EX-99.1 2 iretexhibit99106292012.htm EARNINGS RELEASE iretexhibit99106292012.htm
 
 
 

Exhibit 99.1
Earnings Release
 
INVESTORS REAL ESTATE TRUST
ANNOUNCES
FINANCIAL AND OPERATING RESULTS
FOR THE QUARTER AND FISCAL YEAR ENDED APRIL 30, 2012
 
Minot, ND – June 29, 2012 – Investors Real Estate Trust (tickers: IRET and IRETP; exchange: NASDAQ Global Select Market) reported financial and operating results today for the quarter and fiscal year ended April 30, 2012.
 
During the three month period ended April 30, 2012, IRET’s revenues increased from the year-earlier period. Funds From Operations (FFO)1 overall and on a per share and unit basis increased for the three month period ended April 30, 2012 compared to the same period of the prior fiscal year.  Net income increased from the year-earlier period.  Included in fourth quarter fiscal 2012 net income were proceeds from the settlement in the fourth quarter of a claim made in fiscal year 2009 against the bankruptcy estate of a former tenant; a gain on involuntary conversion from the receipt of insurance proceeds for the redevelopment of our Arrowhead Shopping Center property following the severe flood in Minot, North Dakota in June 2011;  and insurance proceeds for loss of rents at our Arrowhead and Chateau Apartments properties as a result of the June 2011 flood.

For the three month period ended April 30, 2012, as compared to the same period of the prior fiscal year:
 
 
•
Revenues increased to $60.6 million from $59.0 million.
 
 
•
FFO increased to $19.1 million on approximately 107,316,000 weighted average shares and units outstanding, from $14.7 million on approximately 100,239,000 weighted average shares and units outstanding ($.18 per share and unit compared to $.15 per share and unit).
 
 
•
Net Income Available to Common Shareholders, as computed under generally accepted accounting principles, was approximately $2.8 million compared to a net loss of $149,000 in the same period of the prior fiscal year.
 
 
•
Total expenses decreased by $3.4 million, or 7.8%, in the three months ended April 30, 2012 compared to the three months ended April 30, 2011, from $43.3 million to $39.9 million.
 
During the twelve month period ended April 30, 2012, IRET’s revenues increased from the year-earlier period. FFO overall and on a per share and unit basis increased for the twelve month period ended April 30, 2012 compared to the same period of the prior fiscal year.  Net income decreased from the year-earlier period, primarily due to the decrease in gain on sale of discontinued operations in the twelve month period ended April 30, 2012, compared to the twelve month period ended April 30, 2011.
 
For the twelve month period ended April 30, 2012, as compared to the same period of the prior fiscal year:
 
 
•
Revenues increased to $241.8 million from $237.0 million.
 
 
•
FFO increased to $67.3 million on approximately 103,432,000 weighted average shares and units outstanding, from $62.2 million on approximately 98,782,000 weighted average shares and units outstanding ($.65 per share and unit compared to $.63 per share and unit).
 
 
•
Net Income Available to Common Shareholders, as computed under generally accepted accounting principles, was approximately $5.8 million compared to $17.7 million in the same period of the prior fiscal year.
 
 
•
Total expenses decreased by $1.3 million, or 0.8%, in the twelve months ended April 30, 2012 compared to the twelve months ended April 30, 2011, from $169.2 million to $167.8 million.
 
