DuPont Fabros Technology, Inc. Reports Fourth Quarter 2013 Results Revenues increase 16%; Normalized FFO per share increases 50%

2014 Guidance provided

WASHINGTON, Jan. 30, 2014 /PRNewswire/ -- DuPont Fabros Technology, Inc. (NYSE: DFT) is reporting results for the quarter ended December 31, 2013.  All per share results are reported on a fully diluted basis.

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

Highlights

  • As of December 31, 2013, our operating portfolio was stabilized at 94% leased and commenced.
  • Quarterly Highlights:
    • Normalized Funds from Operations ("Normalized FFO") of $0.57 per share representing a 50% increase over the prior year quarter and a 12% increase sequentially.
    • Adjusted Funds from Operations ("AFFO") per share of $0.56 representing a 51% increase over the prior year quarter and an 8% increase sequentially. 
    • Commenced one lease totaling 1.14 megawatts ("MW") and 5,500 computer room square feet.
    • Renewed two leases scheduled to expire in 2014, each for five years, totaling 1.17 MW and 9,760 computer room square feet.
    • Repaid the remaining 24% of the $550 million 8.5% Senior Notes due 2017.
    • Exercised the accordion on the unsecured term loan, increasing its total capacity from $195 million to $250 million.
  • Subsequent to the Fourth Quarter 2013:
    • Declared first quarter 2014 dividend of $0.35 per share, an increase of 40% over the prior quarter. 

Hossein Fateh, President and Chief Executive Officer, said, "DFT enters 2014 with a strong balance sheet poised for new growth.  We had record lease commencements of 33 megawatts in 2013 which resulted in 32% growth in Normalized FFO per share as compared to 2012.  We continue to focus on the lease up of our existing available inventory and our two new developments to fuel our future growth."

Fourth Quarter 2013 Results

For the quarter ended December 31, 2013, earnings were $0.18 per share compared to earnings of $0.11 per share for the fourth quarter of 2012.  The $0.18 per share of earnings includes an $0.11 per share loss on early extinguishment of debt related to the call of the remaining 8.5% Senior Notes due 2017.  Excluding the $0.11 per share loss on early extinguishment of debt, earnings were $0.28 per share, an increase of 155% over the prior year quarter.  Revenues increased 16%, or $13.5 million, to $99.4 million for the fourth quarter of 2013 over the fourth quarter of 2012.  The increase in revenues is primarily due to new leases commencing. 

Normalized FFO is FFO with the loss on early extinguishment of debt added back.  Normalized FFO for the quarter ended December 31, 2013 was $0.57 per share compared to $0.38 per share for the fourth quarter of 2012.  The increase of $0.19 per share, or 50%, from the prior year quarter is primarily due to the following:

  • Higher operating income excluding depreciation of $0.16 per share and
  • Lower interest expense of $0.03 per share from lower interest rates and higher capitalized interest.

Full Year 2013 Results

For the year ended December 31, 2013, earnings were $0.32 per share compared to $0.41 per share for 2012.  Earnings of $0.32 per share includes losses on the early extinguishment of debt of $0.50 per share from our refinancing of the 8.5% Senior Notes Due 2017 and the ACC5 Term Loan.  Excluding the $0.50 per share loss on early extinguishment of debt, earnings were $0.82 per share, an increase of 100% over 2012.  Revenues increased 13%, or $42.7 million, to $375.1 million for 2013 versus 2012.  The increase in revenues is primarily due to new leases commencing.

Normalized FFO for the year ended December 31, 2013 was $1.96 per share, compared to $1.48 per share for 2012.  The increase of $0.48 per share, or 32%, from 2012 is primarily due to higher operating income excluding depreciation.

Portfolio Update

During the fourth quarter 2013, we:

  • Renewed one lease at VA3 for five years totaling 0.60 MW and 7,060 computer room square feet and one lease for five years at ACC5 totaling 0.57 MW and 2,700 computer room square feet. 

