DuPont Fabros Technology, Inc. Reports Fourth Quarter 2012 Results

Revenues up 16%

ACC6 Phase II opens at 100% Leased

06 Feb, 2013, 07:00 ET from DuPont Fabros Technology, Inc.

WASHINGTON, Feb. 6, 2013 /PRNewswire/ -- DuPont Fabros Technology, Inc. (NYSE: DFT) today reported results for the quarter ended December 31, 2012. All per share results are reported on a fully diluted basis.

(Logo: http://photos.prnewswire.com/prnh/20120104/MM29780LOGO )

Highlights

  • At year-end, the company's overall operating portfolio was 90% leased with the stabilized portfolio at 90% leased, the two properties remaining in the non-stabilized portfolio at 88% leased and the one completed development, ACC6 Phase II, 100% leased.
  • Quarterly Highlights:
    • Reported fourth quarter Funds from Operations ("FFO") of $0.38 per share representing a 2.7% increase over the prior year quarter. 
    • Increased the quarterly dividend by 33% from $0.15 per share to $0.20 per share. 
    • Signed five leases totaling 13.62 megawatts ("MW") and 73,582 raised square feet. 
    • Commenced two leases totaling 1.00 MW and 5,500 raised square feet.
    • As reported in the third quarter earnings release, extended the maturity of one lease totaling 13.90 MW and 80,000 raised square feet by 8.2 years.  This lease is now scheduled to expire from 2024 to 2026. 

Hossein Fateh, President and Chief Executive Officer, said, "The volume of new leasing in 2012 was the best in our history.  In 2012, we signed 14 new leases totaling 41.5 MW of critical load and four lease extensions totaling 23.8 MW of critical load. Three of the four lease extensions were with tenants who also signed 16.1 MW of new leases in 2012.  Also, on January 1, 2013 we placed ACC6 Phase II into service 100% leased."

Fourth Quarter 2012 Results

For the quarter ended December 31, 2012, the company reported earnings of $0.11 per share compared to $0.12 per share for the fourth quarter of 2011. Revenues increased 16%, or $11.6 million, to $86.0 million for the fourth quarter of 2012 over the fourth quarter of 2011. The increase in revenues is primarily due to new leases commencing.

FFO for the quarter ended December 31, 2012 was $0.38 per share compared to $0.37 per share for the fourth quarter of 2011.  The increase of $0.01 per share from the prior year's quarter is primarily due to:

  • A positive impact of $0.09 per share from higher operating income excluding depreciation and the reserve and charge discussed below ($0.13 per share from new leases commencing offset by $0.04 per share of unreimbursed property operating expenses, real estate taxes and insurance related to the properties that are not fully leased).
  • A negative impact of $0.04 per share included in other expenses from a receivables reserve set up for one tenant that restructured its lease obligations with us. The tenant leases approximately 7.45 MW in four different locations and the company has agreed to relinquish a total of approximately 16%, or 1.2 MW in aggregate, at two locations, Ashburn and Reston, Virginia.  Also, under this restructuring, this tenant's outstanding accounts receivable and deferred rent receivable related to the returned space has been converted into a note receivable, the terms of which require the payment of principal and interest over the next four years.  Additionally, under this restructuring this tenant has the right to defer up to two-thirds of base rent due over the next 18 months at NJ1 in Piscataway, New Jersey.  If deferred, the base rent would be added to the note. 
  • A negative impact of $0.03 per share from higher financing charges ($0.02 per share of lower capitalized interest expense and $0.01 per share of additional preferred dividends).
  • A negative impact of $0.01 per share included in other expenses for pursuit costs for deals that are no longer probable.

Year Ended December 31, 2012 Results

For the year ended December 31, 2012, the company reported earnings of $0.41 per share compared to $0.71 per share for the year ago period.  The decrease of $0.30 in earnings per share is primarily due to lower capitalized interest, higher preferred dividends and the reserve and charge noted above.  Revenues increased 16%, or $45.0 million, to $332.4 million for the year ended December 31, 2012 over the prior year.  The increase in revenues is primarily due to new leases commencing.

