10-Q
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form 10-Q
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended
March 31, 2009
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the transition period
from to
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Commission file number 1-13102
First Industrial Realty Trust,
Inc.
(Exact Name of Registrant as
Specified in its Charter)
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Maryland
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36-3935116
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(State or Other Jurisdiction
of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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311 S. Wacker Drive, Suite 4000, Chicago,
Illinois 60606
(Address of Principal Executive
Offices)
(312) 344-4300
(Registrants Telephone
Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding
12 months, and (2) has been subject to such filing
requirements for the past
90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of
Regulation S-T
(§ 232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant
was required to submit and post such
files). Yes o No o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in
Rule 12b-2
of the Exchange Act. (Check one):
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Large accelerated filer þ
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Accelerated filer o
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Non-accelerated filer o
(Do not check if a smaller reporting company)
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Smaller reporting company o
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Indicate by check mark whether the registrant is a shell company
(as defined in
Rule 12b-2
of the Exchange
Act). Yes o No þ
Number of shares of Common Stock, $.01 par value,
outstanding as of April 24, 2009: 44,683,998.
FIRST
INDUSTRIAL REALTY TRUST, INC.
Form 10-Q
For the
Period Ended March 31, 2009
INDEX
PART I.
FINANCIAL INFORMATION
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Item 1.
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Financial
Statements
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FIRST
INDUSTRIAL REALTY TRUST, INC.
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(As Adjusted)
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March 31,
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December 31,
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2009
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2008
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(Unaudited)
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(In thousands
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except share and
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per share data)
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ASSETS
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Assets:
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Investment in Real Estate:
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Land
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$
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774,172
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$
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776,991
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Buildings and Improvements
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2,573,996
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2,551,450
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Construction in Progress
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28,398
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57,156
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Less: Accumulated Depreciation
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(541,842
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)
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(523,108
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)
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Net Investment in Real Estate
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2,834,724
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2,862,489
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Real Estate Held for Sale, Net of Accumulated Depreciation and
Amortization of $1,511 and $2,251 at March 31, 2009 and
December 31, 2008, respectively
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16,669
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21,117
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Cash and Cash Equivalents
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37,802
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3,182
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Restricted Cash
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109
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109
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Tenant Accounts Receivable, Net
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11,780
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10,414
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Investments in Joint Ventures
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16,094
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16,299
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Deferred Rent Receivable, Net
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34,377
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32,984
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Deferred Financing Costs, Net
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11,383
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12,091
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Deferred Leasing Intangibles, Net
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83,533
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90,342
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Prepaid Expenses and Other Assets, Net
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165,868
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174,474
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Total Assets
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$
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3,212,339
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$
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3,223,501
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LIABILITIES AND EQUITY
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Liabilities:
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Mortgage Loans Payable, Net
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$
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76,303
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$
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77,396
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Senior Unsecured Debt, Net
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1,512,815
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1,511,955
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Unsecured Line of Credit
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488,608
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443,284
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Accounts Payable, Accrued Expenses and Other Liabilities, Net
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102,888
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128,828
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Deferred Leasing Intangibles, Net
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29,717
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30,754
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Rents Received in Advance and Security Deposits
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26,474
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26,181
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Leasing Intangibles Held for Sale, Net of Accumulated
Amortization of $0 and $254 at March 31, 2009 and
December 31, 2008, respectively
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541
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Dividends Payable
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13,846
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Total Liabilities
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2,236,805
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2,232,785
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Commitments and Contingencies
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Equity:
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First Industrial Realty Trust, Inc.s Stockholders
Equity:
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Preferred Stock ($0.01 par value, 10,000,000 shares
authorized, 500, 250, 600, and 200 shares of Series F,
G, J, and K Cumulative Preferred Stock, respectively, issued and
outstanding at March 31, 2009 and December 31, 2008
having a liquidation preference of $100,000 per share ($50,000),
$100,000 per share ($25,000), $250,000 per share ($150,000), and
$250,000 per share ($50,000), respectively)
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Common Stock ($0.01 par value, 100,000,000 shares
authorized, 48,988,616 and 48,976,296 shares issued and
44,664,502 and 44,652,182 shares outstanding at
March 31, 2009 and December 31, 2008, respectively)
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490
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490
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Additional
Paid-in-Capital
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1,442,955
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1,398,024
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Distributions in Excess of Accumulated Earnings
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(385,627
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)
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(370,229
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Accumulated Other Comprehensive Loss
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(22,415
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(19,668
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Treasury Shares at Cost (4,324,114 shares at March 31,
2009 and December 31, 2008)
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(140,018
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)
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(140,018
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Total First Industrial Realty Trust, Inc.s
Stockholders Equity
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895,385
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868,599
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Noncontrolling Interest
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80,149
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122,117
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Total Equity
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975,534
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990,716
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Total Liabilities and Equity
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$
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3,212,339
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$
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3,223,501
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The accompanying notes are an integral part of the consolidated
financial statements.
2
FIRST
INDUSTRIAL REALTY TRUST, INC.
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(As Adjusted)
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Three Months
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Three Months
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Ended
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Ended
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March 31,
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March 31,
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2009
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2008
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(Unaudited)
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(In thousands except
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per share data)
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Revenues:
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Rental Income
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$
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69,521
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$
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64,600
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Tenant Recoveries and Other Income
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25,140
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25,609
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Construction Revenues
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18,431
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22,954
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Total Revenues
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113,092
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113,163
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Expenses:
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Property Expenses
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33,613
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32,034
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General and Administrative
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10,109
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23,356
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Restructuring Costs
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4,744
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Depreciation and Other Amortization
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39,217
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36,676
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Construction Expenses
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17,883
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22,301
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Total Expenses
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105,566
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114,367
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Other Income/(Expense):
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Interest Income
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561
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644
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Interest Expense
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(28,098
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)
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(29,251
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)
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Amortization of Deferred Financing Costs
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(708
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)
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(713
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)
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Mark-to-Market
Gain on Interest Rate Protection Agreements
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1,115
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Total Other Income/(Expense)
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(27,130
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)
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(29,320
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)
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Loss from Continuing Operations Before Equity in Income of Joint
Ventures and Income Tax Benefit
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(19,604
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)
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(30,524
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Equity in Income of Joint Ventures
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29
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3,302
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Income Tax Benefit
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1,816
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2,508
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Loss from Continuing Operations
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(17,759
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)
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(24,714
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)
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Income from Discontinued Operations (Including Gain on Sale of
Real Estate of $4,413 and $73,361 for the Three Months Ended
March 31, 2009 and March 31, 2008, respectively)
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4,696
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79,339
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Benefit (Provision) for Income Taxes Allocable to Discontinued
Operations (Including $93 and $(247) allocable to Gain on Sale
of Real Estate for the Three Months Ended March 31, 2009
and March 31, 2008, respectively)
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106
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(407
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)
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(Loss) Income Before Gain on Sale of Real Estate
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(12,957
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)
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54,218
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Gain on Sale of Real Estate
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460
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7,671
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Provision for Income Taxes Allocable to Gain on Sale of Real
Estate
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(29
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)
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(1,591
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)
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Net (Loss) Income
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(12,526
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)
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60,298
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Less: Net Loss (Income) Attributable to the Noncontrolling
Interest
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1,982
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(7,075
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)
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Net (Loss) Income Attributable to First Industrial Realty Trust,
Inc.
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(10,544
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)
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53,223
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Less: Preferred Stock Dividends
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(4,857
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)
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(4,857
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)
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Net (Loss) Income Available to First Industrial Realty Trust,
Inc.s Common Stockholders and Participating
Securities
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$
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(15,401
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)
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$
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48,366
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Amounts Attributable to First Industrial Realty Trust, Inc.:
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Loss from Continuing Operations, Net of Income Tax Benefit
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$
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(15,178
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)
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$
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(20,941
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)
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Income from Discontinued Operations, Net of Income Tax Benefit
(Provision)
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$
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4,252
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$
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68,860
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Gain on Sale of Real Estate, Net of Income Tax Provision
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$
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382
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$
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5,304
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Net (Loss) Income Attributable to First Industrial Realty Trust,
Inc.
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$
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(10,544
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)
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$
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53,223
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Basic and Diluted Earnings Per Share:
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Loss from Continuing Operations Available to First Industrial
Realty Trust, Inc.
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$
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(0.45
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)
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$
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(0.48
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)
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Income From Discontinued Operations Attributable to First
Industrial Realty Trust, Inc.
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$
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0.10
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$
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1.58
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Net (Loss) Income Available to First Industrial Realty Trust,
Inc.s Common Stockholders
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$
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(0.35
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)
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$
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1.10
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Weighted Average Shares Outstanding, Basic and Diluted
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44,147
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42,984
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Dividends/Distribution Declared per Common Share Outstanding
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$
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0.00
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$
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0.72
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The accompanying notes are an integral part of the consolidated
financial statements.
3
FIRST
INDUSTRIAL REALTY TRUST, INC.
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(As Adjusted)
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Three Months
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Three Months
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Ended
|
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Ended
|
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|
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March 31,
|
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March 31,
|
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|
|
2009
|
|
|
2008
|
|
|
|
(Unaudited)
|
|
|
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(In thousands)
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|
Net (Loss) Income
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$
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(12,526
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)
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$
|
60,298
|
|
Mark-to-Market
on Interest Rate Protection Agreements, Net of Income Tax
(Provision) Benefit of $(25) and $259 for the Three Months Ended
March 31, 2009 and March 31, 2008, respectively
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(2,215
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)
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(1,842
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)
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Amortization of Interest Rate Protection Agreements
|
|
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(206
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)
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|
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(187
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)
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Mark-to-Market on Available for Sale Mortgage Notes Receivable
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|
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328
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|
Foreign Currency Translation Adjustment, Net of Tax Benefit of
$503 and $365 for the Three Months Ended March 31, 2009 and
March 31, 2008, respectively
|
|
|
(443
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)
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|
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(661
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)
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|
|
|
|
|
|
|
|
Comprehensive (Loss) Income
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|
|
(15,390
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)
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|
|
57,936
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|
Comprehensive Loss (Income) Attributable to Noncontrolling
Interest
|
|
|
2,099
|
|
|
|
(6,758
|
)
|
|
|
|
|
|
|
|
|
|
Comprehensive (Loss) Income Attributable to First Industrial
Realty Trust, Inc.
|
|
$
|
(13,291
|
)
|
|
$
|
51,178
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|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the consolidated
financial statements.
4
FIRST
INDUSTRIAL REALTY TRUST, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(As Adjusted)
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
|
(Unaudited)
|
|
|
|
(In thousands)
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net (Loss) Income
|
|
$
|
(12,526
|
)
|
|
$
|
60,298
|
|
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided
by Operating Activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
28,452
|
|
|
|
29,040
|
|
Amortization of Deferred Financing Costs
|
|
|
708
|
|
|
|
713
|
|
Other Amortization
|
|
|
17,237
|
|
|
|
13,971
|
|
Provision for Bad Debt
|
|
|
624
|
|
|
|
1,147
|
|
Mark-to-Market
Gain on Interest Rate Protection Agreements
|
|
|
1,115
|
|
|
|
|
|
Equity in Income of Joint Ventures
|
|
|
(29
|
)
|
|
|
(3,302
|
)
|
Distributions from Joint Ventures
|
|
|
101
|
|
|
|
3,606
|
|
Gain on Sale of Real Estate
|
|
|
(4,873
|
)
|
|
|
(81,032
|
)
|
Decrease in Developments for Sale Costs
|
|
|
13
|
|
|
|
1,517
|
|
Decrease (Increase) in Tenant Accounts Receivable, Prepaid
Expenses and Other Assets, Net
|
|
|
6,774
|
|
|
|
(16,967
|
)
|
Increase in Deferred Rent Receivable
|
|
|
(1,882
|
)
|
|
|
(1,995
|
)
|
Decrease in Accounts Payable, Accrued Expenses, Other
Liabilities, Rents Received in Advance and Security Deposits
|
|
|
(14,938
|
)
|
|
|
(6,545
|
)
|
Decrease in Restricted Cash
|
|
|
|
|
|
|
89
|
|
Cash Book Overdraft
|
|
|
|
|
|
|
2,901
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities
|
|
|
20,776
|
|
|
|
3,441
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Purchases of and Additions to Investment in Real Estate
|
|
|
(28,787
|
)
|
|
|
(160,441
|
)
|
Net Proceeds from Sales of Investments in Real Estate
|
|
|
15,858
|
|
|
|
175,135
|
|
Contributions to and Investments in Joint Ventures
|
|
|
(1,735
|
)
|
|
|
(5,382
|
)
|
Distributions from Joint Ventures
|
|
|
2,937
|
|
|
|
974
|
|
Repayment of Mortgage Loans Receivable
|
|
|
|
|
|
|
6,110
|
|
Increase in Restricted Cash
|
|
|
|
|
|
|
(240
|
)
|
|
|
|
|
|
|
|
|
|
Net Cash (Used in) Provided by Investing Activities
|
|
|
(11,727
|
)
|
|
|
16,156
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net Proceeds from the Issuance of Common Stock
|
|
|
|
|
|
|
56
|
|
Repurchase of Restricted Stock
|
|
|
(721
|
)
|
|
|
(3,348
|
)
|
Dividends/Distributions
|
|
|
(12,614
|
)
|
|
|
(36,079
|
)
|
Preferred Stock Dividends
|
|
|
(6,089
|
)
|
|
|
(6,089
|
)
|
Repayments on Mortgage Loans Payable
|
|
|
(905
|
)
|
|
|
(758
|
)
|
Debt Issuance Costs
|
|
|
|
|
|
|
(12
|
)
|
Proceeds from Unsecured Line of Credit
|
|
|
46,000
|
|
|
|
216,000
|
|
Repayments on Unsecured Line of Credit
|
|
|
|
|
|
|
(189,000
|
)
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by (Used in) Financing Activities
|
|
|
25,671
|
|
|
|
(19,230
|
)
|
|
|
|
|
|
|
|
|
|
Net Effect of Exchange Rate Changes on Cash and Cash Equivalents
|
|
|
(100
|
)
|
|
|
(39
|
)
|
Net Increase in Cash and Cash Equivalents
|
|
|
34,720
|
|
|
|
367
|
|
Cash and Cash Equivalents, Beginning of Period
|
|
|
3,182
|
|
|
|
5,757
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, End of Period
|
|
$
|
37,802
|
|
|
$
|
6,085
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the consolidated
financial statements.
