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IRET Reports Third Quarter 2019 Financial Results and Updates 2019 Guidance

MINOT, N.D., Nov. 6, 2019 /PRNewswire/ -- IRET (IRET) announced today its third quarter 2019 financial and operating results.  The tables below show Net Income (Loss), Funds from Operations ("FFO") and Core FFO per share for the three and nine months ended September 30, 2019; same-store revenues, expenses, and net operating income ("NOI") over comparable periods; and same-store weighted-average occupancy for the three months ended September 30, 2019, June 30, 2019, and September 30, 2018.



Three Months Ended September 30,


Nine Months Ended September 30,

Per Share


2019


2018


2019


2018

Net Income (Loss) - diluted


$

2.54



$

0.08



$

2.11



$

(1.34)


FFO - diluted


$

0.93



$

0.82



$

3.15



$

2.38


Core FFO - diluted


$

0.99



$

0.86



$

2.76



$

2.49


 



Year-Over-Year

Comparison


Sequential

Comparison


YTD
Comparison

Same-Store Results


3Q19 vs. 3Q18


3Q19 vs. 2Q19


CY19 vs. CY18

Revenues


4.0

%


0.6

%


3.7

%

Expenses


2.2

%


2.5

%


2.8

%

NOI


5.3

%


(0.8)

%


4.4

%

 



Three months ended

Same-Store Results


September 30, 2019


June 30, 2019


September 30, 2018

Weighted Average Occupancy


93.3

%


94.3

%


91.9

%

Third Quarter 2019 Highlights

  • We reported Net Income of $2.54 per diluted share for the third quarter of 2019, compared to Net Income of $0.08 per share for the same quarter in 2018;
  • Core FFO grew by 15.1%, increasing to $0.99 per diluted share for the third quarter of 2019, compared to $0.86 per share for the same quarter in 2018;
  • Same-store revenue increased year-over-year by 4.0% driven by 2.6% growth in rental revenue and 1.4% growth in occupancy, while same-store operating expenses grew 2.2% year-over-year, primarily due to real estate taxes. The combination of 4.0% revenue growth and expense control initiatives that reduced same-store controllable expenses by 2.1% over the same period in 2018, led to same-store NOI growth of 5.3%, our eighth consecutive quarter of year-over-year NOI growth;
  • We entered into a $59.9 million mortgage loan and a $150.0 million private shelf agreement. Of the $150.0 million available under the private shelf agreement, we funded $75.0 million of Series A unsecured senior notes and $50.0 million of Series B unsecured senior notes;
  • We updated earnings guidance with respect to projected same-store growth for calendar year 2019 as follows:
  • We repurchased approximately 39,000 common shares for an aggregate total cost of $2.3 million, representing an average price of $59.57 per common share.

Acquisitions and Dispositions

During the third quarter, we acquired FreightYard Townhomes and Flats, a 96-home apartment community in Minneapolis, Minnesota, and Lugano at Cherry Creek, a 328-home apartment community in Denver, Colorado, for an aggregate purchase price of $125.3 million.  During the third quarter, we sold one apartment community in Billings, Montana and our entire portfolio in Topeka, Kansas for an aggregate sale price of $84.4 million. We also sold one parcel of unimproved land for $600,000.

Balance Sheet

At the end of the third quarter, we had $155.4 million of total liquidity on our balance sheet, including $146.9 million available under our corporate revolver.

2019 Financial Overview

We are raising our earnings guidance for calendar year 2019 based on actual results through September 30, 2019 and expected results through the remainder of the calendar year as specified below.


2019 Revised


2019 Guidance


Range


Current Midpoint


Prior Midpoint


Change

Net income (loss) per share - diluted

$2.72 to $2.82


$2.77


$(1.22)


$3.99

Core FFO per share and Unit- diluted

$3.68 to $3.78


$3.73


$3.67


$0.06









Same-Store Growth








Revenue

3.25% to 3.75%


3.50%


3.50%


Expenses

3.00% to 3.50%


3.25%


3.25%


NOI

3.50% to 4.00%


3.75%


3.50%


0.25%

Recent Developments

On October 29, 2019, we sold five apartment communities containing 414 apartment homes in Bismarck, North Dakota for a sale price of $24.0 million.  These properties included Crestview, Kirkwood Manor, North Pointe, Pebble Springs, and Westwood Park. The sale of these properties enabled us to retire $11.3 million of mortgage debt.

