PLANO, Texas, Aug. 4, 2016 /PRNewswire/ -- Monogram Residential
Trust, Inc., (NYSE: MORE) ("Monogram" or the "Company") an owner,
operator and developer of luxury apartment communities with a
significant presence in select coastal markets across the United States, today reported operational
and financial results for the second quarter 2016.
"Our results year-to-date, including a 5.8% increase in
proportionate same store NOI, reflect the strong performance of our
diversified portfolio of Class A assets, however, looking ahead, we
expect that increased supply will continue to impact certain
markets," stated Mark T. Alfieri,
Chief Executive Officer, President and Chief Operating Officer of
Monogram. "During the quarter, we stabilized two communities, Cyan
on Peachtree in Atlanta and Ev in
San Diego, and completed
construction of Verge in San
Diego. We remain focused on executing on our stated
strategy, to drive consistent same store growth in our stabilized
portfolio and to deliver the embedded NOI within our development
program, which we believe will create significant long term value
for our stockholders."
Second Quarter 2016 Highlights
- Net loss attributable to common stockholders of $9.2 million as compared to net income
attributable to common stockholders of $49.2
million in the second quarter of 2015. The decrease is
primarily due to gain on property sales in the second quarter of
2015.
- Reported increase in proportionate same store NOI of 4.2% as
compared to the second quarter 2015.
- Reported increase in proportionate quarterly stabilized same
store NOI of 6.0% as compared to the second quarter 2015. For the
second quarter, four communities, 4110 Fairmount and Arpeggio
Victory Park in Dallas, TX, Muse
Museum District in Houston, TX and
Blue Sol in Costa Mesa, CA, were
added to the Company's quarterly stabilized same store
portfolio.
- Achieved consolidated weighted average occupancy in the
Company's Same Store portfolio of 95.4% with monthly rental revenue
per unit of $1,879, an increase of
2.5% compared to the second quarter 2015.
- Stabilized two communities, Cyan on Peachtree in Atlanta, GA and Ev in San Diego, CA.
- Completed construction of one development community, Verge, in
San Diego, CA.
- Started leasing one development community, The Alexan, in
Dallas, TX.
- Declared a $0.075 per share
dividend which was paid on July 8,
2016 to common stockholders of record on June 30, 2016.
Financial Results for the Second Quarter 2016
The Company reported net loss attributable to common
stockholders of $9.2 million, or
$(0.06) per fully diluted share,
compared to net income attributable to common stockholders of
$49.2 million, or $0.29 per fully diluted share, which included a
$48.6 million gain on sale of real
estate, in the quarter ended June 30,
2015.
The year over year difference is primarily due to the gain on
sale of real estate in 2015 and in part because of higher
depreciation and amortization expense and interest expense
associated with development properties placed into service in the
last 12 months that are primarily still in lease up. Once
stabilized occupancy is achieved in the development portfolio, the
Company expects that the incremental contribution from these
properties will contribute positively to net income, Funds from
Operations ("FFO"), Core Funds from Operations ("Core FFO"), and
Adjusted Funds from Operations ("AFFO").
Core FFO totaled $14.3 million or
$0.09 per fully diluted share, as
compared to $21.5 million or
$0.13 per fully diluted share, for
the same period in 2015. AFFO totaled $14.7 million or $0.09 per fully diluted share, as compared to
$21.7 million or $0.13 per fully diluted share, for the same
period in 2015.
The year over year difference in core FFO and AFFO is primarily
due to promoted interest payments and disposition fees received in
2015, reduction in NOI related to properties sold in 2015, and
increase in interest expense in 2016, which more than offset
increases in NOI from the same store portfolio and stabilized
non-comparable and lease up properties.
Financial Results for the Six Months Ended June 30, 2016
The Company reported a net loss attributable to common
stockholders of $17.5 million, or
$(0.11) per fully diluted share,
compared to net income attributable to common stockholders of
$48.4 million, or $0.29 per fully diluted share, which included a
$48.6 million gain on sale of real
estate, for the same period in 2015.
Core FFO totaled $26.8 million or
$0.16 per diluted share, as compared
to $36.6 million or $0.22 per diluted share, for the same period in
2015. AFFO totaled $27.6
million or $0.16 per diluted
share, as compared to $37.1 million
or $0.22 per diluted share, for the
same period in 2015.
