þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland | 36-3935116 | |
(State or Other Jurisdiction of | (I.R.S. Employer | |
Incorporation or Organization) | Identification No.) |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
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EX-31.1 | ||||||||
EX-31.2 | ||||||||
EX-32.1 | ||||||||
EX-101 INSTANCE DOCUMENT | ||||||||
EX-101 SCHEMA DOCUMENT | ||||||||
EX-101 CALCULATION LINKBASE DOCUMENT | ||||||||
EX-101 LABELS LINKBASE DOCUMENT | ||||||||
EX-101 PRESENTATION LINKBASE DOCUMENT | ||||||||
EX-101 DEFINITION LINKBASE DOCUMENT |
2
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
(Unaudited) | ||||||||
(In thousands except share | ||||||||
and per share data) | ||||||||
ASSETS |
||||||||
Assets: |
||||||||
Investment in Real Estate: |
||||||||
Land |
$ | 586,358 | $ | 554,829 | ||||
Buildings and Improvements |
2,142,334 | 2,061,266 | ||||||
Construction in Progress |
5,422 | 2,672 | ||||||
Less: Accumulated Depreciation |
(565,023 | ) | (509,634 | ) | ||||
Net Investment in Real Estate |
2,169,091 | 2,109,133 | ||||||
Real Estate and Other Assets Held for Sale, Net of Accumulated Depreciation and Amortization of $122,497 and
$165,211 at June 30, 2011 and December 31, 2010, respectively |
312,211 | 392,291 | ||||||
Cash and Cash Equivalents |
34,548 | 25,963 | ||||||
Restricted Cash |
16 | 117 | ||||||
Tenant Accounts Receivable, Net |
4,202 | 3,064 | ||||||
Investments in Joint Ventures |
2,101 | 2,451 | ||||||
Deferred Rent Receivable, Net |
43,132 | 37,878 | ||||||
Deferred Financing Costs, Net |
13,824 | 15,351 | ||||||
Deferred Leasing Intangibles, Net |
41,822 | 39,718 | ||||||
Prepaid Expenses and Other Assets, Net |
114,794 | 124,088 | ||||||
Total Assets |
$ | 2,735,741 | $ | 2,750,054 | ||||
LIABILITIES AND EQUITY |
||||||||
Liabilities: |
||||||||
Indebtedness: |
||||||||
Mortgage and Other Loans Payable, Net |
$ | 625,532 | $ | 486,055 | ||||
Senior Unsecured Notes, Net |
823,659 | 879,529 | ||||||
Unsecured Credit Facility |
100,000 | 376,184 | ||||||
Mortgage Loan Payable on Real Estate Held for Sale, Net, Inclusive of $6 of Accrued Interest at December 31, 2010 |
| 1,014 | ||||||
Accounts Payable, Accrued Expenses and Other Liabilities, Net |
58,553 | 67,326 | ||||||
Deferred Leasing Intangibles, Net |
17,299 | 18,519 | ||||||
Rents Received in Advance and Security Deposits |
25,636 | 27,367 | ||||||
Leasing Intangibles Held for Sale, Net of Accumulated Amortization of $957 and $2,668 at June 30, 2011 and December
31, 2010, respectively |
1,130 | 1,916 | ||||||
Total Liabilities |
1,651,809 | 1,857,910 | ||||||
Commitments and Contingencies |
| | ||||||
Equity: |
||||||||
First Industrial Realty Trust, Inc.s Stockholders Equity: |
||||||||
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 June 30, 2011 and December 31, 2010,
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) |
| | ||||||
Common Stock ($0.01 par value, 150,000,000 shares authorized, 90,940,850 and 73,165,410 shares issued and
86,616,736 and 68,841,296 shares outstanding at June 30, 2011 and December 31, 2010, respectively) |
909 | 732 | ||||||
Additional Paid-in-Capital |
1,809,123 | 1,608,014 | ||||||
Distributions in Excess of Accumulated Earnings |
(620,252 | ) | (606,511 | ) | ||||
Accumulated Other Comprehensive Loss |
(12,735 | ) | (15,339 | ) | ||||
Treasury Shares at Cost (4,324,114 shares at June 30, 2011 and December 31, 2010) |
(140,018 | ) | (140,018 | ) | ||||
Total First Industrial Realty Trust, Inc.s Stockholders Equity |
1,037,027 | 846,878 | ||||||
Noncontrolling Interest |
46,905 | 45,266 | ||||||
Total Equity |
1,083,932 | 892,144 | ||||||
Total Liabilities and Equity |
$ | 2,735,741 | $ | 2,750,054 | ||||
3
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands except per share data) | ||||||||||||||||
Revenues: |
||||||||||||||||
Rental Income |
$ | 56,196 | $ | 55,696 | $ | 112,212 | $ | 111,983 | ||||||||
Tenant Recoveries and Other Income |
17,127 | 18,682 | 35,395 | 38,719 | ||||||||||||
Construction Revenues |
| | | 270 | ||||||||||||
Total Revenues |
73,323 | 74,378 | 147,607 | 150,972 | ||||||||||||
Expenses: |
||||||||||||||||
Property Expenses |
23,866 | 23,719 | 49,906 | 50,081 | ||||||||||||
General and Administrative |
4,768 | 7,375 | 10,037 | 16,292 | ||||||||||||
Restructuring Costs |
393 | 947 | 1,553 | 1,211 | ||||||||||||
Impairment of Real Estate |
(5,879 | ) | | (7,760 | ) | 9,155 | ||||||||||
Depreciation and Other Amortization |
28,378 | 29,225 | 55,847 | 57,643 | ||||||||||||
Construction Expenses |
| | | 209 | ||||||||||||
Total Expenses |
51,526 | 61,266 | 109,583 | 134,591 | ||||||||||||
Other Income (Expense): |
||||||||||||||||
Interest Income |
887 | 1,008 | 1,867 | 2,083 | ||||||||||||
Interest Expense |
(25,746 | ) | (25,637 | ) | (52,548 | ) | (53,332 | ) | ||||||||
Amortization of Deferred Financing Costs |
(1,077 | ) | (793 | ) | (2,162 | ) | (1,614 | ) | ||||||||
Mark-to-Market Loss on Interest Rate Protection Agreements |
(232 | ) | (1,324 | ) | (188 | ) | (1,458 | ) | ||||||||
Loss from Early Retirement of Debt |
(3,233 | ) | (4,320 | ) | (4,259 | ) | (3,965 | ) | ||||||||
Foreign Currency Exchange Loss, Net |
| (190 | ) | | (190 | ) | ||||||||||
Total Other Income (Expense) |
(29,401 | ) | (31,256 | ) | (57,290 | ) | (58,476 | ) | ||||||||
Loss from Continuing Operations Before Equity in Income of Joint
Ventures, Gain on Change in Control of Interests and Income Tax Benefit
(Provision) |
(7,604 | ) | (18,144 | ) | (19,266 | ) | (42,095 | ) | ||||||||
Equity in Income of Joint Ventures |
99 | 582 | 135 | 123 | ||||||||||||
Gain on Change in Control of Interests |
689 | | 689 | | ||||||||||||
Income Tax Benefit (Provision) |
280 | (2,511 | ) | 490 | (2,636 | ) | ||||||||||
Loss from Continuing Operations |
(6,536 | ) | (20,073 | ) | (17,952 | ) | (44,608 | ) | ||||||||
Income from Discontinued Operations (Including Gain on Sale of Real
Estate of $3,537 and $3,610 for the Three Months Ended June 30, 2011 and
June 30, 2010, respectively, and $7,341 and $7,619 for the Six Months
Ended June 30, 2011 and June 30, 2010, respectively) |
8,416 | 4,964 | 16,090 | 9,997 | ||||||||||||
Provision for Income Taxes Allocable to Discontinued Operations
(Including $1,919 and $0 allocable to Gain on Sale of Real Estate for the
Three Months Ended June 30, 2011 and June 30, 2010, respectively, and
$2,434 and $0 for the Six Months ended June 30, 2011 and June 30, 2010,
respectively) |
(1,974 | ) | | (2,615 | ) | | ||||||||||
Loss Before Gain on Sale of Real Estate |
(94 | ) | (15,109 | ) | (4,477 | ) | (34,611 | ) | ||||||||
Gain on Sale of Real Estate |
| | | 1,072 | ||||||||||||
Provision for Income Taxes Allocable to Gain on Sale of Real Estate |
| | | (380 | ) | |||||||||||
Net Loss |
(94 | ) | (15,109 | ) | (4,477 | ) | (33,919 | ) | ||||||||
Less: Net Loss Attributable to the Noncontrolling Interest |
290 | 1,561 | 943 | 3,457 | ||||||||||||
Net Income (Loss) Attributable to First Industrial Realty Trust, Inc. |
196 | (13,548 | ) | (3,534 | ) | (30,462 | ) | |||||||||
Less: Preferred Stock Dividends |
(4,947 | ) | (4,979 | ) | (9,874 | ) | (9,939 | ) | ||||||||
Net Loss Available to First Industrial Realty Trust, Inc.s Common
Stockholders and Participating Securities |
$ | (4,751 | ) | $ | (18,527 | ) | $ | (13,408 | ) | $ | (40,401 | ) | ||||
Basic and Diluted Earnings Per Share: |
||||||||||||||||
Loss from Continuing Operations Available to First Industrial Realty
Trust, Inc.s Common Stockholders |
$ | (0.14 | ) | $ | (0.37 | ) | $ | (0.35 | ) | $ | (0.80 | ) | ||||
Income From Discontinued Operations Attributable to First Industrial
