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KITE REALTY GROUP TRUST FILES (8-K/A) Disclosing Financial Statements and Exhibits

February 5, 2014

Item 9.01 Financial Statements and Exhibits. In accordance with Rule 3-14 and Article 11 of Regulation S-X, Kite Realty Group Trust (the "Company") hereby files the following financial statement and pro forma information relating to the acquisition of nine retail properties, located in Florida , Georgia , Texas , and Alabama . (a) Financial Statements of Properties Acquired (OZ/CLP). Report of Independent Auditors Statements of Revenues and Certain Expenses for the year ended December 31, 2012 (audited) and nine months ended September 30, 2013 (unaudited) Notes to Statements of Revenues and Certain Expenses (b) Unaudited Pro Forma Financial Information ( Kite Realty Group Trust ). Unaudited pro forma consolidated balance sheet as of September 30, 2013 Unaudited pro forma consolidated statement of operations for the nine months ended September 30, 2013 Unaudited pro forma consolidated statement of operations for the year ended December 31, 2012 Notes to unaudited pro forma consolidated financial statements (d) Exhibits. Exhibit Description No. 23.1 Consent of Sellers, Richardson, Holman & West, LLP . 2 -------------------------------------------------------------------------------- Independent Auditor's Report To the Board of Directors and Stockholders Kite Realty Group Trust Indianapolis, IN Report on the Statement of Revenues and Certain Expenses We have audited the accompanying statement of revenues and certain expenses of OZ/CLP Hunter's Creek LLC , OZ/CLP Lakewood LLC , OZ/CLP Northdale LLC , OZ/CLP Burnt Store LLC , OZ/CLP Portofino LP , OZ/CLP Kingwood Commons LP , OZ/CLP Clay LLC , OZ/CLP Trussville I LLC , OZ/CLP Trussville II LLC , and OZ/CLP Beechwood LLC (Properties) for the year ended December 31, 2012 . Management's Responsibility for the Statement of Revenues and Certain Expenses Management is responsible for the preparation and fair presentation of the statement of revenues and certain expenses 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 statement of revenues and certain expenses that is free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on the statement of revenues and certain expenses based on our audit. We conducted our audit 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 statement of revenues and certain expenses is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the statement of revenues and certain expenses. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the statement of revenues and certain expenses, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the statement of revenues and certain expenses 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 entity'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 statement of revenues and certain expenses. 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 statement of revenues and certain expenses referred to above present fairly, in all material respects, the revenues and certain expenses (as defined in Note 1) of the Properties for the year 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 of the statement of revenues and certain expenses, which describes that the accompanying statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for the inclusion in the current report on Form 8-K/A of Kite Realty Group Trust and is not intended to be a complete presentation of the Properties' revenues and expenses. Our opinion is not modified with respect to this matter. /s/ Sellers Richardson Holman & West, LLP January 31, 2014 3 -------------------------------------------------------------------------------- Portfolio Acquisition Combined Statements of Revenues and Certain Expenses Year Ended December 31, 2012 and Nine-Months Ended September 30, 2013 (unaudited) (In thousands) Nine Months Ended September 30, 2013 Year Ended (Unaudited) December 31, 2012 Revenues Minimum rent $ 16,535 $ 21,244 Tenant reimbursements 4,237 5,595 Other 49 97 Total revenues 20,821 26,936 Certain expenses