SAN FRANCISCO, July 30, 2020 /PRNewswire/ -- Digital
Realty (NYSE: DLR), a leading global provider of cloud- and
carrier-neutral data center, colocation and interconnection
solutions, announced today financial results for the second quarter
of 2020. All per-share results are presented on a
fully-diluted share and unit basis.
Highlights
- Reported net income available to common stockholders of
$0.20 per share in 2Q20, compared to
$0.15 in 2Q19
- Reported FFO per share of $1.49
in 2Q20, compared to $1.53 in
2Q19
- Reported core FFO per share of $1.54 in 2Q20, compared to $1.64 in 2Q19
- Signed total bookings during 2Q20 expected to generate
$144 million of annualized GAAP
rental revenue, including a $12
million contribution from interconnection
- Raised 2020 core FFO per share outlook from $5.90-$6.10 to
$6.00-$6.10
Financial Results
Digital Realty reported revenues for the second quarter of 2020
of $993 million, a 21% increase from
the previous quarter and a 24% increase from the same quarter last
year.
The company delivered second quarter of 2020 net income of
$76 million, and net income available
to common stockholders of $54
million, or $0.20 per diluted
share, compared to $0.90 per diluted
share in the previous quarter and $0.15 per diluted share in the same quarter last
year.
Digital Realty generated second quarter of 2020 adjusted EBITDA
of $559 million, a 16% increase from
the previous quarter and a 17% increase over the same quarter last
year.
The company reported second quarter of 2020 funds from
operations of $415 million, or
$1.49 per share, compared to
$0.91 per share in the previous
quarter and $1.53 per share in the
same quarter last year.
Excluding certain items that do not represent core expenses or
revenue streams, Digital Realty delivered second quarter of 2020
core FFO per share of $1.54, a 1%
increase from $1.53 per share in the
previous quarter, and a 6% decrease from $1.64 per share in the same quarter last
year.
Leasing Activity
In the second quarter, Digital Realty signed total bookings
expected to generate $144 million of
annualized GAAP rental revenue, including a $12 million contribution from interconnection and
an $18 million contribution from the
combination with Interxion, which was completed on March 12, 2020.
"I'm incredibly proud of the way the Digital Realty team has
come together during the difficult circumstances of the past
several months to maintain steadfast support for our customers
around the world, prioritizing health and safety while maintaining
service levels," said Digital Realty Chief Executive Officer
A. William Stein. "We
continued to seed investments to support our customers' future
growth across the Americas, APAC and EMEA, while delivering record
current-period bookings, demonstrating the power of our global
platform as well as the resiliency of our business. Looking
ahead, we are well positioned to continue to deliver sustainable
growth for customers, shareholders and employees, into the second
half of 2020 and beyond."
The weighted-average lag between leases signed during the second
quarter of 2020 and the contractual commencement date was seven
months.
In addition to new leases signed, Digital Realty also signed
renewal leases representing $169
million of annualized GAAP rental revenue during the
quarter. Rental rates on renewal leases signed during the
second quarter of 2020 rolled down 2.8% on a cash basis and up 7.2%
on a GAAP basis.
New leases signed during the second quarter of 2020 are
summarized by region as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Rent
|
|
|
|
GAAP Base Rent
|
|
|
|
GAAP Base Rent
|
The
Americas
|
|
(in thousands)
|
|
Square Feet
|
|
per Square Foot
|
|
Megawatts
|
|
per Kilowatt
|
0-1
MW
|
|
|
$11,645
|
|
59,770
|
|
|
$195
|
|
4.5
|
|
|
$214
|
> 1
MW
|
|
|
78,711
|
|
668,092
|
|
|
118
|
|
70.6
|
|
|
93
|
Other
(1)
|
|
|
17,376
|
|
532,078
|
|
|
33
|
|
—
|
|
|
—
|
Total
|
|
|
$107,733
|
|
1,259,940
|
|
|
$86
|
|
75.1
|
|
|
$100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0-1
MW
|
|
|
$9,898
|
|
40,469
|
|
|
$245
|
|
3.2
|
|
|
$260
|
> 1
MW
|
|
|
11,237
|
|
111,474
|
|
|
101
|
|
9.6
|
|
|
98
|
Other
(1)
|
|
|
108
|
|
927
|
|
|
116
|
|
—
|
|
|
—
|
Total
|
|
|
$21,243
|
|
152,870
|
|
|
$139
|
|
12.8
|
|
|
$138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0-1
MW
|
|
|
$617
|
|
2,891
|
|
|
$213
|
|
0.2
|
|
|
$266
|
> 1
MW
|
|
|
2,433
|
|
10,024
|
|
|
243
|
|
1.2
|
|
|
167
|
Other
(1)
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
Total
|
|
|
$3,050
|
|
12,915
|
|
|
$236
|
|
1.4
|
|
|
$180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Regions
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0-1
MW
|
|
|
$22,160
|
|
103,130
|
|
|
$215
|
|
7.9
|
|
|
$234
|
> 1
MW
|
|
|
92,382
|
|
789,590
|
|
|
117
|
|
81.4
|
|
|
95
|
Other
(1)
|
|
|
17,484
|
|
533,005
|
|
|
33
|
|
—
|
|
|
—
|
Total
|
|
|
$132,026
|
|
1,425,725
|
|
|
$93
|
|
89.3
|
|
|
$107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interconnection
|
|
|
$11,775
|
|
N/A
|
|
|
N/A
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand
Total
|
|
|
$143,800
|
|
1,425,725
|
|
|
$93
|
|
89.3
|
|
|
$107
|
|
Note: Totals
may not foot due to rounding differences.
|
(1)
|
Other includes
Powered Base Building shell capacity as well as storage and office
space within fully improved data center
facilities.
|
(2)
|
Based on quarterly
average exchange rates during the three months ended June 30,
2020.
|
Investment Activity
During the second quarter of 2020, Interxion, a leading European
provider of carrier- and cloud-neutral colocation data center
solutions and a Digital Realty company, acquired a 3.6-acre land
parcel in Madrid, Spain for
approximately €33 million, or $37
million. The land parcel is less than one kilometer
from Interxion's existing campus in Madrid. Upon completion, the new
facility is expected to support up to 34 megawatts of critical IT
capacity and will encompass more than 375,000 square feet.
Commencement of development will be subject to market demand,
and delivery will be phased to meet future customer growth
requirements.
Subsequent to quarter-end, Interxion acquired the freehold to
the land under its Hanauer Landstraße campus in Frankfurt for €185 million, or approximately
$209 million. The site includes
nine Interxion data centers previously subject to leasehold
agreements with approximately nine years of remaining lease term,
along with Interxion's German headquarters office as well as
several buildings currently leased to other customers.
Interxion now owns the freehold to all 15 data centers on its
Frankfurt campus.
Separately, Interxion reached an agreement to acquire an
expansion parcel within approximately one kilometre of the Hanauer
Landstraße campus for €177 million, or approximately $200 million. The expansion parcel totals
107,000 square metres that will support the development of up to
180 megawatts of additional IT capacity and will be fully connected
to the existing campus. The purchase is expected to close in
two stages, with final transfer of ownership in early 2021.
Subsequent to quarter-end, Digital Realty closed on the sale of
a property in Gronigen, the
Netherlands for €20 million, or $22
million. The property is expected to generate 2020
cash net operating income of approximately €1.3 million, or
$1.5 million, representing a 6.7% cap
rate.
Balance Sheet
Digital Realty completed the following financing transactions
during the second quarter of 2020.
- In mid-June, Digital Realty closed an offering of €500 million,
or approximately $565 million, of
1.250% Euro-denominated notes due 2031.
- Likewise in mid-June, Digital Realty liquidated a portion of
its stake in Megaport with the sale of 7.7 million shares at a
weighted average price of A$13.36
generating gross proceeds of A$103
million, or approximately $70
million.
- During the second quarter of 2020, Digital Realty issued 4.5
million shares of common stock under the company's at-the-market
equity offering program at a weighted average price of $142.43 per share, generating gross proceeds of
approximately $645 million.
- Subsequent to quarter-end, Digital Realty announced its intent
to redeem all $300 million of its
outstanding 3.625% notes due 2022 as well as all $500 million of its outstanding 3.950% notes due
2022.
Digital Realty had approximately $12.4
billion of total debt outstanding as of June 30, 2020, comprised of $12.1 billion of unsecured debt and approximately
$0.2 billion of secured debt.
At the end of the second quarter of 2020, net debt-to-adjusted
EBITDA was 5.7x, debt plus-preferred-to-total enterprise value was
26.0% and fixed charge coverage was 4.6x. Pro forma for
settlement of the $1 billion forward
equity offering, net debt-to-adjusted EBITDA was 5.2x and fixed
charge coverage was 4.9x.
COVID-19
Throughout the COVID-19 global pandemic, Digital Realty's data
centers around the world have remained fully operational in
accordance with business continuity and pandemic response plans,
prioritizing the health and safety of employees, customers and
partners while ensuring service levels are maintained.
