FIRST INDUSTRIAL LP - 10-Q Quarterly Report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


/X/		Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the quarterly period ended September 30, 2003
/ /		Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 333-21873

FIRST INDUSTRIAL, L.P.

(Exact Name of Registrant as Specified in its Charter)


Delaware		36-3924586
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

311 S. Wacker Drive, Suite 4000, Chicago, Illinois 60606
(Address of Principal Executive Offices)

(312) 344-4300
(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No / /

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes /X/ No / /

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
		CONSOLIDATED BALANCE SHEETS
		CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
		CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
		CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
PART II. OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 2. Changes in Securities
	Item 3. Defaults Upon Senior Securities
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 5. Other Information
	Item 6. Exhibits and Report on Form 8-K
SIGNATURE
EXHIBIT INDEX
Certification of Chief Executive Officer
Certification of Chief Financial Officer
906 Cert. of Principal Executive & Financial Offc.

FIRST INDUSTRIAL, L.P.

Form 10-Q
For the Period Ended September 30, 2003

INDEX


			PAGE

Part I: FINANCIAL INFORMATION
	Item 1. Financial Statements
		Consolidated Balance Sheets as of September 30, 2003 and December 31, 2002		2
		Consolidated Statements of Operations and Comprehensive Income for the Nine Months Ended September 30, 2003 and September 30, 2002		3
		Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended September 30, 2003 and September 30, 2002		4
		Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2003 and September 30, 2002		5
		Notes to Consolidated Financial Statements		6-19
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			20-30
	Item 3. Quantitative and Qualitative Disclosures About Market Risk			31
	Item 4. Controls and Procedures			31
Part II: OTHER INFORMATION
	Item 1. Legal Proceedings			32
	Item 2. Changes in Securities			32
	Item 3. Defaults Upon Senior Securities			32
	Item 4. Submission of Matters to a Vote of Security Holders			32
	Item 5. Other Information			32
	Item 6. Exhibits and Reports on Form 8-K			32
SIGNATURE				34
EXHIBIT INDEX				35

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FIRST INDUSTRIAL, L.P.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)


					September 30,			December 31,
					2003			2002

				ASSETS
Assets:
	Investment in Real Estate:
		Land			$	374,438		$	363,543
		Buildings and Improvements				1,843,719			1,829,922
		Furniture, Fixtures and Equipment				1,118			1,174
		Construction in Progress				113,894			122,331
		Less: Accumulated Depreciation				(283,848	)		(261,375	)

			Net Investment in Real Estate			2,049,321			2,055,595

	Real Estate Held for Sale, Net of Accumulated Depreciation and Amortization of $338 at September 30, 2003 and $2,135 at December 31, 2002					6,817			7,040
	Investments in and Advances to Other Real Estate Partnerships					364,343			377,776
	Cash and Cash Equivalents					6,036			—
	Restricted Cash					58,255			28,350
	Tenant Accounts Receivable, Net					9,386			9,523
	Investments in Joint Ventures					14,086			12,545
	Deferred Rent Receivable					11,819			12,765
	Deferred Financing Costs, Net					10,187			11,449
	Prepaid Expenses and Other Assets, Net					102,123			70,762

			Total Assets		$	2,632,373		$	2,585,805

				LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
	Mortgage Loans Payable, Net				$	43,628		$	19,909
	Senior Unsecured Debt, Net					1,212,079			1,211,860
	Unsecured Line of Credit					188,600			170,300
	Accounts Payable and Accrued Expenses					77,542			66,874
	Rents Received in Advance and Security Deposits					24,346			25,538
	Distributions Payable					31,661			31,106

			Total Liabilities			1,577,856			1,525,587

Commitments and Contingencies						—			—
Partners’ Capital:
	General Partner Preferred Units (100,000 units issued and outstanding at September 30, 2003 and December 31, 2002)					240,697			240,697
	General Partner Units (39,459,133 and 38,598,321 units issued and outstanding at September 30, 2003 and December 31, 2002, respectively)					678,818			665,647
	Unamortized Value of General Partnership Restricted Units					(20,563	)		(4,307	)
	Limited Partners’ Units (6,762,285 and 6,811,956 units issued and outstanding at September 30, 2003 and December 31, 2002, respectively)					165,621			168,740
	Accumulated Other Comprehensive Loss					(10,056	)		(10,559	)

			Total Partners’ Capital			1,054,517			1,060,218

			Total Liabilities and Partners’ Capital		$	2,632,373		$	2,585,805

The accompanying notes are an integral part of the financial statements.

FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Dollars in thousands, except per Unit data)
(Unaudited)


			Nine Months			Nine Months
			Ended			Ended
			September 30, 2003			September 30, 2002

Revenues:
	Rental Income		$	158,178		$	150,571
	Tenant Recoveries and Other Income			54,100			48,971

		Total Revenues		212,278			199,542

Expenses:
	Real Estate Taxes			33,848			31,462
	Repairs and Maintenance			16,646			13,367
	Property Management			8,203			7,329
	Utilities			6,277			4,972
	Insurance			2,579			1,468
	Other			5,360			4,956
	General and Administrative			20,282			13,726
	Interest Expense			71,506			64,304
	Amortization of Deferred Financing Costs			1,316			1,414
	Depreciation and Other Amortization			49,363			42,339
	Loss From Early Retirement of Debt			—			888

