Third Quarter Net Income of $0.28 Per Share
Third Quarter Normalized FFO of $0.39 Per Share
Third Quarter Same Property Cash Basis NOI Increased by 1.5%
NEWTON, Mass.--(BUSINESS WIRE)--
Industrial Logistics Properties Trust (Nasdaq: ILPT) today announced
financial results for the quarter and nine months ended September 30,
2018.
John Popeo, President and Chief Executive Officer of ILPT, made the
following statement:
"We are pleased to announce that during the third quarter we acquired
two properties for an aggregate purchase price of $49.3 million and
entered an agreement to acquire one additional property for $27.7
million, which we closed in October 2018. These transactions involve
newly constructed properties close to major highways with access to
highly populated market areas. Also, during the quarter, we acquired a
land parcel to be used for a 194,000 square foot expansion for one of
our existing investment grade rated tenants for an estimated yield of
6.7% on a project cost of approximately $15.0 million, and we entered
new and renewal leases for more than 320,000 square feet that resulted
in weighted average (by square feet) rental rates that were
approximately 12.1% higher than prior rental rates for the same space.
In addition, we completed rent resets for 516,000 square feet of land in
Hawaii at weighted average (by square feet) rental rates that were
approximately 20.3% higher than prior rental rates for the same space.
We continue to be encouraged about our external growth prospects,
supported by more than $340.0 million of current borrowing availability
under our revolving credit facility to fund future acquisitions and
expansions, and our internal growth prospects, including possible
expansion and development projects with existing tenants as well as more
than $7.0 million of our Hawaii annual rents remaining to be scheduled
to reset during 2019."
Results for the Quarter Ended September 30, 2018:
Net income for the quarter ended September 30, 2018 was $18.1 million,
or $0.28 per diluted share, compared to $22.9 million for the same
quarter last year. Normalized funds from operations, or Normalized FFO,
for the quarter ended September 30, 2018 were $25.3 million, or $0.39
per diluted share, compared to $29.0 million for the same quarter last
year.
ILPT was formed in 2017 as a wholly owned subsidiary of Select Income
REIT (Nasdaq: SIR). On January 17, 2018, ILPT sold approximately 30.8%
of its common shares in an initial public offering, or the IPO, and
became a separate public company. For periods prior to January 17, 2018,
ILPT's historical results of operations and financial position have been
derived from the financial statements of SIR and may not be comparable
to future results. SIR currently owns 69.2% of ILPT's outstanding common
shares. Pursuant to the Agreement and Plan of Merger, or the Merger
Agreement, that SIR entered with Government Properties Income Trust on
September 14, 2018, subject to certain conditions, SIR currently plans
to declare and pay a distribution of all 45,000,000 common shares of
ILPT that SIR owns to SIR's shareholders in the coming months.
Reconciliations of net income determined in accordance with U.S.
generally accepted accounting principles, or GAAP, to funds from
operations, or FFO, and to Normalized FFO for the quarters ended
September 30, 2018 and 2017 appear later in this press release.
Results for the Nine Months Ended
September 30, 2018:
Net income for the nine months ended September 30, 2018 was $56.1
million, or $0.88 per diluted share, compared to $64.8 million for the
same period last year. Normalized FFO for the nine months ended
September 30, 2018 were $77.0 million, or $1.21 per diluted share,
compared to $87.2 million for the same period last year.
Reconciliations of net income determined in accordance with GAAP to FFO
and to Normalized FFO for the nine months ended September 30, 2018 and
2017 appear later in this press release.
Leasing, Occupancy and Same Property Results:
During the quarter ended September 30, 2018, ILPT entered lease renewals
and new leases for approximately 324,000 square feet, which resulted in
weighted average (by square feet) rental rates that were approximately
12.1% higher than prior rental rates for the same space and a weighted
average (by square feet) lease term of 11.8 years. Commitments for
leasing capital and concessions for these leases totaled approximately
$398,000, or approximately $0.10 per square foot per lease year. During
the quarter ended September 30, 2018, ILPT also completed 11 rent resets
at its properties in Hawaii for approximately 516,000 square feet of
land at rental rates that were approximately 20.3% higher than the prior
rental rates.
