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First Industrial Realty Trust Reports Second Quarter 2013 Results
(Logo: http://photos.prnewswire.com/prnh/20040106/FRLOGO)
"
Portfolio Performance –
- In-service occupancy was 91.2% at the end of the quarter, compared to 89.6% at the end of the first quarter of 2013, and 87.9% at the end of the second quarter of 2012. Of the 160 basis point increase from the first quarter of 2013, 35 basis points were due to the impact of property sales.
- Retained tenants in 74.5% of square footage up for renewal.
- Same property cash basis net operating income (NOI) increased 1.9%. Including lease termination fees, same property NOI increased 0.8%.
- Rental rates decreased 5.2% on a cash basis and increased 1.1% on a GAAP basis; leasing costs were
$3.94 per square foot, impacted by build-out associated with two new long-term leases at higher finish buildings.
Capital Market Activities and Financial Position
In the second quarter, the Company:
- Redeemed the remaining
$100 million of the 7.25% Series J Cumulative Redeemable Preferred Stock. - Issued 2.3 million shares of common stock at an average price of
$18.43 through its ATM program, raising net proceeds of$41.8 million . - Repurchased a total of
$25.0 million of unsecured notes comprised of$19.0 million of 7.6% 2028 notes,$5.0 million of 5.95% 2017 Notes, and$1.0 million of 7.75% 2032 notes at a weighted average yield to maturity of 5.8%. - Retired
$12.0 million of mortgages with a weighted average interest rate of 7.4%.
In the third quarter to date, the Company:
- Closed on a new
$625 million unsecured credit facility, maturing onSeptember 29, 2017 with a one-year extension option, with a current interest rate of LIBOR plus 145 basis points. - Redeemed all
$50 million of the 7.25% Series K Cumulative Redeemable Preferred Stock. The Company expects to report a loss of$0.02 per share related to this redemption in the third quarter. - Prepaid
$14.0 million of mortgage loans at a weighted average interest rate of 7.5%.
"Through our recent capital actions, we have further improved our fixed charge coverage and leverage ratio inclusive of preferred stock, which are important metrics on our path back to investment grade status," said
Investment and Disposition Activities
In the second quarter, the Company:
- Completed the sale of eight industrial properties totaling 1.1 million square feet for a total of
$41.4 million . - Acquired an unleased 509,000 square-foot distribution facility in the
Chicago market for$20.5 million . - Completed the assemblage of a 69-acre land parcel in the Inland Empire in
Southern California for$16.6 million that can accommodate the future development of approximately 1.37 million square feet of distribution space.
In the third quarter to date, the Company:
- Completed the sale of a 56,330 square-foot industrial property plus one land parcel for a total of
$2.3 million .
Outlook for 2013
Mr. Duncan stated, "The overall industrial market fundamentals are good, as the growth in tenant demand continues to outpace new supply. We are meeting the needs of customers and driving cash flow through lease-up within our portfolio and our investments in high-quality distribution assets."
Low End of Guidance for 2013 (Per share/unit) |
High End of Guidance for 2013 (Per share/unit) | ||||
Net Income (Loss) Available to Common Stockholders |
(0.04) |
0.06 | |||
Add: Real Estate Depreciation/Amortization |
1.03 |
1.03 | |||
Impairment of Depreciated Real Estate |
0.01 |
0.01 | |||
Less: Non-NAREIT Compliant Gain YTD through 2Q13 |
(0.09) |
(0.09) | |||
FFO (NAREIT Definition) |
$0.91 |
$1.01 | |||
Add: Loss from Retirement of Debt Related to Completed and Planned Debt Payoffs |
|||||
0.06 |
0.06 | ||||
Loss from Redemption of Series J and Series K Preferred Shares |
0.05 |
0.05 | |||
FFO Before Loss from Retirement of Debt and Redemption of Series J and Series K Preferred Shares |
$1.02 |
$1.12 |
The following assumptions were used:
- Average quarter-end in-service occupancy of 90.5% to 92.0%.
- Same-store NOI of positive 1.5% to 3% for the full year, an increase of the bottom of the range due to first half 2013 results.
- JV FFO of approximately
$0.5 million . - General and administrative expense of approximately
$21.5 million to $22.5 million . - Guidance reflects the impact of the redemptions of both the Series J Preferred Stock and Series K Preferred Stock.
- Guidance reflects the impact of the unsecured notes and secured debt retired year to date, as well as the impact of our plan to prepay, prior to maturity, approximately
$32 million of additional mortgage debt with a weighted average interest rate of approximately 6.5%. - Guidance includes the incremental costs related to the Company's two developments in process, plus costs related to its planned third quarter 2013 starts of the 555,000 square-foot First 36 Logistics Center @
Moreno Valley and a 43,500 square-foot facility inLos Angeles . In total, the Company expects to capitalize$0.03 per share of interest related to these projects in 2013. - Guidance does not include the impact of:
- any other future debt repurchases prior to maturity or future debt issuances,
- any other future property sales or investments,
- any lease-up of the First Bandini Logistics Center or First Logistics Center @
I-83 developments in process, or theChicago acquisition completed in the second quarter of 2013, - any future impairment gains or losses,
- any future NAREIT-compliant gains, or
- issuance of additional equity, which the Company may elect to do, depending on market conditions.
A number of factors could impact our ability to deliver results in line with our assumptions, such as interest rates, the economies of
FFO Definition
About
Forward-Looking Information
This press release and the presentation to which it refers may contain 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 for 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," "plan," "anticipate," "estimate," "project," "seek," "target," "potential," "focus," "may," "should" 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 effect on our operations and future prospects include, but are not limited to: changes in national, international, regional and local economic conditions generally and real estate markets specifically; changes in legislation/regulation (including changes to laws governing the taxation of real estate investment trusts) and actions of regulatory authorities; our ability to qualify and maintain our status as a real estate investment trust; the availability and attractiveness of financing (including both public and private capital) to us and to our potential counterparties; the availability and attractiveness of terms of additional debt repurchases; interest rates; our credit agency ratings; our ability to comply with applicable financial covenants; competition; changes in 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; environmental liabilities; slippages in development or lease-up schedules; tenant creditworthiness; higher-than-expected costs; changes in asset valuations and related impairment charges; changes in general accounting principles, policies and guidelines applicable to real estate investment trusts; international business risks; 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 second quarter supplemental information can be viewed on
FIRST INDUSTRIAL REALTY TRUST, INC. | ||||||||
Selected Financial Data | ||||||||
(Unaudited) | ||||||||
(In thousands except per share/unit data) | ||||||||
Three Months Ended |
Six Months Ended | |||||||
June 30, |
June 30, |
June 30, |
June 30, | |||||
2013 |
2012 |
2013 |
2012 | |||||
Statement of Operations and Other Data: |
||||||||
Total Revenues |
$ 84,687 |
$ 81,559 |
$ 167,922 |
$ 161,703 | ||||
Property Expenses |
(27,774) |
(25,573) |
(55,527) |
(51,633) | ||||
General & Administrative |
(5,401) |
(5,954) |
(11,864) |
(11,571) | ||||
Impairment of Real Estate |
(1,429) |
- |
(1,429) |
153 | ||||
Depreciation of Corporate FF&E |
(164) |
(278) |
(372) |
(578) | ||||
Depreciation and Other Amortization of Real Estate |
(29,074) |
(29,206) |
(56,044) |
