DALLAS, July 31, 2018 /PRNewswire/ -- NexPoint
Residential Trust, Inc. (NYSE:NXRT) reported financial results for
the second quarter ended June 30,
2018.
Highlights
- NXRT reported Net Loss, FFO1, Core FFO1
and AFFO1 of $(1.7)M,
$9.3M, $8.7M and $10.2M,
respectively, attributable to common stockholders for the quarter
ended June 30, 2018.
- For the three months ended June 30,
2018, Q2 Same Store properties2 average effective
rent, occupancy, total revenue and NOI1 increased 3.6%,
1.6%, 4.7% and 11.0%, respectively, over the prior year
period.
- Q2 Same Store expenses decreased 2.2% in the second quarter due
to implementation of the Freddie Mac Green-Up Program and lower
property taxes through aggressive challenges of assessed
values.
- The weighted average effective monthly rent per unit across all
32 properties held as of June 30,
2018 (the "Portfolio"), consisting of 11,471 units, was
$967, while physical occupancy was
94.2%.
- NXRT paid a second quarter dividend of $0.25 per share of common stock on June 29, 2018.
- During the second quarter, for the properties in our Portfolio,
NXRT completed 379 full and partial upgrades and leased 215
upgraded units, achieving $94 average
monthly rent premiums and a 24.6% ROI3. Since inception,
for the properties in our Portfolio, we have completed 4,906 full
and partial upgrades and achieved a $92 average monthly rental increase per unit,
equating to a 21.4% ROI on all units leased as of June 30, 2018.
- During the second quarter of 2018, NXRT repurchased 178,988
shares of its common stock at a total cost of approximately
$4,615,000, or $25.78 per share. As of June 30, 2018, NXRT had repurchased a total of
737,458 shares of its common stock at a total cost of approximately
$16,694,000, or $22.64 per share.
- FFO, Core FFO, AFFO and NOI are non-GAAP measures. For
reconciliations of FFO, Core FFO, AFFO and NOI to net income
(loss), and a discussion of why we consider these non-GAAP measures
useful, see the "Definitions and Reconciliations" section of this
release.
- We define "Same Store" properties as properties that were in
our portfolio for the entirety of the periods being compared. There
are 30 properties encompassing 10,383 units of apartment space in
our Same Store pool for the three months ended June 30, 2018 (our "Q2 Same Store"
properties).
- We define Return on Investment ("ROI") as the sum of the actual
rent premium divided by the sum of the total cost.
"Fundamental strength and further execution of our business
plans led to another strong quarter of results for NXRT. We are
pleased with the results of our efforts to deliver value for our
residents and our shareholders, and we believe the future outlook
for quality Class B/workforce housing in our high-growth markets
remains bright." – James D.
Dondero, Chairman and President
Second Quarter 2018 Financial Results
- Total revenues were $35.7 million
for the second quarter of 2018, compared to $35.2 million for the second quarter of
2017.
- Net loss for the second quarter of 2018 totaled $(1.7) million, or a loss of $(0.08) per diluted share, which included
$11.0 million of depreciation and
amortization expense. This compared to net income of $7.4 million, or $0.34 per diluted share, for the second quarter
of 2017, which included $19.9 million
of gain on sales of real estate and $12.2
million of depreciation and amortization expense.
- The change in our net income (loss) between the periods
primarily relates to a decrease in gain on sales of real estate,
and was partially offset by decreases in property operating
expenses, depreciation and amortization, and loss on extinguishment
of debt and modification costs.
- For the second quarter of 2018, NOI was $19.8 million on 32 properties, compared to
$18.1 million for the second quarter
of 2017 on 37 properties.
- For the second quarter of 2018, Q2 Same Store NOI increased
11.0% to $17.5 million, compared to
$15.7 million for the second quarter
of 2017.
- For the second quarter of 2018, FFO totaled $9.3 million, or $0.44 per diluted share, compared to $1.7 million, or $0.08 per diluted share, for the second quarter
of 2017.
- For the second quarter of 2018, Core FFO totaled $8.7 million, or $0.41 per diluted share, compared to $6.1 million, or $0.28 per diluted share, for the second quarter
of 2017.
- For the second quarter of 2018, AFFO totaled $10.2 million, or $0.48 per diluted share, compared to $7.4 million, or $0.35 per diluted share, for the second quarter
of 2017.
Q2 Same Store Results of Operations for the Three
Months Ended June 30, 2018 and
2017
As of June 30, 2018, our 30
properties encompassing 10,383 units of apartment space in our Q2
Same Store pool were approximately 94.2% leased with a weighted
average monthly effective rent per occupied apartment unit of
$944, a year over year increase of
160 bps and $32, respectively.
