PLANO, Texas, Feb. 28, 2017 /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 fourth quarter and full
year 2016.
"We are pleased with our fourth quarter results, as we achieved
a 21.2% increase in total proportionate portfolio NOI and AFFO of
$0.12 per share, which was at the
high end of the expectations provided. Our results reflect
the continued progress we are making to complete our development
program, having stabilized five communities in 2016 and creating
value across our high quality portfolio," stated Mark T. Alfieri, Chief Executive Officer of
Monogram.
Mr. Alfieri continued, "While the multifamily sector continues
to experience elevated construction and new supply in several
markets that are impacting rental rates, the long-term demand
fundamentals remain strong. As we look forward in 2017, we
are well positioned to capture the embedded growth and value within
our portfolio as all but one of our remaining development
properties should stabilize in the coming quarters. Further,
consistent with our stated strategy, we plan to continue to dispose
of non-core properties to strategically harvest gains and redeploy
capital to maximize long term stockholder value. Accordingly,
we expect to increase our exposure in existing coastal markets
where opportunities exist and we gain efficiencies, or we may elect
to pay down debt or return capital to stockholders as may be
appropriate."
Fourth Quarter 2016 Highlights
- Net income attributable to common stockholders of $22.5 million as compared to net loss
attributable to common stockholders of $5.9
million in the fourth quarter of 2015. The increase is
primarily due to a GAAP gain on property sale in the fourth quarter
of 2016 of $26.1 million and higher
rental revenues.
- Stabilized one community, The Mile, in Miami, Florida.
- Sold The Reserve at LaVista Walk in Atlanta, Georgia for a total gross sales price
of $57.2 million.
- Total portfolio proportionate share Net Operating Income
("NOI") increased 21.2% to $32.5
million from $26.8 million in
the fourth quarter of 2015. The increase is primarily due to
the lease up of development communities.
- Reported increase in proportionate Same Store NOI of 1.9% and
increase in proportionate quarterly stabilized Same Store NOI of
1.1% as compared to the fourth quarter of 2015.
- Achieved consolidated weighted average occupancy in the
Company's Same Store portfolio of 94.8% with monthly rental revenue
per unit of $1,882, an increase of
0.9% as compared to the fourth quarter of 2015.
- Reduced net debt to Adjusted EBITDA to 8.5x at December 31, 2016, compared to 11.3x at
December 31, 2015.
- Declared a $0.075 per share
dividend which was paid on January 10,
2017 to common stockholders of record on December 31, 2016.
- Subsequent to quarter end, sold Grand Reserve in Dallas, Texas for a total gross sales price of
$42.0 million and completed the
acquisition of The Desmond in Los
Angeles, California as part of a 1031 exchange for a gross
purchase price before closing costs of approximately $105.0 million.
Full Year 2016 Highlights
- Net income attributable to common stockholders of $9.5 million as compared to net income
attributable to common stockholders of $73.8
million for the year ended 2015. The decrease is
primarily due to a higher GAAP gain on property sales in 2015 of
$83.0 million, compared to
$43.6 million in 2016.
- Stabilized five communities, The Mile and SoMa, in Miami, Florida, Verge and Ev in San Diego, California, and Cyan on Peachtree
in Atlanta, Georgia.
- Sold two properties, Renaissance in Concord, California and The Reserve at LaVista
Walk in Atlanta, Georgia, for a
total aggregate gross sales price of approximately $122.6 million.
- Total portfolio proportionate NOI increased 13.9% to
$118.1 million from $103.7 million in the full year 2015. The
increase is primarily due to the lease up of the development
communities.
- Reported increase in proportionate Same Store revenue of 2.6%,
expenses of 0.3%, and NOI of 3.9% as compared to the full year
2015.
Financial Results for the Fourth Quarter 2016
The Company reported net income attributable to common
stockholders of $22.5 million, or
$0.13 per fully diluted share, which
included $26.1 million of GAAP gains
on sales of real estate, compared to net loss attributable to
common stockholders of $5.9 million,
or $(0.04) per fully diluted share,
for the quarter ended December 31,
2015.
The year over year difference is primarily due to the GAAP gain
on sale of real estate in 2016 and in part because of higher rental
revenues. 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 Core Funds from Operations
("AFFO").
Core FFO totaled $19.2 million or
$0.11 per fully diluted share, as
compared to $13.5 million or
$0.08 per fully diluted share, for
the same period in 2015. AFFO totaled $19.8 million or $0.12 per fully diluted share, as compared to
$14.6 million or $0.09 per fully diluted share, for the same
period in 2015.
The quarter over quarter increase in Core FFO and AFFO is
primarily due to an increase in the Company's proportionate share
of NOI from the Same Store portfolio and stabilized non-comparable
and lease up properties.
Financial Results for the Full Year 2016
The Company reported net income attributable to common
stockholders of $9.5 million, or
$0.06 per fully diluted share, which
included $43.6 million of GAAP gains
on sales of real estate, compared to net income attributable to
common stockholders of $73.8 million,
or $0.44 per fully diluted share,
which included $83.0 million of GAAP
gains on sales of real estate, for the full year ended December 31, 2015.
Core FFO totaled $62.2 million or
$0.37 per fully diluted share, as
compared to $64.9 million or
$0.39 per fully diluted share, for
the full year 2015. AFFO totaled $63.9
million or $0.38 per fully
diluted share, as compared to $66.8
million or $0.40 per fully
diluted share, for the full year 2015.
The year over year difference in Core FFO and AFFO is primarily
due to carried interest payments and disposition fees of
$4.5 million received in 2015,
reduction in NOI related to properties sold in 2015, and increase
in interest expense, net of capitalized interest 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 fourth quarter 2016
increased 18% to $74.5 million from
$63.1 million in the same period in
2015. Total portfolio operating expenses increased to
$30.1 million from $27.4 million. Both increases are primarily
attributed to the lease up and stabilization of the Company's new
development communities.
Same Store Portfolio Results
For the 30 Same Store communities, the Company's proportionate
share of fourth quarter 2016 Same Store NOI increased 1.9%,
compared to the fourth quarter of 2015. The Company's
proportionate share of Same Store revenue increased 0.7% and
expenses decreased 1.7% compared to the same period in 2015.
Same Store revenue was impacted by a deceleration in rental
revenue growth and a reduction in occupancy due to significant new
supply in several markets. Same Store expenses decreased primarily
due to lower repair and maintenance expenses, including expensed
turnover costs.
For the full year 2016, the Company's proportionate share of
2016 Same Store revenue increased 2.6%, expenses increased 0.3%,
and NOI increased 3.9% compared to the full year 2015.
Average rental revenue per unit within the Same Store
consolidated portfolio increased 0.9% from $1,866 as of December 31,
2015 to $1,882 as of
December 31, 2016, and weighted
average occupancy decreased from 95.6% as of December 31, 2015 to 94.8% as of December 31, 2016.
For the 36 Quarterly Stabilized Same Store communities, the
Company's proportionate share of fourth quarter of 2016 Same Store
NOI increased 1.1%, compared to the fourth quarter of 2015.
The Company's proportionate share of Quarterly Stabilized Same
Store revenue increased 0.5% and expenses decreased 0.5% compared
to the same period in 2015.
The Quarterly Stabilized Same Store portfolio's results were
largely impacted by the same factors that impacted the Same Store
portfolio.
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 community was stabilized at the end of the fourth
quarter:
- The Mile, located in Miami,
Florida, contains 120 units and was 90% occupied at the end
of the fourth quarter. The Company wholly owns this asset.
The following three operating communities were in lease up at
the end of the fourth quarter:
- OLUME, located in San Francisco,
California, contains 121 units and was 84% occupied at
quarter end. The Company's proportionate ownership is 55% and
the property stabilized in the first quarter of 2017.
- Zinc, located in Cambridge,
Massachusetts, contains 392 units and was 69% occupied at
quarter end. The Company's proportionate ownership is 55% and
the property is expected to be stabilized by the third quarter of
2017.
- Nouvelle, located in Tysons Corner,
Virginia, contains 461 units and was 66% occupied at quarter
end. The Company's proportionate ownership is 55% and the
property is expected to be stabilized by the third quarter of
2017.
One development community was in lease up at the end of the
fourth quarter:
- The Alexan, located in Dallas,
Texas, contains 365 units and was 30% occupied at quarter
end. The Company's proportionate ownership is 50%. The
property is expected to be completed by the first quarter 2017 and
stabilized by the fourth quarter of 2017.
As of December 31, 2016,
Monogram's existing development program, which consists of six
communities in lease up or under construction with 1,995 planned
units is 82% 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 $86 million. All
but one of these projects are expected to be completed and
stabilized by the end of 2017. Four of these communities are
currently leasing and are 59% occupied on a weighted average basis
and two communities, Lucé in Huntington
Beach, California and Caspian Delray Beach in Delray Beach, Florida are under
construction.
The cumulative development program that was outlined at the time
of Monogram's listing, November 21,
2014, is 91% complete based on the Company's proportionate
share of total economic costs.
Transaction Activity
In December 2016, the Company sold
The Reserve at LaVista Walk in Atlanta,
Georgia for a total gross sales price of $57.2 million.
Subsequent to quarter end, the Company sold Grand Reserve in
Dallas, Texas for a total gross
sales price of $42.0
million.
Subsequent to quarter end, the Company acquired The Desmond, a
175 unit development asset located in Los
Angeles, California through a 1031 exchange for an aggregate
gross purchase price of $105.0
million, excluding closing costs. The property was
recently completed and is currently leasing.
Balance Sheet
At the end of the fourth quarter, the Company had total
consolidated debt outstanding of $1.5
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
consolidated debt had a weighted average interest rate of
3.24%.
As of December 31, 2016, the
Company had $74.4 million in
consolidated cash and cash equivalents, and $10.0 million outstanding on the Company's credit
facilities. At the end of the fourth quarter, the Company had
two credit facilities, consisting of a $150
million credit facility and a $200
million revolving credit facility with availability of
$273 million. Subsequent to
December 31, 2016, the Company
retired its $150 million credit
facility, reducing its amount available to draw to $162 million.
In December 2016, the Company
executed an agreement for an $80
million construction loan secured by Lucé, located in
Huntington Beach,
California. The property is a 510 unit development asset,
currently under construction, and the Company's proportionate
ownership is 65%.
Quarterly Dividend Declaration
On November 30, 2016, the Company
declared a cash dividend of $0.075
per common share. The dividend was paid on January 10, 2017 to common stockholders of record
on December 31, 2016.
Outlook
For the full year 2017, the Company expects its Same Store
growth outlook and earnings guidance ranges (per common share)
(unaudited):
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2017 Full Year
Guidance Range
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Proportionate
Share - Same Store Growth:
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Rental
revenue
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1.25%
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to
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2.75%
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Property operating
expenses
|
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3.5%
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to
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4.5%
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NOI
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0.0%
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to
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2.0%
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|
|
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|
|
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|
Core FFO
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$ 0.37
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to
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$ 0.42
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AFFO
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0.39
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to
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0.44
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|
Reconcilation of full
year 2017 AFFO guidance to reported AFFO for the full year
2016
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Guidance Range -
Per Share
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AFFO attributable to
common stockholders - actual for the year ended December 31,
2016
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$ 0.38
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$ 0.38
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NOI from stabilized
non-comparables, lease ups and developments
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0.11
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0.13
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Other, net (primarily
interest expense, interest income and general and administrative
expenses)
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(0.03)
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(0.02)
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Proforma AFFO excluding
transaction activity
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0.46
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0.49
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Impact on 2017
proforma AFFO from dispositions, net of acquisitions
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(0.07)
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(0.05)
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AFFO attributable to
common stockholders - proforma for the year ended December 31,
2017
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$ 0.39
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$ 0.44
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Proforma weighted
average number of common shares outstanding - diluted (in
millions)
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168.1
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168.1
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Conference Call
The Company will hold a conference call on Tuesday, February 28, 2017 at 5:00 p.m. Eastern Time to review its fourth
quarter and full year 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 "Fourth
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; we may dispose of multifamily communities due to factors
including changes in local market conditions, better net earnings
opportunities or capital reallocation, where the redeployment of
the capital may result in different earnings prospects; 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,
2016 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. As of December 31,
2016, Monogram's portfolio includes investments in 51
multifamily communities in 10 states comprising 14,473 apartment
homes.
Consolidated
Balance Sheet
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(in thousands)
(unaudited)
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|
|
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|
December 31,
2016
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|
December 31,
2015
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Assets
|
|
|
|
|
|
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Real
estate
|
|
|
|
|
|
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Land
|
$
527,944
|
|
$
497,360
|
|
|
|
Buildings and
improvements
|
2,814,221
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|
2,627,693
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|
|
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Gross operating real
estate
|
3,342,165
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|
3,125,053
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|
|
|
Less: accumulated
depreciation
|
(461,869)
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|
(357,036)
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|
|
|
Net operating real
estate
|
2,880,296
|
|
2,768,017
|
|
|
|
Construction in
progress, including land
|
120,423
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|
333,153
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|
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Total real estate,
net
|
3,000,719
|
|
3,101,170
|
|
|
|
|
|
|
|
|
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Cash and cash
equivalents
|
74,396
|
|
83,727
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|
|
Tax like-kind
exchange escrow
|
56,762
|
|
-
|
|
|
Intangibles,
net
|
16,977
|
|
18,066
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|
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Other assets,
net
|
51,248
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|
64,993
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|
Total
assets
|
$
3,200,102
|
|
$
3,267,956
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|
|
|
|
|
|
|
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Liabilities
|
|
|
|
|
|
Mortgages and notes
payable, net
|
$
1,522,207
|
|
$
1,461,349
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|
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Credit facilities
payable, net
|
8,023
|
|
45,495
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|
|
Construction costs
payable
|
26,859
|
|
36,975
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|
|
Accounts payable and
other liabilities
|
32,707
|
|
28,922
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|
|
Deferred revenues and
other gains
|
22,077
|
|
19,451
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|
|
Distributions
payable
|
12,512
|
|
12,494
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|
|
Tenant security
deposits
|
6,205
|
|
5,616
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|
Total
liabilities
|
1,630,590
|
|
1,610,302
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|
|
|
|
|
|
|
|
|
Redeemable,
noncontrolling interests
|
29,073
|
|
29,073
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|
|
|
|
|
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Equity
|
|
|
|
|
|
|
Preferred
stock
|
-
|
|
-
|
|
|
Common
stock
|
17
|
|
17
|
|
|
Additional paid-in
capital
|
1,439,199
|
|
1,436,254
|
|
|
Cumulative
distributions and net income (loss)
|
(310,124)
|
|
(269,523)
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|
|
|
Total equity
attributable to common stockholders
|
1,129,092
|
|
1,166,748
|
|
|
Non-redeemable
noncontrolling interests
|
411,347
|
|
461,833
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|
Total
equity
|
1,540,439
|
|
1,628,581
|
|
Total liabilities
and equity
|
$
3,200,102
|
|
$
3,267,956
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|
|
Consolidated
Statements of Operations
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(in thousands, except
per share amounts) (unaudited)
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|
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For the Three
Months Ended
|
|
For the Year
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
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|
|
|
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|
Rental
revenues
|
$
74,461
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|
$ 63,129
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|
$ 280,740
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|
$ 238,068
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Expenses:
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|
|
|
|
|
|
|
|
|
Property operating
expenses
|
19,030
|
|
18,656
|
|
79,548
|
|
67,484
|
|
|
Real estate
taxes
|
11,029
|
|
8,747
|
|
44,134
|
|
34,443
|
|
|
General and
administrative expenses
|
4,998
|
|
6,130
|
|
24,109
|
|
20,813
|
|
|
Settlement expenses
with former advisor
|
1,600
|
|
-
|
|
1,600
|
|
-
|
|
|
Acquisition,
investment and development expenses
|
113
|
|
316
|
|
545
|
|
4,812
|
|
|
Interest
expense
|
11,267
|
|
9,485
|
|
43,888
|
|
30,351
|
|
|
Amortization of
deferred financing costs
|
1,561
|
|
1,416
|
|
6,143
|
|
4,280
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|
|
Depreciation and
amortization
|
31,372
|
|
28,139
|
|
123,623
|
|
102,726
|
|
Total
expenses
|
80,970
|
|
72,889
|
|
323,590
|
|
264,909
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
1,571
|
|
2,216
|
|
7,097
|
|
10,172
|
|
Loss on early
extinguishment of debt
|
(10)
|
|
-
|
|
(41)
|
|
-
|
|
Equity in income of
investment in unconsolidated real estate joint venture
|
-
|
|
-
|
|
-
|
|
250
|
|
Other income,
net
|
408
|
|
55
|
|
113
|
|
127
|
|
Loss from
continuing operations before gains on sales of real
estate
|
(4,540)
|
|
(7,489)
|
|
(35,681)
|
|
(16,292)
|
|
Gains on sales of
real estate
|
26,094
|
|
-
|
|
43,604
|
|
82,975
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
21,554
|
|
(7,489)
|
|
7,923
|
|
66,683
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to non-redeemable noncontrolling interests
|
985
|
|
1,554
|
|
1,548
|
|
7,112
|
|
Net income (loss)
available to the Company
|
22,539
|
|
(5,935)
|
|
9,471
|
|
73,795
|
|
|
Dividends to
preferred stockholders
|
(2)
|
|
(2)
|
|
(7)
|
|
(7)
|
|
Net income (loss)
attributable to common stockholders
|
$
22,537
|
|
$ (5,937)
|
|
$
9,464
|
|
$
73,788
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding - basic
|
166,880
|
|
166,628
|
|
166,825
|
|
166,561
|
|
Weighted average
number of common shares outstanding - diluted
|
167,660
|
|
166,628
|
|
167,557
|
|
167,205
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) per common share
|
$
0.13
|
|
$
(0.04)
|
|
$
0.06
|
|
$
0.44
|
|
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.
NOI and Same Store NOI
We define NOI as rental revenue, less direct property operating
expenses and real estate taxes. We believe that NOI provides
a useful 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, including property management
revenues, interest income, property management expenses,
depreciation, interest and other finance expense, corporate general
and administrative expenses, overhead allocations and other
non-onsite operations. 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 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 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 Proportionate NOI, Proportionate Same Store NOI and
Proportionate Quarterly Stabilized Same Store NOI for our
multifamily communities for the quarters and years ended
December 31, 2016 and
2015:
|
|
|
|
|
|
|
|
|
|
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Year
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Reconciliation of net
income (loss) to Proportionate NOI and Proportionate Same Store
NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss
)
|
$
21,554
|
|
$
(7,489)
|
|
$
7,923
|
|
$
66,683
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net income (loss) to Proportionate NOI:
|
|
|
|
|
|
|
|
|
|
Corporate property
management expenses
|
1,988
|
|
2,165
|
|
10,258
|
|
7,786
|
|
|
General and
administrative expenses
|
4,998
|
|
6,130
|
|
24,109
|
|
20,813
|
|
|
Settlement expenses
with former advisor
|
1,600
|
|
-
|
|
1,600
|
|
-
|
|
|
Interest
expense
|
11,267
|
|
9,485
|
|
43,888
|
|
30,351
|
|
|
Amortization of
deferred financing costs
|
1,561
|
|
1,416
|
|
6,143
|
|
4,280
|
|
|
Depreciation and
amortization
|
31,372
|
|
28,139
|
|
123,623
|
|
102,726
|
|
|
Interest
income
|
(1,571)
|
|
(2,216)
|
|
(7,097)
|
|
(10,172)
|
|
|
Gains on sales of
real estate
|
(26,094)
|
|
-
|
|
(43,604)
|
|
(82,975)
|
|
|
Acquisition,
investment and development expenses
|
113
|
|
316
|
|
545
|
|
4,812
|
|
|
Other, net
|
(398)
|
|
(55)
|
|
(72)
|
|
(377)
|
|
|
Less: Noncontrolling
interests adjustments
|
(13,893)
|
|
(11,085)
|
|
(49,172)
|
|
(40,233)
|
|
Proportionate
NOI
|
32,497
|
|
26,806
|
|
118,144
|
|
103,694
|
|
|
|
|
|
|
|
|
|
|
|
Less:
non-comparable
|
|
|
|
|
|
|
|
|
|
Rental
revenue
|
(17,319)
|
|
(10,056)
|
|
(57,949)
|
|
(35,661)
|
|
|
Property operating
expenses, including real estate taxes
|
7,608
|
|
5,603
|
|
30,127
|
|
18,913
|
|
Proportionate Same
Store NOI
|
22,786
|
|
22,353
|
|
$
90,322
|
|
$
86,946
|
|
|
|
|
|
|
|
|
|
|
|
Plus:
additional same store communities effective October 1,
2015
|
|
|
|
|
|
|
|
|
Rental
revenue
|
4,663
|
|
4,694
|
|
N/A
|
|
N/A
|
|
|
Property operating
expenses, including real estate taxes
|
(1,742)
|
|
(1,606)
|
|
N/A
|
|
N/A
|
|
Proportionate
Quarterly Stabilized Same Store NOI
|
$
25,707
|
|
$
25,441
|
|
N/A
|
|
N/A
|
|
FFO, Core FFO and AFFO
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 (if any) 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 (if any) 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, fair value
adjustments and non-recurring expenses, such as workforce
reduction.
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, and gains and
losses from property dispositions, 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
capitalization rates, 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 may 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 GAAP 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 years
ended December 31, 2016 and 2015:
|
|
|
|
|
|
|
|
|
(in thousands, except
per share amounts) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Year
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
FFO:
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders
|
$
22,537
|
|
$
(5,937)
|
|
$
9,464
|
|
$
73,788
|
Add (deduct) NAREIT
defined adjustments:
|
|
|
|
|
|
|
|
|
Real estate
depreciation and amortization
|
31,225
|
|
28,003
|
|
123,055
|
|
102,215
|
|
Gains on sales of
real estate
|
(26,094)
|
|
-
|
|
(43,604)
|
|
(82,975)
|
|
Gain on involuntary
conversion
|
(196)
|
|
-
|
|
(196)
|
|
-
|
|
Impairment
expense
|
-
|
|
-
|
|
-
|
|
3,128
|
|
Less: Noncontrolling
interests adjustments
|
(9,680)
|
|
(8,363)
|
|
(30,565)
|
|
(31,789)
|
FFO - NAREIT
defined
|
17,792
|
|
13,703
|
|
58,154
|
|
64,367
|
|
|
|
|
|
|
|
|
|
Add (deduct)
adjustments to arrive at Core FFO:
|
|
|
|
|
|
|
|
|
Loss on early
extinguishment of debt
|
10
|
|
-
|
|
41
|
|
-
|
|
Fair value
adjustments (derivatives and business combinations)
|
(226)
|
|
(449)
|
|
(91)
|
|
(389)
|
|
Acquisition expenses
(including start up expenses)
|
87
|
|
268
|
|
637
|
|
1,001
|
|
Settlement expenses
with former advisor
|
1,600
|
|
-
|
|
1,600
|
|
-
|
|
Workforce
reduction
|
-
|
|
-
|
|
2,044
|
|
-
|
|
Less: Noncontrolling
interests adjustments
|
(26)
|
|
(57)
|
|
(168)
|
|
(88)
|
Core FFO
|
19,237
|
|
13,465
|
|
62,217
|
|
64,891
|
|
|
|
|
|
|
|
|
|
Add (deduct)
adjustments to arrive at AFFO:
|
|
|
|
|
|
|
|
|
Recurring capital
expenditures
|
(598)
|
|
(582)
|
|
(2,493)
|
|
(2,601)
|
|
Straight-line
rents
|
251
|
|
264
|
|
971
|
|
916
|
|
Stock compensation
expense
|
841
|
|
1,373
|
|
3,043
|
|
3,197
|
|
Less: Noncontrolling
interests adjustments
|
50
|
|
59
|
|
209
|
|
396
|
AFFO
|
$
19,781
|
|
$
14,579
|
|
$
63,947
|
|
$
66,799
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding - basic
|
166,880
|
|
166,628
|
|
166,825
|
|
166,561
|
Weighted average
number of common shares outstanding - diluted
|
167,660
|
|
167,247
|
|
167,557
|
|
167,205
|
|
|
|
|
|
|
|
|
|
Per common share
amounts - basic and diluted:
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders
|
$
0.13
|
|
$
(0.04)
|
|
$
0.06
|
|
$
0.44
|
|
FFO attributable to
common stockholders - NAREIT Defined
|
$
0.11
|
|
$
0.08
|
|
$
0.35
|
|
$
0.38
|
|
Core FFO attributable
to common stockholders
|
$
0.11
|
|
$
0.08
|
|
$
0.37
|
|
$
0.39
|
|
AFFO attributable to
common stockholders
|
$
0.12
|
|
$
0.09
|
|
$
0.38
|
|
$
0.40
|
Reconciliation of
Full Year 2017 Guidance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance Range -
Per Share
|
|
|
|
|
|
|
|
|
Proforma net income
(loss) attributable to common stockholders
|
|
$ 0.32
|
|
$ 0.37
|
Add (deduct) NAREIT
defined adjustments:
|
|
|
|
|
|
Real estate
depreciation and amortization
|
|
0.75
|
|
0.77
|
|
Gains on sales of
real estate
|
|
(0.50)
|
|
(0.52)
|
|
Less:
Noncontrolling interests adjustments
|
|
(0.24)
|
|
(0.24)
|
Proforma FFO - NAREIT
defined
|
|
0.33
|
|
0.38
|
|
|
|
|
|
|
|
|
Add (deduct)
adjustments to arrive at Proforma Core FFO:
|
|
|
|
|
|
Other (primarily
workforce reduction)
|
|
|
|
0.04
|
|
0.04
|
|
Less:
Noncontrolling interests adjustments
|
|
-
|
|
-
|
Proforma Core
FFO
|
|
0.37
|
|
0.42
|
|
|
|
|
|
|
|
|
Add (deduct)
adjustments to arrive at Proforma AFFO:
|
|
|
|
|
|
Other (primarily
stock compensation expense and recurring capital
expenditures)
|
|
0.02
|
|
0.02
|
|
Less:
Noncontrolling interests adjustments
|
|
-
|
|
-
|
Proforma
AFFO
|
|
$ 0.39
|
|
$ 0.44
|
|
|
|
|
|
|
|
|
Proforma weighted
average number of common shares outstanding - diluted (in
millions)
|
|
168.1
|
|
168.1
|
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP performance measurement of
earnings before interest, taxes, depreciation, amortization, and
other non-recurring items. Its purpose is to highlight
earnings without finance, depreciation and certain amortization
expenses and its use is limited to specialized analysis.
Similar to other non-GAAP measurements, Adjusted EBITDA is
presented on our Proportionate Share. Our presentation may be
different than other companies.
|
|
|
|
|
|
Reconciliation of net
income (loss) available to the Company to Adjusted Proportionate
EBITDA:
|
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
December 31,
2015
|
Total Debt per
Consolidated Balance Sheet
|
|
$
1,530,230
|
|
$
1,506,844
|
|
Less:
Unamortized adjustments from business combinations
|
|
(976)
|
|
(2,490)
|
|
Plus: Deferred
financing costs, net
|
|
11,239
|
|
15,234
|
|
Less:
noncontrolling interests share of adjustments
|
|
(532,068)
|
|
(504,095)
|
Proportionate Share
of Contractual Debt
|
|
1,008,425
|
|
1,015,493
|
|
Less:
Proportionate share of cash and cash equivalents
|
|
(60,689)
|
|
(65,581)
|
Net Proportionate
Share of Contractual Debt
|
|
$
947,736
|
|
$
949,912
|
|
|
|
|
|
|
Total Cash and cash
equivalents per Consolidated Balance Sheet
|
|
$
74,396
|
|
$
83,727
|
|
Less:
noncontrolling interests share of adjustments
|
|
(13,707)
|
|
(18,146)
|
Proportionate share
of cash and cash equivalents
|
|
$
60,689
|
|
$
65,581
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
|
December
31,
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
Net income (loss)
available to the Company
|
|
$
22,539
|
|
$
(5,935)
|
|
Less: Gains on
sales of real estate
|
|
(26,094)
|
|
-
|
|
Depreciation and
amortization
|
|
33,176
|
|
29,798
|
|
Interest
expense
|
|
10,506
|
|
8,900
|
|
Settlement expenses
with former advisor
|
|
1,600
|
|
-
|
|
Other, net
|
|
(322)
|
|
(357)
|
|
Less: noncontrolling
interests share of adjustments
|
|
(13,573)
|
|
(11,351)
|
Adjusted
Proportionate EBITDA
|
|
$
27,832
|
|
$
21,055
|
|
|
|
|
|
|
Annualized
Proportionate EBITDA
|
|
$
111,328
|
|
$
84,220
|
|
|
|
|
|
|
Net Proportionate
Share of Contractual Debt to Adjusted Proportionate
EBITDA
|
8.5x
|
|
11.3x
|
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 they highlight 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-fourth-quarter-and-full-year-2016-results-300415254.html
SOURCE Monogram Residential Trust, Inc.