Press Releases

Fitch: Federal Mortgage Deal Slight Positive for U.S. Banks Feb 9, 2012 04:12PM

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings believes the federal and state settlement over alleged deficiencies in residential mortgage loan origination and foreclosure practices is a slight positive for participating banks as it caps litigation risk pertaining to these activities.

The U.S. Department of Justice, U.S. Department of Housing and Urban Development, and state attorneys general agreed to terms with the five largest U.S. mortgage servicers. Settlement terms could be extended to other large financial firms, and we anticipate that additional lenders will sign on. The settlement comes after more than a year of negotiations between the various parties.

Although the $25 billion headline figure appears large, the upfront costs, in the form of penalties, are more modest at around $5 billion. The bulk of the settlement will be felt in the form of increased loan modifications, including principal reductions. It will also require changes to residential loan servicing standards, which will likely increase servicing costs for participating lenders. We also think any such heightened servicing standards could also be extended to nonparticipating banks over time.

Banks largely incurred their proportionate liability in 4Q11 in anticipation of this settlement. This includes the immediate cash outlays, reserves for increased loan modifications, and effects of higher servicing costs. As such, we believe the financial impact has already been felt and that this agreement, in and of itself, is not a ratings factor considering each banks' portion of the agreement and in the context of their financial standing.

Although the settlement does not release banks from litigation related to potential securities laws violations (chiefly related mortgage-backed securitizations), it crystallizes potential liabilities pertaining to faulty origination and servicing practices, reducing the likelihood of extended, and likely more costly, litigation on this front. Under settlement terms, mortgage servicers in states that have opted into the deal are immune from any future state servicing and originating claims, although the federal and state governments retain the ability to press criminal charges and borrowers may still bring civil suits.

Fitch also believes that this settlement potentially paves the way for broader use of principal reductions on first lien mortgages, if this proves to be successful tool in addressing borrowers unable to keep up on their mortgages. If principal reductions become more prevalent than what is required under the settlement, it would have negative implications for bank home equity loans. Fitch has and will continue to assess the implications of housing related issues on bank balance sheets.

Additional information is available on www.fitchratings.com

The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Fitch RatingsKellie Geressy-NilsenSenior DirectorFitch Wire+1-212-908-9123Fitch Ratings1 State StreetorChristopher WolfeManaging DirectorFinancial Institutions+1-212-908-0771orMedia RelationsBrian Bertsch+1-212-908-0549brian.bertsch@fitchratings.com

Source: Fitch Ratings

SED International Announces Second Quarter 2012 Financial Results Feb 9, 2012 04:12PM

Net Income of $3.8 Million Driven by Strong Holiday Sales and Favorable Product Mix

Management Will Host Conference Call on Thursday, February 9 at 4:30 p.m. ET

LAWRENCEVILLE, Ga.--(BUSINESS WIRE)-- SED International Holdings, Inc. (Amex: SED), a multinational supply chain management provider and distributor of leading computer technology, consumer electronics, small appliances, housewares and personal care products, today announced financial results for the Company’s second quarter and the first six months of fiscal year 2012, which ended December 31, 2011.

Second Fiscal Quarter 2012 Financial Highlights

• Quarterly net revenue decreased 3.8% to $150.9 million from $157 million in last year's comparable period due primarily to an industry-wide disk drive shortage related to flooding in Thailand, the location of major suppliers of disk drive and drive components.
• Gross profit percent increased to 9.0%, an increase of 55.2%, to $13.6 million compared to 5.8% or $9.1 million in the comparable period last year.
• Operating income increased 246% to $4.3 million compared to operating income of $1.2 million in the comparable period last year; net income increased 326% to $3.8 million compared to net income of $0.9 million in the comparable period last year.
• EBITDA grew 229% year-over-year to a record $4.6 million compared to $1.4 million. As of December 31, 2011 cash and cash equivalents were $7.5 million, net trade receivables were $58.5 million, net inventories were $55.7 million and working capital was $21.3 million
• SED’s Return on Invested Capital, or ROIC, for the second quarter of fiscal 2012 was 19.4%.

“SED delivered strong bottom-line results, due primarily to robust holiday sales and a favorable product mix,” said Jonathan Elster, president and chief executive officer of SED International. “The e-commerce segment, where we have made considerable investments, was a major driver of our holiday sales strength and our results benefitted from a more favorable product mix. While an industry-wide shortage of hard drives from a tragic natural disaster in Thailand resulted in lower revenues, margins improved due to the scarce supply and our careful management of the supply chain. I am proud of our success in continuing to deliver product to a broad base of customers in this tough environment by closely managing our inventory on hand and working with our vendor partners to secure incremental supply. We experienced solid growth in the housewares, small appliances, and personal care categories, both at the top- and bottom-lines, as a result of our ability to integrate and execute an important and strategic acquisition.”

Second Fiscal Quarter 2012 Financial Results

Net revenue for the three months ended December 31, 2011 decreased $6.0 million, or 3.8%, to $150.9 million from $157 million in last year's comparable period, primarily due to the hard drive shortage. Gross profit was $13.6 million, or 9.0% gross margin, compared to $9.1 million, or 5.8% gross margin in the comparable period last year. Total operating expenses were $9.4 million for the quarter ended December 31, 2011 compared to $7.9 million for the year-ago period. Operating expenses as a percentage of sales were 6.2% compared to 5.0% in the year-ago period. Selling, general and administrative expenses for the second quarter were $8.9 million or 5.9% of revenue, compared to $7.2 million, or 4.6% of revenue, for the year-ago quarter.

The Company reported operating income of approximately $4.3 million in the second quarter compared to operating income of $1.2 million in the second quarter last year. Net income was $3.8 million, or $0.79 per basic and $0.78 per diluted share compared to net income of approximately $0.9 million, or $0.19 per basic and $0.18 per diluted share, in the year-ago period. For the second fiscal quarter of 2012, adjusted EBITDA, a non-GAAP measure, was approximately $4.6 million compared to approximately $1.4 million in the prior year second quarter.

Mr. Elster continued, “SED delivered sequential and year-over-year improvement in net income on slightly lower revenues, demonstrating our ability to manage through challenging market conditions and develop higher margin business categories. We are working very hard to mitigate the issues surrounding hard drive product availability and continue to partner closely with suppliers to maximize the amount of inventory we can procure to satisfy our customers’ needs. We expect a gradual improvement of availability and normalization of margins over the next two quarters.”

