EX-99.2 3 ex-99d2.htm EX-99.2 cor_EX99-2

 

 

 

Picture 22

 

 

 

 

Picture 2

ONE DATA CENTER PROVIDER. EVERYTHING YOU NEED.

 

©2019 CoreSite Realty Corporation, All Rights Reserved

 

 

 


 

 

Quarter Ended December 31, 2018

 

 

 

        
       

 

 

 

 

 

2

 


 

 

Company Profile


Low-latency, secure and reliable on-premises access to Amazon, Microsoft, Google, Alibaba Cloud, Oracle and IBM from all eight key North American Markets via inter-site connectivity and a robust set of network service providers.

Picture 11

 

 

 

 

 

 

ONE DATA CENTER PROVIDER. EVERYTHING YOU NEED.

 

 

CONNECTIVITY TO NETWORKS AND CLOUDS

 

LOW LATENCY, EDGE MARKETS, GLOBAL REACH

 

 

 

Connecting to cloud and network providers within the same data center can save thousands of dollars a month in networking and data egress fees while reducing latency.

 

The closer a business is to end users, the easier it is to provide a better experience.

 

22 (and growing) operating data centers in eight major metros that provide access to 75% of US businesses within 5 milliseconds

Optionality to connect to 775+ cloud, IT and network service providers as business needs evolve

 

 

27,000+ interconnections

 

National footprint with international cloud and data center partnerships for multi-market requirements

Peering and cloud exchanges

 

 

Direct connections to Amazon, Alibaba, Microsoft, Google Oracle and IBM cloud services

 

Subsea cables for international reach

 

 

 

 

 

HIGH GROWTH, HIGH-DENSITY SOLUTIONS

 

THE BEST CUSTOMER EXPERIENCE

 

 

 

Cloud connectivity is important, and so is the ability for a data center to grow as business evolves

 

Products mean nothing without a 450+ dedicated team to ensure that everything runs smoothly and needs are met no matter the time of day for our 1,350+ customers

The ability to cost-effectively scale from a single cabinet to a large-scale deployment

 

 

Consistently ranked above industry average for customer satisfaction

Data center campuses that connect our downtown carrier hotels to scalable infrastructure via short, high-count dark fiber

 

 

 

Dedicated move-in and service representatives, and in-house 24/7 data center operations personnel

Flexible and high-density solutions in many markets

 

100% uptime Service Level Agreement with six-nines uptime

 

 

 

Quarter Ended December 31, 2018

 

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

3

 


 

 Summary of Financial Data


(in thousands, except per share, NRSF and MRR data) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

Year Ended

 

 

 

 

 

 

December 31,

 

September 30,

 

December 31,

 

Growth %

 

December 31,

 

December 31,

 

Growth %

 

Summary of Results

 

2018

 

2018

 

2017

 

Y/Y

 

2018

 

2017

 

Y/Y

 

GAAP Financial Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

 

$

139,146

 

$

139,180

 

$

125,946

 

10.5

%

 

$

544,392

 

$

481,821

 

13.0

%

 

Net income

 

 

25,898

 

 

25,020

 

 

27,008

 

(4.1)

 

 

 

106,763

 

 

100,491

 

6.2

 

 

Net income attributable to common shares

 

 

19,631

 

 

18,600

 

 

14,912

 

31.6

 

 

 

77,922

 

 

62,605

 

24.5

 

 

Net income attributable to common shares per share - diluted

 

$

0.54

 

$

0.52

 

$

0.44

 

22.7

 

 

$

2.22

 

$

1.84

 

20.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REIT Financial Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds from operations (FFO) to shares and units

 

$

60,751

 

$

59,948

 

$

52,224

 

16.3

%

 

$

243,221

 

$

212,089

 

14.7

%

 

Funds from operations (FFO) to shares and units, as adjusted(1)

 

 

60,751

 

 

59,948

 

 

56,550

 

7.4

 

 

 

243,221

 

 

216,415

 

12.4

 

 

Adjusted funds from operations (AFFO)

 

 

61,169

 

 

57,700

 

 

43,675

 

40.1

 

 

 

232,691

 

 

183,810

 

26.6

 

 

EBITDAre

 

 

71,401

 

 

70,737

 

 

66,296

 

7.7

 

 

