SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K/A

AMENDMENT TO CURRENT REPORT

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

 

 

Date of Report (Date of earliest event reported): September 28, 2004

 

 

DIVIDEND CAPITAL TRUST INC.

(Exact name of small business issuer as specified in its charter)

 

 

Maryland

 

000-50724

 

82-0538520

(State or other jurisdiction of
incorporation or organization)

 

(Commission File No.)

 

(I.R.S. Employer
Identification No.)

 

 

518 17th Street, Suite 1700

Denver, CO 80202

(Address of principal executive offices)

 

(303) 228-2200

(Registrant’s telephone number)

 

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:

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

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

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

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

 

 



 

 

Item 2.01 Completion of Acquisition or Disposition of Assets

 

 

Purchase of the Interpark 70, Trade Pointe III (previously referred to as Hydra) and Cypress Distribution Facilities

 

We previously filed a Form 8-K on October 1, 2004 dated September 28, 2004 regarding the acquisition of one distribution facility located in Denver, Colorado ("Interpark 70") and one distribution facility located in Riverport, Kentucky ("Trade Pointe").  Additionally, we filed a Form 8-K on October 27, 2004 dated October 22, 2004 regarding the acquisition of two distribution facilities located in Central Park, Florida ("Cypress").  The aforementioned Form 8-Ks were filed without the requisite financial information.  Accordingly, we are filing this Form 8-K/A to include that financial information.  Due to the non-related party nature of this transaction, only audited statements for the year ended December 31, 2003, are required.  The Company is not aware of any material factors relating to the acquisitions that would cause the reported financial information not to be necessarily indicative of future operating results.

 

 



 

Item 9.01 Financial Statements and Exhibits.

 

(a) Financial Statements of Real Estate Property Acquired:

 

Interpark 70 Center:

 

 

 

Report of Independent Registered Public Accounting Firm

 

 

 

Statement of Revenues and Certain Expenses for the Six Months Ended June 30, 2004 (Unaudited) and the Year Ended December 31, 2003

 

 

 

Notes to Financial Statements

 

 

 

Trade Pointe III Bulk Distribution Center:

 

 

 

Report of Independent Registered Public Accounting Firm

 

 

 

Statement of Revenues and Certain Expenses for the Six Months Ended June 30, 2004 (Unaudited) and the Year Ended December 31, 2003

 

 

 

Notes to Financial Statements

 

 

 

Cypress Park East Distribution Buildings:

 

 

 

Report of Independent Registered Public Accounting Firm

 

 

 

Statement of Revenues and Certain Expenses for the Six Months Ended June 30, 2004 (Unaudited) and the Year Ended December 31, 2003

 

 

 

Notes to Financial Statements

 

 

 



 

 

(b) Unaudited Pro Forma Financial Information:

 

Pro Forma Financial Information (Unaudited)

 

 

 

Pro Forma Consolidated Balance Sheet as of June 30, 2004 (Unaudited)

 

 

 

Notes to Pro Forma Consolidated Balance Sheet (Unaudited)

 

 

 

Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2003 (Unaudited)

 

 

 

Notes to Pro Forma Consolidated Statement of Operations (Unaudited)

 

 

 

Pro Forma Consolidated Statement of Operations for the Six Months Ended June 30, 2004 (Unaudited)

 

 

 

Notes to Pro Forma Consolidated Statement of Operations (Unaudited)

 

 

(c) Exhibits:

 

None.

 

 



 

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 thereunto duly authorized.

 

 

 

 

DIVIDEND CAPITAL TRUST INC.

 

 

 

 

 

December 13, 2004

 

 

 

 

 

 

 

By:

/s/ Evan H. Zucker

 

 

 

 

Evan H. Zucker

 

 

 

 

Chief Executive Officer

 

 



 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

 

 

Board of Directors and Stockholders

Dividend Capital Trust Inc.

Denver, Colorado

 

 

We have audited the accompanying statements of revenues and certain expenses of the Interpark 70 Center (“Interpark 70”) for the year ended December 31, 2003. This financial statement is the responsibility of Interpark 70’s management. Our responsibility is to express an opinion on this financial statement based upon our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and for inclusion in the Current Report on Form 8-K of Dividend Capital Trust Inc., as described in Note 1. The presentation is not intended to be a complete presentation of Interpark 70’s revenues and expenses.

 

In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Interpark 70 Center for the year ended December 31, 2003, on the basis of accounting described in Note 1.

 

 

                /s/ Ehrhardt Keefe Steiner & Hottman PC

 

 

November 11, 2004

Denver, Colorado

 

F-1



 

DIVIDEND CAPITAL TRUST INC.

