EX-99.1 2 sfr-ex991_6.htm EX-99.1 sfr-ex991_6.htm

 

Exhibit 99.1

 

 

 

 

 


 

Table of Contents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Section I:

Section II:

Section III:

Section IV:

Section V:

Appendix:

 

 

Earnings Release

Consolidated Financials

Selected Additional Information

Same Home Information

Earnings Guidance

Definitions and Reconciliations

 

 

2

8

13

18

29

31

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 


 

      I. Earnings Release

 

 

2

 


Earnings Release

 

 

COLONY STARWOOD HOMES ANNOUNCES

FIRST QUARTER 2017 FINANCIAL AND OPERATING RESULTS

Scottsdale, Arizona (May 8, 2017) – Colony Starwood Homes (NYSE: SFR) (the “Company”), a leading single-family rental real estate investment trust (“REIT”), today announced operating and financial results for the three months ended March 31, 2017. Capitalized terms used herein have the meanings set forth in the Appendix to the Supplemental Report of financial and operating information posted on the Company’s website.

First Quarter 2017 Highlights

Total revenues increased to $151.0 million in Q1 2017, driven by Same Home revenue growth of 6.9%

Occupancy was 96.1% for the Same Home cohort of 28,732 homes

Net loss of $11.3 million or ($0.11) per share; Core FFO of $52.8 million or $0.48 per share

Same Home NOI increased 6.5% over Q1 2016; Same Home Core NOI margin was 65.4%

Completed a $345.0 million convertible note offering with five-year term at a 3.5% coupon rate

Completed a $750.0 million follow-on equity offering ($350.0 million primary and $400.0 million secondary)

Subsequently to March 31, 2017 paid down $300.0 million of principal on SWAY 2014-1 resulting in fixed rate debt of over 90%

“Our Same Home revenue growth of 6.9% reflects the continued robust demand and muted supply within Colony Starwood Homes’ high growth markets in the first quarter of 2017. Quarter ending occupancy of 96.1% positions us well as we enter the 2017 peak leasing season while Same Home Core NOI Margin of 65.4% indicates continued gains in operating efficiencies,” stated Fred Tuomi, the Company’s CEO. “We were very pleased with the execution of the Company’s first primary equity offering of $350.0 million, which demonstrated strong investor demand, further strengthened our balance sheet and provided substantial growth capital. Looking forward, we see 2017 as another year of strong fundamentals and superior results.”

First Quarter 2017 Operating Results

Total revenues were $151.0 million for the three months ended March 31, 2017, and net loss attributable to common shareholders was $11.3 million, or ($0.11) per share, driven by depreciation and amortization expense.

NAREIT FFO was $33.9 million for the three months ended March 31, 2017, or $0.31 per share, and Core FFO was $52.8 million, or $0.48 per share. NAREIT FFO and Core FFO are common supplemental measures of operating performance for a REIT, and the Company believes both are useful to investors as a complement to GAAP measures because they facilitate an understanding of the operating performance of the Company’s properties.

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

 

3

 


Earnings Release (Continued)

 

 

Same Home Results

For the Company’s Same Home portfolio of 28,732 homes, revenue, operating expenses and NOI were $137.4 million, $50.7 million and $86.7 million, respectively, for the three months ended March 31, 2017.  Year-over-year Same Home revenue and expense growth were affected by the implementation of a third-party utility billing service provider during the third quarter 2016, whereby water, sewer and trash services are now held in the Company’s name during resident occupancy and subsequently billed-back to the resident; this had the effect of increasing both revenue growth and expense growth.  Core Rental Revenue and Core Property Operating Expense measures reflect the net effect of these utility reimbursements, as well as other chargebacks.  Core Revenue growth for the quarter was 5.6% with Core Expense growth of 4.0%. Same Home Core NOI margin for the three months ended March 31, 2017 and March 31, 2016 was 65.4% and 64.9%, respectively. The table below summarizes Same Home operating results.

Same Home

Q1 Results

Homes as of March 31, 2017

28,732

Occupancy as of March 31, 2017

96.1%

Revenue/Core Revenue Growth (March 31, 2017 as compared to March 31, 2016)

6.9%/5.6%

Operating Expense/Core Expense Growth (March 31, 2017 as compared to March 31, 2016)

7.6%/4.0%

NOI Growth (March 31, 2017 as compared to March 31, 2016)

6.5%

NOI/Core NOI Margin

63.1%/65.4%

Investments

During the three months ended March 31, 2017, the Company acquired 397 homes for an aggregate total investment of approximately $92.4 million, or approximately $233,000 per home, including estimated investment costs for renovation.  The Company sold 136 single-family rental homes for gross sales proceeds of $27.8 million, resulting in a gain of approximately $0.7 million.

Balance Sheet and Capital Markets Activities 

As of March 31, 2017, the Company had $3.8 billion of debt outstanding and approximately $250.0 million of undrawn commitments on its credit facilities.

In January, the Company sold $345.0 million of 3.50% convertible senior notes due 2022.  The Company used the net proceeds from the new convertible offering to repurchase, in privately negotiated transactions, substantially all of its 4.50% convertible senior notes due in 2017.  Remaining proceeds from the note issuance were used to repay amounts drawn on the Company’s credit facilities, to fund ongoing asset acquisitions and for general corporate purposes.  During January, the Company also entered into a five-year $550.0 million swap contract, effectively fixing its floating securitization debt at an average rate of 3.59% over the term bringing the Company’s fixed rate debt to over 90% of total debt.

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

 

4

 


Earnings Release (Continued)

 

 

In March, the Company completed a follow on equity offering of approximately $750.0, consisting of approximately $350.0 million primary shares sold by the Company and approximately $400.0 million in secondary shares sold by original sponsors.  In March the Company also entered into an $800.0 million forward swap contract effective from 2019 through 2022 to extend existing swap contracts expiring in 2019.

Subsequent to March 31, 2017, the Company finalized a $675.0 million revolving credit facility, replacing two secured facilities originated prior to the merger between Colony American Homes and Starwood Waypoint.  The Company entered into an at-the-market (ATM) sales agreement under which it may sell up to $300.0 million of its common shares in amounts and times to be determined by the Company.  The Company paid down the principal balance of its SWAY 2014-1 securitization by $300 million from cash on hand.

On May 2, 2017, the Board declared a dividend of $0.22 per common share for the second quarter of 2017, which will be paid on July 14, 2017 to shareholders of record on June 30, 2017.

Full Year 2017 Financial Guidance

The Company is reaffirming it’s full-year 2017 guidance and the assumptions outlined below:

2017 Guidance

Core FFO/Share

$1.85 - $1.95

Same Home Revenue Growth (1)

4 – 5%

Same Home Expense Growth (1)

2 – 3%

Same Home Core NOI Margin

63 – 65%

Same Home Occupancy

95 – 96%

Same Home Turnover

34 – 36%

The Company does not provide forward-looking guidance for certain financial measures on a GAAP basis because it is unable to reasonably predict certain items contained in the GAAP measures, including one-time and infrequent items that are not indicative of the Company’s ongoing operations. Such items include, but are not limited to, discontinued operations, share-based compensation and other items not reflective of the Company's ongoing operations.

This outlook is based on a number of assumptions, many of which are outside the Company’s control and all of which are subject to change. This outlook reflects the Company’s expectations on (1) existing investments and (2) yield on incremental investments inclusive of the Company’s existing pipeline. All guidance is based on current expectations of future economic conditions and the judgment of the Company’s management team.  Please refer to the Forward Looking Statements disclosure.

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

(1) Growth rates presented exclude the impact of resident utility billing revenue and associated utility chargeback expenses as a result of the CSH utility chargeback transition beginning in Q3 2016, whereby water, sewer and trash services are held in the Company’s name during resident occupancy and subsequently billed back to the resident.

 

5

 

 


Earnings Release (Continued)

 

 

First Quarter 2017 Conference Call

A conference call is scheduled on Tuesday, May 9, 2017, at 11:00 a.m. Eastern Time to discuss the Company’s financial results for the three months ended March 31, 2017. The domestic dial-in number is 1-877-407-9039 (for U.S. and Canada) and the international dial-in number is 1-201-689-8470 (passcode not required). An audio webcast may be accessed at www.colonystarwood.com in the investor relations section. A replay of the call will be available through June 9, 2017 and can be accessed by calling 1-844-512-2921 (U.S. and Canada) or 1-412-317-6671 (international), replay pin number 13658913, or by using the link at www.colonystarwood.com, in the investor relations section. 

About Colony Starwood Homes

Colony Starwood Homes (NYSE: SFR) is one of the largest publicly traded owners and operators of single-family rental homes in the United States. Colony Starwood Homes acquires, renovates, leases, maintains and manages single-family homes in markets that exhibit favorable demographics and long-term economic trends, as well as strengthening demand for rental properties. Colony Starwood Homes is building its business upon a foundation of respect for its residents and the communities in which it operates. Additional information can be found at www.colonystarwood.com.

Additional information 

A copy of the First Quarter 2017 Supplemental Information Package (“Q1 2017 Supplement”) and this press release are available on the Company’s website at www.colonystarwood.com.  