Realty Trust, Inc.s Common Stockholders |
$ | 0.08 | $ | 0.07 | $ | 0.17 | $ | 0.15 | ||||||||
Net Loss Available to First Industrial Realty Trust, Inc.s Common
Stockholders |
$ | (0.06 | ) | $ | (0.29 | ) | $ | (0.18 | ) | $ | (0.65 | ) | ||||
Weighted Average Shares Outstanding |
79,727 | 62,838 | 75,208 | 62,320 | ||||||||||||
4
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands) | ||||||||||||||||
Net Loss |
$ | (94 | ) | $ | (15,109 | ) | $ | (4,477 | ) | $ | (33,919 | ) | ||||
Mark-to-Market on Interest Rate Protection Agreements,
Net of Income Tax Provision of $0 and $0 for the Three
Months Ended June 30, 2011 and June 30, 2010,
respectively, and $0 and $414 for the Six Months ended
June 30, 2011 and June 30, 2010, respectively |
| (20 | ) | | (587 | ) | ||||||||||
Amortization of Interest Rate Protection Agreements |
546 | 523 | 1,102 | 1,028 | ||||||||||||
Write-off of Unamortized Settlement Amounts of Interest
Rate Protection Agreements |
2,348 | (13 | ) | 2,348 | (158 | ) | ||||||||||
Foreign Currency Translation Adjustment, Net of Income
Tax (Provision) Benefit of $(341) and $166 for the Three
Months Ended June 30, 2011 and June 30, 2010,
respectively, and $(172) and $634 for the Six Months
ended June 30, 2011 and June 30, 2010, respectively |
(557 | ) | 14 | (426 | ) | 702 | ||||||||||
Comprehensive Income (Loss) |
2,243 | (14,605 | ) | (1,453 | ) | (32,934 | ) | |||||||||
Comprehensive Loss Attributable to Noncontrolling Interest |
140 | 1,521 | 745 | 3,379 | ||||||||||||
Comprehensive Income (Loss) Attributable to First
Industrial Realty Trust, Inc. |
$ | 2,383 | $ | (13,084 | ) | $ | (708 | ) | $ | (29,555 | ) | |||||
5
Accumulated | ||||||||||||||||||||||||||||
Treasury | Distributions | Other | ||||||||||||||||||||||||||
Common | Additional | Shares | in Excess of | Comprehensive | Noncontrolling | |||||||||||||||||||||||
Stock | Paid-in Capital | At Cost | Earnings | Loss | Interest | Total | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Balance as of December 31, 2010 |
$ | 732 | $ | 1,608,014 | $ | (140,018 | ) | $ | (606,511 | ) | $ | (15,339 | ) | $ | 45,266 | $ | 892,144 | |||||||||||
Issuance of Common Stock, Net of
Issuance Costs |
174 | 202,216 | | | | | 202,390 | |||||||||||||||||||||
Stock Based Compensation Activity |
2 | 1,056 | | (333 | ) | | | 725 | ||||||||||||||||||||
Conversion of Units to Common Stock |
1 | 832 | | | | (833 | ) | | ||||||||||||||||||||
Reallocation Additional Paid in
Capital |
| (2,995 | ) | | | | 2,995 | | ||||||||||||||||||||
Preferred Dividends |
| | | (9,874 | ) | | | (9,874 | ) | |||||||||||||||||||
Comprehensive Loss: |
||||||||||||||||||||||||||||
Net Loss |
| | | (3,534 | ) | | (943 | ) | (4,477 | ) | ||||||||||||||||||
Reallocation Other Comprehensive
Loss |
| | | | (222 | ) | 222 | | ||||||||||||||||||||
Other Comprehensive Income |
| | | | 2,826 | 198 | 3,024 | |||||||||||||||||||||
Total Comprehensive Loss |
(1,453 | ) | ||||||||||||||||||||||||||
Balance as of June 30, 2011 |
$ | 909 | $ | 1,809,123 | $ | (140,018 | ) | $ | (620,252 | ) | $ | (12,735 | ) | $ | 46,905 | $ | 1,083,932 | |||||||||||
6
Six Months | Six Months | |||||||
Ended | Ended | |||||||
June 30, | June 30, | |||||||
2011 | 2010 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
Net Loss |
$ | (4,477 | ) | $ | (33,919 | ) | ||
Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities: |
||||||||
Depreciation |
43,953 | 53,724 | ||||||
Amortization of Deferred Financing Costs |
2,162 | 1,614 | ||||||
Other Amortization |
17,363 | 20,991 | ||||||
Impairment of Real Estate, Net |
(4,823 | ) | 9,155 | |||||
Provision for Bad Debt |
563 | 774 | ||||||
Mark-to-Market Loss on Interest Rate Protection Agreements |
188 | 1,458 | ||||||
Loss on Early Retirement of Debt |
4,259 | 3,965 | ||||||
Prepayment Premiums Associated with Early Retirement of Debt |
(1,268 | ) | | |||||
Equity in Income of Joint Ventures |
(135 | ) | (123 | ) | ||||
Distributions from Joint Ventures |
161 | 1,783 | ||||||
Gain on Sale of Real Estate |
(7,341 | ) | (8,691 | ) | ||||
Gain on Change in Control of Interests |
(689 | ) | | |||||
Decrease (Increase) in Tenant Accounts Receivable, Prepaid Expenses and Other Assets, Net |
866 | (1,175 | ) | |||||
Increase in Deferred Rent Receivable |
(4,341 | ) | (4,476 | ) | ||||
Decrease in Accounts Payable, Accrued Expenses, Other Liabilities, Rents Received in Advance
and Security Deposits |
(8,765 | ) | (7,367 | ) | ||||
Decrease (Increase) in Restricted Cash |
101 | (79 | ) | |||||
Repayments of Discount on Senior Unsecured Notes |
(27 | ) | (6,192 | ) | ||||
Net Cash Provided by Operating Activities |
37,750 | 31,442 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
Purchases of and Additions to Investment in Real Estate and Lease Costs |
(37,952 | ) | (47,962 | ) | ||||
Net Proceeds from Sales of Investments in Real Estate |
28,472 | 52,270 | ||||||
Contributions to and Investments in Joint Ventures |
(16 | ) | (414 | ) | ||||
Distributions from Joint Ventures |
108 | 4,484 | ||||||
Repayments of Notes Receivable |
10,049 | 976 | ||||||
Decrease (Increase) in Lender Escrows |
88 | (1,077 | ) | |||||
Net Cash Provided by Investing Activities |
749 | 8,277 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
Debt and Equity Issuance Costs |
(2,258 | ) | (954 | ) | ||||
Proceeds from the Issuance of Common Stock, Net of Underwriters Discount |
202,845 | 10,341 | ||||||
Repurchase and Retirement of Restricted Stock |
(1,001 | ) | (268 | ) | ||||
Preferred Stock Dividends |
(9,874 | ) | (9,939 | ) | ||||
Payments on Interest Rate Swap Agreement |
(292 | ) | (228 | ) | ||||
Costs Associated with Early Retirement of Debt |
| (1,008 | ) | |||||
Proceeds from Origination of Mortgage Loans Payable |
178,300 | 54,580 | ||||||
Repayments on Mortgage Loans Payable |
(64,198 | ) | (4,454 | ) | ||||
Repayments on Senior Unsecured Notes |
(56,419 | ) | (225,729 | ) | ||||
Proceeds from Unsecured Credit Facility |
101,500 | 51,500 | ||||||
Repayments on Unsecured Credit Facility |
(378,553 | ) | (10,341 | ) | ||||
Net Cash Used in Financing Activities |
(29,950 | ) | (136,500 | ) | ||||
Net Effect of Exchange Rate Changes on Cash and Cash Equivalents |
36 | 37 | ||||||
Net Increase (Decrease) in Cash and Cash Equivalents |
8,549 | (96,781 | ) | |||||
Cash and Cash Equivalents, Beginning of Period |
25,963 | 182,943 | ||||||
Cash and Cash Equivalents, End of Period |
$ | 34,548 | $ | 86,199 | ||||
7
8
Six Months | Six Months | |||||||
Ended | Ended | |||||||
June 30, | June 30, | |||||||
2011 | 2010 | |||||||
In-Place Leases |
$ | 2,511 | $ | 1,782 | ||||
Above Market Leases |
$ | 2,883 | $ | 239 | ||||
Tenant Relationships |
$ | 1,553 | $ | 1,881 |
Six Months | Six Months | |||||||
Ended | Ended | |||||||
June 30, | June 30, | |||||||
2011 | 2010 | |||||||
In-Place Leases |
56 | 100 | ||||||
Above Market Leases |
56 | 88 | ||||||
Tenant Relationships |
116 | 165 |
9
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Total Revenues |
$ | 11,040 | $ | 13,263 | $ | 23,095 | $ | 26,800 | ||||||||
Property Expenses |
(4,545 | ) | (5,384 | ) | (9,950 | ) | (11,819 | ) | ||||||||
Impairment of Real Estate, Net |
(1,108 | ) | | (2,937 | ) | | ||||||||||
Depreciation and Amortization |
(508 | ) | (6,525 | ) | (1,459 | ) | (12,603 | ) | ||||||||
Gain on Sale of Real Estate |
3,537 | 3,610 | 7,341 | 7,619 | ||||||||||||
Provision for Income Taxes |
(1,974 | ) | | (2,615 | ) | | ||||||||||
Income from Discontinued Operations |
$ | 6,442 | $ | 4,964 | $ | 13,475 | $ | 9,997 | ||||||||
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Operating Properties Held for Sale |
$ | (1,108 | ) | $ | | $ | (2,937 | ) | $ | | ||||||
