MINOT, N.D., June 29, 2016 /PRNewswire/ -- Investors Real Estate Trust (NYSE: IRET) (NYSE: IRETPR) (NYSE: IRETPRB), a self-administered, equity real estate investment trust investing in income-producing properties located primarily in the upper Midwest, today reported its financial and operating results for the quarter and fiscal year ended April 30, 2016.

Fourth Quarter Highlights

  • Same-store multifamily Net Operating Income ("NOI") growth year over year was up 4.8%, excluding energy impacted markets
  • Reported Funds from Operations ("FFO") of $19.2 million or $0.14 per share/unit
  • For the same-store multifamily portfolio, excluding energy impacted markets, weighted average occupancy was 95.0%, compared to 94.4% in the fourth quarter of fiscal year 2015
  • For the same-store multifamily portfolio, excluding energy impacted markets, average rental rate was $900 per unit per month, up 2.5% from the fourth quarter of fiscal year 2015
  • Acquired 393 multifamily units at four properties in Rochester, MN, for a total purchase price of $71.8 million
  • Placed into service two multifamily development projects, containing 414 units, and representing aggregate investment of $74.6 million
  • Disposed of eight student housing properties, one healthcare property, one retail property and one parcel of unimproved land for sales prices totaling $31.8 million

Fiscal Year Highlights

  • Same-store multifamily NOI growth year over year was up 1.4%, excluding energy impacted markets
  • Reported FFO of $103.9 million or $0.76 per share/unit
  • For the same-store multifamily portfolio, excluding energy impacted markets, average rental rate was $895 per unit per month, up 2.7% from the prior year
  • Acquired one healthcare property and 743 multifamily units at six properties, for a total purchase price of $143.5 million
  • Placed into service seven development projects totaling $211.8 million
  • Disposed of 8 student housing properties, 40 office properties, 2 healthcare properties, 18 retail properties and 3 parcels of unimproved land for a total sales price of $414.1 million and transferred ownership of 9 office properties pursuant to a deed in lieu transaction

President and Chief Executive Officer Tim Mihalick commented, "Our fourth quarter and full year results, which included increases in revenue of 7.5% and 5.0% respectively, show the value of our continued efforts to reposition the portfolio and focus our strategy. Within our multifamily portfolio, we continue to drive strong NOI growth in our total portfolio as we complete and lease up our development pipeline, and we captured strong same store NOI growth across most of our platform, with the exception of our energy-affected markets."

Mr. Mihalick continued, "During the fourth quarter, our disposition volume totaled approximately $32 million, bringing our total sales price for assets sold in fiscal year 2016 to $414.1 million. Moving forward, we will continue to execute on our strategic and capital plans to further simplify our platform and transition to a pure-play multifamily REIT, improve operations and maximize margins, execute on our redevelopment initiatives, and optimize our capital allocation and balance sheet. We believe that the successful execution of this strategy will enhance our long term growth profile and is the best path for value creation for our shareholders."

Financial Results for the Three and Twelve Months Ended April 30, 2016 Compared to the Prior Year Period

Net Income Available to Common Shareholders for the quarter ended April 30, 2016 was $8.1 million compared to $7.9 million for the same period of the prior fiscal year.  Net Income Available to Common Shareholders for the twelve month period ending April 30, 2016 was $60.5 million compared to $12.6 million for the same period of the prior fiscal year. The increase in Net Income Available to Common Shareholders was primarily due to gain on extinguishment of debt of $36.5 million and gain on sale of discontinued operations of $23.8 million recognized in the twelve months ended April 30, 2016.

Funds from Operations ("FFO") for the quarter ending April 30, 2016 was $19.2 million or $0.14 per share/unit.  FFO for the twelve months ending April 30, 2016 was $103.9 million or $0.76 per share/unit. Excluding gain or loss on extinguishment of debt, default interest, and gain on bargain purchase, FFO would have been $0.55 for the twelve months ended April 30, 2016.

The table below highlights FFO and Adjusted Funds from Operations ("AFFO") results by quarter for fiscal year 2016.

















