DALLAS, Oct. 31, 2017 /PRNewswire/ -- NexPoint
Residential Trust, Inc. (NYSE:NXRT) reported financial results for
the three and nine months ended September
30, 2017.
Highlights
- NXRT reported Net Income, FFO¹, Core FFO¹, and AFFO¹ of
$57.7M, $16.5M, $22.0M, and
$25.6M, respectively, attributable to
common stockholders for the nine months ended September 30, 2017.
- For the nine months ended September 30,
2017, Same Store average effective rent, total revenue and
NOI¹ increased 5.5%, 7.1% and 7.9%, respectively, over the prior
year period.
- The weighted average effective monthly rent per unit, across
all 32 properties held as of September 30,
2017, improved to $932, while
we closed the quarter with physical occupancy of 94.0%.
- NXRT paid a third quarter dividend of $0.22 per share of common stock on September 29, 2017.
- On October 30, 2017, the
Company's board of directors increased the Company's quarterly
dividend 13.6%, or by $0.03 per
share, declaring a quarterly dividend of $0.25 per share, payable on December 29, 2017 to stockholders of record on
December 15, 2017.
- On July 14, 2017, NXRT sold
Regatta Bay for a gross sales price of $28.2
million. The disposition had an IRR of approximately 43% and
a 1.89x multiple on invested capital.
- On September 29, 2017, NXRT sold
four properties: The Arbors, The Crossings, The Crossings at
Holcomb Bridge and The Knolls (the "NAVA Portfolio") for a
cumulative gross sales price of $116.0 million. The portfolio had combined
returns totaling an IRR of approximately 47% and a 2.89x multiple
on invested capital. The Company used proceeds from the sale of the
NAVA Portfolio to repay $46.0 million
of short term debt and to complete the reverse 1031 exchange
initiated to acquire Rockledge Apartments in the second quarter of
this year.
- During the third quarter of 2017, NXRT completed upgrades on
422 units and leased 168 upgraded units, achieving an average
monthly rental increase per unit of $79 and a 23.5% ROI on those units. Across its
current portfolio, NXRT has completed 4,029 upgrades and achieved a
$91 average monthly rental increase
per unit, equating to a 20.7% ROI on all units leased through
September 30, 2017.
- During the nine months ended September
30, 2017, NXRT repurchased 58,157 shares of its common stock
at a total cost of approximately $1,354,000, or $23.27 per share. As of September 30, 2017, NXRT has repurchased 308,313
shares of its common stock at a total cost of approximately
$5,941,000, or $19.27 per share.
"We are pleased to report a strong 9.3% same store NOI increase
and continued execution of our capital recycling strategy. During
the quarter, we successfully disposed of five assets, generating an
average IRR of approximately 47% and 2.83x equity multiple, while
upgrading the quality and location of the portfolio," stated NXRT
Chairman and President, Jim
Dondero. "And given our ability to generate healthy
internal growth and free cash flow, we are also pleased with the
Board's decision to increase the quarterly dividend by 13.6%, as we
continue to experience strength in the value-add class B
segment."
Third Quarter Financial Results
- Total revenues were $37.1 million
for the period, compared to $33.1
million for the prior year period.
- Net income was $54.1 million for
the period, compared to $8.8 million
for the prior year period. The change in net income between the
periods primarily relates to increases in gain on sales of real
estate and same store operating results, both of which were
partially offset by increases in depreciation and amortization
expense and interest expense. The change in net income between the
periods was also due to NXRT's acquisition and disposition activity
in 2016 and 2017 and the timing of the transactions.
- For the three months ended September 30,
2017, NXRT reported earnings of $2.51 per diluted share, compared to earnings of
$0.33 per diluted share for the prior
year period.
- NOI¹ increased to $19.5 million
for the period, compared to $17.1
million for prior year period.
- Same store NOI¹ increased 9.3% to $13.8
million, over the prior year period.
- FFO¹ totaled $6.8 million, or
$0.32 per diluted share, compared to
$6.9 million, or $0.32 per diluted share, for the prior year
period.
- Core FFO¹ totaled $7.9 million,
or $0.37 per diluted share, compared
to $7.5 million, or $0.35 per diluted share, for the prior year
period.
- AFFO¹ totaled $9.0 million, or
$0.42 per diluted share, compared to
$8.1 million, or $0.38 per diluted share, for the prior year
period.
Financial Results for the Nine Months Ended September 30, 2017
- Total revenues were $109.3
million for the period, compared to $100.2 million for the prior year period.
- Net income was $60.7 million for
the period, compared to $25.7 million
for the prior year period. The change in net income between the
periods primarily relates to increases in gain on sales of real
estate and same store operating results, and was partially offset
by increases in depreciation and amortization expense, interest
expense and loss on extinguishment of debt and modification costs.
The change in net income between the periods was also due to NXRT's
acquisition and disposition activity in 2016 and 2017 and the
timing of the transactions.
- For the nine months ended September 30,
2017, NXRT reported earnings of $2.70 per diluted share, compared to earnings of
$1.02 per diluted share for the prior
year period.
- NOI¹ increased to $57.3 million
for the period, compared to $52.2
million for prior year period.
- Same store NOI¹ increased 7.9% to $40.5
million, over the prior year period.
- FFO¹ totaled $16.5 million, or
$0.77 per diluted share, compared to
$22.7 million, or $1.07 per diluted share, for the prior year
period.
- Core FFO¹ totaled $22.0 million,
or $1.03 per diluted share, compared
to $24.1 million, or $1.13 per diluted share, for the prior year
period.
- AFFO¹ totaled $25.6 million, or
$1.20 per diluted share, compared to
$25.4 million, or $1.19 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 26
properties encompassing 8,871 units of apartment space in our same
store pool for the three and nine months ended September 30, 2017 (our "Same Store" properties).
