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 DuPont Fabros Technology, Inc. Reports Third Quarter 2009 ResultsNovember 3, 2009 Revenues Up 21%WASHINGTON, Nov. 3 /PRNewswire-FirstCall/ -- DuPont Fabros Technology, Inc. (NYSE: DFT) today reported results for the three and nine months ended September 30, 2009. All per share results are reported on a fully diluted basis. Highlights
-- Executed five leases totaling 15.90 megawatts in third quarter,
representing approximately $310 million of total contract value over
respective lease terms.
-- CH1 Phase I 48% leased, ACC5 Phase I 73% leased and ACC5 Phase II 38%
pre-leased.
-- Subsequent to the end of the third quarter executed one lease totaling
1.95 megawatts in Reston, Virginia. This lease, which commences in
January 2010, fully re-leases the 27,268 raised square feet expiring on
December 31, 2009.
-- Opened Phase I of ACC5, which adds 18% of critical load to our operating
portfolio.
-- Funds From Operations ("FFO") of $0.29 per share for third quarter of
2009, which was in the upper half of guidance range.
-- Revenues increased 21.0% in the third quarter and 17.0% year to date.
-- Raised the lower end of 2009 FFO per share guidance range by $0.04 per
share to $1.09 to $1.12 per share.
-- Raised the 2009 required dividend payout per share guidance by $0.04 per
share to $0.24 to $0.30 per share.
Hossein Fateh, President and Chief Executive Officer of the Company, said, "During the third quarter, we continued to focus on leasing and operations, and are pleased with the progress made. Year to date we have signed 12 leases totaling 32.80 megawatts of critical load, 187,350 raised square feet of space and approximately $700 million of contract value to the Company. In the third quarter we also achieved a solid quarter of earnings and opened our ACC5 Phase I development. Looking ahead, a principal objective will be raising the funds necessary to start the next two developments in early 2010 in order to capitalize on market demand for our product." Third Quarter 2009 Results For the quarter ended September 30, 2009, the Company reported earnings per share of $0.08 compared to $0.12 for the third quarter of 2008. Revenues increased 21.0%, or $9.0 million, to $51.9 million for the third quarter of 2009 over the third quarter of 2008. The $0.04 per share decrease in earnings per share is primarily due to higher interest expense, which is attributable to higher debt balances and lower capitalized interest, partially offset by higher operating income. FFO per share for the quarter ended September 30, 2009 was $0.29 compared to $0.31 for the quarter ended September 30, 2008. The $0.02 per share decrease is primarily due to higher interest expense, partially offset by higher operating income, as referenced above. Nine Months Ended September 30, 2009 For the nine months ended September 30, 2009, the Company reported earnings per share of $0.22 compared to $0.44 for the nine months ended September 30, 2008. Revenues increased 17.0%, or $21.5 million, to $147.6 million for the nine months ended September 30, 2009 over the year ago period. The overall decrease in earnings per share is primarily attributable to higher interest expense, which is due to higher debt balances and lower capitalized interest, and increased depreciation and amortization in the current period. FFO per share for the nine months ended September 30, 2009 was $0.83 compared to $1.00 for the corresponding period in 2008. The $0.17 per share decrease is primarily due to higher interest expense, as referenced above. Portfolio Update/Status During the third quarter of 2009, the Company executed five new leases totaling 15.90 megawatts of critical load and 90,460 raised square feet with an average lease term of 10.6 years. This represents approximately $310 million of contract value to the Company.
-- One lease was signed at CH1 Phase I in Elk Grove Village, Illinois
representing 5.63 megawatts of critical load and 36,700 raised square
feet.
-- Two leases were signed at ACC5 Phase I in Ashburn, Virginia comprising
2.84 megawatts of critical load and 13,700 raised square feet.
-- One lease was signed at VA3 in Reston, Virginia comprising 0.60
megawatts of critical load and 7,060 raised square feet. This is a new
lease of space being vacated at the end of 2009.
-- One pre-lease was signed at ACC5 Phase II in Ashburn, Virginia
comprising 6.83 megawatts of critical load and 33,000 raised square feet
with a January 1, 2011 move-in date.
