Same-Store NOI Growth of 5.9 Percent on a
Cash Basis and 2.7 Percent on a GAAP Basis in Q3Signed
Leases Totaling 4.4 Million Square Feet in Q3Occupancy
Increased to 92.8 Percent in Q3; Up from 91.9 Percent in
Q2FFO of $0.12 per Share in Q3Stabilized Three
Development Buildings Totaling 559,000 Square Feet,Executed
502,000 Square Feet of Development and Redevelopment
Leases,Commenced Construction on Four Buildings Totaling 1.5
Million Square FeetAcquired 15 Buildings for $123.3 Million
and Sold 32 Buildings for $112.7 Million;Company Exited
MexicoExecuted $275 Million Debut Bond
OfferingCompany Raises FFO Guidance
DCT Industrial Trust Inc.® (NYSE: DCT), a leading
industrial real estate company, today announced financial results
for the quarter ending September 30, 2013.
“We had a strong quarter across all aspects of our business.
Operating performance is ahead of plan with nearly 93 percent
occupancy and our market teams continue to source very attractive
acquisition and development opportunities,” said Phil Hawkins,
Chief Executive Officer of DCT Industrial. “We also successfully
closed on the sale of our Mexico assets, allowing us to complete
our exit from those markets and focus all our resources in the
United States. We also sold all of our flex/high office finish
assets in Dallas to continue upgrading the quality and consistency
of our portfolio. In addition, we successfully executed our debut
bond offering, further broadening our sources of capital and
reinforcing the quality of our operating platform, property
portfolio and balance sheet.”
Funds from Operations, as adjusted, attributable to common
stockholders and unitholders (“FFO”) for Q3 2013 totaled $39.3
million, or $0.12 per diluted share, compared with $28.3 million,
or $0.10 per diluted share, for Q3 2012. These results exclude $0.4
million and $0.2 million of acquisition costs for the quarters
ending September 30, 2013 and 2012, respectively.
FFO, for the nine months ending September 30, 2013 totaled
$106.2 million, or $0.34 per diluted share, compared with $85.1
million, or $0.31 per diluted share, for the first nine months of
2012. These results exclude $1.6 million and $1.0 million of
acquisition costs for the nine months ending September 30, 2013 and
2012, respectively.
Net loss attributable to common stockholders for Q3 2013 was
$10.2 million, or $0.03 per diluted share, compared with net income
attributable to common stockholders of $7.5 million, or $0.03 per
diluted share, reported for Q3 2012. Net income attributable to
common stockholders for the nine months ending September 30, 2013
was $1.9 million, or $0.00 per diluted share, compared with a net
loss of $14.2 million, or $0.06 per diluted share, for the nine
months ending September 30, 2012.
Property Results and Leasing
Activity
Net operating income (“NOI”) was $53.8 million in Q3 2013,
compared with $43.1 million in Q3 2012. In Q3 2013, same-store NOI,
excluding revenue from lease terminations, increased 5.9 percent on
a cash basis and 2.7 percent on a GAAP basis, when compared to the
same period of 2012. Same-store occupancy averaged 91.9 percent in
Q3 2013, an increase of 140 basis points over Q3 2012.
In Q3 2013, the Company signed leases totaling 4.4 million
square feet. Rental rates on signed leases increased 2.9 percent on
a GAAP basis and decreased 4.4 percent on a cash basis compared to
the corresponding expiring leases. Over the previous four quarters,
rental rates on signed leases increased 6.3 percent on a GAAP basis
and decreased 2.1 percent on a cash basis. The Company’s tenant
retention rate was 81.2 percent for Q3 2013 and 68.4 percent
year-to-date.
As of September 30, 2013, DCT Industrial owned 411 consolidated
operating properties, totaling 62.2 million square feet, with
occupancy of 92.8 percent up from 91.9 percent as of June 30, 2013
and up 100 basis points from September 30, 2012. In addition,
approximately 847,000 square feet, or 1.3 percent of DCT
Industrial’s total consolidated portfolio, was leased but not yet
occupied at September 30, 2013. Additionally, the Company has
leased 1.3 million square feet of its developments under
construction.
Investment Activity
Acquisitions
Since June 30, 2013, DCT Industrial acquired fifteen buildings
for $123.3 million. These acquisitions total 2.3 million square
feet and were 81.4 percent occupied at the time of closing. The
Company expects a year-one weighted-average cash yield of 5.6
percent and a weighted-average projected stabilized cash yield of
7.1 percent on these assets.