5
|
|
1.
|
Organization
and Formation of Company
|
First Industrial Realty Trust, Inc. (the Company)
was organized in the state of Maryland on August 10, 1993.
The Company is a real estate investment trust (REIT)
as defined in the Internal Revenue Code of 1986 (the
Code). Unless the context otherwise requires, the
terms the Company, we, us,
and our refer to First Industrial Realty Trust,
Inc., First Industrial, L.P. and their other controlled
subsidiaries. We refer to our operating partnership, First
Industrial, L.P., as the Operating Partnership, and
our taxable REIT subsidiary, First Industrial Investment, Inc.,
as the TRS.
We began operations on July 1, 1994. Our operations are
conducted primarily through the Operating Partnership, of which
we are the sole general partner with an approximate 88.7% and
87.6% ownership interest at March 31, 2009 and
March 31, 2008, respectively, and through the TRS, of which
the Operating Partnership is the sole stockholder. We also
conduct operations through other partnerships, corporations, and
limited liability companies, the operating data of which,
together with that of the Operating Partnership and the TRS, are
consolidated with that of the Company as presented herein.
Noncontrolling interest at March 31, 2009 and
March 31, 2008 of approximately 11.3% and 12.4%,
respectively, represents the aggregate partnership interest in
the Operating Partnership held by the limited partners thereof.
We also own noncontrolling equity interests in, and provide
various services to, seven joint ventures whose purpose is to
invest in industrial properties (the 2003 Net Lease Joint
Venture, the 2005 Development/Repositioning Joint
Venture, the 2005 Core Joint Venture, the
2006 Net Lease Co-Investment Program, the 2006
Land/Development Joint Venture, the 2007 Canada
Joint Venture and the 2007 Europe Joint
Venture; together the Joint Ventures). The
Joint Ventures are accounted for under the equity method of
accounting. One of the Joint Ventures, the 2007 Europe Joint
Venture, does not own any properties.
The operating data of the Joint Ventures is not consolidated
with that of the Company as presented herein.
As of March 31, 2009, we owned 796 industrial properties
(inclusive of developments in process) located in 28 states
in the United States and one province in Canada, containing an
aggregate of approximately 70.8 million square feet of
gross leaseable area (GLA).
|
|
2.
|
Current
Business Risks and Uncertainties
|
The real estate markets have been significantly impacted by
recent events in the global credit markets. The current
recession has resulted in downward pressure on our net operating
income and has impaired our ability to sell properties.
Our $500,000 unsecured credit facility (the Unsecured Line
of Credit) and the indentures under which our senior
unsecured indebtedness is, or may be issued, contain certain
financial covenants, including, among other things, coverage
ratios and limitations on our ability to incur secured and
unsecured indebtedness. Consistent with our prior practice, we
will, in the future, continue to interpret and certify our
performance under these covenants in a good faith manner that we
deem reasonable and appropriate. However, these financial
covenants are complex and there can be no assurance that these
provisions would not be interpreted by our lenders in a manner
that could impose and cause us to incur material costs. Any
violation of these covenants would subject us to higher finance
costs and fees, or accelerated maturities. In addition, our
credit facilities and senior debt securities contain certain
cross-default provisions, which are triggered in the event that
our other material indebtedness is in default. Under the
Unsecured Line of Credit, an event of default can also occur if
the lenders, in their good faith judgment, determine that a
material adverse change has occurred which could prevent timely
repayment or materially impair our ability to perform our
obligations under the loan agreement.
We believe that we were in compliance with our financial
covenants as of March 31, 2009, and we anticipate that we
will be able to operate in compliance with our financial
covenants for the remainder of 2009. However, our
6
FIRST
INDUSTRIAL REALTY TRUST, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
ability to meet our financial covenants may be reduced if
economic and credit market conditions limit our property sales
and reduce our net operating income below our projections. We
expect to refinance indebtedness maturing in 2009 and to comply
with our financial covenants for the remainder of 2009 and
beyond. We plan to enhance our liquidity through a combination
of capital retention, mortgage financing and asset sales.
|
|
|
|
|
Retained Capital We plan to retain capital by
distributing the minimum amount of dividends required to
maintain our REIT status. We did not pay a common dividend in
April 2009 and may not pay dividends in future quarters in 2009
depending on our taxable income. If we are required to pay
common stock dividends in 2009, we may elect to satisfy this
obligation by distributing a combination of cash and common
shares.
|
|
|
|
Mortgage Financing In June 2009, we have
$125,000 of unsecured debt maturing ($118,955 as of
April 24, 2009 see Note 15), and in July
2009 we have $5,025 of secured mortgage debt maturing. We are in
active discussions with various lenders regarding the
origination of mortgage financing and the terms and conditions
thereof. The total loan proceeds are expected to be sufficient
to meet these maturities. In addition, these loans are expected
to comply with all covenants contained in our Unsecured Line of
Credit and our senior debt securities, including coverage ratios
and total indebtedness, total unsecured indebtedness and total
secured indebtedness limitations. No assurances can be made that
new secured financing will be obtained. If we fail to timely
retire our maturing debt, we will be in default under our
Unsecured Line of Credit and our senior unsecured debt
securities.
|
|
|
|
Asset Sales We sold three industrial
properties and one land parcel during the three months ended
March 31, 2009. We are in various stages of discussions
with third parties for the sale of additional properties for the
remainder of 2009 and plan to continue to market other
properties for sale throughout 2009. If we are unable to sell
properties on an advantageous basis, this may impair our
liquidity and our ability to meet our financial covenants.
|
In addition, we may from time to time repurchase or redeem our
outstanding securities. Any repurchases or redemptions would
depend upon prevailing market conditions, our liquidity
requirements, contractual restrictions and other factors we
consider important. Future repurchases or redemptions may
materially impact our liquidity, future tax liability and
results of operations.
Although we believe we will be successful in meeting our
liquidity needs through a combination of capital retention,
mortgage financing and asset sales, if we were to be
unsuccessful in executing one or more of the strategies outlined
above, we would be materially adversely affected.
|
|
3.
|
Summary
of Significant Accounting Policies
|
The accompanying unaudited interim financial statements have
been prepared in accordance with the accounting policies
described in the financial statements and related notes included
in our Annual Report on
Form 10-K
for the year ended December 31, 2008 (2008
Form 10-K)
and should be read in conjunction with such financial statements
and related notes. The following notes to these interim
financial statements highlight significant changes to the notes
included in the December 31, 2008 audited financial
statements included in our 2008
Form 10-K
and present interim disclosures as required by the Securities
and Exchange Commission.
In order to conform with generally accepted accounting
principles, we, in preparation of our financial statements, are
required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of March 31, 2009 and
December 31, 2008, and the reported amounts of revenues and
expenses for the three months ended March 31, 2009 and
March 31, 2008. Actual results could differ from those
estimates.
In our opinion, the accompanying unaudited interim financial
statements reflect all adjustments necessary for a fair
statement of our financial position as of March 31, 2009
and December 31, 2008 and the results of our operations and
comprehensive income for each of the three months ended
March 31, 2009 and March 31, 2008, and
7
FIRST
INDUSTRIAL REALTY TRUST, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
our cash flows for each of the three months ended March 31,
2009 and March 31, 2008, and all adjustments are of a
normal recurring nature.
Deferred
Leasing Intangibles
Deferred Leasing Intangibles, exclusive of Deferred Leasing
Intangibles held for sale, included in our total assets consist
of the following:
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
In-Place Leases
|
|
$
|
80,366
|
|
|
$
|
84,424
|
|
Less: Accumulated Amortization
|
|
|
(31,121
|
)
|
|
|
(30,350
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
49,245
|
|
|
$
|
54,074
|
|
|
|
|
|
|
|
|
|
|
Above Market Leases
|
|
$
|
14,814
|
|
|
$
|
15,830
|
|
Less: Accumulated Amortization
|
|
|
(2,691
|
)
|
|
|
(2,607
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
12,123
|
|
|
$
|
13,223
|
|
|
|
|
|
|
|
|
|
|
Tenant Relationships
|
|
$
|
28,616
|
|
|
$
|
28,717
|
|
Less: Accumulated Amortization
|
|
|
(6,451
|
)
|
|
|
(5,672
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
22,165
|
|
|
$
|
23,045
|
|
|
|
|
|
|
|
|
|
|
Total Deferred Leasing Intangibles, Net
|
|
$
|
83,533
|
|
|
$
|
90,342
|
|
|
|
|
|
|
|
|
|
|
Deferred Leasing Intangibles, exclusive of Deferred Leasing
Intangibles held for sale, included in our total liabilities
consist of the following:
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
Below Market Leases
|
|
$
|
42,912
|
|
|
$
|
42,856
|
|
Less: Accumulated Amortization
|
|
|
(13,195
|
)
|
|
|
(12,102
|
)
|
|
|
|
|
|
|
|
|
|
Total Deferred Leasing Intangibles, Net
|
|
$
|
29,717
|
|
|
$
|
30,754
|
|
|
|
|
|
|
|
|
|
|
Amortization expense related to in-place leases and tenant
relationships of deferred leasing intangibles was $5,737 and
$6,416 for the three months ended March 31, 2009 and
March 31, 2008, respectively. Rental revenues increased by
$374 and $1,277 related to net amortization of above/(below)
market leases for the three months ended March 31, 2009 and
March 31, 2008, respectively.
Recent
Accounting Pronouncements
In April 2009, the Financial Accounting Standards Board
(FASB) issued FASB Staff Position (FSP)
Statement of Financial Accounting Standards (SFAS)
107-1 and
Accounting Principles Board (APB)
28-1,
Interim Disclosures about Fair Value of Financial
Instruments
(FSP 107-1).
FSP 107-1
amends SFAS No. 107, Disclosures about Fair
Value of Financial Instruments to require an entity to
provide disclosures about fair value of financial instruments in
interim financial information.
FSP 107-1
is to be applied prospectively and is effective for interim and
annual periods ending after June 15, 2009 with early
adoption permitted for periods ending after March 15, 2009.
We will include the required disclosures in our quarter ending
June 30, 2009.
Effective January 1, 2009 we adopted
SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements
(SFAS 160). SFAS 160 establishes
requirements for ownership interests in subsidiaries held by
parties other than the Company (formerly called minority
interests) to be clearly identified, presented, and
disclosed in the consolidated statement of financial position
within equity, but separate from the parents equity.
Changes in a parents
8
FIRST
INDUSTRIAL REALTY TRUST, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
ownership interest (and transactions with noncontrolling
interest holders) while the parent retains its controlling
financial interest in its subsidiary should be accounted for as
equity transactions. The carrying amount of the noncontrolling
interest shall be adjusted to reflect the change in its
ownership interest in the subsidiary, with the offset to equity
attributable to the parent. As a result of transactions with
noncontrolling interest holders and changes in ownership
percentages that occurred during the three months ended
March 31, 2009, we decreased noncontrolling interest and
increased Additional Paid in Capital by $37,348, which
represents the cumulative impact of historical changes in the
parents ownership in the subsidiary. SFAS 160 was
effective, on a prospective basis, for fiscal years beginning
after December 15, 2008, however, presentation and
disclosure requirements needed to be retrospectively applied to
comparative financial statements. See Note 6 for additional
SFAS 160 disclosures.
Effective January 1, 2009 we adopted
SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities an amendment of
FASB Statement No. 133
(SFAS 161). SFAS 161 expands the current
disclosure requirements of SFAS No. 133,
Accounting for Derivative Instruments and Hedging
Activities (SFAS 133) such that
entities must now provide enhanced disclosures on an interim
basis and annual basis regarding how and why the entity uses
derivatives; how derivatives and related hedged items are
accounted for under SFAS 133 and how derivatives and
related hedged items affect the entitys financial
position, financial results and cash flow. See Note 13 for
the required disclosures. This Statement does not impact the
consolidated financial results as it is disclosure-only in
nature.
Effective January 1, 2009 we adopted FSP
FAS 157-2,
Effective Date of FASB Statement No. 157
(FSP 157-2).
FSP
FAS 157-2
delayed the effective date of SFAS No. 157
Fair Value Measurements
(SFAS 157) from 2008 to 2009 for all
nonfinancial assets and nonfinancial liabilities, except those
that are recognized or disclosed at fair value in the financial
statements on a recurring basis (at least annually). The
adoption of the provisions of SFAS No. 157 related to
nonfinancial assets and nonfinancial liabilities did not impact
our consolidated financial statements.
Effective January 1, 2009 we adopted FSP Emerging Issues
Task Force (EITF)
03-6-1,
Determining Whether Instruments Granted in Share-Based
Payment Transactions Are Participating Securities
(EITF 03-6-1),
which required retrospective application. Under
EITF 03-6-1,
unvested share-based payment awards that contain non-forfeitable
rights to dividends or dividend equivalents are participating
securities and, therefore, are included in the computation of
earnings per share (EPS) pursuant to the two-class
method. The two-class method determines EPS for each class of
common stock and participating securities according to dividends
or dividend equivalents and their respective participation
rights in undistributed earnings. Certain restricted stock
awards granted to employees and directors are considered
participating securities as they receive non-forfeitable
dividend or dividend equivalents at the same rate as common
stock. The impact of adopting
EITF 03-6-1 decreased
previously filed basic and diluted EPS by $0.02 for the three
months ended March 31, 2008.
Effective January 1, 2009 we adopted SFAS No. 141
(revised 2007), Business Combinations
(SFAS 141R). SFAS 141R states direct costs
of a business combination, such as transaction fees, due
diligence and consulting fees no longer qualify to be
capitalized as part of the business combination. Instead, these
direct costs need to be recognized as expense in the period in
which they are incurred. Accordingly, we retroactively expensed
these types of costs in 2008 related to future operating
property acquisitions.
Effective January 1, 2009 we adopted FSP APB
14-1
Accounting for Convertible Debt Instruments That May Be
Settled in Cash upon Conversion (Including Partial Cash
Settlement) (FSP APB
14-1)
that requires the liability and equity components of convertible
debt instruments to be separately accounted for in a manner that
reflects the issuers nonconvertible debt borrowing rate.
