UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): December 10, 2019
(Exact Name of Registrant as Specified in Its Charter) | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
(Address of Principal Executive Offices, Including Zip Code)
(310 ) 282-8820
(Registrant’s Telephone Number, Including Area Code)
N/A
(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 (see General Instruction A.2. below):
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)) | |
Securities registered pursuant to Section 12(b) of the Act: | ||||
Title of Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |||
Emerging growth company | |||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | ||
Item 2.01 Completion of Acquisition or Disposition of Assets.
On December 10, 2019, Colony Industrial Fund JV L.P. (the “Seller”), an affiliate of Colony Capital, Inc. (the “Company”) completed the previously announced sale to BREP 9 Sapphire Holdings LLC, a Delaware limited liability company and an affiliate of Blackstone Real Estate Partners IX L.P., an affiliate of The Blackstone Group Inc. (the “Purchaser”) for $5.7 billion of all of the Seller’s interests (the “Light Industrial Interests”) in the Company’s light industrial portfolio consisting of approximately 60 million square feet of infill located, logistics assets across 465 light industrial assets in 26 U.S. markets, with significant concentration in Dallas, Atlanta, Chicago, Florida and New Jersey. The Company indirectly held approximately 34% of the Light Industrial Interests, with the remaining 66% held by indirect third party limited partners of the Seller.
The Company received aggregate net proceeds, after debt settlement, transaction and other costs, of $1.2 billion, for its interest in the Light Industrial Interests and the sale of the Management Platform (as defined below).
Item 8.01 Other Events.
On December 10, 2019, the Company, through certain subsidiaries, completed the Company’s previously announced sale to the Purchaser of certain of the Company’s tangible and intangible assets used in connection with its management and operation of the Company's industrial portfolio (the “Management Platform”).
Item 9.01 Financial Statements and Exhibits.
(b) Pro forma financial information.
The unaudited pro forma condensed consolidated balance sheet of the Company as of September 30, 2019 and the unaudited pro forma condensed consolidated statements of operations of the Company for each of the three years in the period ended December 31, 2018 and notes thereto, each giving effect to the sale of the Company's Light Industrial Interests and Management Platform (the "Disposition"), are filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference. The unaudited consolidated statement of operations for the nine months ended September 30, 2019 reflecting the Disposition as discontinued operations was included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.
(d) Exhibits.
Exhibit No. | Description | |
99.1 | ||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: | December 16, 2019 | COLONY CAPITAL, INC. | |
By: | /s/ Mark M. Hedstrom | ||
Mark M. Hedstrom | |||
Chief Financial Officer, Chief Operating Officer and Treasurer | |||
EXHIBIT 99.1
COLONY CAPITAL, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On December 10, 2019, certain affiliates of Colony Capital, Inc. (the “Company”) completed the sale to certain affiliates of The Blackstone Group Inc. (the “Purchaser”) of (i) all of the Seller’s interests (the “Light Industrial Interests”) in the Company’s light industrial portfolio and (ii) certain of the Company’s tangible and intangible assets used in connection with its management and operation of the Company's industrial portfolio (the “Management Platform”), for an aggregate gross sales price of approximately $5.7 billion. The Company received aggregate net proceeds, after debt settlement, transaction and other costs, of $1.2 billion, for its interest in the Light Industrial Interests and the sale of the Management Platform.
The following pro forma condensed consolidated financial statements and notes thereto are based upon the historical financial condition and results of operations of the Company and give effect to: (i) disposition of the Company’s Light Industrial Interests and the Management Platform (the “Disposition”); (ii) realization of carried interest, which is a disproportionate allocation of net income to the Company as general partner of its industrial closed-end and open-end funds in connection with the disposition of the Company’s light industrial portfolio; and (iii) payment of compensation triggered by the Disposition.
The pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not intended to represent or be indicative of the Company’s financial position or results of operations had the Disposition been completed as of the beginning of the earliest period presented, nor are they indicative of the Company’s future financial condition or results of operations.
