Table of Contents

 

	Page
Consolidated Balance Sheets	3
Consolidated Statements of Income	4
Net Income, FFO, Core FFO, AFFO, 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	12
Property Table by Tenant	13
Property Table by State	14
Lease Expirations	15
Recent Acquisitions	16
Property Table	17
Definitions	19
Press Release Dated August 9, 2017	20

 

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 (NOI), Same Property NOI, Same Property Cash NOI and Adjusted EBITDA which are REIT industry financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America. Please see page 19 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

 

		June 30, 2017				September 30, 2016
		(unaudited)
ASSETS
Real Estate Investments:
Land		$	184,998,116			$	165,375,315
Buildings and Improvements			1,188,576,632				1,005,938,180
Total Real Estate Investments			1,373,574,748				1,171,313,495
Accumulated Depreciation			(169,226,861	)			(148,830,169	)
Real Estate Investments			1,204,347,887				1,022,483,326
Cash and Cash Equivalents			11,749,997				95,749,508
Securities Available for Sale at Fair Value			100,495,810				73,604,894
Tenant and Other Receivables			1,148,114				1,444,824
Deferred Rent Receivable			7,739,322				6,917,431
Prepaid Expenses			7,358,734				4,830,987
Capitalized Lease Costs, net of Accumulated Amortization of $3,727,227 and $3,238,516, respectively			4,137,743				4,165,268
Intangible Assets, net of Accumulated Amortization of $13,103,744 and $12,332,599, respectively			8,608,879				5,816,153
Financing Costs, net of Accumulated Amortization of $525,660 and $246,678, respectively			969,603				1,245,923
Other Assets			5,061,923				7,227,571
TOTAL ASSETS		$	1,351,618,012			$	1,223,485,885
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt
Issuance Costs		$	554,486,956			$	477,476,010
Loans Payable			122,094,940				80,790,684
Accounts Payable and Accrued Expenses			2,853,438				3,998,771
Other Liabilities			13,936,503				9,868,572
Preferred Stock Called for Redemption			-0-				53,493,750
Total Liabilities			693,371,837				625,627,787
COMMITMENTS AND CONTINGENCIES
Shareholders’ Equity: 7.875% Series B Cumulative Redeemable Preferred Stock, $0.01 Par Value Per Share: -0- and 2,300,000 Shares Authorized, Issued and Outstanding as of June 30, 2017 and September 30, 2016, respectively			-0-				57,500,000
6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 Par Value Per Share: 12,400,000 and 5,400,000 Shares Authorized as of June 30, 2017 and September 30, 2016, respectively; 8,400,000 and 5,400,000 Shares Issued and Outstanding as of June 30, 2017 and September 30, 2016, respectively			210,000,000				135,000,000
Common Stock, $0.01 Par Value Per Share: 192,039,750 and 194,600,000 Shares Authorized as of June 30, 2017 and September 30, 2016, respectively; 73,824,161 and 68,920,972 Shares Issued and Outstanding as of June 30, 2017 and September 30, 2016, respectively			738,242				689,210
Excess Stock, $0.01 Par Value Per Share: 200,000,000 Shares Authorized as of June 30, 2017 and September 30, 2016; No Shares Issued or Outstanding as of June 30, 2017 and September 30, 2016			-0-				-0-
Additional Paid-In Capital			438,742,799				391,726,621
Accumulated Other Comprehensive Income			8,765,134				12,942,267
Undistributed Income			-0-				-0-
Total Shareholders’ Equity			658,246,175				597,858,098
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY		$	1,351,618,012			$	1,223,485,885

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 3 of 23

 

 

Consolidated Statements of Income

(unaudited)

 

		Three Months Ended								Nine Months Ended
		6/30/2017				6/30/2016				6/30/2017				6/30/2016
INCOME:
Rental Revenue		$	24,400,237			$	20,789,914			$	71,291,923			$	59,465,701
Reimbursement Revenue			4,208,859				3,324,085				11,806,975				9,874,498
TOTAL INCOME			28,609,096				24,113,999				83,098,898				69,340,199
EXPENSES:
Real Estate Taxes			3,520,322				2,633,706				9,279,165				7,681,519
Operating Expenses			1,053,253				981,766				3,635,986				3,316,489
General & Administrative Expenses			1,786,852				1,542,432				5,307,853				5,099,841
Acquisition Costs			-0-				135,358				178,526				545,955
Depreciation			7,318,258				6,096,880				21,449,830				17,478,374
Amortization of Capitalized Lease Costs and Intangible Assets			451,823				445,404				1,327,376				1,418,375
TOTAL EXPENSES			14,130,508				11,835,546				41,178,736				35,540,553
OTHER INCOME (EXPENSE):
Dividend and Interest Income			1,899,320				1,486,134				4,630,653				4,050,455
Gain on Sale of Securities Transactions			1,487,836				272,067				2,293,944				1,159,409
Interest Expense, including Amortization of Financing Costs			(6,135,381	)			(5,805,359	)			(18,835,864	)			(16,707,613	)
TOTAL OTHER INCOME (EXPENSE)			(2,748,225	)			(4,047,158	)			(11,911,267	)			(11,497,749	)
NET INCOME			11,730,363				8,231,295				30,008,895				22,301,897
Less: Preferred Dividends			4,045,787				2,151,758				11,325,583				6,455,274
Less: Redemption of Preferred Stock			2,467,165				-0-				2,467,165				-0-
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS		$	5,217,411			$	6,079,537			$	16,216,147			$	15,846,623

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 4 of 23

 

 

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

(unaudited)

 

		Three Months Ended								Nine Months Ended
FFO, Core FFO, AFFO		6/30/2017				6/30/2016				6/30/2017				6/30/2016
Net Income Attributable to Common Shareholders		$	5,217,411			$	6,079,537			$	16,216,147			$	15,846,623
Plus: Depreciation Expense (excluding Corporate Office Capitalized Costs)			7,278,976				6,066,012				21,332,662				17,390,417
Plus: Amortization of Intangible Assets			262,325				272,009				771,145				915,208
Plus: Amortization of Capitalized Lease Costs			214,990				198,887				632,707				579,643
Plus: Loss on Sale of Real Estate Investment			-0-				-0-				95,336				-0-
FFO Attributable to Common Shareholders			12,973,702				12,616,445				39,047,997				34,731,891
Plus: Acquisition Costs			-0-				135,358				178,526				545,955
Plus: Redemption of Preferred Stock			2,467,165				-0-				2,467,165				-0-
Core FFO Attributable to Common Shareholders			15,440,867				12,751,803				41,693,688				35,277,846
Plus: Stock Compensation Expense			174,709				99,760				441,054				306,688
Plus: Depreciation of Corporate Office Capitalized Costs			39,282				30,868				117,167				87,957
Plus: Amortization of Financing Costs			283,573				240,463				949,470				713,501
Plus: Non-recurring other expense			-0-				100,000				-0-				500,000
Less: Gain on Sale of Securities Transactions			(1,487,836	)			(272,067	)			(2,293,944	)			(1,159,409	)
Less: Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment			(294,936	)			(350,217	)			(924,792	)			(1,172,053	)
Less: Recurring Capital Expenditures			(195,186	)			(169,492	)			(571,988	)			(653,544	)
AFFO Attributable to Common Shareholders		$	13,960,473			$	12,431,118			$	39,410,655			$	33,900,986

 

		Three Months Ended								Nine Months Ended
Adjusted EBITDA		6/30/2017				6/30/2016				6/30/2017				6/30/2016
Net Income Attributable to Common Shareholders		$	5,217,411			$	6,079,537			$	16,216,147			$	15,846,623
Plus: Preferred Dividends			4,045,787				2,151,758				11,325,583				6,455,274
Plus: Redemption of Preferred Stock			2,467,165				-0-				2,467,165				-0-
Plus: Depreciation & Amortization			7,770,081				6,542,284				22,777,206				18,896,749
Plus: Interest Expense, including Amortization of Financing Costs			6,135,381				5,805,359				18,835,864				16,707,613
Plus: Acquisition Costs			-0-				135,358				178,526				545,955
Plus: Net Amortization of Acquired Above and Below Market Lease Revenue			25,492				25,492				76,476				76,476
Plus: Loss on Sale of Real Estate Investment			-0-				-0-				95,336				-0-
Less: Gain on Sale of Securities Transactions			(1,487,836	)			(272,067	)			(2,293,944	)			(1,159,409	)
Adjusted EBITDA		$	24,173,481			$	20,467,721			$	69,678,359			$	57,369,281

 

		Three Months Ended								Nine Months Ended
Net Operating Income		6/30/2017				6/30/2016				6/30/2017				6/30/2016
Net Income Attributable to Common Shareholders		$	5,217,411			$	6,079,537			$	16,216,147			$	15,846,623
Plus: Redemption of Preferred Stock			2,467,165				-0-				2,467,165				-0-
Plus: Preferred Dividends			4,045,787				2,151,758				11,325,583				6,455,274
Plus: General & Administrative Expenses			1,786,852				1,542,432				5,307,853				5,099,841
Plus: Acquisition Costs			-0-				135,358				178,526				545,955
Plus: Depreciation			7,318,258				6,096,880				21,449,830				17,478,374
Plus: Amortization of Capitalized Lease Costs and Intangible Assets			451,823				445,404				1,327,376				1,418,375
Plus: Interest Expense, including Amortization of Financing Costs			6,135,381				5,805,359				18,835,864				16,707,613
Less: Dividend and Interest Income			(1,899,320	)			(1,486,134	)			(4,630,653	)			(4,050,455	)
Less: Gain on Sale of Securities Transactions			(1,487,836	)			(272,067	)			(2,293,944	)			(1,159,409	)
Net Operating Income - NOI		$	24,035,521			$	20,498,527			$	70,183,747			$	58,342,191

