Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - BRT Apartments Corp. | exhibit991q32018.htm |
| 8-K - 8-K - BRT Apartments Corp. | a8-kxq32018.htm |
3Q 2018 SUPPLEMENTAL FINANCIAL INFORMATION August 8, 2018 BRT APARTMENTS CORP. 60 Cutter Mill Rd., Great Neck, NY 11021
Forward Looking Statements The information set forth herein contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking information included herein that is not historical fact is subject to a number of risks and uncertainties, depending upon the risks and uncertainties described in the Company's filings with the Securities and Exchange Commission (SEC), and actual results realized by the Company could differ materially from the forward-looking information included herein. Existing and prospective investors are cautioned not to place undue reliance on this forward-looking information, which speak only as of the date hereof. The Company undertakes no obligation to update or revise the information herein, whether as a result of new information, future events or circumstances, or otherwise. The Company recommends that existing and prospective investors review the information set forth in its Annual Report on Form 10-K for the year ended September 30, 2017 (filed December 14, 2017) and the Quarterly Report on Form 10-Q filed contemporaneously herewith. Our fiscal year ends on September 30 and unless otherwise indicated or the context otherwise requires, all references to a quarter or year refer to the applicable fiscal quarter or year.
Table of Contents Table of Contents Page Number Financial Highlights 1 Operating Results 2 Funds From Operations 3 Consolidated Balance Sheets 4 Pro Rata Operating Results 5 Pro Rata Balance Sheets 6 Portfolio Data by State 7 Same Store Comparison ( First Quarter) 8 Same Store Comparison (Fiscal YTD) 9 Multi -Family Acquisitions and Dispositions ; 10 Value-Add Information Debt Analysis 11 Non -GAAP Financial Measures, Definitions, and 12-13 Reconciliations Portfolio Table 14
Financial Highlights June 30, As of September 30, 2018 2017 2017 2016 2015 Market Information Market capitalization $ 192,729,319 $ 110,236,744 $ 150,320,535 $ 111,190,680 $ 99,976,487 Shares outstanding 15,116,025 14,025,031 14,022,438 13,898,835 14,101,056 Closing share price $ 12.75 $ 7.86 $ 10.72 $ 8.00 $ 7.09 Quarterly dividend declared per share $ 0.20 $ - $ - $ - $ - Portfolio Multi-family properties owned 36 35 33 33 28 Units (1) 10,121 9,890 9,568 9,420 8,300 Average occupancy (2) 93.6 % 94.0 % 93.8 % 92.8 % 94.5 % Average monthly rental revenue per occupied unit (2) $964 $936 $933 $852 $810 Quarter ended June 30, Nine Months ended June 30, 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Per Share Data Earnings per share (basic) $ (0.33) $ (0.24) $ 1.89 $ 0.58 Earnings per share (diluted) $ (0.33) $ (0.24) $ 1.87 $ 0.58 FFO per share of common stock (diluted) (3) $ 0.20 $ 0.19 $ 0.77 $ 0.45 AFFO per share of common stock (diluted) (3) $ 0.24 $ 0.23 $ 0.77 $ 0.61 (1) Includes 402 units at a property under development. (2) Average includes stabilized properties and, for the quarters ended June 30, 2018 and 2017, excludes Retreat at Cinco Ranch due to damage suffered from Hurricane Harvey. (3) See the reconciliation of Funds From Operations, or FFO, and Adjusted Funds From Operations, or AFFO, to net income, as calculated in accordance with GAAP, on page 3, and the definitions of such terms at page 13. 1
