Exhibit 99.1
| First Quarter 2015 |
| Earnings Release |
| and Supplemental Information |
SCI Phase IIB Santa Clara, CA
DuPont Fabros Technology, Inc. 1212 New York Avenue, NW Suite 900 Washington, D.C. 20005 (202) 728-0044 www.dft.com NYSE: DFT | Investor Relations Contacts: | ||
Jeffrey H. Foster Chief Financial Officer jfoster@dft.com (202) 478-2333 | Christopher A. Warnke Manager, Investor Relations investorrelations@dft.com (202) 478-2330 | ||
First Quarter 2015 Results
| Table of Contents | |||
| Earnings Release | 1-5 | ||
| Consolidated Statements of Operations | 6 | ||
| Reconciliations of Net Income to FFO, Normalized FFO and AFFO | 7 | ||
| Consolidated Balance Sheets | 8 | ||
| Consolidated Statements of Cash Flows | 9 | ||
| Operating Properties | 10 | ||
| Lease Expirations | 11 | ||
| Top Customers | 12 | ||
| Same Store Analysis | 13-14 | ||
| Development Projects | 15 | ||
| Debt Summary and Debt Maturity | 16 | ||
| Selected Unsecured Debt Metrics and Capital Structure | 17 | ||
| Common Share and Operating Partnership Unit Weighted Average Amounts Outstanding | 18 | ||
| 2015 Guidance | 19 | ||
Note: This press release supplement contains certain non-GAAP financial measures that we believe are helpful in understanding our business, as further discussed within this press release supplement. These financial measures, which include Funds From Operations, Normalized Funds From Operations, Adjusted Funds From Operations, Net Operating Income, Cash Net Operating Income, Funds From Operations per share, Normalized Funds From Operations per share and Adjusted Funds From Operations per share, should not be considered as an alternative to net income, operating income, earnings per share or any other GAAP measurement of performance or as an alternative to cash flows from operating, investing or financing activities. Furthermore, these non-GAAP financial measures are not intended to be a measure of cash flow or liquidity. Information included in this supplemental package is unaudited.
NEWS
DUPONT FABROS TECHNOLOGY, INC. REPORTS FIRST QUARTER 2015 RESULTS
2015 FFO and AFFO Guidance midpoints increased by $0.03 and $0.06 per share
SC1 Phase IIB placed into service 100% leased and commenced
WASHINGTON, DC, - May 7, 2015 - DuPont Fabros Technology, Inc. (NYSE: DFT) is reporting results for the quarter ended March 31, 2015. All per share results are reported on a fully diluted basis.
Highlights
| • | As of May 7, 2015, our operating portfolio including the newly opened SC1 Phase IIB was 94% leased and commenced as measured by computer room square feet ("CRSF") and as measured by critical load (in megawatts, or "MW"). |
| • | Quarterly Highlights: |
| • | As previously reported, signed two leases totaling 2.20 MW and 9,039 CRSF. One of these leases is our first mini-wholesale lease. |
| • | As previously reported, renewed two leases with one customer totaling 2.28 MW and 10,800 CRSF. Theses leases were originally scheduled to expire in 2017 and 2019, but have been extended 7.0 years and will now expire in 2024 and 2026. |
| • | Commenced development of ACC7 Phase II, totaling 8.9 MW and 51,000 CRSF. |
| • | Subsequent to the first quarter 2015: |
| • | Signed two leases totaling 4.83 MW and 24,739 CRSF. |
| • | Placed SC1 Phase IIB into service 100% leased, totaling 9.1 MW and 42,000 CRSF. |
Christopher Eldredge, President and Chief Executive Officer, said, "The first ten weeks of my tenure as CEO have been very exciting. Demand for DFT's product remains strong in our prime markets. We continued to experience leasing success in Santa Clara as SC1 Phase IIB opened 100% leased, and we also executed our first lease at CH2. We have also embarked on the development of a strategic plan, the results of which we plan to share with you when complete."
First Quarter 2015 Results
For the quarter ended March 31, 2015, earnings were $0.24 per share compared to $0.30 per share for the first quarter of 2014. The current quarter was negatively impacted by a customer who filed for bankruptcy, resulting in $0.03 per share of revenue not being recognized. Also, the company recognized a $0.07 per share charge for the severance expense and equity accelerations associated with the departure of our former CEO. Excluding these items, earnings per share for the first quarter 2015 increased $0.04 per share, or 13%. Revenues increased 5%, or $5.2 million, to $107.3 million for the first quarter of 2015 over the first quarter of 2014. The increase in revenues was primarily due to new leases commencing, partially offset by impact of the customer in bankruptcy noted above.
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Normalized FFO for the quarter ended March 31, 2015 was $0.61 per share compared to $0.59 per share for the first quarter of 2014. Normalized FFO adds back the $0.07 per share recognized in the first quarter of 2015 for the severance expense and equity accelerations noted above. Normalized FFO increased $0.02 per share, or 3%, from the prior year quarter primarily due to the following:
| • | Increased operating income excluding depreciation of $0.03 per share which includes the negative impact from the bankrupt customer, partially offset by |
| • | Increased interest expense of $0.01 per share due to a higher level of outstanding debt related to development financing. |
Adjusted FFO ("AFFO") for the quarter ended March 31, 2015 was $0.65 per share compared to $0.62 per share in the first quarter of 2014. AFFO increased $0.03 per share, or 5% from the prior year. The increase was primarily due to the following:
| • | Increased Normalized FFO of $0.02 per share. |
| • | Increased add back of straight line revenue as a result of increased cash rents of $0.03 per share, partially offset by |
| • | Increased capitalized leasing commissions of $0.02 per share as a result of a broker commission paid on a renewal. |
The customer for which we increased our bad debt reserve in the fourth quarter of 2014 filed for bankruptcy protection on February 23, 2015. This customer did not pay the base rent owed to us in January and February, but did pay for operating expenses, direct electric and management fees in these months. Post-bankruptcy filing, we have received full rent payments for March, April and May totaling $3.8 million. We did not recognize the March base rent payment as revenue, but instead applied it to the straight-line rent receivable balance that we have on our books for this customer. As of quarter-end, the straight-line rent receivable balance for this customer totaled $8.5 million, of which we have reserved $3.7 million, or 43%. The straight-line receivable is fully reserved for the NJ1 lease. To date, we have also reserved $5.1 million of the note receivable due from this customer, which represents 79% of the outstanding note balance of $6.5 million. In summary, as of March 31, 2015, we had a total of $6.2 million of unreserved receivables on our books from this customer. We will continue to monitor these reserves each quarter. This customer has the following leases with us:
| Property | MW leased | CRSF Leased | Lease Expiration Year | |||||
| ACC4 | 2.28 | 10,800 | 2020 | |||||