Impairment Discontinued Operations |
$ | (1,108 | ) | $ | | $ | (2,937 | ) | $ | | ||||||
Land Parcels Held for Sale |
$ | 5,879 | $ | | $ | 5,879 | $ | | ||||||||
Operating Properties Held for Use |
| | 1,286 | (9,155 | ) | |||||||||||
Land Parcels Held for Use |
| | 595 | | ||||||||||||
Impairment Continuing Operations |
$ | 5,879 | $ | | $ | 7,760 | $ | (9,155 | ) | |||||||
Total Net Impairment |
$ | 4,771 | $ | | $ | 4,823 | $ | (9,155 | ) | |||||||
10
Fair Value Measurements on a Non-Recurring Basis Using: | ||||||||||||||||||||
Quoted Prices in | ||||||||||||||||||||
Six Months | Active Markets for | Significant Other | Unobservable | |||||||||||||||||
Ended | Identical Assets | Observable Inputs | Inputs | Total | ||||||||||||||||
Description | June 30, 2011 | (Level 1) | (Level 2) | (Level 3) | Impairment | |||||||||||||||
Long-lived Assets Held for Sale* |
$ | 116,049 | | | $ | 116,049 | $ | (6,041 | ) | |||||||||||
Long-lived Assets Held and Used* |
$ | 17,908 | | | $ | 17,908 | 357 | |||||||||||||
$ | (5,684 | ) |
Fair Value Measurements on a Non-Recurring Basis Using: | ||||||||||||||||||||
Quoted Prices in | ||||||||||||||||||||
Six Months | Active Markets for | Significant Other | Unobservable | |||||||||||||||||
Ended | Identical Assets | Observable Inputs | Inputs | Total | ||||||||||||||||
Description | June 30, 2010 | (Level 1) | (Level 2) | (Level 3) | Impairment | |||||||||||||||
Long-lived Assets Held and Used |
$ | 4,122 | | | $ | 4,122 | $ | (9,155 | ) |
* | Excludes industrial properties and land parcels for which an impairment reversal of $10,507 was recorded during the six months ended June 30, 2011 since the related assets are recorded at carrying value, which is lower than estimated fair value at June 30, 2011. |
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Contributions |
$ | 12 | $ | 189 | $ | 16 | $ | 414 | ||||||||
Distributions |
$ | 269 | $ | 5,042 | $ | 269 | $ | 6,267 | ||||||||
Fees |
$ | 277 | $ | 1,974 | $ | 587 | $ | 4,041 |
11
Effective | ||||||||||||||||
Outstanding | Interest | Interest | ||||||||||||||
Balance at | Rate at | Rate at | ||||||||||||||
June 30, | December 31, | June 30, | June 30, | |||||||||||||
2011 | 2010 | 2011 | 2011 | Maturity Date | ||||||||||||
Mortgage and Other Loans Payable, Net* |
$ | 625,532 | $ | 486,055 | 4.45% - 9.25% | 4.45% -9.25% | January 2012 - October 2020 |
|||||||||
Unamortized Premiums* |
(356 | ) | (358 | ) | ||||||||||||
Mortgage and Other Loans Payable, Gross |
$ | 625,176 | $ | 485,697 | ||||||||||||
Senior Unsecured Notes, Net |
||||||||||||||||
2016 Notes |
$ | 159,927 | $ | 159,899 | 5.750% | 5.91% | 01/15/16 | |||||||||
2017 Notes |
87,199 | 87,195 | 7.500% | 7.52% | 12/01/17 | |||||||||||
2027 Notes |
6,065 | 13,559 | 7.150% | 7.11% | 05/15/27 | |||||||||||
2028 Notes |
140,276 | 189,869 | 7.600% | 8.13% | 07/15/28 | |||||||||||
2012 Notes |
61,795 | 61,774 | 6.875% | 6.85% | 04/15/12 | |||||||||||
2032 Notes |
34,675 | 34,667 | 7.750% | 7.87% | 04/15/32 | |||||||||||
2014 Notes |
87,424 | 86,792 | 6.420% | 6.54% | 06/01/14 | |||||||||||
2011 Exchangeable Notes |
128,645 | 128,137 | 4.625% | 5.53% | 09/15/11 | |||||||||||
2017 II Notes |
117,653 | 117,637 | 5.950% | 6.37% | 05/15/17 | |||||||||||
Subtotal |
$ | 823,659 | $ | 879,529 | ||||||||||||
Unamortized Discounts |
5,720 | 6,980 | ||||||||||||||
Senior Unsecured Notes, Gross |
$ | 829,379 | $ | 886,509 | ||||||||||||
Unsecured Credit Facility |
$ | 100,000 | $ | 376,184 | 3.436% | 3.436% | 09/28/12 | |||||||||
* | Excludes $1,008 of Mortgage Loan Payable on Real Estate Held for Sale, inclusive of $48 of unamortized premium as of December 31, 2010. |
12
Principal Amount | ||||||||
Repurchased | Purchase Price | |||||||
2027 Notes |
$ | 7,500 | $ | 7,500 | ||||
2028 Notes |
49,630 | 48,946 | ||||||
$ | 57,130 | $ | 56,446 | |||||
Amount | ||||
Remainder of 2011 |
$ | 139,445 | ||
2012 |
175,420 | |||
2013 |
11,920 | |||
2014 |
155,901 | |||
2015 |
60,717 | |||
Thereafter |
1,011,152 | |||
Total |
$ | 1,554,555 | ||
June 30, 2011 | December 31, 2010 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | |||||||||||||
Mortgage and Other Loans Payable |
$ | 625,532 | $ | 669,822 | $ | 487,063 | $ | 548,696 | ||||||||
Senior Unsecured Notes |
823,659 | 835,847 | 879,529 | 851,771 | ||||||||||||
Unsecured Credit Facility |
100,000 | 100,306 | 376,184 | 376,184 | ||||||||||||
Total |
$ | 1,549,191 | $ | 1,605,975 | $ | 1,742,776 | $ | 1,776,651 | ||||||||
13
June 30, | June 30, | |||||||
2011 | 2010 | |||||||
Noncontrolling Interest, Beginning of Period |
$ | 45,266 | $ | 64,806 | ||||
Net Loss |
(943 | ) | (3,457 | ) | ||||
Other Comprehensive Income |
198 | 77 | ||||||
Comprehensive Loss |
(745 | ) | (3,380 | ) | ||||
Conversion of Units to Common Stock |
(833 | ) | (289 | ) | ||||
Reallocation Additional Paid In Capital |
2,995 | (792 | ) | |||||
Reallocation Other Comprehensive Income |
222 | 52 | ||||||
Noncontrolling Interest, End of Period |
$ | 46,905 | $ | 60,397 | ||||
14
Six Months Ended | ||||||||
June 30, 2011 | ||||||||
Dividend/ | ||||||||
Distribution | Total | |||||||
per Share | Dividend | |||||||
Series F Preferred Stock |
$ | 3,439.13 | $ | 1,719 | ||||
Series G Preferred Stock |
$ | 3,618.00 | $ | 905 | ||||
Series J Preferred Stock |
$ | 9,062.60 | $ | 5,438 | ||||
Series K Preferred Stock |
$ | 9,062.60 | $ | 1,812 |
Six Months | Six Months | |||||||
Ended | Ended | |||||||
June 30, 2011 | June 30, 2010 | |||||||
Supplemental schedule of non-cash investing and financing activities: |
||||||||
Distribution payable on preferred stock |
$ | 452 | $ | 452 | ||||
Exchange of Units for common stock: |
||||||||
Noncontrolling interest |
$ | (833 | ) | $ | (289 | ) | ||
Common stock |
1 | | ||||||
Additional paid-in-capital |
832 | 289 | ||||||
$ | | $ | | |||||
Write-off of fully depreciated assets |
$ | (23,443 | ) | $ | (26,482 | ) | ||
In conjunction with a property acquisition, the following mortgage loan was assumed: |
||||||||
Mortgage loan payable |
$ | (24,417 | ) | $ | | |||
In conjunction with certain property sales, we provided seller financing: |
||||||||
Mortgage notes receivable |
$ | 1,029 | $ | | ||||
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Numerator: |
||||||||||||||||
Loss from Continuing Operations, Net of Income Tax |
$ | (6,536 | ) | $ | (20,073 | ) | $ | (17,952 | ) | $ | (44,608 | ) | ||||
Noncontrolling Interest Allocable to Continuing Operations |
688 | 1,948 | 1,828 | 4,300 | ||||||||||||
Gain on Sale of Real Estate, Net of Income Tax |
| | | 692 | ||||||||||||
Noncontrolling Interest Allocable to Gain on Sale of Real Estate |
| | | (55 | ) | |||||||||||
Preferred Stock Dividends |
(4,947 | ) | (4,979 | ) | (9,874 | ) | (9,939 | ) | ||||||||
Loss from Continuing Operations Available to First Industrial
Realty Trust, Inc.s Common Stockholders |
$ | (10,795 | ) | $ | (23,104 | ) | $ | (25,998 | ) | $ | (49,610 | ) | ||||
Income from Discontinued Operations, Net of Income Tax |
$ | 6,442 | $ | 4,964 | $ | 13,475 | $ | 9,997 | ||||||||
Noncontrolling Interest Allocable to Discontinued Operations |
(398 | ) | (387 | ) | (885 | ) | (788 | ) | ||||||||
Income from Discontinued Operations Attributable to First
Industrial Realty Trust, Inc. |
$ | 6,044 | $ | 4,577 | $ | 12,590 | $ | 9,209 | ||||||||
Net Loss Available to First Industrial Realty Trust, Inc.s
Common Stockholders |
$ | (4,751 | ) | $ | (18,527 | ) | $ | (13,408 | ) | $ | (40,401 | ) | ||||
Denominator: |
||||||||||||||||
Weighted Average Shares Basic and Diluted |
79,726,916 | 62,838,431 | 75,207,863 | 62,320,434 | ||||||||||||
Basic and Diluted EPS: |
||||||||||||||||
