Digital Realty Reports First Quarter 2019 Results

SAN FRANCISCO, April 25, 2019 /PRNewswire/ -- Digital Realty (NYSE: DLR), a leading global provider of data center, colocation and interconnection solutions, announced today financial results for the first quarter of 2019. All per-share results are presented on a fully-diluted share and unit basis.

Highlights

    --  Reported net income available to common stockholders of $0.46 per share
        in 1Q19, compared to $0.42 in 1Q18
    --  Reported FFO per share of $1.92 in 1Q19, compared to $1.61 in 1Q18
    --  Reported core FFO per share of $1.73 in 1Q19, compared to $1.63 in 1Q18
    --  Signed total bookings during 1Q19 expected to generate $50 million of
        annualized GAAP rental revenue, including $9 million from Ascenty (at
        100% share) and a $7 million contribution from interconnection
    --  Reiterated 2019 core FFO per share outlook of $6.60 - $6.70

Financial Results

Digital Realty reported revenues for the first quarter of 2019 of $815 million, a 5% increase from the previous quarter and a 9% increase from the same quarter last year.

The company delivered first quarter of 2019 net income of $121 million, and net income available to common stockholders of $96 million, or $0.46 per diluted share, compared to $0.15 per diluted share in the previous quarter and $0.42 per diluted share in the same quarter last year.

Digital Realty generated first quarter of 2019 adjusted EBITDA of $483 million, a 4% increase from the previous quarter and a 6% increase over the same quarter last year.

The company reported first quarter of 2019 funds from operations of $417 million, or $1.92 per share, compared to $1.54 per share in the previous quarter and $1.61 per share in the same quarter last year.

Excluding certain items that do not represent core expenses or revenue streams, Digital Realty delivered first quarter of 2019 core FFO per share of $1.73, a 3% increase from $1.68 per share in the previous quarter, and a 6% increase from $1.63 per share in the same quarter last year.

Leasing Activity

"In the first quarter, we signed total bookings expected to generate $50 million of annualized GAAP rental revenue, including $9 million from Ascenty along with a $7 million contribution from interconnection," said Chief Executive Officer A. William Stein. "We delivered solid execution against our strategic plan, extending our global platform, strengthening our balance sheet and capitalizing on our competitive advantages to capture robust and diverse enterprise demand across geographic regions. Given the resiliency of our business and our balance sheet, we believe we are well positioned to continue to deliver sustainable growth for customers, shareholders and employees, into the second half of 2019 and beyond."

The weighted-average lag between leases signed during the first quarter of 2019 and the contractual commencement date was two months.

In addition to new leases signed, Digital Realty also signed renewal leases representing $116 million of annualized GAAP rental revenue during the quarter. Rental rates on renewal leases signed during the first quarter of 2019 rolled down 6.9% on a cash basis and up 7.1% on a GAAP basis.

New leases signed during the first quarter of 2019 are summarized by region and product type as follows:


                                   Annualized GAAP


                                      Base Rent                        GAAP Base Rent                       GAAP Base Rent


                 North America     (in thousands)  Square Feet         per Square Foot Megawatts    per Kilowatt




     Turn-Key Flex                        $13,578             109,551          $124           11.3           $100


      Powered Base Building                  4,854              51,615            94



     Colocation                             5,322              22,743           234            1.7            261



     Non-Technical                            206              69,486             3



     
              Total                     $23,960             253,395           $95           13.0           $121




                 Europe (1)



     Turn-Key Flex                         $5,168              34,461          $150            3.2           $136



     Colocation                             1,264               2,261           559            0.3            314



     Non-Technical                             32                 369            86



     
                Total                    $6,464              37,091          $174            3.5           $153




                 Asia Pacific (1)



     Turn-Key Flex                         $3,196              15,716          $203            1.5           $178



     Non-Technical                             83               1,646            50



     
                Total                    $3,279              17,362          $189            1.5           $178




                 South America (1)          $8,622                 N/A          N/A           N/A           N/A




                 Interconnection            $7,460                 N/A          N/A           N/A           N/A




                 Grand Total               $49,785             307,848          $109           18.0           $132




              Note:                Totals may not foot due to
                                     rounding differences.



              (1)                 Based on quarterly average
                                     exchange rates during the
                                     three months ended March 31,
                                     2019.

Investment Activity

During the first quarter of 2019, Digital Realty closed the previously announced joint venture with Brookfield Infrastructure, an affiliate of Brookfield Asset Management, one of the largest owners and operators of infrastructure assets globally. Brookfield invested approximately $700 million in exchange for approximately 49% of the total equity interests in the joint venture which owns and operates Ascenty, the leading data center provider in Brazil.

During the first quarter of 2019, Digital Realty closed the previously announced 30-year ground lease with Jurong Town Council for two adjacent land parcels in Singapore totaling three acres for an upfront payment of approximately $6 million. These parcels are located less than one block from the company's existing Loyang Way data center, and are expected to support the development of up to 40 megawatts of critical power. Commencement of development will be subject to market demand and delivery will be phased to meet future growth requirements upon build-out and lease-up of the company's existing Loyang Way data center.

As previously disclosed, MC Digital Realty, a 50/50 joint venture between Mitsubishi Corporation and Digital Realty, reached an agreement during the first quarter of 2019 to acquire a five-acre land parcel in Tokyo. The site is located at the center of the Inzai data center cluster, one of the highest-density areas in Japan with a well-established utility and connectivity infrastructure, and home to leading global cloud providers and financial institutions. Demolition of the existing structure on the site will begin immediately after closing and data center development is expected to commence in 2020, subject to planning approvals. The initial facility is expected to deliver up to 35.6 megawatts of total IT capacity. The Tokyo land parcel acquisition is expected to close later this year and is subject to customary closing conditions.

Digital Realty participated in Megaport's March 2019 equity offering, investing approximately $2.6 million to maintain a 7.3% ownership stake.