| ACC5 | 0.40 | 1,930 | 2027 | |||||
| NJ1 Phase I | 2.28 | 11,000 | 2023 | |||||
| VA3 | 1.30 | 15,122 | 2023 | |||||
| Total | 6.26 | 38,852 | ||||||
Portfolio Update
During the first quarter 2015, we:
| • | Signed two leases with a weighted average lease term of 6.8 years totaling 2.20 MW and 9,039 CRSF. |
| • | One of these leases was at ACC7 totaling 2.00 MW and 8,179 CRSF which commenced in the second quarter of 2015. |
| • | One of these leases is our first mini-wholesale lease at ACC5 totaling 0.20 MW and 860 CRSF which commenced in the first quarter of 2015. |
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| • | Renewed two leases with one customer totaling 2.28 MW and 10,800 CRSF. These leases were originally scheduled to expire in 2017 and 2019, but have been extended 7.0 years and will now expire in 2024 and 2026. Compared to the current rates of these leases, cash base rents will be an average of 1.6% lower upon the expiration of the original lease terms. GAAP base rents will be an average of 9.1% higher immediately. |
Subsequent to the first quarter, we:
| • | Signed two leases with a weighted average lease term of 6.7 years totaling 4.83 MW and 24,739 CRSF. |
| • | One lease was at SC1 Phase IIB totaling 3.41 MW and 15,853 CRSF. This lease commenced in the second quarter of 2015. |
| • | One pre-lease was at CH2 Phase I totaling 1.42 MW and 8,886 CRSF. This lease is projected to commence in the third quarter of 2015 upon the opening of CH2 Phase I. |
| • | Commenced two additional leases at SC1 Phase IIB totaling 5.69 MW and 25,916 CRSF that were executed in the fourth quarter of 2014. |
Year to date, we:
| • | Signed 4 leases with a weighted average lease term of 6.7 years totaling 7.03 MW and 33,778 CRSF that are expected to generate approximately $8.3 million of annualized GAAP base rent revenue which is equivalent to a GAAP rate of $98 per kW per month. |
| • | Commenced 5 leases totaling 11.30 MW and 50,808 CRSF. |
| • | Extended the maturity of two leases totaling 2.28 MW and 10,800 CRSF by a weighted average of 7.0 years. |
Development Update
We placed SC1 Phase IIB (9.1 MW), which is 100% leased and commenced, into service on May 1, 2015. We continue to develop CH2 Phase I (7.1 MW) and ACC7 Phase IIB (8.9 MW). We anticipate that CH2 Phase I, which is 20% pre-leased, will be placed into service in the third quarter of 2015 and that ACC7 Phase IIB will be placed into service in the fourth quarter of 2015.
Balance Sheet and Liquidity
The Board approved a common stock repurchase program of $120 million for 2015, of which we purchased $31.9 million in the first quarter of 2015 at an average price of $31.80. There is $88.1 million remaining under this program for the remainder of 2015.
As of March 31, 2015, we had $410 million of available capacity under our $560 million revolving credit facility. Since quarter-end, we have drawn $30 million on the facility, leaving $380 million available.
Dividend
Our first quarter 2015 dividend of $0.42 per share was paid on April 15, 2015. The anticipated 2015 annualized dividend of $1.68 per share represents an estimated AFFO payout ratio of 66% at the midpoint of our current 2015 guidance.
Second Quarter and Full Year 2015 Guidance
We are increasing our 2015 Normalized FFO guidance range by $0.03 per share from $2.27 to $2.47 per share to $2.30 to $2.50 per share. The increase is due to the following:
| • | $0.03 per share from positive leasing results |
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| • | $0.01 per share from lower shares outstanding after the share repurchase |
| • | $0.01 per share from the bankrupt customer's first quarter payments, partially offset by |
| • | $0.02 per share increased interest expense due to a higher interest rate and earlier timing forecasted for the refinancing of the line, as well as a higher amount of debt forecasted for the year due to the share repurchase. |
Key assumptions included in this guidance are:
| • | Both the higher and lower end of the range assume no additional revenue from the customer who has filed for bankruptcy protection. Remaining contractual revenue from this customer is $0.12 per share in 2015 which consists of $0.09 of base rent and $0.03 of operating expenses and management fee. |
| • | The lower end of this range assumes no new leases commenced other than the CH2 pre-lease. |
| • | The lower end of the range assumes that ACC2 is not re-leased at the end of Yahoo's lease term, which is September 30, 2015, and remains vacant for the remainder of 2015. The current Yahoo! lease generates $0.05 of GAAP revenue per quarter. |
| • | Opening CH2 Phase I in July 2015 and ACC7 Phase II in December 2015. |
| • | Refinancing $200 million of the revolving credit facility in June at a 5.50% interest rate. |
Our Normalized FFO guidance range is $0.61 to $0.63 per share for the second quarter of 2015. The mid-point of this range is $0.01 higher than Normalized FFO per share in the first quarter of 2015. This is due to the following:
| • | Increased base rent of $0.02 per share from the opening of SC1 Phase IIB, partially offset by |
| • | Increased interest expense of $0.01 per share due to the forecasted refinancing of the revolving credit facility. |
We increased our 2015 AFFO guidance range by $0.06 per share from $2.40 to $2.60 per share to $2.46 to $2.66 per share. This is due to the following:
| • | Increased Normalized FFO of $0.03 per share |
| • | Receipt of base rent from the bankrupt customer in March, April and May of $0.03 per share. This is forecasted to be applied to the straight line receivable which increases the add back to AFFO. |
Our AFFO guidance range is $0.65 to $0.69 per share for the second quarter of 2015. The mid-point of the range is$0.02 per share higher than first quarter 2015 AFFO per share. This is due to following:
| • | Increase in mid-point of Normalized FFO per share of $0.01 |
| • | Increased base rent received from the bankrupt customer of $0.01 per share. |
The assumptions underlying Normalized FFO and AFFO guidance can be found on the last page of this earnings release.
First Quarter 2015 Conference Call and Webcast Information
We will host a conference call to discuss these results today, Thursday, May 7, 2015 at 1:30 p.m. ET. To access the live call, please visit the Investor Relations section of our website at www.dft.com or dial 1-877-300-9306 (domestic) or 1-412-902-6613 (international). A replay will be available for seven days by dialing 1-877-344-7529 (domestic) or 1-412-317-0088 (international) using passcode 10062856. The webcast will be archived on our website for one year at www.dft.com on the Presentations & Webcasts page.
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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 11 data centers are located in four major U.S. markets, which total 2.8 million gross square feet and 249 megawatts of available critical load to power the servers and computing equipment of its customers. DuPont Fabros Technology, Inc., a real estate investment trust (REIT), is headquartered in Washington, DC. For more information, please visit www.dft.com.
