-----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, HY1KHQVFbxh6T+dLpMldepAxeGdtZJB50NPYuGnmBjEIAeZ74r/nLM3y3z+UEg0o RCjbN/qYfU/AHQ5bGRVwOw== 0000798359-99-000019.txt : 19990913 0000798359-99-000019.hdr.sgml : 19990913 ACCESSION NUMBER: 0000798359-99-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990731 FILED AS OF DATE: 19990910 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: 99709121 BUSINESS ADDRESS: STREET 1: 12 S MAIN CITY: MINOT STATE: ND ZIP: 58701 BUSINESS PHONE: 7018374738 MAIL ADDRESS: STREET 1: 12 S MAIN CITY: MINOT STATE: ND ZIP: 58701 10-Q 1 1ST QUARTER FISCAL 2000 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, 1999 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. Registrant is a North Dakota Real Estate Investment Trust. As of July 31, 1999, it had 19,923,692 Shares of Beneficial Interest outstanding. PART I Item 1. Financial Statements. The accompanying condensed consolidated financial statements have been prepared from the records of Investors Real Estate Trust and its subsidiaries (collectively, the "Company"), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, all adjustments necessary (of a normal recurring nature only) to present fairly the financial position of the Company as of July 31, 1999, and results of operations and cash flows for the stated periods have been included. The Condensed Consolidated Balance Sheet at April 30, 1999, contained herein, was derived from audited financial statements, but does not include all disclosures included in the 1999 Annual Report and applicable under generally accepted accounting principles. Certain information and footnote disclosures normally included in interim financial statements prepared in accordance with generally accepted accounting principles have been omitted. The results of operations for the three months ended July 31, 1999, are not necessarily indicative of operating results for the entire year. BALANCE SHEETS (unaudited) ASSETS: 07-31-99 04-30-99 -------- -------- Cash $ 5,071,067 $ 3,713,053 Marketable Securities - GNMA's - held to maturity 2,908,156 2,964,434 - Other REIT's - available for sale 689,111 734,749 Accounts Receivable 248,443 77,438 Tax & Insurance Escrow 2,167,530 1,761,195 Deferred Charges 1,844,868 1,413,752 Prepaid Insurance 107,429 216,348 Real Estate Deposits 836,300 300,900 ---------- ---------- $ 13,872,902 $ 11,181,869 ========== ========== Real Estate Investments Real Estate Owned $332,384,703 $295,825,839 Less Accumulated Depreciation (27,593,926) (26,112,399) ----------- ----------- Net Real Estate Owned 304,790,777 269,713,440 ----------- ----------- Real Estate Mortgages 1,535,783 10,721,214 Less Unearned Discounts & Allowances (122,836) (123,212) ----------- ----------- Net Mortgages & Contracts 1,412,947 10,598,002 ----------- ----------- Total Real Estate Investments $306,203,725 $280,311,442 ----------- ----------- TOTAL ASSETS $320,076,627 $291,493,311 =========== =========== LIABILITIES: Accounts Payable & Accrued Expenses $ 3,581,428 $ 4,388,270 Due on Credit Line 0 0 Mortgages Payable 191,282,163 175,071,069 Investment Certificates Payable 12,530,595 11,770,136 ----------- ----------- TOTAL LIABILITIES $207,394,186 $191,229,475 ----------- ----------- Minority Interest in Operating Ptnrshp $ 21,231,911 $ 14,480,542 ----------- ----------- SHAREHOLDERS' EQUITY Shares of Beneficial Interest Outstanding Shares of 07-31-99 04-30-99 -------- -------- 19,923,692 on 07/31/99 19,066,954 on 04/30/99 $ 99,396,963 $ 93,095,819 Accumulated Distributions in Excess of Net Income (7,844,229) (7,255,958) Unrealized Gain REIT Stock (102,205) (56,567) ----------- ---------- Total Shareholders' Equity $ 91,450,530 $ 85,783,294 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $320,076,627 $291,493,311 =========== =========== (The balance of this page was left blank intentionally.) STATEMENT OF OPERATIONS (unaudited) 3 Months Ended July 31 OPERATING INCOME: 1999 1998 ---- ---- Real Estate Rentals $10,808,522 $8,866,408 Interest Income 377,136 212,150 Mortgage Discount & Fees 16,255 23,720 ---------- --------- $11,201,913 $ 9,102,278 ========== ========= OPERATING EXPENSE: Interest $ 3,441,156 $ 2,816,108 Utilities & Maintenance 1,736,997 1,505,146 Property Management 897,038 779,825 Taxes & Insurance 1,109,133 1,005,570 Advisory & Trustees Fees 254,442 195,178 Operating Expenses 177,141 63,358 ---------- ---------- $ 7,615,907 $ 6,365,186 ========== ========== OPERATING INCOME: (before