Section 1: 10-Q (10-Q)

sfr-10q_20170630.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One) 

QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

or

TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File Number 001- 36163

 

Starwood Waypoint Homes

(Exact name of registrant as specified in its charter)

 

 

Maryland

 

80-6260391

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

 

 

 

8665 East Hartford Drive

Scottsdale, AZ

 

85255

(Address of principal executive offices)

 

(Zip Code)

(480) 362-9760

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes     No  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes      No  

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer

 

 

  

Accelerated filer

 

 

 

 

 

 

 

Non-accelerated filer

 

  (Do not check if a small reporting company)

  

Small reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  

As of August 3, 2017, there were 128,307,181 of the registrant’s common shares, par value $0.01 per share, outstanding.

 

 

 

 


 

STARWOOD WAYPOINT HOMES

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2017

INDEX

 

Part I.

 

Financial Information

 

 

 

 

 

 

 

Item 1.

 

Financial Statements (Unaudited)

 

1

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets

 

1

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations

 

2

 

 

 

 

 

 

 

Condensed Consolidated Statements of Other Comprehensive Loss

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Equity

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows

 

5

 

 

 

 

 

 

 

Notes to the Condensed Consolidated Financial Statements

 

7

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

33

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

47

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

48

 

 

 

 

 

Part II.

 

Other Information

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

50

 

 

 

 

 

Item 1A.

 

Risk Factors

 

50

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

50

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

51

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

51

 

 

 

 

 

Item 5.

 

Other Information

 

51

 

 

 

 

 

Item 6.

 

Exhibits

 

51

 

 

 

 

 

Signatures

 

52

 

 

 

 

 

Index to Exhibits

 

53

 

 

 

 


 

Except where the context suggests otherwise, the terms “we,” “us,” and “our” refer to Starwood Waypoint Homes (formerly Colony Starwood Homes and before that Starwood Waypoint Residential Trust (“SWAY”)), a Maryland real estate investment trust, together with its consolidated subsidiaries, including Starwood Waypoint Homes Partnership, L.P. (formerly Colony Starwood Homes Partnership, L.P. and before that Starwood Waypoint Residential Partnership, L.P.), a Delaware limited partnership through which we conduct substantially all of our business, which we refer to as “our operating partnership”; the term “CAH” refers to Colony American Homes, Inc., our predecessor for accounting purposes; the term “the Manager” refers to SWAY Management LLC, a Delaware limited liability company, our former external manager; and the term “Starwood Capital Group” refers to Starwood Capital Group Global, L.P. (and its predecessors), together with all of its affiliates and subsidiaries, including the Manager prior to its internalization (the “Internalization”), other than us.

 

 

CAUTIONARY STATEMENTS

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains, in addition to historical information, certain forward-looking statements that involve significant risks and uncertainties, which are difficult to predict, and are not guarantees of future performance. Such statements can generally be identified by words such as “anticipates,” “expects,” “intends,” “will,” “could,” “believes,” “estimates,” “continue,” and similar expressions. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are based on certain assumptions and discuss future expectations, describe future plans and strategies, and contain financial and operating projections or state other forward-looking information. Our ability to predict results or the actual effect of future events, actions, plans or strategies is inherently uncertain. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in, or implied by, the forward-looking statements. Factors that could materially and adversely affect our business, financial condition, liquidity, results of operations and prospects, as well as our ability to make distributions to our shareholders, include, but are not limited to:

 

the risk factors referenced in this Quarterly Report on Form 10-Q are set forth under Item 1A. Risk Factors in our Annual Report on Form 10-K filed on February 28, 2017 and should be read in conjunction with this Quarterly Report on Form 10-Q;

 

unanticipated increases in financing and other costs, including a rise in interest rates;

 

the availability, terms and our ability to effectively deploy short-term and long-term capital;

 

the possibility that unexpected liabilities may arise from the Internalization or our merger with CAH (the “Merger”), including the outcome of any legal proceedings that have been or may be instituted against us, CAH or others following the announcement or the completion of the Internalization or the Merger;

 

changes in our business and growth strategies;

 

our ability to hire and retain highly skilled managerial, investment, financial and operational personnel;

 

volatility in the real estate industry, interest rates and spreads, the debt or equity markets, the economy generally or the rental property market specifically, whether the result of market events or otherwise;

