STAG INDUSTRIAL : ANNOUNCES FOURTH QUARTER AND FULL YEAR 2021 RESULTS - Form 8-K

STAG INDUSTRIAL ANNOUNCES FOURTH QUARTER AND FULL YEAR

2021 RESULTS

Boston, MA - February 16, 2022 - STAG Industrial, Inc. (the "Company") (NYSE:STAG), today announced its financial and operating results for the quarter ended December 31, 2021.

"As we enter this year of management transition, I am heartened by the continued operational excellence we are enjoying," said Ben Butcher, Chief Executive Officer of the Company. "I am truly proud of the team we have built and am confident that the company will be in good hands when I move to Executive Chair."

Fourth Quarter and Full Year 2021 Highlights

•Reported $0.50 of net income per basic and diluted common share for the fourth quarter of 2021, compared to $0.63 of net income per basic and diluted common share for the fourth quarter of 2020. Reported $86.2 million of net income attributable to common stockholders for the fourth quarter of 2021, compared to net income attributable to common stockholders of $94.6 million for the fourth quarter of 2020.

•Achieved $0.51 of Core FFO per diluted share for the fourth quarter of 2021, an increase of 4.1% compared to fourth quarter 2020 Core FFO per diluted share of $0.49. Generated Core FFO of $90.0 million for the fourth quarter of 2021, compared to $75.5 million for the fourth quarter of 2020, an increase of 19.2%. Achieved $2.06 of Core FFO per diluted share for the year ended December 31, 2021, an increase of 9.0% compared to $1.89 of Core FFO per diluted share for the year ended December 31, 2020.

•Produced Cash NOI of $114.5 million for the fourth quarter of 2021, an increase of 14.0% compared to the fourth quarter of 2020 of $100.4 million. Produced Cash NOI of $438.0 million for the year ended December 31, 2021, an increase of 13.5% compared to the year ended December 31, 2020 of $386.0 million.

•Produced Same Store Cash NOI of $89.9 million for the fourth quarter of 2021, an increase of 3.4% compared to the fourth quarter of 2020 of $87.0 million. Produced Same Store Cash NOI of $358.1 million for the year ended December 31, 2021, an increase of 3.8% compared to the year ended December 31, 2020 of $344.9 million.

•Produced Cash Available for Distribution of $74.1 million for the fourth quarter of 2021, an increase of 15.8% compared to the fourth quarter of 2020 of $64.0 million. Produced Cash Available for Distribution of $293.8 million for the year ended December 31, 2021, an increase of 20.5% compared to the year ended December 31, 2020 of $243.8 million.

•Acquired 35 buildings in the fourth quarter of 2021, consisting of 6.3 million square feet, for $689.5 million, with a Cash Capitalization Rate of 5.0% and a Straight-Line Capitalization Rate of 5.2%.

•Sold eight buildings in the fourth quarter of 2021, consisting of 1.1 million square feet for $112.5 million, resulting in a net gain of $62.9 million.

•Achieved an Occupancy Rate of 96.9% on the total portfolio and 97.4% on the Operating Portfolio as of December 31, 2021.

•Commenced Operating Portfolio leases of 3.6 million square feet for the fourth quarter of 2021, resulting in a Cash Rent Change and Straight-Line Rent Change of 16.0% and 22.6%, respectively.

•Experienced 77.6% Retention for 3.4 million square feet of leases expiring in the quarter.

•Raised net proceeds of $386.3 million of equity through a follow-on offering during the fourth quarter of 2021, inclusive of a forward component.

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•On December 13, 2021, the Company published its inaugural Sustainability Report for 2020 and 2021.

•On January 10, 2022, it was announced that William R. Crooker, the Company's current President, is expected to be appointed Chief Executive Officer and join the Board of Directors. Matts S. Pinard has been promoted to Executive Vice President, Chief Financial Officer and Treasurer.

Please refer to the Non-GAAP Financial Measures and Other Definitions section at the end of this release for definitions of capitalized terms used in this release.

The Company will host a conference call tomorrow, Thursday, February 17, 2022 at 10:00 a.m. (Eastern Time), to discuss the quarter's results and provide information about acquisitions, operations, capital markets and corporate activities. Details of the call can be found at the end of this release.

