Maryland (State or Other Jurisdiction of Incorporation) | 001-33748 (Commission File Number) | 20 - 8718331 (I.R.S. Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule l4a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule l4d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule l3e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |
99.1 | Press Release dated April 27, 2017 |
DUPONT FABROS TECHNOLOGY, INC. | |
April 27, 2017 | /s/ Richard A. Montfort, Jr. |
Richard A. Montfort, Jr. | |
Executive Vice President, General Counsel and Secretary |
Exhibit No. | Description | |
99.1 | Press Release dated April 27, 2017 |
First Quarter 2017 |
Earnings Release and Supplemental Information |
DuPont Fabros Technology, Inc. 401 9th Street, NW, Suite 600 Washington, D.C. 20004 (202) 728-0044 www.dft.com NYSE: DFT | Investor Relations Contacts: | ||
Jeffrey H. Foster Chief Financial Officer jfoster@dft.com (202) 478-2333 | Steven Rubis Vice President, Investor Relations srubis@dft.com (202) 478-2330 |
Table of Contents | |||
Earnings Release | 1-5 | ||
Consolidated Statements of Operations | 6 | ||
Reconciliations of Net Income to NAREIT FFO, Normalized FFO and AFFO | 7 | ||
Consolidated Balance Sheets | 8 | ||
Consolidated Statements of Cash Flows | 9 | ||
Operating Properties | 10 | ||
Lease Expirations | 11 | ||
Leasing Statistics | 12 | ||
Top Customers | 13 | ||
Same Store Analysis | 14-15 | ||
Development Projects | 16 | ||
Debt Summary and Debt Principal Repayments | 17 | ||
Selected Unsecured Debt Metrics and Capital Structure | 18 | ||
Common Share and OP Unit Weighted Average Amounts Outstanding | 19 | ||
2017 Guidance | 20 |
• | As of April 27, 2017, our operating portfolio was 99% leased and commenced as measured by critical load (in megawatts, or "MW") and computer room square feet ("CRSF"), and 51% of the MW under development have been pre-leased. |
• | First Quarter 2017 Highlights: |
• | Double digit growth rates versus prior year quarter: |
◦ | Revenue: +12% |
◦ | Earnings per share: +25% |
◦ | Normalized Funds from Operations ("FFO") per share: +15% |
◦ | Adjusted FFO ("AFFO"): +40% |
• | Executed two leases totaling 5.62 MW and 34,636 CRSF with a weighted average lease term of 6.5 years. One of these leases, which totals 4.2 MW and 25,686 CRSF, was disclosed in our fourth quarter 2016 earnings release. |
• | Executed one lease amendment for the remaining 4,307 CRSF in ACC7 with a term of 9.7 years. |
• | Second Quarter 2017 Highlights to date: |
• | Executed three pre-leases totaling 28.80 MW and 161,822 CRSF in our ACC9 and CH3 data centers, with a weighted average lease term of 8.5 years. |
• | Commenced development of ACC10 Phase I in Ashburn, Virginia, comprising 15.00 MW and 90,000 CRSF, with expected delivery in the second quarter of 2018. |
• | Commenced development of CH3 Phase II, comprising 12.80 MW and 89,000 CRSF, with expected delivery in the second quarter of 2018. |
• | Increased operating income, excluding depreciation of $0.11 per share, primarily due to new leases commencing and |
• | Lower preferred stock dividends of $0.04 per share due to fewer preferred shares outstanding and a lower dividend rate, partially offset by |
• | $0.05 per share from the issuance of common equity in the first quarter of 2016. |
• | Executed two leases totaling 5.62 MW and 34,636 CRSF: |
• | One lease was at ACC7 Phase IV for 4.20 MW and 25,686 CRSF. This lease was disclosed in our February 23, 2017 earnings release and resulted in ACC7 being 100% leased and commenced on a critical load basis. |
• | One lease was at CH2 Phase II for 1.42 MW and 8,950 CRSF. This lease commenced in the first quarter and resulted in CH2 being 100% leased and commenced. |
• | Executed one lease amendment for the remaining 4,307 CRSF in ACC7 which commenced in the first quarter. |
• | Executed three pre-leases totaling 28.80 MW and 161,822 CRSF: |
• | One pre-lease was for the entire CH3 Phase I, comprising 14.40 MW and 71,506 CRSF. This lease is expected to commence in the first quarter of 2018 when CH3 Phase I is placed into service. CH3 Phase I is now 100% pre-leased both on critical load and CRSF. Based on this lease and our current estimate of CH3 developments costs, we forecast that the unlevered GAAP return on investment for CH3 will be between 11% and 12%. |