On November 1, 2019, we sold a commercial property in Woodbury, Minnesota for a sale price of $5.8 million.

Upcoming Events

IRET is scheduled to participate in the upcoming National Association of Real Estate Investment Trusts ("Nareit") REITworld: 2019 Annual Conference in Los Angeles, California, from November 12-14, 2019.

Quarterly Distributions

Effective September 5, 2019, IRET's Board of Trustees declared a regular quarterly distribution of $0.70 per share/unit payable on September 30, 2019, to common shareholders and unitholders of record on September 16, 2019.  IRET has paid cash dividends to common shareholders and unitholders every quarter since its initial dividend payment in 1971.

Effective September 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 September 30, 2019, to holders of record on September 16, 2019.  Series C preferred share distributions are cumulative and payable quarterly in arrears at an annual rate of $1.65625 per share.

Earnings Call

Live webcast and replay:  http://ir.iretapartments.com




Live Conference Call


Conference Call Replay

Thursday, November 7, 2019, at 10:00 AM ET


Replay available until November 21, 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

10135927

Supplemental Information

Supplemental Operating and Financial Data for the quarter ended September 30, 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.  FFO, Core FFO, NOI, and Adjusted EBITDA are non-GAAP financial measures.  These 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 September 30, 2019, we owned interests in 84 apartment communities consisting of 13,336 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.  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 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.

Investor Relations Contact Information
Jonathan Bishop
|Vice President - Finance
Phone: 701-837-7104
E-mail: IR@iret.com

Common Share Data (NYSE: IRET)








3rd Quarter


2nd Quarter


1st Quarter


4th Quarter


3rd Quarter



Calendar Year 
2019


Calendar Year 
2019


Calendar Year 
2019


Calendar Year 
2018


Calendar Year 
2018

High closing price


$

74.67



$

61.28



$

61.50



$

59.10



$

59.80


Low closing price


$

59.22



$

57.19



$

49.92



$

47.00



$

53.30


Average closing price


$

66.83



$

59.54



$

58.11



$

53.40



$

54.99


Closing price at end of quarter


$

74.67



$

58.67



$

59.91



$

49.07



$

59.80


Common share distributions – annualized


$

2.80



$

2.80



$

2.80



$

2.80



$

2.80


Closing dividend yield – annualized


3.8

%


4.8

%


4.7

%


5.7

%


4.7

%

Closing common shares outstanding (thousands)


11,625



11,656



11,768



11,942



11,961


Closing limited partnership units outstanding (thousands)


1,223



1,224



1,365



1,368



1,379


Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands)


$

959,360



$

755,670



$

786,798



$

653,122



$

797,732


 

IRET

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands)




Three Months Ended



Nine months ended



9/30/2019


6/30/2019


3/31/2019


12/31/2018


9/30/2018



9/30/2019


9/30/2018

REVENUE


$

47,436



$

46,934



$

45,608



$

45,730



$

45,406




$

139,978



$

134,638


EXPENSES
















Property operating expenses, excluding real estate taxes


14,485



13,942



14,804



13,292



14,438




43,231



42,618


Real estate taxes


5,425



5,574



5,232



5,098



5,049




16,231



15,073


Property management expense


1,553



1,445



1,554



1,447



1,269




4,552



4,090


Casualty loss


178



92



641



540



225




911



275


Depreciation/amortization


18,751



18,437



18,111



18,812



19,164




55,299



58,812


Impairment of real estate investments








1,221








17,809


General and administrative expenses


3,448



3,549



3,806



3,769



3,147




10,803



11,114


TOTAL EXPENSES


$

43,840



$

43,039



$

44,148



$

44,179



$

43,292




$

131,027



$

149,791


Operating income (loss)


3,596



3,895



1,460



1,551



2,114




8,951



(15,153)


Interest expense


(7,694)



(7,590)



(7,896)



(7,682)



(8,193)




(23,180)



(25,051)


Loss on extinguishment of debt


(1,087)



(407)



(2)



(5)



(540)




(1,496)



(673)


