PHILADELPHIA, PA — February 25, 2015 — Independence Realty Trust, Inc. (“IRT”) (NYSE MKT: IRT) today announced its fourth quarter and fiscal 2014 financial results.
Highlights
•
Core funds from operations (“CFFO”) increased 147% to $4.7 million for the quarter ended December 31, 2014 from $1.9 million for the quarter ended December 31, 2013.
•
CFFO per share was $0.17 for the quarter ended December 31, 2014 and $0.68 for the year ended December 31, 2014.
•
Total revenues grew 183% to $16.4 million for the quarter ended December 31, 2014 from $5.8 million for the quarter ended December 31, 2013.
•
Operating income increased 146% to $3.2 million for the quarter ended December 31, 2014 from $1.3 million for the quarter ended December 31, 2013.
•
Investments in real estate, at cost, increased 263% to $689 million at December 31, 2014 from $190 million at December 31, 2013.
•
IRT acquired 8 properties totaling 2,349 units for purchase prices totaling $246.7 million during the quarter ended December 31, 2014. IRT acquired 20 properties totaling 6,029 units for purchase prices totaling $497.1 million during the year ended December 31, 2014.
•
IRT declared monthly common stock dividends of $0.06 per share for a total of $0.72 of common dividends declared during 2014.
•
On November 25, 2014, IRT completed its underwritten public offering selling 6,000,000 shares of IRT common stock for $9.60 per share raising gross proceeds of $57.6 million.
Financial Results
IRT reported CFFO, a non-GAAP financial measure, of $4.7 million for the three-month period ended December 31, 2014, or $0.17 per share — diluted based on 28.6 million weighted-average shares outstanding – diluted, as compared to CFFO for the three-month period ended December 31, 2013 of $1.9 million, or $0.20 per share – diluted based on 9.6 million weighted-average shares outstanding – diluted. IRT reported net income allocable to common stock for the three-month period ended December 31, 2014 of $0.2 million, or $0.01 per share — diluted based on 28.6 million weighted-average shares outstanding – diluted, as compared to net income allocable to common stock for the three-month period ended December 31, 2013 of $0.3 million, or $0.03 per share – diluted based on 9.6 million weighted-average shares outstanding – diluted.
IRT reported CFFO for the year ended December 31, 2014 of $14.6 million, or $0.68 per share - diluted based on 21.5 million weighted-average shares outstanding – diluted, as compared to CFFO for the year ended December 31, 2013 of $5.8 million, or $0.81 per share – diluted based on 7.2 million weighted-average shares outstanding – diluted, which includes limited partnership units. IRT reported a net income allocable to common stock for the year ended December 31, 2014 of $2.9 million, or $0.14 per share — diluted based on 21.5 million weighted-average shares outstanding – diluted, as compared to net income allocable to common stock for the year ended December 31, 2013 of $0.6 million, or $0.12 per share – diluted based on 5.3 million weighted-average shares outstanding – diluted.
A reconciliation of IRT’s reported net income (loss) to its funds from operations (“FFO”) and CFFO is included as Schedule I to this release. Schedule I also includes management’s rationale for the usefulness of each of these non-GAAP financial measures.
Distributions
On January 19, 2015, IRT’s Board of Directors declared monthly cash dividends for the first quarter of 2015 on IRT’s shares of common stock in the amount of $0.06 per share per month. The monthly dividends total $0.18 per share for the first quarter. The month for which each dividend was declared is set forth below, with the relevant amount per share, record date and payment date set forth opposite the month:
Month
Amount
Record Date
Payment Date
January 2015
$
0.06
01/30/2015
02/17/2015
February 2015
$
0.06
02/27/2015
03/16/2015
March 2015
$
0.06
03/31/2015
04/15/2015
Key Statistics (Unaudited and dollars in thousands, except per share and per unit information)
As of or For the Three-Month Periods Ended
December 31, 2014
September 30, 2014
June 30, 2014
March 31, 2014
December 31, 2013
Financial Statistics:
Total revenue
$
16,362
$
13,057
$
11,649
$
8,135
$
5,768
Earnings (loss) per share-diluted
$
0.01
$
(0.00
)
$
(0.01
)
$
0.19
$
0.03
Funds from Operations (“FFO”) per share
$
0.14
$
0.14
$
0.18
$
0.33
$
0.17
Core funds from operations (“CFFO”) per share
$
0.17
$
0.17
$
0.19
$
0.17
$
0.20
Dividends declared per common share
$
0.18
$
0.18
$
0.18
$
0.18
$
0.16
Total Shares Outstanding
31,800,076
25,801,540
17,751,540
17,742,540
9,652,540
Apartment Property Portfolio:
Reported investments in real estate at cost
$
689,112
$
444,050
$
362,323
$
320,437
$
190,096
Net operating income
$
8,660
$
6,905
$
6,064
$
4,147
$
3,159
Number of properties owned
30
22
19
17
10
Multifamily units owned
8,819
6,470
5,342
4,970
2,790
Portfolio weighted average occupancy
92.7
%
92.6
%
93.1
%
93.9
%
94.6
%
Same store portfolio weighted average occupancy
94.5
%
93.8
%
95.4
%
95.4
%
94.4
%
Weighted average monthly effective rent per unit (1)
$
788
$
791
$
764
$
730
$
765
Same Store weighted average monthly effective rent per unit
$
790
$
778
$
766
$
762
$
760
(1)
Weighted average monthly effective rent per occupied unit represents the average monthly rent collected for all occupied units after giving effect to tenant concessions. We do not report average effective rent per unit in the month of acquisition as it is not representative of a full month of operations.