The year over year difference in core FFO and AFFO is primarily
due to promoted interest payments and disposition fees received in
2015, reduction in NOI related to properties sold in 2015, and
increase in interest expense in 2016, which more than offset
increases in NOI from the same store portfolio and stabilized
non-comparable and lease up properties.
Total Portfolio Results
Total consolidated revenues for the second quarter 2016
increased 16.0% to $68.6 million from
$59.1 million in the same period in
2015. Total portfolio operating expenses increased to
$27.6 million from $23.3 million. Both increases are primarily
attributed to the lease up and stabilization of the Company's new
development communities. Total portfolio NOI increased 14.4% to
$40.9 million from $35.8 million in the second quarter 2015.
Same Store Portfolio Results
For the 32 Same Store communities, the Company's proportionate
share of second quarter 2016 Same Store NOI increased 4.2% to
$23.8 million, compared to
$22.9 million in the second quarter
of 2015. The Company's proportionate share of Same Store
revenue increased 3.0% and expenses increased 0.7% compared to the
same period in 2015.
Year to date compared to the same period in 2015, the Company's
proportionate share of 2016 Same Store revenue increased 3.9%,
expenses increased 0.3%, and NOI increased 5.8%.
Average rental revenue per unit within the Same Store
consolidated portfolio increased 2.5% from $1,834 as of June 30,
2015 to $1,879 as of
June 30, 2016, and weighted average
occupancy decreased from 95.8% as of June
30, 2015 to 95.4% as of June 30,
2016.
For the 36 Quarterly Stabilized Same Store communities, the
Company's proportionate share of second quarter 2016 Same Store NOI
increased 6.0% to $25.7 million,
compared to $24.3 million in the
second quarter of 2015. The Company's proportionate share of
Quarterly Stabilized Same Store revenue increased 4.1% to
$39.7 million from $38.1 million for the same period in 2015.
Quarterly Stabilized Same Store expenses increased 0.9% to
$13.9 million, compared to
$13.8 million for the same period in
2015.
The Company defines Same Store communities as those that are
stabilized and comparable for both the current and the prior
reporting year. The Company considers a property to be
stabilized generally upon achieving 90% occupancy. The
Company defines Quarterly Stabilized Same Store communities as
those that are stabilized and comparable for both the current
quarter and the prior year quarter.
Development and Lease Up Activity
One development community was stabilized during the quarter:
- Cyan on Peachtree, located in Atlanta, Georgia, contains 329 units and was
92% occupied at quarter end. The Company's proportionate
ownership is 55% and the property was stabilized in the second
quarter 2016. The property was stabilized during the second quarter
at a NOI yield of 7.9%.
One development community, Verge, was completed during the
quarter. As a result, the following five operating
communities were in lease up at the end of the second quarter:
- Verge, located in San Diego,
California, contains 444 units and was 74% occupied at
quarter end. The Company's proportionate ownership is 70% and the
property is expected to be stabilized by the third quarter
2016.
- SoMa, located in Miami,
Florida, contains 418 units and was 64% occupied at quarter
end. The Company's proportionate ownership is 55% and the property
is expected to be stabilized by the third quarter 2016.
- OLUME, located in San Francisco,
California, contains 121 units and was 45% occupied at
quarter end. The Company's proportionate share is 55% and the
property is expected to be stabilized by the third quarter
2016.
- Zinc, located in Cambridge,
Massachusetts, contains 392 units and was 39% occupied at
quarter end. The Company's proportionate ownership is 55% and the
property is expected to be stabilized by the second quarter
2017.
- Nouvelle, located in Tysons Corner,
Virginia, contains 461 units and was 39% occupied at quarter
end. The Company's proportionate ownership is 55% and the property
is expected to be stabilized by the third quarter 2017.
One development community started leasing during the
quarter:
- The Alexan, located in Dallas,
Texas, contains 365 units and was 7% occupied at quarter
end. The Company's proportionate ownership is 50% and the
property is expected to be completed by the fourth quarter 2016 and
stabilized by the third quarter of 2017.
One acquisition community was stabilized during the quarter:
- Ev in San Diego, California,
contains 208 units and was 96% occupied at quarter end. The
Company wholly owns this asset and the property was stabilized in
the second quarter 2016.
One acquisition community started leasing during the
quarter:
- The Mile, located in Miami,
FL, contains 120 units and was 7% occupied at quarter end.
The Company wholly owns this asset and the property is expected to
be completed by the third quarter 2016 and stabilized by the first
quarter of 2017.
As of June 30, 2016, Monogram's
existing development program, which currently consists of eight
communities in lease up or under construction with 2,857 planned
units is 83% complete based on the Company's proportionate share of
total economic costs. The Company's share of estimated
remaining development costs to complete the existing development
program totals $113 million.
All but one of these projects are expected to be completed and
stabilized by the end of 2017. Six of these communities are
currently leasing and are 46% occupied on a weighted average basis
and two communities, Lucé in Huntington
Beach, CA and Caspian Delray Beach in Delray Beach, FL are under
construction.
The cumulative development program that was outlined at the time
of Monogram's listing, November 21,
2014, is 88% complete based on the Company's proportionate
share of total economic costs.
Balance Sheet
At the end of the second quarter, the Company had total debt
outstanding of $1.6 billion,
including debt held at the co-investment venture level. The
Company's proportionate share of contractual debt totaled
$1.0 billion. The Company's debt had
a weighted average interest rate of 3.31%.
As of June 30, 2016, the Company
had $58.2 million in cash and cash
equivalents, and $47.0 million
outstanding on the Company's credit facilities. At the end of
the second quarter, the Company had two credit facilities,
consisting of a $150 million credit
facility and a $200 million revolving
credit facility.
Quarterly Dividend Declaration
On May 26, 2016, the Company
declared a cash dividend of $0.075
per common share. The dividend was paid on July 8, 2016 to common stockholders of record at
the close of business on June 30,
2016.
Outlook
For the full-year 2016, the Company has updated its Same Store
growth outlook and established the following earnings guidance
ranges (per common share) (unaudited):
|
|
2016
Full-Year Guidance Range
|
|
|
|
|
|
Proportionate
Share - Same Store Growth:
|
|
|
|
|
Revenue
|
|
3.3%
|
to
|
3.6%
|
Expense
|
|
1.0%
|
to
|
1.5%
|
NOI
|
|
4.25%
|
to
|
5.0%
|
|
|
|
|
|
FFO
|
|
$ 0.31
|
to
|
$ 0.34
|
Core FFO
|
|
0.34
|
to
|
0.37
|
AFFO
|
|
0.35
|
to
|
0.38
|
Conference Call
The Company will hold a conference call on Thursday, August 4, 2016 at 5:00 p.m. Eastern Time to review its second
quarter 2016 results and discuss its outlook for future
performance. To participate in the call, please dial 1-877-407-9039
(Domestic) or 1-201-689-8470 (International), or join the live
webcast of the conference call by accessing the Investor Relations
section of the Company's website at www.monogramres.com.
Please log on at least 15 minutes prior to the scheduled
start time in order to register, download and install any necessary
audio software. Select the "Second Quarter 2016 Earnings Conference
Call" link. The webcast will be archived for 90 days.
Forward-Looking Statements
Certain statements made in this press release and other written
or oral statements made by or on behalf of the Company, may
constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Statements
regarding future events and developments and the Company's future
performance, as well as management's expectations, beliefs, plans,
estimates or projections relating to the future, are
forward-looking statements within the meaning of these laws.
Examples of such statements in this press release and in the
Company's outlook include, expectations regarding apartment market
conditions and expectations regarding future operating conditions,
including the Company's current outlook as to expected funds from
operations, core funds from operations, adjusted funds from
operations, revenue, operating expenses, net operating income,
capital expenditures, depreciation, gains on sales and net income
and anticipated development activities (including projected
construction expenditures and timing). We intend these
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995 and are including this
statement for purposes of complying with those safe harbor
provisions. All forward-looking statements are subject to
certain risks and uncertainties that could cause actual events to
differ materially from those projected. Management believes that
these forward-looking statements are reasonable; however, you
should not place undue reliance on such statements. These
statements are based on current expectations and speak only as of
the date of such statements. The Company undertakes no obligation
to publicly update or revise any forward-looking statement, whether
as a result of future events, new information or otherwise.
