MONMOUTH REAL ESTATE INVESTMENT CORP - FORM 8-K - EX-99 - August 1, 2018

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8-K - MONMOUTH REAL ESTATE INVESTMENT CORPform8-k.htm

 

 

 

 

 

 

 

Table of Contents  

 

  Page
Consolidated Balance Sheets 3
   
Consolidated Statements of Income 4
   
Net Income, FFO, Core FFO, AFFO, EBITDAre, Adjusted EBITDA and NOI Reconciliations 5
   
Financial Highlights 6
   
Same Property Statistics 7
   
Consolidated Statements of Cash Flows 9
   
Capital Structure and Leverage Ratios 10
   
Debt Maturity 13
   
Securities Portfolio Performance 13
   
Property Table by Tenant 14
   
Property Table by State 15
   
Lease Expirations 16
   
Recent Acquisitions 17
   
Property Table 18
   
Definitions 20
   
Press Release Dated August 1, 2018 21

 

The statement of operations and supplemental statement of operations provided in this supplemental information package present funds from operations, core funds from operations, adjusted funds from operations, net operating income, EBITDAre and Adjusted EBITDA, which are REIT industry financial measures that are not calculated in accordance with accounting principles generally accepted in the United States. Please see page 20 for a definition of these supplemental performance measures. Please see the supplemental statement of operations reconciliation for a reconciliation of certain captions in the supplemental statement of operations reported in this supplemental information package to the statement of operations as reported in the Company’s filings with the SEC on Form 10-Q.

 

 

 

 

Consolidated Balance Sheets

 

   As of   As of 
ASSETS  June 30, 2018   September 30, 2017 
   (unaudited)     
Real Estate Investments:          
Land  $203,651,326   $187,224,819 
Buildings and Improvements   1,402,366,135    1,244,691,715 
Total Real Estate Investments   1,606,017,461    1,431,916,534 
Accumulated Depreciation   (197,433,826)   (171,060,478)
Real Estate Investments   1,408,583,635    1,260,856,056 
           
Real Estate Held for Sale   -0-    14,606,028 
Cash and Cash Equivalents   6,892,242    10,226,046 
Securities Available for Sale at Fair Value   167,594,279    123,764,770 
Tenant and Other Receivables   845,043    1,753,054 
Deferred Rent Receivable   9,203,719    8,049,275 
Prepaid Expenses   7,071,943    5,434,874 
Intangible Assets, net of Accumulated Amortization of $13,244,102 and $13,404,318, respectively   13,364,966    10,010,165 
Capitalized Lease Costs, net of Accumulated Amortization of $3,050,738 and $3,393,187, respectively   4,434,124    4,180,907 
Financing Costs, net of Accumulated Amortization of $901,240 and $619,555, respectively   594,024    875,709 
Other Assets   5,896,592    3,280,871 
TOTAL ASSETS  $1,624,480,567   $1,443,037,755 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
           
Liabilities:          
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt          
Issuance Costs  $657,083,249   $591,364,371 
Loans Payable   157,792,824    120,091,417 
Accounts Payable and Accrued Expenses   3,025,832    4,450,753 
Other Liabilities   17,665,160    14,265,518 
Total Liabilities   835,567,065    730,172,059 
           
COMMITMENTS AND CONTINGENCIES          
           
Shareholders’ Equity:          
6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 Par Value Per Share: 12,400,000 Shares Authorized as of June 30, 2018 and September 30, 2017; 11,099,461 and 9,839,445 Shares Issued and Outstanding as of June 30, 2018 and September 30, 2017, respectively   277,486,525    245,986,125 
Common Stock, $0.01 Par Value Per Share: 192,039,750 Shares Authorized as of June 30, 2018 and September 30, 2017; 80,137,070 and 75,630,521 Shares Issued and Outstanding as of June 30, 2018 and September 30, 2017, respectively   801,371    756,305 
Excess Stock, $0.01 Par Value Per Share: 200,000,000 Shares Authorized as of June 30, 2018 and September 30, 2017; No Shares Issued or Outstanding as of June 30, 2018 and September 30, 2017   -0-    -0- 
Additional Paid-In Capital   518,994,574    459,552,701 
Accumulated Other Comprehensive Income (Loss)   (8,368,968)   6,570,565 
Undistributed Income   -0-    -0- 
Total Shareholders’ Equity   788,913,502    712,865,696 
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY  $1,624,480,567   $1,443,037,755 

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 3 of 24

 

Consolidated Statements of Income

 

(unaudited)

 

  For The   For The 
  Three Months Ended   Nine Months Ended 
   6/30/2018   6/30/2017   6/30/2018   6/30/2017 
INCOME:                    
Rental Revenue  $29,256,147   $24,400,237   $85,558,614   $71,291,923 
Reimbursement Revenue   6,941,678    4,208,859    17,002,541    11,806,975 
Lease Termination Income   -0-    -0-    210,261    -0- 
TOTAL INCOME   36,197,825    28,609,096    102,771,416    83,098,898 
                     
EXPENSES:                    
Real Estate Taxes   5,950,262    3,520,322    13,592,573    9,279,165 
Operating Expenses   1,458,618    1,053,253    4,371,154    3,635,986 
General & Administrative Expenses   1,887,722    1,786,852    6,052,791    5,307,853 
Acquisition Costs   -0-    -0-    -0-    178,526 
Depreciation   9,162,563    7,318,258    26,504,609    21,449,830 
Amortization of Capitalized Lease Costs and Intangible Assets   613,927    451,823    1,740,620    1,327,376 
TOTAL EXPENSES   19,073,092    14,130,508    52,261,747    41,178,736 
                     
OTHER INCOME (EXPENSE):                    
Dividend and Interest Income   3,627,984    1,899,320    9,380,411    4,630,653 
Gain on Sale of Securities Transactions   -0-    1,487,836    111,387    2,293,944 
Interest Expense, including Amortization of Financing Costs   (8,279,324)   (6,135,381)   (23,640,556)   (18,835,864)
TOTAL OTHER INCOME (EXPENSE)   (4,651,340)   (2,748,225)   (14,148,758)   (11,911,267)
                     
INCOME FROM CONTINUING OPERATIONS   12,473,393    11,730,363    36,360,911    30,008,895 
                     
Gain on Sale of Real Estate Investments   2,097,380    -0-    7,485,266    -0- 
                     
NET INCOME   14,570,773    11,730,363    43,846,177    30,008,895 
                     
Less: Preferred Dividends   4,248,029    4,045,787    12,813,194    11,325,583 
Less: Redemption of Preferred Stock   -0-    2,467,165    -0-    2,467,165 
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS  $10,322,744   $5,217,411   $31,032,983   $16,216,147 

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 4 of 24

 

Net Income, FFO, Core FFO, AFFO, EBITDAre, Adjusted EBITDA and NOI Reconciliations

 

(unaudited)

 

   For The   For The 
   Three Months Ended   Nine Months Ended 
FFO, Core FFO, AFFO  6/30/2018   6/30/2017   6/30/2018   6/30/2017 
Net Income Attributable to Common Shareholders  $10,322,744   $5,217,411   $31,032,983   $16,216,147 
Plus: Depreciation Expense (excluding Corporate Office Capitalized Costs)   9,123,069    7,278,976    26,386,150    21,332,662 
Plus: Amortization of Intangible Assets   417,088    262,325    1,157,950    771,145 
Plus: Amortization of Capitalized Lease Costs   222,516    214,990    659,701    632,707 
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments   (2,097,380)   -0-    (7,485,266)   95,336 
FFO Attributable to Common Shareholders   17,988,037    12,973,702    51,751,518    39,047,997 
Plus: Acquisition Costs   -0-    -0-    -0-    178,526 
Plus: Redemption of Preferred Stock   -0-    2,467,165    -0-    2,467,165 
Core FFO Attributable to Common Shareholders   17,988,037    15,440,867    51,751,518    41,693,688 
Plus: Depreciation of Corporate Office Capitalized Costs   39,494    39,282    118,459    117,167 
Plus: Stock Compensation Expense   96,970    174,709    339,139    441,054 
Plus: Amortization of Financing Costs   314,527    283,573    910,977    949,470 
Less: Gain on Sale of Securities Transactions   -0-    (1,487,836)   (111,387)   (2,293,944)
Less: Lease Termination Income   -0-    -0-    (210,261)   -0- 
Less: Recurring Capital Expenditures   (490,371)   (195,186)   (774,091)   (571,988)
Less: Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment   (600,659)   (294,936)   (1,357,145)   (924,792)
AFFO Attributable to Common Shareholders  $17,347,998   $13,960,473   $50,667,209   $39,410,655 

 

    Three Months Ended    Nine Months Ended 
EBITDAre, Adjusted EBITDA   6/30/2018    6/30/2017    6/30/2018    6/30/2017 
Net Income Attributable to Common Shareholders  $10,322,744   $5,217,411   $31,032,983   $16,216,147 
Plus: Preferred Dividends   4,248,029    4,045,787    12,813,194    11,325,583 
Plus: Redemption of Preferred Stock   -0-    2,467,165    -0-    2,467,165 
Plus: Interest Expense, including Amortization of Financing Costs   8,279,324    6,135,381    23,640,556    18,835,864 
Plus: Depreciation and Amortization   9,776,490    7,770,081    28,245,229    22,777,206 
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments   (2,097,380)   -0-    (7,485,266)   95,336 
EBITDAre   30,529,207    25,635,825    88,246,696    71,717,301 
Plus: Acquisition Costs   -0-    -0-    -0-    178,526 
Plus: Net Amortization of Acquired Above and Below Market Lease Revenue   25,677    25,492    77,031    76,476 
Less: Gain on Sale of Securities Transactions   -0-    (1,487,836)   (111,387)   (2,293,944)
Adjusted EBITDA  $30,554,884   $24,173,481   $88,212,340   $69,678,359 

 

    Three Months Ended    Nine Months Ended 
Net Operating Income   6/30/2018    6/30/2017    6/30/2018    6/30/2017 
Net Income Attributable to Common Shareholders  $10,322,744   $5,217,411   $31,032,983   $16,216,147 
Plus: Redemption of Preferred Stock   -0-    2,467,165    -0-    2,467,165 
Plus: Preferred Dividends   4,248,029    4,045,787    12,813,194    11,325,583 
Plus: General & Administrative Expenses   1,887,722    1,786,852    6,052,791    5,307,853 
Plus: Acquisition Costs   -0-    -0-    -0-    178,526 
Plus: Depreciation   9,162,563    7,318,258    26,504,609    21,449,830 
Plus: Amortization of Capitalized Lease Costs and Intangible Assets   613,927    451,823    1,740,620    1,327,376 
Plus: Interest Expense, including Amortization of Financing Costs   8,279,324    6,135,381    23,640,556    18,835,864 
Less: Dividend and Interest Income   (3,627,984)   (1,899,320)   (9,380,411)   (4,630,653)
Less: Gain on Sale of Securities Transactions   -0-    (1,487,836)   (111,387)   (2,293,944)
Less: Gain on Sale of Real Estate Investments   (2,097,380)   -0-    (7,485,266)   -0- 
Less: Lease Termination Income   -0-    -0-    (210,261)   -0- 
Net Operating Income – NOI  $28,788,945   $24,035,521   $84,597,428   $70,183,747 

