UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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)
SEPTEMBER 14, 2004
COMMISSION FILE NUMBER
0-28378
AmREIT
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 76-0410050
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(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
8 GREENWAY PLAZA, SUITE 1000,
HOUSTON, TEXAS 77046 713-850-1400
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (REGISTRANT'S TELEPHONE NUMBER)
[N/A]
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
TABLE OF CONTENTS
Item 2.01. Completion of Acquisition or Disposition of Assets
Item 9.01. Financial Statement and Exhibits
2
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
On July 1, 2004, we acquired two grocery-anchored retail shopping centers -
Cinco Ranch which is located in Katy, Texas and Plaza in the Park which is
located in Houston, Texas. Material factors considered in each of the
acquisitions made by us include historical and prospective financial performance
of the center, credit quality of the tenancy, local and regional demographics,
location and competition, ad valorem tax rates, condition of the property and
the related anticipated level of capital expenditures required. The total
investment in these acquisitions was $48.5 million. Audited financial statements
for the properties (the "Acquired Properties"), are submitted in ITEM 9.01
below. Unaudited pro forma condensed consolidated financial information of
AmREIT and Subsidiaries and the Acquired Properties is also submitted in ITEM
9.01 below.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
The following financial statements, pro forma financial statements and
exhibits are filed as part of this report:
(a) Financial statements of businesses acquired:
1. Cinco Ranch
(i) Report of Independent Registered Public Accounting Firm
(ii) Historical Summary of Gross Income and Direct Operating
Expenses for the period from June 4, 2003 to May 31, 2004
(iii) Notes to Historical Summary of Gross Income and Direct
Operating Expenses
2. Plaza in the Park
(i) Report of Independent Registered Public Accounting Firm
(ii) Historical Summary of Gross Income and Direct Operating
Expenses for the period from June 4, 2003 to May 31, 2004
(iii) Notes to Historical Summary of Gross Income and Direct
Operating Expenses
3
(b) Pro Forma Condensed Consolidated Financial Statements (unaudited) of
AmREIT and Subsidiaries and the Acquired Properties
1. Pro Forma Condensed Consolidated Balance Sheet as of June 30,
2004
2. Pro Forma Condensed Consolidated Statement of Operations for the
Six Months Ended June 30, 2004
3. Pro Forma Condensed Consolidated Statement of Operations for the
Year Ended December 31, 2003
(c) Exhibits:
None
4
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Trust Managers
AmREIT:
We have audited the accompanying Historical Summary of Gross Income and Direct
Operating Expenses (Historical Summary) of Cinco Ranch Shopping Center (the
Property) for the period June 4, 2003 through May 31, 2004. This Historical
Summary is the responsibility of the management of AmREIT. Our responsibility is
to express an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
Historical Summary is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the Historical Summary. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of the Historical Summary. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and for
inclusion in the Current Report on Form 8-K. The presentation is not intended to
be a complete presentation of the Property's revenues and expenses.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the gross income and direct operating expenses, as described
in note 2, of Cinco Ranch Shopping Center for the period June 4, 2003 through
May 31, 2004, in conformity with U.S. general accepted accounting principles.
KPMG LLP
Houston, TX
September 14, 2004
5
Cinco Ranch Shopping Center
Historical Summary of Gross Income
and Direct Operating Expenses
For the Period from June 4, 2003 through May 31, 2004
Gross Income $1,374,246
----------
Direct Operating Expenses:
Operating expenses 132,270
Real estate taxes 101,231
Insurance 10,697
Interest 485,676
----------
Total direct operating expenses 729,874
----------
Excess of gross income over direct operating expenses $ 644,372
==========
See accompanying notes to historical summary of gross income and direct
operating expenses.
6
Cinco Ranch Shopping Center
Notes to Historical Summary of Gross Income
and Direct Operating Expenses
for the Period from June 4, 2003 through May 31, 2004
(1) BUSINESS
The Cinco Ranch Shopping Center (the Property) is located in Katy, Texas.
The property consists of approximately 97,297 square feet of gross
leasable area and was 100% occupied at May 31, 2004. On July 1, 2004,
AmREIT acquired the property for $15.5 million.
(2) BASIS OF PRESENTATION AND COMBINATION
The Historical Summary of Gross Income and Direct Operating Expenses
(Historical Summary) has been prepared for the purpose of complying with
Rule 3-14 of the Securities and Exchange Commission Regulation S-X and
for inclusion in AmREIT's filing on Form 8-K, and is not intended to be a
complete presentation of the Property's revenues and expenses. The seller
purchased the Property on June 4, 2003. The Historical Summary has been
prepared on the accrual basis of accounting. Management of the Property
is required to make estimates and assumptions that affect the reported
amounts of the revenues and expenses during the reporting period. Actual
results may differ from those estimates.