The following are some of the factors that could cause the
Company's actual results and its expectations to differ materially
from those described in the Company's forward-looking statements:
we may abandon or defer development opportunities for a number of
reasons, including, without limitation, changes in local market
conditions which make development less desirable, increases in
costs of development, increases in the cost of capital or lack of
capital availability, resulting in losses; construction costs of a
community may exceed our original estimates; we may not complete
construction and lease-up of communities under development or
redevelopment on schedule, resulting in increased interest costs
and construction costs and a decrease in our expected rental
revenues; occupancy rates and market rents may be adversely
affected by competition and local economic and market conditions
which are beyond our control; financing may not be available on
favorable terms or at all, and our cash flows from operations
and access to cost effective capital may be insufficient for
the growth of our development program which could limit our pursuit
of opportunities; our cash flows may be insufficient to meet
required payments of principal and interest, and we may be unable
to refinance existing indebtedness or the terms of such refinancing
may not be as favorable as the terms of existing indebtedness; and
we may be unsuccessful in managing changes in our portfolio
composition. Other important risk factors regarding the Company are
included under the caption "Risk Factors" in the Company's Annual
Report on Form 10-K for the year ended December 31, 2015 and may be discussed in
subsequent filings with the SEC.
About Monogram
Monogram is a fully integrated self-managed real estate
investment trust that invests in, develops and operates high
quality multifamily communities offering location and lifestyle
amenities. Monogram invests in stabilized operating properties and
properties in various phases of development, with a focus on
communities in select markets across the
United States. Monogram's portfolio includes investments in
55 multifamily communities in 10 states comprising 15,211 apartment
homes.
Consolidated
Balance Sheet
|
|
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
June 30,
2016
|
|
December 31,
2015
|
Assets
|
|
|
|
|
|
|
Real
estate
|
|
|
|
|
|
|
Land
|
|
$
510,265
|
|
$
497,360
|
|
|
Buildings and
improvements
|
|
2,774,750
|
|
2,627,693
|
|
|
Gross operating real
estate
|
|
3,285,015
|
|
3,125,053
|
|
|
Less: accumulated
depreciation
|
|
(417,261)
|
|
(357,036)
|
|
|
Net operating real
estate
|
|
2,867,754
|
|
2,768,017
|
|
|
Construction in
progress, including land
|
|
235,524
|
|
333,153
|
|
Total real estate,
net
|
|
3,103,278
|
|
3,101,170
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
58,244
|
|
83,727
|
|
Intangibles,
net
|
|
17,514
|
|
18,066
|
|
Other assets,
net
|
|
64,834
|
|
64,993
|
Total
assets
|
|
$
3,243,870
|
|
$
3,267,956
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Mortgages and notes
payable, net
|
|
$
1,497,454
|
|
$
1,461,349
|
|
Credit facilities
payable, net
|
|
44,216
|
|
45,495
|
|
Construction costs
payable
|
|
37,456
|
|
36,975
|
|
Accounts payable and
other liabilities
|
|
28,929
|
|
28,922
|
|
Deferred revenues,
primarily lease revenues, net
|
|
18,718
|
|
19,451
|
|
Distributions
payable
|
|
12,512
|
|
12,494
|
|
Tenant security
deposits
|
|
6,310
|
|
5,616
|
Total
liabilities
|
|
1,645,595
|
|
1,610,302
|
|
|
|
|
|
|
|
|
Redeemable,
noncontrolling interests
|
|
29,073
|
|
29,073
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Preferred
stock
|
|
-
|
|
-
|
|
Common
stock
|
|
17
|
|
17
|
|
Additional paid-in
capital
|
|
1,437,684
|
|
1,436,254
|
|
Cumulative
distributions and net income (loss)
|
|
(312,065)
|
|
(269,523)
|
|
|
Total equity
attributable to common stockholders
|
|
1,125,636
|
|
1,166,748
|
|
Non-redeemable
noncontrolling interests
|
|
443,566
|
|
461,833
|
Total
equity
|
|
1,569,202
|
|
1,628,581
|
Total liabilities
and equity
|
|
$
3,243,870
|
|
$
3,267,956
|
Consolidated
Statements of Operations
|
|
(in thousands, except
per share amounts) (unaudited)
|
|
|
|
|
Three Months
Ended
|
|
For the Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Rental
revenues
|
$ 68,551
|
|
$ 59,105
|
|
$ 134,098
|
|
$ 115,748