Balance Sheet

Digital Realty had approximately $10.3 billion of total debt outstanding as of March 31, 2019, comprised of $10.2 billion of unsecured debt and approximately $0.1 billion of secured debt. At the end of the first quarter of 2019, net debt-to-adjusted EBITDA was 5.5x, debt-plus-preferred-to-total enterprise value was 31.2% and fixed charge coverage was 3.6x. Pro forma for de-consolidation of the Ascenty joint venture with Brookfield and settlement of the $1.1 billion forward equity offering, net debt-to-adjusted EBITDA was 5.1x and fixed charge coverage was 4.1x.

During the first quarter of 2019, Digital Realty closed an EUR850 million (approximately $970 million) Euro-denominated green bond offering of seven-year senior unsecured notes at 2.500%. In February 2019, Digital Realty raised an additional EUR225 million (approximately $256 million) of Euro-denominated green bonds due 2026.

During the first quarter of 2019, Digital Realty redeemed all of its outstanding 5.875% senior notes due 2020. Approximately 70% of the notes were purchased through a tender offer at a tender price of $1,022.81 per $1,000 principal amount, while the remaining 30% were redeemed through a call notice delivered in accordance with the terms of the indenture governing the notes.

During the first quarter of 2019, Digital Realty also issued £150 million (approximately $200 million) of pounds sterling-denominated 3.750% guaranteed notes due 2030 as additional notes under the indenture dated October 17, 2018, under which Digital Realty previously issued £400,000,000 (approximately $530 million) of its 3.750% guaranteed notes due 2030.

Separately, Digital Realty closed an offering of 8,400,000 shares of 5.850% Series K Cumulative Redeemable Preferred Stock (including 400,000 shares from the partial exercise of the underwriters' over-allotment option) at a price of $25.00 per share, generating gross proceeds of approximately $210 million.

Subsequent to quarter-end, Digital Realty redeemed all 14.6 million shares of its 7.375% Series H Cumulative Redeemable Preferred Stock.

2019 Outlook

Digital Realty reiterated its 2019 core FFO per share outlook of $6.60 - $6.70. The assumptions underlying this guidance are summarized in the following table.


                                                 
              
                As of        
              
                As of       
              
                As of


                   Top-Line and Cost
                    Structure             
           
                January 8, 2019 
          
                February 5, 2019 
           
                April 25, 2019


         Total revenue                          
              $3.2 - $3.3 billion       
              $3.2 - $3.3 billion      
              $3.2 - $3.3 billion


         Net non-cash rent
          adjustments (1)                        
              ($5 - $15 million)        
              ($5 - $15 million)       
              ($5 - $15 million)


         Adjusted EBITDA margin                                  57.0% - 59.0%                       57.0% - 59.0%                      57.0% - 59.0%


         G&A margin                                                6.0% - 7.0%                         6.0% - 7.0%                        6.0% - 7.0%




                   Internal Growth


         Rental rates on
          renewal leases


            Cash basis                        
            Down high-single-digits     
            Down high-single-digits    
            Down high-single-digits


            GAAP basis                            
              Slightly positive         
              Slightly positive        
              Slightly positive


         Year-end portfolio
          occupancy                                      
              +/- 50 bps                
              +/- 50 bps               
              +/- 50 bps


         "Same-capital" cash
          NOI growth (2)                                              +/- 2.0%                            +/- 2.0%                     -2.0% to -4.0%




         Foreign Exchange Rates


            U.S. Dollar /Pound
             Sterling                                 
              $1.20 - $1.30             
              $1.20 - $1.30            
              $1.20 - $1.30


            U.S. Dollar /Euro                         
              $1.10 - $1.20             
              $1.10 - $1.20            
              $1.10 - $1.20




                   External Growth


         Development



        CapEx                                  
              $1.2 - $1.4 billion       
              $1.2 - $1.4 billion      
              $1.2 - $1.4 billion


         Average stabilized
          yields                                                  9.0% - 12.0%                        9.0% - 12.0%                       9.0% - 12.0%


         Enhancements and other
          non-recurring CapEx
          (3)                                    
              $30 - $40 million         
              $30 - $40 million        
              $30 - $40 million


         Recurring CapEx +
          capitalized leasing
          costs (4)                             
              $145 - $155 million       
              $145 - $155 million      
              $145 - $155 million




                   Balance Sheet


          Long-term debt
           issuance


         Dollar amount                          
              $0.5 - $1.0 billion       
              $1.0 - $1.5 billion      
              $1.5 - $2.0 billion



        Pricing                                                 3.50% - 5.00%                       2.50% - 5.00%                      2.75% - 3.75%



        Timing                                   
              Early-to-mid 2019         
              Early-to-mid 2019        
              Early-to-mid 2019






                   Net income per diluted
                    share                   
           
                $1.40 - $1.45   
           
                $1.40 - $1.45  
           
                $1.65 - $1.70


      Real estate
       depreciation and
       (gain) /loss on sale                           
              $5.15 - $5.15             
              $5.15 - $5.15            
              $5.00 - $5.10


                   Funds From Operations
                    /share (NAREIT-
                    Defined)                
           
                $6.55 - $6.60   
           
                $6.55 - $6.60  
           
                $6.65 - $6.80


      Non-core expenses and
       revenue streams                                
              $0.05 - $0.10             
              $0.05 - $0.10          
              ($0.05 - $0.10)


                   Core Funds From
                    Operations /share       
           
                $6.60 - $6.70   
           
                $6.60 - $6.70  
           
                $6.60 - $6.70


      Foreign currency
       translation
       adjustments                                    
              $0.05 - $0.15             
              $0.05 - $0.15            
              $0.05 - $0.15


                   Constant-Currency
                    Core FFO /share         
           
                $6.65 - $6.85   
           
                $6.65 - $6.85  
           
                $6.65 - $6.85




              (1)              Net non-cash rent adjustments
                                  represent the sum of straight-
                                  line rental revenue and straight-
                                  line rent expense, as well as the
                                  amortization of above- and below-
                                  market leases (i.e., FAS 141
                                  adjustments).



