Industrial Logistics Properties Trust (ILPT) Q1 2025 Earnings Call April 30, 2025 10:00 AM ET Speaker0 Good morning, and welcome to Industrial Logistics Properties Trust First Quarter twenty twenty five Financial Results Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like turn the call over to Matt Murphy, Manager of Investor Relations. Please go ahead. Speaker1 Go ...

Financial Results and Supplemental Information FIRST QUARTER 2025 April 29, 2025 2020 Joe B. Jackson Parkway Murfreesboro, TN 1,016,281 Square Feet ILPT Ownership: 100% Table of Contents QUARTERLY RESULTS | 4 | Industrial Logistics Properties Trust Announces First Quarter 2025 Financial Results | | | --- | --- | --- | | First Quarter 2025 Highlights | | 5 | | FINANCIALS | | | | Key Financial Data | | 7 | | Condensed Consolidated Statements of Income (Loss) | | 8 | | Condensed Consolidated Balance Sheets | | ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-38342 INDUSTRIAL LOGISTICS PROPERTIES TRUST (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Emp ...

Financial Results and Supplemental Information FIRST QUARTER 2025 April 29, 2025 OGISTICS Exhibit 99.2 All amounts in this presentation are unaudited. Please refer to Non-GAAP Financial Measures and Certain Definitions for terms used throughout this document. INDUSTRIAL LOGISTICS PROPERTIES TRUST Quarterly Results B Q1 2025 RETURN TO TABLE OF CONTENTS th 1 07 P Table of Contents | QUARTERLY RESULTS | | | --- | --- | | Industrial Logistics Properties Trust Announces First Quarter 2025 Financial Results . | ব ...

Industrial Logistics Properties Trust (NASDAQ:ILPT) Q4 2024 Earnings Conference Call February 19, 2024 1:00 PM ET Company Participants Matt Murphy - Manager, IR Yael Duffy - President and COO Marc Krohn - VP Tiffany Sy - CFO Conference Call Participants Mitch Germain - Citizens JMP Operator Good morning and good day and welcome to Industrial Logistics Properties Trust Fourth Quarter 2024 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, thi ...