As of September 30, 2018, 99.3% of ILPT’s total rentable square feet was
leased, compared to 99.1% as of June 30, 2018 and 99.9% as of
September 30, 2017. Occupancy for properties owned continuously since
July 1, 2017, or on a same property basis, decreased to 99.2% at
September 30, 2018 from 99.9% at September 30, 2017. Same property cash
basis net operating income, or Cash Basis NOI, increased 1.5% for the
quarter ended September 30, 2018 compared to the quarter ended
September 30, 2017, primarily as a result of contractual rent increases,
leasing activity and rent resets at certain properties since July 1,
2017.
Reconciliations of net income determined in accordance with GAAP to net
operating income, or NOI, and Cash Basis NOI, on both a consolidated and
same property basis, for the quarters and nine months ended
September 30, 2018 and 2017 appear later in this press release.
Recent Investment Activities:
ILPT previously disclosed that it had entered an agreement to acquire a
single tenant, net leased property located in Upper Marlboro, MD with
220,800 rentable square feet for a purchase price of $29.3 million,
excluding acquisition related costs. ILPT completed this acquisition in
September 2018. This property is 100% leased and has a remaining lease
term of approximately 12 years.
Also in September 2018, ILPT acquired a single tenant, net leased
property located in Carlisle, PA with 205,090 rentable square feet for a
purchase price of $20.0 million, excluding acquisition related costs.
This property is 100% leased and has a remaining lease term of
approximately seven years.
In October 2018, ILPT acquired a land parcel adjacent to a property it
owns located in Ankeny, IA for a purchase price of $450,000, excluding
acquisition related costs. This land parcel will be used for a 194,000
square foot expansion for the existing tenant at such property.
Also in October 2018, ILPT acquired a multi-tenant, net leased property
located in Maple Grove, MN with approximately 319,000 rentable square
feet for a purchase price of $27.7 million, excluding acquisition
related costs. This property is 100% leased and has a remaining weighted
average (by revenue) lease term of approximately six years.
Conference Call:
At 10:00 a.m. Eastern Time this morning, President and Chief Executive
Officer, John Popeo, and Chief Financial Officer and Treasurer, Richard
Siedel, will host a conference call to discuss ILPT’s third quarter 2018
financial results. They will be joined by John Murray, who will assume
his role as President and Chief Executive Officer of the Company
effective December 1, 2018.
The conference call telephone number is (877) 270-2148. Participants
calling from outside the United States and Canada should dial (412)
902-6510. No pass code is necessary to access the call from either
number. Participants should dial in about 15 minutes prior to the
scheduled start of the call. A replay of the conference call will be
available through 11:59 p.m. on Friday, November 2, 2018. To access the
replay, dial (412) 317-0088. The replay pass code is 10123882.
A live audio webcast of the conference call will also be available in a
listen-only mode on ILPT's website, which is located at www.ilptreit.com.
Participants wanting to access the webcast should visit ILPT's website
about five minutes before the call. The archived webcast will be
available for replay on ILPT's website following the call for about one
week. The transcription, recording and retransmission in any way of
ILPT’s third quarter conference call are strictly prohibited without the
prior written consent of ILPT.
Supplemental Data:
A copy of ILPT’s Third Quarter 2018 Supplemental Operating and Financial
Data is available for download at ILPT’s website, which is located at www.ilptreit.com. ILPT’s
website is not incorporated as part of this press release.
Industrial Logistics Properties Trust is a real estate investment trust,
or REIT, that owns and leases industrial and logistics properties
throughout the United States. ILPT is managed by the operating
subsidiary of The RMR Group Inc. (Nasdaq: RMR), an alternative asset
management company that is headquartered in Newton, MA.
Please see the pages attached hereto for a more detailed statement of
ILPT’s operating results and financial condition and for an explanation
of ILPT’s calculation of NOI, Cash Basis NOI, same property NOI, same
property Cash Basis NOI, FFO and Normalized FFO and a reconciliation of
those amounts to amounts determined in accordance with GAAP.
WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER ILPT USES
WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”,
“ESTIMATE”, “WILL”, “MAY” AND NEGATIVES OR DERIVATIVES OF THESE OR
SIMILAR EXPRESSIONS, ILPT IS MAKING FORWARD LOOKING STATEMENTS. THESE
FORWARD LOOKING STATEMENTS ARE BASED UPON ILPT’S PRESENT INTENT, BELIEFS
OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO
OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
CONTAINED IN OR IMPLIED BY ILPT’S FORWARD LOOKING STATEMENTS AS A RESULT
OF VARIOUS FACTORS. FOR EXAMPLE:
-
THIS PRESS RELEASE STATES THAT SIR CURRENTLY PLANS TO DISTRIBUTE ALL
45,000,000 COMMON SHARES OF ILPT THAT SIR OWNS TO SIR'S SHAREHOLDERS
IN THE COMING MONTHS PURSUANT TO THE MERGER AGREEMENT. THIS
DISTRIBUTION IS SUBJECT TO THE SATISFACTION OF CERTAIN CONDITIONS,
INCLUDING, AMONG OTHER THINGS, OBTAINING THE REQUISITE SHAREHOLDER
APPROVALS WITH RESPECT TO THE MERGER CONTEMPLATED BY THE MERGER
AGREEMENT. ILPT CANNOT BE SURE WHEN OR IF THOSE CONDITIONS WILL BE
SATISFIED OR THAT SUCH DISTRIBUTION WILL OCCUR,
-
MR. POPEO STATES THAT ILPT NEGOTIATED A 194,000 SQUARE FOOT EXPANSION
FOR ONE OF ITS EXISTING INVESTMENT GRADE RATED TENANTS FOR AN
ESTIMATED YIELD OF 6.7% ON A PROJECT COST OF APPROXIMATELY $15.0
MILLION. IT IS DIFFICULT TO ACCURATELY ESTIMATE DEVELOPMENT AND TENANT
IMPROVEMENT COSTS. THIS DEVELOPMENT PROJECT MAY COST MORE OR LESS AND
MAY TAKE LONGER TO COMPLETE THAN ILPT CURRENTLY EXPECTS, AND ILPT MAY
INCUR INCREASING AMOUNTS FOR THESE PURPOSES IN THE FUTURE,
-
THE POSSIBLE EXPANSION AND DEVELOPMENT PROJECTS WITH EXISTING TENANTS
MENTIONED BY MR. POPEO IN THIS PRESS RELEASE MAY NOT BE REALIZED OR BE
SUCCESSFUL, AND
-
MR. POPEO'S STATEMENT IN THIS PRESS RELEASE THAT ILPT IS ENCOURAGED BY
ITS EXTERNAL AND INTERNAL GROWTH PROSPECTS MAY IMPLY THAT ILPT WILL
REALIZE FURTHER GROWTH AND THAT IT WILL BENEFIT FROM THAT GROWTH,
INCLUDING THAT ITS OPERATING RESULTS WILL IMPROVE AS A RESULT.
HOWEVER, ILPT'S ABILITY TO ACQUIRE AND LEASE PROPERTIES AS WELL AS
REALIZE INCREASED RENTS DEPENDS IN LARGE PART ON WHEN SUCH PROPERTIES
BECOME AVAILABLE FOR ACQUISITION OR LEASE, WHEN LEASES ARE NEGOTIATED
OR RENTS ARE RESET, OR MARKET CONDITIONS IN AREAS WHERE ILPT'S
PROPERTIES ARE LOCATED. MARKET CONDITIONS OFTEN CHANGE AND ARE BEYOND
ILPT'S CONTROL. IN THE FUTURE, ILPT MAY NOT MAKE ACQUISITIONS OR
NEGOTIATE EXPANSIONS, MAY EXPERIENCE INCREASING VACANCIES OR LOWER
RENTS AT ILPT'S OWNED PROPERTIES AND MAY EXPERIENCE A DECLINE OF ITS
OPERATING RESULTS.
THE INFORMATION CONTAINED IN ILPT’S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER “RISK FACTORS” IN ILPT’S
PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT
FACTORS THAT COULD CAUSE ILPT’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE STATED IN OR IMPLIED BY ILPT’S FORWARD LOOKING STATEMENTS. ILPT’S
FILINGS WITH THE SEC ARE AVAILABLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.