Operating Results (Unaudited) (dollars in thousands, except per share amounts) Quarter ended June 30, Nine Months ended June 30, 2018 2017 2018 2017 Revenues Rental and other revenue from real estate properties $ 29,951 $ 26,673 $ 87,589 $ 76,404 Other income 203 188 565 980 Total revenues 30,154 26,861 88,154 77,384 Expenses Real estate operating expenses 14,459 13,283 42,004 37,638 Interest expense 8,786 7,180 25,423 20,269 General and administrative 2,452 2,309 7,208 7,296 Depreciation 10,200 7,561 28,088 21,630 Total expenses 35,897 30,333 102,723 86,833 Total revenues less total expenses (5,743) (3,472) (14,569) (9,449) Equity in loss of unconsolidated joint ventures (127) (307) (215) (307) Gain on sale of real estate - - 64,500 35,838 Gain on insurance recovery - 3,227 - Loss on extinguishment of debt - - (850) (799) (Loss) income from continuing operations (5,870) (3,779) 52,093 25,283 Income tax provision (benefit) 101 41 (46) 1,499 (Loss) income from continuing operations, net of taxes (5,971) (3,820) 52,139 23,784 Net (loss) income attributable to non-controlling interests 1,282 418 (25,255) (15,645) Net (loss) income attributable to common stockholders$ (4,689) $ (3,402) $ 26,884 $ 8,139 Weighted average number of shares of common stock outstanding: Basic 14,411,940 14,035,074 14,224,680 13,983,495 Diluted 14,411,940 14,035,074 14,358,013 13,983,495 Per share amounts attributable to common stockholders: Basic $ (0.33) $ (0.24) $ 1.89 $ 0.58 Diluted $ (0.33) $ (0.24) $ 1.87 $ 0.58 2
Funds From Operations (Unaudited) (dollars in thousands, except per share amounts) Quarter ended June 30, Nine Months ended June 30, 2018 2017 2018 2017 GAAP Net (loss) income attributable to common stockholders$ (4,689) $ (3,402) $ 26,884 $ 8,139 Add: depreciation of properties 10,200 7,561 28,088 21,630 Add: our share of depreciation in unconsoliated joint ventures 385 308 1,201 521 Deduct: gain on sales of real estate - - (64,500) (35,838) Adjustment for non-controlling interests (3,160) (1,834) 19,436 11,817 Funds from operations (FFO) attributable to common stockholders 2,736 2,633 11,109 6,269 Adjust for straight line rent accruals (10) (10) (30) (46) Add: loss on extinguishment of debt - - 850 799 Add: amortization of restricted stock and Restricted Stock Units 361 353 973 1,063 Add: amortization of deferred mortgage costs 383 349 1,115 874 Deduct: gain on insurance recovery - - (3,227) - Adjustment for non-controlling interests (87) (72) 220 (541) Adjusted funds from operations (AFFO) attributable to common stockholders $ 3,383 $ 3,253 $ 11,010 $ 8,418 Per share data GAAP Net (loss) income attributable to common stockholders$ (0.33) $ (0.24) $ 1.87 $ 0.58 Add: depreciation of properties 0.71 0.54 1.95 1.55 Add: our share of depreciation in unconsoliated joint ventures 0.03 0.02 0.08 0.04 Deduct: gain on sales of real estate - - (4.50) (2.56) Adjustment for non-controlling interests (0.21) (0.13) 1.37 0.84 Funds from operations (FFO) attributable to common stockholders 0.20 0.19 0.77 0.45 Adjust for straight line rent accruals - - - - Add: loss on extinguishment of debt - - 0.06 0.06 Add: amortization of restricted stock and Restricted Stock Units 0.02 0.03 0.06 0.08 Add: amortization of deferred mortgage costs 0.03 0.02 0.08 0.06 Deduct: gain on insurance recovery - (0.22) Adjustment for non-controlling interests (0.01) (0.01) 0.02 (0.04) Adjusted funds from operations (AFFO) attributable to common stockholders $ 0.24 $ 0.23 $ 0.77 $ 0.61 3
