Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - CENTERSPACE | iret10312018exhibit991.htm |
| 8-K - 8-K - CENTERSPACE | a103118form8-k.htm |
Exhibit 99.2
Supplemental Financial and Operating Data
Table of Contents
October 31, 2018
Page | |
Key Financial Data | |
Debt and Capital Analysis | |
Portfolio Analysis | |
S-1 | ||
Company Background
Second Quarter Fiscal 2019
We are a multifamily real estate investment trust (REIT) focused on the ownership, management, acquisition, redevelopment, and development of multifamily apartment communities. As of October 31, 2018, we owned interests in 87 multifamily properties consisting of 13,702 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).
Company Snapshot
(as of October 31, 2018)
Company Headquarters | Minot, North Dakota |
Fiscal Year-End | April 30 |
Reportable Segments | Multifamily |
Total Multifamily Properties | 87 |
Total Units | 13,702 |
Common Shares Outstanding (thousands) | 119,727 |
Limited Partnership Units Outstanding (thousands) | 13,678 |
Common Share Distribution – Quarter/Annualized | $0.07/$0.28 |
Annualized Dividend Yield | 5.2% |
Total Capitalization | $1.5 billion |
Investor Information
(as of October 31, 2018)
Board of Trustees
Jeffrey P. Caira | Trustee and Chair |
Michael T. Dance | Trustee, Chair of Audit Committee |
Mark O. Decker, Jr. | Trustee, President, Chief Executive Officer and Chief Investment Officer |
Emily Nagle Green | Trustee, Chair of Nominating and Governance Committee |
Linda J. Hall | Trustee, Chair of Compensation Committee |
Terrance P. Maxwell | Trustee |
John A. Schissel | Trustee |
Mary J. Twinem | Trustee |
Management
Mark O. Decker, Jr. | President, Chief Executive Officer, Chief Investment Officer, and Trustee |
John A. Kirchmann | Executive Vice President and Chief Financial Officer |
Anne Olson | Executive Vice President, Chief Operating Officer, General Counsel, and Secretary |
Corporate Headquarters: | Investor Relations Contact: |
1400 31st Avenue SW, Suite 60 | Jonathan Bishop |
P.O. Box 1988 | (701) 837-7104 |
Minot, ND 58702-1988 | IR@iret.com |
Trading Symbol for Common Shares: IRET | |
Trading Symbol for Series C Preferred Shares: IRET PRC | |
Stock Exchange Listing: NYSE | |
S-2 | ||
Common Share Data (NYSE: IRET)
2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | ||||||||||||||||
Fiscal Year 2019 | Fiscal Year 2019 | Fiscal Year 2018 | Fiscal Year 2018 | Fiscal Year 2018 | ||||||||||||||||
High Closing Price | $ | 5.98 | $ | 5.94 | $ | 5.58 | $ | 6.06 | $ | 6.32 | ||||||||||
Low Closing Price | $ | 5.33 | $ | 5.13 | $ | 4.65 | $ | 5.52 | $ | 5.81 | ||||||||||
Average Closing Price | $ | 5.51 | $ | 5.51 | $ | 5.09 | $ | 5.80 | $ | 6.09 | ||||||||||
Closing Price at end of quarter | $ | 5.43 | $ | 5.48 | $ | 5.33 | $ | 5.67 | $ | 5.85 | ||||||||||
Common Share Distributions – annualized | $ | 0.28 | $ | 0.28 | $ | 0.28 | $ | 0.28 | $ | 0.28 | ||||||||||
Closing Dividend Yield – annualized | 5.2 | % | 5.1 | % | 5.3 | % | 4.9 | % | 4.8 | % | ||||||||||
Closing common shares outstanding (thousands) | $ | 119,727 | $ | 119,507 | $ | 119,526 | $ | 120,035 | $ | 120,188 | ||||||||||
Closing limited partnership units outstanding (thousands) | $ | 13,678 | $ | 13,895 | $ | 14,099 | $ | 14,168 | $ | 14,618 | ||||||||||
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands) | $ | 724,389 | $ | 731,043 | $ | 712,221 | $ | 760,931 | $ | 788,615 | ||||||||||
This Supplemental Operating and Financial Data 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 our future plan and anticipated operating results, are based on our 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; 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 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 our Form 10-K for the fiscal year ended April 30, 2018 subsequent quarterly reports on Form 10-Q, and other public filings. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
S-3 | ||
IRET
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands)
10/31/2018 | 7/31/2018 | 4/30/2018 | 1/31/2018 | 10/31/2017 | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Real estate investments | ||||||||||||||||||||
Property owned | $ | 1,638,072 | $ | 1,636,233 | $ | 1,669,764 | $ | 1,568,725 | $ | 1,510,890 | ||||||||||
Less accumulated depreciation | (345,015 | ) | (326,772 | ) | (311,324 | ) | (304,149 | ) | (292,976 | ) | ||||||||||
1,293,057 | 1,309,461 | 1,358,440 | 1,264,576 | 1,217,914 | ||||||||||||||||
Unimproved land | 6,522 | 7,926 | 11,476 | 15,123 | 15,216 | |||||||||||||||
Mortgage loans receivable | 10,530 | 10,530 | 10,329 | 10,329 | 10,329 | |||||||||||||||
Total real estate investments | 1,310,109 | 1,327,917 | 1,380,245 | 1,290,028 | 1,243,459 | |||||||||||||||
Assets held for sale and assets of discontinued operations | — | — | — | — | 239,688 | |||||||||||||||
Cash and cash equivalents | 12,777 | 16,261 | 11,891 | 22,666 | 42,464 | |||||||||||||||
Restricted cash | 5,085 | 4,103 | 4,225 | 121,337 | 3,782 | |||||||||||||||
Other assets | 29,769 | 27,885 | 30,297 | 21,664 | 21,634 | |||||||||||||||
TOTAL ASSETS | $ | 1,357,740 | $ | 1,376,166 | $ | 1,426,658 | $ | 1,455,695 | $ | 1,551,027 | ||||||||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND EQUITY | ||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||
Liabilities held for sale and liabilities of discontinued operations | $ | — | $ | — | $ | — | $ | 2,016 | $ | 95,193 | ||||||||||
Accounts payable and accrued expenses | 27,920 | 28,112 | 29,018 | 33,776 | 32,581 | |||||||||||||||
Revolving line of credit | 69,500 | 130,000 | 124,000 | 67,000 | 247,500 | |||||||||||||||
Term loans payable, net of loan costs | 143,956 | 69,540 | 69,514 | 69,483 | — | |||||||||||||||
