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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): November 25, 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.)

 

101 Crawfords Corner Road, Suite 1405, Holmdel, NJ   07733
(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 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[  ] Pre-commencement communications pursuant to rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

    Trading   Name of each exchange
Title of each class   Symbol(s)   on which registered
Common Stock   MNR   New York Stock Exchange
6.125% Series C Cumulative Redeemable Preferred Stock   MNR-PC   New York Stock Exchange

 

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 November 25, 2019, Monmouth Real Estate Investment Corporation issued a press release announcing the results for the fourth quarter and fiscal year ended September 30, 2019 and disclosed a supplemental information package in connection with its earnings conference call for the fourth quarter and fiscal year ended September 30, 2019. 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;
  the Company’s reliance on certain major tenants;
  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 the Company’s properties;
  changes in real estate market conditions, economic conditions in the industrial sector, the markets 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 our debt obligations 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;
  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 its 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 fourth quarter and fiscal year ended September 30, 2019 and press release dated November 25, 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 November 25, 2019  

 

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Section 2: EX-99

 

Exhibit 99

 

 

 
 

 

 

Table of Contents

 

  Page
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
FFO, AFFO, EBITAre and Adjusted EBITDA Reconciliations 5
NOI Reconciliations 6
Financial Highlights 7
Same Property Statistics 8
Consolidated Statements of Cash Flows 10
Capital Structure and Leverage Ratios 11
Debt Maturity 13
Securities Portfolio Historic Performance 14
Property Table by Tenant 16
Property Table by State 17
Lease Expirations 18
Recent Acquisitions 19
Property Table 20
Definitions 23
Press Release Dated November 25, 2019 24

 

The statement of operations and supplemental statement of operations provided in this supplemental information package present funds from operations (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 23 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-K.

 

 

Table of Contents 

 

Consolidated Balance Sheets

(in thousands except for per share amounts)

 

   As of   As of 
   September 30,   September 30, 
   2019   2018 
ASSETS          
Real Estate Investments:          
Land  $239,299   $224,719 
Buildings and Improvements   1,627,219    1,494,859 
Total Real Estate Investments   1,866,518    1,719,578 
Accumulated Depreciation   (249,584)   (207,065)
Real Estate Investments   1,616,934    1,512,513 
           
Cash and Cash Equivalents   20,179    9,324 
Securities Available for Sale at Fair Value   185,250    154,921 
Tenant and Other Receivables   1,335    1,249 
Deferred Rent Receivable   11,199    9,656 
Prepaid Expenses   6,714    6,190 
Intangible Assets, net of Accumulated Amortization of $15,686 and $13,700, respectively   14,970    14,590 
Capitalized Lease Costs, net of Accumulated Amortization of $3,378 and $3,271, respectively   5,670    5,232 
Financing Costs, net of Accumulated Amortization of $1,352 and $995, respectively   144    500 
Other Assets   9,553    4,203 
TOTAL ASSETS  $1,871,948   $1,718,378 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
           
Liabilities:          
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs  $744,928   $711,546 
Loans Payable   95,000    186,609 
Accounts Payable and Accrued Expenses   3,570    5,891 
Other Liabilities   17,407    16,426 
Total Liabilities   860,905    920,472 
           
COMMITMENTS AND CONTINGENCIES          
           
Shareholders’ Equity:          
6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 Par Value Per Share: 16,400 Shares Authorized as of September 30, 2019 and 2018; 13,907 and 11,488 Shares Issued and Outstanding as of September 30, 2019 and 2018, respectively   347,678    287,200 
Common Stock, $0.01 Par Value Per Share: 188,040 Shares Authorized as of September 30, 2019 and 2018; 96,399 and 81,503 Shares Issued and Outstanding as of September 30, 2019 and 2018, respectively   964    815 
Excess Stock, $0.01 Par Value Per Share: 200,000 Shares Authorized as of September 30, 2019 and 2018; No Shares Issued or Outstanding as of September 30, 2019 and 2018   -0-    -0- 
Additional Paid-In Capital   662,401    534,635 
Accumulated Other Comprehensive Loss   -0-    (24,744)
Undistributed Income   -0-    -0- 
Total Shareholders’ Equity   1,011,043    797,906 
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY  $1,871,948   $1,718,378 

