EX-99.2 3 irt-ex992_6.htm EX-99.2 irt-ex992_6.htm

Exhibit 99.2

Talison Row at Daniel Island, South Carolina

 

EARNINGS RELEASE & SUPPLEMENTAL INFORMATION

Q1 2020

 

 

NYSE: IRT

WWW.IRTLIVING.COM

 

 

1

 


TABLE OF CONTENTS

 

Company Information

 

3

 

 

 

Forward-Looking Statements

 

4

 

 

 

Earnings Release Text

 

5

 

 

 

Financial & Operating Highlights

 

10

 

 

 

Balance Sheets

 

11

 

 

 

Statements of Operations, FFO & CORE FFO

 

 

Trailing Five Quarters

 

12

Three Months Ended March 31, 2020 and 2019

 

13

 

 

 

Adjusted EBITDA Reconciliations and Coverage Ratio

 

 

Trailing Five Quarters

 

14

 

 

 

 

 

 

Same-Store Portfolio Net Operating Income

 

 

Trailing Five Quarters

 

15

Three Months Ended March 31, 2020 and 2019

 

16

 

 

 

Net Operating Income Bridge

 

17

 

 

 

Same-Store Portfolio Net Operating Income by Market

 

18

 

 

 

Total Portfolio NOI Exposure by Market

 

19

 

 

 

Value Add Summary

 

20

 

 

 

Capital Recycling Activity

 

21

 

 

 

Debt Summary

 

22

 

 

 

Debt Covenant & Unencumbered Asset Statistics

 

23

 

 

 

Definitions

 

24

 

2

 


Independence Realty Trust

March 31, 2020

Company Information:

 

Independence Realty Trust, Inc. (NYSE: IRT) is a real estate investment trust that owns and operates multifamily apartment properties across non-gateway U.S. markets, including Atlanta, Louisville, Memphis, and Raleigh. IRT’s investment strategy is focused on gaining scale within key amenity rich submarkets that offer good school districts, high-quality retail and major employment centers. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and capital appreciation. More information may be found on the Company’s website at www.irtliving.com.

 

Corporate Headquarters

 

1835 Market Street, Suite 2601

 

 

Philadelphia, PA 19103

 

 

267.270.4800

 

 

Trading Symbol

 

NYSE: “IRT”

 

 

Investor Relations Contact

 

Edelman Financial Communications & Capital Markets

 

 

Ted McHugh and Lauren Torres

 

 

212-704-8112

 

 

IRT@edelman.com

 

 

 

 

 


3

 


Forward-Looking Statements

This supplemental information contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “will,” “strategy,” “expects,” “seeks,” “believes,” “potential,” or other similar words. These forward-looking statements include, without limitation, IRT’s expectations with respect to capital allocations, including as to the timing and amount of future dividends. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations of IRT’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally not within IRT’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Risks and uncertainties that might cause IRT’s actual results and/or future dividends to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: risks related to the impact of COVID-19 and other potential future outbreaks of infectious diseases on the financial condition, results of operations, cash flows and performance of IRT and its tenants as well as on the economy and real estate and financial markets; changes in market demand for rental apartment homes and pricing pressures, including from competitors, that could limit our ability to lease units or increase rents or that could lead to declines in occupancy and rent levels; uncertainty and volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital; inability of tenants to meet their rent and other lease obligations; legislative restrictions that may delay or limit collections of past due rents; risks endemic to real estate and the real estate industry generally; the effects of natural and other disasters; delays in completing, and cost overruns incurred in connection with, our value add initiatives and failure to achieve projected rent increases and occupancy levels on account of the initiatives; unexpected costs of REIT qualification compliance; costs and disruptions as the result of a cybersecurity incident or other technology disruption; and share price fluctuations. Please refer to the documents filed by the Company with the SEC, specifically the Company's Annual Report on Form 10-K for the year ended December 31, 2019, as it may be updated or supplemented in the Company's Quarterly Reports on Form 10-Q and the Company's other filings with the SEC, which identify additional risk factors that could cause actual results to differ from those contained in forward-looking statements. IRT undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law. In addition, the declaration of dividends on our common stock is subject to the discretion of our Board

of Directors and depends upon a broad range of factors, including our results of operations, financial condition, capital

requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as

amended, applicable legal requirements and such other factors as our Board of Directors may from time to time deem

relevant. For these reasons, as well as others, there can be no assurance that dividends in the future will be equal or similar to the expected amount of the quarterly dividend described in this supplemental information.

 


4

 


Independence Realty Trust Announces First Quarter 2020 Financial Results

 

 

PHILADELPHIA – (BUSINESS WIRE) – May 6, 2020 — Independence Realty Trust, Inc. (“IRT”) (NYSE: IRT), a multifamily apartment REIT, today announced its first quarter 2020 financial results.

 

First Quarter Highlights

 

 

Net loss allocable to common shares of $0.4 million for the quarter ended March 31, 2020 as compared to net income of $2.5 million for the quarter ended March 31, 2019.

