AUSTIN,
Texas, Oct. 26, 2023 /PRNewswire/ -- Digital
Realty (NYSE: DLR), the largest global provider of cloud- and
carrier-neutral data center, colocation and interconnection
solutions, announced today financial results for the third quarter
of 2023. All per share results are presented on a fully diluted
basis.
Highlights
- Reported net income available to common stockholders of
$2.33 per share in 3Q23, compared to
$0.75 in 3Q22
- Reported FFO per share of $1.55
in 3Q23, compared to $1.55 in
3Q22
- Reported Core FFO per share of $1.62 in 3Q23, compared to $1.67 in 3Q22
- Reported Constant-Currency Core FFO per share of $1.60 in 3Q23 and $4.96 per share for the nine months ended
September 30, 2023
- Reported "Same-Capital" cash NOI growth of 9.4% in 3Q23
- Reported rental rate increases on renewal leases of 7.4% on a
cash basis in 3Q23
- Signed total bookings during 3Q23 that are expected to generate
$152 million of annualized GAAP
rental revenue, including a $42
million contribution from the 0–1 megawatt category and
$12 million contribution from
interconnection
- Narrowed 3Q23 Core FFO per share outlook to $6.58 - $6.62
Financial Results
Digital Realty reported revenues of $1.4
billion in the third quarter of 2023, a 3% increase from the
previous quarter and an 18% increase from the same quarter last
year.
The company delivered net income of $746
million in the third quarter of 2023, and net income
available to common stockholders of $723
million, or $2.33 per diluted
share, compared to $0.37 per diluted
share in the previous quarter and $0.75 per diluted share in the same quarter last
year.
Digital Realty generated Adjusted EBITDA of $686 million in the third quarter of 2023, a 2%
decrease from the previous quarter and 11% increase over the same
quarter last year.
The company reported Funds From Operations (FFO) of $482 million in the third quarter of 2023, or
$1.55 per share, compared to
$1.52 per share in the previous
quarter and $1.55 per share in the
same quarter last year.
Excluding certain items that do not represent core expenses or
revenue streams, Digital Realty delivered Core FFO per share of
$1.62 in the third quarter of 2023,
compared to $1.68 per share in the
previous quarter and $1.67 per share
in the same quarter last year. Digital Realty delivered
Constant-Currency Core FFO per share of $1.60 for the third quarter of 2023 and
$4.96 per share for the nine-month
period ended September 30, 2023.
"Digital Realty's third quarter results demonstrate strong and
broad-based demand across our product spectrum. We posted record
leasing in the 0-1 megawatt plus interconnection category and
robust leasing in the greater-than-a-megawatt category," said
Digital Realty President & Chief Executive Officer Andy Power. "Accelerating Same-Capital cash NOI
growth combined with strong progress on our funding plan have
enabled the company to de-lever while reinvesting to meet the needs
of our customers."
Leasing Activity
In the third quarter, Digital Realty signed total bookings that
are expected to generate $152 million
of annualized GAAP rental revenue, including a $42 million contribution from the 0–1 megawatt
category and a $12 million
contribution from interconnection.
The weighted-average lag between new leases signed during the
third quarter of 2023 and the contractual commencement date was 12
months.
In addition to new leases signed, Digital Realty also signed
renewal leases representing $157
million of annualized GAAP rental revenue during the
quarter. Rental rates on renewal leases signed during the third
quarter of 2023 increased 7.4% on a cash basis and 9.5% on a GAAP
basis.
New leases signed during the third quarter of 2023 are
summarized by region and product as follows:
|
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|
|
|
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|
|
|
|
|
|
|
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|
Annualized GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Rent
|
|
Square Feet
|
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GAAP Base Rent
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GAAP Base Rent
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The Americas
|
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(in thousands)
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(in thousands)
|
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per Square Foot
|
|
Megawatts
|
|
per Kilowatt
|
0-1 MW
|
|
|
$22,233
|
|
96
|
|
|
$230
|
|
8.2
|
|
|
$227
|
> 1
MW
|
|
|
68,378
|
|
274
|
|
|
250
|
|
40.9
|
|
|
139
|
Other
(1)
|
|
|
1,128
|
|
11
|
|
|
100
|
|
—
|
|
|
—
|
Total
|
|
|
$91,739
|
|
382
|
|
|
$240
|
|
49.1
|
|
|
$154
|
|
|
|
|
|
|
|
|
|
|
|
|
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EMEA (2)
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|
|
|
|
|
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0-1 MW
|
|
|
$15,164
|
|
56
|
|
|
$270
|
|
4.4
|
|
|
$286
|
> 1
MW
|
|
|
5,193
|
|
41
|
|
|
125
|
|
3.2
|
|
|
135
|
Other
(1)
|
|
|
188
|
|
4
|
|
|
46
|
|
—
|
|
|
—
|
Total
|
|
|
$20,545
|
|
102
|
|
|
$202
|
|
7.6
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|
|
$223
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|
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|
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Asia Pacific
(2)
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|
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0-1 MW
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$4,378
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|
11
|
|
|
$383
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|
1.3
|
|
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$284
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> 1
MW
|
|
|
23,307
|
|
132
|
|
|
176
|
|
11.9
|
|
|
164
|
Other
(1)
|
|
|
53
|
|
1
|
|
|
100
|
|
—
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|
|
—
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Total
|
|
|
$27,738
|
|
144
|
|
|
$192
|
|
13.1
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|
|
$176
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|
|
|
|
|
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|
|
|
|
|
|
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All Regions (2)
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|
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0-1 MW
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$41,776
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|
164
|
|
|
$254
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13.9
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|
|
$251
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> 1
MW
|
|
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96,877
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|
447
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|
|
217
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56.0
|
|
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144
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Other
(1)
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|
|
1,370
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|
16
|
|
|
86
|
|
—
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|
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—
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Total
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|
|
$140,023
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627
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|
|
$223
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|
69.8
|
|
|
$166
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|
|
|
|
|
|
|
|
|
|
|
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Interconnection
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$12,106
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N/A
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|
|
N/A
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|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Grand Total
|
|
|
$152,128
|
|
627
|
|
|
$223
|
|
69.8
|
|
|
$166
|
Note: Totals may
not foot due to rounding differences.
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(1)
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Other includes Powered
Base Building® shell capacity as well as storage and office space
within fully improved data center facilities.
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(2)
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Based on quarterly
average exchange rates during the three months ended September 30,
2023.
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Investment Activity
As previously disclosed, in July, Digital Realty formed a joint
venture in which GI Partners purchased a 65% interest in two
stabilized hyperscale data centers in the Chicago metro area. Digital Realty received
approximately $743 million of gross
proceeds from the sale and the associated financing and maintains a
35% interest in the joint venture. Based on annualized in‐place
cash NOI at June 30, 2023 and the
benefit of leases signed but not yet commenced, the transaction
valued the two facilities at an approximate 6.5% cap rate. Digital
Realty also granted GI Partners options to purchase an interest in
the third facility on the same data center campus, along with the
ability to increase its stake in the assets up to 80%.
Also previously disclosed, in late July, Digital Realty formed a
joint venture in which TPG Real Estate purchased an 80% interest in
three stabilized hyperscale data centers in Northern Virginia. Digital Realty received
approximately $1.4 billion of gross
proceeds from the sale and the associated financing and maintains a
20% interest in the joint venture. Based on annualized in‐place
cash NOI at June 30, 2023, net of
signed leases and known move-outs, the transaction valued the
facilities at an approximate 6.0% cap rate.
In addition, Digital Realty previously announced plans to expand
its joint venture in India with
Brookfield Infrastructure through the addition of Jio, a Reliance
Industries, Ltd. company. Upon closing, the new joint venture,
'Digital Connexion: A Brookfield,
Jio and Digital Realty Company', will succeed BAM Digital
Realty.
