Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Q3 2015 Earnings Presentation
23 slides from Digital Realty Trust's earnings presentation, Oct 29, 2015
Slide 1: The Next Horizon
October 29, 2015 The Next Horizon
Slide 2: The Next Horizon: Three-Year Guideposts
1 SUPERIOR RETURNS Deliver superior risk-adjusted total shareholder returns 2 CAPITAL ALLOCATION Prudently allocate capital to opportunistically extend global campus footprint 3 PRODUCT OFFERINGS Drive higher returns on the asset base by diversifying product offerings 4 OPERATING EFFICIENCIES Achiev
Slide 3: Telx Integration Update
• Led the human resources and organizational integration for the merger between American Airlines and US Airways • Key leadership role in Avaya's acquisition and integration of the Nortel Enterprise business • Led the staffing integration team and senior executive assimilation team as a part of Sun
Slide 4: Concluding Capital Recycling Initiative
Concluding Capital Recycling Initiative Redeploying Accretively, Enhancing Portfolio Quality 4 2 3 4 7 5 6 Property Square Feet (1) Occupancy (2) Kato & Page 199,352 100% Gold Camp 63,791 100% 900 Walnut 112,266 94.6% 210 Tucker 336,047 65.1% 1807 Michael Faraday 19,237 100% 251 Exchange 70,982 100%
Slide 5: 2015 Year-to-Date Leasing Activity
2015 Year-to-Date Leasing Activity (1) (2) Customer Concentration Consistent with Strategy 5 Note: Represents leases signed in metro areas listed above as of September 30, 2015. Represents annualized GAAP base rent. 1) Includes signings for new and re-leased space. 2) GAAP rental revenues include to
Slide 6: Supply and Demand Roughly in Equilibrium
- 20 40 60 Boston Chicago Dallas Houston N Virginia NY Metro Phoenix Silicon Valley Current Supply New Construction Sublease Availablility DLR Inventory U.S. Major Market Data Center Supply (1) Supply and Demand Roughly in Equilibrium 1) Based on Digital Realty internal estimates. 2) Represents Digi
Slide 7: Decelerating Global Economic Growth Outlook; Data Center Demand Drivers a Bright Spot
Decelerating Global Economic Growth Outlook Data Center Demand Drivers a Bright Spot 7 Global GDP Growth Forecast (1) 2015E: 3.3% 2015E: 3.1% 3.1% 3.6% U.S. GDP Growth Forecast (1) 2015E: 2.5% 2015E: 2.6% 2.6% 2.8% U.S. Unemployment Rate (2) 5.4% 5.2% 5.3% 4.9% Crude Oil ($/barrel) (3) $49 $44 $45 $
Slide 8: Financial Results
Financial Results
Slide 9: Sustained Leasing Momentum Driving Improved Returns
2007 2008 2009 2010 2011 2012 2013 2014 2015 – $20 $40 $60 $80 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Historical Lease Signings Annualized GAAP Base Rent (2) Sustained Leasing Momentum Driving Improved Returns Note: Leasing detail by
Slide 10: Backlog Sets the Stage for Future Growth
Backlog Sets the Stage for Future Growth Healthy Balance between Lag + Available Inventory Note: Amounts shown represent GAAP annualized base rent from signed but not yet commenced leases and are based on current estimates of future lease commencement timing. Actual results may vary from current est
Slide 11: Cycling Through Peak Vintage Renewals
Note: Represents Turn-Key Flex® and Powered Base Building® leases signed during the quarter ended 9/30/15. Rental rate changes on renewals are calculated as the cash rent from new leases divided by the cash rent from expiring leases, minus one. Cycling Through Peak Vintage Renewals Approaching Mark-
Slide 12: 3Q15 Core FFO/sh Five Cents Ahead of the Street
3Q15 Core FFO/sh Five Cents Ahead of the Street Proactive Portfolio Management + Leasing Drove Beat $1.32 $0.02 $0.02 $0.01 $1.27 $1.00 $1.10 $1.20 $1.30 3Q15 Core FFO - Consensus Property Tax Refunds FX Impact Early Commencements + Delayed Asset Sales 3Q15 Core FFO - Actual Core FFO per share 1) Ba
Slide 13: Constant-Currency Growth
5.8% 8.8% 6.7% 10.2% 2.2% 4.5% 8.2% 11.5% 3.8% 6.9% 0% 4% 8% 12% Constant-Currency Growth FX Represents ~300 bps Drag on Reported Results 1) Constant currency, Adjusted EBITDA, Same-Capital Cash NOI and Core FFO are non-GAAP financial measures. For a description of these measures see the Appendix. 2
Slide 14: Syndication Underway to Extend Global Unsecured Revolving Credit Facility and Term Loan
$0.0 $0.2 $0.2 $0.1 $1.0 $1.8 $0.8 $0.7 $1.1 $- $1.0 $2.0 $3.0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Secured Mortgage Debt Unsecured Prudential Shelf Facility Pro Rata Share of JV Debt Unsecured Notes Unsecured Term Loan Unsecured Global Facility 14 Revolver capacity (6) $1.3 (1) Sy
Slide 15: Q&A
Q&A
Slide 16: Consistent Execution on Strategic Vision
Improved ROIC Achieved 10 bps sequential improvement in ROIC; 130 bps improvement since 4Q13 Closed Telx Closed acquisition of Telx, a leading provider of colocation, interconnection Completed Financing Raised $714 million of common equity, $250 million of preferred equity and $950 million of bo
Slide 17: Appendix
Appendix
Slide 18: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures The information included in this presentation contains certain non-GAAP financial measures that management believes are helpful in understanding our business, as further described below. Our definition and calculation of non-GAAP financial measures may diff
Slide 19: FFO Reconciliation
September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Net income (loss) available to common stockholders 38,522$ 109,314$ 257,305$ 185,010$ Adjustments: Noncontrolling interests in operating partnership 747 2,272 5,150 3,838 Real estate related depreciation and amortization (1)
Slide 20: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent 20 (3) Includes fees, proceeds and certain other adjustments that are not core to our business. (4) Relates to earn-out contingency in connection with Sentrum Portfolio acquisition. (5) Relates to severance charges related to the depa
Slide 21: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent A reconciliation of the range of 2015 projected net income to projected FFO and core FFO follows: Low - High Net income available to common stockholders per diluted share $2.08 – 2.14 Add: Real estate depreciation and amortization and
Slide 22: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent 22 September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Rental revenues 195,624$ 197,819$ 586,241$ 592,295$ Tenant reimbursements - Utilities 39,604 39,190 111,706 115,194 Tenant reimbursements - Other 16,806 17
Slide 23: 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: