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DuPont Fabros Technology, Inc. Reports First Quarter 2014 Results

Revenues increase 16%; Normalized FFO per share increases 40%

WASHINGTON, April 24, 2014 /PRNewswire/ -- DuPont Fabros Technology, Inc. (NYSE: DFT) is reporting results for the quarter ended March 31, 2014.  All per share results are reported on a fully diluted basis.

DuPont Fabros Technology, Inc.

Highlights

  • As of April 23, 2014, our operating portfolio was stabilized at 97% leased and commenced as measured by computer room square feet ("CRSF") and 95% leased and commenced as measured by critical load (in megawatts, or "MW").
  • Quarterly Highlights:
    • Normalized Funds from Operations ("Normalized FFO") of $0.59 per share representing a 40% increase over the prior year quarter.
    • Adjusted Funds from Operations ("AFFO") per share of $0.62 representing a 63% increase over the prior year quarter.
    • Executed one lease totaling 0.49 MW and 5,581 CRSF.
    • Commenced two leases totaling 0.92 MW and 8,381 CRSF.
  • Subsequent to the First Quarter 2014:
    •  Executed and commenced one lease totaling 2.60 MW and 27,952 CRSF. 

Hossein Fateh, President and Chief Executive Officer, said, "We are pleased to announce that one of our original data center facilities, VA3, is now 95% leased, up from 71% leased at year-end. Strong customer demand throughout our portfolio is supporting expansion of our development pipeline. We expect to deliver Phase IIA of our Santa Clara facility (SC1) in May and are seeing adequate demand to begin Phase IIB with projected delivery in the first quarter of 2013. Our focus on leasing available inventory and pre-leasing development projects will fuel DFT's growth."

First Quarter 2014 Results

For the quarter ended March 31, 2014, earnings were $0.30 per share compared to earnings of $0.12 per share for the first quarter of 2013, an increase of 150%.  Revenues increased 16%, or $14.3 million, to $102.1 million for the first quarter of 2014 over the first quarter of 2013.  The increase in revenues is primarily due to new leases commencing. 

Normalized FFO for the quarter ended March 31, 2014 was $0.59 per share compared to $0.42 per share for the first quarter of 2013.  The increase of $0.17 per share, or 40%, from the prior year quarter is primarily due to the following:

  • Higher operating income excluding depreciation of $0.11 per share, and
  • Lower interest expense of $0.06 per share due to lower interest rates and higher capitalized interest.

Normalized FFO of $0.59 per share for the quarter ended March 31, 2014 exceeded the upper end of our guidance range by $0.01 per share due to lower operating and general and administrative expenses.

Portfolio Update

During the first quarter 2014, we:

  • Executed and commenced one lease at VA3 for 3.1 years totaling 0.49 MW and 5,581 CRSF. 
  • In addition to the VA3 lease noted above, commenced one lease totaling 0.43 MW and 2,800 CRSF at CH1, which was a re-lease of space vacated by a customer on December 31, 2013.  There was no vacancy period between the lease termination and the commencement of the new lease. 

Year to date, we:

  • Signed two leases with a weighted average lease term of 4.9 years totaling 3.09 MW and 33,533 CRSF that are expected to generate approximately $2.8 million of annualized GAAP base rent revenue.
  • Extended the maturity of one lease at VA3 that was scheduled to expire in 2018 by 0.75 years. There was no impact to cash base rent, and GAAP base rent increased 1.2%.
  • Commenced three leases totaling 3.52 MW and 36,333 CRSF. 

Development Update

We are currently developing ACC7 Phase I (11.9 MW) and SC1 Phase IIA (9.1 MW).  Both of these developments are on time and on budget, with completion of ACC7 Phase I expected in June/July of this year and SC1 Phase IIA in May of this year.  SC1 Phase IIA is 50% pre-leased.

