DCT Industrial Trust Inc. - FORM 8-K - EX-99 - EX-99.2

Attached files

file	filename
8-K - FORM 8-K - DCT Industrial Trust Inc.	dct-8k_20141030.htm
EX-99 - EX-99.1 - DCT Industrial Trust Inc.	dct-ex99_201410306.htm

Exhibit 99.2


	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 Activity	9
Consolidated Lease Expirations	10
Acquisition and Disposition Summary	11
Development Overview	12
Indebtedness	13
Capitalization and Fixed Charge Coverage	14
Investment in Unconsolidated Ventures Summary	15
Definitions	16-18

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 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 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 2014

Supplemental Reporting Package

P a g e 1


	Quarterly Highlights

Portfolio Repositioning⁽¹⁾⁽⁵⁾

Portfolio Occupancy (%)⁽²⁾

Total Leasing Volume

(square feet, in millions)

Acquisitions and Dispositions⁽³⁾

($ in millions)

Top 10 Markets⁽⁴⁾⁽⁵⁾

Consolidated Operating

Market	ABR (thousands)		Occupancy Q3 2014			Occupancy⁽²⁾ Q3 2013			Change
Southern California	$	30,246		93.8	%		93.9	%		-0.1	%
Chicago		26,573		90.9	%		100.0	%		-9.1	%
Houston		21,123		97.6	%		96.8	%		0.8	%
Northern California		18,904		93.7	%		95.6	%		-1.9	%
Atlanta		18,088		89.9	%		84.3	%		5.6	%
Dallas		17,461		96.7	%		93.0	%		3.7	%
Pennsylvania		10,996		93.7	%		86.1	%		7.6	%
Seattle		10,499		98.0	%		94.4	%		3.6	%
Baltimore/Washington D.C.		10,456		94.1	%		94.0	%		0.1	%
Miami		10,227		99.8	%		98.8	%		1.0	%
Total/Weighted Average	$	174,573		93.7	%		93.2	%		0.5	%

⁽¹⁾	Percentages are based on annualized base rent as previously reported.

⁽²⁾	Prior period amounts are as previously reported.

⁽³⁾	Includes consolidated property acquisitions or dispositions.

⁽⁴⁾	Based on annualized base rent as of September 30, 2014. Occupancy is as of period end.

⁽⁵⁾	Includes assets held for sale.

Third Quarter 2014

Supplemental Reporting Package

P a g e 2

Consolidated Statements of Operations

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
REVENUES:
Rental revenues	$	84,285		$	73,111		$	250,206		$	209,744
Institutional capital management and other fees		322			619			1,394			2,139
Total revenues		84,607			73,730			251,600			211,883

OPERATING EXPENSES:
Rental expenses		9,672			8,779			31,507			26,073
Real estate taxes		13,288			11,032			40,196			33,218
Real estate related depreciation and amortization		37,842			32,843			111,545			94,634
General and administrative		6,727			6,120			21,059			19,823
Impairment losses		900			-			5,635			-
Casualty and involuntary conversion (gain) loss		14			(294	)		(326	)		(296	)
Total operating expenses		68,443			58,480			209,616			173,452
Operating income		16,164			15,250			41,984			38,431

OTHER INCOME (EXPENSE):
Development profit, net of taxes		-			-			2,016			268
Equity in earnings of unconsolidated joint ventures, net		892			759			5,202			1,721
Gain on business combination		-			-			1,000			-
Gain on dispositions of real estate interests		10,230			-			11,647			-
Interest expense		(16,078	)		(15,141	)		(48,316	)		(47,328	)
Interest and other income		1,577			83			1,582			310
Income tax benefit (expense) and other taxes		73			59			257			(373	)
Income (loss) from continuing operations		12,858			1,010			15,372			(6,971	)
Discontinued operations:
Operating income and other expenses		82			1,411			321			5,187
Gain (loss) on dispositions of real estate interests from discontinued operations		270			(13,204	)		5,255			4,304
Income (loss) from discontinued operations		352			(11,793	)		5,576			9,491
Consolidated net income (loss) of DCT Industrial Trust Inc.		13,210			(10,783	)		20,948			2,520
Net (income) loss attributable to noncontrolling interests		(801	)		626			(1,421	)		(589	)
Net income (loss) attributable to common stockholders		12,409			(10,157	)		19,527			1,931
Distributed and undistributed earnings allocated to participating securities		(171	)		(173	)		(507	)		(519	)
Adjusted net income (loss) attributable to common stockholders	$	12,238		$	(10,330	)	$	19,020		$	1,412

EARNINGS PER COMMON SHARE - BASIC
Income (loss) from continuing operations	$	0.04		$	0.00		$	0.04		$	(0.03	)
Income (loss) from discontinued operations		0.00			(0.03	)		0.02			0.03
Net income (loss) attributable to common stockholders	$	0.04		$	(0.03	)	$	0.06		$	0.00

EARNINGS PER COMMON SHARE - DILUTED
Income (loss) from continuing operations	$	0.04		$	0.00		$	0.04		$	(0.03	)
Income (loss) from discontinued operations		0.00			(0.03	)		0.02			0.03
Net income (loss) attributable to common stockholders	$	0.04		$	(0.03	)	$	0.06		$	0.00

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		333,562			304,768			328,908			292,352
Diluted		334,764			305,673			330,034			292,352

Third Quarter 2014

Supplemental Reporting Package

P a g e 3

Consolidated Balance Sheets

(amounts in thousands)