 

    FOURTH QUARTER AND FISCAL YEAR END 2019 SUPPLEMENTAL INFORMATION3
Table of Contents 

 

Consolidated Statements of Income

(in thousands)

 

   For The   For The 
   Three Months Ended   Twelve Months Ended 
    9/30/2019    9/30/2018    9/30/2019    9/30/2018 
INCOME:                    
Rental Revenue  $33,846   $30,305   $132,524   $115,864 
Reimbursement Revenue   6,751    6,312    25,998    23,298 
Lease Termination Income   -0-    -0-    -0-    210 
TOTAL INCOME   40,597    36,617    158,522    139,372 
                     
EXPENSES:                    
Real Estate Taxes   5,567    5,020    20,711    18,596 
Operating Expenses   1,430    1,423    6,616    5,794 
General & Administrative Expenses   2,661    2,724    9,081    8,776 
Depreciation   10,953    9,671    43,020    36,176 
Amortization of Capitalized Lease Costs and Intangible Assets   726    650    2,870    2,391 
TOTAL EXPENSES   21,337    19,488    82,298    71,733 
                     
OTHER INCOME (EXPENSE):                    
Dividend Income   3,599    3,740    15,168    13,121 
Gain on Sale of Securities Transactions   -0-    -0-    -0-    111 
Unrealized Holding Gains (Losses) Arising During the Periods   13,988    -0-    (24,680)   -0- 
Interest Expense, including Amortization of Financing Costs   (9,033)   (8,709)   (36,912)   (32,350)
TOTAL OTHER INCOME (EXPENSE)   8,554    (4,969)   (46,424)   (19,118)
                     
INCOME FROM OPERATIONS   27,814    12,160    29,800    48,521 
                     
Gain on Sale of Real Estate Investments   -0-    -0-    -0-    7,485 
                     
NET INCOME   27,814    12,160    29,800    56,006 
                     
Less: Preferred Dividends   5,124    4,378    18,774    17,191 
                     
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS  $22,690   $7,782   $11,026   $38,815 

 

    FOURTH QUARTER AND FISCAL YEAR END 2019 SUPPLEMENTAL INFORMATION4
Table of Contents 

 

FFO, AFFO EBITDAre and Adjusted EBITDA Reconciliations

(unaudited) (in thousands)

 

   For The   For The 
   Three Months Ended   Twelve Months Ended 
    9/30/2019    9/30/2018    9/30/2019    9/30/2018 
FFO, AFFO                    
Net Income Attributable to Common Shareholders (1)  $22,690   $7,782   $11,026   $38,815 
Plus: Unrealized Holding (Gains) Losses Arising During the Periods (2)   (13,988)   -0-    24,680    -0- 
Plus: Depreciation Expense (excluding Corporate Office Capitalized Costs)   10,826    9,632    42,518    36,018 
Plus: Amortization of Intangible Assets   491    455    1,986    1,613 
Plus: Amortization of Capitalized Lease Costs   261    221    987    880 
Less: Gain on Sale of Real Estate Investments   -0-    -0-    -0-    (7,485)
FFO Attributable to Common Shareholders (3)   20,280    18,090    81,197    69,841 
Plus: Depreciation of Corporate Office Capitalized Costs   126    39    502    158 
Plus: Stock Compensation Expense   210    95    784    434 
Plus: Amortization of Financing Costs   297    310    1,253    1,221 
Less: Gain on Sale of Securities Transactions   -0-    -0-    -0-    (111)
Less: Lease Termination Income   -0-    -0-    -0-    (210)
Less: Effect of non-cash U.S. GAAP Straight-line Rent Adjustment   (574)   (615)   (1,926)   (1,973)
Less: Recurring Capital Expenditures   (227)   (211)   (2,115)   (985)
AFFO Attributable to Common Shareholders  $20,112   $17,708   $79,695   $68,375 