IRET’s President and Chief Executive Officer, Timothy Mihalick, commented: “During fiscal year 2012 we continued to see in our operating results the effects of a slowly recovering economy, particularly in our commercial office segment. However, we consider our entire commercial portfolio well-placed to benefit as the economy does recover. Our multi-family residential segment continued its strong performance in the fourth quarter. As we have previously noted, acquisition and development opportunities remain numerous, particularly in our home market of North Dakota, where production from the Bakken energy field recently resulted in North Dakota becoming the nation’s second-leading oil producer, ahead of Alaska and behind only Texas. During fiscal year 2013, we will continue to focus on acquisitions and development projects in our targeted core markets, and on identifying properties for disposition in order to consolidate our geographic footprint.  Consistent with this focus, I would note our recent exit from the Michigan market with the sale, subsequent to the end of our fiscal 2012 fourth quarter, of our Kentwood Thomasville Furniture property in Kentwood, Michigan.”
______________________________
1
The National Association of Real Estate Investment Trusts, Inc. (NAREIT) defines FFO as “net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of property, plus real estate depreciation and amortization, and adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis.”  In addition, NAREIT recently clarified its computation of FFO to exclude impairment charges for all periods presented. FFO is a non-GAAP measure. We consider FFO, which is a standard supplemental measure for equity real estate investment trusts, helpful to investors because it facilitates an understanding of the operating performance of properties without giving effect to impairment write-downs and to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time.  Since real estate values instead historically rise or fall with market conditions, we believe that FFO provides investors and management with a more accurate indication of our financial and operating results. See table below for a reconciliation of Net Income to FFO.
 

 
i
 

Operating Results
 
Net Operating Income (NOI)2 from stabilized properties3 increased approximately $3.5 million or 11.0% during the three month period ended April 30, 2012, compared to the same period one year ago. NOI from stabilized properties decreased in one of our five segments, with NOI decreasing by 2.3% in our commercial medical segment, and increasing in our multi-family residential, commercial office, commercial industrial and commercial retail segments by 15.6%, 3.2%, 65.5% and 50.1%, respectively, primarily due to increased occupancy in our multi-family residential, commercial industrial and commercial retail segments.  NOI from all properties increased by $5.3 million during the three month period ended April 30, 2012, compared to the same period one year ago. NOI from all properties increased in all of our five segments.   The increase is primarily due to increased occupancy in our multi-family residential, commercial industrial and commercial retail segments.
 
NOI from stabilized properties decreased approximately $3.4 million or 2.6% during the twelve month period ended April 30, 2012, compared to the same period one year ago. NOI from stabilized properties decreased by 6.4% and 4.1%, respectively, in our commercial office and commercial medical segments, with NOI increasing in our multi-family residential, commercial industrial and commercial retail segments by 16.5%, 22.0%  and 8.0%, respectively, primarily due to increased occupancy.  NOI from all properties increased by $8.6 million during the twelve month period ended April 30, 2012, compared to the same period one year ago. NOI from all properties increased in four of our five segments. NOI in our commercial office segment, however, decreased 5.2% due to increased vacancy, compared to the twelve month period ended April 30, 2011.
 
As of April 30, 2012, compared to April 30, 2011, physical occupancy levels on a stabilized property basis and on an all property basis increased in three of our five reportable segments.
 
Physical Occupancy Levels on a Stabilized Property and All Property Basis:
 
 
Stabilized Properties(a)
  
All Properties
 
As of April 30,
  
As of  April 30,
Segments
Fiscal 2012
Fiscal 2011
  
Fiscal 2012
Fiscal 2011
Multi-Family Residential
94.2%
92.8%
  
93.7%
92.8%
Commercial Office
78.4%
79.5%
  
78.6%
79.7%
Commercial Medical
93.8%
95.8%
  
94.5%
96.0%
Commercial Industrial
95.4%
90.0%
  
95.5%
90.1%
Commercial Retail
86.6%
83.2%
  
87.1%
82.2%
 
a.
As of April 30, 2012, stabilized properties excluded:
 
 
Multi-Family Residential -
Ashland, Grand Forks, ND; Chateau, Minot, ND; Cottage West Twin Homes, Sioux Falls, SD; Evergreen II, Isanti, MN; Gables Townhomes, Sioux Falls, SD; Grand Gateway, St Cloud, MN; North Pointe II, Bismarck, ND; Regency Park Estates, St Cloud, MN; Sierra Vista, Sioux Falls, SD and Williston Garden, Williston, ND.
 
Total number of units, 629 Occupancy % for April 30, 2012 is 86.8%.
 
 
Commercial Office -
1st Avenue Building, Minot, ND and Omaha 10802 Farnum Drive, Omaha, NE.
 
Total square footage 63,001. Occupancy % for April 30, 2012 is 98.7%.
 
