Net Earnings of $0.21 per Diluted Share in
Q4 and $1.03 per Diluted Share in 2016
FFO, as adjusted, of $0.59 per Diluted Share
in Q4 and $2.27 per Diluted Share in 2016
Consolidated Operating Occupancy Increased
to 97.2 Percent
Same-Store NOI Growth of 8.9 Percent on a
Cash Basis and 7.4 Percent on a Straight-Line Basis in Q4; 5.9
Percent on a Cash Basis and Straight Line-Basis for 2016
Rent Growth of 19.3 Percent on a
Straight-Line Basis and 8.9 Percent on a Cash Basis in Q4; 18.4
Percent on a Straight-Line Basis and 7.5 Percent on a Cash Basis
for 2016
DCT Industrial Trust® (NYSE: DCT), a leading real estate
company, today announced financial results for the three months and
year ending December 31, 2016.
“2016 was another outstanding year for DCT with strong operating
results and value creation for our shareholders,” said Phil
Hawkins, President and CEO for DCT Industrial. “Operationally, we
saw excellent rent, occupancy and same-store NOI growth, and our
development program continues to significantly exceed expectations.
We stabilized 5.8 million square feet of development and
redevelopment in 2016 with an investment of approximately $437
million and commenced construction on 3.5 million square feet with
a projected investment of $240 million.”
Net income attributable to common stockholders (“Net Earnings”)
for Q4 2016 was $19.7 million, or $0.21 per diluted share, compared
to $38.5 million, or $0.43 per diluted share, reported for Q4 2015,
a decrease of 51.2 percent per diluted share. For the year ending
December 31, 2016, Net Earnings was $93.1 million, or $1.03 per
diluted share, compared to $94.0 million, or $1.05 per diluted
share, reported for the year ending December 31, 2015, a decrease
of 1.9 percent per diluted share.
Funds from operations (“FFO”), as adjusted, attributable to
common stockholders and unitholders for Q4 2016 totaled $56.0
million, or $0.59 per diluted share, compared with $49.6 million,
or $0.53 per diluted share for Q4 2015, an 11.3 percent increase.
These results exclude $0.5 million of acquisition costs and a $0.9
million decrease in interest expense related to hedge
ineffectiveness for the quarter ending December 31, 2016, and $3.6
million of severance costs for the quarter ending December 31,
2015.
For the year ending December 31, 2016, FFO, as adjusted, totaled
$214.7 million, or $2.27 per diluted share, compared with $186.4
million, or $2.00 per diluted share, for the year ending December
31, 2015, an increase of 13.5 percent per diluted share. These
results exclude $1.1 million of acquisition costs and a $0.4
million decrease in interest expense related to hedge
ineffectiveness for the year ending December 31, 2016, and $1.9
million of acquisition costs and $3.6 million of severance costs
for the year ending December 31, 2015.
Property Results and Leasing
Activity
As of December 31, 2016, DCT Industrial owned 401 consolidated
operating properties, totaling 64.7 million square feet, with
occupancy of 97.2 percent, an increase of 100 basis points from Q3
2016 and an increase of 280 basis points over Q4 2015. On a
same-portfolio basis, the net impact of acquisitions, dispositions
and placing developments into operations increased occupancy by 70
basis points. Approximately 309,000 square feet, or 0.5 percent of
DCT Industrial’s total consolidated portfolio, was leased but not
occupied at December 31, 2016, which does not take into
consideration 441,000 square feet of leases in development
buildings either under construction or in pre-development.
In Q4 2016, the Company signed leases totaling 1.6 million
square feet with rental rates increasing 19.3 percent on a
straight-line basis and 8.9 percent on a cash basis, compared to
the corresponding expiring leases. For the full-year, the Company
signed leases totaling 14.3 million square feet with rental rates
increasing 18.4 percent on a straight-line basis and 7.5 percent on
a cash basis. The Company’s tenant retention rate was 78.4 percent
in Q4 2016 and 76.4 percent for the year ending December 31,
2016.
Net operating income (“NOI”) was $77.6 million in Q4 2016,
compared with $66.1 million in Q4 2015. For the year ending
December 31, 2016, NOI was $294.5 compared to $260.9 million for
the year ending December 31, 2015.
