NorthStar Healthcare Income Inc.
09/20/2024 | Press release | Distributed by Public on 09/20/2024 14:23
NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES INDEX TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS Form 8 K
NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES
INDEX TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
| Index | Page |
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NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES
SUMMARY OF UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
As previously disclosed, NorthStar Healthcare Income, Inc. ("NorthStar Healthcare" or the "Company"), acting through subsidiaries of its operating partnership, entered into a membership interest purchase agreement (the "Option Agreement") on November 3, 2023 with American Healthcare REIT, Inc. and its subsidiary ("AHR"), granting to AHR the right to purchase all of NorthStar Healthcare's ownership interests in Trilogy REIT Holdings, LLC (the "Trilogy Investment") for a purchase price ranging from $240.5 million to up to $260 million depending upon the purchase price consideration and timing of the closing, subject to and on the conditions set forth in the Option Agreement.
On September 20, 2024, AHR completed its purchase of the Trilogy Investment in accordance with the Option Agreement, which resulted in net cash proceeds to NorthStar Healthcare of approximately $252 million, after transaction and other closing costs (the "Transaction").
The unaudited pro forma consolidated financial statements are presented for illustrative purposes only and are not intended to represent or be indicative of NorthStar Healthcare's financial position or results of operations had the Transaction been completed as of the beginning of the earliest period presented, nor are they indicative of NorthStar Healthcare's future financial condition or results of operations.
The unaudited pro forma consolidated balance sheet as of June 30, 2024 is presented as if the Transaction closed on June 30, 2024. The unaudited pro forma consolidated statements of operations for the six months ended June 30, 2024 and for the year ended December 31, 2023 have been presented as if the Transaction occurred on January 1, 2023.
The pro forma adjustments are based upon available information and assumptions that NorthStar Healthcare's management believes are reasonable and factually supportable, and are directly attributable to the Transaction. Actual amounts could differ materially from these estimates. The unaudited pro forma consolidated financial statements should be read in conjunction with the historical consolidated financial statements and notes thereto in NorthStar Healthcare's Annual Report on Form 10-K for the year ended December 31, 2023 and in NorthStar Healthcare's Quarterly Report on Form 10-Q for the six months ended June 30, 2024.
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NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2024
(Dollars in Thousands, Except Share Data)
|
Historical(1)
|
Adjustments | Pro Forma | |||||
| Assets | |||||||
| Cash and cash equivalents | $ | 82,214 | $ | 252,436 |
(2)
|
$ | 334,650 |
| Restricted cash | 6,225 | - | 6,225 | ||||
| Operating real estate, net | 807,515 | - | 807,515 | ||||
| Investments in unconsolidated ventures ($142 held at fair value as of June 30, 2024) | 124,778 | (124,244) |
(3)
|
534 | |||
| Receivables, net | 1,284 | - | 1,284 | ||||
| Intangible assets, net | 1,748 | - | 1,748 | ||||
| Other assets | 4,025 | - | 4,025 | ||||
| Total assets | $ | 1,027,789 | $ | 128,192 | $ | 1,155,981 | |
| Liabilities | |||||||
| Mortgage and other notes payable, net | $ | 880,423 | $ | - | $ | 880,423 | |
| Escrow deposits payable | 566 | - | 566 | ||||
| Accounts payable and accrued expenses | 30,299 | - | 30,299 | ||||
| Other liabilities | 3,038 | (1,500) |
(4)
|
1,538 | |||
| Total liabilities | 914,326 | (1,500) | 912,826 | ||||
| Commitments and contingencies | |||||||
| Equity | |||||||
| NorthStar Healthcare Income, Inc. Stockholders' Equity | |||||||
|
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding as of June 30, 2024
|
- | - | - | ||||
|
Common stock, $0.01 par value, 400,000,000 shares authorized, 185,712,103 shares issued and outstanding as of June 30, 2024
|
1,857 | - | 1,857 | ||||
| Additional paid-in capital | 1,716,869 | - | 1,716,869 | ||||
| Retained earnings (accumulated deficit) | (1,603,802) | 129,692 |
(5)
|
(1,474,110) | |||
| Total NorthStar Healthcare Income, Inc. stockholders' equity | 114,924 | 129,692 | 244,616 | ||||
| Non-controlling interests | (1,461) | - | (1,461) | ||||
| Total equity | 113,463 | 129,692 | 243,155 | ||||
| Total liabilities and equity | $ | 1,027,789 | $ | 128,192 | $ | 1,155,981 |
Refer to accompanying notes to unaudited pro forma consolidated financial statements.
