DALLAS, Feb. 13, 2018 /PRNewswire/ -- NexPoint
Residential Trust, Inc. (NYSE:NXRT) reported financial results for
the fourth quarter and year ended December
31, 2017.
Highlights
- NXRT reported Net Income, FFO1, Core FFO1
and AFFO1 of $53.4M,
$25.1M, $30.4M and $35.1M,
respectively, attributable to common stockholders for the year
ended December 31, 2017.
- For the year ended December 31,
2017, 2016-2017 Same Store properties average effective
rent, total revenue and NOI1 increased 4.4%, 7.0% and
8.6%, respectively, over the prior year period.
- The weighted average effective monthly rent per unit across all
33 properties held as of December 31,
2017 (the "Portfolio"), consisting of 11,775 units, was
$948, while physical occupancy was
93.8%.
- NXRT paid a fourth quarter dividend of $0.25 per share of common stock on December 29, 2017; this cash dividend represented
a $0.03 per share, or 13.6% increase,
over the prior quarter's dividend.
- During the fourth quarter, NXRT acquired Atera Apartments, a
380-unit property in Dallas, Texas
for $59.2 million.
- During the fourth quarter, NXRT used proceeds from the sale of
The Arbors, The Crossings, The Crossings at Holcomb Bridge and The
Knolls (the "NAVA Portfolio") to pay down approximately
$46.0 million on the bridge facility
with KeyBank National Association (the "2017 Bridge
Facility").
- During 2017, for the properties in our Portfolio, NXRT
completed 1,408 full and partial interior upgrades and leased 1,246
upgraded units, achieving $89 average
monthly rent premiums and a 22.0% ROI. Since inception, for the
properties in our Portfolio, we have completed 4,374 full and
partial upgrades and achieved a $90
average monthly rental increase per unit, equating to a 21.0% ROI
on all units leased as of December 31,
2017.
- During 2017, NXRT repurchased 104,361 shares of its common
stock at a total cost of approximately $2,435,000, or $23.33 per share. As of December 31, 2017, NXRT had repurchased a total
of 354,517 shares of its common stock at a total cost of
approximately $7,022,000, or
$19.81 per share.
- Our seven interest rate swap agreements have effectively fixed
the interest rate on $650.0 million,
or approximately 92%, of our $703.1
million of floating rate mortgage debt outstanding as of
December 31, 2017. As of December 31, 2017, the adjusted weighted average
interest rate of our total indebtedness was 3.24%.
"2017 symbolized a year of transformation, achievement, and
strategic positioning to further bolster the future growth and
development of NXRT. We worked diligently to fortify the Company's
balance sheet – favorably refinancing over $500 million of mortgage debt and adding
$250 million of floating rate hedge
positions, reducing our floating rate exposure to <10% of total
mortgage debt. We continued to execute our internal growth
strategies; harvesting gains and recycling capital into
well-located assets in our core markets of Dallas, Houston and Atlanta; distributing $19.3 million in dividends; buying back over
100,000 shares at discounts to our Net Asset Value estimate; and
generating 20%+ ROIs on unit upgrades," stated NXRT Chairman and
President, Jim Dondero. "We are also
pleased to report superior same store performance for Q4 and full
year 2017. Moving forward in 2018, we maintain a core focus on
creating value – for our residents, for our communities, and for
our shareholders."
Full Year 2017 Financial Results
- Total revenues were $144.2
million for the full year 2017, compared to $132.8 million for the full year 2016.
- Net income for the full year 2017 totaled $56.4 million, or earnings of $2.49 per diluted share, which included
$78.4 million of gain on sales of
real estate and $48.8 million of
depreciation and amortization expense. This compared to net income
of $25.9 million, or $1.03 per diluted share, for the full year 2016,
which included $25.9 million of gain
on sales of real estate and $35.6
million of depreciation and amortization expense.
- The change in our net income between the periods primarily
relates to increases in gain on sales of real estate and same store
operating results, and was partially offset by increases in
depreciation and amortization expense, interest expense and loss on
extinguishment of debt and modification costs. The change in our
net income between the periods was also due to our acquisition and
disposition activity in 2016 and 2017 and the timing of the
transactions.
- For the full year 2017, NOI¹ was $76.6
million, compared to $69.7
million for the full year 2016.
- For the full year 2017, Same Store NOI¹ increased 8.6% to
$55.0 million, compared to
$50.7 million for the full year
2016.
- For the full year 2017, FFO¹ totaled $25.1 million, or $1.17 per diluted share, compared to $31.0 million, or $1.46 per diluted share, for the full year
2016.
- For the full year 2017, Core FFO¹ totaled $30.4 million, or $1.42 per diluted share, compared to $31.3 million, or $1.47 per diluted share, for the full year
2016.
- For the full year 2017, AFFO¹ totaled $35.1 million, or $1.64 per diluted share, compared to $33.5 million, or $1.57 per diluted share, for the full year
2016.
Fourth Quarter 2017 Financial Results
- Total revenues were $34.9 million
for the fourth quarter of 2017, compared to $32.6 million for the fourth quarter of
2016.
- Net loss for the fourth quarter of 2017 totaled $(4.3) million, or a loss of $(0.21) per share, which included depreciation
and amortization expense of $12.9
million. This compared to net income of $0.2 million, or $0.01 per diluted share, for the fourth quarter
of 2016, which included depreciation and amortization expense of
$9.3 million.
- The change in our net income (loss) between the periods
primarily relates to increases in depreciation and amortization
expense and interest expense.
- For the fourth quarter of 2017, NOI¹ was $19.3 million, compared to $17.5 million for the fourth quarter of
2016.
- For the fourth quarter of 2017, Same Store NOI¹ increased 10.5%
to $14.9 million, compared to
$13.4 million for the fourth quarter
of 2016.
- For the fourth quarter of 2017, FFO¹ totaled $8.5 million, or $0.40 per diluted share, compared to $8.3 million, or $0.39 per diluted share, for the fourth quarter
of 2016.
- For the fourth quarter of 2017, Core FFO¹ totaled $8.4 million, or $0.39 per diluted share, compared to $7.3 million, or $0.34 per diluted share, for the fourth quarter
of 2016.
- For the fourth quarter of 2017, AFFO¹ totaled $9.5 million, or $0.44 per diluted share, compared to $8.1 million, or $0.38 per diluted share, for the fourth quarter
of 2016.
|
|
1.
|
FFO, Core FFO, AFFO
and NOI are non-GAAP measures. For reconciliations of FFO, Core
FFO, AFFO and NOI to net income, and a discussion of why we
consider these non-GAAP measures useful, see the "Definitions and
Reconciliations" section of this release.
|
|
|
2016-2017 Same Store Results of Operations for the
Years Ended December 31, 2017 and
2016
There are 26 properties encompassing 8,871 units of apartment
space in our same store pool for the years ended December 31, 2017 and 2016 (our "2016-2017 Same
Store" properties). As of December 31,
2017, our 2016-2017 Same Store properties were approximately
94.0% leased with a weighted average monthly effective rent per
occupied apartment unit of $901. As
of December 31, 2016, our 2016-2017
Same Store properties were approximately 93.6% leased with a
weighted average monthly effective rent per occupied apartment unit
of $863.