(3) GROSS INCOME
The Property leases retail space under various lease agreements with its
tenants. All leases are accounted for as operating leases. The leases
include provisions under which the Property is reimbursed for common area
maintenance, real estate taxes, and insurance costs. Revenue related to
these reimbursed costs is recognized in the period the applicable costs
are incurred and billed to tenants pursuant to the lease agreements.
Certain leases contain renewal options at various periods at various
rental rates. Certain of the leases contain provisions for contingent
rentals. No contingent rent was earned during the period from June 4,
2003 through May 31, 2004.
Although certain leases may provide for tenant occupancy during periods
for which no rent is due and/or increases exist in minimum lease payments
over the term of the lease, rental income is recognized for the full
period of occupancy on a straight-line basis.
The weighted average remaining lease term for the project is 14 years.
Minimum rents to be received from tenants under operating leases,
exclusive of common area maintenance reimbursements, which were $187
thousand for the period from June 4, 2003 through May 31, 2004, are as
follows:
2005 $ 1,218,461
2006 1,207,697
2007 1,081,057
2008 1,064,256
2009 1,013,050
Thereafter 8,546,056
-----------
Total $14,130,577
===========
7
Adjustments to record rental income on a straight line basis increased
gross income by $24 thousand during the period from June 4, 2003 through
May 31, 2004. Additionally, adjustments to rental income increased gross
income by $6 thousand for such period due to adjustments to reflect
rental income at market rates related to leases acquired through
acquisition.
As of May 31, 2004, 63,373 square feet was leased to one tenant, Kroger,
under a noncancelable lease that expires June 3, 2023. This tenant
accounted for approximately 42% of rental revenue during the period from
June 4, 2003 through May 31, 2004.
(4) DIRECT OPERATING EXPENSES
Direct operating expenses include only those costs expected to be
comparable to the proposed future operations of the Property. Repairs and
maintenance expenses are charged to operations as incurred. Costs such as
depreciation and amortization are excluded from the Historical Summary.
(5) RELATED-PARTY TRANSACTIONS
During the period from June 4, 2003 through May 31, 2004, management fees
and leasing commissions of $37,340 and $16,380, respectively, were paid
or incurred. Such amounts were paid or owed to various entities related
to the owner of the Property either by common ownership or control.
Payments and amounts due to related parties represent amounts due under
contracts for different services provided by the related party.
(6) PROJECT FINANCING
In June 2003, a $8,720,000 non-recourse note payable was entered into
with a lender, secured by the Property. The note requires monthly
installment payments of principal and interest through its maturity on
July 10, 2013, at the fixed interest rate of 5.6%, based on a 30-year
amortization. The Property is pledged as security under the terms of the
note payable. The loan may not be prepaid before July 10, 2008 and
requires prepayment fees of 5%, 4%, 3%, 2%, and 1% if it is prepaid
during the sixth, seventh, eighth, ninth, or tenth year, respectively. In
connection with the July 2004 acquisition of the Property by AmREIT, this
note was assumed.
8
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Trust Managers
AmREIT:
We have audited the accompanying Historical Summary of Gross Income and Direct
Operating Expenses (Historical Summary) of Plaza in the Park Shopping Center
(the Property) for the period June 4, 2003 through May 31, 2004. This Historical
Summary is the responsibility of the management of AmREIT. Our responsibility is
to express an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
Historical Summary is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the Historical Summary. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of the Historical Summary. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and for
inclusion in the Current Report on Form 8-K. The presentation is not intended to
be a complete presentation of the Property's revenues and expenses.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the gross income and direct operating expenses, as described
in note 2, of Plaza in the Park Shopping Center for the period June 4, 2003
through May 31, 2004, in conformity with U.S. general accepted accounting
principles.
KPMG LLP
Houston, TX
September 14, 2004
9
Plaza in the Park Shopping Center
Historical Summary of Gross Income
and Direct Operating Expenses
For the Period from June 4, 2003 through May 31, 2004
Gross Income $2,775,684
----------
Direct Operating Expenses:
Operating expenses 350,316
Real estate taxes 252,118
Insurance 34,142
Interest 1,026,493
----------
Total direct operating expenses 1,663,069
----------
Excess of gross income over direct operating expenses $1,112,615
==========
See accompanying notes to historical summary of gross income and direct
operating expenses.
