NexPoint Residential Trust Inc

Previous wording

As of March 31, 2024, our Portfolio consisted of 37 multifamily properties primarily located in the Southeastern and Southwestern United States encompassing 13,399 units of apartment space that was approximately 94.6% leased with a weighted average monthly effective rent per occupied apartment unit of $1,511. Substantially all of our business is conducted through the OP. We own the Portfolio through the OP and our TRS. The OP owns approximately 99.9% of the Portfolio; our TRS owns approximately 0.1% of the Portfolio. The OP GP is the sole general partner of the OP. As of March 31, 2024, there were 26,053,988 OP Units outstanding, of which 25,951,154, or 99.6%, were owned by us, and 102,834, or 0.4%, were owned by an unaffiliated limited partner (see Note 8 to our consolidated financial statements).

Current wording

As of June 30, 2024, our Portfolio consisted of 36 multifamily properties primarily located in the Southeastern and Southwestern United States encompassing 13,174 units of apartment space that was approximately 94.1% leased with a weighted average monthly effective rent per occupied apartment unit of $1,517. Substantially all of our business is conducted through the OP. We own the Portfolio through the OP and our TRS. The OP owns approximately 99.9% of the Portfolio; our TRS owns approximately 0.1% of the Portfolio. The OP GP is the sole general partner of the OP. As of June 30, 2024, there were 26,053,988 OP Units outstanding, of which 25,951,154, or 99.6%, were owned by us, and 102,834, or 0.4%, were owned by an unaffiliated limited partner (see Note 8 to our consolidated financial statements).

Previous wording

We have elected to be taxed as a REIT under Sections 856 through 860 of the Code, and expect to continue to qualify as a REIT. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our REIT taxable income to our stockholders. As a REIT, we will be subject to federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years. We believe we qualify for taxation as a REIT under the Code, and we intend to continue to operate in such a manner, but no assurance can be given that we will operate in a manner so as to qualify as a REIT. Taxable income from certain non-REIT activities is managed through a TRS and is subject to applicable federal, state, and local income and margin taxes. We had no significant taxes associated with our TRS for the three months ended March 31, 2024 and 2023.

Current wording

We have elected to be taxed as a REIT under Sections 856 through 860 of the Code, and expect to continue to qualify as a REIT. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our REIT taxable income to our stockholders. As a REIT, we will be subject to federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years. We believe we qualify for taxation as a REIT under the Code, and we intend to continue to operate in such a manner, but no assurance can be given that we will operate in a manner so as to qualify as a REIT. Taxable income from certain non-REIT activities is managed through a TRS and is subject to applicable federal, state, and local income and margin taxes. We had no significant taxes associated with our TRS for the six months ended June 30, 2024 and 2023.

Previous wording

The change in our net income for the three months ended March 31, 2024 as compared to the net loss for the three months ended March 31, 2023 primarily relates to an increase on gain on sales of real estate.

Current wording

The change in our net income for the three months ended June 30, 2024 as compared to our net loss for the three months ended June 30, 2023 primarily relates to our gain on sales of real estate of $18.7 million.

Previous wording

Property operating expenses. Property operating expenses were $13.8 million for the three months ended March 31, 2024 compared to $13.3 million for the three months ended March 31, 2023, which was an increase of approximately $0.5 million. The increase between the periods was primarily due to a decrease in casualty gains on $1.7 million, offset by a decrease in all other operating expenses of $2.2 million due to our disposition activity in 2023 and 2024.

Current wording

Property operating expenses. Property operating expenses were $13.8 million for the three months ended June 30, 2024 compared to $15.5 million for the three months ended June 30, 2023, which was a decrease of approximately $1.7 million. The decrease between periods was primarily due to a decrease our disposition activity in 2023 and 2024.

Previous wording

Advisory and administrative fees. Advisory and administrative fees were $1.7 million for the three months ended March 31, 2024 and $1.9 million for the three months ended March 31, 2023 which was a decrease of approximately $0.2 million. For the three months ended March 31, 2024 and 2023, our Adviser elected to voluntarily waive the advisory and administrative fees of approximately $5.5 million and $5.3 million, respectively, and are considered permanently waived. Our Adviser is not contractually obligated to waive fees on New Assets in the future and may cease waiving fees on New Assets at its discretion. Advisory and administrative fees may increase in future periods as we acquire additional properties, which will be classified as New Assets.

