x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Maryland (Digital Realty Trust, Inc.) Maryland (Digital Realty Trust, L.P.) | 26-0081711 20-2402955 | |
(State or other jurisdiction of incorporation or organization) | (IRS employer identification number) | |
Four Embarcadero Center, Suite 3200 San Francisco, CA | 94111 | |
(Address of principal executive offices) | (Zip Code) |
Digital Realty Trust, Inc. | Yes x No ¨ | |
Digital Realty Trust, L.P. | Yes x No ¨ |
Digital Realty Trust, Inc. | Yes x No ¨ | |
Digital Realty Trust, L.P. | Yes x No ¨ |
Large accelerated filer | x | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | |
Emerging growth company | ¨ |
Large accelerated filer | ¨ | Accelerated filer | ¨ | |
Non-accelerated filer | x (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | |
Emerging growth company | ¨ |
Digital Realty Trust, Inc. | Yes ¨ No x | |
Digital Realty Trust, L.P. | Yes ¨ No x |
Class | Outstanding at May 5, 2017 | |
Common Stock, $.01 par value per share | 159,774,915 |
• | enhancing investors’ understanding of our company and our operating partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; |
• | eliminating duplicative disclosure and providing a more streamlined and readable presentation since a substantial portion of the disclosure applies to both our company and our operating partnership; and |
• | creating time and cost efficiencies through the preparation of one combined report instead of two separate reports. |
• | Condensed consolidated financial statements; |
• | the following notes to the condensed consolidated financial statements: |
• | "Debt of the Company" and "Debt of the Operating Partnership"; |
• | "Income per Share" and "Income per Unit"; and |
• | "Equity and Accumulated Other Comprehensive Loss, Net" and "Capital and Accumulated Other Comprehensive Loss"; |
• | Part I, Item 2. "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources of the Parent Company" and "—Liquidity and Capital Resources of the Operating Partnership"; and |
• | Part II, Item 2. "Unregistered Sales of Equity Securities and Use of Proceeds". |
Page Number | ||
PART I. | FINANCIAL INFORMATION | |
ITEM 1. | Condensed Consolidated Financial Statements of Digital Realty Trust, Inc.: | |
Condensed Consolidated Financial Statements of Digital Realty Trust, L.P.: | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
PART II. | ||
ITEM 1. | ||
ITEM 1A. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
ITEM 5. | ||
ITEM 6. | ||
March 31, 2017 | December 31, 2016 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Investments in real estate: | |||||||
Properties: | |||||||
Land | $ | 767,148 | $ | 746,822 | |||
Acquired ground leases | 11,489 | 11,335 | |||||
Buildings and improvements | 10,558,200 | 10,267,525 | |||||
Tenant improvements | 532,168 | 532,787 | |||||
Total investments in properties | 11,869,005 | 11,558,469 | |||||
Accumulated depreciation and amortization | (2,792,910 | ) | (2,668,509 | ) | |||
Net investments in properties | 9,076,095 | 8,889,960 | |||||
Investment in unconsolidated joint ventures | 112,856 | 106,402 | |||||
Net investments in real estate | 9,188,951 | 8,996,362 | |||||
Cash and cash equivalents | 14,950 | 10,528 | |||||
Accounts and other receivables, net of allowance for doubtful accounts of $6,147 and $7,446 as of March 31, 2017 and December 31, 2016, respectively | 195,406 | 203,938 | |||||
Deferred rent | 418,858 | 412,269 | |||||
Acquired above-market leases, net | 20,826 | 22,181 | |||||
Goodwill | 757,444 | 752,970 | |||||
Acquired in-place lease value, deferred leasing costs and intangibles, net | 1,501,843 | 1,522,378 | |||||
Restricted cash | 10,447 | 11,508 | |||||
Assets held for sale | 56,154 | 56,097 | |||||
Other assets | 164,669 | 204,354 | |||||
Total assets | $ | 12,329,548 | $ | 12,192,585 | |||
LIABILITIES AND EQUITY | |||||||
Global revolving credit facility, net | $ | 564,467 | $ | 199,209 | |||
Unsecured term loan, net | 1,505,667 | 1,482,361 | |||||
Unsecured senior notes, net | 4,128,110 | 4,153,797 | |||||
Mortgage loans, including premiums, net | 3,085 | 3,240 | |||||
Accounts payable and other accrued liabilities | 804,371 | 824,878 | |||||
Accrued dividends and distributions | — | 144,194 | |||||
Acquired below-market leases, net | 78,641 | 81,899 | |||||
Security deposits and prepaid rents | 171,692 | 168,111 | |||||
Obligations associated with assets held for sale | 3,070 | 2,599 | |||||
Total liabilities | 7,259,103 | 7,060,288 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Stockholders’ Equity: | |||||||
Preferred Stock: $0.01 par value per share, 110,000,000 shares authorized; 41,900,000 and 41,900,000 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively | 1,012,961 | 1,012,961 | |||||
Common Stock: $0.01 par value per share, 265,000,000 shares authorized; 159,539,892 and 159,019,118 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively | 1,584 | 1,582 | |||||
Additional paid-in capital | 5,769,091 | 5,764,497 | |||||
Accumulated dividends in excess of earnings | (1,629,633 | ) | (1,547,420 | ) | |||
Accumulated other comprehensive loss, net | (122,540 | ) | (135,605 | ) | |||
Total stockholders’ equity | 5,031,463 | 5,096,015 | |||||
Noncontrolling Interests: | |||||||
Noncontrolling interests in operating partnership | 32,409 | 29,684 | |||||
Noncontrolling interests in consolidated joint ventures | 6,573 | 6,598 | |||||
Total noncontrolling interests | 38,982 | 36,282 | |||||
Total equity | 5,070,445 | 5,132,297 | |||||
Total liabilities and equity | $ | 12,329,548 | $ | 12,192,585 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Operating Revenues: | |||||||
Rental | $ | 404,126 | $ | 371,128 | |||
Tenant reimbursements | 87,288 | 84,218 | |||||
Interconnection and other | 57,225 | 46,963 | |||||
Fee income | 1,895 | 1,799 | |||||
Other | 35 | 91 | |||||
Total operating revenues | 550,569 | 504,199 | |||||
Operating Expenses: | |||||||
Rental property operating and maintenance | 169,339 | 154,168 | |||||
Property taxes | 26,919 | 27,331 | |||||
Insurance | 2,592 | 2,412 | |||||
Depreciation and amortization | 176,466 | 169,016 | |||||
General and administrative | 34,647 | 31,256 | |||||
Transactions | 3,323 | 1,900 | |||||
Total operating expenses | 413,286 | 386,083 | |||||
Operating income | 137,283 | 118,116 | |||||
Other Income (Expenses): | |||||||
Equity in earnings of unconsolidated joint ventures | 5,324 | 4,078 | |||||
Gain (loss) on sale of properties | (522 | ) | 1,097 | ||||
Interest and other (expense) income | 151 | (624 | ) | ||||
Interest expense | (55,450 | ) | (57,261 | ) | |||
Tax expense | (2,223 | ) | (2,109 | ) | |||
Loss from early extinguishment of debt | — | (964 | ) | ||||
Net income | 84,563 | 62,333 | |||||
Net income attributable to noncontrolling interests | (1,025 | ) | (784 | ) | |||
Net income attributable to Digital Realty Trust, Inc. | 83,538 | 61,549 | |||||
Preferred stock dividends | (17,393 | ) | (22,424 | ) | |||
Net income available to common stockholders | $ | 66,145 | $ | 39,125 | |||
Net income per share available to common stockholders: | |||||||
Basic | $ | 0.42 | $ | 0.27 | |||
Diluted | $ | 0.41 | $ | 0.27 | |||
Weighted average common shares outstanding: | |||||||
Basic | 159,297,027 | 146,565,564 | |||||
Diluted | 160,421,655 | 147,433,194 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net income | $ | 84,563 | $ | 62,333 | |||
Other comprehensive income: | |||||||
Foreign currency translation adjustments | 16,578 | (1,441 | ) | ||||
Decrease in fair value of interest rate swaps and foreign currency hedges | (4,364 | ) | (7,409 | ) | |||
Reclassification to interest expense from interest rate swaps | 1,030 | 1,058 | |||||
Comprehensive income | 97,807 | 54,541 | |||||
Comprehensive income attributable to noncontrolling interests | (1,204 | ) | (654 | ) | |||
Comprehensive income attributable to Digital Realty Trust, Inc. | $ | 96,603 | $ | 53,887 |
Preferred Stock | Number of Common Shares | Common Stock | Additional Paid-in Capital | Accumulated Dividends in Excess of Earnings | Accumulated Other Comprehensive Loss, Net | Total Stockholders’ Equity | Noncontrolling Interests in Operating Partnership | Noncontrolling Interests in Consolidated Joint Ventures | Total Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2016 | $ | 1,012,961 | 159,019,118 | $ | 1,582 | $ | 5,764,497 | $ | (1,547,420 | ) | $ | (135,605 | ) | $ | 5,096,015 | $ | 29,684 | $ | 6,598 | $ | 36,282 | $ | 5,132,297 | |||||||||||||||||||
Conversion of units to common stock | — | 216,964 | 2 | 2,742 | — | — | 2,744 | (2,744 | ) | — | (2,744 | ) | — | |||||||||||||||||||||||||||||
Issuance of unvested restricted stock | — | 258,835 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock, net of offering costs | — | — | — | 118 | — | — | 118 | — | — | — | 118 | |||||||||||||||||||||||||||||||
Exercise of stock options | — | 17,668 | — | 687 | — | — | 687 | — | — | — | 687 | |||||||||||||||||||||||||||||||
Shares issued under employee stock purchase plan | — | 27,307 | — | 1,919 | — | — | 1,919 | — | — | — | 1,919 | |||||||||||||||||||||||||||||||
Amortization of share-based compensation | — | — | — | 6,067 | — | — | 6,067 | — | — | — | 6,067 | |||||||||||||||||||||||||||||||
Reclassification of vested share-based awards | — | — | — | (6,939 | ) | — | — | (6,939 | ) | 6,939 | — | 6,939 | — | |||||||||||||||||||||||||||||
Dividends declared on preferred stock | — | — | — | — | (17,393 | ) | — | (17,393 | ) | — | — | — | (17,393 | ) | ||||||||||||||||||||||||||||
Dividends and distributions on common stock and common and incentive units | — | — | — | — | (148,358 | ) | — | (148,358 | ) | (2,553 | ) | — | (2,553 | ) | (150,911 | ) | ||||||||||||||||||||||||||
Distributions to noncontrolling interests in consolidated joint ventures, net of contributions | — | — | — | — | — | — | — | — | (146 | ) | (146 | ) | (146 | ) | ||||||||||||||||||||||||||||
Net income | — | — | — | — | 83,538 | — | 83,538 | 904 | 121 | 1,025 | 84,563 | |||||||||||||||||||||||||||||||
Other comprehensive income—foreign currency translation adjustments | — | — | — | — | — | 16,354 | 16,354 | 224 | — | 224 | 16,578 | |||||||||||||||||||||||||||||||
Other comprehensive loss—fair value of interest rate swaps and foreign currency hedges | — | — | — | — | — | (4,305 | ) | (4,305 | ) | (59 | ) | — | (59 | ) | (4,364 | ) | ||||||||||||||||||||||||||
Other comprehensive income—reclassification of accumulated other comprehensive loss to interest expense | — | — | — | — | — | 1,016 | 1,016 | 14 | — | 14 | 1,030 | |||||||||||||||||||||||||||||||
Balance as of March 31, 2017 | $ | 1,012,961 | 159,539,892 | $ | 1,584 | $ | 5,769,091 | $ | (1,629,633 | ) | $ | (122,540 | ) | $ | 5,031,463 | $ | 32,409 | $ | 6,573 | $ | 38,982 | $ | 5,070,445 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 84,563 | $ | 62,333 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Loss (gain) on sale of properties | 522 | (1,097 | ) | ||||
Equity in earnings of unconsolidated joint ventures | (5,324 | ) | (4,078 | ) | |||
Distributions from unconsolidated joint ventures | 4,448 | 4,115 | |||||
Write-off of net assets due to early lease terminations | — | (1 | ) | ||||
Depreciation and amortization of buildings and improvements, tenant improvements and acquired ground leases | 131,807 | 127,175 | |||||
Amortization of share-based compensation | 4,064 | 4,304 | |||||
Non-cash amortization of terminated swaps | 301 | — | |||||
Allowance for (recovery of) doubtful accounts | (1,310 | ) | (1,931 | ) | |||
Amortization of deferred financing costs | 2,443 | 2,260 | |||||
Loss on early extinguishment of debt | — | 964 | |||||
Amortization of debt discount/premium | 674 | 611 | |||||
Amortization of acquired in-place lease value and deferred leasing costs | 44,659 | 41,841 | |||||
Amortization of acquired above-market leases and acquired below-market leases, net | (2,026 | ) | (2,266 | ) | |||
Changes in assets and liabilities: | |||||||
Accounts and other receivables | 9,455 | 3,221 | |||||
Deferred rent | (4,033 | ) | (7,456 | ) | |||
Deferred leasing costs | (1,898 | ) | (4,147 | ) | |||
Other assets | (13,040 | ) | (15,424 | ) | |||
Accounts payable and other accrued liabilities | (38,421 | ) | (39,317 | ) | |||
Security deposits and prepaid rents | 2,182 | 9,507 | |||||
Net cash provided by operating activities | 219,066 | 180,614 | |||||
Cash flows from investing activities: | |||||||
Acquisitions of real estate | (13,585 | ) | (1,329 | ) | |||
Proceeds from sale of properties, net | — | 35,769 | |||||
Excess proceeds from forward contracts | 51,308 | — | |||||
Investment in unconsolidated joint ventures | (5,749 | ) | (11 | ) | |||
Receipt of value added tax refund | — | 951 | |||||
Refundable value added tax paid | — | (4,319 | ) | ||||
Improvements to investments in real estate | (254,359 | ) | (183,890 | ) | |||
Improvement advances to tenants | (5,073 | ) | (9,617 | ) | |||
Collection of advances from tenants for improvements | 11,890 | 8,318 | |||||
Net cash used in investing activities | (215,568 | ) | (154,128 | ) |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Cash flows from financing activities: | |||||||
Borrowings on global revolving credit facility | $ | 715,524 | $ | 692,593 | |||
Repayments on global revolving credit facility | (358,219 | ) | (975,287 | ) | |||
Borrowings on unsecured term loan | — | 766,201 | |||||
Repayments on unsecured term loan | — | (150,873 | ) | ||||
Repayments on unsecured notes | (50,000 | ) | (25,000 | ) | |||
Principal payments on mortgage loans | (132 | ) | (53,041 | ) | |||
Earnout payments related to acquisition | — | (12,129 | ) | ||||
Payment of loan fees and costs | (144 | ) | (14,207 | ) | |||
Capital distributions paid to noncontrolling interests in consolidated joint ventures, net | (146 | ) | (115 | ) | |||
Common and preferred stock offering costs paid, net | 118 | 137 | |||||
Proceeds from equity plans | 2,606 | 1,805 | |||||
Payment of dividends to preferred stockholders | (17,393 | ) | (22,424 | ) | |||
Payment of dividends to common stockholders and distributions to noncontrolling interests in operating partnership | (295,105 | ) | (258,475 | ) | |||
Net cash used in financing activities | (2,891 | ) | (50,815 | ) | |||
Net increase (decrease) in cash, cash equivalents and restricted cash | 607 | (24,329 | ) | ||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 2,754 | — | |||||
Cash, cash equivalents and restricted cash at beginning of period | 22,036 | 75,062 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 25,397 | $ | 50,733 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Supplemental disclosure of cash flow information: | |||||||
Cash paid for interest | $ | 53,819 | $ | 61,678 | |||
Cash paid for income taxes | 3,569 | 1,541 | |||||
Supplementary disclosure of noncash investing and financing activities: | |||||||
Change in net assets related to foreign currency translation adjustments | $ | 16,578 | $ | (1,441 | ) | ||
Decrease in accounts payable and other accrued liabilities related to change in fair value of interest rate swaps and foreign currency hedges | (4,364 | ) | (7,409 | ) | |||
Acquisition measurement period adjustment to goodwill and accounts payable and other accrued liabilities | 2,162 | — | |||||
Noncontrolling interests in operating partnership redeemed for or converted to shares of common stock | (2,744 | ) | 2,930 | ||||
Accrual for additions to investments in real estate and tenant improvement advances included in accounts payable and accrued expenses | 138,162 | 108,251 | |||||
Allocation of purchase price of real estate/investment in partnership to: | |||||||
Investments in real estate | $ | 13,585 | $ | 1,329 | |||
Cash paid for acquisition of real estate | $ | 13,585 | $ | 1,329 |
March 31, 2017 | December 31, 2016 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Investments in real estate: | |||||||
Properties: | |||||||
Land | $ | 767,148 | $ | 746,822 | |||
Acquired ground leases | 11,489 | 11,335 | |||||
Buildings and improvements | 10,558,200 | 10,267,525 | |||||
Tenant improvements | 532,168 | 532,787 | |||||
Total investments in properties | 11,869,005 | 11,558,469 | |||||
Accumulated depreciation and amortization | (2,792,910 | ) | (2,668,509 | ) | |||
Net investments in properties | 9,076,095 | 8,889,960 | |||||
Investment in unconsolidated joint ventures | 112,856 | 106,402 | |||||
Net investments in real estate | 9,188,951 | 8,996,362 | |||||
Cash and cash equivalents | 14,950 | 10,528 | |||||
Accounts and other receivables, net of allowance for doubtful accounts of $6,147 and $7,446 as of March 31, 2017 and December 31, 2016, respectively | 195,406 | 203,938 | |||||
Deferred rent | 418,858 | 412,269 | |||||
Acquired above-market leases, net | 20,826 | 22,181 | |||||
Goodwill | 757,444 | 752,970 | |||||
Acquired in-place lease value, deferred leasing costs and intangibles, net | 1,501,843 | 1,522,378 | |||||
Restricted cash | 10,447 | 11,508 | |||||
Assets held for sale | 56,154 | 56,097 | |||||
Other assets | 164,669 | 204,354 | |||||
Total assets | $ | 12,329,548 | $ | 12,192,585 | |||
LIABILITIES AND CAPITAL | |||||||
Global revolving credit facility, net | $ | 564,467 | $ | 199,209 | |||
Unsecured term loan, net | 1,505,667 | 1,482,361 | |||||
Unsecured senior notes, net | 4,128,110 | 4,153,797 | |||||
Mortgage loans, including premiums, net | 3,085 | 3,240 | |||||
Accounts payable and other accrued liabilities | 804,371 | 824,878 | |||||
Accrued dividends and distributions | — | 144,194 | |||||
Acquired below-market leases, net | 78,641 | 81,899 | |||||
Security deposits and prepaid rents | 171,692 | 168,111 | |||||
Obligations associated with assets held for sale | 3,070 | 2,599 | |||||
Total liabilities | 7,259,103 | 7,060,288 | |||||
Commitments and contingencies | |||||||
Capital: | |||||||
Partners’ capital: | |||||||
General Partner | 6,783,636 | 6,779,040 | |||||
Limited Partners | 37,244 | 34,698 | |||||
Accumulated distributions in excess of earnings | (1,629,633 | ) | (1,547,420 | ) | |||
Accumulated other comprehensive loss | (127,375 | ) | (140,619 | ) | |||
Total partners’ capital | 5,063,872 | 5,125,699 | |||||
Noncontrolling interests in consolidated joint ventures | 6,573 | 6,598 | |||||
Total capital | 5,070,445 | 5,132,297 | |||||
Total liabilities and capital | $ | 12,329,548 | $ | 12,192,585 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Operating Revenues: | |||||||
Rental | $ | 404,126 | $ | 371,128 | |||
Tenant reimbursements | 87,288 | 84,218 | |||||
Interconnection and other | 57,225 | 46,963 | |||||
Fee income | 1,895 | 1,799 | |||||
Other | 35 | 91 | |||||
Total operating revenues | 550,569 | 504,199 | |||||
Operating Expenses: | |||||||
Rental property operating and maintenance | 169,339 | 154,168 | |||||
Property taxes | 26,919 | 27,331 | |||||
Insurance | 2,592 | 2,412 | |||||
Depreciation and amortization | 176,466 | 169,016 | |||||
General and administrative | 34,647 | 31,256 | |||||
Transactions | 3,323 | 1,900 | |||||
Total operating expenses | 413,286 | 386,083 | |||||
Operating income | 137,283 | 118,116 | |||||
Other Income (Expenses): | |||||||
Equity in earnings of unconsolidated joint ventures | 5,324 | 4,078 | |||||
Gain (loss) on sale of properties | (522 | ) | 1,097 | ||||
Interest and other (expense) income | 151 | (624 | ) | ||||
Interest expense | (55,450 | ) | (57,261 | ) | |||
Tax expense | (2,223 | ) | (2,109 | ) | |||
Loss from early extinguishment of debt | — | (964 | ) | ||||
Net income | 84,563 | 62,333 | |||||
Net income attributable to noncontrolling interests in consolidated joint ventures | (121 | ) | (121 | ) | |||
Net income attributable to Digital Realty Trust, L.P. | 84,442 | 62,212 | |||||
Preferred units distributions | (17,393 | ) | (22,424 | ) | |||
Net income available to common unitholders | $ | 67,049 | $ | 39,788 | |||
Net income per unit available to common unitholders: | |||||||
Basic | $ | 0.42 | $ | 0.27 | |||
Diluted | $ | 0.41 | $ | 0.27 | |||
Weighted average common units outstanding: | |||||||
Basic | 161,474,901 | 149,047,798 | |||||
Diluted | 162,599,529 | 149,915,428 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net income | $ | 84,563 | $ | 62,333 | |||
Other comprehensive income: | |||||||
Foreign currency translation adjustments | 16,578 | (1,441 | ) | ||||
Decrease in fair value of interest rate swaps and foreign currency hedges | (4,364 | ) | (7,409 | ) | |||
Reclassification to interest expense from interest rate swaps | 1,030 | 1,058 | |||||
Comprehensive income | $ | 97,807 | $ | 54,541 | |||
Comprehensive income attributable to noncontrolling interests in consolidated joint ventures | (121 | ) | (121 | ) | |||
Comprehensive income attributable to Digital Realty Trust, L.P. | $ | 97,686 | $ | 54,420 |
General Partner | Limited Partners | Accumulated Other Comprehensive Loss | Noncontrolling Interests in Consolidated Joint Ventures | Total Capital | ||||||||||||||||||||||||||||
Preferred Units | Common Units | Common Units | ||||||||||||||||||||||||||||||
Units | Amount | Units | Amount | Units | Amount | |||||||||||||||||||||||||||
Balance as of December 31, 2016 | 41,900,000 | $ | 1,012,961 | 159,019,118 | $ | 4,218,659 | 2,475,663 | $ | 34,698 | $ | (140,619 | ) | $ | 6,598 | $ | 5,132,297 | ||||||||||||||||
Conversion of limited partner common units to general partner common units | — | — | 216,964 | 2,744 | (216,964 | ) | (2,744 | ) | — | — | — | |||||||||||||||||||||
Issuance of unvested restricted common units | — | — | 258,835 | — | — | — | — | — | — | |||||||||||||||||||||||
Common unit offering costs, net | — | — | — | 118 | — | — | — | — | 118 | |||||||||||||||||||||||
Issuance of common units in connection with the exercise of stock options | — | — | 17,668 | 687 | — | — | — | — | 687 | |||||||||||||||||||||||
Issuance of common units, net of forfeitures | — | — | — | — | 287,472 | — | — | — | — | |||||||||||||||||||||||
Units issued in connection with employee stock purchase plan | — | — | 27,307 | 1,919 | — | — | — | — | 1,919 | |||||||||||||||||||||||
Amortization of share-based compensation | — | — | — | 6,067 | — | — | — | — | 6,067 | |||||||||||||||||||||||
Reclassification of vested share-based awards | — | — | — | (6,939 | ) | — | 6,939 | — | — | — | ||||||||||||||||||||||
Distributions | — | (17,393 | ) | — | (148,358 | ) | — | (2,553 | ) | — | — | (168,304 | ) | |||||||||||||||||||
Distributions to noncontrolling interests in consolidated joint ventures, net of contributions | — | — | — | — | — | — | — | (146 | ) | (146 | ) | |||||||||||||||||||||
Net income | — | 17,393 | — | 66,145 | — | 904 | — | 121 | 84,563 | |||||||||||||||||||||||
Other comprehensive income—foreign currency translation adjustments | — | — | — | — | — | — | 16,578 | — | 16,578 | |||||||||||||||||||||||
Other comprehensive loss—fair value of interest rate swaps and foreign currency hedges | — | — | — | — | — | — | (4,364 | ) | — | (4,364 | ) | |||||||||||||||||||||
Other comprehensive income—reclassification of accumulated other comprehensive loss to interest expense | — | — | — | — | — | — | 1,030 | — | 1,030 | |||||||||||||||||||||||
Balance as of March 31, 2017 | 41,900,000 | $ | 1,012,961 | 159,539,892 | $ | 4,141,042 | 2,546,171 | $ | 37,244 | $ | (127,375 | ) | $ | 6,573 | $ | 5,070,445 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 84,563 | $ | 62,333 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Loss (gain) on sale of properties | 522 | (1,097 | ) | ||||
Equity in earnings of unconsolidated joint ventures | (5,324 | ) | (4,078 | ) | |||
Distributions from unconsolidated joint ventures | 4,448 | 4,115 | |||||
Write-off of net assets due to early lease terminations | — | (1 | ) | ||||
Depreciation and amortization of buildings and improvements, tenant improvements and acquired ground leases | 131,807 | 127,175 | |||||
Amortization of share-based compensation | 4,064 | 4,304 | |||||
