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Section 1: 8-K (8-K)

8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

    Washington, D.C. 20549    

      FORM 8-K      

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 29, 2018

                                                         

DCT INDUSTRIAL TRUST INC.

DCT INDUSTRIAL OPERATING PARTNERSHIP LP

(Exact name of registrant as specified in its charter)

 

Maryland (DCT Industrial Trust Inc.)   001-33201   82-0538520
Delaware (DCT Industrial Operating Partnership LP   333-195185   82-0538522

(State or other jurisdiction of

Incorporation or organization)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

555 17th Street, Suite 3700

Denver, CO 80202

(Address of principal executive offices)

(303) 597-2400

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

DCT Industrial Trust Inc.

Emerging growth company ☐    

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐

DCT Industrial Operating Partnership LP    

Emerging growth company   ☐    

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.            ☐


Item 2.02 Results of Operations and Financial Condition.

On April 29, 2018, we issued a press release entitled “DCT INDUSTRIAL TRUST REPORTS FIRST QUARTER 2018 RESULTS” which sets forth disclosure regarding our results of operations for the first quarter ended March 31, 2018. A copy of this press release as well as a copy of the supplemental information referred to in the press release are made available on our website and are attached hereto as Exhibits 99.1 and 99.2 and incorporated herein by reference. This Item 2.02 and the attached exhibits 99.1 and 99.2 are provided under Item 2.02 of Form 8-K and are furnished to, and shall not be deemed to be “filed” with, the Securities and Exchange Commission.

Please note that the full text of the press release and supplemental schedules are available through DCT Industrial’s website at http://www.dctindustrial.com. The information contained on DCT Industrial’s website is not incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:

 

Exhibit Number    Description
99.1    Press release dated April 29, 2018 and entitled “DCT INDUSTRIAL TRUST REPORTS FIRST QUARTER 2018 RESULTS”
99.2    Supplemental information entitled “DCT INDUSTRIAL FIRST QUARTER 2018 SUPPLEMENTAL REPORTING PACKAGE”

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

   DCT INDUSTRIAL TRUST INC.
April 30, 2018      
   By:   

/s/ John G. Spiegleman

      Name: John G. Spiegleman
      Title: Executive Vice President and General Counsel
  

 

DCT INDUSTRIAL OPERATING PARTNERSHIP LP

   By: DCT Industrial Trust Inc., its general partner
April 30, 2018      
   By:   

/s/ John G. Spiegleman

      Name: John G. Spiegleman
      Title: Executive Vice President and General Counsel

 

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Section 2: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

 

LOGO

 

   Press Release

FOR IMMEDIATE RELEASE:

DCT INDUSTRIAL TRUST® REPORTS FIRST QUARTER 2018 RESULTS

Net Earnings of $0.52 per Diluted Share

FFO, as adjusted, of $0.63 per Diluted Share

Consolidated Operating Occupancy of 97.7 Percent

Rent Growth of 35.0 Percent on a Straight-Line Basis and 14.2 Percent on a Cash Basis

Quarterly Same-Store Portfolio NOI Growth of 6.4 Percent on a Cash Basis and

2.9 Percent on a Straight-Line Basis

DENVER, April 29, 2018, - DCT Industrial Trust® (NYSE: DCT), a leading real estate company, today announced financial results for the quarter ending March 31, 2018.

Net income attributable to common stockholders (“Net Earnings”) for Q1 2018 was $0.52 per diluted share compared with $0.16 per diluted share reported for Q1 2017, a 225.0 percent increase.

Funds from operations (“FFO”), as adjusted, attributable to common stockholders and unitholders for Q1 2018 was $0.63 per diluted share, compared with $0.61 per diluted share for Q1 2017, a 3.3 percent increase.

Property Results and Leasing Activity

As of March 31, 2018, DCT Industrial owned 393 consolidated operating properties, totaling 63.3 million square feet, with occupancy of 97.7 percent, a decrease of 10 basis points from Q4 2017 and an increase of 20 basis points over Q1 2017. Additionally, approximately 437,000 square feet or 0.7 percent of DCT Industrial’s total consolidated operating portfolio was leased but not occupied as of March 31, 2018, which does not take into consideration 843,000 square feet of leased space in developments under construction or in pre-development. During the first quarter, the impact of acquisitions, dispositions and placing developments and redevelopments into operations decreased consolidated operating occupancy by 10 basis points, compared to Q4 2017.

In Q1 2018, the Company signed leases totaling 2.5 million square feet with rental rates increasing 35.0 percent on a straight-line basis and 14.2 percent on a cash basis, compared to the corresponding expiring leases. The Company’s tenant retention rate was 81.6 percent in Q1 2018.

Net operating income (“NOI”) was $82.5 million in Q1 2018, compared with $81.7 million in Q4 2017.

Comparing Q1 2018 to Q1 2017, NOI from the Quarterly Same-Store Portfolio increased 6.4 percent on a cash basis and 2.9 percent on a straight-line basis, which excludes revenue from lease terminations.

Quarterly Same-Store Portfolio occupancy averaged 97.8 percent in Q1 2018, an increase of 60 points compared with Q1 2017. Quarterly Same-Store Portfolio occupancy as of March 31, 2018 was 97.8 percent.

For definitions of Financial Measures see page 8 of this release and page 21 in DCT Industrial’s First Quarter 2018 Supplemental Reporting Package.


Investment Activity

Acquisitions

Since DCT Industrial’s Q4 2017 Earnings Release, the Company acquired a value-add, 37,000 square foot, Class A building in the 880-Corridor of the East Bay market in Northern California for $7.1 million. The building was 100 percent occupied at closing, however, the tenant is expected to vacate upon the expiration of their lease in Q3 2018. The Company expects a stabilized cash yield of 4.6 percent upon stabilization.

Development

Since the Company’s Q4 2017 Earnings Release, DCT Industrial purchased 40.2 acres for the future development of 717,000 square feet.

Highlights since DCT Industrial’s Q4 2017 Earnings Release:

In Q1 2018:

    Executed a 73,000 square foot lease for DCT Miller Road in the Northwest submarket of Dallas, bringing the 270,000 square foot development to 100 percent leased.
    Executed a 95,000 square foot lease for DCT North Satellite Distribution Center in the I-85/Northwest submarket of Atlanta, bringing the 549,000 square foot development to 100 percent leased.
    Executed a 63,000 square foot lease for DCT Stockyards Industrial Center in the City South submarket of Chicago, bringing the 167,000 square foot development to 37.9 percent leased.
    Commenced construction on DCT Airport Distribution Center Building E in the Southeast submarket of Orlando, a 102,000 square foot building. Shell construction is scheduled to be complete in Q3 2018.
    Acquired 9.2 acres in the Inland Empire West submarket of Southern California to develop DCT Fontana West Logistics Center, a 207,000 square foot facility.

Since March 31, 2018:

    Acquired 26.0 acres in the I-55 submarket of Chicago to develop DCT Pinnacle Industrial Center, a 407,000 square foot facility.
    Acquired 5.0 acres in the 880-Corridor in the East Bay market in Northern California to develop DCT Hayman Logistics Center, a 103,000 square foot facility.

Dispositions

Since DCT Industrial’s Q4 2017 Earnings Release, the Company sold three buildings totaling 109,000 square feet. These transactions generated total gross proceeds of $14.9 million and have an expected year-one weighted-average cash yield of 5.8 percent.

The table below summarizes dispositions since the Company’s Q4 2017 Earnings Release:

 

Market    Submarket    Square Feet      Occupancy     Closed  

Atlanta

   I-85 Northeast      12,000        0.0      Feb-18  

Southern California (2 buildings)

   North County San Diego      97,000        100.0      Apr-18  

Total/Weighted Average

        109,000        88.9   

Capital Markets

In Q1 2018, DCT Industrial raised $10.8 million in net proceeds from the sale of common stock through its “at the market” equity offering. The Company issued approximately 191,000 shares at a weighted-average price of $57.36 per share. The proceeds were used to fund development and redevelopment and general corporate activities.

 

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Dividend

DCT Industrial’s Board of Directors declared a $0.36 per share quarterly cash dividend payable on July 11, 2018 to stockholders of record as of June 29, 2018.

Conference Call, Guidance and Annual Meeting of Stockholders

In light of DCT Industrial’s proposed merger announced earlier today, the Q1 2018 conference call is canceled and the Company will no longer provide guidance. Further the DCT Industrial Annual Meeting of Stockholders, scheduled for May 3, 2018 at 10:00 a.m. is canceled.

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 logistics 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 March 31, 2018, the Company owned interests in approximately 73.7 million square feet of properties leased to approximately 840 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.

Click here to subscribe to Mobile Alerts for DCT Industrial.