 

    Three Months Ended    Nine Months Ended 
Components of Net Operating Income Consists of:   6/30/2018    6/30/2017    6/30/2018    6/30/2017 
Revenues:                    
Rental Revenue  $29,256,147   $24,400,237   $85,558,614   $71,291,923 
Reimbursement Revenue   6,941,678    4,208,859    17,002,541    11,806,975 
Total Rental and Reimbursement Revenue   36,197,825    28,609,096    102,561,155    83,098,898 
                     
Expenses:                    
Real Estate Taxes   5,950,262    3,520,322    13,592,573    9,279,165 
Operating Expenses   1,458,618    1,053,253    4,371,154    3,635,986 
Total Real Estate Taxes and Operating Expenses   7,408,880    4,573,575    17,963,727    12,915,151 
Net Operating Income – NOI  $28,788,945   $24,035,521   $84,597,428   $70,183,747 

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 5 of 24

 

Financial Highlights

(unaudited)

 

   For The   For The 
   Three Months Ended   Nine Months Ended 
   6/30/2018   6/30/2017   6/30/2018   6/30/2017 
                 
Weighted Average Common Shares Outstanding                    
Basic   79,413,556    72,881,974    77,921,066    71,264,806 
Diluted   79,571,767    73,053,693    78,098,849    71,422,664 
                     
Net Income Attributable to Common Shareholders  $10,322,744   $5,217,411   $31,032,983   $16,216,147 
                     
Basic  $0.13   $0.07   $0.40   $0.23 
Diluted   0.13    0.07    0.40    0.23 
                     
Net Operating Income – NOI  $28,788,945   $24,035,521   $84,597,428   $70,183,747 
                     
Basic  $0.36   $0.33   $1.09   $0.98 
Diluted   0.36    0.33    1.08    0.98 
                     
Funds From Operations – FFO  $17,988,037   $12,973,702   $51,751,518   $39,047,997 
                     
Basic  $0.23   $0.18   $0.66   $0.55 
Diluted   0.23    0.18    0.66    0.55 
                     
Core Funds From Operations - Core FFO  $17,988,037   $15,440,867   $51,751,518   $41,693,688 
                     
Basic  $0.23   $0.21   $0.66   $0.59 
Diluted   0.23    0.21    0.66    0.58 
                     
Core FFO Excluding Gain on Sale of Securities Transactions and Excluding Lease Termination Income  $17,988,037   $13,953,031   $51,429,870   $39,399,744 
                     
Basic  $0.23   $0.19   $0.66   $0.55 
Diluted   0.23    0.19    0.66   $0.55 
                     
Adjusted Funds From Operations – AFFO  $17,347,998   $13,960,473   $50,667,209   $39,410,655 
                     
Basic  $0.22   $0.19   $0.65   $0.55 
Diluted   0.22    0.19    0.65   $0.55 
                     
Dividends Declared per Common Share  $0.17   $0.16   $0.51   $0.48 
                     
Dividend/AFFO Payout Ratio   77.3%               

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 6 of 24

 

Same Property Statistics

(unaudited)

 

 

   For The
Three Months Ended		         
   6/30/2018       6/30/2017   Change   Change % 
Total Square Feet / Total Properties   20,534,513 / 109       17,917,302 / 105    2,617,211    14.6%
                          
Occupancy Percentage at End of Period   99.6%        99.8%   (20) bps    (0.2)%
                          
Same Property Square Feet / Number of Same Properties        15,745,437 / 94                
                          
Same Property Occupancy Percentage at End of Period   99.5%        99.8%   (30) bps    (0.3)%
                          
Same Property Net Operating Income (NOI) (GAAP)  $21,923,776        $22,120,270   $(196,494)   (0.9)%
                          
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment   (273,227)        (291,416)   18,189      
Same Property Cash NOI  $21,650,549        $21,828,854   $(178,305)   (0.8)%

 

Same Property Statistics include all properties owned during the entire periods presented with the exclusion of properties expanded during the periods presented.

 

The 0.9% decrease, amounting to $196,494 in Same Property NOI, consists of $143,366 attributable to decreased Same Property NOI from occupied properties and by a decrease in Same Property NOI from vacant properties of $53,128 attributable to a 30 bps decline in Same Property Occupancy Percentage.

 

The 0.8% decrease, amounting to $178,305 in Same Property Cash NOI, consists of $122,105 attributable to decreased Same Property Cash NOI from occupied properties and by a decrease in Same Property Cash NOI from vacant properties of $56,200 attributable to a 30 bps decline in Same Property Occupancy Percentage.

 

Reconciliation of Same Property NOI to Total NOI

 

  For The         
   Three Months Ended         
   6/30/2018   6/30/2017   Change   Change % 
                 
Same Property NOI (GAAP)  $21,923,776   $22,120,270   $(196,494)   (0.9)%
                     
NOI of properties purchased subsequent to March 31, 2017 (five properties for fiscal 2018 and eight properties for fiscal 2017)   6,052,542    779,073           
                     
NOI of properties expanded subsequent to March 31, 2017 (two properties for fiscal 2018 and 2017)   751,365    714,174           
                     
NOI of property sold subsequent to March 31, 2017 (four properties for fiscal 2018)   61,262    422,004           
Total NOI  $28,788,945   $24,035,521   $4,753,424    19.8%

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 7 of 24


 

Same Property Statistics

(unaudited)

 

       For The         
       Nine Months Ended         
   6/30/2018       6/30/2017   Change   Change % 
                     
Total Square Feet / Total Properties   20,534,513 / 109       17,917,302 / 105    2,617,211    14.6%
                          
Occupancy Percentage at End of Period   99.6%        99.8%   (20) bps    (0.2)%
                          
Same Property Square Feet / Number of Same Properties        15,406,853 / 93                
                          
Same Property Occupancy Percentage at End of Period   99.5%        99.8%   (30) bps    (0.3)%
                          
Same Property Net Operating Income (NOI) (GAAP)  $64,430,143        $64,683,081   $(252,938)   (0.4)%
                          
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment   (748,741)        (852,401)   103,660      
Same Property Cash NOI  $63,681,402        $63,830,680   $(149,278)   (0.2)%

 

Same Property Statistics include all properties owned during the entire periods presented with the exclusion of properties expanded during the periods presented.

 

The 0.4% decrease, amounting to $252,938 in Same Property NOI, consists of $115,936 attributable to decreased Same Property NOI from occupied properties and by a decrease in Same Property NOI from vacant properties of $137,002 attributable to a 30 bps decline in Same Property Occupancy Percentage.

 

The 0.2% decrease, amounting to $149,278 in Same Property Cash NOI, consists of $28,411 attributable to increased Same Property Cash NOI from occupied properties offset by a decrease in Same Property Cash NOI from vacant properties of $177,689 attributable to a 30 bps decline in Same Property Occupancy Percentage.

 

Reconciliation of Same Property NOI to Total NOI

 

  For The         
   Nine Months Ended         
   6/30/2018   6/30/2017   Change   Change % 
                 
Same Property NOI (GAAP)  $64,430,143   $64,683,081   $(252,938)   (0.4)%
                     
NOI of properties purchased subsequent to September 30, 2016 (five properties for fiscal 2018 and ten properties for fiscal 2017)   18,294,191    3,212,077           
                     
NOI of properties expanded subsequent to September 30, 2016 (one property for fiscal 2018 and 2017)   1,266,776    1,138,270           
                     
NOI of property sold subsequent to September 30, 2016 (four properties for fiscal 2018 and one property for fiscal 2017)   606,318    1,150,319           
Total NOI  $84,597,428   $70,183,747   $14,413,681    20.5%

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 8 of 24

 

Consolidated Statements of Cash Flows

 

(unaudited)

 

   For The 
   Nine Months Ended 
   6/30/2018   6/30/2017 
CASH FLOWS FROM OPERATING ACTIVITIES          
Net Income  $43,846,177   $30,008,895 
Noncash Items Included in Net Income:          
Depreciation & Amortization   29,156,206    23,726,676 
Deferred Straight Line Rent   (1,357,145)   (924,792)
Stock Compensation Expense   339,139    441,054 
Gain on Sale of Securities Transactions   (111,387)   (2,293,944)
(Gain) / Loss on Sale of Real Estate Investments   (7,485,266)   95,336 
Changes in:          
Tenant & Other Receivables   1,775,444    937,271 
Prepaid Expenses   (1,637,069)   (2,527,747)
Other Assets & Capitalized Lease Costs   (2,173,910)   71,446 
Accounts Payable, Accrued Expenses & Other Liabilities   741,801    656,824 
NET CASH PROVIDED BY OPERATING ACTIVITIES   63,093,990    50,191,019 
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Purchase of Real Estate & Intangible Assets   (174,919,132)   (208,390,539)
Capital Improvements   (4,541,705)   (1,208,390)
Proceeds from Sale of Real Estate Investments   22,083,340    4,125,819 
Return of Deposits on Real Estate   450,000    2,700,000 
Deposits Paid on Acquisitions of Real Estate   (700,000)   (1,280,000)
Proceeds from Sale of Securities Available for Sale   2,619,949    10,693,212 
Purchase of Securities Available for Sale   (61,277,604)   (39,467,317)
NET CASH USED IN INVESTING ACTIVITIES   (216,285,152)   (232,827,215)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Net Draws on Loans Payable   37,701,407    41,304,256 
Proceeds from Fixed Rate Mortgage Notes Payable   105,600,000    137,925,000 
Principal Payments on Fixed Rate Mortgage Notes Payable   (39,444,104)   (59,936,689)
Financing Costs Paid on Debt   (1,066,310)   (1,650,516)
Proceeds from the Exercise of Stock Options   569,600    -0- 
Redemption of 7.625% Series A Preferred Stock   -0-    (53,493,750)
Redemption of 7.875% Series B Preferred Stock   -0-    (57,500,000)
Proceeds from Underwritten Public Offering of Preferred Stock,
net of offering costs		   -0-    71,003,093 
Proceeds from At-The-Market Preferred Equity Program,
net of offering costs		   30,991,952    -0- 
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments   58,428,746    59,111,167 
Preferred Dividends Paid   (12,548,850)   (11,044,489)
Common Dividends Paid, net of Reinvestments   (30,375,083)   (27,081,387)
NET CASH PROVIDED BY FINANCING ACTIVITIES   149,857,358    98,636,685 
           
