DCT Industrial Trust Inc. - FORM 8-K - EX-99.2

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8-K - 8-K - DCT Industrial Trust Inc.	d621006d8k.htm
EX-99.1 - EX-99.1 - DCT Industrial Trust Inc.	d621006dex991.htm

Exhibit 99.2

LOGO

Table of Contents


Quarterly Highlights			2
Consolidated Statements of Operations			3
Consolidated Balance Sheets			4
Funds from Operations			5
Selected Financial Data			6
Property Overview			7-8
Consolidated Leasing Summary			9
Acquisition and Disposition Summary			10
Development Overview			11
Indebtedness			12
Capitalization and Fixed Charge Coverage			13
Investment in Unconsolidated Ventures Summary			14
Definitions			15-18

Forward Looking Statement

We make statements in this report 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 cost 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 from time to time in our filings with the Securities and Exchange Commission.

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.


Third Quarter 2013				Page 1
Supplemental Reporting Package

Quarterly Highlights


Same Store Net Operating Income Growth⁽¹⁾		Portfolio Occupancy (%)⁽¹⁾

Total Leasing Volume (square feet, in millions)		Acquisitions and Dispositions⁽²⁾ ($ in millions)

Top 10 Markets⁽³⁾

Consolidated Operating


	ABR		Occupancy			Occupancy⁽⁴⁾
Market	(thousands)		Q3 2013			Q3 2012			Change
Southern California	$	27,603		93.9	%		99.7	%		-5.8	%
Northern California		18,572		95.6	%		95.4	%		0.2	%
Dallas		18,495		93.0	%		90.0	%		3.0	%
Chicago		18,179		100.0	%		99.7	%		0.3	%
Houston		17,788		96.8	%		97.8	%		-1.0	%
Atlanta		17,500		84.3	%		89.4	%		-5.1	%
Cincinnati		13,576		94.8	%		89.9	%		4.9	%
Baltimore/Washington		11,983		94.0	%		93.7	%		0.3	%
New Jersey		9,075		95.2	%		92.5	%		2.7	%
Pennsylvania		8,156		86.1	%		84.6	%		1.5	%

Total/Weighted Average	$	160,927		93.2	%		93.3	%		-0.1	%

⁽¹⁾	Prior period amounts are as previously reported. Same Store NOI excludes lease termination fees.

⁽²⁾	Includes consolidated property acquisitions or dispositions.

⁽³⁾	Based on annualized base rent as of September 30, 2013. Occupancy is as of period end.

⁽⁴⁾	Prior period amounts are as previously reported.


Third Quarter 2013				Page 2
Supplemental Reporting Package

Consolidated Statements of Operations

(unaudited, amounts in thousands, except per share data)


	Three Months Ended September 30,						Nine Months Ended 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	)
Discontinued operations:
Operating income and other expenses		1,012			2,365			4,042			6,375
Gain (loss) on dispositions of real estate interests from discontinued operations		(13,204	)		12,227			4,304			926

Income (loss) from discontinued operations		(12,192	)		14,592			8,346			7,301

Consolidated net income (loss) of DCT Industrial Trust 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 common stockholders		(10,157	)		7,548			1,931			(14,240	)

Distributed and undistributed earnings allocated to participating securities		(173	)		(134	)		(519	)		(400	)

Adjusted net income (loss) attributable to common 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


Third Quarter 2013				Page 3
Supplemental Reporting Package

Consolidated Balance Sheets

(amounts in thousands)


	September 30,			December 31,
	2013			2012
	(unaudited)
ASSETS:
Operating properties	$	3,271,547		$	3,209,024
Properties under development		137,416			80,008
Properties under redevelopment		16,762			14,699
Properties in pre-development including land held		88,604			81,796

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		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:
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

Total stockholders’ equity		1,519,262			1,329,064
Noncontrolling interests		129,106			144,495

Total liabilities and equity	$	3,233,606		$	3,057,199


Third Quarter 2013				Page 4
Supplemental Reporting Package

Funds from Operations

(unaudited, amounts in thousands, except per share and unit data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Reconciliation of net income (loss) attributable to common stockholders to FFO:
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 and unitholders – 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, participating securities 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, participating securities 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).


Third Quarter 2013				Page 5
Supplemental Reporting Package

Selected Financial Data

(unaudited, amounts in thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
NET OPERATING INCOME:⁽¹⁾
Rental revenues	$	73,732		$	60,719		$	211,509		$	175,256
Rental expenses and real estate taxes		(19,887	)		(17,664	)		(59,474	)		(49,755	)

Net operating income⁽²⁾	$	53,845		$	43,055		$	152,035		$	125,501

TOTAL CONSOLIDATED PROPERTIES:⁽³⁾
Square feet as of period end		63,090			58,486			63,090			58,486
Average occupancy		91.3	%		90.6	%		90.8	%		90.6	%
Occupancy as of period end		91.5	%		91.0	%		91.5	%		91.0	%
CONSOLIDATED OPERATING PROPERTIES:⁽³⁾
Square feet as of period end		62,201			57,960			62,201			57,960
Average occupancy		92.7	%		91.0	%		92.3	%		90.5	%
Occupancy as of period end		92.8	%		91.8	%		92.8	%		91.8	%
SAME STORE PROPERTIES:⁽⁴⁾
Square feet as of period end		53,219			53,219			51,793			51,793
Average occupancy		91.9	%		90.5	%		91.7	%		90.2	%
Occupancy as of period end		92.0	%		91.2	%		91.8	%		91.0	%
Rental revenues	$	64,198		$	62,896		$	186,708		$	179,662
Rental expenses and real estate taxes		(17,845	)		(18,065	)		(52,711	)		(50,132	)