The unaudited pro forma condensed consolidated balance sheet as of September 30, 2019 is presented as if the Disposition had closed on September 30, 2019. The unaudited pro forma condensed consolidated statements of operations for each of the three years in the period ended December 31, 2018 are presented as if the Disposition had closed on January 1, 2016, the beginning of the earliest period presented. The unaudited consolidated statement of operations for the nine ended September 30, 2019 reflecting the Disposition as discontinued operations was included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.
The pro forma adjustments are based upon available information and assumptions that the Company's management believes are reasonable and factually supportable, and are directly attributable to the Disposition, and for purposes of the pro forma statements of operations, are expected to have a continuing impact. Actual amounts could differ materially from these estimates. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical consolidated financial statements and notes thereto in Item 15 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and Item 1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.
1
COLONY CAPITAL, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 2019
(In thousands)
As Reported | Adjustments | Pro Forma | |||||||||||
Assets | |||||||||||||
Cash and cash equivalents | $ | 455,330 | $ | 1,164,217 | (a) | $ | 1,619,547 | ||||||
Restricted cash | 257,435 | 35,000 | (b) | 292,435 | |||||||||
Real estate, net | 9,722,420 | — | 9,722,420 | ||||||||||
Loans receivable, net | 1,454,199 | — | 1,454,199 | ||||||||||
Equity and debt investments | 2,291,121 | — | 2,291,121 | ||||||||||
Goodwill | 1,374,809 | — | 1,374,809 | ||||||||||
Deferred leasing costs and intangible assets, net | 438,365 | — | 438,365 | ||||||||||
Assets held for sale | 5,560,203 | (4,165,033 | ) | (c) | 1,395,170 | ||||||||
Other assets | 516,964 | — | 516,964 | ||||||||||
Due from affiliates | 53,148 | — | 53,148 | ||||||||||
Total assets | $ | 22,123,994 | $ | (2,965,816 | ) | $ | 19,158,178 | ||||||
Liabilities | |||||||||||||
Debt, net | $ | 8,666,108 | $ | — | $ | 8,666,108 | |||||||
Accrued and other liabilities | 923,432 | — | 923,432 | ||||||||||
Intangible liabilities, net | 95,502 | — | 95,502 | ||||||||||
Liabilities related to assets held for sale | 2,334,643 | (2,039,758 | ) | (c) | 294,885 | ||||||||
Due to affiliates | 36,285 | — | 36,285 | ||||||||||
Dividends and distributions payable | 86,588 | — | 86,588 | ||||||||||
Total liabilities | 12,142,558 | (2,039,758 | ) | 10,102,800 | |||||||||
Commitments and contingencies | |||||||||||||
Redeemable noncontrolling interests | 5,987 | — | 5,987 | ||||||||||
Equity | |||||||||||||
Stockholders’ equity: | |||||||||||||
Preferred stock | 1,407,495 | — | 1,407,495 | ||||||||||
Common stock | |||||||||||||
Class A | 4,871 | — | 4,871 | ||||||||||
Class B | 7 | — | 7 | ||||||||||
Additional paid-in capital | 7,538,356 | 3,400 | (d) | 7,541,756 | |||||||||
Distributions in excess of earnings | (3,307,886 | ) | 450,258 | (e) | (2,857,628 | ) | |||||||
Accumulated other comprehensive income | 20,888 | 2,802 | (f) | 23,690 | |||||||||
Stockholders’ equity | 5,663,731 | 456,460 | 6,120,191 | ||||||||||
Noncontrolling interests in investment entities | 3,855,334 | (1,431,785 | ) | (c) | 2,423,549 | ||||||||
Noncontrolling interests in Operating Company | 456,384 | 49,267 | (g) | 505,651 | |||||||||
