Press Release Details

Digital Realty Reports Third Quarter 2020 Results

October 29, 2020

SAN FRANCISCO, Oct. 29, 2020 /PRNewswire/ -- Digital Realty (NYSE: DLR), a leading global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions, announced today financial results for the third quarter of 2020.  All per-share results are presented on a fully-diluted share and unit basis. 

Highlights

  • Reported net loss available to common stockholders of ($0.14) per share in 3Q20, compared to net income available to common stockholders of $0.24 in 3Q19
  • Reported FFO per share of $1.19 in 3Q20, compared to $1.59 in 3Q19
  • Reported core FFO per share of $1.54 in 3Q20, compared to $1.67 in 3Q19
  • Signed total bookings during 3Q20 expected to generate $89 million of annualized GAAP rental revenue, including a $14 million contribution from interconnection
  • Raised 2020 core FFO per share outlook from $6.00-$6.10 to $6.10-$6.15

Financial Results

Digital Realty reported revenues for the third quarter of 2020 of $1.0 billion, a 3% increase from the previous quarter and a 27% increase from the same quarter last year. 

The company delivered third quarter of 2020 net loss of ($1) million, and a net loss available to common stockholders of ($37) million, or ($0.14) per diluted share, compared to $0.20 per diluted share in the previous quarter and $0.24 per diluted share in the same quarter last year. 

Digital Realty generated third quarter of 2020 Adjusted EBITDA of $568 million, a 2% increase from the previous quarter and a 17% increase over the same quarter last year. 

The company reported third quarter of 2020 funds from operations of $336 million, or $1.19 per share, compared to $1.49 per share in the previous quarter and $1.59 per share in the same quarter last year. 

Excluding certain items that do not represent core expenses or revenue streams, Digital Realty delivered third quarter of 2020 core FFO per share of $1.54, unchanged from $1.54 per share in the previous quarter, and an 8% decrease from $1.67 per share in the same quarter last year. 

Leasing Activity

In the third quarter, Digital Realty signed total bookings expected to generate $89 million of annualized GAAP rental revenue, including a $14 million contribution from interconnection. 

"We delivered solid third-quarter results, driven by consistent execution and growth across the business," said Digital Realty Chief Executive Officer A. William Stein.  "Our new logo growth and heightened deal velocity reflect the power of our global platform and the resiliency of our business.  As we close out the year, we remain focused on delivering for our customers, maintaining our momentum, and investing in our global platform to support long-term growth." 

The weighted-average lag between leases signed during the third quarter of 2020 and the contractual commencement date was seven months. 

In addition to new leases signed, Digital Realty also signed renewal leases representing $161 million of annualized GAAP rental revenue during the quarter.  Rental rates on renewal leases signed during the third quarter of 2020 rolled down 0.2% on a cash basis and up 0.4% on a GAAP basis. 

New leases signed during the third quarter of 2020 are summarized by region as follows:

















Annualized GAAP













Base Rent




GAAP Base Rent




GAAP Base Rent

 The Americas


(in thousands)


Square Feet


per Square Foot


Megawatts


per Kilowatt

 0-1 MW



$14,491


67,724



$214


6.1



$199

 > 1 MW



12,340


99,141



124


9.6



107

 Other (1)



62


1,394



45




Total



$26,894


168,259



$160


15.7



$143















 Europe (2)














 0-1 MW



$12,116


47,928



$253


4.1



$245

 > 1 MW



19,715


117,021



168


12.4



133

 Other (1)



281


1,056



266




Total



$32,112


166,004



$193


16.5



$161















 Asia Pacific (2)














 0-1 MW



$2,563


13,492



$190


1.0



$220

 > 1 MW



13,476


73,238



184


9.0



125

 Other (1)



93


2,733






Total



$16,133


89,463



$180


10.0



$134















All Regions (2)














 0-1 MW



$29,171


129,144



$226


11.1



$218

 > 1 MW



45,532


289,400



157


31.0



123

 Other (1)



436


5,183



84




Total



$75,138


423,726



$177


42.1



$148















Interconnection



$13,576


N/A



N/A


N/A



N/A















Grand Total



$88,714


423,726



$177


42.1



$148


Note:  Totals may not foot due to rounding differences. 

(1)

Other includes Powered Base Building shell capacity as well as storage and office space within fully improved data center facilities. 

(2)

Based on quarterly average exchange rates during the three months ended September 30, 2020. 

Investment Activity

During the third quarter of 2020, Digital Realty closed on the previously announced acquisition of the freehold to the land under its Hanauer Landstraße campus in Frankfurt for €185 million, or approximately $217 million.  The site includes nine Interxion data centers previously subject to leasehold agreements with approximately nine years of remaining lease term, along with Interxion's German headquarters office as well as several buildings currently leased to other customers.  Interxion now owns the freehold to all 15 data centers on its Frankfurt campus. 

During the third quarter of 2020, Digital Realty acquired Altus IT, the leading carrier-neutral data center provider in Croatia, for approximately €11 million, or approximately $13 million.  Altus IT's highly-connected data center provides access to more than 100 customers, approximately 50 connectivity providers – including five tier-one carriers – and two main internet exchanges, establishing it as one of the most interconnected communities within Southeastern Europe. 

Digital Realty also closed on the previously announced sale of a property in Gronigen, the Netherlands for €20 million, or approximately $23 million.  The property is expected to generate 2020 cash net operating income of approximately €1.3 million, or approximately $1.6 million, representing a 6.7% cap rate. 

During the third quarter of 2020, Digital Realty acquired the freehold to a parcel of land within approximately one kilometer of its existing campus in Vienna, Austria for €17 million, or approximately $19 million.  The expansion parcel totals 22,000 square meters that will support the development of up to 40 megawatts of additional IT capacity.  The parcel will be fully connected to the existing campus, the most highly connected in the Central and Eastern European region with 120 carriers, four Internet Exchanges and direct access to seven global cloud platforms.

Balance Sheet

Digital Realty completed the following financing transactions during the third quarter of 2020. 

  • In early August, Digital Realty issued approximately 1.6 million shares of common stock under the company's at-the-market equity offering program at a weighted average price of $160.15 per share, generating gross proceeds of approximately $249 million.
  • Also in early August, Digital Realty redeemed all $300 million of its outstanding 3.625% notes due 2022 and all $500 million of its outstanding 3.950% notes due 2022.
  • In early September, Digital Realty redeemed all $250 million of its 6.350% Series I preferred stock.
  • In late September, Digital Realty closed an offering of €750 million, or approximately $880 million, of 1.0% Euro bonds due 2032 as well as €300 million, or approximately $350 million, of floating rate notes due 2022.
  • Likewise in late September, Digital Realty settled the remaining 9.775 million shares subject to the forward sale agreements originally entered into during the third quarter of 2018, generating net proceeds of approximately $1 billion.
  • Subsequent to quarter-end, Digital Realty redeemed all £300 million of its 4.750% notes due 2023 as well as all $250 million of its 5.875% Series G preferred stock.

