FIRST INDUSTRIAL LP - FORM 8-K - January 6, 2015



 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM 8-K
________________________

Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

January 6, 2015 (December 30, 2014)
Date of Report (Date of earliest event reported)
________________________
FIRST INDUSTRIAL, L.P.
(Exact name of registrant as specified in its charter)
________________________
Delaware
333-21873
39-3924586
(State or other jurisdiction of
incorporation or organization)
(Commission File Number)
(I.R.S. Employer
Identification No.)

311 S. Wacker Drive, Suite 3900
Chicago, Illinois 60606
(Address of principal executive offices, zip code)
(312) 344-4300
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 



Item 2.01    Completion of Acquisition or Disposition of Assets.

On December 30, 2014, First Industrial, L.P. (the "Operating Partnership,") sold one industrial property located in Cincinnati, Ohio, comprising approximately 0.5 million square feet of gross leasable area. Gross proceeds from the sale of the industrial property was approximately $7.3 million. The buyer is a real estate investor and is not affiliated with the Operating Partnership.

Item 9.01    Financial Statements and Exhibits.

(b)    Pro forma financial information. The following financial information is submitted at the end of this Current Report on Form 8-K and is filed herewith and incorporated herein by reference:

Summary of Unaudited Pro Forma Consolidated Financial Statements:
Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2014
Unaudited Pro Forma Consolidated Statements of Operations for the Nine Months Ended September 30, 2014 and the Years Ended December 31, 2013, 2012 and 2011
Notes to Unaudited Pro Forma Consolidated Financial Statements

2


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
FIRST INDUSTRIAL, L.P.
 
By:
FIRST INDUSTRIAL REALTY TRUST, INC.
 
 
Its Sole General Partner
 
By:
/S/    SCOTT A. MUSIL
 
 
Scott A. Musil
Chief Financial Officer
(Principal Financial Officer)
Date: January 6, 2015

3


FIRST INDUSTRIAL, L.P.
SUMMARY OF UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

On December 30, 2014, First Industrial, L.P. (the "Operating Partnership,") sold one industrial property located in Cincinnati, Ohio, comprising approximately 0.5 million square feet of gross leasable area. Gross proceeds from the sale of the industrial property was approximately $7.3 million. The buyer is a real estate investor and is not affiliated with the Operating Partnership.

The following unaudited pro forma consolidated balance sheet of the Operating Partnership at September 30, 2014 is presented as if the sale of the industrial property had occurred on September 30, 2014. The unaudited pro forma consolidated statements of operations for the nine months ended September 30, 2014 and for the years ended December 31, 2013, 2012 and 2011, are presented as if the sale of the industrial property had occurred on January 1, 2011. The unaudited pro forma consolidated financial statements include all necessary adjustments to reflect the effects of the above transaction.

This pro forma consolidated financial information is presented for information purposes only and is not necessarily indicative of what the Operating Partnership's financial results would have been for the periods presented, nor do they purport to represent the future financial results of the Operating Partnership. This pro forma consolidated financial information should be read in conjunction with the Operating Partnership's financial statements as filed with the Securities and Exchange Commission on Form 10-Q for the nine months ended September 30, 2014 and on Form 10-K for the year ended December 31, 2013.

4


FIRST INDUSTRIAL, L.P.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2014
 
Historical (A)
 
Pro Forma Adjustments
 
Pro Forma
 
(In thousands)
ASSETS
 
 
 
 
 
Assets:
 
 
 
 
 
Investment in Real Estate:
 
 
 
 
 
Land
$
611,228

 
$
(952
)
(B)
$
610,276

Buildings and Improvements
2,130,891

 
(10,587
)
(B)
2,120,304

Construction in Progress
38,066

 
—

 
38,066

Less: Accumulated Depreciation
(685,678
)
 
5,486

(B)
(680,192
)
Net Investment in Real Estate
2,094,507

 
(6,053
)
 
2,088,454

Real Estate and Other Assets Held for Sale, Net of Accumulated Depreciation and Amortization
15,413

 
—

 
15,413

Investments in and Advances to Other Real Estate Partnerships
201,935

 
—

 
201,935

Cash and Cash Equivalents
13,026

 
6,641

(C)
19,667

Tenant Accounts Receivable, Net
5,057

 
—

 
5,057

Investments in Joint Venture
84

 
—

 
84

Deferred Rent Receivable, Net
49,368

 
(67
)
(B)
49,301

Deferred Financing Costs, Net
10,584

 
—

 
10,584

Deferred Leasing Intangibles, Net
27,841

 
—

 
27,841

Prepaid Expenses and Other Assets, Net
76,340

 
(219
)
(B)
76,121

Total Assets
$
2,494,155

 
$
302

 
$
2,494,457

LIABILITIES AND PARTNERS' CAPTIAL
 
 
 