• | One pre-lease was for 7.20 MW and 45,158 CRSF in ACC9 Phase I. This lease will commence on May 1, 2017 as ACC9 Phase I is now in service. ACC9 Phase I is 70% leased on critical load and CRSF. |
• | One pre-lease was for 7.20 MW and 45,158 CRSF in ACC9 Phase II. This lease is expected to commence in the third quarter of 2017 when ACC9 Phase II is placed into service. ACC9 Phase II is now 50% pre-leased on both critical load and CRSF. Based on the pre-leases signed to date at |
• | Executed six new leases, lease amendments and pre-leases, with a weighted average lease term of 8.1 years, totaling 34.42 MW and 200,765 CRSF, which are expected to generate approximately $36.7 million of annualized GAAP base rent revenue, which is equivalent to a GAAP rate of $89 per kW per month. These leases are expected to generate approximately $46.4 million of GAAP annualized revenue, which includes estimated amounts of operating expense recoveries, net of recovery of metered power, which results in a GAAP rate of $112 per kW per month. |
• | Commenced three leases totaling 5.62 MW and 38,943 CRSF. |
Data Center Phase | Critical Load Capacity (MW) | Anticipated Placed in Service Date | Percentage Pre-Leased CRSF / Critical Load | ||||
ACC9 Phase I | 14.4 | Q2 2017 | 70% / 70% | ||||
ACC9 Phase II | 14.4 | Q3 2017 | 50% / 50% | ||||
ACC10 Phase I | 15.0 | Q2 2018 | — | ||||
SC1 Phase III | 16.0 | Q3 2017 | 100% / 100% | ||||
TOR1 Phase IA | 6.0 | Q4 2017 | — | ||||
CH3 Phase I | 14.4 | Q1 2018 | 100% / 100% | ||||
CH3 Phase II | 12.8 | Q2 2018 | — | ||||
93.0 |
• | $0.10 per share from an assumed equity offering to fund CH3 Phase II and ACC10 Phase I, partially offset by |
• | Increased operating income, excluding depreciation, from the leases and pre-leases executed since the February 23, 2017 earnings release of $0.04 per share and |
• | Decreased interest expense of $0.03 per share from lower debt outstanding due to the assumed equity offering and higher capitalized interest related to the CH3 Phase II and ACC10 Phase I developments. |
• | $0.10 per share from an assumed equity offering to fund CH3 Phase II and ACC10 Phase I, partially offset by |
• | Decreased interest expense of $0.03 per share from lower debt outstanding and higher capitalized interest related to the CH3 Phase II and ACC10 Phase I developments. |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Revenues: | |||||||
Base rent | $ | 91,268 | $ | 82,533 | |||
Recoveries from tenants | 45,295 | 38,694 | |||||
Other revenues | 2,921 | 2,922 | |||||
Total revenues | 139,484 | 124,149 | |||||
Expenses: | |||||||
Property operating costs | 40,191 | 35,955 | |||||
Real estate taxes and insurance | 5,010 | 5,316 | |||||
Depreciation and amortization | 28,207 | 25,843 | |||||
General and administrative | 6,812 | 5,575 | |||||
Other expenses | 2,705 | 2,349 | |||||
Total expenses | 82,925 | 75,038 | |||||
Operating income | 56,559 | 49,111 | |||||
Interest: | |||||||
Expense incurred | (11,459 | ) | (11,569 | ) | |||
Amortization of deferred financing costs | (825 | ) | (845 | ) | |||
Net income | 44,275 | 36,697 | |||||
Net income attributable to redeemable noncontrolling interests – operating partnership | (5,712 | ) | (5,478 | ) | |||
Net income attributable to controlling interests | 38,563 | 31,219 | |||||
Preferred stock dividends | (3,333 | ) | (6,811 | ) | |||
Net income attributable to common shares | $ | 35,230 | $ | 24,408 | |||
Earnings per share – basic: | |||||||
Net income attributable to common shares | $ | 0.46 | $ | 0.36 | |||
Weighted average common shares outstanding | 76,670,425 | 66,992,995 | |||||
Earnings per share – diluted: | |||||||
Net income attributable to common shares | $ | 0.45 | $ | 0.36 | |||
Weighted average common shares outstanding | 77,651,406 | 67,846,115 | |||||
Dividends declared per common share | $ | 0.50 | $ | 0.47 |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Net income | $ | 44,275 | $ | 36,697 | |||
Depreciation and amortization | 28,207 | 25,843 | |||||
Less: Non-real estate depreciation and amortization | (204 | ) | (194 | ) | |||
NAREIT FFO | 72,278 | 62,346 | |||||
Preferred stock dividends | (3,333 | ) | (6,811 | ) | |||
NAREIT FFO attributable to common shares and common units | 68,945 | 55,535 | |||||
Severance expense and equity acceleration | 532 | — | |||||
Normalized FFO attributable to common shares and common units | 69,477 | 55,535 | |||||
