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PR Newswire

Digital Realty Reports Third Quarter 2021 Results

Digital Realty Reports Third Quarter 2021 Results

Digital Realty Reports Third Quarter 2021 Results

PR Newswire

AUSTIN, Texas, Oct. 26, 2021

AUSTIN, Texas, Oct. 26, 2021 /PRNewswire/ -- Digital Realty (NYSE: DLR), the largest global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions, announced today financial results for the third quarter of 2021.  All per-share results are presented on a fully-diluted share and unit basis. 

Highlights

  • Reported net income available to common stockholders of $0.44 per share in 3Q21, compared to a net loss available to common stockholders of ($0.14) in 3Q20
  • Reported FFO per share of $1.54 in 3Q21, compared to $1.19 in 3Q20
  • Reported core FFO per share of $1.65 in 3Q21, compared to $1.54 in 3Q20
  • Signed total bookings during 3Q21 expected to generate $113 million of annualized GAAP rental revenue, including a $12 million contribution from interconnection
  • Raised core FFO per share outlook from $6.45-$6.50 to $6.50-$6.55

Financial Results

Digital Realty reported revenues for the third quarter of 2021 of $1.1 billion, a 4% increase from the previous quarter and an 11% increase from the same quarter last year. 

The company delivered third quarter of 2021 net income of $137 million, and net income available to common stockholders of $124 million, or $0.44 per diluted share, compared to $0.45 per diluted share in the previous quarter and ($0.14) per diluted share in the same quarter last year. 

Digital Realty generated third quarter of 2021 Adjusted EBITDA of $610 million, a 1% increase from the previous quarter and a 7% increase over the same quarter last year. 

The company reported third quarter of 2021 funds from operations of $447 million, or $1.54 per share, compared to $1.78 per share in the previous quarter and $1.19 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 2021 core FFO per share of $1.65, a 7% increase from $1.54 per share in the previous quarter, and a 7% increase from $1.54 per share in the same quarter last year. 

Leasing Activity

In the third quarter, Digital Realty signed total bookings expected to generate $113 million of annualized GAAP rental revenue, including a $12 million contribution from interconnection. 

"Digital Realty's global platform, broad product spectrum, and significant scale underpinned our strong third quarter results," said Digital Realty Chief Executive Officer A. William Stein.  "Record new logo growth and continued strong bookings in the quarter reflect the global adoption of PlatformDIGITAL®, while our robust internal processes enabled us to execute consistently for our growing list of customers." 

The weighted-average lag between new leases signed during the third quarter of 2021 and the contractual commencement date was seven months. 

In addition to new leases signed, Digital Realty also signed renewal leases representing $223 million of annualized GAAP rental revenue during the quarter.  Rental rates on renewal leases signed during the third quarter of 2021 rolled down 5.6% on a cash basis and down 3.3% on a GAAP basis. 

New leases signed during the third quarter of 2021 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



$11,685


59,887



$195


4.3



$226

 > 1 MW



37,923


397,759



95


39.5



80

 Other (1)



276


5,991



46




Total



$49,883


463,637



$108


43.8



$94















 EMEA (2)














 0-1 MW



$15,225


68,285



$223


6.5



$196

 > 1 MW



20,988


128,885



163


15.4



114

 Other (1)



21




-




Total



$36,234


197,170



$184


21.9



$138















 Asia Pacific (2)














 0-1 MW



$5,119


10,739



$477


1.4



$296

 > 1 MW



9,850


53,946



183


6.0



137

 Other (1)



123


1,484



83




Total



$15,092


66,168



$228


7.4



$168















All Regions (2)














 0-1 MW



$32,028


138,911



$231


12.2



$218

 > 1 MW



68,761


580,589



118


60.9



94

 Other (1)



420


7,475



56




Total



$101,209


726,975



$139


73.1



$115















Interconnection



$11,636


N/A



N/A


N/A



N/A















Grand Total



$112,845


726,975



$139


73.1



$115


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, 2021. 

Investment Activity

During the third quarter, the existing joint venture between Digital Realty and PGIM Real Estate, the real estate investment management and advisory business of Prudential Financial, completed the sale of a portfolio of 10 data centers in North America for $581 million, representing an exit cap rate of approximately 4.5% on the seven stabilized assets in the portfolio.  PGIM Real Estate owned an 80% interest and Digital Realty owned a 20% interest in the joint venture.  The transaction generated net proceeds of approximately $347 million, of which Digital Realty's share was approximately $85 million, including a $19 million promote fee. 