CONTACT:

Melissa Sachs

DCT Industrial Trust

303-597-2400

investorrelations@dctindustrial.com

###

 

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DCT INDUSTRIAL TRUST INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except share information)

 

     March 31, 2018   December 31, 2017

 ASSETS

     (unaudited  

Land

   $ 1,172,654     $ 1,162,908  

Buildings and improvements

     3,336,574       3,284,976  

Intangible lease assets

     60,791       65,919  

Construction in progress

     162,794       149,994  
  

 

 

 

 

 

 

 

Total investment in properties

     4,732,813       4,663,797  

Less accumulated depreciation and amortization

     (947,731     (919,186
  

 

 

 

 

 

 

 

Net investment in properties

     3,785,082       3,744,611  

Investments in and advances to unconsolidated joint ventures

     73,691       72,231  
  

 

 

 

 

 

 

 

Net investment in real estate

     3,858,773       3,816,842  

Cash and cash equivalents

     12,371       10,522  

Restricted cash

     68,613       14,768  

Straight-line rent and other receivables, net of allowance for doubtful accounts of $413 and $425, respectively

     81,980       80,119  

Other assets, net

     30,958       25,740  

Assets held for sale

     3,146       62,681  
  

 

 

 

 

 

 

 

Total assets

   $ 4,055,841     $ 4,010,672  
  

 

 

 

 

 

 

 

    

 LIABILITIES AND EQUITY

    

 Liabilities:

    

Accounts payable and accrued expenses

   $ 95,020     $ 115,150  

Distributions payable

     35,182       35,070  

Tenant prepaids and security deposits

     37,174       34,946  

Other liabilities

     36,511       34,172  

Intangible lease liabilities, net

     17,915       18,482  

Line of credit

     264,000       234,000  

Senior unsecured notes

     1,328,576       1,328,225  

Mortgage notes

     158,350       160,129  

Liabilities related to assets held for sale

     91       1,035  
  

 

 

 

 

 

 

 

Total liabilities

     1,972,819       1,961,209  
  

 

 

 

 

 

 

 

    

 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, 94,075,171 and 93,707,264 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively

     941       937  

Additional paid-in capital

     2,999,304       2,985,122  

Distributions in excess of earnings

     (1,005,434     (1,022,605

Accumulated other comprehensive loss

     (7,352     (11,893
  

 

 

 

 

 

 

 

Total stockholders’ equity

     1,987,459       1,951,561  

Noncontrolling interests

     95,563       97,902  
  

 

 

 

 

 

 

 

Total equity

     2,083,022       2,049,463  
  

 

 

 

 

 

 

 

Total liabilities and equity

   $ 4,055,841     $ 4,010,672  
  

 

 

 

 

 

 

 

 

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DCT INDUSTRIAL TRUST INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(unaudited, in thousands, except per share information)

 

     Three Months Ended March
31,
     2018   2017

 REVENUES:

    

Rental revenues

   $ 109,423     $ 105,424  

Institutional capital management and other fees

     384       472  
  

 

 

 

 

 

 

 

Total revenues

     109,807       105,896  
  

 

 

 

 

 

 

 

    

 OPERATING EXPENSES:

    

Rental expenses

     10,239       9,462  

Real estate taxes

     16,724       16,766  

Real estate related depreciation and amortization

     41,232       41,605  

General and administrative

     7,464       7,192  

Casualty loss (gain)

     5       (270
  

 

 

 

 

 

 

 

Total operating expenses

     75,664       74,755  
  

 

 

 

 

 

 

 

Operating income

     34,143       31,141  
    

 OTHER INCOME (EXPENSE):

    

Equity in earnings of unconsolidated joint ventures, net

     1,077       1,516  

Gain on dispositions of real estate interests

     32,190       26  

Interest expense

     (16,050     (16,755

Interest and other income (expense)

     34       (5

Impairment loss on land

     (371      

Income tax benefit expense and other taxes

     (81     (134
  

 

 

 

 

 

 

 

Consolidated net income of DCT Industrial Trust Inc.

     50,942       15,789  

Net income attributable to noncontrolling interests

     (2,119     (830
  

 

 

 

 

 

 

 

Net income attributable to common stockholders

     48,823       14,959  
  

 

 

 

 

 

 

 

Distributed and undistributed earnings allocated to participating securities

     (271     (161
  

 

 

 

 

 

 

 

Adjusted net income attributable to common stockholders

   $ 48,552     $ 14,798  
  

 

 

 

 

 

 

 

    

 NET EARNINGS PER COMMON SHARE:

    

Basic

   $ 0.52     $ 0.16  
  

 

 

 

 

 

 

 

Diluted

   $ 0.52     $ 0.16  
  

 

 

 

 

 

 

 

    

 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

 

Basic

     93,812       91,751  

Diluted

     93,837       91,884  
  

 

 

 

 

 

 

 

    

Distributions declared per common share

   $ 0.36     $ 0.31  

 

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Reconciliation of Net Income Attributable to Common Stockholders to Funds from Operations

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

 

     For the Three Months Ended
March 31,
     2018   2017

 Reconciliation of net income attributable to common stockholders to FFO:

    

 Net income attributable to common stockholders

   $ 48,823     $ 14,959  

 Adjustments:

    

Real estate related depreciation and amortization

     41,232       41,605  

Equity in earnings of unconsolidated joint ventures, net

     (1,077     (1,516

Equity in FFO of unconsolidated joint ventures(1)

     2,751       3,238  

Gain on dispositions of real estate interests

     (32,190     (26

Loss on dispositions of non-depreciable real estate

     (3      

Noncontrolling interest in the above adjustments

     (543     (1,835

FFO attributable to unitholders

     2,091       2,254  
  

 

 

 

 

 

 

 

 FFO attributable to common stockholders and unitholders – basic and diluted(2)

     61,084       58,679  
  

 

 

 

 

 

 

 

Adjustments:

    

Impairment loss on land

     371        

Acquisition costs

           13  

Hedge ineffectiveness (non-cash)(3)

           30  
  

 

 

 

 

 

 

 

 FFO, as adjusted, attributable to common stockholders and unitholders – basic and diluted

   $ 61,455     $ 58,722  
  

 

 

 

 

 

 

 

 FFO per common share and unit – basic

   $ 0.63     $ 0.61  
  

 

 

 

 

 

 

 

 FFO per common share and unit – diluted

   $ 0.63     $ 0.61  
  

 

 

 

 

 

 

 

 FFO, as adjusted, per common share and unit – basic

   $ 0.63     $ 0.61  
  

 

 

 

 

 

 

 

 FFO, as adjusted, per common share and unit – diluted

   $ 0.63     $ 0.61  
  

 

 

 

 

 

 

 

 FFO weighted average common shares and units outstanding:

    

Common shares for net earnings per share

     93,812       91,751  

Participating securities

     506       466  

Units

     3,323       3,665  
  

 

 

 

 

 

 

 

 FFO weighted average common shares, participating securities and units outstanding – basic

     97,641       95,882  

Dilutive common stock equivalents

     25       133  
  

 

 

 

 

 

 

 

 FFO weighted average common shares, participating securities and units outstanding – diluted

     97,666       96,015  
  

 

 

 

 

 

 

 

 

(1)  Equity in FFO of unconsolidated joint ventures is determined as our share of FFO from each unconsolidated joint venture. See DCT Industrial’s first quarter 2018 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.

 

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For information related to our Fixed Charge Coverage Ratio please see our First Quarter 2018 Supplemental

The following table is a reconciliation of our reported net income attributable to common stockholders to our net operating income for the three months ended March 31, 2018 and 2017 (unaudited, in thousands):

 

     For the Three Months
Ended March 31,
     2018   2017

 Reconciliation of net income attributable to common stockholders to NOI:

 

 Net income attributable to common stockholders

   $ 48,823     $ 14,959  

 Net income attributable to noncontrolling interests

     2,119       830  

 Income tax expense and other taxes

     81       134  

 Impairment loss on land

     371        

 Interest and other (income) expense

     (34     5  

 Interest expense

     16,050       16,755  

 Equity in earnings of unconsolidated joint ventures, net

     (1,077     (1,516

 General and administrative expense

     7,464       7,192  

 Real estate related depreciation and amortization

     41,232       41,605  

 Gain on dispositions of real estate interests

     (32,190     (26

 Casualty loss (gain)

     5       (270

 Institutional capital management and other fees

     (384     (472
  

 

 

 

 

 

 

 

Total NOI

   $ 82,460     $ 79,196  
    

Quarterly Same-Store Portfolio NOI:

    

Total NOI

   $ 82,460     $ 79,196  

Less NOI – non-same-store properties

     (6,002     (4,617

Less revenue from lease terminations

     (263     (502

Add early termination straight-line rent adjustment

     49       17  
  

 

 

 

 

 

 

 

NOI, excluding revenue from lease terminations

     76,244       74,094  

Less straight-line rents, net of related bad debt expense

     (783     (2,975

Less amortization of above/(below) market rents

     (555     (745
  

 

 

 

 

 

 

 

Cash NOI, excluding revenue from lease terminations

   $ 74,906     $ 70,374  
  

 

 

 

 

 

 

 

 

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Financial Measures

Terms not otherwise defined below are as defined in our First Quarter 2018 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), 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 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 January 1, 2017 and all consolidated Value-Add Acquisitions, developments and Redevelopments stabilized prior to January 1, 2017. 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, 2017 and all consolidated Value-Add Acquisitions, developments and Redevelopments stabilized prior to January 1, 2017. 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 and impairment losses on properties which are not depreciable. We believe that FFO, as

 

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adjusted, 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 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.

 

9


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.

 

10

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Section 3: EX-99.2 (EX-99.2)

EX-99.2

Exhibit 99.2

 

LOGO


   Table of Contents   
     
     

 

Consolidated Statements of Operations

     3  

Consolidated Balance Sheets

     4  

Funds From Operations

     5  

Selected Financial Data

     6  

Same-Store Portfolio Analysis

     7  

Consolidated Leasing Activity

     8  

Consolidated Lease Expirations

     9  

Components of Net Asset Value

     10  

Property Overview

     11-12  

Development Overview

     13  

Redevelopment Overview

     14  

Value-Add Acquisitions Overview

     15  

Acquisition and Disposition Summary

     16  

Indebtedness

     17  

Capitalization, Dividend Yield and Fixed Charge Coverage Ratio

     18  

Debt Covenants and Credit Ratings

     19  

Investment in Unconsolidated Joint Ventures Summary

     20  

Definitions

     21-25  

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 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.

 

 

First Quarter 2018

 

Supplemental Reporting Package

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   Consolidated Statements of Operations  
   (unaudited, amounts in thousands, except per share data)  
    

 

     Three Months Ended March 31,
     2018   2017

REVENUES:

    

Rental revenues

   $ 109,423     $ 105,424  

Institutional capital management and other fees

     384       472  
  

 

 

 

 

 

 

 

Total revenues

     109,807       105,896  
  

 

 

 

 

 

 

 

    

OPERATING EXPENSES:

    

Rental expenses

     10,239       9,462  

Real estate taxes

     16,724       16,766  

Real estate related depreciation and amortization

     41,232       41,605  

General and administrative

     7,464       7,192  

Casualty loss (gain)

     5       (270
  

 

 

 

 

 

 

 

Total operating expenses

     75,664       74,755  
  

 

 

 

 

 

 

 

Operating income

     34,143       31,141  
    

OTHER INCOME (EXPENSE):

    

Equity in earnings of unconsolidated joint ventures, net

     1,077       1,516  

Gain on dispositions of real estate interests

     32,190       26  

Interest expense

     (16,050     (16,755

Interest and other income (expense)

     34       (5

Impairment loss on land

     (371      

Income tax expense and other taxes

     (81     (134
  

 

 

 

 

 

 

 

Consolidated net income of DCT Industrial Trust Inc.