REIT Qualification and Taxation - The company is required to distribute at least 90% of its REIT taxable income annually to qualify for taxation as a REIT[45]. - The company has elected to be taxed as a REIT under Sections 856 through 860 of the IRC, effective from the 2018 taxable year[71]. - The company believes it has operated in a manner that qualifies it for taxation as a REIT and will continue to do so[73]. - The company is generally not subject to federal income tax on net income distributed as dividends to shareholders, provided it meets certain requirements[72]. - If the company fails to qualify as a REIT in any year, it could face significant tax liabilities and reduced cash available for distribution to shareholders[74]. - The company may be subject to a 4% nondeductible excise tax if it fails to distribute at least 85% of its REIT ordinary income and 95% of its REIT capital gain net income for any calendar year[75]. - The company’s continued qualification as a REIT depends on compliance with various qualification tests imposed under the IRC[74]. - The company’s counsel believes it will continue to meet the requirements for qualification and taxation as a REIT based on current operations and investments[73]. - The company believes it has met all REIT qualification conditions during the requisite periods and will continue to do so in the future[79]. - At least 75% of the company's gross income must be derived from real property-related investments to maintain REIT status[92]. - The company must satisfy two gross income tests annually to maintain REIT qualification, with at least 95% of gross income needing to be qualifying income[92]. - The company has protective TRS elections in place to mitigate risks associated with subsidiary REITs not qualifying for taxation as REITs[86]. - The company is required to make annual distributions equal to at least 90% of its "real estate investment trust taxable income" to qualify for REIT taxation[107]. - If the company fails to meet the 90% distribution requirement, it may be subject to a 4% nondeductible excise tax on undistributed amounts[109]. - The company can rectify a failure to pay sufficient dividends by issuing "deficiency dividends" in a later year, subject to an interest charge[111]. - Following a corporate acquisition, the company must distribute all inherited C corporation earnings and profits by the end of the taxable year[117]. - The company acquired MNR in Q1 2022, which may have tax implications if MNR lost its REIT qualification prior to acquisition[118]. Debt and Financing - The company has no policies limiting the amount of debt it may incur, allowing for flexible financing strategies[46]. - As of December 31, 2024, the total outstanding floating rate debt amounted to $2,635 million with a weighted average interest rate of 6.32%[322]. - The ILPT Floating Rate Loan has a principal balance of $1,235 million with an interest rate of 6.71%, requiring monthly payments of $84,019 until maturity on October 9, 2025[322]. - The Mountain Floating Rate Loan has a principal balance of $1,400 million with an interest rate of 5.81%, requiring monthly payments of $82,470 until maturity on March 9, 2025[322]. - The company has purchased interest rate caps to hedge against fluctuations in SOFR, with current strike rates of 2.78% for the ILPT loan and 3.04% for the Mountain loan[323]. - In February 2025, the consolidated joint venture exercised the second extension option for the Mountain Floating Rate Loan and purchased a one-year interest rate cap for $15,010 with a SOFR strike rate of 3.10%[323]. - The company is exposed to market risks associated with interest rate changes and manages this risk by monitoring financing alternatives and employing derivative instruments[320]. - The company does not expect significant changes in its exposure to interest rate fluctuations in the near future[320]. - A one percentage point increase in interest rates would result in an annual floating rate interest expense of $166.489 million and a decrease in earnings per share of $2.53[324]. - If the weighted average interest rate of floating rate loans increases to 7.32%, the total floating rate interest expense per year would be $195.517 million, leading to a decrease in annual earnings per share of $2.98[325]. - The company's total outstanding fixed rate debt amounts to approximately $1.673 billion, with a weighted average interest rate of 4.37%[328]. - The annual interest cost for refinancing fixed rate mortgage notes at a one percentage point higher or lower rate would change by approximately $16.728 million[329]. - A hypothetical one percentage point change in market interest rates would affect the fair value of fixed rate debt obligations by approximately $78.250 million[330]. - The company is exposed to fluctuations in floating interest rates, which will vary with changes in outstanding amounts of floating rate debt and interest rate caps purchased[326]. - The company has several mortgage notes with varying interest rates, with the highest being 6.25% and the lowest at 2.95%[328]. - The company’s fixed rate mortgage notes require interest-only payments until maturity for certain amounts, while others require amortizing payments[329]. - Interest rates remain elevated despite recent reductions by the U.S. Federal Reserve, creating uncertainties for future interest rate movements[330]. Corporate Governance and Sustainability - The company relies on RMR for management services and has no employees of its own, with RMR employing over 1,000 full-time staff[52]. - The company competes with various public and private REITs and financial institutions, leveraging management experience and property quality as competitive advantages[48]. - As of December 31, 2024, the Board of Trustees included seven members, with 28.6% being female and 14.3% from under-represented communities[61]. - The company emphasizes corporate sustainability as a strategic focus, aligning with RMR's initiatives to minimize environmental impact[54]. - The company monitors environmental compliance and has set up reserves for potential environmental liabilities, although it does not believe current conditions will materially affect operations[47]. Asset Management and Compliance - The company has invested in real estate through partnerships, treating its proportionate share of income and assets for REIT qualification purposes[83]. - The company has subsidiary REITs that are expected to remain qualified for taxation as REITs under the IRC[84]. - The company is permitted to own securities of Taxable REIT Subsidiaries (TRSs), provided that no more than 20% of its total assets are comprised of these investments[87]. - The company must not own more than 10% of the vote or value of any one non-REIT issuer's outstanding securities, unless the securities are "straight debt" securities[101]. - The company must satisfy the asset tests at the close of each calendar quarter to maintain REIT status[103]. - If the company fails the 5% asset test, the failure will be excused if it is de minimis and corrective actions are taken within specified timeframes[104]. - The company has maintained records of the value of its assets to document compliance with the asset tests[106]. - The company cannot be sure that restrictions on ownership will effectively prevent qualification for taxation as a REIT from being jeopardized under the 10% affiliated tenant rule[93]. - The company expects that any revenues from TRS-provided services will qualify as "rents from real property" because the services will satisfy the geographically customary standard[94]. - The company believes that all or substantially all of its rents and related service charges have qualified as "rents from real property" for purposes of Section 856 of the IRC[94].

