Press Release
 

IRET Reports Third Quarter 2020 Financial and Operating Results

Company Release - 11/2/2020 4:30 PM ET

MINNEAPOLIS, Nov. 2, 2020 /PRNewswire/ -- IRET (NYSE: IRET) announced today its financial and operating results for the quarter ended September 30, 2020. The tables below show Net Income, Funds from Operations ("FFO"), and Core FFO, all on a per share basis, for the three and nine months ended September 30, 2020; Same-Store Revenues, Expenses, and Net Operating Income ("NOI") over comparable periods; and Same-Store Weighted-Average Occupancy for the three months ended September 30, 2020, June 30, 2020, and September 30, 2019.



Three Months Ended September 30,


Nine Months Ended September 30,

Per Share


2020


2019


2020


2019

Net Income - diluted


$

1.38



$

2.54



$

0.33



$

2.11


FFO - diluted


$

0.90



$

0.93



$

2.49



$

3.15


Core FFO - diluted


$

0.94



$

0.99



$

2.76



$

2.76


 



Year-Over-Year
Comparison


Sequential
Comparison


YTD Comparison

Same-Store Results


Q3 2020 vs. Q3 2019


Q3 2020 vs. Q2 2020


2020 vs. 2019

Revenues


1.1

%


0.6

%


2.1

%

Expenses


4.6

%


5.7

%


3.6

%

NOI


(1.3)

%


(3.0)

%


1.0

%

 



Three months ended

Same-Store Results


September 30, 2020


June 30, 2020


September 30, 2019

Weighted Average Occupancy


94.4

%


94.6

%


93.5

%











Highlights

  • Net Income was $1.38 per diluted share for the third quarter of 2020, compared to Net Income of $2.54 per diluted share for the same period of 2019;
  • Core FFO increased 3.3% to $0.94 per diluted share for the three months ended September 30, 2020, compared to $0.91 for the three months ended June, 30, 2020. Core FFO for the nine months ended September, 30, 2020 remains unchanged compared to the same period of 2019;
  • Total collections were 98.8% of expected residential revenue for the third quarter of 2020, compared to 99.6% for the same period of 2019 and 99.1% for second quarter 2020;
  • Physical occupancy for same-store communities was 95.3% for the three months ended September 30, 2020, compared to 94.3% for the same period of 2019 and 94.8% for second quarter 2020;
  • Same-store controllable expenses (which exclude taxes and insurance) decreased 2.0% for the nine months ended September 30, 2020 as compared to the same period of 2019, contributing to NOI growth of 1.0%;
  • Same-store new lease rates remained flat for the third quarter of 2020, compared to a decline of (1.2%) in Q2 2020;
  • Continued to strengthen our balance sheet by issuing 144,822 common shares under our 2019 ATM program for net proceeds of $10.2 million; and
  • Continued to grow our portfolio in our core market of Denver through the acquisition of Parkhouse Apartment Homes, a 465-home apartment community in Thornton, Colorado.

NOI, FFO, Core FFO, and same-store controllable expenses are non-GAAP financial measures. For more information on their usage and presentation, and a reconciliation to the most directly comparable GAAP measures, refer to "Non-GAAP Financial Measures and Reconciliations" below.

Acquisitions and Dispositions

During the quarter, we acquired Parkhouse Apartment Homes, a 465-home apartment community in Thornton, Colorado for a total purchase price of $144.8 million. During the quarter we disposed of four apartment communities in Grand Forks, North Dakota and a commercial property for an aggregate sale price of $43.0 million.

Balance Sheet

At the end of the third quarter, we had $131.8 million of total liquidity on our balance sheet, consisting of $115.0 million available under our line of credit and cash and cash equivalents of $16.8 million. At the end of the second quarter, we had $239.7 million of total liquidity on our balance sheet, consisting of $187.0 million available on our line of credit and cash and cash equivalents of $52.7 million. The decline in total liquidity since the end of the second quarter is primarily a result of funding our acquisition of Parkhouse Apartment Homes.