Notice Regarding Non-GAAP Financial Measures

This press release and the Q1 2017 Supplement contain and may refer to certain non-GAAP financial measures and terms that management believes are helpful in understanding our business, as further set forth in the definitions, explanations and reconciliations of each non-GAAP financial measure to its most comparable GAAP financial measures included in the Appendix. These measures and terms are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP and should be read together with the most comparable GAAP measures.

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

 

6

 


Earnings Release (Continued)

 

 

Forward-Looking Statements

Certain statements in this press release and the quarterly supplement/presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws and are based on certain assumptions and discuss future expectations, describe future plans and strategies and contain financial and operating projections or state other forward-looking information. The Company’s ability to predict results or the actual effect of future events, actions, plans or strategies is inherently uncertain. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, the Company’s actual results and performance could differ materially from those set forth in, or implied by, the forward-looking statements. Factors that could materially and adversely affect the Company’s business, financial condition, liquidity, results of operations and prospects, as well as the Company’s ability to make distributions to its shareholders, include, but are not limited to: the factors referenced in the Company’s Annual Report on Form 10-K; unanticipated increases in financing and other costs, including a rise in interest rates; the availability, terms and the Company’s ability to effectively deploy short-term and long-term capital; the possibility that unexpected liabilities may arise from the Company’s merger (the “Merger”) with Colony American Homes (“CAH”), including the outcome of any legal proceedings that have been or may be instituted against the Company, CAH or others in connection with the Merger and the associated transactions; changes in the Company’s business and growth strategies; the Company’s ability to hire and retain highly skilled managerial, investment, financial and operational personnel; volatility in the real estate industry, interest rates and spreads, the debt or equity markets, the economy generally or the rental home market specifically, whether the result of market events or otherwise; events or circumstances that undermine confidence in the financial markets or otherwise have a broad impact on financial markets, such as the sudden instability or collapse of large financial institutions or other significant corporations, terrorist attacks, natural or man-made disasters, or threatened or actual armed conflicts; declines in the value of single-family residential homes, and macroeconomic shifts in demand for, and competition in the supply of, rental homes; the availability of attractive investment opportunities in homes that satisfy the Company’s investment objective and business and growth strategies; the Company’s ability to convert the properties it acquires into rental homes generating attractive returns and to effectively control the timing and costs relating to the renovation and operation of the properties; the Company’s ability to complete its exit from the non-performing loan (“NPL”) (and related real estate owned) business in the anticipated time period on acceptable terms and to re-deploy net cash proceeds therefrom; the Company’s ability to lease or re-lease its rental homes to qualified residents on attractive terms or at all; the failure of residents to pay rent when due or otherwise perform their lease obligations; the Company’s ability to effectively manage its portfolio of rental homes; the concentration of credit risks to which the Company is exposed; the rates of default or decreased recovery rates on the Company’s target assets; the adequacy of the Company’s cash reserves and working capital; potential conflicts of interest with Starwood Capital Group, Colony Capital, LLC (“Colony Capital”), Colony NorthStar, Inc. (“Colony NorthStar”) and their affiliates and managed investment activities; the timing of cash flows, if any, from the Company’s investments; the Company’s expected leverage; financial and operating covenants contained in the Company’s credit facilities and securitizations that could restrict its business and investment activities; effects of derivative and hedging transactions; the Company’s ability to maintain effective internal controls as required by the Sarbanes-Oxley Act of 2002 and to comply with other public company regulatory requirements; the Company’s ability to maintain its exemption from registration as an investment company under the Investment Company Act of 1940, as amended; actions and initiatives of the U.S., state and municipal governments and changes to governments’ policies that impact the economy generally and, more specifically, the housing and rental markets; changes in governmental regulations, tax laws (including changes to laws governing the taxation of real estate investment trusts (“REITs”)) and rates, and similar matters; limitations imposed on the Company’s business and its ability to satisfy complex rules in order for the Company and, if applicable, certain of its subsidiaries to qualify as a REIT for U.S. federal income tax purposes and the ability of certain of the Company’s subsidiaries to qualify as taxable REIT subsidiaries for U.S. federal income tax purposes, and the Company’s ability and the ability of its subsidiaries to operate effectively within the limitations imposed by these rules; and estimates relating to the Company’s ability to make distributions to its shareholders in the future.

You should not place undue reliance on any forward-looking statement and should consider all of the uncertainties and risks described above, as well as those more fully discussed in the reports and other documents filed by the Company with the Securities and Exchange Commission from time to time. Except as required by law, the Company is under no duty to, and the Company does not intend to, update any of the forward-looking statements appearing herein, whether as a result of new information, future events or otherwise.

 

Contacts:

 

 

 

Investor Relations

Media Relations

Phone: 480-800-3490

Email: IR@colonystarwood.com                                    

Jason Chudoba Phone: 646-277-1249

Email: Jason.chudoba@icrinc.com

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

 

7

 


 

 

      II. Consolidated Financials

 

 

8

 


Balance Sheet (Unaudited)

 

 

As of March 31, 2017

Dollars in thousands

 

Assets

 

 

Liabilities

 

Investments in real estate properties:

 

 

Accounts payable and accrued expenses

$             90,617

Land and land improvements

$       1,595,371

 

Resident prepaid rent and security deposits

60,403

Buildings and building improvements

4,469,092

 

Mortgage loans, net

3,327,374

Furniture, fixtures and equipment

140,333

 

Convertible senior notes, net

516,493

Total investments in real estate properties

6,204,796

 

Liabilities related to assets held for sale

6,005

Accumulated depreciation

(411,968)

 

Other liabilities

87

Investments in real estate properties, net

5,792,828

 

Total liabilities

4,000,979

Real estate held for sale, net

23,759

 

Equity

 

Cash and cash equivalents

430,926

 

Common shares, at par

1,127

Restricted cash

159,131

 

Additional paid-in capital

3,100,597

Investments in unconsolidated joint ventures

34,114

 

Accumulated deficit

(357,540)

Asset-backed securitization certificates

141,103

 

Accumulated other comprehensive income

28,681

Assets held for sale

50,478

 

Total shareholders' equity

2,772,865

Goodwill

260,230

 

Non-controlling interests

190,029

Other assets, net

71,304

 

Total equity

2,962,894

Total assets

$     6,963,873

 

Total liabilities and equity

$     6,963,873

 

 

 

 

 

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

 

9

 


Statements of Operations (Unaudited)

 

 

Dollars in thousands

 

 

Three Months Ended March 31,

 

 

 

 

2017

 

 

2016

 

 

Revenues

 

 

 

 

 

 

 

 

 

Rental income

 

$

141,095

 

 

$

130,452

 

 

Other property income

 

 

7,171

 

 

 

4,924

 

 

Other Income

 

 

2,774

 

 

 

2,890

 

 

Total revenues

 

 

151,040

 

 

 

138,266

 

 

Expenses

 

 

 

 

 

 

 

 

 

Property operating and maintenance

 

 

18,946

 

 

 

16,738

 

 

Real estate taxes, insurance and HOA costs

 

 

28,299

 

 

 

27,319

 

 

Property management

 

 

9,650

 

 

 

10,016

 

 

Interest expense

 

 

38,999

 

 

 

37,457

 

 

Depreciation and amortization

 

 

46,185

 

 

 

43,630

 

 

Impairment of real estate assets

 

 

443

 

 

 

30

 

 

Share-based compensation

 

 

1,561

 

 

 

387

 

 

General and administrative

 

 

10,840

 

 

 

16,366

 

 

Merger and transaction-related expenses

 

 

-

 

 

 

23,482

 

 

Total expenses

 

 

154,923

 

 

 

175,425

 

 

Net gain on sales of real estate

 

 

678

 

 

 

1,384

 

 

Equity in income from unconsolidated joint ventures

 

 

180

 

 

 

197

 

 

Loss on extinguishment of debt

 

 

(7,153

)

 

 

-

 

 

Other expense, net

 

 

(1,639

)

 

 

(725

)

 

Loss before income taxes

 

 

(11,817

)

 

 

(36,303

)

 

Income tax expense

 

 

157

 

 

 

245

 

 

Net loss from continuing operations

 

 

(11,974

)

 

 

(36,548

)

 

Loss from discontinued operations, net

 

 

(46

)

 

 

(10,501

)

 

Net loss

 

 

(12,020

)

 

 

(47,049

)

 

Net loss attributable to non-controlling interests

 

 

678

 

 

 

2,850

 

 

Net loss attributable to common shareholders

 

$

(11,342

)

 

$

(44,199

)

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - basic

 

 

 

 

 

 

 

 

 

Net income available to common shareholders

 

$

(0.11

)

 

$

(0.43

)

 

Weighted average common shares outstanding

 

 

104,593,904

 

 

 

102,066,754

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

 

10

 


Reconciliation to FFO, Core FFO and Core AFFO

 

 

Dollars in thousands, except share and per share data

 

 

Three Months Ended March 31, 2017

 

 

 

 

 

 

 

 

Reconciliation of net loss to NAREIT FFO

 

 

 

 

 

Net loss attributable to common shareholders

 

$

(11,342

)

 

Adjustments:

 

 

 

 

 

Depreciation and amortization on real estate assets

 

 

46,116

 

 

Impairment of real estate assets

 

 

443

 

 

Net gain on sale of real estate

 

 

(678

)

 

Non-controlling interests

 

 

(678

)

 

Discontinued operations, net (NPL/REO)

 

 

46

 

 

NAREIT FFO

 

$

33,907

 

 

NAREIT FFO per share (1)

 

$

0.31

 

 

 

 

 

 

 

 

Adjustments for Core FFO

 

 

 

 

 

NAREIT FFO

 

$

33,907

 

 

Amortization of deferred financing costs, debt premium discounts, non-cash interest expense from interest rate caps and loss on extinguishment of debt

 

 

17,330

 

 

Share-based compensation

 

 

1,561

 

 

Core FFO

 

$

52,798

 

 

 

 

 

 

 

 

Core FFO per share (1)

 

$

0.48

 

 

 

 

 

 

 

 

Adjustments for Core AFFO

 

 

 

 

 

Core FFO

 

$

52,798

 

 

Recurring capital expenditures (2)

 

 

(10,274

)

 

Capitalized leasing

 

 

(2,153

)

 

Core AFFO

 

$

40,371

 

 

 

 

 

 

 

 

Core AFFO per share (1)

 

$

0.36

 

 

 

 

 

 

 

 


 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

(1) Weighted-average common shares total 111,021,947 for the three-month period ended March 31, 2017.  These share counts are comprised of 104,593,904 weighted-average common shares outstanding and 155,214 unvested RSUs for the three-month period ended, and outstanding OP units exchangeable for 6,272,829 common shares.