The Same Store portfolio finished the quarter with a weighted
average effective rent of $893 per
occupied unit and physical occupancy of 94.4%. Effective rent rose
by $47, or 5.5%, per occupied unit
over September 30, 2016, while
occupancy was unchanged at the end of each period.
The following table reflects the revenues, property operating
expenses and NOI for the three months ended September 30,
2017 and 2016 for our Same Store and Non-Same Store properties
(dollars in thousands):
|
|
For the Three
Months Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
$
Change
|
|
|
%
Change
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
22,191
|
|
|
$
|
20,841
|
|
|
$
|
1,350
|
|
|
|
6.5
|
%
|
Other
income
|
|
|
3,591
|
|
|
|
3,227
|
|
|
|
364
|
|
|
|
11.3
|
%
|
Same
Store revenues
|
|
|
25,782
|
|
|
|
24,068
|
|
|
|
1,714
|
|
|
|
7.1
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
|
9,957
|
|
|
|
7,791
|
|
|
|
2,166
|
|
|
|
27.8
|
%
|
Other
income
|
|
|
1,358
|
|
|
|
1,220
|
|
|
|
138
|
|
|
|
11.3
|
%
|
Non-Same
Store revenues
|
|
|
11,315
|
|
|
|
9,011
|
|
|
|
2,304
|
|
|
|
25.6
|
%
|
Total
revenues
|
|
|
37,097
|
|
|
|
33,079
|
|
|
|
4,018
|
|
|
|
12.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses (1)
|
|
|
7,208
|
|
|
|
6,983
|
|
|
|
225
|
|
|
|
3.2
|
%
|
Real estate taxes and
insurance
|
|
|
3,201
|
|
|
|
2,920
|
|
|
|
281
|
|
|
|
9.6
|
%
|
Property management
fees (2)
|
|
|
775
|
|
|
|
721
|
|
|
|
54
|
|
|
|
7.5
|
%
|
Property general and
administrative expenses (3)
|
|
|
840
|
|
|
|
857
|
|
|
|
(17)
|
|
|
|
-2.0
|
%
|
Same
Store operating expenses
|
|
|
12,024
|
|
|
|
11,481
|
|
|
|
543
|
|
|
|
4.7
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses (4)
|
|
|
3,248
|
|
|
|
2,888
|
|
|
|
360
|
|
|
|
12.5
|
%
|
Real estate taxes and
insurance
|
|
|
1,652
|
|
|
|
1,053
|
|
|
|
599
|
|
|
|
56.9
|
%
|
Property management
fees (2)
|
|
|
335
|
|
|
|
268
|
|
|
|
67
|
|
|
|
25.0
|
%
|
Property general and
administrative expenses (5)
|
|
|
327
|
|
|
|
324
|
|
|
|
3
|
|
|
|
0.9
|
%
|
Non-Same
Store operating expenses
|
|
|
5,562
|
|
|
|
4,533
|
|
|
|
1,029
|
|
|
|
22.7
|
%
|
Total
operating expenses
|
|
|
17,586
|
|
|
|
16,014
|
|
|
|
1,572
|
|
|
|
9.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
13,758
|
|
|
|
12,587
|
|
|
|
1,171
|
|
|
|
9.3
|
%
|
Non-Same
Store
|
|
|
5,753
|
|
|
|
4,478
|
|
|
|
1,275
|
|
|
|
28.5
|
%
|
Total
NOI
|
|
$
|
19,511
|
|
|
$
|
17,065
|
|
|
$
|
2,446
|
|
|
|
14.3
|
%
|
|
|
(1)
|
For the three months
ended September 30, 2017 and 2016, excludes approximately
$(410,000) and $3,000, 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 Company's operating partnership, NexPoint
Residential Trust Operating Partnership, L.P. (the
"OP").
|
(3)
|
For the three months
ended September 30, 2017 and 2016, excludes approximately $316,000
and $220,000, 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 September 30, 2017 and 2016, excludes approximately $29,000
and $0, respectively, of casualty-related
expenses/(recoveries).
|
(5)
|
For the three months
ended September 30, 2017 and 2016, excludes approximately $111,000
and $126,000, 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.
