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BRT > SEC Filings for BRT > Form 8-K/A on 27-Nov-2012All Recent SEC Filings

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Form 8-K/A for BRT REALTY TRUST


27-Nov-2012

Financial Statements and Exhibits


Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired. Page

(i) Independent Auditors' Report 1

(ii) Statements of Revenues and Certain Expenses for the year ended 2 December 31, 2011 and the six months ended June 30, 2012

(iii) Notes to Statements of Revenues and Certain Expenses 3

(b) Unaudited Pro Forma Consolidated Financial Statements.

(i) Pro Forma Consolidated Balance Sheet as of June 30, 2012

(ii) Pro Forma consolidated Statements of Income: 5 For the nine months ended June 30, 2012 For the year ended September 30, 2011

(iii) Notes to Pro Forma Consolidated Financial Statements 8

(c) Exhibits

Exhibit No. Title of Exhibit
23.1 Consent of BDO USA, LLP dated November 27, 2012


Independent Auditors' Report

To the Board of Trustees and Stockholders of BRT Realty Trust and Subsidiaries

We have audited the accompanying statement of revenues and certain expenses of 8439 Dorchester Road ("Silvana Oaks Apartments") for the year ended December 31, 2011. The statement of revenues and certain expenses is the responsibility of the BRT Realty Trust's management. Our responsibility is to express an opinion on the statement of revenues and certain expenses based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Silvana Oaks Apartments' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in a Form 8-K/A of BRT Realty Trust. As described in Note 2, material amounts that would not be comparable to those resulting from the proposed future operations of Silvana Oaks Apartments are excluded from the statement of revenues and certain expenses and the statement of revenues and certain expenses is not intended to be a complete presentation of Silvana Oaks Apartments' revenues and expenses.

In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of Silvana Oaks Apartments for the year ended December 31, 2011, on the basis of accounting described in Note 2.

/s/BDO USA, LLP

New York, New York
November 27, 2012


8439 Dorchester Road Statements of Revenues and Certain Expenses

                                          Six Months Ended
                                           June 30, 2012            Year Ended
                                            (unaudited)          December 31, 2011
Revenues:
 Rental and other income                 $        1,160,000     $         2,238,000

Certain Expenses:
 Real estate taxes                                  146,000                 198,000
 Management fees                                     46,000                  90,000
 Utilities                                           61,000                 116,000
 Payroll                                             89,000                 179,000
 Other real estate operating expenses                90,000                 260,000
Total certain expenses                              432,000                 843,000

Revenues in excess of certain expenses   $          728,000     $         1,395,000

See Independent Auditors report and accompanying notes.


8439 Dorchester Road Notes to Statements of Revenues and Certain Expenses

1. Organization

8439 Dorchester Road ("Silvana Oaks Apartments") is a 208 unit multi-family garden apartment complex located in North Charleston, South Carolina.

BRT Realty Trust and subsidiaries (collectively, the "Trust") is a real estate investment trust. The Trust originates and holds for investment senior mortgage loans secured by commercial and multi-family real estate properties and participates as an equity investor in joint ventures which acquire multi-family residential or other real estate assets.

On October 4, 2012, a consolidated joint venture comprised of TRB Silvana LLC, the Trust's wholly owned subsidiary and an unaffiliated joint venture partner, acquired Silvana Oaks Apartments for a net purchase price of $21.5 million, including $17.7 million of mortgage debt.

2. Basis of Presentation and Significant Accounting Policies

The accompanying statements of revenues and certain expenses of Silvana Oaks Apartments have been prepared in accordance with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for inclusion in the Trust's Current Report on Form 8-K/A. Accordingly, the statements of revenues and certain expenses exclude certain expenses that may not be comparable to those expected to be incurred in the future operations of the aforementioned property. Items excluded consist of interest expense, depreciation, amortization, corporate expenses, and other costs not directly related to future operations.