Forward-Looking Statements
Certain statements contained in this press release may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The matters described in these forward-looking statements include expectations regarding future events, results and trends and are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control. We face many risks that could cause our actual performance to differ materially from the results contemplated by our forward-looking statements, including, without limitation, the risk that the assumptions underlying our full year and second quarter 2015 guidance are not realized, the risks related to the leasing of available space to third-party customers, including delays in executing new leases and failure to negotiate leases on terms that will enable us to achieve our expected returns, risks related to the collection of accounts and notes receivable, the risk that we may be unable to obtain new financing on favorable terms to facilitate, among other things, future development projects, the risks commonly associated with construction and development of new facilities (including delays and/or cost increases associated with the completion of new developments), risks relating to obtaining required permits and compliance with permitting, zoning, land-use and environmental requirements, the risk that we will not declare and pay dividends as anticipated for 2015 and the risk that we may not be able to maintain our qualification as a REIT for federal tax purposes. The periodic reports that we file with the Securities and Exchange Commission, including the annual report on Form 10-K for the year ended December 31, 2014 contain detailed descriptions of these and many other risks to which we are subject. These reports are available on our website at www.dft.com. Because of the risks described above and other unknown risks, our actual results, performance or achievements may differ materially from the results, performance or achievements contemplated by our forward-looking statements. The information set forth in this news release represents our expectations and intentions only as of the date of this press release. We assume no responsibility to issue updates to the contents of this press release.
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DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands except share and per share data)
| Three months ended March 31, | |||||||
| 2015 | 2014 | ||||||
| Revenues: | |||||||
| Base rent | $ | 71,573 | $ | 69,204 | |||
| Recoveries from tenants | 33,305 | 31,689 | |||||
| Other revenues | 2,436 | 1,194 | |||||
| Total revenues | 107,314 | 102,087 | |||||
| Expenses: | |||||||
| Property operating costs | 31,493 | 30,095 | |||||
| Real estate taxes and insurance | 3,976 | 3,467 | |||||
| Depreciation and amortization | 25,027 | 23,269 | |||||
| General and administrative | 4,343 | 4,240 | |||||
| Other expenses | 7,253 | 873 | |||||
| Total expenses | 72,092 | 61,944 | |||||
| Operating income | 35,222 | 40,143 | |||||
| Interest income | 11 | 68 | |||||
| Interest: | |||||||
| Expense incurred | (8,258 | ) | (7,824 | ) | |||
| Amortization of deferred financing costs | (642 | ) | (743 | ) | |||
| Net income | 26,333 | 31,644 | |||||
| Net income attributable to redeemable noncontrolling interests – operating partnership | (3,719 | ) | (4,788 | ) | |||
| Net income attributable to controlling interests | 22,614 | 26,856 | |||||
| Preferred stock dividends | (6,811 | ) | (6,811 | ) | |||
| Net income attributable to common shares | $ | 15,803 | $ | 20,045 | |||
| Earnings per share – basic: | |||||||
| Net income attributable to common shares | $ | 0.24 | $ | 0.30 | |||
| Weighted average common shares outstanding | 65,506,028 | 65,348,269 | |||||
| Earnings per share – diluted: | |||||||
| Net income attributable to common shares | $ | 0.24 | $ | 0.30 | |||
| Weighted average common shares outstanding | 66,456,271 | 65,823,921 | |||||
| Dividends declared per common share | $ | 0.42 | $ | 0.35 | |||
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DUPONT FABROS TECHNOLOGY, INC.
RECONCILIATIONS OF NET INCOME TO FFO, NORMALIZED FFO AND AFFO (1)
(unaudited and in thousands except share and per share data)
| Three months ended March 31, | |||||||
| 2015 | 2014 | ||||||
| Net income | $ | 26,333 | $ | 31,644 | |||
| Depreciation and amortization | 25,027 | 23,269 | |||||
| Less: Non real estate depreciation and amortization | (144 | ) | (172 | ) | |||
| FFO | 51,216 | 54,741 | |||||
| Preferred stock dividends | (6,811 | ) | (6,811 | ) | |||
| FFO attributable to common shares and OP units | 44,405 | 47,930 | |||||
| Severance expense and equity acceleration | 5,578 | — | |||||
| Normalized FFO | 49,983 | 47,930 | |||||
| Straight-line revenues, net of reserve | 3,783 | 711 | |||||
| Amortization of lease contracts above and below market value | (593 | ) | (599 | ) | |||
| Compensation paid with Company common shares | 1,341 | 1,593 | |||||
| Non real estate depreciation and amortization | 144 | 172 | |||||
| Amortization of deferred financing costs | 642 | 743 | |||||
| Improvements to real estate | (574 | ) | (425 | ) | |||
| Capitalized leasing commissions | (1,466 | ) | (27 | ) | |||
| AFFO | $ | 53,260 | $ | 50,098 | |||
| FFO attributable to common shares and OP units per share - diluted | $ | 0.54 | $ | 0.59 | |||
| Normalized FFO per share - diluted | $ | 0.61 | $ | 0.59 | |||
| AFFO per share - diluted | $ | 0.65 | $ | 0.62 | |||
| Weighted average common shares and OP units outstanding - diluted | 81,983,283 | 81,431,858 | |||||
(1) Funds from operations, or FFO, is used by industry analysts and investors as a supplemental operating performance measure for REITs. We calculate FFO in accordance with the definition that was adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. FFO, as defined by NAREIT, represents net income determined in accordance with GAAP, excluding extraordinary items as defined under GAAP, impairment charges on depreciable real estate assets and gains or losses from sales of previously depreciated operating real estate assets, plus specified non-cash items, such as real estate asset depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. We also present FFO attributable to common shares and OP units, which is FFO excluding preferred stock dividends. FFO attributable to common shares and OP units per share is calculated on a basis consistent with net income attributable to common shares and OP units and reflects adjustments to net income for preferred stock dividends.
We use FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, it provides a performance measure that, when compared period over period, captures trends in occupancy rates, rental rates and operating expenses. We also believe that, as a widely recognized measure of the performance of equity REITs, FFO may be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO excludes real estate related depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited.
While FFO is a relevant and widely used measure of operating performance of equity REITs, other equity REITs may use different methodologies for calculating FFO and, accordingly, FFO as disclosed by such other REITs may not be comparable to our FFO. Therefore, we believe that in order to facilitate a clear understanding of our historical operating results, FFO should be examined in conjunction with net income as presented in the consolidated statements of operations. FFO should not be considered as an alternative to net income or to cash flow from operating activities (each as computed in accordance with GAAP) or as an indicator of our liquidity, nor is it indicative of funds available to meet our cash needs, including our ability to pay dividends or make distributions.
We present FFO with adjustments to arrive at Normalized FFO. Normalized FFO is FFO attributable to common shares and units excluding severance expense and equity accelerations, gain or loss on early extinguishment of debt and gain or loss on derivative instruments. We also present FFO with supplemental adjustments to arrive at Adjusted FFO (“AFFO”). AFFO is Normalized FFO excluding straight-line revenue, compensation paid with Company common shares, below market lease amortization net of above market lease amortization, non real estate depreciation and amortization, amortization of deferred financing costs, improvements to real estate and capitalized leasing commissions. AFFO does not represent cash generated from operating activities in accordance with GAAP and therefore should not be considered an alternative to net income as an indicator of our operating performance or as an alternative to cash flow provided by operations as a measure of liquidity and is not necessarily indicative of funds available to fund our cash needs including our ability to pay dividends. In addition, AFFO may not be comparable to similarly titled measurements employed by other companies. We use AFFO in management reports to provide a measure of REIT operating performance that can be compared to other companies using AFFO.
