NEXPOINT RESIDENTIAL TRUST, INC. REPORTS FOURTH QUARTER AND FULL YEAR 2021 RESULTS
NexPoint Residential Trust (NYSE:NXRT) reported its financial results for 2021, showing a net income of $23.0 million, down from $44.0 million in 2020. Key metrics include Funds from Operations (FFO) of $63.6 million, and an increase in revenue to $219.2 million. The portfolio's occupancy rate stood at 94.3%, while Same Store properties experienced revenue growth of 4.9%. NXRT also enhanced its dividend by 11.4% to $0.38 per share. Notably, the company completed 1,264 upgrades throughout the year, yielding a 21.1% ROI.
- Total revenues increased to $219.2 million, up from $204.8 million in 2020.
- FFO rose to $63.6 million, or $2.47 per diluted share, compared to $57.2 million in 2020.
- Same Store NOI grew by 5.5%, reaching $115.3 million.
- Dividend increased by 11.4% to $0.38 per share.
- Net income decreased significantly to $23.0 million from $44.0 million.
- Gains on sales of real estate dropped from $69.2 million in 2020 to $46.2 million in 2021.
- Increased depreciation and total property operating expenses negatively impacted net income.
DALLAS, Feb. 15, 2022 /PRNewswire/ -- NexPoint Residential Trust, Inc. (NYSE:NXRT) reported financial results for the fourth quarter and year ended December 31, 2021.
Highlights
- NXRT1 reported net income, FFO2, Core FFO2 and AFFO2 of
$23.0M ,$63.6M ,$62.5M and$70.9M , respectively, attributable to common stockholders for the year ended December 31, 2021, compared to net income, FFO, Core FFO, and AFFO of$44.0M ,$57.2M ,$55.5M and$62.4M , respectively, attributable to common stockholders for the year ended December 31, 2020. - For the year ended December 31, 2021, 2020-2021 Same Store properties3 average effective rent, total revenue and NOI2 increased
11.1% ,4.9% and5.5% , respectively, and occupancy increased 30 bps over the prior year period. - During the year ended December 31, 2021, NXRT acquired four properties totaling 1,129 units for a combined purchase price of
$289.5 million . - The weighted average effective monthly rent per unit across all 39 properties held as of December 31, 2021 (the "Portfolio"), consisting of 14,825 units4, was
$1,261 , while physical occupancy was94.3% . - NXRT paid a fourth quarter dividend of
$0.38 per share of common stock on December 30, 2021; this cash dividend represented a$0.03 88 per share, or11.4% increase, over the prior quarter's dividend. - During 2021, for the properties in the Portfolio, NXRT completed 1,264 full and partial upgrades, achieving an average monthly rent premium of
$175 and a21.1% ROI5. - Since inception, NXRT has completed installation of 6,015 full & partial upgrades, 4,321 kitchen and laundry appliances and 9,624 technology packages, resulting in
$136 ,$47 and$43 average monthly rental increase per unit and21.6% ,72.0% and33.5% ROI, respectively. - During the full year 2021, through its at-the-market offering ("ATM program"), NXRT issued 350,513 shares of common stock for approximately
$26.4 million in gross proceeds.