Fiscal Year Ended

Q4 ended

Q3 ended

Q2 ended

Q1 ended


April 30, 2016


April 30, 2016

January 31, 2016

October 31, 2015

July 31, 2015

FFO per share

$

.76

$

.14

$

.40

$

.06

$

.16

AFFO per share

$

.51

$

.11

$

.13

$

.11

$

.16

 

Operating Results for the Three Months Ended April 30, 2016 Compared to the Prior Year Period

Total revenue for the Company increased by $3.4 million, or 7.5%, in the three months ended April 30, 2016 compared to same period one year ago. 

Net Operating Income (NOI) from all properties increased by $1.4 million, or 5.3% for the quarter ending April 30, 2016 compared to the same period one year ago. Non-Same-Store properties, primarily the Company's multifamily developments, provided for an increase in NOI of $1.9 million while Same-Store NOI decreased by approximately $518,000 for the quarter ending April 30, 2016 compared to the same period one year ago. The decrease in Same-Store NOI was primarily due to reduced revenues at properties located in energy impacted markets in western North.

Operating Results for the Twelve Months Ended April 30, 2016 Compared to the Prior Year Period

Total revenues for the Company increased by $9.0 million, or 5.0%, in the twelve months ended April 30, 2016 compared to same period one year ago. 

NOI from all properties increased by $3.0 million, or 2.9% for the twelve month period ending April 30, 2016 compared to the same period one year ago. Non-Same-Store properties, primarily the Company's multifamily developments, provided for an increase in NOI of $4.6 million while Same-Store NOI decreased by $1.6 million.  The decrease in Same-Store NOI was primarily due to reduced revenues at properties located in energy impacted markets in western North Dakota.

Multifamily Results for the Three Months Ended April 30, 2016 Compared to the Prior Year Period

Multifamily (including non-same-store) NOI increased by approximately $1.0 million or 5.8% for the quarter ending April 30, 2016 compared to the same period one year ago. Continued completion and lease up of the Company's development projects is having a positive effect on total operations.

Multifamily Results for the Twelve Months Ended April 30, 2016 Compared to the Prior Year Period

Multifamily (including non-same store) NOI increased by approximately $3.3 million or 4.9% for the twelve month period ending April 30, 2016 compared to the same period one year ago. Continued completion and lease up of the Company's development projects and accretive acquisitions in the period are having a positive effect on total operations.

Same-Store Multifamily Results for the Three Months Ended April 30, 2016 Compared to the Prior Year Period

Same-Store Multifamily NOI decreased by approximately $550,000 for the quarter ending April 30, 2016 compared to the same period one year ago. The decrease in Same-Store NOI was primarily due to reduced revenues at properties located in energy impacted markets in western North Dakota.

The Company's operating margins of Same-Store Multifamily NOI to Gross Revenues improved by 164 basis points quarter over quarter to 54.96% for the fourth quarter of fiscal year 2016, as compared to the third quarter of fiscal year 2016.

The table below represents Same-Store Multifamily performance for the fourth quarter ending April 30, 2016 compared to the same period one year ago. Excluding the highly impacted energy markets of Minot and Williston, North Dakota, the balance of the same-store portfolio showed improving NOI results year over year.



























FY16Q4

FY16Q4

FY16Q4

4th Quarter Increase (Decrease) From Prior Year's 4th Quarter






Weighted

% of

Average




Net

Average

Weighted


Rentable

Occupancy

Average

Actual

Rental




Operating

Rental

Average

Regions

Units

4/30/2016

Occupancy(1)

NOI

Rate(2)

Revenues

Expenses

Income

Rate

Occupancy

Billings, MT

770

90.8

%

92.0

%

8.3

%

$

909

(1.2)

%

(0.3)

%

(1.8)

%

3.4

%

(4.6)

%

Bismarck, ND

909

90.4

%

89.8

%

11.4

%

$

1,046

(2.2)

%

(1.1)

%

(2.9)

%

1.9

%

(4.1)

%

Grand Forks, ND

1,230

94.9

%

94.1

%

12.2

%

$

908

(1.7)

%

(5.8)

%

2.1

%

(1.4)

%

(0.3)

%

Minneapolis, MN

319

99.1

%

98.6

%

3.3

%

$

910

7.6

%

8.4

%

6.9

%

5.6

%

2.0

%

Omaha, NE

1,370

96.9

%

96.4

%

13.2

%

$

858

5.3

%

5.5

%

5.2

%

0.8

%

4.5

%

Rapid City, SD

270

96.7

%

96.5

%

2.5

%

$

841

3.8

%

17.6

%

(5.6)