Current wording

Advisory and administrative fees. Advisory and administrative fees were $1.7 million for the three months ended June 30, 2024 compared to $1.9 million for the three months ended June 30, 2023. For the three months ended June 30, 2024 and 2023, our Adviser elected to voluntarily waive the advisory and administrative fees of approximately $5.2 million and $5.4 million and are considered permanently waived. Our Adviser is not contractually obligated to waive fees on New Assets in the future and may cease waiving fees on New Assets at its discretion. Advisory and administrative fees may increase in future periods as we acquire additional properties, which will be classified as New Assets.

Previous wording

Interest expense. Interest expense was $14.4 million for the three months ended March 31, 2024 compared to $16.7 million for the three months ended March 31, 2023, which was a decrease of approximately $2.3 million. The decrease between the periods was primarily due an increase in interest on debt of $2.1 million as a result of increased interest rates offset by interest rate swaps and caps gain of $2.7 million and $1.6 million, respectively. The following table details the various costs included in interest expense for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

Interest expense. Interest expense was $14.0 million for the three months ended June 30, 2024 compared to $14.5 million for the three months ended June 30, 2023, which was a decrease of approximately $0.5 million. There was a decrease in interest on debt of approximately $1.8 million and increase in effective interest rate swap expense of $0.9 million, partially offset by mark-to-market on interest rate caps of $1.9 million. The following table details the various costs included in interest expense for the three months ended June 30, 2024 and 2023 (in thousands):

Previous wording

Casualty gain (loss). Casualty loss was $0.2 million gain compared to a $0.8 million loss for the three months ended March 31, 2024 and 2023, respectively. The increase in casualty gain (loss) between periods of $1.0 million is attributable to the Company's casualty events and the timing.

Current wording

Casualty (loss). Casualty loss was $0.7 million compared to a $0.1 million for the three months ended June 30, 2024 and 2023, respectively. The increase in casualty loss between periods of $0.6 million is attributable to the Company's casualty events and the timing.

Previous wording

Miscellaneous income. Miscellaneous income was $0.1 million compared to $0.4 million for the three months ended March 31, 2023. The decrease in miscellaneous income is attributable to a decrease in business interruption proceeds.

Current wording

Miscellaneous income. Miscellaneous income was $0.1 million compared to $0.3 million for the three months ended June 30, 2024 and 2023, respectively. The decrease between periods is attributable to a decrease in business interruption proceeds.

Previous wording

Gain on sales of real estate. Gain on sales of real estate was $31.7 million compared to $0.0 million for the three months ended March 31, 2023. The increase between periods is attributable to our sale of one property during the three months ended March 31, 2024 compared to no dispositions during the three months ended March 31, 2023.

Current wording

Gain on sale of real estate. Gain on sale of real estate was $18.7 million compared to $0.0 million for the three months ended June 30, 2024 and 2023, respectively. The increase between periods is attributable to one disposition during the three months ended June 30, 2024 compared to none during the three months ended June 30, 2023.

Previous wording

Other income. Other income was $1.5 million for the three months ended March 31, 2024 compared to $1.4 million for the three months ended March 31, 2023, which was an increase of approximately $0.1 million. The majority of the increase is related to a $0.1 million increase in internet income.

Current wording

Other income. Other income was $3.8 million for the six months ended June 30, 2024 compared to $3.4 million for the six months ended June 30, 2023, which was an increase of approximately $0.4 million. The increase between the periods was primarily due to a $0.1 million increase in internet and tech income.

Previous wording

Rental income. Rental income was $65.6 million for the three months ended March 31, 2024 compared to $67.5 million for the three months ended March 31, 2023, which was a decrease of approximately $1.9 million. The decrease between the periods was primarily due to our disposition activity in 2023 and 2024.

