Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Q2 2014 Earnings Presentation
23 slides from Digital Realty Trust's earnings presentation, Jul 29, 2014
Slide 1: Stable Conditions - July 29, 2014
Exhibit 99.1 Exhibit Stable July DIGITAL 29,Conditions 99.1 2014 REALTY
Slide 2: The Way We Said, We Did
The Way 120-Day Lease-up Align Recycle Sell Explore Improve Focus Transition Know Commit Unleash WE Improved Rolled Leased Commenced Identified Plan Pursuing Announced Established Mid-market Committed Signed ROIC Began 2Promoted SAID… DID… non-strategic toour on returns to out leases begin 9addition
Slide 3: Macro Conditions Relatively Benign
Macro Relatively 1Q14 ioMay con tIsneHouse ke yrM Equit P/FFO Spending ry dust In 35% Global 1) 2) 3) 4) 5) 6) 37) oe sm 16.5x tS&P aP/E taCisco Server CAGR IMF Bloomberg Nate Citi Gartner: es P/E U.S. RInflation U.S. Control NASDAQ Global 35% 6, One-Month 10-Year RMZ 32.6x Call 500 of Research Dash
Slide 4: Improve ROIC by Pruning Non-Core Assets
Investment Improve Non-Core At-Risk 4Under-Performers Properties ROIC Assets Markets Strategy by Pruning Non-Core Assets
Slide 5: Sustained Leasing Momentum
Sustained Consistent Annualized Type Turn-Key Powered Custom Colocation Non-Technical Total $Historical $60 1Q07 1) 52)inGAAP Includes $40 millions of 283,304 2Q07 Space Solutions $20 Base rental Leasing Flex® Signings Execution 26,899 signings GAAP 3Q07 $0$124 Total Building® 73,807 revenues 182,59
Slide 6: Healthy Positive Renewal Economics
Healthy Positive TKF 6.2% 8% 9.7% 10.5% 12% 4.5% GAAP 0% 4% Signed Rental Renewed 61) Represents ® 6.1% 5.0% rates Rent renewal PBB® Renewal Cash 161,000 7,000 on Change Turn-Key Re-Leasing Total renewals leases square Economics square Datacenter Cash representing feet Flex increased feet Spreads Re
Slide 7: Strong High-Quality Leasing Rates
Strong High $GAAP $112 $137 $150 $161 $200 $82 $100 $50 2007 (2) $0 TKF -$128 1) 72) Global in As GAAP $64 $56 millions Rates $112 Face 2008 $153 ofAnnualized Start June rental Rate $106 2009 $158 / to s.f. TKF 30, the YTD, revenues 2010 $172 2014. PBB Year Base Albeit 2011 $183 Custom Rent(1) inclu
Slide 8: Recurring Healthy In-Place Lease Term
Recurring Healthy 92% 2.5%—3% < In-Place 62Q14 6.3 years 40A 7.3 1) 2) 3) 84) .8 vg. 7.6 10% As Same-store Our Forleased Remaining Lease of Leasing new leases ofAverage June Weighted-Average leases Revenue leases contractual Term, real generally 30, occupancy Activity estate expiring Lease Lease 201
Slide 9: Seven-Month Sign-to-Commencement Lag Backlog
Lag Seven-Month Acquired $66.8 $468.5 $Backlog: Current 1Q12 2Q12 Quarter 4Q12 1Q13 ning Sig 4Q13 1Q14 2Q14 $401.7 4Q11 25% % 78% 1) 2) Note: estimates. inExpected Commenced On 3Q13 millions Largely 2Q13 19% of Amounts –$53.0 1Q12 $17.8 $32.1 $28.8 $43.7 $54.2 $46.6 $35.2 $20.9 a$94.8 $22.1 leases 2
Slide 10: Significant Reduction in Available Inventory
Significant 25% in 84-B 12 10oston megawatts Reduction Chicago Absorption Investor Since DallasInvestor Day of Houston Available 6/30/2014 Day N Virginia Inventory NY Metro Phoenix Silicon Valley
Slide 11: 1Q14 Healthy Current Supply and Demand
1Q14 Healthy Current 28 40 44 60 67 80 17 10 20 -B 1) 11oston Based 24 U.S. 18 13 Chicago Supply Demand, onMajor Digital New Dallas Market butRealty Construction Northern Houston Data internal Center Virginia N Sublease Virginia estimates. Supply(1) Stands NY Availablility Out Metro Phoenix DLR Inve
Slide 12: 2Q14 New Current Supply
2Q14 New Current 28 33 40 54 60 63 80 20 -B 1) 12oston Based 24Starts 16 U.S. 22Chicago 10Supply onMajor inDigital Dallas New Dallas Market Realty & Construction Houston Houston; Data internal Center NNoVa Sublease Virginia estimates. Supply(1) StillNY Availablility a Focus Metro Phoenix DLR Invento
