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First Industrial Realty Trust Reports Third Quarter 2012 Results
(Logo: http://photos.prnewswire.com/prnh/20040106/FRLOGO)
First Industrial's third quarter FFO was
"We made progress on our plan to position the Company for long-term cash flow growth by launching
Portfolio Performance for
- In-service occupancy was 88.5% at the end of the quarter, compared to 87.9% at the end of the second quarter 2012, and 86.6% at the end of the third quarter of 2011.
- Retained tenants in 71% of square footage up for renewal.
- Excluding lease termination fees, same property cash basis net operating income (NOI) increased 4.3%. Including lease termination fees, same property NOI also increased 4.3%.
- Rental rates decreased 3.9% on a cash basis; leasing costs were
$2.01 per square foot, reflecting a high mix of renewal leasing as a percentage of total leasing. - As previously announced, the Company signed a 15-year lease agreement for First Inland Logistics Center, the recently completed 692,000 square-foot distribution center in
Southern California , with a leading specialty retailer. The lease is expected to commence by year-end 2012.
Investment Activity
As previously announced, the Company launched the development of three buildings totaling 1.5 million square feet. Estimated total investment for these new distribution centers is
- First Bandini Logistics Center in
Los Angeles County, CA , 489,000 square feet, estimated investment of$54 million , expected to be completed in 3Q13. - First Chino Logistics Center,
Chino, CA in the West Inland Empire, 300,000 square feet, estimated investment of$20 million , expected to be completed in 2Q13. - First Logistics Center @
I-83 ,York, PA inCentral Pennsylvania , 708,000 square feet, estimated investment of$34 million , expected to be completed in 4Q13.
The Company's
"These investments will contribute to the enhancement of our portfolio, and we are working to find additional opportunities to use our platform to create value for shareholders," said
Capital Market Activities and Financial Position
In the third quarter, the Company:
- Raised approximately
$117 million through its August equity offering of 9.4 million common shares. - Completed a secured financing transaction with a life insurance company for approximately
$100.6 million at an interest rate of 4.03%, with a maturity of ten years. - Repurchased
$4.2 million of 7.5% senior notes due 2017.
"Through our equity offering and secured financing completed during the quarter, we further strengthened our capital base," said
Divestment Activities
In the third quarter, the Company:
- Completed the sale of 18 industrial properties totaling approximately 3.2 million square feet and one land parcel for a total of
$56.5 million . - Sales for the quarter included the disposition of the Company's
Columbus, OH portfolio comprised of 11 buildings totaling approximately 3.0 million square feet for$39 million , and a land parcel in that market for$5.3 million .
Common Dividend Policy
First Industrial's dividend policy is determined by our board of directors and is dependent on multiple factors, including cash flow and capital expenditure requirements, as well as ensuring we meet the minimum distribution requirements set forth in the Code.
Outlook for 2012
Mr. Duncan stated, "Following a summer lull, leasing activity started to recover in the latter part of the third quarter and that improved activity has continued to date. The supply of new industrial space remains constrained while positive absorption continues in this climate of moderate economic growth. We believe these factors provide an attractive environment that will allow us to capture the occupancy opportunity within our portfolio."
Low End of |
High End of |
|||||
Guidance for 2012 |
Guidance for 2012 |
|||||
(Per share/unit) |
(Per share/unit) |
|||||
Net (Loss) Available to Common Stockholders |
(0.26) |
(0.20) |
||||
Add: Real Estate Depreciation/Amortization |
1.27 |
1.27 |
||||
Less: Gain from Sale of Depreciated Properties and Gain on Change of Control of Interests YTD through 3Q12 |
(0.13) |
(0.13) |
||||
Add: Impairment of Depreciated Real Estate through 3Q12 |
0.01 |
0.01 |
||||
FFO (NAREIT Definition) |
$ 0.89 |
$ 0.95 |
||||
FFO Excluding Loss from Early Retirement of Debt, Charge Related to Preliminary IRS Tax Settlement, and NAREIT-compliant gain |
$0.97 |
$1.03 |
||||
First Industrial's full year 2012 FFO guidance reflects
The following assumptions, which reflect year-to-date results and expectations for the fourth quarter, were used:
- Average in-service occupancy of 88.0% to 88.5%.
- Average same-store NOI of positive 4.0% to 6.0% for the full year.