(1) | In this release, "we," "us," "our," the "Company," "NexPoint Residential Trust," and "NXRT" each refer to NexPoint Residential Trust, Inc., a Maryland corporation. |
(2) | FFO, Core FFO, AFFO and NOI are non-GAAP measures. For a discussion of why we consider these non-GAAP measures useful and reconciliations of FFO, Core FFO, AFFO and NOI to net income (loss), see the "Definitions and Reconciliations of Non-GAAP Measures" and "FFO, Core FFO and AFFO" sections of this release. |
(3) | We define "Same Store" properties as properties that were in our Portfolio for the entirety of the periods being compared. There are 33 properties encompassing 13,098 units of apartment space in our Same Store pool for the year ended December 31, 2021 (our "2020-2021" Same Store" properties). There are 33 properties encompassing 13,098 units of apartment space in our Q4 Same Store pool for the three months ended December 31, 2021 (our "Q4 Same Store" properties). The same store unit count excludes 50 units that are currently down due to fires and winter storm Uri (Hollister Place: 19 units, Timber Creek: 15 units, Venue at 8651: 8 units, Atera: 4 units, Preserve at Terrell Mill: 3 units and Old Farm: 1 unit). |
(4) | Total number of units owned as of December 31, 2021 is 14,825, however 50 units are currently down due to fires and winter storm Uri (Hollister Place: 19 units, Timber Creek: 15 units, Venue at 8651: 8 units, Atera: 4 units, Preserve at Terrell Mill: 3 units and Old Farm: 1 unit). |
(5) | We define Return on Investment ("ROI") as the sum of the actual rent premium divided by the sum of the total cost. |
Full Year 2021 Financial Results
- Total revenues were
$219.2 million for the full year 2021, compared to$204.8 million for the full year 2020. - Net income for the full year 2021 totaled
$23.0 million , or income of$0.89 per diluted share, which included a gain on sales of real estate of$46.2 million and$86.9 million of depreciation and amortization expense. This compared to net income of$44.0 million , or income of$1.74 per diluted share, which included a gain on sales of real estate of$69.2 million and$82.4 million of depreciation and amortization expense for the full year 2020. - The change in our net income of
$23.1 million for the year ended December 31, 2021 as compared to our net income of$44.2 million for the year ended December 31, 2020 primarily relates to decreases in gains on sales of real estate and increases in depreciation and total property operating expenses, partially offset by an increase in total revenues. - For the full year 2021, NOI was
$128.4 million on 39 properties, compared to$118.4 million for the full year 2020 on 37 properties. - For the full year 2021, Same Store NOI increased
5.5% to$115.3 million , compared to$109.3 million for the full year 2020. - For the full year 2021, FFO totaled
$63.6 million , or$2.47 per diluted share, compared to$57.2 million , or$2.27 per diluted share, for the full year 2020. For the full year 2021, Core FFO totaled$62.5 million , or$2.43 per diluted share, compared to$55.5 million , or$2.20 per diluted share, for the full year 2020. For the full year 2021, AFFO totaled$70.9 million , or$2.75 per diluted share, compared to$62.4 million , or$2.47 per diluted share, for the full year 2020.
Fourth Quarter 2021 Financial Results
- Total revenues were
$58.5 million for the fourth quarter of 2021, compared to$50.5 million for the fourth quarter of 2020. - Net income for the fourth quarter of 2021 totaled
$38.8 million , or a gain of$1.50 per diluted share, which included$24.5 million of depreciation and amortization expense and$11.8 million of interest expense. This compared to net loss of$(4.2) million , or a loss of$(0.17) per diluted share, for the fourth quarter of 2020, which included$19.9 million of depreciation and amortization expense and$11.0 million of interest expense. - The change in our net income (loss) between the periods primarily relates to increases in total revenues and gains on sales of real estate, partially offset by increases in total property operating expenses and depreciation and amortization expense.
- For the fourth quarter of 2021, NOI was
$34.8 million on 39 properties, compared to$28.5 million for the fourth quarter of 2020 on 37 properties. - For the fourth quarter of 2021, Q4 Same Store NOI increased
14.7% to$30.7 million , compared to$26.7 million for the fourth quarter of 2020. - For the fourth quarter of 2021, FFO totaled
$17.1 million , or$0.66 per diluted share, compared to$15.7 million , or$0.62 per diluted share, for the fourth quarter of 2020. For the fourth quarter of 2021, Core FFO totaled$17.8 million , or$0.69 per diluted share, compared to$14.2 million , or$0.56 per diluted share, for the fourth quarter of 2020. For the fourth quarter of 2021, AFFO totaled$19.9 million , or$0.77 per diluted share, compared to$15.9 million , or$0.63 per diluted share, for the fourth quarter of 2020.
Fourth Quarter Earnings Conference Call
NXRT will host a call on Tuesday, February 15, 2022 at 11:00 a.m. ET to discuss its fourth quarter and full year 2021 financial results. The conference call can be accessed live over the phone by dialing 888-220-8451 or, for international callers, +1 323-794-2588 and using passcode Conference ID: 2052798. A live audio webcast of the call will be available online at the Company's website, nxrt.nexpoint.com (under "Resources"). An online replay will be available shortly after the call on the Company's website and continue to be available for 60 days.