Separately, Digital Realty closed on the sale of a 56-acre land parcel in Mesa, AZ during the third quarter for approximately $17 million. 

Likewise during the third quarter, Digital Realty closed its previously announced joint venture with Brookfield Infrastructure Partners in India.  The joint venture enables the expansion of PlatformDIGITAL®, Digital Realty's global data center platform, which supports the evolving data, control and networking demands of global service providers as well as global and local enterprises.  Its expansion across India is expected to enable customers to rapidly scale digital transformation by deploying critical infrastructure with a leading global data center provider at the heart of a growing connected data community in India. 

Subsequent to quarter-end, Digital Realty reached an agreement to make a strategic investment in AtlasEdge Data Centres, a leading European edge data center provider. 

Also subsequent to quarter-end, Digital Realty and Pembani Remgro Infrastructure Fund created a new joint venture which acquired a controlling interest in Medallion Communications, Nigeria's leading colocation and interconnection provider, for approximately $29 million.  In addition, Kenyan data center operator iColo, Digital Realty's existing joint venture with Pembani Remgro Infrastructure Fund, closed on the acquisition of a land parcel in Maputo, Mozambique during the third quarter for $3 million. 

Balance Sheet

Digital Realty had approximately $14.1 billion of total debt outstanding as of September 30, 2021, comprised of $13.8 billion of unsecured debt and approximately $0.2 billion of secured debt.  At the end of the third quarter of 2021, net debt-to-Adjusted EBITDA was 6.0x, debt plus-preferred-to-total enterprise value was 26.1% and fixed charge coverage was 5.8x.  Pro forma for settlement of the $950 million forward equity offering completed in September, net debt-to-adjusted EBITDA was 5.6x and fixed charge coverage was 6.0x. 

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

  • In early July, Digital Realty closed an offering of CHF545 million, or approximately $595 million, of Swiss green bonds with a weighted-average maturity of approximately 6.6 years and a weighted-average coupon of approximately 0.37%.
  • In early July, Digital Realty liquidated its remaining stake in Megaport with the sale of 1.95 million shares at a price of A$17.55 per share, generating gross proceeds of A$34 million, or approximately $26 million.
  • In late August, Digital Realty issued approximately 0.6 million shares of common stock under the company's at-the-market equity offering program at a weighted average price of $162.20 per share, generating gross proceeds of approximately $95 million.
  • In early September, Digital Realty completed an offering of 6,250,000 shares of common stock at a price of $160.50 per share, subject to forward sale agreements. The company expects to receive net proceeds of approximately $950 million (net of fees and estimated expenses) upon full physical settlement of the forward sale agreements, expected to be no later than March 13, 2023.

2021 Outlook

Digital Realty raised its 2021 core FFO per share outlook from $6.45-$6.50 to $6.50-$6.55.  The assumptions underlying the outlook are summarized in the following table. 












As of


As of


As of


As of

 Top-Line and Cost Structure


February 11, 2021


April 29, 2021


July 29, 2021


October 26, 2021

Total revenue


$4.250 - $4.350 billion


$4.300 - $4.400 billion


$4.325 - $4.425 billion


$4.400 - $4.425 billion

Net non-cash rent adjustments (1)


($10) - ($15) million


($20) - ($25) million


($20) - ($25) million


($20) - ($25) million

Adjusted EBITDA


$2.300 - $2.350 billion


$2.330 - $2.380 billion


$2.350 - $2.400 billion


$2.400 - $2.425 billion

G&A


$365 - $375 million


$380 - $390 million


$380 - $390 million


$380 - $390 million










 Internal Growth









Rental rates on renewal leases









Cash basis


Slightly negative


Slightly negative


Slightly negative


Slightly negative

GAAP basis


Slightly positive


Slightly positive


Slightly positive


Slightly positive

Year-end portfolio occupancy


84.0% - 85.0%


84.0% - 85.0%


84.0% - 85.0%


84.0% - 85.0%

"Same-capital" cash NOI growth (2)


