DALLAS, Aug. 1, 2017 /PRNewswire/ -- NexPoint
Residential Trust, Inc. (NYSE:NXRT) reported financial results for
the second quarter and six months ended June
30, 2017.
Highlights
- NXRT reported Net Income, FFO¹, Core FFO¹, and AFFO¹ of
$3.8M, $9.7M, $14.2M, and
$16.5M, respectively, attributable to
common shareholders for the six months ended June 30, 2017.
- For the first six months of 2017, Same Store average effective
rent, total revenue and NOI¹ increased 5.2%, 7.0% and 7.2%,
respectively over the prior year period.
- The weighted average effective monthly rent per unit, across
all 37 properties held as of June 30,
2017, improved to $922, while
we closed the quarter with physical occupancy of 92.8%.
- NXRT paid a second quarter dividend of $0.220 per share of NXRT common stock on
June 30, 2017.
- During the second quarter, NXRT entered into two interest rate
swap transactions with a notional amount of $150 million. The Company has now hedged
$650 million, or 98.5% of its
long-term floating rate mortgage debt outstanding as of
June 30, 2017 (excludes mortgage debt
held for sale), effectively fixing 30-day LIBOR at a weighted
averaged fixed rate of 1.3388% through April
2021.
- On June 30, 2017, NXRT completed
a refinancing of a 22-property portfolio (the "Freddie Refinance"),
which reduces the average spread and interest rate on the new debt
by 57 basis points, while also reducing estimated interest expense
on a go-forward basis by approximately $1.7
million, or 10.5% per annum.
- On June 30, 2017, NXRT completed
a buyout of BH Equities' 8.4% noncontrolling interest in 33
properties for $51.7M, consisting of
$49.7 million in cash and a
$2 million commitment to issue the
Company's operating partnership units, which will be redeemable
into cash or the Company's common stock, at the Company's election,
after one year.
- As previously announced, NXRT acquired Rockledge, a 708-unit apartment community in
Marietta, Georgia for
approximately $113.5 million on
June 30, 2017.
- During the second quarter, NXRT sold four properties: The
Miramar Apartments, Toscana, The Grove at Alban, and Twelve 6 Ten
at the Park for cumulative gross sales proceeds of $83.9M.
"During the second quarter, we took several significant steps to
improve NXRT's portfolio composition and long-term earnings
profile. Management took advantage of tighter lending spreads to
optimize its longer-term debt, reducing interest expense on
refinanced debt by approximately $1.7
million annually. We also acquired our partner BH Equities'
8.4% noncontrolling interest, which will simplify our financials
and allow the Company to capture the full earnings potential of our
portfolio. As previously reported, we also continued our
capital recycling efforts by acquiring Rockledge through a reverse 1031 exchange
which we expect to close out in the fourth quarter of this year,"
said NXRT Chairman and President, Jim
Dondero. "Finally, we want to thank BH for their great
partnership and continued significant contribution to the Company's
success, as we warmly welcome them into our shareholder base."
Second Quarter Financial Results
- Total revenues were $35.2 million
for the period, compared to $33.7
million for the prior year period.
- Net income was $9.9 million for
the period, compared to $16.6 million
for the prior year period. The change in our net income between the
periods primarily relates to increases in depreciation and
amortization expense, interest expense and loss on extinguishment
of debt and modification costs, and was partially offset by
increases in gain on sales of real estate and same store operating
results. 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 (see above).
- For the three months ended June 30,
2017, the Company reported earnings of $0.34 per diluted share.
- NOI¹ increased to $18.1 million
for the period, compared to $17.4
million for prior year period.
- Same store NOI¹ increased 6.2% to $15.3
million, over the prior year period.
- FFO¹ totaled $1.7 million, or
$0.08 per diluted share, compared to
$7.2 million, or $0.34 per diluted share, for the prior year
period.
- Core FFO¹ totaled $6.0 million,
or $0.28 per diluted share, compared
to $7.9 million, or $0.37 per diluted share, for the prior year
period.
- AFFO¹ totaled $7.4 million, or
$0.34 per diluted share, compared to
$8.3 million, or $0.39 per diluted share for the prior year
period.
- NXRT completed upgrades on 401 units and leased 259 upgraded
units during the second quarter of 2017, achieving an average
monthly rental increase of $95 per
unit and a 21.1% ROI on those units. Since inception, NXRT has
completed 4,524 upgrades and achieved an $96 average monthly rental increase per unit,
equating to a 21.8% ROI on all units leased through June 30, 2017.
Financial Results for the Six Months Ended June 30, 2017
- Total revenues were $72.2 million
for the period, compared to $67.2
million for the prior year period.
- Net income was $6.6 million for
the period, compared to $16.9 million
for the prior year period. The change in our net income between the
periods primarily relates to increases in depreciation and
amortization expense, interest expense and loss on extinguishment
of debt and modification costs, and was partially offset by
increases in gain on sales of real estate and same store operating
results. 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 (we acquired four properties in
the second half of 2016, one property in the first quarter of 2017
and one property in the second quarter of 2017; we sold three
properties in the second quarter of 2016, four properties in the
third quarter of 2016 and four properties in the second quarter of
2017).
- For the six months ended June 30,
2017, the Company reported earnings of $0.18 per diluted share.
- NOI¹ increased to $37.8 million
for the period, compared to $35.1
million for prior year period.
- Same store NOI¹ increased 7.2% to $30.7
million, over the prior year period.
- FFO¹ totaled $9.7 million, or
$0.46 per diluted share, compared to
$15.8 million, or $0.74 per diluted share, for the prior year
period.
- Core FFO¹ totaled $14.2 million,
or $0.66 per diluted share, compared
to $16.6 million, or $0.78 per diluted share, for the prior year
period.
- AFFO¹ totaled $16.5 million, or
$0.77 per diluted share, compared to
$17.2 million, or $0.81 per diluted share for the prior year
period.