 

   For The   For The 
   Three Months Ended   Twelve Months Ended 
    9/30/2019    9/30/2018    9/30/2019    9/30/2019 
EBITDAre, Adjusted EBITDA                    
Net Income Attributable to Common Shareholders (1)  $22,690   $7,782   $11,026   $38,815 
Plus: Preferred Dividends   5,124    4,378    18,774    17,191 
Plus: Interest Expense, including Amortization of Financing Costs   9,033    8,709    36,912    32,350 
Plus: Depreciation and Amortization   11,679    10,322    45,890    38,567 
Less: Gain on Sale of Real Estate Investments   -0-    -0-    -0-    (7,485)
EBITDAre   48,526    31,191    112,602    119,438 
Plus: Net Amortization of Acquired Above and Below Market Lease Revenue   26    25    103    102 
Plus: Unrealized Holding (Gains) Losses Arising During the Periods   (13,988)   -0-    24,680    -0- 
Less: Gain on Sale of Securities Transactions   -0-    -0-    -0-    (111)
Adjusted EBITDA  $34,564   $31,216   $137,385   $119,429 

 

  (1) Effective October 1, 2018, we adopted ASU 2016-01. This new accounting standard requires unrealized gains or losses on our securities investments to flow through our income statement. Periods shown here prior to October 1, 2018 do not include the effect of this accounting change and therefore Net Income Attributable to Common Shareholders between these periods are not comparable.
  (2) Unrealized Holding Gains or Losses Arising During the Periods, if any, were previously reported as an adjustment to Core Funds From Operations (Core FFO).
  (3) In conjunction with the adoption of the FFO White Paper - 2018 Restatement, for all periods presented, we have elected to exclude unrealized gains and losses from our investments in marketable equity securities from our FFO calculation. Prior to the adoption of the FFO White Paper – 2018 Restatement, we defined Core FFO as FFO, excluding Unrealized Holding Gains or Losses Arising During the Periods.

 

    FOURTH QUARTER AND FISCAL YEAR END 2019 SUPPLEMENTAL INFORMATION5
Table of Contents 

 

NOI Reconciliations

(unaudited) (in thousands)

 

   For The   For The 
   Three Months Ended   Twelve Months Ended 
    9/30/2019    9/30/2018    9/30/2019    9/30/2018 
Net Operating Income                    
Net Income Attributable to Common Shareholders (1)  $22,690   $7,782   $11,026   $38,815 
Plus: Preferred Dividends   5,124    4,378    18,774    17,191 
Plus: General & Administrative Expenses   2,661    2,724    9,081    8,776 
Plus: Depreciation   10,953    9,671    43,020    36,176 
Plus: Amortization of Capitalized Lease Costs and Intangible Assets   726    650    2,870    2,391 
Plus: Interest Expense, including Amortization of Financing Costs   9,033    8,709    36,912    32,350 
Plus: Unrealized Holding (Gains) Losses Arising During the Periods   (13,988)   -0-    24,680    -0- 
Less: Dividend Income   (3,599)   (3,740)   (15,168)   (13,121)
Less: Gain on Sale of Securities Transactions   -0-    -0-    -0-    (111)
Less: Gain on Sale of Real Estate Investments   -0-    -0-    -0-    (7,485)
Less: Lease Termination Income   -0-    -0-    -0-    (210)
Net Operating Income – NOI  $33,600   $30,174   $131,195   $114,772 

 

   For The   For The 
   Three Months Ended   Twelve Months Ended 
  9/30/2019   9/30/2018   9/30/2019   9/30/2018 
Components of Net Operating Income Consists of:                
Revenues:                
Rental Revenue  $33,846   $30,305   $132,524   $115,864 
Reimbursement Revenue   6,751    6,312    25,998    23,298 
Total Rental and Reimbursement Revenue   40,597    36,617    158,522    139,162 
                     
