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

Attached files

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8-K - 8-K - DCT Industrial Trust Inc.	dct-8k_20150205.htm
EX-99.1 - EX-99.1 - DCT Industrial Trust Inc.	dct-ex991_201502056.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	11-12
Development Overview	13
Indebtedness	14
Capitalization and Fixed Charge Coverage	15
Investment in Unconsolidated Ventures Summary	16
Definitions	17-19

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 costs of compliance with those regulations, changes in real estate and zoning laws and increases in real property tax rates;

·	financing risks, including the risk that our cash flows from operations may be insufficient to meet required payments of principal, interest and other commitments;

·	lack of or insufficient amounts of insurance;

·	litigation, including costs associated with prosecuting or defending claims and any adverse outcomes;

·	the consequences of future terrorist attacks or civil unrest;

·	environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us; and

·	other risks and uncertainties detailed 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.

Fourth 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 Properties

Market	ABR (thousands)		Occupancy Q4 2014			Occupancy⁽²⁾ Q4 2013			Change
Southern California	$	32,678		98.4	%		94.8	%		3.6	%
Chicago		30,453		97.1	%		95.5	%		1.6	%
Houston		19,992		98.4	%		99.1	%		-0.7	%
Atlanta		19,294		92.0	%		92.0	%		0.0	%
Northern California		19,292		95.9	%		93.1	%		2.8	%
Dallas		17,344		96.5	%		97.9	%		-1.4	%
Seattle		11,604		96.2	%		94.4	%		1.8	%
Baltimore/Washington D.C.		11,155		93.6	%		88.9	%		4.7	%
Pennsylvania		10,350		95.3	%		91.0	%		4.3	%
Cincinnati		10,240		95.6	%		93.8	%		1.8	%
Total/Weighted Average	$	182,402		96.0	%		94.4	%		1.6	%

⁽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 December 31, 2014. Occupancy is as of period end.

⁽⁵⁾	Includes assets held for sale.

Fourth Quarter 2014

Supplemental Reporting Package

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Consolidated Statements of Operations

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

	Three Months Ended						Year Ended
	December 31,						December 31,
	2014			2013			2014			2013
REVENUES:
Rental revenues	$	84,581		$	76,475		$	334,787		$	286,218
Institutional capital management and other fees		345			648			1,739			2,787
Total revenues		84,926			77,123			336,526			289,005

OPERATING EXPENSES:
Rental expenses		9,013			9,904			40,520			35,977
Real estate taxes		13,594			10,830			53,790			44,048
Real estate related depreciation and amortization		37,447			35,368			148,992			130,002
General and administrative		8,020			8,187			29,079			28,010
Impairment losses		-			-			5,635			-
Casualty and involuntary conversion gain		(2	)		-			(328	)		(296	)
Total operating expenses		68,072			64,289			277,688			237,741
Operating income		16,854			12,834			58,838			51,264

OTHER INCOME (EXPENSE):
Development profit, net of taxes		-			-			2,016			268
Equity in earnings of unconsolidated joint ventures, net		1,260			684			6,462			2,405
Gain on business combination		-			-			1,000			-
Gain on dispositions of real estate interests		28,024			-			39,671			-
Interest expense		(14,920	)		(16,066	)		(63,236	)		(63,394	)
Interest and other income (expense)		(19	)		(37	)		1,563			274
Income tax benefit (expense) and other taxes		(40	)		305			217			(68	)
Income (loss) from continuing operations		31,159			(2,280	)		46,531			(9,251	)
Discontinued operations:
Operating income and other expenses		-			1,196			321			6,383
Gain on dispositions of real estate interests from discontinued operations		141			16,036			5,396			20,340
Income from discontinued operations		141			17,232			5,717			26,723
Consolidated net income of DCT Industrial Trust Inc.		31,300			14,952			52,248			17,472
Net income attributable to noncontrolling interests		(1,663	)		(1,013	)		(3,084	)		(1,602	)
Net income attributable to common stockholders		29,637			13,939			49,164			15,870
Distributed and undistributed earnings allocated to participating securities		(170	)		(167	)		(677	)		(692	)
Adjusted net income attributable to common stockholders	$	29,467		$	13,772		$	48,487		$	15,178

EARNINGS PER COMMON SHARE - BASIC
Income (loss) from continuing operations	$	0.34		$	(0.03	)	$	0.52		$	(0.13	)
Income from discontinued operations		0.00			0.20			0.06			0.33
Net income attributable to common stockholders	$	0.34		$	0.17		$	0.58		$	0.20

EARNINGS PER COMMON SHARE - DILUTED
Income (loss) from continuing operations	$	0.34		$	(0.03	)	$	0.52		$	(0.13	)
Income from discontinued operations		0.00			0.20			0.06			0.33
Net income attributable to common stockholders	$	0.34		$	0.17		$	0.58		$	0.20

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		86,406			79,464			83,280			74,692
Diluted		86,728			79,464			83,572			74,692

Fourth Quarter 2014

Supplemental Reporting Package

P a g e 3

Consolidated Balance Sheets

(amounts in thousands)

