Attached files
| file | filename |
|---|---|
| 8-K - 8-K - DUPONT FABROS TECHNOLOGY, INC. | a8-kx3q12earningsrelease.htm |
Exhibit 99.1
Third Quarter 2012 |
Earnings Release |
and Supplemental Information |
ACC5 & ACC6 Data Centers |
Ashburn, VA |
DuPont Fabros Technology, Inc. 1212 New York Avenue, NW Suite 900 Washington, D.C. 20005 (202) 728-0044 www.dft.com NYSE: DFT | Investor Relations Contacts: Mr. Mark L. Wetzel EVP, CFO & Treasurer mwetzel@dft.com (202) 728-0033 | Mr. Christopher A. Warnke Manager, Investor Relations investorrelations@dft.com (202) 478-2330 | |
Third Quarter 2012 Results
Table of Contents | ||||
Earnings Release | 1-4 | |||
Consolidated Statements of Operations | 5 | |||
Reconciliations of Net Income to Funds From Operations and Adjusted Funds From Operations | 6 | |||
Consolidated Balance Sheets | 7 | |||
Consolidated Statements of Cash Flows | 8 | |||
Operating Properties | 9 | |||
Lease Expirations | 10 | |||
Development Projects | 11 | |||
Debt Summary and Debt Maturity | 12 | |||
Selected Unsecured Debt Metrics and Capital Structure | 13 | |||
Common Share and Operating Partnership Unit Weighted Average Amounts Outstanding | 14 | |||
2012 Guidance | 15 | |||
Note: This press release supplement contains certain non-GAAP financial measures that management believes are helpful in understanding the company's business, as further discussed within this press release supplement. These financial measures, which include Funds From Operations, Adjusted Funds From Operations, Funds From Operations per share and Adjusted Funds From Operations per share, should not be considered as an alternative to net income, earnings per share or any other GAAP measurement of performance or as an alternative to cash flows from operating, investing or financing activities. Furthermore, these non-GAAP financial measures are not intended to be a measure of cash flow or liquidity. Information included in this supplemental package is unaudited.
NEWS
DUPONT FABROS TECHNOLOGY, INC. REPORTS THIRD QUARTER 2012 RESULTS
Revenues up 16%
ACC6 Phase I 100% Leased
WASHINGTON, DC, -- October 24, 2012 - DuPont Fabros Technology, Inc. (NYSE: DFT) today reported results for the quarter ended September 30, 2012. All per share results are reported on a fully diluted basis.
Highlights
• | As of today, the company's overall operating portfolio is 85% leased with the stabilized portfolio at 96% leased, and the three properties remaining in the non-stabilized portfolio at 55% leased. In the development portfolio, ACC6 Phase II is 67% pre-leased. |
• | Third quarter 2012 activity: |
• | Signed two leases totaling 3.47 megawatts (“MW”) and 18,116 raised square feet. |
• | Commenced four leases totaling 5.85 MW and 30,369 raised square feet. |
• | Extended the maturity of three leases totaling 9.91 MW and 68,687 raised square feet by a weighted average of 6.6 years. These leases were originally scheduled to expire from 2013 to 2017. |
• | Subsequent to the third quarter: |
• | Extended the maturity of one lease totaling 13.90 MW and 80,000 raised square feet by 8.2 years. This lease was originally scheduled to expire from 2016 to 2018. |
Hossein Fateh, President and Chief Executive Officer, said “We continue to remain focused on leasing up our available inventory in all of our markets, with ACC6 Phase I in Ashburn, Virginia now 100% leased. In addition, we made significant progress on extending the lease maturity with three important tenants which includes the extension of the entire ACC3 lease through 2024 to 2026. As of today, leases that represent less than 15% of our annualized base rent are scheduled to expire prior to January 2017.”
Third Quarter 2012 Results
For the quarter ended September 30, 2012, the company reported earnings of $0.11 per share compared to $0.22 per share for the third quarter of 2011. The decrease of $0.11 in earnings per share is primarily due to lower capitalized interest and higher preferred dividends. Revenues increased 16%, or $11.6 million, to $85.4 million for the third quarter of 2012 over the third quarter of 2011. The increase in revenues is primarily due to new leases commencing at our non-stabilized properties partially offset by one lease that expired on April 30, 2012.