Digital Realty had approximately $12.9 billion of total debt outstanding as of September 30, 2020, comprised of $12.7 billion of unsecured debt and approximately $0.2 billion of secured debt.  At the end of the third quarter of 2020, net debt-to-Adjusted EBITDA was 5.6x, debt plus-preferred-to-total enterprise value was 25.0% and fixed charge coverage was 4.4x. 

COVID-19

Throughout the COVID-19 global pandemic, Digital Realty's data centers around the world have remained fully operational in accordance with business continuity and pandemic response plans, prioritizing the health and safety of employees, customers and partners while ensuring service levels are maintained.  Digital Realty data centers have been deemed essential operations, allowing for critical personnel to remain in place and continue to provide services and support for customers.  Construction activity has been somewhat delayed in a few markets due to government restrictions in certain locations and/or limited availability of labor.  In some instances, these delays have impacted scheduled delivery dates.  We are monitoring the situation closely and remain in frequent communication with customers, contractors and suppliers.  We have proactively managed our supply chain, and we believe we have acquired the vast majority of the equipment needed to complete our 2020 development activities.  We believe we have ample liquidity to fund our business needs, given the $971 million of cash on the balance sheet and $2.5 billion of availability under our global revolving credit facilities as of September 30, 2020.  While we have not experienced any significant business disruptions from the COVID-19 pandemic to date, we cannot predict what impact the COVID-19 pandemic may have on our future financial condition, results of operations or cash flows due to numerous uncertainties. 

2020 Outlook

Digital Realty raised its 2020 core FFO per share outlook from $6.00-$6.10 to $6.10-$6.15.  The assumptions underlying the outlook are summarized in the following table. 










As of


As of


As of

 Top-Line and Cost Structure


May 7, 2020


July 30, 2020


October 29, 2020

Total revenue


$3.725 - $3.825 billion


$3.775 - $3.825 billion


$3.850 - $3.875 billion

Net non-cash rent adjustments (1)


($20 - $30 million)


($20 - $30 million)


($20 - $30 million)

Adjusted EBITDA


$2.075 - $2.125 billion


$2.100 - $2.125 billion


$2.150 - $2.175 billion

G&A


$320 - $330 million


$320 - $330 million


$325 - $335 million








 Internal Growth







Rental rates on renewal leases







Cash basis


Down low single-digits


Down low single-digits


Slightly negative

GAAP basis


Unchanged


Unchanged


Slightly positive

Year-end portfolio occupancy (2)


85.0% - 86.0%


85.0% - 86.0%


85.0% - 86.0%

"Same-capital" cash NOI growth (3)


(2.5%) - (3.5%)


(2.5%) - (3.5%)


(1.5%) - (2.5%)








Foreign Exchange Rates







U.S. Dollar / Pound Sterling


$1.20 - $1.25


$1.20 - $1.25


$1.20 - $1.30

U.S. Dollar / Euro


$1.05 - $1.10


$1.05 - $1.15


$1.10 - $1.15








 External Growth







Dispositions







Dollar volume


$0.6 - $1.0 billion


$0.6 - $1.0 billion


$0.6 - $1.0 billion

Cap rate


0.0% - 12.0%


0.0% - 12.0%


0.0% - 12.0%

Development







CapEx (4)


$1.9 - $2.2 billion


$1.9 - $2.2 billion


$1.9 - $2.2 billion

Average stabilized yields


9.0% - 15.0%


9.0% - 15.0%


9.0% - 15.0%

Enhancements and other non-recurring CapEx (5)


$5 - $10 million


$5 - $10 million


$5 - $10 million

Recurring CapEx + capitalized leasing costs (6)


$220 - $230 million


$220 - $230 million


$200 - $210 million








 Balance Sheet







Long-term debt issuance







Dollar amount


$1.9 billion


$2.5 billion


$3.7 billion

Pricing


1.00%


1.00% - 1.25%


1.00%

Timing


Early 2020


Early-to-mid 2020


Early-to-mid 2020








 Net income per diluted share


$1.60 - $1.75


$1.20 - $1.25


$1.25 - $1.30

Real estate depreciation and (gain) / loss on sale


$3.50 - $3.50


$3.90 - $3.90


$3.90 - $3.90

 Funds From Operations / share (NAREIT-Defined)


$5.10 - $5.25


$5.10 - $5.15


$5.15 - $5.20

Non-core expenses and revenue streams


$0.80 - $0.85


$0.90 - $0.95


$0.95 - $0.95

 Core Funds From Operations / share


$5.90 - $6.10


$6.00 - $6.10


$6.10 - $6.15

Foreign currency translation adjustments


$0.05 - $0.15


$0.05 - $0.15


$0.00 - $0.15

 Constant-Currency Core FFO / share


$5.95 - $6.25


$6.05 - $6.25


$6.10 - $6.30



(1)

Net non-cash rent adjustments represent the sum of straight-line rental revenue and straight-line rent expense, as well as the amortization of above- and below-market leases (i.e., ASC 805 adjustments).

(2)

Reflects inclusion of the Interxion portfolio, which was approximately 75% occupied as of September 30, 2020. 

(3)

The "same-capital"pool includes properties owned as of December 31, 2018 with less than 5% of total rentable square feet under development.  It also excludes properties that were undergoing, or were expected to undergo, development activities in 2019–2020, properties classified as held for sale, and properties sold or contributed to joint ventures for all periods presented. 

(4)

Includes land acquisitions. 

(5)

Other non-recurring CapEx represents costs incurred to enhance the capacity or marketability of operating properties, such as network fiber initiatives and software development costs. 

(6)

Recurring CapEx represents non-incremental improvements required to maintain current revenues, including second-generation tenant improvements and leasing commissions. 

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures, including FFO, core FFO and Adjusted EBITDA.  A reconciliation from U.S. GAAP net income available to common stockholders to FFO, a reconciliation from FFO to core FFO, and definitions of FFO and core FFO are included as an attachment to this document.  A reconciliation from U.S. GAAP net income available to common stockholders to Adjusted EBITDA, a definition of Adjusted EBITDA and definitions of net debt-to-Adjusted EBITDA, debt-plus-preferred-to-total enterprise value, cash NOI, and fixed charge coverage ratio are included as an attachment to this document. 