Key Financial Measures

FOURTH QUARTER 2021 KEY FINANCIAL MEASURES

	Three months ended December 31,	Twelve Months Ended December 31,
Metrics	2021	2020	% Change	2021	2020	% Change
(in $000s, except per share data)
Net income attributable to common stockholders	$86,198	$94,649	(8.9)	%	$188,175	$196,720	(4.3)	%
Net income per common share - basic	$0.50	$0.63	(20.6)	%	$1.15	$1.32	(12.9)	%
Net income per common share - diluted	$0.50	$0.63	(20.6)	%	$1.15	$1.32	(12.9)	%
Cash NOI	$114,456	$100,442	14.0	%	$438,036	$385,962	13.5	%
Same Store Cash NOI (1)	$89,890	$86,965	3.4	%	$358,102	$344,928	3.8	%
Adjusted EBITDAre	$105,457	$89,721	17.5	%	$399,404	$348,260	14.7	%
Core FFO	$89,995	$75,509	19.2	%	$344,257	$288,715	19.2	%
Core FFO per share / unit - basic	$0.51	$0.49	4.1	%	$2.07	$1.90	8.9	%
Core FFO per share / unit - diluted	$0.51	$0.49	4.1	%	$2.06	$1.89	9.0	%
Cash Available for Distribution	$74,132	$64,002	15.8	%	$293,769	$243,845	20.5	%

(1) The Same Store pool accounted for 77.3% of the total portfolio square footage as of December 31, 2021.

Definitions of the above-mentioned non-GAAP financial measures, together with reconciliations to net income (loss) in accordance with GAAP, appear at the end of this release. Please also see the Company's supplemental information package for additional disclosure.

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Acquisition and Disposition Activity

For the three months ended December 31, 2021, the Company acquired 35 buildings for $689.5 million with an Occupancy Rate of 94.3% upon acquisition. The chart below details the acquisition activity for the quarter:

FOURTH QUARTER 2021 ACQUISITION ACTIVITY

Market	Date Acquired	Square Feet	Buildings	Purchase Price ($000s)	W.A. Lease Term (Years)	Cash Capitalization Rate	Straight-Line Capitalization Rate
Omaha/Council Bluffs, NE-IA	10/6/2021	99,616	2	$8,669	2.4
El Paso, TX	10/8/2021	276,360	1	27,844	6.1
St. Louis, MO	10/12/2021	121,223	1	12,991	2.8
South Bay/San Jose, CA	10/12/2021	31,172	1	11,691	11.5
Chicago, IL	10/13/2021	56,676	1	5,735	6.1
Dallas/Ft Worth, TX	10/13/2021	202,140	2	25,913	6.3
Sacramento, CA	10/25/2021	82,174	1	10,275	5.4
Detroit, MI	11/1/2021	126,720	1	18,291	9.9
Philadelphia, PA	11/3/2021	385,399	1	25,909	5.4
West Michigan, MI	11/9/2021	159,900	1	19,649	10.1
Philadelphia, PA	11/9/2021	109,504	1	8,071	1.1
Minneapolis/St Paul, MN	11/10/2021	316,636	1	30,583	5.1
Chicago, IL	11/12/2021	579,338	4	62,948	3.5
Philadelphia, PA	11/12/2021	128,959	1	26,446	10.1
Sacramento, CA	12/1/2021	67,200	1	7,721	1.1
Des Moines, IA	12/9/2021	200,957	1	22,866	5.4
Greenville/Spartanburg, SC	12/17/2021	231,626	1	31,169	15.1
Milwaukee/Madison, WI	12/17/2021	192,800	1	23,327	7.0
Sacramento, CA	12/21/2021	188,830	2	27,616	5.8
Des Moines, IA	12/23/2021	179,459	1	13,556	7.6
Philadelphia, PA	12/23/2021	589,580	1	53,790	2.8
Nashville, TN	12/23/2021	58,672	1	7,271	4.9
Westchester/S. Connecticut, CT/NY	12/23/2021	167,700	1	16,700	4.6
Washington, DC	12/28/2021	1,231,200	2	140,668	9.2
Minneapolis/St Paul, MN	12/28/2021	83,000	1	11,058	5.3
Chicago, IL	12/29/2021	102,000	1	9,742	10.2
Omaha/Council Bluffs, NE-IA	12/30/2021	178,368	1	17,888	5.8
Atlanta, GA	12/31/2021	103,720	1	11,083	-
Total / weighted average	6,250,929	35	$689,470	6.4	5.0%	5.2%

The chart below details the 2021 acquisition activity and Pipeline through February 16, 2022:

2021 ACQUISITION ACTIVITY AND PIPELINE DETAIL

Square Feet	Buildings	Purchase Price ($000s)	W.A. Lease Term (Years)	Cash Capitalization Rate	Straight-Line Capitalization Rate
Q1	1,252,323	6	$100,228	7.9	6.0%	6.4%
Q2	1,349,267	9	126,721	7.9	5.7%	6.2%
Q3	4,044,255	24	427,219	6.3	5.3%	5.7%
Q4	6,250,929	35	689,470	6.4	5.0%	5.2%
Total / weighted average	12,896,774	74	$1,343,638	6.7	5.2%	5.6%
As of February 16, 2022
Subsequent to quarter-end acquisitions	1.0 million	4	$93.1 million
Pipeline	37.7 million	188	$4.1 billion

Additionally, in the fourth quarter, the Company acquired one asset under development for $28.9 million. This asset is excluded from the acquisition activity statistics above.

