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Section 1: 8-K

 

 

 

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

 

Date of Report (Date of earliest event reported) February 7, 2019

 

MONMOUTH REAL ESTATE INVESTMENT CORPORATION

(Exact name of registrant as specified in its charter)

 

MARYLAND   001-33177   22-1897375
(State or other jurisdiction   (Commission    (IRS Employer
 of incorporation)   File Number)   Identification No.)

 

3499 Route 9N, Suite 3D, Freehold, NJ   07728
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code (732) 577-9996

 

 

(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 Instructions A.2. below):

 

[  ] Written communications pursuant to Rule 425 under Securities Act (17 CFR 230.425)
   
[  ] Soliciting material pursuant to Rule 142-12 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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company [  ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

 

 

   

 

 

Item 2.02 Results of Operations and Financial Condition.

 

Item 7.01 Regulation FD Disclosure.

 

On February 7, 2019, Monmouth Real Estate Investment Corporation issued a press release announcing the results for the first quarter ended December 31, 2018 and disclosed a supplemental information package in connection with its earnings conference call for the first quarter ended December 31, 2018. A copy of the supplemental information package and press release is furnished with this report as Exhibit 99 and is incorporated herein by reference.

 

The information in this report and the exhibit attached hereto is being furnished, not filed, for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and pursuant to Item 2.02 and Item 7.01 of Form 8-K will not be incorporated by reference into any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

 

Forward-Looking Statements

 

Statements contained in this report, including the documents that are incorporated by reference, that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995 (the “Exchange Act”). All statements, other than statements of historical facts that address activities, events or developments where the Company uses any of the words “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “intends,” or similar expressions, are forward-looking statements. These forward-looking statements are not guaranteed and are based on the Company’s current intentions and on the Company’s current expectations and assumptions. These statements, intentions, expectations and assumptions involve risks and uncertainties, some of which are beyond the Company’s control that could cause actual results or events to differ materially from those that the Company anticipates or projects, such as:

 

  the ability of the Company’s tenants to make payments under their respective leases, its reliance on certain major tenants and the Company’s ability to re-lease properties that are currently vacant or that become vacant;
  the Company’s ability to obtain suitable tenants for its properties;
  changes in real estate market conditions, economic conditions in the industrial sector and the market in which the Company’s properties are located and general economic conditions;
  the inherent risks associated with owning real estate, including local real estate market conditions, governing laws and regulations and illiquidity of real estate investments;
  the Company’s ability to acquire, finance and sell properties on attractive terms;
  the Company’s ability to repay debt financing obligations;
  the Company’s ability to refinance amounts outstanding under its mortgages and credit facilities at maturity on terms favorable to us, or at all;
  the loss of any member of the Company’s management team;
  the Company’s ability to comply with debt covenants;
  the Company’s ability to integrate acquired properties and operations into existing operations;
  continued availability of proceeds from issuances of the Company’s debt or equity securities;
  the availability of other debt and equity financing alternatives;
  market conditions affecting the Company’s investment in marketable securities of other REIT’s;
  changes in interest rates under the Company’s current credit facility and under any additional variable rate debt arrangements that the Company may enter into in the future;
  the Company’s ability to successfully implement the Company’s selective acquisition strategy;
  the Company’s ability to maintain internal controls and procedures to ensure all transactions are accounted for properly, all relevant disclosures and filings are timely made in accordance with all rules and regulations, and any potential fraud or embezzlement is thwarted or detected;
  changes in federal or state tax rules or regulations that could have adverse tax consequences;
  declines in the market prices of the Company’s investment securities; and
  the Company’s ability to qualify as a REIT for federal income tax purposes.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

  99 Supplemental information package for the first quarter ended December 31, 2018 and press release dated February 7, 2019.

 

  2

 

 

SIGNATURES

 

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 hereunto duly authorized.