FFO for the year ended December 31, 2012 was $1.48 per share compared to $1.61 per share for the prior year.  The decrease of $0.13 per share is primarily due to:

  • A positive impact of $0.26 per share from higher operating income excluding depreciation and the reserve and charge discussed above ($0.42 per share from new leases commencing offset by $0.16 per share of unreimbursed property operating expenses, real estate taxes and insurance related to the properties that are not fully leased).
  • A negative impact of $0.34 per share from higher financing charges ($0.26 per share of lower capitalized interest expense and $0.08 per share of additional preferred dividends).
  • A negative impact of $0.05 per share from the receivables reserve and deal pursuit costs noted above.

Portfolio Update

During the fourth quarter 2012, the company:

  • Signed five leases with a weighted average lease term of 6.9 years totaling 13.62 MW and 73,582 raised square feet.
    • Two leases were at CH1 totaling 3.03 MW and 21,332 raised square feet.  One lease commenced in the fourth quarter of 2012, a portion of the other lease commenced in the first quarter of 2013 and the remaining portion of this lease totaling 1.30 MW is expected to commence in equal parts in the third and fourth quarters of 2013. 
    • One lease was at ACC6 Phase II totaling 4.33 MW and 22,000 raised square feet.  This lease is expected to commence in total prior to the end of the first quarter of 2013.
    • One lease was at SC1 totaling 5.69 MW and 27,500 raised square feet.  A portion of this lease commenced in the first quarter of 2013 and the remaining portion totaling 1.14 MW is expected to commence in the fourth quarter of 2013.
    • One lease was at NJ1 totaling 0.57 MW and 2,750 raised square feet.  This lease commenced in the fourth quarter of 2012.
  • Signed one lease extension for 8.2 years at ACC3 totaling 13.90 MW and 80,000 raised square feet.

In 2012, the company:

  • Signed 14 leases with a weighted average lease term of 9.9 years totaling 41.48 MW and 213,295 raised square feet that are expected to generate approximately $43.8 million of annualized GAAP base rent revenue.  This compares to 14 leases, 24.92 MW and 133,716 raised square feet for the prior year.
  • Commenced 15 leases totaling 31.89 MW and 168,355 raised square feet totaling approximately $39.6 million of annualized GAAP base rent revenue.  This compares to 11 leases, 13.46 MW and 65,093 raised square feet for the prior year.
  • Signed four lease extensions with three tenants 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.

Subsequent to year-end, the company commenced portions of six leases totaling 13.65 MW and 71,069 raised square feet.

Balance Sheet and Liquidity

The company announced in November a twelve-month common stock repurchase program of up to $80 million. To date, the company has not elected to utilize this program.

At year-end, the company had $23.6 million of cash available on its balance sheet and $207 million of available capacity under its revolving credit facility.

First Quarter and Full Year 2013 Guidance

The company has established an FFO guidance range of $0.38 to $0.40 per share for the first quarter of 2013.  The $0.01 per share difference between the company's fourth quarter 2012 FFO of $0.38 per share and the midpoint of the first quarter guidance range is primarily due to new leases commencing.

The company has established an FFO guidance range of $1.76 to $1.90 per share for the full year 2013. The assumptions underlying this guidance can be found on page 15 of this press release. The $0.35 per share, or 24%, increase between the company's full year 2012 FFO of $1.48 and the expected mid-point of the company's guidance range for full year 2013 is primarily due to:

  • A net positive impact of $0.39 per share from higher operating income excluding depreciation.  This includes
    • A positive impact of $0.35 per share primarily from new leases commencing in 2012 and 2013,
    • A positive impact of $0.04 per share related to lower unreimbursed property operating expenses, real estate taxes and insurance, and
  • A negative impact of $0.04 per share from lower capitalized interest expense.

Fourth Quarter 2012 Conference Call and Webcast Information

The company will host a conference call to discuss these results today, Wednesday, February 6, 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 10023754.  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. (NYSE: 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 first 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, 2011 and its quarterly reports on Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012 and September 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.