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.
Same Store Properties Operating Results
There are 31 properties encompassing 10,211 units of apartment
space in our same store pool for the second quarter of 2017 (our
"Same Store" properties). The Same Store portfolio finished the
second quarter 2017 with physical occupancy of 93.3% and a weighted
average effective rent of $884 per
occupied unit. Quarter-ending occupancy was 40 bps lower than the
year prior, while effective rent per occupied unit rose by
$44, or 5.2%, over June 30, 2016.
The following table reflects the revenues, property operating
expenses and NOI for the three months ended June 30, 2017
and 2016 for our Same Store and Non-Same Store properties (dollars
in thousands):
|
|
For the Three
Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
$
Change
|
|
%
Change
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
25,136
|
|
$
|
23,744
|
|
$
|
1,392
|
|
|
5.9
|
%
|
Other
income
|
|
|
3,852
|
|
|
3,448
|
|
|
404
|
|
|
11.7
|
%
|
Same Store
revenues
|
|
|
28,988
|
|
|
27,192
|
|
|
1,796
|
|
|
6.6
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
|
5,372
|
|
|
5,660
|
|
|
(288)
|
|
|
-5.1
|
%
|
Other
income
|
|
|
874
|
|
|
805
|
|
|
69
|
|
|
8.6
|
%
|
Non-Same Store
revenues
|
|
|
6,246
|
|
|
6,465
|
|
|
(219)
|
|
|
-3.4
|
%
|
Total
revenues
|
|
|
35,234
|
|
|
33,657
|
|
|
1,577
|
|
|
4.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
|
7,880
|
|
|
7,544
|
|
|
336
|
|
|
4.5
|
%
|
Real estate taxes and
insurance
|
|
|
3,801
|
|
|
3,256
|
|
|
545
|
|
|
16.7
|
%
|
Property management
fees (1)
|
|
|
870
|
|
|
816
|
|
|
54
|
|
|
6.6
|
%
|
Property general and
administrative expenses (2)
|
|
|
1,112
|
|
|
1,140
|
|
|
(28)
|
|
|
-2.5
|
%
|
Same Store
operating expenses
|
|
|
13,663
|
|
|
12,756
|
|
|
907
|
|
|
7.1
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
|
1,785
|
|
|
2,147
|
|
|
(362)
|
|
|
-16.9
|
%
|
Real estate taxes and
insurance
|
|
|
1,292
|
|
|
834
|
|
|
458
|
|
|
54.9
|
%
|
Property management
fees (1)
|
|
|
187
|
|
|
197
|
|
|
(10)
|
|
|
-5.1
|
%
|
Property general and
administrative expenses (3)
|
|
|
218
|
|
|
342
|
|
|
(124)
|
|
|
-36.3
|
%
|
Non-Same Store
operating expenses
|
|
|
3,482
|
|
|
3,520
|
|
|
(38)
|
|
|
-1.1
|
%
|
Total operating
expenses
|
|
|
17,145
|
|
|
16,276
|
|
|
869
|
|
|
5.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
15,325
|
|
|
14,436
|
|
|
889
|
|
|
6.2
|
%
|
Non-Same
Store
|
|
|
2,764
|
|
|
2,945
|
|
|
(181)
|
|
|
-6.1
|
%
|
Total
NOI
|
|
$
|
18,089
|
|
$
|
17,381
|
|
$
|
708
|
|
|
4.1
|
%
|
|
|
(1)
|
Fees incurred to an
unaffiliated third party that is an affiliate of the former
noncontrolling interest members of the Company's joint
ventures.
|
(2)
|
For the three months
ended June 30, 2017 and 2016, excludes approximately $188,000 and
$110,000, respectively, of expenses that are not reflective of the
ongoing operations of the properties or are incurred on behalf of
the Company at the property for expenses such as legal,
professional and franchise tax fees.
|
(3)
|
For the three months
ended June 30, 2017 and 2016, excludes approximately $58,000 and
$20,000, respectively, of expenses that are not reflective of the
ongoing operations of the properties or are incurred on behalf of
the Company at the property for expenses such as legal,
professional and franchise tax fees.
|
The following table reflects the revenues, property operating
expenses and NOI for the six months ended June 30, 2017
and 2016 for our Same Store and Non-Same Store properties (dollars
in thousands):
|
|
For the Six Months
Ended June 30,
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
$
Change
|
|
%
Change
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
49,712
|
|
$
|
46,941
|
|
$
|
2,771
|
|
|
5.9
|
%
|
Other
income
|
|
|
7,763
|
|
|
6,752
|
|
|
1,011
|
|
|
15.0
|
%
|
Same Store
revenues
|
|
|
57,475
|
|
|
53,693
|
|
|
3,782
|
|
|
7.0
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
|
12,704
|
|
|
11,833
|
|
|
871
|
|
|
7.4
|
%
|
Other
income
|
|
|
2,046
|
|
|
1,642
|
|
|
404
|
|
|
24.6
|
%
|
Non-Same Store
revenues
|
|
|
14,750
|
|
|
13,475
|
|
|
1,275
|
|
|
9.5
|
%
|
Total
revenues
|
|
|
72,225
|
|
|
67,168
|
|
|
5,057
|
|
|
7.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
|
15,596
|
|
|
14,759
|
|
|
837
|
|
|
5.7
|
%
|
Real estate taxes and
insurance
|
|
|
7,260
|
|
|
6,598
|
|
|
662
|
|
|
10.0
|
%
|
Property management
fees (1)
|
|
|
1,727
|
|
|
1,614
|
|
|
113
|
|
|
7.0
|
%
|
Property general and
administrative expenses (2)
|
|
|
2,164
|
|
|
2,046
|
|
|
118
|
|
|
5.8
|
%
|
Same Store
operating expenses
|
|
|
26,747
|
|
|
25,017
|
|
|
1,730
|
|
|
6.9
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
|
3,940
|
|
|
4,314
|
|
|
(374)
|
|
|
-8.7
|
%
|
Real estate taxes and
insurance
|
|
|
2,798
|
|
|
1,755
|
|
|
1,043
|
|
|
59.4
|
%
|
Property management
fees (1)
|
|
|
443
|
|
|
404
|
|
|
39
|
|
|
9.7
|
%
|
Property general and
administrative expenses (3)
|
|
|
521
|
|
|
619
|
|
|
(98)
|
|
|
-15.8
|
%
|
Non-Same Store
operating expenses
|
|
|
7,702
|
|
|
7,092
|
|
|
610
|
|
|
8.6
|
%
|
Total operating
expenses
|
|
|
34,449
|
|
|
32,109
|
|
|
2,340
|
|
|
7.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
30,728
|
|
|
28,676
|
|
|
2,052
|
|
|
7.2
|
%
|
Non-Same
Store
|
|
|
7,048
|
|
|
6,383
|
|
|
665
|
|
|
10.4
|
%
|
Total
NOI
|
|
$
|
37,776
|
|
$
|
35,059
|
|
$
|
2,717
|
|
|
7.7
|
%
|
|
|
(1)
|
Fees incurred to an
unaffiliated third party that is an affiliate of the former
noncontrolling interest members of the Company's joint
ventures.
