Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Citi's Global Property CEO Conference 2008
30 slides from Digital Realty Trust's conference presentation, Mar 3, 2008
Slide 1: Foundation of the Digital World: Investor Meetings March 2008
Exhibit 99.1 Foundation of the Digital World Investor Meetings March 2008
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 the leading institutional owner focused on mission-critical datacenters throughout North America and Europe. Diverse base of approximately 415 tenants consisting of leading global companies across various industries resulting in over $395 million in operating rev
Slide 4: 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 5: DLR Organizational Depth and Breadth
DLR Organizational Depth and Breadth 159 employees (1) Corporate headquarters Core capabilities: – San Francisco – Acquisitions Regional offices – Sales & Technical Services – North America Sales Los Angeles Engineering Phoenix Design & Construction Dallas – Operations Chicago Portfolio Management N
Slide 6: DLR's Competitive Advantage: Dedicated Technical Professionals
DLR’s Competitive Advantage: Dedicated Technical Professionals Operating scale and process-based approach result in significant cost savings and added value for tenants. Staff of over 75 DLR technical professionals: – IT sales team Corporate sales – Focus on end-user, IT professionals (CIO or CTO) C
Slide 7: DLR has a Unique Portfolio of Datacenter Properties
DLR has a Unique Portfolio of Datacenter Properties Internet Gateways Portfolio Distribution (1) – Highly strategic assets that are extremely difficult to replicate due to their existing IP network infrastructure Internet Gateway – Serve as the hub for Internet and data Datacenters communications wi
Slide 8: DLR Owns Over 1,100 MW of Utility Power Capacity
DLR Owns Over 1,100 MW of Utility Power Capacity (1) Top 15 Properties Property Name Market Capacity (MW) 1 Devon Shafron Drive (3 Buildings) Northern Virginia 225 2 350 East Cermak Road Chicago 100 3 1500 Space Park (3 Buildings) Santa Clara 59 4 3 Corporate Place New York 44 5 114 Rue Ambroise Cro
Slide 9: Diversification: Presence in Key U.S. & European Markets
Diversification: Presence in Key U.S. & European Markets DLR’s 71 properties are geographically diversified in 26 top markets. Region West Midwest East Europe Total # of Properties 21 16 22 12 71 Total RSF 3,676,000 3,852,000 3,854,000 1,168,000 12,550,000 Total Improved Datacenter RSF 2,591,000 2,4
Slide 10: DLR Properties Support a Variety of Industry Verticals
DLR Properties Support a Variety of Industry Verticals DLR provides real estate solutions for its diverse tenant base. Corporate Internet Financial Communications Technology Enterprise Enterprise 9
Slide 11: DLR Tenant Distribution
DLR Tenant Distribution No single tenant accounts for more than 11.8% of annualized rent(1). Communications Services 29% Percentage of Non-Technology Tenant Annualized Rent 11% Savvis 11.8% Qwest 8.2% Equinix 4.1% x Other Technology tel 3.5% 6% AT & T 3.0% NTT Verio 2.5% Comverse Technology, Inc. 2.
Slide 12: Strong Trends Drive Sustained Demand for DLR Space
Strong Trends Drive Sustained Demand for DLR Space Primary Growth Drivers Other Drivers – Estimated Five Year CAGRs 40% By 2008, 50% of existing corporate datacenters will have insufficient power and cooling capacity to meet the demands of high-density equipment (1) Increased business continuity and
Slide 13: DLR Growth Drivers
DLR Growth Drivers DLR growth is derived from two sources. Leasing of Turn-Key Datacenter™ and Powered Base Building™ Space – Redevelopment Inventory Acquisitions – Value-Add Income Producing Properties – Vacant Properties for Redevelopment 12
Slide 14: Leasing Drives Internal Growth
Leasing Drives Internal Growth For the year ended December 31, 2007, DLR commenced 88 leases totaling 761,000 sf, contributing approximately $40.5 million in annualized GAAP rent.(1) Leases Commenced for the year ended of December 31, 2007: Total sf Annualized GAAP Annualized Type of Space # of Leas
Slide 15: Same Store Growth
Same Store Growth Strong Increase in Same Store Quarterly Operating Revenues (1)(2) 78,000 $75,703 76,000 $75,235 74,000 72,000 70,000 $68,516 68,000 $66,338 66,000 $64,388 64,000 62,000 60,000 58,000 4Q2006 1Q2007 2Q2007 3Q2007 4Q2007 Same store cash NOI (3) increased to $43.4 million in the 4Q07,
Slide 16: Case Studies: DLR's Value-Add Leasing