(2) Comprised of $1.9 million of certain personnel costs and $0.3 million of third-party commissions.

11

 


NOI by Segment

 

 

Year-over-year comparison

 

Dollars in thousands

 

Three months ended March 31, 2017

 

 

Three months ended March 31, 2016 (1)

 

 

 

 

 

 

Same Homes

 

 

Stabilized Homes

 

 

Other Homes

 

 

Total

 

 

Same Homes

 

 

Stabilized Homes

 

 

Other Homes

 

 

Total

 

 

Total Change %

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

$

130,926

 

 

$

9,760

 

 

$

409

 

 

$

141,095

 

 

$

123,949

 

 

$

3,568

 

 

$

2,935

 

 

$

130,452

 

 

 

8.2

%

Fee income

 

3,437

 

 

 

358

 

 

 

47

 

 

 

3,842

 

 

 

2,528

 

 

 

139

 

 

 

89

 

 

 

2,756

 

 

 

39.4

%

Resident utility reimbursements

 

1,375

 

 

 

125

 

 

 

7

 

 

 

1,507

 

 

 

604

 

 

 

21

 

 

 

16

 

 

 

641

 

 

 

135.1

%

Resident chargebacks

 

1,673

 

 

 

103

 

 

 

46

 

 

 

1,822

 

 

 

1,440

 

 

 

(5

)

 

 

92

 

 

 

1,527

 

 

 

19.3

%

Asset Management Fee (2)

 

-

 

 

 

-

 

 

 

2,774

 

 

 

2,774

 

 

 

-

 

 

 

-

 

 

 

2,890

 

 

 

2,890

 

 

 

-4.0

%

Total revenues

$

137,411

 

 

$

10,346

 

 

$

3,283

 

 

$

151,040

 

 

$

128,521

 

 

$

3,723

 

 

$

6,022

 

 

$

138,266

 

 

 

9.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repairs & maintenance and turn costs

$

10,946

 

 

$

717

 

 

$

398

 

 

$

12,061

 

 

$

11,223

 

 

$

445

 

 

$

700

 

 

$

12,368

 

 

 

-2.5

%

Utilities (3)(4)

 

2,637

 

 

 

362

 

 

 

198

 

 

 

3,197

 

 

 

1,481

 

 

 

228

 

 

 

244

 

 

 

1,953

 

 

 

63.7

%

Real estate taxes

 

21,999

 

 

 

1,560

 

 

 

361

 

 

 

23,920

 

 

 

21,153

 

 

 

621

 

 

 

1,056

 

 

 

22,830

 

 

 

4.8

%

Insurance and HOA costs

 

4,075

 

 

 

233

 

 

 

71

 

 

 

4,379

 

 

 

4,222

 

 

 

119

 

 

 

148

 

 

 

4,489

 

 

 

-2.5

%

Property management costs

 

7,752

 

 

 

410

 

 

 

1,488

 

 

 

9,650

 

 

 

6,826

 

 

 

136

 

 

 

1,753

 

 

 

8,715

 

 

 

10.7

%

Bad debt

 

1,862

 

 

 

110

 

 

 

96

 

 

 

2,068

 

 

 

1,021

 

 

 

26

 

 

 

27

 

 

 

1,074

 

 

 

92.5

%

Other expenses

 

1,420

 

 

 

156

 

 

 

44

 

 

 

1,620

 

 

 

1,173

 

 

 

63

 

 

 

106

 

 

 

1,342

 

 

 

20.7

%

Total operating expenses

$

50,691

 

 

$

3,548

 

 

$

2,656

 

 

$

56,895

 

 

$

47,099

 

 

$

1,638

 

 

$

4,034

 

 

$

52,771

 

 

 

7.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Operating Income

 

86,720

 

 

 

6,798

 

 

 

627

 

 

 

94,145

 

 

 

81,422

 

 

 

2,085

 

 

 

1,988

 

 

 

85,495

 

 

 

10.1

%

Core Net Operating Income Margin

 

65.4

%

 

 

67.9

%

 

 

174.3

%

 

 

65.9

%

 

 

64.9

%

 

 

56.7

%

 

 

66.3

%

 

 

64.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home Count

 

28,732

 

 

 

2,268

 

 

 

592

 

 

 

31,592

 

 

 

28,732

 

 

 

2,268

 

 

 

592

 

 

 

31,592

 

 

 

 

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

(1) Certain revenues and expenses have been recast to be consistent with 2017 presentation.

(2) Asset management fees are comprised of property management services related to our Fannie Mae JV and Waypoint Real Estate Group (WREG) contracts.  During the first quarter of 2017 the fee revenue from Fannie Mae was $0.7 million and fee revenue from WREG was $2.0 million.

(3) Utility expense increase is largely a result of the transition to a third-party billing platform which maintains water, sewer, and trash services in the Company's name, during tenancy, with offsetting resident reimbursements/revenue.

(4) Includes approximately $0.8 million year-over-year increase of resident occupied utility expenses paid for by the Company and subsequently billed back to the resident and approximately a $0.3 million year-over-year increase for third-party service fees.

12

 


 

 

 

 

      III. Selected Additional Information

 

 

13

 


Home Count by Portfolio

 

 

As of March 31, 2017

 

 

Market:

 

Same Home

 

 

Stabilized Homes

 

Total Stable Homes (1)

 

Owned Homes Occupied % (1)

 

Other Homes (2)

 

Non-owned, Managed Homes

 

Total Homes

Atlanta

 

5,456

 

 

74

 

5,530

 

96.5%

 

36

 

312

 

5,878

Tampa

 

3,565

 

 

141

 

3,706

 

95.6%

 

11

 

220

 

3,937

Miami

 

3,389

 

 

259

 

3,648

 

95.6%

 

48

 

143

 

3,839

Southern California

 

2,718

 

 

38

 

2,756

 

97.2%

 

33

 

1,402

 

4,191

Houston

 

2,619

 

 

58

 

2,677

 

96.3%

 

45

 

1

 

2,723

Dallas

 

1,901

 

 

212

 

2,113

 

95.4%

 

73

 

-

 

2,186

Orlando

 

1,841

 

 

97

 

1,938

 

97.1%

 

1

 

10

 

1,949

Denver

 

1,767

 

 

276

 

2,043

 

94.7%

 

36

 

-

 

2,079

Las Vegas

 

1,708

 

 

9

 

1,717

 

96.8%

 

7

 

186

 

1,910

Phoenix (3)

 

1,416

 

 

202

 

1,618

 

96.3%

 

55

 

450

 

2,123

Northern California

 

771

 

 

196

 

967

 

97.0%

 

6

 

825

 

1,798

Charlotte-Raleigh

 

712

 

 

378

 

1,090

 

94.9%

 

130

 

-

 

1,220

Chicago

 

679

 

 

85

 

764

 

95.2%

 

7

 

395

 

1,166

Nashville

 

109

 

 

243

 

352

 

95.7%

 

88

 

-

 

440

Other

 

81

 

 

-

 

81

 

91.4%

 

16

 

-

 

97

Total

 

28,732

 

 

2,268

 

31,000

 

96.1%

 

592

 

3,944

 

35,536

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

(1) Excludes Other Homes and REO properties associated with the NPL business.

(2) Includes 318 not yet stabilized homes and 274 homes not intended to be held for the long term.

(3) The Phoenix market includes Tucson homes which were included with Other Homes in the 2016 presentation.