 

		Three Months Ended								Nine Months Ended
Components of Net Operating Income consists of:		6/30/2017				6/30/2016				6/30/2017				6/30/2016
Revenues
Rental Revenue		$	24,400,237			$	20,789,914			$	71,291,923			$	59,465,701
Reimbursement Revenue			4,208,859				3,324,085				11,806,975				9,874,498
Total Rental and Reimbursement Revenue			28,609,096				24,113,999				83,098,898				69,340,199
Expenses
Real Estate Taxes			3,520,322				2,633,706				9,279,165				7,681,519
Operating Expenses			1,053,253				981,766				3,635,986				3,316,489
Total Real Estate Taxes and Operating Expenses			4,573,575				3,615,472				12,915,151				10,998,008
Net Operating Income - NOI		$	24,035,521			$	20,498,527			$	70,183,747			$	58,342,191

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 5 of 23

 

 

Financial Highlights

(unaudited)

 

		Three Months Ended								Nine Months Ended
		6/30/2017				6/30/2016				6/30/2017				6/30/2016
Weighted Average Common Shares Outstanding
Basic			72,881,974				66,337,101				71,264,806				64,613,953
Diluted			73,053,693				66,462,209				71,422,664				64,703,203
Net Income Attributable to Common Shareholders		$	5,217,411			$	6,079,537			$	16,216,147			$	15,846,623
Basic		$	0.07			$	0.09			$	0.23			$	0.25
Diluted			0.07				0.09				0.23				0.24
Net Operating Income – NOI		$	24,035,521			$	20,498,527			$	70,183,747			$	58,342,191
Basic		$	0.33			$	0.31			$	0.98			$	0.90
Diluted			0.33				0.31				0.98				0.90
Funds From Operations – FFO		$	12,973,702			$	12,616,445			$	39,047,997			$	34,731,891
Basic		$	0.18			$	0.19			$	0.55			$	0.54
Diluted			0.18				0.19				0.55				0.54
Core Funds From Operations - Core FFO		$	15,440,867			$	12,751,803			$	41,693,688			$	35,277,846
Basic		$	0.21			$	0.19			$	0.59			$	0.55
Diluted			0.21				0.19				0.58				0.55
Core FFO Excluding Gains on Securities Transactions		$	13,953,031			$	12,479,736			$	39,399,744			$	34,118,437
Basic		$	0.19			$	0.19			$	0.55			$	0.53
Diluted			0.19				0.19				0.55				0.53
Adjusted Funds From Operations - AFFO		$	13,960,473			$	12,431,118			$	39,410,655			$	33,900,986
Basic		$	0.19			$	0.19			$	0.55			$	0.52
Diluted			0.19				0.19				0.55				0.52
Dividends Declared per Common Share		$	0.16			$	0.16			$	0.48			$	0.48
Dividend/AFFO Payout Ratio			84.2	%

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 6 of 23

 

 

Same Property Statistics

 

		Three Months Ended
		6/30/2017					6/30/2016				Change				Change %
Total Square Feet / Total Properties			17,917,302 /105					15,124,162/97				2,793,140				18.5	%
Occupancy Percentage at Quarter End			99.8	%				99.6	%			20 bps				0.2	%
Same Property Square Feet / Number of Same Properties			13,522,492/89
Same Property Occupancy Percentage at Quarter End			99.7	%				100.0	%			(30) bps				(0.3	)%
Same Property Net Operating Income (NOI) (GAAP)		$	18,450,772				$	18,569,091			$	(118,319	)			(0.6	)%
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment			(173,560	)				(335,224)				161,664
Same Property Cash NOI (Cash)		$	18,277,212				$	18,233,867			$	43,345				0.2	%

 

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

 

The 0.6% decrease, amounting to $118,319 in Same Property NOI, consists of $9,328 attributable to a decrease in Same Property NOI from vacant properties and by a decrease in Same Property NOI from occupied properties of $108,991.

 

The 0.2% increase, amounting to $43,345 in Same Property Cash NOI, consists of $55,624 attributable to an increase in Same Property Cash NOI from occupied properties offset by a decrease in Same Property Cash NOI from vacant properties of $12,279.

 

Reconciliation of Same Property NOI to Total NOI		Three Months Ended
		6/30/2017				6/30/2016				Change				Change %
Same Property NOI (GAAP)		$	18,450,772			$	18,569,091			$	(118,319	)			(0.6	)%
NOI of properties purchased subsequent to October 1, 2015 (twelve properties for fiscal 2017 and three properties for fiscal 2016)			4,046,723				885,335
NOI of properties expanded subsequent to October 1, 2015 (four properties for fiscal 2017 and 2016)			1,538,026				1,104,282
NOI of property sold subsequent to October 1, 2015 (one property sold during fiscal 2017)			-0-				(60,181	)
Total NOI		$	24,035,521			$	20,498,527			$	3,536,994				17.3	%

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 7 of 23

 

 

Same Property Statistics

 

		Nine Months Ended
		6/30/2017				6/30/2016				Change				Change %
Total Square Feet / Total Properties			17,917,302/105				15,124,162/97				2,793,140				18.5	%
Occupancy Percentage at Quarter End			99.8	%			99.6	%			20 bps				0.2	%
Same Property Square Feet / Number of Same Properties			12,890,600/86
Same Property Occupancy Percentage at Quarter End			99.7	%			100.0	%			(30) bps				(0.3	)%
Same Property Net Operating Income (NOI) (GAAP)		$	51,771,276			$	51,575,371			$	195,905				0.4	%
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment			(495,519	)			(1,088,791	)			593,272
Same Property Cash NOI (Cash)		$	51,275,757			$	50,486,580			$	789,177				1.6	%

 

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

 

The 0.4% increase, amounting to $195,905 in Same Property NOI, consists of $381,807 attributable to an increase in Same Property NOI from filling previously vacant properties offset by a decrease in Same Property NOI from occupied properties of $185,902.

 

The 1.6% increase, amounting to $789,177 in Same Property Cash NOI, consists of $595,276 attributable to an increase in Same Property Cash NOI from filling previously vacant properties and by an increase in Same Property Cash NOI from occupied properties of $193,901.

 

Reconciliation of Same Property NOI to Total NOI

 

		Nine Months Ended
		6/30/2017				6/30/2016				Change				Change %
Same Property NOI (GAAP)		$	51,771,276			$	51,575,371			$	195,905				0.4	%
NOI of properties purchased subsequent to October 1, 2015 (fifteen properties for fiscal 2017 and six properties for fiscal 2016)			13,834,680				3,613,706
NOI of properties expanded subsequent to October 1, 2015 (four properties for fiscal 2017 and 2016)			4,691,829				3,274,253
NOI of property sold subsequent to October 1, 2015 (one property sold during fiscal 2017)			(114,038	)			(121,139	)
Total NOI		$	70,183,747			$	58,342,191			$	11,841,556				20.3	%

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 8 of 23

 

 

Consolidated Statements of Cash Flows

(unaudited)

		Nine Months Ended
		6/30/2017				6/30/2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income		$	30,008,895			$	22,301,897
Noncash Items Included in Net Income:
Depreciation & Amortization			23,726,676				19,610,250
Stock Compensation Expense			441,054				306,688
Gain on Sale of Securities Transactions			(2,293,944	)			(1,159,409	)
Loss on Sale of Real Estate Investment			95,336				-0-
Changes in:
Tenant, Deferred Rent and Other Receivables			12,479				(1,235,976	)
Prepaid Expenses			(2,527,747	)			(1,859,791	)
Other Assets and Capitalized Lease Costs			71,446				(2,293,188	)
Accounts Payable, Accrued Expenses and Other Liabilities			656,824				7,676,175
NET CASH PROVIDED BY OPERATING ACTIVITIES			50,191,019				43,346,646
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Real Estate and Intangible Assets			(208,390,539	)			(141,230,341	)
Capital Improvements			(1,208,390	)			(19,517,185	)
Proceeds on Sale of Real Estate			4,125,819				-0-
Return of Deposits on Real Estate			2,700,000				1,650,000
Deposits Paid on Acquisitions of Real Estate			(1,280,000	)			(1,100,000	)
Proceeds from Sale of Securities Available for Sale			10,693,212				8,165,701
Purchase of Securities Available for Sale			(39,467,317	)			(17,772,994	)
NET CASH USED IN INVESTING ACTIVITIES			(232,827,215	)			(169,804,819	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net Proceeds from Loans Payable			41,304,256				40,812,783
Proceeds from Fixed Rate Mortgage Notes Payable			137,925,000				92,971,000
Principal Payments on Fixed Rate Mortgage Notes Payable			(59,936,689	)			(26,609,348	)
Financing Costs Paid on Debt			(1,650,516	)			(1,204,207	)
Proceeds from the Exercise of Stock Options			-0-				1,412,050
Redemption of 7.625% Series A Preferred Stock			(53,493,750	)			-0-
Redemption of 7.875% Series B Preferred Stock			(57,500,000	)			-0-
Proceeds from Underwritten Public Offering of 6.125% Series C Preferred Stock, net of offering costs			71,003,093				-0-
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments			59,111,167				45,132,315
Preferred Dividends Paid			(11,044,489	)			(6,455,274	)
Common Dividends Paid, net of Reinvestments			(27,081,387	)			(24,788,097	)
NET CASH PROVIDED BY FINANCING ACTIVITIES			98,636,685				121,271,222
NET DECREASE IN CASH AND CASH EQUIVALENTS			(83,999,511	)			(5,186,951	)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD			95,749,508				12,073,909
CASH AND CASH EQUIVALENTS - END OF PERIOD		$	11,749,997			$	6,886,958

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 9 of 23

 

 