The following table reflects the revenues, property operating
expenses and NOI for the years ended December 31, 2017
and 2016 for our 2016-2017 Same Store and Non-Same Store properties
(dollars in thousands):
|
For the Year Ended
December 31,
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
$
Change
|
|
|
%
Change
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
$
|
87,677
|
|
|
$
|
82,509
|
|
|
$
|
5,168
|
|
|
|
6.3
|
%
|
Other
income
|
|
13,849
|
|
|
|
12,415
|
|
|
|
1,434
|
|
|
|
11.6
|
%
|
Same Store
revenues
|
|
101,526
|
|
|
|
94,924
|
|
|
|
6,602
|
|
|
|
7.0
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
37,346
|
|
|
|
32,910
|
|
|
|
4,436
|
|
|
|
13.5
|
%
|
Other
income
|
|
5,363
|
|
|
|
5,014
|
|
|
|
349
|
|
|
|
7.0
|
%
|
Non-Same Store
revenues
|
|
42,709
|
|
|
|
37,924
|
|
|
|
4,785
|
|
|
|
12.6
|
%
|
Total
revenues
|
|
144,235
|
|
|
|
132,848
|
|
|
|
11,387
|
|
|
|
8.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses (1)
|
|
27,554
|
|
|
|
26,386
|
|
|
|
1,168
|
|
|
|
4.4
|
%
|
Real estate taxes and
insurance
|
|
12,300
|
|
|
|
11,518
|
|
|
|
782
|
|
|
|
6.8
|
%
|
Property management
fees (2)
|
|
3,051
|
|
|
|
2,851
|
|
|
|
200
|
|
|
|
7.0
|
%
|
Property general and
administrative expenses (3)
|
|
3,575
|
|
|
|
3,475
|
|
|
|
100
|
|
|
|
2.9
|
%
|
Same Store
operating expenses
|
|
46,480
|
|
|
|
44,230
|
|
|
|
2,250
|
|
|
|
5.1
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses (4)
|
|
11,583
|
|
|
|
11,699
|
|
|
|
(116)
|
|
|
|
-1.0
|
%
|
Real estate taxes and
insurance
|
|
6,861
|
|
|
|
4,544
|
|
|
|
2,317
|
|
|
|
51.0
|
%
|
Property management
fees (2)
|
|
1,279
|
|
|
|
1,132
|
|
|
|
147
|
|
|
|
13.0
|
%
|
Property general and
administrative expenses (5)
|
|
1,454
|
|
|
|
1,523
|
|
|
|
(69)
|
|
|
|
-4.5
|
%
|
Non-Same Store
operating expenses
|
|
21,177
|
|
|
|
18,898
|
|
|
|
2,279
|
|
|
|
12.1
|
%
|
Total operating
expenses
|
|
67,657
|
|
|
|
63,128
|
|
|
|
4,529
|
|
|
|
7.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
55,046
|
|
|
|
50,694
|
|
|
|
4,352
|
|
|
|
8.6
|
%
|
Non-Same
Store
|
|
21,532
|
|
|
|
19,026
|
|
|
|
2,506
|
|
|
|
13.2
|
%
|
Total NOI
(6)
|
$
|
76,578
|
|
|
$
|
69,720
|
|
|
$
|
6,858
|
|
|
|
9.8
|
%
|
|
|
(1)
|
For the years ended
December 31, 2017 and 2016, excludes approximately $(306,000) and
$61,000, respectively, of casualty-related
expenses/(recoveries).
|
(2)
|
Fees incurred to an
unaffiliated third party that is an affiliate of the noncontrolling
limited partner of NexPoint Residential Trust Operating
Partnership, L.P. (the "OP").
|
(3)
|
For the years ended
December 31, 2017 and 2016, excludes approximately $809,000 and
$628,000, respectively, of expenses that are not reflective of the
continuing operations of the properties or are incurred on our
behalf at the property for expenses such as legal, professional and
franchise tax fees.
|
(4)
|
For the years ended
December 31, 2017 and 2016, excludes approximately $19,000 and
$90,000, respectively, of casualty-related expenses.
|
(5)
|
For the years ended
December 31, 2017 and 2016, excludes approximately $321,000 and
$251,000, respectively, of expenses that are not reflective of the
continuing operations of the properties or are incurred on our
behalf at the property for expenses such as legal, professional and
franchise tax fees.
|
(6)
|
For additional
information regarding NOI, see the "Definitions and
Reconciliations" section of this release.
|
2015-2017 Same Store Results of Operations for the Years
Ended December 31, 2017, 2016 and
2015
There are 17 properties encompassing 5,546 units of apartment
space in our same store pool for the years ended December 31, 2017, 2016 and 2015 (our "2015-2017
Same Store" properties). As of December 31,
2017, our 2015-2017 Same Store properties were approximately
94.4% leased with a weighted average monthly effective rent per
occupied apartment unit of $923. As
of December 31, 2016, our 2015-2017
Same Store properties were approximately 94.1% leased with a
weighted average monthly effective rent per occupied apartment unit
of $885. As of December 31, 2015, our 2015-2017 Same Store
properties were approximately 94.9% leased with a weighted average
monthly effective rent per occupied apartment unit of $827.
The following table reflects the revenues, property operating
expenses and NOI for the years ended December 31, 2017,
2016 and 2015 for our 2015-2017 Same Store and Non-Same Store
properties (dollars in thousands):
|
For the Year Ended
December 31,
|
|
|
2017 compared to
2016
|
|
|
2016 compared to
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
$
Change
|
|
|
%
Change
|
|
|
$
Change
|
|
|
%
Change
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
$
|
56,438
|
|
|
$
|
53,139
|
|
|
$
|
49,026
|
|
|
$
|
3,299
|
|
|
|
6.2
|
%
|
|
$
|
4,113
|
|
|
|
8.4
|
%
|
Other
income
|
|
8,342
|
|
|
|
7,579
|
|
|
|
6,382
|
|
|
|
763
|
|
|
|
10.1
|
%
|
|
|
1,197
|
|
|
|
18.8
|
%
|
Same Store
revenues
|
|
64,780
|
|
|
|
60,718
|
|
|
|
55,408
|
|
|
|
4,062
|
|
|
|
6.7
|
%
|
|
|
5,310
|
|
|
|
9.6
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
68,585
|
|
|
|
62,280
|
|
|
|
54,778
|
|
|
|
6,305
|
|
|
|
10.1
|
%
|
|
|
7,502
|
|
|
|
13.7
|
%
|
Other
income
|
|
10,870
|
|
|
|
9,850
|
|
|
|
7,472
|
|
|
|
1,020
|
|
|
|
10.4
|
%
|
|
|
2,378
|
|
|
|
31.8
|
%
|
Non-Same Store
revenues
|
|
79,455
|
|
|
|
72,130
|
|
|
|
62,250
|
|
|
|
7,325
|
|
|
|
10.2
|
%
|
|
|
9,880
|
|
|
|
15.9
|
%
|
Total
revenues
|
|
144,235
|
|
|
|
132,848
|
|
|
|
117,658
|
|
|
|
11,387
|
|
|
|
8.6
|
%
|
|
|
15,190
|
|
|
|
12.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses (1)
|
|
17,606
|
|
|
|
16,779
|
|
|
|
15,741
|
|
|
|
827
|
|
|
|
4.9
|
%
|
|
|
1,038
|
|
|
|
6.6
|
%
|
Real estate taxes and
insurance
|
|
7,878
|
|
|
|
7,320
|
|
|
|
7,254
|
|
|
|
558
|
|
|
|
7.6
|
%
|
|
|
66
|
|
|
|
0.9
|
%
|
Property management
fees (2)
|
|
1,947
|
|
|
|
1,823
|
|
|
|
1,651
|
|
|
|
124
|
|
|
|
6.8
|
%
|
|
|
172
|
|
|
|
10.4
|
%
|
Property general and
administrative expenses (3)
|
|
2,257
|
|
|
|
2,151
|
|
|
|
1,973
|
|
|
|
106
|
|
|
|
4.9
|
%
|
|
|
178
|
|
|
|
9.0
|
%
|
Same Store
operating expenses
|
|
29,688
|
|
|
|
28,073
|
|
|
|
26,619
|
|
|
|
1,615
|
|
|
|
5.8
|
%
|
|
|
1,454
|
|
|
|
5.5
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses (4)
|
|
21,531
|
|
|
|
21,306
|
|
|
|
18,486
|
|
|
|
225
|
|
|
|
1.1
|
%
|
|
|
2,820
|
|
|
|
15.3
|
%
|
Real estate taxes and
insurance
|
|
11,283
|
|
|
|
8,742
|
|
|
|
7,977
|
|
|
|
2,541
|
|
|
|
29.1
|
%
|
|
|
765
|
|
|
|
9.6
|
%
|
Property management
fees (2)
|
|
2,383
|
|
|
|
2,160
|
|
|
|
1,850
|
|
|
|
223
|
|
|
|
10.3
|
%
|
|
|
310
|
|
|
|
16.8
|
%
|
Property general and
administrative expenses (5)
|
|
2,772
|
|
|
|
2,847
|
|
|
|
2,319
|
|
|
|
(75)
|
|
|
|
-2.6
|
%
|
|
|
528
|
|
|
|
22.8
|
%
|
Non-Same Store
operating expenses
|
|
37,969
|
|
|
|
35,055
|
|
|
|
30,632
|
|
|
|
2,914
|
|
|
|
8.3
|
%
|
|
|
4,423
|
|
|
|
14.4
|
%
|
Total operating
expenses
|
|
67,657
|
|
|
|
63,128
|
|
|
|
57,251
|
|
|
|
4,529
|
|
|
|
7.2
|
%
|
|
|
5,877
|
|
|
|
10.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
35,092
|
|
|
|
32,645
|
|
|
|
28,789
|
|
|
|
2,447
|
|
|
|
7.5
|
%
|
|
|
3,856
|
|
|
|
13.4
|
%
|
Non-Same
Store
|
|
41,486
|
|
|
|
37,075
|
|
|
|
31,618
|
|
|
|
4,411
|
|
|
|
11.9
|
%
|
|
|
5,457
|
|
|
|
17.3
|
%
|
Total NOI
(6)
|
$
|
76,578
|
|
|
$
|
69,720
|
|
|
$
|
60,407
|
|
|
$
|
6,858
|
|
|
|
9.8
|
%
|
|
$
|
9,313
|
|
|
|
15.4
|
%
|
|
|
(1)
|
For the years ended
December 31, 2017, 2016 and 2015, excludes approximately $56,000,
$39,000 and $12,000, respectively, of casualty-related
expenses.