	December 31,			December 31,
	2014			2013
ASSETS:	(unaudited)
Operating properties	$	3,635,287		$	3,442,442
Properties under development		241,934			142,903
Properties under redevelopment		50,931			12,194
Properties in pre-development including land held		32,223			73,512
Total investment in properties		3,960,375			3,671,051
Less accumulated depreciation and amortization		(703,840	)		(654,097	)
Net investment in properties		3,256,535			3,016,954
Investments in and advances to unconsolidated joint ventures		94,728			124,923
Net investment in real estate		3,351,263			3,141,877
Cash and cash equivalents		19,631			32,226
Restricted cash		3,779			12,621
Deferred loan costs, net		8,026			10,251
Straight-line rent and other receivables, net		54,183			46,247
Other assets, net		14,652			14,545
Assets held for sale		-			8,196
Total assets	$	3,451,534		$	3,265,963

LIABILITIES AND EQUITY:
Accounts payable and accrued expenses	$	83,543		$	63,281
Distributions payable		25,973			23,792
Tenant prepaids and security deposits		30,539			28,542
Other liabilities		14,078			10,122
Intangible lease liabilities, net		22,940			20,389
Line of credit		37,000			39,000
Senior unsecured notes		1,122,621			1,122,407
Mortgage notes		249,424			290,960
Liabilities related to assets held for sale		-			278
Total liabilities		1,586,118			1,598,771
Total stockholders’ equity		1,749,832			1,543,806
Noncontrolling interests		115,584			123,386
Total liabilities and equity	$	3,451,534		$	3,265,963

Fourth Quarter 2014

Supplemental Reporting Package

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Funds from Operations

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

	Three Months Ended December 31,						Year Ended December 31,
	2014			2013			2014			2013
Reconciliation of net income attributable to common stockholders to FFO:
Net income attributable to common stockholders	$	29,637		$	13,939		$	49,164		$	15,870
Adjustments:
Real estate related depreciation and amortization		37,447			35,527			148,992			137,120
Equity in earnings of unconsolidated joint ventures, net		(1,260	)		(684	)		(6,462	)		(2,405	)
Equity in FFO of unconsolidated joint ventures		2,814			2,622			10,804			10,152
Impairment losses on depreciable real estate		-			-			5,767			13,279
Gain on business combination		-			-			(1,000	)		-
Gain on dispositions of real estate interests		(28,165	)		(16,036	)		(45,199	)		(33,650	)
Gain on dispositions of non-depreciable real estate		-			-			98			31
Noncontrolling interest in the above adjustments		(620	)		(1,145	)		(6,300	)		(8,211	)
FFO attributable to unitholders		1,953			1,835			8,106			8,437
FFO attributable to common stockholders and unitholders⁽¹⁾		41,806			36,058			163,970			140,623
Adjustments:
Acquisition costs		961			1,930			3,011			3,578
FFO, as adjusted, attributable to common stockholders and unitholders – basic and diluted	$	42,767		$	37,988		$	166,981		$	144,201

FFO per common share and unit — basic	$	0.46		$	0.43		$	1.86		$	1.76
FFO per common share and unit — diluted	$	0.46		$	0.43		$	1.85		$	1.75

FFO, as adjusted, per common share and unit — basic	$	0.47		$	0.45		$	1.89		$	1.80
FFO, as adjusted, per common share and unit — diluted	$	0.47		$	0.45		$	1.89		$	1.80

FFO weighted average common shares and units outstanding:
Common shares for earnings per share - basic		86,406			79,464			83,280			74,692
Participating securities		621			628			605			616
Units		4,242			4,436			4,331			4,770
FFO weighted average common shares, participating securities and units outstanding – basic		91,269			84,528			88,216			80,078
Dilutive common stock equivalents		322			252			292			223
FFO weighted average common shares, participating securities and units outstanding – diluted		91,591			84,780			88,508			80,301

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

Fourth Quarter 2014

Supplemental Reporting Package

P a g e 5

Selected Financial Data

(unaudited, amounts in thousands)

	Three Months Ended December 31,							Year Ended December 31,
	2014			2013				2014			2013
NET OPERATING INCOME:⁽¹⁾
Rental revenues	$	84,581		$		76,475		$	334,787		$		286,218
Rental expenses and real estate taxes		(22,607	)			(20,734	)		(94,310	)			(80,025	)
Net operating income⁽²⁾	$	61,974		$		55,741		$	240,477		$		206,193

TOTAL CONSOLIDATED PROPERTIES:⁽³⁾
Square feet as of period end		64,201				63,172			64,201				63,172
Average occupancy		93.1	%			91.2	%		92.3	%			90.9	%
Occupancy as of period end		92.5	%			91.8	%		92.5	%			91.8	%

CONSOLIDATED OPERATING PROPERTIES:⁽³⁾
Square feet as of period end		61,976				62,118			61,976				62,118
Average occupancy		95.0	%			92.8	%		93.5	%			92.4	%
Occupancy as of period end		95.4	%			93.3	%		95.4	%			93.3	%

