Market Overview

Silver Bay Realty Trust Corp. Announces Agreement to Be Acquired by Tricon Capital Group Inc. in $1.4 Billion All-Cash Transaction; Reports Strong Fourth Quarter and Full Year 2016 Financial Results

Share:





Silver Bay Realty Trust Corp. (NYSE:SBY) (the "Company" or "Silver
Bay"), a single-family rental real estate investment trust ("REIT"),
today announced that its Board of Directors has unanimously approved and
Silver Bay has entered into a definitive agreement pursuant to which
Tricon Capital Group Inc. will acquire Silver Bay in a transaction
valued at approximately $1.4 billion and announced its operating and
financial results for the quarter and year ended December 31, 2016.
Silver Bay's stockholders will receive $21.501 per share in
cash for each outstanding share of common stock held immediately prior
to the closing of the transaction. This purchase price represents a 19%
premium to Silver Bay's closing price on February 24, 2017 of $18.01 and
a 24% premium to the stock's 90 day trailing average price as of
February 24, 2017.2 In addition, Tricon Capital Group Inc.
will assume or repay a total of approximately $600.0 million of Silver
Bay's debt (net of cash on hand).

"This transaction delivers significant and immediate value to our
stockholders," said Thomas W. Brock, Chief Executive Officer of Silver
Bay. "We have continually evaluated the most prudent way to drive
sustainable, long-term capital appreciation and we believe this
transaction is the best opportunity to return maximum value to our
stockholders."

Mr. Brock continued, "Over the past year, we have been making excellent
strides in driving efficiency across our operating platform. We closed
out the year with the best quarter in our company's history, including a
96.7% occupancy rate, strong rental increases on both re-leases and
renewals, a Same-Home Core NOI Margin of 60.7% and record Core FFO,
which I credit to the dedication and focus of our Silver Bay team. Our
well-crafted portfolio of single family properties and the recent strong
performance across our platform will serve as a great complement to
Tricon Capital Group Inc.'s business as the single family rental
industry continues to evolve and consolidate."

The transaction, which has been unanimously approved by the boards of
directors of both companies, is subject to customary closing conditions,
including approval by the stockholders of Silver Bay, and is expected to
close in the second quarter of 2017.

Goldman, Sachs & Co. acted as sole financial advisor to Silver Bay on
the transaction. Orrick, Herrington & Sutcliffe LLP acted as legal
advisor to Silver Bay.

______________________________

1   All currency references are in U.S. Dollars
2 Represents the volume weighted average price

Financial Results

The following table provides a summary of Silver Bay's financial results
for the three months and years ended December 31, 2016 and 2015,
respectively (unaudited):

  Three Months Ended December 31,  

Year Ended December 31,

2016   2015

    2016    

 

    2015    

 
Net income (loss) $ 2,862 $ (798 ) $ (2,614 ) $ (9,952 )
Net income (loss) attributable to common stockholders $ 2,667 $ (777 ) $ (2,563 ) $ (9,475 )
Net income (loss) per share attributable to common shares - diluted $ 0.07 $ (0.02 ) $ (0.07 ) $ (0.26 )
Core FFO per share (1) $ 0.24 $ 0.20 $ 0.82 $ 0.66
NOI (1) $ 19,733 $ 17,753 $ 73,001 $ 62,905
Core NOI Margin (1) 61.4 % 58.7 % 58.1 % 56.0 %
Same-Home NOI (1) $ 13,008 $ 11,453 $ 48,401 $ 44,023
Same-Home Core NOI Margin (1) 60.7 % 56.8 % 57.3 % 55.2 %
(1)   NOI, Core NOI Margin, Same-Home NOI, Same-Home Core NOI Margin and
Core FFO per share are non-GAAP financial measures and
reconciliations are included in the definitions and reconciliations
of financial and operating measures in the unaudited supplemental
financial and operating data section of this release.

Fourth Quarter 2016 Financial Results

Silver Bay reported total revenue of $32.5 million for the fourth
quarter of 2016, a 5.9% increase compared to total revenue of $30.6
million for the fourth quarter of 2015. This increase was primarily due
to increases in the Company's rental rates and occupancy rate. The
Company owned 9,044 properties as of December 31, 2016, compared to
9,022 properties as of December 31, 2015. Net income attributable to
common stockholders for the fourth quarter of 2016 was $2.7 million, or
$0.07 per diluted common share, compared to net loss attributable to
common stockholders for the fourth quarter of 2015 of $0.8 million, or
$0.02 per basic and diluted common share.

The Company reported net operating income ("NOI") of $19.7 million for
the fourth quarter of 2016, an 11.2% increase compared to NOI of $17.8
million for the fourth quarter of 2015. Core NOI Margin improved 270
basis points to 61.4% in the fourth quarter of 2016 as compared to the
same period a year ago. The increase is primarily due to growth in total
revenue. Same-Home NOI increased to $13.0 million for the fourth quarter
of 2016, a 13.6% increase compared to Same-Home NOI of $11.5 million for
the fourth quarter of 2015. Same-Home NOI Margin improved 390 basis
points to 60.7% in the fourth quarter of 2016 as compared to the same
period a year ago. The increase in Same-Home NOI is primarily due to an
increase in Same-Home total revenue and, to a lesser extent, a decrease
in Same-Home property operating expenses. Core funds from operations
("Core FFO") for the fourth quarter of 2016 was $9.1 million, or $0.24
per share, a 20.0% increase on a per share basis compared to Core FFO
for the fourth quarter of 2015 of $7.6 million, or $0.20 per share. NOI,
Same-Home NOI and Core FFO are non-GAAP financial measures.
Reconciliations of net income (loss) to NOI, Same-Home NOI and Core FFO
are included in the unaudited supplemental financial and operating data
accompanying this press release.

Full Year 2016 Financial Results

Silver Bay reported total revenue of $126.6 million for the year ended
December 31, 2016, an 11.4% increase compared to total revenue of $113.7
million for the year ended December 31, 2015. The increase in total
revenue for the year ended December 31, 2016 over the prior year was
primarily due to an increase in the number of occupied homes during the
year ended December 31, 2016 as well as increases in the Company's
rental rates and occupancy rate. Net loss attributable to common
stockholders for the year ended December 31, 2016 was $2.6 million, or
$0.07 per basic and diluted common share, as compared to net loss
attributable to common stockholders for the year ended December 31, 2015
of $9.5 million, or $0.26 per basic and diluted common share.