Year-to-Date Fiscal 2012 Results

Net revenue for the six months ended December 31, 2011 was $306.8 million compared to $298.6 million for last year's comparable period. For the six months, gross profit increased to $21.2 million, or 6.9% gross margin, compared to gross profit of $16.3 million or 5.5% gross margin in last year's same period. Total operating expenses were $18.4 million, or 6.0% of revenue for the six months ended December 31, 2011 compared to $13.9 million, or 4.7% of revenue for the year-ago period. Operating income was $2.7 million compared to operating income of $2.4 million in the same period last year. Net income was $2.9 million or $0.61 income per basic and $0.60 per diluted share compared to net income of $1.6 million, or $0.35 per basic and $0.32 per fully diluted share in the year ago period.

For the first six months of fiscal 2012, non-GAAP adjusted EBITDA was $3.3 million compared to $2.8 million in the same period last year.

The Company generated approximately $12.2 million in operating cash flow in the period ended December 31, 2011. Cash and equivalents were $7.5 million as of December 31, 2011 compared with $4.8 million as of June 30, 2011. Borrowings outstanding under SED’s revolving credit lines were $35.3 million as of December 31, 2011 compared with $38.4 million as of June 30, 2011. The decrease in current borrowing primarily reflects SED’s lower inventory levels. Shareholders’ equity was $25 million, or $5.05 per share as of December 31, 2011 compared to $22.7 million, or $4.67 per share as of June 30, 2011.

Mr. Elster concluded, “We continue our strategy of investing for the future. The successful integration of our acquisition, which has given us a strong foothold in a strategic channel and an additional U.S. distribution center, is on track and has already been effective in expanding our customer base and providing higher margin product mix. The distribution center, located in New Jersey, provides us the opportunity to deliver even faster turnaround and superior service to not only Northeastern U.S. customers, but also to our growing e-commerce fulfillment business.”

Conference Call

SED International management will host a teleconference and webcast today, Thursday, February 9, 2012 at 4:30 p.m. ET. Interested parties may participate in the conference call by dialing 1-877-941-1427 in the United States and 1-480-629-9664 internationally. For those unable to participate, an audio replay of the call will be available beginning approximately two hours following the conclusion of the live call through February 16, 2012. The audio replay may be accessed by dialing 1-877-870-5176 from the United States or 1-858-384-5517 internationally and entering access conference ID # 4506867.

The call also will be available as a live, listen-only webcast on the “Investor Relations” section of the SED International website at http://www.sedonline.com. Following the live webcast, an online archived webcast will also be available at the SED International website.

About SED International Holdings, Inc.

Founded in 1980, SED International Holdings, Inc. is a multinational, preferred distributor of leading computer technology, consumer electronics, small appliances, housewares, and personal care products. The company also offers custom-tailored supply chain management services ideally suited to meet the priorities and distribution requirements of the e-commerce, Business-to-Business and Business-to-Consumer markets. Headquartered near Atlanta, Georgia with business operations in California; Florida; Georgia; New Jersey; Texas; Bogota, Colombia and Buenos Aires, Argentina, SED serves a customer base of over 10,000 channel partners and retailers in the US and Latin America. To learn more, please visit www.SEDonline.com; or follow us on Twitter @SEDIntl.

Safe Harbor

Statements made in this Press Release that are not historical or current facts are "forward-looking statements.”These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond the control of the Company that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. These factors include adverse economic conditions, entry of new and stronger competitors, inadequate capital, unexpected costs, failure to gain product approval in foreign countries and failure to capitalize upon access to new markets. The Company disclaims any obligation to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events. These factors and others are discussed in the “Management's Discussion and Analysis" section of the Company's Reports on Forms 10-K and 10-Q available at www.sec.gov.

Non-GAAP Financial Measures

This press release includes the non-GAAP financial measure earnings before interest, tax, depreciation, amortization, and gain on acquisition, (“EBITDA”). This non-GAAP term, as defined by the Company, may not be comparable to similarly titled measures used by other companies. EBITDA is not a measure of financial performance under generally accepted accounting principles. Items excluded from EBITDA are significant components in understanding and assessing financial performance. EBITDA should not be considered in isolation or as a substitute for net income, operating income and other consolidated earnings data prepared in accordance with GAAP or as a measure of our profitability. The Company’s management believes that EBITDA represents a key operating metric for its business and this measure is useful to investors. A reconciliation of EBITDA to GAAP Net Income for the three and six months ended December 31, 2011 and 2010 is included with this press release.

SED INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
					December 31, 2011						June 30, 2011
ASSETS
Current assets:
Cash and cash equivalents				$	7,461					$	4,751
Trade accounts receivables, less allowance for doubtful accounts of $874 and $783, respectively					58,450						64,335
Inventories					55,671						63,359
Deferred tax assets, net					535						443
Other current assets					9,022						6,617
Total current assets					131,139						139,505
Property and equipment, net					3,351						1,928
Intangible assets, net					323						—
Total assets				$	134,813					$	141,433
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable				$	63,996					$	70,681
Accrued and other current liabilities					10,535						9,581
Revolving credit facilities					35,288						38,430
Total current liabilities					109,819						118,692
Commitments and contingencies
Shareholders' equity:
Preferred stock, $1.00 par value;129,500 shares authorized, none issued					—						—
Common stock, $.01 par value; 100,000,000
shares authorized; 7,086,188 shares issued
and 4,952,352 shares outstanding at December
31, 2011 and 6,979,161 shares issued and
4,867,697 shares outstanding at June 30, 2011
					70						70
Additional paid-in capital					70,877						70,648
Accumulated deficit					(27,175	)					(30,112	)
Accumulated other comprehensive loss					(3,987	)					(3,171	)
Treasury stock 2,131,836 shares and 2,111,464 shares, at cost					(14,791	)					(14,694	)
Total shareholders' equity					24,994						22,741
Total liabilities and shareholders' equity				$	134,813					$	141,433

SED INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
				Three Months Ended									Six Months Ended
				December 31,									December 31,
				2011				2010					2011				2010
Net sales			$	150,925			$	156,950				$	306,764			$	298,629
Cost of sales				137,287				147,803					285,607				282,322
Gross profit				13,638				9,147					21,157				16,307
Selling, general and administrative expense				8,894				7,225					16,809				13,590
Depreciation and amortization expense				187				117					312				213
Foreign currency transaction loss				282				568					933				121
Acquisition-related costs				—				—					370				—
Total operating expenses				9,363				7,910					18,424				13,924
Operating income				4,275				1,237					2,733				2,383
Interest income				(7	)			(11	)				(15	)			(27	)
Interest expense				395				263					699				495
Gain on acquisition				—				—					(998	)			—
Income before income taxes				3,887				985					3,047				1,915
Income tax expense				121				101					111				293
Net income			$	3,766			$	884				$	2,936			$	1,622
Basic income per common share:			$	.79			$	.19				$	.61			$	.35
Diluted income per common share:			$	.78			$	.18				$	.60			$	.32
Weighted average number of common shares outstanding:
Basic				4,779,000				4,583,000					4,815,000				4,629,000
Diluted				4,826,000				5,038,000					4,884,000				5,056,000

SED INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
				Six Months Ended December 31,
					2011						2010
Operating activities:
Net income				$	2,936					$	1,622
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization					312						213
Deferred tax assets					(130	)					(49	)
Stock compensation					229						165
Gain from acquisition					(998	)					—
Provision for losses on trade accounts receivable					221						550
Changes in operating assets and liabilities, net of assets acquired:
Trade accounts receivable					4,617						(6,829	)
Inventories					11,543						(7,022	)
Other current assets					(2,896	)					(2,553	)
Trade accounts payable					(5,057	)					1,815
Accrued and other current liabilities					1,444						(1579	)
Net cash provided by (used in) operating activities					12,221						(13,667	)
Investing activities:
Purchases of equipment					(1,721	)					(698	)
Cash used in acquisition					(4,376	)					—
Net cash used in investing activities					(6,097	)					(698	)
Financing activities:
Net (repayments) borrowings under revolving credit facilities					(3,142	)					12,200
Purchases of company common stock					(97	)					(410	)
Net cash (used in) provided by financing activities					(3,239	)					11,790
Effect of exchange rate changes on cash and cash equivalents					(175	)					(101	)
Net increase (decrease) in cash and cash equivalents					2,710						(2,676	)
Cash and cash equivalents: Beginning of period					4,751						7,445
End of period				$	7,461					$	4,769

SED INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1) (Unaudited)
(In thousands)
			Three Months Ended								Six Months Ended
			December 31,								December 31,
			2011				2010				2011				2010
Reconciliation of GAAP net income to Non-GAAP adjusted EBITDA is as follows:
GAAP net income			$	3,766			$	884			$	2,936			$	1,622
Depreciation and amortization				187				117				312				213
Stock awards amortization (2)				114				60				229				165
Interest income				(7	)			(11	)			(15	)			(27	)
Interest expense				395				263				699				495
Income tax expense				121				101				111				293
Gain on acquisition (3)				–				–				(998	)			–
Non-GAAP adjusted EBITDA			$	4,576			$	1,414			$	3,274			$	2,761

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered as a substitute for comparable GAAP measures and should be read only in conjunction with our financial statements prepared in accordance with GAAP and our press release, which explains our use of non-GAAP measures.

(2) Stock award amortization related to non-cash charges for stock awards.

(3) Gain on the acquisition of the Lehrhoff assets recorded as a bargain purchase under ASC 805.

Hayden IRInvestor Relations ContactPeter Seltzberg, 646-415-8972peter@haydenir.com

Source: SED International Holdings, Inc.

Fitch Removes Ralcorp from Watch Negative & Affirms 'BBB-/F3' Ratings; Outlook Stable Feb 9, 2012 04:12PM

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has removed Ralcorp Holdings, Inc.'s (Ralcorp) ratings from Rating Watch Negative following the completion of the tax-free spinoff of Post Foods (Post) on Feb. 3, 2012 and the associated debt reduction. Concurrently, Fitch has affirmed Ralcorp's ratings as follows:

Ralcorp Holdings, Inc.

--Long-term Issuer Default Rating (IDR) at 'BBB-';

--Senior unsecured notes at 'BBB-';

--Bank credit facility at 'BBB-';

--Short-term IDR at 'F3'.

The Rating Outlook is Stable.

In connection with the Post spinoff transaction, Ralcorp received $900 million in cash and Fitch estimates that Ralcorp utilized approximately $800 million of these proceeds for the reduction of prepayable debt. Immediately following this debt reduction, Ralcorp's total debt was $1.96 billion and the company currently has no other prepayable debt at par. Ralcorp plans to liquidate its approximately 20% retained interest in Post, valued at roughly $180 million, over the next 12 months and utilize the proceeds for share repurchases or debt reduction.

Ralcorp has historically grown through acquisitions and continues to pursue private-brand acquisitions and share repurchases under its remaining five million share authorization. Fitch factors into the ratings that Ralcorp will be conservative with these strategies while leverage remains at or above the high end of the company's stated long term leverage (total debt to EBITDA) range of 2.5 to 3.0 times (x). Ralcorp's commitment to maintain leverage in that range provides support for the ratings to remain at the current level.

For the fiscal year ended Sept. 30, 2011, Ralcorp's consolidated total debt to operating EBITDA was 3.1x, FFO adjusted leverage was 3.8x and EBITDA to gross interest expense was 5.8x. Fitch estimates that Ralcorp's leverage will be near 3.0x for fiscal 2012 and trend lower as earnings grow. A negative rating action could occur if Ralcorp aggressively pursues acquisitions and share repurchases and/or if operating fundamentals deteriorate substantially so that leverage would be sustained in the mid-3x range or above for an extended period. A positive rating action is not anticipated in the near-to intermediate term.

Ralcorp generated base business sales growth of 9% for the quarter ended Dec. 31, 2011, primarily reflecting considerably higher pricing that the company implemented to partially offset heightened commodity costs. Despite the higher price levels, base business volume, excluding branded cereal, held up fairly well with flat volume for the latest quarter versus the year ago period. Ralcorp is currently facing significant raw material and freight cost headwinds, which the company estimates at 10-12% higher 'cost of good sold' in fiscal 2012 versus the prior year. This increase is on top of a 6% rise in fiscal 2011. Although Ralcorp plans to reduce costs and increase pricing selectively, margin pressure will be particularly pronounced in the first half of the fiscal year with some easing currently anticipated in the back half.

For the fiscal year ended Sept. 30, 2011, the stand-alone Ralcorp private label business generated approximately $3.8 billion sales, $520 million EBITDA (13.7% margin) and FCF of $240 million (6.2% margin). The $545 million acquisition of a private brand refrigerated dough business that closed Oct. 3, 2011 is expected to add more than $300 million of sales. FCF is expected to remain strong in fiscal 2012 but will be impacted by higher capital expenditures, in the range of $190 million to $210 million in total, driven by capital expenditures associated with the company's accelerated cost reduction (ACR) initiatives.

