INVESTORS
Approaching three decades as a public company focused on top U.S. markets
Press Release
First Industrial Realty Trust Reports First Quarter 2009 Results
- FFO
- General and Administrative Expenses Down 57%
- Solid Tenant Retention of 69%; Rental Rates Up 0.7%
- Asset Sales Totaled
$19.9 Million ; Additional$12.6 Million of Sales Completed Second Quarter To Date - Progressing on Plan to Refinance
June 2009 Debt Maturity;$119 Million Due After Repurchase of$6 Million of Notes Since the End of the First Quarter
First quarter FFO included charges of approximately
"We are pleased with our first quarter results, which reflect our focus on
leasing and our efforts to manage expenses throughout the organization," said
-
First Quarter Portfolio Performance for On Balance Sheet Properties
- Retained tenants in 69% of square footage up for renewal
- Occupancy was 86.0% for the in-service portfolio under the definition adopted beginning this quarter as previously announced, down from 88.1% in fourth quarter 2008 on a comparable basis
- Excluding lease termination fees, same property cash basis net operating income (NOI) declined 0.2%. Including lease termination fees, same property NOI declined 3.4%
- Rental rates increased 0.7%; leasing costs were
$2.18 per square foot
- Financial Position (Balance Sheet Information)
- In negotiations to obtain secured debt to refinance
June 2009 debt maturity - Repurchased
$6 million of theJune 2009 maturity since the end of the first quarter - Less than
$25 million of debt maturing through the end of 2010, excluding the June maturity - Fixed-charge coverage was 1.7 times and interest coverage was 2.0 times for the quarter
- 96% of real estate assets are unencumbered by mortgages
- 7.0 years weighted average maturity of permanent debt
- 79% of total debt is fixed rate
"Our June debt maturity remains our top priority, and we are progressing
in our negotiations with several lenders to obtain secured debt to refinance
the remaining
Asset Sales and Investments
- Balance Sheet
- Sold three facilities totaling 382,000 s.f. at a weighted average cap
rate of 8.8% and one land parcel for a total of
$19.9 million - Since the end of the first quarter, sold two properties totaling
627,000 s.f. at a weighted average cap rate of 9.3% for a total of
$12.6 million - Placed seven developments in-service totaling
$117.6 million with a weighted average expected cap rate of 8.1% - Completed the acquisition of four acres of land adjacent to a current
development in
Nashville totaling$0.2 million
- Joint Ventures
- Placed two developments in-service totaling
$20.8 million with a weighted in-place cap rate of 8.5% - Closed a previously committed land acquisition in the Inland Empire
for
$0.9 million
"In this capital constrained environment, we will remain judicious in our joint venture capital deployment and have no plans to pursue new acquisitions for our balance sheet in 2009," added Mr. Duncan. "Longer-term, we believe the industrial market will present opportunities that we can capitalize on through our broad operating platform."
Common Dividend Policy
As announced in March,
Outlook
Mr. Duncan stated, "The impact of the current recession continues to
affect businesses throughout
Low End of High End of
Guidance for Guidance for
2009 2009
(Per share/unit) (Per share/unit)
Net Loss Available to Common
Stockholders $ (2.03) $ (1.93)
Add: Real Estate
Depreciation/Amortization 3.35 3.35
Gain from Sale of Depreciated
Properties in 1Q09 (0.09) (0.09)
FFO (NAREIT Definition) $ 1.23 $ 1.33
FFO Excluding Restructuring Charges $ 1.35 $ 1.45
-
The following assumptions were used:
- Average in-service occupancy for 2009 of 82% to 84%
- Same-store NOI of -3% to -5%
- JV FFO of
$10 million to $12 million - General and administrative expense of approximately
$39 million to $40 million - Restructuring charges of
$6 million ($3 million cash,$3 million non-cash), as discussed above - The Company plans to sell properties in 2009, dependent upon market conditions. Due to the volatility in the transaction markets, we are not providing specific sales volume guidance. The Company is targeting future sales of previously depreciated assets, the impact of which is not included in FFO under the NAREIT definition. The impact of future sales is also excluded from our EPS guidance above.