Mortgages payable, net of loan costs | 447,549 | 464,557 | 509,919 | 553,388 | 561,798 | |||||||||||||||
Construction debt | — | — | — | — | 21,649 | |||||||||||||||
TOTAL LIABILITIES | 688,925 | 692,209 | 732,451 | 725,663 | 958,721 | |||||||||||||||
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES | 6,078 | 6,230 | 6,644 | 6,644 | 6,812 | |||||||||||||||
EQUITY | ||||||||||||||||||||
Series C Preferred Shares of Beneficial Interest | 99,456 | 99,456 | 99,456 | 99,456 | 99,467 | |||||||||||||||
Common Shares of Beneficial Interest | 900,526 | 899,708 | 900,097 | 910,173 | 910,683 | |||||||||||||||
Accumulated distributions in excess of net income | (416,819 | ) | (402,190 | ) | (395,669 | ) | (364,684 | ) | (490,612 | ) | ||||||||||
Accumulated other comprehensive income | 3,321 | 1,987 | 1,779 | 359 | — | |||||||||||||||
Total shareholders’ equity | 586,484 | 598,961 | 605,663 | 645,304 | 519,538 | |||||||||||||||
Noncontrolling interests – Operating Partnership | 69,334 | 71,390 | 73,012 | 76,915 | 64,291 | |||||||||||||||
Noncontrolling interests – consolidated real estate entities | 6,919 | 7,376 | 8,888 | 1,169 | 1,665 | |||||||||||||||
Total equity | 662,737 | 677,727 | 687,563 | 723,388 | 585,494 | |||||||||||||||
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND EQUITY | $ | 1,357,740 | $ | 1,376,166 | $ | 1,426,658 | $ | 1,455,695 | $ | 1,551,027 | ||||||||||
S-4 | ||
IRET
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share amounts)
Six months ended | Three Months Ended | ||||||||||||||||||||||||||||
OPERATING RESULTS | 10/31/2018 | 10/31/2017 | 10/31/2018 | 7/31/2018 | 4/30/2018 | 1/31/2018 | 10/31/2017 | ||||||||||||||||||||||
Real estate revenue | $ | 91,584 | $ | 82,844 | $ | 45,638 | $ | 45,946 | $ | 44,185 | $ | 42,716 | $ | 41,866 | |||||||||||||||
Real estate expenses | 38,865 | 36,245 | 19,336 | 19,529 | 18,734 | 18,055 | 18,718 | ||||||||||||||||||||||
Net operating income | 52,719 | 46,599 | 26,302 | 26,417 | 25,451 | 24,661 | 23,148 | ||||||||||||||||||||||
Property management expense | (2,686 | ) | (2,728 | ) | (1,319 | ) | (1,367 | ) | (1,411 | ) | (1,387 | ) | (1,372 | ) | |||||||||||||||
Casualty gain/loss | (450 | ) | (600 | ) | (225 | ) | (225 | ) | 155 | (55 | ) | (115 | ) | ||||||||||||||||
Depreciation/amortization | (37,803 | ) | (42,608 | ) | (19,191 | ) | (18,612 | ) | (21,072 | ) | (18,390 | ) | (17,270 | ) | |||||||||||||||
Impairment of real estate investments | — | (256 | ) | — | — | (17,809 | ) | — | — | ||||||||||||||||||||
General and administrative expenses | (7,244 | ) | (7,120 | ) | (3,374 | ) | (3,870 | ) | (4,123 | ) | (3,011 | ) | (3,118 | ) | |||||||||||||||
Interest expense | (16,382 | ) | (16,640 | ) | (7,997 | ) | (8,385 | ) | (8,302 | ) | (9,236 | ) | (8,509 | ) | |||||||||||||||
Loss on extinguishment of debt | (556 | ) | (533 | ) | (4 | ) | (552 | ) | (122 | ) | (285 | ) | (334 | ) | |||||||||||||||
Interest and other income | 945 | 483 | 429 | 516 | 592 | 433 | 255 | ||||||||||||||||||||||
Loss before income on sale of real estate and other investments and income from discontinued operations | (11,457 | ) | (23,403 | ) | (5,379 | ) | (6,078 | ) | (26,641 | ) | (7,270 | ) | (7,315 | ) | |||||||||||||||
Income on sale of real estate and other investments | 8,992 | 5,448 | (232 | ) | 9,224 | 2,285 | 12,387 | 5,324 | |||||||||||||||||||||
Income (loss) from continuing operations | (2,465 | ) | (17,955 | ) | (5,611 | ) | 3,146 | (24,356 | ) | 5,117 | (1,991 | ) | |||||||||||||||||
Income (loss) from discontinued operations | 570 | 17,815 | — | 570 | 197 | 146,811 | 15,130 | ||||||||||||||||||||||
Net income (loss) | $ | (1,895 | ) | $ | (140 | ) | $ | (5,611 | ) | $ | 3,716 | $ | (24,159 | ) | $ | 151,928 | $ | 13,139 | |||||||||||
Net (income) loss attributable to noncontrolling interest – Operating Partnership | 587 | 871 | 722 | (135 | ) | 2,663 | (16,236 | ) | (773 | ) | |||||||||||||||||||
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities | (334 | ) | 826 | 331 | (665 | ) | 622 | 413 | 455 | ||||||||||||||||||||
Net income (loss) attributable to controlling interests | (1,642 | ) | 1,557 | (4,558 | ) | 2,916 | (20,874 | ) | 136,105 | 12,821 | |||||||||||||||||||
Dividends to preferred shareholders | (3,411 | ) | (5,098 | ) | (1,706 | ) | (1,705 | ) | (1,705 | ) | (1,766 | ) | (2,812 | ) | |||||||||||||||
Redemption of Preferred Shares | — | (3,649 | ) | — | — | — | (8 | ) | (3,649 | ) | |||||||||||||||||||
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ | (5,053 | ) | $ | (7,190 | ) | $ | (6,264 | ) | $ | 1,211 | $ | (22,579 | ) | $ | 134,331 | $ | 6,360 | |||||||||||
Per Share Data | |||||||||||||||||||||||||||||
Earnings (loss) per common share from continuing operations – basic & diluted | $ | (0.04 | ) | $ | (0.19 | ) | $ | (0.05 | ) | $ | 0.01 | $ | (0.19 | ) | $ | 0.03 | $ | (0.06 | ) | ||||||||||
Earnings per common share from discontinued operations – basic & diluted | — | 0.13 | — | — | — | 1.09 | 0.11 | ||||||||||||||||||||||
Net income (loss) per common share – basic & diluted | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.05 | ) | $ | 0.01 | $ | (0.19 | ) | $ | 1.12 | $ | 0.05 | |||||||||||
Percentage of Revenues | |||||||||||||||||||||||||||||
Real estate expenses | 42.44 | % | 43.8 | % | 42.4 | % | 42.5 | % | 42.4 | % | 42.3 | % | 44.7 | % | |||||||||||||||
General and administrative expenses | 7.91 | % | 8.6 | % | 7.4 | % | 8.4 | % | 9.3 | % | 7.0 | % | 7.4 | % | |||||||||||||||
Interest | 17.89 | % | 20.1 | % | 17.5 | % | 18.2 | % | 18.8 | % | 21.6 | % | 20.3 | % | |||||||||||||||
Income from discontinued operations | 0.62 | % | 21.5 | % | — | % | 1.2 | % | 0.4 | % | 343.7 | % | 36.1 | % | |||||||||||||||
Net (loss) income | (2.07 | )% | (0.2 | )% | (12.3 | )% | 8.1 | % | (54.7 | )% | 355.7 | % | 31.4 | % | |||||||||||||||
