Independence Realty Trust Announces Fourth Quarter and Fiscal 2014 Financial Results

PHILADELPHIA--()--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:

Property Name   Location   Acquisition
Date
  Year
Built or
Renovated(1)
  Units (2)  

Physical
Occupancy (3)

 

Average Monthly
Effective
Rent per
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.

Consolidated Statements of Operations

(Dollars in thousands, except share and per share information)

(unaudited)

 

For the Three-Month
Period Ended
December 31

For the Year
Ended
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  
 

Independence Realty Trust, Inc.

Consolidated Balance Sheets

(Dollars in thousands, except share and per share information)

(unaudited)

   
As of

December 31,

2014

  As of

December 31,

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  

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.

Contacts

Independence Realty Trust, Inc.
Andres Viroslav, 215-243-9000
aviroslav@irtreit.com

Contacts

Independence Realty Trust, Inc.
Andres Viroslav, 215-243-9000
aviroslav@irtreit.com