10
Plaza in the Park Shopping Center
Notes to Historical Summary of Gross Income
and Direct Operating Expenses
for the Period from June 4, 2003 through May 31, 2004
(1) BUSINESS
Plaza in the Park Shopping Center (the Property) is located in Houston,
Texas. The Property consists of approximately 129,955 square feet of
gross leasable area and was approximately 96.7% occupied at May 31, 2004.
On July 1, 2004, AmREIT acquired the Property for $33.0 million.
(2) BASIS OF PRESENTATION AND COMBINATION
The Historical Summary of Gross Income and Direct Operating Expenses
(Historical Summary) has been prepared for the purpose of complying with
Rule 3-14 of the Securities and Exchange Commission Regulation S-X and
for inclusion in AmREIT's filing on Form 8-K, and is not intended to be a
complete presentation of the Property's revenues and expenses. The seller
purchased the Property on June 4, 2003. The Historical Summary has been
prepared on the accrual basis of accounting. Management of the Property
is required to make estimates and assumptions that affect the reported
amounts of the revenues and expenses during the reporting period. Actual
results may differ from those estimates.
(3) GROSS INCOME
The Property leases retail space under various lease agreements with its
tenants. All leases are accounted for as operating leases. The leases
include provisions under which the Property is reimbursed for common area
maintenance, real estate taxes, and insurance costs. Revenue related to
these reimbursed costs is recognized in the period the applicable costs
are incurred and billed to tenants pursuant to the lease agreements.
Certain leases contain renewal options at various periods at various
rental rates. Certain of the leases contain provisions for contingent
rentals. No contingent rent was earned during the period from June 4,
2003 through May 31, 2004.
Although certain leases may provide for tenant occupancy during periods
for which no rent is due and/or increases exist in minimum lease payments
over the term of the lease, rental income is recognized for the full
period of occupancy on a straight-line basis.
The weighted average remaining lease term for the project is 9.2 years.
Minimum rents to be received from tenants under operating leases,
exclusive of common area maintenance reimbursements, which were $480
thousand for the period from June 4, 2003 through May 31, 2004, are as
follows:
2005 $2,443,901
2006 2,455,763
2007 2,291,814
2008 2,057,938
2009 1,918,793
Thereafter 13,409,044
-----------
Total $24,577,253
===========
Adjustments to record rental income on a straight line basis increased
gross income by $44 thousand during the period from June 4, 2003 through
May 31, 2004. Additionally, adjustments to rental income decreased
11
gross income by $66 thousand for such period due to adjustments to
reflect rental income at market rates related to leases acquired through
acquisition at other than market rates.
As of May 31, 2004, 68,658 square feet was leased to one tenant, Kroger,
under a noncancelable lease that expires August 31, 2021. This tenant
accounted for approximately 41% of rental revenue during the period from
June 4, 2003 through May 31, 2004.
(4) DIRECT OPERATING EXPENSES
Direct operating expenses include only those costs expected to be
comparable to the proposed future operations of the Property. Repairs and
maintenance expenses are charged to operations as incurred. Costs such as
depreciation and amortization are excluded from the Historical Summary.
(5) RELATED-PARTY TRANSACTIONS
During the period from June 4, 2003 through May 31, 2004, management fees
and leasing commissions of $75,462 and $14,712, respectively, were paid
or incurred. Such amounts were paid or owed to various entities related
to the owner of the Property either by common ownership or control.
Payments and amounts due to related parties represent amounts due under
contracts for different services provided by the related party.
(6) PROJECT FINANCING
In June 2003, a $18,430,000 non-recourse note payable was entered into
with a lender, secured by the Property. The note requires monthly
installment payments of principal and interest through its maturity on
July 10, 2013, at the fixed interest rate of 5.6%, based on a 30-year
amortization. The Property is pledged as security under the terms of the
note payable. The loan may not be prepaid before July 10, 2008 and
requires prepayment fees of 5%, 4%, 3%, 2%, and 1% if it is prepaid
during the sixth, seventh, eighth, ninth, or tenth year, respectively. In
connection with the July 2004 acquisition of the Property by AmREIT, this
note was assumed.
12
AMREIT AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
(UNAUDITED)
The following pro forma financial statements have been prepared to provide pro
forma information with regards to the properties described below (the
"Properties") which AmREIT (the "Company") acquired from an unrelated third
party.
On July 1, 2004, the Company acquired Plaza in the Park Shopping Center, a
129,955 square-foot Kroger anchored shopping center located on approximately
14.3 acres. The property is located in Houston, Texas and is 96.7% occupied.
Also on July 1, 2004, the Company acquired Cinco Ranch Shopping Center, a 97,297
square-foot Kroger anchored shopping center located on approximately 12.8 acres
of land. The property is located in Katy, Texas and is 100% occupied.
