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EX-23.1 - EX-23.1 - Landmark Apartment Trust, Inc.d598153dex231.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K/A

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 1, 2013

 

 

Landmark Apartment Trust of America, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Maryland   000-52612   20-3975609

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

4901 Dickens Road, Suite 101

Richmond, Virginia

    23230
(Address of principal executive offices)     (Zip Code)

Registrant’s telephone number, including area code: (804) 237-1335

Former name or former address, if changed since last report: Not Applicable

 

 

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))

 

 

 

 


Explanatory Note

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Landmark Apartment Trust of America, Inc. (the “Company”) hereby amends the Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on July 8, 2013 (the “July 8, 2013 Form 8-K”) to provide the required financial information relating to the completed acquisitions of a portfolio of seven multifamily apartment communities (the “Contributed Properties”) in exchange for aggregate consideration valued at approximately $129.5 million, consisting of approximately (i) 1,200,000 in common units of limited partnership interest, of which 821,217 units were considered an assignment fee; (ii) $30.5 million in cash; and (iii) $89.2 million in new or assumed indebtedness encumbering the Contributed Properties (based on principal amounts outstanding as of June 30, 2013). As reported in the July 8, 2013 Form 8-K, the closings with respect to the acquisition of four of the Contributed Properties occurred on July 1, 2013 and closings with respect to two of the Contributed Properties occurred on July 3, 2013. As disclosed in the Current Report on Form 8-K/A filed with the SEC on July 31, 2013, the Company completed the acquisition of the seventh property on July 25, 2013. Additionally, the Company completed the acquisition of the Victoria Park property on April 30, 2013, which acquisition, at the time, was individually insignificant to the Company for purposes of the reporting requirements of Form 8-K and Rule 3-14. The Victoria Park property is a related property and is significant in the aggregate with the rest of the Contributed Properties. The Company has also provided herein the financial information relating to the completion of the acquisition of the Victoria Park property. Because the properties were acquired from related parties, the financial statements of the properties acquired have been prepared for the six months ended June 30, 2013 (unaudited) and the years ended December 31, 2012, 2011 and 2010. The financial statements of the properties are represented as follows: (i) the financial statements for the Victoria Park property are reflected in the financial statements for Hampton Ridge Partners, LLC; (ii) the financial statements for the Grand Terraces property are reflected in the financial statements for Crown Ridge Partners, LLC; (iii) the financial statements for the Stanford Reserve property are reflected in the financial statements for East Pointe Partners, LLC; (iv) the financial statements for the Courtyards on the River property are reflected in the financial statements for Sonoma Partners, LLC; (v) the financial statements for the Fountain Oaks property are reflected in the financial statements for Royal Green Partners, LLC; (vi) the financial statements for the Caveness Farms property are reflected in the financial statements for Caveness Partners, LLC; (vii) the financial statements for the Lexington on the Green property are reflected in the financial statements for Fairway Apartment Partners, LLC; (viii) the financial statements for the Avondale property are reflected in the financial statements for Solera Partners, LLC.

A description of the properties is set forth below (dollars in thousands):

 

Property Description    Date Acquired         Purchase Price         Gross Leasable Area(1)         Year Built     

Victoria Park

   April 30, 2013            $20,500              383,444              1990      

Grand Terraces

   July 1, 2013            $15,750              243,140              2000      

Stanford Reserve

   July 1, 2013            $15,200              300,370              1986      

Courtyards on the River

   July 1, 2013            $16,250              295,784              1972      

Fountain Oaks

   July 1, 2013            $  7,000              132,000              1987      

Caveness Farms

   July 3, 2013            $26,675              309,132              1998      

Lexington on the Green

   July 3, 2013            $23,500              378,568              1973      

Avondale

   July 25, 2013            $18,400              315,450              1973      

 

(1) Gross Leasable Area represents total rentable square feet.

After a reasonable inquiry, the Company is not aware of any other material factors relating to these properties that would cause the reported financial information not to be necessarily indicative of future operating results. The Company and its operations are, however, subject to a number of risks and uncertainties. For a discussion of such risks, see the risks identified in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 under Item 1A Risk Factors and in the other reports filed by the Company with the SEC.