A replay of the conference call will also be available through Tuesday, February 22, 2022 by dialing 888-203-1112 or, for international callers, +1 719-457-0820 and entering passcode 2052798.
About NXRT
NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol "NXRT," primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with "value-add" potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of NexPoint Advisors, L.P., an SEC-registered investment advisor, which has extensive real estate experience. Our filings with the Securities and Exchange Commission (the "SEC") are available on our website, nxrt.nexpoint.com, under the "Financials" tab.
Cautionary Statement Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management's current expectations, assumptions and beliefs. Forward-looking statements can often be identified by words such as "expect," "anticipate," "estimate," "may," "should," "plan" and similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding NXRT's business and industry in general, 2022 full year and pro forma guidance and the related components and assumptions, including acquisitions and dispositions, the NOI related to the acquired or disposed properties, shares outstanding and same store growth projections, NXRT's net asset value and the related components and assumptions, including pro forma adjustments for acquisitions and dispositions, the NOI related to the acquired or disposed of properties, estimated value-add expenditures, debt payments, outstanding debt and shares outstanding, guidance for the first quarter 2022 and the related assumptions, planned value-add programs, including projected average rent, rent change and return on investment, expected settlement of interest rate swaps and the effect on the debt maturity schedule, rehab budgets, and expected acquisitions and dispositions. They are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement, including the ultimate duration and severity of the COVID-19 pandemic, and the effectiveness of actions taken, or actions that may be taken, by governmental authorities to contain the outbreak or treat its impact, as well as those described in greater detail in our filings with the Securities and Exchange Commission, particularly those specifically described in our Annual Report on Form 10-K. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the Company's most recent Annual Report on Form 10-K and other filings with the SEC for a more complete discussion of the risks and other factors that could affect any forward-looking statements. The statements made herein speak only as of the date of this release and except as required by law, NXRT does not undertake any obligation to publicly update or revise any forward-looking statements.
NOI and Same Store NOI
The following table, which has not been adjusted for the effects of noncontrolling interests, reconciles NOI and our Same Store NOI for the years and three months ended December 31, 2021 and 2020 to net income (loss), the most directly comparable GAAP financial measure (in thousands):
For the Year Ended December 31, | For the Three Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net income (loss) | $ | 23,106 | $ | 44,150 | $ | 38,831 | $ | (4,212) | ||||||||
Adjustments to reconcile net income (loss) to NOI | ||||||||||||||||
Advisory and administrative fees | 7,631 | 7,670 | 1,925 | 1,893 | ||||||||||||
Corporate general and administrative expenses | 11,966 | 10,035 | 2,896 | 1,595 | ||||||||||||
Casualty-related expenses/(recoveries) | (1) | (200) | 790 | 72 | 64 | |||||||||||
Casualty losses (gains) | (2,595) | (5,886) | (216) | (1,954) | ||||||||||||
Pandemic expense | (2) | 50 | 510 | 4 | 35 | |||||||||||
Property general and administrative expenses | (3) | 2,232 | 1,644 | 571 | 143 | |||||||||||
Depreciation and amortization | 86,878 | 82,411 | 24,543 | 19,932 | ||||||||||||
Interest expense | 44,623 | 44,753 | 11,793 | 11,049 | ||||||||||||
Loss on extinguishment of debt and modification costs | 912 | 1,470 | 584 | — | ||||||||||||
Gain on sales of real estate | (46,214) | (69,151) | (46,214) | — | ||||||||||||