	September 30,			December 31,
	2014			2013
ASSETS:	(unaudited)
Operating properties	$	3,555,321		$	3,442,442
Properties under development		190,521			142,903
Properties under redevelopment		17,046			12,194
Properties in pre-development including land held		32,802			73,512
Total investment in properties		3,795,690			3,671,051
Less accumulated depreciation and amortization		(678,740	)		(654,097	)
Net investment in properties		3,116,950			3,016,954
Investments in and advances to unconsolidated joint ventures		99,229			124,923
Net investment in real estate		3,216,179			3,141,877
Cash and cash equivalents		26,326			32,226
Restricted cash		3,526			12,621
Deferred loan costs, net		8,584			10,251
Straight-line rent and other receivables, net		50,988			46,247
Other assets, net		18,084			14,545
Assets held for sale		115,446			8,196
Total assets	$	3,439,133		$	3,265,963

LIABILITIES AND EQUITY:
Accounts payable and accrued expenses	$	85,496		$	63,281
Distributions payable		24,807			23,792
Tenant prepaids and security deposits		26,378			28,542
Other liabilities		11,874			10,122
Intangible lease liabilities, net		22,791			20,389
Line of credit		132,000			39,000
Senior unsecured notes		1,122,566			1,122,407
Mortgage notes		286,290			290,960
Liabilities related to assets held for sale		3,373			278
Total liabilities		1,715,575			1,598,771
Total stockholders’ equity		1,606,886			1,543,806
Noncontrolling interests		116,672			123,386
Total liabilities and equity	$	3,439,133		$	3,265,963

Third Quarter 2014

Supplemental Reporting Package

P a g e 4

Funds from Operations

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Reconciliation of net income (loss) attributable to common stockholders to FFO:
Net income (loss) attributable to common stockholders	$	12,409		$	(10,157	)	$	19,527		$	1,931
Adjustments:
Real estate related depreciation and amortization		37,842			34,732			111,545			101,593
Equity in earnings of unconsolidated joint ventures, net		(892	)		(759	)		(5,202	)		(1,721	)
Equity in FFO of unconsolidated joint ventures		2,728			2,735			7,990			7,530
Impairment losses on depreciable real estate		900			13,279			5,767			13,279
Gain on business combination		-			-			(1,000	)		-
Gain on dispositions of real estate interests		(10,500	)		(75	)		(17,034	)		(17,614	)
Gain on dispositions of non-depreciable real estate		-			-			98			31
Noncontrolling interest in the above adjustments		(1,640	)		(3,227	)		(5,680	)		(7,066	)
FFO attributable to unitholders		2,103			2,320			6,153			6,602
FFO attributable to common stockholders and unitholders⁽¹⁾		42,950			38,848			122,164			104,565
Adjustments:
Acquisition costs		716			443			2,050			1,648
FFO, as adjusted, attributable to common stockholders and unitholders – basic and diluted	$	43,666		$	39,291		$	124,214		$	106,213

FFO per common share and unit — basic and diluted	$	0.12		$	0.12		$	0.35		$	0.33

FFO, as adjusted, per common share and unit — basic and diluted	$	0.12		$	0.12		$	0.36		$	0.34

FFO weighted average common shares and units outstanding:
Common shares for earnings per share - basic		333,562			304,768			328,908			292,352
Participating securities		2,485			2,526			2,400			2,445
Units		17,152			18,620			17,443			19,513
FFO weighted average common shares, participating securities and units outstanding – basic		353,199			325,914			348,751			314,310
Dilutive common stock equivalents		1,202			905			1,126			868
FFO weighted average common shares, participating securities and units outstanding – diluted		354,401			326,819			349,877			315,178

⁽¹⁾	Funds from operations, FFO, as defined by the National Association of Real Estate Investment Trusts (NAREIT).

Third Quarter 2014

Supplemental Reporting Package

P a g e 5

Selected Financial Data

(unaudited, amounts in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
NET OPERATING INCOME:⁽¹⁾
Rental revenues	$	84,285		$	73,111		$	250,206		$	209,744
Rental expenses and real estate taxes		(22,960	)		(19,811	)		(71,703	)		(59,291	)
Net operating income⁽²⁾	$	61,325		$	53,300		$	178,503		$	150,453

TOTAL CONSOLIDATED PROPERTIES:⁽³⁾
Square feet as of period end		65,770			63,090			65,770			63,090
Average occupancy		92.6	%		91.3	%		92.1	%		90.8	%
Occupancy as of period end		92.4	%		91.5	%		92.4	%		91.5	%

CONSOLIDATED OPERATING PROPERTIES:⁽³⁾
Square feet as of period end		64,945			62,201			64,945			62,201
Average occupancy		93.6	%		92.7	%		93.0	%		92.3	%
Occupancy as of period end		93.5	%		92.8	%		93.5	%		92.8	%

SAME STORE PROPERTIES:⁽⁴⁾
Square feet as of period end		55,331			55,331			51,264			51,264
Average occupancy		94.1	%		92.6	%		93.2	%		92.4	%
Occupancy as of period end		93.9	%		92.7	%		93.6	%		92.5	%

Rental revenues	$	71,995		$	68,823		$	200,549		$	193,159
Rental expenses and real estate taxes		(19,431	)		(18,913	)		(57,153	)		(54,906	)
Same store net operating income		52,564			49,910			143,396			138,253
Less: revenue from lease terminations		(260	)		(517	)		(1,161	)		(828	)
Add: early termination straight-line rent adjustment		59			57			420			310
Net operating income (excluding revenue from lease terminations)		52,363			49,450			142,655			137,735
Less: straight-line rents, net of related bad debt expense		(632	)		(720	)		(3,054	)		(2,053	)
Less: amortization of below market rents, net		(394	)		(404	)		(1,038	)		(1,184	)
Cash net operating income (excluding revenue from lease terminations)	$	51,337		$	48,326		$	138,563		$	134,498