EXCEPT AS REQUIRED BY LAW, ILPT DOES NOT INTEND TO UPDATE OR CHANGE ANY
FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS
OR OTHERWISE.
|
|
|
Industrial Logistics Properties Trust
Condensed
Consolidated Statements of Income
(amounts in
thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income
|
|
|
|
$
|
34,781
|
|
|
|
$
|
33,624
|
|
|
|
$
|
103,470
|
|
|
|
$
|
100,921
|
|
|
Tenant reimbursements and other income
|
|
|
|
5,650
|
|
|
|
5,442
|
|
|
|
16,986
|
|
|
|
16,190
|
|
|
Total revenues
|
|
|
|
40,431
|
|
|
|
39,066
|
|
|
|
120,456
|
|
|
|
117,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate taxes
|
|
|
|
4,942
|
|
|
|
4,579
|
|
|
|
14,109
|
|
|
|
13,257
|
|
|
Other operating expenses
|
|
|
|
3,281
|
|
|
|
2,727
|
|
|
|
9,650
|
|
|
|
8,160
|
|
|
Depreciation and amortization
|
|
|
|
7,152
|
|
|
|
6,810
|
|
|
|
20,915
|
|
|
|
20,476
|
|
|
Acquisition and transaction related costs
|
|
|
|
—
|
|
|
|
925
|
|
|
|
—
|
|
|
|
925
|
|
|
General and administrative
|
|
|
|
2,924
|
|
|
|
546
|
|
|
|
8,386
|
|
|
|
7,746
|
|
|
Total expenses
|
|
|
|
18,299
|
|
|
|
15,587
|
|
|
|
53,060
|
|
|
|
50,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
22,132
|
|
|
|
23,479
|
|
|
|
67,396
|
|
|
|
66,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
71
|
|
|
|
—
|
|
|
|
134
|
|
|
|
—
|
|
|
Interest expense (including net amortization of debt issuance costs
and premiums of $309, ($77), $931 and ($225), respectively)
|
|
|
|
(4,052
|
)
|
|
|
(565
|
)
|
|
|
(11,406
|
)
|
|
|
(1,680
|
)
|
|
Income before income tax expense
|
|
|
|
18,151
|
|
|
|
22,914
|
|
|
|
56,124
|
|
|
|
64,867
|
|
|
Income tax expense
|
|
|
|
(9
|
)
|
|
|
(11
|
)
|
|
|
(24
|
)
|
|
|
(33
|
)
|
|
Net income
|
|
|
|
$
|
18,142
|
|
|
|
$
|
22,903
|
|
|
|
$
|
56,100
|
|
|
|
$
|
64,834
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - basic and diluted
|
|
|
|
65,022
|
|
|
|
45,000
|
|
|
|
63,839
|
|
|
|
45,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share - basic and diluted
|
|
|
|
$
|
0.28
|
|
|
|
$
|
0.51
|
|
|
|
$
|
0.88
|
|
|
|
$
|
1.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Logistics Properties Trust
Funds from
Operations and Normalized Funds from Operations
(1)
(amounts
in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
18,142
|
|
|
|
$
|
22,903
|
|
|
|
$
|
56,100
|
|
|
|
$
|
64,834
|
|
Plus:
|
|
depreciation and amortization
|
|
|
|
7,152
|
|
|
|
6,810
|
|
|
|
20,915
|
|
|
|
20,476
|
|
FFO
|
|
|
|
25,294
|
|
|
|
29,713
|
|
|
|
77,015
|
|
|
|
85,310
|
|
Plus:
|
|
acquisition and transaction related costs
|
|
|
|
—
|
|
|
|
925
|
|
|
|
—
|
|
|
|
925
|
|
Plus:
|
|
estimated business management incentive fees (2) |
|
|
|
—
|
|
|
|
(1,687
|
)
|
|
|
—
|
|
|
|
1,003
|
|
Normalized FFO
|
|
|
|
$
|
25,294
|
|
|
|
$
|
28,951
|
|
|
|
$
|
77,015
|
|
|
|
$
|
87,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - basic and diluted
|
|
|
|
65,022
|
|
|
|
45,000
|
|
|
|
63,839
|
|
|
|
45,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per common share - basic and diluted
|
|
|
|
$
|
0.39
|
|
|
|
$
|
0.66
|
|
|
|
$
|
1.21
|
|
|
|
$
|
1.90
|
|
Normalized FFO per common share - basic and diluted
|
|
|
|
$
|
0.39
|
|
|
|
$
|
0.64
|
|
|
|
$
|
1.21
|
|
|
|
$
|
1.94
|
|
Distributions declared per common share
|
|
|
|
$
|
0.33
|
|
|
|
$
|
—
|
|
|
|
$
|
0.60
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
ILPT calculates FFO and Normalized FFO as shown above. FFO is
calculated on the basis defined by The National Association of Real
Estate Investment Trusts, or Nareit, which is net income, calculated