 
Commercial Medical -
Billings 2300 Grant Road, Billings, MT; Edgewood Vista-Minot, Minot, ND; Edina 6525 Drew Avenue, Edina, MN; Missoula 3050 Great Northern Avenue, Missoula, MT; Spring Creek American Falls, American Falls, ID; Spring Creek Soda Springs, Soda Springs, ID; Spring Creek Eagle, Eagle, ID; Spring Creek Meridian, Meridian, ID; Spring Creek Overland, Boise, ID; Spring Creek Boise, Boise, ID; Spring Creek Ustick, Meridian, ID and Trinity at Plaza 16, Minot, ND.
 
Total square footage, 315,818. Occupancy % for April 30, 2012 is 99.9%.
 
 
Commercial Industrial -
Fargo 1320 45th Street North, Fargo, ND.
 
Total square footage, 42,244. Occupancy % for April 30, 2012 is 100.0%.
 
 
Commercial Retail -
Minot 1400 31st Ave, Minot, ND.
 
Total square footage, 48,960 Occupancy % for April 30, 2012 is 100.0%.
 
 
 
As of April 30, 2011, stabilized properties excluded:
 
 
Multi-Family Residential -
Chateau, Minot, ND; North Pointe II, Bismarck, ND and Sierra Vista, Sioux Falls, SD.
 
Total number of units, 132 Occupancy % for April 30, 2011 is 93.9%.
 
Commercial Office -
1st Avenue Building, Minot, ND and Omaha 10802 Farnum Drive, Omaha, NE..
 
Total square footage, 63,001. Occupancy % for April 30, 2011 is 98.7%.
 
 
Commercial Medical -
Billings 2300 Grant Road, Billings, MT; Edgewood Vista-Minot, Minot, ND and Missoula 3050 Great Northern Avenue, Missoula, MT  .
 
Total square footage, 137,848. Occupancy % for April 30, 2011 is 100.0%.
 
 
Commercial Industrial -
Fargo 1320 45th Street North, Fargo, ND.
 
Total square footage, 42,244. Occupancy % for April 30, 2011 is 100.0%.
 
Commercial Retail -
Minot 1400 31st Ave, Minot, ND.
 
Total square footage, 47,709 Occupancy % for April 30, 2011 is 53.6%.
 
______________________________
2
We measure the performance of our segments based on NOI, which we define as total real estate revenues less real estate expenses (which consist of utilities, maintenance, real estate taxes, insurance and property management expenses). We believe that NOI is an important supplemental measure of operating performance for a real estate investment trust’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 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. See tables below for a reconciliation of NOI to the condensed consolidated financial statements.
3
Stabilized properties are those properties owned for the entirety of both periods being compared, and which, in the case of development or re-development properties, have achieved a target level of occupancy.
 

 
ii
 

 
Acquisitions and Dispositions
 
During the fourth quarter of fiscal year 2012, the Company acquired two multi-family residential properties and a parcel of vacant land, as follows: on February 16, 2012, the Company closed on its acquisition of the 116-unit Grand Gateway Apartments in St. Cloud, Minnesota, for a total purchase price of $7.9 million, of which approximately $3.4 million was paid in cash and the remainder in limited partnership units of the Company’s Operating Partnership valued at issuance at approximately $4.5 million; on March 16, 2012, the Company acquired the 84-unit Ashland Apartments in Grand Forks, North Dakota, for $8.3 million, of which approximately $7.2 million was paid in cash and the remainder in limited partnership units of the Operating Partnership, valued at issuance at approximately $1.1 million; and on April 11, 2012, a joint venture entity of which the Company owns 60% closed on the acquisition of a 40-acre parcel of vacant land in Williston, North Dakota, for a total purchase price of approximately $4.6 million, of which the Company paid approximately $3.2 million. This parcel of land has been approved for multi-family development with the potential to accommodate up to 850 units. Additionally, during the fourth quarter of fiscal year 2012, on April 27, 2012, the Company placed in service buildings 1 and 2 of its 4-building Williston Garden multi-family residential project in Williston, North Dakota. The Company is a 60% partner in the joint venture entity constructing this property.
 
