Dct Industrial Trust (NYSE:DCT)
Historical Stock Chart
2 Years : From May 2011 to May 2013
DCT Industrial Trust Inc.® (NYSE: DCT), a leading
industrial real estate company, today announced financial results for
the quarter ending March 31, 2012.
“2012 is off to a great start. I am very pleased with our operating and
financial results as well as our capital deployment efforts,” said Phil
Hawkins, President and Chief Executive Officer of DCT
Industrial. “Overall leasing activity is positive and industrial leasing
fundamentals continue to improve. We also have an active pipeline of
capital deployment opportunities under consideration, the majority of
which are located in coastal markets.”
Funds from Operations (“FFO”), as adjusted, attributable to common
stockholders and unitholders for the first quarter of 2012 totaled $29.0
million, or $0.11 per diluted share, compared with $23.4 million, or
$0.09 per diluted share, for the first quarter of 2011. These results
exclude $0.2 million of acquisition costs for the quarter ending March
31, 2012 and $0.4 million of acquisition costs for the quarter ending
March 31, 2011.
Net loss attributable to common stockholders for the first quarter of
2012 was $6.0 million, or $0.03 per diluted share, compared with a net
loss of $8.5 million, or $0.04 per diluted share, reported for the first
quarter of 2011.
Property Results and Leasing Activity
The Company signed leases totaling 3.3 million square feet in the first
quarter of 2012, a 13 percent increase over the first quarter of 2011.
Rental rates on signed leases increased 3.1 percent on a GAAP basis and
decreased 3.7 percent on a cash basis compared to prior leases. Over the
previous four quarters, rental rates on signed leases increased 2.0
percent on a GAAP basis and decreased 5.7 percent on a cash basis. The
Company’s tenant retention rate was 70.9 percent in the first quarter of
2012.
As of March 31, 2012, DCT Industrial owned 408 consolidated properties,
totaling 58.2 million square feet with occupancy of 90.1 percent,
compared to 90.5 percent as of December 31, 2011. In addition, 0.7
million square feet, or 1.3 percent of DCT Industrial’s total
consolidated portfolio, was leased but not occupied.
Net operating income (“NOI”) was $47.8 million in the first quarter of
2012, compared with $42.3 million reported for the first quarter of
2011. First quarter of 2012 same-store NOI, excluding revenue from lease
terminations, increased 9.0 percent on a cash basis and increased 3.8
percent on a GAAP basis, when compared to the same period last year.
Occupancy of same-store properties averaged 90.8 percent in the first
quarter of 2012, an increase of 200 basis-points compared with an
average of 88.8 percent in the first quarter of 2011. Occupancy of
same-store properties ended at 90.8 percent as of March 31, 2012.
Investment Activity
Acquisitions
Through April, DCT Industrial acquired three buildings totaling $26.4
million located in Atlanta, Chicago and Phoenix.
In January, the Company acquired a 76,000 square foot, Class A
distribution building located in the Southwest submarket of Phoenix. The
building was purchased from the current user who is expected to vacate
in July 2012. DCT Industrial is actively marketing the building to new
users with strong early interest. DCT Industrial anticipates a
stabilized cash yield of 10.1 percent.
In April, DCT Industrial acquired a 157,000 square foot,
bulk-distribution building in the Northmont Business Park of Atlanta,
one of Northeast Atlanta’s premier master planned industrial parks.
Built in 2001, this Class A facility is currently 100 percent occupied
by a single tenant. With this acquisition, DCT now owns 8 buildings
totaling 917,000 square feet within Northmont Business Park. The Company
anticipates a year-one cash yield of 6.5 percent on the building.
Finally, also in April, the Company acquired a 304,000 square foot
distribution building in the Central DuPage submarket of Chicago. This
Class A, rear-loaded facility was built in 2000 and is 100 percent
leased and 50.2 percent occupied. The Company anticipates a stabilized
cash yield of 7.0 percent on the building.
The table below represents a summary of the acquisitions closed since
January 1, 2012:
Market
Submarket
Square Feet
Occupancy
Closed
Phoenix, AZ(1)
Southwest
76,000
100.0
%
Jan-12
Atlanta, GA
Northeast I-85
157,000
100.0
%
Apr-12
Chicago, IL
Central DuPage
304,000
50.2
%
Apr-12
Total / Weighted Average
537,000
71.8
%
(1) Tenant expected to vacate the building in July 2012.
