0001490892false00014908922019-10-312019-10-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 31, 2019

CoreSite Realty Corporation

(Exact name of registrant as specified in its charter)

Maryland

001-34877

27-1925611

(State or other jurisdiction

(Commission

(IRS Employer

of incorporation)

File Number)

Identification No.)

1001 17th Street, Suite 500

Denver, CO

80202

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code: (866) 777-2673

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.01 par value per share

COR

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Section 2 — Financial Information

Item 2.02 Results of Operations and Financial Condition.

On October 31, 2019, CoreSite Realty Corporation ("CoreSite") issued a press release reporting financial results and operating information for the quarter ended September 30, 2019. In addition, CoreSite made available on its website supplemental operating and financial data for the same period. The text of the press release and the supplemental information package are furnished herewith as Exhibits 99.1 and 99.2, respectively.

The information in this report, including Exhibits 99.1 and 99.2 attached hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Section 9 — Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) The following exhibits are furnished with this Current Report on Form 8-K.

Exhibit No.

    

Description

99.1

Press Release, dated October 31, 2019.

99.2

Quarter Ended September 30, 2019, Earnings Release and Supplemental Information, dated October 31, 2019.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CORESITE REALTY CORPORATION

Date: October 31, 2019

By:

/s/ Jeffrey S. Finnin

Name: Jeffrey S. Finnin

Title:   Chief Financial Officer

By:

/s/ Mark R. Jones

Name: Mark R. Jones

Title:   Chief Accounting Officer

3

cor_Ex99_1

 

 

 Picture 5    

 

CoreSite Reports Third Quarter 2019 Financial Results

-- Delivered $14.4 Million of New and Expansion Sales for the Quarter --

-- Placed in Service 54,000 square feet for Quarter, and 151,000 Year To Date --

-- Pre-leased 74% of Phase 1 Development at LA3 --

 

DENVER, CO – October 31, 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 third quarter ended September 30, 2019.

 

Q3 Quarterly Highlights

·

Key Financial Results –

o

Grew operating revenues to $144.9 million, an increase of 4.1% year over year and 1.4% sequentially

o

Delivered net income of $0.47 per common diluted share, a decrease of $0.05 year over year and $0.06 sequentially

o

Generated FFO of $1.28 per diluted share and unit, an increase of $0.03 year over year and $0.01 sequentially

·

Lease Commencements  –

o

Commenced 130 new and expansion leases for 78,244 net rentable square feet (“NRSF”), representing $15.7 million of annualized GAAP rent, for an average rate of $200 per square foot

·

Lease Sales Activity  –

o

Signed 122 new and expansion leases for 73,144 NRSF and $14.4 million of annualized GAAP rent, for an average rate of $197 per square foot

o

Renewed 299 leases for 123,445 NRSF and $20.4 million of annualized GAAP rent, for an average rate of $165 per square foot, reflecting a decrease of 2.2% in cash rent, an increase of 4.2% in GAAP rent, and 3.1% churn

Q3 2019 Notable Events

·

Delivered SV8 Phase 1 into service with 100% occupancy

o

Placed into service SV8 Phase 1 for nearly 54,000 NRSF, and commenced the customer lease

o

Construction of SV8 Phase 2 remains on track to be completed in late Q4 2019

·

Executed a Pre-Lease at new Los Angeles Data Center

o

In September 2019, the Company executed a pre-lease for 74% of LA3 Phase 1

o

Construction is on track to deliver LA3 Phase 1 late Q3 2020

 

“We continue to execute on our 2019 building blocks for sustainable growth,” said Paul Szurek, CoreSite’s President and Chief Executive Officer. “We’re on track to deliver significant new capacity in 2019 and 2020, while creating a pipeline of sustainable and agile capacity additions for future years, thereby increasing our sales opportunities and the ability to grow our customer communities.  We believe our ongoing capacity growth, new connectivity products, and superior customer experience, position us well to benefit from the secular tailwinds for data center space and demand for high-performance hybrid-cloud solutions.”

Picture 6

© 2019, CoreSite, L.L.C. All Rights Reserved

1

 

Sales Activity

CoreSite achieved new and expansion sales of $14.4 million of annualized GAAP rent for the quarter. This included $4.5 million of core retail colocation sales and $9.9 million of scale leasing.  CoreSite achieved strong new logo sales and ongoing expansion with strategic customers in the third quarter. 

