PR Newswire
OVERLAND PARK, Kan., Feb. 21, 2017
OVERLAND PARK, Kan., Feb. 21, 2017 /PRNewswire/ -- QTS Realty Trust, Inc. ("QTS" or the "Company") (NYSE: QTS) today announced operating results for the fourth quarter and full year ended December 31, 2016.
Fourth Quarter and Full Year Highlights
"We are pleased to end 2016 with a solid fourth quarter and strong momentum heading into 2017. Enterprise demand for hybrid IT solutions is accelerating and our integrated technology services platform positions QTS to be a trusted IT partner to our customers," said Chad Williams, Chairman and CEO of QTS.
Williams added, "The investments we are making to enhance our product mix and develop our real estate footprint continue to expand our long-term growth opportunity. We are pleased with our execution in existing markets and excited about our performance in our newer data centers in Chicago and Piscataway. We also look forward to the additional opportunity for growth in a high demand, Tier 1 market with our new acquisition in Fort Worth."
Financial Results
Quarterly Results
Net income recognized in the fourth quarter of 2016 was $5.5 million ($0.10 per basic and diluted share), which included approximately $1.5 million of transaction and integration costs and $0.7 million of income tax benefit, compared to net income of $5.3 million ($0.11 per basic and diluted share) recognized in the fourth quarter of 2015, which also included approximately $5.0 million of transaction and integration costs and $4.4 million of income tax benefit.
QTS generated Operating FFO of $35.4 million, or $0.64 per fully diluted share, in the fourth quarter of 2016, which includes a non-cash tax benefit of approximately $0.2 million, compared to Operating FFO of $31.5 million, or $0.65 per fully diluted share, for the fourth quarter of 2015, which included a non-cash tax benefit of approximately $2.4 million. The Operating FFO for the fourth quarter of 2016 represents an increase of approximately 12.2% compared to the prior year, and a 2.1% decrease on a fully diluted per share basis. Excluding the effects of the Company's non-cash deferred tax benefit, Operating FFO for the fourth quarter of 2016 represents an increase of approximately 20.9% compared to the prior year, and a 6.2% increase on a fully diluted per share basis.
Additionally, QTS generated $48.4 million of Adjusted EBITDA in the fourth quarter of 2016, an increase of 17.9% compared to $41.0 million for the fourth quarter of 2015.
QTS generated total revenues of $105.4 million in the fourth quarter of 2016, an increase of 13.8% compared to $92.7 million in the fourth quarter of 2015. MRR as of December 31, 2016 was $30.9 million, an increase of 12.4% compared to MRR as of December 31, 2015 of $27.5 million.
2016 Results
Net income recognized for the year ended December 31, 2016 was $24.7 million ($0.47 and $0.46 per basic and diluted share, respectively), which included approximately $10.9 million of transaction and integration costs and $10.0 million of income tax benefit, compared to net income of $24.1 million ($0.54 and $0.53 per basic and diluted share, respectively) recognized for the year ended December 31, 2015, which included approximately $11.3 million of transaction and integration costs and $10.1 million of income tax benefit.
QTS generated Operating FFO of $140.7 million, or $2.61 per fully diluted share, during the year ended December 31, 2016, which includes a non-cash tax benefit of approximately $6.4 million, compared to Operating FFO of $103.9 million, or $2.29 per share, for the year ended December 31, 2015, which included a non-cash tax benefit of approximately $3.8 million. The Operating FFO for 2016 represents an increase of approximately 35.4% compared to the prior year, and a 13.8% increase on a per share basis. Excluding the effects of the Company's non-cash deferred tax benefit, Operating FFO for the year ended December 31, 2016 represents an increase of approximately 34.1% compared to the prior year, and a 12.7% increase on a fully diluted per share basis.
Additionally, QTS generated $184.3 million of Adjusted EBITDA during the year ended December 31, 2016, an increase of 31.6% compared to $140.0 million during the year ended December 31, 2015.
QTS generated total revenues of $402.4 million during the year ended December 31, 2016, an increase of 29.3% compared to $311.1 million during the year ended December 31, 2015.
Leasing Activity
During the quarter and year ended December 31, 2016, QTS entered into customer leases representing approximately $11.6 million and $48.0 million, respectively, of incremental annualized rent, net of downgrades, with fourth quarter net leasing activity in line with the prior four quarter average. The fourth quarter sales pricing of $715 per square foot was over 16% higher than the prior quarter average of $614 per square foot, which was driven by 9% higher pricing of C1 signed leases and 40% higher pricing on C2/C3 signed leases. Higher pricing on C2/C3 signed leases was driven by several large C3 deals signed during the quarter.