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DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands except share data)
| March 31, 2015 | December 31, 2014 | ||||||
| (unaudited) | |||||||
| ASSETS | |||||||
| Income producing property: | |||||||
| Land | $ | 83,793 | $ | 83,793 | |||
| Buildings and improvements | 2,624,963 | 2,623,539 | |||||
| 2,708,756 | 2,707,332 | ||||||
| Less: accumulated depreciation | (528,539 | ) | (504,869 | ) | |||
| Net income producing property | 2,180,217 | 2,202,463 | |||||
| Construction in progress and land held for development | 410,870 | 358,965 | |||||
| Net real estate | 2,591,087 | 2,561,428 | |||||
| Cash and cash equivalents | 27,059 | 29,598 | |||||
| Rents and other receivables, net | 11,712 | 8,113 | |||||
| Deferred rent, net | 138,582 | 142,365 | |||||
| Lease contracts above market value, net | 7,779 | 8,054 | |||||
| Deferred costs, net | 38,029 | 38,495 | |||||
| Prepaid expenses and other assets | 50,431 | 48,295 | |||||
| Total assets | $ | 2,864,679 | $ | 2,836,348 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Liabilities: | |||||||
| Line of credit | $ | 150,000 | $ | 60,000 | |||
| Mortgage notes payable | 115,000 | 115,000 | |||||
| Unsecured term loan | 250,000 | 250,000 | |||||
| Unsecured notes payable | 600,000 | 600,000 | |||||
| Accounts payable and accrued liabilities | 28,529 | 26,973 | |||||
| Construction costs payable | 25,482 | 32,949 | |||||
| Accrued interest payable | 1,943 | 10,759 | |||||
| Dividend and distribution payable | 39,685 | 39,981 | |||||
| Lease contracts below market value, net | 6,169 | 7,037 | |||||
| Prepaid rents and other liabilities | 67,824 | 65,174 | |||||
| Total liabilities | 1,284,632 | 1,207,873 | |||||
| Redeemable noncontrolling interests – operating partnership | 503,901 | 513,134 | |||||
| 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 March 31, 2015 and December 31, 2014 | 185,000 | 185,000 | |||||
| Series B cumulative redeemable perpetual preferred stock, 6,650,000 issued and outstanding at March 31, 2015 and December 31, 2014 | 166,250 | 166,250 | |||||
| Common stock, $.001 par value, 250,000,000 shares authorized, 65,375,225 shares issued and outstanding at March 31, 2015 and 66,061,804 shares issued and outstanding at December 31, 2014 | 65 | 66 | |||||
| Additional paid in capital | 724,831 | 764,025 | |||||
| Retained earnings | — | — | |||||
| Total stockholders’ equity | 1,076,146 | 1,115,341 | |||||
| Total liabilities and stockholders’ equity | $ | 2,864,679 | $ | 2,836,348 | |||
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DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
| Three months ended March 31, | |||||||
| 2015 | 2014 | ||||||
| Cash flow from operating activities | |||||||
| Net income | $ | 26,333 | $ | 31,644 | |||
| Adjustments to reconcile net income to net cash provided by operating activities | |||||||
| Depreciation and amortization | 25,027 | 23,269 | |||||
| Straight line revenues, net of reserve | 3,783 | 711 | |||||
| Amortization of deferred financing costs | 642 | 743 | |||||
| Amortization of lease contracts above and below market value | (593 | ) | (599 | ) | |||
| Compensation paid with Company common shares | 5,290 | 1,593 | |||||
| Changes in operating assets and liabilities | |||||||
| Rents and other receivables | (3,599 | ) | (979 | ) | |||
| Deferred costs | (1,474 | ) | (52 | ) | |||
| Prepaid expenses and other assets | (2,052 | ) | (5,933 | ) | |||
| Accounts payable and accrued liabilities | 1,916 | (1,191 | ) | ||||
| Accrued interest payable | (8,816 | ) | (8,012 | ) | |||
| Prepaid rents and other liabilities | 2,635 | 3,297 | |||||
| Net cash provided by operating activities | 49,092 | 44,491 | |||||
| Cash flow from investing activities | |||||||
| Investments in real estate – development | (57,584 | ) | (80,159 | ) | |||
| Interest capitalized for real estate under development | (2,856 | ) | (2,965 | ) | |||
| Improvements to real estate | (574 | ) | (425 | ) | |||
| Additions to non-real estate property | (176 | ) | (220 | ) | |||
| Net cash used in investing activities | (61,190 | ) | (83,769 | ) | |||
| Cash flow from financing activities | |||||||
| Line of credit: | |||||||
| Proceeds | 90,000 | — | |||||
| Unsecured term loan: | |||||||
| Proceeds | — | 96,000 | |||||
| Payments of financing costs | — | (96 | ) | ||||
| Equity compensation (payments) proceeds | (7,489 | ) | 3,457 | ||||
| Common stock repurchases | (31,912 | ) | — | ||||
| Dividends and distributions: | |||||||
| Common shares | (27,745 | ) | (16,301 | ) | |||
| Preferred shares | (6,811 | ) | (6,811 | ) | |||
| Redeemable noncontrolling interests – operating partnership | (6,484 | ) | (3,918 | ) | |||
| Net cash provided by financing activities | 9,559 | 72,331 | |||||
| Net (decrease) increase in cash and cash equivalents | (2,539 | ) | 33,053 | ||||
| Cash and cash equivalents, beginning | 29,598 | 38,733 | |||||
| Cash and cash equivalents, ending | $ | 27,059 | $ | 71,786 | |||
| Supplemental information: | |||||||
| Cash paid for interest | $ | 19,930 | $ | 18,802 | |||
| Deferred financing costs capitalized for real estate under development | $ | 231 | $ | 170 | |||
| Construction costs payable capitalized for real estate under development | $ | 25,482 | $ | 25,489 | |||
| Redemption of operating partnership units | $ | 598 | $ | 2,100 | |||
| Adjustments to redeemable noncontrolling interests - operating partnership | $ | (5,878 | ) | $ | (9,334 | ) | |
9
DUPONT FABROS TECHNOLOGY, INC.