Expenses:                    
Real Estate Taxes   5,567    5,020    20,711    18,596 
Operating Expenses   1,430    1,423    6,616    5,794 
Total Real Estate Taxes and Operating Expenses   6,997    6,443    27,327    24,390 
Net Operating Income – NOI  $33,600   $30,174   $131,195   $114,772 

 

(1) Effective October 1, 2018, we adopted ASU 2016-01. This new accounting standard requires unrealized gains or losses on our securities investments to flow through our income statement. Periods shown here prior to October 1, 2018 do not include the effect of this accounting change and therefore Net Income Attributable to Common Shareholders between these periods are not comparable.

 

    FOURTH QUARTER AND FISCAL YEAR END 2019 SUPPLEMENTAL INFORMATION6
Table of Contents 

 

Financial Highlights

(unaudited) (in thousands except for per share amounts)

 

   For The   For The 
   Three Months Ended   Twelve Months Ended 
   9/30/2019   9/30/2018   Change (%)   9/30/2019   9/30/2018   Change (%) 
                         
Weighted Average Common Shares Outstanding                              
Basic   95,667    80,692    18.6%   93,387    78,619    18.8%
Diluted   95,759    80,889    18.4%   93,485    78,802    18.6%
                               
Net Income Attributable to Common Shareholders (1)  $22,690   $7,782    191.6%  $11,026   $38,815    (71.6)%
                               
Basic  $0.24   $0.10    140.0%  $0.12   $0.49    (75.5)%
Diluted   0.24    0.10    140.0%   0.12    0.49    (75.5)%
                               
Net Operating Income – NOI  $33,600   $30,174    11.4%  $131,195   $114,772    14.3%
                               
Basic  $0.35   $0.37    (5.4)%  $1.40   $1.46    (4.1)%
Diluted   0.35    0.37    (5.4)%   1.40    1.46    (4.1)%
                               
Funds From Operations – FFO (2)  $20,280   $18,090    12.1%  $81,197   $69,841    16.3%
                               
Basic  $0.21   $0.22    (4.5)%  $0.87   $0.89    (2.2)%
Diluted   0.21    0.22    (4.5)%   0.87    0.89    (2.2)%
                               
Adjusted Funds From Operations – AFFO  $20,112   $17,708    13.6%  $79,695   $68,375    16.6%
                               
Basic  $0.21   $0.22    (4.5)%  $0.85   $0.87    (2.3)%
Diluted   0.21    0.22    (4.5)%   0.85    0.87    (2.3)%
                               
Dividends Declared per Common Share  $0.17   $0.17        $0.68   $0.68      
                               
Dividend/AFFO Payout Ratio   81.0%   77.3%        80.0%   78.2%     

 

(1) Effective October 1, 2018, we adopted ASU 2016-01. This new accounting standard requires unrealized gains or losses on our securities investments to flow through our income statement. Periods shown here prior to October 1, 2018 do not include the effect of this accounting change and therefore Net Income Attributable to Common Shareholders between these periods are not comparable.
(2) In conjunction with the adoption of the FFO White Paper - 2018 Restatement, for all periods presented, we have elected to exclude unrealized gains and losses from our investments in marketable equity securities from our FFO calculation. Prior to the adoption of the FFO White Paper – 2018 Restatement, we defined Core Funds From Operations as FFO, excluding Unrealized Holding Gains or Losses Arising During the Periods.

