-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UfF6cJyTDCjLqQ7C493JOwPSvXav6TH2Jjon/myrCgN4IKXgZuY56jwuuZ34Oy7T 2anGVpgYGCDIxUEmuuTr1Q== 0000798359-95-000006.txt : 19951214 0000798359-95-000006.hdr.sgml : 19951214 ACCESSION NUMBER: 0000798359-95-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951031 FILED AS OF DATE: 19951213 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INVESTORS REAL ESTATE TRUST CENTRAL INDEX KEY: 0000798359 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 450311232 STATE OF INCORPORATION: ND FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14851 FILM NUMBER: 95601352 BUSINESS ADDRESS: STREET 1: 12 S MAIN CITY: MINOT STATE: ND ZIP: 58701 BUSINESS PHONE: 7018521756 MAIL ADDRESS: STREET 1: 12 S MAIN CITY: MINOT STATE: ND ZIP: 58701 10-Q 1 Form 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended October 31, 1995 Commission file number 0-14851 INVESTORS REAL ESTATE TRUST (Exact name of registrant as specified in its charter) North Dakota 45-0311232 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 12 South Main, Minot, ND 58701 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code:(701)852-1756 (Former name, former address and former fiscal year, if changed since last report.) No change Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __X___ No ______ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Applicant is a Business Trust. As of October 31, 1995, it had 12,071,256 Shares of Beneficial Interest outstanding. PART I Item 1. Financial Statements. The following financial statements have been prepared from the records of Investors Real Estate Trust and its seven affiliated limited partnerships and have not been audited or reviewed by the Trust's independent certified public accountants. Accordingly, these statements are subject to adjustments upon audit, which audit will be conducted for the Fiscal Year ending April 30, 1996. Reference is made to the footnotes to the Statements prepared by the Trust's auditors for the Fiscal Year ended April 30, 1995, contained in the Annual Report for Fiscal 1995. In the opinion of the Trust, there have been no developments requiring footnote disclosure for the periods covered by the Financial Statements set forth below that are not adequately disclosed in the footnotes to the April 30, 1995, statements. BALANCE SHEETS For the Periods Ended October 31, 1995 & 1994 (unaudited)
ASSETS: 10-31-95 10-31-94 Cash $ 746,787 $ 5,320,765 Marketable Securities 4,615,430 5,022,842 Tax & Insurance Escrow 968,399 474,608 Deferred Charges 414,551 240,410 Prepaid Insurance 159,356 99,760 Deposits 50,000 450,148 $ 6,954,523 $11,608,533 Real Estate Investments Real Estate Owned $123,515,461 $71,896,802 Less Accumulated Deprec. (14,088,483) (12,221,411) Net Real Estate Owned 109,426,978 59,675,391 Real Estate Mortgages (related) 117,235 620,801 Real Estate Mortgages (unrelated) 3,336,992 5,790,199 Less Unearned Discounts (34,792) (49,462) Less Deferred Gain from Property Dispositions (219,861) (235,360) Less Reserve for Bad Debts (267,096) (293,366) Net Mortgages & Contracts 2,932,478 5,832,812 Total Real Estate Investments $112,359,456 $65,508,203 TOTAL ASSETS $119,313,979 $77,116,736 LIABILITIES: Accounts Payable & Other Liabilities $ 4,302,183 $ 1,298,963 Mortgages Payable 61,972,317 37,752,912 Investment Certificates Payable 5,440,733 4,676,449 Due on Margin Account 3,981,937 0 TOTAL LIABILITIES $75,697,170 $43,728,324 SHAREHOLDERS' EQUITY Shares of Beneficial Interest Outstanding Shares of 10-31-95 10-31-94 12,071,256 as of 10/31/95 10,339,105 as of 10/31/94 $47,142,109 $36,649,130 Undistributed Net Income (3,525,300) (3,260,718) Total Shareholders' Equity $43,616,809 $33,388,412 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $119,313,979 $77,116,736
STATEMENT OF OPERATIONS For the Three- and Six-Month Periods Ended October 31, 1995 and 1994 (unaudited)
3 Months Ended 6 Months Ended October 31 October 31 OPERATING INCOME: 1995 1994 1995 1994 Real Estate Rentals $4,508,952 $3,269,936 $8,051,435 $6,262,711 Interest Income 183,034 251,840 398,212 539,660 Mortgage Disc. & Fees 23,200 95,194 47,600 143,394 $4,715,186 $3,616,970 $8,497,247 $6,945,765 OPERATING EXPENSE: Interest $1,384,224 $ 836,547 $2,500,412 $1,668,415 Utilities & Maintenanc 764,719 583,968 1,260,006 1,213,904 Property Management 357,718 214,657 521,581 391,975 Taxes & Insurance 482,777 288,501 854,339 577,002 Advisory & Trustees Fees 114,340 82,387 212,523 162,309 Operating Expenses 45,272 24,682 76,782 51,176 $3,149,050 $2,030,742 $5,425,643 $4,064,781 OPERATING INCOME (before reserves): $1,566,136 $1,586,228 $3,071,604 $2,880,984 DEPRECIATION (508,000) (470,000) (1,004,000) (920,000) OPERATING INCOME (after reserves): $1,058,136 $1,116,228 $2,067,604 $1,960,984 GAIN ON SALE OF INVEST. 0 305,543 0 305,543 NET TAXABLE INCOME $1,058,136 $1,421,771 $2,067,604 $2,266,527 NET INCOME PER SHARE: Operating Income (after depreciation) .09 .11 .18 .19 Gain on Sale of Invest. 0 .03 0 .03 Total Taxable Income/Share .09 .14 .18 .22 DIVIDENDS PAID PER SHARE .08875 .088 .1812 .1705 Average Number of Shares Outstanding 11,958,672 10,250,921 11,668,888 10,139,349
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX-MONTH PERIODS ENDED OCTOBER 31, 1995, AND 1994 (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES 1995 1994 Net Income $ 2,067,604 $ 2,266,527 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,004,000 920,000 Interest reinvested in investment certificates 55,706 57,242 Changes in other assets and liabilities: (Increase) decrease in other assets (358,230) (224,884) Increase in accounts payable and accrued expenses 185,280 284,751 NET CASH PROVIDED FROM OPERATING ACTIVITIES $ 2,954,360 $ 3,303,636 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of securities 154,190 248,611 Principal payments on mortgage loan receivables 1,586,110 2,165,994 Payments for acquisition of properties (32,123,437) (3,323,928) Investment in mortgage loan receivables (164,516) (242,242) NET CASH PROVIDED FROM (USED FOR) INVESTING ACTIVITIES $(30,547,653) $(1,151,565) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Line of Credit $ 3,000,000 $ 0 Proceeds from loan refinance 12,857,569 1,447,779 Proceeds from sale of shares 5,195,392 1,497,443 Dividends paid (809,331) (682,075) Proceeds from investment certificates issued 517,813 452,958 Loan on margin account 6,473,437 0 Redemption of investment certificates (221,701) (239,149) Principal payments on mortgage loans and notes payable (1,008,857) (1,299,840) Payments on margin account 2,436,984 0 NET CASH USED FOR FINANCING ACTIVITIES $23,567,338 $ 1,177,116 NET INCREASE (DECREASE) IN CASH $(4,025,955) $ 3,329,187 CASH AT APRIL 30 $ 4,772,742 $ 1,991,578 CASH AT OCTOBER 31 $ 746,787 $ 5,320,765
SUPPLEMENTARY SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES 1995 1994 Dividends reinvested $ 1,321,080 $ 1,057,045 Real estate investment and mortgage loans receivable acquired through borrowings on margin account and new originations 18,557,569 2,079,021 Mortgages paid directly by owner of contract 0 10,140 Interest reinvested directly in investment certificates 55,706 48,650 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the year for: Interest paid on mortgages $ 2,351,452 $ 1,488,416 Interest paid on margin account and other 54,136 0 Interest paid on investment certificates 73,243 86,439 $22,413,186 $ 4,769,711
(The balance of this page was left blank intentionally.) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations. IRET had net taxable earnings for the second quarter of Fiscal 1996 of $1,058,136, compared to $1,421,771 for the same period of the prior fiscal year,(the prior year's results included $305,543 of gain from sale of investments while no investments were sold in this year's period). For the first six months of Fiscal 1996, net taxable income was $2,067,604, compared to $2,266,527 for the same period last year (again, the 1995 results included the $305,543 of capital gain income). Funds from operations (taxable income increased by non- cash deductions of depreciation and amortization, less extraordinary income items) for