 

MONMOUTH REAL ESTATE INVESTMENT CORPORATION

 

/s/ Kevin S. Miller  
KEVIN S. MILLER  
Chief Financial and Accounting Officer  
   
Date February 7, 2019  

 

  3

 

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Section 2: EX-99.1

 

 

 
 

 

 

Table of Contents

 

  Page
Consolidated Balance Sheets 3
Consolidated Statements of Income (Loss) 4
FFO, Core FFO, AFFO, EBITDAre, Adjusted EBITDA 5
NOI Reconciliations 6
Financial Highlights 7
Same Property Statistics 8
Consolidated Statements of Cash Flows 9
Capital Structure and Leverage Ratios 10
Debt Maturity 12
Securities Portfolio Historic Performance 13
Property Table by Tenant 15
Property Table by State 16
Lease Expirations 17
Recent Acquisitions 18
Property Table 19
Definitions 22
Press Release Dated February 7, 2019 23

 

The statement of operations and supplemental statement of operations provided in this supplemental information package present funds from operations (FFO), core funds from operations (Core FFO), adjusted funds from operations (AFFO), net operating income (NOI), 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 22 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.

 

 
Table of Contents 

 

Consolidated Balance Sheets

 

   As of   As of 
  December 31, 2018   September 30, 2018 
   (unaudited)     
ASSETS        
Real Estate Investments:          
Land  $236,496,768   $224,719,083 
Buildings and Improvements   1,598,894,954    1,494,859,336 
Total Real Estate Investments   1,835,391,722    1,719,578,419 
Accumulated Depreciation   (217,503,811)   (207,065,634)
Real Estate Investments   1,617,887,911    1,512,512,785 
           
Cash and Cash Equivalents   12,768,766    9,324,585 
Securities Available for Sale at Fair Value   145,810,088    154,920,545 
Tenant and Other Receivables   6,673,026    1,249,434 
Deferred Rent Receivable   10,022,552    9,656,179 
Prepaid Expenses   11,364,081    6,189,796 
Intangible Assets, net of Accumulated Amortization of $14,199,559 and $13,699,519, respectively   15,976,082    14,589,756 
Capitalized Lease Costs, net of Accumulated Amortization of $3,409,446 and $3,271,481, respectively   5,003,816    5,231,845 
Financing Costs, net of Accumulated Amortization of $1,089,169 and $995,135, respectively   407,212    500,129 
Other Assets   3,443,080    4,202,832 
TOTAL ASSETS  $1,829,356,614   $1,718,377,886 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
           
Liabilities:          
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs  $771,705,118   $711,545,649 
Loans Payable   125,814,547    186,608,676 
Accounts Payable and Accrued Expenses   3,957,172    5,891,172 
Other Liabilities   22,323,567    16,426,622 
Total Liabilities   923,800,404    920,472,119 
           
COMMITMENTS AND CONTINGENCIES          
           
Shareholders’ Equity:          
6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 Par Value Per Share: 16,400,000 Shares Authorized as of December 31, 2018 and September 30, 2018; 11,532,445 and 11,488,001 Shares Issued and Outstanding as of December 31, 2018 and September 30, 2018, respectively   288,311,125    287,200,025 
Common Stock, $0.01 Par Value Per Share: 188,039,750 Shares Authorized as of December 31, 2018 and September 30, 2018; 92,335,115 and 81,503,134 Shares Issued and Outstanding as of December 31, 2018 and September 30, 2018, respectively   923,351    815,031 
Excess Stock, $0.01 Par Value Per Share: 200,000,000 Shares Authorized as of December 31, 2018 and September 30, 2018; No Shares Issued or Outstanding as of December 31, 2018 and September 30, 2018   -0-    -0- 
Additional Paid-In Capital   616,321,734    534,635,290 
Accumulated Other Comprehensive Loss   -0-    (24,744,579)
Undistributed Income   -0-    -0- 
Total Shareholders’ Equity   905,556,210    797,905,767 
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY  $1,829,356,614   $1,718,377,886 

 

FIRST quarter Fiscal year 2019 supplemental information3
Table of Contents 

 

Consolidated Statements of Income (Loss)

(unaudited)

 

  For The 
  Three Months Ended 
   12/31/2018   12/31/2017 
INCOME:          
Rental Revenue  $32,616,825   $27,692,482 
Reimbursement Revenue   6,529,789    5,772,167 
Lease Termination Income   -0-    210,261 
TOTAL INCOME   39,146,614    33,674,910 
           
EXPENSES:          
Real Estate Taxes   4,963,800    4,585,490 
Operating Expenses   1,864,247    1,436,241 
General & Administrative Expenses   1,816,892    1,947,032 
Depreciation   10,477,844    8,483,984 
Amortization of Capitalized Lease Costs and Intangible Assets   702,393    538,071 
TOTAL EXPENSES   19,825,176    16,990,818 
           