              (2)              The "same-capital" pool includes
                                  properties owned as of December
                                  31, 2017 with less than 5% of
                                  total rentable square feet under
                                  development.  It also excludes
                                  properties that were undergoing,
                                  or were expected to undergo,
                                  development activities in 2018-
                                  2019, properties classified as
                                  held for sale, and properties sold
                                  or contributed to joint ventures
                                  for all periods presented.



              (3)              Other non-recurring CapEx
                                  represents costs incurred to
                                  enhance the capacity or
                                  marketability of operating
                                  properties, such as network fiber
                                  initiatives and software
                                  development costs.



              (4)              Recurring CapEx represents non-
                                  incremental improvements required
                                  to maintain current revenues,
                                  including second-generation
                                  tenant improvements and leasing
                                  commissions.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures, including FFO, core FFO, and Adjusted EBITDA. A reconciliation from U.S. GAAP net income available to common stockholders to FFO, a reconciliation from FFO to core FFO, and definitions of FFO, and core FFO are included as an attachment to this document. A reconciliation from U.S. GAAP net income available to common stockholders to Adjusted EBITDA, a definition of Adjusted EBITDA and definitions of net debt-to-Adjusted EBITDA, debt-plus-preferred-to-total enterprise value, cash NOI, and fixed charge coverage ratio are included as an attachment to this document.

Investor Conference Call

Prior to Digital Realty's investor conference call at 5:30 p.m. EDT / 2:30 p.m. PDT on April 25, 2019, a presentation will be posted to the Investors section of the company's website at http://investor.digitalrealty.com. The presentation is designed to accompany the discussion of the company's first quarter of 2019 financial results and operating performance. The conference call will feature Chief Executive Officer A. William Stein and Chief Financial Officer Andrew P. Power.

To participate in the live call, investors are invited to dial (888) 317-6003 (for domestic callers) or (412) 317-6061 (for international callers) and reference the conference ID# 3463240 at least five minutes prior to start time. A live webcast of the call will be available via the Investors section of Digital Realty's website at http://investor.digitalrealty.com.

Telephone and webcast replays will be available after the call until May 31, 2019. The telephone replay can be accessed by dialing (877) 344-7529 (for domestic callers) or (412) 317-0088 (for international callers) and providing the conference ID# 10129308. The webcast replay can be accessed on Digital Realty's website.

About Digital Realty

Digital Realty supports the data center, colocation and interconnection strategies of more than 2,300 firms across its secure, network-rich portfolio of data centers located throughout North America, Europe, Latin America, Asia and Australia. Digital Realty's clients include domestic and international companies of all sizes, ranging from cloud and information technology services, communications and social networking to financial services, manufacturing, energy, healthcare, and consumer products.

Contact Information

Andrew P. Power
Chief Financial Officer
Digital Realty
(415) 738-6500

John J. Stewart / Nina Bari
Investor Relations
Digital Realty
(415) 738-6500



       
                Consolidated Quarterly Statements of Operations



       
                Unaudited and in Thousands, Except Share and Per Share Data

    ---



                                                                                             
     
          Three Months Ended


                                                                         31-Mar-19 31-Dec-18      30-Sep-18              30-Jun-18 31-Mar-18

                                                                                                                                         ---

        Rental revenues                                                   $585,425                  $555,816                          $541,073    $534,556     $530,925


        Tenant reimbursements -
         Utilities                                                         102,569                   102,641                           105,822     100,084       98,576


        Tenant reimbursements -
         Other                                                              55,868                    53,090                            57,282      55,639       51,503


        Interconnection & other                                             68,168                    63,803                            62,760      61,770       61,373



       Fee income                                                           1,921                     2,896                             1,469       2,343        1,133



       Other                                                                  564                        21                               518         527          858


                     Total Operating Revenues                             $814,515                  $778,267                          $768,924    $754,919     $744,368





       Utilities                                                         $124,334                  $122,108                          $127,239    $115,470     $112,230


        Rental property
         operating                                                         130,620                   133,024                           118,732     114,852      113,410


        Property taxes                                                      37,315                    32,098                            34,871      27,284       35,263



       Insurance                                                            2,991                     2,412                             2,653       2,606        3,731


        Depreciation &
         amortization                                                      311,486                   299,362                           293,957     298,788      294,789


        General & administration                                            51,976                    38,801                            40,997      44,277       36,289


        Severance, equity
         acceleration, and legal
         expenses                                                            1,483                       602                               645       1,822          234


        Transaction and
         integration expenses                                                2,494                    25,917                             9,626       5,606        4,178


        Impairment of
         investments in real
         estate                                                              5,351


        Other expenses                                                       4,922                     1,096                             1,139         152          431


                     Total Operating Expenses                             $672,972                  $655,420                          $629,859    $610,857     $600,555




                     Operating Income                                     $141,543                  $122,847                          $139,065    $144,062     $143,813




        Equity in earnings of
         unconsolidated joint
         venture                                                            $9,217                    $9,245                            $8,886      $7,438       $7,410


        Gain on sale /
         deconsolidation                                                    67,497                         7                            26,577      14,192       39,273


        Interest and other
         income                                                             21,444                     1,106                             (981)      3,398         (42)


        Interest (expense)                                               (101,552)                 (84,883)                         (80,851)   (78,810)    (76,985)


        Tax benefit (expense)                                              (4,266)                    5,843                           (2,432)    (2,121)     (3,374)


        Loss from early
         extinguishment of debt                                           (12,886)                  (1,568)


                     Net Income                                           $120,997                   $52,597                           $90,264     $88,159     $110,095




        Net income attributable
         to noncontrolling
         interests                                                         (4,185)                  (1,038)                          (2,667)    (2,696)     (3,468)


                     Net Income Attributable
                      to Digital Realty
                      Trust, Inc.                                         $116,812                   $51,559                           $87,597     $85,463     $106,627




        Preferred stock
         dividends, including
         undeclared dividends                                             (20,943)                 (20,329)                         (20,329)   (20,329)    (20,329)




                     Net Income Available to
                      Common Stockholders                                  $95,869                   $31,230                           $67,268     $65,134      $86,298




        Weighted-average shares
         outstanding - basic                                           207,809,383               206,345,138                       206,118,472 205,956,005  205,714,173


