EXHIBIT 99.1
FIRST INDUSTRIAL REALTY TRUST REPORTS
FIRST QUARTER RESULTS
- EARNINGS PER SHARE GREW 10%
- 5.7 MILLION SQUARE FEET LEASED IN FIRST QUARTER
CHICAGO, April 23, 2003 - First Industrial Realty Trust, Inc. (NYSE: FR), the
nation's largest provider of diversified industrial real estate, announced
results for the quarter ended March 31, 2003. Fully-diluted earnings per share,
including income from discontinued operations and before extraordinary items
(EPS), was $0.66 compared to $0.60 per share for the same quarter last year,
representing an increase of 10.0 percent. Earnings in the quarter were $25.5
million compared to $23.5 million for the same quarter last year, representing
an increase of 8.5 percent year over year.
"While in the first quarter we delivered results above our expectations,
heightened geopolitical concerns late in the quarter contributed to an already
weak capital investment environment," said Mike Brennan, president and chief
executive officer. "As a result of the slower decision-making environment, our
portfolio performance was negatively impacted. Fortunately, we continue to
benefit from our balanced approach, as our investment management strategy
provided ample opportunity to create value, even during this unsteady
environment. While we expect industrial fundamentals to remain lackluster
through the next few quarters, we continue to work with customers and prospects
to find ways to strengthen our respective businesses in this challenging
environment."
A summary of the Company's first quarter portfolio and investment performance
and solid financial position is listed below:
Portfolio Performance
- - Leased 5.7 million square feet.
- - Actual cash-on-cash rents declined 3.1%.
- - Occupancy was 87.3% and tenant retention was 65.3%.
- - Recorded $10.7 million in income related to the Amazon.com lease termination.
- - Same property net operating income (NOI) increased by 10.0% including the
Amazon.com lease termination payment. Excluding the Amazon.com lease
termination payment, same property NOI would have declined 8.5%.
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Investment Performance
- - Net economic gains were $11.8 million, comprised of $7.0 million from
existing property sales, $4.7 million from merchant development/redevelopment
and $0.1 million from land sales.
- - Acquired $20.4 million of property, comprising 527,600 square feet.
- - $115 million in property acquisitions under contract or letter of intent.
- - Placed in service $12.4 million of new developments comprising 283,400 square
feet, with an expected aggregate first-year stabilized yield of approximately
9.7%.
- - Development under construction at the end of the quarter stood at $157.9
million with an expected aggregate first-year stabilized yield of 10.0%.
- - Repurchased 37,300 shares of common stock at a weighted average price of
approximately $26.73 per share.
- - Sold 22 properties and 2 parcels of land for $66.0 million at a weighted
average 8.8% capitalization (cap) rate and an average 14.9% unleveraged
internal rate of return (IRR). Proceeds from dispositions will be used to
fund new investments pursuant to the Company's investment strategy.
- - Property dispositions included $7.5 million of property sold to the Company's
institutional fund with the Kuwait Finance House (KFH), increasing the fund's
capitalization to $207.7 million.
- - The pipeline of properties that the Company expects to sell over the next 18
months, along with anticipated fee development activity, is over $700
million.
Solid Financial Position
- - Fixed-charge coverage is 2.5 times and interest coverage is 3.0 times.
- - Unencumbered assets represent 98.0% of total assets.
- - The weighted average maturity of permanent debt is 11.4 years, one of the
longest in the REIT industry.
- - 100% of the company's permanent debt is fixed rate.
- - FFO payout ratio was 75.6% and FAD payout ratio was 87.9%.
Supplemental Reporting Measure
For the three months ended March 31, 2003, funds from operations (FFO) per
share/unit was $0.91 on a fully-diluted basis and totaled $41.2 million. As
previously announced, the Company simplified and revised its calculation of FFO
effective January 1, 2003. Accordingly, for the three months ended March 31,
2003, the Company computed FFO to be equal to net income available to common
stockholders, plus depreciation/amortization of real estate, minus accumulated
depreciation/amortization on real estate sold. For prior periods, including the
three months ended March 31, 2002, the Company computed FFO to be equal to net
income available to common stockholders, excluding gains/losses from debt
restructuring and sales of depreciated property (other than net economic
gains/losses from sales of properties related to the Company's Integrated
Industrial Solutions(TM) activities), plus depreciation and amortization (other
than amortization of deferred financing costs, interest rate protection
agreements and corporate furniture, fixtures & equipment), and after adjustments
for unconsolidated partnerships and joint ventures. For the three months ended
March 31, 2002, FFO per share/unit was $0.92 on a fully-diluted basis and
totaled $42.6 million.
