INVESTORS
Over 30 years as a public company focused on top U.S. industrial markets
Press Release
First Industrial Realty Trust Reports Third Quarter 2007 Results
13% Growth in FFO Per Share
- Developable Land Now Totals Nearly 4,000 Acres; Buildable To 61 Million S.F.
- 20% Growth In FFO From Joint Ventures
- 4.8% Increase In Same Property Net Operating Income
- Occupancy Rises To 94.8%; Rental Rates Up 3.6%
- 21% Net Economic Gain Margin On Properties Harvested During The Quarter
- Repurchased $29 Million Of Common Shares And Authorized A New $100 Million Stock Repurchase Program
- Initiating 2008 FFO Per Share Guidance Range Of $4.80 To $5.00
CHICAGO, Oct. 24 /PRNewswire-FirstCall/ -- First Industrial Realty Trust, Inc. (NYSE: FR), a leading provider of industrial real estate supply chain solutions, today announced results for the quarter ended September 30, 2007. Diluted net income available to common stockholders per share (EPS) was $0.66, up 22% from $0.54 in third quarter 2006. Third quarter funds from operations (FFO) grew to $1.13 per share/unit on a diluted basis from $1.00 per share/unit a year ago.
"The investments that we have been making in our franchise continue to show positive results, and we are on track to deliver FFO per share growth of approximately 10 percent in 2007, even as we expand into new markets and increase our talented workforce," said Mike Brennan, president and CEO. "FFO from joint ventures grew 20 percent, the portfolio performance was strong, and we achieved a 21 percent margin on properties harvested from our balance sheet."
Mr. Brennan added, "As we look ahead to 2008, we continue to see strong demand from our customers for the comprehensive supply chain solutions we deliver, and we expect FFO per share/unit to grow to $4.80 - $5.00."
Portfolio Performance for On Balance Sheet Properties
-- 4.8% growth in same property net operating income (NOI) on a cash
basis, up from 2.9% in third quarter 2006. Excluding lease termination
fees, same property cash basis NOI increased 3.2%.
-- Occupancy rose to 94.8% from 93.1% in third quarter 2006.
-- Rental rates increased 3.6% and leasing costs improved to $1.72 per
square foot.
-- Retained tenants in 79% of square footage up for renewal.
Investment Performance: Third Quarter 2007
3rd Quarter Nine Months
Balance Sheet Investment/Disposition (in (in
Activity 2007 millions) 2007 millions)
Property Acquisitions $76.8 $352.6
Square Feet 1.3 million 7.0 million
Stabilized Weighted Average
Capitalization Rate 8.7% 8.6%
Developments Placed in Service $19.8 $78.0
Square Feet 0.3 million 1.4 million
Stabilized Weighted Average
Capitalization Rate 8.0% 8.8%
Land Acquisitions $13.2 $52.3
Total Investments $109.8 $482.9
Property Sales $201.6 $651.3
Square Feet 2.4 million 10.5 million
Weighted Average Capitalization
Rate 7.0% 7.1%
Land Sales $5.8 $11.2
Total Dispositions $207.4 $662.5
Joint Venture Investment/Disposition
Activity
Investments
2005 Development/Redevelopment -
Acquisitions $98.7 $261.3
2005 Development/Redevelopment -
Placed in Service $52.1 $114.8
2006 Strategic Land and
Development - Acquisitions $18.9 $220.0
2007 Core Asset Program $103.6 $103.6
Total Joint Venture
Investments $273.3 $699.7
Dispositions
2005 Development/Redevelopment $58.2 $183.2
2005 Core $104.4 $429.0
1998 Core $0.0 $46.5
2003 Net Lease $0.0 $3.3
Total Joint Venture
Dispositions $162.6 $662.0
"We continued to build our land inventory during the third quarter, adding more than 1,000 acres combined for our joint ventures and balance sheet to meet our customers' supply chain needs," said Johannson Yap, chief investment officer.
Land and Development
Developable land now totals 3,979 acres (3,446 acres in joint ventures and 533 acres on balance sheet) that can accommodate up to 61 million square feet of development.