The table below summarizes acquisitions since June 30, 2013:
Market Submarket Square Feet
Occupancy Closed Anticipated
Yield* Dallas, TX DFW Airport 42,000
100.0% Aug-13 7.6%
Phoenix, AZ (3 buildings) Tempe/Airport 308,000 100.0% Aug-13 6.6%
Seattle, WA Kent Valley 39,000 100.0% Aug-13 6.4% Atlanta, GA
Northwest 405,000 100.0% Oct-13 7.2% Chicago, IL (6 buildings)
Elgin 1,060,000 59.1% Oct-13 7.5% Southern California Inland Empire
West 153,000 100.0% Oct-13 5.2% Miami, FL North Central Dade
211,000 100.0% Oct-13 7.0% Chicago, IL O’Hare
110,000 100.0% Oct-13
11.0% Total/Weighted Average 2,328,000 81.4% 7.1%
*Anticipated yield represents year-one cash yield for stabilized
acquisitions and projected stabilized cash yield for value-add
acquisitions.
Development/ Redevelopment
DCT Industrial invested $35.9 million, including $5.9 million
previously announced, to acquire land parcels in Houston, Seattle
and Southern California for future development of approximately 1.8
million square feet.
The table below summarizes the land acquired:
Market Submarket Acres
Project Name
PlannedNumber ofBuildings
EstimatedSquare Feet
Houston, TX Northwest 38.5
DCT Northwest Crossroads Logistics Centre 2
739,000 Seattle, WA Kent Valley 2.5 DCT Auburn 44 1
49,000 Southern California Inland Empire West
45.4 DCT Jurupa Ranch 1
970,000 Total
86.4 4 1,758,000
In addition, DCT Industrial:
- Stabilized DCT Commerce Center at Pan
American West, a 334,000 square foot, two-building project in the
Airport West submarket of Miami.
- Stabilized Rockdale Distribution
Center, a 225,000 square foot facility in the Wilson County
submarket of Nashville.
- Executed a 401,000 square foot
long-term lease at DCT 55 located in the I-55 industrial submarket
of Chicago.
- Executed a 102,000 square foot lease
for the entire redevelopment project at 2567 Greenleaf in Elk Grove
Village, IL.
- Commenced construction on DCT White
River Corporate Center, a 649,000 square foot speculative
development in the Kent Valley submarket of Seattle. Shell
construction is expected to be completed in Q2 2014.
- Commenced construction on Slover
Logistics Center II, a 610,000 square foot building located in the
Inland Empire West submarket of Southern California. This second
phase is expected to be completed in Q1 2014 and will finish the
1.3 million square foot industrial campus which is fully leased to
a single tenant.
- Commenced construction on DCT Sumner
Distribution Center, a 190,000 square foot speculative development
in the Kent Valley submarket of Seattle. Shell construction is
expected to be completed in Q1 2014.
- Commenced construction on DCT Auburn
44, a 49,000 square foot build-to-suit with a long term lease,
located in the Kent Valley submarket of Seattle. Construction is
expected to be completed in Q1 2014.
Dispositions
In October, DCT Industrial closed on the sale of all of its
Mexico assets to an investment trust of Macquarie Mexican REIT.
Additionally, since June 30, 2013, the Company completed the
disposition of 17 flex and high office finish buildings totaling
640,000 square feet in Dallas. These transactions generated total
gross proceeds of $112.7 million and have an expected year-one
weighted average cash yield of 7.4 percent.
The table below summarizes the dispositions since June 30,
2013:
Market Submarket Square Feet
Occupancy Closed Dallas, TX (2 buildings)
Northeast 81,000 62.2%
July-13 Dallas, TX (15 buildings) DFW Airport &
Northwest 559,000 72.2% Oct-13 Mexico (15 buildings)
1,653,000 100.0%
Oct-13 Total/Weighted Average 2,293,000 91.9%
Capital Markets
In October, in its debut bond offering, DCT Industrial issued
$275 million (aggregate principal amount) of 10-year senior
unsecured notes at 99.038 percent of face value for net proceeds of
approximately $269.6 million after expenses. The notes have a fixed
interest rate of 4.5 percent. The Company used the net proceeds
from these notes to repay its $175 million senior unsecured term
loan, as well as other debt maturities and for general corporate
purposes. Prior to issuing these notes, DCT Industrial announced it
received investment-grade corporate ratings from two major U.S.
ratings agencies. DCT Industrial received a Baa2 rating from
Moody’s Investors Service and a BBB- from Standard & Poor’s
Rating Services.