In 2013, we:

  • Signed five leases and a pre-lease with a weighted average lease term of 5.5 years totaling 15.71 MW and 106,130 computer room square feet that are expected to generate approximately $16.0 million of annualized GAAP base rent revenue which includes $1.0 million of management fees. 
  • Commenced 14 leases totaling 33.31 MW and 201,225 computer room square feet. 
  • Renewed five leases by a weighted average of 3.8 years totaling 5.72 MW and 31,460 computer room square feet.

Development Update

We are currently under development at ACC7 Phase I (11.9 MW) and SC1 Phase IIA (9.1 MW).  Both of these developments are on time and on budget, with completion expected in mid-2014.  SC1 Phase IIA is 50% pre-leased.

Balance Sheet and Liquidity

In September 2013, we issued $600 million of Senior Notes due 2021 at par bearing an interest rate of 5.875%.  The proceeds from this issuance were used to retire our 8.5% Senior Notes due 2017.  Bondholders tendered $418.1 million of these notes outstanding and we settled this tender on September 24, 2013 for $443.4 million which included a premium of $25.3 million.  On October 24, 2013, we redeemed the remaining bonds for $139.0 million which included a premium of $7.1 million.

In September 2013, we entered into a $195 million senior unsecured term loan.  This loan bears interest at LIBOR plus 1.75% and matures on February 15, 2019 with no extension option.  In October 2013, we exercised the accordion feature of this loan which increased its total capacity by $55 million to $250 million.  This loan includes a delayed draw feature, and as of December 31, 2013 we had drawn $154.0 million of the total $250 million. The remaining $96.0 million was drawn in January 2014.

In September 2013, the Company's Board of Directors approved a new common stock repurchase program that commenced in November 2013 and expires on December 31, 2014.  The new program allows purchases of up to $142.2 million.  In the fourth quarter of 2013, we did not repurchase any shares.

As of December 31, 2013, we had $39 million of cash, $96 million of available capacity on our unsecured term loan and $400 million of available capacity under our revolving credit facility.

Dividend

Yesterday, we announced that our first quarter 2014 dividend is $0.35 per share which is a 40% increase from the fourth quarter 2013 dividend of $0.25 per share.  The increase is due to a forecasted increase in taxable income in 2014 as the Company's policy is to pay out 100% of taxable income as a dividend.  Jeff Foster, Chief Financial Officer, said, "We are pleased to announce our fourth dividend increase in the last two years. The 2014 annualized dividend of $1.40 per share represents an estimated Normalized FFO payout ratio of 60 percent at the midpoint of our 2014 guidance."  The Normalized FFO payout ratio in 2013 was 48% and the AFFO payout ratio was 51%.

First Quarter and Full Year 2014 Guidance

Our Normalized FFO guidance range is $0.56 to $0.58 per share for the first quarter of 2014.  The midpoint of this range is equal to our fourth quarter 2013 Normalized FFO per share of $0.57.

Our 2014 Normalized FFO guidance range is $2.28 to $2.38 per share and the lower end of this range assumes no additional leases will be executed through the end of this calendar year. The assumptions underlying this guidance can be found on page 15 of this earnings release.  The $0.37 per share, or 19%, increase between our full year 2013 Normalized FFO per share of $1.96 and the mid-point of the 2014 guidance range is primarily due to:

  • Higher operating income excluding depreciation of $0.25 per share primarily from new leases commencing in 2013 and 2014 and
  • Lower interest expense of $0.12 per share of which $0.07 per share is due to higher capitalized interest and the remainder is due to decreasing the average interest rate of our debt by 185 basis points in 2014, partially offset by an increase in our average outstanding debt of $198 million

