Market Overview

DuPont Fabros Technology, Inc. Reports Third Quarter 2012 Results

Share:

Revenues up 16%

ACC6 Phase I 100% Leased

WASHINGTON, Oct. 24, 2012 /PRNewswire/ -- DuPont Fabros Technology, Inc. (NYSE: DFT) today reported results for the quarter ended September 30, 2012.  All per share results are reported on a fully diluted basis.

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

Highlights

  • As of today, the company's overall operating portfolio is 85% leased with the stabilized portfolio at 96% leased, and the three properties remaining in the non-stabilized portfolio at 55% leased.  In the development portfolio, ACC6 Phase II is 67% pre-leased.
  • Third quarter 2012 activity:
    • Signed two leases totaling 3.47 megawatts ("MW") and 18,116 raised square feet. 
    • Commenced four leases totaling 5.85 MW and 30,369 raised square feet.
    • Extended the maturity of three leases totaling 9.91 MW and 68,687 raised square feet by a weighted average of  6.6 years.  These leases were originally scheduled to expire from 2013 to 2017.
  • Subsequent to the third quarter:
    • Extended the maturity of one lease totaling 13.90 MW and 80,000 raised square feet by 8.2 years. This lease was originally scheduled to expire from 2016 to 2018. 

Hossein Fateh, President and Chief Executive Officer, said, "We continue to remain focused on leasing up our available inventory in all of our markets, with ACC6 Phase I in Ashburn, Virginia now 100% leased.  In addition, we made significant progress on extending the lease maturity with three important tenants which includes the extension of the entire ACC3 lease through 2024 to 2026.  As of today, leases that represent less than 15% of our annualized base rent are scheduled to expire prior to January 2017."

Third Quarter 2012 Results

For the quarter ended September 30, 2012, the company reported earnings of $0.11 per share compared to $0.22 per share for the third quarter of 2011.  The decrease of $0.11 in earnings per share is primarily due to lower capitalized interest and higher preferred dividends.  Revenues increased 16%, or $11.6 million, to $85.4 million for the third quarter of 2012 over the third quarter of 2011.  The increase in revenues is primarily due to new leases commencing at our non-stabilized properties partially offset by one lease that expired on April 30, 2012.

Funds from Operations ("FFO") for the quarter ended September 30, 2012 was $0.38 per share compared to $0.44 per share for the third quarter of 2011.  The decrease of $0.06 per share is primarily due to:

  • Higher operating income, excluding depreciation, of $0.06 per share (primarily due to new leases commencing of $0.12 per share offset by unreimbursed property operating expenses, real estate taxes and insurance related to the properties that are not fully leased of $0.06 per share).
  • Higher fixed charges of $0.12 per share (lower capitalized interest expense of $0.10 per share and additional preferred dividends of $0.02 per share).

Nine Months Ended September 30, 2012 Results

For the nine months ended September 30, 2012, the company reported earnings of $0.30 per share compared to $0.59 per share for the year ago period. The decrease of $0.29 in earnings per share is primarily due to lower capitalized interest and higher preferred dividends.  Revenues increased 16%, or $33.4 million, to $246.5 million for the nine months ended September 30, 2012 over the year ago period.  The increase in revenues is primarily due to new leases commencing at our non-stabilized properties partially offset by one lease that expired on April 30, 2012.

FFO for the nine months ended September 30, 2012 was $1.10 per share compared to $1.24 per share for the year ago period.  The decrease of $0.14 per share is primarily due to:

  • Higher operating income, excluding depreciation, of $0.17 per share (primarily due to new leases commencing of $0.29 per share offset by unreimbursed property operating expenses, real estate taxes and insurance of $0.12 per share).
  • Higher fixed charges of $0.31 per share (lower capitalized interest expense of $0.25 per share and additional preferred dividends of $0.06 per share).