The following table reflects the revenues, property operating
expenses and NOI for the three months ended June 30, 2018
and 2017 for our Q2 Same Store and Non-Same Store properties
(dollars in thousands):
|
|
For the Three
Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
$
Change
|
|
|
%
Change
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
27,485
|
|
|
$
|
26,186
|
|
|
$
|
1,299
|
|
|
|
5.0
|
%
|
Other
income
|
|
|
4,137
|
|
|
|
4,027
|
|
|
|
110
|
|
|
|
2.7
|
%
|
Same Store
revenues
|
|
|
31,622
|
|
|
|
30,213
|
|
|
|
1,409
|
|
|
|
4.7
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
|
3,584
|
|
|
|
4,322
|
|
|
|
(738)
|
|
|
|
-17.1
|
%
|
Other
income
|
|
|
449
|
|
|
|
699
|
|
|
|
(250)
|
|
|
|
-35.8
|
%
|
Non-Same Store
revenues
|
|
|
4,033
|
|
|
|
5,021
|
|
|
|
(988)
|
|
|
|
-19.7
|
%
|
Total
revenues
|
|
|
35,655
|
|
|
|
35,234
|
|
|
|
421
|
|
|
|
1.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses (1)
|
|
|
8,098
|
|
|
|
8,053
|
|
|
|
45
|
|
|
|
0.6
|
%
|
Real estate taxes and
insurance
|
|
|
3,995
|
|
|
|
4,421
|
|
|
|
(426)
|
|
|
|
-9.6
|
%
|
Property management
fees (2)
|
|
|
952
|
|
|
|
906
|
|
|
|
46
|
|
|
|
5.1
|
%
|
Property general and
administrative expenses (3)
|
|
|
1,127
|
|
|
|
1,115
|
|
|
|
12
|
|
|
|
1.1
|
%
|
Same Store
operating expenses
|
|
|
14,172
|
|
|
|
14,495
|
|
|
|
(323)
|
|
|
|
-2.2
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses (4)
|
|
|
823
|
|
|
|
1,588
|
|
|
|
(765)
|
|
|
|
-48.2
|
%
|
Real estate taxes and
insurance
|
|
|
593
|
|
|
|
672
|
|
|
|
(79)
|
|
|
|
-11.8
|
%
|
Property management
fees (2)
|
|
|
114
|
|
|
|
151
|
|
|
|
(37)
|
|
|
|
-24.5
|
%
|
Property general and
administrative expenses (5)
|
|
|
115
|
|
|
|
215
|
|
|
|
(100)
|
|
|
|
-46.5
|
%
|
Non-Same Store
operating expenses
|
|
|
1,645
|
|
|
|
2,626
|
|
|
|
(981)
|
|
|
|
-37.4
|
%
|
Total operating
expenses
|
|
|
15,817
|
|
|
|
17,121
|
|
|
|
(1,304)
|
|
|
|
-7.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
17,450
|
|
|
|
15,718
|
|
|
|
1,732
|
|
|
|
11.0
|
%
|
Non-Same
Store
|
|
|
2,388
|
|
|
|
2,395
|
|
|
|
(7)
|
|
|
|
-0.3
|
%
|
Total NOI
(6)
|
|
$
|
19,838
|
|
|
$
|
18,113
|
|
|
$
|
1,725
|
|
|
|
9.5
|
%
|
|
|
(1)
|
For the three months
ended June 30, 2018 and 2017, excludes approximately $(686,000) and
$17,000, 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 three months
ended June 30, 2018 and 2017, excludes approximately $365,000 and
$209,000, 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 June 30, 2018 and 2017, excludes approximately $(4,000) and
$7,000, respectively, of casualty-related
expenses/(recoveries).
|
(5)
|
For the three months
ended June 30, 2018 and 2017, excludes approximately $41,000 and
$37,000, 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.
|
YTD Same Store Results of Operations for the Six
Months Ended June 30, 2018 and
2017
There are 29 properties encompassing 10,123 units of apartment
space in our Same Store pool for the six months ended June 30, 2018 (our "YTD Same Store" properties).
As of June 30, 2018, our YTD Same
Store properties were approximately 94.2% leased with a weighted
average monthly effective rent per occupied apartment unit of
$944, a year over year increase of
157 bps and $34, respectively.