As previously announced during the quarter, we have converted to using reclaimed water instead of potable water at our four data centers with evaporative cooling plants on our Ashburn campus - ACC3, ACC4, ACC5 and ACC6. By using reclaimed water, we have significantly reduced our environmental impact by reducing our consumption of potable water and by using effluent water that would otherwise be discharged into the local waterways by the water authority. ACC7 Phase I will also use reclaimed water when it opens.

Second Quarter and Full Year 2014 Guidance

Our Normalized FFO guidance range is $0.59 to $0.60 per share for the second quarter of 2014.

Our 2014 FFO guidance range was increased to $2.32 to $2.40 per share as compared to prior guidance of $2.28 to $2.38 per share. The lower end of this range assumes no additional leases will be executed through the end of this calendar year. The assumptions underlying this guidance can be found on page 15 of this earnings release.

The $0.03 per share increase in the midpoint of guidance is primarily due to:

  • Lower interest expense of $0.02 per share which is primarily due to higher capitalized interest from the anticipated start of our SC1 Phase IIB development in the second quarter of 2014, and
  • Higher operating income excluding depreciation of $0.01 per share primarily from leases executed year to date.

Balance Sheet and Liquidity

We have a common stock repurchase program that allows for purchases up to $122.2 million that expires on December 31, 2014.  In the first quarter of 2014, we did not repurchase any shares, and $122.2 million is still available for purchase.

As of March 31, 2014, we had $72 million of cash and $400 million of available capacity under our revolving credit facility.

Dividend

Our first quarter 2014 dividend of $0.35 per share was paid on April 15, 2014.  This quarterly rate represents a 40% increase from the fourth quarter 2013 dividend rate of $0.25 per share.  The anticipated 2014 annualized dividend of $1.40 per share represents an estimated Normalized FFO payout ratio of 59% at the midpoint of our current 2014 guidance.  For 2013, the Normalized FFO payout ratio was 48% and the AFFO payout ratio was 51%.

First Quarter 2014 Conference Call and Webcast Information

We will host a conference call to discuss these results today, Thursday, April 24, 2014 at 1:00 p.m. ET. To access the live call, please visit the Investor Relations section of our website at www.dft.com or dial 1-877-870-4263 (domestic) or 1-412-317-0790 (international).  A replay will be available for seven days by dialing 1-877-344-7529 (domestic) or 1-412-317-0088 (international) using passcode 10043500.  The webcast will be archived on our website for one year at www.dft.com on the Presentations & Webcasts page.

About DuPont Fabros Technology, Inc.

DuPont Fabros Technology, Inc. (NYSE: DFT) is a leading owner, developer, operator and manager of enterprise-class, carrier neutral, multi-tenant wholesale data centers.  The Company's facilities are designed to offer highly specialized, efficient and safe computing environments in a low-cost operating model.  The Company's customers outsource their mission critical applications and include national and international enterprises across numerous industries, such as technology, Internet content providers, media, communications, cloud-based, healthcare and financial services.  The Company's ten data centers are located in four major U.S. markets, which total 2.5 million gross square feet and 218 megawatts of available critical load to power the servers and computing equipment of its customers.  DuPont Fabros Technology, Inc., a real estate investment trust (REIT), is headquartered in Washington, DC.  For more information, please visit www.dft.com.

Logo - http://photos.prnewswire.com/prnh/20120104/MM29780LOGO

Forward-Looking Statements

Certain statements contained in this press release may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  The matters described in these forward-looking statements include expectations regarding future events, results and trends and are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control. We face many risks that could cause our actual performance to differ materially from the results contemplated by our forward-looking statements, including, without limitation, the risk that the assumptions underlying our full year and second quarter 2014 guidance are not realized, the risks related to the leasing of available space to third-party customers, including delays in executing new leases and failure to negotiate leases on terms that will enable us to achieve our expected returns, risks related to the collection of accounts and notes receivable, the risk that we may be unable to obtain new financing on favorable terms to facilitate, among other things, future development projects, the risks commonly associated with construction and development of new facilities (including delays and/or cost increases associated with the completion of new developments), risks relating to obtaining required permits and compliance with permitting, zoning, land-use and environmental requirements, the risk that we will not declare and pay dividends as anticipated for 2014 and the risk that we may not be able to maintain our qualification as a REIT for federal tax purposes.  The periodic reports that we file with the Securities and Exchange Commission, including the annual report on Form 10-K for the year ended December 31, 2013 contain detailed descriptions of these and many other risks to which we are subject.  These reports are available on our website at www.dft.com.  Because of the risks described above and other unknown risks, our actual results, performance or achievements may differ materially from the results, performance or achievements contemplated by our forward-looking statements.  The information set forth in this news release represents our expectations and intentions only as of the date of this press release.  We assume no responsibility to issue updates to the contents of this press release.