|
(2)
|
For the six months
ended June 30, 2017 and 2016, excludes approximately $352,000 and
$240,000, respectively, of expenses that are not reflective of the
ongoing operations of the properties or are incurred on behalf of
the Company at the property for expenses such as legal,
professional and franchise tax fees.
|
(3)
|
For the six months
ended June 30, 2017 and 2016, excludes approximately $125,000 and
$41,000, respectively, of expenses that are not reflective of the
ongoing operations of the properties or are incurred on behalf of
the Company at the property for expenses such as legal,
professional and franchise tax fees.
|
Acquisition of Property
On June 30, 2017, NexPoint through
its operating partnership (the "OP"), acquired Rockledge from an unaffiliated third-party for
approximately $113.5 million.
Rockledge consists of 708 units
situated on 78.1 acres of contiguous land within Atlanta's second largest Class A Office
submarket (Cumberland/Galleria), approximately one mile from the
new Atlanta Braves stadium (Sun Trust Park), with direct access to
the Chattahoochee River National Recreation Area. Originally
developed in three phases by Post Properties, Rockledge had average monthly rents of
$1,148 and 93.9% physical occupancy
at acquisition.
The acquisition was structured as a reverse 1031 exchange to
facilitate the Company's continued plan to recycle capital in a tax
efficient manner from dispositions of its rehabbed assets into
well-located, "covered-land" assets with value-add potential in the
Company's core target markets. The Company funded the purchase
price with cash on hand, and borrowings of approximately
$113.5 million under a bridge
facility with KeyBank National Association and a new first mortgage
with the Federal Home Loan Mortgage Corporation, which the Company
entered into on June 30, 2017.
Following the completion of the reverse 1031 exchange, management
expects the Rockledge
loan-to-value ratio to stabilize at approximately 55%.
Property
Name
|
|
Location
|
|
Date of
Acquisition
|
|
Purchase
Price
|
|
Mortgage
|
|
Bridge
|
|
Effective
Ownership
|
Rockledge
Apartments
|
|
Marietta,
Georgia
|
|
June 30,
2017
|
|
$
|
113,500
|
|
|
68,100
|
|
|
44,500
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disposition of Property
As mentioned above, the Company sold four properties in April
for cumulative gross sale proceeds of $83.9
million, while the combined returns totaled an IRR of
approximately 40.7% and a 2.41x multiple on invested capital.
Interest Rate Swap Agreements
In order to fix a portion of, and mitigate the risk associated
with, our floating rate indebtedness (without incurring substantial
prepayment penalties or defeasance costs typically associated with
fixed rate indebtedness when repaid early or refinanced), we,
through our OP, have entered into seven interest rate swap
transactions with KeyBank with a combined notional amount of
$650.0 million, $550.0 million of which was effective as of
June 30, 2017.
The following table contains summary information regarding the
interest rate swap transactions (dollars in thousands):
Trade
Date
|
|
Effective
Date
|
|
Termination
Date
|
|
Notional
Amount
|
|
Fixed
Rate
|
|
|
Floating Rate Option (1)
|
May 13,
2016
|
|
July 1,
2016
|
|
June 1,
2021
|
|
$
|
100,000
|
|
|
1.1055
|
%
|
|
One-month
LIBOR
|
June 13,
2016
|
|
July 1,
2016
|
|
June 1,
2021
|
|
|
100,000
|
|
|
1.0210
|
%
|
|
One-month
LIBOR
|
June 30,
2016
|
|
July 1,
2016
|
|
June 1,
2021
|
|
|
100,000
|
|
|
0.9000
|
%
|
|
One-month
LIBOR
|
August 12,
2016
|
|
September 1,
2016
|
|
June 1,
2021
|
|
|
100,000
|
|
|
0.9560
|
%
|
|
One-month
LIBOR
|
March 27,
2017
|
|
April 1,
2017
|
|
April 1,
2022
|
|
|
100,000
|
|
|
1.9570
|
%
|
|
One-month
LIBOR
|
April 3,
2017
|
|
May 1,
2017
|
|
April 1,
2022
|
|
|
50,000
|
|
|
1.9610
|
%
|
|
One-month
LIBOR
|
June 14,
2017
|
|
July 1,
2017
|
|
July 1,
2022
|
|
|
100,000
|
|
|
1.7820
|
%
|
|
One-month
LIBOR
|
|
|
|
|
|
|
$
|
650,000
|
|
|
1.3388
|
%
|
(2)
|
|
|
|
(1)
|
As of June 30, 2017,
one-month LIBOR was 1.2239%.
|
(2)
|
Represents the
weighted average fixed rate of the interest rate swaps.
|
Value-Add Programs
For the three months ended June 30,
2017, we completed full and partial renovations on 401 units
at an average cost of $5,459 per
renovated unit. Since inception, for the properties in our
portfolio as of June 30, 2017, we
have completed full and partial renovations on 4,524 units at an
average cost of $5,116 per renovated
unit that has been leased as of June 30,
2017. We have achieved average rent growth of 11.7%, or a
$96 average monthly rental increase
per unit, on all units renovated and leased from inception through
June 30, 2017, resulting in a return
on investment on capital expended for interior renovations of
21.8%.
