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EX-23.1 - EX-23.1 - Landmark Apartment Trust, Inc.d645326dex231.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): October 3, 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 October 9, 2013 and the Current Report on Form 8-K filed with the SEC on October 22, 2013 to provide the required financial information relating to the acquisition of the multifamily apartment communities known as Woodland Trace, Grayson Park, and Lancaster Place described in such reports. Additionally, as disclosed in the Current Report on Form 8-K filed on August 22, 2013, the Company completed the acquisition of the multifamily apartment properties known as Ocean Breeze, Savoy Square and Grand Arbor, and the Company has provided herein the financial information relating to the completion of such properties.

While the acquisition of any of these properties was individually insignificant for purposes of the reporting requirements of Form 8-K and Rule 3-14, and the acquisition of any one of the properties was not conditioned upon the acquisition of the other properties, these properties are related properties, which are significant in the aggregate. A description of the properties is set forth below (in thousands):

 

Property Description

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

Savoy Square

   August 16, 2013    $ 10,000         196,047         1970   

Ocean Breeze

   August 16, 2013    $ 9,400         174,175         1985   

Grand Arbor

   August 20, 2013    $ 22,750         313,910         1968   

Woodland Trace

   October 3, 2013    $ 26.800         326,856         1988   

Grayson Park

   October 3, 2013    $ 32,000         334,584         1987   

Lancaster Place

   October 16, 2013    $ 18,000         275,736         2007/2008   

 

(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, 2012, 2011 and 2010 (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, 2012, 2011 and 2010 (audited)

     4   

(b)

 

Pro Forma Financial Information

     6   
 

Pro Forma Consolidated Balance Sheet for the Six Months Ended June 30, 2013

  
 

Pro Forma Consolidated Statement of Comprehensive Loss for the Six Months Ended June 30, 2013 (unaudited)

  
 

Pro Forma Consolidated Statement of Comprehensive Loss for the Year Ended December 31, 2012 (unaudited)

  
 

Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2011 (unaudited)

  
 

Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2010 (unaudited)

  

(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 Landmark at Savoy Square, LLC, Landmark at Ocean Breeze, LLC, Meredith Partners, LLC, Landmark at Woodland Trace, L.P., Landmark at Grayson Park, L.P., and Landmark at Lancaster, 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

December 18, 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

   $ 6,684       $ 11,628       $ 3,833       $ 2,178   

Other property income

     890         1,485         426         259   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     7,574         13,113         4,259         2,437   

Certain expenses:

           

Administrative and marketing

     858         1,460         411         188   

Insurance

     304         516         140         50   

Personnel

     847         1,555         580         297   

Real estate taxes

     644         1,114         202         140   

Repairs and maintenance

     558         799         247         139   

Utilities

     955         1,764         688         281   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses

     4,166         7,208         2,268         1,095   
  

 

 

    

 

 

    

 

 

    

 

 

 

Revenues in excess of certain expenses

   $ 3,408       $ 5,905       $ 1,991       $ 1,342   
  

 

 

    

 

 

    

 

 

    

 

 

 

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 Landmark at Savoy Square, LLC, a 182-unit apartment community located in Clearwater, Florida, Landmark at Ocean Breeze, LLC, a 224-unit apartment community located in Melbourne, Florida, Meredith Partners, LLC, a 297-unit apartment community located in Raleigh, North Carolina, Landmark at Woodland Trace, LP, a 384-unit apartment community located in Casselberry, Florida, Landmark at Grayson Park, LP, a 408-unit apartment community located in Tampa, Florida, and Landmark at Lancaster Place, LLC, a 240-unit apartment community located is Calera, Alabama.

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 are 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


NOTES TO THE COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES

NOTE 3 – Mortgage Notes Payable

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

 

5.75% mortgage note payable to bank, monthly payments of principal and interest, maturing February 2014

   $ 5,899   

5.75% mortgage note payable to bank, monthly payments of interest only until December 31, 2012, then payments of principal and interest, maturing June 2014

   $ 4,258   

6.25% mortgage note payable to bank, monthly payments of interest, maturing April 2015

   $  16,500   

4.28% mortgage note payable to bank, monthly payments of interest only until December 31, 2012, then payments of principal and interest, maturing December 2018

   $ 15,000   

4.91% mortgage note payable to bank, monthly payments of principal and interest, maturing April 2015

   $ 16,230   

4.10% mortgage note payable to bank, monthly payments of principal and interest, maturing February 2019

   $ 10,635   

Total mortgage notes payable

   $ 68,522   

NOTE 4 – Subsequent Events

Management has evaluated all events and transactions that occurred after December 31, 2012 through December 18, 2013, the date on 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      $ 110,264 (a)    $ 1,026,141   