14

 


Asset Rollforward

 

 

Three months ended March 31, 2017

 

 

 

Homes as of

 

 

 

 

 

Homes as of

Market:

 

December 31, 2016 (1)

 

Acquisitions

 

Dispositions

 

March 31, 2017 (1)

Atlanta

 

5,587

 

3

 

24

 

5,566

Tampa

 

3,726

 

-

 

9

 

3,717

Miami

 

3,721

 

-

 

25

 

3,696

Southern California

 

2,807

 

-

 

18

 

2,789

Houston

 

2,748

 

-

 

26

 

2,722

Dallas

 

2,168

 

27

 

9

 

2,186

Denver

 

2,043

 

36

 

-

 

2,079

Orlando

 

1,943

 

-

 

4

 

1,939

Las Vegas

 

1,722

 

6

 

4

 

1,724

Phoenix (2)

 

1,596

 

85

 

8

 

1,673

Charlotte-Raleigh

 

1,080

 

140

 

-

 

1,220

Northern California

 

974

 

-

 

1

 

973

Chicago

 

772

 

-

 

1

 

771

Nashville

 

340

 

100

 

-

 

440

Other

 

104

 

-

 

7

 

97

Total Owned Homes

 

31,331

 

397

 

136

 

31,592

 

 

 

 

 

 

 

 

 

 

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

(1) Excludes REO properties associated with the NPL business.

(2) The Phoenix market includes Tucson homes which were included with Other Homes in the 2016 presentation.

15

 


Debt Summary

 

 

As of March 31, 2017

Dollars in millions

 

Amount outstanding

 

Interest rate (1)

 

Initial maturity

 

Extensions

 

Full maturity

Securitizations

 

 

 

 

 

 

 

 

 

CAH 2014-1

$489

 

1mL+171bps

 

May-17

 

Two, one-year

 

May-19

CAH 2014-2

$546

 

1mL+175bps

 

Jul-16

 

Three, one-year

 

Jul-19

SWAY 2014-1 (2)

$496

 

1mL+250bps

 

Jan-17

 

Three, one-year

 

Jan-20

CAH 2015-1 (2)

$636

 

1mL+197bps

 

Jul-17

 

Three, one-year

 

Jul-20

CSH 2016-1 (2)

$485

 

1mL+230bps

 

Jul-18

 

Three, one-year

 

Jul-21

CSH 2016-2 (2)

$580

 

1mL+194bps

 

Dec-18

 

Three, one-year

 

Dec-21

Total securitizations

$3,232

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured credit facilities

 

 

 

 

 

 

 

 

 

CAH credit facility

$0

 

3mL+300bps

 

Jul-17

 

None

 

Jul-17

SWAY credit facility (3)

$0

 

1mL+295bps

 

Jun-17

 

Eight months

 

Feb-18

Total secured credit facilities

$0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible debt

 

 

 

 

 

 

 

 

 

Convertible notes (due 2017)

$4

 

4.5%

 

Oct-17

 

None

 

Oct-17

Convertible notes (due 2019)

$230

 

3.0%

 

Jul-19

 

None

 

Jul-19

Convertible notes (due 2022)

$345

 

3.5%

 

Jan-22

 

None

 

Jan-22

Total convertible debt

$579

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total debt outstanding

$3,811

 

 

 

 

 

 

 

 

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

(1) Colony Starwood Homes has entered into three interest rate swap contracts including a February 2016 contract with a notional of $1.6B at 2.75%, a June 2016 contract with a notional of $450M at 3.32%, and a January 2017 agreement with a notional of $550M at 3.59%.  The stated interest rates on this page do not include the impact of the Colony Starwood interest rate swaps.

(2) Securitizations SWAY 2014-1, CAH 2015-1 and CSH 2016-2 are stated net of retained class G certificates in the amounts of $26.6M, $33.7M, and $30.6M respectively; CSH 2016-1 is net of retained class F and G certificates totaling $50.3M.

(3) Colony Starwood Homes amended the initial term of the SWAY credit facility from February 2017 to June 2017 without extending the full maturity date.

16

 


Capitalization Update

 

 

Inclusive of events subsequent to March 31, 2017

 

Total Capitalization$3,511$4,051CapitalizationDollars in millions$7,562Debt:46%Debt Terms SummaryBlended Int. RateInitialMaturityFully-Extended MaturityConvertible notes due ’17$4 4.50%Oct '17Oct ’17Convertible notes due ’19$230 3.00%Jul '19Jul ’19Convertible notes due ’22$345 3.50%Jan ‘22Jan ’22Fixed rate securitization debt(1)(4)$2,600 3.03%Aug'17Jun ’20Revolving credit facility$0 L + 2.00% (5)Apr ’20Apr ’21Floating rate securitization debt(2)(4)$332 L+ 1.97%Nov '17Jul '20Floating:9%Fixed:91%Equity market capitalization: (3)54%•In April, the Company terminated its two existing secured credit facilities in conjunction with the establishment of a new $675 million facility.•In each of April and May 2017, the Company paid down the principal balance on its SWAY 2014-1 securitization loan by $150 million ($300 million total).Subsequent Events Summary

 

Capitalization Update Inclusive of events subsequent to December 31, 2016 Capitalization Debt Terms Summary Dollars in millions $7,368 $3,845 $3,523 Debt: 52% Equity market capitalization: (3) 48% Blended Int. Rate Initial Maturity Fully-Extended Maturity Convertible notes due ’17 $5 4.50% Oct '17 Oct '17 Convertible notes due ’19 $230 3.00% Jul '19 Jul '19 Convertible notes due ’22 $345  3.50% Jan ‘22 Jan ‘22 Fixed rate securitization debt(1)(4) $2,600 3.03% Aug'17 Jun ’20 Secured credit facilities $24 L + 3.00% Jun ’17 Feb ’18 Floating rate securitization debt(2)(4) $641 L + 1.99% Nov '17 Jul '20 Subsequent Events Summary In January the Company sold $345 million of 3.50% convertible senior notes due 2022 A portion of the sale proceeds were used to repurchase outstanding 4.50% convertible senior notes, reducing the 2017 notes outstanding from $173 to $5 million due 2022 Additional proceeds were used to pay down secured credit facilities by approximately $84 million and pay off $19 million of debt related to discontinued operations Remaining proceeds will fund ongoing asset acquisitions or be utilized for general corporate purposes

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

(1) Effectively fixed via swap contract. Rate based on weighted average for swap contracts, including $1.6Bn contract with 2.75% average rate, $450MM with average rate of 3.32%, and $550MM with average rate of 3.59%.

(2) Based on weighted average for CSH’s securitizations; weighted by outstanding balances.

(3) Equity market capitalization based on May 5, 2017 closing price of $33.87 and 119.6 million shares and units outstanding.

(4) Securitizations SWAY 2014-1, CAH 2015-1 and CSH 2016-2 are stated net of retained class G certificates in the amounts of $26.6M, $33.7M, $30.6M respectively; CSH 2016-1 is net of retained class F and G certificates totaling $50.3M.

(5) Represents interest rate margin at time of credit facility closing.  Applicable margin varies based on leverage ratio as described in the credit agreement, ranging from L+1.75% to L+2.30%.

17

 


 

 

      IV. Same Store Information

 

 

 

18

 


Portfolio Overview – Same Home

 

 

As of March 31, 2017

 

Market:

 

Same Home

 

 

Occupancy %

 

Average Acquisition Cost per Home

 

Average

Investment

 

Average Home Size (sq. ft.)

 

Average Monthly Rent per Occupied Home

Atlanta

 

5,456

 

 

96.5%

 

$            128,009

 

$    146,567

 

2,004

 

$                 1,320

Tampa

 

3,565

 

 

95.6%

 

156,203

 

180,679

 

1,719

 

1,491

Miami

 

3,389

 

 

95.6%

 

207,994

 

226,377

 

1,729

 

1,833

Southern California

 

2,718

 

 

97.2%

 

273,646

 

309,870

 

1,715

 

2,082

Houston

 

2,619

 

 

96.3%

 

152,148

 

156,714

 

1,943

 

1,509

Dallas

 

1,901

 

 

95.4%

 

179,669

 

187,988

 

2,105

 

1,661

Orlando

 

1,841

 

 

97.1%

 

140,324

 

167,954

 

1,729

 

1,418

Denver

 

1,767

 

 

94.7%

 

200,691

 

220,959

 

1,729

 

1,774

Las Vegas

 

1,708

 

 

96.8%

 

187,644

 

204,526

 

2,032

 

1,432

Phoenix

 

1,416

 

 

96.3%

 

138,314

 

154,623

 

1,715

 

1,201

Northern California

 

771

 

 

97.0%

 

229,611

 

253,443

 

1,434

 

1,834

Charlotte-Raleigh

 

712

 

 

94.9%

 

186,391

 

210,588

 

2,359

 

1,662

Chicago

 

679

 

 

95.2%

 

159,031

 

161,869

 

1,567

 

1,733

Nashville

 

109

 

 

95.7%

 

285,068

 

306,392

 

2,806

 

2,192

Other

 

81

 

 

91.4%

 

143,811

 

168,255

 

1,515

 

1,400

Total

 

28,732

 

 

96.1%

 

$          175,124

 

$  194,514

 

1,848

 

$                1,584

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

 

 

19

 


Same Home Year-Over-Year Results

 

 

Dollars in thousands

 

Three Months Ended March 31, (1)

 

 

2017

 

 

2016 (2)

 

 

% of Change

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

Rental income

$

130,926

 

 

$

123,949

 

 

 

5.6

%

Fee income

 

3,437

 

 

 

2,528

 

 

 

36.0

%

Resident utility reimbursements

 

1,375

 

 

 

604

 

 

 

127.6

%

Resident chargebacks

 

1,673

 

 

 

1,440

 

 

 

16.2

%

Total revenues

$

137,411

 

 

$

128,521

 

 

 

6.9

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Repairs & maintenance and turn costs

$

10,946

 

 

$

11,223

 

 

 

-2.5

%

Utilities (3)(4)

 

2,637

 

 

 

1,481

 

 

 

78.1

%

Real estate taxes

 

21,999

 

 

 

21,153

 

 

 

4.0

%

Insurance and HOA costs

 

4,075

 

 

 

4,222

 

 

 

-3.5

%

Property management costs

 

7,752

 

 

 

6,826

 

 

 

13.6

%

Bad debt

 

1,862

 

 

 

1,021

 

 

 

82.4

%

Other expenses

 

1,420

 

 

 

1,173

 

 

 

21.1

%

Total operating expenses

$

50,691

 

 

$

47,099

 

 

 

7.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Net Operating Income

$

86,720

 

 

$

81,422

 

 

 

6.5

%

Net Operating Income margin

 

63.1

%

 

 

63.4

%

 

 

 

 

Core Net Operating Income margin

 

65.4

%

 

 

64.9

%

 

 

 

 

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

(1) Colony Starwood Homes’ Same Home property count is 28,732 as of March 31, 2017.

