MINOT, N.D., May 8, 2019 /PRNewswire/ -- IRET (NYSE: IRET)
announced today its first quarter 2019 financial and operating
results. Net Income (Loss), Funds from Operations ("FFO"),
and Core FFO per share for the three months ended March 31,
2019, are detailed below.
First Quarter 2019 Highlights
- We reported Net Loss, FFO, and Core FFO of $(6.4) million, $10.1
million, and $10.2 million,
respectively, for the quarter ended March
31, 2019, compared to Net Income, FFO, and Core FFO of
$6.7 million, $9.2 million, and $9.5
million for the quarter ended March
31, 2018.
- Same-store revenue increased year-over-year by 4.1%, driven by
2.7% growth in rental revenue;
- Core FFO grew by 8.5%, driven by NOI growth;
- Same-store NOI grew by 4.6%, our sixth consecutive quarter of
year-over-year NOI growth. NOI expansion has been driven by revenue
growth and expense control initiatives;
- Adverse weather-related events impacted many of our markets,
including extreme cold and record-setting snowfall that caused
excess ice and snow accumulation, resulting in water damage to some
of our apartment communities. As a result, we experienced an
increase in same-store expenses of $411,000 for snow removal costs and an increase
in casualty losses of $591,000,
representing the annual stop-loss under our insurance
coverage;
- We repurchased approximately 174,000 common shares for an
aggregate total cost of approximately $8.8
million; and
- We had revenue growth of 3.0% or more in 9 of our 11
markets.
|
|
Three Months
Ended
|
|
|
March
31,
|
Per
Share
|
|
2019
|
|
2018
|
Net Income
(Loss)
|
|
$
|
(0.54)
|
|
|
$
|
0.41
|
|
FFO
|
|
$
|
0.77
|
|
|
$
|
0.68
|
|
Core FFO
|
|
$
|
0.77
|
|
|
$
|
0.71
|
|
|
|
Year-Over-Year
Comparison
|
|
Sequential
Comparison
|
Same-Store
Results
|
|
1Q19 vs.
1Q18
|
|
1Q19 vs.
4Q18
|
Revenues
|
|
4.1
|
%
|
|
0.6
|
%
|
Expenses
|
|
3.6
|
%
|
|
7.2
|
%
|
Net Operating Income
("NOI")
|
|
4.6
|
%
|
|
(4.2)
|
%
|
|
|
Three months
ended
|
Multifamily
Same-Store Results
|
|
March 31,
2019
|
|
December 31,
2018
|
|
March 31,
2018
|
Weighted Average
Occupancy
|
|
95.6
|
%
|
|
94.4
|
%
|
|
94.2
|
%
|
|
|
|
|
|
|
|
|
|
|
"Growth of same-store revenue of 4.1%, same-store NOI of 4.6%,
and Core FFO of 8.5% are outstanding results," said Mark O. Decker Jr., IRET's President and CEO.
"It's exciting to see our focus on resident experience and margin
expansion drive strong financial results. The progress made
to date and the opportunity remaining in our portfolio continues to
motivate our team to further improve our business."
Acquisitions and Dispositions
- On February 26, 2019, we acquired
SouthFork Townhomes, a 272-unit
apartment community located in Lakeville,
Minnesota, for a total purchase price of $44.0 million, with $27.4
million paid in cash and $16.6
million paid through the issuance of convertible preferred
units that have a 3.9% coupon and are convertible, at the holders'
option, into common units at an exchange rate of $72.50 per common unit. The convertible preferred
units also have a put feature that allows the holders to put all or
any of the convertible preferred units to IRET for a cash payment
equal to the issue price.
- On March 29, 2019, we acquired
the remaining 34.5% noncontrolling interests in the real estate
partnership that owns Commons and Landing at Southgate, located in
Minot, North Dakota, for
$1.2 million.
- During the first quarter, we sold one parcel of unimproved land
for a sale price of $3.0
million.
Balance Sheet
At the end of the first quarter, we had $109.0 million of total liquidity on our balance
sheet, including $85.7 million
available under our corporate revolver.
Recent Developments
On April 30, 2019, we redeemed a
total of approximately 129,000 Units from certain Unitholders for
an aggregate purchase price of approximately $7.7 million, representing an average cash
payment of $60.03 per Unit.
Subsequent to quarter-end, we repurchased approximately 15,500
shares at an average price of $58.51
per share between April 1, 2019 and
April 30, 2019. Since authorization
of the share repurchase program in December
2016, we have repurchased approximately 488,000 shares at an
average price of $53.87.
Upcoming Events
IRET is scheduled to participate in the National Association of
Real Estate Investment Trusts ("Nareit") Institutional Investor
Forum in New York from
June 4-6, 2019. IRET's
President and Chief Executive Officer, Mark
O. Decker, Jr., Chief Financial Officer, John Kirchmann, and Chief Operating Officer,
Anne Olson, are scheduled to present
at the conference on June 5, 2019 at
8:45 a.m. EDT. The presentation will
be webcast and will be available on the Investors section of our
website at ir.iretapartments.com. A copy of any materials
provided by IRET at the conference will also be made available on
the Investors section of our website.
Quarterly Distributions
On March 5, 2019, IRET's Board of
Trustees declared a regular quarterly distribution of $0.70 per share/unit payable on April 1, 2019, to common shareholders and
unitholders of record on March 15,
2019. IRET has paid cash dividends to common shareholders and
unitholders every quarter since its initial dividend payment in
1971.
On March 5, 2019, IRET's Board of
Trustees also declared a distribution of $0.4140625 per share on the 6.625% Series C
Cumulative Redeemable Preferred Shares (NYSE: IRET PRC)
payable on April 1, 2019, to holders
of record on March 15, 2019.
Series C preferred share distributions are cumulative and payable
quarterly in arrears at an annual rate of $1.65625 per share.
On March 7, 2019, IRET's Board of
Trustees declared a distribution on the Series D preferred units
payable on April 1, 2019, at the rate
of 3.862% per annum, pro rated from the date of issuance
(February 26, 2019) through
March 31, 2019, to holders of record
as of March 15, 2019. Series D
preferred unit distributions are cumulative and payable quarterly
in arrears at the rate of 3.862% per annum.
Earnings Call
Live webcast and
replay: http://ir.iretapartments.com
|
|
|
|
Live Conference
Call
|
|
Conference Call
Replay
|
Thursday, May 9,
2019, at 10:00 AM ET
|
|
Replay available
until May 23, 2019
|
USA Toll Free
Number
|
1-877-509-9785
|
|
USA Toll Free
Number
|
1-877-344-7529
|
International Toll
Free Number
|
1-412-902-4132
|
|
International Toll
Free Number
|
1-412-317-0088
|
Canada Toll Free
Number
|
1-855-669-9657
|
|
Canada Toll Free
Number
|
1-855-669-9658
|
|
|
|
Conference
Number
|
10130035
|
Supplemental Information
Supplemental Operating and Financial Data for the quarter ended
March 31, 2019 included herein ("Supplemental Information"),
is available in the Investors section on IRET's website at
www.iretapartments.com or by calling Investor Relations at
701-837-7104. Non-GAAP financial measures and other
capitalized terms, as used in this earnings release, are defined
and reconciled in the Supplemental Information that accompanies
this earnings release.
About IRET
IRET is a real estate company focused on the ownership,
management, acquisition, redevelopment, and development of
apartment communities. As of March 31, 2019, we owned
interests in 88 apartment communities consisting of
13,975 apartment homes. IRET's common shares and
Series C preferred shares are publicly traded on the New York Stock
Exchange (NYSE symbols: "IRET" and "IRET PRC,"
respectively).
Forward-Looking Statements
Certain statements in this press release and the accompanying
Supplemental Operating and Financial Data are based on our current
expectations and assumptions, and are "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements do not discuss historical
fact, but instead include statements related to expectations,
projections, intentions or other items related to the future.
Words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates," and variations of those words and
similar expressions are intended to identify forward-looking
statements. These forward-looking statements involve known
and unknown risks, uncertainties, and other factors that may cause
the actual results, performance, or achievements to be materially
different from the results of operations, financial conditions, or
plans expressed or implied by the forward-looking statements.
Although we believe the expectations reflected in our
forward-looking statements are based upon reasonable assumptions,
we can give no assurance that our expectations will be
achieved.
Such risks, uncertainties, and other factors that might cause
such differences include, but are not limited to: intentions and
expectations regarding future distributions on common shares and
units; changes in operating costs; fluctuations in interest rates;
adverse capital and credit market conditions that might affect our
access to various sources of capital and cost of capital; our
ability to manage our current debt levels and repay or refinance
our indebtedness upon maturity or other payment dates; our ability
to maintain financial covenant compliance under our debt
agreements; adequate insurance coverage; the effect of government
regulation; delays or inability to obtain necessary governmental
permits and authorizations; changes in general and local economic
and real estate market conditions; changes in demand for our
properties that may result in lower-than-expected occupancy and/or
rental rates; ability to acquire quality properties in targeted
markets; ability to successfully acquire or dispose of certain
assets; competition for tenants from similar competing properties;
ability to attract and retain skilled personnel; cyber-intrusion;
delays in completing development, redevelopment and/or lease up of
properties and increased costs; ability to maintain effective
internal controls over financial reporting and disclosure controls
and procedures; and those risks and uncertainties detailed from
time to time in our filings with the Securities and Exchange
Commission, including the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Risk Factors"
contained in our Transition Report on Form 10-KT for the transition
period ended December 31, 2018, in
our subsequent quarterly reports on Form 10-Q, and in other
public reports. We assume no obligation to update or
supplement forward-looking statements that become untrue due to
subsequent events.