The Company reported NOI of $73.0 million for the year ended
December 31, 2016, a 16.0% increase compared to NOI of $62.9 million for
the year ended December 31, 2015. The increase is primarily due to
growth in total revenue. Same-Home NOI increased to $48.4 million for
the year ended December 31, 2016, a 9.9% increase compared to Same-Home
NOI of $44.0 million for the year ended December 31, 2015. The increase
in Same-Home NOI is primarily due to an increase in Same-Home total
revenue. Core FFO for the year ended December 31, 2016 was $31.2
million, or $0.82 per share, a 24.2% increase on a per share basis
compared to Core FFO for the year ended December 31, 2015 of $25.4
million, or $0.66 per share.

Portfolio and Operating Metrics Summary

The following table provides a summary of Silver Bay's portfolio and
operating metrics for the fourth quarter of 2016 and 2015, respectively:

  As of December 31, 2016   As of December 31, 2015
Single-family properties owned:
Aggregate portfolio 9,044 9,022
Same-Home portfolio 5,780 5,780
Occupancy rate:
Aggregate portfolio 96.7 % 95.8 %
Same-Home portfolio 96.7 % 95.7 %
Average monthly rent:
Aggregate portfolio $ 1,205 $ 1,167
Same-Home portfolio $ 1,264 $ 1,216
 
Three Months Ended Three Months Ended
December 31, 2016 December 31, 2015
Average change in rent for re-leases:
Aggregate portfolio 6.3 % 4.1 %
Same-Home portfolio 6.1 % 4.1 %
Average change in rent for renewals:
Aggregate portfolio 3.4 % 3.5 %
Same-Home portfolio 3.4 % 3.5 %
Trailing twelve-month turnover 29.5 % 27.6 %
Retention rate 79.1 % 80.3 %
 

Aggregate Metrics

Silver Bay reported an aggregate occupancy rate of 96.7% as of
December 31, 2016, an increase from 95.8% in the fourth quarter of 2015.
A summary of Silver Bay's occupancy rates by market is included in the
unaudited supplemental financial and operating data accompanying this
press release.

Silver Bay reported an average monthly rent for the aggregate portfolio
of $1,205 as of December 31, 2016, compared to an average monthly rent
of $1,167 as of December 31, 2015. The Company experienced re-lease rate
increases of 6.3% and renewal rate increases of 3.4% during the fourth
quarter of 2016 compared to 4.1% and 3.5%, respectively, during the
fourth quarter of 2015.

Silver Bay's trailing twelve-month turnover increased 190 basis points
to 29.5% as of December 31, 2016 from 27.6% as of December 31, 2015. The
retention rate decreased 120 basis points to 79.1% during the fourth
quarter of 2016 from 80.3% in the fourth quarter of 2015.

Same-Home Metrics

Silver Bay reported a Same-Home occupancy rate of 96.7% as of
December 31, 2016, a 100 basis point increase compared to a year ago.
Same-Home average monthly rent increased 3.9% to $1,264 as of
December 31, 2016, compared to an average monthly rent of $1,216 as of
December 31, 2015. Additional detail on the Company's Same-Home
portfolio is included in the unaudited supplemental financial and
operating data accompanying this press release.

Investment Activity

During the fourth quarter of 2016, the Company acquired 329
single-family homes with an aggregate purchase price of $42.4 million,
including a portfolio of 322 properties acquired on October 1, 2016 for
an aggregate purchase price of $41.5 million.

During the fourth quarter of 2016, the Company sold 134 single-family
homes for total gross proceeds of $29.4 million with a net gain from
these sales totaling $4.5 million.

Dividend Declaration

The Company's Board of Directors declared a quarterly dividend of $0.13
per share of common stock for the quarter ended December 31, 2016. The
dividend was paid January 13, 2017 to common stockholders of record at
the close of business on December 30, 2016. On February 27, 2017, our
board of directors declared a quarterly dividend of $0.13 per share
payable on April 14, 2017, to stockholders of record on April 3, 2017.

Liquidity and Capital Resources

The Company's liquidity and capital resources as of December 31, 2016
consisted of cash of $52.3 million and escrow deposits of $16.9 million,
which consists of cash held in reserve at financial institutions as
required by its debt agreements of $14.8 million.

Cancelling Fourth Quarter 2016 Conference Call

In light of the announced agreement with Tricon Capital Group Inc.,
Silver Bay has cancelled its fiscal fourth quarter and year end 2016
conference call with analysts and investors previously scheduled for
Tuesday, February 28, 2017 at 8:30 a.m. Eastern Time.

About Silver Bay Realty Trust Corp.

Silver Bay Realty Trust Corp. is an internally managed Maryland
corporation focused on the acquisition, renovation, leasing and
management of single-family properties for rental income and long-term
capital appreciation. Silver Bay owns single-family properties in
Arizona, California, Florida, Georgia, Nevada, North Carolina, Ohio,
South Carolina and Texas. Silver Bay has elected to be taxed as a REIT
for U.S. federal tax purposes.

About Tricon Capital Group Inc.

Tricon (TSX:TCN) is a principal investor and asset manager focused on
the residential real estate industry in North America with approximately
$3.0 billion (C$4.0 billion) of assets under management. Tricon owns, or
manages on behalf of third-party investors, a portfolio of investments
in land and homebuilding assets, single-family rental homes,
manufactured housing communities and multi-family development projects.
Its business objective is to invest for investment income and capital
appreciation through our Principal Investment business and to earn fee
income through our Private Funds and Advisory business. Since its
inception in 1988, Tricon has invested in real estate and development
projects valued at approximately $18 billion. More information about
Tricon is available at www.triconcapital.com.

Notice Regarding Non-GAAP Financial Measures

In addition to the Company's net income (loss) which is presented in
accordance with GAAP, the Company also presents certain supplemental
non-GAAP performance measures. These measures are not to be considered
more relevant or accurate than the performance measures presented in
accordance with GAAP. In compliance with applicable rules of the
Securities and Exchange Commission ("SEC"), the Company's non-GAAP
measures are reconciled to net income (loss), the most directly
comparable GAAP performance measure, as further set forth in the
definitions and reconciliations of financial and operating measures
included in the unaudited supplemental financial and operating data. As
with other non-GAAP performance measures, neither the SEC nor any other
regulatory body has passed judgment on these non-GAAP performance
measures. NOI, Core NOI Margin, FFO and Core FFO are non-GAAP financial
measures the Company believes, when considered with the financial
statements determined in accordance with GAAP, are helpful to investors
in understanding its performance as a REIT.