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Outlook for 2003
"The operating environment remains challenging as economic and geopolitical
uncertainty continue to impede leasing economics," Brennan continued. "While the
result has been increased pressure on our portfolio results, our ability to
successfully execute the investment management component of our total return
strategy continues to offset weakness in overall industrial fundamentals. We
continue to create value as evidenced by our recurring investment gains and
believe there is significant opportunity to continue creating value.
"We are maintaining an estimated 2003 EPS range of $2.00 to $2.20, with an
estimated range of $0.42 to $0.46 for the second quarter. Sales volume in 2003
is assumed to be approximately $400 million to $500 million with a 9% to 10%
average cap rate, with book gains from property sales/fees of between $65
million and $70 million. Investment volume assumptions for 2003, which include
both new developments and acquisitions, are approximately $400 million to $500
million with a 10% to 11% average cap rate. We assume no significant changes in
our balance sheet structure.
"We expect to deliver FFO per share in the range of $3.55 to $3.75 for 2003,
with an estimated range of $0.81 to $0.85 for the second quarter. We estimate
that our capital recycling program will contribute between $60 million and $65
million in FFO in 2003, with an increase in the second half of the year."
Low End of High End of
Guidance for 2003 Guidance for 2003
(Per share/unit) (Per share/unit)
----------------- -----------------
Net Income Available to Common Stockholders $2.00 $2.20
Add: Real Estate Depreciation/Amortization 1.78 1.78
Less: Accumulated Depreciation/Amortization on Real Estate Sold (0.23) (0.23)
----- -----
FFO $3.55 $3.75
===== =====
Low End of High End of
Guidance for Guidance for
2Q 2003 2Q 2003
(Per share/unit) (Per share/unit)
----------------- -----------------
Net Income Available to Common Stockholders $0.42 $0.46
Add: Real Estate Depreciation/Amortization 0.45 0.45
Less: Accumulated Depreciation/Amortization on Real Estate Sold (0.06) (0.06)
----- -----
FFO $0.81 $0.85
===== =====
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 2003. However, I
believe that First Industrial has the proper strategic and tactical design to
deliver such results. We believe our I-N-D-L infrastructure - with its offensive
and defensive characteristics - will continue to support our efforts and prove
its value."
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COMPANY INFORMATION
First Industrial Realty Trust, Inc., the nation's largest provider of
diversified industrial real estate, serves every aspect of Corporate America's
industrial real estate needs, including customized supply chain solutions,
through its unique I-N-D-L operating platform, which utilizes a pure Industrial
focus and National scope to provide Diverse facility types, while offering
Local, full-service management and expertise. Building, buying, selling, leasing
and managing industrial property in major markets nationwide, First Industrial
develops long term relationships with corporate real estate directors, tenants
and brokers to better serve customers with creative, flexible industrial real
estate solutions.
FORWARD-LOOKING INFORMATION
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: economic conditions generally and
the real estate market specifically, legislative/regulatory changes (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 and changes in
general accounting principles, policies and guidelines applicable to real estate
investment trusts. 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 will host a quarterly conference call at 10 a.m. CDT, 11 a.m.
EDT, on Thursday, April 24, 2003. The call-in number is (800) 865-4460 and the
passcode is "First Industrial." The conference call will also be available live
on First Industrial's web site, www.firstindustrial.com, under the "Investor
Relations" tab. Replay will also be available on the web site.
The company's first quarter supplemental information can be viewed on First
Industrial's web site, www.firstindustrial.com, under the "Financials" tab. For
a hard copy of the company's quarterly supplemental information report or other
investor materials, please contact:
Karen Henderson
First Industrial Realty Trust, Inc.
311 South Wacker Drive, Suite 4000
Chicago, IL 60606
Phone: (312) 344-4335 - Facsimile: (312) 922-9851
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FIRST INDUSTRIAL REALTY TRUST, INC.
SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT FOR PER SHARE/UNIT AND PROPERTY DATA)
(UNAUDITED)
THREE MONTHS ENDED
-----------------------
MARCH 31, MARCH 31,
2003 2002
--------- ---------
STATEMENT OF OPERATIONS AND OTHER DATA:
Total Revenues $ 96,412 $ 80,943
Property Expenses 30,488 24,797
General & Administrative Expense 6,764 5,163
Interest Expense 23,826 19,784
Amortization of Deferred Financing Costs 438 462
Amortization of Corporate F,F&E 308 408
Depreciation and Amortization of Real Estate 18,703 16,573
Loss from Early Retirement of Debt (b) 1,466 --
-------- --------
Total Expenses 81,993 67,187
INCOME FROM CONTINUING OPERATIONS BEFORE EQUITY IN NET
INCOME OF JOINT VENTURES, GAIN ON SALE OF REAL ESTATE AND
INCOME ALLOCATED TO MINORITY INTEREST 14,419 13,756
Equity in Net Income of Joint Ventures (d) 174 222
Gain on Sale of Real Estate 3,281 5,339
Minority Interest Allocable to Continuing Operations (1,938) (1,806)
-------- --------
INCOME FROM CONTINUING OPERATIONS 15,936 17,511
Income from Discontinued Operations (Including Gain on Sale
of Real Estate of $16,476 and $10,329 for the Three Months
Ended March 31, 2003 and 2002, respectively (c)) 17,189 15,633
Minority Interest Allocable to Discontinued Operations (c) (2,575) (2,371)
-------- --------
NET INCOME 30,550 30,773
Preferred Dividends (5,044) (7,231)
-------- --------
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 25,506 $ 23,542
Add: Depreciation and Amortization of Real Estate 18,937 18,559
Add: Minority Interest 4,513 4,177
Add: Depreciation and Amortization of Real Estate- Joint Ventures (d) 384 169
Less: Accumulated Depreciation/Amortization on Real Estate Sold (7,918) --
Less: Accumulated Depreciation/Amortization on Real Estate Sold
and Non-IIS Gains (Losses) -- (3,857)
Less: Accumulated Depreciation/Amortization on Real Estate
Sold- Joint Ventures (d) (212) (35)
-------- --------
FUNDS FROM OPERATIONS ("FFO") (a) $ 41,210 $ 42,555
Add: Loss From Early Retirement of Debt (b) 1,466 --
Add: Restricted Stock Amortization 1,131 1,158
Add: Amortization of Deferred Financing Costs 438 462
Add: Amortization of Corporate F,F&E 308 408
Less: Non-Incremental Capital Expenditures (8,719) (5,527)
Less: Straight Line Rent (401) (681)
-------- --------
FUNDS AVAILABLE FOR DISTRIBUTION ("FAD") (a) $ 35,433 $ 38,375
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THREE MONTHS ENDED
-------------------------------
MARCH 31, MARCH 31,
2003 2002
------------ ------------
RECONCILIATION OF NET INCOME AVAILABLE TO
COMMON STOCKHOLDERS TO EBITDA (a) AND NOI (a)
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 25,506 $ 23,542
Add: Interest Expense 23,826 19,784
Add: Depreciation and Amortization of Real Estate 18,937 18,559
Add: Preferred Dividends 5,044 7,231
Add: Income Allocated to Minority Interest 4,513 4,177
Add: Loss From Early Retirement of Debt (b) 1,466 --
Add: Amortization of Deferred Financing Costs 438 462
Add: Amortization of Corporate F,F&E 308 408
Add: Depreciation and Amortization of Real Estate- Joint Ventures (d) 384 169
Less: Accumulated Depreciation/Amortization on Real Estate
Sold- Joint Ventures (d) (212) (35)
Less: Accumulated Depreciation/Amortization on Real Estate Sold (7,918) --
Less: Accumulated Depreciation/Amortization on Real Estate Sold
and Non-IIS Gains (Losses) -- (3,857)
------------ ------------
EBITDA (a) $ 72,292 $ 70,440
Add: General and Administrative Expense 6,764 5,163
Less: Net Economic Gains (Losses) (11,839) (11,811)
Less: Equity in FFO of Joint Ventures (d) (346) (356)
------------ ------------
NET OPERATING INCOME ("NOI") (a) $ 66,871 $ 63,436
============ ============
WEIGHTED AVG. NUMBER OF SHARES/UNITS OUTSTANDING- BASIC 45,456 45,948
WEIGHTED AVG. NUMBER OF SHARES/UNITS OUTSTANDING- DILUTED 45,513 46,228
WEIGHTED AVG. NUMBER OF SHARES OUTSTANDING- BASIC 38,645 38,978
WEIGHTED AVG. NUMBER OF SHARES OUTSTANDING- DILUTED 38,702 39,258
PER SHARE/UNIT DATA:
FFO :
- Basic $ 0.91 $ 0.93
- Diluted $ 0.91 $ 0.92
Income from Continuing Operations Less Preferred Stock Dividends Per
Weighted Average Common Share Outstanding:
- Basic $ 0.28 $ 0.26
- Diluted $ 0.28 $ 0.26
Net Income Available to Common Stockholders per Weighted Average
Common Share Outstanding:
- Basic $ 0.66 $ 0.60
- Diluted $ 0.66 $ 0.60
Dividends/Distributions $ 0.6850 $ 0.6800
FFO PAYOUT RATIO 75.6% 73.4%
FAD PAYOUT RATIO 87.9% 81.4%
BALANCE SHEET DATA (END OF PERIOD):
Real Estate Before Accumulated Depreciation $ 2,692,941 $ 2,707,246
Real Estate Held For Sale, Net 5,339 28,535
Total Assets 2,598,575 2,660,208
Debt 1,407,801 1,354,949
Total Liabilities 1,545,800 1,476,217
Stockholders' Equity and Minority Interest $ 1,052,775 $ 1,183,991
PROPERTY DATA (END OF PERIOD):
Total Properties 890 914
Total Gross Leasable Area (in sq ft) 59,099,354 63,123,561
Occupancy 87.3% 90.8%
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a) 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/amortization of real estate assets. NOI provides a measure of
rental operations, and does not factor in depreciation/amortization and
non-property specific expenses such as general and administrative expenses.
EBITDA provides a further tool to evaluate ability to incur and service
debt and to fund dividends and other cash needs. FAD provides a further
tool to evaluate 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.
As previously announced, the Company simplified and revised its calculation
of FFO effective January 1, 2003. Accordingly, for the three months ended
March 31, 2003, the Company calculated FFO to be equal to net income
available to common stockholders plus depreciation/amortization on real
estate minus accumulated depreciation/amortization on real estate sold. For
periods prior to 2003, including the three months ended March 31, 2002, the
Company calculated FFO to be equal to net income available to common
stockholders, excluding gains/losses from debt restructuring and sales of
depreciated property (other than Net Economic Gains (Losses) on sales of
properties related to the Company's Integrated Industrial Solutions TM
("IIS") activities) plus depreciation and amortization (other than
amortization of deferred financing costs, interest rate protection
agreements and corporate F,F&E) and after adjustments for unconsolidated
partnerships and joint ventures. Net Economic Gains (Losses) 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/amortization on real estate sold.
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 (Losses), 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, 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 differently calculated,
measures of other REITs or to the definition of FFO published by NAREIT.
(b) Represents a loss from the early retirement of debt.
(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 all properties sold subsequent to
December 31, 2001, that were not held for sale at December 31, 2001, and
properties that were classified as held for sale subsequent to December 31,
2001 be presented in discontinued operations. FAS 144 also requires that
prior periods be restated.
(d) Represents the Company's share of net income, depreciation/amortization of
real estate and accumulated depreciation/amortization on real estate sold
from the Company's joint ventures in which it owns minority equity
interests.
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