Revenues up 11%
Adjusted Funds from Operations per share up 40%
WASHINGTON, July 25, 2013 /PRNewswire/ — DuPont Fabros Technology, Inc. (DFT) today reported results for the quarter ended June 30, 2013. All per share results are reported on a fully diluted basis.
Highlights
- As of June 30, 2013, the company’s overall operating portfolio was 91% leased with the stabilized portfolio at 90% leased and the non-stabilized portfolio at 93% leased.
- Quarterly Highlights:
- Reported Funds from Operations (“FFO”) of $0.47 per share representing a 27% increase over the prior year quarter.
- Reported Adjusted FFO per share of $0.42 representing a 40% increase over the prior year quarter.
- Commenced three leases totaling 4.88 megawatts (“MW”) and 28,118 raised square feet.
- Increased revolving credit facility to $400 million from $225 million through exercise of accordion.
- As reported last quarter:
- Signed one lease totaling 1.73 MW of critical load and 10,151 raised square feet at CH1 which is now 100% leased and commenced.
- Commenced development of ACC7 Phase I (11.89 MW) with expected completion in the second quarter of 2014. ACC7 is expected to be built in four phases totaling 41.60 MW available for use by tenants.
- Increased second quarter 2013 common stock dividend 25% to $0.25 per share.
- Subsequent to the Second Quarter:
- Renewed one lease for five years totaling 1.14 MW and 5,300 raised square feet.
Hossein Fateh, President and Chief Executive Officer, said, “DFT continues to focus on the plan to lease our remaining wholesale data center capacity and to develop new capacity in existing locations. We are optimistic in our ability to lease our available space based on expected data center demand.”
Second Quarter 2013 Results
For the quarter ended June 30, 2013, the company reported earnings of $0.18 per share compared to $0.11 per share for the second quarter of 2012, an increase of 64%. Revenues increased 11%, or $8.9 million, to $91.6 million for the second quarter of 2013 over the second quarter of 2012. The increase in revenues is primarily due to new leases commencing.
FFO for the quarter ended June 30, 2013 was $0.47 per share compared to $0.37 per share for the second quarter of 2012. The increase of $0.10 per share from the prior year quarter is due to higher operating income excluding depreciation.
First Half 2013 Results
For the six months ended June 30, 2013, the company reported earnings of $0.30 per share compared to $0.19 per share for the first half of 2012, an increase of 58%. Revenues increased 11%, or $18.3 million, to $179.3 million for the first six months of 2013 over the year ago period. The increase in revenues is primarily due to new leases commencing.
FFO for the six months ended June 30, 2013 was $0.87 per share, compared to $0.72 per share for the first half of 2012. The increase of $0.15 per share from the year ago period is primarily due to:
- A positive impact of $0.18 per share from higher operating income excluding depreciation.
- A negative impact of $0.02 per share due to the one-time write-off of deferred financing costs related to a secured loan payoff in the first quarter of 2013.
- A negative impact of $0.01 per share from higher interest expense primarily due to lower capitalized interest.
Portfolio Update
During the second quarter, the company signed one lease at CH1 with a lease term of 5.1 years totaling 1.73 MW and 10,151 raised square feet. A portion of the lease commenced in the second quarter and the other portion is a replacement for the 0.43 MW expiring on December 31, 2013 and is expected to commence in the first quarter of 2014.
Year to Date, the company:
- Signed two leases with a weighted average lease term of 5.2 years totaling 4.01 MW and 21,151 raised square feet that are expected to generate approximately $3.9 million of annualized GAAP base rent revenue.
- Commenced nine leases totaling 20.69 MW and 110,716 raised square feet.
- Renewed one lease at ACC4 for five years totaling 1.14 MW and 5,300 raised square feet.
Development Update
In May 2013, the company executed an agreement with its general contractor to build the entire shell and portions of the underground conduit at ACC7 (41.60 MW of critical load) and to fully develop the first phase of ACC7 (11.89 MW of critical load). The total cost of the entire ACC7 data center is expected to range from $7.0 million per MW to $7.9 million per MW, excluding capitalized interest. ACC7 will be the first data center built using the company’s new design. Expected Power Usage Efficiency (“PUE”) is 1.2 which will result in reduced energy costs for customers and the new design is also expected to lower operating costs. The company can build in modular units as small as 5.9 MW of critical load, allowing delivery on a just-in-time basis, reducing the risk of speculative development.
Balance Sheet and Liquidity
The company announced in November 2012 a twelve-month common stock repurchase program of up to $80 million. In the second quarter of 2013, the company did not repurchase any shares. Under this program the company has repurchased $37.8 million or 1,632,673 shares of common stock at an average price of $23.12 per share.
On June 12, 2013, the company exercised the accordion on its revolving credit facility increasing the facility from $225 million to $400 million. A new accordion was put into place to provide the company with the option to increase the total commitment under the facility to $600 million, if one or more lenders commit to being a lender for the additional amount and certain other customary conditions are met.
As of June 30, 2013, the company had $14 million of cash available on its balance sheet and $340 million of available capacity under its revolving credit facility.