Same store net operating income		46,353			44,831			133,997			129,530
Less: revenue from lease terminations		(517	)		(186	)		(828	)		(400	)

Net operating income (excluding revenue from lease terminations)		45,836			44,645			133,169			129,130

Less: straight-line rents, net of related bad debt expense		116			(1,374	)		(469	)		(4,443	)
Less: amortization of below market rents, net		(326	)		(198	)		(838	)		(449	)

Cash net operating income (excluding revenue from lease terminations)	$	45,626		$	43,073		$	131,862		$	124,238

Net operating income growth (excluding revenue from lease terminations)		2.7	%					3.1	%
Cash net operating income growth (excluding revenue from lease terminations)		5.9	%					6.1	%
SUPPLEMENTAL CONSOLIDATED CASH FLOW AND OTHER INFORMATION:
Straight-line rents - increase to revenue, net of related bad debt expense⁽³⁾	$	981		$	1,307		$	3,752		$	4,395
Straight-line rent receivable (balance sheet)⁽³⁾	$	41,361		$	38,913		$	41,361		$	38,913
Net amortization of below market rents – increase to revenue⁽³⁾	$	402		$	230		$	1,201		$	573
Capitalized interest	$	2,107		$	1,113		$	6,058		$	2,583
Stock-based compensation	$	1,292		$	1,063		$	3,648		$	3,078
Revenue from lease terminations⁽³⁾	$	762		$	331		$	1,073		$	546
Bad debt expense, excluding bad debt expense related to straight-line rents⁽³⁾	$	357		$	161		$	876		$	521
CONSOLIDATED CAPITAL EXPENDITURES:⁽³⁾
Development, redevelopment, due diligence and other capital improvements	$	39,884		$	22,938		$	96,603		$	35,776
Routine capital improvements		5,185			3,921			8,956			8,184
Tenant improvements and leasing costs		7,246			6,204			19,261			21,194

Total capital expenditures	$	52,315		$	33,063		$	124,820		$	65,154

⁽¹⁾	Excludes discontinued operations.

⁽²⁾	See reconciliation of net operating income to loss from continuing operations in Definitions.

⁽³⁾	Includes discontinued operations.

⁽⁴⁾	See the Definitions for same store properties.


Third Quarter 2013				Page 6
Supplemental Reporting Package

Property Overview

As of September 30, 2013


Markets	Number of Buildings		Percent Owned⁽¹⁾			Square Feet		Percentage of Total Square Feet			Occupancy Percentage			Annualized Base Rent⁽³⁾			Percent of Total Annualized Base Rent
						(in thousands)								(in thousands)
CONSOLIDATED OPERATING:
Atlanta		40		100.0	%		6,188		9.8	%		84.3	%	$	17,500			7.50	%
Baltimore/Washington D.C.		19		100.0	%		2,236		3.5	%		94.0	%		11,983			5.20	%
Charlotte		1		100.0	%		472		0.7	%		100.0	%		1,604			0.70	%
Chicago		27		100.0	%		5,694		9.0	%		100.0	%		18,179			7.80	%
Cincinnati		32		100.0	%		4,492		7.1	%		94.8	%		13,576			5.90	%
Columbus		12		100.0	%		3,480		5.5	%		89.4	%		7,760			3.30	%
Dallas		47		100.0	%		5,526		8.8	%		93.0	%		18,495			8.00	%
Denver		2		100.0	%		278		0.4	%		100.0	%		1,185			0.50	%
Houston		42		100.0	%		3,167		5.0	%		96.8	%		17,788			7.70	%
Indianapolis		7		100.0	%		2,299		3.6	%		97.0	%		7,558			3.30	%
Louisville		3		100.0	%		1,109		1.8	%		100.0	%		2,597			1.10	%
Memphis		8		100.0	%		3,712		5.9	%		83.4	%		8,142			3.50	%
Mexico		15		100.0	%		1,653		2.6	%		100.0	%		7,164			3.10	%
Miami		9		100.0	%		1,151		1.8	%		98.8	%		7,721			3.30	%
Nashville		4		100.0	%		2,064		3.3	%		90.4	%		5,274			2.30	%
New Jersey		13		100.0	%		1,748		2.8	%		95.2	%		9,075			3.90	%
Northern California		28		100.0	%		3,566		5.7	%		95.6	%		18,572			8.00	%
Orlando		20		100.0	%		1,864		3.0	%		85.6	%		6,268			2.70	%
Pennsylvania		14		100.0	%		2,828		4.5	%		86.1	%		8,156			3.50	%
Phoenix		17		100.0	%		2,025		3.2	%		96.8	%		8,036			3.50	%
Seattle		12		100.0	%		1,599		2.5	%		94.4	%		7,782			3.40	%
Southern California		39		91.6	%		5,050		8.0	%		93.9	%		27,603			11.8	%

Total/weighted average – operating properties		411		99.3	%		62,201		98.5	%		92.8	%		232,018			100.0	%

REDEVELOPMENT PROPERTIES:
Chicago		1		100.0	%		102		0.2	%		0.0	%		—			0.0	%
New Jersey		1		100.0	%		107		0.2	%		0.0	%		—			0.0	%
Phoenix		1		100.0	%		76		0.1	%		0.0	%		—			0.0	%

Total/weighted average – redevelopment properties		3		100.0	%		285		0.5	%		0.0	%		—			0.0	%

DEVELOPMENT PROPERTIES:
Chicago		1		100.0	%		604		1.0	%		0.0	%		—			0.0	%

Total/weighted average – development properties		1		100.0	%		604		1.0	%		0.0	%		—			0.0	%

Total/weighted average – consolidated properties		415		99.3	%		63,090		100.0	%		91.5	%	$	232,018	⁽⁴⁾		100.0	%

Continued on next page

See footnotes on next page.