During the third quarter, Digital Realty signed a 50-year right
of use agreement related to a 2.7-acre site (MRS5) in Marseille, France, which can support the
development of data center capacity with approximately 22 megawatts
of IT load, as an extension to its existing highly connected campus
in the port of Marseille. The
minimum total payments over the next 30 years for MRS5 will be €62
million or $65 million. Marseille is a key connectivity gateway in
Europe.
Additionally, Digital Realty secured approximately 27 acres
(MRS6) near Marseille for a
purchase price of €47 million or $49
million. MRS6 can support the development of data center
capacity of up to 50 megawatts of IT load to support the increasing
demand from cloud service providers.
Further during the third quarter, Digital Realty sold a non-core
data center in Watford, United
Kingdom for approximately $146
million of net proceeds representing a 9.8% cap rate based
on in-place NOI adjusted for known move-outs. Additionally, Digital
Realty sold a non-core data center in Chantilly, Virginia for approximately
$43 million, representing a 9.3% cap
rate based on in-place NOI at September 30,
2023.
Balance Sheet
Digital Realty had approximately $16.9
billion of total debt outstanding as of September 30, 2023, comprised of $16.3 billion of unsecured debt and approximately
$0.6 billion of secured debt and
other. At the end of the third quarter of 2023, net
debt-to-Adjusted EBITDA was 6.3x, debt-plus-preferred-to-total
enterprise value was 32.0% and fixed charge coverage was 4.1x.
During the quarter, Digital Realty settled its previously
disclosed forward sales agreements under its ATM program, issuing
3.5 million shares at a weighted average price of $97.23 per share, realizing approximately
$336 million of net
proceeds.
2023 Outlook
Digital Realty narrowed its 2023 Core FFO per share and
constant-currency Core FFO per share outlook to $6.58 - $6.62. The
assumptions underlying the outlook are summarized in the following
table.
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As of
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As of
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As of
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As of
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Top-Line and Cost
Structure
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February 16, 2023
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April 27, 2023
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July 27, 2023
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October 26, 2023
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Total
revenue
|
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$5.700 - $5.800
billion
|
|
$5.500 - $5.600
billion
|
|
$5.500 - $5.600
billion
|
|
$5.475 - $5.525
billion
|
Net non-cash rent
adjustments (1)
|
|
($55 - $60
million)
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|
($55 - $60
million)
|
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($55 - $60
million)
|
|
($55 - $60
million)
|
Adjusted
EBITDA
|
|
$2.675 - $2.725
billion
|
|
$2.675 - $2.725
billion
|
|
$2.675 - $2.725
billion
|
|
$2.685 - $2.715
billion
|
G&A
|
|
$425 - $435
million
|
|
$425 - $435
million
|
|
$425 - $435
million
|
|
$425 - $435
million
|
|
|
|
|
|
|
|
|
|
Internal Growth
|
|
|
|
|
|
|
|
|
Rental rates on renewal
leases
|
|
|
|
|
|
|
|
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Cash basis
|
|
Greater than
3.0%
|
|
Greater than
3.0%
|
|
Greater than
4.0%
|
|
Greater than
5.0%
|
GAAP basis
|
|
Greater than
3.0%
|
|
Greater than
3.0%
|
|
Greater than
8.0%
|
|
Greater than
9.0%
|
Year-end portfolio
occupancy
|
|
85.0% -
86.0%
|
|
85.0% -
86.0%
|
|
84.0% -
85.0%
|
|
83.0% -
84.0%
|
"Same-capital" cash NOI
growth (2)
|
|
3.0% - 4.0%
|
|
3.0% - 4.0%
|
|
4.0% - 5.0%
|
|
6.0% - 7.0%
|
|
|
|
|
|
|
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|
Foreign Exchange
Rates
|
|
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|
U.S. Dollar / Pound
Sterling
|
|
$1.20 -
$1.25
|
|
$1.20 -
$1.25
|
|
$1.20 -
$1.25
|
|
$1.20 -
$1.25
|
U.S. Dollar /
Euro
|
|
$1.00 -
$1.05
|
|
$1.05 -
$1.10
|
|
$1.05 -
$1.10
|
|
$1.05 -
$1.10
|
|
|
|
|
|
|
|
|
|
External Growth
|
|
|
|
|
|
|
|
|
Dispositions / Joint
Venture Capital
|
|
|
|
|
|
|
|
|
Dollar
volume
|
|
$1.5 - $2.5
billion
|
|
$1.5 - $2.5
billion
|
|
$2.2 - $3.0
billion
|
|
$2.7 - $3.2
billion
|
Cap rate
|
|
0.0% - 10.0%
|
|
0.0% - 10.0%
|
|
0.0% - 10.0%
|
|
0.0% - 10.0%
|
Development
|
|
|
|
|
|
|
|
|
CapEx (3)
|
|
$2.3 - $2.5
billion
|
|
$2.3 - $2.5
billion
|
|
$2.3 - $2.5
billion
|
|
$2.7 - $2.9
billion
|
Average stabilized
yields
|
|
9.0% - 15.0%
|
|
9.0% - 15.0%
|
|
9.0% - 15.0%
|
|
9.0% - 15.0%
|
Enhancements and other
non-recurring CapEx (4)
|
|
$15 - $20
million
|
|
$15 - $20
million
|
|
$15 - $20
million
|
|
$15 - $20
million
|
Recurring CapEx +
capitalized leasing costs (5)
|
|
$230 - $240
million
|
|
$230 - $240
million
|
|
$230 - $240
million
|
|
$230 - $240
million
|
|
|
|
|
|
|
|
|
|
Balance Sheet
|
|
|
|
|
|
|
|
|
Long-term debt
issuance
|
|
|
|
|
|
|
|
|
Dollar
amount
|
|
$1.0 - $1.5
billion
|
|
$1.0 - $1.5
billion
|
|
$740 million
|
|
$740 million
|
Pricing
|
|
4.5% - 5.5%
|
|
5.5% - 6.0%
|
|
5.5 %
|
|
5.5 %
|
Timing
|
|
First Half
2023
|
|
First Half
2023
|
|
Completed
|
|
Completed
|
|
|
|
|
|
|
|
|
|
Net income per diluted
share
|
|
$1.15 - $1.25
|
|
$1.15 - $1.25
|
|
$1.05 - $1.15
|
|
$3.18 - $3.22
|
Real estate
depreciation and (gain) / loss on sale
|
|
$5.25 -
$5.25
|
|
$5.25 -
$5.25
|
|
$5.25 -
$5.25
|
|
$3.15 -
$3.15
|
Funds From Operations / share
(NAREIT-Defined)
|
|
$6.40 - $6.50
|
|
$6.40 - $6.50
|
|
$6.30 - $6.40
|
|
$6.33 - $6.37
|
Non-core expenses and
revenue streams
|
|
$0.25 -
$0.25
|
|
$0.25 -
$0.25
|
|
$0.25 -
$0.25
|
|
$0.25 -
$0.25
|
Core Funds From Operations /
share
|
|
$6.65 - $6.75
|
|
$6.65 - $6.75
|
|
$6.55 - $6.65
|
|
$6.58 - $6.62
|
Foreign currency
translation adjustments
|
|
$0.00 -
$0.00
|
|
$0.00 -
$0.00
|
|
$0.00 -
$0.00
|
|
$0.00 -
$0.00
|
Constant-Currency Core Funds From Operations /
share
|
|
$6.65 - $6.75
|
|
$6.65 - $6.75
|
|
$6.55 - $6.65
|
|
$6.58 - $6.62
|
|
|
(1)
|
Net non-cash rent
adjustments represent the sum of straight-line rental revenue and
straight-line rental expense, as well as the amortization of above-
and below-market leases (i.e., ASC 805
adjustments).