Consolidated Balance Sheets (dollars in thousands) At June 30, At September 30, 2018 (Unaudited) 2017 2016 2015 Assets Real estate properties, net of accumulated depreciation$ 1,054,484 $ 902,281 $ 759,576 $ 591,727 Real estate loan 5,050 5,500 19,500 - Cash and cash equivalents 25,061 12,383 27,399 15,556 Restricted cash 7,630 6,151 7,383 6,518 Deposits and escrows 23,265 27,839 18,972 12,782 Investments in unconsolidated joint ventures 20,542 21,415 298 - Other assets 8,573 9,359 7,775 6,882 Assets of discontinued operations - - - 163,545 Real estate properties held for sale - 8,969 33,996 23,859 Total Assets $ 1,144,605 $ 993,897 $ 874,899 $ 820,869 Liabilities and equity Liabilities Mortgages payable, net of deferred costs$ 783,532 $ 697,826 $ 588,457 $ 451,159 Junior subordinated notes, net of deferred costs 37,033 37,018 36,998 36,978 Accounts payable and accrued liabilities 22,554 22,348 20,716 14,780 Liabilities of discontinued operations - - - 138,530 Mortgage payable held for sale - - 27,052 19,248 Total liabilities 843,119 757,192 673,223 660,695 Equity Common Stock, $.01 par value, 300,000 shares authorized; 14,410 outstanding 144 133 - - Shares of beneficial interest, $3 per value - - 39,696 40,285 Additional paid in capital 214,716 201,910 161,321 161,842 Accumulated other comprehensive income (loss) 2,408 1,000 (1,602) (58) Accumulated deficit (18,626) (37,047) (48,125) (79,414) Total BRT Apartments Corp. stockholders' equity 198,642 165,996 151,290 122,655 Non-controlling interests 102,844 70,709 50,386 37,519 Total Equity 301,486 236,705 201,676 160,174 Total Liabilities and Equity $ 1,144,605 $ 993,897 $ 874,899 $ 820,869 4
Pro Rata Operating Results (Unaudited) (dollars in thousands) Three Months ended June 30, 2018 Consolidated BRT Proportionate Amount Noncontrolling Interest Amount (1) Revenues Rental and other revenue from real estate properties $ 29,951 $ 8,341 $ 21,610 Other income 203 - 203 Total revenues 30,154 8,341 21,813 Expenses Real estate operating expenses 14,459 4,037 10,422 Interest expense 8,786 2,411 6,375 General and administrative 2,452 - 2,452 Depreciation 10,200 3,175 7,025 Total expenses 35,897 9,623 26,274 Total revenues less total expenses (5,743) (1,282) (4,461) Equity in loss of unconsolidated joint ventures (127) - (127) Loss from continuing operations (5,870) (1,282) (4,588) Income Tax Provision 101 - 101 Net loss $ (5,971) $ (1,282) $ (4,689) Nine Months ended June 30, 2018 Consolidated BRT Proportionate Amount Noncontrolling Interest Amount (1) Revenues Rental and other revenue from real estate properties $ 87,589 $ 23,160 $ 64,429 Other income 565 - 565 Total revenues 88,154 23,160 64,994 Expenses Real estate operating expenses 42,004 11,161 30,843 Interest expense 25,423 6,641 18,782 General and administrative 7,208 - 7,208 Depreciation 28,088 8,211 19,877 Total expenses 102,723 26,013 76,710 Total revenues less total expenses (14,569) (2,853) (11,716) Equity in loss of unconsolidated joint ventures (215) - (215) Gain on sale of real estate 64,500 27,645 36,855 Gain on insurance recovery 3,227 807 2,420 Loss on extinguishment of debt (850) (344) (506) Income from continuing operations 52,093 25,255 26,838 Income tax (benefit) provision (46) - (46) Net income $ 52,139 $ 25,255 $ 26,884 (1) This column reflects BRT’s share of the applicable line item, after deducting the non-controlling interest applicable to such line item. Except with respect to the