The following table sets forth a summary of our capital
expenditures related to our value-add program for the three and six
months ended June 30, 2017 and 2016
(in thousands):
|
|
For the Three
Months Ended June
30,
|
|
|
For the Six
Months Ended June
30,
|
|
Rehab
Expenditures
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Interior
|
(1)
|
$
|
2,318
|
|
|
$
|
2,560
|
|
(1)
|
$
|
4,764
|
|
|
$
|
4,697
|
|
Exterior and common
area
|
|
|
2,497
|
|
|
|
2,011
|
|
|
|
3,901
|
|
|
|
6,332
|
|
Total rehab
expenditures
|
|
$
|
4,815
|
|
|
$
|
4,571
|
|
|
$
|
8,665
|
|
|
$
|
11,029
|
|
|
|
(1)
|
Includes total
capital expenditures during the period on completed and in-progress
interior rehabs. For the three months ended June 30, 2017 and 2016,
we completed full and partial interior rehabs on 401 and 550 units,
respectively. For the six months ended June 30, 2017 and 2016, we
completed full and partial interior rehabs on 831 and 937 units,
respectively.
|
Third Quarter 2017 Dividend
On July 31, 2017, NXRT's board of
directors declared a quarterly dividend of $0.220 per share of NXRT common stock. The
dividend will be paid on September 29,
2017 to stockholders of record on September 15, 2017.
Subsequent Events
Sale of Multifamily Property
The Company sold the following property subsequent to
June 30, 2017 (thousands)
(unaudited):
Property Name
(1)
|
|
Location
|
|
Date of
Sale
|
|
Sales
Price
|
|
Debt Outstanding (2)
|
|
Net Cash Proceeds
(3)
|
|
Real Estate Carrying Value,
net (2)
|
|
Regatta
Bay
|
(4)
|
Seabrook,
Texas
|
|
July 14,
2017
|
|
$
|
28,200
|
|
$
|
14,000
|
|
$
|
27,860
|
(5)
|
$
|
17,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Property was
classified as held for sale as of June 30, 2017.
|
(2)
|
As of June 30,
2017.
|
(3)
|
Represents sales
price, net of closing costs.
|
(4)
|
The Company completed
the reverse 1031 Exchange of Hollister Place with the sale of
Regatta Bay. Legal title to Hollister Place was transferred to the
Company on July 14, 2017.
|
(5)
|
The Company used
proceeds from the sale to pay down $11.3 million of the $65.9
million outstanding on its 2017 Bridge Facility.
|
Revised 2017 Full Year Guidance
The Company has revised full year 2017 guidance range for
Revenue, Net Income, NOI1, FFO1, Core
FFO1 and AFFO1 as follows due to the impact
of various transformative acts the Company undertook during the
second quarter (amounts in $ thousands, except per share
data):
|
Revised FY
2017
|
|
Prior
|
|
Low-End
|
Mid-Point
|
High-End
|
|
Mid-Point
|
Revenue
(a)
|
143,000
|
144,000
|
145,000
|
|
143,000
|
Net Income (a)
(b)
|
52,000
|
54,000
|
57,000
|
|
27,250
|
NOI
(a)
|
75,250
|
76,250
|
77,250
|
|
76,000
|
FFO/Share –
diluted (c)
|
1.12
|
1.16
|
1.20
|
|
1.60
|
Core FFO/Share –
diluted (d)
|
1.35
|
1.40
|
1.45
|
|
1.62
|
AFFO/Share –
diluted (e)
|
1.60
|
1.65
|
1.70
|
|
1.85
|
Acquisitions
(f)
|
140,000
|
170,000
|
200,000
|
|
24,500
|
Dispositions
(g)
|
225,000
|
227,500
|
230,000
|
|
115,000
|
|
|
(a)
|
Revenue, Net Income
& NOI: revised slightly upwards due to favorable revenue growth
during the first half of 2017.
|
(b)
|
Net Income: revised
upwards from the previous midpoint of $27,250 due to future
dispositions expected to take place in the second half of 2017 as
the Company continues to recycle capital in an accretive
manner.
|
(c)
|
FFO: Due to the
one-time expenses related to the refinancing of 22 properties and
additional repayment penalties related to property dispositions,
the Company revised FFO guidance downward from a previous midpoint
of $1.60/share to $1.15 share. The refinancing enabled the Company
to achieve a 0.57% reduction in the weighted average cost of debt
which is equivalent to $1.7M in annual interest expense cost
savings or $0.08 per share of FFO. Higher real estate taxes as well
as expenses related to our interest rate swaps also contributed to
the reduction in FFO guidance.
|
(d)
|
Core FFO: The
revision to our Core FFO guidance primarily relates to a decrease
in FFO, partially offset by loss on extinguishment of debt and
modification costs.
|
(e)
|
AFFO: The change to
our AFFO guidance primarily relates to a decrease in Core FFO,
partially offset by increase in equity-based compensation
expense.
|
(f)
|
Acquisition activity
grew to $138.0 million with the completion of the Rockledge
acquisition.
|
(g)
|
With the completion
of the Regatta Bay sale, the Company met its original full year
disposition target; however, the Company is now increasing full
year 2017 estimates in response to recent activity, including the
Rockledge acquisition and buyout of BH Equities' noncontrolling
interest. The Company expects to use the net sale proceeds from the
disposition of properties held for sale as of June 30, 2017 to
complete the reverse 1031 exchanges effectuated to finance a
portion of the consideration for the Rockledge acquisition, to
extinguish the 2017 Bridge Facility, and to pay down the
outstanding balance on the $30 Million Credit Facility.
|
See the "Definitions and Reconciliations" section of this press
release for a reconciliation of 2017 Full Year Non-GAAP Guidance to
2017 Full Year net income guidance. For further information
regarding the transformative actions undertaken by the Company
during the second quarter 2017, the expected results of the actions
and resulting impact to Full Year 2017 earnings, please see the
Company's "Supplemental Information: Second Quarter 2017."