Investor Conference Call

Prior to Digital Realty's investor conference call at 5:30 p.m. EDT / 2:30 p.m. PDT on October 29, 2020, a presentation will be posted to the Investors section of the company's website at https://investor.digitalrealty.com/.  The presentation is designed to accompany the discussion of the company's third quarter 2020 financial results and operating performance.  The conference call will feature Chief Executive Officer A. William Stein and Chief Financial Officer Andrew P. Power. 

To participate in the live call, investors are invited to dial (888) 317-6003 (for domestic callers) or (412) 317-6061 (for international callers) and reference the conference ID# 1657717 at least five minutes prior to start time.  A live webcast of the call will be available via the Investors section of Digital Realty's website at https://investor.digitalrealty.com/

Telephone and webcast replays will be available after the call until November 29, 2020.  The telephone replay can be accessed by dialing (877) 344-7529 (for domestic callers) or (412) 317-0088 (for international callers) and providing the conference ID# 10148191.  The webcast replay can be accessed on Digital Realty's website. 

About Digital Realty

Digital Realty supports the world's leading enterprises and service providers by delivering the full spectrum of data center, colocation and interconnection solutions.  PlatformDIGITAL®, the company's global data center platform, provides customers a trusted foundation and proven Pervasive Datacenter Architecture PDx™ solution methodology for scaling digital business and efficiently managing data gravity challenges.  Digital Realty's global data center footprint gives customers access to the connected communities that matter to them with more than 284 facilities in 48 metros across 23 countries on six continents.  To learn more about Digital Realty, please visit digitalrealty.com or follow us on LinkedIn and Twitter

Contact Information

Andrew P. Power
Chief Financial Officer
Digital Realty 
(415) 738–6500

John J. Stewart / Jim Huseby
Investor Relations
Digital Realty
(415) 738–6500

Consolidated Quarterly Statements of Operations

Unaudited and Dollars in Thousands, Except Per Share Data



























Three Months Ended



Nine Months Ended




30-Sep-20



30-Jun-20



31-Mar-20



31-Dec-19



30-Sep-19




30-Sep-20



30-Sep-19

Rental revenues



$726,441



$698,041



$579,774



$549,733



$564,975




$2,004,256



$1,716,325

Tenant reimbursements - Utilities



155,111



141,576



113,520



107,518



114,719




410,207



323,697

Tenant reimbursements - Other



53,654



62,630



56,943



59,641



57,466




173,227



176,154

Interconnection & other



85,725



85,428



69,835



65,576



65,312




240,988



197,712

Fee income



3,687



4,353



2,452



4,814



3,994




10,492



6,840

Other



50



967



813



181






1,830



1,050

Total Operating Revenues



$1,024,668



$992,995



$823,337



$787,463



$806,466




$2,841,000



$2,421,778
























Utilities



$177,925



$160,173



$129,526



$125,127



$132,565




$467,623



$380,297

Rental property operating



180,755



172,474



136,182



129,034



126,866




489,411



386,120

Property taxes



39,732



45,071



42,123



42,541



38,255




126,926



117,052

Insurance



2,926



3,370



3,547



3,055



3,103




9,843



9,535

Depreciation & amortization



365,842



349,165



291,457



275,008



286,718




1,006,464



888,766

General & administration



90,431



90,649



62,266



53,540



49,862




243,346



154,156

Severance, equity acceleration, and legal expenses



920



3,642



1,272



1,130



123




5,834



2,271

Transaction and integration expenses



14,953



15,618



56,801



17,106



4,115




87,372



10,819

Impairment of investments in real estate



6,482












6,482



5,351

Other expenses



297



22



114



1,989



92




433



12,129

Total Operating Expenses



$880,263



$840,184



$723,288



$648,530



$641,699




$2,443,734



$1,966,496
























Operating Income



$144,405



$152,811



$100,049



$138,933



$164,767




$397,266



$455,282
























Equity in (loss) earnings of unconsolidated joint ventures



(2,056)



(7,632)



(78,996)



11,157



(19,269)




(88,684)



(3,090)

Gain on sale / deconsolidation



10,410





304,801



267,651






315,211



67,497

Interest and other income (expense), net



4,348



22,163



(3,542)



10,734



16,842




22,969



55,266

Interest (expense)



(89,499)



(79,874)



(85,800)



(80,880)



(84,574)




(255,173)



(272,177)

Income tax benefit (expense)



(16,053)



(11,490)



(7,182)



1,731



(4,826)




(34,725)



(13,726)

Loss from early extinguishment of debt



(53,007)





(632)





(5,366)




(53,639)



(39,157)

Net (Loss) / Income



($1,452)



$75,978



$228,698



$349,326



$67,574




$303,225



$249,895
























Net (income) loss attributable to noncontrolling interests



1,316



(1,147)



(4,684)



(13,042)



(1,077)




(4,515)



(6,418)

Net Income Attributable to Digital Realty Trust, Inc.



($136)



$74,831



$224,014



$336,284



$66,497




$298,710



$243,477
























Preferred stock dividends, including undeclared dividends



(20,712)



(21,155)



(21,155)



(20,707)



(16,670)




(63,022)



(54,283)

Issuance costs associated with redeemed preferred stock



(16,520)












(16,520)



(11,760)

Net (Loss) / Income Available to Common Stockholders



($37,368)



$53,676



$202,859



$315,577



$49,827




$219,168



$177,434
























Weighted-average shares outstanding - basic



270,214,413



267,569,823



222,163,324



208,776,355



208,421,470




253,377,527



208,173,995

Weighted-average shares outstanding - diluted



270,214,413



270,744,408



224,474,295



210,286,278



209,801,771




256,362,579



209,199,535

Weighted-average fully diluted shares and units



281,523,515



278,719,109



232,753,630



218,901,078



218,755,597




264,401,464



218,280,351
























Net (loss) / income per share - basic



($0.14)



$0.20



$0.91



$1.51



$0.24




$0.86



$0.85

Net (loss) / income per share - diluted



($0.14)



$0.20



$0.90



$1.50



$0.24




$0.85



$0.85

 

 

Funds From Operations and Core Funds From Operations

Unaudited and in Thousands, Except Per Share Data


























Three Months Ended



Nine Months Ended

Reconciliation of Net Income to Funds From Operations (FFO)



30-Sep-20



30-Jun-20



31-Mar-20



31-Dec-19



30-Sep-19




30-Sep-20



30-Sep-19
























Net (Loss) / Income Available to Common Stockholders



($37,368)