Digital Realty data centers have been deemed essential operations,
allowing for critical personnel to remain in place and continue to
provide services and support for customers. Construction
activity has been somewhat delayed in a few markets due to
government restrictions in certain locations and/or limited
availability of labor. In some instances, these delays have
impacted scheduled delivery dates. We are monitoring the
situation closely and remain in frequent communication with
customers, contractors and suppliers. We have proactively
managed our supply chain, and we believe we have acquired the vast
majority of the equipment needed to complete our 2020 development
activities. We believe we have ample liquidity to fund our
business needs, given the $1 billion
available upon physical settlement of the forward equity offering
as well as the $505 million of cash
on the balance sheet and $2.5 billion
of availability under our global revolving credit facilities as of
June 30, 2020. While we have
not experienced any significant business disruptions from the
COVID-19 pandemic to date, we cannot predict what impact the
COVID-19 pandemic may have on our future financial condition,
results of operations or cash flows due to numerous
uncertainties.
2020 Outlook
Digital Realty raised its 2020 core FFO per share outlook from
$5.90-$6.10 to $6.00-$6.10.
The assumptions underlying the outlook are summarized in the
following table.
|
|
|
|
|
|
|
As of
|
|
As of
|
Top-Line and
Cost Structure
|
|
May
7, 2020
|
|
July
30, 2020
|
Total
revenue
|
|
$3.725 - $3.825
billion
|
|
$3.775 - $3.825
billion
|
Net non-cash rent
adjustments (1)
|
|
($20 - $30
million)
|
|
($20 - $30
million)
|
Adjusted
EBITDA
|
|
$2.075 - $2.125
billion
|
|
$2.100 - $2.125
billion
|
G&A
|
|
$320 - $330
million
|
|
$320 - $330
million
|
|
|
|
|
|
Internal
Growth
|
|
|
|
|
Rental rates on renewal
leases
|
|
|
|
|
Cash basis
|
|
Down low
single-digits
|
|
Down low
single-digits
|
GAAP basis
|
|
Unchanged
|
|
Unchanged
|
Year-end portfolio
occupancy (2)
|
|
85.0% -
86.0%
|
|
85.0% -
86.0%
|
"Same-capital" cash NOI
growth (3)
|
|
(2.5%) -
(3.5%)
|
|
(2.5%) -
(3.5%)
|
|
|
|
|
|
Foreign Exchange
Rates
|
|
|
|
|
U.S. Dollar / Pound
Sterling
|
|
$1.20 -
$1.25
|
|
$1.20 -
$1.25
|
U.S. Dollar /
Euro
|
|
$1.05 -
$1.10
|
|
$1.05 -
$1.15
|
|
|
|
|
|
External
Growth
|
|
|
|
|
Dispositions
|
|
|
|
|
Dollar
volume
|
|
$0.6 - $1.0
billion
|
|
$0.6 - $1.0
billion
|
Cap rate
|
|
0.0% - 12.0%
|
|
0.0% - 12.0%
|
Development
|
|
|
|
|
CapEx (4)
|
|
$1.9 - $2.2
billion
|
|
$1.9 - $2.2
billion
|
Average stabilized
yields
|
|
9.0% - 15.0%
|
|
9.0% - 15.0%
|
Enhancements and other
non-recurring CapEx (5)
|
|
$5 - $10
million
|
|
$5 - $10
million
|
Recurring CapEx +
capitalized leasing costs (6)
|
|
$220 - $230
million
|
|
$220 - $230
million
|
|
|
|
|
|
Balance
Sheet
|
|
|
|
|
Long-term debt
issuance
|
|
|
|
|
Dollar
amount
|
|
$1.9 billion
|
|
$2.5 billion
|
Pricing
|
|
1.00%
|
|
1.00% -
1.25%
|
Timing
|
|
Early 2020
|
|
Early-to-mid
2020
|
|
|
|
|
|
Net income
per diluted share
|
|
$1.60 -
$1.75
|
|
$1.20 -
$1.25
|
Real estate
depreciation and (gain) / loss on sale
|
|
$3.50 -
$3.50
|
|
$3.90 -
$3.90
|
Funds From
Operations / share (NAREIT-Defined)
|
|
$5.10 -
$5.25
|
|
$5.10 -
$5.15
|
Non-core expenses and
revenue streams
|
|
$0.80 -
$0.85
|
|
$0.90 -
$0.95
|
Core Funds
From Operations / share
|
|
$5.90 -
$6.10
|
|
$6.00 -
$6.10
|
Foreign currency
translation adjustments
|
|
$0.05 -
$0.15
|
|
$0.05 -
$0.15
|
Constant-Currency Core FFO /
share
|
|
$5.95 -
$6.25
|
|
$6.05 -
$6.25
|
|
|
(1)
|
Net non-cash rent
adjustments represent the sum of straight-line rental revenue and
straight-line rent expense, as well as the amortization of above-
and below-market leases (i.e., ASC 805
adjustments).
|
(2)
|
Reflects inclusion of
the Interxion portfolio, which was approximately 75% occupied as of
June 30, 2020.
|
(3)
|
The
"same-capital" pool includes properties owned as of December
31, 2018 with less than 5% of total rentable square feet under
development. It also excludes properties that were
undergoing, or were expected to undergo, development activities in
2019–2020, properties classified as held for sale, and properties
sold or contributed to joint ventures for all periods
presented.
|
(4)
|
Includes land
acquisitions.
|
(5)
|
Other non-recurring
CapEx represents costs incurred to enhance the capacity or
marketability of operating properties, such as network fiber
initiatives and software development costs.
|
(6)
|
Recurring CapEx
represents non-incremental improvements required to maintain
current revenues, including second-generation tenant improvements
and leasing commissions.
|
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures,
including FFO, core FFO and Adjusted EBITDA. A reconciliation
from U.S. GAAP net income available to common stockholders to FFO,
a reconciliation from FFO to core FFO, and definitions of FFO and
core FFO are included as an attachment to this document. A
reconciliation from U.S. GAAP net income available to common
stockholders to Adjusted EBITDA, a definition of Adjusted EBITDA
and definitions of net debt-to-Adjusted EBITDA,
debt-plus-preferred-to-total enterprise value, cash NOI, and fixed
charge coverage ratio are included as an attachment to this
document.
Investor Conference Call
Prior to Digital Realty's investor conference call at
5:30 p.m. EDT / 2:30 p.m. PDT on July 30,
2020, a presentation will be posted to the Investors section
of the company's website at https://investor.digitalrealty.com/.
The presentation is designed to accompany the discussion of
the company's second quarter 2020 financial results and operating
performance. The conference call will feature Chief Executive
Officer A. William Stein and Chief
Financial Officer Andrew P.
Power.
To participate in the live call, investors are invited to dial
(888) 317-6003 (for domestic callers) or (412) 317-6061 (for
international callers) and reference the conference ID# 0396071 at
least five minutes prior to start time. A live webcast of the
call will be available via the Investors section of Digital
Realty's website at https://investor.digitalrealty.com/.
Telephone and webcast replays will be available after the call
until August 30, 2020. The
telephone replay can be accessed by dialing (877) 344-7529 (for
domestic callers) or (412) 317-0088 (for international callers) and
providing the conference ID# 10145667. The webcast replay can
be accessed on Digital Realty's website.
About Digital Realty
Digital Realty supports the data center, colocation and
interconnection strategies of customers across the Americas, EMEA
and APAC, ranging from cloud and information technology services,
communications and social networking to financial services,
manufacturing, energy, healthcare and consumer products. To
learn more about Digital Realty, please visit digitalrealty.com or
follow us on LinkedIn and Twitter.