 

DUPONT FABROS TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except share and per share data)

Three months ended December 31,

Year ended December 31,

2012

2011

2012

2011

(unaudited)

(unaudited)

Revenues:

Base rent

$              57,461

$              49,783

$            223,045

$            193,908

Recoveries from tenants

27,241

24,194

104,814

91,246

Other revenues

1,257

425

4,586

2,287

Total revenues

85,959

74,402

332,445

287,441

Expenses:

Property operating costs

24,286

21,979

94,646

80,351

Real estate taxes and insurance

3,474

1,928

12,689

6,392

Depreciation and amortization

22,356

20,470

89,241

75,070

General and administrative

3,310

3,439

17,024

15,955

Other expenses

4,773

179

6,919

1,137

Total expenses

58,199

47,995

220,519

178,905

Operating income

27,760

26,407

111,926

108,536

Interest income

56

12

168

486

Interest:

Expense incurred

(11,294 )

(9,990 )

(47,765 )

(27,096 )

Amortization of deferred financing costs

(819 )

(810 )

(3,496 )

(2,446 )

Net income

15,703

15,619

60,833

79,480

Net income attributable to redeemable noncontrolling       interests – operating partnership

(2,046 )

(2,302 )

(7,803 )

(14,505 )

Net income attributable to controlling interests

13,657

13,317

53,030

64,975

Preferred stock dividends

(6,812 )

(5,573 )

(27,053 )

(20,874 )

Net income attributable to common shares

$                6,845

$                7,744

$              25,977

$              44,101

Earnings per share – basic:

Net income attributable to common shares

$                  0.11

$                  0.12

$                  0.41

$                  0.71

Weighted average common shares outstanding

63,000,839

62,217,754

62,866,189

61,241,520

Earnings per share – diluted:

Net income attributable to common shares

$                  0.11

$                  0.12

$                  0.41

$                  0.71

Weighted average common shares outstanding

63,833,651

63,242,288

63,754,006

62,303,905

Dividends declared per common share

$                  0.20

$                  0.12

$                  0.62

$                  0.48

 

 

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 December 31,

Year ended December 31,

2012

2011

2012

2011

Net income

$              15,703

$              15,619

$              60,833

$              79,480

Depreciation and amortization

22,356

20,470

89,241

75,070

Less:  Non real estate depreciation and amortization     

(238 )

(262 )

(1,023 )

(862 )

FFO

37,821

35,827

149,051

153,688

Preferred stock dividends

(6,812 )

(5,573 )

(27,053 )

(20,874 )

FFO attributable to common shares and OP units

$              31,009

$              30,254

$            121,998

$            132,814

Straight-line revenues, net of reserve

(1,143 )

(4,577 )

(17,967 )

(34,095 )

Amortization of lease contracts above and below        market value

(599 )

(974 )

(3,194 )

(2,874 )

Compensation paid with Company common shares

1,647

1,517

6,980

5,950

Non real estate depreciation and amortization

238

262

1,023

862

Amortization of deferred financing costs

819

810

3,496

2,446

Improvements to real estate

(1,093 )

(674 )

(4,426 )

(3,821 )

Capitalized leasing commissions

(362 )

(82 )

(1,143 )

(1,713 )

AFFO

$              30,516

$              26,536

$            106,767

$              99,569

FFO attributable to common shares and OP units       per share - diluted

$                  0.38

$                  0.37

$                  1.48

$                  1.61

AFFO per share - diluted

$                  0.37

$                  0.32

$                  1.29

$                  1.21

Weighted average common shares and OP units       outstanding - diluted

82,662,537

82,497,118

82,638,775

82,449,427

(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.

 

 

DUPONT FABROS TECHNOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands except share data)

December 31, 2012

December 31, 2011

ASSETS

Income producing property:

Land

$           73,197

$           63,393

Buildings and improvements

2,315,499

2,123,377

2,388,696

2,186,770

Less: accumulated depreciation

(325,740 )

(242,245 )

Net income producing property

2,062,956

1,944,525

Construction in progress and land held for development

218,934

320,611

Net real estate

2,281,890

2,265,136

Cash and cash equivalents

23,578

14,402

Restricted cash

174

Rents and other receivables, net

3,840

1,388

Deferred rent, net

144,829

126,862

Lease contracts above market value, net

10,255

11,352

Deferred costs, net

35,670

40,349

Prepaid expenses and other assets

30,797

31,708

Total assets

$      2,530,859

$      2,491,371

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Line of credit

$           18,000

$           20,000

Mortgage notes payable

139,600

144,800

Unsecured notes payable

550,000

550,000

Accounts payable and accrued liabilities

22,280

22,955

Construction costs payable

6,334

20,300

Accrued interest payable

2,601

2,528

Dividend and distribution payable

22,177

14,543

Lease contracts below market value, net

14,022

18,313

Prepaid rents and other liabilities

35,524

29,058

Total liabilities

810,538

822,497

Redeemable noncontrolling interests—operating partnership

453,889

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 December 31, 2012 and 2011

185,000

185,000

Series B cumulative redeemable perpetual preferred stock, 6,650,000 issued and                           outstanding at December 31, 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, 63,340,929 shares                 issued and outstanding at December 31, 2012 and 62,914,987 shares issued and                outstanding at December 31, 2011

