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8-K - 8-K - DCT Industrial Trust Inc.d720122d8k.htm
EX-99.2 - EX-99.2 - DCT Industrial Trust Inc.d720122dex992.htm

Exhibit 99.1

 

LOGO    Press Release

FOR IMMEDIATE RELEASE:

DCT INDUSTRIAL TRUST INC. ® REPORTS

FIRST QUARTER 2014 RESULTS

FFO of $0.11 per Share in Q1

Signed Leases Totaling 4.4 Million Square Feet in Q1;

Rent Growth of 15.1 Percent on a GAAP Basis and 5.7 Percent on a Cash Basis

Same-Store NOI Growth of 0.6 Percent on a Cash Basis

Consolidated Operating Occupancy 92.8 Percent in Q1

Since January 1, 2014, Acquired 1.0 Million Square Feet for $49.7 Million

Sold 767,000 Square Feet for $38.8 Million

Completed Construction of 550,000 Square Feet of New Development

DENVER, May 1, 2014 – DCT Industrial Trust Inc.® (NYSE: DCT), a leading industrial real estate company, today announced financial results for the quarter ending March 31, 2014.

“DCT’s first quarter was a good start to 2014. We signed leases totaling 4.4 million square feet, including 1.4 million square feet of new leases, with rent growth of 15.1 percent on a GAAP basis and 5.7 percent on a cash basis,” said Phil Hawkins, Chief Executive Officer of DCT Industrial. “We also closed on $49.7 million of acquisitions since January 1 and our market teams have built a promising pipeline of additional deployment opportunities.”

Funds from operations, as adjusted, attributable to common stockholders and unitholders (“FFO”) for Q1 2014 totaled $39.0 million, or $0.11 per diluted share, compared with $33.3 million, or $0.11 per diluted share, for Q1 2013. These results exclude $0.7 million and $0.4 million of acquisition costs for the quarters ending March 31, 2014 and 2013, respectively.

Net income attributable to common stockholders for Q1 2014 was $0.3 million, or $0.00 per diluted share, compared to $1.3 million, or $0.00 per diluted share, reported for Q1 2013.

Property Results and Leasing Activity

As of March 31, 2014, DCT Industrial owned 405 consolidated operating properties, totaling 63.8 million square feet, with occupancy of 92.8 percent, a decrease of 50 basis points over Q4 2013 and an increase of 10 basis points over Q1 2013. On a same-portfolio basis, consolidated operating occupancy would have been 93.4 percent; however, the impact of acquisitions and placing developments and redevelopments into operations during the quarter brought occupancy down 60 basis points. In addition, approximately 860,000 square feet, or 1.3 percent of DCT Industrial’s total consolidated portfolio, was leased but not occupied at March 31, 2014.

In Q1 2014, the Company signed leases totaling 4.4 million square feet with rental rates increasing 15.1 percent on a GAAP basis and 5.7 percent on a cash basis, compared to the corresponding expiring leases. Over the previous four quarters, rental rates on signed leases increased 9.4 percent on a GAAP basis and 0.8 percent on a cash basis. The Company’s tenant retention rate was 80.8 percent in Q1 2014.


Net operating income (“NOI”) was $57.0 million in Q1 2014, compared with $48.4 million in Q1 2013. In Q1 2014 same-store NOI, excluding revenue from lease terminations, increased 0.6 percent on a cash basis and decreased 0.4 percent on a GAAP basis, when compared to Q1 2013. Same-store occupancy averaged 92.7 percent in Q1 2014, an increase of 40 basis points over Q1 2013. Same-store occupancy as of March 31, 2014 was 93.1 percent.

Investment Activity

Acquisitions

Since January 1, 2014, DCT Industrial acquired 7 buildings for $49.7 million. Totaling 1.0 million square feet, these buildings were 86.2 percent occupied at the time of closing. This includes the Company’s purchase of its partner’s 50 percent interest in a 100 percent leased building located in the Far West Suburbs submarket of Chicago, for an incremental investment of $10.3 million. The Company expects a year-one weighted-average cash yield of 5.5 percent and a weighted-average anticipated cash yield of 6.6 percent on the acquired assets.