NOI | $ | 128,389 | $ | 118,396 | $ | 34,789 | $ | 28,545 | ||||||||
Less Non-Same Store | ||||||||||||||||
Revenues | (19,157) | (14,101) | (6,430) | (2,748) | ||||||||||||
Operating expenses | 6,971 | 6,678 | 2,328 | 1,237 | ||||||||||||
Operating income | (871) | (1,687) | — | (287) | ||||||||||||
Same Store NOI | $ | 115,332 | $ | 109,286 | $ | 30,687 | $ | 26,747 | ||||||||
(1) | Adjustment to net income (loss) to exclude certain property operating expenses that are casualty-related expenses. |
(2) | Represents additional cleaning, disinfecting and other costs incurred at the properties related to COVID-19 that are not reflective of the continuing operations of the properties. |
(3) | Adjustment to net income (loss) to exclude certain property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional, centralized leasing service and franchise tax fees. |
The following table, which has not been adjusted for the effects of noncontrolling interests, reconciles our NOI and our 2019-2021 Same Store NOI for the years ended December 31, 2021, 2020 and 2019 to net income, the most directly comparable GAAP financial measure (in thousands):
For the Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Net income | $ | 23,106 | $ | 44,150 | $ | 99,438 | ||||||
Adjustments to reconcile net income to NOI: | ||||||||||||
Advisory and administrative fees | 7,631 | 7,670 | 7,500 | |||||||||
Corporate general and administrative expenses | 11,966 | 10,035 | 9,613 | |||||||||
Casualty-related expenses/(recoveries) | (1) | (200) | 790 | (34) | ||||||||
Casualty losses (gains) | (2,595) | (5,886) | 3,488 | |||||||||
Pandemic expense | (2) | 50 | 510 | — | ||||||||
Property general and administrative expenses | (3) | 2,232 | 1,644 | 1,939 | ||||||||
Depreciation and amortization | 86,878 | 82,411 | 69,086 | |||||||||
Interest expense | 44,623 | 44,753 | 37,385 | |||||||||
Loss on extinguishment of debt and modification costs | 912 | 1,470 | 2,869 | |||||||||
Gain on sales of real estate | (46,214) | (69,151) | (127,684) | |||||||||
NOI | $ | 128,389 | $ | 118,396 | $ | 103,600 | ||||||
Less Non-Same Store | ||||||||||||
Revenues | (98,786) | (89,362) | (69,608) | |||||||||
Operating expenses | 39,001 | 37,394 | 29,163 | |||||||||
Operating income | (871) | (1,687) | (587) | |||||||||
Same Store NOI | $ | 67,733 | $ | 64,741 | $ | 62,568 | ||||||
(1) | Adjustment to net income to exclude certain property operating expenses that are casualty-related expenses/(recoveries). |
(2) | Represents additional cleaning, disinfecting, PPE and other costs incurred at the properties related to COVID-19 that are not reflective of the continuing operations of the properties. |
(3) | Adjustment to net income to exclude certain property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional, centralized leasing service and franchise tax fees. |
FFO, Core FFO and AFFO
The following table reconciles our calculations of FFO, Core FFO and AFFO to net income, the most directly comparable GAAP financial measure, for the years ended December 31, 2021, 2020 and 2019 and for the three months ended December 31, 2021 and 2020 (in thousands, except per share amounts):
For the Year Ended December 31, | For the Three Months Ended | |||||||||||||||||||
2021 | 2020 | 2019 | 2021 | 2020 | ||||||||||||||||
Net income | $ | 23,106 | $ | 44,150 | $ | 99,438 | $ | 38,831 | $ | (4,212) | ||||||||||
Depreciation and amortization | 86,878 | 82,411 | 69,086 | 24,543 | 19,932 | |||||||||||||||
Gain on sales of real estate | (46,214) | (69,151) | (127,684) | (46,214) | — | |||||||||||||||
Adjustment for noncontrolling interests | (191) | (172) | (122) | (51) | (47) | |||||||||||||||
FFO attributable to common stockholders | 63,579 | 57,238 | 40,718 | 17,109 | 15,673 | |||||||||||||||
FFO per share - basic | $ | 2.53 | $ | 2.32 | $ | 1.69 | $ | 0.68 | $ | 0.63 | ||||||||||
FFO per share - diluted | $ | 2.47 | $ | 2.27 | $ | 1.66 | $ | 0.66 | $ | 0.62 | ||||||||||
Loss on extinguishment of debt and modification costs | 912 | 1,470 | 2,869 | 584 | — | |||||||||||||||
Casualty-related expenses/(recoveries) | (200) | 790 | (34) | 72 | 64 | |||||||||||||||
Casualty losses (gains) | (2,595) | (5,886) | 3,488 | (216) | (1,954) | |||||||||||||||
Pandemic expense | (1) | 50 | 510 | — | 4 | 35 | ||||||||||||||
Amortization of deferred financing costs - acquisition term notes | 737 | 1,384 | 553 | 238 | 345 | |||||||||||||||
Adjustment for noncontrolling interests | 4 | 6 | (21) | (2) | 5 | |||||||||||||||
Core FFO attributable to common stockholders | 62,487 | 55,512 | 47,573 | 17,789 | 14,168 | |||||||||||||||
Core FFO per share - basic | $ | 2.48 | $ | 2.25 | $ | 1.97 | $ | 0.70 | $ | 0.57 | ||||||||||
Core FFO per share - diluted | $ | 2.43 | $ | 2.20 | $ | 1.93 | $ | 0.69 | $ | 0.56 | ||||||||||
Amortization of deferred financing costs - long term debt | 1,460 | 1,453 | 1,530 | 379 | 351 | |||||||||||||||
Equity-based compensation expense | 6,997 | 5,504 | 5,130 | 1,786 | 1,434 | |||||||||||||||
Adjustment for noncontrolling interests | (25) | (21) | (20) | (6) | (5) | |||||||||||||||
AFFO attributable to common stockholders | 70,919 | 62,448 | 54,213 | 19,948 | 15,948 | |||||||||||||||
AFFO per share - basic | $ | 2.82 | $ | 2.53 | $ | 2.25 | $ | 0.79 | $ | 0.64 | ||||||||||
AFFO per share - diluted | $ | 2.75 | $ | 2.47 | $ | 2.20 | $ | 0.77 | $ | 0.63 | ||||||||||
Weighted average common shares outstanding - basic | 25,170 | 24,715 | 24,116 | 25,293 | 24,797 | |||||||||||||||
Weighted average common shares outstanding - diluted | 25,760 | 25,234 | 24,593 | 25,882 | 25,350 | |||||||||||||||
Dividends declared per common share | $ | 1.404 | $ | 1.279 | $ | 1.138 | $ | 0.380 | $ | 0.341 | ||||||||||
FFO Coverage - diluted | (2) | 1.76x | 1.77x | 1.46x | 1.74x | 1.81x | ||||||||||||||
Core FFO Coverage - diluted | (2) | 1.73x | 1.72x | 1.70x | 1.81x | 1.64x | ||||||||||||||
AFFO Coverage - diluted | (2) | 1.96x | 1.94x | 1.94x | 2.03x | 1.84x | ||||||||||||||
(1) | Represents additional cleaning, disinfecting, PPE and other costs incurred at the properties related to COVID-19 that are not reflective of the continuing operations of the properties. |
(2) | Indicates coverage ratio of FFO/Core FFO/AFFO per common share (diluted) over dividends declared per common share during the period. |
Definitions and Reconciliations of Non-GAAP Measures
Definitions
This presentation contains non-GAAP financial measures. A "non-GAAP financial measure" is defined as a numerical measure of a company's financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets or statements of cash flows of the Company. The non-GAAP financial measures used within this presentation are net operating income ("NOI"), funds from operations attributable to common stockholders ("FFO"), FFO per diluted share, Core FFO, Core FFO per diluted share, adjusted FFO ("AFFO"), AFFO per diluted share and net debt.
NOI is used by investors and our management to evaluate and compare the performance of our properties to other comparable properties, to determine trends in earnings and to compute the fair value of our properties. NOI is calculated by adjusting net income (loss) to add back (1) interest expense (2) advisory and administrative fees, (3) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP, (4) corporate general and administrative expenses, (5) other gains and losses that are specific to us including loss on extinguishment of debt and modification costs, (6) casualty-related expenses/(recoveries) and casualty gains (losses), (7) pandemic expenses that are not reflective of continuing operations of the properties and (8) property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on behalf of the Company at the property for expenses such as legal, professional, centralized leasing service and franchise tax fees. We define "Same Store NOI" as NOI for our properties that are comparable between periods. We view Same Store NOI as an important measure of the operating performance of our properties because it allows us to compare operating results of properties owned for the entirety of the current and comparable periods and therefore eliminates variations caused by acquisitions or dispositions during the periods.