		As of				As of				As of
Capital Structure and Leverage Ratios		6/30/2017				6/30/2016				9/30/2016
(unaudited)
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs		$	554,486,956			$	434,605,383			$	477,476,010
Loans Payable			122,094,940				125,854,169				80,790,684
Preferred Stock Called for Redemption			-0-				-0-				53,493,750
Total Debt			676,581,896				560,459,552				611,760,444
7.625% Series A Cumul. Redeemable Preferred			-0-				53,493,750				-0-
7.875% Series B Cumul. Redeemable Preferred			-0-				57,500,000				57,500,000
6.125% Series C Cumul. Redeemable Preferred			210,000,000				-0-				135,000,000
Total Preferred Stock			210,000,000				110,993,750				192,500,000
Common Stock, Paid-In-Capital & Other			448,246,175				390,257,050				405,358,098
Total Shareholders’ Equity			658,246,175				501,250,800				597,858,098
Total Book Capitalization			1,334,828,071				1,061,710,352				1,209,618,542
Accumulated Depreciation			169,226,861				142,289,055				148,830,169
Total Undepreciated Book Capitalization		$	1,504,054,932			$	1,203,999,407			$	1,358,448,711
Shares Outstanding			73,824,161				67,228,175				68,920,972
Market Price Per Share		$	15.05			$	13.26			$	14.27
Equity Market Capitalization		$	1,111,053,623			$	891,445,601			$	983,502,270
Total Debt			676,581,896				560,459,552				611,760,444
Preferred			210,000,000				110,993,750				192,500,000
Total Market Capitalization		$	1,997,635,519			$	1,562,898,903			$	1,787,762,714
Total Debt		$	676,581,896			$	560,459,552			$	611,760,444
less: Cash and Cash Equivalents			11,749,997				6,886,958				95,749,508
Net Debt		$	664,831,899			$	553,572,594			$	516,010,936
less: Securities Available for Sale at Fair Value (Securities)			100,495,810				82,638,519				73,604,894
Net Debt Less Securities		$	564,336,089			$	470,934,075			$	442,406,042
Net Debt / Total Undepreciated Book Capitalization			44.2	%			46.0	%			38.0	%
Net Debt / Total Market Capitalization			33.3	%			35.4	%			28.9	%
Net Debt Plus Preferred / Total Market Capitalization			43.8	%			42.5	%			39.6	%
Net Debt Less Securities / Total Undepreciated Book Capitalization			37.5	%			39.1	%			32.6	%
Net Debt Less Securities / Total Market Capitalization			28.3	%			30.1	%			24.7	%
Net Debt Less Securities Plus Preferred / Total Market Capitalization			38.8	%			37.2	%			35.5	%
Weighted Average Interest Rate on Fixed Rate Debt			4.21	%			4.61	%			4.49	%

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 10 of 23

 

 

Capital Structure and Leverage Ratios continued

(unaudited)

 

																		Fiscal Year
		Three Months Ended								Nine Months Ended								Ended
			6/30/2017				6/30/2016				6/30/2017				6/30/2016				9/30/2016
Net Income		$	11,730,363			$	8,231,295			$	30,008,895			$	22,301,897			$	32,494,507
plus: Depreciation & Amortization			7,770,081				6,542,284				22,777,206				18,896,749				26,087,680
plus: Interest Expense, including Amortization of  Financing Costs			6,135,381				5,805,359				18,835,864				16,707,613				22,953,049
plus: Acquisition Costs			-0-				135,358				178,526				545,955				730,441
plus: Net Amortization of Acquired Above and Below Market Lease Revenue			25,492				25,492				76,476				76,476				101,967
plus: Loss on Sale of Real Estate Investment			-0-				-0-				95,336				-0-				-0-
less: Gain on Sale of Securities Transactions			(1,487,836	)			(272,067	)			(2,293,944	)			(1,159,409	)			(4,398,599	)
Adjusted EBITDA		$	24,173,481			$	20,467,721			$	69,678,359			$	57,369,281			$	77,969,045
Interest Expense, including Amortization of Financing Costs		$	6,135,381			$	5,805,359			$	18,835,864			$	16,707,613			$	22,953,049
Preferred Dividends			4,045,787				2,151,758				11,325,583				6,455,274				9,020,470
Total Fixed Charges		$	10,181,168			$	7,957,117			$	30,161,447			$	23,162,887			$	31,973,519
Interest Coverage			3.9 x				3.5 x				3.7 x				3.4 x				3.4 x
Fixed Charge Coverage			2.4 x				2.6 x				2.3 x				2.5 x				2.4 x
Net Debt		$	664,831,899			$	553,572,594			$	664,831,899			$	553,572,594			$	516,010,936
Net Debt Less Securities			564,336,089				470,934,075				564,336,089				470,934,075				442,406,042
Preferred			210,000,000				110,993,750				210,000,000				110,993,750				192,500,000
Annualized Adjusted EBITDA			96,693,924				81,870,884				92,904,479				76,492,375				77,969,045
Net Debt / Adjusted EBITDA			6.9 x				6.8 x				7.2 x				7.2 x				6.6 x
Net Debt Less Securities / Adjusted EBITDA			5.8 x				5.8 x				6.1 x				6.2 x				5.7 x
Net Debt + Preferred / Adjusted EBITDA			9.0 x				8.1 x				9.4 x				8.7 x				9.1 x
Net Debt Less Securities + Preferred / Adjusted EBITDA			8.0 x				7.1 x				8.3 x				7.6 x				8.1 x

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 11 of 23

 

 

Debt Maturity

(unaudited)

 

 

								Loans								% of
Fiscal Year Ended			Mortgages					Payable				Total				Total
2017			$	8,841,593				$	-0-			$	8,841,593				1.3	%
2018				49,428,516					-0-				49,428,516				7.4	%
2019				52,952,254					-0-				52,952,254				7.9	%
2020				36,963,631					110,000,000				146,963,631				21.9	%
2021				37,726,958					-0-				37,726,958				5.6	%
Thereafter				375,823,512					-0-				375,823,512				55.9	%
Total as of 6/30/2017	(A)		$	561,736,464		(B)		$	110,000,000			$	671,736,464				100.0	%
Weighted Average Interest Rate (C)				4.21	%				2.49	%			3.90	%
Weighted Average Term				11.47 yrs.					2.93 yrs.				9.94 yrs.

 

	(A)	Mortgages does not include unamortized debt issuance costs of $7,249,508.
	(B)	Excludes $12,094,940 of margin debt which is due upon demand and bears an interest rate of 2.05%.
	(C)	Weighted average interest rate of 2.49% on Loans Payable and weighted average interest rate of 3.90% on Total includes margin debt.

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 12 of 23

 

 

Property Table by Tenant

(unaudited)

 