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The chart below details the disposition activity for the year ended December 31, 2021:

2021 DISPOSITION ACTIVITY

Square Feet	Buildings	Sale Price ($000s)
Q1	483,586	4	$25,208
Q2	444,663	2	16,400
Q3	711,050	8	39,364
Q4	1,105,551	8	112,450
Total	2,744,850	22	$193,422

Leasing Activity

The chart below details the leasing activity for leases commenced during the three months ended December 31, 2021:

FOURTH QUARTER 2021 OPERATING PORTFOLIO LEASING ACTIVITY

Lease Type	Square Feet	Lease Count	W.A. Lease Term (Years)	Cash Base Rent $/SF	SL Base Rent $/SF	Lease Commissions $/SF	Tenant Improvements $/SF	Cash Rent Change	SL Rent Change	Retention
New Leases	930,605	9	3.9	$4.18	$4.22	$1.14	$0.10	17.0%	19.5%
Renewal Leases	2,644,740	21	4.2	$5.00	$5.17	$0.53	$0.16	15.8%	23.4%	77.6%
Total / weighted average	3,575,345	30	4.1	$4.79	$4.92	$0.69	$0.14	16.0%	22.6%

The chart below details the leasing activity for leases commenced during the year ended December 31, 2021:

2021 YEAR TO DATE OPERATING PORTFOLIO LEASING ACTIVITY

Lease Type	Square Feet	Lease Count	W.A. Lease Term (Years)	Cash Base Rent $/SF	SL Base Rent $/SF	Lease Commissions $/SF	Tenant Improvements $/SF	Cash Rent Change	SL Rent Change	Retention
New Leases	4,257,914	29	5.3	$4.19	$4.33	$1.30	$0.77	9.6%	14.9%
Renewal Leases	9,448,145	66	5.2	$4.64	$4.83	$0.64	$0.47	10.7%	18.6%	76.6%
Total / weighted average	13,706,059	95	5.2	$4.50	$4.67	$0.84	$0.56	10.4%	17.6%

Additionally, for the three months and year ended December 31, 2021, leases commenced totaling 246,086 and 385,150 square feet, respectively, related to Value Add assets and first generation leasing. These are excluded from the Operating Portfolio statistics above.

Capital Markets Activity

The chart below details the ATM program activity for the year ended December 31, 2021:

2021 ATM ACTIVITY

Equity (1)	Shares Issued	Price per Share (Weighted Avg)	Gross Proceeds ($000s)	Net Proceeds ($000s)
Q1	680,276	$32.35	$22,005	$21,785
Q2	1,208,014	$34.95	$42,221	$41,799
Q3	3,221,712	$39.59	$127,541	$126,390
Q4	-	NA	$0	$0
Total / weighted average	5,110,002	$37.53	$191,766	$189,974

(1) Excludes ATM issuances on a forward basis that were settled during the year ended December 31, 2021, which are discussed below.

Subsequent to December 31, 2021, the Company sold 128,335 shares under the ATM common stock offering program at a price of $45.03 per share, or $5.8 million, and $44.58 per share net of sales agent fees.

In the fourth quarter, the Company completed a public offering of 9,200,000 shares, inclusive of 5,250,000 shares

sold upon completion of the offering and 3,950,000 shares sold on a forward basis with net proceeds of $386.3 million. On November 8, 2021, the Company settled $220.4 million in net proceeds and on December 27, 2021, partially settled the forward for net proceeds of $115.0 million. As of December 31, 2021, the Company has until November 3, 2022 to settle the remaining net proceeds of $50.1 million.

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As of December 31, 2021, net debt to annualized Run Rate Adjusted EBITDAre was 5.0x and Liquidity was $469.4 million.

On October 26, 2021, the Company refinanced its Unsecured Credit Facility. The transaction included extending the maturity date and reducing the borrowing costs. The refinanced facility matures on October 24, 2025, with two six-month extension options, subject to certain conditions. The refinanced facility bears a current interest rate of LIBOR plus a spread of 0.775% based on the Company's current leverage level and debt rating. This is a reduction in pricing of 12.5 basis points compared to the Company's previous Unsecured Credit Facility.

On October 26, 2021, the Company refinanced a $150 million unsecured term loan that was set to mature in March 2022. The refinanced term loan bears a current interest rate of LIBOR plus a spread of 0.85%, a reduction in pricing of 15 basis points compared to the previous term loan, and now matures on March 15, 2027. The Company entered into interest rate swaps to fix the interest rate of the new term loan at 2.15% as of April 1, 2022 through March 15, 2027.

On October 26, 2021, the Company improved pricing on its $175 million unsecured term loan E, $200 million unsecured term loan F, and $300 million unsecured term loan G. The term loans now bear a current interest rate of LIBOR plus a spread of 0.85%, a reduction in pricing of 15 basis points compared to the previous pricing, with no change to maturities.