S-5 | ||
IRET
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO
CONTROLLING INTERESTS TO FFO AND CORE FFO (unaudited)
(in thousands, except per share and unit amounts)
Six Months Ended | Three Months Ended | ||||||||||||||||||||||||||||
10/31/2018 | 10/31/2017 | 10/31/2018 | 7/31/2018 | 4/30/2018 | 1/31/2018 | 10/31/2017 | |||||||||||||||||||||||
Funds From Operations(1) | |||||||||||||||||||||||||||||
Net income (loss) attributable to controlling interests | $ | (1,642 | ) | $ | 1,557 | $ | (4,558 | ) | $ | 2,916 | $ | (20,874 | ) | $ | 136,105 | $ | 12,821 | ||||||||||||
Less dividends to preferred shareholders | (3,411 | ) | (5,098 | ) | (1,706 | ) | (1,705 | ) | (1,705 | ) | (1,766 | ) | (2,812 | ) | |||||||||||||||
Less redemption of preferred shares | — | (3,649 | ) | — | — | — | (8 | ) | (3,649 | ) | |||||||||||||||||||
Net income (loss) available to common shareholders | (5,053 | ) | (7,190 | ) | (6,264 | ) | 1,211 | (22,579 | ) | 134,331 | 6,360 | ||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||
Noncontrolling interests – Operating Partnership | (587 | ) | (871 | ) | (722 | ) | 135 | (2,663 | ) | 16,236 | 773 | ||||||||||||||||||
Depreciation and amortization of real property | 36,282 | 48,013 | 18,446 | 17,837 | 20,269 | 19,017 | 19,894 | ||||||||||||||||||||||
Impairment of real estate investments attributable to controlling interests | — | 256 | — | — | 15,192 | — | — | ||||||||||||||||||||||
Gain on depreciable property sales | (8,395 | ) | (17,686 | ) | 232 | (8,628 | ) | (2,210 | ) | (163,791 | ) | (17,562 | ) | ||||||||||||||||
FFO applicable to common shares and Units | $ | 22,247 | $ | 22,522 | $ | 11,692 | $ | 10,555 | $ | 8,009 | $ | 5,793 | $ | 9,465 | |||||||||||||||
FFO per share and unit – basic and diluted | $ | 0.17 | $ | 0.17 | $ | 0.09 | $ | 0.08 | $ | 0.06 | $ | 0.04 | $ | 0.07 | |||||||||||||||
Adjustments to Core FFO: | |||||||||||||||||||||||||||||
Loss on extinguishment of debt | 556 | 539 | 4 | 552 | 122 | 6,787 | 340 | ||||||||||||||||||||||
Redemption of Preferred Shares | — | 3,649 | — | — | — | 8 | 3,649 | ||||||||||||||||||||||
Severance and transitions costs | 510 | 650 | — | 510 | 301 | — | 186 | ||||||||||||||||||||||
Impairment of nondepreciable assets | — | — | — | — | 2,617 | — | — | ||||||||||||||||||||||
Core FFO applicable to common shares and Units | $ | 23,313 | $ | 27,360 | $ | 11,696 | $ | 11,617 | $ | 11,049 | $ | 12,588 | $ | 13,640 | |||||||||||||||
Core FFO per share and unit – basic and diluted | $ | 0.17 | $ | 0.20 | $ | 0.09 | $ | 0.09 | $ | 0.08 | $ | 0.09 | $ | 0.10 | |||||||||||||||
Weighted average shares and units | 133,245 | 135,194 | 133,185 | 133,271 | 133,703 | 134,175 | 134,767 | ||||||||||||||||||||||
(1) | See Definitions section. |
S-6 | ||
IRET
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO
CONTROLLING INTERESTS TO ADJUSTED EARNINGS BEFORE INTEREST,
TAXES, DEPRECIATION, AND AMORTIZATION (ADJUSTED EBITDA) (unaudited)
(in thousands)
Six Months Ended | Three Months Ended | ||||||||||||||||||||||||||||
10/31/2018 | 10/31/2017 | 10/31/2018 | 7/31/2018 | 4/30/2018 | 1/31/2018 | 10/31/2017 | |||||||||||||||||||||||
Adjusted EBITDA(1) | |||||||||||||||||||||||||||||
Net income (loss) attributable to controlling interests | $ | (1,642 | ) | $ | 1,557 | $ | (4,558 | ) | $ | 2,916 | $ | (20,874 | ) | $ | 136,105 | $ | 12,821 | ||||||||||||
Adjustments: | |||||||||||||||||||||||||||||
Noncontrolling interests – Operating Partnership | (587 | ) | (871 | ) | (722 | ) | 135 | (2,663 | ) | 16,236 | 773 | ||||||||||||||||||
Income (loss) before noncontrolling interests – Operating Partnership | (2,229 | ) | 686 | (5,280 | ) | 3,051 | (23,537 | ) | 152,341 | 13,594 | |||||||||||||||||||
Add: | |||||||||||||||||||||||||||||
Interest expense | 15,639 | 19,226 | 7,656 | 7,983 | 7,884 | 9,569 | 9,523 | ||||||||||||||||||||||
Loss on extinguishment of debt | 556 | 539 | 4 | 552 | 122 | 6,787 | 340 | ||||||||||||||||||||||
Depreciation/amortization related to real estate investments | 36,432 | 48,192 | 18,520 | 17,912 | 20,347 | 19,100 | 19,977 | ||||||||||||||||||||||
Impairment of unimproved land | — | — | — | — | 2,617 | — | — | ||||||||||||||||||||||
Impairment of real estate investments attributable to controlling interests | — | 256 | — | — | 15,192 | — | — | ||||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||
Interest income | (891 | ) | (880 | ) | (410 | ) | (481 | ) | (569 | ) | (408 | ) | (316 | ) | |||||||||||||||
Loss (gain) on sale of real estate and other investments | (8,396 | ) | (17,686 | ) | 232 | (8,628 | ) | (2,210 | ) | (163,791 | ) | (17,562 | ) | ||||||||||||||||
Adjusted EBITDA | $ | 41,111 | $ | 50,333 | $ | 20,722 | $ | 20,389 | $ | 19,846 | $ | 23,598 | $ | 25,556 | |||||||||||||||
Ratios | |||||||||||||||||||||||||||||
Adjusted EBITDA(1)/Interest expense | 2.51 | x | 2.51 | x | 2.59 | x | 2.43 | x | 2.39 | x | 2.36 | x | 2.57 | x | |||||||||||||||
Adjusted EBITDA(1)/Interest expense plus preferred distributions | 2.08 | x | 2.00 | x | 2.14 | x | 1.91 | x | 1.98 | x | 2.01 | x | 2.00 | x | |||||||||||||||
(1) | See Definitions. |
(2) | Included in real estate revenue in the Statement of Operations. |
S-7 | ||
IRET
DEBT ANALYSIS
(in thousands)
Debt Maturity Schedule
Annual Expirations
Future Maturities of Debt(1) | ||||||||||||||||||
Fiscal Year | Fixed Debt | Variable Debt | Total Debt | Weighted Average(2) | % of Total Debt | |||||||||||||
2019 | — | — | — | — | — | |||||||||||||
2020 | $ | 64,085 | — | $ | 64,085 | 5.93 | % | 9.7 | % | |||||||||
2021 | 54,570 | — | 54,570 | 5.05 | % | 8.2 | % | |||||||||||
2022 | 100,715 | — | 100,715 | 5.23 | % | 15.2 | % | |||||||||||
2023 | 27,713 | — | 27,713 | 4.13 | % | 4.1 | % | |||||||||||