|
The following table reflects the revenues, property operating
expenses and NOI for the nine months ended September 30,
2017 and 2016 for our Same Store and Non-Same Store properties
(dollars in thousands):
|
|
For the Nine
Months Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
$
Change
|
|
|
%
Change
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
65,311
|
|
|
$
|
61,525
|
|
|
$
|
3,786
|
|
|
|
6.2
|
%
|
Other
income
|
|
|
10,421
|
|
|
|
9,178
|
|
|
|
1,243
|
|
|
|
13.5
|
%
|
Same
Store revenues
|
|
|
75,732
|
|
|
|
70,703
|
|
|
|
5,029
|
|
|
|
7.1
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
|
29,253
|
|
|
|
25,881
|
|
|
|
3,372
|
|
|
|
13.0
|
%
|
Other
income
|
|
|
4,337
|
|
|
|
3,663
|
|
|
|
674
|
|
|
|
18.4
|
%
|
Non-Same
Store revenues
|
|
|
33,590
|
|
|
|
29,544
|
|
|
|
4,046
|
|
|
|
13.7
|
%
|
Total
revenues
|
|
|
109,322
|
|
|
|
100,247
|
|
|
|
9,075
|
|
|
|
9.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses (1)
|
|
|
20,625
|
|
|
|
19,723
|
|
|
|
902
|
|
|
|
4.6
|
%
|
Real estate taxes and
insurance
|
|
|
9,632
|
|
|
|
8,704
|
|
|
|
928
|
|
|
|
10.7
|
%
|
Property management
fees (2)
|
|
|
2,274
|
|
|
|
2,122
|
|
|
|
152
|
|
|
|
7.2
|
%
|
Property general and
administrative expenses (3)
|
|
|
2,698
|
|
|
|
2,620
|
|
|
|
78
|
|
|
|
3.0
|
%
|
Same
Store operating expenses
|
|
|
35,229
|
|
|
|
33,169
|
|
|
|
2,060
|
|
|
|
6.2
|
%
|
Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses (4)
|
|
|
9,337
|
|
|
|
9,133
|
|
|
|
204
|
|
|
|
2.2
|
%
|
Real estate taxes and
insurance
|
|
|
5,279
|
|
|
|
3,622
|
|
|
|
1,657
|
|
|
|
45.7
|
%
|
Property management
fees (2)
|
|
|
1,006
|
|
|
|
885
|
|
|
|
121
|
|
|
|
13.7
|
%
|
Property general and
administrative expenses (5)
|
|
|
1,154
|
|
|
|
1,226
|
|
|
|
(72)
|
|
|
|
-5.9
|
%
|
Non-Same
Store operating expenses
|
|
|
16,776
|
|
|
|
14,866
|
|
|
|
1,910
|
|
|
|
12.8
|
%
|
Total
operating expenses
|
|
|
52,005
|
|
|
|
48,035
|
|
|
|
3,970
|
|
|
|
8.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
|
|
|
40,503
|
|
|
|
37,534
|
|
|
|
2,969
|
|
|
|
7.9
|
%
|
Non-Same
Store
|
|
|
16,814
|
|
|
|
14,678
|
|
|
|
2,136
|
|
|
|
14.6
|
%
|
Total
NOI
|
|
$
|
57,317
|
|
|
$
|
52,212
|
|
|
$
|
5,105
|
|
|
|
9.8
|
%
|
|
|
(1)
|
For the nine months
ended September 30, 2017 and 2016, excludes approximately
$(380,000) and $9,000, 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 nine months
ended September 30, 2017 and 2016, excludes approximately $622,000
and $460,000, 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 nine months
ended September 30, 2017 and 2016, excludes approximately $29,000
and $82,000, respectively, of casualty-related
expenses/(recoveries).
|
(5)
|
For the nine months
ended September 30, 2017 and 2016, excludes approximately $282,000
and $167,000, 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.
|
Value-Add Programs
For the three months ended September 30,
2017, we completed full and partial renovations on 422 units
at an average cost of $4,016 per
renovated unit. Since inception, for the properties in our
portfolio as of September 30, 2017,
we have completed full and partial renovations on 4,029 units at an
average cost of $5,115 per renovated
unit. We have achieved average rent growth of 10.9%, or a
$91 average monthly rental increase
per unit, on all units renovated and leased from inception through
September 30, 2017, resulting in a
ROI of 20.7%.
The following table sets forth a summary of our capital
expenditures related to our value-add program for the three and
nine months ended September 30, 2017
and 2016 (in thousands):
|
|
For the Three
Months Ended
September
30,
|
|
|
For the Nine
Months Ended
September
30,
|
|
Rehab
Expenditures
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Interior
|
(1)
|
$
|
1,883
|
|
|
$
|
2,439
|
|
|
$
|
6,647
|
|
|
$
|
7,136
|
|
Exterior and common
area
|
|
|
1,166
|
|
|
|
1,746
|
|
|
|
5,067
|
|
|
|
8,078
|
|
Total rehab
expenditures
|
|
$
|
3,049
|
|
|
$
|
4,185
|
|
|
$
|
11,714
|
|
|
$
|
15,214
|
|
|
|
(1)
|
Includes total
capital expenditures during the period on completed and in-progress
interior rehabs. For the three months ended September 30, 2017 and
2016, we completed full and partial interior rehabs on 422 and 538
units, respectively. For the nine months ended September 30, 2017
and 2016, we completed full and partial interior rehabs on 1,253
and 1,475 units, respectively.
|
Fourth Quarter 2017 Dividend
On October 30, 2017, NXRT's board
of directors increased the Company's quarterly dividend 13.6%, or
by $0.03 per share, declaring a
quarterly dividend of $0.25 per
share, payable on December 29, 2017 to stockholders of
record on December 15, 2017.
Subsequent Events
Acquisition of Multifamily Property
On October 25, 2017, NXRT acquired
Atera, a 380-unit property in Dallas,
TX for $59.2 million. NXRT
acquired Atera through a 1031 Exchange with the NAVA Portfolio and
a planned reverse 1031 Exchange with Timberglen (anticipated to
close in the first quarter of 2018). This is NXRT's eleventh
acquisition in Dallas, expanding
its footprint in the market to 3,556 units and bringing its total
portfolio to 33 properties consisting of 11,775 units in 10 markets
as of October 31, 2017.
Property
Name
|
|
Location
|
|
Date of
Acquisition
|
|
Purchase
Price
|
|
|
Debt
|
|
|
#
Units
|
|
|
Ownership
|
|
Atera
|
|
Dallas,
Texas
|
|
October 25,
2017
|
|
$
|
59,200
|
|
(1)
|
$
|
29,500
|
|
(2)
|
|
380
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Company used
approximately $14.1 million of proceeds from the sale of the NAVA
Portfolio to fund part of the equity portion of the purchase
price.
|
(2)
|
The Company placed a
first mortgage on the property with a floating interest rate at
1.48% over one-month LIBOR and an 84-month term that is full-term,
interest-only.
|
2017 Bridge Facility
On October 19, 2017, NXRT used
proceeds from the sale of the NAVA Portfolio to pay down
approximately $46.0 million on the
2017 Bridge Facility.
On October 26, 2017, NXRT, through
the OP, amended the 2017 Bridge Facility to extend the maturity
date on the remaining balance of approximately $8.6 million to March 31,
2018. We intend to repay the 2017 Bridge Facility with
excess proceeds from the disposition of Timberglen and cash on
hand.