Item 9.01 Financial Statements and Exhibits

 

          Page  

(a)

   Financial Statements of Properties Acquired      2   
   Independent Auditor’s Report   
   Combined Statement of Revenues and Certain Expenses for the Six Months Ended June 30, 2013 (unaudited) and the Years Ended December 31, 2013, 2012 and 2011 (audited)      3   
   Notes to Combined Statement of Revenues and Certain Operating Expenses for the Six Months Ended June 30, 2012 (unaudited) and the Years Ended December 31, 2013, 2012 and 2011 (audited)      4   

(b)

   Pro Forma Financial Information      6   
   Landmark Apartment Trust of America, Inc.   

(c)

   Shell Company Transactions   
   None.   

(d)

   Exhibits   

 

Exhibit Number

  

Name

23.1    Consent of Joel Sanders & Company, PA, Independent Registered Public Accounting Firm

 

1


JOEL SANDERS & COMPANY, P.A.

CERTIFIED PUBLIC ACCOUNTANTS

1301 SHOTGUN ROAD

WESTON, FLORIDA 33326

 

 

 

MEMBER: AMERICAN INSTITUTE OF

CERTIFIED PUBLIC ACCOUNTANTS

 

TEL: (954) 916-2000

FACSIMILE: (954) 916-2012

EMAIL: jscpal@msn.com

 

MEMBER: FLORIDA INSTITUTE OF   

CERTIFIED PUBLIC ACCOUNTANTS

INDEPENDENT AUDITOR’S REPORT

To the Board of Directors and Stockholders of Landmark Apartment Trust of America, Inc.

We have audited the accompanying combined statements of revenues and certain expenses of Royal Green Partners, LLC, Sonoma Partners, LLC, Solera Partners, LLC, Crown Ridge Partners, LLC, East Pointe Partners, LLC, Caveness Partners, LLC, Fairway Apartment Partners, LLC, and Hampton Ridge Partners, LLC (the “Properties”) for each of the three years in the period ended December 31, 2012.

Management’s Responsibility for the Statements of Revenue and Certain Expenses

Management is responsible for the preparation and fair presentation of the combined statements of revenue and certain expenses in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the combined statements of revenue and certain expenses that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the combined statements of revenue and certain expenses based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined statements of revenue and certain expenses are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined statements of revenue and certain expenses. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the combined statements of revenue and certain expenses, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Properties’ preparation and fair presentation of the combined statements of revenue and certain expenses in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Properties’ internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combined statements of revenue and certain expenses. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the combined statements of revenue and certain expenses referred to above present fairly, in all material respects, the revenue and certain expenses described in Note 1 of the Properties for each of the three years in the period ended December 31, 2012, in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in Note 1, the accompanying combined statements of revenue and certain expenses were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in the Form 8-K/A of Landmark Apartment Trust of America, Inc.) and are not intended to be a complete presentation of the Properties’ revenue and expenses. Our opinion is not modified with respect to this matter.

CERTIFIED PUBLIC ACCOUNTANTS

September 16, 2013

Weston, Florida

 

2


CONTRIBUTED PROPERTIES

COMBINED STATEMENTS OF REVENUES AND CERTAIN OPERATING EXPENSES

FOR THE SIX MONTHS ENDED JUNE 30, 2013 AND FOR THE YEARS ENDED

DECEMBER 31, 2012, 2011 AND 2010

(In thousands)

 

     Six Months
Ended
June 30,
2013
(Unaudited)
     Year Ended
December 31,
2012
     Year Ended
December 31,
2011
     Year Ended
December 31,
2010
 

Revenues:

           

Rental income

   $ 8,213       $ 16,802       $ 16,331       $ 15,473   

Other property income

     1,122         2,253         2,045         1,746   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     9,335         19,055         18,376         17,219   

Certain expenses:

           

Administrative and marketing

     984         1,942         1,819         1,693   

Insurance

     331         583         478         506   

Personnel

     1,163         2,312         2,269         2,098   

Real estate taxes

     699         1,334         1,381         1,488   

Repairs and maintenance

     763         1,520         1,439         1,330   

Utilities

     900         1,896         1,782         1,602   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses

     4,840         9,588         9,169         8,718   
  

 

 

    

 

 

    

 

 

    

 

 

 

Revenues in excess of certain expenses

   $ 4,495       $ 9,467       $ 9,207       $ 8,501   
  

 

 

    

 

 

    

 

 

    

 

 

 

The accompanying notes are an integral part of these

combined statements of revenues and certain expenses.