Loss from Continuing Operations Available to First Industrial
Realty Trust, Inc.s Common Stockholders |
$ | (0.14 | ) | $ | (0.37 | ) | $ | (0.35 | ) | $ | (0.80 | ) | ||||
Income from Discontinued Operations Attributable to First
Industrial Realty Trust, Inc.s Common Stockholders |
$ | 0.08 | $ | 0.07 | $ | 0.17 | $ | 0.15 | ||||||||
Net Loss Available to First Industrial Realty Trust, Inc.s
Common Stockholders |
$ | (0.06 | ) | $ | (0.29 | ) | $ | (0.18 | ) | $ | (0.65 | ) | ||||
15
Allocation of | Allocation of | |||||||||||||||
Net Income | Net Income | |||||||||||||||
Available to | Available to | |||||||||||||||
Participating | Participating | |||||||||||||||
Securities For | Securities For | |||||||||||||||
Unvested Awards | the Three and | Unvested Awards | the Three and | |||||||||||||
Outstanding at | SixMonths Ended | Outstanding at | SixMonths Ended | |||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2011 | 2011 | 2010 | 2010 | |||||||||||||
Participating Securities: |
||||||||||||||||
Restricted Stock Awards |
694,708 | $ | | 723,295 | $ | |
Number of | Number of | |||||||
Awards | Awards | |||||||
Outstanding At | Outstanding At | |||||||
June 30, | June 30, | |||||||
2011 | 2010 | |||||||
Non-Participating Securities: |
||||||||
Restricted Stock Unit Awards |
923,700 | 1,190,800 | ||||||
Options |
31,901 | 119,700 |
16
Fair Value As of | Fair Value As of | |||||||||||||||||||
Notional | Trade | Maturity | June 30, | December 31, | ||||||||||||||||
Hedge Product | Amount | Strike | Date | Date | 2011 | 2010 | ||||||||||||||
Derivatives
not designated as
hedging
instruments: |
||||||||||||||||||||
Series F Agreement*. |
$ | 50,000 | 5.2175 | % | October 2008 | October 1, 2013 | $ | (523 | ) | $ | (523 | ) |
* | Fair value excludes quarterly settlement payment due on Series F Agreement. As of June 30, 2011 and December 31, 2010, the outstanding payable was $89 and $194, respectively. |
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||||||
Interest Rate Products | Location on Statement | 2011 | 2010 | 2011 | 2010 | |||||||||||||||
Loss Recognized in OCI (Effective Portion) |
Mark-to-Market on Interest Rate Protection Agreements (OCI) | $ | | $ | (20 | ) | $ | | $ | (587 | ) | |||||||||
Amortization Reclassified from OCI into Income |
Interest Expense | $ | (546 | ) | $ | (523 | ) | $ | (1,102 | ) | $ | (1,028 | ) |
17
Fair Value Measurements at | ||||||||||||||||
June 30, 2011 Using: | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
June 30, | Identical Assets | Observable Inputs | Inputs | |||||||||||||
Description | 2011 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Liabilities: |
||||||||||||||||
Series F Agreement |
$ | (523 | ) | | | $ | (523 | ) |
Fair Value Measurements at | ||||||||||||||||
December 31, 2010 Using: | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
December 31, | Identical Assets | Observable Inputs | Inputs | |||||||||||||
Description | 2010 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Liabilities: |
||||||||||||||||
Series F Agreement |
$ | (523 | ) | | | $ | (523 | ) |
Fair Value Measurements | ||||
Using Significant | ||||
Unobservable Inputs | ||||
(Level 3) | ||||
Derivatives | ||||
Beginning liability balance at December 31, 2010 |
$ | (523 | ) | |
Total unrealized gains: |
||||
Mark-to-Market of the Series F Agreement |
| |||
Ending liability balance at June 30, 2011 |
$ | (523 | ) | |
18
19
20
Six Months | Six Months | |||||||||||||||
Ended | Ended | |||||||||||||||
June 30, 2011 | June 30, 2010 | $ Change | % Change | |||||||||||||
($ in 000s) | ||||||||||||||||
REVENUES |
||||||||||||||||
Same Store Properties |
$ | 165,663 | $ | 167,623 | $ | (1,960 | ) | (1.2 | )% | |||||||
Acquired Properties |
1,238 | 127 | 1,111 | 874.8 | % | |||||||||||
Sold Properties |
991 | 3,009 | (2,018 | ) | (67.1 | )% | ||||||||||
(Re)Developments and Land, Not Included Above |
322 | 110 | 212 | 192.7 | % | |||||||||||
Other |
2,488 | 6,633 | (4,145 | ) | (62.5 | )% | ||||||||||
$ | 170,702 | $ | 177,502 | $ | (6,800 | ) | (3.8 | )% | ||||||||
Discontinued Operations |
(23,095 | ) | (26,800 | ) | 3,705 | (13.8 | )% | |||||||||
Subtotal Revenues |
$ | 147,607 | $ | 150,702 | $ | (3,095 | ) | (2.1 | )% | |||||||
Construction Revenues |
| 270 | (270 | ) | (100.0 | )% | ||||||||||
Total Revenues |
$ | 147,607 | $ | 150,972 | $ | (3,365 | ) | (2.2 | )% | |||||||
21
Six Months | Six Months | |||||||||||||||
Ended | Ended | |||||||||||||||
June 30, 2011 | June 30, 2010 | $ Change | % Change | |||||||||||||
($ in 000s) | ||||||||||||||||
PROPERTY AND CONSTRUCTION EXPENSES |
||||||||||||||||
Same Store Properties |
$ | 53,366 | $ | 52,880 | $ | 486 | 0.9 | % | ||||||||
Acquired Properties |
240 | 21 | 219 | 1,042.9 | % | |||||||||||
Sold Properties |
328 | 1,308 | (980 | ) | (74.9 | )% | ||||||||||
(Re)Developments and Land, Not Included Above |
580 | 675 | (95 | ) | (14.1 | )% | ||||||||||
Other |
5,342 | 7,016 | (1,674 | ) | (23.9 | )% | ||||||||||
$ | 59,856 | $ | 61,900 | $ | (2,044 | ) | (3.3 | )% | ||||||||
Discontinued Operations |
(9,950 | ) | (11,819 | ) | 1,869 | (15.8 | )% | |||||||||
Total Property Expenses |
$ | 49,906 | $ | 50,081 | $ | (175 | ) | (0.3 | )% | |||||||
Construction Expenses |
| 209 | (209 | ) | (100.0 | )% | ||||||||||
Total Property and Construction Expenses |
$ | 49,906 | $ | 50,290 | $ | (384 | ) | (0.8 | )% | |||||||
22
Six Months | Six Months | |||||||||||||||
Ended | Ended | |||||||||||||||
June 30, 2011 | June 30, 2010 | $ Change | % Change | |||||||||||||
($ in 000s) | ||||||||||||||||
DEPRECIATION AND OTHER AMORTIZATION |
||||||||||||||||
Same Store Properties |
$ | 55,497 | $ | 67,656 | $ | (12,159 | ) | (18.0 | )% | |||||||
Acquired Properties |
792 | 105 | 687 | 654.3 | % | |||||||||||
Sold Properties |
31 | 1,324 | (1,293 | ) | (97.7 | )% | ||||||||||
(Re)Developments and Land, Not Included Above and Other |
229 | 134 | 95 | 70.9 | % | |||||||||||
Corporate Furniture, Fixtures and Equipment |
757 | 1,027 | (270 | ) | (26.3 | )% | ||||||||||
$ | 57,306 | $ | 70,246 | $ | (12,940 | ) | (18.4 | )% | ||||||||
Discontinued Operations |
(1,459 | ) | (12,603 | ) | 11,144 | (88.4 | )% | |||||||||
Total Depreciation and Other Amortization |
$ | 55,847 | $ | 57,643 | $ | (1,796 | ) | (3.1 | )% | |||||||
23
Six Months | Six Months | |||||||
Ended | Ended | |||||||
June 30, 2011 | June 30, 2010 | |||||||
($ in 000s) | ||||||||
Total Revenues |
$ | 23,095 | $ | 26,800 | ||||
Property Expenses |
(9,950 | ) | (11,819 | ) | ||||
Impairment of Real Estate, Net |
(2,937 | ) | | |||||
Depreciation and Amortization |
(1,459 | ) | (12,603 | ) | ||||
Gain on Sale of Real Estate |
7,341 | 7,619 | ||||||
Provision for Income Taxes |
(2,615 | ) | | |||||
Income from Discontinued Operations |
$ | 13,475 | $ | 9,997 | ||||
24
Three Months | Three Months | |||||||||||||||
Ended | Ended | |||||||||||||||
June 30, 2011 | June 30, 2010 | $ Change | % Change | |||||||||||||
($ in 000s) | ||||||||||||||||
REVENUES |
||||||||||||||||
Same Store Properties |
$ | 82,233 | $ | 83,032 | $ | (799 | ) | (1.0 | )% | |||||||
Acquired Properties |
726 | 127 | 599 | 471.7 | % | |||||||||||
Sold Properties |
168 | 1,249 | (1,081 | ) | (86.5 | )% | ||||||||||
(Re)Developments and Land, Not Included Above |
181 | 24 | 157 | 654.2 | % | |||||||||||
Other |
1,055 | 3,209 | (2,154 | ) | (67.1 | )% | ||||||||||
$ | 84,363 | $ | 87,641 | $ | (3,278 | ) | (3.7 | )% | ||||||||
Discontinued Operations |
(11,040 | ) | (13,263 | ) | 2,223 | (16.8 | )% | |||||||||
Total Revenues |
$ | 73,323 | $ | 74,378 | $ | (1,055 | ) | (1.4 | )% | |||||||
Three Months | Three Months | |||||||||||||||
Ended | Ended | |||||||||||||||