Non-cash amortization of terminated swaps | 301 | — | |||||
Allowance for doubtful accounts | (1,310 | ) | (1,931 | ) | |||
Amortization of deferred financing costs | 2,443 | 2,260 | |||||
Loss on early extinguishment of debt | — | 964 | |||||
Amortization of debt discount/premium | 674 | 611 | |||||
Amortization of acquired in-place lease value and deferred leasing costs | 44,659 | 41,841 | |||||
Amortization of acquired above-market leases and acquired below-market leases, net | (2,026 | ) | (2,266 | ) | |||
Changes in assets and liabilities: | |||||||
Accounts and other receivables | 9,455 | 3,221 | |||||
Deferred rent | (4,033 | ) | (7,456 | ) | |||
Deferred leasing costs | (1,898 | ) | (4,147 | ) | |||
Other assets | (13,040 | ) | (15,424 | ) | |||
Accounts payable and other accrued liabilities | (38,421 | ) | (39,317 | ) | |||
Security deposits and prepaid rents | 2,182 | 9,507 | |||||
Net cash provided by operating activities | 219,066 | 180,614 | |||||
Cash flows from investing activities: | |||||||
Acquisitions of real estate | (13,585 | ) | (1,329 | ) | |||
Proceeds from sale of properties, net | — | 35,769 | |||||
Excess proceeds from forward contracts | 51,308 | — | |||||
Investment in unconsolidated joint ventures | (5,749 | ) | (11 | ) | |||
Receipt of value added tax refund | — | 951 | |||||
Refundable value added tax paid | — | (4,319 | ) | ||||
Improvements to investments in real estate | (254,359 | ) | (183,890 | ) | |||
Improvement advances to tenants | (5,073 | ) | (9,617 | ) | |||
Collection of advances from tenants for improvements | 11,890 | 8,318 | |||||
Net cash used in investing activities | (215,568 | ) | (154,128 | ) |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Cash flows from financing activities: | |||||||
Borrowings on global revolving credit facility | $ | 715,524 | $ | 692,593 | |||
Repayments on global revolving credit facility | (358,219 | ) | (975,287 | ) | |||
Borrowings on unsecured term loan | — | 766,201 | |||||
Repayments on unsecured term loan | — | (150,873 | ) | ||||
Repayments on unsecured notes | (50,000 | ) | (25,000 | ) | |||
Principal payments on mortgage loans | (132 | ) | (53,041 | ) | |||
Earnout payments related to acquisition | — | (12,129 | ) | ||||
Payment of loan fees and costs | (144 | ) | (14,207 | ) | |||
Capital distributions paid to noncontrolling interests in consolidated joint ventures, net | (146 | ) | (115 | ) | |||
General partner contributions, net | 2,724 | 1,942 | |||||
Payment of distributions to preferred unitholders | (17,393 | ) | (22,424 | ) | |||
Payment of distributions to common unitholders | (295,105 | ) | (258,475 | ) | |||
Net cash used in financing activities | (2,891 | ) | (50,815 | ) | |||
Net increase (decrease) in cash, cash equivalents and restricted cash | 607 | (24,329 | ) | ||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 2,754 | — | |||||
Cash, cash equivalents and restricted cash at beginning of period | 22,036 | 75,062 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 25,397 | $ | 50,733 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Supplemental disclosure of cash flow information: | |||||||
Cash paid for interest | $ | 53,819 | $ | 61,678 | |||
Cash paid for income taxes | 3,569 | 1,541 | |||||
Supplementary disclosure of noncash investing and financing activities: | |||||||
Change in net assets related to foreign currency translation adjustments | $ | 16,578 | $ | (1,441 | ) | ||
Decrease in accounts payable and other accrued liabilities related to change in fair value of interest rate swaps and foreign currency hedges | (4,364 | ) | (7,409 | ) | |||
Acquisition measurement period adjustment to goodwill and accounts payable and other accrued liabilities | 2,162 | — | |||||
Accrual for additions to investments in real estate and tenant improvement advances included in accounts payable and accrued expenses | 138,162 | 108,251 | |||||
Allocation of purchase price of real estate/investment in partnership to: | |||||||
Investments in real estate | $ | 13,585 | $ | 1,329 | |||
Cash paid for acquisition of real estate | $ | 13,585 | $ | 1,329 |
• | enhancing investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; |
• | eliminating duplicative disclosure and providing a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and |
• | creating time and cost efficiencies through the preparation of one set of notes instead of two separate sets of notes. |
• | condensed consolidated face financial statements; and |
• | the following notes to the condensed consolidated financial statements: |
• | "Debt of the Company" and "Debt of the Operating Partnership"; |
• | "Income per Share" and "Income per Unit"; and |
• | "Equity and Accumulated Other Comprehensive Loss, Net" and "Capital and Accumulated Other Comprehensive Loss". |
Location | Market | Date Acquired | Amount (in millions) | |||||
Osaka Phase II (1) | Osaka, Japan | March 15, 2017 | $ | 13.6 |
(1) | Represents currently vacant land which is not included in our operating property count. Purchase price in U.S. dollars and excludes capitalized closing costs. |
Investments in real estate | $ | 270,195 | |
Goodwill | 442,975 | ||
Intangibles: | |||
Tenant relationship value | 249,070 | ||
Acquired in-place lease value | 18,807 | ||
Above/below-market lease value, net | 4,817 | ||
Capital lease and other long-term obligations | (118,923 | ) | |
Deferred taxes and other | (48,037 | ) | |
Total purchase price | $ | 818,904 |
As of March 31, 2017 | Three Months Ended March 31, 2017 | ||||||||||||||||||||||||||||||||||
2017 | Net Investment in Properties | Total Assets | Debt | Total Liabilities | Equity | Revenues | Property Operating Expense | Net Operating Income | Net Income | ||||||||||||||||||||||||||
Total Unconsolidated Joint Ventures | $ | 736,735 | $ | 925,439 | $ | 456,870 | $ | 546,389 | $ | 379,050 | $ | 35,062 | $ | (10,391 | ) | $ | 24,671 | $ | 11,286 | ||||||||||||||||
Our investment in and share of equity in earnings of unconsolidated joint ventures | $ | 112,856 | $ | 5,324 | |||||||||||||||||||||||||||||||
As of December 31, 2016 | Three Months Ended March 31, 2016 | ||||||||||||||||||||||||||||||||||
2016 | Net Investment in Properties | Total Assets | Debt | Total Liabilities | Equity | Revenues | Property Operating Expense | Net Operating Income | Net Income | ||||||||||||||||||||||||||
Total Unconsolidated Joint Ventures | $ | 741,228 | $ | 922,694 | $ | 457,141 | $ | 549,997 | $ | 372,697 | $ | 33,608 | $ | (10,583 | ) | $ | 23,025 | $ | 9,000 | ||||||||||||||||
Our investment in and share of equity in earnings of unconsolidated joint ventures | $ | 106,402 | $ | 4,078 |
Balance as of | |||||||
(Amounts in thousands) | March 31, 2017 | December 31, 2016 | |||||
Real Estate Intangibles: | |||||||
Acquired in-place lease value: | |||||||
Gross amount | $ | 898,904 | $ | 896,693 | |||
Accumulated amortization | (532,545 | ) | (517,443 | ) | |||
Net | $ | 366,359 | $ | 379,250 | |||
Tenant relationship value: | |||||||
Gross amount | $ | 975,188 | $ | 971,519 | |||
Accumulated amortization | (99,926 | ) | (82,069 | ) | |||
Net | $ | 875,262 | $ | 889,450 | |||
Acquired above-market leases: | |||||||
Gross amount | $ | 110,748 | $ | 110,142 | |||
Accumulated amortization | (89,922 | ) | (87,961 | ) | |||
Net | $ | 20,826 | $ | 22,181 | |||
Acquired below-market leases: | |||||||
Gross amount | $ | 284,695 | $ | 283,899 | |||
Accumulated amortization | (206,054 | ) | (202,000 | ) | |||
Net | $ | 78,641 | $ | 81,899 |
(Amounts in thousands) | |||
Remainder of 2017 | $ | 5,179 | |
2018 | 5,538 | ||
2019 | 5,680 | ||
2020 | 7,434 | ||
2021 | 7,423 | ||
Thereafter | 26,561 | ||
Total | $ | 57,815 |
(Amounts in thousands) | |||
Remainder of 2017 | $ | 40,295 | |
2018 | 47,854 | ||
2019 | 40,648 | ||
2020 | 36,692 | ||
2021 | 34,077 | ||
Thereafter | 166,793 | ||
Total | $ | 366,359 |
(Amounts in thousands) | |||
Remainder of 2017 | $ | 52,687 | |
2018 | 70,249 | ||
2019 | 70,249 | ||
2020 | 70,249 | ||
2021 | 70,249 | ||
Thereafter | 541,579 | ||
Total | $ | 875,262 |
Indebtedness | Interest Rate at March 31, 2017 | Maturity Date | Principal Outstanding March 31, 2017 | Principal Outstanding December 31, 2016 | ||||||||
Global revolving credit facility | Various | (1) | Jan 15, 2020 | $ | 574,379 | (2) | $ | 210,077 | (2) | |||
Deferred financing costs, net | (9,912 | ) | (10,868 | ) | ||||||||
Global revolving credit facility, net | 564,467 | 199,209 | ||||||||||
Unsecured Term Loans | ||||||||||||
Unsecured term loan — 5-year | Various | (3)(4) | Jan 15, 2021 | 1,211,515 | (5) | 1,188,498 | (5) | |||||
Unsecured term loan — 7-year | Various | (3)(4) | Jan 15, 2023 | 300,000 | (5) | 300,000 | (5) | |||||
Deferred financing costs, net | (5,848 | ) | (6,137 | ) | ||||||||
Unsecured term loan, net | 1,505,667 | 1,482,361 | ||||||||||
Unsecured senior notes: | ||||||||||||
Prudential Shelf Facility: | ||||||||||||
Series E | 5.730% | Jan 20, 2017 | — | (6) | 50,000 | |||||||
Total Prudential Shelf Facility | — | 50,000 | ||||||||||
Senior Notes: | ||||||||||||
5.875% notes due 2020 | 5.875% | Feb 1, 2020 | 500,000 | 500,000 | ||||||||
3.400% notes due 2020 | 3.400% | Oct 1, 2020 | 500,000 | 500,000 | ||||||||
5.250% notes due 2021 | 5.250% | Mar 15, 2021 | 400,000 | 400,000 | ||||||||
3.950% notes due 2022 | 3.950% | Jul 1, 2022 | 500,000 | 500,000 | ||||||||
3.625% notes due 2022 | 3.625% | Oct 1, 2022 | 300,000 | 300,000 | ||||||||
4.750% notes due 2023 | 4.750% | Oct 13, 2023 | 376,500 | (7) | 370,200 | (7) | ||||||
2.625% notes due 2024 | 2.625% | Apr 15, 2024 | 639,120 | (8) | 631,020 | (8) | ||||||
4.250% notes due 2025 | 4.250% | Jan 17, 2025 | 502,000 | (7) | 493,600 | (7) | ||||||
4.750% notes due 2025 | 4.750% | Oct 1, 2025 | 450,000 | 450,000 | ||||||||
Unamortized discounts | (15,040 | ) | (15,649 | ) | ||||||||
Total senior notes, net of discount | 4,152,580 | 4,129,171 | ||||||||||
Deferred financing costs, net | (24,470 | ) | (25,374 | ) | ||||||||
Total unsecured senior notes, net of discount and deferred financing costs | 4,128,110 | 4,153,797 |
Indebtedness | Interest Rate at March 31, 2017 | Maturity Date | Principal Outstanding March 31, 2017 | Principal Outstanding December 31, 2016 | ||||||||
Mortgage loans: | ||||||||||||
731 East Trade Street | 8.22% | Jul 1, 2020 | $ | 2,784 | $ | 2,916 | ||||||
Unamortized net premiums | 311 | 334 | ||||||||||
Total mortgage loans, including premiums | 3,095 | 3,250 | ||||||||||
Deferred financing costs, net | (10 | ) | (10 | ) | ||||||||
Total mortgage loans, including premiums and net of deferred financing costs | 3,085 | 3,240 | ||||||||||
Total indebtedness | $ | 6,241,569 | $ | 5,838,607 |
(1) | The interest rate for borrowings under the global revolving credit facility equals the applicable index plus a margin of 100 basis points, which is based on the current credit ratings of our long-term debt. An annual facility fee of 20 basis points, which is based on the credit ratings of our long-term debt, is due and payable quarterly on the total commitment amount of the facility. Two six-month extensions are available, which we may exercise if certain conditions are met. |
(2) | Balances as of March 31, 2017 and December 31, 2016 are as follows (balances, in thousands): |
Denomination of Draw | Balance as of March 31, 2017 | Weighted-average interest rate | Balance as of December 31, 2016 | Weighted-average interest rate | |||||||||
Floating Rate Borrowing (a) | |||||||||||||
U.S. dollar ($) | $ | 80,000 | 1.91 | % | $ | 105,000 | 1.67 | % | |||||
British pound sterling (£) | 328,183 | (b) | 1.27 | % | 11,106 | (c) | 1.25 | % | |||||
Euro (€) | 43,141 | (b) | 0.63 | % | 15,250 | (c) | 0.63 | % | |||||
Hong Kong dollar (HKD) | 2,432 | (b) | 1.45 | % | 1,728 | (c) | 1.66 | % | |||||
Japanese yen (JPY) | 96,530 | (b) | 0.96 | % | 54,273 | (c) | 0.92 | % | |||||
Singapore dollar (SGD) | 2,004 | (b) | 1.66 | % | 11,186 | (c) | 1.52 | % | |||||
Canadian dollar (CAD) | 12,089 | (b) | 1.94 | % | 11,534 | (c) | 1.92 | % | |||||
Total | $ | 564,379 | 1.27 | % | $ | 210,077 | 1.39 | % | |||||
Base Rate Borrowing (d) | |||||||||||||
U.S. dollar ($) | $ | 10,000 | 4.00 | % | $ | — | — | % | |||||
Total borrowings | $ | 574,379 | 1.32 | % | $ | 210,077 | 1.39 | % |
(a) | The interest rates for floating rate borrowings under the global revolving credit facility equal the applicable index plus a margin of 100 basis points, which is based on the credit ratings of our long-term debt. |
(b) | Based on exchange rates of $1.26 to £1.00, $1.07 to €1.00, $0.13 to 1.00 HKD, $0.01 to 1.00 JPY, $0.72 to 1.00 SGD and $0.75 to 1.00 CAD, respectively, as of March 31, 2017. |
(c) | Based on exchange rates of $1.23 to £1.00, $1.05 to €1.00, $0.13 to 1.00 HKD, $0.01 to 1.00 JPY, $0.69 to 1.00 SGD and $0.74 to 1.00 CAD, respectively, as of December 31, 2016. |
(d) | The interest rates for base rate borrowings under the global revolving credit facility equal the U.S. Prime Rate plus the applicable margin, currently zero basis points, which is based on the credit rating of our long-term debt. |
(3) | Interest rates are based on our current senior unsecured debt ratings and are 110 basis points and 155 basis points over the applicable index for floating rate advances for the 5-Year Term Loan and the 7-Year Term Loan, respectively. |
(4) | We have entered into interest rate swap agreements as a cash flow hedge for interest generated by the U.S. dollar, Singapore dollar, British pound sterling and Canadian dollar tranches of the unsecured term loan. See Note 14 "Derivative Instruments" for further information. |
(5) | Balances as of March 31, 2017 and December 31, 2016 are as follows (balances, in thousands): |
Denomination of Draw | Balance as of March 31, 2017 | Weighted-average interest rate | Balance as of December 31, 2016 | Weighted-average interest rate | ||||||||||
U.S. dollar ($) | $ | 710,911 | 2.20 | % | (b) | $ | 710,911 | 1.99 | % | (d) | ||||
British pound sterling (£) | 212,691 | (a) | 1.36 | % | (b) | 209,132 | (c) | 1.36 | % | (d) | ||||
Singapore dollar (SGD) | 231,021 | (a) | 1.86 | % | (b) | 222,824 | (c) | 1.76 | % | (d) | ||||
Australian dollar (AUD) | 180,273 | (a) | 2.73 | % | 170,325 | (c) | 2.72 | % | ||||||
Hong Kong dollar (HKD) | 85,868 | (a) | 1.54 | % | 86,029 | (c) | 1.77 | % | ||||||
Canadian dollar (CAD) | 73,964 | (a) | 1.99 | % | (b) | 73,294 | (c) | 2.00 | % | (d) | ||||
Japanese yen (JPY) | 16,787 | (a) | 1.05 | % | 15,983 | (c) | 0.98 | % | ||||||
Total | $ | 1,511,515 | 2.03 | % | (b) | $ | 1,488,498 | 1.93 | % | (d) |
(a) | Based on exchange rates of $1.26 to £1.00, $0.72 to 1.00 SGD, $0.76 to 1.00 AUD, $0.13 to 1.00 HKD, $0.75 to 1.00 CAD and $0.01 to 1.00 JPY, respectively, as of March 31, 2017. |
(b) | As of March 31, 2017, the weighted-average interest rate reflecting interest rate swaps was 2.43% (U.S. dollar), 1.89% (British pound sterling), 1.91% (Singapore dollar), 1.88% (Canadian dollar) and 2.22% (Total). See Note 14 "Derivative Instruments" for further discussion on interest rate swaps. |
(c) | Based on exchange rates of $1.23 to £1.00, $0.69 to 1.00 SGD, $0.72 to 1.00 AUD,$0.13 to 1.00 HKD, $0.74 to 1.00 CAD and $0.01 to 1.00 JPY, respectively, as of December 31, 2016. |
(d) | As of December 31, 2016, the weighted-average interest rate reflecting interest rate swaps was 2.45% (U.S. dollar), 1.89% (British pound sterling), 1.90% (Singapore dollar), 1.88% (Canadian dollar) and 2.23% (Total). |
(6) | Unsecured note paid in full at maturity. |
(7) | Based on exchange rate of $1.26 to £1.00 as of March 31, 2017 and $1.23 to £1.00 as of December 31, 2016. |
(8) | Based on exchange rate of $1.07 to €1.00 as of March 31, 2017 and $1.05 to €1.00 as of December 31, 2016. |
Global Revolving Credit Facility(1) | Unsecured Term Loan | Senior Notes | Mortgage Loans | Total Debt | |||||||||||||||
Remainder of 2017 | $ | — | $ | — | $ | — | $ | 414 | $ | 414 | |||||||||
2018 | — | — | — | 593 | 593 | ||||||||||||||
2019 | — | — | — | 644 | 644 | ||||||||||||||
2020 | 574,379 | — | 1,000,000 | 1,133 | 1,575,512 | ||||||||||||||
2021 | — | 1,211,515 | 400,000 | — | 1,611,515 | ||||||||||||||
Thereafter | — | 300,000 | 2,767,620 | — | 3,067,620 | ||||||||||||||
Subtotal | $ | 574,379 | $ | 1,511,515 | $ | 4,167,620 | $ | 2,784 | $ | 6,256,298 | |||||||||
Unamortized discount | — | — | (15,040 | ) | — | (15,040 | ) | ||||||||||||
Unamortized premium | — | — | — | 311 | 311 | ||||||||||||||
Total | $ | 574,379 | $ | 1,511,515 | $ | 4,152,580 | $ | 3,095 | $ | 6,241,569 |
(1) | Subject to two six-month extension options exercisable by us. The bank group is obligated to grant the extension options provided we give proper notice, we make certain representations and warranties and no default exists under the global revolving credit facility. |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net income available to common stockholders | $ | 66,145 | $ | 39,125 | |||
Weighted average shares outstanding—basic | 159,297,027 | 146,565,564 | |||||
Potentially dilutive common shares: | |||||||
Stock options | 4 | 11,286 | |||||
Unvested incentive units | 237,336 | 122,601 | |||||
Forward equity offering | 283,388 | — | |||||
Market performance-based awards | 603,900 | 733,743 | |||||
Weighted average shares outstanding—diluted | 160,421,655 | 147,433,194 | |||||
Income per share: | |||||||
Basic | $ | 0.42 | $ | 0.27 | |||
Diluted | $ | 0.41 | $ | 0.27 |
Three Months Ended March 31, | |||||
2017 | 2016 | ||||
Weighted average of Operating Partnership common units not owned by Digital Realty Trust, Inc. | 2,177,874 | 2,482,234 | |||
Potentially dilutive Series E Cumulative Redeemable Preferred Stock | — | 3,345,087 | |||
Potentially dilutive Series F Cumulative Redeemable Preferred Stock | 1,783,083 | 2,121,447 | |||
Potentially dilutive Series G Cumulative Redeemable Preferred Stock | 2,438,074 | 2,900,732 | |||
Potentially dilutive Series H Cumulative Redeemable Preferred Stock | 3,572,744 | 4,250,720 | |||
Potentially dilutive Series I Cumulative Redeemable Preferred Stock | 2,440,928 | 2,904,126 | |||
Total | 12,412,703 | 18,004,346 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net income available to common unitholders | $ | 67,049 | $ | 39,788 | |||
Weighted average units outstanding—basic | 161,474,901 | 149,047,798 | |||||
Potentially dilutive common units: | |||||||
Stock options | 4 | 11,286 | |||||
Unvested incentive units | 237,336 | 122,601 | |||||
Forward equity offering | 283,388 | — | |||||
Market performance-based awards | 603,900 | 733,743 | |||||
Weighted average units outstanding—diluted | 162,599,529 | 149,915,428 | |||||
Income per unit: | |||||||
Basic | $ | 0.42 | $ | 0.27 | |||
Diluted | $ | 0.41 | $ | 0.27 |
Three Months Ended March 31, | |||||
2017 | 2016 | ||||
Potentially dilutive Series E Cumulative Redeemable Preferred Units | — | 3,345,087 | |||
Potentially dilutive Series F Cumulative Redeemable Preferred Units | 1,783,083 | 2,121,447 | |||
Potentially dilutive Series G Cumulative Redeemable Preferred Units | 2,438,074 | 2,900,732 | |||
Potentially dilutive Series H Cumulative Redeemable Preferred Units | 3,572,744 | 4,250,720 | |||
Potentially dilutive Series I Cumulative Redeemable Preferred Units | 2,440,928 | 2,904,126 | |||
Total | 10,234,829 | 15,522,112 |
March 31, 2017 | December 31, 2016 | ||||||||||
Number of units | Percentage of total | Number of units | Percentage of total | ||||||||
Digital Realty Trust, Inc. | 159,539,892 | 98.4 | % | 159,019,118 | 98.5 | % | |||||
Noncontrolling interests consist of: | |||||||||||
Common units held by third parties | 1,011,814 | 0.6 | % | 1,141,814 | 0.7 | % | |||||
Incentive units held by employees and directors (see Note 13) | 1,534,357 | 1.0 | % | 1,333,849 | 0.8 | % | |||||
162,086,063 | 100.0 | % | 161,494,781 | 100.0 | % |
Common Units | Incentive Units | Total | ||||||
As of December 31, 2016 | 1,141,814 | 1,333,849 | 2,475,663 | |||||
Redemption of common units for shares of Digital Realty Trust, Inc. common stock (1) | (130,000 | ) | — | (130,000 | ) | |||
Conversion of incentive units held by employees and directors for shares of Digital Realty Trust, Inc. common stock (1) | — | (86,964 | ) | (86,964 | ) | |||
Incentive units issued upon achievement of market performance condition | — | 232,148 | 232,148 | |||||
Grant of incentive units to employees and directors | — | 55,324 | 55,324 | |||||
As of March 31, 2017 | 1,011,814 | 1,534,357 | 2,546,171 |
(1) | Redemption of common units and conversion of incentive units were 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. |
Date dividend declared | Dividend payment date | Series F Preferred Stock (1) | Series G Preferred Stock | Series H Preferred Stock | Series I Preferred Stock | Common Stock | |||||||||||||||
March 1, 2017 | March 31, 2017 | $ | 3,023 | $ | 3,672 | $ | 6,730 | $ | 3,969 | $ | 148,358 | ||||||||||
Annual rate of dividend per share | $ | 1.656 | $ | 1.469 | $ | 1.844 | $ | 1.588 | $ | 3.720 |
(1) | Redeemed on April 5, 2017 for $25.01840 per share, or a redemption price of $25.00 per share, plus accrued and unpaid dividends up to but not including the redemption date of approximately $0.1 million in the aggregate. In connection with the redemption, the previously incurred offering costs of approximately $6.3 million will be deducted in the computation of net income available to common stockholders. |
Foreign currency translation adjustments | Cash flow hedge adjustments | Accumulated other comprehensive income (loss), net | |||||||||
Balance as of December 31, 2016 | $ | (175,642 | ) | $ | 40,037 | $ | (135,605 | ) | |||
Net current period change | 16,354 | (4,305 | ) | 12,049 | |||||||
Reclassification to interest expense from interest rate swaps | — | 1,016 | 1,016 | ||||||||
Balance as of March 31, 2017 | $ | (159,288 | ) | $ | 36,748 | $ | (122,540 | ) |
Date distribution declared | Distribution payment date | Series F Preferred Units (1) | Series G Preferred Units | Series H Preferred Units | Series I Preferred Units | Common Units | |||||||||||||||
March 1, 2017 | March 31, 2017 | $ | 3,023 | $ | 3,672 | $ | 6,730 | $ | 3,969 | $ | 150,968 | ||||||||||
Annual rate of distribution per unit | $ | 1.656 | $ | 1.469 | $ | 1.844 | $ | 1.588 | $ | 3.720 |
(1) | Redeemed on April 5, 2017 for $25.01840 per unit, or a redemption price of $25.00 per unit, plus accrued and unpaid distributions up to but not including the redemption date of approximately $0.1 million in the aggregate. In connection with the redemption, the previously incurred offering costs of approximately $6.3 million will be deducted in the computation of net income available to common unitholders. |
Foreign currency translation adjustments | Cash flow hedge adjustments | Accumulated other comprehensive loss | |||||||||
Balance as of December 31, 2016 | $ | (180,504 | ) | $ | 39,885 | $ | (140,619 | ) | |||
Net current period change | 16,578 | (4,364 | ) | 12,214 | |||||||
Reclassification to interest expense from interest rate swaps | — | 1,030 | 1,030 | ||||||||
Balance as of March 31, 2017 | $ | (163,926 | ) | $ | 36,551 | $ | (127,375 | ) |
Unvested Long-term Incentive Units | Units | Weighted-Average Grant Date Fair Value | ||||
Unvested, beginning of period | 128,822 | $ | 66.58 | |||
Granted | 55,324 | 107.98 | ||||
Vested | (41,558 | ) | 60.83 | |||
Unvested, end of period | 142,588 | $ | 84.32 |
Level | RMS Relative Market Performance | Market Performance Vesting Percentage |
Below Threshold Level | ≤ -300 basis points | 0% |
Threshold Level | -300 basis points | 25% |
Target Level | 100 basis points | 50% |
High Level | > 500 basis points | 100% |
Period Ended March 31, 2017 | ||||||
Shares | Weighted average exercise price | |||||
Options outstanding, beginning of period | 17,674 | $ | 41.73 | |||
Exercised | (17,668 | ) | 41.73 | |||
Options outstanding, end of period | 6 | $ | 41.73 | |||
Exercisable, end of period | 6 | $ | 41.73 |
Options outstanding and exercisable | ||||||||||||
Exercise price | Number outstanding | Weighted-average remaining contractual life (years) | Weighted-average exercise price | Aggregate intrinsic value | ||||||||
$41.73 | 6 | 0.09 | $ | 41.73 | $ | 388 |
Unvested Restricted Stock | Shares | Weighted-Average Grant Date Fair Value | ||||
Unvested, beginning of period | 274,642 | $ | 73.81 | |||
Granted | 107,411 | 108.00 | ||||
Vested | (86,209 | ) | 67.27 | |||
Cancelled or expired | (4,366 | ) | 79.75 | |||
Unvested, end of period | 291,478 | $ | 88.25 |
Notional Amount | Fair Value at Significant Other Observable Inputs (Level 2) | |||||||||||||||||||||||
As of March 31, 2017 | As of December 31, 2016 | Type of Derivative | Strike Rate | Effective Date | Expiration Date | As of March 31, 2017 | As of December 31, 2016 | |||||||||||||||||
Currently-paying contracts | ||||||||||||||||||||||||
$ | 206,000 | (1) | $ | 206,000 | (1) | Swap | 0.932 | Jun 18, 2012 | Apr 18, 2017 | $ | 1 | (6) | $ | (90 | ) | (6) | ||||||||
54,905 | (1) | 54,905 | (1) | Swap | 0.670 | Aug 6, 2012 | Apr 6, 2017 | 1 | (6) | 16 | (6) | |||||||||||||
75,000 | (1) | 75,000 | (1) | Swap | 1.016 | Apr 6, 2016 | Jan 6, 2021 | 2,086 | (6) | 1,911 | (6) | |||||||||||||
75,000 | (1) | 75,000 | (1) | Swap | 1.164 | Jan 15, 2016 | Jan 15, 2021 | 1,688 | (6) | 1,487 | (6) | |||||||||||||
300,000 | (2) | 300,000 | (2) | Swap | 1.435 | Jan 15, 2016 | Jan 15, 2023 | 9,173 | (6) | 8,128 | (6) | |||||||||||||
135,663 | (3) | 130,850 | (3) | Swap | 0.925 | Jul 17, 2012 | Apr 18, 2017 | (5 | ) | (6) | 18 | (6) | ||||||||||||
212,691 | (4) | 209,132 | (4) | Swap | 0.792 | Jan 15, 2016 | Jan 15, 2019 | (1,550 | ) | (6) | (1,818 | ) | (6) | |||||||||||
73,964 | (5) | 73,294 | (5) | Swap | 0.779 | Jan 15, 2016 | Jan 15, 2021 | 1,414 | (6) | 1,556 | (6) | |||||||||||||
$ | 1,133,223 | $ | 1,124,181 | $ | 12,808 | $ | 11,208 | |||||||||||||||||
Forward-starting contracts | ||||||||||||||||||||||||
$ | 206,000 | $ | — | Forward-starting Swap | 1.611 | Jun 15, 2017 | Jan 15, 2020 | $ | 318 | $ | — | |||||||||||||
54,905 | — | Forward-starting Swap | 1.605 | Jun 6, 2017 | Jan 6, 2020 | 77 | — | |||||||||||||||||
$ | 260,905 | $ | — | $ | 395 | $ | — |
(1) | Represents portions of the U.S. dollar tranche of the 5-Year Term Loan. |
(2) | Represents the U.S. dollar tranche of the 7-Year Term Loan. |
(3) | Represents a portion of the Singapore dollar tranche of the 5-Year Term Loan. Translation to U.S. dollars is based on exchange rate of $0.72 to 1.00 SGD as of March 31, 2017 and $0.69 to 1.00 SGD as of December 31, 2016. |
(4) | Represents the British pound sterling tranche of the 5-Year Term Loan. Translation to U.S. dollars is based on exchange rate of $1.26 to £1.00 as of March 31, 2017 and $1.23 to £1.00 as of December 31, 2016. |
(5) | Represents the Canadian dollar tranche of the 5-Year Term Loan. Translation to U.S. dollars is based on exchange rate of $0.75 to 1.00 CAD as of March 31, 2017 and $0.74 to 1.00 CAD as of December 31, 2016. |
(6) | Balance recorded in other assets in the consolidated balance sheets if positive and recorded in accounts payable and other accrued liabilities in the consolidated balance sheets if negative. |
Foreign Currency Derivative | Number of Instruments | Notional Amount Sold | Notional Amount Purchased | Maturity Date | Fair Value | ||
Currency forward contracts | 1 | GBP 87,299 | USD 126,961 | 12/15/2017 | $ | 16,560 |
Categorization under the fair value hierarchy | As of March 31, 2017 | As of December 31, 2016 | |||||||||||||||
Estimated Fair Value | Carrying Value | Estimated Fair Value | Carrying Value | ||||||||||||||
Global revolving credit facility (1)(5) | Level 2 | $ | 574,379 | $ | 574,379 | $ | 210,077 | $ | 210,077 | ||||||||
Unsecured term loans (2)(6) | Level 2 | 1,511,515 | 1,511,515 | 1,488,498 | 1,488,498 | ||||||||||||
Unsecured senior notes (3)(4)(7) | Level 2 | 4,433,626 | 4,152,580 | 4,428,074 | 4,179,171 | ||||||||||||
Mortgage loans (3)(8) | Level 2 | 3,050 | 3,095 | 3,217 | 3,250 | ||||||||||||
$ | 6,522,570 | $ | 6,241,569 | $ | 6,129,866 | $ | 5,880,996 |
(1) | The carrying value of our global revolving credit facility approximates estimated fair value, due to the variability of interest rates and the stability of our credit ratings. |
(2) | The carrying value of our unsecured term loans approximates estimated fair value, due to the variability of interest rates and the stability of our credit ratings. |
(3) | Valuations for our unsecured senior notes and mortgage loans are determined based on the expected future payments discounted at risk-adjusted rates. The 5.875% 2020 Notes, 3.400% 2020 Notes, 2021 Notes, 3.950% 2022 Notes, 3.625% 2022 Notes, 2023 Notes, 2024 Notes, 4.750% 2025 Notes and 4.250% 2025 Notes are valued based on quoted market prices. |
(4) | The carrying value of the 5.875% 2020 Notes, 3.400% 2020 Notes, 2021 Notes, 3.625% 2022 Notes, 3.950% 2022 Notes, 2023 Notes, 2024 Notes and 4.250% 2025 Notes are net of discount of $15,040 and $15,649 in the aggregate as of March 31, 2017 and December 31, 2016, respectively. |
(5) | The estimated fair value and carrying value are exclusive of deferred financing costs of $9.9 million and $10.9 million as of March 31, 2017 and December 31, 2016, respectively. |
(6) | The estimated fair value and carrying value are exclusive of deferred financing costs of $5.8 million and $6.1 million as of March 31, 2017 and December 31, 2016, respectively. |
(7) | The estimated fair value and carrying value are exclusive of deferred financing costs of $24.5 million and $25.4 million as of March 31, 2017 and December 31, 2016, respectively. |
(8) | The estimated fair value and carrying value are exclusive of deferred financing costs of $0.0 million and $0.0 million as of March 31, 2017 and December 31, 2016, respectively. |
Year Ended December 31: | Operating Properties Acquired (1) | Net Rentable Square Feet(2) | Square Feet of Space Under Active Development as of March 31, 2017 (3) | Square Feet of Space Held for Future Development as of March 31, 2017 (4) | |||||||
2002 | 4 | 1,065,389 | 22,535 | 51,867 | |||||||
2003 | 4 | 821,603 | — | — | |||||||
2004 | 10 | (5) | 2,393,931 | — | 89,923 | ||||||
2005 | 18 | (5) | 2,777,191 | — | 119,779 | ||||||
2006 | 16 | 2,195,744 | — | 340,203 | |||||||
2007 | 11 | (6) | 1,378,590 | — | — | ||||||
2008 | 4 | 481,575 | — | 41,539 | |||||||
2009 | 8 | (7)(9)(10) | 1,965,314 | 56,126 | 223,531 | ||||||
2010 | 15 | 2,562,718 | 65,680 | 68,247 | |||||||
2011 | 11 | (8) | 1,936,619 | 232,045 | 85,590 | ||||||
2012 | 15 | 2,870,257 | 38,561 | 257,460 | |||||||
2013 | 10 | 1,154,436 | 315,922 | 108,926 | |||||||
2014 | — | — | — | — | |||||||
2015 | 10 | (11) | 929,100 | 225,599 | 276,164 | ||||||
2016 | 9 | (12) | 373,064 | 514,348 | 68,670 | ||||||
2017 | — | — | — | — | |||||||
Operating properties owned as of March 31, 2017 | 145 | 22,905,531 | 1,470,816 | 1,731,899 |
(1) | Excludes properties sold: 114 Rue Ambroise Croizat (August 2016), 210 N. Tucker Boulevard (July 2016), 900 Walnut Street (July 2016), 251 Exchange Place (July 2016), 1807 Michael Faraday Court (July 2016), 47700 Kato Road and 1055 Page Avenue (January 2016), 650 Randolph Road (December 2015), 833 Chestnut Street (April 2015), 3300 East Birch Street (March 2015), 100 Quannapowitt (February 2015), 6 Braham Street (April 2014), 100 Technology Center Drive (March 2007), 4055 Valley View Lane (March 2007) and 7979 East Tufts Avenue (July 2006). In addition, also excludes 701 & 717 Leonard Street, a parking garage located adjacent to our internet gateway data center located at 2323 Bryan Street and not considered a separate property. Also excludes a leasehold interest acquired in March 2007 related to an acquisition made in 2006. Excludes 13 developable land parcels. Includes 12 properties held in our managed portfolio of unconsolidated joint ventures consisting of 4650 Old Ironsides Drive (Silicon Valley), 2950 Zanker Road (Silicon Valley), 4700 Old Ironsides Drive (Silicon Valley), 444 Toyama Drive (Silicon Valley), 43790 Devin Shafron Drive (Northern Virginia), 21551 Beaumeade Circle (Northern Virginia), 7505 Mason King Court (Northern Virginia), 14901 FAA Boulevard (Dallas), 900 Dorothy Drive (Dallas), 636 Pierce Street (New York), 43915 Devin Shafron Drive (Northern Virginia) and 33 Chun Choi Street (Hong Kong); and two properties held in our non-managed unconsolidated joint ventures consisting of 2001 Sixth Avenue (Seattle) and 2020 Fifth Avenue (Seattle). |
(2) | Current net rentable square feet as of March 31, 2017, which represents the current square feet under lease as specified in the applicable lease agreements plus management’s estimate of space available for lease based on engineering drawings. Includes customers’ proportional share of common areas but excludes space held for development. |
(3) | Space under active development includes current base building and data center projects in progress. |
(4) | Space held for future development includes space held for future data center development, and excludes space under active development. |
(5) | As of March 31, 2017, there were three properties held for sale; two were acquired in 2004 and one in 2005. |
(6) | Includes three developed buildings (43915 Devin Shafron Drive, 43830 Devin Shafron Drive and 43790 Devin Shafron Drive) placed into service in 2010 and 2011 that are being included with a property (Devin Shafron buildings) that was acquired in 2007. |
(7) | Includes a developed building (21551 Beaumeade Circle) placed into service in 2011 that is being included with a property (Beaumeade Circle Portfolio) that was acquired in 2009. |
(8) | Includes four developed buildings (43940 Digital Loudoun Plaza in Northern Virginia, 3825 NW Aloclek Place in Portland, Oregon, 98 Radnor Drive in Melbourne, Australia and 1-23 Templar Road in Sydney, Australia) placed into service in 2012 and 2013, for which the land parcels were acquired in 2011. |
(9) | 43790 Devin Shafron Drive and 21551 Beaumeade Circle, which were previously included as part of the Devin Shafron buildings and Beaumeade Circle Portfolio, respectively, are now each separately included in the property count because they were separately contributed to an unconsolidated joint venture in September 2013. |
(10) | 43915 Devin Shafron Drive, which was previously included as part of the Devin Shafron buildings, is now separately included in the property count because it was separately contributed to an unconsolidated joint venture in September 2014. |
(11) | Includes eight properties that were added as part of the Telx Acquisition, two of which are owned: 56 Marietta Street (Atlanta) and 100 Delawanna Avenue (New York); and six that are leased from third parties: 60 Hudson Street (New York), 32 Avenue of the Americas (New York), 2 Peekay Drive (New York), 2820 Northwestern Parkway (Silicon Valley), 8425 N. Stemmons Freeway (Dallas) and 3433 S. 120th Place (Seattle). Telx also leases space at 111 8th Avenue (New York), which is partially subleased by Telx from our company and partially subleased from third parties. |
(12) | Includes eight properties that were added as part of the European Portfolio Acquisition, one of which is owned, with the remaining seven being leased from third parties. |
Rentable Square Feet (1) | Expiring Rates (2) | New Rates (2) | Rental Rate Changes | TI’s/Lease Commissions Per Square Foot | Weighted Average Lease Terms (years) | ||||||||||||||||
Leasing Activity (3)(4) | |||||||||||||||||||||
Renewals Signed | |||||||||||||||||||||
Turn-Key Flex ® | 100,874 | $ | 140.34 | $ | 148.53 | 5.8 | % | $ | 4.17 | 3.5 | |||||||||||
Powered Base Building ® | 81,745 | $ | 22.39 | $ | 28.21 | 26.0 | % | $ | 3.22 | 10.3 | |||||||||||
Colocation | 96,350 | $ | 292.88 | $ | 299.98 | 2.4 | % | $ | — | 1.7 | |||||||||||
Non-technical | 3,290 | $ | 37.22 | $ | 39.06 | 4.9 | % | $ | 0.64 | 6.4 | |||||||||||
New Leases Signed (5) | |||||||||||||||||||||
Turn-Key Flex ® | 185,062 | — | $ | 164.66 | — | $ | 48.61 | 6.1 | |||||||||||||
Colocation | 38,557 | — | $ | 281.33 | — | $ | 28.08 | 2.6 | |||||||||||||
Non-technical | 9,461 | — | $ | 45.36 | — | $ | 7.90 | 6.4 | |||||||||||||
Leasing Activity Summary | |||||||||||||||||||||
Turn-Key Flex ® | 285,936 | — | $ | 158.97 | — | — | |||||||||||||||
Powered Base Building ® | 81,745 | — | $ | 28.21 | — | — | |||||||||||||||
Colocation | 134,907 | — | $ | 294.65 | — | — | |||||||||||||||
Non-technical | 12,751 | — | $ | 43.73 | — | — |
(1) | For some of our properties, we calculate square footage based on factors in addition to contractually leased square feet, including power, required support space and common area. |
(2) | Rental rates represent annual estimated cash rent per rentable square foot adjusted for straight-line rents in accordance with GAAP. GAAP rental rates are inclusive of tenant concessions, if any. |
(3) | Excludes short-term leases. |
(4) | Commencement dates for the leases signed range from 2017 to 2019. |
(5) | Includes leases signed for new and re-leased space. |
Metropolitan Area | Percentage of March 31, 2017 total annualized rent (1) | |
Northern Virginia | 11.8 | % |
New York | 11.8 | % |
London, United Kingdom | 11.2 | % |
Dallas | 10.5 | % |
Chicago | 8.5 | % |
Silicon Valley | 8.5 | % |
Phoenix | 5.8 | % |
San Francisco | 4.5 | % |
Singapore | 3.8 | % |
Atlanta | 3.1 | % |
Seattle | 3.0 | % |
Boston | 2.8 | % |
Los Angeles | 2.4 | % |
Other | 12.3 | % |
Total | 100.0 | % |
(1) | Annualized rent is monthly contractual rent (defined as cash base rent before abatements) under existing leases as of March 31, 2017 multiplied by 12. The aggregate amount of abatements for the three months ended March 31, 2017 was approximately $4.3 million. |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Income Statement Data: | |||||||
Total operating revenues | $ | 550,569 | $ | 504,199 | |||
Total operating expenses | (413,286 | ) | (386,083 | ) | |||
Operating income | 137,283 | 118,116 | |||||
Other expenses, net | (52,720 | ) | (55,783 | ) | |||
Net income | $ | 84,563 | $ | 62,333 |
Location | Market | Date Acquired | Amount (in millions) | |||||
Osaka Phase II (1) | Osaka, Japan | March 15, 2017 | $ | 13.6 |
(1) | Represents currently vacant land which is not included in our operating property count. Purchase price in U.S. dollars and excludes capitalized closing costs. |
Three Months Ended March 31, | |||||||||||
2017 | 2016 | Change | |||||||||
Rental | $ | 404,126 | $ | 371,128 | $ | 32,998 | |||||
Tenant reimbursements | 87,288 | 84,218 | 3,070 | ||||||||
Interconnection and other | 57,225 | 46,963 | 10,262 | ||||||||
Fee income | 1,895 | 1,799 | 96 | ||||||||
Other | 35 | 91 | (56 | ) | |||||||
Total operating revenues | $ | 550,569 | $ | 504,199 | $ | 46,370 |
Stabilized | Pre-Stabilized and Other | ||||||||||||||||||||||
Three Months Ended March 31, | Three Months Ended March 31, | ||||||||||||||||||||||
2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||||
Rental | $ | 250,064 | $ | 250,215 | $ | (151 | ) | $ | 154,062 | $ | 120,913 | $ | 33,149 | ||||||||||
Tenant reimbursements | 53,120 | 52,735 | 385 | 34,168 | 31,483 | 2,685 | |||||||||||||||||
Interconnection and other | 49,150 | 43,012 | 6,138 | 8,075 | 3,951 | 4,124 | |||||||||||||||||
Operating revenues | $ | 352,334 | $ | 345,962 | $ | 6,372 | $ | 196,305 | $ | 156,347 | $ | 39,958 |
Three Months Ended March 31, | |||||||||||
2017 | 2016 | Change | |||||||||
Rental property operating and maintenance | $ | 169,339 | $ | 154,168 | $ | 15,171 | |||||
Property taxes | 26,919 | 27,331 | (412 | ) | |||||||
Insurance | 2,592 | 2,412 | 180 | ||||||||
Depreciation and amortization | 176,466 | 169,016 | 7,450 | ||||||||
General and administrative | 34,647 | 31,256 | 3,391 | ||||||||
Transactions | 3,323 | 1,900 | 1,423 | ||||||||
Total operating expenses | $ | 413,286 | $ | 386,083 | $ | 27,203 | |||||
Interest expense | $ | 55,450 | $ | 57,261 | $ | (1,811 | ) |
Stabilized | Pre-Stabilized and Other | ||||||||||||||||||||||
Three Months Ended March 31, | Three Months Ended March 31, | ||||||||||||||||||||||
2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||||
Rental property operating and maintenance | $ | 100,879 | $ | 99,874 | $ | 1,005 | $ | 68,460 | $ | 54,294 | $ | 14,166 | |||||||||||
Property taxes | 16,055 | 17,451 | (1,396 | ) | 10,864 | 9,880 | 984 | ||||||||||||||||
Insurance | 1,991 | 1,883 | 108 | 601 | 529 | 72 | |||||||||||||||||
Operating expenses | $ | 118,925 | $ | 119,208 | $ | (283 | ) | $ | 79,925 | $ | 64,703 | $ | 15,222 |
Date dividend declared | Dividend payment date | Series F Preferred Stock (1) | Series G Preferred Stock | Series H Preferred Stock | Series I Preferred Stock | Common Stock | |||||||||||||||
March 1, 2017 | March 31, 2017 | $ | 3,023 | $ | 3,672 | $ | 6,730 | $ | 3,969 | $ | 148,358 | ||||||||||
Annual rate of dividend per share | $ | 1.656 | $ | 1.469 | $ | 1.844 | $ | 1.588 | $ | 3.720 |
(1) | Redeemed on April 5, 2017 for $25.01840 per share, or a redemption price of $25.00 per share, plus accrued and unpaid dividends up to but not including the redemption date of approximately $0.1 million in the aggregate. In connection with the redemption, the previously incurred offering costs of approximately $6.3 million will be deducted in the computation of net income available to common stockholders. |
Development Lifecycle | As of March 31, 2017 | As of December 31, 2016 | |||||||||||||||||||||||||||
(dollars in thousands) | Net Rentable Square Feet | Current Investment (2) | Future Investment (3) | Total Cost | Net Rentable Square Feet | Current Investment (4) | Future Investment (3) | Total Cost | |||||||||||||||||||||
Development Construction in Progress | |||||||||||||||||||||||||||||
Space Held for Development (5) | 1,570,802 | $ | 374,992 | $ | — | $ | 374,992 | 920,232 | $ | 284,234 | $ | — | $ | 284,234 | |||||||||||||||
Base Building Construction | 749,375 | 74,828 | 66,671 | 141,499 | 1,189,110 | 116,925 | 154,248 | 271,173 | |||||||||||||||||||||
Datacenter Construction | 721,441 | 315,308 | 366,824 | 682,132 | 831,706 | 309,065 | 447,324 | 756,389 | |||||||||||||||||||||
Equipment Pool & Other Inventory | 7,816 | — | 7,816 | 9,642 | — | 9,642 | |||||||||||||||||||||||
Campus, Tenant Improvements & Other | 8,022 | 11,442 | 19,464 | 12,564 | 22,115 | 34,679 | |||||||||||||||||||||||
Total Development Construction in Progress | 3,041,618 | 780,966 | 444,937 | 1,225,903 | 2,941,048 | 732,430 | 623,687 | 1,356,117 | |||||||||||||||||||||
Land Inventory | (1) | 229,411 | — | 229,411 | (1) | 195,525 | — | 195,525 | |||||||||||||||||||||
Enhancement & Other | 8,341 | 11,453 | 19,794 | 8,623 | 8,060 | 16,683 | |||||||||||||||||||||||
Recurring | 21,079 | 34,339 | 55,418 | 13,983 | 25,506 | 39,489 | |||||||||||||||||||||||
Total Construction in Progress | $ | 1,039,797 | $ | 490,729 | $ | 1,530,526 | $ | 950,561 | $ | 657,253 | $ | 1,607,814 |
(1) | Represents approximately 421 acres as of March 31, 2017 and approximately 286 acres as of December 31, 2016. |
(2) | Represents balances incurred through March 31, 2017 and included in land and building and improvements in the condensed consolidated balance sheets. |
(3) | Represents estimated cost to complete specific scope of work pursuant to contract, budget or approved capital plan. |
(4) | Represents balances incurred through December 31, 2016 and included in land and building and improvements in the condensed consolidated balance sheets. |
(5) | Excludes space held for development related to unconsolidated joint ventures and properties held for sale. |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Development projects | $ | 199,742 | $ | 131,476 | |||
Enhancement and improvements | 2,816 | 441 | |||||
Recurring capital expenditures | 29,588 | 21,064 | |||||
Total capital expenditures (excluding indirect costs) | $ | 232,146 | $ | 152,981 |
Date distribution declared | Distribution payment date | Series F Preferred Units (1) | Series G Preferred Units | Series H Preferred Units | Series I Preferred Units | Common Units | |||||||||||||||
March 1, 2017 | March 31, 2017 | $ | 3,023 | $ | 3,672 | $ | 6,730 | $ | 3,969 | $ | 150,968 | ||||||||||
Annual rate of distribution per unit | $ | 1.656 | $ | 1.469 | $ | 1.844 | $ | 1.588 | $ | 3.720 |
(1) | Redeemed on April 5, 2017 for $25.01840 per unit, or a redemption price of $25.00 per unit, plus accrued and unpaid distributions up to but not including the redemption date of approximately $0.1 million in the aggregate. In connection with the redemption, the previously incurred offering costs of approximately $6.3 million were deducted in the computation of net income available to common unitholders. |
Debt Summary: | |||
Fixed rate | $ | 4,170.4 | |
Variable rate debt subject to interest rate swaps | 1,133.2 | ||
Total fixed rate debt (including interest rate swaps) | 5,303.6 | ||
Variable rate—unhedged | 952.7 | ||
Total | $ | 6,256.3 | |
Percent of Total Debt: | |||
Fixed rate (including swapped debt) | 84.8 | % | |
Variable rate | 15.2 | % | |
Total | 100.0 | % | |
Effective Interest Rate as of March 31, 2017 (1) | |||
Fixed rate (including hedged variable rate debt) | 3.79 | % | |
Variable rate | 1.65 | % | |
Effective interest rate | 3.46 | % |
(1) | Excludes impact of deferred financing cost amortization. |
Three Months Ended March 31, | |||||||||||
2017 | 2016 | Change | |||||||||
Net cash provided by operating activities | $ | 219,066 | $ | 180,614 | $ | 38,452 | |||||
Net cash used in investing activities | (215,568 | ) | (154,128 | ) | (61,440 | ) | |||||
Net cash used in financing activities | (2,891 | ) | (50,815 | ) | 47,924 | ||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 607 | $ | (24,329 | ) | $ | 24,936 |
Three Months Ended March 31, | |||||||||||
2017 | 2016 | Change | |||||||||
Proceeds from borrowings, net of repayments | $ | 307,029 | $ | 240,386 | $ | 66,643 | |||||
Net proceeds from issuance of common and preferred stock, including equity plans | 2,724 | 1,942 | 782 | ||||||||
Dividend and distribution payments | (312,498 | ) | (280,899 | ) | (31,599 | ) | |||||
Other | (146 | ) | (12,244 | ) | 12,098 | ||||||
Net cash used in financing activities | $ | (2,891 | ) | $ | (50,815 | ) | $ | 47,924 |
Three Months Ended March 31, | |||||||||||
2017 | 2016 | Change | |||||||||
Proceeds from borrowings, net of repayments | $ | 307,029 | $ | 240,386 | $ | 66,643 | |||||
General partner contributions, net | 2,724 | 1,942 | 782 | ||||||||
Distribution payments | (312,498 | ) | (280,899 | ) | (31,599 | ) | |||||
Other | (146 | ) | (12,244 | ) | 12,098 | ||||||
Net cash used in financing activities | $ | (2,891 | ) | $ | (50,815 | ) | $ | 47,924 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net income available to common stockholders | $ | 66,145 | $ | 39,125 | |||
Adjustments: | |||||||
Noncontrolling interests in operating partnership | 904 | 663 | |||||
Real estate related depreciation and amortization (1) | 173,447 | 166,912 | |||||
Real estate related depreciation and amortization related to investment in unconsolidated joint ventures | 2,757 | 2,803 | |||||
(Gain) loss on sale of properties | 522 | (1,097 | ) | ||||
FFO available to common stockholders and unitholders (2) | $ | 243,775 | $ | 208,406 | |||
Basic FFO per share and unit | $ | 1.51 | $ | 1.40 | |||
Diluted FFO per share and unit (2) | $ | 1.50 | $ | 1.39 | |||
Weighted average common stock and units outstanding | |||||||
Basic | 161,475 | 149,048 | |||||
Diluted (2) | 162,600 | 149,915 | |||||
(1) Real estate related depreciation and amortization was computed as follows: | |||||||
Depreciation and amortization per income statement | $ | 176,466 | $ | 169,016 | |||
Non-real estate depreciation | (3,019 | ) | (2,104 | ) | |||
$ | 173,447 | $ | 166,912 |