Common Dividend
The company’s Board of Directors increased the quarterly common dividend in the second quarter of 2013 by 25% to $0.25 per share, an annualized rate of $1.00 per share.
Third Quarter and Full Year 2013 Guidance
The company has established an FFO guidance range of $0.47 to $0.49 per share for the third quarter of 2013.
The company’s 2013 FFO guidance range remains unchanged at $1.82 to $1.92 per share. The 2013 lower end of the guidance range still assumes no additional leases will be executed this year.
Second Quarter 2013 Conference Call and Webcast Information
The company will host a conference call to discuss these results today, Thursday, July 25, 2013 at 1:00 p.m. ET. To access the live call, please visit the Investor Relations section of the company’s website at www.dft.com or dial 1-800-860-2442(domestic) or 1-412-858-4600 (international). A replay will be available for seven days by dialing 1-877-344-7529 (domestic) or 1-412-317-0088 (international) using passcode 10030785. The webcast will be archived on the company’s website for one year at www.dft.com on the Presentations & Webcasts page.
About DuPont Fabros Technology, Inc.
DuPont Fabros Technology, Inc. (DFT) is a leading owner, developer, operator and manager of enterprise-class, carrier neutral, multi-tenant wholesale data centers. The Company’s facilities are designed to offer highly specialized, efficient and safe computing environments in a low-cost operating model. The Company’s customers outsource their mission critical applications and include national and international enterprises across numerous industries, such as technology, Internet content providers, media, communications, cloud-based, healthcare and financial services. The Company’s ten data centers are located in four major U.S. markets, which total 2.5 million gross square feet and 218 megawatts of available critical load to power the servers and computing equipment of its customers. DuPont Fabros Technology, Inc., a real estate investment trust (REIT) is headquartered in Washington, DC. For more information, please visit www.dft.com.
Forward-Looking Statements
Certain statements contained in this press release may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The matters described in these forward-looking statements include expectations regarding future events, results and trends and are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond the company’s control. The company faces many risks that could cause its actual performance to differ materially from the results contemplated by its forward-looking statements, including, without limitation, the risk that its assumptions underlying its full year and third quarter 2013 FFO guidance are not realized, the risks related to the leasing of available space to third-party tenants, including delays in executing new leases and failure to negotiate leases on terms that will enable it to achieve its expected returns, risks related to the collection of accounts and notes receivable, the risk that the company may be unable to obtain new financing on favorable terms to facilitate, among other things, future development projects, the risks commonly associated with construction and development of new facilities (including delays and/or cost increases associated with the completion of new developments), risks relating to obtaining required permits and compliance with permitting, zoning, land-use and environmental requirements, the risk that the company will not declare and pay dividends as anticipated for 2013 and the risk that the company may not be able to maintain its qualification as a REIT for federal tax purposes. The periodic reports that the company files with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2012 and its quarterly report on Form 10-Q for the quarter ended March 31, 2013, contain detailed descriptions of these and many other risks to which the company is subject. These reports are available on our website at www.dft.com. Because of the risks described above and other unknown risks, the company’s actual results, performance or achievements may differ materially from the results, performance or achievements contemplated by its forward-looking statements. The information set forth in this news release represents management’s expectations and intentions only as of the date of this press release. The company assumes no responsibility to issue updates to the contents of this press release.
| DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited and in thousands except share and per share data) |
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| Three months ended June 30, | Six months ended June 30, | ||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Revenues: | |||||||||||||||
| Base rent | $ | 61,710 | $ | 55,773 | $ | 122,193 | $ | 108,943 | |||||||
| Recoveries from tenants | 29,047 | 25,728 | 55,386 | 49,814 | |||||||||||
| Other revenues | 807 | 1,157 | 1,744 | 2,283 | |||||||||||
| Total revenues | 91,564 | 82,658 | 179,323 | 161,040 | |||||||||||
| Expenses: | |||||||||||||||
| Property operating costs | 24,767 | 23,473 | 48,279 | 45,836 | |||||||||||
| Real estate taxes and insurance | 3,673 | 2,413 | 7,314 | 4,584 | |||||||||||
| Depreciation and amortization | 23,196 | 22,484 | 46,235 | 44,354 | |||||||||||
| General and administrative | 4,332 | 4,505 | 8,882 | 9,741 | |||||||||||
| Other expenses | 585 | 744 | 1,357 | 1,412 | |||||||||||
| Total expenses | 56,553 | 53,619 | 112,067 | 105,927 | |||||||||||
| Operating income | 35,011 | 29,039 | 67,256 | 55,113 | |||||||||||
| Interest income | 16 | 45 | 53 | 79 | |||||||||||
| Interest: | |||||||||||||||
| Expense incurred | (12,505) | (12,674) | (25,442) | (24,537) | |||||||||||
| Amortization of deferred financing costs | (775) | (916) | (3,393) | (1,803) | |||||||||||
| Net income | 21,747 | 15,494 | 38,474 | 28,852 | |||||||||||
| Net income attributable to redeemable noncontrolling interests – operating partnership | (2,965) | (2,006) | (4,938) | (3,576) | |||||||||||
| Net income attributable to controlling interests | 18,782 | 13,488 | 33,536 | 25,276 | |||||||||||
| Preferred stock dividends | (6,811) | (6,811) | (13,622) | (13,430) | |||||||||||
| Net income attributable to common shares | $ | 11,971 | $ | 6,677 | $ | 19,914 | $ | 11,846 | |||||||
| Earnings per share – basic: | |||||||||||||||
| Net income attributable to common shares | $ | 0.19 | $ | 0.11 | $ | 0.31 | $ | 0.19 | |||||||
| Weighted average common shares outstanding | 64,380,566 | 62,897,982 | 64,733,309 | 62,733,265 | |||||||||||
| Earnings per share – diluted: | |||||||||||||||
| Net income attributable to common shares | $ | 0.18 | $ | 0.11 | $ | 0.30 | $ | 0.19 | |||||||
| Weighted average common shares outstanding | 65,188,907 | 63,749,724 | 65,556,852 | 63,648,912 | |||||||||||
| Dividends declared per common share | $ | 0.25 | $ | 0.15 | $ | 0.45 | $ | 0.27 | |||||||
| DUPONT FABROS TECHNOLOGY, INC.