 

283,912

 

 

254,063

 

11.7

 

 

Adjusted EBITDA

 

 

74,575

 

 

73,792

 

 

68,755

 

8.5

 

 

 

296,118

 

 

263,206

 

12.5

 

 

FFO per common share and OP unit - diluted

 

$

1.26

 

$

1.25

 

$

1.09

 

15.6

 

 

$

5.06

 

$

4.43

 

14.2

 

 

FFO per common share and OP unit - diluted, as adjusted(1)

 

$

1.26

 

$

1.25

 

$

1.18

 

6.8

 

 

$

5.06

 

$

4.52

 

11.9

 

 

 

(1)

FFO available to shares and units for the three months and year ended December 31, 2017, as adjusted, excludes $4.3 million, or $0.09 per share and unit, of non-cash charge related to the original issuance costs associated with our redeemed preferred stock.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

     

December 31,

     

September 30,

     

June 30,

     

March 31,

     

December 31,

     

 

     

2018

     

2018

     

2018

     

2018

     

2017

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend Activity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share and OP unit

 

$

1.10

 

$

1.03

 

$

1.03

 

$

0.98

 

$

0.98

 

TTM FFO payout ratio

 

 

82.1

 

82.6

 

82.3

 

82.6

 

81.0

%

TTM AFFO payout ratio(1)

 

 

85.8

 

90.0

 

91.0

 

93.9

 

93.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Portfolio Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating data center properties

 

 

22

 

 

21

 

 

21

 

 

20

 

 

20

 

Stabilized data center NRSF

 

 

2,318,220

 

 

2,318,220

 

 

2,241,335

 

 

2,164,778

 

 

2,067,257

 

Stabilized data center NRSF occupied

 

 

2,151,747

 

 

2,141,455

 

 

2,084,852

 

 

2,021,268

 

 

1,951,491

 

Stabilized data center % occupied

 

 

92.8

 

92.4

 

93.0

 

93.4

 

94.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Turn-Key Data Center ("TKD") Same-Store Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MRR per cabinet equivalent

 

$

1,537

 

$

1,513

 

$

1,483

 

$

1,458

 

$

1,446

 

TKD NRSF % occupied

 

 

90.7

 

90.1

 

89.9

 

89.1

 

88.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market Capitalization & Net Principal Debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total enterprise value

 

$

5,345,711

 

$

6,445,083

 

$

6,388,352

 

$

5,832,403

 

$

6,420,488

 

Total net principal debt outstanding

 

$

1,133,901

 

$

1,074,194

 

$

1,034,130

 

$

988,421

 

$

939,253

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Principal Debt to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized adjusted EBITDA

 

 

3.8

x

 

3.6

x

 

3.5

x

 

3.4

x

 

3.4

x

Enterprise value

 

 

21.2

 

16.7

 

16.2

 

16.9

 

14.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The TTM AFFO payout ratio included $1.4 million, $10.0 million, $10.3 million, $13.1 million, and $11.9 million as of December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017, respectively, of recurring capital expenditures associated with replacing our chiller plant at LA2 which has generated a significant return on investment.

 

 

 

 

Quarter Ended December 31, 2018

 

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

4

 


 

 

CoreSite Reports Fourth-Quarter 2018 Financial Results    

-- Revenue Growth of 13%  for the Year --


 

DENVER, CO – February 6, 2019

CoreSite Realty Corporation (NYSE:COR) (“the Company”), a premier provider of secure, reliable, high-performance data center and interconnection solutions across the U.S., today announced financial results for the fourth quarter ended December 31, 2018. 

 

Annual Highlights

·

Key Financial Results, compared to 2017 --

o

Operating revenues of $544.4 million, increased 13.0%

o

Net income of $2.22 per diluted common share, increased 20.7%

o

Funds From Operations (“FFO”) of $5.06 per diluted share and unit –

§

increased 14.2% year over year, or 11.9% excluding 2017 non-cash charge for redeemed preferred stock original issuance costs

o

Dividends declared of $4.14 per share and unit, increased 15.6%

 