		Total Expenses		215,380			186,225

(Loss) Income from Continuing Operations Before Equity in Income of Other Real Estate Partnerships, Equity in Income of Joint Ventures and Gain on Sale of Real Estate				(3,102	)		13,317
Equity in Income of Other Real Estate Partnerships				31,788			40,245
Equity in Income of Joint Ventures				705			1,135

Income from Continuing Operations				29,391			54,697
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $54,621 and $13,120 for the Nine Months Ended September 30, 2003 and 2002, respectively)				60,105			29,089

Income Before Gain on Sale of Real Estate				89,496			83,786
Gain on Sale of Real Estate				7,330			18,009

Net Income				96,826			101,795
Less: Preferred Unit Distributions				(15,132	)		(18,388	)
Less: Redemption of Series B Preferred Units				—			(3,707	)

Net Income Available to Unitholders			$	81,694		$	79,700

Income from Continuing Operations Available to Unitholders Per Weighted Average Unit Outstanding:
		Basic	$	0.47		$	1.09

		Diluted	$	0.47		$	1.09

Net Income Available to Unitholders Per Weighted Average Unit Outstanding:
		Basic	$	1.78		$	1.72

		Diluted	$	1.78		$	1.71

Net Income			$	96,826		$	101,795
Other Comprehensive Income:
		Settlement of Interest Rate Protection Agreement		—			1,772
		Mark-to-Market of Interest Rate Protection Agreements and Interest Rate Swap Agreements		357			(259	)
		Amortization of Interest Rate Protection Agreements		146			130

Comprehensive Income			$	97,329		$	103,438

The accompanying notes are an integral part of the financial statements.

FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Dollars in thousands, except per Unit data)
(Unaudited)


			Three Months			Three Months
			Ended			Ended
			September 30, 2003			September 30, 2002

Revenues:
	Rental Income		$	54,620		$	50,229
	Tenant Recoveries and Other Income			18,891			17,282

		Total Revenues		73,511			67,511

Expenses:
	Real Estate Taxes			11,921			10,161
	Repairs and Maintenance			5,242			4,892
	Property Management			2,520			2,161
	Utilities			1,997			1,747
	Insurance			905			528
	Other			1,981			1,707
	General and Administrative			6,525			3,759
	Interest Expense			23,881			23,069
	Amortization of Deferred Financing Costs			442			489
	Depreciation and Other Amortization			17,690			14,473

		Total Expenses		73,104			62,986

Income from Continuing Operations Before Equity in Income of Other Real Estate Partnerships, Equity in Income of Joint Ventures and Gain on Sale of Real Estate				407			4,525
Equity in Income of Other Real Estate Partnerships				6,516			7,182
Equity in Income of Joint Ventures				262			559

Income from Continuing Operations				7,185			12,266
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $21,837 and $6,466 for the Three Months Ended September 30, 2003 and 2002, respectively)				23,211			11,759

Income Before Gain on Sale of Real Estate				30,396			24,025
Gain on Sale of Real Estate				4,641			8,175

Net Income				35,037			32,200
Less: Preferred Unit Distributions				(5,044	)		(5,044	)

Net Income Available to Unitholders			$	29,993		$	27,156

Income from Continuing Operations Available to Unitholders Per Weighted Average Unit Outstanding:
		Basic	$	0.15		$	0.33

		Diluted	$	0.15		$	0.33

Net Income Available to Unitholders Per Weighted Average Unit Outstanding:
		Basic	$	0.65		$	0.58

		Diluted	$	0.65		$	0.58

Net Income			$	35,037		$	32,200
Other Comprehensive Income:
		Mark-to-Market of Interest Rate Swap Agreements		46			(80	)
		Amortization of Interest Rate Protection Agreements		50			5

Comprehensive Income			$	35,133		$	32,125

The accompanying notes are an integral part of the financial statements.

FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)


				Nine Months Ended			Nine Months Ended
				September 30, 2003			September 30, 2002

CASH FLOWS FROM OPERATING ACTIVITIES:
	Net Income			$	96,826		$	101,795
	Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
		Depreciation			43,879			41,216
		Amortization of Deferred Financing Costs			1,316			1,414
		Other Amortization			11,651			10,802
		Provision for Bad Debt			70			—
		Equity in Income of Joint Ventures			(705	)		(1,135	)
		Distributions from Joint Ventures			705			1,135
		Gain on Sale of Real Estate			(61,951	)		(31,129	)
		Loss From Early Retirement of Debt			—			888
		Equity in Income of Other Real Estate Partnerships			(31,788	)		(40,245	)
		Distributions from Investment in Other Real Estate Partnerships			31,788			40,245
		Increase in Tenant Accounts Receivable and Prepaid Expenses and Other Assets, Net			(27,683	)		(16,758	)
		Increase in Deferred Rent Receivable			(976	)		(1,942	)
		Increase (Decrease) in Accounts Payable and Accrued and Accrued Expenses Rents Received in Advance and Security Deposits			1,303			(3,472	)

			Net Cash Provided by Operating Activities		64,435			102,814

CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchases of and Additions to Investment in Real Estate				(195,546	)		(193,593	)
	Net Proceeds from Sales of Investments in Real Estate				243,131			229,739
	Investments in and Advances to Other Real Estate Partnerships				(42,111	)		(90,836	)
	Distributions from Other Real Estate Partnerships in Excess of Equity in Income				55,544			68,368
	Contributions to and Investments in Joint Ventures				(4,195	)		(6,654	)
	Distributions from Joint Ventures				2,199

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