Industrial Logistics Properties Trust · NASDAQ:ILPT
Industrial Logistics Properties Trust — Q3 2018 Earnings Presentation
46 slides from Industrial Logistics Properties Trust's earnings presentation, Oct 26, 2018
Slide 1: Third Quarter 2018 Supplemental Operating and Financial Data
Industrial Logistics Properties Trust Exhibit 99.2 7958 South Chester Street, Centennial, CO Square Feet: 167,917 Third Quarter 2018 United Launch Alliance Corporate HeadquartersSupplemental Operating and Financial Data 5 Logistics Drive, Carlisle, PA Square Feet: 205,090 Tenant: TAP Worldwide, LLC
Slide 2: Table of Contents
TABLE OF CONTENTS PAGE/ EXHIBIT CORPORATE INFORMATION Company Profile 7 Investor Information 8 Research Coverage 9 FINANCIALS Key Financial Data 11 Condensed Consolidated Balance Sheets 12 Condensed Consolidated Statements of Income 13 Condensed Consolidated Statements of Cash Flows 14 TABLE OF CONT
Slide 3: Warning Concerning Forward Looking Statements
WARNING CONCERNING FORWARD LOOKING STATEMENTS THIS PRESENTATION OF SUPPLEMENTAL OPERATING AND FINANCIAL DATA CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER WE USE WORD
Slide 4: Warning Concerning Forward Looking Statements (Continued)
WARNING CONCERNING FORWARD LOOKING STATEMENTS (CONTINUED) • THE IMPACT OF CONDITIONS AND CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS ON US AND OUR TENANTS • COMPETITION WITHIN THE REAL ESTATE INDUSTRY, PARTICULARLY IN THOSE MARKETS IN WHICH OUR PROPERTIES ARE LOCATED, • COMPLIANCE WITH, AND CHANG
Slide 5: Warning Concerning Forward Looking Statements (Continued)
WARNING CONCERNING FORWARD LOOKING STATEMENTS (CONTINUED) • OUR INCREASED OPERATING EXPENSES AS A PUBLIC COMPANY MAY BE GREATER THAN WE EXPECT, • WE INTEND TO CONDUCT OUR BUSINESS ACTIVITIES IN A MANNER THAT WILL AFFORD US REASONABLE ACCESS TO CAPITAL FOR INVESTMENT AND FINANCING ACTIVITIES. HOWEVER
Slide 6: Corporate Information
CORPORATE INFORMATION Sand Island Industrial Land, Honolulu, HI 48 Buildings and Leasable Land Parcels Approximate Square Feet: 2,448,000 6 6
Slide 7: Company Profile
COMPANY PROFILE The Company: ILPT is a real estate investment trust, or REIT, that owns and leases industrial and logistics properties throughout the United States. As of September 30, 2018, we owned 269 properties with approximately 29.2 million rentable square feet Corporate Headquarters: located
Slide 8: Investor Information
INVESTOR INFORMATION Board of Trustees Bruce M. Gans Lisa Harris Jones Joseph L. Morea Independent Trustee Independent Trustee Independent Trustee John C. Popeo Adam D. Portnoy Managing Trustee Managing Trustee INVESTOR INFORMATION INVESTOR Senior Management John C. Popeo Richard W. Siedel, Jr. Pres
Slide 9: Research Coverage
RESEARCH COVERAGE Equity Research Coverage B. Riley FBR RBC Capital Markets Bryan Maher Michael Carroll (646) 885-5423 (440) 715-2649 RESEARCH COVERAGE bmaher@brileyfbr.com michael.carroll@rbccm.com Bank of America / Merrill Lynch UBS Equities James Feldman Frank Lee (646) 855-5808 (415) 352-5679 ja
Slide 10: Financials
FINANCIALS 5300 Centerpoint Parkway, Groveport, OH Square Feet: 581,342 Tenant: Avnet, Inc. 10 10
Slide 11: Key Financial Data
KEY FINANCIAL DATA (dollars in thousands, except per share data) As of and For the Three Months Ended 9/30/2018 6/30/2018 3/31/2018 12/31/2017 9/30/2017 Selected Balance Sheet Data: Total gross assets (1) $ 1,594,907 $ 1,544,931 $ 1,512,327 $ 1,486,297 $ 1,487,409 Total assets $ 1,506,629 $ 1,461,35
Slide 12: Condensed Consolidated Balance Sheets
CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands, except per share data) September 30, December 31, 2018 2017 ASSETS Real estate properties: Land $ 666,526 $ 642,706 Buildings and improvements 767,888 700,896 1,434,414 1,343,602 Accumulated depreciation (88,278) (74,614) 1,346,136 1,268,9