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
20,401
|
|
16,279
|
|
39,207
|
|
31,954
|
|
Real estate
taxes
|
10,617
|
|
8,799
|
|
21,239
|
|
17,368
|
|
General and
administrative expenses
|
7,353
|
|
4,708
|
|
13,863
|
|
9,484
|
|
Acquisition
expenses
|
5
|
|
151
|
|
128
|
|
151
|
|
Investment and other
development expenses
|
95
|
|
3,384
|
|
250
|
|
3,615
|
|
Interest
expense
|
11,063
|
|
6,673
|
|
21,429
|
|
12,670
|
|
Amortization of
deferred financing costs
|
1,554
|
|
946
|
|
3,090
|
|
1,777
|
|
Depreciation and
amortization
|
30,998
|
|
25,134
|
|
61,054
|
|
49,683
|
Total
expenses
|
82,086
|
|
66,074
|
|
160,260
|
|
126,702
|
|
|
|
|
|
|
|
|
|
Interest
income
|
1,776
|
|
2,763
|
|
3,458
|
|
5,360
|
Equity in income of
investment in unconsolidated real estate joint venture
|
-
|
|
64
|
|
-
|
|
250
|
Other income
(expense)
|
(168)
|
|
13
|
|
(283)
|
|
38
|
Loss from
continuing operations before gain on sale of real
estate
|
(11,927)
|
|
(4,129)
|
|
(22,987)
|
|
(5,306)
|
Gain on sale of real
estate
|
-
|
|
48,602
|
|
-
|
|
48,602
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
(11,927)
|
|
44,473
|
|
(22,987)
|
|
43,296
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to non-redeemable noncontrolling interests
|
2,710
|
|
4,724
|
|
5,465
|
|
5,070
|
Net income (loss)
available to the Company
|
(9,217)
|
|
49,197
|
|
(17,522)
|
|
48,366
|
|
Dividends to
preferred stockholders
|
(1)
|
|
(1)
|
|
(3)
|
|
(3)
|
Net income (loss)
attributable to common stockholders
|
$ (9,218)
|
|
$ 49,196
|
|
$ (17,525)
|
|
$
48,363
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding - basic
|
166,800
|
|
166,541
|
|
166,772
|
|
166,525
|
Weighted average
number of common shares outstanding - diluted
|
166,800
|
|
167,202
|
|
166,772
|
|
167,155
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) per common share
|
$
(0.06)
|
|
$
0.29
|
|
$
(0.11)
|
|
$
0.29
|
Non-GAAP Performance Financial Measures and
Definitions
In addition to amounts presented in accordance with GAAP, we
also present certain supplemental non-GAAP measurements.
These measurements are not to be considered more relevant or
accurate than the measurements presented in accordance with
GAAP. In compliance with SEC requirements, our non-GAAP
measurements are reconciled to net income, the most directly
comparable GAAP performance measure. For all non-GAAP
measurements, neither the SEC nor any other regulatory body has
passed judgment on these non-GAAP measurements.
Net Operating Income ("NOI") and Same Store NOI
We define NOI as consolidated rental revenue, less consolidated
property operating expenses and real estate taxes. We believe
that NOI provides a supplemental measure of our operating
performance because NOI reflects the operating performance of our
properties and excludes items that are not associated with real
estate industry defined property operations, such as general and
administrative expenses, corporate property management expenses,
property management fees, depreciation expense, impairment and
interest expense. NOI also excludes revenues not associated
with property operations, such as interest income and other
non-property related revenues. NOI may be helpful in
evaluating all of our multifamily operations and providing
comparability to other real estate companies. NOI is also a useful
measurement because it is included as a basis for certain of our
loan covenant calculations.
We define Same Store NOI as NOI for our stabilized multifamily
communities that are comparable between periods. We view Same
Store NOI as an important measure of the operating performance of
our properties because they allow us to compare operating results
of properties owned for the entirety of the current and comparable
periods and therefore eliminates variations caused by lease-up
activity, acquisitions or dispositions during the periods.
NOI and Same Store NOI should not be considered as replacements
for GAAP net income as they exclude certain income and expenses
that are material to our operations. Additionally, NOI and
Same Store NOI may not be useful in evaluating net asset value or
impairments as they also exclude certain GAAP income and expenses
and non-comparable properties. Investors are cautioned that
NOI and Same Store NOI should only be used to assess the operating
performance trends for the properties included within the
definition.