Operating Properties
As of April 1, 2015
| Property | Property Location | Year Built/ Renovated | Gross Building Area (2) | Computer Room Square Feet ("CRSF") (2) | CRSF % Leased (3) | CRSF % Commenced (4) | Critical Load MW (5) | Critical Load % Leased (3) | Critical Load % Commenced (4) | ||||||||||||||||
| Stabilized (1) | |||||||||||||||||||||||||
| ACC2 | Ashburn, VA | 2001/2005 | 87,000 | 53,000 | 100 | % | 100 | % | 10.4 | 100 | % | 100 | % | ||||||||||||
| ACC3 | Ashburn, VA | 2001/2006 | 147,000 | 80,000 | 100 | % | 100 | % | 13.9 | 100 | % | 100 | % | ||||||||||||
| ACC4 | Ashburn, VA | 2007 | 347,000 | 172,000 | 100 | % | 100 | % | 36.4 | 100 | % | 100 | % | ||||||||||||
| ACC5 | Ashburn, VA | 2009-2010 | 360,000 | 176,000 | 99 | % | 99 | % | 36.4 | 99 | % | 99 | % | ||||||||||||
| ACC6 | Ashburn, VA | 2011-2013 | 262,000 | 130,000 | 100 | % | 100 | % | 26.0 | 100 | % | 100 | % | ||||||||||||
| CH1 | Elk Grove Village, IL | 2008-2012 | 485,000 | 231,000 | 100 | % | 100 | % | 36.4 | 100 | % | 100 | % | ||||||||||||
| NJ1 Phase I | Piscataway, NJ | 2010 | 180,000 | 88,000 | 70 | % | 70 | % | 18.2 | 59 | % | 59 | % | ||||||||||||
| SC1 Phases I/IIA | Santa Clara, CA | 2011-2014 | 270,000 | 131,000 | 100 | % | 100 | % | 27.5 | 100 | % | 100 | % | ||||||||||||
| VA3 | Reston, VA | 2003 | 256,000 | 147,000 | 94 | % | 94 | % | 13.0 | 95 | % | 95 | % | ||||||||||||
| VA4 | Bristow,��VA | 2005 | 230,000 | 90,000 | 100 | % | 100 | % | 9.6 | 100 | % | 100 | % | ||||||||||||
| Subtotal – stabilized | 2,624,000 | 1,298,000 | 97 | % | 97 | % | 227.8 | 96 | % | 96 | % | ||||||||||||||
| Completed, not Stabilized | |||||||||||||||||||||||||
| ACC7 Phase I (6) | Ashburn, VA | 2014 | 126,000 | 67,000 | 37 | % | 25 | % | 11.9 | 46 | % | 29 | % | ||||||||||||
| Total Operating Properties | 2,750,000 | 1,365,000 | 94 | % | 94 | % | 239.7 | 94 | % | 93 | % | ||||||||||||||
| (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 CRSF (the portion of gross building area where our customers' computer servers are located), common areas, areas controlled by us (such as the mechanical, telecommunications and utility rooms) and, in some facilities, individual office and storage space leased on an as available basis to our customers. |
| (3) | Percentage leased is expressed as a percentage of CRSF or critical load, as applicable, that is subject to an executed lease. Leases executed as of April 1, 2015 represent $291 million of base rent on a GAAP basis and $305 million of base rent on a cash basis over the next twelve months. Both amounts include $18 million of revenue from management fees over the next twelve months. These amounts include $9.7 million of GAAP base rent, $10.4 million of cash base rent and $0.6 million of management fees from the customer who has filed for bankruptcy protection. |
| (4) | Percentage commenced is expressed as a percentage of CRSF or critical load, as applicable, where the lease has commenced under generally accepted accounting principles. |
| (5) | Critical load (also referred to as IT load or load used by customers' servers or related equipment) is the power available for exclusive use by customers expressed in terms of megawatt, or MW, or kilowatt, or kW (1 MW is equal to 1,000 kW). |
| (6) | As of May 7, 2015, ACC7 Phase I was 37% commenced on a CRSF basis and 46% commenced on a critical load basis. |
10
DUPONT FABROS TECHNOLOGY, INC.
Lease Expirations
As of April 1, 2015
The following table sets forth a summary schedule of lease expirations at our operating properties for each of the ten calendar years beginning with 2015. The information set forth in the table below assumes that customers exercise no renewal options and takes into account customers’ early termination options in determining the life of their leases under GAAP.
| Year of Lease Expiration | Number of Leases Expiring (1) | CRSF of Expiring Commenced Leases (in thousands) (2) | % of Leased CRSF | Total kW of Expiring Commenced Leases (2) | % of Leased kW | % of Annualized Base Rent (3) | ||||||||||||
| 2015 | 2 | 59 | 4.6 | % | 11,537 | 5.2 | % | 5.0 | % | |||||||||
| 2016 | 4 | 26 | 2.0 | % | 3,548 | 1.6 | % | 1.7 | % | |||||||||
| 2017 | 13 | 84 | 6.6 | % | 13,905 | 6.2 | % | 5.9 | % | |||||||||
| 2018 | 20 | 186 | 14.6 | % | 35,154 | 15.8 | % | 15.4 | % | |||||||||
| 2019 | 18 | 291 | 22.8 | % | 51,524 | 23.1 | % | 21.7 | % | |||||||||
| 2020 | 12 | 112 | 8.8 | % | 17,833 | 8.0 | % | 8.6 | % | |||||||||
| 2021 | 10 | 164 | 12.8 | % | 28,819 | 12.9 | % | 13.6 | % | |||||||||
| 2022 | 6 | 75 | 5.9 | % | 12,812 | 5.8 | % | 6.2 | % | |||||||||
| 2023 | 4 | 48 | 3.8 | % | 6,475 | 2.9 | % | 3.4 | % | |||||||||
| 2024 | 8 | 112 | 8.8 | % | 19,279 | 8.7 | % | 9.8 | % | |||||||||
| After 2024 | 9 | 120 | 9.3 | % | 21,834 | 9.8 | % | 8.7 | % | |||||||||
| Total | 106 | 1,277 | 100 | % | 222,720 | 100 | % | 100 | % | |||||||||
| (1) | Represents 37 customers with 106 lease expiration dates. |
| (2) | CRSF is that portion of gross building area where customers locate their computer servers. One MW is equal to 1,000 kW. |
| (3) | Annualized base rent represents the monthly contractual base rent (defined as cash base rent before abatements) multiplied by 12 for commenced leases as of April 1, 2015. |
11
DUPONT FABROS TECHNOLOGY, INC.
Top 15 Customers
As of April 1, 2015
The following table presents our top 15 customers based on annualized monthly contractual base rent at our operating properties as of April 1, 2015:
| Customer | Number of Buildings | Numbers of Markets | Remaining Term | % of Annualized Base Rent (1) | |||||||||
| 1 | Microsoft | 6 | 3 | 6.7 | 20.2 | % | |||||||
| 2 | 3 | 1 | 5.2 | 18.3 | % | ||||||||
| 3 | Yahoo! | 3 | 2 | 2.0 | 11.7 | % | |||||||
| 4 | Rackspace | 3 | 2 | 10.3 | 10.4 | % | |||||||
| 5 | Fortune 1000 leading Software as a Service (SaaS) Provider, Not Rated | 3 | 2 | 6.8 | 5.5 | % | |||||||
| 6 | Fortune 25 Investment Grade Rated Company | 2 | 2 | 3.4 | 4.8 | % | |||||||
| 7 | Net Data Centers | 4 | 2 | 7.5 | 3.5 | % | |||||||
| 8 | Server Central | 1 | 1 | 6.4 | 2.8 | % | |||||||
| 9 | Zynga | 1 | 1 | 0.7 | 2.5 | % | |||||||
| 10 | Dropbox | 1 | 1 | 3.8 | 1.8 | % | |||||||
| 11 | IAC | 1 | 1 | 4.1 | 1.7 | % | |||||||
| 12 | Symantec | 2 | 1 | 2.2 | 1.5 | % | |||||||
| 13 | Fortune 25 Investment Grade Rated Company | 2 | 2 | 5.9 | 1.3 | % | |||||||
| 14 | UBS | 1 | 1 | 10.3 | 1.1 | % | |||||||
| 15 | Sanofi Aventis | 2 | 1 | 3.6 | 1.1 | % | |||||||
| Total | 88.2 | % | |||||||||||
| (1) | Annualized base rent represents monthly contractual base rent (defined as cash base rent before abatements) multiplied by 12 for commenced leases as of April 1, 2015. |
12
DUPONT FABROS TECHNOLOGY, INC.