Current wording

Real estate taxes and insurance. Real estate taxes and insurance costs were $17.5 million for the six months ended June 30, 2024 compared to $19.4 million for the six months ended June 30, 2023, which was a decrease of approximately $1.9 million. The decrease between the periods was primarily due to our disposition activity in 2024 and the last half of 2023.

Previous wording

Property management fees. Property management fees were $2.0 million for the three months ended March 31, 2024 and $2.0 million for the three months ended March 31, 2023. Property management fees are primarily based on total revenues.

Current wording

Property management fees. Property management fees were $3.8 million for the six months ended June 30, 2024 and $4.1 million for the six months ended June 30, 2023. Property management fees are primarily based on total revenues.

Previous wording

Corporate general and administrative expenses. Corporate general and administrative expenses were $4.9 million for the three months ended March 31, 2024 compared to $3.4 million for the three months ended March 31, 2023, which was an increase of approximately $1.5 million. The increase was primarily due to an increase in stock compensation expense of $0.6 million.

Current wording

Corporate general and administrative expenses. Corporate general and administrative expenses were $9.7 million for the six months ended June 30, 2024 compared to $8.0 million for the six months ended June 30, 2023, which was an increase of approximately $1.7 million. The increase was primarily due to an increase in stock compensation expense of $0.8 million.

Previous wording

Depreciation and amortization. Depreciation and amortization costs were $24.3 million for the three months ended March 31, 2024 compared to $23.3 million for the three months ended March 31, 2023, which was an increase of approximately $1.0 million. The increase between the periods was primarily due to an increase of $1.1 million in depreciation expense.

Current wording

Depreciation and amortization. Depreciation and amortization costs were $48.8 million for the six months ended June 30, 2024 compared to $47.1 million for the six months ended June 30, 2023, which was an increase of approximately $1.7 million. The increase between the periods was primarily due to an increase of $1.6 million in depreciation expense, which was primarily due to our value-add activities.

Previous wording

NOI is a non-GAAP financial measure of performance. NOI is used by investors and our management to evaluate and compare the performance of our properties to other comparable properties, to determine trends in earnings and to compute the fair value of our properties as NOI is calculated by adjusting net income (loss) to add back (1) interest expense (2) advisory and administrative fees, (3) the impact of: (a) depreciation and amortization expenses and (b) gains or losses from the sale of operating real estate assets that are included in net income (loss) computed in accordance with GAAP, (4) corporate general and administrative expenses, (5) other gains and losses that are specific to us including loss on extinguishment of debt and modification costs, (6) casualty-related expenses/(recoveries) and casualty gains (losses), (7) gain (loss) on extinguishment of debt and modification costs that are not reflective of continuing operations of the properties, (8) property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on behalf of the Company at the property for expenses such as legal, professional, centralized leasing service and franchise tax fees and (9) equity in earnings of affiliates.

Current wording

NOI is a non-GAAP financial measure of performance. NOI is used by investors and our management to evaluate and compare the performance of our properties to other comparable properties, to determine trends in earnings and to compute the fair value of our properties as NOI is calculated by adjusting net income (loss) to add back (1) interest expense (2) advisory and administrative fees, (3) the impact of: (a) depreciation and amortization expenses and (b) gains or losses from the sale of operating real estate assets that are included in net income (loss) computed in accordance with GAAP, (4) corporate general and administrative expenses, (5) corporate income that is not reflective of operations of the properties, (6) other gains and losses that are specific to us including loss on extinguishment of debt and modification costs, (7) casualty-related expenses/(recoveries) and casualty gains (losses), (8) gain (loss) on extinguishment of debt and modification costs that are not reflective of continuing operations of the properties, (9) gain on forfeited deposits, (10) property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on behalf of the Company at the property for expenses such as legal, professional, centralized leasing service and franchise tax fees and (11) equity in earnings of affiliates.