(2) | For all periods presented, we have excluded the effect of dilutive series E, series F, series G, series H and series I 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, series F, series G, series H and series I preferred stock, as applicable, which we consider highly improbable. |
Three Months Ended March 31, | |||||
2017 | 2016 | ||||
Weighted average common stock and units outstanding | 161,475 | 149,048 | |||
Add: Effect of dilutive securities | 1,125 | 867 | |||
Weighted average common stock and units outstanding—diluted | 162,600 | 149,915 |
Carrying Value | Estimated Fair Value | ||||||
Fixed rate debt | $ | 4,170.4 | $ | 4,451.3 | |||
Variable rate debt subject to interest rate swaps | 1,133.2 | 1,133.2 | |||||
Total fixed rate debt (including interest rate swaps) | 5,303.6 | 5,584.5 | |||||
Variable rate debt | 952.7 | 952.7 | |||||
Total outstanding debt | $ | 6,256.3 | $ | 6,537.2 |
Notional Amount | Fair Value at Significant Other Observable Inputs (Level 2) | ||||||||||||||||||||||
As of March 31, 2017 | As of December 31, 2016 | Type of Derivative | Strike Rate | Effective Date | Expiration Date | As of March 31, 2017 | As of December 31, 2016 | ||||||||||||||||
Currently-paying contracts | |||||||||||||||||||||||
$ | 206,000 | (1) | $ | 206,000 | (1) | Swap | 0.932 | Jun 18, 2012 | Apr 18, 2017 | $ | 1 | $ | (90 | ) | |||||||||
54,905 | (1) | 54,905 | (1) | Swap | 0.670 | Aug 6, 2012 | Apr 6, 2017 | 1 | 16 | ||||||||||||||
75,000 | (1) | 75,000 | (1) | Swap | 1.016 | Apr 6, 2016 | Jan 6, 2021 | 2,086 | 1,911 | ||||||||||||||
75,000 | (1) | 75,000 | (1) | Swap | 1.164 | Jan 15, 2016 | Jan 15, 2021 | 1,688 | 1,487 | ||||||||||||||
300,000 | (2) | 300,000 | (2) | Swap | 1.435 | Jan 15, 2016 | Jan 15, 2023 | 9,173 | 8,128 | ||||||||||||||
135,663 | (3) | 130,850 | (3) | Swap | 0.925 | Jul 17, 2012 | Apr 18, 2017 | (5 | ) | 18 | |||||||||||||
212,691 | (4) | 209,132 | (4) | Swap | 0.792 | Jan 15, 2016 | Jan 15, 2019 | (1,550 | ) | (1,818 | ) | ||||||||||||
73,964 | (5) | 73,294 | (5) | Swap | 0.779 | Jan 15, 2016 | Jan 15, 2021 | 1,414 | 1,556 | ||||||||||||||
$ | 1,133,223 | $ | 1,124,181 | $ | 12,808 | $ | 11,208 | ||||||||||||||||
Forward-starting contracts | |||||||||||||||||||||||
$ | 206,000 | $ | — | Forward-starting Swap | 1.611 | Jun 15, 2017 | Jan 15, 2020 | $ | 318 | $ | — | ||||||||||||
54,905 | — | Forward-starting Swap | 1.605 | Jun 6, 2017 | Jan 6, 2020 | 77 | — | ||||||||||||||||
$ | 260,905 | $ | — | $ | 395 | $ | — |
(1) | Represents portions of the U.S. dollar tranche of the 5-Year Term Loan. |
(2) | Represents the U.S. dollar tranche of the 7-Year Term Loan. |
(3) | Represents a portion of the Singapore dollar tranche of the 5-Year Term Loan. Translation to U.S. dollars is based on exchange rates of $0.72 to 1.00 SGD as of March 31, 2017 and $0.69 to 1.00 SGD as of December 31, 2016. |
(4) | Represents the British pound sterling tranche of the 5-Year Term Loan. Translation to U.S. dollars is based on exchange rates of $1.26 to £1.00 as of March 31, 2017 and $1.23 to £1.00 as of December 31, 2016. |
(5) | Represents the Canadian dollar tranche of the 5-Year Term Loan. Translation to U.S. dollars is based on exchange rates of $0.75 to 1.00 CAD as of March 31, 2017 and $0.74 to 1.00 CAD as of December 31, 2016. |
Assumed event | Change ($ millions) | |||
Increase in fair value of interest rate swaps following an assumed 10% increase in interest rates | $ | 4.4 | ||
Decrease in fair value of interest rate swaps following an assumed 10% decrease in interest rates | (4.5 | ) | ||
Increase in annual interest expense on our debt that is variable rate and not subject to swapped interest following a 10% increase in interest rates | 0.7 | |||
Decrease in annual interest expense on our debt that is variable rate and not subject to swapped interest following a 10% decrease in interest rates | (0.7 | ) | ||
Increase in fair value of fixed rate debt following a 10% decrease in interest rates | 31.1 | |||
Decrease in fair value of fixed rate debt following a 10% increase in interest rates | (29.1 | ) |
Exhibit Number | Description | |
2.1 | Agreement and Plan of Merger by and among Telx Holdings, Inc., Digital Realty Trust, Inc., Digital Delta, Inc. and BSR LLC, dated as of July 13, 2015 (incorporated by reference to Exhibit 2.1 to the Combined Quarterly Report on Form 10-Q of Digital Realty Trust, Inc. and Digital Realty Trust, L.P. (File Nos. 001-32336 and 000-54023) filed on August 6, 2015). | |
3.1 | Articles of Amendment and Restatement of Digital Realty Trust, Inc., as amended (incorporated by reference to Exhibit 3.1 to the Combined Quarterly Report on Form 10-Q of Digital Realty Trust, Inc. and Digital Realty Trust, L.P. (File Nos. 001-32336 and 000-54023) filed on August 9, 2016). | |
3.2 | Sixth Amended and Restated Bylaws of Digital Realty Trust, Inc. (incorporated by reference to Exhibit 3.1 to Digital Realty Trust, Inc.’s Current Report on Form 8-K (File No. 001-32336) filed on November 15, 2016). | |
3.3 | Certificate of Limited Partnership of Digital Realty Trust, L.P. (incorporated by reference to Exhibit 3.1 to Digital Realty Trust, L.P.’s General Form for Registration of Securities on Form 10 (File No. 000-54023) filed on June 25, 2010). | |
3.4 | Fourteenth Amended and Restated Agreement of Limited Partnership of Digital Realty Trust, L.P., as amended (incorporated by reference to Exhibit 3.1 to the Combined Current Report on Form 8-K/A of Digital Realty Trust, Inc. and Digital Realty Trust, L.P. (File Nos. 001-32336 and 000-54023) filed on October 19, 2015). | |
10.1† | Employment Agreement, dated as of November 10, 2015, by and among Digital Realty Trust, Inc., DLR, LLC and Joshua A. Mills. | |
12.1 | Statement of Computation of Ratios. | |
31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer for Digital Realty Trust, Inc. | |
31.2 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer for Digital Realty Trust, Inc. | |
31.3 | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer for Digital Realty Trust, L.P. | |
31.4 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer for Digital Realty Trust, L.P. | |
32.1 | 18 U.S.C. § 1350 Certification of Chief Executive Officer for Digital Realty Trust, Inc. | |
32.2 | 18 U.S.C. § 1350 Certification of Chief Financial Officer for Digital Realty Trust, Inc. | |
32.3 | 18 U.S.C. § 1350 Certification of Chief Executive Officer for Digital Realty Trust, L.P. | |
32.4 | 18 U.S.C. § 1350 Certification of Chief Financial Officer for Digital Realty Trust, L.P. | |
101 | The following financial statements from Digital Realty Trust, Inc.’s and Digital Realty Trust, L.P.’s Form 10-Q for the quarter ended March 31, 2017, formatted in XBRL interactive data files: (i) Condensed Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016; (ii) Condensed Consolidated Income Statements for the three months ended March 31, 2017 and 2016; (iii) Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2017 and 2016; (iv) Condensed Consolidated Statements of Equity/Capital for the three months ended March 31, 2017; (v) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016; and (vi) Notes to Condensed Consolidated Financial Statements. |
DIGITAL REALTY TRUST, INC. | |||
May 10, 2017 | /S/ A. WILLIAM STEIN | ||
A. William Stein Chief Executive Officer (principal executive officer) | |||
May 10, 2017 | /S/ ANDREW P. POWER | ||
Andrew P. Power Chief Financial Officer (principal financial officer) | |||
May 10, 2017 | /S/ EDWARD F. SHAM | ||
Edward F. Sham Chief Accounting Officer (principal accounting officer) |
DIGITAL REALTY TRUST, L.P. | |||
By: Digital Realty Trust, Inc. Its general partner | |||
By: | |||
May 10, 2017 | /S/ A. WILLIAM STEIN | ||
A. William Stein Chief Executive Officer (principal executive officer) | |||
May 10, 2017 | /S/ ANDREW P. POWER | ||
Andrew P. Power Chief Financial Officer (principal financial officer) | |||
May 10, 2017 | /s/ EDWARD F. SHAM | ||
Edward F. Sham Chief Accounting Officer (principal accounting officer) |
Exhibit Number | Description | |
2.1 | Agreement and Plan of Merger by and among Telx Holdings, Inc., Digital Realty Trust, Inc., Digital Delta, Inc. and BSR LLC, dated as of July 13, 2015 (incorporated by reference to Exhibit 2.1 to the Combined Quarterly Report on Form 10-Q of Digital Realty Trust, Inc. and Digital Realty Trust, L.P. (File Nos. 001-32336 and 000-54023) filed on August 6, 2015). | |
3.1 | Articles of Amendment and Restatement of Digital Realty Trust, Inc., as amended (incorporated by reference to Exhibit 3.1 to the Combined Quarterly Report on Form 10-Q of Digital Realty Trust, Inc. and Digital Realty Trust, L.P. (File Nos. 001-32336 and 000-54023) filed on August 9, 2016). | |
3.2 | Sixth Amended and Restated Bylaws of Digital Realty Trust, Inc. (incorporated by reference to Exhibit 3.1 to Digital Realty Trust, Inc.’s Current Report on Form 8-K (File No. 001-32336) filed on November 15, 2016). | |
3.3 | Certificate of Limited Partnership of Digital Realty Trust, L.P. (incorporated by reference to Exhibit 3.1 to Digital Realty Trust, L.P.’s General Form for Registration of Securities on Form 10 (File No. 000-54023) filed on June 25, 2010). | |
3.4 | Fourteenth Amended and Restated Agreement of Limited Partnership of Digital Realty Trust, L.P., as amended (incorporated by reference to Exhibit 3.1 to the Combined Current Report on Form 8-K/A of Digital Realty Trust, Inc. and Digital Realty Trust, L.P. (File Nos. 001-32336 and 000-54023) filed on October 19, 2015). | |
10.1† | Employment Agreement, dated as of November 10, 2015, by and among Digital Realty Trust, Inc., DLR, LLC and Joshua A. Mills. | |
12.1 | Statement of Computation of Ratios. | |
31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer for Digital Realty Trust, Inc. | |
31.2 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer for Digital Realty Trust, Inc. | |
31.3 | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer for Digital Realty Trust, L.P. | |
31.4 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer for Digital Realty Trust, L.P. | |
32.1 | 18 U.S.C. § 1350 Certification of Chief Executive Officer for Digital Realty Trust, Inc. | |
32.2 | 18 U.S.C. § 1350 Certification of Chief Financial Officer for Digital Realty Trust, Inc. | |
32.3 | 18 U.S.C. § 1350 Certification of Chief Executive Officer for Digital Realty Trust, L.P. | |
32.4 | 18 U.S.C. § 1350 Certification of Chief Financial Officer for Digital Realty Trust, L.P. | |
101 | The following financial statements from Digital Realty Trust, Inc.’s and Digital Realty Trust, L.P.’s Form 10-Q for the quarter ended March 31, 2017, formatted in XBRL interactive data files: (i) Condensed Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016; (ii) Condensed Consolidated Income Statements for the three months ended March 31, 2017 and 2016; (iii) Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2017 and 2016; (iv) Condensed Consolidated Statements of Equity/Capital for the three months ended March 31, 2017; (v) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016; and (vi) Notes to Condensed Consolidated Financial Statements. |
Digital Realty Trust, Inc., a Maryland corporation By: /s/ A. William Stein Name: A. William Stein Title: Chief Executive Officer | DLR LLC, a Maryland limited liability company By: Digital Realty Trust, L.P. Its: Managing Member By: Digital Realty Trust, Inc. Its: General Partner By: /s/ A. William Stein Name A. William Stein Title: Chief Executive Officer |
Accepted and Agreed, By: /s/ Joshua A. Mills Joshua A. Mills |
Three Months Ended March 31, | Year Ended December 31, | |||||||||||||||||||||||||||
2017 | 2016 | 2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Income from continuing operations before noncontrolling interests | $ | 84,563 | $ | 62,333 | $ | 431,852 | $ | 301,591 | $ | 203,415 | $ | 320,449 | $ | 216,047 | ||||||||||||||
Interest expense | 55,450 | 57,261 | 236,480 | 201,435 | 191,085 | 189,399 | 157,108 | |||||||||||||||||||||
Interest within rental expense (1) | 7,215 | 6,895 | 27,879 | 8,208 | 5,393 | 7,687 | 3,410 | |||||||||||||||||||||
Noncontrolling interests in consolidated joint ventures | (121 | ) | (121 | ) | (367 | ) | (460 | ) | (465 | ) | (595 | ) | 444 | |||||||||||||||
Earnings available to cover fixed charges | $ | 147,107 | $ | 126,368 | $ | 695,844 | $ | 510,774 | $ | 399,428 | $ | 516,940 | $ | 377,009 | ||||||||||||||
Fixed charges: | ||||||||||||||||||||||||||||
Interest expense | $ | 55,450 | $ | 57,261 | $ | 236,480 | $ | 201,435 | $ | 191,085 | $ | 189,399 | $ | 157,108 | ||||||||||||||
Interest within rental expense (1) | 7,215 | 6,895 | 27,879 | 8,208 | 5,393 | 7,687 | 3,410 | |||||||||||||||||||||
Capitalized interest | 4,614 | 3,814 | 16,324 | 12,851 | 20,373 | 26,277 | 21,456 | |||||||||||||||||||||
Total fixed charges | 67,279 | 67,970 | 280,683 | 222,494 | 216,851 | 223,363 | 181,974 | |||||||||||||||||||||
Preferred stock dividends | 17,393 | 22,424 | 83,771 | 79,423 | 67,465 | 42,905 | 38,672 | |||||||||||||||||||||
Fixed charges and preferred stock dividends | $ | 84,672 | $ | 90,394 | $ | 364,454 | $ | 301,917 | $ | 284,316 | $ | 266,268 | $ | 220,646 | ||||||||||||||
Ratio of earnings to fixed charges | 2.19 | 1.86 | 2.48 | 2.30 | 1.84 | 2.31 | 2.07 | |||||||||||||||||||||
Ratio of earnings to fixed charges and preferred stock dividends | 1.74 | 1.40 | 1.91 | 1.69 | 1.40 | 1.94 | 1.71 |
(1) | Interest within rental expense represents one-third of rental expense (the approximate portion of rental expense representing interest). |
Three Months Ended March 31, | Year Ended December 31, | |||||||||||||||||||||||||||
2017 | 2016 | 2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Income from continuing operations before noncontrolling interests | $ | 84,563 | $ | 62,333 | $ | 431,852 | $ | 300,226 | $ | 203,415 | $ | 320,449 | $ | 216,047 | ||||||||||||||
Interest expense | 55,450 | 57,261 | 236,480 | 202,800 | 191,085 | 189,399 | 157,108 | |||||||||||||||||||||
Interest within rental expense (1) | 7,215 | 6,895 | 27,879 | 8,208 | 5,393 | 7,687 | 3,410 | |||||||||||||||||||||
Noncontrolling interests in consolidated joint ventures | (121 | ) | (121 | ) | (367 | ) | (460 | ) | (465 | ) | (595 | ) | 444 | |||||||||||||||
Earnings available to cover fixed charges | $ | 147,107 | $ | 126,368 | $ | 695,844 | $ | 510,774 | $ | 399,428 | $ | 516,940 | $ | 377,009 | ||||||||||||||
Fixed charges: | ||||||||||||||||||||||||||||
Interest expense | $ | 55,450 | $ | 57,261 | $ | 236,480 | $ | 202,800 | $ | 191,085 | $ | 189,399 | $ | 157,108 | ||||||||||||||
Interest within rental expense (1) | 7,215 | 6,895 | 27,879 | 8,208 | 5,393 | 7,687 | 3,410 | |||||||||||||||||||||
Capitalized interest | 4,614 | 3,814 | 16,324 | 12,851 | 20,373 | 26,277 | 21,456 | |||||||||||||||||||||
Total fixed charges | 67,279 | 67,970 | 280,683 | 223,859 | 216,851 | 223,363 | 181,974 | |||||||||||||||||||||
Preferred unit distributions | 17,393 | 22,424 | 83,771 | 79,423 | 67,465 | 42,905 | 38,672 | |||||||||||||||||||||
Fixed charges and preferred unit distributions | $ | 84,672 | $ | 90,394 | $ | 364,454 | $ | 303,282 | $ | 284,316 | $ | 266,268 | $ | 220,646 | ||||||||||||||
Ratio of earnings to fixed charges | 2.19 | 1.86 | 2.48 | 2.28 | 1.84 | 2.31 | 2.07 | |||||||||||||||||||||
Ratio of earnings to fixed charges and preferred unit distributions | 1.74 | 1.40 | 1.91 | 1.68 | 1.40 | 1.94 | 1.71 |
(1) | Interest within rental expense represents one-third of rental expense (the approximate portion of rental expense representing interest). |
1. | I have reviewed this quarterly report on Form 10-Q of Digital Realty Trust, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: | May 10, 2017 |
By: | /s/ A. WILLIAM STEIN |
A. William Stein | |
Chief Executive Officer | |
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Digital Realty Trust, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: | May 10, 2017 |
By: | /s/ ANDREW P. POWER |
Andrew P. Power | |
Chief Financial Officer | |
(Principal Financial Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Digital Realty Trust, L.P.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: | May 10, 2017 |
By: | /s/ A. WILLIAM STEIN |
A. William Stein | |
Chief Executive Officer | |
(Principal Executive Officer) | |
Digital Realty Trust, Inc., sole general partner of | |
Digital Realty Trust, L.P. |
1. | I have reviewed this quarterly report on Form 10-Q of Digital Realty Trust, L.P.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: | May 10, 2017 |
By: | /s/ ANDREW P. POWER |
Andrew P. Power | |
Chief Financial Officer | |
(Principal Financial Officer) | |
Digital Realty Trust, Inc., sole general partner of | |
Digital Realty Trust, L.P. |
(i) | the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated. |
Dated: | May 10, 2017 |
/s/ A. WILLIAM STEIN | |
A. William Stein | |
Chief Executive Officer | |
(Principal Executive Officer) |
(i) | the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated. |
Dated: | May 10, 2017 |
/s/ ANDREW P. POWER | |
Andrew P. Power | |
Chief Financial Officer | |
(Principal Financial Officer) |
(i) | the accompanying Quarterly Report on Form 10-Q of the Operating Partnership for the quarterly period ended March 31, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership at the dates and for the periods indicated. |
Dated: | May 10, 2017 |
/s/ A. WILLIAM STEIN | |
A. William Stein | |
Chief Executive Officer | |
(Principal Executive Officer) | |
Digital Realty Trust, Inc., sole general partner of | |
Digital Realty Trust, L.P. |
(i) | the accompanying Quarterly Report on Form 10-Q of the Operating Partnership for the quarterly period ended March 31, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership at the dates and for the periods indicated. |
Dated: | May 10, 2017 |
/s/ ANDREW P. POWER | |
Andrew P. Power | |
Chief Financial Officer | |
(Principal Financial Officer) | |
Digital Realty Trust, Inc., sole general partner of | |
Digital Realty Trust, L.P. |
Document and Entity Information - shares |
3 Months Ended | |
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Mar. 31, 2017 |
May 05, 2017 |
|
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Registrant Name | Digital Realty Trust, Inc. | |
Entity Central Index Key | 0001297996 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 159,774,915 | |
Digital Realty Trust, L.P. | ||
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Registrant Name | Digital Realty Trust, L.P. | |
Entity Central Index Key | 0001494877 | |
Entity Filer Category | Non-accelerated Filer |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
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Accounts and other receivables, net of allowance for doubtful accounts | $ 6,147 | $ 7,446 |
Preferred Stock, par value (in dollars per share/unit) | $ 0.01 | $ 0.01 |
Preferred Stock, authorized (shares) | 110,000,000 | 110,000,000 |
Preferred stock, issued (shares) | 41,900,000 | 41,900,000 |
Preferred Stock, outstanding (shares) | 41,900,000 | 41,900,000 |
Common Stock, par value (in dollars per share/unit) | $ 0.01 | $ 0.01 |
Common Stock, authorized (shares) | 265,000,000 | 265,000,000 |
Common Stock, shares, issued (shares) | 159,539,892 | 159,019,118 |
Common Stock, shares, outstanding (shares) | 159,539,892 | 159,019,118 |
Digital Realty Trust, L.P. | ||
Accounts and other receivables, net of allowance for doubtful accounts | $ 6,147 | $ 7,446 |
Organization and Description of Business |
3 Months Ended |
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Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description Of Business | Organization and Description of Business Digital Realty Trust, Inc. through its controlling interest in Digital Realty Trust, L.P. (the Operating Partnership) and their subsidiaries (collectively, we, our, us or the Company) is engaged in the business of owning, acquiring, developing and managing data centers. The Company is focused on providing data center, colocation and interconnection solutions for domestic and international customers across a variety of industry verticals ranging from financial services, cloud and information technology services, to manufacturing, energy, healthcare, and consumer products. As of March 31, 2017, our portfolio consisted of 145 operating properties, including three held-for-sale properties and 14 properties held as investments in unconsolidated joint ventures, of which 104 are located throughout the United States, 32 are located in Europe, four are located in Asia, three are located in Australia and two are located in Canada. We are diversified in major metropolitan areas where data center and technology customers are concentrated, including the Atlanta, Boston, Chicago, Dallas, Los Angeles, New York, Northern Virginia, Phoenix, San Francisco, Seattle and Silicon Valley metropolitan areas in the United States, the Amsterdam, Dublin, Frankfurt, London and Paris metropolitan areas in Europe and the Singapore, Sydney, Melbourne, Hong Kong and Osaka metropolitan areas in the Asia Pacific region. The portfolio consists of data centers, Internet gateway data centers and office and other non-data center space. The Operating Partnership was formed on July 21, 2004 in anticipation of Digital Realty Trust, Inc.’s initial public offering (IPO) on November 3, 2004 and commenced operations on that date. As of March 31, 2017, Digital Realty Trust, Inc. owns a 98.4% common interest and a 100.0% preferred interest in the Operating Partnership. As sole general partner of the Operating Partnership, Digital Realty Trust, Inc. has the full, exclusive and complete responsibility for the Operating Partnership’s day-to-day management and control. The limited partners of the Operating Partnership do not have rights to replace Digital Realty Trust, Inc. as the general partner nor do they have participating rights, although they do have certain protective rights. |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies (a) Principles of Consolidation and Basis of Presentation The accompanying interim condensed consolidated financial statements include all of the accounts of Digital Realty Trust, Inc., the Operating Partnership and their subsidiaries. Intercompany balances and transactions have been eliminated. The accompanying interim condensed consolidated financial statements are unaudited, but have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and in compliance with the rules and regulations of the United States Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments necessary for a fair presentation have been included. All such adjustments are considered to be of a normal recurring nature, except as otherwise indicated. The results of operations for the interim periods are not necessarily indicative of the results to be obtained for the full fiscal year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our annual report on Form 10-K for the year ended December 31, 2016. The notes to the condensed consolidated financial statements of Digital Realty Trust, Inc. and the Operating Partnership have been combined to provide the following benefits:
There are a few differences between the Company and the Operating Partnership, which are reflected in these condensed consolidated financial statements. We believe it is important to understand the differences between the Company and the Operating Partnership in the context of how we operate as an interrelated consolidated company. As a result, Digital Realty Trust, Inc. generally does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public securities from time to time and guaranteeing certain unsecured debt of the Operating Partnership and certain of its subsidiaries and affiliates. Digital Realty Trust, Inc. itself has not issued any indebtedness but guarantees the unsecured debt of the Operating Partnership and certain of its subsidiaries and affiliates, as disclosed in these notes. The Operating Partnership holds substantially all the assets of the Company and holds the ownership interests in the Company’s joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from public equity issuances by Digital Realty Trust, Inc., which are generally contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generally generates the capital required by the Company’s business through the Operating Partnership’s operations, by the Operating Partnership’s or its affiliates direct or indirect incurrence of indebtedness or through the issuance of partnership units. The presentation of noncontrolling interests in operating partnership, stockholders’ equity and partners’ capital are the main areas of difference between the condensed consolidated financial statements of Digital Realty Trust, Inc. and those of the Operating Partnership. The common limited partnership interests held by the limited partners in the Operating Partnership are presented as limited partners’ capital within partners’ capital in the Operating Partnership’s condensed consolidated financial statements and as noncontrolling interests in operating partnership within equity in Digital Realty Trust, Inc.’s condensed consolidated financial statements. The common and preferred partnership interests held by Digital Realty Trust, Inc. in the Operating Partnership are presented as general partner’s capital within partners’ capital in the Operating Partnership’s condensed consolidated financial statements and as preferred stock, common stock, additional paid-in capital and accumulated dividends in excess of earnings within stockholders’ equity in Digital Realty Trust, Inc.’s condensed consolidated financial statements. The differences in the presentations between stockholders’ equity and partners’ capital result from the differences in the equity issued at the Digital Realty Trust, Inc. and the Operating Partnership levels. To help investors understand the significant differences between the Company and the Operating Partnership, these consolidated financial statements present the following separate sections for each of the Company and the Operating Partnership:
In the sections that combine disclosure of Digital Realty Trust, Inc. and the Operating Partnership, these notes refer to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that enters into contracts and joint ventures and holds assets and debt, reference to the Company is appropriate because the business is one enterprise and the Company generally operates the business through the Operating Partnership. (b) Cash Equivalents For the purpose of the condensed consolidated statements of cash flows, we consider short-term investments with original maturities of 90 days or less to be cash equivalents. As of March 31, 2017, cash equivalents consist of investments in money market instruments. (c) Investment in Unconsolidated Joint Ventures The Company’s investment in unconsolidated joint ventures is accounted for using the equity method, whereby the investment is increased for capital contributed and our share of the joint ventures’ net income and decreased by distributions we receive and our share of any losses of the joint ventures. We amortize the difference between the cost of our investments in unconsolidated joint ventures and the book value of the underlying equity into equity in earnings from unconsolidated affiliates on a straight-line basis consistent with the lives of the underlying assets. (d) Capitalization of Costs Direct and indirect project costs that are clearly associated with the development of properties are capitalized as incurred. Project costs include all costs directly associated with the development of a property, including construction costs, interest, property taxes, insurance, legal fees and costs of personnel working on the project. Indirect costs that do not clearly relate to the projects under development are not capitalized and are charged to expense as incurred. Capitalization of costs begins when the activities necessary to get the development project ready for its intended use begins, which include costs incurred before the beginning of construction. Capitalization of costs ceases when the development project is substantially complete and ready for its intended use. Determining when a development project commences, and when it is substantially complete and ready for its intended use involves a degree of judgment. We generally consider a development project to be substantially complete and ready for its intended use upon receipt of a certificate of occupancy. If and when development of a property is suspended pursuant to a formal change in the planned use of the property, we will evaluate whether the accumulated costs exceed the estimated value of the project and write-off the amount of any such excess accumulated costs. For a development project that is suspended for reasons other than a formal change in the planned use of such property, the accumulated project costs are evaluated for impairment consistent with our impairment policies for long-lived assets. Capitalized costs are allocated to the specific components of a project that are benefited. We capitalized interest of approximately $4.6 million and $3.8 million during the three months ended March 31, 2017 and 2016, respectively. We capitalized amounts relating to compensation and other overhead expense of employees direct and incremental to construction and successful leasing activities of approximately $18.7 million and $17.7 million during the three months ended March 31, 2017 and 2016, respectively. Capitalized leasing costs of approximately $12.3 million and $10.4 million are included in improvements to investments in real estate in cash flows from investing activities in the condensed consolidated statements of cash flows for the three months ended March 31, 2017 and 2016, respectively. (e) Goodwill Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination. Goodwill is not amortized. Management performs an annual impairment test for goodwill and between annual tests, management will evaluate the recoverability of goodwill whenever events or changes in circumstances indicate that the carrying value of goodwill may not be fully recoverable. In its impairment tests of goodwill, management will first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If based on this assessment, management determines that the fair value of the reporting unit is not less than its carrying value, then performing the additional two-step impairment test is unnecessary. If our qualitative assessment indicates that goodwill impairment is more likely than not, we perform a two-step impairment test. We test goodwill for impairment under the two-step impairment test by first comparing the book value of net assets to the fair value of the reporting units. If the fair value is determined to be less than the book value or qualitative factors indicate that it is more likely than not that goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. We estimate the fair value of the reporting units using discounted cash flows. If the carrying value of goodwill exceeds its fair value, an impairment charge is recognized. We have not recognized any goodwill impairments since our inception. Goodwill amounted to approximately $757.4 million and $753.0 million as of March 31, 2017 and December 31, 2016, respectively. (f) Share-Based Compensation The Company measures all share-based compensation awards at fair value on the date they are granted to employees, consultants and directors. The fair value of share-based compensation awards that contain a market condition, including market performance-based Class D units of the Operating Partnership and market performance-based restricted stock units (discussed in Note 13 "Incentive Plan"), is measured using a Monte Carlo simulation method and not adjusted based on actual achievement of the performance goals. We recognize compensation cost, net of forfeitures, for all of our existing awards, including long-term incentive units, market performance-based awards and restricted stock, over a four-year period. (g) Income Taxes Digital Realty Trust, Inc. has elected to be treated as a real estate investment trust (a “REIT”) for federal income tax purposes. As a REIT, Digital Realty Trust, Inc. generally is not required to pay federal corporate income tax to the extent taxable income is currently distributed to its stockholders. If Digital Realty Trust, Inc. fails to qualify as a REIT in any taxable year, it will be subject to federal income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate tax rates. The Company is subject to foreign, state and local income taxes in the jurisdictions in which it conducts business. The Company’s U.S. consolidated taxable REIT subsidiaries are subject to both federal and state income taxes to the extent there is taxable income. Accordingly, the Company recognizes current and deferred income taxes for its taxable REIT subsidiaries, certain states and non-U.S. jurisdictions, as appropriate. We assess our significant tax positions in accordance with U.S. GAAP for all open tax years and determine whether we have any material unrecognized liabilities from uncertain tax benefits. If a tax position is not considered “more-likely-than-not” to be sustained solely on its technical merits, no benefits of the tax position are to be recognized (for financial statement purposes). As of March 31, 2017 and December 31, 2016, we have no assets or liabilities for uncertain tax positions. We classify interest and penalties from significant uncertain tax positions as interest expense and operating expense, respectively, in our condensed consolidated income statements. For the three months ended March 31, 2017 and 2016, we had no such interest or penalties. The tax year 2013 and thereafter remain open to examination by the major taxing jurisdictions with which the Company files tax returns. See Note 10 "Income Taxes" for further discussion on income taxes. (h) Presentation of Transactional-based Taxes We account for transactional-based taxes, such as value added tax, or VAT, for our international properties on a net basis. (i) Fee Income Occasionally, customers engage the company for certain services. The nature of these services historically involves property management, construction management, and assistance with financing. The proper revenue recognition of these services can be different, depending on whether the arrangements are service revenue or contractor type revenue. Service revenues are typically recognized on an equal monthly basis based on the minimum fee to be earned. The monthly amounts could be adjusted depending on if certain performance milestones are met. Fee income also includes management fees. These fees arise from contractual agreements with entities in which we have a noncontrolling interest. The management fees are recognized as earned under the respective agreements. Management and other fee income related to partially owned entities are recognized to the extent attributable to the unaffiliated interest. (j) Assets and Liabilities Measured at Fair Value Fair value under U.S. GAAP is a market-based measurement, not an entity-specific measurement. Therefore, our fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair-value measurements, we use a fair-value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair-value measurement is based on inputs from different levels of the fair-value hierarchy, the lowest level input that is significant would be used to determine the fair-value measurement in its entirety. Our assessment of the significance of a particular input to the fair-value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. (k) Transactions Expense Transactions expense includes acquisition-related expenses, other business development expenses and other expenses to integrate newly acquired investments, which are expensed as incurred. Acquisition-related expenses include closing costs, broker commissions and other professional fees, including legal and accounting fees related to acquisitions and significant transactions. (l) Gains on Sale of Properties Gains on sale of properties are recognized using the full accrual or partial sale methods, as applicable, in accordance with U.S. GAAP, provided various criteria relating to the terms of sale and any subsequent involvement with the real estate sold are satisfied. (m) Management’s Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates made. On an on-going basis, we evaluate our estimates, including those related to the valuation of our real estate properties, contingent consideration, accounts receivable and deferred rent receivable, performance-based equity compensation plans, the completeness of accrued liabilities and Digital Realty Trust, Inc.’s qualification as a REIT. We base our estimates on historical experience, current market conditions, and various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could vary under different assumptions or conditions. (n) Segment and Geographic Information All of our properties generate similar revenues and expenses related to tenant rent and reimbursements and operating expenses. The delivery of our products and services are consistent across all properties and although services are provided to a wide range of customers, the types of real estate services provided to them are standardized throughout the portfolio. As such, the properties in our portfolio have similar economic characteristics and the nature of the products and services provided to our customers and the method to distribute such services are consistent throughout the portfolio. In addition, the chief operating decision makers evaluate operating performance and make resource allocation decisions for the portfolio as a whole, rather than by property type or revenue stream. Consequently, our properties qualify for aggregation into one reporting segment. Operating revenues from properties in the United States were $429.1 million and $406.3 million and outside the United States were $121.4 million and $97.9 million for the three months ended March 31, 2017 and 2016, respectively. We had investments in real estate located in the United States of $6.3 billion and $6.3 billion, and outside the United States of $2.7 billion and $2.6 billion, as of March 31, 2017 and December 31, 2016, respectively. Operating revenues from properties located in the United Kingdom were $65.2 million and $51.6 million, or 11.8% and 10.2% of total operating revenues, for the three months ended March 31, 2017 and 2016, respectively. No other foreign country comprised more than 10% of total operating revenues for each of these periods. We had investments in real estate located in the United Kingdom of $1.5 billion and $1.5 billion, or 16.5% and 16.6% of total long-lived assets, as of March 31, 2017 and December 31, 2016, respectively. No other foreign country comprised more than 10% of total long-lived assets as of March 31, 2017 and December 31, 2016. (o) New Accounting Pronouncements New Accounting Standards Adopted In January 2017, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2017-01, "Clarifying the Definition of a Business (Topic 805)." ASU 2017-01 clarifies the definition of a business and provides further guidance for evaluating whether a transaction will be accounted for as an acquisition of an asset or a business. ASU 2017-01 is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The update should be applied prospectively. We adopted ASU 2017-01 as of January 1, 2017 and the adoption did not require any additional disclosures. We believe most of our future acquisitions of operating properties will qualify as asset acquisitions and most future transaction costs associated with these acquisitions will be capitalized. In November 2016, the FASB issued an ASU that will require companies to include restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The ASU will require a disclosure of a reconciliation between the statement of financial position and the statement of cash flows when the statement of financial position includes more than one line item for cash, cash equivalents, restricted cash, and restricted cash equivalents. Entities with material restricted cash and restricted cash equivalents balances will be required to disclose the nature of the restrictions. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted, and will be applied retrospectively to all periods presented. We adopted this ASU as of January 1, 2017, and restricted cash balances are included along with cash and cash equivalents as of the end of period and beginning of period in our condensed consolidated statement of cash flows for all periods presented; separate line items showing changes in restricted cash balances have been eliminated from our condensed consolidated statement of cash flows. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which provides for simplification of certain aspects of employee share-based payment accounting, including income taxes, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this standard must be applied prospectively, retrospectively, or as of the beginning of the earliest comparative period presented in the year of adoption, depending on the type of amendment. We adopted ASU 2016-09 as of January 1, 2017, and did not have a material impact on our consolidated financial statements. New Accounting Standards Issued but not yet Adopted In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers", and since that date has issued several additional ASUs intended to clarify certain aspects of ASU 2014-09 and to provide for certain practical expedients entities may elect upon adoption. Collectively, these ASUs outline a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers. While lease contracts with customers, which constitute the vast majority of our revenues, are a specific scope exception, this update may have implications in certain variable payment terms included in lease agreements. The standard is effective for the Company on January 1, 2018, with early adoption permitted. The standard permits the use of either a retrospective or cumulative effect transition method and permits the use of certain practical expedients. We currently anticipate using the cumulative effect transition method, however, this determination is subject to change. As the standard does not significantly impact lessor accounting, we do not believe adoption will have a material impact on our accounting for rental revenue. In addition, we do not anticipate a significant impact to our accounting for certain of our revenue streams which are not based on contractually specified lease amounts, including interconnection, tenant reimbursement and other revenue. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)", which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Accounting for leases with a term of 12 months or less will be similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 is expected to impact the Company’s consolidated financial statements as the Company has certain operating and land lease arrangements for which it is the lessee. ASU 2016-02 supersedes the previous leases standard, Leases (Topic 840). The standard is effective on January 1, 2019, with early adoption permitted. A set of practical expedients for implementation, which must be elected as a package and for all leases, may also be elected. These practical expedients include relief from re-assessing lease classification at the adoption date for expired or existing leases, although a right-of-use asset and lease liability would still be recorded for such leases. We are currently assessing the method of adoption and the impact that ASU 2016-02 will have on our consolidated financial statements. In January 2017, the FASB issued guidance codified in ASU Topic 2017-04, "Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". ASU 2017-04 simplifies the accounting for goodwill impairment by eliminating the process of measuring the implied value of goodwill, known as step two, from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The standard will be effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. We do not expect the provisions of ASC 2017-04 to have a material impact on our consolidated financial statements. |
Investments in Real Estate |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments In Real Estate | Investments in Real Estate We acquired the following real estate during the three months ended March 31, 2017:
As of March 31, 2017, three properties had an aggregate carrying value of $56.2 million within total assets and $3.1 million within total liabilities and are shown as assets held for sale and obligations associated with assets held for sale on the condensed consolidated balance sheet. The three properties are not representative of a significant component of our portfolio, nor do the potential sales represent a significant shift in our strategy. European Portfolio Acquisition On July 5, 2016, the Company completed the acquisition of a portfolio of eight high-quality, carrier-neutral data centers in Europe from Equinix, which we refer to as the European Portfolio Acquisition. The purchase price was $818.9 million in the aggregate (based on the exchange rate at the date of acquisition). The final purchase price allocation was completed in early 2017. The final adjustments to the preliminary purchase price allocation were not material. The following table summarizes the amounts for acquired assets and liabilities recorded at their fair values as of the acquisition date (in thousands):
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Investment in Unconsolidated Joint Ventures |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Unconsolidated Joint Ventures | Investment in Unconsolidated Joint Ventures As of March 31, 2017, our investment in unconsolidated joint ventures consists of effective 50% interests in three joint ventures that own data center properties at 2001 Sixth Avenue in Seattle, Washington, 2020 Fifth Avenue in Seattle, Washington and 33 Chun Choi Street in Hong Kong, effective 20% interests in two joint ventures, one of which owns 10 data center properties with an investment fund managed by Prudential Real Estate Investors (PREI®) and the other which owns one data center property with an affiliate of Griffin Capital Essential Asset REIT, Inc. (GCEAR) and a 17% interest in a joint venture that operates a high density colocation facility at 1101 Space Park Drive in Santa Clara, California. The following tables present summarized financial information for our joint ventures as of March 31, 2017 and December 31, 2016 and for the three months ended March 31, 2017 and 2016 (unaudited, in thousands):
We amortize the difference between the cost of our investment in the joint ventures and the book value of the underlying equity into income on a straight-line basis consistent with the lives of the underlying assets. The amortization of this difference was immaterial for the three months ended March 31, 2017 and 2016, respectively. Differences between the Company’s investment in the joint ventures and the amount of the underlying equity in net assets of the joint ventures are due to basis differences resulting from the Company’s equity investment recorded at its historical basis versus the fair value of the Company’s contributed interest in the joint ventures. Our proportionate share of the earnings or losses related to these unconsolidated joint ventures is reflected as equity in earnings of unconsolidated joint ventures on the accompanying condensed consolidated income statements. |
Acquired Intangible Assets and Liabilities |
