Fourth Quarter Net Income of $0.28 Per Share
Fourth Quarter Normalized FFO of $0.40 Per Share
NEWTON, Mass.--(BUSINESS WIRE)--
Industrial Logistics Properties Trust (Nasdaq: ILPT) today announced
financial results for the quarter and year ended December 31, 2018.
John Murray, President and Chief Executive Officer of ILPT, made the
following statement:
"During the fourth quarter, we continued to execute on our business plan
with strong leasing activity and the previously disclosed acquisitions
of one property in Maple Grove, Minnesota, and one land parcel in
Ankeny, Iowa, which we plan to use for an expansion project for an
existing tenant. We entered new and renewal leases and completed rent
resets for approximately 1.9 million square feet that resulted in
weighted average rental rates that were 23.7% higher than prior rental
rates for the same space, with a weighted average lease term of 14.4
years for the new and renewal leases.
"In February 2019, ILPT entered agreements to acquire a portfolio of
eight properties with 4.2 million square feet for an aggregate purchase
price of $280.0 million and a portfolio of 18 properties with 8.7
million square feet for an aggregate purchase price of $625.3 million.
ILPT completed the acquisition of seven properties in the eight property
portfolio on February 14, 2019. The acquisitions of the remaining
properties in both portfolios are expected to occur by April 15, 2019.
In addition, we announced a 10-year $650 million mortgage financing on a
portfolio of our Hawaii properties, proceeds of which were used to term
out our floating rate debt and to fund acquisitions. This less than 50%
loan-to-value financing highlights and unlocks the under appreciated
value and quality in our Hawaii assets."
Results for the Quarter Ended December 31, 2018:
Net income for the quarter ended December 31, 2018 was $18.3 million, or
$0.28 per diluted share, compared to $15.3 million for the same quarter
last year. Normalized funds from operations, or Normalized FFO, for the
quarter ended December 31, 2018 were $25.9 million, or $0.40 per diluted
share, compared to $21.2 million for the same quarter last year.
ILPT was formed in 2017 as a wholly owned subsidiary of Select Income
REIT, or SIR, a former publicly traded real estate investment trust, or
REIT, that merged with Office Properties Income Trust (Nasdaq: OPI)
(formerly Government Properties Income Trust) on December 31, 2018. 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 previously owned 45,000,000 of ILPT's outstanding common shares. On
December 27, 2018, SIR distributed all 45,000,000 common shares of ILPT
that SIR owned to SIR's shareholders of record as of the close of
business on December 20, 2018.
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
December 31, 2018 and 2017 appear later in this press release.
Results for the Year Ended
December 31, 2018:
Net income for the year ended December 31, 2018 was $74.4 million, or
$1.16 per diluted share, compared to $80.1 million for the year ended
December 31, 2017. Normalized FFO for the year ended December 31, 2018
were $103.0 million, or $1.61 per diluted share, compared to $108.4
million for the year ended December 31, 2017.
Reconciliations of net income determined in accordance with GAAP to FFO
and to Normalized FFO for the years ended December 31, 2018 and 2017
appear later in this press release.
Leasing, Occupancy and Same Property Results:
During the quarter ended December 31, 2018, ILPT entered new and renewal
leases and completed rent resets for approximately 1,872,000 square
feet, which resulted in weighted average (by square feet) rental rates
that were approximately 23.7% higher than prior rental rates for the
same space, with a weighted average (by square feet) lease term of 14.4
years for new and renewal leases. Commitments for leasing capital and
concessions for new and renewal leases totaled approximately $1.6
million, or approximately $0.06 per square foot per lease year.
As of December 31, 2018, 99.3% of ILPT’s total rentable square feet was
leased, compared to 99.3% as of September 30, 2018 and 99.9% as of
December 31, 2017. Occupancy for properties owned continuously since
October 1, 2017, or on a same property basis, decreased to 99.2% at
December 31, 2018 from 99.9% at December 31, 2017. Same property cash
basis net operating income, or Cash Basis NOI, increased 1.2% for the
quarter ended December 31, 2018 compared to the quarter ended
December 31, 2017, primarily as a result of contractual rent increases
and leasing activity at certain properties since October 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 years ended December 31, 2018
and 2017 appear later in this press release.