Contact Information
Andrew P. Power
Chief Financial Officer
Digital Realty
(415) 738–6500
John J. Stewart / Jim Huseby
Investor Relations
Digital Realty
(415) 738–6500
Consolidated
Quarterly Statements of Operations
|
Financial
Supplement
|
Unaudited and
Dollars in Thousands, Except Per Share Data
|
Second Quarter
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
30-Jun-20
|
|
|
31-Mar-20
|
|
|
31-Dec-19
|
|
|
30-Sep-19
|
|
|
30-Jun-19
|
|
|
|
30-Jun-20
|
|
|
30-Jun-19
|
Rental
revenues
|
|
|
$698,041
|
|
|
$579,774
|
|
|
$549,733
|
|
|
$564,975
|
|
|
$565,925
|
|
|
|
$1,277,815
|
|
|
$1,151,349
|
Tenant reimbursements
- Utilities
|
|
|
141,576
|
|
|
113,520
|
|
|
107,518
|
|
|
114,719
|
|
|
106,409
|
|
|
|
255,096
|
|
|
208,978
|
Tenant reimbursements
- Other
|
|
|
62,630
|
|
|
56,943
|
|
|
59,641
|
|
|
57,466
|
|
|
62,820
|
|
|
|
119,573
|
|
|
118,688
|
Interconnection &
other
|
|
|
85,428
|
|
|
69,835
|
|
|
65,576
|
|
|
65,312
|
|
|
64,232
|
|
|
|
155,263
|
|
|
132,400
|
Fee income
|
|
|
4,353
|
|
|
2,452
|
|
|
4,814
|
|
|
3,994
|
|
|
925
|
|
|
|
6,805
|
|
|
2,845
|
Other
|
|
|
967
|
|
|
813
|
|
|
181
|
|
|
—
|
|
|
486
|
|
|
|
1,780
|
|
|
1,051
|
Total Operating
Revenues
|
|
|
$992,995
|
|
|
$823,337
|
|
|
$787,463
|
|
|
$806,466
|
|
|
$800,797
|
|
|
|
$1,816,332
|
|
|
$1,615,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utilities
|
|
|
$160,173
|
|
|
$129,526
|
|
|
$125,127
|
|
|
$132,565
|
|
|
$123,398
|
|
|
|
$289,698
|
|
|
$247,732
|
Rental property
operating
|
|
|
172,474
|
|
|
136,182
|
|
|
129,034
|
|
|
126,866
|
|
|
128,634
|
|
|
|
308,656
|
|
|
259,254
|
Property
taxes
|
|
|
45,071
|
|
|
42,123
|
|
|
42,541
|
|
|
38,255
|
|
|
41,482
|
|
|
|
87,194
|
|
|
78,797
|
Insurance
|
|
|
3,370
|
|
|
3,547
|
|
|
3,055
|
|
|
3,103
|
|
|
3,441
|
|
|
|
6,917
|
|
|
6,432
|
Depreciation &
amortization
|
|
|
349,165
|
|
|
291,457
|
|
|
275,008
|
|
|
286,718
|
|
|
290,562
|
|
|
|
640,622
|
|
|
602,048
|
General &
administration
|
|
|
90,649
|
|
|
62,266
|
|
|
53,540
|
|
|
49,862
|
|
|
52,318
|
|
|
|
152,915
|
|
|
104,294
|
Severance, equity
acceleration, and legal expenses
|
|
|
3,642
|
|
|
1,272
|
|
|
1,130
|
|
|
123
|
|
|
665
|
|
|
|
4,914
|
|
|
2,148
|
Transaction and
integration expenses
|
|
|
15,618
|
|
|
56,801
|
|
|
17,106
|
|
|
4,115
|
|
|
4,210
|
|
|
|
72,419
|
|
|
6,704
|
Impairment of
investments in real estate
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
5,351
|
Other
expenses
|
|
|
22
|
|
|
114
|
|
|
1,989
|
|
|
92
|
|
|
7,115
|
|
|
|
136
|
|
|
12,037
|
Total Operating
Expenses
|
|
|
$840,184
|
|
|
$723,288
|
|
|
$648,530
|
|
|
$641,699
|
|
|
$651,825
|
|
|
|
$1,563,471
|
|
|
$1,324,797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
$152,811
|
|
|
$100,049
|
|
|
$138,933
|
|
|
$164,767
|
|
|
$148,972
|
|
|
|
$252,861
|
|
|
$290,514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in (loss)
earnings of unconsolidated joint ventures
|
|
|
(7,632)
|
|
|
(78,996)
|
|
|
11,157
|
|
|
(19,269)
|
|
|
6,962
|
|
|
|
(86,628)
|
|
|
16,180
|
Gain on sale /
deconsolidation
|
|
|
—
|
|
|
304,801
|
|
|
267,651
|
|
|
—
|
|
|
—
|
|
|
|
304,801
|
|
|
67,497
|
Interest and other
income (expense), net
|
|
|
22,163
|
|
|
(3,542)
|
|
|
10,734
|
|
|
16,842
|
|
|
16,980
|
|
|
|
18,621
|
|
|
38,424
|
Interest
(expense)
|
|
|
(79,874)
|
|
|
(85,800)
|
|
|
(80,880)
|
|
|
(84,574)
|
|
|
(86,051)
|
|
|
|
(165,674)
|
|
|
(187,603)
|
Income tax benefit
(expense)
|
|
|
(11,490)
|
|
|
(7,182)
|
|
|
1,731
|
|
|
(4,826)
|
|
|
(4,634)
|
|
|
|
(18,672)
|
|
|
(8,900)
|
Loss from early
extinguishment of debt
|
|
|
—
|
|
|
(632)
|
|
|
—
|
|
|
(5,366)
|
|
|
(20,905)
|
|
|
|
(632)
|
|
|
(33,791)
|
Net
Income
|
|
|
$75,978
|
|
|
$228,698
|
|
|
$349,326
|
|
|
$67,574
|
|
|
$61,324
|
|
|
|
$304,677
|
|
|
$182,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (income) loss
attributable to noncontrolling interests
|
|
|
(1,147)
|
|
|
(4,684)
|
|
|
(13,042)
|
|
|
(1,077)
|
|
|
(1,156)
|
|
|
|
(5,831)
|
|
|
(5,341)
|
Net Income
Attributable to Digital Realty Trust, Inc.
|
|
|
$74,831
|
|
|
$224,014
|
|
|
$336,284
|
|
|
$66,497
|
|
|
$60,168
|
|
|
|
$298,846
|
|
|
$176,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
dividends, including undeclared dividends
|
|
|
(21,155)
|
|
|
(21,155)
|
|
|
(20,707)
|
|
|
(16,670)
|
|
|
(16,670)
|
|
|
|
(42,310)
|
|
|
(37,613)
|
Issuance costs
associated with redeemed preferred stock
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,760)
|
|
|
|
—
|
|
|
(11,760)
|
Net Income Available
to Common Stockholders
|
|
|
$53,676
|
|
|
$202,859
|
|
|
$315,577
|
|
|
$49,827
|
|
|
$31,738
|
|
|
|
$256,536
|
|
|
$127,607
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding - basic
|
|
|
267,569,823
|
|
|
222,163,324
|
|
|
208,776,355
|
|
|
208,421,470
|
|
|
208,284,407
|
|
|
|
244,866,574
|
|
|
208,048,207
|
Weighted-average
shares outstanding - diluted
|
|
|
270,744,408
|
|
|
224,474,295
|
|
|
210,286,278
|
|
|
209,801,771
|
|
|
209,435,572
|
|
|
|
247,576,014
|
|
|
208,894,294
|
Weighted-average
fully diluted shares and units
|
|
|
278,719,109
|
|
|
232,753,630
|
|
|
218,901,078
|
|
|
218,755,597
|
|
|
218,497,318
|
|
|
|
255,704,473
|
|
|
218,039,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share
- basic
|
|
|
$0.20
|
|
|
$0.91
|
|
|
$1.51
|
|
|
$0.24
|
|
|
$0.15
|
|
|
|
$1.05
|
|
|
$0.61
|
Net income per share
- diluted
|
|
|
$0.20
|
|
|
$0.90
|
|
|
$1.50
|
|
|
$0.24
|
|
|
$0.15
|
|
|
|
$1.04
|
|
|
$0.61
|
Funds From
Operations and Core Funds From Operations
|
Financial
Supplement
|
Unaudited and in
Thousands, Except Per Share Data
|
Second Quarter
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
Reconciliation of
Net Income to Funds From Operations (FFO)
|
|
|
30-Jun-20
|
|
|
31-Mar-20
|
|
|
31-Dec-19
|
|
|
30-Sep-19
|
|
|
30-Jun-19
|
|
|
|
30-Jun-20
|
|
|
30-Jun-19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Available to Common Stockholders
|
|
|
$53,676
|
|
|
$202,859
|
|
|
$315,577
|
|
|
$49,827
|
|
|
$31,738
|
|
|
|
$256,535
|
|
|
$127,607
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interest operating partnership
|
|
|
1,400
|
|
|
7,800
|
|
|
13,100
|
|
|
2,300
|
|
|
1,400
|
|
|
|
9,200
|
|
|
5,700
|
Real estate related
depreciation & amortization (1)
|
|
|
342,334
|
|
|
286,517
|
|
|
271,371
|
|
|
283,090
|
|
|
286,915
|
|
|
|
628,851
|
|
|
594,779
|
Unconsolidated JV
real estate related depreciation & amortization
|
|
|
17,123
|
|
|
19,923
|
|
|
21,631
|
|
|
13,612
|
|
|
13,623
|
|
|
|
37,046
|
|
|
17,474
|
(Gain) on real estate
transactions
|
|
|
-
|
|
|
(304,801)
|
|
|
(267,651)
|
|
|
-
|
|
|
-
|
|
|
|
(304,801)
|
|
|
-
|
Impairment of
investments in real estate
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
5,351
|
Funds From
Operations
|
|
|
$414,533
|
|
|
$212,298
|
|
|
$354,028
|
|
|
$348,829
|
|
|
$333,676
|
|
|
|
$626,831
|
|
|
$750,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds From
Operations - diluted
|
|
|
$414,533
|
|
|
$212,298
|
|
|
$354,028
|
|
|
$348,829
|
|
|
$333,676
|
|
|
|
$626,831
|
|
|
$750,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares and units outstanding - basic
|
|
|
275,545
|
|
|
230,443
|
|
|
217,391
|
|
|
217,375
|
|
|
217,346
|
|
|
|
252,995
|
|
|
217,194
|
Weighted-average
shares and units outstanding - diluted (2)
|
|
|
278,719
|
|
|
232,754
|
|
|
218,901
|
|
|
218,756
|
|
|
218,497
|
|
|
|
255,704
|
|
|
218,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds From
Operations per share - basic
|
|
|
$1.50
|
|
|
$0.92
|
|
|
$1.63
|
|
|
$1.60
|
|
|
$1.54
|
|
|
|
$2.48
|
|