Conference Call

The Company will host a conference call tomorrow, Thursday, February 17, 2022, at 10:00 a.m. (Eastern Time) to discuss the quarter's results. The call can be accessed live over the phone toll-free by dialing [phone], or for international callers, [phone]. A replay will be available shortly after the call and can be accessed by dialing [phone], or for international callers, [phone]. The passcode for the replay is 13725773.

Interested parties may also listen to a simultaneous webcast of the conference call by visiting the Investor Relations section of the Company's website at www.stagindustrial.com, or by clicking on the following link:

http://ir.stagindustrial.com/QuarterlyResults

Supplemental Schedule

The Company has provided a supplemental information package with additional disclosure and financial information on its website (www.stagindustrial.com) under the "Quarterly Results" tab in the Investor Relations section.

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CONSOLIDATED BALANCE SHEETS

STAG Industrial, Inc.

(unaudited, in thousands, except share data)

	December 31, 2021	December 31, 2020
Assets
Rental Property:
Land	$	617,297	$	492,783
Buildings and improvements, net of accumulated depreciation of $611,867 and $495,348, respectively	4,435,743	3,532,608
Deferred leasing intangibles, net of accumulated amortization of $282,038 and $258,005, respectively	567,658	499,802
Total rental property, net	5,620,698	4,525,193
Cash and cash equivalents	18,981	15,666
Restricted cash	4,215	4,673
Tenant accounts receivable	93,600	77,796
Prepaid expenses and other assets	60,953	43,471
Interest rate swaps	5,220	-
Operating lease right-of-use assets	29,582	25,403
Assets held for sale, net	-	444
Total assets	$	5,833,249	$	4,692,646
Liabilities and Equity
Liabilities:
Unsecured credit facility	$	296,000	$	107,000
Unsecured term loans, net	970,577	971,111
Unsecured notes, net	896,941	573,281
Mortgage notes, net	54,744	51,898
Accounts payable, accrued expenses and other liabilities	76,475	69,765
Interest rate swaps	17,052	40,656
Tenant prepaid rent and security deposits	37,138	27,844
Dividends and distributions payable	21,906	19,379
Deferred leasing intangibles, net of accumulated amortization of $21,136 and $15,759, respectively	35,721	32,762
Operating lease liabilities	33,108	27,898
Total liabilities	2,439,662	1,921,594
Equity:
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized at December 31, 2021 and December 31, 2020,
Series C, -0- and 3,000,000 shares (liquidation preference of $25.00 per share) issued and outstanding at December 31, 2021 and December 31, 2020, respectively	-	75,000
Common stock, par value $0.01 per share, 300,000,000 shares authorized at December 31, 2021 and December 31, 2020, 177,769,342 and 158,209,823 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively	1,777	1,582
Additional paid-in capital	4,130,038	3,421,721
Cumulative dividends in excess of earnings	(792,332)	(742,071)
Accumulated other comprehensive loss	(11,783)	(40,025)
Total stockholders' equity	3,327,700	2,716,207
Noncontrolling interest	65,887	54,845
Total equity	3,393,587	2,771,052
Total liabilities and equity	$	5,833,249	$	4,692,646

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CONSOLIDATED STATEMENTS OF OPERATIONS

STAG Industrial, Inc.

(unaudited, in thousands, except per share data)

Three months ended December 31,	Year ended December 31,
	2021	2020	2021	2020
Revenue
Rental income	$	147,525	$	129,768	$	559,432	$	482,825
Other income	98	183	2,727	586
Total revenue	147,623	129,951	562,159	483,411
Expenses
Property	28,886	26,203	107,986	89,359
General and administrative	10,593	10,756	48,629	40,072
Depreciation and amortization	63,714	54,523	238,699	214,738
Loss on impairments	-	2,405	-	5,577
Other expenses	694	529	2,878	2,029
Total expenses	103,887	94,416	398,192	351,775
Other income (expense)
Interest and other income	29	46	121	446
Interest expense	(17,107)	(16,218)	(63,484)	(62,343)
Debt extinguishment and modification expenses	(1,473)	-	(2,152)	(834)
Gain on involuntary conversion	-	-	-	2,157
Gain on the sales of rental property, net	62,933	78,869	97,980	135,733
Total other income (expense)	44,382	62,697	32,465	75,159
Net income	$	88,118	$	98,232	$	196,432	$	206,795
Less: income attributable to noncontrolling interest after preferred stock dividends	1,825	2,177	4,098	4,648
Net income attributable to STAG Industrial, Inc.	$	86,293	$	96,055	$	192,334	$	202,147
Less: preferred stock dividends	-	1,289	1,289	5,156
Less: redemption of preferred stock	-	-	2,582	-
Less: amount allocated to participating securities	95	117	288	271
Net income attributable to common stockholders	$	86,198	$	94,649	$	188,175	$	196,720
Weighted average common shares outstanding - basic	172,801	149,920	163,442	148,791
Weighted average common shares outstanding - diluted	173,650	150,493	164,090	149,215
Net income per share - basic and diluted
Net income per share attributable to common stockholders - basic	$	0.50	$	0.63	$	1.15	$	1.32
Net income per share attributable to common stockholders - diluted	$	0.50	$	0.63	$	1.15	$	1.32

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RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

STAG Industrial, Inc.