Thereafter | 202,331 | — | 202,331 | 3.79 | % | 30.5 | % | |||||||||||
Total secured maturing debt | $ | 449,414 | — | $ | 449,414 | 4.59 | % | 67.7 | % | |||||||||
Unsecured line of credit | — | $ | 69,500 | 69,500 | 3.72 | % | 10.5 | % | ||||||||||
Unsecured term loans(3) | 145,000 | — | 145,000 | 3.96 | % | 21.8 | % | |||||||||||
Total debt | $ | 594,414 | $ | 69,500 | $ | 663,914 | 4.41 | % | 100.0 | % | ||||||||
(1) | Includes line of credit and term loans. |
(2) | Weighted average interest rate of debt that matures in fiscal year. |
(3) | 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. |
10/31/2018 | 7/31/2018 | 4/30/2018 | 1/31/2018 | 10/31/2017 | ||||||||||||||||
Debt Balances Outstanding(1) | ||||||||||||||||||||
Secured fixed rate | $ | 449,414 | $ | 466,555 | $ | 489,401 | $ | 494,874 | $ | 593,854 | ||||||||||
Secured variable rate | — | — | 22,739 | 61,001 | 86,672 | |||||||||||||||
Unsecured line of credit | 69,500 | 130,000 | 124,000 | 67,000 | 247,500 | |||||||||||||||
Unsecured term loans | 145,000 | 70,000 | 70,000 | 70,000 | — | |||||||||||||||
Debt total | $ | 663,914 | $ | 666,555 | $ | 706,140 | $ | 692,875 | $ | 928,026 | ||||||||||
Weighted Average Interest Rate Secured | 4.59 | % | 4.65 | % | 4.69 | % | 4.63 | % | 4.63 | % | ||||||||||
Line of Credit Rate | 3.72 | % | 3.83 | % | 3.63 | % | 3.45 | % | 3.08 | % | ||||||||||
Term Loan Rate | 3.96 | % | 3.86 | % | 3.86 | % | 4.01 | — | ||||||||||||
(1) | Includes mortgages on properties held for sale. |
S-8 | ||
IRET
CAPITAL ANALYSIS
(in thousands, except per share and unit amounts)
Three Months Ended | ||||||||||||||||||||
10/31/2018 | 7/31/2018 | 4/30/2018 | 1/31/2018 | 10/31/2017 | ||||||||||||||||
Equity Capitalization | ||||||||||||||||||||
Common shares outstanding | 119,727 | 119,507 | 119,526 | 120,035 | 120,188 | |||||||||||||||
Operating partnership units outstanding | 13,678 | 13,895 | 14,099 | 14,168 | 14,618 | |||||||||||||||
Total common shares and units outstanding | 133,405 | 133,402 | 133,625 | 134,203 | 134,806 | |||||||||||||||
Market price per common share (closing price at end of period) | $ | 5.43 | $ | 5.48 | $ | 5.33 | $ | 5.67 | $ | 5.85 | ||||||||||
Equity capitalization-common shares and units | 724,389 | 731,043 | 712,221 | 760,931 | 788,615 | |||||||||||||||
Recorded book value of preferred shares | $ | 99,456 | $ | 99,456 | $ | 99,456 | $ | 99,456 | $ | 99,467 | ||||||||||
Total equity capitalization | $ | 823,845 | $ | 830,499 | $ | 811,677 | $ | 860,387 | $ | 888,082 | ||||||||||
Debt Capitalization | ||||||||||||||||||||
Total debt | $ | 663,914 | $ | 666,555 | $ | 706,140 | $ | 692,875 | $ | 927,968 | ||||||||||
Total capitalization | $ | 1,487,759 | $ | 1,497,054 | $ | 1,517,817 | $ | 1,553,262 | $ | 1,816,050 | ||||||||||
Total debt to total capitalization | 0.45:1 | 0.45:1 | 0.47:1 | 0.45:1 | 0.51:1 | |||||||||||||||
Six Months Ended | Three Months Ended | ||||||||||||||||||||||||||||
10/31/2018 | 10/31/2017 | 10/31/2018 | 7/31/2018 | 4/30/2018 | 1/31/2018 | 10/31/2017 | |||||||||||||||||||||||
Earnings to fixed charges(1) | (2 | ) | (3 | ) | (4 | ) | 1.30 | x | (5 | ) | 1.56 | x | (6 | ) | |||||||||||||||
Earnings to combined fixed charges and preferred distributions(1) | (2 | ) | (3 | ) | (4 | ) | 1.08 | x | (5 | ) | 1.33 | x | (6 | ) | |||||||||||||||
Debt service coverage ratio(1) | 1.94 | x | 1.79 | x | 1.99 | x | 1.88 | x | 1.81 | x | 1.78 | x | 1.84 | x | |||||||||||||||
Distribution Data | |||||||||||||||||||||||||||||
Common shares and units outstanding at record date | 133,402 | 135,166 | 133,402 | 133,402 | 133,625 | 134,203 | 134,806 | ||||||||||||||||||||||
Total common distribution paid | $ | 18,684 | $ | 18,974 | $ | 9,339 | $ | 9,345 | $ | 9,395 | $ | 9,420 | $ | 9,462 | |||||||||||||||
Common distribution per share and unit | $ | 0.14 | $ | 0.14 | $ | 0.07 | $ | 0.07 | $ | 0.07 | $ | 0.07 | $ | 0.07 | |||||||||||||||
Payout ratio (FFO per share and unit basis)(1) | 82.4 | % | 82.4 | % | 77.8 | % | 87.5 | % | 116.7 | % | 175.0 | % | 100.0 | % | |||||||||||||||
Payout ratio (Core FFO per share and unit basis)(1) | 82.4 | % | 70.0 | % | 77.8 | % | 77.8 | % | 87.5 | % | 77.8 | % | 70.0 | % | |||||||||||||||
(1) | See Definitions section. |
(2) | Earnings were inadequate to cover (a) fixed charges and (b) combined fixed charged and preferred distributions by $2.7 million and $6.1 million, respectively, for the six months ended October 31, 2018. The ratio of earnings to fixed charges and earnings to combined fixed charges and preferred distributions was 0.84x and 0.69x, respectively, for the six months ended October 31, 2018. |
(3) | Earnings were inadequate to cover (a) fixed charges and (b) combined fixed charged and preferred distributions by $17.2 million and $22.3 million, respectively. Excluding non-cash depreciation charges related to a change in depreciable lives of $14.4 million and impairment charges of $256 thousand in the six months ended October 31, 2017, the ratio of earnings to fixed charges and of earnings to combined fixed charges and preferred distributions would have been 0.88x and 0.70x, respectively, for the six months ended October 31, 2017. |
(4) | Earnings were inadequate to cover (a) fixed charges and (b) combined fixed charged and preferred distributions by $5.2 million and $6.9 million, respectively, for the three months ended October 31, 2018. The ratio of earnings to fixed charges and earnings to combined fixed charges and preferred distributions was 0.35x and 0.29x, respectively, for the three months ended October 31, 2018. |
