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Digital Realty Trust, Inc. Reports First Quarter Core FFO Of $1.18 Per Share, Up 11.3% Over First Quarter 2012

Digital Realty Trust, Inc. Reports First Quarter Core FFO Of $1.18 Per Share,
                       Up 11.3% Over First Quarter 2012

Record first quarter for leases signed totaling over $43.7 million in
annualized GAAP rental revenue

PR Newswire

SAN FRANCISCO, April 26, 2013

SAN FRANCISCO, April 26, 2013 /PRNewswire/ --Digital Realty Trust, Inc.
(NYSE: DLR), a leading global provider of data center solutions, today
announced financial results for the first quarter of 2013. All per share
results are on a diluted share and unit basis.

Highlights:

  oReported FFO of $1.16 per share for the first quarter of 2013, up 9.4%
    from $1.06 per share for the first quarter of 2012. Excluding certain
    items that do not represent core expenses or revenue streams in each
    quarter, first quarter 2013 core FFO was $1.18 per share, up 11.3% from
    first quarter 2012 core FFO of $1.06 per share;
  oReported net income for the first quarter of 2013 of $51.7 million and net
    income available to common stockholders of $42.7 million, or $0.34 per
    share compared to $0.36 per share for the first quarter of 2012;
  oClosed our inaugural international bond offering with a £400 million
    12-year unsecured notes issuance;
  oCompleted the sale of 10.0 million shares of 5.875% Series G Cumulative
    Redeemable Preferred Stock, including partial exercise of the
    underwriters' over-allotment option, raising net proceeds of approximately
    $241.5 million;
  oAcquired four properties totaling nearly 738,000 square feet for
    approximately $78.0 million;
  oSet record for leases signed in a first quarter totaling over $43.7
    million in annualized GAAP rental revenue;
  oCommenced leases during the first quarter of 2013 totaling over $28.1
    million of annualized GAAP rental revenue; and
  oAnnounced initiative to offer network neutralecosystem to customers
    across the Company's global portfolio.

Funds from operations ("FFO"), on a diluted basis, was $159.1 million in the
first quarter of 2013, or $1.16 per share, compared to $1.16 per share in the
fourth quarter of 2012 and up 9.4% from $1.06 per share in the first quarter
of 2012. Excluding certain items that do not represent core expenses or
revenue streams, first quarter 2013 core FFO was $1.18 per share, up 11.3%
from first quarter 2012 core FFO of $1.06 per share.

FFO is a supplemental non-GAAP performance measure used by the real estate
industry to measure the operating performance of real estate investment
trusts. FFO and core FFO should not be considered as substitutes for net
income determined in accordance with U.S. GAAP as measures of financial
performance. A reconciliation from U.S. GAAP net income available to common
stockholders to FFO, a definition of FFO, a reconciliation from FFO to core
FFO, and a definition of core FFO are included as an attachment to this press
release.

Net income for the first quarter of 2013 was $51.7 million, compared to $55.9
million for the fourth quarter of 2012 and $49.3 million for the first quarter
of 2012. Net income available to common stockholders in the first quarter of
2013 was $42.7 million, or $0.34 per share, compared to $44.8 million, or
$0.36 per share, in the fourth quarter of 2012, and $39.2 million, or $0.36
per share, in the first quarter of 2012.

The Company reported total operating revenues of $358.4 million in the first
quarter of 2013, up 2.5% from $349.7 million in the fourth quarter of 2012,
and up 26.6% from $283.1 million in the first quarter of 2012.

"We are very pleased with our solid operating performance in the first quarter
and are encouraged by the high level of leasing activity that continues
today," said Michael F. Foust, Chief Executive Officer of Digital Realty. "A
significant portion of this activity during the quarter came from customers
with large requirements that we were able to satisfy with our Custom Solutions
offering. Notably, markets that experienced the highest levels of activity
included New York metro, Northern Virginia, Chicago, London and Singapore."

Leasing Activity

The Company signed leases during the quarter ended March 31, 2013 totaling
over $43.7 million of annualized GAAP rental revenue, including nearly $2.0
million of colocation revenue.

Of the total leases signed during the first quarter of 2013, nearly 221,000
square feet was for space located in the Company's U.S. portfolio. This
includes over 29,000 square feet of Turn-Key Flex℠ space leased at an average
annual GAAP rental rate of $141.00 per square foot, over 166,000 square feet
of Custom Solutions space leased at an average annual GAAP rental rate of
$108.00 per square foot, approximately 9,000 square feet of colocation space
leased at an average annual GAAP rental rate of $226.00 per square foot, and
over 16,000 square feet of non-technical space leased at an average annual
GAAP rental rate of $25.00 per square foot.