Ralcorp is the leading producer of private brand food products in the United States and a foodservice provider. The company maintains leading market share positions and scale across a broad variety of private label categories but lost the diversification and cash flow provided by the higher margin Post branded cereal business. Ralcorp will have lower EBITDA margins than the pre-spinoff average (including Post) of 16.4% generated in fiscal 2011. The company does not pay a dividend, and Fitch does not expect it to change this stance in the near term.

Ralcorp maintains adequate liquidity after the spinoff of Post, including approximately $130 million to $140 million cash and an undrawn $300 million revolver expiring July 27, 2015. The company also has full availability under its $110 million receivables securitization facility. Upcoming debt maturities are modest, with $10.7 million due in fiscal 2012 and $85.7 million due in fiscal 2013, which will make leverage reduction primarily dependent on earnings growth.

Ralcorp's $300 million notes due in 2020 and $450 million notes due in 2039 do not contain financial covenants, but do contain a change-of-control triggering event in conjunction with downgrades below investment grade. Its other notes contain a financial covenant that total debt-to-adjusted EBITDA may exceed 3.5x for four consecutive quarters but not be greater than 3.75x. Ralcorp's credit facilities contain financial covenants of minimum EBIT to consolidated interest expense of 3.0x and maximum total debt-to-EBITDA of 3.75x. Ralcorp is expected to remain in compliance with its debt covenants.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Corporate Rating Methodology' (Aug. 12, 2011).

Applicable Criteria and Related Research:

Corporate Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=647229

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Fitch RatingsPrimary AnalystJudi M. Rossetti, CFA/CPA, +1-312-368-2077Senior DirectorFitch, Inc.70 W. Madison StreetChicago, IL 60602orSecondary AnalystCarla Norfleet Taylor, CFA, +1-312-368-3195DirectororCommittee ChairpersonWesley E. Moultrie II, CPA, +1-312-368-3186Managing DirectororMedia Relations:Brian Bertsch, +1-212-908-0549Email: brian.bertsch@fitchratings.com

Source: Fitch Ratings

EV Energy Partners Announces Public Offering of Common Units Feb 9, 2012 04:11PM

HOUSTON, TX -- (MARKET WIRE) -- 02/09/12 -- EV Energy Partners, L.P. (NASDAQ: EVEP) (the "Partnership") today announced that it has commenced an underwritten public offering of 3,200,000 of its common units representing limited partner interests. The Partnership also intends to grant the underwriters a 30-day option to purchase up to 480,000 additional common units to cover over-allotments, if any.

The Partnership intends to use the net proceeds from the offering, including the proceeds from any exercise of the over-allotment option of common units, to repay indebtedness under its existing revolving credit facility.

Wells Fargo Securities, Citigroup, Raymond James, RBC Capital Markets, BofA Merrill Lynch, Credit Suisse and J.P. Morgan will act as joint book-running managers of the underwritten offering. This offering of common units will be made only by means of a preliminary prospectus supplement and the accompanying base prospectus, copies of which may be obtained from:

Wells Fargo Securities Attn: Equity Syndicate Dept. 375 Park Avenue New York, New York 10152 Email: cmclientsupport@wellsfargo.com Telephone: (800) 326-5897

Citigroup Attn: Prospectus Department Brooklyn Army Terminal 140 58th Street, 8th Floor Brooklyn, New York 11220 Email: batprospectusdept@citi.com Telephone: (800) 831-9146

Raymond James Attn: Equity Syndicate 880 Carillon Parkway St. Petersburg, Florida 33716 Telephone: (800) 248-8863

RBC Capital Markets Attn: Equity Syndicate Three World Financial Center 200 Vesey Street, 8th Floor New York, New York 10281 Telephone: (877) 822-4089

BofA Merrill Lynch Attn: Prospectus Department 4 World Financial Center New York, NY 10080 Email: dq.prospectus_requests@baml.com

Credit Suisse One Madison Avenue New York, New York 10010 Attn: Prospectus Department Telephone: (800) 221-1037

J.P. Morgan c/o Broadridge Financial Solutions 1155 Long Island Avenue Edgewood, New York 11717 Telephone: (866) 803-9204

An electronic copy of the preliminary prospectus supplement and accompanying base prospectus may also be obtained at no charge at the Securities and Exchange Commission's website at www.sec.gov.

EV Energy Partners, L.P., is a master limited partnership engaged in acquiring, producing and developing oil and gas properties.

(code #: EVEP/G)

The common units are being offered pursuant to an effective registration statement that the Partnership previously filed with the Securities and Exchange Commission. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the common units or any other securities, nor shall there be any sale of the common units or any other securities in any state or jurisdiction in which such offer, sale or solicitation would be unlawful prior to registration or qualification under the securities law in such state or jurisdiction.

This press release includes forward-looking statements. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements, including statements regarding closing of the offering and the use of proceeds of the offering. These statements reflect the Partnership's expectations or forecasts based on assumptions made by the Partnership. These statements are subject to risks including those relating to market conditions, financial performance and results, prices and demand for natural gas and oil and other important factors that could cause actual results to differ materially from our forward-looking statements. The risks are further described in the Partnership's reports filed with the Securities and Exchange Commission.

Any forward-looking statement speaks only as of the date on which such statement is made and the Partnership undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

EV Energy Partners, L.P., Houston
Michael E. Mercer
713-651-1144

Source: EV Energy Partners, L.P.

DCT Industrial Trust Inc.® Reports Fourth Quarter and 2011 Full-Year Results Feb 9, 2012 04:11PM

Overall Occupancy Increased to 90.5 Percent

Leased 3.9 Million Square Feet in Q4; 14.9 Million in 2011, Up 35 Percent from 2010

Same-Store Net Operating Income Growth Positive; Same-Store Occupancy Increased to 90.9 Percent

Funds from Operations, as adjusted, of $0.11 per share in Q4 and $0.40 per share in 2011

DENVER--(BUSINESS WIRE)-- DCT Industrial Trust Inc.® (NYSE: DCT), a leading industrial real estate company, today announced financial results for the three months and year ending December 31, 2011.

“We had a great fourth quarter and are excited for 2012 as we anticipate increased opportunity for DCT to execute on its strategic plan,” said Phil Hawkins, President and Chief Executive Officer of DCT Industrial.

Funds from Operations (“FFO”), as adjusted, attributable to common stockholders and unitholders for the fourth quarter of 2011 totaled $30.0 million, or $0.11 per diluted share, compared with $23.9 million, or $0.10 per diluted share, for the fourth quarter of 2010. These results exclude $0.5 million of acquisition costs for the quarter ending 2011 and $4.7 million of acquisition costs and impairment losses on non-depreciable real estate for the quarter ending 2010. Funds from Operations for the fourth quarter also includes $0.7 million of previously deferred gains resulting from the sale of an unconsolidated asset.