OTHER INCOME (EXPENSE):          
Dividend and Interest Income   4,367,634    2,864,217 
Gain on Sale of Securities Transactions   -0-    100,153 
Unrealized Holding Losses Arising During the Period   (42,626,889)   -0- 
Interest Expense, including Amortization of Financing Costs   (9,005,405)   (7,405,947)
TOTAL OTHER INCOME (EXPENSE)   (47,264,660)   (4,441,577)
           
INCOME (LOSS) FROM CONTINUING OPERATIONS   (27,943,222)   12,242,515 
           
Gain on Sale of Real Estate Investments   -0-    5,387,886 
           
NET INCOME (LOSS)   (27,943,222)   17,630,401 
           
Less: Preferred Dividends   4,420,441    4,316,946 
           
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS  $(32,363,663)  $13,313,455 

 

FIRST quarter Fiscal year 2019 supplemental information4
Table of Contents 

 

FFO, Core FFO, AFFO, EBITDAre and Adjusted EBITDA Reconciliations

(unaudited)

 

   For The 
   Three Months Ended 
FFO, Core FFO, AFFO  12/31/2018   12/31/2017 
Net Income (Loss) Attributable to Common Shareholders  $(32,363,663)  $13,313,455 
Plus: Depreciation Expense (excluding Corporate Office Capitalized Costs)   10,438,176    8,444,507 
Plus: Amortization of Intangible Assets   500,040    343,746 
Plus: Amortization of Capitalized Lease Costs   228,030    220,002 
Less: Gain on Sale of Real Estate Investments   -0-    (5,387,886)
FFO Attributable to Common Shareholders   (21,197,417)   16,933,824 
Plus: Unrealized Holding Losses Arising During the Period   42,626,889    -0- 
Core FFO Attributable to Common Shareholders   21,429,472    16,933,824 
Plus: Stock Compensation Expense   129,026    130,763 
Plus: Depreciation of Corporate Office Capitalized Costs   39,668    39,477 
Plus: Amortization of Financing Costs   317,113    293,894 
Less: Lease Termination Income   -0-    (210,261)
Less: Gain on Sale of Securities Transactions   -0-    (100,153)
Less: Effect of non-cash U.S. GAAP Straight-line Rent Adjustment   (336,484)   (396,028)
Less: Recurring Capital Expenditures   (556,725)   (219,246)
AFFO Attributable to Common Shareholders  $21,022,070   $16,472,270 

 

   For The 
   Three Months Ended 
EBITDAre, Adjusted EBITDA  12/31/2018   12/31/2017 
Net Income (Loss) Attributable to Common Shareholders  $(32,363,663)  $13,313,455 
Plus: Preferred Dividends   4,420,441    4,316,946 
Plus: Interest Expense, including Amortization of Financing Costs   9,005,405    7,405,947 
Plus: Depreciation and Amortization   11,180,237    9,022,055 
Less: Gain on Sale of Real Estate Investments   -0-    (5,387,886)
EBITDAre   (7,757,580)   28,670,517 
Plus: Net Amortization of Acquired Above and Below Market Lease Revenue   25,677    25,677 
Plus: Unrealized Holding Losses Arising During the Period   42,626,889    -0- 
Less: Gain on Sale of Securities Transactions   -0-    (100,153)
Adjusted EBITDA  $34,894,986   $28,596,041 

 

FIRST quarter Fiscal year 2019 supplemental information5
Table of Contents 

 

NOI Reconciliations

(unaudited)

 

   For The 
   Three Months Ended 
Net Operating Income  12/31/2018   12/31/2017 
Net Income (Loss) Attributable to Common Shareholders  $(32,363,663)  $13,313,455 
Plus: Preferred Dividends   4,420,441    4,316,946 
Plus: General & Administrative Expenses   1,816,892    1,947,032 
Plus: Depreciation   10,477,844    8,483,984 
Plus: Amortization of Capitalized Lease Costs and Intangible Assets   702,393    538,071 
Plus: Interest Expense, including Amortization of Financing Costs   9,005,405    7,405,947 
Plus: Unrealized Holding Losses Arising During the Period   42,626,889    -0- 
Less: Dividend and Interest Income   (4,367,634)   (2,864,217)
Less: Gain on Sale of Securities Transactions   -0-    (100,153)
Less: Gain on Sale of Real Estate Investments   -0-    (5,387,886)
Less: Lease Termination Income   -0-    (210,261)
Net Operating Income – NOI  $32,318,567   $27,442,918 