Interest and other income


498



468



424



483



395




1,390



1,544


Income (loss) before gain (loss) on sale of real estate and other investments, gain (loss) on litigation settlement, and income (loss) from discontinued operations


(4,687)



(3,634)



(6,014)



(5,653)



(6,224)




(14,335)



(39,333)


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


39,105



615



54



612



9,095




39,774



11,399


Gain (loss) on litigation settlement


300



6,286










6,586




Income (loss) from continuing operations


34,718



3,267



(5,960)



(5,041)



2,871




32,025



(27,934)


Income (loss) from discontinued operations










570






14,690


Net income (loss)


$

34,718



$

3,267



$

(5,960)



$

(5,041)



$

3,441




$

32,025



$

(13,244)


Dividends to preferred unitholders


(160)



(160)



(57)








(377)




Net (income) loss attributable to noncontrolling interest – Operating Partnership


(3,145)



(148)



743



665



(112)




(2,550)



1,888


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


183



154



576



270



(676)




913



439


Net income (loss) attributable to controlling interests


31,596



3,113



(4,698)



(4,106)



2,653




30,011



(10,917)


Dividends to preferred shareholders


(1,705)



(1,706)



(1,705)



(1,705)



(1,705)




(5,116)



(5,116)


NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS


$

29,891



$

1,407



$

(6,403)



$

(5,811)



$

948




$

24,895



$

(16,033)


















Per Share Data - Basic
















Earnings (loss) per common share from continuing operations – basic


$

2.57



$

0.11



$

(0.54)



$

(0.49)



$

0.04




$

2.11



$

(2.44)


Earnings (loss) per common share from discontinued operations – basic










0.04






1.10


Net earnings (loss) per common share – basic


$

2.57



$

0.11



$

(0.54)



$

(0.49)



$

0.08




$

2.11



$

(1.34)


Per Share Data - Diluted
















Earnings (loss) per common share from continuing operations – diluted


$

2.54



$

0.11



$

(0.54)



$

(0.49)



$

0.04




$

2.11



$

(2.44)


Earnings per common share from discontinued operations – diluted










$

0.04






$

1.10


Net earnings (loss) per common share – diluted


$

2.54



$

0.11



$

(0.54)



$

(0.49)



$

0.08




$

2.11



$

(1.34)


















Percentage of Revenue
















Property operating expenses, excluding real estate taxes


30.5

%


29.7

%


32.5

%


29.1

%


31.8

%



30.9

%


31.7

%

General and administrative expenses


7.3

%


7.6

%


8.3

%


8.2

%


6.9

%



7.7

%


8.3

%

Interest


16.2

%


16.2

%


17.3

%


16.8

%


18.0

%



16.6

%


18.6

%

Income (loss) from discontinued operations










1.3

%





10.9

%

Net income (loss)


73.2

%


7.0

%


(13.1)

%


(11.0)

%


7.6

%



22.9

%


(9.8)

%


 

IRET

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands)




9/30/2019


6/30/2019


3/31/2019


12/31/2018


9/30/2018

ASSETS











Real estate investments











Property owned


$

1,720,352



$

1,663,539



$

1,673,158



$

1,627,636



$

1,638,909


Less accumulated depreciation


(370,492)



(380,321)



(371,672)



(353,871)



(339,515)




1,349,860



1,283,218



1,301,486



1,273,765



1,299,394


Unimproved land


1,376



1,746



2,252



5,301



6,522


Mortgage loans receivable


10,140



10,140



10,260



10,410



10,530


Total real estate investments


1,361,376



1,295,104



1,313,998



1,289,476



1,316,446


Cash and cash equivalents


8,500



17,406



23,329



13,792



36,910


Restricted cash


3,339



4,672



4,819



5,464



4,669


Other assets


30,589



30,626



29,166



27,265



28,472


TOTAL ASSETS


$

1,403,804



$

1,347,808



$

1,371,312



$

1,335,997



$

1,386,497













LIABILITIES, MEZZANINE EQUITY, AND EQUITY











LIABILITIES











Accounts payable and accrued expenses


$

40,546



$

44,766



$

40,697



$

40,892



$

38,203


Revolving line of credit


103,143



177,939



118,677



57,500



71,000


Notes payable, net of loan costs


269,006



144,082



144,036



143,991



143,937


Mortgages payable, net of loan costs


360,886



370,461



430,950



444,197



463,052


TOTAL LIABILITIES


$

773,581



$

737,248



$

734,360



$

686,580



$

716,192













REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES








$

5,968



$

6,130


SERIES D PREFERRED UNITS


$

16,560



$

16,560



$

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


886,598



888,541



895,381



899,234



900,368


Accumulated distributions in excess of net income


(428,680)