For the year ending December 31, 2011, FFO, as adjusted, attributable to common stockholders and unitholders totaled $106.7 million, or $0.40 per diluted share, compared with $93.0 million, or $0.39 per diluted share, for the year ending December 31, 2010. These results exclude $1.9 million of acquisition costs for the year ending 2011 and $6.4 million of acquisition costs, impairment losses on non-depreciable real estate and debt modification costs for the year ending 2010.

Net loss attributable to common stockholders for the fourth quarter of 2011 was $0.2 million, or $0.00 per diluted share, compared with a net loss of $11.2 million, or $0.05 per diluted share, reported for the fourth quarter of 2010. Net loss attributable to common stockholders for the year ending December 31, 2011 was $25.3 million, or $0.11 per diluted share, compared with a net loss of $37.8 million, or $0.18 per diluted share, for the year ending December 31, 2010.

Property Results and Leasing Activity

“Activity remained strong in the fourth quarter with our market teams leasing 3.9 million square feet, bringing occupancy to 90.5 percent,” said Phil Hawkins. “We signed 14.9 million square feet of leases in 2011, an increase of over 35 percent from the 11.0 million square feet in 2010. Market fundamentals continue to improve with positive absorption and muted new supply driving vacancy down to its lowest point in eleven quarters.”

As of December 31, 2011, DCT Industrial owned 409 consolidated properties, totaling 58.3 million square feet with occupancy of 90.5 percent, up from 89.9 percent as of September 30, 2011 and up 310 basis-points from December 31, 2010.

Net operating income (“NOI”) was $47.5 million in the fourth quarter of 2011, compared with $41.3 million reported for the fourth quarter of 2010. Fourth quarter 2011 same-store NOI, excluding revenue from lease terminations, increased 0.7 percent on a GAAP basis and increased 0.7 percent on a cash basis, when compared to the same period last year. Occupancy of same-store properties averaged 90.3 percent in the fourth quarter of 2011, an increase of 230 basis-points compared with an average of 88.0 percent in the fourth quarter of 2010. Occupancy of same-store properties ended at 90.9 percent as of December 31, 2011.

The Company signed leases totaling 3.9 million square feet in the fourth quarter of 2011. For the year ending December 31, 2011, DCT Industrial signed leases totaling 14.9 million square feet compared with 11.0 million square feet during the year ending December 31, 2010. As of December 31, 2011, 0.5 million square feet, or 0.9 percent of DCT Industrial’s total consolidated portfolio, was leased but not occupied.

In the fourth quarter of 2011, rental rates on signed leases increased 3.8 percent on a GAAP basis and decreased 8.1 percent on a cash basis compared to prior leases. For the full year of 2011, rental rates on signed leases declined 0.9 percent on a GAAP basis and 8.3 percent on a cash basis. The Company’s tenant retention rate was 75.7 percent in the fourth quarter of 2011 and 74.1 percent for the year ending December 31, 2011.

Investment Activity

“DCT Industrial had an excellent finish to 2011 as we continued to add well-located, high-quality distribution assets to our portfolio,” said Hawkins. “In 2011 the Company acquired 27 buildings, totaling 3.1 million square feet for $187.1 million. In addition, we sold non-strategic assets totaling 4.0 million square feet for a total sales price of $122.1 million. Construction commenced on development projects in the Washington D.C. area and Houston with two additional projects in Miami and the Inland Empire scheduled to break ground in mid-2012.”

Acquisitions

During the fourth quarter, DCT Industrial acquired buildings in Chicago, Houston, Northern California and Seattle. These four properties, totaling 552,000 square feet, were acquired for $53.6 million. The buildings are expected to generate an average year-one cash yield of 6.9 percent.

The table below represents a summary of the fourth quarter acquisitions:

Market		Submarket		Square Feet		Occupancy		Closed
Seattle, WA		Renton		121,000		100.0%		Oct-11
Northern California		Airport		255,000		100.0%		Nov-11
Houston, TX		Northwest		69,000		100.0%		Dec-11
Chicago, IL		O’Hare		107,000		100.0%		Dec-11
Total / Weighted Average				552,000		100.0%

For the year ending December 31, 2011, DCT Industrial acquired 27 buildings, totaling 3.1 million square feet, for $187.1 million, excluding the $9.8 million share owned by noncontrolling interests. The buildings are expected to generate an average year-one cash yield of 6.4 percent and an average 7.6 percent cash yield once stabilized.

Dispositions

During the fourth quarter of 2011, DCT Industrial completed dispositions in Charlotte, Cincinnati, Kansas City, Minneapolis, Nashville and San Antonio. In total, the Company sold 18 properties comprising of 3.5 million square feet, for gross proceeds (net of joint venture partners’ interests) of $110.6 million1 with a projected year-one cash yield of 5.8 percent. The Company sold all of its assets in Kansas City, all of its consolidated assets in Minneapolis and all but one 80,000 square foot building in Charlotte. For the year ending December 31, 2011, DCT Industrial completed sales of 4.0 million square feet for gross proceeds (net of joint venture partners’ interests) of $122.1 million1 with a projected year-one cash yield of 5.2 percent.

The table below represents a summary of the fourth quarter dispositions:

Market		Square Feet		Occupancy		Closed
Cincinnati, OH2		604,000		100.0%		Oct-11
Minneapolis, MN (3 buildings)		356,000		100.0%		Nov-11
Kansas City, KS3(2 buildings)		405,000		100.0%		Nov-11
Nashville, TN		988,000		100.0%		Dec-11
Charlotte, NC (9 buildings)		925,000		74.0%		Dec-11
San Antonio, TX (2 buildings)		172,000		77.0%		Dec-11
Total / Weighted Average		3,450,000		91.9%

Development

DCT acquired a 13.0 acre land parcel in the North submarket of Houston, named DCT Airtex Industrial Center. The Company plans to build a 267,000 square foot cross-dock building on the site which offers direct access and frontage to Interstate 45, Houston’s major North/South non-toll logistics route.

Strong Balance Sheet

The Company’s fixed charge coverage for the fourth quarter and full year of 2011 was 2.6 times and net debt to fourth quarter adjusted EBITDA was 6.7 times as of December 31, 2011.

As a result of several financing transactions executed in 2011, the Company’s average debt maturity has been extended to 5.2 years at December 31, 2011 compared to 3.8 years as of December 31, 2010.