During the fourth quarter of fiscal year 2012, on March 13, 2012, the Company sold a small retail property in East Grand Forks, Minnesota, for a sales price of approximately $1.1 million.
 
Shareholder Equity, Distributions and Capital Structure
 
As of April 30, 2012, IRET had a total capitalization of $1.9 billion. Total capitalization is defined as the market value (closing price at end of period) of the Company’s outstanding common shares and the imputed market value of the outstanding limited partnership units of IRET Properties (which are convertible, at the expiration of a specified holding period, into cash or, at the Company’s sole discretion, into common shares of the Company on a one-to-one basis), plus the book value of the Company’s preferred shares and the outstanding principal balance of the consolidated debt of the Company.
 
On April 2, 2012, IRET paid a quarterly distribution of $0.1300 per share and unit on its common shares and limited partnership units of IRET Properties. This was IRET’s 164th consecutive distribution. IRET also paid, on April 2, 2012, a quarterly distribution of $0.5156 per share on its Series A preferred shares.
 
Distribution Declared.  Subsequent to the end of the fourth quarter of fiscal year 2012, on June 1, 2012, the Company’s Board of Trustees declared a regular quarterly distribution of $0.1300 per share and unit on the Company’s common shares of beneficial interest and the limited partnership units of IRET Properties, payable July 2, 2012 to common shareholders and unitholders of record on June 15, 2012. Also on June 1, 2012, the Company’s Board of Trustees’ declared a distribution of $0.5156 per share on the Company’s preferred shares of beneficial interest, payable July 2, 2012 to preferred shareholders of record on June 15, 2012.
 
Conference Call Information
 
The Conference Call for 4th Quarter Earnings is scheduled for Monday, July 2, 2012 at 9:00 A.M. Central Daylight Time.  The call will be limited to one hour, including questions and answers.  Conference call access information is as follows:
 
USA Toll Free Number: 1-877-317-6789
International Toll Free Number: 1-412-317-6789
Canada Toll Free Number: 1-866-605-3852
 
A webcast and transcript of the call will be archived on the “Investors/ Presentations & Events/Presentations” page of IRET’s website, http://www.iret.com, for one year.  Questions regarding the conference call should be directed to IRET Investor Relations at landerson@iret.com.
 
About IRET
 
IRET is a self-administered, equity real estate investment trust investing in income-producing properties located primarily in the upper Midwest. IRET owns a diversified portfolio of properties consisting of 84 multi-family residential properties with 9,161 apartment units; and 68 commercial office properties, 65 commercial medical properties (including senior housing), 19 commercial industrial properties and 30 commercial retail properties with a total of approximately 12.3 million square feet of leasable space.  IRET common and preferred shares are publicly traded on the NASDAQ Global Select Market (symbols: IRET and IRETP). IRET’s press releases and supplemental information are available on the Company website at www.iret.com or by contacting Investor Relations at 701-837-4738.
 
Certain statements in this earnings release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from projected results. Such risks, uncertainties and other factors include, but are not limited to: intentions and expectations regarding future distributions on our common shares and units, fluctuations in interest rates, the effect of government regulation, the availability of capital, changes in general and local economic and real estate market conditions, competition, our ability to attract and retain skilled personnel, and those risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission, including our 2011 Form 10-K.  We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
 

 
iii
 

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

 
   
(in thousands)
  
   
April 30, 2012
    
April 30, 2011
  
ASSETS
            
Real estate investments
            
Property owned
   $ 1,892,009     $ 1,770,798  
Less accumulated depreciation
     (373,490 )     (328,952 )
      1,518,519       1,441,846  
Development in progress
     27,599       9,693  
Unimproved land
     10,990       6,550  
Mortgage loans receivable, net of allowance of $0 and $3, respectively
     0       156  
Total real estate investments
     1,557,108       1,458,245  
Real estate held for sale
     2,067       0  
Cash and cash equivalents
     39,989       41,191  
Other investments
     634       625  
Receivable arising from straight-lining of rents, net of allowance of $1,209 and $996, respectively
     23,273       18,933  
Accounts receivable, net of allowance of $154 and $317, respectively
     7,052       5,646  
Real estate deposits
     263       329  
Prepaid and other assets
     3,703       2,351  
Intangible assets, net of accumulated amortization of $47,813 and $42,154, respectively
     44,588       49,832  
Tax, insurance, and other escrow
     11,669       15,268  
Property and equipment, net of accumulated depreciation of $1,423 and $1,231, respectively
     1,454       1,704  
Goodwill
     1,120       1,127  
Deferred charges and leasing costs, net of accumulated amortization of $16,244 and $13,675, respectively
     21,447       20,112  
TOTAL ASSETS
   $ 1,714,367     $ 1,615,363  
LIABILITIES AND EQUITY
                