in accordance with GAAP, plus real estate depreciation and
amortization, as well as certain other adjustments currently not
applicable to ILPT. ILPT’s calculation of Normalized FFO differs
from Nareit’s definition of FFO because ILPT includes business
management incentive fees, if any, only in the fourth quarter versus
the quarter when they are recognized as expense in accordance with
GAAP due to their quarterly volatility not necessarily being
indicative of ILPT’s core operating performance and the uncertainty
as to whether any such business management incentive fees will be
payable when all contingencies for determining such fees are known
at the end of the calendar year and ILPT excludes acquisition and
transaction related costs expensed under GAAP. ILPT considers FFO
and Normalized FFO to be appropriate supplemental measures of
operating performance for a REIT, along with net income and
operating income. ILPT believes that FFO and Normalized FFO provide
useful information to investors because by excluding the effects of
certain historical amounts, such as depreciation expense, FFO and
Normalized FFO may facilitate a comparison of its operating
performance between periods and with other REITs. FFO and Normalized
FFO are among the factors considered by ILPT’s Board of Trustees
when determining the amount of distributions to ILPT’s shareholders.
Other factors include, but are not limited to, requirements to
qualify for taxation as a REIT, limitations in ILPT’s credit
agreement, the availability to ILPT of debt and equity capital,
ILPT’s expectation of its future capital requirements and operating
performance and ILPT’s expected needs for and availability of cash
to pay its obligations. FFO and Normalized FFO do not represent cash
generated by operating activities in accordance with GAAP and should
not be considered alternatives to net income or operating income as
indicators of ILPT’s operating performance or as measures of ILPT’s
liquidity. These measures should be considered in conjunction with
net income and operating income as presented in ILPT’s condensed
consolidated statements of income. Other real estate companies and
REITs may calculate FFO and Normalized FFO differently than ILPT
does.
|
|
|
|
|
(2)
|
|
Incentive fees under ILPT's and SIR’s business management agreements
with The RMR Group LLC are payable after the end of each calendar
year, are calculated based on common share total return, as defined
in the respective agreements, and are included in general and
administrative expense in ILPT's condensed consolidated statements
of income. In calculating net income in accordance with GAAP, ILPT
recognizes estimated business management incentive fee expense, if
any, in the first, second and third quarters. Although ILPT
recognizes this expense, if any, in the first, second and third
quarters for purposes of calculating net income, ILPT does not
include such expense in the calculation of Normalized FFO until the
fourth quarter, when the amount of the business management incentive
fee expense for the calendar year, if any, is determined. Normalized
FFO excludes (i) the reversal of $1,687 of previously accrued
estimated business management incentive fees for the three months
ended September 30, 2017 and (ii) estimated business management
incentive fee expense of $1,003 for the nine months ended September
30, 2017, both of which represent the portion of SIR's estimated
business management incentive fee allocated to ILPT for the period
during which ILPT was SIR's wholly owned subsidiary.
