<PAGE>
AMENDED
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 ______
<PAGE>
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.
<PAGE>
BALANCE SHEETS
For the Periods Ended October 31, 1995 & 1994
(unaudited)
<TABLE>
<CAPTION>
ASSETS: 10-31-95 10-31-94
<S> <C> <C>
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
</TABLE>
<PAGE>
STATEMENT OF OPERATIONS
For the Three- and Six-Month Periods Ended October 31,
1995 and 1994
(unaudited)
<TABLE>
<CAPTION>
3 Months Ended 6 Months Ended
October 31 October 31
OPERATING INCOME: 1995 1994 1995 1994
<S> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX-MONTH PERIODS ENDED OCTOBER 31, 1995, AND 1994
(unaudited)
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES 1995 1994
<S> <C> <C>
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
</TABLE>
<PAGE>
SUPPLEMENTARY SCHEDULE OF NON-CASH
<TABLE>
<CAPTION>
INVESTING AND FINANCING ACTIVITIES 1995 1994
<S> <C> <C>
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
</TABLE>
(The balance of this page was left blank intentionally.)
<PAGE>
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
<PAGE>
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:
<TABLE>
<CAPTION>
10/31/95 10/31/94
<S> <C> <C>
Cash and Marketable Securities $ 5,362,217 $10,343,603
Net Real Estate Owned 109,426,978 59,675,391
Net Real Estate Mortgages 2,932,478 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
</TABLE>
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.
<PAGE>
The following new investments were added to our portfolio
during the second quarter and are producing income:
- South Pointe Phase 1, Minot, ND
Cost: $4,600,000
Units: 98
- North Pointe, Bismarck, ND
Cost: $2,250,000
Units: 49
- Southwinds, Grand Forks, ND
Cost: $5,400,000
Units: 164
The following properties are under construction:
- 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.
<PAGE>
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 14, 1995 By_______________________________
Thomas A. Wentz, Vice-President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> OCT-31-1995
<CASH> 746,787
<SECURITIES> 4,615,430
<RECEIVABLES> 3,454,227
<ALLOWANCES> (521,749)
<INVENTORY> 0
<CURRENT-ASSETS> 1,592,306
<PP&E> 123,515,461
<DEPRECIATION> (14,088,483)
<TOTAL-ASSETS> 119,313,979
<CURRENT-LIABILITIES> 4,302,183
<BONDS> 5,440,733
<COMMON> 47,142,109
0
0
<OTHER-SE> (3,525,300)
<TOTAL-LIABILITY-AND-EQUITY> 119,313,979
<SALES> 0
<TOTAL-REVENUES> 8,497,247
<CGS> 0
<TOTAL-COSTS> 3,929,231
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,500,412
<INCOME-PRETAX> 2,067,604
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,067,604
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,067,604
<EPS-PRIMARY> .18
<EPS-DILUTED> 0
</TABLE>