In August, DCT Industrial issued 23.0 million shares in a public
offering of common stock raising net proceeds of approximately
$158.2 million after expenses. The Company used the net proceeds
received from this offering for acquisitions, development
activities, repayment of amounts outstanding under its senior
unsecured revolving credit facility, and for general corporate
purposes.
Dividend
DCT Industrial’s Board of Directors has declared a $0.07 per
share quarterly cash dividend, payable on January 9, 2014 to
stockholders of record as of December 27, 2013.
Guidance
The Company has increased 2013 FFO guidance, as adjusted, to
$0.44 to $0.45 per diluted share, up from $0.42 to $0.45.
Additionally, net income attributable to common stockholders is
expected to be between $0.05 and $0.06 earnings per diluted
share.
The Company’s FFO guidance excludes acquisition costs.
Conference Call
Information
DCT Industrial will host a conference call to discuss Q3 2013
results on Friday, November 1, 2013 at 11:00 a.m. Eastern Time.
Stockholders and interested parties may listen to a live broadcast
of the conference call by dialing (888) 317-6016 or (412) 317-6016.
A telephone replay will be available through Friday, November 15,
2013 and can be accessed by dialing (877) 344-7529 or (412)
317-0088 and entering the passcode 10034396. A live webcast of the
conference call will be available in the Investors section of the
DCT Industrial website at www.dctindustrial.com. A webcast replay
will also be available shortly following the call until November 1,
2014.
Supplemental information is available in the Investors section
of the Company’s website at www.dctindustrial.com or by e-mail
request at investorrelations@dctindustrial.com. Interested parties
may also obtain supplemental information from the SEC’s website at
www.sec.gov.
About DCT Industrial Trust
Inc.®
DCT Industrial Trust Inc. is a leading industrial real estate
company specializing in the acquisition, development, leasing and
management of bulk distribution and light industrial properties in
high-volume distribution markets in the U.S. and Mexico. As of
September 30, 2013, the Company owned interests in approximately
75.4 million square feet of properties leased to approximately 960
customers, including 12.3 million square feet operated on behalf of
four institutional capital management partners. Additional
information is available at www.dctindustrial.com.
Click here to subscribe to Mobile Alerts for DCT Industrial.
DCT INDUSTRIAL TRUST INC. AND
SUBSIDIARIESConsolidated Balance Sheets(in thousands,
except share information)
September 30, December 31, 2013
2012 ASSETS (unaudited) Land $ 845,831 $ 780,235
Buildings and improvements 2,500,382 2,481,206 Intangible lease
assets 75,268 78,467 Construction in progress 92,848
45,619
Total investment in properties
3,514,329 3,385,527 Less accumulated depreciation and amortization
(629,557 ) (605,888 )
Net investment in
properties 2,884,772 2,779,639 Investments in and advances to
unconsolidated joint ventures 125,349 130,974
Net investment in real estate 3,010,121 2,910,613
Cash and cash equivalents 19,362 12,696 Restricted cash 4,346
10,076 Deferred loan costs, net 8,460 6,838
Straight-line rent and other receivables,
net of allowance for doubtfulaccounts of $1,957 and $1,251,
respectively
46,564 51,179 Other assets, net 22,556 12,945 Assets held for sale
122,197 52,852
Total assets $
3,233,606 $ 3,057,199
LIABILITIES AND
EQUITY Liabilities: Accounts payable and accrued expenses $
68,334 $ 57,501 Distributions payable 23,556 21,129 Tenant prepaids
and security deposits 22,803 24,395 Other liabilities 7,299 7,213
Intangible lease liability, net 19,299 20,148 Line of credit 52,000