Slide 13: Condensed Consolidated Statements of Income
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (amounts in thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenues: Rental income $ 34,781 $ 33,624 $ 103,470 $ 100,921 Tenant reimbursements and other income 5,650 5,442 16,986 16,19
Slide 14: Condensed Consolidated Statements of Cash Flows
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) Nine Months Ended September 30, 2018 2017 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 56,100 $ 64,834 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 13,715 13,296 Net amortiz
Slide 15: Condensed Consolidated Statements of Cash Flows (Continued)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (dollars in thousands) Nine Months Ended September 30, 2018 2017 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common shares, net 444,309 — Borrowings under revolving credit facility 160,000 — Repayments of revolving credi
Slide 16: Debt Summary
DEBT SUMMARY (dollars in thousands) Coupon Interest Principal Maturity Due at Years to Rate (1) Rate (2) Balance (3) Date Maturity Maturity DEBT SUMMARY As of September 30, 2018: Unsecured Floating Rate Debt: Revolving credit facility (LIBOR + 130 bps) (4) 3.504% 3.504% $ 380,000 12/29/2021 $ 380,00
Slide 17: Debt Maturity Schedule
DEBT MATURITY SCHEDULE (dollars in thousands) Scheduled Principal Payments as of September 30, 2018 Unsecured Secured Floating Fixed Year Rate Debt Rate Debt Total (2) 2020 $ — $ 48,750 $ 48,750 2021 380,000 (1) — 380,000 Total $ 380,000 $ 48,750 $ 428,750 DEBT MATURITY SCHEDULE DEBT MATURITY Percen
Slide 18: Leverage Ratios and Coverage Ratios
LEVERAGE RATIOS AND COVERAGE RATIOS (dollars in thousands) As of and For the Three Months Ended 9/30/2018 6/30/2018 3/31/2018 (1) Leverage Ratios Post-IPO: Total debt (2) / total gross assets (3) 26.9% 24.8% 23.2% Total debt (2) / gross book value of real estate assets (4) 27.7% 25.7% 24.2% Total de
Slide 19: Capital Expenditures Summary
CAPITAL EXPENDITURES SUMMARY (dollars in thousands) For the Three Months Ended 9/30/2018 6/30/2018 3/31/2018 12/31/2017 9/30/2017 Tenant improvements (1) $ — $ — $ 69 $ 384 $ 2 Leasing costs (2) 188 324 5 80 95 Building improvements (3) 657 211 90 228 224 Recurring capital expenditures 845 535 164 6
Slide 20: Property Acquisitions and Dispositions Information Since 1/1/18
PROPERTY ACQUISITIONS AND DISPOSITIONS INFORMATION SINCE 1/1/18 (dollars and sq. ft. in thousands, except per sq. ft. data) Acquisitions(1): Weighted Average Purchase Remaining Date Number of Purchase Price (2) / Cap Lease Term Percent Acquired Location Properties Sq. Ft. Price (2) Sq. Ft. Rate (3)
Slide 21: Calculation of Property NOI and Cash Basis NOI
CALCULATION OF PROPERTY NET OPERATING INCOME (NOI) AND CASH BASIS NOI (1) (dollars in thousands) For the Three Months Ended For the Nine Months Ended 9/30/2018 6/30/2018 3/31/2018 12/31/2017 9/30/2017 9/30/2018 9/30/2017 Calculation of NOI and Cash Basis NOI: Rental income $ 34,781 $ 33,880 $ 34,809
Slide 22: Reconciliation of NOI to Same Property NOI and Cash Basis NOI
RECONCILIATION OF NOI TO SAME PROPERTY NOI AND CALCULATION OF SAME PROPERTY CASH BASIS NOI (1) (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, CASH BASIS NOI 2018 2017 2018 2017 Reconciliation of NOI to Same Property NOI (2)(3): Rental income $ 34,781 $ 33,624
Slide 23: Calculation of EBITDA and Adjusted EBITDA
CALCULATION OF EBITDA AND ADJUSTED EBITDA (1) (dollars in thousands) For the Three Months Ended For the Nine Months Ended 9/30/2018 6/30/2018 3/31/2018 12/31/2017 9/30/2017 9/30/2018 9/30/2017 Net income $ 18,142 $ 18,726 $ 19,232 $ 15,269 $ 22,903 $ 56,100 $ 64,834 Plus: interest expense 4,052 3,55
Slide 24: Calculation of FFO and Normalized FFO
CALCULATION OF FUNDS FROM OPERATIONS (FFO) AND NORMALIZED FFO (1) (dollars and shares in thousands, except per share data) For the Three Months Ended For the Nine Months Ended 9/30/2018 6/30/2018 3/31/2018 12/31/2017 9/30/2017 9/30/2018 9/30/2017 Net income $ 18,142 $ 18,726 $ 19,232 $ 15,269 $ 22,9
Slide 25: Definitions of Certain Non-GAAP Financial Measures
DEFINITIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES NOI and Cash Basis NOI: The calculations of NOI and Cash Basis NOI exclude certain components of net income in order to provide results that are more closely related to our property level results of operations. We calculate NOI and Cash Basis NOI as
Slide 26: Portfolio Information
PORTFOLIO INFORMATION 32150 Just Imagine Drive, Avon, OH Square Feet: 644,850 Tenant: Shurtech Brands, LLC 26 26
Slide 27: Portfolio Summary by Property Type
PORTFOLIO SUMMARY BY PROPERTY TYPE (dollars and sq. ft. in thousands) As of and For the Three Months Ended September 30, 2018 Mainland Hawaii Key Statistic Properties Properties Total Leasable properties 43 226 (1) 269 Percent of total 16.0% 84.0% 100.0% Total square feet 12,382 16,834 29,216 Percen
Slide 28: Same Property Results of Operations by Property Type
SAME PROPERTY RESULTS OF OPERATIONS BY PROPERTY TYPE (dollars and sq. ft. in thousands) As of and For the Three Months Ended (1) As of and For the Nine Months Ended (2) 9/30/2018 9/30/2017 9/30/2018 9/30/2017 Leasable Properties: Mainland Properties 40 40 40 40 Hawaii Properties 226 226 226 226 Tota
Slide 29: Same Property Results of Operations by Property Type (Continued)
SAME PROPERTY RESULTS OF OPERATIONS BY PROPERTY TYPE (CONTINUED) (dollars in thousands) As of and For the Three Months Ended (1) As of and For the Nine Months Ended (2) 9/30/2018 9/30/2017 9/30/2018 9/30/2017 NOI (3): Mainland Properties $ 13,623 $ 13,663 $ 41,006 $ 40,934 Hawaii Properties 18,006 1
Slide 30: Leasing Summary
LEASING SUMMARY (dollars and sq. ft. in thousands, except per sq. ft. data) As of and For the Three Months Ended 9/30/2018 6/30/2018 3/31/2018 12/31/2017 9/30/2017 Leasable buildings (1) 269 267 266 266 266 Total sq. ft. (2) 29,216 28,780 28,540 28,540 28,540 Square feet leased 29,002 28,516 28,534
Slide 31: Occupancy and Leasing Analysis by Property Type
OCCUPANCY AND LEASING ANALYSIS BY PROPERTY TYPE (sq. ft. in thousands) Total Sq. Ft. (1) Sq. Ft. Leases Executed During As of the Three Months Ended 9/30/2018 Property Type 9/30/2018 New Renewals Total Mainland Properties 12,382 70 — 70 Hawaii Properties 16,834 50 204 254 Total 29,216 120 204 324 Sq
Slide 32: Tenant Credit Characteristics
TENANT CREDIT CHARACTERISTICS As of September 30, 2018 % of Annualized Rental Revenues (1) Mainland Tenant Credit Characteristics Properties Consolidated Investment grade rated 41.4% 23.9% Subsidiaries of investment grade rated parent entities 7.2% 3.6% Other leased Hawaii lands —% 46.2% Subtotal in
Slide 33: Tenants Representing 1% or More of Total Annualized Rental Revenues
TENANTS REPRESENTING 1% OR MORE OF TOTAL ANNUALIZED RENTAL REVENUES As of September 30, 2018 (sq. ft. in thousands) % of Total Rented % of Total Annualized Rental Tenant Property Type Sq. Ft. (1) Rented Sq. Ft. (1) Revenues (3) 1. Amazon.com.dedc, LLC / Amazon.com.kydc LLC Mainland Industrial 3,048
Slide 34: Five Year Lease Expiration Schedule by Property Type
FIVE YEAR LEASE EXPIRATION SCHEDULE BY PROPERTY TYPE As of September 30, 2018 (dollars and sq. ft. in thousands) 2023 and Total 2018 2019 2020 2021 2022 Thereafter Mainland Properties: Total sq. ft. 12,382 Leased sq. ft. (1) 12,382 — 95 394 625 244 11,024 Percent —% 0.8% 3.2% 5.0% 2.0% 89.0% Annuali
Slide 35: Portfolio Lease Expiration Schedule