Portfolio Update

During the third quarter 2012, the company:

  • Signed two leases totaling 3.47 MW and 18,116 raised square feet with an average lease term of 5.5 years.
    • One lease was at ACC6 Phase I totaling 2.17 MW and 9,966 raised square feet.  This lease commenced in the third quarter of 2012.
    • One lease was at CH1 Phase II totaling 1.30 MW and 8,150 raised square feet.  This lease commenced in the third quarter of 2012. 
  • Extended the maturity of three leases totaling 9.91 MW and 68,687 raised square feet by a weighted average of 6.6 years. 
    • One lease was at VA3 totaling 2.60 MW and 27,436 raised square feet.  This lease was extended from a maturity date of 2013 to maturing in two increments in 2017 and 2020.
    • One lease was at CH1 totaling 3.90 MW and 24,851 raised square feet.  This lease was extended from maturities ranging from 2015 to 2017 to maturities ranging from 2022 to 2024. 
    • One lease was at ACC5 totaling 3.41MW and 16,400 raised square feet.  This lease was extended from maturities ranging from 2015 to 2017 to maturities ranging from 2022 to 2024. 
  • Subsequent to the third quarter, the company extended the lease at ACC3 totaling 13.90 MW and 80,000 raised square feet by 8.2 years. 

Year-to-date, the company:

  • Signed nine leases totaling 27.86 MW and 139,713 raised square feet with an average lease term of 11.4 years as compared to thirteen leases, 23.62 MW and 125,716 raised square feet for the prior year earnings release period. 
  • Commenced thirteen leases totaling 30.89 MW and 162,855 raised square feet as compared to eleven leases, 13.46 MW and 65,093 raised square feet for the prior year earnings release period. 
  • Signed four lease extensions totaling 23.81 MW and 148,687 raised square feet for a weighted average additional 7.5 years as compared to one lease extension, 9.60 MW and 90,000 raised square feet for the prior year earnings release period. 

2012 Guidance

The company is tightening its 2012 FFO guidance range to $1.48 to $1.52 per share from $1.47 to $1.54 per share.  The 2012 updated lower end of the guidance range assumes no additional leases commencing this year.

The company has established an FFO guidance range of $0.38 to $0.42 per share for the fourth quarter of 2012. 

Third Quarter 2012 Conference Call and Webcast Information

The company will host a conference call to discuss these results on Thursday, October 25, 2012 at 10:00 a.m. ET. To access the live call, please visit the Investor Relations section of the company's website at www.dft.com or dial 1-800-860-2442 (domestic) or 1-412-858-4600 (international).  A replay will be available for seven days by dialing 1-877-344-7529 (domestic) or 1-412-317-0088 (international) using passcode 10019215.  The webcast will be archived on the company's website for one year at www.dft.com on the Presentations & Webcasts page.

Fourth Quarter 2012 Conference Call

DuPont Fabros Technology, Inc. expects to announce fourth quarter 2012 results on Tuesday, February 5, 2013 and to host a conference call to discuss those results at 10:00 a.m. ET on Wednesday, February 6, 2013.

About DuPont Fabros Technology, Inc.

DuPont Fabros Technology, Inc. (NYSE: DFT) is a leading owner, developer, operator and manager of large multi-tenant wholesale data centers.  The Company's facilities are designed to offer highly specialized, efficient, carrier-neutral and safe computing environments in a low-cost operating model.  The Company's customers outsource their mission critical applications and include national and international enterprises across numerous industries, such as technology, Internet content providers, media, communications, cloud-based, healthcare and financial services.  The Company's ten data centers are located in four major U.S. markets, which total 2.4 million gross square feet and 205 megawatts of available critical load to power the servers and computing equipment of its customers.  DuPont Fabros Technology, Inc., a real estate investment trust (REIT) is headquartered in Washington, DC.  For more information, please visit www.dft.com.