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Acquired Intangible Assets and Liabilities | Acquired Intangible Assets and Liabilities The following summarizes our acquired intangible assets (real estate intangibles, comprised of acquired in-place lease value and tenant relationship value along with acquired above-market lease value) and intangible liabilities (acquired below-market lease value) as of March 31, 2017 and December 31, 2016.
Amortization of acquired below-market leases, net of acquired above-market leases, resulted in an increase to rental revenues of $1.8 million and $2.3 million for the three months ended March 31, 2017 and 2016, respectively. The expected average remaining lives for acquired below-market leases and acquired above-market leases is 6.3 years and 4.0 years, respectively, as of March 31, 2017. Estimated annual amortization of acquired below-market leases, net of acquired above-market leases, for each of the five succeeding years and thereafter, commencing April 1, 2017 is as follows:
Amortization of acquired in-place lease value (a component of depreciation and amortization expense) was $14.2 million and $13.7 million for the three months ended March 31, 2017 and 2016, respectively. The expected average amortization period for acquired in-place lease value is 8.0 years as of March 31, 2017. The weighted average remaining contractual life for acquired leases excluding renewals or extensions is 6.9 years as of March 31, 2017. Estimated annual amortization of acquired in-place lease value for each of the five succeeding years and thereafter, commencing April 1, 2017 is as follows:
Amortization of tenant relationship value and trade names (a component of depreciation and amortization expense) was approximately $17.6 million and $0.0 million, respectively, for the three months ended March 31, 2017 and approximately $15.9 million and $0.5 million, respectively, for the three months ended March 31, 2016. During the quarter ended June 30, 2016, management of the Company decided to retire the Telx trade name. Accordingly, the Company wrote off the net remaining balance of approximately $6.1 million. As of March 31, 2017, the weighted average remaining contractual life for customer contracts was 12.7 years. Estimated annual amortization of customer contracts for each of the five succeeding years and thereafter, commencing April 1, 2017 is as follows:
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Debt of the Company |
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Debt Disclosure [Abstract] | |
Debt of the Company | Debt of the Company In this Note 6, the “Company” refers only to Digital Realty Trust, Inc. and not to any of its subsidiaries. The Company itself does not currently have any indebtedness. All debt is currently held directly or indirectly by the Operating Partnership. Guarantee of Debt The Company guarantees the Operating Partnership’s obligations with respect to its 5.875% notes due 2020 (5.875% 2020 Notes), 3.400% Notes due 2020 (3.400% 2020 Notes), 5.250% notes due 2021 (2021 Notes), 3.950% notes due 2022 (3.950% 2022 Notes), 3.625% notes due 2022 (3.625% 2022 Notes), and 4.750% notes due 2025 (4.750% 2025 Notes). The Company and the Operating Partnership guarantee the obligations of Digital Stout Holding, LLC, a wholly owned subsidiary of the Operating Partnership, with respect to its 4.750% notes due 2023 (2023 Notes) and 4.250% notes due 2025 (4.250% 2025 Notes) and the obligations of Digital Euro Finco, LLC, a wholly owned subsidiary of the Operating Partnership, with respect to its 2.625% notes due 2024 (2024 Notes). The Company is also the guarantor of the Operating Partnership’s and its subsidiary borrowers’ obligations under the global revolving credit facility and unsecured term loan. |
Debt of the Operating Partnership |
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Debt of The Operating Partnership | Debt of the Operating Partnership A summary of outstanding indebtedness of the Operating Partnership as of March 31, 2017 and December 31, 2016 is as follows (in thousands):
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Global Revolving Credit Facility On January 15, 2016, we refinanced our global revolving credit facility and entered into a global senior credit agreement for a $2.0 billion senior unsecured revolving credit facility, which we refer to as the global revolving credit facility, that replaced the $2.0 billion revolving credit facility executed on August 15, 2013, as amended. The global revolving credit facility has an accordion feature that would enable us to increase the borrowing capacity of the credit facility to up to $2.5 billion, subject to the receipt of lender commitments and other conditions precedent. The refinanced facility matures on January 15, 2020, with two six-month extension options available. The interest rate for borrowings under the global revolving credit facility equals the applicable index plus a margin which is based on the credit ratings of our long-term debt and is currently 100 basis points. An annual facility fee on the total commitment amount of the facility, based on the credit ratings of our long-term debt, currently 20 basis points, is payable quarterly. Funds may be drawn in U.S., Canadian, Singapore, Australian and Hong Kong dollars, as well as Euro, British pound sterling and Japanese yen. As of March 31, 2017, interest rates are based on 1-month LIBOR, 1-month EURIBOR, 1-month GBP LIBOR, 1-month HIBOR, 1-month JPY LIBOR, 1-month SOR and 1-month CDOR, plus a margin of 1.00%. The facility also bore a base borrowing rate of 4.00% (USD) which is based on the U.S. Prime Rate. We have used and intend to use available borrowings under the global revolving credit facility to acquire additional properties, fund development opportunities and for general working capital and other corporate purposes, including potentially for the repurchase, redemption or retirement of outstanding debt or equity securities. As of March 31, 2017, we have capitalized approximately $9.9 million of financing costs, net of accumulated amortization, related to the global revolving credit facility. As of March 31, 2017, approximately $574.4 million was drawn under the global revolving credit facility and $19.1 million of letters of credit were issued. The global revolving credit facility contains various restrictive covenants, including limitations on our ability to incur additional indebtedness, make certain investments or merge with another company, and requirements to maintain financial coverage ratios, including with respect to unencumbered assets. In addition, the global revolving credit facility restricts Digital Realty Trust, Inc. from making distributions to its stockholders, or redeeming or otherwise repurchasing shares of its capital stock, after the occurrence and during the continuance of an event of default, except in limited circumstances including as necessary to enable Digital Realty Trust, Inc. to maintain its qualification as a REIT and to minimize the payment of income or excise tax. As of March 31, 2017, we were in compliance with all of such covenants. Unsecured Term Loans On January 15, 2016, we refinanced our senior unsecured multi-currency term loan facility and entered into a term loan agreement, which governs (i) a $1.25 billion 5-year senior unsecured term loan, which we refer to as the 5-Year Term Loan, and (ii) a $300 million 7-year senior unsecured term loan, which we refer to as the 7-Year Term Loan. The 2016 term loan agreement replaced the $1.0 billion term loan agreement executed on April 16, 2012, as amended. The 5-Year Term Loan matures on January 15, 2021 and the 7-Year Term Loan matures on January 15, 2023. In addition, we have the ability from time to time to increase the aggregate size of lending under the 2016 term loan agreement from $1.55 billion to up to $1.8 billion, subject to receipt of lender commitments and other conditions precedent. Interest rates are based on our senior unsecured debt ratings and are currently 110 basis points and 155 basis points over the applicable index for floating rate advances for the 5-Year Term Loan and the 7-Year Term Loan, respectively. Funds may be drawn in U.S., Canadian, Singapore, Australian and Hong Kong dollars, as well as Euro, British pound sterling and Japanese yen. Based on exchange rates in effect at March 31, 2017, the balance outstanding is approximately $1.5 billion, excluding deferred financing costs. We have used borrowings under the term loan for acquisitions, repayment of indebtedness, development, working capital and general corporate purposes. The covenants under the term loans are consistent with our global revolving credit facility and, as of March 31, 2017, we were in compliance with all of such covenants. As of March 31, 2017, we have capitalized approximately $5.8 million of financing costs, net of accumulated amortization, related to the 2016 unsecured term loans. The table below summarizes our debt maturities and principal payments as of March 31, 2017 (in thousands):
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Income per Share |
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Income per Share | Income per Share The following is a summary of basic and diluted income per share (in thousands, except share and per share amounts):
We have excluded the following potentially dilutive securities in the calculations above as they would be antidilutive or not dilutive:
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Income per Unit | Income per Unit The following is a summary of basic and diluted income per unit (in thousands, except unit and per unit amounts):
We have excluded the following potentially dilutive securities in the calculations above as they would be antidilutive or not dilutive:
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Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Digital Realty Trust, Inc. has elected to be treated and believes that it has been organized and has operated in a manner that has enabled it to qualify as a REIT for federal income tax purposes. As a REIT, Digital Realty Trust, Inc. is generally not subject to corporate level federal income taxes on earnings distributed currently to its stockholders. Since inception, Digital Realty Trust, Inc. has distributed at least 100% of its taxable income annually and intends to do so for the tax year ending December 31, 2017. As such, no provision for federal income taxes has been included in the Company's accompanying condensed consolidated financial statements for the three months ended March 31, 2017 and 2016. The Operating Partnership is a partnership and is not required to pay federal income tax. Instead, taxable income is allocated to its partners, who include such amounts on their federal income tax returns. As such, no provision for federal income taxes has been included in the Operating Partnership’s accompanying condensed consolidated financial statements. We have elected taxable REIT subsidiary (“TRS”) status for some of our consolidated subsidiaries. In general, a TRS may provide services that would otherwise be considered impermissible for REITs to provide and may hold assets that REITs cannot hold directly. Income taxes for TRS entities were accrued, as necessary, for the three months ended March 31, 2017 and 2016. For our TRS entities and foreign subsidiaries that are subject to U.S. federal, state and foreign income taxes, deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance for deferred tax assets is provided if we believe it is more likely than not that the deferred tax asset may not be realized, based on available evidence at the time the determination is made. An increase or decrease in the valuation allowance that results from the change in circumstances that causes a change in our judgment about the realizability of the related deferred tax asset is included in the income statement. Deferred tax assets (net of valuation allowance) and liabilities for our TRS entities and foreign subsidiaries were accrued, as necessary, for the three months ended March 31, 2017 and 2016. As of March 31, 2017 and December 31, 2016, we had deferred tax liabilities net of deferred tax assets of approximately $155.4 million and $153.8 million, respectively, primarily related to our foreign properties, classified in accounts payable and other accrued expenses in the condensed consolidated balance sheet. The majority of our net deferred tax liability relates to differences between tax basis and book basis of the assets acquired in the Sentrum Portfolio acquisition during 2012 and the European Portfolio Acquisition in July 2016. The valuation allowances at March 31, 2017 and December 31, 2016 relate primarily to certain foreign jurisdictions and net operating loss carryforwards from the acquisition of Telx, or the Telx Acquisition, that we do not expect to utilize, and deferred tax assets resulting from certain foreign real estate acquisition costs, which are not depreciated for tax purposes, but are deductible upon ultimate sale of the property. Given the indefinite holding period associated with these assets, realization of these deferred tax assets is not more-likely-than-not as of March 31, 2017 and December 31, 2016. |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity and Accumulated Other Comprehensive Loss, Net | Equity and Accumulated Other Comprehensive Loss, 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, 2017, 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, 2017 and 2016. As of March 31, 2017, shares of common stock having an aggregate offering price of $53.8 million remained available for offer and sale under the program. (b) Forward Equity Sale On May 20, 2016, Digital Realty Trust, Inc. completed an underwritten public offering of 12,500,000 shares of its common stock, all of which were offered in connection with forward sale agreements it entered into with certain financial institutions acting as forward purchasers. On June 2, 2016, the underwriters exercised their option in full to purchase an additional 1,875,000 shares of Digital Realty Trust, Inc.’s common stock from the forward purchasers. The forward purchasers borrowed and sold an aggregate of 14,375,000 shares of Digital Realty Trust, Inc.’s common stock in the public offering. Digital Realty Trust, Inc. did not receive any proceeds from the sale of our common stock by the forward purchasers in the public offering. On September 27, 2016, we physically settled a portion of the forward sale agreements by issuing an aggregate of 12,000,000 shares of our common stock to the forward purchasers in exchange for net proceeds of approximately $1.1 billion. Following such settlement, 2,375,000 shares of our common stock remain subject to the forward sale agreements, which are anticipated to be settled no later than May 19, 2017. (c) Redemption of Series F Preferred Stock On April 5, 2017, Digital Realty Trust, Inc. redeemed all 7,300,000 outstanding shares of its 6.625% series F cumulative redeemable preferred stock, or the series F preferred stock, for $25.01840 per share. The redemption price was equal to the original issuance price of $25.00 per share, plus accrued and unpaid dividends up to but not including the redemption date. Digital Realty Trust, Inc. funded the redemption with borrowings under the global revolving credit facility, which the Operating Partnership distributed to Digital Realty Trust, Inc. in connection with the Operating Partnership’s redemption of all 7,300,000 of its outstanding series F preferred units held by Digital Realty Trust, Inc. The excess of the redemption price over the carrying value of the series F preferred stock of approximately $6.3 million relates to the original issuance costs and will be reflected as a reduction to net income available to common stockholders. (d) 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, 2017 and December 31, 2016:
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 $255.9 million and $226.3 million based on the closing market price of Digital Realty Trust, Inc. common stock on March 31, 2017 and December 31, 2016, respectively. The following table shows activity for the noncontrolling interests in the Operating Partnership for the three months ended March 31, 2017:
(e) Dividends We have declared and paid the following dividends on our common and preferred stock for the three months ended March 31, 2017 (in thousands, except per share data):
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. (f) Accumulated Other Comprehensive Loss, Net The accumulated balances for each item within other comprehensive income, net are as follows (in thousands):
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Capital and Accumulated Other Comprehensive Loss |
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Capital and Accumulated Other Comprehensive Loss | Capital and Accumulated Other Comprehensive Loss (a) Allocations of Net Income and Net Losses to Partners Except for special allocations to holders of profits interest units described below in Note 13 “Incentive Plan—Long-Term Incentive Units,” the Operating Partnership’s net income will generally be allocated to the General Partner (Digital Realty Trust, Inc.) to the extent of the accrued preferred return on its preferred units, and then to the General Partner and the Operating Partnership’s limited partners in accordance with the respective percentage interests in the common units issued by the Operating Partnership. Net loss will generally be allocated to the General Partner and the Operating Partnership’s limited partners in accordance with the respective common percentage interests in the Operating Partnership until the limited partner’s capital is reduced to zero and any remaining net loss would be allocated to the General Partner. However, in some cases, losses may be disproportionately allocated to partners who have guaranteed our debt. The allocations described above are subject to special allocations relating to depreciation deductions and to compliance with the provisions of Sections 704(b) and 704(c) of the Code, and the associated Treasury Regulations. (b) Partnership Units 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 the General Partner’s common stock at the time of redemption. Alternatively, the General Partner may elect to acquire those common units in exchange for shares of the General Partner’s 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, the Operating Partnership 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 limited partners’ common units and the vested incentive units. Based on the results of this analysis, the Operating Partnership concluded that the common and vested incentive Operating Partnership units met the criteria to be classified within capital. The redemption value of the limited partners’ common units and the vested incentive units was approximately $255.9 million and $226.3 million based on the closing market price of Digital Realty Trust, Inc.’s common stock on March 31, 2017 and December 31, 2016, respectively. (c) Distributions All distributions on the Operating Partnership’s units are at the discretion of Digital Realty Trust, Inc.’s board of directors. The Operating Partnership has declared and paid the following distributions on its common and preferred units for the three months ended March 31, 2017 (in thousands, except for per unit data):
(d) Accumulated Other Comprehensive Loss The accumulated balances for each item within other comprehensive income are as follows (in thousands):
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Incentive Plan |
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Incentive Plan | Incentive Plan Our Amended and Restated 2004 Incentive Award Plan (as defined below) previously provided for grants of incentive awards to employees, directors and consultants. Awards issuable under the Amended and Restated 2004 Incentive Award Plan included stock options, restricted stock, dividend equivalents, stock appreciation rights, long-term incentive units, cash performance bonuses and other incentive awards. Only employees were eligible to receive incentive stock options under the Amended and Restated 2004 Incentive Award Plan. Initially, we reserved a total of 4,474,102 shares of common stock for issuance pursuant to the Digital Realty Trust, Inc., Digital Services, Inc. and Digital Realty Trust, L.P. 2004 Incentive Award Plan (the 2004 Incentive Award Plan), subject to certain adjustments set forth in the 2004 Incentive Award Plan. On May 2, 2007, Digital Realty Trust, Inc.’s stockholders approved the First Amended and Restated Digital Realty Trust, Inc., Digital Services, Inc. and Digital Realty Trust, L.P. 2004 Incentive Award Plan (as amended, the Amended and Restated 2004 Incentive Award Plan). The Amended and Restated 2004 Incentive Award Plan increased the aggregate number of shares of stock which could have been issued or transferred under the plan by 5,000,000 shares to a total of 9,474,102 shares, and provided that the maximum number of shares of stock with respect to awards granted to any one participant during a calendar year was 1,500,000 shares and the maximum amount that could have been paid in cash during any calendar year with respect to any performance-based award not denominated in stock or otherwise for which the foregoing limitation would not be an effective limitation for purposes of Section 162(m) of the Code was $10.0 million. On April 28, 2014, Digital Realty Trust, Inc. held its 2014 Annual Meeting of Stockholders, or the 2014 Annual Meeting, at which its stockholders approved the Digital Realty Trust, Inc., Digital Services, Inc., and Digital Realty Trust, L.P. 2014 Incentive Award Plan (as amended, the 2014 Incentive Award Plan), which had been previously adopted by its Board of Directors and recommended to the stockholders for approval by its Board of Directors. The 2014 Incentive Award Plan became effective and replaced the Amended and Restated 2004 Incentive Award Plan as of the date of such stockholder approval. The material features of the 2014 Incentive Award Plan are described in our definitive Proxy Statement filed on March 19, 2014 in connection with the 2014 Annual Meeting, which description is incorporated herein by reference. As of March 31, 2017, 3,697,500 shares of common stock, including awards convertible into or exchangeable for shares of common stock, remained available for future issuance under the 2014 Incentive Award Plan. Each long-term incentive unit and each Class D Unit issued under the 2014 Incentive Award Plan counts as one share of common stock for purposes of calculating the limit on shares that may be issued under the 2014 Incentive Award Plan and the individual award limits set forth therein. (a) Long-Term Incentive Units Long-term incentive units, which are also referred to as profits interest units, may be issued to eligible participants for the performance of services to or for the benefit of the Operating Partnership. Long-term incentive units (other than Class D units), whether vested or not, will receive the same quarterly per unit distributions as Operating Partnership common units, which equal the per share distributions on Digital Realty Trust, Inc. common stock. Initially, long-term incentive units do not have full parity with common units with respect to liquidating distributions. If such parity is reached, vested long-term incentive units may be converted into an equal number of common units of the Operating Partnership at any time, and thereafter enjoy all the rights and privileges of common units of the Operating Partnership, including redemption rights. For a discussion of how long-term incentive units achieve parity with common units, see Note 13(a) to our consolidated financial statements for the fiscal year ended December 31, 2016, included in our Annual Report on 10-K for the year ended December 31, 2016. Below is a summary of our long-term incentive unit activity for the three months ended March 31, 2017.