- 1-
Funds from Operations (“FFO”) for the quarter ended September 30, 2012 was $0.38 per share compared to $0.44 per share for the third quarter of 2011. The decrease of $0.06 per share is primarily due to:
• | Higher operating income, excluding depreciation, of $0.06 per share (primarily due to new leases commencing of $0.12 per share offset by unreimbursed property operating expenses, real estate taxes and insurance related to the properties that are not fully leased of $0.06 per share). |
• | Higher fixed charges of $0.12 per share (lower capitalized interest expense of $0.10 per share and additional preferred dividends of $0.02 per share). |
Nine Months Ended September 30, 2012 Results
For the nine months ended September 30, 2012, the company reported earnings of $0.30 per share compared to $0.59 per share for the year ago period. The decrease of $0.29 in earnings per share is primarily due to lower capitalized interest and higher preferred dividends. Revenues increased 16%, or $33.4 million, to $246.5 million for the nine months ended September 30, 2012 over the year ago period. The increase in revenues is primarily due to new leases commencing at our non-stabilized properties partially offset by one lease that expired on April 30, 2012.
FFO for the nine months ended September 30, 2012 was $1.10 per share compared to $1.24 per share for the year ago period. The decrease of $0.14 per share is primarily due to:
• | Higher operating income, excluding depreciation, of $0.17 per share (primarily due to new leases commencing of $0.29 per share offset by unreimbursed property operating expenses, real estate taxes and insurance of $0.12 per share). |
• | Higher fixed charges of $0.31 per share (lower capitalized interest expense of $0.25 per share and additional preferred dividends of $0.06 per share). |
Portfolio Update
During the third quarter 2012, the company:
• | Signed two leases totaling 3.47 MW and 18,116 raised square feet with an average lease term of 5.5 years. |
• | One lease was at ACC6 Phase I totaling 2.17 MW and 9,966 raised square feet. This lease commenced in the third quarter of 2012. |
• | One lease was at CH1 Phase II totaling 1.30 MW and 8,150 raised square feet. This lease commenced in the third quarter of 2012. |
• | Extended the maturity of three leases totaling 9.91 MW and 68,687 raised square feet by a weighted average of 6.6 years. |
• | One lease was at VA3 totaling 2.60 MW and 27,436 raised square feet. This lease was extended from a maturity date of 2013 to maturing in two increments in 2017 and 2020. |
• | One lease was at CH1 totaling 3.90 MW and 24,851 raised square feet. This lease was extended from maturities ranging from 2015 to 2017 to maturities ranging from 2022 to 2024. |
• | One lease was at ACC5 totaling 3.41MW and 16,400 raised square feet. This lease was extended from maturities ranging from 2015 to 2017 to maturities ranging from 2022 to 2024. |
• | Subsequent to the third quarter, the company extended the lease at ACC3 totaling 13.90 MW and 80,000 raised square feet by 8.2 years. |
- 2-
Year-to-date, the company:
• | Signed nine leases totaling 27.86 MW and 139,713 raised square feet with an average lease term of 11.4 years as compared to thirteen leases, 23.62 MW and 125,716 raised square feet for the prior year earnings release period. |
• | Commenced thirteen leases totaling 30.89 MW and 162,855 raised square feet as compared to eleven leases, 13.46 MW and 65,093 raised square feet for the prior year earnings release period. |
• | Signed four lease extensions totaling 23.81 MW and 148,687 raised square feet for a weighted average additional 7.5 years as compared to one lease extension, 9.60 MW and 90,000 raised square feet for the prior year earnings release period. |
2012 Guidance
The company is tightening its 2012 FFO guidance range to $1.48 to $1.52 per share from $1.47 to $1.54 per share. The 2012 updated lower end of the guidance range assumes no additional leases commencing this year.
The company has established an FFO guidance range of $0.38 to $0.42 per share for the fourth quarter of 2012.
Third Quarter 2012 Conference Call and Webcast Information
The company will host a conference call to discuss these results on Thursday, October 25, 2012 at 10:00 a.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 10019215. The webcast will be archived on the company's website for one year at www.dft.com on the Presentations & Webcasts page.
Fourth Quarter 2012 Conference Call
DuPont Fabros Technology, Inc. expects to announce fourth quarter 2012 results on Tuesday, February 5, 2013 and to host a conference call to discuss those results at 10:00 a.m. ET on Wednesday, February 6, 2013.
About DuPont Fabros Technology, Inc.
DuPont Fabros Technology, Inc. (NYSE: DFT) is a leading owner, developer, operator and manager of large multi-tenant wholesale data centers. The Company's facilities are designed to offer highly specialized, efficient, carrier-neutral 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 2.4 million gross square feet and 205 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.
- 3-
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 fourth quarter 2012 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, 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 2012 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, 2011 and its quarterly reports on Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012, 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.
- 4-
DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands except share and per share data)
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenues: | |||||||||||||||
Base rent | $ | 56,641 | $ | 48,422 | $ | 165,584 | $ | 144,125 | |||||||
Recoveries from tenants | 27,759 | 24,585 | 77,573 | 67,052 | |||||||||||
Other revenues | 1,046 | 777 | 3,329 | 1,862 | |||||||||||
Total revenues | 85,446 | 73,784 | 246,486 | 213,039 | |||||||||||
Expenses: | |||||||||||||||
Property operating costs | 24,524 | 21,526 | 70,360 | 58,372 | |||||||||||
Real estate taxes and insurance | 4,631 | 1,285 | 9,215 | 4,464 | |||||||||||
Depreciation and amortization | 22,531 | 18,396 | 66,885 | 54,600 | |||||||||||
General and administrative | 3,973 | 3,834 | 13,714 | 12,516 | |||||||||||
Other expenses | 734 | 441 | 2,146 | 958 | |||||||||||
Total expenses | 56,393 | 45,482 | 162,320 | 130,910 | |||||||||||
Operating income | 29,053 | 28,302 | 84,166 | 82,129 | |||||||||||
Interest income | 33 | 71 | 112 | 474 | |||||||||||
Interest: | |||||||||||||||
Expense incurred | (11,934 | ) | (3,928 | ) | (36,471 | ) | (17,106 | ) | |||||||
Amortization of deferred financing costs | (874 | ) | (490 | ) | (2,677 | ) | (1,636 | ) | |||||||
Net income | 16,278 | 23,955 | 45,130 | 63,861 | |||||||||||
Net income attributable to redeemable noncontrolling interests – operating partnership | (2,181 | ) | (4,435 | ) | (5,757 | ) | (12,203 | ) | |||||||
Net income attributable to controlling interests | 14,097 | 19,520 | 39,373 | 51,658 | |||||||||||
Preferred stock dividends | (6,811 | ) | (5,572 | ) | (20,241 | ) | (15,301 | ) | |||||||
Net income attributable to common shares | $ | 7,286 | $ | 13,948 | $ | 19,132 | $ | 36,357 | |||||||
Earnings per share – basic: | |||||||||||||||
Net income attributable to common shares | $ | 0.11 | $ | 0.22 | $ | 0.30 | $ | 0.59 | |||||||
Weighted average common shares outstanding | 62,994,500 | 61,973,869 | 62,820,979 | 60,912,532 | |||||||||||
Earnings per share – diluted: | |||||||||||||||
Net income attributable to common shares | $ | 0.11 | $ | 0.22 | $ | 0.30 | $ | 0.59 | |||||||
Weighted average common shares outstanding | 63,881,663 | 62,983,474 | 63,727,131 | 61,987,534 | |||||||||||
Dividends declared per common share | $ | 0.15 | $ | 0.12 | $ | 0.42 | $ | 0.36 | |||||||
- 5-
DUPONT FABROS TECHNOLOGY, INC.
