Net Earnings of $0.22 per Diluted Share in
Q4; $1.11 per Diluted Share in 2017
FFO, as adjusted, of $0.63 per Diluted Share
in Q4; $2.45 per Diluted Share in 2017
Year-end Consolidated Operating Occupancy of
97.8 Percent
Rent Growth of 21.5 Percent on a
Straight-Line Basis and 5.9 Percent on a Cash Basis in Q4
Quarterly Same-Store Portfolio NOI Growth of
7.6 Percent on a Cash Basis and 2.9 Percent on a Straight-Line
Basis in Q4
Annual Same-Store Portfolio NOI Growth of
5.2 Percent on a Cash Basis and 3.4 Percent on a Straight-Line
Basis for Q4; 8.0 Percent on a Cash Basis and 4.0 Percent on a
Straight-Line Basis for 2017
2018 Net Earnings Guidance Between $1.18 and
$1.28 per Diluted Share; 2018 FFO Guidance Between $2.52 and $2.62
per Diluted Share
DCT Industrial Trust® (NYSE: DCT), a leading real estate
company, today announced financial results for the three months and
year ending December 31, 2017.
“DCT had a good fourth quarter, concluding another outstanding
year,” said Phil Hawkins, President and CEO of DCT Industrial.
“Given strong customer demand and low market vacancies, we expect
2018 will be another successful year for DCT - creating value as
well as growing rents and NOI.”
Net income attributable to common stockholders (“Net Earnings”)
for Q4 2017 was $0.22 per diluted share compared with $0.21 per
diluted share reported for Q4 2016, a 4.8 percent increase. For the
year ending December 31, 2017, Net Earnings was $1.11 per diluted
share, compared to $1.03 per diluted share, reported for the year
ending December 31, 2016, a 7.8 percent increase.
Funds from operations (“FFO”), as adjusted, attributable to
common stockholders and unitholders for Q4 2017 was $0.63 per
diluted share, compared with $0.59 per diluted share for Q4 2016, a
6.8 percent increase. For the year ending December 31, 2017, FFO,
as adjusted, was $2.45 per diluted share, compared with $2.27 per
diluted share, for the year ending December 31, 2016, a 7.9 percent
increase.
Property Results and Leasing
Activity
As of December 31, 2017, DCT Industrial owned 398 consolidated
operating properties, totaling 65.1 million square feet, with
occupancy of 97.8 percent, a decrease of 20 basis points compared
to both Q3 2017 and Q4 2016. In addition, approximately 374,000
square feet, or 0.6 percent, of DCT Industrial’s total consolidated
operating portfolio was leased but not occupied as of December 31,
2017, which does not take into consideration 731,000 square feet of
leased space in developments under construction or in
pre-development. During the fourth quarter, the impact of
acquisitions, dispositions and placing developments and
redevelopments into operations decreased consolidated operating
occupancy by 20 basis points. This does not include the impact of
the sale of 1.9 million square feet of 100 percent occupied
buildings in January 2018, which further reduces consolidated
operating occupancy by 10 basis points.
In Q4 2017, the Company signed leases totaling 2.3 million
square feet with rental rates increasing 21.5 percent on a
straight-line basis and 5.9 percent on a cash basis, compared to
the corresponding expiring leases. For the full-year, the Company
signed leases totaling 12.6 million square feet with rental rates
increasing 28.5 percent on a straight-line basis and 11.6 percent
on a cash basis. The Company’s tenant retention rate was 84.8
percent in Q4 2017 and 76.3 percent for the year ending December
31, 2017.
Net operating income (“NOI”) was $81.7 million in Q4 2017,
compared with $79.7 million in Q3 2017. For the year ending
December 31, 2017, NOI was $320.0 million compared to $294.5
million for the year ending December 31, 2016.