(60,597) | ||||
Total Expenses |
(63,842) |
(61,011) |
(125,236) |
(124,226) | ||||
Interest Income |
600 |
678 |
1,163 |
1,605 | ||||
Interest Expense |
(18,431) |
(21,172) |
(37,394) |
(43,865) | ||||
Amortization of Deferred Financing Costs |
(833) |
(850) |
(1,687) |
(1,725) | ||||
Mark-to-Market Gain (Loss) on Interest Rate Protection Agreements |
56 |
(429) |
52 |
(305) | ||||
Loss from Retirement of Debt |
(4,436) |
(6,223) |
(5,586) |
(6,222) | ||||
Loss from Continuing Operations Before Equity in Income of Joint Ventures, Gain on Change in Control of Interests and Income Tax (Provision) Benefit |
||||||||
(2,199) |
(7,448) |
(766) |
(13,035) | |||||
Equity in Income of Joint Ventures (a) |
27 |
37 |
47 |
128 | ||||
Gain on Change in Control of Interests |
- |
- |
- |
776 | ||||
Income Tax (Provision) Benefit |
(3) |
(5,354) |
59 |
(5,263) | ||||
Loss from Continuing Operations |
(2,175) |
(12,765) |
(660) |
(17,394) | ||||
Discontinued Operations: |
||||||||
Income Attributable to Discontinued Operations |
56 |
1,013 |
230 |
498 | ||||
Gain on Sale of Real Estate |
13,481 |
1,386 |
10,407 |
7,585 | ||||
Income from Discontinued Operations |
13,537 |
2,399 |
10,637 |
8,083 | ||||
Income (Loss) Before Gain on Sale of Real Estate |
11,362 |
(10,366) |
9,977 |
(9,311) | ||||
Gain on Sale of Real Estate |
- |
- |
262 |
- | ||||
Net Income (Loss) |
11,362 |
(10,366) |
10,239 |
(9,311) | ||||
Net (Income) Loss Attributable to the Noncontrolling Interest |
(245) |
838 |
(25) |
1,045 | ||||
Net Income (Loss) Attributable to First Industrial Realty Trust, Inc. |
11,117 |
(9,528) |
10,214 |
(8,266) | ||||
Preferred Dividends |
(2,277) |
(4,798) |
(6,114) |
(9,560) | ||||
Redemption of Preferred Stock |
(3,546) |
- |
(3,546) |
- | ||||
Net Income (Loss) Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities |
||||||||
$ 5,294 |
$ (14,326) |
$ 554 |
$ (17,826) | |||||
RECONCILIATION OF NET INCOME (LOSS) AVAILABLE TO FIRST INDUSTRIAL REALTY TRUST, INC.'S COMMON STOCKHOLDERS AND PARTICIPATING SECURITIES TO FFO (b) AND AFFO (b) |
||||||||
Net Income (Loss) Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities |
||||||||
$ 5,294 |
$ (14,326) |
$ 554 |
$ (17,826) | |||||
Depreciation and Other Amortization of Real Estate |
29,074 |
29,206 |
56,044 |
60,597 | ||||
Depreciation and Other Amortization of Real Estate Included in Discontinued Operations |
81 |
950 |
528 |
2,328 | ||||
Impairment of Depreciated Real Estate |
1,429 |
- |
1,429 |
(153) | ||||
Impairment of Depreciated Real Estate Included in Discontinued Operations |
176 |
- |
176 |
1,399 | ||||
Noncontrolling Interest |
245 |
(838) |
25 |
(1,045) | ||||
Equity in Dep/Other Amortization of Joint Ventures (a) |
55 |
82 |
110 |
172 | ||||
Gain on Change in Control of Interests |
- |
- |
- |
(776) | ||||
Non-NAREIT Compliant Gain (b) |
(13,481) |
(1,386) |
(10,407) |
(7,585) | ||||
Non-NAREIT Compliant Gain from Joint Ventures (a) (b) |
- |
(1) |
- |
(57) | ||||
Funds From Operations (NAREIT) ("FFO") (b) |
$ 22,873 |
$ 13,687 |
$ 48,459 |
$ 37,054 | ||||
Loss from Retirement of Debt |
4,436 |
6,223 |
5,586 |
6,222 | ||||
Restricted Stock/Unit Amortization |
841 |
1,299 |
2,667 |
2,398 | ||||
Amortization of Debt Discounts / (Premiums) and Hedge Costs |
974 |
890 |
1,930 |
1,799 | ||||
Amortization of Deferred Financing Costs |
833 |
850 |
1,687 |
1,725 | ||||
Depreciation of Corporate FF&E |
164 |
278 |
372 |
578 | ||||
Redemption of Preferred Stock |
3,546 |
- |
3,546 |
- | ||||
Mark-to-Market (Gain) Loss on Interest Rate Protection Agreements |
(56) |
429 |
(52) |
305 | ||||
Non-Incremental Capital Expenditures |
(11,965) |
(13,651) |
(23,562) |
(23,528) | ||||
Straight-Line Rental Income Adjustment |
(1,065) |
(535) |