SAME STORE PROPERTIES:⁽⁴⁾
Square feet as of period end		52,630				52,630			47,237				47,237
Average occupancy		95.2	%			93.3	%		93.6	%			92.7	%
Occupancy as of period end		95.2	%			93.8	%		95.4	%			93.2	%

Rental revenues	$	70,352		$		67,552		$	251,022		$		242,734
Rental expenses and real estate taxes		(18,199	)			(18,517	)		(69,283	)			(68,170	)
Same store net operating income		52,153				49,035			181,739				174,564
Less: revenue from lease terminations		(176	)			(18	)		(1,236	)			(733	)
Add: early termination straight-line rent adjustment		102				-			456				309
Net operating income (excluding revenue from lease terminations)		52,079				49,017			180,959				174,140
Less: straight-line rents, net of related bad debt expense		(669	)			(1,312	)		(3,011	)			(2,529	)
Less: amortization of below market rents, net		(340	)			(351	)		(1,242	)			(1,412	)
Cash net operating income (excluding revenue from lease terminations)	$	51,070		$		47,354		$	176,706		$		170,199

Net operating income growth (excluding revenue from lease terminations)		6.2	%						3.9	%
Cash net operating income growth (excluding revenue from lease terminations)		7.8	%						3.8	%

SUPPLEMENTAL CONSOLIDATED CASH FLOW AND OTHER INFORMATION:
Straight-line rents - increase to revenue, net of related bad debt expense⁽³⁾	$	2,226		$		1,890		$	9,829		$		5,642
Straight-line rent receivable (balance sheet)⁽³⁾	$	47,437		$		41,696		$	47,437		$		41,696
Net amortization of below market rents – increase to revenue⁽³⁾	$	845		$		379		$	2,350		$		1,580
Capitalized interest	$	2,979		$		2,241		$	9,098		$		8,298
Noncash interest expense⁽³⁾	$	1,121		$		1,403		$	4,582		$		4,557
Stock-based compensation amortization	$	1,367		$		1,098		$	4,777		$		4,004
Revenue from lease terminations⁽³⁾	$	227		$		229		$	2,092		$		1,302
Bad debt expense, excluding bad debt expense related to straight-line rents⁽³⁾	$	13		$		376		$	969		$		1,252
GAAP NOI for properties sold during current quarter	$	1,031		$	N/A			$	8,871		$	N/A

CONSOLIDATED CAPITAL EXPENDITURES:⁽³⁾
Development	$	49,268		$		23,916		$	155,306		$		107,950
Redevelopment		3,798				1,628			5,380				5,948
Due diligence		1,881				4,478			7,951				9,209
Casualty expenditures		150				506			837				4,024
Building and land improvements		3,266				3,438			13,076				12,394
Tenant improvements and leasing costs		11,429				6,958			40,576				26,219
Total capital expenditures	$	69,792		$		40,924		$	223,126		$		165,744

⁽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.

Fourth Quarter 2014

Supplemental Reporting Package

P a g e 6

Property Overview

As of December 31, 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		39		6,455		10.1	%		92.0	%	$	19,294		$	3.25		7.8	%
Baltimore/Washington D.C.		17		2,009		3.1	%		93.6	%		11,155			5.93		4.5	%
Charlotte		1		472		0.7	%		100.0	%		1,604			3.40		0.7	%
Chicago		38		8,992		14.0	%		97.1	%		30,453			3.49		12.3	%
Cincinnati		29		2,942		4.6	%		95.6	%		10,240			3.64		4.2	%
Dallas		35		5,277		8.2	%		96.5	%		17,344			3.40		7.0	%
Denver		2		278		0.4	%		100.0	%		1,362			4.90		0.6	%
Houston		39		3,444		5.4	%		98.4	%		19,992			5.90		8.1	%
Indianapolis		7		2,299		3.6	%		93.9	%		6,636			3.07		2.7	%
Louisville		3		1,109		1.7	%		100.0	%		3,692			3.33		1.5	%
Memphis		8		3,712		5.8	%		88.4	%		9,333			2.84		3.8	%
Miami		11		1,437		2.2	%		93.2	%		9,931			7.41		4.0	%
Nashville		4		2,064		3.2	%		97.9	%		6,243			3.09		2.5	%
New Jersey		10		1,491		2.3	%		91.3	%		8,086			5.94		3.3	%
Northern California		28		3,920		6.1	%		95.9	%		19,292			5.13		7.8	%
Orlando		20		1,864		2.9	%		96.0	%		7,189			4.02		2.9	%
Pennsylvania		13		2,716		4.2	%		95.3	%		10,350			4.00		4.2	%
Phoenix		24		2,566		4.0	%		92.9	%		9,931			4.16		4.0	%
Seattle		21		2,249		3.5	%		96.2	%		11,604			5.36		4.7	%
Southern California⁽⁴⁾		44		6,680		10.4	%		98.4	%		32,678			4.97		13.2	%
Total/weighted average - operating properties		393		61,976		96.4	%		95.4	%		246,409			4.17		99.8	%