(2) Certain revenues and expenses have been recast to be consistent with 2017 presentation.

(3) Utility expense increase is largely a result of the transition to a third-party billing platform which maintains water, sewer, and trash services in the Company's name, during tenancy, with offsetting resident reimbursements/revenue.

(4) Includes $0.8 million year-over-year increase of resident occupied utility expenses paid for by the Company and subsequently billed back to the resident and approximately a $0.3 million  year-over-year increase for third-party service fees.

20

 


Same Home Core Year-Over-Year Results

 

 

Dollars in thousands

 

Three Months Ended March 31, (1)

 

2017

 

2016 (2)

 

% of Change

Core Revenues

 

 

 

 

 

Rental Income

$           130,926

 

$      123,949

 

5.6%

Fee Income

3,437

 

2,528

 

36.0%

(-) Bad debt

(1,862)

 

(1,021)

 

82.4%

Total Core Revenues

$           132,501

 

$      125,456

 

5.6%

 

 

 

 

 

 

Core Expenses

 

 

 

 

 

Total Operating Costs

$             50,691

 

$         47,099

 

7.6%

(-) Resident utility reimbursements

(1,375)

 

(604)

 

127.6%

(-) Resident chargebacks

(1,673)

 

(1,440)

 

16.2%

(-) Bad debt

(1,862)

 

(1,021)

 

82.4%

Total Core Expenses

$             45,781

 

$         44,034

 

4.0%

 

 

 

 

 

 

Same Home Core Net Operating Income

$            86,720

 

$       81,422

 

6.5%

Core Net Operating Income margin

65.4%

 

64.9%

 

 

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

(1) Colony Starwood Homes’ Same Home property count is 28,732 as of March 31, 2017.

      (2) Certain revenues and expenses have been recast to be consistent with 2017 presentation.

21

 


Same Home Quarterly Trending Results

 

 

Dollars in thousands

 

 

 

1Q16 (1)

 

 

2Q16 (1)

 

 

3Q16 (1)

 

 

4Q16 (1)

 

 

1Q17

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

123,949

 

 

$

126,492

 

 

$

127,738

 

 

$

129,076

 

 

$

130,926

 

Fee income

 

 

2,528

 

 

 

3,483

 

 

 

3,598

 

 

 

3,365

 

 

 

3,437

 

Resident utility reimbursements

 

 

604

 

 

 

544

 

 

 

944

 

 

 

936

 

 

 

1,375

 

Resident chargebacks

 

 

1,440

 

 

 

1,940

 

 

 

2,171

 

 

 

1,193

 

 

 

1,673

 

Total rental and other property revenue

 

$

128,521

 

 

$

132,459

 

 

$

134,451

 

 

$

134,570

 

 

$

137,411

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repairs & maintenance and turn costs

 

$

11,223

 

 

$

14,636

 

 

$

15,776

 

 

$

11,337

 

 

$

10,946

 

Utilities (2)(3)

 

 

1,481

 

 

 

1,481

 

 

 

2,274

 

 

 

2,336

 

 

 

2,637

 

Real estate taxes

 

 

21,153

 

 

 

21,511

 

 

 

21,584

 

 

 

20,333

 

 

 

21,999

 

Insurance and HOA costs

 

 

4,222

 

 

 

4,284

 

 

 

4,570

 

 

 

4,306

 

 

 

4,075

 

Property management costs

 

 

6,826

 

 

 

7,248

 

 

 

7,035

 

 

 

6,978

 

 

 

7,752

 

Bad debt

 

 

1,021

 

 

 

1,765

 

 

 

2,215

 

 

 

2,283

 

 

 

1,862

 

Other operating expenses

 

 

1,173

 

 

 

2,053

 

 

 

1,421

 

 

 

1,380

 

 

 

1,420

 

Total Core Expenses

 

$

47,099

 

 

$

52,978

 

 

$

54,875

 

 

$

48,953

 

 

$

50,691

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Operating Income

 

$

81,422

 

 

$

79,481

 

 

$

79,576

 

 

$

85,617

 

 

$

86,720

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same Home Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home count

 

 

28,732

 

 

 

28,732

 

 

 

28,732

 

 

 

28,732

 

 

 

28,732

 

NOI margin

 

 

63.4

%

 

 

60.0

%

 

 

59.2

%

 

 

63.6

%

 

 

63.1

%

Core NOI margin

 

 

64.9

%

 

 

62.0

%

 

 

61.6

%

 

 

65.8

%

 

 

65.4

%

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

(1) Certain revenues and expenses have been recast to be consistent with 2017 presentation.

(2) Utility expense increase is largely a result of the transition to a third-party billing platform which maintains water, sewer, and trash services in the Company's name, during tenancy, with offsetting resident reimbursements/revenue.

(3) Includes $0.8 million year-over-year increase of resident occupied utility expenses paid for by the Company and subsequently billed back to the resident and approximately a $0.3 million year-over-year increase of third-party service fees.

22

 

 


Same Home Core Quarterly Trending Results

 

 

Dollars in thousands

 

 

1Q16 (1)

 

2Q16 (1)

 

3Q16 (1)

 

4Q16 (1)

 

1Q17

Core Revenues

 

 

 

 

 

 

 

 

 

 

Rental income

 

$      123,949

 

$   126,492

 

$   127,738

 

$   129,076

 

$     130,926

Fee income

 

2,528

 

3,483

 

3,598

 

3,365

 

3,437

(-) Bad debt

 

(1,021)

 

(1,765)

 

(2,215)

 

(2,283)

 

(1,862)

Total Core Revenues

 

$      125,456

 

$   128,210

 

$   129,121

 

$   130,158

 

$     132,501

 

 

 

 

 

 

 

 

 

 

 

Core Expenses

 

 

 

 

 

 

 

 

 

 

Total Operating Costs

 

$         47,099

 

$     52,978

 

$     54,875

 

$     48,953

 

$       50,691

(-) Resident utility reimbursements

 

(604)

 

(544)

 

(944)

 

(936)

 

(1,375)

(-) Resident chargebacks

 

(1,440)

 

(1,940)

 

(2,171)

 

(1,193)

 

(1,673)

(-) Bad debt

 

(1,021)

 

(1,765)

 

(2,215)

 

(2,283)

 

(1,862)

Total Core Expenses

 

$         44,034

 

$     48,729

 

$     49,545

 

$     44,541

 

$       45,781

 

 

 

 

 

 

 

 

 

 

 

Same Home Core Net Operating Income

 

$       81,422

 

$   79,481

 

$   79,576

 

$   85,617

 

$     86,720

 

 

 

 

 

 

 

 

 

 

 

Core Net Operating Income margin

 

64.9%

 

62.0%

 

61.6%

 

65.8%

 

65.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

(1) Certain revenues and expenses have been recast to be consistent with 2017 presentation.