RECONCILIATIONS OF NET INCOME TO FFO AND AFFO (1)
(unaudited and in thousands except share and per share data)
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net income | $ | 16,278 | $ | 23,955 | $ | 45,130 | $ | 63,861 | |||||||
Depreciation and amortization | 22,531 | 18,396 | 66,885 | 54,600 | |||||||||||
Less: Non real estate depreciation and amortization | (251 | ) | (198 | ) | (785 | ) | (600 | ) | |||||||
FFO | 38,558 | 42,153 | 111,230 | 117,861 | |||||||||||
Preferred stock dividends | (6,811 | ) | (5,572 | ) | (20,241 | ) | (15,301 | ) | |||||||
FFO attributable to common shares and OP units | $ | 31,747 | $ | 36,581 | $ | 90,989 | $ | 102,560 | |||||||
Straight-line revenues | (5,598 | ) | (6,566 | ) | (16,824 | ) | (29,518 | ) | |||||||
Amortization of lease contracts above and below market value | (763 | ) | (829 | ) | (2,595 | ) | (1,900 | ) | |||||||
Compensation paid with Company common shares | 1,660 | 1,510 | 5,333 | 4,433 | |||||||||||
AFFO | $ | 27,046 | $ | 30,696 | $ | 76,903 | $ | 75,575 | |||||||
FFO attributable to common shares and OP units per share - diluted | $ | 0.38 | $ | 0.44 | $ | 1.10 | $ | 1.24 | |||||||
AFFO per share - diluted | $ | 0.33 | $ | 0.37 | $ | 0.93 | $ | 0.92 | |||||||
Weighted average common shares and OP units outstanding - diluted | 82,713,851 | 82,474,712 | 82,630,663 | 82,433,216 | |||||||||||
(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, non-cash stock based compensation, gain or loss on derivative instruments, acquisition of service agreements, below market lease amortization net of above market lease amortization and early extinguishment of debt costs. 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.
- 6-
DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands except share data)
September 30, 2012 | December 31, 2011 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Income producing property: | |||||||
Land | $ | 73,197 | $ | 63,393 | |||
Buildings and improvements | 2,313,693 | 2,123,377 | |||||
2,386,890 | 2,186,770 | ||||||
Less: accumulated depreciation | (304,692 | ) | (242,245 | ) | |||
Net income producing property | 2,082,198 | 1,944,525 | |||||
Construction in progress and land held for development | 204,961 | 320,611 | |||||
Net real estate | 2,287,159 | 2,265,136 | |||||
Cash and cash equivalents | 14,716 | 14,402 | |||||
Restricted cash | — | 174 | |||||
Rents and other receivables | 3,056 | 1,388 | |||||
Deferred rent | 143,686 | 126,862 | |||||
Lease contracts above market value, net | 10,530 | 11,352 | |||||
Deferred costs, net | 37,160 | 40,349 | |||||
Prepaid expenses and other assets | 32,092 | 31,708 | |||||
Total assets | $ | 2,528,399 | $ | 2,491,371 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Liabilities: | |||||||
Line of credit | $ | — | $ | 20,000 | |||
Mortgage notes payable | 140,900 | 144,800 | |||||
Unsecured notes payable | 550,000 | 550,000 | |||||
Accounts payable and accrued liabilities | 23,694 | 22,955 | |||||
Construction costs payable | 10,549 | 20,300 | |||||
Accrued interest payable | 14,270 | 2,528 | |||||
Dividend and distribution payable | 18,071 | 14,543 | |||||
Lease contracts below market value, net | 14,896 | 18,313 | |||||
Prepaid rents and other liabilities | 29,832 | 29,058 | |||||
Total liabilities | 802,212 | 822,497 | |||||
Redeemable noncontrolling interests – operating partnership | 475,513 | 461,739 | |||||
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 September 30, 2012 and December 31, 2011 | 185,000 | 185,000 | |||||
Series B cumulative redeemable perpetual preferred stock, 6,650,000 issued and outstanding at September 30, 2012 and 4,050,000 shares issued and outstanding at December 31, 2011 | 166,250 | 101,250 | |||||
Common stock, $.001 par value, 250,000,000 shares authorized, 63,296,253 shares issued and outstanding at September 30, 2012 and 62,914,987 shares issued and outstanding at December 31, 2011 | 63 | 63 | |||||
Additional paid in capital | 899,361 | 927,902 | |||||
Retained earnings (accumulated deficit) | — | (7,080 | ) | ||||
Total stockholders’ equity | 1,250,674 | 1,207,135 | |||||
Total liabilities and stockholders’ equity | $ | 2,528,399 | $ | 2,491,371 | |||
- 7-
DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
Nine months ended September 30, | |||||||
2012 | 2011 | ||||||
Cash flow from operating activities | |||||||
Net income | $ | 45,130 | $ | 63,861 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 66,885 | 54,600 | |||||
Straight line rent | (16,824 | ) | (29,518 | ) | |||
Amortization of deferred financing costs | 2,677 | 1,636 | |||||