Third Quarter 2013				Page 7
Supplemental Reporting Package

Property Overview

(continued)

As of September 30, 2013


Markets	Number of Buildings		Percent Owned⁽¹⁾			Square Feet		Percentage of Total Square Feet			Occupancy Percentage			Annualized Base Rent⁽²⁾		Percent of Total Annualized Base Rent
						(in thousands)								(in thousands)
UNCONSOLIDATED OPERATING PROPERTIES:
IDI (Chicago, Nashville, Savannah)		3		50.0	%		1,423		11.6	%		53.0	%	$	1,631		4.1	%
Southern California Logistics Airport⁽⁵⁾		6		50.0	%		2,160		17.5	%		98.5	%		7,765		19.6	%

Total/weighted average – unconsolidated operating properties		9		50.0	%		3,583		29.1	%		80.4	%		9,396		23.7	%

OPERATING PROPERTIES IN CO-INVESTMENT VENTURES:
Atlanta		1		3.6	%		491		4.0	%		100.0	%		1,753		4.5	%
Chicago		2		20.0	%		1,033		8.4	%		100.0	%		3,086		7.8	%
Cincinnati		3		13.6	%		892		7.2	%		100.0	%		2,977		7.5	%
Columbus		2		5.7	%		451		3.7	%		100.0	%		1,356		3.4	%
Dallas		3		15.3	%		1,186		9.6	%		83.1	%		3,055		7.7	%
Denver		5		20.0	%		772		6.3	%		92.8	%		3,564		9.0	%
Indianapolis		1		11.4	%		475		3.9	%		98.6	%		1,955		5.0	%
Louisville		4		10.0	%		736		6.0	%		100.0	%		2,291		5.8	%
Minneapolis		3		3.6	%		472		3.8	%		100.0	%		2,187		5.5	%
Nashville		2		20.0	%		1,020		8.3	%		100.0	%		2,693		6.8	%
Orlando		2		20.0	%		696		5.6	%		100.0	%		3,265		8.3	%
Pennsylvania		1		11.4	%		502		4.1	%		100.0	%		1,990		5.0	%

Total/weighted average - co-investment operating properties		29		14.3	%		8,726		70.9	%		97.0	%		30,172		76.3	%

Total/weighted average – unconsolidated properties		38		24.3	%		12,309		100.0	%		92.2	%	$	39,568		100.0	%

SUMMARY:
Total/weighted average - operating properties		449		86.9	%		74,510		98.8	%		92.7	%	$	271,586		100.0	%
Total/weighted average – redevelopment properties		3		100.0	%		285		0.4	%		0.0	%		—		0.0	%
Total/weighted average – development properties		1		100.0	%		604		0.8	%		0.0	%		—		0.0	%

Total/weighted average - all properties		453		87.1	%		75,399		100.0	%		91.6	%	$	271,586		100.0	%

⁽¹⁾	Percent owned is based on equity ownership weighted by square feet.

⁽²⁾	Excludes future contractual rent increases and decreases.

⁽³⁾	Excludes total annualized base rent of $1.7 million from one non-industrial property acquired for future development.

⁽⁴⁾	Excludes total annualized base rent associated with tenants currently in free rent periods of $5.8 million based on the first month’s cash base rent.

⁽⁵⁾	Although we contributed 100% of the initial cash equity capital required by the venture, after return of certain preferential distributions on capital invested, profits and losses are generally split 50/50.


Third Quarter 2013				Page 8
Supplemental Reporting Package

Consolidated Leasing Summary

Leasing Statistics⁽¹⁾


	Number of Leases Signed			Square Feet Signed		Cash Basis Rent Growth			GAAP Basis Rent Growth			Weighted Average Lease Term⁽²⁾		Turnover Costs		Turnover Costs Per Square Foot
				(in thousands)										(in thousands)

FOUR QUARTERS ROLLING
New		127			3,884		-3.5	%		4.7	%		57	$	13,283	$	3.42
Renewal		169			7,949		-1.7	%		6.7	%		49		9,777		1.23
Development and redevelopment		8			1,715		N/A			N/A			76		N/A		N/A

Total/Weighted Average		304			13,548		-2.1	%		6.3	%		55	$	23,061	$	1.95

Weighted Average Retention		70.1	%

THIRD QUARTER 2013
New		29			924		-7.2	%		-6.2	%		54	$	2,726	$	2.95
Renewal		48			2,946		-4.0	%		4.4	%		45		2,651		0.90
Development and redevelopment		2			502		N/A			N/A			64		N/A		N/A

Total/Weighted Average		79			4,372		-4.4	%		2.9	%		49	$	5,377	$	1.39

Weighted Average Retention		81.2	%

YEAR TO DATE 2013
New		93			3,050		-2.5	%		6.1	%		55	$	10,401	$	3.41
Renewal		131			5,977		-4.1	%		3.2	%		47		6,993		1.17
Development and redevelopment		6			1,223		N/A			N/A			80		N/A		N/A

Total/Weighted Average		230			10,250		-3.8	%		3.8	%		53	$	17,394	$	1.92

Weighted Average Retention		68.4	%

Lease Expirations for Consolidated Properties as of September 30, 2013⁽²⁾


Year	Square Feet Related to Expiring Leases		Annualized Base Rent of Expiring Leases⁽³⁾		Percentage of Total Annualized Base Rent
	(in thousands)		(in thousands)
2013⁽⁴⁾		1,331	$	6,545		2.5	%
2014		9,172		37,466		14.5	%
2015		10,892		44,508		17.2	%
2016		9,868		42,754		16.5	%
2017		8,443		35,619		13.8	%
Thereafter		18,034		92,077		35.5	%

Total occupied		57,740	$	258,969		100.0	%

Available or leased but not occupied		5,350

Total consolidated properties		63,090

(1)	Excludes month-to-month leases.