Recent Investment Activities:
As previously disclosed, 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.
Also as previously disclosed, in October 2018, ILPT acquired a
multi-tenant, net leased property located in Maple Grove, MN with
319,062 rentable square feet for a purchase price of $27.7 million,
excluding acquisition related costs. This property is 100% leased and
had a remaining weighted average (by revenue) lease term of
approximately six years as of the acquisition date.
In February 2019, ILPT entered an agreement to acquire a portfolio of
eight industrial properties located in the Indianapolis and Cincinnati
market areas with an aggregate of approximately 4.2 million rentable
square feet for a purchase price of $280.0 million, excluding
acquisition related costs. ILPT completed the acquisition of seven of
the eight properties on February 14, 2019. The acquisition of the
remaining property is expected to occur by April 15, 2019. These
properties are 100% leased to ten tenants and have a remaining weighted
average (by revenue) lease term of approximately four years.
Also in February 2019, ILPT entered an agreement to acquire a portfolio
of 18 industrial properties located in 12 states with an aggregate of
approximately 8.7 million rentable square feet for a purchase price of
$625.3 million, excluding acquisition related costs and including the
assumption of $57.0 million of mortgage debt. This acquisition is
expected to occur by April 15, 2019. These properties are 100% leased to
13 tenants and have a remaining weighted average (by revenue) lease term
of approximately nine years.
Recent Financing Activities:
On January 29, 2019, ILPT obtained a $650.0 million mortgage loan
secured by 186 of its properties (178 land parcels and eight buildings)
containing approximately 9.6 million square feet located on the island
of Oahu, Hawaii. The non-amortizing loan matures on February 7, 2029 and
requires monthly interest payments at a fixed rate of 4.31% per annum.
ILPT used the proceeds from this loan to repay outstanding borrowings
under its $750.0 million unsecured revolving credit facility and to fund
acquisitions.
Conference Call:
At 10:00 a.m. Eastern Time this morning, President and Chief Executive
Officer, John Murray, and Chief Financial Officer and Treasurer, Richard
Siedel, will host a conference call to discuss ILPT’s fourth quarter and
full year 2018 financial results.
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 Wednesday, February 27, 2019. To access
the replay, dial (412) 317-0088. The replay pass code is 10127678.
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 fourth quarter conference call are
strictly prohibited without the prior written consent of ILPT.
Supplemental Data:
A copy of ILPT’s Fourth 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.
ILPT is a 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:
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MR. MURRAY'S STATEMENT IN THIS PRESS RELEASE THAT ILPT ENTERED INTO
NEW AND RENEWAL LEASES AND COMPLETED RENT RESETS THAT RESULTED IN
HIGHER AVERAGE RENTAL RATES MAY IMPLY THAT ILPT'S LEASING ACTIVITY
WILL CONTINUE TO GROW IN THE FUTURE. HOWEVER, ILPT'S ABILITY TO LEASE
ITS PROPERTIES DEPENDS IN LARGE PART ON MARKET CONDITIONS IN AREAS
WHERE ILPT'S PROPERTIES ARE LOCATED WHEN SUCH PROPERTIES BECOME
AVAILABLE FOR LEASE OR WHEN LEASES ARE NEGOTIATED OR RENTS ARE RESET.