Amortization of lease contracts above and below market value | (2,595 | ) | (1,900 | ) | |||
Compensation paid with Company common shares | 5,333 | 4,433 | |||||
Changes in operating assets and liabilities | |||||||
Restricted cash | 174 | 223 | |||||
Rents and other receivables | (1,668 | ) | 954 | ||||
Deferred costs | (898 | ) | (1,672 | ) | |||
Prepaid expenses and other assets | (6,302 | ) | (2,903 | ) | |||
Accounts payable and accrued liabilities | 739 | (1,728 | ) | ||||
Accrued interest payable | 11,742 | 11,403 | |||||
Prepaid rents and other liabilities | (1,653 | ) | 3,697 | ||||
Net cash provided by operating activities | 102,740 | 103,086 | |||||
Cash flow from investing activities | |||||||
Investments in real estate – development | (82,754 | ) | (312,056 | ) | |||
Land acquisition costs | — | (9,507 | ) | ||||
Interest capitalized for real estate under development | (2,654 | ) | (23,967 | ) | |||
Improvements to real estate | (3,333 | ) | (3,147 | ) | |||
Additions to non-real estate property | (55 | ) | (203 | ) | |||
Net cash used in investing activities | (88,796 | ) | (348,880 | ) | |||
Cash flow from financing activities | |||||||
Issuance of preferred stock, net of offering costs | 62,685 | 97,450 | |||||
Line of credit: | |||||||
Proceeds | 15,000 | — | |||||
Repayments | (35,000 | ) | — | ||||
Mortgage notes payable: | |||||||
Repayments | (3,900 | ) | (3,900 | ) | |||
Return of escrowed proceeds | — | 1,104 | |||||
Exercises of stock options | 868 | 596 | |||||
Payments of financing costs | (2,084 | ) | (1,352 | ) | |||
Dividends and distributions: | |||||||
Common shares | (24,616 | ) | (21,833 | ) | |||
Preferred shares | (19,195 | ) | (13,753 | ) | |||
Redeemable noncontrolling interests – operating partnership | (7,388 | ) | (7,641 | ) | |||
Net cash (used in) provided by financing activities | (13,630 | ) | 50,671 | ||||
Net increase (decrease) in cash and cash equivalents | 314 | (195,123 | ) | ||||
Cash and cash equivalents, beginning | 14,402 | 226,950 | |||||
Cash and cash equivalents, ending | $ | 14,716 | $ | 31,827 | |||
Supplemental information: | |||||||
Cash paid for interest | $ | 27,384 | $ | 29,670 | |||
Deferred financing costs capitalized for real estate under development | $ | 161 | $ | 1,192 | |||
Construction costs payable capitalized for real estate under development | $ | 10,549 | $ | 25,777 | |||
Redemption of operating partnership units | $ | 5,700 | $ | 58,300 | |||
Adjustments to redeemable noncontrolling interests - operating partnership | $ | 21,643 | $ | (17,401 | ) | ||
- 8-
DUPONT FABROS TECHNOLOGY, INC.
Operating Properties
As of September 30, 2012
Property | Property Location | Year Built/ Renovated | Gross Building Area (2) | Raised Square Feet (3) | Critical Load MW (4) | % Leased(5) | % Commenced (5) | ||||||||||||
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 | 100 | % | 100 | % | ||||||||||
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 | 98 | % | 98 | % | ||||||||||
VA3 | Reston, VA | 2003 | 256,000 | 147,000 | 13.0 | 56 | % | 56 | % | ||||||||||
VA4 | Bristow, VA | 2005 | 230,000 | 90,000 | 9.6 | 100 | % | 100 | % | ||||||||||
Subtotal – stabilized | 1,843,000 | 905,000 | 150.9 | 96 | % | 96 | % | ||||||||||||
Completed not Stabilized | |||||||||||||||||||
CH1 Phase II | Elk Grove Village, IL | 2012 | 200,000 | 109,000 | 18.2 | 86 | % | 71 | % | ||||||||||
NJ1 Phase I | Piscataway, NJ | 2010 | 180,000 | 88,000 | 18.2 | 36 | % | 36 | % | ||||||||||
SC1 Phase I | Santa Clara, CA | 2011 | 180,000 | 88,000 | 18.2 | 44 | % | 44 | % | ||||||||||
Subtotal – non-stabilized | 560,000 | 285,000 | 54.6 | 55 | % | 50 | % | ||||||||||||
Total Operating Properties | 2,403,000 | 1,190,000 | 205.5 | 85 | % | 84 | % | ||||||||||||
(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) | Raised square footage is that portion of gross building area where the tenants locate their computer servers. The Company considers raised square footage to be the net rentable square footage in each of its facilities. |
(4) | 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). |
(5) | Percentage leased is expressed as a percentage of critical load that is subject to an executed lease. Percentage commenced is expressed as a percentage of critical load where the lease has commenced under generally accepted accounting principles. Leases executed as of September 30, 2012 (including one lease amendment executed October 2012) represent $229 million of base rent on a straight-line basis and $225 million on a cash basis over the next twelve months. |
- 9-
DUPONT FABROS TECHNOLOGY, INC.
Lease Expirations
As of September 30, 2012
The following table sets forth a summary schedule of lease expirations of the operating properties for each of the ten calendar years beginning with 2012. 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 Leases (3) | % of Leased kW | % of Annualized Base Rent | ||||||||||||
2012 | — | — | — | % | — | — | % | — | % | |||||||||
2013 (4) | 2 | 8 | 0.8 | % | 1,567 | 0.9 | % | 0.9 | % | |||||||||
2014 | 6 | 35 | 3.5 | % | 6,287 | 3.6 | % | 3.7 | % | |||||||||
2015 | 4 | 70 | 7.0 | % | 13,812 | 7.9 | % | 7.1 | % | |||||||||
2016 (5) | 4 | 32 | 3.2 | % | 4,686 | 2.7 | % | 2.6 | % | |||||||||
2017 (5) | 9 | 66 | 6.7 | % | 11,470 | 6.6 | % | 6.3 | % | |||||||||
2018 (5) | 10 | 118 | 11.9 | % | 24,511 | 14.0 | % | 14.3 | % | |||||||||
2019 | 11 | 168 | 16.9 | % | 31,035 | 17.7 | % | 16.3 | % | |||||||||
2020 | 9 | 96 | 9.7 | % | 15,196 | 8.7 | % | 9.2 | % | |||||||||
2021 | 7 | 130 | 13.1 | % | 21,669 | 12.4 | % | 13.9 | % | |||||||||
After 2021 (5) | 20 | 270 | 27.2 | % | 44,597 | 25.5 | % | 25.7 | % | |||||||||
Total | 82 | 993 | 100 | % | 174,830 | 100 | % | 100 | % | |||||||||
(1) | Represents 33 tenants with 82 lease expiration dates, including two leases that have not yet commenced as of October 24, 2012 for one existing tenant. Top three tenants represent 47% of annualized base rent as of September 30, 2012 (including one lease amendment executed October 2012). |
(2) | Raised square footage is that portion of gross building area where the tenants locate their computer servers. The Company considers raised square footage to be the net rentable square footage in each of its facilities. |
(3) | One MW is equal to 1,000 kW. |
(4) | One lease has an option to terminate on six months notice and has a scheduled maturity on September 30, 2013 with no notice received as of today. Notice has been provided on the second lease and it will expire on December 31, 2013, representing 2,800 raised square feet, 430 kW of critical load and 0.2% of annualized base rent. |
(5) | Reflects the fact that, in October 2012, the Company entered into a lease amendment with one tenant, which lease provided for scheduled lease expirations of 13,900 kW of critical load between 2016 and 2018, to extend the term of each lease expiration by 8.2 years. This lease represents 80,000 raised square feet and 8.0% of leased raised square feet as of September 30, 2012. |
- 10-
DUPONT FABROS TECHNOLOGY, INC.
Development Projects
As of September 30, 2012
($ 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) | % Pre-leased | |||||||||||||||
Current Development Projects | ||||||||||||||||||||||
ACC6 Phase II | Ashburn, VA | 131,000 | 65,000 | 13.0 | $ | 115,000 | $ | 88,243 | 67 | % | ||||||||||||
Future Development Projects/Phases | ||||||||||||||||||||||
SC1 Phase II | Santa Clara, CA | 180,000 | 88,000 | 18.2 | 61,653 | |||||||||||||||||
NJ1 Phase II | Piscataway, NJ | 180,000 | 88,000 | 18.2 | 39,212 | |||||||||||||||||
360,000 | 176,000 | 36.4 | 100,865 | |||||||||||||||||||
Land Held for Development | ||||||||||||||||||||||
ACC7 Phase I /II | Ashburn, VA | 360,000 | 176,000 | 36.4 | 10,191 | |||||||||||||||||
ACC8 | Ashburn, VA | 100,000 | 50,000 | 10.4 | 3,670 | |||||||||||||||||
SC2 Phase I/II | Santa Clara, CA | 300,000 | 171,000 | 36.4 | 1,992 | |||||||||||||||||
760,000 | 397,000 | 83.2 | 15,853 | |||||||||||||||||||
Total | 1,251,000 | 638,000 | 132.6 | $ | 204,961 | |||||||||||||||||
(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. The Company considers raised square footage to be the net rentable square footage in each of its facilities. |
(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, capitalized interest and capitalized operating carrying costs, as applicable, upon completion. |
(5) | Amount capitalized as of September 30, 2012. Future Phase II development projects include only land, shell, underground work and capitalized interest through Phase I opening. |
- 11-
DUPONT FABROS TECHNOLOGY, INC.
Debt Summary as of September 30, 2012
($ in thousands)
Amounts | % of Total | Rates | Maturities (years) | |||||||||
Secured | $ | 140,900 | 20 | % | 3.2 | % | 2.2 | |||||
Unsecured | 550,000 | 80 | % | 8.5 | % | 4.5 | ||||||
Total | $ | 690,900 | 100 | % | 7.4 | % | 4.0 | |||||
Fixed Rate Debt: | ||||||||||||
Unsecured Notes | $ | 550,000 | 80 | % | 8.5 | % | 4.5 | |||||
Fixed Rate Debt | 550,000 | 80 | % | 8.5 | % | 4.5 | ||||||
Floating Rate Debt: | ||||||||||||
Unsecured Credit Facility | — | — | — | % | 3.5 | |||||||
ACC5 Term Loan | 140,900 | 20 | % | 3.2 | % | 2.2 | ||||||
Floating Rate Debt | 140,900 | 20 | % | 3.2 | % | 2.2 | ||||||
Total | $ | 690,900 | 100 | % | 7.4 | % | 4.0 | |||||
Note: | The Company capitalized interest and deferred financing cost amortization of $1.2 million and $2.8 million during the three and nine months ended September 30, 2012, respectively. |
Debt Maturity as of September 30, 2012
($ in thousands)
Year | Fixed Rate | Floating Rate | Total | % of Total | Rates | |||||||||||||||
2012 | $ | — | $ | 1,300 | $ | 1,300 | 0.2 | % | 3.2 | % | ||||||||||
2013 | — | 5,200 | 5,200 | 0.8 | % | 3.2 | % | |||||||||||||
2014 | — | 134,400 | (2) | 134,400 | 19.5 | % | 3.2 | % | ||||||||||||
2015 | 125,000 | (1) | — | 125,000 | 18.1 | % | 8.5 | % | ||||||||||||
2016 | 125,000 | (1) | — | 125,000 | 18.1 | % | 8.5 | % | ||||||||||||
2017 | 300,000 | (1) | — | 300,000 | 43.3 | % | 8.5 | % | ||||||||||||
Total | $ | 550,000 | $ | 140,900 | $ | 690,900 | 100 | % | 7.4 | % | ||||||||||
(1) | The Unsecured Notes have mandatory amortization payments due December 15 of each respective year. |
(2) | Remaining principal payment due on December 2, 2014 with no extension option. |
- 12-
DUPONT FABROS TECHNOLOGY, INC.