|
(2)
|
The "same-capital" pool
includes properties owned as of December 31, 2021 with less than 5%
of total rentable square feet under development. It excludes
properties that were undergoing, or were expected to undergo,
development activities in 2022-2023, properties classified as held
for sale, and properties sold or contributed to joint ventures for
all periods presented.
|
(3)
|
Includes land
acquisitions.
|
(4)
|
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.
|
(5)
|
Recurring CapEx
represents non-incremental improvements required to maintain
current revenues, including second-generation tenant improvements
and leasing commissions.
|
|
Note: The Company does
not provide a reconciliation for non-GAAP estimates on a
forward-looking basis, where it is unable to provide a meaningful
or accurate calculation or estimation of reconciling items and the
information is not available without unreasonable effort. Please
see Non-GAAP Financial Measures in this document for further
discussion.
|
Non-GAAP Financial Measures
This document contains non-GAAP financial measures, including
FFO, Core FFO, Adjusted FFO, Net Operating Income (NOI),
"Same-Capital" Cash NOI and Adjusted EBITDA. A reconciliation from
U.S. GAAP net income available to common stockholders to FFO, a
reconciliation from FFO to Core FFO, a reconciliation from Core FFO
to Adjusted FFO, reconciliation from NOI to Cash NOI, and
definitions of FFO, Core FFO, Adjusted FFO, NOI and "Same-Capital"
Cash NOI 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.
The Company does not provide a reconciliation for non-GAAP
estimates on a forward-looking basis, where it is unable to provide
a meaningful or accurate calculation or estimation of reconciling
items and the information is not available without unreasonable
effort. This is due to the inherent difficulty of forecasting the
timing and/or amount of various items that would impact net income
attributable to common stockholders per diluted share, which is the
most directly comparable forward-looking GAAP financial measure.
This includes, for example, external growth factors, such as
dispositions, and balance sheet items, that have not yet occurred,
are out of the Company's control and/or cannot be reasonably
predicted. For the same reasons, the Company is unable to address
the probable significance of the unavailable information.
Forward-looking non-GAAP financial measures provided without the
most directly comparable GAAP financial measures may vary
materially from the corresponding GAAP financial measures.
Investor Conference Call
Prior to Digital Realty's investor conference call at
5:00 p.m. ET / 4:00 p.m. CT on October
26, 2023, 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 third quarter 2023
financial results and operating performance. The conference call
will feature President & Chief Executive Officer Andy Power and Chief Financial Officer
Matt Mercier.
To participate in the live call, investors are invited to dial
+1 (888) 317-6003 (for domestic callers) or +1 (412) 317-6061 (for
international callers) and reference the conference ID# 0455927 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 November 26, 2023. The
telephone replay can be accessed by dialing +1 (877) 344-7529 (for
domestic callers) or +1 (412) 317-0088 (for international callers)
and providing the conference ID# 5888857. The webcast replay can be
accessed on Digital Realty's website.
About Digital Realty
Digital Realty brings companies and data together by delivering
the full spectrum of data center, colocation, and interconnection
solutions. PlatformDIGITAL®, the company's global data center
platform, provides customers with a secure data "meeting place" and
a proven Pervasive Datacenter Architecture (PDx®) solution
methodology for powering innovation and efficiently managing Data
Gravity challenges. Digital Realty gives its customers access to
the connected communities that matter to them with a global data
center footprint of 300+ facilities in 50+ metros across 25+
countries on six continents. To learn more about Digital Realty,
please visit digitalrealty.com or follow us on
LinkedIn and X.
Contact Information
Matt Mercier
Chief Financial Officer
Digital Realty
(737) 281-0101
Jordan Sadler / Jim Huseby
Investor Relations
Digital Realty
(737) 281-0101
Consolidated
Quarterly Statements of Operations
Unaudited and
Dollars in Thousands, Except Per Share Data
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Third Quarter
2023
|
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Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
30-Sep-23
|
|
|
30-Jun-23
|
|
|
31-Mar-23
|
|
|
31-Dec-22
|
|
|
30-Sep-22
|
|
|
|
30-Sep-23
|
|
|
30-Sep-22
|
Rental
revenues
|
|
|
$886,960
|
|
|
$869,298
|
|
|
$870,975
|
|
|
$834,374
|
|
|
$787,839
|
|
|
|
$2,627,233
|
|
|
$2,307,114
|
Tenant reimbursements -
Utilities
|
|
|
335,477
|
|
|
330,416
|
|
|
317,148
|
|
|
247,725
|
|
|
251,420
|
|
|
|
983,041
|
|
|
694,166
|
Tenant reimbursements -
Other
|
|
|
64,876
|
|
|
46,192
|
|
|
40,150
|
|
|
46,045
|
|
|
49,419
|
|
|
|
151,218
|
|
|
153,618
|
Interconnection &
other
|
|
|
107,305
|
|
|
104,521
|
|
|
101,695
|
|
|
97,286
|
|
|
95,486
|
|
|
|
313,521
|
|
|
282,354
|
Fee income
|
|
|
7,819
|
|
|
14,908
|
|
|
7,868
|
|
|
7,508
|
|
|
6,169
|
|
|
|
30,596
|
|
|
16,998
|
Other
|
|
|
—
|
|
|
932
|
|
|
887
|
|
|
168
|
|
|
1,749
|
|
|
|
1,819
|
|
|
4,477
|
Total Operating Revenues
|
|
|
$1,402,437
|
|
|
$1,366,267
|
|
|
$1,338,724
|
|
|
$1,233,108
|
|
|
$1,192,082
|
|
|
|
$4,107,428
|
|
|
$3,458,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utilities
|
|
|
$384,455
|
|
|
$374,934
|
|
|
$346,364
|
|
|
$268,561
|
|
|
$271,844
|
|
|
|
$1,105,753
|
|
|
$736,509
|
Rental property
operating
|
|
|
223,089
|
|
|
224,762
|
|
|
224,861
|
|
|
222,430
|
|
|
205,886
|
|
|
|
672,712
|
|
|
598,317
|
Property
taxes
|
|
|
72,279
|
|
|
46,718
|
|
|
40,424
|
|
|
42,032
|
|
|
39,860
|
|
|
|
159,420
|
|
|
133,598
|
Insurance
|
|
|
4,289
|
|
|
4,385
|
|
|
4,355
|
|
|
4,578
|
|
|
4,002
|
|
|
|
13,029
|
|
|
11,536
|
Depreciation &
amortization
|
|
|
420,613
|
|
|
432,573
|
|
|
421,198
|
|
|
430,130
|
|
|
388,704
|
|
|
|
1,274,384
|
|
|
1,147,803
|
General &
administration
|
|
|
108,039
|
|
|
105,964
|
|
|
107,766
|
|
|
104,452
|
|
|
95,792
|
|
|
|
321,769
|
|
|
294,217
|
Severance, equity
acceleration, and legal expenses
|
|
|
2,682
|
|
|
3,652
|
|
|
4,155
|
|
|
15,980
|
|
|
1,655
|
|
|
|
10,489
|
|
|
7,519
|
Transaction and
integration expenses
|
|
|
14,465
|
|
|
17,764
|
|
|
12,267
|
|
|
17,350
|
|
|
25,862
|
|
|
|
44,496
|
|
|
51,416
|
Provision for
impairment
|
|
|
113,000
|
|
|
—
|
|
|
—
|
|
|
3,000
|
|
|
—
|
|
|
|
113,000
|
|
|
—
|
Other
expenses
|
|
|
1,295
|
|
|
655
|
|
|
—
|
|
|
3,615
|
|
|
1,096
|
|
|
|
1,949
|
|
|
8,823
|
Total Operating Expenses
|
|
|
$1,344,206
|
|
|
$1,211,407
|
|
|
$1,161,388
|
|
|
$1,112,127
|
|
|
$1,034,701
|
|
|
|
$3,717,001
|
|
|
$2,989,738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
$58,231
|
|
|
$154,860
|
|
|
$177,335
|
|
|
$120,981
|
|
|
$157,381
|
|
|
|
$390,426
|
|
|
$468,988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings /
(loss) of unconsolidated joint ventures
|
|
|
(19,793)
|
|
|
5,059
|
|
|
14,897
|
|
|
(28,112)
|
|
|
(12,254)
|
|
|
|
164
|
|
|
14,616
|
Gain / (loss) on sale
of investments
|
|
|
810,688
|
|
|
89,946
|
|
|
—
|
|
|
(6)
|
|
|
173,990
|
|
|
|
900,634
|
|
|
176,760
|
Interest and other
income / (expense), net
|
|
|
24,812
|
|
|
(6,930)
|
|
|
280
|
|
|
(22,894)
|
|
|
15,752
|
|
|
|
18,162
|
|
|
31,811
|
Interest
(expense)
|
|
|
(110,767)
|
|
|
(111,116)
|
|
|
(102,220)
|
|
|
(86,882)
|
|
|
(76,502)
|
|
|
|
(324,103)
|
|
|
(212,250)
|
Income tax benefit /
(expense)
|
|
|
(17,228)
|
|
|
(16,173)
|
|
|
(21,454)
|
|
|
17,676
|
|
|
(19,576)
|
|
|
|
(54,855)
|
|
|
(49,227)
|
Loss from early
extinguishment of debt
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(51,135)
|
Net Income
|
|
|
$745,941
|
|
|
$115,647
|
|
|
$68,839
|
|
|
$763
|
|
|
$238,791
|
|
|
|
$930,427
|
|
|
$379,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income / (loss)
attributable to noncontrolling interests
|
|
|
(12,320)
|
|
|
2,538
|
|
|
(111)
|
|
|
3,326
|
|
|
(1,716)
|
|
|
|
(9,893)
|
|
|
(5,781)
|
Net Income Attributable to Digital Realty Trust,
Inc.
