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) |
Registrants 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 Companys 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 Auditors 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 AUDITORS 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.
Managements 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.
Auditors 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 | ||||||||||||
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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 | ||||||||||||
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Total expenses |
4,840 | 9,588 | 9,169 | 8,718 | ||||||||||||
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Revenues in excess of certain expenses |
$ | 4,495 | $ | 9,467 | $ | 9,207 | $ | 8,501 | ||||||||
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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 Companys 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 | ||
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|
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Total mortgage notes payable |
$ | 106,064 | ||
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|
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 | ||||||||
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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 | ||||||||
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Total liabilities |
778,101 | 96,916 | 875,017 | |||||||||
Equity: |
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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 | ) | ||||||
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Total stockholders equity |
58,214 | 9,510 | 67,724 | |||||||||
Redeemable non-controlling interests in operating partnership |
167,475 | 9,780 | (h) | 177,255 | ||||||||
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Total equity |
225,689 | 19,290 | 244,979 | |||||||||
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Total liabilities and equity |
$ | 1,003,790 | $ | 116,206 | $ | 1,119,996 | ||||||
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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) |
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Revenues: |
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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 | ||||||||||||||
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Total revenues |
61,969 | 9,335 | (1,733 | ) | 69,570 | |||||||||||
Expenses: |
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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 | ||||||||||||
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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 | ) | ||||||||||||
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Loss from continuing operations before income tax |
(27,736 | ) | 4,494 | (23,016 | ) | (46,258 | ) | |||||||||
Income tax benefit |
3,207 | 3,207 | ||||||||||||||
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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 | ||||||||||||||
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Net loss from continuing operations attributable to common stockholders |
$ | (12,381 | ) | $ | 4,494 | $ | (23,016 | ) | $ | (22,118 | ) | |||||
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Other comprehensive income/(loss): |
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Change in cash flow hedges attributable to redeemable non-controlling interest in operating partnership |
(50 | ) | (50 | ) | ||||||||||||
Change in cash flow hedges |
310 | 310 | ||||||||||||||
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Comprehensive loss attributable to common stockholders |
$ | (12,121 | ) | $ | (21,858 | ) | ||||||||||
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Net loss from continuing operations per share attributable to common stockholders basic and diluted |
$ | (0.58 | ) | $ | (0.94 | ) | ||||||||||
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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: |
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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 | ||||||||||||||
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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 | ||||||||||||||
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Total expenses |
101,845 | 9,588 | 21,321 | 132,754 | ||||||||||||
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Loss from operations |
(24,076 | ) | 9,467 | (22,860 | ) | (37,469 | ) | |||||||||
Other expense: |
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Interest expense, net |
(17,519 | ) | (4,964 | ) (e) | (22,483 | ) | ||||||||||
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Net loss |
(41,595 | ) | 9,467 | (27,824 | ) | (59,952 | ) | |||||||||
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|
|
|||||||||
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 |
Exhibit 23.1
JOEL SANDERS & COMPANY, P.A. | ||||
CERTIFIED PUBLIC ACCOUNTANTS | ||||
1301 SHOTGUN ROAD WESTON, FLORIDA 33326 ____________ |
||||
MEMBER: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS |
TEL: (954) 9162000 FACSIMILE: (954) 9162021 EMAIL: jscpa1 @ msn.com |
MEMBER: FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS |
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated September 16, 2013, with respect to the 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 for each of the three years in the period ended December 31, 2012 included in the Current Report on Form 8-K/A of Landmark Apartment Trust of America, Inc., as filed with the Securities and Exchange Commission on September 16, 2013. We hereby consent to the incorporation by reference of said report in the Registration Statement on Form S-3 (Registration No. 333-157375) of Landmark Apartment Trust of America, Inc.
JOEL SANDERS & COMPANY, P.A.
Weston, Florida
September 16, 2013