63

63

Additional paid in capital

915,119

927,902

Retained earnings (accumulated deficit)

(7,080 )

Total stockholders' equity

1,266,432

1,207,135

Total liabilities and stockholders' equity

$      2,530,859

$      2,491,371

 

 

DUPONT FABROS TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Year ended December 31,

2012

2011

Cash flow from operating activities

Net income

$        60,833

$        79,480

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization

89,241

75,070

Straight line rent, net of reserve

(17,967)

(34,095)

Amortization of deferred financing costs

3,496

2,446

Amortization of lease contracts above and below market value

(3,194)

(2,874)

Compensation paid with Company common shares

6,980

5,950

Changes in operating assets and liabilities

Restricted cash

174

322

Rents and other receivables

(2,452)

1,839

Deferred costs

(1,278)

(1,773)

Prepaid expenses and other assets

(6,028)

(3,854)

Accounts payable and accrued liabilities

(1,112)

(1,238)

Accrued interest payable

73

(238)

Prepaid rents and other liabilities

3,997

4,081

Net cash provided by operating activities

132,763

125,116

Cash flow from investing activities

Investments in real estate – development

(94,753)

(351,090)

Land acquisition costs

(3,830)

(9,507)

Interest capitalized for real estate under development

(4,434)

(27,024)

Improvements to real estate

(4,426)

(3,821)

Additions to non-real estate property

(57)

(304)

Net cash used in investing activities

(107,500)

(391,746)

Cash flow from financing activities

Issuance of preferred stock, net of offering costs

62,685

97,450

Line of credit:

Proceeds

48,000

20,000

Repayments

(50,000)

Mortgage notes payable:

Repayments

(5,200)

(5,200)

Return of escrowed proceeds

1,104

Exercises of stock options

868

700

Payments of financing costs

(2,109)

(1,338)

Dividends and distributions:

Common shares

(34,112)

(29,338)

Preferred shares

(26,006)

(19,325)

Redeemable noncontrolling interests – operating partnership

(10,213)

(9,971)

Net cash (used in) provided by financing activities

(16,087)

54,082

Net increase (decrease) in cash and cash equivalents

9,176

(212,548)

Cash and cash equivalents, beginning

14,402

226,950

Cash and cash equivalents, ending

$        23,578

$        14,402

Supplemental information:

Cash paid for interest

$        52,127

$        54,358

Deferred financing costs capitalized for real estate under development

$             277

$          1,387

Construction costs payable capitalized for real estate under development

$          6,334

$        20,300

Redemption of operating partnership units

$          6,800

$        66,500

Adjustments to redeemable noncontrolling interests – operating partnership

$          2,830

$        56,535

 

 

DUPONT FABROS TECHNOLOGY, INC.

Operating Properties

As of December 31, 2012

 Property

Property Location

Year Built/ Renovated

Gross Building Area (2)

Raised Square Feet (2)

Critical Load MW (3)

% Leased (4)

%

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 (6)

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

100%

100%

NJ1 Phase I 

Piscataway, NJ

2010

180,000

88,000

18.2

39%

39%

VA3 (6)

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

2,023,000

993,000

169.1

90%

90%

Completed not Stabilized 

CH1 Phase II (6)

Elk Grove Village, IL

2012

200,000

109,000

18.2

100%

71%

SC1 Phase I (7)

Santa Clara, CA

2011

180,000

88,000

18.2

75%

44%

Subtotal— non-stabilized

380,000

197,000

36.4

88%

58%

Total Operating Properties

2,403,000

1,190,000

205.5

90%

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)

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 184.1 MW. Leases executed as of December 31, 2012 represent $238 million of base rent on a GAAP basis over the next twelve months. Additionally, on a cash basis, leases executed as of December 31, 2012 represent $235 million of base rent 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.

(6)

In January 2013, leases at ACC5 and VA3 were restructured with a tenant and 0.55 MW was returned at ACC5 and 0.65 MW was returned at VA3.  As of February 5, 2013, ACC5 is 98% leased and commenced and VA3 is 51% leased and commenced.  Additionally, an unrelated tenant at CH1 Phase II exercised their option to return 1.30 MW before the lease had commenced.  As of February 5, 2013, CH1 Phase II is 93% leased and 86% commenced.