 

“We believe we are well positioned to continue to compete for retail colocation and new logos with our connected campuses, rich ecosystems, and ability to serve the network edge for new and future applications,” said Steve Smith, CoreSite’s Chief Revenue Officer.  “Enterprises are looking for colocation solutions offering direct interconnection to cloud and solution providers for their hybrid and multi-cloud needs to create a seamless service that addresses increased data volumes and end user preferences for very low latency. We continue to focus on winning and growing with these customers as we help solve their dynamic requirements and provide optionality for future needs.”

 

“We also delivered strong scale leasing this quarter, including a major pre-lease at LA3, and expect to continue to use our increased capacity to compete for scale opportunities with those customers who value and enrich our ecosystem,” said Smith.

 

Other Financial Results

CoreSite’s $144.9 million of operating revenues for the third quarter included $122.6 million of rental, power and related revenue, $19.1 million of interconnection revenue and $3.2 million of office, light-industrial and other revenue. Net income was $22.6 million for the third quarter, or $0.47 attributable to each common diluted share. 

 

Development Activity

CoreSite continues to execute on its property development pipeline.  After entering 2019 with leasable capacity at a lower level than historical norms, the Company will exit 2019 with leasable capacity and quickly developable incremental capacity at the higher levels experienced in previous years. 

 

·

CoreSite’s ongoing data center development and operational position includes  –

 

o

the ability to increase its occupied footprint of land and buildings, both owned or leased, by about 2.1 million NRSF, or about 99.0%, including space unoccupied, under construction, pre-construction or held for development, and

 

o

owning (versus leasing) 92.4% of its current and developable 4.3 million data center NRSF, supporting operational control, expansion and long-term expense management

 

·

Completed Construction

During the third quarter, CoreSite completed construction of 54,000 NRSF of its development at SV8 Phase 1 and commenced the customer lease.  For the year to date, the Company has completed and placed into service nearly 151,000 NRSF in 2019.

 

·

Construction in Progress

The Company continued to advance construction on its data center expansions at BO1, NY2 and SV8, as well as its new developments at CH2 and LA3.  CoreSite successfully pre-leased 74% of Phase 1 of its new data center at LA3, a year in advance of its expected completion.

 

 

Picture 4

© 2019, CoreSite, L.L.C. All Rights Reserved

2

 

As of September 30, 2019, CoreSite had a total of approximately 269,000 NRSF of turn-key data center capacity under construction, with $128.9 million incurred to date of the $395.0 million of total estimated costs, as detailed below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs Incurred

 

Estimated

 

 

 

 

 

 

 

 

 

 

 

 

Estimated

 

To-Date

 

Total Costs

 

 

Percent

 

 

 

Market

 

Building

 

NRSF

 

Completion

 

(in millions)

 

(in millions)

 

 

Leased

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Under Construction:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Data center expansion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Boston

 

BO1

 

19,961

 

 

Q4 2019

 

$

5.2

 

$

9.0

 

 

 —

%

 

 

 New York

 

NY2, Phase 3

 

34,589

 

 

Q1 2020

 

 

4.0

 

 

46.0

 

 

 —

 

 

 

 San Francisco Bay

 

SV8, Phase 2

 

53,728

 

 

Q4 2019

 

 

13.1

 

 

44.0

 

 

100.0

 

 

 

 San Francisco Bay

 

SV8, Phase 3

 

54,056

 

 

Q2 2020

 

 

 —

 

 

42.0

 

 

 —

 

 

 

  Total data center expansion

 

 

 

162,334

 

 

 

 

$

22.3

 

$

141.0

 

 

33.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  New development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Chicago

 

CH2, Phase 1

 

56,000

 

 

Q2 2020

 

$

69.0

 

$

120.0

 

 

 —

%

 

 

 Los Angeles

 

LA3, Phase 1

 

51,000

 

 

Q3 / Q4 2020

 

 

37.6

 

 

134.0

 

 

74.3

 

 

 

  Total new development

 

 

 

107,000

 

 

 

 

$

106.6

 

$

254.0

 

 

35.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Total under construction

 

 

 

269,334

 

 

 

 

$

128.9

 

$

395.0

 

 

34.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Picture 4

© 2019, CoreSite, L.L.C. All Rights Reserved

3

 

Upcoming Conferences and Events

CoreSite’s management will participate in Nareit’s REITworld in Los Angeles, CA on November 12-13th.  

 

In addition, CoreSite will host a Los Angeles Data Center Campus Tour and a Networking Event in Los Angeles, CA on November 11th

 

Conference Call Details

CoreSite will host its third quarter 2019 earnings call on Thursday, October 31, 2019, at 12:00 p.m. (Eastern Time).  The call will be accessible by dialing 1-877-407-3982 (domestic) or 1-201-493-6780 (international).