 

Interpark 70 Center

Statements of Revenues and Certain Expenses

 

 

 

 

For the Six
Months Ended
June 30,
2004

 

For the Year
Ended
December 31,
2003

 

 

 

(Unaudited)

 

 

 

Revenues

 

 

 

 

 

Rental income

 

$

330,808

 

$

799,478

 

Other revenues

 

77,786

 

201,291

 

Total revenues

 

408,594

 

1,000,769

 

Certain expenses

 

 

 

 

 

Real estate taxes

 

67,300

 

133,501

 

Operating expenses

 

33,747

 

67,310

 

Insurance

 

8,131

 

25,844

 

Management fees

 

8,089

 

12,928

 

Total certain expenses

 

117,267

 

239,583

 

Excess of revenues over certain expenses

 

$

291,327

 

$

761,186

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

F-2



 

Notes to Statements of Revenues and Certain Expenses

(Information for June 30, 2004 is Unaudited)

 

Note 1 - Description of Business and Summary of Significant Accounting Policies

The accompanying statements of revenues and certain expenses reflect the operations of the Interpark 70 Center (“Interpark 70”) for the six months ended June 30, 2004 (unaudited) and for the year ended December 31, 2003. Interpark 70 consists of one industrial building comprising approximately 160,233 rentable square feet located in Denver, Colorado. As of December 31, 2003, Interpark 70 was approximately 71% occupied and subsequently became 83% occupied through the addition of new tenants.

Interpark 70 was acquired by Dividend Capital Trust Inc. (“the Company”) from an unrelated party on September 30, 2004 for a total cost of approximately $8.9 million (which includes an acquisition fee of $86,000 paid to Dividend Capital Advisors LLC, an affiliate), which was paid using net proceeds from the Company’s public offering.

The accounting records of Interpark 70 are maintained on the accrual basis. The accompanying statements of revenues and certain expenses was prepared pursuant to Rule 3-14 of the Securities and Exchange Commission, and exclude certain expenses such as mortgage interest, depreciation and amortization, professional fees and other costs not directly related to future operations of Interpark 70.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The results of operations can be significantly impacted by the rental market of the Denver, Colorado region.

Interim Information (unaudited)

In the opinion of management, the unaudited information as of June 30, 2004 included herein contains all the adjustments necessary, which are of a normal recurring nature, to present fairly the revenue and certain expenses for the six months ended June 30, 2004. Results of interim periods are not necessarily indicative of results to be expected for the year. Management is not aware of any material factors that would cause the information included herein to not be indicative of future operating results.

Note 2 - Operating Leases

Interpark 70’s revenues are obtained from tenant rental payments as provided for under non-cancelable operating leases. Interpark 70 records rental revenue for the full term of the lease on a straight-line basis. In the case where the minimum rental payments increase over the life of the lease, Interpark 70 records a receivable due from tenants for the difference between the amount of revenue recorded and the amount of cash received. This accounting treatment resulted in a decrease in rental revenue of $6,899 and $11,256 for the six months ended June 30, 2004 and the year ended December 31, 2003, respectively.

 

 

F-3



 

Future minimum lease payments due under these leases for the next five years, excluding tenant reimbursements of operating expenses, as of December 31, 2003 are as follows:

Year Ending December 31,

 

 

 

2004

 

$

675,415

 

2005

 

667,710

 

2006

 

356,629

 

2007

 

50,226

 

2008

 

 

Thereafter

 

 

 

 

$

1,749,980

 

 

Tenant reimbursements of operating expenses are included in other revenue in the accompanying statements of revenue and certain expenses.

The following table exhibits those tenants who accounted for greater than 10% of the rental revenues for the year ended December 31, 2003, and the corresponding percentage of the future minimum revenues above:

Tenant

 

Industry

 

Lease Expiration

 

% of
2003
Revenues

 

% of
Future Minimum
Revenues

 

A

 

Manufacturer of Print Supplies

 

September 2005

 

37

%

31

%

B

 

Office Supplies Distributor

 

August 2006

 

26

%

34

%

C

 

Document Image Solutions Provider

 

November 2006

 

13

%

16

%

D

 

Developer of Workspace Products

 

October 2003

 

19

%

%

 

Certain leases above contain tenant lease renewal options for various periods under various terms that may or may not be similar to the existing leases.

 

 

F-4



 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

 

 

Board of Directors and Stockholders

Dividend Capital Trust Inc.

Denver, Colorado

 

 

We have audited the accompanying statements of revenues and certain expenses of the Trade Pointe III Bulk Distribution Center (“Trade Pointe”) for the year ended December 31, 2003. This financial statement is the responsibility of the Trade Pointe’s management. Our responsibility is to express an opinion on this financial statement based upon our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and for inclusion in the Current Report on Form 8-K of Dividend Capital Trust Inc., as described in Note 1. The presentation is not intended to be a complete presentation of Trade Pointe’s revenues and expenses.

 

In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Trade Pointe III Bulk Distribution Center for the year ended December 31, 2003, on the basis of accounting described in Note 1.

 

 

                /s/ Ehrhardt Keefe Steiner & Hottman PC

 

November 12, 2004

Denver, Colorado

 

 

F-5



 

DIVIDEND CAPITAL TRUST INC.

