DuPont Fabros Technology, Inc. Reports Second Quarter 2013 Results

Revenues up 11%

Adjusted Funds from Operations per share up 40%

25 Jul, 2013, 07:00 ET from DuPont Fabros Technology, Inc.

WASHINGTON, July 25, 2013 /PRNewswire/ -- DuPont Fabros Technology, Inc. (NYSE: DFT) today reported results for the quarter ended June 30, 2013.  All per share results are reported on a fully diluted basis.

Highlights

  • As of June 30, 2013, the company's overall operating portfolio was 91% leased with the stabilized portfolio at 90% leased and the non-stabilized portfolio at 93% leased.
  • Quarterly Highlights:
    • Reported Funds from Operations ("FFO") of $0.47 per share representing a 27% increase over the prior year quarter. 
    • Reported Adjusted FFO per share of $0.42 representing a 40% increase over the prior year quarter. 
    • Commenced three leases totaling 4.88 megawatts ("MW") and 28,118 raised square feet.
    • Increased revolving credit facility to $400 million from $225 million through exercise of accordion.
    • As reported last quarter:
      • Signed one lease totaling 1.73 MW of critical load and 10,151 raised square feet at CH1 which is now 100% leased and commenced. 
      • Commenced development of ACC7 Phase I (11.89 MW) with expected completion in the second quarter of 2014.  ACC7 is expected to be built in four phases totaling 41.60 MW available for use by tenants. 
      • Increased second quarter 2013 common stock dividend 25% to $0.25 per share. 
  • Subsequent to the Second Quarter:
    • Renewed one lease for five years totaling 1.14 MW and 5,300 raised square feet. 

Hossein Fateh, President and Chief Executive Officer, said, "DFT continues to focus on the plan to lease our remaining wholesale data center capacity and to develop new capacity in existing locations.  We are optimistic in our ability to lease our available space based on expected data center demand."

Second Quarter 2013 Results

For the quarter ended June 30, 2013, the company reported earnings of $0.18 per share compared to $0.11 per share for the second quarter of 2012, an increase of 64%.  Revenues increased 11%, or $8.9 million, to $91.6 million for the second quarter of 2013 over the second quarter of 2012.  The increase in revenues is primarily due to new leases commencing.

FFO for the quarter ended June 30, 2013 was $0.47 per share compared to $0.37 per share for the second quarter of 2012.  The increase of $0.10 per share from the prior year quarter is due to higher operating income excluding depreciation.

First Half 2013 Results

For the six months ended June 30, 2013, the company reported earnings of $0.30 per share compared to $0.19 per share for the first half of 2012, an increase of 58%.  Revenues increased 11%, or $18.3 million, to $179.3 million for the first six months of 2013 over the year ago period.  The increase in revenues is primarily due to new leases commencing.

FFO for the six months ended June 30, 2013 was $0.87 per share, compared to $0.72 per share for the first half of 2012.  The increase of $0.15 per share from the year ago period is primarily due to:

  • A positive impact of $0.18 per share from higher operating income excluding depreciation.
  • A negative impact of $0.02 per share due to the one-time write-off of deferred financing costs related to a secured loan payoff in the first quarter of 2013.
  • A negative impact of $0.01 per share from higher interest expense primarily due to lower capitalized interest. 

Portfolio Update

During the second quarter, the company signed one lease at CH1 with a lease term of 5.1 years totaling 1.73 MW and 10,151 raised square feet.  A portion of the lease commenced in the second quarter and the other portion is a replacement for the 0.43 MW expiring on December 31, 2013 and is expected to commence in the first quarter of 2014.

Year to Date, the company:

  • Signed two leases with a weighted average lease term of 5.2 years totaling 4.01 MW and 21,151 raised square feet that are expected to generate approximately $3.9 million of annualized GAAP base rent revenue. 
  • Commenced nine leases totaling 20.69 MW and 110,716 raised square feet. 
  • Renewed one lease at ACC4 for five years totaling 1.14 MW and 5,300 raised square feet.

Development Update

In May 2013, the company executed an agreement with its general contractor to build the entire shell and portions of the underground conduit at ACC7 (41.60 MW of critical load) and to fully develop the first phase of ACC7 (11.89 MW of critical load).  The total cost of the entire ACC7 data center is expected to range from $7.0 million per MW to $7.9 million per MW, excluding capitalized interest. ACC7 will be the first data center built using the company's new design.  Expected Power Usage Efficiency ("PUE") is 1.2 which will result in reduced energy costs for customers and the new design is also expected to lower operating costs.  The company can build in modular units as small as 5.9 MW of critical load, allowing delivery on a just-in-time basis, reducing the risk of speculative development.

Balance Sheet and Liquidity

The company announced in November 2012 a twelve-month common stock repurchase program of up to $80 million.  In the second quarter of 2013, the company did not repurchase any shares.  Under this program the company has repurchased $37.8 million or 1,632,673 shares of common stock at an average price of $23.12 per share.

On June 12, 2013, the company exercised the accordion on its revolving credit facility increasing the facility from $225 million to $400 million.  A new accordion was put into place to provide the company with the option to increase the total commitment under the facility to $600 million, if one or more lenders commit to being a lender for the additional amount and certain other customary conditions are met.

As of June 30, 2013, the company had $14 million of cash available on its balance sheet and $340 million of available capacity under its revolving credit facility.

Common Dividend

The company's Board of Directors increased the quarterly common dividend in the second quarter of 2013 by 25% to $0.25 per share, an annualized rate of $1.00 per share. 

Third Quarter and Full Year 2013 Guidance

The company has established an FFO guidance range of $0.47 to $0.49 per share for the third quarter of 2013. 

The company's 2013 FFO guidance range remains unchanged at $1.82 to $1.92 per share.  The 2013 lower end of the guidance range still assumes no additional leases will be executed this year.

Second Quarter 2013 Conference Call and Webcast Information

The company will host a conference call to discuss these results today, Thursday, July 25, 2013 at 1:00 p.m. ET. To access the live call, please visit the Investor Relations section of the company's website at www.dft.com or dial 1-800-860-2442 (domestic) or 1-412-858-4600 (international).  A replay will be available for seven days by dialing 1-877-344-7529 (domestic) or 1-412-317-0088 (international) using passcode 10030785.  The webcast will be archived on the company's website for one year at www.dft.com on the Presentations & Webcasts page.

About DuPont Fabros Technology, Inc.

DuPont Fabros Technology, Inc. (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 third quarter 2013 FFO guidance are not realized, the risks related to the leasing of available space to third-party tenants, including delays in executing new leases and failure to negotiate leases on terms that will enable it to achieve its expected returns, risks related to the collection of accounts and notes receivable, the risk that the company may be unable to obtain new financing on favorable terms to facilitate, among other things, future development projects, the risks commonly associated with construction and development of new facilities (including delays and/or cost increases associated with the completion of new developments), risks relating to obtaining required permits and compliance with permitting, zoning, land-use and environmental requirements, the risk that the company will not declare and pay dividends as anticipated for 2013 and the risk that the company may not be able to maintain its qualification as a REIT for federal tax purposes.  The periodic reports that the company files with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2012 and its quarterly report on Form 10-Q for the quarter ended March 31, 2013, contain detailed descriptions of these and many other risks to which the company is subject.  These reports are available on our website at www.dft.com. Because of the risks described above and other unknown risks, the company's actual results, performance or achievements may differ materially from the results, performance or achievements contemplated by its forward-looking statements.  The information set forth in this news release represents management's expectations and intentions only as of the date of this press release.  The company assumes no responsibility to issue updates to the contents of this press release.

