Industrial Logistics Properties Trust(ILPT) - 2024 Q2 - Quarterly Report

PART I. Financial Information This section presents the company's unaudited financial statements and related disclosures for the reporting period Item 1. Financial Statements (unaudited) This section presents the unaudited condensed consolidated financial statements and detailed notes for Industrial Logistics Properties Trust Condensed Consolidated Balance Sheets Presents the company's assets, liabilities, and equity as of June 30, 2024, and December 31, 2023 Condensed Consolidated Balance Sheets (June 30, 2024 vs. December 31, 2023) | Metric (in thousands) | June 30, 2024 | December 31, 2023 | Change | % Change | | :-------------------- | :------------ | :---------------- | :----- | :------- | | Total assets | $5,489,822 | $5,563,675 | $(73,853) | -1.33% | | Total liabilities | $4,402,055 | $4,401,896 | $159 | 0.00% | | Total equity | $1,087,767 | $1,161,779 | $(74,012) | -6.37% | - Total assets decreased by $73.85 million, primarily driven by a decrease in total real estate properties, net, and restricted cash and cash equivalents[10] - Total equity decreased by $74.01 million, mainly due to a decrease in cumulative net income (deficit) and noncontrolling interest[10] Condensed Consolidated Statements of Comprehensive Income (Loss) Details the company's revenues, expenses, and net loss for the three and six months ended June 30, 2024 and 2023 Condensed Consolidated Statements of Comprehensive Income (Loss) (Three Months Ended June 30) | Metric (in thousands, except per share) | 2024 | 2023 | Change | % Change | | :------------------------------------ | :---------- | :---------- | :---------- | :------- | | Rental income | $110,621 | $108,043 | $2,578 | 2.39% | | Total expenses | $75,716 | $76,913 | $(1,197) | -1.56% | | Interest expense | $(73,631) | $(71,846) | $(1,785) | 2.48% | | Net loss | $(33,479) | $(36,580) | $3,101 | -8.48% | | Net loss attributable to common shareholders | $(23,175) | $(25,828) | $2,653 | -10.27% | | Net loss per common share | $(0.35) | $(0.40) | $0.05 | -12.50% | Condensed Consolidated Statements of Comprehensive Income (Loss) (Six Months Ended June 30) | Metric (in thousands, except per share) | 2024 | 2023 | Change | % Change | | :------------------------------------ | :---------- | :---------- | :---------- | :------- | | Rental income | $222,856 | $218,301 | $4,555 | 2.09% | | Total expenses | $153,165 | $156,062 | $(2,897) | -1.86% | | Interest expense | $(146,861) | $(142,617) | $(4,244) | 2.98% | | Net loss | $(67,381) | $(72,126) | $4,745 | -6.58% | | Net loss attributable to common shareholders | $(46,578) | $(50,637) | $4,059 | -8.01% | | Net loss per common share | $(0.71) | $(0.77) | $0.06 | -7.79% | - Net loss attributable to common shareholders decreased by 10.3% for the three months and 8.0% for the six months ended June 30, 2024, compared to the prior year periods, resulting in an improved net loss per common share[12] Condensed Consolidated Statements of Shareholders' Equity Outlines changes in shareholders' equity, including net loss, share transactions, and distributions, for the period Changes in Total Equity (December 31, 2023 to June 30, 2024) | Metric (in thousands) | Balance at Dec 31, 2023 | Net Loss (6 months) | Share Grants/Repurchases | Distributions | Other Comprehensive Loss | Balance at Jun 30, 2024 | | :-------------------- | :---------------------- | :------------------ | :----------------------- | :------------ | :----------------------- | :---------------------- | | Total Equity | $1,161,779 | $(67,381) | $1,205 | $(1,317) | $(6,356) | $1,087,767 | - Total equity decreased from $1,161,779 thousand at December 31, 2023, to $1,087,767 thousand at June 30, 2024, primarily due to net losses and other comprehensive losses[15] Condensed Consolidated Statements of Cash Flows Summarizes cash flows from operating, investing, and financing activities for the six months ended June 30, 2024 and 2023 Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Cash Flow Activity (in thousands) | 2024 | 2023 | Change | % Change | | :-------------------------------- | :---------- | :---------- | :---------- | :------- | | Net cash provided by operating activities | $18,839 | $10,631 | $8,208 | 77.21% | | Net cash provided by investing activities | $4,648 | $17,387 | $(12,739) | -73.27% | | Net cash (used in) provided by financing activities | $(10,641) | $41,570 | $(52,211) | -125.59% | | Increase in cash and cash equivalents and restricted cash | $12,846 | $69,588 | $(56,742) | -81.53% | | Cash and cash equivalents and restricted cash at end of period | $258,569 | $210,368 | $48,201 | 22.91% | - Net cash provided by operating activities significantly increased by 77.2% for the six months ended June 30, 2024, compared to the prior year, driven by higher cash flows from properties and favorable working capital changes[17][117] - Net cash provided by investing activities decreased by 73.3%, primarily due to the purchase of an interest rate cap for $26.175 million in 2024, partially offset by increased proceeds from derivative settlements and reduced real estate improvements[17][117] - Financing activities shifted from providing $41.57 million in cash in 2023 to using $10.64 million in 2024, mainly due to a $91 million mortgage loan obtained by the consolidated joint venture in 2023 that was not repeated in 2024[17][117] Note 1. Basis of Presentation Explains the basis for preparing the unaudited condensed consolidated financial statements and the use of estimates - The condensed consolidated financial statements are unaudited and prepared in accordance with GAAP, with certain information condensed or omitted[21] - The preparation of financial statements involves estimates and assumptions, such as purchase price allocations, useful lives of fixed assets, and impairment assessments, which could differ from actual results[22] Note 2. Recent Accounting Pronouncements Discusses the evaluation of recent accounting pronouncements, specifically ASU 2023-07, on segment reporting disclosures - The company is evaluating the impact of ASU 2023-07, 'Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,' effective for fiscal years beginning after December 15, 2023[23] Note 3. Real Estate Investments Details the company's portfolio of industrial and logistics properties, including joint venture interests and capitalized expenditures