(2)	Assumes no exercise of lease renewal options.

(3)	Includes contractual rent changes.

(4)	Includes month-to-month leases.


Third Quarter 2013				Page 9
Supplemental Reporting Package

Acquisition and Disposition Summary

For the Nine Months Ended September 30, 2013


	Property Name	Market	Size		Occupancy at Acquisition/ Disposition			Occupancy at September 30, 2013
			(buildings in sq. ft)
BUILDING ACQUISITIONS:
March	Painter Avenue (2 buildings)	S. California		221,000		100.0	%		100.0	%
March	1375 Sampson Ave	S. California		125,000		100.0	%		100.0	%
March	Johnson Road (2 buildings)	Atlanta		154,000		81.3	%		100.0	%
April	3801 La Reunion	Dallas		271,000		100.0	%		92.7	%
May	TRT-DCT JV I Assets (7 buildings)⁽¹⁾	New Jersey, Pennsylvania, Atlanta, Chicago, Charlotte, N. California		1,918,000		71.7	%		99.6	%
May	4800 Central Avenue	Chicago		850,000		100.0	%		100.0	%
June	1950 Alpine Way	N. California		43,000		100.0	%		100.0	%
June	Bethlehem Crossing (3 buildings)	Pennsylvania		668,000		74.7	%		74.7	%
August	East Park 5	Seattle		39,000		100.0	%		100.0	%
August	5021 Statesman	Dallas		42,000		100.0	%		100.0	%
August	Broadway Industrial Park (3 buildings)	Phoenix		308,000		100.0	%		100.0	%

Total YTD Purchase Price - $220.7 million				4,639,000		84.0	%		95.8	%

LAND ACQUISITIONS:
May	Airtex II	Houston		6.6 acres		N/A			N/A
June/July	Northwest Crossroads	Houston		38.5 acres		N/A			N/A
August	DCT Jurupa Ranch⁽²⁾	S. California		45.4 acres		N/A			N/A
August	DCT Auburn 44	Seattle		2.5 acres		N/A			N/A

Total YTD Land Purchase Price - $37.0 million				93.0 acres

DISPOSITIONS:
January	Memphis Trade Center	Memphis		1,039,000		74.1	%		N/A
January	100 Interstate South	Atlanta		578,000		76.2	%		N/A
March	Trade Point III	Louisville		221,000		100.0	%		N/A
May	Shelby 18	Memphis		400,000		100.0	%		N/A
June	San Antonio Portfolio (13 buildings)	San Antonio		1,177,000		99.2	%		N/A
July	Dallas Portfolio (2 buildings)	Dallas		81,000		62.2	%		N/A

Total YTD Sales Price - $113.4 million				3,496,000		87.2	%

(1)	During May 2013, we purchased the remaining 96.4% interest in seven properties from TRT-DCT JV I and consolidated these properties as of September 30, 2013.

(2)	During August 2013, we purchased 45.4 acres that is leased as a non-industrial property and held for future development.


Third Quarter 2013				Page 10
Supplemental Reporting Package

Development Overview


												Costs Incurred
Project	Market	Acres			Number of Buildings		Square Feet		Percent Owned			Q3-2013		Cumulative at 9/30/13		Projected Investment		Completion Date		Percentage Leased
							(in thousands)					(in thousands)		(in thousands)		(in thousands)
Consolidated Development Activities:
Stabilized In Q3 2013
DCT Commerce Center at Pan American West (Building A)	Miami		7			1		167		100	%	$	6	$	14,077	$	14,077		Q1-2013		100	%
DCT Commerce Center at Pan American West (Building B)	Miami		7			1		167		100	%		462		12,357		12,357		Q2-2013		100	%
Rockdale Distribution Center - Expansion	Nashville		15			Expansion		225		100	%		309		7,599		7,599		Q3-2013		100	%

			29			2		559		100	%	$	777	$	34,033	$	34,033				100	%

Projected Stabilized Yield⁽¹⁾			8.7	%

Projects Under Development
Development Projects in Lease Up
DCT 55	Chicago		33			1		604		100	%	$	841	$	24,201	$	28,581		Q4-2012		66	%

			33			1		604		100	%	$	841	$	24,201	$	28,581				66	%

Under Construction
DCT Airtex Industrial Center	Houston		13			1		267		100	%	$	2,044	$	12,225	$	14,678		Q4-2013		0	%
DCT Beltway Tanner Business Park	Houston		11			1		136		100	%		1,960		9,551		15,375		Q4-2013		0	%
Slover Logistics Center I	So. California		28			1		652		100	%		8,310		34,679		36,876		Q4-2013		100	%
Slover Logistics Center II	So. California		28			1		610		100	%		2,933		19,131		37,323		Q1-2014		100	%
8th & Vineyard B	So. California		4			1		99		91	%		803		2,608		6,925		Q1-2014		0	%
DCT Sumner South Distribution Center	Seattle		9			1		190		100	%		3,053		6,570		13,075		Q1-2014		0	%
DCT White River Corporation Center Phase I	Seattle		30			1		649		100	%		8,114		20,619		42,979		Q2-2014		0	%
DCT Auburn 44	Seattle		3			1		49		100	%		2,223		2,223		4,545		Q1-2014		100	%

			126			8		2,652		100	%	$	29,440	$	107,606	$	171,776				49	%

Projects Under Development			159			9		3,256		100	%	$	30,281	$	131,807	$	200,357				53	%