|
$3.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds From
Operations per share - diluted (2)
|
|
|
$1.49
|
|
|
$0.91
|
|
|
$1.62
|
|
|
$1.59
|
|
|
$1.53
|
|
|
|
$2.45
|
|
|
$3.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
Reconciliation of
FFO to Core FFO
|
|
|
30-Jun-20
|
|
|
31-Mar-20
|
|
|
31-Dec-19
|
|
|
30-Sep-19
|
|
|
30-Jun-19
|
|
|
|
30-Jun-20
|
|
|
30-Jun-19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds From
Operations - diluted
|
|
|
$414,533
|
|
|
$212,298
|
|
|
$354,028
|
|
|
$348,829
|
|
|
$333,676
|
|
|
|
$626,831
|
|
|
$750,911
|
Termination fees and
other non-core revenues (3)
|
|
|
(21,908)
|
|
|
(2,425)
|
|
|
(5,634)
|
|
|
(16,792)
|
|
|
(16,826)
|
|
|
|
(24,333)
|
|
|
(31,271)
|
Transaction and
integration expenses
|
|
|
15,618
|
|
|
56,801
|
|
|
17,106
|
|
|
4,115
|
|
|
4,210
|
|
|
|
72,419
|
|
|
6,704
|
Loss from early
extinguishment of debt
|
|
|
-
|
|
|
632
|
|
|
-
|
|
|
5,366
|
|
|
20,905
|
|
|
|
632
|
|
|
33,791
|
Issuance costs
associated with redeemed preferred stock
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
11,760
|
|
|
|
-
|
|
|
11,760
|
Severance, equity
acceleration, and legal expenses (4)
|
|
|
3,642
|
|
|
1,272
|
|
|
1,130
|
|
|
123
|
|
|
665
|
|
|
|
4,914
|
|
|
2,148
|
(Gain) / Loss on FX
revaluation
|
|
|
17,526
|
|
|
81,288
|
|
|
(10,422)
|
|
|
23,136
|
|
|
(4,251)
|
|
|
|
98,814
|
|
|
5,353
|
(Gain) on
contribution to unconsolidated JV, net of related tax
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
(58,497)
|
Other non-core
expense adjustments
|
|
|
22
|
|
|
5,509
|
|
|
(1,511)
|
|
|
92
|
|
|
7,115
|
|
|
|
5,531
|
|
|
12,037
|
Core Funds From
Operations - diluted
|
|
|
$429,433
|
|
|
$355,375
|
|
|
$354,697
|
|
|
$364,869
|
|
|
$357,254
|
|
|
|
$784,808
|
|
|
$732,936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares and units outstanding - diluted (2)
|
|
|
278,719
|
|
|
232,754
|
|
|
218,901
|
|
|
218,756
|
|
|
218,497
|
|
|
|
255,704
|
|
|
218,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Funds From
Operations per share - diluted (2)
|
|
|
$1.54
|
|
|
$1.53
|
|
|
$1.62
|
|
|
$1.67
|
|
|
$1.64
|
|
|
|
$3.07
|
|
|
$3.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Real Estate
Related Depreciation & Amortization
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
30-Jun-20
|
|
|
31-Mar-20
|
|
|
31-Dec-19
|
|
|
30-Sep-19
|
|
|
30-Jun-19
|
|
|
|
30-Jun-20
|
|
|
30-Jun-19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation &
amortization per income statement
|
|
|
$349,165
|
|
|
$291,457
|
|
|
$275,008
|
|
|
$286,718
|
|
|
$290,562
|
|
|
|
640,622
|
|
|
602,048
|
Non-real estate
depreciation
|
|
|
(6,831)
|
|
|
(4,940)
|
|
|
(3,637)
|
|
|
(3,628)
|
|
|
(3,647)
|
|
|
|
(11,771)
|
|
|
(7,269)
|
Real Estate Related
Depreciation & Amortization
|
|
|
$342,334
|
|
|
$286,517
|
|
|
$271,371
|
|
|
$283,090
|
|
|
$286,915
|
|
|
|
$628,851
|
|
|
$594,779
|
|
|
(2)
|
For all periods
presented, we have excluded the effect of dilutive series C, series
G, series H, series I, series J, series K and series L preferred
stock, as applicable, that may be converted into common stock upon
the occurrence of specified change in control transactions as
described in the articles supplementary governing the series C,
series G, series H, series I, series J, series K and series L
preferred stock, as applicable, which we consider highly
improbable. See above for calculations of diluted FFO and the share
count detail section that follows the reconciliation of core FFO to
AFFO for calculations of weighted average common stock and units
outstanding. For definitions and discussion of FFO and core
FFO, see the definition section.
|
(3)
|
Includes lease
termination fees and certain other adjustments that are not core to
our business.
|
(4)
|
Relates to severance
and other charges related to the departure of company executives
and integration-related severance.
|
Adjusted Funds
From Operations (AFFO)
|
Financial
Supplement
|
Unaudited and in
Thousands, Except Per Share Data
|
Second Quarter
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
Reconciliation of Core FFO to
AFFO
|
|
|
30-Jun-20
|
|
|
31-Mar-20
|
|
|
31-Dec-19
|
|
|
30-Sep-19
|
|
|
30-Jun-19
|
|
|
|
30-Jun-20
|
|
|
30-Jun-19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO
available to common stockholders and unitholders
|
|
|
$429,433
|
|
|
$355,375
|
|
|
$354,697
|
|
|
$364,869
|
|
|
$357,254
|
|
|
|
$784,808
|
|
|
$732,936
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-real estate
depreciation
|
|
|
6,831
|
|
|
4,940
|
|
|
3,637
|
|
|
3,628
|
|
|
3,647
|
|
|
|
11,771
|
|
|
7,269
|
Amortization of
deferred financing costs
|
|
|
3,661
|
|
|
4,260
|
|
|
3,064
|
|
|
2,900
|
|
|
2,905
|
|
|
|
7,921
|
|
|
7,398
|
Amortization of debt
discount/premium
|
|
|
1,011
|
|
|
943
|
|
|
612
|
|
|
466
|
|
|
515
|
|
|
|
1,954
|
|
|
1,275
|
Non-cash stock-based
compensation expense
|
|
|
15,060
|
|
|
12,153
|
|
|
8,937
|
|
|
8,906
|
|
|
9,468
|
|
|
|
27,213
|
|
|
17,060
|
Straight-line rental
revenue
|
|
|
(10,928)
|
|
|
(15,404)
|
|
|
(13,994)
|
|
|
(12,764)
|
|
|
(13,033)
|
|
|
|
(26,332)
|
|
|
(29,013)
|
Straight-line rental
expense
|
|
|
7,373
|
|
|
1,460
|
|
|
(342)
|
|
|
(209)
|
|
|
318
|
|
|
|
8,833
|
|
|
1,552
|
Above- and
below-market rent amortization
|
|
|
3,794
|
|
|
3,294
|
|
|
4,109
|
|
|
2,824
|
|
|
3,954
|
|
|
|
7,088
|
|
|
10,163
|
Deferred tax
expense
|
|
|
(150)
|
|
|
(792)
|
|
|
(998)
|
|
|
(1,418)
|
|
|
(979)
|
|
|
|
(942)
|
|
|
(16,376)
|
Leasing compensation
& internal lease commissions (1)
|
|
|
1,739
|
|
|
2,793
|
|
|
3,646
|
|
|
3,254
|
|
|
4,025
|
|
|
|
4,532
|
|
|
7,606
|
Recurring capital
expenditures (2)
|
|
|
(38,796)
|
|
|
(34,677)
|
|
|
(54,731)
|
|
|
(48,408)
|
|
|
(39,515)
|
|
|
|
(73,473)
|
|
|
(77,574)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO available to
common stockholders and unitholders (3)
|
|
|
$419,028
|
|
|
$334,345
|
|
|
$308,637
|
|
|
$324,048
|
|
|
$328,559
|
|
|
|
$753,373
|
|
|
$662,296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares and units outstanding - basic
|
|
|
275,545
|
|
|
230,443
|
|
|
217,391
|
|
|
217,375
|
|
|
217,346
|
|
|
|
252,995
|
|
|
217,194
|
Weighted-average
shares and units outstanding - diluted (4)
|
|
|
278,719
|
|
|
232,754
|
|
|
218,901
|
|
|
218,756
|
|
|
218,497
|
|
|
|
255,704
|
|
|
218,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per share -
diluted (4)
|
|
|
$1.50
|
|
|
$1.44
|
|
|
$1.41
|
|
|
$1.48
|
|
|
$1.50
|
|
|
|
$2.95
|
|
|
$3.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per
share and common unit
|
|
|
$1.12
|
|
|
$1.12
|
|
|
$1.08
|
|
|
$1.08
|
|
|
$1.08
|
|
|
|
$2.24
|
|
|
$2.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted AFFO Payout
Ratio
|
|
|
74.5%
|
|
|
78.0%
|
|
|
76.6%
|
|
|
72.9%
|
|
|
71.8%
|
|
|
|
76.0%
|
|
|
71.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
Share Count
Detail
|
|
|
30-Jun-20
|
|
|
31-Mar-20
|
|
|
31-Dec-19
|
|
|
30-Sep-19
|
|
|
30-Jun-19
|
|
|
|
30-Jun-20
|
|
|
30-Jun-19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Common Stock and Units Outstanding
|
|
|
275,545
|
|
|
230,443
|
|
|
217,391
|
|
|
217,375
|
|
|
217,346
|
|
|
|
252,995
|
|
|
217,194
|
Add: Effect of
dilutive securities
|
|
|
3,174
|
|
|
2,311
|
|
|
1,510
|
|
|
1,381
|
|
|
1,151
|
|
|
|
2,709
|
|
|
846
|
Weighted Avg. Common
Stock and Units Outstanding - diluted
|
|
|
278,719
|
|
|
232,754
|
|
|
218,901
|
|
|
218,756
|
|
|
218,497
|
|
|
|
255,704
|
|
|
218,040
|
|
|
(1)
|
The company adopted
ASC 842 in the first quarter of 2019.