 

    FOURTH QUARTER AND FISCAL YEAR END 2019 SUPPLEMENTAL INFORMATION7
Table of Contents 

 

Same Property Statistics

(unaudited) (in thousands except for square feet)

 

   For The
Three Months Ended
         
   9/30/2019       9/30/2018   Change   Change % 
                     
Total Square Feet / Total Properties   22,250,880 / 114        21,173,581 / 111    1,077,299    5.1%
                          
Occupancy Percentage at End of Period   98.9%       99.6%   (70) bps    (0.7)%
                          
Same Property Square Feet / Number of Same Properties        20,224,208 / 107                
                          
Same Property Occupancy Percentage at End of Period   98.8%       99.6%   (80) bps    (0.8)%
                          
Same Property Net Operating Income (NOI) (GAAP)  $28,884       $28,946   $(62)   (0.2)%
                          
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment   (470)       (594)   124      
Same Property Cash NOI  $28,414       $28,352   $62    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 20 basis point decrease in Same Property NOI (GAAP) is primarily due to the 80 basis point decrease in Same Property Occupancy, partially offset by increased rent. The 20 basis point increase in Same Property NOI (Cash) is primarily due to increased rent, partially offset by the 80 basis point decrease in Same Property Occupancy.

 

Reconciliation of Same Property NOI to Total NOI

(unaudited) (in thousands)

 

   For The
Three Months Ended
         
   9/30/2019   9/30/2018   Change   Change % 
                 
Same Property NOI (GAAP)  $28,884   $28,946   $(62)   (0.2)%
                     
NOI of properties purchased subsequent to June 30, 2018 (three properties purchased during fiscal 2019 and two properties purchased during fiscal 2018)   3,809    614           
                     
NOI of properties expanded subsequent to
June 30, 2018 (one property expanded during fiscal 2019 and one property expanded during 2018)
   907    614           
                     
NOI of property sold subsequent to
June 30, 2018 (four properties sold during fiscal 2018)
   -0-    -0-           
Total NOI  $33,600   $30,174   $3,426    11.4%

 

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Same Property Statistics

(unaudited) (in thousands except for square feet)

 

   For The
Twelve Months Ended
         
   9/30/2019       9/30/2018   Change   Change % 
                     
Total Square Feet / Total Properties   22,250,880 / 114        21,173,581 / 111    1,077,299    5.1%
                          
Occupancy Percentage at End of Period   98.9%       99.6%   (70) bps    (0.7)%
                          
Same Property Square Feet / Number of Same Properties        17,880,557 / 101                
                          
Same Property Occupancy Percentage at End of Period   98.6%       99.5%   (90) bps    (0.9)%
                          
Same Property Net Operating Income (NOI) (GAAP)  $101,702       $102,524   $(822)   (0.8)%
                          
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment   (988)       (1,477)   489      
Same Property Cash NOI  $100,714       $101,047   $(333)   (0.3)%

 

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 80 basis point decrease in Same Property NOI (GAAP) and the 30 basis point decrease in Same Property NOI (Cash) are primarily due to the 90 basis point decrease in Same Property Occupancy, partially offset by increased rent.

 

Reconciliation of Same Property NOI to Total NOI

(unaudited) (in thousands)

 

   For The
Twelve Months Ended
         
   9/30/2019   9/30/2018   Change   Change % 
                 
Same Property NOI (GAAP)  $101,702   $102,524   $(822)   (0.8)%
                     
NOI of properties purchased subsequent to September 30, 2017 (three properties purchased during fiscal 2019 and seven properties purchased during fiscal 2018)   24,586    7,515           
                     
NOI of properties expanded subsequent to September 30, 2017 (one property expanded during fiscal 2019 and two properties expanded during 2018)   4,907    4,125           
                     
NOI of property sold subsequent to September 30, 2017 (four properties sold during fiscal 2018)   -0-    608           
Total NOI  $131,195   $114,772   $16,423    14.3%

 

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Consolidated Statements of Cash Flows

(in thousands)

 