        Weighted-average shares
         outstanding - diluted                                         208,526,249               207,113,100                       206,766,256 206,563,079  206,507,476


        Weighted-average fully
         diluted shares and
         units                                                         217,756,161               215,417,085                       214,937,168 214,895,273  214,802,763




        Net income per share -
         basic                                                               $0.46                     $0.15                             $0.33       $0.32        $0.42


        Net income per share -
         diluted                                                             $0.46                     $0.15                             $0.33       $0.32        $0.42



       
                Funds From Operations and Core Funds From Operations



       
                Unaudited and in Thousands, Except Per Share Data

    ---



                                                                                          
     
        Three Months Ended


                     Reconciliation of Net
                      Income to Funds From
                      Operations (FFO)                                31-Mar-19 31-Dec-18     30-Sep-18             30-Jun-18 31-Mar-18

    ---                                                                                                                             ---



                     Net Income Available
                      to Common
                      Stockholders                                      $95,869                  $31,230                          $67,268     $65,134      $86,298



       Adjustments:


        Non-controlling
         interests in
         operating partnership                                            4,300                    1,300                            2,700       2,700        3,480


        Real estate related
         depreciation &
         amortization (1)                                               307,864                  295,724                          290,757     295,750      291,686


        Unconsolidated JV real
         estate related
         depreciation &
         amortization                                                     3,851                    3,615                            3,775       3,722        3,476


        (Gain) on real estate
         transactions                                                                               (7)                        (26,577)   (14,192)    (39,273)


        Impairment of
         investments in real
         estate                                                           5,351


                     Funds From Operations                             $417,235                 $331,862                         $337,923    $353,114     $345,667




                     Funds From Operations
                      -diluted                                         $417,235                 $331,862                         $337,923    $353,114     $345,667




        Weighted-average
         shares and units
         outstanding - basic                                            217,039                  214,649                          214,289     214,288      214,009


        Weighted-average
         shares and units
         outstanding -
         diluted (2)                                                    217,756                  215,417                          214,937     214,895      214,803




                     Funds From Operations
                      per share -basic                                    $1.92                    $1.55                            $1.58       $1.65        $1.62




                     Funds From Operations
                      per share -diluted
                      (2)                                                $1.92                    $1.54                            $1.57       $1.64        $1.61






                                                                                          
     
        Three Months Ended


                     Reconciliation of FFO
                      to Core FFO                                     31-Mar-19 31-Dec-18     30-Sep-18             30-Jun-18 31-Mar-18

    ---                                                                                                                             ---



                     Funds From Operations
                      -diluted                                         $417,235                 $331,862                         $337,923    $353,114     $345,667



       Adjustments:


        Termination fees and
         other non-core
         revenues (3)                                                  (14,445)                    (21)                           (518)    (3,663)       (858)


        Transaction and
         integration expenses                                             2,494                   25,917                            9,626       5,606        4,178


        Loss from early
         extinguishment of
         debt                                                            12,886                    1,568


        Severance, equity
         acceleration, and
         legal expenses (4)                                               1,483                      602                              645       1,822          234


        Loss on FX revaluation                                            9,604


        Gain on contribution
         to unconsolidated
         joint venture, net of
         related tax                                                   (58,497)


        Other non-core
         expense adjustments                                              4,922                    1,471                            2,269         152          431


                     Core Funds From
                      Operations -diluted                              $375,682                 $361,399                         $349,945    $357,031     $349,652




        Weighted-average
         shares and units
         outstanding -
         diluted (2)                                                    217,756                  215,417                          214,937     214,895      214,803




                     Core Funds From
                      Operations per share
                      -diluted (2)                                        $1.73                    $1.68                            $1.63       $1.66        $1.63






        (1)   Real Estate
         Related Depreciation
         & Amortization:                                                                  
     
        Three Months Ended


                                                                      31-Mar-19 31-Dec-18     30-Sep-18             30-Jun-18 31-Mar-18

                                                                                                                                    ---



        Depreciation &
         amortization per
         income statement                                              $311,486                 $299,362                         $293,957    $298,788     $294,789


        Non-real estate
         depreciation                                                   (3,622)                 (3,638)                         (3,200)    (3,038)     (3,103)




                     Real Estate Related
                      Depreciation &
                      Amortization                                     $307,864                 $295,724                         $290,757    $295,750     $291,686




              (2)              For all periods presented, we have
                                  excluded the effect of dilutive
                                  series C, series G, series H,
                                  series I, series J, and series K
                                  preferred stock, as applicable,
                                  that may be converted into common
                                  stock upon the occurrence of
                                  specified change in control
                                  transactions as described in the
                                  articles supplementary governing
                                  the series C, series G, series H,
                                  series I, series J, and series K
                                  preferred stock, as applicable,
                                  which we consider highly
                                  improbable.  See above for
                                  calculations of diluted FFO
                                  available to common stockholders
                                  and unitholders and the share count
                                  detail section of the
                                  reconciliation of core FFO to AFFO
                                  for calculations of weighted
                                  average common stock and units
                                  outstanding.



              (3)              Includes lease termination fees and
                                  certain other adjustments that are
                                  not core to our business.



              (4)              Relates to severance and other
                                  charges related to the departure of
                                  company executives and integration-
                                  related severance.



