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| BRT > SEC Filings for BRT > Form 8-K on 22-Feb-2013 | All Recent SEC Filings |
22-Feb-2013
Financial Statements and Exhibits
(i) Independent Auditors' Report 1
(ii) Statements of Revenues and Certain Expenses for the year ended 2
December 31, 2011 and the nine months ended September 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 December 31, 2012 5
(ii) Pro Forma Consolidated Statement of Income:
For the year ended September 30, 2012 6
For the three months ended December 31, 2012 7
(iii) Notes to Pro Forma Consolidated Financial Statements 8
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(c) Exhibits
Exhibit No. Title of Exhibit
23.1 Consent of BDO USA, LLP dated February 22, 2013
To the Board of Trustees and Shareholders of BRT Realty Trust and Subsidiaries
We have audited the accompanying statement of revenues and certain expenses of the property located at 2121 Harrison Ave, Panama City, Florida ("Spring Valley Club Apartments") for the year ended December 31, 2011. The statement of revenues and certain expenses is the responsibility of 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 of America. 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 Spring Valley Club 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 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 Spring Valley Club 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 Spring Valley Club 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 Spring Valley Club Apartments for the year ended December 31, 2011, on the basis of accounting described in Note 2.
New York, New York
February 22, 2013
Spring Valley Club Apartments
Statements of Revenues and Certain Expenses
Nine Months Ended Year Ended
September 30, 2012 December 31, 2011
(unaudited)
Revenues:
Rental and other income $ 921,000 $ 1,340,000
Certain Expenses:
Real estate taxes 49,000 68,000
Management fees 36,000 47,000
Utilities 100,000 130,000
Payroll 131,000 185,000
Repairs and maintenance 124,000 148,000
Other real estate operating expenses 93,000 110,000
Total certain expenses 533,000 688,000
Revenues in excess of certain expenses $ 388,000 $ 652,000
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See Independent Auditors' report and accompanying notes.
Spring Valley Club Apartments Notes to Statements of Revenues and Certain Expenses
1. Organization
The property, located at 2121 Harrison Ave., Panama City, Florida ("Spring Valley Club Apartments"), is a 160-unit multi-family garden apartment complex.
BRT Realty Trust ("BRT" or the "Trust") is a business trust organized in Massachusetts. BRT (i) originates and holds for investment senior mortgage loans secured by commercial and multi-family real estate property in the United States, (ii) began participating, in fiscal 2012, as an equity investor in joint ventures that own and operate multi-family properties and (iii) owns and operates commercial and mixed use real estate assets, and in particular, development properties located in Newark, New Jersey.
On January 11, 2013, a consolidated joint venture comprised of TRB Spring Valley LLC, the Trust's wholly owned subsidiary and an unaffiliated joint venture partner, acquired Spring Valley Club Apartments for a purchase price of $7.2 million, including $5.6 million of mortgage debt.
2. Basis of Presentation and Significant Accounting Policies
The accompanying statements of revenues and certain expenses of Spring Valley Club 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. 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.
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 when due from tenants. Leases are generally for a one-year term and have no renewal options.
Income Taxes
Spring Valley Club Apartments was organized as a limited liability company and is not directly subject to federal or state taxes.
On November 15, 2012, a consolidated joint venture comprised of TRB Grove at Trinity LLC, a wholly owned subsidiary of the Trust, and an unaffiliated joint venture partner, acquired Grove at Trinity Pointe, a 464 unit, multi-family garden apartment complex located in Cordova, Tennessee ("Grove at Trinity Pointe"). The net purchase price was $25.5 million and included $19.25 million of mortgage debt.
On November 19, 2012, a consolidated joint venture comprised of TRB Avondale LLC, a wholly owned subsidiary of the Trust, and an unaffiliated joint venture partner, acquired Avondale Station Apartments, a 212 unit, multi-family garden apartment complex located in Decatur, Georgia ("Avondale Station Apartments"). The net purchase price was $10.45 million and included $8.0 million of mortgage debt.