Comparing Q4 2017 to Q4 2016, NOI from the Quarterly Same-Store
Portfolio increased 7.6 percent on a cash basis and 2.9 percent on
a straight-line basis, and NOI from the Annual Same-Store Portfolio
increased 5.2 percent on a cash basis and 3.4 percent on a
straight-line basis. Additionally, NOI from the Annual Same-Store
Portfolio for the full-year 2017 increased 8.0 percent on a cash
basis and 4.0 percent on a straight-line basis when compared to the
full-year 2016. All same-store NOI amounts exclude revenue from
lease terminations.
Quarterly Same-Store Portfolio occupancy averaged 98.0 percent
in Q4 2017, an increase of 30 basis points from Q4 2016. Quarterly
Same-Store Portfolio occupancy as of December 31, 2017 was 98.0
percent.
For definitions of Financial Measures, including Quarterly
Same-Store Portfolio and Annual Same-Store Portfolio, see page 9 of
this release and page 22 in DCT Industrial’s Fourth Quarter 2017
Supplemental Reporting Package.
Investment Activity
Acquisitions
Since DCT Industrial’s Q3 2017 Earnings Release, the Company
acquired a 787,000 square foot building in the I-55 submarket of
Chicago for $47.3 million. The building is a shell-complete, Class
A facility which was not leased at the time of closing. The Company
expects a year-one cash yield of -2.3 percent and a stabilized cash
yield of 5.9 percent.
Development
Since the Company’s Q3 2017 Earnings Release, DCT Industrial
commenced construction on 1.0 million square feet with a projected
investment of $60.2 million and purchased 147.7 acres for the
future development of 2.0 million square feet.
Highlights since DCT Industrial’s Q3 2017 Earnings Release:
In Q4 2017:
- Executed a full-building pre-lease for
DCT Conewago Commerce Center, a 100,000 square foot build-to-suit
located in the Lehigh Valley submarket of Pennsylvania. The Company
plans to acquire the land for the development in Q2 2018.
- Executed a 54,000 square foot lease for
DCT DFW Trade Center, bringing the 113,000 square foot development
in the DFW Airport submarket of Dallas to 47.8 percent leased.
- Commenced construction on Seneca
Commerce Center Building IV, a 62,000 square foot building in the
Southwest Broward County submarket of Miami. Shell construction is
scheduled to be complete in Q3 2018.
- Acquired 60.1 acres in the I-20 West
submarket of Atlanta and commenced construction on a 926,000 square
foot building, DCT RiverWest Distribution Center Phase II. Shell
construction is scheduled to be complete in Q4 2018.
- Acquired 87.6 acres in the I-20 West
submarket of Atlanta to develop DCT RiverWest Distribution Center
Phase III, a 1.0 million square foot building.
Since December 31, 2017:
- Executed a full-building pre-lease for
DCT Petroport Industrial Park Building I, an 89,000 square foot
development located in the Port submarket of Houston. Shell
construction is scheduled to be complete in Q2 2018.
Dispositions
Since DCT Industrial’s Q3 2017 Earnings Release, the Company
sold 10 buildings totaling 2.3 million square feet and the Company
has now exited the Memphis and Charlotte markets. These
transactions generated total gross proceeds of $129.3 million and
have an expected year-one weighted-average cash yield of 6.3
percent.
The table below summarizes dispositions since the Company's Q3
2017 Earnings Release:
Market Submarket Square Feet
Occupancy Closed Northern California
Concord 26,000 100.0 %
Nov-17 Phoenix Tempe 36,000 100.0 % Nov-17 Miami Airport
West 49,000 95.0 % Dec-17 Dallas Great West 50,000 100.0 % Dec-17
Orlando Lake County 193,000 100.0 % Dec-17 Phoenix Tempe 27,000
100.0 % Jan-18 Memphis (2 buildings) Southeast 1,385,000 100.0 %
Jan-18 Charlotte South Industrial 472,000 100.0 % Jan-18 Northern
California Concord 38,000
100.0 % Jan-18 Total/Weighted Average 2,276,000 99.9
%
Capital Markets
In Q4 2017, DCT Industrial raised $36.1 million in net proceeds
from the sale of common stock through its “at the market” equity
offering. The Company issued approximately 606,000 shares at a
weighted-average price of $60.34 per share. The proceeds were used
to fund development and redevelopment and general corporate
activities.