The following table reflects the revenues, property operating
expenses and NOI for the six months ended June 30, 2018
and 2017 for our YTD Same Store and Non-Same Store properties
(dollars in thousands):
|
|
For the Six Months
Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
$
Change
|
|
|
%
Change
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
52,958
|
|
|
$
|
50,738
|
|
|
$
|
2,220
|
|
|
|
4.4
|
%
|
Other
income
|
|
|
8,048
|
|
|
|
7,882
|
|
|
|
166
|
|
|
|
2.1
|
%
|
Same Store
revenues
|
|
|
61,006
|
|
|
|
58,620
|
|
|
|
2,386
|
|
|
|
4.1
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
|
8,684
|
|
|
|
11,678
|
|
|
|
(2,994)
|
|
|
|
-25.6
|
%
|
Other
income
|
|
|
1,022
|
|
|
|
1,927
|
|
|
|
(905)
|
|
|
|
-47.0
|
%
|
Non-Same Store
revenues
|
|
|
9,706
|
|
|
|
13,605
|
|
|
|
(3,899)
|
|
|
|
-28.7
|
%
|
Total
revenues
|
|
|
70,712
|
|
|
|
72,225
|
|
|
|
(1,513)
|
|
|
|
-2.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses (1)
|
|
|
15,649
|
|
|
|
15,432
|
|
|
|
217
|
|
|
|
1.4
|
%
|
Real estate taxes and
insurance
|
|
|
7,893
|
|
|
|
8,332
|
|
|
|
(439)
|
|
|
|
-5.3
|
%
|
Property management
fees (2)
|
|
|
1,839
|
|
|
|
1,758
|
|
|
|
81
|
|
|
|
4.6
|
%
|
Property general and
administrative expenses (3)
|
|
|
2,123
|
|
|
|
2,134
|
|
|
|
(11)
|
|
|
|
-0.5
|
%
|
Same Store
operating expenses
|
|
|
27,504
|
|
|
|
27,656
|
|
|
|
(152)
|
|
|
|
-0.5
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses (4)
|
|
|
2,125
|
|
|
|
4,075
|
|
|
|
(1,950)
|
|
|
|
-47.9
|
%
|
Real estate taxes and
insurance
|
|
|
1,551
|
|
|
|
1,726
|
|
|
|
(175)
|
|
|
|
-10.1
|
%
|
Property management
fees (2)
|
|
|
281
|
|
|
|
412
|
|
|
|
(131)
|
|
|
|
-31.8
|
%
|
Property general and
administrative expenses (5)
|
|
|
286
|
|
|
|
551
|
|
|
|
(265)
|
|
|
|
-48.1
|
%
|
Non-Same Store
operating expenses
|
|
|
4,243
|
|
|
|
6,764
|
|
|
|
(2,521)
|
|
|
|
-37.3
|
%
|
Total operating
expenses
|
|
|
31,747
|
|
|
|
34,420
|
|
|
|
(2,673)
|
|
|
|
-7.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
33,502
|
|
|
|
30,964
|
|
|
|
2,538
|
|
|
|
8.2
|
%
|
Non-Same
Store
|
|
|
5,463
|
|
|
|
6,841
|
|
|
|
(1,378)
|
|
|
|
-20.1
|
%
|
Total NOI
(6)
|
|
$
|
38,965
|
|
|
$
|
37,805
|
|
|
$
|
1,160
|
|
|
|
3.1
|
%
|
|
|
(1)
|
For the six months
ended June 30, 2018 and 2017, excludes approximately $(663,000) and
$17,000, respectively, of casualty-related
expenses/(recoveries).
|
(2)
|
Fees incurred to an
unaffiliated third party that is an affiliate of the noncontrolling
limited partner of the OP.
|
(3)
|
For the six months
ended June 30, 2018 and 2017, excludes approximately $692,000 and
$365,000, 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 six months
ended June 30, 2018 and 2017, excludes approximately $(3,000) and
$12,000, respectively, of casualty-related
expenses/(recoveries).
|
(5)
|
For the six months
ended June 30, 2018 and 2017, excludes approximately $94,000 and
$112,000, 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.
|
Value-Add Programs
For the properties in our Portfolio as of June 30, 2018, we completed full and partial
renovations on 379 units in the second quarter of 2018 at an
average cost of $4,547 per renovated
unit. Since inception, for the properties in our Portfolio, we have
completed full and partial renovations on 4,906 units at an average
cost of $5,015 per renovated unit
that has been leased as of June 30,
2018. We have achieved average rent growth of 10.8%, or a
$92 average monthly rental increase
per unit, on all units renovated and leased as of June 30, 2018, resulting in a 21.4% ROI.
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, 2018 and 2017
(in thousands):
|
|
For the Three
Months Ended June 30,
|
|
|
For the Six Months
Ended June 30,
|
|
Rehab
Expenditures
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Interior
|
(1)
|
$
|
2,040
|
|
|
$
|
2,318
|
|
|
$
|
3,556
|
|
|
$
|
4,764
|
|
Exterior and common
area
|
|
|
2,543
|
|
|
|
2,497
|
|
|
|
4,992
|
|
|
|
3,901
|
|
Total rehab
expenditures
|
|
$
|
4,583
|
|
|
$
|
4,815
|
|
|
$
|
8,548
|
|
|
$
|
8,665
|
|
|
|
(1)
|
Includes total
capital expenditures during the period on completed and in-progress
interior rehabs. For the three months ended June 30, 2018 and 2017,
we completed full and partial interior rehabs on 379 and 401 units,
respectively. For the six months ended June 30, 2018 and 2017, we
completed full and partial interior rehabs on 677 and 831 units,
respectively.
|
Third Quarter 2018 Dividend
On July 30, 2018, NXRT's board of
directors declared a quarterly dividend of $0.25 per share of common stock. The dividend
will be paid on September 28, 2018 to
stockholders of record on September 14,
2018.
