Exhibit 99.1

Independence Realty Trust Announces First Quarter 2021 Financial Results

 

 

PHILADELPHIA – (BUSINESS WIRE) – April 28, 2021 — Independence Realty Trust, Inc. (“IRT”) (NYSE: IRT), a multifamily apartment REIT, today announced its first quarter 2021 financial results.

 

First Quarter Highlights

 

Net income available to common shares of $1.1 million for the quarter ended March 31, 2021 compared to a net loss of $0.4 million for the quarter ended March 31, 2020.

 

 

Earnings per diluted share of $0.01 for the quarter ended March 31, 2021 compared to $0.00 for the quarter ended March 31, 2020.

 

 

Same store net operating income (“NOI”) growth of 5.3% for the quarter ended March 31, 2021 compared to the quarter ended March 31, 2020.

 

 

Core Funds from Operations (“CFFO”) of $18.0 million for the quarter ended March 31, 2021 compared to $14.6 million for the quarter ended March 31, 2020. CFFO per share was $0.18 for the first quarter of 2021, as compared to $0.16 for the first quarter of 2020. To note, this reflects the adoption of our new definition of CFFO, where we no longer exclude stock compensation expense or amortization of deferred financing costs from our computation.

 

 

Adjusted EBITDA of $26.4 million for the quarter ended March 31, 2021 compared to $24.1 million for the quarter ended March 31, 2020.

 

 

Collected 98.4% of rents billed during the quarter ended March 31, 2021 and 99.2% of rents billed during the quarter ended December 31, 2020.

 

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 to report a strong start to the year as vaccine distribution is supporting accelerated re-openings across all of our markets. For the first quarter of 2021, same store NOI increased by 5.3%, led by our continual focus on driving occupancy and rental rates. Our same store occupancy increased 40 basis points since the fourth quarter of 2020, and a sizeable 260 basis points on a year-over-year basis. Rental rates continued to move higher, growing 5.9% over the expiring leases during the first quarter and 4.6% during the second quarter to date. We are excited with the start of this year and remain confident in our growth strategy. As a result, we are raising our 2021 guidance given an improving outlook and the growth potential of our attractive market presence,” said Scott Schaeffer, Chairman and CEO of IRT.

 

Same Store Property Operating Results

 

 

First Quarter 2021 Compared to First Quarter 2020(1)

Rental and other property revenue

5.6% increase

Property operating expenses

6.2% increase

Net operating income (“NOI”)

5.3% increase

Portfolio average occupancy

260 bps increase to 95.3%

Portfolio average rental rate

2.9% increase to $1,129

NOI Margin

20 bps decrease to 61.5%

 

 

(1)

Same store portfolio for the three and twelve months ended March 31, 2021 includes 54 properties, which represent 14,995 units.

 

 

Same Store Property Operating Results, Excluding Value Add

The same store portfolio results below exclude 18 communities that are both part of the same store portfolio and were actively undergoing Value Add renovations during the three months ended March 31, 2021.

 


 

 

 

 

First Quarter 2021 Compared to First Quarter 2020(1)

Rental and other property revenue

3.1% increase

Property operating expenses

4.2% increase

Net operating income (“NOI”)

2.5% increase

Portfolio average occupancy

170 bps increase to 95.8%

Portfolio average rental rate

1.7% increase to $1,099

NOI Margin

40 bps decrease to 61.5%

 

 

(1)

Same store portfolio, excluding value add, for the three and twelve months ended March 31, 2021 includes 36 properties, which represent 9,439 units.

 

COVID-19 Metrics (1)(2)

 

Rent collections

1Q 2021

1Q 2020

4Q 2020

Rent collected for the period presented, as a percentage of rent billed

98.4%

99.1%

99.1%

 

 

 

 

Deferred payment plans: (3)

 

 

 

Number of deferred payment plans

2

-

13

Amount of monthly rent deferred for period presented

$4

-

$61

Amount of monthly rent deferred for the period presented, as a percentage of rent billed

0.0%

0.0%

0.1%

 

 

 

 

Combined rent collected and rent subject to deferred payment plans, as a percentage of rent billed

98.4%

99.1%

99.2%

 

 

(1)

Dollar amounts in thousands. All metrics presented are as of April 27, 2021 for our total portfolio in the period presented.