Quarterly Highlights

·

Key Financial Results --

o

Q4 operating revenues of $139.1 million -

§

increased 10.5% year over year, and was in line sequentially

o

Q4 net income of $0.54 per diluted common share -

§

increased 22.7% year over year, and 3.8% sequentially

o

Q4 FFO of $1.26 per diluted share and unit -

§

increased 15.6% year over year, or 6.8% excluding 2017 non-cash charge for redeemed preferred stock original issuance costs and 0.8% sequentially

·

Lease Commencements --

o

Commenced 116 new and expansion leases including -

§

22,684 net rentable square feet (“NRSF”), representing $4.4 million of annualized GAAP rent at an average rate of $192 per square foot

·

Lease Sales Activity --

o

Signed 115 new and expansion leases including -

§

16,125 NRSF, representing $4.2 million of annualized GAAP rent at an average rate of $259 per square foot

o

Renewed 303 existing leases including -

§

125,078 NRSF, representing $22.5 million of annualized GAAP rent, at an average rate of $180 per square foot, including churn of 1.9%, reflecting 3.0% cash rent growth and 7.0% GAAP rent growth

 

“We delivered solid results in 2018, while expanding our customer ecosystem and building our new capacity pipeline,” said Paul Szurek, CoreSite’s Chief Executive Officer.  “In 2019, our focus is to continue executing on high-value edge and hybrid cloud deployments requiring direct interconnection to networks and cloud on-ramps.  This includes our goals of delivering significant new capacity and translating it into attractive sales growth, acquiring many new customers and continuing to deliver a strong customer experience.”

 

Quarter Ended December 31, 2018

 

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

5

 


 

Table of Contents

 

Quarter Ended December 31, 2018

 

 

Other Financial Results and Liquidity

CoreSite’s $139.1 million of operating revenues for the fourth quarter included $118.3 million of rental, power and related revenue, $18.0 million of interconnection revenue and $2.8 million of office, light-industrial and other revenue. 

Net Income was $25.9 million for the fourth quarter and $106.8 million for the year, or $0.54 and $2.22 attributable to each common diluted share, respectively. 

The Company’s balance sheet remains strong, with a ratio of net principal debt to fourth quarter annualized adjusted EBITDA of 3.8 times.  As of the end of the fourth quarter, CoreSite had $236.2 million of total liquidity, including $2.6 million of cash and $233.6 million of available capacity on its revolving credit facility.

Sales Activity

For the quarter, the Company continued to perform in the core retail colocation space with solid pricing, ongoing acquisition of new logos and expansion with key strategic customers.  Additionally, the Company achieved strong lease renewals, with churn lower than expected.  Scale colocation leasing for the quarter was impacted by the fact that occupancies were high and therefore capacity was constrained for large blocks of contiguous space in certain markets.  In 2018, the Company made solid progress on construction, and when coupled with its development completion schedule for 2019, believes its new capacity will strengthen its future sales opportunities, including for scale leasing.

“We are entering 2019 with a strong pipeline of construction and development, new logo additions, and an ongoing value proposition that we believe resonates with customers,” said Steven Smith, Chief Revenue Officer.  “These elements, along with our product enhancements, should drive significant new leasing opportunities in 2019.”

Development Activity

CoreSite expects 2019 to be a positive transition year, entering the year with leasable capacity at a low level compared to historical norms, and plans to end 2019 with leasable capacity, plus quickly developable incremental capacity, at the higher levels the Company experienced in previous years. 

CoreSite has a strong ongoing development and operational position that includes --

·

the ability to increase its occupied footprint of land and buildings, both owned or leased, by 89%, or about 1.9 million NRSF, including space unoccupied, under construction, pre-construction or held for development, and

·

owning (versus leasing) 92% of its 4.1 million data center NRSF, which supports operational control, expansion and long-term cost management

In 2018, the Company placed into service nearly 172,000 NRSF of new turn-key data center capacity, including completion late in the fourth quarter of its DC2 data center, located in Washington DC, for nearly 25,000 NRSF.