   For The 
   Twelve Months Ended 
    9/30/2019    9/30/2018 
CASH FLOWS FROM OPERATING ACTIVITIES          
Net Income  $29,800   $56,006 
Noncash Items Included in Net Income:          
Depreciation & Amortization   47,142    39,788 
Stock Compensation Expense   784    434 
Deferred Straight Line Rent   (1,926)   (1,973)
Unrealized Holding (Gains) Losses Arising During the Periods   24,680    -0- 
Gain on Sale of Securities Transactions   -0-    (111)
Gain on Sale of Real Estate Investments   -0-    (7,485)
Changes in:          
Tenant & Other Receivables   18    1,397 
Prepaid Expenses   (524)   (755)
Other Assets & Capitalized Lease Costs   729    (2,037)
Accounts Payable, Accrued Expenses & Other Liabilities   919    265 
NET CASH PROVIDED BY OPERATING ACTIVITIES   101,622    85,529 
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Purchase of Real Estate & Intangible Assets   (138,964)   (283,403)
Capital Improvements   (14,734)   (9,084)
Proceeds from Sale of Real Estate Investments   -0-    22,083 
Return of Deposits on Real Estate   200    450 
Deposits Paid on Acquisitions of Real Estate   (6,000)   (200)
Proceeds from Sale of Securities Available for Sale   -0-    2,620 
Purchase of Securities Available for Sale   (55,010)   (64,979)
NET CASH USED IN INVESTING ACTIVITIES   (214,508)   (332,513)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Proceeds from Fixed Rate Mortgage Notes Payable   96,500    175,160 
Principal Payments on Fixed Rate Mortgage Notes Payable   (63,350)   (54,354)
Net Draws (Repayments) on Loans Payable   (91,609)   66,517 
Financing Costs Paid on Debt   (662)   (1,470)
Proceeds from Underwritten Public Offering of Common Stock, net of offering costs   132,338    -0- 
Proceeds from At-The-Market Preferred Equity Program, net of offering costs   58,199    40,094 
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments   57,079    77,100 
Proceeds from the Exercise of Stock Options   567    570 
Preferred Dividends Paid   (18,465)   (16,876)
Common Dividends Paid, net of Reinvestments   (46,856)   (40,658)
NET CASH PROVIDED BY FINANCING ACTIVITIES   123,741    246,083 
           
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   10,855    (901)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR   9,324    10,225 
CASH AND CASH EQUIVALENTS - END OF YEAR  $20,179   $9,324 

 

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Capital Structure and Leverage Ratios

(unaudited) (in thousands except for per share amounts)

 

   As of   As of 
   9/30/2019   9/30/2018 
         
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs  $744,928   $711,546 
Loans Payable   95,000    186,609 
Total Debt   839,928    898,155 
           
6.125% Series C Cumulative Redeemable Preferred Stock   347,678    287,200 
Common Stock, Paid-In-Capital & Other   663,365    510,706 
Total Shareholders’ Equity   1,011,043    797,906 
           
Total Book Capitalization   1,850,971    1,696,061 
           
Accumulated Depreciation   249,584    207,065 
Total Undepreciated Book Capitalization  $2,100,555   $1,903,126 
           
Shares Outstanding   96,399    81,503 
Market Price Per Share  $14.41   $16.72 
           
Equity Market Capitalization  $1,389,107   $1,362,732 
Total Debt   839,928    898,155 
Total Preferred Stock   347,678    287,200 
Total Market Capitalization  $2,576,713   $2,548,087 
           
Total Debt  $839,928   $898,155 
less: Cash and Cash Equivalents   20,179    9,324 
Net Debt  $819,749   $888,831 
less: Securities Available for Sale at Fair Value (Securities)   185,250    154,921 
Net Debt Less Securities  $634,499   $733,910 
           
Net Debt / Total Undepreciated Book Capitalization   39.0%   46.7%
Net Debt / Total Market Capitalization   31.8%   34.9%
Net Debt Plus Preferred Stock / Total Market Capitalization   45.3%   46.2%
Net Debt Less Securities / Total Undepreciated Book Capitalization   30.2%   38.6%
Net Debt Less Securities / Total Market Capitalization   24.6%   28.8%
Net Debt Less Securities Plus Preferred Stock / Total Market Capitalization   38.1%   40.1%
Weighted Average Interest Rate on Fixed Rate Debt   4.03%   4.07%
Weighted Average Term on Fixed Rate Debt   11.3 yrs.    11.7 yrs. 
Weighted Average Lease Term   7.6 yrs.    8.1 yrs. 