Straight-line revenues, net of reserve | 1,718 | (1,737 | ) | ||||
Amortization and write-off of lease contracts above and below market value | (271 | ) | (116 | ) | |||
Compensation paid with Company common shares | 2,372 | 1,769 | |||||
Non-real estate depreciation and amortization | 204 | 194 | |||||
Amortization of deferred financing costs | 825 | 845 | |||||
Improvements to real estate | (186 | ) | (2,099 | ) | |||
Capitalized leasing commissions | (276 | ) | (1,611 | ) | |||
AFFO attributable to common shares and common units | $ | 73,863 | $ | 52,780 | |||
NAREIT FFO attributable to common shares and common units per share – diluted | $ | 0.76 | $ | 0.67 | |||
Normalized FFO attributable to common shares and common units per share – diluted | $ | 0.77 | $ | 0.67 | |||
Weighted average common shares and common units outstanding – diluted | 90,311,511 | 83,094,266 |
March 31, 2017 | December 31, 2016 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Income producing property: | |||||||
Land | $ | 103,304 | $ | 105,890 | |||
Buildings and improvements | 3,019,725 | 3,018,361 | |||||
3,123,029 | 3,124,251 | ||||||
Less: accumulated depreciation | (689,099 | ) | (662,183 | ) | |||
Net income producing property | 2,433,930 | 2,462,068 | |||||
Construction in progress and property held for development | 493,442 | 330,983 | |||||
Net real estate | 2,927,372 | 2,793,051 | |||||
Cash and cash equivalents | 44,980 | 38,624 | |||||
Rents and other receivables, net | 9,504 | 11,533 | |||||
Deferred rent, net | 121,340 | 123,058 | |||||
Deferred costs, net | 24,560 | 25,776 | |||||
Prepaid expenses and other assets | 50,256 | 46,422 | |||||
Total assets | $ | 3,178,012 | $ | 3,038,464 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Liabilities: | |||||||
Line of credit | $ | 197,819 | $ | 50,926 | |||
Mortgage notes payable, net of deferred financing costs | 109,592 | 110,733 | |||||
Unsecured term loan, net of deferred financing costs | 249,089 | 249,036 | |||||
Unsecured notes payable, net of discount and deferred financing costs | 837,895 | 837,323 | |||||
Accounts payable and accrued liabilities | 29,647 | 36,909 | |||||
Construction costs payable | 75,884 | 56,428 | |||||
Accrued interest payable | 6,273 | 11,592 | |||||
Dividend and distribution payable | 46,426 | 46,352 | |||||
Prepaid rents and other liabilities | 72,449 | 81,062 | |||||
Total liabilities | 1,625,074 | 1,480,361 | |||||
Redeemable noncontrolling interests – operating partnership | 579,329 | 591,101 | |||||
Commitments and contingencies | — | — | |||||
Stockholders’ equity: | |||||||
Preferred stock, $.001 par value, 50,000,000 shares authorized: | |||||||
Series C cumulative redeemable perpetual preferred stock, 8,050,000 shares issued and outstanding at March 31, 2017 and December 31, 2016 | 201,250 | 201,250 | |||||
Common stock, $.001 par value, 250,000,000 shares authorized, 77,836,170 shares issued and outstanding at March 31, 2017 and 75,914,763 shares issued and outstanding at December 31, 2016 | 78 | 76 | |||||
Additional paid in capital | 773,321 | 766,732 | |||||
Retained earnings | — | — | |||||
Accumulated other comprehensive loss | (1,040 | ) | (1,056 | ) | |||
Total stockholders’ equity | 973,609 | 967,002 | |||||
Total liabilities and stockholders’ equity | $ | 3,178,012 | $ | 3,038,464 |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Cash flow from operating activities | |||||||
Net income | $ | 44,275 | $ | 36,697 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 28,207 | 25,843 | |||||
Straight-line revenues, net of reserve | 1,718 | (1,737 | ) | ||||
Amortization of deferred financing costs | 825 | 845 | |||||
Amortization and write-off of lease contracts above and below market value | (271 | ) | (116 | ) | |||
Compensation paid with Company common shares | 2,536 | 1,769 | |||||
Changes in operating assets and liabilities | |||||||
Rents and other receivables | 2,029 | (97 | ) | ||||
Deferred costs | (276 | ) | (1,611 | ) | |||
Prepaid expenses and other assets | (3,907 | ) | 61 | ||||
Accounts payable and accrued liabilities | (7,274 | ) | (4,599 | ) | |||
Accrued interest payable | (5,319 | ) | (5,309 | ) | |||
Prepaid rents and other liabilities | (7,931 | ) | (407 | ) | |||
Net cash provided by operating activities | 54,612 | 51,339 | |||||
Cash flow from investing activities | |||||||
