Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Q2 2018 Earnings Presentation
25 slides from Digital Realty Trust's earnings presentation, July 2018
Slide 1: Strengthening Connections: 2Q18 Financial Results
Strengthening Connections 2Q18 FINANCIAL RESULTS JULY 2018 Digital Realty the trusted foundation | powering digital ambitions
Slide 2: Navigating the Future: Sustainable Growth for Customers, Shareholders & Employees
NAVIGATING THE FUTURE Sustainable Growth for Customers, Shareholders & Employees GLOBAL CONNECTED SUSTAINABLE 2Q18 DIGITAL REALTY FINANCIAL RESULTS 2
Slide 3: Serving a Social Purpose
SERVING A SOCIAL PURPOSE Delivering Sustainable Growth for All Stakeholders ENVIRONMENTAL SOCIAL GOVERNANCE 2018 Green Lease Leader recognition from Committed to enhancing the well- Minimum stock the IMT and U.S. DOE’s(1) Better Buildings being of our stockholders, customers, employees, vendors, 201
Slide 4: Robust Demand, Rational Supply
FIRM FUNDAMENTALS Robust Demand, Rational Supply NORTH AMERICA EMEA APAC 2,303 1,898 944 1,038 607 669 2Q17 2Q18 2Q17 2Q18 2Q17 2Q18 MEGAWATTS COMMISSIONED(1,2) MEGAWATTS COMMISSIONED(1,2) MEGAWATTS COMMISSIONED(1,2) 91% 89% 91% 83% 93% 95% DIGITAL DIGITAL REGION DIGITAL REGION REGION REALTY REALTY
Slide 5: Delivering Superior Risk-Adjusted Returns
DELIVERING SUPERIOR RISK-ADJUSTED RETURNS Investing Opportunistically to Expand the Global Platform LTM 2Q17 LONG-TERM VALUE CREATION LTM 2Q18 PRE-LEASING (%) 2Q17 39% 2Q18 62% LEASE TERM (Years) 2Q17 6 2Q18 8 CREDIT QUALITY (% Investment Grade)1 2Q17 30% 2Q18 40% SPREAD OVER COST OF CAPITAL LONGER
Slide 6: Supportive Economic Growth Outlook
SUPPORTIVE ECONOMIC GROWTH OUTLOOK Levered to Long-Term Secular Demand Drivers 1Q18 CALL CURRENT Better/ April 25, 2018 July 25, 2018 Worse 2018E 2019E Global GDP Growth Forecast (1) 2018E: 3.9% 2018E: 3.9% tu 3.9% 3.9% MACROECONOMIC U.S. GDP Growth Forecast (1) 2018E: 2.9% 2018E: 2.9% tu 2.9% 2.7%
Slide 7: Sunny Forecast for Cloud Growth
SUNNY FORECAST FOR CLOUD GROWTH Global Interconnected Platform Poised to Capitalize $186 Billion 70% $74 Billion $41 Billion expected spend on public cloud services globally in 2018 (2) of organizations are overall public cloud overall public cloud making significant or spending that will go to spen
Slide 8: Financial Results
Financial Results 2Q18 DIGITAL REALTY FINANCIAL RESULTS 8
Slide 9: Lumpy but Healthy: Diverse Customer Base
LUMPY BUT HEALTHY Comprehensive Solutions Support Diverse Customer Base HISTORICAL BOOKINGS ANNUALIZED GAAP BASE RENT(1)(2) $ in millions $100 $75 $50 $25 $0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2Q18 BOOKINGS BY PRODUCT(1)(2) $78.3 mm $0.0 mm $7.5 mm $0.6 mm $7.6 mm $94.0 mm TURN-KEY PO
Slide 10: Three Unique Options for Connecting to IBM Cloud
EXTENDING CUSTOMER REACH THROUGH ALLIANCES Three Unique Options for Connecting to IBM Cloud Digital Realty can provide access to the IBM Cloud from 74 Global Locations in 21 Metros across four Continents Direct Link Dedicated Hosting Direct Link Dedicated Direct Link Connect Ultra latency-sensitive
Slide 11: Healthy Backlog Sets a Solid Foundation
TOP-LINE STEP FUNCTION Healthy backlog sets a solid foundation BACKLOG ROLL-FORWARD COMMENCEMENT TIMING $ in millions $ in millions 1Q18 Backlog Signings Commencements 2Q18 Backlog Current Period Backlog Total Backlog $86 $70 $8 $142 $142 $34 $126 $100 3Q18 4Q18 1Q18 Backlog Signings Commencements 2
Slide 12: Positive Mark-to-Market Across All Property Types
CYCLING THROUGH PEAK VINTAGE RENEWALS Positive Mark-to-Market Across All Property Types 2Q18 RE-LEASING SPREADS TURN-KEY FLEX® POWERED BASE BUILDING® COLOCATION TOTAL RENTAL RATE CHANGE RENTAL RATE CHANGE RENTAL RATE CHANGE RENTAL RATE CHANGE 4.7% 3.0% 2.8% 3.4% CASH CASH CASH CASH 10.5% 15.1% 2.8%
Slide 13: Benefits of Scale and Diversification on Display