Properties
The following table presents an overview of our apartment portfolio as of December 31, 2014:
Average Monthly
Year
Effective
Acquisition
Built or
Physical
Rent per
Property Name
Location
Date
Renovated(1)
Units(2)
Occupancy(3)
Occupied Unit(4)
Belle Creek
Henderson, CO
4/29/2011
2011
162(5)
92.6%
$1,074
Copper Mill
Austin, TX
4/29/2011
2010
320
98.4
%
831
Crestmont
Marietta, GA
4/29/2011
2010
228
94.7
%
755
Cumberland Glen
Smyrna, GA
4/29/2011
2010
222
96.4
%
719
Heritage Trace
Newport News, VA
4/29/2011
2010
200
90.5
%
683
Tresa at Arrowhead
Phoenix, AZ
4/29/2011
2006
360
96.4
%
849
Centrepoint
Tucson, AZ
12/16/2011
2006
320
96.3
%
827
Runaway Bay
Indianapolis, IN
10/11/2012
2002
192
92.7
%
934
Berkshire Square
Indianapolis, IN
9/19/2013
2012
354
90.1
%
581
The Crossings
Jackson, MS
11/22/2013
2006
432
85.7
%
757
Reserve at Eagle Ridge
Waukegan, IL
1/31/2014
2008
370
92.7
%
929
Windrush
Edmond, OK
2/28/2014
2011
160
93.8
%
788
Heritage Park
Oklahoma City, OK
2/28/2014
2011
453
88.3
%
635
Raindance
Oklahoma City, OK
2/28/2014
2011
504
92.7
%
533
Augusta
Oklahoma City, OK
2/28/2014
2011
197
93.4
%
721
Invitational
Oklahoma City, OK
2/28/2014
2011
344
91.6
%
670
King’s Landing
Creve Coeur, MO
3/31/2014
2005
152
85.2
%
1,435
Carrington Park
Little Rock, AR
5/07/2014
1999
202
97.0
%
985
Arbors at the Reservoir
Ridgeland, MS
6/04/2014
2000
170
95.9
%
1,079
Walnut Hill
Cordova, TN
8/28/2014
2001
360
92.8
%
900
Lenoxplace
Raleigh, NC
9/05/2014
2012
268
92.5
%
834
Stonebridge
Cordova, TN
9/15/2014
1994
500
92.2
%
735
Bennington Pond
Groveport, OH
11/24/2014
2000
240
96.3
%
781
Prospect Park
Louisville, KY
12/08/2014
1990
138
89.9
%
— (6)
Brookside
Louisville, KY
12/08/2014
1987
224
95.1
%
— (6)
Jamestown
Louisville, KY
12/08/2014
1970
355
92.4
%
— (6)
Meadows
Louisville, KY
12/08/2014
1988
400
92.5
%
— (6)
Oxmoor
Louisville, KY
12/08/2014
1999-2000
432
90.3
%
— (6)
Stonebridge at the Ranch
Little Rock, AR
12/16/2014
2005
260
95.0%
— (6)
Iron Rock Ranch
Austin, TX
12/30/2014
2001-2002
300
96.0
%
— (6)
Total/Weighted Average.
8,819
92.7
%
$
788
(1)
All dates are for the year in which a significant renovation program was completed, except for Runaway Bay, Arbors at the Reservoir, King’s Landing, Walnut Hill, Stonebridge, Bennington Pond, Prospect Park, Brookside, Jamestown, Meadows, Oxmoor, Stonebridge at the Ranch and Iron Rock Ranch which is the year construction was completed.
(2)
Units represent the total number of apartment units available for rent at December 31, 2014.
(3)
Physical occupancy for each of our properties is calculated as (i) total units rented as of December 31, 2014 divided by (ii) total units available as of December 31, 2014, expressed as a percentage.