Cash and cash equivalents

     3,885        (1,938 )(b)      1,947   

Accounts receivable

     1,401          1,401   

Other receivables due from affiliates

     5,537          5,537   

Restricted cash

     13,792        2,370 (c)      16,162   

Goodwill

     7,430          7,430   

Real estate and escrow deposits

     11,705          11,705   

Identified intangible assets, net

     28,678        9,384 (a)      38,062   

Other assets, net

     15,485        872 (d)      16,357   
  

 

 

   

 

 

   

 

 

 

Total assets

     1,003,790        120,952        1,124,742   

Liabilities and equity:

      

Liabilities:

      

Mortgage loan payables, net

   $ 516,619      $ 70,883 (a)(e)    $ 587,502   

Unsecured notes payable to affiliate

     10,270          10,270   

Unsecured notes payable

     500          500   

Credit facility

     114,262          114,262   

Series D cumulative non-convertible redeemable preferred stock with derivative

     98,583          98,583   

Accounts payable and accrued liabilities

     18,871        999 (c)      19,870   

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        1,204 (a)(c)      8,044   
  

 

 

   

 

 

   

 

 

 

Total liabilities

     778,101        73,086        851,187   

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          218   

Additional paid-in capital

     195,895          195,895   

Accumulated deficit

     (137,899     111 (f)      (137,788 )
  

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     58,214        111        58,325   

Redeemable non-controlling interests in operating partnership

     167,475        47,755 (g)      215,230   
  

 

 

   

 

 

   

 

 

 

Total equity

     225,689        47,866        273,555   
  

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 1,003,790      $ 120,952      $ 1,124,742   
  

 

 

   

 

 

   

 

 

 

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 cash on hand used as portion of the consideration paid for the acquisition of the properties.
(c) Reflects lender escrows, accounts payable and accrued liabilities, and security deposits, prepaid rent and other liabilities assumed of the acquired properties.
(d) Reflects the deferred financing costs associated with obtaining the new debt and assumed debt of the acquired properties.
(e) Reflects the new debt and assumed debt obtained as a portion of the consideration for the acquisition of the properties.
(f) Reflects acquisition-related expenses incurred and the pro rated expenses and income obtained as part of the acquisition of the properties.
(g) Reflects common units of limited partnership interest issued as a portion of the consideration paid for the acquisition of the properties.

 

6


LANDMARK APARTMENT TRUST OF AMERICA, INC.

PRO FORMA CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS

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      $ 6,684         (1,382 ) (a)(b)   $ 54,437   

Other property revenues

     6,564        890           7,454   

Management fee income

     1,593           (177 ) (c)     1,416   

Reimbursed income

     4,677             4,677   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     61,969        7,574         (1,559 )     67,984   

Expenses:

         

Rental expenses

     25,356        4,166         (303 ) (c)     29,219   

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           241  (d)     2,881   

Depreciation and amortization

     23,758           11,454  (e)     35,212   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total expenses

     64,506        4,166         11,392        80,064   

Other income/(expense):

         

Interest expense, net

     (16,210 )        (1,604 ) (b) (f)     (17,814

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 )     3,408         (14,555     (38,883

Income tax benefit

     3,207             3,207   
  

 

 

   

 

 

    

 

 

   

 

 

 

Loss from continuing operations

     (24,529 )     3,408         (14,555     (35,676

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

     12,148             19,855   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss from continuing operations attributable to common stockholders

   $ (12,381 )   $ 3,408       $ (14,555   $ (15,821
  

 

 

   

 

 

    

 

 

   

 

 

 

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 )        $ (15,561
  

 

 

        

 

 

 

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

   $ (0.58 )        $ (0.74
  

 

 

        

 

 

 

Weighted average number of common shares outstanding – basic and diluted

       21,397,257           21,397,257   

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

       20,278,027         5,859,531  (g)     26,137,558   

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 pro-rated income and expense items of the acquired properties upon acquisition.
(c) Reflects the management fee income received from the acquired properties and the management fee expense of the acquired properties 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.
(e) Reflects the estimated depreciation and amortization that would have been recorded by the Company 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 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 COMPREHENSIVE LOSS

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      $ 11,628         (1,382 )(a) (b)   $ 67,442   

Other property revenues

     7,521        1,485           9,006   

Management fee income

     2,645             2,645   

Reimbursed income

     10,407             10,407   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     77,769        13,113         (1,382     89,500   

Expenses:

         

Rental expenses

     28,854        7,208         (524 )(c)     35,538   

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           242 (d)     20,136   

Depreciation and amortization

     20,056           13,524 (e)     33,580   

Impairment loss

     5,397             5,397   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total expenses

     101,845        7,208         13,242        122,295   
  

 

 

   