$53,676



$202,859



$315,577



$49,827




$219,167



$177,434

Adjustments:























Non-controlling interest operating partnership



(1,000)



1,400



7,800



13,100



2,300




8,200



8,000

Real estate related depreciation & amortization (1)



358,619



342,334



286,517



271,371



283,090




987,470



877,869

Unconsolidated JV real estate related depreciation & amortization



19,213



17,123



19,923



21,631



13,612




56,259



31,086

(Gain) on real estate transactions



(10,410)



-



(304,801)



(267,651)



-




(315,211)



-

Impairment of investments in real estate



6,482



-



-



-



-




6,482



5,351

Funds From Operations



$335,536



$414,533



$212,298



$354,028



$348,829




$962,367



$1,099,740
























Funds From Operations - diluted



$335,536



$414,533



$212,298



$354,028



$348,829




$962,367



$1,099,740
























Weighted-average shares and units outstanding - basic



278,079



275,545



230,443



217,391



217,375




261,416



217,255

Weighted-average shares and units outstanding - diluted (2)



281,524



278,719



232,754



218,901



218,756




264,401



218,280
























Funds From Operations per share - basic



$1.21



$1.50



$0.92



$1.63



$1.60




$3.68



$5.06
























Funds From Operations per share - diluted (2)



$1.19



$1.49



$0.91



$1.62



$1.59




$3.64



$5.04




Three Months Ended



Nine Months Ended

Reconciliation of FFO to Core FFO



30-Sep-20



30-Jun-20



31-Mar-20



31-Dec-19



30-Sep-19




30-Sep-20



30-Sep-19
























Funds From Operations - diluted



$335,536



$414,533



$212,298



$354,028



$348,829




$962,367



$1,099,740

Termination fees and other non-core revenues (3)



(5,713)



(21,908)



(2,425)



(5,634)



(16,792)




(30,046)



(48,063)

Transaction and integration expenses



14,953



15,618



56,801



17,106



4,115




87,372



10,819

Loss from early extinguishment of debt



53,007



-



632



-



5,366




53,639



39,157

Issuance costs associated with redeemed preferred stock



16,520



-



-



-



-




16,520



11,760

Severance, equity acceleration, and legal expenses (4)



920



3,642



1,272



1,130



123




5,834



2,271

(Gain) / Loss on FX revaluation



10,312



17,526



81,288



(10,422)



23,136




109,126



28,489

(Gain) on contribution to unconsolidated JV, net of related tax



-



-



-



-



-




-



(58,497)

Other non-core expense adjustments



6,697



22



5,509



(1,511)



92




12,228



12,129

Core Funds From Operations - diluted



$432,232



$429,433



$355,375



$354,697



$364,869




$1,217,040



$1,097,805
























Weighted-average shares and units outstanding - diluted (2)



281,524



278,719



232,754



218,901



218,756




264,401



218,280
























Core Funds From Operations per share - diluted (2)



$1.54



$1.54



$1.53



$1.62



$1.67




$4.60



$5.03

























(1) Real Estate Related Depreciation & Amortization


Three Months Ended



Nine Months Ended




30-Sep-20



30-Jun-20



31-Mar-20



31-Dec-19



30-Sep-19




30-Sep-20



30-Sep-19
























Depreciation & amortization per income statement



$365,842



$349,165



$291,457



$275,008



$286,718




1,006,464



888,766

Non-real estate depreciation



(7,223)



(6,831)



(4,940)



(3,637)



(3,628)




(18,994)



(10,897)

Real Estate Related Depreciation & Amortization



$358,619



$342,334



$286,517



$271,371



$283,090




$987,470



$877,869



(2)

For all periods presented, we have excluded the effect of dilutive series C, series G, series H, series I, series J, series K and series L preferred stock, as applicable, that may be converted into common stock upon the occurrence of specified change in control transactions as described in the articles supplementary governing the series C, series G, series H, series I, series J, series K and series L preferred stock, as applicable, which we consider highly improbable. See above for calculations of diluted FFO and the share count detail section that follows the reconciliation of core FFO to AFFO for calculations of weighted average common stock and units outstanding.  For definitions and discussion of FFO and core FFO, see the definition section.

(3)

Includes lease termination fees and certain other adjustments that are not core to our business.

(4)

Relates to severance and other charges related to the departure of company executives and integration-related severance.

 

 

Adjusted Funds From Operations (AFFO)

Unaudited and in Thousands, Except Per Share Data


























Three Months Ended



Nine Months Ended

 Reconciliation of Core FFO to AFFO



30-Sep-20



30-Jun-20



31-Mar-20



31-Dec-19



30-Sep-19




30-Sep-20



30-Sep-19
























 Core FFO available to common stockholders and unitholders



$432,232



$429,433



$355,375



$354,697



$364,869




$1,217,040



$1,097,805

Adjustments:























Non-real estate depreciation



7,223



6,831



4,940



3,637



3,628




18,994



10,897

Amortization of deferred financing costs



3,655



3,661



4,260



3,064



2,900




11,576



10,298

Amortization of debt discount/premium



987



1,011



943



612



466




2,941



1,741

Non-cash stock-based compensation expense



15,969



15,060



12,153



8,937



8,906




43,182



25,966

Straight-line rental revenue



(10,017)



(10,928)



(15,404)



(13,994)



(12,764)




(36,349)



(41,776)

Straight-line rental expense



3,934



7,373



1,460



(342)



(209)




12,767



1,342

Above- and below-market rent amortization



2,360



3,794



3,294



4,109



2,824




9,448



12,988

Deferred tax expense



6,421



(150)



(792)



(998)



(1,418)




5,479



(17,794)

Leasing compensation & internal lease commissions (1)



6,052



1,739



2,793



3,646



3,254




10,584



10,860

Recurring capital expenditures (2)



(53,683)



(38,796)



(34,677)



(54,731)



(48,408)




(127,156)



(125,982)
























AFFO available to common stockholders and unitholders (3)



$415,133



$419,028



$334,345



$308,637



$324,048




$1,168,506



$986,345
























Weighted-average shares and units outstanding - basic



278,079



275,545



230,443



217,391



217,375




261,416



217,255

Weighted-average shares and units outstanding - diluted (4)



281,524



278,719



232,754



218,901



218,756




264,401



218,280
























AFFO per share - diluted (4)



$1.47



$1.50



$1.44



$1.41



$1.48




$4.42



$4.52
























 Dividends per share and common unit



$1.12



$1.12



$1.12



$1.08



$1.08




$3.36



$3.24
























Diluted AFFO Payout Ratio



76.0%



74.5%



78.0%



76.6%



72.9%




76.0%



71.7%



























Three Months Ended



Nine Months Ended

Share Count Detail



30-Sep-20



30-Jun-20



31-Mar-20



31-Dec-19



30-Sep-19




30-Sep-20



30-Sep-19
























Weighted Average Common Stock and Units Outstanding



278,079



275,545



230,443



217,391



217,375




261,416



217,255

Add: Effect of dilutive securities



3,445



3,174



2,311



1,510



1,381




2,985



1,025

Weighted Avg. Common Stock and Units Outstanding - diluted



281,524



278,719



232,754



218,901



218,756




264,401



218,280



(1)

The company adopted ASC 842 in the first quarter of 2019.