 

23

 

 


Results by Market – Same Home

 

 

Three months ended March 31, 2017

Dollars in thousands

Market:

 

Same Home

 

% of Total Same Home

 

Revenues

 

Expenses

 

Net Operating Income

 

% of Net Operating Income

 

Net Operating Margin

 

Core Operating Margin

 

Atlanta

 

5,456

 

19.0%

 

$       21,760

 

$         7,462

 

$       14,298

 

16.5%

 

65.7%

 

68.3%

 

Tampa

 

3,565

 

12.4%

 

16,046

 

6,503

 

9,543

 

11.0%

 

59.5%

 

61.6%

 

Miami

 

3,389

 

11.8%

 

18,763

 

7,826

 

10,937

 

12.6%

 

58.3%

 

60.7%

 

Southern California

 

2,718

 

9.5%

 

17,077

 

5,709

 

11,368

 

13.1%

 

66.6%

 

68.8%

 

Houston

 

2,619

 

9.1%

 

11,860

 

5,564

 

6,296

 

7.3%

 

53.1%

 

54.7%

 

Dallas

 

1,901

 

6.6%

 

9,326

 

3,735

 

5,591

 

6.4%

 

60.0%

 

61.3%

 

Orlando

 

1,841

 

6.4%

 

7,824

 

3,130

 

4,694

 

5.4%

 

60.0%

 

62.3%

 

Denver

 

1,767

 

6.1%

 

9,533

 

2,420

 

7,113

 

8.2%

 

74.6%

 

78.3%

 

Las Vegas

 

1,708

 

5.9%

 

7,649

 

2,296

 

5,353

 

6.2%

 

70.0%

 

72.6%

 

Phoenix

 

1,416

 

4.9%

 

5,161

 

1,541

 

3,620

 

4.2%

 

70.1%

 

72.0%

 

Northern California

 

771

 

2.7%

 

4,352

 

1,421

 

2,931

 

3.4%

 

67.4%

 

70.3%

 

Charlotte-Raleigh

 

712

 

2.5%

 

3,484

 

1,076

 

2,408

 

2.8%

 

69.1%

 

70.3%

 

Chicago

 

679

 

2.4%

 

3,523

 

1,755

 

1,768

 

2.0%

 

50.2%

 

54.3%

 

Nashville

 

109

 

0.4%

 

710

 

151

 

559

 

0.6%

 

78.7%

 

80.0%

 

Other

 

81

 

0.3%

 

343

 

102

 

241

 

0.3%

 

70.3%

 

74.3%

 

Total

 

28,732

 

100%

 

137,411

 

50,691

 

86,720

 

100%

 

63.1%

 

65.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

 

24

 

 


Lease Outcomes – Same Home

 

 

 

Quarter-to-Date as of March 31, 2017

 

 

 

Expiration Outcome

 

Turnover (4)

Market:

 

Expiration Count (1)

 

Renewed (2)

 

Retained (3)

 

Renewal

Rate

 

Retention

Rate

 

QTD Turnover Rate (5)

 

YTD Turnover Rate

 

YTD Annualized Turnover Rate (6)

Atlanta

 

       915

 

         602

 

         653

 

65.8%

 

71.4%

 

8.4%

 

8.4%

 

33.8%

Tampa

 

       725

 

         480

 

         523

 

66.2%

 

72.1%

 

8.6%

 

8.6%

 

34.6%

Miami

 

       683

 

         518

 

         547

 

75.8%

 

80.1%

 

7.6%

 

7.6%

 

30.2%

Southern California

 

       560

 

         399

 

         459

 

71.3%

 

82.0%

 

6.2%

 

6.2%

 

24.9%

Houston

 

       419

 

         275

 

         302

 

65.6%

 

72.1%

 

7.3%

 

7.3%

 

29.2%

Dallas

 

       348

 

         214

 

         249

 

61.5%

 

71.6%

 

8.5%

 

8.5%

 

34.1%

Denver

 

       360

 

         217

 

         252

 

60.3%

 

70.0%

 

8.9%

 

8.9%

 

35.8%

Orlando

 

       435

 

         299

 

         315

 

68.7%

 

72.4%

 

8.5%

 

8.5%

 

33.9%

Las Vegas

 

       336

 

         234

 

         256

 

69.6%

 

76.2%

 

7.4%

 

7.4%

 

29.7%

Phoenix

 

       320

 

         200

 

         227

 

62.5%

 

70.9%

 

8.2%

 

7.8%

 

32.8%

Charlotte-Raleigh

 

       129

 

           75

 

           89

 

58.1%

 

69.0%

 

9.6%

 

9.6%

 

38.2%

Northern California

 

       136

 

         107

 

         115

 

78.7%

 

84.6%

 

5.1%

 

5.1%

 

20.2%

Chicago

 

       125

 

           82

 

           93

 

65.6%

 

74.4%

 

7.8%

 

7.8%

 

31.2%

Nashville

 

          19

 

           11

 

           11

 

57.9%

 

57.9%

 

7.3%

 

7.3%

 

29.4%

Other Markets

 

          27

 

           12

 

           24

 

44.4%

 

88.9%

 

2.5%

 

2.5%

 

9.9%

Total

 

    5,537

 

      3,725

 

      4,115

 

67.3%

 

74.3%

 

7.9%

 

7.9%

 

31.7%

 

 

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

(1) Represents the number of leases that expired within the quarter, less early terminations.

(2) Includes lease expirations where the lease was renewed (excludes month-to-month leases).

(3) Includes lease expirations where the resident did not "move out".

(4) Population limited to homes that realized resident turnover within the subject period, including out of period lease expirations where the lease was terminated early and month-to-month leases.

(5) The number of homes that become vacant during the subject period as a percentage of homes with an initial move-in ready status.

(6) The number of homes that become vacant during the subject period as an annualized percentage of homes with an initial move-in ready status.

25

 

 


Rent Growth – Same Home

 

 

Quarter-to-Date as of March 31, 2017

 

 

 

Renewals

 

Replacement Rent

 

 

 

 

Escalations on

Multi-Year Leases

 

Total Rent Growth

Market:

 

Total Leases

 

Renewal Rent Growth

 

Total Leases

 

Replacement Rent Growth

 

Blended Rent Growth

 

 

Total Leases

 

Average Rent

Change (1)

 

Total Leases

 

Average Rent Change (2)

Atlanta

 

716

 

5.1%

 

447

 

3.9%

 

4.6%

 

 

42

 

3.0%

 

1,205

 

4.6%

Tampa

 

525

 

3.0%

 

333

 

1.7%

 

2.5%

 

 

18

 

3.0%

 

876

 

2.5%

Miami

 

607

 

3.5%

 

227

 

2.4%

 

3.2%

 

 

50

 

3.0%

 

884

 

3.2%

Southern California

 

431

 

5.5%

 

180

 

6.6%

 

5.8%

 

 

11

 

3.0%

 

622

 

5.8%

Houston

 

332

 

4.0%

 

229

 

-4.4%

 

0.5%

 

 

20

 

3.0%

 

581

 

0.7%

Dallas

 

229

 

5.2%

 

158

 

1.2%

 

3.5%

 

 

20

 

3.0%

 

407

 

3.5%

Denver

 

216

 

7.1%

 

160

 

3.8%

 

5.7%

 

 

9

 

3.0%

 

385

 

5.6%

Orlando

 

302

 

4.2%

 

188

 

3.0%

 

3.7%

 

 

10

 

3.0%

 

500

 

3.7%

Las Vegas

 

254

 

4.8%

 

140

 

4.2%

 

4.6%

 

 

1

 

3.0%

 

395

 

4.6%

Phoenix

 

220

 

7.1%

 

112

 

9.7%

 

7.9%

 

 

10

 

3.0%

 

342

 

7.8%

Charlotte-Raleigh

 

79

 

3.9%

 

58

 

1.2%

 

2.7%

 

 

-

 

-

 

137

 

2.7%

Northern California

 

119

 

8.4%

 

31

 

13.3%

 

9.4%

 

 

4

 

3.0%

 

154

 

9.2%

Chicago

 

66

 

4.2%

 

51

 

1.3%

 

2.9%

 

 

6

 

3.0%

 

123

 

2.9%

Nashville

 

9

 

4.4%

 

6

 

-5.4%

 

0.0%

 

 

-

 

-

 

15

 

0.5%

Other Markets

 

9

 

4.0%

 

-

 

-

 

4.0%

 

 

-

 

-

 

9

 

4.0%

Total

 

4,114

 

4.7%

 

2,320

 

2.8%

 

4.0%

 

 

201

 

3.0%

 

6,635

 

4.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

(1) Represents average rent growth on the population of escalating multi-year leases taking effect for the three months ended March 31, 2017, defined as average of the percentage change in rental rate for all multi-year leases in the period.

(2) Represents weighted average rent growth on all replacement, renewal and escalating multi-year leases for the three months ended March 31, 2017.

26

 


Same Home Quarterly Trending Operational Results

 

 

 

 

 

 

 

1Q16

 

 

2Q16

 

 

3Q16

 

 

4Q16

 

 

1Q17

 

Occupancy

 

95.5

%

 

 

95.6

%

 

 

95.5

%

 

 

95.7

%

 

 

96.1

%

Turnover Rate

 

7.2

%

 

 

9.7

%

 

 

10.2

%

 

 

7.4

%

 

 

7.9

%

Year-to-Date Annualized Turnover Rate

 

29.0

%

 

 

33.9

%

 

 

36.2

%

 

 

34.6

%

 

 

31.7

%

Renewal Rate

 

54.7

%

 

 

59.6

%

 

 

62.0

%

 

 

64.9

%

 

 

67.3

%

Retention Rate

 

71.5

%

 

 

69.7

%

 

 

69.1

%

 

 

72.6

%

 

 

74.3

%

Renewal Rent Growth

 

4.8

%

 

 

5.1

%

 

 

5.4

%

 

 

4.8

%

 

 

4.7

%

Replacement Rent Growth

 

2.2

%

 

 

5.5

%

 

 

4.6

%

 

 

1.7

%

 

 

2.8

%

Blended Rent Growth

 

3.7

%

 

 

5.3

%

 

 

5.0

%

 

 

3.5

%

 

 

4.0

%

 

 

 

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

 

 

27

 


Cost to Maintain a Home

 

 

Dollars in thousands, except per home amounts

 

 

Three Months Ended March 31,

 

 

2017

 

 

Total Cost

 

Cost per Home

R&M and turnover expenses (1)

 

 

 

 

Repairs and maintenance

 

$        4,631

 

$           161

Turnover-related costs

 

2,925

 

102

Landscaping and pool services

 

205

 

7

Total R&M and turnover expenses

 

$      7,761

 

$          270

 

 

 

 

 

Recurring capital expenditures (2)(3)

 

 

 

 

Capital replacements

 

$        6,485

 

$           226

Turnover-related capital costs

 

3,185

 

111

Total recurring capital expenditures

 

$      9,670

 

$          337

 

 

 

 

 

Total R&M and recurring capital expenditures

 

$    17,431

 

$          607

 

 

 

 

 

Revenue enhancing capital expenditures (4)

 

 

 

 

Total Revenue Enhancing Capital Expenditures

 

$           630

 

$             22

 

 

 

 

 

Same Home Count

 

 

 

28,732

 

 

 

Please see the Appendix for certain definitions, explanations and reconciliations of non-GAAP financial measures. All information is as of March 31, 2017 unless otherwise indicated.