- JV FFO of approximately
$1.0 million . - Capitalized interest of approximately
$1.25 million to $1.75 million related to the Company's development projects. - General and administrative expense of approximately
$22.0 million to $23.0 million . - Guidance for 2012 includes the impact of
$13 million of mortgage debt we plan to pay off in 4Q12 as previously disclosed, and the development and expansion investments discussed above. Guidance does not include the impact of:- any other future debt repurchases prior to maturity or future debt issuances,
- any future property sales or investments,
- any future impairment gains or losses,
- any 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 prefers 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," "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 (including the
A schedule of selected financial information is attached.
A replay of the conference call will be available shortly after the call through
The Company's third 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 |
||||||||
(Unaudited) |
||||||||
(In thousands except per share/unit data) |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
September 30, |
September 30, |
September 30, |
September 30, |
|||||
2012 |
2011 |
2012 |
2011 |
|||||
Statement of Operations and Other Data: |
||||||||
Total Revenues |
$ 80,984 |
$ 79,251 |
$ 246,362 |
$ 239,830 |
||||
Property Expenses |
(25,964) |
(26,682) |
(80,173) |
(82,340) |
||||
General & Administrative |
(4,843) |
(5,016) |
(16,414) |
(15,053) |
||||
Restructuring Costs |
- |
- |
- |
(1,553) |
||||
Impairment of Real Estate |
- |
(1,133) |
165 |
7,131 |
||||
Depreciation of Corporate F,F&E |
(258) |
(341) |
(836) |
(1,098) |
||||
Depreciation and Amortization of Real Estate |
(29,167) |
(32,043) |
(90,966) |
(86,422) |
||||
Total Expenses |
(60,232) |
(65,215) |
(188,224) |
(179,335) |
||||
Interest Income |
656 |
1,167 |
2,261 |
3,034 |
||||
Interest Expense |
(20,127) |
(24,446) |
(63,992) |
(76,931) |
||||
Amortization of Deferred Financing Costs |
(868) |
(1,075) |
(2,593) |
(3,237) |
||||
Mark-to-Market Loss on Interest Rate Protection Agreements |
(29) |
(1,372) |
(334) |
(1,560) |
||||
Loss from Retirement of Debt |
(424) |
(345) |
(6,646) |
(4,604) |
||||
Foreign Currency Exchange Loss |
- |
(332) |
- |
(332) |
||||
Loss from Continuing Operations Before Equity in Income of Joint Ventures, Gain on Change in Control of Interests and Income Tax Benefit (Provision) |
(40) |
(12,367) |
(13,166) |
(23,135) |
||||
Equity in Income of Joint Ventures (a) |
28 |
772 |
156 |
907 |
||||
Gain on Change in Control of Interests |
- |
- |
776 |
689 |
||||
Income Tax Benefit (Provision) |
5 |
36 |
(5,258) |
(41) |
||||
Loss from Continuing Operations |
(7) |
(11,559) |
(17,492) |
(21,580) |
||||
Discontinued Operations: |
||||||||
Income Attributable to Discontinued Operations |
1,006 |
94 |
1,595 |
345 |
||||
Gain on Sale of Real Estate |
4,420 |
6,010 |
12,005 |
13,351 |
||||
Provision for Income Taxes Allocable to Discontinued Operations |
- |
- |
- |
(2,048) |
||||
Income from Discontinued Operations |
5,426 |
6,104 |
13,600 |
11,648 |
||||
Income (Loss) Before Gain on Sale of Real Estate |
5,419 |
(5,455) |
(3,892) |
(9,932) |
||||
Gain on Sale of Real Estate |
3,777 |
1,370 |
3,777 |
1,370 |
||||
Provision for Income Taxes Allocable to Gain on Sale of Real Estate |
- |
(452) |
- |
(452) |
||||
Net Income (Loss) |
9,196 |
(4,537) |
(115) |
(9,014) |
||||
Net (Income) Loss Attributable to the Noncontrolling Interest |
(277) |
547 |
768 |
1,490 |
||||
Net Income (Loss) Attributable to First Industrial Realty Trust, Inc. |
8,919 |
(3,990) |
653 |
(7,524) |
||||
Preferred Dividends |
(4,725) |
(4,928) |
(14,285) |
(14,802) |
||||
Net Income (Loss) Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities |
$ 4,194 |
$ (8,918) |
$ (13,632) |
$ (22,326) |
||||
RECONCILIATION OF NET INCOME (LOSS) AVAILABLE TO FIRST INDUSTRIAL REALTY TRUST, INC.'S COMMON STOCKHOLDERS AND PARTICIPATING SECURITIES TO FFO (b) AND FAD (b) |
||||||||
Net Income (Loss) Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities |
$ 4,194 |
$ (8,918) |
$ (13,632) |
$ (22,326) |
||||
Depreciation and Amortization of Real Estate |
29,167 |
32,043 |
90,966 |
86,422 |
||||
Depreciation and Amortization of Real Estate Included in Discontinued Operations |
137 |
1,150 |
1,263 |
3,320 |
||||
Impairment of Depreciated Real Estate |
- |
1,173 |
(165) |
(617) |
||||
Impairment of Depreciated Real Estate Included in Discontinued Operations |
- |
1,387 |
1,411 |
4,828 |
||||
Noncontrolling Interest |
277 |
(547) |
(768) |
(1,490) |
||||
Depreciation and Amortization of Real Estate from Joint Ventures (a) |
83 |
104 |
255 |
449 |
||||
Gain on Change in Control of Interests |
- |
- |
(776) |
(689) |
||||
Non-NAREIT Compliant Gain |
(4,420) |
(6,010) |
(12,005) |
(13,351) |
||||
Non-NAREIT Compliant Gain from Joint Ventures (a) |
- |
(529) |
(57) |
(616) |
||||
Funds From Operations (NAREIT) ("FFO") (b) |
$ 29,438 |
$ 19,853 |
$ 66,492 |
$ 55,930 |
||||
Loss from Retirement of Debt |
424 |
345 |
6,646 |
4,604 |
||||
Restricted Stock Amortization |
1,309 |
1,042 |
3,707 |
2,768 |
||||
Amortization of Deferred Financing Costs |
868 |
1,075 |
2,593 |
3,237 |
||||
Depreciation of Corporate F,F&E |
258 |
341 |
836 |
1,098 |
||||
Impairment of Undepreciated Real Estate |
- |
(40) |
- |
(6,514) |
||||
Mark-to-Market Loss on Interest Rate Protection Agreements |
29 |
1,372 |
334 |
1,560 |
||||
Non-Incremental Capital Expenditures |
(10,322) |
(15,730) |
(33,850) |
(37,732) |
||||
Straight-Line Rent |
(769) |
(1,405) |
(2,383) |
(5,746) |
||||
Funds Available for Distribution ("FAD") (b) |
$ 21,235 |
$ 6,853 |
$ 44,375 |
$ 19,205 |
FIRST INDUSTRIAL REALTY TRUST, INC. |
||||||||
Selected Financial Data |
||||||||
(Unaudited) |
||||||||
(In thousands except per share/unit data) |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
September 30, |
September 30, |
September 30, |
September 30, |
|||||
2012 |
2011 |
2012 |
2011 |
|||||
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 |
$ 4,194 |
$ (8,918) |
$ (13,632) |
$ (22,326) |
||||
Interest Expense |
20,127 |
24,446 |
63,992 |
76,931 |
||||
Interest Expense Included in Discontinued Operations |
- |
- |
- |
63 |
||||
Restructuring Costs |
- |
- |
- |
1,553 |
||||
Depreciation and Amortization of Real Estate |
29,167 |
32,043 |
90,966 |
86,422 |
||||
Depreciation and Amortization of Real Estate Included in Discontinued Operations |
137 |
1,150 |
1,263 |
3,320 |
||||
Impairment of Depreciated Real Estate |
- |
1,173 |
(165) |
(617) |
||||
Impairment of Depreciated Real Estate Included in Discontinued Operations |
- |
1,387 |
1,411 |
4,828 |
||||
Impairment of Undepreciated Real Estate |
- |
(40) |
- |
(6,514) |
||||
Preferred Dividends |
4,725 |
4,928 |
14,285 |
14,802 |
||||
(Benefit) Provision for Income Taxes |
(5) |
416 |
5,258 |
2,541 |
||||
Noncontrolling Interest |
277 |
(547) |
(768) |
(1,490) |
||||
Loss from Retirement of Debt |
424 |
345 |
6,646 |
4,604 |
||||
Amortization of Deferred Financing Costs |
868 |
1,075 |
2,593 |
3,237 |
||||
Depreciation of Corporate F,F&E |
258 |
341 |
836 |
1,098 |
||||
Depreciation and Amortization of Real Estate from Joint Ventures (a) |
83 |
104 |
255 |
449 |
||||
Gain on Change in Control of Interests |
- |
- |
(776) |
(689) |
||||
Non-NAREIT Compliant Gain |
(4,420) |
(6,010) |
(12,005) |
(13,351) |
||||
Non-NAREIT Compliant Gain from Joint Ventures (a) |
- |
(529) |
(57) |
(616) |
||||
EBITDA (b) |
$ 55,835 |
$ 51,364 |
$ 160,102 |
$ 154,245 |
||||
General and Administrative |
4,843 |
5,016 |
16,414 |
15,053 |
||||