During the quarter and year ended December 31, 2016, QTS renewed leases with total annualized rent which was 4.7% and 0.6% higher than the annualized rent prior to their respective renewals. The Company defines renewals as leases for which the customer retains the same amount of space before and after renewal. There is variability in the Company's renewal rates based on the mix of product types renewed, and renewal rates are expected to increase in the low to mid-single digits. Rental churn (which the Company defines as MRR lost to a customer intending to fully exit the QTS platform in the near term compared to total MRR at the beginning of the period) was 0.7% for the fourth quarter of 2016 and 5.6% for the year ended December 31, 2016. During the quarter and year ended December 31, 2016, QTS commenced customer leases (which includes new customers and also existing customers that renewed their lease term) representing approximately $2.8 million and $10.8 million of MRR (and representing approximately $33.1 million and $129.0 million of annualized rent) at $464 and $601 per square foot, respectively. Average pricing on QTS commenced leases during the fourth quarter of 2016 decreased compared to the prior four quarter average primarily due to the commencement of larger C1 deals which tend to have a lower rate per square foot.
As of December 31, 2016, the booked-not-billed MRR balance (which represents customer leases that have been executed, but for which lease payments have not commenced as of December 31, 2016) was approximately $3.6 million, or $43.1 million of annualized rent, and compares to $50.8 million at September 30, 2016 and $47.7 million at December 31, 2015. The booked-not-billed balance is expected to contribute an incremental $20.0 million to revenue in 2017 (representing $29.5 million in annualized revenues), an incremental $2.9 million in 2018 (representing $4.6 million in annualized revenues), and an incremental $8.9 million in annualized revenues thereafter.
Development, Redevelopment, and Acquisitions
During the fourth quarter and year ended 2016 the Company brought online approximately 8 and 30 megawatts of gross power, respectively. During the fourth quarter and year ended 2016, the Company also brought online approximately 48,000 and 137,000 net rentable square feet ("NRSF") of raised floor and various portions of customer specific capital at an aggregate cost of approximately $66 million and $246 million, respectively. In addition, during the fourth quarter of 2016, the Company continued redevelopment of the Irving (previously disclosed as the "Dallas-Fort Worth" facility), Atlanta-Metro, Chicago, Piscataway, Santa Clara, Fort Worth and certain Leased Facilities acquired in 2015 to have space ready for customers in 2017 and forward. The Company expects to spend $325 million to $375 million in 2017 on capital expenditures, and place approximately $250 million and approximately 151,000 raised floor NRSF into service in 2017.
During the fourth quarter of 2016, QTS acquired a facility in Fort Worth, Texas for $50 million. This facility has a basis of design of 80,000 square feet, 8 gross MW of current available power with an additional 8 gross MW available for further expansion. Additionally, the Company signed a 1 MW lease with the prior owner of the facility in January 2017. This facility will provide additional capacity for the strong demand the Company has seen in the Dallas-Fort Worth market.
Balance Sheet and Liquidity
As of December 31, 2016, the Company's total debt balance net of cash and cash equivalents was $968.1 million, resulting in a debt to annualized Adjusted EBITDA of 5.0x. This ratio continues to be impacted by various portions of the Company's portfolio that were recently placed into service which have not yet produced a stabilized Adjusted EBITDA, including the Company's recent purchase of the Fort Worth facility. In addition, the Company incurred costs included in construction in progress related to revenue which will begin to ramp in 2017 and beyond associated with the Company's booked-not-billed backlog of $43.1 million in annualized rent.
In December 2016, the Company amended its unsecured credit facility, increasing the total capacity by $300 million and extending the term for an additional year. The amended unsecured credit facility has a total capacity of $1.2 billion and includes a $300 million term loan which matures in approximately 5 years, another $200 million term loan which matures in 5.5 years, and a $700 million revolving credit facility which matures in approximately 4 years, with a one year extension option. The unsecured credit facility also includes a $300 million accordion feature.
As of December 31, 2016, the Company had total available liquidity of approximately $571 million which was comprised of $561 million of available capacity under the Company's unsecured revolving credit facility and approximately $10 million of cash and cash equivalents.