110,000 Senior unsecured notes 1,075,000 1,025,000 Mortgage notes
314,728 317,314 Liabilities related to assets held for sale
2,219 940
Total liabilities
1,585,238 1,583,640 Equity:
Preferred stock, $0.01 par value,
50,000,000 shares authorized, noneoutstanding
- -
Shares-in-trust, $0.01 par value,
100,000,000 shares authorized, noneoutstanding
- -
Common stock, $0.01 par value, 500,000,000
shares authorized315,931,573 and 280,310,488 shares issued and
outstanding as ofSeptember 30, 2013 and December 31, 2012,
respectively
3,159 2,803 Additional paid-in capital 2,480,144 2,232,682
Distributions in excess of earnings (932,504 ) (871,655 )
Accumulated other comprehensive loss (31,537 )
(34,766 )
Total stockholders’ equity
1,519,262 1,329,064 Noncontrolling interests 129,106
144,495
Total equity 1,648,368
1,473,559
Total liabilities and equity $
3,233,606 $ 3,057,199
DCT INDUSTRIAL TRUST INC. AND
SUBSIDIARIESConsolidated Statements of
Operations(unaudited, in thousands, except per share
information)
Three Months Ended Nine Months Ended
September 30, September 30, 2013
2012 2013 2012 REVENUES: Rental
revenues $ 73,732 $ 60,719 $ 211,509 $ 175,256 Institutional
capital management and other fees 620 937
2,139 3,143
Total
revenues 74,352 61,656
213,648 178,399
OPERATING
EXPENSES: Rental expenses 8,802 8,233 26,113 22,311 Real estate
taxes 11,085 9,431 33,361 27,444 Real estate related depreciation
and amortization 32,990 27,512 95,071 81,953 General and
administrative 6,120 6,766 19,823 18,908 Casualty and involuntary
conversion gain (294 ) - (296 )
(141 )
Total operating expenses 58,703
51,942 174,072 150,475
Operating income 15,649 9,714 39,576 27,924
OTHER
INCOME (EXPENSE): Development profit - - 268 - Equity in
earnings of unconsolidated joint ventures, net 759 1,208 1,721 784
Interest expense (15,141 ) (17,299 ) (47,328 ) (51,769 ) Interest
and other income 82 70 310 229 Income tax benefit (expense) and
other taxes 60 (24 ) (373 ) (579
)
Income (loss) from continuing operations 1,409 (6,331 )
(5,826 ) (23,411 ) Income (loss) from discontinued operations
(12,192 ) 14,592 8,346
7,301
Consolidated net income (loss) of DCT
IndustrialTrust Inc.
(10,783 ) 8,261 2,520 (16,110 ) Net (income) loss attributable to
noncontrolling interests 626 (713 )
(589 ) 1,870
Net income (loss) attributable to
commonstockholders
(10,157 ) 7,548 1,931 (14,240 )
Distributed and undistributed earnings
allocated toparticipating securities
(173 ) (134 ) (519 ) (400 )
Adjusted net income (loss) attributable
tocommon stockholders
$ (10,330 ) $ 7,414 $ 1,412 $ (14,640 )
EARNINGS PER COMMON SHARE - BASIC Income (loss) from
continuing operations $ 0.00 $ (0.02 ) $ (0.02 ) $ (0.09 ) Income
(loss) from discontinued operations (0.03 ) 0.05
0.02 0.03 Net income (loss)
attributable to common stockholders $ (0.03 ) $ 0.03 $ 0.00
$ (0.06 )
EARNINGS PER COMMON SHARE - DILUTED
Income (loss) from continuing operations $ 0.00 $ (0.02 ) $ (0.02 )
$ (0.09 ) Income (loss) from discontinued operations (0.03 )
0.05 0.02 0.03 Net income
(loss) attributable to common stockholders $ (0.03 ) $ 0.03
$ 0.00 $ (0.06 )
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING: Basic 304,768 253,657 292,352 249,381 Diluted
305,673 253,657 292,352
249,381 Distributions declared per common
share $ 0.07 $ 0.07 $ 0.21 $ 0.21
Reconciliation of Net Income (Loss)
Attributable to Common Stockholders to Funds from
Operations(unaudited, in thousands, except per share and
unit data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
Reconciliation of net income (loss)
attributable to commonstockholders to FFO:
2013 2012 2013 2012
Net income (loss) attributable to common
stockholders
$ (10,157 ) $ 7,548 $ 1,931 $ (14,240 ) Adjustments: Real estate
related depreciation and amortization 34,732 30,934 101,593 94,676
Equity in earnings of unconsolidated joint ventures, net (759 )
(1,208 ) (1,721 ) (784 ) Equity in FFO of unconsolidated joint
ventures 2,735 2,590 7,530 7,883 Impairment losses on depreciable
real estate 13,279 - 13,279 11,422 Gain on dispositions of real
estate interests (75 ) (12,227 ) (17,614 ) (12,348 ) Gain on
dispositions of non-depreciable real estate - - 31 - Noncontrolling
interest in the above adjustments (3,227 ) (1,804 ) (7,066 ) (9,921
) FFO attributable to unitholders 2,320 2,276
6,602 7,377 FFO attributable to
common stockholders and unitholders(1) 38,848
28,109 104,565 84,065
Adjustments: Acquisition costs 443 192
1,648 987
FFO, as adjusted, attributable to common
stockholders andunitholders – basic and diluted
$ 39,291 $ 28,301 $ 106,213 $ 85,052
FFO per common share and unit — basic and diluted $ 0.12
$ 0.10 $ 0.33 $ 0.31
FFO, as adjusted, per common share and
unit — basic and diluted
$ 0.12 $ 0.10 $ 0.34 $ 0.31 FFO
weighted average common shares and units outstanding: Common shares
for earnings per share - basic 304,768 253,657 292,352 249,381
Participating securities 2,526 1,999 2,445 1,862 Units
18,620 22,335 19,513
24,003
FFO weighted average common shares,
participatingsecurities and units outstanding – basic
325,914 277,991 314,310 275,246 Dilutive common stock equivalents
905 663 868 618
FFO weighted average common shares,
participatingsecurities and units outstanding – diluted
326,819 278,654 315,178
275,864
(1) Funds from Operations, FFO, as defined
by the National Association of Real Estate Investment Trusts
(NAREIT).
Guidance
The Company is providing the following guidance:
Range for the
Full-Year2013
Guidance: Low High Earnings per common
share - diluted $ 0.05 $ 0.06 Gains on sale of real estate
(0.09 ) (0.09 ) Impairments and acquisition costs, net 0.05 0.05
Real estate related depreciation and amortization(1) 0.43
0.43 FFO, as adjusted, per common share
and unit-diluted(2) $ 0.44 $ 0.45 (1)
Includes pro rata share of real estate depreciation and
amortization from unconsolidated joint ventures. (2) The Company’s
FFO guidance excludes acquisition costs.
The following table shows the
calculation of our Fixed Charge Coverage for the three and nine
months endedSeptember 30, 2013 and 2012 (in
thousands):
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
2013 2012 2013 2012
Net income (loss) attributable to
commonstockholders(1)
$ (10,157 ) $ 7,548 $ 1,931 $ (14,240 ) Interest expense 15,141
17,299 47,328 51,898
Proportionate share of interest
expensefrom unconsolidated joint ventures
398 765 1,257 2,366
Real estate related depreciation
andamortization
34,732 30,934 101,593 94,676
Proportionate share of real estate
relateddepreciation and amortization fromunconsolidated joint
ventures
1,478 1,708 4,440 5,773
Income tax (benefit) expense and
othertaxes
(43 ) 68 390 623 Stock-based compensation 1,292 1,063 3,648 3,078
Noncontrolling interests (626 ) 713 589 (1,870 )
Non-FFO gains on dispositions of
realestate interests
(75 ) (12,227 ) (17,583 ) (12,348 ) Impairment losses 13,279
- 13,279 11,422
Adjusted EBITDA $ 55,419 $ 47,871 $ 156,872 $
141,378 CALCULATION OF FIXED CHARGES Interest expense
$ 15,141 $ 17,299 $ 47,328 $ 51,898 Capitalized interest 2,107
1,113 6,058 2,583
Amortization of loan costs and debt
(55 ) (317 ) (155 ) (809 ) Other noncash interest expense (1,000 )
(524 ) (3,000 ) (1,026 )
Proportionate share of interest
expensefrom unconsolidated joint ventures
398 765 1,257
2,366 Total fixed charges $ 16,591 $ 18,336 $
51,488 $ 55,012 Fixed charge coverage
3.3 2.6 3.0 2.6
(1) Includes amounts related to
discontinued operations, when applicable.