 

DUPONT FABROS TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

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

Three months ended June 30,

Six months ended June 30,

2013

2012

2013

2012

Revenues:

Base rent

$

61,710

$

55,773

$

122,193

$

108,943

Recoveries from tenants

29,047

25,728

55,386

49,814

Other revenues

807

1,157

1,744

2,283

    Total revenues

91,564

82,658

179,323

161,040

Expenses:

Property operating costs

24,767

23,473

48,279

45,836

Real estate taxes and insurance

3,673

2,413

7,314

4,584

Depreciation and amortization

23,196

22,484

46,235

44,354

General and administrative

4,332

4,505

8,882

9,741

Other expenses

585

744

1,357

1,412

    Total expenses

56,553

53,619

112,067

105,927

Operating income

35,011

29,039

67,256

55,113

Interest income

16

45

53

79

Interest:

    Expense incurred

(12,505)

(12,674)

(25,442)

(24,537)

        Amortization of deferred financing costs

(775)

(916)

(3,393)

(1,803)

Net income

21,747

15,494

38,474

28,852

Net income attributable to redeemable noncontrolling interests – operating partnership

(2,965)

(2,006)

(4,938)

(3,576)

Net income attributable to controlling interests

18,782

13,488

33,536

25,276

Preferred stock dividends

(6,811)

(6,811)

(13,622)

(13,430)

Net income attributable to common shares

$

11,971

$

6,677

$

19,914

$

11,846

Earnings per share – basic:

Net income attributable to common shares

$

0.19

$

0.11

$

0.31

$

0.19

Weighted average common shares outstanding

64,380,566

62,897,982

64,733,309

62,733,265

Earnings per share – diluted:

Net income attributable to common shares

$

0.18

$

0.11

$

0.30

$

0.19

Weighted average common shares outstanding

65,188,907

63,749,724

65,556,852

63,648,912

Dividends declared per common share

$

0.25

$

0.15

$

0.45

$

0.27

 

DUPONT FABROS TECHNOLOGY, INC.

RECONCILIATIONS OF NET INCOME TO FFO AND AFFO (1)

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

Three months ended June 30,

Six months ended June 30,

2013

2012

2013

2012

Net income

$

21,747

$

15,494

$

38,474

$

28,852

Depreciation and amortization

23,196

22,484

46,235

44,354

Less:  Non real estate depreciation and amortization

(229)

(260)

(471)

(534)

FFO

44,714

37,718

84,238

72,672

Preferred stock dividends

(6,811)

(6,811)

(13,622)

(13,430)

FFO attributable to common shares and OP units

$

37,903

$

30,907

$

70,616

$

59,242

Straight-line revenues, net of reserve

(2,047)

(6,203)

(6,654)

(11,226)

Amortization of lease contracts above and below market value

(597)

(853)

(1,195)

(1,832)

Compensation paid with Company common shares

1,612

1,639

3,515

3,673

Non real estate depreciation and amortization

229

260

471

534

Amortization of deferred financing costs

775

916

1,693

1,803

Write-off of deferred financing costs

1,700

Improvements to real estate

(3,548)

(1,498)

(4,357)

(1,677)

Capitalized leasing commissions

(56)

(537)

(168)

(699)

AFFO

$

34,271

$

24,631

$

65,621

$

49,818

FFO attributable to common shares and OP units

per share - diluted

$

0.47

$

0.37

$

0.87

$

0.72

AFFO per share - diluted

$

0.42

$

0.30

$

0.80

$

0.60

Weighted average common shares and OP units outstanding - diluted

81,119,817

82,623,517

81,605,473

82,588,508

(1) Funds from operations, or FFO, is used by industry analysts and investors as a supplemental operating performance measure for REITs. The Company calculates FFO in accordance with the definition that was adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. FFO, as defined by NAREIT, represents net income determined in accordance with GAAP, excluding extraordinary items as defined under GAAP, impairment charges on depreciable real estate assets and gains or losses from sales of previously depreciated operating real estate assets, plus specified non-cash items, such as real estate asset depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. The Company also presents FFO attributable to common shares and OP units, which is FFO excluding preferred stock dividends. FFO attributable to common shares and OP units per share is calculated on a basis consistent with net income attributable to common shares and OP units and reflects adjustments to net income for preferred stock dividends.

 

The Company uses FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, it provides a performance measure that, when compared period over period, captures trends in occupancy rates, rental rates and operating expenses. The Company also believes that, as a widely recognized measure of the performance of equity REITs, FFO may be used by investors as a basis to compare the Company's operating performance with that of other REITs. However, because FFO excludes real estate related depreciation and amortization and captures neither the changes in the value of the Company's properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of the Company's properties, all of which have real economic effects and could materially impact the Company's results from operations, the utility of FFO as a measure of the Company's performance is limited.

 

While FFO is a relevant and widely used measure of operating performance of equity REITs, other equity REITs may use different methodologies for calculating FFO and, accordingly, FFO as disclosed by such other REITs may not be comparable to the Company's FFO. Therefore, the Company believes that in order to facilitate a clear understanding of its historical operating results, FFO should be examined in conjunction with net income as presented in the consolidated statements of operations. FFO should not be considered as an alternative to net income or to cash flow from operating activities (each as computed in accordance with GAAP) or as an indicator of the Company's liquidity, nor is it indicative of funds available to meet the Company's cash needs, including its ability to pay dividends or make distributions.

 

The Company also presents FFO with supplemental adjustments to arrive at Adjusted FFO ("AFFO"). AFFO is FFO attributable to common shares and OP units excluding straight-line revenue, compensation paid with Company common shares, gain or loss on derivative instruments, acquisition of service agreements, below market lease amortization net of above market lease amortization, early extinguishment of debt costs, non real estate depreciation and amortization, amortization of deferred financing costs, improvements to real estate and capitalized leasing commissions. AFFO does not represent cash generated from operating activities in accordance with GAAP and therefore should not be considered an alternative to net income as an indicator of the Company's operating performance or as an alternative to cash flow provided by operations as a measure of liquidity and is not necessarily indicative of funds available to fund the Company's cash needs including the Company's ability to pay dividends. In addition, AFFO may not be comparable to similarly titled measurements employed by other companies. The Company's management uses AFFO in management reports to provide a measure of REIT operating performance that can be compared to other companies using AFFO.

 

DUPONT FABROS TECHNOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands except share data)

June 30,

2013

December 31, 2012

(unaudited)

ASSETS

Income producing property:

Land

$

75,956

$

73,197

Buildings and improvements

2,419,359

2,315,499

2,495,315

2,388,696

Less: accumulated depreciation

(369,420)

(325,740)

Net income producing property

2,125,895

2,062,956

Construction in progress and land held for development

135,950

218,934

Net real estate

2,261,845

2,281,890

Cash and cash equivalents

14,373

23,578

Rents and other receivables, net

8,808

3,840

Deferred rent, net

149,771

144,829

Lease contracts above market value, net

9,704

10,255

Deferred costs, net

33,628

35,670

Prepaid expenses and other assets

42,300

30,797

Total assets

$

2,520,429

$

2,530,859

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Line of credit

$

60,000

$

18,000

Mortgage notes payable

115,000

139,600

Unsecured notes payable

550,000

550,000

Accounts payable and accrued liabilities

24,416

22,280

Construction costs payable

5,762

6,334

Accrued interest payable

2,347

2,601

Dividend and distribution payable

25,901

22,177

Lease contracts below market value, net

12,276

14,022

Prepaid rents and other liabilities

50,770

35,524

Total liabilities

846,472

810,538

Redeemable noncontrolling interests – operating partnership

383,877

453,889

Commitments and contingencies

Stockholders' equity:

Preferred stock, $.001 par value, 50,000,000 shares authorized:

    Series A cumulative redeemable perpetual preferred 

    stock, 7,400,000 issued and outstanding at June 30,

    2013 and December 31, 2012

185,000

185,000

    Series B cumulative redeemable perpetual preferred 

    stock, 6,650,000 issued and outstanding at June 30, 

    2013 and December 31, 2012

166,250

166,250

Common stock, $.001 par value, 250,000,000 shares 

 authorized, 64,700,976 shares issued and outstanding at

June 30, 2013 and 63,340,929 shares issued and outstanding

at December 31, 2012

65

63

Additional paid in capital

938,765

915,119

Retained earnings

Total stockholders' equity

1,290,080

1,266,432

Total liabilities and stockholders' equity

$

2,520,429

$

2,530,859

 

DUPONT FABROS TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in thousands)

Six months ended June 30,

2013

2012

Cash flow from operating activities

Net income

$

38,474

$

28,852

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

Depreciation and amortization

46,235

44,354

Straight line rent, net of reserve

(6,654)

(11,226)

Amortization of deferred financing costs

1,693

1,803

Write-off of deferred financing costs

1,700

Amortization of lease contracts above and below market value

(1,195)

(1,832)

Compensation paid with Company common shares

3,515

3,673

Changes in operating assets and liabilities

    Rents and other receivables

(3,219)

(566)

    Deferred costs

(205)

(787)

    Prepaid expenses and other assets

(10,650)

(3,583)

    Accounts payable and accrued liabilities

2,260

(2,045)

    Accrued interest payable

(254)

56

    Prepaid rents and other liabilities

14,087

(110)

Net cash provided by operating activities

85,787

58,589

Cash flow from investing activities

Investments in real estate – development

(20,516)

(35,752)

Interest capitalized for real estate under development

(504)

(1,533)

Improvements to real estate

(4,357)

(1,677)

Additions to non-real estate property

(24)

(55)

Net cash used in investing activities

(25,401)

(39,017)

Cash flow from financing activities

Issuance of preferred stock, net of offering costs

62,685

Line of credit:

Proceeds

72,000

15,000

Repayments

(30,000)

(35,000)

Mortgage notes payable:

Proceeds

115,000

Lump sum payoffs

(138,300)

Repayments

(1,300)

(2,600)

Exercises of stock options

868

Payments of financing costs

(3,036)

(2,081)

Common stock repurchases

(37,792)

Dividends and distributions:

Common shares

(25,597)

(15,122)

Preferred shares

(13,622)

(12,384)

Redeemable noncontrolling interests – operating partnership

(6,944)

(4,563)

Net cash (used in) provided by financing activities

(69,591)

6,803

Net (decrease) increase in cash and cash equivalents

(9,205)

26,375

Cash and cash equivalents, beginning

23,578

14,402

Cash and cash equivalents, ending

$

14,373

$

40,777

Supplemental information:

Cash paid for interest

$

26,200

$

26,014

Deferred financing costs capitalized for real estate under development

$

34

$

97

Construction costs payable capitalized for real estate under development

$

5,762

$

14,048

Redemption of operating partnership units

$

69,900

$

5,700

Adjustments to redeemable noncontrolling interests - operating partnership

$

2,111

$

83,333

 

DUPONT FABROS TECHNOLOGY, INC.

 

Operating Properties

As of June 30, 2013

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

Ashburn, VA

2009-2010

360,000

176,000

36.4

98

%

98

%

ACC6 Phase I

Ashburn, VA

2011

131,000

65,000

13.0

100

%

100

%

CH1 Phase I

Elk Grove Village, IL

2008

285,000

122,000

18.2

100

%

100

%

CH1 Phase II

Elk Grove Village, IL

2012

200,000

109,000

18.2

100

%

100

%

NJ1 Phase I

Piscataway, NJ

2010

180,000

88,000

18.2

39

%

39

%

VA3

Reston, VA

2003

256,000

147,000

13.0

51

%

51

%

VA4

Bristow, VA

2005

230,000

90,000

9.6

100

%

100

%

Subtotal – stabilized

2,223,000

1,102,000

187.3

90

%

90

%

Completed not Stabilized

ACC6 Phase II

Ashburn, VA

2013

131,000

65,000

13.0

100

%

67

%

SC1 Phase I

Santa Clara, CA

2011

180,000

88,000

18.2

88

%

81

%

Subtotal – non-stabilized

311,000

153,000

31.2

93

%

75

%

Total Operating Properties

2,534,000

1,255,000

218.5

91

%

88

%

(1) Stabilized operating properties are either 85% or more leased and commenced or have been in service for 24 months or greater.

(2) Gross building area is the entire building area, including raised square footage (the portion of gross building area where the tenants' computer servers are located), tenant common areas, areas controlled by the Company (such as the mechanical, telecommunications and utility rooms) and, in some facilities, individual office and storage space leased on an as available basis to the tenants.

(3) Critical load (also referred to as IT load or load used by tenants' servers or related equipment) is the power available for exclusive use by tenants expressed in terms of megawatt, or MW, or kilowatt, or kW (1 MW is equal to 1,000 kW).

(4) Percentage leased is expressed as a percentage of critical load that is subject to an executed lease totaling 198.2 MW. Leases executed as of June 30, 2013 represent $250 million of base rent on a GAAP basis and $251 million of base rent on a cash basis over the next twelve months.

(5) Percentage commenced is expressed as a percentage of critical load where the lease has commenced under generally accepted accounting principles.

 

DUPONT FABROS TECHNOLOGY, INC.

 

Lease Expirations

As of June 30, 2013

The following table sets forth a summary schedule of lease expirations of the operating properties for each of the ten calendar years beginning with 2013. The information set forth in the table below assumes that tenants exercise no renewal options and takes into account tenants' early termination options.

Year of Lease Expiration

Number

of Leases

Expiring (1)

Raised Square Feet

Expiring

(in thousands) 

(2)

% of Leased

Raised

Square Feet

Total kW

of Expiring

Commenced Leases (2)

% of

Leased kW

% of

Annualized

Base Rent (3)

2013 (4)

2

8

0.7

%

1,567

0.8

%

0.9

%

2014

6

35

3.2

%

6,287

3.3

%

3.7

%

2015

4

70

6.5

%

13,812

7.2

%

6.7

%

2016

4

32

2.9

%

4,686

2.4

%

2.5

%

2017

11

80

7.4

%

14,206

7.4

%

7.0

%

2018

16

168

15.5

%

33,286

17.3

%

16.6

%

2019

11

168

15.5

%

31,035

16.1

%

15.1

%

2020

9

96

8.8

%

15,196

7.9

%

8.3

%

2021

7

131

12.1

%

24,269

12.6

%

13.3

%

2022

6

75

6.9

%

12,812

6.6

%

7.4

%

After 2022

15

222

20.5

%

35,567

18.4

%

18.5

%

Total

91

1,085

100

%

192,723

100

%

100

%

(1) Represents 33 tenants with 91 lease expiration dates. Top four tenants represent 61% of annualized base rent.

(2) Raised square footage is that portion of gross building area where the tenants locate their computer servers. One MW is equal to 1,000 kW.

(3) Annualized base rent represents the monthly contractual base rent (defined as cash base rent before abatements) multiplied by 12 for commenced leases totaling 192.7 MW as of June 30, 2013.

(4) One lease, representing 5,300 raised square feet, 1,137 kW of critical load and 0.7% of annualized base rent, was renewed in July 2013 for five years. The second lease will expire on December 31, 2013, representing 2,800 raised square feet, 430 kW of critical load and 0.2% of annualized base rent as notice was provided. This space has been re-leased with the new lease expected to commence on January 1, 2014 and expire in 2019.

 

DUPONT FABROS TECHNOLOGY, INC.

