Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Q1 2014 Earnings Presentation
18 slides from Digital Realty Trust's earnings presentation, May 6, 2014
Slide 1: Charting a new path forward
Charting a new path forward. 6 May May 6,2014 2014
Slide 2: The Way Forward
The Way Forward Top Priorities OPPORTUNITY STRATEGIC DIRECTION • Excess finished inventory • Lease-up existing inventory and improve ROIC – Align our leasing efforts and sales incentive • Legacy non-data center assets, non-core program to bring inventory back into equilibrium markets and under-perfo
Slide 3: Value-Creating Joint Venture Contribution
Value-Creating Joint Venture Contribution Strong Investor Appetite for Data Centers Property • 636 Pierce Street Market • New York / New Jersey Metro Property Type • Data center JV Contribution Date • March 5, 2014 JV Valuation Price • $40.4 million Size • 108,336 square feet Occupancy • 100% Tenant
Slide 4: Sustained Leasing Momentum
Sustained Leasing Momentum Consistent Execution in a Seasonally Slow Quarter Annualized GAAP Annualized GAAP Type of Space Total s.f. Signed(1) Base Rent / s.f.(2) Base Rent(2) Turn-Key Flex® 147,410 $202 $29.8 million Powered Base 160,632 $75 $12.0 million Building® Custom Solutions - - - Colocatio
Slide 5: Strong Start to the Year
Strong Start to the Year High Face Rate, Albeit Due to Market Mix GAAP Annualized Base Rent(1) $ in millions TKF PBB Custom Solutions DC Master Lease Colo Non-Tech $200 $161 $150 $137 $112 $112 $106 $100 $64 $56 $47 $50 $0 2007 2008 2009 2010 2011 2012 2013 2014 YTD TKF Rates / s.f. $128 $153 $158 $
Slide 6: Healthy Renewal Economics
Healthy Renewal Economics(1) Stable Pricing – Positive Cash Rents Across Products Turn-Key Flex ® Powered Base Building ® Total Data Center Signed renewal leases representing $15 million of annualized GAAP rental revenue 25% Rental rates on renewals increased by 1.2% on 20.5% a cash basis and 19
Slide 7: Shorter Commencement on Recent Leasing
Shorter Commencement on Recent Leasing Six-Month Sign-to-Commencement Gap in 1Q14 $ in millions Expected Commencement Quarter 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 2016+ Acquired & Pre $66.8 $20.9 $10.4 $13.8 $.4 $7.3 $.2 $2.5 $1.3 $1.0 $.0 $.0 $1.6 $.0
Slide 8: Contractual NOI Step Function
Contractual NOI Step Function(1)(2) Annualized NOI up $20 million due to 1Q14 Leasing $ in millions $1,100 $1,090 $1,051 $39 $20 $13 $988 $16 $1,000 $24 $10 $900 $800 1Q14 1Q14-2Q14 1Q14 1Q14 leases 2Q14-4Q14 2Q14-4Q14 4Q14 2015+ leasing 2015+ Annualized dispositions + unconsolidated commenced leasi
Slide 9: 4Q13 U.S. Major Market Data Center Supply
4Q13 U.S. Major Market Data Center Supply(1) Supply Remains in Check Across Most Major Markets Available Supply New Construction Sublease Availability Potential Future Sublease Space DLR Inventory In megawatts 80 60 48 45 40 25 22 19 20 18 15 11 - Boston Chicago Dallas Houston N Virginia NY Metro Ph
Slide 10: 1Q14 U.S. Major Market Data Center Supply
1Q14 U.S. Major Market Data Center Supply(1) Healthy Demand, but Northern Virginia Stands Out Current Supply New Construction Sublease Availablility DLR Inventory In megawatts 80 67 60 44 40 28 24 17 18 20 13 10 - Boston Chicago Dallas Houston N Virginia NY Metro Phoenix Silicon Valley 1) Based on D
Slide 11: Credit Metrics Compare Favorably to REIT Peers
Credit Metrics Compare Favorably to REIT Peers Leverage is Conservative at 5.0x Net Debt / LQA Adjusted EBITDA(3) Net Debt + Preferred / LQA Adjusted EBITDA(3) 8.0x 7.2x 7.1x 8.0x 7.3x 7.2x 7.0x 5.9x 6.2x 5.9x 6.0x 5.7x 5.6x 5.7x 5.3x 5.0x 6.0x 5.3x 4.0x 4.0x 2.0x 2.0x 0.0x (2) (2) (1) 0.0x (2) (1)
Slide 12: Locking in Long-Term Capital
Locking in Long-Term Capital Run-Rate Steps Down in the Second Quarter Core FFO per share $1.30 $1.28 $0.07 $1.20 $0.02 $0.01 $1.18 $1.10 (1) (2) 1Q14 Core FFO - Actual Long-term capital 1Q14-2Q14 dispositions Opex/G&A increase Core FFO Run Rate & expirations 1) Core FFO is a non-GAAP financial meas
Slide 13: Appendix
Appendix 13
Slide 14: 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 15: 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 supplementa
Slide 16: 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, 2014 (in thousands, except per share and unit data) (unaudited) FFO
Slide 17: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Operating Income to Net Operating Income (NOI) A reconciliation of the range of 2014 projected net income to projected FFO and core FFO follows: (in thousands) (unaudited)
Slide 18: Forward Looking Statement
Forward Looking Statement 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 o