Slide 1: May 5, 2015
5 May 2015 May 5, 2015
Slide 2: The Way Forward: Top Priorities Progress Report
The Way Forward Top Priorities Progress Report 2 • Achieved 40 bps sequential improvement in ROIC • Up 60 bps in 2014; 100 bps cumulative turnaround • Driven by consistent lease-up of development • Advanced capital-recycling initiative YTD • Generated >$190 million of net proceeds • Realized ~$95 mi
Slide 3: 1Q15 Growth: As Reported vs Constant Currency
4.1% 6.8% 2.2% 5.1% 0.6% 3.1% -0.8% 2.3% 2.4% 5.4% -2% 0% 2% 4% 6% 8% As Reported Constant Currency 2015 Core FFO / sh Growth Constant-Currency Growth 200-300 bps >Reported Economic Exposure Hedged with Locally-Denominated Debt 3 1) Constant Currency is a non-GAAP financial measure. For a descriptio
Slide 4: Timing of Asset Sales Offsetting Currency Translation Headwinds
Timing of Asset Sales Offsetting Currency Translation Headwinds Sales Plan Drives Guidance Raise 4 1) Core FFO is a non-GAAP financial measure. For a description of Core FFO and a reconciliation to net income, see the Appendix. $5.08 $5.23 $0.05 $0.05 $0.03 $0.15 $5.05 $4.25 $4.50 $4.75 $5.00 $5.25
Slide 5: Credit Metrics Compare Favorably to Blue Chip REITs
7.1x 6.7x 6.6x 6.3x 6.2x 6.2x 5.9x 5.2x 5.0x 0.0x 2.0x 4.0x 6.0x 8.0x KIM PLD EQR HCP BXP SPG AVB FRT DLR 4.3x 3.7x 3.7x 3.6x 3.4x 3.4x 3.0x 2.8x 2.7x 0.0x 2.0x 4.0x SPG FRT AVB HCP PLD DLR EQR BXP KIM 5.8x 4.8x 4.8x 4.8x 4.2x 3.7x 3.7x 3.4x 3.3x 0.0x 2.0x 4.0x 6.0x AVB SPG DLR FRT PLD HCP EQR KIM B
Slide 6: Improving Lease Economics Across All Product Types
Improving Lease Economics Across All Product Types Better Straight-line Rent Trends 6 $ in millions $22 $20 $19 $18 $19 $13 5.8% 5.2% 4.8% 4.3% 4.5% 3.3% 0% 1% 2% 3% 4% 5% 6% $0 $4 $8 $12 $16 $20 $24 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Straight-Line Rent Straight-Line Rent as % of Revenue
Slide 7: Cleaner CapEx Classifications
Cleaner CapEx Classifications Lower Budget, More Conservative Presentation in 2015 7 Guidance $920 - $980 million $870 - $985 millionGrand Total CapEx Spending $40 million N/A $25 - $30 million $35 - $40 million $100 - $110 million $120 - $135 million Development Spending Total Development CapEx N/A
Slide 8: April Showers Bring May Flowers: Driving Greater Current-Year Contribution
Turn-Key Flex® 108,691 $160 $17.4 million Powered Base Building® - - $0.0 million Custom Solutions - - $0.0 million Colocation 16,438 $233 $3.8 million Non-Technical 573 $58 $0.0 million Total 125,702 $169 $21.2 million Type of Space Total s.f. Signed (1) Annualized GAAP Annualized GAAP Base Rent /
Slide 9: Shortest Lag in More Than Two Years: Commencement Backlog
Shortest Lag in More Than Two Years Commencement Backlog Sets Stage for Near-Term Growth 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 estim
Slide 10: Proactively Addressing Peak Vintage Renewals
-10% -27% 25% 12% 5% -10% -30% -10% 10% 30% GAAP Rent Change Cash Rent Change TKF PBB Data Center Total Proactively Addressing Peak Vintage Renewals Gradually Approaching Mark-to-Market Inflection Point 1) Represents Turn-Key Flex and Powered Base Building product type renewals in the first quarter
Slide 11: Broad-Based Reduction in Finished Inventory
- 2 4 6 8 10 12 Phoenix Silicon Valley Dallas Boston Houston New York N. Virginia Chicago Investor Day Nov. 12, 2013 As of March 31, 2015 Broad-Based Reduction in Finished Inventory Down 40% Since November 2013 Investor Day (1) in megawatts 11 1) Reflects the reduction of finished inventory througho
Slide 12: 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 13: Achieving Favorable Execution on Capital Recycling
Property • 833 Chestnut Street Sales Price • $161 million Sales Price / s.f. • $228 / s.f. Gain on Sale • $77 million Cap Rate • 5.8% Achieving Favorable Execution on Capital Recycling Redeploying Accretively, Enhancing Portfolio Quality 13 Property • 100 Quannapowitt Sales Price • $31 million Sales
Slide 14: Consistent Execution on Strategic Vision
Consistent Execution on Strategic Vision The Pieces Are All in Place; Off to a Strong Start in 2015 Achieved 40 bps sequential improvement in ROIC Sold three non-core assets Generating >$190 million in net proceeds Realizing ~$95 million in gains Shortened commencement lag to 3.7 months
Slide 15: Appendix
Appendix 15
Slide 16: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures 16 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 17: Definitions of Non-GAAP Financial Measures (EBITDA)
Definitions of Non-GAAP Financial Measures 17 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 18: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent 18 Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Funds From Operations (FFO) to Core Funds From Operations (CFFO) (in thousands, except per share and unit data) (unaudited) Digital Realty Trust, Inc. and Subsidiaries R
Slide 19: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent 19 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 20: 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