     50,942       15,789  

Net income attributable to noncontrolling interests

     (2,119     (830
  

 

 

 

 

 

 

 

Net income attributable to common stockholders

     48,823       14,959  

Distributed and undistributed earnings allocated to participating securities

     (271     (161
  

 

 

 

 

 

 

 

Adjusted net income attributable to common stockholders

   $ 48,552     $ 14,798  
  

 

 

 

 

 

 

 

    

NET EARNINGS PER COMMON SHARE:

    

Basic

   $ 0.52     $ 0.16  
  

 

 

 

 

 

 

 

Diluted

   $ 0.52     $ 0.16  
  

 

 

 

 

 

 

 

    

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

    

Basic

     93,812       91,751  

Diluted

     93,837       91,884  

 

 

 

 

First Quarter 2018

 

Supplemental Reporting Package

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   Consolidated Balance Sheets  
   (unaudited, amounts in thousands)  
    

 

         March 31, 2018           December 31, 2017    

ASSETS:

    

Operating portfolio

   $ 4,261,599     $ 4,249,242  

Properties under development

     320,062       280,492  

Properties in pre-development

     60,412       51,883  

Properties under redevelopment

     9,838       9,481  

Value-add acquisitions

     77,246       68,673  

Land held

     3,656       4,026  
  

 

 

 

 

 

 

 

Total investment in properties

     4,732,813       4,663,797  

Less accumulated depreciation and amortization

     (947,731     (919,186
  

 

 

 

 

 

 

 

Net investment in properties

     3,785,082       3,744,611  

Investments in and advances to unconsolidated joint ventures

     73,691       72,231  
  

 

 

 

 

 

 

 

Net investment in real estate

     3,858,773       3,816,842  

Cash and cash equivalents

     12,371       10,522  

Restricted cash

     68,613       14,768  

Straight-line rent and other receivables, net

     81,980       80,119  

Other assets, net

     30,958       25,740  

Assets held for sale

     3,146       62,681  
  

 

 

 

 

 

 

 

Total assets

   $ 4,055,841     $ 4,010,672  
  

 

 

 

 

 

 

 

    

LIABILITIES AND EQUITY:

    

Accounts payable and accrued expenses

   $ 95,020     $ 115,150  

Distributions payable

     35,182       35,070  

Tenant prepaids and security deposits

     37,174       34,946  

Other liabilities

     36,511       34,172  

Intangible lease liabilities, net

     17,915       18,482  

Line of credit

     264,000       234,000  

Senior unsecured notes

     1,328,576       1,328,225  

Mortgage notes

     158,350       160,129  

Liabilities related to assets held for sale

     91       1,035  
  

 

 

 

 

 

 

 

Total liabilities

     1,972,819       1,961,209  
  

 

 

 

 

 

 

 

Total stockholders’ equity

     1,987,459       1,951,561  

Noncontrolling interests

     95,563       97,902  
  

 

 

 

 

 

 

 

Total liabilities and equity

   $ 4,055,841     $ 4,010,672  
  

 

 

 

 

 

 

 

 

 

 

 

First Quarter 2018

 

Supplemental Reporting Package

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   Funds From Operations (FFO)  
   (unaudited, amounts in thousands, except per share and unit data)  
    

 

         For the Three Months Ended March 31,      
     2018      2017  

Reconciliation of net income attributable to common stockholders to FFO:

 

  

Net income attributable to common stockholders

     $ 48,823         $ 14,959   

Adjustments:

     

Real estate related depreciation and amortization

     41,232         41,605   

Equity in earnings of unconsolidated joint ventures, net

     (1,077)        (1,516)  

Equity in FFO of unconsolidated joint ventures(1)

     2,751        3,238   

Gain on dispositions of real estate interests

     (32,190)        (26)  

Loss on dispositions of non-depreciable real estate

     (3)        —   

Noncontrolling interests in the above adjustments

     (543)        (1,835)  

FFO attributable to unitholders

     2,091         2,254   
  

 

 

    

 

 

 

FFO attributable to common stockholders and unitholders – basic and diluted(2)

     61,084         58,679   
  

 

 

    

 

 

 

Adjustments:

     

Impairment loss on land

     371         —   

Acquisition costs

     —         13   

Hedge ineffectiveness (non-cash)(3)

     —         30   
  

 

 

    

 

 

 

FFO, as adjusted, attributable to common stockholders and unitholders – basic and diluted

     $ 61,455         $ 58,722   
  

 

 

    

 

 

 

FFO per common share and unit – basic

     $ 0.63         $ 0.61   
  

 

 

    

 

 

 

FFO per common share and unit – diluted

     $ 0.63         $ 0.61   
  

 

 

    

 

 

 

FFO, as adjusted, per common share and unit – basic

     $ 0.63         $ 0.61   
  

 

 

    

 

 

 

FFO, as adjusted, per common share and unit – diluted

     $ 0.63         $ 0.61   
  

 

 

    

 

 

 

FFO weighted average common shares and units outstanding:

     

Common shares for net earnings per share

     93,812         91,751   

Participating securities

     506         466   

Units

     3,323         3,665   
  

 

 

    

 

 

 

FFO weighted average common shares, participating securities and units outstanding – basic

     97,641         95,882   

Dilutive common stock equivalents

     25         133   
  

 

 

    

 

 

 

FFO weighted average common shares, participating securities and units outstanding – diluted

     97,666         96,015   
  

 

 

    

 

 

 

Reconciliation of net operating income (NOI) to FFO:

     

NOI(4)(5)

     $ 82,460         $ 79,196   

Adjustments:

     

Equity in FFO of unconsolidated joint ventures(1)

     2,751         3,238   

Institutional capital management and other fees

     384         472   

Loss on dispositions of non-depreciable real estate

     (3)        —   

Casualty loss (gain)

     (5)        270   

General and administrative expense

     (7,464)        (7,192)  

Impairment loss on land

     (371)        —   

Interest expense

     (20,203)        (19,440)  

Capitalized interest expense

     4,153         2,685   

Interest and other income (expense)

     34         (5)  

Income tax expense and other taxes

     (81)        (134)  

FFO attributable to noncontrolling interests

     (571)        (411)  
  

 

 

    

 

 

 

FFO attributable to common stockholders and unitholders – basic and diluted(2)

     61,084         58,679   
  

 

 

    

 

 

 

Adjustments:

     

Acquisition costs

     —         13   

Impairment loss on land

     371         —   

Hedge ineffectiveness (non-cash)

     —         30   
  

 

 

    

 

 

 

FFO, as adjusted, attributable to common stockholders and unitholders – basic and diluted

     $ 61,455         $ 58,722   
  

 

 

    

 

 

 

 

(1) Equity in FFO of unconsolidated joint ventures is determined as our share of FFO from each unconsolidated joint venture. See Definitions 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.
(4) See the reconciliation of non-GAAP financial measure to net income attributable to common stockholders in Definitions.
(5) Includes FFO from assets held for sale.

 

 

First Quarter 2018

 

Supplemental Reporting Package

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   Selected Financial Data  
   (unaudited, amounts in thousands)  
    

 

         For the Three Months Ended March 31,      
     2018      2017  

NOI:

     

Rental revenues

     $ 109,423            $ 105,424      

Rental expenses and real estate taxes

     (26,963)           (26,228)     
  

 

 

    

 

 

 

NOI(1)

     $ 82,460            $ 79,196      
  

 

 

    

 

 

 
     

TOTAL CONSOLIDATED PROPERTIES:(2)

     

Square feet as of period end

     66,105            66,225      

Average occupancy

     94.1%        94.9%  

Occupancy as of period end

     94.1%        95.2%  
     

CONSOLIDATED OPERATING PORTFOLIO:(2)

     

Square feet as of period end

     63,316            64,003      

Average occupancy

     97.7%        97.2%  

Occupancy as of period end

     97.7%        97.5%  
     

SUPPLEMENTAL CONSOLIDATED CASH FLOW AND OTHER INFORMATION:

     

Straight-line rent receivable (balance sheet)(2)

     $ 75,473            $ 74,469      

Straight-line rents – increase (decrease) to revenue, net of related bad debt expense

     $ 1,632            $ 3,398      

Free rent

     $ 2,205            $ 3,531      

Revenue from lease terminations

     $ 343            $ 501      

Bad debt expense, excluding expense related to straight-line rent receivable

     $ (2)           $ 113      

Net amortization of (above)/below market rents – increase to revenue

     $ 740            $ 732      

Scheduled principal amortization

     $ 1,694            $ 1,614      

Capitalized interest

     $ 4,153            $ 2,685      

Non-cash interest expense

     $ 1,532            $ 1,269      

Stock-based compensation amortization

     $ 1,569            $ 1,426      

Capitalized indirect leasing costs(3)

     $ 780            $ N/A  

NOI for properties sold during current quarter

     $ 254            N/A  
     

CONSOLIDATED CAPITAL EXPENDITURES:

     

Development

     $ 57,733            $ 29,704      

Redevelopment

     415            2,909      

Due diligence

     1,470            474      

Casualty expenditures

     336            24      

Building and land improvements

     2,184            892      

Tenant improvements and leasing costs(3)

     9,668            9,727      
  

 

 

    

 

 

 

Total capital expenditures

     $ 71,806            $ 43,730      
  

 

 

    

 

 

 

 

 

(1) See reconciliation of non-GAAP financial measure to net income attributable to common stockholders in Definitions.
(2) Includes assets held for sale.
(3) Capitalized indirect leasing costs are included in “Tenant improvements and leasing costs.”

