Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — 34th Annual Technology Conference 2006
21 slides from Digital Realty Trust's conference presentation, May 30, 2006
Slide 1: 34th Annual Technology Conference
EXHIBIT 99.1 th 34 Annual Technology Conference May 31, 2006
Slide 2: Forward Looking Statements
Forward Looking Statements 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 include statements and projecti
Slide 3: Digital Realty Trust overview
Digital Realty Trust overview DLR is a leading institutional owner focused on mission critical technology properties in the US and Europe • Tenants consist of leading global companies diversified across various industries • Own 49 properties comprising 10.0 million rentable sq ft which includes 1.2
Slide 4: DLR investment highlights
DLR investment highlights • Specialized focus in dynamic and growing industries • High quality portfolio that is difficult to replicate • Experienced industry consolidator with proven ability to acquire assets below replacement cost • Acquisition and leasing pace creates potential for strong FFO gro
Slide 5: DLR properties feature advanced technical systems
DLR properties feature advanced technical systems Power management/conversion Precision air cooling/handling Power backup/redundancy Systems and security controls Between $500 and $1,000 psf typically invested in DLR buildings, creating a barrier to exit for tenants and discouraging speculative new
Slide 6: DLR is unique in its focus on technology properties
DLR is unique in its focus on technology properties Financial Health/Insurance Communications Internet Enterprise IT Services (1) (1) Data Centers (35% ) Internet Gateways (42% ) • Storage/server intensive buildings • Internet and telecom network • Provide a secure 24 x 7 intensive buildings environ
Slide 7: Strong trends drive sustained demand for DLR space
Strong trends drive sustained demand for DLR space Primary Drivers – Estimated Annual Growth Rates Other Growth Drivers Increased federal 100% regulatory and legislative 90% requirements for business 80% continuity and records 70% retention 73% 60% Disaster Recovery 60% initiatives prioritized as a
Slide 8: Senior management leads a complete REIT team
Senior management leads a complete REIT team DLR is organized and managed to deliver growth Richard Magnuson • Co-founder of Digital Realty Trust Executive Chairman • 23+ years of real estate and technology experience Michael Foust • Co-founder of Digital Realty Trust CEO • 26+ years of real estate
Slide 9: DLR is a top performing REIT
DLR is a top performing REIT DLR continues to outperform the RMS and S&P 500 100% 77.9% 80% 60% 40% 20% 12.1% 8.5% 5.1% 4.9% 2.7% 0% DLR RMS S&P 500 FY 2005 Total Return 2006 YTD Total Return Note: YTD 2006 Total Return as of May 25, 2006 assuming dividend reinvestment as per SNL Financial. . 8
Slide 10: DLR Presence in Top Markets
DLR Presence in 23 Top Markets Boston Toronto Boston Boston St. Paul Chicago NY Metro San Francisco Sacramento Philadelphia Northern Silicon Valley Virginia Denver Los Angeles Charlotte Phoenix Dallas Atlanta Austin Houston Miami Dublin London Amsterdam DLR Regional Office # of # of Total Rentable P
Slide 11: DLR is well diversified by sector
DLR is well diversified by sector Industry Distribution Non-Technology 11% Other Technology 8% Communications 38% Financial & Professional Services 13% IT Services 30% Note: Calculated based on annualized rents using in place leases as of March 31, 2006. 10
Slide 12: 2005 & YTD 2006 Acquisitions
2005 & YTD 2006 Acquisitions DLR acquired approximately $561M in new properties Total Net Rentable Redevelopment Occupancy Property Location Sq Ft. Sq Ft. (1) Sq Ft. (Net of Redev) 833 Chestnut East Philadelphia 654,778 535,098 119,680 76% 1125 Energy Park Drive St. Paul 112,827 112,827 - 100% 350 E
Slide 13: Replacement cost illustrates the value of DLR's portfolio
Replacement cost illustrates the value of DLR’s portfolio Replacement Cost Estimate Cost per Square Foot Cost Components Low High Land $40 $70 Base Building Building Shell 60 150 Electrical Systems $297 $396 Mechanical Systems (HVAC) 92 122 Data Center Fire Protection 21 29 Improvements (1) Other Co
Slide 14: DLR's Value-Add Redevelopment Program
DLR’s Value-Add Redevelopment Program Objective: Achieve attractive returns by providing corporate tenants with custom data center solutions Growing demand for data centers Limited supply of existing facilities Existing data centers often do not satisfy electrical and HVAC requirements of current we
Slide 15: DLR's competitive advantage
DLR’s competitive advantage DLR’s unmatched sales and technical team offers tenants design, construction management, engineering and facilities management expertise Inventory totals 1.2 million sf of vacant, redevelopment space: – Primarily located in Internet Gateway income producing properties • A
Slide 16: DLR's model features long-term, stable leases
DLR’s model features long-term, stable leases Lease Expiration as a % of Net Rentable Square Feet 19.9% 16.6% 11.9% 11.7% 11.2% 7.3% in next 3 yrs 6.8% 6.3% 3.0% 2.4% 1.8% 1.7% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Thereafter • The average lease term is 12 years with over 7 years remaini
Slide 17: Digital Realty's financial results
Digital Realty’s financial results Reported FFO(1) of $21.7 million for 1Q06, up 37% from $15.8 million for 1Q05; or $0.36 per diluted share and unit for 1Q06, up 20% from $0.30 per diluted share and unit for 1Q05 Reported 1Q06 EBIDTA of $36.6 million, or approx. $146.2 million on an annualized basi
Slide 18: Improving overall credit quality of DLR portfolio
Improving overall credit quality of DLR portfolio Approximately $18 million of base rental income, or over 11% of overall income, has experienced an improvement in credit quality. + = + = (1) (1) As a result of a sublease relationship with Microsoft for 300,000 sq ft of space that is leased directly
Slide 19: DLR employs a conservative capital structure
DLR employs a conservative capital structure Reduced ratio of debt to total market capitalization to 30.8% as of 1Q06 Fixed Rate Debt (4) from 33.3% at year-end 2005 $607.1M Improved debt service coverage 24% ratio (2) to 3.6x for 1Q06 versus 3.4x for the same period in 2005 and 61% maintained our f
Slide 20: Definition of Non-GAAP Financial Measures
Definition of Non-GAAP Financial Measures This presentation includes 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 may differ from those of other REITs,
Slide 21: Reconciliation of non GAAP items to their closest GAAP
Reconciliation of non GAAP items to their closest GAAP Funds from operations and Adjusted Fundsfrom Operations Cash interest expense Q106 Q105 FY 2005 Q106 Q105 FY 2005 Interest expense per financial statements 11,388 8,121 39,122 Amortization of deferred financing costs (754) (754) (2,921) Net inco
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