Same Store Analysis
($ in thousands)
| Same Store Properties | Three Months Ended | ||||||||||||||||||
| 31-Mar-15 | 31-Mar-14 | % Change | 31-Dec-14 | % Change | |||||||||||||||
| Revenue: | |||||||||||||||||||
| Base rent | $ | 70,528 | $ | 69,204 | 1.9 | % | $ | 72,742 | (3.0 | )% | |||||||||
| Recoveries from tenants | 33,122 | 31,689 | 4.5 | % | 31,886 | 3.9 | % | ||||||||||||
| Other revenues | 475 | 456 | 4.2 | % | 473 | 0.4 | % | ||||||||||||
| Total revenues | 104,125 | 101,349 | 2.7 | % | 105,101 | (0.9 | )% | ||||||||||||
| Expenses: | |||||||||||||||||||
| Property operating costs | 30,375 | 30,095 | 0.9 | % | 29,372 | 3.4 | % | ||||||||||||
| Real estate taxes and insurance | 3,771 | 3,460 | 9.0 | % | 2,863 | 31.7 | % | ||||||||||||
| Other expenses | 14 | 25 | N/M | 1,513 | N/M | ||||||||||||||
| Total expenses | 34,160 | 33,580 | 1.7 | % | 33,748 | 1.2 | % | ||||||||||||
| Net operating income (1) | 69,965 | 67,769 | 3.2 | % | 71,353 | (1.9 | )% | ||||||||||||
| Straight line revenues, net of reserve | 3,492 | 711 | N/M | 2,594 | 34.6 | % | |||||||||||||
| Amortization of lease contracts above and below market value | (593 | ) | (599 | ) | (1.0 | )% | (598 | ) | (0.8 | )% | |||||||||
| Cash net operating income (1) | $ | 72,864 | $ | 67,881 | 7.3 | % | $ | 73,349 | (0.7 | )% | |||||||||
| Note: Same Store Properties represent those properties placed into service on or before January 1, 2014 and excludes ACC7. | |||||||||||||||||||
| Same Store, Same Capital Properties | Three Months Ended | ||||||||||||||||||
| 31-Mar-15 | 31-Mar-14 | % Change | 31-Dec-14 | % Change | |||||||||||||||
| Revenue: | |||||||||||||||||||
| Base rent | $ | 62,737 | $ | 63,911 | (1.8 | )% | $ | 65,087 | (3.6 | )% | |||||||||
| Recoveries from tenants | 27,662 | 27,836 | (0.6 | )% | 26,706 | 3.6 | % | ||||||||||||
| Other revenues | 445 | 426 | 4.5 | % | 443 | 0.5 | % | ||||||||||||
| Total revenues | 90,844 | 92,173 | (1.4 | )% | 92,236 | (1.5 | )% | ||||||||||||
| Expenses: | |||||||||||||||||||
| Property operating costs | 25,585 | 26,739 | (4.3 | )% | 24,872 | 2.9 | % | ||||||||||||
| Real estate taxes and insurance | 2,894 | 2,782 | 4.0 | % | 1,918 | 50.9 | % | ||||||||||||
| Other expenses | 13 | 24 | N/M | 1,510 | N/M | ||||||||||||||
| Total expenses | 28,492 | 29,545 | (3.6 | )% | 28,300 | 0.7 | % | ||||||||||||
| Net operating income (1) | 62,352 | 62,628 | (0.4 | )% | 63,936 | (2.5 | )% | ||||||||||||
| Straight line revenues, net of reserve | 3,678 | 830 | N/M | 3,270 | 12.5 | % | |||||||||||||
| Amortization of lease contracts above and below market value | (593 | ) | (599 | ) | (1.0 | )% | (598 | ) | (0.8 | )% | |||||||||
| Cash net operating income (1) | $ | 65,437 | $ | 62,859 | 4.1 | % | $ | 66,608 | (1.8 | )% | |||||||||
| Note: Same Store, Same Capital properties represent those properties placed into service on or before January 1, 2014 and have less than 10% of additional critical load developed after January 1, 2014. Excludes SC1 and ACC7. (1) See next page for a reconciliation of Net Operating Income and Cash Net Operating Income to GAAP measures. | |||||||||||||||||||
13
DUPONT FABROS TECHNOLOGY, INC.
Same Store Analysis - Reconciliations of Operating Income
to Net Operating Income and Cash Net Operating Income (1)
($ in thousands)
| Reconciliation of Same Store Operating Income to Same Store Net Operating Income and Cash Net Operating Income | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| 31-Mar-15 | 31-Mar-14 | % Change | 31-Dec-14 | % Change | |||||||||||||||
| Operating income | $ | 46,010 | $ | 44,703 | 2.9 | % | $ | 47,286 | (2.7 | )% | |||||||||
| Depreciation and amortization | 23,955 | 23,066 | 3.9 | % | 24,067 | (0.5 | )% | ||||||||||||
| Net operating income | 69,965 | 67,769 | 3.2 | % | 71,353 | (1.9 | )% | ||||||||||||
| Straight line revenues, net of reserve | 3,492 | 711 | N/M | 2,594 | 34.6 | % | |||||||||||||
| Amortization of lease contracts above and below market value | (593 | ) | (599 | ) | (1.0 | )% | (598 | ) | (0.8 | )% | |||||||||
| Cash net operating income | $ | 72,864 | $ | 67,881 | 7.3 | % | $ | 73,349 | (0.7 | )% | |||||||||
| Reconciliation of Same Store, Same Capital Operating Income to Same Store, Same Capital Net Operating Income and Cash Net Operating Income | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| 31-Mar-15 | 31-Mar-14 | % Change | 31-Dec-14 | % Change | |||||||||||||||
| Operating income | $ | 41,178 | $ | 41,444 | (0.6 | )% | $ | 42,697 | (3.6 | )% | |||||||||
| Depreciation and amortization | 21,174 | 21,184 | — | % | 21,239 | (0.3 | )% | ||||||||||||
| Net operating income | 62,352 | 62,628 | (0.4 | )% | 63,936 | (2.5 | )% | ||||||||||||
| Straight line revenues, net of reserve | 3,678 | 830 | N/M | 3,270 | 12.5 | % | |||||||||||||
| Amortization of lease contracts above and below market value | (593 | ) | (599 | ) | (1.0 | )% | (598 | ) | (0.8 | )% | |||||||||
| Cash net operating income | $ | 65,437 | $ | 62,859 | 4.1 | % | $ | 66,608 | (1.8 | )% | |||||||||
(1) Net Operating Income ("NOI") represents total revenues less property operating costs, real estate taxes and insurance, and other expenses (each as reflected in the consolidated statements of operations) for the properties included in the analysis. Cash Net Operating Income ("Cash NOI") is NOI less straight line revenues, net and amortization of lease contracts above and below market value for the properties included in the analysis.
