First Industrial Realty Trust Reports Fourth Quarter and Full Year 2012 Results - Occupancy Improved to 89.9%, Up 140 Basis Points from 3Q12, 200 Basis Points from 4Q11

- Same Store NOI on a Cash Basis Up 7.0% in 4Q12, Excluding Termination Fees

- Signed Lease Agreement for First Chino Logistics Center Development in Southern California

- Initiated 2013 FFO Guidance of $1.02 to $1.12 Per Share Before Loss from Retirement of Debt

- Re-Initiates Common Stock Dividend of $0.085 per Share/Unit for 1Q13

CHICAGO, Feb. 20, 2013 /PRNewswire/ -- First Industrial Realty Trust, Inc. (NYSE: FR), a leading owner and operator of industrial real estate and provider of supply chain solutions, today announced results for the fourth quarter and full year 2012.  Diluted net loss available to common stockholders per share (EPS) was $(0.09) in the fourth quarter, compared to $(0.05) a year ago.  Full year 2012 diluted net loss available to common stockholders was $(0.24) per share, compared to $(0.34) per share in 2011.

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First Industrial's fourth quarter FFO was $0.18 per share/unit on a diluted basis, compared to $0.23 per share/unit for the year ago quarter.  Full year 2012 FFO was $0.88 per share/unit on a diluted basis versus $0.89 per share/unit in 2011.

FFO per share results for the fourth quarter of 2012 include a $0.03 loss on retirement of debt and a $0.02 loss related to the partial redemption of the 7.25% Series J Cumulative Redeemable Preferred Stock.  Results for the quarter reflected increased general and administrative expenses due to accelerated vesting of incentive compensation and lease termination fees of $2.9 million.

FFO results for the full year 2012 include a $0.10 loss on retirement of debt, a $0.02 loss related to the partial redemption of the 7.25% Series J Cumulative Redeemable Preferred Stock, the one-time charge of $0.06 per share related to the Company's preliminary agreement with the IRS related to the audit of the Company's 2009 taxable REIT subsidiary liquidation, and $0.04 per share of NAREIT-compliant gains.

"In 2012, our team continued on its mission to drive value from leasing, strengthen our balance sheet and refine our portfolio through active asset management and new investment," said Bruce W. Duncan, First Industrial's president and CEO.  "As a result of our execution and our positive outlook for our portfolio supported by improving industry fundamentals, the Board decided to re-initiate a common dividend for the first quarter of 2013."

Portfolio Performance for On Balance Sheet Properties

  • In-service occupancy was 89.9% at the end of the quarter, up 140 basis points from 88.5% at the end of the third quarter 2012, and up 200 basis points from 87.9% at the end of the fourth quarter of 2011.
  • Retained tenants in 77.2% of square footage up for renewal.
  • Excluding lease termination fees, same store cash basis net operating income (NOI) increased 7.0%.  Including lease termination fees, same store cash basis NOI increased 12.4%.
  • Rental rates decreased 6.8% on a cash basis; leasing costs were $2.67 per square foot.

Common Stock Dividend Re-initiated

The board of directors re-initiated the Company's common stock dividend by declaring a dividend of $0.085 per share/unit for the quarter ending March 31, 2013 payable on April 15, 2013 to stockholders of record on March 29, 2013.

"We are pleased to return to being a dividend-paying REIT," added Mr. Duncan.  "The Board established the dividend at a level from which we hope to grow as we further lease-up our portfolio, while enabling us to retain capital for our business needs and new investment."

Preferred Dividends

The board of directors declared a dividend of $0.45313 per depositary share on its 7.25% Series J Cumulative Redeemable Preferred Stock (NYSE: FR-PrJ) for the quarter ending March 31, 2013 payable on April 1, 2013 to stockholders of record on March 15, 2013. 

Additionally, the board of directors declared a dividend of $0.45313 per depositary share on its 7.25% Series K Cumulative Redeemable Preferred Stock (NYSE: FR-PrK) for the quarter ending March 31, 2013 payable on April 1, 2013 to stockholders of record on March 15, 2013.