Additionally, in December 2017, the Company amended its senior
unsecured term loan, originally dated December 15, 2015, to reduce
the interest to a variable rate equal to LIBOR, plus a margin,
depending on the Company's public debt credit rating, of between
0.90 to 1.75 percent per annum or, at the Company's election, an
alternate base rate plus a margin of between 0.45 to 1.40 percent
per annum. The interest rate is effectively fixed at 2.81 percent
through maturity as of January 1, 2018.
Dividend
DCT Industrial’s Board of Directors declared a $0.36 per share
quarterly cash dividend payable on April 11, 2018 to stockholders
of record as of March 30, 2018.
Guidance
The Company’s guidance for 2018 Net Earnings (EPS) is between
$1.18 and $1.28 per diluted share.
The Company’s 2018 FFO guidance, as adjusted, is between $2.52
and $2.62 per diluted share.
For additional details, assumptions and definitions related to
the Company’s 2018 guidance, please refer to page 10 in DCT
Industrial’s Fourth Quarter 2017 Supplemental Reporting
Package.
Conference Call
Information
DCT Industrial will host a conference call to discuss Q4 and
full-year results on Friday, February 2, 2018 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 May 2, 2018
and can be accessed by dialing (877) 344-7529 or (412) 317-0088 and
entering the passcode 10115520. 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 2,
2019.
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 additional 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, development, acquisition, leasing and management of
bulk-distribution and light-industrial properties in high-demand
distribution markets in the United States. DCT’s actively-managed
portfolio is strategically located near population centers and
well-positioned to take advantage of market dynamics. As of
December 31, 2017, the Company owned interests in approximately
74.8 million square feet of properties leased to approximately 850
customers. DCT maintains a Baa2 rating from Moody’s Investors
Service and a BBB from S&P Global Ratings. Additional
information is available at www.dctindustrial.com.
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Mobile Alerts for DCT Industrial.
DCT INDUSTRIAL TRUST INC. AND SUBSIDIARIES
Consolidated Balance Sheets (unaudited, in thousands,
except share information)
December 31, 2017 December 31, 2016
ASSETS Land $ 1,162,908 $ 1,075,995 Buildings and
improvements 3,284,976 3,202,293 Intangible lease assets 65,919
78,356 Construction in progress 149,994 72,829
Total investment in properties 4,663,797 4,429,473 Less
accumulated depreciation and amortization (919,186 ) (839,773 )
Net investment in properties 3,744,611 3,589,700 Investments
in and advances to unconsolidated joint ventures 72,231
95,606
Net investment in real estate 3,816,842
3,685,306 Cash and cash equivalents 10,522 10,286 Restricted cash
14,768 7,346 Straight-line rent and other receivables, net of
allowance for doubtfulaccounts of $425 and $379, respectively
80,119 79,889 Other assets, net 25,740 25,315 Assets held for sale
62,681 —
Total assets $ 4,010,672 $
3,808,142
LIABILITIES AND EQUITY Liabilities:
Accounts payable and accrued expenses $ 115,150 $ 93,097
Distributions payable 35,070 29,622 Tenant prepaids and security
deposits 34,946 32,884 Other liabilities 34,172 37,403 Intangible
lease liabilities, net 18,482 21,421 Line of credit 234,000 75,000
Senior unsecured notes 1,328,225 1,351,969 Mortgage notes 160,129
201,959 Liabilities related to assets held for sale 1,035 —
Total liabilities 1,961,209 1,843,355
Equity: Preferred stock, $0.01 par value, 50,000,000 shares
authorized, noneoutstanding — — 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 93,707,264and