 

 

First Quarter 2018

 

Supplemental Reporting Package

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   Same-Store Portfolio Analysis  
   (unaudited, amounts in thousands, except number of properties)  
    

 

     For the Three Months Ended March 31,
Quarterly Same-Store Portfolio Analysis (Straight-Line Basis)(1)              2018                       2017             Percentage    
Change
 

Number of properties

     378       378    

Square feet as of period end

     60,076       60,076    

Average occupancy

     97.8%       97.2%       0.6%  

Occupancy as of period end

     97.8%       97.4%       0.4%  
      

Rental revenues

   $ 101,524     $ 99,017       2.5%  

Less: revenue from lease terminations

     (263     (502  

Add: early termination straight-line rent adjustment

     49       17    
  

 

 

 

 

 

 

 

 

 

 

 

Rental revenues, excluding revenue from lease terminations

     101,310       98,532       2.8%  

Rental expenses and real estate taxes

     (25,066     (24,438     2.6%  
  

 

 

 

 

 

 

 

 

 

 

 

NOI, excluding revenue from lease terminations(2)

   $ 76,244     $ 74,094       2.9%  
  

 

 

 

 

 

 

 

 

 

 

 

Quarterly Same-Store Portfolio Analysis (Cash Basis)

      

Rental revenues

   $ 100,186     $ 95,303       5.1%  

Less: revenue from lease terminations

     (263     (502  

Add: early termination straight-line rent adjustment

     49       17    
  

 

 

 

 

 

 

 

 

 

 

 

Rental revenues, excluding revenue from lease terminations

     99,972       94,818       5.4%  

Rental expenses and real estate taxes

     (25,066     (24,444     2.5%  
  

 

 

 

 

 

 

 

 

 

 

 

Cash NOI, excluding revenue from lease terminations(2)

   $ 74,906     $ 70,374       6.4%  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes all consolidated stabilized acquisitions acquired before January 1, 2017 and all consolidated developments, Redevelopments and Value-Add Acquisitions stabilized prior to January 1, 2017. Once a property is included in the Quarterly Same-Store Portfolio, it remains until it is subsequently disposed or placed into redevelopment. We consider 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 those comparable periods.

 

(2) See reconciliation of non-GAAP financial measure to net income attributable to common stockholders in Definitions.

 

 

First Quarter 2018

 

Supplemental Reporting Package

   LOGO    Page 7            


   Consolidated Leasing Activity  
   (unaudited)  
    

Leasing Statistics(1)

 

 

 

     Number
of Leases
Signed
     Square Feet
Signed
    Cash Basis
Rent Growth
     Straight-Line
Basis Rent
Growth
     Weighted
Average Lease
Term(2)
    Turnover
Costs(3)
    Turnover
Costs Per
Square Foot(3)
 

FIRST QUARTER 2018

        (in thousands           (in months)       (in thousands)    

New

     13         658        17.4%        35.9%        56      $ 3,652      $ 5.55   

Renewal

     25         1,475        12.8%        34.6%        52        2,685        1.82   

Developments, redevelopments and value-add acquisitions

            412        N/A        N/A        77        N/A        N/A   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total/Weighted Average

     46         2,545        14.2%        35.0%        57      $ 6,337      $ 2.97   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Weighted Average Retention(4)

     81.6%                 
  

 

 

                
                 

FOUR QUARTERS ROLLING

                 

New

     74         3,087        12.1%        28.9%        66      $ 17,750      $ 5.75   

Renewal

     103         6,558        12.3%        31.8%        54        11,149        1.70   

Developments, redevelopments and value-add acquisitions

     25         2,262        N/A        N/A        74        N/A        N/A   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total/Weighted Average

     202         11,907        12.3%        30.9%        61      $ 28,899      $ 2.99   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Weighted Average Retention(4)

     79.3%                 
  

 

 

                

 

 

(1) Reflects leases executed during the periods presented. Excludes leases with a term shorter than one year.
(2) Assumes no exercise of lease renewal options, if any.
(3) The estimated turnover costs associated with leases signed on developments, Redevelopments and Value-Add Acquisitions are included in the total projected costs for those investments and are therefore excluded from the leasing statistics.
(4) Excludes leases signed on developments, Redevelopments and Value-Add Acquisitions.

 

 

First Quarter 2018

 

Supplemental Reporting Package

   LOGO    Page 8            


   Consolidated Lease Expirations  
   (unaudited, amounts in thousands)  
    

Lease Expirations for Consolidated Portfolio by Market(1)

 

 

 

                                                                                                                                                                 
     2018(2)    2019    2020

 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)
 

 Atlanta

     683        8.8%        1,070        13.8%        1,295        16.7%  

 Baltimore/Washington D.C.

     124        6.0%        424        20.6%        109        5.3%  

 Chicago

     499        6.4%        938        12.1%        1,027        13.2%  

 Cincinnati

     459        14.4%        544        17.1%        476        15.0%  

 Dallas

     153        2.5%        906        14.6%        615        9.9%  

 Denver

     63        6.7%        409        43.6%        144        15.4%  

 Houston

     139        3.2%        359        8.2%        780        17.8%  

 Indianapolis

            0.0%        140        16.6%        106        12.6%  

 Miami

     144        9.5%        103        6.8%        257        16.9%  

 Nashville

            0.0%        550        26.7%               0.0%  

 New Jersey

     152        11.6%        50        3.8%        95        7.2%  

 Northern California

     232        5.5%        1,857        43.8%        823        19.4%  

 Orlando

     141        7.7%        353        19.3%        286        15.6%  

  Pennsylvania

     150        5.2%        774        26.7%        779        26.9%  

 Phoenix

     282        14.2%        211        10.6%        220        11.1%  

 Seattle

     37        0.9%        226        5.6%        873        21.6%  

 Southern California

     467        5.1%        850        9.2%        758        8.2%  
  

 

 

 

  

 

 

    

 

 

 

  

 

 

    

 

 

 

  

 

 

 

Total

     3,725        6.0%        9,764        15.7%        8,643        13.9%  
  

 

 

 

  

 

 

    

 

 

 

  

 

 

    

 

 

 

  

 

 

 

Lease Expirations for Consolidated Portfolio Summarized(1)

 

 

 

 Year

      Square Feet Related    
to Expiring Leases
      Annualized Base Rent    
of Expiring Leases(4)
      Percentage of Total    
Annualized Base Rent
 

 2018(2)

    3,725     $ 18,693       5.3%  

 2019

    9,764       46,249       13.1%  

 2020

    8,643       46,756       13.2%  

 2021

    11,241       64,340       18.2%  

 2022

    8,851       50,443       14.2%  

 Thereafter

    19,968       127,698       36.0%  
 

 

 

 

 

 

 

 

 

 

 

 

Total occupied

    62,192     $ 354,179       100.0%  
 

 

 

 

 

 

 

 

 

 

 

 

 Available or leased but not occupied

    3,913      
 

 

 

 

   

Total consolidated properties

    66,105      
 

 

 

 

   

 

(1) Assumes no exercise of lease renewal options, if any.
(2) Includes leases with an initial term of less than one year.
(3) Percentage is based on consolidated occupied square feet as of March 31, 2018 in each market and in total.
(4) Annualized base rent includes contractual rents in effect at the date of the lease expiration.

 

 

First Quarter 2018

 

Supplemental Reporting Package

   LOGO    Page 9            


   Components of Net Asset Value   
  

(unaudited, amounts in thousands)

  
     

 

 Cash Net Operating Income (Cash NOI)    For the Three Months Ended
March 31, 2018
 

NOI(1)

   $ 82,460   

Less:

  

Revenue from lease terminations

     (343)  

Straight-line rents, net of related bad debt expense

     (1,632)  

Net amortization of above/(below) market rents

     (740)  
  

 

 

 

Cash NOI, excluding revenue from lease terminations(1)

     79,745   

Proportionate share of Cash NOI from unconsolidated joint ventures(2)

     2,952   

Proportionate share of Cash NOI relating to noncontrolling interests

     (646)  
  

 

 

 

Cash NOI attributable to common stockholders(1)

     82,051   
  

 

 

 

NOI adjustments to normalize Cash NOI:

  

Free rent(3)

     2,121   

Partial quarter adjustment for stabilized properties acquired(4)

     —   

Partial quarter adjustment for properties disposed(5)

     (191)  

Partial quarter adjustment for development properties stabilized(6)

     51   

Partial quarter adjustment for redevelopment properties stabilized(6)

     —   

Partial quarter adjustment for value-add acquisitions stabilized(6)

     —   

Development properties not stabilized(7)

     (311)  

Redevelopment properties not stabilized(7)

     —   

Value-add acquisitions not stabilized(7)

     (6)  
  

 

 

 

NOI adjustments, net

     1,664   
  

 

 

 

Proforma Cash NOI(1)

   $ 83,715   
  

 

 

 

 Other income:

  
  

 

 

 

Institutional capital management and other fees

   $ 384   
  

 

 

 
Balance Sheet Items(8)    As of March 31, 2018   
  

 

 

 

Other assets:

  

Cash, cash equivalents and restricted cash

   $ 80,984   

Other receivables, net

     6,528   

Other tangible assets, net(9)

     29,175   

DCT’s proportionate share of other tangible assets related to unconsolidated joint ventures(10)

     3,901   

DCT’s proportionate share of pre-development costs related to unconsolidated joint ventures(10)

     10,215   

Development properties at book value

     320,062   

Properties in pre-development at book value

     60,412   

Redevelopment properties at book value

     9,838   

Value-add acquisitions at book value

     77,246   

Land held at book value

     3,656   
  

 

 

 

Other assets

   $ 602,017   
  

 

 

 

Liabilities:

  

Line of credit, senior unsecured notes and mortgage notes(11)

   $ 1,749,968   

DCT’s proportionate share of debt related to unconsolidated joint ventures(10)

     51,711   

Accounts payable, accrued expenses and distributions payable

     130,223   

Tenant prepaids and security deposits

     37,245   

Other tangible liabilities

     6,617   

Estimated remaining cost to complete stabilized development, redevelopment and value-add acquisition buildings

     1,457   
  

 

 

 

Liabilities

   $ 1,977,221   
  

 

 

 

Other information:(12)

  

Common shares outstanding at period end

     94,075   

Operating partnership units outstanding at period end

     3,241   

 

(1)  See reconciliation of non-GAAP financial measure to net income attributable to common stockholders in Definitions.
(2) Amount is determined as our share of Cash NOI from unconsolidated joint ventures. Although we contributed 100% of the initial cash equity capital required by the SCLA venture, after return of certain preferential distributions on capital invested, profits and losses are generally split 50/50. Our proportional share of profits and losses related to the SCLA and JP Morgan ventures during the quarter were approximately 75.8% and 20.0%, respectively.
(3) Excludes approximately $0.1 million of free rent given during the quarter at properties associated with footnotes 4, 5, 6 and 7 below.
(4) Reflects three months of expected Cash NOI for stabilized properties acquired during the quarter, less actual Cash NOI recognized during the quarter related to these properties.
(5) Reflects actual Cash NOI recognized during the quarter for properties disposed of during the quarter.
(6) Reflects three months of proforma Cash NOI for development, Redevelopment and Value-Add Acquisitions properties stabilized during the quarter, less actual Cash NOI recognized during the quarter related to these properties.
(7) Reflects actual Cash NOI recognized during the quarter for development, Redevelopment and Value-Add Acquisitions not stabilized as of the end of the quarter.
(8) Includes assets held for sale.
(9) Excludes goodwill of approximately $0.9 million and deferred loan costs, net of amortization of approximately $0.9 million.
(10) Excludes $1.2 million of premiums, $6.5 million of noncontrolling interests’ share of consolidated debt and $6.7 million of deferred loan costs, net of amortization.
(11) Amount is determined as our share of debt related to unconsolidated joint ventures. See Definitions for additional information.
(12)  Excludes 0.5 million of participating securities.