A number of factors could impact our ability to deliver results in line
with our assumptions, such as interest rates, the economies of the
FFO Definition
As announced last year,
This press release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, and Section 21E of the
Securities Exchange Act of 1934. We intend such forward-looking statements to
be covered by the safe harbor provisions for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995, and are
including this statement for purposes of complying with those safe harbor
provisions. Forward-looking statements, which are based on certain
assumptions and describe future plans, strategies and expectations of the
Company, are generally identifiable by use of the words "believe," "expect,"
"intend," "anticipate," "estimate," "project" or similar expressions. Our
ability to predict results or the actual effect of future plans or strategies
is inherently uncertain. Factors which could have a materially adverse affect
on our operations and future prospects include, but are not limited to,
changes in: national, international (including trade volume growth), regional
and local economic conditions generally and real estate markets specifically,
legislation/regulation (including changes to laws governing the taxation of
real estate investment trusts), our ability to qualify and maintain our status
as a real estate investment trust, availability and attractiveness of
financing (including both public and private capital) to us and to our
potential counterparties, interest rate levels, our ability to maintain our
current credit agency ratings, competition, supply and demand for industrial
properties (including land, the supply and demand for which is inherently more
volatile than other types of industrial property) in the Company's current and
proposed market areas, difficulties in consummating acquisitions and
dispositions, risks related to our investments in properties through joint
ventures, potential environmental liabilities, slippage in development or
lease-up schedules, tenant credit risks, higher-than-expected costs, changes
in general accounting principles, policies and guidelines applicable to real
estate investment trusts, risks related to doing business internationally
(including foreign currency exchange risks and risks related to integrating
international properties and operations) and those additional factors
described under the heading "Risk Factors" and elsewhere in the Company's
annual report on Form 10-K for the year ended
A schedule of selected financial information is attached.
The Company's first quarter supplemental information can be viewed on
First Industrial's website, www.firstindustrial.com, under the "Investor
Relations" tab.
FIRST INDUSTRIAL REALTY TRUST, INC.
Selected Financial Data
(In thousands, except for per share/unit)
(Unaudited)
Three Months Ended
As Adjusted (a)
March 31, March 31,
2009 2008
Statement of Operations and Other Data:
Total Revenues (b) $113,092 $113,163
Property Expenses (33,613) (32,034)
General & Administrative Expense (10,109) (23,356)
Restructuring Costs (4,744) -
Depreciation of Corporate F,F&E (597) (461)
Depreciation and Amortization of Real Estate (38,620) (36,215)
Construction Expenses (b) (17,883) (22,301)
Total Expenses (105,566) (114,367)
Interest Income 561 644
Interest Expense (28,098) (29,251)
Amortization of Deferred Financing Costs (708) (713)
Mark-to-Market Gain on Interest Rate
Protection Agreements 1,115 -
Loss from Continuing Operations Before
Equity in Net Income of Joint Ventures
and Income Tax Benefit (19,604) (30,524)
Equity in Net Income of Joint Ventures (c) 29 3,302
Income Tax Benefit 1,816 2,508
Loss from Continuing Operations (17,759) (24,714)
Income from Discontinued Operations
(Including Gain on Sale of Real Estate
of $4,413 and $73,361 for the Three
Months Ended March 31, 2009 and 2008,
respectively) (d) 4,696 79,339
Benefit (Provision) for Income Taxes Allocable
to Discontinued Operations (Including a
Benefit (Provision) Allocable to Gain on Sale
of Real Estate of $93 and $(247) for the
Three Months Ended March 31, 2009 and 2008,
respectively) (d) 106 (407)
(Loss) Income Before Gain on Sale of
Real Estate (12,957) 54,218
Gain on Sale of Real Estate 460 7,671
Provision for Income Taxes Allocable to