Dispositions
Year-to-date, the Company has completed three dispositions in Atlanta
and Charlotte, totaling 184,000 square feet with combined proceeds of
$8.4 million and with a projected year-one weighted average cash yield
of 2.4 percent. The Charlotte disposition completes DCT Industrial’s
exit from that market.
The table below represents a summary of the dispositions closed since
January 1, 2012:
Market
Submarket
Square Feet
Occupancy
Closed
Atlanta, GA
Northeast I-85
85,000
85.5%
Jan-12
Atlanta, GA
Northeast I-85
19,000
100.0%
Feb-12
Charlotte, NC
Southwest
80,000
0.0%
May-12
Total / Weighted Average
184,000
49.7%
Development
As previously announced, DCT Industrial acquired a 32.6 acre land parcel
within the I-55 South industrial submarket of Chicago in Boldt Park. The
Company plans to start construction in May on DCT 55, a 604,000 square
foot, cross-dock facility. The building will incorporate DCT
Industrial’s sustainable design initiative and DCT Industrial will seek
LEED certification on the building.
“The I-55 submarket is one of the most desirable distribution areas in
Chicago, with favorable supply dynamics for buildings of this size,”
said Neil Doyle, the Company’s Managing Director, Central Region. “We
are confident that DCT 55 will be well-received in the market given
strong user activity and the building’s state-of-the-art design.”
In March, DCT Industrial commenced construction on Building A at DCT
Commerce Center at Pan American West Industrial Park, the first of a
two-building development project in the Airport West submarket of Miami.
The 167,000 square foot, class-A, rear-load distribution building is
being built on one of the last remaining parcels of developable land in
what is considered the top sub-market in Miami. Construction is expected
to be completed in the third quarter of 2012.
In April, the Company announced the signing of a long-term lease for all
of Phase 2 at its Dulles Summit development project in the Dulles
Corridor submarket of Washington, D.C. The 179,000 square foot lease is
with a subsidiary of a Fortune 500 company. The Company commenced
development of Phase 2, a two building, 179,000 square foot project, in
late 2011. The first building will be finished in the first quarter of
2013 and the second building will be complete in the third quarter of
2013.
Dividend
DCT Industrial’s Board of Directors has declared a $0.07 per share
quarterly cash dividend, payable on July 18, 2012 to stockholders of
record as of July 6, 2012.
Guidance
The Company increased and narrowed 2012 FFO guidance, as adjusted, to
$0.38 to $0.42 per diluted share, up from $0.36 to $0.41. Additionally,
net loss attributable to common stockholders and unitholders is expected
to be between $(0.12) and $(0.08) per diluted share.
The Company’s guidance excludes real estate gains and losses and
acquisition costs.
Conference Call Information
DCT Industrial will host a conference call to discuss first quarter 2012
on Thursday, May 3, 2012 at 11:00 a.m. Eastern Time. Stockholders and
interested parties may listen to a live broadcast of the conference call
by dialing (877) 317-6789 or (412) 317-6789. A telephone replay will be
available until 9 a.m. Eastern Time, Thursday, May 17, 2012 and can be
accessed by dialing (877) 344-7529 or (412) 317-0088 and entering the
passcode 10012767. A live webcast of the conference call will be
available in the Investors section of the DCT Industrial website at www.dctindustrial.com.
A webcast replay will also be available shortly following the call until
May 3, 2013.
Supplemental information is available in the Investors section of the
Company’s website at www.dctindustrial.com
or by e-mail request at investorrelations@dctindustrial.com.
Interested parties may also obtain supplemental information from the
SEC’s website at www.sec.gov.
About DCT Industrial Trust Inc.®
DCT Industrial Trust Inc. is a leading industrial real estate company
specializing in the acquisition, development, leasing and management of
bulk distribution and light industrial properties in high-volume
distribution markets in the U.S. and Mexico. As of March 31, 2012, the
Company owned interests in approximately 75.4 million square feet of
properties leased to approximately 900 customers, including 17.2 million
square feet operated on behalf of five institutional capital management
partners. Additional information is available at www.dctindustrial.com.