|
|
|
$733,621
|
|
|
$118,185
|
|
|
$68,728
|
|
|
$4,089
|
|
|
$237,075
|
|
|
|
$920,534
|
|
|
$373,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
dividends
|
|
|
(10,181)
|
|
|
(10,181)
|
|
|
(10,181)
|
|
|
(10,181)
|
|
|
(10,181)
|
|
|
|
(30,544)
|
|
|
(30,544)
|
Net Income / (Loss) Available to Common
Stockholders
|
|
|
$723,440
|
|
|
$108,003
|
|
|
$58,547
|
|
|
($6,093)
|
|
|
$226,894
|
|
|
|
$889,990
|
|
|
$343,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding - basic
|
|
|
301,826,890
|
|
|
295,390,446
|
|
|
291,218,549
|
|
|
289,364,739
|
|
|
286,693,071
|
|
|
|
296,184,154
|
|
|
285,312,314
|
Weighted-average shares
outstanding - diluted
|
|
|
311,341,418
|
|
|
306,818,538
|
|
|
303,064,832
|
|
|
301,712,082
|
|
|
296,414,726
|
|
|
|
306,734,807
|
|
|
294,257,222
|
Weighted-average fully
diluted shares and units
|
|
|
317,538,689
|
|
|
313,020,947
|
|
|
309,026,076
|
|
|
307,546,353
|
|
|
302,257,518
|
|
|
|
312,866,880
|
|
|
300,028,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income / (loss) per
share - basic
|
|
|
$2.40
|
|
|
$0.37
|
|
|
$0.20
|
|
|
($0.02)
|
|
|
$0.79
|
|
|
|
$3.00
|
|
|
$1.20
|
Net income / (loss) per
share - diluted
|
|
|
$2.33
|
|
|
$0.37
|
|
|
$0.19
|
|
|
($0.02)
|
|
|
$0.75
|
|
|
|
$2.93
|
|
|
$1.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds From Operations and Core Funds From
Operations
|
|
|
Unaudited and in Thousands, Except Per Share
Data
|
Third Quarter 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
Reconciliation of Net Income to Funds From Operations
(FFO)
|
|
|
30-Sep-23
|
|
|
30-Jun-23
|
|
|
31-Mar-23
|
|
|
31-Dec-22
|
|
|
30-Sep-22
|
|
|
|
30-Sep-23
|
|
|
30-Sep-22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income / (Loss) Available to Common
Stockholders
|
|
|
$723,440
|
|
|
$108,003
|
|
|
$58,547
|
|
|
($6,093)
|
|
|
$226,894
|
|
|
|
$889,990
|
|
|
$343,240
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interest in operating partnership
|
|
|
16,300
|
|
|
2,500
|
|
|
1,500
|
|
|
(586)
|
|
|
5,400
|
|
|
|
20,300
|
|
|
8,500
|
Real estate related
depreciation & amortization (1)
|
|
|
410,836
|
|
|
424,044
|
|
|
412,192
|
|
|
422,951
|
|
|
381,425
|
|
|
|
1,247,072
|
|
|
1,124,914
|
Depreciation related to
non-controlling interests
|
|
|
(14,569)
|
|
|
(14,144)
|
|
|
(13,388)
|
|
|
(13,856)
|
|
|
(8,254)
|
|
|
|
(42,101)
|
|
|
(8,254)
|
Unconsolidated JV real
estate related depreciation & amortization
|
|
|
43,215
|
|
|
35,386
|
|
|
33,719
|
|
|
33,927
|
|
|
30,831
|
|
|
|
112,320
|
|
|
89,172
|
(Gain) / loss on real
estate transactions
|
|
|
(810,688)
|
|
|
(89,946)
|
|
|
(7,825)
|
|
|
572
|
|
|
(173,990)
|
|
|
|
(908,459)
|
|
|
(177,904)
|
Provision for
impairment
|
|
|
113,000
|
|
|
-
|
|
|
-
|
|
|
3,000
|
|
|
-
|
|
|
|
113,000
|
|
|
-
|
Funds From Operations - diluted
|
|
|
$481,535
|
|
|
$465,844
|
|
|
$484,745
|
|
|
$439,915
|
|
|
$462,306
|
|
|
|
$1,432,124
|
|
|
$1,379,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
and units outstanding - basic
|
|
|
308,024
|
|
|
301,593
|
|
|
297,180
|
|
|
295,199
|
|
|
292,536
|
|
|
|
302,316
|
|
|
291,084
|
Weighted-average shares
and units outstanding - diluted (2)(3)
|
|
|
317,539
|
|
|
313,021
|
|
|
309,026
|
|
|
307,546
|
|
|
302,258
|
|
|
|
312,867
|
|
|
300,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds From Operations per share -
basic
|
|
|
$1.56
|
|
|
$1.54
|
|
|
$1.63
|
|
|
$1.49
|
|
|
$1.58
|
|
|
|
$4.74
|
|
|
$4.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds From Operations per share - diluted
(2)(3)
|
|
|
$1.55
|
|
|
$1.52
|
|
|
$1.60
|
|
|
$1.45
|
|
|
$1.55
|
|
|
|
$4.68
|
|
|
$4.61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
Reconciliation of FFO to Core
FFO
|
|
|
30-Sep-23
|
|
|
30-Jun-23
|
|
|
31-Mar-23
|
|
|
31-Dec-22
|
|
|
30-Sep-22
|
|
|
|
30-Sep-23
|
|
|
30-Sep-22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds From Operations - diluted
|
|
|
$481,535
|
|
|
$465,844
|
|
|
$484,745
|
|
|
$439,915
|
|
|
$462,306
|
|
|
|
$1,432,124
|
|
|
$1,379,667
|
Other non-core revenue
adjustments
|
|
|
(27)
|
|
|
27,454
|
|
|
(887)
|
|
|
(3,786)
|
|
|
(1,818)
|
|
|
|
26,540
|
|
|
12,554
|
Transaction and
integration expenses
|
|
|
14,465
|
|
|
17,764
|
|
|
12,267
|
|
|
17,350
|
|
|
25,862
|
|
|
|
44,496
|
|
|
51,416
|
Loss from early
extinguishment of debt
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
51,135
|
Severance, equity
acceleration, and legal expenses (4)
|
|
|
2,682
|
|
|
3,652
|
|
|
4,155
|
|
|
15,980
|
|
|
1,655
|
|
|
|
10,489
|
|
|
7,519
|
(Gain) / Loss on FX
revaluation
|
|
|
451
|
|
|
(7,868)
|
|
|
(6,778)
|
|
|
14,564
|
|
|
(1,120)
|
|
|
|
(14,195)
|
|
|
(39,258)
|
Other non-core expense
adjustments
|
|
|
1,295
|
|
|
655
|
|
|
-
|
|
|
3,615
|
|
|
1,046
|
|
|
|
1,949
|
|
|
8,773
|
Core Funds From Operations -
diluted
|
|
|
$500,402
|
|
|
$507,501
|
|
|
$493,500
|
|
|
$487,638
|
|
|
$487,931
|
|
|
|
$1,501,403
|
|
|
$1,471,806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
and units outstanding - diluted (2)(3)
|
|
|
308,539
|
|
|
301,806
|
|
|
297,382
|
|
|
295,519
|
|
|
292,830
|
|
|
|
302,740
|
|
|
291,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Funds From Operations per share - diluted
(2)
|
|
|
$1.62
|
|
|
$1.68
|
|
|
$1.66
|
|
|
$1.65
|
