Form 8-K Amendment No. 1

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K/A

(Amendment No. 1)

 

 

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 29, 2011

 

 

CAMPUS CREST COMMUNITIES, INC.

(Exact name of registrant specified in its charter)

 

 

 

Maryland   1-34872   27-2481988

(State or Other Jurisdiction

Of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

2100 Rexford Road

Suite 414

Charlotte, North Carolina 28211

(Address of principal executive offices, zip code)

Registrant’s telephone number, including area code: (704) 496-2500

Not applicable

(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:

 

¨ 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))

 

 

 


This Current Report on Form 8-K/A amends and supplements the Current Report on Form 8-K filed by Campus Crest Communities, Inc. with the Securities and Exchange Commission on January 5, 2012 (the “Initial Report”), reporting the acquisition of the remaining 50.1% ownership interests in The Grove at Huntsville, Texas, and The Grove at Statesboro, Georgia, to include the historical financial statements and unaudited pro forma financial information required by Item 9.01(a) and (b) of Form 8-K. This Current Report on Form 8-K/A should be read in conjunction with the Initial Report.

 

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(a) Financial Statements Under Rule 3-14 of Regulation S-X

Report of Independent Registered Public Accounting Firm

Combined Statements of Revenue and Certain Expenses of The Grove at Huntsville and The Grove at Statesboro for the nine months ended September 30, 2011 (unaudited) and for the period from August 1, 2010 (inception of operations) through December 31, 2010

Notes to Combined Statements of Revenue and Certain Expenses

(b) Unaudited Pro Forma Condensed Consolidated Financial Statements

Pro forma Condensed Consolidated Balance Sheet as of September 30, 2011 (Unaudited)

Pro forma Condensed Consolidated Statement of Operations for the nine months ended September 30, 2011 (Unaudited)

Pro forma Condensed Consolidated Statement of Operations for the year ended December 31, 2010 (Unaudited)

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

(c) Exhibits

 

Exhibit
Number

  

Description

23.1    Consent of KPMG LLP


Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Campus Crest Communities, Inc.:

We have audited the accompanying combined statement of revenue and certain expenses of The Grove at Huntsville and The Grove at Statesboro for the period from August 1, 2010 (inception of operations) through December 31, 2010. This combined financial statement is the responsibility of the management of Campus Crest Communities, Inc. Our responsibility is to express an opinion on the combined financial statement 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 financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

The accompanying combined statement of revenue and certain expenses 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/A of Campus Crest Communities, Inc., as described in note 2 to the combined financial statement. It is not intended to be a complete presentation of the combined revenue and expenses of The Grove at Huntsville and The Grove at Statesboro.

In our opinion, the combined statement of revenue and certain expenses referred to above presents fairly, in all material respects, the combined revenue and expenses as described in note 2, of The Grove at Huntsville and The Grove at Statesboro for the period from August 1, 2010 (inception of operations) through December 31, 2010, in conformity with U.S. generally accepted accounting principles.

 

/s/ KPMG LLP
Atlanta, Georgia
March 9, 2012

 

1


THE GROVE AT HUNTSVILLE AND THE GROVE AT STATESBORO

COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES

(in thousands)

 

     Nine Months Ended
September 30, 2011
     Period from
August 1, 2010
(inception of
operations) through
December 31, 2010
 
     (unaudited)         

Revenue:

     

Student housing leasing

   $ 4,143       $ 2,326   

Student housing services

     87         35   
  

 

 

    

 

 

 

Total revenue

     4,230         2,361   
  

 

 

    

 

 

 

Certain expenses:

     

Student housing operations

     1,963         901   

Management fees

     196         112   
  

 

 

    

 

 

 

Total certain expenses

     2,159         1,013   
  

 

 

    

 

 

 

Revenue in excess of certain expenses

   $ 2,071       $ 1,348   
  

 

 

    

 

 

 

See accompanying notes to financial statement.

 

2


THE GROVE AT HUNTSVILLE AND THE GROVE AT STATESBORO

NOTES TO COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES

1. Organization and Description of Business

HSRE-Campus Crest I, LLC was formed on November 7, 2008 between HSRE-Campus Crest IA, LLC (“HSRE”) and Campus Crest Ventures III, LLC (“CCV III”), an affiliate of Campus Crest Communities, Inc. (the “Company”), for the principal purpose of owning, developing, constructing and operating student housing rental properties. At September 30, 2011 and December 31, 2010, HSRE holds a 50.1% member interest in HSRE-Campus Crest I, LLC and the Company holds a 49.9% member interest.