 

3


CONTRIBUTED PROPERTIES

NOTES TO THE COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES

NOTE 1 – Basis of Presentation

Presented herein are the combined statements of revenues and certain expenses related to the operations of Royal Green Partners, LLC, a 160-unit apartment community located in Jacksonville, Florida, Sonoma Partners, LLC, a 296-unit apartment community located in Tampa, Florida, Solera Partners, LLC, a 304-unit apartment community located in St. Petersburg, Florida, Crown Ridge Partners, LLC, a 240-unit apartment community located in Charlotte, North Carolina, East Pointe Partners, LLC, a 310-unit apartment community located in Charlotte, North Carolina, Caveness Partners, LLC, a 288-unit apartment community located in Wake Forest, North Carolina, Fairway Apartment Partners, LLC, a 384-unit apartment community located in Raleigh, North Carolina, and Hampton Ridge Partners, LLC, a 380-unit apartment community located in Charlotte, North Carolina.

The accompanying combined statements of revenues and certain expenses relate to the Properties and have been prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act of 1933, as amended, and accordingly, are not representative of the actual operations of the Properties for the six months ended June 30, 2013 and for the years ended December 31, 2012, 2011, and 2010, due to the exclusion of the following: depreciation and amortization, amortization of tangible assets and liabilities not directly related to the future operations.

Because these Properties were acquired from a related party, these Statements have been prepared for the six months ended June 30, 2013 and years ended December 31, 2012, 2011 and 2010.

The accompanying interim combined statement of revenues and certain expenses for the six months ended June 30, 2013, is unaudited. In the opinion of management, the Statement reflects all adjustments necessary for a fair presentation of the results of the interim period. All such adjustments are of a normal recurring nature.

NOTE 2 – Summary of Significant Accounting Policies

Basis of Accounting

The combined statement of revenues and certain expenses are prepared on the accrual basis of accounting.

Use of Estimates

The preparation of the combined statement of revenues and certain expenses in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of revenue and certain expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

The Company’s rental revenue is obtained from tenants through rental payments as provided for under noncancelable apartment rental contracts. Rental revenues attributable to leases is recorded when due from residents and is recognized monthly as it is earned, which approximates the straight-line basis. Leases entered into between a resident and the Company for the rental of an apartment unit is generally year to year, renewable upon consent of both parties on an annual or monthly basis.

Repairs and Maintenance

Significant improvements, renovations or betterments that extend the economic useful life of the assets are capitalized. Expenditures for repairs and maintenance are expensed as incurred.

 

4


CONTRIBUTED PROPERTIES

NOTES TO THE COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES (CONTINUED)

NOTE 3 – Mortgage Notes Payable

Mortgage notes payable consisted of the following as of December 31, 2012 (in thousands):

 

5.19% mortgage note payable to bank, monthly payments of interest at a floating rate swap, maturing March 2013

   $ 6,750   

4.49% mortgage note payable to bank, monthly payments of principal and interest, maturing November 2020

   $ 11,941   

4.59% mortgage note payable to bank, monthly payments of principal and interest, maturing November 2020

   $ 12,094   

6.50% mortgage note payable to bank, monthly payments of interest, maturing August 2015

   $ 12,500   

5.68% mortgage note payable to bank, monthly payments of principal and interest, maturing June 2015

   $ 11,771   

4.75% mortgage note payable to bank, monthly payments of principal and interest, maturing September 2020

   $ 18,915   

5.26% mortgage note payable to bank, monthly payments of principal and interest, maturing January 2018

   $ 18,493   

5.34% mortgage note payable to bank, monthly payments of interest at a floating rate swap, maturing March 2013

   $ 13,600   
  

 

 

 

Total mortgage notes payable

   $ 106,064   
  

 

 

 

NOTE 4 – Subsequent Events

Management has evaluated all events and transactions that occurred after December 31, 2012 through September 4, 2013, the date which the statements were available and issued, and noted no items requiring adjustments of the statements or additional disclosures.

 

5


LANDMARK APARTMENT TRUST OF AMERICA, INC.