Capital Markets Activities and Financial Position

In the fourth quarter, the Company:

  • Redeemed $50 million (2 million depositary shares) of its 7.25% Series J Cumulative Redeemable Preferred Stock.
  • Repurchased $13.7 million of its 7.60% Notes due 2028 and $1.0 million of its 7.75% Senior Notes due 2032.
  • Paid off $14.1 million of mortgage debt with a weighted average interest rate of 7.58%.

In the first quarter of 2013 to date, the Company:

  • Repurchased $4.0 million of its 7.60% Notes due 2028. 

"We continued to reduce our capital costs by redeploying excess sales proceeds for the partial redemption of our 7.25% Series J preferred stock," said Scott Musil, chief financial officer.  "To further reduce borrowing costs, we plan to prepay $72 million of mortgages at a weighted average interest rate of 7.0% in 2013."

Divestment Activities

In the fourth quarter, the Company:

  • Completed the sale of three properties totaling approximately 151,000 square feet for a total of $5.2 million.

For the full year 2012, the Company

  • Completed the sale of 28 properties and one land parcel totaling approximately 4.2 million square feet for a total of $85.6 million.

In the first quarter of 2013 to date, the Company sold one property comprised of 41,000 square feet for $1.7 million.

Development Leasing

During the first quarter of 2013, the Company signed a long-term lease for its 300,300 square-foot First Chino Logistics Center development in process in the Inland Empire in Southern California.  The tenant is expected to take occupancy of the building approximately midway through the second quarter of 2013.

"On the heels of leasing our 692,000 square-foot First Inland Logistics Center in the Inland Empire last year, we were successful in leasing our First Chino Logistics Center development more than one year ahead of schedule," said Johannson Yap, chief investment officer. 

Outlook for 2013

Mr. Duncan stated, "Industry fundamentals continue to improve in step with the economy, while new supply of industrial space is limited relative to historical levels.  Our team is focused on capturing the growth opportunity within our existing portfolio, lease-up of our developments, as well as new investment."






Low End of 


High End of 


Guidance for 2013


Guidance for 2013


(Per share/unit)


(Per share/unit)





Net Loss Available to Common Stockholders

(0.13)


(0.03)

Add: Real Estate Depreciation/Amortization

1.13


1.13

FFO (NAREIT Definition)

$1.00


$1.10





Add: Loss from Retirement of Debt Related to Planned Early Mortgage




       Payoffs and 1Q13 Senior Note Repurchase

0.02


0.02

FFO Before Loss from Retirement of Debt

$1.02


$1.12






The following assumptions were used:

  • Average in-service occupancy of 90.5% to 92.0%.
  • Same-store NOI of positive 1% to 3% for the full year.
  • JV FFO of approximately $0.5 million.
  • General and administrative expense of approximately $21.5 million to $22.5 million.
  • Guidance includes the impact of our plan to prepay, prior to maturity, approximately $72 million of mortgage debt with a weighted average interest rate of approximately 7.0%.  Guidance also reflects the aforementioned repurchase in 1Q13 of $4.0 million of the Company's 7.60% Notes due 2028. 
  • Guidance includes the incremental costs to complete the Company's three developments in process.  The Company plans to capitalize $0.02 per share of interest related to these developments.
  • Guidance reflects the impact of the lease-up of the First Chino Logistics Center in 2Q13 as 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 lease-up of the First Bandini Logistics Center or First Logistics Center @ I-83 developments in process,
    • 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 North America, the supply and demand of industrial real estate, the availability and terms of financing to potential acquirers of real estate, the timing and yields for divestment and investment, and numerous other variables.  There can be no assurance that First Industrial can achieve such results.

FFO Definition

First Industrial reports FFO in accordance with the NAREIT definition to provide a comparative measure to other REITs.  NAREIT recommends that REITs define FFO as net income, excluding gains (or losses) from the sale of previously depreciated property, plus depreciation and amortization, excluding impairments from previously depreciated assets, and after adjustments for unconsolidated partnerships and joint ventures. 

About First Industrial Realty Trust, Inc.