NET DECREASE IN CASH AND CASH EQUIVALENTS   (3,333,804)   (83,999,511)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD   10,226,046    95,749,508 
CASH AND CASH EQUIVALENTS - END OF PERIOD  $6,892,242   $11,749,997 

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 9 of 24

 

Capital Structure and Leverage Ratios

(unaudited)

 

  As of   As of   As of 
  6/30/2018   6/30/2017   9/30/2017 
             
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs  $657,083,249   $554,486,956   $591,364,371 
Loans Payable   157,792,824    122,094,940    120,091,417 
Total Debt   814,876,073    676,581,896    711,455,788 
                
6.125% Series C Cumulative Redeemable Preferred Stock   277,486,525    210,000,000    245,986,125 
Common Stock, Paid-In-Capital & Other   511,426,977    448,246,175    466,879,571 
Total Shareholders’ Equity   788,913,502    658,246,175    712,865,696 
                
Total Book Capitalization   1,603,789,575    1,334,828,071    1,424,321,484 
                
Accumulated Depreciation   197,433,826    169,226,861    177,372,518 
Total Undepreciated Book Capitalization  $1,801,223,401   $1,504,054,932   $1,601,694,002 
                
Shares Outstanding   80,137,070    73,824,161    75,630,521 
Market Price Per Share  $16.53   $15.05   $16.19 
                
Equity Market Capitalization  $1,324,665,767   $1,111,053,623   $1,224,458,135 
Total Debt   814,876,073    676,581,896    711,455,788 
Total Preferred Stock   277,486,525    210,000,000    245,986,125 
Total Market Capitalization  $2,417,028,365   $1,997,635,519   $2,181,900,048 
                
Total Debt  $814,876,073   $676,581,896   $711,455,788 
less: Cash and Cash Equivalents   6,892,242    11,749,997    10,226,046 
Net Debt  $807,983,831   $664,831,899   $701,229,742 
less: Securities Available for Sale at Fair Value (Securities)   167,594,279    100,495,810    123,764,770 
Net Debt Less Securities  $640,389,552   $564,336,089   $577,464,972 
                
Net Debt / Total Undepreciated Book Capitalization   44.9%   44.2%   43.8%
Net Debt / Total Market Capitalization   33.4%   33.3%   32.1%
Net Debt Plus Preferred Stock / Total Market Capitalization   44.9%   43.8%   43.4%
Net Debt Less Securities / Total Undepreciated Book Capitalization   35.6%   37.5%   36.1%
Net Debt Less Securities / Total Market Capitalization   26.5%   28.3%   26.5%
Net Debt Less Securities Plus Preferred Stock / Total Market Capitalization   38.0%   38.8%   37.7%
                
Weighted Average Interest Rate on Fixed Rate Debt   4.11%   4.21%   4.18%
Weighted Average Term on Fixed Rate Debt   11.5 yrs.    11.5 yrs.    11.6 yrs. 
Weighted Average Lease Term   7.8 yrs.    7.8 yrs.    7.9 yrs. 

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 10 of 24

 

Capital Structure and Leverage Ratios continued

(unaudited)

 

                   Fiscal Year 
   Three Months Ended   Nine Months Ended   Ended 
   6/30/2018   6/30/2017   6/30/2018   6/30/2017   9/30/2017 
Net Income  $14,570,773   $11,730,363   $43,846,177   $30,008,895   $40,271,085 
Plus: Interest Expense, including Amortization of Financing Costs  8,279,324   6,135,381   23,640,556   18,835,864   25,754,121 
Plus: Depreciation and Amortization  9,776,490   7,770,081   28,245,229   22,777,206   31,459,749 
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments  (2,097,380)   -0-   (7,485,266)   95,336   95,336 
EBITDAre   30,529,207    25,635,825    88,246,696    71,717,301    97,580,291 
Plus: Acquisition Costs   -0-    -0-    -0-    178,526    178,526 
Plus: Net Amortization of Acquired Above and  Below Market Lease Revenue   25,677    25,492    77,031    76,476    101,968 
Less: Gain on Sale of Securities Transactions   -0-    (1,487,836)   (111,387)   (2,293,944)   (2,311,714)
Adjusted EBITDA  $30,554,884   $24,173,481   $88,212,340   $69,678,359   $95,549,071 
                          
Interest Expense, including Amortization of Financing Costs  $8,279,324   $6,135,381   $23,640,556   $18,835,864   $25,754,121 
Preferred Dividends   4,248,029    4,045,787    12,813,194    11,325,583    14,861,686 
Total Fixed Charges  $12,527,353   $10,181,168   $36,453,750   $30,161,447   $40,615,807 
                          
Interest Coverage   3.7 x    3.9 x    3.7 x    3.7 x    3.7 x 
Fixed Charge Coverage   2.4 x    2.4 x    2.4 x    2.3 x    2.4 x 
                          
Net Debt  $807,983,831   $664,831,899   $807,983,831   $664,831,899   $701,229,742 
Net Debt Less Securities   640,389,552    564,336,089    640,389,552    564,336,089    577,464,972 
Total Preferred Stock   277,486,525    210,000,000    277,486,525    210,000,000    245,986,125 
Annualized Adjusted EBITDA   122,219,536    96,693,924    117,616,453    92,904,479    95,549,071 
                          
Net Debt / Adjusted EBITDA   6.6 x    6.9 x    6.9 x    7.2 x    7.3 x 
Net Debt Less Securities / Adjusted EBITDA   5.2 x    5.8 x    5.4 x    6.1 x    6.0 x 
Net Debt + Preferred Stock / Adjusted EBITDA   8.9 x    9.0 x    9.2 x    9.4 x    9.9 x 
Net Debt Less Securities + Preferred Stock / Adjusted EBITDA   7.5 x    8.0 x    7.8 x    8.3 x    8.6 x 

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 11 of 24

 

Debt Maturity

(unaudited)

 

 

Total Debt ($000)

 

          Loans       % of 
Fiscal Year Ended     Mortgages   Payable   Total   Total 
                    
2018     $11,078,170   $47,792,824(B)  $58,870,994    7.2%
2019      60,710,638    -0-    60,710,638    7.4%
2020      45,027,671    110,000,000(C)   155,027,671    18.8%
2021      46,376,527    -0-    46,376,527    5.6%
2022      68,045,369    -0-    68,045,369    8.3%
Thereafter      433,880,088    -0-    433,880,088    52.7%
                        
Total as of 6/30/2018  (A)  $665,118,463   $157,792,824   $822,911,287    100.0%
                        
Weighted Average Interest Rate      4.11%   3.25%   3.94%     
Weighted Average Term      11.5 yrs.    1.6 yrs.    9.6 yrs.      

 

(A)Mortgages does not include unamortized debt issuance costs of $8,035,214.
(B)Represents margin debt which is due upon demand and bears and interest rate of 2.00%.
(C)Represents the amount drawn down on a line of credit that has a one year extension option, which is not reflected above.

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 12 of 24

 

Securities Portfolio Performance

(unaudited)

 

All periods represent the full fiscal year with the exception of the current fiscal year which represents fiscal year to date.

 

Fiscal Year Ended  Securities Available for Sale   Dividend Income   Net Realized Gain on Sale of Securities   Net Realized Gain on Sale of Securities & Dividend Income 
                 
2010  $42,517,725   $2,387,757   $2,609,149   $4,996,906 
2011   44,265,059    2,981,534    5,238,203    8,219,737 
2012   61,685,173    3,144,837    6,044,065    9,188,902 
2013   45,451,740    3,861,374    7,133,252    10,994,626 
2014   59,311,403    3,863,136    2,166,766    6,029,902 
2015   54,541,237    3,707,498    805,513    4,513,011 
2016   73,604,894    5,607,403    4,398,599    10,006,002 
2017   123,764,770    6,919,973    2,311,714    9,231,687 
As of 6/30/2018   167,594,279    9,373,467    111,387    9,484,854 
                     
Total       $41,846,979   $30,818,648   $72,665,627 

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 13 of 24

 

Property Table by Tenant

(unaudited)

 

      Property   Square   Occupied Square   % of Occupied   Annual   % of Total   Rent Per   Undepreciated   Mortgage 
Tenant     Count   Footage   Footage   sf   Rent   Ann. Rent   sf Occup.   Cost   Balance 
                                                
FedEx Ground Package System, Inc.      42    7,899,336    7,899,336    38.5%  $58,819,000    48.8%  $7.45   $805,798,445   $349,664,510 
FedEx Corporation      16    1,544,996    1,544,996    7.5%   8,015,000    6.7%   5.19    108,891,040    23,032,703 
Total FedEx      58    9,444,332    9,444,332    46.0%   66,834,000    55.5%   7.08    914,689,485    372,697,213 
                                                 