 

Trade Pointe III Bulk Distribution Center

Statements of Revenues and Certain Expenses

 

 

 

 

 

For the Six
Months Ended
June 30,
2004

 

For the Year
Ended
December 31,
2003

 

 

 

(Unaudited)

 

 

 

Revenues

 

 

 

 

 

Rental income

 

$

369,727

 

$

739,453

 

Other revenues

 

38,508

 

114,890

 

Total revenues

 

408,235

 

854,343

 

Certain expenses

 

 

 

 

 

Real estate taxes

 

29,701

 

60,810

 

Operating expenses

 

7,970

 

57,686

 

Insurance

 

5,409

 

11,472

 

Management fees

 

14,888

 

34,766

 

Total certain expenses

 

57,968

 

164,734

 

Excess of revenues over certain expenses

 

$

350,267

 

$

689,609

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

F-6



 

Notes to Statements of Revenues and Certain Expenses

(Information for June 30, 2004 is Unaudited)

 

 

Note 1 - Description of Business and Summary of Significant Accounting Policies

 

The accompanying statements of revenues and certain expenses reflect the operations of the Trade Pointe III Distribution Center (“Trade Pointe”) for the six months ended June 30, 2004 (unaudited) and for the year ended December 31, 2003. Trade Pointe is a “Rear Load” style bulk distribution center located in Riverport, Kentucky which is a submarket of Louisville, Kentucky. Trade Pointe is located on 13.6 acres and comprises 221,000 aggregate rentable square feet. As of December 31, 2003 and June 30, 2004, Trade Pointe was 100% occupied by one tenant.

Trade Pointe was acquired by Dividend Capital Trust Inc. ("the Company") from an unrelated party on September 28, 2004 for a total cost of approximately $8.3 million (which includes an acquisition fee of $80,000 paid to Dividend Capital Advisors LLC, an affiliate), which was paid using net proceeds from the Company's public offering.

The accounting records of Trade Pointe are maintained on the accrual basis. The accompanying statements of revenues and certain expenses was prepared pursuant to the Rule 3-14 of the Securities and Exchange Commission, and exclude certain expenses such as mortgage interest, depreciation and amortization, professional fees and other costs not directly related to future operations of Trade Pointe.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The results of operations can be significantly impacted by the rental market of the greater Louisville, Kentucky region.

 

Interim Information (unaudited)

In the opinion of management, the unaudited information as of June 30, 2004 included herein contains all the adjustments necessary, which are of a normal recurring nature, to present fairly the revenue and certain expenses for the six months ended June 30, 2004. Results of interim periods are not necessarily indicative of results to be expected for the year. Management is not aware of any material factors that would cause the information included herein to not be indicative of future operating results.

 

Note 2 - Operating Leases

Trade Pointe’s revenue is obtained from tenant rental payments as provided for under non-cancelable operating leases. Trade Pointe records rental revenue for the full term of the lease on a straight-line basis. In the case where the minimum rental payments increase over the life of the lease, Trade Pointe III records a receivable due from tenants for the difference between the amount of revenue recorded and the amount of cash received. This accounting treatment resulted in an increase in rental revenue of $10,001 and $23,923 for the periods ended June 30, 2004 and December 31, 2003, respectively.

 

 

F-7



 

Future minimum lease payments due under these leases for the next five years, excluding tenant reimbursements of operating expenses, as of December 31, 2003 are as follows:

Year Ending December 31,

 

 

 

2004

 

$

715,531

 

2005

 

715,531

 

2006

 

715,531

 

2007

 

771,351

 

2008

 

771,351

 

Thereafter

 

771,351

 

 

 

$

4,460,646

 

 

Tenant reimbursements of operating expenses are included in other revenue in the accompanying statements of revenue and certain expenses.

The following table exhibits those tenants who accounted for greater than 10% of the rental revenues for the year ended December 31, 2003, and the corresponding percentage of the future minimum revenues above:

Tenant

 

Industry

 

Lease Expiration

 

% of
2003
Revenues

 

% of
Future Minimum
Revenues

 

A

 

Warehouse and Distribution

 

December 2009

 

100

%

100

%

 

The lease above contains lease renewal options for various periods under various terms that may or may not be similar to the existing leases.

 

 

F-8



 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

 

Board of Directors and Stockholders

Dividend Capital Trust Inc.

Denver, Colorado

 

We have audited the accompanying statements of revenues and certain expenses of the Cypress Park East Distribution Buildings (“Cypress”) for the year ended December 31, 2003. This financial statement is the responsibility of the Cypress’ management. Our responsibility is to express an opinion on this financial statement based upon our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and for inclusion in the Current Report on Form 8-K of Dividend Capital Trust Inc., as described in Note 1. The presentation is not intended to be a complete presentation of Cypress’ revenues and expenses.

 

In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Cypress Park East Distribution Buildings for the year ended December 31, 2003, on the basis of accounting described in Note 1.

 

                /s/ Ehrhardt Keefe Steiner & Hottman PC

 

November 11, 2004

Denver, Colorado

 

 

F-9



 

DIVIDEND CAPITAL TRUST INC.

 

Cypress Park East Distribution Buildings

Statements of Revenues and Certain Expenses

 

 

 

 

 

For the Six
Months Ended
June 30,
2004

 

For the Year
Ended
December 31,
2003

 

 

 

(Unaudited)

 

 

 

Revenues

 

 

 

 

 

Rental income

 

$

691,641

 

$

1,305,316

 

Other revenues

 

159,419

 

403,035

 

Total revenues

 

851,060

 

1,708,351

 

 

 

 

 

 

 

Certain expenses

 

 

 

 

 

Real estate taxes

 

113,129

 

204,163

 

Operating expenses

 

67,273

 

96,603

 

Insurance

 

14,452

 

30,412

 

Management fees

 

27,727

 

57,677

 

Total certain expenses

 

222,581

 

388,855

 

 

 

 

 

 

 

Excess of revenues over certain expenses

 

$

628,479

 

$

1,319,496

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

F-10



 

Notes to Statements of Revenues and Certain Expenses

(Information for June 30, 2004 is Unaudited)

 

 

Note 1 - Description of Business and Summary of Significant Accounting Policies

 

The accompanying statements of revenues and certain expenses reflect the operations of the Cypress Park East Distribution Buildings (“Cypress”) for the six months ended June 30, 2004 (unaudited) and for the year ended December 31, 2003. Cypress consists of two buildings located in Orlando, Florida. Cypress contains approximately 367,137 aggregate rentable square feet. As of December 31, 2003, Cypress had an occupancy percentage of 94%.

Cypress was acquired by Dividend Capital Trust Inc. ("the Company") from an unrelated party on October 22, 2004 for a total cost of approximately $15.8 million (which includes an acquisition fee of $154,000 paid to Dividend Capital Advisors LLC, an affiliate), which was paid using net proceeds from the Company's public offering.

The accounting records of Cypress are maintained on the accrual basis. The accompanying statements of revenues and certain expenses was prepared pursuant to Rule 3-14 of the Securities and Exchange Commission, and exclude certain expenses such as mortgage interest, depreciation and amortization, professional fees and other costs not directly related to future operations of Cypress.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The results of operations can be significantly impacted by the rental market of the Orlando, Florida region.

Interim Information (unaudited)

In the opinion of management, the unaudited information as of June 30, 2004 included herein contains all the adjustments necessary, which are of a normal recurring nature, to present fairly the revenue and certain expenses for the six months ended June 30, 2004. Results of interim periods are not necessarily indicative of results to be expected for the year. Management is not aware of any material factors that would cause the information included herein to not be indicative of future operating results.

 

Note 2 - Operating Leases

Cypress’ revenue is obtained from tenant rental payments as provided for under non-cancelable operating leases. Cypress records rental revenue for the full term of the lease on a straight-line basis. In the case where the minimum rental payments increase over the life of the lease, Cypress records a receivable due from tenants for the difference between the amount of revenue recorded and the amount of cash received. This accounting treatment resulted in an increase (decrease) in rental revenue of $19,293 and $(2,736) for the periods ended June 30, 2004 and December 31, 2003, respectively.

 

 

F-11



 

Future minimum lease payments due under these leases for the next five years, excluding tenant reimbursements of operating expenses, as of December 31, 2003 are as follows:

Year Ending December 31,

 

 

 

2004

 

$

1,321,116

 

2005

 

780,694

 

2006

 

540,856

 

2007

 

220,898

 

2008

 

 

Thereafter

 

 

 

 

$

2,863,564

 

 

Tenant reimbursements of operating expenses are included in other revenue in the accompanying statements of revenue and certain expenses.

The following table exhibits those tenants who accounted for greater than 10% of the rental revenues for the year ended December 31, 2003, and the corresponding percentage of the future minimum revenues above:

Tenant

 

Industry

 

Lease Expiration

 

% of
2003
Revenues

 

% of
Future Minimum
Revenues

 

A

 

Packaging

 

November 2004

 

18

%

8

%

B

 

Real Estate Title Service

 

July 2006

 

21

%

34

%

C

 

Supply Chain Logistical Services

 

December 2004

 

29

%

14

%

D

 

County Government Office

 

May 2006

 

32

%

36

%

 

The lease above contains lease renewal options for various periods under various terms that may or may not be similar to the existing leases.

 

 

F-12



 

Pro Forma Financial Information

(Unaudited)

 

     The following pro forma financial statements have been prepared to provide pro forma information with regards to the Interpark 70, Trade Pointe III and Cypress facilities which Dividend Capital Trust Inc. (the “Company”) acquired from unrelated third parties during the period beginning on September 28, 2004 and ending on October 22, 2004 and for which this Form 8-K/A is being filed.

 

                The accompanying unaudited pro forma consolidated balance sheet presents the historical financial information of the Company as of June 30, 2004 as adjusted for the acquisition of the properties made subsequent to June 30, 2004 and the issuance of the Company’s common stock subsequent to June 30, 2004 as if these transactions had occurred on June 30, 2004.

 

                The accompanying unaudited pro forma consolidated statement of operations for the year ended December 31, 2003 combines the historical operations of the Company with (i) the incremental effect of properties acquired in 2003, (ii) the historical operations of properties acquired subsequent to December 31, 2003, (iii) the issuance of debt and (iv) the issuance of the Company’s common stock, as if these transactions had occurred on January 1, 2003.

 

                The accompanying unaudited pro forma consolidated statement of operations for the six months ended June 30, 2004 combines the historical operations of the Company with (i) the incremental effect of properties acquired in 2004, and (ii) the issuance of the Company’s common stock, as if these transactions had occurred on January 1, 2004.

 

                The unaudited pro forma consolidated financial statements have been prepared by the Company’s management based upon the historical financial statements of the Company and of the individually acquired properties. These pro forma statements may not be indicative of the results that actually would have occurred if the combination had been in effect on the dates indicated or which may be obtained in the future. The pro forma financial statements should be read in conjunction with the historical financial statements included in the Company’s previous filings with the Securities and Exchange Commission.

