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8-K - FORM 8-K - DCT Industrial Trust Inc.d8k.htm
EX-99.2 - SUPPLEMENTAL INFORMATION - DCT Industrial Trust Inc.dex992.htm

Exhibit 99.1

 

LOGO   

Press Release

 

 

DCT INDUSTRIAL TRUST® REPORTS FOURTH QUARTER AND

2010 FULL-YEAR RESULTS

 

   

Funds from Operations, as adjusted, totaled $0.10 per share in fourth quarter and $0.39 per share for 2010

 

   

Total consolidated occupancy increased to 87.4% as of December 31, up from 82.7% in prior year

 

   

Completed $79.1 million of acquisitions totaling 921,000 square feet in fourth quarter with an additional 884,000 square feet totaling $46.7 million closed in January 2011

 

   

Same store net operating income declined 6.7% on a cash basis compared to prior year

DENVER, February 8, 2011 – DCT Industrial Trust Inc. ® (NYSE: DCT), a leading industrial real estate company, today announced financial results for the three months and year ended December 31, 2010.

Funds from Operations (FFO) attributable to common stockholders and unitholders for the fourth quarter of 2010 totaled $23.9 million, or $0.10 per diluted share, excluding $5.3 million, or $0.02 per diluted share, of impairment losses and acquisition costs, compared with $26.9 million, or $0.11 per diluted share, excluding $0.3 million of severance costs and impairment losses, reported for the fourth quarter of 2009.

For the year ended December 31, 2010, FFO attributable to common stockholders and unitholders totaled $93.0 million, or $0.39 per diluted share, excluding $14.4 million of impairment losses, acquisition costs and debt modification costs. This compares with $112.4 million, or $0.50 per diluted share, excluding $3.9 million, or $0.02 per diluted share, of severance costs and impairment losses, reported for the year ended December 31, 2009.

Including impairment losses and acquisition costs, FFO was $0.08 per diluted share for the three months ended December 31, 2010. For the year ended December 31, 2010, including impairment losses, acquisition costs and debt modification costs, FFO was $0.33 per diluted share.

Net loss attributable to common stockholders for the fourth quarter of 2010 was $11.2 million, or $0.05 per diluted share, compared with a net loss of $3.8 million, or $0.02 per diluted share, reported for the fourth quarter of 2009. Net loss attributable to common stockholders for the year ended December 31, 2010 was $37.8 million, or $0.18 per diluted share, compared with a net loss of $18.6 million, or $0.10 per diluted share, for the year ended December 31, 2009.

“We are very pleased with our fourth quarter results. More importantly, leasing activity was very strong as our customers’ confidence in their businesses continues to improve along with the overall economy. Customer demand is translating into increased occupancy which reached 87.4%, an

 

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increase of 310 basis-points this quarter, in our total consolidated portfolio.” said Phil Hawkins, President and CEO of DCT Industrial. “We are optimistic that industrial real estate fundamentals will continue to improve in 2011.”

Operating Results and Leasing Activity

As of December 31, 2010, DCT Industrial owned 390 consolidated operating properties, comprised of 56.7 million square feet plus 1.1 million square feet of development and redevelopment properties. DCT Industrial’s consolidated operating portfolio occupancy was 88.9% as of December 31, 2010, up from 86.9% as of September 30, 2010. Including development and redevelopment, the total consolidated portfolio occupancy was 87.4% as of December 31, 2010 up from 84.3% as of September 30, 2010.

Net operating income was $43.0 million in the fourth quarter of 2010, compared with $43.9 million reported for the fourth quarter of 2009. For the twelve months ended December 31, 2010, net operating income totaled $165.8 million compared with $172.9 million earned in 2009. Total consolidated occupancy averaged 82.9% in 2010 compared to 84.0% in 2009.