REDEVELOPMENT PROPERTIES:
Chicago		2		548		0.9	%		0.0	%		-			-		0.0	%
Dallas		1		63		0.1	%		100.0	%	N/A⁽⁵⁾			N/A⁽⁵⁾			0.0	%
Houston		1		98		0.2	%		0.0	%		-			-		0.0	%
New Jersey		1		63		0.1	%		0.0	%		-			-		0.0	%
Southern California		1		82		0.1	%		0.0	%		-			-		0.0	%
Total/weighted average – redevelopment properties		6		854		1.4	%		7.4	%		-			-		0.0	%

DEVELOPMENT PROPERTIES:
Houston⁽⁶⁾		4		437		0.7	%		13.6	%		517			8.68		0.2	%
Orlando		1		97		0.2	%		24.5	%		-			-		0.0	%
Seattle		2		837		1.3	%		12.5	%		-			-		0.0	%
Total/weighted average – development properties		7		1,371		2.2	%		13.7	%		517			2.75		0.2	%

Total/weighted average - consolidated properties		406		64,201		100.0	%		92.5	%	$	246,926	⁽⁷⁾	$	4.16		100.0	%

See footnotes on next page.

Fourth Quarter 2014

Supplemental Reporting Package

P a g e 7

Property Overview

(continued)

As of December 31, 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)	1		50.0	%		557		6.9	%		70.2	%	$	969	$	2.48		3.4	%
Southern California Logistics Airport⁽⁹⁾	6		50.0	%		2,160		26.8	%		99.6	%		8,009		3.72		28.2	%
Total/weighted average – unconsolidated operating properties	7		50.0	%		2,717		33.7	%		93.5	%		8,978		3.53		31.6	%

OPERATING PROPERTIES IN CO-INVESTMENT VENTURES:
Chicago	2		20.0	%		1,033		12.8	%		100.0	%		3,861		3.74		13.6	%
Cincinnati	1		20.0	%		543		6.8	%		100.0	%		1,656		3.05		5.8	%
Dallas	1		20.0	%		540		6.7	%		100.0	%		1,732		3.21		6.1	%
Denver	5		20.0	%		772		9.6	%		100.0	%		3,876		5.02		13.6	%
Louisville	4		10.0	%		736		9.1	%		100.0	%		2,267		3.08		8.0	%
Nashville	2		20.0	%		1,020		12.7	%		100.0	%		2,825		2.77		10.0	%
Orlando	2		20.0	%		696		8.6	%		100.0	%		3,224		4.63		11.3	%
Total/weighted average - co-investment operating properties	17		18.6	%		5,340		66.3	%		100.0	%		19,441		3.64		68.4	%
Total/weighted average - unconsolidated properties	24		29.2	%		8,057		100.0	%		97.8	%	$	28,419	$	3.61		100.0	%

⁽¹⁾	Based on leases commenced as of December 31, 2014.

⁽²⁾	Annualized base rent is calculated as monthly contractual base rent (cash basis) per the terms of the lease, as of December 31, 2014, multiplied by 12.

⁽³⁾	Excludes total annualized base rent of $1.7 million from one non-industrial property acquired for future development. The lease expired in January 2015.

⁽⁴⁾	As of December 31, 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 a short-term lease. The rental income is incidental revenue recognized as 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 $10.4 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.

Fourth 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
FOURTH QUARTER 2014				(in thousands)								(in months)		(in thousands)
New		30			1,639		2.8	%		2.9	%		55	$		6,638	$		4.05
Renewal		38			3,269		3.5	%		13.3	%		50			10,526			3.22
Development and redevelopment		6			545	N/A			N/A				82		N/A			N/A
Total/Weighted Average		74			5,453		3.3	%		10.4	%		55	$		17,164	$		3.50
Weighted Average Retention		89.0	%

YEAR TO DATE 2014
New		133			5,811		4.9	%		10.0	%		56	$		22,198	$		3.82
Renewal		142			9,758		4.4	%		13.0	%		51			23,810			2.44
Development and redevelopment		13			972	N/A			N/A				93		N/A			N/A
Total/Weighted Average		288			16,541		4.5	%		12.0	%		55	$		46,008	$		2.96
Weighted Average Retention		81.3	%

⁽¹⁾	Excludes month-to-month leases.

⁽²⁾	Assumes no exercise of lease renewal options.