The unaudited Pro Forma Condensed Consolidated Balance Sheet presents the
historical financial information of the Company as of June 30, 2004 as adjusted
for the acquisition of the Properties which are assumed to have occurred on
June 30, 2004.
The unaudited Pro Forma Condensed Consolidated Statements of Operations for the
year ended December 31, 2003 and the six months ended June 30, 2004 combine the
historical operations of the Company with the gross income and direct operating
expenses of the Properties and are presented as if the acquisitions of the
Properties occurred on January 1, 2003.
The unaudited pro forma condensed consolidated financial statements have been
prepared by the Company's management based upon the historical financial
statements of the Company and of the Properties. These pro forma statements may
not be indicative of the results that actually would have occurred if the
combination had been in effect on the dates indicated or which may be obtained
in the future. In management's opinion, all adjustments necessary to reflect the
effects of the property acquisitions have been made. These unaudited pro forma
condensed consolidated financial statements should be read in conjunction with
the historical financial statements included in the Company's previous filings
with the Securities and Exchange Commission.
13
AMREIT AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2004
(unaudited)
(in thousands)
Acquisitions (2)
------------------------
AmREIT Cinco Plaza in the
Historical (1) Ranch Park Pro Forma
-------------- --------- ------------ ---------
ASSETS
Property:
Land $ 37,920 $ 2,660 $ 13,232 $ 53,812
Buildings 32,286 9,619 14,091 55,996
Tenant improvements 620 1,459 1,905 3,984
--------- --------- --------- ---------
70,826 13,738 29,228 113,792
Less accumulated depreciation and amortization (2,707) -- -- (2,707)
--------- --------- --------- ---------
Net real estate held for investment 68,119 13,738 29,228 111,085
Real estate held for sale, net 11,032 -- -- 11,032
Net investment in direct financing leases held for investment 19,222 -- -- 19,222
Intangible lease cost, net 672 1,892 3,742 6,306
Other assets 9,667 44 203 9,914
--------- --------- --------- ---------
TOTAL ASSETS $ 108,712 $ 15,674 $ 33,173 $ 157,559
========= ========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Notes payable $ 32,534 $ 15,504(3) $ 33,007(3) $ 81,045
Other liabilities 3,465 170 166 3,801
--------- --------- --------- ---------
TOTAL LIABILITIES 35,999 15,674 33,173 84,846
--------- --------- --------- ---------
Minority interest 1,010 -- -- 1,010
Shareholders' equity 71,703 -- -- 71,703
--------- --------- --------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 108,712 $ 15,674 $ 33,173 $ 157,559
========= ========= ========= =========
The accompanying notes are an integral part of this pro forma condensed
consolidated financial statement.
14
AMREIT AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2004
(UNAUDITED)
(1) Reflects the historical condensed consolidated balance sheet of the Company
as of June 30, 2004. Please refer to the AmREIT's historical consolidated
financial statements and notes thereto included in the Company's Quarterly
Report on Form 10-QSB for the six months ended June 30, 2004.
(2) Reflects the acquisition of the Properties. The aggregate purchase price
was $48.5 million and was allocated among land, buildings, tenant
improvements, above- and below-market leases and intangible lease costs
pursuant to Statement of Financial Accounting Standards No. 141, Business
Combinations (SFAS No. 141). The buildings are depreciated over a period of
39 years.
(3) In conjunction with the acquisition of the Properties, the Company assumed
$26.8 million of secured debt with a fixed rate of 5.6%. Additionally,
$21.7 million of the acquisition consideration was funded through the
Company's credit facility (rate of 3.375% on the acquisition date). The
terms of the debt assumed approximated market on the date of the
acquisition; accordingly, no adjustments were made to the carrying value of
the debt in allocating the purchase price of the Properties.