FFO is defined by the National Association of Real Estate Investment Trusts ("NAREIT"), as net income (loss) computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization. We compute FFO in accordance with NAREIT's definition. Our presentation differs slightly in that we begin with net income (loss) before adjusting for amounts attributable to redeemable noncontrolling interests in the OP and we show the combined amounts attributable to such noncontrolling interests as an adjustment to arrive at FFO attributable to common stockholders.
Core FFO makes certain adjustments to FFO, which are either not likely to occur on a regular basis or are otherwise not representative of the ongoing operating performance of our Portfolio. Core FFO adjusts FFO to remove items such as losses on extinguishment of debt and modification costs (includes prepayment penalties and defeasance costs incurred on the early payment of debt, the write-off of unamortized deferred financing costs and fair market value adjustments of assumed debt related to the retirement of debt, costs incurred in connection with a debt modification that are not capitalized as deferred financing costs and other costs incurred in a debt extinguishment that are expensed), casualty-related expenses/and recoveries and gains (losses), pandemic expenses, the amortization of deferred financing costs incurred in connection with obtaining short-term debt financing, and the noncontrolling interests (as described above) related to these items.
AFFO makes certain adjustments to Core FFO. There is no industry standard definition of AFFO and practice is divergent across the industry. AFFO adjusts Core FFO to remove items such as equity-based compensation expense and the amortization of deferred financing costs incurred in connection with obtaining long-term debt financing, and the noncontrolling interests related to these items.
Net debt is calculated by subtracting cash and cash equivalents and restricted cash held for value-add upgrades and green improvements from total debt outstanding.
We believe that the use of NOI, FFO, Core FFO, AFFO and net debt, combined with the required GAAP presentations, improves the understanding of operating results and debt levels of real estate investment trusts ("REITs") among investors and makes comparisons of operating results and debt levels among such companies more meaningful. While NOI, FFO, Core FFO, AFFO and net debt are relevant and widely used measures of operating performance and debt levels of REITs, they do not represent cash flows from operations, net income (loss) or total debt as defined by GAAP and should not be considered an alternative to those measures in evaluating our liquidity, operating performance and debt levels. NOI, FFO, Core FFO and AFFO do not purport to be indicative of cash available to fund our future cash requirements. We present net debt because we believe it provides our investors a better understanding of our leverage ratio. Net debt should not be considered an alternative to total debt, as we may not always be able to use our available cash to repay debt. Our computation of NOI, FFO, Core FFO, AFFO and net debt may not be comparable to NOI, FFO, Core FFO, AFFO and net debt reported by other REITs. For a more complete discussion of NOI, FFO, Core FFO and AFFO, see our most recent Annual Report on Form 10-K and our other filings with the SEC.
Reconciliations
Reconciliation of Debt to Net Debt
(dollar amounts in thousands) | FY 2021 | FY 2020 | FY 2019 | |||||||||
Total mortgage debt | $ | 1,281,146 | $ | 1,168,078 | $ | 1,193,528 | ||||||
Credit facilities | 280,000 | 183,000 | 218,000 | |||||||||
Total Debt | 1,561,146 | 1,351,078 | 1,411,528 | |||||||||
Adjustments to arrive at net debt: | ||||||||||||
Cash and cash equivalents | (49,450) | (24,457) | (25,671) | |||||||||