%

3.7

%

0.0

%

Rochester, MN

1,104

97.0

%

96.2

%

15.7

%

$

1,075

4.7

%

(3.0)

%

9.5

%

4.2

%

0.5

%

Sioux Falls, SD

969

97.9

%

97.7

%

8.0

%

$

814

4.7

%

6.0

%

3.4

%

4.0

%

0.7

%

St. Cloud, MN

991

96.0

%

94.8

%

7.2

%

$

848

8.3

%

5.5

%

12.3

%

4.5

%

3.8

%

Topeka, KS

1,042

97.0

%

96.9

%

9.8

%

$

767

6.9

%

(3.0)

%

15.1

%

3.6

%

3.3

%

Same Store Subtotals

8,974

95.5

%

95.0

%

91.6

%

$

900

3.2

%

1.2

%

4.8

%

2.5

%

0.6

%

Minot, ND(3)

734

91.1

%

90.6

%

6.2

%

$

920

(22.4)

%

6.9

%

(40.5)

%

(19.6)

%

(2.8)

%

Williston, ND(3)

145

66.2

%

73.1

%

2.2

%

$

1,658

(54.1)

%

(26.0)

%

(64.3)

%

(45.7)

%

(8.4)

%

Same Store Property Totals

9,853

94.8

%

94.1

%

100.0

%

$

912

(1.7)

%

1.0

%

(3.8)

%

(1.6)

%

(0.1)

%

_______________________________

(1)

Weighted average occupancy is defined as gross potential rent less vacancy losses divided by gross potential rent for the period.

(2)

 Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period.

(3)

 Denotes markets with high exposure to energy-related industries.

 

Same-Store Multifamily Results for the Twelve Months Ended April 30, 2016 Compared to the Prior Year Period

Same-Store Multifamily NOI decreased by $2.9 million for the twelve months ended April 30, 2016 compared to the same period one year ago. The decrease in Same-Store NOI was primarily due to reduced revenues at properties located in energy impacted markets in western North Dakota.

The Company's operating margins of Same-Store Multifamily NOI to Gross Revenues decreased by 256 basis points year over year to 54.05% for the twelve months ended April 30, 2016.

The table below represents Same-Store Multifamily performance for the twelve months ended April 30, 2016 compared to the same period one year ago. Excluding the highly impacted energy markets of Minot and Williston, North Dakota, the balance of the same-store portfolio showed improving NOI results year over year.



























FY16Q

FY16

FY16

Increase (Decrease) From Prior Year






Weighted

% of

Average




Net

Average

Weighted


Rentable

Occupancy

Average

Actual

Rental




Operating

Rental

Average

Regions

Units

4/30/2016

Occupancy(1)

NOI

Rate(2)

Revenues

Expenses

Income

Rate

Occupancy

Billings, MT

770

90.8

%

92.8

%

8.0

%

$

899

(1.6)

%

6.0

%

(6.6)

%

2.6

%

(4.2)

%

Bismarck, ND

909

90.4

%

92.5

%

11.7

%

$

1,049

(0.6)

%

10.1

%

(6.3)

%

3.8

%

(4.4)

%

Grand Forks, ND

1,230

94.9

%

94.4

%

12.9

%

$

917

(1.8)

%

(0.5)

%

(2.7)

%

0.8

%

(2.6)

%

Minneapolis, MN

319

99.1

%

98.1

%

3.1

%

$

886

6.6

%

4.6

%

8.5

%

4.1

%

2.5

%

Omaha, NE

1,370

96.9

%

96.3

%

12.7

%

$

863

6.6

%

9.6

%

3.9

%

1.6

%

5.0

%

Rapid City, SD

270

96.7

%

97.0

%

2.5

%

$

829

2.0

%

4.4

%

(0.1)

%

2.2

%

(0.2)

