Industrial Logistics Properties Trust(ILPT) - 2024 Q1 - Quarterly Results

Quarterly Results This section presents Industrial Logistics Properties Trust's (ILPT) first quarter 2024 financial and operational performance, highlighting strong fundamentals and key achievements Industrial Logistics Properties Trust Announces First Quarter 2024 Financial Results ILPT reported strong Q1 2024 financial results, driven by robust operating fundamentals, increased key metrics, and active leasing - Operating fundamentals were strong, with key financial metrics increasing year-over-year and sequentially[8] - Completed nearly two million square feet of leasing, including rent resets, at weighted average rental rates 38.3% higher than prior rates for the same space[8] - Robust renewal activity accounted for 1.8 million square feet of leasing[8] - ILPT declared a quarterly distribution on its common shares on April 11, 2024, payable on or about May 16, 2024[10] - ILPT is a REIT focused on owning and operating industrial and logistics properties, with a portfolio of approximately 59.9 million rentable square feet as of March 31, 2024[12] - Approximately 77% of ILPT's annualized rental revenues are from investment-grade tenants or subsidiaries of investment-grade rated entities[12] First Quarter 2024 Highlights Q1 2024 highlights include 99.0% occupancy, 38.3% rent increases from leasing, stable cash flows, and the Mountain JV's $1.4 billion loan extension - Portfolio occupancy grew to 99.0%, an increase of 20 basis points quarter-over-quarter[14] - Executed 1,981,000 square feet of total leasing, including rent resets, at weighted average rental rates 38.3% higher than prior rates for the same space[14] - Lease renewals accounted for 90% of leasing activity, demonstrating strong tenant retention[14] - Stable cash flows with 76.6% of annualized rental revenues generated from leases with investment grade tenants (or their subsidiaries) and Hawaii land leases, with a weighted average lease term of 8.0 years[14] Q1 2024 Financial Results Highlights | Metric | Value | Change vs. Q1 2023 | | :----------------------------------------- | :-------------- | :----------------- | | Net loss attributable to common shareholders | $(23.4) million | - | | Per diluted share | $(0.36) | - | | Normalized FFO attributable to common shareholders | $9.5 million | - | | Per diluted share | $0.14 | - | | Adjusted EBITDAre | $84.4 million | +4.6% | | Same property NOI | - | +2.0% | | Same property Cash Basis NOI | - | +2.3% | - Mountain JV exercised the first of its three, one-year options to extend the maturity date of its $1.4 billion floating rate loan, purchasing a one-year interest rate cap for $26.2 million with a SOFR strike rate of 3.04%[14] Financials This section provides a comprehensive overview of ILPT's financial performance, including key income statement, balance sheet, debt, and capital expenditure data Key Financial Data This section presents ILPT's key financial metrics across multiple quarters, including income statement, per share data, and balance sheet trends Selected Income Statement Data (in thousands) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | | :----------------------------------------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Rental income | $112,235 | $108,895 | $110,142 | $108,043 | $110,258 | | Net loss | $(33,902) | $(41,402) | $(36,191) | $(36,580) | $(35,546) | | Net loss attributable to common shareholders | $(23,403) | $(31,240) | $(26,112) | $(25,828) | $(24,809) | | NOI | $86,052 | $84,887 | $85,309 | $84,424 | $84,473 | | Cash Basis NOI | $82,196 | $81,453 | $81,643 | $80,827 | $80,441 | | Adjusted EBITDAre | $84,400 | $83,072 | $83,194 | $81,331 | $80,712 | | FFO attributable to common shareholders | $9,450 | $7,799 | $7,945 | $7,375 | $7,916 | | Normalized FFO attributable to common shareholders | $9,450 | $8,086 | $7,945 | $7,594 | $7,916 | | CAD attributable to common shareholders | $11,928 | $8,948 | $10,505 | $9,803 | $10,182 | Per Common Share Data (basic and diluted) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | | :----------------------------------------- | :-------- | :--------- | :-------- | :-------- | :-------- | | Net loss attributable to common shareholders | $(0.36) | $(0.48) | $(0.40) | $(0.40) | $(0.38) | | FFO attributable to common shareholders | $0.14 | $0.12 | $0.12 | $0.11 | $0.12 | | Normalized FFO attributable to common shareholders | $0.14 | $0.12 | $0.12 | $0.12 | $0.12 | | CAD attributable to common shareholders | $0.18 | $0.14 | $0.16 | $0.15 | $0.16 | Selected Balance Sheet Data (in thousands) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | | :---------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total gross assets | $5,956,536 | $5,961,129 | $6,000,494 | $5,997,715 | $5,939,557 | | Total assets | $5,527,569 | $5,563,675 | $5,634,315 | $5,662,080 | $5,634,976 | | Total liabilities | $4,405,069 | $4,401,896 | $4,416,177 | $4,400,791 | $4,348,801 | | Total equity | $1,122,500 | $1,161,779 | $1,218,138 | $1,261,289 | $1,286,175 | Condensed Consolidated Statements of Income (Loss) This section details the consolidated income statement for Q1 2024 versus Q1 2023, showing increased rental income and reduced net loss attributable to common shareholders Condensed Consolidated Statements of Income (Loss) (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | YoY Change | | :----------------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | | Rental income | $112,235 | $110,258 | +1.8% | | Total expenses | $77,449 | $79,149 | -2.1% | | Interest expense | $(73,230) | $(70,771) | +3.5% | | Net loss | $(33,902) | $(35,546) | -4.6% | | Net loss attributable to common shareholders | $(23,403) | $(24,809) | -5.7% | Condensed Consolidated Balance Sheets This section presents consolidated balance sheets as of March 31, 2024, and December 31, 2023, indicating slight decreases in total assets and equity, with stable liabilities Condensed Consolidated Balance Sheets (in thousands) | Metric | March 31, 2024 | December 31, 2023 | QoQ Change | | :---------------- | :------------- | :---------------- | :--------- | | Total assets | $5,527,569 | $5,563,675 | -0.65% | | Total liabilities | $4,405,069 | $4,401,896 | +0.07% | | Total equity | $1,122,500 | $1,161,779 | -3.4% | Debt Summary This section summarizes ILPT's debt as of March 31, 2024, detailing principal balances, interest rates, and collateral, with a 5.35% weighted average interest rate Debt Summary (as of March 31, 2024, in thousands) | Entity | Type | Secured By | Interest Rate (1) | Principal Balance | | :---------- | :------------------------ | :--------------------------------------- | :---------------- | :---------------- | | ILPT | Floating rate - interest only | 69 mainland and 35 Hawaii properties | 6.18% | $1,235,000 | | ILPT | Fixed rate - interest only | 186 Hawaii properties | 4.31% | $650,000 | | ILPT | Fixed rate - interest only | 17 mainland properties | 4.42% | $700,000 | | Mountain JV | Floating rate - interest only | 82 mainland properties | 5.81% | $1,400,000 | | Mountain JV | Fixed rate - interest only | Four mainland properties | 6.25% | $91,000 | | Mountain JV | Fixed rate - amortizing | One mainland property | 3.67% | $11,045 | | Mountain JV | Fixed rate - amortizing | One mainland property | 4.14% | $12,601 | | Mountain JV | Fixed rate - amortizing | One mainland property | 4.02% | $28,026 | | Mountain JV | Fixed rate - amortizing | One mainland property | 4.13% | $39,198 | | Mountain JV | Fixed rate - amortizing | One mainland property | 3.10% | $23,989 | | Mountain JV | Fixed rate - amortizing | One mainland property | 2.95% | $38,730 | | Mountain JV | Fixed rate - amortizing | One mainland property | 4.27% | $43,269 | | Mountain JV | Fixed rate - amortizing | One mainland property | 3.25% | $48,620 | | | Weighted average / total | | 5.35% | $4,321,478 | - Mountain JV exercised the first of its three, one-year options to extend the maturity date of its $1.4 billion floating rate loan, purchasing a one-year interest rate cap for $26.2 million with a SOFR strike rate of 3.04%[24] Debt Maturity Schedule This section illustrates ILPT's debt maturity profile as of March 31, 2024, detailing significant maturities in 2024 and beyond, by secured floating and fixed rate debt Principal Debt Maturities (in millions) | Year | Secured floating rate debt | Secured fixed rate debt | Secured floating rate debt of consolidated joint venture | | :-------- | :------------------------- | :---------------------- | :------------------------------------------------------- | | 2024 | $1,235.0 | $1,593.3 | - | | 2025 | - | $18.8 | - | | 2026 | - | $13.7 | - | | 2027 | - | - | $1,400.0 | | 2028 | - | $19.5 | - | | Thereafter | - | $20.2 | - | - Mountain JV exercised the first of its three, one-year options to extend the maturity date of its secured floating rate loan[27] Leverage and Coverage Ratios This section provides ILPT's key leverage and coverage ratios across quarters, showing a slight increase in net debt to total gross assets and stable Adjusted EBITDAre to interest expense Leverage Ratios | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | | :------------------------------------ | :-------- | :--------- | :-------- | :-------- | | Net debt / total gross assets | 68.6% | 68.4% | 68.5% | 68.8% | | Net debt / gross book value of real estate assets | 71.7% | 71.3% | 71.7% | 72.2% | | Net debt / total market capitalization | 88.7% | 88.0% | 90.9% | 90.6% | | Secured debt / total assets | 78.2% | 77.8% | 76.9% | 76.6% | | Variable rate debt / net debt | 64.5% | 64.6% | 64.1% | 63.9% | Coverage Ratios | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | | :-------------------------------- | :-------- | :--------- | :-------- | :-------- | | Net debt / annualized Adjusted EBITDAre | 12.1× | 12.3x | 12.3x | 12.7x | | Adjusted EBITDAre / interest expense | 1.2x | 1.1× | 1.1x | 1.1× | Capital Expenditures Summary This section summarizes ILPT's Q1 2024 capital expenditures, showing a decrease compared to prior quarters, driven by lower building improvements and no development activities Capital Expenditures Summary (in thousands) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | | :-------------------------------------- | :-------- | :--------- | :-------- | :-------- | :-------- | | Tenant improvements and leasing costs | $2,571 | $2,619 | $1,241 | $2,498 | $2,040 | | Building improvements | $802 | $2,406 | $2,720 | $1,283 | $370 | | Recurring capital expenditures | $3,373 | $5,025 | $3,961 | $3,781 | $2,410 | | Development, redevelopment and other activities | - | $381 | $1,314 | $3,870 | $2,521 | | Total capital expenditures | $3,373 | $5,406 | $5,275 | $7,651 | $4,931 | Portfolio Information This section details ILPT's property portfolio, covering same property results, occupancy, leasing, tenant characteristics, and lease expiration schedules Same Property Results This section details ILPT's same property performance for Q1 2024 versus Q1 2023, showing increases in rental income, NOI, and Cash Basis NOI, with stable occupancy Same Property Results (Three Months Ended March 31) | Metric | 3/31/2024 | 3/31/2023 | % Change | | :--------------- | :-------- | :-------- | :------- | | Properties | 411 | 411 | 0% | | Square feet (thousands) | 59,893 | 59,951 | -0.1% | | Percent leased | 99.0% | 98.7% | +0.3% | | Rental income (thousands) | $112,235 | $110,195 | +1.85% | | NOI (thousands) | $86,085 | $84,427 | +2.0% | | Cash Basis NOI (thousands) | $82,229 | $80,395 | +2.3% | Occupancy and Leasing Summary This section details ILPT's Q1 2024 occupancy and leasing activities, highlighting strong renewals, significant rent increases, and a 6.2-year weighted average lease term Occupancy and Leasing Activity (as of and for the Three Months Ended March 31) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | | :----------------------------------------- | :-------- | :--------- | :-------- | :-------- | :-------- | | Percentage leased | 99.0% | 98.8% | 98.9% | 99.1% | 98.7% | | Leasing Activity (Sq. Ft. in thousands): | | | | | | | New leases | 90 | 276 | 94 | 494 | 36 | | Renewals | 1,785 | 1,220 | 694 | 1,091 | 1,107 | | Rent resets | 106 | 38 | - | 382 | - | | % Change in GAAP Rent (Weighted average by sq. ft.) | 38.3% | 19.7% | 13.5% | 29.6% | 15.1% | | Weighted Average Lease Term by Sq. Ft. (Years) | 6.2 | 6.7 | 4.1 | 8.9 | 8.9 | - New leases saw a 48.1% change in GAAP rent, renewals 38.5%, and rent resets 27.5% for Q1 2024[39] Tenant Credit Characteristics and Concentration This section outlines ILPT's tenant credit quality and concentration as of March 31, 2024, showing significant annualized rental revenues from investment-grade tenants, with FedEx Corporation as the largest