 

(2)

All metrics are based on our internal data, which management uses to monitor property performance on a daily or weekly basis.

 

(3)

Deferred payment plans allow residents to defer a portion of their monthly rent for one or more months or to repay over time past-due rent which was unpaid due to a COVID-related financial hardship. 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 March 31, 2021, there were 104 active deferred payment plans with an aggregate of $44,896 of deferred rent outstanding.

 

As a result of the COVID-19 pandemic, our bad debt continues to exceed historical levels. During the first quarter, our net bad debt was $433,000 or 80 basis points of revenue. The table below presents additional details on the components of bad debt:

 

Components of Bad Debt (1)

1Q 2021

1Q 2020

4Q 2020

Amount

Percentage

Amount

Percentage

Amount

Percentage

Charge-offs, net

$386

0.7%

$337

0.7%

$289

0.5%

Provision for bad debt

$47

0.1%

-

-

$124

0.3%

Net bad debt

$433

0.8%

$337

0.7%

$413

0.8%

 

 

(1)

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

April 2021

April 2020

1Q 2021

Rent collected for the period presented, as a percentage of rent billed

96.6%

99.0%

98.4%

Amount of monthly rent deferred for the period presented, as a percentage of rent billed

0.0%

0.6%

0.0%

Combined rent collected and rent subject to deferred payment plans, as a percentage of rent billed

96.6%

99.6%

98.4%

Total portfolio average occupancy

96.0%

92.7%

95.3%

Total portfolio average effective monthly rent per unit

$1,154

$1,106

$1,142

Resident retention rate

49.7%

54.8%

46.4%

 


 

 

 

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

1Q 2021

2Q 2021 (2)

New Leases

6.8%

9.6%

Renewal Leases

4.8%

3.7%

Total

5.9%

4.6%

 

 

(1)

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.

 

(2)

For new leases and renewals commencing during 2Q 2021 that were signed as of April 27, 2021.

 

Value Add Program

We completed renovations on 142 units during the quarter ended March 31, 2021. From inception of our value add program in January 2018 through March 31, 2021, we completed renovations on 3,861 units, achieving a return on investment of 16.1% (18.5% on interior renovation costs) and an average monthly rental increase of 18.5%.

 

At-the-Market Offering

On November 13, 2020 we entered into an equity distribution agreement pursuant to which we may from time to time offer and sell shares of our common stock having an aggregate offering price of up to $150 million (the “ATM Program”) in negotiated transactions or transactions that are deemed to be “at the market” offerings. Under the ATM Program, we may also enter into one or more forward sale transactions for the sale of shares of our common stock on a forward basis. In the three months ended March 31, 2021, we entered into a forward sale transaction under the ATM Program for the forward sale of 2,000,000 shares of our common stock. We expect to physically settle the forward sale transaction by the maturity date (December 15, 2021) of the forward sale transaction. Assuming the forward sale transaction is physically settled in full utilizing the current forward sale price of $14.50 per share, net of sales commissions, we expect to receive net proceeds of approximately $29.0 million, subject to adjustment in accordance with the forward sale transaction.

 

Financial Flexibility

As of March 31, 2021, we had a total liquidity position of approximately $205.6 million, which includes unrestricted cash, additional capacity under our unsecured line of credit, and approximately $41.2 million of proceeds that we will receive upon settlement of forward sale agreements covering 2,900,000 shares of common stock.

 

Capital Expenditures

For the three months ended March 31, 2021, recurring capital expenditures for the total portfolio were $1.1 million, or $73 per unit.

 

Distributions

On March 15, 2021, our Board of Directors declared a quarterly cash dividend of $0.12 per share of our common stock, which was paid on April 23, 2021 to stockholders of record at the close of business on April 2, 2021.

 

2021 EPS and CFFO Guidance 

Given portfolio performance during the quarter ended March 31, 2021, IRT is updating its 2021 full year guidance. EPS per diluted share is projected to be in a range of $0.5 to $0.8. CFFO per diluted share, a non-GAAP financial measure, is projected to be in the range of $0.72 to $0.75 using our new definition of CFFO. Our previous guidance has been adjusted to conform to the current CFFO definition, which now includes the effect of stock compensation expense and amortization of deferred financing costs. A reconciliation of IRT's projected net income allocable to common shares to its projected CFFO per share is included below. Also included below are the primary assumptions underlying these estimates. See the schedules and definitions at the end of this release for further information regarding how IRT calculates CFFO and for management’s rationale for the usefulness of CFFO. 