RECONCILIATIONS OF NET INCOME TO FFO AND AFFO (1) (unaudited and in thousands except share and per share data) |
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| Three months ended June 30, | Six months ended June 30, | ||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Net income | $ | 21,747 | $ | 15,494 | $ | 38,474 | $ | 28,852 | |||||||
| Depreciation and amortization | 23,196 | 22,484 | 46,235 | 44,354 | |||||||||||
| Less: Non real estate depreciation and amortization | (229) | (260) | (471) | (534) | |||||||||||
| FFO | 44,714 | 37,718 | 84,238 | 72,672 | |||||||||||
| Preferred stock dividends | (6,811) | (6,811) | (13,622) | (13,430) | |||||||||||
| FFO attributable to common shares and OP units | $ | 37,903 | $ | 30,907 | $ | 70,616 | $ | 59,242 | |||||||
| Straight-line revenues, net of reserve | (2,047) | (6,203) | (6,654) | (11,226) | |||||||||||
| Amortization of lease contracts above and below market value | (597) | (853) | (1,195) | (1,832) | |||||||||||
| Compensation paid with Company common shares | 1,612 | 1,639 | 3,515 | 3,673 | |||||||||||
| Non real estate depreciation and amortization | 229 | 260 | 471 | 534 | |||||||||||
| Amortization of deferred financing costs | 775 | 916 | 1,693 | 1,803 | |||||||||||
| Write-off of deferred financing costs | — | — | 1,700 | — | |||||||||||
| Improvements to real estate | (3,548) | (1,498) | (4,357) | (1,677) | |||||||||||
| Capitalized leasing commissions | (56) | (537) | (168) | (699) | |||||||||||
| AFFO | $ | 34,271 | $ | 24,631 | $ | 65,621 | $ | 49,818 | |||||||
| FFO attributable to common shares and OP units
per share – diluted |
$ | 0.47 | $ | 0.37 | $ | 0.87 | $ | 0.72 | |||||||
| AFFO per share – diluted | $ | 0.42 | $ | 0.30 | $ | 0.80 | $ | 0.60 | |||||||
| Weighted average common shares and OP units outstanding – diluted | 81,119,817 | 82,623,517 | 81,605,473 | 82,588,508 | |||||||||||
| (1) Funds from operations, or FFO, is used by industry analysts and investors as a supplemental operating performance measure for REITs. The Company calculates FFO in accordance with the definition that was adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. FFO, as defined by NAREIT, represents net income determined in accordance with GAAP, excluding extraordinary items as defined under GAAP, impairment charges on depreciable real estate assets and gains or losses from sales of previously depreciated operating real estate assets, plus specified non-cash items, such as real estate asset depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. The Company also presents FFO attributable to common shares and OP units, which is FFO excluding preferred stock dividends. FFO attributable to common shares and OP units per share is calculated on a basis consistent with net income attributable to common shares and OP units and reflects adjustments to net income for preferred stock dividends.