 

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Capital Structure and Leverage Ratios

(unaudited) (in thousands)

 

   For the Three Months Ended   For the Twelve Months Ended 
    9/30/2019    9/30/2018    9/30/2019    9/30/2018 
Net Income Attributable to Common Shareholders  $22,690   $7,782   $11,026   $38,815 
Plus: Preferred Dividends   5,124    4,378    18,774    17,191 
Plus: Interest Expense, including Amortization of Financing Costs   9,033    8,709    36,912    32,350 
Plus: Depreciation and Amortization   11,679    10,322    45,890    38,567 
Less: Gain on Sale of Real Estate Investments   -0-    -0-    -0-    (7,485)
EBITDAre   48,526    31,191    112,602    119,438 
Plus: Net Amortization of Acquired Above and Below Market Lease Revenue   26    25    103    102 
Plus: Unrealized Holding Losses Arising During the Periods   (13,988)   -0-    24,680    -0- 
Less: Gain on Sale of Securities Transactions   -0-    -0-    -0-    (111)
Adjusted EBITDA  $34,564   $31,216   $137,385   $119,429 
                     
Interest Expense, including Amortization of Financing Costs  $9,033   $8,709   $36,912   $32,350 
Preferred Dividends   5,124    4,378    18,774    17,191 
Total Fixed Charges  $14,157   $13,087   $55,686   $49,541 
                     
Interest Coverage    3.8 x     3.6 x     3.7 x     3.7 x 
Fixed Charge Coverage    2.4 x     2.4 x     2.5 x     2.4 x 
                     
Net Debt  $819,749   $888,831   $819,749   $888,831 
Net Debt Less Securities   634,499    733,910    634,499    733,910 
Total Preferred Stock   347,678    287,200    347,678    287,200 
Annualized Adjusted EBITDA   138,256    124,865    137,385    119,429 
                     
Net Debt / Adjusted EBITDA    5.9 x     7.1 x     6.0 x    7.4 x 
Net Debt Less Securities / Adjusted EBITDA    4.6 x     5.9 x     4.6 x     6.1 x 
Net Debt + Preferred Stock / Adjusted EBITDA    8.4 x     9.4 x     8.5 x     9.8 x 
Net Debt Less Securities + Preferred Stock / Adjusted EBITDA    7.1 x     8.2 x     7.1 x     8.5 x 

 

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Debt Maturity

(unaudited) (In thousands)

 

 

          Loans          % of 
Fiscal Year Ended     Mortgages   Payable      Total   Total 
                       
2020     $53,394   $95,000   (B)  $148,394    17.5%
2021      55,360    -0-      55,360    6.5%
2022      77,516    -0-      77,516    9.1%
2023      56,240    -0-       56,240    6.6%
2024      69,293    -0-       69,293    8.2%
Thereafter      441,113    -0-       441,113    52.1%
                           
Total as of 9/30/2019  (A)  $752,916   $95,000     $847,916    100.0%
                           
Weighted Average Interest Rate      4.03%   3.74%     4.00%    
Weighted Average Term      11.3 yrs.    1.0 yrs.       10.2yrs.     

 

  (A) Mortgages does not include unamortized debt issuance costs of $7,988.
  (B) Represents the amount drawn down on a $200 million line of credit facility. Subsequent to the fiscal yearend 2019, on November 14, 2019, $10 million was paid down towards the line of credit facility. On November 15, 2019, the $200 million line of credit was replaced by a new $225 million line of credit facility and a new $75 million unsecured term loan. The new $225 million line of credit matures January 2024 with two options to extend for additional six-month periods. The $75 million term loan matures January 2025. We currently have $10 million drawn down under the new line of credit facility and $75 million outstanding under the new Term Loan.

 

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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 9/30/19   179,665,124    154,920,545    15,070,102    -0-    (24,680,308)