 


 

 

 

 

 

Previous Guidance

Current Guidance

2021 Full Year EPS and CFFO Guidance (1)(2) 

Low 

High 

Low 

High 

Earnings per share

$0.04 

$0.08 

$0.05

$0.08 

Adjustments: 

 

 

 

 

Depreciation and amortization 

0.67

0.67 

0.67

0.67 

CORE FFO per share allocated to common shareholders 

$0.71

$0.75 

$0.72

$0.75 

 

 

(1)

This guidance, including the underlying assumptions presented in the table below, constitutes forward-looking information. Actual full year 2021 EPS and CFFO could vary significantly from the projections presented. See “Forward-Looking Statements” below. Our guidance is based on the key guidance assumptions detailed below. 

 

(2)

Per share guidance is based on 102.6 million weighted average shares and units outstanding. 

 

2021 Guidance Assumptions

Our key guidance assumptions for 2021 are enumerated below: 

 

Same Store Communities 

Previous 2021 Outlook

Current 2021 Outlook 

Number of properties/units 

54 properties / 14,955 units 

54 properties / 14,955 units 

Property revenue growth 

2.75% to 4.25% 

3.75% to 5.0% 

Controllable property operating expense growth 

2.0% to 3.0% 

3.0% to 4.0% 

Real estate tax and insurance expense increase 

7.0% to 9.0% 

7.0% to 8.0% 

Total operating expense growth 

4.0% to 5.25%

4.25% to 5.5%

Same store property NOI growth 

1.5% to 3.5% 

3.25% to 5.0% 

 

 

 

Corporate Expenses

 

 

General and administrative expenses

$15.5 to $17.0 million (1)

$16.5 to $18.0 million 

Property management expenses

$8.5 to $9.2 million (1)

$8.25 to $8.75 million

 

 

 

Interest expense

$34.0 to $35.5 million (1)

$34.0 to $35.5 million

 

 

 

Transaction/Investment Volume 

 

 

Acquisition volume

None assumed

$100 million to $200 million

Disposition volume 

None assumed

$0 million to $100 million

 

 

 

Capital Expenditures 

 

 

Recurring 

$7.0 to $8.0 million 

$7.0 to $7.5 million 

Value add & non-recurring 

$28.5 to $32.5 million 

$28.5 to $32.5 million 

 

 

(1)

During the three months ended March 31, 2021, we updated our definition of CFFO to include the effects of stock compensation expense and the amortization of deferred financing costs. As a result, we have updated our previous 2021 outlook to conform to the new definition. We previously highlighted the impact that this definition change would have on these line items. Please refer to footnotes 2 and 3 on page 10 of our Q4 and Full Year 2020 Supplemental dated February 10, 2021. In addition, please see the updated definition of CFFO within the definitions section of this release.

 

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, April 29, 2021 from the investor relations section of the IRT website at www.irtliving.com or by dialing 1.833.789.1330. 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, May 6, 2021 by dialing 1.800.585.8367, access code 1235436.

 

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, Dallas, Louisville, Memphis, Raleigh and Tampa. 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, 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 amount of the quarterly dividend described in this press release.

 

Independence Realty Trust, Inc. Contact

Edelman Financial Communications & Capital Markets

Ted McHugh and Lauren Torres

917-365-7979

IRT@edelman.com

 

 

 

 

 


 

 

Schedule I

Independence Realty Trust, Inc.

Selected Financial Information

(Dollars in thousands, except share and per share amounts)

(unaudited)

 

 

 

For the Three Months Ended

 

 

 

 

March 31,

2021

 

 

December 31,

2020

 

 

September 30,

2020

 

 

June 30,

2020

 

 

March 31,

2020

 

 

Selected Financial Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Statistics:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common shares

 

$

1,086

 

 

$

13,261

 

 

$

1,090

 

 

$

789

 

 

$

(372

)

 

Earnings (loss) per share -- diluted

 

$

0.01

 

 

0.14

 

 

$

0.01

 

 

$

0.01

 

 

$0.00

 

 

Rental and other property revenue

 