The table below summarizes acquisitions since January 1, 2014:

 

Market

   Submarket    Square Feet      Occupancy     Closed      Anticipated
Yield*
 

Chicago, IL

   O’Hare      174,000         100.0     Jan-14         6.6

Dallas, TX

   DFW Airport      71,000         100.0     Jan-14         6.7

Seattle, WA

   Kent Valley      42,000         66.6     Feb-14         6.4

Chicago, IL

   I-80/Joliet Corridor      184,000         32.6     Mar-14         7.7

Seattle, WA

   Tacoma/Fife      56,000         100.0     Mar-14         6.2

Chicago, IL

   Far West Suburbs      363,000         100.0     Mar-14         5.5

Phoenix, AZ

   Tempe/Airport      110,000         100.0     Apr-14         6.9
     

 

 

    

 

 

      

 

 

 

Total/Weighted Average

        1,000,000         86.2        6.6

 

* Anticipated yield represents year-one cash yield for stabilized acquisitions and projected stabilized cash yield for value-add acquisitions.

Development/Redevelopment

In Q1, DCT Industrial acquired 6.4 acres in the DFW Airport submarket of Dallas for the future development of DCT Freeport North, a 95,000 square foot building and 8.6 acres in the Tacoma/Fife submarket of Seattle for the future development of DCT Fife 45, a two building development totaling 140,000 square feet.

Development highlights since January 1, 2014:

 

   

January 2014 – completed the construction and sale of 8th and Vineyard Building A, a 130,000 square foot build-to-suit located in the Inland Empire West submarket of Southern California.

 

   

January 2014 – completed the construction of 8th & Vineyard Building B, a 99,000 square foot building located in the Inland Empire West submarket of Southern California. The building is currently under contract for sale and is expected to close in Q2 2014.

 

   

February 2014 – completed the construction of DCT Beltway Tanner Business Park, a 133,000 square foot building located in the Northwest submarket of Houston. The multi-tenant building is currently 79 percent leased.

 

   

February 2014 – commenced construction on DCT Airtex Industrial Center II, a 125,000 square foot building located in the North submarket of Houston. The building is slated for completion in Q4 2014.

 

   

March 2014 – completed the construction of DCT Sumner South Distribution Center, a 188,000 square foot building located in the South Kent Valley submarket of Seattle.

 

2


   

April 2014 – commenced construction on DCT Airport Distribution Center North Building C, a 97,000 square foot building located in the Southeast submarket of Orlando. The building is slated for completion in Q4 2014.

Dispositions

Since January 1, 2014, the Company completed the disposition of five buildings totaling 767,000 square feet. These transactions generated total gross proceeds of $38.8 million and have an expected year-one weighted average cash yield of 7.5 percent.

The table below summarizes the dispositions since January 1, 2014:

 

Market    Submarket    Square Feet      Occupancy     Closed  

Southern California

   Inland Empire West      130,000         N/A        Jan-14   

Atlanta, GA

   Fulton      216,000         100.0     Apr-14   

Chicago, IL

   Southwest      87,000         100.0     Apr-14   

Chicago, IL

   Elgin North Kane County      112,000         100.0     Apr-14   

Chicago, IL

   Northern DuPage County      222,000         100.0     May-14   

Total/Weighted Average

        767,000         100.0  

In March 2014, the Company sold a 28.4 acre land parcel located in the Northwest submarket of Indianapolis for total gross proceeds of $1.1 million.

Additionally, as previously announced, in January 2014, two of DCT Industrial’s unconsolidated joint ventures sold all of their properties. The 12 properties, located in Atlanta, Central Pennsylvania, Cincinnati, Columbus, Dallas, Indianapolis and Minneapolis, totaled 3.4 million square feet, and generated net proceeds of approximately $6.6 million1 to DCT Industrial with an expected year-one weighted average cash yield of 6.8 percent.

Capital Markets

Since January 1, 2014, DCT Industrial raised $43.7 million in net proceeds from the sale of common stock through its “at the market” equity offering. The Company issued approximately 5.9 million shares at an average price of $7.50 per share. The proceeds were used for acquisitions, development activities and for general corporate purposes.