       
                Adjusted Funds From Operations (AFFO)



       
                Unaudited and in Thousands, Except Per Share Data

    ---



                                                                                           
     
          Three Months Ended


                     Reconciliation of Core FFO
                      to AFFO                                          31-Mar-19 31-Dec-18     30-Sep-18               30-Jun-18 31-Mar-18

    ---                                                                                                                                ---



                     Core FFO available to
                      common stockholders and
                      unitholders                                       $375,682                 $361,399                           $349,945    $357,031     $349,652



       Adjustments:


        Non-real estate
         depreciation                                                      3,622                    3,638                              3,200       3,038        3,103


        Amortization of deferred
         financing costs                                                   4,493                    3,128                              3,066       2,953        3,060


        Amortization of debt
         discount/premium                                                    760                      971                                902         882          875


        Non-cash stock-based
         compensation expense                                              7,592                    5,609                              5,823       8,419        5,497


        Straight-line rental
         revenue                                                        (15,979)                (11,157)                          (10,511)    (8,489)    (10,266)


        Straight-line rental
         expense                                                           1,235                    2,052                              2,482       2,669        2,547


        Above- and below-market
         rent amortization                                                 6,210                    6,521                              6,552       6,794        6,666


        Deferred tax expense                                            (15,397)                 (8,835)                           (1,783)    (1,137)       (216)


        Leasing compensation &
         internal lease commissions
         (1)                                                              3,581                  (5,160)                           (5,153)    (5,647)     (5,047)


        Recurring capital
         expenditures (2)                                               (38,059)                (47,951)                          (22,500)   (34,447)    (27,328)




                     AFFO available to common
                      stockholders and
                      unitholders (3)                                   $333,740                 $310,215                           $332,023    $332,066     $328,543




        Weighted-average shares
         and units outstanding -
         basic                                                           217,039                  214,649                            214,289     214,288      214,009


        Weighted-average shares
         and units outstanding -
         diluted (4)                                                     217,756                  215,417                            214,937     214,895      214,803




                     AFFO per share -diluted
                      (4)                                                 $1.53                    $1.44                              $1.54       $1.55        $1.53




        Dividends per share and
         common unit                                                       $1.08                    $1.01                              $1.01       $1.01        $1.01




                     Diluted AFFO Payout Ratio                              70.5                     70.1                               65.4        65.4         66.0

                                                                               %                       %                                 %          %           %






                                                                                           
     
          Three Months Ended


                     Share Count Detail                                31-Mar-19 31-Dec-18     30-Sep-18               30-Jun-18 31-Mar-18

    ---                                                                                                                                ---



                     Weighted Average Common
                      Stock and Units
                      Outstanding                                        217,039                  214,649                            214,289     214,288      214,009


        Add: Effect of dilutive
         securities                                                          717                      768                                648         607          794




                     Weighted Avg. Common Stock
                      and Units Outstanding -
                      diluted                                            217,756                  215,417                            214,937     214,895      214,803




              (1)              The company adopted ASC 842 in the
                                  first quarter of 2019.



              (2)              Recurring capital expenditures
                                  represent non-incremental building
                                  improvements required to maintain
                                  current revenues, including second-
                                  generation tenant improvements and
                                  external leasing commissions.
                                  Recurring capital expenditures do
                                  not include acquisition costs
                                  contemplated when underwriting the
                                  purchase of a building, costs which
                                  are incurred to bring a building up
                                  to Digital Realty's operating
                                  standards, or internal leasing
                                  commissions.



              (3)              For a definition and discussion of
                                  AFFO, see the definitions section.
                                  For a reconciliation of net income
                                  available to common stockholders to
                                  FFO and core FFO, see above.



              (4)              For all periods presented, we have
                                  excluded the effect of dilutive
                                  series C, series G, series H,
                                  series I, series J, and series K
                                  preferred stock, as applicable,
                                  that may be converted into common
                                  stock upon the occurrence of
                                  specified change in control
                                  transactions as described in the
                                  articles supplementary governing
                                  the series C, series G, series H,
                                  series I, series J, and series K
                                  preferred stock, as applicable,
                                  which we consider highly
                                  improbable. See above for
                                  calculations of diluted FFO
                                  available to common stockholders
                                  and unitholders and for
                                  calculations of weighted average
                                  common stock and units outstanding.



       
                Consolidated Balance Sheets



       
                Unaudited and in Thousands, Except Share and Per Share Data

    ---



                                                                        31-Mar-19 31-Dec-18   30-Sep-18  30-Jun-18   31-Mar-18

                                                                                                                           ---


       
                Assets



       Investments in real estate:



       Real estate                                                   $16,988,322            $17,055,017             $16,062,402    $15,969,938     $15,654,932


        Construction in progress                                        1,584,327              1,621,927               1,464,010      1,323,998       1,470,065


        Land held for future
         development                                                      163,081                162,941                 284,962        261,368         236,415


                     Investments in real
                      estate                                          $18,735,730            $18,839,885             $17,811,374    $17,555,304     $17,361,412


        Accumulated depreciation
         and amortization                                             (4,124,002)           (3,935,267)            (3,755,596)   (3,588,124)    (3,439,050)


                     Net Investments in
                      Properties                                      $14,611,728            $14,904,618             $14,055,778    $13,967,180     $13,922,362


        Investment in
         unconsolidated joint
         ventures                                                         930,326                175,108                 169,919        167,306         167,564


                     Net Investments in Real
                      Estate                                          $15,542,054            $15,079,726             $14,225,697    $14,134,486     $14,089,926




        Cash and cash equivalents                                        $123,879               $126,700                 $46,242        $17,589         $22,370


        Accounts and other
         receivables (1)                                                  328,009                299,621                 308,709        282,287         309,328



       Deferred rent                                                     479,640                463,248                 454,412        445,766         442,887


        Acquired in-place lease
         value, deferred leasing
         costs and other real
         estate intangibles, net                                        2,580,624              3,144,395               2,734,158      2,823,275       2,928,566


        Acquired above-market
         leases, net                                                      106,044                119,759                 135,127        150,084         165,568



       Goodwill                                                        3,358,463              4,348,007               3,373,342      3,378,325       3,405,110


        Restricted cash                                                    10,130                  8,522                   8,068          9,443           7,330


        Assets associated with
         real estate held for
         sale                                                                                                                                        41,707


        Operating lease right-
         of-use assets (2)                                                660,586



       Other assets                                                      152,638                176,717                 176,355        170,168         169,125


                     Total Assets                                     $23,342,067            $23,766,695             $21,462,110    $21,411,423     $21,581,917




                     Liabilities and Equity


        Global unsecured
         revolving credit
         facility                                                        $842,975             $1,647,735                $590,289       $466,971        $952,121


        Unsecured term loans                                              807,726              1,178,904               1,352,969      1,376,784       1,428,498