Forward-Looking Statements

Certain statements contained in this press release may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  The matters described in these forward-looking statements include expectations regarding future events, results and trends and are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond the company's control.  The company faces many risks that could cause its actual performance to differ materially from the results contemplated by its forward-looking statements, including, without limitation, the risk that its assumptions underlying its full year and fourth quarter 2012 FFO guidance are not realized, the risks related to the leasing of available space to third-party tenants, including delays in executing new leases and failure to negotiate leases on terms that will enable it to achieve its expected returns, the risk that the company may be unable to obtain new financing on favorable terms to facilitate, among other things, future development projects, the risks commonly associated with construction and development of new facilities (including delays and/or cost increases associated with the completion of new developments), risks relating to obtaining required permits and compliance with permitting, zoning, land-use and environmental requirements, the risk that the company will not declare and pay dividends as anticipated for 2012 and the risk that the company may not be able to maintain its qualification as a REIT for federal tax purposes.  The periodic reports that the company files with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2011 and its quarterly reports on Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012, contain detailed descriptions of these and many other risks to which the company is subject.  These reports are available on our website at www.dft.com.  Because of the risks described above and other unknown risks, the company's actual results, performance or achievements may differ materially from the results, performance or achievements contemplated by its forward-looking statements.  The information set forth in this news release represents management's expectations and intentions only as of the date of this press release.  The company assumes no responsibility to issue updates to the contents of this press release.

 

DUPONT FABROS TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

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










Three months ended September 30,


Nine months ended September 30,


2012


2011


2012


2011

Revenues:








Base rent

$              56,641


$              48,422


$            165,584


$            144,125

Recoveries from tenants

27,759


24,585


77,573


67,052

Other revenues

1,046


777


3,329


1,862









Total revenues

85,446


73,784


246,486


213,039

Expenses:








Property operating costs

24,524


21,526


70,360


58,372

Real estate taxes and insurance

4,631


1,285


9,215


4,464

Depreciation and amortization

22,531


18,396


66,885


54,600

General and administrative

3,973


3,834


13,714


12,516

Other expenses

734


441


2,146


958

Total expenses

56,393


45,482


162,320


130,910









Operating income

29,053


28,302


84,166


82,129

Interest income

33


71


112


474

Interest:








Expense incurred

(11,934 )


(3,928 )


(36,471 )


(17,106 )

Amortization of deferred financing costs

(874 )


(490 )


(2,677 )


(1,636 )

Net income

16,278


23,955


45,130


63,861

Net income attributable to redeemable noncontrolling 
     interests – operating partnership

(2,181 )


(4,435 )


(5,757 )


(12,203 )









Net income attributable to controlling interests

14,097


19,520


39,373


51,658

Preferred stock dividends

(6,811 )


(5,572 )


(20,241 )


(15,301 )

Net income attributable to common shares

$                7,286


$              13,948


$              19,132


$              36,357









Earnings per share – basic:








Net income attributable to common shares

$                  0.11


$                  0.22


$                  0.30


$                  0.59

Weighted average common shares outstanding

62,994,500


61,973,869


62,820,979


60,912,532

Earnings per share – diluted:








Net income attributable to common shares

$                  0.11


$                  0.22


$                  0.30


$                  0.59

Weighted average common shares outstanding

63,881,663


62,983,474


63,727,131


61,987,534

Dividends declared per common share

$                  0.15


$                  0.12


$                  0.42


$                  0.36

 

DUPONT FABROS TECHNOLOGY, INC.

RECONCILIATIONS OF NET INCOME TO FFO AND AFFO (1)

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







Three months ended September 30,


Nine months ended September 30,


2012


2011


2012


2011

Net income

$         16,278


$         23,955


$              45,130


$          63,861

Depreciation and amortization

22,531


18,396


66,885


54,600

Less:  Non real estate depreciation and amortization     

(251)


(198)


(785 )


(600)

FFO

38,558


42,153


111,230


117,861

Preferred stock dividends

(6,811)


(5,572)


(20,241 )


(15,301)









FFO attributable to common shares and OP units

$         31,747


$         36,581


$              90,989


$        102,560









Straight-line revenues

(5,598)


(6,566)


(16,824 )


(29,518)

Amortization of lease contracts above and below
      market value

(763)


(829)


(2,595 )


(1,900)

Compensation paid with Company common shares

1,660


1,510


5,333


4,433









AFFO

$         27,046


$         30,696


$              76,903


$          75,575









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

$             0.38


$             0.44


$                  1.10


$              1.24









AFFO per share - diluted

$             0.33


$             0.37


$                  0.93


$              0.92









Weighted average common shares and OP units 
     outstanding - diluted

82,713,851


82,474,712


82,630,663


82,433,216









(1)

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




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




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




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



 