Gain on Sale of Real Estate (29) (1,591)
Net (Loss) Income (12,526) 60,298
Net Loss (Income) Attributable to
the Noncontrolling Interest 1,982 (7,075)
Net (Loss) Income Attributable to First
Industrial Realty Trust, Inc. (10,544) 53,223
Preferred Dividends (4,857) (4,857)
Net (Loss) Income Available to
First Industrial Realty Trust, Inc.'s
Common Stockholders $(15,401) $48,366
RECONCILIATION OF NET (LOSS) INCOME AVAILABLE
TO FIRST INDUSTRIAL REALTY TRUST, INC.'S
COMMON STOCKHOLDERS TO FFO (e) AND FAD (e)
Net (Loss) Income Available to First
Industrial Realty Trust, Inc.'s Common
Stockholders $(15,401) $48,366
Depreciation and Amortization of Real Estate 38,620 36,215
Depreciation and Amortization of Real Estate
Included in Discontinued Operations 278 3,920
Noncontrolling Interest (1,982) 7,075
Depreciation and Amortization of Real Estate
- Joint Ventures (c) 1,822 1,838
Accumulated Depreciation/Amortization on
Real Estate Sold (3,139) (41,932)
Accumulated Depreciation/Amortization
on Real Estate Sold - Joint Ventures (c) - (724)
Non-NAREIT Compliant Economic Gains (1,273) (31,451)
Non-NAREIT Compliant Economic Gains
from Joint Ventures (c) (19) (1,000)
Funds From Operations (NAREIT) ("FFO") (e) $18,906 $22,307
Restricted Stock Amortization 5,422 3,460
Amortization of Deferred Financing Costs 708 713
Depreciation of Corporate F,F&E 597 461
Non-NAREIT Compliant Economic Gains 1,273 31,451
Non-NAREIT Compliant Economic Gains from
Joint Ventures 19 1,000
Mark-to-Market Gain on Interest Rate
Protection Agreements (1,115) -
Non-Incremental Capital Expenditures (4,586) (6,805)
Straight-Line Rent (1,882) (2,006)
Funds Available for Distribution ("FAD") (e) $19,342 $50,581
FIRST INDUSTRIAL REALTY TRUST, INC.
Selected Financial Data
(In thousands, except for per share/unit)
(Unaudited)
Three Months Ended
As Adjusted (a)
March 31, March 31,
2009 2008
RECONCILIATION OF NET (LOSS) INCOME AVAILABLE TO
FIRST INDUSTRIAL REALTY TRUST, INC.'S COMMON
STOCKHOLDERS TO EBITDA (e) AND NOI (e)
Net (Loss) Income Available to First Industrial
Realty Trust, Inc.'s Common Stockholders $(15,401) $48,366
Interest Expense 28,098 29,251
Restructuring Costs 4,744 -
Depreciation and Amortization of Real Estate 38,620 36,215
Depreciation and Amortization of Real Estate
Included in Discontinued Operations 278 3,920
Preferred Dividends 4,857 4,857
Benefit for Income Taxes (1,893) (510)
Noncontrolling Interest (1,982) 7,075
Amortization of Deferred Financing Costs 708 713
Depreciation of Corporate F,F&E 597 461
Depreciation and Amortization of Real Estate
- Joint Ventures (c) 1,822 1,838
Mark-to-Market Gain on Interest Rate
Protection Agreements (1,115) -
Accumulated Depreciation/Amortization on
Real Estate Sold (3,139) (41,932)
Accumulated Depreciation/Amortization
on Real Estate Sold - Joint Ventures (c) - (724)
EBITDA (e) $56,194 $89,530
General and Administrative Expense 10,109 23,356
Non-NAREIT Compliant Economic Gains (19) (1,000)
Non-NAREIT Compliant Economic Gains
from Joint Ventures (c) (1,273) (31,451)
NAREIT Compliant Economic Gains (e) (461) (7,649)
FFO of Joint Ventures (e) (4,550) (7,974)
Net Operating Income ("NOI") (e) $60,000 $64,812
RECONCILIATION OF GAIN ON SALE OF REAL ESTATE
TO NAREIT COMPLIANT ECONOMIC GAINS (e)
Gain on Sale of Real Estate 460 7,671
Gain on Sale of Real Estate included in
Discontinued Operations 4,413 73,361
Less: Non-NAREIT Compliant Economic Gains (1,273) (31,451)
Less: Accumulated Depreciation/Amortization on
Real Estate Sold (3,139) (41,932)
NAREIT Compliant Economic Gains (e) $461 $7,649
Weighted Avg. Number of Shares/Units Outstanding
- Basic/Diluted (f) 49,919 49,407
Weighted Avg. Number of Shares Outstanding
- Basic/Diluted (f) 44,147 42,984
Per Share/Unit Data:
FFO (NAREIT) $18,906 $22,307
Less: Allocation to Participating Securities - 409
FFO (NAREIT) Allocable to Common Stockholders
and Unitholders $18,906 $21,898
- Basic/Diluted (f) $0.38 $0.44
Loss from Continuing Operations Less
Noncontrolling Interest and Preferred
Dividends $(19,653) $(20,494)
Less: Allocation to Participating Securities - -
Loss from Continuing Operations Less
Noncontrolling Interest and Preferred
Dividends Available to Common Stockholders $(19,653) $(20,494)
- Basic/Diluted (f) $ (0.45) $(0.48)
Net (Loss) Income Available $(15,401) $48,366