FSP APB 14-1
requires that the value assigned to the debt component be the
estimated fair value of a similar bond without the conversion
feature, which would result in the debt being recorded at a
discount. The resulting debt discount is then amortized over the
period during which the debt is expected to be outstanding as
additional non-cash interest expense. Retrospective application
to all periods presented is required.
The equity component of our convertible unsecured notes (the
2011 Exchangeable Notes) was $7,898 and therefore we
retroactively adjusted our Senior Unsecured Debt by this amount
as of September 2006. This debt discount has been subsequently
amortized and as of March 31, 2009 the principal amount of
the 2011 Exchangeable
9
FIRST
INDUSTRIAL REALTY TRUST, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Notes, its unamortized discount and the net carrying amount is
$200,000, $3,949 and $196,051, respectively. In addition, we
reclassified $194 of the original finance fees incurred in
relation to the 2011 Exchangeable Notes to equity as of
September 2006. For the three months ended March 31, 2009,
we recognized $2,707 of interest expense related to the 2011
Exchangeable Notes of which $2,312 relates to the coupon rate
and $395 relates to the debt discount amortization. We
anticipate amortizing the remaining debt discount into interest
expense through maturity in September, 2011. We recognized
$3,555 and $(88) as an adjustment to total equity as of
December 31, 2008 that represents amortization expense of
the discount and the loan fees, respectively, which would have
been recognized had FSP APB
14-1 been
effective since the issuance date of our 2011 Exchangeable Notes.
The impact to net income and the loss from continuing
operations, before noncontrolling interest, related to the
adoption of SFAS 141R and FSP APB 14-1, for the three months
ended March 31, 2008 was an increase to general and
administrative expense of $67, an increase to interest expense
of $395 and a decrease to amortization of deferred financing
fees of $10.
The impact to the balance sheet as of December 31, 2008
related to the adoption of SFAS 141R and FSP APB 14-1 is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as
|
|
|
Adjustments
|
|
|
Adjustments
|
|
|
Balance Sheet
|
|
|
|
previously
|
|
|
Related to
|
|
|
Related to
|
|
|
as
|
|
|
|
Filed - as of
|
|
|
SFAS 141R
|
|
|
FSP APB 14-1
|
|
|
Adjusted - as of
|
|
|
|
December 31, 2008
|
|
|
Adoption
|
|
|
Adoption
|
|
|
December 31, 2008
|
|
|
Deferred Financing Costs, Net
|
|
$
|
12,197
|
|
|
$
|
|
|
|
$
|
(106
|
)
|
|
$
|
12,091
|
|
Prepaid Expenses and Other Assets, Net
|
|
$
|
174,743
|
|
|
$
|
(269
|
)
|
|
$
|
|
|
|
$
|
174,474
|
|
Senior Unsecured Debt, Net
|
|
$
|
1,516,298
|
|
|
$
|
|
|
|
$
|
(4,343
|
)
|
|
$
|
1,511,955
|
|
Additional Paid in Capital
|
|
$
|
1,390,358
|
|
|
$
|
|
|
|
$
|
7,666
|
|
|
$
|
1,398,024
|
|
Distributions in Excess of Earnings
|
|
$
|
(366,962
|
)
|
|
$
|
(255
|
)
|
|
$
|
(3,012
|
)
|
|
$
|
(370,229
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total First Industrial Realty Trust, Inc.s
Stockholders Equity
|
|
$
|
864,200
|
|
|
$
|
(255
|
)
|
|
$
|
4,654
|
|
|
$
|
868,599
|
|
Noncontrolling Interest
|
|
|
122,548
|
|
|
|
(14
|
)
|
|
|
(417
|
)
|
|
|
122,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity
|
|
$
|
986,748
|
|
|
$
|
(269
|
)
|
|
$
|
4,237
|
|
|
$
|
990,716
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
Investments
in Joint Ventures and Property Management Services
|
At March 31, 2009, the 2003 Net Lease Joint Venture owned
10 industrial properties comprising approximately
5.1 million square feet of GLA, the 2005
Development/Repositioning Joint Venture owned 46 industrial
properties comprising approximately 8.6 million square feet
of GLA and several land parcels, the 2005 Core Joint Venture
owned 48 industrial properties comprising approximately
3.9 million square feet of GLA and several land parcels,
the 2006 Net Lease Co-Investment Program owned 12 industrial
properties comprising approximately 5.0 million square feet
of GLA, the 2006 Land/Development Joint Venture owned one
industrial property comprising approximately 0.8 million
square feet and several land parcels and the 2007 Canada Joint
Venture owned two industrial properties comprising approximately
0.2 million square feet of GLA and several land parcels. As
of March 31, 2009, the 2007 Europe Joint Venture does not
own any properties.
During July 2007, we entered into a management arrangement with
an institutional investor to provide property management,
leasing, acquisition, disposition and portfolio management
services for industrial properties (the July 2007
Fund). We do not own an equity interest in the July 2007
Fund, however, are entitled to incentive payments if certain
economic thresholds related to the industrial properties are
achieved.
10
FIRST
INDUSTRIAL REALTY TRUST, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
At March 31, 2009 and December 31, 2008, we have
receivables from the Joint Ventures and the July 2007 Fund of
$3,924 and $3,939, respectively, which mainly relates to
development, leasing, property management and asset management
fees due to us from the Joint Ventures and the July 2007 Fund,
reimbursement for insurance premiums and other operating
expenditures paid on behalf of the Joint Ventures and the July
2007 Fund and reimbursement for development expenditures made by
the TRS who is acting in the capacity of the general contractor
for development projects for the 2005 Development/Repositioning
Joint Venture. These receivable amounts are included in Prepaid
Expenses and Other Assets, Net.
During the three months ended March 31, 2009 and
March 31, 2008, we invested the following amounts in, as
well as received distributions from, our Joint Ventures and
recognized fees from acquisition, disposition, leasing,
development, incentive, property management and asset management
services from our Joint Ventures and the July 2007 Fund in the
following amounts:
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
Contributions
|
|
$
|
1,735
|
|
|
$
|
5,082
|
|
Distributions
|
|
$
|
3,038
|
|
|
$
|
4,580
|
|
Fees
|
|
$
|
2,718
|
|
|
$
|
4,586
|
|
|
|
5.
|
Mortgage
Loans Payable, Net, Senior Unsecured Debt, Net and Unsecured
Line of Credit
|
The following table discloses certain information regarding our
mortgage loans payable, senior unsecured debt and unsecured line
of credit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
|
|
|
|
|
Effective
|
|
|
|
|
Balance at
|
|
|
Interest
|
|
Interest
|
|
|
|
|
|
|
|
(As Adjusted)
|
|
|
Rate at
|
|
Rate at
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
March 31,
|
|
March 31,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
2009
|
|
Maturity Date
|
|
Mortgage Loans Payable, Net
|
|
$
|
76,303
|
|
|
$
|
77,396
|
|
|
5.50% - 9.25%
|
|
4.58% - 9.25%
|
|
July 2009 -
September 2024
|
Unamortized Premiums
|
|
|
(1,530
|
)
|
|
|
(1,717
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage Loans Payable, Gross
|
|
$
|
74,773
|
|
|
$
|
75,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Unsecured Debt, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Notes
|
|
$
|
194,541
|
|
|
$
|
194,524
|
|
|
5.750%
|
|
5.91%
|
|
01/15/16
|
2017 Notes
|
|
|
99,917
|
|
|
|
99,914
|
|
|
7.500%
|
|
7.52%
|
|
12/01/17
|
2027 Notes
|
|
|
15,057
|
|
|
|
15,056
|
|
|
7.150%
|
|
7.11%
|
|
05/15/27
|
2028 Notes
|
|
|
199,848
|
|
|
|
199,846
|
|
|
7.600%
|
|
8.13%
|
|
07/15/28
|
2011 Notes
|
|
|
199,883
|
|
|
|
199,868
|
|
|
7.375%
|
|
7.39%
|
|
03/15/11
|
2012 Notes
|
|
|
199,580
|
|
|
|
199,546
|
|
|
6.875%
|
|
6.85%
|
|
04/15/12
|
2032 Notes
|
|
|
49,485
|
|
|
|
49,480
|
|
|
7.750%
|
|
7.87%
|
|
04/15/32
|
2009 Notes
|
|
|
124,991
|
|
|
|
124,980
|
|
|
5.250%
|
|
4.10%
|
|
06/15/09
|
2014 Notes
|
|
|
115,292
|
|
|
|
114,921
|
|
|
6.420%
|
|
6.54%
|
|
06/01/14
|
2011 Exchangeable Notes*
|
|
|
196,051
|
|
|
|
195,657
|
|
|
4.625%
|
|
5.53%
|
|
09/15/11
|
2017 II Notes
|
|
|
118,170
|
|
|
|
118,163
|
|
|
5.950%
|
|
6.37%
|
|
05/15/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
$
|
1,512,815
|
|
|
$
|
1,511,955
|
|
|
|
|
|
|
|
Unamortized Discounts
|
|
|
15,685
|
|
|
|
16,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Unsecured Debt, Gross
|
|
$
|
1,528,500
|
|
|
$
|
1,528,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured Line of Credit
|
|
$
|
488,608
|
|
|
$
|
443,284
|
|
|
1.298%
|
|
1.298%
|
|
09/28/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
FIRST
INDUSTRIAL REALTY TRUST, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
|
* |
|
On September 25, 2006, we issued the 2011 Exchangeable
Notes, $175,000 of senior unsecured debt which bears interest at
a rate of 4.625%. We also granted the initial purchasers of the
2011 Exchangeable Notes an option exercisable until
October 4, 2006 to purchase up to an additional $25,000
principal amount of the 2011 Exchangeable Notes to cover
over-allotments, if any (the Over-Allotment Option).
On October 3, 2006, the initial purchasers of the 2011
Exchangeable Notes exercised their Over-Allotment Option with
respect to $25,000 in principal amount of the 2011 Exchangeable
Notes. With the exercise of the Over-Allotment Option, the
aggregate principal amount of 2011 Exchangeable Notes issued and
outstanding is $200,000. The 2011 Exchangeable Notes have an
initial exchange rate of 19.6356 shares of our common stock
per $1,000 principal amount, representing an exchange price of
approximately $50.93 per common share and an exchange premium of
approximately 20% based on the last reported sale price of
$42.44 per share of our common stock on September 19, 2006. |
In connection with our offering of the 2011 Exchangeable Notes,
we entered into capped call transactions (the capped call
transactions) with affiliates of two of the initial
purchasers of the 2011 Exchangeable Notes (the option
counterparties) in order to increase the effective
exchange price of the 2011 Exchangeable Notes to $59.42 per
share of our common stock, which represents an exchange premium
of approximately 40% based on the last reported sale price of
$42.44 per share of the our common stock on September 19,
2006. The aggregate cost of the capped call transactions was
approximately $6,835. The capped call transactions are expected
to reduce the potential dilution with respect to our common
stock upon exchange of the 2011 Exchangeable Notes to the extent
the then market value per share of our common stock does not
exceed the cap price of the capped call transaction during the
observation period relating to an exchange. The cost of the
capped call is accounted for as a hedge and included in First
Industrial Realty Trust, Inc.s stockholders equity
because the derivative is indexed to our own stock and meets the
scope exception in SFAS 133.
The following is a schedule of the stated maturities and
scheduled principal payments of the mortgage loans, senior
unsecured debt and unsecured line of credit, exclusive of
premiums and discounts, for the next five years ending
December 31, and thereafter:
|
|
|
|
|
|
|
Amount
|
|
|
Remainder of 2009
|
|
$
|
132,392
|
|
2010
|
|
|
15,815
|
|
2011
|
|
|
407,657
|
|
2012
|
|
|
693,383
|
|
2013
|
|
|
2,523
|
|
Thereafter
|
|
|
840,111
|
|
|
|
|
|
|
Total
|
|
$
|
2,091,881
|
|
|
|
|
|
|
All of our senior unsecured debt (except for the 2011
Exchangeable Notes) contain certain covenants, including
limitations on incurrence of debt and debt service coverage. The
Unsecured Line of Credit contains certain covenants including
limitations on incurrence of debt and debt service coverage.
Under the Unsecured Line of Credit, an event of default can also
occur if the lenders, in their good faith judgment, determine
that a material adverse change has occurred which could prevent
timely repayment or materially impair our ability to perform our
obligations under the loan agreement. We believe that the
Operating Partnership and the Company were in compliance with
all covenants relating to senior unsecured debt and the
Unsecured Line of Credit as of March 31, 2009. However,
these financial covenants are complex and there can be no
assurance that these provisions would not be interpreted by our
noteholders or lenders in a manner that could impose and cause
us to incur material costs.
12
FIRST
INDUSTRIAL REALTY TRUST, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Shares
of Common Stock:
During the three months ended March 31, 2009, 118,510
limited partnership interests in the Operating Partnership
(Units) were converted into an equivalent number of
shares of common stock, resulting in a reclassification of
$2,521 of noncontrolling interest to First Industrial Realty
Trust Inc.s Stockholders Equity.
The following table summarizes the changes in Total Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
|
|
|
|
|
|
|
|
|
|
Industrial
|
|
|
|
|
|
|
|
|
|
Realty Trust,
|
|
|
|
|
|
|
|
|
|
Inc.
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Noncontrolling
|
|
|
|
Total
|
|
|
Stockholders
|
|
|
Interest
|
|
|
Total Equity, December 31, 2008 (As Adjusted)
|
|
$
|
990,716
|
|
|
$
|
868,599
|
|
|
$
|
122,117
|
|
Net Loss
|
|
|
(12,526
|
)
|
|
|
(10,544
|
)
|
|
|
(1,982
|
)
|
Other Comprehensive Loss
|
|
|
(2,864
|
)
|
|
|
(2,747
|
)
|
|
|
(117
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Loss
|
|
|
(15,390
|
)
|
|
|
(13,291
|
)
|
|
|
(2,099
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Paid in Capital:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of Restricted Stock Awards
|
|
|
5,785
|
|
|
|
5,785
|
|
|
|
|
|
Conversion of Units to Common Stock
|
|
|
|
|
|
|
2,521
|
|
|
|
(2,521
|
)
|
Reallocation of Noncontrolling Interest
|
|
|
|
|
|
|
37,348
|
|
|
|
(37,348
|
)
|
Repurchase and Retirement of Restricted Stock Awards/Common Stock
|
|
|
(720
|
)
|
|
|
(720
|
)
|
|
|
|
|
Distributions in Excess of Accumulated Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Dividends
|
|
|
(4,857
|
)
|
|
|
(4,857
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity, March 31, 2009
|
|
$
|
975,534
|
|
|
$
|
895,385
|
|
|
$
|
80,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted
Stock:
During the three months ended March 31, 2009, we awarded
8,612 shares of restricted common stock to certain
directors. These restricted common stock shares had a fair value
of approximately $61 on the date of issuance. The restricted
common stock awarded to directors generally vests over a three
to ten year period. Compensation expense will be charged to
earnings over the respective vesting period for the shares
expected to vest.