DUPONT FABROS TECHNOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands except share data)










September 30,
2012


December 31,
2011


(unaudited)



ASSETS




Income producing property:




Land

$           73,197


$           63,393

Buildings and improvements

2,313,693


2,123,377


2,386,890


2,186,770

Less: accumulated depreciation

(304,692 )


(242,245 )

Net income producing property

2,082,198


1,944,525

Construction in progress and land held for development

204,961


320,611

Net real estate

2,287,159


2,265,136

Cash and cash equivalents

14,716


14,402

Restricted cash


174

Rents and other receivables

3,056


1,388

Deferred rent

143,686


126,862

Lease contracts above market value, net

10,530


11,352

Deferred costs, net

37,160


40,349

Prepaid expenses and other assets

32,092


31,708

Total assets

$      2,528,399


$      2,491,371





LIABILITIES AND STOCKHOLDERS' EQUITY




Liabilities:




Line of credit

$                  —


$           20,000

Mortgage notes payable

140,900


144,800

Unsecured notes payable

550,000


550,000

Accounts payable and accrued liabilities

23,694


22,955

Construction costs payable

10,549


20,300

Accrued interest payable

14,270


2,528

Dividend and distribution payable

18,071


14,543

Lease contracts below market value, net

14,896


18,313

Prepaid rents and other liabilities

29,832


29,058

Total liabilities

802,212


822,497

Redeemable noncontrolling interests—operating partnership

475,513


461,739

Commitments and contingencies


Stockholders' equity:




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




Series A cumulative redeemable perpetual preferred stock, 7,400,000 issued and 
                         outstanding at September 30, 2012 and December 31, 2011

185,000


185,000

Series B cumulative redeemable perpetual preferred stock, 6,650,000 issued and 
                         outstanding at September 30, 2012 and 4,050,000 shares issued and 
                         outstanding at December 31, 2011

166,250


101,250

Common stock, $.001 par value, 250,000,000 shares authorized, 63,296,253 shares issued and 
                         outstanding at September 30, 2012 and 62,914,987 shares issued and 
                         outstanding at December 31, 2011

63


63

Additional paid in capital

899,361


927,902

Retained earnings (accumulated deficit)


(7,080 )

Total stockholders' equity

1,250,674


1,207,135

Total liabilities and stockholders' equity

$      2,528,399


$      2,491,371





 

DUPONT FABROS TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in thousands)












Nine months ended September 30,



2012


2011


Cash flow from operating activities





Net income

$        45,130


$        63,861


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





Depreciation and amortization

66,885


54,600


Straight line rent

(16,824 )


(29,518 )


Amortization of deferred financing costs

2,677


1,636


Amortization of lease contracts above and below market value

(2,595 )


(1,900 )


Compensation paid with Company common shares

5,333


4,433


Changes in operating assets and liabilities





Restricted cash

174


223


Rents and other receivables

(1,668 )


954


Deferred costs

(898 )


(1,672 )


Prepaid expenses and other assets

(6,302 )


(2,903 )


Accounts payable and accrued liabilities

739


(1,728 )


Accrued interest payable

11,742


11,403


Prepaid rents and other liabilities

(1,653 )


3,697


Net cash provided by operating activities

102,740


103,086


Cash flow from investing activities





Investments in real estate – development

(82,754 )


(312,056 )


Land acquisition costs


(9,507 )


Interest capitalized for real estate under development

(2,654 )


(23,967 )


Improvements to real estate

(3,333 )


(3,147 )


Additions to non-real estate property

(55 )


(203 )


Net cash used in investing activities

(88,796 )


(348,880 )


Cash flow from financing activities





Issuance of preferred stock, net of offering costs

62,685


97,450


Line of credit:





Proceeds

15,000



Repayments

(35,000 )



Mortgage notes payable:





Repayments

(3,900 )


(3,900 )


Return of escrowed proceeds


1,104


Exercises of stock options

868


596


Payments of financing costs

(2,084 )


(1,352 )


Dividends and distributions:





Common shares

(24,616 )


(21,833 )


Preferred shares

(19,195 )


(13,753 )


Redeemable noncontrolling interests – operating partnership

(7,388 )