Projected Stabilized Yield - Projects under development⁽¹⁾			7.3	%

Build to suit for sale
8th & Vineyard A	So. California		6			1		130		91	%	$	2,588	$	5,609	$	8,703		Q4-2013		N/A

			6			1		130		91	%	$	2,588	$	5,609	$	8,703

Pre-Development⁽²⁾
DCT River West	Atlanta		47							100	%	$	1,407	$	5,979
DCT Airtext Industrial Center II	Houston		7							100	%		101		1,383
DCT Northwest Crossroads Phase I	Houston		20							100	%		170		3,267
DCT Northwest Crossroads Phase II	Houston		19							100	%		1,230		3,001
DCT White River Corp. Center Phase II	Seattle		17							100	%		255		6,988
8th & Vineyard C	So. California		9							91	%		64		3,042
DCT Rialto Logistics Ctr.	So. California		42							100	%		391		20,705
DCT Jurupa Ranch	So. California		39							100	%		26,318		26,318

			200									$	29,936	$	70,683

⁽¹⁾	Computed with rents on a straight-line basis.

⁽²⁾	Excludes land held totaling approximately 137.5 acres with cumulative costs of approximately $17.9 million at September 30, 2013.


Third Quarter 2013				Page 11
Supplemental Reporting Package

Indebtedness

(dollar amounts in thousands)

As of September 30, 2013


Description	Stated Interest Rate			Effective Interest Rate			Maturity Date	Balance as of September 30, 2013
SENIOR UNSECURED NOTES:
2014 Notes, fixed rate⁽¹⁾		5.68	%		6.03	%	January 2014	$	50,000
2015 Notes, fixed rate		5.63	%		5.63	%	June 2015		40,000
2015 Notes, variable rate^(1),(2)		1.83	%		1.83	%	February 2015		175,000
2016 Notes, fixed rate		4.90	%		4.89	%	April & August 2016		99,000
2017 Notes, fixed rate		6.31	%		6.31	%	June 2017		51,000
2018 Notes, fixed rate		5.62	%		5.62	%	June & August 2018		81,500
2018 Notes, variable rate⁽²⁾		1.83	%		1.83	%	February 2018		225,000
2019 Notes, fixed rate		4.97	%		4.97	%	August 2019		46,000
2020 Notes, fixed rate		5.43	%		5.43	%	April 2020		50,000
2021 Notes, fixed rate		6.70	%		6.70	%	June & August 2021		92,500
2022 Notes, fixed rate		4.61	%		7.13	%	August & September 2022		130,000
2023 Notes, fixed rate		5.57	%		5.57	%	August 2023		35,000

								$	1,075,000

MORTGAGE NOTES:
Fixed rate secured debt		5.77	%		5.17	%	Oct. 2013–Aug. 2025		308,993
Premiums (discounts), net of amortization									5,735

								$	314,728

UNSECURED CREDIT FACILITY:
Senior unsecured revolving credit facility⁽³⁾		1.58	%		1.58	%	February 2017		52,000

Total carrying value of consolidated debt								$	1,441,728

Fixed rate debt		5.56	%		5.72	%			69	%
Variable rate debt		1.80	%		1.80	%			31	%

Weighted average interest rate		4.38	%		4.49	%			100	%

DCT PROPORTIONATE SHARE OF UNCONSOLIDATED JOINT VENTURE DEBT⁽⁴⁾
Institutional joint ventures								$	7,581
Stirling Capital Investments (SCLA)									36,850

								$	44,431

Scheduled Principal Payments of Debt as of September 30, 2013 (excluding premiums and discounts)


Year	Senior Unsecured Notes		Mortgage Notes		Unsecured Credit Facility		Total
2013	$	—	$	22,754	$	—	$	22,754
2014⁽¹⁾		50,000		11,445		—		61,445
2015⁽¹⁾		215,000		49,982		—		264,982
2016		99,000		61,184		—		160,184
2017		51,000		11,768		52,000		114,768
2018		306,500		6,412		—		312,912
2019		46,000		51,019		—		97,019
2020		50,000		65,056		—		115,056
2021		92,500		18,476		—		110,976
2022		130,000		3,304		—		133,304
Thereafter		35,000		7,593		—		42,593

Total	$	1,075,000	$	308,993	$	52,000	$	1,435,993

⁽¹⁾	In October 2013, in connection with the issuance of $275.0 million in aggregate principal amount of 10-year senior unsecured notes at 99.038% of face value, we used the net proceeds to repay the $50.0 million 2014 Notes and the $175.0 million 2015 Notes, which were pre-payable at par.

⁽²⁾

Each of the $175.0 million and $225.0 million term loan facilities bear interest at a variable rate equal to LIBOR, plus a margin of between 1.55% to 2.10% per annum, or, at our election, an alternate base rate plus a margin of between 0.55% to 1.10% per annum, depending on our consolidated leverage.

⁽³⁾

The $300.0 million senior unsecured revolving credit facility matures in February 2017 and bears interest at a variable rate equal to LIBOR, plus a margin of between 1.35% to 1.80% per annum or, at our election, an alternate base rate plus a margin of between 0.35% to 0.80% per annum, depending on our consolidated leverage. There was $248.0 million available under the unsecured revolving credit facility as September 30, 2013.

⁽⁴⁾	Based on our ownership share as of September 30, 2013.