 
 
Liabilities:
 
 
 
 
 
Indebtedness:
 
 
 
 
 
Mortgage Loans Payable, Net
$
521,304

 
$
—

 
$
521,304

Senior Unsecured Notes, Net
364,837

 
—

 
364,837

Unsecured Term Loan
200,000

 
—

 
200,000

Unsecured Credit Facility
176,000

 
—

 
176,000

Accounts Payable, Accrued Expenses and Other Liabilities
77,184

 
(167
)
(B)
77,017

Deferred Leasing Intangibles, Net
11,266

 
—

 
11,266

Rents Received in Advance and Security Deposits
29,083

 
(199
)
(B)
28,884

Dividend Payable
11,886

 
—

 
11,886

Total Liabilities
1,391,560

 
(366
)
 
1,391,194

Commitments and Contingencies
—

 
—

 
—

Partners' Capital:
 
 
 
 
 
General Partner Preferred Units
—

 
—

 
—

General Partner Units
1,024,806

 
642

(D)
1,025,448

Limited Partners Units
80,905

 
26

(D)
80,931

Accumulated Other Comprehensive Loss
(3,116
)
 
—

 
(3,116
)
Total Partners’ Capital
1,102,595

 
668

 
1,103,263

Total Liabilities and Partners’ Capital
$
2,494,155

 
$
302

 
$
2,494,457

The accompanying notes are an integral part of the unaudited pro forma consolidated financial statements.

5


FIRST INDUSTRIAL, L.P.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 
 
Historical (A)
 
Pro Forma Adjustments (B)
 
Pro Forma
 
(In thousands except per share data)
Revenues:
 
 
 
 
 
Rental Income
$
169,496

 
$
(757
)
 
$
168,739

Tenant Recoveries and Other Income
56,414

 
(294
)
 
56,120

Total Revenues
225,910

 
(1,051
)
 
224,859

Expenses:
 
 
 
 
 
Property Expenses
76,077

 
(399
)
 
75,678

General and Administrative
17,946

 
—

 
17,946

Depreciation and Other Amortization
75,237

 
(376
)
 
74,861

Total Expenses
169,260

 
(775
)
 
168,485

Other Income (Expense):
 
 
 
 
 
Interest Income
2,114

 
—

 
2,114

Interest Expense
(51,522
)
 
—

 
(51,522
)
Amortization of Deferred Financing Costs
(2,235
)
 
—

 
(2,235
)
Loss from Retirement of Debt
(522
)
 
—

 
(522
)
Total Other Income (Expense)
(52,165
)
 
—

 
(52,165
)
Income from Continuing Operations Before Equity in Income of Other Real Estate Partnerships, Equity in Income of Joint Ventures and Income Tax Provision
4,485

 
(276
)
 
4,209

Equity in Income of Other Real Estate Partnerships
10,385

 
—

 
10,385

Equity in Income of Joint Ventures
3,508

 
—

 
3,508

Income Tax Provision
(192
)
 
—

 
(192
)
Income from Continuing Operations
18,186

 
(276
)
 
17,910

Income from Continuing Operations Allocable to Participating Securities
(67
)
 
—

 
(67
)
Preferred Unit Distributions
(1,019
)
 
—

 
(1,019
)
Redemption of Preferred Units
(1,462
)
 
—

 
(1,462
)
Income from Continuing Operations Available to Unitholders
$
15,638

 
$
(276
)
 
$
15,362

 
 
 
 
 
 
Income from Continuing Operations Available to Unitholders - Basic and Diluted Earnings Per Unit
$
0.14

 
 
 
$
0.13

Weighted Average Units Outstanding - Basic
114,346

 
 
 
114,346

Weighted Average Units Outstanding - Diluted
114,788

 
 
 
114,788

The accompanying notes are an integral part of the unaudited pro forma consolidated financial statements.

