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DuPont Fabros Technology, Inc. Reports Second Quarter 2009 Results
Revenues up 16%
WASHINGTON, Aug. 4 /PRNewswire-FirstCall/ -- DuPont Fabros Technology, Inc. (NYSE: DFT) today reported results for the three and six months ended June 30, 2009. All per share results are reported on a fully diluted basis.
Highlights
- Executed two leases totaling 12.46 megawatts at facilities in Ashburn, Virginia and Elk Grove Village, Illinois subsequent to the end of the second quarter, representing approximately $275 million of total contract value over the respective lease terms. CH1 Phase I is now 48% leased, and ACC5 Phase II is now 38% leased.
- Funds From Operations ("FFO") of $0.28 per share for second quarter of 2009, which was in the upper half of guidance range.
- Raised the lower end of 2009 FFO per share guidance range by $0.09 per share to $1.05 to $1.12 per share.
- Raised the lower end of 2009 required dividend payout per share guidance by $0.03 per share to $0.20 to $0.26 per share.
Hossein Fateh, President and Chief Executive Officer of the Company, said, "During the second quarter, we continued to focus on leasing, operations and completing our ACC5 Phase I development. As of today, we have executed two new leases and completed the development of ACC5 Phase I, which adds 18% of critical load to our operating portfolio. The leases executed to date support our expected unleveraged returns on investment of 12% at Phase I of CH1 and 15% at ACC5. We achieved a solid quarter of earnings and tightened our full-year guidance toward the high end of our original plan. While the overall economy and debt markets remain challenging, we believe we are well positioned to execute on our growth-oriented business plan for the remainder of this year and into 2010."
Second Quarter 2009 Results
For the quarter ended June 30, 2009, the Company reported earnings per share of $0.08 compared to $0.17 for the second quarter of 2008. Revenues increased 16%, or $6.8 million, to $48.9 million for the second quarter of 2009 over the second quarter of 2008. The overall decrease in earnings per share is primarily due to higher interest expense, which is attributable to higher debt balances and lower capitalized interest, and increased depreciation and amortization, offset by $0.01 per share increase in operating revenue in the current quarter.
FFO per share for the quarter ended June 30, 2009 was $0.28 compared to $0.35 for the quarter ending June 30, 2008. The $0.07 per share decrease is primarily due to higher interest expense, as referenced.
Six months ended June 30, 2009
For the six months ended June 30, 2009, the Company reported earnings per share of $0.13 compared to $0.32 for the six months ended June 30, 2008. Revenues increased 15%, or $12.5 million, to $95.7 million for the six months ended June 30, 2009 over the six months ended June 30, 2008. The overall decrease in earnings per share is primarily attributable to higher interest expense, which is due to higher debt balances and lower capitalized interest, and increased depreciation and amortization in the current period.
FFO per share for the six months ended June 30, 2009 was $0.54 compared to $0.69 for the corresponding period in 2008. The $0.15 per share decrease is primarily due to higher interest expense, as referenced.
Portfolio Update/Status
Subsequent to the end of the second quarter of 2009, the Company executed two new leases totaling 12.46 megawatts of critical load and 69,700 raised square feet with an average lease term of 10.6 years. This represents approximately $275 million of contract value to the Company.
- One lease was signed at CH1 Phase I in Elk Grove Village, Illinois representing 5.63 megawatts of critical load and 36,700 raised square feet.
- One pre-lease was signed at ACC5 Phase II in Ashburn, Virginia comprising 6.83 megawatts of critical load and 33,000 raised square feet with a January 1, 2011 move-in date. An option of moving the lease to Phase I is available if the Company does not build ACC5 Phase II. Under such circumstances, Phase I would be 95% leased.
As of the date of this press release, the Company's stabilized operating portfolio's critical load is 100% leased. CH1 Phase I, currently in lease-up, is 48% leased, ACC5 Phase I is 57% leased and ACC5 Phase II is 38% pre-leased.
Liquidity
The Company has no debt maturities until the third quarter of 2011 assuming the election of the extension options on the Company's line of credit and the loans secured by ACC5 and SC1. As of today, the Company has approximately $15 million of unrestricted cash and $20 million available on its revolving credit facility, as well as $10 million of restricted cash available for funding of Phase I of ACC5 construction costs.