%

Rochester, MN

1,104

97.0

%

96.3

%

14.9

%

$

1,062

5.9

%

0.4

%

9.8

%

4.1

%

1.8

%

Sioux Falls, SD

969

97.9

%

97.5

%

7.6

%

$

803

4.6

%

7.9

%

1.0

%

3.7

%

0.9

%

St. Cloud, MN

991

96.0

%

94.3

%

6.8

%

$

832

4.3

%

7.4

%

0.0

%

3.1

%

1.2

%

Topeka, KS

1,042

97.0

%

96.1

%

9.0

%

$

757

5.3

%

(0.6)

%

10.7

%

2.4

%

2.9

%

Same Store Subtotals

8,974

95.5

%

95.2

%

89.2

%

$

895

3.0

%

4.9

%

1.4

%

2.7

%

0.3

%

Minot, ND(3)

734

91.1

%

90.8

%

8.0

%

$

1,040

(13.2)

%

12.7

%

(27.8)

%

(7.9)

%

(5.3)

%

Williston, ND(3)

145

66.2

%

73.8

%

2.8

%

$

2,051

(42.5)

%

(1.3)

%

(55.5)

%

(28.4)

%

(14.1)

%

Same Store Property Totals

9,853

94.8

%

94.2

%

100.0

%

$

922

(0.5)

%

5.3

%

(5.0)

%

0.4

%

(0.9)

%

______________________________

(1)

Weighted average occupancy is defined as gross potential rent less vacancy losses divided by gross potential rent for the period.

(2)

 Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period.

(3)

Denotes markets with high exposure to energy-related industries.

 

In addition to these initiatives to grow the multifamily portfolio through acquisitions and development, the Company has launched a value add program whereby IRET will be committing an estimated $3.5 million per quarter to rehab approximately 1,500 units in fiscal year 2017. Apartments will be remodeled as the leases expire and upgrades will include a variety of new appliances, flooring, lighting, kitchen cabinets, and bathroom upgrades. Management expects these upgrades to range from $7,000 to $13,000 per unit and result in a return on investment of approximately 8% to 10% per year per unit.  During fiscal year 2016, under the value add program the Company completed remodeling of 539 units at an average cost of $7,553 with an average return on investment for leased units of 11.3%.

FFO per Share and Unit for the Quarter and Fiscal Year Ended April 30, 2016





Q4 Ended

April 30, 2016

Fiscal Year Ended

April 30, 2016

FFO per share and unit

$

0.14

$

0.76

Less gain on extinguishment of debt and plus default interest

—

0.19

Less gain on bargain purchase per share and unit

0.02

0.02

FFO per share and unit, excluding gain on extinguishment of debt, default interest and gain on bargain purchase

$

0.12

$

0.55

Occupancy Levels on a Same-Store Property and All Property Basis










Same-Store as of

Same-Store as of

All Properties as of

All Properties as of

Segments

April 30, 2016

April 30, 2015

April 30, 2016

4/30/2015

Multifamily

94.8

%

95.1

%

90.8

%

92.0

%

Healthcare

95.6

%

95.3

%

89.4

%

91.5

%

 

Development Projects in Progress

As of April 30, 2016, the following projects are being developed:

  • 71 France, a 241 unit, $73.3 million Multifamily development in Edina, MN
  • Monticello Crossings, a 202 unit, $31.8 million Multifamily development in Monticello, MN

Development Projects Placed in Service

During the three months ended April 30, 2016 two development projects totaling $74.6 million were placed in service. During the twelve months ended April 30, 2016, seven development projects totaling $211.8 million were placed in service.

The following table reflects the projects placed into service during the twelve months ended April 30, 2016:

















Occupancy

Development Cost






Rentable Sq Ft or

as of

as of

Anticipated

Project Name and Location

Segment

Number of Units

April 30, 2016

April 30, 2016

Same Store Date

Chateau II-Minot, ND

Multifamily

72 units

84.7

%

$

14,648

1Q 2019

Edina 6565 France SMC III-Edina, MN(1)

Healthcare

57,624 sq ft

24.5

%

33,041

1Q 2019

Renaissance Heights-Williston, ND

Multifamily

288 units

43.8

%

62,514

1Q 2019

Minot Southgate Retail-Minot, ND

Other

7,963 sq ft

0

%

2,623

1Q 2019

PrairieCare Medical-Brooklyn Park, MN

Healthcare

70,756 sq ft

100.0

%

24,440

1Q 2018

Cardinal Point - Grand Forks, ND

Multifamily

251 units

50.9

%

49,732

1Q 2019

Deer Ridge - Jamestown, ND

Multifamily

163 units

44.2

%

24,837

1Q 2019








$

211,835




(1)

Percentage leased or committed as of June 23, 2016, was 88.0%.