15
AMREIT AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2004
(Unaudited)
(in thousands, except per share amounts)
Acquisitions (2)
------------------------
AmREIT Cinco Plaza in the Pro Forma
Historical(1) Ranch Park Adjustments Pro Forma
------------- -------- ------------ ----------- ---------
Revenues
Rental income and earned income $ 4,211 $ 687 $ 1,388 $ -- $ 6,286
Other income 4,975 -- -- -- 4,975
-------- -------- -------- -------- --------
Total Revenues 9,186 687 1,388 -- 11,261
-------- -------- -------- -------- --------
Expenses
General operating and administrative 3,008 122 318 -- 3,448
Depreciation and amortization 504 -- -- 740(3) 1,244
Other expenses 5,093 -- -- -- 5,093
-------- -------- -------- -------- --------
Total Expenses 8,605 122 318 740 9,785
-------- -------- -------- -------- --------
Operating income 581 565 1,070 (740) 1,476
Interest expense (1,163) (243) (513) (356)(4) (2,275)
Other income/expense (182) -- -- -- (122)
Income (loss) from continuing operations (763) 322 557 (1,096) (981)
Distributions paid to class B and class C shareholders (1,919) -- -- -- (1,919)
-------- -------- -------- -------- --------
Loss from continuing operations available to class A
shareholders ($ 2,682) $ 322 $ 557 ($ 1,096) ($ 2,900)
======== ======== ======== ======== ========
Loss from continuing operations - basic and diluted (0.87) (0.94)
-------- --------
Weighted average common shares used to compute
net income per share, basic and diluted 3,094 3,094
======== ========
The accompanying notes are an integral part of this pro forma condensed
consolidated financial statement.
16
AmREIT AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2004
(UNAUDITED)
(1) Reflects the historical condensed consolidated statement of operations
of the Company for the six months ended June 30, 2004. Please refer to
AmREIT's historical consolidated financial statements and notes thereto
included in the Company's Quarterly Report on Form 10-QSB for the six
months ended June 30, 2004.
(2) The historical statements of operations for the Properties represent a
historical summary of gross income and direct operating expenses for
the period from January 1, 2004 through June 30, 2004. Costs such as
depreciation and amortization were excluded from the historical
summary. See Note 3 below.
(3) Represents the depreciation of the building (over 39 years) and tenant
improvements (over the terms of the respective lease agreements) as
well as the amortization of the intangible assets based on the
preliminary purchase price allocation in accordance with SFAS No. 141.
(4) Represents the incremental interest expense related to the portion of
the acquisition consideration that was financed via the Company's
credit facility, assuming an interest rate of 3.375%.
17
AMREIT AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
(Unaudited)
(in thousands, except per share amounts)
Acquisitions(2)
--------------------
AmREIT Cinco Plaza in Pro Forma
Historical(1) Ranch the Park Adjustments Pro Forma
------------- ------- -------- ----------- ---------
Revenues
Rental income and earned income $ 7,584 $ 1,143 $ 2,798 $ - $ 11,525
Other income 5,025 - - - 5,025
------- ------- ------- -------- --------
Total Revenues 12,609 1,143 2,798 - 16,550
------- ------- ------- -------- --------
Expenses
General operating and administrative 3,937 245 642 4,824
Depreciation and amortization 836 - - 1,479 (3) 2,315
Other expenses 4,084 - - - 4,084
------- ------- ------- -------- --------
Total Expenses 8,857 245 642 1,479 11,223
------- ------- ------- -------- --------
Operating income 3,752 898 2,156 (1,479) 5,327
Interest expense (2,354) (491) (1,037) (712)(4)(5) (4,594)
Other expense (102) - - - (103)
------- ------- ------- -------- --------
Income (loss) before discontinued operations 1,295 407 1,119 (2,191) 630
Distributions paid to class B and class C
shareholders (1,943) - - 0 (1,943)
------- ------- ------- -------- --------
Income (loss) from continuing operations
available to class A shareholders $ (648) $ 407 $ 1,119 $ (2,191) $ (1,313)
======= ======= ======= ======== ========
Loss from continuing operations-
basic and diluted (0.23) (0.47)
------- --------
Weighted average common shares used to compute
net income per share, basic and diluted 2,792 2,792
======= ========
The accompanying notes are an integral part of this pro forma condensed
consolidated financial statement.
AmREIT AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2003
(UNAUDITED)
(1) Reflects the historical condensed consolidated statement of operations
of the Company for the year ended December 31, 2003. Please refer to
AmREIT's historical consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-KSB for the year
ended December 31, 2003.
(2) The historical statements of operations for the Properties represent a
historical summary of gross income and direct operating expenses for
the year ended December 31, 2003. Costs such as depreciation and
amortization were excluded from the historical summary. See Note 3
below.
(3) Represents the depreciation of the building (over 39 years) and tenant
improvements (over the terms of the respective lease agreements) as
well as the amortization of the intangible assets based on the
preliminary purchase price allocation in accordance with SFAS No. 141.
(4) Represents the incremental interest expense related to the portion of
the acquisition consideration that was financed via the Company's
credit facility, assuming an interest rate of 3.375%.
19
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
AmREIT
By: /s/ Chad C. Braun
---------------------------------------
Chad C. Braun, Chief Financial Officer
Dated: September 14, 2004
20