Leasing and Occupancy - Industrial Logistics Properties Trust achieved annual leasing of nearly 6,100,000 square feet, with 731,000 square feet leased in Q4 2024 at rental rates 39.3% higher than prior rents[7] - The portfolio's occupancy rate stands at 94.4%, with 77% of annualized rental revenues generated from investment-grade tenants[13] - The percentage of properties leased decreased to 94.4% in Q4 2024 from 98.8% in Q4 2023[36] - The company executed 731 leasing activities in the last quarter, including 148 new leases and 583 renewals, with a total of 682 expirations[39] - The weighted average lease term for newly leased properties is 11.5 years, with lease renewals accounting for approximately 80% of leased square footage[13] - The weighted average lease term for new leases was 21.3 years, and for renewals, it was 7.8 years[39] - The top 10 tenants contribute 43.2% of total annualized rental revenues, with FedEx Corporation alone accounting for 22.6%[40] - 76.7% of rental revenues come from investment-grade rated tenants or their subsidiaries[40] Financial Performance - Net loss attributable to common shareholders for Q4 2024 was $24.1 million, or $0.37 per diluted share[13] - Normalized FFO attributable to common shareholders was $8.9 million, or $0.13 per diluted share[13] - NOI for Q4 2024 was $84.2 million, with cash basis NOI at $81.6 million and Adjusted EBITDAre at $82.2 million[13] - Rental income for Q4 2024 was $110,521,000, a 1.5% increase from $108,895,000 in Q4 2023[18] - Net loss attributable to common shareholders for Q4 2024 was $24,101,000, compared to a net loss of $31,240,000 in Q4 2023, representing a 22.5% improvement[18] - Cash and cash equivalents increased to $131,706,000 in 2024 from $112,341,000 in 2023, a rise of 17.3%[19] - The company reported a net loss of $(34,380) thousand for the three months ended December 31, 2024, compared to $(41,402) thousand in 2023[63] - The company’s total rental income for the year ended December 31, 2024, was $442,322 thousand, compared to $437,338 thousand in 2023[65] Debt and Liquidity - Total cash and cash equivalents as of December 31, 2024, were $131.7 million, excluding restricted cash[13] - The company exercised the first of three one-year extension options for its $1.2 billion floating rate loan, purchasing a one-year interest rate cap for $17.0 million[13] - Net debt to total gross assets ratio was 68.6% as of Q4 2024, slightly up from 68.1% in Q3 2024[29] - The weighted average interest rate on debt was 5.51% as of December 31, 2024[21] - Total liabilities amounted to $1,757,801, with mortgages and notes payable at $1,722,015[53] - The company is focused on maintaining sufficient liquidity and reducing leverage to navigate market uncertainties[98] Asset Management - Total assets decreased to $5,406,331,000 in 2024 from $5,563,675,000 in 2023, a decline of 2.8%[19] - The company managed over $40 billion in assets as of December 31, 2024, with more than $5 billion in annual revenues and approximately 2,000 properties[74] - ILPT wholly owns 316 properties, including 226 buildings and approximately 16.7 million rentable square feet primarily located in Hawaii[89] - Mountain JV owns 94 mainland properties with approximately 21.0 million rentable square feet across 27 states, fully consolidated in ILPT's financial statements[91] Future Outlook and Risks - Forward-looking statements indicate potential risks related to tenant lease renewals and market conditions affecting rental income[97] - The company aims to prudently pursue renovation projects to achieve expected returns despite potential cost overruns and supply chain challenges[98] - ILPT's performance is subject to various risks, including economic downturns and changes in real estate utilization[98] - The company does not intend to update forward-looking statements unless required by law, highlighting the inherent uncertainties in its projections[100]

Group 1 - The company has experienced a decline of over 80% since its IPO, with most losses occurring in 2022 [1] - The stock is currently priced for a 1% dividend yield, indicating potential for a resurgence [1] - The investment approach focuses on long-term ownership rather than short-term price predictions, emphasizing valuations over target prices [1] Group 2 - The analyst has transitioned from writing many Sell pieces to a simplified approach of "Buy or Don't Buy," with future articles likely to be categorized as Buy or Hold [1] - As of March 2024, no Strong Buy ratings have been issued for any securities [1]

Core Viewpoint - Industrial Logistics Properties Trust (ILPT) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive earnings outlook that may lead to increased stock prices [1][4][11] Earnings Estimates - The Zacks Consensus Estimate for ILPT is projected at $0.52 per share for the fiscal year ending December 2024, reflecting an 8.3% year-over-year increase [9] - Over the past three months, earnings estimates for ILPT have risen by 2% [9] Zacks Rating System - The Zacks rating system is based solely on a company's changing earnings picture, which is a significant factor influencing stock prices [2][3] - The system classifies stocks into five groups, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [8] Market Implications - The upgrade to Zacks Rank 2 positions ILPT in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10][11] - Rising earnings estimates and the corresponding rating upgrade indicate an improvement in ILPT's underlying business, likely leading to increased investor interest and stock price appreciation [6][11]

Core Viewpoint - Industrial Logistics Properties Trust (ILPT) has experienced a significant downtrend, with an 18.8% decline over the past four weeks, but is now in oversold territory, suggesting a potential turnaround due to improved earnings expectations from analysts [1]. Group 1: Stock Performance - ILPT shares have faced heavy selling pressure, leading to an RSI reading of 25.83, indicating that the stock may soon reverse its downward trend [3]. - The stock's recent decline has placed it in oversold territory, which typically signals a potential for price recovery [1][3]. Group 2: Analyst Sentiment - There is strong consensus among sell-side analysts regarding an increase in earnings estimates for ILPT, with a 2% rise in the consensus EPS estimate over the last 30 days [3]. - ILPT holds a Zacks Rank 2 (Buy), positioning it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [3].