During the three months ended March 31, 2009, we made a
grant of 1,000,000 restricted stock units to our Chief Executive
Officer. These restricted stock units had a fair value of
approximately $6,014 on the date of issuance. Of these
restricted stock units, a total of 600,000 (the Service
Awards) vest in four equal installments on the first,
second, third and fourth year anniversary of December 31,
2008, and a total of 400,000 (the Performance
Awards) vest in four installments of up to 100,000 on the
first, up to 200,000 on the second, up to 300,000 on the third
and up to 400,000 on the fourth year anniversary of
December 31, 2008, to the extent certain market conditions
are met. The market conditions are met when certain stock price
levels are achieved and maintained for certain time periods
between the award issuance date and December 31, 2013. Both
the Service Awards and Performance Awards require the Chief
Executive Officer to be employed by the Company at the
applicable vesting dates, subject to certain clauses in the
award agreement. The Service Awards are amortized over the four
year service period. The Performance Awards are amortized over
the service period of each installment, which is the expectation
of time to meet the market conditions.
13
FIRST
INDUSTRIAL REALTY TRUST, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Dividend/Distributions:
The following table summarizes dividends/distributions accrued
during the three months ended March 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2009
|
|
|
|
Dividend/
|
|
|
|
|
|
|
Distribution
|
|
|
Total
|
|
|
|
per Share
|
|
|
Dividend
|
|
|
Series F Preferred Stock
|
|
$
|
1,559.00
|
|
|
$
|
780
|
|
Series G Preferred Stock
|
|
$
|
1,809.00
|
|
|
$
|
452
|
|
Series J Preferred Stock
|
|
$
|
4,531.30
|
|
|
$
|
2,719
|
|
Series K Preferred Stock
|
|
$
|
4,531.30
|
|
|
$
|
906
|
|
|
|
7.
|
Acquisition
of Real Estate
|
During the three months ended March 31, 2008, we acquired
ten industrial properties comprising approximately
1.3 million square feet of GLA and several land parcels.
The purchase price of these acquisitions totaled approximately
$93,298, excluding costs incurred in conjunction with the
acquisition of the industrial properties and land parcels.
During the three months ended March 31, 2009, we acquired
one land parcel. The purchase price of the land parcel was
approximately $208, excluding costs incurred in conjunction with
the acquisition of the land parcel.
Intangible
Assets Subject to Amortization in the Period of
Acquisition
The fair value of in-place leases, above market leases, tenant
relationships and below market leases recorded due to real
estate properties acquired for the three months ended
March 31, 2009 and March 31, 2008 is as follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
In-Place Leases
|
|
$
|
|
|
|
$
|
4,868
|
|
Above Market Leases
|
|
$
|
|
|
|
$
|
61
|
|
Tenant Relationships
|
|
$
|
|
|
|
$
|
2,299
|
|
Below Market Leases
|
|
$
|
|
|
|
$
|
(524
|
)
|
The weighted average life in months of in-place leases, above
market leases, tenant relationships and below market leases
recorded as a result of the real estate properties acquired for
the three months ended March 31, 2009 and March 31,
2008 is as follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
March 31, 2009
|
|
|
March 31, 2008
|
|
|
In-Place Leases
|
|
|
N/A
|
|
|
|
41
|
|
Above Market Leases
|
|
|
N/A
|
|
|
|
43
|
|
Tenant Relationships
|
|
|
N/A
|
|
|
|
93
|
|
Below Market Leases
|
|
|
N/A
|
|
|
|
35
|
|
8. Sale
of Real Estate, Real Estate Held for Sale and Discontinued
Operations
During the three months ended March 31, 2009, we sold three
industrial properties comprising approximately 0.4 million
square feet of GLA and one land parcel. Gross proceeds from the
sales of the three industrial properties
14
FIRST
INDUSTRIAL REALTY TRUST, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
and one land parcel were approximately $19,883. The gain on sale
of real estate was approximately $4,873, of which $4,413 is
shown in discontinued operations. The three sold industrial
properties meet the criteria established by
SFAS No. 144, Accounting for the Impairment
or Disposal of Long- Lived Assets
(SFAS 144), to be included in discontinued
operations. Therefore, in accordance with SFAS 144, the
results of operations and gain on sale of real estate for the
three sold industrial properties are included in discontinued
operations. The results of operations and gain on sale of real
estate for the one land parcel that does not meet the criteria
established by SFAS 144 is included in continuing
operations.
At March 31, 2009, we had three industrial properties
comprising approximately 0.7 million square feet of GLA
held for sale. In accordance with SFAS 144, the results of
operations of the three industrial properties held for sale at
March 31, 2009 are included in discontinued operations.
There can be no assurance that such industrial properties held
for sale will be sold.
Income from discontinued operations, net of income taxes, for
the three months ended March 31, 2008 reflects the results
of operations of the three industrial properties that were sold
during the three months ended March 31, 2009, the results
of operations of 113 industrial properties that were sold during
the year ended December 31, 2008, the results of operations
of the three industrial properties identified as held for sale
at March 31, 2009 and the gain on sale of real estate
relating to 38 industrial properties that were sold during the
three months ended March 31, 2008.
The following table discloses certain information regarding the
industrial properties included in our discontinued operations
for the three months ended March 31, 2009 and
March 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
March 31, 2009
|
|
|
March 31, 2008
|
|
|
Total Revenues
|
|
$
|
1,054
|
|
|
$
|
16,224
|
|
Property Expenses
|
|
|
(493
|
)
|
|
|
(6,326
|
)
|
Depreciation and Amortization
|
|
|
(278
|
)
|
|
|
(3,920
|
)
|
Gain on Sale of Real Estate
|
|
|
4,413
|
|
|
|
73,361
|
|
Benefit (Provision) for Income Taxes
|
|
|
106
|
|
|
|
(407
|
)
|
|
|
|
|
|
|
|
|
|
Income from Discontinued Operations
|
|
$
|
4,802
|
|
|
$
|
78,932
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2009 and December 31, 2008, we had
mortgage notes receivables outstanding of approximately $37,332
and $34,532, respectively, in conjunction with certain property
sales for which we provided seller financing, which is included
as a component of Prepaid Expenses and Other Assets, Net.
15
FIRST
INDUSTRIAL REALTY TRUST, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
9.
|
Supplemental
Information to Statements of Cash Flows
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(As Adjusted)
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
March 31, 2009
|
|
|
March 31, 2008
|
|
|
Interest paid, net of capitalized interest
|
|
$
|
28,534
|
|
|
$
|
29,677
|
|
|
|
|
|
|
|
|
|
|
Capitalized interest
|
|
$
|
281
|
|
|
$
|
2,107
|
|
|
|
|
|
|
|
|
|
|
Supplemental schedule of noncash investing and financing
activities:
|
|
|
|
|
|
|
|
|
Distribution payable on common stock/Units
|
|
$
|
|
|
|
$
|
36,423
|
|
|
|
|
|
|
|
|
|
|
Exchange of Units for common stock:
|
|
|
|
|
|
|
|
|
Noncontrolling interest
|
|
$
|
(2,521
|
)
|
|
$
|
(3,678
|
)
|
Common stock
|
|
|
1
|
|
|
|
2
|
|
Additional
paid-in-capital
|
|
|
2,520
|
|
|
|
3,676
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
In conjunction with the property and land acquisitions, the
following liabilities were assumed:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
|
|
|
$
|
(251
|
)
|
|
|
|
|
|
|
|
|
|
Write-off of fully depreciated assets
|
|
$
|
(16,865
|
)
|
|
$
|
(17,614
|
)
|
|
|
|
|
|
|
|
|
|
In conjunction with certain property sales, we provided seller
financing:
|
|
|
|
|
|
|
|
|
Mortgage notes receivable
|
|
$
|
2,800
|
|
|
$
|
40,282
|
|
|
|
|
|
|
|
|
|
|
16
FIRST
INDUSTRIAL REALTY TRUST, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
10.
|
Earnings
Per Share (EPS)
|
The computation of basic and diluted EPS is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(As Adjusted)
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Loss from Continuing Operations, Net of Noncontrolling Interest
of $2,581 and $3,773 for the Three Months Ended March 31,
2009 and March 31, 2008, respectively, and Income Tax
Benefit of $1,816 and $2,508 for the Three Months Ended
March 31, 2009 and March 31, 2008, respectively
|
|
$
|
(15,178
|
)
|
|
$
|
(20,941
|
)
|
Gain on Sale of Real Estate, Net of Noncontrolling Interest of
$49 and $776 for the Three Months Ended March 31, 2009 and
March 31, 2008, respectively, and Income Tax Provision of
$29 and $1,591 for the Three Months Ended March 31, 2009
and March 31, 2008, respectively
|
|
|
382
|
|
|
|
5,304
|
|
Preferred Stock Dividends
|
|
|
(4,857
|
)
|
|
|
(4,857
|
)
|
|
|
|
|
|
|
|
|
|
Loss from Continuing Operations Available to First Industrial
Realty Trust, Inc.s Common Stockholders
|
|
$
|
(19,653
|
)
|
|
$
|
(20,494
|
)
|
|
|
|
|
|
|
|
|
|
Discontinued Operations, Net of Noncontrolling Interest of $550
and $10,072 for the Three Month Ended March 31, 2009 and
March 31, 2008, respectively, and Income Tax Benefit
(Provision) of $106 and $(407) for the Three Months Ended
March 31, 2009 and March 31, 2008, respectively
|
|
$
|
4,252
|
|
|
$
|
68,860
|
|
Discontinued Operations Allocable to Participating Securities
|
|
|
|
|
|
|
(1,016
|
)
|
|
|
|
|
|
|
|
|
|
Discontinued Operations Attributable to First Industrial Realty
Trust, Inc.
|
|
$
|
4,252
|
|
|
$
|
67,844
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) Income Available
|
|
$
|
(15,401
|
)
|
|
$
|
48,366
|
|
Net Income Allocable to Participating Securities
|
|
|
|
|
|
|
(1,016
|
)
|
|
|
|
|
|
|
|
|
|
Net (Loss) Income Available to First Industrial Realty Trust,
Inc.s Common Stockholders
|
|
$
|
(15,401
|
)
|
|
$
|
47,350
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted Average Shares Basic and Diluted
|
|
|
44,147,164
|
|
|
|
42,983,912
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted EPS:
|
|
|
|
|
|
|
|
|
Loss from Continuing Operations Available to First Industrial
Realty Trust, Inc.s Common Stockholders
|
|
$
|
(0.45
|
)
|
|
$
|
(0.48
|
)
|
|
|
|
|
|
|
|
|
|
Discontinued Operations Attributable to First Industrial Realty
Trust, Inc.
|
|
$
|
0.10
|
|
|
$
|
1.58
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) Income Available to First Industrial Realty Trust,
Inc.s Common Stockholders
|
|
$
|
(0.35
|
)
|
|
$
|
1.10
|
|
|
|
|
|
|
|
|
|
|
Participating securities included unvested restricted
stock/Units outstanding during the respective period that
participate in non-forfeitable dividends of the Company. In
accordance with
EITF 03-6-1,
$1,016 of income was allocated to participating securities for
purposes of the EPS computation based on their proportionate
share of net income for the three months ended March 31,
2008. Participating security holders are not obligated to share
in losses, therefore, none of the loss was allocated to
participating securities for the three months ended
March 31, 2009.
17
FIRST
INDUSTRIAL REALTY TRUST, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The number of weighted average shares diluted is the
same as the number of weighted average shares basic
for the three months ended March 31, 2009 and
March 31, 2008 as the dilutive effect of stock options and
restricted Units (that are not participating securities) was
excluded as its inclusion would have been antidilutive to the
loss from continuing operations available to common
stockholders, net of noncontrolling interest and income tax. If
the loss from continuing operations available to common
stockholders, net of noncontrolling interest and income tax, had
been income, the dilutive effect of stock options and restricted
Units (that are not participating securities) would have been 0
and 0, respectively, for the three months ended March 31,
2009 and 8,936 and 0, respectively, for the three months ended
March 31, 2008.
The total unvested restricted Units (that are not participating
securities) aggregating 1,000,000 and 0 were antidilutive at
March 31, 2009 and March 31, 2008, respectively, as
the issue price of these Units was higher than the
Companys average stock price during the respective periods
and accordingly, was excluded from dilution computations.
Additionally, options to purchase common stock of 162,634 and
354,101 for the three months ended March 31, 2009 and
March 31, 2008, respectively, were antidilutive as the
strike price of these stock options was higher than the
Companys average stock price during the respective periods
and accordingly was excluded from dilution computations.
The 2011 Exchangeable Notes issued during 2006, which are
convertible into common shares of the Company at a price of
$50.93, were not included in the computation of diluted EPS as
our average stock price did not exceed the strike price of the
conversion feature.
During 2009, the Board of Directors committed the Company to a
plan to further reduce organizational and overhead costs. For
the three months ended March 31, 2009, we recorded as
restructuring costs a pre-tax charge of $4,744 to provide for
employee severance and benefits ($4,032), costs associated with
the termination of certain office leases ($328) and other costs
($384) associated with implementing the restructuring plan.
Included in employee severance costs is $2,759 of non-cash costs
which represents the accelerated recognition of restricted stock
expense for certain employees. At March 31, 2009, we have
$2,830 included in Accounts Payable, Accrued Expenses and Other
Liabilities related to severance obligations, remaining lease
payments and other costs incurred but not yet paid.
|
|
12.
|
Stock
Based Compensation
|
For the three months ended March 31, 2009 and
March 31, 2008, we recognized $5,422 and $3,460,
respectively, in compensation expense related to restricted
stock awards, of which $45 and $395, respectively, was
capitalized in connection with development activities. At
March 31, 2009, we have $16,573 in unrecognized
compensation related to unvested restricted stock awards. The
weighted average period that the unrecognized compensation is
expected to be recognized is 1.28 years. We did not award
options to our employees or our directors during the three
months ended March 31, 2009 and March 31, 2008 and all
outstanding options are fully vested; therefore, no stock-based
employee compensation expense related to options is included in
Net (Loss) Income Attributable to First Industrial Realty Trust,
Inc.s Common Stockholders.