 

 

DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands except share and per share data)



Three months ended March 31,


2014



2013








Revenues:






Base rent

$

69,204



$

64,132


Recoveries from tenants

31,689



22,690


Other revenues

1,194



937


Total revenues

102,087



87,759


Expenses:






Property operating costs

30,095



23,512


Real estate taxes and insurance

3,467



3,641


Depreciation and amortization

23,269



23,039


General and administrative

4,240



4,550


Other expenses

873



772


Total expenses

61,944



55,514


Operating income

40,143



32,245


Interest income

68



37


Interest:






Expense incurred

(7,824)



(12,937)


Amortization of deferred financing costs

(743)



(918)


Loss on early extinguishment of debt



(1,700)


Net income

31,644



16,727


Net income attributable to redeemable noncontrolling interests – operating partnership

(4,788)



(1,973)


Net income attributable to controlling interests

26,856



14,754


Preferred stock dividends

(6,811)



(6,811)


Net income attributable to common shares

$

20,045



$

7,943


Earnings per share – basic:






Net income attributable to common shares

$

0.30



$

0.12


Weighted average common shares outstanding

65,348,269



65,089,972


Earnings per share – diluted:






Net income attributable to common shares

$

0.30



$

0.12


Weighted average common shares outstanding

65,823,921



65,928,717


Dividends declared per common share

$

0.35



$

0.20


 

 

DUPONT FABROS TECHNOLOGY, INC.
RECONCILIATIONS OF NET INCOME TO FFO, NORMALIZED FFO AND AFFO (1)
(unaudited and in thousands except share and per share data)



Three months ended

March 31,


2014



2013


Net income

$

31,644



$

16,727


Depreciation and amortization

23,269



23,039


Less: Non real estate depreciation and amortization

(172)



(242)


FFO

54,741



39,524


Preferred stock dividends

(6,811)



(6,811)


FFO attributable to common shares and OP units

$

47,930



$

32,713


Loss on early extinguishment of debt



1,700


Normalized FFO

47,930



34,413


Straight-line revenues, net of reserve

711



(4,607)


Amortization of lease contracts above and below market value

(599)



(598)


Compensation paid with Company common shares

1,593



1,903


Non real estate depreciation and amortization

172



242


Amortization of deferred financing costs

743



918


Improvements to real estate

(425)



(809)


Capitalized leasing commissions

(27)



(112)


AFFO

$

50,098



$

31,350


FFO attributable to common shares and OP units per share - diluted

$

0.59



$

0.40


Normalized FFO per share - diluted

$

0.59



$

0.42


AFFO per share - diluted

$

0.62



$

0.38


Weighted average common shares and OP units outstanding - diluted

81,431,858



82,096,356



(1)  Funds from operations, or FFO, is used by industry analysts and investors as a supplemental operating performance measure for REITs. We calculate FFO in accordance with the definition that was adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. FFO, as defined by NAREIT, represents net income determined in accordance with GAAP, excluding extraordinary items as defined under GAAP, impairment charges on depreciable real estate assets and gains or losses from sales of previously depreciated operating real estate assets, plus specified non-cash items, such as real estate asset depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. We also present FFO attributable to common shares and OP units, which is FFO excluding preferred stock dividends. FFO attributable to common shares and OP units per share is calculated on a basis consistent with net income attributable to common shares and OP units and reflects adjustments to net income for preferred stock dividends.