Fourth Quarter 2013 Conference Call and Webcast Information

We will host a conference call to discuss these results today, Thursday, January 30, 2014 at 1:00 p.m. ET. To access the live call, please visit the Investor Relations section of our website at www.dft.com or dial 1-877-870-4263 (domestic) or 1-412-317-0790 (international).  A replay will be available for seven days by dialing 1-877-344-7529 (domestic) or 1-412-317-0088 (international) using passcode 10039043.  The webcast will be archived on our 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 our control. We face many risks that could cause our actual performance to differ materially from the results contemplated by our forward-looking statements, including, without limitation, the risk that the assumptions underlying our full year and first quarter 2014 guidance are not realized, the risks related to the leasing of available space to third-party customers, including delays in executing new leases and failure to negotiate leases on terms that will enable us to achieve our expected returns, risks related to the collection of accounts and notes receivable, the risk that we 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 we will not declare and pay dividends as anticipated for 2014 and the risk that we may not be able to maintain our qualification as a REIT for federal tax purposes.  The periodic reports that we file with the Securities and Exchange Commission, including the annual report on Form 10-K for the year ended December 31, 2012 and the quarterly reports on Form 10-Q for the quarters ended September 30, 2013, June 30, 2013 and March 31, 2013, contain detailed descriptions of these and many other risks to which we are subject.  These reports are available on our website at www.dft.com.  Because of the risks described above and other unknown risks, our actual results, performance or achievements may differ materially from the results, performance or achievements contemplated by our forward-looking statements.  The information set forth in this news release represents our expectations and intentions only as of the date of this press release.  We assume 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,


2013


2012


2013


2012









Revenues:








Base rent (1)

$

68,904



$

61,000



$

265,695



$

236,810


Recoveries from tenants (1)

28,515



23,702



104,271



91,049


Other revenues

2,025



1,257



5,143



4,586


Total revenues

99,444



85,959



375,109



332,445


Expenses:








Property operating costs

28,124



24,286



103,522



94,646


Real estate taxes and insurance

3,436



3,474



14,380



12,689


Depreciation and amortization

23,285



22,356



93,058



89,241


General and administrative

3,715



3,310



16,261



17,024


Other expenses

1,419



4,773



3,650



6,919


Total expenses

59,979



58,199



230,871



220,519


Operating income

39,465



27,760



144,238



111,926


Interest income

52



56



137



168


Interest:








Expense incurred

(8,953)



(11,294)



(46,443)



(47,765)


Amortization of deferred financing costs

(807)



(819)



(3,349)



(3,496)


Loss on early extinguishment of debt

(8,668)





(40,978)




Net income

21,089



15,703



53,605



60,833


Net income attributable to redeemable noncontrolling interests – operating partnership

(2,817)



(2,046)



(5,214)



(7,803)


Net income attributable to controlling interests

18,272



13,657



48,391



53,030


Preferred stock dividends

(6,812)



(6,812)



(27,245)



(27,053)


Net income attributable to common shares

$

11,460



$

6,845



$

21,146



$

25,977


Earnings per share – basic:








Net income attributable to common shares

$

0.18



$

0.11



$

0.32



$

0.41


Weighted average common shares outstanding

64,685,508



63,000,839



64,645,316



62,866,189


Earnings per share – diluted:








Net income attributable to common shares

$

0.18



$

0.11



$

0.32



$

0.41


Weighted average common shares outstanding

65,439,427



63,833,651



65,474,039



63,754,006


Dividends declared per common share

$

0.25



$

0.20



$

0.95



$

0.62


 

(1)  Effective this quarter, we reclassified the management fee that we collect from customers from "Recoveries from tenants" to "Base rent."  All periods presented were conformed to this change.  We believe that this change more accurately reflects the true nature of our management fee which is equivalent to additional rent for the Company with no offsetting direct expenses.  We continue to recover all of our property management expenses under our triple net lease structure and these recoveries are still reported in "Recoveries from tenants."

 

 

DUPONT FABROS TECHNOLOGY, INC.