 

events or circumstances that undermine confidence in the financial markets or otherwise have a broad impact on financial markets, such as the sudden instability or collapse of large financial institutions or other significant corporations, terrorist attacks, natural or man-made disasters, or threatened or actual armed conflicts;

 

declines in the value of single-family residential properties, and macroeconomic shifts in demand for, and competition in the supply of, rental properties;

 

the availability of attractive investment opportunities in properties that satisfy our investment objective and business and growth strategies;

 

our ability to convert the properties we acquire into rental properties generating attractive returns and to effectively control the timing and costs relating to the renovation and operation of the properties;

 

our ability to lease or re-lease our rental properties to qualified residents on attractive terms or at all;

 

the failure of residents to pay rent when due or otherwise perform their lease obligations;

 

our ability to effectively manage our portfolio of rental properties;

 

the concentration of credit risks to which we are exposed;

 

the rates of default or decreased recovery rates on our target assets;

i


 

 

the adequacy of our cash reserves and working capital;

 

potential conflicts of interest with Starwood Capital Group and its affiliates and managed investment activities;

 

the timing of cash flows, if any, from our investments;

 

our expected leverage;

 

financial and operating covenants contained in our credit facilities and securitizations that could restrict our business and investment activities;

 

effects of derivative and hedging transactions;

 

our ability to maintain effective internal controls as required by the Sarbanes-Oxley Act of 2002 and to comply with other public company regulatory requirements;

 

our ability to maintain our exemption from registration as an investment company under the Investment Company Act of 1940, as amended;

 

actions and initiatives of the U.S., state and municipal governments and changes to governments’ policies that impact the economy generally and, more specifically, the housing and rental markets;

 

changes in governmental regulations, tax laws (including changes to laws governing the taxation of real estate investment trusts (“REITs”)) and rates, and similar matters;

 

limitations imposed on our business and our ability to satisfy complex rules in order for us and, if applicable, certain of our subsidiaries to qualify as a REIT for U.S. federal income tax purposes and the ability of certain of our subsidiaries to qualify as taxable REIT subsidiaries (“TRSs”) for U.S. federal income tax purposes, and our ability and the ability of our subsidiaries to operate effectively within the limitations imposed by these rules; and

 

estimates relating to our ability to make distributions to our shareholders in the future.

When considering forward-looking statements, keep in mind the risk factors and other cautionary statements contained in our Annual Report on Form 10-K for the year ended December 31, 2016 and other cautionary statements in this Quarterly Report on Form 10-Q. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this Quarterly Report on Form 10-Q. We recommend that readers read this document in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2016 and see the discussion on risk factors in Item 1A. Risk Factors, which was filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2017. Our actual results and performance may differ materially from those set forth in, or implied by, our forward-looking statements. Accordingly, we cannot guarantee future results or performance. Furthermore, except as required by law, we are under no duty to, and we do not intend to, update any of our forward-looking statements after the date of this Quarterly Report on Form 10-Q, whether as a result of new information, future events or otherwise.

Merger and Internalization

On September 21, 2015, we and CAH announced the signing of Agreement and Plan of Merger dated as of September 21, 2015, among us and certain of our subsidiaries and CAH and certain of its subsidiaries and certain investors in CAH (“the Merger Agreement”) to combine the two companies in a stock-for-stock transaction.  In connection with the transaction, we internalized the Manager. The Merger and the Internalization were completed on January 5, 2016.

Our common shares are listed and traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “SFR”.  

 

 

ii


 

PART I - FINANCIAL INFORMATION

 

 

Item 1. Financial Statements (Unaudited)

STARWOOD WAYPOINT HOMES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

As of

 

 

As of

 

 

 

June 30, 2017

 

 

December 31, 2016

 

ASSETS

 

(Unaudited)

 

 

 

 

 

Investments in real estate properties:

 

 

 

 

 

 

 

 

Land and land improvements

 

$

1,847,410

 

 

$

1,584,533

 

Buildings and building improvements

 

 

4,930,542

 

 

 

4,403,871

 

Furniture, fixtures and equipment

 

 

159,196

 

 

 

131,502

 

Total investments in real estate properties

 

 

6,937,148

 

 

 

6,119,906

 

Accumulated depreciation

 

 

(447,600

)

 

 

(370,394

)

Investments in real estate properties, net

 

 

6,489,548

 

 

 

5,749,512

 

Real estate held for sale, net

 

 

144,070

 

 

 

22,201

 

Cash and cash equivalents

 

 

174,407

 