Net operating income growth (excluding revenue from lease terminations)		5.9	%					3.6	%
Cash net operating income growth (excluding revenue from lease terminations)		6.2	%					3.0	%

SUPPLEMENTAL CONSOLIDATED CASH FLOW AND OTHER INFORMATION:
Straight-line rents - increase to revenue, net of related bad debt expense⁽³⁾	$	2,265		$	981		$	7,603		$	3,752
Straight-line rent receivable (balance sheet)⁽³⁾	$	46,787		$	41,361		$	46,787		$	41,361
Net amortization of below market rents – increase to revenue⁽³⁾	$	605		$	402		$	1,505		$	1,201
Capitalized interest	$	2,160		$	2,107		$	6,119		$	6,058
Noncash interest expense⁽³⁾	$	1,154		$	1,055		$	3,461		$	3,155
Stock-based compensation amortization	$	1,190		$	1,030		$	3,410		$	2,905
Revenue from lease terminations⁽³⁾	$	260		$	762		$	1,865		$	1,073
Bad debt expense, excluding bad debt expense related to straight-line rents⁽³⁾	$	167		$	357		$	956		$	876

CONSOLIDATED CAPITAL EXPENDITURES:⁽³⁾
Development	$	48,142		$	35,606		$	105,980		$	84,016
Redevelopment		926			1,170			1,640			4,338
Due diligence		2,335			1,876			6,070			4,731
Casualty expenditures		285			1,232			687			3,518
Building and land improvements		5,255			5,185			9,809			8,956
Tenant improvements and leasing costs		9,788			7,246			29,147			19,261
Total capital expenditures	$	66,731		$	52,315		$	153,333		$	124,820

⁽¹⁾	Excludes discontinued operations.

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

⁽³⁾	Includes discontinued operations and assets held for sale.

⁽⁴⁾	See the Definitions for same store properties.

Third Quarter 2014

Supplemental Reporting Package

P a g e 6

Property Overview

As of September 30, 2014

Markets	Number of Buildings		Square Feet		Percentage of Total Square Feet			Occupancy Percentage⁽¹⁾			Annualized Base Rent⁽²^{) (}³⁾				Annualized Base Rent per Occupied Square Foot			Percent of Total Annualized Base Rent
CONSOLIDATED OPERATING:			(in thousands)								(in thousands)
Atlanta		38		6,304		9.6	%		89.9	%		$	18,088			$	3.19		7.4	%
Baltimore/Washington D.C.		16		1,889		2.9	%		94.1	%			10,456				5.88		4.3	%
Charlotte		1		472		0.7	%		100.0	%			1,604				3.40		0.7	%
Chicago		38		8,992		13.7	%		90.9	%			26,573				3.25		10.9	%
Cincinnati		29		2,942		4.5	%		92.8	%			9,932				3.64		4.1	%
Columbus		12		3,480		5.3	%		97.9	%			8,800				2.58		3.6	%
Dallas		34		5,210		7.9	%		96.7	%			17,461				3.46		7.2	%
Denver		2		278		0.4	%		94.4	%			1,279				4.88		0.5	%
Houston		45		3,758		5.7	%		97.6	%			21,123				5.76		8.6	%
Indianapolis		7		2,299		3.5	%		85.4	%			6,242				3.18		2.6	%
Louisville		3		1,109		1.7	%		100.0	%			3,662				3.30		1.5	%
Memphis		8		3,712		5.6	%		88.4	%			9,034				2.75		3.7	%
Miami		10		1,362		2.1	%		99.8	%			10,227				7.53		4.2	%
Nashville		4		2,064		3.1	%		97.9	%			6,213				3.08		2.5	%
New Jersey		10		1,491		2.3	%		91.3	%			7,805				5.73		3.2	%
Northern California		28		3,920		6.0	%		93.7	%			18,904				5.15		7.7	%
Orlando		20		1,864		2.8	%		94.0	%			6,628				3.78		2.7	%
Pennsylvania		14		2,828		4.3	%		93.7	%			10,996				4.15		4.5	%
Phoenix		19		2,211		3.4	%		93.5	%			8,231				3.98		3.4	%
Seattle		19		2,100		3.2	%		98.0	%			10,499				5.10		4.3	%
Southern California⁽⁴⁾		44		6,660		10.1	%		93.8	%			30,246				4.84		12.4	%
Total/weighted average - operating properties		401		64,945		98.8	%		93.5	%			244,003				4.02		100.0	%

REDEVELOPMENT PROPERTIES:
Chicago		1		228		0.3	%		5.6	%		N/A⁽⁵⁾				N/A⁽⁵⁾			0.0	%
Houston		1		98		0.1	%		0.0	%			-				-		0.0	%
Total/weighted average – redevelopment properties		2		326		0.4	%		3.9	%			-				-		0.0	%

DEVELOPMENT PROPERTIES:
Houston⁽⁶⁾		3		311		0.5	%		0.0	%			-				-		0.0	%
Seattle		1		188		0.3	%		0.0	%			-				-		0.0	%
Total/weighted average – development properties		4		499		0.8	%		0.0	%			-				-		0.0	%

Total/weighted average - consolidated properties		407		65,770		100.0	%		92.4	%		$	244,003	⁽⁷⁾		$	4.02		100.0	%

See footnotes on next page.