We use NOI and Cash NOI as supplemental performance measures because, in excluding depreciation and amortization and gains and losses from property dispositions, each provides a performance measure that, when compared period over period, captures trends in occupancy rates, rental rates and operating expenses. However, because NOI and Cash NOI exclude depreciation and amortization and capture neither the changes in the value of our properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effects and could materially impact our results from operations, the utility of NOI and Cash NOI as a measure of our performance is limited.
Other REITs may not calculate NOI and Cash NOI in the same manner we do and, accordingly, our NOI and Cash NOI may not be comparable to the NOI and Cash NOI of other REITs. NOI and Cash NOI should not be considered as an alternative to operating income (as computed in accordance with GAAP).
14
DUPONT FABROS TECHNOLOGY, INC.
Development Projects
As of March 31, 2015
($ in thousands)
| Property | Property Location | Gross Building Area (1) | CRSF (2) | Critical Load MW (3) | Estimated Total Cost (4) | Construction in Progress & Land Held for Development (5) | CRSF % Pre- leased | Critical Load % Pre- leased | |||||||||||||||
| Current Development Projects | |||||||||||||||||||||||
| SC1 Phase IIB (6) | Santa Clara, CA | 90,000 | 42,000 | 9.1 | $110,000 - $113,000 | $ | 108,281 | 62 | % | 63 | % | ||||||||||||
| CH2 Phase I (7) | Elk Grove Village, IL | 94,000 | 45,000 | 7.1 | 74,000 - 78,000 | 59,128 | — | % | — | % | |||||||||||||
| ACC7 Phase II | Ashburn, VA | 98,000 | 51,000 | 8.9 | 76,000 - 82,000 | 33,058 | — | % | — | % | |||||||||||||
| 282,000 | 138,000 | 25.1 | 260,000 - 273,000 | 200,467 | |||||||||||||||||||
| Future Development Projects/Phases | |||||||||||||||||||||||
| ACC7 Phases III to IV | Ashburn, VA | 222,000 | 120,000 | 20.8 | 62,371 | 62,371 | |||||||||||||||||
| CH2 Phases II to III | Elk Grove Village, IL | 242,000 | 115,000 | 18.5 | 118,000 - 122,000 | 99,243 | |||||||||||||||||
| NJ1 Phase II | Piscataway, NJ | 180,000 | 88,000 | 18.2 | 39,212 | 39,212 | |||||||||||||||||
| 644,000 | 323,000 | 57.5 | $219,583 - $223,583 | 200,826 | |||||||||||||||||||
| Land Held for Development | |||||||||||||||||||||||
| ACC8 | Ashburn, VA | 100,000 | 50,000 | 10.4 | 4,250 | ||||||||||||||||||
| SC2 (8) | Santa Clara, CA | 150,000 | 69,000 | 16.0 | 5,327 | ||||||||||||||||||
| 250,000 | 119,000 | 26.4 | 9,577 | ||||||||||||||||||||
| Total | 1,176,000 | 580,000 | 109.0 | $ | 410,870 | ||||||||||||||||||
| (1) | Gross building area is the entire building area, including CRSF (the portion of gross building area where our customers’ computer servers are located), common areas, areas controlled by us (such as the mechanical, telecommunications and utility rooms) and, in some facilities, individual office and storage space leased on an as available basis to our customers. The respective amounts listed for each of the “Land Held for Development” sites are estimates. |
| (2) | CRSF is that portion of gross building area where customers locate their computer servers. The respective amounts listed for each of the “Land Held for Development” sites are estimates. |
| (3) | Critical load (also referred to as IT load or load used by customers’ servers or related equipment) is the power available for exclusive use by customers expressed in terms of MW or kW (1 MW is equal to 1,000 kW). The respective amounts listed for each of the “Land Held for Development” sites are estimates. |
| (4) | Current development projects include land, capitalization for construction and development and capitalized interest and operating carrying costs, as applicable, upon completion. Future development projects/phases include land, shell and underground work through Phase I opening only. |
| (5) | Amount capitalized as of March 31, 2015. Future development projects/phases include land, shell and underground work through Phase I opening only. |
| (6) | SC1 Phase IIB was placed into service on May 1, 2015 and was 100% leased on a CRSF and critical load basis. |
| (7) | As of May 7, 2015, CH2 Phase I was 20% pre-leased on a CRSF and critical load basis. |
| (8) | Amounts listed are updated estimates. We are currently evaluating the best use for this land. Options include a stand-alone data center, an additional phase of SC1 or a powered base shell. |
15
DUPONT FABROS TECHNOLOGY, INC.
Debt Summary as of March 31, 2015
($ in thousands)
| March 31, 2015 | ||||||||||||
| Amounts | % of Total | Rates | Maturities (years) | |||||||||
| Secured | $ | 115,000 | 10 | % | 1.7 | % | 3.0 | |||||
| Unsecured | 1,000,000 | 90 | % | 4.2 | % | 5.4 | ||||||
| Total | $ | 1,115,000 | 100 | % | 3.9 | % | 5.2 | |||||
| Fixed Rate Debt: | ||||||||||||
| Unsecured Notes due 2021 | $ | 600,000 | 54 | % | 5.9 | % | 6.5 | |||||
| Fixed Rate Debt | 600,000 | 54 | % | 5.9 | % | 6.5 | ||||||
| Floating Rate Debt: | ||||||||||||
| Unsecured Credit Facility | 150,000 | 14 | % | 1.7 | % | 3.1 | ||||||
| Unsecured Term Loan | 250,000 | 22 | % | 1.7 | % | 4.3 | ||||||
| ACC3 Term Loan | 115,000 | 10 | % | 1.7 | % | 3.0 | ||||||
| Floating Rate Debt | 515,000 | 46 | % | 1.7 | % | 3.7 | ||||||
| Total | $ | 1,115,000 | 100 | % | 3.9 | % | 5.2 | |||||
| Note: | We capitalized interest and deferred financing cost amortization of $3.1 million during the three months ended March 31, 2015. |
Debt Maturity as of March 31, 2015
($ in thousands)
| Year | Fixed Rate | Floating Rate | Total | % of Total | Rates | |||||||||||||||
| 2015 | $ | — | $ | — | $ | — | — | — | ||||||||||||
| 2016 | — | 3,750 | (2) | 3,750 | 0.3 | % | 1.7 | % | ||||||||||||
| 2017 | — | 8,750 | (2) | 8,750 | 0.8 | % | 1.7 | % | ||||||||||||
| 2018 | — | 252,500 | (2)(3) | 252,500 | 22.7 | % | 1.7 | % | ||||||||||||
| 2019 | — | 250,000 | (4) | 250,000 | 22.4 | % | 1.7 | % | ||||||||||||
| 2020 | — | — | — | — | — | |||||||||||||||
| 2021 | 600,000 | (1) | — | 600,000 | 53.8 | % | 5.9 | % | ||||||||||||
| Total | $ | 600,000 | $ | 515,000 | $ | 1,115,000 | 100 | % | 3.9 | % | ||||||||||
| (1) | The 5.875% Unsecured Notes due 2021 mature on September 15, 2021. |
| (2) | The ACC3 Term Loan matures on March 27, 2018 with no extension option. Quarterly principal payments of $1.25 million begin on April 1, 2016, increase to $2.5 million on April 1, 2017 and continue through maturity. |
| (3) | The Unsecured Credit Facility matures on May 13, 2018 with a one-year extension option. |
| (4) | The Unsecured Term Loan matures on July 21, 2019 with no extension option. |
16
DUPONT FABROS TECHNOLOGY, INC.
