-----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, TjhCEhpqJu8VL6uRTNkIN4sSUKEXIczKbgAlf+d3H/4Ek/BwxvubSJQ6YFIizLxc MXWAdS1TLEEzVlrSC9sk0A== 0000798359-97-000020.txt : 19970918 0000798359-97-000020.hdr.sgml : 19970918 ACCESSION NUMBER: 0000798359-97-000020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970731 FILED AS OF DATE: 19970912 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: SEC FILE NUMBER: 000-14851 FILM NUMBER: 97679599 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 July 31, 1997 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 North Dakota Real Estate Investment Trust. As of July 31, 1997, it had 15,297,234 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 six 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, 1998. Reference is made to the footnotes to the Statements prepared by the Trust's auditors for the Fiscal Year ended April 30, 1997, contained in the Annual Report for Fiscal 1997. 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, 1997, statements. BALANCE SHEETS For the Periods Ended July 31, 1997 & 1996 (unaudited)
ASSETS: 07-31-97 07-31-96 Cash $ 2,762,500 $ 2,337,764 Marketable Securities -GNMA's 3,924,643 4,203,355 -Other REIT's 735,118 603,119 Tax & Insurance Escrow 974,933 1,529,646 Deferred Charges 924,543 1,041,141 Prepaid Insurance 235,516 99,962 Real Estate Deposits 100,000 70,000 General Partnerships 78,469 85,576 ------------ ------------ $ 9,735,722 $ 9,970,563 ============ ============ Real Estate Investments Real Estate Owned $196,009,759 $137,118,745 Less Accumulated Deprec. (17,989,316) (14,043,454) ------------ ------------ Net Real Estate Owned 178,020,443 123,075,291 ------------ ------------ Real Estate Mortgages (unrelated) 1,940,621 3,282,698 Less Unearned Discounts (9,097) (18,222) Less Deferred Gain from Property Dispositions (18,713) (165,074) Less Reserve for Bad Debts (124,881) (197,096) ------------ ------------ Net Mortgages & Contracts $ 1,787,930 $ 2,902,306 ------------ ------------ Total Real Estate Investments $179,808,373 $125,977,597 ------------ ------------ TOTAL ASSETS $189,544,095 $135,948,160 ============ ============ LIABILITIES: Accounts Payable & Other Liabilities $ 2,602,707 $ 1,900,295 Mortgages Payable 115,618,074 74,106,387 Investment Certificates Payable 9,508,850 6,718,161 ------------ ------------ TOTAL LIABILITIES $127,729,630 $ 82,724,843 ------------ ------------ MINORITY INTEREST IN OPERATING PARTNERSHIP $ 1,002 0 ------------ ------------ SHAREHOLDERS' EQUITY Shares of Beneficial Interest Outstanding Shares of 07-31-97 07-31-96 15,297,234 as of 07/31/97 13,666,570 as of 07/31/96 $ 67,444,949 $ 56,853,298 Undistributed Net Income (5,756,539) (3,629,981) Unrealized Gain REIT Stock 125,052 0 ------------ ------------ Total Shareholders' Equity $ 61,813,462 $ 53,223,317 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $189,544,095 $135,948,160 ============ ============
STATEMENT OF OPERATIONS For the Three-Month Periods Ended July 31, 1997 & 1996 (unaudited)
3 Months Ended July 31 -------------- 1997 1996 OPERATING INCOME: ---- ---- Real Estate Rentals $ 7,007,297 $ 4,750,394 Interest Income 162,705 214,648 Mortgage Discount & Fees 13,759 1,433 ----------- ----------- $ 7,183,761 $ 4,966,475 ----------- ----------- OPERATING EXPENSE: Interest $ 2,441,788 $ 1,421,183 Utilities & Maintenance 1,118,751 774,431 Property Management 625,147 377,718 Taxes & Insurance 800,886 552,750 Advisory & Trustees Fees 150,648 129,217 Operating Expenses 53,466 42,709 ----------- ----------- $ 5,190,686 $ 3,298,008 ----------- ----------- OPERATING INCOME (before reserves): $ 1,993,075 $ 1,668,467 ----------- ----------- DEPRECIATION/AMORTIZATION (1,099,031) (690,360) ----------- ----------- OPERATING INCOME (after reserves): $ 894,044 $ 978,107 GAIN ON SALE OF INVESTMENTS 39,069 254,929 MINORITY INTEREST PORTION OF OPERATING PARTNERSHIP NET INCOME (7) 0 ----------- ----------- NET TAXABLE INCOME $ 933,106 $ 1,233,036 ----------- ----------- FUNDS FROM OPERATIONS: * Operating Income $ 894,044 $ 978,107 Plus Depreciation & Amortization 1,099,031 690,360 Minus Minority Interest - Operating Partnership (7) 0 ----------- ----------- FUNDS FROM OPERATIONS $ 1,993,082 $ 1,668,467 ----------- ----------- PER SHARE: Operating Income (after depreciation) .06 .07 Gain on Sale of Investments .00 .02 ----------- ----------- Total Taxable Income/Share .06 .09 ----------- ----------- FUNDS FROM OPERATIONS * .13 .12 ----------- ----------- DIVIDENDS PAID PER SHARE .10125 .0975 ----------- ----------- Average Number of Shares Outstanding 15,081,101 13,559,802 ----------- ----------- * Funds from Operations is defined as income before gains (losses) on sales of investments, minority interests of unitholders in operating partnership and extraordinary items, plus depreciation and amortization.
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH PERIODS ENDED JULY 31, 1997, AND 1996 (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES 1997 1996 ---- ---- Net Income $ 933,106 $ 1,233,036 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,099,030 690,361 Minority interest portion of operating partnership income 7 0 Accretion of discount on contracts (1,427) 0 Gain on Sale of Properties (39,069) (254,929) Interest reinvested in investment certificates 32,173 18,885 Changes in other assets and liabilities: Increase (decrease) in real estate deposits 0 70,000 (Increase) decrease in other assets 56,596 (450,258) (Increase) decrease in tax and insurance escrow 275,536 378,119 Increase (decrease) in accounts payable and accrued expenses 113,750 637,650 ------------ ------------ NET CASH PROVIDED FROM OPERATING ACTIVITIES $ 2,469,702 $ 2,322,864 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from maturity of marketable securities held to maturity $ 130,816 $ 208,502 Principal payments on mortgage loans receivable 257,634 706,091 Proceeds from sale of property 250,000 0 Payments for acquisition and improvements of properties (3,975,628) (6,154,468) Purchase of marketable securities available for sale (13,105) (600,000) Investment in mortgage loans receivable (75,959) (324,780) ------------ ------------ NET CASH USED FOR INVESTING ACTIVITIES $ (3,426,242) $ (6,164,655) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from sale of shares $ 1,746,029 $ 2,101,871 Proceeds from investment certificates issued 1,471,889 769,668 Proceeds from mortgages payable 650,000 3,900,000 Proceeds from short-term lines of credit 400,000 0 Proceeds from sale of minority interest 0 0 Repurchase of shares (386,062) (400,227) Dividends paid (531,683) (473,903) Redemption of invest. certificates (182,517) (132,961) Principal payments on mortgage loans (766,873) (1,545,869) Payments on short-term lines of credit (400,000) 0 ------------ ------------ NET CASH PROVIDED FROM FINANCING ACTIVITIES $ 2,000,783 $ 4,218,579 ------------ ------------ NET INCREASE (DECREASE) IN CASH $ 1,044,243 $ (376,788) CASH AT APRIL 30 $ 1,718,257 $ 2,714,552 ------------ ------------ CASH AT JULY 31 $ 2,762,500 $ 2,337,764 ------------ ------------
SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES 1997 1996 ---- ---- Dividends reinvested $ 995,407 $ 839,350 Real estate investment and mortgage loans receivable acquired through assumption of mortgage loans payable and accrual of costs 650,000 0 Mortgage loan receivable transferred to property owned 0 0 Proceeds from sale of properties deposited directly with escrow agent 0 0 Mortgages paid directly by owner of contract 0 0 Interest reinvested directly in investment certificates 32,173 18,885 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the year for: Interest paid on mortgages $ 2,310,822 $ 1,478,051 0 0 Interest paid on investment certificates 53,744 32,815 ----------- ----------- $ 2,364,566 $ 2,369,101 ----------- -----------