Dividend

DCT Industrial’s Board of Directors has declared a $0.07 per share quarterly cash dividend, payable on July 16, 2014 to stockholders of record as of July 3, 2014.

Guidance

The Company has maintained 2014 FFO guidance, as adjusted, of $0.45 to $0.48 per diluted share. Additionally, net income attributable to common stockholders and unitholders is expected to be between $0.02 and $0.05 per diluted share.

The Company’s FFO guidance excludes acquisition costs.

Conference Call Information

DCT Industrial will host a conference call to discuss Q1 2014 results on Friday, May 2, 2014 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, May 16, 2014 and can be accessed by dialing (877) 344-7529 or (412) 317-0088 and entering the passcode 10043750. 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 May 2, 2015.

 

1 

Based on DCT Industrial’s 7.2 percent ownership.

 

3


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. As of March 31, 2014, the Company owned interests in approximately 73.1 million square feet of properties leased to approximately 900 customers, including 8.6 million square feet operated on behalf of four institutional capital management partners. DCT maintains a Baa2 rating from Moody’s Investors Service and a BBB- from Standard & Poor’s Rating Services. Additional information is available at www.dctindustrial.com.

Click here to subscribe to Mobile Alerts for DCT Industrial.

CONTACT:

Melissa Sachs

DCT Industrial Trust Inc.

303-597-2400

investorrelations@dctindustrial.com

###

 

4


DCT INDUSTRIAL TRUST INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except share information)

 

     March 31,
2014
    December 31,
2013
 
     (unaudited)        

ASSETS

    

Land

   $ 892,927      $ 883,804   

Buildings and improvements

     2,665,717        2,615,879   

Intangible lease assets

     83,704        82,758   

Construction in progress

     85,054        88,610   
  

 

 

   

 

 

 

Total investment in properties

     3,727,402        3,671,051   

Less accumulated depreciation and amortization

     (680,140     (654,097
  

 

 

   

 

 

 

Net investment in properties

     3,047,262        3,016,954   

Investments in and advances to unconsolidated joint ventures

     101,198        124,923   
  

 

 

   

 

 

 

Net investment in real estate

     3,148,460        3,141,877   

Cash and cash equivalents

     17,025        32,226   

Restricted cash

     2,489        12,621   

Deferred loan costs, net

     9,704        10,251   

Straight-line rent and other receivables, net of allowance for doubtful accounts of $2,379 and $2,178, respectively

     50,596        46,247   

Other assets, net

     15,860        14,545   

Assets held for sale

     22,869        8,196   
  

 

 

   

 

 

 

Total assets

   $ 3,267,003      $ 3,265,963   
  

 

 

   

 

 

 

LIABILITIES AND EQUITY

    

Liabilities:

    

Accounts payable and accrued expenses

   $ 61,640      $ 63,281   

Distributions payable

     24,265        23,792   

Tenant prepaids and security deposits

     24,632        28,542   

Other liabilities

     6,257        10,122   

Intangible lease liability, net

     19,868        20,389   

Line of credit

     34,000        39,000   

Senior unsecured notes

     1,122,459        1,122,407   

Mortgage notes

     279,782        290,960   

Liabilities related to assets held for sale

     5,961        278   
  

 

 

   

 

 

 

Total liabilities

     1,578,864        1,598,771   
  

 

 

   

 

 

 

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, 500,000,000 shares authorized 326,919,283 and 320,265,949 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively

     3,270        3,203   

Additional paid-in capital

     2,558,730        2,512,024   

Distributions in excess of earnings

     (963,617     (941,019

Accumulated other comprehensive loss

     (29,688     (30,402
  

 

 

   

 

 

 

Total stockholders’ equity

     1,568,695        1,543,806   

Noncontrolling interests

     119,444        123,386   
  

 

 

   

 

 

 

Total equity

     1,688,139        1,667,192   
  

 

 

   

 

 

 

Total liabilities and equity

   $ 3,267,003      $ 3,265,963   
  

 

