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DuPont Fabros Technology, Inc. Reports Third Quarter 2012 Results



      DuPont Fabros Technology, Inc. Reports Third Quarter 2012 Results

Revenues up 16%

ACC6 Phase I 100% Leased

PR Newswire

WASHINGTON, Oct. 24, 2012

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

  o 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.
  o Third quarter 2012 activity:

       o Signed two leases totaling 3.47 megawatts ("MW") and 18,116 raised
         square feet. 
       o Commenced four leases totaling 5.85 MW and 30,369 raised square feet.
       o 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.

  o Subsequent to the third quarter:

       o 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:

  o 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).
  o 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:

  o 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).
  o 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:

  o Signed two leases totaling 3.47 MW and 18,116 raised square feet with an
    average lease term of 5.5 years.

       o 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.
       o 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. 

  o Extended the maturity of three leases totaling 9.91 MW and 68,687 raised
    square feet by a weighted average of 6.6 years. 

       o 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.
       o 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. 
       o 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. 

  o 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:

  o 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. 
  o 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. 
  o 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  Nine months ended September
                     30,                           30,
                     2012           2011           2012            2011
Revenues:
Base rent            $              $              $               $          
                      56,641         48,422         165,584         144,125
Recoveries from      27,759         24,585         77,573          67,052
tenants
Other revenues       1,046          777            3,329           1,862
Total revenues       85,446         73,784         246,486         213,039
Expenses:
Property operating   24,524         21,526         70,360          58,372
costs
Real estate taxes    4,631          1,285          9,215           4,464
and insurance
Depreciation and     22,531         18,396         66,885          54,600
amortization
General and          3,973          3,834          13,714          12,516
administrative
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   (874 )         (490 )         (2,677 )        (1,636 )
costs
Net income           16,278         23,955         45,130          63,861
Net income
attributable to
redeemable
noncontrolling       (2,181 )       (4,435 )       (5,757 )        (12,203 )
     interests –
operating
partnership
Net income
attributable to      14,097         19,520         39,373          51,658
controlling
interests
Preferred stock      (6,811 )       (5,572 )       (20,241 )       (15,301 )
dividends
Net income           $              $              $               $          
attributable to         7,286        13,948         19,132            36,357
common shares
Earnings per share –
basic:
Net income           $              $              $               $          
attributable to           0.11           0.22           0.30              0.59
common shares
Weighted average
common shares        62,994,500     61,973,869     62,820,979      60,912,532
outstanding
Earnings per share –
diluted:
Net income           $              $              $               $          
attributable to           0.11           0.22           0.30              0.59
common shares
Weighted average
common shares        63,881,663     62,983,474     63,727,131      61,987,534
outstanding
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          Nine months ended
                          September 30,               September 30,
                          2012           2011         2012         2011
Net income                $              $            $            $        
                          16,278         23,955          45,130     63,861
Depreciation and          22,531         18,396       66,885       54,600
amortization
Less:  Non real estate
depreciation and          (251)          (198)        (785 )       (600)
amortization     
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      31,747         36,581          90,989     102,560
units
Straight-line revenues    (5,598)        (6,566)      (16,824 )    (29,518)
Amortization of lease
contracts above and below (763)          (829)        (2,595 )     (1,900)
      market value
Compensation paid with    1,660          1,510        5,333        4,433
Company common shares
AFFO                      $              $            $            $        
                          27,046         30,696          76,903     75,575
FFO attributable to
common shares and OP      $              $            $            $          
units                     0.38             0.44              1.10     1.24
     per share - diluted
AFFO per share - diluted  $              $            $            $          
                          0.33             0.37              0.93     0.92
Weighted average common
shares and OP units       82,713,851     82,474,712   82,630,663   82,433,216
     outstanding -
diluted

    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
(1) 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,     December 31,
                                                2012              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      204,961           320,611
development
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   475,513           461,739
partnership
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           185,000           185,000
                         outstanding at
September 30, 2012 and December 31, 2011
Series B cumulative redeemable perpetual
preferred stock, 6,650,000 issued and 
                         outstanding at
September 30, 2012 and 4,050,000 shares issued  166,250           101,250
and 
                         outstanding at
December 31, 2011
Common stock, $.001 par value, 250,000,000
shares authorized, 63,296,253 shares issued
and 
                         outstanding at         63                63
September 30, 2012 and 62,914,987 shares issued
and 
                         outstanding at
December 31, 2011
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 (2,595 )           (1,900 )
below market value
Compensation paid with Company common     5,333              4,433
shares
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      (2,654 )           (23,967 )
under development
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       62,685             97,450
offering costs
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 –     (7,388 )           (7,641)
operating partnership
Net cash (used in) provided by financing  (13,630 )          50,671
activities
Net increase (decrease) in cash and cash  314                (195,123 )
equivalents
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  $             161  $          1,192
real estate under development
Construction costs payable capitalized    $        10,549    $        25,777
for real estate under development
Redemption of operating partnership units $          5,700   $        58,300
Adjustments to redeemable noncontrolling  $        21,643    $       (17,401)
interests – operating partnership

 

DUPONT FABROS TECHNOLOGY, INC.
Operating Properties
As of September 30, 2012
                                                 Gross      Raised     Critical  %       %
 Property   Property Location       Year Built/  Building   Square     Load      Leased
                                    Renovated    Area       Feet       MW        (5)     Commenced
                                                 (2)        (3)        (4)               (5)
                                                                                  