        Unsecured senior notes,
         net of discount                                                8,523,462              7,589,126               7,130,541      7,156,084       6,660,727


        Secured debt, net of
         premiums                                                         105,493                685,714                 106,072        106,245         106,366


        Operating lease
         liabilities (2)                                                  725,470


        Accounts payable and
         other accrued
         liabilities                                                      922,571              1,164,509               1,059,355      1,031,794       1,012,490


        Accrued dividends and
         distributions                                                                          217,241


        Acquired below-market
         leases                                                           192,667                200,113                 208,202        216,520         225,674


        Security deposits and
         prepaid rent                                                     221,526                209,311                 233,667        207,292         207,859


        Liabilities associated
         with assets held for
         sale                                                                                                                                         1,767


                     Total Liabilities                                $12,341,890            $12,892,653             $10,681,095    $10,561,690     $10,595,502




        Redeemable non-
         controlling interests -
         operating partnership                                             17,678                 15,832                  17,553         52,805          49,871





       
                Equity


        Preferred Stock:  $0.01 par value per
         share, 110,000,000 shares authorized:


        Series C Cumulative
         Redeemable Preferred
         Stock (3)                                                       $219,250               $219,250                $219,250       $219,250        $219,250


        Series G Cumulative
         Redeemable Preferred
         Stock (4)                                                        241,468                241,468                 241,468        241,468         241,468


        Series H Cumulative
         Redeemable Preferred
         Stock (5)                                                        353,290                353,290                 353,290        353,290         353,290


        Series I Cumulative
         Redeemable Preferred
         Stock (6)                                                        242,012                242,012                 242,012        242,012         242,012


        Series J Cumulative
         Redeemable Preferred
         Stock (7)                                                        193,540                193,540                 193,540        193,540         193,540


        Series K Cumulative
         Redeemable Preferred
         Stock (8)                                                        203,423


        Common Stock: $0.01 par
         value per share,
         310,000,000 shares
         authorized (9)                                                     2,066                  2,051                   2,049          2,047           2,045


        Additional paid-in
         capital                                                       11,492,766             11,355,751              11,333,035     11,310,132      11,285,611


        Dividends in excess of
         earnings                                                     (2,767,708)           (2,633,071)            (2,455,189)   (2,314,291)    (2,177,269)


        Accumulated other
         comprehensive (loss),
         net                                                             (91,699)             (115,647)              (103,201)     (107,070)      (106,096)


                     Total Stockholders'
                      Equity                                          $10,088,408             $9,858,644             $10,026,254    $10,140,378     $10,253,851




                     Noncontrolling Interests


        Noncontrolling interest
         in operating partnership                                        $772,931               $906,510                $671,269       $654,261        $680,400


        Noncontrolling interest
         in consolidated joint
         ventures                                                         121,160                 93,056                  65,939          2,289           2,293




                     Total Noncontrolling
                      Interests                                          $894,091               $999,566                $737,208       $656,550        $682,693




                     Total Equity                                     $10,982,499            $10,858,210             $10,763,462    $10,796,928     $10,936,544




                     Total Liabilities and
                      Equity                                          $23,342,067            $23,766,695             $21,462,110    $21,411,423     $21,581,917




              (1)              Net of allowance for doubtful
                                  accounts of $16,910 and $11,554,
                                  as of March 31, 2019 and December
                                  31, 2018, respectively.



              (2)              Adoption of the new lease
                                  accounting standard required that
                                  we adjust the consolidated balance
                                  sheet as of March 31, 2019, to
                                  include the recognition of
                                  additional right-of-use assets
                                  and lease liabilities for
                                  operating leases. See the filed
                                  Form 10-Q for additional
                                  information.



              (3)              Series C Cumulative Redeemable
                                  Perpetual Preferred Stock, 6.625%,
                                  $201,250 and $201,250 liquidation
                                  preference, respectively ($25.00
                                  per share), 8,050,000 and
                                  8,050,000 shares issued and
                                  outstanding as of March 31, 2019
                                  and December 31, 2018,
                                  respectively.



              (4)              Series G Cumulative Redeemable
                                  Preferred Stock, 5.875%, $250,000
                                  and $250,000 liquidation
                                  preference, respectively ($25.00
                                  per share), 10,000,000 and
                                  10,000,000 shares issued and
                                  outstanding as of March 31, 2019
                                  and December 31, 2018,
                                  respectively.



              (5)              Series H Cumulative Redeemable
                                  Preferred Stock, 7.375%, $365,000
                                  and $365,000 liquidation
                                  preference, respectively ($25.00
                                  per share), 14,600,000 and
                                  14,600,000 shares issued and
                                  outstanding as of March 31, 2019
                                  and December 31, 2018,
                                  respectively.  Redeemed April 1,
                                  2019.



              (6)              Series I Cumulative Redeemable
                                  Preferred Stock, 6.350%, $250,000
                                  and $250,000 liquidation
                                  preference, respectively ($25.00
                                  per share), 10,000,000 and
                                  10,000,000 shares issued and
                                  outstanding as of March 31, 2019
                                  and December 31, 2018,
                                  respectively.



              (7)              Series J Cumulative Redeemable
                                  Preferred Stock, 5.250%, $200,000
                                  and $200,000 liquidation
                                  preference, respectively ($25.00
                                  per share), 8,000,000 and
                                  8,000,000 shares issued and
                                  outstanding as of March 31, 2019
                                  and December 31, 2018,
                                  respectively.



              (8)              Series K Cumulative Redeemable
                                  Preferred Stock, 5.850%, $210,000
                                  and $0 liquidation preference,
                                  respectively ($25.00 per share),
                                  8,400,000 and 0 shares issued and
                                  outstanding as of March 31, 2019
                                  and December 31, 2018,
                                  respectively.



              (9)              Common Stock: 208,214,139 and
                                  206,425,656 shares issued and
                                  outstanding as of March 31, 2019
                                  and December 31, 2018,
                                  respectively.