The Company uses FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, it provides a performance measure that, when compared period over period, captures trends in occupancy rates, rental rates and operating expenses. The Company also believes that, as a widely recognized measure of the performance of equity REITs, FFO may be used by investors as a basis to compare the Company’s operating performance with that of other REITs. However, because FFO excludes real estate related depreciation and amortization and captures neither the changes in the value of the Company’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 the Company’s properties, all of which have real economic effects and could materially impact the Company’s results from operations, the utility of FFO as a measure of the Company’s performance is limited. While FFO is a relevant and widely used measure of operating performance of equity REITs, other equity REITs may use different methodologies for calculating FFO and, accordingly, FFO as disclosed by such other REITs may not be comparable to the Company’s FFO. Therefore, the Company believes that in order to facilitate a clear understanding of its historical operating results, FFO should be examined in conjunction with net income as presented in the consolidated statements of operations. FFO should not be considered as an alternative to net income or to cash flow from operating activities (each as computed in accordance with GAAP) or as an indicator of the Company’s liquidity, nor is it indicative of funds available to meet the Company’s cash needs, including its ability to pay dividends or make distributions. The Company also presents FFO with supplemental adjustments to arrive at Adjusted FFO (“AFFO”). AFFO is FFO attributable to common shares and OP units excluding straight-line revenue, compensation paid with Company common shares, gain or loss on derivative instruments, acquisition of service agreements, below market lease amortization net of above market lease amortization, early extinguishment of debt costs, non real estate depreciation and amortization, amortization of deferred financing costs, improvements to real estate and capitalized leasing commissions. AFFO does not represent cash generated from operating activities in accordance with GAAP and therefore should not be considered an alternative to net income as an indicator of the Company’s operating performance or as an alternative to cash flow provided by operations as a measure of liquidity and is not necessarily indicative of funds available to fund the Company’s cash needs including the Company’s ability to pay dividends. In addition, AFFO may not be comparable to similarly titled measurements employed by other companies. The Company’s management uses AFFO in management reports to provide a measure of REIT operating performance that can be compared to other companies using AFFO. |
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| DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS (in thousands except share data) |
|||||||
| June 30,
2013 |
December 31, 2012 |
||||||
| (unaudited) | |||||||
| ASSETS | |||||||
| Income producing property: | |||||||
| Land | $ | 75,956 | $ | 73,197 | |||
| Buildings and improvements | 2,419,359 | 2,315,499 | |||||
| 2,495,315 | 2,388,696 | ||||||
| Less: accumulated depreciation | (369,420) | (325,740) | |||||
| Net income producing property | 2,125,895 | 2,062,956 | |||||
| Construction in progress and land held for development | 135,950 | 218,934 | |||||
| Net real estate | 2,261,845 | 2,281,890 | |||||
| Cash and cash equivalents | 14,373 | 23,578 | |||||
| Rents and other receivables, net | 8,808 | 3,840 | |||||
| Deferred rent, net | 149,771 | 144,829 | |||||
| Lease contracts above market value, net | 9,704 | 10,255 | |||||
| Deferred costs, net | 33,628 | 35,670 | |||||
| Prepaid expenses and other assets | 42,300 | 30,797 | |||||
| Total assets | $ | 2,520,429 | $ | 2,530,859 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Liabilities: | |||||||
| Line of credit | $ | 60,000 | $ | 18,000 | |||
| Mortgage notes payable | 115,000 | 139,600 | |||||
| Unsecured notes payable | 550,000 | 550,000 | |||||
| Accounts payable and accrued liabilities | 24,416 | 22,280 | |||||
| Construction costs payable | 5,762 | 6,334 | |||||
| Accrued interest payable | 2,347 | 2,601 | |||||
| Dividend and distribution payable | 25,901 | 22,177 | |||||
| Lease contracts below market value, net | 12,276 | 14,022 | |||||
| Prepaid rents and other liabilities | 50,770 | 35,524 | |||||
| Total liabilities | 846,472 | 810,538 | |||||
| Redeemable noncontrolling interests – operating partnership | 383,877 | 453,889 | |||||
| Commitments and contingencies | — | — | |||||
| Stockholders’ equity: | |||||||
| Preferred stock, $.001 par value, 50,000,000 shares authorized: | |||||||
| Series A cumulative redeemable perpetual preferred
stock, 7,400,000 issued and outstanding at June 30, 2013 and December 31, 2012 |
185,000 | 185,000 | |||||
| Series B cumulative redeemable perpetual preferred
stock, 6,650,000 issued and outstanding at June 30, 2013 and December 31, 2012 |
166,250 | 166,250 | |||||
| Common stock, $.001 par value, 250,000,000 shares
authorized, 64,700,976 shares issued and outstanding at June 30, 2013 and 63,340,929 shares issued and outstanding at December 31, 2012 |