Total equity | 9,975,449 | (926,058 | ) | 9,049,391 | |||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 22,123,994 | $ | (2,965,816 | ) | $ | 19,158,178 | ||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
2
COLONY CAPITAL, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 2018
(In thousands, except per share data)
As Reported | Adjustments | Pro Forma | ||||||||||||
Revenues | ||||||||||||||
Property operating income | $ | 2,247,740 | $ | (287,181 | ) | (h) | $ | 1,960,559 | ||||||
Interest income | 215,367 | (779 | ) | (h) | 214,588 | |||||||||
Fee income | 151,821 | (7,378 | ) | (i) | 144,443 | |||||||||
Other income | 50,348 | (2,996 | ) | (h) | 47,352 | |||||||||
Total revenues | 2,665,276 | (298,334 | ) | 2,366,942 | ||||||||||
Expenses | ||||||||||||||
Property operating expense | 1,233,659 | (83,003 | ) | (h) | 1,150,656 | |||||||||
Interest expense | 595,551 | (42,713 | ) | (h) | 552,838 | |||||||||
Investment and servicing expense | 67,420 | (307 | ) | (h) | 67,113 | |||||||||
Transaction costs | 7,266 | — | 7,266 | |||||||||||
Placement fees | 7,849 | (234 | ) | (h) | 7,615 | |||||||||
Depreciation and amortization | 572,406 | (129,104 | ) | (h) | 443,302 | |||||||||
Provision for loan loss | 43,034 | — | 43,034 | |||||||||||
Impairment loss | 588,223 | (948 | ) | (h) | 587,275 | |||||||||
Compensation expense—cash and equity-based | 225,038 | (11,156 | ) | (h) | 213,882 | |||||||||
Compensation expense—carried interest and incentive fee | 12,181 | (4,696 | ) | (i) | 7,485 | |||||||||
Administrative expenses | 97,000 | (4,569 | ) | (h) | 92,431 | |||||||||
Total expenses | 3,449,627 | (276,730 | ) | 3,172,897 | ||||||||||
Other income (loss) | ||||||||||||||
Gain on sale of real estate | 167,231 | (7,633 | ) | (h) | 159,598 | |||||||||
Other gain, net | 51,706 | — | 51,706 | |||||||||||
Equity method losses | (9,401 | ) | (200 | ) | (i) | (9,601 | ) | |||||||
Equity method earnings—carried interest | 19,961 | (10,436 | ) | (i) | 9,525 | |||||||||
Loss before income taxes | (554,854 | ) | (39,873 | ) | (594,727 | ) | ||||||||
Income tax benefit | 59,781 | 189 | (h)(i) | 59,970 | ||||||||||
Loss from continuing operations | (495,073 | ) | (39,684 | ) | (534,757 | ) | ||||||||
Loss from discontinued operations | (102 | ) | — | (102 | ) | |||||||||
Net loss | (495,175 | ) | (39,684 | ) | (534,859 | ) | ||||||||
Net income (loss) attributable to noncontrolling interests: | ||||||||||||||
Redeemable noncontrolling interests | (3,708 | ) | — | (3,708 | ) | |||||||||
Investment entities | 67,994 | (21,305 | ) | (h) | 46,689 | |||||||||
Operating Company | (39,854 | ) | (1,117 | ) | (h)(i) | (40,971 | ) | |||||||
Net loss attributable to Colony Capital, Inc. | (519,607 | ) | (17,262 | ) | (536,869 | ) | ||||||||
Preferred stock redemption | (3,995 | ) | — | (3,995 | ) | |||||||||
Preferred stock dividends | 117,097 | — | 117,097 | |||||||||||
Net loss attributable to common stockholders | $ | (632,709 | ) | $ | (17,262 | ) | $ | (649,971 | ) | |||||
Basic loss per share | ||||||||||||||
Loss from continuing operations per basic common share | $ | (1.28 | ) | $ | (1.31 | ) | (j) | |||||||
Net loss per basic common share | $ | (1.28 | ) | $ | (1.31 | ) | (j) | |||||||
Diluted loss per share | ||||||||||||||
Loss from continuing operations per diluted common share | $ | (1.28 | ) | $ | (1.31 | ) | (j) | |||||||
Net loss per diluted common share | $ | (1.28 | ) | $ | (1.31 | ) | (j) | |||||||
Weighted average number of shares: | ||||||||||||||