|
(2)
|
Recurring capital
expenditures represent non-incremental building improvements
required to maintain current revenues, including second-generation
tenant improvements and external leasing commissions. Recurring
capital expenditures do not include acquisition costs contemplated
when underwriting the purchase of a building, costs which are
incurred to bring a building up to Digital Realty's operating
standards, or internal leasing commissions.
|
(3)
|
For a definition and
discussion of AFFO, see the definitions section. For a
reconciliation of net income available to common stockholders to
FFO and core FFO, see above.
|
(4)
|
For all periods
presented, we have excluded the effect of dilutive series C, series
G, series H, series I, series J, series K and series L preferred
stock, as applicable, that may be converted into common stock upon
the occurrence of specified change in control transactions as
described in the articles supplementary governing the series C,
series G, series H, series I, series J, series K and series
L preferred stock, as applicable, which we consider highly
improbable. See above for calculations of diluted FFO available to
common stockholders and unitholders and for calculations of
weighted average common stock and units outstanding.
|
Consolidated
Balance Sheets
|
Financial
Supplement
|
Unaudited and in
Thousands, Except Share and Per Share Data
|
Second Quarter
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-Jun-20
|
|
31-March-20
|
|
31-Dec-19
|
|
30-Sep-19
|
|
30-Jun-19
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in real
estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real
estate
|
|
|
$20,843,273
|
|
|
$20,477,290
|
|
|
$16,886,592
|
|
|
$16,407,080
|
|
|
$17,324,416
|
Construction in
progress
|
|
|
2,514,324
|
|
|
2,204,869
|
|
|
1,732,555
|
|
|
1,647,130
|
|
|
1,685,056
|
Land held for future
development
|
|
|
175,209
|
|
|
137,447
|
|
|
147,597
|
|
|
150,265
|
|
|
152,368
|
Investments in real
estate
|
|
|
$23,532,806
|
|
|
$22,819,606
|
|
|
$18,766,744
|
|
|
$18,204,475
|
|
|
$19,161,840
|
Accumulated
depreciation and amortization
|
|
|
(4,945,534)
|
|
|
(4,694,713)
|
|
|
(4,536,169)
|
|
|
(4,298,629)
|
|
|
(4,312,357)
|
Net Investments in
Properties
|
|
|
$18,587,272
|
|
|
$18,124,893
|
|
|
$14,230,575
|
|
|
$13,905,846
|
|
|
$14,849,483
|
Investment in
unconsolidated joint ventures
|
|
|
1,033,235
|
|
|
1,064,009
|
|
|
1,287,109
|
|
|
1,035,861
|
|
|
979,350
|
Net Investments in
Real Estate
|
|
|
$19,620,507
|
|
|
$19,188,902
|
|
|
$15,517,684
|
|
|
$14,941,707
|
|
|
$15,828,833
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$505,174
|
|
|
$246,480
|
|
|
$89,817
|
|
|
$7,190
|
|
|
$33,536
|
Accounts and other
receivables (1)
|
|
|
542,750
|
|
|
527,699
|
|
|
305,501
|
|
|
304,712
|
|
|
320,938
|
Deferred
rent
|
|
|
496,684
|
|
|
484,179
|
|
|
478,744
|
|
|
471,516
|
|
|
491,486
|
Customer relationship
value, deferred leasing costs & other intangibles,
net
|
|
|
3,128,140
|
|
|
3,500,588
|
|
|
2,195,324
|
|
|
2,245,017
|
|
|
2,499,564
|
Acquired above-market
leases, net
|
|
|
57,535
|
|
|
66,033
|
|
|
74,815
|
|
|
84,315
|
|
|
94,474
|
Goodwill
|
|
|
7,791,522
|
|
|
7,466,046
|
|
|
3,363,070
|
|
|
3,338,168
|
|
|
3,353,538
|
Assets associated
with real estate held for sale
|
|
|
10,981
|
|
|
—
|
|
|
229,934
|
|
|
967,527
|
|
|
—
|
Operating lease
right-of-use assets (2)
|
|
|
1,375,427
|
|
|
1,364,621
|
|
|
628,681
|
|
|
634,085
|
|
|
648,952
|
Other
assets
|
|
|
333,916
|
|
|
268,752
|
|
|
184,561
|
|
|
178,528
|
|
|
158,770
|
Total
Assets
|
|
|
$33,862,636
|
|
|
$33,113,300
|
|
|
$23,068,131
|
|
|
$23,172,765
|
|
|
$23,430,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global unsecured
revolving credit facilities
|
|
|
$64,492
|
|
|
$603,101
|
|
|
$234,105
|
|
|
$1,833,512
|
|
|
$1,417,675
|
Unsecured term
loans
|
|
|
799,550
|
|
|
771,425
|
|
|
810,219
|
|
|
796,232
|
|
|
807,922
|
Unsecured senior
notes, net of discount
|
|
|
11,268,753
|
|
|
10,637,006
|
|
|
8,973,190
|
|
|
8,189,138
|
|
|
8,511,656
|
Secured debt, net of
premiums
|
|
|
238,826
|
|
|
239,800
|
|
|
104,934
|
|
|
105,153
|
|
|
105,325
|
Operating lease
liabilities (2)
|
|
|
1,451,152
|
|
|
1,431,292
|
|
|
693,539
|
|
|
699,381
|
|
|
714,256
|
Accounts payable and
other accrued liabilities
|
|
|
1,828,288
|
|
|
1,732,318
|
|
|
1,007,761
|
|
|
938,740
|
|
|
984,812
|
Accrued dividends and
distributions
|
|
|
—
|
|
|
—
|
|
|
234,620
|
|
|
—
|
|
|
—
|
Acquired below-market
leases
|
|
|
139,851
|
|
|
145,208
|
|
|
148,774
|
|
|
153,422
|
|
|
183,832
|
Security deposits and
prepaid rent
|
|
|
348,253
|
|
|
336,583
|
|
|
208,724
|
|
|
203,708
|
|
|
213,549
|
Liabilities
associated with assets held for sale
|
|
|
238
|
|
|
—
|
|
|
2,700
|
|
|
23,534
|
|
|
—
|
Total
Liabilities
|
|
|
$16,139,403
|
|
|
$15,896,733
|
|
|
$12,418,566
|
|
|
$12,942,820
|
|
|
$12,939,027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
non-controlling interests - operating partnership
|
|
|
40,584
|
|
|
40,027
|
|
|
41,465
|
|
|
19,090
|
|
|
17,344
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock: $0.01 par value per share, 110,000,000 shares
authorized:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series C Cumulative
Redeemable Perpetual Preferred Stock (3)
|
|
|
$219,250
|
|
|
$219,250
|
|
|
$219,250
|
|
|
$219,250
|
|
|
$219,250
|
Series G Cumulative
Redeemable Preferred Stock (4)
|
|
|
241,468
|
|
|
241,468
|
|
|
241,468
|
|
|
241,468
|
|
|
241,468
|
Series I Cumulative
Redeemable Preferred Stock (5)
|
|
|
242,012
|
|
|
242,012
|
|
|
242,012
|
|
|
242,012
|
|
|
242,012
|
Series J Cumulative
Redeemable Preferred Stock (6)
|
|
|
193,540
|
|
|
193,540
|
|
|
193,540
|
|
|
193,540
|
|
|
193,540
|
Series K Cumulative
Redeemable Preferred Stock (7)
|
|
|
203,264
|
|
|
203,264
|
|
|
203,264
|
|
|
203,264
|
|
|
203,264
|
Series L Cumulative
Redeemable Preferred Stock (8)
|
|
|
334,886
|
|
|
334,886
|
|
|
334,886
|
|
|
—
|
|
|
—
|
Common Stock: $0.01
par value per share, 392,000,000 shares authorized
(9)
|
|
|
2,670
|
|
|
2,622
|
|
|
2,073
|
|
|
2,069
|
|
|
2,067
|
Additional paid-in
capital
|
|
|
19,292,311
|
|
|
18,606,766
|
|
|
11,577,320
|
|
|
11,540,980
|
|
|
11,511,519
|
Dividends in excess
of earnings
|
|
|
(3,386,525)
|
|
|
(3,139,350)
|
|
|
(3,046,579)
|
|
|
(3,136,668)
|
|
|
(2,961,307)
|
Accumulated other
comprehensive (loss), net
|
|
|
(358,349)
|
|
|
(444,222)
|
|
|
(87,922)
|
|
|
(68,625)
|
|
|
(89,588)
|
Total Stockholders'
Equity
|
|
|
$16,984,527
|
|
|
$16,460,236
|
|
|
$9,879,312
|
|
|
$9,437,290
|
|
|
$9,562,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
Interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interest in operating partnership
|
|
|
$633,831
|
|
|
$656,266
|
|
|
$708,163
|
|
|
$732,314
|
|
|
$756,050
|
Noncontrolling
interest in consolidated joint ventures
|
|
|
64,291
|
|
|
60,038
|
|
|
20,625
|
|
|
41,251
|
|
|
155,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Noncontrolling
Interests
|
|
|
$698,122
|
|
|
$716,304
|
|
|
$728,788
|
|
|
$773,565
|
|
|
$911,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Equity
|
|
|
$17,682,649
|
|
|
$17,176,540
|
|
|
$10,608,100
|
|
|
$10,210,855
|
|
|
$10,473,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
and Equity
|
|
|
$33,862,636
|
|
|
$33,113,300
|
|
|
$23,068,131
|
|
|
$23,172,765
|
|
|
$23,430,091
|
|
|
(1)
|
Net of allowance for
doubtful accounts of $18,264 and $13,753 as of June 30, 2020 and
December 31, 2019, respectively.