 

   For The 
   Three Months Ended 
Components of Net Operating Income Consists of:  12/31/2018   12/31/2017 
Revenues:          
Rental Revenue  $32,616,825   $27,692,482 
Reimbursement Revenue   6,529,789    5,772,167 
Total Rental and Reimbursement Revenue   39,146,614    33,464,649 
           
Expenses:          
Real Estate Taxes   4,963,800    4,585,490 
Operating Expenses   1,864,247    1,436,241 
Total Real Estate Taxes and Operating Expenses   6,828,047    6,021,731 
Net Operating Income – NOI  $32,318,567   $27,442,918 

 

FIRST quarter Fiscal year 2019 supplemental information6
Table of Contents 

 

Financial Highlights

(unaudited)

 

   For The 
   Three Months Ended 
   12/31/2018   12/31/2017   Change (%) 
             
Weighted Average Common Shares Outstanding               
Basic   90,505,329    76,375,400    18.5%
Diluted   90,659,652    76,586,782    18.4%
                
Net Income (Loss) Attributable to Common Shareholders  $(32,363,663)  $13,313,455    (343.1)%
                
Basic  $(0.36)  $0.17    (311.8)%
Diluted   (0.36)   0.17    (311.8)%
                
Net Operating Income – NOI  $32,318,567   $27,442,918    17.8%
                
Basic  $0.36   $0.36    0.00%
Diluted   0.36    0.36    0.00%
                
Funds From Operations – FFO  $(21,197,417)  $16,933,824    (225.2)%
                
Basic  $(0.23)  $0.22    (204.5)%
Diluted   (0.23)   0.22    (204.5)%
                
Core Funds From Operations - Core FFO  $21,429,472   $16,933,824    26.5%
                
Basic  $0.24   $0.22    9.1%
Diluted   0.24    0.22    9.1%
                
Adjusted Funds From Operations – AFFO  $21,022,070   $16,472,270    27.6%
                
Basic  $0.23   $0.22    4.5%
Diluted   0.23    0.22    4.5%
                
Dividends Declared per Common Share  $0.17   $0.17      
                
Dividend/AFFO Payout Ratio   73.9%   77.3%     

 

FIRST quarter Fiscal year 2019 supplemental information7
Table of Contents 

 

Same Property Statistics

(unaudited)

 

   For The
Three Months Ended
         
   12/31/2018       12/31/2017   Change   Change % 
                     
Total Square Feet / Total Properties   21,647,246 / 113        19,096,237 / 108    2,551,009    13.4%
                          
Occupancy Percentage at End of Period   98.9%       99.5%   (60) bps    (0.6)%
                          
Same Property Square Feet / Number of Same Properties       18,013,923 / 102                
                          
Same Property Occupancy Percentage at End of Period   98.7%       100.00%   (130) bps    (1.3)%
                          
Same Property Net Operating Income (NOI) (GAAP)  $25,796,328       $25,981,342   $(185,014)   (0.7)%
                          
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment   (274,892)       (400,231)   125,339      
Same Property Cash NOI  $25,521,436       $25,581,111   $(59,675)   (0.2)%

 

Same Property Statistics include all properties owned during the entire periods presented with the exclusion of properties expanded during the periods presented. Historically, there have been many properties expanded in our portfolio and these expansions have resulted in very favorable economic returns. This factor should be taken into account when analyzing our Same Property results.

 

The 0.7% decrease, amounting to $185,014 in Same Property NOI, consists of $108,319 derived from decreased NOI from occupied properties and $76,695 attributable to decreased NOI from vacant properties.

 

The 0.2% decrease, amounting to $59,675 in Same Property Cash NOI, consists of $78,801 derived from decreased NOI from vacant properties offset by a $19,126 increase in Cash NOI from occupied properties.