RECONCILIATIONS OF NET INCOME TO FFO, NORMALIZED FFO AND AFFO (1)

(unaudited and in thousands except share and per share data)






Three months ended

December 31,


Year ended

December 31,


2013


2012


2013


2012

Net income

$

21,089



$

15,703



$

53,605



$

60,833


Depreciation and amortization

23,285



22,356



93,058



89,241


Less: Non real estate depreciation and amortization

(186)



(238)



(875)



(1,023)


FFO

44,188



37,821



145,788



149,051


Preferred stock dividends

(6,812)



(6,812)



(27,245)



(27,053)


FFO attributable to common shares and OP units

$

37,376



$

31,009



$

118,543



$

121,998


Loss on early extinguishment of debt

8,668





40,978




Normalized FFO

46,044



31,009



159,521



121,998


Straight-line revenues, net of reserve

(1,597)



(1,143)



(6,920)



(17,967)


Amortization of lease contracts above and below market value

(598)



(599)



(2,391)



(3,194)


Compensation paid with Company common shares

1,012



1,647



6,088



6,980


Non real estate depreciation and amortization

186



238



875



1,023


Amortization of deferred financing costs

807



819



3,349



3,496


Improvements to real estate

(722)



(1,093)



(5,757)



(4,426)


Capitalized leasing commissions

(52)



(362)



(2,134)



(1,143)


AFFO

$

45,080



$

30,516



$

152,631



$

106,767


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

$

0.46



$

0.38



$

1.46



$

1.48


Normalized FFO per share - diluted

$

0.57



$

0.38



$

1.96



$

1.48


AFFO per share - diluted

$

0.56



$

0.37



$

1.87



$

1.29


Weighted average common shares and OP units outstanding - diluted

81,197,007



82,662,537



81,409,279



82,638,775


 

(1)  Funds from operations, or FFO, is used by industry analysts and investors as a supplemental operating performance measure for REITs. We calculate 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. We also present 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.

We use 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. We also believe that, as a widely recognized measure of the performance of equity REITs, FFO may be used by investors as a basis to compare our 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 our properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our 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 our FFO. Therefore, we believe that in order to facilitate a clear understanding of our 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 our liquidity, nor is it indicative of funds available to meet our cash needs, including our ability to pay dividends or make distributions.

We present FFO with adjustments to arrive at Normalized FFO.  Normalized FFO is FFO attributable to common shares and units excluding gain or loss on early extinguishment of debt and gain or loss on derivative instruments.   We also present FFO with supplemental adjustments to arrive at Adjusted FFO ("AFFO"). AFFO is Normalized FFO excluding straight-line revenue, compensation paid with Company common shares, below market lease amortization net of above market lease amortization, 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 our 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 our cash needs including our ability to pay dividends. In addition, AFFO may not be comparable to similarly titled measurements employed by other companies. We use 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,
2013


December 31,
2012

ASSETS




Income producing property:




Land

$

75,956



$

73,197


Buildings and improvements

2,420,986



2,315,499



2,496,942



2,388,696


Less: accumulated depreciation

(413,394)



(325,740)


Net income producing property

2,083,548



2,062,956


Construction in progress and land held for development

302,068



218,934


Net real estate

2,385,616



2,281,890


Cash and cash equivalents

38,733



23,578


Rents and other receivables, net

12,674



3,840


Deferred rent, net

150,038



144,829


Lease contracts above market value, net

9,154



10,255


Deferred costs, net

39,866



35,670


Prepaid expenses and other assets

44,507



30,797


Total assets

$

2,680,588



$

2,530,859


LIABILITIES AND STOCKHOLDERS' EQUITY




Liabilities:




Line of credit

$



$

18,000


Mortgage notes payable

115,000



139,600


Unsecured term loan

154,000




Unsecured notes payable

600,000



550,000


Accounts payable and accrued liabilities

23,566



22,280


Construction costs payable

45,444



6,334


Accrued interest payable

9,983



2,601


Dividend and distribution payable

25,971



22,177


Lease contracts below market value, net

10,530



14,022


Prepaid rents and other liabilities

56,576



35,524


Total liabilities

1,041,070



810,538


Redeemable noncontrolling interests – operating partnership

387,244



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 December
                  31, 2013 and 2012

185,000



185,000


Series B cumulative redeemable perpetual preferred
                  stock, 6,650,000 issued and outstanding at December
                  31, 2013 and 2012

166,250



166,250


Common stock, $.001 par value, 250,000,000 shares
          authorized, 65,205,274 shares issued and outstanding at
          December 31, 2013 and 63,340,929 shares issued and
          outstanding at December 31, 2012

65



63


Additional paid in capital

900,959



915,119


Retained earnings




Total stockholders' equity

1,252,274



1,266,432


Total liabilities and stockholders' equity

$

2,680,588



$

2,530,859


 

DUPONT FABROS TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)




Year ended December 31,


2013


2012

Cash flow from operating activities




Net income

$

53,605



$

60,833


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




Depreciation and amortization

93,058



89,241


Loss on early extinguishment of debt

40,978




Straight line rent, net of reserve

(6,920)



(17,967)


Amortization of deferred financing costs

3,349



3,496


Amortization of lease contracts above and below market value

(2,391)



(3,194)


Compensation paid with Company common shares

6,088



6,980


Changes in operating assets and liabilities




Rents and other receivables

(5,900)



(2,452)


Deferred costs

(2,082)



(1,278)


Prepaid expenses and other assets

(14,760)



(5,854)


Accounts payable and accrued liabilities

1,520



(1,112)


Accrued interest payable

7,382



73


Prepaid rents and other liabilities

19,834



3,997


Net cash provided by operating activities

193,761



132,763


Cash flow from investing activities




Investments in real estate – development

(129,332)



(94,753)


Land acquisition costs

(14,186)



(3,830)


Interest capitalized for real estate under development

(3,774)



(4,434)


Improvements to real estate

(5,757)



(4,426)


Additions to non-real estate property

(71)



(57)


Net cash used in investing activities

(153,120)



(107,500)


Cash flow from financing activities




Line of credit:




Proceeds

102,000



48,000


Repayments

(120,000)



(50,000)


Mortgage notes payable:




Proceeds

115,000




Lump sum payoffs

(138,300)




Repayments

(1,300)



(5,200)


Unsecured term loan:




Proceeds

154,000




Unsecured notes payable:




Proceeds

600,000




Repayments

(550,000)




Payments of financing costs

(18,200)



(2,109)


Payments for early extinguishment of debt

(32,544)




Issuance of preferred stock, net of offering costs



62,685


Exercises of stock options

1,711



868


Common stock repurchases

(37,792)




Dividends and distributions:




Common shares

(57,927)



(34,112)


Preferred shares

(27,245)



(26,006)


Redeemable noncontrolling interests – operating partnership

(14,889)



(10,213)


Net cash used in financing activities

(25,486)



(16,087)


Net increase in cash and cash equivalents

15,155



9,176


Cash and cash equivalents, beginning

23,578



14,402


Cash and cash equivalents, ending

$

38,733



$

23,578


Supplemental information:




Cash paid for interest

$

42,835



$

52,127


Deferred financing costs capitalized for real estate under development

$

226



$

277


Construction costs payable capitalized for real estate under development

$

45,444



$

6,334


Redemption of operating partnership units

$

75,600



$

6,800


Adjustments to redeemable noncontrolling interests - operating partnership

$

18,791



$

2,830






 

DUPONT FABROS TECHNOLOGY, INC.


Operating Properties

As of January 1, 2014
















Property


Property Location


Year Built/
Renovated


Gross
Building
Area (2)


Computer
Room
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


Ashburn, VA


2009-2010


360,000



176,000



36.4



98

%


98

%

ACC6


Ashburn, VA


2011-2013


262,000



130,000



26.0



100

%


100

%

CH1


Elk Grove Village, IL


2008-2012


485,000



231,000



36.4



100

%


100

%

NJ1 Phase I


Piscataway, NJ


2010


180,000



88,000



18.2



52

%


52

%

SC1 Phase I


Santa Clara, CA


2011


180,000



88,000



18.2



100

%


100

%

VA3


Reston, VA


2003


256,000



147,000



13.0



71

%


71

%

VA4


Bristow, VA


2005


230,000



90,000



9.6



100

%


100

%

Total Operating Properties




2,534,000



1,255,000



218.5



94

%


94

%

(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 computer room square footage (the portion of gross building area where our customers' computer servers are located), common areas, areas controlled by us (such as the mechanical, telecommunications and utility rooms) and, in some facilities, individual office and storage space leased on an as available basis to our customers.