			Property				Square				Occupied Square				% of Occupied				Annual				% of Total Ann.				Rent Per sf				Undepreciated				Mortgage
Tenant			Count				Footage				Footage				sf				Rent				Rent				Occup.				Cost				Balance
FedEx Ground Package System, Inc.				43				7,700,724				7,700,724				43.0	%		$	57,025,000				53.9	%		$	7.41			$	774,187,846			$	357,317,226
FedEx Corporation				15				1,423,313				1,423,313				7.9	%			6,687,000				6.3	%			4.70			$	86,858,352				13,961,186
Total FedEx				58				9,124,037				9,124,037				50.9	%			63,712,000				60.2	%			6.98				861,046,198				371,278,412
Milwaukee Electric Tool Corporation				1				861,889				861,889				4.8	%			3,010,000				2.8	%			3.49				36,914,917				23,886,671
ULTA, Inc.				1				671,354				671,354				3.7	%			2,677,000				2.5	%			3.99				37,512,071				21,808,660
Jim Beam Brands Company				1				599,840				599,840				3.3	%			2,032,000				1.9	%			3.39				28,000,000				17,784,413
TreeHouse Private Brands, Inc.				1				558,600				558,600				3.1	%			2,186,000				2.1	%			3.91				26,767,852				16,187,415
CBOCS Distribution, Inc.				1				381,240				381,240				2.1	%			1,433,000				1.4	%			3.76				14,215,126				7,501,287
Best Buy Warehousing Logistics, Inc.				1				368,060				368,060				2.1	%			1,660,000				1.6	%			4.51				19,600,000				10,032,360
The Coca-Cola Compan (Western Container Corporation)				2				323,358				323,358				1.8	%			1,684,000				1.6	%			5.21				20,504,069				5,903,675
Autoneum North America, Inc.				1				315,560				315,560				1.8	%			1,700,000				1.6	%			5.39				21,040,396				15,350,000
Science Applications International				1				302,400				302,400				1.7	%			1,476,000				1.4	%			4.88				13,374,441				-0-
International Paper Company				1				280,000				280,000				1.6	%			1,337,000				1.3	%			4.78				18,294,108				10,112,819
Bunzl USA Holdings, Inc.				2				268,778				268,778				1.5	%			1,468,000				1.4	%			5.46				18,379,601				12,839,422
Woodstream Corporation	(B)			1				256,000				256,000				1.4	%			910,000				0.9	%			3.55				8,885,429				-0-
United Technologies Corporation				2				244,317				244,317				1.4	%			1,896,000				1.8	%			7.76				22,587,512				7,419,925
Anda Pharmaceuticals, Inc.				1				234,660				234,660				1.3	%			1,200,000				1.1	%			5.11				14,550,000				8,318,812
UGN, Inc.				1				232,200				232,200				1.3	%			1,060,000				1.0	%			4.57				12,937,000				7,725,701
Caterpillar Logistics Services, Inc.				1				218,120				218,120				1.2	%			1,169,000				1.1	%			5.36				14,868,857				-0-
Anheuser-Busch, Inc.				1				184,800				184,800				1.0	%			810,000				0.8	%			4.38				12,578,197				-0-
Carlisle Tire & Wheel Company				1				179,280				179,280				1.0	%			787,000				0.7	%			4.39				7,232,986				-0-
NF&M International Inc.	(A)			1				174,802				174,802				1.0	%			833,000				0.8	%			4.77				5,389,424				-0-
Home Depot USA, Inc.				1				171,200				171,200				1.0	%			988,000				0.9	%			5.77				11,298,367				-0-
Kellogg Sales Company				3				170,279				170,279				1.0	%			982,000				0.9	%			5.77				12,175,116				-0-
Victory Packaging, L.P.				1				148,000				148,000				0.8	%			496,000				0.5	%			3.35				5,441,876				-0-
Challenger Lifts, Inc. (Snap-On Inc.)				1				137,500				137,500				0.8	%			831,000				0.8	%			6.04				11,304,000				7,009,146
Altec Industries, Inc.	(B)			1				126,880				126,880				0.7	%			367,000				0.3	%			2.89				4,403,841				-0-
General Electric Company				1				125,860				125,860				0.7	%			1,315,000				1.2	%			10.45				19,950,000				12,150,546
The American Bottling Company (Dr Pepper Snapple)				2				110,080				110,080				0.6	%			739,000				0.7	%			6.71				10,498,034				1,843,498
Style Crest, Inc.				1				106,507				106,507				0.6	%			381,000				0.4	%			3.58				7,238,613				-0-
Pittsburgh Glass Works, LLC.				1				102,135				102,135				0.6	%			427,000				0.4	%			4.18				4,245,913				-0-
Holland 1916 Inc.				1				95,898				95,898				0.5	%			345,000				0.3	%			3.60				7,397,881				-0-
National Oilwell Varco, Inc.				1				91,295				91,295				0.5	%			750,000				0.7	%			8.22				8,083,107				2,800,874
Joseph T. Ryerson and Son, Inc.				1				89,052				89,052				0.5	%			506,000				0.5	%			5.68				6,932,916				-0-
CHEP USA, Inc.				1				83,000				83,000				0.5	%			497,000				0.5	%			5.99				7,405,447				-0-
Datatel Resources Corporation	(A)			1				80,856				80,856				0.5	%			244,000				0.2	%			3.02				2,492,919				-0-
Sherwin-Williams Company				2				78,887				78,887				0.4	%			640,000				0.6	%			8.11				7,244,128				-0-
RGH Enterprises, Inc.				1				75,000				75,000				0.4	%			601,000				0.6	%			8.01				5,525,600				-0-
Tampa Bay Grand Prix				1				68,385				68,385				0.4	%			293,000				0.3	%			4.28				5,677,982				-0-
Various Tenants at Retail Shopping Center				1				64,220				64,220				0.4	%			762,000				0.7	%			11.87				3,072,880				-0-
SOFIVE, Inc.				1				60,400				60,400				0.3	%			548,000				0.5	%			9.07				4,903,589				1,782,828
Siemens Real Estate				1				51,130				51,130				0.3	%			479,000				0.5	%			9.37				4,452,425				-0-
Rockwell Collins, Inc.				1				38,833				38,833				0.2	%			362,000				0.3	%			9.32				5,100,000				-0-
Graybar Electric Company				1				26,340				26,340				0.1	%			109,000				0.1	%			4.14				1,858,591				-0-
Tenant Total as of 6/30/17				104				17,881,032				17,881,032				99.8	%		$	105,702,000				99.9	%		$	5.91			$	1,371,381,409			$	(C) 561,736,464
Vacant	(E)			1				36,270				-0-				0.0	%			(D) 94,000				0.1	%			-0-				2,182,274				-0-
Total as of 6/30/17				105				17,917,302				17,881,032				99.8	%		$	105,796,000				100.0	%		$	5.91			$	1,373,563,683			$	561,736,464
Acquisitions Subsequent to 6/30/17
FedEx Ground Package System, Inc. (Charlotte, NC MSA)				1				354,482				354,482				1.9	%			2,537,000				2.3	%			7.16
Pro Forma Total with Acquisitions Subsequent to 6/30/17				106				18,271,784				18,235,514				99.8	%		$	108,333,000				100.0	%		$	5.94
Leasing Activity Subsequent to 6/30/17
FBM Gypsum Supply of Illinois, LLC	(E)			na				na				36,270				0.3	%			172,000				0.2	%			4.74
Pro Forma Total				106				18,271,784				(F) 18,184,284				(F) 99.5%			$	108,505,000				100.0	%		$	5.94

 

	(A)	NF&M International and Datatel Resources are located at one property and therefore are counted as one property in the Property Count total.
	(B)	Woodstream Corporation and Altec Industries, Inc. are located at one property and therefore are counted as one property in the Property Count total.
		Other than these 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 $7,249,508.
	(D)	Includes rental revenue from property during Fiscal 2017 prior to becoming vacant.
	(E)	Entered into a 10.2 year lease agreement through December 31, 2027 with FBM Gypsum Supply of Illinois, LLC. The lease is expected to commence on November 1, 2017, with 2 months of free rent, after which initial annual rent of $159,888, representing $4.40 per square foot, will commence with 2.0% annual increases thereafter.
	(F)	Effective July 1, 2017, an 87,500 square foot building leased to FedEx Ground Package System, Inc., located in Ft. Myers, FL, became vacant.

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 13 of 23

 

 

Property Table by State

(unaudited)

 

				Property				Square				Occupied Square				% of Total				Annual				% of Total Ann.				Rent Per sf				Undepreciated				Mortgage
State				Count				Footage				Footage				sf				Rent				Rent				Occup.				Cost				Balance
Florida					13				1,899,643				1,899,643				10.6	%		$	13,941,000				13.2	%			7.34			$	200,246,461		$	100,861,021
Texas					10				1,781,967				1,781,967				9.9	%			14,182,000				13.4	%			7.96				182,082,804			84,960,463
Kentucky					3				1,295,940				1,295,940				7.2	%			5,049,000				4.8	%			3.90				66,071,852			40,980,974
Mississippi					4				1,158,889				1,158,889				6.5	%			4,439,000				4.2	%			3.83				55,224,199			32,205,483
Ohio					7				1,032,469				1,032,469				5.8	%			6,116,000				5.8	%			5.92				72,781,419			22,458,064
Indiana					2				999,176				999,176				5.6	%			4,210,000				4.0	%			4.21				61,458,071			33,420,918
Illinois					9				958,045				958,045				5.3	%			6,101,000				5.8	%			6.37				82,074,151			9,286,476
Tennessee					3				891,777				891,777				5.0	%			3,077,000				2.9	%			3.45				33,856,198			13,583,577
South Carolina					4				886,675				886,675				4.9	%			5,266,000				5.0	%			5.94				57,442,797			17,693,184
Michigan					4				833,054				833,054				4.6	%			5,574,000				5.3	%			6.69				72,970,157			27,851,798
Kansas					4				813,043				813,043				4.5	%			4,652,000				4.4	%			5.72				60,943,937			32,683,990
Missouri					5				804,397				804,397				4.5	%			3,121,000				2.9	%			3.88				39,384,765			6,839,422
North Carolina					3				585,224				585,224				3.3	%			3,111,000				2.9	%			5.32				45,725,284			19,201,012
New York					4				568,965				568,965				3.2	%			4,204,000				4.0	%			7.39				55,232,099			22,826,429
Pennsylvania					3				504,040				504,040				2.8	%			3,043,000				2.9	%			6.04				36,840,993			15,888,368
Virginia					5				407,265				407,265				2.3	%			2,442,000				2.3	%			6.00				34,507,456			4,982,380
Colorado					3				363,597				363,597				2.0	%			3,040,000				2.9	%			8.36				42,058,524			19,815,390
Oklahoma					3				314,941				314,941				1.8	%			2,029,000				1.9	%			6.44				25,060,869			11,885,673
Georgia					3				307,662				307,662				1.7	%			1,743,000				1.6	%			5.67				22,209,940			616,465
Arizona					1				283,358				283,358				1.6	%			1,352,000				1.3	%			4.77				16,824,226			4,721,556
Wisconsin					2				238,666				238,666				1.3	%			1,300,000				1.2	%			5.45				15,952,361			3,033,695
Washington					1				210,445				210,445				1.2	%			1,962,000				1.8	%			9.32				30,228,547			19,103,335
Louisiana					1				175,315				175,315				1.0	%			1,260,000				1.2	%			7.19				18,410,000			11,980,889
Maryland					1				148,881				148,881				0.8	%			1,426,000				1.3	%			9.58				14,512,355			-0-
New Jersey					2				124,620				124,620				0.7	%			1,310,000				1.2	%			10.51				7,976,469			1,782,828
Nebraska					1				89,115				89,115				0.5	%			446,000				0.4	%			5.00				5,944,691			-0-
Alabama					1				88,653				88,653				0.5	%			605,000				0.6	%			6.82				6,661,819			641,771
Minnesota					1				60,398				60,398				0.3	%			372,000				0.4	%			6.16				5,220,000			2,431,303
Connecticut					1				54,812				54,812				0.3	%			329,000				0.3	%			6.00				3,478,966			-0-
Iowa					1				36,270				-0-				0.3	%			94,000				0.1	%			-0-				2,182,273			-0-
Total as of 6/30/17					105				17,917,302				17,881,032				100.0	%		$	105,796,000				100.0	%		$	5.91			$	1,373,563,683		$	(A) 561,736,464
Acquisitions Subsequent to 6/30/17
North Carolina					1				354,482				354,482				1.9	%			2,537,000				2.3	%			7.16
Pro Forma Total with Acquisitions Subsequent to 6/30/17					106				18,271,784				18,235,514				100	%		$	108,333,000				100.0	%		$	5.94
Leasing Activity Subsequent to 6/30/17
Iowa	(B)				na				na				36,270				0.3	%			172,000				0.2	%			4.74
Pro Forma Total					106				18,271,784				(C) 18,184,284				100	%		$	108,505,000				100.0	%		$	5.94

 

	(A)	Does not include unamortized debt issuance costs of $7,249,508.
	(B)	Included in leasing activity subsequent to 6/30/17 is a 36,270 square foot building located in Iowa that the Company has recently entered into a 10.2 year lease agreement that will commence subsequent to June 30, 2017.
	(C)	Effective July 1, 2017, an 87,500 square foot building leased to FedEx Ground Package System, Inc., located in Ft. Myers, FL, became vacant.