tenant Tenant Credit Characteristics (% of Total Annualized Rental Revenues) | Tenant Credit Characteristics | % of Total Annualized Rental Revenues | | :---------------------------------------------------------------- | :------------------------------------ | | Investment grade rated | 18.4% | | Subsidiaries of investment grade rated parent entities | 36.9% | | Other leased Hawaii lands | 21.3% | | Subtotal investment grade rated, subsidiaries of investment grade rated parent entities and other leased Hawaii lands | 76.6% | | Other unrated or non-investment grade | 23.4% | Top Tenants with 1% or More of Total Annualized Rental Revenues (as of March 31, 2024) | Tenant | % of Total Annualized Rental Revenues | | :--------------------------------------- | :------------------------------------ | | FedEx Corporation / FedEx Ground Package System, Inc. | 28.9% | | Amazon.com Services, Inc. / Amazon.com Services LLC | 6.7% | | Home Depot U.S.A., Inc. | 2.2% | | American Tire Distributors, Inc. | 1.6% | | UPS Supply Chain Solutions, Inc. | 1.5% | | Restoration Hardware, Inc. | 1.5% | | Servco Pacific, Inc. | 1.4% | | Par Pacific Holdings Inc. | 1.2% | | DHL Group | 1.2% | | TD SYNNEX Corporation | 1.1% | | Berkshire Hathaway Inc. | 1.0% | Portfolio Lease Expiration and Reset Schedules This section details ILPT's lease expiration and rent reset schedules as of March 31, 2024, showing 6.8% of leased square feet and 4.6% of annualized rental revenues expire in 2024, with a 7.0-year weighted average remaining lease term Lease Expiration Schedule (as of March 31, 2024, in thousands) | Period/Year | No. of Leases | Leased Square Feet Expiring | % of Total Leased Square Feet Expiring | Annualized Rental Revenues Expiring | % of Total Annualized Rental Revenues Expiring | | :---------- | :------------ | :-------------------------- | :------------------------------------- | :---------------------------------- | :--------------------------------------------- | | 2024 | 32 | 4,017 | 6.8% | $20,420 | 4.6% | | 2025 | 34 | 4,355 | 7.3% | $26,598 | 6.0% | | 2026 | 32 | 4,174 | 7.0% | $29,664 | 6.7% | | 2027 | 38 | 8,738 | 14.7% | $53,275 | 12.1% | | 2028 | 41 | 6,066 | 10.2% | $45,274 | 10.3% | | Thereafter | 213 | 31,963 | 54.0% | $265,595 | 60.3% | | Total | 390 | 59,313 | 100.0% | $440,826 | 100.0% | - Weighted average remaining lease term is 7.0 years by square feet and 8.0 years by annualized rental revenues[43] Scheduled Rent Resets at Hawaii Properties (in thousands) | Period/Year | Reset sq. ft. | Annualized rental revenues | | :---------- | :------------ | :------------------------- | | 2024 | - | - | | 2025 | 204 | $1,002 | | 2026 | 154 | $1,315 | | 2027 | 89 | $795 | | 2028 | - | - | | Thereafter | 2,940 | $19,338 | Key Financial Data by Investment Portfolio This section breaks down key financial data for ILPT's wholly-owned properties (Mainland and Hawaii) and its consolidated joint venture, detailing individual performance metrics Portfolio Overview (as of and for the Three Months Ended March 31, 2024, in thousands) | Portfolio | Ownership % | Properties | Sq. ft. | Occupancy % | Total gross assets | Total debt (principal) | | :--------------------------- | :---------- | :--------- | :------ | :---------- | :----------------- | :--------------------- | | ILPT Wholly Owned Properties - Mainland | 100% | 90 | 22,119 | 98.9% | $1,814,875 | $1,722,070 | | ILPT Wholly Owned Properties - Hawaii | 100% | 226 | 16,729 | 99.0% | $727,437 | $862,930 | | Mountain Industrial REIT LLC | 61% | 94 | 20,981 | 99.2% | $3,154,781 | $1,736,478 | Selected Income Statement Data (Three Months Ended March 31, 2024, in thousands) | Portfolio | Rental income | NOI | Cash Basis NOI | Adjusted EBITDAre | Normalized FFO attributable to common shareholders | CAD attributable to common shareholders | | :--------------------------- | :------------ | :------ | :------------- | :---------------- | :------------------------------------------------- | :-------------------------------------- | | ILPT Wholly Owned Properties - Mainland | $37,987 | $29,622 | $28,661 | $27,285 | $(3,565) | $952 | | ILPT Wholly Owned Properties - Hawaii | $31,447 | $23,433 | $21,844 | $22,493 | $10,506 | $9,292 | | Mountain Industrial REIT LLC | $42,363 | $32,792 | $31,486 | $30,147 | $(166) | $(855) | Key Ratios (Annualized Cash Basis NOI / total gross assets) | Portfolio | Ratio | | :--------------------------- | :------ | | ILPT Wholly Owned Properties - Mainland | 6.3% | | ILPT Wholly Owned Properties - Hawaii | 12.0% | | Mountain Industrial REIT LLC | 4.0% | Joint Ventures This section provides detailed financial and operational information for ILPT's consolidated and unconsolidated joint ventures, highlighting their property portfolios, financial performance, and debt structures Consolidated Joint Venture - Mountain Industrial REIT LLC This section details financial and operational information for Mountain Industrial REIT LLC, a 61% owned consolidated joint venture, including major tenants, lease expirations, balance sheet, and operating results - ILPT owns a 61% interest in Mountain Industrial REIT LLC, which is consolidated in ILPT's financial statements[52] - The joint venture owns 94 properties across 27 states, totaling approximately 20,981 thousand square feet[52] Major Tenants by % of Total Annualized Rental Revenues Expiring (as of March 31, 2024) | Tenant | % of Total Annualized Rental Revenues Expiring | | :--------------------------------------- | :--------------------------------------------- | | FedEx Corporation / FedEx Ground Package System, Inc. | 1.5% (2024) | | Amazon.com Services, Inc. / Amazon.com Service | 7.1% (2025) | | Home Depot U.S.A., Inc. | 6.5% (2026) | | Berkshire Hathaway Inc. | 13.4% (2027) | | Techtronic Industries Company Limited | 10.4% (2028) | Consolidated Joint Venture Balance Sheets (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Total real estate properties, net | $2,677,182 | $2,696,385 | | Total assets | $2,991,343 | $3,026,194 | | Mortgage and notes payable, net | $1,735,458 | $1,736,426 | | Total liabilities | $1,771,327 | $1,774,380 | Operating Information of the Consolidated Joint Venture (100%, Three Months Ended March 31, in thousands) | Metric | 2024 | 2023 | | :---------------- | :-------- | :-------- | | Rental income | $42,363 | $43,066 | | Total expenses | $40,329 | $41,811 | | Interest expense | $(30,393) | $(28,472) | | Net loss | $(26,953) | $(27,518) | | Normalized FFO | $(270) | $1,033 | | CAD | $(1,400) | $(2,752) | | Adjusted EBITDAre | $30,147 | $29,519 | Unconsolidated Joint Venture - The Industrial Fund REIT LLC This section overviews The Industrial Fund REIT LLC, an unconsolidated joint venture with 22% ILPT ownership, detailing its properties, investment, operating results, and secured debt - ILPT holds a 22% ownership interest in The Industrial Fund REIT LLC, an unconsolidated joint venture[59] - The joint venture owns 18 properties across 12 states, totaling approximately 11,726 thousand square feet[59] - ILPT's investment in the unconsolidated joint venture is $116,093 thousand as of March 31, 2024[59] Operating Information (Three Months Ended March 31, in thousands) | Metric | 2024 | 2023 | | :--------------- | :-------- | :-------- | | Rental income | $19,025 | $17,411 | | Total expenses | $14,027 | $13,846 | | Interest expense | $(6,302) | $(5,197) | | Net loss | $(1,172) | $(1,573) | | Distributions received | $990 | $990 | Secured Debt (as of March 31, 2024, in thousands) | Type | Interest Rate | Maturity Date | Principal Balance | | :------------------------ | :------------ | :------------ | :---------------- | | Mortgage notes payable (secured by one property in Florida) | 6.96% | 11/01/2028 | $65,000 | | Mortgage notes payable (secured by six properties in four states) | 5.30% | 10/01/2027 | $123,700 | | Mortgage notes payable (secured by 11 properties in eight states) | 3.33% | 11/07/2029 | $350,000 | | Weighted average / total | 4.22% | | $538,700 | Appendix This section provides detailed calculations and reconciliations of non-GAAP financial measures, including NOI, Cash Basis NOI, EBITDA, FFO, Normalized FFO, and CAD Calculation and Reconciliation of NOI and Cash Basis NOI This section details the calculation and reconciliation of NOI and Cash Basis NOI from net loss for Q1 2024 and prior quarters, illustrating non-cash item adjustments Calculation of NOI and Cash Basis NOI (in thousands) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | | :-------------------------------------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Rental