(2.5%) - (3.5%)


(2.5%) - (3.5%)


(2.5%) - (3.5%)


(2.5%) - (3.5%)










Foreign Exchange Rates









U.S. Dollar / Pound Sterling


$1.25 - $1.30


$1.30 - $1.38


$1.30 - $1.38


$1.30 - $1.38

U.S. Dollar / Euro


$1.15 - $1.20


$1.15 - $1.20


$1.15 - $1.20


$1.15 - $1.20










 External Growth









Dispositions









Dollar volume


$0.6 - $1.0 billion


$0.7 - $1.0 billion


$0.7 - $1.0 billion


$0.7 - $1.0 billion

Cap rate


0.0% - 12.0%


0.0% - 12.0%


0.0% - 12.0%


0.0% - 12.0%

Development









CapEx (3)


$2.0 - $2.3 billion


$2.0 - $2.3 billion


$2.0 - $2.3 billion


$2.0 - $2.3 billion

Average stabilized yields


9.0% - 15.0%


9.0% - 15.0%


9.0% - 15.0%


9.0% - 15.0%

Enhancements and other non-recurring CapEx (4)


$5 - $10 million


$5 - $10 million


$5 - $10 million


$5 - $10 million

Recurring CapEx + capitalized leasing costs (5)


$220 - $230 million


$220 - $230 million


$210 - $220 million


$190 - $200 million










 Balance Sheet









Long-term debt issuance









Dollar amount


$1.0 - $1.5 billion


$1.0 - $1.5 billion


$1.8 - $2.0 billion


$1.8 - $2.0 billion

Pricing


1.00%


1.00%


1.00%


1.00%

Timing


Early-to-mid 2021


Early-to-mid 2021


Early-to-mid 2021


Early-to-mid 2021










 Net income per diluted share


$1.40 - $1.45


$2.00 - $2.05


$2.20 - $2.25


$2.45 - $2.50

Real estate depreciation and (gain) / loss on sale


$4.90 - $4.90


$4.25 - $4.25


$4.15 - $4.15


$3.95 - $3.95

 Funds From Operations / share (NAREIT-Defined)


$6.30 - $6.35


$6.25 - $6.30


$6.35 - $6.40


$6.40 - $6.45

Non-core expenses and revenue streams


$0.10 - $0.15


$0.25 - $0.25


$0.10 - $0.10


$0.10 - $0.10

 Core Funds From Operations / share


$6.40 - $6.50


$6.50 - $6.55


$6.45 - $6.50


$6.50 - $6.55



(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)

The "same-capital" pool includes properties owned as of December 31, 2019 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 2020-2021, properties classified as held for sale, and properties sold or contributed to joint ventures for all periods presented. 

(3)

Includes land acquisitions. 

(4)

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. 

(5)

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 26, 2021, 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 2021 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# 0133975 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 23, 2021.  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# 10160289.  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 over 280 facilities in 49 metros across 25 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-21



30-Jun-21



31-Mar-21



31-Dec-20



30-Sep-20




30-Sep-21



30-Sep-20

Rental revenues



$773,195



$768,826



$754,544



$754,422



$726,441




$2,296,565



$2,004,256

Tenant reimbursements - Utilities



189,060



169,743



184,973



154,937



155,111




543,776



410,207

Tenant reimbursements - Other



57,666



60,261



59,328



62,084



53,654




177,255



173,227

Interconnection & other



90,983



90,565



89,061



86,424



85,725




270,609



240,988

Fee income



3,255



3,628



2,426



4,722



3,687




9,309



10,492

Other



18,977



165



59



20



50




19,201



1,830

Total Operating Revenues



$1,133,136



$1,093,188



$1,090,391



$1,062,609



$1,024,668




$3,316,715



$2,841,000
























Utilities



$209,585



$185,010



$176,046



$169,282



$177,925




$570,642



$467,623

Rental property operating



196,743



198,207



185,733



205,177



180,755




580,682



489,411

Property taxes



55,915



42,795



49,005



42,442



39,732




147,715



126,926

Insurance



4,718



5,703



3,498



3,410



2,926




13,919



9,843

Depreciation & amortization



369,035



368,981



369,733



359,915



365,842




1,107,749



1,006,464

General & administration



97,082



94,956



97,568



101,582



90,431




289,606



243,346

Severance, equity acceleration, and legal expenses



1,377



2,536



2,427



606



920




6,340



5,834

Transaction and integration expenses



13,804



7,075



14,120



19,290



14,953




34,999



87,372

Impairment of investments in real estate











6,482






6,482

Other expenses



510



2,298



(257)