As of September 30, 2020, we had 45 unencumbered apartment communities, representing 64.6% of third quarter multifamily NOI, of which 4 apartment communities, representing 5.4% of third quarter NOI, are not pledged under the Unencumbered Asset Pool ("UAP").

2020 Financial Outlook

On March 27, 2020 we issued a press release indicating that in light of the impact of COVID-19 on our business and results of operations, we were withdrawing our 2020 Financial Outlook. Given the ongoing impact of COVID-19, we are not providing an updated 2020 Financial Outlook at this time.

COVID-19 Developments

The COVID-19 pandemic, including the associated economic disruptions, has continued to impact our business and operations since March 2020.

IRET's first priority amid the COVID-19 pandemic has been the health and well-being of our residents, team members, and the communities we serve. In response, IRET has enhanced cleaning protocols at our communities and offices, implemented physical distancing in communities common spaces, and instituted remote work guidelines for our team members, all in accordance with state and local guidelines. We are utilizing technology to allow our property teams to interact remotely with prospective residents through virtual leasing. We have provided rent deferrals to residents and rent abatement to commercial tenants who were financially impacted by the COVID-19 pandemic. To support our team members working on-site, IRET has provided additional COVID-19 paid time off and enhanced flextime arrangements.

A discussion of the ongoing and potential effects of the COVID-19 pandemic on our financial condition, results of operations, and cash flows can be found in the Management's Discussion and Analysis of Financial Conditions and Results of Operations presented in our Quarterly Report on Form 10-Q for the quarter ended September, 30, 2020.

For a more detailed description of the risks and uncertainties affecting our business, see the risk factors presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as updated under Item 1A of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, and in our subsequent current and periodic reports filed with the Securities and Exchange Commission at www.sec.gov.

Upcoming Events

IRET is scheduled to participate in the upcoming National Association of Real Estate Investment Trusts ("Nareit") REITworld 2020 Annual Conference, which will be held virtually November 17-19.

Quarterly Distributions

Effective September 4, 2020, IRET's Board of Trustees declared a regular quarterly distribution of $0.70 per share/unit, which was paid on October 9, 2020, to common shareholders and unitholders of record on September 30, 2020. IRET has paid cash dividends to common shareholders and unitholders every quarter since its initial dividend payment in 1971.

Effective September 4, 2020, 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-PC), which was paid on September 30, 2020, to holders of record at the close of business on September 15, 2020. Series C preferred share distributions are cumulative and payable quarterly in arrears at an annual rate of $1.65625 per share.

Earnings Call

Live webcast and replay:  http://ir.iretapartments.com




Live Conference Call


Conference Call Replay

Tuesday, November 3, 2020, at 10:00 AM ET


Replay available until November 17, 2020

USA Toll Free Number

1-877-509-9785


USA Toll Free Number

1-877-344-7529

International Toll Free Number

1-412-902-4132


International Toll Free Number

1-412-317-0088

Canada Toll Free Number

1-855-669-9657


Canada Toll Free Number

1-855-669-9658




Conference Number

10147829

Supplemental Information

Supplemental Operating and Financial Data for the quarter ended September 30, 2020 included herein ("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.  

About IRET

IRET is a real estate company focused on the ownership, management, acquisition, redevelopment, and development of apartment communities. As of September 30, 2020, we owned interests in 67 apartment communities consisting of 11,910 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 PC," respectively).