Important Information About the Transaction and Where to Find It

In connection with the proposed transaction, the Company plans to file a
proxy statement (the "Proxy Statement") with the Securities and Exchange
Commission ("SEC"), in connection with the solicitation of proxies for a
meeting of Silver Bay's stockholders to be called at a future date (the
"meeting"). Promptly after filing its Proxy Statement in definitive form
with the SEC, the Company will mail or otherwise furnish the Proxy
Statement to each stockholder entitled to vote at the meeting. Stockholders
are urged to read the Proxy Statement (including any amendments or
supplements thereto) and any other relevant documents that the Company
will file with the SEC when they become available because they will
contain important information about the proposed transaction and related
matters.
Stockholders may obtain, free of charge, copies of the
Proxy Statement (if and when available) and any other documents filed by
the Company with the SEC in connection with the transaction at the SEC's
website (http://www.sec.gov),
from the Company's website at www.silverbayrealtytrustcorp.com
or by contacting the investor relations department of the Company at:

Silver Bay Realty Trust Corp., Attn: Investor Relations, 3300 Fernbrook
Lane North, Suite 210, Plymouth, MN 55447, telephone (952) 358-4400.

Participation in the Solicitation

The Company and its directors, executive officers and certain other
members of management and employees of the Company may be deemed to be
"participants" in the solicitation of proxies from the Company's
stockholders in connection with the transaction. Information regarding
the interests of the persons who may, under the rules of the SEC, be
considered participants in the solicitation of the Company's
stockholders in connection with the proposed transaction, which may be
different than those of the Company's stockholders generally, will be
set forth in the Proxy Statement and the other relevant documents to be
filed with the SEC. Company stockholders can find information about the
Company and its directors and executive officers and their ownership of
the Company's common stock in the Company's annual report on Form 10-K
for the fiscal year ended December 31, 2015 which was filed with the SEC
on February 26, 2016, and in its definitive proxy statement for its most
recent annual meeting of stockholders, which was filed with the SEC on
April 4, 2016, and in Forms 4 of directors and executive officers filed
with the SEC. Additional information regarding the interests of such
individuals in the transaction will be included in the Proxy Statement
relating to the transaction when it is filed with the SEC.

Forward-Looking Statements

This press release contains forward-looking statements within the
meaning of the federal securities laws. Forward-looking statements
relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends and similar expressions
concerning matters that are not historical facts. In some cases, readers
can identify forward-looking statements by the use of forward-looking
terminology such as "may," "will," "should," "expects," "intends,"
"plans," "anticipates," "believes," "estimates," "predicts," or
"potential" or the negative of these words and phrases or similar words
or phrases which are predictions of or indicate future events or trends
and which do not relate solely to historical matters. Readers can also
identify forward-looking statements by discussions of strategy, plans or
intentions. Examples of forward-looking statements include statements
about: the proposed transaction whereby Tricon Capital Group Inc. will
acquire Silver Bay; Silver Bay's projected financial and operating
results; Silver Bay's ability to lease and operate acquired properties
and to improve its operating performance, including Silver Bay's
abilities and projections related to turnover rates and time frames,
operating costs, rent increases, and occupancy rates; intentions related
to asset sales, including pricing, volume and identity of such assets;
Silver Bay's intentions related to its capital allocation strategy,
including through the use of share repurchases and acquisitions;
expectations of portfolio size; the impact of seasonality on Silver
Bay's results; estimates relating to Silver Bay's ability to make
distributions to its stockholders in the future; market trends in Silver
Bay's industry, such as homeownership rates and the impact of such
trends on its operations; future real estate values and prices; and the
general economy and its impact on Silver Bay's results.

The forward-looking statements contained in this press release reflect
Silver Bay's current views about future events and are subject to
numerous known and unknown risks, uncertainties, assumptions and changes
in circumstances that may cause Silver Bay's actual results to differ
significantly from those expressed or implied in any forward-looking
statement. Silver Bay is not able to predict all of the factors that may
affect future results. Readers should not rely on any of these
forward-looking statements. They are neither statements of historical
fact nor guarantees or assurances of future performance. Important
factors that could cause actual results to differ materially from those
in the forward-looking statements include national, international,
regional or local economic, business, competitive, market and regulatory
conditions and the following: those factors described in the discussion
on risk factors in Part I, Item 1A, "Risk Factors", Part I, Item 1A
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" and Part II, Item 7A "Quantitative and Qualitative
Disclosures about Market Risk" in the Company's Annual Report on
Form 10-K and other risks and uncertainties detailed in Silver Bay's
other reports and filings with the SEC; a delay in or failure to
complete the proposed acquisition of Silver Bay by Tricon Capital Group
Inc.; defaults on, early terminations of or non-renewal of leases by
residents; resident turnover or turnover costs; Silver Bay's ability to
maintain occupancy levels and leasing traffic or to attract and retain
qualified residents in light of increased competition in the leasing
market for quality residents, the relatively short duration of leases,
inadequate marketing, reputational damage or other reasons; Silver Bay's
ability to control or reduce operating expenses, including repairs and
maintenance expense and other costs such as real estate taxes,
homeowners' association fees, insurance and other costs outside the
Company's control for reasons including damage to properties due to
storms, other natural causes or residents and other reasons; Silver
Bay's ability to successfully operate its properties; Silver Bay's
ability to maintain rents at levels that are sufficient to keep pace
with rising costs of operations; Silver Bay's ability to dispose of
assets at attractive pricing levels; the amount of capital available for
share repurchases and other purposes; Silver Bay's ability to implement
and manage its service technician initiatives or the impact of such
initiatives to reduce maintenance, turnover and other expenses as
predicted; Silver Bay's ability to obtain financing arrangements; Silver
Bay's failure to meet the conditions to draw under the revolving credit
facility; the Company's ability to perform under the covenants of its
revolving credit facility and securitization loan; general volatility of
the markets in which it participates; interest rates and the market
value of Silver Bay's assets; the impact of changes in governmental
regulations, tax law and rates, and similar matters; difficulties in
identifying properties to acquire and completing acquisitions; increased
time and/or expense to gain possession and renovate properties; Silver
Bay's dependence on key personnel to carry its business and investment
strategies and its ability to hire and retain skilled managerial,
investment, financial, and operational personnel, and the performance of
vendors and service providers, including third-party management
professionals, maintenance providers, leasing agents, and property
managers; and Silver Bay's ability to remain qualified as a REIT.

The forward-looking statements in this press release represent Silver
Bay's views as of the date of this press release. Subsequent events and
developments could cause these views to change. However, while Silver
Bay may elect to update these forward-looking statements at some point
in the future, Silver Bay has no current intention of doing so except to
the extent required by applicable laws. Readers should, therefore, not
rely on these forward-looking statements as representing Silver Bay's
views as of any date subsequent to the date of this press release. All
subsequent written and oral forward looking statements concerning Silver
Bay or matters attributable to Silver Bay or any person acting on its
behalf are expressly qualified in their entirety by the cautionary
statements above.