(3)      Critical load (also referred to as IT load or load used by customers' servers or related equipment) is the power available for exclusive use by customers 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 205.3 MW. Leases executed as of January 1, 2014 represent $275 million of base rent on a GAAP basis and $283 million of base rent on a cash basis over the next twelve months. Both amounts include $17 million of revenue from management fees 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.

 

DUPONT FABROS TECHNOLOGY, INC.

Lease Expirations
As of January 1, 2014

The following table sets forth a summary schedule of lease expirations at our operating properties for each of the ten calendar years beginning with 2014. The information set forth in the table below assumes that customers exercise no renewal options and takes into account customers' early termination options in determining the life of their leases under GAAP.

 

Year of Lease Expiration


Number
of Leases
Expiring (1)


Computer
Room Square Feet
of Expiring
Commenced Leases
(in thousands) 
(2)


% of Leased
Computer
Room Square
Feet


Total kW
of Expiring
Commenced
Leases (2)


% of
Leased kW


% of
Annualized
Base Rent (3)

2014


2



8



0.7

%


1,705



0.8

%


1.1

%

2015


4



70



6.0

%


13,812



6.7

%


6.7

%

2016


4



32



2.7

%


4,686



2.3

%


2.4

%

2017


13



96



8.2

%


17,619



8.6

%


8.7

%

2018


19



215



18.3

%


39,298



19.1

%


18.4

%

2019


13



171



14.5

%


31,337



15.3

%


14.8

%

2020


10



106



9.0

%


16,496



8.0

%


8.7

%

2021


9



159



13.5

%


27,682



13.5

%


13.8

%

2022


6



75



6.4

%


12,812



6.1

%


7.2

%

2023


4



48



4.1

%


6,475



3.2

%


2.7

%

After 2023


12



196



16.6

%


33,425



16.4

%


15.5

%

Total


96



1,176



100

%


205,347



100

%


100

%

 

(1)      Represents 33 customers with 96 lease expiration dates. Top four customers represent 62% of annualized base rent.

(2)      Computer room square footage is that portion of gross building area where customers 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 205.3 MW as of January 1, 2014.

 

 

DUPONT FABROS TECHNOLOGY, INC.
















Development Projects

As of December 31, 2013

($ in thousands)


Property


Property Location


Gross
Building
Area (1)


Computer
Room Square
Feet (2)


Critical
Load
MW (3)


Estimated
Total Cost (4)


Construction
in Progress &
Land Held for
Development 
(5)


%
Pre-
leased
















Current Development Projects













SC1 Phase IIA


Santa Clara, CA


90,000



44,000



9.1



$105,000 - $115,000


$

64,972



50

%

ACC7 Phase I


Ashburn, VA


126,000



70,000



11.9



85,000  -  90,000


68,402



0

%





216,000



114,000



21.0



190,000 - 205,000


133,374



















Future Development Projects/Phases













SC1 Phase IIB


Santa Clara, CA


90,000



44,000



9.1



46,000 - 50,000


44,610




ACC7 Phases II to IV


Ashburn, VA


320,000



176,000



29.7



78,000 - 82,000


59,705




NJ1 Phase II


Piscataway, NJ


180,000



88,000



18.2



39,212


39,212








590,000



308,000



57.0



$163,212 - $171,212


143,527




Land Held for Development













ACC8


Ashburn, VA


100,000



50,000



10.4





3,855




CH2


Elk Grove
Village, IL


338,000



167,000



25.6





15,702




SC2


Santa Clara, CA


200,000



125,000



26.0





5,610








638,000



342,000



62.0





25,167




Total




1,444,000



764,000



140.0





$

302,068




 

(1)     Gross building area is the entire building area, including computer room square footage (the portion of gross building area where our customers' computer servers are located), common areas, areas controlled by us (such as the mechanical, telecommunications and utility rooms) and, in some facilities, individual office and storage space leased on an as available basis to our customers.  The amount listed for CH2 is an estimate.

