administrative expenses

 

7,103

 

 

(4,699

)(3)

2,404

 

Asset management fees, related party

 

17,775

 

(17,494

)

 

281

 

Acquisition fees, related party

 

24,489

 

 

(24,489

)(4)

 

Acquisition expenses

 

12,420

 

 

(12,420

)(4)

 

Impairment of real estate property

 

2,672

 

 

(2,672

)(5)

 

Total operating expenses

 

206,576

 

(159,611

)

(44,280

)

2,685

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

Equity in loss of unconsolidated joint venture partnerships

 

(599

)

 

 

(599

)

Interest expense and other

 

(28,726

)

28,726

 

 

 

Net gain on disposition of real estate properties

 

1,428

 

 

(1,428

)(5)

 

Total other (expenses) income

 

(27,897

)

28,726

 

(1,428

)

(599

)

Total expenses before expense support

 

234,473

 

(188,337

)

(42,852

)

3,284

 

Total expense support repayment to Advisor

 

(5,111

)

 

 

(5,111

)

Net expenses after expense repayment

 

239,584

 

(188,337

)

(42,852

)

8,395

 

Net (loss) income

 

(63,295

)

12,048

 

42,852

 

(8,395

)

Net loss (income) attributable to noncontrolling interests

 

(31

)

 

 

(31

)

Net (loss) income attributable to common stockholders

 

$

(63,326

)

$

12,048

 

$

42,852

 

$

(8,426

)

Weighted-average shares outstanding

 

133,524

 

 

 

 

 

133,524

 

Net (loss) income per common share - basic and diluted

 

$

(0.47

)

 

 

 

 

$

(0.06

)

 


(1)                     Reflects the Company’s historical consolidated statement of operations for the year ended December 31, 2016. Refer to the Company’s historical consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the Commission on March 6, 2019.

(2)                     Represents adjustments to reflect the disposition of all of our wholly-owned properties pursuant to the Asset Sale and subsequent payment of the Special Distribution to the Company’s stockholders, as if such transactions had occurred on January 1, 2016. Amounts reflect the historical operations that are included in the Company’s historical condensed consolidated statement of operations for the year ended December 31, 2016.

(3)                     Represents adjustment to reduce general and administrative expenses as a result of selling substantially all of our assets pursuant to the Asset Sale and is derived from the Company’s estimate of general and administrative expenses.

(4)                     Adjustment reflects the elimination of acquisition fees and expenses recorded in the Company’s historical consolidated statement of operations. The acquisition fees and expenses incurred relate to properties that were acquired during 2016. For purposes of the pro forma information presented above, it is assumed that these fees and expenses were incurred prior to January 1, 2016.

(5)                     Adjustment reflects the elimination of the impairment and net gain recorded in the Company’s historical consolidated statement of operations. The impairment and net gain relates to disposition of real estate properties during 2016. For purposes of the pro forma information presented above, it is assumed that if those wholly-owned real estate properties had not previously been disposed of they would be included in the Asset Sale.