DuPont Fabros Technology, Inc. Reports 2009 Results
Revenues Up 15.3% Year Over Year
Provides Outlook for 2010 Performance
WASHINGTON, Feb. 10 /PRNewswire-FirstCall/ -- DuPont Fabros Technology, Inc. (NYSE: DFT) today reported results for the quarter and year ended December 31, 2009. All per share results are reported on a fully diluted basis.
Highlights
- Executed four new leases totaling 6.32 megawatts ("MW") in the fourth quarter, representing approximately $165 million of total contract value over the respective lease terms.
- Renewed one lease totaling 5.69 MW in the fourth quarter.
- CH1 Phase I is 48% leased, ACC5 Phase I is 84% leased and ACC5 Phase II is 50% pre-leased.
- Obtained $700 million of new financing and paid off $504 million of existing debt, eliminating all maturities until the fourth quarter of 2012, assuming the company's election of its one year extension of a secured loan.
- Obtained corporate and bond ratings of Ba2/stable from Moody's Investor Service and BB-/stable from Standard & Poor's.
- Restarted development on Phase I of NJ1 and commenced development on Phase II of ACC5.
- Revenues increased 10.8% in the fourth quarter as compared to the prior year quarter.
Hossein Fateh, President and Chief Executive Officer of the company, said, "Over the course of the year, we substantially strengthened our balance sheet. This included $700 million of new financing obtained in the fourth quarter which included, for the first time, capital from the unsecured bond market. In 2009, we also executed 15 leases representing 37.17 megawatts of critical load, 208,250 raised square feet of space and over $800 million of contract value to the company. Our principal focus for 2010 is to maximize portfolio leasing and we are optimistic regarding our expectations."
Fourth Quarter 2009 Results
For the quarter ended December 31, 2009, the company reported a loss of $0.16 per share compared to earnings of $0.10 per share for the fourth quarter of 2008. The difference is primarily due to:
- A previously announced interest rate swap termination charge of $13.7 million, or $0.20 per share, and
- The write-off of unamortized deferred financing costs of $2.8 million, or $0.04 per share.
Revenues increased 10.8%, or $5.1 million, to $52.7 million for the fourth quarter of 2009 over the fourth quarter of 2008.
FFO for the quarter ended December 31, 2009 was $0.05 per share compared to $0.30 per share for the quarter ended December 31, 2008. Excluding the aforementioned one-time charges, FFO was $0.29 per share for the fourth quarter of 2009 and at the high end of the company's guidance range provided on November 3, 2009.
Year Ended December 31, 2009
For the year ended December 31, 2009, the company reported earnings of $0.04 per share compared to $0.54 per share for the year ended December 31, 2008. Revenues increased 15.3%, or $26.6 million, to $200.3 million for the year ended December 31, 2009 versus the prior year.
FFO for the year ended December 31, 2009 was $0.88 per share compared to $1.30 per share for 2008. The $0.42 per share decrease from 2008 is primarily due to the $0.24 per share write-offs previously noted and $0.18 per share of higher interest expense related to higher debt balances and lower capitalized interest, partially offset by higher operating income. FFO was $1.12 per share for 2009 excluding the one-time charges in the fourth quarter as noted.
Portfolio Update
During the fourth quarter of 2009, the company executed four new leases totaling 6.32 MW of critical load and 42,300 raised square feet with an average lease term of 10.9 years. These leases represent approximately $165 million of contract value to the company.
- Three leases were signed at ACC5 Phase I in Ashburn, Virginia comprising 4.37 MW of critical load and 20,900 raised square feet.
- One lease was signed at VA3 in Reston, Virginia comprising 1.95 MW of critical load and 21,400 raised square feet. This is a new lease of space that was vacated at the end of 2009.
Also, during the fourth quarter of 2009, the company renewed a lease at VA3 that was scheduled to expire in 2010. This renewal represents 5.69 MW of critical load and 66,661 raised square feet. The Company has no lease expirations until the end of the first quarter in 2011. In addition, the company exercised its option to move a tenant with a lease for 2.28 MW in Phase I of ACC5 to Phase II of ACC5.
As of the date of this press release, the company's stabilized operating portfolio's critical load is 100% leased. CH1 Phase I and ACC5 Phase I, both currently in lease-up, are 48% and 84% leased, respectively. ACC5 Phase II, a new development yet to be completed, is 50% pre-leased.