Share Repurchase Program
As noted above, during the second quarter, NXRT repurchased
178,988 shares of its common stock at a total cost of approximately
$4,615,000, or $25.78 per share. As of June 30, 2018, NXRT had repurchased a total of
737,458 shares of its common stock at a total cost of approximately
$16,694,000, or $22.64 per share. As of June 30, 2018, NXRT had 20,747,367 shares of its
common stock issued and outstanding.
2018 Full Year Guidance Summary
NXRT has revised full year 2018 guidance ranges1 for
Earnings per diluted share, Same Store Total Expenses, and Same
Store NOI2; raised the low-end and tightened its 2018
guidance for Core FFO per diluted share2 and reaffirmed
2018 guidance ranges for Same Store Rental Income and Same Store
Total Revenue as follows:
|
Low-End
|
Mid-Point
|
High-End
|
Prior
Mid-Point
|
|
|
|
|
|
|
|
Earnings /sh (3)
(5)
|
$0.04
|
$0.09
|
$0.14
|
$0.02
|
|
|
|
|
|
|
|
Core FFO/sh (4)
(5)
|
$1.62
|
$1.66
|
$1.70
|
$1.65
|
|
|
|
|
|
|
|
Same Store Growth:
(6)
|
|
|
|
|
|
Rental
Income
|
4.8%
|
5.3%
|
5.8%
|
|
|
Total
Revenue
|
5.0%
|
5.5%
|
6.0%
|
|
|
Total
Expenses (7)
|
2.0%
|
2.5%
|
3.0%
|
4.0%
|
|
NOI (3)
(8)
|
6.0%
|
7.0%
|
8.0%
|
6.5%
|
|
|
|
(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 the
"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)
|
2018 Full Year
Guidance for Same Store NOI and Earnings per diluted share
increased as a result of better than expected operating
performance.
|
(4)
|
NXRT increased the
low-end and tightened Full Year 2018 Core FFO Guidance due to the
same factors listed in footnote 3 above.
|
(5)
|
Weighted average
diluted share count estimate for FY 2018 is approximately 21.3
million.
|
(6)
|
Year-over-year growth
for 2018 pro forma Same Store pool (29 properties).
|
(7)
|
2018 Full Year
Guidance for Same Store Total Expenses growth revised lower due to
tax settlements, utility reductions and other favorable expense
controls.
|
(8)
|
NOI is a non-GAAP
measure. For reconciliations of NOI to net income and a discussion
of why we consider this non-GAAP measure useful, see the
"Definitions and Reconciliations" section of this
release.
|
Additional information on second quarter 2018 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.
Second Quarter Earnings Conference Call
NXRT will host a call on Tuesday, July
31, 2018 at 11:00 a.m. ET to
discuss its second quarter financial results. The conference call
can be accessed live over the phone by dialing (334) 323-0522 or,
for international callers, (877) 260-1479, and using passcode
Conference ID: 7830851. 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, August 7, 2018, by dialing
(888) 203-1112 or, for international callers, (719) 457-0820 and
entering passcode 7830851.
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 and assumptions 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)
|
|
|
|
|
|
|
|
|
|
June 30,
2018
|
|
|
December 31,
2017
|
|
|
|
(Unaudited)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Operating Real Estate
Investments
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
189,615
|
|
|
$
|
189,615
|
|
Buildings and
improvements
|
|
|
811,696
|
|
|
|
806,981
|
|
Intangible lease
assets
|
|
|
—
|
|
|
|
1,340
|
|
Construction in
progress
|
|
|
5,113
|
|
|
|
3,786
|
|
Furniture, fixtures,
and equipment
|
|
|
51,644
|
|
|
|
44,725
|
|
Total Gross Operating
Real Estate Investments
|
|
|
1,058,068
|
|
|
|
1,046,447
|
|
Accumulated
depreciation and amortization
|
|
|
(109,189)
|
|
|
|
(88,252)
|
|
Total Net Operating
Real Estate Investments
|
|
|
948,879
|
|
|
|
958,195
|
|
Real estate held for
sale, net of accumulated depreciation of $897 and $3,397,
respectively
|
|
|
17,295
|
|
|
|
32,961
|
|
Total Net Real Estate
Investments
|
|
|
966,174
|
|
|
|
991,156
|
|
Cash and cash
equivalents
|
|
|
18,312
|
|
|
|
16,036
|
|
Restricted
cash
|
|
|
20,907
|
|
|
|
27,212
|
|
Accounts
receivable
|
|
|
3,819
|
|
|
|
2,932
|
|
Prepaid and other
assets
|
|
|
3,516
|
|
|
|
1,559
|
|
Fair market value of
interest rate swaps
|
|
|
26,827
|
|
|
|
16,480
|
|
TOTAL
ASSETS
|
|
$
|
1,039,555
|
|
|
$
|
1,055,375
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Mortgages payable,
net
|
|
$
|
729,897
|
|
|
$
|
724,057
|
|
Mortgages payable held
for sale, net
|
|
|