(5) | Earnings were inadequate to cover (a) fixed charges and (b) combined fixed charges and preferred distributions by $23.7 million and $25.4 million, respectively. Excluding non-cash asset impairment charges of $17.8 million in the three months ended April 30, 2018, the ratio of earnings to fixed charges and of earnings to combined fixed charges and preferred distributions would have been 0.29x and 0.24x, respectively, for the three months ended April 30, 2018. |
(6) | Earnings were inadequate to cover (a) fixed charges and (b) combined fixed charges and preferred distributions by $1.6 million and $4.5 million, respectively, for the three months ended October 31, 2017. The ratio of earnings to fixed charges and earnings to combined fixed charges and preferred distributions was 0.83x and 0.65x, respectively, for the three months ended October 31, 2017. |
S-9 | ||
IRET
NET OPERATING INCOME DETAIL
(in thousands)
Three months ended October 31, | Six Months Ended October 31, | ||||||||||||||||||||||||||||||
2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | ||||||||||||||||||||||||
Real estate rental revenue | |||||||||||||||||||||||||||||||
Same-store | $ | 37,208 | $ | 35,910 | $ | 1,298 | 3.6 | % | $ | 73,946 | $ | 71,578 | $ | 2,368 | 3.3 | % | |||||||||||||||
Non-same-store | 6,666 | 1,547 | 5,119 | 330.9 | % | 13,017 | 1,877 | 11,140 | 593.5 | % | |||||||||||||||||||||
Other properties and dispositions | 1,764 | 4,409 | (2,645 | ) | (60.0 | )% | 4,621 | 9,389 | (4,768 | ) | (50.8 | )% | |||||||||||||||||||
Total | 45,638 | 41,866 | 3,772 | 9.0 | % | 91,584 | 82,844 | 8,740 | 10.5 | % | |||||||||||||||||||||
Real estate expenses | |||||||||||||||||||||||||||||||
Same-store | 16,079 | 16,473 | (394 | ) | (2.4 | )% | 32,172 | 32,051 | 121 | 0.4 | % | ||||||||||||||||||||
Non-same-store | 2,689 | 728 | 1,961 | 269.4 | % | 5,082 | 883 | 4,199 | 475.5 | % | |||||||||||||||||||||
Other properties and dispositions | 568 | 1,517 | (949 | ) | (62.6 | )% | 1,611 | 3,311 | (1,700 | ) | (51.3 | )% | |||||||||||||||||||
Total | 19,336 | 18,718 | 618 | 3.3 | % | 38,865 | 36,245 | 2,620 | 7.2 | % | |||||||||||||||||||||
Net operating income (NOI) | |||||||||||||||||||||||||||||||
Same-store | 21,129 | 19,437 | 1,692 | 8.7 | % | 41,774 | 39,527 | 2,247 | 5.7 | % | |||||||||||||||||||||
Non-same-store | 3,977 | 819 | 3,158 | 385.6 | % | 7,935 | 994 | 6,941 | 698.3 | % | |||||||||||||||||||||
Other properties and dispositions | 1,196 | 2,892 | (1,696 | ) | (58.6 | )% | 3,010 | 6,078 | (3,068 | ) | (50.5 | )% | |||||||||||||||||||
Net operating income | $ | 26,302 | $ | 23,148 | $ | 3,154 | 13.6 | % | $ | 52,719 | $ | 46,599 | $ | 6,120 | 13.1 | % | |||||||||||||||
Reconciliation of NOI to net income (loss) available to common shareholders | |||||||||||||||||||||||||||||||
Property management | $ | (1,319 | ) | $ | (1,372 | ) | $ | 53 | (3.9 | )% | $ | (2,686 | ) | $ | (2,728 | ) | $ | 42 | (1.5 | )% | |||||||||||
Casualty | (225 | ) | (115 | ) | (110 | ) | 95.7 | % | (450 | ) | (600 | ) | 150 | (25.0 | )% | ||||||||||||||||
Depreciation/amortization | (19,191 | ) | (17,270 | ) | (1,921 | ) | 11.1 | % | (37,803 | ) | (42,608 | ) | 4,805 | (11.3 | )% | ||||||||||||||||
Impairment of real estate investments | — | — | — | — | % | — | (256 | ) | 256 | (100.0 | )% | ||||||||||||||||||||
General and administrative expenses | (3,374 | ) | (3,118 | ) | (256 | ) | 8.2 | % | (7,244 | ) | (7,120 | ) | (124 | ) | 1.7 | % | |||||||||||||||
Interest expense | (7,997 | ) | (8,509 | ) | 512 | (6.0 | )% | (16,382 | ) | (16,640 | ) | 258 | (1.6 | )% | |||||||||||||||||
Loss on debt extinguishment | (4 | ) | (334 | ) | 330 | (98.8 | )% | (556 | ) | (533 | ) | (23 | ) | 4.3 | % | ||||||||||||||||
Interest and other income | 429 | 255 | 174 | 68.2 | % | 945 | 483 | 462 | 95.7 | % | |||||||||||||||||||||
Loss before gain on sale of real estate and other investments and income from discontinued operations | (5,379 | ) | (7,315 | ) | 1,936 | (26.5 | )% | (11,457 | ) | (23,403 | ) | 11,946 | (51.0 | )% | |||||||||||||||||
Gain on sale of real estate and other investments | (232 | ) | 5,324 | (5,556 | ) | (104.4 | )% | 8,992 | 5,448 | 3,544 | 65.1 | % | |||||||||||||||||||
Income (loss) from continuing operations | (5,611 | ) | (1,991 | ) | (3,620 | ) | 181.8 | % | (2,465 | ) | (17,955 | ) | 15,490 | (86.3 | )% | ||||||||||||||||
Income (loss) from discontinued operations | — | 15,130 | (15,130 | ) | (100.0 | )% | 570 | 17,815 | (17,245 | ) | (96.8 | )% | |||||||||||||||||||
Net income (loss) | $ | (5,611 | ) | $ | 13,139 | $ | (18,750 | ) | (142.7 | )% | $ | (1,895 | ) | $ | (140 | ) | $ | (1,755 | ) | 1,253.6 | % | ||||||||||
Net (income) loss attributable to noncontrolling interests – Operating Partnership | 722 | (773 | ) | 1,495 | (193.4 | )% | 587 | 871 | (284 | ) | (32.6 | )% | |||||||||||||||||||
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities | 331 | 455 | (124 | ) | (27.3 | )% | (334 | ) | 826 | (1,160 | ) | (140.4 | )% | ||||||||||||||||||
Net income (loss) attributable to controlling interests | (4,558 | ) | 12,821 | (17,379 | ) | (135.6 | )% | (1,642 | ) | 1,557 | (3,199 | ) | (205.5 | )% | |||||||||||||||||
Dividends to preferred shareholders | (1,706 | ) | (2,812 | ) | 1,106 | (39.3 | )% | (3,411 | ) | (5,098 | ) | 1,687 | (33.1 | )% | |||||||||||||||||
Redemption of Preferred Shares | — | (3,649 | ) | 3,649 | (100.0 | )% | — | (3,649 | ) | 3,649 | — | % | |||||||||||||||||||
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ | (6,264 | ) | $ | 6,360 | $ | (12,624 | ) | (198.5 | )% | $ | (5,053 | ) | $ | (7,190 | ) | $ | 2,137 | (29.7 | )% | |||||||||||
S-10 | ||
IRET
SAME-STORE SECOND QUARTER COMPARISONS
(in thousands, except property data amounts)
Apartment Homes Included | Revenues | Expenses | NOI | |||||||||||||||||||||||||||||||||
Regions | FY19Q2 | FY18Q2 | % Change | FY19Q2 | FY18Q2 | % Change | FY19Q2 | FY18Q2 | % Change | |||||||||||||||||||||||||||