We use FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, it provides a performance measure that, when compared period over period, captures trends in occupancy rates, rental rates and operating expenses. We also believe that, as a widely recognized measure of the performance of equity REITs, FFO may be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO excludes real estate related depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited.


While FFO is a relevant and widely used measure of operating performance of equity REITs, other equity REITs may use different methodologies for calculating FFO and, accordingly, FFO as disclosed by such other REITs may not be comparable to our FFO. Therefore, we believe that in order to facilitate a clear understanding of our historical operating results, FFO should be examined in conjunction with net income as presented in the consolidated statements of operations. FFO should not be considered as an alternative to net income or to cash flow from operating activities (each as computed in accordance with GAAP) or as an indicator of our liquidity, nor is it indicative of funds available to meet our cash needs, including our ability to pay dividends or make distributions.


We present FFO with adjustments to arrive at Normalized FFO.  Normalized FFO is FFO attributable to common shares and units excluding gain or loss on early extinguishment of debt and gain or loss on derivative instruments.   We also present FFO with supplemental adjustments to arrive at Adjusted FFO ("AFFO"). AFFO is Normalized FFO excluding straight-line revenue, compensation paid with Company common shares, below market lease amortization net of above market lease amortization, non real estate depreciation and amortization, amortization of deferred financing costs, improvements to real estate and capitalized leasing commissions.  AFFO does not represent cash generated from operating activities in accordance with GAAP and therefore should not be considered an alternative to net income as an indicator of our operating performance or as an alternative to cash flow provided by operations as a measure of liquidity and is not necessarily indicative of funds available to fund our cash needs including our ability to pay dividends. In addition, AFFO may not be comparable to similarly titled measurements employed by other companies. We use AFFO in management reports to provide a measure of REIT operating performance that can be compared to other companies using AFFO.

 

 

DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands except share data)



March 31,
 2014


December 31,
 2013


(unaudited)




ASSETS






Income producing property:






Land

$

75,956



$

75,956


Buildings and improvements

2,423,357



2,420,986



2,499,313



2,496,942


Less: accumulated depreciation

(435,384)



(413,394)


Net income producing property

2,063,929



2,083,548


Construction in progress and land held for development

365,613



302,068


Net real estate

2,429,542



2,385,616


Cash and cash equivalents

71,786



38,733


Rents and other receivables, net

13,653



12,674


Deferred rent, net

149,327



150,038


Lease contracts above market value, net

8,879



9,154


Deferred costs, net

38,107



39,866


Prepaid expenses and other assets

48,448



44,507


Total assets

$

2,759,742



$

2,680,588


LIABILITIES AND STOCKHOLDERS' EQUITY






Liabilities:






Line of credit

$



$


Mortgage notes payable

115,000



115,000


Unsecured term loan

250,000



154,000


Unsecured notes payable

600,000



600,000


Accounts payable and accrued liabilities

22,446



23,566


Construction costs payable

25,489



45,444


Accrued interest payable

1,971



9,983


Dividend and distribution payable

34,238



25,971


Lease contracts below market value, net

9,656



10,530


Prepaid rents and other liabilities

61,040



56,576


Total liabilities

1,119,840



1,041,070


Redeemable noncontrolling interests – operating partnership

375,144



387,244


Commitments and contingencies




Stockholders' equity:






Preferred stock, $.001 par value, 50,000,000 shares authorized:






Series A cumulative redeemable perpetual preferred stock, 7,400,000 issued and
outstanding at March 31, 2014 and December 31, 2013

185,000



185,000


Series B cumulative redeemable perpetual preferred stock, 6,650,000 issued and
outstanding at March 31, 2014 and December 31, 2013

166,250



166,250


Common stock, $.001 par value, 250,000,000 shares authorized, 65,804,748 shares issued
and outstanding at March 31, 2014 and 65,205,274 shares issued and outstanding at
December 31, 2013

66



65


Additional paid in capital

913,442



900,959


Retained earnings




Total stockholders' equity

1,264,758



1,252,274


Total liabilities and stockholders' equity

$

2,759,742



$

2,680,588


 

 

DUPONT FABROS TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)



Three months ended March 31,


2014



2013


Cash flow from operating activities






Net income

$

31,644



$

16,727


Adjustments to reconcile net income to net cash provided by operating activities






Depreciation and amortization

23,269



23,039


Loss on early extinguishment of debt



1,700


Straight line revenues, net of reserve

711



(4,607)


Amortization of deferred financing costs

743



918


Amortization of lease contracts above and below market value

(599)



(598)


Compensation paid with Company common shares

1,593



1,903


Changes in operating assets and liabilities






Rents and other receivables

(979)



(6,360)


Deferred costs

(52)



(119)


Prepaid expenses and other assets

(5,933)



(7,173)


Accounts payable and accrued liabilities

(1,191)



6,299


Accrued interest payable

(8,012)



11,446


Prepaid rents and other liabilities

3,297



4,637


Net cash provided by operating activities

44,491



47,812


Cash flow from investing activities






Investments in real estate – development

(80,159)



(7,340)


Interest capitalized for real estate under development

(2,965)



(210)


Improvements to real estate

(425)



(809)


Additions to non-real estate property

(220)



(18)


Net cash used in investing activities

(83,769)



(8,377)


Cash flow from financing activities






Line of credit:






Proceeds



62,000


Repayments



(20,000)


Mortgage notes payable:






Proceeds



115,000


Lump sum payoffs



(138,300)


Repayments



(1,300)


Unsecured term loan:






Proceeds

96,000




Payments of financing costs

(96)



(1,715)


Exercises of stock options

3,457




Common stock repurchases



(37,792)


Dividends and distributions:






Common shares

(16,301)



(12,668)


Preferred shares

(6,811)



(6,811)


Redeemable noncontrolling interests – operating partnership

(3,918)



(3,757)


Net cash provided by (used in) financing activities

72,331



(45,343)


Net increase (decrease) in cash and cash equivalents

33,053



(5,908)


Cash and cash equivalents, beginning

38,733



23,578


Cash and cash equivalents, ending

$

71,786



$

17,670


Supplemental information:






Cash paid for interest

$

18,802



$

1,700


Deferred financing costs capitalized for real estate under development

$

170



$

15


Construction costs payable capitalized for real estate under development

$

25,489



$

2,609


Redemption of operating partnership units

$

2,100



$

68,900


Adjustments to redeemable noncontrolling interests - operating partnership

$

(9,334)



$

3,011








 

 

DUPONT FABROS TECHNOLOGY, INC.


Operating Properties
As of April 1, 2014


Property


Property Location


Year Built/
Renovated


Gross
Building
Area (2)


Computer
Room
Square Feet
("CRSF") (2)


CRSF %
Leased (3)


CRSF %
Commenced
(4)


Critical
Load
MW (5)


Critical
Load %
Leased (3)


Critical
Load %
Commenced
(4)

Stabilized (1)
























ACC2


Ashburn, VA


2001/2005


87,000



53,000



100

%


100

%


10.4



100

%


100

%

ACC3


Ashburn, VA


2001/2006


147,000



80,000



100

%


100

%


13.9



100

%


100

%

ACC4


Ashburn, VA


2007


347,000



172,000



100

%


100

%


36.4



100

%


100

%

ACC5


Ashburn, VA


2009-2010


360,000



176,000



98

%


98

%


36.4



98

%


98

%

ACC6


Ashburn, VA


2011-2013


262,000



130,000



100

%


100

%


26.0



100

%


100

%

CH1


Elk Grove Village, IL


2008-2012


485,000



231,000



100

%


100

%


36.4



100

%


100

%

NJ1 Phase I


Piscataway, NJ


2010


180,000



88,000



64

%


64

%


18.2



52

%


52

%

SC1 Phase I


Santa Clara, CA


2011


180,000



88,000



100

%


100

%


18.2



100

%


100

%

VA3 (6)


Reston, VA


2003


256,000



147,000



74

%


74

%


13.0



75

%


75

%

VA4


Bristow, VA


2005


230,000



90,000



100

%


100

%


9.6



100

%


100

%

Total Operating Properties




2,534,000



1,255,000



94

%


94

%


218.5



94

%


94

%



(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, 2014 represent $275 million of base rent on a GAAP basis and $288 million of base rent on a cash basis over the next twelve months. Both amounts include $17 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 generally accepted accounting principles.