 

 

Earnings per diluted share of $0.00 for the quarter ended March 31, 2020, as compared to $0.03 for the quarter ended March 31, 2019.

 

 

Same store net operating income (“NOI”) growth of 7.0% for the quarter ended March 31, 2020 compared to the quarter ended March 31, 2019.

 

 

Core Funds from Operations (“CFFO”) of $17.6 million for the quarter ended March 31, 2020 as compared to $16.0 million for the quarter ended March 31, 2019. CFFO per share was $0.19 for the first quarter of 2020 as compared to $0.18 for the first quarter of 2019.

 

 

Adjusted EBITDA of $24.1 million for the quarter ended March 31, 2020 as compared to $24.7 million for the quarter ended March 31, 2019.

 

Included later in this press release are definitions of NOI, CFFO, Adjusted EBITDA and other Non-GAAP financial measures and reconciliations of such measures to their most comparable financial measures as calculated and presented under GAAP.

 

Management Commentary

“I am proud of all the efforts taken by the IRT team during this unprecedented time. We continue to take significant steps to maintain the health and well-being of our employees and residents, while also swiftly rolling out measures to ease the financial burden of those tenants directly affected by the COVID-19 crisis,” said Scott Schaeffer, Chairman and CEO of IRT. “At the same time, we demonstrated strong performance across the portfolio, including first quarter 2020 same store NOI growth of 7.0%.”

 

“While we have been encouraged by recent trends, which include a 92.7% occupancy rate as of April 30th and a 98% April rental receipt collections rate, after payment plans, we must prudently manage the portfolio as we work through COVID-19 headwinds. We have been focused on capital preservation, including temporarily pausing efforts on our capital recycling program and on a portion of our value add initiative.

 

Lastly, the resilience of our real estate platform and strengthened balance sheet, including approximately $258 million in total liquidity, provides us with the confidence to respond to this fluid situation and take further action to protect long-term value of the enterprise.”

 

 

 

 

 

 


5

 


Same Store Property Operating Results

 

First Quarter 2020 Compared to First Quarter 2019(1)

Rental and other property revenue

4.7% increase

Property operating expenses

1.3% increase

Net operating income (“NOI”)

7.0% increase

Portfolio average occupancy

10 bps decrease to 92.7%

Portfolio average rental rate

4.9% increase to $1,089

NOI Margin

130 bps increase to 61.5%

 

 

(1)

Same store portfolio for the three months ended March 31, 2020 includes 54 properties, which represent 14,748 units.

 

Same Store Property Operating Results, Excluding Value Add

The same store portfolio results below exclude 16 communities that are both part of the same store portfolio and were actively undergoing Value Add renovations during the three months ended March 31, 2020.

 

 

 

First Quarter 2020 Compared to First Quarter 2019(1)

Rental and other property revenue

3.6% increase

Property operating expenses

1.5% decrease

Net operating income (“NOI”)

7.0% increase

Portfolio average occupancy

30 bps increase to 94.0%

Portfolio average rental rate

3.4% increase to $1,072

NOI Margin

200 bps increase to 61.7%

 

 

(1)

Same store portfolio, excluding value add, for the three months ended March 31, 2020 includes 38 properties, which represent 9,680 units.

 

COVID-19 Metrics (1)(2)

(Dollars in thousands, except per unit data)

 

 

Rent collections (3)

April 2020

April 2019

1Q 2020

Rent collected for the period presented, as a percentage of rent billed

97.3%

98.6%

98.1%

 

 

 

 

Deferred payment plans: (4)

 

 

 

Number of deferred payment plans

139

-

-

Amount of monthly rent deferred for period presented

$94

-

-

Amount of monthly rent deferred for the period presented, as a percentage of rent collected

0.6%

0.0%

0.0%

 

 

 

 

Rent collected, after the effect of signed payment plans, as a percentage of rent billed

97.9%

98.6%

98.1%

 

 

 

 

 

 

 

6

 


 

Operating statistics

April 2020

April 2019

1Q 2020

Average occupancy

92.7%

94.1%

92.5%

Average effective monthly rent per unit

$1,106

$1,048

$1,100

Resident retention rate

53.8%

49.0%

51.2%

 

 

(1)

All metrics presented are for our total portfolio in the period presented.

 

(2)

All metrics are based on IRT’s internal data, which management uses to monitor property performance on a daily or weekly basis.

 

(3)

As of the last day of the period presented.

 

(4)

Payment plans allow residents to defer between 25% and 75% of their monthly rent for between 1 and 3 months. Residents must provide evidence of hardship and commit to a full 12-month lease term, which allows deferred payments to be repaid over a longer remaining lease term. As of May 5, 2020: (1) 139 payment plans were signed for April and 35 payment plans were signed for May; (2) on average residents are deferring 56% of their monthly rent for an average period of 2.7 months with an average repayment period of 9.3 months; and (3) there were 121 residents who have applied for payment plans that were pending approval.