PRO FORMA CONSOLIDATED BALANCE SHEET

For the Six Months Ended June 30, 2013

(In thousands, except for share and per share data)

 

     Historical              
     Landmark
Apartment
Trust of
America, Inc.
    Pro Forma
Adjustments
(Unaudited)
    Pro Forma
(Unaudited)
 

Assets:

      

Real estate investments:

      

Operating properties, net

   $ 915,877      $ 115,502  (a)    $ 1,031,379   

Cash and cash equivalents

     3,885          3,885   

Accounts receivable

     1,401          1,401   

Other receivables due from affiliates

     5,537          5,537   

Restricted cash

     13,792          13,792   

Goodwill

     7,430          7,430   

Real estate and escrow deposits

     11,705        (9,172 )(b)      2,533   

Identified intangible assets, net

     28,678        8,825  (a)      37,503   

Other assets, net

     15,485        1,051  (c)      16,536   
  

 

 

   

 

 

   

 

 

 

Total assets

     1,003,790        116,206        1,119,996   

Liabilities and equity:

      

Liabilities:

      

Mortgage loan payables, net

   $ 516,619      $ 76,492  (d)    $ 593,111   

Unsecured notes payable to affiliate

     10,270          10,270   

Unsecured notes payable

     500          500   

Credit facility

     114,262        12,685  (d)      126,947   

Series D cumulative non-convertible redeemable preferred stock with derivative

     98,583        6,260  (e)      104,843   

Accounts payable and accrued liabilities

     18,871          18,871   

Other payables due to affiliates

     6,349          6,349   

Acquisition contingent consideration

     5,807          5,807   

Security deposits, prepaid rent and other liabilities

     6,840        1,479  (a)      8,319   
  

 

 

   

 

 

   

 

 

 

Total liabilities

     778,101        96,916        875,017   

Equity:

      

Stockholders’ equity:

      

Common stock, $0.01 par value; 300,000,000 shares authorized; 21,786,558 and 20,655,646 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively

     218        168  (f)      386   

Additional paid-in capital

     195,895        16,583  (f)      212,478   

Accumulated deficit

     (137,899     (7,240 )(g)      (145,139
  

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     58,214        9,510        67,724   

Redeemable non-controlling interests in operating partnership

     167,475        9,780  (h)      177,255   
  

 

 

   

 

 

   

 

 

 

Total equity

     225,689        19,290        244,979   
  

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 1,003,790      $ 116,206      $ 1,119,996   
  

 

 

   

 

 

   

 

 

 

Unaudited Pro Forma Consolidated Balance Sheet Adjustments

 

(a) Reflects the total purchase price of the properties. The total purchase price is allocated in accordance with ASC 805.

 

(b) Reflects the deposits held in escrow at June 30, 2013 used as portion of the consideration paid for the acquisition of properties.

 

(c) Reflects the deferred financing costs associated with obtaining the new debt and assumed debt of the acquired properties.

 

(d) Reflects the new debt and assumed debt obtained as a portion of the consideration for the acquisition of properties.

 

(e) Reflects the additional shares of Series D Preferred Stock issued whose proceeds were used for the acquisition of the properties.

 

(f) Reflects the additional shares of common stock issued whose proceeds were used for the acquisition of the properties.

 

(g) Reflects acquisition related expenses incurred as part of the acquisition of the properties. Included in this amount is the assignment fee paid of $6.7 million.

 

(h) Reflects common units of limited partnership interest issued as a portion of the consideration paid for the acquisition of properties.

 

6


LANDMARK APARTMENT TRUST OF AMERICA, INC.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2013

(In thousands, except for share and per share data)

 

     Historical               
     Landmark
Apartment
Trust of
America, Inc.
    Contributed
Properties
     Pro Forma
Adjustments
(Unaudited)
    Pro Forma
(Unaudited)
 

Revenues:

         

Rental income

   $ 49,135      $ 8,213         (1,519 ) (a)    $ 55,829   

Other property revenues

     6,564        1,122           7,686   

Management fee income

     1,593           (215 ) (b)      1,378   

Reimbursed income

     4,677             4,677   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     61,969        9,335         (1,733     69,570   

Expenses:

         

Rental expenses

     25,356        4,840         (374 ) (c)      29,822   

Property lease expense

     1,553             1,553   

Reimbursed expense

     4,677             4,677   

General, administrative and other expense

     6,522             6,522   

Acquisition-related expenses

     2,640           7,240   (d)      9,880   

Depreciation and amortization

     23,758           11,935   (e)      35,693   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total expenses