Previous wording

The cost of funds is eliminated from net income (loss) because it is specific to our particular financing capabilities and constraints. The cost of funds is also eliminated because it is dependent on historical interest rates and other costs of capital as well as past decisions made by us regarding the appropriate mix of capital, which may have changed or may change in the future. Corporate general and administrative expenses, and non-operating fees to affiliates and equity in earnings of affiliates are eliminated because they do not reflect continuing operating costs of the property owner. Depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets are eliminated because they may not accurately represent the actual change in value in our multifamily properties that result from use of the properties or changes in market conditions. While certain aspects of real property do decline in value over time in a manner that is reasonably captured by depreciation and amortization, the value of the properties as a whole have historically increased or decreased as a result of changes in overall economic conditions instead of from actual use of the property or the passage of time. Gains and losses from the sale of real property vary from property to property and are affected by market conditions at the time of sale, which will usually change from period to period. Casualty-related expenses and recoveries are excluded because they do not reflect continuing operating costs of the property owner. Entity level general and administrative expenses incurred at the properties are eliminated as they are specific to the way in which we have chosen to hold our properties and are the result of our ownership structuring. Also, expenses that are incurred upon acquisition of a property do not reflect continuing operating costs of the property owner. These gains and losses can create distortions when comparing one period to another or when comparing our operating results to the operating results of other real estate companies that have not made similarly timed purchases or sales. We believe that eliminating these items from net income (loss) is useful because the resulting measure captures the actual ongoing revenue generated and actual expenses incurred in operating our properties as well as trends in occupancy rates, rental rates and operating costs.

Current wording

The cost of funds is eliminated from net income (loss) because it is specific to our particular financing capabilities and constraints. The cost of funds is also eliminated because it is dependent on historical interest rates and other costs of capital as well as past decisions made by us regarding the appropriate mix of capital, which may have changed or may change in the future. Corporate general and administrative expenses, and non-operating fees to affiliates and equity in earnings of affiliates are eliminated because they do not reflect continuing operating costs of the property owner. Depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets are eliminated because they may not accurately represent the actual change in value in our multifamily properties that result from use of the properties or changes in market conditions. While certain aspects of real property do decline in value over time in a manner that is reasonably captured by depreciation and amortization, the value of the properties as a whole have historically increased or decreased as a result of changes in overall economic conditions instead of from actual use of the property or the passage of time. Gains and losses from the sale of real property vary from property to property and are affected by market conditions at the time of sale, which will usually change from period to period. Casualty-related expenses and recoveries are excluded because they do not reflect continuing operating costs of the property owner. Entity level general and administrative expenses incurred at the properties are eliminated as they are specific to the way in which we have chosen to hold our properties and are the result of our ownership structuring. Gain on forfeited deposits is excluded as it does not reflect the ongoing operations of the properties. Corporate income is excluded as it does not pertain to the performance of the operating properties. Also, expenses that are incurred upon acquisition of a property do not reflect continuing operating costs of the property owner. These gains and losses can create distortions when comparing one period to another or when comparing our operating results to the operating results of other real estate companies that have not made similarly timed purchases or sales. We believe that eliminating these items from net income (loss) is useful because the resulting measure captures the actual ongoing revenue generated and actual expenses incurred in operating our properties as well as trends in occupancy rates, rental rates and operating costs.

Previous wording

NOI and Same Store NOI for the Three Months Ended March 31, 2024 and 2023

Current wording

NOI and Same Store NOI for the Three and Six Months Ended June 30, 2024 and 2023

Previous wording

The following table, which has not been adjusted for the effects of noncontrolling interests, reconciles our NOI and our Same Store NOI for the three months ended March 31, 2024 and 2023 to net income (loss), the most directly comparable GAAP financial measure (in thousands):

Current wording

The following table, which has not been adjusted for the effects of noncontrolling interests, reconciles our NOI and our Same Store NOI for the three and six months ended June 30, 2024 and 2023 to net loss, the most directly comparable GAAP financial measure (in thousands):

Previous wording

There are 35 properties encompassing 12,961 units of apartment space in our same store pool for the three months ended March 31, 2024 and 2023 (our “Q1 Same Store” properties). Our Q1 Same Store properties exclude the following four properties in our Portfolio as of March 31, 2024: Stone Creek at Old Farm and Radbourne Lake, as well as the 23 units that are currently down (see Note 3).

Current wording

There are 35 properties encompassing 12,963 units of apartment space in our same store pool for the three months ended June 30, 2024 and 2023 (our “Q2 Same Store” properties). Our Q2 Same Store properties exclude the following property in our Portfolio as of June 30, 2024: Stone Creek at Old Farm, as well as the 21 units that are currently down (see Note 3).