On January 11, 2013, a consolidated joint venture comprised of TRB Spring Valley LLC, a wholly owned subsidiary of the Trust, and an unaffiliated joint venture partner, acquired Spring Valley Club Apartments, a 160-unit, multi-family garden apartment complex located in Panama City, Florida. The net purchase price was $7.2 million and included $5.6 million of mortgage debt.
The following unaudited pro forma consolidated balance sheet of the Trust as of December 31, 2012, has been prepared as if the acquisition of Spring Valley Club Apartments had been completed on December 31, 2012. The unaudited pro forma consolidated statement of income for the year ended September 30, 2012 is presented as if the acquisitions had been completed on October 1, 2011. The unaudited pro forma consolidated statement of income for the three months ended December 31, 2012 is presented as if the acquisition had been completed on October 1, 2012.
The unaudited pro forma consolidated statement of income for the three months ended December 31, 2012 have been adjusted to reflect the income and expense items of Grove At Trinity Pointe and Avondale Station Apartments ("previously reported acquisitions") from the date of acquisition through December 31, 2012.
These unaudited pro forma consolidated financial statements are presented for informational purposes only and should be read in conjunction with the Trust's 2012 Annual Report on Form 10-K for the year ended September 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, 2012, 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 - UNAUDITED CONSOLIDATED BALANCE SHEET
As of December 31, 2012
(Amounts in thousands, except per share data)
Purchase of Spring The Trust
The Trust Valley Pro Forma
Historical Club Apartments as Adjusted
ASSETS
Real estate properties, net of accumulated
depreciation of $6,072 $ 255,422 $ 7,200 $ 262,622
Real estate loans, all earning interest 71,257 - 71,257
Deferred fee income (1,056 ) - (1,056 )
70,201 70,201
Cash and cash equivalents 32,613 (1,456 ) 31,157
Restricted cash - construction holdbacks 49,597 - 49,597
Available-for-sale securities at market 1,226 - 1,226
Deferred costs, net 12,449 114 12,563
Prepaid expenses 5,110 - 5,110
Other assets 5,725 362 6,087
Total Assets $ 432,343 $ 6,220 $ 438,563
LIABILITIES AND EQUITY
Liabilities:
Mortgages payable $ 214,810 $ 5,588 $ 220,398
Junior subordinated notes 37,400 - 37,400
Accounts payable and accrued liabilities 4,611 39 4,650
Deposits payable 2,160 83 2,243
Deferred income 25,848 - 25,848
Total Liabilities 284,829 5,710 290,539
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, 13,473
issued 40,420 - 40,420
Additional paid-in capital 165,451 - 165,451
Accumulated other comprehensive income 344 344
Accumulated deficit (73,889 ) - (73,889 )
Total BRT Realty Trust shareholders'
equity 132,326 - 132,326
Non-controlling interests 15,188 510 15,698
Total Equity 147,514 510 148,024
Total Liabilities and Equity $ 432,343 $ 6,220 $ 438,563
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See accompanying notes to the unaudited pro forma consolidated financial statements
BRT REALTY TRUST AND SUBSIDIARIES
PRO FORMA - UNAUDITED CONSOLIDATED STATEMENT OF INCOME
For The Year Ended September 30, 2012
(Dollars in thousands, except share data)
Previously
Reported Purchase of The Trust Pro
The Trust Acquisitions Spring Valley Forma as
Historical (f) Club Apartments Adjusted
Revenues:
Rental and other revenue from real estate
properties $ 8,675 $ 5,907 $ 1,329 $ 15,911
Interest and fees on real estate loans 9,530 - - 9,530
Recovery of previously provided allowances 156 - - 156