(2)     Computer room square footage is that portion of gross building area where customers locate their computer servers. The amount listed for CH2 is an estimate.

(3)     Critical load (also referred to as IT load or load used by customers' servers or related equipment) is the power available for exclusive use by customers expressed in terms of MW or kW (1 MW is equal to 1,000 kW).  The amount listed for CH2 is an estimate.

(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 other than SC1 Phase IIB include land, shell and underground work through Phase I opening only.  SC1 Phase IIB also includes a portion of the electrical and mechanical infrastructure. 

(5)     Amount capitalized as of December 31, 2013. Future development projects/phases other than SC1 Phase IIB include land, shell and underground work through Phase I opening only.  SC1 Phase IIB also includes a portion of the electrical and mechanical infrastructure. 

 

 DUPONT FABROS TECHNOLOGY, INC.


Debt Summary as of December 31, 2013

($ in thousands)





December 31, 2013



Amounts


% of Total


Rates


Maturities

(years)

Secured

$

115,000



13

%


2.0

%


4.2


Unsecured

754,000



87

%


5.1

%


7.2


Total

$

869,000



100

%


4.7

%


6.8










Fixed Rate Debt:








Unsecured Notes due 2021

$

600,000



69

%


5.9

%


7.7


Fixed Rate Debt

600,000



69

%


5.9

%


7.7


Floating Rate Debt:








Unsecured Credit Facility







2.2


Unsecured Term Loan

154,000



18

%


1.9

%


5.1


ACC3 Term Loan

115,000



13

%


2.0

%


4.2


Floating Rate Debt

269,000



31

%


2.0

%


4.7


Total

$

869,000



100

%


4.7

%


6.8


 

Note:      We capitalized interest and deferred financing cost amortization of $2.4 million and $4.0 million during the three months and year ended December 31, 2013, respectively.

 

 

Debt Maturity as of December 31, 2013

($ in thousands)














Year


Fixed Rate



Floating Rate



Total


% of Total


Rates

2014













2015













2016





3,750


(2)


3,750



0.4

%


2.0

%

2017





8,750


(2)


8,750



1.0

%


2.0

%

2018





102,500


(2)


102,500



11.8

%


2.0

%

2019





154,000


(3)


154,000



17.7

%


1.9

%

2020













2021


600,000


(1)





600,000



69.1

%


5.9

%

Total


$

600,000




$

269,000




$

869,000



100

%


4.7

%






















 

(1)     The 5.875% Unsecured Notes are due September 15, 2021.

(2)     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.

(3)     The $250 million Unsecured Term Loan matures on February 15, 2019 with no extension option.  In January 2014, we drew the remaining $96.0 million

 

 

DUPONT FABROS TECHNOLOGY, INC.


Selected Unsecured Debt Metrics(1)






12/31/13


12/31/12

Interest Coverage Ratio (not less than 2.0)

5.8


4.0





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

28.2%


24.9%





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

3.7%


4.9%





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

364.8%


334.3%

 

(1)   These selected metrics relate to DuPont Fabros Technology, LP's outstanding unsecured notes.  DuPont Fabros Technology, Inc. is the general partner of DuPont Fabros Technology, LP.