Forward-Looking Statements

Certain statements in this press release and the accompanying Supplemental Operating and Financial Data are based on our current expectations and assumptions, and are "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. 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. Such risks, uncertainties, and other factors that might cause such differences include, but are not limited to those risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission, 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 year ended December 31, 2019, in our subsequent quarterly reports on Form 10-Q, including the COVID-19 risk factors set forth in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, 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 Information

Emily Miller

Investor Relations

Phone: 701-837-7104

E-mail: IR@iret.com


 

Common Share Data (NYSE: IRET)




3rd Quarter


2nd Quarter


1st Quarter


4th Quarter


3rd Quarter



2020


2020


2020


2019


2019

High closing price


$

73.53



$

76.82



$

84.68



$

78.91



$

74.67


Low closing price


$

61.87



$

44.36



$

52.55



$

71.74



$

59.22


Average closing price


$

70.15



$

63.91



$

71.62



$

74.67



$

66.83


Closing price at end of quarter


$

65.17



$

70.49



$

55.00



$

72.50



$

74.67


Common share distributions – annualized


$

2.80



$

2.80



$

2.80



$

2.80



$

2.80


Closing dividend yield – annualized


4.3

%


4.0

%


5.1

%


3.9

%


3.8

%

Closing common shares outstanding (thousands)


12,976



12,827



12,164



12,099



11,625


Closing limited partnership units outstanding (thousands)


1,018



1,022



1,044



1,058



1,223


Closing market value of outstanding common shares,

plus imputed closing market value of outstanding limited

partnership units (thousands)


$

911,989



$

976,216



$

726,440



$

953,883



$

959,360


 

 

IRET

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands)




Three Months Ended



Nine Months Ended



9/30/2020


6/30/2020


3/31/2020


12/31/2019


9/30/2019



9/30/2020


9/30/2019

REVENUE


$

44,138



$

43,910



$

44,406



$

45,777



$

47,436




$

132,454



$

139,978


EXPENSES
















Property operating expenses, excluding
real estate taxes


13,129



12,360



13,468



14,018



14,485




38,957



43,231


Real estate taxes


5,402



5,410



5,465



4,835



5,425




16,277



16,231


Property management expense


1,442



1,345



1,554



1,634



1,553




4,341



4,552


Casualty loss


91



913



327



205



178




1,331



911


Depreciation/amortization


18,995



18,156



18,160



18,972



18,751




55,311



55,299


General and administrative expenses


3,077



3,202



3,428



3,647



3,448




9,707



10,803


TOTAL EXPENSES


$

42,136



$

41,386



$

42,402



$

43,311



$

43,840




$

125,924



$

131,027


Operating income


2,002



2,524



2,004



2,466



3,596




6,530



8,951


Interest expense


(6,771)



(6,940)



(6,911)



(7,357)



(7,694)




(20,622)



(23,180)


Loss on extinguishment of debt


(4)



(17)





(864)



(1,087)




(21)



(1,496)


Interest and other income (loss)


281



538



(2,777)



702



498




(1,958)



1,390


Income (loss) before gain (loss) on sale of

real estate and other investments, and

gain (loss) on litigation settlement


(4,492)



(3,895)



(7,684)



(5,053)



(4,687)




(16,071)



(14,335)


Gain (loss) on sale of real estate and other

 investments


25,676



(190)





57,850



39,105




25,486



39,774


Gain (loss) on litigation settlement










300






6,586


Net income (loss)


$

21,184



$

(4,085)



$

(7,684)



$

52,797



$

34,718




$

9,415



$

32,025


Dividends to preferred unitholders


(160)



(160)



(160)



(160)



(160)




(480)



(377)


Net (income) loss attributable to

noncontrolling interest – Operating

Partnership


(1,387)



447



692



(4,202)



(3,145)




(248)



(2,550)


Net (income) loss attributable to

noncontrolling interests – consolidated

real estate entities


(8)



(5)



145



223



183




132



913


Net income (loss) attributable to

controlling interests


19,629



(3,803)



(7,007)



48,658



31,596




8,819



30,011


Dividends to preferred shareholders


(1,607)



(1,609)



(1,705)



(1,705)



(1,705)




(4,921)



(5,116)


Discount (premium) on redemption of

 preferred shares


(1)



25



273








297




NET INCOME (LOSS) AVAILABLE

 TO COMMON SHAREHOLDERS


$

18,021



$

(5,387)



$

(8,439)



$

46,953



$

29,891




$

4,195



$

24,895


















Per Share Data - Basic
















Net earnings (loss) per common share –

basic


$

1.40



$

(0.44)



