Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Q1 2019 Earnings Presentation
28 slides from Digital Realty Trust's earnings presentation, Apr 25, 2019
Slide 1: 1Q19 Financial Results
Global. Connected. Sustainable. 1Q19 FINANCIAL RESULTS APRIL 2019 Digital Realty the trusted foundation | powering your digital ambitions
Slide 2: Navigating the Future
Navigating the Future Sustainable Growth for Customers, Shareholders and Employees GLOBAL CONNECTED SUSTAINABLE DIGITAL REALTY | 1Q19 FINANCIAL RESULTS | APRIL 25, 2019 | 2
Slide 3: Expanding Global Platform Supporting Customer Growth
Expanding Global Platform Supporting Customer Growth Tokyo Chile Chile Singapore 3 Global Expansions Securing our supply chain to support customer growth 12 Acres 80+ MW of Land of Potential IT Capacity Singapore Tokyo DIGITAL REALTY | 1Q19 FINANCIAL RESULTS | APRIL 25, 2019 | 3
Slide 4: Socially Responsible Investing
Socially Responsible Investing Delivering Sustainable Growth for Stakeholders 2012 2013 2014 2015 2016 2017 2018 2019 • Implemented majority • Approved new long-term • Board refreshment: • Provided stockholders the voting standards for incentive plan tied to relative Mr. Mohebbi and ability to amend
Slide 5: Firm Fundamentals: Robust Demand, Rational Supply
Firm Fundamentals Robust Demand, Rational Supply NORTH AMERICA EMEA APAC 2,557 1,250 896 2,150 1,014 817 1Q18 1Q19 1Q18 1Q19 1Q18 1Q19 MEGAWATTS COMMISSIONED(1)(2) MEGAWATTS COMMISSIONED(1)(2) MEGAWATTS COMMISSIONED(1)(2) % 89% % 84% % 90% 91 DIGITAL 89 DIGITAL 90 DIGITAL REGION REALTY REGION REALTY
Slide 6: Supportive Economic Growth Outlook
Supportive Economic Growth Outlook Levered to Long-Term Secular Demand Drivers 4Q18 CALL CURRENT Better/ February 4, 2019 April 19, 2019 Worse 2019E 2020E Global GDP Growth Forecast (1) 2019E: 3.5% 2019E: 3.3% 3.3% 3.6% U.S. GDP Growth Forecast (1) 2019E: 2.5% 2019E: 2.3% 2.3% 1.9% U.S. Unemploy
Slide 7: Sunny Forecast for Cloud Growth
Sunny Forecast for Cloud Growth Global Interconnected Platform Poised to Capitalize $250 Billion >50% revenue milestone surpassed by 32% 58% (1) of public cloud compute cloud vendors in 2018 growth in cloud operator of enterprise cloud and storage services users and vendor revenues users employ a hy
Slide 8: Financial Results
Financial Results DIGITAL REALTY | 1Q19 FINANCIAL RESULTS | APRIL 25, 2019 | 8
Slide 9: Lumpy But Healthy
Lumpy But Healthy Comprehensive Solutions Support Diverse Customer Base HISTORICAL BOOKINGS ANNUALIZED GAAP BASE RENT(1)(2) $ in millions Space & Power Interconnection $100 $75 $50 $25 $0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q19 BOOKINGS BY PRODUCT(1)(2) $29.0 mm $4.9 mm $8.1 mm $
Slide 10: Diversified Global Demand
Diversified Global Demand Toronto Frankfurt Toronto Chile Brazil Singapore 5 of Top 10 49% Chile Frankfurt Markets Outside the United States of Total 1Q19 (Annualized GAAP Signings) Signings 25+ Metro Areas Signed in 1Q19 Singapore Brazil DIGITAL REALTY | 1Q19 FINANCIAL RESULTS | APRIL 25, 2019 | 10
Slide 11: Diversified Customer Base
Diversified Customer Base 1Q19 Signings by Vertical Financial Content 5% Cloud 8% Service Provider Enterprise 33% 9% Autonomous Driving Network 14% IT Services 31% 43 New Logos Digital Wearable Payments Healthcare DIGITAL REALTY | 1Q19 FINANCIAL RESULTS | APRIL 25, 2019 | 11
Slide 12: Top-Line Step Function
Top-Line Step Function Healthy Backlog Sets a Solid Foundation BACKLOG ROLL-FORWARD COMMENCEMENT TIMING $ in millions $ in millions DLR Backlog Ascenty Backlog DLR Backlog Ascenty Backlog $8 $7 $34 $45 $7 $5 $57 $14 $59 $59 $5 $38 $97 $85 $85 $75 4Q18 Backlog Signings Commencements 1Q19 Backlog 2019
Slide 13: Holistic Approach to Customer Relationship Management
Holistic Approach to Customer Relationship Management Leveraging Multiple Touch Points to Maximize Relationship Value 1Q19 RE-LEASING SPREADS As Reported TURN-KEY FLEX® POWERED BASE BUILDING® COLOCATION TOTAL RENTAL RATE CHANGE RENTAL RATE CHANGE RENTAL RATE CHANGE RENTAL RATE CHANGE -5.9% -12.6% 2.