Basic | 496,993 | 496,993 | ||||||||||||
Diluted | 496,993 | 496,993 | ||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
3
COLONY CAPITAL, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 2017
(In thousands, except per share data)
As Reported | Adjustments | Pro Forma | ||||||||||||
Revenues | ||||||||||||||
Property operating income | $ | 2,113,837 | $ | (240,782 | ) | (h) | $ | 1,873,055 | ||||||
Interest income | 416,625 | (391 | ) | (h) | 416,234 | |||||||||
Fee income | 220,789 | (4,022 | ) | (i) | 216,767 | |||||||||
Other income | 45,483 | (1,999 | ) | (h) | 43,484 | |||||||||
Total revenues | 2,796,734 | (247,194 | ) | 2,549,540 | ||||||||||
Expenses | ||||||||||||||
Property operating expense | 1,113,509 | (67,196 | ) | (h) | 1,046,313 | |||||||||
Interest expense | 574,822 | (38,566 | ) | (h) | 536,256 | |||||||||
Investment and servicing expense | 67,597 | (142 | ) | (h) | 67,455 | |||||||||
Transaction costs | 95,859 | — | 95,859 | |||||||||||
Placement fees | 2,474 | (1,650 | ) | (h) | 824 | |||||||||
Depreciation and amortization | 617,779 | (109,265 | ) | (h) | 508,514 | |||||||||
Provision for loan loss | 19,741 | — | 19,741 | |||||||||||
Impairment loss | 420,360 | (44 | ) | (h) | 420,316 | |||||||||
Compensation expense—cash and equity-based | 346,885 | (8,119 | ) | (h) | 338,766 | |||||||||
Administrative expenses | 110,982 | (4,703 | ) | (h) | 106,279 | |||||||||
Total expenses | 3,370,008 | (229,685 | ) | 3,140,323 | ||||||||||
Other income (loss) | ||||||||||||||
Gain on sale of real estate | 137,370 | (24,612 | ) | (h) | 112,758 | |||||||||
Other loss, net | (25,814 | ) | — | (25,814 | ) | |||||||||
Equity method earnings | 285,151 | (1,868 | ) | (i) | 283,283 | |||||||||
Loss before income taxes | (176,567 | ) | (43,989 | ) | (220,556 | ) | ||||||||
Income tax benefit | 98,399 | 2,096 | (h)(i) | 100,495 | ||||||||||
Loss from continuing operations | (78,168 | ) | (41,893 | ) | (120,061 | ) | ||||||||
Income from discontinued operations | 13,555 | — | 13,555 | |||||||||||
Net loss | (64,613 | ) | (41,893 | ) | (106,506 | ) | ||||||||
Net income (loss) attributable to noncontrolling interests: | ||||||||||||||
Redeemable noncontrolling interests | 23,543 | — | 23,543 | |||||||||||
Investment entities | 129,996 | (23,980 | ) | (h) | 106,016 | |||||||||
Operating Company | (20,261 | ) | (1,218 | ) | (h)(i) | (21,479 | ) | |||||||
Net loss attributable to Colony Capital, Inc. | (197,891 | ) | (16,695 | ) | (214,586 | ) | ||||||||
Preferred stock redemption | 4,530 | — | 4,530 | |||||||||||
Preferred stock dividends | 130,672 | — | 130,672 | |||||||||||
Net loss attributable to common stockholders | $ | (333,093 | ) | $ | (16,695 | ) | $ | (349,788 | ) | |||||
Basic loss per share | ||||||||||||||
Loss from continuing operations per basic common share | $ | (0.66 | ) | $ | (0.70 | ) | (j) | |||||||
Net loss per basic common share | $ | (0.64 | ) | $ | (0.68 | ) | (j) | |||||||
Diluted loss per share | ||||||||||||||
Loss from continuing operations per diluted common share | $ | (0.66 | ) | $ | (0.70 | ) | (j) | |||||||
Net loss per diluted common share | $ | (0.64 | ) | $ | (0.68 | ) | (j) | |||||||
Weighted average number of shares: | ||||||||||||||
Basic | 532,600 | 532,600 | ||||||||||||
Diluted | 532,600 | 532,600 | ||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
4
COLONY CAPITAL, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 2016
(In thousands, except per share data)
As Reported | Adjustments | Pro Forma | ||||||||||||