6


FIRST INDUSTRIAL, L.P.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2013 
 
Historical (A)
 
Pro Forma Adjustments (B)
 
Pro Forma
 
(In thousands except per share data)
Revenues:
 
 
 
 
 
Rental Income
$
222,102

 
$
(828
)
 
$
221,274

Tenant Recoveries and Other Income
66,834

 
(376
)
 
66,458

Total Revenues
288,936

 
(1,204
)
 
287,732

Expenses:
 
 
 
 
 
Property Expenses
95,104

 
(508
)
 
94,596

General and Administrative
23,106

 
—

 
23,106

Impairment of Real Estate
1,047

 
(1,047
)
 
—

Depreciation and Other Amortization
98,824

 
(478
)
 
98,346

Total Expenses
218,081

 
(2,033
)
 
216,048

Other Income (Expense):
 
 
 
 
 
Interest Income
2,438

 
—

 
2,438

Interest Expense
(68,857
)
 
—

 
(68,857
)
Amortization of Deferred Financing Costs
(3,038
)
 
—

 
(3,038
)
Mark-to-Market Gain on Interest Rate Protection Agreements
52

 
—

 
52

Loss from Retirement of Debt
(6,423
)
 
—

 
(6,423
)
Total Other Income (Expense)
(75,828
)
 
—

 
(75,828
)
Loss from Continuing Operations Before Equity in Income of Other Real Estate Partnerships, Equity in Income of Joint Ventures and Income Tax Benefit
(4,973
)
 
829

 
(4,144
)
Equity in Income of Other Real Estate Partnerships
11,603

 
—

 
11,603

Equity in Income of Joint Ventures
136

 
—

 
136

Income Tax Benefit
213

 
—

 
213

Income from Continuing Operations
6,979

 
829

 
7,808

Gain on Sale of Real Estate
1,030

 
—

 
1,030

Provision for Income Taxes Allocable to Gain on Sale of Real Estate
(210
)
 
—

 
(210
)
Preferred Unit Distributions
(8,733
)
 
—

 
(8,733
)
Redemption of Preferred Units
(5,667
)
 
—

 
(5,667
)
Loss from Continuing Operations Available to Unitholders
$
(6,601
)
 
$
829

 
$
(5,772
)
 
 
 
 
 
 
Loss from Continuing Operations Available to Unitholders - Basic and Diluted Earnings Per Unit
$
(0.06
)
 
 
 
$
(0.05
)
Weighted Average Units Outstanding - Basic and Diluted
111,646

 
 
 
111,646

The accompanying notes are an integral part of the unaudited pro forma consolidated financial statements.

7


FIRST INDUSTRIAL, L.P.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2012
 
Historical (A)
 
Pro Forma Adjustments (B)
 
Pro Forma
 
(In thousands except per share data)
Revenues:
 
 
 
 
 
Rental Income
$
214,595

 
$
(586
)
 
$
214,009

Tenant Recoveries and Other Income
60,848

 
(184
)
 
60,664

Total Revenues
275,443

 
(770
)
 
274,673

Expenses:
 
 
 
 
 
Property Expenses
88,605

 
(400
)
 
88,205

General and Administrative
24,959

 
—

 
24,959

Impairment of Real Estate
(20
)
 
—

 
(20
)
Depreciation and Other Amortization
100,683

 
(341
)
 
100,342

Total Expenses
214,227

 
(741
)
 
213,486

Other Income (Expense):
 
 
 
 
 
Interest Income
2,940

 
—

 
2,940

Interest Expense
(77,794
)
 
—

 
(77,794
)
Amortization of Deferred Financing Costs
(3,252
)
 
—

 
(3,252
)
Mark-to-Market Loss on Interest Rate Protection Agreements
(328
)
 
—

 
(328
)
Loss from Retirement of Debt
(9,684
)
 
—

 
(9,684
)
Total Other Income (Expense)
(88,118
)
 
—

 
(88,118
)
Loss from Continuing Operations Before Equity in Income of Other Real Estate Partnerships, Equity in Income of Joint Ventures, Gain on Change in Control of Interests and Income Tax Provision
(26,902
)
 
(29
)
 
(26,931
)
Equity in Income of Other Real Estate Partnerships
7,756

 
—

 
7,756

Equity in Income of Joint Ventures
1,559

 
—

 
1,559

Gain on Change in Control of Interests
776

 
—

 
776

Income Tax Provision
(5,522
)
 
—

 
(5,522
)
Loss from Continuing Operations
(22,333
)
 
(29
)
 
(22,362
)
Gain on Sale of Real Estate
3,777

 
—

 
3,777

Preferred Unit Distributions
(18,947
)
 
—

 
(18,947
)
Redemption of Preferred Units
(1,804
)
 
—

 
(1,804
)
Loss from Continuing Operations Available to Unitholders
$
(39,307
)
 
$
(29
)
 
$
(39,336
)
 
 
 
 
 
 
Loss from Continuing Operations Available to Unitholders - Basic and Diluted Earnings Per Unit
$
(0.41
)
 
 
 
$
(0.41
)
Weighted Average Units Outstanding - Basic and Diluted
96,509

 
 
 
96,509

The accompanying notes are an integral part of the unaudited pro forma consolidated financial statements.

