Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Q4 2018 Earnings Presentation
24 slides from Digital Realty Trust's earnings presentation, Feb 5, 2019
Slide 1: 4Q18 Financial Results
Global. Connected. Sustainable. 4Q18 FINANCIAL RESULTS FEBURARY 2019 Digital Realty the trusted foundation | powering your digital ambitions
Slide 2: Navigating the Future: Sustainable Growth for Customers, Shareholders & Employees
Navigating the Future Sustainable Growth for Customers, Shareholders & Employees GLOBAL CONNECTED SUSTAINABLE DIGITAL REALTY | 4Q18 FINANCIAL RESULTS | FEBURARY 5, 2019 | 2
Slide 3: Navigating the Future: Leading Position in Latin America
Navigating the Future Sustainable Growth for Customers, Shareholders & Employees Leading Position in Unparalleled Expertise Rapidly Growing to Execute in Latin American Region Latin America Leading data center provider in Latin America, providing a full spectrum of offerings, including colocation an
Slide 4: Industry-Leading Sustainability Track Record and Commitment to Energy Efficiency
Industry-Leading Sustainability Track Record and Commitment to Energy Efficiency Received Nareit’s Earned EPA ENERGY Enrolled in new Issued first data 2018 data center STAR® certification solar energy center green “Leader in the for superior energy program to source Euro bond (1) Light” award perfor
Slide 5: Firm Fundamentals: Robust Demand, Rational Supply
Firm Fundamentals Robust Demand, Rational Supply NORTH AMERICA EMEA APAC 2,410 1,128 882 2,043 990 772 4Q17 4Q18 4Q17 4Q18 4Q17 4Q18 MEGAWATTS COMMISSIONED(1)(2) MEGAWATTS COMMISSIONED(1)(2) MEGAWATTS COMMISSIONED(1)(2) 91% 89% 90% 88% 90% 92% DIGITAL DIGITAL DIGITAL REGION REALTY REGION REALTY REGI
Slide 6: Supportive Economic Growth Outlook
Supportive Economic Growth Outlook Levered to Long-Term Secular Demand Drivers 3Q18 CALL CURRENT Better/ October 15, 2018 February 4, 2019 Worse 2019E 2020E Global GDP Growth Forecast (1) 2019E: 3.7% 2019E: 3.5% q 3.5% 3.6% U.S. GDP Growth Forecast (1) 2019E: 2.5% 2019E: 2.5% tu 2.5% 1.8% U.S. Unemp
Slide 7: Financial Results
Financial Results DIGITAL REALTY | 4Q18 FINANCIAL RESULTS | FEBURARY 5, 2019 | 7
Slide 8: Lumpy But Healthy: Comprehensive Solutions Support Diverse Customer Base
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 4Q18 BOOKINGS BY PRODUCT(1)(2) $22.0 mm $4.6 mm $10.0 mm $0.5
Slide 9: Top-Line Step Function: Healthy Backlog Sets a Solid Foundation
Top-Line Step Function Healthy Backlog Sets a Solid Foundation BACKLOG ROLL-FORWARD COMMENCEMENT TIMING $ in millions $ in millions 3Q18 Backlog Signings Commencements 4Q18 Backlog Current Period Backlog Total Backlog $37 $88 $5 $4 $148 $97 $97 $88 3Q18 Backlog Sign Commence 4Q18 Backlog 2019 2020 2
Slide 10: Cycling Through Peak Vintage Renewals
Cycling Through Peak Vintage Renewals Gradually Improving Mark-to-Market RE-LEASING SPREADS FOURTH QUARTER 2018 FULL YEAR 2018 Rental Rate Change Rental Rate Change -2.6% +0.3% CASH CASH +3.2% +4.5% GAAP GAAP Signed renewal leases Signed renewal leases representing representing $138 million $330 mil
Slide 11: 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 1.0% BENCHMARK 1% 9% RATES 4% +/- 100 bps 82% 0% Midpoint of 0.5% 0.4% Guidance 0% $6.60 – $6.70(1) GBP EUR +/- 10% +/- 10% 3% 1% EXCHANG
Slide 12: Consistent Execution, Sustainable Growth
Consistent Execution, Sustainable Growth High Quality of Earnings with Proven Growth Profile OPERATING REVENUE ADJUSTED EBITDA(1) +6.4% +7.5% +8.4% Year-Over-Year Growth Year-Over-Year Growth Core FFO/sh 4Q18 / 4Q17 4Q18 / 4Q17 4Q18 / 4Q17 $ in millions $ in millions $769 $778 $731 $744 $755 +7.4% C
Slide 13: 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 6.2x 4.8x 1.2x 5.0x 4.0x 0.8x 26% 9% Floating Rate Floating Rate Debt Debt(4)(5) 4Q18 Pro Forma for 4Q18 (4)(5) 4Q18 Pro Forma for 4Q18 Reported
Slide 14: 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 DECEMBER 31, 2018(1)(2) (USD in billions) 94% Unsecured Unsecured Secured 6 YEARS 3.7% Weighted Avg. Weighted Avg. Maturity(1)(2) $3.2 Coupon(1) 74% Fixed
Slide 15: Matching the Duration of Assets and Liabilities (Pro Forma)
Matching the Duration of Assets and Liabilities Clear Runway on the Left, No Bar Too Tall on the Right DEBT PROFILE (2) PRO FORMA DEBT MATURITY SCHEDULE(1)(2)(3) (USD in billions) 96% Unsecured Unsecured Secured 6 YEARS 3.6% Weighted Avg. Weighted Avg. Maturity(1)(3) Coupon(1) 91% Fixed Fixed Floati
Slide 16: Consistent Execution on Strategic Vision
Consistent Execution on Strategic Vision Delivering Current Results, Seeding Future Growth SUCCESSFUL 2018 INITIATIVES $268 mm 1. Deepening Connections with Customers 2018 Total Bookings Delivered record bookings in 2018, a 35% year-over-year increase 2. Extending Sustainability Leadership +90 MW Ex
Slide 17: Appendix
Appendix DIGITAL REALTY | 4Q18 FINANCIAL RESULTS | FEBURARY 5, 2019 | 17
Slide 18: 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 4Q18 TRAILING
Slide 19: 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 20: Management Statements on Non-GAAP Measures: EBITDA and Adjusted 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 21: Management Statements: Forward-Looking Statements
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 22: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Funds from operations (1) Q418 Q318 Q218 Q118 FY 2018 Q417 FY 2017 Net income (loss) available to common stockholders $ 31,230 $ 67,268 $ 65,134 $ 86,298 $ 249,930 $ 53,306 $ 173,149 Noncontrolling interests in operating partership 1,
Slide 23: Reconciliation of Non-GAAP Items: Cash Interest Expense and Fixed Charges
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Cash interest expense and fixed charges Q418 Q318 Q218 Q118 FY 2018 Q417 FY 2017 Total GAAP interest expense (including discontinued operations) $ 84,883 $ 80,851 $ 78,810 $ 76,985 $ 321,529 $ 73,989 $ 258,642 Bridge facility fees - -
Slide 24: Reconciliation of Non-GAAP Items: Net Debt/LQA Adjusted EBITDA
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Net Debt/LQA Adjusted EBTDA Net Debt/LQA Adjusted EBTDA – As Adjusted QE 12/31/2018 QE 12/31/2018 Net Debt as of December 31, 2018 $ 11,517,315 Total debt at balance sheet carrying value $ 11,101,479 Less: Expected Brookfield equity i