|
(2)
|
Fees incurred to an
unaffiliated third party that is an affiliate of the noncontrolling
limited partner of the OP.
|
(3)
|
For the years ended
December 31, 2017, 2016 and 2015, excludes approximately $638,000,
$477,000 and $638,000, respectively, of expenses that are not
reflective of the continuing operations of the properties or are
incurred on our behalf at the property for expenses such as legal,
professional and franchise tax fees.
|
(4)
|
For the years ended
December 31, 2017, 2016 and 2015, excludes approximately
$(343,000), $112,000 and $13,000, respectively, of casualty-related
expenses/(recoveries).
|
(5)
|
For the years ended
December 31, 2017, 2016 and 2015, excludes approximately $492,000,
$402,000 and $471,000, respectively, of expenses that are not
reflective of the continuing operations of the properties or are
incurred on our behalf at the property for expenses such as legal,
professional and franchise tax fees.
|
(6)
|
For additional
information regarding NOI, see the "Definitions and
Reconciliations" section of this release.
|
Q4 Same Store Results of Operations for the Three
Months Ended December 31, 2017 and
2016
There are 27 properties encompassing 9,088 units of apartment
space in our same store pool for the three months ended
December 31, 2017 and 2016 (our "Q4
Same Store" properties). As of December 31,
2017, our Q4 Same Store properties were approximately 94.0%
leased with a weighted average monthly effective rent per occupied
apartment unit of $908. As of
December 31, 2016, our Q4 Same Store
properties were approximately 93.6% leased with a weighted average
monthly effective rent per occupied apartment unit of $869.
The following table reflects the revenues, property operating
expenses and NOI for the three months ended December 31,
2017 and 2016 for our Q4 Same Store and Non-Same Store properties
(dollars in thousands):
|
For the Three
Months Ended December 31,
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
$
Change
|
|
|
%
Change
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
$
|
23,072
|
|
|
$
|
21,595
|
|
|
$
|
1,477
|
|
|
|
6.8
|
%
|
Other
income
|
|
3,515
|
|
|
|
3,318
|
|
|
|
197
|
|
|
|
5.9
|
%
|
Same Store
revenues
|
|
26,587
|
|
|
|
24,913
|
|
|
|
1,674
|
|
|
|
6.7
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
7,387
|
|
|
|
6,418
|
|
|
|
969
|
|
|
|
15.1
|
%
|
Other
income
|
|
939
|
|
|
|
1,270
|
|
|
|
(331)
|
|
|
|
-26.1
|
%
|
Non-Same Store
revenues
|
|
8,326
|
|
|
|
7,688
|
|
|
|
638
|
|
|
|
8.3
|
%
|
Total
revenues
|
|
34,913
|
|
|
|
32,601
|
|
|
|
2,312
|
|
|
|
7.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses (1)
|
|
7,158
|
|
|
|
6,898
|
|
|
|
260
|
|
|
|
3.8
|
%
|
Real estate taxes and
insurance
|
|
2,866
|
|
|
|
2,936
|
|
|
|
(70)
|
|
|
|
-2.4
|
%
|
Property management
fees (2)
|
|
800
|
|
|
|
749
|
|
|
|
51
|
|
|
|
6.8
|
%
|
Property general and
administrative expenses (3)
|
|
901
|
|
|
|
881
|
|
|
|
20
|
|
|
|
2.3
|
%
|
Same Store
operating expenses
|
|
11,725
|
|
|
|
11,464
|
|
|
|
261
|
|
|
|
2.3
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses (4)
|
|
2,017
|
|
|
|
2,331
|
|
|
|
(314)
|
|
|
|
-13.5
|
%
|
Real estate taxes and
insurance
|
|
1,384
|
|
|
|
800
|
|
|
|
584
|
|
|
|
73.0
|
%
|
Property management
fees (2)
|
|
250
|
|
|
|
227
|
|
|
|
23
|
|
|
|
10.1
|
%
|
Property general and
administrative expenses (5)
|
|
276
|
|
|
|
271
|
|
|
|
5
|
|
|
|
1.8
|
%
|
Non-Same Store
operating expenses
|
|
3,927
|
|
|
|
3,629
|
|
|
|
298
|
|
|
|
8.2
|
%
|
Total operating
expenses
|
|
15,652
|
|
|
|
15,093
|
|
|
|
559
|
|
|
|
3.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
14,862
|
|
|
|
13,449
|
|
|
|
1,413
|
|
|
|
10.5
|
%
|
Non-Same
Store
|
|
4,399
|
|
|
|
4,059
|
|
|
|
340
|
|
|
|
8.4
|
%
|
Total NOI
(6)
|
$
|
19,261
|
|
|
$
|
17,508
|
|
|
$
|
1,753
|
|
|
|
10.0
|
%
|
|
|
(1)
|
For the three months
ended December 31, 2017 and 2016, excludes approximately $82,000
and $52,000, respectively, of casualty-related expenses.
|
(2)
|
Fees incurred to an
unaffiliated third party that is an affiliate of the noncontrolling
limited partner of the OP.
|
(3)
|
For the three months
ended December 31, 2017 and 2016, excludes approximately $188,000
and $181,000, respectively, of expenses that are not reflective of
the continuing operations of the properties or are incurred on our
behalf at the property for expenses such as legal, professional and
franchise tax fees.
|
(4)
|
For the three months
ended December 31, 2017 and 2016, excludes approximately $(18,000)
and $8,000, respectively, of casualty-related
expenses/(recoveries).
|
(5)
|
For the three months
ended December 31, 2017 and 2016, excludes approximately $38,000
and $71,000, respectively, of expenses that are not reflective of
the continuing operations of the properties or are incurred on our
behalf at the property for expenses such as legal, professional and
franchise tax fees.
|
(6)
|
For additional
information regarding NOI, see the "Definitions and
Reconciliations" section of this release.
|
Acquisition of Property
On October 25, 2017, NXRT acquired
Atera Apartments, a 380-unit property in Dallas, TX for $59.2
million. NXRT acquired Atera Apartments using approximately
$17.0 million of cash on hand and
$14.1 million of proceeds from the
NAVA Portfolio, which related to the sale of The Crossings at
Holcomb Bridge, in the opening leg of a 1031 Exchange. NXRT
completed the reverse portion of the 1031 Exchange of Atera
Apartments with the sale of Timberglen on January 31, 2018 (see "Subsequent Events" below).
This is NXRT's eleventh acquisition in Dallas, expanding its footprint in the market
to 3,556 units and bringing its total portfolio to 33 properties
consisting of 11,775 units in 10 markets as of December 31, 2017.
For the full year 2017, NXRT completed three acquisitions
totaling 1,348 units for a combined gross purchase price of
$197.2 million.
Disposition of Property
As previously reported, NXRT completed the disposition of nine
properties during the year, totaling 2,538 units, for net cash
proceeds of $224.4 million, before
debt repayments. The combined returns totaled an IRR of
approximately 46% and a 2.73x multiple on invested
capital1.
(1)
|
We define a "multiple
on invested capital" as the total return to NXRT (inclusive of the
Company's share of property distributions and net cash proceeds
from sale, less mortgage debt repaid) divided by NXRT's total
capital investment in the properties.
|
Value-Add Programs
For the properties in our Portfolio as of December 31, 2017, we completed full and partial
renovations on 1,408 units in 2017 at an average cost of
$4,897 per renovated unit. Since
inception, for the properties in our Portfolio, we have completed
full and partial renovations on 4,374 units at an average cost of
$4,962 per renovated unit that has
been leased as of December 31, 2017.