The following table presents a reconciliation of our net income
(loss) to NOI, Same Store NOI and Quarterly Stabilized Same Store
NOI for our multifamily communities for the quarters and six months
ended June 30, 2016 and
2015:
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Reconciliation of net
income (loss) to NOI and Same Store NOI:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$ (11,927)
|
|
$ 44,473
|
|
$ (22,987)
|
|
$ 43,296
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net income (loss) to NOI:
|
|
|
|
|
|
|
|
|
|
Corporate property
management expenses
|
|
3,406
|
|
1,762
|
|
6,007
|
|
3,576
|
|
General and
administrative expenses
|
|
7,353
|
|
4,708
|
|
13,863
|
|
9,484
|
|
Interest
expense
|
|
11,063
|
|
6,673
|
|
21,429
|
|
12,670
|
|
Amortization of
deferred financing costs
|
|
1,554
|
|
946
|
|
3,090
|
|
1,777
|
|
Depreciation and
amortization
|
|
30,998
|
|
25,134
|
|
61,054
|
|
49,683
|
|
Interest
income
|
|
(1,776)
|
|
(2,763)
|
|
(3,458)
|
|
(5,360)
|
|
Gain on sale of real
estate
|
|
-
|
|
(48,602)
|
|
-
|
|
(48,602)
|
|
Investment and other
development expenses
|
|
95
|
|
3,384
|
|
250
|
|
3,615
|
|
Other, net
|
|
172
|
|
74
|
|
410
|
|
(138)
|
NOI
|
|
40,938
|
|
35,789
|
|
79,658
|
|
70,001
|
|
|
|
|
|
|
|
|
|
|
Less:
non-comparable
|
|
|
|
|
|
|
|
|
|
Rental
revenue
|
|
(17,788)
|
|
(9,695)
|
|
(32,870)
|
|
(18,059)
|
|
Property operating
expenses, including real estate taxes
|
|
9,866
|
|
5,735
|
|
18,869
|
|
10,450
|
Consolidated Same
Store NOI
|
|
33,016
|
|
31,829
|
|
65,657
|
|
62,392
|
|
|
|
|
|
|
|
|
|
|
Less: amounts
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
Rental
revenue
|
|
(14,457)
|
|
(14,156)
|
|
(28,865)
|
|
(28,017)
|
|
Property operating
expenses, including real estate taxes
|
|
5,259
|
|
5,177
|
|
10,468
|
|
10,276
|
Proportionate Same
Store NOI
|
|
23,818
|
|
22,850
|
|
$
47,260
|
|
$ 44,651
|
|
|
|
|
|
|
|
|
|
|
Plus: amounts
related to four multifamily communities stabilized April 1,
2015
|
|
|
|
|
|
|
|
|
|
Rental
revenue
|
|
3,344
|
|
2,827
|
|
N/A
|
|
N/A
|
|
Property operating
expenses, including real estate taxes
|
|
(1,427)
|
|
(1,393)
|
|
N/A
|
|
N/A
|
Proportionate
Quarterly Stabilized Same Store NOI
|
|
$
25,735
|
|
$ 24,284
|
|
N/A
|
|
N/A
|
Funds from Operations, Core FFO and AFFO
Funds from operations ("FFO") is a non-GAAP performance
financial measure that is widely recognized as a measure of REIT
operating performance. We use FFO as currently defined by
NAREIT to be net income (loss), computed in accordance with GAAP
excluding gains (or losses) from sales of property (including
deemed sales and settlements of pre-existing relationships), plus
depreciation and amortization on real estate assets, impairment
write-downs of depreciable real estate or of investments in
unconsolidated real estate partnerships, joint ventures and
subsidiaries that are driven by measurable decreases in the fair
value of depreciable real estate assets, and after related
adjustments for unconsolidated partnerships, joint ventures and
subsidiaries and noncontrolling interests.
Core FFO is calculated starting from FFO adjusted for loss on
early extinguishment of debt, acquisition expenses, contingent
purchase price adjustments, gain or loss on derivative fair value
adjustments and non-recurring expenses, such as transition
expenses.