(unaudited, in thousands)

Three months ended December 31,	Year ended December 31,
2021	2020	2021	2020
NET OPERATING INCOME RECONCILIATION
Net income	$	88,118	$	98,232	$	196,432	$	206,795
General and administrative	10,593	10,756	48,629	40,072
Transaction costs	158	77	347	159
Depreciation and amortization	63,714	54,523	238,699	214,738
Interest and other income	(29)	(46)	(121)	(446)
Interest expense	17,107	16,218	63,484	62,343
Loss on impairments	-	2,405	-	5,577
Gain on involuntary conversion	-	-	-	(2,157)
Debt extinguishment and modification expenses	1,473	-	2,152	834
Other expenses	536	452	2,531	1,870
Gain on the sales of rental property, net	(62,933)	(78,869)	(97,980)	(135,733)
Net operating income	$	118,737	$	103,748	$	454,173	$	394,052
Net operating income	$	118,737	$	103,748	$	454,173	$	394,052
Straight-line rent adjustments, net	(4,257)	(6,012)	(19,619)	(18,174)
Straight-line termination, solar and other income adjustments, net	(53)	1,994	1,431	5,743
Amortization of above and below market leases, net	29	712	2,051	4,341
Cash net operating income	$	114,456	$	100,442	$	438,036	$	385,962
Cash net operating income	$	114,456
Cash NOI from acquisitions' and dispositions' timing	5,209
Cash termination, solar and other income	(402)
Run Rate Cash NOI	$	119,263
Same Store Portfolio NOI
Total NOI	$	118,737	$	103,748	$	454,173	$	394,052
Less: NOI non-same-store properties	(26,495)	(12,168)	(83,839)	(34,928)
Termination, solar and other adjustments, net	(405)	(576)	(3,437)	(1,018)
Same Store NOI	$	91,837	$	91,004	$	366,897	$	358,106
Less: straight-line rent adjustments, net	(2,466)	(4,715)	(11,339)	(16,509)
Amortization of above and below market leases, net	519	676	2,544	3,331
Same Store Cash NOI	$	89,890	$	86,965	$	358,102	$	344,928
EBITDA FOR REAL ESTATE (EBITDAre) RECONCILIATION
Net income	$	88,118	$	98,232	$	196,432	$	206,795
Depreciation and amortization	63,714	54,523	238,699	214,738
Interest and other income	(29)	(46)	(121)	(446)
Interest expense	17,107	16,218	63,484	62,343
Loss on impairments	-	2,405	-	5,577
Gain on the sales of rental property, net	(62,933)	(78,869)	(97,980)	(135,733)
EBITDAre	$	105,977	$	92,463	$	400,514	$	353,274
ADJUSTED EBITDAre RECONCILIATION
EBITDAre	$	105,977	$	92,463	$	400,514	$	353,274
Straight-line rent adjustments, net	(4,304)	(5,898)	(18,947)	(17,817)
Amortization of above and below market leases, net	29	712	2,051	4,341
Non-cash compensation expense	2,579		2,945	14,414	11,681
Termination, solar and other income, net	(455)	(578)	(3,675)	(2,055)
Transaction costs	158	77	347	159
Severance costs	-	-	2,148	-
Non-recurring other expenses	-	-	400	-
Gain on involuntary conversion	-	-	-	(2,157)
Debt extinguishment and modification expenses	1,473	-	2,152	834
Adjusted EBITDAre	$	105,457	$	89,721	$	399,404	$	348,260
Adjusted EBITDAre	$	105,457
Adjusted EBITDAre from acquisitions' and dispositions' timing	5,209
Run Rate Adjusted EBITDAre	$	110,666

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RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

STAG Industrial, Inc.