 

Expected Dividend Reduction

IRT expects to reduce its quarterly common stock dividend, beginning with the dividend for the second quarter of 2020, from $0.18 per share (an annual rate of $0.72 per share) to $0.12 per share (an annual rate of $0.48 per share).

 

Mr. Schaeffer further commented, “Given our track record of NOI growth delivered through a combination of organic rent growth and the continued execution of our value add initiative, we were well positioned to achieve a normalized dividend payout ratio of 70-75% over time. Given market uncertainty, along with our decision to pause a portion of our value add program, we believe it is prudent at this time to adjust our dividend payout ratio to be more in line with our peers beginning in the second quarter of 2020.  The rightsized dividend increases our financial flexibility and will allow us to accelerate our deleveraging efforts as we will be retaining approximately $23 million annually.”

 

Atlanta Portfolio Letter of Intent Expiration  

Subsequent to the quarter end, on April 9, 2020, IRT announced that it had allowed the non-binding letter of intent related to the acquisition of three Class A communities in Atlanta, GA to expire, without realizing any financial penalty.

 

Public Stock Offering

On February 24, 2020, IRT closed a public offering of 10,350,000 shares of common stock at a public offering price of $15.30 per share, including 1,350,000 shares sold pursuant to the exercise in full of the underwriters’ option to purchase additional shares of common stock. In connection with the offering, IRT entered into forward sale agreements.

 

On March 31, 2020, IRT settled $50 million of its forward sale agreements by issuing 3.406 million shares. After this settlement, IRT had 6.944 million shares remaining to be issued under the forward sale agreements for gross proceeds of approximately $102 million.

 

Financial Flexibility

As of March 31, 2020, IRT had a total liquidity position of approximately $258 million, which includes unrestricted cash, as well as additional capacity through our unsecured line of credit and remaining proceeds from the forward equity offering.

 

 

 


7

 


Capital Recycling

On February 11, 2020, IRT acquired a 251-unit community in Dallas, TX for $51.2 million. This is a newly constructed community within close proximity of one of our existing communities. At the time of acquisition, the community was in lease up with average rent per unit of $1,553.

 

Capital Expenditures

For the three months ended March 31, 2020, recurring capital expenditures for the total portfolio were $1.3 million, or $84 per unit.

 

Distributions

On March 16, 2020, IRT’s Board of Directors declared a quarterly cash dividend of $0.18 per share of IRT common stock, payable on April 24, 2020 to stockholders of record at the close of business on April 2, 2020.

 

2020 EPS and CFFO Guidance

On March 26, 2020, IRT suspended its fiscal 2020 guidance, given the uncertainty around the length and depth of the coronavirus crisis and its impact on the economy. At this time, IRT believes it is prudent to keep its guidance suspended.

    

Selected Financial Information

See the schedules at the end of this earnings release for selected financial information for IRT.

 

Non-GAAP Financial Measures and Definitions

IRT discloses the following non-GAAP financial measures in this earnings release: FFO, CFFO, NOI and Adjusted EBITDA. Included at the end of this release are definitions of these non-GAAP financial measures and a reconciliation of IRT’s reported net income to its FFO and CFFO, a reconciliation of IRT’s same store NOI to its reported net income, a reconciliation of IRT’s Adjusted EBITDA to net income, and management’s rationales for the usefulness of each of these and other non-GAAP financial measures used in this release.

 

Conference Call

All interested parties can listen to the live conference call webcast at 9:00 AM ET on Thursday, May 7, 2020 from the investor relations section of the IRT website at www.irtliving.com or by dialing 1.844.775.2542, access code 4097673. For those who are not available to listen to the live call, the replay will be available shortly following the live call from the investor relations section of IRT’s website and telephonically until Thursday, May 14, 2020 by dialing 1.855.859.2056, access code 4097673.

 

Supplemental Information

IRT produces supplemental information that includes details regarding the performance of the portfolio, financial information, non-GAAP financial measures, same store information and other useful information for investors. The supplemental information is available via the Company's website, www.irtliving.com, through the "Investor Relations" section.

 

About Independence Realty Trust, Inc.

Independence Realty Trust, Inc. (NYSE: IRT) is a real estate investment trust that owns and operates multifamily apartment properties across non-gateway U.S. markets, including Atlanta, Louisville, Memphis, and Raleigh. IRT’s investment strategy is focused on gaining scale within key amenity rich submarkets that offer good school districts, high-quality retail and major employment centers. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and capital appreciation. More information may be found on the Company’s website at www.irtliving.com.