Developments currently in process will total 12.2 million square feet of space (6.2 million in joint ventures and 6.0 million on balance sheet) and represent a projected investment of $611 million ($304 million for the joint ventures and $307 million on balance sheet).
Investment Pipeline and Fourth Quarter To-Date Investments
Fourth quarter to-date, $18 million of acquisitions have already been completed. Acquisitions under contract or letter of intent total $592 million. Development currently and soon to be in process on land currently owned is $1.1 billion. Development soon to be in process on land under contract or letter of intent is estimated to be $85 million. The total pipeline is $1.8 billion and the breakdown is as follows:
(millions) Balance Sheet Joint Ventures Total
Developments $438 $712 $1,150
Acquisitions $156 $454 $610
Total $594 $1,166 $1,760
Solid Financial Position
-- Fixed-charge coverage was 2.8 times and interest coverage was 3.4 times
for the quarter
-- 96% of real estate assets are unencumbered by mortgages
-- 7.6 years weighted average maturity for permanent debt
-- 100% of permanent debt is fixed rate
"In the third quarter, we renewed our $500 million senior unsecured credit facility," said Mike Havala, chief financial officer. "We were able to reduce the borrowing rate by fifteen basis points to LIBOR plus 47.5 basis points and extend the maturity five years to 2012. In addition, the facility also supports our international investment strategy by providing borrowing capacity in foreign currencies."
Common Stock Repurchase Activity and New Common Stock Repurchase Program Authorization
The Company completed its previous common stock repurchase program by buying $29 million of common stock during third quarter 2007 at an average price per share of $39.55. The prior authorization equaled $100 million.
First Industrial's board of directors has authorized a new $100 million common stock repurchase program. The Company may make purchases from time to time in the open market or in privately negotiated transactions, depending on market and business conditions.
Supplemental Reporting Measure
First Industrial defines FFO as net income available to common stockholders, plus depreciation and amortization of real estate, minus accumulated depreciation and amortization on real estate sold. The National Association of Real Estate Investment Trusts ("NAREIT") has provided a recommendation on how real estate investment trusts (REITs) should define funds from operations ("FFO"). NAREIT suggests that FFO be defined as net income, excluding gains (or losses) from the sale of previously depreciated property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.
NAREIT has also clarified that non-recurring charges and gains should be included in FFO.
Importantly, as part of its guidance concerning FFO, NAREIT has stated that the "management of each of its member companies has the responsibility and authority to publish financial information that it regards as useful to the financial community." As a result, modifications to the NAREIT calculation of FFO are common among REITs.
First Industrial calculates FFO to include all cash gains and losses on all industrial property sales whether depreciation is or is not accumulated under the GAAP accounting rules. The Company believes that FFO inclusive of all cash gains and losses is a better performance measure because it reflects all the activities of the Company and better reflects the Company's strategy, which includes investing in real estate; adding value through redevelopment, leasing and repositioning; and then selling the improved real estate in order to maximize investment returns. The Company provides additional disclosure on net economic gains in its quarterly Supplemental Information Report.
Outlook for 2007 and 2008
Mr. Brennan stated, "Demand for industrial space is strong in virtually all of our markets, and the outlook for the remainder of 2007 is positive given solid industry fundamentals."
Mr. Brennan added, "First Industrial's guidance range for 2007 FFO per share/unit is $4.50 to $4.60 and $2.50 to $2.60 for EPS. On balance sheet investment volume assumptions for 2007, which include both developments placed in service and acquisitions, range from $600 million to $700 million with a 7.75% to 8.75% average cap rate. On balance sheet sales volume in 2007 is assumed to be $800 million to $900 million with a 6.75% to 7.75% average cap rate. Book gains from property sales/fees are estimated to be $200 million to $210 million. Our assumption for net economic gains for on balance sheet transactions in 2007 is between $127 million and $137 million.
Our estimate for First Industrial's FFO from joint ventures in 2007 is between $57 million and $63 million. Joint venture investment volume assumptions for 2007, which include both developments placed in service and acquisitions, range from $900 million to $1.0 billion. Joint venture sales volume in 2007 is assumed to be approximately $900 million to $1.0 billion."