(450,433)



(443,661)



(429,048)



(414,900)


Accumulated other comprehensive income (loss)


(9,793)



(7,598)



(3,139)



(856)



2,760


Total shareholders' equity


$

547,581



$

529,966



$

548,037



$

568,786



$

587,684


Noncontrolling interests – Operating Partnership


60,169



57,902



66,060



67,916



69,578


Noncontrolling interests – consolidated real estate entities


5,913



6,132



6,295



6,747



6,913


Total equity


$

613,663



$

594,000



$

620,392



$

643,449



$

664,175


TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY


$

1,403,804



$

1,347,808



$

1,371,312



$

1,335,997



$

1,386,497



IRET
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (unaudited)

This release contains certain non-GAAP financial measures. The non-GAAP measures should not be considered a substitute for operating results determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The definitions and calculations of these non-GAAP measures, as calculated by us, may not be comparable to non-GAAP measures reported by other REITs that do not define each of the non-GAAP measures exactly as we do.

We provide certain information on a same-store and non-same-store basis.  Same-store apartment communities are owned or in service for the entirety of the periods being compared, and, in the case of development properties, have achieved a target level of physical occupancy of 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. We believe that measuring performance on a same-store basis is useful to investors because it enables evaluation of how a fixed pool of our communities are performing year-over-year. We use this measure to assess whether or not we have been successful in increasing NOI, renewing the leases on existing residents, controlling operating costs, and making prudent capital improvements.

Reconciliation of Operating Income (Loss) to Net Operating Income

Net operating income, or NOI, is a non-GAAP measure which we define as total real estate revenues less property operating expenses, including real estate taxes. We believe that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by depreciation, amortization, financing, property management overhead, casualty losses, and general and administrative expenses. 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.


(in thousands, except percentages)


Three Months Ended September 30,



Nine Months Ended September 30,


2019


2018


$ Change


% Change



2019


2018


$ Change


% Change


















Operating income (loss)

$

3,596



$

2,114



$

1,482



70.1

%



$

8,951



$

(15,153)



$

24,104



(159.1)

%

Adjustments:

















Property management expenses

1,553



1,269



284



22.4

%



4,552



4,090



462



11.3

%

Casualty loss

178



225



(47)



(20.9)

%



911



275



636



231.3

%

Depreciation and amortization

18,751



19,164



(413)



(2.2)

%



55,299



58,812



(3,513)



(6.0)

%

Impairment












17,809



(17,809)



(100.0)

%

General and administrative expenses

3,448



3,147



301



9.6

%



10,803



11,114



(311)



(2.8)

%

Net operating income

$

27,526



$

25,919



$

1,607



6.2

%



$

80,516



$

76,947



$

3,569



4.6

%


















Revenue

















Same-store

$

37,633



$

36,198



$

1,435



4.0

%



$

112,052



$

108,031



$

4,021



3.7

%

Non-same-store

6,283



4,687



1,596



34.1

%



17,405



11,038



6,367



57.7

%

Other properties and dispositions

3,520



4,521



(1,001)



(22.1)

%



10,521



15,569



(5,048)



(32.4)

%

Total

47,436



45,406



2,030



4.5

%



139,978



134,638



5,340



4.0

%


















Property operating expenses, including real estate taxes

















Same-store

16,147



15,795



352



2.2

%



48,561



47,227



1,334



2.8

%

Non-same-store

2,308



1,696



612



36.1

%



6,327



4,115



2,212



53.8

%

Other properties and dispositions

1,455



1,996



(541)



(27.1)

%



4,574



6,349



(1,775)



(28.0)

%

Total

19,910



19,487



423



2.2

%



59,462



57,691



1,771



3.1

%


















Net operating income

















Same-store

21,486



20,403



1,083



5.3

%



63,491



60,804



2,687



4.4

%

Non-same-store

3,975



2,991



984



32.9

%



11,078



6,923



4,155



60.0

%

Other properties and dispositions

2,065



2,525



(460)