|
(2)
|
Adoption of the new
lease accounting standard required that we adjust the consolidated
balance sheet to include the recognition of additional right-of-use
assets and lease liabilities for operating leases. See our
quarterly report on Form 10–Q filed on May 10, 2019 for
additional information.
|
(3)
|
Series C
Cumulative Redeemable Perpetual Preferred Stock, 6.625%, $201,250
and $201,250 liquidation preference, respectively ($25.00 per
share), 8,050,000 and 8,050,000 shares issued and outstanding as of
June 30, 2020 and December 31, 2019, respectively.
|
(4)
|
Series G
Cumulative Redeemable Preferred Stock, 5.875%, $250,000 and
$250,000 liquidation preference, respectively ($25.00 per share),
10,000,000 and 10,000,000 shares issued and outstanding as of June
30, 2020 and December 31, 2019, respectively.
|
(5)
|
Series I
Cumulative Redeemable Preferred Stock, 6.350%, $250,000 and
$250,000 liquidation preference, respectively ($25.00 per share),
10,000,000 and 10,000,000 shares issued and outstanding as of June
30, 2020 and December 31, 2019, respectively.
|
(6)
|
Series J
Cumulative Redeemable Preferred Stock, 5.250%, $200,000 and
$200,000 liquidation preference, respectively ($25.00 per share),
8,000,000 and 8,000,000 shares issued and outstanding as of June
30, 2020 and December 31, 2019, respectively.
|
(7)
|
Series K
Cumulative Redeemable Preferred Stock, 5.850%, $210,000 and
$210,000 liquidation preference, respectively ($25.00 per share),
8,400,000 and 8,400,000 shares issued and outstanding as of
June 30, 2020 and December 31, 2019, respectively.
|
(8)
|
Series L
Cumulative Redeemable Preferred Stock, 5.200%, $345,000 and
$345,000 liquidation preference, respectively ($25.00 per share),
13,800,000 and 13,800,000 shares issued and outstanding as of
June 30, 2020 and December 31, 2019, respectively.
|
(9)
|
Common Stock:
268,399,073 and 208,900,758 shares issued and outstanding as of
June 30, 2020 and December 31, 2019, respectively.
|
Reconciliation of
Earnings Before Interest, Taxes, Depreciation & Amortization
and Financial Ratios
|
Financial
Supplement
|
Unaudited and
Dollars in Thousands
|
Second Quarter
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Reconciliation of
Earnings Before Interest, Taxes, Depreciation & Amortization
(EBITDA) (1)
|
|
|
30-Jun-20
|
|
|
31-Mar-20
|
|
|
31-Dec-19
|
|
|
30-Sep-19
|
|
|
30-Jun-19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Available
to Common Stockholders
|
|
|
$53,676
|
|
|
$202,859
|
|
|
$315,577
|
|
|
$49,827
|
|
|
$31,738
|
Interest
|
|
|
79,874
|
|
|
85,800
|
|
|
80,880
|
|
|
84,574
|
|
|
86,051
|
Loss from early
extinguishment of debt
|
|
|
—
|
|
|
632
|
|
|
—
|
|
|
5,366
|
|
|
20,905
|
Income tax (benefit)
expense
|
|
|
11,490
|
|
|
7,182
|
|
|
(1,731)
|
|
|
4,826
|
|
|
4,634
|
Depreciation &
amortization
|
|
|
349,165
|
|
|
291,457
|
|
|
275,008
|
|
|
286,718
|
|
|
290,562
|
EBITDA
|
|
|
$494,205
|
|
|
$587,930
|
|
|
$669,734
|
|
|
$431,311
|
|
|
$433,890
|
Unconsolidated JV
real estate related depreciation & amortization
|
|
|
17,123
|
|
|
19,923
|
|
|
21,631
|
|
|
13,612
|
|
|
13,623
|
Unconsolidated JV
interest expense and tax expense
|
|
|
9,203
|
|
|
9,944
|
|
|
13,553
|
|
|
10,816
|
|
|
10,277
|
Severance, equity
acceleration, and legal expenses
|
|
|
3,642
|
|
|
1,272
|
|
|
1,130
|
|
|
123
|
|
|
665
|
Transaction and
integration expenses
|
|
|
15,618
|
|
|
56,801
|
|
|
17,106
|
|
|
4,115
|
|
|
4,210
|
(Gain) on sale /
deconsolidation
|
|
|
—
|
|
|
(304,801)
|
|
|
(267,651)
|
|
|
—
|
|
|
—
|
Other non-core
adjustments, net
|
|
|
(3,404)
|
|
|
85,185
|
|
|
(13,886)
|
|
|
6,436
|
|
|
(13,476)
|
Non-controlling
interests
|
|
|
1,147
|
|
|
4,684
|
|
|
13,042
|
|
|
1,077
|
|
|
1,156
|
Preferred stock
dividends, including undeclared dividends
|
|
|
21,155
|
|
|
21,155
|
|
|
20,707
|
|
|
16,670
|
|
|
16,670
|
Issuance costs
associated with redeemed preferred stock
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,760
|
Adjusted
EBITDA
|
|
|
$558,690
|
|
|
$482,093
|
|
|
$475,366
|
|
|
$484,160
|
|
|
$478,775
|
|
(1) For
definitions and discussion of EBITDA and Adjusted EBITDA, see the
definitions section.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Financial
Ratios
|
|
|
30-Jun-20
|
|
|
31-Mar-20
|
|
|
31-Dec-19
|
|
|
30-Sep-19
|
|
|
30-Jun-19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP interest
expense
|
|
|
$79,874
|
|
|
$85,800
|
|
|
$80,880
|
|
|
$84,574
|
|
|
$86,051
|
Capitalized
interest
|
|
|
13,133
|
|
|
10,480
|
|
|
9,877
|
|
|
9,936
|
|
|
9,493
|
Change in accrued
interest and other non-cash amounts
|
|
|
(38,478)
|
|
|
24,321
|
|
|
(30,564)
|
|
|
8,490
|
|
|
(20,656)
|
Cash Interest
Expense (2)
|
|
|
$54,529
|
|
|
$120,601
|
|
|
$60,193
|
|
|
$103,000
|
|
|
$74,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scheduled debt
principal payments
|
|
|
57
|
|
|
125
|
|
|
210
|
|
|
163
|
|
|
159
|
Preferred
dividends
|
|
|
21,155
|
|
|
21,155
|
|
|
20,707
|
|
|
16,670
|
|
|
16,670
|
Total Fixed Charges
(3)
|
|
|
$114,219
|
|
|
$117,560
|
|
|
$111,674
|
|
|
$111,343
|
|
|
$112,373
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest coverage
ratio (4)
|
|
|
5.6x
|
|
|
4.6x
|
|
|
4.7x
|
|
|
4.7x
|
|
|
4.6x
|
Cash interest
coverage ratio (5)
|
|
|
9.1x
|
|
|
3.7x
|
|
|
6.7x
|
|
|
4.3x
|
|
|
5.8x
|
Fixed charge coverage
ratio (6)
|
|
|
4.6x
|
|
|
3.8x
|
|
|
3.9x
|
|
|
4.0x
|
|
|
4.0x
|
Cash fixed charge
coverage ratio (7)
|
|
|
6.8x
|
|
|
3.2x
|
|
|
5.2x
|
|
|
3.8x
|
|
|
4.8x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt to total
enterprise value (8) (9)
|
|
|
23.3%
|
|
|
23.8%
|
|
|
26.9%
|
|
|
27.1%
|
|
|
28.8%
|
Debt plus preferred
stock to total enterprise value (10)
|
|
|
26.0%
|
|
|
26.6%
|
|
|
30.8%
|
|
|
29.9%
|
|
|
31.8%
|
Pre-tax income to
interest expense (11)
|
|
|
2.0x
|
|
|
3.7x
|
|
|
5.3x
|
|
|
1.8x
|
|
|
1.7x
|
Net Debt to Adjusted
EBITDA (12)
|
|
|
5.7x
|
|
|
6.6x
|
|
|
5.7x
|
|
|
6.0x
|
|
|
6.0x
|
|
|
(2)
|
Cash interest expense
is interest expense less amortization of debt discount and deferred
financing fees and includes interest that we capitalized. We
consider cash interest expense to be a useful measure of interest
as it excludes non cash-based interest expense.