Milwaukee Electric Tool Corporation      1    861,889    861,889    4.2%   3,032,000    2.5%   3.52    36,914,917    22,163,550 
Shaw Industries, Inc.      1    831,764    831,764    4.1%   3,551,000    3.0%   4.27    56,025,945    32,683,129 
ULTA, Inc.      1    671,354    671,354    3.3%   2,702,000    2.2%   4.02    37,512,071    20,495,423 
Amazon.com Services, Inc. (Amazon.com, Inc.)      2    662,942    662,942    3.2%   3,904,000    3.2%   5.89    62,931,258    38,210,841 
Jim Beam Brands Company (Beam Suntory)      1    599,840    599,840    2.9%   2,051,000    1.7%   3.42    28,000,000    16,873,754 
International Paper Company      2    578,472    578,472    2.8%   2,592,000    2.2%   4.48    36,175,718    20,996,375 
TreeHouse Private Brands, Inc.      1    558,600    558,600    2.7%   2,206,000    1.8%   3.95    26,807,852    15,485,705 
B. Braun Medical Inc.      1    399,440    399,440    1.9%   2,130,000    1.8%   5.33    29,973,199    19,422,368 
CBOCS Distribution, Inc. (Cracker Barrel)      1    381,240    381,240    1.9%   1,447,000    1.2%   3.80    14,215,126    7,276,403 
Best Buy Warehousing Logistics, Inc.      1    368,060    368,060    1.8%   1,676,000    1.4%   4.55    19,600,000    9,450,350 
Coca-Cola      2    323,358    323,358    1.6%   1,693,000    1.4%   5.24    20,504,069    4,850,865 
Autoneum North America, Inc.      1    315,560    315,560    1.5%   1,703,000    1.4%   5.40    21,040,395    14,663,085 
Science Applications International Corporation      1    302,400    302,400    1.5%   1,491,000    1.2%   4.93    13,390,441    -0- 
United Technologies Corporation      3    283,150    283,150    1.4%   2,264,000    1.9%   8.00    27,687,512    6,654,972 
Bunzl USA Holdings, Inc.      2    268,778    268,778    1.3%   1,474,000    1.2%   5.48    18,696,890    12,313,656 
Woodstream Corporation  (A)   1    256,000    256,000    1.2%   914,000    0.8%   3.57    8,935,160    -0- 
Anda Pharmaceuticals, Inc.      1    234,660    234,660    1.1%   1,205,000    1.0%   5.14    14,550,000    7,718,748 
UGN, Inc.      1    232,200    232,200    1.1%   1,070,000    0.9%   4.61    13,424,564    7,248,514 
Mickey Thompson Performance Tires and Wheels (Cooper Tire)      1    219,765    219,765    1.1%   1,501,000    1.2%   6.83    18,934,065    12,287,866 
Rinnai America Corporation      1    218,120    218,120    1.1%   831,000    0.7%   3.81    14,933,683    -0- 
Anheuser-Busch, Inc.      1    184,800    184,800    0.9%   821,000    0.7%   4.44    12,697,848    -0- 
Carlisle Tire & Wheel Company      1    179,280    179,280    0.9%   739,000    0.6%   4.12    7,232,986    -0- 
NF&M International, Inc.  (B)   1    174,802    174,802    0.9%   835,000    0.7%   4.78    5,408,790    -0- 
Home Depot USA, Inc.      1    171,200    171,200    0.8%   997,000    0.8%   5.82    11,298,367    -0- 
Victory Packaging, L.P.      1    148,000    148,000    0.7%   502,000    0.4%   3.39    5,451,629    -0- 
Challenger Lifts, Inc. (Snap-On Inc.)      1    137,500    137,500    0.7%   838,000    0.7%   6.09    11,304,000    6,623,753 
Altec Industries, Inc.  (A)   1    126,880    126,880    0.6%   371,000    0.3%   2.92    4,428,488    -0- 
General Electric Company      1    125,860    125,860    0.6%   1,321,000    1.1%   10.50    19,950,000    11,393,300 
The American Bottling Company (Dr Pepper Snapple)      2    110,080    110,080    0.5%   743,000    0.6%   6.75    10,498,031    1,717,657 
Style Crest, Inc.      1    106,507    106,507    0.5%   387,000    0.3%   3.63    7,238,613    -0- 
Pittsburgh Glass Works, LLC      1    102,135    102,135    0.5%   442,000    0.4%   4.33    4,245,913    -0- 
Holland 1916 Inc.      1    95,898    95,898    0.5%   349,000    0.3%   3.64    7,397,881    -0- 
National Oilwell Varco, Inc.      1    91,295    91,295    0.4%   754,000    0.6%   8.26    8,163,278    2,269,158 
Joseph T. Ryerson and Son, Inc.      1    89,052    89,052    0.4%   506,000    0.4%   5.68    6,977,442    -0- 
CHEP USA, Inc.      1    83,000    83,000    0.4%   500,000    0.4%   6.02    7,463,672    -0- 
Sherwin-Williams Company      2    78,887    78,887    0.4%   643,000    0.5%   8.15    7,244,128    -0- 
RGH Enterprises, Inc. (Cardinal Health)      1    75,000    75,000    0.4%   607,000    0.5%   8.09    5,525,600    -0- 
Tampa Bay Grand Prix      1    68,385    68,385    0.3%   297,000    0.2%   4.34    5,677,982    -0- 
Various Tenants at Retail Shopping Center      1    64,220    64,220    0.3%   807,000    0.7%   12.57    3,072,882    -0- 
SOFIVE, Inc.      1    60,400    60,400    0.3%   558,000    0.5%   9.24    4,929,208    1,621,778 
Kellogg Sales Company      1    54,812    54,812    0.3%   329,000    0.3%   6.00    3,494,108    -0- 
Siemens Real Estate      1    51,130    51,130    0.2%   485,000    0.4%   9.49    4,452,425    -0- 
Foundation Building Materials, LLC      1    36,270    36,270    0.2%   172,000    0.2%   4.74    2,523,644    -0- 
Graybar Electric Company      1    26,340    26,340    0.2%   109,000    0.2%   4.14    1,885,254    -0- 
Tenant Total as of 6/30/18      109    20,453,657    20,453,657    99.6%  $120,383,000    100.0%  $5.89   $1,603,504,519 (C)  $665,118,463 
                                                 
Vacant  (B)   1    80,856    -0-    0.0%   -0-    0.0%   -0-    2,501,877    -0- 
Total as of 6/30/18      109    20,534,513    20,453,657    99.6%  $120,383,000    100.0%  $5.89   $1,606,006,396   $665,118,463 

 

  (A) Woodstream Corporation and Altec Industries, Inc. are located at one property and therefore are counted as one property in the Property Count total.
     
  (B) NF&M International is located in a 255,658 square foot Industrial Park in Monaca (Pittsburgh), PA, of which 80,856 square feet is vacant. This Industrial Park is counted as one property in the Property Count Total. Other than the two properties indicated in footnotes (A) and (B) and the one retail property, all other properties are single-tenant.
     
  (C) Does not include unamortized debt issuance costs of $8,035,214.

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 14 of 24

 

Property Table by State

(unaudited)

 

   Property   Square   Occupied Square   % of Total   Annual   % of Total   Rent Per   Undepreciated   Mortgage 
State  Count   Footage   Footage   sf   Rent   Ann. Rent   sf Occup.   Cost   Balance 
Florida   13    2,211,583    2,211,583    10.8%  $15,711,000    13.1%  $7.10   $226,437,810   $106,355,377 
Texas   10    1,781,967    1,781,967    8.7%   14,160,000    11.8%   7.95    182,253,655    79,504,203 
Ohio   9    1,550,706    1,550,706    7.6%   8,901,000    7.4%   5.74    110,131,661    40,605,871 
Kentucky   3    1,295,940    1,295,940    6.3%   5,095,000    4.2%   3.93    66,111,852    38,983,212 
Mississippi   4    1,158,889    1,158,889    5.6%   4,466,000    3.7%   3.85    55,250,862    29,882,298 
Georgia   4    1,139,426    1,139,426    5.5%   5,004,000    4.2%   4.39    78,300,712    33,078,998 
South Carolina   5    1,008,358    1,008,358    4.9%   6,599,000    5.5%   6.54    79,435,118    29,948,928 
Indiana   2    999,176    999,176    4.9%   4,417,000    3.7%   4.42    63,016,153    31,172,312 
Illinois   9    958,045    958,045    4.7%   6,117,000    5.1%   6.38    82,238,327    8,711,524 
North Carolina   4    939,706    939,706    4.6%   5,663,000    4.7%   6.03    85,778,185    43,294,579 
Tennessee   3    891,777    891,777    4.3%   3,093,000    2.6%   3.47    33,846,631    12,546,573 
Michigan   4    833,054    833,054    4.1%   5,574,000    4.6%   6.69    72,976,507    26,189,350 
Kansas   4    813,043    813,043    4.0%   4,619,000    3.8%   5.68    60,943,937    30,553,044 
Missouri   4    739,330    739,330    3.6%   2,828,000    2.3%   3.83    34,975,893    6,674,809 
Oklahoma   4    614,941    614,941    3.0%   3,916,000    3.3%   6.37    54,939,875    30,111,391 
New York   3    518,565    518,565    2.5%   3,886,000    3.2%   7.49    51,336,422    21,634,312 
Pennsylvania   3    504,040    423,184    2.5%   2,807,000    2.3%   6.63    36,869,316    14,745,434 
Alabama   2    451,595    451,595    2.2%   2,625,000    2.2%   5.81    39,714,135    19,426,573 
Virginia   5    407,265    407,265    2.0%   2,449,000    2.0%   6.01    34,663,204    4,514,935 
Colorado   2    295,227    295,227    1.4%   2,437,000    2.0%   8.25    35,674,117    17,399,645 
Arizona   1    283,358    283,358    1.4%   1,361,000    1.1%   4.80    16,824,226    3,924,048 
Wisconsin   2    238,666    238,666    1.2%   1,295,000    1.1%   5.43    15,952,361    2,720,662 
Washington   1    210,445    210,445    1.0%   1,962,000    1.6%   9.32    30,228,547    18,031,513 
Louisiana   1    175,315    175,315    0.9%   1,262,000    1.0%   7.20    18,410,000    11,306,837 
Maryland   1    148,881    148,881    0.7%   1,452,000    1.2%   9.75    14,512,355    -0- 
New Jersey   2    124,620    124,620    0.6%   1,365,000    1.1%   10.95    8,002,092    1,621,778 
Nebraska   1    89,115    89,115    0.4%   446,000    0.4%   5.00    5,944,691    -0- 
Minnesota   1    60,398    60,398    0.3%   372,000    0.3%   6.16    5,220,000    2,180,257 
Connecticut   1    54,812    54,812    0.2%   329,000    0.3%   6.00    3,494,108    -0- 
Iowa   1    36,270    36,270    0.1%   172,000    0.1%   4.74    2,523,644    -0- 
Total as of 6/30/18   109    20,534,513    20,453,657    100.0%  $120,383,000    100.0%  $5.89   $1,606,006,396 (A) $665,118,463 

 

  (A) Does not include unamortized debt issuance costs of $8,035,214.