 

(1) Amounts shown are net of gross tenant chargebacks. Some tenant chargebacks may present collection risk if tenant security deposits are insufficient.

(2) Excludes initial renovation and redevelopment expenditures.

(3) Replacements and expenditures necessary to preserve and maintain the value and functionality of the home and its systems.

(4) Includes capital improvements and additions intended to increase the revenue potential for a given property, which we track separately from recurring capital expenditures.

28

 


 

      V. Earnings Guidance

 

 

 

29

 


2017 Guidance

 

 

 

 

 

 

Full-Year Guidance (1) (2)

Core FFO/Share

$1.85 - $1.95

Same Home Revenue Growth (3)

4 – 5%

Same Home Expense Growth (3)

2 – 3%

Same Home Core NOI Margin

63 – 65%

Same Home Occupancy

95 – 96%

Same Home Turnover

34 – 36%

 

The Company does not provide forward-looking guidance for certain financial measures on a GAAP basis because it is unable to reasonably predict certain items contained in the GAAP measures, including one-time and infrequent items that are not indicative of the Company’s ongoing operations. Such items include, but are not limited to, discontinued operations, share-based compensation and other items not reflective of the Company's ongoing operations.

 

 

(1) Please refer to the Forward Looking Statement disclosure.

(2) This outlook is based on a number of assumptions, many of which are outside of the Colony Starwood Homes’ control, and all of which are subject to change. This outlook reflects Colony Starwood Homes’ expectations on (a) existing investments and (b) yield on incremental investments inclusive of Colony Starwood Homes’ existing pipeline. All guidance is based on current expectations of future economic conditions and the judgment of the Colony Starwood Homes’ management team.

(3) Growth rates presented exclude the impact of resident utility billing revenue and associated utility chargeback expenses as a result of the CSH utility chargeback transition beginning in Q3 2016, whereby water, sewer and trash services are held in the Company’s name during resident occupancy and subsequently billed back to the resident.

30

 


 

 

      Appendix

 

 

31

 


Appendix A: Definitions

 

 

Annualized Turnover Rate. Calculated by dividing a) the number of homes that become unoccupied during a period of time by b) the number of homes that had completed initial renovation/rehabilitation and were leasable during the specified period, expressed as an annualized percentage by multiplying the period of measurement to reach a 12-month period (e.g., multiplying a three-month turnover measurement by four). Management believes this operational measure is useful in understanding resident satisfaction, pricing effectiveness and assessing associated property repairs and maintenance expenses.

Asset Management Fee. Represents contractual revenue earned related to the property management of the Fannie Mae JV and Waypoint Real Estate Group properties.

Average Acquisition Cost per Home. Calculated by dividing a) the total acquisition cost for each home in an identified population (such acquisition costs including purchase price and closing costs, but excluding renovation/rehabilitation costs incurred prior to leasing) by b) the number of homes in the respective population. Total acquisition cost for assets owned by SWAY prior to the Merger includes the purchase accounting fair market value step-up applied to those assets as of the close of Merger on January 5, 2016.

Average Investment. Calculated by dividing the sum of a) the total acquisition cost for each home in an identified population b) all property related capitalized expenditures incurred in the renovation/rehabilitation of a property prior to leasing by c) the number of homes in the respective population. Total acquisition cost for assets owned by SWAY prior to the Merger includes the purchase accounting fair market value step-up applied to those assets as of the close of Merger on January 5, 2016.

Average Monthly Rent per Occupied Home. Calculated by dividing a) the aggregate monthly contractual cash rent (excluding rent concessions and incentives) for an identified population of occupied rental units by b) the number of rental units in the identified population. To date, rent concessions and incentives have been utilized on a limited basis and have not had a significant impact on the CSH portfolio’s average monthly rent.

Blended Rent Growth. Represents the weighted average rent growth on all new leases (replacement leases) and renewals during a measured period, and is calculated by dividing a) the aggregate contractual first month rent on all new leases and lease renewals executed during the applicable period for an identified population of occupied rental units by b) the aggregate contractual last month rent for such identified population of rental units before renewal or new lease. This calculation does not include lease escalations / step-ups for multi-year leases.

Core AFFO. Core AFFO, or core adjusted funds from operations, is a non-GAAP financial measure that we believe assists investors in assessing the results of CSH’s single-family rental business as it allows investors to compare our operating performance to prior reporting periods without the effect of certain items that, by nature, are not comparable from period to period. Core AFFO adjusts Core FFO (defined below) to eliminate the impact of Recurring Capital Expenditures and capitalized leasing costs incurred during the period. Core AFFO and Core AFFO per share are not a substitute for net income (loss) per share or net cash flow provided by operating activities, as determined in accordance with GAAP, as a measure of our operating performance, liquidity or ability to pay dividends as they exclude certain items that require cash settlements in the periods presented. These metrics also are not necessarily indicative of cash available to fund future cash needs. Because other REITs may not compute these measures in the same manner, they may not be comparable among REITs.

 

 

 

32

 


Appendix A: Definitions

 

 

Core FFO. Core FFO is a non-GAAP financial measure of operating performance that we believe assists investors in assessing the results of CSH’s single-family rental business, which is our core operating business as it allows investors to compare our operating performance to prior reporting periods without the effect of certain items that, by nature, are not comparable from period to period. Core FFO adjusts NAREIT FFO (defined below) to eliminate the impact of certain items that CSH believes are not indicative of our core operating performance. Our Core FFO begins with NAREIT FFO and is adjusted for amortization of deferred financing costs, debt premium discounts, share-based compensation, loss on derivative financial instruments, amortization of derivative financial instruments, non-cash interest expense and loss on extinguishment of debt.  Core FFO and Core FFO per share does not represent cash generated from operating activities determined in accordance with GAAP, and is not necessarily indicative of cash available to fund cash needs and should not be considered as an alternative to net income (determined in accordance with GAAP) as a performance measure.  Because other REITs may not compute these measures in the same manner, they may not be comparable among REITs.

Core Net Operating Income or Core NOI. CSH calculates Core NOI by subtracting Core Property Operating Expenses from Core Rental Revenue, as defined, which eliminates (a) revenues and expenses that CSH believes are not directly related to the operating performance of the homes themselves and (b) GAAP presentations of resident chargeback fees and bad debt expense to provide a clearer presentation of rental and fee income streams as well as associated expenses. Please refer to the definition of NOI below for an explanation of how that measure is calculated separate from Core NOI. Core NOI is a non-GAAP measure of operating performance that CSH believes assists investors in assessing the performance of our portfolio of single-family homes, which is our core operating business. Please see Appendix B for a reconciliation of net income (loss) to Core NOI.

The Core NOI measures included in this presentation should not be considered alternatives to net loss or net cash flows from operating activities, as determined in accordance with GAAP, as indications of CSH’s performance or as measures of liquidity. Although CSH uses these non-GAAP measures for comparability in assessing their performance against other REITs, not all REITs compute the same non-GAAP measures. Accordingly, there can be no assurance that our basis for computing these non-GAAP measures are comparable with that of other REITs.

Core Property Operating Expenses. Calculated by adjusting operating costs for the properties in the relevant sample by eliminating the impact of resident chargebacks/resident utility reimbursements and bad debt expense.

Core Rental Revenue. Calculated by rental and fee income for the properties in the relevant sample adjusted to eliminate the impact of bad debt expense.

Development Homes.  Homes that a) are awaiting initial rehabilitation, b) are currently undergoing initial rehabilitation, or c) have completed initial rehabilitation but have not yet experienced initial occupancy.

Integration Costs.  Costs and charges incurred during the integration of the Starwood Waypoint Residential Trust and Colony American Homes operations during the fiscal year 2016 that are not reflective of our core operating performance and that we do not expect to incur subsequent to the completion of the Merger integration, but which do not qualify for Merger and transaction-related expenses under GAAP.  The majority of Integration Costs consist of base salaries, benefits, and payroll taxes of employees separated or scheduled for separation as a result of the Merger.

Merger and Transaction-Related Expenses.  Direct costs incurred as a result of the Merger closing or costs required to ensure the Merger was completed successfully.  These costs include legal fees, advisory services (accounting, tax, and entity filings), success fees, employee retention plans and severance costs, and property tax / transfer costs.  