(2)

Recurring capital expenditures represent non-incremental building improvements required to maintain current revenues, including second-generation tenant improvements and external leasing commissions. Recurring capital expenditures do not include acquisition costs contemplated when underwriting the purchase of a building, costs which are incurred to bring a building up to Digital Realty ' s operating standards, or internal leasing commissions.

(3)

For a definition and discussion of AFFO, see the definitions section. For a reconciliation of net income available to common stockholders to FFO and core FFO, see above.

(4)

For all periods presented, we have excluded the effect of dilutive series C, series G, series H, series I, series J, series K and series L preferred stock, as applicable, that may be converted into common stock upon the occurrence of specified change in control transactions as described in the articles supplementary governing the series C, series G, series H, series I, series J, series K and series L preferred stock, as applicable, which we consider highly improbable. See above for calculations of diluted FFO available to common stockholders and unitholders and for calculations of weighted average common stock and units outstanding.

 

Consolidated Balance Sheets

Unaudited and in Thousands, Except Share and Per Share Data





























30-Sep-20


30-Jun-20


31-Mar-20


31-Dec-19


30-Sep-19

Assets





















Investments in real estate:
















Real estate



$22,125,486



$20,843,273



$20,477,290



$16,886,592



$16,407,080

Construction in progress



2,328,654



2,514,324



2,204,869



1,732,555



1,647,130

Land held for future development



198,536



175,209



137,447



147,597



150,265

Investments in real estate



$24,652,676



$23,532,806



$22,819,606



$18,766,744



$18,204,475

Accumulated depreciation and amortization



(5,250,140)



(4,945,534)



(4,694,713)



(4,536,169)



(4,298,629)

Net Investments in Properties



$19,402,536



$18,587,272



$18,124,893



$14,230,575



$13,905,846

Investment in unconsolidated joint ventures



1,059,978



1,033,235



1,064,009



1,287,109



1,035,861

Net Investments in Real Estate



$20,462,514



$19,620,507



$19,188,902



$15,517,684



$14,941,707

















Cash and cash equivalents



$971,305



$505,174



$246,480



$89,817



$7,190

Accounts and other receivables (1)



585,506



542,750



527,699



305,501



304,712

Deferred rent



510,627



496,684



484,179



478,744



471,516

Customer relationship value, deferred leasing costs & other intangibles, net



3,106,414



3,128,140



3,500,588



2,195,324



2,245,017

Acquired above-market leases, net



50,080



57,535



66,033



74,815



84,315

Goodwill



8,012,256



7,791,522



7,466,046



3,363,070



3,338,168

Assets associated with real estate held for sale





10,981





229,934



967,527

Operating lease right-of-use assets (2)



1,363,285



1,375,427



1,364,621



628,681



634,085

Other assets



373,346



333,916



268,752



184,561



178,528

Total Assets



$35,435,333



$33,862,636



$33,113,300



$23,068,131



$23,172,765

















Liabilities and Equity
















Global unsecured revolving credit facilities



$124,082



$64,492



$603,101



$234,105



$1,833,512

Unsecured term loans



512,642



799,550



771,425



810,219



796,232

Unsecured senior notes, net of discount



11,999,170



11,268,753



10,637,006



8,973,190



8,189,138

Secured debt, net of premiums



238,866



238,826



239,800



104,934



105,153

Operating lease liabilities (2)



1,444,060



1,451,152



1,431,292



693,539



699,381

Accounts payable and other accrued liabilities



2,187,025



1,828,288



1,732,318



1,007,761



938,740

Accrued dividends and distributions



571







234,620



Acquired below-market leases



135,263



139,851



145,208



148,774



153,422

Security deposits and prepaid rent



353,902



348,253



336,583



208,724



203,708

Liabilities associated with assets held for sale





238





2,700



23,534

Total Liabilities



$16,995,581



$16,139,403



$15,896,733



$12,418,566



$12,942,820

















Redeemable non-controlling interests - operating partnership



41,265



40,584



40,027



41,465



19,090

















Equity
















Preferred Stock:  $0.01 par value per share, 110,000,000 shares authorized:
















Series C Cumulative Redeemable Perpetual Preferred Stock (3)



$219,250



$219,250



$219,250



$219,250



$219,250

Series G Cumulative Redeemable Preferred Stock (4)





241,468



241,468



241,468



241,468

Series I Cumulative Redeemable Preferred Stock (5)





242,012



242,012



242,012



242,012

Series J Cumulative Redeemable Preferred Stock (6)



193,540



193,540



193,540



193,540



193,540

Series K Cumulative Redeemable Preferred Stock (7)



203,264



203,264



203,264



203,264



203,264

Series L Cumulative Redeemable Preferred Stock (8)



334,886



334,886



334,886



334,886



Common Stock: $0.01 par value per share, 392,000,000 shares authorized (9)



2,784



2,670



2,622



2,073



2,069

Additional paid-in capital



20,566,645



19,292,311



18,606,766



11,577,320



11,540,980

Dividends in excess of earnings



(3,726,901)



(3,386,525)



(3,139,350)



(3,046,579)



(3,136,668)

Accumulated other comprehensive (loss), net



(123,623)



(358,349)



(444,222)



(87,922)



(68,625)

Total Stockholders' Equity



$17,669,845



$16,984,527



$16,460,236



$9,879,312



$9,437,290

















Noncontrolling Interests
















Noncontrolling interest in operating partnership



$620,676



$633,831



$656,266



$708,163



$732,314

Noncontrolling interest in consolidated joint ventures



107,966



64,291



60,038



20,625



41,251

















Total Noncontrolling Interests



$728,642



$698,122



$716,304



$728,788



$773,565

















Total Equity



$18,398,487



$17,682,649



$17,176,540



$10,608,100



$10,210,855

















Total Liabilities and Equity



$35,435,333



$33,862,636



$33,113,300



$23,068,131



$23,172,765



(1)

Net of allowance for doubtful accounts of $19,146 and $13,753 as of September 30, 2020 and December 31, 2019, respectively.

