IRET Announces Second Quarter Fiscal 2019 Results

MINNEAPOLIS, Dec. 10, 2018 /PRNewswire/ -- IRET (NYSE: IRET) announced today its second quarter fiscal 2019 financial and operating results.  Net income and Funds from Operations ("FFO") per share for the three and six months ended October 31, 2018, are detailed below.  Core FFO adjusts FFO for certain non-routine items, and both FFO and Core FFO are reconciled to net income in the tables accompanying this earnings release.

"We continue to execute our plan, and 8.7% same-store NOI growth reflects the value of our operations focus and our drive to improve our portfolio and markets," said Mark O. Decker Jr., IRET's President and CEO.

Second Quarter Fiscal Year 2019 Highlights

• Same-store NOI grew by 8.7%, our fourth consecutive quarter of year-over-year NOI growth. NOI expansion has been driven by revenue growth and expense control initiatives;
• Same-store revenue increased year-over-year by 3.6%, driven by growth in rental revenue;
• Same-store expenses decreased by 2.4% from the prior year due to several cost containment initiatives undertaken by our operations team and a reduction in insurance claim losses; and
• Continued the disposition of non-multifamily properties.

DispositionsDuring the quarter, we sold one commercial property and one parcel of land for a total sale price of $3.1 million.

Subsequent to quarter-end, we disposed of our Minot Arrowhead commercial property for a total sale price of $6.6 million.  Following this sale, we have only five remaining non-multifamily properties, representing less than 2.0% of NOI, in our portfolio.

Balance SheetDuring the quarter, we amended our line of credit to:

• increase the overall unsecured facility from $370 million to $395 million, reallocating the commitment for the revolving line of credit to $250 million and the remaining $145 million between two term loans;
• extend the maturity of the revolving line of credit to August 2022;
• extend the existing $70 million unsecured term loan maturity to January 2024; and
• add a new $75 million, 7-year unsecured term loan maturing in August 2025 that bears interest at a spread over LIBOR based on IRET's overall leverage.

Under the amendment, the interest rate on the existing facilities decreased by 25-35 basis points depending on IRET's overall leverage. IRET also entered into a swap agreement for the entire $75 million and full term of the new unsecured 7-year term loan in its ongoing effort to reduce floating interest rate exposure.

On September 10, 2018, we entered into a swap agreement covering the extension of the $70 million term loan from January 2023 to January 2024, resulting in both term loans being covered by swap agreements for the duration of the terms.

At the end of the second quarter, we had $195.3 million of total liquidity on our balance sheet, including $176.5 million available on our corporate revolver and $6.0 million on our operating line of credit.

Quarterly DistributionsOn September 5, 2018, IRET's Board of Trustees declared a regular quarterly distribution of $0.07 per share/unit payable on October 1, 2018, to common shareholders and unitholders of record on September 17, 2018.  This distribution was the 190th consecutive quarterly distribution paid by IRET since the inception of our dividends in 1971. It represents an annualized rate of $0.28 per share/unit.

On September 5, 2018, 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 October 1, 2018, to holders of record on September 17, 2018.  Series C preferred share distributions are cumulative and payable quarterly in arrears at an annual rate of $1.65625 per share.

Earnings Call

Supplemental InformationSupplemental Operating and Financial Data for the Quarter ended October 31, 2018 ("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.  Non-GAAP financial 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 IRETIRET is a real estate company focused on the ownership, management, acquisition, redevelopment, and development of apartment communities. As of October 31, 2018, we owned interests in 87 apartment communities consisting of 13,702 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 StatementsCertain statements in this press release are based on our current expectations and assumptions, and are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future.  Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," and variations of those words and similar expressions are intended to identify forward-looking statements.  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.  Any statements contained herein that are not statements of historical fact should be deemed forward-looking statements.  As a result, reliance should not be placed on these forward-looking statements as these statements are subject to known and unknown risks, uncertainties, and other factors beyond our control and could differ materially from our actual results and performance.  Such risks and uncertainties are detailed from time to time in our filings with the SEC, including the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" contained in our Annual Report on Form 10-K for the fiscal year ended April 30, 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: Jonathan Bishop 701-837-7104 [email protected]

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SOURCE IRET