We have achieved average rent growth of 10.8%, or a $90 average monthly rental increase per unit, on
all units renovated and leased as of December 31, 2017, resulting in a return on
invested capital for interior renovations of 21.0%.
The following table sets forth a summary of our capital
expenditures related to our value-add program for the years ended
December 31, 2017, 2016 and 2015 (in
thousands):
|
|
For the Year Ended
December 31,
|
|
Rehab
Expenditures
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Interior
|
(1)
|
$
|
8,393
|
|
|
$
|
9,974
|
|
|
$
|
12,229
|
|
Exterior and common
area
|
|
|
7,621
|
|
|
|
10,297
|
|
|
|
21,449
|
|
Total rehab
expenditures
|
|
$
|
16,014
|
|
|
$
|
20,271
|
|
|
$
|
33,678
|
|
|
|
(1)
|
Includes total
capital expenditures during the period on completed and in-progress
interior rehabs. For the years ended December 31, 2017, 2016 and
2015, we completed full and partial interior rehabs on 1,588, 1,812
and 2,313 units, respectively.
|
First Quarter 2018 Dividend
On February 12, 2018, NXRT's board
of directors declared a quarterly dividend of $0.25 per share of common stock. The dividend
will be paid on March 30, 2018 to
stockholders of record on March 20,
2018.
Share Repurchase Program
During the year ended December 31,
2017, NXRT repurchased 104,361 shares of its common stock at
a total cost of approximately $2,435,000, or $23.33 per share. As of December 31, 2017, NXRT had repurchased a total
of 354,517 shares of its common stock at a total cost of
approximately $7,022,000, or
$19.81 per share. As of December 31, 2017, NXRT had 21,049,565 shares of
its common stock issued and outstanding.
Subsequent Events
Disposition of Timberglen
On January 31, 2018, NXRT sold
Timberglen, a 304-unit property in Dallas, Texas, for $30.0 million (numbers in the below table are in
thousands).
Property
Name
(1)
|
|
Location
|
|
Date of
Sale
|
|
Sales
Price
|
|
|
Debt
Outstanding
(2)
|
|
|
Net Cash
Proceeds (3)
|
|
|
Real
Estate
Carrying
Value, net (2)
|
Timberglen
|
(4)
|
Dallas,
Texas
|
|
January 31,
2018
|
|
$
|
30,000
|
|
|
$
|
17,226
|
|
|
$
|
29,567
|
|
(5)
|
$
|
15,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Property was
classified as held for sale as of December 31, 2017.
|
(2)
|
As of December 31,
2017. NXRT incurred a prepayment penalty of approximately $0.2
million in connection with the payoff of the mortgage
loan.
|
(3)
|
Represents sales
price, net of closing costs
|
(4)
|
NXRT completed the
reverse portion of the 1031 Exchange of Atera Apartments with the
sale of Timberglen.
|
(5)
|
In February 2018,
NXRT used $8.6 million of the proceeds from the sale of Timberglen
to pay the entire $8.6 million outstanding on its 2017 Bridge
Facility, which retired the facility.
|
Renewal of Advisory Agreement
On February 12, 2018, the Board,
including the independent directors, unanimously approved the
renewal of the Advisory Agreement with the Adviser for a one-year
term that expires on March 16,
2019.
Share Repurchase Program
Subsequent to December 31, 2017,
NXRT repurchased 118,927 shares of its common stock at a total cost
of approximately $3,000,000, or
$25.23 per share. As of February 12, 2017, NXRT had repurchased a total
of 473,444 shares of its common stock at a total cost of
approximately $10,022,000, or
$21.17 per share.
2018 Full Year Guidance Summary
NXRT is providing initial 2018 guidance ranges1 for
Earnings (loss) per diluted share, Core FFO per diluted
share2 Same Store Rental Income, Same Store Total
Revenue, Same Store Total Expenses, and Same Store NOI2
as follows:
|
Low-End
|
Mid-Point
|
High-End
|
|
|
|
|
Earnings (loss)/sh
(3)
|
($0.03)
|
$0.02
|
$0.07
|
|
|
|
|
Core FFO/sh
(3)
|
$1.60
|
$1.65
|
$1.70
|
|
|
|
|
Same Store Growth:
(4)
|
|
|
|
Rental
Income
|
4.8%
|
5.3%
|
5.8%
|
Total
Revenue
|
5.0%
|
5.5%
|
6.0%
|
Total
Expenses
|
3.5%
|
4.0%
|
4.5%
|
NOI
|
5.5%
|
6.5%
|
7.5%
|
|
|
(1)
|
Full Year 2018
guidance forecast includes same store growth projections presented
above, taking into effect the Timberglen sale, and no further
acquisition or disposition activity for the remainder of the year.
For more information and a reconciliation of 2018 Full Year
Non-GAAP Guidance to 2018 Full Year net income guidance, see
""Definitions and Reconciliations" section of this
release.
|
(2)
|
Same Store NOI and
Core FFO are non-GAAP measures. For reconciliations of Same Store
NOI and Core FFO to net income, and a discussion of why we consider
these non-GAAP measures useful, see the "Definitions and
Reconciliations" section of this release.
|
(3)
|
Weighted average
diluted share count estimate for FY 2018 is approximately 21.5
million.
|
(4)
|
Year-over-year growth
for 2018 pro forma same store pool (29 properties, excluding
Timberglen).
|
Additional information on fourth quarter and full year 2017
results and 2018 financial and earnings guidance is included in
supplemental data that can be found in the Investor Relations
section of the Company's website at www.nexpointliving.com.
Supplemental Information
Supplemental information to this press release can be found in
the Investor Relations section of the Company's website at
www.nexpointliving.com.
Fourth Quarter Earnings Conference Call
NXRT will host a call on Tuesday,
February 13, 2018 at 11:00 a.m.
ET to discuss its fourth quarter and full year 2017
financial results and present 2018 earnings guidance. The
conference call can be accessed live over the phone by dialing
(888) 724-9513 or, for international callers, (719) 325-4857, and
using passcode Conference ID: 1189856. A live audio webcast of the
call will be available online at the Company's website,
http://www.nexpointliving.com (under "Investor Relations"). An
online replay will be available shortly after the call on the
Company's website and continue to be available for 60 days.
A replay of the conference call will also be available through
Tuesday, February 20, 2018, by
dialing (888) 203-1112 or, for international callers, (719)
457-0820 and entering passcode 1189856.
About NXRT
NexPoint Residential Trust is a publicly traded REIT, with its
shares listed on the New York Stock Exchange under the symbol
"NXRT," primarily focused on acquiring, owning and operating
well-located middle-income multifamily properties with "value-add"
potential in large cities and suburban submarkets of large cities,
primarily in the Southeastern and Southwestern United States. NXRT is externally
advised by NexPoint Real Estate Advisors, L.P., an affiliate of
Highland Capital Management, L.P., a leading global alternative
asset manager and an SEC-registered investment adviser. More
information about NXRT is available at
http://www.nexpointliving.com.
Cautionary Notice Regarding Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that are based on management's current expectations, assumptions
and beliefs. Forward-looking statements can often be identified by
words such as "expect," "anticipate," "estimate," "may," "should,"
"intend" and similar expressions, and variations or negatives of
these words. These forward-looking statements include, but are not
limited to, statements regarding NXRT's guidance for financial
results for the full year 2018 or expected dispositions or
acquisitions. They are not guarantees of future results and are
subject to risks, uncertainties, assumptions and anticipated sales
of properties that could cause actual results to differ materially
from those expressed in any forward-looking statement. Readers
should not place undue reliance on any forward-looking statements
and are encouraged to review the Company's most recent Annual
Report on Form 10-K and other filings with the Securities and
Exchange Commission (the "SEC") for a more complete discussion of
the risks and other factors that could affect any forward-looking
statements. Except as required by law, NXRT does not undertake any
obligation to publicly update or revise any forward-looking
statements.