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 14 of 23

 

 

Lease Expirations

(unaudited)

 

				Property				Square				% of Total				Annual				% of Total Ann.				Rent Per sf				Lease Exp. Term in				Undepreciated					Mortgage
Fiscal Year				Count				Footage				sf				Rent				Rent				Occup.				Years				Cost					Balance
2017					3				231,226				1.3	%		$	1,365,000				1.3	%		$	5.90				0.1			$	16,977,588					3,717,600
2018		(A)			14				1,359,120				7.6	%			8,271,000				7.8	%			6.09				0.8				95,995,454					7,568,565
2019					9				1,370,849				7.7	%			7,116,000				6.7	%			5.19				1.9				81,544,991					13,502,215
2020					4				383,449				2.1	%			2,116,000				2.0	%			5.52				2.9				27,388,231					-0-
2021		(A)			7				827,110				4.6	%			3,705,000				3.5	%			4.48				4.1				44,328,993					8,021,541
2022					7				1,138,320				6.4	%			6,376,000				6.0	%			5.60				4.7				75,791,836					28,214,645
2023		(A)			12				1,489,524				8.3	%			8,719,000				8.2	%			5.85				6.0				109,518,122					26,182,961
2024					12				1,853,948				10.3	%			11,318,000				10.7	%			6.10				6.9				139,224,175					50,889,806
2025		(A)			9				2,404,478				13.4	%			12,207,000				11.5	%			5.08				7.9				159,801,156					81,194,222
2026					7				1,126,033				6.3	%			8,669,000				8.2	%			7.70				9.0				118,951,060					57,971,793
2027					6				692,879				3.9	%			4,591,000				4.3	%			6.63				9.9				59,135,444					4,721,556
2028					1				861,889				4.8	%			3,010,000				2.8	%			3.49				11.1				36,914,917					23,886,671
2029					2				262,613				1.5	%			1,515,000				1.4	%			5.77				12.0				21,954,950					9,286,476
2030					4				1,044,832				5.8	%			7,388,000				7.0	%			7.07				12.8				109,198,469					66,923,256
2031					3				963,269				5.4	%			7,110,000				6.7	%			7.38				13.8				104,367,000					69,628,543
2032					4				1,248,673				7.0	%			9,278,000				8.8	%			7.43				14.7				140,448,291					93,839,199
2034					1				558,600				3.1	%			2,186,000				2.3	%			3.91				16.3				26,767,852					16,187,415
Various tenants at retail shopping center					1				64,220				0.4	%			762,000				0.7	%			11.87				-0-				3,072,880					-0-
Vacant		(D)			1				36,270				0.1	%			(C) 94,000				0.1	%			-0-				-0-				2,182,274					-0-
Total as of 6/30/17					105				17,917,302				100.0	%		$	105,796,000				100.0	%		$	5.91				7.8			$	1,373,563,683		(B)		$	561,736,464
Acquisitions Subsequent to 6/30/17
2032					1				354,482				1.9	%			2,537,000				2.3	%			7.16				14.9
Pro Forma Total with Acquisitions Subsequent to 6/30/17					106				18,271,784				100.0	%		$	108,333,000				100.0	%		$	5.94				7.9
Leasing Activity Subsequent to 6/30/17
2028		(D)			na				na				0.2	%			172,000				0.2	%			4.74				10.2
Pro Forma Total					106				18,271,784				100.0	%		$	108,505,000				100.0	%		$	5.94				7.9

 

	(A)	Included in 2018 is Datatel Resources and included in 2025 is NF&M International which both occupy one property. Included in 2021 is Woodstream Corporation and included in 2023 is Altec Industries which both occupy one property. Other than these two properties and the one retail property, all other properties are single-tenant.
	(B)	Does not include unamortized debt issuance costs of $7,249,508.
	(C)	Includes rental revenue from property during Fiscal 2017 prior to becoming vacant.
	(D)	Included in leasing activity subsequent to 6/30/17 is a 36,270 square foot building that the Company has recently entered into a 10.2 year lease agreement that will commence subsequent to June 30, 2017.

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 15 of 23

 

 

Recent Acquisitions During Fiscal 2017

(unaudited)

 

				City				Fiscal Year		Square				Annual				Rent Per sf				Lease		Purchase				Initial Mortgage
No		Tenant		(MSA)		State		Acquisition		Footage				Rent				Occup.				Expiration		Price				Balance
1		FedEx Ground Package System, Inc.		Hamburg (Buffalo)		NY		2017			338,584			$	2,309,000			$	6.82			3/31/2031		$	35,100,000			$	23,500,000
2		FedEx Ground Package System, Inc.		Ft. Myers		FL		2017			213,672				1,365,000				6.39			9/30/2026			21,001,538				14,500,000
3		FedEx Ground Package System, Inc.		Walker (Grand Rapids)		MI		2017			343,483				2,102,000				6.12			1/31/2032			32,120,000				20,875,000
4		FedEx Ground Package System, Inc.		Mesquite (Dallas)		TX		2017			351,874				3,194,000				9.08			3/31/2032			50,621,072				32,900,000
5		Autoneum North America, Inc.		Aiken (Augusta, GA)		SC		2017			315,560				1,700,000				5.39			4/30/2032			21,933,000				15,350,000
6		FedEx Ground Package System, Inc.		Homestead (Miami)		FL		2017			237,756				2,282,000				9.60			3/31/2032			38,347,933				24,800,000
7		Bunzl Distribution Oklahoma, Inc.		Oklahoma City		OK		2017			110,361				721,000				6.53			8/31/2024			9,000,000				6,000,000
		Total as of 6/30/17									1,911,290			$	13,673,000			$	7.15					$	208,123,543			$	137,925,000
Acquisitions Subsequent to 6/30/17
8		FedEx Ground Package System, Inc.		Concord (Charlotte)		NC		2017			354,482				2,537,000				7.16			5/31/2032			40,598,446				26,184,000
											2,265,772			$	16,210,000			$	7.15					$	248,721,989			$	164,109,000

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 16 of 23

 

 

Property Table

(unaudited)

 