Investments in real estate – development | (137,223 | ) | (52,302 | ) | |||
Acquisition of real estate – related party | — | (20,168 | ) | ||||
Interest capitalized for real estate under development | (4,051 | ) | (3,183 | ) | |||
Improvements to real estate | (186 | ) | (2,099 | ) | |||
Additions to non-real estate property | (68 | ) | (123 | ) | |||
Net cash used in investing activities | (141,528 | ) | (77,875 | ) | |||
Cash flow from financing activities | |||||||
Line of credit: | |||||||
Proceeds | 146,549 | 60,000 | |||||
Repayments | — | (60,000 | ) | ||||
Mortgage notes payable: | |||||||
Repayments | (1,250 | ) | — | ||||
Payments of financing costs | (34 | ) | — | ||||
Issuance of common stock, net of offering costs | — | 275,797 | |||||
Equity compensation (payments) proceeds | (3,975 | ) | 7,007 | ||||
Dividends and distributions: | |||||||
Common shares | (37,939 | ) | (31,070 | ) | |||
Preferred shares | (3,333 | ) | (6,811 | ) | |||
Redeemable noncontrolling interests – operating partnership | (6,746 | ) | (7,084 | ) | |||
Net cash provided by financing activities | 93,272 | 237,839 | |||||
Net increase in cash and cash equivalents | 6,356 | 211,303 | |||||
Cash and cash equivalents, beginning of period | 38,624 | 31,230 | |||||
Cash and cash equivalents, ending of period | $ | 44,980 | $ | 242,533 | |||
Supplemental information: | |||||||
Cash paid for interest, net of amounts capitalized | $ | 16,778 | $ | 16,880 | |||
Deferred financing costs capitalized for real estate under development | $ | 302 | $ | 217 | |||
Construction costs payable capitalized for real estate under development | $ | 75,884 | $ | 21,247 | |||
Redemption of operating partnership units | $ | 77,894 | $ | 6,101 | |||
Adjustments to redeemable noncontrolling interests – operating partnership | $ | 66,249 | $ | 131,582 |
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 | 97 | % | 97 | % | ||||||||||||
ACC5 | Ashburn, VA | 2009-2010 | 360,000 | 176,000 | 99 | % | 99 | % | 36.4 | 100 | % | 100 | % | ||||||||||||
ACC6 | Ashburn, VA | 2011-2013 | 262,000 | 130,000 | 100 | % | 100 | % | 26.0 | 100 | % | 100 | % | ||||||||||||
ACC7 | Ashburn, VA | 2014-2016 | 446,000 | 238,000 | 100 | % | 100 | % | 41.6 | 100 | % | 100 | % | ||||||||||||
CH1 | Elk Grove Village, IL | 2008-2012 | 485,000 | 231,000 | 100 | % | 100 | % | 36.4 | 100 | % | 100 | % | ||||||||||||
CH2 | Elk Grove Village, IL | 2015-2016 | 328,000 | 158,000 | 100 | % | 100 | % | 26.8 | 100 | % | 100 | % | ||||||||||||
SC1 Phases I-II | Santa Clara, CA | 2011-2015 | 360,000 | 173,000 | 100 | % | 100 | % | 36.6 | 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 | % | ||||||||||||
Total Operating Properties | 3,308,000 | 1,648,000 | 99 | % | 99 | % | 287.1 | 99 | % | 99 | % |
(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, 2017 represent $383 million of base rent on a GAAP basis and $389 million of base rent on a cash basis over the next twelve months. Both amounts include $19 million of revenue from management fees over the next twelve months. |
(4) | Percentage commenced is expressed as a percentage of CRSF or critical load, as applicable, where the lease has commenced under GAAP. |
(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 (One MW is equal to 1,000 kW). |
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) | ||||||||||||
2017 (4) | 3 | 19 | 1.2 | % | 3,846 | 1.3 | % | 1.5 | % | |||||||||
2018 | 20 | 177 | 10.8 | % | 33,448 | 11.7 | % | 12.3 | % | |||||||||
2019 | 26 | 330 | 20.2 | % | 57,404 | 20.1 | % | 21.6 | % | |||||||||
2020 | 15 | 182 | 11.1 | % | 31,754 | 11.1 | % | 11.4 | % | |||||||||
2021 | 17 | 293 | 17.9 | % | 51,514 | 18.1 | % | 17.5 | % | |||||||||
2022 | 10 | 140 | 8.6 | % | 24,509 | 8.6 | % | 8.7 | % | |||||||||
2023 | 8 | 92 | 5.6 | % | 13,305 | 4.7 | % | 4.2 | % | |||||||||
2024 | 9 | 138 | 8.4 | % | 23,479 | 8.2 | % | 7.9 | % | |||||||||
2025 | 4 | 47 | 2.9 | % | 7,750 | 2.7 | % | 3.4 | % | |||||||||
2026 | 7 | 55 | 3.4 | % | 10,134 | 3.6 | % | 4.0 | % | |||||||||
After 2026 | 8 | 164 | 9.9 | % | 28,244 | 9.9 | % | 7.5 | % | |||||||||
Total | 127 | 1,637 | 100 | % | 285,387 | 100 | % | 100 | % |
(1) | Represents 32 customers with 127 lease expiration dates. One additional customer has executed a pre-lease at ACC9 and will be our 33rd customer. |
(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, 2017. |
(4) | A customer at ACC4 whose lease expires on July 31, 2017 has informed us that it does not intend to renew this lease. This lease is for 1.14 MW and 5,400 CRSF. Additionally, a customer at ACC6, whose lease expires on August 31, 2017, has informed us that it does not intend to renew this lease. This lease is for 0.54 MW and 2,523 CRSF. These leases total 0.9% of Annualized Base Rent. We are marketing these computer rooms for re-lease. |
Period | Number of Leases | Total CRSF Leased (1) | Total MW Leased (1) | |||
Q1 2017 | 3 | 38,943 | 5.62 | |||
Q4 2016 | 1 | 18,000 | 2.88 | |||
Q3 2016 | 2 | 16,319 | 2.42 | |||
Q2 2016 | 4 | 72,657 | 12.52 | |||
Trailing Twelve Months | 10 | 145,919 | 23.44 | |||
Q1 2016 | 7 | 160,686 | 33.11 |
Period | Number of Renewals | Total CRSF Renewed (1) | Total MW Renewed (1) | GAAP Rent change (2) | Cash Rent Change (2) | |||||
Q1 2017 | — | — | — | —% | —% | |||||
Q4 2016 | 1 | 13,696 | 1.30 | 5.8% | 4.0% | |||||
Q3 2016 | 2 | 16,400 | 3.41 | 1.2% | 3.0% | |||||
Q2 2016 | 4 | 21,526 | 2.72 | 3.5% | 2.9% | |||||
Trailing Twelve Months | 7 | 51,622 | 7.43 | |||||||
Q1 2016 | 1 | 2,517 | 0.54 | 14.9% | 3.0% |
(1) | CRSF is that portion of gross building area where customers locate their computer servers. One MW is equal to 1,000 kW. |
(2) | GAAP rent change compares the change in annualized base rent before and after the renewal. Cash rent change compares cash base rent at renewal execution to cash base rent at the start of the renewal period. |
2017 | 2018 | Total | ||||||||||
Incremental Revenue | $ | 12,671 | $ | — | ||||||||
Annualized Revenue | $ | 28,100 | $ | — | $ | 28,100 |
Customer | Number of Buildings | Number of Markets | Average Remaining Term | % of Annualized Base Rent (1) | |||||||||
1 | Microsoft | 9 | 3 | 6.5 | 24.9 | % | |||||||
2 | Facebook | 4 | 1 | 3.9 | 21.0 | % | |||||||
3 | Fortune 25 Investment Grade-Rated Company | 3 | 3 | 3.7 | 10.9 | % | |||||||
4 | Rackspace | 3 | 2 | 8.3 | 8.8 | % | |||||||
5 | Fortune 500 leading Software as a Service (SaaS) Provider, Not Rated | 4 | 2 | 6.2 | 8.4 | % | |||||||
6 | Yahoo! (2) | 1 | 1 | 1.1 | 5.9 | % | |||||||
7 | Server Central | 1 | 1 | 4.4 | 2.4 | % | |||||||
8 | Fortune 50 Investment Grade-Rated Company | 2 | 1 | 3.6 | 1.9 | % | |||||||
9 | Dropbox | 1 | 1 | 1.8 | 1.6 | % | |||||||
10 | IAC | 1 | 1 | 2.1 | 1.5 | % | |||||||
11 | Symantec | 2 | 1 | 2.2 | 1.3 | % | |||||||
12 | GoDaddy | 1 | 1 | 9.5 | 1.1 | % | |||||||
13 | Anexio | 3 | 1 | 6.8 | 1.0 | % | |||||||
14 | UBS | 1 | 1 | 8.3 | 1.0 | % | |||||||
15 | Sanofi Aventis | 2 | 1 | 4.3 | 0.9 | % | |||||||
Total | 92.6 | % |
(1) | Annualized base rent represents monthly contractual base rent for commenced leases (defined as cash base rent before abatements) multiplied by 12 for commenced leases as of April 1, 2017. |
(2) | Comprised of a lease at ACC4 that has been fully subleased to another DFT customer. |
Same Store Properties | Three Months Ended | ||||||||||||||||||
31-Mar-17 | 31-Mar-16 | % Change | 31-Dec-16 | % Change | |||||||||||||||
Revenue: | |||||||||||||||||||
Base rent | $ | 91,268 | $ | 79,569 | 14.7 | % | $ | 90,513 | 0.8 | % | |||||||||
Recoveries from tenants | 45,295 | 36,671 | 23.5 | % | 44,904 | 0.9 | % | ||||||||||||
Other revenues | 632 | 437 | 44.6 | % | 725 | (12.8 | )% | ||||||||||||
Total revenues | 137,195 | 116,677 | 17.6 | % | 136,142 | 0.8 | % | ||||||||||||
Expenses: | |||||||||||||||||||
Property operating costs | 40,191 | 33,625 | 19.5 | % | 40,963 | (1.9 | )% | ||||||||||||
Real estate taxes and insurance | 4,985 | 4,225 | 18.0 | % | 4,029 | 23.7 | % | ||||||||||||
Other expenses | 58 | 114 | N/M | 52 | 11.5 | % | |||||||||||||
Total expenses | 45,234 | 37,964 | 19.1 | % | 45,044 | 0.4 | % | ||||||||||||
Net operating income (1) | 91,961 | 78,713 | 16.8 | % | 91,098 | 0.9 | % | ||||||||||||
Straight-line revenues, net of reserve | 1,718 | (1,964 | ) | N/M | 1,081 | N/M | |||||||||||||
Amortization and write-off of lease contracts above and below market value | (271 | ) | (116 | ) | N/M | (91 | ) | N/M | |||||||||||
Cash net operating income (1) | $ | 93,408 | $ | 76,633 | 21.9 | % | $ | 92,088 | 1.4 | % | |||||||||
Note: Same Store Properties represent those properties placed into service on or before January 1, 2016. NJ1 is excluded as it was sold in June 2016. | |||||||||||||||||||
Same Store, Same Capital Properties | Three Months Ended | ||||||||||||||||||