In assessing Silvana Oak Apartments, the Trust considered the sources of revenue including, but not limited to, competitive factors present in the local market for residential rentals, the demographics of the area, the overall credit quality of the tenants and the local economic conditions and outlook. We also considered Silvana Oaks Apartments' expenses including, but not limited to, utility costs, tax rates and maintenance expenses.

Use of Estimates

The preparation of the statements of revenues and certain expenses in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the statements of revenues and certain expenses and accompanying notes. Actual results could differ from those estimates.

Revenue Recognition

Rental revenue is recognized on an accrual basis. Generally leases are for a one year term and have no renewal options.

Income Taxes

Silvana Oaks Apartments was organized as a limited liability company and is not directly subject to federal and state income taxes.


BRT REALTY TRUST
Pro Forma Consolidated Financial Statements
(Unaudited)

On October 4, 2012, a consolidated joint venture composed of TRB Silvana LLC, a wholly owned subsidiary of the Trust, and an unaffiliated joint venture partner, acquired Silvana Oaks Apartments, a 208 unit, multi-family garden apartment complex located in North Charleston, South Carolina. The net purchase price was $21.5 million and included $17.7 million of mortgage debt.

On June 20, 2012, a consolidated joint venture comprised of TRB Schilling LLC, a wholly owned subsidiary of the Trust and an unaffiliated joint venture partner, acquired Madison at Schilling Farms, a 325-unit, multi-family garden apartment complex located in Collierville, Tennessee. The net purchase price was $32.1 million and included $25.7 million of mortgage debt.

On March 22, 2012, a consolidated joint venture comprised of TRB Union Palm, LLC, a wholly owned subsidiary of the Trust, and an unaffiliated joint venture partner, acquired Union Square, a 542-unit, multi-family garden apartment complex located in Palm Beach Gardens, Florida. The net purchase price was $59.4 million and included $45.2 million of mortgage debt.

The following unaudited pro forma consolidated balance sheet of the Trust as of June 30, 2012, has been prepared as if the acquisitions had been completed on June 30, 2012. The unaudited pro forma consolidated statements of income for the year ended September 30, 2011 are presented as if the acquisitions had been completed on October 1, 2010. The unaudited pro forma consolidated statements of income for the nine months ended June 30, 2012 are presented as if the acquisition had been completed on October 1, 2011.

The pro forma statement of income for the nine months ended June 30, 2012 has been adjusted to reflect the income and expense items of Union Square that have been reported in the Trust historical column as the property was purchased in March 2012.

These pro forma consolidated financial statements are presented for informational purposes only and should be read in conjunction with (a) the Trust's 2011 Annual Report on Form 10-K and (b) the Trust's Quarterly Report on Form 10-Q for the nine months ended June 30, 2012.

The unaudited pro forma consolidated financial statements are based on assumptions and estimates considered appropriate by the Trust's management; however, such statements do not purport to represent what the Trust's financial position and results of operations would have been assuming the completion of the acquisition on October 1, 2010, nor do they purport to project the Trust's financial position and results of operations at any future date or for any future period.

In the opinion of the Trust's management, all adjustments necessary to reflect the effects of the transactions described above have been included in the pro forma consolidated financial statements.


                       BRT REALTY TRUST AND SUBSIDIARIES
                     PRO FORMA - CONSOLIDATED BALANCE SHEET
                        As of June 30, 2012 (Unaudited)
                 (Amounts in thousands, except per share data)

                                                                       Purchase of         The Trust
                                                      The Trust        Silvana Oaks        Pro Forma
                                                      Historical        Apartments        As Adjusted
ASSETS