In Q4 2016, same-store NOI, excluding revenue from lease
terminations, increased 8.9 percent on a cash basis and 7.4 percent
on a straight-line basis, when compared to Q4 2015. Same-store
occupancy averaged 96.7 percent in Q4 2016, an increase of 170
basis points from Q4 2015. For the year ending December 31, 2016,
same-store NOI, excluding revenue from lease terminations,
increased 5.9 percent on both a cash and straight-line basis, when
compared with the year ending December 31, 2015. Same-store
occupancy averaged 96.8 percent for the full-year 2016, an increase
of 180 basis points over the full-year 2015.
Investment Activity
Acquisitions
Since September 30, 2016, DCT Industrial acquired four buildings
for $41.7 million. Totaling 351,000 square feet, these buildings
were 100.0 percent occupied at the time of closing. The Company
expects a year-one weighted-average cash yield of 5.5 percent and
anticipates a weighted-average stabilized cash yield of 6.2 percent
on the acquired assets.
The table below summarizes acquisitions since September 30,
2016:
Market Submarket Square Feet
Occupancy
at Closing
Closed Anticipated
Yield1
Northern California 880 Corridor 66,000
100.0% Oct-16 7.5%
Chicago I-55 Corridor 45,000 100.0% Oct-16 6.1% Denver Northeast
146,000 100.0%2 Nov-16 5.9% Chicago North DuPage
94,000 100.0% Dec-16
4.3% Total/Weighted Average 351,000 100.0% 6.2% 1
Anticipated yield represents year-one cash yield for
stabilized acquisitions and projected stabilized cash yield for
value-add acquisitions. 2 Property has known year-one move-out,
anticipated yield reflects projected releasing of this space.
Development and Redevelopment
Since September 30, 2016, DCT Industrial stabilized 877,000
square feet of development and redevelopment at an anticipated
weighted-average yield of 7.4 percent and an investment of
approximately $79.0 million. The Company also commenced
construction on 1.3 million square feet and purchased 65.4 acres
for the future development of 1.2 million square feet.
Highlights since DCT Industrial’s Q3 2016 Earnings Release:
- Completed and stabilized 22290 Hathaway
Avenue, a 297,000 square foot redevelopment located in the Hayward
submarket of Northern California.
- Executed a 116,000 square foot lease
for DCT Commerce Center Building C, bringing the 136,000 square
foot building, located in the Airport West submarket of Miami, to
85.6 percent leased.
- Acquired 53.3 acres in the Fife/Tacoma
submarket of Seattle to develop DCT Blair Logistics Center, a
two-building development totaling 972,000 square feet.
- Acquired 8.3 acres in the I-55 Corridor
submarket of Chicago and commenced construction of DCT Greenwood, a
140,000 square foot distribution building. Construction is
scheduled to be complete in Q4 2017.
- Acquired 3.8 acres in the Southwest
Broward County submarket of Miami, through a 90 percent-owned joint
venture, to develop Seneca Commerce Center Building IV, a 62,000
square foot distribution building. The building is located in DCT
Industrial’s Seneca Commerce Center development project, a
five-building industrial park that will total 719,000 square feet.
The Company also commenced construction on Building I in the
development, a 222,000 square foot building scheduled to be
complete in Q3 2017.
- Commenced construction of SCLA Building
18, a 370,000 square foot building located in Victorville, CA,
which is owned by an unconsolidated joint venture.3 The building is
42.0 percent pre-leased with construction scheduled to be complete
in Q3 2017.
- Commenced construction of DCT Miller
Road, a 270,000 square foot building located in the Northwest
submarket of Dallas. Construction is scheduled to be complete in Q3
2017.
- Commenced construction of DCT Commerce
Center Building E, a 162,000 square foot building located in the
Airport West submarket of Miami. The building is 82.6 percent
pre-leased with construction scheduled to be complete in Q4
2017.
- Commenced construction of DCT DFW Trade
Center, a 112,000 square foot building located in the DFW Airport
submarket of Dallas. Construction is scheduled to be complete in Q3
2017.
3 DCT Industrial does not control this unconsolidated joint
venture.