Dividend

DCT Industrial’s Board of Directors has declared a $0.07 per share quarterly cash dividend, payable on April 18, 2012 to stockholders of record as of April 6, 2012.

Guidance

The Company reiterated guidance for 2012 FFO, as adjusted, of $0.36 to $0.41 per diluted share. Additionally, net loss attributable to common stockholders and unitholders is expected to be between $(0.12) and $(0.07) per diluted share.

The Company’s guidance excludes real estate gains and losses and acquisition costs.

Footnotes

1 Includes DCT Industrial’s proportionate share of gross proceeds for properties sold by unconsolidated joint ventures.

2 Unconsolidated property

3 Includes one 225,000 square foot consolidated property and one 180,000 square foot unconsolidated property.

Conference Call Information

DCT Industrial will host a conference call to discuss fourth quarter 2011 and full-year results and its recent business activities on Friday, February 10, 2012 at 11:00 a.m. Eastern Time. Stockholders and interested parties may listen to a live broadcast of the conference call by dialing (877) 317-6789 or (412) 317-6789. A telephone replay will be available until 9 a.m. Eastern Time, Monday, February 27, 2012 and can be accessed by dialing (877) 344-7529 or (412) 317-0088 and entering the passcode 10008830. A live webcast of the conference call will be available in the Investors section of the DCT Industrial website at www.dctindustrial.com. A webcast replay will also be available shortly following the call until February 10, 2013.

Supplemental information is available in the Investors section of the Company’s website at www.dctindustrial.com or by e-mail request at investorrelations@dctindustrial.com. Interested parties may also obtain supplemental information from the SEC’s website at www.sec.gov.

About DCT Industrial Trust Inc.®

DCT Industrial Trust Inc. is a leading industrial real estate company that owns, operates and develops high-quality bulk distribution and light industrial properties in high-volume distribution markets in the U.S. and Mexico. As of December 31, 2011, the Company owned interests in, managed or had under development approximately 75.5 million square feet of properties leased to approximately 900 customers, including 13.3 million square feet managed on behalf of three institutional joint venture partners. Additional information is available at www.dctindustrial.com.

DCT INDUSTRIAL TRUST INC. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands, except share information)
		December 31,2011				December 31,2010
ASSETS:			(unaudited)
Land		$	647,552			$	567,152
Building and improvements			2,393,346				2,343,835
Intangible lease assets			84,779				93,497
Construction in progress			35,386				32,952
Total investment in properties			3,161,063				3,037,436
Less accumulated depreciation and amortization			(589,314	)			(528,705	)
Net investment in properties			2,571,749				2,508,731
Investments in and advances to unconsolidated joint ventures			139,278				138,455
Net investment in real estate			2,711,027				2,647,186
Cash and cash equivalents			12,834				17,330
Notes receivable			1,053				1,222
Deferred loan costs, net			8,567				5,883
Straight-line rent and other receivables, net of allowance for doubtful accounts of $1,256 and $2,088, respectively			42,349				33,278
Other assets, net			17,468				14,990
Total assets		$	2,793,298			$	2,719,889
LIABILITIES AND EQUITY:
Liabilities:
Accounts payable and accrued expenses		$	45,785			$	38,354
Distributions payable			19,057				17,458
Tenant prepaids and security deposits			22,864				20,759
Other liabilities			29,797				12,373
Intangible lease liability, net			18,897				18,748
Line of credit			—				51,000
Senior unsecured notes			935,000				735,000
Mortgage notes			317,783				425,359
Total liabilities			1,389,183				1,319,051
Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none outstanding			—				—
Shares-in-trust, $0.01 par value, 100,000,000 shares authorized, none outstanding			—				—
Common stock, $0.01 par value, 350,000,000 shares authorized 245,943,100 and 222,946,676 shares issued and outstanding as of December 31, 2011 and December 31, 2010, respectively			2,459				2,229
Additional paid-in capital			2,018,075				1,898,289
Distributions in excess of earnings			(783,229	)			(689,127	)
Accumulated other comprehensive loss			(29,336	)			(15,289	)
Total stockholders’ equity			1,207,969				1,196,102
Noncontrolling interests			196,146				204,736
Total equity			1,404,115				1,400,838
Total liabilities and equity		$	2,793,298			$	2,719,889

DCT INDUSTRIAL TRUST INC. AND SUBSIDIARIES Consolidated Statements of Operations (amounts in thousands, except per share information)
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2011				2010				2011				2010
REVENUES:		(unaudited)								(unaudited)
Rental revenues		$	64,995			$	56,780			$	249,158			$	225,699
Institutional capital management and other fees			1,138				1,082				4,291				4,133
Total revenues			66,133				57,862				253,449				229,832
OPERATING EXPENSES:
Rental expenses			8,702				7,862				34,217				32,389
Real estate taxes			8,808				7,655				36,200				34,915
Real estate related depreciation and amortization			31,106				28,186				124,244				110,373
General and administrative			5,459				6,734				25,925				25,262
Impairment losses			448				4,100				448				8,656
Casualty gains			(33	)			—				(33	)			—
Total operating expenses			54,490				54,537				221,001				211,595
Operating income			11,643				3,325				32,448				18,237
OTHER INCOME AND EXPENSE:
Equity in income (loss) of unconsolidated joint ventures, net			894				(786	)			(2,556	)			(2,986	)
Impairment losses on investments in unconsolidated joint ventures			(19	)			(216	)			(1,953	)			(216	)
Loss on business combinations			—				—				—				(395	)
Interest expense			(17,104	)			(15,333	)			(63,941	)			(56,548	)
Interest and other income (expense)			(53	)			245				(310	)			357
Income tax benefit (expense) and other taxes			(38	)			137				(144	)			(918	)
Loss from continuing operations			(4,677	)			(12,628	)			(36,456	)			(42,469	)
Income (loss) from discontinued operations			4,307				(265	)			7,613				(597	)
Loss before gain on dispositions of real estate interests			(370	)			(12,893	)			(28,843	)			(43,066	)
Gain on dispositions of real estate interests			—				—				—				13
Consolidated net loss of DCT Industrial Trust Inc.			(370	)			(12,893	)			(28,843	)			(43,053	)
Net loss attributable to noncontrolling interests			207				1,698				3,593				5,223
Net loss attributable to common stockholders			(163	)			(11,195	)			(25,250	)			(37,830	)
Distributed and undistributed earnings allocated to participating securities			(93	)			(117	)			(443	)			(480	)
Adjusted net loss attributable to common stockholders		$	(256	)		$	(11,312	)		$	(25,693	)		$	(38,310	)
EARNINGS PER COMMON SHARE – BASIC AND DILUTED:
Loss from continuing operations		$	(0.02	)		$	(0.05	)		$	(0.14	)		$	(0.18	)
Income (loss) from discontinued operations			0.02				(0.00	)			0.03				(0.00	)
Net loss attributable to common stockholders		$	(0.00	)		$	(0.05	)		$	(0.11	)		$	(0.18	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted			245,939				218,723				242,591				212,412