Fourth quarter 2010 same store net operating income declined 5.7% on a GAAP basis and 6.7% on a cash basis, excluding revenue from lease terminations, when compared to the same period last year. For the year ended December 31, 2010, same store net operating income declined 7.1% on a GAAP basis and 8.8% on a cash basis, excluding revenue from lease terminations, when compared to 2009.

The Company achieved record leasing in the fourth quarter of 2010, with 4.6 million square feet executed, including 0.3 million square feet of development and redevelopment leases. For the year ended December 31, 2010, leases totaling 13.3 million square feet were signed, of which 2.3 million square feet were for development and redevelopment properties. As of December 31, 2010, 1.0 million square feet, or 1.7% of DCT’s total consolidated portfolio of 57.8 million square feet, was leased but not occupied.

The tenant retention rate was 88.6% and 73.8% for the fourth quarter and full year of 2010, respectively. In the fourth quarter of 2010, rental rates on signed leases declined 8.9% on a GAAP basis and 14.0% on a cash basis. In 2010, rental rates declined 8.7% on a GAAP basis and 10.0% on a cash basis with respect to signed leases.

Capital Deployment, Development Update and Disposition Activity

As previously announced, DCT Industrial successfully completed acquisitions with a total value of $111.5 million in 2010, of which $79.1 million was acquired in the fourth quarter which includes $14.0 million owned by non-controlling interests. Acquisitions comprised 1.5 million square feet of industrial properties in coastal and in-fill markets and a 19.3 acre land parcel in the Inland Empire West and are expected to generate a year-one cash yield of 8.2% on total cost. In addition, the Company closed 884,000 square feet, or $46.7 million, of acquisitions in January 2011 which increased $9.8 million owned by non-controlling interests.

“We are very pleased with the quality and volume of acquisitions we closed last year and the progress our local teams have made at growing our presence in select markets,” said Phil Hawkins. “We continue to pursue both core and value-add acquisitions and think that this part of the

 

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economic cycle presents a unique opportunity to acquire quality buildings at attractive prices, generating strong returns and cash flow growth over time.”

In the Company’s development portfolio, nine properties totaling 2.4 million square feet were stabilized in 2010, of which 0.7 million square feet were stabilized in the fourth quarter. An additional 0.7 million square feet of redevelopment properties were stabilized during 2010. In total, the Company stabilized approximately $150.0 million of projects in 2010 with a remaining pipeline of $131.1 million at December 31, 2010, including its proportionate share of joint ventures.

During the fourth quarter of 2010, DCT Industrial completed the disposition of four light industrial properties comprising 129,000 square feet. The vacant buildings were sold to users for a total sales price of $4.6 million. For the year ended December 31, 2010, DCT Industrial completed sales of 536,000 square feet for a total sales price of $21.6 million.

Solid Balance Sheet

The company’s consolidated net debt to book value of total assets (less cash and before depreciation and amortization) was 37.0% as of December 31, 2010, compared with 36.1% as of December 31, 2009. The Company’s fixed charge coverage for the fourth quarter of 2010 was 2.4 times and net debt to adjusted EBITDA was 7.4 times at December 31, 2010.

In addition, DCT Industrial raised $43.0 million though its continuous equity offering program during the fourth quarter of 2010 from the issuance of 9.1 million new shares. In 2010, DCT raised $60.4 million through the program. The proceeds from the issuances have been used to finance acquisitions.

Dividend

DCT Industrial’s Board of Directors has declared a $0.07 per share quarterly cash dividend, payable on April 19, 2011, to stockholders of record as of April 7, 2011.

Guidance

The Company reiterated guidance for 2011 FFO of $0.33 to $0.38 per diluted share. Additionally, net loss attributable to common stockholders and unitholders is expected to be between $(0.14) and $(0.07) per diluted share.

The Company’s guidance excludes future real estate gains, losses, impairments, and costs of acquiring real estate properties.

Conference Call Information

DCT Industrial will host a conference call to discuss fourth quarter 2010 and full-year results and its recent business activities on Wednesday, February 9, 2011 at 11:00 a.m. Eastern Time. Stockholders and interested parties may listen to a live broadcast of the conference call by dialing (877) 317-6789 or (412) 317-6789. A telephone replay will be available through April 12, 2011 at 9:00 a.m. ET by dialing (877) 344-7529 or (412) 317-0088 and entering the passcode 447119. A live webcast of the conference call will be available in the Investor Relations section of the DCT

 

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Industrial website at www.dctindustrial.com. A webcast replay will also be available shortly following the call until February 9, 2012.

Supplemental information is available in the Investor Relations 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®

DCT Industrial Trust is a leading industrial real estate company that owns, operates and develops high-quality bulk distribution and light industrial properties in high-volume distribution markets in the U.S. and Mexico. As of December 31, 2010, the Company owned, managed or had under development 76.3 million square feet of assets leased to more than 840 customers, including 14.6 million square feet managed on behalf of three institutional joint venture partners. Additional information is available at www.dctindustrial.com.

CONTACT:

Investor Relations

DCT Industrial Trust Inc.

303-597-0474

investorrelations@dctindustrial.com

 

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DCT INDUSTRIAL TRUST INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(unaudited, in thousands, except share and per share information)

 

     December 31,
2010
    December 31,
2009
 

ASSETS

    

Land

   $ 567,152      $ 519,485   

Buildings and improvements

     2,343,835        2,219,826   

Intangible lease assets

     93,497        116,243   

Construction in progress

     32,952        60,860   
                

Total investment in properties

     3,037,436        2,916,414   

Less accumulated depreciation and amortization

     (528,705     (451,242
                

Net investment in properties

     2,508,731        2,465,172   

Investments in and advances to unconsolidated joint ventures

     138,455        111,238   
                

Net investment in real estate

     2,647,186        2,576,410   

Cash and cash equivalents

     17,330        19,120   

Notes receivable

     1,222        19,084   

Deferred loan costs, net

     5,883        4,919   

Straight-line rent and other receivables, net of allowance for doubtful accounts of $2,088 and $2,226, respectively

     33,278        31,607   

Other assets, net

     14,990        13,152   
                

Total assets

   $ 2,719,889      $ 2,664,292   
                

LIABILITIES AND EQUITY

    

Liabilities:

    

Accounts payable and accrued expenses

   $ 38,354      $ 36,261   

Distributions payable

     17,458        16,527   

Tenant prepaids and security deposits

     20,759        19,451   

Other liabilities

     12,373        5,759   

Intangible lease liability, net

     18,748        5,946   

Line of credit

     51,000        —     

Senior unsecured notes

     735,000        625,000   

Mortgage notes

     425,359        511,715   
                

Total liabilities

     1,319,051        1,220,659   
                

Equity:

    

Preferred stock, $0.01 par value, 50,000,000 shares authorized, none outstanding

     —          —     

Shares-in-trust, $0.01 par value, 100,000,000 shares authorized, none outstanding

     —          —     

Common stock, $0.01 par value, 350,000,000 shares authorized, 222,946,676 and 208,046,167 shares issued and outstanding as of December 31, 2010 and December 31, 2009, respectively

     2,229        2,080   

Additional paid-in capital

     1,898,289        1,817,654   

Distributions in excess of earnings

     (689,127     (591,087

Accumulated other comprehensive loss

     (15,289     (11,012
                

Total stockholders’ equity

     1,196,102        1,217,635   

Noncontrolling interests

     204,736        225,998   
                

Total equity

     1,400,838        1,443,633   
                

Total liabilities and equity

   $ 2,719,889      $ 2,664,292   
                

Total debt net of cash:

    

Senior unsecured notes and mortgage notes

   $ 1,211,359      $ 1,136,715   

Less cash and cash equivalents

     (17,330     (19,120
                

Net debt

   $ 1,194,029      $ 1,117,595   
                

Book value of total assets less cash and before depreciation:

    

Total assets

   $ 2,719,889      $ 2,664,292   

Less cash and cash equivalents

     (17,330     (19,120

Add back accumulated depreciation and amortization

     528,705        451,242   
                

Book value of total assets less cash and before depreciation and amortization

   $ 3,231,264      $ 3,096,414   
                

Percentage of debt to total assets

     44.5     42.7
                

Percentage of net debt to book value of total assets less cash and before depreciation and amortization

     37.0     36.1
                

 

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DCT INDUSTRIAL TRUST INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(unaudited, in thousands, except per share information)

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2010     2009     2010     2009  

REVENUES:

    

Rental revenues

   $ 59,119      $ 59,541      $ 235,284      $ 239,964   

Institutional capital management and other fees

     1,082        653        4,133        2,701   
                                

Total revenues

     60,201        60,194        239,417        242,665   
                                

OPERATING EXPENSES:

        

Rental expenses

     8,212        7,448        33,527        32,532   

Real estate taxes

     7,889        8,150        35,963        34,493   

Real estate related depreciation and amortization

     29,368        28,516        115,123        109,420   

General and administrative

     6,735        8,221        25,262        29,224   

Impairment losses

     4,100        —          8,656        —     
                                

Total operating expenses

     56,304        52,335        218,531        205,669   
                                

Operating income

     3,897        7,859        20,886        36,996   

OTHER INCOME AND EXPENSE:

        

Equity in income (loss) of unconsolidated joint ventures, net

     (786     533        (2,986     2,698   

Impairment losses on investments in unconsolidated joint ventures

     (216     —          (216     (300

Loss on business combinations

     —          (169     (395     (10,325

Interest expense

     (15,423     (12,576     (56,903     (52,670

Interest and other income

     244        364        356        1,918   

Income tax benefit (expense) and other taxes

     138        178        (918     (1,846
                                

Loss from continuing operations

     (12,146     (3,811     (40,176     (23,529

Income (loss) from discontinued operations

     (747     (518     (2,890     1,815   
                                

Loss before gain (loss) on dispositions of real estate interests

     (12,893     (4,329     (43,066     (21,714

Gain (loss) on dispositions of real estate interests

     —          (57     13        5   
                                

Consolidated net loss of DCT Industrial Trust Inc.

     (12,893     (4,386     (43,053     (21,709

Net loss attributable to noncontrolling interests

     1,698        550        5,223        3,124   
                                

Net loss attributable to common stockholders

   $ (11,195   $ (3,836   $ (37,830   $ (18,585
                                

EARNINGS PER COMMON SHARE - BASIC:

        

Loss from continuing operations

   $ (0.05   $ (0.02   $ (0.17   $ (0.11

Income (loss) from discontinued operations

     0.00        0.00        (0.01     0.01   

Gain (loss) on dispositions of real estate interests

     0.00        0.00        0.00        0.00   
                                

Net loss attributable to common stockholders

   $ (0.05   $ (0.02   $ (0.18   $ (0.10
                                

EARNINGS PER COMMON SHARE - DILUTED:

        

Loss from continuing operations

   $ (0.05   $ (0.02   $ (0.17   $ (0.11

Income (loss) from discontinued operations

     0.00        0.00        (0.01     0.01   

Gain (loss) on dispositions of real estate interests

     0.00        0.00        0.00        0.00   
                                

Net loss attributable to common stockholders

   $ (0.05   $ (0.02   $ (0.18   $ (0.10
                                

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

        

Basic and diluted

     218,723        207,291        212,412        192,900   
                                

 

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Reconciliation of Loss Attributable to Common Stockholders and Unitholders to Funds From Operations

(unaudited, in thousands, except per share information)

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2010     2009     2010     2009  

Net loss attributable to common stockholders

   $ (11,195   $ (3,836   $ (37,830   $ (18,585

Adjustments:

        

Real estate related depreciation and amortization

     29,386        28,772        115,904        111,250   

Equity in (income) loss of unconsolidated joint ventures, net

     786        (533     2,986        (2,698

Equity in FFO of unconsolidated joint ventures

     921        2,348        4,001        11,807   

Less: loss on business combinations

     —          169        395        10,325   

Less: (gain) loss on dispositions of real estate interest

     —          149        (2,091     (1,354

Gain on dispositions of non-depreciated real estate

     —          (43     13        783   

Noncontrolling interest in the operating partnership’s share of the above adjustment

     (3,283     (3,625     (13,426     (17,907

FFO attributable to unitholders

     1,941        3,124        8,678        14,881   
                                

FFO attributable to common stockholders and unitholders, basic and diluted

     18,556        26,525        78,630        108,502   
                                

Adjustments:

        

Impairment losses (1)

     4,591        51        12,004        981   

Debt modification costs

     —          —          1,136        —     

Acquisition costs

     706        —          1,228        —     

Severance costs

     —          297        —          2,966   
                                

FFO, as adjusted, attributable to common stockholders and unitholders, basic and diluted

   $ 23,853      $ 26,873      $ 92,998      $ 112,449   
                                

FFO per common share and unit, basic and diluted

   $ 0.08      $ 0.11      $ 0.33      $ 0.48   
                                

FFO, as adjusted, per common share and unit, basic and diluted

   $ 0.10      $ 0.11      $ 0.39      $ 0.50   
                                

FFO weighted average common shares and units outstanding:

        

Common shares for earnings per share – basic

     218,723        207,291        212,412        192,900   

Participating securities

     1,722        1,376        1,689        1,535   

Units

     25,721        28,215        26,351        30,660   
                                

FFO weighted average common shares, participating securities and units outstanding – basic

     246,166        236,882        240,452        225,095   

Dilutive common stock equivalents

     401        366        357        189   
                                

FFO weighted average common shares, participating securities and units outstanding – diluted

     246,567        237,248        240,809        225,284   
                                

 

(1) Excluding amounts attributable to noncontrolling interests.

 

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Guidance(1)

The Company is providing the following guidance:

 

     Range for Full-Year 2011  
     Low     High  

Guidance:

    

Earnings per diluted share

   $ (0.14   $ (0.07

Real estate related depreciation and amortization net of noncontrolling interest(2)

     0.47        0.45   
                

FFO attributable to common shares per diluted share

   $ 0.33      $ 0.38   
                

 

(1) Guidance excludes future real estate gains, losses, impairments and costs of acquiring real estate properties.
(2) Includes pro rata share of real estate depreciation and amortization from unconsolidated joint ventures.

The following table shows the calculation of our Fixed Charge Coverage for the three and twelve months ended December 31, 2010 and 2009 (in thousands):

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2010     2009     2010     2009  

Net loss attributable to common stockholders

   $ (11,195   $ (3,836   $ (37,830   $ (18,585

Interest expense (1)

     15,446        12,607        56,998        52,851   

Proportionate share of interest expense from unconsolidated joint ventures

     973        230        3,230        3,478   

Real estate related depreciation and amortization (1)

     29,386        28,772        115,904        111,250   

Proportionate share of real estate related depreciation and amortization from unconsolidated joint ventures

     1,470        1,531        5,901        8,539   

Income tax benefit (expense) and other taxes (1)

     (131     (173     937        1,855   

Stock-based compensation amortization

     1,246        3,234        4,828        8,603   

Noncontrolling interests (1)

     (1,698     (550     (5,223     (3,124

Loss on business combinations

     —          169        395        10,325   

Non-FFO gains on dispositions of real estate interests

     —          105        (2,079     (570

Impairment losses (1)(2) 

     4,916        52        12,329        981   
                                

Adjusted EBITDA

   $ 40,413      $ 42,141      $ 155,390      $ 175,603   
                                

CALCULATION OF FIXED CHARGES:

        

Interest expense (1)

   $ 15,446      $ 12,607      $ 56,998      $ 52,851   

Capitalized interest

     359        1,461        2,162        6,064   

Amortization of loan costs and debt premium/discount

     (252     (305     (1,240     (1,341

Proportionate share of interest expense from unconsolidated joint ventures

     973        230        3,230        3,478   
                                

Total fixed charges

   $ 16,526      $ 13,993      $ 61,150      $ 61,052   
                                

Fixed charge coverage

     2.4        3.0        2.5        2.9   
                                

 

(1) Includes amounts related to discontinued operations.
(2) Includes impairment losses on investments in unconsolidated joint ventures.

 

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The following table is a reconciliation of our property net operating income to our reported “Loss from continuing operations” for the three and twelve months ended December 31, 2010 and 2009 (in thousands):

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2010     2009     2010     2009  

Loss from continuing operations

   $ (12,146   $ (3,811   $ (40,176   $ (23,529

Income and other taxes

     (138     (178     918        1,846   

Interest and other income

     (244     (364     (356     (1,918

Interest expense

     15,423        12,576        56,903        52,670   

Equity in (income) loss of unconsolidated joint ventures, net

     786        (533     2,986        (2,698

General and administrative

     6,735        8,221        25,262        29,224   

Real estate related depreciation and amortization

     29,368        28,516        115,123        109,420   

Loss on business combinations

     —          169        395        10,325   

Impairment losses

     4,316        —          8,872        300   

Institutional capital management and other fees

     (1,082     (653     (4,133     (2,701
                                

Total net operating income

     43,018        43,943        165,794        172,939   

Less net operating income – non-same store properties

     (2,107     (490     (10,377     (4,129
                                

Same store net operating income

     40,911        43,453        155,417        168,810   

Less revenue from lease terminations

     (104     (167     (424     (2,018
                                

Same store net operating income, excluding revenue from lease terminations

     40,807        43,286        154,993        166,792   

Less straight-line rents, net of related bad debt expense

     (824     (579     (3,237     (797

Add back amortization of above/(below) market rents

     (38     87        561        1,064   
                                

Same store cash net operating income, excluding revenue from lease terminations

   $ 39,945      $ 42,794      $ 152,317      $ 167,059   
                                

 

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Financial Measures

Net operating income (“NOI”) is defined as rental revenues, including reimbursements, less rental expenses and real estate taxes, which excludes depreciation, amortization, impairment, general and administrative expenses and interest expense. 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. 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). Additionally, lease termination revenue is excluded as it is not considered to be indicative of recurring operating income. 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.

We believe that net income (loss) attributable to common stockholders, as defined by GAAP, is the most appropriate earnings measure. However, we consider FFO as defined by the National Association of Real Estate Investment Trusts, or NAREIT, to be a useful supplemental, non-GAAP measure of our 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 (loss) attributable to common stockholders, calculated in accordance with GAAP, plus real estate-related depreciation and amortization, less gain (or loss) from dispositions of operating real estate held for investment purposes and adjustments to derive our proportionate 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 as defined by GAAP, 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. We believe that FFO excluding severance, acquisition costs and debt modification costs, which are non-routine items, and impairment losses 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 without taking into account the unrelated impairment losses relating to the decrease in value of certain real estate assets and investments in unconsolidated joint ventures. Readers should note that FFO captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations. NAREIT’s definition of FFO is subject to interpretation, and modifications to the NAREIT definition of FFO are common. Accordingly, our FFO may not be comparable to other REITs’ FFO and FFO should be considered only as a supplement to net income (loss) attributable to common stockholders as a measure of our 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.

 

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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. 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 continuing impact of the economic recession that began in 2007 and the strength of the 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 and dispositions; natural disasters such as fires, 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; possible 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-10K 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.

 

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