On October 23, 2008, we granted stock appreciation rights
(SARs) to our former interim Chief Executive Officer
(who is currently Chairman of the Board of Directors of the
Company) that entitles him to a special cash payment equal to
the appreciation in value of 75,000 shares of our common
stock. The payment is to be based on the excess of the closing
price of our common stock on October 22, 2009 over $7.94,
the closing price on the grant date. The award fully vested
during the three months ended December 31, 2008 upon his
acceptance of the position.
18
FIRST
INDUSTRIAL REALTY TRUST, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
At March 31, 2009, the fair value of the stock appreciation
rights was determined using the Black-Scholes option pricing
model with the following assumptions:
|
|
|
|
|
|
|
March 31,
|
|
|
|
2009
|
|
|
Stock price
|
|
$
|
2.45
|
|
Exercise price
|
|
$
|
7.94
|
|
Expected dividend yield
|
|
|
0.0
|
%
|
Expected stock volatility
|
|
|
136.1
|
%
|
Risk-free interest rate
|
|
|
0.36
|
%
|
Expected life (years)
|
|
|
0.56
|
|
Value
|
|
$
|
0.25
|
|
For the three months ended March 31, 2009, we reduced
compensation expense by $178 which was due to the decrease in
value per SAR from December 31, 2008 to March 31, 2009.
During the three months ended March 31, 2009, we made a
grant of 1,000,000 restricted stock units to our Chief
Executive Officer (see Note 6).
Our objectives in using interest rate derivatives are to add
stability to interest expense and to manage our exposure to
interest rate movements. To accomplish this objective, we
primarily use interest rate swaps as part of our interest rate
risk management strategy. Interest rate swaps designated as cash
flow hedges involve the receipt of variable-rate amounts from a
counterparty in exchange for fixed-rate payments over the life
of the agreements without exchange of the underlying notional
amount.
As of March 31, 2009, we have two forward starting swaps
each with a notional value of $59,750, which fixed the interest
rate on forecasted debt offerings. We designated both swaps as
cash flow hedges. The rate on the forecasted debt issuance
underlying one of the swaps locked on March 20, 2009 (the
Forward Starting Agreement 1) and as such, ceased to
qualify for hedge accounting. We recognized a $384 loss in
Mark-to-Market Gain on Interest Rate Protection Agreements in
the statement of operations related to the change in value from
March 20, 2009 to March 31, 2009. We anticipate that
the other swap (the Forward Starting Agreement 2)
will be highly effective, and, as a result, the change in its
value is shown in other comprehensive income.
The effective portion of changes in the fair value of the
Forward Starting Agreements 1 and 2 is recorded in Other
Comprehensive Income and the settlement amount is subsequently
amortized to earnings through interest expense. In the next
12 months, we will amortize approximately $240 into net
income by decreasing interest expense for similar interest rate
protection agreements we settled in previous periods.
As of March 31, 2009, we also have an interest rate swap
agreement with a notional value of $50,000 which fixed the LIBOR
rate on a portion of our outstanding borrowings on our Unsecured
Line of Credit at 2.4150% (the Interest Rate Swap
Agreement). Monthly payments or receipts are treated as a
component of interest expense. We designated the Interest Rate
Swap Agreement as a cash flow hedge. We anticipate that the
Interest Rate Swap Agreement will be highly effective, and, as a
result, the change in the fair value is shown in other
comprehensive income.
On or after March 31, 2009, our Series F Preferred
Stock is subject to a coupon rate reset. The coupon rate resets
every quarter beginning March 31, 2009 at 2.375% plus the
greater of i) the 30 year U.S. Treasury rate,
ii) the 10 year U.S. Treasury rate or
iii) 3-month
LIBOR. In October 2008, we entered into an interest rate swap
agreement with a notional value of $50,000 to mitigate our
exposure to floating interest rates related to the forecasted
reset rate of the coupon rate our Series F Preferred Stock
(the Series F Agreement). This Series F
Agreement fixes the
30-year
U.S. Treasury rate at 5.2175%. SFAS No. 133,
Accounting for Derivative Instruments and Hedging
19
FIRST
INDUSTRIAL REALTY TRUST, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Activities, (SFAS 133) does not
permit hedge accounting treatment related to equity instruments
and therefore the mark to market gains or losses related to this
agreement are recorded in the statement of operations.
The following is a summary of the terms of the forward starting
swaps and the interest rate swaps and their fair values, which
are included in Accounts Payable, Accrued Expenses and Other
Liabilities on the accompanying consolidated balance sheet as of
March 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional
|
|
|
|
|
|
Trade
|
|
|
Maturity
|
|
|
Fair Value As of
|
|
|
Fair Value As of
|
|
Hedge Product
|
|
Amount
|
|
|
Strike
|
|
|
Date
|
|
|
Date
|
|
|
March 31, 2009
|
|
|
December 31, 2008
|
|
|
Derivatives designated as hedging instruments under
SFAS 133:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward-Starting Agreement 1
|
|
$
|
59,750
|
|
|
|
4.0725
|
%
|
|
|
January 2008
|
|
|
|
May 15, 2014
|
|
|
$
|
(4,826
|
)
|
|
$
|
(3,429
|
)
|
Forward-Starting Agreement 2
|
|
|
59,750
|
|
|
|
4.0770
|
%
|
|
|
January 2008
|
|
|
|
May 15, 2014
|
|
|
|
(4,786
|
)
|
|
|
(3,452
|
)
|
Interest Rate Swap Agreement
|
|
|
50,000
|
|
|
|
2.4150
|
%
|
|
|
March 2008
|
|
|
|
April 1, 2010
|
|
|
|
(764
|
)
|
|
|
(858
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total derivatives designated as hedging instruments under
SFAS 133
|
|
$
|
169,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(10,376
|
)
|
|
$
|
(7,739
|
)
|
Derivatives not designated as hedging instruments under
SFAS 133:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series F Agreement
|
|
|
50,000
|
|
|
|
5.2175
|
%
|
|
|
October 2008
|
|
|
|
October 1, 2013
|
|
|
|
(1,574
|
)
|
|
|
(3,073
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Derivatives
|
|
$
|
219,500
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
(11,950
|
)
|
|
$
|
(10,812
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location of Gain
|
|
|
Gain Reclassified from
|
|
|
|
|
Amount of Loss Recognized in Income on
|
|
Derivatives in
|
|
|
|
|
|
|
|
Reclassified from
|
|
|
OCI into Income
|
|
|
|
|
Derivative
|
|
SFAS 133
|
|
Loss Recognized in OCI (Effective Portion)
|
|
|
Accumulated
|
|
|
(Effective Portion)
|
|
|
Location of Loss
|
|
(Ineffective Portion)
|
|
Cash Flow
|
|
Three Months Ended
|
|
|
OCI into Income
|
|
|
Three Months Ended
|
|
|
Recognized in
|
|
Three Months Ended
|
|
Hedging
|
|
March 31,
|
|
|
March 31,
|
|
|
(Effective
|
|
|
March 31,
|
|
|
March 31,
|
|
|
Income
|
|
March 31,
|
|
|
March 31,
|
|
Relationships
|
|
2009
|
|
|
2008
|
|
|
Portion)
|
|
|
2009
|
|
|
2008
|
|
|
(Ineffective Portion)
|
|
2009
|
|
|
2008
|
|
|
Interest Rate Products*
|
|
$
|
(2,253
|
)
|
|
$
|
(1,435
|
)
|
|
|
Interest Expense
|
|
|
$
|
206
|
|
|
$
|
187
|
|
|
Mark-to-Market Gain on
Interest Rate Protection Agreements
|
|
$
|
(384
|
)
|
|
$
|
|
|
|
|
|
* |
|
Includes Forward Starting Agreement 1, Forward Starting
Agreement 2, Interest Rate Swap Agreement and interest rate
protection agreements settled in previous periods. |
Additionally as of March 31, 2009, two of the Joint
Ventures have interest rate protection agreements outstanding
which effectively convert floating rate debt to fixed rate debt
on a portion of their total variable debt. The hedge
relationships are considered highly effective and as such, for
the three months ended March 31, 2009 and March 31,
2008, we recorded $63 and ($666) in unrealized gain (loss),
respectively, representing our 10% share, offset by ($25) and
$259 of income tax (provision) benefit, respectively, which is
shown in Mark-to-Market on Interest Rate Protection Agreements,
Net of Income Tax, in other comprehensive income.
Our agreements with our derivative counterparties contain
provisions where if we default on any of our indebtedness, then
we could also be declared in default on our derivative
obligations subject to certain thresholds.
We adopted the provisions of SFAS 157 as of January 1,
2008, for financial instruments recorded at fair value.
SFAS 157 establishes a three-tier fair value hierarchy,
which prioritizes the inputs used in measuring fair value. These
tiers include: Level 1, defined as observable inputs such
as quoted prices in active markets; Level 2, defined as
inputs other than quoted prices in active markets that are
either directly or indirectly observable; and Level 3,
defined as unobservable inputs in which little or no market data
exists, therefore requiring an entity to develop its own
assumptions.
20
FIRST
INDUSTRIAL REALTY TRUST, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The following table sets forth our financial liabilities that
are accounted for at fair value on a recurring basis as of
March 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at
|
|
|
|
|
|
|
March 31, 2009 Using:
|
|
|
|
|
|
|
Quoted Prices in
|
|
|
|
|
|
|
|
|
|
|
|
|
Active Markets for
|
|
|
Significant Other
|
|
|
Unobservable
|
|
|
|
March 31,
|
|
|
Identical Assets
|
|
|
Observable Inputs
|
|
|
Inputs
|
|
Description
|
|
2009
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Starting Agreements 1 and 2
|
|
$
|
9,612
|
|
|
|
|
|
|
$
|
9,612
|
|
|
|
|
|
Interest Rate Swap Agreement
|
|
$
|
764
|
|
|
|
|
|
|
$
|
764
|
|
|
|
|
|
Series F Agreement
|
|
$
|
1,574
|
|
|
|
|
|
|
|
|
|
|
$
|
1,574
|
|
The valuation of the Forward Starting Swap Agreements 1 and 2
and the Interest Rate Swap Agreement are determined using widely
accepted valuation techniques including discounted cash flow
analysis on the expected cash flows of each instrument. This
analysis reflects the contractual terms of the agreements,
including the period to maturity, and uses observable
market-based inputs, including interest rate curves and implied
volatilities. In adjusting the fair value of the interest rate
protection agreements for the effect of nonperformance risk, we
have considered the impact of netting and any applicable credit
enhancements. To comply with the provisions of SFAS 157, we
incorporated credit valuation adjustments (CVA) to
appropriately reflect both our own nonperformance risk and the
respective counterpartys nonperformance risk in the fair
value measurements. However, assessing significance of inputs is
a matter of judgment that should consider a variety of factors.
One factor we consider is the CVA and its materiality to the
overall valuation of the derivatives on the balance sheet and to
their related changes in fair value. We believe the inputs
obtained related to our CVAs are observable and therefore fall
under Level 2 of the fair value hierarchy. Accordingly, the
liabilities related to the Forward Starting Agreements 1 and 2
and the Interest Rate Swap Agreement are classified as
Level 2 amounts.
The Valuation of the Series F Agreement utilizes the same
valuation technique as the Forward Swap Agreements 1 and 2 and
the Interest Rate Swap Agreement, however, we consider the
Series F Agreement to be classified as Level 3 in the
fair value hierarchy due to a significant number of unobservable
inputs. The Series F Agreement swaps a fixed rate 5.2175%
for floating rate payments based on the
30-year
Treasury. No market observable prices exist for long-dated
Treasuries past 30 years. Therefore, we have classified the
Series F Agreement in its entirety as a Level 3.
The following table presents a reconciliation of our liabilities
classified as Level 3 at March 31, 2009:
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|
|
|
|
|
|
Fair Value Measurements
|
|
|
|
Using Significant
|
|
|
|
Unobservable Inputs
|
|
|
|
(Level 3)
|
|
|
|
Derivatives
|
|
|
Beginning liability balance
|
|
$
|
(3,073
|
)
|
Total unrealized gains:
|
|
|
|
|
Gains included in Mark-to-Market Gain on Interest Rate
Protection Agreements
|
|
|
1,499
|
|
|
|
|
|
|
Ending liability balance
|
|
$
|
(1,574
|
)
|
|
|
|
|
|
|
|
14.
|
Commitments
and Contingencies
|
In the normal course of business, we are involved in legal
actions arising from the ownership of our industrial properties.
In our opinion, the liabilities, if any, that may ultimately
result from such legal actions are not expected to have a
materially adverse effect on our consolidated financial
position, operations or liquidity.
21
FIRST
INDUSTRIAL REALTY TRUST, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Currently, we are the defendant in a suit brought in
February 2009 by the trustee in the bankruptcy of a former
tenant. The trustee is seeking the return of $5,000 related to
letters of credit that we drew down when the tenant defaulted on
its leases. The suit is in the early stages and, at this time,
we are not in a position to assess what, if any, ultimate
liability we may have to the bankruptcy estate. We plan to
vigorously defend the suit. In addition, in the normal course of
business, we are involved in other legal actions arising from
the ownership of our industrial properties. Except as disclosed
herein, in our opinion, the liabilities, if any, that may
ultimately result from such legal actions are not expected to
have a materially adverse effect on our consolidated financial
position, operations or liquidity.
At December 31, 2008 our investment in the 2005
Development/Repositioning Joint Venture and the 2006
Land/Development Joint Venture was $0 for both joint ventures.
This investment balance was due to impairment losses we recorded
in the year ended December 31, 2008 in accordance with APB
Opinion No. 18, The Equity Method of Accounting
for Investments in Common Stock. At March 31,
2009 our investment in the 2005 Development/Repositioning Joint
Venture and the 2006 Land/Development Joint Venture is $(851)
and $(166), respectively and are included within Accounts
Payable, Accrued Expenses and Other Liabilities, Net due to our
current commitment to fund operations at both ventures.