Additional Information

Stockholders of Silver Bay, and other interested persons, may find
additional information regarding the Company at the SEC's website at www.sec.gov
or by directing requests to: Silver Bay Realty Trust Corp., Attn:
Investor Relations, 3300 Fernbrook Lane North, Suite 210, Plymouth, MN
55447, telephone (952) 358-4400.

SILVER BAY REALTY TRUST CORP.

CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)

(UNAUDITED)

   
December 31, 2016 December 31, 2015
Assets
Investments in real estate:
Land and land improvements $ 216,956 $ 220,110
Building and improvements 992,867   989,574  
1,209,823 1,209,684
Accumulated depreciation (106,463 ) (74,907 )
Investments in real estate, net 1,103,360 1,134,777
Assets held for sale 16,543 11,184
Cash 52,279 29,028
Escrow deposits 16,858 15,472
Resident security deposits 12,992 12,521
Other assets 16,529   13,298  
Total assets $ 1,218,561   $ 1,216,280  
 
Liabilities and Equity
Liabilities:
Revolving credit facility $ 352,799 $ 326,472
Securitization loan, net 296,782 295,741
Accounts payable and accrued expenses 17,862 16,752
Resident prepaid rent and security deposits 15,237   14,462  
Total liabilities 682,680   653,427  
10% cumulative redeemable preferred stock at liquidation value,
$0.01 par; 50,000,000 shares authorized, 1,000 shares issued and
outstanding
1,000 1,000
Equity:
Stockholders' equity:
Common stock $0.01 par; 450,000,000 shares authorized; 35,380,034
and 36,063,187, respectively, shares issued and outstanding
352 359
Additional paid-in capital 643,633 651,987
Accumulated other comprehensive income (loss) 2,841 (1,613 )
Cumulative deficit (143,679 ) (121,620 )
Total stockholders' equity 503,147 529,113
Noncontrolling interests - Operating Partnership 31,734   32,740  
Total equity 534,881   561,853  

Total liabilities and equity

$ 1,218,561   $ 1,216,280  
 

SILVER BAY REALTY TRUST CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)

(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)

(UNAUDITED)

   
Three Months Ended Year Ended
December 31, December 31,
2016   2015 2016   2015
Revenue:
Rental revenue $ 31,649 $ 29,975 $ 123,544 $ 111,159
Other revenue 801   666   3,091   2,535  
Total revenue 32,450 30,641 126,635 113,694
Expenses:
Property operating and maintenance 5,518 5,627 23,393 22,106
Real estate taxes 4,188 3,983 17,681 15,847
Homeowners' association fees 407 447 1,665 1,912
Property management 2,604 2,831 10,895 11,093
Depreciation and amortization 9,353 10,115 37,291 35,189
Portfolio acquisition expense 403 18 526 2,064
General and administrative 3,353 3,991 14,457 15,915
Share-based compensation 658 718 2,667 2,613
Severance and other 1,977
Interest expense 7,020 5,968 26,113 21,275
Impairment of real estate 601   49   1,105   95  
Total expenses 34,105   33,747   137,770   128,109  
Loss before other income (expense), income taxes and
non-controlling interests
(1,655 ) (3,106 ) (11,135 ) (14,415 )
Other income (expense):
Net gain on disposition of real estate 4,499 1,724 10,657 4,044
Adjustments for derivative instruments, net 157 (51 ) 44 (51 )
Other expense (272 ) (270 ) (1,211 ) (288 )
Total other income (expense) 4,384   1,403   9,490   3,705  
Income (loss) before income taxes and non-controlling interests 2,729 (1,703 ) (1,645 ) (10,710 )
Income tax (expense) benefit, net 133   905   (969 ) 758  
Net income (loss) 2,862 (798 ) (2,614 ) (9,952 )
Net (income) loss attributable to noncontrolling interests -
Operating Partnership
(170 ) 46   151   577  
Net income (loss) attributable to controlling interests 2,692 (752 ) (2,463 ) (9,375 )
Preferred stock distributions (25 ) (25 ) (100 ) (100 )
Net income (loss) attributable to common stockholders $ 2,667   $ (777 ) $ (2,563 ) $ (9,475 )
Income (loss) per share - basic
Net income (loss) attributable to common shares $ 0.08   $ (0.02 ) $ (0.07 ) $ (0.26 )
Weighted average common shares outstanding 35,380,056   36,069,198   35,557,636   36,209,999  
Income (loss) per share - diluted
Net income (loss) attributable to common shares and units $ 0.07   $ (0.02 ) $ (0.07 ) $ (0.26 )
Weighted average common shares and units outstanding 37,758,743   36,069,198   35,557,636   36,209,999  
 

SILVER BAY REALTY TRUST CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)

(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)

(UNAUDITED)

   
Three Months Ended Year Ended
December 31, December 31,
2016   2015 2016   2015
Comprehensive Income (Loss):
Net income (loss) $ 2,862 $ (798 ) $ (2,614 ) $ (9,952 )
Other comprehensive income (loss):
Net change in fair value of cash flow hedges 4,428 (84 ) 4,147 (1,587 )
Losses reclassified into earnings from other comprehensive income
(loss)
59   60   307   60  
Other comprehensive income (loss) 4,487   (24 ) 4,454   (1,527 )
Comprehensive income (loss) 7,349 (822 ) 1,840 (11,479 )
Comprehensive income (loss) attributable to noncontrolling
interests- Operating Partnership
(436 ) 138   (109 ) 669  
Comprehensive income (loss) attributable to controlling interests $ 6,913   $ (684 ) $ 1,731   $ (10,810 )
 

SILVER BAY REALTY TRUST CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015

(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)

(UNAUDITED)

           
Common Stock
Shares   Par Value

Amount

  Additional

Paid-In

Capital

Accumulated Other Comprehensive Income (Loss) Cumulative

Deficit

Total

Stockholders'