$

(0.69)



$

3.95



$

2.57




$

0.33



$

2.11


















Per Share Data - Diluted
















Net earnings (loss) per common share –

diluted


$

1.38



$

(0.44)



$

(0.67)



$

3.89



$

2.54




$

0.33



$

2.11


 

 

IRET

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands)




9/30/2020


6/30/2020


3/31/2020


12/31/2019


9/30/2019

ASSETS











Real estate investments











Property owned


$

1,805,390



$

1,694,033



$

1,687,436



$

1,643,078



$

1,720,352


Less accumulated depreciation


(380,392)



(383,917)



(366,307)



(349,122)



(370,492)




1,424,998



1,310,116



1,321,129



1,293,956



1,349,860


Unimproved land






1,376



1,376



1,376


Mortgage loans receivable


17,986



10,961



16,775



16,140



10,140


Total real estate investments


1,442,984



1,321,077



1,339,280



1,311,472



1,361,376


Cash and cash equivalents


16,804



52,714



26,338



26,579



8,500


Restricted cash


2,199



2,535



2,344



19,538



3,339


Other assets


16,947



16,484



21,124



34,829



30,589


TOTAL ASSETS


$

1,478,934



$

1,392,810



$

1,389,086



$

1,392,418



$

1,403,804













LIABILITIES, MEZZANINE EQUITY, AND EQUITY











LIABILITIES











Accounts payable and accrued expenses


$

58,596



$

54,883



$

52,337



$

47,155



$

40,546


Revolving line of credit


135,000



63,000



83,000



50,079



103,143


Notes payable, net of loan costs


269,202



269,155



269,106



269,058



269,006


Mortgages payable, net of loan costs


313,065



323,705



328,367



329,664



360,886


TOTAL LIABILITIES


$

775,863



$

710,743



$

732,810



$

695,956



$

773,581













SERIES D PREFERRED UNITS


$

16,560



$

16,560



$

16,560



$

16,560



$

16,560


EQUITY











Series C Preferred Shares of Beneficial Interest


93,530



93,579



96,046



99,456



99,456


Common Shares of Beneficial Interest


968,436



958,292



912,653



917,400



886,598


Accumulated distributions in excess of net income


(412,577)



(421,515)



(407,150)



(390,196)



(428,680)


Accumulated other comprehensive income (loss)


(17,256)



(18,139)



(17,360)



(7,607)



(9,793)


Total shareholders' equity


$

632,133



$

612,217



$

584,189



$

619,053



$

547,581


Noncontrolling interests – Operating Partnership


53,669



52,558



54,777



55,284



60,169


Noncontrolling interests – consolidated real estate entities


709



732



750



5,565



5,913


Total equity


$

686,511



$

665,507



$

639,716



$

679,902



$

613,663


TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY


$

1,478,934



$

1,392,810



$

1,389,086



$

1,392,418



$

1,403,804


 


IRET

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (unaudited)

This release contains certain non-GAAP financial measures. The non-GAAP measures should not be considered a substitute for operating results determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The definitions and calculations of these non-GAAP measures, as calculated by us, may not be comparable to non-GAAP measures reported by other REITs that do not define each of the non-GAAP measures exactly as we do.

We provide certain information on a same-store and non-same-store basis. Same-store apartment communities are owned or in service for the entirety of the periods being compared, and, in the case of development properties, have achieved a target level of physical occupancy of 90%. On the first day of each calendar year, we determine the composition of our same-store pool for that year as well as adjust the previous year, which allows us to evaluate full period-over-period operating comparisons for existing apartment communities and their contribution to net income. We believe that measuring performance on a same-store basis is useful to investors because it enables evaluation of how a fixed pool of our communities are performing year-over-year. We use this measure to assess whether or not we have been successful in increasing NOI, renewing the leases on existing residents, controlling operating costs, and making prudent capital improvements.