Leases signed during the first quarter of 2013 for space in the Company's
European portfolio totaled approximately 2,000 square feet of Turn-Key Flex
space leased at an average annual GAAP rental rate of $231.00 per square foot,
over 106,000 square feet of Custom Solutions space leased at an average annual
GAAP rental rate of $136.00 per square foot and over 37,000 square feet of
non-technical space leased at an average annual GAAP rental rate of $30.00 per
square foot.

Leases signed during the first quarter of 2013 for space in the Company's Asia
Pacific portfolio totaled nearly 17,000 square feet of Turn-Key Flex space
leased at an average annual GAAP rental rate of $196.00 per square foot.

For the quarter ended March 31, 2013, the Company commenced leases totaling
over $28.1 million of annualized GAAP rental revenue, including over $2.0
million of colocation revenue. 

Acquisitions Activity

In January 2013, the Company acquired a 62,000 square foot data center in
Dallas, Texas for a purchase price of $8.5 million. The fully leased property
is located approximately 3.5 miles from Digital Realty's Digital Dallas
Datacenter Campus. The Company also purchased three buildings in the Phoenix,
Arizona area totaling approximately 227,000 square feet for a purchase price
of $24.0 million. The first building totaling approximately 109,000 square
feet will be added to Digital Realty's inventory of space held for development
and is capable of supporting approximately 7.2 megawatts of IT capacity. The
seller and current tenant occupies the remaining two office buildings on a
short-term lease basis, offsetting the near-term costs for the property. 

In March 2013, the Company acquired a 120,000 square foot data center
development property in Markham, Ontario (Canada) for a purchase price of $8.4
million. The property is located approximately 17 miles north of Toronto's
central business district. The Company also completed a sale leaseback
transaction with Delta Air Lines of a 329,000 square foot data center facility
in Eagan, Minnesota, a suburb of Minneapolis for a purchase price of $37.0
million.

As of April 26, 2013, the Company's portfolio comprised 122 properties,
excluding three properties held in unconsolidated joint ventures, consisting
of 175 buildings totaling approximately 22.7 million net rentable square feet,
including 2.6 million square feet of space held for development. The
portfolio is strategically located in 32 key data center markets throughout
North America, Europe, Asia and Australia.

Balance Sheet Update

Total assets grew to approximately $9.0 billion at March 31, 2013 from $8.8
billion at December 31, 2012. Total debt increased to $4.7 billion at March
31, 2013 from $4.3 billion at December 31, 2012. Stockholders' equity was
approximately $3.3 billion at March 31, 2013, compared to approximately $3.5
billion at December 31, 2012.

In January 2013, the Company closed its inaugural international bond offering
with £400 million 12-year unsecured notes, interest on which is payable
semiannually in arrears at a rate of 4.25% per annum.

On April 9, 2013, the Company completed the sale of 10.0 million shares of its
5.875% Series G Cumulative Redeemable Preferred Stock, including partial
exercise of the underwriter's over-allotment option, raising net proceeds of
approximately $241.5 million.

"In addition to our inaugural £400 million unsecured notes offering, our
recent preferred offering represented the lowest dividend rate for a
split-rated (Baa3/BB+) preferred issuer in the REIT sector," said A. William
Stein, CFO and Chief Investment Officer of Digital Realty. "We believe the
success of these financing transactions is a testament to the strength of our
balance sheet and to our commitment to reducing our overall cost of capital,
which continues to support the growth of our global platform."

The Company is not revising its 2013 FFO guidance range of $4.65 to $4.80 per
share, 2013 core FFO guidance range of $4.70 to $4.85 per share, and
underlying assumptions at this time.

Investor Conference Call Details

Digital Realty will host a conference call on Friday, April 26, 2013 at 10:00
am PT / 1:00 pm ET to discuss its first quarter 2013 financial results and
operating performance. The conference call will feature Chief Executive
Officer, Michael F. Foust, and Chief Financial Officer and Chief Investment
Officer, A. William Stein. To participate in the live call, investors are
invited to dial +1 (888) 701-6680 (for domestic callers) or +1 (706) 634-5758
(for international callers) and quote the conference ID # 30119432 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
www.digitalrealty.com. Please go to the website at least 15 minutes early to
register and download and install any necessary audio software. If you are
unable to listen to the live conference call, telephone and webcast replays
will be available until 11:59 pm ET on Friday, May 10, 2013. The telephone
replay can be accessed two hours after the call by dialing +1 (855) 859-2056
(for domestic callers) or +1 (404) 537-3406 (for international callers) and
using the conference ID # 30119432. The webcast replay can be accessed on
Digital Realty's website immediately after the live call has concluded.