     64,506        4,840         18,801        88,147   

Other income/(expense):

         

Interest expense, net

     (16,210        (2,482 ) (f)      (18,692

Disposition right income

     1,231             1,231   

Loss on debt and preferred stock extinguishment

     (10,220          (10,220
  

 

 

   

 

 

    

 

 

   

 

 

 

Loss from continuing operations before income tax

     (27,736     4,494         (23,016     (46,258

Income tax benefit

     3,207             3,207   
  

 

 

   

 

 

    

 

 

   

 

 

 

Loss from continuing operations

     (24,529     4,494         (23,016     (43,051

Less: Net loss from continuing operations attributable to redeemable non-controlling interests in operating partnership

     12,148             20,933   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss from continuing operations attributable to common stockholders

   $ (12,381   $ 4,494       $ (23,016   $ (22,118
  

 

 

   

 

 

    

 

 

   

 

 

 

Other comprehensive income/(loss):

         

Change in cash flow hedges attributable to redeemable non-controlling interest in operating partnership

     (50          (50

Change in cash flow hedges

     310             310   
  

 

 

        

 

 

 

Comprehensive loss attributable to common stockholders

   $ (12,121        $ (21,858
  

 

 

        

 

 

 

Net loss from continuing operations per share attributable to common stockholders – basic and diluted

   $ (0.58        $ (0.94
  

 

 

        

 

 

 

Weighted average number of common shares outstanding – basic and diluted

       21,397,257         2,055,215   (g)      23,452,472   

Weighted average number of common units held by non-controlling interests – basic and diluted

       20,278,027         1,200,000   (h)      21,478,027   

Unaudited Pro Forma Consolidated Statement of Operations Adjustments

 

(a) Reflects the estimated rental income that would have been recorded due to amortizing the fair market adjustment to above market leases.

 

(b) Reflects the management fee income of the acquired properties that would not have been recognized if we had acquired the properties as of January 1, 2013.

 

(c) Reflects the property management fee expense that would not have been recognized if we had acquired the properties as of January 1, 2013.

 

(d) Reflects acquisition related expenses incurred as part of the acquisition of the properties. Included in this amount is the assignment fee paid of $6.7 million.

 

(e) Reflects the estimated depreciation and amortization that would have been recorded by Landmark Apartment Trust of America, Inc. based on the depreciable basis of the acquired communities, assuming asset lives ranging from five to forty years, as well as the amortization of the identified intangible values recorded with an estimated useful life of approximately six months.

 

(f) Reflects estimated interest expense that would have been recorded to the deferred financing costs, new debt and assumed debt, including the impact of amortizing the fair market adjustment on fixed rate debt over the term of the related debt instrument.

 

(g) Reflects the common shares issued who proceeds were used as a portion of the consideration paid for the acquisition of the properties.

 

(h) Reflects the common units of limited partnership interest issued as a portion of the consideration paid for the acquisition of the properties.

 

7


LANDMARK APARTMENT TRUST OF AMERICA, INC.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2012

(In thousands, except for share and per share data)

 

     Historical (Audited)               
     Landmark
Apartment
Trust of
America, Inc.
    Contributed
Properties
     Pro Forma
Adjustments
(Unaudited)
    Pro Forma
(Unaudited)
 

Revenues:

         

Rental income

   $ 57,196      $ 16,802         (1,539 ) (a)    $ 72,459   

Other property revenues

     7,521        2,253           9,774   

Management fee income

     2,645             2,645   

Reimbursed income

     10,407             10,407   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     77,769        19,055         (1,539     95,285   

Expenses:

         

Rental expenses

     28,854        9,588         (761 ) (b)      37,681   

Property lease expense

     4,208             4,208   

Reimbursed expense

     10,407             10,407   

General, administrative and other expense

     13,029             13,029   

Acquisition-related expenses

     19,894           7,240   (c)      27,134   

Depreciation and amortization

     20,056           14,842   (d)      34,898   

Impairment loss

     5,397             5,397   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total expenses

     101,845        9,588         21,321        132,754   
  

 

 

   

 

 

    

 

 

   

 

 

 

Loss from operations

     (24,076     9,467         (22,860     (37,469

Other expense:

         

Interest expense, net

     (17,519        (4,964 ) (e)      (22,483
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss

     (41,595     9,467         (27,824     (59,952
  

 

 

   

 

 

    

 