|
|
|
|
|
|
|
Industrial Logistics Properties Trust
Calculation
and Reconciliation of Property Net Operating Income and Cash Basis
Net Operating Income
(1)
(dollars in
thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Calculation of NOI and Cash Basis NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income
|
|
|
|
$
|
34,781
|
|
|
|
$
|
33,624
|
|
|
|
$
|
103,470
|
|
|
|
$
|
100,921
|
|
|
Tenant reimbursements and other income
|
|
|
|
5,650
|
|
|
|
5,442
|
|
|
|
16,986
|
|
|
|
16,190
|
|
|
Real estate taxes
|
|
|
|
(4,942
|
)
|
|
|
(4,579
|
)
|
|
|
(14,109
|
)
|
|
|
(13,257
|
)
|
|
Other operating expenses
|
|
|
|
(3,281
|
)
|
|
|
(2,727
|
)
|
|
|
(9,650
|
)
|
|
|
(8,160
|
)
|
|
NOI
|
|
|
|
32,208
|
|
|
|
31,760
|
|
|
|
96,697
|
|
|
|
95,694
|
|
|
Non-cash straight line rent adjustments included in rental income (2) |
|
|
|
(1,128
|
)
|
|
|
(1,476
|
)
|
|
|
(3,360
|
)
|
|
|
(4,421
|
)
|
|
Lease value amortization included in rental income (2) |
|
|
|
(92
|
)
|
|
|
(97
|
)
|
|
|
(295
|
)
|
|
|
(289
|
)
|
|
Non-cash amortization included in other operating expenses (3) |
|
|
|
—
|
|
|
|
(138
|
)
|
|
|
—
|
|
|
|
(414
|
)
|
|
Cash Basis NOI
|
|
|
|
$
|
30,988
|
|
|
|
$
|
30,049
|
|
|
|
$
|
93,042
|
|
|
|
$
|
90,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to NOI and Cash Basis NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
18,142
|
|
|
|
$
|
22,903
|
|
|
|
$
|
56,100
|
|
|
|
$
|
64,834
|
|
|
Income tax expense
|
|
|
|
9
|
|
|
|
11
|
|
|
|
24
|
|
|
|
33
|
|
|
Income before income tax expense
|
|
|
|
18,151
|
|
|
|
22,914
|
|
|
|
56,124
|
|
|
|
64,867
|
|
|
Interest expense
|
|
|
|
4,052
|
|
|
|
565
|
|
|
|
11,406
|
|
|
|
1,680
|
|
|
Interest income
|
|
|
|
(71
|
)
|
|
|
—
|
|
|
|
(134
|
)
|
|
|
—
|
|
|
Operating income
|
|
|
|
22,132
|
|
|
|
23,479
|
|
|
|
67,396
|
|
|
|
66,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
|
2,924
|
|
|
|
546
|
|
|
|
8,386
|
|
|
|
7,746
|
|
|
Acquisition and transaction related costs
|
|
|
|
—
|
|
|
|
925
|
|
|
|
—
|
|
|
|
925
|
|
|
Depreciation and amortization
|
|
|
|
7,152
|
|
|
|
6,810
|
|
|
|
20,915
|
|
|
|
20,476
|
|
|
NOI
|
|
|
|
32,208
|
|
|
|
31,760
|
|
|
|
96,697
|
|
|
|
95,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash straight line rent adjustments included in rental income (2) |
|
|
|
(1,128
|
)
|
|
|
(1,476
|
)
|
|
|
(3,360
|
)
|
|
|
(4,421
|
)
|
|
Lease value amortization included in rental income (2) |
|
|
|
(92
|
)
|
|
|
(97
|
)
|
|
|
(295
|
)
|
|
|
(289
|
)
|
|
Non-cash amortization included in other operating expenses (3) |
|
|
|
—
|
|
|
|
(138
|
)
|
|
|
—
|
|
|
|
(414
|
)
|
|
Cash Basis NOI
|
|
|
|
$
|
30,988
|
|
|
|
$
|
30,049
|
|
|
|
$
|
93,042
|
|
|
|
$
|
90,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The calculations of NOI and Cash Basis NOI exclude certain
components of net income in order to provide results that are more
closely related to ILPT’s property level results of operations. ILPT
calculates NOI and Cash Basis NOI as shown above. ILPT defines NOI
as income from its rental of real estate less its property operating
expenses. NOI excludes amortization of capitalized tenant
improvement costs and leasing commissions that ILPT records as
depreciation and amortization. ILPT defines Cash Basis NOI as NOI
excluding non-cash straight line rent adjustments, lease value
amortization, lease termination fees, if any, and non-cash
amortization included in other operating expenses. ILPT considers
NOI and Cash Basis NOI to be appropriate supplemental measures to
net income because they may help both investors and management to
understand the operations of ILPT’s properties. ILPT uses NOI and
Cash Basis NOI to evaluate individual and company wide property
level performance, and ILPT believes that NOI and Cash Basis NOI
provide useful information to investors regarding its results of
operations because they reflect only those income and expense items
that are generated and incurred at the property level and may
facilitate comparisons of ILPT’s operating performance between
periods and with other REITs. NOI and Cash Basis NOI do not
represent cash generated by operating activities in accordance with
GAAP and should not be considered alternatives to net income or
operating income as indicators of ILPT’s operating performance or as
measures of ILPT’s liquidity. These measures should be considered in
conjunction with net income and operating income as presented in
ILPT’s condensed consolidated statements of income. Other real
estate companies and REITs may calculate NOI and Cash Basis NOI
differently than ILPT does.