(18.2)

%



5,947



9,220



(3,273)



(35.5)

%

Total

$

27,526



$

25,919



$

1,607



6.2

%



$

80,516



$

76,947



$

3,569



4.6

%

Same-Store Property Operating Expense Comparison


(in thousands, except percentages)


Three Months Ended September 30,



Nine Months Ended September 30,


2019


2018


$ Change


% Change



2019


2018


$ Change


% Change


















Controllable expenses

















Compensation

$

4,368



$

4,362



$

6



0.1

%



$

12,889



$

13,520



$

(631)



(4.7)

%

Repairs and maintenance

3,078



3,277



(199)



(6.1)

%



9,296



8,987



309



3.4

%

Utilities

2,608



2,614



(6)



(0.2)

%



8,388



8,304



84



1.0

%

Administrative and marketing

778



810



(32)



(4.0)

%



2,530



2,401



129



5.4

%

Total

$

10,832



$

11,063



$

(231)



(2.1)

%



$

33,103



$

33,212



$

(109)



(0.3)

%


















Non-controllable expenses

















Real estate taxes

$

4,173



$

3,973



$

200



5.0

%



$

12,506



$

12,032



$

474



3.9

%

Insurance

1,142



759



383



50.5

%



2,952



1,983



969



48.9

%

Total

$

5,315



$

4,732



$

583



12.3

%



$

15,458



$

14,015



$

1,443



10.3

%


















Total

$

16,147



$

15,795



$

352



2.2

%



$

48,561



$

47,227



$

1,334



2.8

%


Reconciliation of Net Income (Loss) Available to Common Shareholders to Funds From Operations and Core Funds From Operations

We use the definition of FFO adopted by the National Association of Real Estate Investment Trusts, Inc. ("Nareit"). Nareit defines FFO as net income or loss calculated in accordance with GAAP, excluding:

  • depreciation and amortization related to real estate;
  • gains and losses from the sale of certain real estate assets; 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.

Due to the limitations of the Nareit FFO definition, we have made certain interpretations in applying this definition. We believe that all such interpretations not specifically identified in the Nareit definition are consistent with this definition. 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 its main business.

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 is not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies. 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.

While FFO is widely used by us as a primary performance metric, not all real estate companies use the same definition of FFO or calculate FFO in the same way. Accordingly, FFO presented here is not necessarily comparable to FFO presented by other real estate companies. FFO should not be considered as an alternative 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.

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 that 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 that may be calculated differently by other REITs and should not be considered a substitute for operating results determined in accordance with GAAP.



(in thousands, except per share amounts)



Three Months Ended



Nine Months Ended



9/30/2019


6/30/2019


3/31/2019


12/31/2018


9/30/2018



9/30/2019


9/30/2018

Funds From Operations
















Net income (loss) available to common shareholders


$

29,891



$

1,407



$

(6,403)



$

(5,811)



$

948




$

24,895



$

(16,033)


Adjustments:
















Noncontrolling interests – Operating Partnership


3,145



148



(743)



(665)



112




2,550



(1,888)


Depreciation and amortization


18,751



18,437



18,111



18,812



19,164




55,299



58,814


Less depreciation – non real estate


(71)



(79)



(85)



(76)



(76)




(235)



(231)


Less depreciation – partially owned entities


(452)



(474)



(678)



(680)



(673)




(1,604)



(2,115)


Impairment of real estate






1,221







17,809


(Gain) loss on sale of real estate


(39,105)



(615)



(54)



(612)



(8,499)




(39,774)



(24,633)


FFO applicable to common shares and Units


$

12,159



$

18,824



$

10,148



$

12,189



$

10,976




$

41,131



$

31,723


















Adjustments to Core FFO:
















Casualty loss write off






43








Loss on extinguishment of debt


1,087



407



2



5



540




1,496



673


Gain on litigation settlement


(300)



(6,286)







(6,586)