										Fiscal Year								Square				Annual				Rent Per sf				Lease Exp. 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			$	3,010,000			$	3.49				11.1			$	36,914,917			$	23,886,671
2		ULTA, Inc.				Greenwood (Indianapolis)		IN			2015				100.0	%			671,354				2,677,000				3.99				8.1				37,512,071				21,808,660
3		Jim Beam Brands Company				Frankfort		KY			2015				100.0	%			599,840				2,032,000				3.39				7.6				28,000,000				17,784,413
4		TreeHouse Private Brands, Inc.				Buckner (Louisville)		KY			2014				100.0	%			558,600				2,186,000				3.91				16.3				26,767,852				16,187,415
5		FedEx Corporation				Memphis		TN			2010				100.0	%			449,900				1,327,000				2.95				1.9				14,624,554				6,082,290
6		Woodstream Corporation		(A)		St. Joseph		MO			2001				100.0	%			256,000				910,000				3.55				4.3				8,885,429				-0-
		Altec Industries, Inc.		(A)		St. Joseph		MO			2001				100.0	%			126,880				367,000				2.89				5.7				4,403,841				-0-
7		CBOCS Distribution, Inc.				Lebanon (Nashville)		TN			2011				100.0	%			381,240				1,433,000				3.76				7.0				14,215,126				7,501,287
8		Best Buy Warehousing Logistics, Inc.				Streetsboro (Cleveland)		OH			2012				100.0	%			368,060				1,660,000				4.51				4.6				19,600,000				10,032,360
9		FedEx Ground Package System, Inc.				Mesquite (Dallas)		TX			2017				100.0	%			351,874				3,194,000				9.08				14.8				49,879,790				32,900,000
10		FedEx Ground Package System, Inc.				Walker (Grand Rapids)		MI			2017				100.0	%			343,483				2,102,000				6.12				14.6				31,654,985				20,789,199
11		FedEx Ground Package System, Inc.				Hamburg (Buffalo)		NY			2017				100.0	%			338,584				2,309,000				6.82				13.8				34,850,000				22,826,429
12		FedEx Ground Package System, Inc.				Concord (Charlotte)		NC			2016				100.0	%			330,717				2,234,000				6.76				8.1				33,044,795				19,201,012
13		FedEx Ground Package System, Inc.				Indianapolis		IN			2014				100.0	%			327,822				1,533,000				4.68				6.8				23,946,000				11,612,258
14		FedEx Ground Package System, Inc.				Aiken (Augusta, GA)		SC			2017				100.0	%			315,560				1,700,000				5.39				14.8				21,040,396				15,350,000
15		FedEx Ground Package System, Inc.				Olathe (Kansas City)		KS			2016				100.0	%			313,763				2,196,000				7.00				13.9				31,737,000				21,389,052
16		FedEx Ground Package System, Inc.				Davenport (Orlando)		FL			2016				100.0	%			310,922				2,605,000				8.38				13.8				37,780,000				25,413,062
17		FedEx Ground Package System, Inc.				Fort Worth (Dallas)		TX			2015				100.0	%			304,608				2,367,000				7.77				12.8				35,300,832				22,449,369
18		Science Applications International				Hanahan (Charleston)		SC			2005				100.0	%			302,400				1,476,000				4.88				1.8				13,374,441				-0-
19		FedEx Ground Package System, Inc.				Jacksonville		FL			2015				100.0	%			297,579				1,999,000				6.72				12.5				30,732,090				17,644,851
20		Western Container Corp. (The Coca-Cola Company)				Tolleson (Phoenix)		AZ			2003				100.0	%			283,358				1,352,000				4.77				9.8				16,824,226				4,721,556
21		International Paper Company				Edwardsville (Kansas City)		KS			2014				100.0	%			280,000				1,337,000				4.78				6.2				18,294,108				10,112,819
22		NF&M International		(B)		Monaca (Pittsburgh)		PA			1988				100.0	%			174,802				833,000				4.77				7.5				5,389,424				-0-
		Datatel Resources Corp.		(B)		Monaca (Pittsburgh)		PA			1988				100.0	%			80,856				244,000				3.02				0.4				2,492,919				-0-
23		FedEx Ground Package System, Inc.				Orion		MI			2007				100.0	%			245,633				1,908,000				7.77				6.0				22,885,636				-0-
24		FedEx Ground Package System, Inc.				Homestead (Miami)		FL			2017				100.0	%			237,756				2,282,000				9.60				14.8				37,873,120				24,800,000
25		Anda Pharmaceuticals, Inc.				Olive Branch (Memphis, TN)		MS			2012				100.0	%			234,660				1,200,000				5.11				5.1				14,550,000				8,318,812
26		UGN, Inc.				Monroe (Cincinnati)		OH			2015				100.0	%			232,200				1,060,000				4.57				12.7				12,937,000				7,725,701
27		FedEx Ground Package System, Inc.				Colorado Springs		CO			2016				100.0	%			225,362				1,832,000				8.13				8.6				28,500,000				17,872,072
28		Caterpillar Logistics Services, Inc.				Griffin (Atlanta)		GA			2006				100.0	%			218,120				1,169,000				5.36				0.4				14,868,857				-0-
29		Fedex Ground Package System, Inc.				Ft. Myers		FL			2017				100.0	%			213,672				1,365,000				6.39				9.3				20,800,000				14,202,709
30		FedEx Ground Package System, Inc.				Burlington (Seattle/Everett)		WA			2016				100.0	%			210,445				1,962,000				9.32				13.2				30,228,547				19,103,335
31		FedEx Ground Package System, Inc.				Sauget (St. Louis, MO)		IL			2015				100.0	%			198,773				1,036,000				5.21				11.9				15,204,950				9,286,476
32		Anheuser-Busch, Inc.				Granite City (St. Louis, MO)		IL			2001				100.0	%			184,800				810,000				4.38				4.4				12,578,197				-0-
33		United Technologies Corporation				Carrollton (Dallas)		TX			2010				100.0	%			184,317				1,576,000				8.55				1.5				17,819,203				7,419,925
34		FedEx Ground Package System, Inc.				Spring (Houston)		TX			2014				100.0	%			181,176				1,581,000				8.73				7.3				19,283,798				8,687,334
35		Carlisle Tire & Wheel Company				Edwardsville (Kansas City)		KS			2003				100.0	%			179,280				787,000				4.39				0.9				7,232,986				-0-
36		FedEx Ground Package System, Inc.				Ft. Mill (Charlotte, NC)		SC			2010				100.0	%			176,939				1,415,000				8.00				6.3				15,413,307				1,495,698
37		FedEx Ground Package System, Inc.				Covington (New Orleans)		LA			2016				100.0	%			175,315				1,260,000				7.19				8.0				18,410,000				11,980,889
38		FedEx Ground Package System, Inc.				Livonia (Detroit)		MI			2013				100.0	%			172,005				1,194,000				6.94				4.8				13,762,030				7,062,599
39		Home Depot USA, Inc.				Montgomery (Chicago)		IL			2004				100.0	%			171,200				988,000				5.77				3.0				11,298,367				-0-
40		FedEx Ground Package System, Inc.				Tampa		FL			2004				100.0	%			170,779				1,624,000				9.51				9.1				19,696,227				6,095,549
41		FedEx Ground Package System, Inc.				Edinburg		TX			2011				100.0	%			164,207				1,097,000				6.68				9.3				12,039,014				-0-
42		FedEx Ground Package System, Inc.				Lindale (Tyler)		TX			2015				100.0	%			163,378				725,000				4.44				7.0				9,930,000				6,108,716
43		Bunzl Distribution Midcentral, Inc.				Kansas City		MO			2015				100.0	%			158,417				747,000				4.72				4.3				9,651,226				6,839,422
44		FedEx Ground Package System, Inc.				Oklahoma City		OK			2012				100.0	%			158,340				1,048,000				6.62				8.0				12,584,462				4,042,175
45		FedEx Ground Package System, Inc.				Waco		TX			2012				100.0	%			150,710				1,078,000				7.15				8.2				12,551,368				4,594,245
46		FedEx Ground Package System, Inc.				Beltsville (Washington, DC)		MD			2001				100.0	%			148,881				1,426,000				9.58				1.1				14,512,355				-0-
47		Victory Packaging, L.P.				Fayetteville		NC			1997				100.0	%			148,000				496,000				3.35				3.7				5,441,876				-0-
48		FedEx Ground Package System, Inc.				El Paso		TX			2006				100.0	%			144,149				1,345,000				9.33				6.3				12,431,193				-0-
49		FedEx Ground Package System, Inc.				Cocoa		FL			2008				100.0	%			144,138				1,112,000				7.71				7.3				14,127,449				4,825,954
50		FedEx Ground Package System, Inc.				Cudahy (Milwaukee)		WI			2001				100.0	%			139,564				832,000				5.96				10.0				9,382,361				-0-
51		Challenger Lifts, Inc (Snap-On Inc.)				Louisville		KY			2016				100.0	%			137,500				831,000				6.04				8.9				11,304,000				7,009,146
52		FedEx Ground Package System, Inc.				Richfield (Cleveland)		OH			2006				100.0	%			131,152				1,493,000				11.38				7.3				16,435,479				2,815,061
53		General Electric Company				Imperial (Pittsburgh)		PA			2016				100.0	%			125,860				1,315,000				10.45				8.5				19,950,000				12,150,546
54		FedEx Ground Package System, Inc.				Wheeling (Chicago)		IL			2003				100.0	%			123,000				1,279,000				10.40				9.9				18,537,652				-0-
55		FedEx Ground Package System, Inc.				Altoona		PA			2014				100.0	%			122,522				651,000				5.31				6.2				9,008,650				3,737,822
56		FedEx Corporation				Mechanicsville (Richmond)		VA			2001				100.0	%			112,799				541,000				4.80				5.8				7,776,711				-0-
57		FedEx Corporation				Orlando		FL			2008				100.0	%			110,638				666,000				6.02				0.4				8,554,432				4,161,296
58		Bunzl Distribution Oklahoma, Inc.				Oklahoma City		OK			2017				100.0	%			110,361				721,000				6.53				7.2				8,728,375				6,000,000
59		Style Crest, Inc.				Winston-Salem		NC			2002				100.0	%			106,507				381,000				3.58				3.8				7,238,613				-0-
60		FedEx Ground Package System, Inc.				Cheektowaga (Buffalo)		NY			2000				100.0	%			104,981				966,000				9.20				2.2				10,960,823				-0-

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 17 of 23

 

 

Property Table

(unaudited)

 