income | $112,235 | $108,895 | $110,142 | $108,043 | $110,258 | | Real estate taxes | $(15,861) | $(13,560) | $(14,926) | $(15,100) | $(16,467) | | Other operating expenses | $(10,322) | $(10,448) | $(9,907) | $(8,519) | $(9,318) | | NOI | $86,052 | $84,887 | $85,309 | $84,424 | $84,473 | | Non-cash straight line rent adjustments | $(3,489) | $(3,068) | $(3,414) | $(3,355) | $(3,762) | | Lease value amortization | $(367) | $(366) | $(252) | $(242) | $(270) | | Cash Basis NOI | $82,196 | $81,453 | $81,643 | $80,827 | $80,441 | - The reconciliation from net loss to NOI and Cash Basis NOI involves adding back items like interest expense, depreciation and amortization, and general and administrative expenses, while subtracting interest and other income[63] Reconciliation of NOI to Same Property NOI and Calculation of Same Property Cash Basis NOI This section reconciles total NOI to Same Property NOI and calculates Same Property Cash Basis NOI for Q1 2024 and 2023, adjusting for non-same properties and non-cash rent items Reconciliation of NOI to Same Property NOI and Calculation of Same Property Cash Basis NOI (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | NOI | $86,052 | $84,473 | | Less: NOI of properties not included in same property results | $33 | $(46) | | Same property NOI | $86,085 | $84,427 | | Less: Non-cash straight line rent adjustments | $(3,489) | $(3,762) |\ | Less: Lease value amortization | $(367) | $(270) | | Same property Cash Basis NOI | $82,229 | $80,395 | Calculation of EBITDA, EBITDAre and Adjusted EBITDAre This section details the calculation of EBITDA, EBITDAre, and Adjusted EBITDAre for Q1 2024 and prior quarters, starting from net loss and applying Nareit-defined adjustments Calculation of EBITDA, EBITDAre and Adjusted EBITDAre (in thousands) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | | :-------------------------------------- | :--------- | :--------- | :--------- | | Net loss | $(33,902) | $(41,402) | $(36,191) | | Plus: interest expense | $73,230 | $72,979 | $72,941 | | Plus: income tax expense (benefit) | $33 | $(9) | $51 | | Plus: depreciation and amortization | $43,577 | $44,450 | $43,912 | | EBITDA | $82,938 | $76,018 | $80,713 | | Equity in (earnings) losses of unconsolidated joint venture | $(1,723) | $6,521 | $(719) | | Share of EBITDAre from unconsolidated joint venture | $2,846 | $2,717 | $2,724 | | EBITDAre | $84,061 | $82,474 | $82,718 | | Plus: general and administrative expense paid in common shares | $339 | $311 | $476 | | Adjusted EBITDAre | $84,400 | $83,072 | $83,194 | Calculation of FFO, Normalized FFO and CAD This section provides the calculation of FFO, Normalized FFO, and CAD attributable to common shareholders for Q1 2024 and prior quarters, detailing adjustments from net loss Calculation of FFO and Normalized FFO (in thousands) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | | :----------------------------------------- | :-------- | :--------- | :-------- | | Net loss attributable to common shareholders | $(23,403) | $(31,240) | $(26,112) | | Depreciation and amortization | $43,577 | $44,450 | $43,912 | | Share of FFO from unconsolidated joint venture | $1,459 | $1,367 | $1,446 | | FFO adjustments attributable to noncontrolling interest | $(10,460) | $(10,517) | $(10,582) |\ | FFO attributable to common shareholders | $9,450 | $7,799 | $7,945 | | Normalized FFO attributable to common shareholders | $9,450 | $8,086 | $7,945 | Calculation of CAD (in thousands) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | | :----------------------------------------- | :-------- | :--------- | :-------- | | Normalized FFO attributable to common shareholders | $9,450 | $8,086 | $7,945 | | Plus (minus): Non-cash interest expense | $13,859 | $12,883 | $12,884 | | Non-cash revenues | $(3,856) | $(3,434) | $(3,666) | | Recurring capital expenditures | $(3,373) | $(5,025) | $(3,961) | | Principal amortization | $(4,466) | $(4,425) | $(4,385) | | Distributions from unconsolidated joint venture | $990 | $990 | $990 | | CAD attributable to common shareholders | $11,928 | $8,948 | $10,505 | Company Profile, Research Coverage and Governance Information This section overviews ILPT's