LEASING MARKET CONDITIONS OFTEN CHANGE AND ARE GENERALLY BEYOND ILPT'S
CONTROL. IN THE FUTURE, ILPT MAY EXPERIENCE INCREASING VACANCIES OR
LOWER RENTS AT ITS PROPERTIES AND ITS OPERATING RESULTS MAY DECLINE,
-
THIS PRESS RELEASE STATES THAT PROCEEDS FROM THE $650.0 MILLION
MORTGAGE LOAN WERE USED TO TERM OUT BORROWINGS UNDER ILPT'S CREDIT
FACILITY, WHICH HAVE A FLOATING RATE. HOWEVER, ILPT EXPECTS TO BORROW
AMOUNTS UNDER ITS CREDIT FACILITY IN THE FUTURE, WHICH WILL OBLIGATE
ILPT TO PAY INTEREST ON THE BORROWINGS AT A FLOATING RATE. FURTHER,
ILPT MAY INCUR ADDITIONAL DEBT IN THE FUTURE AND ILPT MAY BE OBLIGATED
TO PAY INTEREST ON ANY SUCH BORROWINGS AT FLOATING RATES,
-
MR. MURRAY STATES THAT ILPT ENTERED AGREEMENTS TO ACQUIRE A PORTFOLIO
OF EIGHT PROPERTIES FOR AN AGGREGATE PURCHASE PRICE OF $280.0 MILLION
AND A PORTFOLIO OF 18 PROPERTIES FOR AN AGGREGATE PURCHASE PRICE OF
$625.3 MILLION, AND THAT ILPT COMPLETED THE ACQUISITION OF SEVEN
PROPERTIES IN THE EIGHT PROPERTY PORTFOLIO IN FEBRUARY 2019 AND THE
ACQUISITIONS OF THE REMAINING PROPERTIES IN BOTH PORTFOLIOS ARE
EXPECTED TO OCCUR BY APRIL 15, 2019. THE REMAINING ACQUISITIONS ARE
SUBJECT TO CONDITIONS. THESE CONDITIONS MAY NOT BE MET AND THESE
ACQUISITIONS MAY NOT OCCUR, MAY BE DELAYED OR THE TERMS MAY CHANGE, AND
-
MR. MURRAY’S STATEMENT THAT ILPT’S HAWAII PROPERTIES HAVE UNDER
APPRECIATED VALUE AND QUALITY MAY IMPLY THAT THOSE PROPERTIES AND
OTHER PROPERTIES OF ILPT WILL MAINTAIN AND INCREASE IN VALUE AND
REMAIN OF HIGH QUALITY AND THAT THE REMAINING UNMORTGAGED VALUE OF
ILPT'S PROPERTIES MAY BE A FUTURE FINANCING SOURCE FOR ILPT. HOWEVER,
ILPT’S PROPERTIES COULD DECLINE IN VALUE OR QUALITY IF ILPT DOES NOT
SUCCESSFULLY OPERATE THEM, IF ILPT INCURS LIABILITIES WITH RESPECT TO
THE PROPERTIES, IF REGULATORY REQUIREMENTS THAT MAY APPLY TO THE
PROPERTIES RESTRICT THEIR VALUE OR DUE TO MARKET CONDITIONS OR OTHER
REASONS. IN ADDITION, ILPT MAY NOT BE ABLE TO UTILIZE THE UNMORTGAGED
VALUE OF ILPT'S PROPERTIES FOR FUTURE FINANCINGS, PARTICULARLY SINCE
THE HAWAII PROPERTIES ARE ALREADY ENCUMBERED WITH A MORTGAGE LOAN.
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.
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Industrial Logistics Properties Trust
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Consolidated Statements of Income
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(amounts in thousands, except per share data)
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(unaudited)
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Three Months Ended December 31,
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Year Ended December 31,
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2018
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2017
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2018
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2017
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Revenues:
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Rental income
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$
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35,841
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$
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33,905
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$
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139,311
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$
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134,826
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Tenant reimbursements and other income
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6,233
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5,490
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23,219
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21,680
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Total revenues
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42,074
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39,395
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162,530
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156,506
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Expenses:
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Real estate taxes
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5,233
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4,611
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19,342
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17,868
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Other operating expenses
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3,355
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2,753
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13,005
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10,913
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Depreciation and amortization
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7,660
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6,839
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28,575
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27,315
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Acquisition and transaction related costs
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—
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100
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—
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1,025
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General and administrative
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2,921
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9,053
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11,307
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16,799
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Total expenses
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19,169
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23,356
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72,229
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73,920
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Interest income
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66
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—
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200
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—
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Interest expense (including net amortization of debt issuance costs
and premiums of $313, ($269), $1,244 and ($494), respectively)
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(4,675
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)
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(759
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)
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(16,081
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)
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(2,439
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)
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Income before income tax expense
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18,296
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15,280
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74,420