Revised 2017 Full Year Guidance
NXRT increased or reaffirmed (as the case may be) 2017 Full Year
Guidance as presented in the Company's Second Quarter 2017
Financial Supplement for Revenue, Net Income, NOI, FFO, Core FFO
and AFFO as follows (amounts in thousands, except per share
data):
|
Revised FY
2017
|
|
Prior
|
|
Low-End
|
Mid-Point
|
High-End
|
|
Mid-Point
|
Revenue
|
143,500
|
144,250
|
145,000
|
|
144,000
|
Net Income
(1)
|
56,000
|
56,200
|
56,600
|
|
54,000
|
NOI
(2)
|
75,900
|
76,500
|
77,250
|
|
76,250
|
FFO/Share –
diluted (2) (3)
|
1.15
|
1.17
|
1.20
|
|
1.16
|
Core FFO/Share –
diluted (2) (3)
|
1.37
|
1.43
|
1.47
|
|
1.40
|
AFFO/Share –
diluted (2) (3)
|
1.63
|
1.65
|
1.68
|
|
-
|
Acquisitions
|
197,200
|
197,200
|
197,200
|
|
170,000
|
Dispositions
|
228,100
|
228,100
|
228,100
|
|
227,500
|
|
|
(1)
|
Net Income: revised
upwards from the previous midpoint of $54,000 due to higher than
anticipated cumulative sales price and gain on sales of real
estate.
|
(2)
|
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.
|
(3)
|
For purposes of
calculating per share data, NXRT assumes a weighted average diluted
share count of 21.40 million for the full year 2017.
|
Supplemental Information
Additional information on third quarter results and 2017
financial and earnings guidance is included in NXRT's "Supplemental
Information: Third Quarter 2017" that can be found in the Investor
Relations section of the Company's website at
www.nexpointliving.com.
Third Quarter Earnings Conference Call
NXRT will host a call to discuss its third quarter results on
Tuesday, October 31, 2017 at
11:00 a.m. ET. The number to call for
this interactive teleconference is (800) 210-9006, or for
international callers, (719) 325-2390 in each case using passcode
6163998. 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, November 7, 2017, by dialing
(888) 203-1112 or, for international callers, (719) 457-0820 and
entering passcode 6163998.
About NXRT
NexPoint Residential Trust, Inc. 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., which is 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 NXRT's guidance for financial results for the
full year 2017, the expected timing of property acquisitions and
dispositions, and the expected repayment of indebtedness. 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 Three and Nine Months Ended
September 30, 2017 and 2016 NEXPOINT RESIDENTIAL TRUST,
INC. AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS (in thousands, except share and per share
amounts)
|
|
|
|
|
|
|
|
|
|
September 30,
2017
|
|
|
December 31,
2016
|
|
|
|
(Unaudited)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Operating Real Estate
Investments
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
167,245
|
|
|
$
|
165,863
|
|
Buildings and
improvements
|
|
|
768,499
|
|
|
|
733,374
|
|
Intangible lease
assets
|
|
|
3,021
|
|
|
|
5,140
|
|
Construction in
progress
|
|
|
1,850
|
|
|
|
2,828
|
|
Furniture, fixtures,
and equipment
|
|
|
41,190
|
|
|
|
36,616
|
|
Total Gross Operating
Real Estate Investments
|
|
|
981,805
|
|
|
|
943,821
|
|
Accumulated
depreciation and amortization
|
|
|
(78,387)
|
|
|
|
(60,214)
|
|
Total Net Operating
Real Estate Investments
|
|
|
903,418
|
|
|
|
883,607
|
|
Real estate held for
sale, net of accumulated depreciation of $3,397 and $6,099,
respectively
|
|
|
32,915
|
|
|
|
79,430
|
|
Total Net Real Estate
Investments
|
|
|
936,333
|
|
|
|
963,037
|
|
Cash and cash
equivalents
|
|
|
92,695
|
|
|
|
22,705
|
|
Restricted
cash
|
|
|
29,417
|
|
|
|
32,556
|
|
Accounts
receivable
|
|
|
3,298
|
|
|
|
3,008
|
|
Prepaid and other
assets
|
|
|
3,923
|
|
|
|
1,678
|
|
Fair market value of
interest rate swaps
|
|
|
11,759
|
|
|
|
12,413
|
|
TOTAL
ASSETS
|
|
$
|
1,077,425
|
|
|
$
|
1,035,397
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Mortgages payable,
net
|
|
$
|
694,968
|
|
|
$
|
367,453
|
|
Mortgages payable held
for sale, net
|
|
|
30,327
|
|
|
|
55,685
|
|
Credit facilities,
net
|
|
|
29,803
|
|
|
|
310,492
|
|
Bridge facility,
net
|
|
|
54,531
|
|
|
|
29,874
|
|
Accounts payable and
other accrued liabilities
|
|
|
5,229
|
|
|
|
5,551
|
|
Accrued real estate
taxes payable
|
|
|
11,443
|
|
|
|
6,534
|
|
Accrued interest
payable
|
|
|
1,820
|
|
|
|
1,067
|
|
Security deposit
liability
|
|
|
1,451
|
|
|
|
1,364
|
|
Prepaid
rents
|
|
|
1,627
|
|
|
|
1,275
|
|
Total
Liabilities
|
|
|
831,199
|
|
|
|
779,295
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interests in the Operating Partnership
|
|
|
2,110
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
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; 21,095,769 and 21,043,669
shares issued and outstanding, respectively
|
|
|
211
|
|
|
|
213
|
|
Additional paid-in
capital
|
|
|
206,613
|
|
|
|
241,450
|
|
Accumulated earnings
less dividends
|
|
|
28,960
|
|
|
|
(14,584)
|
|
Accumulated other
comprehensive income
|
|
|
8,332
|
|
|
|
9,052
|
|
Common stock held in
treasury at cost; 0 and 250,156 shares, respectively
|
|
|
—
|
|
|
|
(4,587)
|
|
Total
Stockholders' Equity
|
|
|
244,116
|
|
|
|
231,544
|
|
Noncontrolling
interests
|
|
|
—
|
|
|
|
24,558
|
|
Total
Equity
|
|
|
244,116
|
|
|
|
256,102
|
|
TOTAL LIABILITIES
AND EQUITY
|
|
$
|
1,077,425
|
|
|
$
|
1,035,397
|
|
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 September 30,
|
|
|
For the Nine Months Ended September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
32,148
|
|
|
$
|
28,632
|
|
|
$
|
94,564
|
|
|
$
|
87,406
|
|
Other
income
|
|
|
4,949
|
|
|
|
4,447
|
|
|
|
14,758
|
|
|
|
12,841
|
|
Total
revenues
|
|
|
37,097
|
|
|
|
33,079
|
|
|
|
109,322
|
|
|
|
100,247
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
|
10,075
|
|
|
|
9,874
|
|
|
|
29,611
|
|
|
|
28,947
|
|
Acquisition
costs
|
|
|
—
|
|
|
|
386
|
|
|
|
—
|
|
|
|
386
|
|
Real estate taxes and
insurance
|
|
|
4,853
|
|
|
|
3,973
|
|
|
|
14,911
|
|
|
|
12,326
|
|
Property management
fees (1)
|
|
|
1,110
|
|
|
|
989
|
|
|
|
3,280
|
|
|
|
3,007
|
|
Advisory and
administrative fees (2)
|
|
|
1,870
|
|
|
|
1,698
|
|
|
|
5,544
|
|
|
|
4,944
|
|
Corporate general and
administrative expenses
|
|
|
1,623
|
|
|
|
1,023
|
|
|
|
4,842
|
|
|
|
2,649
|
|
Property general and
administrative expenses
|
|
|
1,594
|
|
|
|
1,527
|
|
|
|
4,756
|
|
|
|
4,473
|
|
Depreciation and
amortization
|
|
|
11,215
|
|
|
|
8,667
|
|
|
|
35,866
|
|
|
|
26,363
|
|
Total
expenses
|
|
|
32,340
|
|
|
|
28,137
|
|
|
|
98,810
|
|
|
|
83,095
|
|
Operating
income
|
|
|
4,757
|
|
|
|
4,942
|
|
|
|
10,512
|
|
|
|
17,152
|
|
Interest
expense
|
|
|
(8,257)
|
|
|
|
(4,791)
|
|
|
|
(22,479)
|
|
|
|
(15,650)
|
|
Loss on extinguishment
of debt and modification costs
|
|
|
(914)
|
|
|
|
(888)
|
|
|
|
(5,717)
|
|
|
|
(1,722)
|
|
Gain on sales of real
estate
|
|
|
58,490
|
|
|
|
9,562
|
|
|
|
78,386
|
|
|
|
25,932
|
|
Net
income
|
|
|
54,076
|
|
|
|
8,825
|
|
|
|
60,702
|
|
|
|
25,712
|
|
Net income
attributable to noncontrolling interests
|
|
|
—
|
|
|
|
1,735
|
|
|
|
2,836
|
|
|
|
4,047
|
|
Net income
attributable to redeemable noncontrolling interests in the
Operating Partnership
|
|
|
162
|
|
|
|
—
|
|
|
|
162
|
|
|
|
—
|
|
Net income
attributable to common stockholders
|
|
$
|
53,914
|
|
|
$
|
7,090
|
|
|
$
|
57,704
|
|
|
$
|
21,665
|
|
Other
comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains
(losses) on interest rate derivatives
|
|
|
214
|
|
|
|
(1,084)
|
|
|
|
(835)
|
|
|
|
(1,128)
|
|
Total
comprehensive income
|
|
|
54,290
|
|
|
|
7,741
|
|
|
|
59,867
|
|
|
|
24,584
|
|
Comprehensive
income attributable to noncontrolling interests
|
|
|
—
|
|
|
|
1,627
|
|
|
|
2,720
|
|
|
|
3,935
|
|
Comprehensive
income attributable to redeemable noncontrolling interests in the
Operating Partnership
|
|
|
163
|
|
|
|
—
|
|
|
|
163
|
|
|
|
—
|
|
Comprehensive
income attributable to common stockholders
|
|
$
|
54,127
|
|
|
$
|
6,114
|
|
|
$
|
56,984
|
|
|
$
|
20,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
|
21,085
|
|
|
|
21,260
|
|
|
|
21,057
|
|
|
|
21,282
|
|
Weighted average
common shares outstanding - diluted
|
|
|
21,453
|
|
|
|
21,376
|
|
|
|
21,407
|
|
|
|
21,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
- basic
|
|
$
|
2.56
|
|
|
$
|
0.33
|
|
|
$
|
2.74
|
|
|
$
|
1.02
|
|
Earnings per share
- diluted
|
|
$
|
2.51
|
|
|
$
|
0.33
|
|
|
$
|
2.70
|
|
|
$
|
1.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
0.220
|
|
|
$
|
0.206
|
|
|
$
|
0.660
|
|
|
$
|
0.618
|
|
|
|
(1)
|
Fees incurred to an
unaffiliated third party that is an affiliate of the noncontrolling
limited partner of the Company's OP.
|
(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 year reporting
periods. Same Store analysis for the three and nine months ended
September 30, 2017 includes 26
properties totaling 8,871 units, or approximately 78% of NXRT's
11,395 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) 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 Same Store NOI
for the three and nine months ended September 30, 2017 and 2016 to net income, the
most directly comparable GAAP financial measure (in thousands):
|
|
For the Three
Months Ended
September
30,
|
|
|
For the Nine
Months Ended
September
30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net income
|
|
$
|
54,076
|
|
|
$
|
8,825
|
|
|
$
|
60,702
|
|
|
$
|
25,712
|
|
Adjustments to
reconcile net income to NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advisory
and administrative fees
|
|
|
1,870
|
|
|
|
1,698
|
|
|
|
5,544
|
|
|
|
4,944
|
|
Corporate
general and administrative expenses
|
|
|
1,623
|
|
|
|
1,023
|
|
|
|
4,842
|
|
|
|
2,649
|
|
Casualty-related expenses/(recoveries)
|
(1)
|
|
(381)
|
|
|
|
3
|
|
|
|
(351)
|
|
|
|
91
|
|
Property
general and administrative expenses
|
(2)
|
|
427
|
|
|
|
346
|
|
|
|
904
|
|
|
|
627
|
|
Depreciation and amortization
|
|
|
11,215
|
|
|
|
8,667
|
|
|
|
35,866
|
|
|
|
26,363
|
|
Interest
expense
|
|
|
8,257
|
|
|
|
4,791
|
|
|
|
22,479
|
|
|
|
15,650
|
|
Loss on
extinguishment of debt and modification costs
|
|
|
914
|
|
|
|
888
|
|
|
|
5,717
|
|
|
|
1,722
|
|
Gain on
sales of real estate
|
|
|
(58,490)
|
|
|
|
(9,562)
|
|
|
|
(78,386)
|
|
|
|
(25,932)
|
|
Acquisition costs
|
|
|
—
|
|
|
|
386
|
|
|
|
—
|
|
|
|
386
|
|
NOI
|
|
$
|
19,511
|
|
|
$
|
17,065
|
|
|
$
|
57,317
|
|
|
$
|
52,212
|
|
Less Non-Same
Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
(11,315)
|
|
|
|
(9,011)
|
|
|
|
(33,590)
|
|
|
|
(29,544)
|
|
Operating
expenses
|
|
|
5,562
|
|
|
|
4,533
|
|
|
|
16,776
|
|
|
|
14,866
|
|
Same Store
NOI
|
|
$
|
13,758
|
|
|
$
|
12,587
|
|
|
$
|
40,503
|
|
|
$
|
37,534
|
|
|
|
(1)
|
Adjustment to net
income to exclude certain property operating expenses that are
casualty-related expenses/(recoveries).
|
(2)
|
Adjustment to net
income to exclude certain property general and administrative
expenses that are not reflective of the continuing operations of
the properties or are incurred on our behalf at the property for
expenses such as legal, professional and franchise tax
fees.
|
FFO, Core FFO and AFFO
We believe that net income, as defined by GAAP, is the most
appropriate earnings measure. We also believe that funds from
operations, or FFO, as defined by the National Association of Real
Estate Investment Trusts, or NAREIT, core funds from operations, or
Core FFO, and adjusted funds from operations, or AFFO, are
important non-GAAP supplemental measures of operating performance
for a REIT.
Since the historical cost accounting convention used for real
estate assets requires depreciation except on land, such accounting
presentation implies that the value of real estate assets
diminishes predictably over time. However, since real estate values
have historically risen or fallen with market and other conditions,
presentations of operating results for a REIT that use historical
cost accounting for depreciation could be less informative. Thus,
NAREIT created FFO as a supplemental measure of operating
performance for REITs that excludes historical cost depreciation
and amortization, among other items, from net income, as defined by
GAAP. FFO is defined by NAREIT as net income computed in accordance
with GAAP, excluding gains or losses from real estate dispositions,
plus real estate depreciation and amortization and impairment
charges. We compute FFO attributable to common stockholders in
accordance with NAREIT's definition. Our presentation differs
slightly in that we begin with net income (loss) before adjusting
for amounts attributable to (1) noncontrolling interests in
consolidated joint ventures and (2) redeemable noncontrolling
interests in the OP; we show the combined amounts attributable to
such noncontrolling interests as an adjustment to arrive at FFO
attributable to common stockholders. Core FFO makes certain
adjustments to FFO, which are either not likely to occur on a
continuing basis or are otherwise not representative of the
continuing operating performance of our portfolio.
Core FFO adjusts FFO to remove items such as acquisition
expenses, losses on extinguishment of debt and modification costs
(includes prepayment penalties incurred and the write-off of
unamortized deferred loan costs related to the early retirement of
debt and costs incurred in connection with a debt modification that
are expensed), the amortization of deferred financing costs
incurred in connection with obtaining short-term debt financing,
the ineffective portion of fair value adjustments on our interest
rate derivatives designated as cash flow hedges, and the
noncontrolling interests (as described above) related to these
items. We believe Core FFO is useful to investors as a supplemental
gauge of our operating performance and is useful in comparing our
operating performance with other REITs that are not as involved in
the aforementioned activities.
AFFO makes certain adjustments to Core FFO. There is no industry
standard definition of AFFO and practice is divergent across the
industry. AFFO adjusts Core FFO to remove items such as
equity-based compensation expense and the amortization of deferred
financing costs incurred in connection with obtaining long-term
debt financing, and the noncontrolling interests (as described
above) related to these items. We believe AFFO is useful to
investors as a supplemental gauge of our operating performance and
is useful in comparing our operating performance with other REITs
that are not as involved in the aforementioned activities.