gain on sale of real estate and loss on extinguishment of debt, the impact of the non-controlling interest on such line item was calculated based on each joint venture partner’s percentage equity interest in the applicable joint venture. Gain on sale of real estate and loss on extinguishment of debt were calculated in accordance with the allocation/distribution provisions of the joint venture operating agreement with respect to the properties sold. Generally, in the event of the sale of a multi-family property owned by a joint venture, as a result of allocation/distribution provisions of the applicable joint venture operating agreement, the allocation and distributions of cash and profits to BRT (as opposed to BRT's joint venture partner) will be less than that implied by BRT's percentage equity interest in the property. 5
Pro Rata Consolidated Balance Sheets (Unaudited) (dollars in thousands) At June 30, 2018 BRT Consolidated Noncontrolling Proportionate Amount Interest Amount (1) Assets Real estate properties, net of accumulated depreciation$ 1,054,484 $ 327,788 $ 726,696 Real estate loan 5,050 - 5,050 Cash and cash equivalents 25,061 3,774 21,287 Restricted cash 7,630 - 7,630 Deposits and escrows 23,265 10,028 13,237 Investments in unconsolidated joint ventures 20,542 - 20,542 Other assets 8,573 2,241 6,332 Total Assets $ 1,144,605 $ 343,831 $ 800,774 Liabilities and equity Liabilities Mortgages payable, net of deferred costs$ 783,532 $ 235,578 $ 547,954 Junior subordinated notes, net of deferred costs 37,033 - 37,033 Accounts payable and accrued liabilities 22,554 5,409 17,145 Total liabilities 843,119 240,987 602,132 Equity Common Stock, $.01 par value, 300,000 shares authorized; 14,410 outstanding 144 - 144 Additional paid in capital 214,716 - 214,716 Accumulated other comprehensive income 2,408 - 2,408 Accumulated deficit (18,626) - (18,626) Total BRT Apartments Corp. stockholders' equity 198,642 - 198,642 Non-controlling interest 102,844 102,844 - Total equity 301,486 102,844 198,642 Total Liabilities and Equity $ 1,144,605 $ 343,831 $ 800,774 (1) This column reflects BRT’s share of the applicable line item, after deducting the non-controlling interest applicable to such line item. 6
Portfolio Data by State (dollars in thousands, except monthly rent amounts) Quarter Ended June 30, 2018 Weighted Average % of NOI Average Monthly Rent per Units (1) Revenues Expenses NOI (2) Contribution Occupancy (3) Occupied Unit (3) Texas 3,096 $ 9,270 (4) $ 4,908 (4) $ 4,361 28% 92.1%$ 997 Georgia 1,545 4,939 2,371 2,568 17% 92.9% 990 Florida 1,248 3,737 (5) 1,734 (5) 2,004 13% 93.1% 983 Mississippi 776 2,163 817 1,347 9% 97.3% 892 Missouri 775 2,633 1,234 1,399 9% 92.5% 966 South Carolina 683 2,290 1,229 1,061 7% 93.7% 1,009 Alabama 412 1,029 485 544 3% 93.3% 779 Indiana 400 934 549 385 2% 95.6% 692 Tennessee 300 1,032 381 652 4% 97.7% 1,099 Ohio 264 718 311 407 3% 97.6% 850 Virginia 220 829 319 510 3% 95.3% 1,280 Other - 377 123 254 2% N/A N/A Totals 9,719 $ 29,951 $ 14,459 $ 15,492 100% 93.6%$ 964 (1) Excludes 402 units under development in West Nashville, TN. (2) See the reconciliation of NOI to net income, as calculated in accordance with GAAP, at page 12 and the definition at page 13. (3) Excludes Factory at GARCO and Vanguard Heights, which were not stabilized for the full period, and Retreat at Cinco Ranch. (4) Includes $386 and $224 in revenues and expenses, respectively, relating to a property purchased during the three months ended June 30, 2018. (5) Includes $391 and $177 in revenues and expenses, respectively, relating to a property purchased during the three months ended June 30, 2018. 7