Contact Information
Jonathan Bishop
Vice President – Finance
Phone: 701-837-7104
E-mail: IR@iret.com
Common Share Data
(NYSE: IRET)
|
|
|
|
1st
Quarter
|
|
4th
Quarter
|
|
3rd
Quarter
|
|
2nd
Quarter
|
|
1st
Quarter
|
|
|
Calendar Year
2019
|
|
Calendar Year
2018
|
|
Calendar Year
2018
|
|
Calendar Year
2018
|
|
Calendar Year
2018
|
High Closing
Price
|
|
$
|
61.50
|
|
|
$
|
59.10
|
|
|
$
|
59.80
|
|
|
$
|
59.40
|
|
|
$
|
58.20
|
|
Low Closing
Price
|
|
$
|
49.92
|
|
|
$
|
47.00
|
|
|
$
|
53.30
|
|
|
$
|
51.30
|
|
|
$
|
46.50
|
|
Average Closing
Price
|
|
$
|
58.11
|
|
|
$
|
53.40
|
|
|
$
|
54.99
|
|
|
$
|
54.50
|
|
|
$
|
52.16
|
|
Closing Price at end
of quarter
|
|
$
|
59.91
|
|
|
$
|
49.07
|
|
|
$
|
59.80
|
|
|
$
|
55.30
|
|
|
$
|
51.90
|
|
Common Share
Distributions – annualized
|
|
$
|
2.80
|
|
|
$
|
2.80
|
|
|
$
|
2.80
|
|
|
$
|
2.80
|
|
|
$
|
2.80
|
|
Closing Dividend
Yield – annualized
|
|
4.7
|
%
|
|
5.7
|
%
|
|
4.7
|
%
|
|
5.1
|
%
|
|
5.4
|
%
|
Closing common shares
outstanding (thousands)
|
|
11,768
|
|
|
11,942
|
|
|
11,961
|
|
|
11,939
|
|
|
11,979
|
|
Closing limited
partnership units outstanding (thousands)
|
|
1,365
|
|
|
1,368
|
|
|
1,379
|
|
|
1,401
|
|
|
1,411
|
|
Closing market value
of outstanding common shares, plus imputed closing market value of
outstanding limited partnership units (thousands)
|
|
$
|
786,798
|
|
|
$
|
653,122
|
|
|
$
|
797,732
|
|
|
$
|
737,702
|
|
|
$
|
694,941
|
|
IRET
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
(in
thousands)
|
|
|
|
3/31/2019
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/2018
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Real estate
investments
|
|
|
|
|
|
|
|
|
|
|
Property
owned
|
|
$
|
1,673,158
|
|
|
$
|
1,627,636
|
|
|
$
|
1,638,909
|
|
|
$
|
1,637,991
|
|
|
$
|
1,692,987
|
|
Less accumulated
depreciation
|
|
(371,672)
|
|
|
(353,871)
|
|
|
(339,515)
|
|
|
(321,468)
|
|
|
(313,763)
|
|
|
|
1,301,486
|
|
|
1,273,765
|
|
|
1,299,394
|
|
|
1,316,523
|
|
|
1,379,224
|
|
Unimproved
land
|
|
2,252
|
|
|
5,301
|
|
|
6,522
|
|
|
10,726
|
|
|
14,250
|
|
Mortgage loans
receivable
|
|
10,260
|
|
|
10,410
|
|
|
10,530
|
|
|
10,955
|
|
|
10,329
|
|
Total real estate
investments
|
|
1,313,998
|
|
|
1,289,476
|
|
|
1,316,446
|
|
|
1,338,204
|
|
|
1,403,803
|
|
Assets held for sale
and assets of discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,840
|
|
|
—
|
|
Cash and cash
equivalents
|
|
23,329
|
|
|
13,792
|
|
|
36,910
|
|
|
20,451
|
|
|
33,817
|
|
Restricted
cash
|
|
4,819
|
|
|
5,464
|
|
|
4,669
|
|
|
4,454
|
|
|
4,053
|
|
Other
assets
|
|
29,166
|
|
|
27,265
|
|
|
28,472
|
|
|
27,882
|
|
|
26,537
|
|
TOTAL
ASSETS
|
|
$
|
1,371,312
|
|
|
$
|
1,335,997
|
|
|
$
|
1,386,497
|
|
|
$
|
1,424,831
|
|
|
$
|
1,468,210
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES,
MEZZANINE EQUITY, AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
Liabilities held for
sale and liabilities of discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
29,624
|
|
|
—
|
|
Accounts payable and
accrued expenses
|
|
$
|
40,697
|
|
|
$
|
40,892
|
|
|
$
|
38,203
|
|
|
36,288
|
|
|
$
|
37,350
|
|
Revolving line of
credit
|
|
118,677
|
|
|
57,500
|
|
|
71,000
|
|
|
145,500
|
|
|
134,500
|
|
Term loans payable,
net of loan costs
|
|
144,036
|
|
|
143,991
|
|
|
143,937
|
|
|
69,531
|
|
|
69,504
|
|
Mortgages payable,
net of loan costs
|
|
430,950
|
|
|
444,197
|
|
|
463,052
|
|
|
465,244
|
|
|
511,683
|
|
TOTAL
LIABILITIES
|
|
734,360
|
|
|
686,580
|
|
|
716,192
|
|
|
746,187
|
|
|
753,037
|
|
|
|
|
|
|
|
|
|
|
|
|
REDEEMABLE
NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE
ENTITIES
|
|
—
|
|
|
5,968
|
|
|
6,130
|
|
|
6,261
|
|
|
6,706
|
|
SERIES D PREFERRED
UNITS
|
|
16,560
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
|
Series C Preferred
Shares of Beneficial Interest
|
|
99,456
|
|
|
99,456
|
|
|
99,456
|
|
|
99,456
|
|
|
99,456
|
|
Common Shares of
Beneficial Interest
|
|
895,381
|
|
|
899,234
|
|
|
900,368
|
|
|
899,480
|
|
|
901,312
|
|
Accumulated
distributions in excess of net income
|
|
(443,661)
|
|
|
(429,048)
|
|
|
(414,900)
|
|
|
(407,482)
|
|
|
(377,871)
|
|
Accumulated other
comprehensive income
|
|
(3,139)
|
|
|
(856)
|
|
|
2,760
|
|
|
1,748
|
|
|
1,283
|
|
Total shareholders'
equity
|
|
548,037
|
|
|
568,786
|
|
|
587,684
|
|
|
593,202
|
|
|
624,180
|
|
Noncontrolling
interests – Operating Partnership
|
|
66,060
|
|
|
67,916
|
|
|
69,578
|
|
|
71,066
|
|
|
75,161
|
|
Noncontrolling
interests – consolidated real estate entities
|
|
6,295
|
|
|
6,747
|
|
|
6,913
|
|
|
8,115
|
|
|
9,126
|
|
Total
equity
|
|
620,392
|
|
|
643,449
|
|
|
664,175
|
|
|
672,383
|
|
|
708,467
|
|
TOTAL LIABILITIES,
MEZZANINE EQUITY, AND EQUITY
|
|
$
|
1,371,312
|
|
|
$
|
1,335,997
|
|
|
$
|
1,386,497
|
|
|
$
|
1,424,831
|
|
|
$
|
1,468,210
|
|
IRET
RECONCILIATION OF NET
OPERATING INCOME TO THE
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in
thousands)
|
|
|
|
Three Months
Ended
|
|
|
3/31/19
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/18
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Same-store
|
|
$
|
39,612
|
|
|
$
|
39,385
|
|
|
$
|
38,727
|
|
|
$
|
38,804
|
|
|
$
|
38,048
|
|
Non-same-store
|
|
5,202
|
|
|
4,608
|
|
|
4,687
|
|
|
4,345
|
|
|
2,006
|
|
Other properties and
dispositions
|
|
794
|
|
|
1,737
|
|
|
1,992
|
|
|
3,048
|
|
|
2,981
|
|
Total
revenue
|
|
45,608
|
|
|
45,730
|
|
|
45,406
|
|
|
46,197
|
|
|
43,035
|
|
Property operating
expenses, including real estate taxes
|
|
|
|
|
|
|
|
|
|
|
Same-store
|
|
17,806
|
|
|
16,617
|
|
|
16,980
|
|
|
16,345
|
|
|
17,191
|
|
Non-same-store
|
|
1,882
|
|
|
1,403
|
|
|
1,696
|
|
|
1,481
|
|
|
937
|
|
Other properties and
dispositions
|
|
348
|
|
|
370
|
|
|
811
|
|
|
1,111
|
|
|
1,139
|
|
Total property
operating expenses, including real estate taxes