June 30, 2011 | June 30, 2010 | $ Change | % Change | |||||||||||||
($ in 000s) | ||||||||||||||||
PROPERTY AND CONSTRUCTION EXPENSES |
||||||||||||||||
Same Store Properties |
$ | 24,933 | $ | 24,491 | $ | 442 | 1.8 | % | ||||||||
Acquired Properties |
143 | 21 | 122 | 581.0 | % | |||||||||||
Sold Properties |
116 | 554 | (438 | ) | (79.1 | )% | ||||||||||
(Re)Developments and Land, Not Included Above |
235 | 331 | (96 | ) | (29.0 | )% | ||||||||||
Other |
2,984 | 3,706 | (722 | ) | (19.5 | )% | ||||||||||
$ | 28,411 | $ | 29,103 | $ | (692 | ) | (2.4 | )% | ||||||||
Discontinued Operations |
(4,545 | ) | (5,384 | ) | 839 | (15.6 | )% | |||||||||
Total Property Expenses |
$ | 23,866 | $ | 23,719 | $ | 147 | 0.6 | % | ||||||||
25
Three Months | Three Months | |||||||||||||||
Ended | Ended | |||||||||||||||
June 30, 2011 | June 30, 2010 | $ Change | % Change | |||||||||||||
($ in 000s) | ||||||||||||||||
DEPRECIATION AND OTHER AMORTIZATION |
||||||||||||||||
Same Store Properties |
$ | 27,862 | $ | 34,468 | $ | (6,606 | ) | (19.2 | )% | |||||||
Acquired Properties |
548 | 105 | 443 | 421.9 | % | |||||||||||
Sold Properties |
| 622 | (622 | ) | (100.0 | )% | ||||||||||
(Re)Developments and Land, Not Included Above and Other |
124 | 34 | 90 | 264.7 | % | |||||||||||
Corporate Furniture, Fixtures and Equipment |
352 | 521 | (169 | ) | (32.4 | )% | ||||||||||
$ | 28,886 | $ | 35,750 | $ | (6,864 | ) | (19.2 | )% | ||||||||
Discontinued Operations |
(508 | ) | (6,525 | ) | 6,017 | (92.2 | )% | |||||||||
Total Depreciation and Other Amortization |
$ | 28,378 | $ | 29,225 | $ | (847 | ) | (2.9 | )% | |||||||
26
Three Months | Three Months | |||||||
Ended | Ended | |||||||
June 30, 2011 | June 30, 2010 | |||||||
($ in 000s) | ||||||||
Total Revenues |
$ | 11,040 | $ | 13,263 | ||||
Property Expenses |
(4,545 | ) | (5,384 | ) | ||||
Impairment of Real Estate, Net |
(1,108 | ) | | |||||
Depreciation and Amortization |
(508 | ) | (6,525 | ) | ||||
Gain on Sale of Real Estate |
3,537 | 3,610 | ||||||
Provision for Income Taxes |
(1,974 | ) | | |||||
Income from Discontinued Operations |
$ | 6,442 | $ | 4,964 | ||||
27
28
29
30
31
Exhibit | ||
Number | Description | |
3.1
|
Articles of Amendment of First Industrial Realty Trust, Inc., dated May 12, 2011 (incorporated by reference to Exhibit 3.1 of the Form 8-K of the Company filed June 2, 2011, File No. 1-13102). | |
10.1
|
Waiver, dated as of April 21, 2011, among First Industrial, L.P., First Industrial Realty Trust, Inc., JPMorgan Chase Bank, N.A. and the other Lenders party thereto (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed April 22, 2011, File No. 1-13102). | |
10.2
|
First Industrial Realty Trust, Inc. 2011 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed June 2, 2011, File No. 1-13102). | |
10.3
|
Amendment No. 1 to 2011 Stock Incentive Plan, dated April 28, 2011 (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed April 28, 2011, File No. 1-13102). | |
10.4
|
Form of Service-Based Bonus Agreement (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed July 13, 2011, 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. | |
101.1*
|
The following financial statements from First Industrial Realty Trust, Inc.s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, filed on August 5, 2011, formatted in XBRL: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Comprehensive Income (unaudited), (iv) Consolidated Statement of Changes in Stockholders Equity (unaudited), (v) Consolidated Statements of Cash Flows (unaudited) and (vi) Notes to Consolidated Financial Statements (unaudited). |
* | Filed herewith | |
** | Furnished herewith |
32
FIRST INDUSTRIAL REALTY TRUST, INC. |
||||
By: | /s/ Scott A. Musil | |||
Scott A. Musil | ||||
Chief Financial Officer (Principal Financial Officer) |
||||
33
Exhibit | ||
Number | Description | |
3.1
|
Articles of Amendment of First Industrial Realty Trust, Inc., dated May 12, 2011 (incorporated by reference to Exhibit 3.1 of the Form 8-K of the Company filed June 2, 2011, File No. 1-13102). | |
10.1
|
Waiver, dated as of April 21, 2011, among First Industrial, L.P., First Industrial Realty Trust, Inc., JPMorgan Chase Bank, N.A. and the other Lenders party thereto (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed April 22, 2011, File No. 1-13102). | |
10.2
|
First Industrial Realty Trust, Inc. 2011 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed June 2, 2011, File No. 1-13102). | |
10.3
|
Amendment No. 1 to 2011 Stock Incentive Plan, dated April 28, 2011 (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed April 28, 2011, File No. 1-13102). | |
10.4
|
Form of Service-Based Bonus Agreement (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed July 13, 2011, 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. | |
101.1*
|
The following financial statements from First Industrial Realty Trust, Inc.s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, filed on August 5, 2011, formatted in XBRL: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Comprehensive Income (unaudited), (iv) Consolidated Statement of Changes in Stockholders Equity (unaudited), (v) Consolidated Statements of Cash Flows (unaudited) and (vi) Notes to Consolidated Financial Statements (unaudited). |
* | Filed herewith | |
** | Furnished herewith |
34
/s/ Bruce W. Duncan | ||||
Bruce W. Duncan | ||||
President and Chief Executive Officer | ||||
35
/s/ Scott A. Musil | ||||
Scott A. Musil | ||||
Chief Financial Officer | ||||
/s/ Bruce W. Duncan | ||||
Bruce W. Duncan | ||||
President and Chief Executive Officer (Principal Executive Officer) |
||||
/s/ Scott A. Musil | ||||
Scott A. Musil | ||||
Chief Financial Officer (Principal Financial Officer) |
||||
Document and Entity Information (USD $)
In Millions, except Share data |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
Aug. 03, 2011
|
Jun. 30, 2010
|
|
Document and Entity Information [Abstract] | Â | Â | Â |
Entity Registrant Name | FIRST INDUSTRIAL REALTY TRUST INC | Â | Â |
Entity Central Index Key | 0000921825 | Â | Â |
Document Type | 10-Q | Â | Â |
Document Period End Date | Jun. 30, 2011 | ||
Amendment Flag | false | Â | Â |
Document Fiscal Year Focus | 2011 | Â | Â |
Document Fiscal Period Focus | Q2 | Â | Â |
Current Fiscal Year End Date | --12-31 | Â | Â |
Entity Well-known Seasoned Issuer | No | Â | Â |
Entity Voluntary Filers | No | Â | Â |
Entity Current Reporting Status | Yes | Â | Â |
Entity Filer Category | Accelerated Filer | Â | Â |
Entity Public Float | Â | Â | $ 306.3 |
Entity Common Stock, Shares Outstanding | Â | 86,616,736 | Â |
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'+ "\n"+' | '+ "\n"+' '+ "\n"+'
'+ "\n"+' | '+ "\n"+' '+ "\n"+'
Investment in Real Estate
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Investment in Real Estate [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Real Estate |
3. Investment in Real Estate
Acquisition
During the six months ended June 30, 2011, we acquired one industrial property comprising
approximately 0.7 million square feet of GLA in connection with the purchase of the 85% equity
interest in one property from the institutional investor in the 2003 Net Lease Joint Venture (see
Note 4). The gross agreed-upon fair value for the real estate was $30,625, excluding costs
incurred in conjunction with the acquisition of the industrial property. The acquisition was
funded through the assumption of a mortgage loan, whose carrying value approximated fair market
value, in the amount of $24,417 and a cash payment of $5,277 (85% of the net fair value of the
acquisition). We accounted for this transaction as a step acquisition utilizing the purchase method
