Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Q1 2015 Earnings Presentation
20 slides from Digital Realty Trust's earnings presentation, May 5, 2015
Slide 1: May 5, 2015
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Slide 2: The Way Forward: Top Priorities Progress Report
The Way Forward Top Priorities Progress Report WE SAID… WE DID… • Lease-up existing inventory and improve ROIC • Achieved 40 bps sequential improvement in ROIC • Align our leasing efforts and sales incentive • Up 60 bps in 2014; 100 bps cumulative turnaround program to bring inventory back into equi
Slide 3: Constant-Currency Growth 200-300 bps >Reported
Constant-Currency Growth 200-300 bps >Reported Economic Exposure Hedged with Locally-Denominated Debt As Reported Constant Currency (1) 8% 6.8% 6% 5.4% 5.1% 4% 4.1% 3.1% 2.4% 2% 2.3% 2.2% 0.6% 0% -0.8% 1Q15 / 1Q14 1Q15 / 1Q14 1Q15 / 1Q14 2015 Core Revenue Adj. EBITDA Same-Capital 1Q15 / 1Q14 FFO / s
Slide 4: Timing of Asset Sales Offsetting Currency Translation Headwinds
Timing of Asset Sales Offsetting Currency Translation Headwinds Sales Plan Drives Guidance Raise (1) Core FFO per share $5.25 $0.15 $5.23 $0.03 $0.05 $5.08 $5.00 $5.05 $0.05 $4.75 $4.50 $4.25 Original 2015 Stronger Dollar Updated Disposition Increased Sales New 2015 Guidance Constant Currency New 20
Slide 5: Credit Metrics Compare Favorably to Blue Chip REITs
Credit Metrics Compare Favorably to Blue Chip REITs Committed to a Conservative Capital Structure Net Debt / LQA Adjusted EBITDA (1) Net Debt + Preferred / LQA Adjusted EBITDA (1) 8.0x 8.0x 7.1x 8.0x 6.7x 6.6x 6.8x 6.6x 6.3x 6.2x 6.2x 6.3x 6.3x 6.2x 6.1x 5.9x 5.9x 6.0x 5.2x 5.0x 6.0x 5.2x 4.0x 4.0x
Slide 6: Improving Lease Economics Across All Product Types
Improving Lease Economics Across All Product Types Better Straight-line Rent Trends Straight-Line Rent Straight-Line Rent as % of Revenue $ in millions $24 5.8% 6% 5.2% $22 4.8% $20 5% $20 4.5% $19 4.3% $18 $19 $16 4% 3.3% $12 $13 3% $8 2% $4 1% $0 0% 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 6
Slide 7: Cleaner CapEx Classifications
Cleaner CapEx Classifications Lower Budget, More Conservative Presentation in 2015 2014 2015 G Enhancements & Other Non-Recurring CapEx Discretionary CapEx + spending on non-core assets $25 million N/A Infrequent expenditures for capitalized replacements & upgrades $40 million N/A Network fiber init
Slide 8: Driving Greater Current-Year Contribution
Driving Greater Current-Year Contribution April Showers Bring May Flowers Annualized GAAP Annualized GAAP Type of Space Total s.f. Signed (1) (2) (2) Base Rent / s.f. Base Rent Turn-Key Flex® 108,691 $160 $17.4 million Powered Base Building® - - $0.0 million Custom Solutions - - $0.0 million Colocat
Slide 9: Shortest Lag in More Than Two Years
Shortest Lag in More Than Two Years Commencement Backlog Sets Stage for Near-Term Growth $ in millions Backlog Commencement - Timing (1) Annualized GAAP Base Rent $120 $24 $80 $10 $19 $104 $40 $18 $80 M $61 M $51 M $33 M $33 $ 2Q15 3Q15 4Q15 2016 2017+ Total Backlog $ in millions months Custom Solut
Slide 10: Proactively Addressing Peak Vintage Renewals
Proactively Addressing Peak Vintage Renewals Gradually Approaching Mark-to-Market Inflection Point ® ® TKF PBB Data Center Total TKF Cash Rent % Change 2015 2016 ■ Signed renewal leases representing $9 0% -2% -2% million of annualized GAAP rental -5% -6% revenue -10% 30% -12% -15% ■ Rental rates on
Slide 11: Broad-Based Reduction in Finished Inventory
Broad-Based Reduction in Finished Inventory Down 40% Since November 2013 Investor Day (1) Finished Inventory – Major Markets Investor Day Nov. 12, 2013 As of March 31, 2015 in megawatts 12 10 8 6 4 2 - Phoenix Silicon Valley Dallas Boston Houston New York N. Virginia Chicago 1) Reflects the reductio
Slide 12: U.S. Major Market Data Center Supply
U.S. Major Market Data Center Supply (1) Supply and Demand Roughly in Equilibrium Current Supply New Construction Sublease Availablility DLR Inventory (2) in megawatts 1Q15 60 40 20 - Boston Chicago Dallas Houston N Virginia NY Metro Phoenix Silicon Valley in megawatts 4Q14 60 40 20 - Boston Chicago
Slide 13: Achieving Favorable Execution on Capital Recycling
Achieving Favorable Execution on Capital Recycling Redeploying Accretively, Enhancing Portfolio Quality Property • 100 Quannapowitt Sales Price • $31 million Sales Price / s.f. • $184 / s.f. Gain on Sale • $10 million Cap Rate • 5.0% Property • 3300 E. Birch Street Sales Price • $14 million Sales Pr
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 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 diff
Slide 17: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures 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 suppleme
Slide 18: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries Three Months Ended Reconciliation of Net Income Available to Common Stockholders to Funds From Operations (FFO) March 31, 2015 (in thousands, except per share and unit data) (unaudited) FFO
Slide 19: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries A reconciliation of the range of 2015 projected net income to projected FFO and core FFO follows: Reconciliation of Operating Income to Net Operating Income (NOI) Low - High (unaudited, in t
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