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NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2024
(Dollars in Thousands, Except Per Share Data)
|
Historical(1)
|
Adjustments | Pro Forma | ||||
| Property and other revenues | ||||||
| Resident fee income | $ | 24,768 | $ | - | $ | 24,768 |
| Rental income | 72,433 | - | 72,433 | |||
| Other revenue | 1,809 | - | 1,809 | |||
| Total property and other revenues | 99,010 | - | 99,010 | |||
| Expenses | ||||||
| Property operating expenses | 65,793 | - | 65,793 | |||
| Interest expense | 25,487 | - | 25,487 | |||
| Transaction costs | 37 | - | 37 | |||
| General and administrative expenses | 6,476 | - | 6,476 | |||
| Depreciation and amortization | 17,930 | - | 17,930 | |||
| Impairment loss | 3,460 | - | 3,460 | |||
| Total expenses | 119,183 | - | 119,183 | |||
| Other income (loss) | ||||||
| Other income (expense), net | 84 | - | 84 | |||
| Gain (loss) on investments and other | 10 | - | 10 | |||
| Income (loss) before equity in earnings (losses) of unconsolidated ventures and income tax expense | (20,079) | - | (20,079) | |||
| Equity in earnings (losses) of unconsolidated ventures | 1,829 | (1,905) |
(2)
|
(76) | ||
| Income tax expense | (39) | - | (39) | |||
| Net income (loss) | (18,289) | (1,905) | (20,194) | |||
| Net (income) loss attributable to non-controlling interests | 212 | - | 212 | |||
| Net income (loss) attributable to NorthStar Healthcare Income, Inc. common stockholders | $ | (18,077) | $ | (1,905) | $ | (19,982) |
| Net income (loss) per share of common stock, basic/diluted | $ | (0.10) | $ | (0.11) | ||
|
Weighted average number of shares of common stock outstanding, basic/diluted
|
185,712,103 | 185,712,103 | ||||
| Distributions declared per share of common stock | $ | - | $ | - |
Refer to accompanying notes to unaudited pro forma consolidated financial statements.
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NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2023
(Dollars in Thousands, Except Per Share Data)
|
Historical (1)
|
Adjustments | Pro Forma | ||||
| Property and other revenues | ||||||
| Resident fee income | $ | 47,591 | $ | - | $ | 47,591 |
| Rental income | 153,544 | - | 153,544 | |||
| Other revenue | 3,843 | - | 3,843 | |||
| Total property and other revenues | 204,978 | - | 204,978 | |||
| Expenses | ||||||
| Property operating expenses | 140,612 | - | 140,612 | |||
| Interest expense | 50,028 | - | 50,028 | |||
| Transaction costs | 683 | - | 683 | |||
| General and administrative expenses | 13,817 | - | 13,817 | |||
| Depreciation and amortization | 38,511 | - | 38,511 | |||
| Impairment loss | 49,423 | - | 49,423 | |||
| Total expenses | 293,074 | - | 293,074 | |||
| Other income (loss) | ||||||
| Other income (expense), net | 194 | - | 194 | |||
| Gain (loss) on investments and other | (64,001) | 129,692 |
(2)
|
65,691 | ||
| Income (loss) before equity in earnings (losses) of unconsolidated ventures and income tax expense | (151,903) | 129,692 | (22,211) | |||
| Equity in earnings (losses) of unconsolidated ventures | (8,272) | 1,409 |
(3)
|
(6,863) | ||
| Income tax expense | (74) | - | (74) | |||
| Net income (loss) | (160,249) | 131,101 | (29,148) | |||
| Net (income) loss attributable to non-controlling interests | 3,364 | - | 3,364 | |||
| Net income (loss) attributable to NorthStar Healthcare Income, Inc. common stockholders | $ | (156,885) | $ | 131,101 | $ | (25,784) |
| Net income (loss) per share of common stock, basic/diluted | $ | (0.83) | $ | (0.14) | ||
|
Weighted average number of shares of common stock outstanding, basic/diluted
|
189,941,744 | 189,941,744 | ||||
| Distributions declared per share of common stock | $ | - | $ | - |
Refer to accompanying notes to unaudited pro forma consolidated financial statements.