 

   

 

 

 

Less: Net loss attributable to redeemable non-controlling

     6,735             11,179   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (34,860   $ 9,467       $ (27,824   $ (48,773
  

 

 

   

 

 

    

 

 

   

 

 

 

Other comprehensive income/(loss):

         

Change in cash flow hedges attributable to redeemable non-controlling interest in operating partnership

     50             50   

Change in cash flow hedges

     (310          (310
  

 

 

        

 

 

 

Comprehensive loss attributable to common stockholders

   $ (35,120        $ (49,033
  

 

 

        

 

 

 

Net income loss per share attributable to common stockholders – basic and diluted

   $ (1.72        $ (2.19
  

 

 

        

 

 

 

Weighted average number of common shares outstanding – basic and diluted

     20,244,130           2,055,215   (f)      22,299,345   

Weighted average number of common units held by non-controlling interests – basic and diluted

     3,911,026           1,200,000   (g)      5,111,026   

Unaudited Pro Forma Consolidated Statement of Operations Adjustments

 

(a) Reflects the estimated rental income that would have been recorded due to amortizing the fair market adjustment to above market leases.

 

(b) Reflects the property management fee expense that would not have been recognized if we had acquired the properties as of January 1, 2012.

 

(c) Reflects acquisition related expenses incurred as part of the acquisition of the properties. Included in this amount is the assignment fee paid of $6.7 million.

 

(d) Reflects the estimated depreciation and amortization that would have been recorded by Landmark Apartment Trust of America, Inc. based on the depreciable basis of the acquired communities, assuming asset lives ranging from five to forty years, as well as the amortization of the identified intangible values recorded with an estimated useful life of approximately six months.

 

(e) Reflects estimated interest expense that would have been recorded to the deferred financing costs, new debt and assumed debt, including the impact of amortizing the fair market adjustment on fixed rate debt over the term of the related debt instrument.

 

(f) Reflects the common shares issued who proceeds were used as a portion of the consideration paid for the acquisition of the properties.

 

(g) Reflects the common units of limited partnership interest issued as a portion of the consideration paid for the acquisition of the properties.

 

8


LANDMARK APARTMENT TRUST OF AMERICA, INC.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2011

(In thousands, except for share and per share data)

 

     Historical (Audited)               
     Landmark
Apartment
Trust of
America, Inc.
    Contributed
Properties
     Pro Forma
Adjustments
(Unaudited)
    Pro Forma
(Unaudited)
 

Revenues:

         

Rental income

   $ 42,485      $ 16,331         (1,539 ) (a)    $ 57,277   

Other property revenues

     5,306        2,045           7,351   

Management fee income

     2,865             2,865   

Reimbursed income

     11,207             11,207   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     61,863        18,376         (1,539     78,700   

Expenses:

         

Rental expenses

     21,249        9,169         (570 ) (b)      29,848   

Property lease expense

     2,402             2,402   

Reimbursed expense

     11,207             11,207   

General, administrative and other expense

     8,198             8,198   

Acquisition-related expenses

     1,270           7,240   (c)      8,510   

Loss from unconsolidated joint venture

     59             59   

Depreciation and amortization

     13,541           14,842   (d)      28,383   

Impairment loss

     390             390   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total expenses

     58,316        9,169         21,512        88,997   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income from operations

     3,547        9,207         (23,051     (10,297

Other expense:

         

Interest expense, net

     (12,493        (4,964 ) (e)      (17,457
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss

     (8,946     9,207       $ (28,015     (27,754
  

 

 

   

 

 

    

 

 

   

 

 

 

Less: Net loss attributable to redeemable non-controlling interests in operating partnership

            1,444   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (8,946   $ 9,207       $ (28,015   $ (26,310
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income loss per share attributable to common stockholders – basic and diluted

   $ (0.45        $ (1.20
  

 

 

        

 

 

 

Weighted average number of common shares outstanding – basic and diluted

     19,812,886           2,055,215   (f)      21,868,101   

Weighted average number of common units held by non-controlling interests – basic and diluted

     0           1,200,000   (g)      1,200,000   

Unaudited Pro Forma Consolidated Statement of Operations Adjustments

 

(a) Reflects the estimated rental income that would have been recorded due to amortizing the fair market adjustment to above market leases.

 

(b) Reflects the property management fee expense that would not have been recognized if we had acquired the properties as of January 1, 2011.