(2,416) |
(1,614) | ||||
Adjusted Funds From Operations ("AFFO") (b) |
$ 20,581 |
$ 9,470 |
$ 38,217 |
$ 24,939 |
FIRST INDUSTRIAL REALTY TRUST, INC. | ||||||||
Selected Financial Data | ||||||||
(Unaudited) | ||||||||
(In thousands except per share/unit data) | ||||||||
Three Months Ended |
Six Months Ended | |||||||
June 30, |
June 30, |
June 30, |
June 30, | |||||
2013 |
2012 |
2013 |
2012 | |||||
RECONCILIATION OF NET INCOME (LOSS) AVAILABLE TO FIRST INDUSTRIAL REALTY TRUST, INC.'S COMMON STOCKHOLDERS AND PARTICIPATING SECURITIES TO EBITDA (b) AND NOI (b) |
||||||||
Net Income (Loss) Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities |
||||||||
$ 5,294 |
$ (14,326) |
$ 554 |
$ (17,826) | |||||
Interest Expense |
18,431 |
21,172 |
37,394 |
43,865 | ||||
Depreciation and Other Amortization of Real Estate |
29,074 |
29,206 |
56,044 |
60,597 | ||||
Depreciation and Other Amortization of Real Estate Included in Discontinued Operations |
81 |
950 |
528 |
2,328 | ||||
Impairment of Depreciated Real Estate |
1,429 |
- |
1,429 |
(153) | ||||
Impairment of Depreciated Real Estate Included in Discontinued Operations |
176 |
- |
176 |
1,399 | ||||
Preferred Dividends |
2,277 |
4,798 |
6,114 |
9,560 | ||||
Redemption of Preferred Stock |
3,546 |
- |
3,546 |
- | ||||
Income Tax Provision (Benefit) |
3 |
5,354 |
(59) |
5,263 | ||||
Noncontrolling Interest |
245 |
(838) |
25 |
(1,045) | ||||
Loss from Retirement of Debt |
4,436 |
6,223 |
5,586 |
6,222 | ||||
Amortization of Deferred Financing Costs |
833 |
850 |
1,687 |
1,725 | ||||
Depreciation of Corporate FF&E |
164 |
278 |
372 |
578 | ||||
Equity in Dep/Other Amortization of Joint Ventures (a) |
55 |
82 |
110 |
172 | ||||
Gain on Change in Control of Interests |
- |
- |
- |
(776) | ||||
Non-NAREIT Compliant Gain (b) |
(13,481) |
(1,386) |
(10,407) |
(7,585) | ||||
Non-NAREIT Compliant Gain from Joint Ventures (a) (b) |
- |
(1) |
- |
(57) | ||||
EBITDA (b) |
$ 52,563 |
$ 52,362 |
$ 103,099 |
$ 104,267 | ||||
General and Administrative |
5,401 |
5,954 |
11,864 |
11,571 | ||||
Mark-to-Market (Gain) Loss on Interest Rate Protection Agreements |
(56) |
429 |
(52) |
305 | ||||
NAREIT Compliant Economic Gain (b) |
- |
- |
(262) |
- | ||||
FFO of Joint Ventures (b) |
(145) |
(186) |
(278) |
(387) | ||||
Net Operating Income ("NOI") (b) |
$ 57,763 |
$ 58,559 |
$ 114,371 |
$ 115,756 | ||||
RECONCILIATION OF GAIN ON SALE OF REAL ESTATE TO NAREIT COMPLIANT ECONOMIC GAIN (b) |
||||||||
Gain on Sale of Real Estate |
$ - |
$ - |
$ 262 |
$ - | ||||
Gain on Sale of Real Estate included in Discontinued Operations |
13,481 |
1,386 |
10,407 |
7,585 | ||||
Non-NAREIT Compliant Gain (b) |
(13,481) |
(1,386) |
(10,407) |
(7,585) | ||||
NAREIT Compliant Economic Gain (b) |
$ - |
$ - |
$ 262 |
$ - | ||||
Weighted Avg. Number of Shares/Units Outstanding - Basic/Diluted (c) |
112,808 |
93,106 |
109,163 |
92,458 | ||||
Weighted Avg. Number of Shares Outstanding - Basic/Diluted (c) |
108,117 |
87,981 |
104,466 |
87,278 | ||||
Per Share/Unit Data: |
||||||||
FFO (NAREIT) |
$ 22,873 |
$ 13,687 |
$ 48,459 |
$ 37,054 | ||||
Less: Allocation to Participating Securities |
(99) |
- |
(197) |
- | ||||
FFO (NAREIT) Allocable to Common Stockholders and Unitholders |
$ 22,774 |
$ 13,687 |
$ 48,262 |
$ 37,054 | ||||
Basic/Diluted Per Share/Unit (c) |
$ 0.20 |
$ 0.15 |
$ 0.44 |
$ 0.40 | ||||
Loss from Continuing Operations, including Gain on Sale of Real Estate |
$ (2,175) |
$ (12,765) |
$ (398) |
$ (17,394) | ||||
Add: Noncontrolling Interest Allocable to Continuing Operations and Gain on Sale of Real Estate |
315 |
969 |
430 |
1,494 | ||||
Less: Preferred Dividends |
(2,277) |
(4,798) |
(6,114) |
(9,560) | ||||
Less: Redemption of Preferred Stock |
(3,546) |
- |
(3,546) |