Revenues | ||||||||||||||
Property operating income | $ | 371,082 | $ | (194,670 | ) | (h) | $ | 176,412 | ||||||
Interest income | 385,851 | (2 | ) | (h) | 385,849 | |||||||||
Fee income | 67,731 | — | 67,731 | |||||||||||
Other income | 14,193 | (1,685 | ) | (h) | 12,508 | |||||||||
Total revenues | 838,857 | (196,357 | ) | 642,500 | ||||||||||
Expenses | ||||||||||||||
Property operating expense | 118,461 | (55,924 | ) | (h) | 62,537 | |||||||||
Interest expense | 170,083 | (44,834 | ) | (h) | 125,249 | |||||||||
Investment and servicing expense | 23,666 | (167 | ) | (h) | 23,499 | |||||||||
Transaction costs | 40,605 | (921 | ) | (h) | 39,684 | |||||||||
Placement fees | 900 | — | 900 | |||||||||||
Depreciation and amortization | 171,682 | (88,854 | ) | (h) | 82,828 | |||||||||
Provision for loan loss | 35,005 | — | 35,005 | |||||||||||
Impairment loss | 11,717 | (407 | ) | (h) | 11,310 | |||||||||
Compensation expense—cash and equity-based | 111,838 | (7,856 | ) | (h) | 103,982 | |||||||||
Administrative expenses | 50,799 | (2,699 | ) | (h) | 48,100 | |||||||||
Total expenses | 734,756 | (201,662 | ) | 533,094 | ||||||||||
Other income | ||||||||||||||
Gain on sale of real estate | 73,616 | (2,888 | ) | (h) | 70,728 | |||||||||
Other gain, net | 18,416 | — | 18,416 | |||||||||||
Equity method earnings | 99,375 | (27 | ) | (i) | 99,348 | |||||||||
Income before income taxes | 295,508 | 2,390 | 297,898 | |||||||||||
Income tax expense | (4,782 | ) | 586 | (h) | (4,196 | ) | ||||||||
Net income | 290,726 | 2,976 | 293,702 | |||||||||||
Net income attributable to noncontrolling interests: | ||||||||||||||
Investment entities | 163,084 | 1,924 | (h) | 165,008 | ||||||||||
Operating Company | 12,324 | 168 | (h) | 12,492 | ||||||||||
Net income attributable to Colony Capital, Inc. | 115,318 | 884 | 116,202 | |||||||||||
Preferred stock dividends | 48,159 | — | 48,159 | |||||||||||
Net income attributable to common stockholders | $ | 67,159 | $ | 884 | $ | 68,043 | ||||||||
Basic earnings per share | ||||||||||||||
Income from continuing operations per basic common share | $ | 0.39 | $ | 0.40 | (j) | |||||||||
Net income per basic common share | $ | 0.39 | $ | 0.40 | (j) | |||||||||
Diluted earnings per share | ||||||||||||||
Income from continuing operations per diluted common share | $ | 0.39 | $ | 0.40 | (j) | |||||||||
Net income per diluted common share | $ | 0.39 | $ | 0.40 | (j) | |||||||||
Weighted average number of shares: | ||||||||||||||
Basic | 164,570 | 164,570 | ||||||||||||
Diluted | 164,570 | 164,570 | ||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
5
Pro Forma Adjustments
Unaudited Pro Forma Condensed Consolidated Balance Sheet
(a) | Reflects net increase in cash of $1.16 billion as a result of the following, assuming all cash receipts and payments occurred on September 30, 2019, the date the Disposition is assumed to have closed: |
• | Receipt of $5.17 billion of aggregate net proceeds from the Disposition, adjusted for debt assumed by the buyer, and transaction and other costs |
• | Repayment of $1.62 billion of outstanding principal and interest on debt financing the light industrial portfolio as of September 30, 2019, net of debt assumed by the buyer |
• | Payment of $8.4 million in settlement of interest rate swaps based upon fair value as of September 30, 2019 in connection with debt repayment |
• | Distribution of $2.28 billion of aggregate net proceeds to noncontrolling interests in investment entities, adjusted for carried interest allocated to the Company from its sponsored industrial funds |
