Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Q4 2015 Earnings Presentation
30 slides from Digital Realty Trust's earnings presentation, Feb 25, 2016
Slide 1: Digital Realty | Telx February 25, 2016
fi DIGITAL REALTY | telx February 25, 2016
Slide 2: The Next Horizon: Three-Year Guideposts
The Next Horizon Three-Year Guideposts 1 SUPERIOR RETURNS Deliver superior risk-adjusted total shareholder returns 2 CAPITAL ALLOCATION Prudently allocate capital to opportunistically extend global campus footprint 3 PRODUCT OFFERINGS Our Focus Drive higher returns on the asset base by diversifying
Slide 3: Global Service Infrastructure Platform
Global Service Infrastructure Platform Deliver Basic Services, Enable Partners Digital Realty is focused on foundational services to enable customers and partners to service thousands of their customers FOCUSED ON FOUNDATIONAL SERVICES FUNNEL APPROACH TOWARDS CUSTOMERS ADVANCED SERVICES Cloud Hostin
Slide 4: Achieving Favorable Execution on Capital Recycling
Achieving Favorable Execution on Capital Recycling Redeploying Accretively, Enhancing Portfolio Quality Property 650 Randolph / Somerset, NJ Sales Price $9.1 million Sales Price / s.f. $71 / s.f. Gain (Loss) on Sale ($0.1 million) Cap Rate N/A Closing Date December 2015 Property Kato & Page / Fremon
Slide 5: U.S. Major Market Data Center Supply
U.S. Major Market Data Center Supply (1) Fundamentals Firming Across the Board in megawatts 4Q15 (2) Current Supply New Construction Sublease Availablility Digital Realty Inventory 60 40 20 - Boston Chicago Dallas Houston N Virginia NY Metro Phoenix Silicon Valley in megawatts 3Q15 (2) Current Suppl
Slide 6: Decelerating Global Economic Growth Outlook
Decelerating Global Economic Growth Outlook Data Center Demand Drivers Are a Bright Spot 3Q15 CALL CURRENT October 29, 2015 February 19, 2016 2016E 2017E Global GDP Growth Forecast (1) 2016E: 3.6% 2016E: 3.4% 3.4% 3.6% MACROECONOMIC U.S. GDP Growth Forecast (1) 2016E: 2.8% 2016E: 2.6% 2.6% 2.6% U.S.
Slide 7: Graham's Golden Rules
Graham’s Golden Rules Defensive Requirements for the Intelligent Investor (1) 1 Adequate Size of the Enterprise $19 Bn ENTERPRISE VALUE (2) 2 Sufficiently Strong Financial Condition BBB / Baa2 / BBB INVESTMENT GRADE BALANCE SHEET 3 Earnings Stability GFC 05 06 07 08 09 10 11 12 13 14 15 + GROWTH IN
Slide 8: Financial Results
Financial Results
Slide 9: M&A Scorecard
M&A Scorecard On Track to Meet Key 2016 Financial Targets Completed / On-Track Slightly Behind Off-Track OPERATING REVENUE CORE EBITDA (1) EXPENSE SYNERGIES 2016 $385+ million $148+ million $15+ million TARGET 4Q15 $89.5 million $33.4 million ACTUAL 1Q15 ACTUAL $83.5 million $30.4 million 1) Represe
Slide 10: Sustained Leasing Momentum
Sustained Leasing Momentum Hunting and Farming Historical Lease Signings Total s.f. Annualized GAAP Annualized GAAP Annualized GAAP Base Rent (2) Product Type Signed (1) Base Rent / s.f. (2) Base Rent (2) Turn-Key Flex® 168,935 $166 $28.0 million Powered Base Building® – $0 $1.0 million Colocation (
Slide 11: Healthy Backlog Sets a Solid Foundation
Healthy Backlog Sets a Solid Foundation Front-End Loaded in 1H16 Backlog Commencement Timing (1) $ in millions Annualized GAAP Base Rent $100 $8 $84 $75 $12 $64 $50 $25 $ 2016 2017 2018+ Total Backlog Note: Amounts shown represent GAAP annualized base rent from signed but not yet commenced leases an
Slide 12: Cycling Through Peak Vintage Renewals
Cycling Through Peak Vintage Renewals Approaching Mark-to-Market Inflection Point • Signed renewal leases representing $13 Total million of annualized GAAP rental revenue 15% 40% Data Center • Rental rates on renewals increased by Cash Rent GAAP Rent 15% on a cash basis and increased by 40% Change C
Slide 13: 4Q15 Core FFO / Share Out-Performance
4Q15 Core FFO / Share Out-Performance Lower G&A + Telx Results Drive Upside to Forecast 4Q15 Core FFO / Share Reconciliation $1.40 $0.01 $1.38 $0.01 $1.35 $0.01 $0.02 $0.03 $1.30 $1.30 $1.25 $1.20 4Q15 Core FFO G&A Telx Synergies Lower Interest One-Time OpEx 4Q15 Core FFO Guidance Outperformance Sav