of accounting. Due to the change in control that occurred, we recorded a gain of approximately
$689 related to the difference between our carrying value and fair value of our previously held
equity interest on the acquisition date.
During the six months ended June 30, 2010, we acquired three industrial properties comprising
approximately 0.5 million square feet of GLA, including one industrial property purchased from the
2005 Development/Repositioning Joint Venture. The purchase price of these acquisitions totaled
approximately $22,408, excluding costs incurred in conjunction with the acquisition of the
industrial properties.
Intangible Assets Subject to Amortization in the Period of Acquisition
The fair value at the date of acquisition of in-place leases, above market leases and tenant relationships recorded due
to real estate properties acquired during the six months ended June 30, 2011 and June 30, 2010 and
included in deferred leasing intangibles is as follows:
The weighted average life in months of in-place leases, above market leases and tenant
relationships recorded as a result of the real estate properties acquired during the six months
ended June 30, 2011 and June 30, 2010 is as follows:
Sales and Discontinued Operations
During the six months ended June 30, 2011, we sold 17 industrial properties comprising
approximately 1.1 million square feet of GLA. Gross proceeds from the sales of the 17 industrial
properties were approximately $31,045. The gain on sale of real estate was approximately $7,341,
all of which is shown in discontinued operations. The 17 industrial properties sold meet the
criteria to be included in discontinued operations. Therefore the results of operations and gain on
sale of real estate for the 17 sold industrial properties are included in discontinued operations.
At June 30, 2011, we had 158 industrial properties comprising approximately 12.3 million
square feet of GLA and several land parcels held for sale. The results of operations of the 158
industrial properties held for sale at June 30, 2011 are included in discontinued operations. There
can be no assurance that such industrial properties or land parcels held for sale will be sold.
Income from discontinued operations for the six months ended June 30, 2010 reflects the
results of operations of the 17 industrial properties that were sold during the six months ended
June 30, 2011, the results of operations of 13 industrial properties and one land parcel that
received ground rental revenues that were sold during the year ended December 31, 2010, the results
of operations of the 158 industrial properties identified as held for sale at June 30, 2011 and the
gain on sale of real estate relating to five industrial properties and one land parcel that
received ground rental revenues that were sold during the six months ended June 30, 2010.
The following table discloses certain information regarding the industrial properties included
in discontinued operations for the three and six months ended June 30, 2011 and June 30, 2010:
At June 30, 2011 and December 31, 2010, we had notes receivables outstanding of approximately
$49,815 and $58,803, net of a discount of $351 and $383, respectively, which are included as a
component of Prepaid Expenses and Other Assets, Net. At June 30, 2011 and December 31, 2010, the
fair values of the notes receivables were $52,277 and $60,944, respectively. The fair values of our
notes receivables were determined by discounting the future cash flows using current rates at which
similar loans with similar remaining maturities would be made to other borrowers.
Impairment Charges
On October 22, 2010, we amended our unsecured revolving credit facility (as amended, the
“Unsecured Credit Facility”). In conjunction with the amendment, management identified a pool of
real estate assets (the “Non-Strategic Assets”) that it intends to market and sell. At June 30,
2011, the Non-Strategic Assets consisted of 179 industrial properties comprising approximately 15.4
million square feet of GLA and land parcels comprising approximately 600 acres. The Non-Strategic
Assets (except 21 industrial properties comprising approximately 3.1 million square feet of GLA)
were classified as held for sale as of June 30, 2011.
The net impairment charges for assets that qualify to be classified as held for sale at June
30, 2011 were calculated as the difference of the carrying value of the properties and land parcels
over the fair value less costs to sell. The net impairment charges are due to updated fair market
values for certain of the Non-Strategic Assets whose estimated fair market values have changed
since December 31, 2010. On the date an asset no longer qualifies to be classified as held for
sale, the carrying value must be reestablished at the lower of the estimated fair market value of
the asset or the carrying value of the asset prior to held for sale classification, adjusted for
any depreciation and amortization that would have been recorded if the asset had not been
classified as held for sale. Impairment has been reversed and/or catch-up depreciation and
amortization has been recorded during the six months ended June 30, 2011, if applicable, for these
assets that are no longer classified as held for sale. During the six months ended June 30, 2010,
we recorded an impairment charge in the amount of $9,155 related to a property comprised of 0.3
million square feet of GLA located in Grand Rapids, Michigan (“Grand Rapids Property”) in
connection with the negotiation of a new lease. The non-cash impairment charge related to the Grand
Rapids Property was based upon the difference between the fair value of the property and its
carrying value. The fair market values were determined using widely accepted valuation techniques
including discounted cash flow analyses on expected cash flows, internal valuations of real estate
and third party offers.
During the three and six months ended June 30, 2011 and June 30, 2010, we recorded the
following net non-cash impairment charges:
The guidance for the fair value measurement provisions for the impairment of long lived assets
recorded at fair value 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 for identical assets; 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.
The following tables present information about our assets that were measured at fair value on
a non-recurring basis during the six months ended June 30, 2011 and June 30, 2010. The tables
indicate the fair value hierarchy of the valuation techniques we utilized to determine fair value.
|
Earnings Per Share (EPS)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Earnings Per Share (EPS) [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share (EPS) |
8. Earnings Per Share (“EPS”)
The computation of basic and diluted EPS is presented below:
Participating securities include unvested restricted stock awards outstanding that participate
in non-forfeitable dividends of the Company.
Participating security holders are not obligated to share in losses. Therefore, none of the
loss was allocated to participating securities for the three and six months ended June 30, 2011 and
June 30, 2010.
The number of weighted average shares — diluted is the same as the number of weighted average
shares — basic for the three and six months ended June 30, 2011 and June 30, 2010, as the effect
of stock options and restricted stock unit awards (that do not participate in non-forfeitable
dividends of the Company) was excluded as its inclusion would have been antidilutive to the loss
from continuing operations available to First Industrial Realty Trust, Inc.’s common stockholders.