|
|
|
|
|
(2)
|
|
ILPT reports rental income on a straight line basis over the terms
of the respective leases; accordingly, rental income includes
non-cash straight line rent adjustments. Rental income also includes
non-cash amortization of intangible lease assets and liabilities and
lease termination fees, if any.
|
|
|
|
|
(3)
|
|
The amounts for the three and nine months ended September 30, 2017,
respectively, represent the portion of SIR's non-cash amortization
included in other operating expenses allocated to ILPT for the
period during which ILPT was SIR's wholly owned subsidiary.
|
|
|
|
|
|
|
Industrial Logistics Properties Trust
Reconciliation
of Net Operating Income to Same Property Net Operating Income and
Calculation of Same Property Cash Basis Net Operating Income
(1)
(dollars in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Reconciliation of NOI to Same Property NOI
(2)(3)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income
|
|
|
|
$
|
34,781
|
|
|
|
$
|
33,624
|
|
|
|
$
|
103,470
|
|
|
|
$
|
100,921
|
|
|
Tenant reimbursements and other income
|
|
|
|
5,650
|
|
|
|
5,442
|
|
|
|
16,986
|
|
|
|
16,190
|
|
|
Real estate taxes
|
|
|
|
(4,942
|
)
|
|
|
(4,579
|
)
|
|
|
(14,109
|
)
|
|
|
(13,257
|
)
|
|
Other operating expenses
|
|
|
|
(3,281
|
)
|
|
|
(2,727
|
)
|
|
|
(9,650
|
)
|
|
|
(8,160
|
)
|
|
NOI
|
|
|
|
32,208
|
|
|
|
31,760
|
|
|
|
96,697
|
|
|
|
95,694
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI of properties not included in same property results
|
|
|
|
(579
|
)
|
|
|
—
|
|
|
|
(603
|
)
|
|
|
—
|
|
|
Same property NOI
|
|
|
|
$
|
31,629
|
|
|
|
$
|
31,760
|
|
|
|
$
|
96,094
|
|
|
|
$
|
95,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Same Property Cash Basis NOI
(2)(3)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same property NOI
|
|
|
|
$
|
31,629
|
|
|
|
$
|
31,760
|
|
|
|
$
|
96,094
|
|
|
|
$
|
95,694
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash straight line rent adjustments included in rental income (4) |
|
|
|
(1,052
|
)
|
|
|
(1,476
|
)
|
|
|
(3,281
|
)
|
|
|
(4,421
|
)
|
|
Lease value amortization included in rental income (4) |
|
|
|
(92
|
)
|
|
|
(97
|
)
|
|
|
(295
|
)
|
|
|
(289
|
)
|
|
Non-cash amortization included in other operating expenses (5) |
|
|
|
—
|
|
|
|
(138
|
)
|
|
|
—
|
|
|
|
(414
|
)
|
|
Same property Cash Basis NOI
|
|
|
|
$
|
30,485
|
|
|
|
$
|
30,049
|
|
|
|
$
|
92,518
|
|
|
|
$
|
90,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
See footnote (1) on page 8 of this press release for the definitions
of NOI and Cash Basis NOI, a description of why ILPT believes they
are appropriate supplemental measures and a description of how ILPT
uses these measures.
|
|
|
|
|
(2)
|
|
For the three months ended September 30, 2018, same property NOI and
same property Cash Basis NOI are based on properties that ILPT owned
(including for the period SIR owned ILPT's properties prior to the
IPO) as of September 30, 2018, and which it owned continuously since
July 1, 2017.
|
|
|
|
|
(3)
|
|
For the nine months ended September 30, 2018, same property NOI and
same property Cash Basis NOI are based on properties ILPT owned
(including for the period SIR owned ILPT's properties prior to the
IPO) as of September 30, 2018, and which it owned continuously since
January 1, 2017.