Subsequent to the end of the third quarter, the Company executed one lease at VA3 in Reston, Virginia totaling 1.95 megawatts of critical load, which, combined with the lease mentioned above, fully re-leases the space being vacated at the end of 2009. 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 73% leased, respectively. ACC5 Phase II, a new development yet to be completed, is 38% pre-leased. Liquidity The Company has no debt maturities until the third quarter of 2011 assuming the election of the extension options on the Company's line of credit and the loans secured by ACC5 and SC1. As of the date of this press release, the Company has approximately $24 million of unrestricted cash and $20 million available on its revolving credit facility. Development Update The Company has obtained the certificate of occupancy and commissioning report for ACC5 Phase I. The building was designed and constructed to obtain LEED gold certification. As of the date of this press release, the Company is actively pursuing additional funds for both the ACC5 Phase II in Ashburn, Virginia and NJ1 Phase I in Piscataway, New Jersey developments. The commencement of one or both is subject to obtaining adequate financing. Dividend The Company has increased its 2009 REIT dividend requirement estimate by $0.04, and the payment range is now $0.24 to $0.30 per share. The Company has available funds sufficient to pay the dividend in cash, and the Board of Directors will determine the method and timing of the dividend prior to the end of the fourth quarter. 2009 Guidance The Company has established a FFO guidance range of $0.26 to $0.29 per share for the fourth quarter of 2009 and is reaffirming and tightening its annual FFO guidance range by $0.04 per share from $1.05 to $1.12 per share to $1.09 to $1.12 per share. The assumptions underlying this guidance are outlined on page 15 of this press release. Third Quarter 2009 Conference Call and Webcast Information The Company will host a conference call to discuss these results tomorrow, Wednesday, November 4, 2009 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 1-888-726-2419 (domestic) or 1-913-312-0397 (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 3352492. The webcast will be archived on the Company's website for one year at www.dft.com on the Presentations & Webcasts page. Fourth Quarter 2009 Conference Call DuPont Fabros Technology, Inc. expects to announce fourth quarter 2009 results on Wednesday, February 10, 2010 and to host a conference call to discuss those results at 10:00 a.m. ET on Thursday, February 11, 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 the Company may be unable to obtain financing on favorable terms or pre-leasing on its development properties sufficient to enable it to resume construction, the risk that the Company is unable to satisfy the conditions required to exercise the extension options for its line of credit and loans, 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 may be unable to acquire additional properties on favorable terms or at all, 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, 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
(unaudited and in thousands except share and per share data)
Three months ended Nine months ended
September 30, September 30,
------------------ -----------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Base rent $29,491 $26,080 $83,893 $77,821
Recoveries from tenants 17,954 15,907 51,060 41,843
Other revenues 4,475 931 12,653 6,470
----- --- ------ -----
Total revenues 51,920 42,918 147,606 126,134
Expenses:
Property operating costs 16,505 14,141 46,499 35,898
Real estate taxes
and insurance 1,234 1,015 3,634 2,895
Depreciation and
amortization 14,240 13,038 41,551 37,116
General and
administrative 3,580 2,587 10,142 7,893
Other expenses 3,548 795 10,175 5,334
----- --- ------ -----
Total expenses 39,107 31,576 112,001 89,136
------ ------ ------- ------
Operating income 12,813 11,342 35,605 36,998
Interest income 66 66 350 147
Interest:
Expense incurred (6,088) (3,062) (17,101) (6,525)
Amortization of
deferred financing
costs (1,267) (465) (4,533) (1,056)
------ ---- ------ ------
Net income 5,524 7,881 14,321 29,564
Net income attributable
to redeemable
noncontrolling
interests
- operating
partnership (2,137) (3,732) (5,753) (13,935)
------ ------ ------ -------
Net income attributable
to controlling interests $3,387 $4,149 $8,568 $15,629
====== ====== ====== =======
Earnings per
share - basic:
Net income
attributable
to controlling
interests per
common share $0.08 $0.12 $0.22 $0.44
===== ===== ===== =====
Weighted average
common shares
outstanding 41,041,140 35,436,020 39,407,194 35,423,999
========== ========== ========== ==========
Earnings per
share - diluted:
Net income
attributable
to controlling
interests per
common share $0.08 $0.12 $0.22 $0.44
===== ===== ===== =====
Weighted average
common shares
outstanding 41,992,512 35,455,303 39,918,440 35,424,032
========== ========== ========== ==========
Dividends declared
per common share $- $0.1875 $- $0.5625
== ======= == =======
DUPONT FABROS TECHNOLOGY, INC.