At September 30, 2011 and December 31, 2010, HSRE-Campus Crest I, LLC owned the following properties:

 

Property

   University    Year
Opened
 

The Grove at San Angelo

   Angelo State University      2009  (1) 

The Grove at Moscow

   University of Idaho      2009  (1) 

The Grove at Lawrence

   University of Kansas      2009  (1) 

The Grove at Huntsville

   Sam Houston State University      2010  (2) 

The Grove at Statesboro

   Georgia Southern University      2010  (2) 

The Grove at Conway

   University of Central Arkansas      2010  (2) 

 

(1) 

Property opened and began operations in Fall 2009.

(2) 

Property opened and began operations in Fall 2010. The combined statement of revenue and certain expenses of The Grove at Huntsville and The Grove at Statesboro for the period from August 1, 2010 (inception of operations) through December 31, 2010 includes approximately five months of revenue and related operating expenses.

On December 29, 2011, the Company acquired HSRE’s 50.1% ownership interest in The Grove at Huntsville and The Grove at Statesboro (the “Acquired Properties”). As a result, the Company owns a 100% interest in the Acquired Properties, whose results of operations subsequent to the acquisition will be consolidated with the results of operations of the Company.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying combined statement of revenue and certain expenses includes the rental and property operations of the Acquired Properties for the period from August 1, 2010 (inception of operations) through December 31, 2010.

The accompanying combined statement of revenue and certain expenses for the nine months ended September 30, 2011 (unaudited) and for the period from August 1, 2010 (inception of operations) through December 31, 2010 was prepared for the purpose of inclusion in this Current Report on Form 8-K/A and to comply with the rules and regulations of the United States Securities and Exchange Commission for the acquisition of real estate properties. The combined statement of revenue and certain expenses is not intended to be a complete presentation of the actual operations of the Acquired Properties for the nine months ended September 30, 2011 (unaudited) and for the period from August 1, 2010 (inception of operations) through December 31, 2010, as certain expenses which may not be comparable to the expenses to be incurred in the proposed future operations of these properties have been excluded. Expenses excluded consist of interest expense on certain loans that will be repaid by the Company, depreciation, amortization and other expenses not directly related to the proposed future operations of the Acquired Properties.

 

3


Use of Estimates

The preparation of the combined statement of revenue and certain expenses in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenue and certain expenses. Actual results may differ from those estimates.

Revenue Recognition

Students are required to execute lease contracts with payment schedules that vary from annual to monthly payments. Leasing revenue is recognized on a straight-line basis over the term of the leases. Generally, each executed contract is required to be accompanied by a signed parental guaranty. Service revenue is recognized when earned.

Student Housing Operating Expenses

Student housing operating expenses represent the direct expenses of operating the properties and consist primarily of payroll, utilities, repairs and maintenance, insurance, property taxes and other operating expenses that are expected to continue in the proposed future operations of the properties.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources, are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Grove at Huntsville and The Grove at Statesboro are not subject to any material litigation nor to management’s knowledge is any material litigation currently threatened against The Grove at Huntsville or The Grove at Statesboro other than routine litigation, claims and administrative proceedings arising in the ordinary course of business.

Unaudited Interim Financial Information

The combined statement of revenue and certain expenses for the nine months ended September 30, 2011 is unaudited. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial information for this interim period have been included. The revenue and certain expenses for any interim period are not necessarily indicative of results for other interim periods or the full year.

3. Related Party Transactions

The Grove at Huntsville and The Grove at Statesboro pay property management fees to an affiliate of the Company for customary property management services. Management fees during the nine months ended September 30, 2011 (unaudited) and the period from August 1, 2010 (inception of operations) through December 31, 2010 totaled approximately $196,000 and $112,000, respectively.

 

4


CAMPUS CREST COMMUNITIES, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On December 29, 2011, Campus Crest Communities, Inc. (the “Company”) acquired certain controlling interests of certain entities (The Grove at Huntsville and The Grove at Statesboro) owned by a real estate venture in which the Company was previously a member.

The accompanying unaudited pro forma condensed consolidated balance sheet presents the historical financial information of the Company as of September 30, 2011, as adjusted for the acquisition of The Grove at Huntsville and The Grove at Statesboro, as if the transaction had occurred on September 30, 2011.

The accompanying unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2011 and for the year ended December 31, 2010 are presented as if the transaction occurred on January 1, 2010.

This unaudited pro forma condensed consolidated information should be read in conjunction with the historical financial information and notes thereto contained in the Company’s Annual Report on Form 10-K, as amended, for the year ended December 31, 2010, initially filed on March 11, 2011, and the Company’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2011, filed on November 4, 2011.