Dispositions
Since September 30, 2016, DCT Industrial sold four buildings
totaling 925,000 square feet for total gross proceeds of $20.1
million with an expected year-one weighted-average cash yield of
6.9 percent.
The table below summarizes dispositions since September 30,
2016:
Market Submarket Square Feet
Occupancy Closed Indianapolis (3 buildings)
East County 823,000
47.7 % Nov-16 Dallas Northeast
102,000 100.0 %
Dec-16 Total/Weighted Average 925,000 53.5 %
Capital Markets
Since September 30, 2016, DCT Industrial raised $37.1 million in
net proceeds from the sale of common stock through its “at the
market” equity offering. The Company issued approximately 796,000
shares at a weighted-average price of $47.17 per share. The
proceeds were used to fund development and general corporate
activities.
Dividend
DCT Industrial’s Board of Directors declared a $0.31 per share
quarterly cash dividend, payable on April 12, 2017 to stockholders
of record as of March 31, 2017.
Guidance
The Company’s guidance for 2017 Net Earnings (EPS) is between
$0.46 and $0.56 per diluted share.
The Company’s 2017 FFO guidance, as adjusted, is between $2.32
and $2.42 per diluted share.
The Company’s guidance excludes any potential non-cash interest
expense related to hedge ineffectiveness and gains related to
future dispositions.
For additional details, assumptions and definitions related to
the Company’s 2017 guidance, please refer to page 8 in DCT
Industrial’s Q4 2016 supplemental reporting package.
Conference Call
Information
DCT Industrial will host a conference call to discuss Q4 and
full-year 2016 results on Friday, February 3, 2017 at 11:00 a.m.
Eastern Time. Stockholders and interested parties may listen to a
live broadcast of the conference call by dialing (877) 506-6112 or
(412) 902-6686. A telephone replay will be available through
Wednesday, May 3, 2017 and can be accessed by dialing (877)
344-7529 or (412) 317-0088 and entering the passcode 10098822. A
live webcast of the conference call will be available in the
Investors section of the DCT Industrial website at
www.dctindustrial.com. A webcast replay will also be available
shortly following the call until February 3, 2018.
Supplemental information is available in the Investors section
of the Company’s website at www.dctindustrial.com or by e-mail
request to investorrelations@dctindustrial.com. Interested parties
may also obtain supplemental information from the SEC’s website at
www.sec.gov.
About DCT Industrial
Trust®
DCT Industrial is a leading real estate company specializing in
the ownership, acquisition, development, leasing and management of
bulk-distribution and light-industrial properties in high-demand
distribution markets in the U.S. DCT’s actively-managed portfolio
is strategically located near population centers and
well-positioned to take advantage of market dynamics. As of
December 31, 2016, the Company owned interests in approximately
74.0 million square feet of properties leased to approximately 900
customers. DCT maintains a Baa2 rating from Moody’s Investors
Service and a BBB from Standard & Poor’s Rating Services.
Additional information is available at www.dctindustrial.com.
Click here to subscribe to
Mobile Alerts for DCT Industrial.