Capital Markets Update
In the fourth quarter of 2009 and as previously announced, the company sold $550 million of 8.5% unsecured senior notes due December 2017 and completed a $150 million secured mortgage loan due December 2014. The company used $504 million of the proceeds from these financings to retire various secured mortgages and pay down a portion of another secured mortgage. Accordingly, the company has no debt maturities until the fourth quarter of 2012, assuming the company's election of the extension option on its ACC4 term loan. The company's debt to total market capitalization ratio was 43% as of December 31, 2009.
Development Update
After the financing activity in the fourth quarter of 2009, the company believes it has sufficient funds to complete both Phase I of NJ1 in Piscataway, New Jersey and Phase II of ACC5 in Ashburn, Virginia. Both of these projects were placed into development in December 2009 and the company expects each to be completed in the fourth quarter of 2010.
Dividend
The company declared and paid 2009 cash dividends of $0.08 per share in the fourth quarter of 2009. This dividend is 100% taxable with no capital gains or return of capital. The company anticipates paying quarterly cash dividends of $0.08 per share in 2010.
2010 Guidance
The company has established an FFO guidance range of $0.28 to $0.31 per share for the first quarter of 2010. The primary differences between the company's fourth quarter FFO and the midpoint of the first quarter 2010 FFO guidance are:
- Interest rate swap termination charge of $0.20 per share in the fourth quarter of 2009.
- Write-off of unamortized deferred financing costs of $0.04 per share in the fourth quarter of 2009.
- Operating income increase of $0.04 per share due to increased revenue.
- Higher interest expense of $0.04 per share due to increased debt levels and higher interest rates partially offset by increased interest capitalization on development.
The company has established an FFO guidance range of $1.25 to $1.45 for the full year 2010. The primary differences between the company's 2009 FFO and the midpoint of the 2010 FFO guidance are:
- Interest rate swap termination charge of $0.20 per share in 2009.
- Write-off of unamortized deferred financing costs of $0.06 per share in 2009.
- Operating income increase of $0.55 per share due to increased revenues.
- Higher interest expense of $0.34 per share due to increased debt levels and higher interest rates partially offset by increased interest capitalization on development.
The assumptions underlying this guidance can be found on page 15 of this press release.
Fourth Quarter 2009 Conference Call and Webcast Information
The company will host a conference call to discuss these results tomorrow, Thursday, February 11, 2010 at 10:00 a.m. ET. To access the live call, please visit the Investor Relations section of the company's website at www.dft.com or dial 1-888-267-6301 (domestic) or 1-719-325-2392 (international). A replay will be available for seven days by dialing 1-888-203-1112 (domestic) or 1-719-457-0820 (international) using conference ID 3722964. The webcast will be archived on the company's website for one year at www.dft.com on the Presentations & Webcasts page.
First Quarter 2010 Conference Call
DuPont Fabros Technology, Inc. expects to announce first quarter 2010 results on Tuesday, May 4, 2010 and to host a conference call to discuss those results at 10:00 a.m. ET on Wednesday, May 5, 2010.
About DuPont Fabros Technology, Inc.
DuPont Fabros Technology, Inc. (NYSE: DFT) is a real estate investment trust (REIT) and leading owner, developer, operator and manager of wholesale data centers. The company's data centers are highly specialized, secure facilities used primarily by national and international technology companies to house, power and cool the computer servers that support many of their most critical business processes. DuPont Fabros Technology, Inc. is headquartered in Washington, DC. For more information, please visit www.dft.com.
Forward-Looking Statements
Certain statements contained in this press release may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The matters described in these forward-looking statements 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 2010 FFO guidance are not realized, the risk that the company may be unable to obtain financing on favorable terms, the risk that the company is unable to satisfy the conditions required to exercise the extension option for the term loan secured by its ACC4 data center, the risks commonly associated with construction and development of new facilities, risks relating to compliance with permitting, zoning, land-use and environmental requirements, the risks related to the leasing of space to third-party tenants, including the ability of the company to negotiate leases on terms that will enable it to achieve its expected returns, the risk that the company will be unable to acquire additional properties on favorable terms or at all, the risk that the company will not declare and pay dividends as anticipated for 2010 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, 2008 and its Form 10-Q for the quarter ended September 30, 2009, 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 forward-looking matters discussed in this press release.
DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except share and per share data)
Quarter ended Year ended
December 31, December 31,
-------------- ------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Base rent $32,936 $26,211 $116,829 $104,032
Recoveries from
tenants 17,954 16,959 69,014 58,802
Other revenues 1,786 4,360 14,439 10,830
----- ----- ------ ------
Total
revenues 52,676 47,530 200,282 173,664
Expenses:
Property operating
costs 16,412 15,020 62,911 50,918
Real estate taxes
and insurance 1,657 1,091 5,291 3,986
Depreciation and
amortization 15,150 13,587 56,701 50,703
General and
administrative 3,216 2,675 13,358 10,568
Other expenses 1,310 3,669 11,485 9,003
----- ----- ------ -----
Total
expenses 37,745 36,042 149,746 125,178
------ ------ ------- -------
Operating income 14,931 11,488 50,536 48,486
Interest income 31 161 381 308
Interest:
Expense
incurred (8,361) (4,327) (25,462) (10,852)
Amortization
of deferred
financing
costs (4,321) (726) (8,854) (1,782)
Loss on
discontinuance of
cash flow hedge (13,715) - (13,715) -
------- - ------- -
Net (loss) income (11,435) 6,596 2,886 36,160
Net loss (income)
attributable to
redeemable
noncontrolling
interests – operating
partnership 4,620 (3,143) (1,133) (17,078)
----- ------ ------ -------
Net (loss) income
attributable
to controlling
interests $(6,815) $3,453 $1,753 $19,082
======= ====== ====== =======
Earnings per
share – basic:
Net (loss)
income
attributable to
controlling
interests per
common share $(0.16) $0.10 $0.04 $0.54
====== ===== ===== =====
Weighted average
common shares
outstanding 41,514,002 35,441,987 39,938,225 35,428,521
========== ========== ========== ==========
Earnings per share –
diluted:
Net (loss)
income
attributable to
controlling
interests per
common share $(0.16) $0.10 $0.04 $0.54
====== ===== ===== =====
Weighted average
common shares
outstanding 41,514,002 35,441,987 40,636,035 35,428,521
========== ========== ========== ==========
Dividends declared per
common share $0.08 $- $0.08 $0.5625
===== == ===== =======
DUPONT FABROS TECHNOLOGY, INC.
RECONCILIATIONS OF NET INCOME TO FFO AND AFFO (1)
(in thousands except per share data)
Quarter ended Year ended
December 31, December 31,
-------------- ------------
2009 2008 2009 2008
---- ---- ---- ----
Net (loss) income $(11,435) $6,596 $2,886 $36,160
Depreciation and
amortization 15,150 13,587 56,701 50,703
Less: Non real estate
depreciation and
amortization (141) (93) (496) (267)
---- --- ---- ----
FFO $3,574 $20,090 $59,091 $86,596
Straight-line revenues (6,808) (4,323) (18,312) (26,441)
Amortization of lease
contracts above and below
market value (1,648) (1,744) (6,881) (6,978)
Loss on discontinuance
of cash flow hedge 13,715 - 13,715 -
Loss on early
extinguishment of debt 2,825 - 3,872 -
Compensation paid with
Company common shares 513 89 1,944 963
--- -- ----- ---
AFFO $12,171 $14,112 $53,429 $54,140
======= ======= ======= =======
FFO per share - diluted $0.05 $0.30 $0.88 $1.30
===== ===== ===== =====
FFO per share before loss
on discontinuance
of cash flow
hedge and loss on
early extinguishment
of debt - diluted $0.29 $0.30 $1.12 $1.30
===== ===== ===== =====
AFFO per share - diluted $0.18 $0.21 $0.79 $0.81
===== ===== ===== =====
Weighted average common
shares and OP units
outstanding - diluted 67,937,872 66,604,258 67,350,581 66,590,792
========== ========== ========== ==========
(1) Funds from operations, or FFO, is used by industry analysts and
investors as a supplemental operating performance measure for REITs.
We calculate FFO in accordance with the definition that was adopted
by the Board of Governors of the National Association of Real Estate
Investment Trusts, or NAREIT. FFO, as defined by NAREIT, represents
net income determined in accordance with GAAP, excluding
extraordinary items as defined under GAAP and gains or losses from
sales of previously depreciated operating real estate assets, plus
specified non-cash items, such as real estate asset depreciation and
amortization, and after adjustments for unconsolidated partnerships
and joint ventures.