Equity

Noncontrolling

Interests -

Operating

Partnership

Total

Equity

Balance at January 1, 2015 36,711,694 $ 366 $ 660,776 $ (86 ) $ (94,593 ) $ 566,463 $ 34,432 $ 600,895
Non-cash equity awards, net 132,932 1 2,522 2,523 2,523
Repurchase and retirement of common stock (781,439 ) (8 ) (12,426 ) (12,434 ) (12,434 )
Dividends declared (17,652 ) (17,652 ) (17,652 )
Net loss (9,375 ) (9,375 ) (577 ) (9,952 )
Net change in fair value of cash flow hedges (1,587 ) (1,587 ) (1,587 )
Losses reclassified into earnings from other comprehensive income
(loss)
60 60 60
Adjustment to noncontrolling interests - Operating Partnership     1,115       1,115   (1,115 )  
Balance at December 31, 2015 36,063,187 $ 359 $ 651,987 $ (1,613 ) $ (121,620 ) $ 529,113 $ 32,740 $ 561,853
Non-cash equity awards, net 132,089 1 2,576 2,577 2,577
Repurchase and retirement of common stock (815,242 ) (8 ) (11,785 ) (11,793 ) (11,793 )
Dividends declared (19,596 ) (19,596 ) (19,596 )
Net loss (2,463 ) (2,463 ) (151 ) (2,614 )
Net change in fair value of cash flow hedges 4,147 4,147 4,147
Losses reclassified into earnings from other comprehensive income
(loss)
307 307 307
Adjustment to noncontrolling interests - Operating Partnership     855       855   (855 )  
Balance at December 31, 2016 35,380,034   $ 352   $ 643,633   $ 2,841   $ (143,679 ) $ 503,147   $ 31,734   $ 534,881  
 

SILVER BAY REALTY TRUST CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(AMOUNTS IN THOUSANDS)

(UNAUDITED)

 
Year Ended December 31,
2016   2015
Cash Flows From Operating Activities:
Net loss $ (2,614 ) $ (9,952 )
Adjustments to reconcile net loss to net cash provided by operating
activities:
Depreciation and amortization 37,291 35,189
Non-cash share-based compensation 2,577 2,523
Losses reclassified into earnings from other comprehensive income
(loss)
307 60
Amortization and write-off of deferred financing costs 4,597 4,668
Amortization of discount on securitization loan 301 301
Bad debt expense 1,002 1,426
Net gain on disposition of real estate (10,657 ) (4,044 )
Income tax valuation allowance reversal 941
Impairment of real estate 1,105 95
Other 611 471
Net change in assets and liabilities:
Decrease in escrow cash for operating activities and debt reserves 467 3,766
Increase in other assets (5,008 ) (7,505 )
Increase in accounts payable, accrued expenses, and prepaid rent 2,252   3,208  
Net cash provided by operating activities 32,231   31,147  
Cash Flows From Investing Activities:
Purchase of investments in real estate (44,037 ) (273,266 )
Capital improvements of investments in real estate (14,498 ) (25,651 )
(Increase) decrease in escrow cash for investing activities (77 ) 972
Proceeds from disposition of real estate 58,149 29,223
Other   (43 )
Net cash used in investing activities (463 ) (268,765 )
Cash Flows From Financing Activities:
Payments on securitization loan (1,514 ) (7,085 )
Proceeds from revolving credit facility 47,819 281,963
Payments on revolving credit facility (21,493 ) (22,587 )
Deferred financing costs paid (48 ) (5,783 )
Purchase of interest rate cap agreements (30 ) (2,250 )
Change in interest rate swap collateral (1,776 )
Repurchase and retirement of common stock (11,793 ) (12,434 )
Dividends paid (19,682 ) (15,032 )
Net cash (used in) provided by financing activities (8,517 ) 216,792  
Net change in cash 23,251 (20,826 )
Cash at beginning of period 29,028   49,854  
Cash at end of period $ 52,279   $ 29,028  
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized $ 20,645   $ 15,974  
Cash paid for taxes $ 227   $ 181  
Increase (decrease) in fair value of cash flow hedges $ 4,147   $ (1,587 )
Non-cash investing and financing activities:
Common stock and unit dividends declared, but not paid $ 4,869   $ 4,978  
Interest rate swap contingent consideration 1,184    
Capital improvements in accounts payable $ 442   $ 597  
 

SILVER BAY REALTY TRUST CORP.

PORTFOLIO SUMMARY OF SINGLE-FAMILY PROPERTIES

AS OF DECEMBER 31, 2016

         
Aggregate Investment Average Investment

 

 

Number of in Real Estate in Real Estate

Average Age

Average Square

Market Properties (in thousands) Per Property

(in years)(1)

Footage
Atlanta 2,949 $ 351,910 $ 119,332 22.8 1,809
Phoenix 1,422 203,764 143,294 28.2 1,635
Tampa 1,136 164,859 145,122 28.5 1,622
Charlotte (2) 689 86,223 125,142 16.6 1,644
Orlando 522 71,283 136,557 28.8 1,501
Dallas 511 69,092 135,209 25.1 1,619
Jacksonville 451 59,680 132,328 28.4 1,536
Northern CA (3) 381 73,112 191,895 48.3 1,398
Las Vegas 290 41,409 142,790 20.7 1,717
Columbus 284 33,381 117,539 39.6 1,414
Tucson 209 17,685 84,617 44.0 1,330
Southeast FL (4) 200   37,425   187,125   50.0   1,349
Totals 9,044   $ 1,209,823   $ 133,771   27.3   1,650
 
    (1)   As of December 31, 2016, approximately 2% of the Company's
properties were less than 10 years old, 39% were between 10 and 20
years old, 20% were between 20 and 30 years old, 19% were between 30
and 40 years old, 11% were between 40 and 50 years old, and 9% were
more than 50 years old. Average age is an annual calculation.
(2) Charlotte market includes properties in South Carolina due to their
proximity to Charlotte, North Carolina.
(3) Northern California market currently consists of Contra Costa, Napa
and Solano counties.
(4) Southeast Florida market currently consists of Miami-Dade, Broward
and Palm Beach counties.
 

SILVER BAY REALTY TRUST CORP.

FINANCIAL AND OPERATING RESULTS OF AGGREGATE PORTFOLIO

(AMOUNTS IN THOUSANDS EXCEPT PROPERTY AND PER HOME DATA)

 

The following table summarizes the Company's aggregate portfolio
financial results for the three months and years ended ended
December 31, 2016 and 2015:

   
Three Months Ended December 31, Year Ended December 31,
2016   2015 2016   2015
Total revenue $ 32,450 $ 30,641 $ 126,635 $ 113,694
Property operating expenses:
Property operating and maintenance 5,518 5,627 23,393 22,106
Real estate taxes 4,188 3,983 17,681 15,847
Homeowners' association fees 407 447 1,665 1,912
Property management 2,604   2,831   10,895   11,093  
Total property operating expenses $ 12,717   $ 12,888   $ 53,634   $ 50,958  
NOI $ 19,733 $ 17,753 $ 73,001 $ 62,905
Core NOI Margin 61.4 % 58.7 % 58.1 % 56.0 %
Turnover 6.6 % 6.6 % 29.5 % 27.6 %
Stabilized capital expenditures $ 1,652 $ 2,565 $ 7,630 $ 8,212
Stabilized capital expenditure per home $ 183 $ 284 $ 844 $ 910
 

The following table summarizes the occupancy status of the Company's
properties as of December 31, 2016:

Market   Number of
Properties
  Properties
Occupied
  Properties Vacant   Aggregate
Portfolio
Occupancy
Rate
  Average
Monthly
Rent
Atlanta 2,949 2,846 103 96.5 % $ 1,119
Phoenix 1,422 1,390 32 97.7 % 1,143
Tampa 1,136 1,089 47 95.9 % 1,347
Charlotte 689 667 22 96.8 % 1,113
Orlando 522 500 22 95.8 % 1,220
Dallas 511 494 17 96.7 % 1,336
Jacksonville 451 437 14 96.9 % 1,175
Northern CA 381 373 8 97.9 % 1,734
Las Vegas 290 288 2 99.3 % 1,229
Columbus 284 278 6 97.9 % 1,099
Tucson 209 203 6 97.1 % 855
Southeast FL 200   184   16   92.0 % 1,606
Totals 9,044   8,749   295   96.7 % $ 1,205
 

SILVER BAY REALTY TRUST CORP.

FINANCIAL AND OPERATING RESULTS OF SAME-HOME PORTFOLIO

(AMOUNTS IN THOUSANDS EXCEPT PROPERTY AND PER HOME DATA)

 

The following table summarizes the Company's Same-Home portfolio
financial results of 5,780 properties for the three months and
years ended December 31, 2016 and 2015:

   
Three Months Ended December 31, Year Ended December 31,
2016   2015 2016   2015
Same-Home total revenue $ 21,622 $ 20,415 $ 85,162 $ 80,652
Same-Home property operating expenses:
Property operating and maintenance 3,828 4,048 16,399 16,249
Real estate taxes 2,733 2,727 11,846 11,079
Homeowners' association fees 316 341 1,263 1,516
Property management 1,737   1,846   7,253   7,785  
Same-Home property operating expenses 8,614   8,962   36,761   36,629  
Same-Home NOI $ 13,008   $ 11,453   $ 48,401   $ 44,023  
Same-Home Core NOI Margin 60.7 % 56.8 % 57.3 % 55.2 %
 

The following table summarizes the Company's Same-Home portfolio
financial results, by quarter, for the trailing five quarters ended
December 31, 2016:

  Three Months Ended
December 31,   September 30,   June 30,   March 31,   December 31,
2016 2016 2016 2016 2015
Same-Home total revenue $ 21,622 $ 21,426 $ 21,246 $ 20,868 $ 20,415
Same-Home property operating expenses:
Property operating and maintenance 3,828 4,459 3,990 4,122 4,048
Real estate taxes 2,733 3,091 3,024 2,998 2,727
Homeowners' association fees 316 301 319 327 341
Property management 1,737   1,849   1,836   1,831   1,846  
Same-Home property operating expenses 8,614   9,700   9,169   9,278   8,962  
Same-Home NOI $ 13,008   $ 11,726   $ 12,077   $ 11,590   $ 11,453  
Same-Home Core NOI Margin 60.7 % 55.3 % 57.2 % 56.1 % 56.8 %
Same-Home turnover 6.9 % 8.0 % 7.6 % 6.4 % 7.2 %
Days from move-out to move-in 41 35 38 52 54
Same-Home capital expenditures $ 1,160 $ 1,340 $ 1,639 $ 1,400 $ 1,791
Same-Home capital expenditures per home $ 201 $ 232 $ 284 $ 242 $ 310
 
SILVER BAY REALTY TRUST CORP.
FINANCIAL AND OPERATING RESULTS OF SAME-HOME PORTFOLIO
(AMOUNTS IN THOUSANDS EXCEPT PROPERTY AND PER HOME DATA)
 

The following table summarizes the occupancy status of the
Company's Same-Home portfolio as of December 31, 2016 and 2015:

     
Aggregate Occupancy Rate Average Monthly Rent
Number of Same-Home December 31,   December 31, December 31,   December 31,  
Properties 2016 2015 2016 2015 % Change
Atlanta 1,050 96.4 % 95.9 % $ 1,243 $ 1,192 4.3 %
Phoenix 1,422 97.7 % 94.6 % 1,143 1,101 3.8 %
Tampa 920 95.4 % 95.1 % 1,378 1,326 3.9 %
Charlotte 143 95.8 % 97.9 % 1,249 1,194 4.6 %
Orlando 280 96.4 % 97.5 % 1,322 1,265 4.5 %
Dallas 378 96.6 % 95.2 % 1,343 1,309 2.6 %
Jacksonville 301 96.3 % 95.7 % 1,160 1,119 3.7 %
Northern CA 381 97.9 % 97.4 % 1,734 1,610 7.7 %
Las Vegas 290 99.3 % 98.3 % 1,229 1,189 3.4 %
Columbus 284 97.9 % 97.2 % 1,099 1,072 2.5 %
Tucson 209 97.1 % 95.7 % 855 844 1.3 %
Southeast FL 122   88.5 % 90.2 % 1,634   1,589   2.8 %
Totals 5,780   96.7 % 95.7 % $ 1,264   $ 1,216   3.9 %
 

SILVER BAY REALTY TRUST CORP.

DEFINITIONS AND RECONCILIATIONS OF FINANCIAL AND OPERATING
MEASURES

(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)

(UNAUDITED)

Aggregate Investment in Real Estate. Aggregate investment in real
estate includes all capitalized costs, determined in accordance with
GAAP, incurred through December 31, 2016 for the acquisition,
stabilization, and significant post-stabilization renovation of
properties, including land, building, possession costs and renovation
costs. Aggregate investment in real estate includes $21.6 million in
capital improvements, incurred from the Company's formation through
December 31, 2016, made to properties that had been previously
renovated, but does not include accumulated depreciation.

Average Monthly Rent. Average monthly rent is calculated as the
average of the contracted monthly rent for occupied properties for an
identified population as of period end and reflects rent concessions
amortized over the life of the related lease.

Core Net Operating Income Margin ("Core NOI Margin"). Core
NOI Margin is calculated by dividing net operating income by Core
Revenue, which eliminates the impact of bad debt expense from both total
revenue and property operating expenses.

Core Revenue. Core Revenue is calculated by subtracting bad debt
expense from total revenue.

Days from Move-Out to Move-In. Days from move-out to move-in
represents the number of days from past resident move-out date until a
new resident moves into the same property.