 

Disposition Activity

During the three months ended April 30, 2016, the Company disposed of the following properties:

  • Eight student housing properties in St. Cloud, MN, for a sales price totaling $5.6 million.
  • One healthcare property in Omaha, NE, for a sales price of $24.5 million, due to the exercise of the tenant's purchase option.
  • One retail property in Minot, ND, for a sales price of $1.7 million.
  • One parcel of unimproved land in River Falls, WI, for approximately $20,000.

During the twelve months ended April 30, 2016, the Company disposed of 8 multifamily properties, 40 office properties, 2 healthcare properties, 18 retail properties, and 3 parcels of unimproved land for a total sales price of $414.1 million and transferred ownership of 9 office properties pursuant to a deed in lieu transaction.

Liquidity

At April 30, 2016, the Company had $66.7 million cash on hand and $82.5 million available on its line of credit, which matures September 1, 2017.

Quarterly Distribution

On April 1, 2016, the Company paid a quarterly distribution of $0.1300 per common share and unit of IRET Properties. This was the Company's 180th consecutive distribution. The Company also paid, on March 31, 2016, a quarterly distribution of $0.5156 per share on its Series A preferred shares and a quarterly distribution of $0.4968 per share on its Series B preferred shares.

Subsequent to the end of the fourth quarter of fiscal year 2016, on June 2, 2016, the Board of Trustees declared a regular quarterly distribution of $0.1300 per common share and unit, payable July 1, 2016 to common shareholders and unitholders of record on June 15, 2016.

Also on June 2, 2016, the Board declared a distribution of $0.5156 per share on the Company's Series A preferred shares, payable June 30, 2016 to Series A preferred shareholders of record on June 15, 2016, and declared a distribution of $0.4968 per share on the Company's Series B preferred shares, payable June 30, 2016 to Series B preferred shareholders of record on June 15, 2016.

Guidance

For the fiscal year ending April 30, 2017, management expects to report FFO in the range of $0.48 to $0.54 per share/unit. This guidance reflects management's view of current market conditions, as well as the earnings impact of certain events referenced in this release and discussed during the scheduled fourth quarter and fiscal year 2016 conference call. This guidance does not include the operational or capital impact of any future acquisition, development, disposition, or capital markets activity, including potential transactions discussed as part of the Company's strategic initiatives. This guidance is also based on management's assumption of same-store multifamily NOI growth of 2% to 4%. A number of factors could impact the Company's ability to meet its guidance and assumption, and there can be no assurance that the Company can achieve such results. This guidance and assumption are subject to change.

Conference Call Information

The Conference Call for 4th Quarter Earnings is scheduled for Thursday, June 30, 2016 at 10:00 A.M. Eastern Time. Conference call access information is as follows:

USA Toll Free Number: 1-877-509-9785

International Toll Free Number: 1-412-902-4132

Canada Toll Free Number: 1-855-669-9657

About IRET

The Company is a self-administered, equity real estate investment trust investing in income-producing properties located primarily in the upper Midwest. As of April 30, 2016, it held for investment a portfolio of 146 properties consisting of 99 multifamily properties, consisting of 12,950 units, 31 healthcare properties, and 16 other commercial properties with a total of 2.9 million square feet of leasable space.  The Company's common shares, Series A preferred shares and Series B preferred shares are publicly traded on the New York Stock Exchange (NYSE symbols: IRET, IRETPR and IRETPRB, respectively). The Company's press releases and supplemental information are available on its website at www.iret.com or by contacting Investor Relations at 203-682-8377.

Supplemental Information

The Company produced the Supplemental Operating and Financial Data for the Quarter Ended April 30, 2016 ("Supplemental Information"), which is available on the Company's website at www.iret.com.

Non-GAAP financial measures and other capitalized terms, as used in this earnings release, are defined under the section titled "Definitions" in the Supplemental Information.