 

 

 

33

 


Appendix A: Definitions

 

 

NAREIT FFO.  Funds from operations is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as net income or loss (in accordance with GAAP) excluding gains or losses from sale of previously depreciated real estate assets, plus depreciation and amortization of real estate assets, impairment of real estate assets, discontinued operations and adjustments for unconsolidated partnerships and joint ventures.  Consistent with real estate industry and investment community preferences, we use NAREIT FFO as a supplemental measure of operating performance for a REIT. We consider NAREIT FFO useful to investors as a complement to GAAP measures because it facilitates an understanding of the operating performance of the Company’s properties. NAREIT FFO does not give effect to real estate depreciation and amortization since these amounts are computed to allocate the cost of a property over its useful life. Since values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, the Company believes that NAREIT FFO provides investors with a clearer view of the Company’s operating performance.

Net Operating Income or NOI. CSH defines NOI as rental and other property revenues less property operating expenses. CSH has presented NOI for Same Home Homes as CSH believes this NOI measure to be an appropriate supplemental measure of operating performance to net income attributable to common shareholders because it reflects the operating performance of our homes without allocation of corporate level overhead or general and administrative costs and reflects the operations of our business. Refer to the table below for a reconciliation of net loss attributable to common shareholders to NOI. Please refer to the definition of Core NOI above for an explanation of how that measure is calculated separate from NOI, and see Appendix B for a reconciliation of net income (loss) to NOI.

These NOI measures included in this presentation should not be considered alternatives to net loss or net cash flows from operating activities, as determined in accordance with GAAP, as indications of CSH’s performance or as measures of liquidity. Although CSH uses these non-GAAP measures for comparability in assessing their performance against other REITs, not all REITs compute the same non-GAAP measures. Accordingly, there can be no assurance that CSH’s basis for computing these non-GAAP measures is comparable with that of other REITs.

Non-Owned, Managed Homes. Colony Starwood Homes currently provides its property and asset management services to third parties and/or joint venture partners as a fee service.  The non-owned properties are all managed within the same platform from which Colony Starwood Homes services its Owned Homes.

Occupancy %. Represents the percentage of an identified rental unit population that is occupied as of the measurement period and is calculated by dividing a) the number of occupied units as of the last day of the measurement period by b) the number of rental units in the identified population of rental units (Same Home, Owned Homes, etc.).

Other Homes. Includes 274 Owned Homes as of March 31, 2017 that were not intended to be held for the long-term and not in service and 318 non-stabilized homes.  The 592 Other Homes excludes the 204 REO homes held as of March 31, 2017.

Owned Homes. Represents wholly-owned single-family rental properties, and is measured by the number of total rental units. This takes into account investments in multi-unit properties which Management believes provides a more meaningful measure to investors.  Owned Homes excludes the 204 REO homes held as of March 31, 2017.

 

 

 

34

 


Appendix A: Definitions

 

 

Recurring Capital Expenditures or Recurring Capex. General replacements and expenditures required to preserve and maintain the value and functionality of a home and its systems as a single-family rental.

Renewal Rate. Calculated by dividing a) the number of renewed residents with current period lease expirations by b) the total lease expirations during the period.

Renewal Rent Growth. Represents the percentage change in monthly contractual rent resulting from all lease renewals that became effective during a measurement period for an identified population of rental units, and is calculated by dividing a) the aggregate contractual first month rent (excluding rent concessions and incentives) on lease renewals executed during the applicable measurement period for an identified population of rental units by b) the aggregate contractual last month rent for such identified population of rental units before renewal. To date, rent concessions and incentives have been used on a limited basis and have not had a significant impact on contractual rent.

Replacement Rent Growth. Represents the percentage change in monthly contractual rent resulting from new leases on properties previously leased to different residents during a measurement period for an identified population of rental units and is calculated by dividing a) the aggregate contractual first month rent (excluding rent concessions and incentives) on new leases signed during the applicable measurement period for an identified population of occupied rental units by b) the aggregate contractual last month rent for such identified population of rental units under the prior lease on such properties. To date, rent concessions and incentives have been used on a limited basis and have not had a significant impact on contractual rent.

Retention Rate. Calculated by dividing a) the number of retained residents with current period lease expirations by b) the total lease expirations during the period.

Revenue Enhancing Capital Expenditures or Revenue Enhancing Capex. Capital improvements and additions intended to increase the revenue potential for a given property.

Same Homes. Homes which have been stabilized for at least fifteen (15) months prior to the start of the current measurement period, excluding any homes that have been disposed of, removed from service or returned to the development period for significant renovation.

Stabilized Homes. Homes that are currently occupied or have been previously leased and occupied that do not meet the criteria to be a Same Store Home. For the three months ended March 31, 2017 the Stabilized Home count excludes 274 homes not intended to be held for the long term.

Total Homes. Represents all homes Colony Starwood Homes manages.  Includes both Owned Homes and Non-Owned, Managed Homes.  

Total Rent Growth. Represents the weighted average rent growth on replacement rents, renewals, and escalating multi-year leases for the period.

Weighted Average Home Age (years). Rounded number of years between when a home was built and the last day of the current measurement period with each market being weighted by its area asset count.

 

 

 

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Appendix B: Reconciliations

 

 

Net Operating Income or NOI:

(Dollars in thousands)

 

 

 

 

 

 

 

Three months ended March 31, 2017

 

Reconciliation of net loss to NOI

 

Same Store Homes

 

Stabilized Homes (2)

 

 

 

 

 

 

 

Net loss attributable to Starwood Waypoint Residential Trust shareholders

 

$                        (11,342)

 

$                   (11,342)

 

 

 

 

 

 

 

Add (deduct) adjustments to get to total NOI

 

 

 

 

 

Gain (Loss) from discontinued operations (NPL/REO)

 

46

 

46

 

General and administrative

 

10,840

 

10,840

 

Share-based compensation

 

1,561

 

1,561

 

Interest expense

 

38,999

 

38,999

 

Depreciation and amortization

 

46,185

 

46,185

 

Impairment of real estate

 

443

 

443

 

Realized (gain) loss on sales of investments in real estate, net

 

(678)

 

(678)

 

Equity in income from unconsolidated joint ventures

 

(180)

 

(180)

 

Other (expense) income, net

 

8,792

 

8,792

 

Income tax expense

 

157

 

157

 

Net income attributable to non-controlling interests

 

(678)

 

(678)

 

Total NOI

 

$                        94,145

 

$                   94,145

 

Add (deduct) adjustments to get to total portfolio NOI

 

 

 

 

 

Non-portfolio NOI components:

 

 

 

 

 

Property operating revenues on non-portfolio homes (1)

 

(13,629)

 

(3,283)

 

Property operating expenses on non-portfolio homes (1)

 

6,204

 

2,656

 

Total Non-portfolio NOI

 

$                         (7,425)

 

$                        (627)

 

 

 

 

 

 

 

Total NOI

 

$                        86,720

 

$                   93,518

 

 

 

 

 

 

 

Calculation portfolio Core NOI margin:

 

 

 

 

 

Rental income

 

$                        130,926

 

$                   140,686

 

Fee income

 

3,437

 

3,795

 

Less bad debt expense

 

(1,862)

 

(1,972)

 

Total rental revenues

 

$                        132,501

 

$                   142,509

 

Core NOI margin

 

65.4%

 

65.6%

 

 

 

 

 

 

 

(1) See NOI Segment page

 

 

 

 

 

(2) Stabilized is the summation of Same Store Homes plus Stabilized Homes as defined in Appendix A.

 

 

 

 

 

 

36

 


Appendix B: Reconciliations

 

 

EBITDA:

in (000)s

Three Months Ended March 31,

 

 

 

2017

 

 

2016

 

 

Net income/(loss) from continuing operations

$

(11,974

)

 

$

(36,548

)

 

(+) Interest expense

 

38,999

 

 

 

37,457

 

 

(+) Depreciation and amortization

 

46,185

 

 

 

43,630

 

 

(+) Income tax expense

 

157

 

 

 

245

 

 

  EBITDA

$

73,367

 

 

$

44,784

 

 

(+) Non cash compensation

 

1,561

 

 

 

387

 

 

(-) Gain on sale of real estate

 

(678

)

 

 

(1,384

)

 

(+) Impairment of real estate assets

 

443

 

 

 

30

 

 

(+) Integration costs

 

-

 

 

 

5,630

 

 

(+) Merger and transaction-related

 

-

 

 

 

23,482

 

 

(+) Loss on extinguishment of debt

 

7,153

 

 

 

-

 

 

  Adjusted EBITDA

$

81,846

 

 

$

72,929

 

 

 

Other Assets:

in (000)s

 

 

 

Description

March 31, 2017

 

Hedge contract

$

30,298

 

Prepaids

 

17,611

 

Accounts receivable, net of allowance

 

7,638

 

Deferred leasing costs and lease intangibles, net

 

4,274

 

Furniture, fixture, and equipment

 

3,368

 

Deferred finance costs, net

 

3,308

 

Deposits

 

1,641

 

Other

 

3,166

 

Total

$

71,304

 

 

 

 

 

 

 

 

 

37

 


Appendix B: Reconciliations

 

 

Weighted-Average Shares:

 

Three Months Ended

 

Description

March 31, 2017

 

Weighted-average shares - basic

 

104,593,904

 

Incremental shares from RSUs

 

155,214

 

OP units

 

6,272,829

 

Total

 

111,021,947

 

 

 

 

 

 

38