91,516,113 shares issued and outstanding as of December 31, 2017and
December 31, 2016, respectively 937 915 Additional paid-in capital
2,985,122 2,884,806 Distributions in excess of earnings (1,022,605
) (1,006,125 ) Accumulated other comprehensive loss (11,893 )
(17,530 )
Total stockholders’ equity 1,951,561 1,862,066
Noncontrolling interests 97,902 102,721
Total
equity 2,049,463 1,964,787
Total liabilities
and equity $ 4,010,672 $ 3,808,142
DCT
INDUSTRIAL TRUST INC. AND SUBSIDIARIES Consolidated
Statements of Operations (unaudited, in thousands, except
per share information)
Three Months EndedDecember
31,
Twelve Months EndedDecember
31,
2017 2016 2017
2016 REVENUES: Rental revenues $ 108,512 $ 101,853 $
423,026 $ 391,360 Institutional capital management and other fees
359 377 1,442 1,416
Total
revenues 108,871 102,230 424,468 392,776
OPERATING EXPENSES: Rental expenses 9,994
8,967 37,865 36,797 Real estate taxes 16,817 15,291 65,135 60,020
Real estate related depreciation and amortization 42,766 41,090
168,245 161,334 General and administrative 6,843 8,290 28,994
29,280 Impairment losses 283 — 283 — Casualty gain (4 ) (475 ) (274
) (2,753 )
Total operating expenses 76,699 73,163
300,248 284,678
Operating income 32,172
29,067 124,220 108,098
OTHER INCOME (EXPENSE): Equity
in earnings of unconsolidated joint ventures, net 1,159 1,135 6,394
4,118 Gain on dispositions of real estate interests 7,468 6,843
47,126 49,895 Interest expense (16,472 ) (16,205 ) (66,054 )
(64,035 ) Interest and other income (expense) 8 (30 ) (5 ) 551
Impairment loss on land — — (938 ) — Income tax expense and other
taxes (2,120 ) (81 ) (2,267 ) (591 )
Consolidated net income of
DCT Industrial Trust Inc. 22,215 20,729 108,476 98,036 Net
income attributable to noncontrolling interests (1,095 ) (1,038 )
(4,982 ) (4,976 )
Net income attributable to common
stockholders 21,120 19,691 103,494 93,060
Distributed and undistributed earnings allocated to
participating securities (183 ) (172 ) (665 ) (669 )
Adjusted
net income attributable to common stockholders $ 20,937
$ 19,519 $ 102,829 $ 92,391
NET
EARNINGS PER COMMON SHARE: Basic $ 0.22 $ 0.21 $
1.11 $ 1.03 Diluted $ 0.22 $ 0.21 $
1.11 $ 1.03
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING: Basic 93,238 91,069 92,574 89,867 Diluted 93,338
91,185 92,688 89,982
Distributions declared per common share $ 0.36 $ 0.31 $ 1.29 $ 1.18
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,
2017 2016 2017
2016 Reconciliation of net income attributable to common
stockholders to FFO: Net income attributable to common
stockholders $ 21,120 $ 19,691 $ 103,494 $ 93,060 Adjustments: Real
estate related depreciation and amortization 42,766 41,090 168,245
161,334 Equity in earnings of unconsolidated joint ventures, net
(1,159 ) (1,135 ) (6,394 ) (4,118 ) Equity in FFO of unconsolidated
joint ventures(1) 2,905 2,946 12,304 10,267 Impairment loss on
depreciable real estate 283 — 283 — Gain on dispositions of real
estate interests (7,468 ) (6,843 ) (47,126 ) (49,895 ) Gain on
dispositions of non-depreciable real estate 8 43 8 43
Noncontrolling interest in the above adjustments (1,468 ) (1,571 )
(5,302 ) (5,576 ) FFO attributable to unitholders 2,018
2,144 8,453 8,930
FFO attributable to common stockholders
and unitholders – basic and diluted(2)
59,005 56,365 233,965 214,045
Adjustments: Impairment loss on land — — 938 — Acquisition costs —
524 13 1,084 Hedge ineffectiveness (non-cash)(3) — (867 ) — (414 )
Tax Cuts and Jobs Act of 2017 impact 1,970 — 1,970
—
FFO, as adjusted, attributable to common
stockholders and unitholders – basic and diluted
$ 60,975 $ 56,022 $ 236,886 $ 214,715
FFO per common share and unit – basic $ 0.61 $ 0.59
$ 2.42 $ 2.27 FFO per common share and unit –