 

Reconciliation of Same Property NOI to Total NOI

 

   For The
Three Months Ended
         
   12/31/2018   12/31/2017   Change   Change % 
                 
Same Property NOI (GAAP)  $25,796,328   $25,981,342   $(185,014)   (0.7)%
                     
NOI of properties purchased subsequent to September 30, 2017 (two properties purchased during fiscal 2019 and seven properties purchased during fiscal 2018)   5,699,787    376,319           
                     
NOI of properties expanded subsequent to September 30, 2017 (two properties expanded during fiscal 2018)   822,452    764,540           
                     
NOI of properties sold subsequent to September 30, 2017 (four properties sold during fiscal 2018)   -0-    320,717           
Total NOI  $32,318,567   $27,442,918   $4,875,649    17.8%

 

FIRST quarter Fiscal year 2019 supplemental information8
Table of Contents 

 

Consolidated Statements of Cash Flows

(unaudited)

 

   For The 
   Three Months Ended 
   12/31/2018   12/31/2017 
CASH FLOWS FROM OPERATING ACTIVITIES          
Net Income (Loss)  $(27,943,222)  $17,630,401 
Noncash Items Included in Net Income (Loss):          
Depreciation & Amortization   11,497,350    9,315,949 
Deferred Straight Line Rent   (336,484)   (396,028)
Stock Compensation Expense   129,026    130,763 
Unrealized Holding Losses Arising During the Period   42,626,889    -0- 
Gain on Sale of Securities Transactions   -0-    (100,153)
Gain on Sale of Real Estate Investments   -0-    (5,387,886)
Changes in:          
Tenant & Other Receivables   (5,397,913)   (3,607,013)
Prepaid Expenses   (5,174,285)   (3,690,362)
Other Assets & Capitalized Lease Costs   1,224,442    (89,641)
Accounts Payable, Accrued Expenses & Other Liabilities   5,286,173    3,284,409 
NET CASH PROVIDED BY OPERATING ACTIVITIES   21,911,976    17,090,439 
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Purchase of Real Estate & Intangible Assets   (113,405,548)   (52,500,165)
Capital Improvements   (5,657,269)   (1,782,422)
Proceeds from Sale of Real Estate Investments   -0-    10,499,704 
Return of Deposits on Real Estate   200,000    450,000 
Deposits Paid on Acquisitions of Real Estate   (700,000)   (1,350,000)
Proceeds from Sale of Securities Available for Sale   -0-    2,435,168 
Purchase of Securities Available for Sale   (33,516,432)   (19,714,857)
NET CASH USED IN INVESTING ACTIVITIES   (153,079,249)   (61,962,572)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Net Repayments on Loans Payable   (60,794,129)   (10,091,417)
Proceeds from Fixed Rate Mortgage Notes Payable   72,500,000    33,800,000 
Principal Payments on Fixed Rate Mortgage Notes Payable   (12,121,151)   (12,351,030)
Financing Costs Paid on Debt   (443,576)   (361,905)
Proceeds from the Exercise of Stock Options   -0-    284,800 
Proceeds from Underwritten Public Offering of Common Stock, net of offering costs   132,338,335    -0- 
Proceeds from At-The-Market Preferred Equity Program,
net of offering costs
   1,006,150    25,687,516 
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments   17,595,425    22,611,458 
Preferred Dividends Paid   (4,414,770)   (4,080,685)
Common Dividends Paid, net of Reinvestments   (11,054,830)   (10,096,749)
NET CASH PROVIDED BY FINANCING ACTIVITIES   134,611,454    45,401,988 
           
NET INCREASE IN CASH AND CASH EQUIVALENTS   3,444,181    529,855 
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD   9,324,585    10,226,046 
CASH AND CASH EQUIVALENTS - END OF PERIOD  $12,768,766   $10,755,901 

 

FIRST quarter Fiscal year 2019 supplemental information9
Table of Contents 

 

Capital Structure and Leverage Ratios

(unaudited)

 

   As of   As of   As of 
   12/31/2018   12/31/2017   9/30/2018 
             
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs  $771,705,118   $612,651,435   $711,545,649 
Loans Payable   125,814,547    110,000,000    186,608,676 
Total Debt   897,519,665    722,651,435    898,154,325 
                
6.125% Series C Cumulative Redeemable Preferred Stock   288,311,125    271,984,475    287,200,025 
Common Stock, Paid-In-Capital & Other   617,245,085    482,099,326    510,705,742 
Total Shareholders’ Equity   905,556,210    754,083,801    797,905,767 
                
Total Book Capitalization   1,803,075,875    1,476,735,236    1,696,060,092 
                
Accumulated Depreciation   217,503,811    182,232,695    207,065,634 
Total Undepreciated Book Capitalization  $2,020,579,686   $1,658,967,931   $1,903,125,726 
                
Shares Outstanding   92,335,115    77,209,110    81,503,134 
Market Price Per Share  $12.40   $17.80   $16.72 
                
Equity Market Capitalization  $1,144,955,426   $1,374,322,158   $1,362,732,400 
Total Debt   897,519,665    722,651,435    898,154,325 
Total Preferred Stock   288,311,125    271,984,475    287,200,025 
Total Market Capitalization  $2,330,786,216   $2,368,958,068   $2,548,086,750 
                
Total Debt  $897,519,665   $722,651,435   $898,154,325 
less: Cash and Cash Equivalents   12,768,766    10,755,901    9,324,585 
Net Debt  $884,750,899   $711,895,534   $888,829,740 
less: Securities Available for Sale at Fair Value (Securities)   145,810,088    130,431,475    154,920,545 
Net Debt Less Securities  $738,940,811   $581,464,059   $733,909,195 
                
Net Debt / Total Undepreciated Book Capitalization   43.8%   42.9%   46.7%
Net Debt / Total Market Capitalization   38.0%   30.1%   34.9%
Net Debt Plus Preferred Stock / Total Market Capitalization   50.3%   41.5%   46.2%
Net Debt Less Securities / Total Undepreciated Book Capitalization   36.6%   35.0%   38.6%
Net Debt Less Securities / Total Market Capitalization   31.7%   24.5%   28.8%
Net Debt Less Securities Plus Preferred Stock / Total Market Capitalization   44.1%   36.0%   40.1%
                
Weighted Average Interest Rate on Fixed Rate Debt   4.08%   4.16%   4.07%
Weighted Average Term on Fixed Rate Debt   11.8 yrs.    11.5 yrs.    11.7 yrs. 
Weighted Average Lease Term   8.0 yrs.    7.9 yrs.    8.1 yrs. 

 

FIRST quarter Fiscal year 2019 supplemental information10
Table of Contents 

 

Capital Structure and Leverage Ratios

(unaudited)

 

   For The     
   Three Months Ended   Fiscal Year Ended 
   12/31/2018   12/31/2017   9/30/2018 
Net Income (Loss) Attributable to Common Shareholders  $(32,363,663)  $13,313,455   $38,815,344 
Plus: Preferred Dividends   4,420,441    4,316,946    17,190,456 
Plus: Interest Expense, including Amortization of Financing Costs   9,005,405    7,405,947    32,349,705 
Plus: Depreciation and Amortization   11,180,237    9,022,055    38,567,027 
Less: Gain on Sale of Real Estate Investments   -0-    (5,387,886)   (7,485,266)
EBITDAre   (7,757,580)   28,670,517    119,437,266 
Plus: Net Amortization of Acquired Above and Below Market Lease Revenue   25,677    25,677    102,708 
Plus: Unrealized Holding Losses Arising During the Period   42,626,889    -0-    -0- 
Less: Gain on Sale of Securities Transactions   -0-    (100,153)   (111,387)
Adjusted EBITDA  $34,894,986   $28,596,041   $119,428,587 
                
Interest Expense, including Amortization of Financing Costs  $9,005,405   $7,405,947   $32,349,705 
Preferred Dividends   4,420,441    4,316,946    17,190,456 
Total Fixed Charges  $13,425,846   $11,722,893   $49,540,161 
                
Interest Coverage   3.9 x    3.9 x    3.7 x 
Fixed Charge Coverage   2.6 x    2.4 x    2.4 x 
                
Net Debt  $884,750,899   $711,895,534   $888,829,740 
Net Debt Less Securities   738,940,811    581,464,059    733,909,195 
Total Preferred Stock   288,311,125    271,984,475    287,200,025 
Annualized Adjusted EBITDA   139,579,944    114,384,164    119,428,587 
                
Net Debt / Adjusted EBITDA   6.3 x    6.2 x    7.4 x 
Net Debt Less Securities / Adjusted EBITDA   5.3 x    5.1 x    6.1 x 
Net Debt + Preferred Stock / Adjusted EBITDA   8.4 x    8.6 x    9.8 x 
Net Debt Less Securities + Preferred Stock / Adjusted EBITDA   7.4 x    7.5 x    8.5 x 

 

FIRST quarter Fiscal year 2019 supplemental information11
Table of Contents 

 

Debt Maturity

(unaudited)

 

 

          Loans         % of 
Fiscal Year Ended     Mortgages   Payable     Total   Total 
                      
2019     $50,904,415   $15,814,547 (B)  $66,718,962    7.4%
2020      52,275,281    110,000,000 (C)   162,275,281    17.9%
2021      53,924,903    -0-      53,924,903    6.0%
2022      76,021,620    -0-      76,021,620    8.4%
2023      54,683,239    -0-      54,683,239    6.0%
Thereafter      492,337,746    -0-      492,337,746    54.3%
                          
Total as of 12/31/2018  (A)  $780,147,204   $125,814,547     $905,961,751    100.0%
                          
Weighted Average Interest Rate      4.08%   4.07%     4.08%     
Weighted Average Term      11.8 yrs.    1.5 yrs.      10.3 yrs.      

 

  (A) Mortgages does not include unamortized debt issuance costs of $8,442,086.
  (B) Represents margin debt which is due upon demand.
  (C) Represents the amount drawn down on a line of credit that has a one year extension option, which is not reflected above.

 

FIRST quarter Fiscal year 2019 supplemental information12
Table of Contents 

 

Securities Portfolio Historic Performance (Fiscal Year)

(unaudited)

 

 

Fiscal
Year
  Securities Portfolio
Cost (A)
   Securities Available
for Sale (A)
   Dividend Income   Net Realized
Gain on Sale of
Securities
   Change in Unrealized
Gain/
(Loss) (B)
   Total
Return
   Total
Return %
 
                             
2010  $24,027,834   $27,824,665   $2,387,757   $2,609,149   $6,319,226   $11,316,132    47.10%
2011   32,401,668    42,517,725    2,981,534    5,238,203    (7,747,894)   471,843    1.46%
2012   41,896,896    44,265,059    3,144,837    6,044,065    3,015,774    12,204,676    29.13%
2013   56,301,236    61,685,173    3,861,374    7,133,252    (3,394,669)   7,599,957    13.50%
2014   43,462,472    45,451,740    3,863,136    2,166,766    (1,867,912)   4,161,990    9.58%
2015   59,190,047    59,311,403    3,707,498    805,513    (5,562,959)   (1,049,948)   (1.77)%
2016   59,982,840    54,541,237    5,607,403    4,398,599    18,383,870    28,389,872    47.33%
2017   60,662,627    73,604,894    6,919,973    2,311,714    (6,371,702)   2,859,985    4.71%
2018   117,194,205    123,764,770    13,099,316    111,387    (31,315,144)   (18,104,441)   (15.45)%
As of 12/31/18   179,665,124    154,920,545    4,331,260    -0-    (42,626,889)   (38,295,628)   (21.32)%
                                    
Total            $49,904,088   $30,818,648   ($71,168,299)  $9,554,438    Avg. 11.43%

 

  (A) Fiscal Year beginning balance
  (B) Fiscal Year end balance

 

FIRST quarter Fiscal year 2019 supplemental information13
Table of Contents 

 

Securities Portfolio Historic Performance (Fiscal Year)

(unaudited)

 

 

FISCAL YEAR  MREIC REIT Portfolio (%)   MSCI REIT Index (RMS)(%)  

S&P 500 Index (%)

  

MREIC vs.

MSCI REIT Index (RMS)
∆ in BPS

  

MREIC vs.
S&P 500 Index
∆ in BPS

 
                     
2010   47.10    30.54    10.16    1656    3694 
2011   1.46    1.26    1.14    20    32 
2012   29.13    32.44    30.20    (331)   (107)
2013   13.50    5.75    19.34    775    (584)
2014   9.58    13.26    19.73    (368)   (1015)
2015   (1.77)   9.47    (0.61)   (1124)   (116)
2016   47.33    19.83    15.43    2750    3190 
2017   4.71    0.54    18.61    417    (1390)
2018   (15.45)   3.74    17.91    (1919)   (3336)
As of 12/31/18   (21.32)   (6.72)   (13.52)   (1460)   (780)
Average   11.43    11.01    11.84    42    (41)