Third Quarter 2014

Supplemental Reporting Package

P a g e 7

Property Overview

(continued)

As of September 30, 2014

Markets	Number of Buildings	Percent Owned⁽⁸⁾			Square Feet		Percentage of Total Square Feet			Occupancy Percentage⁽¹⁾			Annualized Base Rent⁽²⁾		Annualized Base Rent per Occupied Square Foot		Percent of Total Annualized Base Rent
UNCONSOLIDATED OPERATING PROPERTIES:					(in thousands)								(in thousands)
IDI (Nashville and Savannah)	2		50.0	%		1,060		12.4	%		84.3	%	$	2,311	$	2.59		8.0	%
Southern California Logistics Airport⁽⁹⁾	6		50.0	%		2,160		25.2	%		99.6	%		7,958		3.70		27.4	%
Total/weighted average – unconsolidated operating properties	8		50.0	%		3,220		37.6	%		94.6	%		10,269		3.37		35.4	%

OPERATING PROPERTIES IN CO-INVESTMENT VENTURES:
Chicago	2		20.0	%		1,033		12.1	%		100.0	%		3,584		3.47		12.3	%
Cincinnati	1		20.0	%		543		6.4	%		100.0	%		1,656		3.05		5.7	%
Dallas	1		20.0	%		540		6.3	%		100.0	%		1,408		2.61		4.9	%
Denver	5		20.0	%		772		9.0	%		100.0	%		3,742		4.84		12.9	%
Louisville	4		10.0	%		736		8.6	%		100.0	%		2,365		3.21		8.2	%
Nashville	2		20.0	%		1,020		11.9	%		100.0	%		2,768		2.71		9.5	%
Orlando	2		20.0	%		696		8.1	%		100.0	%		3,224		4.63		11.1	%
Total/weighted average – co-investment operating properties	17		18.6	%		5,340		62.4	%		100.0	%		18,747		3.51		64.6	%
Total/weighted average – unconsolidated properties	25		30.4	%		8,560		100.0	%		98.0	%	$	29,016	$	3.46		100.0	%

⁽¹⁾	Based on leases commenced as of September 30, 2014.

⁽²⁾	Annualized base rent is calculated as monthly contractual base rent (cash basis) per the terms of the lease, as of September 30, 2014, multiplied by 12.

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

⁽⁴⁾	As of September 30, 2014, our ownership interest in the Southern California properties was 93.7% based on our equity ownership weighted by square feet.

⁽⁵⁾	The lease is month-to-month and can be terminated by us with written notice. The rental income is incidental revenue and it is not recognized as income and is a reduction to our cost of redevelopment.

⁽⁶⁾	Includes two shell complete buildings acquired during July 2014 totaling 178,000 square feet.

⁽⁷⁾	Excludes total annualized base rent associated with tenants currently in free rent periods of $10.5 million based on the first month’s cash base rent.

⁽⁸⁾	Percent owned is based on equity ownership weighted by square feet.

⁽⁹⁾	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 2014

Supplemental Reporting Package

P a g e 8

Consolidated Leasing Activity

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
THIRD QUARTER 2014				(in thousands)								(in months)		(in thousands)
New		34			1,272		8.3	%		15.6	%		48	$		4,020	$		3.16
Renewal		35			1,470		3.8	%		11.1	%		35			2,602			1.77
Development and redevelopment		3			132	N/A			N/A				115		N/A			N/A
Total/Weighted Average		72			2,874		5.7	%		12.9	%		46	$		6,621	$		2.42
Weighted Average Retention		69.0	%

YEAR TO DATE 2014
New		103			4,172		5.6	%		12.3	%		56	$		15,562	$		3.73
Renewal		104			6,489		4.8	%		12.8	%		52			13,302			2.05
Development and redevelopment		7			427	N/A			N/A				106		N/A			N/A
Total/Weighted Average		214			11,088		5.1	%		12.6	%		56	$		28,864	$		2.71
Weighted Average Retention		77.9	%

FOUR QUARTERS ROLLING
New		132			5,195		6.1	%		14.0	%		56	$		18,390	$		3.54
Renewal		142			8,785		4.6	%		12.7	%		51			14,935			1.70
Development and redevelopment		9			695	N/A			N/A				94		N/A			N/A
Total/Weighted Average		283			14,675		5.1	%		13.1	%		55	$		33,325	$		2.38
Weighted Average Retention		79.3	%

⁽¹⁾	Excludes month-to-month leases.

⁽²⁾	Assumes no exercise of lease renewal options.

Third Quarter 2014

Supplemental Reporting Package

P a g e 9

Consolidated Lease Expirations

Lease Expirations for Consolidated Properties by Market⁽¹⁾


	2014⁽²⁾					2015					2016
Markets	Square Feet		Percentage of Total Square Feet			Square Feet		Percentage of Total Square Feet			Square Feet		Percentage of Total Square Feet
	(in thousands)					(in thousands)					(in thousands)
Atlanta		30		0.5	%		976		15.5	%		910		14.4	%
Baltimore/Washington D.C.		55		2.9	%		294		15.6	%		349		18.5	%
Charlotte		-		0.0	%		-		0.0	%		-		0.0	%
Chicago		421		4.7	%		656		7.3	%		1,569		17.4	%
Cincinnati		55		1.9	%		708		24.1	%		402		13.7	%
Columbus		164		4.7	%		842		24.2	%		473		13.6	%
Dallas		64		1.2	%		1,042		20.0	%		646		12.4	%
Denver		6		2.2	%		23		8.3	%		156		56.1	%
Houston		58		1.5	%		424		11.3	%		294		7.8	%
Indianapolis		38		1.7	%		301		13.1	%		275		12.0	%
Louisville		-		0.0	%		200		18.0	%		100		9.0	%
Memphis		70		1.9	%		156		4.2	%		1,170		31.5	%
Miami		70		5.1	%		93		6.8	%		164		12.0	%
Nashville		-		0.0	%		278		13.5	%		-		0.0	%
New Jersey		-		0.0	%		189		12.7	%		302		20.3	%
Northern California		56		1.4	%		468		11.9	%		591		15.1	%
Orlando		-		0.0	%		279		15.0	%		499		26.8	%
Pennsylvania		347		12.3	%		892		31.5	%		497		17.6	%
Phoenix		134		6.1	%		123		5.6	%		219		9.9	%
Seattle		109		5.2	%		368		17.5	%		136		5.9	%
Southern California		216		3.2	%		657		9.9	%		1,940		29.1	%
Total		1,893		2.9	%		8,969		13.8	%		10,692		16.5	%