$

54,811

 

 

$

53,923

 

 

$

54,001

 

 

$

52,087

 

 

$

51,156

 

 

Property operating expenses

 

$

20,838

 

 

$

20,138

 

 

$

22,129

 

 

$

20,974

 

 

$

19,737

 

 

Net operating income

 

$

33,973

 

 

$

33,785

 

 

$

31,872

 

 

$

31,113

 

 

$

31,419

 

 

NOI margin

 

 

62.0

%

 

 

62.7

%

 

 

59.0

%

 

 

59.7

%

 

 

61.4

%

 

Adjusted EBITDA

 

$

26,389

 

 

$

28,534

 

 

$

27,081

 

 

$

25,643

 

 

$

24,081

 

 

CORE FFO per share (c)

 

$

0.18

 

 

$

0.22

 

 

$

0.20

 

 

$

0.19

 

 

$

0.19

 

 

Dividends per share

 

$

0.12

 

 

$

0.12

 

 

$

0.12

 

 

$

0.12

 

 

$

0.18

 

 

CORE FFO payout ratio

 

 

66.7

%

 

 

54.5

%

 

 

60.0

%

 

 

63.2

%

 

 

94.7

%

 

Portfolio Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total gross assets

 

$

1,970,979

 

 

$

1,962,895

 

 

$

1,914,900

 

 

$

1,916,424

 

 

$

1,949,494

 

 

Total number of properties

 

56

 

 

56

 

 

 

58

 

 

 

58

 

 

 

58

 

 

Total units

 

 

15,667

 

 

 

15,667

 

 

 

15,805

 

 

 

15,805

 

 

 

15,805

 

 

Period end occupancy

 

 

95.5

%

 

 

95.3

%

 

 

94.4

%

 

 

93.5

%

 

 

92.7

%

 

Total portfolio average occupancy

 

 

95.4

%

 

 

95.0

%

 

 

94.1

%

 

 

92.9

%

 

 

92.5

%

 

Total portfolio average effective monthly rent, per

   unit

 

$

1,142

 

 

$

1,136

 

 

$

1,118

 

 

$

1,108

 

 

$

1,100

 

 

Same store period end occupancy (a)

 

 

95.5

%

 

 

95.3

%

 

 

94.3

%

 

 

93.6

%

 

 

93.0

%

 

Same store portfolio average occupancy (a)

 

 

95.3

%

 

 

94.9

%

 

 

94.0

%

 

 

93.1

%

 

 

92.7

%

 

Same store portfolio average effective monthly rent,

   per unit (a)

 

$

1,129

 

 

$

1,121

 

 

$

1,111

 

 

$

1,107

 

 

$

1,097

 

 

Capitalization:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total debt

 

$

947,631

 

 

$

945,686

 

 

$

1,004,237

 

 

$

1,008,911

 

 

$

1,049,541

 

 

Common share price, period end

 

$

15.20

 

 

$

13.43

 

 

$

11.59

 

 

$

11.45

 

 

$

8.94

 

 

Market equity capitalization

 

$

1,561,165

 

 

$

1,376,283

 

 

$

1,107,144

 

 

$

1,093,822

 

 

$

853,600

 

 

Total market capitalization

 

$

2,508,796

 

 

$

2,321,969

 

 

$

2,111,381

 

 

$

2,102,733

 

 

$

1,903,141

 

 

Total debt/total gross assets

 

 

48.1

%

 

 

48.2

%

 

 

52.4

%

 

 

52.6

%

 

 

53.8

%

 

Net debt to Adjusted EBITDA (pro forma) (b)

 

 

8.2

x

 

 

8.2

x

 

9.1x

 

 

9.2x

 

 

 

9.0

x

 

Interest coverage

 

 

3.1

x

 

 

3.2

x

 

 

3.0

x

 

 

2.8

x

 

 

2.5

x

 

Common shares and OP Units:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding

 

 

102,033,733

 

 

 

101,803,762

 

 

 

94,823,806

 

 

 

94,741,146

 

 

 

94,691,806

 

 

OP units outstanding

 

 

674,515

 

 

 

674,517

 

 

 

701,986

 

 

 

789,134

 

 

 

789,134

 

 

Common shares and OP units outstanding

 

 

102,708,248

 

 

 

102,478,278

 

 

 

95,525,792

 

 

 

95,530,279

 

 

 

95,480,939

 

 

Weighted average common shares and units

 

 

102,353,380

 

 

 

95,529,788

 

 

 

95,227,176

 

 

 

95,224,855

 

 

 

91,737,113

 

 

 

 

(a)

Same store portfolio consists of 54 properties, which represent 14,995 units.