• | Removal of $39.8 million of cash balance as of September 30, 2019 related to the light industrial portfolio and management platform |
• | Payment of $40.6 million to certain employees, representing 50% of carried interest allocated to the Company |
• | Payment of $16.9 million of severance and other compensation triggered by the Disposition |
• | Payment of $2.0 million income tax expense on the gain from disposition of the management platform |
(b) | Reflects net proceeds held in escrow to be distributed upon finalization of all closing contingencies and adjustment. |
(c) | Reflects removal of assets, liabilities and share of net assets allocated to noncontrolling interests in investment entities related to the light Industrial portfolio and management platform as of September 30, 2019. |
(d) | Reclassification from additional paid-in capital to distributions in excess of earnings in connection with acceleration of equity awards upon closing of the Disposition. |
(e) | Reflects net decrease to distributions in excess of earnings of $450.3 million as a result of the following: |
• | The Company’s estimated share of gain on Disposition of $535.9 million, calculated based upon net assets as of September 30, 2019, after adjustment for $7.1 million of deferred financing costs written off in connection with debt repayment and realization of loss on interest rate swaps (see (f) below). The preliminary gain calculation is subject to revision upon finalization of all closing contingencies and adjustments. |
• | $17.7 million representing 50% of the Company’s carried interest allocated to certain employees, net of carried interest compensation accrued as of September 30, 2019 |
• | Reclassification from additional paid-in capital to distributions in excess of earnings in connection with acceleration of equity awards (see (d) above) |
• | $13.2 million representing severance and other compensation triggered by the Disposition, net of amounts accrued as of September 30, 2019 |
• | $2.0 million income tax expense on the gain from disposition of the management platform |
• | Allocation to noncontrolling interests in the Company’s operating subsidiary, Colony Capital Operating Company, LLC (the "Operating Company"), of the net impact of the above pro forma adjustments affecting earnings (see (g) below) |
(f) | Reclassification of unrealized loss as of September 30, 2019 on interest rate swaps, designated as cash flow hedges, from accumulated other comprehensive income to distribution in excess of earnings. |
(g) | Allocation to noncontrolling interests in the Operating Company of the net impact of pro forma adjustments affecting distributions in excess of earnings. |
Unaudited Pro Forma Condensed Consolidated Statements of Operations
(h) | Reflects adjustments to exclude revenue and expenses in connection with holding and operating the light industrial portfolio. |
(i) | Reflects adjustments to exclude amounts related to management of third party capital invested in the light industrial portfolio, including fee income from management of the industrial open-end fund, and carried interest from the industrial open-end fund with 50% allocated to certain employees as compensation expense, and related income tax provision. |
(j) | Reflects pro forma basic and diluted earnings (loss) per share from continuing operations after giving effect to pro forma adjustments to the consolidated statements of operations. |
6