(7)

As of February 5, 2013, SC1 Phase I is 69% commenced.

 

 

DUPONT FABROS TECHNOLOGY, INC.

Lease Expirations

As of December 31, 2012

 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

0.8%

1,567

0.9%

1.0%

2014

6

35

3.6%

6,287

3.6%

3.9%

2015

4

70

7.1%

13,812

8.0%

7.3%

2016

4

32

3.3%

4,686

2.7%

2.7%

2017

10

69

7.0%

12,039

6.9%

6.6%

2018

11

121

12.3%

24,944

14.4%

14.5%

2019

11

168

17.1%

31,035

17.9%

16.3%

2020

9

96

9.8%

15,196

8.8%

8.8%

2021

7

130

13.2%

21,669

12.5%

13.4%

2022

6

75

7.6%

12,812

7.4%

7.9%

After 2022

12

180

18.2%

29,185

16.9%

17.6%

Total

82

984

100%

173,232

100%

100%

(1)

Represents 33 tenants with 82 lease expiration dates. Top three tenants represent 48% 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 173.2 MW as of December 31, 2012.

(4)

One lease has a rolling option to terminate on six months' notice and has a scheduled maturity on September 30, 2013 with no notice received as of today.  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. 

 

 

DUPONT FABROS TECHNOLOGY, INC.

Development Projects

As of December 31, 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 (6)

Ashburn, VA

131,000

65,000

13.0

$110,000

$           97,819

100%

Future Development Projects/Phases

SC1 Phase II

Santa Clara, CA

180,000

88,000

18.2

61,669

NJ1 Phase II

Piscataway, NJ

180,000

88,000

18.2

39,212

360,000

176,000

36.4

100,881

Land Held for Development

ACC7 Phase I /II

Ashburn, VA

360,000

176,000

36.4

10,743

ACC8

Ashburn, VA

100,000

50,000

10.4

3,658

SC2 Phase I/II

Santa Clara, CA

300,000

171,000

36.4

5,833

760,000

397,000

83.2

20,234

Total

1,251,000

638,000

132.6

$         218,934

 

(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.

(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 December 31, 2012.  Future Phase II development projects include only land, shell, underground work and capitalized interest through Phase I opening.

(6)

ACC6 Phase II was placed into service on January 1, 2013 and 50% of the leases commenced immediately. One-third of the remaining leases is expected to commence later in the first quarter of 2013 with the remaining leases expected to commence in the third quarter of 2013.

 

 

DUPONT FABROS TECHNOLOGY, INC.

Debt Summary as of December 31, 2012

($ in thousands)

Amounts

 

% of Total

 

Rates

 

Maturities (years)

Secured

$          139,600

20 %

3.2 %

1.9

Unsecured

568,000

80 %

8.3 %

4.2

Total

$          707,600

100 %

7.3 %

3.8

Fixed Rate Debt:

Unsecured Notes

$          550,000

78 %

8.5 %

4.3

Fixed Rate Debt

550,000

78 %

8.5 %

4.3

Floating Rate Debt:

Unsecured Credit Facility

18,000

2 %

2.1 %

3.2

ACC5 Term Loan

139,600

20 %

3.2 %

1.9

Floating Rate Debt

157,600

22 %

3.1 %

2.1

Total

$          707,600

100 %

7.3 %

3.8

Note: 

The Company capitalized interest and deferred financing cost amortization of $1.9 million and $4.7 million during the three and twelve months ended December 31, 2012, respectively.

 

Debt Maturity as of December 31, 2012

($ in thousands)

Year

Fixed Rate

Floating Rate

Total

% of Total

Rates

2013

$             —

$     5,200

$          5,200

0.7 %

3.2 %

2014

134,400(2)

134,400

19.0 %

3.2 %

2015

125,000 (1)

125,000

17.7 %

8.5 %

2016

125,000 (1)

18,000(3)

143,000

20.2 %

7.7 %

2017

300,000 (1)

300,000

42.4 %

8.5 %

Total

$      550,000

$ 157,600

$      707,600

100 %

7.3 %

(1)

The Unsecured Notes have mandatory amortization payments due December 15 of each respective year.