Restricted cash held for value-add upgrades and green improvements | (11,875) | (10,614) | (21,903) | |||||||||
Net Debt | $ | 1,499,821 | $ | 1,316,007 | $ | 1,363,954 | ||||||
Enterprise Value (1) | $ | 3,637,821 | $ | 2,374,007 | $ | 2,499,954 | ||||||
Leverage Ratio | 41 | % | 55 | % | 55 | % | ||||||
(1) | Enterprise Value is calculated as Market Capitalization as of December 31, 2021 plus Net Debt. |
The following table reconciles our FFO, Core FFO and AFFO guidance to our net loss (the most directly comparable GAAP financial measure) guidance for the year ended December 31, 2022 (in thousands, except per share data):
For the Year Ended December 31, 2022 | ||||
Mid-Point | ||||
Net income | $ | 109,508 | ||
Depreciation and amortization | 95,233 | |||
Gain on sales of real estate | (128,156) | |||
Adjustment for noncontrolling interests | (238) | |||
FFO attributable to common stockholders | 76,347 | |||
FFO per share - diluted (1) | $ | 2.90 | ||
Loss on extinguishment of debt and modification costs | 981 | |||
Amortization of deferred financing costs - acquisition term notes | 714 | |||
Adjustment for noncontrolling interests | (3) | |||
Core FFO attributable to common stockholders | 78,039 | |||
Core FFO per share - diluted (1) | $ | 2.97 | ||
Amortization of deferred financing costs - long term debt | 1,534 | |||
Equity-based compensation expense | 8,700 | |||
Adjustment for noncontrolling interests | (33) | |||
AFFO attributable to common stockholders | 88,240 | |||
AFFO per share - diluted (1) | $ | 3.36 | ||
Weighted average common shares outstanding - diluted | 26,284 | |||
(1) | For purposes of calculating per share data, we assume a weighted average diluted share count of approximately 25.7 million for the full year 2022. |
The following table reconciles our NOI to our net income (loss) for the years ended December 31, 2018, 2017, 2016 and 2015 (in thousands):
For the Year Ended December 31, | ||||||||||||||||
2018 | 2017 | 2016 | 2015 | |||||||||||||
Net income (loss) | $ | (1,614) | $ | 56,359 | $ | 25,888 | $ | (10,992) | ||||||||
Adjustments to reconcile net income (loss) to NOI: | ||||||||||||||||
Advisory and administrative fees | 7,474 | 7,419 | 6,802 | 5,565 | ||||||||||||
Corporate general and administrative expenses | 7,808 | 6,275 | 4,014 | 2,455 | ||||||||||||
Casualty-related expenses/(recoveries) | (663) | (287) | 151 | 25 | ||||||||||||
Property general and administrative expenses | 1,294 | 1,130 | 879 | 1,109 | ||||||||||||
Depreciation and amortization | 47,470 | 48,752 | 35,643 | 40,801 | ||||||||||||
Interest expense | 28,572 | 29,576 | 20,167 | 17,817 | ||||||||||||
Loss on extinguishment of debt and modification costs | 3,576 | 5,719 | 1,722 | 652 | ||||||||||||
Gain on sales of real estate | (13,742) | (78,365) | (25,932) | — | ||||||||||||
Acquisition costs | — | — | 386 | 2,975 | ||||||||||||
NOI | $ | 80,175 | $ | 76,578 | $ | 69,720 | $ | 60,407 | ||||||||
Guidance Reconciliations of NOI, Same Store NOI, NOI, FFO, Core FFO and AFFO
The following table, which has not been adjusted for the effects of noncontrolling interests, reconciles our 2022 Pro Forma NOI guidance to our net income (loss) (the most directly comparable GAAP financial measure) guidance for the year ended December 31, 2022 and for the three months ended March 31, 2022 (in thousands):
For the Year Ended December 31, 2022 | For the Three Months Ended | ||||||||
Mid-Point (1) | Mid-Point (1) | ||||||||
Net income (loss) | $ | 109,508 | $ | (7,426) | |||||
Adjustments to reconcile net loss to NOI: | |||||||||
Advisory and administrative fees | 7,648 | 1,857 | |||||||
Corporate general and administrative expenses | 14,596 | 3,434 | |||||||
Property general and administrative expenses | (2) | 2,600 | 650 | ||||||
Depreciation and amortization | 95,233 | 24,935 | |||||||
Interest expense | 48,086 | 12,167 | |||||||
Loss on extinguishment of debt and modification costs | 981 | (141) | |||||||