Reconciliation of Net Loss Attributable to Common Stockholders to Funds from Operations(1) (unaudited, amounts in thousands, except per share and unit data)
		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2011				2010				2011				2010
Net loss attributable to common stockholders		$	(163	)		$	(11,195	)		$	(25,250	)		$	(37,830	)
Adjustments:
Real estate related depreciation and amortization			32,149				29,386				128,989				115,904
Equity in (income) loss of unconsolidated joint ventures, net			(894	)			786				2,556				2,986
Equity in FFO of unconsolidated joint ventures			2,613				921				4,732				4,001
Loss on business combinations			—				—				—				395
Impairment losses on depreciable real estate(1)			8,226				599				10,160				8,012
Gain on dispositions of real estate interests			(12,030	)			—				(12,030	)			(2,091	)
Gain on dispositions of non-depreciable real estate			—				—				—				13
Noncontrolling interest in the operating partnership's share of the above adjustments			(3,399	)			(3,283	)			(14,252	)			(13,426	)
FFO attributable to unitholders			2,965				1,941				9,901				8,678
FFO attributable to common stockholders and unitholders, basic and diluted			29,467				19,155				104,806				86,642
Adjustments:
Acquisition costs(2)			493				706				1,902				1,228
Debt modification costs			—				—				—				1,136
Impairment losses on non-depreciable real estate (2)			—				3,992				—				3,992
FFO, as adjusted, attributable to common stockholders and unitholders, basic and diluted		$	29,960			$	23,853			$	106,708			$	92,998
FFO per common share and unit, basic and diluted		$	0.11			$	0.08			$	0.39			$	0.36
FFO, as adjusted, per common share and unit, basic and diluted		$	0.11			$	0.10			$	0.40			$	0.39
FFO weighted average common shares and units outstanding:
Common shares for earnings per share – basic			245,939				218,723				242,591				212,412
Participating securities			1,368				1,722				1,601				1,689
Units			25,626				25,721				25,310				26,351
FFO weighted average common shares, participating securities and units outstanding - basic			272,933				246,166				269,502				240,452
Dilutive common stock equivalents			431				401				449				357
FFO weighted average common shares, participating securities and units outstanding - diluted			273,364				246,567				269,951				240,809

	(1)		Funds from operations, FFO, as defined by the National Association of Real Estate Investment Trusts (NAREIT). NAREIT recently reiterated that under NAREIT’s definition of FFO, impairment write-downs of depreciable real estate should be excluded in calculating NAREIT FFO. In addition, impairments of in substance real estate investments in investees that are driven by measureable decreases in the fair value of the depreciable real estate held by the unconsolidated joint ventures should be excluded in determining NAREIT FFO. Historically, the Company added back impairments of depreciable real estate to NAREIT FFO in order to arrive at the Company’s FFO, as adjusted.
	(2)		Excluding amounts attributable to noncontrolling interests.

Guidance(1)
The Company is providing the following guidance:
		Range for the Full-Year 2012
Guidance:		Low				High
Earnings per common share - diluted		$	(0.12	)		$	(0.07	)
Impairments and acquisition cost			0.01				0.01
Real estate related depreciation and amortization net of noncontrolling interests (2)			0.47				0.47
FFO, as adjusted, per common share and unit-diluted		$	0.36			$	0.41
(1) The Company’s guidance excludes real estate gains and losses, impairments, debt modification costs, and acquisition costs.
(2) Includes pro rata share of real estate depreciation and amortization from unconsolidated joint ventures.

The following table shows the calculation of our Fixed Charge Coverage for the three and twelve months endedDecember 31, 2011 and 2010 (in thousands):
		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
CALCULATION OF ADJUSTED EBITDA		2011				2010				2011				2010
Net loss attributable to common stockholders		$	(163	)		$	(11,195	)		$	(25,250	)		$	(37,830	)
Interest expense(1)			17,347				15,446				64,254				56,998
Proportionate share of interest expense from unconsolidated joint ventures			722				973				3,077				3,230
Real estate related depreciation and amortization(1)			32,149				29,386				128,989				115,904
Proportionate share of real estate related depreciation and amortization from unconsolidated joint ventures			1,390				1,470				6,177				5,901
Income tax (benefit) expense and other taxes(1)			38				(131	)			144				937
Stock-based compensation amortization			831				1,246				4,587				4,828
Noncontrolling interests(1)			(207	)			(1,698	)			(3,593	)			(5,223	)
Loss on business combinations			—				—				—				395
Non-FFO gains on dispositions of real estate interests			(12,030	)			—				(12,030	)			(2,079	)
Impairment losses (1)(2)			8,226				4,916				10,160				12,329
Adjusted EBITDA		$	48,303			$	40,413			$	176,515			$	155,390
CALCULATION OF FIXED CHARGES
Interest expense (1)		$	17,347			$	15,446			$	64,254			$	56,998
Capitalized interest			537				359				2,670				2,162
Amortization of loan costs and debt premium/discount			(277	)			(252	)			(1,015	)			(1,240	)
Proportionate share of interest expense from unconsolidated joint ventures			722				973				3,077				3,230
Total fixed charges		$	18,329			$	16,526			$	68,986			$	61,150
Fixed charge coverage			2.6				2.4				2.6				2.5
CALCULATION OF NET DEBT:		December 31,2011								December 31,2010
Consolidated senior unsecured notes, mortgage notes and senior unsecured line of credit		$1,252,783								$1,211,359
Less consolidated cash and cash equivalents		(12,834						)		(17,330						)
Less mortgage premiums, net		(2,591						)		(3,550						)
Pro-rata share of unconsolidated debt		61,706								62,312
Pro-rata share of unconsolidated cash		(1,573						)		(1,202						)
Net debt		$1,297,491								$1,251,589

				(1)		Includes amounts related to discontinued operations.
				(2)		Includes impairment losses on investments in unconsolidated joint ventures.