Lease Expirations for Consolidated Properties Summarized⁽¹⁾

Year	Square Feet Related to Expiring Leases			Annualized Base Rent of Expiring Leases⁽³⁾		Percent of Total Annualized Base Rent
	(in thousands)			(in thousands)
2014⁽²⁾		1,893	$		9,811		3.6	%
2015		8,969			35,777		12.9	%
2016		10,692			45,547		16.5	%
2017		10,785			43,477		15.7	%
2018		6,962			32,201		11.6	%
Thereafter		21,459			109,871		39.7	%
Total occupied		60,760	$		276,684		100.0	%
Available or leased but not occupied		5,010
Total consolidated properties		65,770

⁽¹⁾	Assumes no exercise of lease renewal options.

⁽²⁾	Includes month-to-month leases.

⁽³⁾	Annualized based rent includes contractual rents in effect at the date of expiration.

Third Quarter 2014

Supplemental Reporting Package

P a g e 10

Acquisition and Disposition Summary

For the Nine Months Ended September 30, 2014

	Property Name	Market	Size		Occupancy at Acquisition/ Disposition			Occupancy at September 30, 2014
BUILDING ACQUISITIONS:			(building in sq.) ft)
January	1501 Michael Drive	Chicago		174,000		100.0	%		100.0	%
January	511 S. Royal	Dallas		71,000		100.0	%		100.0	%
February	8041 S. 228th Street	Seattle		42,000		66.6	%		66.6	%
March	3401 S. Chicago Street	Chicago		184,000		32.6	%		40.7	%
March	Fife 45	Seattle		56,000		100.0	%		100.0	%
March	Prairie Point West⁽¹⁾	Chicago		363,000		100.0	%		100.0	%
April	3405-3445 South 5th Street	Phoenix		110,000		100.0	%		100.0	%
May	1165 Crossroads Parkway	Chicago		472,000		77.3	%		90.0	%
May	Puyallup Industrial Park (3 buildings)	Seattle		235,000		97.6	%		97.6	%
June	6400 Hollister Road	Houston		222,000		100.0	%		100.0	%
July	Fairbanks 8 (2 buildings)	Houston		178,000		0.0	%		0.0	%
August	1450 Remington Blvd	Chicago		650,000		100.0	%		100.0	%
August	7050 Bennington	Houston		98,000		0.0	%		0.0	%
August	777 Mark Street	Chicago		228,000		5.6	%		5.6	%
September	1550 N. Chrisman Road	No. California		750,000		100.0	%		100.0	%
September	2091 Rutherford Road	So. California		111,000		43.7	%		43.7	%
September	1725 Puyallup Street	Seattle		120,000		100.0	%		100.0	%
Total YTD Purchase Price - $249.6 million				4,064,000		80.2	%		82.0	%

LAND ACQUISITIONS:
January	DCT Freeport North	Dallas	6.4 acres
March	DCT Fife North and DCT Fife South	Seattle	8.6 acres
May	DCT Fife Distribution Center	Seattle	21.0 acres
May	DCT Frankford Trade Center	Dallas	6.2 acres
September	DCT O'Hare Logistics Center	Chicago	6.9 acres
September	DCT Chrin Commerce Centre	Pennsylvania	36.0 acres
Total YTD Land Purchase Price - $19.7 million			85.1 acres

BUILDING DISPOSITIONS:
January	8th & Vineyard A⁽²⁾	So. California		130,000	N/A
April	4300 Westpark Drive	Atlanta		216,000		100.0	%
April	5300 W. 123rd Place	Chicago		87,000		100.0	%
April	195 Corporate Drive	Chicago		112,000		100.0	%
May	4175 Chandler Drive	Chicago		222,000		100.0	%
June	8th & Vineyard B⁽³⁾	So. California		99,000	N/A
June	2831 Peterson Place	Atlanta		20,000		59.4	%
July	116 Lehigh Drive	New Jersey		107,000		100.0	%
July	Mid-Atlantic I-95 Portfolio – Harford (3 buildings)	Baltimore/ Washington D.C.		347,000		100.0	%
July	Mid-Atlantic I-95 Portfolio – Newcastle (2 buildings)	New Jersey		275,000		97.1	%
July	Mid-Atlantic I-95 Portfolio – Delaware (2 buildings)	New Jersey		160,000		96.9	%
August	814 Livingston Court	Atlanta		52,000		0.0	%
August	Port Union Commerce Park⁽⁴⁾ (2 buildings)	Cincinnati		840,000		100.0	%
August	1141 108th Street	Dallas		21,000		0.0	%
Total YTD Sales Price - $145.3 million				2,688,000		96.2	%

LAND DISPOSITIONS:
March	Boone Industrial Park	Indianapolis	28.4 acres
Total YTD Sales Price - $1.1 million			28.4 acres

⁽¹⁾	During March 2014, we purchased our partner’s 50.0% interest in one property from the IDI-DCT joint venture for $10.3 million.