Rochester, MN | 1,711 | $ | 6,187 | $ | 5,990 | 3.3 | % | $ | 2,463 | $ | 2,562 | (3.9 | )% | $ | 3,724 | $ | 3,428 | 8.6 | % | |||||||||||||||||
Minneapolis, MN | 1,296 | 5,549 | 5,263 | 5.4 | % | 2,013 | 2,099 | (4.1 | )% | 3,536 | 3,164 | 11.8 | % | |||||||||||||||||||||||
Grand Forks, ND | 1,554 | 4,147 | 4,223 | (1.8 | )% | 1,963 | 1,896 | 3.5 | % | 2,184 | 2,327 | (6.1 | )% | |||||||||||||||||||||||
Omaha, NE | 1,370 | 3,736 | 3,557 | 5.0 | % | 1,663 | 1,729 | (3.8 | )% | 2,073 | 1,828 | 13.4 | % | |||||||||||||||||||||||
Bismarck, ND | 1,259 | 3,563 | 3,534 | 0.8 | % | 1,516 | 1,622 | (6.5 | )% | 2,047 | 1,912 | 7.1 | % | |||||||||||||||||||||||
St. Cloud, MN | 1,190 | 3,444 | 3,244 | 6.2 | % | 1,588 | 1,716 | (7.5 | )% | 1,856 | 1,528 | 21.5 | % | |||||||||||||||||||||||
Topeka, KS | 1,042 | 2,496 | 2,418 | 3.2 | % | 1,223 | 1,051 | 16.4 | % | 1,273 | 1,367 | (6.9 | )% | |||||||||||||||||||||||
Billings, MT | 770 | 2,111 | 2,036 | 3.7 | % | 892 | 939 | (5.0 | )% | 1,219 | 1,097 | 11.1 | % | |||||||||||||||||||||||
Sioux Falls, SD | 969 | 2,526 | 2,349 | 7.5 | % | 1,181 | 1,205 | (2.0 | )% | 1,345 | 1,144 | 17.6 | % | |||||||||||||||||||||||
Minot, ND | 712 | 2,089 | 2,030 | 2.9 | % | 968 | 1,074 | (9.9 | )% | 1,121 | 956 | 17.3 | % | |||||||||||||||||||||||
Rapid City, SD | 474 | 1,360 | 1,266 | 7.4 | % | 609 | 580 | 5.0 | % | 751 | 686 | 9.5 | % | |||||||||||||||||||||||
Same-Store Total | 12,347 | $ | 37,208 | $ | 35,910 | 3.6 | % | $ | 16,079 | $ | 16,473 | (2.4 | )% | $ | 21,129 | $ | 19,437 | 8.7 | % | |||||||||||||||||
Apartment Homes Included | Weighted Average Occupancy (1) | Weighted Average Monthly Rental Rate (2) | Weighted Average Monthly Revenue per Occupied Home (3) | |||||||||||||||||||||||||||||||
Regions | FY19Q2 | FY18Q2 | % Change | FY19Q2 | FY18Q2 | % Change | FY19Q2 | FY18Q2 | % Change | |||||||||||||||||||||||||
Rochester, MN | 1,711 | 92.7 | % | 92.2 | % | 0.5 | % | $ | 1,221 | $ | 1,249 | (2.2 | )% | $ | 1,300 | $ | 1,265 | 2.8 | % | |||||||||||||||
Minneapolis, MN | 1,296 | 92.9 | % | 92.8 | % | 0.1 | % | 1,424 | 1,378 | 3.3 | % | 1,537 | 1,459 | 5.3 | % | |||||||||||||||||||
Grand Forks, ND | 1,554 | 91.2 | % | 94.8 | % | (3.8 | )% | 919 | 913 | 0.7 | % | 975 | 955 | 2.1 | % | |||||||||||||||||||
Omaha, NE | 1,370 | 93.8 | % | 94.0 | % | (0.2 | )% | 879 | 856 | 2.7 | % | 969 | 921 | 5.2 | % | |||||||||||||||||||
Bismarck, ND | 1,259 | 94.4 | % | 92.0 | % | 2.6 | % | 957 | 979 | (2.2 | )% | 1,000 | 1,017 | (1.7 | )% | |||||||||||||||||||
St. Cloud, MN | 1,190 | 93.3 | % | 93.4 | % | (0.1 | )% | 950 | 906 | 4.9 | % | 1,034 | 973 | 6.3 | % | |||||||||||||||||||
Topeka, KS | 1,042 | 93.8 | % | 94.6 | % | (0.8 | )% | 816 | 798 | 2.3 | % | 851 | 818 | 4.0 | % | |||||||||||||||||||
Billings, MT | 770 | 93.4 | % | 89.6 | % | 4.2 | % | 915 | 923 | (0.9 | )% | 978 | 984 | (0.6 | )% | |||||||||||||||||||
Sioux Falls, SD | 969 | 93.2 | % | 93.3 | % | (0.1 | )% | 854 | 813 | 5.0 | % | 932 | 866 | 7.6 | % | |||||||||||||||||||
Minot, ND | 712 | 92.9 | % | 93.4 | % | (0.5 | )% | 1,013 | 1,013 | 0.0 | % | 1,053 | 1,017 | 3.5 | % | |||||||||||||||||||
Rapid City, SD | 474 | 94.5 | % | 92.7 | % | 1.9 | % | 938 | 904 | 3.8 | % | 1,012 | 961 | 5.3 | % | |||||||||||||||||||
Same-Store Total | 12,347 | 93.1 | % | 93.0 | % | 0.1 | % | $ | 1,009 | $ | 997 | 1.2 | % | $ | 1,079 | $ | 1,042 | 3.6 | % | |||||||||||||||
(1) | Weighted average occupancy is defined as scheduled rent less vacancy losses divided by scheduled rent for the period. |
(2) | Average scheduled rent per apartment home is scheduled rent divided by the total number of apartment homes. See definition of scheduled rent in the Definitions section. |
(3) | Average revenue is defined as total rental revenues divided by the weighted average occupied apartment units for the period. |
S-11 | ||
IRET
SAME-STORE SEQUENTIAL QUARTER COMPARISONS
(in thousands, except property data amounts)
Apartment Homes Included | Revenues | Expenses | NOI | |||||||||||||||||||||||||||||||||
Regions | FY19Q2 | FY19Q1 | % Change | FY19Q2 | FY19Q1 | % Change | FY19Q2 | FY19Q1 | % Change | |||||||||||||||||||||||||||
Rochester, MN | 1,711 | $ | 6,187 | $ | 6,014 | 2.9 | % | $ | 2,463 | $ | 2,492 | (1.2 | )% | $ | 3,724 | $ | 3,522 | 5.7 | % | |||||||||||||||||
Minneapolis, MN | 1,296 | 5,549 | 5,430 | 2.2 | % | 2,013 | 2,172 | (7.3 | )% | 3,536 | 3,258 | 8.5 | % | |||||||||||||||||||||||
Grand Forks, ND | 1,554 | 4,147 | 4,192 | (1.1 | )% | 1,963 | 1,909 | 2.8 | % | 2,184 | 2,283 | (4.3 | )% | |||||||||||||||||||||||
Omaha, NE | 1,370 | 3,736 | 3,699 | 1.0 | % | 1,663 | 1,669 | (0.4 | )% | 2,073 | 2,030 | 2.1 | % | |||||||||||||||||||||||
Bismarck, ND | 1,259 | 3,563 | 3,587 | (0.7 | )% | 1,516 | 1,606 | (5.6 | )% | 2,047 | 1,981 | 3.3 | % | |||||||||||||||||||||||
St. Cloud, MN | 1,190 | 3,444 | 3,365 | 2.3 | % | 1,588 | 1,602 | (0.9 | )% | 1,856 | 1,763 | 5.3 | % | |||||||||||||||||||||||
Topeka, KS | 1,042 | 2,496 | 2,492 | 0.2 | % | 1,223 | 1,098 | 11.4 | % | 1,273 | 1,394 | (8.7 | )% | |||||||||||||||||||||||
Billings, MT | 770 | 2,111 | 2,081 | 1.4 | % | 892 | 876 | 1.8 | % | 1,219 | 1,205 | 1.2 | % | |||||||||||||||||||||||
Sioux Falls, SD | 969 | 2,526 | 2,462 | 2.6 | % | 1,181 | 1,194 | (1.1 | )% | 1,345 | 1,268 | 6.1 | % | |||||||||||||||||||||||
Minot, ND | 712 | 2,089 | 2,075 | 0.7 | % | 968 | 949 | 2.0 | % | 1,121 | 1,126 | (0.4 | )% | |||||||||||||||||||||||
Rapid City, SD | 474 | 1,360 | 1,340 | 1.5 | % | 609 | 526 | 15.8 | % | 751 | 814 | (7.7 | )% | |||||||||||||||||||||||
Same-Store Total | 12,347 | $ | 37,208 | $ | 36,737 | 1.3 | % | $ | 16,079 | $ | 16,093 | (0.1 | )% | $ | 21,129 | $ | 20,644 | 2.3 | % | |||||||||||||||||