Foreign Currency Exchange Loss |
- |
332 |
- |
332 |
||||
Mark-to-Market Loss on Interest Rate Protection Agreements |
29 |
1,372 |
334 |
1,560 |
||||
NAREIT Compliant Economic Gain (c) |
(3,777) |
(1,370) |
(3,777) |
(1,370) |
||||
FFO of Joint Ventures (b) |
(406) |
(460) |
(793) |
(1,440) |
||||
Net Operating Income ("NOI") (b) |
$ 56,524 |
$ 56,254 |
$ 172,280 |
$ 168,380 |
||||
RECONCILIATION OF GAIN ON SALE OF REAL ESTATE TO NAREIT COMPLIANT ECONOMIC GAIN (b) |
||||||||
Gain on Sale of Real Estate |
$ 3,777 |
$ 1,370 |
$ 3,777 |
$ 1,370 |
||||
Gain on Sale of Real Estate included in Discontinued Operations |
4,420 |
6,010 |
12,005 |
13,351 |
||||
Non-NAREIT Compliant Gain |
(4,420) |
(6,010) |
(12,005) |
(13,351) |
||||
NAREIT Compliant Economic Gain (b) |
$ 3,777 |
$ 1,370 |
$ 3,777 |
$ 1,370 |
||||
Weighted Avg. Number of Shares/Units Outstanding - Basic/Diluted (c) |
98,432 |
91,196 |
94,464 |
84,131 |
||||
Weighted Avg. Number of Shares Outstanding - Basic/Diluted (c) |
93,488 |
85,930 |
89,363 |
78,821 |
||||
Per Share/Unit Data: |
||||||||
FFO (NAREIT) |
$ 29,438 |
$ 19,853 |
$ 66,492 |
$ 55,930 |
||||
Less: Allocation to Participating Securities |
(222) |
- |
- |
- |
||||
FFO (NAREIT) Allocable to Common Stockholders and Unitholders |
$ 29,216 |
$ 19,853 |
$ 66,492 |
$ 55,930 |
||||
- Basic/Diluted (c) |
$ 0.30 |
$ 0.22 |
$ 0.70 |
$ 0.66 |
||||
Loss from Continuing Operations, including Gain on Sale of Real Estate, Net of Income Tax |
$ 3,770 |
$ (10,641) |
$ (13,715) |
$ (20,662) |
||||
Add: Noncontrolling Interest Allocable to Continuing Operations and Gain on Sale of Real Estate |
(7) |
897 |
1,497 |
2,219 |
||||
Less: Preferred Dividends |
(4,725) |
(4,928) |
(14,285) |
(14,802) |
||||
Loss from Continuing Operations Available to First Industrial Realty Trust, Inc.'s Common Stockholders |
$ (962) |
$ (14,672) |
$ (26,503) |
$ (33,245) |
||||
- Basic/Diluted (c) |
$ (0.01) |
$ (0.17) |
$ (0.30) |
$ (0.42) |
||||
Net Income (Loss) Available |
$ 4,194 |
$ (8,918) |
$ (13,632) |
$ (22,326) |
||||
Less: Allocation to Participating Securities |
(33) |
- |
- |
- |
||||
Net Income (Loss) Available to First Industrial Realty Trust, Inc.'s Common Stockholders |
$ 4,161 |
$ (8,918) |
$ (13,632) |
$ (22,326) |
||||
- Basic/Diluted (c) |
$ 0.04 |
$ (0.10) |
$ (0.15) |
$ (0.28) |
||||
Balance Sheet Data (end of period): |
||||||||
Real Estate Before Accumulated Depreciation |
$ 3,108,602 |
$ 2,903,042 |
||||||
Real Estate and Other Held For Sale, Net |
6,492 |
161,122 |
||||||
Total Assets |
2,611,483 |
2,699,732 |
||||||
Debt |
1,296,853 |
1,513,856 |
||||||
Total Liabilities |
1,411,613 |
1,624,153 |
||||||
Total Equity |
$ 1,199,870 |
$ 1,075,579 |
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 funds available for distribution ("FAD"), variously defined below, as supplemental performance measures. While the Company believes 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 foreign exchange 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.
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, 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 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 (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 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. 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 stock options and 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 computing per share amounts for items included on the Statement of Operations, including FFO and FAD.
GAAP requires unvested equity based compensation awards that have nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) to be included in the two class method of the computation of EPS. For the three months ended
SOURCE
Art Harmon, Senior Director, Investor Relations and Corporate Communications, +1-312-344-4320