RECONCILIATIONS OF NET INCOME TO FFO AND AFFO (1)
(unaudited and in thousands except per share data)
Three months ended Nine months ended
September 30, September 30,
------------------ ----------------
2009 2008 2009 2008
---- ---- ---- ----
Net income $5,524 $7,881 $14,321 $29,564
Depreciation and amortization 14,240 13,038 41,551 37,116
Less: Non real estate
depreciation and
amortization (124) (40) (355) (174)
---- --- ---- ----
FFO $19,640 $20,879 $55,517 $66,506
Straight-line revenue (4,159) (6,710) (11,504) (22,118)
Amortization of
lease contracts
above and below
market value (1,744) (1,747) (5,233) (5,234)
Loss on early
extinguishment of debt - - 1,047 -
Compensation paid with Company
common shares 612 170 1,431 874
--- --- ----- ---
AFFO $14,349 $12,592 $41,258 $40,028
======= ======= ======= =======
FFO per share - diluted $0.29 $0.31 $0.83 $1.00
===== ===== ===== =====
AFFO per share - diluted $0.21 $0.19 $0.61 $0.60
===== ===== ===== =====
Weighted average common
shares and OP units
outstanding - diluted 67,631,035 66,617,574 67,154,717 66,586,303
========== ========== ========== ==========
(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. 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)
September 30, December 31,
2009 2008
---- ----
ASSETS (unaudited)
Income producing property:
Land $44,001 $39,617
Buildings and improvements 1,437,415 1,277,230
--------- ---------
1,481,416 1,316,847
Less: accumulated depreciation (101,419) (63,669)
-------- -------
Net income producing property 1,379,997 1,253,178
Construction in progress and
land held for development 325,282 447,881
------- -------
Net real estate 1,705,279 1,701,059
Cash and cash equivalents 21,247 53,512
Restricted cash 4,478 134
Rents and other receivables 1,443 1,078
Deferred rent 50,556 39,052
Lease contracts above market value, net 17,065 19,213
Deferred costs, net 40,805 42,917
Prepaid expenses and other assets 6,545 7,798
----- -----
Total assets $1,847,418 $1,864,763
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Line of credit $223,996 $233,424
Mortgage notes payable 479,000 433,395
Accounts payable and
accrued liabilities 19,198 13,257
Construction costs payable 11,376 82,241
Lease contracts below
market value, net 31,053 38,434
Prepaid rents and other liabilities 26,194 27,075
------ ------
Total liabilities 790,817 827,826
Redeemable noncontrolling
interests - operating partnership 399,501 484,768
Commitments and contingencies - -
Stockholders' equity:
Preferred stock, par
value $.001, 50,000,000
shares authorized, no shares
issued or outstanding at
September 30, 2009
and December 31, 2008 - -
Common stock, par value
$.001, 250,000,000
shares authorized,
41,868,441 shares issued
and outstanding
at September 30, 2009 and
35,495,257 shares issued
and outstanding
at December 31, 2008 42 35
Additional paid in capital 737,432 641,819
Accumulated deficit (71,656) (80,224)
Accumulated other comprehensive loss (8,718) (9,461)
------ ------
Total stockholders' equity 657,100 552,169
------- -------
Total liabilities and stockholders' equity $1,847,418 $1,864,763
========== ==========
DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
Nine months ended
September 30,
-----------------
2009 2008
---- ----
Cash flow from operating activities
Net income $14,321 $29,564
Adjustments to reconcile net
income to net cash provided
by operating activities
Depreciation and amortization 41,551 37,116
Straight line rent (11,504) (22,118)
Amortization of deferred financing costs 4,533 1,056
Amortization of lease contracts
above and below market value (5,233) (5,234)
Compensation paid with Company
common shares 1,431 874
Changes in operating assets and liabilities
Restricted cash (344) -
Rents and other receivables (365) (160)
Deferred costs (2,663) (238)
Prepaid expenses and other assets 1,942 (4,159)
Accounts payable and
accrued liabilities 5,941 3,600
Prepaid rents and other liabilities 2,852 11,296
----- ------
Net cash provided by operating activities 52,462 51,597
------ ------
Cash flow from investing activities
Investments in real estate - development (104,747) (216,063)
Interest capitalized for real estate under development (4,940) (9,871)
Improvements to real estate (2,373) (2,663)
Additions to non-real estate property (315) (466)
---- ----
Net cash used in investing activities (112,375) (229,063)
-------- --------
Cash flow from financing activities
Line of credit:
Proceeds - 204,000
Repayments (9,428) -
Mortgage notes payable:
Proceeds 181,726 32,537
Lump sum payoffs (135,121) -
Repayments (1,000) -
Escrowed proceeds (4,000) -
Offering costs - (87)
Payments of financing costs (4,529) (421)
Dividends and distributions:
Common shares - (18,618)
Noncontrolling interests - operating partnership - (16,539)
--- -------
Net cash provided by financing activities 27,648 200,872
------ -------
Net (decrease) increase in cash and cash equivalents (32,265) 23,406
Cash and cash equivalents, beginning 53,512 11,510
------ ------
Cash and cash equivalents, ending $21,247 $34,916
======= =======
Supplemental information:
Cash paid for interest, net
of amounts capitalized $17,470 $6,097
======= ======
Deferred financing costs
capitalized for real estate under development $1,270 $1,763
====== ======
Construction costs payable
capitalized to real estate $11,376 $39,827
======= =======
DUPONT FABROS TECHNOLOGY, INC.