Additional information on second quarter results and 2017
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: Second Quarter 2017" can be found in
the Financial Materials section under Investor Relations on the
Company's website at www.nexpointliving.com.
Second Quarter Earnings Conference Call
NXRT will host a call to discuss its second quarter results on
Tuesday, August 1, 2017 at
11:00 a.m. ET. The number to call for
this interactive teleconference is (888) 855-5838, or for
international callers, (719) 325-2351 in each case using passcode
8781957. A live audio webcast of the call will be available online
at the Company's website, http://www.nexpointliving.com (under
"Investor Relations").
A replay of the call will be available approximately two hours
after the call through Tuesday, August 8,
2017, by dialing (888) 203-1112, or for international
callers, (719) 457-0820 and entering the confirmation number,
8781957.
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," "intend" and similar
expressions, and variations or negatives of these words. These
forward-looking statements include, but are not limited to,
statements regarding expected property acquisitions and
dispositions and the use of proceeds therefrom, expected results
from the buyout of BH Equities' minority interest, and NXRT's
strategy and guidance for financial results for the full year 2017.
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.
Select Financial Statements for the Quarter Ended
June 30, 2017
NEXPOINT
RESIDENTIAL TRUST, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
(in thousands,
except share and per share amounts)
|
|
|
|
|
|
June 30,
2017
|
|
December 31,
2016
|
|
|
|
(Unaudited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Operating Real Estate
Investments
|
|
|
|
|
|
|
|
Land (including from
VIEs of $20,233 and $99,803, respectively)
|
|
$
|
169,754
|
|
$
|
165,863
|
|
Buildings and
improvements (including from VIEs of $112,935 and $425,945,
respectively)
|
|
|
781,683
|
|
|
733,374
|
|
Intangible lease
assets (including from VIEs of $3,953 and $3,926,
respectively)
|
|
|
3,953
|
|
|
5,140
|
|
Construction in
progress (including from VIEs of $11 and $1,891,
respectively)
|
|
|
2,075
|
|
|
2,828
|
|
Furniture, fixtures,
and equipment (including from VIEs of $1,761 and $21,289,
respectively)
|
|
|
38,856
|
|
|
36,616
|
|
Total Gross Operating
Real Estate Investments
|
|
|
996,321
|
|
|
943,821
|
|
Accumulated
depreciation and amortization (including from VIEs of $1,119 and
$32,053, respectively)
|
|
|
(70,729)
|
|
|
(60,214)
|
|
Total Net Operating
Real Estate Investments
|
|
|
925,592
|
|
|
883,607
|
|
Real estate held for
sale, net of accumulated depreciation of $9,903 and $6,099,
respectively (including from VIEs of $0 and $60,578,
respectively)
|
|
|
100,091
|
|
|
79,430
|
|
Total Net Real Estate
Investments
|
|
|
1,025,683
|
|
|
963,037
|
|
Cash and cash
equivalents (including from VIEs of $314 and $9,394,
respectively)
|
|
|
26,254
|
|
|
22,705
|
|
Restricted cash
(including from VIEs of $1,181 and $22,387,
respectively)
|
|
|
29,447
|
|
|
32,556
|
|
Accounts receivable
(including from VIEs of $120 and $2,009, respectively)
|
|
|
2,186
|
|
|
3,008
|
|
Prepaid and other
assets (including from VIEs of $193 and $905,
respectively)
|
|
|
3,070
|
|
|
1,678
|
|
Fair market value of
interest rate swaps
|
|
|
11,941
|
|
|
12,413
|
|
TOTAL
ASSETS
|
|
$
|
1,098,581
|
|
$
|
1,035,397
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Mortgages payable, net
(including from VIEs of $81,052 and $306,235,
respectively)
|
|
$
|
711,752
|
|
$
|
367,453
|
|
Mortgages payable held
for sale, net (including from VIEs of $0 and $47,421,
respectively)
|
|
|
77,034
|
|
|
55,685
|
|
Credit facilities,
net
|
|
|
29,764
|
|
|
310,492
|
|
Bridge facility,
net
|
|
|
65,612
|
|
|
29,874
|
|
Accounts payable and
other accrued liabilities (including from VIEs of $103 and $2,232,
respectively)
|
|
|
4,956
|
|
|
5,551
|
|
Accrued real estate
taxes payable (including from VIEs of $718 and $2,724,
respectively)
|
|
|
8,600
|
|
|
6,534
|
|
Accrued interest
payable (including from VIEs of $0 and $855,
respectively)
|
|
|
601
|
|
|
1,067
|
|
Security deposit
liability (including from VIEs of $154 and $774,
respectively)
|
|
|
1,464
|
|
|
1,364
|
|
Prepaid rents
(including from VIEs of $71 and $728, respectively)
|
|
|
1,566
|
|
|
1,275
|
|
Obligation to issue
operating partnership units (1)
|
|
|
2,000
|
|
|
—
|
|
Total
Liabilities
|
|
|
903,349
|
|
|
779,295
|
|
NexPoint Residential
Trust, Inc. stockholders' 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; 21,293,825 shares
issued
|
|
|
213
|
|
|
213
|
|
Additional paid-in
capital
|
|
|
211,729
|
|
|
241,450
|
|
Accumulated
deficit
|
|
|
(20,242)
|
|
|
(14,584)
|
|
Accumulated other
comprehensive income
|
|
|
8,119
|
|
|
9,052
|
|
Common stock held in
treasury at cost; 250,156 shares
|
|
|
(4,587)
|
|
|
(4,587)
|
|
Noncontrolling
interests
|
|
|
—
|
|
|
24,558
|
|
Total
Equity
|
|
|
195,232
|
|
|
256,102
|
|
TOTAL LIABILITIES
AND EQUITY
|
|
$
|
1,098,581
|
|
$
|
1,035,397
|
|
|
|
(1)
|
Common units of the
Company's operating partnership were issued on August 1,
2017.