(4)
Average monthly effective rent per occupied unit represents the average monthly rent for all occupied units for the three-month period ended December 31, 2014.
(5)
Includes 6,256 square feet of retail space in six units, of which 1,010 square feet of space is occupied by RAIT Residential for use as the leasing office. The remaining 5,246 square feet of space is 86% occupied by four tenants with an average monthly base rent of $1,623, or $16 per square foot per year. These four tenants are principally engaged in the following businesses: grocery, retail and various retail services.
(6)
We do not report average effective rent per unit in the month of acquisition as it is not representative of a full month of operations.
Conference Call
All interested parties can listen to the live conference call webcast at 9:00 AM ET on
Wednesday, February 25, 2015 from the investor relations section of the IRT website at www.irtreit.com or by dialing 1.877.415.3184, access code 82961401. For those who are not available to listen to the live call, the replay will be available shortly following the live call on IRT’s website and telephonically until Wednesday, March 4, 2015, by dialing 888.286.8010, access code 76638151.
About Independence Realty Trust, Inc.
Independence Realty Trust, Inc. (NYSE MKT: IRT) is a real estate investment trust that seeks to own well-located apartment properties in geographic submarkets that it believes support strong occupancy and the potential for growth in rental rates. IRT seeks to provide stockholders with attractive risk-adjusted returns, with an emphasis on distributions and capital appreciation. IRT is externally advised by a wholly-owned subsidiary of RAIT Financial Trust (NYSE: RAS).
Forward-Looking Statements
This press release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “trend”, “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “seek” or other similar words. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to, those disclosed in IRT’s filings with the Securities and Exchange Commission. IRT undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.
Independence Realty Trust, Inc. Contact Andres Viroslav 215.243.9000 aviroslav@irtreit.com
1
Independence Realty Trust, Inc. Consolidated Statements of Operations (Dollars in thousands, except share and per share information) (unaudited)
For the Three-Month
For the Year
Period Ended
Ended
December 31
December 31
2014
2013
2014
2013
Revenues:
Rental income
$
14,996
$
5,188
$
44,834
$
17,843
Tenant reimbursement income
617
275
1,924
943
Other income
749
305
2,445
1,157
Total revenue
16,362
5,768
49,203
19,943
Expenses:
Property operating expenses
7,702
2,609
23,427
9,429
General and administrative expenses
343
274
1,137
648
Asset management fees
644
107
1,736
272
Acquisition expenses
641
198
1,842
248
Depreciation and amortization
3,856
1,306
12,520
4,413
Total expenses
13,186
4,494
40,662
15,010
Operating income
3,176
1,274
8,541
4,933
Interest expense
(2,986
)
(966
)
(8,496
)
(3,659
)
Interest income
5
—
17
—
Gain (loss) on assets
—
—
2,882
—
Net income (loss):
195
308
2,944
1,274
(Income) loss allocated to preferred stock
—
—
—
(10
)
(Income) loss allocated to non-controlling interests
(6
)
—
(4
)
(649
)
Net income (loss) allocable to common stock
$
189
$
308
$
2,940
$
615
Earnings (loss) per share:
Basic
$
0.01
$
0.03
$
0.14
$
0.12
Diluted
$
0.01
$
0.03
$
0.14
$
0.12
Weighted-average shares:
Basic
28,174,568
9,649,801
21,315,928
5,330,814
Diluted
28,578,949
9,649,801
21,532,671
5,330,814
2
Independence Realty Trust, Inc. Consolidated Balance Sheets (Dollars in thousands, except share and per share information) (unaudited)
As of
As of
December 31,
December 31,
2014
2013
Assets:
Investments in real estate:
Investments in real estate at cost
$
689,112
$
190,096
Accumulated depreciation
(23,376
)
(15,775
)
Investments in real estate, net
665,736
174,321
Cash and cash equivalents
14,763
3,334
Restricted cash
5,206
1,122
Accounts receivable and other assets
2,270
1,731
Intangible assets, net of accumulated amortization of $4,346 and $569, respectively
3,251
517
Deferred costs, net of accumulated amortization of $505 and $151, respectively
2,924
846
Total assets
$
694,150
$
181,871
Liabilities and Equity:
Indebtedness
$
418,901
$
103,303
Accounts payable and accrued expenses
8,353
2,374
Accrued interest payable
49
63
Dividends payable
1,982
515
Other liabilities
1,831
708
Total liabilities
431,116
106,963
Equity:
Stockholders’ equity:
—
—
Preferred stock, $0.01 par value; 50,000,000 shares authorized, 0 and 0 shares issued and outstanding, respectively
Common stock, $0.01 par value; 300,000,000 shares authorized, 31,800,076 and 9,652,540 shares issued and outstanding, including 36,000 unvested restricted common stock awards as of December 31, 2014