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NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Unaudited Pro Forma Consolidated Balance Sheet as of June 30, 2024
(1)Represents NorthStar Healthcare's consolidated balance sheet as of June 30, 2024 as reported in NorthStar Healthcare's Quarterly Report on Form 10-Q for the six months ended June 30, 2024.
(2)Represents the net proceeds generated by the Transaction at closing, after the payment of transaction-related costs and the reduction to the purchase price consideration for the consent fees received, as described in below in (4). The following table summarizes the net proceeds generated by the Transaction at closing:
| Purchase price | $ | 260,000 |
|
Less: 5% discount(1)
|
(13,000) | |
|
Plus: supplemental cash payment(2)
|
11,001 | |
|
Less: consent fees(3)
|
(1,500) | |
| Less: transaction-related costs | (4,065) | |
| Transaction net proceeds at closing | $ | 252,436 |
_______________________________________
(1)Pursuant to the Option Agreement, any potion of the purchase price consideration paid in cash is subject to a 5% discount if closing occurs prior to December 31, 2024.
(2)Pursuant to the Option Agreement, the Company is entitled to a supplemental cash payment of $25,600 per day for the period between July 1, 2023 through the closing date, reduced by any distributions the Company received from the Trilogy Investment during that period.
(3)Refer below to note (4).
(3)Represents the adjustment to remove the carrying value of the Company's Trilogy Investment as of June 30, 2024.
(4)Represents an aggregate of $1.5 million in consent fees the Company received from AHR during the six months ended June 30, 2024, which ultimately reduced the purchase price payable under the Option Agreement. Although non-refundable, these consent fees were classified as pending deal deposits within other liabilities as of June 30, 2024.
(5)Represents the gain recognized on the Transaction, calculated as if the Transaction was consummated on June 30, 2024. The following table summarizes the calculation of the gain:
| Transaction net proceeds at closing | $ | 252,436 |
| Plus: consent fees received from AHR prior to closing | 1,500 | |
| Less: carrying value of the Trilogy Investment as of June 30, 2024 | (124,244) | |
| Gain recognized on sale | $ | 129,692 |
Unaudited Pro Forma Consolidated Statement of Operations for the Six Months Ended June 30, 2024
(1)Represents NorthStar Healthcare's consolidated statement of operations for the six months ended June 30, 2024, as reported in NorthStar Healthcare's Quarterly Report on Form 10-Q for the six months ended June 30, 2024.
(2)Represents the adjustment to exclude the equity in earnings (losses) attributable to the Company's Trilogy Investment for the six months ended June 30, 2024.
Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2023
(1)Represents NorthStar Healthcare's consolidated statement of operations for the year ended December 31, 2023, as reported in NorthStar Healthcare's Annual Report on Form 10-K for the year ended December 31, 2023.
(2)Represents the adjustment to exclude the equity in earnings (losses) attributable to the Company's Trilogy Investment for the year ended December 31, 2023.
(3)Refer above to note (5) of the Unaudited Pro Forma Consolidated Balance Sheet as of June 30, 2024.
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