|
|
$1.67
|
|
|
|
$4.96
|
|
|
$5.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Real Estate Related Depreciation & Amortization
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
30-Sep-23
|
|
|
30-Jun-23
|
|
|
31-Mar-23
|
|
|
31-Dec-22
|
|
|
30-Sep-22
|
|
|
|
30-Sep-23
|
|
|
30-Sep-22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation &
amortization per income statement
|
|
|
$420,613
|
|
|
$432,573
|
|
|
$421,198
|
|
|
$430,130
|
|
|
$388,704
|
|
|
|
$1,274,384
|
|
|
$1,147,803
|
Non-real estate
depreciation
|
|
|
(9,777)
|
|
|
(8,529)
|
|
|
(9,006)
|
|
|
(7,179)
|
|
|
(7,279)
|
|
|
|
(27,312)
|
|
|
(22,889)
|
Real Estate Related Depreciation &
Amortization
|
|
|
$410,836
|
|
|
$424,044
|
|
|
$412,192
|
|
|
$422,951
|
|
|
$381,425
|
|
|
|
$1,247,072
|
|
|
$1,124,914
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Certain of Teraco's
minority indirect shareholders have the right to put their shares
in an upstream parent company of Teraco to Digital Realty in
exchange for cash or the equivalent value of shares of Digital
Realty common stock, or a combination thereof. US GAAP requires
Digital Realty to assume the put right is settled in shares for
purposes of calculating diluted EPS. This same approach was
utilized to calculate FFO/share. The potential future dilutive
impact associated with this put right will be excluded from Core
FFO and AFFO until settlement occurs – causing diluted share count
to be higher for FFO than for Core FFO and AFFO. When calculating
diluted FFO, Teraco related minority interest is added back to the
FFO numerator as the denominator assumes all shares have been put
back to Digital Realty.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
30-Sep-23
|
|
|
30-Jun-23
|
|
|
31-Mar-23
|
|
|
31-Dec-22
|
|
|
30-Sep-22
|
|
|
|
30-Sep-23
|
|
|
30-Sep-22
|
Teraco noncontrolling
share of FFO
|
|
|
$11,537
|
|
|
$9,645
|
|
|
$11,069
|
|
|
$7,213
|
|
|
$4,706
|
|
|
|
$32,251
|
|
|
$4,706
|
Teraco related minority
interest
|
|
|
$11,537
|
|
|
$9,645
|
|
|
$11,069
|
|
|
$7,213
|
|
|
$4,706
|
|
|
|
$32,251
|
|
|
$4,706
|
|
|
(3)
|
For all periods
presented, we have excluded the effect of dilutive 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 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 definitions
section.
|
(4)
|
Relates to severance
and other charges related to the departure of company executives
and integration-related severance.
|
Adjusted Funds From Operations
(AFFO)
|
|
|
Unaudited and in Thousands, Except Per Share
Data
|
Third Quarter 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
Reconciliation of Core FFO to
AFFO
|
|
|
30-Sep-23
|
|
|
30-Jun-23
|
|
|
31-Mar-23
|
|
|
31-Dec-22
|
|
|
30-Sep-22
|
|
|
|
30-Sep-23
|
|
|
30-Sep-22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO available to common stockholders and
unitholders
|
|
|
$500,402
|
|
|
$507,501
|
|
|
$493,500
|
|
|
$487,638
|
|
|
$487,931
|
|
|
|
$1,501,403
|
|
|
$1,471,806
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-real estate
depreciation
|
|
|
9,777
|
|
|
8,529
|
|
|
9,006
|
|
|
7,179
|
|
|
7,279
|
|
|
|
27,312
|
|
|
22,889
|
Amortization of
deferred financing costs
|
|
|
5,776
|
|
|
5,984
|
|
|
4,072
|
|
|
3,753
|
|
|
3,270
|
|
|
|
15,832
|
|
|
10,234
|
Amortization of debt
discount/premium
|
|
|
1,360
|
|
|
1,339
|
|
|
1,301
|
|
|
1,276
|
|
|
1,146
|
|
|
|
4,000
|
|
|
3,553
|
Non-cash stock-based
compensation expense
|
|
|
14,062
|
|
|
13,893
|
|
|
13,056
|
|
|
16,042
|
|
|
15,948
|
|
|
|
41,012
|
|
|
46,201
|
Straight-line rental
revenue
|
|
|
(14,080)
|
|
|
(16,151)
|
|
|
(16,194)
|
|
|
(29,392)
|
|
|
(18,123)
|
|
|
|
(46,424)
|
|
|
(54,212)
|
Straight-line rental
expense
|
|
|
1,427
|
|
|
520
|
|
|
(515)
|
|
|
(208)
|
|
|
2,679
|
|
|
|
1,432
|
|
|
4,609
|
Above- and below-market
rent amortization
|
|
|
(1,127)
|
|
|
(1,195)
|
|
|
(1,226)
|
|
|
(762)
|
|
|
(465)
|
|
|
|
(3,548)
|
|
|
65
|
Deferred tax (benefit)
/ expense
|
|
|
(8,539)
|
|
|
1,339
|
|
|
(9,795)
|
|
|
(4,885)
|
|
|
(5,233)
|
|
|
|
(16,995)
|
|
|
(7,605)
|
Leasing compensation
& internal lease commissions
|
|
|
12,515
|
|
|
11,611
|
|
|
11,067
|
|
|
9,578
|
|
|
9,866
|
|
|
|
35,193
|
|
|
32,538
|
Recurring capital
expenditures (1)
|
|
|
(90,251)
|
|
|
(53,498)
|
|
|
(40,465)
|
|
|
(109,999)
|
|
|
(66,200)
|
|
|
|
(184,214)
|
|
|
(156,467)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO available to common stockholders and unitholders
(2)
|
|
|
$431,322
|
|
|
$479,873
|
|
|
$463,807
|
|
|
$380,220
|
|
|
$438,097
|
|
|
|
$1,375,001
|
|
|
$1,373,611
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
and units outstanding - basic
|
|
|
308,024
|
|
|
301,593
|
|
|
297,180
|
|
|
295,199
|
|
|
292,536
|
|
|
|
302,316
|
|
|
291,084
|
Weighted-average shares
and units outstanding - diluted (3)
|
|
|
308,539
|
|
|
301,806
|
|
|
297,382
|
|
|
295,519
|
|
|
292,830
|
|
|
|
302,740
|
|
|
291,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per share - diluted (3)
|
|
|
$1.40
|
|
|
$1.59
|
|
|
$1.56
|
|
|
$1.29
|
|
|
$1.50
|
|
|
|
$4.54
|
|
|
$4.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per
share and common unit
|
|
|
$1.22
|
|
|
$1.22
|
|
|
$1.22
|
|
|
$1.22
|
|
|
$1.22
|
|
|
|
$3.66
|
|
|
$3.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
.