|
(3)
|
Fixed charges consist
of GAAP interest expense, capitalized interest, scheduled debt
principal payments and preferred dividends.
|
(4)
|
Adjusted EBITDA
divided by GAAP interest expense plus capitalized interest
(including our pro rata share of unconsolidated joint venture
interest expense).
|
(5)
|
Adjusted EBITDA
divided by cash interest expense (including our pro rata share of
unconsolidated joint venture interest expense).
|
(6)
|
Adjusted EBITDA
divided by fixed charges (including our pro rata share of
unconsolidated joint venture fixed charges).
|
(7)
|
Adjusted EBITDA
divided by the sum of cash interest expense, scheduled debt
principal payments and preferred dividends (including our pro rata
share of unconsolidated joint venture fixed charges).
|
(8)
|
Mortgage debt and
other loans divided by market value of equity plus debt plus
preferred stock.
|
(9)
|
Total enterprise
value defined as market value of common equity plus debt plus
preferred stock. See page 7 for definition of market value of
common equity.
|
(10)
|
Same as (8), except
numerator includes preferred stock.
|
(11)
|
Calculated as net
income plus interest expense divided by GAAP interest
expense.
|
(12)
|
Calculated as total
debt at balance sheet carrying value (see page 6), plus
capital lease obligations, plus Digital Realty's share of joint
venture debt, less cash and cash equivalents divided by the product
of Adjusted EBITDA (inclusive of our share of joint venture
EBITDA), multiplied by four.
|
Management
Statements on Non-GAAP Measures
|
|
|
Financial
Supplement
|
Unaudited
|
|
|
Second Quarter
2020
|
Definitions
Funds From Operations (FFO):
We calculate funds from operations, or FFO, in accordance with
the standards established by the National Association of Real
Estate Investment Trusts, or Nareit, in the Nareit Funds From
Operations White Paper - 2018 Restatement. FFO represents net
income (loss) (computed in accordance with GAAP), excluding gains
(or losses) from real estate transactions, impairment of investment
in real estate, real estate related depreciation and amortization
(excluding amortization of deferred financing costs),
unconsolidated JV real estate related depreciation &
amortization, non-controlling interests in operating partnership
and after adjustments for unconsolidated partnerships and joint
ventures. Management uses FFO as a supplemental performance measure
because, in excluding real estate related depreciation and
amortization and gains and losses from property dispositions and
after adjustments for unconsolidated partnerships and joint
ventures, it provides a performance measure that, when
compared year over year, captures trends in occupancy
rates, rental rates and operating costs. We also believe that, as a
widely recognized measure of the performance of REITs, FFO will be
used by investors as a basis to compare our operating performance
with that of other REITs. However, because FFO excludes
depreciation and amortization and captures neither the changes in
the value of our data centers that result from use or market
conditions, nor the level of capital expenditures and capitalized
leasing commissions necessary to maintain the operating performance
of our data centers, all of which have real economic effect and
could materially impact our financial condition and results from
operations, the utility of FFO as a measure of our performance is
limited. Other REITs may not calculate FFO in accordance with the
NAREIT definition and, accordingly, our FFO may not be comparable
to other REITs' FFO. FFO should be considered only as a supplement
to net income computed in accordance with GAAP as a measure of our
performance.
Core Funds from Operations (Core FFO):
We present core funds from operations, or core FFO, as a
supplemental operating measure because, in excluding certain items
that do not reflect core revenue or expense streams, it provides a
performance measure that, when compared year over year,
captures trends in our core business operating performance. We
calculate core FFO by adding to or subtracting from FFO
(i) termination fees and other non-core revenues,
(ii) transaction and integration expenses, (iii) loss
from early extinguishment of debt, (iv) issuance costs
associated with redeemed preferred stock, (v) severance,
equity acceleration, and legal expenses, (vi) gain/loss on FX
revaluation, (vii) gain on contribution to unconsolidated
joint venture, net of related tax, and (viii) other non-core
expense adjustments. Because certain of these adjustments have a
real economic impact on our financial condition and results from
operations, the utility of core FFO as a measure of our performance
is limited. Other REITs may calculate core FFO differently than we
do and accordingly, our core FFO may not be comparable to other
REITs' core FFO. Core FFO should be considered only as a supplement
to net income computed in accordance with GAAP as a measure of our
performance.
Adjusted Funds from Operations (AFFO):
We present adjusted funds from operations, or AFFO, as a
supplemental operating measure because, when compared year
over year, it assesses our ability to fund dividend and
distribution requirements from our operating activities. We also
believe that, as a widely recognized measure of the operations of
REITs, AFFO will be used by investors as a basis to assess our
ability to fund dividend payments in comparison to other REITs,
including on a per share and unit basis. We calculate AFFO by
adding to or subtracting from core FFO (i) non-real estate
depreciation, (ii) amortization of deferred financing costs,
(iii) amortization of debt discount/premium,
(iv) non-cash stock-based compensation expense,
(v) straight-line rental revenue, (vi) straight-line
rental expense, (vii) above- and below-market rent
amortization, (viii) deferred tax expense, (ix) leasing
compensation and internal lease commissions, and (x) recurring
capital expenditures. Other REITs may calculate AFFO differently
than we do and accordingly, our AFFO may not be comparable to other
REITs' AFFO. AFFO should be considered only as a supplement to net
income computed in accordance with GAAP as a measure of our
performance.
EBITDA and Adjusted EBITDA:
We believe that earnings before interest, loss from early
extinguishment of debt, income taxes, and depreciation and
amortization, or EBITDA, and Adjusted EBITDA (as defined below),
are useful supplemental performance measures because they allow
investors to view our performance without the impact of non-cash
depreciation and amortization or the cost of debt and, with respect
to Adjusted EBITDA, unconsolidated joint venture real estate
related depreciation & amortization, unconsolidated joint
venture interest expense and tax, severance, equity acceleration,
and legal expenses, transaction and integration expenses, gain on
sale / deconsolidation, other non-core adjustments, net,
non-controlling interests, preferred stock dividends, including
undeclared dividends, and issuance costs associated with redeemed
preferred stock. Adjusted EBITDA is EBITDA excluding unconsolidated
joint venture real estate related depreciation &
amortization, unconsolidated joint venture interest expense and
tax, severance, equity acceleration, and legal expenses,
transaction and integration expenses, gain on sale /
deconsolidation, other non-core adjustments, net, non-controlling
interests, preferred stock dividends, including undeclared
dividends, and issuance costs associated with redeemed preferred
stock. In addition, we believe EBITDA and Adjusted EBITDA are
frequently used by securities analysts, investors and other
interested parties in the evaluation of REITs. Because EBITDA and
Adjusted EBITDA are calculated before recurring cash charges
including interest expense and income taxes, exclude capitalized
costs, such as leasing commissions, and are not adjusted for
capital expenditures or other recurring cash requirements of our
business, their utility as a measure of our performance is limited.
Other REITs may calculate EBITDA and Adjusted EBITDA differently
than we do and, accordingly, our EBITDA and Adjusted EBITDA may not
be comparable to other REITs' EBITDA and Adjusted EBITDA.
Accordingly, EBITDA and Adjusted EBITDA should be considered only
as supplements to net income computed in accordance with GAAP as a
measure of our financial performance.
Net Operating Income (NOI) and Cash NOI:
Net operating income, or NOI, represents rental revenue, tenant
reimbursement revenue and interconnection revenue less utilities
expense, rental property operating expenses, property taxes and
insurance expenses (as reflected in the statement of operations).
NOI is commonly used by stockholders, company management and
industry analysts as a measurement of operating performance of the
company's rental portfolio. Cash NOI is NOI less straight-line
rents and above- and below-market rent amortization. Cash NOI is
commonly used by stockholders, company management and industry
analysts as a measure of property operating performance on a cash
basis. However, because NOI and cash NOI exclude depreciation and
amortization and capture neither the changes in the value of our
data centers that result from use or market conditions, nor the
level of capital expenditures and capitalized leasing commissions
necessary to maintain the operating performance of our data
centers, all of which have real economic effect and could
materially impact our results from operations, the utility of NOI
and cash NOI as measures of our performance is limited. Other REITs
may calculate NOI and cash NOI differently than we do and,
accordingly, our NOI and cash NOI may not be comparable to other
REITs' NOI and cash NOI. NOI and cash NOI should be considered only
as supplements to net income computed in accordance with GAAP as
measures of our performance.