 

 

F-13



 

Pro Forma Consolidated Balance Sheet

June 30, 2004

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

DCT

 

Pro Forma

 

 

 

Pro Forma

 

 

 

Historical (1)

 

Acquisitions

 

Adjustments

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

Net Investment in Real Estate

 

$

372,152,517

 

$

32,891,680

(2)

$

 

$

405,044,197

 

Cash and cash equivalents

 

52,855,061

 

(32,860,039

)(2)

176,444,705

(3)

196,439,727

 

Other assets, net

 

8,218,143

 

 

 

8,218,143

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

433,225,721

 

$

31,641

 

$

176,444,705

 

$

609,702,067

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

Mortgage note

 

$

84,665,378

 

$

 

$

 

$

84,665,378

 

Line of credit

 

4,402,000

 

 

 

4,402,000

 

Financing obligation

 

5,934,984

 

 

 

5,934,984

 

Accounts payable and other liabilities

 

14,647,901

 

(31,641

)(2)

 

14,616,260

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

109,650,263

 

(31,641

)

 

109,618,622

 

 

 

 

 

 

 

 

 

 

 

Minority Interest

 

1,000

 

 

 

1,000

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

 

 

 

 

Common stock

 

323,574,458

 

 

176,444,705

(3)

500,019,163

 

 

 

 

 

 

 

 

 

 

 

Total Shareholders’ Equity

 

323,574,458

 

 

176,444,705

 

500,019,163

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

433,225,721

 

$

(31,641

)

$

176,444,705

 

$

609,638,785

 

 

The accompanying notes are an integral part of this pro forma consolidated financial statement.

 

 

F-14



 

Notes to Pro Forma Consolidated Balance Sheet

(Unaudited)

 

(1)                                  Reflects the historical consolidated balance sheet of the Company as of June 30, 2004. Please refer to Dividend Capital Trust Inc.’s historical consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q for the three and six months months ended June 30, 2004.

 

(2)                                  Reflects the properties that were acquired subsequent to June 30, 2004. These properties were acquired using the net proceeds from the Company’s public offerings. The total cost of these facilities, including acquisitions costs and acquisition fees paid to an affiliate, was approximately $32.9 million.

 

(3)                                  A certain amount of capital was raised through the Company’s public offerings subsequent to June 30, 2004 which was used to fund the acquisition of properties subsequent to June 30, 2004. As such, the net proceeds from the shares that were sold subsequent to June 30, 2004 through October 22, 2004, the date of the latest acquisition, are included in the accompanying pro forma balance sheet. The following table reflects the calculation used to determine the net proceeds received from the Company’s public offering:

 

 

Shares Sold Subsequent to June 30, 2004 through October 22, 2004

 

19,538,012

 

Gross Proceeds

 

$

196,049,672

 

Less Selling Costs

 

(19,604,967

)

Net Proceeds

 

$

176,444,705

 

 

 

F-15



 

Pro Forma Consolidated Statement of Operations

For the Year Ended December 31, 2003

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

DCT

 

2003

 

2004

 

Pro Forma

 

Pro Forma

 

 

 

Historical (1)

 

Acquisitions

 

Acquisitions

 

Adjustments

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

Rental revenue

 

$

2,645,093

 

$

8,194,285

(2)

$

23,355,030

(5)

$

(1,069,206

)(7) 

$

33,125,203

 

Other income

 

61,364

 

 

 

 

61,364

 

Total Income

 

2,706,457

 

8,194,285

 

23,355,030

 

1,069,206

 

33,186,567

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

366,650

 

2,159,121

(2)

5,448,276

(5)

 

7,974,047

 

Depreciation & amortization

 

1,195,330

 

4,898,414

(3)

15,818,152

(6)

 

21,911,896

 

Interest expense

 

385,424

 

1,980,625

(4)

2,247,616

(4)

 

4,613,665

 

General and administrative expenses

 

411,948

 

 

 

 

411,948

 

Total Operating Expenses

 

2,359,352

 

9,038,160

 

23,514,044

 

 

34,911,556

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

$

347,105

 

$

(843,875

)

$

(159,014

)

$

(1,069,206

)

$

(1,724,990

)

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

3,987,429

 

 

 

52,744,975

(8)

56,732,404

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

4,007,429

 

 

 

52,744,975

(8)

56,752,404

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) PER COMMON SHARE

 

$

0.09

 

 

 

 

 

 

 

$

(0.03

Basic and diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of this pro forma consolidated financial statement.

 

 

F-16



 

Notes to Pro Forma Consolidated Statement of Operations

For the Year Ended December 31, 2003

(Unaudited)

 

(1)                                  Reflects the historical consolidated statement of operations of the Company for the year ended December 31, 2003. Please refer to the Dividend Capital Trust Inc.’s historical consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.

 

(2)                                  The following table sets forth the incremental rental revenues and operating expenses of the properties acquired during 2003 for the year ended December 31, 2003 based on the historical operations of such properties for the periods prior to acquisition.