13,418
|
|
|
|
30,348
|
|
Credit facility,
net
|
|
|
34,995
|
|
|
|
29,843
|
|
Bridge facility,
net
|
|
|
—
|
|
|
|
8,576
|
|
Accounts payable and
other accrued liabilities
|
|
|
4,905
|
|
|
|
6,226
|
|
Accrued real estate
taxes payable
|
|
|
8,382
|
|
|
|
9,684
|
|
Accrued interest
payable
|
|
|
2,273
|
|
|
|
2,074
|
|
Security deposit
liability
|
|
|
1,607
|
|
|
|
1,518
|
|
Prepaid
rents
|
|
|
2,051
|
|
|
|
1,470
|
|
Total
Liabilities
|
|
|
797,528
|
|
|
|
813,796
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interests in the Operating Partnership
|
|
|
2,083
|
|
|
|
2,135
|
|
|
|
|
|
|
|
|
|
|
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; 20,747,367 and 21,049,565
shares issued and outstanding, respectively
|
|
|
207
|
|
|
|
210
|
|
Additional paid-in
capital
|
|
|
198,567
|
|
|
|
206,227
|
|
Accumulated earnings
less dividends
|
|
|
15,570
|
|
|
|
17,885
|
|
Accumulated other
comprehensive income
|
|
|
25,600
|
|
|
|
15,122
|
|
Total
Stockholders' Equity
|
|
|
239,944
|
|
|
|
239,444
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
$
|
1,039,555
|
|
|
$
|
1,055,375
|
|
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,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
31,069
|
|
|
$
|
30,508
|
|
|
$
|
61,642
|
|
|
$
|
62,416
|
|
Other
income
|
|
|
4,586
|
|
|
|
4,726
|
|
|
|
9,070
|
|
|
|
9,809
|
|
Total
revenues
|
|
|
35,655
|
|
|
|
35,234
|
|
|
|
70,712
|
|
|
|
72,225
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
|
8,231
|
|
|
|
9,665
|
|
|
|
17,108
|
|
|
|
19,536
|
|
Real estate taxes and
insurance
|
|
|
4,588
|
|
|
|
5,093
|
|
|
|
9,444
|
|
|
|
10,058
|
|
Property management
fees (1)
|
|
|
1,066
|
|
|
|
1,057
|
|
|
|
2,120
|
|
|
|
2,170
|
|
Advisory and
administrative fees (2)
|
|
|
1,863
|
|
|
|
1,849
|
|
|
|
3,701
|
|
|
|
3,674
|
|
Corporate general and
administrative expenses
|
|
|
1,986
|
|
|
|
1,886
|
|
|
|
3,799
|
|
|
|
3,219
|
|
Property general and
administrative expenses
|
|
|
1,648
|
|
|
|
1,576
|
|
|
|
3,195
|
|
|
|
3,162
|
|
Depreciation and
amortization
|
|
|
11,038
|
|
|
|
12,208
|
|
|
|
22,410
|
|
|
|
24,651
|
|
Total
expenses
|
|
|
30,420
|
|
|
|
33,334
|
|
|
|
61,777
|
|
|
|
66,470
|
|
Operating
income
|
|
|
5,235
|
|
|
|
1,900
|
|
|
|
8,935
|
|
|
|
5,755
|
|
Interest
expense
|
|
|
(6,823)
|
|
|
|
(7,063)
|
|
|
|
(13,620)
|
|
|
|
(14,222)
|
|
Loss on extinguishment
of debt and modification costs
|
|
|
(78)
|
|
|
|
(4,803)
|
|
|
|
(629)
|
|
|
|
(4,803)
|
|
Gain on sales of real
estate
|
|
|
—
|
|
|
|
19,896
|
|
|
|
13,742
|
|
|
|
19,896
|
|
Net income
(loss)
|
|
|
(1,666)
|
|
|
|
9,930
|
|
|
|
8,428
|
|
|
|
6,626
|
|
Net income
attributable to noncontrolling interests
|
|
|
—
|
|
|
|
2,524
|
|
|
|
—
|
|
|
|
2,836
|
|
Net income (loss)
attributable to redeemable noncontrolling interests in the
Operating Partnership
|
|
|
(5)
|
|
|
|
—
|
|
|
|
25
|
|
|
|
—
|
|
Net income (loss)
attributable to common stockholders
|
|
$
|
(1,661)
|
|
|
$
|
7,406
|
|
|
$
|
8,403
|
|
|
$
|
3,790
|
|
Other
comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains
(losses) on interest rate derivatives
|
|
|
2,749
|
|
|
|
(2,095)
|
|
|
|
10,510
|
|
|
|
(1,049)
|
|
Total
comprehensive income
|
|
|
1,083
|
|
|
|
7,835
|
|
|
|
18,938
|
|
|
|
5,577
|
|
Comprehensive
income attributable to noncontrolling interests
|
|
|
—
|
|
|
|
2,936
|
|
|
|
—
|
|
|
|
2,720
|
|
Comprehensive
income attributable to redeemable noncontrolling interests in the
Operating Partnership
|
|
|
4
|
|
|
|
—
|
|
|
|
57
|
|
|
|
—
|
|
Comprehensive
income attributable to common stockholders
|
|
$
|
1,079
|
|
|
$
|
4,899
|
|
|
$
|
18,881
|
|
|
$
|
2,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
|
20,780
|
|
|
|
21,044
|
|
|
|
20,883
|
|
|
|
21,044
|
|
Weighted average
common shares outstanding - diluted
|
|
|
21,295
|
|
|
|
21,473
|
|
|
|
21,362
|
|
|
|
21,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per share - basic
|
|
$
|
(0.08)
|
|
|
$
|
0.35
|
|
|
$
|
0.40
|
|
|
$
|
0.18
|
|
Earnings (loss)
per share - diluted
|
|
$
|
(0.08)
|
|
|
$
|
0.34
|
|
|
$
|
0.39
|
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
0.25
|
|
|
$
|
0.22
|
|
|
$
|
0.50
|
|
|
$
|
0.44
|
|
|
|
(1)
|
Fees incurred to an
unaffiliated third party that is an affiliate of the noncontrolling
limited partner of the OP.