|
|
20,036
|
|
|
18,390
|
|
|
19,487
|
|
|
18,937
|
|
|
19,267
|
|
Net operating income
(NOI)
|
|
|
|
|
|
|
|
|
|
|
Same-store
|
|
21,806
|
|
|
22,768
|
|
|
21,747
|
|
|
22,459
|
|
|
20,857
|
|
Non-same-store
|
|
3,320
|
|
|
3,205
|
|
|
2,991
|
|
|
2,864
|
|
|
1,069
|
|
Other properties and
dispositions
|
|
446
|
|
|
1,367
|
|
|
1,181
|
|
|
1,937
|
|
|
1,842
|
|
Net operating
income
|
|
$
|
25,572
|
|
|
$
|
27,340
|
|
|
$
|
25,919
|
|
|
$
|
27,260
|
|
|
$
|
23,768
|
|
Property
management
|
|
(1,554)
|
|
|
(1,447)
|
|
|
(1,269)
|
|
|
(1,444)
|
|
|
(1,377)
|
|
Casualty gain
(loss)
|
|
(641)
|
|
|
(540)
|
|
|
(225)
|
|
|
—
|
|
|
(50)
|
|
Depreciation/amortization
|
|
(18,111)
|
|
|
(18,812)
|
|
|
(19,164)
|
|
|
(19,132)
|
|
|
(20,516)
|
|
Impairment of real
estate investments
|
|
—
|
|
|
(1,221)
|
|
|
—
|
|
|
(17,809)
|
|
|
—
|
|
General and
administrative expenses
|
|
(3,806)
|
|
|
(3,769)
|
|
|
(3,147)
|
|
|
(4,348)
|
|
|
(3,619)
|
|
Interest
expense
|
|
(7,896)
|
|
|
(7,682)
|
|
|
(8,193)
|
|
|
(8,562)
|
|
|
(8,296)
|
|
Loss on debt
extinguishment
|
|
(2)
|
|
|
(5)
|
|
|
(540)
|
|
|
(12)
|
|
|
(121)
|
|
Interest and other
income
|
|
424
|
|
|
483
|
|
|
395
|
|
|
460
|
|
|
689
|
|
Income (loss) before
gain (loss) on sale of real estate and other investments and income
(loss) from discontinued operations
|
|
(6,014)
|
|
|
(5,653)
|
|
|
(6,224)
|
|
|
(23,587)
|
|
|
(9,522)
|
|
Gain (loss) on sale
of real estate and other investments
|
|
54
|
|
|
612
|
|
|
9,095
|
|
|
—
|
|
|
2,304
|
|
Income (loss) from
continuing operations
|
|
(5,960)
|
|
|
(5,041)
|
|
|
2,871
|
|
|
(23,587)
|
|
|
(7,218)
|
|
Income (loss) from
discontinued operations
|
|
—
|
|
|
—
|
|
|
570
|
|
|
238
|
|
|
13,882
|
|
Net income
(loss)
|
|
$
|
(5,960)
|
|
|
$
|
(5,041)
|
|
|
$
|
3,441
|
|
|
$
|
(23,349)
|
|
|
$
|
6,664
|
|
Dividends to
preferred series D unitholders
|
|
(57)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net (income) loss
attributable to noncontrolling interests – Operating
Partnership
|
|
743
|
|
|
665
|
|
|
(112)
|
|
|
2,580
|
|
|
(580)
|
|
Net (income) loss
attributable to noncontrolling interests – consolidated real estate
entities
|
|
576
|
|
|
270
|
|
|
(676)
|
|
|
595
|
|
|
520
|
|
Net income (loss)
attributable to controlling interests
|
|
(4,698)
|
|
|
(4,106)
|
|
|
2,653
|
|
|
(20,174)
|
|
|
6,604
|
|
Dividends to
preferred shareholders
|
|
(1,705)
|
|
|
(1,705)
|
|
|
(1,705)
|
|
|
(1,706)
|
|
|
(1,705)
|
|
NET INCOME (LOSS)
AVAILABLE TO COMMON SHAREHOLDERS
|
|
$
|
(6,403)
|
|
|
$
|
(5,811)
|
|
|
$
|
948
|
|
|
$
|
(21,880)
|
|
|
$
|
4,899
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share from continuing operations – basic &
diluted
|
|
$
|
(0.54)
|
|
|
$
|
(0.49)
|
|
|
$
|
0.04
|
|
|
$
|
(1.85)
|
|
|
$
|
(0.63)
|
|
Earnings (loss) per
common share from discontinued operations – basic &
diluted
|
|
—
|
|
|
—
|
|
|
0.04
|
|
|
0.02
|
|
|
1.04
|
|
Net income (loss) per
common share – basic & diluted
|
|
$
|
(0.54)
|
|
|
$
|
(0.49)
|
|
|
$
|
0.08
|
|
|
$
|
(1.83)
|
|
|
$
|
0.41
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
Revenues
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses, including real estate taxes
|
|
43.9
|
%
|
|
40.2
|
%
|
|
42.9
|
%
|
|
41.0
|
%
|
|
44.8
|
%
|
General and
administrative expenses
|
|
8.3
|
%
|
|
8.2
|
%
|
|
6.9
|
%
|
|
9.4
|
%
|
|
8.4
|
%
|
Interest
|
|
17.3
|
%
|
|
16.8
|
%
|
|
18.0
|
%
|
|
18.5
|
%
|
|
19.3
|
%
|
Income (loss) from
discontinued operations
|
|
—
|
%
|
|
—
|
%
|
|
1.3
|
%
|
|
0.5
|
%
|
|
32.3
|
%
|
Net income
(loss)
|
|
(13.1)
|
%
|
|
(11.0)
|
%
|
|
7.6
|
%
|
|
(50.5)
|
%
|
|
15.5
|
%
|
IRET
RECONCILIATION OF NET
INCOME AVAILABLE TO
COMMON SHAREHOLDERS
TO FFO AND CORE FFO (unaudited)
(in thousands,
except per share and unit amounts)
|
|
|
|
Three Months Ended
|
|
|
3/31/2019
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/2018
|
Funds From
Operations(1)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
available to common shareholders
|
|
$
|
(6,403)
|
|
|
$
|
(5,811)
|
|
|
$
|
948
|
|
|
$
|
(21,880)
|
|
|
$
|
4,899
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interests – Operating Partnership
|
|
(743)
|
|
|
(665)
|
|
|
112
|
|
|
(2,580)
|
|
|
580
|
|
Depreciation and
amortization
|
|
18,111
|
|
|
18,812
|
|
|
19,164
|
|
|
19,132
|
|
|
20,518
|
|
Less depreciation –
non real estate
|
|
(85)
|
|
|
(76)
|
|
|
(76)
|
|
|
(76)
|
|
|
(79)
|
|
Less depreciation –
partially owned entities
|
|
(678)
|
|
|
(680)
|
|
|
(673)
|
|
|
(719)
|
|
|
(723)
|
|
Impairment of real
estate
|
|
—
|
|
|
1,221
|
|
|
—
|
|
|
17,809
|
|
|
—
|
|
Gain on sale of real
estate
|
|
(54)
|
|
|
(612)
|
|
|
(8,499)
|
|
|
(98)
|
|
|
(16,036)
|
|
FFO applicable to
common shares and Units
|
|
$
|
10,148
|
|
|
$
|
12,189
|
|
|
$
|
10,976
|
|
|
$
|
11,588
|
|
|
$
|
9,159
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per share and
unit – basic and diluted
|
|
$
|
0.77
|
|
|
$
|
0.92
|
|
|
$
|
0.82
|
|
|
$
|
0.87
|
|
|
$
|
0.68
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to Core
FFO:
|
|
|
|
|
|
|
|
|
|
|
Casualty loss write
off
|
|
—
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Loss on
extinguishment of debt
|
|
2
|
|
|
5
|
|
|
540
|
|
|
12
|
|
|
121
|
|
Severance and
transition costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
586
|
|
|
225
|
|
Core FFO
applicable to common shares and Units
|
|
$
|
10,150
|
|
|
$
|
12,237
|
|
|
$
|
11,516
|
|
|
$
|
12,186
|
|
|
$
|
9,505
|
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO per share
and unit – basic and diluted
|
|
$
|
0.77
|
|
|
$
|
0.92
|
|
|
$
|
0.86
|
|
|
$
|
0.91
|
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares and units
|
|
13,130
|
|
|
13,317
|
|
|
13,318
|
|
|
13,335
|
|
|
13,396
|
|
|
(1)
|
See Definitions
section.