(5)

Critical load (also referred to as IT load or load used by customers' servers or related equipment) is the power available for exclusive use by customers expressed in terms of megawatt, or MW, or kilowatt, or kW (1 MW is equal to 1,000 kW).

(6)

As of April 23, 2014, VA3 is 95% leased on a critical load basis and 94% leased on a CRSF basis.

 

 

DUPONT FABROS TECHNOLOGY, INC.


Lease Expirations
As of April 1, 2014


The following table sets forth a summary schedule of lease expirations at our operating properties for each of the ten calendar years beginning with 2014. The information set forth in the table below assumes that customers exercise no renewal options and takes into account customers' early termination options in determining the life of their leases under GAAP.


Year of Lease Expiration


Number
of Leases
Expiring (1)


CRSF of
Expiring
Commenced
Leases
(in thousands) (2)


% of
Leased CRSF


Total kW
of Expiring
Commenced
Leases (2)


% of
Leased kW


% of
Annualized
Base Rent (3)

2014


2



8



0.7

%


1,705



0.8

%


1.1

%

2015


4



70



5.9

%


13,812



6.7

%


6.6

%

2016


4



32



2.7

%


4,686



2.3

%


2.4

%

2017


14



102



8.6

%


18,106



8.9

%


8.9

%

2018


19



215



18.2

%


39,298



19.1

%


18.4

%

2019


13



171



14.5

%


31,337



15.2

%


14.8

%

2020


10



106



9.0

%


16,496



8.0

%


8.7

%

2021


9



159



13.5

%


27,682



13.4

%


13.8

%

2022


6



75



6.3

%


12,812



6.2

%


7.1

%

2023


4



48



4.1

%


6,475



3.1

%


2.8

%

After 2023


12



196



16.5

%


33,425



16.3

%


15.4

%

Total


97



1,182



100

%


205,834



100

%


100

%



(1)

Represents 34 customers with 97 lease expiration dates. Top four customers represent 62% of annualized base rent.

(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, 2014.

 

 

DUPONT FABROS TECHNOLOGY, INC.


Development Projects
As of March 31, 2014
($ in thousands)


Property


Property
Location


Gross
Building
Area (1)


CRSF (2)


Critical
Load
MW (3)


Estimated
Total Cost (4)


Construction
in Progress &
Land Held for
Development
(5)


CRSF %
Pre-
leased


Critical
Load % Pre-
leased
























Current Development Projects





















SC1 Phase IIA


Santa Clara, CA


90,000



44,000



9.1



$106,000 - $112,000


$

94,018



50

%


50

%

ACC7 Phase I


Ashburn, VA


126,000



70,000



11.9



    90,000 -     95,000


79,214



0

%


0

%





216,000



114,000



21.0



  196,000 -   207,000


173,232































Future Development Projects/Phases





















SC1 Phase IIB


Santa Clara, CA


90,000



44,000



9.1



54,000 - 58,000


54,051








ACC7 Phases II to IV


Ashburn, VA


320,000



176,000



29.7



85,000 - 90,000


72,796








NJ1 Phase II


Piscataway, NJ


180,000



88,000



18.2



39,212


39,212












590,000



308,000



57.0



$178,212 - $187,212


166,059








Land Held for Development





















ACC8


Ashburn, VA


100,000



50,000



10.4





3,986








CH2


Elk Grove
Village, IL


338,000



167,000



25.6





16,782








SC2


Santa Clara, CA


200,000



125,000



26.0





5,554












638,000



342,000



62.0





26,322








Total




1,444,000



764,000



140.0





$

365,613










(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 other than SC1 Phase IIB include land, shell and underground work through Phase I opening only.  SC1 Phase IIB also includes a portion of the electrical and mechanical infrastructure. 