The following table is a reconciliation
of our reported income (loss) from continuing operations to our net
operating incomefor the three and nine months ended
September 30, 2013 and 2012 (in thousands):
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
Reconciliation of income (loss)
fromcontinuing operations to NOI:
2013 2012 2013 2012
Income (loss) from continuing operations $ 1,409 $ (6,331 ) $
(5,826 ) $ (23,411 ) Income tax expense (benefit) and other taxes
(60 ) 24 373 579 Interest and other income (82 ) (70 ) (310 ) (229
) Interest expense 15,141 17,299 47,328 51,769
Equity in earnings of unconsolidated
jointventures, net
(759 ) (1,208 ) (1,721 ) (784 ) Development profit - - (268 ) -
Casualty and involuntary conversion
gain
(294 ) - (296 ) (141 ) General and administrative 6,120 6,766
19,823 18,908
Real estate related depreciation
andamortization
32,990 27,512 95,071 81,983
Institutional capital management and
otherfees
(620 ) (937 ) (2,139 ) (3,143 ) Total
GAAP net operating income 53,845 43,055 152,035 125,501
Less net operating (income) loss -
non-same storeproperties
(7,492 ) 1,776 (18,038 ) 4,029
Same store GAAP net operating income 46,353 44,831 133,997
129,530
Less revenue from lease terminations
(517 ) (186 ) (828 ) (400 )
Same store GAAP net operating
income,excluding revenue from leaseterminations
45,836 44,645 133,169 129,130
Less straight-line rents, net of related
baddebt expense
116 (1,374 ) (469 ) (4,443 )
Less amortization of above/(below)
marketrents, net
(326 ) (198 ) (838 ) (449 )
Same store cash net operating
income,excluding revenue from leaseterminations
$ 45,626 $ 43,073 $ 131,862 $ 124,238
Financial Measures
Net operating income (“NOI”) is defined as rental revenues,
including expense reimbursements, less rental expenses and real
estate taxes, which excludes institutional capital management fees,
depreciation, amortization, casualty gains, impairment, general and
administrative expenses, equity in (earnings) loss of
unconsolidated joint ventures, interest expense, interest and other
income and income tax expense and other taxes. We consider NOI to
be an appropriate supplemental performance measure because it
reflects the operating performance of our properties and excludes
certain items that are not considered to be controllable in
connection with the management of the property such as
depreciation, amortization, impairment, general and administrative
expenses, interest income and interest expense. Additionally, lease
termination revenue is excluded as it is not considered to be
indicative of recurring operating income. However those measures
should not be viewed as alternative measures of our financial
performance since they exclude expenses which could materially
impact our results of operations. Further, our NOI may not be
comparable to that of other real estate companies, as they may use
different methodologies for calculating NOI, same store NOI
(excluding revenue from lease terminations), and cash basis same
store NOI (excluding revenue from lease terminations). Therefore,
we believe net income (loss) attributable to common stockholders,
as defined by GAAP, to be the most appropriate measure to evaluate
our overall financial performance.
DCT Industrial believes that net income (loss) attributable to
common stockholders, as defined by GAAP, is the most appropriate
earnings measure. However, DCT Industrial considers Funds from
Operations (“FFO”), as defined by the National Association of Real
Estate Investment Trusts (“NAREIT”), to be a useful supplemental,
non-GAAP measure of DCT Industrial’s operating performance. NAREIT
developed FFO as a relative measure of performance of an equity
REIT in order to recognize that the value of income-producing real
estate historically has not depreciated on the basis determined
under GAAP. FFO is generally defined as net income attributable to
common stockholders, calculated in accordance with GAAP, plus real
estate-related depreciation and amortization, less gains from
dispositions of operating real estate held for investment purposes,
plus impairment losses on depreciable real estate and impairments
of in substance real estate investments in investees that are
driven by measurable decreases in the fair value of the depreciable
real estate held by the unconsolidated joint ventures and
adjustments to derive DCT Industrial’s pro rata share of FFO of
unconsolidated joint ventures. We exclude gains and losses on
business combinations and include the gains or losses from
dispositions of properties which were acquired or developed with
the intention to sell or contribute to an investment fund in our
definition of FFO. Although the NAREIT definition of FFO predates
the guidance for accounting for gains and losses on business
combinations, we believe that excluding such gains and losses is
consistent with the key objective of FFO as a performance measure.