DCT INDUSTRIAL TRUST INC. AND SUBSIDIARIESConsolidated
Balance Sheets(in thousands, except share information)
March 31,
2012
December 31,
2011
ASSETS:
(unaudited)
Land
$
654,573
$
647,552
Building and improvements
2,392,386
2,393,346
Intangible lease assets
83,633
84,779
Construction in progress
34,855
35,386
Total investment in properties
3,165,447
3,161,063
Less accumulated depreciation and amortization
(610,403
)
(589,314
)
Net investment in properties
2,555,044
2,571,749
Investments in and advances to unconsolidated joint ventures
139,417
139,278
Net investment in real estate
2,694,461
2,711,027
Cash and cash equivalents
10,980
12,834
Notes receivable
1,010
1,053
Deferred loan costs, net
8,038
8,567
Straight-line rent and other receivables, net of allowance for
doubtful accounts of $1,418 and $1,256, respectively
44,549
42,349
Other assets, net
20,103
17,468
Total assets
$
2,779,141
$
2,793,298
LIABILITIES AND EQUITY:
Liabilities:
Accounts payable and accrued expenses
$
34,695
$
45,785
Distributions payable
19,140
19,057
Tenant prepaids and security deposits
22,772
22,864
Other liabilities
29,066
29,797
Intangible lease liability, net
18,340
18,897
Line of credit
25,000
—
Senior unsecured notes
935,000
935,000
Mortgage notes
315,230
317,783
Total liabilities
1,399,243
1,389,183
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, 350,000,000 shares authorized247,104,435
and 245,943,100 shares issued and outstanding as ofMarch 31,
2012 and December 31, 2011, respectively
2,471
2,459
Additional paid-in capital
2,026,288
2,018,075
Distributions in excess of earnings
(806,580
)
(783,229
)
Accumulated other comprehensive loss
(27,812
)
(29,336
)
Total stockholders’ equity
1,194,367
1,207,969
Noncontrolling interests
185,531
196,146
Total equity
1,379,898
1,404,115
Total liabilities and equity
$
2,779,141
$
2,793,298
DCT INDUSTRIAL TRUST INC. AND SUBSIDIARIESConsolidated
Statements of Operations(unaudited, in thousands,
except per share information)
Three Months Ended
March 31,
2012
2011
REVENUES:
Rental revenues
$
66,099
$
59,879
Institutional capital management and other fees
1,055
1,019
Total revenues
67,154
60,898
OPERATING EXPENSES:
Rental expenses
8,121
8,422
Real estate taxes
10,227
9,139
Real estate related depreciation and amortization
32,139
29,846
General and administrative
5,785
7,056
Casualty gains
(155
)
—
Total operating expenses
56,117
54,463
Operating income
11,037
6,435
OTHER INCOME AND EXPENSE:
Equity in loss of unconsolidated joint ventures, net
(854
)
(1,357
)
Interest expense
(17,028
)
(15,511
)
Interest and other income
197
85
Income tax expense and other taxes
(268
)
(40
)
Loss from continuing operations
(6,916
)
(10,388
)
Income from discontinued operations
86
543
Consolidated net loss of DCT Industrial Trust Inc.
(6,830
)
(9,845
)
Net loss attributable to noncontrolling interests
826
1,309
Net loss attributable to common stockholders
(6,004
)
(8,536
)
Distributed and undistributed earnings allocated to participating
securities
(128
)
(118
)
Adjusted net loss attributable to common stockholders
$
(6,132
)
$
(8,654
)
EARNINGS PER COMMON SHARE – BASIC AND DILUTED:
Loss from continuing operations
$
(0.03
)
$
(0.04
)
Income from discontinued operations
0.00
0.00
Net loss attributable to common stockholders
$
(0.03
)
$
(0.04
)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted
246,367
233,288
Reconciliation of Net Loss Attributable to Common Stockholders
to Funds from Operations(1)(unaudited, in
thousands, except per share and unit data)
Three Months Ended
March 31,
2012
2011
Net loss attributable to common stockholders
$
(6,004
)
$
(8,536
)
Adjustments:
Real estate related depreciation and amortization
32,166
31,143
Equity in loss of unconsolidated joint ventures, net
854
1,357
Equity in FFO of unconsolidated joint ventures
2,834
316
Impairment losses on depreciable real estate
—
42
Gain on dispositions of real estate interests
(88
)
—
Noncontrolling interest in the operating partnership's share of the
above adjustments
(3,744
)
(3,623
)
FFO attributable to unitholders
2,709
2,261
FFO attributable to common stockholders and unitholders, basic and
diluted(1)
28,727
22,960
Adjustments:
Acquisition costs(2)
237
400
FFO, as adjusted, attributable to common stockholders and
unitholders, basic and diluted
$
28,964
$
23,360
FFO per common share and unit, basic and diluted
$
0.11
$
0.09
FFO, as adjusted, per common share and unit, basic and diluted
$
0.11
$
0.09
FFO weighted average common shares and units outstanding:
Common shares for earnings per share – basic
246,367
233,288
Participating securities
1,580
1,627
Units
25,731
25,513
FFO weighted average common shares, participating securities and
units outstanding - basic
273,678
260,428
Dilutive common stock equivalents
584
539
FFO weighted average common shares, participating securities and
units outstanding - diluted
274,262
260,967
(1)
Funds from Operations, FFO, as defined by the National Association
of Real Estate Investment Trusts (NAREIT).