 

Property

 

Acquisition
Date

 

Rental
Revenues

 

Operating
Expenses

 

Revenues
in Excess
of
Expenses

 

 

 

 

 

 

 

 

 

 

 

Bridgestone/Firestone Distribution Center (1)

 

6/9/2003

 

$

 

$

 

$

 

Chickasaw Distribution Center

 

7/22/2003

 

802,031

 

217,995

 

584,036

 

Rancho Technology Park (1)

 

10/16/2003

 

 

 

 

Mallard Lake Distribution Center

 

10/29/2003

 

803,627

 

13,063

 

790,564

 

West by Northwest Business Center

 

10/30/2003

 

368,977

 

253,354

 

115,623

 

Park West, Pinnacle & DFW Distribution Facilities

 

12/15/2003

 

5,191,090

 

1,496,064

 

3,695,026

 

Plainfield Distribution Center

 

12/22/2003

 

1,028,560

 

178,645

 

849,915

 

Total

 

 

 

$

8,194,285

 

$

2,159,121

 

$

6,035,164

 


(1)           The Bridgestone/Firestone Distribution Center and the Rancho Technology Park were vacant prior to acquisition. As such, no rental revenues and operating expenses have been reflected in the accompanying pro forma statement of operations related to these acquisitions.

 

The properties acquired during 2003 were acquired with the net proceeds from the Company’s initial public offering, borrowings on the senior secured revolving credit facility and borrowings on mortgage indebtedness.

 

 

F-17



 

(3)                                  The following table sets forth the allocation of land and building and other costs based on the purchase price allocation for the 2003 property acquisitions. This table also reflects the estimated incremental depreciation and amortization, prior to the date of acquisition, for the 2003 property acquisitions using a 40 year life for building, a 20 year life for land improvements and the life of the related lease for tenant improvements and for other intangible assets based on the purchase price allocation in accordance with Statement of Financial Accounting Standard No. 141, Business Combinations (“SFAS No. 141”).

 

 

 

Acquisition Date

 

Land

 

Building and Other Costs

 

Total Cost

 

Incremental Depreciation and Amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

Bridgestone/Firestone Distribution Center (1)

 

6/9/2003

 

$

2,544,999

 

$

21,938,672

 

$

24,483,671

 

$

 

Chickasaw Distribution Center

 

7/22/2003

 

1,140,561

 

13,779,870

 

14,920,431

 

464,957

 

Rancho Technology Park (1)

 

10/16/2003

 

2,789,574

 

7,002,354

 

9,791,928

 

 

Mallard Lake Distribution Center

 

10/29/2003

 

2,561,328

 

8,808,242

 

11,369,570

 

274,304

 

West by Northwest Business Center

 

10/30/2003

 

1,033,352

 

7,563,574

 

8,596,926

 

356,670

 

Park West Distribution Facilities

 

12/15/2003

 

3,348,000

 

22,893,585

 

26,241,585

 

1,050,368

 

Pinnacle Industrial Center

 

12/15/2003

 

1,587,762

 

27,838,070

 

29,425,832

 

1,523,983

 

DFW Trade Center

 

12/15/2003

 

980,666

 

10,381,628

 

11,362,294

 

688,622

 

Plainfield Distribution Center

 

12/22/2003

 

1,394,147

 

14,259,728

 

15,653,875

 

539,510

 

Total 2003 Acquisitions

 

 

 

$

17,380,389

 

$

134,465,723

 

$

151,846,112

 

$

4,898,414

 


(1)           The Bridgestone/Firestone Distribution Center and the Rancho Technology Park were vacant prior to acquisition and therefore no depreciation or amortization expenses have been reflected in the accompanying pro forma statement of operations related to these acquisitions.

 

 

F-18



 

(4)                                  The following table sets forth the debt which has been assumed to have been outstanding as of January 1, 2003 and the incremental interest expense that has been included in the pro forma statement of operations.

 

Amount

 

Note

 

Interest Rate

 

Incremental
Interest
Expense

 

$

1,000,000

 

Senior secured revolving credit facility

 

Annual interest rate at LIBOR plus 1.125 to 1.500% or prime, at the election of Dividend Capital.

 

$

40,000

 

 

 

 

 

 

 

 

 

$

40,500,000

 

Secured, non-recourse debt

 

Annual interest rate equal to 5.0%.

 

$

1,940,625

 

 

 

 

 

 

 

 

 

2003 Acquisitions

 

 

 

 

 

$

1,980,625

 

 

 

 

 

 

 

 

 

$

41,758,380

 

Assumed, secured, non-recourse debt

 

Annual interest rate varying from 6.4% to 7.2%

 

$

2,865,846

 

 

 

 

 

 

 

 

 

$

2,652,349

 

Premium on assumed debt

 

 

 

$

(618,525

 

 

 

 

 

 

 

 

2004 Acquisitions

 

 

 

 

 

$

2,247,321

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

$

4,227,946

 

 

(5)                                  The following table sets forth the incremental rental revenues and operating expenses for the year ended December 31, 2003 for the properties acquired during 2004 based on their respective historical operations of such properties for the periods prior to acquisition.