We use FFO as a supplemental performance measure because, in
excluding real estate related depreciation and amortization and
gains and losses from property dispositions, it provides a
performance measure that, when compared year over year, captures
trends in occupancy rates, rental rates and operating expenses. We
also believe that, as a widely recognized measure of the performance
of equity REITs, FFO will be used by investors as a basis to compare
our operating performance with that of other REITs. However, because
FFO excludes real estate related depreciation and amortization and
captures neither the changes in the value of our properties that
result from use or market conditions nor the level of capital
expenditures and leasing commissions necessary to maintain the
operating performance of our properties, all of which have real
economic effects and could materially impact our results from
operations, the utility of FFO as a measure of our performance is
limited.
While FFO is a relevant and widely used measure of operating
performance of equity REITs, other equity REITs may use different
methodologies for calculating FFO and, accordingly, FFO as disclosed
by such other REITs may not be comparable to our FFO. Therefore, we
believe that in order to facilitate a clear understanding of our
historical operating results, FFO should be examined in conjunction
with net income as presented in the consolidated statements of
operations. FFO should not be considered as an alternative to net
income or to cash flow from operating activities (each as computed
in accordance with GAAP) or as an indicator of our liquidity, nor is
it indicative of funds available to fund our cash needs, including
our ability to pay dividends or make distributions.
FFO before loss on discontinuance of cash flow hedge and loss on
early extinguishment of debt adjusts FFO with respect to two one-
time charges taken in the fourth quarter 2009 related to the
retirement of three term loans and a line of credit using a portion
of the proceeds from the Company's fourth quarter debt financings.
We also present FFO with a supplemental adjustment which we call
Adjusted FFO ("AFFO"). AFFO is FFO excluding straight-line revenue,
non-cash stock based compensation, gain or loss on derivative
instruments, acquisition of service agreements, below market lease
amortization net of above market lease amortization and early
extinguishment of debt costs. AFFO does not represent cash
generated from operating activities in accordance with GAAP and
therefore should not be considered an alternative to net income as
an indicator of our operating performance or as an alternative to
cash flow provided by operations as a measure of liquidity and is
not necessarily indicative of funds available to fund our cash needs
including our ability to pay dividends. In addition, AFFO may not be
comparable to similarly titled measurements employed by other
companies. Our management uses AFFO in management reports to provide
a measure of REIT operating performance that can be compared to
other companies using AFFO.
DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands except share data)
December 31, December 31,
2009 2008
---- ----
ASSETS
Income producing property:
Land $44,001 $39,617
Buildings and improvements 1,438,598 1,277,230
--------- ---------
1,482,599 1,316,847
Less: accumulated depreciation (115,225) (63,669)
-------- -------
Net income producing property 1,367,374 1,253,178
Construction in progress and land held for
development 330,170 447,881
------- -------
Net real estate 1,697,544 1,701,059
Cash and cash equivalents 38,279 53,512
Marketable securities held to maturity 138,978 -
Restricted cash 10,222 134
Rents and other receivables 2,550 1,078
Deferred rent 57,364 39,052
Lease contracts above market value, net 16,349 19,213
Deferred costs, net 52,208 42,917
Prepaid expenses and other assets 9,551 7,798
----- -----
Total assets $2,023,045 $1,864,763
========== ==========
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Mortgage notes payable $348,500 $433,395
Unsecured notes payable 550,000 -
Line of credit - 233,424
Accounts payable and accrued
liabilities 19,811 13,257
Construction costs payable 6,229 82,241
Lease contracts below market value,
net 28,689 38,434
Prepaid rents and other liabilities 15,564 27,075
------ ------
Total liabilities 968,793 827,826
Redeemable noncontrolling interests –
operating partnership 448,811 484,768
Commitments and contingencies - -
Stockholders’ equity:
Preferred stock, par value $.001,
50,000,000 shares authorized,
no shares issued or outstanding at
December 31, 2009 and December
31, 2008 - -
Common stock, par value $.001,
250,000,000 shares authorized,
42,373,340 shares issued and
outstanding at December 31,