Apartment Homes Included | Weighted Average Occupancy (1) | Weighted Average Monthly Rental Rate (2) | Weighted Average Monthly Revenue per Occupied Home (3) | |||||||||||||||||||||||||||||||
Regions | FY19Q2 | FY19Q1 | % Change | FY19Q2 | FY19Q1 | % Change | FY19Q2 | FY19Q1 | % Change | |||||||||||||||||||||||||
Rochester, MN | 1,711 | 92.7 | % | 92.9 | % | (0.2 | )% | $ | 1,221 | $ | 1,223 | (0.2 | )% | $ | 1,300 | $ | 1,261 | 3.1 | % | |||||||||||||||
Minneapolis, MN | 1,296 | 92.9 | % | 92.8 | % | 0.1 | % | 1,424 | 1,405 | 1.4 | % | 1,537 | 1,505 | 2.1 | % | |||||||||||||||||||
Grand Forks, ND | 1,554 | 91.2 | % | 92.6 | % | (1.5 | )% | 919 | 923 | (0.4 | )% | 975 | 971 | 0.4 | % | |||||||||||||||||||
Omaha, NE | 1,370 | 93.8 | % | 94.7 | % | (1.0 | )% | 879 | 874 | 0.6 | % | 969 | 951 | 1.9 | % | |||||||||||||||||||
Bismarck, ND | 1,259 | 94.4 | % | 93.9 | % | 0.5 | % | 957 | 957 | 0.0 | % | 1,000 | 1,011 | (1.1 | )% | |||||||||||||||||||
St. Cloud, MN | 1,190 | 93.3 | % | 93.9 | % | (0.6 | )% | 950 | 931 | 2.0 | % | 1,034 | 1,003 | 3.1 | % | |||||||||||||||||||
Topeka, KS | 1,042 | 93.8 | % | 94.9 | % | (1.2 | )% | 816 | 807 | 1.1 | % | 851 | 841 | 1.2 | % | |||||||||||||||||||
Billings, MT | 770 | 93.4 | % | 92.4 | % | 1.1 | % | 915 | 914 | 0.1 | % | 978 | 975 | 0.3 | % | |||||||||||||||||||
Sioux Falls, SD | 969 | 93.2 | % | 93.0 | % | 0.2 | % | 854 | 838 | 1.9 | % | 932 | 911 | 2.3 | % | |||||||||||||||||||
Minot, ND | 712 | 92.9 | % | 94.4 | % | (1.6 | )% | 1,013 | 1,002 | 1.1 | % | 1,053 | 1,029 | 2.3 | % | |||||||||||||||||||
Rapid City, SD | 474 | 94.5 | % | 94.7 | % | (0.2 | )% | 938 | 925 | 1.4 | % | 1,012 | 995 | 1.7 | % | |||||||||||||||||||
Same-Store Total | 12,347 | 93.1 | % | 93.5 | % | (0.4 | )% | $ | 1,009 | $ | 1,002 | 0.7 | % | $ | 1,079 | $ | 1,061 | 1.7 | % | |||||||||||||||
(1) | Weighted average occupancy is defined as scheduled rent less vacancy losses divided by scheduled rent for the period. |
(2) | Average scheduled rent per apartment home is scheduled rent divided by the total number of apartment homes. See definition of scheduled rent in the Definitions section. |
(3) | Average revenue is defined as total rental revenues divided by the weighted average occupied apartment units for the period. |
S-12 | ||
IRET
SAME-STORE YEAR-TO-DATE COMPARISONS
(in thousands, except property data amounts)
Apartment Homes Included | Revenues | Expenses | NOI | |||||||||||||||||||||||||||||||||
Regions | FY19 | FY18 | % Change | FY19 | FY18 | % Change | FY19 | FY18 | % Change | |||||||||||||||||||||||||||
Rochester, MN | 1,711 | $ | 12,202 | $ | 11,905 | 2.5 | % | $ | 4,956 | $ | 4,951 | 0.1 | % | $ | 7,246 | $ | 6,954 | 4.2 | % | |||||||||||||||||
Minneapolis, MN | 1,296 | 10,980 | 10,487 | 4.7 | % | 4,185 | 3,939 | 6.2 | % | 6,795 | 6,548 | 3.8 | % | |||||||||||||||||||||||
Grand Forks, ND | 1,554 | 8,339 | 8,365 | (0.3 | )% | 3,872 | 3,776 | 2.5 | % | 4,467 | 4,589 | (2.7 | )% | |||||||||||||||||||||||
Omaha, NE | 1,370 | 7,435 | 7,097 | 4.8 | % | 3,332 | 3,331 | 0.0 | % | 4,103 | 3,766 | 8.9 | % | |||||||||||||||||||||||
Bismarck, ND | 1,259 | 7,150 | 7,103 | 0.7 | % | 3,121 | 3,196 | (2.3 | )% | 4,029 | 3,907 | 3.1 | % | |||||||||||||||||||||||
St. Cloud, MN | 1,190 | 6,809 | 6,429 | 5.9 | % | 3,189 | 3,340 | (4.5 | )% | 3,620 | 3,089 | 17.2 | % | |||||||||||||||||||||||
Topeka, KS | 1,042 | 4,988 | 4,833 | 3.2 | % | 2,321 | 2,100 | 10.5 | % | 2,667 | 2,733 | (2.4 | )% | |||||||||||||||||||||||
Billings, MT | 770 | 4,192 | 4,024 | 4.2 | % | 1,768 | 1,799 | (1.7 | )% | 2,424 | 2,225 | 8.9 | % | |||||||||||||||||||||||
Sioux Falls, SD | 969 | 4,988 | 4,690 | 6.4 | % | 2,375 | 2,415 | (1.7 | )% | 2,613 | 2,275 | 14.9 | % | |||||||||||||||||||||||
Minot, ND | 712 | 4,163 | 4,125 | 0.9 | % | 1,917 | 2,089 | (8.2 | )% | 2,246 | 2,036 | 10.3 | % | |||||||||||||||||||||||
Rapid City, SD | 474 | 2,700 | 2,520 | 7.1 | % | 1,136 | 1,115 | 1.9 | % | 1,564 | 1,405 | 11.3 | % | |||||||||||||||||||||||
Same-Store Total | 12,347 | $ | 73,946 | $ | 71,578 | 3.3 | % | $ | 32,172 | $ | 32,051 | 0.4 | % | $ | 41,774 | $ | 39,527 | 5.7 | % | |||||||||||||||||
Apartment Homes Included | Weighted Average Occupancy (1) | Weighted Average Monthly Rental Rate (2) | Weighted Average Monthly Revenue per Occupied Home (3) | |||||||||||||||||||||||||||||||
Regions | FY19 | FY18 | % Change | FY19 | FY18 | % Change | FY19 | FY18 | % Change | |||||||||||||||||||||||||
Rochester, MN | 1,711 | 92.8 | % | 91.2 | % | 1.8 | % | $ | 1,222 | $ | 1,245 | (1.8 | )% | $ | 1,281 | $ | 1,272 | 0.7 | % | |||||||||||||||
Minneapolis, MN | 1,296 | 92.8 | % | 93.5 | % | (0.7 | )% | 1,415 | 1,362 | 3.9 | % | 1,521 | 1,443 | 5.4 | % | |||||||||||||||||||
Grand Forks, ND | 1,554 | 91.9 | % | 94.3 | % | (2.5 | )% | 921 | 911 | 1.1 | % | 973 | 951 | 2.3 | % | |||||||||||||||||||
Omaha, NE | 1,370 | 94.3 | % | 94.6 | % | (0.3 | )% | 877 | 848 | 3.4 | % | 960 | 913 | 5.1 | % | |||||||||||||||||||
Bismarck, ND | 1,259 | 94.1 | % | 92.2 | % | 2.1 | % | 957 | 983 | (2.6 | )% | 1,005 | 1,019 | (1.4 | )% | |||||||||||||||||||
St. Cloud, MN | 1,190 | 93.6 | % | 93.1 | % | 0.5 | % | 941 | 900 | 4.6 | % | 1,019 | 967 | 5.4 | % | |||||||||||||||||||
Topeka, KS | 1,042 | 94.3 | % | 94.9 | % | (0.6 | )% | 811 | 792 | 2.4 | % | 846 | 815 | 3.8 | % | |||||||||||||||||||
Billings, MT | 770 | 92.9 | % | 88.4 | % | 5.1 | % | 915 | 918 | (0.3 | )% | 976 | 985 | (0.9 | )% | |||||||||||||||||||
Sioux Falls, SD | 969 | 93.1 | % | 93.7 | % | (0.6 | )% | 846 | 805 | 5.1 | % | 922 | 861 | 7.1 | % | |||||||||||||||||||
Minot, ND | 712 | 93.6 | % | 94.2 | % | (0.6 | )% | 1,008 | 1,022 | (1.4 | )% | 1,041 | 1,025 | 1.6 | % | |||||||||||||||||||
Rapid City, SD | 474 | 94.6 | % | 93.3 | % | 1.4 | % | 932 | 898 | 3.8 | % | 1,004 | 950 | 5.7 | % | |||||||||||||||||||