PUTTING EXPOSURE IN PERSPECTIVE Benefits of Scale and Diversification on Display EXPOSURE BY REVENUE 2018 CORE FFO/SHARE EXPOSURE USD CAD GBP EURO JPY HKD SGD AUD 0.3% BENCHMARK 1% 10% RATES +/- 100 bps 4% 81% 0% Midpoint of 0.3% 0.1% Guidance $6.55 – $6.65(1) GBP EUR 0% +/- 10% +/- 10% 3% 1% YEAR-T
Slide 14: High Quality of Earnings with Proven Growth Profile
CONSISTENT EXECUTION, SUSTAINABLE GROWTH High Quality of Earnings with Proven Growth Profile OPERATING REVENUE ADJUSTED EBITDA(1) 33% 5% 39% 6% +7.6% Growth (incl. DFT) Growth (excl. DFT) Growth (incl. DFT) Growth (excl. DFT) Core FFO/sh 2Q18 / 2Q17 2Q18 / 2Q17 2Q18 / 2Q17 2Q18 / 2Q17 2Q18 / 2Q17 $
Slide 15: Beat, Beat, Dip, Bounce
FOUR QUARTER TWO-STEP Beat, Beat, Dip, Bounce 2018E CORE FFO PER SHARE 1Q18A 2Q18A NOI Growth Interest Expense Asset Sales 3Q18E Lease 4Q18E Commencements Note: Based on management estimates; actual performance may differ materially. Core FFO and NOI are non-GAAP financial measures. For descriptions
Slide 16: Clear Runway on the Left, No Bar Too Tall on the Right
MATCHING THE DURATION OF ASSETS AND LIABILITIES Clear Runway on the Left, No Bar Too Tall on the Right DEBT MATURITY(1) DEBT PROFILE (USD in billions) No Material Maturities 5 YEARS Weighted Average 3.5% Weighted 99% Unsecured Unsecured Secured Debt Maturity(1)(2) Average Coupon(1) until 2020 $2.0 F
Slide 17: Delivering Current Results, Seeding Future Growth
CONSISTENT EXECUTION ON STRATEGIC VISION Delivering Current Results, Seeding Future Growth SUCCESSFUL SECOND QUARTER 2018 INITIATIVES 1. Deepening Connections with Customers $94 mm 2Q18 Total Bookings Reached high-water mark for bookings and backlog 2. Extending Sustainability Leadership Named 2018
Slide 18: Appendix
Appendix 2Q18 DIGITAL REALTY FINANCIAL RESULTS 18
Slide 19: Diverse Customer Base + Product Offerings
ROBUST LONG-TERM DEMAND, LUMPY NEAR-TERM SIGNINGS Diverse Customer Base + Product Offerings HISTORICAL BOOKINGS TRAILING FOUR-QUARTER AVERAGE ANNUALIZED GAAP BASE RENT(1)(2) $ in millions $80 $60 $40 $20 $0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2Q18 TRAILING FOUR-QUARTER AVERAGE BOOKINGS
Slide 20: Network Density That Promotes Innovation and Collaboration
DIGITAL REALTY IS THE EDGE Network Density That Promotes Innovation and Collaboration 12 CITIES 76k 1600+ 10 ASSETS CROSS-CONNECTS NETWORK INSTANCES Globally Where Our GLOBALLY With Over 2,000 GLOBALLY Internet Gateways Cross-Connects Each Are Located 50,000+ Cross-Connects and 630+ Networks: 111 8t
Slide 21: Management Statements on Non-GAAP Measures
APPENDIX Management Statements on Non-GAAP Measures The information included in this presentation contains certain non-GAAP financial measures that management believes are helpful in understanding our business, as further described below. Our definition and calculation of non-GAAP financial measures
Slide 22: Management Statements on Non-GAAP Measures
APPENDIX Management Statements on Non-GAAP Measures EBITDA and Adjusted EBITDA: We believe that earnings before interest, loss from early extinguishment of debt, income taxes, depreciation and amortization, and impairment of investments in real estate, or EBITDA, and Adjusted EBITDA (as defined belo
Slide 23: Management Statements on Non-GAAP Measures
APPENDIX Management Statements on Non-GAAP Measures The information included in this presentation contains forward-looking statements. Such statements are based on management’s beliefs and assumptions made based on information currently available to management. Such forward-looking statements includ
Slide 24: Reconciliation of Non-GAAP Items
RECONCILIATION OF NON-GAAP ITEMS To Their Closest GAAP Equivalent Funds from operations (1) Reconciliation of Adjusted EBITDA Q218 Q217 FY 2017 Q218 Q217 Net income (loss) available to common stockholders $ 65,134 $ 57,837 $ 173,149 EBITDA $ 444,853 $ 296,169 Noncontrolling interests in operating pa
Slide 25: Digital Realty
b DIGITAL REALTY Digital Realty the trusted foundation | powering digital ambitions