 

A replay will be available after the call until November 7, 2019, and can be accessed dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international). The passcode for the replay is 13695286.  The quarterly conference call also will be offered as a simultaneous webcast, accessible by visiting CoreSite.com and clicking on the “Investors” link. An on-line replay will be available for a limited time immediately following the call.

 

Concurrently with issuing its financial results, the Company will post its third quarter 2019 Supplemental Information on its website at CoreSite.com, under the “Investors” link.

 

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 Investor Relations and Corporate Communications

303-405-1012
InvestorRelations@CoreSite.com

 

 

Picture 4

© 2019, CoreSite, L.L.C. All Rights Reserved

4

 

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 amount of supply of or 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,  including indirect competition from cloud service providers;  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.

 

Use of Funds From Operations (“FFO”)

FFO is a supplemental measure of CoreSite’s performance which should be considered along with, but not as an alternative to, net income and cash provided by operating activities as a measure of operating performance. The Company calculates FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“Nareit”). FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of property and undepreciated land and impairment write-downs of depreciable real estate, plus real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures.

 

CoreSite’s management uses FFO as a supplemental performance measure because, by 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 costs.

 

CoreSite offers this measure because it recognizes that investors use FFO as a basis to compare its operating performance with that of other REITs. However, the utility of FFO as a measure of the Company’s performance is limited because FFO excludes depreciation and amortization and captures neither the changes in the value of its properties that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of its properties, all of which have real economic effect and could materially impact the Company’s financial condition and results from operations. FFO is a non-GAAP measure and should not be considered a measure of liquidity, an alternative to net income, cash provided by operating activities or any other performance measure determined in accordance with GAAP, nor is it indicative of funds available to fund the Company’s cash needs, including its ability to pay dividends

 

Picture 4

© 2019, CoreSite, L.L.C. All Rights Reserved

5

 

or make distributions. In addition, CoreSite’s calculations of FFO are not necessarily comparable to FFO as calculated by other REITs that do not use the same definition or implementation guidelines or interpret the standards differently from the Company. Investors in CoreSite’s securities should not rely on these measures as a substitute for any GAAP measure, including net income. 

 

Use of Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”)

EBITDAre is calculated in accordance with the standards established by the National Association of Real Estate Investment Trusts (“Nareit”). EBITDAre is defined as earnings before interest, taxes, depreciation and amortization, gains or losses from the sale of depreciated property, and impairment of depreciated property. CoreSite calculates adjusted EBITDA by adding its non-cash compensation expense, transaction costs from unsuccessful deals and business combinations and litigation expense to EBITDAre as well as adjusting for the impact of other impairment charges, gains or losses from sales of undepreciated land and gains or losses on early extinguishment of debt. Management uses EBITDAre and adjusted EBITDA as indicators of the Company’s ability to incur and service debt. In addition, CoreSite considers EBITDAre and adjusted EBITDA to be appropriate supplemental measures of its performance because they eliminate depreciation and interest, which permits investors to view income from operations without the impact of non-cash depreciation or the cost of debt. However, because EBITDAre and adjusted EBITDA are calculated before recurring cash charges including interest expense and taxes, and are not adjusted for capital expenditures or other recurring cash requirements of the Company’s business, their utilization as a cash flow measurement is limited.  

 

Picture 4

© 2019, CoreSite, L.L.C. All Rights Reserved

6

 

Consolidated Balance Sheets

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

  

September 30,

  

December 31,

 

 

 

2019

 

2018

 

Assets:

 

 

 

 

 

 

 

Investments in real estate:

 

 

 

 

 

 

 

Land

 

$

90,300

 

$

86,955

 

Buildings and improvements

 

 

1,896,820

 

 

1,730,329

 

 

 

 

1,987,120

 

 

1,817,284

 

Less: Accumulated depreciation and amortization

 

 

(686,026)

 

 

(590,784)

 

Net investment in operating properties

 

 

1,301,094

 

 

1,226,500

 

Construction in progress

 

 

389,174

 

 

265,921

 

Net investments in real estate

 

 

1,690,268

 

 

1,492,421

 

Operating lease right-of-use assets, net

 

 

177,535

 

 

190,304

 

Cash and cash equivalents

 

 

4,703

 

 

2,599

 

Accounts and other receivables, net

 

 

26,330

 

 

18,464

 

Lease intangibles, net

 

 

4,328

 

 

6,943

 

Goodwill

 

 

40,646

 

 

40,646

 

Other assets, net

 

 

102,932

 

 

102,290

 

Total assets

 

$

2,046,742

 