										Fiscal Year								Square				Annual				Rent Per sf				Lease Exp. Term in				Undepreciated					Mortgage
No		Tenant				City (MSA)		State		Acquisition				Occup.				Footage				Rent				Occup.				Years				Cost					Balance
61		FedEx Ground Package System, Inc.				West Chester Twp (Cincinnati)		OH			1999				100.0	%			103,818			$	537,000			$	5.17				6.2			$	5,733,686				$	1,884,942
62		FedEx Ground Package System, Inc.				Roanoke		VA			2013				100.0	%			103,402				755,000				7.30				5.8				10,200,000					4,982,380
63		Pittsburgh Glass Works, LLC.				O’ Fallon (St. Louis)		MO			1994				100.0	%			102,135				427,000				4.18				1.0				4,245,913					-0-
64		FedEx Ground Package System, Inc.				Green Bay		WI			2013				100.0	%			99,102				468,000				4.72				5.9				6,570,000					3,033,695
65		Holland 1916 Inc.				Liberty (Kansas City)		MO			1998				100.0	%			95,898				345,000				3.60				2.0				7,397,881					-0-
66		FedEx Corporation				Jacksonville		FL			1999				100.0	%			95,883				518,000				5.40				1.9				6,288,763					-0-
67		FedEx Corporation				Tampa		FL			2006				100.0	%			95,662				603,000				6.30				0.3				7,603,154				$	3,717,600
68		FedEx Ground Package System, Inc.				Hanahan (Charleston)		SC			2005				100.0	%			91,776				675,000				7.35				1.1				7,614,653					847,486
69		National Oilwell Varco, Inc.				Houston		TX			2010				100.0	%			91,295				750,000				8.22				5.3				8,083,107					2,800,874
70		FedEx Corporation				Omaha		NE			1999				100.0	%			89,115				446,000				5.00				6.3				5,944,691					-0-
71		Joseph T. Ryerson and Son, Inc.				Elgin (Chicago)		IL			2002				100.0	%			89,052				506,000				5.68				2.6				6,932,916					-0-
72		FedEx Ground Package System, Inc.				Huntsville		AL			2005				100.0	%			88,653				605,000				6.82				9.1				6,661,819					641,771
73		FedEx Ground Package System, Inc.		(F)		Ft. Myers		FL			2003				100.0	%			87,500				433,000				4.95				-0-				5,017,447					-0-
74		CHEP USA, Inc.				Roanoke		VA			2007				100.0	%			83,000				497,000				5.99				7.7				7,405,447					-0-
75		FedEx Corporation				Bedford Heights (Cleveland)		OH			2007				100.0	%			82,269				408,000				4.96				1.2				6,872,829					-0-
76		RGH Enterprises, Inc.				Halfmoon (Albany)		NY			2012				100.0	%			75,000				601,000				8.01				4.4				5,525,600					-0-
77		FedEx Corporation				Schaumburg (Chicago)		IL			1997				100.0	%			73,500				480,000				6.53				9.8				5,177,940					-0-
78		FedEx Corporation				Romulus (Detroit)		MI			1998				100.0	%			71,933				370,000				5.14				3.9				4,667,506					-0-
79		FedEx Ground Package System, Inc.				Denver		CO			2005				100.0	%			69,865				564,000				8.07				1.1				6,354,051					826,660
80		Tampa Bay Grand Prix				Tampa		FL			2005				100.0	%			68,385				293,000				4.28				3.3				5,677,982					-0-
81		FedEx Ground Package System, Inc.				Colorado Springs		CO			2006				100.0	%			68,370				644,000				9.42				1.3				7,204,472					1,116,658
82		Sherwin-Williams Company				Rockford		IL			2011				100.0	%			66,387				479,000				7.22				6.5				5,551,227					-0-
83		Kellogg Sales Company				Kansas City		MO			2007				100.0	%			65,067				325,000				4.99				1.1				4,800,474					-0-
84		Various Tenants at Retail Shopping Center				Somerset		NJ			1970				100.0	%			64,220				762,000				11.87				na				3,072,880					-0-
85		The American Bottling Company (Dr Pepper Snapple)				Cincinnati		OH			2015				100.0	%			63,840				479,000				7.50				12.3				6,750,000					-0-
86		FedEx Corporation				Chattanooga		TN			2007				100.0	%			60,637				317,000				5.23				5.3				5,016,518					-0-
87		SOFIVE, Inc.				Carlstadt (New York, NY)		NJ			2001				100.0	%			60,400				548,000				9.07				7.6				4,903,589					1,782,828
88		FedEx Ground Package System, Inc.				Stewartville (Rochester)		MN			2013				100.0	%			60,398				372,000				6.16				5.9				5,220,000					2,431,303
89		United Technologies Corporation				Richmond		VA			2004				100.0	%			60,000				320,000				5.33				1.4				4,768,309					-0-
90		FedEx Ground Package System, Inc.				Augusta		GA			2005				100.0	%			59,358				453,000				7.63				1.0				5,363,304					616,465
91		Kellogg Sales Company				Newington (Hartford)		CT			2001				100.0	%			54,812				329,000				6.00				2.7				3,478,966					-0-
92		Siemens Real Estate				Lebanon (Cincinnati)		OH			2012				100.0	%			51,130				479,000				9.37				1.8				4,452,425					-0-
93		Kellogg Sales Company				Orangeburg (New York)		NY			1993				100.0	%			50,400				328,000				6.51				0.7				3,895,675					-0-
94		FedEx Corporation				Charlottesville		VA			1999				100.0	%			48,064				329,000				6.85				0.2				4,356,988					-0-
95		FedEx Ground Package System, Inc.				Corpus Christi		TX			2012				100.0	%			46,253				469,000				10.14				4.2				4,764,500					-0-
96		The American Bottling Company (Dr Pepper Snapple)				Tulsa		OK			2014				100.0	%			46,240				260,000				5.62				6.7				3,748,035					1,843,498
97		The Coca-Cola Company				Topeka		KS			2009				100.0	%			40,000				332,000				8.30				4.3				3,679,843					1,182,119
98		Rockwell Collins, Inc.				Rockford		IL			2015				100.0	%			38,833				362,000				9.32				10.0				5,100,000					-0-
99		Vacant		(E)		Urbandale (Des Moines)		IA			1994				0.0	%			36,270				(D) 94,000				na				na				2,182,274					-0-
100		FedEx Corporation				Richland (Jackson)		MS			1994				100.0	%			36,000				120,000				3.33				6.8				1,900,691					-0-
101		FedEx Corporation				Punta Gorda		FL			2007				100.0	%			34,624				286,000				8.26				10.0				4,113,265					-0-
102		FedEx Corporation				Lakeland		FL			2006				100.0	%			32,105				155,000				4.83				0.4				1,982,532					-0-
103		FedEx Corporation				Augusta		GA			2006				100.0	%			30,184				121,000				4.01				5.4				1,977,779					-0-
104		Graybar Electric Company				Ridgeland (Jackson)		MS			1993				100.0	%			26,340				109,000				4.14				2.1				1,858,591					-0-
105		Sherwin-Williams Company				Burr Ridge (Chicago)		IL			1997				100.0	%			12,500				161,000				12.88				4.3				1,692,901					-0-
		Total as of 6/30/17													99.8	%			17,917,302			$	105,796,000			$	5.91				7.8			$	1,373,563,683			(C)	$	561,736,464
		Acquisitions Subsequent to 6/30/17
106		FedEx Ground Package System, Inc.				Concord (Charlotte)		NC			2017				100.0	%			354,482				2,537,000				7.16				14.9
		Pro Forma Total with Acquisitions Subsequent to 6/30/17													99.8	%			18,271,784			$	108,333,000			$	5.94				7.9
		Leasing Activity Subsequent to 6/30/17
		FBM Gypsum Supply of Illinois, LLC		(E)		Urbandale (Des Moines)		IA			1994				100.0	%			na				172,000				4.74				10.2
		Pro Forma Total											(F)		99.5%				18,271,784			$	108,505,000			$	5.94				7.9

 

	(A)	Both tenants occupy one property.
	(B)	Both tenants occupy one property.
		Other than these 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 $7,249,508.
	(D)	Includes rental revenue from property during Fiscal 2017 prior to becoming vacant.
	(E)	Entered into a 10.2 year lease agreement through December 31, 2027 with FBM Gypsum Supply of Illinois, LLC. The lease is expected to commence on November 1, 2017, with 2 months of free rent, after which Initial annual rent of $159,888, representing $4.40 per square foot, will commence with 2.0% annual increases thereafter.
	(F)	Effective July 1, 2017, an 87,500 square foot building leased to FedEx Ground Package System, Inc., located in Ft. Myers, FL, became vacant.

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 18 of 23

 

 

 

 

 

Definitions

 

Investors and analysts following the real estate industry utilize funds from operations (“FFO”), core funds from operations (“Core FFO”), net operating income (“NOI”), Same Property NOI, Same Property Cash NOI, earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) and adjusted funds from operations (“AFFO”), 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, 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 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 general and administrative expenses. 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, 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 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 plus amortization of financing costs; stock compensation expense, deprecation of corporate office tenant improvements and non-recurring other expenses, less gain on sale of securities transactions; effects of non-cash U.S. GAAP straight-line rent adjustments and recurring capital expenditures. Recurring capital expenditures are defined as all capital expenditures, 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 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 and gain on sale of securities transactions. 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.

 

Adjusted EBITDA is calculated as net income attributable to common shareholders, as defined by U.S. GAAP, plus preferred dividends, depreciation and amortization, interest expense, including amortization of financing costs, acquisition costs, net amortization of acquired above and below market lease revenue and loss on sale of real estate investment, less gain on sale of securities transactions.

 

FFO, Core FFO, AFFO, NOI, Same Property NOI, Same Property Cash NOI 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 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 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 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 19 of 23

 

 

FOR IMMEDIATE RELEASE	August 9, 2017
	Contact: Susan Jordan
	732-577-9996

 

MONMOUTH REAL ESTATE REPORTS RESULTS FOR

THE THIRD QUARTER ENDED JUNE 30, 2017

 

FREEHOLD, NJ, August 9, 2017........ Monmouth Real Estate Investment Corporation (NYSE:MNR) reported Net Income Attributable to Common Shareholders of $5,217,000 or $0.07 per diluted share for the three months ended June 30, 2017 as compared to $6,080,000 or $0.09 per diluted share for the three months ended June 30, 2016. This decrease was due to a $2.5 million, or $0.03 per diluted share, non-recurring preferred stock redemption charge. Core Funds from Operations (Core FFO) were $15,441,000 or $0.21 per diluted share for the three months ended June 30, 2017 as compared to $12,752,000 or $0.19 per diluted share for the three months ended June 30, 2016, representing an increase in Core FFO per share of 11%. Adjusted Funds from Operations (AFFO) for the three months ended June 30, 2017 were $13,960,000, or $0.19 per diluted share, versus $12,431,000, or $0.19 per diluted share, for the three months ended June 30, 2016.