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 15 of 24

 

Lease Expirations

(unaudited)

 

      Property   Square   % of Total   Annual   % of Total   Rent Per sf   Lease  Exp.   Undepreciated   Mortgage 
Fiscal Year     Count   Footage   sf   Rent   Ann. Rent   Occup.   Term in Years   Cost   Balance 
                                        
2018      1    82,269    0.4%  $408,000    0.3%  $4.96    0.2   $6,919,836   $-0- 
2019      9    1,366,742    6.7%   7,302,000    6.1%   5.34    0.8    82,903,975    12,469,363 
2020      4    383,449    1.9%   2,129,000    1.8%   5.55    1.9    27,447,899    -0- 
2021  (A)   10    1,206,723    5.9%   5,467,000    4.5%   4.53    2.9    69,298,783    7,997,496 
2022      7    1,138,320    5.5%   6,419,000    5.3%   5.64    3.7    75,991,657    25,889,809 
2023  (A)    13    1,668,804    8.1%   9,481,000    7.9%   5.68    5.0    116,791,437    22,145,221 
2024      11    1,526,126    7.4%   9,804,000    8.1%   6.42    5.9    115,781,294    29,332,221 
2025  (A)    9    2,404,478    11.7%   12,271,000    10.2%   5.10    6.9    159,904,370    76,246,573 
2026      7    982,226    4.8%   7,922,000    6.6%   8.07    7.9    105,325,177    41,183,573 
2027      11    2,304,616    11.2%   12,629,000    10.5%   5.48    9.1    178,099,769    73,983,041 
2028      9    2,312,707    11.3%   11,809,000    9.8%   5.11    9.8    157,704,409    75,378,937 
2029      4    721,438    3.5%   4,070,000    3.4%   5.64    10.7    61,390,594    27,711,524 
2030      4    1,044,832    5.1%   7,403,000    6.2%   7.09    11.8    109,686,033    62,908,543 
2031      3    963,269    4.7%   7,122,000    5.9%   7.39    12.8    104,367,000    65,934,926 
2032      6    1,724,838    8.4%   13,134,000    10.9%   7.61    13.8    202,011,552    128,451,531 
2034      1    558,600    2.7%   2,206,000    1.8%   3.95    15.3    26,807,852    15,485,705 
Various tenants at retail shopping center      1    64,220    0.3%   807,000    0.7%   12.57    -0-    3,072,882    -0- 
Vacant  (A)   1    80,856    0.4%   -0-    -0-    -0-    -0-    2,501,877    -0- 
Total as of 6/30/18      109    20,534,513    100.0%  $120,383,000    100.0%  $5.89    7.8   $1,606,006,396 (B) $665,118,463 

 

  (A) Included in 2021 is Woodstream Corporation and included in 2023 is Altec Industries which both occupy one property. Included in 2025 is NF&M International, which occupies 174,802 square feet of a 255,658 square foot Industrial Park. The remaining 80,856 square feet is included in Vacant. Each of these properties are counted as one property in the Property Count Total. Other than these properties and the one retail property, all other properties are single-tenant.
     
  (B) Does not include unamortized debt issuance costs of $8,035,214.

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 16 of 24

 


Recent Acquisitions During Fiscal 2018

(unaudited)

 

            Date of  Square   Annual   Rent Per   Lease  Purchase   Initial Mortgage 
No  Tenant  City (MSA)  State  Acquisition  Footage   Rent   sf Occup.   Expiration  Price   Balance 
1  FedEx Corporation  Charleston  SC  11/2/2017   121,683   $1,315,000    10.81   8/31/2032  $21,872,170   $14,200,000 
2  Amazon.com Services, Inc. (Amazon.com, Inc.)  Oklahoma City  OK  11/30/2017   300,000    1,884,000    6.28   10/31/2027   30,250,000    19,600,000 
3  Shaw Industries, Inc.  Savannah  GA  1/22/2018   831,764    3,551,000    4.27   9/30/2027   57,483,636    33,300,000 
4  B. Braun Medical Inc.  Daytona Beach  FL  4/6/2018   399,440    2,130,000    5.33   4/1/2028   30,750,540    19,500,000 
5  Amazon.com Services, Inc. (Amazon.com, Inc.)  Mobile  AL  6/28/2018   362,942    2,020,000    5.57   11/30/2028   33,688,276    19,000,000 
   Total as of 6/30/18            2,015,829   $10,900,000   $5.41      $174,044,622   $105,600,000 

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 17 of 24

 
Property Table

(unaudited)

 

                         Rent   Lease Exp.         
            Fiscal Year       Square   Annual   Per sf   Term in   Undepreciated   Mortgage 
No  Tenant  City (MSA)  State  Acquisition   Occup.   Footage   Rent   Occup.   Years   Cost   Balance 
1  Milwaukee Electric Tool Corporation  Olive Branch (Memphis, TN)  MS   2013    100.0%   861,889   $3,032,000   $3.52    10.1   $36,914,917   $22,163,550 
2  Shaw Industries, Inc.  Savannah  GA   2018    100.0%   831,764    3,551,000    4.27    9.3    56,025,945    32,683,129 
3  ULTA, Inc.  Greenwood (Indianapolis)  IN   2015    100.0%   671,354    2,702,000    4.02    7.1    37,512,071    20,495,423 
4  Jim Beam Brands Company (Beam Suntory)  Frankfort (Lexington)  KY   2015    100.0%   599,840    2,051,000    3.42    6.6    28,000,000    16,873,754 
5  TreeHouse Private Brands, Inc.  Buckner (Louisville)  KY   2014    100.0%   558,600    2,206,000    3.95    15.3    26,807,852    15,485,705 
6  FedEx Corporation  Memphis  TN   2010    100.0%   449,900    1,327,000    2.95    0.9    14,614,986    5,270,170 
7  B. Braun Medical Inc.  Daytona Beach  FL   2018    100.0%   399,440    2,130,000    5.33    9.8    29,973,199    19,422,368 
8  Woodstream Corporation  St. Joseph  MO   2001    100.0%   256,000    914,000    3.57    3.3    8,935,160    -0- 
   Altec Industries, Inc.  St. Joseph  MO   2001    100.0%   126,880    371,000    2.92    4.7    4,428,488    -0- 
9  CBOCS Distribution, Inc. (Cracker Barrel)  Lebanon (Nashville)  TN   2011    100.0%   381,240    1,447,000    3.80    6.0    14,215,126    7,276,403 
10  Best Buy Warehousing Logistics, Inc.  Streetsboro (Cleveland)  OH   2012    100.0%   368,060    1,676,000    4.55    3.6    19,600,000    9,450,350 
11  Amazon.com Services, Inc. (Amazon.com, Inc.)  Mobile  AL   2018    100.0%   362,942    2,020,000    5.57    10.4    33,052,316    19,000,000 
12  FedEx Ground Package System, Inc.  Concord (Charlotte)  NC   2017    100.0%   354,482    2,537,000    7.16    13.9    40,043,145    25,198,229 
13  FedEx Ground Package System, Inc.  Mesquite (Dallas)  TX   2017    100.0%   351,874    3,195,000    9.08    13.8    49,880,493    31,357,736 
14  FedEx Ground Package System, Inc.  Walker (Grand Rapids)  MI   2017    100.0%   343,483    2,102,000    6.12    13.6    31,654,987    19,737,797 
15  FedEx Ground Package System, Inc.  Hamburg (Buffalo)  NY   2017    100.0%   338,584    2,313,000    6.83    12.8    34,850,000    21,634,312 
16  FedEx Ground Package System, Inc.  Concord (Charlotte)  NC   2016    100.0%   330,717    2,237,000    6.76    7.1    33,044,797    18,096,350 
17  FedEx Ground Package System, Inc.  Indianapolis  IN   2014    100.0%   327,822    1,715,000    5.23    9.3    25,504,083    10,676,889 
18  Autoneum North America, Inc.  Aiken (Augusta, GA)  SC   2017    100.0%   315,560    1,703,000    5.40    13.8    21,040,395    14,663,085 
19  FedEx Ground Package System, Inc.  Olathe (Kansas City)  KS   2016    100.0%   313,763    2,200,000    7.01    12.9    31,737,000    20,248,994 
20  FedEx Ground Package System, Inc.  Davenport (Orlando)  FL   2016    100.0%   310,922    2,609,000    8.39    12.8    37,780,000    24,051,619 
21  FedEx Ground Package System, Inc.  Ft. Worth (Dallas)  TX   2015    100.0%   304,608    2,373,000    7.79    11.8    35,300,832    21,099,018 
22  Science Applications International Corporation  Hanahan (Charleston)  SC   2005    100.0%   302,400    1,491,000    4.93    0.8    13,390,441    -0- 
23  Amazon.com Services, Inc. (Amazon.com, Inc.)  Oklahoma City  OK   2018    100.0%   300,000    1,884,000    6.28    9.3    29,878,942    19,210,841 
24  International Paper Company  Kenton  OH   2017    100.0%   298,472    1,244,000    4.17    9.2    17,881,607    11,619,141 
25  FedEx Ground Package System, Inc.  Jacksonville  FL   2015    100.0%   297,579    1,998,000    6.71    11.5    30,732,090    16,529,498 
26  Western Container Corp. (Coca-Cola)  Tolleson (Phoenix)  AZ   2003    100.0%   283,358    1,361,000    4.80    8.8    16,824,226    3,924,048 
27  International Paper Company  Edwardsville (Kansas City)  KS   2014    100.0%   280,000    1,348,000    4.81    5.2    18,294,108    9,377,234 
28  NF&M International, Inc.  Monaca (Pittsburgh)  PA   1988    68.4%   255,658    835,000    4.78    6.5    7,910,666    -0- 
29  FedEx Ground Package System, Inc.  Orion  MI   2007    100.0%   245,633    1,908,000    7.77    5.0    22,885,635    -0- 
30  FedEx Ground Package System, Inc.  Homestead (Miami)  FL   2017    100.0%   237,756    2,282,000    9.60    13.8    37,873,120    23,637,442 
31  Anda Pharmaceuticals, Inc.  Olive Branch (Memphis, TN)  MS   2012    100.0%   234,660    1,205,000    5.14    4.1    14,550,000    7,718,748 
32  UGN, Inc.  Monroe (Cincinnati)  OH   2015    100.0%   232,200    1,070,000    4.61    11.7    13,424,564    7,248,514 
33  FedEx Ground Package System, Inc.  Colorado Springs  CO   2016    100.0%   225,362    1,832,000    8.13    7.6    29,320,066    16,900,557 
34  Mickey Thompson Performance Tires and Wheels (Cooper Tire)  Stow  OH   2017    100.0%   219,765    1,501,000    6.83    9.2    18,934,065    12,287,866 
35  Rinnai America Corporation  Griffin (Atlanta)  GA   2006    100.0%   218,120    831,000    3.81    2.5    14,933,683    -0- 
36  FedEx Ground Package System, Inc.  Ft. Myers  FL   2017    100.0%   213,672    1,418,000    6.64    9.2    21,663,635    13,468,857 
37  FedEx Ground Package System, Inc.  Burlington (Seattle/Everett)  WA   2016    100.0%   210,445    1,962,000    9.32    12.2    30,228,547    18,031,513 
38  FedEx Ground Package System, Inc.  Sauget (St. Louis, MO)  IL   2015    100.0%   198,773    1,036,000    5.21    10.9    15,204,950    8,711,524 
39  Anheuser-Busch, Inc.  Granite City (St. Louis, MO)  IL   2001    100.0%   184,800    821,000    4.44    3.4    12,697,848    -0- 
40  Carrier Corporation (United Technologies)  Carrollton (Dallas)  TX   2010    100.0%   184,317    1,576,000    8.55    0.5    17,819,203    6,654,972 
41  FedEx Ground Package System, Inc.  Spring (Houston)  TX   2014    100.0%   181,176    1,581,000    8.73    6.3    19,294,396    8,080,427 
42  Carlisle Tire & Wheel Company  Edwardsville (Kansas City)  KS   2003    100.0%   179,280    739,000    4.12    5.1    7,232,986    -0- 
43  FedEx Ground Package System, Inc.  Ft. Mill (Charlotte, NC)  SC   2010    100.0%   176,939    1,415,000    8.00    5.3    15,870,217    884,380 
 44  FedEx Ground Package System, Inc.  Covington (New Orleans)  LA   2016    100.0%   175,315    1,262,000    7.20    7.0    18,410,000    11,306,837 
45  FedEx Ground Package System, Inc.  Livonia (Detroit)  MI   2013    100.0%   172,005    1,194,000    6.94    3.8    13,762,030    6,451,553 
46  Home Depot USA, Inc.  Montgomery (Chicago)  IL   2004    100.0%   171,200    997,000    5.82    2.0    11,298,367    -0- 
47  FedEx Ground Package System, Inc.  Tampa  FL   2004    100.0%   170,779    1,624,000    9.51    8.1    19,696,227    5,340,301 
48  FedEx Ground Package System, Inc.  Edinburg  TX   2011    100.0%   164,207    1,097,000    6.68    8.3    12,039,014    -0- 
49  FedEx Ground Package System, Inc.  Lindale (Tyler)  TX   2015    100.0%   163,378    725,000    4.44    6.0    9,965,550    5,734,508 
50  Bunzl Distribution Midcentral, Inc.  Kansas City  MO   2015    100.0%   158,417    752,000    4.75    3.3    9,968,451    6,674,809 
51  FedEx Ground Package System, Inc.  Oklahoma City  OK   2012    100.0%   158,340    1,048,000    6.62    7.0    12,584,462    3,544,046 
52  FedEx Ground Package System, Inc.  Waco  TX   2012    100.0%   150,710    1,078,000    7.15    7.2    12,551,368    4,308,385 
53  FedEx Ground Package System, Inc.  Beltsville (Washington, DC)  MD   2001    100.0%   148,881    1,452,000    9.75    10.1    14,512,355    -0- 
54  Victory Packaging, L.P.  Fayetteville  NC   1997    100.0%   148,000    502,000    3.39    2.7    5,451,629    -0- 
55  FedEx Ground Package System, Inc.  El Paso  TX   2006    100.0%   144,149    1,345,000    9.33    5.3    12,431,192    -0- 
56  FedEx Ground Package System, Inc.  Cocoa  FL   2008    100.0%   144,138    1,112,000    7.71    6.3    14,127,449    -0- 
57  FedEx Ground Package System, Inc.  Cudahy (Milwaukee)  WI   2001    100.0%   139,564    827,000    5.93    9.0    9,382,361    -0- 
58  Challenger Lifts, Inc. (Snap-On Inc.)  Louisville  KY   2016    100.0%   137,500    838,000    6.09    7.9    11,304,000    6,623,752 