(5)

Amount capitalized as of March 31, 2014. Future development projects/phases other than SC1 Phase IIB include land, shell and underground work through Phase I opening only.  SC1 Phase IIB also includes a portion of the electrical and mechanical infrastructure.

 

 

DUPONT FABROS TECHNOLOGY, INC.


Debt Summary as of March 31, 2014
($ in thousands)



March 31, 2014


Amounts


% of Total


Rates


Maturities

(years)

Secured

$

115,000



12

%


2.0

%


4.0


Unsecured

850,000



88

%


4.7

%


6.7


Total

$

965,000



100

%


4.4

%


6.4














Fixed Rate Debt:












Unsecured Notes due 2021

$

600,000



62

%


5.9

%


7.5


Fixed Rate Debt

600,000



62

%


5.9

%


7.5


Floating Rate Debt:












Unsecured Credit Facility







2.0


Unsecured Term Loan

250,000



26

%


1.9

%


4.9


ACC3 Term Loan

115,000



12

%


2.0

%


4.0


Floating Rate Debt

365,000



38

%


1.9

%


4.6


Total

$

965,000



100

%


4.4

%


6.4




 Note:  

We capitalized interest and deferred financing cost amortization of $3.1 million during the three months ended March 31, 2014.

 

Debt Maturity as of March 31, 2014
($ in thousands)


Year


Fixed Rate



Floating Rate



Total


% of Total


Rates

2014













2015













2016





3,750


(2)


3,750



0.4

%


2.0

%

2017





8,750


(2)


8,750



0.9

%


2.0

%

2018





102,500


(2)


102,500



10.6

%


2.0

%

2019





250,000


(3)


250,000



25.9

%


1.9

%

2020













2021


600,000


(1)





600,000



62.2

%


5.9

%

Total


$

600,000




$

365,000




$

965,000



100

%


4.4

%



(1)

The 5.875% Unsecured Notes are due September 15, 2021.

(2)

The ACC3 Term Loan matures on March 27, 2018 with no extension option. Quarterly principal payments of $1.25 million begin on April 1, 2016, increase to $2.5 million on April 1, 2017 and continue through maturity.

(3)

The Unsecured Term Loan matures on February 15, 2019 with no extension option.

 

 

DUPONT FABROS TECHNOLOGY, INC.


Selected Unsecured Debt Metrics(1)



3/31/14


12/31/13

Interest Coverage Ratio (not less than 2.0)

5.7


5.8





Total Debt to Gross Asset Value (not to exceed 60%)

30.3%


28.2%





Secured Debt to Total Assets (not to exceed 40%)

3.6%


3.7%





Total Unsecured Assets to Unsecured Debt (not less than 150%)

329.5%


364.8%



(1)

These selected metrics relate to DuPont Fabros Technology, LP's outstanding unsecured notes.  DuPont Fabros Technology, Inc. is the general partner of DuPont Fabros Technology, LP.

 

Capital Structure as of March 31, 2014
(in thousands except per share data)


Line of Credit










$





Mortgage Notes Payable










115,000





Unsecured Term Loan










250,000





Unsecured Notes










600,000





Total Debt










965,000



29.5

%

Common Shares

81

%


65,805











Operating Partnership ("OP") Units

19

%


15,585











Total Shares and Units

100

%


81,390











Common Share Price at March 31, 2014




$

24.07











Common Share and OP Unit Capitalization







$

1,959,057








Preferred Stock ($25 per share liquidation preference)







351,250








Total Equity










2,310,307



70.5

%

Total Market Capitalization










$

3,275,307



100.0

%

 

 

DUPONT FABROS TECHNOLOGY, INC.