|
IRET
RECONCILIATION OF NET
INCOME AVAILABLE TO
COMMON SHAREHOLDERS
TO ADJUSTED EARNINGS BEFORE INTEREST,
TAXES, DEPRECIATION,
AND AMORTIZATION (ADJUSTED EBITDA) (unaudited)
(in
thousands)
|
|
|
|
Three Months Ended
|
|
|
3/31/2019
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/2018
|
Adjusted
EBITDA(1)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
available to common shareholders
|
|
$
|
(4,698)
|
|
|
$
|
(4,106)
|
|
|
$
|
2,653
|
|
|
$
|
(20,174)
|
|
|
$
|
6,604
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Dividends to
preferred unitholders
|
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Noncontrolling
interests – Operating Partnership
|
|
(743)
|
|
|
(665)
|
|
|
112
|
|
|
(2,580)
|
|
|
580
|
|
Income (loss) before
noncontrolling interests – Operating Partnership
|
|
(5,384)
|
|
|
(4,771)
|
|
|
2,765
|
|
|
(22,754)
|
|
|
7,184
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
7,558
|
|
|
7,336
|
|
|
7,828
|
|
|
8,148
|
|
|
7,881
|
|
Loss on
extinguishment of debt
|
|
2
|
|
|
4
|
|
|
541
|
|
|
11
|
|
|
121
|
|
Depreciation/amortization related to real estate
investments
|
|
17,433
|
|
|
18,133
|
|
|
18,491
|
|
|
18,413
|
|
|
19,795
|
|
Impairment of real
estate investments
|
|
—
|
|
|
1,221
|
|
|
—
|
|
|
17,809
|
|
|
—
|
|
Interest
income
|
|
(407)
|
|
|
(465)
|
|
|
(366)
|
|
|
(429)
|
|
|
(673)
|
|
Gain (loss) on sale
of real estate and other investments
|
|
(54)
|
|
|
(611)
|
|
|
(8,499)
|
|
|
(98)
|
|
|
(16,036)
|
|
Adjusted
EBITDA
|
|
$
|
19,148
|
|
|
$
|
20,847
|
|
|
$
|
20,760
|
|
|
$
|
21,100
|
|
|
$
|
18,272
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)/Interest expense
|
|
2.43
|
x
|
|
2.71
|
x
|
|
2.53
|
x
|
|
2.46
|
x
|
|
2.20
|
x
|
Adjusted
EBITDA(1)/Interest expense plus preferred
distributions
|
|
1.98
|
x
|
|
2.22
|
x
|
|
2.10
|
x
|
|
2.05
|
x
|
|
1.83
|
x
|
IRET
DEBT
ANALYSIS
(in
thousands)
|
|
Debt Maturity
Schedule
Annual
Expirations
|
|
|
|
Future Maturities of Debt
|
|
|
Fixed
Debt
|
|
Variable
Debt
|
|
Total
Debt
|
|
Weighted
Average(1)
|
|
% of
Total Debt
|
2019
|
|
$
|
19,068
|
|
|
—
|
|
|
$
|
19,068
|
|
|
5.72
|
%
|
|
2.7
|
%
|
2020
|
|
70,359
|
|
|
—
|
|
|
70,359
|
|
|
5.43
|
%
|
|
10.1
|
%
|
2021
|
|
103,702
|
|
|
—
|
|
|
103,702
|
|
|
5.24
|
%
|
|
14.9
|
%
|
2022
|
|
38,589
|
|
|
—
|
|
|
38,589
|
|
|
4.00
|
%
|
|
5.5
|
%
|
2023
|
|
49,093
|
|
|
—
|
|
|
49,093
|
|
|
4.02
|
%
|
|
7.1
|
%
|
Thereafter
|
|
151,777
|
|
|
—
|
|
|
151,777
|
|
|
3.85
|
%
|
|
21.8
|
%
|
Total mortgage
debt
|
|
$
|
432,588
|
|
|
—
|
|
|
$
|
432,588
|
|
|
4.54
|
%
|
|
62.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Primary line of
credit(2)
|
|
—
|
|
|
$
|
99,200
|
|
|
99,200
|
|
|
3.89
|
%
|
|
14.2
|
%
|
Operating line of
credit(2)
|
|
—
|
|
|
4,477
|
|
|
4,477
|
|
|
4.40
|
%
|
|
0.7
|
%
|
Secured line of
credit(2)(3)
|
|
—
|
|
|
15,000
|
|
|
15,000
|
|
|
3.89
|
%
|
|
2.2
|
%
|
Term
loans(4)
|
|
145,000
|
|
|
—
|
|
|
145,000
|
|
|
3.99
|
%
|
|
20.8
|
%
|
Total debt
|
|
$
|
577,588
|
|
|
$
|
118,677
|
|
|
$
|
696,265
|
|
|
4.32
|
%
|
|
100.0
|
%
|
|
(1)
|
Weighted average
interest rate of debt that matures during the year.
|
(2)
|
Our primary line of
credit matures on August 31, 2022. Our operating line of
credit matures on April 1, 2020.
|
(3)
|
Our primary revolving
line of credit consists primarily of unsecured borrowings. A
portion of the line was secured in connection with our acquisition
of SouthFork Townhomes, under an agreement which allowed us to
offer the seller tax protection upon purchase.
|
(4)
|
Term loans have
variable interest rates that are fixed with interest rate swaps
that mature on January 31, 2023, January 15, 2024, and August 31,
2025.
|
|
|
3/31/2019
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/2018
|
Debt Balances
Outstanding(1)
|
|
|
|
|
|
|
|
|
|
|
Secured fixed
rate
|
|
$
|
432,588
|
|
|
$
|
445,974
|
|
|
$
|
464,964
|
|
|
$
|
473,546
|
|
|
$
|
491,002
|
|
Secured variable
rate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,620
|
|
|
22,955
|
|
Unsecured lines of
credit
|
|
103,677
|
|
|
57,500
|
|
|
71,000
|
|
|
145,500
|
|
|
134,500
|
|
Secured line of
credit(2)
|
|
15,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Unsecured term
loans
|
|
145,000
|
|
|
145,000
|
|
|
145,000
|
|
|
70,000
|
|
|
70,000
|
|
Debt total
|
|
$
|
696,265
|
|
|
$
|
648,474
|
|
|
$
|
680,964
|
|
|
$
|
711,666
|
|
|
$
|
718,457
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage Debt
Weighted Average Interest Rate
|
|
4.54
|
%
|
|
4.58
|
%
|
|
4.65
|
%
|
|
4.67
|
%
|
|
4.69
|
%
|
Primary Line of
Credit Rate
|
|
3.89
|
%
|
|
3.72
|
%
|
|
3.67
|
%
|
|
3.76
|
%
|
|
3.47
|
%
|
Operating Line of
Credit Rate
|
|
4.40
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Term Loan
Rate
|
|
3.99
|
%
|
|
4.01
|
%
|
|
3.97
|
%
|
|
4.11
|
|
|
4.07
|
|
|
(1)
|
Includes mortgages on
properties held for sale.
|
(2)
|
Our revolving line of
credit consists primarily of unsecured borrowings. A portion of the
line was secured in connection with our acquisition of SouthFork
Townhomes, under an agreement which allowed us to offer the seller
tax protection upon purchase.
|
IRET
CAPITAL
ANALYSIS
(in thousands,
except per share and unit amounts)
|
|
|
|
Three Months Ended
|
|
|
3/31/2019
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/2018
|
Equity
Capitalization
|
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding
|
|
11,768
|
|
|
11,942
|
|
|
11,961
|
|
|
11,939
|
|
|
11,979
|
|
Operating partnership
units outstanding
|
|
1,365
|
|
|
1,368
|
|
|
1,379
|
|
|
1,401
|
|
|
1,411
|
|
Total common shares
and units outstanding
|
|
13,133
|
|
|
13,310
|
|
|
13,340
|
|
|
13,340
|
|
|
13,390
|
|
Market price per
common share (closing price at end of period)
|
|
$
|
59.91
|
|
|
$
|
49.07
|
|
|
$
|
59.80
|
|
|
$
|
55.30
|
|
|
$
|
51.90
|
|
Equity
capitalization-common shares and units
|
|
786,798
|
|
|
653,122
|
|
|
797,732
|
|
|
737,702
|
|
|
694,941
|
|
Recorded book value
of preferred shares
|
|
$
|
99,456
|
|
|
$
|
99,456
|
|
|
$
|
99,456
|
|
|
$
|
99,456
|
|
|
$
|
99,456
|
|
Total equity
capitalization
|
|
$
|
886,254
|
|
|
$
|
752,578
|
|
|
$
|
897,188
|
|
|
$
|
837,158
|
|
|
$
|
794,397
|
|
|
|
|
|
|
|
|
|
|
|
|
Series D Preferred
Units
|
|
$
|
16,560
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
Capitalization
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
$
|
696,265
|
|
|
$
|
648,474
|
|
|
$
|
680,964
|
|
|
$
|
711,666
|
|
|
$
|
718,457
|
|
Total
capitalization
|
|
$
|
1,599,079
|
|
|
$
|
1,401,052
|
|
|
$
|
1,578,152
|
|
|
$
|
1,548,824
|
|
|
$
|
1,512,854
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt to total
capitalization
|
|
0.44:1
|
|
|
0.46:1
|
|
|
0.43:1
|
|
|
0.46:1
|
|
|
0.47:1
|
|
|
|
|
|
Three Months Ended
|
|
|
3/31/2019
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/2018
|
Debt service coverage
ratio(1)
|
|
1.86
|
x
|
|
2.07
|
x
|
|
1.96
|
x
|
|
1.83
|
x
|
|
1.36
|
x
|
|
|
|
|
|
|
|
|
|
|
|
Distribution
Data
|
|
|
|
|
|
|
|
|
|
|
Common shares and
Units outstanding at record date
|
|
13,135
|
|
|
13,276
|
|
|
13,340
|
|
|
13,340
|
|
|
13,363
|
|
Total common
distribution declared
|
|
$
|
9,195
|
|
|
$
|
9,293
|
|
|
$
|
9,339
|
|
|
$
|
9,345
|
|
|
$
|
9,395
|
|
Common distribution
per share and Unit
|
|
$
|
0.70
|
|
|
$
|
0.70
|
|
|
$
|
0.70
|
|
|
$
|
0.70
|
|
|
$
|
0.70
|
|
Payout ratio (FFO per
share and Unit basis)(1)
|
|
90.9
|
%
|
|
76.1
|
%
|
|
85.4
|
%
|
|
80.5
|
%
|
|
102.9
|
%
|
Payout ratio (Core
FFO per share and Unit basis)(1)
|
|
90.9
|
%
|
|
76.1
|
%
|
|
81.4
|
%
|
|
76.9
|
%
|
|
98.6
|
%
|
|
(1)
|
See Definitions
section.