Adjusted Core FFO ("AFFO") is calculated starting from Core FFO
adjusted for recurring capital expenditures, straight-line rents
and stock compensation expense.
We believe that FFO, Core FFO, and AFFO are helpful to our
investors and our management as measures of operating performance
because they exclude real estate-related depreciation and
amortization, impairments of depreciable real estate, gains and
losses from property dispositions, and extraordinary items, and as
a result, when compared year to year, highlights the impact on
operations from trends in occupancy rates, rental rates, operating
costs, development activities (including capitalized interest and
other costs during the development period), general and
administrative expenses, and interest costs, which may not be
immediately apparent from net income. Historical cost
accounting for real estate assets in accordance with GAAP assumes
that the value of real estate and intangibles diminishes
predictably over time independent of market conditions or the
physical condition of the asset. Since real estate values
have historically risen or fallen with market conditions (which
includes property level factors such as rental rates, occupancy,
capital improvements, status of developments and competition, as
well as macro-economic factors such as economic growth, interest
rates, demand and supply for real estate and inflation), many
industry investors and analysts have considered the presentation of
operating results for real estate companies that use historical
cost accounting alone to be insufficient. FFO, Core FFO and AFFO
are also useful measurements because they are included as a basis
for certain of our loan covenants. As a result, our
management believes that the use of FFO, together with the required
GAAP presentations, is helpful for our investors in understanding
our performance. Factors that impact FFO include property
operations, start-up costs, fixed costs, acquisition expenses,
interest on cash held in accounts or loan investments, income from
portfolio properties, operating costs during the lease up of
developments, interest rates on acquisition financing and general
and administrative expenses. In addition, FFO will be
affected by the types of investments in our and our co-investment
ventures' portfolios, which include, but are not limited to, equity
and mezzanine, and bridge loan investments in existing operating
properties and properties in various stages of development and the
accounting treatment of the investments in accordance with our
accounting policies. Core FFO is useful because it adjusts
for one-time items which increases comparability to other REITs.
AFFO is useful as it is the basis for certain debt covenant
calculations.
FFO, Core FFO, and AFFO should not be considered as alternatives
to net income (loss), nor as an indication of our liquidity, nor
are they indicative of funds available to fund our cash needs,
including our ability to fund distributions. FFO, Core FFO,
and AFFO are also not useful measures in evaluating net asset value
because impairments are taken into account in determining net asset
value but not in determining FFO, Core FFO, and AFFO.
Although the Company has not historically incurred any significant
impairment charges, investors are cautioned that we may not recover
any impairment charges in the future. Accordingly, FFO, Core
FFO, and AFFO should be reviewed in connection with GAAP
measurements. We believe our presentation of FFO is in
accordance with the NAREIT definition, however, our FFO, Core FFO,
and AFFO as presented may not be comparable to amounts calculated
by other REITs.
The following table presents our calculation of FFO, Core FFO,
and AFFO, net of noncontrolling interests, and provides additional
information related to our operations for the quarters and six
months ended June 30, 2016 and
2015:
(in thousands, except
per share amounts) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
FFO:
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders
|
$ (9,218)
|
|
$ 49,196
|
|
$ (17,525)
|
|
$ 48,363
|
Add (deduct) NAREIT
defined adjustments - proportionate share:
|
|
|
|
|
|
|
|
|
Real estate
depreciation and amortization
|
21,169
|
|
17,557
|
|
41,833
|
|
33,486
|
|
Gain on sale of real
estate
|
-
|
|
(48,602)
|
|
-
|
|
(48,602)
|
|
Impairment
expense
|
-
|
|
3,128
|
|
-
|
|
3,128
|
FFO - NAREIT
defined
|
11,951
|
|
21,279
|
|
24,308
|
|
36,375
|
|
|
|
|
|
|
|
|
|
Add (deduct)
adjustments to arrive at Core FFO - proportionate share:
|
|
|
|
|
|
|
|
|
Fair value
adjustments (derivatives and business combinations)
|
138
|
|
39
|
|
138
|
|
55
|
|
Acquisition expenses
(including start up expenses)
|
126
|
|
174
|
|
321
|
|
183
|
|
Workforce
reduction
|
2,044
|
|
-
|
|
2,044
|
|
-
|
Core FFO
|
14,259
|
|
21,492
|
|
26,811
|
|
36,613
|
|
|
|
|
|
|
|
|
|
Add (deduct)
adjustments to arrive at AFFO - proportionate share:
|
|
|
|
|
|
|
|
|
Recurring capital
expenditures
|
(500)
|
|
(527)
|
|
(865)
|
|
(885)
|
|
Straight-line
rents
|
113
|
|
113
|
|
243
|
|
197
|
|
Stock compensation
expense
|
820
|
|
600
|
|
1,400
|
|
1,138
|
AFFO
|
$ 14,692
|
|
$ 21,678
|
|
$
27,589
|
|
$ 37,063
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding - basic
|
166,800
|
|
166,541
|
|
166,772
|
|
166,525
|
Weighted average
number of common shares outstanding - diluted
|
167,605
|
|
167,202
|
|
167,458
|
|
167,155
|
|
|
|
|
|
|
|
|
|
Per common share
amounts - basic and diluted:
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders
|
$
(0.06)
|
|
$
0.29
|
|
$
(0.11)
|
|
$
0.29
|
|
FFO attributable to
common stockholders - NAREIT Defined
|
$
0.07
|
|
$
0.13
|
|
$
0.15
|
|
$
0.22
|
|
Core FFO attributable
to common stockholders
|
$
0.09
|
|
$
0.13
|
|
$
0.16
|
|
$
0.22
|
|
AFFO attributable to
common stockholders
|
$
0.09
|
|
$
0.13
|
|
$
0.16
|
|
$
0.22
|
Reconciliation of Full-Year 2016 Guidance
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
full-year 2016 guidance:
|
|
Guidance Range -
Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Proforma annualized
net income (loss) attributable to common stockholders
|
|
$ (0.21)
|
|
$ (0.16)
|
|
Add (deduct) NAREIT
defined adjustments - Proportionate Share:
|
|
|
|
|
|
Real estate
depreciation and amortization
|
|
0.52
|
|
0.50
|
|
Proforma FFO
annualized - NAREIT defined
|
|
0.31
|
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
Add (deduct)
adjustments to arrive at Proforma Core FFO annualized -
Proportionate Share:
|
|
|
|
|
|
Other (primarily
workforce reduction)
|
|
0.03
|
|
0.03
|
|
Proforma Core FFO
annualized
|
|
0.34
|
|
0.37
|
|
|
|
|
|
|
|
|
|
|
|
|
Add (deduct)
adjustments to arrive at Proforma AFFO annualized - Proportionate
Share:
|
|
|
|
|
|
Other (primarily
stock compensation expense and recurring capital
expenditures)
|
|
0.01
|
|
0.01
|
|
Proforma AFFO
annualized
|
|
$
0.35
|
|
$
0.38
|
|
|
|
|
|
|
|
|
|
|
|
|
Proforma weighted
average number of common shares outstanding - diluted (in
millions)
|
|
167.6
|
|
167.6
|
Other Definitions
Proportionate Share — A non-GAAP presentation of
financial amounts at our effective cash share based on our
participation in distributable operating cash. The amounts include
our share of unconsolidated joint ventures and excludes
noncontrolling interest in consolidated joint ventures.
Proportionate Share presentations may be useful in analyzing our
financial information by providing revenues, expenses, assets and
liabilities attributable only to our common stockholders.
Proportionate Share presentations are also relevant to our
investors and lenders as it highlights operations and capital
available for our lenders and investors and is the basis used for
several of our loan covenants. However, our proportionate share
does not include amounts related to our consolidated operations and
should not be considered as a replacement for corresponding GAAP
amounts presented on a consolidated basis. Investors are
cautioned that our proportionate share amounts should only be used
to assess financial information in the limited context of
evaluating amounts attributable to common stockholders. We
present our proportionate share along with the corresponding GAAP
balance.
Total Economic Costs — A non-GAAP measure
representing costs for all on-site development and construction
costs recognized for GAAP, but including certain items expensed for
GAAP (primarily specific financing and operating expenses incurred
during lease up) and excluding certain GAAP costs related to
consolidated allocated costs, former sponsor-related fees and other
non-cash capitalized cost items.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/monogram-residential-trust-announces-second-quarter-2016-results-and-updates-2016-outlook-300309452.html
SOURCE Monogram Residential Trust, Inc.