Fourth Quarter 2014

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P a g e 9

Consolidated Lease Expirations

Lease Expirations for Consolidated Properties by Market⁽¹⁾


	2015⁽²⁾					2016					2017
Markets	Square Feet		Percentage of Total Square Feet⁽³⁾			Square Feet		Percentage of Total Square Feet⁽³⁾			Square Feet		Percentage of Total Square Feet⁽³⁾
	(in thousands)					(in thousands)					(in thousands)
Atlanta		407		6.3	%		1,060		16.4	%		908		14.1	%
Baltimore/Washington D.C.		231		11.5	%		273		13.6	%		313		15.6	%
Charlotte		-		0.0	%		-		0.0	%		-		0.0	%
Chicago		921		10.2	%		1,569		17.4	%		2,071		23.0	%
Cincinnati		723		24.6	%		416		14.1	%		759		25.8	%
Dallas		765		14.5	%		646		12.2	%		457		8.7	%
Denver		23		8.3	%		156		56.1	%		71		25.5	%
Houston		347		10.1	%		287		8.3	%		634		18.4	%
Indianapolis		301		13.1	%		275		12.0	%		649		28.2	%
Louisville		200		18.0	%		100		9.0	%		-		0.0	%
Memphis		203		5.5	%		1,170		31.5	%		1,283		34.6	%
Miami		86		6.0	%		137		9.5	%		59		4.1	%
Nashville		278		13.5	%		-		0.0	%		391		18.9	%
New Jersey		189		12.7	%		72		4.8	%		7		0.5	%
Northern California		380		9.7	%		591		15.1	%		630		16.1	%
Orlando		285		15.3	%		488		26.2	%		416		22.3	%
Pennsylvania		249		9.2	%		497		18.3	%		562		20.7	%
Phoenix		202		7.9	%		278		10.8	%		334		13.0	%
Seattle		173		7.7	%		137		6.1	%		417		18.5	%
Southern California		660		9.9	%		1,900		28.4	%		1,021		15.3	%
Total		6,623		10.7	%		10,052		16.2	%		10,982		17.7	%

Lease Expirations for Consolidated Properties Summarized⁽¹⁾

Year	Square Feet Related to Expiring Leases		Annualized Base Rent of Expiring Leases⁽⁴⁾		Percent of Total Annualized Base Rent
	(in thousands)		(in thousands)
2015⁽²⁾		6,623	$	28,534		10.2	%
2016		10,052		42,893		15.3	%
2017		10,982		45,596		16.3	%
2018		7,786		35,133		12.6	%
2019		8,163		35,626		12.7	%
Thereafter		15,768		92,130		32.9	%
Total occupied		59,374	$	279,912		100.0	%
Available or leased but not occupied		4,827
Total consolidated properties		64,201

⁽¹⁾	Assumes no exercise of lease renewal options.

⁽²⁾	Includes month-to-month leases.

⁽³⁾	Percentage is based on consolidated occupied square feet as of December 31, 2014.

⁽⁴⁾	Annualized based rent includes contractual rents in effect at the date of expiration.

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P a g e 10

Acquisition and Disposition Summary

For the Year Ended December 31, 2014

	Property Name	Market	Size		Occupancy at Acquisition			Occupancy at December 31, 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	%		100.0	%
March	3401 S. Chicago Street	Chicago		184,000		32.6	%		70.2	%
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	%		100.0	%
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⁽²⁾	Houston		98,000		0.0	%		0.0	%
August	777 Mark Street⁽²⁾	Chicago		228,000		5.6	%	⁽³⁾	0.0	%
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	%		52.6	%
October	930 Durham Road⁽²⁾	New Jersey		63,000		0.0	%		0.0	%
October	7000 Cobb	Atlanta		151,000		100.0	%		100.0	%
October	Valleyview - Tempe Warehouse Portfolio (5 buildings)	Phoenix		355,000		97.6	%		97.6	%
October	10610 N. Sam Houston Parkway West	Houston		39,000		100.0	%		100.0	%
November	3136 E. Victoria	So. California		102,000		100.0	%		100.0	%
December	9010 Sterling Street⁽²⁾	Dallas		63,000		100.0	%	⁽³⁾	100.0	%
December	6740 Dorsey	Baltimore/Washington D.C.		120,000		100.0	%		100.0	%
December	Seaway Business Center (2 buildings)	Seattle		149,000		100.0	%		100.0	%
December	505 Airline Drive	Dallas		67,000		100.0	%		100.0	%
December	2141 N.W. 72^nd	Miami		75,000		67.0	%		67.0	%
December	2413 Prospect⁽²⁾	Chicago		320,000		0.0	%		0.0	%
Total YTD Purchase Price - $363.1 million				5,568,000		78.1	%		80.2	%

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
December	DCT Waters Ridge	Dallas	18.1 acres
Total YTD Land Purchase Price - $21.5 million			103.2 acres

See footnotes on next page

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P a g e 11

Acquisition and Disposition Summary

(continued)

For the Year Ended December 31, 2014

	Property Name	Market	Size		Occupancy at Disposition
BUILDING DISPOSITIONS:
Consolidated Properties
January	8th & Vineyard A⁽⁴⁾	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⁽⁵⁾	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 – Hartford (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⁽⁶⁾ (2 buildings)	Cincinnati		840,000		100.0	%
September	1141 108th Street	Dallas		21,000		0.0	%
October	Columbus Portfolio (12 buildings)	Columbus		3,480,000		97.7	%
October	7384 Penn Drive	Pennsylvania		112,000		0.0	%
December	Beltway 8 Portfolio (7 buildings)	Houston		354,000		95.1	%
Total YTD Sales Price - $301.5 million				6,634,000		95.3	%

Unconsolidated Ventures
January	TRT-DCT JV I (7 buildings)	Atlanta, Cincinnati, Columbus, Minneapolis		1,642,000		100.0	%
January	TRT-DCT JV II (5 buildings)	Dallas, Columbus, Indianapolis, Pennsylvania		1,744,000		99.0	%
December	IDI Savannah - Tradeport East A	Savannah		503,000		100.0	%
Total YTD Sales Price - $16.5 million⁽⁷⁾				3,889,000		99.6	%

LAND DISPOSITIONS:
March	Boone Industrial Park	Indianapolis	28.4 acres
November	8th & Vineyard - Residential	So. California	0.8 acres
Total YTD Sales Price - $1.2 million			29.2 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⁾	The building is classified as a property under redevelopment as of December 31, 2014.