Funds From Operations and Core Funds From Operations. Funds from
operations ("FFO") is a non-GAAP financial measure that the Company
believes, when considered with the financial statements determined in
accordance with GAAP, is helpful to investors in understanding its
performance because it captures features particular to real estate
performance by recognizing that real estate generally appreciates over
time or maintains residual value to a much greater extent than do other
depreciable assets. The National Association of Real Estate Investment
Trusts ("NAREIT") defines FFO as net income (loss), computed in
accordance with GAAP, excluding gains or losses from sales of, and
impairment losses recognized with respect to, depreciable property, plus
depreciation and amortization, and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures are calculated on the same basis to
determine FFO. In addition, the Company has adjusted net income (loss)
for the income tax expense (benefit) on disposition of real estate.

Core funds from operations ("Core FFO") is a non-GAAP financial measure
that the Company uses as a supplemental measure of its performance. The
Company believes that Core FFO is further helpful to investors as it
provides a more consistent measurement of its performance across
reporting periods by removing the impact of certain items that are not
comparable from period to period. The Company adjusts FFO for expensed
acquisition fees and costs, share-based compensation, severance and
other, market ready costs prior to initial lease, write off expenses
associated with changes in our debt structure, adjustments for
derivative instruments, net, and certain other non-cash or
non-comparable costs to arrive at Core FFO.

FFO and Core FFO should not be considered alternatives to net income
(loss) or net cash flows from operating activities, as determined in
accordance with GAAP, as indications of the Company's performance or as
measures of liquidity. These non-GAAP measures are not necessarily
indicative of cash available to fund future cash needs. In addition,
although the Company uses these non-GAAP measures for comparability in
assessing its performance against other REITs, not all REITs compute
these non-GAAP measures in the same manner. Accordingly, there can be no
assurance that the Company's basis for computing these non-GAAP measures
is comparable with that of other REITs. This is due in part to the
differences in capitalization policies used by different companies and
the significant effect these capitalization policies have on FFO and
Core FFO. Real estate costs incurred in connection with real estate
operations which are accounted for as capital improvements are added to
the carrying value of the property and depreciated over time, whereas
real estate costs that are expenses are accounted for as a current
period expense. This impacts FFO and Core FFO because costs that are
accounted for as expenses reduce FFO and Core FFO. Conversely, real
estate costs associated with assets that are capitalized and then
subsequently depreciated are excluded from the calculation of FFO and
Core FFO.

FFO and Core FFO are calculated on a gross basis and, as such, do not
reflect adjustments for the noncontrolling interests - Operating
Partnership.

The following table sets forth a reconciliation of the Company's net
income (loss) as determined in accordance with GAAP and its calculations
of FFO and Core FFO for the three months and years ended December 31,
2016 and 2015. Also presented is information regarding the computation
of FFO per share and Core FFO per share (amounts in thousands, except
share and per share amounts):

  Three Months Ended December 31,   Year Ended December 31,
2016   2015 2016   2015
Net income (loss) $ 2,862 $ (798 ) $ (2,614 ) $ (9,952 )
Depreciation and amortization 9,353 10,115 37,291 35,189
Net gain on disposition of real estate (4,499 ) (1,724 ) (10,657 ) (4,044 )
Impairment on real estate 601 49 1,105 95
Income tax expense (benefit) on disposition of real estate (192 ) (941 ) 623 (941 )
Other income       (285 )
FFO 8,125 6,701 25,748 20,062
 
Adjustments:
Portfolio acquisition expense (1) 403 18 526 2,064
Share-based compensation 658 718 2,667 2,613
Severance and other 1,977
Market ready costs prior to initial lease and other 169
Write-off of deferred financing fees 31
Adjustments for derivative instruments, net (157 ) 51 (44 ) 51
Amortization of discount on securitization loan 76 76 301 301
Other expense (2) (33 )     114  
Core FFO $ 9,072   $ 7,564   $ 31,175   $ 25,405  
 
FFO $ 8,125 $ 6,701 $ 25,748 $ 20,062
Preferred stock distributions (25 ) (25 ) (100 ) (100 )
FFO available to common shares and units $ 8,100   $ 6,676   $ 25,648   $ 19,962  
 
Core FFO $ 9,072 $ 7,564 $ 31,175 $ 25,405
Preferred stock distributions (25 ) (25 ) (100 ) (100 )
Core FFO available to common shares and units $ 9,047   $ 7,539   $ 31,075   $ 25,305  
 
Weighted average common shares and units outstanding (3)(4) 37,758,743   38,300,709   37,891,605   38,441,510  
FFO per share $ 0.21   $ 0.17   $ 0.68   $ 0.52  
Core FFO per share $ 0.24   $ 0.20   $ 0.82   $ 0.66  
(1)   Portfolio acquisition expense represents transaction costs incurred
when acquiring properties that meet the definition of a business
under the guidance codified in Codification Topic, Business
Combinations ("ASC 805"), which must be expensed when incurred
rather than capitalized into the basis of each property.
(2) Non-comparable costs from prior periods.
(3) Represents the weighted average of common shares and common units in
the Operating Partnership outstanding for the periods presented.
(4) Includes the effect of dilutive securities attributable to certain
stock based awards meeting market conditions during the three months
and year ended December 31, 2016.
 

FFO per share and Core FFO per share. FFO and Core FFO shares
represents FFO and Core FFO divided by the weighted average of common
shares and common units in the Operating Partnership for the periods
presented and the effect of dilutive securities attributable to certain
performance-based stock awards during periods when the performance
conditions required under such performance awards are on pace to be
achieved.

Generally Accepted Accounting Principles ("GAAP"). GAAP
is defined in accordance with accounting principles generally accepted
in the United States.

Net Operating Income and Same-Home Net Operating Income. The
Company defines net operating income ("NOI") as total revenue less
property operating and maintenance, real estate taxes, homeowners'
association fees, and property management expenses. NOI excludes
depreciation and amortization, portfolio acquisition expense, general
and administrative expenses, share-based compensation, severance and
other, interest expense, impairment of real estate, net gain on
disposition of real estate, adjustments for derivative instruments, net,
income tax expense (benefit), net and other non-comparable items as
applicable. The Company considers NOI to be a meaningful financial
measure when considered with the financial statements determined in
accordance with GAAP. The Company believes NOI is helpful to investors
in understanding the core performance of its real estate operations
without regard to items excluded from the calculation of such measure,
which can vary substantially from company to company depending upon
accounting methods, book value of assets, capital structure and the
method by which assets were acquired, among other factors.

The Company believes Same-Home NOI is a useful measure of performance
because the population of properties in this analysis is consistent from
period to period, thereby eliminating the effects of changes in the
composition of the portfolio.