Selected Unsecured Debt Metrics(1)
| 3/31/15 | 12/31/14 | ||
| Interest Coverage Ratio (not less than 2.0) | 5.9 | 6.1 | |
| Total Debt to Gross Asset Value (not to exceed 60%) | 32.9% | 30.8% | |
| Secured Debt to Total Assets (not to exceed 40%) | 3.4% | 3.5% | |
| Total Unsecured Assets to Unsecured Debt (not less than 150%) | 286% | 314% | |
| (1) | These selected metrics relate to DuPont Fabros Technology, LP's outstanding unsecured notes. DuPont Fabros Technology, Inc. is the general partner of DuPont Fabros Technology, LP. |
Capital Structure as of March 31, 2015
(in thousands except per share data)
| Line of Credit | $ | 150,000 | |||||||||||||||
| Mortgage Notes Payable | 115,000 | ||||||||||||||||
| Unsecured Term Loan | 250,000 | ||||||||||||||||
| Unsecured Notes | 600,000 | ||||||||||||||||
| Total Debt | 1,115,000 | 27.2 | % | ||||||||||||||
| Common Shares | 81 | % | 65,375 | ||||||||||||||
| Operating Partnership (“OP”) Units | 19 | % | 15,419 | ||||||||||||||
| Total Shares and Units | 100 | % | 80,794 | ||||||||||||||
| Common Share Price at March 31, 2015 | $ | 32.68 | |||||||||||||||
| Common Share and OP Unit Capitalization | $ | 2,640,348 | |||||||||||||||
| Preferred Stock ($25 per share liquidation preference) | 351,250 | ||||||||||||||||
| Total Equity | 2,991,598 | 72.8 | % | ||||||||||||||
| Total Market Capitalization | $ | 4,106,598 | 100.0 | % | |||||||||||||
17
DUPONT FABROS TECHNOLOGY, INC.
Common Share and OP Unit
Weighted Average Amounts Outstanding
| Q1 2015 | Q1 2014 | |||||
| Weighted Average Amounts Outstanding for EPS Purposes: | ||||||
| Common Shares - basic | 65,506,028 | 65,348,269 | ||||
| Effect of dilutive securities | 950,243 | 475,652 | ||||
| Common Shares - diluted | 66,456,271 | 65,823,921 | ||||
Weighted Average Amounts Outstanding for FFO, Normalized FFO and AFFO Purposes: | ||||||
| Common Shares - basic | 65,506,028 | 65,348,269 | ||||
| OP Units - basic | 15,420,237 | 15,607,937 | ||||
| Total Common Shares and OP Units | 80,926,265 | 80,956,206 | ||||
| Effect of dilutive securities | 1,057,018 | 475,652 | ||||
| Common Shares and Units - diluted | 81,983,283 | 81,431,858 | ||||
| Period Ending Amounts Outstanding: | ||||||
| Common Shares | 65,375,225 | |||||
| OP Units | 15,419,237 | |||||
| Total Common Shares and Units | 80,794,462 | |||||
18
DUPONT FABROS TECHNOLOGY, INC.
2015 Guidance
The earnings guidance/projections provided below are based on current expectations and are forward-looking.
Expected Q2 2015 per share | Expected 2015 per share | ||
| Net income per common share and unit - diluted | $0.30 to $0.32 | $0.96 to $1.16 | |
| Depreciation and amortization, net | 0.31 | 1.27 | |
| FFO per share - diluted (1) | $0.61 to $0.63 | $2.23 to $2.43 | |
| Severance expense and equity accelerations | — | 0.07 | |
| Normalized FFO per share - diluted (1) | $0.61 to $0.63 | $2.30 to $2.50 | |
| Straight-line revenues, net of reserve | 0.06 to 0.07 | 0.18 | |
| Amortization of lease contracts above and below market value | (0.01) | (0.02) | |
| Compensation paid with Company common shares | 0.02 | 0.07 | |
| Non real estate depreciation and amortization | — | (0.01) | |
| Amortization of deferred financing costs | 0.01 | 0.04 | |
| Improvements to real estate | (0.02) to (0.03) | (0.06) | |
| Capitalized leasing commissions | (0.01) | (0.04) | |
| AFFO per share - diluted (1) | $0.65 to $0.69 | $2.46 to $2.66 | |
| 2015 Debt Assumptions | |||
| February 5, 2015 Guidance | May 7, 2015 Guidance | ||
| Weighted average debt outstanding | $1,111.2 million | $1,143.8 million | |
| Weighted average interest rate (one month LIBOR avg. 0.25%) | 4.37% | 4.42% | |
| Total interest costs | $48.6 million | $50.6 million | |
| Amortization of deferred financing costs | 3.7 million | 3.7 million | |
| Interest expense capitalized | (8.3) million | (7.8) million | |
| Deferred financing costs amortization capitalized | (0.7) million | (0.6) million | |
| Total interest expense after capitalization | $43.3 million | $45.9 million | |
| 2015 Other Guidance Assumptions | |||
| February 5, 2015 Guidance | May 7, 2015 Guidance | ||
| Total revenues | $420 to $445 million | $425 to $445 million | |
| Base rent (included in total revenues) | $287 to $305 million | $290 to $305 million | |
| General and administrative expense | $18 to $19 million | $18 to $19 million | |
| Investments in real estate - development (2) | $150 to $175 million | $150 to $170 million | |
| Improvements to real estate excluding development | $5 million | $5 million | |
| Preferred stock dividends | $27 million | $27 million | |
| Annualized common stock dividend | $1.68 per share | $1.68 per share | |
| Weighted average common shares and OP units - diluted | 82.6 million | 82.0 million | |
| Common share repurchase | No amounts budgeted | $31.9 million | |
| Acquisitions of income producing properties | No amounts budgeted | No amounts budgeted | |
| (1) | For information regarding FFO and Normalized FFO, see “Reconciliations of Net Income to FFO, Normalized FFO and AFFO” in this earnings release. |
| (2) | Represents cash spend expected in 2015 for the SC1 Phase IIB, CH2 Phase I and ACC7 Phase II developments. |
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