Development Update
The Company has obtained the certificate of occupancy and commissioning report for ACC5 Phase I. The building was designed and constructed to obtain LEED gold certification.
The Company's developments in New Jersey and Santa Clara remain temporarily suspended as the Company continues to work to obtain pre-leasing and financing in order to restart both developments. As of June 30, 2009, construction costs payable includes total committed costs of approximately $13 million on NJ1 and SC1, which the Company expects will be paid by the end of the calendar year. The Company is actively pursuing additional funds for development. The commencement of development of Phase II of ACC5 is subject to obtaining adequate funding and approval of the Board of Directors.
Dividend
In order to preserve liquidity, the Company did not declare a dividend for the first or second quarter of 2009 and will not declare a third quarter dividend. The Company continues to evaluate when to pay the 2009 dividend. The Company is increasing its 2009 REIT distribution requirement estimate by $0.03 per share to $0.20 to $0.26 per share.
2009 Guidance
The Company has established an FFO guidance range of $0.27 to $0.30 per share for the third quarter of 2009 and is reaffirming and tightening its annual FFO guidance range by $0.09 per share from $0.96 to $1.12 per share to $1.05 to $1.12 per share. The assumptions underlying this guidance are outlined on page 15 of this press release.
Second Quarter 2009 Conference Call and Web Cast Information
The Company will host a conference call to discuss these results tomorrow, Wednesday, August 5, 2009 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 1-888-819-8015 (domestic) or 1-913-312-1440 (international). A replay will be available for seven days by dialing 1-888-203-1112 (domestic) or 1-719-457-0820 (international) using conference ID 1686429. The webcast will be archived on the Company's website for one year at www.dft.com on the Presentations & Webcasts page.
Third Quarter 2009 Conference Call
DuPont Fabros Technology, Inc. expects to announce third quarter 2009 results on Tuesday, November 3rd, 2009 and to host a conference call to discuss those results at 10:00 a.m. ET on Wednesday, November 4th, 2009.
About DuPont Fabros Technology, Inc.
DuPont Fabros Technology, Inc. (NYSE: DFT) is a real estate investment trust (REIT) and leading owner, developer, operator and manager of wholesale data centers. The Company's data centers are highly specialized, secure facilities used primarily by national and international technology companies to house, power and cool the computer servers that support many of their most critical business processes. DuPont Fabros Technology, Inc. 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 describe 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 predicted by its forward-looking statements, including, without limitation, the risk that the Company may be unable to obtain financing on favorable terms or pre-leasing on its development properties sufficient to enable it to resume construction, the risk that the Company is unable to satisfy the conditions required to exercise the extension options for its line of credit and loans, the risks commonly associated with construction and development of new facilities, risks relating to compliance with permitting, zoning, land-use and environmental requirements, the risks related to the leasing of space to third-party tenants, including the ability of the Company to negotiate leases on terms that will enable it to achieve its expected returns, the risk that the Company may be unable to acquire additional properties on favorable terms or at all, 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, as well as its annual report on Form 10-K for the year ended December 31, 2008, 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 those 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 current expectations and intentions. The Company assumes no responsibility to issue updates to the forward-looking matters discussed in this press release.
DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands except share and per share data)
Three months ended Six months ended
June 30, June 30,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Base rent $27,757 $25,910 $54,402 $51,741
Recoveries from tenants 16,364 13,475 33,106 25,936
Other revenue 4,746 2,683 8,178 5,539
----- ----- ----- -----
Total revenues 48,867 42,068 95,686 83,216
Expenses:
Property operating costs 14,794 11,240 29,994 21,757
Real estate taxes and
insurance 1,150 995 2,400 1,880
Depreciation and
amortization 13,653 12,064 27,311 24,078
General and administrative 3,395 2,858 6,562 5,306
Other expenses 3,733 2,214 6,627 4,539
----- ----- ----- -----
Total expenses 36,725 29,371 72,894 57,560
------ ------ ------ ------
Operating income 12,142 12,697 22,792 25,656
Interest income 126 34 284 81
Interest:
Expense incurred (5,606) (1,351) (11,013) (3,463)
Amortization of deferred
financing costs (1,122) (217) (3,266) (591)
------ ---- ------ ----
Net income 5,540 11,163 8,797 21,683
Net income attributable to
redeemable noncontrolling
interests - operating
partnership (2,245) (5,249) (3,616) (10,203)
------ ------ ------ -------
Net income attributable to
controlling interests $3,295 $5,914 $5,181 $11,480
====== ====== ====== =======
Earnings per share -
basic:
Net income attributable to
controlling interests
per common share $0.08 $0.17 $0.13 $0.32
===== ===== ===== =====
Weighted average common
shares outstanding 40,035,504 35,418,119 38,576,680 35,417,923
========== ========== ========== ==========
Earnings per share -
diluted:
Net income attributable to
controlling interests
per common share $0.08 $0.17 $0.13 $0.32
===== ===== ===== =====
Weighted average common
shares outstanding 40,617,869 35,439,836 38,867,863 35,425,373
========== ========== ========== ==========
Dividends declared per
common share $- $0.1875 $- $0.3750
=== ======= === =======
DUPONT FABROS TECHNOLOGY, INC.
RECONCILIATIONS OF NET INCOME TO FFO AND AFFO (1)
(unaudited and in thousands except per share data)
Three months ended Six months ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Net income $5,540 $11,163 $8,797 $21,683
Depreciation and
amortization 13,653 12,064 27,311 24,078
Less: Non real estate
depreciation and
amortization (123) (54) (231) (134)
---- --- ---- ----
FFO $19,070 $23,173 $35,877 $45,627
Straight-line revenue (3,820) (7,513) (7,345) (15,408)
Amortization of lease
contracts above and
below market value (1,745) (1,743) (3,489) (3,487)
Loss on early
extinguishment of debt - - 1,047 -
Compensation paid with
Company common shares 507 355 819 704
--- --- --- ---
AFFO $14,012 $14,272 $26,909 $27,436
======= ======= ======= =======
FFO per share - diluted $0.28 $0.35 $0.54 $0.69
===== ===== ===== =====
AFFO per share -
diluted $0.21 $0.21 $0.40 $0.41
===== ===== ===== =====
Weighted average common
shares and OP units
outstanding - diluted 67,221,416 66,602,107 66,916,258 66,587,644
========== ========== ========== ==========
(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 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 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 year over year, 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 will 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 fund our cash needs, including our
ability to pay dividends or make distributions.
We also present FFO with a supplemental adjustment which we call
Adjusted FFO ("AFFO"). AFFO is FFO excluding straight-line revenue,
non-cash stock based compensation, unrealized 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 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. Our 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)
June 30, December 31,
2009 2008
---- ----
ASSETS (unaudited)
Income producing property:
Land $40,778 $39,617
Buildings and improvements 1,283,193 1,277,230
--------- ---------
1,323,971 1,316,847
Less: accumulated depreciation (88,519) (63,669)
------- -------
Net income producing property 1,235,452 1,253,178
Construction in progress and land held
for development 466,265 447,881
------- -------
Net real estate 1,701,717 1,701,059
Cash and cash equivalents 19,898 53,512
Restricted cash 19,422 134
Rents and other receivables 1,613 1,078
Deferred rent 46,397 39,052
Lease contracts above market value, net 17,781 19,213
Deferred costs, net 42,811 42,917
Prepaid expenses and other assets 5,985 7,798
----- -----
Total assets $1,855,624 $1,864,763
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Line of credit $227,364 $233,424
Mortgage notes payable 479,500 433,395
Accounts payable and accrued liabilities 16,196 13,257
Construction costs payable 24,768 82,241
Lease contracts below market value, net 33,513 38,434
Prepaid rents and other liabilities 24,281 27,075
------ ------
Total liabilities 805,622 827,826
Redeemable noncontrolling interests -
operating partnership 403,096 484,768
Commitments and contingencies - -
Stockholders' equity:
Preferred stock, par value $.001,
50,000,000 shares authorized, no shares
issued or outstanding at June 30, 2009
and December 31, 2008 - -
Common stock, par value $.001,
250,000,000 shares authorized,
41,476,690 shares issued and outstanding
at June 30, 2009 and 35,495,257 shares
issued and outstanding at December 31, 2008 41 35
Additional paid in capital 730,892 641,819
Accumulated deficit (75,043) (80,224)
Accumulated other comprehensive loss (8,984) (9,461)
------ ------
Total stockholders' equity 646,906 552,169
------- -------
Total liabilities and stockholders'
equity $1,855,624 $1,864,763
========== ==========
DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
Six months ended June 30,
-------------------------
2009 2008
---- ----
Cash flow from operating activities
Net income $8,797 $21,683
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 27,311 24,078
Straight line rent (7,345) (15,408)
Amortization of deferred financing costs 3,266 593
Amortization of lease contracts above and
below market value (3,489) (3,487)
Compensation paid with Company common
shares 819 704
Changes in operating assets and
liabilities
Restricted cash (288) -
Rents and other receivables (535) (3,295)
Deferred costs (2,189) (171)
Prepaid expenses and other assets 1,501 (235)
Accounts payable and accrued liabilities 2,939 2,227
Prepaid rents and other liabilities 385 (546)
--- ----
Net cash provided by operating activities 31,172 26,143
------ ------
Cash flow from investing activities
Investments in real estate - development (76,661) (79,755)
Interest capitalized for real estate under
development (3,514) (6,847)
Improvements to real estate (1,204) (2,453)
Additions to non-real estate property (283) (407)
---- ----
Net cash used in investing activities (81,662) (89,462)
------- -------
Cash flow from financing activities
Line of credit:
Proceeds - 62,000
Repayments (6,060) -
Mortgage notes payable:
Proceeds 181,726 22,957
Lump sum payoffs (135,121) -
Repayments (500)
Escrowed proceeds (19,000) -
Offering costs - (87)
Payments of financing costs (4,169) (36)
Dividends and distributions:
Common shares - (11,966)
Noncontrolling interests - operating
partnership - (10,633)
--- -------
Net cash provided by financing activities 16,876 62,235
------ ------
Net decrease in cash and cash equivalents (33,614) (1,084)
Cash and cash equivalents, beginning 53,512 11,510
------ ------
Cash and cash equivalents, ending $19,898 $10,426
======= =======
Supplemental information:
Cash paid for interest, net of amounts
capitalized $11,347 $3,163
======= ======
Deferred financing costs capitalized for
real estate under development $911 $1,233
==== ======
Construction costs payable capitalized to
real estate $24,768 $40,849
======= =======
DUPONT FABROS TECHNOLOGY, INC.
Operating Properties
As of June 30, 2009
Raised
Year Gross Square Critical %
Property Built/ Building Feet Load Leased
Property Location Renovated Area(2) (3) MW(4) (5)
-------- ---------- --------- -------- ------- -------- -------
Stabilized
(1)
----------
VA3 Reston, VA 2003 256,000 144,901 13.0 100 %
VA4 Bristow, VA 2005 230,000 90,000 9.6 100 %
ACC2 Ashburn, VA 2001/2005 87,000 53,397 10.4 100 %
ACC3 Ashburn, VA 2001/2006 147,000 79,600 13.0 100 %
ACC4 Ashburn, VA 2007 307,000 172,025 36.4 100 %
--------- ------- ----- -----
Subtotal - stabilized 1,027,000 539,923 82.4 100 %
Completed not Stabilized
------------------------
CH1
Phase I Elk Grove
(6) Village, IL 2008 285,000 121,223 18.2 17 %
------- ------- ----
Total Operating Properties 1,312,000 661,146 100.6
========= ======= =====
- Stabilized operating properties are either 85% or more leased or are in service for 24 months or greater.
- Gross building area is the entire building area, including raised square footage (the portion of gross building area where our tenants' computer servers are located), tenant 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 tenants.
- Raised square footage is that portion of gross building area where our tenants locate their computer servers. We consider raised square footage to be the net rentable square footage in each of our facilities.
- 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 our tenants expressed in terms of megawatt, or MW, or kilowatt, or kW (1 MW is equal to 1,000 kW).
- Percentage leased is expressed as a percentage of critical load that is subject to an executed lease. Represents $108.4 million of annualized base rent on a straight-line basis for leases executed and/or amended as of July 1, 2009 over the non-cancellable terms of the respective leases and excludes approximately $7.0 million net amortization increase in revenue of above and below market leases. Annual base rent on a cash basis as of July 1, 2009 is $97.9 million assuming no additional leasing or changes to existing leases.
- Percentage leased as of August 4, 2009 is 48%.
DUPONT FABROS TECHNOLOGY, INC.
Lease Expirations
As of June 30, 2009
The following table sets forth a summary schedule of lease expirations of
our operating properties for each of the ten calendar years beginning with
2009. The information set forth in the table assumes that tenants exercise
no renewal options and considers early tenant termination options.
Number Raised % of Net Total kW % of
Year of of Square Raised of % of Annualized
Lease Leases Feet Square Expiring Leased Base
Expiration Expiring(1) Expiring(2) Feet Leases(3) kW Rent
---------- ---------- ---------- ------ --------- ------ ---------
2009 1 27,268 4.8% 2,600 3.0% 1.2%
2010 1 66,661 11.9% 5,688 6.7% 3.8%
2011 1 14,320 2.5% 1,300 1.5% 1.0%
2012 1 15,000 2.7% 1,600 1.9% 2.4%
2013 4 50,043 8.9% 5,768 6.8% 5.5%
2014 4 32,809 5.8% 4,120 4.8% 5.3%
2015 2 68,397 12.2% 12,000 14.0% 12.8%
2016 2 54,800 9.7% 8,100 9.5% 11.2%
2017 5 70,800 12.6% 12,324 14.4% 16.3%
2018 4 75,300 13.4% 15,113 17.7% 19.7%
After
2018 7 86,891 15.5% 16,817 19.7% 20.8%
--- ------- ----- ------ ----- -----
Total 32 562,289 100% 85,430 100% 100%
=== ======= ===== ====== ===== =====
- The operating properties have 19 tenants with 32 different lease expiration dates. Top two tenants represent 63% of annualized base rent.
- Raised square footage is that portion of gross building area where our tenants locate their computer servers. We consider raised square footage to be the net rentable square footage in each of our facilities.
- One megawatt is equal to 1,000 kW.
DUPONT FABROS TECHNOLOGY, INC.
Development Projects
As of June 30, 2009
($ in thousands)
Construction
in
Progress &
Land
Esti- Held Per-
Gross Raised Critical mated for centage
Property Property Building Square Load Total Devel- Pre-
Location Area(1) Feet(2) MW(3) Cost(4)opment(5)Leased
--------- -------- -------- ------- ------- ------ -------- -------
In Development
--------------
ACC5 Phase I Ashburn, VA 150,000 85,600 18.2 $155,000 - $143,560 57%
$165,000
------- ------ ---- ---------- -------- ---
Projects
Temporarily
Suspended(6)
-------------
NJ1 Phase I Piscataway, 150,000 85,600 18.2 $200,000 - 130,499
NJ $215,000
SC1 Phase I Santa Clara 150,000 85,600 18.2 $240,000 - 85,092
CA $280,000
------- ------- ---- ---------- -------
300,000 171,200 36.4 $440,000 - 215,591
$495,000
------- ------- ---- ---------- -------
Future Development Projects
---------------------------
CH1 Phase II Elk Grove 200,000 89,917 18.2 *
Village, IL
ACC5
Phase II(7) Ashburn, VA 150,000 85,600 18.2 *
NJ1 Piscataway,
Phase II NJ 150,000 85,600 18.2 *
SC1 Santa Clara,
Phase II CA 150,000 85,600 18.2 *
SC2 Phase Santa Clara,
I/II CA 300,000 171,200 36.4 *
ACC6 Phase Ashburn,
I/II VA 240,000 155,000 31.2 *
ACC7 Ashburn, VA 100,000 50,000 10.4 *
--------- ------- ----
1,290,000 722,917 150.8 107,114
--------- ------- ---- -------
Total 1,740,000 979,717 205.4 $466,265
========= ======= ===== ========
* Development costs have not yet been estimated.
- Gross building area is the entire building area, including raised square footage (the portion of gross building area where our tenants' computer servers are located), tenant common areas, areas controlled by us (such as the mechanical, telecommunications and utility rooms) and, in some facilities, individual office and storage space leased on an as available basis to our tenants.
- Raised square footage is that portion of gross building area where our tenants locate their computer servers. We consider raised square footage to be the net rentable square footage in each of our facilities.
- Critical load (also referred to as IT load or load used by tenants' servers or related equipment) is the power available for exclusive use by our tenants expressed in terms of MW or kW (1 MW is equal to 1,000 kW).
- Includes estimated capitalization for construction and development, including closing costs, capitalized interest and capitalized operating carrying costs, as applicable, upon completion.
- Amount capitalized as of June 30, 2009.
- Construction temporarily suspended and includes all estimated commitments.
- As of August 4, 2009, ACC5 Phase II is 38% pre-leased.
DUPONT FABROS TECHNOLOGY, INC.
Debt Summary as of June 30, 2009
($ in thousands)
Maturities
Amounts % of Total Rates (1) (years)
--------- ---------- --------- -----------
Secured $706,684 100.0 % 4.2 % 1.8
Unsecured - - - -
--------- ---------- --------- -----------
Total $706,684 100.0 % 4.2 % 1.8
========= ========== ========= ===========
Fixed Rate Debt:
Safari Term Loan
(2)(3) $200,000 28.3 % 6.5 % 2.1
ACC5 Loan 25,000 3.5 % 12.0 % 0.6
SC1 Loan 5,000 0.7 % 12.0 % 0.6
--------- ---------- --------- -----------
Fixed Rate Debt 230,000 32.5 % 7.2 % 1.9
--------- ---------- --------- -----------
Floating Rate Debt:
Line of Credit (2) 227,364 32.2 % 1.6 % 1.1
ACC4 Term Loan 249,500 35.3 % 3.8 % 2.3
--------- ---------- --------- -----------
Floating Rate Debt 476,864 67.5% 2.7 % 1.7
--------- ---------- --------- -----------
Total $706,864 100.0 % 4.2 % 1.8
========= ========== ========= ===========
Note: The Company capitalized interest of $2.4 million and $4.4 million during the three and six months ended June 30, 2009, respectively.
- Rate as of June 30, 2009.
- Collateral includes VA3, VA4, ACC2 and ACC3.
- Rate is fixed by an interest rate swap.
Debt Maturity Schedule as of June 30, 2009
($ in thousands)
Fixed Floating
Year Rate Rate Total % of Total Rates (5)
----- ------- ------- ------- ---------- --------
2009 $- $- $- - -
2010 30,000 (1) 227,364 (3) 257,364 36.4 % 2.8 %
2011 200,000 (2) 249,500 (4) 449,500 63.6 % 5.0 %
------- ------- ------- ---------- --------
Total $230,000 $476,864 $706,864 100.0 % 4.2 %
======== ======== ======== ========== ========
- Extendable up to four years upon satisfaction of certain customary conditions.
- Matures on August 7, 2011 with no extension option.
- Amount outstanding on the Company's $275 million Line of Credit that matures on August 7, 2010, subject to a one-year extension option exercisable by the Company upon satisfaction of certain customary conditions. A borrowing base initial appraised value covenant currently limits the amount available to $244 million.
- Matures on October 24, 2011 and includes a one-year extension option exercisable by the Company upon satisfaction of certain customary conditions. Excludes scheduled principal amortization payments of $1.0 million in the second half of 2009 and $2.0 million in 2010.
- Rate as of June 30, 2009.
DUPONT FABROS TECHNOLOGY, INC.