|
|
|
|
Diluted AFFO Payout Ratio
|
|
|
87.3 %
|
|
|
76.7 %
|
|
|
78.2 %
|
|
|
94.8 %
|
|
|
81.5 %
|
|
|
|
80.6 %
|
|
|
77.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
Share Count Detail
|
|
|
30-Sep-23
|
|
|
30-Jun-23
|
|
|
31-Mar-23
|
|
|
31-Dec-22
|
|
|
30-Sep-22
|
|
|
|
30-Sep-23
|
|
|
30-Sep-22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Stock and Units
Outstanding
|
|
|
308,024
|
|
|
301,593
|
|
|
297,180
|
|
|
295,199
|
|
|
292,536
|
|
|
|
302,316
|
|
|
291,084
|
Add: Effect of dilutive
securities
|
|
|
515
|
|
|
213
|
|
|
202
|
|
|
320
|
|
|
294
|
|
|
|
424
|
|
|
377
|
Weighted Avg. Common Stock and Units Outstanding -
diluted
|
|
|
308,539
|
|
|
301,806
|
|
|
297,382
|
|
|
295,519
|
|
|
292,830
|
|
|
|
302,740
|
|
|
291,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
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.
|
(2)
|
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.
|
(3)
|
For all periods
presented, we have excluded the effect of dilutive 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 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
|
|
|
Unaudited and in Thousands, Except Share and Per
Share Data
|
Third Quarter 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-Sep-23
|
|
30-Jun-23
|
|
31-Mar-23
|
|
31-Dec-22
|
|
30-Sep-22
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in real
estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
|
|
$25,887,031
|
|
|
$27,087,769
|
|
|
$27,052,022
|
|
|
$26,136,057
|
|
|
$24,876,600
|
Construction in
progress
|
|
5,020,464
|
|
|
4,635,939
|
|
|
4,563,578
|
|
|
4,789,134
|
|
|
4,222,142
|
Land held for future
development
|
|
179,959
|
|
|
193,936
|
|
|
194,564
|
|
|
118,452
|
|
|
34,713
|
Investments in Real Estate
|
|
$31,087,453
|
|
|
$31,917,644
|
|
|
$31,810,164
|
|
|
$31,043,643
|
|
|
$29,133,455
|
Accumulated
depreciation and amortization
|
|
(7,489,193)
|
|
|
(7,739,462)
|
|
|
(7,600,559)
|
|
|
(7,268,981)
|
|
|
(6,826,918)
|
Net Investments in Properties
|
|
$23,598,260
|
|
|
$24,178,182
|
|
|
$24,209,605
|
|
|
$23,774,662
|
|
|
$22,306,537
|
Investment in
unconsolidated joint ventures
|
|
2,180,313
|
|
|
2,040,452
|
|
|
1,995,576
|
|
|
1,991,426
|
|
|
1,912,958
|
Net Investments in Real Estate
|
|
$25,778,573
|
|
|
$26,218,634
|
|
|
$26,205,180
|
|
|
$25,766,088
|
|
|
$24,219,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$1,062,050
|
|
|
$124,519
|
|
|
$131,406
|
|
|
$141,773
|
|
|
$176,969
|
Accounts and other
receivables (1)
|
|
1,325,725
|
|
|
1,158,383
|
|
|
1,070,066
|
|
|
969,292
|
|
|
861,117
|
Deferred
rent
|
|
586,418
|
|
|
613,796
|
|
|
627,700
|
|
|
601,590
|
|
|
556,198
|
Customer relationship
value, deferred leasing costs & other intangibles,
net
|
|
2,506,198
|
|
|
2,825,596
|
|
|
3,015,291
|
|
|
3,092,627
|
|
|
3,035,861
|
Goodwill
|
|
8,998,074
|
|
|
9,148,603
|
|
|
9,199,636
|
|
|
9,208,497
|
|
|
8,728,105
|
Assets held for
sale
|
|
|
—
|
|
|
593,892
|
|
|
—
|
|
|
—
|
|
|
—
|
Operating lease
right-of-use assets
|
|
1,274,410
|
|
|
1,291,233
|
|
|
1,317,293
|
|
|
1,351,329
|
|
|
1,253,393
|
Other assets
|
|
401,068
|
|
|
414,078
|
|
|
386,495
|
|
|
353,802
|
|
|
384,079
|
Total Assets
|
|
$41,932,515
|
|
|
$42,388,735
|
|
|
$41,953,068
|
|
|
$41,484,998
|
|
|
$39,215,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global unsecured
revolving credit facilities
|
|
$1,698,780
|
|
|
$2,242,258
|
|
|
$2,514,202
|
|
|
$2,150,451
|
|
|
$2,255,139
|
Unsecured term
loans
|
|
1,524,663
|
|
|
1,548,780
|
|
|
1,542,275
|
|
|
797,449
|
|
|
729,976
|
Unsecured senior notes,
net of discount
|
|
13,072,102
|
|
|
13,383,819
|
|
|
13,258,079
|
|
|
13,120,033
|
|
|
12,281,410
|
Secured debt and other,
net of premiums
|
|
574,231
|
|
|
554,594
|
|
|
560,955
|
|
|
528,870
|
|
|
491,984
|
Operating lease
liabilities
|
|
1,404,510
|
|
|
1,420,239
|
|
|
1,443,994
|
|
|
1,471,044
|
|
|
1,363,712
|
Accounts payable and
other accrued liabilities
|
|
2,147,103
|
|
|
2,214,820
|
|
|
1,923,819
|
|
|
1,868,884
|
|
|
1,621,406
|
Deferred tax
liabilities, net
|
|
1,088,724
|
|
|
1,128,961
|
|
|
1,164,276
|
|
|
1,192,752
|
|
|
1,145,097
|
Accrued dividends and
distributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
363,716
|
|
|
—
|
Security deposits and
prepaid rent
|
|
385,521
|
|
|
417,693
|
|
|
392,021
|
|
|
369,654
|
|
|
341,552
|
Liabilities associated
with assets held for sale
|
|
|
—
|
|
|
4,990
|
|
|
—
|
|
|
—
|
|
|
—
|
Total Liabilities
|
|
$21,895,634
|
|
|
$22,916,155
|
|
|
$22,799,620
|
|
|
$21,862,853
|
|
|
$20,230,276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
non-controlling interests
|
|
1,360,308
|
|
|
1,367,422
|
|
|
1,448,772
|
|
|
1,514,680
|
|
|
1,429,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock:
$0.01 par value per share, 110,000,000 shares
authorized:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series J Cumulative
Redeemable Preferred Stock (2)
|
|
$193,540
|
|
|
$193,540
|
|
|
$193,540
|
|
|
$193,540
|
|
|
$193,540
|
Series K Cumulative
Redeemable Preferred Stock (3)
|
|
203,264
|
|
|
203,264
|
|
|
203,264
|
|
|
203,264
|
|
|
203,264
|
Series L Cumulative
Redeemable Preferred Stock (4)
|
|
334,886
|
|
|
334,886
|
|
|
334,886
|
|
|
334,886
|
|
|
334,886
|
Common Stock: $0.01 par
value per share, 392,000,000 shares authorized
(5)
|
|
3,002
|
|
|
2,967
|
|
|
2,888
|
|
|
2,887
|
|
|
2,851
|
Additional paid-in
capital
|
|
23,239,088
|
|
|
22,882,200
|
|
|
22,126,379
|
|
|
22,142,868
|
|
|
21,528,384
|
Dividends in excess of
earnings
|
|
(4,900,757)
|
|
|
(5,253,915)
|
|
|
(4,995,982)
|
|
|
(4,698,313)
|
|
|
(4,336,201)
|
Accumulated other
comprehensive (loss), net
|
|
(882,996)
|