 


8

 


Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “will,” “strategy,” “expects,” “seeks,” “believes,” “potential,” or other similar words. These forward-looking statements include, without limitation, IRT’s

expectations with respect to capital allocations, including as to timing and amount of future dividends. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations of IRT’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally not within IRT’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Risks and uncertainties that might cause IRT’s actual results and/or future dividends to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: risks related to the impact of COVID-19 and other potential future outbreaks of infectious diseases on the financial condition, results of operations, cash flows and performance of IRT and its tenants as well as on the economy and real estate and financial markets; changes in market demand for rental apartment homes and pricing pressures, including from competitors, that could limit our ability to lease units or increase rents or that could lead to declines in occupancy and rent levels; uncertainty and volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital; inability of tenants to meet their rent and other lease obligations; legislative restrictions that may delay or limit collections of past due rents; risks endemic to real estate and the real estate industry generally; the effects of natural and other disasters; delays in completing, and cost overruns incurred in connection with, our value add initiatives and failure to achieve projected rent increases and occupancy levels on account of the initiatives; unexpected costs of REIT qualification compliance; costs and disruptions as the result of a cybersecurity incident or other technology disruption; and share price fluctuations. Please refer to the documents filed by the Company with the SEC, specifically the Company's Annual Report on Form 10-K for the year ended December 31, 2019, as it may be updated or supplemented in the Company's Quarterly Reports on Form 10-Q and the Company's other filings with the SEC, which identify additional risk factors that could cause actual results to differ from those contained in forward-looking statements. IRT undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law. In addition,

the declaration of dividends on our common stock is subject to the discretion of our Board of Directors and depends upon

a broad range of factors, including our results of operations, financial condition, capital requirements, the annual

distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, applicable legal

requirements and such other factors as our Board of Directors may from time to time deem relevant. For these reasons,

as well as others, there can be no assurance that dividends in the future will be equal or similar to the expected amount of

the quarterly dividend described in this press release.

 

Independence Realty Trust, Inc. Contact

Edelman Financial Communications & Capital Markets

Ted McHugh and Lauren Torres

212.704.8112

IRT@edelman.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 


FINANCIAL & OPERATING HIGHLIGHTS

Dollars in thousands, except share and per share data

 

 

 

For the Three Months Ended

 

 

 

March 31, 2020

 

December 31,

2019

 

September 30,

2019

 

June 30,

2019

 

March 31,

2019

 

Selected Financial Information:

 

 

 

 

 

 

 

 

 

 

 

Operating Statistics:

 

 

 

 

 

 

 

 

 

 

 

Net income available to common shares

 

$(372)

 

$23,784

 

$4,863

 

$14,709

 

$2,540

 

Earnings (loss) per share -- diluted

 

$0.00

 

$0.26

 

$0.05

 

$0.16

 

$0.03

 

Rental and other property revenue

 

$51,156

 

$51,250

 

$51,057

 

$50,848

 

$49,465

 

Property operating expenses

 

$19,737

 

$19,064

 

$20,546

 

$20,072

 

$19,886

 

Net operating income

 

$31,419

 

$32,186

 

$30,511

 

$30,776

 

$29,579

 

NOI margin

 

61.4%

 

62.8%

 

59.8%

 

60.5%

 

59.8%

 

Adjusted EBITDA

 

$24,081

 

$27,427

 

$25,739

 

$25,284

 

$24,734

 

CORE FFO per share

 

$0.19

 

$0.20

 

$0.19

 

$0.19

 

$0.18

 

Dividends per share

 

$0.18

 

$0.18

 

$0.18

 

$0.18

 

$0.18

 

CORE FFO payout ratio

 

94.7%

 

90.0%

 

94.7%

 

94.7%

 

100.0%

 

Portfolio Data:

 

 

 

 

 

 

 

 

 

 

 

Total gross assets

 

$1,949,494

 

$1,841,738

 

$1,821,173

 

$1,817,207

 

$1,807,955

 

Total number of properties

 

58

 

57

 

57

 

58

 

58

 

Total units

 

15,805

 

15,554

 

15,536

 

15,734

 

15,880

 

Period end occupancy

 

92.7%

 

92.5%

 

92.8%

 

94.0%

 

93.9%

 

Total portfolio average occupancy

 

92.5%

 

92.5%

 

93.5%

 

94.4%

 

92.9%

 

Total portfolio average effective monthly rent, per

   unit

 

$1,100

 

$1,088

 

$1,084

 

$1,058

 

$1,042

 

Same store period end occupancy (a)

 

93.0%

 

92.5%

 

92.8%

 

94.0%

 

93.8%

 

Same store portfolio average occupancy (a)

 

92.7%

 

92.4%

 

93.4%

 

94.2%

 

92.8%

 

Same store portfolio average effective monthly rent,

   per unit (a)

 

$1,089

 

$1,083

 

$1,077

 

$1,056

 

$1,038

 

Capitalization:

 

 

 

 

 

 

 

 

 

 

 

Total debt

 

$1,049,541

 

$985,572

 

$979,330

 

$989,499

 

$990,920

 

Common share price, period end

 

$8.94

 

$14.08

 

$14.31

 

$11.57

 

$10.79

 

Market equity capitalization

 

$853,600

 

$1,294,545

 

$1,313,311

 

$1,050,712

 

$978,825

 

Total market capitalization

 

$1,903,141

 

$2,280,117

 

$2,292,641

 

$2,040,211

 

$1,969,745

 