(7,641)


Net cash (used in) provided by financing activities

(13,630 )


50,671


Net increase (decrease) in cash and cash equivalents

314


(195,123 )


Cash and cash equivalents, beginning

14,402


226,950


Cash and cash equivalents, ending

$        14,716


$        31,827







Supplemental information:





Cash paid for interest

$        27,384


$        29,670


Deferred financing costs capitalized for real estate under development

$             161


$          1,192


Construction costs payable capitalized for real estate under development

$        10,549


$        25,777


Redemption of operating partnership units

$          5,700


$        58,300


Adjustments to redeemable noncontrolling interests – operating partnership

$        21,643


$       (17,401)



 

DUPONT FABROS TECHNOLOGY, INC.


Operating Properties

As of September 30, 2012
















 Property

 


Property Location

 


Year Built/
Renovated

 


Gross
Building
Area

(2)

 


Raised
Square
Feet

(3)

 


Critical
Load
MW
(4)

 


%
Leased
(5)

 


%

Commenced
(5)

 

Stabilized (1)















ACC2


Ashburn, VA


      2001/2005


87,000


53,000


10.4


100%


100%

ACC3


Ashburn, VA


      2001/2006


147,000


80,000


13.9


100%


100%

ACC4


Ashburn, VA


2007


347,000


172,000


36.4


100%


100%

ACC5


Ashburn, VA


      2009-2010


360,000


176,000


36.4


100%


100%

ACC6 Phase I

Ashburn, VA


2011


131,000


65,000


13.0


100%


100%

CH1 Phase I


Elk Grove Village, IL


2008


285,000


122,000


18.2


98%


98%

VA3


Reston, VA


2003


256,000


147,000


13.0


56%


56%

VA4


Bristow, VA


2005


230,000


90,000


9.6


100%


100%

Subtotal— stabilized




1,843,000


905,000


150.9


96%


96%
















Completed not Stabilized 













CH1 Phase II


Elk Grove Village, IL


2012


200,000


109,000


18.2


86%


71%

NJ1 Phase I 


Piscataway, NJ


2010


180,000


88,000


18.2


36%


36%

SC1 Phase I


Santa Clara, CA


2011


180,000


88,000


18.2


44%


44%

Subtotal — non-stabilized




560,000


285,000


54.6


55%


50%

Total Operating Properties




2,403,000


1,190,000


205.5


85%


84%

 

(1)

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

(2)

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

(3)

Raised square footage is that portion of gross building area where the tenants locate their computer servers. The Company considers raised square footage to be the net rentable square footage in each of its facilities.

(4)

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

(5)

Percentage leased is expressed as a percentage of critical load that is subject to an executed lease. Percentage commenced is expressed as a percentage of critical load where the lease has commenced under generally accepted accounting principles. Leases executed as of September 30, 2012 (including one lease amendment executed October 2012) represent $229 million of base rent on a straight-line basis and $225 million on a cash basis over the next twelve months.

 

DUPONT FABROS TECHNOLOGY, INC.


Lease Expirations

As of September 30, 2012


     The following table sets forth a summary schedule of lease expirations of the operating properties for each of the ten calendar years beginning with 2012. The information set forth in the table below assumes that tenants exercise no renewal options and takes into account tenants' early termination options.














 Year of Lease Expiration

 


Number
of Leases
Expiring (1)

 


Raised
Square Feet
Expiring
(in thousands) 
(2)

 


% of Leased
Raised
Square Feet

 


Total kW
of Expiring
Leases (3)

 


% of
Leased kW

 


% of
Annualized
Base Rent

 

2012







2013 (4)


2


8


0.8%


1,567


0.9%


0.9%

2014


6


35


3.5%


6,287


3.6%


3.7%

2015


4


70


7.0%


13,812


7.9%


7.1%

2016 (5)


4


32


3.2%


4,686


2.7%


2.6%

2017 (5)


9


66


6.7%


11,470


6.6%


6.3%

2018 (5)


10


118


11.9%


24,511


14.0%


14.3%

2019


11


168


16.9%


31,035


17.7%


16.3%

2020


9


96


9.7%


15,196


8.7%


9.2%

2021


7


130


13.1%


21,669


12.4%


13.9%

After 2021 (5)


20


270


27.2%


44,597


25.5%


25.7%

Total


82


993


100%


174,830


100%


100%














(1)

Represents 33 tenants with 82 lease expiration dates, including two leases that have not yet commenced as of October 24, 2012 for one existing tenant. Top three tenants represent 47% of annualized base rent as of September 30, 2012 (including one lease amendment executed October 2012).