641



297




2,551



433

Total Operating Expenses



$948,769



$907,561



$897,873



$902,345



$880,263




$2,754,203



$2,443,734
























Operating Income



$184,367



$185,627



$192,518



$160,264



$144,405




$562,512



$397,266
























Equity in (loss) earnings of unconsolidated joint ventures



40,884



52,143



(23,031)



31,055



(2,056)




69,996



(88,684)

Gain on sale / deconsolidation



(635)



499



333,921



1,684



10,410




333,785



315,211

Interest and other (expense) income, net



(2,947)



10,124



(7,186)



(2,747)



4,348




(9)



22,969

Interest (expense)



(71,417)



(75,014)



(75,653)



(77,848)



(89,499)




(222,084)



(255,173)

Income tax (expense)



(13,709)



(47,582)



(7,547)



(3,322)



(16,053)




(68,838)



(34,725)

Loss from early extinguishment of debt







(18,347)



(49,576)



(53,007)




(18,347)



(53,639)

Net Income / (Loss)



$136,543



$125,797



$394,675



$59,510



($1,452)




$657,015



$303,225
























Net (income) loss attributable to noncontrolling interests



(2,266)



(4,544)



(8,756)



(1,818)



1,316




(15,566)



(4,515)

Net Income / (Loss) Attributable to Digital Realty Trust, Inc.



$134,277



$121,253



$385,919



$57,692



($136)




$641,449



$298,710
























Preferred stock dividends, including undeclared dividends



(10,181)



(11,885)



(13,514)



(13,514)



(20,712)




(35,580)



(63,022)

Gain on / (Issuance costs associated with) redeemed preferred stock





18,000







(16,520)




18,000



(16,520)

Net Income / (Loss) Available to Common Stockholders



$124,096



$127,368



$372,405



$44,178



($37,368)




$623,869



$219,168
























Weighted-average shares outstanding - basic



283,105,966



281,791,855



281,094,798



280,117,213



270,214,413




281,445,252



253,377,527

Weighted-average shares outstanding - diluted



283,817,950



282,433,857



281,928,182



281,122,368



270,214,413




282,075,611



256,362,579

Weighted-average fully diluted shares and units



290,253,718



289,484,805



289,210,666



288,903,143



281,523,515




289,218,609



264,401,464
























Net income / (loss) per share - basic



$0.44



$0.45



$1.32



$0.16



($0.14)




$2.22



$0.86

Net income / (loss) per share - diluted



$0.44



$0.45



$1.32



$0.16



($0.14)




$2.21



$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-21



30-Jun-21



31-Mar-21



31-Dec-20



30-Sep-20




30-Sep-21



30-Sep-20
























Net Income / (Loss) Available to Common Stockholders



$124,096



$127,368



$372,405



$44,178



($37,368)




$623,869



$219,168

Adjustments:























Non-controlling interest in operating partnership



3,000



3,200



9,800



1,300



(1,000)




16,000



8,200

Real estate related depreciation & amortization (1)



362,728



363,640



364,697



354,366



358,619




1,091,065



987,470

Unconsolidated JV real estate related depreciation & amortization



21,293



20,983



19,378



21,471



19,213




61,654



56,259

(Gain) on real estate transactions (2)



(63,799)



(499)



(333,921)



(1,684)



(10,410)




(398,219)



(315,211)

Impairment of investments in real estate



-



-



-



-



6,482




-



6,482

Funds From Operations - diluted



$447,318



$514,692



$432,359



$419,631



$335,536




$1,394,369



$962,368
























Weighted-average shares and units outstanding - basic



289,542



288,843



288,377



287,898



278,079




288,880



261,416

Weighted-average shares and units outstanding - diluted (3)



290,254



289,485



289,211



288,903



281,524




289,531



264,401
























Funds From Operations per share - basic



$1.54



$1.78



$1.50



$1.46



$1.21




$4.83



$3.68
























Funds From Operations per share - diluted (3)