65 | 63 | |||||
| Additional paid in capital | 938,765 | 915,119 | |||||
| Retained earnings | — | — | |||||
| Total stockholders’ equity | 1,290,080 | 1,266,432 | |||||
| Total liabilities and stockholders’ equity | $ | 2,520,429 | $ | 2,530,859 | |||
| DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands) |
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| Six months ended June 30, | |||||||
| 2013 | 2012 | ||||||
| Cash flow from operating activities | |||||||
| Net income | $ | 38,474 | $ | 28,852 | |||
| Adjustments to reconcile net income to net cash provided by operating activities | |||||||
| Depreciation and amortization | 46,235 | 44,354 | |||||
| Straight line rent, net of reserve | (6,654) | (11,226) | |||||
| Amortization of deferred financing costs | 1,693 | 1,803 | |||||
| Write-off of deferred financing costs | 1,700 | — | |||||
| Amortization of lease contracts above and below market value | (1,195) | (1,832) | |||||
| Compensation paid with Company common shares | 3,515 | 3,673 | |||||
| Changes in operating assets and liabilities | |||||||
| Rents and other receivables | (3,219) | (566) | |||||
| Deferred costs | (205) | (787) | |||||
| Prepaid expenses and other assets | (10,650) | (3,583) | |||||
| Accounts payable and accrued liabilities | 2,260 | (2,045) | |||||
| Accrued interest payable | (254) | 56 | |||||
| Prepaid rents and other liabilities | 14,087 | (110) | |||||
| Net cash provided by operating activities | 85,787 | 58,589 | |||||
| Cash flow from investing activities | |||||||
| Investments in real estate – development | (20,516) | (35,752) | |||||
| Interest capitalized for real estate under development | (504) | (1,533) | |||||
| Improvements to real estate | (4,357) | (1,677) | |||||
| Additions to non-real estate property | (24) | (55) | |||||
| Net cash used in investing activities | (25,401) | (39,017) | |||||
| Cash flow from financing activities | |||||||
| Issuance of preferred stock, net of offering costs | — | 62,685 | |||||
| Line of credit: | |||||||
| Proceeds | 72,000 | 15,000 | |||||
| Repayments | (30,000) | (35,000) | |||||
| Mortgage notes payable: | |||||||
| Proceeds | 115,000 | — | |||||
| Lump sum payoffs | (138,300) | — | |||||
| Repayments | (1,300) | (2,600) | |||||
| Exercises of stock options | — | 868 | |||||
| Payments of financing costs | (3,036) | (2,081) | |||||
| Common stock repurchases | (37,792) | — | |||||
| Dividends and distributions: | |||||||
| Common shares | (25,597) | (15,122) | |||||
| Preferred shares | (13,622) | (12,384) | |||||
| Redeemable noncontrolling interests – operating partnership | (6,944) | (4,563) | |||||
| Net cash (used in) provided by financing activities | (69,591) | 6,803 | |||||
| Net (decrease) increase in cash and cash equivalents | (9,205) | 26,375 | |||||
| Cash and cash equivalents, beginning | 23,578 | 14,402 | |||||
| Cash and cash equivalents, ending | $ | 14,373 | $ | 40,777 | |||
| Supplemental information: | |||||||
| Cash paid for interest | $ | 26,200 | $ | 26,014 | |||
| Deferred financing costs capitalized for real estate under development | $ | 34 | $ | 97 | |||
| Construction costs payable capitalized for real estate under development | $ | 5,762 | $ | 14,048 | |||
| Redemption of operating partnership units | $ | 69,900 | $ | 5,700 | |||
| Adjustments to redeemable noncontrolling interests – operating partnership | $ | 2,111 | $ | 83,333 | |||
| DUPONT FABROS TECHNOLOGY, INC.
Operating Properties As of June 30, 2013 |
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| Property | Property Location | Year Built/
Renovated |
Gross
Building Area (2) |
Raised
Square Feet (2) |
Critical
Load MW (3) |
%
Leased (4) |
%
Commenced (5) |
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| Stabilized (1) | |||||||||||||||||||
| ACC2 | Ashburn, VA | 2001/2005 | 87,000 | 53,000 | 10.4 | 100 | % | 100 | % | ||||||||||
| ACC3 | Ashburn, VA | 2001/2006 | 147,000 | 80,000 | 13.9 | 100 | % | 100 | % | ||||||||||
| ACC4 | Ashburn, VA | 2007 | 347,000 | 172,000 | 36.4 | 100 | % | 100 | % | ||||||||||
| ACC5 | Ashburn, VA | 2009-2010 | 360,000 | 176,000 | 36.4 | 98 | % | 98 | % | ||||||||||
| ACC6 Phase I | Ashburn, VA | 2011 | 131,000 | 65,000 | 13.0 | 100 | % | 100 | % | ||||||||||
| CH1 Phase I | Elk Grove Village, IL | 2008 | 285,000 | 122,000 | 18.2 | 100 | % | 100 | % | ||||||||||
| CH1 Phase II | Elk Grove Village, IL | 2012 | 200,000 | 109,000 | 18.2 | 100 | % | 100 | % | ||||||||||
| NJ1 Phase I | Piscataway, NJ | 2010 | 180,000 | 88,000 | 18.2 | 39 | % | 39 | % | ||||||||||
| VA3 | Reston, VA | 2003 | 256,000 | 147,000 | 13.0 | 51 | % | 51 | % | ||||||||||
| VA4 | Bristow, VA | 2005 | 230,000 | 90,000 | 9.6 | 100 | % | 100 | % | ||||||||||
| Subtotal – stabilized | 2,223,000 | 1,102,000 | 187.3 | 90 | % | 90 | % | ||||||||||||
| Completed not Stabilized | |||||||||||||||||||
| ACC6 Phase II | Ashburn, VA | 2013 | 131,000 | 65,000 | 13.0 | 100 | % | 67 | % | ||||||||||
| SC1 Phase I | Santa Clara, CA | 2011 | 180,000 | 88,000 | 18.2 | 88 | % | 81 | % | ||||||||||
| Subtotal – non-stabilized | 311,000 | 153,000 | 31.2 | 93 | % | 75 | % | ||||||||||||
| Total Operating Properties | 2,534,000 | 1,255,000 | 218.5 | 91 | % | 88 | % | ||||||||||||
| (1) Stabilized operating properties are either 85% or more leased and commenced or have been in service for 24 months or greater.