Total debt/total gross assets

 

53.8%

 

53.5%

 

53.8%

 

54.5%

 

54.8%

 

Net debt to Adjusted EBITDA (pro forma) (b)

 

9.0x

 

8.9x

 

9.0x

 

9.2x

 

9.2x

 

Interest coverage

 

2.5x

 

2.8x

 

2.6x

 

2.6x

 

2.5x

 

Common shares and OP Units:

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding

 

94,691,806

 

91,070,637

 

90,894,656

 

89,932,418

 

89,834,793

 

OP units outstanding

 

789,134

 

871,491

 

881,107

 

881,107

 

881,107

 

Common shares and OP units outstanding

 

95,480,939

 

91,942,128

 

91,775,763

 

90,813,525

 

90,715,900

 

Weighted average common shares and units

 

91,737,113

 

91,526,726

 

90,908,646

 

90,394,212

 

89,870,556

 

 

 

(a)

Same store portfolio consists of 54 properties, which represent 14,748 units.

 

(b)

Reflects pro forma net debt to Adjusted EBITDA for each period presented, which includes adjustments for the timing of acquisitions, the full quarter effect of current value add initiatives, the completion of capital recycling activities including paydown of associated indebtedness, and the normalization of one-time items impacting quarterly EBITDA. Actual net debt to Adjusted EBITDA for the five quarters ended March 31, 2020 was 10.3x, 8.9x, 9.4x, 9.7x, and 9.9x, respectively.

 

 

 

10

 


BALANCE SHEETS

Dollars in thousands, except per share data

 

 

 

As of

 

 

March 31, 2020

 

December 31,

2019

 

September 30,

2019

 

June 30,

2019

 

March 31,

2019

Assets:

 

 

 

 

 

 

 

 

 

 

Investments in real estate at cost

 

$1,856,760

 

$1,796,365

 

$1,732,392

 

$1,704,769

 

$1,669,875

Less: accumulated depreciation

 

(172,789)

 

(158,435)

 

(145,075)

 

(136,488)

 

(124,107)

Investments in real estate, net

 

1,683,971

 

1,637,930

 

1,587,317

 

1,568,281

 

1,545,768

Real estate held for sale

 

 

 

32,381

 

50,494

 

77,430

Cash and cash equivalents

 

57,436

 

9,888

 

6,587

 

11,060

 

9,030

Restricted cash

 

4,740

 

4,545

 

8,960

 

7,780

 

7,122

Other assets

 

10,731

 

10,380

 

16,439

 

16,364

 

10,984

Derivative assets

 

 

953

 

982

 

1,558

 

5,327

Intangible assets, net

 

260

 

410

 

351

 

210

 

188

Total assets

 

$1,757,138

 

$1,664,106

 

$1,653,017

 

$1,655,747

 

$1,655,849

Liabilities and Equity:

 

 

 

 

 

 

 

 

 

 

Indebtedness, net

 

$1,049,541

 

$985,572

 

$979,330

 

$989,499

 

$990,920

Accounts payable and accrued expenses

 

21,250

 

25,399

 

32,249

 

26,374

 

22,092

Accrued interest payable

 

2,099

 

2,196

 

794

 

691

 

681

Dividends payable

 

17,128

 

16,491

 

16,460

 

16,285

 

16,267

Derivative liabilities

 

30,937

 

7,769

 

12,415

 

7,394

 

1,460

Other liabilities

 

7,012

 

6,922

 

7,399

 

7,595

 

7,355

Total liabilities

 

1,127,967

 

1,044,349

 

1,048,647

 

1,047,838

 

1,038,775

Equity:

 

 

 

 

 

 

 

 

 

 

Shareholders' Equity:

 

 

 

 

 

 

 

 

 

 

Preferred shares, $0.01 par value per share

 

 

 

 

 

Common shares, $0.01 par value per share

 

947

 

911

 

909

 

899

 

898

Additional paid in capital

 

817,501

 

765,992

 

762,933

 

749,552

 

747,731

Accumulated other comprehensive income (loss)

 

(35,750)

 

(12,099)

 

(17,097)

 

(11,769)

 

(2,308)

Retained earnings (deficit)

 

(159,045)

 

(141,525)

 

(148,977)

 

(137,539)

 

(136,120)

Total shareholders' equity

 

623,653

 

613,279

 

597,768

 

601,143

 

610,201

Noncontrolling Interests

 

5,518

 

6,478

 

6,602

 

6,766

 

6,873

Total equity

 

629,171

 

619,757

 

604,370

 

607,909

 

617,074

Total liabilities and equity

 

$1,757,138

 

$1,664,106

 

$1,653,017

 

$1,655,747

 

$1,655,849

11

 


STATEMENTS OF OPERATIONS, FFO & CORE FFO

TRAILING FIVE QUARTERS

Dollars in thousands, except per share data

 

 

For the Three Months Ended

 

 

March 31, 2020

 

December 31,

2019

 

September 30,

2019

 

June 30,

2019

 