$1.54



$1.78



$1.50



$1.45



$1.19




$4.82



$3.64


























Three Months Ended



Nine Months Ended

Reconciliation of FFO to Core FFO



30-Sep-21



30-Jun-21



31-Mar-21



31-Dec-20



30-Sep-20




30-Sep-21



30-Sep-20
























Funds From Operations - diluted



$447,318



$514,692



$432,359



$419,631



$335,536




$1,394,369



$962,368

Termination fees and other non-core revenues (4)



(18,066)



(11,122)



(59)



(25)



(5,713)




(29,247)



(30,046)

Transaction and integration expenses



13,804



7,075



14,120



19,290



14,953




34,999



87,372

Loss from early extinguishment of debt



-



-



18,347



49,576



53,007




18,347



53,639

(Gain on) / Issuance costs associated with redeemed preferred stock



-



(18,000)



-



-



16,520




(18,000)



16,520

Severance, equity acceleration, and legal expenses (5)



1,377



2,536



2,427



606



920




6,340



5,834

(Gain) / Loss on FX revaluation



33,774



(51,649)



34,072



(27,190)



10,312




16,197



109,126

Other non-core expense adjustments



1,004



2,298



(19,240)



3,353



6,697




(15,938)



12,228

Core Funds From Operations - diluted



$479,211



$445,830



$482,026



$465,241



$432,232




$1,407,067



$1,217,041
























Weighted-average shares and units outstanding - diluted (3)



290,254



289,485



289,211



288,903



281,524




289,531



264,401
























Core Funds From Operations per share - diluted (3)



$1.65



$1.54



$1.67



$1.61



$1.54




$4.86



$4.60
























(1) Real Estate Related Depreciation & Amortization


Three Months Ended



Nine Months Ended




30-Sep-21



30-Jun-21



31-Mar-21



31-Dec-20



30-Sep-20




30-Sep-21



30-Sep-20
























Depreciation & amortization per income statement



$369,035



$368,981



$369,733



$359,915



$365,842




1,107,749



1,006,464

Non-real estate depreciation



(6,307)



(5,341)



(5,036)



(5,549)



(7,223)




(16,684)



(18,994)

Real Estate Related Depreciation & Amortization



$362,728



$363,640



$364,697



$354,366



$358,619




$1,091,065



$987,470



(2)

For the third quarter 2021, includes a $64 million gain that represents Digital Realty's share from a sale of a portfolio of assets within an unconsolidated joint venture. The gain is included in equity in earnings of unconsolidated joint ventures in our consolidated income statement.

(3)

For all periods presented, we have excluded the effect of dilutive series C, 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 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 definitions section. 

(4)

Includes lease termination fees and certain other adjustments that are not core to our business. For the third quarter 2021, includes a $19 million promote received related to a sale of portfolio of assets within an unconsolidated joint venture. The promote is included in Other revenue in our consolidated income statement.

(5)

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-21



30-Jun-21



31-Mar-21



31-Dec-20



30-Sep-20




30-Sep-21



30-Sep-20
























 Core FFO available to common stockholders and unitholders



$479,211



$445,830



$482,026



$465,241



$432,232




$1,407,067



$1,217,041

Adjustments:























Non-real estate depreciation



6,307



5,341



5,036



5,549



7,223




16,684



18,994

Amortization of deferred financing costs



3,625



3,718



3,538



3,709



3,655




10,881



11,576

Amortization of debt discount/premium



1,138



1,166



1,134



1,033



987




3,438



2,941

Non-cash stock-based compensation expense



15,082



15,579



16,097



16,315



15,969




46,758



43,182

Straight-line rental revenue



(11,969)



(16,139)



(18,492)



(14,402)



(10,017)




(46,600)



(36,349)

Straight-line rental expense



7,862



7,175



6,709



3,629



3,934




21,746



12,767

Above- and below-market rent amortization



1,165



1,858



2,137



3,239



2,360




5,160



9,448

Deferred tax (expense) benefit



2,112



35,522



(4,509)



(4,226)



6,421




33,125



5,479

Leasing compensation & internal lease commissions



11,142



11,078



11,042



10,506



6,052




33,262



10,584

Recurring capital expenditures (1)



(50,800)