Property operating expenses 2,992 4,142 Real estate taxes 2,462 3,281 Total certain expenses 5,454 7,423 Revenues in excess of expenses $ 15,367 $ 19,513 See accompanying notes 4 -------------------------------------------------------------------------------- Portfolio Acquisition Notes to Combined Statements of Revenues and Certain Expenses Year Ended December 31, 2012 and Nine-Months Ended September 30, 2013 (unaudited) (In thousands) 1. Basis of Presentation On November 26, 2013 , the Company acquired sole ownership of nine retail shopping centers (the "Portfolio Acquisition") that were previously owned by OZ/CLP Hunter's Creek LLC , OZ/CLP Lakewood LLC , OZ/CLP Northdale LLC , OZ/CLP Burnt Store LLC , OZ/CLP Portofino LP , OZ/CLP Kingwood Commons LP , OZ/CLP Clay LLC , OZ/CLP Trussville I LLC , OZ/CLP Trussville II LLC , and OZ/CLP Beechwood LLC . The accompanying combined statements of revenues and certain expenses include the operations of the Portfolio Acquisition. The Portfolio Acquisition consists of the following nine retail properties: Owned Gross Leasable Area Property Name Property Location (unaudited) Major Tenants Lakewood Promenade Jacksonville, Florida 196,870 Stein Mart, Winn Dixie TJ Maxx, Beall's, Crunch Fitness Sweetbay Northdale Promenade Tampa, Florida 176,925 (non-owned) Hunter's Creek Promenade Orlando, Florida 119,729 Publix Publix, Home Depot Burnt Store Promenade Punta Gorda, Florida 94,223 (non-owned) DSW, Michaels, Sports Authority, Lifeway Christian Store, Stein Mart, PetSmart, Conn's Portofino Shopping Center Houston, Texas 371,792 Appliances, Old Navy Randall's Food and Drug, Petco, Chico's, Talbots, Kingwood Commons Houston, Texas 164,356 Ann Taylor, Jos. A. Bank Wal-Mart, Regal Cinema, Marshalls, Big Lots, PetSmart, Dollar Tree, Kohl's (non-owned), Sam's Trussville Promenade Birmingham, Alabama 446,484 Club (non-owned) Clay Marketplace Birmingham, Alabama 66,165 Publix TJ Maxx, Georgia Theatre, CVS, BodyPlex, Stein Mart, Fresh Market, Jos. A. Bank, Ann Taylor, Beechwood Promenade Athens, Georgia 342,322 Coldwater Creek, Talbots The accompanying statements of revenues and certain expenses relate to the Portfolio Acquisition and have been prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act of 1933, as amended. Accordingly, the statements are not representative of the actual operations for the periods presented as revenues and certain operating expenses. Certain revenues and expenses expected to be incurred in the future operations of the Portfolio Acquisition, have been excluded. Such items include depreciation, amortization, management fees, certain property administrative expenses, interest expense, interest income and amortization of above-and below-market leases. 2. Summary of Significant Accounting Policies Revenue Recognition The Portfolio Acquisition recognizes rental revenue from tenants on a straight-line basis over the lease term when collectability is reasonably assured and the tenant has taken possession or controls the physical use of the leased asset. Tenant recoveries related to reimbursement of real estate taxes, insurance, repairs and maintenance, and other operating expenses are recognized as revenue in the period the applicable expenses are incurred. The reimbursements are recognized and presented gross, as the Portfolio Acquisition is generally the primary obligor with respect to purchasing goods and services from third-party suppliers, has discretion in selecting the supplier and bears the associated credit risk. Repairs and Maintenance Expenditures for maintenance and repairs are charged to expense as incurred. Renovations and expenditures which improve or extend the useful life of the asset are capitalized. 5 -------------------------------------------------------------------------------- Use of Estimates Management has made certain estimates and assumptions relating to the reporting and disclosure of revenues and certain expenses to present the statements of revenues and certain expenses in conformity with U.S. generally accepted accounting principles. Actual results could differ from those estimates. 