(2)

Raised square footage is that portion of gross building area where the tenants locate their computer servers. The Company considers raised square footage to be the net rentable square footage in each of its facilities.

(3)

One MW is equal to 1,000 kW.

(4)

One lease has an option to terminate on six months notice and has a scheduled maturity on September 30, 2013 with no notice received as of today.  Notice has been provided on the second lease and it will expire on December 31, 2013, representing 2,800 raised square feet, 430 kW of critical load and 0.2% of annualized base rent. 

(5)

Reflects the fact that, in October 2012, the Company entered into a lease amendment with one tenant, which lease provided for scheduled lease expirations of 13,900 kW of critical load between 2016 and 2018, to extend the term of each lease expiration by 8.2 years.  This lease represents 80,000 raised square feet and 8.0% of leased raised square feet as of September 30, 2012. 


 

DUPONT FABROS TECHNOLOGY, INC.


Development Projects

As of September 30, 2012

($ in thousands)
















Property

 


Property Location

 


Gross
Building
Area (1)

 


Raised
Square
Feet (2)

 


Critical
Load
MW (3)

 


Estimated Total
Cost (4)

 


Construction
in Progress &
Land Held for
Development (5)

 


%

Pre-leased

 














Current Development Projects













ACC6 Phase II


Ashburn, VA


131,000


65,000


13.0


$115,000


$           88,243


67%
















Future Development Projects/Phases













SC1 Phase II


Santa Clara, CA


180,000


88,000


18.2




61,653



NJ1 Phase II


Piscataway, NJ


180,000


88,000


18.2




39,212







360,000


176,000


36.4




100,865


















Land Held for Development













ACC7 Phase I /II


Ashburn, VA


360,000


176,000


36.4




10,191



ACC8


Ashburn, VA


100,000


50,000


10.4




3,670



SC2 Phase I/II


Santa Clara, CA


300,000


171,000


36.4




1,992






















760,000


397,000


83.2




15,853

































Total




1,251,000


638,000


132.6




$         204,961


















 

(1)

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

(2)

Raised square footage is that portion of gross building area where the tenants locate their computer servers. The Company considers raised square footage to be the net rentable square footage in each of its facilities.

(3)

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

(4)

Current development projects include land, capitalization for construction and development, capitalized interest and capitalized operating carrying costs, as applicable, upon completion.

(5)

Amount capitalized as of September 30, 2012.  Future Phase II development projects include only land, shell, underground work and capitalized interest through Phase I opening.


 

DUPONT FABROS TECHNOLOGY, INC.


Debt Summary as of September 30, 2012

($ in thousands)










Amounts

 


% of Total

 


Rates

 


Maturities
(years)

Secured

$          140,900


20 %


3.2 %


2.2

Unsecured

550,000


80 %


8.5 %


4.5

Total

$          690,900


100 %


7.4 %


4.0

Fixed Rate Debt:








Unsecured Notes

$          550,000


80 %


8.5 %


4.5

Fixed Rate Debt

550,000


80 %


8.5 %


4.5









Floating Rate Debt:








Unsecured Credit Facility




3.5

ACC5 Term Loan

140,900


20 %


3.2 %


2.2

Floating Rate Debt

140,900


20 %


3.2 %


2.2

Total

$          690,900


100 %


7.4 %


4.0









Note: The Company capitalized interest and deferred financing cost amortization of $1.2 million and $2.8 million
         during the three and nine months ended September 30, 2012, respectively.