(2) Gross building area is the entire building area, including raised square footage (the portion of gross building area where the tenants’ computer servers are located), tenant common areas, areas controlled by the Company (such as the mechanical, telecommunications and utility rooms) and, in some facilities, individual office and storage space leased on an as available basis to the tenants. (3) Critical load (also referred to as IT load or load used by tenants’ servers or related equipment) is the power available for exclusive use by tenants expressed in terms of megawatt, or MW, or kilowatt, or kW (1 MW is equal to 1,000 kW). (4) Percentage leased is expressed as a percentage of critical load that is subject to an executed lease totaling 198.2 MW. Leases executed as of June 30, 2013 represent $250 million of base rent on a GAAP basis and $251 million of base rent on a cash basis over the next twelve months. (5) Percentage commenced is expressed as a percentage of critical load where the lease has commenced under generally accepted accounting principles. |
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| DUPONT FABROS TECHNOLOGY, INC.
Lease Expirations As of June 30, 2013 |
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| The following table sets forth a summary schedule of lease expirations of the operating properties for each of the ten calendar years beginning with 2013. The information set forth in the table below assumes that tenants exercise no renewal options and takes into account tenants’ early termination options. | ||||||||||||||||||
| Year of Lease Expiration | Number
of Leases Expiring (1) |
Raised Square Feet
Expiring (in thousands) (2) |
% of Leased
Raised Square Feet |
Total kW
of Expiring Commenced Leases (2) |
% of
Leased kW |
% of
Annualized Base Rent (3) |
||||||||||||
| 2013 (4) | 2 | 8 | 0.7 | % | 1,567 | 0.8 | % | 0.9 | % | |||||||||
| 2014 | 6 | 35 | 3.2 | % | 6,287 | 3.3 | % | 3.7 | % | |||||||||
| 2015 | 4 | 70 | 6.5 | % | 13,812 | 7.2 | % | 6.7 | % | |||||||||
| 2016 | 4 | 32 | 2.9 | % | 4,686 | 2.4 | % | 2.5 | % | |||||||||
| 2017 | 11 | 80 | 7.4 | % | 14,206 | 7.4 | % | 7.0 | % | |||||||||
| 2018 | 16 | 168 | 15.5 | % | 33,286 | 17.3 | % | 16.6 | % | |||||||||
| 2019 | 11 | 168 | 15.5 | % | 31,035 | 16.1 | % | 15.1 | % | |||||||||
| 2020 | 9 | 96 | 8.8 | % | 15,196 | 7.9 | % | 8.3 | % | |||||||||
| 2021 | 7 | 131 | 12.1 | % | 24,269 | 12.6 | % | 13.3 | % | |||||||||
| 2022 | 6 | 75 | 6.9 | % | 12,812 | 6.6 | % | 7.4 | % | |||||||||
| After 2022 | 15 | 222 | 20.5 | % | 35,567 | 18.4 | % | 18.5 | % | |||||||||
| Total | 91 | 1,085 | 100 | % | 192,723 | 100 | % | 100 | % | |||||||||
| (1) Represents 33 tenants with 91 lease expiration dates. Top four tenants represent 61% of annualized base rent.
(2) Raised square footage is that portion of gross building area where the tenants locate their computer servers. One MW is equal to 1,000 kW. (3) Annualized base rent represents the monthly contractual base rent (defined as cash base rent before abatements) multiplied by 12 for commenced leases totaling 192.7 MW as of June 30, 2013. (4) One lease, representing 5,300 raised square feet, 1,137 kW of critical load and 0.7% of annualized base rent, was renewed in July 2013 for five years. The second lease will expire on December 31, 2013, representing 2,800 raised square feet, 430 kW of critical load and 0.2% of annualized base rent as notice was provided. This space has been re-leased with the new lease expected to commence on January 1, 2014 and expire in 2019. |
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| DUPONT FABROS TECHNOLOGY, INC.
Development Projects As of June 30, 2013 ($ in thousands) |
|||||||||||||||||
| Property | Property Location | Gross
Building Area (1) |
Raised
Square Feet (2) |
Critical
Load MW (3) |
Estimated
Total Cost (4) |
Construction
in Progress & Land Held for Development (5) |
|||||||||||
| Current Development Projects | |||||||||||||||||
| ACC7 Phase I | Ashburn, VA | 126,000 | 70,000 | 11.9 | $85,000 – $90,000 | $ | 7,296 | ||||||||||
| Future Development Projects/Phases | |||||||||||||||||
| ACC7 Phases II to IV | Ashburn, VA | 320,000 | 176,000 | 29.7 | $78,000 – $82,000 | 18,221 | |||||||||||
| SC1 Phase II | Santa Clara, CA | 180,000 | 88,000 | 18.2 | 61,834 | ||||||||||||
| NJ1 Phase II | Piscataway, NJ | 180,000 | 88,000 | 18.2 | 39,212 | ||||||||||||
| 680,000 | 352,000 | 66.1 | 119,267 | ||||||||||||||
| Land Held for Development | |||||||||||||||||
| ACC8 | Ashburn, VA | 100,000 | 50,000 | 10.4 | 3,659 | ||||||||||||
| SC2 Phase I/II | Santa Clara, CA | 200,000 | 125,000 | 26.0 | 5,728 | ||||||||||||
| 300,000 | 175,000 | 36.4 | 9,387 | ||||||||||||||
| Total | 1,106,000 | 597,000 | 114.4 | $ | 135,950 | ||||||||||||
| (1) Gross building area is the entire building area, including raised square footage (the portion of gross building area where the tenants’ computer servers are located), tenant common areas, areas controlled by the Company (such as the mechanical, telecommunications and utility rooms) and, in some facilities, individual office and storage space leased on an as available basis to the tenants.