|
IRET
RECONCILIATION OF NET
OPERATING INCOME TO THE
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
QUARTERLY
COMPARISON
(in
thousands)
|
|
The following table
reconciles NOI and our same-store NOI to net income (loss) (the
most directly comparable GAAP financial measure) for the periods
shown below:
|
|
|
(in thousands, except percentages)
|
|
Three Months Ended
March 31,
|
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
|
|
|
|
|
|
|
Real estate
revenue
|
|
|
|
|
|
|
|
Same-store
|
$
|
39,612
|
|
|
$
|
38,048
|
|
|
$
|
1,564
|
|
|
4.1
|
%
|
Non-same-store
|
5,202
|
|
|
2,006
|
|
|
3,196
|
|
|
159.3
|
%
|
Other properties and
dispositions
|
794
|
|
|
2,981
|
|
|
(2,187)
|
|
|
(73.4)
|
%
|
Total
|
$
|
45,608
|
|
|
$
|
43,035
|
|
|
$
|
2,573
|
|
|
6.0
|
%
|
|
|
|
|
|
|
|
|
Real estate
expenses
|
|
|
|
|
|
|
|
Same-store
|
$
|
17,806
|
|
|
$
|
17,191
|
|
|
$
|
615
|
|
|
3.6
|
%
|
Non-same-store
|
1,882
|
|
|
937
|
|
|
945
|
|
|
100.9
|
%
|
Other properties and
dispositions
|
348
|
|
|
1,139
|
|
|
(791)
|
|
|
(69.4)
|
%
|
Total
|
$
|
20,036
|
|
|
$
|
19,267
|
|
|
$
|
769
|
|
|
4.0
|
%
|
|
|
|
|
|
|
|
|
Net operating
income
|
|
|
|
|
|
|
|
Same-store
|
$
|
21,806
|
|
|
$
|
20,857
|
|
|
$
|
949
|
|
|
4.6
|
%
|
Non-same-store
|
3,320
|
|
|
1,069
|
|
|
2,251
|
|
|
210.6
|
%
|
Other properties and
dispositions
|
446
|
|
|
1,842
|
|
|
(1,396)
|
|
|
(75.8)
|
%
|
Total
|
$
|
25,572
|
|
|
$
|
23,768
|
|
|
$
|
1,804
|
|
|
7.6
|
%
|
|
|
|
|
|
|
|
|
Reconciliation of NOI
to net income (loss) available to common shareholders
|
|
|
|
|
|
|
|
Property
management
|
(1,554)
|
|
|
(1,377)
|
|
|
177
|
|
|
12.9
|
%
|
Casualty
loss
|
(641)
|
|
|
(50)
|
|
|
591
|
|
|
1,182.0
|
%
|
Depreciation/amortization
|
(18,111)
|
|
|
(20,516)
|
|
|
(2,405)
|
|
|
(11.7)
|
%
|
General and
administrative expenses
|
(3,806)
|
|
|
(3,619)
|
|
|
187
|
|
|
5.2
|
%
|
Interest
expense
|
(7,896)
|
|
|
(8,296)
|
|
|
(400)
|
|
|
(4.8)
|
%
|
Loss on debt
extinguishment
|
(2)
|
|
|
(121)
|
|
|
(119)
|
|
|
(98.3)
|
%
|
Interest and other
income
|
424
|
|
|
689
|
|
|
265
|
|
|
(38.5)
|
%
|
Income (loss) before
gain (loss) on sale of real estate and other investments and income
(loss) from discontinued operations
|
(6,014)
|
|
|
(9,522)
|
|
|
3,508
|
|
|
36.8
|
%
|
Gain (loss) on sale
of real estate and other investments
|
54
|
|
|
2,304
|
|
|
(2,250)
|
|
|
(97.7)
|
%
|
Income (loss) from
continuing operations
|
(5,960)
|
|
|
(7,218)
|
|
|
1,258
|
|
|
(17.4)
|
%
|
Income (loss) from
discontinued operations
|
—
|
|
|
13,882
|
|
|
(13,882)
|
|
|
(100.0)
|
%
|
Net income
(loss)
|
$
|
(5,960)
|
|
|
$
|
6,664
|
|
|
(12,624)
|
|
|
(189.4)
|
%
|
Dividends to
preferred unitholders
|
(57)
|
|
|
—
|
|
|
(57)
|
|
|
100.0
|
%
|
Net (income) loss
attributable to noncontrolling interests – Operating
Partnership
|
743
|
|
|
(580)
|
|
|
1,323
|
|
|
(228.1)
|
%
|
Net (income) loss
attributable to noncontrolling interests – consolidated real estate
entities
|
576
|
|
|
520
|
|
|
56
|
|
|
10.8
|
%
|
Net income (loss)
attributable to controlling interests
|
(4,698)
|
|
|
6,604
|
|
|
(11,302)
|
|
|
(171.1)
|
%
|
Dividends to
preferred shareholders
|
(1,705)
|
|
|
(1,705)
|
|
|
—
|
|
|
—
|
%
|
NET INCOME (LOSS)
AVAILABLE TO COMMON SHAREHOLDERS
|
$
|
(6,403)
|
|
|
$
|
4,899
|
|
|
$
|
(11,302)
|
|
|
(230.7)
|
%
|
IRET
SAME-STORE FIRST
QUARTER COMPARISONS
(in thousands,
except property data amounts)
|
|
|
|
Apartment
Homes
Included
|
|
Revenues
|
|
Expenses
|
|
NOI
|
Regions
|
|
|
CY19Q1
|
|
CY18Q1
|
|
%
Change
|
|
CY19Q1
|
|
CY18Q1
|
|
%
Change
|
|
CY19Q1
|
|
CY18Q1
|
|
%
Change
|
Minneapolis,
MN
|
|
1,796
|
|
|
$
|
7,689
|
|
|
$
|
7,184
|
|
|
7.0
|
%
|
|
$
|
3,148
|
|
|
$
|
2,964
|
|
|
6.2
|
%
|
|
$
|
4,541
|
|
|
$
|
4,220
|
|
|
7.6
|
%
|
Rochester,
MN
|
|
1,711
|
|
|
6,225
|
|
|
6,039
|
|
|
3.1
|
%
|
|
2,454
|
|
|
2,549
|
|
|
(3.7)
|
%
|
|
3,771
|
|
|
3,490
|
|
|
8.1
|
%
|
Omaha, NE
|
|
1,370
|
|
|
3,754
|
|
|
3,632
|
|
|
3.4
|
%
|
|
1,774
|
|
|
1,626
|
|
|
9.1
|
%
|
|
1,980
|
|
|
2,006
|
|
|
(1.3)
|
%
|
Grand Forks,
ND
|
|
1,555
|
|
|
4,141
|
|
|
4,190
|
|
|
(1.2)
|
%
|
|
2,166
|
|
|
2,041
|
|
|
6.1
|
%
|
|
1,975
|
|
|
2,149
|
|
|
(8.1)
|
%
|
Bismarck,
ND
|
|
1,259
|
|
|
3,602
|
|
|
3,483
|
|
|
3.4
|
%
|
|
1,717
|
|
|
1,568
|
|
|
9.5
|
%
|
|
1,885
|
|
|
1,915
|
|
|
(1.6)
|
%
|
St. Cloud,
MN
|
|
1,190
|
|
|
3,474
|
|
|
3,310
|
|
|
5.0
|
%
|
|
1,808
|
|
|
1,615
|
|
|
12.0
|
%
|
|
1,666
|
|
|
1,695
|
|
|
(1.7)
|
%
|
Topeka, KS
|
|
1,042
|
|
|
2,556
|
|
|
2,418
|
|
|
5.7
|
%
|
|
1,105
|
|
|
993
|
|
|
11.3
|
%
|
|
1,451
|
|
|
1,425
|
|
|
1.8
|
%
|
Sioux Falls,
SD
|
|
969
|
|
|
2,529
|
|
|
2,442
|
|
|
3.6
|
%
|
|
1,193
|
|
|
1,274
|
|
|
(6.4)
|
%
|
|
1,336
|
|
|
1,168
|
|
|
14.4
|
%
|
Billings,
MT
|
|
770
|
|
|
2,156
|
|
|
1,977
|
|
|
9.1
|
%
|
|
858
|
|
|
826
|
|
|
3.9
|
%
|
|
1,298
|
|
|
1,151
|
|
|
12.8
|
%
|
Minot, ND
|
|
712
|
|
|
2,118
|
|
|
2,061
|
|
|
2.8
|
%
|
|
1,007
|
|
|
1,186
|
|
|
(15.1)
|
%
|
|
1,111
|
|
|
875
|
|
|
27.0
|
%
|
Rapid City,
SD
|
|
474
|
|
|
1,367
|
|
|
1,312
|
|
|
4.2
|
%
|
|
576
|
|
|
550
|
|
|
4.7
|
%
|
|
791
|
|
|
762
|
|
|
3.8
|
%
|
Same-Store
Total
|
|
12,848
|
|
|
$
|
39,611
|
|
|
$
|
38,048
|
|
|
4.1
|
%
|
|
$
|
17,806
|
|
|
$
|
17,192
|
|
|
3.6
|
%
|
|
$
|
21,805
|
|
|
$
|
20,856
|
|
|
4.6
|
%
|
|
|
Apartment
Homes
Included
|
|
Weighted Average
Occupancy (1)
|
|
Weighted Average
Monthly
Rental Rate (2)
|
|
Weighted Average
Monthly
Revenue per Occupied Home (3)
|
Regions
|
|
|
CY19Q1
|
|
CY18Q1
|
|
Growth
|
|
CY19Q1
|
|
CY18Q1
|
|
%
Change
|
|
CY19Q1
|
|
CY18Q1
|
|
%
Change
|
Minneapolis,
MN
|
|
1,796
|
|
|
94.8
|
%
|
|
92.4
|
%
|
|
2.4
|
%
|
|
$
|
1,408
|
|
|
$
|
1,367
|
|
|
3.0
|
%
|
|
$
|
1,505
|
|
|
$
|
1,443
|
|
|
4.3
|
%
|
Rochester,
MN
|
|
1,711
|
|
|
96.5
|
%
|
|
94.5
|
%
|
|
2.0
|
%
|
|