Selected Financial Covenants
6/30/09 3/31/09
------- -------
Total Debt to Gross Asset Value (not to exceed 65%) 35% 35%
Fixed Charge Coverage ratio (not less than 1.45) 3.56 3.96
Borrowing Base Debt Service Coverage Ratio (not
less than 1.35) 1.93 1.90
Secured Recourse Debt to Gross Asset Value (not to
exceed 15%) 5% 5%
These selected covenants relate to DuPont Fabros Technology, LP and/or its related subsidiaries. DuPont Fabros Technology, Inc. is the general partner of DuPont Fabros Technology, LP.
Capital Structure as of June 30, 2009
(in thousands except per share data)
Mortgage notes
payable $479,500
Line of Credit 227,364
--------
Total Debt 706,864 52.7%
Common Shares 62% 41,477
Operating Partnership
("OP") Units 38% 25,846
--- -------
Total Shares and OP Units 100% 67,323
Common Share Price at
June 30, 2009 $9.42
------
Total Equity 634,183 47.3%
---------- ------
Total Market
Capitalization $1,341,047 100.0%
========== ======
DUPONT FABROS TECHNOLOGY, INC.
Common Share and OP Unit
Weighted Average Amounts Outstanding
YTD YTD
Q2 2009 Q2 2008 Q2 2009 Q2 2008
------- ------- ------- -------
Weighted Average Amounts
Outstanding for EPS
Purposes:
Common Shares - basic 40,035,504 35,418,119 38,576,680 35,417,923
Shares issued from assumed
conversion of
- Restricted Shares 244,386 21,717 122,193 7,450
- Stock options 337,979 - 168,990 -
------- --- ------- ---
Total Common Shares - diluted 40,617,869 35,439,836 38,867,863 35,425,373
========== ========== ========== ==========
Weighted Average Amounts
Outstanding for FFO and AFFO
Purposes:
Common Shares - basic 40,035,504 35,418,119 38,576,680 35,417,923
OP Units - basic 26,603,547 31,162,271 28,048,395 31,162,271
---------- ---------- ---------- ----------
Total Common Shares and OP
Units 66,639,051 66,580,390 66,625,075 66,580,194
Share issued from assumed
conversion of
- Restricted Shares 244,386 21,717 122,193 7,450
- Stock options 337,979 - 168,990 -
------- --- ------- ---
Total Common Shares and OP
Units - diluted 67,221,416 66,602,107 66,916,258 66,587,644
========== ========== ========== ==========
Period Ending Amounts
Outstanding:
Common Shares 41,476,690
OP Units 25,845,817
----------
Total Common Shares and OP
Units 67,322,507
==========
DUPONT FABROS TECHNOLOGY, INC.
2009 Guidance
The earnings guidance/projections provided below are based on current
expectations and are forward-looking.
Expected Q3 Expected 2009
2009
per share per share
--------- ---------
Earnings per share and unit - diluted $0.06 to $0.09 $0.22 to $0.27
Depreciation and amortization, net 0.21 0.83 to 0.85
-------------- --------------
FFO per share and unit - diluted (1) $0.27 to $0.30 $1.05 to $1.12
============== ==============
2009 Debt Assumptions
Weighted average debt outstanding $700 to $715 million
Weighted average interest rate 4.4% to 4.8%
Total interest costs $31.0 to $34.5 million
Total amortization of deferred financing costs $7.3 to $7.5 million
Interest expense capitalized $(4.7) to $(5.2) million
Deferred financing costs amortization
Capitalized $(1.1) to $(1.3) million
------------------------
Total interest expense after capitalization $32.5 to $35.5 million
========================
Note: Debt guidance assumes no new debt issued from the date of this
release.
2009 Other Guidance Assumptions
ACC5 placed in service date September 1, 2009
Other revenues $11 to $13 million
Straight-line revenue $20 to $25 million
Below market lease amortization, net of above $7 million
market lease amortization
General and administrative expense $12 to $14 million
Estimated required REIT dividend
distribution payout $0.20 to $0.26 per share
Weighted average common shares and OP units - 67.6 million
diluted
(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 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 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 year over year, 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 will 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 fund our cash needs, including our
ability to pay dividends or make distributions.
SOURCE DuPont Fabros Technology, Inc.