 

 

First Quarter 2018

 

Supplemental Reporting Package

   LOGO    Page 10            


   Property Overview   
  

(unaudited)

  
     

As of March 31, 2018

 

 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
     Percentage
of Total
Annualized
Base Rent
 

 CONSOLIDATED OPERATING PORTFOLIO:(4)

        (in thousands           (in thousands     

 Atlanta

     35         7,883        11.9%        98.2%      $ 29,162      $ 3.77         9.2%  

 Baltimore/Washington D.C.

     18         2,164        3.3%        95.2%        14,487        7.03         4.6%  

 Chicago

     38         8,335        12.6%        93.2%        36,581        4.71         11.5%  

 Cincinnati

     29         3,177        4.8%        100.0%        12,035        3.79         3.8%  

 Dallas

     40         5,965        9.0%        100.0%        21,216        3.56         6.7%  

 Denver

            969        1.5%        92.1%        4,695        5.26         1.5%  

 Houston

     37         4,538        6.8%        96.4%        26,921        6.15         8.5%  

 Indianapolis

            844        1.3%        100.0%        3,505        4.15         1.1%  

 Miami(5)

     12         1,578        2.4%        96.5%        12,426        8.16         3.9%  

 Nashville

            2,064        3.1%        100.0%        7,182        3.48         2.3%  

 New Jersey

            1,313        2.0%        100.0%        8,190        6.24         2.6%  

 Northern California

     27         4,301        6.5%        97.7%        27,747        6.60         8.7%  

 Orlando

     21         1,864        2.8%        98.3%        8,704        4.75         2.7%  

 Pennsylvania

     13         3,038        4.6%        95.4%        14,522        5.01         4.6%  

 Phoenix

     21         1,997        2.9%        99.3%        9,127        4.60         2.9%  

 Seattle

     31         4,089        6.1%        98.7%        24,985        6.19         7.8%  

 Southern California(5)

     50         9,197        14.0%        99.9%        55,161        6.00         17.4%  
  

 

 

    

 

 

 

 

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total/weighted average – operating portfolio

     393         63,316        95.6%        97.7%        316,646        5.12         99.8%  
  

 

 

    

 

 

 

 

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 
                  

 DEVELOPMENT PROPERTIES:

                  

 Chicago

            307        0.5%        0.0%        —        —         0.0%  

 Dallas

            382        0.6%        65.7%        428        1.71         0.1%  

 Denver

            168        0.3%        0.0%        —        —         0.0%  

 Northern California

            796        1.2%        0.0%        —        —         0.0%  
  

 

 

    

 

 

 

 

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total/weighted average – development properties

            1,653        2.6%        15.2%        428        1.71         0.1%  
  

 

 

    

 

 

 

 

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 REDEVELOPMENT PROPERTIES:

                  

 Orlando

            121        0.2%        0.0%        —        —         0.0%  
  

 

 

    

 

 

 

 

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total/weighted average – redevelopment properties

            121        0.2%        0.0%        —        —         0.0%  
  

 

 

    

 

 

 

 

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 
                  

 VALUE-ADD ACQUISITIONS:

                  

 Chicago

            788        1.2%        0.0%        —        —         0.0%  

 Denver

            190        0.3%        23.3%        311        7.03         0.1%  

 Northern California(6)

            37        0.1%        100.0%        —        —         —%  
  

 

 

    

 

 

 

 

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total/weighted average – value-add acquisitions

            1,015        1.6%        8.1%        311        3.78         0.1%  
  

 

 

    

 

 

 

 

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 
                  
                  
  

 

 

    

 

 

 

 

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total/weighted average – consolidated properties

     404         66,105        100.0%        94.1%      $ 317,385      $ 5.10         100.0%  
  

 

 

    

 

 

 

 

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

 

 

 

First Quarter 2018

 

Supplemental Reporting Package

   LOGO    Page 11            


   Property Overview   
  

(continued)

  
     

See footnotes on next page.

As of March 31, 2018

 

 

 

Markets

  Number of
Buildings
    Percentage
Owned(7)
    Square
Feet
    Percentage
of Total
Square Feet
    Occupancy
Percentage(1)
    Annualized
Base Rent(2)
    Annualized
Base Rent
per Occupied
Square Foot
    Percentage of
Total Annualized
Base Rent
 

UNCONSOLIDATED JOINT VENTURES:(8)

        (in thousands)           (in thousands)      

OPERATING PORTFOLIO IN UNCONSOLIDATED JOINT VENTURE:

               

Southern California Logistics Airport(9)

          50.0%       2,975        39.2%       99.9%     $ 11,703      $ 3.94        37.7%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total/weighted average – unconsolidated operating portfolio

          50.0%       2,975        39.2%       99.9%       11,703        3.94        37.7%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING PORTFOLIO IN CO-INVESTMENT VENTURE:

               

Chicago

          20.0%       1,033        13.6%       100.0%       4,380        4.24        14.1%  

Cincinnati

          20.0%       543        7.2%       100.0%       2,191        4.03        7.1%  

Dallas

          20.0%       540        7.1%       100.0%       1,839        3.40        5.9%  

Denver

          20.0%       773        10.2%       100.0%       4,415        5.71        14.2%  

Nashville

          20.0%       1,020        13.5%       100.0%       3,131        3.07        10.1%  

Orlando

          20.0%       696        9.2%       91.4%       3,364        5.29        10.9%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total/weighted average – co-investment operating properties

    13        20.0%       4,605        60.8%       98.7%       19,320        4.25        62.3%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total/weighted average – unconsolidated portfolio

    21        31.8%       7,580        100.0%       99.2%     $ 31,023      $ 4.13        100.0%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

 

 

 

(1) Based on leases commenced as of March 31, 2018.
(2) Annualized base rent is calculated as monthly contractual base rent (cash basis) per the terms of the lease, as of March 31, 2018, multiplied by 12.
(3) Excludes total annualized base rent associated with tenants currently in free rent periods of $7.0 million, which excludes free rent related to developments, Redevelopments and Value-Add Acquisitions not stabilized during the three months ended March 31, 2018, based on the first month of cash base rent.
(4) Includes assets held for sale.
(5) As of March 31, 2018, our ownership interest in the Miami and Southern California properties was 99.7% and 95.4%, respectively, based on equity ownership weighted by square feet.
(6) Building was acquired via a sale-leaseback transaction with a short lease that expires on August 31, 2018.
(7) Percentage owned is based on equity ownership weighted by square feet.
(8) See Definitions for additional information.
(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.

 

 

First Quarter 2018

 

Supplemental Reporting Package

   LOGO    Page 12            


   Development Overview  
   (unaudited, amounts in thousands, except acres and number of buildings)  
    

As of March 31, 2018

 

 

                                Cost Incurred                    

Project

 

Market

  Acres     Number
of
Buildings
    Square
Feet
    Percentage
Owned(1)
    Q1-2018     Cumulative
Costs at
3/31/2018
    Projected
Investment
    Completion
Date(2)
    Percentage
Leased(3)
 

Development Activities:

                   

Stabilized in Q1 2018

                   

DCT Commerce Center Building C

  Miami     8       1       136       100%     $ 253     $ 16,209     $ 16,496       Q2-2017       100%  
   

 

 

                 

Projected Stabilized Yield(4)

      6.4%                  
   

 

 

                 

Development Projects in Lease-Up

                   

DCT Stockyards Industrial Center

  Chicago     10       1       167       100%     $ 342     $ 14,266     $ 17,071       Q4-2017       38%  

DCT Greenwood

  Chicago     8       1       140       100%       304       10,073       11,671       Q4-2017       0%  

DCT DFW Trade Center

  Dallas     10       1       112       100%       1,040       9,328       9,790       Q3-2017       48%  

DCT Miller Road

  Dallas     17       1       270       100%       773       16,339       16,368       Q3-2017       100%  

DCT Summit Distribution Center

  Denver     12       1       168       100%       270       12,053       13,856       Q4-2017       0%  

DCT Arbor Avenue

  Northern California     40       1       796       100%       1,314       44,720       54,085       Q1-2018       0%  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 
  Total     97       6       1,653       100%     $ 4,043     $ 106,779     $ 122,841         23%  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Development Projects Under Construction

                   

DCT River West Distribution Center Phase II

  Atlanta     60       1       926       100%     $ 2,916     $ 7,784     $ 46,688       Q4-2018       0%  

DCT Terrapin Commerce Center Building I

  Baltimore/Wash. D.C.     13       1       126       100%       1,644       10,533       14,762       Q2-2018       0%  

DCT Terrapin Commerce Center Building II

  Baltimore/Wash. D.C.     10       1       94       100%       1,538       7,596       10,900       Q2-2018       0%  

2560 White Oak Expansion

  Chicago     4             54       100%       1,055       2,999       5,014       Q3-2018       100%  