2009 and 35,495,257 shares issued and
outstanding at December 31, 2008 42 35
Additional paid in capital 683,870 641,819
Accumulated deficit (78,471) (80,224)
Accumulated other comprehensive loss - (9,461)
--- ------
Total stockholders’ equity 605,441 552,169
------- -------
Total liabilities and stockholders’ equity $2,023,045 $1,864,763
========== ==========
DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year ended
December 31,
-------------
2009 2008
---- ----
Cash flow from operating activities
Net income $2,886 $36,160
Adjustments to reconcile net income
to net cash provided by
operating activities
Depreciation and amortization 56,701 50,703
Straight line rent (18,312) (26,441)
Loss on discontinuance of cash flow
hedge 13,715 -
Amortization of deferred financing costs 4,982 1,782
Write-off of deferred financing costs 3,872 -
Amortization of lease contracts above
and below market value (6,881) (6,978)
Compensation paid with Company common
shares 1,944 963
Changes in operating assets and liabilities
Restricted cash (88) (15)
Rents and other receivables (1,472) 226
Deferred costs (2,866) (790)
Prepaid expenses and other assets (1,373) (2,809)
Accounts payable and accrued
liabilities 6,553 1,864
Prepaid rents and other
liabilities 6,237 4,611
----- -----
Net cash provided by operating activities 65,898 59,276
------ ------
Cash flow from investing activities
Investments in real estate – development (113,918) (317,299)
Purchases of marketable securities held to maturity (138,978) -
Interest capitalized for real estate under
development (5,691) (13,150)
Improvements to real estate (3,384) (3,701)
Additions to non-real estate property (404) (642)
---- ----
Net cash used in investing activities (262,375) (334,792)
-------- --------
Cash flow from financing activities
Line of credit:
Proceeds - 233,700
Repayments (233,424) (276)
Unsecured notes payable:
Proceeds 550,000 -
Mortgage notes payable:
Proceeds 331,726 136,676
Lump sum payoffs (365,121) -
Repayments (51,500) -
Escrowed proceeds (10,000) -
Offering costs - (87)
Payments of financing costs (21,310) (4,776)
Payment for termination of cash flow hedge (13,715) -
Dividends and distributions:
Common shares (3,389) (25,273)
Noncontrolling interests – operating
partnership (2,023) (22,446)
------ -------
Net cash provided by financing activities 181,244 317,518
------- -------
Net (decrease) increase in cash and cash equivalents (15,233) 42,002
Cash and cash equivalents, beginning 53,512 11,510
------ ------
Cash and cash equivalents, ending $38,279 $53,512
======= =======
Supplemental information:
Cash paid for interest, net of amounts
capitalized $23,732 $10,195
======= =======
Deferred financing costs capitalized for real
estate under development $1,330 $2,298
====== ======
Construction costs payable capitalized to
real estate $6,229 $82,241
====== =======
Redemptions of OP units for common shares $96,700 $-
======= ===
Adjustments to redeemable non-controlling
interests $58,105 $-
======= ===
DUPONT FABROS TECHNOLOGY, INC.
Operating Properties
As of December 31, 2009
Year Gross Raised Critical %
Property Built/ Building Square Load Leased
Property Location Renovated Area (2) Feet (3) MW (4) (5)
-------- -------- --------- -------- -------- ------ ---
Stabilized (1)
ACC2 Ashburn,
VA 2001/2005 87,000 53,000 10.4 100%
ACC3 Ashburn,
VA 2001/2006 147,000 80,000 13.0 100%
ACC4 Ashburn,
VA 2007 347,000 172,000 36.4 100%
VA3 Reston,
VA 2003 256,000 145,000 13.0 100%
VA4 Bristow,
VA 2005 230,000 90,000 9.6 100%
------- ------ --- ----
Subtotal-
stabilized 1,067,000 540,000 82.4 100%
Completed not
Stabilized
ACC5 Phase I Ashburn,
VA 2009 181,000 86,000 18.2 84%
CH1 Phase I Elk Grove
Village, IL 2008 285,000 121,000 18.2 48%
------- ------- ----
Total
Operating
Properties 1,533,000 747,000 118.8
========= ======= =====
(1) Stabilized operating properties are either 85% or more leased or
have been in service for 24 months or greater.
(2) Gross building area is the entire building area, including raised
square footage (the portion of gross building area where our
tenants' computer servers are located), tenant common areas, areas
controlled by us (such as the mechanical, telecommunications and
utility rooms) and, in some facilities, individual office and
storage space leased on an as available basis to our tenants.
(3) Raised square footage is that portion of gross building area where
our tenants locate their computer servers. We consider raised square
footage to be the net rentable square footage in each of our
facilities.
(4) Critical load (also referred to as IT load or load used by tenants'
servers or related equipment) is the power available for exclusive
use by our tenants expressed in terms of megawatt, or MW, or
kilowatt, or kW (1 MW is equal to 1,000 kW).
(5) Percentage leased is expressed as a percentage of critical load that
is subject to an executed lease. Represents $141 million of base
rent for the next twelve months on a straight-line basis for leases
executed and/or amended as of December 31, 2009 over the non-
cancellable terms of the respective leases and excludes
approximately $3 million net amortization increase in revenue of
above and below market leases. Base rent for the next 12 months on
a cash basis as of December 31, 2009 is $114 million assuming no
additional leasing or changes to existing leases.
DUPONT FABROS TECHNOLOGY, INC.
Lease Expirations
As of December 31, 2009
The following table sets forth a summary schedule of lease expirations of
our operating properties for each of the ten calendar years beginning with
2010. The information set forth in the table assumes that tenants exercise
no renewal options and considers early tenant termination options.
Raised
Square % of
Number Feet Leased Total
of Expiring Net kW of % of
Year of Leases (in Raised Expiring % of Annualized
Lease Expiring thousands) Square Leases Leased Base
Expiration (1) (2) Feet (3) kW Rent
----------- -------- ---------- ------- --------- ------- ---------
2010 - - - - - -
2011 2 20 2.9% 2,438 2.3% 1.8%
2012 2 82 12.1% 7,340 6.9% 6.3%
2013 3 45 6.7% 4,630 4.4% 3.2%
2014 8 58 8.7% 8,700 8.2% 8.5%
2015 2 68 10.1% 12,000 11.3% 9.8%
2016 2 55 8.1% 8,100 7.6% 8.6%
2017 5 71 10.5% 12,324 11.6% 12.5%
2018 4 75 11.2% 15,113 14.2% 15.1%
2019 9 119 17.7% 21,500 20.2% 19.0%
After 2019 5 81 12.0% 14,277 13.3% 15.2%
-- --- --- ------- --- ---
Total 42 674 100% 106,422 100% 100%
== === === ======= === ===
(1) The operating properties have 22 tenants with 42 different lease
expiration dates. Top three tenants represent 66% of annualized base
rent.
(2) Raised square footage is that portion of gross building area where
our tenants locate their computer servers. We consider raised square
footage to be the net rentable square footage in each of our
facilities.
(3) One megawatt is equal to 1,000 kW.
DUPONT FABROS TECHNOLOGY, INC.
Development Projects
As of December 31, 2009
($ in thousands)
Construction
in
Progress
& Land
Crit- Esti- Held Percen-
Property Property Gross Raised ical mated for tage
Location Building Square Load Total Develop- Pre-
Area Feet MW Cost ment Leased
(1) (2) (3) (4) (5)
-------- ------ ----- ------ ------- ------
Current
Development
Projects
------------
ACC5 $140,000 -
Phase II Ashburn, VA 181,000 86,000 18.2 $150,000 $60,479 50%
NJ1 $200,000 -
Phase I Piscataway, NJ 181,000 86,000 18.2 $215,000 133,579 0%
------- ------ ---- -------- -------
$340,000 -
362,000 172,000 36.4 $365,000 194,058
------- ------- ---- -------- -------
Future
Development
Projects/
Phases
----------
CH1
Phase II Elk Grove
Village, IL 200,000 90,000 18.2 *
NJ1
Phase II Piscataway,
NJ 181,000 86,000 18.2 *
SC1
Phase I Santa Clara,
CA 181,000 86,000 18.2 *
SC1
Phase II Santa Clara,
CA 181,000 86,000 18.2 *
------- ------ ---- -------
743,000 348,000 72.8 118,811
------- ------- ---- -------
Land Held
for
Development
------------
ACC6
Phase
I/II Ashburn, VA 240,000 155,000 31.2 *
ACC7 Ashburn, VA 100,000 50,000 10.4 *
SC2
Phase
I/II Santa Clara,
CA 300,000 171,000 36.4 *
------- ------- ----
640,000 376,000 78.0 17,301
------- ------- ---- ------
Total 1,745,000 896,000 187.2 $330,170
========= ======= ===== ========
* Development costs have not yet been estimated.
(1) Gross building area is the entire building area, including raised
square footage (the portion of gross building area where our
tenants' computer servers are located), tenant common areas, areas
controlled by us (such as the mechanical, telecommunications and
utility rooms) and, in some facilities, individual office and
storage space leased on an as available basis to our tenants.
(2) Raised square footage is that portion of gross building area where
our tenants locate their computer servers. We consider raised square
footage to be the net rentable square footage in each of our
facilities.
(3) Critical load (also referred to as IT load or load used by tenants'
servers or related equipment) is the power available for exclusive
use by our tenants expressed in terms of MW or kW (1 MW is equal to
1,000 kW).
(4) Includes estimated capitalization for construction and development,
including closing costs, capitalized interest and capitalized
operating carrying costs, as applicable, upon completion.
(5) Amount capitalized as of December 31, 2009.
DUPONT FABROS TECHNOLOGY, INC.
Debt Summary as of December 31, 2009
($ in thousands)
Maturities
Amounts % of Total Rates (1) (years)
------- ---------- --------- -------
Secured $348,500 38.8% 4.6% 3.2
Unsecured 550,000 61.2% 8.5% 7.3
------- ---- --- ---
Total $898,500 100.0% 7.0% 5.7
======== ===== === ===
Fixed Rate Debt:
Unsecured Notes $550,000 61.2% 8.5% 7.3
-------- ---- --- ---
Fixed
Rate
Debt 550,000 61.2% 8.5% 7.3
------- ---- --- ---
Floating Rate Debt:
ACC4 Term Loan 198,500 22.1% 3.8% 1.8
ACC5 Term Loan 150,000 16.7% 5.8% 4.9
------- ---- --- ---
Floating
Rate
Debt 348,500 38.8% 4.6% 3.2
------- ---- --- ---
Total $898,500 100.0% 7.0% 5.7
======== ===== === ===
Note: The Company capitalized interest of $0.8 million and $7.0 million
during the three and twelve months ended December 31, 2009, respectively.
(1) Rate as of December 31, 2009.
Debt Maturity Schedule as of December 31, 2009
($ in thousands)
Year Fixed Rate Floating Rate Total % of Total Rates (4)
---- ---------- ------------- ----- ---------- ---------
2010 $- $2,000(2) $2,000 0.2% 3.8%
2011 - 199,100(2)(3) 199,100 22.2% 3.8%
2012 - 5,200(3) 5,200 0.6% 5.8%
2013 - 5,200(3) 5,200 0.6% 5.8%
2014 - 137,000(3) 137,000 15.2% 5.8%
2015 125,000(1) - 125,000 13.9% 8.5%
2016 125,000(1) - 125,000 13.9% 8.5%
2017 300,000(1) - 300,000 33.4% 8.5%
------- --- ------- ----- ----
Total $550,000 $348,500 $898,500 100% 7.0%
======== ======== ======== ==== ====
(1) The Unsecured Notes have mandatory amortizations of $125.0 million
due in 2015, $125.0 million due in 2016 and $300.0 million due in
2017.
(2) The ACC4 Term Loan matures on October 24, 2011 and includes an
option to extend the maturity date one year to October 24, 2012
exercisable by the Company upon satisfaction of certain customary
conditions. Scheduled principal amortization payments are $0.5
million per quarter.
(3) The ACC5 Term Loan matures on December 2, 2014 with no extension
option. Scheduled principal amortization payments of $1.3 million
per quarter start in the third quarter of 2011 or upon economic
stabilization, whichever is earlier.
(4) Rate as of December 31, 2009.
DUPONT FABROS TECHNOLOGY, INC.
Selected Unsecured Debt Metrics
12/31/09
--------
Interest Coverage ratio (not less than 2.0) 2.2
Total Debt to Gross Asset Value (not to exceed 60%) 42.3%
Secured Debt to Total Assets (not to exceed 40%) 16.4%
Total Unsecured Assets to Unsecured Debt (not less than 150%) 184.3%
These selected metrics relate to DuPont Fabros Technology, LP's
outstanding unsecured debt. DuPont Fabros Technology, Inc. is the
general partner of DuPont Fabros Technology, LP.
Capital Structure as of December 31, 2009
(in thousands except per share data)
Mortgage notes payable $348,500
Unsecured Notes 550,000
-------
Total Debt 898,500 42.6%
Common Shares 63% 42,373
Operating Partnership
("OP") Units 37% 24,948
-- ------
Total Shares and OP Units 100% 67,321
Common Share Price at
December 31, 2009 $17.99
------
Total Equity 1,211,105 57.4%
--------- ----
Total Market Capitalization 2,109,605 100.00%
========= ======
DUPONT FABROS TECHNOLOGY, INC.
Common Share and OP Unit
Weighted Average Amounts Outstanding
YTD YTD
Q4 2009 Q4 2008 2009 2008
------- ------- ---- ----
Weighted Average Amounts
Outstanding for EPS Purposes:
Common Shares – basic 41,514,002 35,441,987 39,938,225 35,428,521
Shares issued from assumed
conversion of
- Restricted Shares - - 268,316 -
- Stock options - - 429,494 -
--- --- ------- ---
Total Common Shares - diluted 41,514,002 35,441,987 40,636,035 35,428,521
========== ========== ========== ==========
Weighted Average Amounts
Outstanding for FFO and
AFFO Purposes:
Common Shares – basic 41,514,002 35,441,987 39,938,225 35,428,521
OP Units – basic 25,166,370 31,162,271 26,714,546 31,162,271
---------- ---------- ---------- ----------
Total Common Shares and OP
Units 66,680,372 66,604,258 66,652,771 66,590,792
Share issued from assumed
conversion of
- Restricted Shares 463,802 - 268,316 -
- Stock options 793,698 - 429,494 -
------- --- ------- ---
Total Common Shares and OP
Units - diluted 67,937,872 66,604,258 67,350,581 66,590,792
========== ========== ========== ==========
Period Ending Amounts
Outstanding:
Common Shares 42,373,340
OP Units 24,947,830
----------
Total Common Shares and OP
Units 67,321,170
==========
DUPONT FABROS TECHNOLOGY, INC.
2010 Guidance
The earnings guidance/projections provided below are based on current
expectations and are forward-looking.
Expected Q1 2010 Expected 2010
per share per share
--------- ---------
Earnings per share and unit – diluted $0.06 to $0.09 $0.32 to $0.50
Depreciation and amortization, net 0.22 0.93 to 0.95
-------------- ---------------
FFO per share and unit – diluted (1) $0.28 to $0.31 $1.25 to $1.45
============== ===============
2010 Capital Assumptions
------------------------
Weighted average debt outstanding $898.0 million
Weighted average interest rate 7.2%
Total interest costs $64.7 million
Total amortization of deferred financing costs $5.5 million
Interest expense capitalized $(13.5) to $(17.5) million
Deferred financing costs amortization
capitalized $(1.0) to $(1.5) million
--------------------------
Total interest expense after capitalization $51.2 to $55.7 million
==========================
Note: Guidance assumes no new debt or equity issued from the date of this
release.
2010 Other Guidance Assumptions
-------------------------------
Total revenues $240 to $260 million
Other revenues (included in total revenues) $8 to $10 million
Straight-line revenues (included in total revenues) $30 to $40 million
Below market lease amortization, net of above market
lease amortization $3 million
General and administrative expense $13 to $15 million
Improvements to real estate excluding development $3 to $5 million
Estimated required REIT dividend distribution
payout $0.30 to $0.35 per share
Weighted average common shares and OP
units - diluted 68.5 million
(1) Funds from operations, or FFO, is used by industry analysts and
investors as a supplemental operating performance measure for REITs.
We calculate FFO in accordance with the definition that was adopted
by the Board of Governors of the National Association of Real Estate
Investment Trusts, or NAREIT. FFO, as defined by NAREIT, represents
net income determined in accordance with GAAP, excluding
extraordinary items as defined under GAAP and gains or losses from
sales of previously depreciated operating real estate assets, plus
specified non-cash items, such as real estate asset depreciation and
amortization, and after adjustments for unconsolidated partnerships
and joint ventures.
We use FFO as a supplemental performance measure because, in
excluding real estate related depreciation and amortization and
gains and losses from property dispositions, it provides a
performance measure that, when compared year over year, captures
trends in occupancy rates, rental rates and operating expenses. We
also believe that, as a widely recognized measure of the performance
of equity REITs, FFO will be used by investors as a basis to compare
our operating performance with that of other REITs. However, because
FFO excludes real estate related depreciation and amortization and
captures neither the changes in the value of our properties that
result from use or market conditions nor the level of capital
expenditures and leasing commissions necessary to maintain the
operating performance of our properties, all of which have real
economic effects and could materially impact our results from
operations, the utility of FFO as a measure of our performance is
limited.
While FFO is a relevant and widely used measure of operating
performance of equity REITs, other equity REITs may use different
methodologies for calculating FFO and, accordingly, FFO as disclosed
by such other REITs may not be comparable to our FFO. Therefore, we
believe that in order to facilitate a clear understanding of our
historical operating results, FFO should be examined in conjunction
with net income as presented in the consolidated statements of
operations. FFO should not be considered as an alternative to net
income or to cash flow from operating activities (each as computed
in accordance with GAAP) or as an indicator of our liquidity, nor is
it indicative of funds available to fund our cash needs, including
our ability to pay dividends or make distributions.
SOURCE DuPont Fabros Technology, Inc.
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