(unaudited, in thousands, except per share data)

Three months ended December 31,	Year ended December 31,
2021	2020	2021	2020
CORE FUNDS FROM OPERATIONS RECONCILIATION
Net income	$	88,118	$	98,232	$	196,432	$	206,795
Rental property depreciation and amortization	63,662	54,457	238,487	214,464
Loss on impairments	-	2,405	-	5,577
Gain on the sales of rental property, net	(62,933)	(78,869)	(97,980)	(135,733)
Funds from operations	$	88,847	$	76,225	$	336,939	$	291,103
Preferred stock dividends	-	(1,289)	(1,289)	(5,156)
Redemption of preferred stock	-	-	(2,582)	-
Amount allocated to restricted shares of common stock and unvested units	(197)	(216)	(838)	(756)
Funds from operations attributable to common stockholders and unit holders	$	88,650	$	74,720	$	332,230	$	285,191
Funds from operations attributable to common stockholders and unit holders	$	88,650	$	74,720	$	332,230	$	285,191
Amortization of above and below market leases, net	29	712	2,051	4,341
Transaction costs	158	77	347	159
Non-recurring dead deal costs	-	-	412	347
Debt extinguishment and modification expenses	1,473	-	2,152	834
Gain on involuntary conversion	-	-	-	(2,157)
Redemption of preferred stock	-	-	2,582	-
Retirement plan adoption	(315)	-	2,335	-
Severance costs	-	-	2,148	-
Core funds from operations	$	89,995	$	75,509	$	344,257	$	288,715
Weighted average common shares and units
Weighted average common shares outstanding	172,801	149,920	163,442	148,791
Weighted average units outstanding	3,192	2,982	3,164	3,168
Weighted average common shares and units - basic	175,993	152,902	166,606	151,959
Dilutive shares	849	573	648	424
Weighted average common shares, units, and other dilutive shares - diluted	176,842	153,475	167,254	152,383
Core funds from operations per share / unit - basic	$	0.51	$	0.49	$	2.07	$	1.90
Core funds from operations per share / unit - diluted	$	0.51	$	0.49	$	2.06	$	1.89
CASH AVAILABLE FOR DISTRIBUTION RECONCILIATION
Core funds from operations	$	89,995	$	75,509	$	344,257	$	288,715
Non-rental property depreciation and amortization	52	66	212	274
Straight-line rent adjustments, net	(4,304)	(5,898)	(18,947)	(17,817)
Straight-line termination, solar and other income adjustments, net	(53)	1,994	1,431	5,743
Recurring capital expenditures	(2,037)	(1,211)	(4,142)	(2,184)
Non-recurring capital expenditures	(6,474)	(7,077)	(20,295)	(26,125)
Capital expenditures reimbursed by tenants	(1,373)	(58)	(3,768)	(3,770)
New lease commissions and tenant improvements	(2,608)	(1,162)	(8,833)	(9,375)
Renewal lease commissions and tenant improvements	(2,812)	(1,856)	(9,537)	(6,219)
Non-cash portion of interest expense	852	750	2,931	2,922
Non-cash compensation expense	2,894	2,945	12,079	11,681
Severance costs	-	-	(1,619)	-
Cash available for distribution	$	74,132	$	64,002	$	293,769	$	243,845

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Non-GAAP Financial Measures and Other Definitions

Acquisition Capital Expenditures: We define Acquisition Capital Expenditures as Recurring and Non-Recurring Capital Expenditures identified at the time of acquisition. Acquisition Capital Expenditures also include new lease commissions and tenant improvements for space that was not occupied under the Company's ownership.

Cash Available for Distribution: Cash Available for Distribution represents Core FFO, excluding non-rental property depreciation and amortization, straight-line rent adjustments, non-cash portion of interest expense, non-cash compensation expense, and deducts capital expenditures reimbursed by tenants, recurring and non-recurring capital expenditures, leasing commissions and tenant improvements, and severance costs.

Cash Available for Distribution should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, and we believe that to understand our performance further, these measurements should be compared with our reported net income or net loss in accordance with GAAP, as presented in our consolidated financial statements.

Cash Available for Distribution excludes, among other items, depreciation and amortization and capture neither the changes in the value of our buildings that result from use or market conditions of our buildings, all of which have real economic effects and could materially impact our results from operations, the utility of these measures as measures of our performance is limited. In addition, our calculation of Cash Available for Distribution may not be comparable to similarly titled measures disclosed by other REITs.

Cash Capitalization Rate: We define Cash Capitalization Rate as calculated by dividing (i) the Company's estimate of year one cash net operating income from the applicable property's operations stabilized for occupancy (post-lease-up for vacant properties), which does not include termination income, solar income, miscellaneous other income, capital expenditures, general and administrative costs, reserves, tenant improvements and leasing commissions, credit loss, or vacancy loss, by (ii) the GAAP purchase price plus estimated Acquisition Capital Expenditures. These Capitalization Rate estimates are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control, including those risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2021.

Cash Rent Change: We define Cash Rent Change as the percentage change in the base rent of the lease commenced during the period compared to the base rent of the Comparable Lease for assets included in the Operating Portfolio. The calculation compares the first base rent payment due after the lease commencement date compared to the base rent of the last monthly payment due prior to the termination of the lease, excluding holdover rent. Rent under gross or similar type leases are converted to a net rent based on an estimate of the applicable recoverable expenses.