 

(b)

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 items impacting quarterly EBITDA. Actual net debt to Adjusted EBITDA for the five quarters ended March 31, 2021 was 8.9x, 8.3x, 9.3x, 9.7x, and 10.3x, respectively.

 

(c)

Reflects adjustment to prior periods to conform to our current definition of CFFO. See our definition of CFFO for additional discussion.

 

 

 

 


 

 

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 March 31,

 

 

 

2021

 

 

2020

 

Funds From Operations (FFO):

 

 

 

 

 

 

 

 

Net Income (loss)

 

$

1,093

 

 

$

(374

)

Adjustments:

 

 

 

 

 

 

 

 

Real estate depreciation and amortization

 

 

16,472

 

 

 

14,725

 

Funds From Operations

 

$

17,565

 

 

$

14,351

 

FFO per share

 

$

0.17

 

 

$

0.16

 

Core Funds From Operations (CFFO):

 

 

 

 

 

 

 

 

Funds From Operations

 

$

17,565

 

 

$

14,351

 

Adjustments:

 

 

 

 

 

 

 

 

Other depreciation and amortization

 

 

80

 

 

 

103

 

Abandoned deal costs

 

 

 

 

 

130

 

Casualty losses

 

 

359

 

 

 

 

Debt extinguishment costs included in net gains (losses) on sale of assets

 

 

 

 

 

 

Core Funds From Operations

 

$

18,004

 

 

$

14,584

 

CFFO per share

 

$

0.18

 

 

$

0.16

 

Weighted-average shares and units outstanding

 

 

102,353,380

 

 

 

91,737,113

 

 

 

 

 


 

 

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)

 

 

 

March 31,

2021

 

 

December 31,

2020

 

 

September 30,

2020

 

 

June 30,

2020

 

 

March 31,

2020

 

Reconciliation of same-store net operating income to net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same-store net operating income

 

$

31,923

 

 

$

32,027

 

 

$

29,997

 

 

$

29,723

 

 

$

30,330

 

Non same-store net operating income

 

 

2,050

 

 

 

1,758

 

 

 

1,875

 

 

 

1,390

 

 

 

1,089

 

Other revenue

 

 

301

 

 

 

165

 

 

 

199

 

 

 

181

 

 

 

194

 

Property management expenses

 

 

(1,943

)

 

 

(2,183

)

 

 

(2,078

)

 

 

(2,077

)

 

 

(2,156

)

General and administrative expenses

 

 

(5,942

)

 

 

(3,233

)

 

 

(2,912

)

 

 

(3,574

)

 

 

(5,376

)

Depreciation and amortization expense

 

 

(16,552

)

 

 

(15,396

)

 

 

(15,232

)

 

 

(15,231

)

 

 

(14,828

)

Interest expense

 

 

(8,385

)

 

 

(8,872

)

 

 

(8,917

)

 

 

(9,202

)

 

 

(9,497

)

Abandoned deal costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(130

)

Casualty losses

 

 

(359

)

 

 

(300

)

 

 

 

 

 

(411

)

 

 

 

Gain on sale (loss on impairment) of real estate assets, net

 

 

 

 

 

9,394

 

 

 

(1,840

)

 

 

 

 

 

 

Net income (loss)

 

$

1,093

 

 

$

13,360

 

 

$

1,092

 

 

$

799

 

 

$

(374

)

 

(a)Same store portfolio includes 54 properties, which represent 14,995 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:

 

March 31,

2021

 

 

December 31,

2020

 

 

September 30,

2020

 

 

June 30,

2020

 

 

March 31,

2020

 

 

Net income (loss)

 

$

1,093

 

 

$

13,360

 

 

$

1,092

 

 

$

799

 

 

$

(374

)

 

Add-Back (Deduct):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

16,552

 

 

 

15,396

 

 

 

15,232

 

 

 

15,231

 

 

 

14,828

 

 

Interest expense

 

 