 

 

Capital Structure as of December 31, 2013

(in thousands except per share data)


Line of Credit







$




Mortgage Notes Payable







115,000




Unsecured Term Loan







154,000




Unsecured Notes







600,000




Total Debt







869,000



27.0

%

Common Shares

81

%


65,205








Operating Partnership ("OP") Units

19

%


15,672








Total Shares and Units

100

%


80,877








Common Share Price at December 31, 2013



$

24.71








Common Share and OP Unit Capitalization





$

1,998,471






Preferred Stock ($25 per share liquidation preference)





351,250






Total Equity







2,349,721



73.0

%

Total Market Capitalization







$

3,218,721



100.0

%



















 

DUPONT FABROS TECHNOLOGY, INC.


Common Share and OP Unit
Weighted Average Amounts Outstanding



Q4 2013


Q4 2012


2013


2012

Weighted Average Amounts Outstanding for EPS Purposes:
















Common Shares - basic

64,685,508



63,000,839



64,645,316



62,866,189


Shares issued from assumed conversion of:








- Restricted Shares

87,317



115,880



77,999



126,534


- Stock Options

666,602



716,932



723,917



761,283


- Performance Units





26,807




Total Common Shares - diluted

65,439,427



63,833,651



65,474,039



63,754,006










Weighted Average Amounts Outstanding for FFO,

Normalized FFO and AFFO Purposes:
















Common Shares - basic

64,685,508



63,000,839



64,645,316



62,866,189


OP Units - basic

15,757,580



18,828,886



15,935,240



18,884,769


Total Common Shares and OP Units

80,443,088



81,829,725



80,580,556



81,750,958


Shares and OP Units issued from assumed conversion of:








- Restricted Shares

87,317



115,880



77,999



126,534


- Stock Options

666,602



716,932



723,917



761,283


- Performance Units





26,807




Total Common Shares and Units - diluted

81,197,007



82,662,537



81,409,279



82,638,775










Period Ending Amounts Outstanding:








Common Shares

65,205,274








OP Units

15,671,537








Total Common Shares and Units

80,876,811








 

DUPONT FABROS TECHNOLOGY, INC.

2014 Guidance

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

 


Expected Q1 2014

per share


Expected 2014

per share

Net income per common share and unit - diluted

$0.27 to $0.29


$1.09 to $1.19

Depreciation and amortization, net

0.29


1.19





FFO per share - diluted (1)

$0.56 to $0.58


$2.28 to $2.38

Loss on early extinguishment of debt


Normalized FFO per share - diluted (1)

$0.56 to $0.58


$2.28 to $2.38

 

2014 Debt Assumptions



Weighted average debt outstanding

$977.0 million

Weighted average interest rate (one month LIBOR average 0.36%)

4.59%



Total interest costs

$44.8 million

Amortization of deferred financing costs

3.7 million

Interest expense capitalized

(8.8) million

Deferred financing costs amortization capitalized

(0.6) million

Total interest expense after capitalization

$39.1 million





2014 Other Guidance Assumptions



Total revenues

$400 to $415 million

Base rent (included in total revenues)

$280 to $290 million

Straight-line revenues (included in base rent) (2)

$(4) to $(9) million

General and administrative expense

$17 to $19 million

Investments in real estate - development (3)

$225 to $275 million

Improvements to real estate excluding development

$4 million

Preferred stock dividends

$27 million

Annualized common stock dividend

$1.40 per share

Weighted average common shares and OP units - diluted

81 million

Common share repurchase

No amounts budgeted

Acquisitions of income producing properties

No amounts budgeted

 

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

(2)     Straight-line revenues are projected to reduce total revenues in 2014 as cash rents are projected to be higher than GAAP rents.

(3)     Represents cash spend expected in 2014 for the ACC7, SC1 Phase IIA and CH2 developments.  The CH2 development is forecasted to begin in the second quarter of 2014 with an in service date in the first half of 2015.

Note: This press release supplement contains certain non-GAAP financial measures that we believe are helpful in understanding our business, as further discussed within this press release supplement. These financial measures, which include Funds From Operations, Normalized Funds From Operations, Adjusted Funds From Operations, Funds From Operations per share, Normalized 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.

 

SOURCE DuPont Fabros Technology, Inc.



RELATED LINKS
http://www.dft.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.