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80,147
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Income tax expense
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(8
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)
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(11
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)
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(32
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)
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(44
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Net income
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$
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18,288
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$
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15,269
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$
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74,388
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$
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80,103
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Weighted average common shares outstanding - basic
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65,029
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45,000
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64,139
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45,000
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Weighted average common shares outstanding - diluted
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65,032
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|
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45,000
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64,140
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45,000
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Net income per common share - basic and diluted
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$
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0.28
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$
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0.34
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$
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1.16
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$
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1.78
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Industrial Logistics Properties Trust
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Funds from Operations and Normalized Funds from Operations
(1)
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(amounts in thousands, except per share data)
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(unaudited)
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Three Months Ended December 31,
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Year Ended December 31,
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2018
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2017
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2018
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2017
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Net income
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$
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18,288
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$
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15,269
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$
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74,388
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$
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80,103
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Plus: depreciation and amortization
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7,660
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6,839
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28,575
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27,315
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FFO
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25,948
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22,108
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102,963
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107,418
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Plus: acquisition and transaction related costs
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—
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100
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—
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1,025
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Plus: business management incentive fees (2)
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—
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(1,003
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)
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—
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—
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Normalized FFO
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$
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25,948
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$
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21,205
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$
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102,963
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$
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108,443
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Weighted average common shares outstanding - basic
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65,029
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45,000
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64,139
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45,000
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Weighted average common shares outstanding - diluted
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65,032
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45,000
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64,140
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45,000
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FFO per common share - basic and diluted
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$
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0.40
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$
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0.49
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$
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1.61
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$
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2.39
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Normalized FFO per common share - basic and diluted
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$
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0.40
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$
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0.47
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$
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1.61
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$
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2.41
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Distributions declared per common share
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$
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0.33
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$
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—
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$
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0.93
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$
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—
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(1)
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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. 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 as indicators of ILPT’s operating performance or as
measures of ILPT’s liquidity. These measures should be considered in
conjunction with net income as presented in ILPT’s consolidated
statements of income. Other real estate companies and REITs may
calculate FFO and Normalized FFO differently than ILPT does.
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(2)
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Incentive fees under ILPT'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 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
for both the three months and year ended December 31, 2017 include
business management incentive fee expense of $7,660, which
represents the portion of SIR's business management incentive fee
allocated to ILPT, and which was paid by SIR and not ILPT for the
period during which ILPT was SIR's wholly owned subsidiary.
Excluding business management incentive fee expense, Normalized FFO
would have been $28,865 and $116,103 for the three months and year
ended December 31, 2017, respectively.
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Industrial Logistics Properties Trust
|
|
Calculation and Reconciliation of Property Net Operating Income
and Cash Basis Net Operating Income
(1)
|
|
(dollars in thousands)
|
|
(unaudited)
|
|
|
|
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Three Months Ended December 31,
|
|
|
Year Ended December 31,
|
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|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
Calculation of NOI and Cash Basis NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income
|
|
|
|
$
|
35,841
|
|
|
$
|
33,905
|
|
|
|
$
|
139,311
|
|
|
$
|
134,826
|
|
|
Tenant reimbursements and other income
|
|
|
|
6,233
|
|
|
5,490
|
|
|
|
23,219
|
|
|
21,680
|
|
|
Real estate taxes
|
|
|
|
(5,233
|
)
|
|
(4,611
|
)
|
|
|
(19,342
|
)
|
|
(17,868
|
)
|
|
Other operating expenses
|
|
|
|
(3,355
|
)
|
|
(2,753
|
)
|
|
|
(13,005
|
)
|
|
(10,913
|
)
|
|
NOI
|
|
|
|
33,486
|
|
|
32,031
|
|
|
|
130,183
|
|
|
127,725
|
|
|
Non-cash straight line rent adjustments included in rental income (2) |
|
|
|
(1,379
|
)
|
|
(1,341
|
)
|
|
|
(4,739
|
)
|
|
(5,762
|
)
|
|
Lease value amortization included in rental income (2) |
|
|
|
(106
|
)
|
|
(101
|
)
|
|
|
(401
|
)
|
|
(390
|
)
|
|
Lease termination fees included in rental income (2) |
|
|
|
—
|
|
|
(168
|
)
|
|
|
—
|
|
|
(168
|
)
|
|
Non-cash amortization included in other operating expenses (3) |
|
|
|
—
|
|
|
(139
|
)
|
|
|
—
|
|
|
(553
|
)
|
|
Cash Basis NOI
|
|
|
|
$
|
32,001
|
|
|
$
|
30,282
|
|
|
|
$
|
125,043
|
|
|
$
|
120,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to NOI and Cash Basis NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
18,288
|
|
|
$
|
15,269
|
|
|
|
$
|
74,388
|
|
|
$
|
80,103
|
|
|
Income tax expense
|
|
|
|
8
|
|
|
11
|
|
|
|
32
|
|
|
44
|
|
|
Income before income tax expense
|
|
|
|
18,296
|
|
|
15,280
|
|
|
|
74,420
|
|
|
80,147
|
|
|
Interest expense
|
|
|
|
4,675
|
|
|
759
|
|
|
|
16,081
|
|
|
2,439
|
|
|
Interest income
|
|
|
|
(66
|
)
|
|
—
|
|
|
|
(200
|
)
|
|
—
|
|
|
General and administrative
|
|
|
|
2,921
|
|
|
9,053
|
|
|
|
11,307
|
|
|
16,799
|
|
|
Acquisition and transaction related costs
|
|
|
|
—
|
|
|
100
|
|
|
|
—
|
|
|
1,025
|
|
|
Depreciation and amortization
|
|
|
|
7,660
|
|
|
6,839
|
|
|
|
28,575
|
|
|
27,315
|
|
|
NOI
|
33,486
|
|
|
32,031
|
|
|
|
130,183
|
|
|
127,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash straight line rent adjustments included in rental income (2) |
|
|
|
(1,379
|
)
|
|
(1,341
|
)
|
|
|
(4,739
|
)
|
|
(5,762
|
)
|
|
Lease value amortization included in rental income (2) |
|
|
|
(106
|
)
|
|
(101
|
)
|
|
|
(401
|
)
|
|
(390
|
)
|
|
Lease termination fees included in rental income (2) |
|
|
|
—
|
|
|
(168
|
)
|
|
|
—
|
|
|
(168
|
)
|
|
Non-cash amortization included in other operating expenses (3) |
|
|
|
—
|
|
|
(139
|
)
|
|
|
—
|
|
|
(553
|
)
|
|
Cash Basis NOI
|
|
|
|
$
|
32,001
|
|
|
$
|
30,282
|
|
|
|
$
|
125,043
|
|
|
$
|
120,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See footnotes on page 10.
|
(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 as
indicators of ILPT’s operating performance or as measures of ILPT’s
liquidity. These measures should be considered in conjunction with
net income as presented in ILPT’s 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 months and year ended December 31, 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 December 31,
|
|
|
Year Ended December 31,
|
|
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
Reconciliation of NOI to Same Property NOI
(2)(3)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income
|
|
|
|
$
|
35,841
|
|
|
$
|
33,905
|
|
|
|
$
|
139,311
|
|
|
$
|
134,826
|
|
|
Tenant reimbursements and other income
|
|
|
|
6,233
|
|
|
5,490
|
|
|
|
23,219
|
|
|
21,680
|
|
|
Real estate taxes
|
|
|
|
(5,233
|
)
|
|
(4,611
|
)
|
|
|
(19,342
|
)
|
|
(17,868
|
)
|
|
Other operating expenses
|
|
|
|
(3,355
|
)
|
|
(2,753
|
)
|
|
|
(13,005
|
)
|
|
(10,913
|
)
|
|
NOI
|
|
|
|
33,486
|
|
|
32,031
|
|
|
|
130,183
|
|
|
127,725
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI of properties not included in same property results
|
|
|
|
(1,527
|
)
|
|
—
|
|
|
|
(2,130
|
)
|
|
—
|
|
|
Same property NOI
|
|
|
|
$
|
31,959
|
|
|
$
|
32,031
|
|
|
|
$
|
128,053
|
|
|
$
|
127,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Same Property Cash Basis NOI
(2)(3)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
Same property NOI
|
|
|
|
$
|
31,959
|
|
|
$
|
32,031
|
|
|
|
$
|
128,053
|
|
|
$
|
127,725
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash straight line rent adjustments included in rental income (4) |
|
|
|
(1,196
|
)
|
|
(1,341
|
)
|
|
|
(4,477
|
)
|
|
(5,762
|
)
|
|
Lease value amortization included in rental income (4) |
|
|
|
(105
|
)
|
|
(101
|
)
|
|
|
(400
|
)
|
|
(390
|
)
|
|
Lease termination fees included in rental income (4) |
|
|
|
—
|
|
|
(168
|
)
|
|
|
—
|
|
|
(168
|
)
|
|
Non-cash amortization included in other operating expenses (5) |
|
|
|
—
|
|
|
(139
|
)
|
|
|
—
|
|
|
(553
|
)
|
|
Same property Cash Basis NOI
|
|
|
|
$
|
30,658
|
|
|
$
|
30,282
|
|
|
|
$
|
123,176
|
|
|
$
|
120,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
See footnote (1) on page 9 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 December 31, 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 December 31, 2018, and which it owned continuously since
October 1, 2017.