First Industrial Realty Trust, Inc. (NYSE: FR) is a leading owner and operator of industrial real estate and provider of supply chain solutions to multinational corporations and regional customers.  Across major markets in North America, our local market experts manage, lease, buy, (re)develop, and sell bulk and regional distribution centers, light industrial, and other industrial facility types.  We have a track record of industry leading customer service, and in total, we own, manage and have under development approximately 67.5 million square feet of industrial space as of December 31, 2012.  For more information, please visit us at www.firstindustrial.com. We post or otherwise make available on this website from time to time information that may be of interest to investors.

Forward-Looking Information

This press release and the presentation to which it refers may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. We intend for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words "believe," "expect," "intend," "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 Internal Revenue Service); our ability to qualify and maintain our status as a real estate investment trust; the availability and attractiveness of financing (including both public and private capital) to us and to our potential counterparties; the availability and attractiveness of terms of additional debt repurchases; interest rates; our credit agency ratings; our ability to comply with applicable financial covenants; competition; changes in supply and demand for industrial properties (including land, the supply and demand for which is inherently more volatile than other types of industrial property) in the Company's current and proposed market areas; difficulties in consummating acquisitions and dispositions; risks related to our investments in properties through joint ventures; environmental liabilities; slippages in development or lease-up schedules; tenant creditworthiness; higher-than-expected costs; changes in asset valuations and related impairment charges; changes in general accounting principles, policies and guidelines applicable to real estate investment trusts; international business risks; and those additional factors described under the heading "Risk Factors" and elsewhere in the Company's annual report on Form 10-K for the year ended December 31, 2011 and in the Company's subsequent '34 Act reports. We caution you not to place undue reliance on forward-looking statements, which reflect our outlook only and speak only as of the date of this press release or the dates indicated in the statements. We assume no obligation to update or supplement forward-looking statements. For further information on these and other factors that could impact the Company and the statements contained herein, reference should be made to the Company's filings with the Securities and Exchange Commission.

A schedule of selected financial information is attached.

First Industrial Realty Trust, Inc. (NYSE: FR) will host its quarterly conference call on Thursday, February 21, 2013 at 12:00 p.m. EST (11:00 a.m. CST).  The conference call may be accessed by dialing (888) 823-7459, passcode "First Industrial".  The conference call will also be webcast live on the Investor Relations page of the Company's website at www.firstindustrial.com.  The replay will also be available on the website.

The Company's fourth quarter and full year 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


Year Ended



December 31,


December 31,


December 31,


December 31,



2012


2011


2012


2011










Statement of Operations and Other Data:









    Total  Revenues


$         84,327


$         79,220


$       327,273


$       315,876










    Property Expenses


(27,815)


(26,947)


(105,126)


(106,639)

    General & Administrative  


(8,689)


(5,585)


(25,103)


(20,638)

    Restructuring Costs 


-


-


-


(1,553)

    Impairment of Real Estate 


-


451


164


7,634

    Depreciation of Corporate FF&E 


(241)


(328)


(1,077)


(1,426)

    Depreciation and Other Amortization of Real Estate 


(29,043)


(31,854)


(119,820)


(117,850)










    Total  Expenses


(65,788)


(64,263)


(250,962)


(240,472)










    Interest Income 


613


888


2,874


3,922

    Interest Expense 


(19,514)


(23,196)


(83,506)


(100,127)

    Amortization of Deferred Financing Costs 


(867)


(726)


(3,460)


(3,963)

    Mark-to-Market Gain (Loss) on Interest Rate Protection Agreements 


6


(158)


(328)


(1,718)

    Loss from Retirement of Debt 


(3,038)


(855)


(9,684)


(5,459)

    Foreign Currency Exchange Loss 


-


-


-


(332)










       Loss from Continuing Operations Before Equity in Income of Joint

         Ventures, Gain on Change in Control of Interests and Income Tax

         Provision 










(4,261)


(9,090)


(17,793)


(32,273)










    Equity in Income of Joint Ventures (a) 


1,403


73


1,559


980

    Gain on Change in Control of Interests 


-


-


776


689

    Income Tax Provision 


(264)


(424)


(5,522)


(450)










       Loss from Continuing Operations 


(3,122)


(9,441)


(20,980)


(31,054)










    Discontinued Operations: 









       Income Attributable to Discontinued Operations  


58


1,380


2,019


1,773

       Gain on Sale of Real Estate 


660


7,068


12,665


20,419

       Benefit (Provision) for Income Taxes Allocable to Discontinued

         Operations 


-


817


-


(1,246)

    Income from Discontinued Operations 


718


9,265


14,684


20,946










      Loss Before Gain on Sale of Real Estate 


(2,404)


(176)


(6,296)


(10,108)










    Gain on Sale of Real Estate 


-


-


3,777


1,370

    Provision for Income Taxes Allocable to Gain on Sale of Real Estate 


-


-


-


(452)










      Net Loss 


(2,404)


(176)


(2,519)


(9,190)










    Net Loss Attributable to the Noncontrolling Interest 


433


255


1,201


1,745










       Net (Loss) Income Attributable to First Industrial Realty Trust, Inc. 


(1,971)


79


(1,318)


(7,445)










    Preferred Dividends 


(4,662)


(4,763)


(18,947)


(19,565)

    Redemption of Preferred Stock 


(1,804)


-


(1,804)


-










       Net Loss Available to First Industrial Realty Trust, Inc.'s  Common

        Stockholders 










$          (8,437)


$          (4,684)


$        (22,069)


$        (27,010)










       RECONCILIATION OF NET LOSS AVAILABLE TO FIRST

         INDUSTRIAL REALTY TRUST, INC.'S COMMON STOCKHOLDERS TO

         FFO (b) AND FAD (b) 


































       Net Loss Available to First Industrial Realty Trust, Inc.'s Common

        Stockholders 










$          (8,437)


$          (4,684)


$        (22,069)


$        (27,010)










    Depreciation and Other Amortization of Real Estate 


29,043


31,854


119,820


117,850

    Depreciation and Other Amortization of Real Estate Included in

      Discontinued Operations 


160


727


1,612


4,473

    Impairment of Depreciated Real Estate 


-


155


(164)


(514)

    Impairment of Depreciated Real Estate Included in Discontinued

      Operations 


-


93


1,410


4,973

    Noncontrolling Interest 


(433)


(255)


(1,201)


(1,745)

    Equity in Dep/Other Amortization of Joint Ventures (a) 


(275)


102


(20)


551

    Gain on Change in Control of Interests 


-


-


(776)


(689)

    Non-NAREIT Compliant Gain (b) 


(660)


(7,068)


(12,665)


(20,419)

    Non-NAREIT Compliant Gain from Joint Ventures (a) (b) 


(845)


-


(902)


(616)










       Funds From Operations (NAREIT) ("FFO") (b) 


$         18,553


$         20,924


$         85,045


$         76,854










    Loss from Retirement of Debt 


3,038


855


9,684


5,459

    Restricted Stock/Unit Amortization 


4,852


991


8,559


3,759

    Amortization of Deferred Financing Costs 


867


726


3,460


3,963

    Depreciation of Corporate FF&E 


241


328


1,077


1,426

    Impairment of Undepreciated Real Estate 


-


(606)


-


(7,120)

    Redemption of Preferred Stock  


1,804


-


1,804


-

    Mark-to-Market (Gain) Loss on Interest Rate Protection Agreements 


(6)


158


328


1,718

    Non-Incremental Capital Expenditures 


(15,429)


(18,306)


(49,279)


(56,038)

    Straight-Line Rental Income Adjustment 


(1,121)


(1,987)


(3,504)


(7,733)










       Funds Available for Distribution ("FAD")  (b) 


$         12,799


$           3,083


$         57,174


$         22,288

    

FIRST INDUSTRIAL REALTY TRUST, INC.

Selected Financial Data

(Unaudited)

 (In thousands except per share/unit data)





















Three Months Ended


Year Ended



December 31,


December 31,


December 31,


December 31,



2012


2011


2012


2011










       RECONCILIATION OF NET LOSS AVAILABLE TO FIRST

         INDUSTRIAL REALTY TRUST, INC.'S COMMON STOCKHOLDERS TO

         EBITDA (b) AND NOI (b) 




























       Net Loss Available to First Industrial Realty Trust, Inc.'s  Common

         Stockholders 










$          (8,437)


$          (4,684)


$        (22,069)


$        (27,010)










    Interest Expense 


19,514


23,196