The following awards were anti-dilutive and could be dilutive in future periods:
The 2011 Exchangeable Notes are convertible into shares of common stock of the Company at a
price of $50.93 and were not included in the computation of diluted EPS as our average stock price
did not exceed the strike price of the conversion feature.
|
Consolidated Statement of Changes in Stockholders' Equity (USD $)
In Thousands |
Total
|
Common Stock
|
Additional Paid-in Capital
|
Treasury Shares At Cost
|
Distributions in Excess of Earnings
|
Accumulated Other Comprehensive Loss
|
Noncontrolling Interest
|
---|---|---|---|---|---|---|---|
Balance at Dec. 31, 2010 | $ 892,144 | $ 732 | $ 1,608,014 | $ (140,018) | $ (606,511) | $ (15,339) | $ 45,266 |
Issuance of Common Stock, Net of Issuance Costs | 202,390 | 174 | 202,216 | Â | Â | Â | Â |
Stock Based Compensation Activity | 725 | 2 | 1,056 | Â | (333) | Â | Â |
Conversion of Units to Common Stock | Â | 1 | 832 | Â | 0 | Â | (833) |
Reallocation - Additional Paid in Capital | Â | Â | (2,995) | Â | 0 | Â | 2,995 |
Preferred Dividends | Â | Â | Â | Â | (9,874) | Â | Â |
Other Comprehensive Loss: | Â | Â | Â | Â | Â | Â | Â |
Net Loss | (4,477) | Â | Â | Â | (3,534) | Â | (943) |
Reallocation other comprehensive income loss | Â | Â | Â | Â | Â | (222) | 222 |
Other Comprehensive Income | 3,024 | Â | Â | Â | Â | 2,826 | 198 |
Total Other Comprehensive Loss | (708) | Â | Â | Â | Â | Â | Â |
Balance at Jun. 30, 2011 | $ 1,083,932 | $ 909 | $ 1,809,123 | $ (140,018) | $ (620,252) | $ (12,735) | $ 46,905 |
Indebtedness
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Jun. 30, 2011
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Indebtedness [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indebtedness |
5. Indebtedness
The following table discloses certain information regarding our indebtedness:
On February 10, 2011, we paid off and retired prior to maturity our secured mortgage loan
originally maturing in September 2012 in the amount of $14,520. On March 9, 2011, we paid off and
retired prior to maturity our secured mortgage loan originally maturing in December 2014 in the
amount of $18,662. On April 1, 2011, we paid off and retired prior to maturity our secured mortgage
loan originally maturing in October 2014 in the amount of $27,389. In connection with the early
payoffs, for the three and six months ended June 30, 2011, we recorded a loss on early retirement
of debt of $1,104 and $2,130, respectively, related to prepayment premiums and the write-off of
unamortized loan fees.
On May 2, 2011, we obtained eight secured mortgage loans aggregating $178,300. The mortgage
loans are cross-collateralized by 32 industrial properties totaling approximately 5.9 million
square feet of GLA. The mortgage loans bear interest at a fixed rate of 4.45%, principal payments are amortized over
30 years and the loans mature in June 2018. Prepayments are prohibited for twelve months after loan
origination, after which prepayment premiums are calculated at the greater of yield maintenance or
1% of the outstanding loan balance.
On May 26, 2011, we assumed a secured mortgage loan in the amount of $24,417 in conjunction
with the acquisition of an industrial property from the 2003 Net Lease Joint Venture. The mortgage
loan is collateralized by one industrial property totaling approximately 0.7 million square feet of
GLA. The mortgage loan bears interest at a fixed rate of 5.579%, principal payments are amortized over 30 years and the loan
matures in February 2016.
Included in Mortgage and Other Loans Payable is a $5,040 loan payable related to a
non-recourse mortgage loan that matured on March 1, 2011. We are currently working with the lender
to transfer title of the industrial building that serves as collateral in satisfaction of the loan.
However, there can be no assurance that we will be successful in these efforts.
As of June 30, 2011, Mortgage and Other Loans Payable are collateralized by, and in some
instances cross-collateralized by, industrial properties with a net carrying value of $823,927 and
one letter of credit in the amount of $889.
During the three months ended June 30, 2011, we repurchased and retired the following senior
unsecured notes prior to maturity:
In connection with these repurchases prior to maturity, we recognized $2,129 as loss on early
retirement of debt for the three months ended June 30, 2011, which is the difference between the
repurchase price of $56,446 and the principal amount retired of $57,130, net of the pro rata write
off of the unamortized debt issue discount, the unamortized loan fees and the unamortized
settlement amount of the interest rate protection agreements related to the repurchases of $39,
$426 and $2,348, respectively.
During June 2011, we made a permanent repayment of $100,000 on the term loan of our Unsecured
Credit Facility.
The following is a schedule of the stated maturities and scheduled principal payments as of
June 30, 2011 of our indebtedness, exclusive of premiums and discounts, for the next five years
ending December 31, and thereafter:
The Unsecured Credit Facility 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 total indebtedness and 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 noteholders or 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. We believe that we were in compliance with these
financial covenants as of June 30, 2011, and we anticipate that we will be able to operate in
compliance with these financial covenants throughout 2011. 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 Credit Facility, 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.
Fair Value
At June 30, 2011 and December 31, 2010, the fair values of our indebtedness were as follows:
The fair values of our mortgage and other loans payable were determined by discounting the
future cash flows using the current rates at which similar loans would be made based upon similar leverage levels and similar remaining maturities. The fair value of the senior
unsecured notes was determined by quoted market prices for the same or similar issuances. The fair
value of the Unsecured Credit Facility was determined by discounting the future cash flows using
current rates at which similar loans would be made to borrowers with similar credit ratings and for
the same remaining term, assuming no repayment until maturity.
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Derivatives
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Jun. 30, 2011
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Derivatives [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives |
10. Derivatives
Our objectives in using interest rate derivatives are to add stability to interest expense and
to manage our cash flow volatility and 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.
Our Series F Preferred Stock is subject to a coupon rate reset. The coupon rate resets every
quarter 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. For the second quarter of 2011 the new coupon rate was 6.885%.
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 of our Series F Preferred Stock (the “Series F Agreement”). The Series F Agreement
fixes the 30-year U.S. Treasury rate at 5.2175%. Accounting guidance for derivatives 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. For the
three and six months ended June 30, 2011, $232 and $188, respectively, in unrealized loss, is
recognized as Mark-to-Market Loss on Interest Rate Protection Agreements. Quarterly payments or
receipts are treated as a component of the mark to market gains or losses and for the three and six
months ended June 30, 2011, totaled $89 and $188, respectively. For the three and six months ended
June 30, 2010, $1,324 and $1,458, respectively, in unrealized loss, is recognized as Mark-to-Market
Loss on Interest Rate Protection Agreements. Quarterly payments or receipts are treated as a
component of the mark to market gains or losses and for the three and six months ended June 30,
2010, totaled $59 and $135, respectively.
The effective portion of changes in the fair value of derivatives designated and that qualify
as cash flow hedges is recorded in Other Comprehensive Income (“OCI”) and is subsequently
reclassified to earnings through interest expense over the life of the derivative or over the life
of the debt. In the next 12 months, we will amortize approximately $2,224 into net income by
increasing interest expense for interest rate protection agreements we settled in previous periods.
The following is a summary of the terms of our derivatives and their fair values, which are
included in Accounts Payable, Accrued Expenses and Other Liabilities, Net on the accompanying
consolidated balance sheets:
The following is a summary of the impact of the derivatives in cash flow hedging relationships
on the statement of operations and the statement of OCI for the three and six months ended June 30,
2011 and June 30, 2010:
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.
The guidance for fair value measurement of financial instruments includes 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.
The following table sets forth our financial liabilities that are accounted for at fair value
on a recurring basis as of June 30, 2011 and December 31, 2010:
The valuation of the Series F Agreement is determined using widely accepted valuation
techniques including discounted cash flow analysis on the expected cash flows of the instrument.
This analysis reflects the contractual terms of the agreements including the period to maturity. 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 fair value measurement, we incorporated a credit
valuation adjustment (“CVA”) to appropriately reflect both our own nonperformance risk and the
respective counterparty’s 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 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
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 June
30, 2011:
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Stockholders Equity
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Jun. 30, 2011
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Stockholders' Equity [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity |
6. Stockholders’ Equity
Shares of Common Stock and Noncontrolling Interest:
On May 12, 2011, we filed an amendment to the Company’s articles of incorporation, increasing
the number of shares of the Company’s common stock authorized for issuance from 100 million to 150
million shares.
On May 31, 2011, we announced an underwritten public offering of 8,400,000 shares of the Company’s
common stock at a price of $12.15 per share to the public. Gross offering proceeds
upon settlement on June 6, 2011 were $102,060 in the aggregate. Proceeds to us, net of underwriter’s discount of $1,176
and total expenses of $138, were approximately $100,746.
