Slide 1: Going the Distance
28 October 2014 October 28, 2014 Going the Distance
Slide 2: The Way Forward: Top Priorities Progress Report
The Way Forward Top Priorities Progress Report 2 • Improved ROIC ~ 30 bps year-over-year • Rolled out new sales comp plan in January 2014 • Leased 5.7 MW of finished inventory in 3Q14 • Commenced capital recycling program • Began marketing first phase of asset sales • Closed a Joint Venture with Gri
Slide 3: Macro Dashboard: Relatively Benign Outlook
Macro Dashboard Relatively Benign Outlook 3 1) IMF World Economic Outlook - October 2014 2) Bloomberg 3) Nate Silver FiveThirtyEight.com – October 2014 4) Citi Research 5) Gartner: IT Spending Worldwide, 3Q14 – September 2014 6) Gartner: Servers Forecast Worldwide – September 2014 7) Cisco Global Cl
Slide 4: Value-Creating Joint Venture Contribution Establishes Attractive Valuation for Turn-Key Properties
Value-Creating Joint Venture Contribution Establishes Attractive Valuation for Turn-Key Properties 1) Represents GAAP NOI adjusted for above/below market rent, deferred rental income and allocated landlord overhead. For a description of NOI and cash NOI and a reconciliation to net income, please see
Slide 5: Sustained Leasing Momentum
Turn-Key Flex® 148,612 $140 $20.8 million Powered Base Building® 22,000 $46 $1.0 million Custom Solutions 15,195 $238 $3.6 million Colocation 23,082 $229 $5.3 million Non-Technical 15,939 $32 $0.5 million Total 224,828 $139 $31.3 million Type of Space Total s.f. Signed (1) Annualized GAAP Annualized
Slide 6: Lease Momentum Driven by Cloud Providers
Annualized GAAP Base Rent (1) Lease Momentum Driven by Cloud Providers Cloud Demand is the Fastest Growing Segment $ in millions 6 1) GAAP rental revenues include total rent for new leases and expansion. The timing between lease signing and lease commencement (and receipt of rents) may be significan
Slide 7: Healthy Renewal Economics
Healthy Renewal Economics (1) Peak-Rate Expirations Weigh on Otherwise Solid Results 7 5% -9% 66% 22% 10% -6% -15% 0% 15% 30% 45% 60% 75% GAAP Rent Change Cash Rent Change TKF PBB Total Datacenter 1) Represents Turn-Key Flex and Powered Base Building product types signed in 3Q14. ® ® ■ Signed renewa
Slide 8: Steady Velocity & Pricing
Steady Velocity & Pricing Early Innings of Rate Trend Improvement 1) GAAP rental revenues include total rent for new leases and expansion. The timing between lease signing and lease commencement (and receipt of rents) may be significant. 2) As of September 30, 2014. 8
Slide 9: Sign-to-Commencement Gap is Healthy
Expected Commencement Quarter Expected Commencement Quarter Lag Has Stabilized in the ~ Six-Month Range (1) Sign-to-Commencement Gap is Healthy 1) Expected commencement quarter at time of signing. 2) On a weighted-average basis. Note: Amounts shown represent GAAP annualized base rent from signed but
Slide 10: Significant Absorption of Finished Inventory
Significant Absorption of Finished Inventory(1) Steady Progress Since Investor Day in megawatts 10 - 3 6 9 12 Phoenix Silicon Valley Dallas Boston Houston NY Metro N. Virginia Chicago Investor Day Nov. 12, 2013 As of Sept. 30, 2014 1) Finished inventory represents space ready for immediate leasing a
Slide 11: Data Center Retention is Solid
Data Center Retention is Solid Tenants are Sticky Given Their Capital Investment 1) Represents trailing 12-month average. Retention on Rentable Square Feet (1) 11 40% 60% 80% 100% 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 Data Center Non-Data Center Historical Average = 84% Historical Averag
Slide 12: 2Q14 U.S. Major Market Data Center Supply
2Q14 U.S. Major Market Data Center Supply (1) New Starts in Dallas & Houston; NoVa Still a Focus 1) Based on Digital Realty internal estimates. 2) Represents DLR’s available finished data center space and available active data center construction. 12 in megawatts - 20 40 60 80 Boston Chicago Dallas
Slide 13: 3Q14 U.S. Major Market Data Center Supply
3Q14 U.S. Major Market Data Center Supply (1) Positive Momentum in NoVA & Silicon Valley 1) Based on Digital Realty internal estimates. 2) Represents DLR’s available finished data center space and available active data center construction. 13 in megawatts - 20 40 60 80 Boston Chicago Dallas Houston
Slide 14: Credit Metrics Compare Favorably to REIT Peers
4.4x 4.3x 3.8x 3.7x 3.6x 3.2x 2.9x 0.0x 2.0x 4.0x 6.0x DLR AVB FRT SPG KIM EQR BXP 4.3x 3.8x 3.7x 3.2x 3.1x 2.9x 2.8x 0.0x 2.0x 4.0x 6.0x AVB FRT SPG EQR DLR KIM BXP 7.1x 6.9x 6.6x 6.2x 5.5x 5.5x 5.3x 0.0x 2.0x 4.0x 6.0x 8.0x KIM BXP EQR DLR AVB SPG FRT 6.7x 6.6x 5.9x 5.5x 5.5x 5.3x 5.0x 0.0x 2.0x 4
Slide 15: Credit Spreads Have Tightened Nicely
Credit Spreads Have Tightened Nicely Digital Realty Notes due 2022 vs. REIT BBB 10 Year 15 Basis points - 20 40 60 80 100 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14
Slide 16: Solid Performance Track Record
$1.00 $1.08 $1.17 $1.26 $1.47 $2.02 $2.72 $2.92 $3.12 $3.32 $0 $1 $2 $3 $4 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E Solid Performance Track Record Steady Growth in Dividend and Earnings 16 1) 2014E dividend is based on annualized 3Q14 board approved dividend as of July 21, 2014. 2) Core FF
Slide 17: Consistent Execution on Strategic Vision: Third Quarter in Review
Consistent Execution on Strategic Vision Third Quarter in Review Signed $31 million of new leasing ̵ Including a $5.3 million mid-market contribution Leased 5.7 megawatts of finished inventory ̵ One megawatt of positive net absorption Occupancy ticked up another 20 bps sequentially Same-capi
Slide 18: Appendix
Appendix 18
Slide 19: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures 19 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 may d
Slide 20: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures 20 EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) AND ADJUSTED EBITDA We believe that earnings before interest expense, income taxes, depreciation and amortization, or EBITDA, and Adjusted EBITDA (as defined below), are useful suppl
Slide 21: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent 21 Three Months Ended September 30, 2014 FFO available to common stockholders and unitholders $ 168,811 Add: 5.50% exchangeable senior debentures interest expense - FFO available to common stockholders and unitholders -- diluted $ 168
Slide 22: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent 22 Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Operating Income to Net Operating Income (NOI) (unaudited, in thousands) Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Net Income Available to Common Sto
Slide 23: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent 23 December 31, 2013 December 31, 2012 December 11, 2011 December 31, 2010 December 31, 2009 FFO available to common stockholders and unitholders 636,426$ 557,672$ 449,288$ 327,473$ 252,043$ Add: Series C convertible preferred dividen
Slide 24: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent 24 Funds from operations (1) Q214 Q114 FY2014 Q413 Q313 Q213 Q113 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 FY2005 Net income (loss) available to common stockholders $41,510 $34,186 $75,696 $42,977 $ 138,872 $ 47,077 $ 4
Slide 25: 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 relating to