 

5


CAMPUS CREST COMMUNITIES, INC.

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 2011

(UNAUDITED)

 

(in thousands, except share data)    Historical
Campus Crest
Communities, Inc
    Pro forma
Adjustments
    Combined
Pro forma
 
           (A)        

Assets

      

Investment in real estate, net:

      

Student housing properties

   $ 461,333      $ 49,087      $ 510,420   

Accumulated depreciation

     (71,417     —          (71,417

Development in process

     32,808        —          32,808   
  

 

 

   

 

 

   

 

 

 

Investment in real estate, net

     422,724        49,087        471,811   

Investment in unconsolidated entities

     16,751        (4,883     11,868   

Cash and cash equivalents

     9,457        1,554        11,011   

Restricted cash and investments

     2,352        —          2,352   

Student accounts receivable, net of allowance

     1,578        95        1,673   

Costs in excess of construction billings

     3,530        —          3,530   

Other assets

     10,452        1,013        11,465   
  

 

 

   

 

 

   

 

 

 

Total assets

     466,844        46,866        513,710   
  

 

 

   

 

 

   

 

 

 

Liabilities and equity

      

Liabilities:

      

Mortgage and construction loans

     149,178        28,764        177,942   

Line of credit and other debt

     43,552        13,604        57,156   

Accounts payable and accrued expenses

     31,575        475        32,050   

Other liabilities

     11,056        864        11,920   
  

 

 

   

 

 

   

 

 

 

Total liabilities

     235,361        43,707        279,068   
  

 

 

   

 

 

   

 

 

 

Equity (deficit):

      

Stockholders’ equity (deficit):

      

Common stock, $.01 par value, 90,000,000 shares authorized, 30,706,527 shares issued and outstanding at September 30, 2011

     307        —          307   

Additional paid-in capital

     248,640        —          248,640   

Accumulated deficit and distributions

     (20,929     3,159        (17,770

Accumulated other comprehensive loss

     (425     —          (425
  

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     227,593        3,159        230,752   

Noncontrolling interests

     3,890        —          3,890   
  

 

 

   

 

 

   

 

 

 

Total equity

     231,483        3,159        234,642   
  

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 466,844      $ 46,866      $ 513,710   
  

 

 

   

 

 

   

 

 

 

See accompanying notes to pro forma condensed consolidated financial statements

 

6


CAMPUS CREST COMMUNITIES, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2011

(UNAUDITED)

 

(In thousands, except per share data)    Historical
Campus Crest
Communities,
Inc.
    Acquisition of
HSRE
Properties
     Pro forma
Adjustments
    Combined
Pro forma
 
           (AA)      (BB)        

Revenues:

         

Student housing rental

   $ 41,054      $ 4,143       $ —        $ 45,197   

Student housing services

     1,662        87         —          1,749   

Development, construction and management services

     26,444        —           (98     26,346   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     69,160        4,230         (98     73,292   

Operating expenses:

         

Student housing operations

     20,086        2,159         (196     22,049   

Development, construction and management services

     24,229        —           —          24,229   

General and administrative

     4,923        —           —          4,923   

Ground leases

     156        —           —          156   

Depreciation and amortization

     15,239        —           1,132        16,371   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total operating expenses

     64,633        2,159         936        67,728   

Equity in loss of unconsolidated entities

     (944     —           59        (885
  

 

 

   

 

 

    

 

 

   

 

 

 

Operating income (loss)

     3,583        2,071         (975     4,679   

Nonoperating income (expense):

         

Interest expense

     (4,657     —           (978     (5,635

Change in fair value of interest rate derivatives

     315        —           —          315   

Other income

     272        —           —          272   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total nonoperating expenses, net

     (4,070     —           (978     (5,048
  

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before income taxes

     (487     2,071         (1,953     (369

Income tax expense

     (214     —           —          (214
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income (loss)

     (701     2,071         (1,953     (583

Net income attributable to noncontrolling interests

     1        —           —          1   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income (loss) attributable to Campus Crest Communities, Inc.