The effect of the conversion of OP Units held by noncontrolling
limited partners is not reflected in the computation of basic and
diluted FFO, Core FFO and AFFO per share, as they are exchangeable
for common stock on a one-for-one basis. The FFO, Core FFO and AFFO
allocable to such units is allocated on this same basis and
reflected in the adjustments for noncontrolling interests 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, the most directly comparable GAAP financial
measure, for the three and nine months ended September 30, 2017 and 2016 (in thousands, except
per share amounts):
|
|
For the Three
Months Ended
September
30,
|
|
|
For the Nine
Months Ended
September
30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net income
|
|
$
|
54,076
|
|
|
$
|
8,825
|
|
|
$
|
60,702
|
|
|
$
|
25,712
|
|
Depreciation and
amortization
|
|
|
11,215
|
|
|
|
8,667
|
|
|
|
35,866
|
|
|
|
26,363
|
|
Gain on sales of real
estate
|
|
|
(58,490)
|
|
|
|
(9,562)
|
|
|
|
(78,386)
|
|
|
|
(25,932)
|
|
Adjustment for
noncontrolling interests
|
|
|
(21)
|
|
|
|
(1,021)
|
|
|
|
(1,670)
|
|
|
|
(3,401)
|
|
FFO attributable
to common stockholders
|
|
|
6,780
|
|
|
|
6,909
|
|
|
|
16,512
|
|
|
|
22,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per share -
basic
|
|
$
|
0.32
|
|
|
$
|
0.32
|
|
|
$
|
0.78
|
|
|
$
|
1.07
|
|
FFO per share -
diluted
|
|
$
|
0.32
|
|
|
$
|
0.32
|
|
|
$
|
0.77
|
|
|
$
|
1.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition
costs
|
|
|
—
|
|
|
|
386
|
|
|
|
—
|
|
|
|
386
|
|
Loss on
extinguishment of debt and modification costs
|
|
|
914
|
|
|
|
888
|
|
|
|
5,717
|
|
|
|
1,722
|
|
Change in fair value
on derivative instruments - ineffective portion
|
|
|
(32)
|
|
|
|
(599)
|
|
|
|
(97)
|
|
|
|
(599)
|
|
Amortization of
deferred financing costs - acquisition term notes
|
|
|
197
|
|
|
|
—
|
|
|
|
323
|
|
|
|
—
|
|
Adjustment for
noncontrolling interests
|
|
|
(4)
|
|
|
|
(104)
|
|
|
|
(430)
|
|
|
|
(188)
|
|
Core FFO
attributable to common stockholders
|
|
|
7,855
|
|
|
|
7,480
|
|
|
|
22,025
|
|
|
|
24,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO per share
- basic
|
|
$
|
0.37
|
|
|
$
|
0.35
|
|
|
$
|
1.05
|
|
|
$
|
1.13
|
|
Core FFO per share
- diluted
|
|
$
|
0.37
|
|
|
$
|
0.35
|
|
|
$
|
1.03
|
|
|
$
|
1.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
deferred financing costs - long term debt
|
|
|
375
|
|
|
|
385
|
|
|
|
1,225
|
|
|
|
1,084
|
|
Equity-based
compensation expense
|
|
|
822
|
|
|
|
296
|
|
|
|
2,414
|
|
|
|
296
|
|
Adjustment for
noncontrolling interests
|
|
|
(3)
|
|
|
|
(38)
|
|
|
|
(72)
|
|
|
|
(93)
|
|
AFFO attributable
to common stockholders
|
|
|
9,049
|
|
|
|
8,123
|
|
|
|
25,592
|
|
|
|
25,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per share -
basic
|
|
$
|
0.43
|
|
|
$
|
0.38
|
|
|
$
|
1.22
|
|
|
$
|
1.19
|
|
AFFO per share -
diluted
|
|
$
|
0.42
|
|
|
$
|
0.38
|
|
|
$
|
1.20
|
|
|
$
|
1.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
|
21,085
|
|
|
|
21,260
|
|
|
|
21,057
|
|
|
|
21,282
|
|
Weighted average
common shares outstanding - diluted
|
|
|
21,453
|
|
|
|
21,376
|
|
|
|
21,407
|
|
|
|
21,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
0.220
|
|
|
$
|
0.206
|
|
|
$
|
0.660
|
|
|
$
|
0.618
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO Coverage -
diluted
|
|
1.44x
|
|
|
1.57x
|
|
|
1.17x
|
|
|
1.73x
|
|
Core FFO Coverage
- diluted
|
|
1.66x
|
|
|
1.7x
|
|
|
1.56x
|
|
|
1.83x
|
|
AFFO Coverage -
diluted
|
|
1.92x
|
|
|
1.84x
|
|
|
1.81x
|
|
|
1.92x
|
|
The three months ended September 30,
2017 as compared to the three months ended September 30, 2016
FFO was $6.8 million for the three
months ended September 30, 2017
compared to $6.9 million for the
three months ended September 30, 2016, which was a decrease of
approximately $0.1 million. The
change in our FFO between periods primarily relates to increases in
total property operating expenses of approximately $0.9 million, interest expense of approximately
$3.5 million and corporate general
and administrative expenses of approximately $0.6 million, and was partially offset by an
increase in total revenues of approximately $4.0 million and adjustments for amounts
attributable to noncontrolling interests.
Core FFO was $7.9 million for the
three months ended September 30, 2017
compared to $7.5 million for the
three months ended September 30,
2016, which was an increase of approximately $0.4 million. The change in our Core FFO between
periods primarily relates to a decrease in gain recognized related
to the ineffective portion of changes in fair value of our interest
rate swap derivatives designated as cash flow hedges of
approximately $0.6 million, partially
offset by decreases in acquisition costs of approximately
$0.4 million and FFO.