(39,231)



(39,522)



(83,571)



(53,683)




(129,553)



(127,156)
























AFFO available to common stockholders and unitholders (2)



$464,875



$471,897



$465,196



$407,022



$415,133




$1,401,968



$1,168,507
























Weighted-average shares and units outstanding - basic



289,542



288,843



288,377



287,898



278,079




288,880



261,416

Weighted-average shares and units outstanding - diluted (3)



290,254



289,485



289,211



288,903



281,524




289,531



264,401
























AFFO per share - diluted (3)



$1.60



$1.63



$1.61



$1.41



$1.47




$4.84



$4.42
























 Dividends per share and common unit



$1.16



$1.16



$1.16



$1.12



$1.12




$3.48



$3.36
























Diluted AFFO Payout Ratio



72.4%



71.2%



72.1%



79.5%



76.0%




71.9%



76.0%


























Three Months Ended



Nine Months Ended

Share Count Detail



30-Sep-21



30-Jun-21



31-Mar-21



31-Dec-20



30-Sep-20




30-Sep-21



30-Sep-20
























Weighted Average Common Stock and Units Outstanding



289,542



288,843



288,377



287,898



278,079




288,880



261,416

Add: Effect of dilutive securities



712



642



834



1,005



3,445




651



2,985

Weighted Avg. Common Stock and Units Outstanding - diluted



290,254



289,485



289,211



288,903



281,524




289,531



264,401



(1)

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. 

(2)

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. 

(3)

For all periods presented, we have excluded the effect of dilutive series C,  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 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-21


30-Jun-21


31-Mar-21


31-Dec-20


30-Sep-20

Assets





















Investments in real estate:
















Real estate



$23,384,809



$23,287,853



$22,762,279



$23,142,988



$22,125,486

Construction in progress



3,238,388



3,270,570



2,904,642



2,768,326



2,328,654

Land held for future development



118,091



143,575



192,896



226,862



198,536

Investments in real estate



$26,741,289



$26,701,998



$25,859,817



$26,138,175



$24,652,676

Accumulated depreciation and amortization



(6,159,294)



(5,919,650)



(5,649,019)



(5,555,221)



(5,250,140)

Net Investments in Properties



$20,581,995



$20,782,348



$20,210,798



$20,582,954



$19,402,536

Investment in unconsolidated joint ventures



1,292,325



1,119,026



970,703



1,148,158



1,059,978

Net Investments in Real Estate



$21,874,320



$21,901,374



$21,181,501



$21,731,112



$20,462,514

















Cash and cash equivalents



$116,002



$120,482



$221,140



$108,501



$971,305

Accounts and other receivables (1)



610,416



630,086



657,096



603,111



585,506

Deferred rent



552,850



539,379



524,200



528,180



510,627

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



2,871,622



2,956,027



3,057,245



3,122,904



3,106,414

Goodwill



8,062,914



8,185,931



8,125,706



8,330,996



8,012,256

Operating lease right-of-use assets (2)



1,442,661



1,452,633



1,495,869



1,386,959



1,363,285

Other assets



316,863



365,308



279,734



264,528



423,426

Total Assets



$35,847,648



$36,151,220



$35,542,491



$36,076,291



$35,435,333

















Liabilities and Equity
















Global unsecured revolving credit facilities



$832,322



$1,026,368



$451,007



$531,905



$124,082

Unsecured term loans









536,580



512,642

Unsecured senior notes, net of discount



13,012,790



12,659,043



12,566,198



11,997,010



11,999,170

Secured debt and other, net of premiums



242,427



242,410



239,634



239,222



238,866

Operating lease liabilities (2)



1,543,231



1,545,689



1,581,759



1,468,712



1,444,060

Accounts payable and other accrued liabilities



1,341,866



1,367,240



1,305,921



1,420,162



1,610,814

Deferred tax liabilities, net



725,955



742,127



650,543



698,308



711,474

Accrued dividends and distributions









324,386



571

Security deposits and prepaid rent



341,778



362,606



362,008



371,659



353,902

Total Liabilities



$18,040,369



$17,945,483



$17,157,070



$17,587,944



$16,995,581

















Redeemable non-controlling interests - operating partnership



40,924



41,490



40,097



42,011



41,265

















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

Series J Cumulative Redeemable Preferred Stock (4)