 

   

 

 

 

 

5


DCT INDUSTRIAL TRUST INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(unaudited, in thousands, except per share information)

 

     Three Months Ended  
      March 31,  
     2014     2013  

REVENUES:

    

Rental revenues

   $ 82,619      $ 67,309   

Institutional capital management and other fees

     764        812   
  

 

 

   

 

 

 

Total revenues

     83,383        68,121   
  

 

 

   

 

 

 

OPERATING EXPENSES:

    

Rental expenses

     12,402        8,349   

Real estate taxes

     13,197        10,579   

Real estate related depreciation and amortization

     36,433        30,196   

General and administrative

     6,834        6,339   

Impairment losses

     4,359        —     

Casualty and involuntary conversion gain

     —          (59
  

 

 

   

 

 

 

Total operating expenses

     73,225        55,404   
  

 

 

   

 

 

 

Operating income

     10,158        12,717   

OTHER INCOME (EXPENSE):

    

Development profit, net of taxes

     728        268   

Equity in earnings of unconsolidated joint ventures, net

     3,613        391   

Gain on acquisitions and dispositions of real estate interests

     2,045        —     

Interest expense

     (16,056     (16,860

Interest and other income

     28        162   

Income tax expense and other taxes

     (57     (109
  

 

 

   

 

 

 

Income (loss) from continuing operations

     459        (3,431

Income from discontinued operations

     9        5,067   
  

 

 

   

 

 

 

Consolidated net income of DCT Industrial Trust Inc.

     468        1,636   

Net income attributable to noncontrolling interests

     (151     (357
  

 

 

   

 

 

 

Net income attributable to common stockholders

     317        1,279   
  

 

 

   

 

 

 

Distributed and undistributed earnings allocated to participating securities

     (166     (173
  

 

 

   

 

 

 

Adjusted net income attributable to common stockholders

   $ 151      $ 1,106   
  

 

 

   

 

 

 

EARNINGS PER COMMON SHARE – BASIC

    

Income (loss) from continuing operations

   $ 0.00      $ (0.01

Income from discontinued operations

     0.00        0.01   
  

 

 

   

 

 

 

Net income attributable to common stockholders

   $ 0.00      $ 0.00   
  

 

 

   

 

 

 

EARNINGS PER COMMON SHARE – DILUTED

    

Income (loss) from continuing operations

   $ 0.00      $ (0.01

Income from discontinued operations

     0.00        0.01   
  

 

 

   

 

 

 

Net income attributable to common stockholders

   $ 0.00      $ 0.00   
  

 

 

   

 

 

 

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

    

Basic

     323,942        281,063   

Diluted

     324,994        281,063   
  

 

 

   

 

 

 

Distributions declared per common share

   $ 0.07      $ 0.07   

 

6


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 March 31,  
      2014     2013  

Reconciliation of net income attributable to common stockholders to FFO:

    

Net income attributable to common stockholders

   $ 317      $ 1,279   

Adjustments:

    

Real estate related depreciation and amortization

     36,433       32,690  

Equity in earnings of unconsolidated joint ventures, net

     (3,613     (391

Equity in FFO of unconsolidated joint ventures

     2,716       2,353  

Impairment losses on depreciable real estate

     4,491        —     

Gain on acquisitions and dispositions of real estate interests

     (2,045     (2,877

Gain on dispositions of non-depreciable real estate

     98       —     

Noncontrolling interest in the above adjustments

     (2,164     (2,323

FFO attributable to unitholders

     1,994        2,217  
  

 

 

   

 

 

 

FFO attributable to common stockholders and unitholders(1)

     38,227        32,948   
  

 

 

   

 

 

 

Adjustments:

    

Acquisition costs

     725       377  
  

 

 

   

 

 

 

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

   $ 38,952      $ 33,325   
  

 

 

   

 

 

 

FFO per common share and unit — basic and diluted

   $ 0.11     $ 0.11   
  

 

 

   

 

 

 

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

   $ 0.11     $ 0.11   
  

 

 

   

 

 

 

FFO weighted average common shares and units outstanding:

    

Common shares for earnings per share—basic

     323,942       281,063  

Participating securities

     2,228       2,250  

Units

     17,828       20,283  
  

 

 

   

 

 

 

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

     343,998       303,596  

Dilutive common stock equivalents

     1,052       813  
  

 

 

   

 

 

 

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

     345,050       304,409  
  

 

 

   

 

 

 

 

(1) 

Funds from Operations, FFO, as defined by the National Association of Real Estate Investment Trusts (NAREIT).