the second quarter was $1,566,136, compared to the year earlier figure of $1,586,228. For the six month period, funds from operations were $3,071,604 for Fiscal 1996, compared to $2,880,984. These changes in net taxable earnings and Funds From Operations resulted from: - the rapid decline in the Trust's mortgage loan portfolio. The high-yield residential loans made by the Trust in the Denver area are being paid off. - a considerable amount of capital invested in properties under construction. No "income" can be recorded until the properties are completed and rental income received. - loss of two months' rent (about $100,000) from the Smith Home Furnishings property in Boise, Idaho. The tenant is in bankruptcy and the lease has been terminated and we are seeking a new tenant. - on the positive side, we continue to experience strong rental demand; the new properties being added to our portfolio are performing very well and we are on target with our program of increasing rents. We are pleased with the performance of our portfolio and are optimistic about the future. The proto-type apartments being constructed are being received very well. The apartments are renting up quickly and at or above projected rental rates. We project earnings for the balance of the year to exceed year-earlier levels. The Trust has agreed to sell several smaller properties which will result in capital gain income in an amount greater than earned last year. Financial Condition. IRET's liquidity and capital resources remain strong and the Trust will close on the purchase of a substantial amount of real estate investments during the balance of this fiscal year. Comparative balance sheet figures are:
10/31/95 10/31/94 Cash and Marketable Securities $ 5,362,217 $10,343,603 Net Real Estate Owned 109,426,978 59,675,391 Net Real Estate Mortgages 3,932,478 5,832,812 Total Assets 119,313,979 77,116,736 Total Liabilities 75,697,170 43,728,324 Shareholder Equity 43,616,809 33,388,412
Consolidated Financial Reports. The Financial Statements shown in this report consolidate IRET's financial report with those of the seven limited partnerships of which IRET is the General Partner and creditor. Sale of Properties. During the second quarter, IRET did not sell any of its properties, but several properties will be sold during the balance of the year. The gain on these sales will be reported in the third and fourth quarters. The following new investments were added to our portfolio during the second quarter and are producing income: - Stone Container Commercial Building, Fargo, ND ($4,850,000 estimated cost) - Douglasville, Georgia, Retirement Center ($2,810,000 estimated cost) - 98 apartment units - Minot, ND ($4,500,000 estimated cost) - 116 apartment units - Grand Forks, ND ($5,225,000 estimated cost) - 98 apartment units - Billings, MT ($5,000,000 estimated cost) Dividends. IRET paid a regular dividend of 8.875 cents per share on October 1, 1995, to shareholders of record at the close of business on September 24, 1995. This was an increase from the 8.75 cents per share regular dividend paid on July 1, 1995, (a special dividend of .5 cents per share was also paid on July 1, 1995, for a total dividend of 9.25 cents per share) and was the 98th consecutive quarterly dividend paid by IRET. PART II - OTHER INFORMATION Item 1. Legal Proceedings. None Item 2. Changes in Securities. None Item 3. Defaults Upon Senior Securities. None Item 4. Submission of Matters to a Vote of Security Holders. None Item 5. Other Information. None Item 6. Exhibits and Reports on Form 8-K. None Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INVESTORS REAL ESTATE TRUST (Registrant) Date: December 13, 1995 By_______________________________ Thomas A. Wentz, Vice-President EX-27 2
5 6-MOS APR-30-1996 OCT-31-1995 746,787 4,615,430 3,454,227 (521,749) 0 1,592,306 123,515,461 (14,088,483) 119,313,979 4,302,183 5,440,733 47,142,109 0 0 (3,525,300) 119,313,979 0 8,497,247 0 3,929,231 0 0 2,500,412 2,067,604 0 2,067,604 0 0 0 2,067,604 .18 0
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