diluted $ 0.61 $ 0.59 $ 2.42 $ 2.27
FFO, as adjusted, per common share and unit – basic $ 0.63
$ 0.59 $ 2.45 $ 2.28 FFO, as adjusted,
per common share and unit – diluted $ 0.63 $ 0.59 $
2.45 $ 2.27 FFO weighted average common shares
and units outstanding: Common shares for net earnings per share
93,238 91,069 92,574 89,867 Participating securities 512 569 504
563 Units 3,304 3,581 3,470 3,912 FFO
weighted average common shares, participating securities and units
outstanding – basic 97,054 95,219 96,548 94,342 Dilutive common
stock equivalents 100 116 114 115 FFO
weighted average common shares, participating securities and units
outstanding – diluted 97,154 95,335 96,662
94,457
(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 2017 supplemental reporting package for
additional information. (2) FFO as defined by the National
Association of Real Estate Investment Trusts (NAREIT). (3)
Effective as of January 1, 2017, the Company no longer separately
records hedge ineffectiveness per the adoption of the Derivatives
and Hedging accounting standard update (“ASU”) 2017-12.
Guidance
The Company is providing the following guidance:
Range for the Full-Year
2018 Low High
Guidance:(1) Net earnings per common share – diluted $ 1.18
$ 1.28 Adjustments: Gain on dispositions of real estate interests
(0.37 ) (0.37 ) Real estate related depreciation and
amortization(2) 1.73 1.73 Noncontrolling interests in adjustments
(0.02 ) (0.02 ) FFO, as adjusted, per common share and unit –
diluted $ 2.52 $ 2.62 (1) The Company’s
guidance excludes any potential gains related to future
dispositions. (2) Includes our proportionate share of real estate
depreciation and amortization from unconsolidated joint ventures.
For information related to our Fixed Charge
Coverage Ratio please see our Fourth Quarter 2017
Supplemental
The following table is a reconciliation of
our reported net income attributable to common stockholders to our
net operating income for the three and twelve months ended December
31, 2017 and 2016 (unaudited, in thousands):
For the Three MonthsEnded
December 31,
For the Twelve MonthsEnded
December 31,
2017 2016 2017 2016
Reconciliation of net income attributable to common stockholders
to NOI: Net income attributable to common stockholders $ 21,120
$ 19,691 $ 103,494 $ 93,060 Net income attributable to
noncontrolling interests 1,095 1,038 4,982 4,976 Income tax expense
and other taxes 2,120 81 2,267 591 Impairment loss on land — — 938
— Interest and other (income) expense (8 ) 30 5 (551 ) Interest
expense 16,472 16,205 66,054 64,035 Equity in earnings of
unconsolidated joint ventures, net (1,159 ) (1,135 ) (6,394 )
(4,118 ) General and administrative expense 6,843 8,290 28,994
29,280 Real estate related depreciation and amortization 42,766
41,090 168,245 161,334 Impairment loss 283 — 283 — Gain on
dispositions of real estate interests (7,468 ) (6,843 ) (47,126 )
(49,895 ) Casualty gain (4 ) (475 ) (274 ) (2,753 ) Institutional
capital management and other fees (359 ) (377 ) (1,442 ) (1,416 )
Total NOI $ 81,701 $ 77,595 $ 320,026 $ 294,543
Quarterly
Same-Store Portfolio NOI: Total NOI $ 81,701 $ 77,595 Less NOI
– non-same-store properties (5,878 ) (3,672 ) Less revenue from
lease terminations (202 ) (9 ) Add early termination straight-line
rent adjustment 472 5 NOI, excluding revenue from
lease terminations 76,093 73,919 Less straight-line rents, net of
related bad debt expense (568 ) (3,490 ) Less amortization of
above/(below) market rents (532 ) (727 ) Cash NOI, excluding
revenue from lease terminations $ 74,993 $ 69,702
Annual Same-Store Portfolio NOI: Total NOI $ 81,701 $
77,595 $ 320,026 $ 294,543 Less NOI – non-same-store properties
(14,073 ) (11,919 ) (52,690 ) (37,534 ) Less revenue from lease