   $ (702   $ 2,071       $ (1,953   $ (584
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss per share attributable to Campus Crest Communities, Inc.:

         

Basic and diluted

   $ (0.02        $ (0.02
  

 

 

        

 

 

 

Weighted-average common shares outstanding:

         

Basic

     30,717             30,717   
  

 

 

        

 

 

 

Diluted

     30,717             30,717   
  

 

 

        

 

 

 

Distributions per common share

   $ 0.48           $ 0.48   
  

 

 

        

 

 

 

See accompanying notes to pro forma condensed consolidated financial statements

 

7


CAMPUS CREST COMMUNITIES, INC. AND PREDECESSOR

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2010

(UNAUDITED)

 

(In thousands, except per share data)    Historical
Campus Crest
Communities
Predecessor
January 1,  2010
Through
October 18, 2010
    Historical
Campus  Crest
Communities,

Inc.
October 19, 2010
Through
December 31, 2010
    Acquisition
of

HSRE
Properties
     Pro forma
Adjustments
    Combined
Pro forma
 
                 (AA)      (BB)        

Revenues:

           

Student housing rental

   $ 39,169      $ 10,452      $ 2,326       $ —        $ 51,947   

Student housing services

     1,902        334        35         —          2,271   

Development, construction and management services

     35,557        74        —           (23,623     12,008   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     76,628        10,860        2,361         (23,623     66,226   

Operating expenses:

           

Student housing operations

     22,424        5,371        1,013         (112     28,696   

Development, construction and management services

     33,449        —          —           (19,004     14,445   

General and administrative

     5,589        1,176        —           —          6,765   

Ground leases

     214        42        —           —          256   

Write-off of pre-development costs

     537        —          —           —          537   

Depreciation and amortization

     14,886        3,961        —           900        19,747   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total operating expenses

     77,099        10,550        1,013         (18,216     70,446   

Equity in loss of unconsolidated entities

     (259     (163     —           (33     (455
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Operating income (loss)

     (730     147        1,348         (5,440     (4,675

Nonoperating income (expense):

           

Interest expense

     (20,836     (2,519     —           (483     (23,838

Change in fair value of interest rate derivatives

     871        146        —           —          1,017   

Other income

     43        621        —           —          664   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total nonoperating expenses, net

     (19,922     (1,752     —           (483     (22,157
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before income taxes

     (20,652     (1,605     1,348         (5,923     (26,832

Income tax expense

     —          —          —           —          —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income (loss)

     (20,652     (1,605     1,348         (5,923     (26,832

Net (loss) attributable to noncontrolling interests

     (7,479     (14     —           —          (7,493
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income (loss) attributable to Campus Crest Communities, Inc. and Predecessor

   $ (13,173   $ (1,591   $ 1,348       $ (5,923   $ (19,339
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net loss per share attributable to Campus Crest Communities, Inc. and Predecessor:

           

Basic and diluted

     $ (0.05        $ (0.65
    

 

 

        

 

 

 

Weighted-average common shares outstanding:

           

Basic

       29,877             29,877   
    

 

 

        

 

 

 

Diluted

       29,877             29,877   
    

 

 

        

 

 

 

Distributions per common share

     $ 0.127           $ 0.127   
    

 

 

        

 

 

 

See accompanying notes to pro forma condensed consolidated financial statements

 

8


CAMPUS CREST COMMUNITIES, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – Basis of Presentation

On December 29, 2011, the Company acquired certain controlling interests of certain entities (The Grove at Huntsville and The Grove at Statesboro) owned by a real estate venture in which the Company was previously a member.

The accompanying unaudited pro forma condensed consolidated balance sheet as of September 30, 2011 presents the historical financial information of the Company as adjusted for the acquisition of The Grove at Huntsville and The Grove at Statesboro, as if the transaction had occurred on September 30, 2011.

The accompanying unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2011 and the year ended December 31, 2010 combine the historical operations of the Company and predecessor with the historical operations of The Grove at Huntsville and The Grove at Statesboro as if the transaction occurred on January 1, 2010.

The unaudited condensed consolidated pro forma financial statements have been prepared by the management of the Company based upon the historical financial statements of the Company, Campus Crest Communities Predecessor, The Grove at Huntsville and The Grove at Statesboro. The unaudited pro forma adjustments and eliminations are based on available information and upon assumptions the Company believes are reasonable. These unaudited condensed consolidated pro forma financial 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.

NOTE 2 – Adjustments to the Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2011

Reflects the acquisition of all of Harrison Street Real Estate Capital’s and its affiliates (“HSRE”) interests in the combined real estate venture related to The Grove at Huntsville and The Grove at Statesboro. Through this acquisition, the Company increased its ownership in The Grove at Huntsville to 100% and The Grove at Statesboro to 100%. The following table represents the changes in net property ownership as a result of this transaction:

 

Property

   Net ownership
interest
pre-acquisition
    Net  ownership
interest

post-acquisition
 

The Grove at Huntsville

     49.9     100.0

The Grove at Statesboro

     49.9     100.0

Prior to the acquisition, The Grove at Huntsville and The Grove at Statesboro financial results were accounted for using the equity method of accounting in the Company’s historical consolidated financial statements. As a result of the acquisition, the financial results of The Grove at Huntsville and The Grove at Statesboro are to be consolidated at 100% into the financial results of the Company and are reflected in the related adjustment in the unaudited pro forma condensed consolidated statements of operations (see note 3).

