Independence Realty Trust, Inc. (“IRT”) (NYSE: IRT), a
multifamily apartment REIT, today announced its second quarter 2020
financial results.
Second Quarter Highlights
- Net income available to common shares of $0.8 million for the
quarter ended June 30, 2020 compared to $14.7 million for the
quarter ended June 30, 2019.
- Earnings per diluted share of $0.01 for the quarter ended June
30, 2020 compared to $0.16 for the quarter ended June 30,
2019.
- Same store net operating income (“NOI”) growth of 1.2% for the
quarter ended June 30, 2020 compared to the quarter ended June 30,
2019.
- Core Funds from Operations (“CFFO”) of $18.0 million for the
quarter ended June 30, 2020 compared to $16.9 million for the
quarter ended June 30, 2019. CFFO per share was $0.19 for the
second quarter of 2020, in-line with the second quarter of
2019.
- Adjusted EBITDA of $25.6 million for the quarter ended June 30,
2020 compared to $25.3 million for the quarter ended June 30,
2019.
Included later in this press release are definitions of NOI,
CFFO, Adjusted EBITDA and other Non-GAAP financial measures and
reconciliations of such measures to their most comparable financial
measures as calculated and presented in accordance with GAAP.
Management Commentary
“We are pleased with our second quarter 2020 results, which
continue to demonstrate IRT’s resiliency during these challenging
times brought on by the COVID-19 pandemic” said Scott Schaeffer,
Chairman and CEO of IRT. “Through the committed efforts of our
team, we were able to deliver growth across the portfolio in the
second quarter, as reflected in quarterly NOI growth of 1.2%.”
“We remain cautiously optimistic as new lease traffic has not
only rebounded but is also exceeding 2019 levels. We will continue
to work through current headwinds and are mindful of challenges
ahead as the economy remains under pressure. We remain focused on
capital preservation and balance sheet strength, with approximately
$248 million in total liquidity at quarter-end. We will also remain
flexible relative to our value add initiative, which is positioned
to continue delivering attractive returns on investment.”
Same Store Property Operating Results
Second Quarter 2020 Compared to
Second Quarter 2019(1)
Six Months Ended 6/30/20 Compared
to Six Months Ended 6/30/19 (1)
Rental and other property revenue
1.7% increase (2)
3.1% increase (2)
Property operating expenses
2.3% increase (3)
1.8% increase (3)
Net operating income (“NOI”)
1.2% increase
4.0% increase
Portfolio average occupancy
120 bps decrease to 93.0%
70 bps decrease to 92.8%
Portfolio average rental rate
4.0% increase to $1,098
4.4% increase to $1,093
NOI Margin
30 bps decrease to 60.1%
50 bps increase to 60.8%
- Same store portfolio for the three months ended June 30, 2020
includes 54 properties, which represent 14,748 units.
- Excluding the provision for bad debt discussed below, rental
and other property revenue growth was 3.1% for the three months
ended June 30, 2020 and 3.9% for the six months ended June 30,
2020.
- Controllable operating expenses decreased 0.2% and increased
1.8% for the three and six months ended June 30, 2020.
Non-controllable operating expenses increased 6.7% and increased
1.8% for the three and six months ended June 30, 2020.
Same Store Property Operating Results, Excluding Value
Add
The same store portfolio results below exclude 16 communities
that are both part of the same store portfolio and were actively
undergoing Value Add renovations during the three months ended June
30, 2020.
Second Quarter 2020 Compared to
Second Quarter 2019(1)
Six Months Ended 6/30/20 Compared
to Six Months Ended 6/30/19 (1)
Rental and other property revenue
1.4% increase (2)
2.5% increase (2)
Property operating expenses
0.6% increase (3)
0.4% decrease (3)
Net operating income (“NOI”)
1.9% increase
4.4% increase
Portfolio average occupancy
90 bps decrease to 94.3%
20 bps decrease to 94.2%
Portfolio average rental rate
2.8% increase to $1,080
3.1% increase to $1,076
NOI Margin
30 bps increase to 60.9%
110 bps increase to 61.3%
- Same store portfolio, excluding value add, for the three months
ended June 30, 2020 includes 38 properties, which represent 9,680
units.