Operating Properties
As of September 30, 2009
Year Gross Raised Critical
Property Built/ Building Square Load %
Property Location Renovated Area Feet MW Leased
(2) (3) (4) (5)
Stabilized (1)
--------------
VA3 Reston, VA 2003 256,000 144,901 13.0 100 %
VA4 Bristow, VA 2005 230,000 90,000 9.6 100 %
ACC2 Ashburn, VA 2001/2005 87,000 53,397 10.4 100 %
ACC3 Ashburn, VA 2001/2006 147,000 79,600 13.0 100 %
ACC4 Ashburn, VA 2007 307,000 172,025 36.4 100 %
------- ------- ---- -----
Subtotal - stabilized 1,027,000 539,923 82.4 100 %
Completed not Stabilized
------------------------
CH1 Phase I Elk Grove
Village, IL 2008 285,000 121,223 18.2 48 %
ACC5 Phase I Ashburn, VA 2009 150,000 85,600 18.2 73 %
------- ------ ----
Total Operating Properties 1,462,000 746,746 118.8
========= ======= =====
---------
1. Stabilized operating properties are either 85% or more leased or are 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 $133.2 million of annualized
base rent on a straight-line basis for leases executed and/or amended as
of September 30, 2009 over the non-cancellable terms of the respective
leases and excludes approximately $7.0 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 September 30, 2009 is $106.1 million
assuming no additional leasing or changes to existing leases.
DUPONT FABROS TECHNOLOGY, INC.
Lease Expirations
As of September 30, 2009
The following table sets forth a summary schedule of lease expirations of our operating properties for each of the ten calendar years beginning with 2009. The information set forth in the table assumes that tenants exercise no renewal options and considers early tenant termination options.
Number Raised % of Net Total kW
Year of of Square Raised of % of
Lease Leases Feet Square Expiring % of Annualized
Expiration Expiring Expiring Feet Leases Leased kW Base Rent
(1) (2) (3)
---------- ------- --------- ------- -------- --------- ----------
2009(4) 1 27,268 4.1% 2,600 2.5% 0.9%
2010 1 66,661 10.0% 5,688 5.5% 3.1%
2011 2 19,620 3.0% 2,438 2.3% 2.1%
2012 1 15,000 2.3% 1,600 1.5% 1.9%
2013 3 44,743 6.7% 4,630 4.4% 3.3%
2014 6 46,509 7.0% 6,963 6.7% 7.1%
2015 2 68,397 10.3% 12,000 11.5% 10.4%
2016 2 54,800 8.3% 8,100 7.8% 9.1%
2017 5 70,800 10.7% 12,324 11.8% 13.2%
2018 4 75,300 11.4% 15,113 14.5% 16.0%
After
2018 11 173,909 26.2% 32,875 31.5% 32.9%
------- --------- ------- -------- --------- ----------
Total 38 663,007 100% 104,331 100% 100%
======= ========= ======= ======== ========= ==========
-------
1. The operating properties have 21 tenants with 38 different lease
expiration dates. Top two tenants represent 51% of annualized base rent.
Top three tenants represent 66% of annualized base rent.
2. Raised square footage is that portion of gross building area where our
tenants locate their computer servers. We consider raised square footage
to be the net rentable square footage in each of our facilities.
3. One megawatt is equal to 1,000 kW.
4. The Company has executed two new leases to fully re-lease the space
covered by this expiring lease.
DUPONT FABROS TECHNOLOGY, INC.