(2) Raised square footage is that portion of gross building area where the tenants locate their computer servers. ACC7 will be built without a raised floor and the above represents computer room square footage. (3) Critical load (also referred to as IT load or load used by tenants’ servers or related equipment) is the power available for exclusive use by tenants expressed in terms of MW or kW (1 MW is equal to 1,000 kW). (4) Current development projects include land, capitalization for construction and development and capitalized operating carrying costs, as applicable, upon completion. Capitalized interest is excluded. Future development projects / phases include, land, shell and underground work through Phase I opening only. (5) Amount capitalized as of June 30, 2013. Future development projects / phases include only land, shell, underground work and capitalized interest through Phase I opening. |
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| DUPONT FABROS TECHNOLOGY, INC.
Debt Summary as of June 30, 2013 ($ in thousands) |
||||||||||||
| June 30, 2013 | ||||||||||||
| Amounts | % of Total | Rates | Maturities
(years) |
|||||||||
| Secured | $ | 115,000 | 16 | % | 2.0 | % | 4.7 | |||||
| Unsecured | 610,000 | 84 | % | 7.9 | % | 3.7 | ||||||
| Total | $ | 725,000 | 100 | % | 6.9 | % | 3.8 | |||||
| Fixed Rate Debt: | ||||||||||||
| Unsecured Notes | $ | 550,000 | 76 | % | 8.5 | % | 3.8 | |||||
| Fixed Rate Debt | 550,000 | 76 | % | 8.5 | % | 3.8 | ||||||
| Floating Rate Debt: | ||||||||||||
| Unsecured Credit Facility | 60,000 | 8 | % | 2.0 | % | 2.7 | ||||||
| ACC3 Term Loan | 115,000 | 16 | % | 2.0 | % | 4.7 | ||||||
| Floating Rate Debt | 175,000 | 24 | % | 2.0 | % | 4.1 | ||||||
| Total | $ | 725,000 | 100 | % | 6.9 | % | 3.8 | |||||
| Note: The Company capitalized interest and deferred financing cost amortization of $0.3 million and $0.5 million during the three and six months ended June 30, 2013, respectively. | ||||||||||||
| Debt Maturity as of June 30, 2013
($ in thousands) |
||||||||||||||||||||
| Year | Fixed Rate | Floating Rate | Total | % of Total | Rates | |||||||||||||||
| 2013 | $ | — | $ | — | $ | — | — | % | — | % | ||||||||||
| 2014 | — | — | — | — | % | — | % | |||||||||||||
| 2015 | 125,000 | (1) | — | 125,000 | 17.2 | % | 8.5 | % | ||||||||||||
| 2016 | 125,000 | (1) | 63,750 | (2)(3) | 188,750 | 26.0 | % | 6.3 | % | |||||||||||
| 2017 | 300,000 | (1) | 8,750 | (3) | 308,750 | 42.7 | % | 8.3 | % | |||||||||||
| 2018 | — | 102,500 | (3) | 102,500 | 14.1 | % | 2.0 | % | ||||||||||||
| Total | $ | 550,000 | $ | 175,000 | $ | 725,000 | 100 | % | 6.9 | % | ||||||||||
| (1) The Unsecured Notes have mandatory amortization payments due December 15 of each respective year.
(2) The Unsecured Credit Facility matures on March 21, 2016 with a one-year extension option. (3) The ACC3 Term Loan matures on March 27, 2018 with no extension option. Quarterly principal payments of $1.25 million begin on April 1, 2016, increase to $2.5 million on April 1, 2017 and continue through maturity. |
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| DUPONT FABROS TECHNOLOGY, INC.
