Merger and Portfolio Acquisitions (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Preliminary Fair Value of Assets and Liabilities Acquired

We completed the acquisition of DFT on September 14, 2017. A summary of the fair value of the assets and liabilities acquired for total equity of approximately $6.2 billion is as follows (in thousands):



	Fair Value			Weighted Average Remaining Intangible Amortization Life (in months)
Land	$	312,579
Buildings and improvements	3,677,497
Cash and cash equivalents	20,650
Accounts and other receivables	10,978
Acquired above-market leases	162,333			47
Goodwill	2,592,181
Acquired in-place lease value, deferred leasing costs and intangibles:
Tenant relationship value	980,267			220
Acquired in-place lease value	557,128			70
Tenant origination costs	44,990			80
Global revolving credit facility, net ⁽¹⁾	(450,697		)
Unsecured term loans ⁽¹⁾	(250,000		)
Unsecured senior notes, net ⁽²⁾	(886,831		)
Mortgage loans ⁽¹⁾	(105,000		)
Acquired below-market leases	(185,543		)	137
Accounts payable and other accrued liabilities	(248,259		)
Other working capital, net	(22,640		)
Total equity consideration for DFT merger	$	6,209,633


(1)	Debt was paid off in full at closing of the DFT merger.


(2)	Approximately $621 million of fair value debt was paid off prior to September 30, 2017. The remainder was paid off in October 2017.

The following table summarizes the amounts for acquired assets and liabilities recorded at their fair values as of the acquisition date (in thousands):



Investments in real estate	$	270,195
Goodwill	442,975
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	(48,037		)
Total purchase price	$	818,904

We acquired the following real estate during the years ended December 31, 2017 and 2016 (excluding real estate already discussed in Note 3):

2017 Acquisitions



Property Type	Amount (in millions)⁽²⁾
Land Parcels ⁽¹⁾	$	55.3
Data Centers	346.2
Technology Manufacturing	14.3
	$	415.8


(1)	Represents currently vacant land which is not included in our operating property count.


(2)	Purchase price in U.S. dollars and excludes capitalized closing costs. Each of these acquisitions was accounted for as an asset acquisition pursuant to the adoption of ASU 2017-01 on January 1, 2017.

The table below reflects the purchase price allocation for the above properties acquired in 2017 (in thousands):



Property Type	Land		Buildings and Improvements		Tenant Improvements		Above-Market Leases		In-Place Leases		Below-Market Leases			Acquisition Date Fair Value
Land Parcels	$	55,229	$	—	$	—	$	—	$	—	$	—		$	55,229
Data Centers	20,431		275,374		1,506		21,043		28,656		(811		)	346,199
Technology Manufacturing	11,950		1,539		76		—		1,455		(684		)	14,336
	$	87,610	$	276,913	$	1,582	$	21,043	$	30,111	$	(1,495	)	$	415,764
Weighted average remaining intangible amortization life (in months)							65		81		80

2016 Acquisitions



Property Type	Amount (in millions)
Land Parcels ⁽¹⁾	$	47.6


(1)	Represents currently vacant land which is not included in our operating property count. We completed four acquisitions of land parcels in the three months ended September 30, 2016 in Northern Virginia, Dallas and Chicago. Excludes capitalized closing costs on land acquisitions.

Pro Forma Financial Information

The pro forma adjustments primarily relate to transaction expenses, depreciation expense on acquired buildings and improvements, amortization of acquired intangibles, and estimated interest expense related to financing transactions, the proceeds of which were used to fund the repayment of DFT debt in connection with the DFT merger.



Digital Realty Trust, Inc.	Pro forma (unaudited)
	(in thousands, except per share data)
	Year Ended December 31,
	2017		2016
Total revenue	$	2,860,454	$	2,670,914
Net income available to common stockholders ⁽¹⁾	$	51,717	$	99,653
Income per share, diluted ⁽²⁾	$	0.25	$	0.51



Digital Realty Trust, L.P.	Pro forma (unaudited)
	(in thousands, except per unit data)
	Year Ended December 31,
	2017		2016
Total revenue	$	2,860,454	$	2,670,914
Net income available to common unitholders ⁽¹⁾	$	53,786	$	103,639
Income per unit, diluted ⁽²⁾	$	0.25	$	0.51


(1)	Pro forma net income available to common stockholders was adjusted to exclude $43.0 million of merger-related costs incurred by the Company during the year ended December 31, 2017 and to include these charges in 2016.


(2)	Adjusted to give effect to the issuance of approximately 43.2 million shares of Digital Realty Trust, Inc. common stock in the DFT merger.