       
                Reconciliation of Earnings Before Interest, Taxes, Depreciation & Amortization and Financial Ratios



       
                Unaudited and in Thousands

    ---



                                                                                                                                   
     
        Three Months Ended


                     Reconciliation of Earnings
                      Before Interest, Taxes,
                                Depreciation &
                                Amortization (EBITDA) (1)                            31-Mar-19                           31-Dec-18     30-Sep-18             30-Jun-18 31-Mar-18

                                                                                                                                                                             ---



                     Net Income Available to
                      Common Stockholders                                              $95,869                                            $31,230                          $67,268     $65,134      $86,298



       Interest                                                                       101,552                                             84,883                           80,851      78,810       76,985


        Loss from early
         extinguishment of debt                                                         12,886                                              1,568


        Tax (benefit) expense                                                            4,266                                            (5,843)                           2,432       2,121        3,374


        Depreciation & amortization                                                    311,486                                            299,362                          293,957     298,788      294,789


                     EBITDA                                                           $526,059                                           $411,200                         $444,508    $444,853     $461,446


        Unconsolidated JV real
         estate related
         depreciation &
         amortization                                                                    3,851                                              3,615                            3,775       3,722        3,476


        Severance, equity
         acceleration, and legal
         expenses                                                                        1,483                                                602                              645       1,822          234


        Transaction and integration
         expenses                                                                        2,494                                             25,917                            9,626       5,606        4,178


        (Gain) on sale /
         deconsolidation                                                              (67,497)                                               (7)                        (26,577)   (14,192)    (39,273)


        Impairment of investments
         in real estate                                                                  5,351


        Other non-core
         adjustments, net                                                             (13,806)                                             1,471                            2,269     (2,984)         431


        Non-controlling interests                                                        4,185                                              1,038                            2,667       2,696        3,468


        Preferred stock dividends,
         including undeclared
         dividends                                                                      20,943                                             20,329                           20,329      20,329       20,329


                     Adjusted EBITDA                                                  $483,063                                           $464,165                         $457,242    $461,852     $454,289




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

Definitions

Funds From Operations (FFO):
We calculate funds from operations, or FFO, in accordance with the standards established by the National Association of Real Estate Investment Trusts, or Nareit, in the Nareit Funds From Operations White Paper - 2018 Restatement. FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from real estate transactions, impairment of investment in real estate, real estate related depreciation and amortization (excluding amortization of deferred financing costs), unconsolidated JV real estate related depreciation & amortization, non-controlling interests in operating partnership and after adjustments for unconsolidated partnerships and joint ventures. Management uses FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization and gains and losses from property dispositions and after adjustments for unconsolidated partnerships and joint ventures, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our data centers that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our data centers, all of which have real economic effect and could materially impact our financial condition and results from operations, the utility of FFO as a measure of our performance is limited. Other REITs may not calculate FFO in accordance with the NAREIT definition and, accordingly, our FFO may not be comparable to other REITs' FFO. FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.

Core Funds from Operations (Core FFO):
We present core funds from operations, or core FFO, as a supplemental operating measure because, in excluding certain items that do not reflect core revenue or expense streams, it provides a performance measure that, when compared year over year, captures trends in our core business operating performance. We calculate core FFO by adding to or subtracting from FFO (i) termination fees and other non-core revenues, (ii) transaction and integration expenses, (iii) loss from early extinguishment of debt, (iv) severance, equity acceleration, and legal expenses, (v) loss on FX revaluation, (vi) gain on contribution to unconsolidated joint venture, net of related tax, and (vii) other non-core expense adjustments. Because certain of these adjustments have a real economic impact on our financial condition and results from operations, the utility of core FFO as a measure of our performance is limited. Other REITs may calculate core FFO differently than we do and accordingly, our core FFO may not be comparable to other REITs' core FFO. Core FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.

Adjusted Funds from Operations (AFFO):
We present adjusted funds from operations, or AFFO, as a supplemental operating measure because, when compared year over year, it assesses our ability to fund dividend and distribution requirements from our operating activities. We also believe that, as a widely recognized measure of the operations of REITs, AFFO will be used by investors as a basis to assess our ability to fund dividend payments in comparison to other REITs, including on a per share and unit basis. We calculate AFFO by adding to or subtracting from core FFO (i) non-real estate depreciation, (ii) amortization of deferred financing costs, (iii) amortization of debt discount/premium, (iv) non-cash stock-based compensation expense, (v) straight-line rental revenue, (vi) straight-line rental expense, (vii) above- and below-market rent amortization, (viii) deferred tax expense, (ix) leasing compensation and internal lease commissions, and (x) recurring capital expenditures. Other REITs may calculate AFFO differently than we do and accordingly, our AFFO may not be comparable to other REITs' AFFO. AFFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.

EBITDA and Adjusted EBITDA:
We believe that earnings before interest, loss from early extinguishment of debt, income taxes, and depreciation and amortization, or EBITDA, and Adjusted EBITDA (as defined below), are useful supplemental performance measures because they allow investors to view our performance without the impact of non-cash depreciation and amortization or the cost of debt and, with respect to Adjusted EBITDA, severance, equity acceleration, and legal expenses, transaction and integration expenses, (gain) loss on real estate transactions, equity in earnings adjustment for non-core items, other non-core adjustments, net, noncontrolling interests, preferred stock dividends, including undeclared dividends, and issuance costs associated with redeemed preferred stock. Adjusted EBITDA is EBITDA excluding unconsolidated joint venture real estate related depreciation & amortization, severance, equity acceleration, and legal expenses, transaction and integration expenses, gain on sale / deconsolidation, impairment of investments in real estate, other non-core adjustments, net, non-controlling interests, and preferred stock dividends, including undeclared dividends. In addition, we believe EBITDA and Adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. Because EBITDA and Adjusted EBITDA are calculated before recurring cash charges including interest expense and income taxes, exclude capitalized costs, such as leasing commissions, and are not adjusted for capital expenditures or other recurring cash requirements of our business, their utility as a measure of our performance is limited. Other REITs may calculate EBITDA and Adjusted EBITDA differently than we do and accordingly, our EBITDA and Adjusted EBITDA may not be comparable to other REITs' EBITDA and Adjusted EBITDA. Accordingly, EBITDA and Adjusted EBITDA should be considered only as supplements to net income computed in accordance with GAAP as a measure of our financial performance.