PORTFOLIO LEASE EXPIRATION SCHEDULE As of September 30, 2018 (dollars and sq. ft. in thousands) Cumulative % of Total Cumulative % Annualized % of Total % of Total Rented Rented of Total Rented Rental Annualized Annualized Number of Square Feet Square Feet Square Feet Revenues Rental Revenues Rental
Slide 36: Hawaii Land Rent Reset Summary
HAWAII LAND RENT RESET SUMMARY (dollars and sq. ft. in thousands) Historical Hawaii Land Rent Resets: For the Three Months Ended 9/30/2018 6/30/2018 3/31/2018 12/31/2017 9/30/2017 Number of leases reset 11 1 — 4 1 Square feet 516 34 — 200 27 Percent change in GAAP rent (1) 20.3% 18.0% —% 38.6% 45.3%
Slide 37: Exhibit A
EXHIBIT A 4000 Principio Parkway, North East, MD Square Feet: 1,194,744 Tenant: Restoration Hardware, Inc. 37 37
Slide 38: Property Detail
PROPERTY DETAIL As of September 30, 2018 (dollars and square feet in thousands) EXHIBIT A Number of Year Buildings, Annualized Built or Land Parcels Property Rental Undepreciated Depreciated Date Most Recent Property City State and Easements Type Square Feet % Leased Revenues (1) Carrying Value (2)
Slide 39: Property Detail (Continued)
PROPERTY DETAIL (CONTINUED) As of September 30, 2018 (dollars and square feet in thousands) EXHIBIT A Number of Year Buildings, Annualized Built or Land Parcels Property Rental Undepreciated Depreciated Date Most Recent Property City State and Easements Type Square Feet % Leased Revenues (1) Carryin
Slide 40: Property Detail (Continued)
PROPERTY DETAIL (CONTINUED) As of September 30, 2018 (dollars and square feet in thousands) EXHIBIT A Number of Year Buildings, Annualized Built or Land Parcels Property Rental Undepreciated Depreciated Date Most Recent Property City State and Easements Type Square Feet % Leased Revenues (1) Carryin
Slide 41: Property Detail (Continued)
PROPERTY DETAIL (CONTINUED) As of September 30, 2018 (dollars and square feet in thousands) EXHIBIT A Number of Year Buildings, Annualized Built or Land Parcels Property Rental Undepreciated Depreciated Date Most Recent Property City State and Easements Type Square Feet % Leased Revenues (1) Carryin
Slide 42: Property Detail (Continued)
PROPERTY DETAIL (CONTINUED) As of September 30, 2018 (dollars and square feet in thousands) EXHIBIT A Number of Year Buildings, Annualized Built or Land Parcels Property Rental Undepreciated Depreciated Date Most Recent Property City State and Easements Type Square Feet % Leased Revenues (1) Carryin
Slide 43: Property Detail (Continued)
PROPERTY DETAIL (CONTINUED) As of September 30, 2018 (dollars and square feet in thousands) EXHIBIT A Number of Year Buildings, Annualized Built or Land Parcels Property Rental Undepreciated Depreciated Date Most Recent Property City State and Easements Type Square Feet % Leased Revenues (1) Carryin
Slide 44: Property Detail (Continued)
PROPERTY DETAIL (CONTINUED) As of September 30, 2018 (dollars and square feet in thousands) EXHIBIT A Number of Year Buildings, Annualized Built or Land Parcels Property Rental Undepreciated Depreciated Date Most Recent Property City State and Easements Type Square Feet % Leased Revenues (1) Carryin
Slide 45: Property Detail (Continued)
PROPERTY DETAIL (CONTINUED) As of September 30, 2018 (dollars and square feet in thousands) EXHIBIT A Number of Year Buildings, Annualized Built or Land Parcels Property Rental Undepreciated Depreciated Date Most Recent Property City State and Easements Type Square Feet % Leased Revenues (1) Carryin
Slide 46: Property Detail (Continued)
PROPERTY DETAIL (CONTINUED) As of September 30, 2018 (dollars and square feet in thousands) EXHIBIT A Number of Year Buildings, Annualized Built or Land Parcels Property Rental Undepreciated Depreciated Date Most Recent Property City State and Easements Type Square Feet % Leased Revenues (1) Carryin
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