 

 

 

 

 

 

Quarter Ended December 31, 2018

 

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

6

 


 

Table of Contents

 

Quarter Ended December 31, 2018

 

 

As of December 31, 2018, CoreSite had a total of approximately 271,000 NRSF of turn-key data center capacity under construction, with $166.4 million incurred to date of the $530.2 million of total estimated costs as detailed below.  Included in these numbers are two development projects in the pre-construction phase totaling 118,000 NRSF, with $39.4 million incurred to date of the $250.0 million of estimated total costs.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs Incurred

 

Estimated

 

 

 

 

 

 

 

 

Estimated

 

To-Date

 

Total Costs

 

 

Market

 

Building

 

NRSF

 

Completion

 

(in millions)

 

(in millions)

 

 

Under Construction:

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

 

LA1

 

17,238

 

 

Q2 2019

 

$

1.6

 

$

13.2

 

 

Los Angeles

 

LA2

 

28,191

 

 

Q2 2019

 

 

7.1

 

 

21.0

 

 

Northern Virginia

 

VA3, Phase 1B

 

49,837

 

 

Q2 2019

 

 

70.8

 

 

119.0

 

 

San Francisco Bay

 

SV8, Phase 1

 

58,000

 

 

Q3 2019

 

 

47.5

 

 

127.0

 

 

Pre-Construction:

 

 

 

 

 

 

 

 

 

 

 

 

 

Chicago

 

CH2, Phase 1

 

58,000

 

 

2020

 

 

10.1

 

 

120.0

 

 

Los Angeles

 

LA3, Phase 1

 

60,000

 

 

2020

 

 

29.3

 

 

130.0

 

 

    Total

 

 

 

271,266

 

 

 

 

$

166.4

 

$

530.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational Excellence

CoreSite made investments in 2017 and 2018 to drive operational excellence with new technology, talent and staffing upgrades and increased training. 

In 2018, CoreSite achieved 99.99999% reliability, or “seven 9s,” exceeding its target of “six 9s.” This achievement positively impacted operating costs and correlated to high satisfaction from some of the Company’s largest customers for its reliability and ease of doing business. 

In addition, CoreSite delivered approximately 7% improvement in Power Utilization Efficiency on a same-store basis compared to 2017, enabled by strategic infrastructure investments and an ongoing program of operational efficiency improvements.

Financial Outlook

The Company’s outlook is based on current economic conditions, internal assumptions about its customer base, and the supply and demand dynamics of the markets in which it operates. The guidance does not include the impact of any future financing, investment or disposition activities, beyond what has already been disclosed. 

The Company’s guidance for 2019 includes --

·

Net income attributed to common share in a range of $2.15 to $2.25, and

·

FFO per common diluted share and unit in the range of $5.21 to $5.31

The difference between net income and FFO represents real estate depreciation and amortization.

For further detail on the Company’s 2019 guidance, including operating revenues, Adjusted EBITDA, depreciation and amortization and capital expenditures, along with guidance drivers, please see page 23 of CoreSite’s Supplemental Information.

 

 

Quarter Ended December 31, 2018

 

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

7

 


 

Table of Contents

 

Quarter Ended December 31, 2018

 

 

Upcoming Conferences and Events

CoreSite’s management will participate in Citi’s 2019 Global Property CEO Conference in Hollywood, Florida on March 4-5. 

Conference Call Details

CoreSite will host its fourth quarter 2018 earnings call on Thursday, February 7, 2019, at 12:00 p.m. Eastern Time. The conference call will be accessible by dialing 1-877-407-3982 (domestic) or 1-201-493-6780 (international). A replay will be available until February 21, 2019, and can be accessed shortly after the call by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international). The passcode for the replay is 13686173.  The quarterly conference call also will be offered as a simultaneous webcast, accessible by visiting www.CoreSite.com and clicking on the “Investors” link.  An on-line replay will be available for a limited time immediately following the call.

About CoreSite

CoreSite Realty Corporation (NYSE:COR) delivers secure, reliable, high-performance data center and interconnection solutions to a growing customer ecosystem across eight key North American markets. More than 1,350 of the world’s leading enterprises, network operators, cloud providers, and supporting service providers choose CoreSite to connect, protect and optimize their performance-sensitive data, applications and computing workloads. Our scalable, flexible solutions and 450+ dedicated employees consistently deliver unmatched data center options — all of which leads to a best-in-class customer experience and lasting relationships. For more information, visit www.CoreSite.com.