Additional Definitions
Net debt-to-Adjusted EBITDA ratio is calculated using total debt
at balance sheet carrying value, plus capital lease obligations,
plus our share of JV debt, less unrestricted cash and cash
equivalents divided by the product of Adjusted EBITDA (inclusive of
our share of JV EBITDA) multiplied by four.
Debt-plus-preferred-to-total enterprise value is mortgage debt
and other loans plus preferred stock divided by mortgage debt and
other loans plus the liquidation value of preferred stock and the
market value of outstanding Digital Realty Trust, Inc. common
stock and Digital Realty Trust, L.P. units, assuming the
redemption of Digital Realty Trust, L.P. units for shares of
Digital Realty Trust, Inc. common stock.
Fixed charge coverage ratio is Adjusted EBITDA divided by the
sum of GAAP interest expense, capitalized interest, scheduled debt
principal payments and preferred dividends. For the Quarter Ended
June 30, 2020, GAAP interest expense
was $80 million, capitalized interest was $13 million and scheduled debt principal payments
and preferred dividends was $21
million.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Operating Income (NOI)
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
(in
thousands)
|
|
30-Jun-20
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31-Mar-20
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|
30-Jun-19
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30-Jun-20
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30-Jun-19
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|
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|
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|
|
|
|
|
|
Operating
income
|
|
|
$152,811
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|
|
$100,049
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|
|
$148,972
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|
|
|
$252,861
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|
|
$290,514
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|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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Fee
income
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|
|
(4,353)
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|
|
(2,452)
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|
|
(925)
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|
|
|
(6,805)
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|
|
(2,845)
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Other
income
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|
|
(967)
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|
|
(813)
|
|
|
(486)
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|
|
|
(1,780)
|
|
|
(1,051)
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Depreciation
and amortization
|
|
|
349,165
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|
|
291,457
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|
|
290,562
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|
|
|
640,622
|
|
|
602,048
|
General and
administrative
|
|
|
90,649
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|
|
62,266
|
|
|
52,318
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|
|
|
152,915
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|
|
104,294
|
Severance,
equity acceleration, and legal expenses
|
|
|
3,642
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|
|
1,272
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|
|
665
|
|
|
|
4,914
|
|
|
2,148
|
Transaction
expenses
|
|
|
15,618
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|
|
56,801
|
|
|
4,210
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|
|
|
72,419
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|
|
6,704
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Impairment in
investments in real estate
|
|
|
—
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|
|
—
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|
|
—
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|
|
|
—
|
|
|
5,351
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Other
expenses
|
|
|
22
|
|
|
114
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|
|
7,115
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|
|
|
136
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|
|
12,037
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating
Income
|
|
|
$606,587
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|
|
$508,694
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|
|
$502,431
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|
|
|
$1,115,282
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|
|
$1,019,200
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|
|
|
|
|
|
|
|
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|
|
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|
|
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|
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|
|
|
|
|
|
|
|
|
|
Cash Net
Operating Income (Cash NOI)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating
Income
|
|
|
$606,587
|
|
|
$508,694
|
|
|
$502,431
|
|
|
|
$1,115,282
|
|
|
$1,019,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Straight-line
rental revenue
|
|
|
(10,713)
|
|
|
(13,392)
|
|
|
(14,978)
|
|
|
|
(24,105)
|
|
|
(29,536)
|
Straight-line
rental expense
|
|
|
7,296
|
|
|
1,496
|
|
|
397
|
|
|
|
8,791
|
|
|
1,573
|
Above- and
below-market rent amortization
|
|
|
3,794
|
|
|
3,294
|
|
|
3,954
|
|
|
|
7,087
|
|
|
10,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Net Operating
Income
|
|
|
$606,964
|
|
|
$500,092
|
|
|
$491,804
|
|
|
|
$1,107,055
|
|
|
$1,001,400
|
Forward-Looking
Statements
|
|
|
Financial
Supplement
|
|
|
|
Second Quarter
2020
|
This document contains forward-looking statements within the
meaning of the federal securities laws, which are based on current
expectations, forecasts and assumptions that involve risks and
uncertainties that could cause actual outcomes and results to
differ materially. Such forward-looking statements include
statements relating to: expected physical settlement of the forward
sale agreements and use of proceeds from any such settlement, our
expected investment and expansion activity, our joint ventures,
supply and demand for data center and colocation space, our
acquisition and disposition activity, pricing and net effective
leasing economics, market dynamics and data center fundamentals,
our strategic priorities, rent from leases that have been signed
but have not yet commenced and other contracted rent to be received
in future periods, rental rates on future leases, lag between
signing and commencement, cap rates and yields, investment
activity, the company's FFO, core FFO and net income, 2020 outlook
and underlying assumptions, information related to trends, our
strategy and plans, leasing expectations, weighted average lease
terms, the exercise of lease extensions, lease expirations, debt
maturities, annualized rent at expiration of leases, the effect new
leases and increases in rental rates will have on our rental
revenue, our credit ratings, construction and development activity
and plans, projected construction costs, estimated yields on
investment, expected occupancy, expected square footage and IT load
capacity upon completion of development projects, 2020 backlog NOI,
NAV components, and other forward-looking financial data. Such
statements are based on management's beliefs and assumptions made
based on information currently available to management. Such
statements are subject to risks, uncertainties and assumptions and
are not guarantees of future performance and may be affected by
known and unknown risks, trends, uncertainties and factors that are
beyond our control. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those
anticipated, estimated or projected. Some of the risks and
uncertainties that may cause our actual results, performance or
achievements to differ materially from those expressed or implied
by forward-looking statements include, among others, the
following:
- reduced demand for data centers or decreases in information
technology spending;
- increased competition or available supply of data center
space;
- decreased rental rates, increased operating costs or increased
vacancy rates;
- the suitability of our data centers and data center
infrastructure, delays or disruptions in connectivity or
availability of power, or failures or breaches of our physical and
information security infrastructure or services;
- our dependence upon significant customers, bankruptcy or
insolvency of a major customer or a significant number of smaller
customers, or defaults on or non-renewal of leases by
customers;
- our ability to attract and retain customers;
- breaches of our obligations or restrictions under our contracts
with our customers;
- our inability to successfully develop and lease new properties
and development space, and delays or unexpected costs in
development of properties;
- the impact of current global and local economic, credit and
market conditions;
- our inability to retain data center space that we lease or
sublease from third parties;
- information security and data privacy breaches;
- difficulty managing an international business and acquiring or
operating properties in foreign jurisdictions and unfamiliar
metropolitan areas;
- our failure to realize the intended benefits from, or
disruptions to our plans and operations or unknown or contingent
liabilities related to, our recent acquisitions;
- our failure to successfully integrate and operate acquired or
developed properties or businesses;
- difficulties in identifying properties to acquire and
completing acquisitions;
- risks related to joint venture investments, including as a
result of our lack of control of such investments;
- risks associated with using debt to fund our business
activities, including re-financing and interest rate risks, our
failure to repay debt when due, adverse changes in our credit
ratings or our breach of covenants or other terms contained in our
loan facilities and agreements;
- our failure to obtain necessary debt and equity financing, and
our dependence on external sources of capital;
- financial market fluctuations and changes in foreign currency
exchange rates;
- adverse economic or real estate developments in our industry or
the industry sectors that we sell to, including risks relating to
decreasing real estate valuations and impairment charges and
goodwill and other intangible asset impairment charges;
- our inability to manage our growth effectively;
- losses in excess of our insurance coverage;
- our inability to attract and retain talent;
- impact on our operations and on the operations of our
customers, suppliers and business partners during a pandemic, such
as COVID-19;
- environmental liabilities, risks related to natural disasters
and our inability to achieve our sustainability goals;
- our inability to comply with rules and regulations applicable
to our company;
- Digital Realty Trust, Inc.'s failure to maintain its status as
a REIT for federal income tax purposes;
- Digital Realty Trust, L.P.'s failure to qualify as a
partnership for federal income tax purposes;
- restrictions on our ability to engage in certain business
activities;
- changes in local, state, federal and international laws and
regulations, including related to taxation, real estate and zoning
laws, and increases in real property tax rates; and
- the impact of any financial, accounting, legal or regulatory
issues or litigation that may affect us.
The risks included here are not exhaustive, and additional
factors could adversely affect our business and financial
performance. Several additional material risks are discussed
in our annual report on Form 10–K for the year ended December 31, 2019, our quarterly report on Form
10-Q for the quarter ended March 31,
2020 and other filings with the Securities and Exchange
Commission. Those risks continue to be relevant to our
performance and financial condition. Moreover, we operate in
a very competitive and rapidly changing environment. New risk
factors emerge from time to time and it is not possible for
management to predict all such risk factors, nor can it assess the
impact of all such risk factors on the business or the extent to
which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any
forward-looking statements. We expressly disclaim any
responsibility to update forward-looking statements, whether as a
result of new information, future events or otherwise.
Digital Realty, Digital Realty Trust, the Digital Realty
logo, Turn-Key Flex and Powered Base Building are registered
trademarks and service marks of Digital Realty Trust, Inc. in
the United States and/or other
countries.
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SOURCE Digital Realty