Third Quarter 2013				Page 12
Supplemental Reporting Package

Capitalization and Fixed Charge Coverage

(unaudited, dollar amounts in thousands, except share price)

Capitalization at September 30, 2013


Description	Shares or Units ⁽¹⁾		Share Price		Market Value
	(in thousands)
Common shares outstanding		315,932	$	7.19	$	2,271,551
Operating partnership units outstanding		18,614	$	7.19		133,835

Total equity market capitalization						2,405,386

Consolidated debt						1,441,728
Less: Noncontrolling interests’ share of consolidated debt⁽²⁾						(9,240	)
Proportionate share of debt related to unconsolidated joint ventures						44,431

DCT share of total debt						1,476,919

Total market capitalization					$	3,882,305

DCT share of total debt to total market capitalization						38.0	%

Fixed Charge Coverage


	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Net income (loss) attributable to common stockholders⁽³⁾	$	(10,157	)	$	7,548		$	1,931		$	(14,240	)
Interest expense		15,141			17,299			47,328			51,898
Proportionate share of interest expense from unconsolidated joint ventures		398			765			1,257			2,366
Real estate related depreciation and amortization		34,732			30,934			101,593			94,676
Proportionate share of real estate related depreciation and amortization from unconsolidated joint ventures		1,478			1,708			4,440			5,773
Income tax (benefit) expense and other taxes		(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 real estate 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 premium/discount		(55	)		(317	)		(155	)		(809	)
Other noncash interest expense		(1,000	)		(524	)		(3,000	)		(1,026	)
Proportionate share of interest expense from 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⁾	Excludes 2.0 million unvested Long-Term Incentive Plan Units, 0.6 million shares of unvested Restricted Stock and 0.1 million unvested Phantom Shares outstanding as of September 30, 2013.

⁽²⁾	Amount includes the portion of consolidated debt related to properties in which there are noncontrolling ownership interests.

⁽³⁾	Includes amounts related to discontinued operations, where applicable.


Third Quarter 2013				Page 13
Supplemental Reporting Package

Investment in Unconsolidated Ventures Summary

(unaudited, dollar amounts in thousands)

Statements of Operations & Other Data


	For the Nine Months Ended September 30, 2013
	TRT- DCT JV I			TRT- DCT JV II			TRT- DCT JV III			JP Morgan			IDI/DCT			IDI/DCT Buford			Stirling Capital Investments
Total rental revenues	$	8,063		$	5,735		$	1,963		$	14,714		$	1,517		$	—		$	8,893
Rental expenses and real estate taxes		2,572			1,461			433			4,041			592			29			1,362

Net operating income (loss)		5,491			4,274			1,530			10,673			925			(29	)		7,531
Depreciation and amortization		3,740			2,391			705			7,439			1,259			—			3,691
General and administrative		24			12			52			573			6			6			677

Total expenses		6,336			3,864			1,190			12,053			1,857			35			5,730
Interest expense		(3,228	)		(2,423	)		(485	)		—			(492	)		—			(2,593	)
Interest and other income (expense)		(2,910	)		(10	)		8			27			(112	)		—			(25	)

Net income (loss)	$	(4,411	)	$	(562	)	$	296		$	2,688		$	(944	)	$	(35	)	$	545

Other Data:
Number of buildings		7			5			4			13			3			—			6
Square feet (in thousands)		1,642			1,744			735			4,605			1,423			—			2,160
Occupancy		100.0	%		99.6	%		100.0	%		94.5	%		53.0	%		0.0	%		98.5	%
DCT Ownership		3.6	%		11.4	%		10.0	%		20.0	%		50.0	%		75.0	%		50.0	%⁽¹⁾

Balance Sheets


	As of September 30, 2013
	TRT- DCT JV I			TRT- DCT JV II			TRT- DCT JV III			JP Morgan			IDI/DCT			IDI/DCT Buford		Stirling Capital Investments
Total investment in properties	$	95,068		$	92,836		$	25,818		$	279,380		$	56,594		$	7,347	$	111,134
Accumulated depreciation and amortization		(26,002	)		(22,259	)		(5,760	)		(59,963	)		(5,657	)		—		(15,783	)

Net investment in properties		69,066			70,577			20,058			219,417			50,937			7,347		95,351
Cash and cash equivalents		1,358			619			280			3,430			548			7		756
Other assets		1,794			2,033			349			5,719			878			3		3,701

Total assets	$	72,218		$	73,229		$	20,687		$	228,566		$	52,363		$	7,357	$	99,808

Other liabilities	$	2,358		$	1,785		$	511		$	6,404		$	508		$	123	$	295
Secured debt maturities – 2013		—			—			—			—			16,675	⁽⁵⁾		—		—
Secured debt maturities – 2014		—			39,725	⁽³⁾		—			—			—			—		—
Secured debt maturities – 2015		31,074	⁽²⁾		9,825	⁽³⁾		—			—			—			—		—
Secured debt maturities – 2016		—			—			8,331	⁽⁴⁾		—			—			—		—
Secured debt maturities thereafter		—			—			—			—			—			—		86,051	⁽⁶⁾

Total secured debt		31,074			49,550			8,331			—			16,675			—		86,051

Total liabilities		33,432			51,335			8,842			6,404			17,183			123		86,346
Partners or members’ capital		38,786			21,894			11,845			222,162			35,180			7,234		13,462

Total liabilities and Partners or members’ capital	$	72,218		$	73,229		$	20,687		$	228,566		$	52,363		$	7,357	$	99,808

⁽¹⁾	Although we contributed 100% of the initial cash equity capital required by the venture, after return of certain preferential distributions on capital invested, profits and losses are generally split 50/50.

⁽²⁾	$31.1 million of debt requires principal and interest payments through 2015 and has a stated interest rate of 5.9%.

⁽³⁾	$39.7 million of debt requires interest only payments until 2014 and has a stated interest rate of 6.2%. $9.8 million of debt requires principal and interest payments through 2015 and has a stated interest rate of 6.6%.