March 31,

2019

Revenue:

 

 

 

 

 

 

 

 

 

 

Rental and other property revenue

 

$51,156

 

$51,250

 

$51,057

 

$50,848

 

$49,465

Other revenue

 

194

 

178

 

242

 

108

 

75

Total revenue

 

51,350

 

51,428

 

51,299

 

50,956

 

49,540

Expenses:

 

 

 

 

 

 

 

 

 

 

Property operating expenses

 

19,737

 

19,064

 

20,546

 

20,072

 

19,886

Property management expenses

 

2,156

 

1,950

 

1,901

 

2,062

 

1,813

General and administrative expenses (a)

 

5,376

 

2,987

 

3,113

 

3,538

 

3,107

Depreciation and amortization expense

 

14,828

 

14,213

 

13,434

 

12,721

 

12,447

Abandoned deal costs

 

130

 

 

 

 

Total expenses

 

42,227

 

38,214

 

38,994

 

38,393

 

37,253

Interest expense

 

(9,497)

 

(9,873)

 

(9,783)

 

(9,849)

 

(9,721)

Net gains (losses) on sale of assets

 

 

20,679

 

2,390

 

12,142

 

Net income (loss)

 

(374)

 

24,020

 

4,912

 

14,856

 

2,566

(Income) loss allocated to noncontrolling interests

 

2

 

(236)

 

(49)

 

(147)

 

(26)

Net income (loss) available to common shares

 

$(372)

 

$23,784

 

$4,863

 

$14,709

 

$2,540

EPS - basic

 

$0.00

 

$0.26

 

$0.05

 

$0.16

 

$0.03

Weighted-average shares outstanding - Basic

 

90,895,488

 

90,646,142

 

90,027,540

 

89,513,105

 

88,989,450

EPS - diluted

 

$0.00

 

$0.26

 

$0.05

 

$0.16

 

$0.03

Weighted-average shares outstanding - Diluted

 

90,895,488

 

91,409,854

 

90,691,368

 

90,019,909

 

89,516,224

Funds From Operations (FFO):

 

 

 

 

 

 

 

 

 

 

Net Income (loss)

 

$(374)

 

$24,020

 

$4,912

 

$14,856

 

$2,566

Add-Back (Deduct):

 

 

 

 

 

 

 

 

 

 

Real estate depreciation and amortization

 

14,725

 

14,175

 

13,313

 

12,675

 

12,318

Net (gains) losses on sale of assets excluding debt extinguishment costs

 

 

(22,862)

 

(5,594)

 

(14,171)

 

FFO

 

$14,351

 

$15,333

 

$12,631

 

$13,360

 

$14,884

FFO per share

 

$0.16

 

$0.17

 

$0.14

 

$0.15

 

$0.17

CORE Funds From Operations (CFFO):

 

 

 

 

 

 

 

 

 

 

FFO

 

$14,351

 

$15,333

 

$12,631

 

$13,360

 

$14,884

Add-Back (Deduct):

 

 

 

 

 

 

 

 

 

 

Stock compensation expense (a)

 

2,627

 

717

 

692

 

1,086

 

622

Amortization of deferred financing costs

 

361

 

370

 

351

 

362

 

339

Other depreciation and amortization

 

103

 

38

 

121

 

46

 

129

Abandoned deal costs

 

130

 

 

 

 

Debt extinguishment costs included in net gains (losses) on sale of assets

 

 

2,184

 

3,204

 

2,029

 

CFFO

 

$17,572

 

$18,642

 

$16,999

 

$16,883

 

$15,974

CFFO per share

 

$0.19

 

$0.20

 

$0.19

 

$0.19

 

$0.18

Weighted-average shares and units outstanding

 

91,737,113

 

91,526,726

 

90,908,646

 

90,394,212

 

89,870,556

 

 

(a)

Included in the three-months ended March 31, 2020 is $1.7 million of stock compensation expense recorded with respect to stock awards granted during the period to retirement eligible employees.

 

12

 


STATEMENTS OF OPERATIONS, FFO & CORE FFO

THREE MONTHS ENDED MARCH 31, 2020 and 2019

Dollars in thousands, except per share data

 

 

For the Three Months Ended March 31,

 

 

2020

 

2019

Revenue:

 

 

 

 

Rental and other property revenue

 

$51,156

 

$49,465

Other revenue

 

194

 

75

Total revenue

 

51,350

 

49,540

Expenses:

 

 

 

 

Property operating expenses

 

19,737

 

19,886

Property management expenses

 

2,156

 

1,813

General and administrative expenses (a)

 

5,376

 

3,107

Depreciation and amortization expense

 

14,828

 

12,447

Abandoned deal costs

 

130

 

Total expenses

 

42,227

 

37,253

Interest expense

 

(9,497)

 

(9,721)

Net income (loss)

 

(374)

 

2,566

(Income) loss allocated to noncontrolling interests

 

2

 

(26)

Net income (loss) available to common shares

 

$(372)

 