2017 Guidance | | |||||||
| | | | | | | ||
| | 2016 Actuals | | 2017 | ||||
($ in millions except per share amounts) | | | | Low | | High | ||
Adjusted EBITDA | | $ 184.3 | | $ 203.0 | | $ 211.0 | ||
Operating FFO (2) | | $ 140.7 | | $ 151.0 | | $ 157.0 | ||
Operating FFO per share (2) | | $ 2.61 | | $ 2.64 | | $ 2.76 | ||
Capital Expenditures (1) | | $ 279.0 | | $ 325.0 | | $ 375.0 |
| |
(1) | Excludes acquisitions. |
(2) | Incorporates approximately $3 million of estimated non-cash tax benefit being recognized in 2017 compared to $6.4 million of non-cash tax benefit recognized in 2016. |
The Company expects revenue growth of 11%-13% which is anticipated to be back-end loaded and ramping during the year, with expected churn at the high end of our historical average of 5%-8%. The Company expects Adjusted EBITDA margin to be in line with the 2016 Adjusted EBITDA margin, with 2017 NOI margin approximately 100 basis points below the 2016 NOI margin. This guidance does not contemplate any acquisitions or dispositions.
Chief Financial Officer Transition
In conjunction with announcing operating results for the fourth quarter and full year ended December 31, 2016, QTS also announced in a separate press release, it has named Jeffrey Berson as Chief Financial Officer and Bill Schafer as EVP – Finance and Accounting, effective April 3, 2017. Please reference our press release entitled, "QTS Announces Chief Financial Officer Transition" for additional details.
Non-GAAP Financial Measures
This release includes certain non-GAAP financial measures that management believes are helpful in understanding the Company's business, as further described below.
Conference Call Details
The Company will host a conference call and webcast on February 22, 2017, at 8:30 a.m. Eastern time (7:30 a.m. Central time) to discuss its financial results, current business trends and market conditions.
The dial-in number for the conference call is (877) 883-0383 (U.S.) or (412) 902-6506 (International). The participant entry number is 8439196# and callers are asked to dial in ten minutes prior to start time. A link to the live broadcast and the replay will be available on the Company's website (www.qtsdatacenters.com) under the Investors tab.
About QTS
QTS Realty Trust, Inc. (NYSE: QTS) is a leading provider of secure, compliant data center solutions, hybrid cloud and fully managed services. QTS' integrated technology service platform of custom data center (C1), colocation (C2) and cloud and managed services (C3) provides flexible, scalable, secure IT solutions for web and IT applications. QTS' Critical Facilities Management (CFM) provides increased efficiency and greater performance for third-party data center owners and operators. QTS owns, operates or manages 25 data centers and supports more than 1,100 customers in North America, Europe and Asia Pacific.
QTS Investor Relations Contact
Stephen Douglas – Vice President – Investor Relations and Strategic Planning
Jeff Berson – Chief Investment Officer
William Schafer – Chief Financial Officer
ir@qtsdatacenters.com
Forward Looking Statements
Some of the statements contained in this release constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In particular, statements pertaining to the Company's capital resources, portfolio performance and results of operations contain forward-looking statements. Likewise, all of the statements regarding anticipated growth in funds from operations and anticipated market conditions are forward-looking statements. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.
The forward-looking statements contained in this release reflect the Company's current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause actual results to differ significantly from those expressed in any forward-looking statement. The Company does not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: adverse economic or real estate developments in the Company's markets or the technology industry; global, national and local economic conditions; risks related to the Company's international operations; difficulties in identifying properties to acquire and completing acquisitions; the Company's failure to successfully develop, redevelop and operate acquired properties or lines of business; significant increases in construction and development costs; the increasingly competitive environment in which the Company operates; defaults on, or termination or non-renewal of leases by customers; increased interest rates and operating costs, including increased energy costs; financing risks, including the Company's failure to obtain necessary outside financing; decreased rental rates or increased vacancy rates; dependence on third parties to provide Internet, telecommunications and network connectivity to the Company's data centers; the Company's failure to qualify and maintain its qualification as a real estate investment trust; environmental uncertainties and risks related to natural disasters; financial market fluctuations; and changes in real estate and zoning laws, revaluations for tax purposes and increases in real property tax rates.
While forward-looking statements reflect the Company's good faith beliefs, they are not guarantees of future performance. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the Company's future results to differ materially from any forward-looking statements, see the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2016 and other periodic reports the Company files with the Securities and Exchange Commission.
Combined Consolidated Balance Sheets | ||||||
| ||||||
(in thousands) | ||||||
| | | | | | |
| | | December 31, | | | December 31, |
ASSETS | | | 2016 | | | 2015 |
Real Estate Assets | | | | | | |
Land | | $ | 74,130 | | $ | 57,112 |
Buildings, improvements and equipment | | | 1,524,767 | | | 1,180,386 |
Less: Accumulated depreciation | | | (317,834) | | | (239,936) |
| | | 1,281,063 | | | 997,562 |
| | | | | | |
Construction in progress | | | 365,960 | | | 345,655 |
Real Estate Assets, net | | | 1,647,023 | | | 1,343,217 Werbung Mehr Nachrichten zur QTS RLTY TR.CL.A Aktie kostenlos abonnieren
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