 

 

 

Acquisition
Date

 

Rental
Revenues

 

Operating
Expenses

 

Revenues in
Excess of
Expenses

 

 

 

 

 

 

 

 

 

 

 

Eastgate Distribution Center III

 

3/19/2004

 

$

1,777,697

 

$

386,335

 

$

1,391,362

 

Newpoint Place I

 

3/31/2004

 

1,571,163

 

286,356

 

1,284,807

 

Northwest and Riverport Centers

 

5/03/2004

 

1,873,127

 

358,068

 

1,515,059

 

BBR Properties

 

6/03/2004

 

4,749,630

 

1,753,700

 

2,995,930

 

Parkwest / Mid-South

 

6/08/2004 /
6/29/2004

 

5,875,881

 

745,450

 

5,130,431

 

Eagles Landing / South Creek

 

6/08/2004

 

2,857,319

 

625,757

 

2,231,562

 

Memphis TradeCenter

 

6/22/2004

 

1,086,750

 

499,438

 

587,372

 

Trade Pointe

 

9/28/2004

 

854,343

 

164,734

 

689,609

 

Interpark 70

 

9/30/2004

 

1,000,769

 

239,583

 

761,186

 

Cypress

 

10/22/2004

 

1,708,351

 

388,855

 

1,319,496

 

Total

 

 

 

$

23,355,030

 

$

5,448,276

 

$

17,906,754

 

 

                                                The properties acquired in 2004 were acquired with the net proceeds raised from the Company’s public offering and with the assumption of debt.

 

 

F-19



 

(6)                                  The following table sets forth the initial allocation of land and building and other costs based on the preliminary purchase price allocation for the 2004 property acquisitions. This table also reflects the estimated incremental depreciation and amortization for the 2004 property acquisitions using a 40 year life for building a 20 year life for land improvements and the life of the related lease for tenant improvements and for other intangible assets based on the preliminary purchase price allocation in accordance with SFAS No. 141.

 

 

 

Acquisition
Date

 

Land

 

Building and
Other Costs

 

Total Cost

 

Incremental
Depreciation
and
Amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

Eastgate Distribution Center III

 

3/19/2004

 

$

1,445,321

 

$

13,351,343

 

$

14,796,664

 

$

663,169

 

Newpoint Place I

 

3/31/2004

 

2,143,152

 

12,908,143

 

15,051,295

 

628,861

 

Northwest Business Center and Riverport Commerce Center

 

5/03/2004

 

1,578,100

 

13,236,421

 

14,814,521

 

1,445,001

 

BBR Properties

 

6/03/2004

 

2,117,679

 

48,668,372

 

50,786,051

 

3,824,554

 

Parkwest / Mid-South

 

6/08/2004 / 6/29/2004

 

8,864,800

 

59,077,004

 

67,941,804

 

3,412,733

 

Eagles Landing / South Creek

 

6/08/2004

 

5,253,300

 

31,245,223

 

36,498,523

 

2,306,679

 

Memphis TradeCenter

 

6/22/2004

 

2,335,000

 

22,524,076

 

24,859,076

 

1,127,221

 

Trade Pointe III

 

9/28/2004

 

1,020,000

 

7,239,775

 

8,259,775

 

356,398

 

Interpark 70

 

9/30/2004

 

1,383,117

 

7,536,439

 

8,919,556

 

394,850

 

Cypress

 

10/22/2004

 

2,627,100

 

13,129,873

 

15,756,973

 

1,658,686

 

Total

 

 

 

$

28,767,569

 

$

228,916,669

 

$

257,684,238

 

$

15,818,152

 

 

 

(7)                                  This amount represents the pro forma adjustment for the amortization of above and below market rents pursuant to SFAS 141.

 

(8)                                  For purposes of presenting pro forma weighted average shares outstanding, it has been assumed that the number of shares outstanding (56,732,404 shares), as of the date of latest acquisition, October 22, 2004, have been outstanding since January 1, 2003.

 

 

F-20



 

Pro Forma Consolidated Statement of Operations

For the Six Months Ended June 30, 2004

 

 

 

Other

 

 

 

 

 

 

 

 

 

DCT

 

2004

 

Pro Forma

 

Pro Forma

 

 

 

Historical (1)

 

Acquisitions

 

Adjustments

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

REVENUE:

 

 

 

 

 

 

 

 

 

Rental revenue

 

$

9,088,315

 

$

10,519,657

(2)

$

(362,300

)(5)

$

19,245,672

 

Other income

 

240,676

 

 

 

240,676

 

Total Income

 

9,328,991

 

10,519,657

 

362,300

 

19,486,348

 

 

 

 

 

 

 

 

 

 

 

EXPENSES:

 

 

 

 

 

 

 

 

 

Operating expenses

 

1,913,854

 

2,171,032

(2)

 

4,084,886

 

Depreciation & amortization

 

4,410,835

 

7,995,477

(3)

 

12,319,911

 

Interest expense

 

1,544,604

 

1,129,324

(4)

 

2,674,076

 

General and administrative expenses

 

784,400

 

 

 

784,400

 

Total Operating Expenses

 

8,653,693

 

11,295,833

 

 

19,863,273

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

$

675,298

 

$

(776,176

)

$

(362,300

)

$

(376,925

)

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

23,062,383

 

 

33,670,021

(6)

56,732,404

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

23,082,383

 

 

33,670,021

(6)

56,752,404

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) PER COMMON SHARE

 

$

0.03

 

 

 

 

 

$

(0.01

)

Basic and diluted

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of this pro forma consolidated financial statement.