⁽²⁾	During January 2014, we completed the build-to-suit and sold 8th & Vineyard A, a 130,000 square foot building located in the Inland Empire West submarket of Southern California.

⁽³⁾	During June 2014, we sold the development project 8th & Vineyard B, a 99,000 square foot building located in the Inland Empire West submarket of Southern California.

⁽⁴⁾	During August 2014, we sold two buildings and 46 acres of undeveloped land adjacent to the buildings.

Third Quarter 2014

Supplemental Reporting Package

P a g e 11

Development Overview

As of September 30, 2014

											Costs Incurred
Project	Market	Acres			Number of Buildings	Square Feet		Percent Owned			Q3-2014		Cumulative Costs at 9/30/2014		Projected Investment		Completion Date⁽³⁾	Percent Leased⁽⁵⁾
						(in thousands)					(in thousands)		(in thousands)		(in thousands)
Consolidated Development Activities:

Projects Under Development

Development Projects in Lease Up⁽⁶⁾
DCT Beltway Tanner Business Park	Houston	11			1	133			100	%	$	3,042	$	14,097	$	15,690	Q1-2014		100	%
DCT Sumner South Distribution Center	Seattle	9			1	188			100	%		802		11,414		13,252	Q1-2014		56	%
	Total	20			2		321		100	%	$	3,844	$	25,511	$	28,942			74	%
Under Construction
DCT River West	Atlanta	47			1	733			100	%	$	2,485	$	9,527	$	29,644	Q1-2015		0	%
DCT Freeport North	Dallas	6			1	100			100	%		1,937		3,516		6,969	Q4-2014		0	%
DCT Frankford Trade Center	Dallas	6			1	82			100	%		2,273		3,412		6,155	Q1-2015		0	%
DCT Airtex Industrial Center II	Houston	7			1	125			100	%		1,786		5,859		9,882	Q4-2014		0	%
DCT Northwest Crossroads Logistics Centre I	Houston	21			1	362			100	%		3,767		10,865		20,751	Q4-2014		53	%
DCT Northwest Crossroads Logistics Centre II	Houston	18			1	320			100	%		881		3,896		18,410	Q1-2015		0	%
DCT Airport Distribution Center North Building C	Orlando	8			1	97			100	%		1,457		4,715		6,693	Q4-2014		0	%
DCT Chrin Commerce Centre	Pennsylvania	36			1	426			100	%		7,583		7,583		25,816	Q2-2015		0	%
DCT White River Corporate Center Phase I	Seattle	30			1	649			100	%		4,593		38,353		43,036	Q1-2015		0	%
DCT White River Corporate Center Phase II South	Seattle	4			1	63			100	%		1,214		2,581		5,095	Q1-2015		0	%
DCT Fife 45 North	Seattle	5			1	79			100	%		1,500		2,800		7,049	Q1-2015		0	%
DCT Fife 45 South	Seattle	4			1	64			100	%		782		1,799		5,654	Q1-2015		0	%
8th & Vineyard D	So. California	4			1	64			91	%		1,003		2,691		5,937	Q1-2015		0	%
DCT Rialto Logistics Center	So. California	42			1	928			100	%		12,856		48,706		59,755	Q4-2014		0	%
	Total	238			14		4,092		100	%	$	44,117	$	146,303	$	250,846			5	%

Projects Under Development		258			16		4,413		100	%	$	47,961	$	171,814	$	279,788			10	%
Projected Stabilized Yield - Projects Under Development⁽¹⁾			7.5	%

Development Projects for Sale
8th & Vineyard C	So. California	3			1	55			91	%	$	425	$	1,814	$	4,942	Q1-2015	N/A
8th & Vineyard E	So. California	2			1	40			91	%		809		1,831		3,737	Q1-2015	N/A
	Total	5			2	95			91	%	$	1,234	$	3,645	$	8,679

Pre-Development⁽²⁾
DCT O'Hare Logistics Center	Chicago	7							100	%	$	4,178	$	4,178
Seneca Commerce Center Phase I	Miami	14							90	%		56		1,736
Seneca Commerce Center Phase II	Miami	11							90	%		31		1,429
Seneca Commerce Center Phase III	Miami	11							90	%		29		1,331
DCT White River Corporate Center Phase II North	Seattle	13							100	%		227		6,555
DCT Fife Distribution Center North	Seattle	9							100	%		631		3,507
DCT Fife Distribution Center South	Seattle	12							100	%		1,174		4,955
DCT Jurupa Ranch⁽⁴⁾	So. California	39							100	%		502		26,969
	Total	116									$	6,828	$	50,660

⁽¹⁾	Yield computed on a GAAP basis including rents on a straight-line basis.

⁽²⁾	Excludes land held totaling 56 acres with cumulative costs of approximately $9.1 million at September 30, 2014.

⁽³⁾	The completion date represents the date of building shell completion or estimated date of shell completion.

⁽⁴⁾	The property is currently leased through December 2014.

⁽⁵⁾	Percentage leased is computed as of the press release date.

⁽⁶⁾	During July 2014, DCT acquired two buildings totaling 178,000 square feet that were shell complete. The buildings are classified as properties under development with cumulative costs of $15.1 million as of September 30, 2014.