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. RESULTS OF OPERATIONS. Funds from Operations for the first three months of Fiscal 1998 increased to $1,993,082, compared to $1,668,467 generated in the same period of the prior fiscal year. On a per share basis, Funds from Operations increased to 13 cents per share, compared to 12 cents for the prior year. Funds from Operations is regarded as the appropriate measure of performance for Real Estate Investment Trusts. Operating income declined slightly to $894,044 for the first quarter compared to $978,107 earned in the same period last year. The first quarter saw a spike in our vacancy rate for apartment properties. We are pleased to report that this was a temporary phenomena and that our vacancy rate has declined to a normal level during the second quarter. We look forward to improving results for the remainder of the current fiscal year. In particular, the second quarter will see a substantial recognition of capital gain income resulting from the sale of two properties - a Superpumper convenience store in Bottineau, North Dakota (approximate $83,500 gain) and the sale of a 48-unit apartment complex in Scottsbluff, Nebraska (gain of approximately $325,000). We continue to be optimistic about our portfolio. We are encouraged by the recent improvement in occupany rates and the acceptance of the new apartments we are constructing in Billings, Bismarck and Grand Forks. SALE OF PROPERTIES. During the first quarter of Fiscal 1998, IRET sold the Superpumper convenience store in Newtown, North Dakota, realizing a gain of $39,000. During the second quarter of the current fiscal year, two other sales will be reported - another Superpumper convenience store in Bottineau, North Dakota (gain of $83,500) and the sale of a 48-unit apartment complex in Scottsbluff, Nebraska (gain of $325,000). PORTFOLIO ACQUISITIONS. Construction continues on 67-unit apartment buildings in Billings, Montana, and Grand Forks and Bismarck, North Dakota. In addition, IRET has acquired the Edgewood Vista Retirement Home in Minot, North Dakota, and Sweetwater Springs Retirement Home in Douglasville, Georgia. The total investments during the second quarter in new properties total $4,375,000. We anticipate the addition of a substantial amount of additional properties during the second quarter, including a merger with Jenner Properties which will add 125 apartment units to the IRET portfolio, and the purchase of the Kirkwood Manor Apartment project in Bismarck which will add an additional 108 apartment units. FINANCIAL CONDITION. IRET's financial condition continues to be very strong. The July 31, 1997, balance sheet shows cash and marketable securities of $7,422,261, compared to the $7,144,238 on hand a year earlier. Total assets increased to $189,544,096 from the July 31, 1996, total of $135,948,160. Liabilities increased to $127,730,633 versus the year earlier figure of $82,724,842. Shareholder equity increased to $61,814,465, from $53,223,317 on July 31, 1996. 07/31/97 07/31/96 -------- -------- Cash and Marketable Securities $ 7,422,261 $ 7,144,238 Net Real Estate Owned 178,020,443 123,075,291 Net Real Estate Mortgages 1,787,930 2,902,306 Total Assets 189,544,095 135,948,160 Total Liabilities 127,730,633 82,724,842 Shareholder Equity 61,814,462 53,223,317
CONSOLIDATED FINANCIAL REPORTS. The Financial Statements shown in this report consolidate IRET's financial report with those of the six limited partnerships of which IRET is the General Partner and creditor. DIVIDENDS. IRET paid a regular dividend of 10.125 cents per share on July 1, 1997, to shareholders of record at the close of business on June 18, 1997. This was an increase from the 10.0 cents per share dividend paid on April 1, 1997, and was the 105th 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) /s/ Thomas A. Wentz, Sr. Date: September 12, 1997 By______________________________ Thomas A. Wentz, Sr., Vice-President EX-27 2
5 3-MOS APR-30-1998 JUL-31-1997 2,762,500 4,659,761 1,940,621 (124,881) 0 2,285,651 196,009,759 (17,989,316) 189,544,095 2,603,709 125,126,924 67,444,949 0 0 (5,631,487) 189,544,095 0 7,183,761 0 2,310,822 1,099,031 0 2,879,864 894,044 0 894,044 39,069 (7) 0 933,106 .06 0
-----END PRIVACY-ENHANCED MESSAGE-----