DCT Freeport West Building II

  Dallas     7       1       111       100%       2,024       4,122       10,496       Q3-2018       0%  

DCT Freeport West Building III

  Dallas     6       1       83       100%       1,523       3,029       7,962       Q3-2018       0%  

DCT Rail Center 225, B

  Houston     13       1       222       100%       3,638       10,132       15,650       Q2-2018       100%  

DCT Petroport Industrial Park Building I

  Houston     12       1       89       100%       2,304       5,512       6,014       Q2-2018       100%  

DCT Petroport Industrial Park Building II

  Houston     22       1       163       100%       2,897       9,324       10,129       Q2-2018       100%  

DCT Commerce Center Building D

  Miami     8       1       137       100%       1,316       13,843       15,998       Q2-2018       0%  

DCT Commerce Center Building E

  Miami     10       1       162       100%       1,866       20,452       20,705       Q2-2018       83%  

Seneca Commerce Center Building I

  Miami     13       1       222       90%       3,769       15,436       22,080       Q2-2018       0%  

Seneca Commerce Center Building IV

  Miami     4       1       62       90%       1,141       4,918       8,271       Q3-2018       0%  

DCT Midline Commerce Center

  New Jersey     34       1       440       100%       6,228       24,398       35,952       Q3-2018       0%  

DCT Williams Corporate Center

  Northern California     4       1       75       100%       2,834       11,662       14,778       Q2-2018       0%  

DCT Airport Distribution Center Building E

  Orlando     6       1       102       100%       1,156       2,763       7,484       Q3-2018       0%  

DCT Rockline Commerce Center Building I

  Pennsylvania     8       1       112       100%       1,558       7,922       9,310       Q2-2018       0%  

DCT Rockline Commerce Center Building II

  Pennsylvania     17       1       224       100%       2,879       11,058       18,213       Q2-2018       0%  

Blair Logistics Center Building A

  Seattle     27       1       545       100%       5,716       29,699       49,890       Q3-2018       0%  

Hudson Distribution Center

  Seattle     15       1       288       100%       1,302       10,101       30,394       Q4-2018       0%  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 
  Total     293       19       4,237       99%     $ 49,304     $ 213,283     $ 360,690         16%  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Total Development Projects in Lease-Up and Under Construction

      390       25       5,890       98%     $ 53,347     $ 320,062     $ 483,531         18%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Leased Pre-Development

                   

DCT Conewago Commerce Center(5)

  Pennsylvania     8       1       100       0%     $     $     $ 7,650       TBD       100%  

Total Projects Under Development

      398       26       5,990       98%     $ 53,347     $ 320,062     $ 491,181         19%  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Projected Stabilized Yield – Projects Under Development(4)

    6.8%                  
 

 

 

                 

Pre-Development

                   

DCT River West Distribution Center Phase III

  Atlanta     88           100%     $ 136     $ 5,147        

Seneca Commerce Center Building II

  Miami     11           90%       107       2,906        

Seneca Commerce Center Building III

  Miami     11           90%       189       2,864        

DCT Airport Distribution Center Building F

  Orlando     6           100%       24       1,525        

DCT Airport Distribution Center Building G

  Orlando     11           100%       42       2,442        

Blair Logistics Center Building B

  Seattle     20           100%       713       14,397        

Blair Logistics Storage Yard

  Seattle     6           100%       58       3,441        

167 Landing Building A

  Seattle     13           100%       277       5,024        

167 Landing Building B

  Seattle     5           100%       100       1,937        

601 Monster Road

  Seattle     10           100%       346       9,551        

DCT Jurupa Logistics Center II

  Southern California     5           100%       217       3,250        

DCT Fontana West Logistics Center

  Southern California     9           100%       7,928       7,928        
   

 

 

         

 

 

   

 

 

       
  Total     195           $ 10,137     $ 60,412        
   

 

 

         

 

 

   

 

 

       

 

  (1) Percentage owned is based on equity ownership weighted by square feet.
  (2) The completion date represents the date of building shell-construction completion or estimated date of shell-construction completion.
  (3)  Percentage leased is computed as of the press release date.
  (4) Yield computed on a GAAP basis including rents on a straight-line basis.
  (5)  100% pre-lease executed by DCT for build-to-suit property with the development land acquisition expected to close in 2018. The land is under contract but is not included in our Consolidated Balance Sheets as of March 31, 2018.

 

 

First Quarter 2018

 

Supplemental Reporting Package

   LOGO    Page 13            


   Redevelopment Overview  
   (unaudited, amounts in thousands, except acres and number of buildings)  
    

As of March 31, 2018

 

 

                                Cost Incurred                  

Project

 

Market

  Acres     Number
of
Buildings
    Square
Feet
    Percentage
Owned(1)
    Q1-2018     Cumulative
Costs at
3/31/2018
    Projected
Investment
   

Completion
Date(2)

  Percentage
Leased(3)
 

Redevelopment Projects Under Construction

 

     

6550 Hazeltine National Drive

  Orlando                 121        100%     $ 357      $ 9,838      $ 10,771      Q2-2018      0%  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Projected Stabilized Yield – Projects Under Redevelopment(4)

    6.2%            
 

 

 

           

 

 

 

 

  (1) Percentage owned is based on equity ownership weighted by square feet.
  (2) The completion date represents the date of building shell-construction completion or estimated date of shell-construction completion.
  (3) Percentage leased is computed as of the press release date.
  (4) Yield computed on a GAAP basis including rents on a straight-line basis.

 

 

First Quarter 2018

 

Supplemental Reporting Package

   LOGO    Page 14            


   Value-Add Acquisitions Overview  
   (unaudited, amounts in thousands, except acres and number of buildings)  
    

As of March 31, 2018

 

 

                                Cost Incurred                  

Project

 

Market

  Acres     Number
of
Buildings
    Square
Feet
    Percentage
Owned(1)
    Q1-2018     Cumulative
Costs at
3/31/2018
    Projected
Investment
   

Acquisition
Date

  Percentage
Leased(2)
 

Value-Add Acquisitions in Lease-Up

                   

1101 Airport Blvd

  Chicago     47              788        100%     $ 834      $ 48,400      $ 55,213          0%  

10000 E 45th Ave

  Denver                 146        100%       92        15,881        16,821          62%  

17801 E 40th Ave(3)

  Denver                 44        100%             5,318        5,549          100%  

2501 Davis Street

  Northern California                 37        100%       7,647        7,647        8,452          100%  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Total Value-Add Acquisitions in Lease-Up

      60              1,015        100%     $ 8,573      $ 77,246      $ 86,035          17%  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Projected Stabilized Yield – Value-Add Acquisitions in Lease-Up(4)

      5.8%                  
 

 

 

                 

 

 

(1) Percentage owned is based on equity ownership weighted by square feet.

 

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

 

(3) Percentage leased includes a 44,000 square foot lease known move-out expected to occur within 24 months of the acquisition date.

 

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

 

 

First Quarter 2018

 

Supplemental Reporting Package

   LOGO    Page 15            


   Acquisition and Disposition Summary  
   (unaudited)  
    

For the Three Months Ended March 31, 2018

 

 

Month

  

Property Name

 

Acquisition Type

 

Market

  Size     Occupancy at
Acquisition/
Disposition
    Occupancy at
March 31,
2018
 

BUILDING ACQUISITIONS:

        (buildings in sq. ft. )     

February

   2501 Davis Street   Value-Add Acquisition(1)  

Northern

California

    37,000        100.0%       100.0%  
        

 

 

   

 

 

   

 

 

 

Total YTD Purchase Price – $7.1 million

        37,000        100.0%       100.0%  
     

 

 

   

 

 

   

 

 

 

LAND ACQUISITIONS:

         

February

   DCT West Fontana Logistics Center   Pre-Development  

Southern

California

    9.2       
        

 

 

     

Total YTD Land Purchase Price – $7.3 million

        9.2 acres       
     

 

 

     

BUILDING DISPOSITIONS:

         

Consolidated Properties

         

January

   7245 S. Harl Avenue     Phoenix     27,000        100.0%    

January

   860 Marine Drive     Charlotte(2)     472,000        100.0%    

January

   Deltapoint Business Park I     Memphis(2)     885,000        100.0%    

January

   Shelby 5     Memphis(2)     500,000        100.0%    

January

   4021 Pike Lane     Northern California     38,000        100.0%    

February

  

2827 Peterson Place

    Atlanta     12,000        —%    
        

 

 

   

 

 

   

Total YTD Sales Price – $100.9 million

        1,934,000        99.4%    
     

 

 

   

 

 

   

 

 

(1) See Definitions and Value-Add Acquisitions Overview for additional information.
(2) The company exited the Charlotte and Memphis markets upon the disposition of these properties.