DCT INDUSTRIAL TRUST INC. AND
SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share
information)
December 31, 2016 December 31, 2015
ASSETS (unaudited) Land $ 1,075,995 $ 1,009,905 Buildings
and improvements 3,202,293 2,886,859 Intangible lease assets 78,356
84,420 Construction in progress 72,829 159,397
Total investment in properties 4,429,473 4,140,581 Less
accumulated depreciation and amortization (839,773 ) (742,980 )
Net investment in properties 3,589,700 3,397,601 Investments
in and advances to unconsolidated joint ventures 95,606
82,635
Net investment in real estate 3,685,306
3,480,236 Cash and cash equivalents 10,286 18,412 Restricted cash
7,346 31,187
Straight-line rent and other receivables,
net of allowance for doubtful accounts of $379 and $335,
respectively
79,889 60,357 Other assets, net 25,315 15,964 Assets held for sale
— 26,199
Total assets $ 3,808,142 $
3,632,355
LIABILITIES AND EQUITY Liabilities:
Accounts payable and accrued expenses $ 93,097 $ 108,788
Distributions payable 29,622 26,938 Tenant prepaids and security
deposits 32,884 29,663 Other liabilities 37,403 18,398 Intangible
lease liabilities, net 21,421 22,070 Line of credit 75,000 70,000
Senior unsecured notes 1,351,969 1,276,097 Mortgage notes 201,959
210,375 Liabilities related to assets held for sale — 869
Total liabilities 1,843,355 1,763,198
Equity:
Preferred stock, $0.01 par value,
50,000,000 shares authorized, none outstanding
— — Shares-in-trust, $0.01 par value, 100,000,000 shares
authorized, none outstanding — —
Common stock, $0.01 par value, 500,000,000
shares authorized 91,516,113 and 88,313,891 shares
issued and outstanding as of December 31, 2016 and
December 31, 2015, respectively
915 883 Additional paid-in capital 2,884,806 2,766,193
Distributions in excess of earnings (1,005,728 ) (992,010 )
Accumulated other comprehensive loss (17,944 ) (23,082 )
Total
stockholders’ equity 1,862,049 1,751,984 Noncontrolling
interests 102,738 117,173
Total equity
1,964,787 1,869,157
Total liabilities and
equity $ 3,808,142 $ 3,632,355
DCT INDUSTRIAL TRUST INC. AND
SUBSIDIARIES
Consolidated Statements of
Operations
(in thousands, except per share
information)
Three Months Ended December 31, Twelve Months
Ended December 31, 2016 2015
2016 2015 REVENUES: (unaudited)
(unaudited) Rental revenues $ 101,853 $ 88,822 $ 391,360 $ 353,091
Institutional capital management and other fees 377 472
1,416 1,606
Total revenues 102,230
89,294 392,776 354,697
OPERATING EXPENSES: Rental expenses 8,967 8,539 36,797
35,995 Real estate taxes 15,291 14,137 60,020 56,219 Real estate
related depreciation and amortization 41,090 39,134 161,334 156,010
General and administrative 8,290 9,665 29,280 34,577 Impairment
losses — 1,914 — 2,285 Casualty gain (475 ) (414 ) (2,753 ) (414 )
Total operating expenses 73,163 72,975 284,678
284,672
Operating income 29,067 16,319 108,098
70,025
OTHER INCOME (EXPENSE): Development profit,
net of taxes — — — 2,627
Equity in earnings of unconsolidated
joint ventures, net
1,135 937 4,118 7,273 Gain on dispositions of real estate interests
6,843 36,785 49,895 77,871 Interest expense (16,205 ) (13,464 )
(64,035 ) (54,055 ) Interest and other income (expense) (30 ) 31
551 (40 ) Income tax expense and other taxes (81 ) (24 ) (591 )
(736 )
Consolidated net
income of DCT Industrial Trust Inc.
20,729 40,584 98,036 102,965
Net income attributable to
noncontrolling interests
(1,038 ) (2,035 ) (4,976 ) (8,917 )
Net income attributable to
common stockholders
19,691 38,549 93,060 94,048
Distributed and undistributed earnings
allocated to participating securities
(172 ) (168 ) (669 ) (678 )
Adjusted net income
attributable to common stockholders
$ 19,519 $ 38,381 $ 92,391 $ 93,370
NET EARNINGS PER COMMON SHARE: Basic $ 0.21 $
0.44 $ 1.03 $ 1.06 Diluted $ 0.21 $
0.43 $ 1.03 $ 1.05
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING: Basic 91,069 88,241 89,867 88,182
Diluted 91,185 88,614 89,982 88,514
Distributions declared per common share $ 0.31 $ 0.28 $ 1.18
$ 1.12
Reconciliation of Net Income
Attributable to Common Stockholders to Funds from
Operations
(unaudited, in thousands, except per
share and unit data)
For the Three MonthsEnded
December 31,
For the Twelve MonthsEnded
December 31,
2016 2015 2016
2015 Reconciliation of net income attributable to
common stockholders to FFO: Net income attributable to common
stockholders $ 19,691 $ 38,549 $ 93,060 $ 94,048 Adjustments: Real
estate related depreciation and amortization 41,090 39,134 161,334