 

 

F-21



 

Notes to Pro Forma Consolidated Statement of Operations

For the Six Months Ended June 30, 2004

(Unaudited)

 

(1)    Reflects the historical consolidated statement of operations of the Company for the six months ended June 30, 2004. Please refer to the Dividend Capital Trust Inc.’s historical consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2004.

 

(2)    The following table sets forth the pro forma incremental rental revenues and operating expenses of the properties acquired during 2004 for the six months ended June 30, 2004 based on their respective historical operations of such properties for the period prior to acquisition.

 

 

 

Acquisition
Date

 

Rental
Revenues

 

Operating
Expenses

 

Revenues in
Excess of
Expenses

 

 

 

 

 

 

 

 

 

 

 

Eastgate Distribution Center III

 

3/19/2004

 

$

447,437

 

$

86,824

 

$

360,613

 

Newpoint Place I

 

3/31/2004

 

333,875

 

66,511

 

267,364

 

Northwest and Riverport Centers

 

5/03/2004

 

534,002

 

85,462

 

448,540

 

BBR Properties

 

6/03/2004

 

2,447,412

 

766,857

 

1,680,555

 

Parkwest / Mid-South

 

6/08/2004 /
6/29/2004

 

2,511,255

 

355,173

 

2,156,082

 

Eagles Landing / South Creek

 

6/08/2004

 

1,552,298

 

292,941

 

1,259,357

 

Memphis TradeCenter

 

6/22/2004

 

1,025,489

 

119,448

 

906,041

 

Trade Pointe III

 

9/28/2004

 

408,235

 

57,968

 

350,267

 

Interpark 70

 

9/30/2004

 

408,594

 

117,267

 

291,327

 

Cypress

 

10/22/2004

 

851,060

 

222,581

 

628,479

 

Total

 

 

 

$

10,519,657

 

$

2,171,032

 

$

8,348,625

 

 

        The properties acquired in 2004 were acquired with the net proceeds raised from the Company’s public offerings and the assumption of mortgage debt.

 

(3)    The following table sets forth the initial allocation of land and building and other costs based on the preliminary purchase price allocation for the 2004 property acquisitions. This table also reflects the estimated incremental depreciation and amortization for the 2004 property acquisitions using a 40 year life for building, a 20 year life for land improvements and the life of the related lease for tenant improvements and for other intangible assets based on the preliminary purchase price allocation in accordance with SFAS No. 141.

 

 

F-22



 

 

 

 

Acquisition
Date

 

Land

 

Building and
Other Costs

 

Total Cost

 

Incremental
Depreciation
and
Amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

Eastgate Distribution Center III

 

3/19/2004

 

$

1,445,321

 

$

13,351,343

 

$

14,796,664

 

$

165,792

 

Newpoint Place I

 

3/31/2004

 

2,143,152

 

12,908,143

 

15,051,295

 

157,215

 

Northwest Business Center and Riverport Commerce Center

 

5/03/2004

 

1,578,100

 

13,236,421

 

14,814,521

 

488,283

 

BBR Properties

 

6/03/2004

 

2,117,679

 

48,668,372

 

50,786,051

 

1,618,080

 

Parkwest / Mid-South

 

6/08/2004 /
6/29/2004

 

8,864,800

 

59,077,004

 

67,941,804

 

1,490,727

 

Eagles Landing / South Creek

 

6/08/2004

 

5,253,300

 

31,245,223

 

36,498,523

 

1,007,588

 

Memphis TradeCenter

 

6/22/2004

 

2,335,000

 

22,524,076

 

24,859,076

 

535,740

 

Trade Pointe III

 

9/28/2004

 

1,020,000

 

7,239,775

 

8,259,775

 

178,199

 

Interpark 70

 

9/30/2004

 

1,383,117

 

7,536,439

 

8,919,556

 

197,425

 

Cypress

 

10/22/2004

 

2,627,100

 

13,129,873

 

15,756,973

 

829,343

 

Total

 

 

 

$

28,767,569

 

$

228,916,669

 

$

257,684,238

 

$

6,668,392

 

 

(4)    The following table sets forth the debt which has been assumed to have been outstanding as of January 1, 2004 and the incremental interest expense that has been included in the pro forma statement of operations.

 

Amount

 

Note

 

Interest Rate

 

Incremental
Interest
Expense

 

$

41,758,380

 

Assumed, secured, non-recourse debt

 

Annual interest rate varying from 6.4% to 7.2%

 

$

1,438,586

 

$

2,652,349

 

Premium on assumed debt

 

 

 

$

(309,115

 

 

 

 

 

 

 

 

 

 

 

 

   Total

 

$

1,129,471

 

 

(5)    This amount represents the pro forma adjustment for the amortization of above and below market rents pursuant to SFAS 141.

 

(6)    For purposes of presenting pro forma weighted average shares outstanding, it has been assumed that the number of shares outstanding (56,732,404 shares) as of the latest acquisition, October 22, 2004, have been outstanding since January 1, 2003.

 

 

F-23