Previous wording

See reconciliation of net income (loss) to NOI above under “NOI and Same Store NOI for the Three Months Ended March 31, 2024 and 2023.”

Current wording

See reconciliation of net income (loss) to NOI above under “NOI and Same Store NOI for the Three and Six Months Ended June 30, 2024 and 2023.”

Previous wording

Same Store Results of Operations for the Three Months Ended March 31, 2024 and 2023

Current wording

Q2 Same Store Results of Operations for the Three Months Ended June 30, 2024 and 2023

Previous wording

As of March 31, 2024, our Q1 Same Store properties were approximately 94.7% leased with a weighted average monthly effective rent per occupied apartment unit of $1,514. As of March 31, 2023, our Q1 Same Store properties were approximately 94.4% leased with a weighted average monthly effective rent per occupied apartment unit of $1,520. For our Q1 Same Store properties, we recorded the following operating results for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023:

Current wording

As of June 30, 2024, our Q2 Same Store properties were approximately 94.1% leased with a weighted average monthly effective rent per occupied apartment unit of $1,520. As of June 30, 2023, our Q2 Same Store properties were approximately 94.1% leased with a weighted average monthly effective rent per occupied apartment unit of $1,535. For our Q2 Same Store properties, we recorded the following operating results for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023:

Previous wording

Real estate taxes and insurance. Real estate taxes and insurance costs were $8.6 million for the three months ended March 31, 2024 compared to $8.2 million for the three months ended March 31, 2023, which was an increase of approximately $0.4 million. The majority of the increase is related to increases of $0.2 million and $0.2 million in insurance and property taxes, respectively.

Current wording

Real estate taxes and insurance. Real estate taxes and insurance costs were $8.3 million for the three months ended June 30, 2024 compared to $8.2 million for the three months ended June 30, 2023, which is an increase of $0.1 million.

Previous wording

Property general and administrative expenses. Property general and administrative expenses were $1.2 million for the three months ended March 31, 2024 compared to $1.2 million for the three months ended March 31, 2023, which was flat.

Current wording

Property general and administrative expenses. Property general and administrative expenses were $1.3 million for the three months ended June 30, 2024 compared to $1.2 million for the three months ended June 30, 2023, which was an increase of approximately $0.1 million. The increase between periods was primarily due to an increase in marketing expense.

Previous wording

Core FFO makes certain adjustments to FFO, which are either not likely to occur on a regular basis or are otherwise not representative of the ongoing operating performance of our Portfolio. Core FFO adjusts FFO to remove items such casualty-related expenses and recoveries and gains or losses, gain (loss) on extinguishment of debt and modification costs that are not reflective of continuing operations of the properties, the amortization of deferred financing costs incurred in connection with obtaining short-term debt financing, and the noncontrolling interests (as described above) related to these items. We believe Core FFO is useful to investors as a supplemental gauge of our operating performance and is useful in comparing our operating performance with other REITs that are not as involved in the aforementioned activities.

Current wording

Core FFO makes certain adjustments to FFO, which are either not likely to occur on a regular basis or are otherwise not representative of the ongoing operating performance of our Portfolio. Core FFO adjusts FFO to remove items such casualty-related expenses and recoveries and gains or losses, gain (loss) on extinguishment of debt and modification costs that are not reflective of continuing operations of the properties, gain on forfeited deposits, the amortization of deferred financing costs incurred in connection with obtaining short-term debt financing, and the noncontrolling interests (as described above) related to these items. We believe Core FFO is useful to investors as a supplemental gauge of our operating performance and is useful in comparing our operating performance with other REITs that are not as involved in the aforementioned activities.

Previous wording

The following table reconciles our calculations of FFO, Core FFO and AFFO to net loss, the most directly comparable GAAP financial measure, for the (in thousands, except per share amounts):

Current wording

The following table reconciles our calculations of FFO, Core FFO and AFFO to net loss, the most directly comparable GAAP financial measure, for the three and six months ended June 30, 2024 and 2023 (in thousands, except per share amounts):

Previous wording

Core FFO was $19.6 million for the three months ended March 31, 2024 compared to $18.6 million for the three months ended March 31, 2023, which was an increase of approximately $1.0 million. The change in our Core FFO between the periods primarily relates to a decrease in casualty loss of $1.0 million, partially offset by a decrease in FFO.