company profile, covering market index inclusions, management by The RMR Group, and details on its Board of Trustees and executive officers Company Profile, Research Coverage and Governance Information This section overviews ILPT's company profile, covering market index inclusions, management by The RMR Group, and details on its Board of Trustees and executive officers - ILPT is included in 117 market indices and comprises more than 1% of several key indices, including Invesco S&P SmallCap High Dividend Low Volatility ETF INAV Index and Bloomberg US Micro Cap Real Estate Price Return Index[75] - ILPT is managed by The RMR Group (Nasdaq: RMR), an alternative asset management company with over $41 billion in assets under management as of March 31, 2024[76] - ILPT believes RMR provides management services at a lower cost than if it were self-managed, offering a competitive advantage due to RMR's depth of management and experience[76] - Executive Officers include Yael Duffy (President and Chief Operating Officer) and Tiffany R. Sy (Chief Financial Officer and Treasurer)[77] Non-GAAP Financial Measures and Certain Definitions This section defines and explains ILPT's non-GAAP financial measures, including FFO, Normalized FFO, EBITDA, EBITDAre, Adjusted EBITDAre, NOI, Cash Basis NOI, and CAD, plus other key report definitions Non-GAAP Financial Measures and Certain Definitions This section defines and explains ILPT's non-GAAP financial measures, including FFO, Normalized FFO, EBITDA, EBITDAre, Adjusted EBITDAre, NOI, Cash Basis NOI, and CAD, plus other key report definitions - ILPT presents non-GAAP financial measures including FFO, Normalized FFO, EBITDA, EBITDAre, Adjusted EBITDAre, NOI, same property NOI, Cash Basis NOI, and same property Cash Basis NOI as supplemental measures of operating performance[81] - NOI is defined as rental income less property operating expenses, excluding depreciation and amortization. Cash Basis NOI further excludes non-cash straight line rent adjustments, lease value amortization, and lease termination fees[82] - FFO attributable to common shareholders is calculated based on Nareit's definition, adjusting net loss for real estate impairment/gains/losses, equity in unconsolidated joint venture earnings, and real estate depreciation/amortization[83] - CAD (Cash Available for Distribution) is defined as Normalized FFO minus ILPT's proportionate share of Normalized FFO from unconsolidated joint venture properties, plus operating cash flow distributions received from the unconsolidated joint venture, recurring capital expenditures, and other adjustments[84] - EBITDAre (EBITDA for real estate) is calculated based on Nareit's definition, including ILPT's proportionate share of EBITDAre from unconsolidated joint venture properties and excluding gains/losses on real estate sales, impairment, and equity in unconsolidated joint venture[85] - Key definitions include Annualized dividend yield, Annualized rental revenues, Building improvements, Development, redevelopment and other activities, GAAP, Gross book value of real estate assets, ILPT Wholly Owned Properties, Leased square feet, Leasing costs, Leasing costs and concession commitments, Mountain JV, Net debt, Non-cash interest expense, Percent change in GAAP rent, Rolling four quarter CAD, Same property, SOFR, Square feet, Tenant improvements, Total gross assets, and Total market capitalization[87][88][89][91][92][93][94][95][96][97] Warning Concerning Forward-Looking Statements This section warns that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations Warning Concerning Forward-Looking Statements This section warns that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations - The presentation contains forward-looking statements that are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from expected future results[99][100] - These risks include ILPT's ability to reduce leverage, renew leases, compete for tenancies, raise capital, pay debt, maintain REIT qualification, and operate under unfavorable market and commercial real estate industry conditions[100] - ILPT does not intend to update or change any forward-looking statements as a result of new information, future events, or otherwise, except as required by law[101]