⁽⁴⁾	$8.3 million of debt requires principal and interest payments until 2016 and has a stated interest rate of 7.4%.

⁽⁵⁾	$16.7 million of debt requires interest only payments through October 2013 and has a variable interest rate of LIBOR plus 3.25%. DCT does not have any obligation under this debt.

⁽⁶⁾	$73.7 million of debt requires interest only payments through October 2017 and has a variable interest rate of LIBOR plus 2.2%. $12.4 million of debt is payable to DCT and requires principal and interest payments through November 2021 and has a fixed rate of 8.5%.


Third Quarter 2013				Page 14
Supplemental Reporting Package

Definitions

Adjusted EBITDA:

Adjusted EBITDA represents net loss attributable to common stockholders before interest, taxes, depreciation, amortization, stock-based compensation expense, impairment losses, loss on business combinations, noncontrolling interest, and proportionate share of interest, depreciation and amortization from unconsolidated joint ventures, and excludes non-FFO gains. 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.

Annualized Base Rent:

Annualized Base Rent is calculated as monthly contractual base rent (cash basis) per the terms of the lease, as of period end, multiplied by 12.

Capital Expenditures:

Capital expenditures include building and land improvements, development costs and acquisition capital, tenant improvement and leasing costs required to maintain current revenues and/or improve real estate assets.

Cash Basis Rent Growth:

Cash basis rent growth is the ratio of the change in base rent due in the first month after the lease commencement date compared to the base rent of the last month prior to the termination of the lease, excluding new leases where there were no prior comparable leases. Free rent periods are not considered.

Cash Net Operating Income:

We calculate Cash Net Operating Income as Net Operating Income (as defined below) excluding non-cash amounts recorded for straight-line rents including related bad debt expense and the amortization of above and below market rents. See definition of Net Operating Income for additional information. DCT Industrial considers Cash NOI to be an appropriate supplemental performance measure because Cash NOI reflects the operating performance of DCT Industrial’s properties and excludes certain non-cash items that are not considered to be controllable in connection with the management of the property such as accounting adjustments for straight-line rent and the amortization of above and below market rent. Additionally, DCT Industrial presents Cash NOI, excluding revenue from lease terminations, as such revenue is not considered indicative of recurring operating performance.

Due Diligence Capital:

Capital improvements related to acquisitions generally incurred within 12 months of the acquisition date.

Effective Interest Rate:

Reflects the impact to interest rates of GAAP adjustments for purchase price allocation and hedging transactions. These rates do not reflect the impact of other interest expense items such as fees and the amortization of loan costs.

Fixed Charges:

Fixed charges include interest expense, interest capitalized, our proportionate share of our unconsolidated joint venture interest expense and adjustments for amortization of discounts, premiums and loan costs.

Fixed Charge Coverage:

We calculate Fixed Charge Coverage as Adjusted EBITDA divided by total Fixed Charges.

Funds from Operations (“FFO”):

DCT Industrial believes that net income 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 measureable 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 as a measure of DCT Industrial’s performance.

GAAP:

United States generally accepted accounting principles.

GAAP Basis Rent Growth:

GAAP basis rent growth is a ratio of the change in monthly Net Effective Rent (on a GAAP basis, including straight-line rent adjustments as required by GAAP) compared to the Net Effective Rent (on a GAAP basis) of the comparable lease. New leases where there were no prior comparable leases, due to extended downtime or materially different lease structures, are excluded.

Net Effective Rent:

Average base rental rate over the term of the lease, calculated in accordance with GAAP.


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Supplemental Reporting Package

Definitions

Net Operating Income (“NOI”):

NOI is defined as rental revenues, including expense reimbursements, less rental expenses and real estate taxes, and excludes institutional capital management fees, depreciation, amortization, casualty and involuntary conversion gain (loss), 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. DCT Industrial considers NOI to be an appropriate supplemental performance measure because NOI reflects the operating performance of DCT Industrial’s properties and excludes certain items that are not considered to be controllable in connection with the management of the property such as amortization, depreciation, impairment, interest expense, interest income and general and administrative expenses. We also present NOI excluding lease termination revenue as it is not considered to be indicative of recurring operating performance. However, NOI should not be viewed as an alternative measure of DCT Industrial’s financial performance since it excludes expenses which could materially impact our results of operations. Further, DCT Industrial’s NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI. Therefore, DCT Industrial believes net income, as defined by GAAP, to be the most appropriate measure to evaluate DCT Industrial’s overall financial performance (in thousands).


	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Reconciliation of income (loss) from continuing operations to NOI:
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 joint ventures, 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 and amortization		32,990			27,512			95,071			81,983
Institutional capital management and other fees		(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 store properties		(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 lease terminations		45,836			44,645			133,169			129,130
Less straight-line rents, net of related bad debt expense		116			(1,374	)		(469	)		(4,443	)
Less amortization of above/(below) market rents, net		(326	)		(198	)		(838	)		(449	)

Same store cash net operating income, excluding revenue from lease terminations	$	45,626		$	43,073		$	131,862		$	124,238

Projected Stabilized Yield – Projects Under Development:

Calculated as projected stabilized Net Operating Income divided by total projected investment.

Ratio of Consolidated Debt to Book Value of Total Assets (Before Depreciation):

Calculated as (total consolidated debt) / (total assets with accumulated depreciation and amortization added back).

Redevelopment:

Represents assets acquired with the intention to reposition or redevelop. May include buildings taken out of service for redevelopment where we generally expect to spend more than 20% of the building’s book value on capital improvements, if applicable.