8,385

 

 

 

8,872

 

 

 

8,917

 

 

 

9,202

 

 

 

9,497

 

 

Net loss on impairment (gain on sale) of real estate assets

 

 

 

 

 

(9,394

)

 

 

1,840

 

 

 

 

 

 

 

 

Abandoned deal costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

130

 

 

Casualty losses

 

 

359

 

 

 

300

 

 

 

 

 

 

411

 

 

 

 

 

Adjusted EBITDA

 

$

26,389

 

 

$

28,534

 

 

$

27,081

 

 

$

25,643

 

 

$

24,081

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST COST:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

$

8,385

 

 

$

8,872

 

 

$

8,917

 

 

$

9,202

 

 

$

9,497

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST COVERAGE:

 

 

3.1

x

 

 

3.2

x

 

 

3.0

x

 

 

2.8

x

 

 

2.5

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

Each of EBITDA and Adjusted EBITDA is a non-GAAP financial measure. 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. 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 Core FFO (“CFFO”), each of which is a non-GAAP financial measure, are additional appropriate measures of the operating performance of a REIT and us in particular. We compute FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), as net income or loss allocated to common shares (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. While our calculation of FFO is in accordance with NAREIT’s definition, it may differ from the methodology for calculating FFO utilized by other REITs and, accordingly, may not be comparable to FFO computations of such other REITs.

We updated our definition of CFFO during Q1 2021 to the definition described below. All prior periods have been adjusted to conform to the current CFFO definition.  

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 depreciation and amortization of other items not included in FFO, and other non-cash or non-operating gains or losses related to items such as casualty losses, abandoned deal costs and debt extinguishment costs from the determination of FFO.

Our calculation of CFFO may differ from the methodology used for calculating CFFO by 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 believe they are also useful to investors, because they facilitate an understanding of our operating performance after adjustment for certain non-cash or non-recurring items that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and 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 may provide us and our investors with an additional useful measure 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. Accordingly, FFO and CFFO do not measure whether cash flow is sufficient to fund all of our cash needs, including principal amortization and capital improvements. Neither FFO nor CFFO should be considered as an alternative to net income or any other GAAP measurement as an indicator of our operating performance or as an alternative to cash flow from operating, investing, and financing 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).

We present net debt because management believes it is a useful measure of our credit position and progress toward reducing leverage. The calculation is limited because we may not always be able to use cash to repay debt on a dollar for dollar basis.

 

As of

 

 

March 31,

2021

 

 

December 30,

2020

 

 

September 30,

2020

 

 

June 30,

2020

 

 

March 31,

2020

 

Total debt

$

947,631

 

 

$

945,686

 

 

$

1,004,237

 

 

$

1,008,911

 

 

$

1,049,541

 

Less: cash and cash equivalents

 

(8,653

)

 

 

(8,751

)

 

 

(9,891

)

 

 

(11,652

)

 

 

(57,436

)

Total net debt

$

938,978

 

 

$

936,935

 

 

$

994,346

 

 

$

997,259

 

 

$

992,105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same Store Portfolio Net Operating Income

We believe that Net Operating Income (“NOI”), a non-GAAP financial measure, is a useful measure of our operating performance. We define NOI as total property revenues less total property operating expenses, excluding depreciation and amortization, casualty related costs, property management expenses, general administrative expenses, interest expense, and net gains on sale of assets.

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. We use NOI to evaluate our performance on a same store and non same store basis because NOI measures the core operations of property performance by excluding corporate level 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

 

 

March 31,

2021

 

 

December 30,

2020

 

 

September 30,

2020

 

 

June 30,

2020

 

 

March 31,

2020

 

Total assets

$

1,728,016

 

 

$

1,734,897

 

 

$

1,700,428

 

 

$

1,708,912

 

 

$

1,757,138

 

Plus: accumulated depreciation

 

223,187

 

 

 

208,618

 

 

 

194,645

 

 

 

187,758

 

 

 

172,789

 

Plus: accumulated amortization

 

19,776

 

 

 

19,380

 

 

 

19,827

 

 

 

19,754

 

 

 

19,567

 

Total gross assets

$

1,970,979

 

 

$

1,962,895

 

 

$

1,914,900

 

 

$

1,916,424

 

 

$

1,949,494

 

 

 

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