Selected Unsecured Debt Metrics
9/30/12 | 12/31/11 | ||
Interest Coverage Ratio (not less than 2.0) | 3.9 | 3.5 | |
Total Debt to Gross Asset Value (not to exceed 60%) | 24.5% | 26.3% | |
Secured Debt to Total Assets (not to exceed 40%) | 5.0% | 5.3% | |
Total Unsecured Assets to Unsecured Debt (not less than 150%) | 345.0% | 329.5% | |
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 September 30, 2012
(in thousands except per share data)
Mortgage Notes Payable | $ | 140,900 | |||||||||||||||
Unsecured Notes | 550,000 | ||||||||||||||||
Total Debt | 690,900 | 22.2 | % | ||||||||||||||
Common Shares | 77 | % | 63,296 | ||||||||||||||
Operating Partnership (“OP”) Units | 23 | % | 18,832 | ||||||||||||||
Total Shares and Units | 100 | % | 82,128 | ||||||||||||||
Common Share Price at September 30, 2012 | $ | 25.25 | |||||||||||||||
Common Share and OP Unit Capitalization | $ | 2,073,732 | |||||||||||||||
Preferred Stock ($25 per share liquidation preference) | 351,250 | ||||||||||||||||
Total Equity | 2,424,982 | 77.8 | % | ||||||||||||||
Total Market Capitalization | $ | 3,115,882 | 100.0 | % | |||||||||||||
- 13-
DUPONT FABROS TECHNOLOGY, INC.
Common Share and OP Unit
Weighted Average Amounts Outstanding
Q3 2012 | Q3 2011 | YTD Q3 2012 | YTD Q3 2011 | ||||||||
Weighted Average Amounts Outstanding for EPS Purposes: | |||||||||||
Common Shares - basic | 62,994,500 | 61,973,869 | 62,820,979 | 60,912,532 | |||||||
Shares issued from assumed conversion of: | |||||||||||
- Restricted Shares | 113,617 | 243,681 | 130,085 | 268,479 | |||||||
- Stock Options | 773,546 | 765,924 | 776,067 | 806,523 | |||||||
- Performance Units | — | — | — | — | |||||||
Total Common Shares - diluted | 63,881,663 | 62,983,474 | 63,727,131 | 61,987,534 | |||||||
Weighted Average Amounts Outstanding for FFO and AFFO Purposes: | |||||||||||
Common Shares - basic | 62,994,500 | 61,973,869 | 62,820,979 | 60,912,532 | |||||||
OP Units - basic | 18,832,188 | 19,491,238 | 18,903,532 | 20,445,682 | |||||||
Total Common Shares and OP Units | 81,826,688 | 81,465,107 | 81,724,511 | 81,358,214 | |||||||
Shares and OP Units issued from | |||||||||||
assumed conversion of: | |||||||||||
- Restricted Shares | 113,617 | 243,681 | 130,085 | 268,479 | |||||||
- Stock Options | 773,546 | 765,924 | 776,067 | 806,523 | |||||||
- Performance Units | — | — | — | — | |||||||
Total Common Shares and Units - diluted | 82,713,851 | 82,474,712 | 82,630,663 | 82,433,216 | |||||||
Period Ending Amounts Outstanding: | |||||||||||
Common Shares | 63,296,253 | ||||||||||
OP Units | 18,832,188 | ||||||||||
Total Common Shares and Units | 82,128,441 | ||||||||||
- 14-
DUPONT FABROS TECHNOLOGY, INC.
2012 Guidance as of October 24, 2012
The earnings guidance/projections provided below are based on current expectations and are forward-looking.
Expected Q4 2012 per share | Expected 2012 per share | ||
Net income per common share and unit - diluted | $0.11 to $0.15 | $0.40 to $0.44 | |
Depreciation and amortization, net | 0.27 | 1.08 | |
FFO per share - diluted (1) | $0.38 to $0.42 | $1.48 to $1.52 | |
2012 Debt Assumptions | |
Weighted average debt outstanding | $692.5 million |
Weighted average interest rate | 7.54% |
Total interest costs | $52.2 million |
Amortization of deferred financing costs | 3.8 million |
Interest expense capitalized | (4.3) million |
Deferred financing costs amortization capitalized | (0.3) million |
Total interest expense after capitalization | $51.4 million |
2012 Other Guidance Assumptions | |
Total revenues | $330 to $335 million |
Base rent (included in total revenues) | $223 to $225 million |
Straight-line revenues (included in base rent) | $20 to $21 million |
General and administrative expense | $18 million |
Investments in real estate - development | $95 million |
Improvements to real estate excluding development | $4 million |
Preferred stock dividends | $27 million |
Annualized common stock dividend | $0.60 per share |
Weighted average common shares and OP units - diluted | 83 million |
(1) | For information regarding FFO, see “Reconciliations of Net Income to FFO and AFFO” on page 6 of this earnings release. |
- 15-