 

Source: S&P Global Market Intelligence

 

FIRST quarter Fiscal year 2019 supplemental information14
Table of Contents 

 

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.      45    8,920,293    8,920,293    41.2%  $71,950,000    54.0%  $8.07   $1,018,756,311     $478,172,045 
FedEx Corporation      15    1,095,096    1,095,096    5.1%   6,719,000    5.0%   6.14    95,088,178      13,507,172 
FedEx Trade Networks, Inc.      1    449,900    449,900    2.0%   1,389,000    1.0%   3.09    14,614,986      4,850,224 
Total FedEx      61    10,465,289    10,465,289    48.3%   80,058,000    60.0%   7.65    1,128,459,475      496,529,441 
                                                   
Milwaukee Electric Tool Corporation      1    861,889    861,889    4.0%   3,054,000    2.3%   3.54    36,914,917      21,277,426 
Shaw Industries, Inc.      1    831,764    831,764    3.8%   3,495,000    2.6%   4.20    56,025,945      31,744,125 
ULTA, Inc.      1    671,354    671,354    3.1%   2,729,000    2.0%   4.06    37,512,071      19,819,329 
Amazon.com Services, Inc.      2    662,942    662,942    3.1%   3,927,000    2.9%   5.92    62,931,258      37,393,357 
Jim Beam Brands Company (Beam Suntory)      1    599,840    599,840    2.8%   2,071,000    1.6%   3.45    28,000,000      16,401,661 
International Paper Company      2    578,472    578,472    2.7%   2,615,000    2.0%   4.52    36,193,700      20,325,831 
TreeHouse Private Brands, Inc.      1    558,600    558,600    2.6%   2,226,000    1.7%   3.98    26,807,852      15,123,751 
B. Braun Medical Inc.      1    399,440    399,440    1.8%   2,138,000    1.7%   5.35    29,985,079      18,950,769 
CBOCS Distribution, Inc. (Cracker Barrel)      1    381,240    381,240    1.8%   1,461,000    1.1%   3.83    14,215,126      7,157,408 
Best Buy Warehousing Logistics, Inc.      1    368,060    368,060    1.7%   1,693,000    1.3%   4.60    19,600,000      9,148,541 
Coca-Cola      2    323,358    323,358    1.5%   1,709,000    1.3%   5.29    20,504,069      4,306,169 
Autoneum North America, Inc.      1    315,560    315,560    1.5%   1,717,000    1.3%   5.44    21,040,395      14,277,126 
Science Applications International Corporation      1    302,400    302,400    1.4%   1,505,000    1.1%   4.98    13,410,102      -0- 
United Technologies Corporation      2    223,150    223,150    1.0%   1,543,000    1.2%   6.91    22,919,203      6,252,748 
Bunzl USA Holdings, Inc.      2    268,778    268,778    1.2%   1,487,000    1.1%   5.53    18,731,674      12,025,717 
Woodstream Corporation  (A)    1    256,000    256,000    1.2%   920,000    0.7%   3.59    8,935,160      -0- 
Anda Pharmaceuticals, Inc.      1    234,660    234,660    1.1%   1,210,000    0.9%   5.16    14,550,000      7,407,762 
UGN, Inc.  (D)   1    232,200    232,200    1.1%   1,080,000    0.8%   4.65    20,992,285      7,003,100 
Mickey Thompson Performance Tires and Wheels (Cooper Tire)      1    219,765    219,765    1.0%   1,511,000    1.1%   6.88    18,934,065      11,971,172 
Rinnai America Corporation      1    218,120    218,120    1.0%   840,000    0.6%   3.85    15,042,743      -0- 
Anheuser-Busch, Inc.      1    184,800    184,800    0.9%   832,000    0.6%   4.50    12,697,848      -0- 
Carlisle Tire & Wheel Company      1    179,280    179,280    0.8%   761,000    0.6%   4.24    7,232,986      -0- 
NF&M International, Inc.  (B)    1    174,802    174,802    0.8%   837,000    0.6%   4.79    5,408,790      -0- 
Home Depot USA, Inc.      1    171,200    171,200    0.8%   1,007,000    0.8%   5.88    11,303,317      -0-