Same Store Comparisons Quarter Ended June 30, 2018 and 2017 (dollars in thousands, except monthly rent amounts) Quarter ended June 30, 2018 Revenues (2) Property Operating Expenses NOI (2) Units Q3 2018 Q3 2017 Growth Q3 2018 Q3 2017 Growth Q3 2018 Q3 2017 Growth Texas (1) 1,918 $ 5,787 $ 5,679 1.9% $ 3,095 $ 3,098 (0.1%) $ 2,692 $ 2,581 4.3% Alabama 208 483 473 2.0% 218 220 (0.8%) 265 253 4.6% Georgia 959 2,929 2,877 1.8% 1,440 1,321 9.0% 1,489 1,556 (4.3%) Missouri 601 1,884 1,992 (5.4%) 976 904 8.0% 908 1,088 (16.5%) South Carolina 412 1,334 1,362 (2.1%) 739 689 7.2% 595 673 (11.6%) Indiana 400 934 840 11.2% 549 540 1.6% 385 300 28.3% Mississippi 776 2,163 2,093 3.4% 817 789 3.5% 1,346 1,304 3.2% Tennessee 300 1,032 963 7.2% 380 432 (12.1%) 652 531 22.8% Virginia 220 829 873 (5.0%) 319 262 21.8% 510 611 (16.5%) Florida 276 867 784 10.6% 356 406 (12.5%) 511 378 35.2% Ohio 264 718 683 5.1% 310 371 (16.3%) 408 312 30.6% Totals 6,334 $ 18,960 $ 18,619 1.8% $ 9,199 $ 9,032 1.9% $ 9,761 $ 9,587 1.8% Weighted Average Monthly Rent per Occupied Quarter ended June 30, 2018 Weighted Average Occupancy Unit Q3 2018 Q3 2017 Growth Q3 2018 Q3 2017 Growth Texas (1) 93.1% 92.2% 1.0% $ 944 $ 934 1.0% Alabama 90.2% 95.0% (5.1%) 742 690 7.6% Georgia 93.2% 95.2% (2.1%) 966 935 3.4% Missouri 91.5% 92.0% (0.5%) 966 1,019 (5.2%) South Carolina 93.7% 94.7% (1.1%) 1,009 1,018 (0.9%) Indiana 95.6% 90.7% 5.4% 692 644 7.4% Mississippi 97.3% 96.5% 0.8% 892 860 3.8% Tennessee 97.7% 95.8% 2.0% 1,099 1,037 5.9% Virginia 95.3% 95.7% (0.4%) 1,280 1,280 0.1% Florida 92.9% 91.4% 1.6% 997 930 7.2% Ohio 97.6% 96.7% 0.9% 850 814 4.4% Totals 94.1% 94.2% (0.1%) $ 942 $ 924 1.9% (1) Excludes Retreat at Cinco Ranch in Katy, TX that suffered significant damage as a result of Hurricane Harvey. (2) Generally, negative variances in Revenues and NOI are, among other things, due to higher turnover, changes in occupancy, increases in real estate taxes, and/or increases in insurance. With regards to taxes, when a property is reassessed at a higher value, we generally appeal the reassessment if we feel that we can obtain a reduction in the taxes - if successful, the reduction will typically be reflected in the following year. See definition of Same Store on page 13 8
Same Store Comparisons Nine Months ended June 30, 2018 and 2017 (dollars in thousands, except monthly rent amounts) 2018 YTD Results Revenues (1) Property Operating Expenses NOI (1) Units 2018 2017 Growth 2018 2017 Growth 2018 2017 Growth Texas 1,918 $ 17,134 $ 16,491 3.9% $ 9,577 (2) $ 9,243 3.6% $ 7,557 $ 7,248 4.3% Georgia 959 8,716 8,351 4.4% 3,767 3,910 (3.7%) 4,949 4,441 11.4% Mississippi 776 6,400 6,193 3.3% 2,366 2,393 (1.1%) 4,034 3,800 6.2% Missouri 420 3,323 3,188 4.2% 1,751 1,407 24.4% 1,572 1,781 (11.7%) South Carolina 412 3,869 3,972 (2.6%) 2,153 2,036 5.7% 1,716 1,936 (11.4%) Indiana 400 2,734 2,483 10.1% 1,605 1,520 5.5% 1,129 963 17.3% Tennessee 300 3,139 2,972 5.6% 1,156 1,217 (4.9%) 1,983 1,755 13.0% Ohio 264 2,094 1,992 5.1% 914 929 (1.6%) 1,180 1,063 11.0% Florida 234 2,440 2,390 2.1% 1,047 1,136 (7.9%) 1,393 1,254 11.1% Alabama 208 1,461 1,409 3.7% 657 625 5.1% 804 784 2.6% Totals 5,891 $ 51,310 $ 49,441 3.8% $ 24,993 $ 24,416 2.4% $ 26,317 $ 25,025 5.2% Weighted Average Monthly Rent per