(2)

Adoption of the new lease accounting standard required that we adjust the consolidated balance sheet to include the recognition of additional right-of-use assets and lease liabilities for operating leases. See our quarterly report on Form   10–Q filed on May   10, 2019 for additional information.

(3)

Series C Cumulative Redeemable Perpetual Preferred Stock, 6.625%, $201,250 and $201,250 liquidation preference, respectively ($25.00 per share), 8,050,000 and 8,050,000 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively.

(4)

Series   G Cumulative Redeemable Preferred Stock, 5.875%, $0 (redeemed October 15, 2020, reclassed to accounts payable as of September 30, 2020 for accounting purposes) and $250,000 liquidation preference, respectively ($25.00 per share), 0 and 10,000,000 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively.

(5)

Series   I Cumulative Redeemable Preferred Stock, 6.350%, $0 and $250,000 liquidation preference, respectively ($25.00 per share), 0 and 10,000,000 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively.

(6)

Series   J Cumulative Redeemable Preferred Stock, 5.250%, $200,000 and $200,000 liquidation preference, respectively ($25.00 per share), 8,000,000 and 8,000,000 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively.

(7)

Series   K Cumulative Redeemable Preferred Stock, 5.850%, $210,000 and $210,000 liquidation preference, respectively ($25.00 per share), 8,400,000 and 8,400,000  shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively.

(8)

Series   L Cumulative Redeemable Preferred Stock, 5.200%, $345,000 and $345,000 liquidation preference, respectively ($25.00 per share), 13,800,000 and 13,800,000  shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively.

(9)

 Common Stock: 279,920,621 and 208,900,758 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively.

 

 

Reconciliation of Earnings Before Interest, Taxes, Depreciation & Amortization

and Financial Ratios

Unaudited and Dollars in Thousands



















Three Months Ended

Reconciliation of Earnings Before Interest, Taxes, Depreciation & Amortization
(EBITDA) (1)



30-Sep-20



30-Jun-20



31-Mar-20



31-Dec-19



30-Sep-19

















Net (Loss) / Income Available to Common Stockholders



($37,368)



$53,676



$202,859



$315,577



$49,827

Interest



89,499



79,874



85,800



80,880



84,574

Loss from early extinguishment of debt



53,007





632





5,366

Income tax (benefit) expense



16,053



11,490



7,182



(1,731)



4,826

Depreciation & amortization



365,842



349,165



291,457



275,008



286,718

EBITDA



$487,033



$494,205



$587,930



$669,734



$431,311

Unconsolidated JV real estate related depreciation & amortization



19,213



17,123



19,923



21,631



13,612

Unconsolidated JV interest expense and tax expense



9,002



9,203



9,944



13,553



10,816

Severance, equity acceleration, and legal expenses



920



3,642



1,272



1,130



123

Transaction and integration expenses



14,953



15,618



56,801



17,106



4,115

(Gain) on sale / deconsolidation



(10,410)





(304,801)



(267,651)



Impairment of investments in real estate



6,482









Other non-core adjustments, net



4,945



(3,404)



85,185



(13,886)



6,436

Non-controlling interests



(1,316)



1,147



4,684



13,042



1,077

Preferred stock dividends, including undeclared dividends



20,712



21,155



21,155



20,707



16,670

Issuance costs associated with redeemed preferred stock



16,520









Adjusted EBITDA



$568,054



$558,690



$482,093



$475,366



$484,160

(1)  For definitions and discussion of EBITDA and Adjusted EBITDA, see the definitions section.




















Three Months Ended

Financial Ratios



30-Sep-20



30-Jun-20



31-Mar-20



31-Dec-19



30-Sep-19

















Total GAAP interest expense



$89,499



$79,874



$85,800



$80,880



$84,574

Capitalized interest



12,379



13,133



10,480



9,877



9,936

Change in accrued interest and other non-cash amounts



19,718



(38,478)



24,321



(30,564)



8,490

Cash Interest Expense (2)



$121,596



$54,529



$120,601



$60,193



$103,000

















Scheduled debt principal payments





57



125



210



163

Preferred dividends



20,712



21,155



21,155



20,707



16,670

Total Fixed Charges (3)



$122,590



$114,219



$117,560



$111,674



$111,343

































Coverage
















Interest coverage ratio (4)



 5.2x



 5.6x



 4.6x



 4.7x



 4.7x

Cash interest coverage ratio (5)



 4.4x



 9.1x



 3.7x



 6.7x



 4.3x

Fixed charge coverage ratio (6)



 4.4x



 4.6x



 3.8x



 3.9x



 4.0x

Cash fixed charge coverage ratio (7)



 3.8x



 6.8x



 3.2x



 5.2x



 3.8x

















Leverage
















Debt to total enterprise value (8) (9)



22.8%



23.3%



23.8%



26.9%



27.1%

Debt plus preferred stock to total enterprise value (10)



25.0%



26.0%



26.6%



30.8%



29.9%

Pre-tax income to interest expense (11)



 1.0x



 2.0x



 3.7x



 5.3x



 1.8x

Net Debt to Adjusted EBITDA (12)



 5.6x



 5.7x



 6.6x



 5.7x



 6.0x



(2)

Cash interest expense is interest expense less amortization of debt discount and deferred financing fees and includes interest that we capitalized. We consider cash interest expense to be a useful measure of interest as it excludes non-cash based interest expense.

(3)

Fixed charges consist of GAAP interest expense, capitalized interest, scheduled debt principal payments and preferred dividends.

(4)

Adjusted EBITDA divided by GAAP interest expense plus capitalized interest (including our pro rata share of unconsolidated joint venture interest expense).

(5)

Adjusted EBITDA divided by cash interest expense (including our pro rata share of unconsolidated joint venture interest expense). 

(6)

Adjusted EBITDA divided by fixed charges (including our pro rata share of unconsolidated joint venture fixed charges).

(7)

Adjusted EBITDA divided by the sum of cash interest expense, scheduled debt principal payments and preferred dividends (including our pro rata share of unconsolidated joint venture fixed charges).

(8)

Mortgage debt and other loans divided by market value of equity plus debt plus preferred stock.

(9)

Total enterprise value defined as market value of common equity plus debt plus preferred stock.