|
(2)
|
Fees incurred to the
Company's adviser.
|
Definitions and Reconciliations
This press release includes analysis of funds from operations
("FFO"), core funds from operations ("Core FFO"), adjusted funds
from operations ("AFFO"), and net operating income ("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 Q2 and YTD
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 Q2 includes 30
properties totaling 10,383 units, or approximately 91% of our
Portfolio; while YTD includes 29 properties totaling 10,123 units,
or approximately 88% 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 Q2 and YTD
Same Store NOI for the three and six months ended June 30, 2018 and 2017 to net income (loss), the
most directly comparable GAAP financial measure (in thousands):
|
|
For the Three
Months Ended June 30,
|
|
|
For the Six Months
Ended June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Net income
(loss)
|
|
$
|
(1,666)
|
|
|
$
|
9,930
|
|
|
$
|
8,428
|
|
|
$
|
6,626
|
|
Adjustments to
reconcile net income (loss) to NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advisory and
administrative fees
|
|
|
1,863
|
|
|
|
1,849
|
|
|
|
3,701
|
|
|
|
3,674
|
|
Corporate
general and administrative expenses
|
|
|
1,986
|
|
|
|
1,886
|
|
|
|
3,799
|
|
|
|
3,219
|
|
Casualty-related expenses/(recoveries)
|
(1)
|
|
(690)
|
|
|
|
24
|
|
|
|
(666)
|
|
|
|
29
|
|
Property
general and administrative expenses
|
(2)
|
|
406
|
|
|
|
246
|
|
|
|
786
|
|
|
|
477
|
|
Depreciation
and amortization
|
|
|
11,038
|
|
|
|
12,208
|
|
|
|
22,410
|
|
|
|
24,651
|
|
Interest
expense
|
|
|
6,823
|
|
|
|
7,063
|
|
|
|
13,620
|
|
|
|
14,222
|
|
Loss on
extinguishment of debt and modification costs
|
|
|
78
|
|
|
|
4,803
|
|
|
|
629
|
|
|
|
4,803
|
|
Gain on sales
of real estate
|
|
|
—
|
|
|
|
(19,896)
|
|
|
|
(13,742)
|
|
|
|
(19,896)
|
|
NOI
|
|
$
|
19,838
|
|
|
$
|
18,113
|
|
|
$
|
38,965
|
|
|
$
|
37,805
|
|
Less Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
(3)
|
|
(4,033)
|
|
|
|
(5,021)
|
|
|
|
(9,706)
|
|
|
|
(13,605)
|
|
Operating
expenses
|
(3)
|
|
1,645
|
|
|
|
2,626
|
|
|
|
4,243
|
|
|
|
6,764
|
|
Same Store
NOI
|
(3)
|
$
|
17,450
|
|
|
$
|
15,718
|
|
|
$
|
33,502
|
|
|
$
|
30,964
|
|
|
|
(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.
|
(3)
|
Amounts for the three
months ended June 30, 2018 and 2017 are derived from the operations
of our Q2 Same Store and Non-Same Store properties; amounts for the
six months ended June 30, 2018 and 2017 are derived from the
operations of our YTD Same Store and Non-Same Store
properties.