 

9


CAMPUS CREST COMMUNITIES, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

 

(A) Reflects the pro forma adjustments to the Company’s historical condensed consolidated balance sheet as of September 30, 2011 as a result of the acquisition. In accordance with Financial Accounting Standards Board ASC 805-10, the assets and liabilities acquired will be recorded at their fair values on the acquisition date. Management utilized the fair value adjustments for The Grove at Huntsville and The Grove at Statesboro on the acquisition date and applied this adjustment to the September 30, 2011 asset balances.

 

(in thousands)       

The sources of funding for the acquisition and previously held equity interests in the properties were as follows:

  

Borrowings on line of credit

   $ 13,604   

Mortgage debt

     28,764   

Previously owned 49.9% equity in The Grove at Huntsville and The Grove at Statesboro

     4,883   

Fair value adjustment for interest owned prior to this purchase

     3,159   
  

 

 

 
   $ 50,410   
  

 

 

 

The preliminary allocation of the purchase price was as follows:

  

Student housing properties

   $ 49,087   

Cash acquired

     1,554   

Existing leases and tenant relationships

     913   

Other assets acquired

     195   

Other liabilities assumed

     (1,339
  

 

 

 
   $ 50,410   
  

 

 

 

 

NOTE 3 – Adjustments to the Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Nine Months Ended September 30, 2011

 

(AA) Reflects unaudited historical revenue and certain expenses for the nine months ended September 30, 2011 for The Grove at Huntsville and The Grove at Statesboro.

Prior to the acquisition, The Grove at Huntsville and The Grove at Statesboro financial results were accounted for using the equity method of accounting in the Company’s historical consolidated statement of operations. As a result of the acquisition, the financial results of The Grove at Huntsville and The Grove at Statesboro are consolidated at 100% into the financial results of the Company and are reflected in the historical revenue and certain expenses for the nine months ended September 30, 2011.

 

(BB) Reflects the fair value adjustment as a result of the acquisition and the consolidation of property operations.

 

   

Elimination of management fee revenue and expense in the amount of $0.1 million and $0.2 million, respectively.

 

   

Increase in depreciation related to the fair value adjustment.

 

   

Increase in interest expense related to the borrowings under the line of credit and the mortgage associated with the acquisition.

 

10


CAMPUS CREST COMMUNITIES, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 4 – Adjustments to the Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 2010

 

(AA) Reflects unaudited historical revenues and certain expenses for the period from August 1, 2010 (inception of operations) through December 31, 2010 for The Grove at Huntsville and The Grove at Statesboro.

Prior to the acquisition, The Grove at Huntsville and The Grove at Statesboro financial results were accounted for using the equity method of accounting in the Company’s historical consolidated statement of operations. As a result of the acquisition, the financial results of The Grove at Huntsville and The Grove at Statesboro are consolidated at 100% into the financial results of the Company and are reflected in the historical revenues and certain expenses for the year ended December 31, 2010.

 

(BB) Reflects the fair value adjustment as a result of the acquisition and the consolidation of property operations.

 

   

Elimination of revenue recognized in the historical consolidated statement of operations related to construction activity and development fees of $21.9 million and $1.2 million, respectively.

 

   

Elimination of revenue recognized in the historical consolidated statement of operations relating to pre-leasing activities in the amount of $0.5 million.

 

   

Elimination of expenses incurred in the historical consolidated statement of operations relating to construction activity in the amount of $18.6 million.

 

   

Elimination of expenses incurred in the historical consolidated statement of operations relating to pre-leasing activities in the amount of $0.4 million.

 

   

Elimination of management fee expense in the amount of $0.1 million.

 

   

Increase in depreciation related to the fair value adjustment.

 

   

Increase in interest expense related to the borrowings under the line of credit and the mortgage associated with the acquisition.

 

11


SIGNATURES

Pursuant to the requirements 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.

 

CAMPUS CREST COMMUNITIES, INC.
By:  

/s/ Donald L. Bobbitt, Jr.

  Donald L. Bobbitt, Jr.
  Executive Vice President, Chief Financial Officer and Secretary

Date: March 9, 2012


EXHIBIT INDEX

 

Exhibit
Number

  

Description

23.1    Consent of KPMG LLP