We also present FFO excluding severance, acquisition costs, debt
modification costs and impairment losses on properties which are
not depreciable. We believe that FFO excluding severance,
acquisition costs, debt modification costs and impairment losses on
non-depreciable real estate is useful supplemental information
regarding our operating performance as it provides a more
meaningful and consistent comparison of our operating performance
and allows investors to more easily compare our operating results.
Readers should note that FFO captures neither the changes in the
value of DCT Industrial’s properties that result from use or market
conditions, nor the level of capital expenditures and leasing
commissions necessary to maintain the operating performance of DCT
Industrial’s properties, all of which have real economic effect and
could materially impact DCT Industrial’s results from operations.
NAREIT’s definition of FFO is subject to interpretation, and
modifications to the NAREIT definition of FFO are common.
Accordingly, DCT Industrial’s FFO may not be comparable to other
REITs’ FFO and FFO should be considered only as a supplement to net
income (loss) as a measure of DCT Industrial’s performance.
DCT Industrial calculates our fixed charge coverage calculation
based on adjusted EBITDA, which represents net loss attributable to
DCT common stockholders before interest, taxes, depreciation,
amortization, stock-based compensation expense, noncontrolling
interest, impairment losses and excludes non-FFO gains and losses
on disposed assets and business combinations. We use adjusted
EBITDA to measure our operating performance and to provide
investors relevant and useful information because it allows fixed
income investors to view income from our operations on an
unleveraged basis before the effects of non-cash items, such as
depreciation and amortization and stock-based compensation expense,
and irregular items, such as non-FFO gains or losses from the
dispositions of real estate, impairment losses and gains and losses
on business combinations.
Forward-Looking Statements
We make statements in this document that are considered
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, or the Securities Act, and
Section 21E of the Securities Exchange Act of 1934, as amended, or
the Exchange Act, which are usually identified by the use of words
such as “anticipates,” “believes,” “estimates,” “expects,”
“intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,”
and variations of such words or similar expressions and includes
statements regarding our anticipated yields. We intend these
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 are including this
statement for purposes of complying with those safe harbor
provisions. These forward-looking statements reflect our current
views about our plans, intentions, expectations, strategies and
prospects, which are based on the information currently available
to us and on assumptions we have made. Although we believe that our
plans, intentions, expectations, strategies and prospects as
reflected in or suggested by those forward-looking statements are
reasonable, we can give no assurance that the plans, intentions,
expectations or strategies will be attained or achieved.
Furthermore, actual results may differ materially from those
described in the forward-looking statements and will be affected by
a variety of risks and factors that are beyond our control
including, without limitation: national, international, regional
and local economic conditions, including, in particular, the impact
of the strength of the United States economic recovery and global
economic recovery; the general level of interest rates and the
availability of capital; the competitive environment in which we
operate; real estate risks, including fluctuations in real estate
values and the general economic climate in local markets and
competition for tenants in such markets; decreased rental rates or
increasing vacancy rates; defaults on or non-renewal of leases by
tenants; acquisition and development risks, including failure of
such acquisitions and development projects to perform in accordance
with projections; the timing of acquisitions, dispositions and
developments; natural disasters such as fires, floods, tornadoes,
hurricanes and earthquakes; energy costs; the terms of governmental
regulations that affect us and interpretations of those
regulations, including the costs of compliance with those
regulations, changes in real estate and zoning laws and increases
in real property tax rates; financing risks, including the risk
that our cash flows from operations may be insufficient to meet
required payments of principal, interest and other commitments;
lack of or insufficient amounts of insurance; litigation, including
costs associated with prosecuting or defending claims and any
adverse outcomes; the consequences of future terrorist attacks or
civil unrest; environmental liabilities, including costs, fines or
penalties that may be incurred due to necessary remediation of
contamination of properties presently owned or previously owned by
us; and other risks and uncertainties detailed in the section of
our Form 10-K filed with the SEC and updated on Form 10-Q entitled
“Risk Factors.” In addition, our current and continuing
qualification as a real estate investment trust, or REIT, involves
the application of highly technical and complex provisions of the
Internal Revenue Code of 1986, or the Code, and depends on our
ability to meet the various requirements imposed by the Code
through actual operating results, distribution levels and diversity
of stock ownership. We assume no obligation to update publicly any
forward looking statements, whether as a result of new information,
future events or otherwise.
DCT Industrial Trust Inc.Melissa Sachs,
303-597-2400investorrelations@dctindustrial.com
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