⁽³⁾	Acquired with known year-one move-out.

⁽⁴⁾	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.

⁽⁵⁾	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.

⁽⁶⁾	During August 2014, we sold two buildings and 46 acres of undeveloped land adjacent to the buildings.

⁽⁷⁾	The sales price reflects our proportionate share of gross proceeds received for properties sold by the unconsolidated joint venture.

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P a g e 12

Development Overview

As of December 31, 2014

											Cost Incurred
Project	Market	Acres			Number of Buildings	Square Feet		Percent Owned			Q4-2014		Cumulative Costs at 12/31/2014		Projected Investment		Completion Date⁽³⁾	Percent Leased⁽⁵⁾
						(in thousands)					(in thousands)		(in thousands)		(in thousands)
Consolidated Development Activities:
Stabilized in Q4 2014
DCT 55	Chicago	33			1	604			100	%	$	332	$	29,134	$	29,239	Q4-2012		100	%
Projected Stabilized Yield⁽¹⁾			7.2	%

Projects Under Development

Development Projects in Lease Up⁽⁶⁾
DCT Beltway Tanner Business Park	Houston	11			1	133			100	%	$	4,563	$	18,660	$	20,503	Q1-2014		100	%
DCT Airtex Industrial Center II	Houston	7			1	127			100	%		1,076		6,935		9,775	Q4-2014		0	%
DCT Airport Distribution Center North Building C	Orlando	8			1	97			100	%		91		4,806		6,693	Q4-2014		0	%
DCT Sumner South Distribution Center	Seattle	9			1	188			100	%		239		11,653		13,410	Q1-2014		56	%
DCT White River Corporate Center Phase I	Seattle	30			1	649			100	%		1,403		39,756		44,169	Q4-2014		0	%
	Total	65			5		1,194		100	%	$	7,372	$	81,810	$	94,550			20	%
Under Construction
DCT River West	Atlanta	47			1	733			100	%	$	8,955	$	18,482	$	29,622	Q2-2015		0	%
DCT O'Hare Logistics Center	Chicago	7			1	112			100	%		556		4,734		12,436	Q3-2015		0	%
DCT Freeport North	Dallas	6			1	100			100	%		2,070		5,586		6,989	Q1-2015		0	%
DCT Frankford Trade Center	Dallas	6			1	82			100	%		1,279		4,691		5,563	Q1-2015		0	%
DCT Northwest Crossroads Logistics Centre I	Houston	21			1	362			100	%		5,514		16,379		20,618	Q1-2015		100	%
DCT Northwest Crossroads Logistics Centre II	Houston	18			1	320			100	%		5,369		9,265		18,412	Q2-2015		0	%
DCT Chrin Commerce Centre	Pennsylvania	36			1	426			100	%		3,819		11,402		26,199	Q2-2015		0	%
DCT White River Corporate Center Phase II South	Seattle	4			1	63			100	%		2,013		4,594		5,095	Q1-2015		100	%
DCT Fife 45 North	Seattle	5			1	79			100	%		2,052		4,852		7,155	Q1-2015		0	%
DCT Fife 45 South	Seattle	4			1	64			100	%		1,470		3,269		5,553	Q1-2015		57	%
DCT Rialto Logistics Center	So. California	42			1	928			100	%		2,170		50,876		60,543	Q1-2015		0	%
	Total	196			11		3,269		100	%	$	35,267	$	134,130	$	198,185			14	%

Projects Under Development		261			16		4,463		100	%	$	42,639	$	215,940	$	292,735			16	%
Projected Stabilized Yield - Projects Under Development⁽¹⁾			7.7	%

Development Projects for Sale
8th & Vineyard C	So. California	3			1	55			91	%	$	1,556	$	3,370	$	4,985	Q1-2015	N/A
8th & Vineyard D	So. California	4			1	61			91	%		1,582		4,273		5,429	Q1-2015	N/A
8th & Vineyard E	So. California	2			1	40			91	%		1,151		2,982		3,791	Q1-2015	N/A
	Total	9			3	156			91	%	$	4,289	$	10,625	$	14,205

Pre-Development⁽²⁾
DCT Waters Ridge	Dallas	18							100	%	$	1,817	$	1,817
6400 Hollister Road - Expansion	Houston	2							100	%		-		495
Seneca Commerce Center Phase I	Miami	14							90	%		1,063		2,799
Seneca Commerce Center Phase II	Miami	11							90	%		39		1,468
Seneca Commerce Center Phase III	Miami	11							90	%		38		1,369
DCT White River Corporate Center Phase II North	Seattle	13							100	%		112		6,667
DCT Fife Distribution Center North	Seattle	9							100	%		106		3,613
DCT Fife Distribution Center South	Seattle	12							100	%		170		5,125
DCT Jurupa Ranch⁽⁴⁾	So. California	39							100	%		92		27,061
	Total	129									$	3,437	$	50,414

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

⁽²⁾	Excludes land held totaling 55 acres with cumulative costs of approximately $8.9 million at December 31, 2014.