$2,540

EPS - basic

 

$0.00

 

$0.03

Weighted-average shares outstanding - Basic

 

90,895,488

 

88,989,450

EPS - diluted

 

$0.00

 

$0.03

Weighted-average shares outstanding - Diluted

 

90,895,488

 

89,516,224

 

 

 

 

 

Funds From Operations (FFO):

 

 

 

 

Net Income (loss)

 

$(374)

 

$2,566

Adjustments:

 

 

 

 

Real estate depreciation and amortization

 

14,725

 

12,318

Net (gains) losses on sale of assets excluding debt extinguishment costs

 

 

Funds From Operations

 

$14,351

 

$14,884

FFO per share

 

$0.16

 

$0.17

Core Funds From Operations (CFFO):

 

 

 

 

Funds From Operations

 

$14,351

 

$14,884

Adjustments:

 

 

 

 

Stock compensation expense (a)

 

2,627

 

622

Amortization of deferred financing costs

 

361

 

339

Other depreciation and amortization

 

103

 

129

Abandoned deal costs

 

130

 

Core Funds From Operations

 

$17,572

 

$15,974

CFFO per share

 

$0.19

 

$0.18

Weighted-average shares and units outstanding

 

91,737,113

 

89,870,556

 

 

(a)

Included in the three-months ended March 31, 2020 is $1.7 million of stock compensation expense recorded with respect to stock awards granted during the period to retirement eligible employees.

 

 

 

13

 


ADJUSTED EBITDA RECONCILIATION AND COVERAGE RATIO

Dollars in thousands

 

 

 

Three Months Ended

 

ADJUSTED EBITDA:

 

March 31, 2020

 

December 31,

2019

 

September 30,

2019

 

June 30,

2019

 

March 31,

2019

 

Net income (loss)

 

$(374)

 

$24,020

 

$4,912

 

$14,856

 

$2,566

 

Add-Back (Deduct):

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

14,828

 

14,213

 

13,434

 

12,721

 

12,447

 

Interest expense

 

9,497

 

9,873

 

9,783

 

9,849

 

9,721

 

Net (gains) losses on sale of assets

 

 

(20,679)

 

(2,390)

 

(12,142)

 

 

Abandoned deal costs

 

130

 

 

 

 

 

Adjusted EBITDA

 

$24,081

 

$27,427

 

$25,739

 

$25,284

 

$24,734

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST COST:

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

$9,497

 

$9,873

 

$9,783

 

$9,849

 

$9,721

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST COVERAGE:

 

2.5x

 

2.8x

 

2.6x

 

2.6x

 

2.5x

 

 

 

 

 

 

 

 

 

 

 

 

 

14

 


SAME STORE PORTFOLIO NET OPERATING INCOME

TRAILING FIVE QUARTERS

Dollars in thousands, except per unit data

 

 

 

For the Three-Months Ended (a)

 

 

March 31, 2020

 

December 31,

2019

 

September 30,

2019

 

June 30,

2019

 

March 31,

2019

Revenue:

 

 

 

 

 

 

 

 

 

 

Rental and other property revenue

 

$47,893

 

$47,433

 

$48,006

 

$47,389

 

$45,746

Property Operating Expenses:

 

 

 

 

 

 

 

 

 

 

Real estate taxes

 

5,921

 

5,457

 

5,951

 

5,937

 

6,092

Property insurance

 

917

 

998

 

987

 

963

 

953

Personnel expenses

 

4,385

 

4,416

 

4,706

 

4,512

 

4,308

Utilities

 

2,766

 

3,185

 

3,167

 

2,922

 

2,578

Repairs and maintenance

 

1,500

 

1,243

 

1,970

 

1,955

 

1,499

Contract services

 

1,751

 

1,175

 

1,219

 

1,311

 

1,652

Advertising expenses

 

535

 

526

 

528

 

522

 

464

Other expenses

 

663

 

623

 

649

 

652

 

664

Total property operating expenses

 

18,438

 

17,623

 

19,177

 

18,774

 

18,210

Same-store net operating income (a)

 

$29,455

 

$29,810

 

$28,829

 

$28,615

 

$27,536

Same-store NOI margin

 

61.5%

 

62.8%

 

60.1%

 

60.4%

 

60.2%

Average occupancy

 

92.7%

 

92.4%

 

93.4%

 

94.2%

 

92.8%

Average effective monthly rent, per unit

 

$1,089

 

$1,083

 

$1,077

 

$1,056

 

$1,038

Reconciliation of same-store net operating

   income to net income (loss)

 

 

 

 

 

 

 

 

 

 

Same-store net operating income

 

$29,455

 

$29,810

 

$28,829

 

$28,615

 

$27,536

Non same-store net operating income

 

1,964

 

2,376

 

1,682

 

2,161

 

2,043

Other revenue

 

194

 

178

 

242

 

108

 

75

Property management expenses

 

(2,156)

 

(1,950)

 

(1,901)

 

(2,062)

 

(1,813)

General and administrative expenses

 

(5,376)

 

(2,987)

 

(3,113)

 

(3,538)

 

(3,107)

Depreciation and amortization expense

 

(14,828)

 

(14,213)

 

(13,434)

 

(12,721)

 

(12,447)

Abandoned deal costs

 

(130)

 

 

 

 

Interest expense

 

(9,497)

 

(9,873)

 

(9,783)

 

(9,849)

 

(9,721)

Net gains (losses) on sale of assets

 

 

20,679

 

2,390

 

12,142

 

Net income (loss)

 

$(374)

 

$24,020

 

$4,912

 

$14,856

 

$2,566

 

(a)

Same store portfolio consists of 54 properties, which represent 14,748 units.