Forward-Looking Statements

This earnings release, including the Supplemental Information, contains 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. These forward-looking statements, which may be identified by the use of words such as "expects," "plans," "estimates," "anticipates," "projects," "intends," "believes," "outlook" and similar expressions that do not relate to historical matters, specifically including the Company's future plans, anticipated operating results, anticipated timing of development projects being placed into service, anticipated implementation and results of its value add program, and anticipated timing of properties becoming same-store properties, are based on the Company's expectations, forecasts and assumptions at the time of this earnings release. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in such forward-looking statements.

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; fluctuations in interest rates; adverse capital and credit market conditions that might affect the Company's access to various sources of capital and cost of capital; 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 Company properties that may result in lower than expected occupancy and/or rental rates; ability to acquire quality properties in the Company's targeted markets; ability to successfully dispose of certain assets; competition for tenants from similar competing properties; the Company's ability to attract and retain skilled personnel; cyber-intrusion; abandonment of development or redevelopment opportunities for which the Company has already incurred costs; delays in completing development, redevelopment and/or lease up of properties and increased costs; and those risks and uncertainties detailed from time to time in the Company's filings with the Securities and Exchange Commission, including the Company's Form 10-K for the fiscal year ended April 30, 2016 and subsequent quarterly reports on Form 10-Q.

The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

 

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)


















(in thousands, except share data)


April 30, 2016

April 30, 2015

ASSETS






Real estate investments






Property owned

$

1,681,471

$

1,335,687

Less accumulated depreciation

(312,889)

(279,417)



1,368,582

1,056,270

Development in progress

51,681

153,994

Unimproved land

20,939

25,827

Total real estate investments

1,441,202

1,236,091

Assets held for sale and assets of discontinued operations

220,761

675,764

Cash and cash equivalents

66,698

48,970

Other investments

50

329

Receivable arising from straight-lining of rents, net of allowance of $333 and $222, respectively

7,179

6,504

Accounts receivable, net of allowance of $97 and $439, respectively

1,524

2,390

Real estate deposits

0

2,489

Prepaid and other assets

2,937

3,134

Intangible assets, net of accumulated amortization of $6,230 and $6,112, respectively

1,858

1,388

Tax, insurance, and other escrow

5,450

9,499

Property and equipment, net of accumulated depreciation of $1,058 and $1,374, respectively

1,011

1,027

Goodwill

1,680

1,718

Deferred charges and leasing costs, net of accumulated amortization of $8,716 and $7,524, respectively

9,827

8,534

TOTAL ASSETS

$

1,760,177

$

1,997,837

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY






LIABILITIES






Liabilities held for sale and liabilites of discontinued operations

$

77,712

$

401,299

Accounts payable and accrued expenses

39,727

55,540

Revolving line of credit

17,500

60,500

Mortgages payable

817,324

596,965

Construction debt and other

82,130

136,211

TOTAL LIABILITIES

1,034,393

1,250,515

COMMITMENTS AND CONTINGENCIES






REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES

7,522

6,368

EQUITY






Investors Real Estate Trust shareholders' equity






Series A Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 1,150,000 shares issued and outstanding at April 30, 2016 and April 30, 2015, aggregate liquidation preference of $28,750,000)

27,317

27,317

Series B Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 4,600,000 shares issued and outstanding at April 30, 2016 and April 30, 2015, aggregate liquidation preference of $115,000,000)

111,357

111,357

Common Shares of Beneficial Interest (Unlimited authorization, no par value, 121,091,249 shares issued and outstanding at April 30, 2016, and 124,455,624 shares issued and outstanding at April 30, 2015)

922,084

951,868

Accumulated distributions in excess of net income

(442,000)

(438,432)

Total Investors Real Estate Trust shareholders' equity

618,758

652,110

Noncontrolling interests – Operating Partnership (13,863,575 units at January 31, 2016 and 13,999,725 units at April 30, 2015)

78,484

58,325

Noncontrolling interests – consolidated real estate entities

21,020

30,519

Total equity

718,262

740,954

TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

$

1,760,177

$

1,997,837

 

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
















(in thousands, except per share data)