At March 31, 2009, we had 14 letters of credit outstanding
in the aggregate amount of $5,263. These letters of credit
expire between June 2009 and February 2010.
From April 1, 2009 to April 24, 2009, we sold two
industrial properties for approximately $12,600 of gross
proceeds. There were no industrial properties acquired during
this period.
On April 8, 2009, we repurchased and retired $1,045 of our
senior unsecured notes maturing in June 2009 (the 2009
Notes) at a redemption price of 95.000% of par. In
connection with the partial retirement, we recognized $49 as
gain on early retirement of debt, which is the difference
between the repurchase amount of $993 and the principal amount
retired of $1,045, net of the pro rata write off of the
unamortized loan fees and the unamortized settlement amount of
the interest rate protection agreements related to the 2009
Notes.
On April 17, 2009, we repurchased and retired $5,000 of the
2009 Notes at a redemption price of 97.000% of par. In
connection with the partial retirement, we recognized $136 as
gain on early retirement of debt, which is the difference
between the repurchase amount of $4,850 and the principal amount
retired of $5,000, net of the pro rata write-off of the
unamortized loan fees and the unamortized settlement amount of
the interest rate protection agreements related to the 2009
Notes.
22
|
|
Item 2.
|
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
|
The following discussion and analysis of our financial condition
and results of operations should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in
this
Form 10-Q.
This report contains 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 (the
Exchange Act). We intend 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, or similar
expressions. Our ability to predict results or the actual effect
of future plans or strategies is inherently uncertain. Factors
which could have an adverse effect on our operations and future
prospects include, but are not limited to, changes in: national,
international (including trade volume growth), 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), our
ability to qualify and maintain our status as a real estate
investment trust, availability and attractiveness of financing
(including both public and private capital) to us and to our
potential counterparties, interest rate levels, our ability to
maintain our current credit agency ratings, competition, 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 Companys current and
proposed market areas, difficulties in consummating acquisitions
and dispositions, risks related to our investments in properties
through joint ventures, 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, risks
related to doing business internationally (including foreign
currency exchange risks and risks related to integrating
international properties and operations) and those additional
factors described under the heading Risk Factors and
elsewhere in the Companys annual report on
Form 10-K
for the year ended December 31, 2008 (2008
Form 10-K),
in the Companys subsequent quarterly reports on
Form 10-Q,
and in Item 1A, Risk Factors, in this quarterly
report. We caution you not to place undue reliance on forward
looking statements, which reflect our analysis only and speak
only as of the date of this report or the dates indicated in the
statements. Unless the context otherwise requires, the terms
Company, we, us, and
our refer to First Industrial Realty Trust, Inc.,
First Industrial, L.P. and their controlled subsidiaries. We
refer to our operating partnership, First Industrial, L.P., as
the Operating Partnership, and our taxable REIT
subsidiary, First Industrial Investment, Inc., as the
TRS.
GENERAL
The Company was organized in the state of Maryland on
August 10, 1993. We are a real estate investment trust
(REIT) as defined in the Internal Revenue Code of
1986 (the Code).
We began operations on July 1, 1994. Our operations are
conducted primarily through the Operating Partnership, of which
we are the sole general partner with an approximate 88.7% and
87.6% ownership interest at March 31, 2009 and
March 31, 2008, respectively, and through the TRS, of which
the Operating Partnership is the sole stockholder. We also
conduct operations through other partnerships, corporations, and
limited liability companies, the operating data of which,
together with that of the Operating Partnership and the TRS, are
consolidated with that of the Company, as presented herein.
Noncontrolling interest at March 31, 2009 and
March 31, 2008 of approximately 11.3% and 12.4%,
respectively, represents the aggregate partnership interest in
the Operating Partnership held by the limited partners thereof.
We also own noncontrolling equity interests in, and provide
services to, seven joint ventures whose purpose is to invest in
industrial properties (the 2003 Net Lease Joint
Venture, the 2005 Development/Repositioning Joint
Venture, the 2005 Core Joint Venture, the
2006 Net Lease Co-Investment Program the 2006
Land/Development Joint Venture., the 2007 Canada
Joint Venture and the 2007 Europe Joint
Venture, together the Joint Ventures). The
Joint Ventures are accounted for under the equity method of
accounting. One of the Joint Ventures, the 2007 Europe Joint
Venture, does not own any properties.
The operating data of the Joint Ventures is not consolidated
with that of the Company as presented herein.
23
As of March 31, 2009, we owned 796 industrial properties
(inclusive of developments in process) located in 28 states
in the United States and one province in Canada, containing an
aggregate of approximately 70.8 million square feet of
gross leaseable area (GLA).
We maintain a website at www.firstindustrial.com. Information on
this website shall not constitute part of this
Form 10-Q.
Copies of our annual report on
Form 10-K,
quarterly reports on
Form 10-Q,
current reports on
Form 8-K
and amendments to such reports are available without charge on
our website as soon as reasonably practicable after such reports
are filed with or furnished to the Securities and Exchange
Commission. In addition, our Corporate Governance Guidelines,
Code of Business Conduct and Ethics, Audit Committee Charter,
Compensation Committee Charter, Nominating/Corporate Governance
Committee Charter, along with supplemental financial and
operating information prepared by us, are all available without
charge on our website or upon request to us. Amendments to, or
waivers from, our Code of Business Conduct and Ethics that apply
to our executive officers or directors will also be posted to
our website. We also post or otherwise make available on our
website from time to time other information that may be of
interest to our investors. Please direct requests as follows:
First Industrial Realty Trust, Inc.
311 S. Wacker, Suite 4000
Chicago, IL 60606
Attn: Investor Relations
MANAGEMENTS
OVERVIEW
We believe our financial condition and results of operations
are, primarily, a function of our performance and our Joint
Ventures performance in four key areas: leasing of
industrial properties, acquisition and development of additional
industrial properties, redeployment of internal capital and
access to external capital.
We generate revenue primarily from rental income and tenant
recoveries from long-term (generally three to six years)
operating leases of our industrial properties and our Joint
Ventures industrial properties. Such revenue is offset by
certain property specific operating expenses, such as real
estate taxes, repairs and maintenance, property management,
utilities and insurance expenses, along with certain other costs
and expenses, such as depreciation and amortization costs and
general and administrative and interest expenses. Our revenue
growth is dependent, in part, on our ability to
(i) increase rental income, through increasing either or
both occupancy rates and rental rates at our properties and our
Joint Ventures properties, (ii) maximize tenant
recoveries and (iii) minimize operating and certain other
expenses. Revenues generated from rental income and tenant
recoveries are a significant source of funds, in addition to
income generated from gains/losses on the sale of our properties
and our Joint Ventures properties (as discussed below),
for our distributions. The leasing of property, in general, and
occupancy rates, rental rates, operating expenses and certain
non-operating expenses, in particular, are impacted, variously,
by property specific, market specific, general economic and
other conditions, many of which are beyond our control. The
leasing of property also entails various risks, including the
risk of tenant default. If we were unable to maintain or
increase occupancy rates and rental rates at our properties and
our Joint Ventures properties or to maintain tenant
recoveries and operating and certain other expenses consistent
with historical levels and proportions, our revenue growth would
be limited. Further, if a significant number of our tenants and
our Joint Ventures tenants were unable to pay rent
(including tenant recoveries) or if we or our Joint Ventures
were unable to rent our properties on favorable terms, our
financial condition, results of operations, cash flow and
ability to pay dividends on, and the market price of, our common
stock would be adversely affected.
Our revenue growth is also dependent, in part, on our ability
and our Joint Ventures ability to acquire existing, and
acquire and develop new, additional industrial properties on
favorable terms. The Company itself, and through our various
Joint Ventures, continually seeks to acquire existing industrial
properties on favorable terms, and, when conditions permit, also
seeks to acquire and develop new industrial properties on
favorable terms. Existing properties, as they are acquired, and
acquired and developed properties, as they are leased, generate
revenue from rental income, tenant recoveries and fees, income
from which, as discussed above, is a source of funds for our
distributions. The acquisition and development of properties is
impacted, variously, by property specific, market specific,
general economic and other conditions, many of which are beyond
our control. The acquisition and
24
development of properties also entails various risks, including
the risk that our investments and our Joint Ventures
investments may not perform as expected. For example, acquired
existing and acquired and developed new properties may not
sustain
and/or
achieve anticipated occupancy and rental rate levels. With
respect to acquired and developed new properties, we may not be
able to complete construction on schedule or within budget,
resulting in increased debt service expense and construction
costs and delays in leasing the properties. Also, we, as well as
our Joint Ventures, face significant competition for attractive
acquisition and development opportunities from other
well-capitalized real estate investors, including both
publicly-traded REITs and private investors. Further, as
discussed below, we and our Joint Ventures may not be able to
finance the acquisition and development opportunities we
identify. If we and our Joint Ventures were unable to acquire
and develop sufficient additional properties on favorable terms,
or if such investments did not perform as expected, our revenue
growth would be limited and our financial condition, results of
operations, cash flow and ability to pay dividends on, and the
market price of, our common stock would be adversely affected.
We also generate income from the sale of our properties and our
Joint Ventures properties (including existing buildings,
buildings which we or our Joint Ventures have developed or
re-developed on a merchant basis, and land). The Company itself
and through our various Joint Ventures is continually engaged
in, and our income growth is dependent in part on,
systematically redeploying capital from properties and other
assets with lower yield potential into properties and other
assets with higher yield potential. As part of that process, we
and our Joint Ventures sell, on an ongoing basis, select
properties or land. The gain/loss on, and fees from, the sale of
such properties are included in our income and are a significant
source of funds, in addition to revenues generated from rental
income and tenant recoveries, for our distributions. Also, a
significant portion of our proceeds from such sales is used to
fund the acquisition of existing, and the acquisition and
development of new, industrial properties. The sale of
properties is impacted, variously, by property specific, market
specific, general economic and other conditions, many of which
are beyond our control. The sale of properties also entails
various risks, including competition from other sellers and the
availability of attractive financing for potential buyers of our
properties and our Joint Ventures properties. Further, our
ability to sell properties is limited by safe harbor rules
applying to REITs under the Code which relate to the number of
properties that may be disposed of in a year, their tax bases
and the cost of improvements made to the properties, along with
other tests which enable a REIT to avoid punitive taxation on
the sale of assets. If we and our Joint Ventures were unable to
sell properties on favorable terms, our income growth would be
limited and our financial condition, results of operations, cash
flow and ability to pay dividends on, and the market price of,
our common stock would be adversely affected.
We utilize a portion of the net sales proceeds from property
sales, borrowings under our unsecured line of credit (the
Unsecured Line of Credit) and proceeds from the
issuance when and as warranted, of additional debt and equity
securities to finance future acquisitions and developments and
to fund our equity commitments to our Joint Ventures. Access to
external capital on favorable terms plays a key role in our
financial condition and results of operations, as it impacts our
cost of capital and our ability and cost to refinance existing
indebtedness as it matures and to fund acquisitions,
developments and contributions to our Joint Ventures or through
the issuance, when and as warranted, of additional equity
securities. Our ability to access external capital on favorable
terms is dependent on various factors, including general market
conditions, interest rates, credit ratings on our capital stock
and debt, the markets perception of our growth potential,
our current and potential future earnings and cash distributions
and the market price of our capital stock. If we were unable to
access external capital on favorable terms, our financial
condition, results of operations, cash flow and ability to pay
dividends on, and the market price of, our common stock would be
adversely affected.
Current
Business Risks and Uncertainties
The real estate markets have been significantly impacted by
recent events in the global credit markets. The current
recession has resulted in downward pressure on our net operating
income and has impaired our ability to sell properties.
Our Unsecured Line of Credit and the indentures under which our
senior unsecured indebtedness is, or may be, issued contain
certain financial covenants, including, among other things,
coverage ratios and limitations on our ability to incur secured
and unsecured indebtedness. Consistent with our prior practice,
we will, in the future, continue to interpret and certify our
performance under these covenants in a good faith manner that we
deem
25
reasonable and appropriate. However, these financial covenants
are complex and there can be no assurance that these provisions
would not be interpreted by our lenders in a manner that could
impose and cause us to incur material costs. Any violation of
these covenants would subject us to higher finance costs and
fees, or accelerated maturities. In addition, our credit
facilities and senior debt securities contain certain
cross-default provisions, which are triggered in the event that
our other material indebtedness is in default. Under the
Unsecured Line of Credit, an event of default can also occur if
the lenders, in their good faith judgment, determine that a
material adverse change has occurred which could prevent timely
repayment or materially impair our ability to perform our
obligations under the loan agreement.
We believe that we were in compliance with our financial
covenants as of March 31, 2009, and we anticipate that we
will be able to operate in compliance with our financial
covenants for the remainder of 2009. However, our ability to
meet our financial covenants may be reduced if economic and
credit market conditions limit our property sales and reduce our
net operating income below our projections. We expect to
refinance indebtedness maturing in 2009 and to comply with our
financial covenants for the remainder of 2009 and beyond. We
plan to enhance our liquidity through a combination of capital
retention, mortgage financing and asset sales.
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|
|
|
|
Retained Capital We plan to retain capital by
distributing the minimum amount of dividends required to
maintain our REIT status. We did not pay a common dividend in
April 2009 and may not pay dividends in future quarters in 2009
depending on our taxable income. If we are required to pay
common stock dividends in 2009, we may elect to satisfy this
obligation by distributing a combination of cash and common
shares.
|
|
|
|
Mortgage Financing In June 2009, we have
$125.0 million of unsecured debt maturing
($119.0 million as of April 24, 2009 see
Subsequent Events), and in July 2009 we have $5.0 million
of secured mortgage debt maturing. We are in active discussions
with various lenders regarding the origination of mortgage
financing and the terms and conditions thereof. The total loan
proceeds are expected to be sufficient to meet these maturities.
In addition, these loans are expected to comply with all
covenants contained in our Unsecured Line of Credit and our
senior debt securities, including coverage ratios and total
indebtedness, total unsecured indebtedness and total secured
indebtedness limitations. No assurances can be made that new
secured financing will be obtained. If we fail to timely retire
our maturing debt, we will be in default under our Unsecured
Line of Credit and our senior unsecured debt securities.