Third Quarter 2014

Supplemental Reporting Package

P a g e 12

Indebtedness

(dollar amounts in thousands)

As of September 30, 2014

Description	Stated Interest Rate		Effective Interest Rate		Maturity Date		Balance as of September 30, 2014
SENIOR UNSECURED NOTES:
2015 Notes, fixed rate		5.63%		5.63%	June 2015	$		40,000
2016 Notes, fixed rate		4.90%		4.90%	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
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		4.62%		4.87%	August & October 2023			310,000
Premiums (discounts), net of amortization								(2,434	)
								897,566
MORTGAGE NOTES:
Fixed rate secured debt		5.83%		5.17%	January 2015 – Aug. 2025			281,413
Premiums (discounts), net of amortization								4,877
								286,290
BANK UNSECURED CREDIT FACILITIES:
Senior unsecured revolving credit facility⁽¹⁾		1.33%		1.33%	February 2017			132,000
2018 Notes, variable rate⁽²⁾		1.50%		1.50%	February 2018			225,000
								357,000

Total carrying value of consolidated debt						$		1,540,856

Fixed rate debt		5.32%		5.50%				77	%
Variable rate debt		1.44%		1.44%				23	%
Weighted average interest rate		4.42%		4.56%				100	%

DCT PROPORTIONATE SHARE OF UNCONSOLIDATED JOINT VENTURE DEBT⁽³⁾
Institutional joint ventures						$		820
IDI								11,110
Stirling Capital Investments (SCLA)								36,395
						$		48,325

Scheduled Principal Payments of Debt as of September 30, 2014 (excluding premiums and discounts)

Year		Senior Unsecured Notes			Mortgage Notes			Bank Unsecured Credit Facilities			Total
2014	$		-	$		1,720	$		-	$		1,720
2015			40,000			50,200			-			90,200
2016			99,000			56,965			-			155,965
2017			51,000			15,406			132,000			198,406
2018			81,500			6,583			225,000			313,083
2019			46,000			51,203			-			97,203
2020			50,000			69,946			-			119,946
2021			92,500			18,475			-			110,975
2022			130,000			3,303			-			133,303
2023			310,000			6,363			-			316,363
Thereafter			-			1,249			-			1,249
Total	$		900,000	$		281,413	$		357,000	$		1,538,413

⁽¹⁾

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 1.00% to 1.75% per annum or, at our election, an alternate base rate plus a margin of between 0.00% to 0.75% per annum, depending on our public debt credit rating. There was $164.5 million available under the senior unsecured revolving credit facility, net of a $3.5 million letter of credit as September 30, 2014.

⁽²⁾

The $225.0 million term loan facility, which is presented in “Senior unsecured notes” in our Consolidated Balance Sheets, bears interest at a variable rate equal to LIBOR, plus a margin of between 1.10% to 2.05% per annum, or, at our election, an alternate base rate plus a margin of between 0.10% to 1.05% per annum, depending on our public debt credit rating.

⁽³⁾	Based on our ownership share as of September 30, 2014.

Third Quarter 2014

Supplemental Reporting Package

P a g e 13

Capitalization and Fixed Charge Coverage

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

Capitalization at September 30, 2014

Description	Shares or Units ⁽¹⁾			Share Price			Market Value
	(in thousands)
Common shares outstanding		335,053	$		7.51	$		2,516,248
Operating partnership units outstanding		17,170	$		7.51			128,947
Total equity market capitalization								2,645,195

Consolidated debt								1,540,856
Less: Noncontrolling interests’ share of consolidated debt⁽²⁾								(8,691	)
Proportionate share of debt related to unconsolidated joint ventures								48,325
DCT share of total debt								1,580,490
Total market capitalization						$		4,225,685

DCT share of total debt to total market capitalization								37.4	%

Fixed Charge Coverage

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net income (loss) attributable to common stockholders⁽³⁾	$	12,409		$	(10,157	)	$	19,527		$	1,931
Interest expense		16,078			15,141			48,316			47,328
Proportionate share of interest expense from unconsolidated joint ventures		369			398			1,047			1,257
Real estate related depreciation and amortization		37,842			34,732			111,545			101,593
Proportionate share of real estate related depreciation and amortization from unconsolidated joint ventures		1,344			1,478			4,155			4,440
Income tax (benefit) expense and other taxes		(73	)		(42	)		(225	)		390
Stock-based compensation		1,190			1,030			3,410			2,905
Noncontrolling interests		801			(626	)		1,421			589
Non-FFO gain on business combination		-			-			(1,000	)		-
Non-FFO gain on dispositions of real estate interests		(10,500	)		(75	)		(16,936	)		(17,583	)
Impairment losses		900			13,279			5,767			13,279
Adjusted EBITDA	$	60,360		$	55,158		$	177,027		$	156,129

CALCULATION OF FIXED CHARGES
Interest expense	$	16,078		$	15,141		$	48,316		$	47,328
Capitalized interest		2,160			2,107			6,119			6,058
Amortization of loan costs and debt premium/discount		(127	)		(55	)		(383	)		(155	)
Other noncash interest expense		(1,027	)		(1,000	)		(3,078	)		(3,000	)
Proportionate share of interest expense from unconsolidated joint ventures		369			398			1,047			1,257
Total fixed charges	$	17,453		$	16,591		$	52,021		$	51,488

Fixed charge coverage		3.5			3.3			3.4			3.0

⁽¹⁾	Excludes 1.8 million shares of unvested Long-Term Incentive Plan Units, 0.6 million shares of unvested Restricted Stock and 0.3 million Phantom Shares outstanding as of September 30, 2014.