1,207
|
|
|
1,216
|
|
|
(0.7)
|
%
|
|
1,257
|
|
|
1,244
|
|
|
1.0
|
%
|
Omaha, NE
|
|
1,370
|
|
|
95.3
|
%
|
|
95.4
|
%
|
|
(0.1)
|
%
|
|
875
|
|
|
857
|
|
|
2.1
|
%
|
|
959
|
|
|
927
|
|
|
3.5
|
%
|
Grand Forks,
ND
|
|
1,555
|
|
|
93.8
|
%
|
|
95.0
|
%
|
|
(1.2)
|
%
|
|
903
|
|
|
908
|
|
|
(0.6)
|
%
|
|
946
|
|
|
945
|
|
|
0.1
|
%
|
Bismarck,
ND
|
|
1,259
|
|
|
96.4
|
%
|
|
93.2
|
%
|
|
3.2
|
%
|
|
942
|
|
|
959
|
|
|
(1.8)
|
%
|
|
990
|
|
|
989
|
|
|
0.1
|
%
|
St. Cloud,
MN
|
|
1,190
|
|
|
95.7
|
%
|
|
94.9
|
%
|
|
0.8
|
%
|
|
939
|
|
|
904
|
|
|
3.9
|
%
|
|
1,016
|
|
|
977
|
|
|
4.0
|
%
|
Topeka, KS
|
|
1,042
|
|
|
96.7
|
%
|
|
94.4
|
%
|
|
2.3
|
%
|
|
810
|
|
|
799
|
|
|
1.4
|
%
|
|
846
|
|
|
819
|
|
|
3.3
|
%
|
Sioux Falls,
SD
|
|
969
|
|
|
95.3
|
%
|
|
95.7
|
%
|
|
(0.4)
|
%
|
|
850
|
|
|
816
|
|
|
4.2
|
%
|
|
913
|
|
|
878
|
|
|
4.0
|
%
|
Billings,
MT
|
|
770
|
|
|
96.2
|
%
|
|
90.4
|
%
|
|
5.8
|
%
|
|
902
|
|
|
906
|
|
|
(0.4)
|
%
|
|
971
|
|
|
947
|
|
|
2.5
|
%
|
Minot, ND
|
|
712
|
|
|
95.8
|
%
|
|
95.9
|
%
|
|
(0.1)
|
%
|
|
993
|
|
|
997
|
|
|
(0.4)
|
%
|
|
1,035
|
|
|
1,006
|
|
|
2.9
|
%
|
Rapid City,
SD
|
|
474
|
|
|
96.9
|
%
|
|
96.5
|
%
|
|
0.4
|
%
|
|
931
|
|
|
901
|
|
|
3.3
|
%
|
|
991
|
|
|
956
|
|
|
3.7
|
%
|
Same-Store
Total
|
|
12,848
|
|
|
95.6
|
%
|
|
94.2
|
%
|
|
1.4
|
%
|
|
$
|
1,013
|
|
|
$
|
1,001
|
|
|
1.2
|
%
|
|
$
|
1,075
|
|
|
$
|
1,048
|
|
|
2.7
|
%
|
|
|
(1)
|
Weighted average
occupancy is defined as the percentage resulting from dividing
actual rental revenue by scheduled rent.
|
(2)
|
Weighted average
monthly rental rate is scheduled rental revenue divided by the
total number of apartment homes. See definition of scheduled
rental revenue in the Definitions section.
|
(3)
|
Weighted average
monthly revenue per occupied home is defined as total rental
revenues divided by the weighted average occupied apartment units
for the period.
|
IRET
SAME-STORE SEQUENTIAL
QUARTER COMPARISONS
(in thousands,
except property data amounts)
|
|
|
|
Apartment
Homes
Included
|
|
Revenues
|
|
Expenses
|
|
NOI
|
Regions
|
|
|
CY19Q1
|
|
CY18Q4
|
|
%
Change
|
|
CY19Q1
|
|
CY18Q4
|
|
%
Change
|
|
CY19Q1
|
|
CY18Q4
|
|
%
Change
|
Minneapolis,
MN
|
|
1,796
|
|
|
$
|
7,689
|
|
|
$
|
7,542
|
|
|
1.9
|
%
|
|
$
|
3,148
|
|
|
$
|
3,026
|
|
|
4.0
|
%
|
|
$
|
4,541
|
|
|
$
|
4,516
|
|
|
0.6
|
%
|
Rochester,
MN
|
|
1,711
|
|
|
6,225
|
|
|
6,227
|
|
|
—
|
%
|
|
2,454
|
|
|
2,367
|
|
|
3.7
|
%
|
|
3,771
|
|
|
3,860
|
|
|
(2.3)
|
%
|
Omaha, NE
|
|
1,370
|
|
|
3,754
|
|
|
3,771
|
|
|
(0.5)
|
%
|
|
1,774
|
|
|
1,535
|
|
|
15.6
|
%
|
|
1,980
|
|
|
2,236
|
|
|
(11.4)
|
%
|
Grand Forks,
ND
|
|
1,555
|
|
|
4,141
|
|
|
4,125
|
|
|
0.4
|
%
|
|
2,166
|
|
|
1,906
|
|
|
13.6
|
%
|
|
1,975
|
|
|
2,219
|
|
|
(11.0)
|
%
|
Bismarck,
ND
|
|
1,259
|
|
|
3,602
|
|
|
3,520
|
|
|
2.3
|
%
|
|
1,717
|
|
|
1,626
|
|
|
5.6
|
%
|
|
1,885
|
|
|
1,894
|
|
|
(0.5)
|
%
|
St. Cloud,
MN
|
|
1,190
|
|
|
3,474
|
|
|
3,473
|
|
|
—
|
%
|
|
1,808
|
|
|
1,484
|
|
|
21.8
|
%
|
|
1,666
|
|
|
1,989
|
|
|
(16.2)
|
%
|
Topeka, KS
|
|
1,042
|
|
|
2,556
|
|
|
2,519
|
|
|
1.5
|
%
|
|
1,105
|
|
|
1,135
|
|
|
(2.6)
|
%
|
|
1,451
|
|
|
1,384
|
|
|
4.8
|
%
|
Sioux Falls,
SD
|
|
969
|
|
|
2,529
|
|
|
2,522
|
|
|
0.3
|
%
|
|
1,193
|
|
|
1,132
|
|
|
5.4
|
%
|
|
1,336
|
|
|
1,390
|
|
|
(3.9)
|
%
|
Billings,
MT
|
|
770
|
|
|
2,156
|
|
|
2,162
|
|
|
(0.3)
|
%
|
|
858
|
|
|
842
|
|
|
1.9
|
%
|
|
1,298
|
|
|
1,320
|
|
|
(1.7)
|
%
|
Minot, ND
|
|
712
|
|
|
2,118
|
|
|
2,155
|
|
|
(1.7)
|
%
|
|
1,007
|
|
|
1,037
|
|
|
(2.9)
|
%
|
|
1,111
|
|
|
1,118
|
|
|
(0.6)
|
%
|
Rapid City,
SD
|
|
474
|
|
|
1,367
|
|
|
1,371
|
|
|
(0.3)
|
%
|
|
576
|
|
|
527
|
|
|
9.3
|
%
|
|
791
|
|
|
844
|
|
|
(6.3)
|
%
|
Same-Store
Total
|
|
12,848
|
|
|
$
|
39,611
|
|
|
$
|
39,387
|
|
|
0.6
|
%
|
|
$
|
17,806
|
|
|
$
|
16,617
|
|
|
7.2
|
%
|
|
$
|
21,805
|
|
|
$
|
22,770
|
|
|
(4.2)
|
%
|
|
|
Apartment
Homes
Included
|
|
Weighted Average
Occupancy (1)
|
|
Weighted Average
Monthly
Rental Rate (2)
|
|
Weighted Average
Monthly
Revenue per Occupied Home (3)
|
Regions
|
|
|
CY19Q1
|
|
CY18Q4
|
|
Growth
|
|
CY19Q1
|
|
CY18Q4
|
|
%
Change
|
|
CY19Q1
|
|
CY18Q4
|
|
%
Change
|
Minneapolis,
MN
|
|
1,796
|
|
|
94.8
|
%
|
|
92.7
|
%
|
|
2.1
|
%
|
|
$
|
1,408
|
|
|
$
|
1,418
|
|
|
(0.7)
|
%
|
|
$
|
1,505
|
|
|
$
|
1,511
|
|
|
(0.4)
|
%
|
Rochester,
MN
|
|
1,711
|
|
|
96.5
|
%
|
|
95.1
|
%
|
|
1.4
|
%
|
|
1,207
|
|
|
1,212
|
|
|
(0.4)
|
%
|
|
1,257
|
|
|
1,276
|
|
|
(1.5)
|
%
|
Omaha, NE
|
|
1,370
|
|
|
95.3
|
%
|
|
95.8
|
%
|
|
(0.5)
|
%
|
|
875
|
|
|
876
|
|
|
(0.1)
|
%
|
|
959
|
|
|
958
|
|
|
0.1
|
%
|
Grand Forks,
ND
|
|
1,555
|
|
|
93.8
|
%
|
|
91.8
|
%
|
|
2.0
|
%
|
|
903
|
|
|
913
|
|
|
(1.1)
|
%
|
|
946
|
|
|
964
|
|
|
(1.9)
|
%
|
Bismarck,
ND
|
|
1,259
|
|
|
96.4
|
%
|
|
93.8
|
%
|
|
2.6
|
%
|
|
942
|
|
|
945
|
|
|
(0.3)
|
%
|
|
990
|
|
|
994
|
|
|
(0.4)
|
%
|
St. Cloud,
MN
|
|
1,190
|
|
|
95.7
|
%
|
|
95.2
|
%
|
|
0.5
|
%
|
|
939
|
|
|
945
|
|
|
(0.6)
|
%
|
|
1,016
|
|
|
1,021
|
|
|
(0.5)
|
%
|
Topeka, KS
|
|
1,042
|
|
|
96.7
|
%
|
|
95.3
|
%
|
|
1.4
|
%
|
|
810
|
|
|
811
|
|
|
(0.1)
|
%
|
|
846
|
|
|
846
|
|
|
—
|
%
|
Sioux Falls,
SD
|
|
969
|
|
|
95.3
|
%
|
|
95.2
|
%
|
|
0.1
|
%
|
|
850
|
|
|
853
|
|
|
(0.4)
|
%
|
|
913
|
|
|
911
|
|
|
0.2
|
%
|
Billings,
MT
|
|
770
|
|
|
96.2
|
%
|
|
96.3
|
%
|
|
(0.1)
|
%
|
|
902
|
|
|
904
|
|
|
(0.2)
|
%
|
|
971
|
|
|
971
|
|
|
—
|
%
|
Minot, ND
|
|
712
|
|
|
95.8
|
%
|
|
96.4
|
%
|
|
(0.6)
|
%
|
|
993
|
|
|
1,001
|
|
|
(0.8)
|
%
|
|
1,035
|
|
|
1,046
|
|
|
(1.1)
|
%
|
Rapid City,
SD
|
|
474
|
|
|
96.9
|
%
|
|
96.7
|
%
|
|
0.2
|
%
|
|
931
|
|
|
933
|
|
|
(0.2)
|
%
|
|
991
|
|
|
996
|
|
|
(0.5)
|
%
|
Same-Store
Total
|
|
12,848
|
|
|
95.6
|
%
|
|
94.4
|
%
|
|
1.2
|
%
|
|
$
|
1,013
|
|
|
$
|
1,018
|
|
|
(0.5)
|
%
|
|
$
|