|
|
|
|
|
(4)
|
|
ILPT reports rental income on a straight line basis over the terms
of the respective leases; accordingly, rental income includes
non-cash straight line rent adjustments. Rental income also includes
non-cash amortization of intangible lease assets and liabilities and
lease termination fees, if any.
|
|
|
|
|
(5)
|
|
The amounts for the three and nine months ended September 30, 2017,
respectively, represent the portion of SIR's non-cash amortization
included in other operating expenses allocated to ILPT for the
period during which ILPT was SIR's wholly owned subsidiary.
|
|
|
|
|
|
|
Industrial Logistics Properties Trust
Condensed
Consolidated Balance Sheets
(dollars in thousands,
except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2018
|
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Real estate properties:
|
|
|
|
|
|
|
|
|
Land
|
|
|
|
$
|
666,526
|
|
|
|
$
|
642,706
|
|
|
Buildings and improvements
|
|
|
|
767,888
|
|
|
|
700,896
|
|
|
|
|
|
1,434,414
|
|
|
|
1,343,602
|
|
|
Accumulated depreciation
|
|
|
|
(88,278
|
)
|
|
|
(74,614
|
)
|
|
|
|
|
1,346,136
|
|
|
|
1,268,988
|
|
|
Acquired real estate leases, net
|
|
|
|
75,550
|
|
|
|
79,103
|
|
|
Cash and cash equivalents
|
|
|
|
11,100
|
|
|
|
—
|
|
|
Rents receivable, including straight line rents of $53,537 and
$50,177, respectively, net of allowance for doubtful accounts of
$1,241, for both periods presented
|
|
|
|
55,606
|
|
|
|
51,672
|
|
|
Debt issuance costs, net
|
|
|
|
4,800
|
|
|
|
1,724
|
|
|
Deferred leasing costs, net
|
|
|
|
5,155
|
|
|
|
5,254
|
|
|
Due from related persons
|
|
|
|
1,433
|
|
|
|
—
|
|
|
Other assets, net
|
|
|
|
6,849
|
|
|
|
4,942
|
|
|
Total assets
|
|
|
|
$
|
1,506,629
|
|
|
|
$
|
1,411,683
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Revolving credit facility
|
|
|
|
$
|
380,000
|
|
|
|
$
|
750,000
|
|
|
Mortgage note payable, net
|
|
|
|
49,251
|
|
|
|
49,427
|
|
|
Assumed real estate lease obligations, net
|
|
|
|
18,826
|
|
|
|
20,384
|
|
|
Accounts payable and other liabilities
|
|
|
|
11,805
|
|
|
|
11,082
|
|
|
Rents collected in advance
|
|
|
|
7,669
|
|
|
|
5,794
|
|
|
Security deposits
|
|
|
|
5,895
|
|
|
|
5,674
|
|
|
Due to related persons
|
|
|
|
1,976
|
|
|
|
7,114
|
|
|
Total liabilities
|
|
|
|
475,422
|
|
|
|
849,475
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
Common shares of beneficial interest, $.01 par value: 100,000,000
shares authorized; 65,072,031 and 45,000,000 shares issued and
outstanding, respectively
|
|
|
|
651
|
|
|
|
450
|
|
|
Additional paid in capital
|
|
|
|
998,195
|
|
|
|
546,489
|
|
|
Cumulative net income
|
|
|
|
71,369
|
|
|
|
15,269
|
|
|
Cumulative common distributions
|
|
|
|
(39,008
|
)
|
|
|
—
|
|
|
Total shareholders' equity
|
|
|
|
1,031,207
|
|
|
|
562,208
|
|
|
Total liabilities and shareholders' equity
|
|
|
|
$
|
1,506,629
|
|
|
|
$
|
1,411,683
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A Maryland Real Estate Investment Trust with transferable shares of
beneficial interest listed on the Nasdaq.
No shareholder,
Trustee or officer is personally liable for any act or obligation of the
Trust.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20181026005083/en/
Industrial Logistics Properties Trust
Olivia Snyder, 617-219-1489
Manager,
Investor Relations
Source: Industrial Logistics Properties Trust