$

1,853,667

 

 

 

 

 

 

 

 

 

Liabilities and equity:

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Debt, net

 

$

1,380,541

 

$

1,130,823

 

Operating lease liabilities

 

 

191,725

 

 

202,699

 

Accounts payable and accrued expenses

 

 

132,739

 

 

89,315

 

Accrued dividends and distributions

 

 

61,783

 

 

55,679

 

Acquired below-market lease contracts, net

 

 

2,562

 

 

2,846

 

Unearned revenue, prepaid rent and other liabilities

 

 

34,066

 

 

37,672

 

Total liabilities

 

 

1,803,416

 

 

1,519,034

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

Common stock, par value $0.01

 

 

373

 

 

363

 

Additional paid-in capital

 

 

508,209

 

 

491,314

 

Accumulated other comprehensive loss

 

 

(6,666)

 

 

(2,193)

 

Distributions in excess of net income

 

 

(321,720)

 

 

(246,929)

 

Total stockholders' equity

 

 

180,196

 

 

242,555

 

Noncontrolling interests

 

 

63,130

 

 

92,078

 

Total equity

 

 

243,326

 

 

334,633

 

Total liabilities and equity

 

$

2,046,742

 

$

1,853,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Picture 4

© 2019, CoreSite, L.L.C. All Rights Reserved

7

 

Consolidated Statements of Operations

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

June 30,

 

September 30,

 

 

September 30,

 

September 30,

 

 

  

2019

 

2019

  

2018

  

  

2019

  

2018

  

Operating revenues:

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

Data center revenue:(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental, power, and related revenue

 

$

122,598

 

$

121,083

 

$

118,590

 

 

$

361,534

 

$

344,745

 

Interconnection revenue

 

 

19,082

 

 

18,776

 

 

17,701

 

 

 

56,274

 

 

51,683

 

Total data center revenue

 

 

141,680

 

 

139,859

 

 

136,291

 

 

 

417,808

 

 

396,428

 

Office, light-industrial and other revenue

 

 

3,211

 

 

3,047

 

 

2,889

 

 

 

8,884

 

 

8,818

 

Total operating revenues

 

 

144,891

 

 

142,906

 

 

139,180

 

 

 

426,692

 

 

405,246

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating and maintenance

 

 

41,251

 

 

38,067

 

 

41,161

 

 

 

117,428

 

 

112,870

 

Real estate taxes and insurance

 

 

4,973

 

 

5,988

 

 

4,699

 

 

 

17,157

 

 

14,329

 

Depreciation and amortization

 

 

40,546

 

 

36,996

 

 

36,264

 

 

 

113,188

 

 

105,598

 

Sales and marketing

 

 

5,476

 

 

5,784

 

 

5,180

 

 

 

16,912

 

 

15,629

 

General and administrative

 

 

10,671

 

 

12,282

 

 

10,074

 

 

 

33,123

 

 

29,556

 

Rent

 

 

8,331

 

 

7,733

 

 

7,329

 

 

 

23,752

 

 

20,276

 

Transaction costs

 

 

 —

 

 

 —

 

 

 —

 

 

 

 —

 

 

75

 

Total operating expenses

 

 

111,248

 

 

106,850

 

 

104,707

 

 

 

321,560

 

 

298,333

 

Operating income

 

 

33,643

 

 

36,056

 

 

34,473

 

 

 

105,132

 

 

106,913

 

Interest expense

 

 

(10,986)

 

 

(10,311)

 

 

(9,433)

 

 

 

(30,795)

 

 

(26,078)

 

Income before income taxes

 

 

22,657

 

 

25,745

 

 

25,040

 

 

 

74,337

 

 

80,835

 

Income tax (expense) benefit

 

 

(13)

 

 

(2)

 

 

(20)

 

 

 

(45)

 

 

30

 

Net income

 

 

22,644

 

 

25,743

 

 

25,020

 

 

 

74,292

 

 

80,865

 

Net income attributable to noncontrolling interests

 

 

5,194

 

 

6,208

 

 

6,420

 

 

 

17,646

 

 

22,574

 

Net income attributable to common shares

 

$

17,450

 

$

19,535

 

$

18,600

 

 

$

56,646

 

$

58,291

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to common shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.47

 

$

0.54

 

$

0.52

 

 

$

1.55

 

$

1.69

 

Diluted

 

$

0.47

 

$

0.53

 

$

0.52

 

 

$

1.54

 

$

1.68

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

36,951

 

 

36,463

 

 

35,512

 

 

 

36,590

 

 

34,505

 