1,075
|
|
|
$
|
1,082
|
|
|
(0.6)
|
%
|
|
|
(1)
|
Weighted average
occupancy is defined as the percentage resulting from dividing
actual rental revenue by scheduled rent.
|
(2)
|
Weighted average
monthly rental rate is scheduled rent divided by the total number
of apartment homes. See definition of scheduled rent in the
Definitions section.
|
(3)
|
Weighted average
monthly revenue per occupied home is defined as total rental
revenues divided by the weighted average occupied apartment units
for the period.
|
IRET
PORTFOLIO
SUMMARY(1)
|
|
|
|
Three Months
Ended
|
|
|
3/31/2019
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
|
3/31/2018
|
Number of Apartment
Homes
|
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
12,848
|
|
|
12,847
|
|
|
12,847
|
|
|
12,848
|
|
|
12,844
|
|
Non-Same-Store
|
|
1,127
|
|
|
855
|
|
|
855
|
|
|
855
|
|
|
855
|
|
All
Communities
|
|
13,975
|
|
|
13,702
|
|
|
13,702
|
|
|
13,703
|
|
|
13,699
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Scheduled
Rent(2) per Apartment Home
|
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
$
|
1,013
|
|
|
$
|
1,018
|
|
|
$
|
1,027
|
|
|
$
|
1,009
|
|
|
$
|
1,001
|
|
Non-Same-Store
|
|
1,772
|
|
|
1,797
|
|
|
1,796
|
|
|
1,797
|
|
|
1,783
|
|
All
Communities
|
|
$
|
1,064
|
|
|
$
|
1,066
|
|
|
$
|
1,075
|
|
|
$
|
1,058
|
|
|
$
|
1,029
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Revenue per
Occupied Apartment Home(3)
|
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
$
|
1,075
|
|
|
$
|
1,082
|
|
|
$
|
1,092
|
|
|
$
|
1,069
|
|
|
$
|
1,048
|
|
Non-Same-Store
|
|
1,943
|
|
|
1,939
|
|
|
1,956
|
|
|
1,941
|
|
|
1,926
|
|
All
Communities
|
|
$
|
1,134
|
|
|
$
|
1,136
|
|
|
$
|
1,146
|
|
|
$
|
1,123
|
|
|
$
|
1,079
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Occupancy(4)
|
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
95.6
|
%
|
|
94.4
|
%
|
|
92.0
|
%
|
|
94.2
|
%
|
|
94.2
|
%
|
Non-Same-Store
|
|
94.9
|
%
|
|
92.7
|
%
|
|
93.4
|
%
|
|
87.3
|
%
|
|
75.5
|
%
|
All
Communities
|
|
95.5
|
%
|
|
94.2
|
%
|
|
92.2
|
%
|
|
93.5
|
%
|
|
93.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses as
a % of Scheduled Rent
|
|
|
|
|
|
|
|
|
|
|
Same-Store
|
|
45.6
|
%
|
|
42.4
|
%
|
|
42.9
|
%
|
|
42.0
|
%
|
|
44.6
|
%
|
Non-Same-Store
|
|
37.6
|
%
|
|
30.5
|
%
|
|
36.8
|
%
|
|
32.1
|
%
|
|
36.4
|
%
|
All
Communities
|
|
44.7
|
%
|
|
41.1
|
%
|
|
42.3
|
%
|
|
41.0
|
%
|
|
44.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Expenditures
|
|
|
|
|
|
|
|
|
|
|
Total Capital
Expenditures per Apartment Home – Same-Store
|
|
$
|
80
|
|
|
$
|
254
|
|
|
$
|
274
|
|
|
$
|
201
|
|
|
$
|
112
|
|
|
|
(1)
|
Previously reported
amounts are not revised for changes in the composition of the
same-store properties pool.
|
(2)
|
See definition of
scheduled rent. Average scheduled rent is scheduled rent
divided by the total number of units.
|
(3)
|
Total revenues
divided by the weighted average occupied units for the
period.
|
(4)
|
See definition of
weighted average occupancy in the Definitions section.
|
IRET
SAME-STORE CAPITAL
EXPENDITURES
($ in thousands,
except per home amounts)
|
|
|
|
Three Months
Ended
|
|
|
3/31/2019
|
|
3/31/2018
|
Total Same-Store
Apartment Homes
|
|
12,848
|
|
|
12,844
|
|
|
|
|
|
|
Turnover
|
|
$
|
612
|
|
|
$
|
701
|
|
Furniture &
Equipment
|
|
60
|
|
|
44
|
|
Building –
Interior
|
|
78
|
|
|
68
|
|
Building –
Exterior
|
|
217
|
|
|
599
|
|
Landscaping &
Grounds
|
|
63
|
|
|
33
|
|
Capital
Expenditures
|
|
$
|
1,030
|
|
|
$
|
1,445
|
|
Capital Expenditures
per Apartment Home
|
|
$
|
80
|
|
|
$
|
112
|
|
IRET
2019 Calendar Year Financial
Outlook
(in thousands, except per share amounts)
We are reaffirming our guidance for our 2019 calendar year Net
income (loss) available to shareholders, EPS, same-store
performance, Core FFO, and Core FFO per share. Our 2019 calendar
year guidance, along with our actual results of the three months
ended March 31, 2019, is described in
the table below. Please note that FFO, Core FFO, and NOI are
non-GAAP measures. Refer to Key Financial Data in this
release for additional information on the use and presentation of
these non-GAAP measures and for reconciliation to the most directly
comparable GAAP measures.
|
Three Months
Ended
|
|
Range for 12
Months Ended December 31, 2019
|
|
March 31,
2019
|
|
Lower
|
|
Mid
Point
|
|
Upper
|
|
Actual
Results
|
|
Amount
|
% Change
|
|
Amount
|
% Change
|
|
Amount
|
% Change
|
Net income available
to common shareholders
|
$
|
(6,403)
|
|
|
$
|
(24,491)
|
|
(12.10)
|
%
|
|
$
|
(21,857)
|
|
0.10
|
%
|
|
$
|
(19,224)
|
|
12.00
|
%
|
EPS(1)
|
$
|
(0.54)
|
|
|
$
|
(1.86)
|
|
(1.60)
|
%
|
|
$
|
(1.66)
|
|
9.30
|
%
|
|
$
|
(1.46)
|
|
20.20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
Outlook
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
39,612
|
|
|
$
|
158,800
|
|
2.50
|
%
|
|
$
|
160,000
|
|
3.25
|
%
|
|
$
|
161,200
|
|
4.00
|
%
|
Expenses
|
$
|
17,806
|
|
|
$
|
69,800
|
|
4.00
|
%
|
|
$
|
69,300
|
|
3.25
|
%
|
|
$
|
68,800
|
|
2.50
|
%
|
NOI
|
$
|
21,806
|
|
|
$
|
89,600
|
|
2.00
|
%
|
|
$
|
90,700
|
|
3.25
|
%
|
|
$
|
91,800
|
|
4.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO
|
$
|
10,150
|
|
|
$
|
46,348
|
|
2.00
|
%
|
|
$
|
47,666
|
|
4.90
|
%
|
|
$
|
48,981
|
|
7.80
|
%
|
Core FFO per
Share
|
$
|
0.77
|
|
|
$
|
3.52
|
|
3.30
|
%
|
|
$
|
3.62
|
|
6.30
|
%
|
|
$
|
3.72
|
|
9.30
|
%
|
Weighted Average
Shares and Units
|
13,130
|
|
|
13,167
|
|
|
|
13,167
|
|
|
|
13,167
|
|
|
|
|
(1)
|
Earnings per share
excludes net income attributable to noncontrolling
interests.
|
Reconciliation of Net Income Available to Common Shareholders
to Funds From Operations
The following table presents reconciliations of Net income
(loss) available to common shareholders to FFO and Core FFO.