 

 

    

 

 

   

 

 

 

Loss from operations

     (24,076 )     5,905         (14,624     (32,795

Other expense:

         

Interest expense, net

     (17,519 )        (3,246 )(b) (f)     (20,765
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss

     (41,595 )     5,905         (17,870     (53,560
  

 

 

   

 

 

    

 

 

   

 

 

 

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

     6,735             17,435   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (34,860 )   $ 5,905       $ (17,870   $ (36,125
  

 

 

   

 

 

    

 

 

   

 

 

 

Other comprehensive income/(loss):

         

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

     50             50   

Change in cash flow hedges

     (310 )          (310 )
  

 

 

        

 

 

 

Comprehensive loss attributable to common stockholders

   $ (35,120 )        $ (36,385
  

 

 

        

 

 

 

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

   $ (1.72 )        $ (1.78
  

 

 

        

 

 

 

Weighted average number of common shares outstanding – basic and diluted

     20,244,130             20,244,130   

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

     3,911,026           5,859,531  (g)      9,770,557   

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 pro-rated income and expense items of the acquired properties upon acquisition.
(c) Reflects the property management fee expense that would not have been recognized if we had acquired the properties as of January 1, 2012.
(d) Reflects acquisition-related expenses incurred as part of the acquisition of the properties.
(e) Reflects the estimated depreciation and amortization that would have been recorded by the Company. 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 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      $ 3,833         (1,382 )(a) (b)   $ 44,936   

Other property revenues

     5,306        426           5,732   

Management fee income

     2,865             2,865   

Reimbursed income

     11,207             11,207   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     61,863        4,259         (1,382     64,740   

Expenses:

         

Rental expenses

     21,249        2,268         (170 )(c)     23,347   

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           242 (d)     1,512   

Loss from unconsolidated joint venture

     59             59   

Depreciation and amortization

     13,541           13,524 (e)     27,065   

Impairment loss

     390             390   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total expenses

     58,316        2,268         13,596        74,180   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income/(loss) from operations

     3,547        1,991         (14,978     (9,440

Other expense:

         

Interest expense, net

     (12,493 )        (3,226 )(b) (f)     (15,719
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss

     (8,946 )     1,991       $ (18,204     (25,159
  

 

 

   

 

 

    

 

 

   

 

 

 

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

            5,742   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (8,946 )   $ 1,991       $ (18,204   $ (19,417
  

 

 

   

 

 

    

 

 

   

 

 

 

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

   $ (0.45 )        $ (0.98
  

 

 

        

 

 

 

Weighted average number of common shares outstanding – basic and diluted

     19,812,886             19,812,886   

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

     0           5,859,531 (g)     5,859,531   

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 pro-rated income and expense items of the acquired properties upon acquisition.
(c) Reflects the property management fee expense that would not have been recognized if the Company had acquired the properties as of January 1, 2011.
(d) Reflects acquisition-related expenses incurred as part of the acquisition of the properties.
(e) Reflects the estimated depreciation and amortization that would have been recorded by the Company 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 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      $ 2,178         (1,382 )(a)(b)   $ 36,364   

Other property revenues

     4,006        259           4,265   

Management fee income

     465             465   

Reimbursed income

     2,082             2,082   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     42,121        2,437         (1,382     43,176   

Expenses:

         

Rental expenses

     18,871        1,095         (97 )(c)     19,869   

Reimbursed expense

     2,082             2,082   

General, administrative and other expense

     1,809             1,809   

Acquisition-related expenses

     5,394           242 (d)     5,636   

Depreciation and amortization

     12,861           13,524 (e)     26,385   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total expenses

     41,017        1,095         13,669        55,781   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income/(loss) from operations

     1,104        1,342         (15,051     (12,605

Other expense:

         

Interest expense, net

     (11,869 )        (3,226 )(b) (f)     (15,095
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss

     (10,765 )     1,342         (18,277     (27,700
  

 

 

   

 

 

    

 

 

   

 

 

 

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

            6,703   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (10,765 )   $ 1,342       $ (18,277   $ (20,997
  

 

 

   

 

 

    

 

 

   

 

 

 

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

   $ (0.59 )        $ (1.14
  

 

 

        

 

 

 

Weighted average number of common shares outstanding – basic and diluted

     18,356,824             18,356,824   

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

     0           5,859,531 (g)     5,859,531   

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 pro-rated income and expense items of the acquired properties upon acquisition.
(c) Reflects the property management fee expense that would not have been recognized if the Company had acquired the properties as of January 1, 2010.
(d) Reflects acquisition-related expenses incurred as part of the acquisition of the properties.
(e) Reflects the estimated depreciation and amortization that would have been recorded by the Company 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 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.

 

December 18, 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