About Digital Realty

Digital Realty Trust, Inc. focuses on delivering customer driven data center
solutions by providing secure, reliable and cost effective facilities that
meet each customer's unique data center needs. Digital Realty's customers
include domestic and international companies across multiple industry
verticals ranging from information technology and Internet enterprises, to
manufacturing and financial services. Digital Realty's 122 properties,
excluding three properties held as investments in unconsolidated joint
ventures, comprise approximately 22.7 million square feet as of April 26,
2013, including 2.6 million square feet of space held for development. Digital
Realty's portfolio is located in 32 markets throughout North America, Europe,
Asia and Australia. Additional information about Digital Realty is included in
the Company Overview, which is available on the Investors page of Digital
Realty's website at http://www.digitalrealty.com.

Safe Harbor Statement

This press release contains forward-looking statements which are based on
current expectations, forecasts and assumptions that involve risks and
uncertainties that could cause actual outcomes and results to differ
materially, including statements related to supply and demand for data center
space, rent from leases that have been signed but have not yet commenced and
other contracted rent to be received in future periods, development plans, and
expected timing, size and IT capacity of development projects, expectations
regarding the Company's future growth, financial resources and success and the
Company's 2013 FFO and net income guidance. These risks and uncertainties
include, among others, the following: the impact of the recent deterioration
in global economic, credit and market conditions, including the downgrade of
the U.S. government's credit rating; current local economic conditions in our
geographic markets; decreases in information technology spending, including as
a result of economic slowdowns or recession; 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); our dependence upon significant tenants; bankruptcy or insolvency of
a major tenant or a significant number of smaller tenants; defaults on or
non-renewal of leases by tenants; our failure to obtain necessary debt and
equity financing; increased interest rates and operating costs; 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; financial market
fluctuations; changes in foreign currency exchange rates; our inability to
manage our growth effectively; difficulty acquiring or operating properties in
foreign jurisdictions; our failure to successfully integrate and operate
acquired or developed properties or businesses; the suitability of our
properties and data center infrastructure, delays or disruptions in
connectivity, failure of our physical infrastructure or services or
availability of power; risks related to joint venture investments, including
as a result of our lack of control of such investments; delays or unexpected
costs in development of properties; decreased rental rates or increased
vacancy rates; increased competition or available supply of data center space;
our inability to successfully develop and lease new properties and space held
for development; difficulties in identifying properties to acquire and
completing acquisitions; our inability to acquire off-market properties; our
inability to comply with the rules and regulations applicable to reporting
companies; our failure to maintain our status as a REIT; possible adverse
changes to tax laws; restrictions on our ability to engage in certain business
activities; environmental uncertainties and risks related to natural
disasters; losses in excess of our insurance coverage; changes in foreign laws
and regulations, including those related to taxation and real estate ownership
and operation; and changes in local, state and federal regulatory
requirements, including changes in real estate and zoning laws and increases
in real property tax rates. For a further list and description of such risks
and uncertainties, see the reports and other filings by the Company with the
U.S. Securities and Exchange Commission, including the Company's Annual Report
on Form 10-K for the year ended December 31, 2012. The Company disclaims any
intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

Digital Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Income Statements
(in thousands, except share and per share data)
(unaudited)
                                           Three Months Ended
                                           March 31, 2013   March 31, 2012
Operating Revenues:
    Rental                                 $         $        
                                             281,399       222,834
    Tenant reimbursements                  75,917           57,862
    Construction management                806              2,452
    Other                                  248              -
                   Total operating         358,370          283,148
                   revenues
Operating Expenses:
    Rental property operating and          106,780          79,845
    maintenance
    Property taxes                         21,042           16,042
    Insurance                              2,205            2,230
    Construction management                384              193
    Depreciation and amortization          111,623          83,995
    General and administrative             15,951           14,250
    Transactions                           1,763            677
    Other                                  36               -
                   Total operating         259,784          197,232
                   expenses
                   Operating income        98,586           85,916
Other Income (Expenses):
    Equity in earnings of unconsolidated   2,335            1,389
    joint ventures
    Interest and other income              41               709
    Interest expense                       (48,078)         (38,030)
    Tax (expense) benefit                  (1,203)          (721)
Net Income                                 51,681           49,263
    Net income attributable to             (970)            (1,221)
    noncontrolling interests
Net Income Attributable to Digital Realty  50,711           48,042
Trust, Inc.
    Preferred stock dividends              (8,054)          (8,831)
Net Income Available to Common             $         $        
Stockholders                                  42,657       39,211
    Net income per share available to
    common stockholders:
    Basic                                  $         $        
                                                0.34       0.37
    Diluted                                $         $        
                                                0.34       0.36
    Weighted average shares outstanding:
    Basic                                  126,445,285      107,099,856
    Diluted                                126,738,339      107,584,856