|
NEXPOINT
RESIDENTIAL TRUST, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
AND COMPREHENSIVE
INCOME
|
|
(in thousands,
except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months
Ended June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
30,508
|
|
$
|
29,404
|
|
$
|
62,416
|
|
$
|
58,774
|
|
Other
income
|
|
|
4,726
|
|
|
4,253
|
|
|
9,809
|
|
|
8,394
|
|
Total
revenues
|
|
|
35,234
|
|
|
33,657
|
|
|
72,225
|
|
|
67,168
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
|
9,665
|
|
|
9,691
|
|
|
19,536
|
|
|
19,073
|
|
Real estate taxes and
insurance
|
|
|
5,093
|
|
|
4,090
|
|
|
10,058
|
|
|
8,353
|
|
Property management
fees (1)
|
|
|
1,057
|
|
|
1,013
|
|
|
2,170
|
|
|
2,018
|
|
Advisory and
administrative fees (2)
|
|
|
1,849
|
|
|
1,630
|
|
|
3,674
|
|
|
3,246
|
|
Corporate general and
administrative expenses
|
|
|
1,886
|
|
|
844
|
|
|
3,219
|
|
|
1,626
|
|
Property general and
administrative expenses
|
|
|
1,576
|
|
|
1,612
|
|
|
3,162
|
|
|
2,946
|
|
Depreciation and
amortization
|
|
|
12,208
|
|
|
8,084
|
|
|
24,651
|
|
|
17,696
|
|
Total
expenses
|
|
|
33,334
|
|
|
26,964
|
|
|
66,470
|
|
|
54,958
|
|
Operating
income
|
|
|
1,900
|
|
|
6,693
|
|
|
5,755
|
|
|
12,210
|
|
Interest
expense
|
|
|
(7,063)
|
|
|
(5,633)
|
|
|
(14,222)
|
|
|
(10,859)
|
|
Loss on extinguishment
of debt and modification costs
|
|
|
(4,803)
|
|
|
(834)
|
|
|
(4,803)
|
|
|
(834)
|
|
Gain on sales of real
estate
|
|
|
19,896
|
|
|
16,370
|
|
|
19,896
|
|
|
16,370
|
|
Net
income
|
|
|
9,930
|
|
|
16,596
|
|
|
6,626
|
|
|
16,887
|
|
Net income
attributable to noncontrolling interests
|
|
|
2,524
|
|
|
2,006
|
|
|
2,836
|
|
|
2,312
|
|
Net income
attributable to common stockholders
|
|
$
|
7,406
|
|
$
|
14,590
|
|
$
|
3,790
|
|
$
|
14,575
|
|
Other
comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized losses on
interest rate derivatives
|
|
|
(2,095)
|
|
|
(12)
|
|
|
(1,049)
|
|
|
(44)
|
|
Total
comprehensive income
|
|
|
7,835
|
|
|
16,584
|
|
|
5,577
|
|
|
16,843
|
|
Comprehensive
income attributable to noncontrolling interests
|
|
|
2,936
|
|
|
2,005
|
|
|
2,720
|
|
|
2,308
|
|
Comprehensive
income attributable to common stockholders
|
|
$
|
4,899
|
|
$
|
14,579
|
|
$
|
2,857
|
|
$
|
14,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
|
21,044
|
|
|
21,294
|
|
|
21,044
|
|
|
21,294
|
|
Weighted average
common shares outstanding - diluted
|
|
|
21,473
|
|
|
21,294
|
|
|
21,383
|
|
|
21,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
- basic
|
|
$
|
0.35
|
|
$
|
0.69
|
|
$
|
0.18
|
|
$
|
0.68
|
|
Earnings per share
- diluted
|
|
$
|
0.34
|
|
$
|
0.69
|
|
$
|
0.18
|
|
$
|
0.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
0.220
|
|
$
|
0.206
|
|
$
|
0.440
|
|
$
|
0.412
|
|
|
|
(1)
|
Fees incurred to an
unaffiliated third party that is an affiliate of the former
noncontrolling interest members of the Company's joint
ventures.
|
(2)
|
Fees incurred to the
Company's adviser.
|
Definitions and Reconciliations
This press release includes analysis of net operating income, or
NOI, funds from operations, or FFO, core funds from operations, or
Core FFO, and adjusted funds from operations, or AFFO, 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 NOI, FFO, Core FFO, and AFFO, 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 Same Store
properties, which are defined as those that are stabilized and
comparable for both the current and the prior reporting year. Same
Store analysis for the three and six months ended June 30, 2017 includes 31 properties totaling
10,211 units, or approximately 80% of the Company's 12,735
units.