Development Projects
As of September 30, 2009
($ in thousands)
Construction
in
Progress
& Land
Esti- Held Percen-
Property Property Gross Raised Critical mated for tage
Location Building Square Load Total Develop- Pre-
Area Feet MW Cost ment Leased
(1) (2) (3) (4) (5)
------ ------ ----- ------ ------ ------
Development Projects
on hold
--------------------
ACC5 $140,000-
Phase II Ashburn, VA 150,000 85,600 18.2 $150,000 $59,085 38%
NJ1 $200,000-
Phase I(6) Piscataway, NJ 150,000 85,600 18.2 $215,000 131,578
SC1 $240,000-
Phase I(6) Santa Clara, CA 150,000 85,600 18.2 $280,000 53,394
------- ------- ---- -------- ------
$580,000-
450,000 256,800 54.6 $645,000 244,057
------- ------- ---- -------- -------
Future Development
Projects
-------------------
CH1
Phase II Elk Grove
Village, IL 200,000 89,917 18.2 *
NJ1 Piscataway,
Phase II NJ 150,000 85,600 18.2 *
SC1 Santa Clara,
Phase II CA 150,000 85,600 18.2 *
SC2
Phase I/II Santa Clara, CA 300,000 171,200 36.4 *
ACC6
Phase I/II Ashburn, VA 240,000 155,000 31.2 *
ACC7 Ashburn, VA 100,000 50,000 10.4 *
------- ------- ----
1,140,000 637,317 132.6 81,225
--------- ------- ----- ------
Total 1,590,000 894,117 187.2 $325,282
========= ======= ===== ========
-------------
* Development costs have not yet been estimated.
1. Gross building area is the entire building area, including raised square
footage (the portion of gross building area where our tenants' computer
servers are located), tenant common areas, areas controlled by us (such
as the mechanical, telecommunications and utility rooms) and, in some
facilities, individual office and storage space leased on an as available
basis to our tenants.
2. Raised square footage is that portion of gross building area where our
tenants locate their computer servers. We consider raised square footage
to be the net rentable square footage in each of our facilities.
3. Critical load (also referred to as IT load or load used by tenants'
servers or related equipment) is the power available for exclusive use by
our tenants expressed in terms of MW or kW (1 MW is equal to 1,000 kW).
4. Includes estimated capitalization for construction and development,
including closing costs, capitalized interest and capitalized operating
carrying costs, as applicable, upon completion.
5. Amount capitalized as of September 30, 2009.
6. Construction temporarily suspended on NJ1 and SC1 and amount incurred
includes all estimated commitments.
DUPONT FABROS TECHNOLOGY, INC.
Debt Summary as of September 30, 2009
($ in thousands)
Amounts % of Total Rates(1) Maturities
(years)
-------- ---------- -------- ---------
Secured $702,996 100.0 % 4.2 % 1.5
Unsecured - - - -
-------- ------- ----- ---
Total $702,996 100.0 % 4.2 % 1.5
======== ======= ===== ===
Fixed Rate Debt:
Safari Term Loan
(2)(3) $200,000 28.4 % 6.5 % 1.9
ACC5 Loan 25,000 3.6 % 12.0 % 0.4
SC1 Loan 5,000 0.7 % 12.0 % 0.4
-------- ------- ------ ---
Fixed Rate Debt 230,000 32.7 % 7.2 % 1.7
-------- ------ ------ ---
Floating Rate Debt:
Line of Credit (2) 223,996 31.9 % 1.5 % 0.9
ACC4 Term Loan 249,000 35.4 % 3.8 % 2.1
------- ------- ------ ---
Floating Rate Debt 472,996 67.3 % 2.7 % 1.5
------- ------- ------ ---
Total $702,996 100.0 % 4.2 % 1.5
======== ======= ====== ===
Note: The Company capitalized interest of $1.8 million and $6.2 million during the three and nine months ended September 30, 2009, respectively.
1. Rate as of September 30, 2009.
2. Collateral includes VA3, VA4, ACC2 and ACC3.
3. Rate is fixed by an interest rate swap.
Debt Maturity Schedule as of September 30, 2009
($ in thousands)
Year Fixed Floating
Rate Rate Total % of Total Rates (5)
---- ---------- -------- ------ ---------- ---------
2009 $- $- $- - -
2010 30,000(1) 223,996(3) 253,996 36.1 % 2.7 %
2011 200,000(2) 249,000(4) 449,000 63.9 % 5.0 %
------- ------- ------- ------ -----
Total $230,000 $472,996 $702,996 100.0 % 4.2 %
======== ======== ======== ======= =====
---------
1. Extendable up to four years upon satisfaction of certain customary
conditions.