 

 

109,097

 

Restricted cash

 

 

129,326

 

 

 

155,194

 

Investments in unconsolidated joint ventures

 

 

33,709

 

 

 

34,384

 

Asset-backed securitization certificates

 

 

114,550

 

 

 

141,103

 

Assets held for sale (Note 14)

 

 

26,271

 

 

 

76,870

 

Goodwill

 

 

260,230

 

 

 

260,230

 

Other assets, net

 

 

98,848

 

 

 

66,585

 

Total assets

 

$

7,470,959

 

 

$

6,615,176

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

115,799

 

 

$

88,140

 

Resident prepaid rent and security deposits

 

 

65,253

 

 

 

57,823

 

Revolving credit facilities

 

 

180,000

 

 

 

108,501

 

Secured term loan

 

 

450,000

 

 

 

 

Mortgage loans, net

 

 

2,689,478

 

 

 

3,333,241

 

Convertible senior notes, net

 

 

521,674

 

 

 

356,983

 

Liabilities related to assets held for sale (Note 14)

 

 

533

 

 

 

25,495

 

Other liabilities

 

 

5,697

 

 

 

 

Total liabilities

 

 

4,028,434

 

 

 

3,970,183

 

Commitments and contingencies (Note 15)

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Preferred shares $.01 par value, 100,000,000 shares authorized, none issued and

   outstanding as of June 30, 2017 and December 31, 2016

 

 

 

 

 

Common shares $.01 par value, 500,000,000 shares authorized, 128,301,702

   and 101,495,759 issued and outstanding as of June 30, 2017 and December 31, 2016

 

 

1,277

 

 

 

1,015

 

Additional paid-in capital

 

 

3,625,423

 

 

 

2,734,034

 

Accumulated deficit

 

 

(388,255

)

 

 

(319,828

)

Accumulated other comprehensive income

 

 

18,555

 

 

 

23,667

 

Total shareholders’ equity

 

 

3,257,000

 

 

 

2,438,888

 

Non-controlling interests

 

 

185,525

 

 

 

206,105

 

Total equity

 

 

3,442,525

 

 

 

2,644,993

 

Total liabilities and equity

 

$

7,470,959

 

 

$

6,615,176

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements

1


 

STARWOOD WAYPOINT HOMES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

141,641

 

 

$

133,081

 

 

$

280,894

 

 

$

262,738

 

Other property income

 

 

9,953

 

 

 

7,773

 

 

 

18,966

 

 

 

13,492

 

Other income

 

 

2,780

 

 

 

2,979

 

 

 

5,554

 

 

 

5,869

 

Total revenues

 

 

154,374

 

 

 

143,833

 

 

 

305,414

 

 

 

282,099

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating and maintenance

 

 

21,718

 

 

 

21,940

 

 

 

40,664

 

 

 

38,678

 

Real estate taxes, insurance and HOA costs

 

 

29,411

 

 

 

27,921

 

 

 

57,710

 

 

 

55,240

 

Property management

 

 

9,242

 

 

 

10,131

 

 

 

18,892

 

 

 

20,147

 

Interest expense

 

 

37,141

 

 

 

37,984

 

 

 

76,140

 

 

 

75,441

 

Depreciation and amortization

 

 

48,114

 

 

 

44,844

 

 

 

94,299

 

 

 

88,474

 

Impairment of real estate assets

 

 

214

 

 

 

144

 

 

 

657

 

 

 

174

 

Share-based compensation

 

 

1,636

 

 

 

711

 

 

 

3,197

 

 

 

1,098

 

General and administrative

 

 

10,945

 

 

 

12,110

 

 

 

21,785

 

 

 

28,476

 

Transaction-related

 

 

65

 

 

 

5,073

 

 

 

65

 

 

 

28,555

 

Total expenses

 

 

158,486

 

 

 

160,858

 

 

 

313,409

 

 

 

336,283

 

Net gain on sales of real estate

 

 

7,809

 

 

 

527

 

 

 

8,487

 

 

 

1,911

 

Equity in income from unconsolidated joint ventures

 

 

190

 

 

 

157

 

 

 

370

 

 

 

354

 

Loss on extinguishment of debt

 

 

(3,537

)

 

 

 

 

 

(10,690

)

 

 

 

Other expense, net

 

 

(1,112

)

 

 

(2,925

)

 

 

(2,750

)

 

 

(3,650

)

Loss before income taxes

 