Three Months Ended 

Twelve Months Ended 


April 30

April 30


2016

2015

2016

2015

REVENUE












Real estate rentals

$

44,065

$

40,629

$

170,698

$

159,969

Tenant reimbursement

4,458

4,512

17,622

19,352

TOTAL REVENUE

48,523

45,141

188,320

179,321

EXPENSES












Property operating expenses, excluding real estate taxes

14,907

13,661

58,859

53,535

Real estate taxes

5,617

4,883

20,241

19,602

Depreciation and amortization

13,517

11,180

49,832

42,784

Impairment of real estate investments

2,223

—

5,543

4,663

General and administrative expenses

2,951

2,516

11,267

11,824

Acquisition and investment related costs

397

125

830

362

Other expenses

950

207

2,231

1,647

TOTAL EXPENSES

40,562

32,572

148,803

134,417

Operating income

7,961

12,569

39,517

44,904

Interest expense

(10,062)

(8,972)

(35,768)

(34,447)

Loss on extinguishment of debt

—

—

(106)

—

Interest income

569

557

2,256

2,238

Other income

31

347

317

718

(Loss) income before gain (loss) on sale of real estate and other investments and income from discontinued operations

(1,501)

4,501

6,216

13,413

Gain (loss) on sale of real estate and other investments

8,369

6,904

9,640

6,093

Gain on bargain purchase

3,424

—

3,424

0

Income from continuing operations

10,292

11,405

19,280

19,506

Income from discontinued operations

1,463

2,457

57,322

9,178

NET INCOME

11,755

13,862

76,602

28,684

Net income attributable to noncontrolling interests – Operating Partnership

(1,092)

(908)

(7,032)

(1,526)

Net loss (income) attributable to noncontrolling interests – consolidated real estate entities

340

(2,201)

2,436

(3,071)

Net income attributable to Investors Real Estate Trust

11,003

10,753

72,006

24,087

Dividends to preferred shareholders

(2,878)

(2,878)

(11,514)

(11,514)

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

$

8,125

$

7,875

$

60,492

$

12,573

Earnings per common share from continuing operations – Investors Real Estate Trust – basic and diluted

$

.06

$

.05

$

.08

$

.04

Earnings per common share from discontinued operations – Investors Real Estate Trust – basic and diluted

.01

.02

.41

.07

NET INCOME PER COMMON SHARE – BASIC AND DILUTED

$

.07

$

.07

$

.49

$

.11

DIVIDENDS PER COMMON SHARE

$

.13

$

.13

$

.52

$

.52

 

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO
INVESTORS REAL ESTATE TRUST TO FUNDS FROM OPERATIONS






































(in thousands, except per share amounts)

Three Months  Ended April 30,

2016

2015







Per





Per





Weighted

Share



Weighted

Share





Avg Shares

And



Avg Shares

And


Amount

and Units(1)

Unit(2)

Amount

and Units(1)

Unit(2)

Net income attributable to Investors Real Estate Trust

$

11,003





$

10,753





Less dividends to preferred shareholders

(2,878)






(2,878)





Net income available to common shareholders

8,125

120,943

$

0.07

7,875

123,286

$

0.05

Adjustments:
















Noncontrolling interest – Operating Partnership

1,092

15,495




908

14,126



Depreciation and amortization of real property

15,694






18,083





Impairment of real estate investments

2,223






—





Gain on depreciable property sales

(7,910)






(4,890)





FFO applicable to Common Shares and Units(1)(3)

$

19,224

136,438

$

0.14

$

21,976

137,412

$

0.17

 



















(in thousands, except per share amounts)

Twelve Months Ended April 30,

2016

2015







Per




Per





Weighted

Share


Weighted

Share





Avg Shares

And


Avg Shares

And


Amount

and Units(1)

Unit(2)

Amount

and Units(1)

Unit(2)

Net income attributable to Investors Real Estate Trust

$

72,006





$

24,087





Less dividends to preferred shareholders

(11,514)






(11,514)





Net income available to common shareholders

60,492

123,094

$

0.49

12,573

118,004

$

0.11

Adjustments:
















Noncontrolling interest – Operating Partnership

7,032

14,278




1,526

16,594



Depreciation and amortization of real property

63,789






70,450





Impairment of real estate investments

5,983






6,105





Gain on depreciable property sales

(33,422)






(4,079)





FFO applicable to Common Shares and Units(1)(3)

$

103,874

137,372

$

0.76

$

86,575

134,598

$

0.64

____________________________


(1)

Units of the Operating Partnership are exchangeable for cash, or, at our discretion, for Common Shares on a one-for-one basis.