The following is a reconciliation of NOI and Same-Home NOI to net loss
as determined in accordance with GAAP for the years ended December 31,
2016 and 2015 (amounts in thousands):

  Year Ended December 31,
2016   2015
Net loss $ (2,614 ) $ (9,952 )
Depreciation and amortization 37,291 35,189
Portfolio acquisition expense 526 2,064
General and administrative 14,457 15,915
Share-based compensation 2,667 2,613
Severance and other 1,977
Interest expense 26,113 21,275
Impairment of real estate 1,105 95
Net gain on disposition of real estate (10,657 ) (4,044 )
Adjustments for derivative instruments, net (44 ) 51
Other expense 1,211 288
Income tax expense (benefit), net 969 (758 )
Property operating and maintenance add back:
Market ready costs prior to initial lease and other   169  
NOI 73,001 62,905
Less non-Same-Home
Total revenue (41,473 ) (33,042 )
Property operating expenses 16,873   14,160  
Same-Home NOI $ 48,401   $ 44,023  
 
Calculation of aggregate Core NOI Margin
Total revenue $ 126,635 $ 113,694
Less bad debt expense (1,002 ) (1,426 )
Core Revenue $ 125,633   $ 112,268  
Core NOI Margin 58.1 % 56.0 %
 
Calculation of Same-Home Core NOI Margin
Same-Home total revenue $ 85,162 $ 80,652
Less Same-Home bad debt expense (742 ) (959 )
Same-Home Core Revenue $ 84,420   $ 79,693  
Same-Home Core NOI Margin 57.3 % 55.2 %

The following is a reconciliation of NOI and Same-Home NOI to net income
(loss) as determined in accordance with GAAP, by quarter, for the
trailing five quarters ended December 31, 2016 (amounts in thousands):

  Three Months Ended
December 31,   September 30,  

    June 30,    

 

    March 31,    

  December 31,
2016 2016 2016 2016 2015
Net income (loss) $ 2,862 $ (1,665 ) $ (222 ) $ (3,589 ) $ (798 )
Depreciation and amortization 9,353 9,243 9,329 9,366 10,115
Portfolio acquisition expense 403 123 18
General and administrative 3,353 3,514 3,737 3,853 3,991
Share-based compensation 658 661 776 572 718
Severance and other 310 1,667
Interest expense 7,020 6,589 6,292 6,212 5,968
Impairment of real estate 601 255 190 59 49
Net gain on disposition of real estate (4,499 ) (2,417 ) (2,456 ) (1,285 ) (1,724 )
Adjustments for derivative instruments, net (157 ) 113 51
Other expense 272 398 270 271 270
Income tax (benefit) expense, net (133 ) 424   211   467   (905 )
NOI 19,733 17,548 18,127 17,593 17,753
Less non-Same-Home
Total revenue (10,828 ) (10,135 ) (10,242 ) (10,268 ) (10,226 )
Property operating expenses 4,103   4,313   4,192   4,265   3,926  
Same-Home NOI $ 13,008   $ 11,726   $ 12,077   $ 11,590   $ 11,453  
 
Calculation of aggregate Core NOI Margin
Total revenue $ 32,450 $ 31,561 $ 31,488 $ 31,136 $ 30,641
Less bad debt expense (328 ) (269 ) (132 ) (273 ) (405 )
Core Revenue $ 32,122   $ 31,292   $ 31,356   $ 30,863   $ 30,236  
Core NOI Margin 61.4 % 56.1 % 57.8 % 57.0 % 58.7 %
 
Calculation of Same-Home Core NOI Margin
Same-Home total revenue $ 21,622 $ 21,426 $ 21,246 $ 20,868 $ 20,415
Less Same-Home bad debt expense (205 ) (218 ) (117 ) (202 ) (262 )
Same-Home Core Revenue $ 21,417   $ 21,208   $ 21,129   $ 20,666   $ 20,153  
Same-Home Core NOI Margin 60.7 % 55.3 % 57.2 % 56.1 % 56.8 %
 

Neither NOI nor Same-Home NOI should be considered an alternative to net
income (loss) or net cash flows from operating activities, as determined
in accordance with GAAP, as indications of its performance or as
measures of liquidity. Although the Company uses these non-GAAP measures
for comparability in assessing its performance against other REITs, not
all REITs compute these non-GAAP measures in the same manner.
Accordingly, there can be no assurance that the basis for computing
these non-GAAP measures is comparable with that of other REITs.

Occupancy. Occupancy is defined as the number of occupied
properties for an identified population as of the last day of the period
divided by the comparative property set.

Retention Rate. Retention rate refers to the number of residents
the Company retains from an identified group of properties with lease
expirations (including month-to-month leases) in a specified period.
Retention rate is calculated by dividing the number of residents in such
an identified pool that remain in our properties by the total number of
properties in such pool.

Same-Home Properties. The Company defines Same-Home properties as
those properties (1) that it had stabilized and for which it had
completed the initial renovation as of January 1, 2015 and (2) that it
held in operations throughout the full periods presented in both 2015
and 2016. Same-Home properties exclude properties classified as held for
sale and properties taken out of service as a result of a casualty loss.

Stabilized Property. The Company considers a property stabilized
at the earlier of (1) its first authorized occupancy or (2) 90 days
after the renovations for such property are complete, regardless of
whether the property is leased. Properties acquired with in-place leases
are considered stabilized even though such properties require a future
initial renovation to meet the Company's standards and may have existing
residents who would not otherwise meet the resident screening
requirements.

Total Properties. Total properties exclude properties reflected
as assets held for sale on the Company's condensed consolidated balance
sheets.

Turnover Rate. Turnover rate is defined as the number of
instances that properties in an identified pool become un-occupied over
a specific period of time, divided by the number of properties in
stabilized status in such identified population.

Weighted Average Common Shares and Units Outstanding. Below is a
reconciliation from the Company's weighted average shares outstanding
for net income and FFO and Core FFO purposes:

  Three Months Ended December 31,   Year Ended December 31,
2016   2015 2016   2015
Weighted average common shares outstanding - basic 35,380,056 36,069,198 35,557,636 36,209,999
Operating Partnership units (1) 2,231,511 2,231,511 2,231,511 2,231,511
Performance-based stock awards (2) 147,176     102,458  
Total common shares and units - diluted 37,758,743   38,300,709   37,891,605   38,441,510
(1)   Represents the weighted average of common shares and common units in
the Operating Partnership outstanding for the periods presented.
(2) Includes the effect of dilutive securities attributable to certain
stock based awards meeting market conditions during the three months
and year ended December 31, 2016.

View Comments and Join the Discussion!