AFFO was $9.0 million for the
three months ended September 30, 2017
compared to $8.1 million for the
three months ended September 30, 2016, which was an increase
of approximately $0.9 million. The
change in our AFFO between periods primarily relates to increases
in equity-based compensation expense of approximately $0.5 million and Core FFO.
The nine months ended September 30,
2017 as compared to the nine months ended September 30, 2016
FFO was $16.5 million for the nine
months ended September 30, 2017
compared to $22.7 million for the
nine months ended September 30, 2016, which was a decrease of
approximately $6.2 million. The
change in our FFO between periods primarily relates to increases in
total property operating expenses of approximately $3.4 million, interest expense of approximately
$6.8 million, loss on extinguishment
of debt and modification costs of approximately $4.0 million and corporate general and
administrative expenses of approximately $2.2 million, and was partially offset by an
increase in total revenues of approximately $9.1 million and adjustments for amounts
attributable to noncontrolling interests.
Core FFO was $22.0 million for the
nine months ended September 30, 2017
compared to $24.1 million for the
nine months ended September 30, 2016,
which was a decrease of approximately $2.1
million. The change in our Core FFO between periods
primarily relates to decreases in gain recognized related to the
ineffective portion of changes in fair value of our interest rate
swap derivatives designated as cash flow hedges of approximately
$0.5 million and FFO, partially
offset by a $4.0 million increase in
loss on extinguishment of debt and modification costs and
adjustments for amounts attributable to noncontrolling
interests.
AFFO was $25.6 million for the
nine months ended September 30, 2017
compared to $25.4 million for the
nine months ended September 30, 2016, which was an increase of
approximately $0.2 million. The
change in our AFFO between periods primarily relates to an increase
in equity-based compensation expense of approximately $2.1 million, partially offset by a decrease in
Core FFO.
Same Store Properties
We review our stabilized multifamily communities on a comparable
basis between periods. Our Same Store properties are defined as
those that are stabilized and comparable for both the current and
the prior year reporting periods.
There are 26 properties meeting this definition for the three
and nine months ended September 30,
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, Sabal Palm at Lake
Buena Vista, Southpoint Reserve at Stoney Creek, Cornerstone, The
Preserve at Terrell Mill, The Ashlar, Heatherstone, Versailles, Seasons 704 Apartments,
Madera Point, The Pointe at the
Foothills, and Venue at 8651.
Reconciliation of FY 2017 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,
2017 (in millions):
|
|
Mid-Point
|
|
Net income
|
|
$
|
56.2
|
|
Adjustments to
reconcile net income to NOI:
|
|
|
|
|
Advisory and
administrative fees
|
|
|
7.4
|
|
Corporate general and
administrative expenses
|
|
|
6.3
|
|
Casualty-related
expenses/(recoveries) (1)
|
|
|
(0.3)
|
|
Property general and
administrative expenses (2)
|
|
|
1.2
|
|
Depreciation and
amortization
|
|
|
48.9
|
|
Interest
expense
|
|
|
29.5
|
|
Loss on extinguishment
of debt and modification costs
|
|
|
5.7
|
|
Gain on sales of real
estate
|
|
|
(78.4)
|
|
NOI
|
|
$
|
76.5
|
|
|
|
(1)
|
Adjustment to net
income to exclude certain property operating expenses that are
casualty-related expenses/(recoveries).
|
(2)
|
Adjustment to net
income to exclude certain property general and administrative
expenses that are not reflective of the continuing operations of
the properties or are incurred on our behalf at the property for
expenses such as legal, professional and franchise tax
fees.
|
The following table 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, 2017 (in millions, except per share
data):
|
|
Mid-Point
|
|
Net income
|
|
$
|
56.2
|
|
Depreciation and
amortization
|
|
|
48.9
|
|
Gain on sales of real
estate
|
|
|
(78.4)
|
|
Adjustment for
noncontrolling interests
|
|
|
(1.7)
|
|
FFO attributable
to common stockholders
|
|
$
|
25.0
|
|
|
|
|
|
|
FFO per share -
diluted (1)
|
|
$
|
1.17
|
|
|
|
|
|
|
Loss on
extinguishment of debt and modification costs
|
|
$
|
5.7
|
|
Change in fair value
on derivative instruments - ineffective portion
|
|
|
(0.1)
|
|
Amortization of
deferred financing costs - acquisition term notes
|
|
|
0.4
|
|
Adjustment for
noncontrolling interests
|
|
|
(0.4)
|
|
Core FFO
attributable to common stockholders
|
|
$
|
30.6
|
|
|
|
|
|
|
Core FFO per share
- diluted (1)
|
|
$
|
1.43
|
|
|
|
|
|
|
Amortization of
deferred financing costs - long term debt
|
|
$
|
1.6
|
|
Equity-based
compensation expense
|
|
|
3.1
|
|
Adjustment for
noncontrolling interests
|
|
|
(0.1)
|
|
AFFO attributable
to common stockholders
|
|
$
|
35.2
|
|
|
|
|
|
|
AFFO per share -
diluted (1) (2)
|
|
$
|
1.65
|
|
|
|
|
|
|
Weighted average
common shares outstanding - diluted (1)
|
|
|
21.4
|
|
|
|
(1)
|
For purposes of
calculating per share data, NXRT assumes a weighted average diluted
share count of 21.40 million for the full year 2017.
|
(2)
|
Difference of $0.01
due to rounding.
|
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
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content:http://www.prnewswire.com/news-releases/nexpoint-residential-trust-inc-reports-third-quarter-results-300546216.html
SOURCE NexPoint Residential Trust, Inc.