Contact:
Marilynn
Meek
Financial Relations Board
212-827-3773
|
|
Select
Financial Information
|
NEXPOINT
RESIDENTIAL TRUST, INC. AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(in thousands,
except share and per share amounts)
|
|
|
December 31,
2017
|
|
|
December 31,
2016
|
ASSETS
|
|
|
|
|
|
|
Operating Real Estate
Investments
|
|
|
|
|
|
|
Land
|
$
|
189,615
|
|
|
$
|
165,863
|
Buildings and
improvements
|
|
806,981
|
|
|
|
733,374
|
Intangible lease
assets
|
|
1,340
|
|
|
|
5,140
|
Construction in
progress
|
|
3,786
|
|
|
|
2,828
|
Furniture, fixtures,
and equipment
|
|
44,725
|
|
|
|
36,616
|
Total Gross Operating
Real Estate Investments
|
|
1,046,447
|
|
|
|
943,821
|
Accumulated
depreciation and amortization
|
|
(88,252)
|
|
|
|
(60,214)
|
Total Net Operating
Real Estate Investments
|
|
958,195
|
|
|
|
883,607
|
Real estate held for
sale, net of accumulated depreciation of $3,397 and $6,099,
respectively
|
|
32,961
|
|
|
|
79,430
|
Total Net Real Estate
Investments
|
|
991,156
|
|
|
|
963,037
|
Cash and cash
equivalents
|
|
16,036
|
|
|
|
22,705
|
Restricted
cash
|
|
27,212
|
|
|
|
32,556
|
Accounts
receivable
|
|
2,932
|
|
|
|
3,008
|
Prepaid and other
assets
|
|
1,559
|
|
|
|
1,678
|
Fair market value of
interest rate swaps
|
|
16,480
|
|
|
|
12,413
|
TOTAL
ASSETS
|
$
|
1,055,375
|
|
|
$
|
1,035,397
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Mortgages payable,
net
|
$
|
724,057
|
|
|
$
|
367,453
|
Mortgages payable held
for sale, net
|
|
30,348
|
|
|
|
55,685
|
Credit facilities,
net
|
|
29,843
|
|
|
|
310,492
|
Bridge facility,
net
|
|
8,576
|
|
|
|
29,874
|
Accounts payable and
other accrued liabilities
|
|
6,226
|
|
|
|
5,551
|
Accrued real estate
taxes payable
|
|
9,684
|
|
|
|
6,534
|
Accrued interest
payable
|
|
2,074
|
|
|
|
1,067
|
Security deposit
liability
|
|
1,518
|
|
|
|
1,364
|
Prepaid
rents
|
|
1,470
|
|
|
|
1,275
|
Total
Liabilities
|
|
813,796
|
|
|
|
779,295
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interests in the Operating Partnership
|
|
2,135
|
|
|
|
—
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
Preferred stock, $0.01
par value: 100,000,000 shares authorized; 0 shares
issued
|
|
—
|
|
|
|
—
|
Common stock, $0.01
par value: 500,000,000 shares authorized; 21,049,565 and 21,043,669
shares issued and outstanding, respectively
|
|
210
|
|
|
|
213
|
Additional paid-in
capital
|
|
206,227
|
|
|
|
241,450
|
Accumulated earnings
less dividends
|
|
19,288
|
|
|
|
(14,584)
|
Accumulated other
comprehensive income
|
|
13,719
|
|
|
|
9,052
|
Common stock held in
treasury at cost; 0 and 250,156 shares, respectively
|
|
—
|
|
|
|
(4,587)
|
Total
Stockholders' Equity
|
|
239,444
|
|
|
|
231,544
|
Noncontrolling
interests
|
|
—
|
|
|
|
24,558
|
Total
Equity
|
|
239,444
|
|
|
|
256,102
|
TOTAL LIABILITIES
AND EQUITY
|
$
|
1,055,375
|
|
|
$
|
1,035,397
|
|
|
NEXPOINT
RESIDENTIAL TRUST, INC. AND SUBSIDIARIES
|
COMBINED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
AND COMPREHENSIVE
INCOME (LOSS)
|
(in thousands,
except per share amounts)
|
|
|
For the Year Ended
December 31,
|
|
2017
|
|
|
2016
|
|
|
2015
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
$
|
125,023
|
|
|
$
|
115,419
|
|
|
$
|
103,804
|
Other
income
|
|
19,212
|
|
|
|
17,429
|
|
|
|
13,854
|
Total
revenues
|
|
144,235
|
|
|
|
132,848
|
|
|
|
117,658
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
38,850
|
|
|
|
38,236
|
|
|
|
34,252
|
Acquisition
costs
|
|
—
|
|
|
|
386
|
|
|
|
2,975
|
Real estate taxes and
insurance
|
|
19,161
|
|
|
|
16,062
|
|
|
|
15,231
|
Property management
fees (1)
|
|
4,330
|
|
|
|
3,983
|
|
|
|
3,501
|
Advisory and
administrative fees (2)
|
|
7,419
|
|
|
|
6,802
|
|
|
|
5,565
|
Corporate general and
administrative expenses
|
|
6,275
|
|
|
|
4,014
|
|
|
|
2,455
|
Property general and
administrative expenses
|
|
6,159
|
|
|
|
5,877
|
|
|
|
5,401
|
Depreciation and
amortization
|
|
48,752
|
|
|
|
35,643
|
|
|
|
40,801
|
Total
expenses
|
|
130,946
|
|
|
|
111,003
|
|
|
|
110,181
|
Operating
income
|
|
13,289
|
|
|
|
21,845
|
|
|
|
7,477
|
Interest
expense
|
|
(29,576)
|
|
|
|
(20,167)
|
|
|
|
(17,817)
|
Loss on extinguishment
of debt and modification costs
|
|
(5,719)
|
|
|
|
(1,722)
|
|
|
|
(652)
|
Gain on sales of real
estate
|
|
78,365
|
|
|
|
25,932
|
|
|
|
—
|
Net income
(loss)
|
|
56,359
|
|
|
|
25,888
|
|
|
|
(10,992)
|
Net income (loss)
attributable to noncontrolling interests
|
|
2,836
|
|
|
|
4,006
|
|
|
|
(160)
|
Net income
attributable to redeemable noncontrolling interests in the
Operating Partnership
|
|
149
|
|
|
|
—
|
|
|
|
—
|
Net income (loss)
attributable to common stockholders
|
$
|
53,374
|
|
|
$
|
21,882
|
|
|
$
|
(10,832)
|
Other
comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains
(losses) on interest rate derivatives
|
|
4,568
|
|
|
|
10,833
|
|
|
|
(391)
|
Total
comprehensive income (loss)
|
|
60,927
|
|
|
|
36,721
|
|
|
|
(11,383)
|
Comprehensive
income (loss) attributable to noncontrolling
interests
|
|
2,720
|
|
|
|
5,090
|
|
|
|
(93)
|
Comprehensive
income attributable to redeemable noncontrolling interests in the
Operating Partnership
|
|
166
|
|
|
|
—
|
|
|
|
—
|
Comprehensive
income (loss) attributable to common stockholders
|
$
|
58,041
|
|
|
$
|
31,631
|
|
|
$
|
(11,290)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
21,057
|
|
|
|
21,232
|
|
|
|
21,294
|
Weighted average
common shares outstanding - diluted
|
|
21,399
|
|
|
|
21,314
|
|
|
|
21,294
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per share - basic
|
$
|
2.53
|
|
|
$
|
1.03
|
|
|
$
|
(0.51)
|
Earnings (loss)
per share - diluted
|
$
|
2.49
|
|
|
$
|
1.03
|
|
|
$
|
(0.51)
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
|
0.910
|
|
|
$
|
0.838
|
|
|
$
|
0.618
|
|
|
(1)
|
Fees incurred to an
unaffiliated third party that is an affiliate of the noncontrolling
limited partner of the Company's operating partnership.
|
(2)
|
Fees incurred to the
Company's adviser.
|
Definitions and Reconciliations
This press release includes analysis of funds from operations,
or FFO, core funds from operations, or Core FFO, adjusted funds
from operations, or AFFO, and net operating income, or NOI, all of
which are non-GAAP financial measures of performance. These
non-GAAP measures should be used as a supplement to, and not a
substitute for, net income (loss) computed in accordance with GAAP.
For a more complete discussion of FFO, Core FFO, AFFO, and NOI, see
our most recent Annual Report on Form 10-K and our other filings
with the SEC.
This press release also includes an analysis of our 2016-2017,
2015-2017 and Q4 Same Store properties, which are defined as those
that are stabilized and comparable for both the current and the
prior reporting periods. Same Store analysis for the full years
2016-2017 includes 26 properties totaling 8,871 units, or
approximately 75% of our Portfolio; the full years 2015-2017
includes 17 properties totaling 5,546 units, or approximately 47%
of our Portfolio; while the fourth quarters 2016-2017 includes 27
properties totaling 9,088 units, or approximately 77% of our
Portfolio.