 

A summary of significant financial information for the three and nine months ended June 30, 2017 and 2016 is as follows:

 

		Three Months Ended June 30,
		2017				2016
Rental Revenue		$	24,400,000			$	20,790,000
Reimbursement Revenue		$	4,209,000			$	3,324,000
Net Operating Income (NOI) (1)		$	24,036,000			$	20,499,000
Total Expenses		$	14,131,000			$	11,836,000
Dividend and Interest Income		$	1,899,000			$	1,486,000
Gain on Sale of Securities Transactions, net		$	1,488,000			$	272,000
Net Income		$	11,730,000			$	8,231,000
Net Income Attributable to Common Shareholders		$	5,217,000			$	6,080,000
Net Income Attributable to Common Shareholders Per Diluted Common Share		$	0.07			$	0.09
Core FFO (1)		$	15,441,000			$	12,752,000
Core FFO per Diluted Common Share (1)		$	0.21			$	0.19
AFFO (1)		$	13,960,000			$	12,431,000
AFFO per Diluted Common Share (1)		$	0.19			$	0.19
Dividends Declared per Common Share		$	0.16			$	0.16
Weighted Avg. Diluted Common Shares Outstanding			73,054,000				66,462,000

 

		Nine Months Ended June 30,
		2017				2016
Rental Revenue		$	71,292,000			$	59,466,000
Reimbursement Revenue		$	11,807,000			$	9,874,000
Net Operating Income (NOI) (1)		$	70,184,000			$	58,342,000
Total Expenses		$	41,179,000			$	35,541,000
Dividend and Interest Income		$	4,631,000			$	4,050,000
Gain on Sale of Securities Transactions, net		$	2,294,000			$	1,159,000
Net Income		$	30,009,000			$	22,302,000
Net Income Attributable to Common Shareholders		$	16,216,000			$	15,847,000
Net Income Attributable to Common Shareholders Per Diluted Common Share		$	0.23			$	0.24
Core FFO (1)		$	41,694,000			$	35,278,000
Core FFO per Diluted Common Share (1)		$	0.58			$	0.55
AFFO (1)		$	39,411,000			$	33,901,000
AFFO per Diluted Common Share (1)		$	0.55			$	0.52
Dividends Declared per Common Share		$	0.48			$	0.48
Weighted Avg. Diluted Common Shares Outstanding			71,423,000				64,703,000

 

A summary of significant balance sheet information as of June 30, 2017 and September 30, 2016 is as follows:

 

		June 30, 2017				September 30, 2016
Net Real Estate Investments		$	1,204,348,000			$	1,022,483,000
Securities Available for Sale at Fair Value		$	100,496,000			$	73,605,000
Total Assets		$	1,351,618,000			$	1,223,486,000
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs		$	554,487,000			$	477,476,000
Loans Payable		$	122,095,000			$	80,791,000
Total Shareholders’ Equity		$	658,246,000			$	597,858,000

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 20 of 23

 

 

Michael P. Landy, President and CEO, commented on the results for the third quarter of fiscal 2017,

 

“Monmouth had a very productive quarter that saw a substantial amount of acquisition activity as several properties from our build-to-suit pipeline came on line. During the quarter, we acquired five brand-new Class A built-to-suit properties containing a total of 1.4 million square feet. These five acquisitions were purchased for an aggregate cost of $152.0 million and have a weighted average lease term of 14.4 years. Because four of the five acquisitions did not close until the last week of the quarter, their favorable impact to our earnings was not a factor during the recent quarter but will be apparent going forward.”

 

“During the quarter, we also finished successfully replacing all $111 million of our high dividend Series A and Series B perpetual preferred stock, which had a weighted average coupon of 7.755%, with our new 6.125% Series C perpetual preferred stock. This will result in approximately $1.76 million in annual preferred dividend savings going forward. Our balance sheet has never been stronger and these substantial improvements to our capital structure will benefit Monmouth for many years to come, regardless of what interest rates may do in the future. Net Income during the quarter was impacted by a non-recurring, non-cash $2.5 million preferred redemption charge. During the recent quarter, we generated Core FFO of $0.21 per diluted share representing an 11% increase over the prior year period. Our AFFO per diluted share was $0.19 which is in-line with the prior year period and represents a 6% increase sequentially.”

 

“Additionally, our strong financial performance continued with the following achievements over the quarter:

 

	●	Increased our Gross Revenue by 19% to $30.5 million, compared to $25.6 million in the prior year period,
	●	Increased our Net Operating Income by 17% to $24.0 million, compared to $20.5 million in the prior year period,
	●	Generated $1.5 million in net realized gains on our securities investments resulting in $2.3 million in cumulative net realized gains thus far in fiscal 2017, in addition to the $8.8 million in unrealized gains held at quarter end,
	●	Achieved a total market capitalization of $2.0 billion, and
	●	Entered into an At-The-Market Preferred Equity Program (ATM Preferred Stock Program) with FBR Capital Markets & Co. in which the Company may, from time to time, offer and sell additional shares of its 6.125% Series C Preferred Stock. Subsequent to the quarter end through July 25, 2017, the Company sold 627,867 shares under its ATM Preferred Stock Program at a weighted average price of $25.44 per share, and realized net proceeds, after offering expenses, of approximately $15.6 million.”

 

“Our property portfolio continued to deliver strong results as evidenced by the following accomplishments:

 

	●	Increased our current quarter end occupancy rate to 99.8%, an increase of 20 basis points over the prior year period,
	●	Increased our weighted average lease maturity by 10% to 7.8 years from 7.1 years in the prior year period,
	●	Renewed 10 of the 13 leases set to expire in fiscal 2017, totaling 1.5 million square feet. Nine of the 10 renewed leases, representing 1.3 million square feet, or 83% of the expiring square footage, have a weighted average lease term of 6.5 years, and a weighted average lease rate of $5.61 per square foot on a GAAP basis. This represents a decrease in the weighted average lease rate of 1.2% on a GAAP basis. Subsequent to quarter end, we leased one of the additional three buildings to a new tenant. One of the ten leases, representing 87,500 square feet, was renewed for only eight months because the tenant, FedEx Ground, moved its operations to our newly constructed 214,000 square foot facility, in the same market, in Ft. Myers, FL. The remaining two leases that are still set to expire during fiscal 2017 are currently under discussion.
	●	Our same property occupancy decreased 30 basis points from 100% to 99.7% during the nine month period and our same property NOI increased 0.4% on a GAAP basis and 1.6% on a cash basis.
	●	Subsequent to quarter end, we acquired a brand new Class A built-to-suit property containing 354,000 square feet, in the Charlotte, NC MSA, for a cost of $40.6 million, leased for 15 years to FedEx Ground. This facility will generate $2.5 million in annualized rental revenue, and
	●	Continued to grow our acquisition pipeline to $88.7 million currently, representing 1.04 million square feet. These are all brand new, build-to-suit developments currently under construction and set to come online over the next several quarters.”

 

Mr. Landy further stated, “Monmouth’s strong performance was on full display this recent quarter. Our 1.4 million square feet in new acquisition activity, our sector leading 99.8% occupancy rate, our major enhancements to our strong balance sheet, and our consistent earnings growth, all result in a company that is very well positioned to achieve substantial results going forward. We continue to grow our asset base one high quality acquisition at a time and look forward to building upon our successful track record to date.”

 

Monmouth Real Estate Investment Corporation will host its Third Quarter FY 2017 Financial Results Webcast and Conference Call on Thursday, August 10, 2017 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 2017 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.

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 21 of 23

 

 

To participate in the Webcast, select the 3Q2017 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 10, 2017. It will be available until December 1, 2017, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10107965. 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 U.S. 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 106 properties containing a total of approximately 18.3 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, 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. We define Core FFO as FFO, excluding acquisition costs and costs associated with the Redemption of Preferred Stock. We define AFFO as Core FFO excluding lease termination income, gains or losses on securities transactions, stock based compensation expense, depreciation of corporate office tenant improvements, amortization of deferred financing costs, non-recurring other expense, the effect of non-cash U.S. GAAP straight-line rent adjustments and less recurring capital expenditures. We define recurring capital expenditures as all capital expenditures, 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 from property operations as net income attributable to common shareholders, as defined by U.S. GAAP, plus 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 and gain on sale of securities transactions. The components of NOI consists of recurring rental and reimbursement revenue, less real estate taxes and operating expenses, such as insurance, utilities, and repairs and maintenance and other expenses. Adjusted EBITDA is calculated as net income attributable to common shareholders, as defined by U.S. GAAP, plus preferred dividends; depreciation and amortization; interest expense, including amortization of financing costs; acquisition costs; net amortization of acquired above and below market lease revenue and loss on sale of real estate investment, less gain on sale of securities transactions. 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 and Adjusted EBITDA, 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 per diluted share and, accordingly, our FFO, Core FFO and AFFO per diluted share 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, 2017 and 2016:

 

		Three Months Ended								Nine Months Ended
			6/30/2017				6/30/2016				6/30/2017				6/30/2016
Net Income Attributable to Common Shareholders		$	5,217,000			$	6,079,000			$	16,216,000			$	15,847,000
Plus: Depreciation Expense (excluding Corporate Office Capitalized Costs)			7,279,000				6,066,000				21,333,000				17,390,000
Plus: Amortization of Intangible Assets			263,000				272,000				771,000				915,000
Plus: Amortization of Capitalized Lease Costs			215,000				199,000				633,000				580,000
Plus: Loss on Sale of Real Estate Investment			-0-				-0-				95,000				-0-
FFO Attributable to Common Shareholders			12,974,000				12,616,000				39,048,000				34,732,000
Plus: Acquisition Costs			-0-				136,000				179,000				546,000
Plus: Redemption of Preferred Stock			2,467,000				-0-				2,467,000				-0-
Core FFO Attributable to Common Shareholders			15,441,000				12,752,000				41,694,000				35,278,000
Plus: Stock Compensation Expense			175,000				100,000				441,000				307,000
Plus: Depreciation of Corporate Office Capitalized Costs			39,000				31,000				117,000				88,000
Plus: Amortization of Financing Costs			283,000				240,000				950,000				713,000
Plus: Non-recurring other expense			-0-				100,000				-0-				500,000
Less: Gain on Sale of Securities Transactions			(1,488,000	)			(272,000	)			(2,294,000	)			(1,159,000	)
Less: Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment			(295,000	)			(350,000	)			(925,000	)			(1,172,000	)
Less: Recurring Capital Expenditures			(195,000	)			(170,000	)			(572,000	)			(654,000	)
AFFO Attributable to Common Shareholders		$	13,960,000			$	12,431,000			$	39,411,000			$	33,901,000

 

Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 22 of 23

 

 

The following are the Cash Flows provided (used) by Operating, Investing and Financing Activities for the nine months ended June 30, 2017 and 2016:

 

		Nine Months Ended
			6/30/2017				6/30/2016
Operating Activities		$	50,191,000			$	43,347,000
Investing Activities			(232,827,000	)			(169,805,000	)
Financing Activities			98,637,000				121,271,000

 

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Third Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 23 of 23