The grant date fair values, which equal the market price of Digital Realty Trust, Inc. common stock on the applicable grant date(s), are being expensed on a straight-line basis for service awards over four years, the current vesting period of the long-term incentive units. The expense recorded for the three months ended March 31, 2017 and 2016 related to long-term incentive units was approximately $0.7 million and $1.0 million, respectively. We capitalized amounts relating to compensation expense of employees direct and incremental to construction and successful leasing activities of approximately $0.4 million and $0.5 million for the three months ended March 31, 2017 and 2016, respectively. Unearned compensation representing the unvested portion of the long-term incentive units totaled $10.5 million and $5.6 million as of March 31, 2017 and December 31, 2016, respectively. We expect to recognize this unearned compensation over the next 3.0 years on a weighted-average basis. (b) Market Performance-Based Awards During the three months ended March 31, 2017 and 2016, the Compensation Committee of the Board of Directors of Digital Realty Trust, Inc. approved the grant of market performance-based Class D units of the Operating Partnership and market performance-based restricted stock units, or RSUs, covering shares of Digital Realty Trust, Inc.’s common stock (collectively, the “awards”), under the 2014 Incentive Award Plan to officers and employees of the Company. The awards, which were determined to contain a market condition, utilize total shareholder return, or TSR, over a three-year measurement period as the market performance metric. Awards will vest based on Digital Realty Trust, Inc.’s TSR relative to the MSCI US REIT Index, or RMS, over a three-year market performance period, or the Market Performance Period, commencing in January 2017 or January 2016, as applicable (or, if earlier, ending on the date on which a change in control of the Company occurs), subject to continued services. Vesting with respect to the market condition is measured based on the difference between Digital Realty Trust, Inc.’s TSR percentage and the TSR percentage of the RMS, or the RMS Relative Market Performance. In the event that the RMS Relative Market Performance during the Market Performance Period is achieved at the “threshold,” “target” or “high” level as set forth below, the awards will become vested as to the market condition with respect to the percentage of Class D units or RSUs, as applicable, set forth below:
If the RMS Relative Market Performance falls between the levels specified above, the percentage of the award that will vest with respect to the market condition will be determined using straight-line linear interpolation between such levels. Following the completion of the Market Performance Period, the 2016 awards that have satisfied the market condition, if any, will service-vest 50% on February 27, 2019 and 50% on February 27, 2020, subject to continued employment through each applicable vesting date. Following the completion of the Market Performance Period, the 2017 awards that have satisfied the market condition, if any, will service-vest 50% on February 27, 2020 and 50% on February 27, 2021, subject to continued employment through each applicable vesting date. Service-based vesting will be accelerated, in full or on a pro rata basis, in the event of a change in control, termination of employment by the Company without cause, or termination of employment by the award recipient for good reason, death, disability or retirement, in any case prior to the completion of the Market Performance Period. However, vesting with respect to the market condition will continue to be measured based on RMS Relative Market Performance during the three-year Market Performance Period (or, in the case of a change in control, shortened Market Performance Period). The fair values of the 2017 awards and 2016 awards were measured using a Monte Carlo simulation to estimate the probability of the market vesting condition being satisfied. Digital Realty Trust, Inc.’s achievement of the market vesting condition is contingent on its TSR over a three-year market performance period, relative to the total shareholder return of the RMS. The Monte Carlo simulation is a probabilistic technique based on the underlying theory of the Black-Scholes formula, which was run for 100,000 trials to determine the fair value of the awards. For each trial, the payoff to an award is calculated at the settlement date and is then discounted to the grant date at a risk-free interest rate. The total expected value of the awards on the grant date was determined by multiplying the average value per award over all trials by the number of awards granted. Assumptions used in the 2017 valuation include expected stock price volatility of 25 percent and a risk-free interest rate of 1.49 percent. Assumptions used in the 2016 valuations include expected stock price volatility of 22 percent and 26 percent and risk-free interest rates of 1.32 percent and 0.89 percent, respectively. These valuations were performed in a risk-neutral framework, so no assumption was made with respect to an equity risk premium. As of March 31, 2017, 2,029,908 Class D units and 543,923 market performance-based RSUs had been awarded to our executive officers and other employees. The number of units granted reflects the maximum number of Class D units or market performance-based RSUs, as applicable, which will become vested assuming the achievement of the highest level of RMS Relative Market Performance under the awards and, in the case of the Class D units, also includes dividend equivalent units. The fair value of these awards of approximately $74.9 million will be recognized as compensation expense on a straight-line basis over the expected service period of approximately four years. The unearned compensation as of March 31, 2017 and December 31, 2016 was $41.1 million and $25.6 million, respectively, net of cancellations. As of March 31, 2017, 490,529 Class D units and 104,313 market performance-based RSUs had fully vested. We recognized compensation expense related to these awards of approximately $2.1 million and $2.2 million in the three months ended March 31, 2017 and 2016, respectively. We capitalized amounts relating to compensation expense of employees directly engaged in construction and leasing activities of approximately $0.7 million and $0.7 million for the three months ended March 31, 2017 and 2016, respectively. If the market conditions are not met, at the end of the applicable performance periods, the unamortized amount will be recognized as an expense at that time. (c) Stock Options The following table summarizes the Amended and Restated 2004 Incentive Award Plan’s stock option activity for the three-month period ended March 31, 2017:
The following table summarizes information about stock options outstanding and exercisable as of March 31, 2017:
(d) Restricted Stock Below is a summary of our restricted stock activity for the three months ended March 31, 2017.
The grant date fair values, which equal the market price of Digital Realty Trust, Inc. common stock on the grant date, are expensed on a straight-line basis for service awards over the vesting period of the restricted stock, which is generally four years. The expense recorded for the three months ended March 31, 2017 and 2016 related to grants of restricted stock was approximately $1.0 million and $0.9 million, respectively. We capitalized amounts relating to compensation expense of employees direct and incremental to construction and successful leasing activities of approximately $0.8 million and $0.8 million for the three months ended March 31, 2017 and 2016, respectively. Unearned compensation representing the unvested portion of the restricted stock totaled $24.3 million and $14.7 million as of March 31, 2017 and December 31, 2016, respectively. We expect to recognize this unearned compensation over the next 3.3 years on a weighted-average basis. |
Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments Currently, we use interest rate swaps to manage our interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. To comply with the provisions of fair value accounting guidance, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, as of March 31, 2017, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. We do not have any fair value measurements on a recurring basis using significant unobservable inputs (Level 3) as of March 31, 2017 or December 31, 2016. Cash Flow Hedges of Interest Rate Risk Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements related to the U.S. LIBOR, GBP-LIBOR, SGD-SOR and CDOR-based tranches of the unsecured term loans. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. We record all our interest rate swaps on the consolidated balance sheet at fair value. In determining the fair value of our interest rate swaps, we consider the credit risk of our counterparties. These counterparties are generally larger financial institutions engaged in providing a variety of financial services. These institutions generally face similar risks regarding adverse changes in market and economic conditions, including, but not limited to, fluctuations in interest rates, exchange rates, equity and commodity prices and credit spreads. The recent and pervasive disruptions in the financial markets have heightened the risks to these institutions. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the three months ended March 31, 2017 and 2016, there were no ineffective portions to our interest rate swaps. As of March 31, 2017 and December 31, 2016, we had the following outstanding interest rate derivatives that were designated as effective cash flow hedges of interest rate risk (in thousands):
As of March 31, 2017, we estimate that an additional $3.1 million will be reclassified as an increase to interest expense during the twelve months ended March 31, 2018, when the hedged forecasted transactions impact earnings. Foreign Currency Net Investment Hedges During the three months ended June 30, 2016, we entered into a series of forward contracts pursuant to which we agreed to sell an amount of foreign currency for an agreed upon amount of USD. These forward contracts were executed to manage foreign currency exposures associated with certain transactions. During the three months ended March 31, 2017, we terminated three of the four forward contracts with a notional amount of GBP 270.0 million. In connection with the settlement, we received approximately $51.3 million in proceeds and the related amount of accumulated other comprehensive income (AOCI) will remain in AOCI until the Company sells or liquidates its GBP-denominated investments, which has not occurred as of March 31, 2017. As of March 31, 2017, the Company had the following outstanding derivatives that were designated as foreign currency net investment hedges under qualifying hedging relationships (notional and fair value amounts in thousands):
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Fair Value of Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Instruments | Fair Value of Instruments We disclose fair value information about all financial instruments, whether or not recognized in the condensed consolidated balance sheets, for which it is practicable to estimate fair value. Current accounting guidance requires the Company to disclose fair value information about all financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate fair value. The Company’s disclosures of estimated fair value of financial instruments at March 31, 2017 and December 31, 2016 were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. The carrying amounts for cash and cash equivalents, restricted cash, accounts and other receivables, accounts payable and other accrued liabilities, accrued dividends and distributions, security deposits and prepaid rents approximate fair value because of the short-term nature of these instruments. As described in Note 14 "Derivative Instruments", the interest rate swaps and foreign currency forward contracts are recorded at fair value. We calculate the fair value of our mortgage loans, unsecured term loan and unsecured senior notes based on currently available market rates assuming the loans are outstanding through maturity and considering the collateral and other loan terms. In determining the current market rate for fixed rate debt, a market spread is added to the quoted yields on federal government treasury securities with similar maturity dates to our debt. The carrying value of our global revolving credit facility approximates fair value, due to the variability of interest rates. As of March 31, 2017 and December 31, 2016, the aggregate estimated fair value and carrying value of our global revolving credit facility, unsecured term loans, unsecured senior notes and mortgage loans were as follows (in thousands):
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Contingent liabilities One of the customers at our Convergence Business Park property had an option to expand as part of their lease agreement, which expired in April 2017. As part of this option, development activities were not permitted on specifically identified expansion space within the property until April 2014. From April 2014 through April 2017, the tenant had the right of first refusal on any third party’s bona fide offer to buy the adjacent land. The tenant did not exercise its option. We are currently a party to litigation related to the release of a sublease guarantee that was provided by one of our subsidiaries. Certain parties are seeking to invalidate the release, which freed our subsidiary from any further obligations under the sublease guarantee. Our maximum exposure in this matter is estimated to be approximately £20 million. We believe we have strong defenses as well as claims for reimbursement against third parties, which we intend to pursue if necessary. We cannot at this time reliably estimate the likelihood of the outcome. (b) Construction Commitments Our properties require periodic investments of capital for tenant-related capital expenditures and for general capital improvements. From time to time in the normal course of our business, we enter into various construction contracts with third parties that may obligate us to make payments. At March 31, 2017, we had open commitments, including amounts reimbursable of approximately $22.8 million, related to construction contracts of approximately $352.0 million. (c) Legal Proceedings Although the Company is involved in legal proceedings arising in the ordinary course of business, as of March 31, 2017, the Company is not currently a party to any legal proceedings nor, to its knowledge, is any legal proceeding threatened against it that it believes would have a material adverse effect on its financial position, results of operations or liquidity. |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying interim condensed consolidated financial statements include all of the accounts of Digital Realty Trust, Inc., the Operating Partnership and their subsidiaries. Intercompany balances and transactions have been eliminated. The accompanying interim condensed consolidated financial statements are unaudited, but have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and in compliance with the rules and regulations of the United States Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments necessary for a fair presentation have been included. All such adjustments are considered to be of a normal recurring nature, except as otherwise indicated. The results of operations for the interim periods are not necessarily indicative of the results to be obtained for the full fiscal year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our annual report on Form 10-K for the year ended December 31, 2016. The notes to the condensed consolidated financial statements of Digital Realty Trust, Inc. and the Operating Partnership have been combined to provide the following benefits:
There are a few differences between the Company and the Operating Partnership, which are reflected in these condensed consolidated financial statements. We believe it is important to understand the differences between the Company and the Operating Partnership in the context of how we operate as an interrelated consolidated company. As a result, Digital Realty Trust, Inc. generally does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public securities from time to time and guaranteeing certain unsecured debt of the Operating Partnership and certain of its subsidiaries and affiliates. Digital Realty Trust, Inc. itself has not issued any indebtedness but guarantees the unsecured debt of the Operating Partnership and certain of its subsidiaries and affiliates, as disclosed in these notes. The Operating Partnership holds substantially all the assets of the Company and holds the ownership interests in the Company’s joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from public equity issuances by Digital Realty Trust, Inc., which are generally contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generally generates the capital required by the Company’s business through the Operating Partnership’s operations, by the Operating Partnership’s or its affiliates direct or indirect incurrence of indebtedness or through the issuance of partnership units. The presentation of noncontrolling interests in operating partnership, stockholders’ equity and partners’ capital are the main areas of difference between the condensed consolidated financial statements of Digital Realty Trust, Inc. and those of the Operating Partnership. The common limited partnership interests held by the limited partners in the Operating Partnership are presented as limited partners’ capital within partners’ capital in the Operating Partnership’s condensed consolidated financial statements and as noncontrolling interests in operating partnership within equity in Digital Realty Trust, Inc.’s condensed consolidated financial statements. The common and preferred partnership interests held by Digital Realty Trust, Inc. in the Operating Partnership are presented as general partner’s capital within partners’ capital in the Operating Partnership’s condensed consolidated financial statements and as preferred stock, common stock, additional paid-in capital and accumulated dividends in excess of earnings within stockholders’ equity in Digital Realty Trust, Inc.’s condensed consolidated financial statements. The differences in the presentations between stockholders’ equity and partners’ capital result from the differences in the equity issued at the Digital Realty Trust, Inc. and the Operating Partnership levels. To help investors understand the significant differences between the Company and the Operating Partnership, these consolidated financial statements present the following separate sections for each of the Company and the Operating Partnership:
In the sections that combine disclosure of Digital Realty Trust, Inc. and the Operating Partnership, these notes refer to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that enters into contracts and joint ventures and holds assets and debt, reference to the Company is appropriate because the business is one enterprise and the Company generally operates the business through the Operating Partnership. |
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Cash Equivalents | Cash Equivalents For the purpose of the condensed consolidated statements of cash flows, we consider short-term investments with original maturities of 90 days or less to be cash equivalents. |
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Investment in Unconsolidated Joint Ventures | Investment in Unconsolidated Joint Ventures The Company’s investment in unconsolidated joint ventures is accounted for using the equity method, whereby the investment is increased for capital contributed and our share of the joint ventures’ net income and decreased by distributions we receive and our share of any losses of the joint ventures. We amortize the difference between the cost of our investments in unconsolidated joint ventures and the book value of the underlying equity into equity in earnings from unconsolidated affiliates on a straight-line basis consistent with the lives of the underlying assets. |
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Capitalization of Costs | Capitalization of Costs Direct and indirect project costs that are clearly associated with the development of properties are capitalized as incurred. Project costs include all costs directly associated with the development of a property, including construction costs, interest, property taxes, insurance, legal fees and costs of personnel working on the project. Indirect costs that do not clearly relate to the projects under development are not capitalized and are charged to expense as incurred. Capitalization of costs begins when the activities necessary to get the development project ready for its intended use begins, which include costs incurred before the beginning of construction. Capitalization of costs ceases when the development project is substantially complete and ready for its intended use. Determining when a development project commences, and when it is substantially complete and ready for its intended use involves a degree of judgment. We generally consider a development project to be substantially complete and ready for its intended use upon receipt of a certificate of occupancy. If and when development of a property is suspended pursuant to a formal change in the planned use of the property, we will evaluate whether the accumulated costs exceed the estimated value of the project and write-off the amount of any such excess accumulated costs. For a development project that is suspended for reasons other than a formal change in the planned use of such property, the accumulated project costs are evaluated for impairment consistent with our impairment policies for long-lived assets. Capitalized costs are allocated to the specific components of a project that are benefited. |
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Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination. Goodwill is not amortized. Management performs an annual impairment test for goodwill and between annual tests, management will evaluate the recoverability of goodwill whenever events or changes in circumstances indicate that the carrying value of goodwill may not be fully recoverable. In its impairment tests of goodwill, management will first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If based on this assessment, management determines that the fair value of the reporting unit is not less than its carrying value, then performing the additional two-step impairment test is unnecessary. If our qualitative assessment indicates that goodwill impairment is more likely than not, we perform a two-step impairment test. We test goodwill for impairment under the two-step impairment test by first comparing the book value of net assets to the fair value of the reporting units. If the fair value is determined to be less than the book value or qualitative factors indicate that it is more likely than not that goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. We estimate the fair value of the reporting units using discounted cash flows. If the carrying value of goodwill exceeds its fair value, an impairment charge is recognized. |
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Share-Based Compensation | Share-Based Compensation The Company measures all share-based compensation awards at fair value on the date they are granted to employees, consultants and directors. The fair value of share-based compensation awards that contain a market condition, including market performance-based Class D units of the Operating Partnership and market performance-based restricted stock units (discussed in Note 13 "Incentive Plan"), is measured using a Monte Carlo simulation method and not adjusted based on actual achievement of the performance goals. We recognize compensation cost, net of forfeitures, for all of our existing awards, including long-term incentive units, market performance-based awards and restricted stock, over a four-year period. |
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Income Taxes | Income Taxes Digital Realty Trust, Inc. has elected to be treated as a real estate investment trust (a “REIT”) for federal income tax purposes. As a REIT, Digital Realty Trust, Inc. generally is not required to pay federal corporate income tax to the extent taxable income is currently distributed to its stockholders. If Digital Realty Trust, Inc. fails to qualify as a REIT in any taxable year, it will be subject to federal income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate tax rates. The Company is subject to foreign, state and local income taxes in the jurisdictions in which it conducts business. The Company’s U.S. consolidated taxable REIT subsidiaries are subject to both federal and state income taxes to the extent there is taxable income. Accordingly, the Company recognizes current and deferred income taxes for its taxable REIT subsidiaries, certain states and non-U.S. jurisdictions, as appropriate. We assess our significant tax positions in accordance with U.S. GAAP for all open tax years and determine whether we have any material unrecognized liabilities from uncertain tax benefits. If a tax position is not considered “more-likely-than-not” to be sustained solely on its technical merits, no benefits of the tax position are to be recognized (for financial statement purposes). |
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Presentation of Transactional-Based Taxes | Presentation of Transactional-based Taxes We account for transactional-based taxes, such as value added tax, or VAT, for our international properties on a net basis. |
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Fee Income | Fee Income Occasionally, customers engage the company for certain services. The nature of these services historically involves property management, construction management, and assistance with financing. The proper revenue recognition of these services can be different, depending on whether the arrangements are service revenue or contractor type revenue. Service revenues are typically recognized on an equal monthly basis based on the minimum fee to be earned. The monthly amounts could be adjusted depending on if certain performance milestones are met. Fee income also includes management fees. These fees arise from contractual agreements with entities in which we have a noncontrolling interest. The management fees are recognized as earned under the respective agreements. Management and other fee income related to partially owned entities are recognized to the extent attributable to the unaffiliated interest. |
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Assets and Liabilities Measured at Fair Value | Assets and Liabilities Measured at Fair Value Fair value under U.S. GAAP is a market-based measurement, not an entity-specific measurement. Therefore, our fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair-value measurements, we use a fair-value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair-value measurement is based on inputs from different levels of the fair-value hierarchy, the lowest level input that is significant would be used to determine the fair-value measurement in its entirety. Our assessment of the significance of a particular input to the fair-value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. |
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Transactions Expense | Transactions Expense Transactions expense includes acquisition-related expenses, other business development expenses and other expenses to integrate newly acquired investments, which are expensed as incurred. Acquisition-related expenses include closing costs, broker commissions and other professional fees, including legal and accounting fees related to acquisitions and significant transactions. |
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Gains on Sale of Properties | Gains on Sale of Properties Gains on sale of properties are recognized using the full accrual or partial sale methods, as applicable, in accordance with U.S. GAAP, provided various criteria relating to the terms of sale and any subsequent involvement with the real estate sold are satisfied. |
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Management's Estimates | Management’s Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates made. On an on-going basis, we evaluate our estimates, including those related to the valuation of our real estate properties, contingent consideration, accounts receivable and deferred rent receivable, performance-based equity compensation plans, the completeness of accrued liabilities and Digital Realty Trust, Inc.’s qualification as a REIT. We base our estimates on historical experience, current market conditions, and various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could vary under different assumptions or conditions. |
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Segment and Geographic Information | Segment and Geographic Information All of our properties generate similar revenues and expenses related to tenant rent and reimbursements and operating expenses. The delivery of our products and services are consistent across all properties and although services are provided to a wide range of customers, the types of real estate services provided to them are standardized throughout the portfolio. As such, the properties in our portfolio have similar economic characteristics and the nature of the products and services provided to our customers and the method to distribute such services are consistent throughout the portfolio. In addition, the chief operating decision makers evaluate operating performance and make resource allocation decisions for the portfolio as a whole, rather than by property type or revenue stream. |
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New Accounting Pronouncements | New Accounting Pronouncements New Accounting Standards Adopted In January 2017, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2017-01, "Clarifying the Definition of a Business (Topic 805)." ASU 2017-01 clarifies the definition of a business and provides further guidance for evaluating whether a transaction will be accounted for as an acquisition of an asset or a business. ASU 2017-01 is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The update should be applied prospectively. We adopted ASU 2017-01 as of January 1, 2017 and the adoption did not require any additional disclosures. We believe most of our future acquisitions of operating properties will qualify as asset acquisitions and most future transaction costs associated with these acquisitions will be capitalized. In November 2016, the FASB issued an ASU that will require companies to include restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The ASU will require a disclosure of a reconciliation between the statement of financial position and the statement of cash flows when the statement of financial position includes more than one line item for cash, cash equivalents, restricted cash, and restricted cash equivalents. Entities with material restricted cash and restricted cash equivalents balances will be required to disclose the nature of the restrictions. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted, and will be applied retrospectively to all periods presented. We adopted this ASU as of January 1, 2017, and restricted cash balances are included along with cash and cash equivalents as of the end of period and beginning of period in our condensed consolidated statement of cash flows for all periods presented; separate line items showing changes in restricted cash balances have been eliminated from our condensed consolidated statement of cash flows. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which provides for simplification of certain aspects of employee share-based payment accounting, including income taxes, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this standard must be applied prospectively, retrospectively, or as of the beginning of the earliest comparative period presented in the year of adoption, depending on the type of amendment. We adopted ASU 2016-09 as of January 1, 2017, and did not have a material impact on our consolidated financial statements. New Accounting Standards Issued but not yet Adopted In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers", and since that date has issued several additional ASUs intended to clarify certain aspects of ASU 2014-09 and to provide for certain practical expedients entities may elect upon adoption. Collectively, these ASUs outline a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers. While lease contracts with customers, which constitute the vast majority of our revenues, are a specific scope exception, this update may have implications in certain variable payment terms included in lease agreements. The standard is effective for the Company on January 1, 2018, with early adoption permitted. The standard permits the use of either a retrospective or cumulative effect transition method and permits the use of certain practical expedients. We currently anticipate using the cumulative effect transition method, however, this determination is subject to change. As the standard does not significantly impact lessor accounting, we do not believe adoption will have a material impact on our accounting for rental revenue. In addition, we do not anticipate a significant impact to our accounting for certain of our revenue streams which are not based on contractually specified lease amounts, including interconnection, tenant reimbursement and other revenue. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)", which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Accounting for leases with a term of 12 months or less will be similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 is expected to impact the Company’s consolidated financial statements as the Company has certain operating and land lease arrangements for which it is the lessee. ASU 2016-02 supersedes the previous leases standard, Leases (Topic 840). The standard is effective on January 1, 2019, with early adoption permitted. A set of practical expedients for implementation, which must be elected as a package and for all leases, may also be elected. These practical expedients include relief from re-assessing lease classification at the adoption date for expired or existing leases, although a right-of-use asset and lease liability would still be recorded for such leases. We are currently assessing the method of adoption and the impact that ASU 2016-02 will have on our consolidated financial statements. In January 2017, the FASB issued guidance codified in ASU Topic 2017-04, "Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". ASU 2017-04 simplifies the accounting for goodwill impairment by eliminating the process of measuring the implied value of goodwill, known as step two, from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The standard will be effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. We do not expect the provisions of ASC 2017-04 to have a material impact on our consolidated financial statements. |
Investments in Real Estate (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Property Acquisitions | We acquired the following real estate during the three months ended March 31, 2017:
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the amounts for acquired assets and liabilities recorded at their fair values as of the acquisition date (in thousands):
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Investment in Unconsolidated Joint Ventures (Tables) |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Financial Information for Joint Ventures | The following tables present summarized financial information for our joint ventures as of March 31, 2017 and December 31, 2016 and for the three months ended March 31, 2017 and 2016 (unaudited, in thousands):
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Acquired Intangible Assets and Liabilities (Tables) |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired Intangible Assets And Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Acquired Intangible Assets | The following summarizes our acquired intangible assets (real estate intangibles, comprised of acquired in-place lease value and tenant relationship value along with acquired above-market lease value) and intangible liabilities (acquired below-market lease value) as of March 31, 2017 and December 31, 2016.