LIABILITIES
                
Accounts payable and accrued expenses
   $ 47,403     $ 37,879  
Revolving line of credit
     39,000       30,000  
Mortgages payable
     1,048,689       993,803  
Other
     14,012       8,404  
TOTAL LIABILITIES
     1,149,104       1,070,086  
COMMITMENTS AND CONTINGENCIES
                
REDEEMABLE NONCONTROLLING INTERESTS – CONSOLIDATED REAL ESTATE ENTITIES
     0       987  
EQUITY
                
Investors Real Estate Trust shareholder’s equity
                
Preferred Shares of Beneficial Interest (Cumulative redeemable preferred shares, no par value, 1,150,000 shares issued and outstanding at April 30, 2012 and April 30, 2011, aggregate liquidation preference of $28,750,000)
     27,317       27,317  
Common Shares of Beneficial Interest (Unlimited authorization, no par value, 89,473,838 shares issued and outstanding at April 30, 2012, and 80,523,265 shares issued and outstanding at April 30, 2011)
     684,049       621,936  
Accumulated distributions in excess of net income
     (278,377 )     (237,563 )
Total Investors Real Estate Trust shareholders’ equity
     432,989       411,690  
Noncontrolling interests – Operating Partnership (20,332,415 units at April 30, 2012 and 20,067,350 units at April 30, 2011)
     118,710       123,627  
Noncontrolling interests – consolidated real estate entities
     13,564       8,973  
Total equity
     565,263       544,290  
TOTAL LIABILITIES AND EQUITY
   $ 1,714,367     $ 1,615,363  


 
iv
 

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
for the three and twelve months ended April 30, 2012 and 2011
 
   
(in thousands, except per share data)
  
   
Three Months Ended
April 30
    
Twelve Months Ended
April 30
  
   
2012
    
2011
    
2012
    
2011
  
REVENUE
                        
Real estate rentals
   $ 49,939     $ 48,828     $ 198,859     $ 192,023  
Tenant reimbursement
     10,682       10,198       42,929       44,931  
TOTAL REVENUE
     60,621       59,026       241,788       236,954  
EXPENSES
                                
Depreciation/amortization related to real estate investments
     14,389       14,219       57,048       55,706  
Utilities
     4,244       5,046       17,628       18,224  
Maintenance
     6,412       7,235       26,578       29,212  
Real estate taxes
     8,248       7,779       31,746       30,799  
Insurance
     1,001       437       3,550       2,299  
Property management expenses
     2,946       5,750       18,776       21,268  
Administrative expenses
     1,338       1,562       6,694       6,617  
Advisory and trustee services
     99       123       687       605  
Other expenses
     389       408       1,898       1,747  
Amortization related to non-real estate investments
     821       702       3,216       2,679  
TOTAL EXPENSES
     39,887       43,261       167,821       169,156  
Gain on involuntary conversion
     274       0       274       0  
Interest expense
     (16,430 )     (15,581 )     (65,113 )     (63,820 )
Interest income
     33       65       148       259  
Other income
     108       65       638       282  
Income from continuing operations
     4,719       314       9,914       4,519  
(Loss) income from discontinued operations
     (598 )     (4 )     (208 )     19,832  
NET INCOME
     4,121       310       9,706       24,351  
Net (income) loss attributable to noncontrolling interests – Operating Partnership
     (636 )     36       (1,359 )     (4,449 )
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities
     (106 )     98       (135 )     180  
Net income attributable to Investors Real Estate Trust
     3,379       444       8,212       20,082  
Dividends to preferred shareholders
     (593 )     (593 )     (2,372 )     (2,372 )
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
   $ 2,786     $ (149 )   $ 5,840     $ 17,710  
Earnings (loss) per common share from continuing operations – Investors Real Estate Trust – basic and diluted
     .04       (.01 )     .07       .02  
(Loss) earnings per common share from discontinued operations – Investors Real Estate Trust – basic and diluted
     (.01 )     .00       .00       .20  
NET INCOME (LOSS) PER COMMON SHARE – BASIC AND DILUTED
   $ .03     $ (.01 )   $ .07     $ .22  
DIVIDENDS PER COMMON SHARE
   $ .1300     $ .1715     $ .5615     $ .6860  

