Equity and Accumulated Other Comprehensive Loss, Net

(a) 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 June 30, 2018 and December 31, 2017:



	June 30, 2018			December 31, 2017
	Number of units	Percentage of total		Number of units	Percentage of total
Digital Realty Trust, Inc.	206,055,117	96.0	%	205,470,300	96.0	%
Noncontrolling interests consist of:
Common units held by third parties	6,531,727	3.1	%	6,899,094	3.2	%
Incentive units held by employees and directors (see Note 14)	1,966,305	0.9	%	1,590,001	0.8	%
	214,553,149	100.0	%	213,959,395	100.0	%

Limited partners have the right to require the Operating Partnership to redeem part or all of their common units for cash based on the fair market value of an equivalent number of shares of Digital Realty Trust, Inc. common stock at the time of redemption. Alternatively, Digital Realty Trust, Inc. may elect to acquire those common units in exchange for shares of Digital Realty Trust, Inc. common stock on a one-for-one basis, subject to adjustment in the event of stock splits, stock dividends, issuance of stock rights, specified extraordinary distributions and similar events. Pursuant to authoritative accounting guidance, Digital Realty Trust, Inc. evaluated whether it controls the actions or events necessary to issue the maximum number of shares that could be required to be delivered under the share settlement of the noncontrolling Operating Partnership common and incentive units. Based on the results of this analysis, we concluded that the common units and incentive units of the Operating Partnership met the criteria to be classified within equity, except for certain common units issued to certain former unitholders in DuPont Fabros Technology, L.P. ("DFT Operating Partnership") in the DuPont Fabros Technology merger ("DFT Merger"), which are subject to certain restrictions and, accordingly, are not presented as permanent equity in the condensed consolidated balance sheet.

In connection with the initial public offering of DuPont Fabros Technology, Inc. ("DFT") in 2007, DFT, the DFT Operating Partnership and certain DFT Operating Partnership unitholders entered into a tax protection agreement to assist such unitholders in deferring certain U.S. federal income tax liabilities that may have otherwise resulted from the contribution transactions undertaken in connection with the initial public offering and the ownership of interests in the DFT Operating Partnership and to set forth certain agreements with respect to other tax matters. In connection with the DFT Merger, certain DFT Operating Partnership unitholders entered into a new tax protection agreement with Digital Realty Trust, Inc. and the Operating Partnership that replaced and superseded the DFT tax protection agreement, effective as of the closing of the DFT Merger. Pursuant to the new tax protection agreement, such DFT Operating Partnership unitholders entered into a guarantee of certain debt of a subsidiary of the Operating Partnership. The Operating Partnership must offer such DFT Operating Partnership unitholders a new guarantee opportunity in the event any guaranteed debt is repaid prior to March 1, 2023. If the Operating Partnership fails to offer the guarantee opportunity or to allocate guaranteed debt to any such DFT Operating Partnership unitholder as required under the new tax protection agreement, the Operating Partnership generally would be required to indemnify each such DFT Operating Partnership unitholder for the tax liability resulting from such failure, as determined under the new tax protection agreement.

The redemption value of the noncontrolling Operating Partnership common units and the vested incentive units was approximately $894.2 million and $887.0 million based on the closing market price of Digital Realty Trust, Inc. common stock on June 30, 2018 and December 31, 2017, respectively.

The following table shows activity for the noncontrolling interests in the Operating Partnership for the six months ended June 30, 2018:



	Common Units		Incentive Units		Total
As of December 31, 2017	6,899,094		1,590,001		8,489,095
Redemption of common units for shares of Digital Realty Trust, Inc. common stock ⁽¹⁾	(367,367	)	—		(367,367	)
Conversion of incentive units held by employees and directors for shares of Digital Realty Trust, Inc. common stock ⁽¹⁾	—		(39,272	)	(39,272	)
Incentive units issued upon achievement of market performance condition	—		326,947		326,947
Grant of incentive units to employees and directors	—		105,800		105,800
Cancellation / forfeitures of incentive units held by employees and directors	—		(17,171	)	(17,171	)
As of June 30, 2018	6,531,727		1,966,305		8,498,032


(1)	Redemption of common 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.

(b) Dividends

We have declared and paid the following dividends on our common and preferred stock for the six months ended June 30, 2018 (in thousands, except per share data):



Date dividend declared	Dividend payment date	Series C Preferred Stock		Series G Preferred Stock		Series H Preferred Stock		Series I Preferred Stock		Series J Preferred Stock		Common Stock
March 1, 2018	March 30, 2018	$	3,333	$	3,672	$	6,730	$	3,969	$	2,625	$	208,015
May 8, 2018	June 29, 2018	3,333		3,672		6,730		3,969		2,625		208,071
		$	6,666	$	7,344	$	13,460	$	7,938	$	5,250	$	416,086

Annual rate of dividend per share		$	1.65625	$	1.46875	$	1.84375	$	1.58750	$	1.31250	$	4.04000

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.

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



	Foreign currency translation adjustments			Cash flow hedge adjustments			Foreign currency net investment hedge adjustments		Accumulated other comprehensive income (loss), net
Balance as of December 31, 2017	$	(147,370	)	$	13,200		$	25,738	$	(108,432	)
Net current period change	(10,550		)	12,891			—		2,341
Reclassification to interest expense from interest rate swaps	—			(979		)	—		(979		)
Balance as of June 30, 2018	$	(157,920	)	$	25,112		$	25,738	$	(107,070	)