31-Mar-17 | 31-Mar-16 | % Change | 31-Dec-16 | % Change | |||||||||||||||
Revenue: | |||||||||||||||||||
Base rent | $ | 70,875 | $ | 70,657 | 0.3 | % | $ | 70,979 | (0.1 | )% | |||||||||
Recoveries from tenants | 38,557 | 34,611 | 11.4 | % | 39,051 | (1.3 | )% | ||||||||||||
Other revenues | 471 | 392 | 20.2 | % | 466 | 1.1 | % | ||||||||||||
Total revenues | 109,903 | 105,660 | 4.0 | % | 110,496 | (0.5 | )% | ||||||||||||
Expenses: | |||||||||||||||||||
Property operating costs | 34,099 | 31,275 | 9.0 | % | 35,311 | (3.4 | )% | ||||||||||||
Real estate taxes and insurance | 4,127 | 3,889 | 6.1 | % | 3,440 | 20.0 | % | ||||||||||||
Other expenses | 20 | 107 | N/M | 17 | 17.6 | % | |||||||||||||
Total expenses | 38,246 | 35,271 | 8.4 | % | 38,768 | (1.3 | )% | ||||||||||||
Net operating income (1) | 71,657 | 70,389 | 1.8 | % | 71,728 | (0.1 | )% | ||||||||||||
Straight-line revenues, net of reserve | 4,015 | 870 | N/M | 3,858 | 4.1 | % | |||||||||||||
Amortization and write-off of lease contracts above and below market value | (271 | ) | (116 | ) | N/M | (91 | ) | N/M | |||||||||||
Cash net operating income (1) | $ | 75,401 | $ | 71,143 | 6.0 | % | $ | 75,495 | (0.1 | )% | |||||||||
Note: Same Store, Same Capital properties represent those properties placed into service on or before January 1, 2016 and have less than 10% of additional critical load developed after January 1, 2016. Excludes ACC7 and CH2. NJ1 is also excluded as it was sold in June 2016. (1) See next page for a reconciliation of Net Operating Income and Cash Net Operating Income to GAAP measures. |
Reconciliation of Operating Income to Same Store Net Operating Income and Cash Net Operating Income | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
31-Mar-17 | 31-Mar-16 | % Change | 31-Dec-16 | % Change | |||||||||||||||
Operating income | $ | 56,559 | $ | 49,111 | 15.2 | % | $ | 56,386 | 0.3 | % | |||||||||
Add-back: non-same store operating loss | 7,239 | 4,681 | 54.6 | % | 6,633 | 9.1 | % | ||||||||||||
Same Store: | |||||||||||||||||||
Operating income | 63,798 | 53,792 | 18.6 | % | 63,019 | 1.2 | % | ||||||||||||
Depreciation and amortization | 28,163 | 24,921 | 13.0 | % | 28,079 | 0.3 | % | ||||||||||||
Net operating income | 91,961 | 78,713 | 16.8 | % | 91,098 | 0.9 | % | ||||||||||||
Straight-line revenues, net of reserve | 1,718 | (1,964 | ) | N/M | 1,081 | N/M | |||||||||||||
Amortization and write-off of lease contracts above and below market value | (271 | ) | (116 | ) | N/M | (91 | ) | N/M | |||||||||||
Cash net operating income | $ | 93,408 | $ | 76,633 | 21.9 | % | $ | 92,088 | 1.4 | % | |||||||||
Reconciliation of Operating Income to Same Store, Same Capital Net Operating Income and Cash Net Operating Income | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
31-Mar-17 | 31-Mar-16 | % Change | 31-Dec-16 | % Change | |||||||||||||||
Operating income | $ | 56,559 | $ | 49,111 | 15.2 | % | $ | 56,386 | 0.3 | % | |||||||||
Less: non-same store, same capital operating income | (7,629 | ) | (1,400 | ) | N/M | (7,354 | ) | 3.7 | % | ||||||||||
Same Store, Same Capital: | |||||||||||||||||||
Operating income | 48,930 | 47,711 | 2.6 | % | 49,032 | (0.2 | )% | ||||||||||||
Depreciation and amortization | 22,727 | 22,678 | 0.2 | % | 22,696 | 0.1 | % | ||||||||||||
Net operating income | 71,657 | 70,389 | 1.8 | % | 71,728 | (0.1 | )% | ||||||||||||
Straight-line revenues, net of reserve | 4,015 | 870 | N/M | 3,858 | 4.1 | % | |||||||||||||
Amortization and write-off of lease contracts above and below market value | (271 | ) | (116 | ) | N/M | (91 | ) | N/M | |||||||||||
Cash net operating income | $ | 75,401 | $ | 71,143 | 6.0 | % | $ | 75,495 | (0.1 | )% |
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 | |||||||||||||||||||||||
ACC9 Phase I (6) | Ashburn, VA | 163,000 | 90,000 | 14.4 | $126,000 - $130,000 | $ | 114,618 | 20 | % | 20 | % | ||||||||||||
ACC9 Phase II (7) | Ashburn, VA | 163,000 | 90,000 | 14.4 | 126,000 - 130,000 | 95,825 | — | % | — | % | |||||||||||||
CH3 Phase I (8) | Elk Grove Village, IL | 153,000 | 71,000 | 14.4 | 136,000 - 142,000 | 31,926 | — | % | — | % | |||||||||||||
SC1 Phase III | Santa Clara, CA | 111,000 | 64,000 | 16.0 | 163,000 - 167,000 | 113,132 | 100 | % | 100 | % | |||||||||||||
TOR1 Phase IA | Vaughan, ON | 112,000 | 35,000 | 6.0 | 58,000 - 64,000 | 12,227 | — | % | — | % | |||||||||||||