(2)
Excluding amounts attributable to noncontrolling interests.
Guidance
The Company is providing the following guidance:
Range for the Full-Year2012
Guidance:
Low
High
Earnings per common share - diluted
$
(0.12
)
$
(0.08
)
Impairments and acquisition cost
0.01
0.01
Real estate related depreciation and amortization net of
noncontrolling interests(1)
0.49
0.49
FFO, as adjusted, per common share and unit-diluted(2)
$
0.38
$
0.42
(1) Includes pro rata share of real estate depreciation
and amortization from unconsolidated joint ventures.
(2) The Company’s guidance excludes real estate gains
and losses, impairments and acquisition costs.
The following table shows the calculation of our Fixed Charge
Coverage for the three months endedMarch 31, 2012 and
2011 (in thousands):
Three Months Ended
March 31,
CALCULATION OF ADJUSTED EBITDA
2012
2011
Net loss attributable to common stockholders
$
(6,004
)
$
(8,536
)
Interest expense(1)
17,028
15,511
Proportionate share of interest expense from unconsolidated joint
ventures
737
839
Real estate related depreciation and amortization(1)
32,166
31,143
Proportionate share of real estate related depreciation and
amortization from unconsolidated joint ventures
2,321
1,426
Income tax expense and other taxes(1)
268
40
Stock-based compensation amortization
980
1,381
Noncontrolling interests(1)
(826
)
(1,309
)
Non-FFO gains on dispositions of real estate interests
(88
)
—
Impairment losses(1)
—
42
Adjusted EBITDA
$
46,582
$
40,537
CALCULATION OF FIXED CHARGES
Interest expense (1)
$
17,028
$
15,511
Capitalized interest
693
761
Amortization of loan costs and debt premium/discount
(282
)
(213
)
Proportionate share of interest expense from unconsolidated joint
ventures
737
839
Total fixed charges
$
18,176
$
16,898
Fixed charge coverage
2.6
2.4
(1) Includes amounts related to discontinued operations.
The following table is a reconciliation of our reported “Loss
from continuing operations” to our net operating income for thethree
months ended March 31, 2012 and 2011 (in thousands):
Three Months Ended
March 31,
Reconciliation of loss from continuing operations to NOI:
2012
2011
Loss from continuing operations
$
(6,916
)
$
(10,388
)
Income tax expense and other taxes
268
40
Interest and other income
(197
)
(85
)
Interest expense
17,028
15,511
Equity in loss of unconsolidated joint ventures, net
854
1,357
General and administrative
5,785
7,056
Real estate related depreciation and amortization
32,139
29,846
Casualty gains
(155
)
—
Institutional capital management and other fees
(1,055
)
(1,019
)
Total net operating income
47,751
42,318
Less net operating income- non-same store properties
(4,430
)
(579
)
Same store GAAP net operating income
43,321
41,739
Less revenue from lease terminations
(73
)
(54
)
Same store GAAP net operating income, excluding revenue from lease
terminations
43,248
41,685
Less straight-line rents, net of related bad debt expense
(1,078
)
(3,014
)
Add back amortization of above/(below) market rents
(142
)
(115
)
Same store cash net operating income, excluding revenue from lease
terminations
$
42,028
$
38,556
Financial Measures
Net operating income (“NOI”) is defined as rental revenues, including
expense reimbursements, less rental expenses and real estate taxes,
which excludes institutional capital management fees, depreciation,
amortization, casualty gains, impairment, general and administrative
expenses, equity in losses of unconsolidated joint ventures, interest
expense, interest and other income and income tax expense and other
taxes. We consider NOI to be an appropriate supplemental performance
measure because it reflects the operating performance of our properties
and excludes certain items that are not considered to be controllable in
connection with the management of the property such as depreciation,
amortization, impairment, general and administrative expenses, interest
income, and interest expense. Additionally, lease termination revenue is
excluded as it is not considered to be indicative of recurring operating
income. However those measures should not be viewed as alternative
measures of our financial performance since they exclude expenses which
could materially impact our results of operations. Further, our NOI may
not be comparable to that of other real estate companies, as they may
use different methodologies for calculating NOI, same store NOI
(excluding revenue from lease terminations), and cash basis same store
NOI (excluding revenue from lease terminations). Therefore, we believe
net income (loss) attributable to common stockholders, as defined by
GAAP, to be the most appropriate measure to evaluate our overall
financial performance.