The following table is a reconciliation of our net operating income to our reported “Loss from continuing operations” for thethree and twelve months ended December 31, 2011 and 2010 (in thousands):
		Consolidated Operating Data
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2011				2010				2011				2010
Loss from continuing operations		$	(4,677	)		$	(12,628	)		$	(36,456	)		$	(42,469	)
Income tax (benefit) expense and other taxes			38				(137	)			144				918
Interest and other (income) expense			53				(245	)			310				(357	)
Interest expense			17,104				15,333				63,941				56,548
Equity in (income) loss of unconsolidated joint ventures, net			(894	)			786				2,556				2,986
General and administrative			5,459				6,734				25,925				25,262
Real estate related depreciation and amortization			31,106				28,186				124,244				110,373
Loss on business combinations			—				—				—				395
Impairment losses			448				4,100				448				8,656
Impairment losses on investments in unconsolidated joint ventures			19				216				1,953				216
Casualty gains			(33	)			—				(33	)			—
Institutional capital management and other fees			(1,138	)			(1,082	)			(4,291	)			(4,133	)
Total net operating income			47,485				41,263				178,741				158,395
Less net operating income- non-same store properties			(6,095	)			(251	)			(24,019	)			(3,546	)
Same store GAAP net operating income			41,390				41,012				154,722				154,849
Less revenue from lease terminations			(179	)			(96	)			(616	)			(426	)
Same store net operating income, excluding revenue from lease terminations			41,211				40,916				154,106				154,423
Less straight-line rents, net of related bad debt expense			(1,460	)			(1,610	)			(5,092	)			(4,291	)
Add back amortization of above/(below) market rents			(168	)			(17	)			(467	)			85
Same store cash net operating income, excluding revenue from lease terminations		$	39,583			$	39,289			$	148,547			$	150,217

Financial Measures

Net operating income (“NOI”) is defined as rental revenues, including expense reimbursements, less rental expenses and real estate taxes, which excludes depreciation, amortization, impairment, general and administrative expenses and interest expense. We consider NOI to be an appropriate supplemental performance measure because it reflects the operating performance of our properties and excludes certain items that are not considered to be controllable in connection with the management of the property such as depreciation, amortization, impairment, general and administrative expenses, interest income, and interest expense. Additionally, lease termination revenue is excluded as it is not considered to be indicative of recurring operating income. However those measures should not be viewed as alternative measures of our financial performance since they exclude expenses which could materially impact our results of operations. Further, our NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI, same store NOI (excluding revenue from lease terminations), and cash basis same store NOI (excluding revenue from lease terminations). Therefore, we believe net income (loss) attributable to common stockholders, as defined by GAAP, to be the most appropriate measure to evaluate our overall financial performance.

DCT Industrial believes that net income attributable to common stockholders, as defined by GAAP, is the most appropriate earnings measure. However, DCT Industrial considers funds from operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), to be a useful supplemental, non-GAAP measure of DCT Industrial’s operating performance. NAREIT developed FFO as a relative measure of performance of an equity REIT in order to recognize that the value of income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO is generally defined as net income attributable to common stockholders, calculated in accordance with GAAP, plus real estate-related depreciation and amortization, less gains from dispositions of operating real estate held for investment purposes, plus impairment losses on depreciable real estate and impairments of in substance real estate investments in investees that are driven by measureable decreases in the fair value of the depreciable real estate held by the unconsolidated joint ventures and adjustments to derive DCT Industrial’s pro rata share of FFO of unconsolidated joint ventures. We exclude gains and losses on business combinations and include the gains or losses from dispositions of properties which were acquired or developed with the intention to sell or contribute to an investment fund in our definition of FFO. Although the NAREIT definition of FFO predates the guidance for accounting for gains and losses on business combinations, we believe that excluding such gains and losses is consistent with the key objective of FFO as a performance measure. We also present FFO excluding severance, acquisition costs, debt modification costs and impairment losses on properties which are not depreciable. We believe that FFO excluding severance, acquisition costs, debt modification costs and impairment losses on non-depreciable real estate is useful supplemental information regarding our operating performance as it provides a more meaningful and consistent comparison of our operating performance and allows investors to more easily compare our operating results. Readers should note that FFO captures neither the changes in the value of DCT Industrial’s properties that result from use or market conditions, nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of DCT Industrial’s properties, all of which have real economic effect and could materially impact DCT Industrial’s results from operations. NAREIT’s definition of FFO is subject to interpretation, and modifications to the NAREIT definition of FFO are common. Accordingly, DCT Industrial’s FFO may not be comparable to other REITs’ FFO and FFO should be considered only as a supplement to net income as a measure of DCT Industrial’s performance.

DCT Industrial calculates our fixed charge coverage calculation based on adjusted EBITDA, which represents net loss attributable to DCT common stockholders before interest, taxes, depreciation, amortization, stock-based compensation expense, noncontrolling interest, impairment losses and excludes non-FFO gains and losses on disposed assets and business combinations. We use adjusted EBITDA to measure our operating performance and to provide investors relevant and useful information because it allows fixed income investors to view income from our operations on an unleveraged basis before the effects of non-cash items, such as depreciation and amortization and stock-based compensation expense, and irregular items, such as non-FFO gains or losses from the dispositions of real estate, impairment losses and gains and losses on business combinations.

Forward-Looking Statements

We make statements in this document that are considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are usually identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation: national, international, regional and local economic conditions, including, in particular, the continuing impact of the recent economic downturn and the strength of the economic recovery and the potential impact of the financial crisis in Europe; the general level of interest rates and the availability of capital; the competitive environment in which we operate; real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for tenants in such markets; decreased rental rates or increasing vacancy rates; defaults on or non-renewal of leases by tenants; acquisition and development risks, including failure of such acquisitions and development projects to perform in accordance with projections; the timing of acquisitions and dispositions; natural disasters such as fires, tornadoes, hurricanes and earthquakes; energy costs; the terms of governmental regulations that affect us and interpretations of those regulations, including the costs of compliance with those regulations, changes in real estate and zoning laws and increases in real property tax rates; financing risks, including the risk that our cash flows from operations may be insufficient to meet required payments of principal, interest and other commitments; lack of or insufficient amounts of insurance; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; the consequences of future terrorist attacks or civil unrest; environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us; and other risks and uncertainties detailed in the section of our Form 10-K filed with the SEC and updated on Form 10-Q entitled “Risk Factors.” In addition, our current and continuing qualification as a real estate investment trust, or REIT, involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, or the Code, and depends on our ability to meet the various requirements imposed by the Code through actual operating results, distribution levels and diversity of stock ownership. We assume no obligation to update publicly any forward looking statements, whether as a result of new information, future events or otherwise.

DCT Industrial Trust Inc.Melissa Sachs, 303-597-2400investorrelations@dctindustrial.com

Source: DCT Industrial Trust Inc.