$193,540



$193,540



193,540



193,540



193,540

Series K Cumulative Redeemable Preferred Stock (5)



203,264



203,264



203,264



203,264



203,264

Series L Cumulative Redeemable Preferred Stock (6)



334,886



334,886



334,886



334,886



334,886

Common Stock: $0.01 par value per share, 392,000,000 shares authorized (7)



2,818



2,806



2,795



2,788



2,784

Additional paid-in capital



21,010,202



20,844,834



20,700,282



20,626,897



20,566,645

Dividends in excess of earnings



(4,358,933)



(4,153,407)



(3,952,497)



(3,997,938)



(3,726,901)

Accumulated other comprehensive income (loss), net



(111,560)



31,733



(77,783)



135,010



(123,623)

Total Stockholders' Equity



$17,274,217



$17,457,656



$17,623,737



$17,717,697



$17,669,845

















Noncontrolling Interests
















Noncontrolling interest in operating partnership



$459,814



$513,897



$571,292



$608,980



$620,676

Noncontrolling interest in consolidated joint ventures



32,324



192,694



150,295



119,659



107,966

















Total Noncontrolling Interests



$492,138



$706,591



$721,587



$728,639



$728,642

















Total Equity



$17,766,355



$18,164,247



$18,345,324



$18,446,336



$18,398,487

















Total Liabilities and Equity



$35,847,648



$36,151,220



$35,542,491



$36,076,291



$35,435,333



(1)

Net of allowance for doubtful accounts of $24,038 and $18,825 as of September 30, 2021 and December 31, 2020, 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%, $0 and $201,250 liquidation preference, respectively ($25.00 per share), 0 and 8,050,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively. 

(4)

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, 2021 and December 31, 2020, respectively.

(5)

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, 2021 and December 31, 2020, respectively.

(6)

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, 2021 and December 31, 2020, respectively.

(7)

Common Stock: 283,846,802 and 208,900,758 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectivel


 

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-21



30-Jun-21



31-Mar-21



31-Dec-20



30-Sep-20

















Net Income / (Loss) Available to Common Stockholders



$124,096



$127,368



$372,405



$44,178



($37,368)

Interest



71,417



75,014



75,653



77,848



89,499

Loss from early extinguishment of debt







18,347



49,576



53,007

Income tax expense (benefit)



13,709



47,582



7,547



3,322



16,053

Depreciation & amortization



369,035



368,981



369,733



359,915



365,842

EBITDA



$578,257



$618,945



$843,685



$534,839



$487,033

Unconsolidated JV real estate related depreciation & amortization



21,293



20,983



19,378



21,471



19,213

Unconsolidated JV interest expense and tax expense



11,008



15,523



8,786



12,143



9,002

Severance, equity acceleration, and legal expenses



1,377



2,536



2,427



606



920

Transaction and integration expenses



13,804



7,075



14,120



19,290



14,953

(Gain) on sale / deconsolidation



635



(499)



(333,921)



(1,684)



(10,410)

Impairment of investments in real estate











6,482

Other non-core adjustments, net



(28,745)



(60,308)



38,574



(23,842)



4,945

Non-controlling interests



2,266



4,544



8,756



1,818



(1,316)

Preferred stock dividends, including undeclared dividends



10,181



11,885



13,514



13,514



20,712

(Gain on) / Issuance costs associated with redeemed preferred stock





(18,000)







16,520

Adjusted EBITDA



$610,076



$602,684



$615,319



$578,156



$568,054

















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




































Three Months Ended

Financial Ratios



30-Sep-21



30-Jun-21



31-Mar-21



31-Dec-20



30-Sep-20

















Total GAAP interest expense



$71,417



$75,014



$75,653



$77,848



$89,499

Capitalized interest



15,142



11,558



11,434



11,836



12,379

Change in accrued interest and other non-cash amounts



17,820



(43,604)



44,620



(37,182)



19,718

Cash Interest Expense (2)



$104,379



$42,968



$131,707



$52,502



$121,596

















Preferred dividends



10,181



11,885



13,514



13,514



20,712

Total Fixed Charges (3)



$96,740



$98,457



$100,601



$103,198



$122,590

































Coverage
















Interest coverage ratio (4)