Diluted

 

 

37,132

 

 

36,619

 

 

35,721

 

 

 

36,763

 

 

34,694

 

 

 

(1)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

June 30,

 

September 30,

 

 

September 30,

 

September 30,

 

 

 

2019

 

2019

  

2018

  

 

2019

  

2018

 

Rental revenue

 

$

77,907

 

$

76,529

 

$

74,321

 

 

$

229,366

 

$

219,497

 

Power revenue

 

 

41,783

 

 

41,316

 

 

40,967

 

 

 

123,602

 

 

116,356

 

Tenant reimbursement and other

 

 

2,908

 

 

3,238

 

 

3,302

 

 

 

8,566

 

 

8,892

 

Rental, power, and related revenue

 

$

122,598

 

$

121,083

 

$

118,590

 

 

$

361,534

 

$

344,745

 

 

 

Picture 4

© 2019, CoreSite, L.L.C. All Rights Reserved

8

 

Reconciliations of Net Income to FFO

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

  

September 30,

 

June 30,

 

September 30,

 

September 30,

  

September 30,

 

 

  

2019

 

2019

 

2018

 

2019

  

2018

 

Net income

 

$

22,644

 

$

25,743

 

$

25,020

 

$

74,292

 

$

80,865

 

Real estate depreciation and amortization

 

 

39,092

 

 

35,573

 

 

34,928

 

 

108,852

 

 

101,605

 

FFO available to common shareholders and OP unit holders

 

$

61,736

 

$

61,316

 

$

59,948

 

$

183,144

 

$

182,470

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - diluted

 

 

37,132

 

 

36,619

 

 

35,721

 

 

36,763

 

 

34,694

 

Weighted average OP units outstanding - diluted

 

 

11,118

 

 

11,599

 

 

12,378

 

 

11,437

 

 

13,342

 

Total weighted average shares and units outstanding - diluted

 

 

48,250

 

 

48,218

 

 

48,099

 

 

48,200

 

 

48,036

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO per common share and OP unit - diluted

 

$

1.28

 

$

1.27

 

$

1.25

 

$

3.80

 

$

3.80

 

 

 

 

 

Reconciliations of Net Income to EBITDAre and Adjusted EBITDA:

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

  

September 30,

 

June 30,

 

 

September 30,

 

September 30,

  

September 30,

 

 

  

2019

 

2019

 

 

2018

 

2019

  

2018

 

Net income

 

$

22,644

 

$

25,743

 

$

25,020

 

$

74,292

 

$

80,865

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

10,986

 

 

10,311

 

 

9,433

 

 

30,795

 

 

26,078

 

Income taxes

 

 

13

 

 

 2

 

 

20

 

 

45

 

 

(30)

 

Depreciation and amortization

 

 

40,546

 

 

36,996

 

 

36,264

 

 

113,188

 

 

105,598

 

EBITDAre

 

$

74,189

 

$

73,052

 

$

70,737

 

$

218,320

 

$

212,511

 

Non-cash compensation

 

 

3,732

 

 

3,617

 

 

3,052

 

 

10,781

 

 

8,864

 

Transaction costs / litigation

 

 

 7

 

 

 —

 

 

 3

 

 

 7

 

 

168

 

Adjusted EBITDA

 

$

77,928

 

$

76,669

 

$

73,792

 

$

229,108

 

$

221,543

 

 

 

 

 

Picture 4

© 2019, CoreSite, L.L.C. All Rights Reserved

9

 

cor_EX99-2

 

 

 

Picture 22

 

 

 

Picture 2

ONE DATA CENTER PROVIDER. EVERYTHING YOU NEED.

 

©2019 CoreSite Realty Corporation, All Rights Reserved

 

 

 

Table of Contents

Table of Contents


 

 

Overview

 

Company Profile 

3

Summary of Financial Data 

4

Earnings Release 

5

Financial Statements

 

Consolidated Balance Sheets 

10

Consolidated Statements of Operations 

11

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

12

Operating Portfolio

 

Operating Properties 

13

Leasing Statistics 

14

Geographic and Vertical Diversification 

16

10 Largest Customers 

17

Development

 

Capital Expenditures and Completed Pre-Stabilized Projects 

18

Development Summary 

19

Capital Structure

 

Market Capitalization and Debt Summary 

20

Interest Summary and Debt Covenants 

21

Components of Net Asset Value 

22

2019 Guidance 

23

Appendix 

24

 

 

 

 

 

 

Quarter Ended September 30, 2019

 

 

 

        
       

 

 

 

 

 

2

 

Table of Contents

 

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.

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