 

(762

)

 

 

(19,266

)

 

 

(12,578

)

 

 

(55,569

)

Income tax expense

 

 

179

 

 

 

81

 

 

 

336

 

 

 

326

 

Net loss from continuing operations

 

 

(941

)

 

 

(19,347

)

 

 

(12,914

)

 

 

(55,895

)

(Loss) income from discontinued operations, net (Note 14)

 

 

(175

)

 

 

2,684

 

 

 

(221

)

 

 

(7,817

)

Net loss

 

 

(1,116

)

 

 

(16,663

)

 

 

(13,135

)

 

 

(63,712

)

Net loss attributable to non-controlling interests

 

 

61

 

 

 

988

 

 

 

739

 

 

 

3,838

 

Net loss attributable to common shareholders

 

$

(1,055

)

 

$

(15,675

)

 

$

(12,396

)

 

$

(59,874

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share - basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from continuing operations attributable to common shareholders

 

$

(0.01

)

 

$

(0.18

)

 

$

(0.11

)

 

$

(0.52

)

Net income (loss) from discontinued operations attributable to common shareholders

 

$

 

 

$

0.02

 

 

$

 

 

$

(0.07

)

Net loss attributable to common shareholders

 

$

(0.01

)

 

$

(0.15

)

 

$

(0.11

)

 

$

(0.59

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.22

 

 

$

0.22

 

 

$

0.44

 

 

$

0.44

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

 

2


 

STARWOOD WAYPOINT HOMES

CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE LOSS

(in thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Other Comprehensive Loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,116

)

 

$

(16,663

)

 

$

(13,135

)

 

$

(63,712

)

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized gains (losses) on cash flow hedges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized losses

 

 

(10,314

)

 

 

(14,391

)

 

 

(5,423

)

 

 

(16,824

)

Reclassifications to (loss) income

 

 

(364

)

 

 

1,231

 

 

 

157

 

 

 

1,807

 

Other comprehensive loss

 

 

(10,678

)

 

 

(13,160

)

 

 

(5,266

)

 

 

(15,017

)

Comprehensive loss

 

 

(11,794

)

 

 

(29,823

)

 

 

(18,401

)

 

 

(78,729

)

Comprehensive loss attributable to non-controlling interests

 

 

627

 

 

 

1,769

 

 

 

1,020

 

 

 

4,728

 

Comprehensive loss attributable to common shareholders

 

$

(11,167

)

 

$

(28,054

)

 

$

(17,381

)

 

$

(74,001

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

 

 

 

3


 

STARWOOD WAYPOINT HOMES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(in thousands, except share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

Total

 

 

Non-

 

 

 

 

 

 

 

Shares

 

 

Common Shares

 

 

Paid-in

 

 

Accumulated

 

 

Comprehensive

 

 

Shareholders'

 

 

controlling

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Equity

 

 

Interests

 

 

Total Equity

 

Balances at December 31, 2016

 

 

 

 

$

 

 

 

101,495,759

 

 

$

1,015

 

 

$

2,734,034

 

 

$

(319,828

)

 

$

23,667

 

 

$

2,438,888

 

 

$

206,105

 

 

$

2,644,993

 

Capital distributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,672

)

 

 

(1,672

)

Dividends declared of $0.44 per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(56,031

)

 

 

 

 

 

(56,031

)

 

 

 

 

 

(56,031

)

Issuance of common shares for settlement

   of RSUs

 

 

 

 

 

 

 

 

95,324

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

1

 

Amortization of share-based

   compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,155

 

 

 

 

 

 

 

 

 

3,155

 

 

 

 

 

 

3,155

 

Shares withheld for taxes related to

   settlement of RSUs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,385

)

 

 

 

 

 

 

 

 

(1,385

)

 

 

 

 

 

(1,385

)

Repurchase of 2017 Convertible Notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,648

)

 

 

 

 

 

 

 

 

(15,648

)

 

 

 

 

 

(15,648

)

Issuance of 2022 Convertible Notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17,537

 

 

 

 

 

 

 

 

 

17,537

 

 

 

 

 

 

17,537

 

Issuance of common shares, net

 

 

 

 

 

 

 

 

26,160,443

 

 

 

261

 

 

 

869,716

 

 

 

 

 

 

 

 

 

869,977

 

 

 

 

 

 

869,977

 

Redemption of OP Units for common

   shares

 

 

 

 

 