Occupied 2018 YTD Results Weighted Average Occupancy Unit 2018 2017 Growth 2018 2017 Growth Texas 93.6% 91.4% 2.5% $ 935 $ 922 1.4% Georgia 93.3% 94.2% (1.0%) 964 922 4.5% Mississippi 96.8% 96.2% 0.6% 880 855 2.9% Missouri 94.8% 92.4% 2.6% 771 788 (2.2%) South Carolina 92.3% 94.5% (2.4%) 996 1,003 (0.7%) Indiana 95.4% 90.0% 6.0% 681 642 6.2% Tennessee 98.5% 97.1% 1.4% 1,110 1,063 4.4% Ohio 97.1% 96.8% 0.3% 834 793 5.2% Florida 89.9% 89.8% 0.1% 989 970 2.0% Alabama 94.0% 95.8% (1.9%) 729 687 6.2% Totals 93.3% 94.3% (1.1%) $ 907 $ 886 2.4% (1) Generally, negative variances in Revenues and NOI are, among other things, due to higher turnover, changes in occupancy, and/or increases in taxes. (2) Includes $156 of expenses relating to casualty loss from Hurricane Harvey and a $354 increase in real estate taxes. 9
Multi -Family Acquisitions and Dispositions Quarter Ended June 30, 2018 (dollars in thousands) Acquisitions during Quarter ended June 30,2018 Purchase Contract Acquisition Ownership Capitalized Location Date No. of Units Purchase Price Mortgage Debt Initial BRT Equity Percentage Acquisition Costs Daytona FL 4/30/2018 208$ 20,500 $ 13,608 $ 6,900 80%$ 386 Grand Prairie (Dallas), TX 5/17/2018 281 30,800 18,995 7,300 50% 411 489$ 51,300 $ 32,603 $ 14,200 $ 797 Dispositions None Value -Add Information Quarter Ended June 30, 2018 Units Estimated Estimated Completed Estimated Rehab Rehab Costs Average Monthly Annual ROI (1) Costs (2) Per unit Rent Increase (3) (3) 227 $890,425 $3,923 $65 19.9% (1) Refers to rehabilitated units at 19 properties with respect to which a new lease or renewal lease was entered into during the period. (2) Reflects costs incurred during the current and prior periods with respect to Units Completed, in which a new lease or renewal lease was entered into during the current period. (3) These results are not necessarily indicative of the results that would be generated if such improvements were made across our portfolio of properties or at any particular property. Rents at a property may increase for reasons wholly unrelated to property improvements, such as changes in demand for rental units in a particular market or sub-market. 10
Debt Analysis As of June 30, 2018 (in thousands) Mortgage Debt Percent of Total Principal Weighted Total Principal Scheduled Principal Payments Payments Due At Average Interest Year Payments Amortization Due at Maturity Maturity Rate (1) 2018$ 30,416 $ 1,416 $ 29,000 (3) 4% 4.57% 2019 5,821 5,821 - - - 2020 62,623 6,879 55,744 8% 3.68% 2021 22,624 8,622 14,002 2% 4.29% 2022 49,519 16,088 33,431 5% 4.42% Thereafter 619,202 46,224 572,978 81% 4.13% Total$ 790,205 $ 85,050 $ 705,155 100% Weighted Average Remaining Term to Maturity 7.2 years Weighted Average Interest Rate 4.15% Debt Service Coverage Ratio (2) 1.38 (1) Based on balloon payments at maturity. (2) See definition on page 13. (3) Subsequent to June 30, 2018, this loan was extended to July, 2019. Junior Subordinated Notes Principal Balance $37,400 Interest Rate 3 month LIBOR + 2.00% ( i.e, 4.36% at 6/30/2018) Maturity April 30, 2036 11