DCT Industrial believes that net income (loss) attributable to common
stockholders, as defined by GAAP, is the most appropriate earnings
measure. However, DCT Industrial considers Funds from Operations
(“FFO”), as defined by the National Association of Real Estate
Investment Trusts (“NAREIT”), to be a useful supplemental, non-GAAP
measure of DCT Industrial’s operating performance. NAREIT developed FFO
as a relative measure of performance of an equity REIT in order to
recognize that the value of income-producing real estate historically
has not depreciated on the basis determined under GAAP. FFO is generally
defined as net income attributable to common stockholders, calculated in
accordance with GAAP, plus real estate-related depreciation and
amortization, less gains from dispositions of operating real estate held
for investment purposes, plus impairment losses on depreciable real
estate and impairments of in substance real estate investments in
investees that are driven by measurable decreases in the fair value of
the depreciable real estate held by the unconsolidated joint ventures
and adjustments to derive DCT Industrial’s pro rata share of FFO of
unconsolidated joint ventures. We exclude gains and losses on business
combinations and include the gains or losses from dispositions of
properties which were acquired or developed with the intention to sell
or contribute to an investment fund in our definition of FFO. Although
the NAREIT definition of FFO predates the guidance for accounting for
gains and losses on business combinations, we believe that excluding
such gains and losses is consistent with the key objective of FFO as a
performance measure. We also present FFO excluding severance,
acquisition costs, debt modification costs and impairment losses on
properties which are not depreciable. We believe that FFO excluding
severance, acquisition costs, debt modification costs and impairment
losses on non-depreciable real estate is useful supplemental information
regarding our operating performance as it provides a more meaningful and
consistent comparison of our operating performance and allows investors
to more easily compare our operating results. Readers should note that
FFO captures neither the changes in the value of DCT Industrial’s
properties that result from use or market conditions, nor the level of
capital expenditures and leasing commissions necessary to maintain the
operating performance of DCT Industrial’s properties, all of which have
real economic effect and could materially impact DCT Industrial’s
results from operations. NAREIT’s definition of FFO is subject to
interpretation, and modifications to the NAREIT definition of FFO are
common. Accordingly, DCT Industrial’s FFO may not be comparable to other
REITs’ FFO and FFO should be considered only as a supplement to net
income (loss) as a measure of DCT Industrial’s performance.
DCT Industrial calculates our fixed charge coverage calculation based on
adjusted EBITDA, which represents net loss attributable to DCT common
stockholders before interest, taxes, depreciation, amortization,
stock-based compensation expense, noncontrolling interest, impairment
losses and excludes non-FFO gains and losses on disposed assets and
business combinations. We use adjusted EBITDA to measure our operating
performance and to provide investors relevant and useful information
because it allows fixed income investors to view income from our
operations on an unleveraged basis before the effects of non-cash items,
such as depreciation and amortization and stock-based compensation
expense, and irregular items, such as non-FFO gains or losses from the
dispositions of real estate, impairment losses and gains and losses on
business combinations.
Forward-Looking Statements
We make statements in this document 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. 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 continuing
impact of the economic downturn and the strength of the economic
recovery and the potential impact of the financial crisis in Europe; 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 and
dispositions; natural disasters such as fires, 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 in the section of our Form 10-K filed with
the SEC and updated on Form 10-Q entitled “Risk Factors.” In addition,
our current and continuing qualification as a real estate investment
trust, or REIT, involves the application of highly technical and complex
provisions of the Internal Revenue Code of 1986, or the Code, and
depends on our ability to meet the various requirements imposed by the
Code through actual operating results, distribution levels and diversity
of stock ownership. We assume no obligation to update publicly any
forward looking statements, whether as a result of new information,
future events or otherwise.
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