- Excluding the provision for bad debt discussed below, rental
and other property revenue growth was 2.5% for the three months
ended June 30, 2020 and 3.0% for the six months ended June 30,
2020.
- Controllable operating expenses did not change and increased
0.6% for the three and six months ended June 30, 2020.
Non-controllable operating expenses increased 1.6% and decreased
2.1% for the three and six months ended June 30, 2020.
COVID-19 Metrics (1)(2)
(Dollars in thousands, except per unit data)
Rent collections
2Q 2020
2Q 2019
1Q 2020
Rent collected for the period presented,
as a percentage of rent billed
97.1%
99.0%
98.6%
Deferred payment
plans: (3)
Number of deferred payment plans
260
-
-
Amount of monthly rent deferred for period
presented
$424
-
-
Amount of monthly rent deferred for the
period presented, as a percentage of rent billed
0.9%
0.0%
0.0%
Combined rent collected and rent subject
to deferred payment plans, as a percentage of rent billed
98.0%
99.0%
98.6%
- All metrics presented are for our total portfolio in the period
presented.
- All metrics are based on our internal data, which management
uses to monitor property performance on a daily or weekly
basis.
- Deferred payment plans allow residents to defer between 25% and
75% of their monthly rent for between one and three months.
Residents must provide evidence of hardship and commit to a full
12-month lease term, which allows deferred payments to be repaid
over a longer remaining lease term. As of June 30, 2020, residents
who entered into deferred payment plans had, on average, deferred
56% of their monthly rent for 2.7 months and have agreed to repay
the deferred rent over 9.5 months.
During the second quarter of 2020 and as a result of the
COVID-19 pandemic, we recorded a $723,000 provision for bad debts,
representing 1.4% of total revenue for our 58 communities. Of this
amount, $690,000 relates to the 54-property same store portfolio.
The table below presents additional details on the components of
bad debt:
Components of Bad Debt (1)
2Q 2020
2Q 2019
1Q 2020
Amount
Percentage
Amount
Percentage
Amount
Percentage
Charge-offs, net
$28
0.0%
$236
0.5%
$337
0.6%
Provision for bad debt
723
1.4%
-
-
-
-
Net bad debt
$751
1.4%
$236
0.5%
$337
0.7%
- Dollar amounts are in thousands and percentages are as a
percentage of total rental and other property income. Bad debt is
recorded as a reduction to rental and other property revenue in our
consolidated statements of operations.
Operating statistics
July 2020
July 2019
2Q 2020
Rent collected for the period presented,
as a percentage of rent billed
96.9%
98.0%
97.1%
Amount of monthly rent deferred for the
period presented, as a percentage of rent billed
0.3%
0.0%
0.9%
Combined rent collected and rent subject
to deferred payment plans, as a percentage of rent billed
97.2%
98.0%
98.0%
Average occupancy
93.8%
93.9%
92.9%
Average effective monthly rent per
unit
$1,109
$1,060
$1,108
Resident retention rate
59.1%
56.8%
54.4%
Traffic (1)
16,246
12,093
47,947 (1)
- Traffic represents instances of first contact with potential
residents through email, phone call, office visit, etc. Traffic
during 2Q 2020 was 26.6% higher than 2Q 2019.
Lease-Over-Lease Effective Rent Growth (1)
The table below depicts lease-over-lease effective rent growth
for all new and renewal leases entered into during the respective
periods for the 54-property same store portfolio.
Lease Type
Q2 2020
July 2020
New Leases
1.4%
1.1%
Renewal Leases
2.4%
0.7%
Total
1.9%
0.9%
- Lease-over-lease effective rent growth represents the change in
effective monthly rent, as adjusted for concessions, for each unit
that had a prior lease and current lease that are for a term of
9-13 months.
Value Add Program
Since the inception of our value add program, we have completed
renovations in 3,252 units, achieving a weighted average return on
investment of 18.2% on interior renovation costs.
As part of our COVID-19 pandemic response in the first quarter
of 2020, we delayed the start of renovations at six communities and
paused renovations at five communities. During June and July of
2020, with traffic returning in most of our markets, we resumed
renovation efforts at all five communities that had been paused. As
demonstrated by these actions, we will continue to assess the
potential to resume projects currently on hold as market conditions
improve.
Financial Flexibility
As of June 30, 2020, we had a total liquidity position of
approximately $248 million, which includes unrestricted cash,
additional capacity under our unsecured line of credit, and
proceeds upon the future settlement of the unsettled portion of our
forward equity offering. Subsequent to quarter-end, we used our
unsecured line of credit to prepay, without penalty, $32.1 million
of property level debt with a weighted average interest cost of
3.9%.
Capital Expenditures
For the three months ended June 30, 2020, recurring capital
expenditures for the total portfolio were $1.4 million, or $89 per
unit. For the six months ended June 30, 2020, recurring capital
expenditures for the total portfolio were $2.7 million, or $172 per
unit.
Distributions
On June 15, 2020, our Board of Directors declared a quarterly
cash dividend of $0.12 per share of our common stock, which was
paid on July 24, 2020 to stockholders of record at the close of
business on July 2, 2020.
2020 EPS and CFFO Guidance
On March 26, 2020, we suspended our fiscal 2020 guidance, given
the uncertainty around the length and depth of the coronavirus
crisis and its impact on our business and the economy. At this
time, we believe it is prudent to keep our guidance suspended and
we anticipate resuming our practice of providing full year guidance
when there is more clarity on economic conditions.
Selected Financial Information
See the schedules at the end of this earnings release for
selected financial information for IRT.
Non-GAAP Financial Measures and Definitions
We disclose the following non-GAAP financial measures in this
earnings release: FFO, CFFO, NOI and Adjusted EBITDA. Included at
the end of this release are definitions of these non-GAAP financial
measures and a reconciliation of our reported net income to our FFO
and CFFO, a reconciliation of our same store NOI to our reported
net income, a reconciliation of our Adjusted EBITDA to net income,
and management’s rationales for the usefulness of each of these and
other non-GAAP financial measures used in this release.
Conference Call
All interested parties can listen to the live conference call
webcast at 9:00 AM ET on Thursday, July 30, 2020 from the investor
relations section of the IRT website at www.irtliving.com or by
dialing 1.844.775.2542, access code 9172655. For those who are not
available to listen to the live call, the replay will be available
shortly following the live call from the investor relations section
of IRT’s website and telephonically until Thursday, August 6, 2020
by dialing 1.855.859.2056, access code 9172655.
Supplemental Information
We produce supplemental information that includes details
regarding the performance of the portfolio, financial information,
non-GAAP financial measures, same store information and other
useful information for investors. The supplemental information is
available via our website, www.irtliving.com, through the "Investor
Relations" section.
About Independence Realty Trust, Inc.
Independence Realty Trust, Inc. (NYSE: IRT) is a real estate
investment trust that owns and operates multifamily apartment
properties across non-gateway U.S. markets, including Atlanta,
Louisville, Memphis, and Raleigh. IRT’s investment strategy is
focused on gaining scale within key amenity rich submarkets that
offer good school districts, high-quality retail and major
employment centers. IRT aims to provide stockholders attractive
risk-adjusted returns through diligent portfolio management, strong
operational performance, and a consistent return on capital through
distributions and capital appreciation. More information may be
found on IRT’s website at www.irtliving.com.
Forward-Looking Statements
This press release contains certain 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. Such forward-looking statements can generally be
identified by our use of forward-looking terminology such as
“will,” “strategy,” “expects,” “seeks,” “believes,” “potential,” or
other similar words. These forward-looking statements include,
without limitation, our expectations with respect to capital
allocations, including as to the timing and amount of future
dividends. Because such statements include risks, uncertainties and
contingencies, actual results may differ materially from the
expectations, intentions, beliefs, plans or predictions of the
future expressed or implied by such forward-looking statements.
These forward-looking statements are based upon the current beliefs
and expectations of our management and are inherently subject to
significant business, economic and competitive uncertainties and
contingencies, many of which are difficult to predict and generally
not within our control. In addition, these forward-looking
statements are subject to assumptions with respect to future
business strategies and decisions that are subject to change. Risks
and uncertainties that might cause our actual results and/or future
dividends to differ materially from those expressed or implied by
forward-looking statements include, but are not limited to: risks
related to the impact of COVID-19 and other potential future
outbreaks of infectious diseases on our financial condition,
results of operations, cash flows and performance and those of our
residents as well as on the economy and real estate and financial
markets; changes in market demand for rental apartment homes and
pricing pressures, including from competitors, that could limit our
ability to lease units or increase rents or that could lead to
declines in occupancy and rent levels; uncertainty and volatility
in capital and credit markets, including changes that reduce
availability, and increase costs, of capital; inability of tenants
to meet their rent and other lease obligations and charge-offs in
excess of our allowance for bad debt; legislative restrictions that
may delay or limit collections of past due rents; risks endemic to
real estate and the real estate industry generally; the effects of
natural and other disasters; delays in completing, and cost
overruns incurred in connection with, our value add initiatives and
failure to achieve projected rent increases and occupancy levels on
account of the initiatives; unexpected costs of REIT qualification
compliance; costs and disruptions as the result of a cybersecurity
incident or other technology disruption; and share price
fluctuations. Please refer to the documents filed by us with the
SEC, including specifically the “Risk Factors” sections of our Form
10-K for the year ended December 31, 2019 and our Quarterly Report
on Form 10-Q for the quarter ended March 31, 2020, and our other
filings with the SEC, which identify additional factors that could
cause actual results to differ from those contained in
forward-looking statements. We undertake no obligation to update
these forward-looking statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated
events, except as may be required by law. In addition, the
declaration of dividends on our common stock is subject to the
discretion of our Board of Directors and depends upon a broad range
of factors, including our results of operations, financial
condition, capital requirements, the annual distribution
requirements under the REIT provisions of the Internal Revenue Code
of 1986, as amended, applicable legal requirements and such other
factors as our Board of Directors may from time to time deem
relevant. For these reasons, as well as others, there can be no
assurance that dividends in the future will be equal or similar to
the expected amount of the quarterly dividend described in this
press release.
Schedule I
Independence Realty Trust, Inc.
Selected Financial
Information
(Dollars in thousands, except
share and per share amounts)
(unaudited)
For the Three Months
Ended
June 30,
2020
March 31,
2020
December 31, 2019
September 30, 2019
June 30,
2019
Selected Financial Information:
Operating Statistics:
Net income available to common shares
$
789
$
(372
)
$
23,784
$
4,863
$
14,709
Earnings (loss) per share -- diluted
$
0.01
$0.00
$
0.26
$
0.05
$
0.16
Rental and other property revenue
$
52,087
$
51,156
$
51,250
$
51,057
$
50,848
Property operating expenses
$
20,974
$
19,737
$
19,064
$
20,546
$
20,072
Net operating income
$
31,113
$
31,419
$
32,186
$
30,511
$
30,776
NOI margin
59.7
%
61.4
%
62.8
%
59.8
%
60.5
%
Adjusted EBITDA
$
25,643
$
24,081
$
27,427
$
25,739
$
25,284
CORE FFO per share
$
0.19
$
0.19
$
0.20
$
0.19
$
0.19
Dividends per share
$
0.12
$
0.18
$
0.18
$
0.18
$
0.18
CORE FFO payout ratio
63.2
%
94.7
%
90.0
%
94.7
%
94.7
%
Portfolio Data:
Total gross assets
$
1,916,424
$
1,949,494
$
1,841,738
$
1,821,173
$
1,817,207
Total number of properties
58
58
57
57
58
Total units
15,805
15,805
15,554
15,536
15,734
Period end occupancy
93.5
%
92.7
%
92.5
%
92.8
%
94.0
%
Total portfolio average occupancy
92.9
%
92.5
%
92.5
%
93.5
%
94.4
%
Total portfolio average effective monthly
rent, per
unit
$
1,108
$
1,100
$
1,088
$
1,084
$
1,058
Same store period end occupancy (a)
93.4
%
93.0
%
92.5
%
92.8
%
94.0
%
Same store portfolio average occupancy
(a)
93.0
%
92.7
%
92.4
%
93.4
%
94.2
%
Same store portfolio average effective
monthly rent,
per unit (a)
$
1,098
$
1,089
$
1,083
$
1,077
$
1,056
Capitalization:
Total debt
$
1,008,911
$
1,049,541
$
985,572
$
979,330
$
989,499
Common share price, period end
$
11.45
$
8.94
$
14.08
$
14.31
$
11.57
Market equity capitalization
$
1,093,822
$
853,600
$
1,294,545
$
1,313,311
$
1,050,712
Total market capitalization
$
2,102,733
$
1,903,141
$
2,280,117
$
2,292,641
$
2,040,211
Total debt/total gross assets
52.6
%
53.8
%
53.5
%
53.8
%
54.5
%
Net debt to Adjusted EBITDA (pro forma)
(b)
9.2
x
9.0
x
8.9
x
9.0
x
9.2
x
Interest coverage
2.8
x
2.5
x
2.8
x
2.6
x
2.6
x
Common shares and OP Units:
Shares outstanding
94,741,146
94,691,806
91,070,637
90,894,656
89,932,418
OP units outstanding
789,134
789,134
871,491
881,107
881,107
Common shares and OP units outstanding
95,530,279
95,480,939
91,942,128
91,775,763
90,813,525
Weighted average common shares and
units
95,224,855
91,737,113
91,526,726
90,908,646
90,394,212
- Same store portfolio consists of 54 properties, which represent
14,748 units.
- Reflects pro forma net debt to Adjusted EBITDA for each period
presented, which includes adjustments for the timing of
acquisitions, the full quarter effect of current value add
initiatives, the completion of capital recycling activities
including paydown of associated indebtedness, and the normalization
of one-time items impacting quarterly EBITDA. Actual net debt to
Adjusted EBITDA for the five quarters ended June 30, 2020 was 9.7,
10.3x, 8.9x, 9.4x, and 9.7x, respectively.
Schedule II
Independence Realty Trust, Inc.
Reconciliation of Net Income
(loss) to
Funds From Operations and
Core Funds From Operations
(Dollars in thousands, except
share and per share amounts)
(unaudited)
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2020
2019
2020
2019
Funds From Operations (FFO):
Net Income (loss)
$
799
$
14,856
$
425
$
17,422
Adjustments:
Real estate depreciation and
amortization
15,156
12,675
29,881
24,993
Net (gains) losses on sale of assets
excluding debt extinguishment costs
—
(14,171
)
—
(14,171
)
Funds From Operations
$
15,955
$
13,360
$
30,306
$
28,244
FFO per share
$
0.17
$
0.15
$
0.32
$
0.31
Core Funds From Operations
(CFFO):
Funds From Operations
$
15,955
$
13,360
$
30,306
$
28,244
Adjustments:
Stock compensation expense (a)
1,233
1,086
3,860
1,708
Amortization of deferred financing
costs
362
362
723
701
Other depreciation and amortization
75
46
178
175
Abandoned deal costs
—
—
130
—
Casualty losses
411
—
411
—
Debt extinguishment costs included in net
gains (losses) on sale of assets
—
2,029
—
2,029
Core Funds From Operations
$
18,036
$
16,883
$
35,608
$
32,857
CFFO per share
$
0.19
$
0.19
$
0.38
$
0.36
Weighted-average shares and units
outstanding
95,224,855
90,394,212
93,462,270
87,870,135
- Included in the six-months ended June 30, 2020 is $1.7 million
of stock compensation expense recorded with respect to stock awards
granted during the period to retirement eligible employees.
Schedule III
Independence Realty Trust, Inc.
Reconciliation of Same-Store Net
Operating Income to Net Income (loss)
(Dollars in thousands)
(unaudited)
For the Three-Months Ended
(a)
June 30, 2020
March 31, 2020
December 31, 2019
September 30, 2019
June 30, 2019
Reconciliation of same-store net
operating income to net income (loss)
Same-store net operating income
$
28,963
$
29,455
$
29,810
$
28,829
$
28,615
Non same-store net operating income
2,150
1,964
2,376
1,682
2,161
Other revenue
181
194
178
242
108
Property management expenses
(2,077
)
(2,156
)
(1,950
)
(1,901
)
(2,062
)
General and administrative expenses
(3,574
)
(5,376
)
(2,987
)
(3,113
)
(3,538
)
Depreciation and amortization expense
(15,231
)
(14,828
)
(14,213
)
(13,434
)
(12,721
)
Interest expense
(9,202
)
(9,497
)
(9,873
)
(9,783
)
(9,849
)
Abandoned deal costs
—
(130
)
—
—
—
Casualty losses
(411
)
—
—
—
—
Net gains (losses) on sale of assets
—
—
20,679
2,390
12,142
Net income (loss)
$
799
$
(374
)
$
24,020
$
4,912
$
14,856
- Same store portfolio includes 54 properties, which represent
14,748 units.
Schedule IV
Independence Realty Trust, Inc.
Reconciliation of Net Income
(Loss) to Adjusted EBITDA
And Interest Coverage Ratio
(Dollars in thousands)
(unaudited)
Three Months Ended
ADJUSTED EBITDA:
June 30, 2020
March 31, 2020
December 31, 2019
September 30, 2019
June 30, 2019
Net income (loss)
$
799
$
(374
)
$
24,020
$
4,912
$
14,856
Add-Back (Deduct):
Depreciation and amortization
15,231
14,828
14,213
13,434
12,721
Interest expense
9,202
9,497
9,873
9,783
9,849
Net (gains) losses on sale of assets
—
—
(20,679
)
(2,390
)
(12,142
)
Abandoned deal costs
—
130
—
—
—
Casualty losses
411
—
—
—
—
Adjusted EBITDA
$
25,643
$
24,081
$
27,427
$
25,739
$
25,284
INTEREST COST:
Interest expense
$
9,202
$
9,497
$
9,873
$
9,783
$
9,849
INTEREST COVERAGE:
2.8
x
2.5
x
2.8
x
2.6
x
2.6
x
Schedule V Independence Realty Trust, Inc.
Definitions
Average Effective Monthly Rent per Unit
Average effective rent per unit represents the average of gross
rent amounts, divided by the average occupancy (in units) for the
period presented. We believe average effective rent is a helpful
measurement in evaluating average pricing. This metric, when
presented, reflects the average effective rent per month.
Average Occupancy
Average occupancy represents the average occupied units for the
reporting period divided by the average of total units available
for rent for the reporting period.
EBITDA and Adjusted EBITDA
EBITDA is defined as net income before interest expense
including amortization of deferred financing costs, income tax
expense, and depreciation and amortization expenses. Adjusted
EBITDA is EBITDA before certain other non-cash or non-operating
gains or losses related to items such as asset sales, debt
extinguishments and acquisition related debt extinguishment
expenses, casualty losses, and abandoned deal costs. EBITDA and
Adjusted EBITDA are each non-GAAP measures. We consider each of
EBITDA and Adjusted EBITDA to be an appropriate supplemental
measure of performance because it eliminates interest, income
taxes, depreciation and amortization, and other non-cash or
non-operating gains and losses, which permits investors to view
income from operations without these non-cash or non-operating
items. Our calculation of Adjusted EBITDA differs from the
methodology used for calculating Adjusted EBITDA by certain other
REITs and, accordingly, our Adjusted EBITDA may not be comparable
to Adjusted EBITDA reported by other REITs.
Funds From Operations (“FFO”) and Core Funds From Operations
(“CFFO”)
We believe that FFO and CFFO, each of which is a non-GAAP
financial measure, are additional appropriate measures of the
operating performance of a REIT and IRT in particular. We compute
FFO in accordance with the standards established by the National
Association of Real Estate Investment Trusts, or NAREIT, as net
income or loss (computed in accordance with GAAP), excluding real
estate-related depreciation and amortization expense, gains or
losses on sales of real estate and the cumulative effect of changes
in accounting principles.
CFFO is a computation made by analysts and investors to measure
a real estate company’s operating performance by removing the
effect of items that do not reflect ongoing property operations,
including stock compensation expense, depreciation and amortization
of other items not included in FFO, amortization of deferred
financing costs, and other non-cash or non-operating gains or
losses related to items such as casualty losses and abandoned deal
costs.
Our calculation of CFFO differs from the methodology used for
calculating CFFO by certain other REITs and, accordingly, our CFFO
may not be comparable to CFFO reported by other REITs. Our
management utilizes FFO and CFFO as measures of our operating
performance, and believes they are also useful to investors,
because they facilitate an understanding of our operating
performance after adjustment for certain non-cash or non-operating
items that are required by GAAP to be expensed but may not
necessarily be indicative of current operating performance and that
may not accurately compare our operating performance between
periods. Furthermore, although FFO, CFFO and other supplemental
performance measures are defined in various ways throughout the
REIT industry, we believe that FFO and CFFO provide investors with
additional useful measures to compare our financial performance to
certain other REITs. Neither FFO nor CFFO is equivalent to net
income or cash generated from operating activities determined in
accordance with GAAP. Furthermore, FFO and CFFO do not represent
amounts available for management’s discretionary use because of
needed capital replacement or expansion, debt service obligations
or other commitments or uncertainties. Neither FFO nor CFFO should
be considered as an alternative to net income as an indicator of
our operating performance or as an alternative to cash flow from
operating activities as a measure of our liquidity.
Interest Coverage
Interest coverage is a ratio computed by dividing Adjusted
EBITDA by interest expense.
Net Debt
Net debt, a non-GAAP financial measure, equals total debt less
cash and cash equivalents. The following table provides a
reconciliation of total debt to net debt (Dollars in
thousands).
IRT presents net debt because management believes it is a useful
measure of IRT’s credit position and progress toward reducing
leverage. The calculation is limited because IRT may not always be
able to use cash to repay debt on a dollar for dollar basis.
As of
June 30, 2020
March 31, 2020
December 31, 2019
September 30, 2019
June 30, 2019
Total debt
$
1,008,911
$
1,049,541
$
985,572
$
979,330
$
989,499
Less: cash and cash equivalents
(11,652
)
(57,436
)
(9,888
)
(6,587
)
(11,060
)
Total net debt
$
997,259
$
992,105
$
975,684
$
972,743
$
978,439
Net Operating Income
We believe that Net Operating Income (“NOI”), a non-GAAP
financial measure, is a useful supplemental measure of its
operating performance. We define NOI as total property revenues
less total property operating expenses, excluding interest
expenses, depreciation and amortization, property management
expenses, and general and administrative expenses. Other REITs may
use different methodologies for calculating NOI, and accordingly,
our NOI may not be comparable to other REITs. We believe that this
measure provides an operating perspective not immediately apparent
from GAAP operating income or net income insofar as the measure
reflects only operating income and expense at the property level.
We use NOI to evaluate performance on a same store and non-same
store basis because NOI measures the core operations of property
performance by excluding corporate level expenses, financing
expenses, and other items not related to property operating
performance and captures trends in rental housing and property
operating expenses. However, NOI should only be used as an
alternative measure of our financial performance.
Same Store Properties and Same Store Portfolio
We review our same store portfolio at the beginning of each
calendar year. Properties are added into the same store portfolio
if they were owned at the beginning of the previous year.
Properties that are held-for-sale or have been sold are excluded
from the same store portfolio.
Total Gross Assets
Total Gross Assets equals total assets plus accumulated
depreciation and accumulated amortization, including fully
depreciated or amortized real estate and real estate related
assets. The following table provides a reconciliation of total
assets to total gross assets (Dollars in thousands).
As of
June 30, 2020
March 31, 2020
December 31, 2019
September 30, 2019
June 30, 2019
Total assets
$
1,708,912
$
1,757,138
$
1,664,106
$
1,653,017
$
1,655,747
Plus: accumulated depreciation
187,758
172,789
158,435
148,924
141,965
Plus: accumulated amortization
19,754
19,567
19,197
19,232
19,495
Total gross assets
$
1,916,424
$
1,949,494
$
1,841,738
$
1,821,173
$
1,817,207
(IRT – ER)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200729005996/en/
Independence Realty Trust, Inc. Edelman Financial
Communications & Capital Markets Ted McHugh and Lauren Torres
212.704.8112 IRT@edelman.com
Independence Realty (NYSE:IRT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Independence Realty (NYSE:IRT)
Historical Stock Chart
From Jul 2023 to Jul 2024