 

Debt Maturity as of September 30, 2012

($ in thousands)












Year


Fixed Rate


Floating Rate


Total


% of Total


Rates

2012


$             —


$     1,300


$          1,300


0.2 %


3.2 %

2013



5,200


5,200


0.8 %


3.2 %

2014



134,400(2)


134,400


19.5 %


3.2 %

2015


125,000 (1)



125,000


18.1 %


8.5 %

2016


125,000 (1)



125,000


18.1 %


8.5 %

2017


300,000 (1)



300,000


43.3 %


8.5 %

Total


$      550,000


$ 140,900


$      690,900


100 %


7.4 %












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

(2) Remaining principal payment due on December 2, 2014 with no extension option.

 

DUPONT FABROS TECHNOLOGY, INC.


Selected Unsecured Debt Metrics






    9/30/12


    12/31/11

Interest Coverage Ratio (not less than 2.0)

3.9


3.5





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

24.5%


26.3%





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

5.0%


5.3%





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

345.0%


329.5%









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

 

Capital Structure as of September 30, 2012

(in thousands except per share data)



















Mortgage Notes Payable




$         140,900




Unsecured Notes




550,000




Total Debt




690,900


22.2 %


Common Shares

77 %

63,296






Operating Partnership ("OP") Units

23 %

18,832






Total Shares and Units

100 %

82,128






Common Share Price at September 30, 2012 

$       25.25






Common Share and OP Unit Capitalization


$       2,073,732





Preferred Stock ($25 per share liquidation preference)

 

351,250





Total Equity




2,424,982


77.8 %


Total Market Capitalization 


$       3,115,882


100.0 %

















 

DUPONT FABROS TECHNOLOGY, INC.


Common Share and OP Unit

Weighted Average Amounts Outstanding










 

Q3 2012


 

Q3 2011


YTD

Q3 2012


YTD

Q3 2011

Weighted Average Amounts

Outstanding for EPS Purposes:
















Common Shares – basic

62,994,500


61,973,869


62,820,979


60,912,532

Shares issued from assumed conversion of:








- Restricted Shares

113,617


243,681


130,085


268,479

- Stock Options

773,546


765,924


776,067


806,523

- Performance Units




Total Common Shares - diluted

63,881,663


62,983,474


63,727,131


61,987,534

Weighted Average Amounts Outstanding  
     for FFO and AFFO Purposes:
















Common Shares – basic

62,994,500


61,973,869


62,820,979


60,912,532

OP Units – basic

18,832,188


19,491,238


18,903,532


20,445,682

Total Common Shares and OP Units

81,826,688


81,465,107


81,724,511


81,358,214

Shares and OP Units issued from








    assumed conversion of:








- Restricted Shares

113,617


243,681


130,085


268,479

- Stock Options

773,546


765,924


776,067


806,523

- Performance Units




Total Common Shares and Units - diluted

82,713,851


82,474,712


82,630,663


82,433,216

Period Ending Amounts Outstanding:

 








Common Shares

63,296,253







OP Units

18,832,188







Total Common Shares and Units

82,128,441








 

DUPONT FABROS TECHNOLOGY, INC.


2012 Guidance as of October 24, 2012

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






Expected Q4 2012

per share


Expected 2012

per share

Net income per common share and unit – diluted

   $0.11 to $0.15


  $0.40 to $0.44

Depreciation and amortization, net

0.27


1.08





FFO per share – diluted (1)

   $0.38 to $0.42


  $1.48 to $1.52










 

2012 Debt Assumptions



Weighted average debt outstanding

        $692.5 million

Weighted average interest rate

7.54%



Total interest costs

         $52.2 million

Amortization of deferred financing costs

            3.8 million

      Interest expense capitalized

          (4.3) million

      Deferred financing costs amortization capitalized

          (0.3) million

Total interest expense after capitalization

         $51.4 million



2012 Other Guidance Assumptions



Total revenues

         $330 to $335 million

Base rent (included in total revenues)

          $223 to $225 million

Straight-line revenues (included in base rent)

         $20 to $21 million

General and administrative expense

         $18 million

Investments in real estate – development

         $95 million

Improvements to real estate excluding development

         $4 million

Preferred stock dividends

        $27 million

Annualized common stock dividend

           $0.60 per share

Weighted average common shares and OP units - diluted

           83 million



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

 

SOURCE DuPont Fabros Technology, Inc.

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