Case Studies: DLR’s Value-Add Leasing % Change in NOI from later of Year Ended Property Name Location Acquisition Date Acquisition or IPO (1) 12/31/07 300 Boulevard East Weehawken, NJ Nov-04 73.8% $11,925,000 1100 Space Park Santa Clara, CA Nov-04 84.9% $6,575,000 200 Paul Avenue San Francisco, CA N
Slide 17: DLR Redevelopment Program
DLR Redevelopment Program DLR management selectively targets supply constrained markets for redevelopment opportunities. Redevelopment inventory totals 2.0 million rsf (1) with potential for up to 1.2 million rsf of raised floor datacenter space (2): – Approximately 60% of redevelopment space in inc
Slide 18: Redevelopment Program Progress Report
Redevelopment Program Progress Report Clonshaugh Industrial Estate, Dublin Construction projects currently underway in 10 U.S. and European markets totaling approximately 637,000 rentable square feet of Turn-Key Datacenter™ and Build-to-Suit space(1) DLR’s Turn-Key Datacenters™ – Move-in ready, phys
Slide 19: Replacement Cost Illustrates the Value of DLR's Portfolio
Replacement Cost Illustrates the Value of DLR’s Portfolio Replacement Cost Estimate: Cost Per Gross Square Foot Cost Components Low High Land (1) $25 $75 Base Building Building Shell $80 $160 Electrical Systems $280 $460 Mechanical Systems (HVAC) $125 $215 Datacenter Improvements Fire Protection $15
Slide 20: Proven Track Record: Strong Acquisition Activity
Proven Track Record: Strong Acquisition Activity Since its IPO, DLR has more than tripled its total assets through property acquisitions and redevelopment activity. Total Undepreciated Assets ($000s) $2,997.6 $3,000 $2,740.2 $2,535.5 $2,457.5 $2,298.7 $2,250 $2,066.2 $1,794.4 $1,648.2 $1,593.6 $1,50
Slide 21: 2007 & YTD 2008 Acquisition Activity
2007 & YTD 2008 Acquisition Activity DLR acquired new properties totaling approximately $363 million in 2007. Percentage of Total Net Total Square Net Rentable Purchase Price Total Rentable Rentable Feet Held for Square Feet Property Metropolitan Area (in millions) Square Feet Square Feet Redevelopm
Slide 22: DLR's Model Features Long-Term, Stable Leases
DLR’s Model Features Long-Term, Stable Leases Lease Expiration as a Percentage of Net Rentable Square Feet 22.6% 16.5% 15.1% 16.6% through 2010 8.5% 7.9% 4.7% 5.2% 4.6% 4.6% 3.5% 1.5% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Thereafter The weighted average remaining lease term is 7.7 years.
Slide 23: DLR Financial Overview
DLR Financial Overview Strong and Consistent Earnings Growth (1)(2) (1) Adjusted EBITDA FFO per diluted share and unit $70.0 $0.60 $0.53 $59.3 $0.50 $0.51 $0.51 $60.0 $57.1 $0.48 $54.9 $55.0 $0.50 $50.4 $0.41 $50.0 $44.5 $0.37 $0.38 $0.40 $0.35 $0.36 $0.36 $38.9 $40.0 $35.7 $36.6 $0.30 $33.7 $31.1 $
Slide 24: DLR Capital Raising Activities
DLR Capital Raising Activities Proven access to capital – YTD 2008 Issued 13.8 million shares of 5.500% convertible preferred stock, resulting in $333.6 million of net proceeds: 17.5% premium – 2007 Issued 4.025 million shares of common stock, resulting in $150.4 million of net proceeds Entered into
Slide 25: DLR 2008 Guidance
DLR 2008 Guidance(1) 2008 projected FFO (2) per share guidance: $2.30 to $2.40: Leasing Assumptions 890,000 to 990,000 sq ft of Turn-Key Datacenter™ & Powered Base Building™ space 10.2% to 15.0% (average gross rent $90 / sq ft) Internal Growth FFO (2) Per Share Growth 100,000 to 125,000 sq ft of bas
Slide 26: DLR Employs a Conservative Capital Structure
DLR Employs a Conservative Capital Structure DLR Current Capital Structure Weighted average cost of debt: 5.80%(5); approximately Variable Rate Debt, 1.0% (3) 96% fixed rate debt (6) Fixed Rate (2) Debt, 24.7% Coverage ratios (7): – Debt service: 3.4x – Fixed charge: 2.4x Equity, 59.1% (1) Preferred
Slide 27: Digital Realty Trust
DIGITAL REALTY TRUST providing the foundation for the digital world
Slide 28: 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 29: Reconciliation of non-GAAP items to their closest GAAP
Reconciliation of non-GAAP items to their closest GAAP Funds from operations (1) Q407 Q307 Q207 Q107 FY2007 Q406 Q306 Q206 Q106 FY2006 Q405 Q305 Q205 Q105 FY2005 Net income (loss) available to common stockholders $ 254 $ (224) $2,591 $18,641 $21,262 $2,978 $11,342 $1,650 $1,642 $17,612 $1,157 $1,326
Slide 30: Reconciliation of non-GAAP items to their closest GAAP
Reconciliation of non-GAAP items to their closest GAAP Cash interest expense and fixed charges (including discontinued operations) Q407 Q307 Q207 Q107 FY2007 Q406 Q306 Q206 Q106 FY2006 Q405 Q305 Q205 Q105 FY2005 Total GAAP interest expense (including discontinued operations) $15,863 $16,683 $15,142
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