Net Operating Income
NOI is a non-GAAP financial measure of performance. NOI is used
by investors and our management to evaluate and compare the
performance of our properties to other comparable properties, to
determine trends in earnings and to compute the fair value of our
properties as NOI is not affected by (1) the cost of funds, (2)
acquisition costs, (3) advisory and administrative fees, (4) the
impact of depreciation and amortization expenses as well as gains
or losses from the sale of operating real estate assets that are
included in net income computed in accordance with GAAP, (5)
corporate general and administrative expenses, (6) other gains and
losses that are specific to us, (7) casualty-related
expenses/(recoveries), and (8) property general and administrative
expenses that are not reflective of the continuing operations of
the properties or are incurred on behalf of NXRT at the property
for expenses such as legal, professional and franchise tax
fees.
The following table, which has not been adjusted for the effects
of noncontrolling interests, reconciles our NOI and our 2016-2017
Same Store NOI for the years ended December
31, 2017 and 2016 to net income, the most directly
comparable GAAP financial measure (in thousands):
|
|
For the Year Ended
December 31,
|
|
|
2017
|
|
|
2016
|
Net income
|
|
$
|
56,359
|
|
|
$
|
25,888
|
Adjustments to
reconcile net income to NOI:
|
|
|
|
|
|
|
|
Advisory and
administrative fees
|
|
|
7,419
|
|
|
|
6,802
|
Corporate
general and administrative expenses
|
|
|
6,275
|
|
|
|
4,014
|
Casualty-related expenses/(recoveries)
|
(1)
|
|
(287)
|
|
|
|
151
|
Property
general and administrative expenses
|
(2)
|
|
1,130
|
|
|
|
879
|
Depreciation
and amortization
|
|
|
48,752
|
|
|
|
35,643
|
Interest
expense
|
|
|
29,576
|
|
|
|
20,167
|
Loss on
extinguishment of debt and modification costs
|
|
|
5,719
|
|
|
|
1,722
|
Gain on sales
of real estate
|
|
|
(78,365)
|
|
|
|
(25,932)
|
Acquisition
costs
|
|
|
—
|
|
|
|
386
|
NOI
|
|
$
|
76,578
|
|
|
$
|
69,720
|
Less Non-Same
Store
|
|
|
|
|
|
|
|
Revenues
|
|
|
(42,709)
|
|
|
|
(37,924)
|
Operating
expenses
|
|
|
21,177
|
|
|
|
18,898
|
Same Store
NOI
|
|
$
|
55,046
|
|
|
$
|
50,694
|
|
|
(1)
|
Adjustment to net
income to exclude certain property operating expenses that are
casualty-related expenses/(recoveries).
|
(2)
|
Adjustment to net
income to exclude certain property general and administrative
expenses that are not reflective of the continuing operations of
the properties or are incurred on our behalf at the property for
expenses such as legal, professional and franchise tax
fees.
|
The following table, which has not been adjusted for the effects
of noncontrolling interests, reconciles our NOI and our 2015-2017
Same Store NOI for the years ended December
31, 2017, 2016 and 2015 to net income (loss), the most
directly comparable GAAP financial measure (in thousands):
|
|
For the Year Ended
December 31,
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
Net income
(loss)
|
|
$
|
56,359
|
|
|
$
|
25,888
|
|
|
$
|
(10,992)
|
Adjustments to
reconcile net income (loss) to NOI:
|
|
|
|
|
|
|
|
|
|
|
|
Advisory and
administrative fees
|
|
|
7,419
|
|
|
|
6,802
|
|
|
|
5,565
|
Corporate
general and administrative expenses
|
|
|
6,275
|
|
|
|
4,014
|
|
|
|
2,455
|
Casualty-related expenses/(recoveries)
|
(1)
|
|
(287)
|
|
|
|
151
|
|
|
|
25
|
Property
general and administrative expenses
|
(2)
|
|
1,130
|
|
|
|
879
|
|
|
|
1,109
|
Depreciation
and amortization
|
|
|
48,752
|
|
|
|
35,643
|
|
|
|
40,801
|
Interest
expense
|
|
|
29,576
|
|
|
|
20,167
|
|
|
|
17,817
|
Loss on
extinguishment of debt and modification costs
|
|
|
5,719
|
|
|
|
1,722
|
|
|
|
652
|
Gain on sales
of real estate
|
|
|
(78,365)
|
|
|
|
(25,932)
|
|
|
|
—
|
Acquisition
costs
|
|
|
—
|
|
|
|
386
|
|
|
|
2,975
|
NOI
|
|
$
|
76,578
|
|
|
$
|
69,720
|
|
|
$
|
60,407
|
Less Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
(79,455)
|
|
|
|
(72,130)
|
|
|
|
(62,250)
|
Operating
expenses
|
|
|
37,969
|
|
|
|
35,055
|
|
|
|
30,632
|
Same Store
NOI
|
|
$
|
35,092
|
|
|
$
|
32,645
|
|
|
$
|
28,789
|
|
|
(1)
|
Adjustment to net
income (loss) to exclude certain property operating expenses that
are casualty-related expenses/(recoveries).
|
(2)
|
Adjustment to net
income (loss) to exclude certain property general and
administrative expenses that are not reflective of the continuing
operations of the properties or are incurred on our behalf at the
property for expenses such as legal, professional and franchise tax
fees.
|
The following table, which has not been adjusted for the effects
of noncontrolling interests, reconciles our NOI and our Q4 Same
Store NOI for the three months ended December 31, 2017 and 2016 to net income (loss),
the most directly comparable GAAP financial measure (in
thousands):
|
|
For the Three
Months Ended December 31,
|
|
|
2017
|
|
|
2016
|
Net income
(loss)
|
|
$
|
(4,343)
|
|
|
$
|
176
|
Adjustments to
reconcile net income (loss) to NOI:
|
|
|
|
|
|
|
|
Advisory and
administrative fees
|
|
|
1,875
|
|
|
|
1,858
|
Corporate
general and administrative expenses
|
|
|
1,433
|
|
|
|
1,365
|
Casualty-related expenses
|
(1)
|
|
64
|
|
|
|
60
|
Property
general and administrative expenses
|
(2)
|
|
226
|
|
|
|
252
|
Depreciation
and amortization
|
|
|
12,886
|
|
|
|
9,280
|
Interest
expense
|
|
|
7,097
|
|
|
|
4,517
|
Loss on
extinguishment of debt and modification costs
|
|
|
2
|
|
|
|
—
|
Gain on sales
of real estate
|
|
|
21
|
|
|
|
—
|
NOI
|
|
$
|
19,261
|
|
|
$
|
17,508
|
Less Non-Same
Store
|
|
|
|
|
|
|
|
Revenues
|
|
|
(8,326)
|
|
|
|
(7,688)
|
Operating
expenses
|
|
|
3,927
|
|
|
|
3,629
|
Same Store
NOI
|
|
$
|
14,862
|
|
|
$
|
13,449
|
|
|
(1)
|
Adjustment to net
income (loss) to exclude certain property operating expenses that
are casualty-related expenses.
|
(2)
|
Adjustment to net
income to exclude certain property general and administrative
expenses that are not reflective of the continuing operations of
the properties or are incurred on our behalf at the property for
expenses such as legal, professional and franchise tax
fees.
|
FFO, Core FFO and AFFO
We believe that net income, as defined by GAAP, is the most
appropriate earnings measure. We also believe that funds from
operations, or FFO, as defined by the National Association of Real
Estate Investment Trusts, or NAREIT, core funds from operations, or
Core FFO, and adjusted funds from operations, or AFFO, are
important non-GAAP supplemental measures of operating performance
for a REIT.
Since the historical cost accounting convention used for real
estate assets requires depreciation except on land, such accounting
presentation implies that the value of real estate assets
diminishes predictably over time. However, since real estate values
have historically risen or fallen with market and other conditions,
presentations of operating results for a REIT that use historical
cost accounting for depreciation could be less informative. Thus,
NAREIT created FFO as a supplemental measure of operating
performance for REITs that excludes historical cost depreciation
and amortization, among other items, from net income, as defined by
GAAP. FFO is defined by NAREIT as net income computed in accordance
with GAAP, excluding gains or losses from real estate dispositions,
plus real estate depreciation and amortization and impairment
charges. We compute FFO attributable to common stockholders in
accordance with NAREIT's definition. Our presentation differs
slightly in that we begin with net income (loss) before adjusting
for amounts attributable to (1) noncontrolling interests in
consolidated joint ventures and (2) redeemable noncontrolling
interests in the OP; we show the combined amounts attributable to
such noncontrolling interests as an adjustment to arrive at FFO
attributable to common stockholders. Core FFO makes certain
adjustments to FFO, which are either not likely to occur on a
continuing basis or are otherwise not representative of the
continuing operating performance of our portfolio.