 6.5x



 6.1x



 6.6x



 5.8x



 5.2x

Cash interest coverage ratio (5)



 5.4x



 10.9x



 4.5x



 9.3x



 4.4x

Fixed charge coverage ratio (6)



 5.8x



 5.4x



 5.8x



 5.1x



 4.4x

Cash fixed charge coverage ratio (7)



 5.0x



 9.0x



 4.1x



 7.7x



 3.8x

















Leverage
















Debt to total enterprise value (8) (9)



24.8%



23.9%



24.1%



24.4%



22.8%

Debt plus preferred stock to total enterprise value (10)



26.1%



25.2%



25.9%



26.2%



25.0%

Pre-tax income to interest expense (11)



 2.9x



 2.7x



 6.2x



 1.8x



 1.0x

Net Debt to Adjusted EBITDA (12)



 6.0x



 6.0x



 5.6x



 6.0x



 5.5x



(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,  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, and preferred dividends (including our pro rata share of unconsolidated joint venture cash fixed charges).

(8)

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

(9)

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

(10)

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 pro rata share of unconsolidated of joint venture debt, less cash and cash equivalents (including Digital Realty's pro rata share of unconsolidated joint venture cash) divided by the product of Adjusted EBITDA (including Digital Realty's pro rata share of unconsolidated joint venture EBITDA), multiplied by four.

 

Management Statements on Non-GAAP Measures
Unaudited

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) gain on / issuance costs associated with redeemed preferred stock, (v) severance, equity acceleration, and legal expenses, (vi) gain/loss on FX revaluation, and (vii) 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) benefit, (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, 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. 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 gain on / 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 unconsolidated JV debt, less unrestricted cash and cash equivalents (including our share of unconsolidated JV cash) divided by the product of Adjusted EBITDA (inclusive of our share of unconsolidated 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, 2021, GAAP interest expense was $71 million, capitalized interest was $15 million and scheduled debt principal payments and preferred dividends was $10 million.


















Reconciliation of Net Operating Income (NOI)


Three Months Ended



Nine Months Ended

(in thousands)


30-Sep-21


30-Jun-21


30-Sep-20



30-Sep-21


30-Sep-20


















Operating income



$184,367



$185,627



$144,405




$562,512



$397,266


















 Fee income



(3,255)



(3,628)



(3,687)




(9,309)



(10,492)

 Other income



(18,977)



(165)



(50)




(19,201)



(1,830)

 Depreciation and amortization



369,035



368,981



365,842




1,107,749



1,006,464

 General and administrative



97,082



94,956



90,431




289,606



243,346

 Severance, equity acceleration, and legal expenses



1,377



2,536



920




6,340



5,834

 Transaction expenses



13,804



7,075



14,953




34,999



87,372

 Other expenses



510



2,298



297




2,551



433


















Net Operating Income



$643,943



$657,680



$619,593




$1,975,247



$1,734,875



































 Cash Net Operating Income (Cash NOI)


































Net Operating Income



$643,943



$657,680



$619,593




$1,975,247



$1,734,875


















 Straight-line rental revenue



(12,029)



(17,127)



(9,215)




(47,763)



(33,321)

 Straight-line rental expense



7,779



7,069



3,674




21,598



12,465

 Above- and below-market rent amortization



1,165



1,858



2,360




5,158



9,447


















Cash Net Operating Income



$640,858



$649,480



$616,412




$1,954,240



$1,723,466


 

Forward-Looking Statements

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 economic outlook, our expected investment and expansion activity, our expected physical settlement of the forward sale agreements and use of proceeds from any such settlement, the COVID-19 pandemic, 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, our product offerings, available inventory 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, 2021 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, 2021 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;
  • global supply chain or procurement disruptions, or increased supply chain costs;
  • 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 of the COVID-19 pandemic on our operations and on the operations of our customers, suppliers and business partners
  • 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, 2020 and other filings with the U.S. 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, Interxion, Turn-Key Flex, Powered Base Building, and PlatformDIGITAL, Data Gravity Index and Data Gravity Index DGx are registered trademarks and service marks of Digital Realty Trust, Inc. in the United States and/or other countries. All other names, trademarks and service marks are the property of their respective owners.

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SOURCE Digital Realty