|
FFO, Core FFO and AFFO
We believe that net income, as defined by GAAP, is the most
appropriate earnings measure. We also believe that FFO, as defined
by the National Association of Real Estate Investment Trusts
("NAREIT"), Core FFO, and 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 regular 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 financing costs and fair market value
adjustments of assumed debt related to the early retirement of debt
and costs incurred in connection with a debt modification that are
expensed), casualty-related expenses and recoveries, 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 in order to arrive at
a more refined measure of the operating performance of our
portfolio. 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 in the
table 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 three and six months ended June 30, 2018 and 2017 (in thousands, except per
share amounts):
|
|
For the Three
Months Ended June 30,
|
|
|
For the Six Months
Ended June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Net income
(loss)
|
|
$
|
(1,666)
|
|
|
$
|
9,930
|
|
|
$
|
8,428
|
|
|
$
|
6,626
|
|
Depreciation and
amortization
|
|
|
11,038
|
|
|
|
12,208
|
|
|
|
22,410
|
|
|
|
24,651
|
|
Gain on sales of real
estate
|
|
|
—
|
|
|
|
(19,896)
|
|
|
|
(13,742)
|
|
|
|
(19,896)
|
|
Adjustment for
noncontrolling interests
|
|
|
(28)
|
|
|
|
(526)
|
|
|
|
(51)
|
|
|
|
(1,649)
|
|
FFO attributable
to common stockholders
|
|
|
9,344
|
|
|
|
1,716
|
|
|
|
17,045
|
|
|
|
9,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per share -
basic
|
|
$
|
0.45
|
|
|
$
|
0.08
|
|
|
$
|
0.82
|
|
|
$
|
0.46
|
|
FFO per share -
diluted
|
|
$
|
0.44
|
|
|
$
|
0.08
|
|
|
$
|
0.80
|
|
|
$
|
0.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on
extinguishment of debt and modification costs
|
|
|
78
|
|
|
|
4,803
|
|
|
|
629
|
|
|
|
4,803
|
|
Casualty-related
expenses/(recoveries)
|
|
|
(690)
|
|
|
|
24
|
|
|
|
(666)
|
|
|
|
29
|
|
Change in fair value
on derivative instruments - ineffective portion
|
|
|
—
|
|
|
|
(85)
|
|
|
|
—
|
|
|
|
(65)
|
|
Amortization of
deferred financing costs - acquisition term notes
|
|
|
—
|
|
|
|
32
|
|
|
|
21
|
|
|
|
126
|
|
Adjustment for
noncontrolling interests
|
|
|
2
|
|
|
|
(425)
|
|
|
|
—
|
|
|
|
(427)
|
|
Core FFO
attributable to common stockholders
|
|
|
8,734
|
|
|
|
6,065
|
|
|
|
17,029
|
|
|
|
14,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO per share
- basic
|
|
$
|
0.42
|
|
|
$
|
0.29
|
|
|
$
|
0.82
|
|
|
$
|
0.67
|
|
Core FFO per share
- diluted
|
|
$
|
0.41
|
|
|
$
|
0.28
|
|
|
$
|
0.80
|
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
deferred financing costs - long term debt
|
|
|
352
|
|
|
|
412
|
|
|
|
720
|
|
|
|
850
|
|
Equity-based
compensation expense
|
|
|
1,094
|
|
|
|
984
|
|
|
|
2,009
|
|
|
|
1,592
|
|
Adjustment for
noncontrolling interests
|
|
|
(4)
|
|
|
|
(36)
|
|
|
|
(8)
|
|
|
|
(69)
|
|
AFFO attributable
to common stockholders
|
|
|
10,176
|
|
|
|
7,425
|
|
|
|
19,750
|
|
|
|
16,571
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per share -
basic
|
|
$
|
0.49
|
|
|
$
|
0.35
|
|
|
$
|
0.95
|
|
|
$
|
0.79
|
|
AFFO per share -
diluted
|
|
$
|
0.48
|
|
|
$
|
0.35
|
|
|
$
|
0.92
|
|
|
$
|
0.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
|
20,780
|
|
|
|
21,044
|
|
|
|
20,883
|
|
|
|
21,044
|
|
Weighted average
common shares outstanding - diluted
|
|
|
21,295
|
|
|
|
21,473
|
|
|
|
21,362
|
|
|
|
21,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
0.25
|
|
|
$
|
0.22
|
|
|
$
|
0.50
|
|
|
$
|
0.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO Coverage -
diluted
|
|
1.76x
|
|
|
0.36x
|
|
|
1.60x
|
|
|
1.03x
|
|
Core FFO Coverage
- diluted
|
|
1.64x
|
|
|
1.28x
|
|
|
1.59x
|
|
|
1.51x
|
|
AFFO Coverage -
diluted
|
|
1.91x
|
|
|
1.57x
|
|
|
1.85x
|
|
|
1.76x
|
|
The three months ended June 30,
2018 as compared to the three months ended June 30, 2017
FFO was $9.3 million for the three
months ended June 30, 2018 compared
to $1.7 million for the three months
ended June 30, 2017, which was an
increase of approximately $7.6
million. The change in our FFO between periods primarily
relates to decreases in total property operating expenses of
approximately $1.9 million and loss
on extinguishment of debt and modification costs of approximately
$4.7 million, an increase in total
revenues of approximately $0.4
million and adjustments for amounts attributable to
noncontrolling interests.