Core FFO adjusts FFO to remove items such as acquisition
expenses, losses on extinguishment of debt and modification costs
(includes prepayment penalties incurred and the write-off of
unamortized deferred loan costs related to the early retirement of
debt and costs incurred in connection with a debt modification that
are expensed), the amortization of deferred financing costs
incurred in connection with obtaining short-term debt financing,
the ineffective portion of fair value adjustments on our interest
rate derivatives designated as cash flow hedges, and the
noncontrolling interests (as described above) related to these
items. We believe Core FFO is useful to investors as a supplemental
gauge of our operating performance and is useful in comparing our
operating performance with other REITs that are not as involved in
the aforementioned activities.
AFFO makes certain adjustments to Core FFO. There is no industry
standard definition of AFFO and practice is divergent across the
industry. AFFO adjusts Core FFO to remove items such as
equity-based compensation expense and the amortization of deferred
financing costs incurred in connection with obtaining long-term
debt financing, and the noncontrolling interests (as described
above) related to these items. We believe AFFO is useful to
investors as a supplemental gauge of our operating performance and
is useful in comparing our operating performance with other REITs
that are not as involved in the aforementioned activities.
The effect of the conversion of OP Units held by noncontrolling
limited partners is not reflected in the computation of basic and
diluted FFO, Core FFO and AFFO per share, as they are exchangeable
for common stock on a one-for-one basis. The FFO, Core FFO and AFFO
allocable to such units is allocated on this same basis and
reflected in the adjustments for noncontrolling interests below. As
such, the assumed conversion of these units would have no net
impact on the determination of diluted FFO, Core FFO and AFFO per
share.
We believe that the use of FFO, Core FFO and AFFO, combined with
the required GAAP presentations, improves the understanding of
operating results of REITs among investors and makes comparisons of
operating results among such companies more meaningful. While FFO,
Core FFO and AFFO are relevant and widely used measures of
operating performance of REITs, they do not represent cash flows
from operations or net income (loss) as defined by GAAP and should
not be considered as an alternative or substitute to those measures
in evaluating our liquidity or operating performance. FFO, Core FFO
and AFFO do not purport to be indicative of cash available to fund
our future cash requirements. Further, our computation of FFO, Core
FFO and AFFO may not be comparable to FFO, Core FFO and AFFO
reported by other REITs that do not define FFO in accordance with
the current NAREIT definition or that interpret the current NAREIT
definition or define Core FFO or AFFO differently than we do.
The following table reconciles our calculations of FFO, Core FFO
and AFFO to net income (loss), the most directly comparable GAAP
financial measure, for the years ended December 31, 2017, 2016 and 2015 (in thousands,
except per share amounts):
|
For the Year Ended
December 31,
|
|
2017
|
|
|
2016
|
|
|
2015
|
Net income
(loss)
|
$
|
56,359
|
|
|
$
|
25,888
|
|
|
$
|
(10,992)
|
Depreciation and
amortization
|
|
48,752
|
|
|
|
35,643
|
|
|
|
40,801
|
Gain on sales of real
estate
|
|
(78,365)
|
|
|
|
(25,932)
|
|
|
|
—
|
Adjustment for
noncontrolling interests
|
|
(1,695)
|
|
|
|
(4,583)
|
|
|
|
(4,170)
|
FFO attributable
to common stockholders
|
|
25,051
|
|
|
|
31,016
|
|
|
|
25,639
|
|
|
|
|
|
|
|
|
|
|
|
FFO per share -
basic
|
$
|
1.19
|
|
|
$
|
1.46
|
|
|
$
|
1.20
|
FFO per share -
diluted
|
$
|
1.17
|
|
|
$
|
1.46
|
|
|
$
|
1.20
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition
costs
|
|
—
|
|
|
|
386
|
|
|
|
2,975
|
Loss on
extinguishment of debt and modification costs
|
|
5,719
|
|
|
|
1,722
|
|
|
|
652
|
Change in fair value
on derivative instruments - ineffective portion
|
|
(309)
|
|
|
|
(1,683)
|
|
|
|
—
|
Amortization of
deferred financing costs - acquisition term notes
|
|
403
|
|
|
|
—
|
|
|
|
—
|
Adjustment for
noncontrolling interests
|
|
(429)
|
|
|
|
(94)
|
|
|
|
(322)
|
Core FFO
attributable to common stockholders
|
|
30,435
|
|
|
|
31,347
|
|
|
|
28,944
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO per share
- basic
|
$
|
1.45
|
|
|
$
|
1.48
|
|
|
$
|
1.36
|
Core FFO per share
- diluted
|
$
|
1.42
|
|
|
$
|
1.47
|
|
|
$
|
1.36
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
deferred financing costs - long term debt
|
|
1,592
|
|
|
|
1,423
|
|
|
|
1,081
|
Equity-based
compensation expense
|
|
3,108
|
|
|
|
825
|
|
|
|
—
|
Adjustment for
noncontrolling interests
|
|
(76)
|
|
|
|
(140)
|
|
|
|
(92)
|
AFFO attributable
to common stockholders
|
|
35,059
|
|
|
|
33,455
|
|
|
|
29,933
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per share -
basic
|
$
|
1.66
|
|
|
$
|
1.58
|
|
|
$
|
1.41
|
AFFO per share -
diluted
|
$
|
1.64
|
|
|
$
|
1.57
|
|
|
$
|
1.41
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
21,057
|
|
|
|
21,232
|
|
|
|
21,294
|
Weighted average
common shares outstanding - diluted
|
|
21,399
|
|
|
|
21,314
|
|
|
|
21,294
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
|
0.910
|
|
|
$
|
0.838
|
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
FFO Coverage -
diluted
|
1.29x
|
|
|
1.74x
|
|
|
(1)
|
Core FFO Coverage
- diluted
|
1.56x
|
|
|
1.76x
|
|
|
(1)
|
AFFO Coverage -
diluted
|
1.80x
|
|
|
1.87x
|
|
|
(1)
|
The year ended December 31,
2017 as compared to the year ended December 31, 2016
FFO was $25.1 million for the year
ended December 31, 2017 compared to
$31.0 million for the year ended
December 31, 2016, which was a
decrease of approximately $5.9
million. The change in our FFO between periods primarily
relates to increases in total property operating expenses of
approximately $4.0 million, interest
expense of approximately $9.4
million, loss on extinguishment of debt and modification
costs of approximately $4.0 million
and corporate general and administrative expenses of approximately
$2.3 million, and was partially
offset by an increase in total revenues of approximately
$11.4 million and adjustments for
amounts attributable to noncontrolling interests.
Core FFO was $30.4 million for the
year ended December 31, 2017 compared
to $31.3 million for the year ended
December 31, 2016, which was a
decrease of approximately $0.9
million. The change in our Core FFO between periods
primarily relates to decreases in gain recognized related to the
ineffective portion of changes in fair value of our interest rate
swap derivatives designated as cash flow hedges of approximately
$1.4 million and FFO, partially
offset by a $4.0 million increase in
loss on extinguishment of debt and modification costs and
adjustments for amounts attributable to noncontrolling
interests.
AFFO was $35.1 million for the
year ended December 31, 2017 compared
to $33.5 million for the year ended
December 31, 2016, which was an
increase of approximately $1.6
million. The change in our AFFO between periods primarily
relates to an increase in equity-based compensation expense of
approximately $2.3 million, partially
offset by a decrease in Core FFO.