Retention:

Calculated as (retained square feet + relocated square feet) / ((retained square feet + relocated square feet + expired square feet) - (square feet of vacancies anticipated at acquisition + month-to-month square feet + bankruptcy square feet + early terminations)).

Sales Price:

Contractual price of real estate sold before closing adjustments.

Same Store Population:

The same store population is determined independently for each period presented, quarter-to-date and year-to-date, by including all consolidated operating properties and properties Held for Sale that have been owned and stabilized for the entire current and prior periods presented.


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Supplemental Reporting Package

Definitions

Same Store Net Operating Income Growth:

The change in same store net operating income growth is calculated by dividing the change in NOI, year over year, by the preceding period NOI, based on a same store population for the quarter most recently presented. A reconciliation of NOI and cash NOI by period is provided below; amounts are not restated for current period discontinued operations (in thousands).


	Consolidated operating data, as previously reported, for the three months ended:
	September 30, 2012			December 31, 2012			March 31, 2013			June 30, 2013			September 30, 2013
Reconciliation of income (loss) from continuing operations to NOI:
Income (loss) from continuing operations	$	(4,645	)	$	(2,183	)	$	(1,859	)	$	(3,750	)	$	1,409
Income tax (benefit) expense and other taxes		68			94			109			323			(60	)
Interest and other (income) expense		(194	)		62			(162	)		18			(82	)
Interest expense		17,299			17,504			16,860			15,327			15,141
Equity in earnings of unconsolidated joint ventures, net		(1,208	)		(303	)		(391	)		(571	)		(759	)
Development profit		—			(307	)		(268	)		—			—
Casualty gain (loss)		—			(1,413	)		(59	)		58			(294	)
General and administrative		6,838			6,928			6,420			7,449			6,120
Real estate related depreciation and amortization		30,862			30,984			32,615			33,531			32,990
Institutional capital management and other fees		(937	)		(916	)		(812	)		(707	)		(620	)

Total GAAP net operating income		48,083			50,450			52,453			51,678			53,845
Less net operating income (loss) - non-same store properties		(4,038	)		(4,471	)		(5,618	)		(7,507	)		(7,492	)

Same store GAAP net operating income		44,045			45,979			46,835			44,171			46,353
Less revenue from lease terminations		(186	)		(94	)		(115	)		(196	)		(517	)

Same store GAAP net operating income, excluding revenue from lease terminations		43,859			45,885			46,720			43,975			45,836
Less straight-line rents, net of related bad debt expense		(1,059	)		(997	)		(745	)		(119	)		116
Less amortization of above/(below) market rents, net		(91	)		(225	)		(282	)		(280	)		(326	)

Same store cash net operating income, excluding revenue from lease terminations	$	42,709		$	44,663		$	45,693		$	43,576		$	45,626


	Consolidated operating data, as previously reported, for the three months ended:
	September 30, 2011			December 31, 2011			March 31, 2012			June 30, 2012			September 30, 2012
Reconciliation of loss from continuing operations to NOI:
Income (loss) from continuing operations	$	(9,822	)	$	(4,872	)	$	(7,890	)	$	(8,018	)	$	(6,331	)
Income tax (benefit) expense and other taxes		(56	)		38			268			287			24
Interest and other (income) expense		356			53			(197	)		38			(70	)
Interest expense		16,515			17,247			16,930			17,540			17,299
Equity in (earnings) loss of unconsolidated joint ventures, net		967			(894	)		854			(430	)		(1,208	)
General and administrative		6,346			5,460			5,784			6,513			6,766
Real estate related depreciation and amortization		30,495			28,454			29,602			28,786			27,512
Impairment losses on investments in unconsolidated joint ventures		—			19			—			—			—
Casualty gains		—			(33	)		(83	)		(57	)		—
Institutional capital management and other fees		(1,004	)		(1,138	)		(1,055	)		(1,151	)		(937	)

Total GAAP net operating income		43,797			44,334			44,213			43,508			43,055
Less net operating (income) loss - non-same store properties		(845	)		(397	)		244			(225	)		1,776

Same store GAAP net operating income		42,952			43,937			44,457			43,283			44,831
Less revenue from lease terminations		(246	)		(179	)		(105	)		(110	)		(186	)

Same store GAAP net operating income, excluding revenue from lease terminations		42,706			43,758			44,352			43,173			44,645
Less straight-line rents, net of related bad debt expense		(1,657	)		(2,435	)		(1,849	)		(1,157	)		(1,374	)
Less amortization of above/(below) market rents, net		(102	)		(201	)		(183	)		(112	)		(198	)

Same store cash net operating income, excluding revenue from lease terminations	$	40,947		$	41,122		$	42,320		$	41,904		$	43,073

Change in GAAP same store NOI		2.7	%		4.9	%		5.3	%		1.9	%		2.7	%

Change in cash same store NOI		4.3	%		8.6	%		8.0	%		4.0	%		5.9	%


Third Quarter 2013				Page 17
Supplemental Reporting Package

Definitions

Square Feet:

Represents square feet in building that are available for lease.

Stabilized:

Buildings are generally considered stabilized when 90% occupied.

Stock-based Compensation Amortization Expense:

Represents the non-cash amortization of the cost of employee services received in exchange for an award of an equity instrument based on the award’s fair value on the grant date and amortized over the vesting period.

Total Project Investment:

An estimate of total expected capital expenditures on development properties in accordance with GAAP.

Turnover Costs:

Turnover costs are comprised of the costs incurred or capitalized for improvements of vacant and renewal spaces, as well as the commissions paid and costs capitalized for leasing transactions. The amount indicated for leasing statistics represents the total turnover costs expected to be incurred on the leases signed during the period and does not reflect actual expenditures for the period.


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Supplemental Reporting Package

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