156,010 Equity in earnings of unconsolidated joint ventures, net
(1,135 ) (937 ) (4,118 ) (7,273 ) Equity in FFO of unconsolidated
joint ventures(1) 2,946 2,478 10,267 9,902 Impairment losses on
depreciable real estate — 1,914 — 2,285
Gain on dispositions of real estate
interests
(6,843 ) (36,785 ) (49,895 ) (77,871 )
Gain (loss) on dispositions of
non-depreciable real estate
43 (18 ) 43 — Noncontrolling interest in the above adjustments
(1,571 ) (401 ) (5,576 ) (4,487 ) FFO attributable to unitholders
2,144 2,060 8,930 8,274 FFO
attributable to common stockholders and unitholders – basic and
diluted(2) 56,365 45,994 214,045 180,888
Adjustments: Acquisition costs 524 4 1,084 1,943 Severance
costs — 3,558 — 3,558 Hedge ineffectiveness (non-cash) (867 ) —
(414 ) —
FFO, as adjusted, attributable to common
stockholders and unitholders – basic and diluted
$ 56,022 $ 49,556 $ 214,715 $ 186,389
FFO per common share and unit – basic $ 0.59 $ 0.49
$ 2.27 $ 1.95 FFO per common share and unit –
diluted $ 0.59 $ 0.49 $ 2.27 $ 1.94
FFO, as adjusted, per common share and unit – basic $ 0.59
$ 0.53 $ 2.28 $ 2.00 FFO, as adjusted,
per common share and unit – diluted $ 0.59 $ 0.53 $
2.27 $ 2.00 FFO weighted average common shares
and units outstanding: Common shares for net earnings per share
91,069 88,241 89,867 88,182 Participating securities 569 555 563
560 Units 3,581 4,136 3,912 4,227 FFO
weighted average common shares, participating securities and units
outstanding – basic 95,219 92,932 94,342 92,969 Dilutive common
stock equivalents 116 373 115 332 FFO
weighted average common shares, participating securities and units
outstanding – diluted 95,335 93,305 94,457
93,301 (1) Equity in FFO of unconsolidated joint
ventures is determined as our share of FFO from each unconsolidated
joint venture. See DCT Industrial's fourth quarter 2016
supplemental reporting package for additional information. (2) FFO
as defined by the National Association of Real Estate Investment
Trusts (NAREIT).
Guidance
The Company is providing the following
guidance:
Range for the Full-Year 2017 Low
High Guidance: Net earnings per common
share-diluted (EPS) $ 0.46 $ 0.56 Adjustments: Real
estate related depreciation and amortization(1) 1.85 1.85
Noncontrolling interest in adjustments 0.01 0.01 FFO, as
adjusted, per common share and unit-diluted(2) $ 2.32
$ 2.42 (1) Includes proportionate share of
real estate depreciation and amortization from unconsolidated joint
ventures. (2) The Company’s guidance excludes potential non-cash
interest expense related to hedge ineffectiveness and gains related
to future dispositions.
The following table shows the
calculation of our Fixed Charge Coverage Ratio for the three and
twelve months endedDecember 31, 2016 and 2015 (unaudited, in
thousands):
For the Three Months
EndedDecember 31,
For the Twelve Months
EndedDecember 31,
2016 2015 2016
2015 Net income attributable to common
stockholders $ 19,691 $ 38,549 $ 93,060 $ 94,048 Interest expense
16,205 13,464 64,035 54,055
Proportionate share of interest expense
from unconsolidated joint ventures(1)
273 274 1,100 1,244 Real estate related depreciation and
amortization 41,090 39,134 161,334 156,010
Proportionate share of real estate related
depreciation and amortization from unconsolidated joint
ventures(1)
1,205 1,102 4,500 4,739 Income tax expense and other taxes 81 24
591 736
Stock-based compensation(2)
1,542 5,063 5,695 8,945 Noncontrolling interests 1,038 2,035 4,976
8,917 Non-FFO gain on dispositions of real estate interests (6,800
) (36,803 ) (49,852 ) (77,871 ) Impairment losses —
1,914 — 2,285 Adjusted
EBITDA $ 74,325 $ 64,756 $ 285,439 $ 253,108
CALCULATION OF FIXED CHARGES: Interest expense $
16,205 $ 13,464 $ 64,035 $ 54,055 Capitalized interest 2,254 3,796
9,902 15,849 Amortization of loan costs and debt premium/discount
(255 ) 232 (942 ) 508
Other non-cash interest expense
(156 ) (1,025 ) (3,680 ) (4,097 )
Proportionate share of interest expense
from unconsolidatedjoint ventures(1)
273 274 1,100
1,244
Total fixed charges
$ 18,321 $ 16,741 $ 70,415 $ 67,559
Fixed charge coverage ratio 4.1x 3.9x
4.1x 3.7x (1) Amounts are determined based on
our ownership share of such amounts from the unconsolidated joint
ventures. See DCT Industrial's fourth quarter 2016 supplemental
reporting package for additional information. (2) Includes
approximately $3.6 million of severance costs for the three and
twelve months ended December 31, 2015.