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) non-operating fees to affiliates, (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, and (7) expenses that are not
reflective of the ongoing operations of the properties or incurred
on behalf of the Company at the property level 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 Same Store NOI
for the three and six months ended June 30,
2017 and 2016 to net income, the most directly comparable
GAAP financial measure (in thousands):
|
|
For the Three
Months Ended June
30,
|
|
For the Six
Months
Ended June 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Net income
|
|
$
|
9,930
|
|
$
|
16,596
|
|
$
|
6,626
|
|
$
|
16,887
|
|
Adjustments to
reconcile net income to NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advisory and
administrative fees
|
|
|
1,849
|
|
|
1,630
|
|
|
3,674
|
|
|
3,246
|
|
Corporate
general and administrative expenses
|
|
|
1,886
|
|
|
844
|
|
|
3,219
|
|
|
1,626
|
|
Property
general and administrative expenses
|
(1)
|
|
246
|
|
|
130
|
|
|
477
|
|
|
281
|
|
Depreciation
and amortization
|
|
|
12,208
|
|
|
8,084
|
|
|
24,651
|
|
|
17,696
|
|
Interest
expense
|
|
|
7,063
|
|
|
5,633
|
|
|
14,222
|
|
|
10,859
|
|
Loss on
extinguishment of debt and modification costs
|
|
|
4,803
|
|
|
834
|
|
|
4,803
|
|
|
834
|
|
Gain on sales
of real estate
|
|
|
(19,896)
|
|
|
(16,370)
|
|
|
(19,896)
|
|
|
(16,370)
|
|
NOI
|
|
$
|
18,089
|
|
$
|
17,381
|
|
$
|
37,776
|
|
$
|
35,059
|
|
Less Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
(6,246)
|
|
|
(6,465)
|
|
|
(14,750)
|
|
|
(13,475)
|
|
Operating
expenses
|
|
|
3,482
|
|
|
3,520
|
|
|
7,702
|
|
|
7,092
|
|
Same Store
NOI
|
|
$
|
15,325
|
|
$
|
14,436
|
|
$
|
30,728
|
|
$
|
28,676
|
|
|
|
(1)
|
Adjustment to net
income to exclude certain property general and administrative
expenses that are not reflective of the ongoing operations of the
properties or are incurred on behalf of the Company 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 noncontrolling interests and show the 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 regular basis or are otherwise not
representative of the ongoing 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 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 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.
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.
The following table reconciles our calculations of FFO, Core FFO
and AFFO to net income, the most directly comparable GAAP financial
measure, for the three and six months ended June 30, 2017 and 2016 (in thousands, except per
share amounts):
|
|
For the Three
Months Ended June 30,
|
|
|
For the Six Months
Ended June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net income
|
|
$
|
9,930
|
|
|
$
|
16,596
|
|
|
$
|
6,626
|
|
|
$
|
16,887
|
|
Depreciation and
amortization
|
|
|
12,208
|
|
|
|
8,084
|
|
|
|
24,651
|
|
|
|
17,696
|
|
Gain on sales of real
estate
|
|
|
(19,896)
|
|
|
|
(16,370)
|
|
|
|
(19,896)
|
|
|
|
(16,370)
|
|
Adjustment for
noncontrolling interests
|
|
|
(526)
|
|
|
|
(1,120)
|
|
|
|
(1,649)
|
|
|
|
(2,380)
|
|
FFO attributable
to common stockholders
|
|
|
1,716
|
|
|
|
7,190
|
|
|
|
9,732
|
|
|
|
15,833
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per share -
basic
|
|
$
|
0.08
|
|
|
$
|
0.34
|
|
|
$
|
0.46
|
|
|
$
|
0.74
|
|
FFO per share -
diluted
|
|
$
|
0.08
|
|
|
$
|
0.34
|
|
|
$
|
0.46
|
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on
extinguishment of debt and modification costs
|
|
|
4,803
|
|
|
|
834
|
|
|
|
4,803
|
|
|
|
834
|
|
Change in fair value
on derivative instruments - ineffective portion
|
|
|
(85)
|
|
|
|
—
|
|
|
|
(65)
|
|
|
|
—
|
|
Amortization of
deferred financing costs - acquisition term notes
|
|
|
32
|
|
|
|
—
|
|
|
|
126
|
|
|
|
—
|
|
Adjustment for
noncontrolling interests
|
|
|
(424)
|
|
|
|
(83)
|
|
|
|
(426)
|
|
|
|
(83)
|
|
Core FFO
attributable to common stockholders
|
|
|
6,042
|
|
|
|
7,941
|
|
|
|
14,170
|
|
|
|
16,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO per share
- basic
|
|
$
|
0.29
|
|
|
$
|
0.37
|
|
|
$
|
0.67
|
|
|
$
|
0.78
|
|
Core FFO per share
- diluted
|
|
$
|
0.28
|
|
|
$
|
0.37
|
|
|
$
|
0.66
|
|
|
$
|
0.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
deferred financing costs - long term debt
|
|
|
412
|
|
|
|
375
|
|
|
|
850
|
|
|
|
699
|
|
Equity-based
compensation expense
|
|
|
984
|
|
|
|
—
|
|
|
|
1,592
|
|
|
|
—
|
|
Adjustment for
noncontrolling interests
|
|
|
(36)
|
|
|
|
(31)
|
|
|
|
(69)
|
|
|
|
(56)
|
|
AFFO attributable
to common stockholders
|
|
|
7,402
|
|
|
|
8,285
|
|
|
|
16,543
|
|
|
|
17,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per share -
basic
|
|
$
|
0.35
|
|
|
$
|
0.39
|
|
|
$
|
0.79
|
|
|
$
|
0.81
|
|
AFFO per share -
diluted
|
|
$
|
0.34
|
|
|
$
|
0.39
|
|
|
$
|
0.77
|
|
|
$
|
0.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
|
21,044
|
|
|
|
21,294
|
|
|
|
21,044
|
|
|
|
21,294
|
|
Weighted average
common shares outstanding - diluted
|
|
|
21,473
|
|
|
|
21,294
|
|
|
|
21,383
|
|
|
|
21,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
0.220
|
|
|
$
|
0.206
|
|
|
$
|
0.440
|
|
|
$
|
0.412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO Coverage -
diluted
|
|
0.36x
|
|
|
1.64x
|
|
|
1.03x
|
|
|
1.8x
|
|
Core FFO Coverage
- diluted
|
|
1.28x
|
|
|
1.81x
|
|
|
1.51x
|
|
|
1.89x
|
|
AFFO Coverage -
diluted
|
|
1.57x
|
|
|
1.89x
|
|
|
1.76x
|
|
|
1.96x
|
|
The three months ended June 30,
2017 as compared to the three months ended June 30, 2016
FFO was $1.7 million for the three
months ended June 30, 2017 compared
to $7.2 million for the three months
ended June 30, 2016, which was a decrease of approximately
$5.5 million. The change in our FFO
between periods primarily relates to increases in total property
operating expenses of approximately $1.0
million, loss on extinguishment of debt and modification
costs of approximately $4.0 million
and corporate general and administrative expenses of approximately
$1.0 million, and was partially
offset by an increase in total revenues of approximately
$1.6 million and adjustments for
amounts attributable to noncontrolling interests. The increase in
loss on extinguishment of debt and modification costs primarily
relates to $2.2 million of debt
modification costs incurred, which were expensed, and $1.7 million of prepayment penalties incurred in
connection with the Freddie Refinance. The increase in corporate
general and administrative expenses primarily relates to
$1.0 million of equity-based
compensation expense we recognized during the period in 2017.