8


FIRST INDUSTRIAL, L.P.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2011 
 
Historical (A)
 
Pro Forma Adjustments (B)
 
Pro Forma
 
(In thousands except per share data)
Revenues:
 
 
 
 
 
Rental Income
$
203,602

 
$
(599
)
 
$
203,003

Tenant Recoveries and Other Income
60,224

 
(192
)
 
60,032

Total Revenues
263,826

 
(791
)
 
263,035

Expenses:
 
 
 
 
 
Property Expenses
89,772

 
(372
)
 
89,400

General and Administrative
20,508

 
—

 
20,508

Restructuring Costs
1,553

 
—

 
1,553

Impairment of Real Estate
(8,293
)
 
98

 
(8,195
)
Depreciation and Other Amortization
102,485

 
(279
)
 
102,206

Total Expenses
206,025

 
(553
)
 
205,472

Other Income (Expense):
 
 
 
 
 
Interest Income
3,990

 
—

 
3,990

Interest Expense
(95,103
)
 
—

 
(95,103
)
Amortization of Deferred Financing Costs
(3,785
)
 
—

 
(3,785
)
Mark-to-Market Loss on Interest Rate Protection Agreements
(1,718
)
 
—

 
(1,718
)
Loss from Retirement of Debt
(5,299
)
 
—

 
(5,299
)
Foreign Currency Exchange Loss
(332
)
 
—

 
(332
)
Total Other Income (Expense)
(102,247
)
 
—

 
(102,247
)
Loss from Continuing Operations Before Equity in Other Real Estate Partnerships, Equity in Income of Joint Ventures, Gain on Change in Control of Interests and Income Tax Provision
(44,446
)
 
(238
)
 
(44,684
)
Equity in Income of Other Real Estate Partnerships
11,891

 
—

 
11,891

Equity in Income of Joint Ventures
980

 
—

 
980

Gain on Change in Control of Interests
689

 
—

 
689

Income Tax Provision
(450
)
 
—

 
(450
)
Loss from Continuing Operations
(31,336
)
 
(238
)
 
(31,574
)
Gain on Sale of Real Estate
1,370

 
—

 
1,370

Provision for Income Taxes Allocable to Gain on Sale of Real Estate
(452
)
 
—

 
(452
)
Preferred Unit Distributions
(19,565
)
 
—

 
(19,565
)
Loss from Continuing Operations Available to Unitholders
$
(49,983
)
 
$
(238
)
 
$
(50,221
)
 
 
 
 
 
 
Loss from Continuing Operations Available to Unitholders - Basic and Diluted Earnings Per Unit
$
(0.58
)
 
 
 
$
(0.58
)
Weighted Average Units Outstanding - Basic and Diluted
85,913

 
 
 
85,913

The accompanying notes are an integral part of the unaudited pro forma consolidated financial statements.

9


FIRST INDUSTRIAL, L.P.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

1.    Adjustments to Pro Forma Consolidated Balance Sheet

(A)    Represents the Operating Partnership's historical consolidated balance sheet as of September 30, 2014, which was derived from the Operating Partnership's quarterly report on Form 10-Q for the nine months ended September 30, 2014.

(B)    Represents the Operating Partnership's sale of the industrial property and the necessary adjustments to eliminate the impact of the assets and liabilities associated with the sold industrial property.

(C)    Represents the net proceeds received from the sale of the industrial property.

(D)    Represents the Operating Partnership's sale of the industrial property and the related gain on sale of real estate.

2.    Adjustments to Pro Forma Consolidated Statements of Operations

(A)    Represents the Operating Partnership's historical consolidated statements of operations for the nine months ended September 30, 2014 and the years ended December 31, 2013, 2012 and 2011, which were derived from the Operating Partnership's quarterly report on Form 10-Q for the nine months ended September 30, 2014 and the annual report on Form 10-K for the year ended December 31, 2013, respectively.

(B)    Represents the Operating Partnership's sale of the industrial property and the necessary adjustments to eliminate the impact of historical rental income, tenant recoveries and other income, property expenses, impairment of real estate and deprecation and other amortization associated with the sold industrial property. The adjustments exclude the effect of the gain on sale of real estate that would have been recognized on the sale of the industrial property, as this represents a non-recurring transaction and is excluded for pro forma income statement purposes.

10

FIRST INDUSTRIAL LP Reports