2. Matures on August 7, 2011 with no extension option.
3. Amount outstanding on the Company's $275 million Line of Credit that
matures on August 7, 2010, subject to a one-year extension option
exercisable by the Company upon satisfaction of certain customary
conditions. A borrowing base initial appraised value covenant currently
limits the amount available to $244 million.
4. Matures on October 24, 2011 and includes a one-year extension option
exercisable by the Company upon satisfaction of certain customary
conditions. Includes scheduled principal amortization payments of $0.5
million in the fourth quarter of 2009 and $2.0 million in 2010.
5. Rate as of September 30, 2009.
DUPONT FABROS TECHNOLOGY, INC.
Selected Financial Covenants
9/30/09 6/30/09
------- -------
Total Debt to Gross Asset Value
(not to exceed 65%) 34% 35%
Fixed Charge Coverage ratio
(not less than 1.45) 3.60 3.56
Borrowing Base Debt Service Coverage Ratio
(not less than 1.35) 1.95 1.93
Secured Recourse Debt to Gross Asset Value
(not to exceed 15%) 5% 5%
These selected covenants relate to DuPont Fabros Technology, LP and/or its related subsidiaries. DuPont Fabros Technology, Inc. is the general partner of DuPont Fabros Technology, LP.
Capital Structure as of September 30, 2009
(in thousands except per share data)
Mortgage notes
payable $479,000
Line of Credit 223,996
--------
Total Debt 702,996 43.9%
Common Shares 62% 41,869
Operating Partnership
("OP") Units 38% 25,453
--- ------
Total Shares and OP Units 100% 67,322
Common Share Price at
September 30, 2009 $13.33
------
Total Equity 897,402 56.1%
------- -----
Total Market
Capitalization $1,600,398 100.0%
========== ======
DUPONT FABROS TECHNOLOGY, INC.
Common Share and OP Unit
Weighted Average Amounts Outstanding
YTD YTD
Q3 2009 Q3 2008 Q3 2009 Q3 2008
------- ------- ------- -------
Weighted Average Amounts
Outstanding for EPS Purposes:
Common Shares - basic 41,041,140 35,436,020 39,407,194 35,423,999
Shares issued from
assumed conversion of
- Restricted Shares 365,076 19,283 203,154 33
- Stock options 586,296 - 308,092 -
------- --- ------- ---
Total Common Shares - diluted 41,992,512 35,455,303 39,918,440 35,424,032
========== ========== ========== ==========
Weighted Average Amounts
Outstanding for FFO and
AFFO Purposes:
Common Shares - basic 41,041,140 35,436,020 39,407,194 35,423,999
OP Units - basic 25,638,523 31,162,271 27,236,277 31,162,271
---------- ---------- ---------- ----------
Total Common Shares and OP
Units 66,679,663 66,598,291 66,643,471 66,586,270
Share issued from
assumed conversion of
- Restricted Shares 365,076 19,283 203,154 33
- Stock options 586,296 - 308,092 -
------- --- ------- ---
Total Common Shares and OP
Units - diluted 67,631,035 66,617,574 67,154,717 66,586,303
========== ========== ========== ==========
Period Ending Amounts
Outstanding:
Common Shares 41,868,441
OP Units 25,453,394
----------
Total Common Shares and OP
Units 67,321,835
==========
DUPONT FABROS TECHNOLOGY, INC.
2009 Guidance
The earnings guidance/projections provided below are based on current
expectations and are forward-looking.
Expected Q4 Expected
2009 2009
per share per share
--------- ---------
Earnings per share and
unit - diluted $0.04 to $0.07 $0.25 to $0.27
Depreciation and amortization, net 0.22 0.84 to 0.85
-------------- --------------
FFO per share and unit - diluted (1) $0.26 to $0.29 $1.09 to $1.12
============== ==============
2009 Debt Assumptions
Weighted average debt outstanding $703 to $706 million
Weighted average interest rate 4.2%
Total interest costs $29.5 to $30.0 million
Total amortization of deferred
financing costs $7.4 million
Interest expense capitalized $(4.9) million
Deferred financing costs amortization
capitalized $(1.3) million
--------------
Total interest expense after
capitalization $30.7 to $31.2 million
======================
Note: Debt guidance assumes no new debt issued from the date of this release.
2009 Other Guidance Assumptions
Other revenues $12 to $14 million
Straight-line revenue $17 to $19 million
Below market lease amortization, net of above
market lease amortization $7 million
General and administrative expense $13 to $14 million
Estimated required REIT dividend
distribution payout $0.24 to $0.30 per share
Weighted average common shares and OP units -
diluted 67.6 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. Come And Visit
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