Slide 14: Constant-Currency Growth
Constant-Currency Growth FX Represents ~ 100 bps Drag on Reported Results As Reported Constant-Currency Including Ascenty 10.7% 9.4% 7.6% 6.9% 6.3% 6.0% -1.5% -2.5% 1Q18 / 1Q19 1Q18 / 1Q19 Adj. 1Q18 / 1Q19 1Q18 / 1Q19 Core FFO Revenue Growth EBITDA Growth(1) Stabilized Cash NOI per share Growth (1)
Slide 15: Putting Exposure in Perspective
Putting Exposure in Perspective Benefits of Scale and Diversification on Display EXPOSURE BY REVENUE 2019 CORE FFO/SHARE EXPOSURE USD CAD GBP EURO JPY HKD SGD AUD 0.6% BENCHMARK 1% 9% RATES 4% +/- 100 bps 82% 0% Midpoint of 0.3% 0.1% Guidance 0% $6.60 – $6.70(1) GBP EUR +/- 10% +/- 10% 4% 1% EXCHANG
Slide 16: Four Quarter Two-Step
Four Quarter Two-Step Beat, Dip, Shuffle, Bounce 2019E CORE FFO PER SHARE 1Q19 NOI Growth Brookfield JV Tax Benefit Forward Equity 2Q19 Lease 3Q19 4Q19 Funding Settlement Commencements Note: Based on management estimates; actual performance may differ materially. Core FFO and NOI are non-GAAP financ
Slide 17: Prudently Financed Transaction Enhances Credit Stats
Prudently Financed Transaction Enhances Credit Stats Reflecting a Full-Quarter Contribution (1) (2) Net Debt to Adjusted EBITDA Fixed Charge Coverage Ratio 5.5x 0.4x 5.1x 4.1x 3.6x 0.5x 11% 0% Floating Rate Floating Rate Debt Debt(4)(5) 1Q19 Pro Forma for 1Q19 (4)(5) 1Q19 Pro Forma for 1Q19 Reported
Slide 18: Matching the Duration of Assets and Liabilities
Matching the Duration of Assets and Liabilities Clear Runway on the Left, No Bar Too Tall on the Right DEBT PROFILE DEBT MATURITY SCHEDULE AS OF MARCH 31, 2019(1)(2) (USD in billions) 99% Unsecured Unsecured Secured 6 YEARS 3.4% Weighted Avg. Weighted Avg. Maturity(1)(2) Coupon(1) Fixed $2.4 89% Fix
Slide 19: Consistent Execution on Strategic Vision
Consistent Execution on Strategic Vision Delivering Current Results, Seeding Future Growth SUCCESSFUL FIRST QUARTER 2019 INITIATIVES 80+ MW 1. Extending our Global Footprint of Potential Entered Chile, Acquired Strategic APAC Land Holdings IT Capacity 2. Delivering Sustainable Growth for All Stakeho
Slide 20: Appendix
Appendix DIGITAL REALTY | 1Q19 FINANCIAL RESULTS | APRIL 25, 2019 | 20
Slide 21: Robust Long-Term Demand, Lumpy Near-Term Signings
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 Space & Power Interconnection $80 $60 $40 $20 $0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q19 TRA
Slide 22: 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 23: Management Statements on Non-GAAP Measures: EBITDA
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 24: 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 25: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Net Income Available to Common Stockholders to Funds From Operations (FFO) (in thousands, except per share and unit data) (unaudited) Three Months Ended March 31, 2019 Marc
Slide 26: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Same Capital Cash Net Operating Income Reconciliation of Funds From Operations (FFO) to Core Funds From Operations (CFFO) (in th
Slide 27: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Net Debt/LQA Adjusted EBITDA Total Debt/Total Enterprise Value QE 03/31/19 Total debt at balance sheet carrying value $ 10,279,656 Market value of common equity(i) $ 25,904,824 Add: DLR share of unconsolidated joint venture debt 267,4
Slide 28: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent QE 03/31/19 Fixed Charged Ratio (LQA Adjusted EBITDA/total fixed charges) GAAP interest expense plus capitalized interest 112,449 Scheduled debt principal payments 153 Preferred dividends 20,943 Total fixed charges 133,545 Fixed charg