Gain on sales of real estate | (128,156) | — | |||||||
NOI | (3) | $ | 150,496 | $ | 35,476 | ||||
Less Non-Same Store | |||||||||
Revenues | (4) | (42,540) | |||||||
Operating expenses | (4) | 17,435 | |||||||
Same Store NOI | (4) | $ | 125,391 | ||||||
(1) | Mid-Point estimates shown for full year and first quarter 2022 guidance. Assumptions made for full year and first quarter 2022 NOI guidance include the Same Store operating growth projections included in the "2022 Full Year Guidance Summary" section of this release and the effect of the acquisition and dispositions throughout the fiscal year. |
(2) | Adjustment to net income (loss) to exclude certain property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional, centralized leasing service and franchise tax fees. |
(3) | 2022 Pro Forma NOI Guidance takes into effect the forecast dispositions of Old Farm, Stone Creek at Old Farm, and Hollister Place as if they were disposed of on December 31, 2022, which we estimate would have contributed approximately an additional |
(4) | Amounts are derived from the results of operations of our pro forma Full Year 2022 Same Store properties and Non-Same Store properties. There are 31 properties in our pro forma Full Year 2022 Same Store pool. |
The following table reconciles our FFO, Core FFO and AFFO to our net income (loss) for the years ended December 31, 2018, 2017, 2016 and 2015 (in thousands):
For the Year Ended December 31, | ||||||||||||||||
2018 | 2017 | 2016 | 2015 | |||||||||||||
Net income (loss) | $ | (1,614) | $ | 56,359 | $ | 25,888 | $ | (10,992) | ||||||||
Depreciation and amortization | 47,470 | 48,752 | 35,643 | 40,801 | ||||||||||||
Gain on sales of real estate | (13,742) | (78,365) | (25,932) | — | ||||||||||||
Adjustment for noncontrolling interests | (96) | (1,695) | (4,583) | (4,170) | ||||||||||||
FFO attributable to common stockholders | 32,018 | 25,051 | 31,016 | 25,639 | ||||||||||||
FFO per share - basic | $ | 1.51 | $ | 1.19 | $ | 1.46 | $ | 1.20 | ||||||||
FFO per share - diluted | $ | 1.48 | $ | 1.17 | $ | 1.46 | $ | 1.20 | ||||||||
Acquisition costs | — | — | 386 | 2,975 | ||||||||||||
Loss on extinguishment of debt and modification costs | 3,576 | 5,719 | 1,722 | 652 | ||||||||||||
Casualty-related recoveries | (663) | — | — | — | ||||||||||||
Change in fair value on derivative instruments - ineffective portion | — | (309) | (1,683) | — | ||||||||||||
Amortization of deferred financing costs - acquisition term notes | 159 | 403 | — | — | ||||||||||||
Adjustment for noncontrolling interests | (9) | (429) | (94) | (322) | ||||||||||||
Core FFO attributable to common stockholders | 35,081 | 30,435 | 31,347 | 28,944 | ||||||||||||
Core FFO per share - basic | $ | 1.66 | $ | 1.45 | $ | 1.48 | $ | 1.36 | ||||||||
Core FFO per share - diluted | $ | 1.62 | $ | 1.42 | $ | 1.47 | $ | 1.36 | ||||||||
Amortization of deferred financing costs - long term debt | 1,491 | 1,592 | 1,423 | 1,081 | ||||||||||||
Equity-based compensation expense | 4,198 | 3,108 | 825 | — | ||||||||||||
Adjustment for noncontrolling interests | (17) | (76) | (140) | (92) | ||||||||||||
AFFO attributable to common stockholders | 40,753 | 35,059 | 33,455 | 29,933 | ||||||||||||
AFFO per share - basic | $ | 1.92 | $ | 1.66 | $ | 1.58 | $ | 1.41 | ||||||||
AFFO per share - diluted | $ | 1.88 | $ | 1.64 | $ | 1.57 | $ | 1.41 | ||||||||
Weighted average common shares outstanding - basic | 21,189 | 21,057 | 21,232 | 21,294 | ||||||||||||
Weighted average common shares outstanding - diluted | 21,667 | 21,399 | 21,314 | 21,294 | ||||||||||||
Contact:
Investor Relations
Jackie Graham
JGraham@nexpoint.com
(214) 276-6300
Media inquiries: JGraham@nexpoint.com
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SOURCE NexPoint Residential Trust, Inc.
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