Low End High End Low End High End
of of of of
Guidance Guidance Guidance Guidance
for for for for
4Q 2007 4Q 2007 2007 2007
(Per (Per (Per (Per
share/ share/ share/ share/
unit) unit) unit) unit)
Net Income Available to Common
Stockholders $0.50 $0.60 $2.50 $2.60
Add: Real Estate
Depreciation/Amortization 0.88 0.88 3.45 3.45
Less: Accumulated
Depreciation/Amortization on
Real Estate Sold (0.29) (0.29) (1.45) (1.45)
FFO $1.09 $1.19 $4.50 $4.60
Mr. Brennan added, "First Industrial's guidance range for 2008 FFO per share/unit is $4.80 to $5.00 and $2.60 to $2.80 for EPS. On balance sheet investment volume assumptions for 2008, which include both developments placed in service and acquisitions, range from $850 million to $950 million with a 7.75% to 8.75% average cap rate. On balance sheet sales volume in 2008 is assumed to be $950 million to $1.05 billion with a 6.75% to 7.75% average cap rate. Book gains from property sales/fees are estimated to be $204 million to $214 million. Our assumption for net economic gains for on balance sheet transactions in 2008 is between $143 million and $153 million.
Our estimate for First Industrial's FFO from joint ventures in 2008 is between $67 million and $77 million. Joint venture investment volume assumptions for 2008, which include both new developments and acquisitions, range from $950 million to $1.05 billion. Joint venture sales volume in 2008 is assumed to be approximately $1.1 billion to $1.2 billion."
Low End of High End of
Guidance for Guidance for
2008 2008
(Per share/unit) (Per share/unit)
Net Income Available to
Common Stockholders $2.60 $2.80
Add: Real Estate
Depreciation/Amortization 3.40 3.40
Less: Accumulated
Depreciation/Amortization
on Real Estate Sold (1.20) (1.20)
FFO $4.80 $5.00
Mr. Brennan continued, "A number of factors could impact our ability to deliver results in line with our assumptions, such as interest rates, the overall economy, the supply and demand of industrial 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 for 2007 or 2008. However, I believe that First Industrial has the proper strategy, infrastructure, and capabilities to deliver such results."
First Industrial Realty Trust, Inc. (NYSE: FR) provides industrial real estate solutions for every stage of a customer's supply chain, no matter how large or complex. Across more than 30 markets in the United States, Canada, The Netherlands and Belgium, our local market experts buy, (re)develop, lease, manage and sell industrial properties, including all of the major facility types - R&D/flex, light industrial, manufacturing, and regional and bulk distribution centers. We continue to receive leading customer service scores from Kingsley Associates, an independent research firm, and in total, we own and manage more than 100 million square feet of industrial space. For more information, please visit us at http://www.firstindustrial.com.
This press release contains forward-looking information about the Company. A number of factors could cause the Company's actual results to differ materially from those anticipated, including changes in: national, international, regional and local economic conditions generally and real estate markets specifically, legislation/regulation (including changes to laws governing the taxation of real estate investment trusts), availability of financing, interest rate levels, competition, supply and demand for industrial properties in the Company's current and proposed market areas, potential environmental liabilities, slippage in development or lease-up schedules, tenant credit risks, higher-than-expected costs, changes in general accounting principles, policies and guidelines applicable to real estate investment trusts, and risks related to doing business internationally (including foreign currency exchange risks). 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. will host a quarterly conference call at 11:00 a.m. CDT, 12:00 p.m. EDT, on Thursday, October 25, 2007. The call-in number is (888) 693-3477 and the passcode is "First Industrial." The conference call will also be webcast live on First Industrial's web site, http://www.firstindustrial.com, under the "Investor Relations" tab. The replay will also be available on the web site.
The Company's first quarter supplemental information can be viewed on First Industrial's website, http://www.firstindustrial.com, under the "Investor Relations" tab.
FIRST INDUSTRIAL REALTY TRUST, INC.