NON -GAAP FINANCIAL MEASURES DEFINITIONS AND RECONCILIATIONS (dollars in thousands) We define NOI as total property revenues less total property operating expenses. Property operating expenses exclude, among other things, depreciation and interest expense on the related property. Other REIT’s may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REIT’s. We believe NOI provides an operating perspective not immediately apparent from GAAP operating income or net (loss) income. NOI is one of the measures we use to evaluate our performance because it (i) measures the core operations of property performance by excluding corporate level expenses and other items unrelated to property operating performance and (ii) captures trends in rental housing and property operating expenses. However, NOI should only be used as an alternative measure of our financial performance. The following table provides a reconciliation of NOI to net income attributable to common stock holders as computed in accordance with GAAP for the periods presented: Three Months ended June 30, 2018 2017 (Unaudited) (Unaudited) GAAP Net loss attributable to common stockholders$ (4,689) $ (3,402) Less: Other Income (203) (188) Add: Interest expense 8,786 7,180 General and administrative 2,452 2,309 Depreciation 10,200 7,561 Equity in loss of unconsolidated joint ventures 127 307 Provision for taxes 101 41 Add: Net income attributable to non-controlling interests (1,282) (418) Net Operating Income $ 15,492 $ 13,390 12
NON -GAAP FINANCIAL MEASURES DEFINITIONS AND RECONCILIATIONS (dollars in thousands) Funds from Operations (FFO) FFO is a non-GAAP financial performance measure defined by the National Association of Real Estate Investment Trusts and is widely recognized by investors and analysts as one measure of operating performance of a REIT. The FFO calculation excludes items such as real estate depreciation and amortization, gains and losses on the sale of real estate assets and impairment on depreciable assets. Historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, it is management’s view, and we believe the view of many industry investors and analysts, that the presentation of operating results for a REIT using the historical accounting for depreciation is insufficient. FFO excludes gains and losses from the sale of real estate, which we believe provides management and investors with a helpful additional measure of the performance of our real estate portfolio, as it allows for comparisons, year to year, that reflect the impact on operations from trends in items such as occupancy rates, rental rates, operating costs, general, administrative and other expenses, and interest expenses. Adjusted Funds from Operations (AFFO) AFFO, as defined by us, excludes from FFO straight line rent adjustments, loss on extinguishment of debt, amortization of restricted stock and RSU expense, amortization of deferred mortgage costs and gain on insurance recovery. Management believes that excluding acquisition-related expenses from AFFO provides investors with supplemental performance information that is consistent with the performance models and analysis used by management and provides investors a view of the performance of our portfolio over time, including after the time we cease to acquire properties on a frequent and regular basis. We believe that AFFO enables investors to compare the performance of our portfolio with other REITs that have not recently engaged in acquisitions, as well as a comparison of our performance with that of other non-traded REITs, as AFFO, or an equivalent measure is routinely reported by non-traded REITs, and we believe often used by analysts and investors for comparison purposes. Debt Service Coverage Ratio Debt service coverage ratio is net operating income ("NOI") divided by total debt service. Total