Core FFO was $8.7 million for the
three months ended June 30, 2018
compared to $6.1 million for the
three months ended June 30, 2017,
which was an increase of approximately $2.6
million. The change in our Core FFO between periods
primarily relates to an increase in FFO, partially offset by a
$4.7 million decrease in loss on
extinguishment of debt and modification costs, a $0.7 million increase in casualty-related
recoveries and adjustments for amounts attributable to
noncontrolling interests.
AFFO was $10.2 million for the
three months ended June 30, 2018
compared to $7.4 million for the
three months ended June 30, 2017,
which was an increase of approximately $2.8
million. The change in our AFFO between periods primarily
relates to increases in Core FFO and equity-based compensation
expense of $0.1 million.
The six months ended June 30,
2018 as compared to the six months ended June 30, 2017
FFO was $17.0 million for the six
months ended June 30, 2018 compared
to $9.7 million for the six months
ended June 30, 2017, which was an
increase of approximately $7.3
million. The change in our FFO between periods primarily
relates to decreases in total property operating expenses of
approximately $3.1 million and loss
on extinguishment of debt and modification costs of approximately
$4.2 million, and was partially
offset by a decrease in total revenues of approximately
$1.5 million and adjustments for
amounts attributable to noncontrolling interests.
Core FFO was $17.0 million for the
six months ended June 30, 2018
compared to $14.2 million for the six
months ended June 30, 2017, which was
an increase of approximately $2.8
million. The change in our Core FFO between periods
primarily relates to an increase in FFO, partially offset by a
$4.2 million decrease in loss on
extinguishment of debt and modification costs, a $0.7 million increase in casualty-related
recoveries and adjustments for amounts attributable to
noncontrolling interests.
AFFO was $19.8 million for the six
months ended June 30, 2018 compared
to $16.6 million for the six months
ended June 30, 2017, which was an
increase of approximately $3.2
million. The change in our AFFO between periods primarily
relates to increases in Core FFO and equity-based compensation
expense of $0.4 million.
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 Q2 Same Store properties, there are 30 properties
meeting this definition: Arbors on Forest
Ridge, Cutter's Point, Eagle Crest, Silverbrook, 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, Parc500, The Colonnade, Old Farm,
Stone Creek at Old Farm and
Hollister Place.
For our YTD Same Store properties, there are 29 properties
meeting this definition: Arbors on Forest
Ridge, Cutter's Point, Eagle Crest, Silverbrook, 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, Parc500, The Colonnade, Old Farm and
Stone Creek at Old Farm.
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 Full Year
Ended December 31, 2018
|
|
|
|
Mid-point
|
|
Net income
|
|
$
|
2,000
|
|
Adjustments to
reconcile net income to NOI:
|
|
|
|
|
Advisory and
administrative fees
|
|
|
7,465
|
|
Corporate general and
administrative expenses
|
|
|
7,550
|
|
Casualty-related
recoveries (1)
|
|
|
(666)
|
|
Property general and
administrative expenses (2)
|
|
|
1,314
|
|
Depreciation and
amortization
|
|
|
47,150
|
|
Interest
expense
|
|
|
27,400
|
|
Loss on extinguishment
of debt and modification costs
|
|
|
629
|
|
Gain on sale of real
estate
|
|
|
(13,742)
|
|
NOI
|
|
$
|
79,100
|
|
|
|
(1)
|
Adjustment to net
income to exclude certain property operating expenses that are
casualty-related 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 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 Full Year
Ended December 31, 2018
|
|
|
|
Mid-point
|
|
Net income
|
|
$
|
2,000
|
|
Depreciation and
amortization
|
|
|
47,150
|
|
Gain on sale of real
estate
|
|
|
(13,742)
|
|
Adjustment for
noncontrolling interests
|
|
|
(106)
|
|
FFO attributable
to common stockholders
|
|
$
|
35,302
|
|
|
|
|
|
|
FFO per share -
diluted (1)
|
|
$
|
1.66
|
|
|
|
|
|
|
Loss on
extinguishment of debt and modification costs
|
|
$
|
629
|
|
Casualty-related
recoveries
|
|
|
(666)
|
|
Amortization of
deferred financing costs - acquisition term notes
|
|
|
21
|
|
Core FFO
attributable to common stockholders
|
|
$
|
35,286
|
|
|
|
|
|
|
Core FFO per share
- diluted (1)
|
|
$
|
1.66
|
|
|
|
|
|
|
Amortization of
deferred financing costs - long term debt
|
|
$
|
1,385
|
|
Equity-based
compensation expense
|
|
|
4,198
|
|
Adjustment for
noncontrolling interests
|
|
|
(17)
|
|
AFFO attributable
to common stockholders
|
|
$
|
40,852
|
|
|
|
|
|
|
AFFO per share -
diluted (1)
|
|
$
|
1.92
|
|
|
|
|
|
|
Weighted average
common shares outstanding - diluted
|
|
|
21,300
|
|
|
|
(1)
|
For purposes of
calculating per share data, NXRT assumes a weighted average diluted
share count of 21.3 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-second-quarter-2018-results-300689104.html
SOURCE NexPoint Residential Trust, Inc.