Core FFO was $6.0 million for the
three months ended June 30, 2017
compared to $7.9 million for the
three months ended June 30, 2016,
which was a decrease of approximately $1.9
million. The change in our Core FFO between periods
primarily relates to a decrease in FFO, partially offset by a
$4.0 million increase in loss on
extinguishment of debt and modification costs.
AFFO was $7.4 million for the
three months ended June 30, 2017
compared to $8.3 million for the
three months ended June 30, 2016, which was a decrease of
approximately $0.9 million. The
change in our AFFO between periods primarily relates to a decrease
in Core FFO, partially offset by a $1.0
million increase in equity-based compensation expense.
The six months ended June 30,
2017 as compared to the six months ended June 30, 2016
FFO was $9.7 million for the six
months ended June 30, 2017 compared
to $15.8 million for the six months
ended June 30, 2016, which was a decrease of approximately
$5.1 million. The change in our FFO
between periods primarily relates to increases in total property
operating expenses of approximately $2.5
million, loss on extinguishment of debt and modification
costs of approximately $4.0 million
and corporate general and administrative expenses of approximately
$1.6 million, and was partially
offset by an increase in total revenues of approximately
$5.1 million and adjustments for
amounts attributable to noncontrolling interests. The increase in
loss on extinguishment of debt and modification costs primarily
relates to $2.2 million of debt
modification costs incurred, which were expensed, and $1.7 million of prepayment penalties incurred in
connection with the Freddie Refinance. The increase in corporate
general and administrative expenses primarily relates to
$1.6 million of equity-based
compensation expense we recognized during the period in 2017.
Core FFO was $14.2 million for the
six months ended June 30, 2017
compared to $16.6 million for the six
months ended June 30, 2016, which was
a decrease of approximately $2.4
million. The change in our Core FFO between periods
primarily relates to a decrease in FFO, partially offset by a
$4.0 million increase in loss on
extinguishment of debt and modification costs.
AFFO was $16.5 million for the six
months ended June 30, 2017 compared
to $17.2 million for the six months
ended June 30, 2016, which was a decrease of approximately
$0.7 million. The change in our AFFO
between periods primarily relates to a decrease in Core FFO,
partially offset by a $1.6 million
increase in equity-based compensation expense.
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.
There are 31 properties meeting this definition for the second
quarter of 2017: 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, The Arbors, The Knolls, The Crossings
at Holcomb Bridge, The Crossings, Regatta Bay, Sabal Palm at Lake
Buena Vista, Southpoint Reserve at Stoney Creek, Cornerstone, The
Preserve at Terrell Mill, The Ashlar, Heatherstone, Versailles, Seasons 704, Madera Point, The Pointe at the Foothills, and
Venue at 8651.
Reconciliation of Guidance for 2017 NOI, FFO, Core FFO and
AFFO
The Company anticipates that net income will be in the range
between $52.0 million to $57.0
million for the full year. The difference between net income
and FFO is depreciation and amortization, which is anticipated to
be $49.0 million to $51.0 million for
the full year 2017, and gain on sales of real estate, which is
anticipated to be approximately $78.0
million for the full year 2017. The difference between FFO
and Core FFO is loss on extinguishment of debt and modification
costs, which are anticipated to total approximately $4.8 million for the full year 2017, amortization
of deferred financing costs on short term financing, to the extent
excluded from FFO, which is anticipated to total approximately
$0.1 million for the full year 2017.
The difference between Core FFO and AFFO is amortization of
deferred financing costs on long-term debt financing, to the extent
excluded from FFO and Core FFO, which is anticipated to total
approximately $2.3 million for the
full year 2017, and equity-based compensation expenses, which is
anticipated to total approximately $3.1
million for the full year 2017. The difference between net
income and NOI is advisory and administrative fees, corporate
general and administrative expenses, certain property general and
administrative expenses, depreciation and amortization, interest
expense, loss on extinguishment of debt and modification costs, and
gain on sales of real estate, which are anticipated to total
approximately $20.7 million to $23.7
million for the full year 2017. 2017 Full Year
Guidance assumes between $140.0 million and
$200.0 million of acquisition activity and between
$225.0 million and $230.0 million of
disposition activity for the full year 2017. For purposes of
calculating per share data, the Company assumes a weighted average
diluted share count of 21.40 million for the full year 2017.
In this release, "we," "us," "our," the "Company," "NexPoint
Residential Trust," and "NXRT" each refer to NexPoint Residential
Trust, Inc., a Maryland
corporation.
Contact:
Marilynn
Meek
Financial Relations Board
212-827-3773
View original
content:http://www.prnewswire.com/news-releases/nexpoint-residential-trust-inc-reports-second-quarter-results-300497257.html
SOURCE NexPoint Residential Trust, Inc.