Other income 1,218 - - 1,218
Total revenues 19,579 5,907 1,329 26,815
Expenses:
Interest expense 4,729 1,047 (a) 227 (e) 6,003
Advisor's fees, related party 1,104 130 (b) 26 (b) 1,260
Property acquisition costs 2,407 - - 2,407
General and administrative-including $705
to related party 7,161 - - 7,161
Operating expenses relating to real estate
properties 6,042 3,250 776 10,068
Depreciation and amortization 2,004 1,050 (c) 180 (c) 3,234
Total expenses 23,447 5,477 1,209 30,133
Total revenues less total expenses (3,868 ) 430 120 (3,318 )
Equity in earnings of unconsolidated
ventures 829 - - 829
Gain on sale of available-for-sale
securities 605 - - 605
Gain on sale of loan 3,192 - - 3,192
Income from continuing operations 758 430 120 1,308
Discontinued operations:
Gain on sale of real estate assets 792 - - 792
Net income 1,550 430 120 2,100
Plus: net loss (income) attributable to non
controlling interests 2,880 (112 )(d) (29 )(d) 2,739
Net income attributable to common
shareholders $ 4,430 $ 318 $ 91 $ 4,839
Basic and diluted per share amounts
attributable to common shareholders:
Income from continuing operations $ .26 $ . 02 $ .01 $ . 29
Discontinued operations .06 - - .06
Basic and diluted income per share $ .32 $ .02 $ .01 $ .35
Amounts attributable to BRT Realty Trust:
Income from continuing operations $ 3,638 $ 318 $ 91 $ 4,047
Discontinued operations 792 - - 792
Net income $ 4,430 $ 318 $ 91 $ 4,839
Weighted average number of common shares
outstanding:
Basic and diluted 14,035,792 14,035,792 14,035,792 14,035,792
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See accompanying notes to the unaudited pro forma consolidated financial statements.
BRT REALTY TRUST AND SUBSIDIARIES
PRO FORMA - UNAUDITED CONSOLIDATED STATEMENT OF INCOME
For The Three Months Ended December 31, 2012
(Dollars in thousands, except share data)
Previously Purchase of The Trust Pro
The Trust Reported Spring Valley Forma as
Historical Acqusitions(f) Club Apartments Adjusted
Revenues:
Rental and other revenue from real estate
properties $ 5,640 $ 761 $ 332 $ 6,733
Interest and fees on real estate loans 1,879 - - 1,878
Recovery of previously provided allowances 422 - - 422
Other income 310 - - 310
Total revenues 8,251 761 332 9,344
Expenses:
Interest expense 2,946 129 (a) 57 (e) 3,132
Advisor's fees, related party 374 17 (b) 7 (b) 397
Property acquisition costs 878 - - 878
General and administrative-including $205 to
related party 1,863 - - 1,863
Operating expenses relating to real estate
properties 3,146 499 194 3,839
Depreciation and amortization 1,287 174 (c) 45 (c) 1,506
Total expenses 10,494 817 302 11,614
Total revenues less total expenses (2,243 ) (57 ) 30 (2,270 )
Equity in earnings of unconsolidated
ventures 61 - - 61
Net (loss) income (2,182 ) (57 ) 30 (2,209 )
Plus: net loss (income) attributable to non
controlling interests 878 8 (d) (7 )(d) 879
Net (loss) income attributable to common
shareholders $ (1,304 ) $ (49 ) $ 23 $ (1,330 )
Basic and diluted per share amounts
attributable to common shareholders:
(Loss) income from continuing operations $ (.09 ) $ . 00 $ .00 $ (. 09 )
Discontinued operations - - - -
Basic and diluted (loss) income per share $ (.09 ) $ .00 $ .00 $ (.09 )
Amounts attributable to BRT Realty Trust:
(Loss) income from continuing operations $ (1,304 ) (49 ) $ 23 $ (1,330 )
Discontinued operations - - - -
Net (loss) income $ (1,304 ) $ (49 ) $ 23 $ (1,330 )
Weighted average number of common shares
outstanding:
Basic and diluted 14,053,362 14,053,362 $ 14,053,362 14,053,362
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