318
96
Additional paid-in capital
267,683
78,112
Retained earnings (accumulated deficit)
(16,728
)
(3,300
)
Total shareholders’ equity
251,273
74,908
Non-controlling interests
11,761
—
Total Equity
263,034
74,908
Total liabilities and equity
$
694,150
$
181,871
3
Schedule I Independence Realty Trust, Inc. Reconciliation of Net income (loss) Allocable to Common Stock and Funds From Operations (“FFO”) and Core Funds From Operations (“CFFO”) (1) (Dollars in thousands, except share and per share amounts) (unaudited)
For the Three-Month Period Ended
December 31,
For the Year Ended December 31,
2014
2013
2014
2013
Amount
Per Share (2)
Amount
Per Share (3)
Amount
Per Share (2)
Amount
Per Share (3)
Funds From Operations:
Net income (loss)
$
195
$
0.01
$
308
$
0.03
$
2,944
$
0.14
$
1,274
$
0.18
Adjustments:
Income allocated to preferred shares
—
—
—
(0.00
)
—
—
(10
)
0.00
Income allocated to preferred units
(6
)
(0.00
)
—
(0.00
)
(4
)
0.00
(220
)
(0.03
)
Real estate depreciation and amortization
3,856
0.13
1,306
0.14
12,520
0.58
4,413
0.61
Funds From Operations
$
4,045
$
0.14
$
1,614
$
0.17
$
15,460
$
0.72
$
5,457
$
0.76
Core Funds From Operations:
Funds From Operations
$
4,045
$
0.14
$
1,614
$
0.17
$
15,460
$
0.72
$
5,457
$
0.76
Adjustments:
Acquisition fees and expenses
641
0.03
198
0.02
1,842
0.09
248
0.04
Equity based compensation
32
0.00
77
0.01
206
0.01
77
0.01
(Gains) losses on assets
—
—
—
—
(2,882
)
(0.13
)
—
—
Core Funds From Operations
$
4,718
$
0.17
$
1,889
$
0.20
$
14,626
$
0.68
$
5,782
$
0.81
(1)
IRT believes that FFO and Core FFO, each of which is a non-GAAP measure, are additional appropriate measures of the operating performance of a REIT and IRT in particular. IRT computes FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT, as net income or loss allocated to common stock (computed in accordance with GAAP), excluding real estate-related depreciation and amortization expense, gains or losses on sales of real estate and the cumulative effect of changes in accounting principles.
Core FFO is a computation made by analysts and investors to measure a real estate company’s operating performance by removing the effect of items that do not reflect ongoing property operations, including acquisition expenses, expensed costs related to the issuance of shares of our common stock, gains or losses on real estate transactions and equity-based compensation expenses, from the determination of FFO. IRT incurs acquisition expenses in connection with acquisitions of real estate properties and expenses those costs when incurred in accordance with U.S. GAAP. As these expenses are one-time and reflective of investing activities rather than operating performance, IRT adds back these costs to FFO in determining Core FFO.
IRT’s calculation of Core FFO differs from the methodology used for calculating Core FFO by certain other REITs and, accordingly, IRT’s Core FFO may not be comparable to Core FFO reported by other REITs. IRT’s management utilizes FFO and Core FFO as measures of IRT’s operating performance, and believes they are also useful to investors, because they facilitate an understanding of IRT’s operating performance after adjustment for certain non-cash items, such as depreciation and amortization expenses, and acquisition expenses and pursuit costs that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and that may not accurately compare IRT’s operating performance between periods. Furthermore, although FFO, Core FFO and other supplemental performance measures are defined in various ways throughout the REIT industry, IRT also believes that FFO and Core FFO may provide IRT and our investors with an additional useful measure to compare IRT’s financial performance to certain other REITs. IRT also uses Core FFO for purposes of determining the quarterly incentive fee, if any, payable to our advisor beginning with the second quarter of 2013.Neither FFO nor Core FFO is equivalent to net income or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO and Core FFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Neither FFO nor Core FFO should be considered as an alternative to net income as an indicator of IRT’s operating performance or as an alternative to cash flow from operating activities as a measure of IRT’s liquidity.
(2)
Based on 28,578,949 and 21,532,671 weighted-average shares outstanding-diluted for the three-month period and year ended December 31, 2014.
(3)
Based on 9,649,801 and 7,151,738 weighted-average shares outstanding-diluted for the three-month period and year ended December 31, 2013. Weighted-average shares include 5,274,900 limited partnership units that were exchanged for common stock on May, 2013.
4
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