reserves) $ 3,586,006 $ 2,737,092 ---------- ---------- DEPRECIATION/AMORTIZATION (1,784,684) (1,409,241) ---------- ---------- OPERATING INCOME (after reserves) 1,801,322 $ 1,327,851 GAIN ON SALE OF INVESTMENTS 257,895 366,017 MINORITY INTEREST PORTION OF OPERATING PARTNERSHIP NET INCOME (235,935) (133,863) ---------- ---------- NET TAXABLE INCOME $ 1,823,282 $ 1,560,005 ---------- ---------- FUNDS FROM OPERATIONS: * Operating Income $ 1,801,322 $ 1,327,851 Plus Depreciation and Amortization 1,784,684 1,409,241 Minus Minority Interest Portion of Operating Partnership Net Income (235,935) (133,863) ---------- ---------- FUNDS FROM OPERATIONS $ 3,350,071 $ 2,603,229 ---------- ---------- PER SHARE: Operating Income (after reserves) .09 .08 Gain on Sale of Investments .01 .02 --------- --------- Total Taxable Income/Share .10 .10 --------- --------- FUNDS FROM OPERATIONS * .17 .16 --------- --------- DIVIDENDS PAID PER SHARE .12 .11 --------- --------- Average Number of Shares Outstanding 19,495,323 16,579,390 ---------- ---------- * Funds from Operations is defined as income before gains (losses) on sales of investments, less minority interest 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, 1999 AND 1998 (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES 1999 1998 ---- ---- Net Income $1,823,282 $1,560,006 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,741,018 1,409,241 Minority interest portion of operating partnership income 235,935 133,863 Accretion of discount on contracts (376) (667) Gain on Sale of Properties (257,895) (366,017) Interest reinvested in investment certificates 114,313 97,029 Changes in other assets and liabilities: (Increase) decrease in real estate deposits (535,400) (71,250) (Increase) decrease in other assets (62,086) 122,428 (Increase) decrease in tax and insurance escrow (406,335) (443,690) (Increase) decrease in deferred charges (431,115) (122,535) Increase (decrease) in accounts payable and accrued expense 358,537 264,943 --------- ---------- NET CASH PROVIDED FROM OPERATING ACTIVITIES $2,579,879 $2,583,351 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from maturity of marketable securities held to maturity $ 56,278 $ 82,656 Principle payments on mortgage loans receivable 11,836 64,672 Proceeds from sale of property 0 892,349 Payments for acquisition and improvements of properties (11,465,189) (7,422,457) Purchase of marketable securities available for sale 0 0 Investment in mortgage loans receivable 0 0 ---------- --------- NET CASH USED FOR INVESTING ACTIVITIES $(11,397,075) $(6,382,780) ---------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from sale of shares $6,070,134 $2,721,085 Proceeds from investment certificates issued 874,236 979,085 Proceeds from mortgages payable 6,995,548 3,769,936 Proceeds from short-term lines of credit 5,800,000 3,000,000 Proceeds from sale of minority interest 1,000 1,848,249 Repurchase of shares/minority interest (1,348,242) (1,389,936) Dividends/Distributions Paid (1,177,749) (761,784) Redemption of investment certificates (228,097) (644,627) Principal payments on mortgage loans (1,011,620) (767,828) Payments on short-term lines of credit (5,800,000) (4,000,000) --------- --------- NET CASH PROVIDED FROM FINANCING ACTIVITIES $10,175,210 $4,754,181 ---------- --------- NET INCREASE (DECREASE) IN CASH $ 1,358,013 $ 954,752 CASH AT APRIL 30 $ 3,713,053 $2,132,220 ---------- --------- CASH AT JULY 31 $ 5,071,067 $3,086,972 ---------- --------- SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES 1999 1998 ---- ---- Dividends reinvested $1,535,640 $1,205,517 Real estate investment and mortgage loans receivable acquired through assumption of mortgage loans payable and accrual of costs 2,122,200 0 Mortgage loan receivable transferred to property owned 0 1,701,308 Proceeds from sale of properties deposited directly with escrow agent 1,271,805 0 Properties acquired through the issuance of minority interest units in the operating partnership 4,400,000 480,525 Interest reinvested directly in investment certificates 114,313 97,029 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the year for: Interest paid on mortgages $3,196,773 $2,511,296 Interest paid on margin account and other 45,097 15,486 Interest paid on investment certificates 77,863 86,742 --------- --------- $3,319,733 $2,613,524 --------- --------- (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 Operation. IRET's First Quarter which ended on July 31, 