 

Development Projects

As of June 30, 2013

($ in thousands)

Property

Property Location

Gross

Building

Area (1)

Raised

Square

Feet (2)

Critical

Load

MW (3)

Estimated

Total Cost (4)

Construction

in Progress &

Land Held for

Development (5)

Current Development Projects

ACC7 Phase I

Ashburn, VA

126,000

70,000

11.9

$85,000 - $90,000

$

7,296

Future Development Projects/Phases

ACC7 Phases II to IV

Ashburn, VA

320,000

176,000

29.7

$78,000 - $82,000

18,221

SC1 Phase II

Santa Clara, CA

180,000

88,000

18.2

61,834

NJ1 Phase II

Piscataway, NJ

180,000

88,000

18.2

39,212

680,000

352,000

66.1

119,267

Land Held for Development

ACC8

Ashburn, VA

100,000

50,000

10.4

3,659

SC2 Phase I/II

Santa Clara, CA

200,000

125,000

26.0

5,728

300,000

175,000

36.4

9,387

Total

1,106,000

597,000

114.4

$

135,950

(1) Gross building area is the entire building area, including raised square footage (the portion of gross building area where the tenants' computer servers are located), tenant common areas, areas controlled by the Company (such as the mechanical, telecommunications and utility rooms) and, in some facilities, individual office and storage space leased on an as available basis to the tenants.

(2) Raised square footage is that portion of gross building area where the tenants locate their computer servers. ACC7 will be built without a raised floor and the above represents computer room square footage.

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

(4) Current development projects include land, capitalization for construction and development and capitalized operating carrying costs, as applicable, upon completion. Capitalized interest is excluded. Future development projects / phases include, land, shell and underground work through Phase I opening only.

(5) Amount capitalized as of June 30, 2013. Future development projects / phases include only land, shell, underground work and capitalized interest through Phase I opening.

 

DUPONT FABROS TECHNOLOGY, INC.

 

Debt Summary as of June 30, 2013

($ in thousands)

June 30, 2013

Amounts

% of Total

Rates

Maturities

(years)

Secured

$

115,000

16

%

2.0

%

4.7

Unsecured

610,000

84

%

7.9

%

3.7

    Total

$

725,000

100

%

6.9

%

3.8

Fixed Rate Debt:

Unsecured Notes

$

550,000

76

%

8.5

%

3.8

    Fixed Rate Debt

550,000

76

%

8.5

%

3.8

Floating Rate Debt:

Unsecured Credit Facility

60,000

8

%

2.0

%

2.7

ACC3 Term Loan

115,000

16

%

2.0

%

4.7

    Floating Rate Debt

175,000

24

%

2.0

%

4.1

    Total

$

725,000

100

%

6.9

%

3.8

Note: The Company capitalized interest and deferred financing cost amortization of $0.3 million and $0.5 million during the three and six months ended June 30, 2013, respectively.

 

Debt Maturity as of June 30, 2013

($ in thousands)

Year

Fixed Rate

Floating Rate

Total

% of Total

Rates

2013

$

$

$

%

%

2014

%

%

2015

125,000

(1)

125,000

17.2

%

8.5

%

2016

125,000

(1)

63,750

(2)(3)

188,750

26.0

%

6.3

%

2017

300,000

(1)

8,750

(3)

308,750

42.7

%

8.3

%

2018

102,500

(3)

102,500

14.1

%

2.0

%

Total

$

550,000

$

175,000

$

725,000

100

%

6.9

%

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

(2) The Unsecured Credit Facility matures on March 21, 2016 with a one-year extension option.

(3) The ACC3 Term Loan matures on March 27, 2018 with no extension option. Quarterly principal payments of $1.25 million begin on April 1, 2016, increase to $2.5 million on April 1, 2017 and continue through maturity.

 

DUPONT FABROS TECHNOLOGY, INC.