terminations (202 ) (9 ) (1,364 ) (323 ) Add early termination
straight-line rent adjustment 472 5 1,191 155
NOI, excluding revenue from lease terminations 67,898 65,672
267,163 256,841 Less straight-line rents, net of related bad debt
expense (246 ) (1,138 ) (658 ) (9,334 ) Less amortization of
above/(below) market rents (424 ) (619 ) (2,053 ) (2,569 ) Cash
NOI, excluding revenue from lease terminations $ 67,228 $
63,915 $ 264,452 $ 244,938
Financial Measures
Terms not otherwise defined below are as defined in our Fourth
Quarter 2017 Supplemental Reporting Package.
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), gain
on disposition of real estate interests, impairment, general and
administrative expenses, equity in earnings (loss) of
unconsolidated joint ventures, interest expense, interest and other
income and income tax benefit (expense) and other taxes, and net
income attributable to noncontrolling interests. 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 benefit (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 overall
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.
The Quarterly Same-Store Portfolio includes all consolidated
stabilized acquisitions acquired before October 1, 2016 and all
consolidated Value-Add Acquisitions, developments and
Redevelopments stabilized prior to October 1, 2016. Once a property
is included in the Quarterly Portfolio, it remains until it is
subsequently disposed or placed into redevelopment. We consider NOI
and Cash NOI from our Quarterly Same-Store Portfolio to be a useful
measure in evaluating our financial performance and to improve
comparability between periods by including only properties owned
for comparable periods.
The Annual Same-Store Portfolio includes all consolidated
stabilized acquisitions acquired before January 1, 2016 and all
consolidated Value-Add Acquisitions, developments and
Redevelopments stabilized prior to January 1, 2016. Once a property
is included in the Annual Same-Store Portfolio, it remains until it
is subsequently disposed or placed into redevelopment. We consider
NOI from our Annual Same-Store Portfolio to be a useful measure in
evaluating our financial performance and to improve comparability
between periods by including only properties owned for those
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 with the following
adjustments:
- Add real estate-related depreciation
and amortization;
- Subtract gains from dispositions of
real estate held for investment purposes;
- Add 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 for the preceding items to
derive DCT Industrial’s proportionate share of FFO of
unconsolidated joint ventures.
We also present FFO, as adjusted, which excludes hedge
ineffectiveness, certain severance costs, acquisition costs, debt
modification costs, impairment losses on properties which are not
depreciable and charges related to the Tax Cuts and Jobs Act of
2017 impact. We believe that FFO, as adjusted, excluding hedge
ineffectiveness, certain severance costs, acquisition costs, debt
modification costs, impairment losses on non-depreciable real
estate and charges related to the Tax Cuts and Jobs Act of 2017
impact 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 or FFO, as adjusted, 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, as
adjusted, may not be comparable to other REITs’ FFO or FFO, as
adjusted, should be considered only as a supplement to net income
(loss) as a measure of DCT Industrial’s performance.
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/20180201006510/en/
DCT Industrial TrustMelissa Sachs,
303-597-2400investorrelations@dctindustrial.com
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