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

⁽⁴⁾	The property was leased through January 2015.

⁽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 $15.4 million as of December 31, 2014.

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P a g e 13

Indebtedness

(dollar amounts in thousands)

As of December 31, 2014

Description	Stated Interest Rate		Effective Interest Rate		Maturity Date		Balance as of December 31, 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								(2,379	)
								897,621
MORTGAGE NOTES:
Fixed rate secured debt		5.91%		4.99%	February 2016 – Aug. 2025			244,414
Premiums (discounts), net of amortization								5,010
								249,424
BANK UNSECURED CREDIT FACILITIES:
Senior unsecured revolving credit facility⁽¹⁾		1.34%		1.34%	February 2017			37,000
2018 Notes, variable rate⁽²⁾		1.51%		1.51%	February 2018			225,000
								262,000

Total carrying value of consolidated debt						$		1,409,045

Fixed rate debt		5.32%		5.48%				81	%
Variable rate debt		1.49%		1.49%				19	%
Weighted average interest rate		4.61%		4.73%				100	%

DCT PROPORTIONATE SHARE OF UNCONSOLIDATED JOINT VENTURE DEBT⁽³⁾
Institutional joint ventures						$		816
IDI								5,410
Stirling Capital Investments (SCLA)								36,259
						$		42,485

Scheduled Principal Payments of Debt as of December 31, 2014 (excluding premiums and discounts)

Year		Senior Unsecured Notes			Mortgage Notes			Bank Unsecured Credit Facilities			Total
2015	$		40,000	$		7,180	$		-	$		47,180
2016			99,000			56,994			-			155,994
2017			51,000			23,615			37,000			111,615
2018			81,500			6,554			225,000			313,054
2019			46,000			51,139			-			97,139
2020			50,000			69,824			-			119,824
2021			92,500			18,436			-			110,936
2022			130,000			3,116			-			133,116
2023			310,000			6,366			-			316,366
2024			-			739			-			739
Thereafter			-			451			-			451
Total	$		900,000	$		244,414	$		262,000	$		1,406,414

⁽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 $243.5 million available under the senior unsecured revolving credit facility, net of three letters of credit totaling $19.5 million as December 31, 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 December 31, 2014.

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P a g e 14

Capitalization and Fixed Charge Coverage

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

Capitalization at December 31, 2014

Description	Shares or Units ⁽¹⁾			Share Price			Market Value
	(in thousands)
Common shares outstanding		88,013	$		35.66	$		3,138,544
Operating partnership units outstanding		4,200	$		35.66			149,772
Total equity market capitalization								3,288,316

Consolidated debt								1,409,045
Less: Noncontrolling interests’ share of consolidated debt⁽²⁾								(8,549	)
Proportionate share of debt related to unconsolidated joint ventures								42,485
DCT share of total debt								1,442,981
Total market capitalization						$		4,731,297

DCT share of total debt to total market capitalization								30.5	%

Fixed Charge Coverage

	Three Months Ended December 31,						Year Ended December 31,
	2014			2013			2014			2013
Net income attributable to common stockholders⁽³⁾	$	29,637		$	13,939		$	49,164		$	15,870
Interest expense		14,920			16,066			63,236			63,394
Proportionate share of interest expense from unconsolidated joint ventures		354			400			1,401			1,657
Real estate related depreciation and amortization		37,447			35,527			148,992			137,120
Proportionate share of real estate related depreciation and amortization from unconsolidated joint ventures		1,378			1,484			5,533			5,924
Income tax (benefit) expense and other taxes		40			(333	)		(185	)		57
Stock-based compensation		1,367			1,098			4,777			4,004
Noncontrolling interests		1,663			1,013			3,084			1,602
Non-FFO gain on business combination		-			-			(1,000	)		-
Non-FFO gain on dispositions of real estate interests		(28,165	)		(16,036	)		(45,101	)		(33,619	)
Impairment losses		-			-			5,767			13,279
Adjusted EBITDA	$	58,641		$	53,158		$	235,668		$	209,288

CALCULATION OF FIXED CHARGES
Interest expense	$	14,920		$	16,066		$	63,236		$	63,394
Capitalized interest		2,979			2,241			9,098			8,298
Amortization of loan costs and debt premium/discount		(94	)		(403	)		(477	)		(558	)
Other noncash interest expense		(1,027	)		(1,000	)		(4,105	)		(3,999	)
Proportionate share of interest expense from unconsolidated joint ventures		354			400			1,401			1,657
Total fixed charges	$	17,132		$	17,304		$	69,153		$	68,792

Fixed charge coverage		3.4			3.1			3.4			3.0

⁽¹⁾	Excludes 0.5 million shares of unvested Long-Term Incentive Plan Units, 0.2 million shares of unvested Restricted Stock and 0.1 million Phantom Shares outstanding as of

December 31, 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.