1999, produced continued good results. Stable occupancy, rent increases, lower interest rates, and good performances by newly acquired properties contributed to satisfactory gains in revenues, operating income, and Funds from Operations. -Funds From Operations. Funds from Operations for the first three months of Fiscal 2000 increased to $3,350,071, from $2,603,229 for the same period of the prior fiscal year, an increase of 29%. On a per share basis, Funds from Operations increased to 17.2 cents from 15.7 cents in the prior year, an increase of nearly 10%. Funds from Operations is the generally accepted measure of performance for Real Estate Investment Trusts. -Operating Income. Operating income increased to $1,801,322 for the First Quarter of Fiscal 2000, compared to $1,327,851 earned in the same period of the prior fiscal year, an increase of 36%. -Capital Gains. Income from the sale of investments declined to $257,895 from the $366,017 gain in the prior fiscal year. This year's gain resulted from the sale of four Superpumper convenience stores. We have entered into sales contracts on smaller apartment properties in Devils Lake and Mandan, ND, and a large commercial property in Sioux Falls, SD, which should close in the second quarter. We are optimistic that the remainder of the current fiscal year will see a continuation of satisfactory operating results. Occupancy rates in our apartment communities continue to be stable. We anticipate good results from the new properties that we are adding to our portfolio. Property Acquisitions. The following properties were acquired by IRET during the First Quarter and are producing income: -78-unit Rimrock West Apartment complex Billings, MT $ 3,750,000 -3 12-unit Alzheimer Care facilities located in Belgrade, MT, Columbus Island, NE, and Grand Island, NE 1,400,000 -168-unit Valley Manor Apartment complex, Grand Forks, ND 4,430,767 -118,397 sq. ft. Maplewood Square retail center (Best Buy & Rainbow Foods as anchor tenants), Rochester, MN 11,800,000 ---------- $21,380,767 ========== Pending Acquisitions. The following are under construction or under purchase contract: -Great Plains Software office building, Fargo, ND $15,000,000 -67-unit apartment building - Cottonwood Lake III, Bismarck, ND 4,200,000 -67-unit apartment building w/underground parking (Legacy by IRET), Grand Forks, ND 4,600,000 -27-unit apartment building (The Meadows by IRET), Jamestown, ND 1,700,000 -67-unit apartment building (Country Meadows II), Billings, MT 4,200,000 -73-unit apartment building & community center (Trail Ridge on 41st by IRET), Rochester, MN 4,750,000 -Edgewood Vista Assisted Living Center, Duluth, MN 4,800,000 -East Grand Forks Convenience Store/Retail Rental East Grand Forks, MN 1,200,000 -520-unit Amli apartment portfolio in Topeka, KS 26,250,000 -270-unit apartment complex (Thomasbrook Apartments), Lincoln, NE 9,500,000 -74,500 sq. ft. office building, Eden Prairie, MN 4,900,000 -1/2 interest in Med Park Strip Center, Grand Forks, ND 2,650,000 ---------- $83,750,000 ========== Financial Condition. IRET's financial condition continues to be very strong. The July 31, 1999, balance sheet shows cash and marketable securities of $8,668,334, compared to the $7,412,236 on hand three months earlier. Total assets increased to $320,076,627 from the April 30, 1999, total of $291,493,311. Liabilities increased to $207,394,186 versus the April 30, 1999, figure of $191,229,475. Shareholder equity increased to $91,450,530 from $85,783,294 on April 30, 1999. Dividends. IRET paid a regular dividend of 12.4 cents per share on July 1, 1999, to shareholders of record at the close of business on June 15, 1999. This was an increase from the 12.25 cents per share dividend paid on April 1, 1999, and was the 113th consecutive quarterly dividend paid by IRET. (The balance of this page was left blank intentionally.) 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. 5/25/99 Sales Report for Best Efforts Offering Of Shares of Beneficial Interest 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 10, 1999 By________________________________ Thomas A. Wentz, Sr.,Vice-President EX-27 2
5 3-MOS APR-30-2000 JUL-31-1999 5,071,067 3,597,267 6,740,353 (122,836) 0 15,285,850 332,384,703 (27,593,926) 320,076,627 24,813,340 203,812,758 0 0 99,396,963 (7,946,434) 320,076,627 0 11,201,913 0 5,959,435 235,935 0 3,441,156 1,565,387 0 1,565,387 257,895 0 0 1,823,282 .10 0
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