Less: Allocation to Participating Securities - 1,016
Net (Loss) Income Available to First
Industrial Realty Trust, Inc.'s Common
Stockholders $(15,401) $47,350
- Basic/Diluted (f) $(0.35) $1.10
Dividends/Distributions N/A $0.72
FFO Payout Ratio N/A 162.4%
FAD Payout Ratio N/A 71.6%
Balance Sheet Data (end of period):
Real Estate Before Accumulated Depreciation $3,376,566 $3,261,115
Real Estate and Other Held For Sale, Net 16,669 48,795
Total Assets 3,212,339 3,265,442
Debt 2,077,726 1,967,219
Total Liabilities 2,236,805 2,168,552
Total Equity $975,534 $1,096,890
a) On
Additionally, on
The impact of the adoption of FAS 141R and FSP APB 14-1 upon the balance
sheet as of
Additionally, on
b) Construction Revenues, included within Total Revenues, and Construction
Expenses include revenues and expenses associated with the Company acting in
the capacity of general contractor for certain third party development
projects. Additionally, for the three months ended
c) Represents the Company's share of net income, depreciation and amortization on real estate, accumulated depreciation and amortization on real estate sold from the Company's joint ventures in which it owns minority equity interests and Non-NAREIT Compliant Economic Gains.
d) FAS 144 requires that the operations and gain (loss) on sale of qualifying properties sold and properties that are classified as held for sale be presented in discontinued operations. FAS 144 also requires that prior periods be restated.
e) Investors in and analysts following the real estate industry utilize
FFO, NOI, EBITDA and FAD, variously defined, as supplemental performance
measures. While the Company believes net income available to
As used herein, the Company calculates FFO to be equal to net income
available to
NOI is defined as revenues of the Company, minus property expenses such as real estate taxes, repairs and maintenance, property management, utilities, insurance and other expenses. NOI includes NOI from discontinued operations.
EBITDA is defined as NOI, plus the equity in FFO of the Company's joint ventures (excluding joint venture impairment charges), which are accounted for under the equity method of accounting, plus NAREIT and Non-NAREIT Compliant Economic Gains, minus general and administrative expenses. EBITDA includes EBITDA from discontinued operations.
FAD is defined as EBITDA, minus GAAP interest expense, minus restructuring costs, minus preferred stock dividends, minus straight-line rental income, minus provision for income taxes or plus benefit for income taxes, plus restricted stock amortization, minus non-incremental capital expenditures. Non-incremental capital expenditures are building improvements and leasing costs required to maintain current revenues.
FFO, NOI, EBITDA and FAD do not represent cash generated from operating activities in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs, including the repayment of principal on debt and payment of dividends and distributions. FFO, NOI, EBITDA and FAD should not be considered as substitutes for net income available to common stockholders (calculated in accordance with GAAP), as a measure of results of operations, or cash flows (calculated in accordance with GAAP) as a measure of liquidity. FFO, NOI, EBITDA and FAD, as currently calculated by the Company, may not be comparable to similarly titled, but variously calculated, measures of other REITs.
In addition, the Company considers cash-basis same store NOI ("SS NOI") to
be a useful supplemental measure of its operating performance. The Company
has adopted the following definition of its same store pool of properties:
Same store properties, for the period beginning
f) Pursuant to Statement of Financial Accounting Standard No. 128, "Earnings Per Share", the diluted weighted average number of shares/units outstanding and the diluted weighted average number of shares outstanding are the same as the basic weighted average number of shares/units outstanding and the basic weighted average number of shares outstanding, respectively, for periods in which continuing operations is a loss, as the dilutive effect of stock options and restricted units would be antidilutive to the loss from continuing operations per share.
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