 

 

First Quarter 2018

 

Supplemental Reporting Package

   LOGO    Page 16            


   Indebtedness  
   (unaudited, dollar amounts in thousands)  
    

As of March 31, 2018

 

 

 

Description

   Stated Interest Rate    Effective Interest Rate(1)   

Maturity Date

   Balance as of
    March 31, 2018    
 

SENIOR UNSECURED NOTES:

           

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

   4.60%    4.75%    August & October 2023      360,000      

2024 Notes, fixed rate

   3.75%    3.75%    August 2024      80,000      

2026 Notes, fixed rate

   3.92%    3.92%    August 2026      90,000      

2028 Notes, fixed rate

   4.02%    4.02%    August 2028      80,000      

Premiums, net of amortization

              47      

Deferred loan costs, net of amortization

              (4,218)     
           

 

 

 
              1,005,829      
           

 

 

 

MORTGAGE NOTES:

           

Fixed rate secured debt

   5.92%    5.84%    October 2018 – August 2025      157,437      

Premiums, net of amortization

              1,138      

Deferred loan costs, net of amortization

              (225)     
           

 

 

 
              158,350      
           

 

 

 

BANK UNSECURED CREDIT FACILITIES:

           

Senior unsecured revolving credit facility(2)

   2.80%    2.80%    April 2019      264,000      

2020 Notes, variable rate(3)

   2.90%    2.90%    April 2020      125,000      

2022 Notes, fixed rate(4)

   2.81%    2.81%    December 2022      200,000      

Deferred loan costs, net of amortization

              (2,253)     
           

 

 

 
              586,747      
           

 

 

 

Total carrying value of consolidated debt

              $ 1,750,926      
           

 

 

 

Fixed rate debt

   4.61%    4.88%         78%   

Variable rate debt

   2.84%    2.84%         22%   
  

 

  

 

     

 

 

 

Weighted average interest rate

   4.22%    4.43%         100%   
  

 

  

 

     

 

 

 

DCT PROPORTIONATE SHARE OF UNCONSOLIDATED JOINT VENTURE DEBT(5)

 

     

 

 

 

Stirling Capital Investments (SCLA)

   4.24%    4.24%         $ 51,711      
           

 

 

 

Scheduled Principal Payments of Debt as of March 31, 2018 (excluding premiums and deferred loan costs)

 

 

 

Year

          Senior Unsecured Notes                     Mortgage Notes                 Bank Unsecured Credit Facilities                             Total                       

2018

    $ 81,500        $ 5,053        $ —        $ 86,553   

2019

    46,000        51,344        264,000        361,344   

2020

    50,000        71,933        125,000        246,933   

2021

    92,500        18,436        —        110,936   

2022

    130,000        3,116        200,000        333,116   

2023

    360,000        6,366        —        366,366   

2024

    80,000        739        —        80,739   

2025

    —        450        —        450   

2026

    90,000        —        —        90,000   

2027

    —        —        —        —   

Thereafter

    80,000        —        —        80,000   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    $ 1,010,000        $ 157,437        $ 589,000        $ 1,756,437   
 

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Effective interest rate includes direct hedging costs and mark-to-market adjustments.
(2)  The $400.0 million senior unsecured revolving credit facility matures April 8, 2019 and bears interest at a variable rate equal to LIBOR, plus a margin of between 0.875% to 1.55% per annum or, at our election, an alternate base rate plus a margin of between 0.00% to 0.55% per annum, depending on our public debt credit rating. There was $134.1 million available under the senior unsecured revolving credit facility, net of two letters of credit totaling $1.9 million as of March 31, 2018.
(3) The senior unsecured $125.0 million term loan matures April 8, 2020 and bears interest at a variable rate equal to LIBOR, plus a margin, depending on our public debt credit rating, of between 0.90% 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.
(4) The senior unsecured $200.0 million term loan matures December 10, 2022 and bears interest at a variable rate equal to LIBOR, plus a margin, based on our public debt credit rating. Based on the amendment to our senior unsecured term loan in December 2017, our margin ranges between 0.90% and 1.75% per annum. Based on our current public debt credit rating, this results in a fixed rate of 2.81%.
(5) 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. See Definitions for additional information.

 

 

First Quarter 2018

 

Supplemental Reporting Package

   LOGO    Page 17            


   Capitalization, Dividend Yield and Fixed Charge Coverage Ratio  
   (unaudited, amounts in thousands, except per share data)  
    

Capitalization at March 31, 2018

 

 

 

Description

       Shares or Units(1)              Share Price              Market Value      

Common shares outstanding

     94,075      $ 56.34      $ 5,300,186      

Operating partnership units outstanding(2)

     3,241      $ 56.34        182,598      
        

 

 

 

Total equity market capitalization

           5,482,784      
        

 

 

 

Consolidated debt, excluding deferred loan costs of $6.7 million

           1,757,622      

Less: Noncontrolling interests’ share of consolidated debt(3)

           6,469      

Proportionate share of debt related to unconsolidated joint ventures(4)

           51,711      
        

 

 

 

DCT share of total debt

           1,815,802      
        

 

 

 

Total market capitalization

         $ 7,298,586      
        

 

 

 

DCT share of total debt to total market capitalization

           24.9%  
        

 

 

 

 

Common Stock Dividend Yield

 

 

 

     For the Three Months Ended  
         3/31/2018             12/31/2017             9/30/2017             6/30/2017             3/31/2017      

Dividend declared per common share

   $ 0.36     $ 0.36     $ 0.31     $ 0.31     $ 0.31  

Price per share

   $ 56.34     $ 58.78     $ 57.92     $ 53.44     $ 48.12  

Dividend yield – annualized

     2.6     2.4     2.1     2.3     2.6

Fixed Charge Coverage Ratio

 

 

 

     For the Three Months Ended March 31,  
     2018      2017  

Consolidated net income of DCT Industrial Trust Inc.

   $ 50,942       $ 15,789   

Interest expense

     16,050         16,755   

Proportionate share of interest expense from unconsolidated joint ventures(4)

     532         271   

Real estate related depreciation and amortization

     41,232         41,605   

Proportionate share of real estate related depreciation and amortization from unconsolidated joint ventures(4)

     1,216         1,223   

Income tax expense and other taxes

     81         134   

Impairment loss on land

     371         —   

Non-FFO gain on dispositions of real estate interests

     (32,190)        (26)  
  

 

 

    

 

 

 

EBITDAre(5)

     78,234         75,751   

Stock-based compensation

     1,569         1,426   
  

 

 

    

 

 

 

Adjusted EBITDA

   $ 79,803       $ 77,177   
  

 

 

    

 

 

 

CALCULATION OF FIXED CHARGES:

     

Interest expense

   $ 16,050       $ 16,755   

Capitalized interest

     4,153         2,685   

Amortization of loan costs and debt premium/discount

     (509)        (216)  

Other non-cash interest expense

     (1,023)        (1,053)  

Proportionate share of interest expense from unconsolidated joint ventures(4)

     532         271   
  

 

 

    

 

 

 

Total fixed charges

   $ 19,203       $ 18,442   
  

 

 

    

 

 

 

Fixed charge coverage ratio

     4.2x         4.2x   
  

 

 

    

 

 

 

 

(1) Excludes 0.4 million of unvested Long-Term Incentive Plan Units, 0.1 million shares of unvested Restricted Stock and 0.1 million Phantom Shares outstanding as of March 31, 2018.
(2) Operating partnership unit per share price is based on the per share closing price of DCT’s common stock.
(3) Amount includes the portion of consolidated debt related to properties in which there are noncontrolling ownership interests.
(4) Amounts are determined based on our ownership share of such amounts from the unconsolidated joint ventures. See Definitions for additional information.
(5) EBITDAre as defined by the National Association of Real Estate Investment Trusts (Nareit).

 

 

First Quarter 2018

 

Supplemental Reporting Package

   LOGO    Page 18            


   Debt Covenants and Credit Ratings  
   (unaudited)  
    

Debt Covenant Summary as of March 31, 2018

 

 

 

Senior Unsecured Notes(1)

           Covenant                   Actual Ratio        

Leverage ratio

   < 55%   36.7%

Fixed charge coverage ratio

   > 1.5 x   3.82 x

Secured debt leverage ratio

   < 45%   5.2%

Unencumbered assets to unsecured debt

   > 1.67 x   2.57 x
    

Bank Unsecured Credit Facilities(1)

   Covenant   Actual Ratio

Leverage ratio

   < 60%   31.8%

Fixed charge coverage ratio

   > 1.5 x   3.83 x

Secured debt leverage ratio

   < 35%   3.6%
    

Bond Indentures(1)

   Covenant   Actual Ratio

Leverage ratio

   < 60%   35.6%

Fixed charge coverage ratio

   > 1.5 x   4.07 x

Secured debt leverage ratio

   < 40%   3.2%

Unencumbered assets to unsecured debt

   > 1.50 x   2.73 x

Credit Ratings

 

 

 

Agency

                       Rating                     
Moody’s    Baa2 (Stable)
Standard & Poor’s    BBB (Stable)

 

 

 

 

 

 

 

 

(1) Calculations are compiled in accordance with the note purchase agreement, credit agreement and bond indenture agreement, respectively, based upon definitions contained therein. The Company is not presenting these ratios and the related calculations for any purpose other than informational, and it is not intending for these measures to provide information to investors about the Company’s financial condition or results of operations.

 

 

First Quarter 2018

 

Supplemental Reporting Package

   LOGO    Page 19            


   Investment in Unconsolidated Joint Ventures Summary  
   (unaudited, dollar amounts in thousands)  
    

Statement of Operations and Other Data

 

 

 

     For the Three Months Ended March 31, 2018  
                 JP Morgan                       Stirling Capital Investments      

Total rental revenues

   $ 6,439          $ 4,638        

Rental expenses and real estate taxes

     (1,587)           (676)       

Depreciation and amortization

     (2,077)           (1,601)       

General and administrative expense

     (190)           (585)       
  

 

 

    

 

 

 

Operating income

     2,585            1,776        

Interest expense

     —            (1,258)       

Interest and other expense

     (7)           —        
  

 

 

    

 

 

 

Net income

   $ 2,578          $ 518        
  

 

 

    

 

 

 

Other Data:

     

Number of properties

     13            8        

Square feet (in thousands)

     4,605            2,975        

Occupancy

     98.7%        99.9%     

DCT ownership(1)

     20.0%        50.0%(2)  

Balance Sheet

 

 

     As of March 31, 2018  
                 JP Morgan                       Stirling Capital Investments      

Total investment in properties

   $ 271,508       $ 147,929      

Accumulated depreciation and amortization

     (80,412)        (39,354)     
  

 

 

    

 

 

 

Net investment in properties

     191,096         108,575      

Cash, cash equivalents and restricted cash

     3,053         1,751      

Other assets

     4,446         3,051      
  

 

 

    

 

 

 

Total assets

     198,595         113,377      
  

 

 

    

 

 

 
     

Other liabilities

     5,018         1,257       

Secure debt maturities – 2019

     —         60,166  (3)   

Secure debt maturities – 2021

     —         6,604  (4)   

Secure debt maturities – thereafter

     —         42,449  (5)   
  

 

 

    

 

 

 

Total secured debt

     —         109,219       
  

 

 

    

 

 

 

Total liabilities

     5,018         110,476       

Partners or members’ capital

     193,577         2,901       
  

 

 

    

 

 

 

Total liabilities and partners or members’ capital

   $ 198,595       $ 113,377       
  

 

 

    

 

 

 

 

(1) See Definitions for additional information.
(2) 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.
(3) $60.3 million of debt, excluding $0.1 million of deferred loan costs, requires interest only payments through October 2017 and has a variable interest rate of LIBOR plus 2.2%.
(4) $6.6 million of debt is payable to DCT, requires principal and interest payments through November 2021 and has a fixed interest rate of 8.5%.
(5) $29.7 million of debt, excluding $0.5 million of deferred loan costs, requires principal and interest payments through May 2024 and has a fixed interest rate of 4.6%. $13.4 million of debt, excluding $0.2 million of deferred loan costs, requires principal and interest payments through July 2024 and has a variable interest rate of LIBOR plus 2.5%.