The following table is a reconciliation
of our reported net income attributable to common stockholders to
our netoperating income for the three and twelve months
ended December 31, 2016 and 2015 (unaudited, in thousands):
For the Three Months
EndedDecember 31,
For the Twelve Months
EndedDecember 31,
2016 2015 2016
2015 Reconciliation of net income attributable to common
stockholders to NOI: Net income attributable to common
stockholders $ 19,691 $ 38,549 $ 93,060 $ 94,048 Net income
attributable to noncontrolling interests 1,038 2,035 4,976 8,917
Income tax expense and other taxes 81 24 591 736 Interest and other
(income) expense 30 (31 ) (551 ) 40 Interest expense 16,205 13,464
64,035 54,055 Equity in earnings of unconsolidated joint ventures,
net (1,135 ) (937 ) (4,118 ) (7,273 ) General and administrative
expense 8,290 9,665 29,280 34,577 Real estate related depreciation
and amortization 41,090 39,134 161,334 156,010 Impairment losses —
1,914 — 2,285 Development profit, net of taxes — — — (2,627 ) Gain
on dispositions of real estate interests (6,843 ) (36,785 ) (49,895
) (77,871 ) Casualty gain (475 ) (414 ) (2,753 ) (414 )
Institutional capital management and other fees (377 )
(472 ) (1,416 ) (1,606 ) Total NOI 77,595
66,146 294,543 260,877 Less NOI – non-same store properties
(12,783 ) (5,694 ) (56,551 ) (34,550 ) Same
store NOI 64,812 60,452 237,992 226,327 Less revenue from lease
terminations (8 ) (106 ) (359 ) (2,052 ) Add early termination
straight-line rent adjustment 5 (1 )
167 255 Same store NOI, excluding revenue from
lease terminations 64,809 60,345 237,800 224,530 Less straight-line
rents, net of related bad debt expense (1,088 ) (1,764 ) (4,398 )
(3,802 ) Less amortization of above/(below) market rents
(594 ) (636 ) (2,204 ) (2,426 ) Same store
Cash NOI, excluding revenue from lease terminations $ 63,127
$ 57,945 $ 231,198 $ 218,302
Financial Measures
NOI is defined as rental revenues, which includes 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 properties such as amortization, depreciation, impairment,
interest expense, interest and other income, income tax expense and
other taxes 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.
We calculate Cash NOI as NOI excluding non-cash amounts recorded
for straight-line rents including related bad debt expense and the
amortization of above and below market rents. 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 or 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.
Same Store Properties are determined independently for each
period presented, quarter-to-date and year-to-date, by including
all consolidated operating properties that have been owned for the
entire current and prior period presented. We consider NOI and Cash
NOI from Same Store Properties to be a useful measure in evaluating
our financial performance and to improve comparability between
periods by including only properties owned for comparable
periods.