 

59

  FedEx Ground Package System, Inc.  Richfield (Cleveland)  OH   2006    100.0%   131,152    1,493,000    11.38    6.3    16,435,478    -0- 

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 18 of 24

 

Property Table

(unaudited)

 

                         Rent   Lease Exp.         
            Fiscal Year       Square   Annual   Per sf   Term in   Undepreciated   Mortgage 
No  Tenant  City (MSA)  State  Acquisition   Occup.   Footage   Rent   Occup.   Years   Cost   Balance 
60  General Electric Company  Imperial (Pittsburgh)  PA   2016    100.0%   125,860   $1,321,000   $10.50    7.5   $19,950,000   $11,393,300 
61  FedEx Ground Package System, Inc.  Wheeling (Chicago)  IL   2003    100.0%   123,000    1,272,000    10.34    8.9    18,537,652    -0- 
62  FedEx Ground Package System, Inc.  Altoona  PA   2014    100.0%   122,522    651,000    5.31    5.2    9,008,650    3,352,134 
63  FedEx Corporation  Charleston  SC   2018    100.0%   121,683    1,315,000    10.81    14.2    21,519,412    13,857,243 
64  FedEx Corporation  Mechanicsville (Richmond)  VA   2001    100.0%   112,799    541,000    4.80    4.8    7,792,395    -0- 
65  FedEx Corporation  Orlando  FL   2008    100.0%   110,638    666,000    6.02    9.4    8,714,362    3,905,290 
66  Bunzl Distribution Oklahoma, Inc.  Oklahoma City  OK   2017    100.0%   110,361    722,000    6.54    6.2    8,728,439    5,638,847 
67  Style Crest, Inc.  Winston-Salem  NC   2002    100.0%   106,507    387,000    3.63    2.8    7,238,613    -0- 
68  FedEx Ground Package System, Inc.  Cheektowaga (Buffalo)  NY   2000    100.0%   104,981    966,000    9.20    1.2    10,960,823    -0- 
69  FedEx Ground Package System, Inc.  West Chester Twp. (Cincinnati)  OH   1999    100.0%   103,818    543,000    5.23    5.2    5,733,686    -0- 
70  FedEx Ground Package System, Inc.  Roanoke  VA   2013    100.0%   103,402    755,000    7.30    4.8    10,200,000    4,514,935 
71  Pittsburgh Glass Works, LLC  O’ Fallon (St. Louis)  MO   1994    100.0%   102,135    442,000    4.33    3.0    4,245,913    -0- 
72  FedEx Ground Package System, Inc.  Green Bay  WI   2013    100.0%   99,102    468,000    4.72    4.9    6,570,000    2,720,662 
73  Holland 1916 Inc.  Liberty (Kansas City)  MO   1998    100.0%   95,898    349,000    3.64    1.0    7,397,881    -0- 
74  FedEx Corporation  Jacksonville  FL   1999    100.0%   95,883    533,000    5.56    10.9    6,383,328    -0- 
75  FedEx Corporation  Tampa  FL   2006    100.0%   95,662    603,000    6.30    9.4    7,682,572    -0- 
76  FedEx Ground Package System, Inc.  Hanahan (Charleston)  SC   2005    100.0%   91,776    675,000    7.35    0.4    7,614,653    544,221 
77  National Oilwell Varco, Inc.  Houston  TX   2010    100.0%   91,295    754,000    8.26    4.3    8,163,278    2,269,158 
78  FedEx Corporation  Omaha  NE   1999    100.0%   89,115    446,000    5.00    5.3    5,944,691    -0- 
79  Joseph T. Ryerson and Son, Inc.  Elgin (Chicago)  IL   2002    100.0%   89,052    506,000    5.68    1.6    6,977,442    -0- 
80  FedEx Ground Package System, Inc.  Huntsville  AL   2005    100.0%   88,653    605,000    6.82    8.1    6,661,819    426,573 
81  CHEP USA, Inc.  Roanoke  VA   2007    100.0%   83,000    500,000    6.02    6.7    7,463,672    -0- 
82  FedEx Corporation  Bedford Heights (Cleveland)  OH   2007    100.0%   82,269    408,000    4.96    0.2    6,919,836    -0- 
83  RGH Enterprises, Inc. (Cardinal Health)  Halfmoon (Albany)  NY   2012    100.0%   75,000    607,000    8.09    3.4    5,525,600    -0- 
84  FedEx Corporation  Schaumburg (Chicago)  IL   1997    100.0%   73,500    478,000    6.50    8.8    5,177,940    -0- 
85  FedEx Corporation  Romulus (Detroit)  MI   1998    100.0%   71,933    370,000    5.14    2.9    4,673,856    -0- 
86  FedEx Ground Package System, Inc.  Denver  CO   2005    100.0%   69,865    605,000    8.66    7.3    6,354,051    499,088 
87  Tampa Bay Grand Prix  Tampa  FL   2005    100.0%   68,385    297,000    4.34    2.3    5,677,982    -0- 
88  Sherwin-Williams Company  Rockford  IL   2011    100.0%   66,387    481,000    7.25    5.5    5,551,227    -0- 
89  Various Tenants at Retail Shopping Center  Somerset  NJ   1970    100.0%   64,220    807,000    12.57     na     3,072,882    -0- 
90  The American Bottling Company (Dr Pepper Snapple)  Cincinnati  OH   2015    100.0%   63,840    481,000    7.53    11.3    6,750,000    -0- 
91  FedEx Corporation  Chattanooga  TN   2007    100.0%   60,637    319,000    5.26    4.3    5,016,518    -0- 
92  SOFIVE, Inc.  Carlstadt (New York, NY)  NJ   2001    100.0%   60,400    558,000    9.24    6.6    4,929,210    1,621,778 
93  FedEx Ground Package System, Inc.  Stewartville (Rochester)  MN   2013    100.0%   60,398    372,000    6.16    4.9    5,220,000    2,180,257 
94  Carrier Enterprise, LLC (United Technologies)  Richmond  VA   2004    100.0%   60,000    324,000    5.40    0.4    4,768,309    -0- 
95  FedEx Ground Package System, Inc.  Augusta  GA   2005    100.0%   59,358    501,000    8.44    3.0    5,363,305    395,869 
96  Kellogg Sales Company  Newington (Hartford)  CT   2001    100.0%   54,812    329,000    6.00    1.7    3,494,108    -0- 
97  Siemens Real Estate  Lebanon (Cincinnati)  OH   2012    100.0%   51,130    485,000    9.49    0.8    4,452,425    -0- 
98  FedEx Corporation  Charlottesville  VA   1999    100.0%   48,064    329,000    6.85    9.2    4,438,828    -0- 
99  FedEx Ground Package System, Inc.  Corpus Christi  TX   2012    100.0%   46,253    436,000    9.43    3.2    4,808,329    -0- 
100  The American Bottling Company (Dr Pepper Snapple)  Tulsa  OK   2014    100.0%   46,240    262,000    5.67    5.7    3,748,031    1,717,657 
101  Heartland Coca-Cola Bottling Company, LLC (Coca-Cola)  Topeka  KS   2009    100.0%   40,000    332,000    8.30    3.3    3,679,843    926,817 
102  Collins Aerospace Systems (United Technologies)  Rockford  IL   2015    100.0%   38,833    364,000    9.37    9.0    5,100,000    -0- 
103  Foundation Building Materials, LLC  Urbandale (Des Moines)  IA   1994    100.0%   36,270    172,000    4.74    9.5    2,523,644    -0- 
104  FedEx Corporation  Richland (Jackson)  MS   1994    100.0%   36,000    120,000    3.33    5.8    1,900,691    -0- 
105  FedEx Corporation  Punta Gorda  FL   2007    100.0%   34,624    284,000    8.20    9.0    4,133,510    -0- 
106  FedEx Corporation  Lakeland  FL   2006    100.0%   32,105    155,000    4.83    9.4    2,000,336    -0- 
107  FedEx Corporation  Augusta  GA   2006    100.0%   30,184    121,000    4.01    4.4    1,977,779    -0- 
108  Graybar Electric Company  Ridgeland (Jackson)  MS   1993    100.0%   26,340    109,000    4.14    1.1    1,885,254    -0- 
109  Sherwin-Williams Company  Burr Ridge (Chicago)  IL   1997    100.0%   12,500    162,000    12.96    3.3    1,692,901    -0- 
   Total as of 6/30/18              99.6%   20,534,513   $120,383,000   $5.89    7.8   $1,606,006,396 (A) $665,118,463 

 

  (A) Does not include unamortized debt issuance costs of $8,035,214.