Current wording

Core FFO was $17.9 million for the three months ended June 30, 2024 compared to $20.4 million for the three months ended June 30, 2023, which was a decrease of approximately $2.5 million. The change in our Core FFO between the periods primarily relates to a decrease in FFO, partially offset by an increase in casualty losses of $0.7 million

Previous wording

AFFO was $22.6 million for the three months ended March 31, 2024 compared to $21.0 million for the three months ended March 31, 2023, which was an increase of approximately $1.6 million. The change in our AFFO between the periods primarily relates to an increase in Core FFO and equity-based compensation expense of $0.6 million.

Current wording

AFFO was $20.9 million for the three months ended June 30, 2024 compared to $23.2 million for the three months ended June 30, 2023, which was a decrease of approximately $2.3 million. The change in our AFFO between the periods primarily relates to an decrease in Core FFO partially offset by an increase in equity-based compensation expense of $0.2 million.

Previous wording

FFO was $18.9 million for the three months ended March 31, 2024 compared to $19.3 million for the three months ended March 31, 2023, which was a decrease of approximately $0.4 million. The change in our FFO between the periods primarily relates to a decrease in total revenues of $1.6 million, partially offset by a decrease in casualty loss of $1.0 million.

Current wording

FFO was $35.3 million for the six months ended June 30, 2024 compared to $39.1 million for the six months ended June 30, 2023, which was a decrease of approximately $3.8 million. The change in our FFO between the periods primarily relates to a decrease in total revenues of $7.0 million, offset by a decrease in interest expense of $3.1 million.

Previous wording

Real estate taxes and insurance. Real estate taxes and insurance costs were $9.3 million for the three months ended March 31, 2024 compared to $10.0 million for the three months ended March 31, 2023, which was a decrease of approximately $0.7 million. The decrease between the periods was primarily due to a decrease in property taxes of $0.7 million, which was driven by our disposition activity in 2023 and 2024.

Current wording

AFFO was $43.5 million for the six months ended June 30, 2024 compared to $44.2 million for the six months ended June 30, 2023, which was a decrease of approximately $0.7 million. The change in our AFFO between the periods primarily relates to a decrease in Core FFO partially offset by an increase of equity-based compensation expense of $0.8 million.

Previous wording

We expect to meet our short-term liquidity requirements generally through net cash provided by operations and existing cash balances and any unused capacity on the Corporate Credit Facility. As of March 31, 2024, we had approximately $2.9 million of renovation value-add reserves for our planned capital expenditures to implement our value-add program. Renovation value-add reserves are not required to be held in escrow by a third party. We may reallocate these funds, at our discretion, to pursue other investment opportunities or meet our short-term liquidity requirements.

Current wording

We expect to meet our short-term liquidity requirements generally through net cash provided by operations and existing cash balances and any unused capacity on the Corporate Credit Facility. As of June 30, 2024, we had approximately $4.2 million of renovation value-add reserves for our planned capital expenditures to implement our value-add program. Renovation value-add reserves are not required to be held in escrow by a third party. We may reallocate these funds, at our discretion, to pursue other investment opportunities or meet our short-term liquidity requirements.

Previous wording

The following table presents selected data from our consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following table presents selected data from our consolidated statements of cash flows for the six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

Cash flows from operating activities. During the three months ended March 31, 2024, net cash provided by operating activities was $19.7 million compared to net cash provided by operating activities of $27.9 million for the three months ended March 31, 2023. The change in cash flows from operating activities was mainly due to a $4.4 million decrease in change in fair value on derivative instruments included in interest expense and a $4.9 million decrease in operating liabilities, net of effects of sales and acquisitions.