DCT Industrial believes that net income (loss) attributable to
common stockholders, as defined by GAAP, is the most appropriate
earnings measure. However, DCT Industrial considers funds from
operations (“FFO”), as defined by the National Association of Real
Estate Investment Trusts (“NAREIT”), to be a useful supplemental,
non-GAAP measure of DCT Industrial’s operating performance. NAREIT
developed FFO as a relative measure of performance of an equity
REIT in order to recognize that the value of income-producing real
estate historically has not depreciated on the basis determined
under GAAP. FFO is generally defined as net income attributable to
common stockholders, calculated in accordance with GAAP, plus real
estate-related depreciation and amortization, less gains from
dispositions of operating real estate held for investment purposes,
plus impairment losses on depreciable real estate and impairments
of in substance real estate investments in investees that are
driven by measurable decreases in the fair value of the depreciable
real estate held by the unconsolidated joint ventures and
adjustments to derive DCT Industrial’s proportionate share of FFO
of unconsolidated joint ventures. We exclude gains and losses on
business combinations and include the gains or losses from
dispositions of properties which were acquired or developed with
the intention to sell or contribute to an investment fund in our
definition of FFO. Although the NAREIT definition of FFO predates
the guidance for accounting for gains and losses on business
combinations, we believe that excluding such gains and losses is
consistent with the key objective of FFO as a performance measure.
We also present FFO, as adjusted, which excludes hedge
ineffectiveness, certain severance costs, acquisition costs, debt
modification costs and impairment losses on properties which are
not depreciable. We believe that FFO excluding hedge
ineffectiveness, certain severance costs, 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.
We calculate Fixed Charge Coverage Ratio as Adjusted EBITDA
divided by total 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 non-cash
interest expense. DCT Industrial considers Fixed Charge Coverage
Ratio to be an appropriate supplemental measure of our ability to
satisfy fixed financing obligations.
Forward-Looking Statements
We make statements in this report that are considered
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, or the Securities Act, and
Section 21E of the Securities Exchange Act of 1934, as amended, or
the Exchange Act, which are usually identified by the use of words
such as “anticipates,” “believes,” “estimates,” “expects,”
“intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,”
and variations of such words or similar expressions and includes
statements regarding our anticipated yields. We intend these
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995 and are including this
statement for purposes of complying with those safe harbor
provisions. These forward-looking statements reflect our current
views about our plans, intentions, expectations, strategies and
prospects, which are based on the information currently available
to us and on assumptions we have made. Although we believe that our
plans, intentions, expectations, strategies and prospects as
reflected in or suggested by those forward-looking statements are
reasonable, we can give no assurance that the plans, intentions,
expectations or strategies will be attained or achieved.
Furthermore, actual results may differ materially from those
described in the forward-looking statements and will be affected by
a variety of risks and factors that are beyond our control
including, without limitation: national, international, regional
and local economic conditions, the general level of interest rates
and the availability of capital; the competitive environment in
which we operate; real estate risks, including fluctuations in real
estate values and the general economic climate in local markets and
competition for tenants in such markets; decreased rental rates or
increasing vacancy rates; defaults on or non-renewal of leases by
tenants; acquisition and development risks, including failure of
such acquisitions and development projects to perform in accordance
with projections; the timing of acquisitions, dispositions and
development; natural disasters such as fires, floods, tornadoes,
hurricanes and earthquakes; energy costs; the terms of governmental
regulations that affect us and interpretations of those
regulations, including the cost of compliance with those
regulations, changes in real estate and zoning laws and increases
in real property tax rates; financing risks, including the risk
that our cash flows from operations may be insufficient to meet
required payments of principal, interest and other commitments;
lack of or insufficient amounts of insurance; litigation, including
costs associated with prosecuting or defending claims and any
adverse outcomes; the consequences of future terrorist attacks or
civil unrest; environmental liabilities, including costs, fines or
penalties that may be incurred due to necessary remediation of
contamination of properties presently owned or previously owned by
us; and other risks and uncertainties detailed in the section of
our Form 10-K filed with the SEC and updated on Form 10-Q entitled
“Risk Factors.” In addition, our current and continuing
qualification as a real estate investment trust, or REIT, involves
the application of highly technical and complex provisions of the
Internal Revenue Code of 1986, or the Code, and depends on our
ability to meet the various requirements imposed by the Code
through actual operating results, distribution levels and diversity
of stock ownership. We assume no obligation to update publicly any
forward looking statements, whether as a result of new information,
future events or otherwise.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170202006283/en/
DCT Industrial TrustMelissa Sachs,
303-597-2400investorrelations@dctindustrial.com
Dct Industrial Trust (delisted) (NYSE:DCT)
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