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 19 of 24

 

 

Definitions

 

Investors and analysts following the real estate industry utilize funds from operations (“FFO”), core funds from operations (“Core FFO”), adjusted funds from operations (“AFFO”), net operating income (“NOI”), Same Property NOI, Same Property Cash NOI, and earnings before interest, taxes, depreciation and amortization for real estate, (“EBITDAre”) & (“Adjusted EBITDA”) variously defined, as supplemental performance measures. While the Company believes net income available to common stockholders, as defined by accounting principles generally accepted in the United States of America (U.S. GAAP), is the most appropriate measure, it considers NOI, Same Property NOI, Same Property Cash NOI, EBITDAre, Adjusted EBITDA, FFO, Core FFO and AFFO, given their wide use by and relevance to investors and analysts, appropriate supplemental performance measures. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of U.S. GAAP depreciation and amortization of real estate assets. Core FFO reflects the same assumptions as FFO except that is also adjusts to exclude for the effects of acquisitions costs. NOI provides a measure of rental operations, and does not factor in depreciation and amortization and non-property specific expenses such as interest expense and general and administrative expenses. EBITDAre and Adjusted EBITDA provides a tool to further evaluate the ability to incur and service debt and to fund dividends and other cash needs. AFFO provides a supplemental tool to evaluate the Company’s performance. In addition, NOI, Same Property NOI, Same Property Cash NOI, EBITDAre, Adjusted EBITDA, FFO, Core FFO and AFFO are commonly used in various ratios, pricing multiples, yields and returns and valuation of calculations used to measure financial position, performance and value. As used herein, the Company calculates the following non-U.S. GAAP measures as follows:

 

FFO, as defined by The National Association of Real Estate Investment Trusts (NAREIT), to be equal to net income applicable to common shareholders, as defined by U.S. GAAP, excluding extraordinary items as defined by U.S. GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization. FFO includes gains and losses realized on sale of securities investments. NAREIT created FFO as a non-U.S. GAAP supplemental measure of REIT operating performance and is used by industry analysts and investors as a supplemental operating performance measure of a REIT.

 

Core FFO is calculated as FFO plus acquisition costs and costs associated with the redemption of preferred stock.

 

AFFO is calculated as Core FFO, excluding lease termination income, net gain or loss on sale of securities transactions, stock based compensation expense, depreciation of corporate office tenant improvements, amortization of deferred financing costs, non-recurring other expense, U.S. GAAP straight-line rent adjustments and less recurring capital expenditures. Recurring capital expenditures are defined as all capital expenditures that are recurring in nature, excluding capital expenditures related to expansions at our current locations or capital expenditures that are incurred in conjunction with obtaining a new lease or a lease renewal.

 

NOI from property operations is calculated as net income attributable to common shareholders, as defined by U.S. GAAP, plus redemption of preferred stock, preferred dividends, general & administrative expenses, acquisitions costs, depreciation, amortization of capitalized lease costs & intangible assets and interest expense, including amortization of financing costs, less dividend and interest income, gain on sale of securities transactions, gain on sale of real estate investments, and lease termination income. The components of NOI consist of recurring rental and reimbursement revenue, less real estate taxes and operating expenses, such as insurance, utilities, and repairs and maintenance and other expenses.

 

Same Property NOI is calculated as the NOI of all properties owned during the entire periods presented with the exclusion of any properties expanded during the periods presented.

 

Same Property Cash NOI is calculated as the Same Property NOI adjusted to exclude the effect of non-cash U.S. GAAP straight-line rent adjustment for the properties included in the Same Property NOI calculation.

 

EBITDAre, as defined by NAREIT, is net income attributable to common shareholders, as defined by U.S. GAAP, plus preferred dividends, redemption of preferred stock, interest expense, including amortization of financing costs, depreciation and amortization, and plus losses (minus gains) on sales of real estate investments.

 

Adjusted EBITDA is calculated as EBITDAre plus acquisition costs, net amortization of acquired above and below market lease revenue, and plus losses (minus gains) on sale of securities transactions.

 

FFO, Core FFO, AFFO, NOI, Same Property NOI, Same Property Cash NOI, EBITDAre and Adjusted EBITDA, do not represent cash generated from operating activities in accordance with U.S. GAAP and are not necessarily indicative of cash available to fund cash needs, including the repayment of principal on debt and payment of dividends and distributions. FFO, Core FFO, AFFO, NOI, Same Property NOI, Same Property Cash NOI, EBITDAre and Adjusted EBITDA should not be considered as substitutes for net income applicable to common shareholders (calculated in accordance with U.S. GAAP) as a measure of results of operations or cash flows (calculated in accordance with U.S. GAAP) as a measure of liquidity. FFO, Core FFO, AFFO, NOI, Same Property NOI, Same Property Cash NOI, EBITDAre and Adjusted EBITDA, as currently calculated by the Company, may not be comparable to similarly titled, but variously calculated, measures of other REITs.

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 20 of 24

 

 

FOR IMMEDIATE RELEASE   August 1, 2018
    Contact: Susan Jordan
    732-577-9996

 

MONMOUTH REAL ESTATE REPORTS RESULTS FOR

THE THIRD QUARTER ENDED JUNE 30, 2018

 

FREEHOLD, NJ, August 1, 2018.              Monmouth Real Estate Investment Corporation (NYSE:MNR) reported Net Income Attributable to Common Shareholders of $10,323,000 or $0.13 per diluted share for the three months ended June 30, 2018 as compared to $5,217,000 or $0.07 per diluted share for the three months ended June 30, 2017 representing an increase per share of 86%. Core Funds from Operations (Core FFO) were $17,988,000 or $0.23 per diluted share for the three months ended June 30, 2018 as compared to $15,441,000 or $0.21 per diluted share for the three months ended June 30, 2017 representing an increase in Core FFO per share of 10%. Adjusted Funds from Operations (AFFO), for the three months ended June 30, 2018 were $17,348,000 or $0.22 per diluted share versus $13,960,000 or $0.19 per diluted share for the three months ended June 30, 2017 representing an increase in AFFO per share of 16%.

 

A summary of significant financial information for the three and nine months ended June 30, 2018 and 2017 is as follows:

 

  

Three Months Ended

June 30,

 
   2018   2017 
Rental Revenue  $29,256,000   $24,400,000 
Reimbursement Revenue  $6,942,000   $4,209,000 
Net Operating Income (NOI) (1)  $28,789,000   $24,036,000 
Total Expenses  $19,073,000   $14,131,000 
Dividend and Interest Income  $3,628,000   $1,899,000 
Gain on Sale of Securities Transactions  $-0-   $1,488,000 
Gain on Sale of Real Estate Investments  $2,097,000   $-0- 
Net Income  $14,571,000   $11,730,000 
Net Income Attributable to Common Shareholders  $10,323,000   $5,217,000 
Net Income Attributable to Common Shareholders Per Diluted Common Share  $0.13   $0.07 
Core FFO (1)  $17,988,000   $15,441,000 
Core FFO per Diluted Common Share (1)  $0.23   $0.21 
AFFO (1)  $17,348,000   $13,960,000 
AFFO per Diluted Common Share (1)  $0.22   $0.19 
Dividends Declared per Common Share  $0.17   $0.16 
           
Weighted Avg. Diluted Common Shares Outstanding   79,572,000    73,054,000 

 

  

Nine Months Ended

June 30,

 
   2018   2017 
Rental Revenue  $85,559,000   $71,292,000 
Reimbursement Revenue  $17,003,000   $11,807,000 
Lease Termination Income  $210,000   $-0- 
Net Operating Income (NOI) (1)  $84,597,000   $70,184,000 
Total Expenses  $52,262,000   $41,179,000 
Dividend and Interest Income  $9,380,000   $4,631,000 
Gain on Sale of Securities Transactions  $111,000   $2,294,000 
Gain on Sale of Real Estate Investments  $7,485,000   $-0- 
Net Income  $43,846,000   $30,009,000 
Net Income Attributable to Common Shareholders  $31,033,000   $16,216,000 
Net Income Attributable to Common Shareholders Per Diluted Common Share  $0.40   $0.23 
Core FFO (1)  $51,752,000   $41,694,000 
Core FFO per Diluted Common Share (1)  $0.66   $0.58 
AFFO (1)  $50,667,000   $39,411,000 
AFFO per Diluted Common Share (1)  $0.65   $0.55 
Dividends Declared per Common Share  $0.51   $0.48 
           
Weighted Avg. Diluted Common Shares Outstanding   78,099,000    71,423,000 

 

A summary of significant balance sheet information as of June 30, 2018 and September 30, 2017 is as follows:

 

   June 30, 2018   September 30, 2017 
Net Real Estate Investments  $1,408,584,000   $1,260,856,000 
Securities Available for Sale at Fair Value  $167,594,000   $123,765,000 
Total Assets  $1,624,481,000   $1,443,038,000 
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs  $657,083,000   $591,364,000 
Loans Payable  $157,793,000   $120,091,000 
Total Shareholders’ Equity  $788,914,000   $712,866,000 

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 21 of 24

 

Michael P. Landy, President and CEO, commented on the results for the third quarter of fiscal 2018,

 

“We are pleased to report another strong quarter for Monmouth. During the quarter we:

 

  ● Increased our per share Core FFO to $0.23, representing a 10% increase over the prior year period
     
  ● Increased our per share AFFO to $0.22, representing a 16% increase over the prior year period
     
  ● Increased our Net Income Attributable to Common Shareholders to $0.13 per share, representing an 86% increase over the prior year period
     
  ● Increased our Net Operating Income (NOI) by 20% over the prior year period
     
  ● Increased our Gross Revenue by 31% to $39.8 million, compared to $30.5 million in the prior year period
     
  ● Acquired two, brand new, Class A built-to-suit properties comprising 762,000 square feet, for a cost of $64.4 million
     
  ● Grew our acquisition pipeline over the quarter to four, brand new, Class A build-to-suit properties, representing 1.1 million square feet for a total purchase price of $221.4 million, all net-leased to investment grade tenants
     
  ● Increased our gross leasable area (GLA) by 15% to 20.5 million square feet over the prior year period
     
  ● Maintained our weighted average lease maturity at 7.8 years
     
  ● Increased our occupancy rate by 40 bps sequentially and maintained our sector leading occupancy rate year over year at 99.6% as of the quarter end
     
  ● Renewed 9 of the sixteen leases scheduled to expire in fiscal 2018. These 9 leases consist of 890,000 square feet and result in a 3.9% increase in GAAP rents and a 2.4% increase on a cash basis. These lease renewals have a weighted average lease term of 6.5 years
     
  ● Increased our securities investments by 16% during the quarter to $167.6 million, all attributable to rising prices on our holdings, and
     
  ● Reduced our weighted average interest rate on our fixed rate debt by 10 bps to 4.11% as of the current quarter end, and maintained our weighted average debt maturity on our fixed rate debt at 11.5 years.”

 

Mr. Landy further stated, “Monmouth has maintained or increased its common stock dividend for 26 consecutive years. We have increased our AFFO per share by 16% over the prior year quarter and by 18% year over year for the nine-month period. With a very conservative 77% AFFO dividend payout ratio this quarter, we remain confident about continuing to provide our shareholders with the high-quality, reliable income streams we have delivered for over a quarter century. This quarter represented our 10th consecutive quarter with an occupancy rate above 99%. At quarter end, our weighted average lease maturity remained 7.8 years, and our weighted average debt maturity remained 11.5 years, providing excellent long-term visibility for continued strong results.”

 

“Thus far in fiscal 2018, we have acquired five buildings comprising 2.0 million square feet and 260.4 total acres, for a total purchase price of $174.0 million. During the quarter, we acquired two, brand new, Class A built-to-suit properties for an aggregate cost of $64.4 million. One property consists of a 399,000 square foot industrial building, situated on 27.5 acres in Daytona Beach, FL, net-leased for 10 years to B. Braun Medical Inc. Florida consistently ranks as one of our nation’s strongest and most business-friendly states and represents 11% of our property portfolio. The other property is a 363,000 square foot industrial building, situated on 31.3 acres, located in Mobile, AL, and is net-leased to Amazon for 11 years. This property is strategically located at the Port of Mobile, a beneficiary of the recently expanded Panama Canal. With over 400 million tons in shipments last year, the Panama Canal has surpassed all projections. In a similar manner to building out our large ecommerce exposure in anticipation of the digital revolution, we have assembled a portfolio that is very well positioned to benefit from the remaking of the global supply chain.”

 

“Thus far in fiscal 2018, we have renewed nine of the sixteen leases that were set to expire. These nine lease renewals total 890,000 square feet, representing 58% of the expiring square footage. These lease renewals resulted in a 3.9% rental increase on a GAAP basis, and a 2.4% increase on a cash basis. These nine lease renewals have a weighted average lease term of 6.5 years. Three of the remaining seven properties were sold, generating substantial gains during fiscal 2018. One property has been re-tenanted and one 80,000 square foot lease did not renew. We expect to have more to report on the remaining two properties during the remainder of fiscal 2018.”

 

“Our REIT securities investments performed very well during the quarter with a total value of $167.6 million at quarter end representing a 16% increase over the prior quarter. All of this increase is attributable to rising prices on our holdings. Our securities investments had an unrealized loss of $8.4 million at quarter end representing a $22.8 million improvement over the prior quarter. Our securities investments generated $3.6 million in dividend income during the quarter representing a 91% increase over the prior year period. At quarter end, our REIT securities investments represented 9.2% of our total undepreciated assets.”

 

“Our acquisition pipeline grew over the quarter and currently contains four, brand new, Class A build-to-suit industrial buildings. Each of these four properties is net-leased to FedEx Ground Package System, Inc. These properties contain approximately 1.1 million total square feet and are situated on 235.2 total acres. The total purchase price for these four properties is approximately $221.4 million with a weighted average lease term of 13.9 years. We anticipate closing these transactions sometime during the remainder of fiscal 2018 and the first quarter of fiscal 2019. We look forward to reporting continued progress throughout the year.”

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 22 of 24

 

Monmouth Real Estate Investment Corporation will host its Third Quarter FY 2018 Financial Results Webcast and Conference Call on Thursday, August 2, 2018 at 10:00 a.m. Eastern Time. Senior management will discuss the results, current market conditions and future outlook.

 

The Company’s Third Quarter FY 2018 financial results being released herein will be available on the Company’s website at www.mreic.reit in the Investor Relations section, under Filings and Reports.

 

To participate in the Webcast, select the 3Q2018 Webcast and Earnings Call “Link to Webcast” on the homepage of the Company’s website at www.mreic.reit in the Highlights section, which is located towards the bottom of the homepage. Interested parties can also participate via conference call by calling toll free 877-510-5852 (domestically) or 412-902-4138 (internationally).

 

The replay of the conference call will be available at 12:00 p.m. Eastern Time on Thursday August 2, 2018. It will be available until November 20, 2018, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10120748. A transcript of the call and the webcast replay will be available at the Company’s website on the Investor Relations homepage, www.mreic.reit.

 

Monmouth Real Estate Investment Corporation, founded in 1968, is one of the oldest public equity REITs in the world. The Company specializes in single tenant, net-leased industrial properties, subject to long-term leases, primarily to investment-grade tenants. Monmouth Real Estate is a fully-integrated and self-managed real estate company, whose property portfolio consists of 109 properties containing a total of approximately 20.5 million rentable square feet, geographically diversified across 30 states. In addition, the Company owns a portfolio of REIT securities.

 

Certain statements included in this press release which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are based on the Company’s current expectations and involve various risks and uncertainties. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can provide no assurance those expectations will be achieved. The risks and uncertainties that could cause actual results or events to differ materially from expectations are contained in the Company’s annual report on Form 10-K and described from time to time in the Company’s other filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.

 

Notes:

 

(1) Non-U.S. GAAP Information: FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as net income applicable to common shareholders, excluding gains or losses from sales of depreciable assets, plus real estate-related depreciation and amortization. We define Core FFO as FFO plus acquisition costs and costs associated with the redemption of preferred stock. We define AFFO as Core FFO, excluding lease termination income, net gain or loss on sale of securities transactions, stock based compensation expense, depreciation of corporate office tenant improvements, amortization of deferred financing costs, non-recurring other expense, U.S. GAAP straight-line rent adjustments and less recurring capital expenditures. We define recurring capital expenditures as all capital expenditures that are recurring in nature, excluding capital expenditures related to expansions at our current locations or capital expenditures that are incurred in conjunction with obtaining a new lease or a lease renewal. We define NOI as recurring rental and reimbursement revenues less real estate taxes and other operating expenses. FFO, Core FFO and AFFO per diluted common share are defined as FFO, Core FFO and AFFO divided by weighted average diluted common shares outstanding. FFO, Core FFO and AFFO per diluted common share, as well as NOI, should be considered as supplemental measures of operating performance used by real estate investment trusts (REITs). FFO, Core FFO and AFFO per diluted common share exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have different cost basis. However, other REITs may use different methodologies to calculate FFO, Core FFO and AFFO and, accordingly, our FFO, Core FFO and AFFO may not be comparable to all other REITs. The items excluded from FFO, Core FFO and AFFO per diluted common share are significant components in understanding the Company’s financial performance.

 

FFO, Core FFO and AFFO per diluted common share (A) do not represent cash flow from operations as defined by accounting principles generally accepted in the United States of America; (B) should not be considered as an alternative to net income as a measure of operating performance or to cash flows from operating, investing and financing activities; and (C) are not alternatives to cash flow as a measure of liquidity. FFO, Core FFO and AFFO per diluted common share, as well as NOI, as calculated by the Company, may not be comparable to similarly titled measures reported by other REITs.

 

The following is a reconciliation of the Company’s U.S. GAAP Net Income to the Company’s FFO, Core FFO and AFFO for the three and nine months ended June 30, 2018 and 2017:

 

   Three Months Ended   Nine Months Ended 
    6/30/2018    6/30/2017    6/30/2018    6/30/2017 
Net Income Attributable to Common Shareholders  $10,323,000   $5,217,000   $31,033,000   $16,216,000 
Plus: Depreciation Expense (excluding Corporate Office Capitalized Costs)   9,123,000    7,279,000    26,386,000    21,333,000 
Plus: Amortization of Intangible Assets   417,000    263,000    1,158,000    771,000 
Plus: Amortization of Capitalized Lease Costs   222,000    215,000    660,000    633,000 
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments   (2,097,000)   -0-    (7,485,000)   95,000 
FFO Attributable to Common Shareholders   17,988,000    12,974,000    51,752,000    39,048,000 
Plus: Acquisition Costs   -0-    -0-    -0-    179,000 
Plus: Redemption of Preferred Stock   -0-    2,467,000    -0-    2,467,000 
Core FFO Attributable to Common Shareholders   17,988,000    15,441,000    51,752,000    41,694,000 
Plus: Depreciation of Corporate Office Capitalized Costs   39,000    39,000    118,000    117,000 
Plus: Stock Compensation Expense   97,000    175,000    339,000    441,000 
Plus: Amortization of Financing Costs   315,000    283,000    911,000    950,000 
Less: Gain on Sale of Securities Transactions   -0-    (1,488,000)   (111,000)   (2,294,000)
Less: Lease Termination Income   -0-    -0-    (210,000)   -0- 
Less: Recurring Capital Expenditures   (490,000)   (195,000)   (774,000)   (572,000)
Less: Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment   (601,000)   (295,000)   (1,358,000)   (925,000)
AFFO Attributable to Common Shareholders  $17,348,000   $13,960,000   $50,667,000   $39,411,000 

 

 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 23 of 24

 

The following are the Cash Flows provided (used) by Operating, Investing and Financing Activities for the nine months ended June 30, 2018 and 2017:

 

   Nine Months Ended 
    6/30/2018    6/30/2017 
           
Operating Activities  $63,094,000   $50,191,000 
Investing Activities   (216,285,000)   (232,827,000)
Financing Activities   149,857,000    (98,637,000)

 

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 Third Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 24 of 24

 

 

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