(10)

Same as (8), except numerator includes preferred stock.

(11)

Calculated as net income plus interest expense divided by GAAP interest expense.

(12)

Calculated as total debt at balance sheet carrying value, plus capital lease obligations, plus Digital Realty ' s share of joint venture debt, less cash and cash equivalents divided by the product of Adjusted EBITDA (inclusive of our share of joint venture EBITDA), multiplied by four .

Definitions

Funds From Operations (FFO) :
We calculate funds from operations, or FFO, in accordance with the standards established by the National Association of Real Estate Investment Trusts, or Nareit, in the Nareit Funds From Operations White Paper - 2018 Restatement. FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from real estate transactions, impairment of investment in real estate, real estate related depreciation and amortization (excluding amortization of deferred financing costs), unconsolidated JV real estate related depreciation & amortization, non-controlling interests in operating partnership and after adjustments for unconsolidated partnerships and joint ventures. Management uses FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization and gains and losses from property dispositions and after adjustments for unconsolidated partnerships and joint ventures, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our data centers that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our data centers, all of which have real economic effect and could materially impact our financial condition and results from operations, the utility of FFO as a measure of our performance is limited. Other REITs may not calculate FFO in accordance with the NAREIT definition and, accordingly, our FFO may not be comparable to other REITs' FFO. FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.

Core Funds from Operations (Core FFO) :
We present core funds from operations, or core FFO, as a supplemental operating measure because, in excluding certain items that do not reflect core revenue or expense streams, it provides a performance measure that, when compared year over year, captures trends in our core business operating performance. We calculate core FFO by adding to or subtracting from FFO (i) termination fees and other non-core revenues, (ii) transaction and integration expenses, (iii) loss from early extinguishment of debt, (iv) issuance costs associated with redeemed preferred stock, (v) severance, equity acceleration, and legal expenses, (vi) gain/loss on FX revaluation, (vii) gain on contribution to unconsolidated joint venture, net of related tax, and (viii) other non-core expense adjustments. Because certain of these adjustments have a real economic impact on our financial condition and results from operations, the utility of core FFO as a measure of our performance is limited. Other REITs may calculate core FFO differently than we do and accordingly, our core FFO may not be comparable to other REITs' core FFO. Core FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.

Adjusted Funds from Operations (AFFO) :
We present adjusted funds from operations, or AFFO, as a supplemental operating measure because, when compared year over year, it assesses our ability to fund dividend and distribution requirements from our operating activities. We also believe that, as a widely recognized measure of the operations of REITs, AFFO will be used by investors as a basis to assess our ability to fund dividend payments in comparison to other REITs, including on a per share and unit basis. We calculate AFFO by adding to or subtracting from core FFO (i) non-real estate depreciation, (ii) amortization of deferred financing costs, (iii) amortization of debt discount/premium, (iv) non-cash stock-based compensation expense, (v) straight-line rental revenue, (vi) straight-line rental expense, (vii) above- and below-market rent amortization, (viii) deferred tax expense, (ix) leasing compensation and internal lease commissions, and (x) recurring capital expenditures. Other REITs may calculate AFFO differently than we do and accordingly, our AFFO may not be comparable to other REITs' AFFO. AFFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.

EBITDA and Adjusted EBITDA :
We believe that earnings before interest, loss from early extinguishment of debt, income taxes, and depreciation and amortization, or EBITDA, and Adjusted EBITDA (as defined below), are useful supplemental performance measures because they allow investors to view our performance without the impact of non-cash depreciation and amortization or the cost of debt and, with respect to Adjusted EBITDA, unconsolidated joint venture real estate related depreciation & amortization, unconsolidated joint venture interest expense and tax, severance, equity acceleration, and legal expenses, transaction and integration expenses, gain on sale / deconsolidation, other non-core adjustments, net, non-controlling interests, preferred stock dividends, including undeclared dividends, and issuance costs associated with redeemed preferred stock. Adjusted EBITDA is EBITDA excluding unconsolidated joint venture real estate related depreciation & amortization, unconsolidated joint venture interest expense and tax, severance, equity acceleration, and legal expenses, transaction and integration expenses, gain on sale / deconsolidation, impairment of investments in real estate, other non-core adjustments, net, non-controlling interests, preferred stock dividends, including undeclared dividends, and issuance costs associated with redeemed preferred stock. In addition, we believe EBITDA and Adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. Because EBITDA and Adjusted EBITDA are calculated before recurring cash charges including interest expense and income taxes, exclude capitalized costs, such as leasing commissions, and are not adjusted for capital expenditures or other recurring cash requirements of our business, their utility as a measure of our performance is limited. Other REITs may calculate EBITDA and Adjusted EBITDA differently than we do and, accordingly, our EBITDA and Adjusted EBITDA may not be comparable to other REITs' EBITDA and Adjusted EBITDA. Accordingly, EBITDA and Adjusted EBITDA should be considered only as supplements to net income computed in accordance with GAAP as a measure of our financial performance.

Net Operating Income (NOI) and Cash NOI :
Net operating income, or NOI, represents rental revenue, tenant reimbursement revenue and interconnection revenue less utilities expense, rental property operating expenses, property taxes and insurance expenses (as reflected in the statement of operations). NOI is commonly used by stockholders, company management and industry analysts as a measurement of operating performance of the company's rental portfolio. Cash NOI is NOI less straight-line rents and above- and below-market rent amortization. Cash NOI is commonly used by stockholders, company management and industry analysts as a measure of property operating performance on a cash basis. However, because NOI and cash NOI exclude depreciation and amortization and capture neither the changes in the value of our data centers that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our data centers, all of which have real economic effect and could materially impact our results from operations, the utility of NOI and cash NOI as measures of our performance is limited. Other REITs may calculate NOI and cash NOI differently than we do and, accordingly, our NOI and cash NOI may not be comparable to other REITs' NOI and cash NOI. NOI and cash NOI should be considered only as supplements to net income computed in accordance with GAAP as measures of our performance.

Additional Definitions

Net debt-to-Adjusted EBITDA ratio is calculated using total debt at balance sheet carrying value, plus capital lease obligations, plus our share of JV debt, less unrestricted cash and cash equivalents divided by the product of Adjusted EBITDA (inclusive of our share of JV EBITDA) multiplied by four.

Debt-plus-preferred-to-total enterprise value is mortgage debt and other loans plus preferred stock divided by mortgage debt and other loans plus the liquidation value of preferred stock and the market value of outstanding Digital Realty Trust, Inc. common stock and Digital Realty Trust, L.P. units, assuming the redemption of Digital Realty Trust, L.P. units for shares of Digital Realty Trust, Inc. common stock.