 

Selected Unsecured Debt Metrics

6/30/13

12/31/12

Interest Coverage Ratio (not less than 2.0)

4.3

4.0

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

25.2%

24.9%

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

4.0%

4.9%

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

442.1%

334.3%

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

 

Capital Structure as of June 30, 2013

(in thousands except per share data)

Line of credit

$

60,000

Mortgage Notes Payable

115,000

Unsecured Notes

550,000

Total Debt

725,000

24.0

%

Common Shares

80

%

64,701

Operating Partnership ("OP") Units

20

%

15,896

Total Shares and Units

100

%

80,597

Common Share Price at June 30, 2013

$

24.15

Common Share and OP Unit Capitalization

$

1,946,418

Preferred Stock ($25 per share liquidation preference)

351,250

Total Equity

2,297,668

76.0

%

Total Market Capitalization

$

3,022,668

100.0

%

 

DUPONT FABROS TECHNOLOGY, INC.

 

Common Share and OP Unit

Weighted Average Amounts Outstanding

Q2 2013

Q2 2012

YTD Q2

2013

YTD Q2

2012

Weighted Average Amounts Outstanding for EPS Purposes:

Common Shares - basic

64,380,566

62,897,982

64,733,309

62,733,265

Shares issued from assumed conversion of:

- Restricted Shares

51,954

70,030

75,837

138,320

- Stock Options

756,387

781,712

747,706

777,327

- Performance Units

Total Common Shares - diluted

65,188,907

63,749,724

65,556,852

63,648,912

Weighted Average Amounts Outstanding for FFO and AFFO Purposes:

Common Shares - basic

64,380,566

62,897,982

64,733,309

62,733,265

OP Units - basic

15,930,910

18,873,793

16,048,621

18,939,596

Total Common Shares and OP Units

80,311,476

81,771,775

80,781,930

81,672,861

Shares and OP Units issued from

assumed conversion of:

- Restricted Shares

51,954

70,030

75,837

138,320

- Stock Options

756,387

781,712

747,706

777,327

- Performance Units

Total Common Shares and Units - diluted

81,119,817

82,623,517

81,605,473

82,588,508

Period Ending Amounts Outstanding:

Common Shares

64,700,976

OP Units

15,895,537

Total Common Shares and Units

80,596,513

 

DUPONT FABROS TECHNOLOGY, INC.

2013 Guidance

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

Expected Q3 2013

per share

Expected 2013

per share (1)

Net income per common share and unit - diluted

   $0.18 to $0.20

$0.66 to $0.76

Depreciation and amortization, net

0.29

1.16

FFO per share - diluted (2)

   $0.47 to $0.49

  $1.82 to $1.92

 

2013 Debt Assumptions

Weighted average debt outstanding

$740.0 million

Weighted average interest rate

7.00%

Total interest costs

$51.8 million

Amortization of deferred financing costs (3)

3.2 million

      Interest expense capitalized

(1.9) million

      Deferred financing costs amortization capitalized (4)

(0.1) million

Total interest expense after capitalization

$53.0 million

2013 Other Guidance Assumptions

Total revenues

$365 to $380 million

Base rent (included in total revenues)

$245 to $255 million

Straight-line revenues (included in base rent)

$7 to $12 million

General and administrative expense

$18 million

Investments in real estate - development (4)

$80 million

Improvements to real estate excluding development

$6 million

Preferred stock dividends

$27 million

Annualized common stock dividend

$1.00 per share

Weighted average common shares and OP units - diluted

81 million

Common share repurchase

$38 million

Acquisition of income producing properties

No amounts budgeted

(1) Excludes contemplated refinancing of $550 million unsecured notes. If refinanced in December 2013, approximately $0.37 per share charge to earnings per share and FFO will be recorded. This includes approximately $23.4 million redemption fee (4.25% of principal) and $6.3 million of unamortized deferred financing costs.

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

(3) Excludes $1.7 million write-off of deferred financing costs related to the payoff of a secured loan.

(4) Represents cash spend expected in 2013 for the ACC7 development.

 

 

 

SOURCE DuPont Fabros Technology, Inc.



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