Common Share and OP Unit
Weighted Average Amounts Outstanding



Q1 2014


Q1 2013

Weighted Average Amounts Outstanding for EPS Purposes:












Common Shares - basic

65,348,269



65,089,972


Shares issued from assumed conversion of:






- Restricted Shares

99,904



99,720


- Stock Options

375,748



739,025


- Performance Units




Total Common Shares - diluted

65,823,921



65,928,717








Weighted Average Amounts Outstanding for FFO,

Normalized FFO and AFFO Purposes:












Common Shares - basic

65,348,269



65,089,972


OP Units - basic

15,607,937



16,167,639


Total Common Shares and OP Units

80,956,206



81,257,611


Shares and OP Units issued from assumed conversion of:






- Restricted Shares

99,904



99,720


- Stock Options

375,748



739,025


- Performance Units




Total Common Shares and Units - diluted

81,431,858



82,096,356








Period Ending Amounts Outstanding:






Common Shares

65,804,748





OP Units

15,585,537





Total Common Shares and Units

81,390,285





 

 

DUPONT FABROS TECHNOLOGY, INC.


2014 Guidance


The earnings guidance/projections provided below are based on current expectations and are forward-looking.



Expected Q2 2014

per share


Expected 2014

per share

Net income per common share and unit - diluted

   $0.30 to $0.31


  $1.13 to $1.21

Depreciation and amortization, net

0.29


1.19





FFO per share - diluted (1)

   $0.59 to $0.60


  $2.32 to $2.40

Loss on early extinguishment of debt


Normalized FFO per share - diluted (1)

   $0.59 to $0.60


  $2.32 to $2.40

 

2014 Debt Assumptions



Weighted average debt outstanding

        $987.0 million

Weighted average interest rate (one month LIBOR average 0.17%)

4.47%



Total interest costs

         $44.1 million

Amortization of deferred financing costs

            3.7 million

      Interest expense capitalized

            (9.6) million

      Deferred financing costs amortization capitalized

            (0.6) million

Total interest expense after capitalization

         $37.6 million





2014 Other Guidance Assumptions



Total revenues

         $405 to $415 million

Base rent (included in total revenues)

          $282 to $288 million

Straight-line revenues (included in base rent) (2)

         $(4) to $(8) million

General and administrative expense

         $17 to $18 million

Investments in real estate - development (3)

         $270 to $300 million

Improvements to real estate excluding development

         $4 million

Preferred stock dividends

        $27 million

Annualized common stock dividend

           $1.40 per share

Weighted average common shares and OP units - diluted

           81 million

Common share repurchase

 No amounts budgeted

Acquisitions of income producing properties

 No amounts budgeted



(1)

For information regarding FFO and Normalized FFO, see "Reconciliations of Net Income to FFO, Normalized FFO and AFFO" on page 6 of this earnings release.

(2)

Straight-line revenues are projected to reduce total revenues in 2014 as cash rents are projected to be higher than GAAP rents.

(3)

Represents cash spend expected in 2014 for the ACC7, SC1 Phase IIA, SC1 Phase IIB and CH2 developments.  The SC1 Phase IIB development is forecasted to begin in the second quarter of 2014 with an in service date in the first quarter of 2015.  The CH2 development is forecasted to begin in the second quarter of 2014 with an in service date in the middle of 2015.

 

Note: This press release supplement contains certain non-GAAP financial measures that we believe are helpful in understanding our business, as further discussed within this press release supplement.  These financial measures, which include Funds From Operations, Normalized Funds From Operations, Adjusted Funds From Operations, Funds From Operations per share, Normalized Funds From Operations per share and Adjusted Funds From Operations per share, should not be considered as an alternative to net income, earnings per share or any other GAAP measurement of performance or as an alternative to cash flows from operating, investing or financing activities. Furthermore, these non-GAAP financial measures are not intended to be a measure of cash flow or liquidity.  Information included in this supplemental package is unaudited.

SOURCE DuPont Fabros Technology, Inc.

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