CoreSite Contact

Carole Jorgensen

Vice President of Investor Relations and Corporate Communications

+1 303.405.1012
InvestorRelations@CoreSite.com

 

Quarter Ended December 31, 2018

 

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

8

 


 

Table of Contents

 

Quarter Ended December 31, 2018

 

 

Forward Looking Statements

This earnings release and accompanying supplemental information may contain 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 some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond CoreSite’s control, that may cause actual results to differ significantly from those expressed in any forward-looking statement. These risks include, without limitation: the geographic concentration of the Company’s data centers in certain markets and any adverse developments in local economic conditions or the demand for data center space in these markets; fluctuations in interest rates and increased operating costs; difficulties in identifying properties to acquire and completing acquisitions; significant industry competition; failure to obtain necessary outside financing; the ability to service existing debt; the failure to qualify or maintain its status as a REIT; financial market fluctuations; changes in real estate and zoning laws and increases in real property tax rates; and other factors affecting the real estate industry generally. All forward-looking statements reflect the Company’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, 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 its most recent annual report on Form 10-K, and other risks described in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission.

 

 

 

Quarter Ended December 31, 2018

 

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

9

 


 

 

Consolidated Balance Sheets


(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

  

December 31,

  

December 31,

 

 

 

2018

 

2017 (1)

 

Assets:

 

 

 

 

 

 

 

Investments in real estate:

 

 

 

 

 

 

 

Land

 

$

86,955

 

$

97,258

 

Buildings and improvements

 

 

1,730,329

 

 

1,561,056

 

 

 

 

1,817,284

 

 

1,658,314

 

Less: Accumulated depreciation and amortization

 

 

(590,784)

 

 

(473,141)

 

Net investment in operating properties

 

 

1,226,500

 

 

1,185,173

 

Construction in progress

 

 

265,921

 

 

162,903

 

Net investments in real estate

 

 

1,492,421

 

 

1,348,076

 

Operating lease right-of-use assets

 

 

190,304

 

 

92,984

 

Cash and cash equivalents

 

 

2,599

 

 

5,247

 

Accounts and other receivables, net

 

 

18,464

 

 

28,875

 

Lease intangibles, net

 

 

6,943

 

 

6,314

 

Goodwill

 

 

40,646

 

 

40,646

 

Other assets, net

 

 

102,290

 

 

103,501

 

Total assets

 

$

1,853,667

 

$

1,625,643

 

 

 

 

 

 

 

 

 

Liabilities and equity:

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Debt, net

 

$

1,130,823

 

$

939,570

 

Operating lease liabilities

 

 

202,699

 

 

102,912

 

Accounts payable and accrued expenses

 

 

89,315

 

 

77,170

 

Accrued dividends and distributions

 

 

55,679

 

 

48,976

 

Acquired below-market lease contracts, net

 

 

2,846

 

 

3,504

 

Unearned revenue, prepaid rent and other liabilities

 

 

37,672

 

 

34,867

 

Total liabilities

 

 

1,519,034

 

 

1,206,999

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

Common stock, par value $0.01

 

 

363

 

 

338

 

Additional paid-in capital

 

 

491,314

 

 

457,495

 

Accumulated other comprehensive income (loss)

 

 

(2,193)

 

 

753

 

Distributions in excess of net income

 

 

(246,929)

 

 

(177,566)

 

Total stockholders' equity

 

 

242,555

 

 

281,020

 

Noncontrolling interests

 

 

92,078

 

 

137,624

 

Total equity

 

 

334,633

 

 

418,644

 

Total liabilities and equity

 

$

1,853,667

 

$

1,625,643

 

 

 

(1)

Adoption of the new lease accounting  standard effective January 1, 2018, required that we adjust the consolidated balance sheet as of December 31, 2017, to include the recognition of additional right-of-use assets and lease liabilities for operating leases. See our SEC filings for additional information.