702,000 | 350,000 | 65.2 | 609,000 - 633,000 | 367,728 | |||||||||||||||||||
Current Development Project - Shell Only | |||||||||||||||||||||||
ACC10 (9) | Ashburn, VA | 289,000 | 163,000 | 27.0 | 64,000 - 70,000 | 14,214 | |||||||||||||||||
289,000 | 163,000 | 27.0 | 64,000 - 70,000 | 14,214 | |||||||||||||||||||
Future Development Projects/Phases | |||||||||||||||||||||||
CH3 Phase II (10) | Elk Grove Village, IL | 152,000 | 89,000 | 12.8 | 70,000 - 74,000 | 31,687 | |||||||||||||||||
TOR1 Phase IB/C | Vaughan, ON | 225,000 | 78,000 | 12.0 | 82,000 - 90,000 | 24,455 | |||||||||||||||||
TOR1 Phase II | Vaughan, ON | 374,000 | 113,000 | 16.5 | 32,074 | 32,074 | |||||||||||||||||
751,000 | 280,000 | 41.3 | 184,074 - 196,074 | 88,216 | |||||||||||||||||||
Land Held for Development (11) | |||||||||||||||||||||||
ACC8 | Ashburn, VA | 100,000 | 50,000 | 10.4 | 4,252 | ||||||||||||||||||
ACC11 | Ashburn, VA | 150,000 | 80,000 | 16.0 | 4,805 | ||||||||||||||||||
OR1 | Hillsboro, OR | 765,000 | 329,000 | 48.0 | 7,471 | ||||||||||||||||||
OR2 | Hillsboro, OR | 765,000 | 329,000 | 48.0 | 6,756 | ||||||||||||||||||
1,780,000 | 788,000 | 122.4 | 23,284 | ||||||||||||||||||||
Total | 3,522,000 | 1,581,000 | 255.9 | $ | 493,442 |
(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 the opening of the phase(s) that are either under current development or in service. |
(5) | Amount capitalized as of March 31, 2017. Future development projects/phases include land, shell and underground work through the opening of the phase(s) that are either under current development or in service. |
(6) | As of April 27, 2017, ACC9 Phase I was 70% pre-leased based on CRSF and critical load. |
(7) | As of April 27, 2017, ACC9 Phase II was 50% pre-leased based on CRSF and critical load. |
(8) | As of April 27, 2017, CH3 Phase I was 100% pre-leased based on CRSF and critical load. |
(9) | In April 2017, we commenced development of ACC10 Phase I, comprising 15.0 MW of critical load. |
(10) | In April 2017, we commenced development of CH3 Phase II. |
(11) | Amounts listed for gross building area, CRSF and critical load are current estimates. |
March 31, 2017 | ||||||||||||
Amounts (1) | % of Total | Rates | Maturities (years) | |||||||||
Secured | $ | 110,000 | 8 | % | 2.5 | % | 1.0 | |||||
Unsecured | 1,297,819 | 92 | % | 4.7 | % | 4.7 | ||||||
Total | $ | 1,407,819 | 100 | % | 4.5 | % | 4.4 | |||||
Fixed Rate Debt: | ||||||||||||
Unsecured Notes due 2021 | $ | 600,000 | 42 | % | 5.9 | % | 4.5 | |||||
Unsecured Notes due 2023 (2) | 250,000 | 18 | % | 5.6 | % | 6.2 | ||||||
Fixed Rate Debt | 850,000 | 60 | % | 5.8 | % | 5.0 | ||||||
Floating Rate Debt: | ||||||||||||
Unsecured Credit Facility | 197,819 | 14 | % | 2.5 | % | 3.3 | ||||||
Unsecured Term Loan | 250,000 | 18 | % | 2.5 | % | 4.8 | ||||||
ACC3 Term Loan | 110,000 | 8 | % | 2.5 | % | 1.0 | ||||||
Floating Rate Debt | 557,819 | 40 | % | 2.5 | % | 3.5 | ||||||
Total | $ | 1,407,819 | 100 | % | 4.5 | % | 4.4 |
Note: | We capitalized interest and deferred financing cost amortization of $4.4 million during the three months ended March 31, 2017. |
(1) | Principal amounts exclude deferred financing costs. |
(2) | Principal amount excludes original issue discount of $1.6 million as of March 31, 2017. |
Year | Fixed Rate (1) | Floating Rate (1) | Total (1) | % of Total | Rates | |||||||||||||||
2017 | — | 7,500 | (4) | 7,500 | 0.5 | % | 2.5 | % | ||||||||||||
2018 | — | 102,500 | (4) | 102,500 | 7.3 | % | 2.5 | % | ||||||||||||
2019 | — | — | — | — | % | — | % | |||||||||||||
2020 | — | 197,819 | (5) | 197,819 | 14.0 | % | 2.5 | % | ||||||||||||
2021 | 600,000 | (2) | — | 600,000 | 42.6 | % | 5.9 | % | ||||||||||||
2022 | — | 250,000 | (6) | 250,000 | 17.8 | % | 2.5 | % | ||||||||||||
2023 | 250,000 | (3) | — | 250,000 | 17.8 | % | 5.6 | % | ||||||||||||
Total | $ | 850,000 | $ | 557,819 | $ | 1,407,819 | 100.0 | % | 4.5 | % |
(1) | Principal amounts exclude deferred financing costs. |
(2) | The 5.875% Unsecured Notes due 2021 mature on September 15, 2021. |
(3) | The 5.625% Unsecured Notes due 2023 mature on June 15, 2023. Principal amount excludes original issue discount of $1.6 million as of March 31, 2017. |
(4) | The ACC3 Term Loan matures on March 27, 2018 with no extension option. Quarterly principal payments of $1.25 million began on April 1, 2016, increased to $2.5 million on April 1, 2017 and continue through maturity. |