 

 

 

550,176

 

 

 

 

 

 

18,014

 

 

 

 

 

 

(127

)

 

 

17,887

 

 

 

(17,888

)

 

 

(1

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12,396

)

 

 

 

 

 

(12,396

)

 

 

(739

)

 

 

(13,135

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,985

)

 

 

(4,985

)

 

 

(281

)

 

 

(5,266

)

Balances at June 30, 2017

 

 

 

 

$

 

 

 

128,301,702

 

 

$

1,277

 

 

$

3,625,423

 

 

$

(388,255

)

 

$

18,555

 

 

$

3,257,000

 

 

$

185,525

 

 

$

3,442,525

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

 

 

 

4


 

STARWOOD WAYPOINT HOMES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited) 

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2017

 

 

2016

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net loss

 

$

(13,135

)

 

$

(63,712

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

94,299

 

 

 

88,474

 

Amortization of debt discounts

 

 

9,538

 

 

 

10,617

 

Amortization of deferred financing costs

 

 

8,974

 

 

 

6,611

 

Amortization of leased vehicle deposits

 

 

82

 

 

 

93

 

Share-based compensation

 

 

3,197

 

 

 

1,098

 

Equity in income of unconsolidated joint ventures

 

 

(370

)

 

 

(354

)

Distributions from unconsolidated joint ventures

 

 

370

 

 

 

354

 

Bad debt expense

 

 

3,862

 

 

 

2,965

 

Net gain on sales of real estate

 

 

(9,691

)

 

 

(3,607

)

Gain on loan conversions, net (Note 14)

 

 

(1,331

)

 

 

(10,054

)

Gain on NPL sales (Note 14)

 

 

(122

)

 

 

(2,362

)

Loss on extinguishment of debt

 

 

10,690

 

 

 

 

Unrealized losses from derivative instruments

 

 

1,826

 

 

 

852

 

Impairment of real estate assets

 

 

657

 

 

 

174

 

Net changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Restricted cash

 

 

(7,922

)

 

 

(19,429

)

Other assets

 

 

2,451

 

 

 

7,291

 

Accounts payable and accrued expenses

 

 

2,770

 

 

 

(14,976

)

Resident prepaid rent and security deposits

 

 

1,772

 

 

 

1,365

 

Other liabilities

 

 

 

 

 

(318

)

Net cash provided by operating activities

 

 

107,917

 

 

 

5,082

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Cash acquired in mergers and acquisitions

 

 

3,649

 

 

 

57,655

 

Acquisition of real estate properties

 

 

(539,858

)

 

 

(18,501

)

Capital expenditures for real estate properties

 

 

(51,983

)

 

 

(50,089

)

Proceeds from sales of real estate

 

 

177,372

 

 

 

136,307

 

Proceeds from sales of loans and other proceeds on loans (Note 14)

 

 

310

 

 

 

25,128

 

Distributions from unconsolidated joint ventures

 

 

675

 

 

 

729

 

Payment of leasing costs

 

 

(4,351

)

 

 

(4,407

)

Net cash (used in) provided by investing activities

 

 

(414,186

)

 

 

146,822

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements

5


 

STARWOOD WAYPOINT HOMES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(in thousands)

(Unaudited)

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2017

 

 

2016

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Borrowings on revolving credit facilities

 

$

320,233

 

 

$

42,374

 

Payments on revolving credit facilities

 

 

(248,734

)

 

 

(560,959

)

Payments on secured term loan

 

 

(50,000

)

 

 

 

Payments on master repurchase facility (Note 14)

 

 

(19,286

)

 

 

(24,320

)

Proceeds from the issuance of mortgage loans, net

 

 

 

 

 

485,641

 

Payments on mortgage loans

 

 

(653,270

)

 

 

(5,220

)

Proceeds from the issuance of convertible senior notes

 

 

345,000

 

 

 

 

Payment of financing costs

 

 

(9,432

)

 

 

(10,011

)

Repurchase of convertible senior notes

 

 

(186,012

)

 

 

 

Proceeds from the issuance of common shares

 

 

891,616

 

 

 

 

Payment of offering costs

 

 

(20,244

)

 

 

(11,871

)

Change in escrow reserves for credit facilities and mortgage loans, net

 

 

53,586

 

 

 

5,599

 

Repurchases of common shares

 

 

 

 

 

(44,550

)

Distributions to non-controlling interests

 

 

(1,672

)