Slide 14: Constant-Currency Growth
Constant-Currency Growth FX Represents ~ 150-200 bps Drag on Reported Results (1) As Reported Constant Currency 25% 15% 23.4% 21.4% 21.2% Includes 18.9% Telx 11.9% 10% 10.1% 9.6% 9.2% 8.3% 7.9% Digital Realty 6.3% 6.0% 5% Standalone 4.9% 3.4% – 4Q15 / 4Q14 4Q15 / 4Q14 4Q15 / 4Q14 4Q15 / 4Q14 2015 /
Slide 15: Putting Exposure in Perspective
Putting Exposure in Perspective Benefits of Diversification and Scale on Display HOT BUTTON EXPOSURE BY ABR 2016 CORE FFO EXPOSURE (% OF GUIDANCE) (1) 1.6% ENERGY TENANTS CURRENCY / COMMODITY EXPOSURE LESS THAN 96% 1.4% UNICORNS 3% NOT IMPACTED NON-EXPOSED 1.3% GBP +/- 10% 1.3% HOUSTON (2) 0.7% LIBO
Slide 16: Closing the GAAP on Straight-Line Rent
Closing the GAAP on Straight-Line Rent Consistently Improving Quality of Earnings Straight-Line Rental Revenue Straight-Line Rent as % of Revenue $ in millions $30 6% 5.9% 5.5% 6.0% 5.5% 5.2% 5.0% $22.7 4.5% $20 $21.2 $21.3 4.3% 5% $19.9 $19.7 $19.9 $18.6 $17.6 $14.5 $13.4 $13.6 3.5% 3.3% $10 3.1% 3
Slide 17: Back-End Loaded Debt Maturity Schedule
Back-End Loaded Debt Maturity Schedule No Bar Too Tall; Nominal Near-Term Maturities Extended Global Unsecured Revolving Credit Facility and Term Loan Maturities to 2021 and 2023 Secured Mortgage Debt (1) Unsecured Prudential Shelf Facility (2) Pro Rata Share of JV Debt (3) (4) (5) Unsecured Notes U
Slide 18: Consistent Execution on Strategic Vision
Consistent Execution on Strategic Vision Recreate S&U on Steady Per-Share Growth in FFO, AFFO and Dividends previous page in Column Graphs Successful 4Q15 Initiatives Closed Telx Acquisition Truly transformational transaction – strategic, accretive in year one, and prudently financed Results Surpa
Slide 19: Appendix
Appendix
Slide 20: 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 21: Definitions of Non-GAAP Financial Measures (cont.)
Definitions of Non-GAAP Financial Measures (cont.) 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 22: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries Condensed Consolidated Income Statements (in thousands, except share and per share data) (unaudited) Three Months Ended Year Ended December 31, 2015 December 31, 2014 December 31, 2015 Decem
Slide 23: Reconciliation of Non-GAAP Items: Balance Sheet
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands) December 31, 2015 December 31, 2014 ASSETS (unaudited) Investments in real estate Properties: Land $ 689,573 $ 671,602 Acquired ground le
Slide 24: Reconciliation of Non-GAAP Items: Liabilities and Equity
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands) LIABILITIES AND EQUITY Global revolving credit facility $ 967,884 $ 525,951 Unsecured term loan 924,568 976,600 Unsecured senior notes, n
Slide 25: Reconciliation of Net Income to FFO
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Net Income Available to Common Stockholders to Funds From Operations (FFO) (in thousands, except per share and unit data) (unaudited) Three Months Ended Year Ended December
Slide 26: Reconciliation to EBITDA and Adjusted EBITDA
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Net Income Available to Common Stockholders to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA (in thousands) (unaudited) Three
Slide 27: Reconciliation of FFO to Core FFO
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent 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) Three Months Ended Year Ended December 31, 2015
Slide 28: Reconciliation of Core EBITDA
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Core EBITDA is a non-GAAP financial metric that Telx uses as a supplemental measure of its operating performance that adjusts net loss to eliminate the impact of certain items that it does not consider indicative of its core operating
Slide 29: Reconciliation of Same-Capital Cash NOI
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Same-Capital Cash Net Operating Income (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, 2015 December 31, 2014 December 31, 2015 December 31,
Slide 30: 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: