Equity And Accumulated Other Comprehensive Income, Net

3 Months Ended

Mar. 31, 2015

Equity And Accumulated Other Comprehensive Income, Net [Abstract]

Equity And Accumulated Other Comprehensive Income, Net

Equity and Accumulated Other Comprehensive Income, Net

(a) Equity Distribution Agreements

Digital Realty Trust, Inc. entered into equity distribution agreements in June 2011, which we refer to as the 2011 Equity Distribution Agreements, with each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC, or the Agents, under which it can issue and sell shares of its common stock having an aggregate offering price of up to $400.0 million from time to time through, at its discretion, any of the Agents as its sales agents. The sales of common stock made under the 2011 Equity Distribution Agreements will be made in “at the market” offerings as defined in Rule 415 of the Securities Act. Cumulatively through March 31, 2015, Digital Realty Trust, Inc. has generated net proceeds of approximately $342.7 million from the issuance of approximately 5.7 million common shares under the 2011 Equity Distribution Agreements at an average price of $60.35 per share after payment of approximately $3.5 million of commissions to the sales agents and before offering expenses. No sales were made under the program during the three months ended March 31, 2015 and 2014. As of March 31, 2015, shares of common stock having an aggregate offering price of $53.8 million remained available for offer and sale under the program.

(b) Noncontrolling Interests in Operating Partnership

Noncontrolling interests in the Operating Partnership relate to the interests that are not owned by Digital Realty Trust, Inc. The following table shows the ownership interests in the Operating Partnership as of March 31, 2015 and December 31, 2014:

	March 31, 2015			December 31, 2014
	Number of units	Percentage of total		Number of units	Percentage of total
Digital Realty Trust, Inc.	135,793,668	97.9	%	135,626,255	97.8	%
Noncontrolling interests consist of:
Common units held by third parties	1,425,314	1.0		1,463,814	1.1
Incentive units held by employees and directors (see note 13)	1,499,397	1.1		1,549,847	1.1
	138,718,379	100.0	%	138,639,916	100.0	%

Limited partners have the right to require the Operating Partnership to redeem part or all of their common units for cash based on the fair market value of an equivalent number of shares of Digital Realty Trust, Inc. common stock at the time of redemption. Alternatively, Digital Realty Trust, Inc. may elect to acquire those common units in exchange for shares of Digital Realty Trust, Inc. common stock on a one-for-one basis, subject to adjustment in the event of stock splits, stock dividends, issuance of stock rights, specified extraordinary distributions and similar events. Pursuant to authoritative accounting guidance, Digital Realty Trust, Inc. evaluated whether it controls the actions or events necessary to issue the maximum number of shares that could be required to be delivered under the share settlement of the noncontrolling Operating Partnership common and incentive units. Based on the results of this analysis, we concluded that the common and incentive Operating Partnership units met the criteria to be classified within equity.

The redemption value of the noncontrolling Operating Partnership common units and the vested incentive units was approximately $182.3 million and $179.0 million based on the closing market price of Digital Realty Trust, Inc. common stock on March 31, 2015 and December 31, 2014, respectively.

The following table shows activity for the noncontrolling interests in the Operating Partnership for the three months ended March 31, 2015:

	Common Units		Incentive Units		Total
As of December 31, 2014	1,463,814		1,549,847		3,013,661
Redemption of common units for shares of Digital Realty Trust, Inc. common stock (1)	(38,500	)	—		(38,500	)
Conversion of incentive units held by employees and directors for shares of Digital Realty Trust, Inc. common stock (1)	—		(40,774	)	(40,774	)
Cancellation of incentive units held by employees and directors	—		(11,549	)	(11,549	)
Grant of incentive units to employees and directors	—		1,873		1,873
As of March 31, 2015	1,425,314		1,499,397		2,924,711

(1) This redemption was recorded as a reduction to noncontrolling interests in the Operating Partnership and an increase to common stock and additional paid in capital based on the book value per unit in the accompanying condensed consolidated balance sheet of Digital Realty Trust, Inc.

(c) Dividends

We have declared and paid the following dividends on our common and preferred stock for the three months ended March 31, 2015 (in thousands, except per share data):

Date dividend declared	Dividend payment date	Series E Preferred Stock		Series F Preferred Stock		Series G Preferred Stock		Series H Preferred Stock		Common Stock
February 25, 2015	March 31, 2015	$	5,031	$	3,023	$	3,672	$	6,730	$	115,419
Annual rate of dividend per share		$	1.750	$	1.656	$	1.469	$	1.844	$	3.400

Distributions out of Digital Realty Trust, Inc.’s current or accumulated earnings and profits are generally classified as dividends whereas distributions in excess of its current and accumulated earnings and profits, to the extent of a stockholder’s U.S. federal income tax basis in Digital Realty Trust, Inc.’s stock, are generally classified as a return of capital. Distributions in excess of a stockholder’s U.S. federal income tax basis in Digital Realty Trust, Inc.’s stock are generally characterized as capital gain. Cash provided by operating activities has generally been sufficient to fund all distributions; however, in the future we may also need to utilize borrowings under the global revolving credit facility to fund all or a portion of distributions.

(d) Accumulated Other Comprehensive Income, Net

The accumulated balances for each item within other comprehensive income, net are as follows (in thousands):

	Foreign currency translation adjustments				Cash flow hedge adjustments			Accumulated other comprehensive loss, net
Balance as of December 31, 2014	$	(39,567	)		$	(5,479	)	$	(45,046	)
Net current period change	(44,948		)	(1)	(2,370		)	(47,318		)
Reclassification to interest expense from interest rate swaps	—				802			802
Balance as of March 31, 2015	$	(84,515	)		$	(7,047	)	$	(91,562	)

(1) During the first three months of 2015, the U.S. dollar was generally stronger against the other currencies in which we transact business, primarily the Euro and British pound sterling.