Debt Service Total debt service is the cash required to cover the repayment of interest and principal on a debt for a particular period. Total debt service is used in the calculation of the debt service coverage ratio which is used to determine the borrower’s ability to make debt service payments. Stabilized Properties For all periods presented, stabilized properties include all our consolidated properties, other than those in lease-up or development, and for the three and nine months ended June 30, 2018, also excludes a Katy, Texas property that was damaged by Hurricane Harvey. Same Store Same store refers to stabilized properties that we and our consolidated joint ventures owned and operated for the entirety of both periods being compared. 13
Portfolio Table As of 8/8/2018 Q3 2018 Q3 2018 Avg Year Property Avg. Rent per % Property City State Year Built Acquired Age No. of Units Occupancy Occ. Unit Ownership Silvana Oaks North Charleston SC 2010 2012 9 208 94%$ 1,137 100% Avondale Station Decatur GA 1950 2012 69 212 94% 1,042 100% Stonecrossing Houston TX 1978 2013 41 240 94% 878 91% Pathway Houston TX 1979 2013 40 144 91% 920 91% Brixworth at Bridgestreet Huntsville AL 1985 2013 34 208 90% 742 80% Newbridge Commons Columbus OH 1999 2013 20 264 98% 850 100% Waterside at Castleton Indianapolis IN 1983 2014 36 400 96% 692 80% Crossings of Bellevue Nashville TN 1985 2014 34 300 98% 1,099 80% Kendall Manor Houston TX 1981 2014 38 272 94% 820 80% Avalon Pensacola FL 2008 2014 11 276 93% 997 100% Parkway Grande San Marcos TX 2014 2015 5 192 94% 1,063 80% Cedar Lakes Lake St. Louis MO 1985 2015 34 420 96% 771 80% Factory at Garco North Charleston SC 2017 2015 2 271 88% 1,227 65% Woodland Trails LaGrange GA 2010 2015 9 236 95% 932 100% Retreat at Cinco Ranch Katy TX 2008 2016 11 268 67% 1,548 75% Grove at River Place Macon GA 1988 2016 31 240 96% 706 80% Civic Center 1 Southaven MS 2002 2016 17 392 97% 863 60% Verandas at Shavano Park San Antonio TX 2014 2016 5 288 94% 1,027 65% Chatham Court and Reflections Dallas TX 1986 2016 33 494 92% 922 50% Waters Edge at Harbison Columbia SC 1996 2016 23 204 94% 877 80% Pointe at Lenox Park Atlanta GA 1989 2016 30 271 89% 1,183 74% Civic Center 2 Southaven MS 2005 2016 14 384 97% 921 60% Verandas at Alamo Ranch San Antonio TX 2015 2016 4 288 93% 1,001 72% Kilburn Crossing Fredericksburg VA 2005 2016 14 220 95% 1,280 100% OPOP Towers St. Louis MO 2014 2017 5 128 82% 1,532 76% OPOP Lofts St. Louis MO 2014 2017 5 53 89% 1,364 76% Vanguard Heights Creve Coeur MO 2016 2017 3 174 92% 1,446 78% Mercer Crossing Dallas TX 2014/2016 2017 5 509 88% 1,216 50% Jackson Square Tallahassee FL 1996 2017 23 242 87% 1,016 80% Magnolia Pointe Madison AL 1991 2017 28 204 96% 814 80% Woodland Apartments Boerne TX 2007 2017 12 120 92% 959 80% The Avenue Ocoee FL 1998 2018 21 522 96% 986 50% Parc at 980 Lawrenceville GA 1997 2018 22 586 92% 1,028 50% Anatole Apartments Daytona Beach FL 1986 2018 33 208 94% 890 80% Landings of Carrier Parkway Grand Prairie (Dallas) TX 2001 2018 18 281 92% 992 50% Total/Weighted Average 21.6 9,719 Development Projects Bell's Bluff Nashville TN N/A N/A 402 N/A N/A 58% Total (Including Development Projects) 10,121 Property % Unconsolidated Joint Ventures City State Year Built Age No. of Units Ownership Canalside Sola (1) Columbia SC N/A N/A 338 46% Canalside Lofts Columbia SC 2008/2013 11 374 32% Gateway Oaks Forney TX 2016 3 313 50% Total 1,025 (1) Development project 14