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Investment in Unconsolidated Ventures Summary

(unaudited, dollar amounts in thousands)

Statement of Operations and Other Data

	For the Year Ended December 31, 2014
	TRT-DCT JV III			JP Morgan			IDI/DCT			IDI/DCT Buford			Stirling Capital Investments
Total rental revenues	$	2,782		$	22,105		$	2,857		$	-		$	12,138
Rental expenses and real estate taxes		581			5,564			705			-			1,898
Net operating income		2,201			16,541			2,152			-			10,240
Depreciation and amortization		923			10,062			1,803			-			4,915
General and administrative		-			738			4			-			1,046
Operating income		1,278			5,741			345			-			4,279
Interest expense		636			-			709			-			3,382
Interest and other expense		18			4			54			-			6
Net income (loss)	$	624		$	5,737		$	(418	)	$	-		$	891
Other Data:
Number of buildings		4			13			1			-			6
Square feet (in thousands)		736			4,604			557			-			2,160
Occupancy		100.0	%		100.0	%		70.2	%		0.0	%		99.6	%
DCT ownership		10.0	%		20.0	%		50.0	%		75.0	%		50.0	%	⁽¹⁾

Balance Sheets

	As of December 31, 2014
	TRT-DCT JV III				JP Morgan			IDI/DCT				IDI/DCT Buford⁽⁵⁾		Stirling Capital Investments
Total investment in properties	$	26,407			$	282,652		$	20,768			$	7,596	$	112,741
Accumulated depreciation and amortization		(6,917	)			(72,856	)		(3,458	)			-		(21,928	)
Net investment in properties		19,490				209,796			17,310				7,596		90,813
Cash and cash equivalents		353				2,680			1,117				6		1,028
Other assets		612				5,543			550				10		3,296
Total assets	$	20,455			$	218,019		$	18,977			$	7,612	$	95,137

Other liabilities	$	334			$	6,013		$	389			$	3	$	1,225
Secure debt maturities – 2015		-				-			10,820		⁽³⁾		-		-
Secure debt maturities – 2016		8,162		⁽²⁾		-			-				-		-
Secure debt maturities – 2017		-				-			-				-		72,518		⁽⁴⁾
Secure debt maturities – 2018		-				-			-				-		-
Secure debt maturities thereafter		-				-			-				-		10,968		⁽⁴⁾
Total secured debt		8,162				-			10,820				-		83,486
Total liabilities		8,496				6,013			11,209				3		84,711
Partners or members' capital		11,959				212,006			7,768				7,609		10,426
Total liabilities and partners or members' capital	$	20,455			$	218,019		$	18,977			$	7,612	$	95,137

⁽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⁾	$10.8 million of debt requires interest only payments through October 2015 and has a variable interest rate of LIBOR plus 2.45%.

⁽⁴⁾	$72.5 million of debt requires interest only payments through October 2017 and has a variable interest rate of LIBOR plus 2.2%. $11.0 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 December 31, 2014 47.0 acres were held for future development.

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	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.

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	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 December 31,						Year Ended December 31,
	2014			2013			2014			2013
Reconciliation of income (loss) from continuing operations to NOI:
Income (loss) from continuing operations	$	31,159		$	(2,280	)	$	46,531		$	(9,251	)
Income tax (benefit) expense and other taxes		40			(305	)		(217	)		68
Interest and other income		19			37			(1,563	)		(274	)
Interest expense		14,920			16,066			63,236			63,394
Equity in earnings of unconsolidated joint ventures, net		(1,260	)		(684	)		(6,462	)		(2,405	)
General and administrative		8,020			8,187			29,079			28,010
Real estate related depreciation and amortization		37,447			35,368			148,992			130,002
Impairment losses		-			-			5,635			-
Development profit, net of taxes		-			-			(2,016	)		(268	)
Gain on business combination		-			-			(1,000	)		-
Gain on dispositions of real estate interests		(28,024	)		-			(39,671	)		-
Casualty and involuntary conversion (gain) loss		(2	)		-			(328	)		(296	)
Institutional capital management and other fees		(345	)		(648	)		(1,739	)		(2,787	)
Total GAAP net operating income		61,974			55,741			240,477			206,193
Less net operating income - non-same store properties		(9,821	)		(6,706	)		(58,738	)		(31,629	)
Same store GAAP net operating income		52,153			49,035			181,739			174,564
Less revenue from lease terminations		(176	)		(18	)		(1,236	)		(733	)
Add early termination straight-line rent adjustment		102			-			456			309
Same store GAAP net operating income, excluding revenue from lease terminations		52,079			49,017			180,959			174,140
Less straight-line rents, net of related bad debt expense		(669	)		(1,312	)		(3,011	)		(2,529	)
Less amortization of above/(below) market rents		(340	)		(351	)		(1,242	)		(1,412	)
Same store cash net operating income, excluding revenue from lease terminations	$	51,070		$	47,354		$	176,706		$	170,199

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.

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	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.

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