 

 

 

 

Quarter Ended December 31, 2018

 

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

10

 


 

Consolidated Statements of Operations


(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

 

 

  

2018

  

2018

  

2017

 

2018

  

2017

  

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data center revenue:(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental, power, and related revenue

 

$

118,341

 

$

118,590

 

$

106,748

 

$

463,086

 

$

407,680

 

Interconnection revenue

 

 

18,026

 

 

17,701

 

 

16,255

 

 

69,709

 

 

62,293

 

Total data center revenue

 

 

136,367

 

 

136,291

 

 

123,003

 

 

532,795

 

 

469,973

 

Office, light-industrial and other revenue

 

 

2,779

 

 

2,889

 

 

2,943

 

 

11,597

 

 

11,848

 

Total operating revenues

 

 

139,146

 

 

139,180

 

 

125,946

 

 

544,392

 

 

481,821

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating and maintenance

 

 

39,487

 

 

41,161

 

 

34,722

 

 

152,357

 

 

132,820

 

Real estate taxes and insurance

 

 

4,910

 

 

4,699

 

 

3,963

 

 

19,239

 

 

14,913

 

Depreciation and amortization

 

 

36,035

 

 

36,264

 

 

32,629

 

 

141,633

 

 

129,251

 

Sales and marketing

 

 

5,394

 

 

5,180

 

 

4,616

 

 

21,023

 

 

18,176

 

General and administrative

 

 

10,534

 

 

10,074

 

 

10,157

 

 

40,090

 

 

37,548

 

Rent

 

 

7,420

 

 

7,329

 

 

6,155

 

 

27,696

 

 

24,125

 

Transaction costs

 

 

 —

 

 

 —

 

 

37

 

 

75

 

 

176

 

Total operating expenses

 

 

103,780

 

 

104,707

 

 

92,279

 

 

402,113

 

 

357,009

 

Operating income

 

 

35,366

 

 

34,473

 

 

33,667

 

 

142,279

 

 

124,812

 

Interest expense

 

 

(9,448)

 

 

(9,433)

 

 

(6,635)

 

 

(35,526)

 

 

(24,147)

 

Income before income taxes

 

 

25,918

 

 

25,040

 

 

27,032

 

 

106,753

 

 

100,665

 

Income tax (expense) benefit

 

 

(20)

 

 

(20)

 

 

(24)

 

 

10

 

 

(174)

 

Net income

 

 

25,898

 

 

25,020

 

 

27,008

 

 

106,763

 

 

100,491

 

Net income attributable to noncontrolling interests

 

 

6,267

 

 

6,420

 

 

6,099

 

 

28,841

 

 

25,636

 

Net income attributable to CoreSite Realty Corporation

 

 

19,631

 

 

18,600

 

 

20,909

 

 

77,922

 

 

74,855

 

Preferred stock dividends

 

 

 —

 

 

 —

 

 

(1,671)

 

 

 —

 

 

(7,924)

 

Original issuance costs associated with redeemed preferred stock

 

 

 —

 

 

 —

 

 

(4,326)

 

 

 —

 

 

(4,326)

 

Net income attributable to common shares

 

$

19,631

 

$

18,600

 

$

14,912

 

$

77,922

 

$

62,605

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to common shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.54

 

$

0.52

 

$

0.44

 

$

2.23

 

$

1.85

 

Diluted

 

$

0.54

 

$

0.52

 

$

0.44

 

$

2.22

 

$

1.84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

36,300

 

 

35,512

 

 

33,893

 

 

34,957

 

 

33,793

 

Diluted

 

 

36,486

 

 

35,721

 

 

34,145

 

 

35,137

 

 

34,059

 

 

 

 

 

(1)

During 2018, the Financial Accounting Standards Board (“FASB”) issued updates to the new lease accounting standard. As a result of the updates we have combined contractual data center rental, power, and tenant reimbursements and other revenue into a single line item as shown below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

 

 

 

2018

  

2018

  

2017

 

2018

  

2017

 

Rental revenue

 

$

74,326

 

$

74,321

 

$

68,373

 

$

293,823

 

$

264,134

 

Power revenue

 

 

41,637

 

 

40,967

 

 

36,528

 

 

157,993

 

 

134,909

 

Tenant reimbursement and other

 

 

2,378

 

 

3,302

 

 

1,847

 

 

11,270

 

 

8,637

 

Rental, power, and related revenue

 

$

118,341

 

$

118,590

 

$

106,748

 

$

463,086

 

$

407,680

 

 

 

 

 

 

Quarter Ended December 31, 2018

 

Overview

Financial
Statements

Operating
Portfolio

Development

Capital
Structure

Components
of NAV

Guidance

Appendix

11

 


 

Reconciliations of Net Income to FFO, AFFO, EBITDAre and Adjusted EBITDA


(in thousands, except per share data)