                                                                                          
Stabilized
(1)
ACC2        Ashburn, VA                          87,000     53,000     10.4      100%    100%
                                    2001/2005
ACC3        Ashburn, VA                          147,000    80,000     13.9      100%    100%
                                    2001/2006
ACC4        Ashburn, VA             2007         347,000    172,000    36.4      100%    100%
ACC5        Ashburn, VA                          360,000    176,000    36.4      100%    100%
                                    2009-2010
ACC6 Phase  Ashburn, VA             2011         131,000    65,000     13.0      100%    100%
I
CH1 Phase   Elk Grove Village, IL   2008         285,000    122,000    18.2      98%     98%
I
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    Elk Grove Village, IL  2012         200,000    109,000    18.2      86%     71%
II
NJ1 Phase    Piscataway, NJ         2010         180,000    88,000     18.2      36%     36%
I 
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.
    Gross building area is the entire building area, including raised square
    footage (the portion of gross building area where the tenants' computer
(2) 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.
    Raised square footage is that portion of gross building area where the
(3) tenants locate their computer servers. The Company considers raised square
    footage to be the net rentable square footage in each of its facilities.
    Critical load (also referred to as IT load or load used by tenants'
(4) 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).
    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
(5) 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.
                          Raised
 Year of    Number        Square Feet      % of Leased  Total kW     % of       % of
Lease       of Leases     Expiring         Raised       of Expiring  Leased kW  Annualized
Expiration  Expiring (1)  (in thousands)   Square Feet  Leases (3)              Base Rent
                          (2)                                         
                                                                                 
                           
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  20            270              27.2%        44,597       25.5%      25.7%
(5)
Total       82            993              100%         174,830      100%       100%

    Represents 33 tenants with 82 lease expiration dates, including two leases
(1) 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).
    Raised square footage is that portion of gross building area where the
(2) 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.
    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
(4) 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. 
    Reflects the fact that, in October 2012, the Company entered into a lease
    amendment with one tenant, which lease provided for scheduled lease
(5) 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)
                                   Gross      Raised    Critical  Estimated  Construction     %
Property        Property Location  Building   Square    Load      Total      in Progress &
                                   Area (1)   Feet (2)  MW (3)    Cost (4)   Land Held for    Pre-leased
                                                                             Development (5)
                                                                                               
                                                                              
Current Development Projects
ACC6 Phase II   Ashburn, VA        131,000    65,000    13.0      $115,000   $                67%
                                                                             88,243
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    Ashburn, VA        360,000    176,000   36.4                 10,191
/II
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

 

    Gross building area is the entire building area, including raised square
    footage (the portion of gross building area where the tenants' computer
(1) 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.
    Raised square footage is that portion of gross building area where the
(2) tenants locate their computer servers. The Company considers raised square
    footage to be the net rentable square footage in each of its facilities.
    Critical load (also referred to as IT load or load used by tenants'
(3) 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).
    Current development projects include land, capitalization for construction
(4) and development, capitalized interest and capitalized operating carrying
    costs, as applicable, upon completion.
    Amount capitalized as of September 30, 2012.  Future Phase II development
(5) 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              $               20 %              3.2 %      2.2
                      140,900
Unsecured            550,000         80 %              8.5 %      4.5
Total                $               100 %             7.4 %      4.0
                      690,900
Fixed Rate Debt:
Unsecured Notes      $               80 %              8.5 %      4.5
                      550,000
Fixed Rate Debt      550,000         80 %              8.5 %      4.5
Floating Rate Debt:
Unsecured Credit     —               —                 —          3.5
Facility
ACC5 Term Loan       140,900         20 %              3.2 %      2.2
Floating Rate Debt   140,900         20 %              3.2 %      2.2
Total                $               100 %             7.4 %      4.0
                      690,900
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      $            0.2 %         3.2 %
                                              1,300
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        $            100 %         7.4 %
                                              690,900
(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       24.5%             26.3%
exceed 60%)
Secured Debt to Total Assets (not to exceed   5.0%              5.3%
40%)
Total Unsecured Assets to Unsecured Debt (not 345.0%            329.5%
less than 150%)
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")   23 %  18,832
Units
Total Shares and     100 % 82,128
Units
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                            $              100.0 %
                                                       3,115,882

 

DUPONT FABROS TECHNOLOGY, INC.
Common Share and OP Unit
Weighted Average Amounts Outstanding
                                                        YTD         YTD

                                Q3 2012     Q3 2011     Q3 2012     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      81,826,688  81,465,107  81,724,511  81,358,214
Units
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 - 82,713,851  82,474,712  82,630,663  82,433,216
diluted
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      Expected 2012

                                       per share             per share
Net income per common share and unit –    $0.11 to $0.15       $0.40 to $0.44
diluted
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              (0.3) million
capitalized
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                   $4 million
development
Preferred stock dividends                              $27 million
Annualized common stock dividend                          $0.60 per share
Weighted average common shares and OP units -             83 million
diluted
(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.

Website: htp://www.dft.com
Contact: Investor Relations: Mr. Mark L. Wetzel, EVP, CFO & Treasurer,
+1-202-728-0033, mwetzel@dft.com; or Mr. Christopher A. Warnke, Manager,
Investor Relations,+1-202-478-2330, investorrelations@dft.com
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