 

7


Guidance

The Company is providing the following guidance:

 

      Range for the Full-Year
2014
 
      Low      High  

Guidance:

     

Earnings per common share—diluted

   $ 0.02       $ 0.05   

Real estate related depreciation and amortization(1)

     0.41         0.41   

Impairment and acquisition costs

     0.02         0.02   
  

 

 

    

 

 

 

FFO, as adjusted, per common share and unit-diluted(2)

   $ 0.45       $ 0.48   
  

 

 

    

 

 

 

 

(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 months ended

March 31, 2014 and 2013 (in thousands):

 

      Three Months Ended
March 31,
 
     2014     2013  

Net income attributable to common stockholders(1)

   $ 317      $ 1,279   

Interest expense

     16,056       16,860  

Proportionate share of interest expense from unconsolidated joint ventures

     317       445  

Real estate related depreciation and amortization

     36,433       32,690  

Proportionate share of real estate related depreciation and amortization

from unconsolidated joint ventures

     1,466       1,489  

Income tax expense and other taxes

     89       109  

Stock-based compensation

     1,304       1,072  

Noncontrolling interests

     151       357  

Non-FFO gains on acquisitions and dispositions of real estate interests

     (2,045     (2,877
  

 

 

   

 

 

 

Adjusted EBITDA

   $ 54,088      $ 51,424   
  

 

 

   

 

 

 

CALCULATION OF FIXED CHARGES

    

Interest expense

   $ 16,056      $ 16,860   

Capitalized interest

     1,948       2,044  

Amortization of loan costs and debt premium/discount

     (113     (46

Other noncash interest expense

     (1,024     (1,000

Proportionate share of interest expense from unconsolidated joint ventures

     317       445  
  

 

 

   

 

 

 

Total fixed charges

   $ 17,184      $ 18,303   
  

 

 

   

 

 

 

Fixed charge coverage

     3.1        2.8   
  

 

 

   

 

 

 

 

(1) 

Includes amounts related to discontinued operations, when applicable.

 

8


The following table is a reconciliation of our reported income (loss) from continuing operations to our net operating income for the three months ended March 31, 2014 and 2013 (in thousands):

 

     Three Months Ended March 31,  
      2014     2013  

Reconciliation of income (loss) from continuing operations to NOI:

    

Income (loss) from continuing operations

   $ 459     $ (3,431

Income tax expense and other taxes

     57       109  

Interest and other income

     (28     (162

Interest expense

     16,056       16,860  

Equity in earnings of unconsolidated joint ventures, net

     (3,613     (391

General and administrative

     6,834       6,339  

Real estate related depreciation and amortization

     36,433       30,196  

Impairment losses

     4,359       —     

Development profit, net of taxes

     (728     (268

Gain on acquisitions and dispositions of real estate interests

     (2,045     —     

Casualty and involuntary conversion gain

     —          (59

Institutional capital management and other fees

     (764     (812
  

 

 

   

 

 

 

Total GAAP net operating income

     57,020       48,381  

Less net operating income—non-same store properties

     (8,557     (311
  

 

 

   

 

 

 

Same store GAAP net operating income

     48,463       48,070  

Less revenue from lease terminations

     (925     (115

Add early termination straight-line rent adjustment

     263       19  
  

 

 

   

 

 

 

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

     47,801       47,974  

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

     (878     (1,271

Less amortization of above/(below) market rents

     (350     (399
  

 

 

   

 

 

 

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

   $ 46,573     $ 46,304  
  

 

 

   

 

 

 

 

9


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.

 

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Forward-Looking Statements

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 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 development; 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 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.

 

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