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|
|
|
Asset Sales We sold three industrial
properties and one land parcel during the three months ended
March 31, 2009. We are in various stages of discussions
with third parties for the sale of additional properties for the
remainder of 2009 and plan to continue to market other
properties for sale throughout 2009. If we are unable to sell
properties on an advantageous basis, this may impair our
liquidity and our ability to meet our financial covenants.
|
In addition, we may from time to time repurchase or redeem our
outstanding securities. Any repurchases or redemptions would
depend upon prevailing market conditions, our liquidity
requirements, contractual restrictions and other factors we
consider important. Future repurchases or redemptions may
materially impact our liquidity, future tax liability and
results of operations.
Although we believe we will be successful in meeting our
liquidity needs through a combination of capital retention,
mortgage financing and asset sales, if we were to be
unsuccessful in executing one or more of the strategies outlined
above, we would be materially adversely affected.
RESULTS
OF OPERATIONS
Comparison
of Three Months Ended March 31, 2009 to Three Months Ended
March 31, 2008
Our net (loss) income attributable to First Industrial Realty
Trust, Inc.s common stockholders and participating
securities was $(15.4) million and $48.4 million for
the three months ended March 31, 2009 and March 31,
2008, respectively. Basic and diluted net (loss) income
attributable to First Industrial Realty Trust, Inc.s
common stockholders were $(0.35) per share for the three months
ended March 31, 2009, and $1.10 per share for the three
months ended March 31, 2008.
26
The tables below summarize our revenues, property expenses and
depreciation and other amortization by various categories for
the three months ended March 31, 2009 and March 31,
2008. Same store properties are properties owned prior to
January 1, 2008 and held as an operating property through
March 31, 2009 and developments and redevelopments that
were placed in service prior to January 1, 2008 or were
substantially completed for 12 months prior to
January 1, 2008. Properties which are at least 75% occupied
at acquisition are placed in service. All other properties are
placed in service as they reach the earlier of
a) stabilized occupancy (generally defined as 90%
occupied), or b) one year subsequent to acquisition or
development completion. Acquired properties are properties that
were acquired subsequent to December 31, 2007 and held as
an operating property through March 31, 2009. Sold
properties are properties that were sold subsequent to
December 31, 2007. (Re)Developments and land are land
parcels and developments and redevelopments that were not
a) substantially complete 12 months prior to
January 1, 2008 or b) placed in service prior to
January 1, 2008. Other revenues are derived from the
operations of our maintenance company, fees earned from our
Joint Ventures and other miscellaneous revenues. Construction
revenues and expenses represent revenues earned and expenses
incurred in connection with the TRS acting as general contractor
or development manager to construct industrial properties,
including industrial properties for the 2005
Development/Repositioning Joint Venture, and also includes
revenues and expenses related to the development and sale of
properties built for third parties. Other expenses are derived
from the operations of our maintenance company and other
miscellaneous regional expenses.
Our future financial condition and results of operations,
including rental revenues, may be impacted by the future
acquisition and sale of properties. Our future revenues and
expenses may vary materially from historical rates.
For the three months ended March 31, 2009 and
March 31, 2008, the occupancy rates of our same store
properties were 86.4% and 88.6%, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
|
|
|
|
|
|
March 31, 2009
|
|
|
March 31, 2008
|
|
|
$ Change
|
|
|
% Change
|
|
|
|
($ in 000s)
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store Properties
|
|
$
|
77,818
|
|
|
$
|
81,592
|
|
|
$
|
(3,774
|
)
|
|
|
(4.6
|
)%
|
Acquired Properties
|
|
|
7,165
|
|
|
|
832
|
|
|
|
6,333
|
|
|
|
761.2
|
%
|
Sold Properties
|
|
|
393
|
|
|
|
15,842
|
|
|
|
(15,449
|
)
|
|
|
(97.5
|
)%
|
(Re)Developments and Land, Not Included Above
|
|
|
5,829
|
|
|
|
2,031
|
|
|
|
3,798
|
|
|
|
187.0
|
%
|
Other
|
|
|
4,510
|
|
|
|
6,136
|
|
|
|
(1,626
|
)
|
|
|
(26.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
95,715
|
|
|
$
|
106,433
|
|
|
$
|
(10,718
|
)
|
|
|
(10.1
|
)%
|
Discontinued Operations
|
|
|
(1,054
|
)
|
|
|
(16,224
|
)
|
|
|
15,170
|
|
|
|
(93.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal Revenues
|
|
$
|
94,661
|
|
|
$
|
90,209
|
|
|
$
|
4,452
|
|
|
|
4.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction Revenues
|
|
|
18,431
|
|
|
|
22,954
|
|
|
|
(4,523
|
)
|
|
|
(19.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues
|
|
$
|
113,092
|
|
|
$
|
113,163
|
|
|
$
|
(71
|
)
|
|
|
(0.1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from same store properties decreased $3.8 million
due primarily to a decrease in lease termination fees of
$1.7 million and a decrease in occupancy. Revenues from
acquired properties increased $6.3 million due to the 26
industrial properties acquired subsequent to December 31,
2007 totaling approximately 3.1 million square feet of GLA,
as well as acquisitions of land parcels in September and October
2008 for which we receive ground rents. Revenues from sold
properties decreased $15.4 million due to the 117
industrial properties sold subsequent to December 31, 2007
totaling approximately 9.5 million square feet of GLA.
Revenues from (re)developments and land increased
$3.8 million primarily due to an increase in occupancy.
Other revenues decreased $1.6 million due primarily to a
decrease in fees earned from our Joint Ventures. Construction
revenues decreased $4.5 million primarily due to the
substantial completion of certain development projects for which
we were acting in the capacity of development manager,
substantially offset by two development projects that commenced
in April 2008 and August 2008 for which we are acting in the
capacity of development manager.
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
|
|
|
|
|
|
March 31, 2009
|
|
|
March 31, 2008
|
|
|
$ Change
|
|
|
% Change
|
|
|
|
($ in 000s)
|
|
|
PROPERTY AND CONSTRUCTION EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store Properties
|
|
$
|
27,311
|
|
|
$
|
26,875
|
|
|
$
|
436
|
|
|
|
1.6
|
%
|
Acquired Properties
|
|
|
1,451
|
|
|
|
185
|
|
|
|
1,266
|
|
|
|
684.3
|
%
|
Sold Properties
|
|
|
130
|
|
|
|
5,476
|
|
|
|
(5,346
|
)
|
|
|
(97.6
|
)%
|
(Re)Developments and Land, Not Included Above
|
|
|
2,591
|
|
|
|
1,540
|
|
|
|
1,051
|
|
|
|
68.2
|
%
|
Other
|
|
|
2,623
|
|
|
|
4,284
|
|
|
|
(1,661
|
)
|
|
|
(38.8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
34,106
|
|
|
$
|
38,360
|
|
|
$
|
(4,254
|
)
|
|
|
(11.1
|
)%
|
Discontinued Operations
|
|
|
(493
|
)
|
|
|
(6,326
|
)
|
|
|
5,833
|
|
|
|
(92.2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Property Expenses
|
|
$
|
33,613
|
|
|
$
|
32,034
|
|
|
$
|
1,579
|
|
|
|
4.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction Expenses
|
|
|
17,883
|
|
|
|
22,301
|
|
|
|
(4,418
|
)
|
|
|
(19.8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Property and Construction Expenses
|
|
$
|
51,496
|
|
|
$
|
54,335
|
|
|
$
|
(2,839
|
)
|
|
|
(5.2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property expenses include real estate taxes, repairs and
maintenance, property management, utilities, insurance and other
property related expenses. Property expenses from same store
properties remained relatively unchanged. Property expenses from
acquired properties increased $1.3 million due to
properties acquired subsequent to December 31, 2007.
Property expenses from sold properties decreased
$5.3 million due to properties sold subsequent to
December 31, 2007. Property expenses from (re)developments
and land increased $1.1 million due to an increase in the
substantial completion of developments. Expenses are no longer
capitalized to the basis of a property once the development is
substantially complete. The $1.7 million decrease in other
expense is primarily attributable to a decrease in compensation
resulting from a decrease in employee headcount as well as a
decrease in incentive compensation expense. Construction
expenses decreased $4.4 million primarily due to the
substantial completion of certain development projects for which
we were acting in the capacity of development manager,
substantially offset by two development projects that commenced
in April 2008 and August 2008 for which we are acting in the
capacity of development manager.
General and administrative expense decreased $13.2 million,
or 56.7%, due to a decrease in compensation resulting from a
decrease in employee headcount as well as a decrease in
incentive compensation.
For the three months ended March 31, 2009, we incurred
$4.7 million in restructuring charges related to employee
severance and benefits ($4.0 million), costs associated
with the termination of certain office leases
($0.3 million) and other costs ($0.4 million)
associated with implementing the restructuring plan. Due to the
timing of certain related expenses, we expect to record a total
of approximately $1.0 million of additional restructuring
charges in subsequent quarters. We also anticipate a reduction
of general and administrative expense in the remainder of 2009
compared to 2008 as a result of the employee terminations and
office closings that have been a part of our restructuring plan.
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
|
|
|
|
|
|
March 31, 2009
|
|
|
March 31, 2008
|
|
|
$ Change
|
|
|
% Change
|
|
|
|
($ in 000s)
|
|
|
DEPRECIATION and OTHER AMORTIZATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store Properties
|
|
$
|
32,414
|
|
|
$
|
33,818
|
|
|
$
|
(1,404
|
)
|
|
|
(4.2
|
)%
|
Acquired Properties
|
|
|
3,693
|
|
|
|
683
|
|
|
|
3,010
|
|
|
|
440.7
|
%
|
Sold Properties
|
|
|
127
|
|
|
|
3,780
|
|
|
|
(3,653
|
)
|
|
|
(96.6
|
)%
|
(Re)Developments and Land, Not Included Above and Other
|
|
|
2,664
|
|
|
|
1,854
|
|
|
|
810
|
|
|
|
43.7
|
%
|
Corporate Furniture, Fixtures and Equipment
|
|
|
597
|
|
|
|
461
|
|
|
|
136
|
|
|
|
29.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
39,495
|
|
|
$
|
40,596
|
|
|
$
|
(1,101
|
)
|
|
|
(2.7
|
)%
|
Discontinued Operations
|
|
|
(278
|
)
|
|
|
(3,920
|
)
|
|
|
3,642
|
|
|
|
(92.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Depreciation and Other Amortization
|
|
$
|
39,217
|
|
|
$
|
36,676
|
|
|
$
|
2,541
|
|
|
|
6.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and other amortization for same store properties
remained relatively unchanged. Depreciation and other
amortization from acquired properties increased
$3.0 million due to properties acquired subsequent to
December 31, 2007. Depreciation and other amortization from
sold properties decreased $3.7 million due to properties
sold subsequent to December 31, 2007. Depreciation and
other amortization for (re)developments and land and other
increased $0.8 million due primarily to an increase in the
substantial completion of developments.
Interest income remained relatively unchanged.
Interest expense decreased approximately $1.2 million, or
3.9%, primarily due to a decrease in the weighted average
interest rate for the three months ended March 31, 2009
(5.56%), as compared to the three months ended March 31,
2008 (6.16%), partially offset by a decrease in capitalized
interest for the three months ended March 31, 2009 due to a
decrease in development activities and an increase in the
weighted average debt balance outstanding for the three months
ended March 31, 2009 ($2,069.2 million), as compared
to the three months ended March 31, 2008
($2,046.9 million).
Amortization of deferred financing costs remained relatively
unchanged.
In October 2008, we entered into an interest rate swap agreement
(the Series F Agreement) to mitigate our
exposure to floating interest rates related to the forecasted
coupon reset of our Series F Preferred Stock. The
Series F Agreement has a notional value of
$50.0 million and is effective from April 1, 2009
through October 1, 2013. The Series F Agreement fixes
the 30-year
U.S. Treasury rate at 5.2175%. We recorded
$1.5 million in mark to market gain which is included in
Mark-to-Market Gain on Interest Rate Protection Agreements in
earnings for the three months ended March 31, 2009.
In March 2009, the rate on the forecasted debt underlying one of
our forward starting swaps (the Forward Starting Agreement
1) locked on March 20, 2009, and as such, ceased to
qualify for hedge accounting. The Forward Starting Agreement 1
has a notional value of $59.8 million, is effective from
May 15, 2009 through May 15, 2014 and fixes the LIBOR
rate at 4.0725%. We recorded $0.4 million in mark to market
loss which is included in Mark-to-Market Gain on Interest Rate
Protection Agreements in earnings for the three months ended
March 31, 2009.
Equity in income of Joint Ventures decreased approximately
$3.3 million, or 99.1%, due primarily to a decrease in our
economic share of gains and earn outs on property sales from the
2005 Development/Repositioning Joint Venture during the three
months ended March 31, 2009 as compared to the three months
ended March 31, 2008.
The income tax benefit (included in continuing operations,
discontinued operations and gain on sale) increased
$1.4 million, or 271.2%, due primarily to a decrease in
gain on sale of real estate and costs incurred related to the
restructuring, substantially offset by a decrease in general and
administrative expense within the TRS for the three months ended
March 31, 2009.
29
The following table summarizes certain information regarding the
industrial properties included in our discontinued operations
for the three months ended March 31, 2009 and
March 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
March 31, 2009
|
|
|
March 31, 2008
|
|
|
|
($ in 000s)
|
|
|
Total Revenues
|
|
$
|
1,054
|
|
|
$
|
16,224
|
|
Property Expenses
|
|
|
(493
|
)
|
|
|
(6,326
|
)
|
Depreciation and Amortization
|
|
|
(278
|
)
|
|
|
(3,920
|
)
|
Gain on Sale of Real Estate
|
|
|
4,413
|
|
|
|
73,361
|
|
Benefit (Provision) for Income Taxes
|
|
|
106
|
|
|
|
(407
|
)
|
|
|
|
|
|
|
|
|
|
Income from Discontinued Operations
|
|
$
|
4,802
|
|
|
$
|
78,932
|
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations, net of income taxes, for
the three months ended March 31, 2009 reflects the results
of operations and gain on sale of real estate relating to three
industrial properties that were sold during the three months
ended March 31, 2009 and the results of operations of three
properties that were identified as held for sale at
March 31, 2009.