15

 


SAME STORE PORTFOLIO NET OPERATING INCOME

THREE MONTHS ENDED MARCH 31, 2020 and 2019

Dollars in thousands, except per unit data

 

 

 

For the Three Months Ended March 31,

 

 

2020

 

2019

 

% change

Revenue:

 

 

 

 

 

Rental and other property revenue

 

$47,893

 

$45,746

 

4.7%

Property Operating Expenses:

 

 

 

 

 

Real estate taxes

 

5,921

 

6,092

 

-2.8%

Property insurance

 

917

 

953

 

-3.8%

Personnel expenses

 

4,385

 

4,308

 

1.8%

Utilities

 

2,766

 

2,578

 

7.3%

Repairs and maintenance

 

1,500

 

1,499

 

0.1%

Contract services

 

1,751

 

1,652

 

6.0%

Advertising expenses

 

535

 

464

 

15.3%

Other expenses

 

663

 

664

 

-0.2%

Total property operating expenses

 

18,438

 

18,210

 

1.3%

Same-store net operating income (a)

 

$29,455

 

$27,536

 

7.0%

Same-store NOI margin

 

61.5%

 

60.2%

 

1.3%

Average occupancy

 

92.7%

 

92.8%

 

-0.1%

Average effective monthly rent, per unit

 

$1,089

 

$1,038

 

4.9%

Reconciliation of same-store net operating

   income to net income (loss)

 

 

 

 

 

 

Same-store portfolio net operating income

 

$29,455

 

$27,536

 

 

Non same-store net operating income

 

1,964

 

2,043

 

 

Other revenue

 

194

 

75

 

 

Property management expenses

 

(2,156)

 

(1,813)

 

 

General and administrative expenses

 

(5,376)

 

(3,107)

 

 

Depreciation and amortization expense

 

(14,828)

 

(12,447)

 

 

Interest expense

 

(9,497)

 

(9,721)

 

 

Abandoned deal costs

 

(130)

 

 

 

Net income (loss)

 

$(374)

 

$2,566

 

 

(a)

Same store portfolio consists of 54 properties, which represent 14,748 units.

16

 


NET OPERATING INCOME (NOI) BRIDGE

TRAILING FIVE QUARTERS

Dollars in thousands

 

 

For the Three-Months Ended

 

 

March 31, 2020

 

December 31,

2019

 

September 30,

2019

 

June 30,

2019

 

March 31,

2019

Rental and other property revenue

 

 

 

 

 

 

 

 

 

 

Same store (a)

 

$47,893

 

$47,433

 

$48,006

 

$47,389

 

$45,746

Non same-store

 

3,263

 

3,817

 

3,051

 

3,459

 

3,719

Total rental and other property revenue

 

51,156

 

51,250

 

51,057

 

50,848

 

49,465

Property operating expenses

 

 

 

 

 

 

 

 

 

 

Same store (a)

 

18,438

 

17,623

 

19,177

 

18,774

 

18,210

Non same-store

 

1,299

 

1,441

 

1,369

 

1,298

 

1,676

Total property operating expenses

 

19,737

 

19,064

 

20,546

 

20,072

 

19,886

Net operating income

 

 

 

 

 

 

 

 

 

 

Same-store (a)

 

29,455

 

29,810

 

28,829

 

28,615

 

27,536

Non same-store

 

1,964

 

2,376

 

1,682

 

2,161

 

2,043

Total property net operating income

 

$31,419

 

$32,186

 

$30,511

 

$30,776

 

$29,579

Reconciliation of NOI to net income (loss)

 

 

 

 

 

 

 

 

 

 

Total property net operating income

 

$31,419

 

$32,186

 

$30,511

 

$30,776

 

$29,579

Other revenue

 

194

 

178

 

242

 

108

 

75

Property management expenses

 

(2,156)

 

(1,950)

 

(1,901)

 

(2,062)

 

(1,813)

General and administrative expenses

 

(5,376)

 

(2,987)

 

(3,113)

 

(3,538)

 

(3,107)

Depreciation and amortization expense

 

(14,828)

 

(14,213)

 

(13,434)

 

(12,721)

 

(12,447)

Interest expense

 

(9,497)

 

(9,873)

 

(9,783)

 

(9,849)

 

(9,721)

Abandoned deal costs

 

(130)