|
|
|
|
|
(3)
|
|
For the year ended December 31, 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 December 31, 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 months and year ended December 31, 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
|
|
Consolidated Balance Sheets
|
|
(dollars in thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
2018
|
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Real estate properties:
|
|
|
|
|
|
|
|
|
Land
|
|
|
|
$
|
670,501
|
|
|
|
$
|
642,706
|
|
|
Buildings and improvements
|
|
|
|
791,895
|
|
|
|
700,896
|
|
|
|
|
|
1,462,396
|
|
|
|
1,343,602
|
|
|
Accumulated depreciation
|
|
|
|
(93,291
|
)
|
|
|
(74,614
|
)
|
|
|
|
|
1,369,105
|
|
|
|
1,268,988
|
|
|
Acquired real estate leases, net
|
|
|
|
75,803
|
|
|
|
79,103
|
|
|
Cash and cash equivalents
|
|
|
|
9,608
|
|
|
|
—
|
|
|
Rents receivable, including straight line rents of $54,916 and
$50,177, respectively, net of allowance for doubtful accounts of
$1,457 and $1,241, respectively
|
|
|
|
56,940
|
|
|
|
51,672
|
|
|
Debt issuance costs, net
|
|
|
|
4,430
|
|
|
|
1,724
|
|
|
Deferred leasing costs, net
|
|
|
|
6,157
|
|
|
|
5,254
|
|
|
Due from related persons
|
|
|
|
1,390
|
|
|
|
—
|
|
|
Other assets, net
|
|
|
|
11,178
|
|
|
|
4,942
|
|
|
Total assets
|
|
|
|
$
|
1,534,611
|
|
|
|
$
|
1,411,683
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Revolving credit facility
|
|
|
|
$
|
413,000
|
|
|
|
$
|
750,000
|
|
|
Mortgage note payable, net
|
|
|
|
49,195
|
|
|
|
49,427
|
|
|
Assumed real estate lease obligations, net
|
|
|
|
18,316
|
|
|
|
20,384
|
|
|
Accounts payable and other liabilities
|
|
|
|
12,040
|
|
|
|
11,082
|
|
|
Rents collected in advance
|
|
|
|
6,004
|
|
|
|
5,794
|
|
|
Security deposits
|
|
|
|
6,130
|
|
|
|
5,674
|
|
|
Due to related persons
|
|
|
|
1,653
|
|
|
|
7,114
|
|
|
Total liabilities
|
|
|
|
506,338
|
|
|
|
849,475
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
Common shares of beneficial interest, $.01 par value: 100,000,000
shares authorized; 65,074,791 and 45,000,000 shares issued and
outstanding, respectively
|
|
|
|
651
|
|
|
|
450
|
|
|
Additional paid in capital
|
|
|
|
998,447
|
|
|
|
546,489
|
|
|
Cumulative net income
|
|
|
|
89,657
|
|
|
|
15,269
|
|
|
Cumulative common distributions
|
|
|
|
(60,482
|
)
|
|
|
—
|
|
|
Total shareholders' equity
|
|
|
|
1,028,273
|
|
|
|
562,208
|
|
|
Total liabilities and shareholders' equity
|
|
|
|
$
|
1,534,611
|
|
|
|
$
|
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/20190220005280/en/
Olivia Snyder, Manager, Investor Relations
(617) 219-1489
Source: Industrial Logistics Properties Trust