 
v
 

INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO
INVESTORS REAL ESTATE TRUST TO FUNDS FROM OPERATIONS
for the three and twelve months ended April 30, 2012 and 2011


 
 
(in thousands, except per share amounts)
  
Three Months Ended April 30,
2012
  
2011
  
 
Amount
    
Weighted
Avg Shares
and Units(2)
  
Per
Share and
Unit(3)
  
Amount
    
Weighted
Avg Shares
and Units(2)
  
Per
Share
And
Unit(3)
  
 
 
 
Net income attributable to Investors Real Estate Trust
   $ 3,379                 $ 444              
Less dividends to preferred shareholders
     (593 )                 (593 )            
Net income (loss) available to common shareholders
     2,786       87,031     $ 0.03       (149 )     80,143     $ (0.01 )
Adjustments:
                                                
Noncontrolling interest – Operating Partnership
     636       20,285               (36 )     20,096          
Depreciation and amortization(1)
     15,165                       14,877                  
Real estate impairment
     293                                          
Loss on depreciable property sales
     240                       0                  
Funds from operations applicable to common shares
and Units
   $ 19,120       107,316     $ 0.18       14,692       100,239     $ 0.15  

 
(in thousands, except per share amounts)
  
Twelve Months Ended April 30,
2012
  
2011
  
 
Amount
    
Weighted
Avg Shares
and Units(2)
  
Per
Share and
Unit(3)
  
Amount
    
Weighted
Avg Shares
and Units(2)
  
Per
Share
And
Unit(3)
  
 
 
 
Net income attributable to Investors Real Estate Trust
   $ 8,212                 $ 20,082              
Less dividends to preferred shareholders
     (2,372 )                 (2,372 )            
Net income available to common shareholders
     5,840       83,557     $ 0.07       17,710       78,628     $ 0.22  
Adjustments:
                                                
Noncontrolling interest – Operating Partnership
     1,359       19,875               4,449       20,154          
Depreciation and amortization(4)
     60,057                       59,402                  
Real estate impairment
     428                       0                  
Gain on depreciable property sales
     (349 )                     (19,365 )                
Funds from operations applicable to common shares
and Units
   $ 67,335       103,432     $ 0.65       62,196       98,782     $ 0.63  
 
(1)
Real estate depreciation and amortization consists of the sum of depreciation/amortization related to real estate investments and amortization related to non-real estate investments from the Condensed Consolidated Statements of Operations, totaling $15,210 and $14,921, and depreciation/amortization from Discontinued Operations of $2 and $26, less corporate-related depreciation and amortization on office equipment and other assets of $47 and $70, for the three months ended April 30, 2012 and 2011, respectively.
 
(2)
UPREIT Units of the Operating Partnership are exchangeable for cash, or, at the Company’s discretion, for common shares of beneficial interest on a one-for-one basis.
 
(3)
Net income attributable to Investors Real Estate Trust is calculated on a per share basis. FFO is calculated on a per share and unit basis.
 