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Schedule of Estimated Annual Amortization of Below Market Leases | Estimated annual amortization of acquired below-market leases, net of acquired above-market leases, for each of the five succeeding years and thereafter, commencing April 1, 2017 is as follows:
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Schedule of Estimated Annual Amortization of Acquired of Intangible Assets | Estimated annual amortization of acquired in-place lease value for each of the five succeeding years and thereafter, commencing April 1, 2017 is as follows:
Estimated annual amortization of customer contracts for each of the five succeeding years and thereafter, commencing April 1, 2017 is as follows:
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Debt of the Operating Partnership (Tables) - Digital Realty Trust, L.P. |
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Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Outstanding Indebtedness of the Operating Partnership | A summary of outstanding indebtedness of the Operating Partnership as of March 31, 2017 and December 31, 2016 is as follows (in thousands):
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Schedule of Debt Maturities and Principal Maturities | The table below summarizes our debt maturities and principal payments as of March 31, 2017 (in thousands):
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Income per Share (Tables) |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Basic and Diluted Earnings Per Share | The following is a summary of basic and diluted income per share (in thousands, except share and per share amounts):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | We have excluded the following potentially dilutive securities in the calculations above as they would be antidilutive or not dilutive:
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Income per Unit (Tables) |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Basic and Diluted Earnings Per Share | The following is a summary of basic and diluted income per share (in thousands, except share and per share amounts):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | We have excluded the following potentially dilutive securities in the calculations above as they would be antidilutive or not dilutive:
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Digital Realty Trust, L.P. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Basic and Diluted Earnings Per Share | The following is a summary of basic and diluted income per unit (in thousands, except unit and per unit amounts):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | We have excluded the following potentially dilutive securities in the calculations above as they would be antidilutive or not dilutive:
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Equity and Accumulated Other Comprehensive Loss, Net (Tables) |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ownership Interest In The Operating Partnership | The following table shows the ownership interests in the Operating Partnership as of March 31, 2017 and December 31, 2016:
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Summary of Activity for Noncontrolling Interests in the Operating Partnership | The following table shows activity for the noncontrolling interests in the Operating Partnership for the three months ended March 31, 2017:
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Schedule of Dividends/Distributions | We have declared and paid the following dividends on our common and preferred stock for the three months ended March 31, 2017 (in thousands, except per share data):
|
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Schedule of Accumulated Other Comprehensive Income, Net | The accumulated balances for each item within other comprehensive income, net are as follows (in thousands):
|
Capital and Accumulated Other Comprehensive Loss (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Dividends/Distributions | We have declared and paid the following dividends on our common and preferred stock for the three months ended March 31, 2017 (in thousands, except per share data):
|
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Schedule of Accumulated Other Comprehensive Income, Net | The accumulated balances for each item within other comprehensive income, net are as follows (in thousands):
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Digital Realty Trust, L.P. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Dividends/Distributions | The Operating Partnership has declared and paid the following distributions on its common and preferred units for the three months ended March 31, 2017 (in thousands, except for per unit data):
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Schedule of Accumulated Other Comprehensive Income, Net | The accumulated balances for each item within other comprehensive income are as follows (in thousands):
|
Incentive Plan (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Long-Term Incentive Unit Activity | Below is a summary of our long-term incentive unit activity for the three months ended March 31, 2017.
|
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Market Performance Based Awards | In the event that the RMS Relative Market Performance during the Market Performance Period is achieved at the “threshold,” “target” or “high” level as set forth below, the awards will become vested as to the market condition with respect to the percentage of Class D units or RSUs, as applicable, set forth below:
|
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Summary of Incentive Award Plan's Stock Option | The following table summarizes the Amended and Restated 2004 Incentive Award Plan’s stock option activity for the three-month period ended March 31, 2017:
|
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Summary of Stock Options Outstanding and Exercisable | The following table summarizes information about stock options outstanding and exercisable as of March 31, 2017:
|
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Summary of Restricted Stock Activity | Below is a summary of our restricted stock activity for the three months ended March 31, 2017.
|
Derivative Instruments (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Derivative Instruments | As of March 31, 2017, the Company had the following outstanding derivatives that were designated as foreign currency net investment hedges under qualifying hedging relationships (notional and fair value amounts in thousands):
As of March 31, 2017 and December 31, 2016, we had the following outstanding interest rate derivatives that were designated as effective cash flow hedges of interest rate risk (in thousands):
|
Fair Value of Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Fair Value And Carrying Amounts | As of March 31, 2017 and December 31, 2016, the aggregate estimated fair value and carrying value of our global revolving credit facility, unsecured term loans, unsecured senior notes and mortgage loans were as follows (in thousands):
|
Investments in Real Estate (Schedule of Real Estate Property Acquisitions) (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017
USD ($)
property
|
Dec. 31, 2016
USD ($)
|
|
Business Acquisition [Line Items] | ||
Number of properties | property | 145 | |
Assets | $ 12,329,548 | $ 12,192,585 |
Liabilities | $ 7,259,103 | $ 7,060,288 |
Held-for-sale | ||
Business Acquisition [Line Items] | ||
Number of properties | property | 3 | |
Assets | $ 56,200 | |
Liabilities | 3,100 | |
Osaka Phase II | ||
Business Acquisition [Line Items] | ||
Purchase price | $ 13,600 |
Investment in Unconsolidated Joint Ventures (Summary Of Financial Information For Joint Ventures) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
|
Equity Method Investments and Joint Ventures [Abstract] | |||
Net Investment in Properties | $ 736,735 | $ 741,228 | |
Total Assets | 925,439 | 922,694 | |
Debt | 456,870 | 457,141 | |
Total Liabilities | 546,389 | 549,997 | |
Equity | 379,050 | 372,697 | |
Our investment in and share of equity in earnings of unconsolidated joint ventures | 112,856 | $ 106,402 | |
Revenues | 35,062 | $ 33,608 | |
Property Operating Expense | (10,391) | (10,583) | |
Net Operating Income | 24,671 | 23,025 | |
Net Income | 11,286 | 9,000 | |
Investment in and share of net income (loss) | $ 5,324 | $ 4,078 |
Acquired Intangible Assets and Liabilities (Summary of Acquired Intangible Assets) (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Below-market lease, gross amount | $ 284,695 | $ 283,899 |
Below-market lease, accumulated amortization | (206,054) | (202,000) |
Total | 78,641 | 81,899 |
Acquired in-place lease value | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | 898,904 | 896,693 |
Accumulated amortization | (532,545) | (517,443) |
Net | 366,359 | 379,250 |
Tenant relationship value | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | 975,188 | 971,519 |
Accumulated amortization | (99,926) | (82,069) |
Net | 875,262 | 889,450 |
Acquired above-market leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | 110,748 | 110,142 |
Accumulated amortization | (89,922) | (87,961) |
Net | $ 20,826 | $ 22,181 |
Acquired Intangible Assets and Liabilities (Schedule of Estimated Annual Amortization of Below Market Leases) (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Total | $ 78,641 | $ 81,899 |
Below-Market Leases, Net of Above-Market Leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remainder of 2017 | 5,179 | |
2018 | 5,538 | |
2019 | 5,680 | |
2020 | 7,434 | |
2021 | 7,423 | |
Thereafter | 26,561 | |
Total | $ 57,815 |
Acquired Intangible Assets And Liabilities (Schedule of Estimated Annual Amortization of Intangible Assets) (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Acquired in-place lease value | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remainder of 2017 | $ 40,295 | |
2018 | 47,854 | |
2019 | 40,648 | |
2020 | 36,692 | |
2021 | 34,077 | |
Thereafter | 166,793 | |
Net | 366,359 | $ 379,250 |
Customer contracts and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remainder of 2017 | 52,687 | |
2018 | 70,249 | |
2019 | 70,249 | |
2020 | 70,249 | |
2021 | 70,249 | |
Thereafter | 541,579 | |
Net | $ 875,262 |
Income per Share (Summary of Basic and Diluted Earnings per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Earnings Per Share [Abstract] | ||
Net income available to common stockholders | $ 66,145 | $ 39,125 |
Weighted average shares/units outstanding-basic (shares/units) | 159,297,027 | 146,565,564 |
Potentially dilutive common shares: | ||
Stock options (shares) | 4 | 11,286 |
Unvested incentive units (shares) | 237,336 | 122,601 |
Forward equity offering (shares) | 283,388 | 0 |
Market performance-based awards (shares) | 603,900 | 733,743 |
Weighted average shares/units outstanding-diluted (shares/units) | 160,421,655 | 147,433,194 |
Income per share: | ||
Basic (in dollars per share/unit) | $ 0.42 | $ 0.27 |
Diluted (in dollars per share/unit) | $ 0.41 | $ 0.27 |
Income Taxes (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | ||
Percentage of income distributed (at least) | 100.00% | |
Net deferred tax liability | $ 155.4 | $ 153.8 |
Equity and Accumulated Other Comprehensive Loss, Net (Equity Distribution Agreements) (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Jun. 30, 2011 |
|
Equity [Abstract] | ||
Aggregate offering price of the distribution agreement maximum | $ 400,000,000 | |
Net proceeds from sale of common stock | $ 342,700,000 | |
Issuance of common shares (shares) | 5.7 | |
Equity distribution agreements at an average price (in dollars per share) | $ 60.35 | |
Payment of commissions to sales agents | $ 3,500,000 | |
Aggregate offering price remaining available for offer and sale | $ 53,800,000 |
Equity and Accumulated Other Comprehensive Loss, Net (Forward Equity Sale) (Details) - USD ($) $ in Billions |
Sep. 27, 2016 |
Jun. 02, 2016 |
May 20, 2016 |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|---|
Equity and Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock shares issued (shares) | 159,539,892 | 159,019,118 | |||
Forward equity sale | |||||
Equity and Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock subject to forward sale agreements (shares) | 2,375,000 | ||||
Forward equity sale | Common Stock | |||||
Equity and Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
New issues of stock during period (shares) | 14,375,000 | 12,500,000 | |||
New issues of stock during period, underwriters option (shares) | 1,875,000 | ||||
Common stock shares issued (shares) | 12,000,000 | ||||
Gross proceeds from the issuance of common stock | $ 1.1 |
Equity and Accumulated Other Comprehensive Loss, Net (Redemption of Series F Preferred Stock) (Details) - USD ($) $ / shares in Units, $ in Millions |
Apr. 05, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Class of Stock [Line Items] | |||
Preferred Stock, outstanding (shares) | 41,900,000 | 41,900,000 | |
Subsequent Event | Series F Preferred Units | |||
Class of Stock [Line Items] | |||
Preferred Stock, outstanding (shares) | 7,300,000 | ||
Preferred Stock, dividend rate | 6.625% | ||
Redemption price per share (in dollars per share/unit) | $ 25.01840 | ||
Preferred Stock, liquidation preference (in dollars per share/unit) | $ 25.00 | ||
Redemption premium | $ 6.3 |
Equity and Accumulated Other Comprehensive Loss, Net (Noncontrolling Interests in Operating Partnership) (Details) $ in Millions |
Mar. 31, 2017
USD ($)
shares
|
Dec. 31, 2016
USD ($)
shares
|
---|---|---|
Class of Stock [Line Items] | ||
Number of units (units) | 159,539,892 | 159,019,118 |
Percentage of total | 98.40% | 98.50% |
Common stock conversion ratio | 1 | |
Common units held by third parties | ||
Class of Stock [Line Items] | ||
Common units held by third parties (units) | 1,011,814 | 1,141,814 |
Percentage of total | 0.60% | 0.70% |
Incentive units held by employees and directors (see Note 13) | ||
Class of Stock [Line Items] | ||
Incentive units held by employees and directors (units) | 1,534,357 | 1,333,849 |
Percentage of total | 1.00% | 0.80% |
Noncontrolling Interests in Operating Partnership | ||
Class of Stock [Line Items] | ||
Number of units (units) | 162,086,063 | 161,494,781 |
Percentage of total | 100.00% | 100.00% |
Digital Realty Trust, L.P. | ||
Class of Stock [Line Items] | ||
Common stock conversion ratio | 1 | |
Redemption value of OP units | $ | $ 255.9 | $ 226.3 |
Capital and Accumulated Other Comprehensive Loss (Partnership Units Narrative) (Details) $ in Millions |
Mar. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
---|---|---|
Class of Stock [Line Items] | ||
Common stock conversion ratio | 1 | |
Digital Realty Trust, L.P. | ||
Class of Stock [Line Items] | ||
Common stock conversion ratio | 1 | |
Redemption value of common units | $ 255.9 | $ 226.3 |
Incentive Plan (Summary of Long-Term Incentive Units) (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
|
Units | |||
Granted (shares) | 55,324 | ||
Weighted-Average Grant Date Fair Value | |||
Award vesting period | 4 years | ||
Long-Term Incentive Units | |||
Units | |||
Unvested beginning of period (shares) | 128,822 | ||
Granted (shares) | 55,324 | ||
Vested (shares) | (41,558) | ||
Unvested end of period (shares) | 142,588 | ||
Weighted-Average Grant Date Fair Value | |||
Unvested, beginning of period ($ per share) | $ 66.58 | ||
Granted ($ per share) | 107.98 | ||
Vested ($ per share) | 60.83 | ||
Unvested, end of period ($ per share) | $ 84.32 | ||
Award vesting period | 4 years | ||
Share/unit compensation expense | $ 0.7 | $ 1.0 | |
Capitalized expense related to construction and leasing activities | 0.4 | $ 0.5 | |
Unearned compensation | $ 10.5 | $ 5.6 | |
Unearned compensation, period of recognition (in years) | 3 years 18 days |
Incentive Plan (Summary of Incentive Award Plan's Stock Option) (Details) |
3 Months Ended |
---|---|
Mar. 31, 2017
$ / shares
shares
| |
Shares | |
Options outstanding, end of period (shares) | shares | 17,674 |
Exercised (shares) | shares | (17,668) |
Options outstanding, end of period (shares) | shares | 6 |
Exercisable, end of period (shares) | shares | 6 |
Weighted average exercise price | |
Options outstanding, beginning of period ($ per share) | $ / shares | $ 41.73 |
Exercised ($ per share) | $ / shares | 41.73 |
Options outstanding, end of period ($ per share) | $ / shares | 41.73 |
Exercisable, end of period ($ per share) | $ / shares | $ 41.73 |
Incentive Plan (Summary of Stock Options Outstanding and Exercisable) (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Exercise price range, lower (in dollars per share) | $ 41.73 | |
Exercise price range, upper (in dollars per share) | $ 41.73 | |
Number outstanding (shares) | 6 | 17,674 |
Weighted-average remaining contractual life (years) | 32 days | |
Weighted average exercise price, outstanding (in dollars per share) | $ 41.73 | |
Aggregate intrinsic value | $ 388 |
Derivative Instruments (Narrative) (Details) £ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2017
USD ($)
instrument
|
Mar. 31, 2016
USD ($)
|
Mar. 31, 2017
GBP (£)
|
Dec. 31, 2016
instrument
|
|
Derivative [Line Items] | ||||
Ineffective portion of cash flow hedges | $ 0 | $ 0 | ||
Gain (loss) to be reclassified within twelve months | (3,100,000) | |||
Proceeds from forward contracts | $ 51,308,000 | $ 0 | ||
Designated as Hedging Instrument | Currency forward contracts | ||||
Derivative [Line Items] | ||||
Number of forward contracts terminated | instrument | 3 | |||
Number of Instruments | instrument | 4 | |||
Notional amount | £ | £ 270.0 | |||
Proceeds from forward contracts | $ 51,300,000 |
Derivative Instruments (Outstanding Derivatives) (Details) - Designated as Hedging Instrument - Currency forward contracts £ in Thousands, $ in Thousands |
Mar. 31, 2017
USD ($)
instrument
|
Mar. 31, 2017
GBP (£)
instrument
|
Dec. 31, 2016
instrument
|
---|---|---|---|
Derivative [Line Items] | |||
Number of Instruments | instrument | 4 | ||
Notional Amount | £ | £ 270,000 | ||
Net investment hedging | |||
Derivative [Line Items] | |||
Number of Instruments | instrument | 1 | 1 | |
Fair value of derivatives | $ | $ 16,560 | ||
Net investment hedging | Notional Amount Sold | |||
Derivative [Line Items] | |||
Notional Amount | £ | £ 87,299 | ||
Net investment hedging | Notional Amount Purchased | |||
Derivative [Line Items] | |||
Notional Amount | $ | $ 126,961 |
Commitments and Contingencies (Details) - 3 months ended Mar. 31, 2017 £ in Millions, $ in Millions |
GBP (£) |
USD ($) |
---|---|---|
Loss Contingencies [Line Items] | ||
Reimbursable amount of commitments related to construction contracts | $ 22.8 | |
Commitments related to construction contracts | $ 352.0 | |
Pending Litigation | ||
Loss Contingencies [Line Items] | ||
Contingent obligation | £ | £ 20 |
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