(2)

Remaining principal payment on the ACC5 Term Loan due on December 2, 2014 with no extension option.

(3)

The Unsecured Credit Facility matures on May 6, 2016 with a one-year extension option.

 

 

DUPONT FABROS TECHNOLOGY, INC.

Selected Unsecured Debt Metrics

    12/31/12

    12/31/11

Interest Coverage Ratio (not less than 2.0)

4.0

3.5

Total Debt to Gross Asset Value (not to exceed 60%)

24.9%

26.3%

Secured Debt to Total Assets (not to exceed 40%)

4.9%

5.3%

Total Unsecured Assets to Unsecured Debt (not less than 150%)

334.3%

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 December 31, 2012

(in thousands except per share data)

Line of Credit

$           18,000

Mortgage Notes Payable

139,600

Unsecured Notes

550,000

Total Debt

707,600

23.3 %

Common Shares

77 %

63,341

Operating Partnership ("OP") Units

23 %

18,787

Total Shares and Units

100 %

82,128

Common Share Price at December 31, 2012 

$       24.16

Common Share and OP Unit Capitalization

 

$       1,984,212

Preferred Stock ($25 per share liquidation preference)

351,250

Total Equity

2,335,462

76.7 %

Total Market Capitalization 

$       3,043,062

100.0 %

 

 

DUPONT FABROS TECHNOLOGY, INC.

Common Share and OP Unit

Weighted Average Amounts Outstanding

 

Q4 2012

 

Q4 2011

YTD

Q4 2012

YTD

Q4 2011

Weighted Average Amounts

Outstanding for EPS Purposes:

Common Shares – basic

63,000,839

62,217,754

62,866,189

61,241,520

Shares issued from assumed conversion of:

- Restricted Shares

115,880

264,933

126,534

267,593

- Stock Options

716,932

759,601

761,283

794,792

- Performance Units

Total Common Shares - diluted

63,833,651

63,242,288

63,754,006

62,303,905

Weighted Average Amounts Outstanding       for FFO and AFFO Purposes:

Common Shares – basic

63,000,839

62,217,754

62,866,189

61,241,520

OP Units – basic

18,828,886

19,254,830

18,884,769

20,145,522

Total Common Shares and OP Units

81,829,725

81,472,584

81,750,958

81,387,042

Shares and OP Units issued from

    assumed conversion of:

- Restricted Shares

115,880

264,933

126,534

267,593

- Stock Options

716,932

759,601

761,283

794,792

- Performance Units

Total Common Shares and Units - diluted

82,662,537

82,497,118

82,638,775

82,449,427

Period Ending Amounts Outstanding:

 

Common Shares

63,340,929

OP Units

18,786,806

Total Common Shares and Units

82,127,735

 

 

DUPONT FABROS TECHNOLOGY, INC.

2013 Guidance

The earnings guidance/projections provided below are based on current expectations and are forward-looking.

Expected Q1 2013

per share

Expected 2013

per share

Net income per common share and unit – diluted

   $0.10 to $0.12

  $0.62 to $0.76

Depreciation and amortization, net

0.28

1.14

FFO per share – diluted (1)

   $0.38 to $0.40

  $1.76 to $1.90

 

2013 Debt Assumptions

Weighted average debt outstanding

        $690.0 million

Weighted average interest rate

7.50%

Total interest costs

         $51.8 million

Amortization of deferred financing costs

            3.7 million

      Interest expense capitalized (2)

            (1.8) million

      Deferred financing costs amortization capitalized (2)

            (0.1) million

Total interest expense after capitalization

         $53.6 million

2013 Other Guidance Assumptions

Total revenues

         $365 to $385 million

Base rent (included in total revenues)

          $240 to $255 million

Straight-line revenues (included in base rent)

         $7 to $15 million

General and administrative expense

         $18 million

Investments in real estate – development (2)

         $65 million

Improvements to real estate excluding development

         $6 million

Preferred stock dividends

        $27 million

Annualized common stock dividend

           $0.80 per share

Weighted average common shares and OP units - diluted

           83 million

Common share repurchase

         No amounts budgeted

Acquisition of income producing properties

         No amounts budgeted

(1)

For information regarding FFO, see "Reconciliations of Net Income to FFO and AFFO" on page 6 of this earnings release.

(2)

Represents one development start mid-year. 

 

SOURCE DuPont Fabros Technology, Inc.



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