(4)
Real estate depreciation and amortization consists of the sum of depreciation/amortization related to real estate investments and amortization related to non-real estate investments from the Condensed Consolidated Statements of Operations, totaling $60,264 and $58,385, and depreciation/amortization from Discontinued Operations of $60  and $1,289, less corporate-related depreciation and amortization on office equipment and other assets of $267 and $272, for the twelve months ended April 30, 2012 and 2011, respectively.
 

 
vi
 


INVESTORS REAL ESTATE TRUST AND SUBSIDIARIES
RECONCILATION OF NET OPERATING INCOME TO THE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and twelve months ended April 30, 2012 and 2011

 
(in thousands)
  
Three Months Ended April 30, 2012
Multi-Family
Residential
    
Commercial-
Office
    
Commercial-
Medical
    
Commercial-
Industrial
    
Commercial-
Retail
    
Total
  
                                     
Real estate revenue
   $ 19,491     $ 18,611     $ 15,232     $ 3,728     $ 3,559     $ 60,621  
Real estate expenses
     8,999       8,365       3,946       371       1,170       22,851  
Gain on involuntary conversion
     0       0       0       0       274       274  
Net operating income
   $ 10,492     $ 10,246     $ 11,286     $ 3,357     $ 2,663       38,044  
Depreciation/amortization
                                             (15,210 )
Administrative, advisory and trustee services
                                             (1,437 )
Other expenses
                                       (389 )
Interest expense
                                             (16,430 )
Interest and other income
                                             141  
Income from continuing operations
       4,719  
Loss from discontinued operations
       (598 )
Net income
     $ 4,121  

 
(in thousands)
  
Three Months Ended April 30, 2011
Multi-Family
Residential
    
Commercial-
Office
    
Commercial-
Medical
    
Commercial-
Industrial
    
Commercial-
Retail
    
Total
  
                                     
Real estate revenue
   $ 17,242     $ 18,908     $ 16,501     $ 3,275     $ 3,100     $ 59,026  
Real estate expenses
     8,882       8,973       5,904       1,205       1,283       26,247  
Net operating income
   $ 8,360     $ 9,935     $ 10,597     $ 2,070     $ 1,817       32,779  
Depreciation/amortization
                                             (14,921 )
Administrative, advisory and trustee services
                                       (1,685 )
Other expenses
                                             (408 )
Interest expense
                                             (15,581 )
Interest and other income
                                             130  
Income from continuing operations
                                             314  
Loss from discontinued operations
                                             (4 )
Net income
     $ 310  

 
(in thousands)
  
Twelve Months Ended April 30, 2012
Multi-Family
Residential
    
Commercial-
Office
    
Commercial-
Medical
    
Commercial-
Industrial
    
Commercial-
Retail
    
Total
  
                                     
Real estate revenue
   $ 74,190     $ 74,334     $ 65,531     $ 14,325     $ 13,408     $ 241,788  
Real estate expenses
     34,790       34,816       20,655       3,549       4,468       98,278  
Gain on involuntary conversion
     0       0       0       0       274       274  
Net operating income
   $ 39,400     $ 39,518     $ 44,876     $ 10,776     $ 9,214       143,784  
Depreciation/amortization
                                             (60,264 )
Administrative, advisory and trustee services
                                             (7,381 )
Other expenses
                                       (1,898 )
Interest expense
                                             (65,113 )
Interest and other income
                                             786  
Income from continuing operations
       9,914  
Loss from discontinued operations
       (208 )
Net income
     $ 9,706  

 
(in thousands)
  
Twelve Months Ended April 30, 2011
Multi-Family
Residential
    
Commercial-
Office
    
Commercial-
Medical
    
Commercial-
Industrial
    
Commercial-
Retail
    
Total
  
                                     
Real estate revenue
   $ 66,838     $ 77,747     $ 66,048     $ 13,165     $ 13,156     $ 236,954  
Real estate expenses
     34,129       36,055       22,451       4,328       4,839       101,802  
Net operating income
   $ 32,709     $ 41,692     $ 43,597     $ 8,837     $ 8,317       135,152  
Depreciation/amortization
                                             (58,385 )
Administrative, advisory and trustee services
                                       (7,222 )
Other expenses
                                             (1,747 )
Interest expense
                                             (63,820 )
Interest and other income
                                             541  
Income from continuing operations
                                             4,519  
Income from discontinued operations
                                             19,832  
Net income
     $ 24,351  


 
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