|
|
(741,484)
|
|
|
(652,486)
|
|
|
(595,798)
|
|
|
(862,804)
|
Total Stockholders' Equity
|
|
$18,190,026
|
|
|
$17,621,456
|
|
|
$17,212,490
|
|
|
$17,583,334
|
|
|
$17,063,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling Interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest
in operating partnership
|
|
$441,366
|
|
|
$436,099
|
|
|
$444,843
|
|
|
$419,317
|
|
|
$421,484
|
Noncontrolling interest
in consolidated joint ventures
|
|
45,182
|
|
|
47,603
|
|
|
47,342
|
|
|
104,814
|
|
|
69,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Noncontrolling Interests
|
|
$486,547
|
|
|
$483,702
|
|
|
$492,185
|
|
|
$524,131
|
|
|
$491,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity
|
|
$18,676,573
|
|
|
$18,105,158
|
|
|
$17,704,675
|
|
|
$18,107,465
|
|
|
$17,555,021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity
|
|
$41,932,515
|
|
|
$42,388,735
|
|
|
$41,953,068
|
|
|
$41,484,998
|
|
|
$39,215,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net of allowance for
doubtful accounts of $46,643 and $33,048 as of September 30, 2023
and December 31, 2022, respectively.
|
(2)
|
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 September 30,
2023 and December 31, 2022, respectively.
|
(3)
|
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 September 30,
2023 and December 31, 2022, respectively.
|
(4)
|
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 September 30,
2023 and December 31, 2022, respectively.
|
(5)
|
Common Stock:
302,846,026 and 291,148,222 shares issued and outstanding as of
September 30, 2023 and December 31, 2022, respectively.
|
Reconciliation of Earnings Before Interest, Taxes,
Depreciation & Amortization and Financial
Ratios
|
|
|
Unaudited and Dollars in
Thousands
|
Third Quarter 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
Reconciliation of Earnings Before Interest, Taxes,
Depreciation & Amortization (EBITDA)
(1)
|
|
|
30-Sep-23
|
|
|
30-Jun-23
|
|
|
31-Mar-23
|
|
|
31-Dec-22
|
|
|
30-Sep-22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income / (Loss) Available to Common
Stockholders
|
|
|
$723,440
|
|
|
$108,003
|
|
|
$58,547
|
|
|
($6,093)
|
|
|
$226,894
|
Interest
|
|
|
110,767
|
|
|
111,116
|
|
|
102,220
|
|
|
86,882
|
|
|
76,502
|
Income tax expense
(benefit)
|
|
|
17,228
|
|
|
16,173
|
|
|
21,454
|
|
|
(17,676)
|
|
|
19,576
|
Depreciation &
amortization
|
|
|
420,613
|
|
|
432,573
|
|
|
421,198
|
|
|
430,130
|
|
|
388,704
|
EBITDA
|
|
|
$1,272,048
|
|
|
$667,866
|
|
|
$603,420
|
|
|
$493,243
|
|
|
$711,676
|
Unconsolidated JV real
estate related depreciation & amortization
|
|
|
43,214
|
|
|
35,386
|
|
|
33,719
|
|
|
33,927
|
|
|
30,831
|
Unconsolidated JV
interest expense and tax expense
|
|
|
27,000
|
|
|
32,105
|
|
|
18,556
|
|
|
53,481
|
|
|
11,948
|
Severance, equity
acceleration, and legal expenses
|
|
|
2,682
|
|
|
3,652
|
|
|
4,155
|
|
|
15,980
|
|
|
1,655
|
Transaction and
integration expenses
|
|
|
14,465
|
|
|
17,764
|
|
|
12,267
|
|
|
17,350
|
|
|
25,862
|
(Gain) / loss on sale
of investments
|
|
|
(810,688)
|
|
|
(89,946)
|
|
|
—
|
|
|
6
|
|
|
(173,990)
|
Provision for
impairment
|
|
|
113,000
|
|
|
—
|
|
|
—
|
|
|
3,000
|
|
|
—
|
Other non-core
adjustments, net
|
|
|
1,719
|
|
|
22,132
|
|
|
(14,604)
|
|
|
15,127
|
|
|
(94)
|
Non-controlling
interests
|
|
|
12,320
|
|
|
(2,538)
|
|
|
111
|
|
|
(3,326)
|
|
|
1,716
|
Preferred stock
dividends
|
|
|
10,181
|
|
|
10,181
|
|
|
10,181
|
|
|
10,181
|
|
|
10,181
|
Adjusted EBITDA
|
|
|
$685,943
|
|
|
$696,604
|
|
|
$667,804
|
|
|
$638,969
|
|
|
$619,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
For definitions and
discussion of EBITDA and Adjusted EBITDA, see the definitions
section.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
Financial Ratios
|
|
|
30-Sep-23
|
|
|
30-Jun-23
|
|
|
31-Mar-23
|
|
|
31-Dec-22
|
|
|
30-Sep-22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP interest
expense
|
|
|
$110,767
|
|
|
$111,116
|
|
|
$102,220
|
|
|
$86,882
|
|
|
$76,502
|
Capitalized
interest
|
|
|
29,130
|
|
|
27,883
|
|
|
26,771
|
|
|
24,581
|
|
|
17,304
|
Change in accrued
interest and other non-cash amounts
|
|
|
44,183
|
|
|
(60,612)
|
|
|
38,137
|
|
|
(67,909)
|
|
|
31,860
|
Cash Interest Expense
(2)
|
|
|
$184,081
|
|
|
$78,387
|
|
|
$167,128
|
|
|
$43,554
|
|
|
$125,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
dividends
|
|
|
10,181
|
|
|
10,181
|
|
|
10,181
|
|
|
10,181
|
|
|
10,181
|
Total Fixed Charges
(3)
|
|
|
$150,079
|
|
|
$149,181
|
|
|
$139,172
|
|
|
$121,645
|
|
|
$103,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest coverage ratio
(4)
|
|
|
4.3x
|
|
|
4.5x
|
|
|
4.7x
|
|
|
5.3x
|
|
|
6.1x
|
Cash interest coverage
ratio (5)
|
|
|
3.4x
|
|
|
7.4x
|
|
|
3.7x
|
|
|
11.9x
|
|
|
4.6x
|
Fixed charge coverage
ratio (6)
|
|
|
4.1x
|
|
|
4.2x
|
|
|
4.4x
|
|
|
4.9x
|
|
|
5.5x
|
Cash fixed charge
coverage ratio (7)
|
|
|
3.2x
|
|
|
6.6x
|
|
|
3.5x
|
|
|
10.0x
|
|
|
4.3x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt to total
enterprise value (8)(9)
|
|
|
30.6 %
|
|
|
33.3 %
|
|
|
37.3 %
|
|
|
35.2 %
|
|
|
34.5 %
|
Debt plus preferred
stock to total enterprise value (9)(10)
|
|
|
32.0 %
|
|
|
34.7 %
|
|
|
38.9 %
|
|
|
36.8 %
|
|
|
36.2 %
|
Pre-tax income to
interest expense (11)
|
|
|
7.7x
|
|
|
2.0x
|
|
|
1.7x
|
|
|
1.0x
|
|
|
4.1x
|
Net Debt to Adjusted
EBITDA (12)
|
|
|
6.3x
|
|
|
6.8x
|
|
|
7.1x
|
|
|
6.9x
|
|
|
6.7x
|
|
|
(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, and preferred stock
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, and preferred stock dividends
(including our pro rata share of unconsolidated joint venture cash
fixed charges).