Slide 13: Credit Metrics Compare Favorably to REIT Peers
Credit Leverage Net 8.0x 5.8x BXP Interest 6.0x 4.3x 3.7x 4.0x 3.0x 2.5x 2.0x 0.0x (2) AVB Source: 1) 2) 3) Adjusted For Based (2) Debt 7.2x 6.3x 5.7x 4.0x (2) 6.0x 4.1x 3.7x 3.5x 3.1x 2.5x 2.0x 0.0x EQR FRT these Metrics (2) Coverage(3) Company (2) on /is 7.1x 5.6x 4.1x 3.5x 3.0x KIM (2) KIM LQA (2
Slide 14: Credit Spreads Reflect Stable Conditions
Creditpoints Reflection Basis Jul-13 40 60 80 100 120 14 Aug-13 Spread ofSpread Stable Tightens Oct-13between Conditions Nov-13DLR Jan-14 & Execution 2022 Feb-14 NotesStrategy Apr-14 and REIT May-14 BBBJul-14 10yr Bond Rates
Slide 15: Contractual NOI Growing
Contractual $Growing $1,055 2Q14 $900 $950 $5 NOI Note: 1) 2) 3) among 4) 5) 6) 7) 8) 15in Adjustment Annualized Incremental Chart Recognized millions consolidated NOI 2Q14-4Q14 other $48 assumes NOI is$1,050 NOI things. $1,103 aEmbedded NOI to portion NOI non-GAAP Step annualize reflect no (3) 2Q14
Slide 16: Focus Summary: Signed Leasing and Guidance
Focus Summary Signed leasing guidance 1) buy, change 16 Credit sell on $35 in target or ratings range; Top ratings. hold million by Priorities S&P any may mid-July; An ofsecurity, revised agency’s not new Drives reflect leasing, Occupancy its and Results rating outlook the may including potential sh
Slide 17: Appendix
17 Appendix
Slide 18: Definitions of Non-GAAP Financial Measures
Definitions Financial The of FUNDS for property the changes all accordance with ADJUSTED activities. including rents, CORE We compared expenses, expense may GAAP NET commonly market exclude necessary performance NOI 18 non-GAAP of unconsolidated performance calculate present information not represen
Slide 19: Definitions of Non-GAAP Financial Measures
Definitions Financial EARNINGS We investors periods, controlling gain used taxes, Other Accordingly, Each AFFO, 19 believe on by of REITs exclude NOI, sale FFO, securities change to Measures interests. that of view of BEFORE may Cash EBITDA CFFO, Non-GAAP capitalized property, earnings inour calcula
Slide 20: FFO and CFFO Reconciliation, Three Months Ended March 31, 2014
To129,496 Net Noncontrolling Adjustments: Real unconsolidated Gain Basic Depreciation $Non-real (2) transactions months average Add: Weighted Digital Reconciliation Three March FFO Termination Significant Loss Change Equity Severance CFFO Diluted (1) (3) 20 Their Real For Includes Relates income est
Slide 21: FFO and CFFO Reconciliation, Three Months Ended June 30, 2014
To135,938 Net Noncontrolling Adjustments: Real unconsolidated Basic (1) Depreciation $Non-real (2) average the improbable. basis 2014 and Add: Weighted Digital Reconciliation Three June FFO Termination Gain Significant Loss Change Equity Severance Other CFFO Diluted (3) (5) (6) Officer. 21 Their At
Slide 22: EBITDA and Projected FFO Reconciliation
Toreconciliation Three June Ended Operating Fee Construction General Transactions Other 2Q14 A Low—High Real Add: Dilutive Less: Adjustments Projected Digital Reconciliation (in (unaudited) Net Interest Loss Taxes Depreciation EBITDA Change Severance Gain Noncontrolling Preferred Adjusted 22 Their t
Slide 23: Forward-Looking Statements
Forward-Looking The Such development initiatives; properties; commencement rollovers maturities; markets trends, market expenditures; of dividend connectivity “believes,” predictions performance aamong impairment necessary our acquiring delays successfully environmental operation; additional with 23