Real estate loans, all earning interest              $     65,780                  -     $      65,780
Deferred fee income                                          (927 )                -              (927 )
                                                           64,853                  -            64,853
Real estate properties, net of accumulated
depreciation of $3,940                                    166,786     $       21,500           188,286
Investment in unconsolidated ventures                       3,914                  -             3,914
Cash and cash equivalents                                  42,969             (4,160 )          38,809
Restricted cash - construction holdbacks                   30,276                  -            30,276
Available-for-sale securities at market                     1,849                  -             1,849
Deferred costs                                              9,055                233             9,288
Other assets                                               10,051                948            10,999
Total Assets                                         $    329,753     $       18,521     $     348,274

LIABILITIES AND EQUITY
Liabilities:
Mortgages payable                                    $    125,702     $       17,716     $     143,418
Junior subordinated notes                                  37,400                  -            37,400
Accounts payable and accrued liabilities                    2,868                315             3,183
Deposits payable                                            2,724                  -             2,724
  Deferred income                                          16,080                  -            16,080
    Total Liabilities                                     184,774             18,031           202,805

  Commitments and contingencies                                 -                  -                 -

Equity:
BRT Realty Trust shareholders' equity:
  Preferred shares, $1 par value:
    Authorized 10,000 shares, none issued                       -                  -                 -
    Shares of beneficial interest, $3 par value:
    Authorized number of shares, unlimited, 13,924
issued                                                     41,772                  -            41,772
    Additional paid-in capital                            167,227                  -           167,227
    Accumulated other comprehensive income-net
unrealized gain on available-for-sale securities              436                  -               436
    Accumulated deficit                                   (74,311 )                -           (74,311 )
    Cost of 451 treasury shares of beneficial
interest                                                   (3,505 )                -            (3,505 )
        Total BRT Realty Trust shareholders'
equity                                                    131,619                              131,619
Non-controlling interests                                  13,360                490            13,850
    Total Equity                                          144,979                490           145,469
       Total Liabilities and Equity                  $    329,753     $       18,521     $     348,274

See accompanying notes to the unaudited pro forma consolidated financial statements


                       BRT REALTY TRUST AND SUBSIDIARIES
                  PRO FORMA - CONSOLIDATED STATEMENT OF INCOME
                    For the Nine Months Ended June 30, 2012
                                  (Unaudited)
                   (Amounts in thousands, except share data)

                                                                 Purchase of
                                                               Union Square and          Purchase of            The Trust
                                               The Trust          Madison at            Silvana Oaks            Pro Forma
                                              Historical        Shilling Farms           Apartments            As Adjusted

Revenues:
Interest on real estate loans                $       5,628                    -                      -        $       5,628
Loan fee income                                      1,388                    -                      -                1,388
Rental revenue from real estate properties           4,455     $          8,960        $         1,841               15,256
Recovery of previously provided allowances              19                    -                      -                   19
Other, primarily investment income                     906                    -                      -                  906
Total revenues                                      12,396                8,960                  1,841               23,197
Expenses:
Interest on borrowed funds                           2,758                2,349 (a)                523 (e)            5,630
Advisor's fees, related party                          777                  361 (b)                 76 (b)            1,214
Property acquisition costs                           2,264                    -                      -                2,264
General and administrative-including $481
to related party                                     5,414                    -                      -                5,414
Operating expenses relating to real estate
properties                                           3,478                3,897                    746                8,121
Amortization and depreciation                        1,441                2,054 (c)                497 (c)            3,992
Total expenses                                      16,132                8,661                  1,842               26,635
Total revenues less total expenses                  (3,736 )                299                     (1 )             (3,438 )
Equity in loss of unconsolidated ventures              (95 )                  -                      -                  (95 )
Gain on sale of available-for-sale
securities                                             420                    -                      -                  420
Gain on sale of loan                                 3,192                    -                      -                3,192
Income (loss) from continuing operations              (219 )                299                     (1 )                 79

Discontinued operations:
Gain on sale of real estate assets                     792                    -                      -                  792
Net income                                             573                  299                     (1 )                871
Plus: net loss (income) attributable to
non controlling interests                            2,131                 (132 )(d)                (8 )(f)           1,991
  Net income attributable to common
shareholders                                 $       2,704     $            167        $            (9 )      $       2,862

Basic and diluted per share amounts
attributable to common shareholders:
Income from continuing operations            $         .13     $            .02        $             -        $         .15
Discontinued operations                                .06                    -                      -                  .06
Basic and diluted income per share           $         .19     $            .02        $             -        $         .21

Amounts attributable to BRT Realty Trust:
 Income from continuing operations           $       1,912     $            167        $            (9 )      $       2,070
 Discontinued operations                               792                    -                      -                  792
Net income                                   $       2,704     $            167        $            (9 )      $       2,862

Weighted average number of common shares
outstanding:
Basic and diluted                               14,029,364           14,029,364             14,029,364           14,029,364

See accompanying notes to the unaudited pro forma consolidated financial statements


                       BRT REALTY TRUST AND SUBSIDIARIES
                  PRO FORMA - CONSOLIDATED STATEMENT OF INCOME
                     For The Year Ended September 30, 2011
                   (Dollars in thousands, except share data)

                                                               Purchase of
                                                               Union Square
                                                               and Madison at          Purchase of
                                             The Trust         Schilling              Silvana Oaks          The Trust Pro
                                             Historical        Farms                   Apartments           Forma as
                                             (Audited)         (Unaudited)             (Unaudited)          Adjusted
Revenues:
Interest on real estate loans an purchase
money mortgage                               $       8,500                  -                      -        $       8,500
Loan fee income                                      1,828                  -                      -                1,828
Rental revenue from real estate properties           3,456     $       10,307        $         2,455               16,218
Recovery of previously provided allowances           3,595                  -                      -                3,595
Other, primarily investment income                     502                  -                      -                  502
Total revenues                                      17,881             10,307                  2,455               30,643
Expenses:
Interest on borrowed funds                           2,112              2,725 (a)                697 (e)            5,534
Advisor's fees, related party                          916                549 (b)                118 (b)            1,583
Foreclosure related professional fees                  579                  -                                         579
General and administrative-including $847
to related party                                     6,149                  -                                       6,149
Operating expenses relating to real estate
properties                                           3,340              4,626                    995                8,961
Amortization and depreciation                          738              2,764 (c)                663 (c)            4,165
Total expenses                                      13,834             10,664                  2,473               26,971
Total revenues less total expenses                   4,047               (357 )                  (18 )              3,672
Equity in earnings of unconsolidated
ventures                                               350                  -                      -                  350
Gain on sale of available-for-sale
securities                                           1,319                  -                      -                1,319
Loss on extinguishment of debt                      (2,138 )                -                      -               (2,138 )
Income (loss) from continuing operations             3,578               (357 )                  (18 )              3,203

Discontinued operations:
Gain on sale of real estate assets                   1,346                  -                      -                1,346
Net income (loss)                                    4,924               (357 )                  (18 )              4,549
Plus: net loss (income) attributable to
non controlling interests                            1,450                (38 )(d)               (10 )(f)           1,402
  Net income (loss) attributable to common
shareholders                                 $       6,374     $         (395 )      $           (28 )      $       5,951

Basic and diluted per share amounts
attributable to common shareholders:
Income (loss) from continuing operations     $         .35     $         (.03 )      $             -        $        . 32
Discontinued operations                                .10                  -                      -                  .10
Basic and diluted income (loss) per share    $         .45     $         (.03 )      $             -        $         .42

Amounts attributable to BRT Realty Trust:
 Income (loss) from continuing operations    $       5,028     $         (395 )      $           (28 )      $       4,605
 Discontinued operations                             1,346                  -                      -                1,346
Net income (loss)                            $       6,374     $         (395 )      $           (28 )      $       5,951

Weighted average number of common shares
outstanding:
Basic and diluted                               14,041,509         14,041,509             14,041,509           14,041,509

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