Severance and transition costs











811


Core FFO applicable to common shares and Units


$

12,946



$

12,945



$

10,150



$

12,237



$

11,516




$

36,041



$

33,207


















Funds from operations applicable to common shares and Units


$

12,159



$

18,824



$

10,148



$

12,189



$

10,976




$

41,131



$

31,723


Dividends to preferred unitholders


160



160



57








377




Funds from operations applicable to common shares and Units - diluted


$

12,319



$

18,984



$

10,205



$

12,189



$

10,976




$

41,508



$

31,723


















Core funds from operations applicable to common shares and Units


$

12,946



$

12,945



$

10,150



$

12,237



$

11,516




$

36,041



$

33,207


Dividends to preferred unitholders


160



160



57






377



Core funds from operations applicable to common shares and Units - diluted


$

13,106



$

13,105



$

10,207



$

12,237



$

11,516




$

36,418



$

33,207


















Per Share Data
















Earnings (loss) per share and Unit - diluted


$

2.54



$

0.12



$

(0.54)



$

(0.49)



$

0.08




$

2.11



$

(1.34)


FFO per share and Unit - diluted


$

0.93



$

1.45



$

0.77



$

0.92



$

0.82




$

3.15



$

2.38


Core FFO per share and Unit - diluted


$

0.99



$

1.00



$

0.77



$

0.92



$

0.86




$

2.76



$

2.49


















Weighted average shares and Units - diluted


13,087



13,197



13,230



13,317



13,318




13,174



13,351



Reconciliation of Net Income (Loss) Available to Common Shareholders to Adjusted EBITDA

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, gain on litigation settlement, 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.



(in thousands)



Three Months Ended



Nine Months Ended



9/30/2019


6/30/2019


3/31/2019


12/31/2018


9/30/2018



9/30/2019


9/30/2018

Adjusted EBITDA
















Net income (loss) available to common shareholders


$

31,596



$

3,113



$

(4,698)



$

(4,106)



$

2,653




$

30,011



$

(10,917)


Adjustments:
















Dividends to preferred unitholders


160



160



57








377




Noncontrolling interests – Operating Partnership


3,145



148



(743)



(665)



112




2,550



(1,888)


Income (loss) before noncontrolling interests – Operating Partnership


$

34,901



$

3,421



$

(5,384)



$

(4,771)



$

2,765




$

32,938



$

(12,805)


Adjustments:
















Interest expense


7,448



7,343



7,558



7,336



7,828




22,349



23,857


Loss on extinguishment of debt


1,087



407



2



4



541




1,496



673


Depreciation/amortization related to real estate investments


18,299



17,963



17,433



18,133



18,491




53,695



56,699


Impairment of real estate investments








1,221








17,809


Interest income


(402)



(402)



(407)



(465)



(366)




(1,211)



(1,468)


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


(39,105)



(615)



(54)



(611)



(8,499)




(39,774)



(24,633)


Gain on litigation settlement


(300)



(6,286)










(6,586)




Adjusted EBITDA


$

21,928



$

21,831



$

19,148



$

20,847



$

20,760




$

62,907



$

60,132


 

IRET

DEBT ANALYSIS

(in thousands)


Debt Maturity Schedule

Annual Expirations




Future Maturities of Debt



Secured Fixed

Debt


Unsecured
Fixed

Debt(1)


Unsecured
Variable Debt


Total

Debt


% of
Total Debt


Weighted

Average
Interest Rate(2)

2019 (remainder)













2020


$

17,550



$



$

293



$

17,843



2.4

%


5.31

%

2021


51,876







51,876



7.0

%


5.42

%

2022


38,093



50,000



52,850



140,943



19.2

%


3.84

%

2023


48,520







48,520



6.6

%


4.02

%

Thereafter


206,692



270,000





476,692



64.8

%


3.87

%

Total debt


$

362,731



$

320,000



$

53,143



$

735,874



100.0

%


4.02

%






(1)

Term loans have variable interest rates that are fixed with interest rate swaps and $50.0 million of our variable interest, primary line of credit is fixed with an interest rate swap.

(2)

Weighted average interest rate of debt that matures during the year, including the effect of interest rate swaps on the term loans and line of credit. 

 



9/30/2019


6/30/2019


3/31/2019


12/31/2018


9/30/2018

Debt Balances Outstanding(1)











Secured fixed rate


$

362,731



$

371,951



$

432,588



$

445,974



$

464,964


Unsecured fixed rate line of credit(2)


50,000



50,000








Secured line of credit(3)




15,000



15,000






U...