⁽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 2014

Supplemental Reporting Package

P a g e 14

Investment in Unconsolidated Ventures Summary

(unaudited, dollar amounts in thousands)

Statement of Operations and Other Data

	For the Nine Months Ended September 30, 2014
	TRT-DCT JV III			JP Morgan			IDI/DCT			IDI/DCT Buford			Stirling Capital Investments
Total rental revenues	$	2,103		$	16,422		$	2,230		$	-		$	9,068
Rental expenses and real estate taxes		455			4,195			557			-			1,430
Net operating income		1,648			12,227			1,673			-			7,638
Depreciation and amortization		695			7,378			1,400			-			3,681
General and administrative		5			553			4			-			821
Operating income		948			4,296			269			-			3,136
Interest expense		478			-			519			-			2,551
Interest and other expense		11			3			41			-			6
Net income (loss)	$	459		$	4,293		$	(291	)	$	-		$	579
Other Data:
Number of buildings		4			13			2			-			6
Square feet (in thousands)		735			4,605			1,060			-			2,160
Occupancy		100.0	%		99.6	%		84.3	%		0.0	%		99.6	%
DCT ownership		10.0	%		20.0	%		50.0	%		75.0	%		50.0	%	⁽¹⁾

Balance Sheets

	As of September 30, 2014
	TRT-DCT JV III				JP Morgan			IDI/DCT				IDI/DCT Buford⁽⁵⁾		Stirling Capital Investments
Total investment in properties	$	26,121			$	280,993		$	40,510			$	7,594	$	112,447
Accumulated depreciation and amortization		(6,689	)			(69,643	)		(5,392	)			-		(20,694	)
Net investment in properties		19,432				211,350			35,118				7,594		91,753
Cash and cash equivalents		171				3,387			733				29		709
Other assets		621				5,392			979				3		3,044
Total assets	$	20,224			$	220,129		$	36,830			$	7,626	$	95,506

Other liabilities	$	471			$	5,764		$	393			$	8	$	646
Secure debt maturities – 2014		-				-			-				-		-
Secure debt maturities – 2015		-				-			22,220		⁽³⁾		-		-
Secure debt maturities – 2016		8,197		⁽²⁾		-			-				-		-
Secure debt maturities – 2017		-				-			-				-		72,791		⁽⁴⁾
Secure debt maturities thereafter		-				-			-				-		11,256		⁽⁴⁾
Total secured debt		8,197				-			22,220				-		84,047
Total liabilities		8,668				5,764			22,613				8		84,693
Partners or members' capital		11,556				214,365			14,217				7,618		10,813
Total liabilities and partners or members' capital	$	20,224			$	220,129		$	36,830			$	7,626	$	95,506

⁽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⁾	$8.2 million of debt requires principal and interest payments until 2016 and has a stated interest rate of 7.4%.

⁽³⁾	$22.2 million of debt requires interest only payments through October 2015 and has a weighted average variable interest rate of LIBOR plus 2.35%.

⁽⁴⁾	$72.8 million of debt requires interest only payments through October 2017 and has a variable interest rate of LIBOR plus 2.2%. $11.3 million of debt is payable to DCT and requires principal and interest payments through November 2021 and has a fixed rate of 8.5%.

⁽⁵⁾	As of September 30, 2014 47.0 acres were held for future development.

Third Quarter 2014

Supplemental Reporting Package

P a g e 15


	Definitions

Adjusted EBITDA:

Adjusted EBITDA represents net income (loss) attributable to common stockholders before interest, taxes, depreciation, amortization, stock-based compensation expense, noncontrolling interest, impairment losses, and proportionate share of interest, depreciation and amortization from unconsolidated joint ventures, 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.

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 discounts/premiums 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, loan costs and other noncash interest expense.

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 (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 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 acquisition costs, debt modification costs and impairment losses on properties which are not depreciable. We believe that FFO excluding 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.

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 materially different lease structures are excluded.

Net Effective Rent:

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

Third Quarter 2014

Supplemental Reporting Package

P a g e 16


	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.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Reconciliation of income (loss) from continuing operations to NOI:
Income (loss) from continuing operations	$	12,858		$	1,010		$	15,372		$	(6,971	)
Income tax (benefit) expense and other taxes		(73	)		(59	)		(257	)		373
Interest and other income		(1,577	)		(83	)		(1,582	)		(310	)
Interest expense		16,078			15,141			48,316			47,328
Equity in earnings of unconsolidated joint ventures, net		(892	)		(759	)		(5,202	)		(1,721	)
General and administrative		6,727			6,120			21,059			19,823
Real estate related depreciation and amortization		37,842			32,843			111,545			94,634
Impairment losses		900			-			5,635			-
Development profit, net of taxes		-			-			(2,016	)		(268	)
Gain on business combination		-			-			(1,000	)		-
Gain on dispositions of real estate interests		(10,230	)		-			(11,647	)		-
Casualty and involuntary conversion (gain) loss		14			(294	)		(326	)		(296	)
Institutional capital management and other fees		(322	)		(619	)		(1,394	)		(2,139	)
Total GAAP net operating income		61,325			53,300			178,503			150,453
Less net operating income - non-same store properties		(8,761	)		(3,390	)		(35,107	)		(12,200	)
Same store GAAP net operating income		52,564			49,910			143,396			138,253
Less revenue from lease terminations		(260	)		(517	)		(1,161	)		(828	)
Add early termination straight-line rent adjustment		59			57			420			310
Same store GAAP net operating income, excluding revenue from lease terminations		52,363			49,450			142,655			137,735
Less straight-line rents, net of related bad debt expense		(632	)		(720	)		(3,054	)		(2,053	)
Less amortization of above/(below) market rents		(394	)		(404	)		(1,038	)		(1,184	)
Same store cash net operating income, excluding revenue from lease terminations	$	51,337		$	48,326		$	138,563		$	134,498

Projected Stabilized Yield – Projects Under Development:

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

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.

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.

Third Quarter 2014

Supplemental Reporting Package

P a g e 17


	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, presented net of amounts capitalized.

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.

Third Quarter 2014

Supplemental Reporting Package

P a g e 18

Attached files

Stock widget

Investing forum

DCT Industrial Trust Inc. Reports

Also read