(5) | The Unsecured Credit Facility matures on July 25, 2020 with a one-year extension option. |
(6) | The Unsecured Term Loan matures on January 21, 2022 with no extension option. |
3/31/17 | 12/31/16 | ||
Interest Coverage Ratio (not less than 2.0) | 5.2 | 5.4 | |
Total Debt to Gross Asset Value (not to exceed 60%) | 36.3% | 34.0% | |
Secured Debt to Total Assets (not to exceed 40%) | 2.8% | 3.0% | |
Total Unsecured Assets to Unsecured Debt (not less than 150%) | 206% | 231% |
(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. |
Line of Credit | $ | 197,819 | |||||||||||||||
Mortgage Notes Payable | 110,000 | ||||||||||||||||
Unsecured Term Loan | 250,000 | ||||||||||||||||
Unsecured Notes | 850,000 | ||||||||||||||||
Total Debt | 1,407,819 | 23.3 | % | ||||||||||||||
Common Shares | 87 | % | 77,836 | ||||||||||||||
Operating Partnership (“OP”) Units | 13 | % | 11,683 | ||||||||||||||
Total Shares and Units | 100 | % | 89,519 | ||||||||||||||
Common Share Price at March 31, 2017 | $ | 49.59 | |||||||||||||||
Common Share and OP Unit Capitalization | $ | 4,439,247 | |||||||||||||||
Preferred Stock ($25 per share liquidation preference) | 201,250 | ||||||||||||||||
Total Equity | 4,640,497 | 76.7 | % | ||||||||||||||
Total Market Capitalization | $ | 6,048,316 | 100.0 | % |
Q1 2017 | Q1 2016 | ||||
Weighted Average Amounts Outstanding for EPS Purposes: | |||||
Common Shares - basic | 76,670,425 | 66,992,995 | |||
Effect of dilutive securities | 980,981 | 853,120 | |||
Common Shares - diluted | 77,651,406 | 67,846,115 | |||
Weighted Average Amounts Outstanding for FFO, Normalized FFO and AFFO Purposes: | |||||
Common Shares - basic | 76,670,425 | 66,992,995 | |||
OP Units - basic | 12,425,238 | 15,035,445 | |||
Total Common Shares and OP Units | 89,095,663 | 82,028,440 | |||
Effect of dilutive securities | 1,215,848 | 1,065,826 | |||
Common Shares and Units - diluted | 90,311,511 | 83,094,266 | |||
Period Ending Amounts Outstanding: | |||||
Common Shares | 77,836,170 | ||||
OP Units | 11,682,368 | ||||
Total Common Shares and Units | 89,518,538 |
Expected Q2 2017 per share | Expected 2017 per share | ||
Net income per common share and common unit - diluted | $0.45 to $0.47 | $1.75 to $1.87 | |
Depreciation and amortization, net | 0.31 | 1.25 | |
NAREIT FFO per common share and common unit - diluted (1) | $0.76 to $0.78 | $3.00 to $3.12 | |
Severance and equity acceleration | — | 0.01 | |
Normalized FFO per common share and common unit - diluted (1) | $0.76 to $0.78 | $3.01 to $3.13 | |
Straight-line revenues, net of reserve | — | 0.04 | |
Amortization of lease contracts above and below market value | — | — | |
Compensation paid with Company common shares | 0.03 | 0.10 | |
Non-real estate depreciation and amortization | — | 0.01 | |
Amortization of deferred financing costs | 0.01 | 0.04 | |
Improvements to real estate | (0.02) | (0.05) | |
Capitalized leasing commissions | (0.01) | (0.05) |
2017 Debt Assumptions | ||
Weighted average debt outstanding | $1,518.0 million | |
Weighted average interest rate (one-month LIBOR avg. 1.12%, one-month CDOR avg. 0.92%) | 4.94% | |
Total interest costs | $75.0 million | |
Amortization of deferred financing costs | 4.9 million | |
Interest expense capitalized | (20.4) million | |
Deferred financing costs amortization capitalized | (1.3) million | |
Total interest expense after capitalization | $58.2 million | |
2017 Other Guidance Assumptions | ||
Total revenues | $570 to $585 million | |
Base rent (included in total revenues) | $375 to $385 million | |
General and administrative expense | $26 to $27 million | |
Investments in real estate - development (2) | $725 to $775 million | |
Improvements to real estate excluding development | $5 million | |
Preferred stock dividends | $13 million | |
Annualized common stock dividend | $2.00 per share | |
Weighted average common shares and OP units - diluted | 93.5 million | |
Acquisitions of income producing properties | No amounts budgeted |
(1) | For information regarding NAREIT 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 2017 for ACC9 Phases I and II, ACC10 Phase I, CH3 Phases I and II, SC1 Phase III and TOR1 Phase 1A, which are currently in development and OR1 Phase I, which is a planned future development that requires board approval. |