Comparable Lease: We define a Comparable Lease as a lease in the same space with a similar lease structure as compared to the previous in-place lease, excluding new leases for space that was not occupied under our ownership.

Earnings before Interest, Taxes, Depreciation, and Amortization for Real Estate (EBITDAre), Adjusted EBITDAre, Annualized Adjusted EBITDAre, and Run Rate Adjusted EBITDAre: We define EBITDAre in accordance with the standards established by the National Association of Real Estate Investment Trusts ("NAREIT"). EBITDAre represents net income (loss) (computed in accordance with GAAP) before interest expense, interest and other income, tax, depreciation and amortization, gains or losses on the sale of rental property, and loss on impairments. Adjusted EBITDAre further excludes transaction costs, termination income, solar income, revenue associated with one-time tenant reimbursements of capital expenditures, straight-line rent adjustments, non-cash compensation expense, amortization of above and below market leases, net, gain (loss) on involuntary conversion, debt extinguishment and modification expenses, and other non-recurring items.

We define Annualized Adjusted EBITDAre as Adjusted EBITDAre multiplied by four.

We define Run Rate Adjusted EBITDAre as Adjusted EBITDAre plus incremental Adjusted EBITDAre adjusted for a full period of acquisitions and dispositions. Run Rate Adjusted EBITDAre does not reflect the Company's historical results and does not predict future results, which may be substantially different.

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EBITDAre, Adjusted EBITDAre, and Run Rate Adjusted EBITDAre should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, and we believe that to understand our performance further, EBITDAre, Adjusted EBITDAre, and Run Rate Adjusted EBITDAre should be compared with our reported net income or net loss in accordance with GAAP, as presented in our consolidated financial statements. We believe that EBITDAre, Adjusted EBITDAre, and Run Rate Adjusted EBITDAre are helpful to investors as supplemental measures of the operating performance of a real estate company because they are direct measures of the actual operating results of our properties. We also use these measures in ratios to compare our performance to that of our industry peers.

Funds from Operations (FFO) and Core FFO: We define FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts ("NAREIT"). FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, gains (losses) from sales of land, impairment write-downs of depreciable real estate, real estate related depreciation and amortization (excluding amortization of deferred financing costs and fair market value of debt adjustment) and after adjustments for unconsolidated partnerships and joint ventures. Core FFO excludes transaction costs, amortization of above and below market leases, net, debt extinguishment and modification expenses, gain (loss) on involuntary conversion, gain (loss) on swap ineffectiveness, and non-recurring other expenses.

None of FFO or Core FFO should be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, and we believe that to understand our performance further, these measurements should be compared with our reported net income or net loss in accordance with GAAP, as presented in our consolidated financial statements. We use FFO as a supplemental performance measure because it is a widely recognized measure of the performance of REITs. FFO may be used by investors as a basis to compare our operating performance with that of other REITs. We and investors may use Core FFO similarly as FFO.

However, because FFO and Core FFO exclude, among other items, depreciation and amortization and capture neither the changes in the value of our buildings that result from use or market conditions of our buildings, all of which have real economic effects and could materially impact our results from operations, the utility of these measures as measures of our performance is limited. In addition, other REITs may not calculate FFO in accordance with the NAREIT definition as we do, and, accordingly, our FFO may not be comparable to such other REITs' FFO. Similarly, our calculation of Core FFO may not be comparable to similarly titled measures disclosed by other REITs.

GAAP: We define GAAP as generally accepted accounting principles in the United States.

Liquidity: We define Liquidity as the amount of aggregate undrawn nominal commitments the Company could immediately borrow under the Company's unsecured debt instruments, consistent with the financial covenants, plus unrestricted cash balances.

Market: We define Market as the market defined by CoStar based on the building address. If the building is located outside of a CoStar defined market, the city and state is reflected.

Net operating income (NOI), Cash NOI, and Run Rate Cash NOI: We define NOI as rental income, including reimbursements, less property expenses, which excludes depreciation, amortization, loss on impairments, general and administrative expenses, interest expense, interest income, transaction costs, gain (loss) on involuntary conversion, debt extinguishment and modification expenses, gain on sales of rental property, and other expenses.

We define Cash NOI as NOI less straight-line rent adjustments and less amortization of above and below market leases, net.

We define Run Rate Cash NOI as Cash NOI plus Cash NOI adjusted for a full period of acquisitions and dispositions, less cash termination income, solar income and revenue associated with one-time tenant reimbursements of capital expenditures. Run Rate Cash NOI does not reflect the Company's historical results and does not predict future results, which may be substantially different.

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We consider NOI, Cash NOI and Run Rate Cash NOI to be appropriate supplemental performance measures to net income because we believe they help us, and investors understand the core operations of our buildings. None of these measures should be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, and we believe that to understand our performance further, these measurements should be compared with our reported net income or net loss in accordance with GAAP, as presented in our consolidated financial statements. Further, our calculations of NOI, Cash NOI and Run Rate NOI may not be comparable to similarly titled measures disclosed by other REITs.