The following table reconciles our calculations of FFO, Core FFO
and AFFO to net income (loss), the most directly comparable GAAP
financial measure, for the three months ended December 31, 2017 and 2016 (in thousands, except
per share amounts):
|
For the Three
Months Ended December 31,
|
|
2017
|
|
|
2016
|
Net income
(loss)
|
$
|
(4,343)
|
|
|
$
|
176
|
Depreciation and
amortization
|
|
12,886
|
|
|
|
9,280
|
Gain on sales of real
estate
|
|
21
|
|
|
|
—
|
Adjustment for
noncontrolling interests
|
|
(25)
|
|
|
|
(1,182)
|
FFO attributable
to common stockholders
|
|
8,539
|
|
|
|
8,274
|
|
|
|
|
|
|
|
FFO per share -
basic
|
$
|
0.41
|
|
|
$
|
0.39
|
FFO per share -
diluted
|
$
|
0.40
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
Acquisition
costs
|
|
—
|
|
|
|
—
|
Loss on
extinguishment of debt and modification costs
|
|
2
|
|
|
|
—
|
Change in fair value
on derivative instruments - ineffective portion
|
|
(212)
|
|
|
|
(1,084)
|
Amortization of
deferred financing costs - acquisition term notes
|
|
80
|
|
|
|
—
|
Adjustment for
noncontrolling interests
|
|
1
|
|
|
|
94
|
Core FFO
attributable to common stockholders
|
|
8,410
|
|
|
|
7,284
|
|
|
|
|
|
|
|
Core FFO per share
- basic
|
$
|
0.40
|
|
|
$
|
0.35
|
Core FFO per share
- diluted
|
$
|
0.39
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
Amortization of
deferred financing costs - long term debt
|
|
367
|
|
|
|
339
|
Equity-based
compensation expense
|
|
694
|
|
|
|
529
|
Adjustment for
noncontrolling interests
|
|
(4)
|
|
|
|
(47)
|
AFFO attributable
to common stockholders
|
|
9,467
|
|
|
|
8,105
|
|
|
|
|
|
|
|
AFFO per share -
basic
|
$
|
0.45
|
|
|
$
|
0.38
|
AFFO per share -
diluted
|
$
|
0.44
|
|
|
$
|
0.38
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
21,055
|
|
|
|
21,080
|
Weighted average
common shares outstanding - diluted
|
|
21,375
|
|
|
|
21,290
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
|
0.250
|
|
|
$
|
0.220
|
|
|
|
|
|
|
|
FFO Coverage -
diluted
|
1.60x
|
|
|
1.77x
|
Core FFO Coverage
- diluted
|
1.57x
|
|
|
1.56x
|
AFFO Coverage -
diluted
|
1.77x
|
|
|
1.73x
|
The three months ended December 31,
2017 as compared to the three months ended December 31, 2016
FFO was $8.5 million for the three
months December 31, 2017 compared to
$8.3 million for the three months
ended December 31, 2016, which was an
increase of approximately $0.2
million. The change in our FFO between periods primarily
relates to increases in total property operating expenses of
approximately $0.5 million and
interest expense of approximately $2.6
million, and was partially offset by an increase in total
revenues of approximately $2.3
million and adjustments for amounts attributable to
noncontrolling interests.
Core FFO was $8.4 million for the
three months ended December 31, 2017
compared to $7.3 million for the
three months ended December 31, 2016,
which was an increase of approximately $1.1
million. The change in our Core FFO between periods
primarily relates to a decrease in gain recognized related to the
ineffective portion of changes in fair value of our interest rate
swap derivatives designated as cash flow hedges of approximately
$0.9 million and an increase in
FFO.
AFFO was $9.5 million for the
three months ended December 31, 2017
compared to $8.1 million for the
three months ended December 31, 2016,
which was an increase of approximately $1.4
million. The change in our AFFO between periods primarily
relates to increases in equity-based compensation expense of
approximately $0.2 million and Core
FFO.
Same Store Properties
We review our stabilized multifamily communities on a comparable
basis between periods. Our Same Store properties are defined as
those that are stabilized and comparable for both the current
period and the same period for the prior reporting year.
For our full year 2016-2017 Same Store properties, there are 26
properties meeting this definition: Arbors on Forest Ridge, Cutter's Point, Eagle Crest,
Silverbrook, Timberglen, Edgewater at Sandy Springs, Beechwood Terrace, Willow Grove, Woodbridge, Abbington Heights,
Courtney Cove, The Summit at Sabal
Park, Timber Creek, Belmont at Duck Creek, Radbourne Lake, Sabal
Palm at Lake Buena Vista, Southpoint Reserve at Stoney Creek,
Cornerstone, The Preserve at Terrell Mill, The Ashlar,
Heatherstone, Versailles, Seasons
704 Apartments, Madera Point, The
Pointe at the Foothills, and Venue at 8651.
For our full years 2015-2017 Same Store properties, there are 17
properties meeting this definition: Arbors on Forest Ridge, Cutter's Point, Eagle Crest,
Silverbrook, Timberglen, Edgewater at Sandy Springs, Beechwood Terrace, Willow Grove, Woodbridge, Abbington Heights,
Courtney Cove, The Summit at Sabal
Park, Timber Creek, Belmont at Duck Creek, Radbourne Lake, Sabal
Palm at Lake Buena Vista, and Southpoint Reserve at Stoney
Creek.
For our Q4 Same Store properties, there are 27 properties
meeting this definition: Arbors on Forest
Ridge, Cutter's Point, Eagle Crest, Silverbrook, Timberglen,
Edgewater at Sandy Springs,
Beechwood Terrace, Willow Grove,
Woodbridge, Abbington Heights, Courtney
Cove, The Summit at Sabal Park, Timber Creek, Belmont at
Duck Creek, Radbourne Lake, Sabal Palm at Lake Buena Vista,
Southpoint Reserve at Stoney Creek, Cornerstone, The Preserve at
Terrell Mill, The Ashlar, Heatherstone, Versailles, Seasons 704 Apartments,
Madera Point, The Pointe at the
Foothills, Venue at 8651, and Parc500.
Reconciliation of FY 2018 Guidance for NOI, FFO, Core FFO and
AFFO
The following table, which has not been adjusted for the effects
of noncontrolling interests, reconciles our NOI guidance to our net
income (the most directly comparable GAAP financial measure)
guidance for the year ended December 31,
2018 (in thousands):
|
For the Year Ended
December 31, 2018
|
|
Mid-point
|
Net income
|
$
|
450
|
Adjustments to
reconcile net income to NOI:
|
|
|
Advisory and
administrative fees
|
|
7,465
|
Corporate
general and administrative expenses
|
|
7,321
|
Property
general and administrative expenses (1)
|
|
910
|
Depreciation
and amortization
|
|
48,325
|
Interest
expense
|
|
27,078
|
Loss on
extinguishment of debt and modification costs
|
|
560
|
Gain on sales
of real estate
|
|
(13,758)
|
NOI
|
$
|
78,350
|
|
|
(1)
|
Adjustment to net
income to exclude certain property general and administrative
expenses that are not reflective of the continuing operations of
the properties or are incurred on our behalf at the property for
expenses such as legal, professional and franchise tax
fees.
|
The following table reconciles our FFO, Core FFO and AFFO
guidance to our net income (the most directly comparable GAAP
financial measure) guidance for the year ended December 31, 2018 (in thousands, except per share
data):
|
For the Year Ended
December 31, 2018
|
|
Mid-point
|
Net income
|
$
|
450
|
Depreciation and
amortization
|
|
48,325
|
Gain on sales of real
estate
|
|
(13,758)
|
Adjustment for
noncontrolling interests
|
|
(105)
|
FFO attributable
to common stockholders
|
|
34,911
|
|
|
|
FFO per share -
diluted (1)
|
$
|
1.62
|
|
|
|
Loss on
extinguishment of debt and modification costs
|
$
|
560
|
Amortization of
deferred financing costs - acquisition term notes
|
|
7
|
Adjustment for
noncontrolling interests
|
|
(2)
|
Core FFO
attributable to common stockholders
|
$
|
35,477
|
|
|
|
Core FFO per share
- diluted (1)
|
$
|
1.65
|
|
|
|
Amortization of
deferred financing costs - long term debt
|
$
|
1,431
|
Equity-based
compensation expense
|
|
4,221
|
Adjustment for
noncontrolling interests
|
|
(17)
|
AFFO attributable
to common stockholders
|
$
|
41,112
|
|
|
|
AFFO per share -
diluted (1)
|
$
|
1.91
|
|
|
|
Weighted average
common shares outstanding - diluted
|
|
21,496
|
|
|
(1)
|
For purposes of
calculating per share data, NXRT assumes a weighted average diluted
share count of 21.5 million for the full year 2018.
|
In this release, "we," "us," "our," the "Company," "NexPoint
Residential Trust," and "NXRT" each refer to NexPoint Residential
Trust, Inc., a Maryland
corporation.
View original
content:http://www.prnewswire.com/news-releases/nexpoint-residential-trust-inc-reports-fourth-quarter-and-full-year-2017-results-2018-full-year-initial-guidance-300597826.html
SOURCE NexPoint Residential Trust, Inc.