(2)

 Net income attributable to Investors Real Estate Trust is calculated on a per Common Share basis. FFO is calculated on a per Common Share and Unit basis.

(3)

 Excluding gain or loss on extinguishment of debt, default interest and gain on bargain purchase, FFO would have been $15.8 million and $0.12 per Common Share and Unit for the three months ended April 30, 2016 and $75.9 million and $0.55 per Common Share and Unit for the twelve months ended April 30, 2016.

 

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
RECONCILATION OF NET OPERATING INCOME TO THE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS






























(in thousands)

Three Months Ended April 30, 2016

Multifamily

Healthcare

All Other

Total

Real estate revenue

$

34,116

$

11,632

$

2,775

$

48,523

Real estate expenses

15,623

4,263

638

20,524

Net operating income

$

18,493

$

7,369

$

2,137

27,999

Depreciation and amortization










(13,517)

Impairment of real estate investments










(2,223)

General and administrative expenses










(2,951)

Acquisition and investment related costs










(397)

Other expenses










(950)

Interest expense










(10,062)

Interest and other income










600

Loss before gain on sale of real estate and other investments, gain on bargain purchase and income from discontinued operations










(1,501)

Gain on sale of real estate and other investments










8,369

Gain on bargain purchase










3,424

Income from continuing operations










10,292

Income from discontinued operations










1,463

Net income









$

11,755
















(in thousands)

Three Months Ended April 30, 2015

Multifamily

Healthcare

All Other

Total

Real estate revenue

$

30,949

$

10,693

$

3,499

$

45,141

Real estate expenses

13,469

4,055

1,020

18,544

Net operating income

$

17,480

$

6,638

$

2,479

26,597

Depreciation and amortization










(11,180)

General and administrative expenses










(2,516)

Acquisition and investment related costs










(125)

Other expenses










(207)

Interest expense










(8,972)

Interest and other income










904

Income before gain on sale of real estate and other investments and income from discontinued operations










4,501

Gain on sale of real estate and other investments










6,904

Income from continuing operations










11,405

Income from discontinued operations










2,457

Net income









$

13,862

 

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
RECONCILATION OF NET OPERATING INCOME TO THE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS






























(in thousands)

Twelve Months Ended April 30, 2016

Multifamily

Healthcare

All Other

Total

Real estate revenue

$

131,149

$

45,621

$

11,550

$

188,320

Real estate expenses

60,477

16,021

2,602

79,100

Net operating income

$

70,672

$

29,600

$

8,948

109,220

Depreciation and amortization










(49,832)

Impairment of real estate investments










(5,543)

General and administrative expenses










(11,267)

Acquisition and investment related costs










(830)

Other expenses










(2,231)

Interest expense










(35,768)

Loss on debt extinguishment










(106)

Interest and other income










2,573

Income before gain on sale of real estate and other investments, gain on bargain purchase and income from discontinued operations










6,216

Gain on sale of real estate and other investments










9,640

Gain on bargain purchase










3,424

Income from continuing operations










19,280

Income from discontinued operations










57,322

Net income









$

76,602
















(in thousands)

Twelve Months Ended April, 2015

Multifamily

Healthcare

All Other

Total

Real estate revenue

$

118,526

$

44,153

$

16,642

$

179,321

Real estate expenses

51,172

16,240

5,725

73,137

Net operating income

$

67,354

$

27,913

$

10,917

106,184

Depreciation and amortization










(42,784)

Impairment of real estate investments










(4,663)

General and administrative expenses










(11,824)

Acquisition and investment related costs










(362)

Other expenses










(1,647)

Interest expense










(34,447)

Interest and other income










2,956

Income before loss on sale of real estate and other investments and income from discontinued operations










13,413

Loss on sale of real estate and other investments










6,093

Income from continuing operations










19,506

Income from discontinued operations










9,178

Net income









$

28,684

 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/investors-real-estate-trust-announces-financial-and-operating-results-for-the-quarter-and-fiscal-year-ended-april-30-2016-300292304.html

SOURCE Investors Real Estate Trust

Copyright 2016 PR Newswire

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