Same-Store Total | 12,347 | 93.3 | % | 93.0 | % | 0.3 | % | $ | 1,005 | $ | 992 | 1.3 | % | $ | 1,070 | $ | 1,039 | 3.0 | % | |||||||||||||||
S-13 | ||
IRET
PORTFOLIO SUMMARY(1)
Three Months Ended | ||||||||||||||||||||
10/31/2018 | 7/31/2018 | 4/30/2018 | 1/31/2018 | 10/31/2017 | ||||||||||||||||
Number of Apartment Homes | ||||||||||||||||||||
Same-Store | 12,347 | 12,348 | 11,320 | 11,320 | 11,384 | |||||||||||||||
Non-Same-Store | 1,355 | 1,355 | 2,856 | 2,466 | 2,192 | |||||||||||||||
All Communities | 13,702 | 13,703 | 14,176 | 13,786 | 13,576 | |||||||||||||||
Average Scheduled Rent(2) per Apartment Home | ||||||||||||||||||||
Same-Store | $ | 1,009 | $ | 1,002 | $ | 942 | $ | 957 | $ | 962 | ||||||||||
Non-Same-Store | 1,661 | 1,655 | 1,358 | 1,355 | 1,330 | |||||||||||||||
All Communities | $ | 1,073 | $ | 1,066 | $ | 1,023 | $ | 1,028 | $ | 1,018 | ||||||||||
Average Revenue per Occupied Apartment Home(3) | ||||||||||||||||||||
Same-Store | $ | 1,079 | $ | 1,061 | $ | 992 | $ | 1,007 | $ | 1,016 | ||||||||||
Non-Same-Store | 1,797 | 1,774 | 1,349 | 1,407 | 1,276 | |||||||||||||||
All Communities | $ | 1,150 | $ | 1,131 | $ | 1,064 | $ | 1,079 | $ | 1,058 | ||||||||||
Occupancy | ||||||||||||||||||||
Same-Store | 95.4 | % | 94.0 | % | 96.5 | % | 95.3 | % | 95.2 | % | ||||||||||
Non-Same-Store | 92.7 | % | 90.3 | % | 92.1 | % | 90.1 | % | 92.4 | % | ||||||||||
All Communities | 95.1 | % | 93.6 | % | 95.6 | % | 94.3 | % | 94.8 | % | ||||||||||
Operating Expenses as a % of Scheduled Rent | ||||||||||||||||||||
Same-Store | 46.6 | % | 47.0 | % | 46.6 | % | 47.8 | % | 50.9 | % | ||||||||||
Non-Same-Store | 42.1 | % | 37.8 | % | 40.1 | % | 39.1 | % | 42.6 | % | ||||||||||
All Communities | 45.9 | % | 45.6 | % | 44.9 | % | 45.7 | % | 49.2 | % | ||||||||||
Capital Expenditures | ||||||||||||||||||||
Total Capital Expenditures per Unit – Same-Store | $ | 240 | $ | 281 | $ | 153 | $ | 240 | $ | 396 | ||||||||||
(1) | Previously reported amounts are not revised for discontinued operations or 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. |
S-14 | ||
IRET
SAME-STORE CAPITAL EXPENDITURES
($ in thousands, except per home amounts)
Three Months Ended | ||||||||
10/31/2018 | 10/31/2017 | |||||||
Total Same-Store Apartment Homes | 12,347 | 12,344 | ||||||
Turnover | $ | 1,261 | $ | 1,715 | ||||
Furniture & Equipment | 64 | 164 | ||||||
Building – Interior | 196 | 300 | ||||||
Building – Exterior | 672 | 1,209 | ||||||
Landscaping & Grounds | 765 | 1,165 | ||||||
Capital Expenditures | $ | 2,958 | $ | 4,553 | ||||
Capital Expenditures per Apartment Home | 240 | 369 | ||||||
Six Months Ended | ||||||||
10/31/2018 | 10/31/2017 | |||||||
Total Same-Store Apartment Homes | 12,347 | 12,344 | ||||||
Turnover | $ | 2,503 | $ | 3,125 | ||||
Furniture & Equipment | 185 | 199 | ||||||
Building - Interior | 321 | 588 | ||||||
Building - Exterior | 2,081 | 1,991 | ||||||
Landscaping & Grounds | 1,343 | 1,504 | ||||||
Capital Expenditures | $ | 6,433 | $ | 7,407 | ||||
CapEx per Apartment Home | $ | 521 | $ | 600 | ||||
S-15 | ||
Definitions
October 31, 2018
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. Adjusted EBITDA as calculated by us is not 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 non-GAAP and non-standardized measure and may be calculated differently by other REITs.
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 shares outstanding at the end of the period.
Debt service coverage ratio is computed by dividing Adjusted EBITDA by interest expense and principal amortization.
Funds from operations (FFO) is defined by the National Association of Real Estate Investment Trusts, Inc. (NAREIT) as net income (computed 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. We 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. 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 previously depreciated operating 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.
Net Operating Income (NOI) is a non-U.S. 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 and general and administrative expense. NOI does not represent cash generated by operating activities in accordance with U.S. 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.
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.
Ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For this purpose, earnings consist of income from continuing operations plus fixed charges and preferred distributions, less adjustments for noncontrolling interests - consolidated real estate entities, capitalized interest and preferred distributions. Fixed charges consist of mortgage and loan interest expense, whether expensed or capitalized, the amortization of debt expense, and capitalized interest.
S-16 | ||
Ratio of earnings to combined fixed charges and preferred distributions is computed by dividing earnings by combined fixed charges and preferred distributions. For this purpose, earnings consist of income from continuing operations plus fixed charges and preferred distributions, less adjustments for noncontrolling interests – consolidated real estate entities, capitalized interest and preferred distributions. Combined fixed charges and preferred distributions consist of fixed charges (mortgage and loan interest expense, whether expensed or capitalized, the amortization of debt expense and capitalized interest) and preferred distributions.
Scheduled rent revenue is the total possible revenue from all leasable units and square footage, with occupied space valued at contract rates pursuant to leases and vacant units or square footage at market rates.
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%.
U.S. GAAP is defined as accounting principles generally accepted in the United States of America.
S-17 | ||