- | ||||
Loss from Continuing Operations Available to First Industrial Realty Trust, Inc.'s Common Stockholders |
$ (7,683) |
$ (16,594) |
$ (9,628) |
$ (25,460) | ||||
Basic/Diluted Per Share (c) |
$ (0.07) |
$ (0.19) |
$ (0.09) |
$ (0.29) | ||||
Net Income (Loss) Available |
$ 5,294 |
$ (14,326) |
$ 554 |
$ (17,826) | ||||
Less: Allocation to Participating Securities |
(42) |
- |
(78) |
- | ||||
Net Income (Loss) Available to First Industrial Realty Trust, Inc.'s Common Stockholders |
$ 5,252 |
$ (14,326) |
$ 476 |
$ (17,826) | ||||
Basic/Diluted Per Share (c) |
$ 0.05 |
$ (0.16) |
$ 0.01 |
$ (0.20) | ||||
Common Dividends/Distributions |
$ 0.085 |
N/A |
$ 0.17 |
N/A | ||||
Balance Sheet Data (end of period): |
||||||||
Gross Real Estate Investment |
$ 3,150,093 |
$ 3,105,792 |
||||||
Real Estate and Other Assets Held For Sale, Net |
2,085 |
44,023 |
||||||
Total Assets |
2,611,718 |
2,671,180 |
||||||
Debt |
1,284,346 |
1,482,319 |
||||||
Total Liabilities |
1,403,971 |
1,594,368 |
||||||
Total Equity |
$ 1,207,747 |
$ 1,076,812 |
a) Represents the Company's pro rata share of net income (loss), depreciation and amortization on real estate and non-NAREIT compliant gain (loss), if applicable.
b) Investors in, and analysts following, the real estate industry utilize funds from operations ("FFO"), net operating income ("NOI"), EBITDA and adjusted funds from operations ("AFFO"), variously defined below, as supplemental performance measures. While the Company believes net income (loss) available to
As used herein, the Company calculates FFO to be equal to net income (loss) 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, which are accounted for under the equity method of accounting, plus or minus NAREIT compliant economic gain (loss), plus or minus mark-to-market gain or loss on interest rate protection agreements, minus general and administrative expenses. EBITDA includes EBITDA from discontinued operations.
AFFO is defined as EBITDA minus GAAP interest expense, plus amortization of debt discounts / (premiums) and hedge costs, minus preferred stock dividends, minus straight-line rental income, minus provision for income taxes or plus benefit for income taxes, minus or plus mark-to-market gain or loss on interest rate protection agreements, 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 AFFO 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 AFFO should not be considered as substitutes for net income (loss) available to common stockholders and participating securities (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 AFFO 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. Same store properties, for the period beginning
c) In accordance with GAAP, 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 restricted units would be antidilutive to the loss from continuing operations per share. The Company has conformed with the GAAP computation of diluted common shares in calculating per share amounts for items included on the Statement of Operations, including FFO and AFFO.
GAAP requires unvested equity based compensation awards that have nonforfeitable rights to dividends or dividend equivalents ("participating securities") to be included in the two class method of the computation of EPS. Under the two class method, participating security holders are allocated income, in proportion to total weighted average shares outstanding, based upon the greater of net income (after reduction for preferred dividends) or common dividends declared. Since participating security holders are not obligated to share in losses and no dividends were declared during the three and six months ended
SOURCE
Art Harmon, Senior Director, Investor Relations and Corporate Communications, 312-344-4320