Fixed charge coverage ratio is Adjusted EBITDA divided by the sum of GAAP interest expense, capitalized interest, scheduled debt principal payments and preferred dividends. For the Quarter Ended September 30, 2020, GAAP interest expense was $89 million, capitalized interest was $12 million and scheduled debt principal payments and preferred dividends was $21 million.


















Reconciliation of Net Operating Income (NOI)


Three Months Ended



Nine Months Ended

(in thousands)


30-Sep-20


30-Jun-20


30-Sep-19



30-Sep-20


30-Sep-19


















Operating income



$144,405



$152,811



$164,767




$397,266



$455,282


















 Fee income



(3,687)



(4,353)



(3,994)




(10,492)



(6,840)

 Other income



(50)



(967)






(1,830)



(1,050)

 Depreciation and amortization



365,842



349,165



286,718




1,006,464



888,766

 General and administrative



90,431



90,649



49,862




243,346



154,156

 Severance, equity acceleration, and legal expenses



920



3,642



123




5,834



2,271

 Transaction expenses



14,953



15,618



4,115




87,372



10,819

 Impairment in investments in real estate



6,482








6,482



5,351

 Other expenses



297



22



92




433



12,129


















Net Operating Income



$619,593



$606,587



$501,683




$1,734,875



$1,520,884



































 Cash Net Operating Income (Cash NOI)


































Net Operating Income



$619,593



$606,587



$501,683




$1,734,875



$1,520,884


















 Straight-line rental revenue



(9,215)



(10,713)



(12,673)




(33,321)



(42,208)

 Straight-line rental expense



3,674



7,296



(192)




12,465



1,381

 Above- and below-market rent amortization



2,360



3,794



2,824




9,447



12,988


















Cash Net Operating Income



$616,412



$606,964



$491,642




$1,723,466



$1,493,045

This document contains forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Such forward-looking statements include statements relating to: our expected investment and expansion activity, COVID-19, our liquidity, our joint ventures, supply and demand for data center and colocation space, our acquisition and disposition activity, pricing and net effective leasing economics, market dynamics and data center fundamentals, our strategic priorities, rent from leases that have been signed but have not yet commenced and other contracted rent to be received in future periods, rental rates on future leases, lag between signing and commencement, cap rates and yields, investment activity, the company's FFO, core FFO and net income, 2020 outlook and underlying assumptions, information related to trends, our strategy and plans, leasing expectations, weighted average lease terms, the exercise of lease extensions, lease expirations, debt maturities, annualized rent at expiration of leases, the effect new leases and increases in rental rates will have on our rental revenue, our credit ratings, construction and development activity and plans, projected construction costs, estimated yields on investment, expected occupancy, expected square footage and IT load capacity upon completion of development projects, 2020 backlog NOI, NAV components, and other forward-looking financial data. Such statements are based on management's beliefs and assumptions made based on information currently available to management. Such statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Some of the risks and uncertainties that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:

  • reduced demand for data centers or decreases in information technology spending;
  • increased competition or available supply of data center space;
  • decreased rental rates, increased operating costs or increased vacancy rates;
  • the suitability of our data centers and data center infrastructure, delays or disruptions in connectivity or availability of power, or failures or breaches of our physical and information security infrastructure or services;
  • our dependence upon significant customers, bankruptcy or insolvency of a major customer or a significant number of smaller customers, or defaults on or non-renewal of leases by customers;
  • our ability to attract and retain customers;
  • breaches of our obligations or restrictions under our contracts with our customers;
  • our inability to successfully develop and lease new properties and development space, and delays or unexpected costs in development of properties;
  • the impact of current global and local economic, credit and market conditions;
  • our inability to retain data center space that we lease or sublease from third parties;
  • information security and data privacy breaches;
  • difficulty managing an international business and acquiring or operating properties in foreign jurisdictions and unfamiliar metropolitan areas;
  • our failure to realize the intended benefits from, or disruptions to our plans and operations or unknown or contingent liabilities related to, our recent acquisitions;
  • our failure to successfully integrate and operate acquired or developed properties or businesses;
  • difficulties in identifying properties to acquire and completing acquisitions;
  • risks related to joint venture investments, including as a result of our lack of control of such investments;
  • risks associated with using debt to fund our business activities, including re-financing and interest rate risks, our failure to repay debt when due, adverse changes in our credit ratings or our breach of covenants or other terms contained in our loan facilities and agreements;
  • our failure to obtain necessary debt and equity financing, and our dependence on external sources of capital;
  • financial market fluctuations and changes in foreign currency exchange rates;
  • adverse economic or real estate developments in our industry or the industry sectors that we sell to, including risks relating to decreasing real estate valuations and impairment charges and goodwill and other intangible asset impairment charges;
  • our inability to manage our growth effectively;
  • losses in excess of our insurance coverage;
  • our inability to attract and retain talent;
  • impact on our operations and on the operations of our customers, suppliers and business partners during a pandemic, such as COVID-19;
  • environmental liabilities, risks related to natural disasters and our inability to achieve our sustainability goals;
  • our inability to comply with rules and regulations applicable to our company;
  • Digital Realty Trust, Inc. ' s failure to maintain its status as a REIT for federal income tax purposes;
  • Digital Realty Trust, L.P. ' s failure to qualify as a partnership for federal income tax purposes;
  • restrictions on our ability to engage in certain business activities;
  • changes in local, state, federal and international laws and regulations, including related to taxation, real estate and zoning laws, and increases in real property tax rates; and
  • the impact of any financial, accounting, legal or regulatory issues or litigation that may affect us.

The risks included here are not exhaustive, and additional factors could adversely affect our business and financial performance.  Several additional material risks are discussed in our annual report on Form 10–K for the year ended December 31, 2019, our quarterly reports on Form 10-Q for the quarters ended June 30, 2020 and other filings with the Securities and Exchange Commission.  Those risks continue to be relevant to our performance and financial condition.  Moreover, we operate in a very competitive and rapidly changing environment.  New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.  We expressly disclaim any responsibility to update forward-looking statements, whether as a result of new information, future events or otherwise.  Digital Realty, Digital Realty Trust, the Digital Realty logo, Turn-Key Flex and Powered Base Building are registered trademarks and service marks of Digital Realty Trust, Inc. in the United States and/or other countries. 

Cision View original content:http://www.prnewswire.com/news-releases/digital-realty-reports-third-quarter-2020-results-301163425.html

SOURCE Digital Realty

Categories: Press Releases