Digital Realty Trust, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
                                       March 31, 2013   December 31, 2012
ASSETS                                 (unaudited)
Investments in real estate
Properties:
Land                                   $         $          
                                          679,803        661,058
Acquired ground leases                 13,137           13,658
Buildings and improvements             7,826,501        7,662,973
Tenant improvements                    419,062          404,830
Total investments in properties        8,938,503        8,742,519
Accumulated depreciation and           (1,288,440)      (1,206,017)
amortization
Net investments in properties          7,650,063        7,536,502
Investment in unconsolidated joint     72,930           66,634
ventures
Net investments in real estate         7,722,993        7,603,136
Cash and cash equivalents              42,130           56,281
Accounts and other receivables,        177,951          168,286
net
Deferred rent                          340,753          321,715
Acquired above market leases,          59,079           65,055
net
Acquired in place lease value and      494,384          495,205
deferred leasing costs, net
Deferred financing costs, net         33,393           30,621
Restricted cash                        43,929           44,050
Other assets                           56,880           34,865
Total Assets                           $         $          
                                         8,971,492        8,819,214
LIABILITIES AND EQUITY
Global revolving credit facility       $         $          
                                          546,649        723,729
Unsecured term loan                    747,830          757,839
Unsecured senior notes, net of         2,341,972        1,738,221
discount
Exchangeable senior debentures         266,400          266,400
Mortgage loans, net of premiums        779,273          792,376
Accounts payable and other accrued     613,537          646,427
liabilities
Accrued dividends and                  -                93,434
distributions
Acquired below market leases, net      141,257          148,233
Security deposits and prepaid          152,626          154,171
rents
Total Liabilities                      5,589,544        5,320,830
Equity:
Stockholders' equity                   3,345,627        3,468,305
Noncontrolling interests               36,321           30,079
Total Equity                           3,381,948        3,498,384
Total Liabilities and Equity           $         $          
                                         8,971,492        8,819,214



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
                          March 31, 2013    December 31, 2012 March 31, 2012
Net income available to   $          $         $       
common stockholders       42,657              44,815        39,211
Adjustments:
Noncontrolling interests  824               1,336             1,586
in operating partnership
Real estate related
depreciation and          110,690           106,797           82,993
amortization (1)
Real estate related
depreciation and
amortization related to   833               727               905
investment in
 unconsolidated joint
ventures
FFO available to common   $           $         $      
stockholders and          155,004            153,675         124,695
unitholders (2)
Basic FFO per share and   $         $         $       
unit                       1.20                1.21        1.12
Diluted FFO per share and $         $         $       
unit (2)                   1.16                1.16        1.06
Weighted average common
stock and units
outstanding
Basic                     128,888           127,515           111,433
Diluted (2)               137,680           137,510           125,482
(1) Real estate related
depreciation and
amortization was computed
as follows:
Depreciation and
amortization per income   111,623           107,718           83,995
statement
Non-real estate           (933)             (921)             (1,002)
depreciation
                          $           $         $       
                          110,690            106,797         82,993
(2) At March 31, 2013, we had 0 series D convertible preferred shares
outstanding, as a result of the redemption of all remaining shares on February
26, 2013, which calculates into 1,909 common shares on a weighted average
basis for the three months ended March 31, 2013. At December 31, 2012, we had
4,937 series D convertible preferred shares outstanding that were convertible
into 3,143 common shares on a weighted average basis for the three months
ended December 31, 2012. At March 31, 2012, we had 5,126 series C convertible
preferred shares and 6,977 series D convertible preferred shares outstanding
that were convertible into 2,785 common shares and 4,337 common shares on a
weighted average basis for the three months ended March 31, 2012,
respectively. For the three months ended March 31, 2013, December 31, 2012 and
March 31, 2012, we have excluded the effect of dilutive series E and series F
preferred stock, as applicable, that may be converted upon the occurrence of
specified change in control transactions as described in the articles
supplementary governing the series E and series F preferred stock, as
applicable, which we consider highly improbable; if included, the dilutive
effect for the three months ended March 31, 2013, December 31, 2012 and March
31, 2012 would be 7,161, 7,116 and 4,026 shares, respectively. In addition, we
had a balance of $266,400 of 5.50% exchangeable senior debentures due 2029
that were exchangeable for 6,590, 6,531 and 6,442 common shares on a weighted
average basis for the three months ended March 31, 2013, December 31, 2012 and
March 31, 2012, respectively. See below for calculations of diluted FFO
available to common stockholders and unitholders and weighted average common
stock and units outstanding.
                          Three Months Ended
                          March 31, 2013    December 31, 2012 March 31, 2012
FFO available to common   $           $         $      
stockholders and          155,004            153,675         124,695
unitholders
Add: Series C
convertible preferred     -                 -                 1,402
dividends
Add: Series D
convertible preferred     -                 1,697             2,398
dividends
Add: 5.50% exchangeable
senior debentures         4,050             4,050             4,050
interest expense
FFO available to common   $           $         $      
stockholders and          159,054            159,422         132,545
unitholders -- diluted
Weighted average common
stock and units           128,888           127,515           111,433
outstanding
Add: Effect of dilutive
securities (excluding
series C and D
convertible preferred     293               321               485
stock
 and 5.50%
exchangeable senior
debentures)
Add: Effect of dilutive
series C convertible      -                 -                 2,785
preferred stock
Add: Effect of dilutive
series D convertible      1,909             3,143             4,337
preferred stock
Add: Effect of dilutive
5.50% exchangeable senior 6,590             6,531             6,442
debentures
Weighted average common
stock and units           137,680           137,510           125,482
outstanding -- diluted
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
                          March 31, 2013    December 31, 2012 March 31, 2012
FFO available to common   $           $         $      
stockholders and          159,054            159,422         132,545
unitholders -- diluted
Termination fees and
other non-core revenues   (248)             (158)             -
^(3)
Significant transaction   1,763             5,331             677
expenses
Change in fair value of
contingent consideration  1,300             (1,051)           -
^(4)
Other non-core expense    36                -                 -
adjustments ^(5)
CFFO available to common  $           $         $      
stockholders and          161,905            163,544         133,222
unitholders -- diluted
Diluted CFFO per share    $         $         $       
and unit                   1.18                1.19        1.06
(3) Includes one-time fees, proceeds and certain other adjustments that are
not core to our business.
(4) Relates to earn-out contingency in connection with Sentrum Portfolio
acquisition.
(5) Includes reversal of accruals and certain other adjustments that are not
core to our business.



A reconciliation of the range of 2013 projected net income to projected FFO
and core FFO follows:
                                                                  Low - High
Net income available to common stockholders per diluted share $1.37 – 1.52
 Add:
Real estate depreciation and amortization                         $3.43
 Less:
Dilutive impact of convertible stock                              ($0.15)
 Projected FFO per diluted share              $4.65– 4.80
Adjustments for items that do not represent core expenses and     $0.05
revenue streams
 Projected core FFO per diluted share         $4.70 – 4.85

Note Regarding Funds From Operations
Digital Realty calculates Funds from Operations, or FFO, in accordance with
the standards established by the National Association of Real Estate
Investment Trusts, or NAREIT. FFO represents net income (loss) available to
common stockholders and unitholders (computed in accordance with U.S. GAAP),
excluding gains (or losses) from sales of property, impairment charges, real
estate related depreciation and amortization (excluding amortization of
deferred financing costs) 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, it provides a
performance measure that, when compared year over year, captures trends in
occupancy rates, rental rates and operating costs. Digital Realty also
believes 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 properties
that result from use or market conditions, nor the level of capital
expenditures and leasing commissions necessary to maintain the operating
performance of our properties, 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 such other REITs' FFO.
Accordingly, FFO should be considered only as a supplement to net income as a
measure of our performance.

Core Funds from Operations

We present core funds from operations, or CFFO, 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 CFFO by adding to or subtracting from FFO (i)termination fees and
other non-core revenues, (ii)significant transaction expenses, (iii)loss
from early extinguishment of debt, (iv)costs on redemption of preferred
stock, (v)significant property tax adjustments, net and (vi)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
CFFO as a measure of our performance is limited. Other REITs may not
calculate CFFO in a consistent manner. Accordingly, our CFFO may not be
comparable to other REITs' CFFO. CFFO should be considered only as a
supplement to net income computed in accordance with GAAP as a measure of our
performance.

For Additional Information:
A. William                        Pamela M.
Stein     Garibaldi
Chief Financial Officer           Vice President, Investor Relations and
and
Chief Investment                  Corporate Marketing
Officer
Digital Realty Trust,             Digital Realty Trust, Inc.
Inc.
+1 (415)                          +1 (415) 738-6500
738-6500

SOURCE Digital Realty Trust, Inc.

Website: http://www.digitalrealtytrust.com