Reconciliation of Operating Income to Net Operating Income

Net operating income, or NOI, is a non-GAAP measure which we define as total real estate revenues less property operating expenses, including real estate taxes. We believe that NOI is an important supplemental measure of operating performance for real estate because it provides a measure of operations that is unaffected by depreciation, amortization, financing, property management overhead, casualty losses, and general and administrative expenses. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net income available for common shareholders, or cash flow from operating activities as a measure of financial performance.


(in thousands, except percentages)


Three Months Ended



Sequential


Year-Over-Year


9/30/2020


6/30/2020


9/30/2019



$ Change


% Change


$ Change


% Change
















Operating income

$

2,002



$

2,524



$

3,596




$

(522)



(20.7)

%


$

(1,594)



(44.3)

%

Adjustments:















Property management expenses

1,442



1,345



1,553




97



7.2

%


(111)



(7.1)

%

Casualty loss

91



913



178




(822)



(90.0)

%


(87)



(48.9)

%

Depreciation and amortization

18,995



18,156



18,751




839



4.6

%


244



1.3

%

General and administrative expenses

3,077



3,202



3,448




(125)



(3.9)

%


(371)



(10.8)

%

Net operating income

$

25,607



$

26,140



$

27,526




$

(533)



(2.0)

%


$

(1,919)



(7.0)

%
















Revenue















Same-store

$

38,043



$

37,831



$

37,627




$

212



0.6

%


$

416



1.1

%

Non-same-store

4,420



4,157



1,344




263



6.3

%


3,076



228.9

%

Other properties and dispositions

1,675



1,922



8,465




(247)



(12.9)

%


(6,790)



(80.2)

%

Total

44,138



43,910



47,436




228



0.5

%


(3,298)



(7.0)

%
















Property operating expenses, including real estate taxes















Same-store

16,198



15,319



15,493




879



5.7

%


705



4.6

%

Non-same-store

1,712



1,514



550




198



13.1

%


1,162



211.3

%

Other properties and dispositions

621



937



3,867




(316)



(33.7)

%


(3,246)



(83.9)

%

Total

18,531



17,770



19,910




761



4.3

%


(1,379)



(6.9)

%
















Net operating income















Same-store

21,845



22,512



22,134




(667)



(3.0)

%


(289)



(1.3)

%

Non-same-store

2,708



2,643



794




65



2.5

%


1,914



241.1

%

Other properties and dispositions

1,054



985



4,598




69



7.0

%


(3,544)



(77.1)

%

Total

$

25,607



$

26,140



$

27,526




$

(533)



(2.0)

%


$

(1,919)



(7.0)

%

 




Nine Months Ended September 30,


2020


2019


$ Change


% Change









Operating income

$

6,530



$

8,951



$

(2,421)



(27.0)

%

Adjustments:








Property management expenses

4,341



4,552



(211)



(4.6)

%

Casualty loss

1,331



911



420



46.1

%

Depreciation and amortization

55,311



55,299



12




General and administrative expenses

9,707



10,803



(1,096)



(10.1)

%

Net operating income

$

77,220



$

80,516



$

(3,296)



(4.1)

%









Revenue








Same-store

$

114,208



$

111,897



$

2,311



2.1

%

Non-same-store

12,088



2,829



9,259



327.3

%

Other properties and dispositions

6,158



25,252



(19,094)



(75.6)

%

Total

132,454



139,978



(7,524)



(5.4)

%









Property operating expenses, including real estate taxes








Same-store

47,857



46,190



1,667



3.6

%

Non-same-store

4,546



1,197



3,349



279.8

%

Other properties and dispositions

2,831



12,075



(9,244)



(76.6)

%

Total

55,234



59,462



(4,228)



(7.1)

%









Net operating income








Same-store

66,351



65,707



644



1.0

%

Non-same-store

7,542



1,632



5,910



362.1

%

Other properties and dispositions

3,327



13,177



(9,850)



(74.8)

%

Total

$

77,220



$

80,516



$

(3,296)



(4.1)

%

 


Reconciliation of Same-Store Controllable Expenses to Total Property Operating Expenses, Including Real Estate Taxes

Same-store controllable expenses exclude real estate taxes and insurance, in order to provide a measure of expenses that are within management's control, and is used for the purposes of budgeting, business planning, and performance evaluation. This is a non-GAAP measure and should not be considered an alternative to total expenses or total property operating expenses.


(in thousands, except percentages)


Three Months Ended September 30,



Nine Months Ended September 30,


2020


2019


$ Change


% Change



2020


2019


$ Change


% Change


















Controllable expenses

















On-site compensation(1)

$

4,290



$

3,978



$

312



7.8

%



$

12,705



$

11,779



$

926



7.9

%

Repairs and maintenance

2,764



2,805



(41)



(1.5)

%



7,431



8,413



(982)



(11.7)

%

Utilities

2,532



2,508



24



1.0

%



7,517



7,884



(367)



(4.7)

%

Administrative and marketing

820



882



(62)



(7.0)

%



2,501



2,702



(201)



(7.4)

%

Total

$

10,406



$

10,173



$

233



2.3

%



$

30,154



$

30,778



$

(624)



(2.0)

%


















Non-controllable expenses

















Real estate taxes

$

4,632



$

4,265



$

367



8.6

%



$

14,028



$

12,738



$

1,290



10.1

%

Insurance

1,160



1,055



105



10.0

%



3,675



2,674



1,001



37.4

%

Total

$

5,792



$

5,320



$

472



8.9

%



$

17,703



$

15,412



$

2,291



14.9

%


















Property operating expenses, including

real estate taxes - non-same-store

$

1,712



$

550



$

1,162



211.3

%



$

4,546



$

1,197



$

3,349



279.8

%

Property operating expenses, including

real estate taxes - other properties and

dispositions

621



3,867



(3,246)



(83.9)

%



2,831



12,075



(9,244)



(76.6)

%

Total property operating expenses,

including real estate taxes

$

18,531



$

19,910



$

(1,379)



(6.9)

%



$

55,234



$

59,462



$

(4,228)



(7.1)

%

 

(1)

On-site compensation for administration, leasing, and maintenance personnel.


Reconciliation of Net Income (Loss) Available to Common Shareholders to Funds From Operations and Core Funds From Operations

We believe that FFO, which is a standard supplemental measure for equity real estate investment trusts, is helpful to investors in understanding our operating performance, primarily because its calculation does not assume that the value of real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation.

We use the definition of FFO adopted by the National Association of Real Estate Investment Trusts, Inc. ("Nareit"). Nareit defines FFO as net income or loss calculated in accordance with GAAP, excluding:

  • depreciation and amortization related to real estate;
  • gains and losses from the sale of certain real estate assets; and
  • impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.

The exclusion in Nareit's definition of FFO of impairment write-downs and gains and losses from the sale of real estate assets helps to identify the operating results of the long-term assets that form the base of our investments, and assists management and investors in comparing those operating results between periods.

Due to the limitations of the Nareit FFO definition, we have made certain interpretations in applying this definition. We believe that all such interpretations not specifically identified in the Nareit definition are consistent with this definition. Nareit's FFO White Paper 2018 Restatement clarified that impairment write-downs of land related to a REIT's main business are excluded from FFO and a REIT has the option to exclude impairment write-downs of assets that are incidental to its main business.

While FFO is widely used by us as a primary performance metric, not all real estate companies use the same definition of FFO or calculate FFO in the same way. Accordingly, FFO presented here is not necessarily comparable to FFO presented by other real estate companies. FFO should not be considered as an alternative to net income or any other GAAP measurement of performance, but rather should be considered as an additional, supplemental measure. FFO also does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of sufficient cash flow to fund all of our needs or our ability to service indebtedness or make distributions.