Non-Recurring Capital Expenditures: We define Non-Recurring Capital Expenditures as capital items for upgrades or items that previously did not exist at a building or capital items which have a longer useful life, such as roof replacements. Non-Recurring Capital Expenditures funded by parties other than the Company or capital expenditures reimbursed by tenants in lump sum and Acquisition Capital Expenditures are excluded.

Occupancy Rate: We define Occupancy Rate as the percentage of total leasable square footage for which either revenue recognition has commenced in accordance with GAAP or the lease term has commenced as of the close of the reporting period, whichever occurs earlier.

Operating Portfolio: We define the Operating Portfolio as all warehouse and light manufacturing assets that were acquired stabilized or have achieved Stabilization. The Operating Portfolio excludes non-core flex/office assets, assets contained in the Value Add Portfolio, and assets classified as held for sale.

Pipeline: We define Pipeline as a point in time measure that includes all of the transactions under consideration by the Company's acquisitions group that have passed the initial screening process. The pipeline also includes transactions under contract and transactions with non-binding LOIs.

Recurring Capital Expenditures: We define Recurring Capital Expenditures as capital items required to sustain existing systems and capital items which generally have a shorter useful life. Recurring Capital Expenditures funded by parties other than the Company are excluded.

Renewal Lease: We define a Renewal Lease as a lease signed by an existing tenant to extend the term for 12 months or more, including (i) a renewal of the same space as the current lease at lease expiration, (ii) a renewal of only a portion of the current space at lease expiration, or (iii) an early renewal or workout, which ultimately does extend the original term for 12 months or more.

Retention: We define Retention as the percentage determined by taking Renewal Lease square footage commencing in the period divided by square footage of leases expiring in the period for assets included in the Operating Portfolio.

Same Store: We define Same Store properties as properties that were in the Operating Portfolio for the entirety of the comparative periods presented. Same Store GAAP NOI and Same Store Cash NOI exclude termination fees, solar income, and revenue associated with one-time tenant reimbursements of capital expenditures.

Stabilization: We define Stabilization for assets under development or redevelopment to occur as the earlier of achieving 90% occupancy or 12 months after completion. Stabilization for assets that were acquired and immediately added to the Value Add Portfolio occurs under the following:

•if acquired with less than 75% occupancy as of the acquisition date, Stabilization will occur upon the earlier of achieving 90% occupancy or 12 months from the acquisition date;

•if acquired and will be less than 75% occupied due to known move-outs within two years of the acquisition date, Stabilization will occur upon the earlier of achieving 90% occupancy after the known move-outs have occurred or 12 months after the known move-outs have occurred.

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Straight-Line Capitalization Rate: We define Straight-Line Capitalization Rate as calculated by dividing (i) the Company's estimate of average annual net operating income from the applicable property's operations stabilized for occupancy (post-lease-up for vacant properties), which does not include termination income, solar income, miscellaneous other income, capital expenditures, general and administrative costs, reserves, tenant improvements and leasing commissions, credit loss, or vacancy loss, by (ii) the GAAP purchase price plus estimated Acquisition Capital Expenditures. These Capitalization Rate estimates are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control, including those risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2021.

Straight-Line Rent Change (SL Rent Change): We define SL Rent Change as the percentage change in the average monthly base rent over the term of the lease that commenced during the period compared to the Comparable Lease for assets included in the Operating Portfolio. Rent under gross or similar type leases are converted to a net rent based on an estimate of the applicable recoverable expenses, and this calculation excludes the impact of any holdover rent.

Value Add Portfolio: We define the Value Add Portfolio as properties that meet any of the following criteria:

•less than 75% occupied as of the acquisition date;

•will be less than 75% occupied due to known move-outs within two years of the acquisition date;

•out of service with significant physical renovation of the asset;

•development.

Weighted Average Lease Term: We define Weighted Average Lease Term as the contractual lease term in years as of the lease start date weighted by square footage. Weighted Average Lease Term related to acquired assets reflects the remaining lease term in years as of the acquisition date weighted by square footage.

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Forward-Looking Statements

This earnings release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. STAG Industrial, Inc. (STAG) intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe STAG's future plans, strategies and expectations, are generally identifiable by use of the words "believe," "will," "expect," "intend," "anticipate," "estimate," "should", "project" or similar expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond STAG's control and which could materially affect actual results, performances or achievements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, the risk factors discussed in STAG's most recent Annual Report on Form 10-K for the year ended December 31, 2021, as updated by the Company's subsequent reports filed with the Securities and Exchange Commission. Accordingly, there is no assurance that STAG's expectations will be realized. Except as otherwise required by the federal securities laws, STAG disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in STAG's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

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