 

 

First Quarter 2018

 

Supplemental Reporting Package

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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 interests, 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 and redevelopment costs, Due Diligence Capital (defined below), casualty costs and tenant improvement.

Cash Basis Rent Growth:

Cash Basis Rent Growth reflects the percentage change in base rent of the lease executed during the period compared to base rent of the prior lease on the same space. The calculation compares the first base rent payment due after the lease commencement date compared to the base rent of the last monthly payment due prior to the termination of the lease (holdover payments are excluded). If the first payment under the new lease is less than 50% of the second year’s base rent (a “teaser rate”), then we use the second year’s base rent payment compared to the base rent of the last regular monthly base rent payment due prior to the termination of the lease (holdover payments on the preceding lease are excluded from the calculation). All base rents are compared on a net basis. Base rent under gross or similar type leases are converted to a net base rent based on an estimate of the applicable recoverable expenses.

Cash Net Operating Income (“Cash NOI”):

We calculate Cash NOI as NOI (as defined on next page) 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 NOI 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 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.

Cash NOI, Excluding Revenue From Lease Terminations:

See definition within Cash Net Operating Income above.

Due Diligence Capital:

Deferred acquisition costs identified during due diligence needed to stabilize an asset and/or bring an asset up to our physical standards.

EBITDAre:

In conformance with the National Association of Real Estate Investment Trusts (“Nareit”) definition that was issued via a white paper in September 2017, the Company has adopted the Nareit definition of EBITDAre. This definition of Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) is defined as consolidated net income of DCT Industrial, Inc., excluding gains or losses from sales of depreciable real estate property and impairments of depreciated assets including in unconsolidated investments caused by a decrease in value of depreciated property, plus interest, income taxes, depreciation and amortization. All adjustments as described above also reflect the Company’s share of EBITDAre in unconsolidated investments.

Effective Interest Rate:

Reflects the impact to interest rates of GAAP amortization of discounts/premiums and hedging transactions. These rates do not reflect the impact of facility or administrative fees, amortization of loan costs or hedge ineffectiveness.

Fixed Charge Coverage Ratio:

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. We consider Fixed Charge Coverage Ratio to be an appropriate supplemental measure of our ability to satisfy fixed financing obligations.

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 FFO, as defined by 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.

FFO, As Adjusted:

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, as adjusted, 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 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.

Free Rent:

Free rent represents the estimated base rent forgone during the period while a tenant occupies a space but does not pay any base rent. Such amount is calculated for a given space as the monthly contractual base rent amount of the first month following the free rent period multiplied by the number of months of abated rent. For any period in which a space is occupied for less than a full month, if occupancy begins prior to the 16th of the month, a full month of free rent is included in the calculation, and if occupancy begins on or after the 16th of the month, no free rent would be included in the calculation for that month.

GAAP:

United States generally accepted accounting principles.

Land Held:

Land Held that is not intended to be improved or developed in the near future.

Net Effective Rent:

Average monthly base rental income over the term of the lease, calculated on a straight-line basis.

 

 

 

First Quarter 2018

 

Supplemental Reporting Package

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   Definitions   
   (continued)   
     

Net Operating Income (“NOI”):

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 gains, gain on dispositions 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 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 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.

 

     For the Three Months Ended March 31,
     2018   2017

Reconciliation of net income attributable to common stockholders to NOI: (amounts in thousands)

 

Net income attributable to common stockholders

   $ 48,823     $ 14,959  

Net income attributable to noncontrolling interests

     2,119       830  

Income tax expense and other taxes

     81       134  

Impairment loss on land

     371        

Interest and other (income) expense

     (34     5  

Interest expense

     16,050       16,755  

Equity in earnings of unconsolidated joint ventures, net

     (1,077     (1,516

General and administrative expense

     7,464       7,192  

Real estate related depreciation and amortization

     41,232       41,605  

Gain on dispositions of real estate interests

     (32,190     (26

Casualty loss (gain)

     5       (270

Institutional capital management and other fees

     (384     (472
  

 

 

 

 

 

 

 

Total NOI

   $ 82,460     $ 79,196  
    

Quarterly Same-Store Portfolio NOI:

    

Total NOI

   $ 82,460     $ 79,196  

Less NOI – non-same-store properties

     (6,002     (4,617

Less revenue from lease terminations

     (263     (502

Add early termination straight-line rent adjustment

     49       17  
  

 

 

 

 

 

 

 

NOI, excluding revenue from lease terminations

     76,244       74,094  

Less straight-line rents, net of related bad debt expense

     (783     (2,975

Less amortization of above/(below) market rents

     (555     (745
  

 

 

 

 

 

 

 

Cash NOI, excluding revenue from lease terminations

   $ 74,906     $ 70,374  
  

 

 

 

 

 

 

 

Operating Portfolio:

Includes all consolidated stabilized properties. Developments, Redevelopments and Value-Add Acquisitions are placed into the Operating Portfolio upon stabilization. Stabilized acquisitions are included in the Operating Portfolio upon acquisition. Once a property is included in the Operating Portfolio, it remains until it is subsequently disposed or placed into redevelopment.

 

 

First Quarter 2018

 

Supplemental Reporting Package

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   Definitions   
   (continued)   
     

Proforma Cash NOI:

DCT Industrial considers Proforma Cash NOI to be a useful measure to assist investors and analysts in estimating the fair value of certain assets of our Company. The assessment of Proforma Cash NOI is subjective in that it involves estimates and assumptions and can be calculated using various methods. DCT Industrial’s Proforma Cash NOI may not be comparable to that of other real estate companies.

 

     For the Three Months
Ended March 31, 2018

Reconciliation of net income attributable to common stockholders to Proforma Cash NOI: (amounts in thousands)

  

Net income attributable to common stockholders

   $ 48,823  

Net income attributable to noncontrolling interests

     2,119  

Income tax expense and other taxes

     81  

Impairment loss on land

     371  

Interest and other income

     (34

Interest expense

     16,050  

Equity in earnings of unconsolidated joint ventures, net

     (1,077

General and administrative expense

     7,464  

Real estate related depreciation and amortization

     41,232  

Gain on dispositions of real estate interests

     (32,190

Institutional capital management and other fees

     (384
  

 

 

 

Total NOI

     82,460  

Less:

  

Revenue from lease terminations

     (343

Straight-line rents, net of related bad debt expense

     (1,632

Net amortization of below market rents

     (740
  

 

 

 

Cash NOI, excluding revenue from lease terminations

     79,745  

Proportionate share of Cash NOI from unconsolidated joint ventures(1)

     2,952  

Proportionate share of Cash NOI relating to noncontrolling interests

     (646
  

 

 

 

Cash NOI attributable to common stockholders

     82,051  
  

 

 

 

  

NOI adjustments to normalize Cash NOI:

  

Free rent

     2,121  

Partial quarter adjustment for properties disposed

     (191

Partial quarter adjustment for development properties stabilized

     51  

Value-add acquisitions not yet placed into operating portfolio

     (6

Development properties not yet placed into operating portfolio

     (311
  

 

 

 

NOI adjustments, net

     1,664  
  

 

 

 

Proforma Cash NOI

   $ 83,715  
  

 

 

 

 

(1) Amount is determined as our share of Cash NOI from unconsolidated joint ventures. See Unconsolidated Joint Ventures definition for additional information.

Projected Investment:

An estimate of total expected costs to stabilize properties in accordance with GAAP.

Projected Stabilized Yield:

Calculated as projected stabilized NOI on a straight-line basis divided by total projected investment for Developments, Redevelopments and Value-Add Acquisitions.

Purchase Price:

Contractual price agreed upon by the owner and buyer for the transfer of property.

Redevelopment:

Represents properties out of service while significant physical renovation of the property is underway or while the property is in lease-up subsequent to such renovation. May include previously stabilized properties taken out of service to change the properties’ use and/or enhance its functionality.

Retention:

Calculated as (retained square feet + relocated square feet) / ((retained square feet + relocated square feet + expired square feet) - (vacancies anticipated at acquisition square feet + bankruptcy and early termination square feet)).

 

 

First Quarter 2018

 

Supplemental Reporting Package

   LOGO    Page 23            


   Definitions   
   (continued)   
     

Sales Price:

Contractual price of real estate sold.

Same-Store:

Annual Same-Store Portfolio:

Includes all consolidated stabilized acquisitions acquired before January 1, 2017 and all consolidated developments, Redevelopments and Value-Add Acquisitions stabilized prior to January 1, 2017. Once a property is included in the Annual Same-Store Portfolio, it remains until it is subsequently disposed or placed into redevelopment.

Quarterly Same-Store Portfolio:

Includes all consolidated stabilized acquisitions acquired before January 1, 2017 and all consolidated developments, Redevelopments and Value-Add Acquisitions stabilized prior to January 1, 2017. Once a property is included in the Quarterly Same-Store Portfolio, it remains until it is subsequently disposed or placed into redevelopment.

Same-Store NOI Growth:

Same-Store NOI Growth is calculated by dividing the change in NOI applicable to same-store properties only, period over period, by the preceding period’s same-store properties’ NOI. We consider NOI from our Annual and Quarterly Same-Store Portfolios to be useful measures in evaluating our financial performance and to improve comparability between periods by including only properties owned for those comparable periods.

Scheduled Principal Amortization:

The aggregate amount of scheduled principal payments required to be made during the period, excluding optional prepayments, balloon payments and scheduled principal payments which are not amortized through periodic installments of principal and interest over the term of the debt.

Square Footage Period Changes (in thousands):