Core Funds from Operations ("Core FFO") is FFO as adjusted for non-routine items or items not considered core to our business operations. By further adjusting for items that are not considered part of our core business operations, we believe that Core FFO provides investors with additional information to compare our core operating and financial performance between periods. Core FFO should not be considered as an alternative to net income as an indication of financial performance, or as an alternative to cash flows from operations as a measure of liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions to shareholders. Core FFO is a non-GAAP and non-standardized measure that may be calculated differently by other REITs and should not be considered a substitute for operating results determined in accordance with GAAP.



(in thousands, except per share amounts)



Three Months Ended



Nine Months Ended



9/30/2020


6/30/2020


3/31/2020


12/31/2019


9/30/2019



9/30/2020


9/30/2019

Funds From Operations
















Net income (loss) available to common shareholders


$

18,021



$

(5,387)



$

(8,439)



$

46,953



$

29,891




$

4,195



$

24,895


Adjustments:
















Noncontrolling interests – Operating Partnership


1,387



(447)



(692)



4,202



3,145




248



2,550


Depreciation and amortization


18,995



18,156



18,160



18,972



18,751




55,311



55,299


Less depreciation – non real estate


(85)



(88)



(93)



(88)



(71)




(266)



(235)


Less depreciation – partially owned entities


(31)



(33)



(282)



(454)



(452)




(346)



(1,604)


(Gain) loss on sale of real estate


(25,676)



190





(57,850)



(39,105)




(25,486)



(39,774)


FFO applicable to common shares and Units


$

12,611



$

12,391



$

8,654



$

11,735



$

12,159




$

33,656



$

41,131


















Adjustments to Core FFO:
















Casualty loss (recovery)


545











545




Loss on extinguishment of debt


4



17





864



1,087




21



1,496


Gain on litigation settlement










(300)






(6,586)


(Gain) loss on marketable securities




(175)



3,553



(113)






3,378




(Discount) premium on redemption of preferred

shares


1



(25)



(273)







(297)




Core FFO applicable to common shares and Units


$

13,161



$

12,208



$

11,934



$

12,486



$

12,946




$

37,303



$

36,041


















Funds from operations applicable to common shares and

Units


$

12,611



$

12,391



$

8,654



$

11,735



$

12,159




$

33,656



$

41,131


Dividends to preferred unitholders


160



160



160



160



160




480



377


Funds from operations applicable to common shares and

Units - diluted


$

12,771



$

12,551



$

8,814



$

11,895



$

12,319




$

34,136



$

41,508


















Core funds from operations applicable to common shares and

Units


$

13,161



$

12,208



$

11,934



$

12,486



$

12,946




$

37,303



$

36,041


Dividends to preferred unitholders


160



160



160



160



160




480



377


Core funds from operations applicable to common shares and

Units - diluted


$

13,321



$

12,368



$

12,094



$

12,646



$

13,106




$

37,783



$

36,418


















Per Share Data
















Earnings (loss) per share and Unit - diluted


$

1.38



$

(0.44)



$

(0.67)



$

3.89



$

2.54




$

0.33



$

2.11


FFO per share and Unit - diluted


$

0.90



$

0.93



$

0.66



$

0.90



$

0.93




$

2.49



$

3.15


Core FFO per share and Unit - diluted


$

0.94



$

0.91



$

0.90



$

0.96



$

0.99




$

2.76



$

2.76


















Weighted average shares and Units - diluted


14,143



13,558



13,401



13,188



13,087




13,704



13,174


 


Reconciliation of Net Income (Loss) Available to Common Shareholders to Adjusted EBITDA

Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, gain/loss on sale of real estate and other investments, impairment of real estate investments, gain/loss on extinguishment of debt, gain on litigation settlement, and gain/loss from involuntary conversion. We consider Adjusted EBITDA to be an appropriate supplemental performance measure because it permits investors to view income from operations without the effect of depreciation, the cost of debt, or non-operating gains and losses. Adjusted EBITDA is a non-GAAP measure and should not be considered a substitute for operating results determined in accordance with GAAP. 



(in thousands)



Three Months Ended



Nine Months Ended



9/30/2020


6/30/2020


3/31/2020


12/31/2019


9/30/2019