Current wording

Cash flows from operating activities. During the six months ended June 30, 2024, net cash provided by operating activities was $39.3 million compared to net cash provided by operating activities of $53.9 million for the six months ended June 30, 2023. The change in cash flows from operating activities was mainly due to decreases in operating liabilities and real estate taxes payable of $11.0 million and $6.4 million, respectively.

Previous wording

Cash flows from investing activities. During the three months ended March 31, 2024, net cash provided by investing activities was $94.2 million compared to net cash used in investing activities of $16.5 million for the three months ended March 31, 2023. The change in cash flows from investing activities was mainly due to an increase in net proceeds from sales of real estate of $102.7 million.

Current wording

Cash flows from investing activities. During the six months ended June 30, 2024, net cash provided by investing activities was $124.5 million compared to net cash used in investing activities of $36.4 million for the six months ended June 30, 2023. The change in cash flows from investing activities was mainly due to two dispositions during the six months ended June 30, 2024 compared to no dispositions during the six months ended June 30, 2023 and a decrease in additions to real estate investments.

Previous wording

Cash flows from financing activities. During the three months ended March 31, 2024, net cash used in financing activities was $90.4 million compared to net cash used in financing activities of $16.1 million for the three months ended March 31, 2023. The change in cash flows from financing activities was mainly due to a net decrease in debt of approximately $74.1 million.

Current wording

Cash flows from financing activities. During the six months ended June 30, 2024, net cash used in financing activities was $154.5 million compared to net cash used in financing activities of $26.4 million for the six months ended June 30, 2023. The change in cash flows from financing activities was mainly due to a net decrease in net debt of approximately $102.8 million and stock repurchases of $14.6 million.

Previous wording

As of March 31, 2024, the Company was invested in a total of 37 multifamily properties, as listed below:

Current wording

As of June 30, 2024, the Company was invested in a total of 36 multifamily properties, as listed below:

Previous wording

Includes 23 down units due to casualty events as of March 31, 2024 (see Note 3).

Current wording

Includes 21 down units due to casualty events as of June 30, 2024 (see Note 3).

Previous wording

Properties classified as held for sale as of March 31, 2024.

Current wording

Property classified as held for sale as of June 30, 2024.

Previous wording

As of March 31, 2024, our subsidiaries had aggregate mortgage debt outstanding to third parties of approximately $1.5 billion at a weighted average interest rate of 6.874% and an adjusted weighted average interest rate of 3.470%. For purposes of calculating the adjusted weighted average interest rate of our mortgage debt outstanding, we have included the weighted average fixed rate of 1.0682% for our combined $1.2 billion notional amount of interest rate swap agreements, which effectively fixes the interest rate on $1.2 billion of our floating rate debt. See Notes 4 and 5 to our consolidated financial statements for additional information.

Current wording

As of June 30, 2024, our subsidiaries had aggregate mortgage debt outstanding to third parties of approximately $1.5 billion at a weighted average interest rate of 6.887% and an adjusted weighted average interest rate of 3.63%. For purposes of calculating the adjusted weighted average interest rate of our mortgage debt outstanding, we have included the weighted average fixed rate of 0.98% Adjusted SOFR on our combined $1.1 billion notional amount of interest rate swap agreements, which effectively fixes the interest rate on $1.1 billion of our floating rate debt. See Notes 4 and 5 to our consolidated financial statements for additional information.

Previous wording

We have entered into and expect to continue to enter into interest rate swap and cap agreements with various third parties to fix or cap the floating interest rates on a majority of our floating rate mortgage debt outstanding. The interest rate swap agreements generally have a term of four to five years and effectively establish a fixed interest rate on debt on the underlying notional amounts. The interest rate swap agreements involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. As of March 31, 2024, interest rate swap agreements effectively covered 79.7% of our $1.5 billion of floating rate debt outstanding.

Current wording

We have entered into and expect to continue to enter into interest rate swap and cap agreements with various third parties to fix or cap the floating interest rates on a majority of our floating rate mortgage debt outstanding. The interest rate swap agreements generally have a term of four to five years and effectively establish a fixed interest rate on debt on the underlying notional amounts. The interest rate swap agreements involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. As of June 30, 2024, interest rate swap agreements effectively covered 75% of our $1.4 billion of floating rate debt outstanding.