|
(8)
|
Mortgage debt and other
loans divided by market value of common equity plus debt plus
preferred stock.
|
(9)
|
Total enterprise value
defined as market value of common equity plus debt plus preferred
stock.
|
(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, plus capital lease
obligations, plus Digital Realty's pro rata share of unconsolidated
joint venture debt, less cash, and cash equivalents (including
Digital Realty's pro rata share of unconsolidated joint venture
cash) divided by the product of Adjusted EBITDA (including Digital
Realty's pro rata share of unconsolidated joint venture EBITDA),
multiplied by four.
|
Definition
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, provision for
impairment, 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,
depreciation related to non-controlling interests 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) other non-core
revenue adjustments, (ii) transaction and integration
expenses, (iii) loss from early extinguishment of debt, (iv)
gain on / issuance costs associated with redeemed preferred
stock, (v) severance, equity acceleration, and legal expenses,
(vi) gain/loss on FX revaluation, and (vii) 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 / (benefit),
(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, provision for impairment, other non-core
adjustments, net, non-controlling interests, preferred stock
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, provision for
impairment, other non-core adjustments, net, non-controlling
interests, preferred stock dividends, and gain on / 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. Same-Capital Cash NOI represents buildings owned as of
December 31, 2021 of the prior year
with less than 5% of total rentable square feet under development
and excludes buildings that were undergoing, or were expected to
undergo, development activities in 2022-2023, buildings classified
as held for sale, and buildings sold or contributed to joint
ventures for all periods presented (prior period numbers adjusted
to reflect current same-capital pool). 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 as total debt at
balance sheet carrying value, plus capital lease obligations, plus
Digital Realty's pro rata share of unconsolidated joint venture
debt, less cash, and cash equivalents (including Digital Realty's
pro rata share of unconsolidated joint venture cash) divided by the
product of Adjusted EBITDA (including Digital Realty's pro rata
share of unconsolidated joint venture 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 stock dividends. For the quarter
ended September 30, 2023, GAAP
interest expense was $111 million, capitalized interest was
$29 million and scheduled debt
principal payments and preferred stock dividends was $10 million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Operating Income
(NOI)
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
(in thousands)
|
|
30-Sep-23
|
|
30-Jun-23
|
|
30-Sep-22
|
|
|
30-Sep-23
|
|
30-Sep-22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
$58,231
|
|
|
$154,860
|
|
|
$157,381
|
|
|
|
$390,426
|
|
|
$468,988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee
income
|
|
|
(7,819)
|
|
|
(14,908)
|
|
|
(6,169)
|
|
|
|
(30,596)
|
|
|
(16,998)
|
Other
income
|
|
|
—
|
|
|
(932)
|
|
|
(1,749)
|
|
|
|
(1,819)
|
|
|
(4,477)
|
Depreciation and
amortization
|
|
|
420,613
|
|
|
432,573
|
|
|
388,704
|
|
|
|
1,274,384
|
|
|
1,147,803
|
General and
administrative
|
|
|
108,039
|
|
|
105,964
|
|
|
95,792
|
|
|
|
321,769
|
|
|
294,217
|
Severance, equity
acceleration, and legal expenses
|
|
|
2,682
|
|
|
3,652
|
|
|
1,655
|
|
|
|
10,489
|
|
|
7,519
|
Transaction
expenses
|
|
|
14,465
|
|
|
17,764
|
|
|
25,862
|
|
|
|
44,496
|
|
|
51,416
|
Provision for
impairment
|
|
|
113,000
|
|
|
—
|
|
|
—
|
|
|
|
113,000
|
|
|
—
|
Other
expenses
|
|
|
1,295
|
|
|
655
|
|
|
1,096
|
|
|
|
1,949
|
|
|
8,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Income
|
|
|
$710,505
|
|
|
$699,629
|
|
|
$662,572
|
|
|
|
$2,124,099
|
|
|
$1,957,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Net Operating Income (Cash
NOI)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Income
|
|
|
$710,505
|
|
|
$699,629
|
|
|
$662,572
|
|
|
|
$2,124,099
|
|
|
$1,957,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Straight-line
rental revenue
|
|
|
(14,185)
|
|
|
12,116
|
|
|
(17,505)
|
|
|
|
(18,395)
|
|
|
(38,168)
|
Straight-line
rental expense
|
|
|
1,632
|
|
|
722
|
|
|
2,499
|
|
|
|
1,844
|
|
|
3,536
|
Above- and
below-market rent amortization
|
|
|
(1,127)
|
|
|
(1,195)
|
|
|
(465)
|
|
|
|
(3,548)
|
|
|
65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Net Operating Income
|
|
|
$696,826
|
|
|
$711,272
|
|
|
$647,101
|
|
|
|
$2,104,000
|
|
|
$1,922,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant Currency CFFO
Reconciliation
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
(in thousands)
|
|
30-Sep-23
|
|
30-Jun-23
|
|
30-Sep-22
|
|
|
30-Sep-23
|
|
30-Sep-22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO (1)
|
|
|
$500,402
|
|
|
|
|
|
$487,931
|
|
|
|
$1,501,403
|
|
|
$1,471,806
|
Core FFO impact
of holding '22 Exchange Rates Constant (2)
|
|
|
(5,393)
|
|
|
|
|
|
—
|
|
|
|
(683)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant Currency Core FFO
|
|
|
$495,009
|
|
|
|
|
|
$487,931
|
|
|
|
$1,500,720
|
|
|
$1,471,806
|
Weighted-average
shares and units outstanding - diluted
|
|
|
308,539
|
|
|
|
|
|
292,830
|
|
|
|
302,740
|
|
|
291,461
|
Constant Currency CFFO Per
Share
|
|
|
$1.60
|
|
|
|
|
|
$1.67
|
|
|
|
$4.96
|
|
|
$5.05
|
|
|
1)
|
As reconciled to net
income above.
|
2)
|
Adjustment calculated
by holding currency translation rates for 2023 constant with
average currency translation rates that were applicable to the same
periods in 2022.
|
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: our economic outlook, our expected
investment and expansion activity, anticipated continued demand for
our products and service, our liquidity, 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, our product offerings, available inventory,
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,
constant currency Core FFO, adjusted FFO, and net income, 2023
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, 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;
- global supply chain or procurement disruptions, or increased
supply chain costs;
- 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, 2022, and other filings with the
U.S. Securities and Exchange Commission. Those risks continue to be
relevant to our performance and financial condition. Moreover, we
operate in a 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, Interxion,
Turn-Key Flex, Powered Base Building, ServiceFabric, AnyScale Colo,
Pervasive Data Center Architecture, PlatformDIGITAL, PDx, Data
Gravity Index and Data Gravity Index DGx are registered trademarks
and service marks of Digital Realty Trust, Inc. in the United States and/or other countries. All
other names, trademarks and service marks are the property of their
respective owners.
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SOURCE Digital Realty