Selected Unsecured Debt Metrics |
|||
| 6/30/13 | 12/31/12 | ||
| Interest Coverage Ratio (not less than 2.0) | 4.3 | 4.0 | |
| Total Debt to Gross Asset Value (not to exceed 60%) | 25.2% | 24.9% | |
| Secured Debt to Total Assets (not to exceed 40%) | 4.0% | 4.9% | |
| Total Unsecured Assets to Unsecured Debt (not less than 150%) | 442.1% | 334.3% | |
| These selected metrics relate to DuPont Fabros Technology, LP’s outstanding unsecured debt. DuPont Fabros Technology, Inc. is the general partner of DuPont Fabros Technology, LP. | |||
| Capital Structure as of June 30, 2013
(in thousands except per share data) |
|||||||||||||||||
| Line of credit | $ | 60,000 | |||||||||||||||
| Mortgage Notes Payable | 115,000 | ||||||||||||||||
| Unsecured Notes | 550,000 | ||||||||||||||||
| Total Debt | 725,000 | 24.0 | % | ||||||||||||||
| Common Shares | 80 | % | 64,701 | ||||||||||||||
| Operating Partnership (“OP”) Units | 20 | % | 15,896 | ||||||||||||||
| Total Shares and Units | 100 | % | 80,597 | ||||||||||||||
| Common Share Price at June 30, 2013 | $ | 24.15 | |||||||||||||||
| Common Share and OP Unit Capitalization | $ | 1,946,418 | |||||||||||||||
| Preferred Stock ($25 per share liquidation preference) | 351,250 | ||||||||||||||||
| Total Equity | 2,297,668 | 76.0 | % | ||||||||||||||
| Total Market Capitalization | $ | 3,022,668 | 100.0 | % | |||||||||||||
| DUPONT FABROS TECHNOLOGY, INC.
Common Share and OP Unit Weighted Average Amounts Outstanding |
|||||||||||
| Q2 2013 | Q2 2012 | YTD Q2
2013 |
YTD Q2
2012 |
||||||||
| Weighted Average Amounts Outstanding for EPS Purposes: | |||||||||||
| Common Shares – basic | 64,380,566 | 62,897,982 | 64,733,309 | 62,733,265 | |||||||
| Shares issued from assumed conversion of: | |||||||||||
| – Restricted Shares | 51,954 | 70,030 | 75,837 | 138,320 | |||||||
| – Stock Options | 756,387 | 781,712 | 747,706 | 777,327 | |||||||
| – Performance Units | — | — | — | — | |||||||
| Total Common Shares – diluted | 65,188,907 | 63,749,724 | 65,556,852 | 63,648,912 | |||||||
| Weighted Average Amounts Outstanding for FFO and AFFO Purposes: | |||||||||||
| Common Shares – basic | 64,380,566 | 62,897,982 | 64,733,309 | 62,733,265 | |||||||
| OP Units – basic | 15,930,910 | 18,873,793 | 16,048,621 | 18,939,596 | |||||||
| Total Common Shares and OP Units | 80,311,476 | 81,771,775 | 80,781,930 | 81,672,861 | |||||||
| Shares and OP Units issued from | |||||||||||
| assumed conversion of: | |||||||||||
| – Restricted Shares | 51,954 | 70,030 | 75,837 | 138,320 | |||||||
| – Stock Options | 756,387 | 781,712 | 747,706 | 777,327 | |||||||
| – Performance Units | — | — | — | — | |||||||
| Total Common Shares and Units – diluted | 81,119,817 | 82,623,517 | 81,605,473 | 82,588,508 | |||||||
| Period Ending Amounts Outstanding: | |||||||||||
| Common Shares | 64,700,976 | ||||||||||
| OP Units | 15,895,537 | ||||||||||
| Total Common Shares and Units | 80,596,513 | ||||||||||
| DUPONT FABROS TECHNOLOGY, INC. | |||
| 2013 Guidance
The earnings guidance/projections provided below are based on current expectations and are forward-looking. |
|||
| Expected Q3 2013
per share |
Expected 2013
per share (1) |
||
| Net income per common share and unit – diluted | $0.18 to $0.20 | $0.66 to $0.76 | |
| Depreciation and amortization, net | 0.29 | 1.16 | |
| FFO per share – diluted (2) | $0.47 to $0.49 | $1.82 to $1.92 | |
| 2013 Debt Assumptions | |
| Weighted average debt outstanding | $740.0 million |
| Weighted average interest rate | 7.00% |
| Total interest costs | $51.8 million |
| Amortization of deferred financing costs (3) | 3.2 million |
| Interest expense capitalized | (1.9) million |
| Deferred financing costs amortization capitalized (4) | (0.1) million |
| Total interest expense after capitalization | $53.0 million |
| 2013 Other Guidance Assumptions | |
| Total revenues | $365 to $380 million |
| Base rent (included in total revenues) | $245 to $255 million |
| Straight-line revenues (included in base rent) | $7 to $12 million |
| General and administrative expense | $18 million |
| Investments in real estate – development (4) | $80 million |
| Improvements to real estate excluding development | $6 million |
| Preferred stock dividends | $27 million |
| Annualized common stock dividend | $1.00 per share |
| Weighted average common shares and OP units – diluted | 81 million |
| Common share repurchase | $38 million |
| Acquisition of income producing properties | No amounts budgeted |
| (1) Excludes contemplated refinancing of $550 million unsecured notes. If refinanced in December 2013, approximately $0.37 per share charge to earnings per share and FFO will be recorded. This includes approximately $23.4 million redemption fee (4.25% of principal) and $6.3 million of unamortized deferred financing costs.
(2) For information regarding FFO, see “Reconciliations of Net Income to FFO and AFFO” on page 6 of this earnings release. (3) Excludes $1.7 million write-off of deferred financing costs related to the payoff of a secured loan. (4) Represents cash spend expected in 2013 for the ACC7 development. |
|
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