3. Minimum Future Lease Rentals There are various lease agreements in place with tenants to lease space in the Portfolio Acquisition. As of September 30, 2013 , the minimum future cash rents receivable under noncancelable operating leases in each of the next five years and thereafter are as follows (unaudited): 2013 (three months ending December 31, 2013) $ 5,393 2014 22,158 2015 19,924 2016 15,197 2017 12,371 2018 10,433 Thereafter 21,626 $ 107,102 Leases generally require reimbursement of the tenant's proportional share of common area, real estate taxes and other operating expenses, which are excluded from the amounts above. 4. Commitments and Contingencies The Portfolio Acquisition is subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance. Management believes that the ultimate settlement of these actions will not have a material adverse effect on the Portfolio Acquisition's results of operations. 5. Subsequent Events The Portfolio Acquisition evaluated subsequent events through January 31, 2014 , the date the financial statements were available to be issued. 6 -------------------------------------------------------------------------------- KITE REALTY GROUP TRUST UNAUDITED PRO FORMA FINANCIAL INFORMATION On November 26, 2013 , Kite Realty Group Trust (the "Company") acquired sole ownership of nine retail shopping centers (the " Acquired Properties ") that were previously owned by OZ/CLP Hunter's Creek LLC , OZ/CLP Lakewood LLC , OZ/CLP Northdale LLC , OZ/CLP Burnt Store LLC , OZ/CLP Portofino LP , OZ/CLP Kingwood Commons LP , OZ/CLP Clay LLC , OZ/CLP Trussville I LLC , OZ/CLP Trussville II LLC , and OZ/CLP Beechwood LLC (the "Portfolio Acquisition"). The following unaudited pro forma consolidated balance sheet of the Company as of September 30, 2013 and unaudited pro forma consolidated statements of operations of the Company for the year ended December 31, 2012 and the nine months ended September 30, 2013 have been prepared as if the Portfolio Acquisition and related capital activities had occurred on September 30, 2013 for the pro forma consolidated balance sheet, and as if the Portfolio Acquisition and concurrent capital activities had occurred on January 1, 2012 . The Company's pro forma consolidated financial statements are presented for informational purposes only and should be read in conjunction with the historical financial statements of the Acquired Properties and related notes thereto included elsewhere in this filing and the Company's Form 10-K and Forms 10-Q filed with the Securities and Exchange Commission . The adjustments to the Company's pro forma consolidated financial statements are based on available information and assumptions that the Company considers reasonable. The Company's pro forma consolidated financial statements do not purport to (1) represent the Company's financial position that would have actually occurred had the acquisition and related capital activities occurred on September 30, 2013 , (2) represent the results of the Company's operations that would have actually occurred had the acquisition and related capital activities occurred on January 1, 2012 or (3) project the Company's financial position or results of operations as of any future date or for any future period, as applicable. 7 -------------------------------------------------------------------------------- KITE REALTY GROUP TRUST UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET As of September 30, 2013 (in Thousands) Kite Realty Group Pro Forma Adjustments Company Pro Forma Trust (A) (B) Assets: Investment properties, at cost: $ 1,528,032 $ 315,150 $ 1,843,182 Less: accumulated depreciation (220,782 ) - (220,782 ) 1,307,250 315,150 1,622,400 Cash and cash equivalents 12,130 - 12,130 Tenant receivables 22,374 - 22,374 Other receivables 5,938 - 5,938 Escrow deposits 11,389 - 11,389 Deferred costs, net 41,187 15,278 56,465 Prepaid and other assets 4,019 - 4,019 Total Assets $ 1,404,287 $ 330,428 $ 1,734,715 Liabilities and Equity: Notes payable $ 743,985 $ 86,900 $ 830,885 Accounts payable and accrued expenses 50,638 1,400 52,038 Deferred revenue and other 18,217 24,889 43,106 liabilities Total Liabilities 812,840 113,189 926,029 Commitments and contingencies Redeemable noncontrolling interests 40,114 - 40,114 in the Operating Partnership Equity: Kite Realty Group Trust Shareholders' Equity Preferred Shares 102,500 - 102,500 Common Shares 939 368 1,307 Additional paid-in capital 608,201 216,871 825,072 Accumulated other comprehensive (229 ) - (229 ) loss Accumulated deficit (163,621 ) - (163,621 ) Total Kite Realty Group Trust 547,790 217,239 765,029 Shareholders' Equity Noncontrolling Interests 3,543 - 3,543 Total Equity 551,333 217,239 768,572 Total Liabilities and Equity $ 1,404,287 $ 330,428 $ 1,734,715 See accompanying notes 8 -------------------------------------------------------------------------------- KITE REALTY GROUP TRUST UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS For the nine months ended September 30, 2013 (in Thousands, except per share amounts) Kite Realty Group Financing Portfolio Company Pro Forma Trust Transactions Acquisition (AA) (BB) (CC) Revenue: Minimum rent $ 67,215 - 17,662 84,877 Tenant reimbursements 17,351 - 4,237 21,588 Other property-related 9,300 - 49 9,349 revenue Total revenue 93,866 - 21,948 115,814 Expenses: Office operating expenses 15,582 - 2,992 18,574 Real estate taxes 10,685 - 2,462 13,147 General, administrative 6,069 - - 6,069 and other Acquisition costs 567 - - 567 Depreciation and 40,626 - 15,874 56,500 amortization Total expenses 73,529 - 21,328 94,857 Operating income 20,337 - 620 20,957 Interest expense (20,989 ) (1,388 ) - (22,377 ) Income tax expense (106 ) - - (106 ) Other expense (39 ) - - (39 ) (Loss) income from (797 ) (1,388 ) 620 (1,565 ) continuing operations Loss from discontinued (3,158 ) - - (3,158 ) operations Consolidated net loss (3,955 ) (1,388 ) 620 (4,723 ) Net loss attributable to 651 (136 ) (32 ) 483 (DD) noncontrolling interests Net loss attributable to (3,304 ) (1,524 ) 588 (4,240 ) Kite Realty Group Trust Dividends on (6,342 ) - - (6,342 ) preferred shares Net loss attributable to $ (9,646 ) $ (1,524 ) $ 588 $ (10,582 ) common shareholders Net loss attributable to shareholders' per $ (0.11 ) $ (0.09 ) (EE) share-basic and diluted Pro Forma weighted average shares outstanding-basic 87,627 124,427 (EE) and diluted See accompanying notes 9 -------------------------------------------------------------------------------- KITE REALTY GROUP TRUST UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS For the year ended December 31, 2012 (in Thousands, except per share amounts) Kite Realty Financing Portfolio Company Pro Forma Group Trust Transactions Acquisition (AA) (BB) (CC) Revenue: Minimum rent $ 76,529 $ - $ 22,747 $ 99,276 Tenant reimbursements 20,178 - 5,595 25,773 Other property-related 4,051 - 97 4,148 revenue Total revenue 100,758 - 28,439 129,197 Expenses: Office operating expenses 17,392 - 4,142 21,534 Real estate taxes 13,300 - 3,281 16,581 General and 7,124 - - 7,124 administrative Acquisition costs 364 - - 364 Litigation charge, net 1,007 - - 1,007 Depreciation and 40,372 - 21,165 61,537 amortization Total expenses 79,559 - 28,588 108,147 Operating income (loss) 21,199 - (149 ) 21,050 Interest expense (25,660 ) (1,851 ) - (27,511 ) Income tax benefit 106 - - 106 Remeasurement loss on (7,980 ) - - (7,980 ) consolidation Other income 209 - - 209 Loss from continuing (12,126 ) (1,851 ) (149 ) (14,126 ) operations Income from discontinued 8,421 - 8,421 operations Consolidated net loss (3,705 ) (1,851 ) (149 ) (5,705 ) Net loss attributable to (629 ) (318 ) 9 (938 ) (DD) noncontrolling interests Net loss attributable to (4,334 ) (2,169 ) (140 ) (6,643 ) Kite Realty Group Trust Dividends on preferred (7,920 ) - - (7,920 ) shares Net loss attributable to $ (12,254 ) $ (2,169 ) $ (140 ) $ (14,563 ) common shareholders Net loss attributable to shareholders' per $ (0.18 ) $ (0.14 ) (EE) share-basic and diluted Pro Forma weighted average shares 66,885 103,685 (EE) outstanding-basic and diluted


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