On March 3, 2011, we announced an underwritten public offering of 8,900,000 shares of the Company’s
common stock at a price of $11.40 per share to the public. Gross offering proceeds upon settlement on March 4, 2011 were $101,460 in the aggregate. Proceeds to us, net of underwriter’s discount of $890 and
total expenses of $166, were approximately $100,404.
On February 28, 2011, we entered into distribution agreements with sales agents to sell up to
10,000,000 shares of the Company’s common stock, for up to $100,000 aggregate gross sale proceeds,
from time to time in “at-the-market” offerings (the “ATM”). During the three months ended June 30,
2011, we issued 115,856 shares of the Company’s common stock under the ATM for approximately
$1,391, net of $28 paid to the sales agent. Under the terms of the ATM, sales are to be made
primarily in transactions that are deemed to be “at-the-market” offerings, including sales made
directly on the New York Stock Exchange or sales made through a market maker other than on an
exchange or by privately negotiated transactions.
During the six months ended June 30, 2011, 94,791 limited partnership interests in the
Operating Partnership (“Units”) were converted into an equivalent number of shares of common stock,
resulting in a reclassification of $833 of Noncontrolling Interest to First Industrial Realty Trust
Inc.’s Stockholders’ Equity.
The following table summarizes the changes in Noncontrolling Interest for the six months ended
June 30, 2011 and June 30, 2010:
Restricted Stock:
During the six months ended June 30, 2011 and June 30, 2010, we awarded 292,339 and 573,198
shares, respectively, of restricted common stock to certain employees. The restricted common stock
had a fair value of approximately $3,248 and $3,336, respectively, on the date of approval by the
Compensation Committee of the Board of Directors. The restricted common stock vests over a three
year period. Compensation expense will be charged to earnings over the vesting period for the
shares expected to vest.
We recognized $1,081 and $1,778 for the three months ended June 30, 2011 and June 30, 2010,
respectively, and $1,726 and $3,277 for the six months ended June 30, 2011 and June 30, 2010,
respectively, in compensation expense related to restricted stock/unit awards. At June 30, 2011, we
have $7,309 in unrecognized compensation related to unvested restricted stock/unit awards. The
weighted average period that the unrecognized compensation is expected to be recognized is 1.00
year.
Dividend/Distributions:
The coupon rate of our Series F Preferred Stock resets every quarter 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. For the second quarter of 2011, the new coupon rate was 6.885%. See Note 10 for additional
derivative information related to the Series F Preferred Stock coupon rate reset.
The following table summarizes dividends/distributions accrued during the six months ended
June 30, 2011:
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Investments in Joint Ventures
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Jun. 30, 2011
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Investments in Joint Ventures |
4. Investments in Joint Ventures
On May 26, 2011, we acquired the 85% equity interest in one property from the institutional
investor in the 2003 Net Lease Joint Venture (See Note 3).
At June 30, 2011, the 2003 Net Lease Joint Venture owned eight industrial properties
comprising approximately 4.2 million square feet of GLA. The 2003 Net Lease Joint Venture is
considered a variable interest entity in accordance with the Financial Accounting Standards Board’s
(the “FASB”) guidance on the consolidation of variable interest entities. However, we continue to
conclude that we are not the primary beneficiary of this venture. As of June 30, 2011, our
investment in the 2003 Net Lease Joint Venture is $2,101. Our maximum exposure to loss is equal to
our investment plus any future contributions we make to the venture. We continue to hold our 10%
equity interest in the 2007 Europe Joint Venture. As of June 30, 2011, the 2007 Europe Joint
Venture did not own any properties.
At June 30, 2011 and December 31, 2010, we have receivables from the Joint Ventures (and/or
our former Joint Venture partners) in the aggregate amount of $1,422 and $2,857, respectively.
These receivable amounts are included in Prepaid Expenses and Other Assets, Net. During the three
and six months ended June 30, 2011 and June 30, 2010, we invested the following amounts in, as well
as received distributions from, our Joint Ventures and recognized fees from our Joint Ventures
(and/or our former Joint Venture partners) in the following amounts:
|
Organization and Formation of Company
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Organization and Formation of Company [Abstract] | Â |
Organization and Formation of Company |
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 “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.”
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 94.3% ownership
interest at June 30, 2011, and through our taxable REIT subsidiaries. We also conduct operations
through other partnerships and limited liability companies, the operating data of which, together
with that of the Operating Partnership and the taxable REIT subsidiaries, is consolidated with that
of the Company as presented herein. Noncontrolling interest at June 30, 2011 of approximately 5.7%
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, two joint
ventures (the “2003 Net Lease Joint Venture” and the “2007 Europe Joint Venture”). During 2010, we
provided various services to, and ultimately disposed of our equity interests in, five joint
ventures (the “2005 Development/Repositioning Joint Venture,” the “2005 Core Joint Venture,” the
“2006 Net Lease Co-Investment Program,” the “2006 Land/Development Joint Venture,” and the “2007
Canada Joint Venture;” together with the 2003 Net Lease Joint Venture and the 2007 Europe Joint
Venture, the “Joint Ventures”). The Joint Ventures are accounted for under the equity method of
accounting. Accordingly, the operating data of our Joint Ventures is not consolidated with that of
the Company as presented herein. The 2007 Europe Joint Venture does not own any properties. See
Note 4 for more information on the Joint Ventures.
As of June 30, 2011, we owned 759 industrial properties located in 27 states in the United
States and one province in Canada, containing an aggregate of approximately 68.2 million square
feet of gross leasable area (“GLA”).
|
Restructuring Costs
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Restructuring Costs [Abstract] | Â |
Restructuring Costs |
9. Restructuring Costs
We committed to a plan to reduce organizational and overhead costs in October 2008 and have
subsequently modified that plan with the goal of further reducing these costs. For the three and
six months ended June 30, 2011, we recorded as restructuring costs a pre-tax charge of $393 and
$1,553, respectively, to provide for costs associated with the termination of a certain office
lease ($156 and $1,200, respectively) and other costs ($237 and $353, respectively) associated with
implementing the restructuring plan. For the three and six months ended June 30, 2010, we recorded
as restructuring costs a pre-tax charge of $947 and $1,211, respectively, to provide for employee
severance and benefits ($808 and $808, respectively), cost associated with the termination of
certain office leases ($8 and $83, respectively) and other costs ($131 and $320, respectively)
associated with implementing the restructuring plan. Included in employee severance costs is $189
for the three and six months ended June 30, 2010 of non-cash costs which represents the accelerated
recognition of restricted stock expense for certain employees.
At June 30, 2011 and December 31, 2010, we have $2,588 and $1,574, respectively, included in
Accounts Payable, Accrued Expenses and Other Liabilities, Net primarily related to remaining
payments under certain lease obligations.
|
Summary of Significant Accounting Policies
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Summary of Significant Accounting Policies [Abstract] | Â |
Summary of Significant Accounting Policies |
2. 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, 2010 (“2010 Form 10-K”) and should be
read in conjunction with such financial statements and related notes. The 2010 year end
consolidated balance sheet data included in this Form 10-Q filing was derived from the audited
financial statements in our 2010 Form 10-K, but does not include all disclosures required by
accounting principles generally accepted in the United States of America (“GAAP”). The following
notes to these interim financial statements highlight significant changes to the notes included in
the December 31, 2010 audited financial statements included in our 2010 Form 10-K and present
interim disclosures as required by the Securities and Exchange Commission. In order to conform with
GAAP, 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 June 30, 2011 and December 31, 2010, and the reported amounts of
revenues and expenses for the three and six months ended June 30, 2011 and June 30, 2010. 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 June 30, 2011 and December 31, 2010, and the results of our operations and
comprehensive income for each of the three and six months ended June 30, 2011 and June 30, 2010,
and our cash flows for each of the six months ended June 30, 2011 and June 30, 2010, and all
adjustments are of a normal recurring nature.
Franchise Taxes
During 2005, we recorded a $745 franchise tax reserve related to a potential state franchise
tax assessment for the 1996-2001 tax years. During the three months ended June 30, 2011, we
received a refund from the state, representing amounts paid during 2006 related to the 1996-2001
tax years. Based on the refund received and discussions with the taxing authorities, as of June
30, 2011, management believes that it is unlikely that any franchise tax amounts will be assessed
by the state for such tax years. As such, during the three months
ended June 30, 2011, we have
reversed $745 of franchise taxes. Franchise taxes are recorded within general and
administrative expense.
|
Subsequent Events
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Subsequent Events [Abstract] | Â |
Subsequent Events |
12. Subsequent Events
From July 1, 2011 to August 3, 2011, we sold one industrial property for approximately $3,100.
On July 6, 2011, we repurchased and retired $9,395 of our senior unsecured debt maturing
in 2028 at par. In connection with the partial retirement, we will recognize approximately $522 as
loss on early retirement of debt.
|
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