 

(c) Reflects acquisition related expenses incurred as part of the acquisition of the properties. Included in this amount is the assignment fee paid of $6.7 million.

 

(d) Reflects the estimated depreciation and amortization that would have been recorded by Landmark Apartment Trust of America, Inc. based on the depreciable basis of the acquired communities, assuming asset lives ranging from five to forty years, as well as the amortization of the identified intangible values recorded with an estimated useful life of approximately six months.

 

(e) Reflects estimated interest expense that would have been recorded to the deferred financing costs, new debt and assumed debt, including the impact of amortizing the fair market adjustment on fixed rate debt over the term of the related debt instrument.

 

(f) Reflects the common shares issued who proceeds were used as a portion of the consideration paid for the acquisition of the properties.

 

(g) Reflects the common units of limited partnership interest issued as a portion of the consideration paid for the acquisition of the properties.

 

9


LANDMARK APARTMENT TRUST OF AMERICA, INC.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2010

(In thousands, except for share and per share data)

 

     Historical (Audited)               
     Landmark
Apartment
Trust of
America, Inc.
    Contributed
Properties
     Pro Forma
Adjustments
(Unaudited)
    Pro Forma
(Unaudited)
 

Revenues:

         

Rental income

   $ 35,568      $ 15,473         (1,539 ) (a)    $ 49,503   

Other property revenues

     4,006        1,746           5,752   

Management fee income

     465             465   

Reimbursed income

     2,082             2,082   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     42,121        17,219         (1,539     57,802   

Expenses:

         

Rental expenses

     18,871        8,718         (630 ) (b)      26,959   

Reimbursed expense

     2,082             2,082   

General, administrative and other expense

     1,809             1,809   

Acquisition-related expenses

     5,394           7,240   (c)      12,634   

Depreciation and amortization

     12,861           14,842   (d)      27,703   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total expenses

     41,017        8,718         21,452        71,187   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income from operations

     1,104        8,501         (22,991     (13,385

Other expense:

         

Interest expense, net

     (11,869        (4,964 ) (e)      (16,833
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss

     (10,765     8,501         (27,955     (30,218
  

 

 

   

 

 

    

 

 

   

 

 

 

Less: Net loss attributable to redeemable non-controlling interests in operating partnership

            1,713   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (10,765   $ 8,501       $ (27,955   $ (28,541
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income loss per share attributable to common stockholders – basic and diluted

   $ (0.59        $ (1.40
  

 

 

        

 

 

 

Weighted average number of common shares outstanding – basic and diluted

     18,356,824           2,055,215   (f)      20,412,039   

Weighted average number of common units held by non-controlling interests – basic and diluted

     0           1,200,000   (g)      1,200,000   

Unaudited Pro Forma Consolidated Statement of Operations Adjustments

 

(a) Reflects the estimated rental income that would have been recorded due to amortizing the fair market adjustment to above market leases.

 

(b) Reflects the property management fee expense that would not have been recognized if we had acquired the properties as of January 1, 2010.

 

(c) Reflects acquisition related expenses incurred as part of the acquisition of the properties. Included in this amount is the assignment fee paid of $6.7 million.

 

(d) Reflects the estimated depreciation and amortization that would have been recorded by Landmark Apartment Trust of America, Inc. based on the depreciable basis of the acquired communities, assuming asset lives ranging from five to forty years, as well as the amortization of the identified intangible values recorded with an estimated useful life of approximately six months.

 

(e) Reflects estimated interest expense that would have been recorded to the deferred financing costs, new debt and assumed debt, including the impact of amortizing the fair market adjustment on fixed rate debt over the term of the related debt instrument.

 

(f) Reflects the common shares issued who proceeds were used as a portion of the consideration paid for the acquisition of the properties.

 

(g) Reflects the common units of limited partnership interest issued as a portion of the consideration paid for the acquisition of the properties.

 

10


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 hereunto duly authorized.

 

September 16, 2013     Landmark Apartment Trust of America, Inc.
    By:   /s/ B. Mechelle Lafon
    Name:   B. Mechelle Lafon
    Title:   Assistant Chief Financial Officer, Treasurer and Secretary


Exhibit Index

 

Exhibit Number

  

Name

23.1    Consent of Joel Sanders & Company, PA, Independent Registered Public Accounting Firm