Selected Financial Data
(In thousands, except for per share/unit and property data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
2007 2006 2007 2006
Statement of
Operations and
Other Data:
Total Revenues $108,917 $87,982 $330,370 $258,704
Property
Expenses (33,707) (29,666) (99,488) (87,210)
Build to Suit
For Sale Costs - - (6,131) (666)
Contractor
Expenses (5,188) - (14,147) -
General &
Administrative
Expense (21,307) (20,047) (66,478) (55,918)
Depreciation
of Corporate
F,F&E (439) (477) (1,401) (1,341)
Depreciation
and
Amortization
of Real Estate (40,898) (32,225) (116,469) (96,072)
Total Expenses (101,539) (82,415) (304,114) (241,207)
Interest Income 930 446 1,415 1,345
Interest Expense (30,196) (31,622) (89,764) (90,853)
Amortization
of Deferred
Financing
Costs (828) (603) (2,472) (1,826)
Mark-to-
Market/Loss on
Settlement of
Interest Rate
Protection
Agreements (a) - (2,942) - (3,112)
Loss from Early
Retirement of
Debt (139) - (393) -
Loss from
Continuing
Operations
Before Equity
in Net Income
of Joint
Ventures,
Income Tax
Benefit and
Minority
Interest
Allocable to
Continuing
Operations (22,855) (29,154) (64,958) (76,949)
Equity in Net
Income of Joint
Ventures (b) 6,376 4,747 23,633 12,019
Income Tax
Benefit 2,839 4,381 4,955 11,286
Minority
Interest
Allocable to
Continuing
Operations 2,319 3,291 6,924 9,073
Loss from
Continuing
Operations (11,321) (16,735) (29,446) (44,571)
Income from
Discontinued
Operations
(Including Gain
on Sale of Real
Estate of
$59,637 and
$65,368 for the
Three Months
Ended
September 30,
2007 and 2006,
respectively, and
$174,436 and
$171,390 for
the Nine
Months Ended
September 30,
2007 and 2006,
respectively (c)) 62,430 72,520 186,047 189,298
Provision for
Income Taxes
Allocable to
Discontinued
Operations
(Including a
provision
allocable to
Gain on Sale of
Real Estate of
$9,894 and
$19,662 for the
Three Months
Ended
September 30,
2007 and 2006,
respectively, and
$31,015 and
$42,171 for the
Nine Months Ended
September 30,
2007 and 2006,
respectively) (10,473) (21,261) (33,585) (44,811)
Minority Interest
Allocable to
Discontinued
Operations (c) (6,531) (6,659) (19,195) (18,870)
Income Before
Gain on Sale
of Real Estate 34,105 27,865 103,821 81,046
Gain on Sale of
Real Estate 103 2,853 4,507 6,374
Provision for
Income Taxes
Allocable to
Gain on Sale of
Real Estate (40) (1,122) (1,145) (2,174)
Minority Interest
Allocable to
Gain on Sale of
Real Estate (8) (225) (423) (549)
Net Income 34,160 29,371 106,760 84,697
Preferred
Dividends (4,857) (5,442) (16,463) (15,490)
Redemption of
Preferred Stock - - (2,017) (672)
Net Income
Available to
Common
Stockholders $29,303 $23,929 $88,280 $68,535
RECONCILIATION
OF NET INCOME
AVAILABLE TO
COMMON
STOCKHOLDERS
TO FFO (d)
AND FAD (d)
Net Income
Available to
Common
Stockholders $29,303 $23,929 $88,280 $68,535
Add: Depreciation
and Amortization
of Real Estate 40,898 32,225 116,469 96,072
Add: Income
Allocated to
Minority
Interest 4,220 3,593 12,694 10,346
Add: Depreciation
and Amortization
of Real Estate
Included in
Discontinued
Operations 1,239 6,704 7,783 20,234
Add: Depreciation
and Amortization
of Real Estate -
Joint Ventures
(b) 2,142 2,542 7,104 8,048
Less: Accumulated
Depreciation/
Amortization on
Real Estate Sold (19,194) (17,377) (53,905) (44,783)
Less: Accumulated
Depreciation/
Amortization on
Real Estate
Sold - Joint
Ventures (b) (1,413) (654) (4,571) (1,337)
Funds From
Operations
("FFO") (d) $57,195 $50,962 $173,854 $157,115
Add: Loss from
Early
Retirement of
Debt 139 - 393 -
Add: Restricted
Stock
Amortization 3,403 2,487 10,657 7,112
Add: Amortization
of Deferred
Financing Costs 828 603 2,472 1,826
Add: Depreciation
of Corporate
F,F&E 439 477 1,401 1,341
Add: Redemption
of Preferred
Stock - - 2,017 672
Less: Non-
Incremental
Capital
Expenditures (9,349) (9,280) (21,722) (29,014)
Less:
Straight-Line
Rent (2,470) (2,870) (7,975) (7,854)
Funds
Available for
Distribution
("FAD") (d) $50,185 $42,379 $161,097 $131,198
FIRST INDUSTRIAL REALTY TRUST, INC.
Selected Financial Data
(In thousands, except for per share/unit and property data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
2007 2006 2007 2006
RECONCILIATION
OF NET INCOME
AVAILABLE TO
COMMON
STOCKHOLDERS
TO EBITDA (d)
AND NOI (d)
Net Income
Available to
Common
Stockholders $29,303 $23,929 $88,280 $68,535
Add: Interest
Expense 30,196 31,622 89,764 90,853
Add: Depreciation
and Amortization
of Real Estate 40,898 32,225 116,469 96,072
Add: Preferred
Dividends 4,857 5,442 16,463 15,490
Add: Mark-to-
Market/Loss on
Settlement of
Interest Rate
Protection
Agreements (a) - 2,942 - 3,112
Add: Provision
for Income Taxes 7,674 18,002 29,775 35,699
Add: Redemption
of Preferred
Stock - - 2,017 672
Add: Income
Allocated to
Minority
Interest 4,220 3,593 12,694 10,346
Add: Amortization
of Deferred
Financing Costs 828 603 2,472 1,826
Add: Depreciation
of Corporate
F,F&E 439 477 1,401 1,341
Add: Depreciation
and Amortization
of Real Estate
Included in
Discontinued
Operations 1,239 6,704 7,783 20,234
Add: Loss from
Early Retirement
of Debt 139 - 393 -
Add: Depreciation
and Amortization
of Real Estate -
Joint Ventures (b) 2,142 2,542 7,104 8,048
Less: Accumulated
Depreciation/
Amortization on
Real Estate Sold (19,194) (17,377) (53,905) (44,783)
Less: Accumulated
Depreciation/
Amortization on
Real Estate Sold -
Joint Ventures (b) (1,413) (654) (4,571) (1,337)
EBITDA (d) $101,328 $110,050 $316,139 $306,108
Add: General and
Administrative
Expense 21,307 20,047 66,478 55,918
Less: Net Economic
Gains (d) (34,842) (34,526) (105,857) (102,523)
Less: Provision
for Income Taxes (7,674) (18,002) (29,775) (35,699)
Less: Equity in
FFO of Joint
Ventures (12,454) (10,389) (40,733) (30,515)
Net Operating
Income ("NOI") (d) $67,665 $67,180 $206,252 $193,289
RECONCILIATION
OF GAIN ON
SALE OF REAL
ESTATE TO NET
ECONOMIC
GAINS (d)
Gain on Sale of
Real Estate 103 2,853 4,507 6,374
Gain on Sale of
Real Estate
included in
Discontinued
Operations 59,637 65,368 174,436 171,390
Less: Provision
for Income Taxes (7,674) (18,002) (29,775) (35,699)
Less: Accumulated
Depreciation/
Amortization on
Real Estate Sold (19,194) (17,377) (53,905) (44,783)
Add: Assignment
Fees - - 3,275 793
Add: Income Taxes
Allocable to FFO
from Joint
Ventures 1,970 1,684 7,319 4,448
Net Economic
Gains (d) $34,842 $34,526 $105,857 $102,523
Weighted Avg.
Number of
Shares/Units
Outstanding -
Basic 50,735 50,721 50,894 50,691
Weighted Avg.
Number of
Shares/Units
Outstanding -
Diluted (e) 50,735 50,721 50,894 50,691
Weighted Avg.
Number of Shares
Outstanding -
Basic 44,240 44,032 44,373 43,976
Weighted Avg.
Number of Shares
Outstanding -
Diluted (e) 44,240 44,032 44,373 43,976
Per Share/Unit
Data:
FFO:
- Basic $1.13 $1.00 $3.42 $3.10
- Diluted (e) $1.13 $1.00 $3.42 $3.10
Loss from
Continuing
Operations Less
Preferred
Dividends and
Redemption
of Preferred
Stock Per
Weighted
Average Common
Share Outstanding:
- Basic $(0.36) $(0.47) $(1.01) $(1.30)
- Diluted (e) $(0.36) $(0.47) $(1.01) $(1.30)
Net Income
Available to
Common
Stockholders Per
Weighted Average
Common Share
Outstanding:
- Basic $0.66 $0.54 $1.99 $1.56
- Diluted (e) $0.66 $0.54 $1.99 $1.56
Dividends/
Distributions $0.7100 $0.7000 $2.1300 $2.1000
FFO Payout Ratio 63.0% 69.7% 62.4% 67.8%
FAD Payout Ratio 71.8% 83.8% 67.3% 81.1%
Balance Sheet Data
(end of period):
Real Estate Before
Accumulated
Depreciation $3,335,231 $3,257,337
Real Estate and
Other Held For
Sale, Net 55,325 38,557
Total Assets 3,255,281 3,189,008
Debt 1,932,863 1,790,875
Total Liabilities 2,157,770 2,004,761
Stockholders'
Equity and
Minority Interest $1,097,511 $1,184,247
a) Represents the mark to market/loss on settlement of interest rate
protection agreements that do not qualify for hedge accounting in
accordance with Statement of Financial Accounting Standard No. 133,
"Accounting for Derivative Instruments and Hedging Activities".
b) Represents the Company's share of net income, depreciation and
amortization of real estate and accumulated depreciation and
amortization on real estate sold from the Company's joint ventures in
which it owns minority equity interests.
c) In August 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 144 "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("FAS 144"). FAS 144
requires that the operations and gain (loss) on sale of qualifying
properties sold and properties that are classified as held for sale be
presented in discontinued operations. FAS 144 also requires that
prior periods be restated.
d) Investors in and analysts following the real estate industry utilize
FFO, NOI, EBITDA and FAD, variously defined, as supplemental
performance measures. While the Company believes net income available
to common stockholders, as defined by GAAP, is the most appropriate
measure, it considers FFO, NOI, EBITDA and FAD, given their wide use
by and relevance to investors and analysts, appropriate supplemental
performance measures. FFO, reflecting the assumption that real estate
asset values rise or fall with market conditions, principally adjusts
for the effects of GAAP depreciation and amortization of real estate
assets. NOI provides a measure of rental operations, and does not
factor in depreciation and amortization and non-property specific
expenses such as general and administrative expenses. EBITDA provides
a tool to further evaluate the ability to incur and service debt and
to fund dividends and other cash needs. FAD provides a tool to
further evaluate the ability to fund dividends. In addition, FFO,
NOI, EBITDA and FAD are commonly used in various ratios, pricing
multiples/yields and returns and valuation calculations used to
measure financial position, performance and value.
The Company calculates FFO to be equal to net income available to
common stockholders, plus depreciation and amortization on real
estate, minus accumulated depreciation and amortization on real estate
sold. Accordingly, as calculated by the Company, FFO includes net
economic gains resulting from all Company property sales as well as
assignment fees. Assignment fees are earned when the Company assigns
its interest in a purchase contract to a third party for
consideration.
NOI is defined as revenues of the Company, minus property expenses
such as real estate taxes, repairs and maintenance, property
management, utilities, insurance and other expenses. NOI includes NOI
from discontinued operations.
EBITDA is defined as NOI, plus the equity in FFO of the Company's
joint ventures, which are accounted for under the equity method of
accounting, plus Net Economic Gains, minus general and administrative
expenses. EBITDA includes EBITDA from discontinued operations.
FAD is defined as EBITDA, minus GAAP interest expense, minus preferred
stock dividends, minus straight-line rental income, minus provision
for income taxes, plus restricted stock amortization, minus non-
incremental capital expenditures. Non-incremental capital
expenditures are building improvements and leasing costs required to
maintain current revenues.
FFO, NOI, EBITDA and FAD do not represent cash generated from
operating activities in accordance with GAAP and are not necessarily
indicative of cash available to fund cash needs, including the
repayment of principal on debt and payment of dividends and
distributions. FFO, NOI, EBITDA and FAD should not be considered as
substitutes for net income available to common stockholders
(calculated in accordance with GAAP), as a measure of results of
operations, or cash flows (calculated in accordance with GAAP) as a
measure of liquidity. FFO, NOI, EBITDA and FAD, as calculated by the
Company, may not be comparable to similarly titled, but variously
calculated, measures of other REITs or to the definition of FFO
published by NAREIT.
The Company also reports Net Economic Gains, which, effectively,
measure the value created in the Company's capital recycling
activities. Net Economic Gains are calculated by subtracting from gain
on sale of real estate (calculated in accordance with GAAP, including
gains on sale of real estate classified as discontinued operations)
the recapture of accumulated depreciation and amortization on real
estate sold (excluding the recapture of accumulated amortization
related to above/below market leases and lease inducements as this
amortization is included in revenues and FFO) and the provision for
income taxes (excluding taxes associated with joint ventures). Net
Economic Gain also includes assignment fees.
In addition, the Company considers cash-basis same store NOI ("SS
NOI") to be a useful supplemental measure of its operating
performance. Beginning with the fourth quarter of 2006, the Company
adopted the following definition of its same store pool of properties:
Same store properties, for the period beginning January 1, 2007,
include all properties owned January 1, 2006 and held as an operating
property through the end of the current reporting period and
developments that were placed in service or were substantially
completed for 12 months prior to January 1, 2006 (the "Same Store
Pool"). The Company defines SS NOI as NOI, less NOI of properties not
in the Same Store Pool, less the impact of straight-line rent and the
amortization of above/below market rent. For the quarters ended
September 30, 2007 and 2006, NOI was $67,665 and $67,180,
respectively; NOI of properties not in the Same Store Pool was $13,492
and $15,708 respectively; the impact of straight-line rent and the
amortization of above/below market rent was $1,957 and $1,662,
respectively. The Company excludes straight-line rents and above/below
market rent amortization in calculating SS NOI because the Company
believes it provides a better measure of actual cash basis rental
growth for a year-over-year comparison. In addition, the Company
believes that SS NOI helps the investing public compare the operating
performance of a company's real estate as compared to other companies.
While SS NOI is a relevant and widely used measure of operating
performance of real estate investment trusts, it does not represent
cash flow from operations or net income as defined by GAAP and should
not be considered as an alternative to those measures in evaluating
our liquidity or operating performance. SS NOI also does not reflect
general and administrative expenses, interest expenses, depreciation
and amortization costs, capital expenditures and leasing costs, or
trends in development and construction activities that could
materially impact our results from operations. Further, the Company's
computation of SS NOI may not be comparable to that of other real
estate companies, as they may use different methodologies for
calculating SS NOI.
e) Pursuant to Statement of Financial Accounting Standard No. 128,
"Earnings Per Share", the diluted weighted average number of
shares/units outstanding and the diluted weighted average number of
shares outstanding are the same as the basic weighted average number
of shares/units outstanding and the basic weighted average number of
shares outstanding, respectively, for periods in which continuing
operations is a loss, as the dilutive effect of stock options and
restricted stock would be antidilutive to the loss from continuing
operations per share.
SOURCE First Industrial Realty Trust, Inc.
CONTACT: Sean P. O'Neill, SVP, Investor Relations and Corporate Communications, +1-312-344-4401, or Art Harmon, Sr. Manager, Investor Relations and Corporate Communications, +1-312-344-4320, both of First Industrial Realty Trust, Inc.