FFO and Core FFO are non-GAAP measures. FFO and Core FFO
should not be considered as alternatives to net income or any other
GAAP measurement of performance, but rather should be considered as
an additional, supplemental measure. FFO also does not represent
cash generated from operating activities in accordance with GAAP,
and is not necessarily indicative of sufficient cash flow to fund
all of our needs or our ability to service indebtedness or make
distributions. The outlook and projections provided below are
based on current expectations and are forward-looking.
|
|
|
Outlook
|
|
Three Months
Ended
|
|
12 Months
Ended
|
|
March 31,
2019
|
|
December 31,
2019
|
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
Net income (loss)
available to common shareholders
|
$
|
(6,403)
|
|
|
$
|
(0.54)
|
|
|
$
|
(19,884)
|
|
|
$
|
(1.66)
|
|
Noncontrolling
interests - Operating Partnership
|
(743)
|
|
|
|
|
(1,961)
|
|
|
|
Depreciation and
amortization
|
18,111
|
|
|
|
|
69,511
|
|
|
|
Less depreciation-non
real estate
|
(85)
|
|
|
|
|
—
|
|
|
|
Less
depreciation-partially owned entities
|
(678)
|
|
|
|
|
—
|
|
|
|
Gain on sale of real
estate attributable to controlling interests
|
(54)
|
|
|
|
|
—
|
|
|
|
FFO applicable to
common shares and Units
|
$
|
10,148
|
|
|
$
|
0.77
|
|
|
$
|
47,666
|
|
|
$
|
3.62
|
|
|
|
|
|
|
|
|
|
Adjustments to Core
FFO:
|
|
|
|
|
|
|
|
Loss on
extinguishment of debt
|
2
|
|
|
|
|
—
|
|
|
|
Core FFO applicable
to common shares and Units
|
$
|
10,150
|
|
|
$
|
0.77
|
|
|
$
|
47,666
|
|
|
$
|
3.62
|
|
Definitions
March 31,
2019
Adjusted EBITDA is earnings before interest,
taxes, depreciation, amortization, gain/loss on sale of real estate
and other investments, impairment of real estate investments,
gain/loss on extinguishment of debt and gain/loss from involuntary
conversion. We consider Adjusted EBITDA to be an appropriate
supplemental performance measure because it permits investors to
view income from operations without the effect of depreciation, the
cost of debt, or non-operating gains and losses. Adjusted EBITDA is
a non-GAAP measure and should not be considered a substitute for
operating results determined in accordance with GAAP. Adjusted
EBITDA as calculated by us may not be comparable to Adjusted EBITDA
reported by other REITs that do not define Adjusted EBITDA exactly
as we do.
Core funds from operations (Core FFO) is FFO as adjusted
for non-routine items or items not considered core to our business
operations. By further adjusting for items that are not considered
part of our core business operations, we believe Core FFO provides
investors with additional information to compare our core operating
and financial performance between periods. Core FFO should not be
considered as an alternative to net income as an indication of
financial performance, or as an alternative to cash flows from
operations as a measure of liquidity, nor is it indicative of funds
available to fund our cash needs, including our ability to make
distributions to shareholders. Core FFO is a a non-GAAP and
non-standardized measure that may be calculated differently by
other REITs and that should not be considered a substitute for
operating results determined in accordance with GAAP.
Debt to total market capitalization is total debt from
the balance sheet divided by the sum of total debt from the balance
sheet plus the market value of common shares, operating partnership
units, Series C preferred shares, and Series D preferred units
outstanding at the end of the period.
Debt service coverage ratio is computed by dividing
Adjusted EBITDA by interest expense and principal amortization.
Earnings per shares (EPS) is computed by dividing net
income available to our common shareholders by the weighted average
number of common shares outstanding during the period.
Funds from operations (FFO) is defined by the National
Association of Real Estate Investment Trusts, Inc. (Nareit) as net
income (calculated in accordance with GAAP), excluding depreciation
and amortization related to real estate, gains and losses from the
sale of certain real estate assets, gains and losses from change in
control, and impairment write-downs of certain real estate assets
and investments in entities when the impairment is directly
attributable to decreases in the value of depreciable real estate
held by the entity. Nareit's FFO White Paper 2018 Restatement
clarified that impairment write-downs of land related to a REIT's
main business are excluded from FFO and a REIT has the option to
exclude impairment write-downs of assets that are incidental to the
main business. We use the definition of FFO adopted by Nareit and
believe that FFO, which is a standard supplemental measure for
equity real estate investment trusts, is helpful to investors in
understanding our operating performance, primarily because its
calculation excludes depreciation and amortization expense on real
estate assets, thereby providing an additional perspective on our
operating results. However, FFO is a non-GAAP measure and
should not be considered a substitute for operating results
determined in accordance with GAAP. Nevertheless, we believe that
GAAP historical cost depreciation of real estate assets generally
is not correlated with changes in the value of those assets, whose
value does not diminish predictably over time, as historical cost
depreciation implies. In addition, the exclusion in Nareit's
definition of FFO of impairment write-downs and gains and losses
from the sale of real estate assets helps to identify the operating
results of the long-term assets that form the base of our
investments, and assists management and investors in comparing
those operating results between periods.
Net debt to annualized adjusted EBITDA is total debt
less cash and cash equivalents and real estate deposits (as
reported for the end of the quarter) divided by Adjusted EBITDA (as
reported for the end of the quarter), multiplied by 4. This
term is a non-GAAP measure and should not be considered a
substitute for operating results determined in accordance with
GAAP.
Net operating income (NOI) is a non-GAAP measure which we
define as total real estate revenues less real estate
expenses. Real estate expenses consist of property operating
expenses and real estate tax expense and do not include property
management expense. We believe that NOI is an important
supplemental measure of operating performance for a REIT's
operating real estate because it provides a measure of core
operations that is unaffected by depreciation, amortization,
financing, property management overhead, casualty losses, and
general and administrative expense. However, NOI is a non-GAAP
measure and should not be considered a substitute for operating
results determined in accordance with GAAP. NOI does not represent
cash generated by operating activities in accordance with GAAP and
should not be considered an alternative to net income, net income
available for common shareholders, or cash flow from operating
activities as a measure of financial performance.
Payout ratio (FFO per share and unit basis) is the ratio
of the current quarterly or annual distribution rate per common
share and unit divided by quarterly or annual FFO per share and
unit. This term is a non-GAAP measure and should not be
considered a substitute for operating results determined in
accordance with GAAP.
Payout ratio (Core FFO per share and unit basis) is
the ratio of the current quarterly or annual distribution rate per
common share and unit divided by quarterly or annual Core FFO per
share and unit. This term is a non-GAAP measure and should
not be considered a substitute for operating results determined in
accordance with GAAP.
Scheduled rent represents the value of all apartment
homes, with occupied apartment homes valued at contractual rates
pursuant to leases and vacant apartment homes valued at estimated
market rents. When calculating actual rents for occupied apartment
homes and market rents for vacant homes, delinquencies and
concessions are not taken into account. Market rates are
determined using the currently offered effective rates on new
leases at the community and are used as the starting point in
determination of the market rates of vacant apartment homes.
Same-store properties are properties owned or in service
for the entirety of the periods being compared (except for
properties classified as held for sale) and which, in the case of
development properties, have achieved a stabilized level of
occupancy, which is generally 90%. On the first day of each
calendar year, we determine the composition of our same-store pool
for that year as well as adjust the previous year, which allows us
to evaluate full period-over-period operating comparisons for
existing apartment communities and their contribution to net
income.
GAAP is defined as accounting principles generally
accepted in the United States of
America.
Weighted average occupancy is the percentage resulting
from dividing actual rental revenue by scheduled rent. We
believe that weighted average occupancy is a meaningful measure of
occupancy because it considers the value of each vacant unit at its
estimated market rate. Weighted average occupancy may not
completely reflect short-term trends in physical occupancy and our
calculation of weighted average occupancy may not be comparable to
that disclosed by other REITs.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/iret-reports-strong-first-quarter-2019-financial-results-300846906.html
SOURCE IRET