Income from discontinued operations, net of income taxes, for
the three months ended March 31, 2008 reflects the gain on
sale of real estate relating to 38 industrial properties that
were sold during the three months ended March 31, 2008 and
reflects the results of operations of the 113 industrial
properties that were sold during the year ended
December 31, 2008, three industrial properties that were
sold during the three months ended March 31, 2009 and three
industrial properties identified as held for sale at
March 31, 2009.
The $0.5 million gain on sale of real estate for the three
months ended March 31, 2009 resulted from the sale of one
land parcel that does not meet the criteria established by SFAS
No. 144, Accounting for the Impairment or Disposal
of Long-Lived Assets (SFAS 144), for
inclusion in discontinued operations. The $7.7 million gain
on sale of real estate for the three months ended March 31,
2008 resulted from the sale of several land parcels that do not
meet the criteria established by SFAS 144 for inclusion in
discontinued operations.
LIQUIDITY
AND CAPITAL RESOURCES
At March 31, 2009, our cash and restricted cash was
approximately $37.8 and $0.1 million, respectively.
Restricted cash is primarily comprised of cash held in escrow in
connection with mortgage debt requirements.
We have considered our short-term (one year or less) liquidity
needs and the adequacy of our estimated cash flow from
operations and other expected liquidity sources to meet these
needs. Our 2009 Notes, in the aggregate principal amount of
$125.0 million ($119.0 million as of April 24,
2009 see Subsequent Events), are due on
June 15, 2009. We expect to satisfy the payment obligations
on the 2009 Notes through the origination of mortgage financing,
although there can be no assurance that any such financing could
be accomplished on reasonable terms or at all. With the
exception of the 2009 Notes, we believe that our principal
short-term liquidity needs are to fund normal recurring
expenses, property acquisitions, developments, renovations,
expansions and other nonrecurring capital improvements, debt
service requirements and the minimum distributions required to
maintain our REIT qualification under the Code. We anticipate
that these needs will be met with cash flows provided from
operating and investing activities, including the disposition of
select assets. In addition, we plan to retain capital by
distributing the minimum amount of dividends required to
maintain our REIT status. We did not pay a common dividend in
April 2009 and may not pay dividends in future quarters in 2009
depending on our taxable income. If we are required to pay
common stock dividends in 2009, we may elect to satisfy this
obligation by distributing a combination of cash and common
shares.
We expect to meet long-term (greater than one year) liquidity
requirements such as property acquisitions, developments,
scheduled debt maturities, major renovations, expansions and
other nonrecurring capital improvements through the disposition
of select assets, long-term unsecured indebtedness and the
issuance of additional equity securities.
30
At March 31, 2009, borrowings under the Unsecured Line of
Credit bore interest at a weighted average interest rate of
1.298%. The Unsecured Line of Credit currently bears interest at
a floating rate of LIBOR plus 1.0% or the prime rate plus 0.15%,
at our election. As of April 24, 2009, we had approximately
$5.5 million available for additional borrowings under the
Unsecured Line of Credit. Our Unsecured Line of Credit contains
certain financial covenants including limitations on incurrence
of debt and debt service coverage. Our access to borrowings may
be limited if we fail to meet any of these covenants. We believe
that we were in compliance with our financial covenants as of
March 31, 2009, and we anticipate that we will be able to
operate in compliance with our financial covenants for the
remainder of 2009. However, these financial covenants are
complex and there can be no assurance that these provisions
would not be interpreted by our lenders in a manner that could
impose and cause us to incur material costs. In addition, our
ability to meet our financial covenants may be reduced if 2009
economic and credit market conditions limit our property sales
and reduce our net operating income below our plan. Any
violation of these covenants would subject us to higher finance
costs and fees, or accelerated maturities. In addition, our
credit facilities and senior debt securities contain certain
cross-default provisions, which are triggered in the event that
our other material indebtedness is in default.
We currently have credit ratings from Standard &
Poors, Moodys and Fitch Ratings of BB/Ba1/BBB-,
respectively. In the event of a downgrade, we believe we would
continue to have access to sufficient capital; however, our cost
of borrowing would increase and our ability to access certain
financial markets may be limited.
Three
Months Ended March 31, 2009
Net cash provided by operating activities of approximately
$20.8 million for the three months ended March 31,
2009 was comprised primarily of the non-cash adjustments of
approximately $41.3 million and distributions from Joint
Ventures of $0.1 million, partially offset by the net loss
before noncontrolling interest of approximately
$12.5 million and the net change in operating assets and
liabilities of approximately $8.1 million. The adjustments
for the non-cash items of approximately $41.3 million are
primarily comprised of depreciation and amortization of
approximately $46.4 million, mark to market gain related to
the Series F Agreement and the Forward Starting Swap
Agreement 1 of approximately $1.1 million and the
provision for bad debt of approximately $0.6 million,
offset by the gain on sale of real estate of approximately
$4.9 million and the effect of the straight-lining of
rental income of approximately $1.9 million.
Net cash used in investing activities of approximately
$11.7 million for the three months ended March 31,
2009 was comprised primarily of the acquisition of real estate,
development of real estate, capital expenditures related to the
expansion and improvement of existing real estate and
contributions to, and investments in, our Joint Venture,
partially offset by the net proceeds from the sale of real
estate and distributions from our industrial real estate Joint
Ventures.
During the three months ended March 31, 2009, we acquired
one land parcel. The purchase price for the land parcel was
approximately $0.2 million, excluding costs incurred in
conjunction with the acquisition of the land parcel.
We invested approximately $1.7 million in, and received
total distributions of approximately $3.0 million from, our
Joint Ventures. As of March 31, 2009, our industrial real
estate Joint Ventures owned 119 industrial properties comprising
approximately 23.6 million square feet of GLA and several
land parcels.
During the three months ended March 31, 2009, we sold three
industrial properties comprising approximately 0.4 million
square feet of GLA and one land parcel. Net proceeds from the
sales of the three industrial properties and one land parcel
were approximately $15.9 million.
Net cash provided by financing activities of approximately
$25.7 million for the three months ended March 31,
2009 was derived primarily of net proceeds from our Unsecured
Line of Credit, partially offset by common and preferred stock
dividends and unit distributions, the repurchase of restricted
stock from our employees to pay for withholding taxes on the
vesting of restricted stock and repayments on mortgage loans
payable.
31
Market
Risk
The following discussion about our risk-management activities
includes forward-looking statements that involve
risk and uncertainties. Actual results could differ materially
from those projected in the forward-looking statements. Our
business subjects us to market risk from interest rates, and to
a much lesser extent, foreign currency fluctuations.
Interest
Rate Risk
In the normal course of business, we also face risks that are
either non-financial or non-quantifiable. Such risks principally
include credit risk and legal risk and are not represented in
the following analysis.
At March 31, 2009, approximately $1,639.1 million
(approximately 78.9% of total debt at March 31,
2009) of our debt was fixed rate debt (including
$50.0 million of borrowings under the Unsecured Line of
Credit in which the interest rate was fixed via an interest rate
protection agreement) and approximately $438.6 million
(approximately 21.1% of total debt at March 31,
2009) was variable rate debt.
For fixed rate debt, changes in interest rates generally affect
the fair value of the debt, but not our earnings or cash flows.
Conversely, for variable rate debt, changes in the interest rate
generally do not impact the fair value of the debt, but would
affect our future earnings and cash flows. The interest rate
risk and changes in fair market value of fixed rate debt
generally do not have a significant impact on us until we are
required to refinance such debt. See Note 5 to the
consolidated financial statements for a discussion of the
maturity dates of our various fixed rate debt.
Based upon the amount of variable rate debt outstanding at
March 31, 2009, a 10% increase or decrease in the interest
rate on our variable rate debt would decrease or increase,
respectively, future net income and cash flows by approximately
$0.6 million per year. The foregoing calculation assumes an
instantaneous increase or decrease in the rates applicable to
the amount of borrowings outstanding under our Unsecured Line of
Credit at March 31, 2009. One consequence of the recent
turmoil in the capital and credit markets has been sudden and
dramatic changes in LIBOR, which could result in an increase to
such rates. In addition, the calculation does not account for
our option to elect the lower of two different interest rates
under our borrowings or other possible actions, such as
prepayment, that we might take in response to any rate increase.
The use of derivative financial instruments allows us to manage
risks of increases in interest rates with respect to the effect
these fluctuations would have on our earnings and cash flows. As
of March 31, 2009, we had two outstanding interest rate
protection agreements with an aggregate notional amount of
$119.5 million which fix the interest rate on a forecasted
offering of debt, one outstanding interest rate protection
agreement with a notional amount of $50.0 million which
fixes the interest rate on borrowings on our Unsecured Line of
Credit and one outstanding interest rate protection agreement
with a notional amount of $50.0 million which mitigates our
exposure to floating interest rates related to the forecasted
reset rate of our Series F Preferred Stock. See
Note 13 to the consolidated financial statements.
Foreign
Currency Exchange Rate Risk
Owning, operating and developing industrial property outside of
the United States exposes us to the possibility of volatile
movements in foreign exchange rates. Changes in foreign
currencies can affect the operating results of international
operations reported in U.S. dollars and the value of the
foreign assets reported in U.S. dollars. The economic
impact of foreign exchange rate movements is complex because
such changes are often linked to variability in real growth,
inflation, interest rates, governmental actions and other
factors. At March 31, 2009, we owned one property and two
land parcels for which the U.S. dollar was not the
functional currency. This property and the land parcels are
located in Ontario, Canada and use the Canadian dollar as their
functional currency. Additionally, the 2007 Canada Joint Venture
owned two industrial properties and several land parcels for
which the functional currency is the Canadian dollar.
Subsequent
Events
From April 1, 2009 to April 24, 2009, we sold two
industrial properties for approximately $12.6 million of
gross proceeds. There were no industrial properties acquired
during this period.
32
On April 8, 2009, we repurchased and retired
$1.0 million of the 2009 Notes at a redemption price of
95.000% of par. In connection with the partial retirement, we
recognized $0.1 million as gain on early retirement of
debt, which is the difference between the repurchase amount of
$0.9 million and the principal amount retired of
$1.0 million, net of the pro rata write off of the
unamortized loan fees and the unamortized settlement amount of
the interest rate protection agreements related to the 2009
Notes.
On April 17, 2009, we repurchased and retired
$5.0 million of the 2009 Notes at a redemption price of
97.000% of par. In connection with the partial retirement, we
recognized $0.1 million as gain on early retirement of
debt, which is the difference between the repurchase amount of
$4.9 million and the principal amount retired of
$5.0 million, net of the pro rata write off of the
unamortized loan fees and the unamortized settlement amount of
the interest rate protection agreements related to the 2009
Notes.
|
|
Item 3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
Response to this item is included in Item 2,
Managements Discussion and Analysis of Financial
Condition and Results of Operations above.
|
|
Item 4.
|
Controls
and Procedures
|
Our principal executive officer and principal financial officer,
in evaluating the effectiveness of our disclosure controls and
procedures (as defined in Exchange Act
Rules 13a-15(e)
and
15d-15(e))
as of the end of the period covered by this report, based on the
evaluation of these controls and procedures required by Exchange
Act
Rules 13a-15(b)
or
15d-15(b),
have concluded that as of the end of such period our disclosure
controls and procedures were effective.
There has been no change in our internal control over financial
reporting that occurred during the fiscal quarter covered by
this report that has materially affected, or is reasonably
likely to materially affect, our internal control over financial
reporting.
33
PART II.
OTHER INFORMATION
|
|
Item 1.
|
Legal
Proceedings
|
None.
None.
|
|
Item 2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
None
|
|
Item 3.
|
Defaults
Upon Senior Securities
|
None.
|
|
Item 4.
|
Submission
of Matters to a Vote of Security Holders
|
None.
|
|
Item 5.
|
Other
Information
|
Not Applicable.
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
10
|
.1*
|
|
Amendment No. 1, dated as of February 5, 2009, to the
Restricted Stock Unit Award Agreement, dated as of
January 9, 2009, by and between First Industrial Realty
Trust, Inc.
|
|
10
|
.2
|
|
Severance Agreement and Release and Waiver of Claims, dated as
of February 27, 2009, by and between Jerry Pientka and
First Industrial Investment, Inc. (incorporated by reference to
Exhibit 10.1 of the
Form 8-K
of the Company filed March 3, 2009, File
No. 1-13102).
|
|
31
|
.1*
|
|
Certification of the Principal Executive Officer pursuant to
Rule 13a-14(a)
under the Securities Exchange Act of 1934, as amended.
|
|
31
|
.2*
|
|
Certification of the Principal Financial Officer pursuant to
Rule 13a-14(a)
under the Securities Exchange Act of 1934, as amended.
|
|
32
|
.1**
|
|
Certification of the Principal Executive Officer and the
Principal Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of
the Sarbanes -Oxley Act of 2002.
|
|
|
|
* |
|
Filed herewith |
|
** |
|
Furnished herewith |
|
|
|
Indicates a compensatory plan or arrangement contemplated by
Item 15a(3) of
Form 10-K. |
34
EXHIBIT INDEX
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
10
|
.1*
|
|
Amendment No. 1, dated as of February 5, 2009, to the
Restricted Stock Unit Award Agreement, dated as of
January 9, 2009, by and between First Industrial Realty
Trust, Inc.
|
|
10
|
.2
|
|
Severance Agreement and Release and Waiver of Claims, dated as
of February 27, 2009, by and between Jerry Pientka and
First Industrial Investment, Inc. (incorporated by reference to
Exhibit 10.1 of the
Form 8-K
of the Company filed March 3, 2009, File
No. 1-13102).
|
|
31
|
.1*
|
|
Certification of the Principal Executive Officer pursuant to
Rule 13a-14(a)
under the Securities Exchange Act of 1934, as amended.
|
|
31
|
.2*
|
|
Certification of the Principal Financial Officer pursuant to
Rule 13a-14(a)
under the Securities Exchange Act of 1934, as amended.
|
|
32
|
.1**
|
|
Certification of the Principal Executive Officer and the
Principal Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of
the Sarbanes -Oxley Act of 2002.
|
|
|
|
* |
|
Filed herewith |
|
** |
|
Furnished herewith |
|
|
|
Indicates a compensatory plan or arrangement contemplated by
Item 15a(3) of
Form 10-K. |
36