Net Operating Income (NOI) and Cash NOI:
Net operating income, or NOI, represents rental revenue, tenant reimbursement revenue and interconnection revenue less utilities expense, rental property operating expenses, property taxes and insurance expenses (as reflected in the statement of operations). NOI is commonly used by stockholders, company management and industry analysts as a measurement of operating performance of the company's rental portfolio. Cash NOI is NOI less straight-line rents and above- and below-market rent amortization. Cash NOI is commonly used by stockholders, company management and industry analysts as a measure of property operating performance on a cash basis. However, because NOI and cash NOI exclude depreciation and amortization and capture neither the changes in the value of our data centers that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our data centers, all of which have real economic effect and could materially impact our results from operations, the utility of NOI and cash NOI as measures of our performance is limited. Other REITs may calculate NOI and cash NOI differently than we do and, accordingly, our NOI and cash NOI may not be comparable to other REITs' NOI and cash NOI. NOI and cash NOI should be considered only as supplements to net income computed in accordance with GAAP as measures of our performance.

Additional Definitions

Net debt-to-Adjusted EBITDA ratio is calculated using total debt at balance sheet carrying value, plus capital lease obligations, plus our share of JV debt, less unrestricted cash and cash equivalents divided by the product of Adjusted EBITDA (inclusive of our share of JV EBITDA) multiplied by four.

Debt-plus-preferred-to-total enterprise value is mortgage debt and other loans plus preferred stock divided by mortgage debt and other loans plus the liquidation value of preferred stock and the market value of outstanding Digital Realty Trust, Inc. common stock and Digital Realty Trust, L.P. units, assuming the redemption of Digital Realty Trust, L.P. units for shares of Digital Realty Trust, Inc. common stock.

Fixed charge coverage ratio is Adjusted EBITDA divided by the sum of GAAP interest expense, capitalized interest, scheduled debt principal payments and preferred dividends. For the quarter ended March 31, 2019, GAAP interest expense was $102 million, capitalized interest was $11 million and scheduled debt principal payments and preferred dividends was $21 million.


                                                                                           
     
     Three Months Ended



       
                Reconciliation of Net Operating Income (NOI) (in thousands) 31-Mar-19      31-Dec-18         31-Mar-18

    ---




       
                Operating income                                             $141,543                          $122,847   $143,813





       Fee income                                                                 (1,921)                          (2,896)   (1,133)



       Other income                                                                 (564)                             (21)     (858)



       Depreciation and amortization                                              311,486                           299,362    294,789



       General and administrative                                                  51,976                            38,801     36,289



       Severance, equity acceleration, and legal expenses                           1,483                               602        234



       Transaction expenses                                                         2,494                            25,917      4,178



       Impairment in investments in real estate                                     5,351



       Other expenses                                                               4,922                             1,096        431





       
                Net Operating Income                                         $516,770                          $485,708   $477,743







       
                Cash Net Operating Income (Cash NOI)





       
                Net Operating Income                                         $516,770                          $485,708   $477,743





       Straight-line rental revenue                                              (15,979)                         (11,157)  (10,266)



       Straight-line rental expense                                                 1,177                             2,107      2,600



       Above- and below-market rent amortization                                    6,210                             6,521      6,666





       
                Cash Net Operating Income                                    $508,178                          $483,179   $476,743

Forward-Looking Statements

This document contains forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Such forward-looking statements include statements relating to: the Ascenty acquisition and related financings, the joint venture with Brookfield, expected physical settlement of the forward sale agreements and use of proceeds from any such settlement, our expected investment and expansion activity, supply and demand for data center and colocation space, our acquisition and disposition activity, pricing and net effective leasing economics, market dynamics and data center fundamentals, our strategic priorities, rent from leases that have been signed but have not yet commenced and other contracted rent to be received in future periods, rental rates on future leases, lag between signing and commencement, cap rates and yields, investment activity, the company's FFO, core FFO and net income, 2019 outlook and underlying assumptions, information related to trends, our strategy and plans, leasing expectations, weighted average lease terms, the exercise of lease extensions, lease expirations, debt maturities, annualized rent at expiration of leases, the effect new leases and increases in rental rates will have on our rental revenue, our credit ratings, construction and development activity and plans, projected construction costs, estimated yields on investment, expected occupancy, expected square footage and IT load capacity upon completion of development projects, 2019 backlog NOI, NAV components, and other forward-looking financial data. Such statements are based on management's beliefs and assumptions made based on information currently available to management. Such statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Some of the risks and uncertainties that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:

    --  reduced demand for data centers or decreases in information technology
        spending;
    --  decreased rental rates, increased operating costs or increased vacancy
        rates;
    --  increased competition or available supply of data center space;
    --  the suitability of our data centers and data center infrastructure,
        delays or disruptions in connectivity or availability of power, or
        failures or breaches of our physical and information security
        infrastructure or services;
    --  our dependence upon significant customers, bankruptcy or insolvency of a
        major customer or a significant number of smaller customers, or defaults
        on or non-renewal of leases by customers;
    --  breaches of our obligations or restrictions under our contracts with our
        customers;
    --  our inability to successfully develop and lease new properties and
        development space, and delays or unexpected costs in development of
        properties;
    --  the impact of current global and local economic, credit and market
        conditions;
    --  our inability to retain data center space that we lease or sublease from
        third parties;
    --  difficulty acquiring or operating properties in foreign jurisdictions;
    --  our failure to realize the intended benefits from, or disruptions to our
        plans and operations or unknown or contingent liabilities related to,
        our recent acquisitions;
    --  our failure to successfully integrate and operate acquired or developed
        properties or businesses, including Ascenty;
    --  difficulties in identifying properties to acquire and completing
        acquisitions;
    --  risks related to joint venture investments (including the joint venture
        with Brookfield), including as a result of our lack of control of such
        investments;
    --  risks associated with using debt to fund our business activities,
        including re-financing and interest rate risks, our failure to repay
        debt when due, adverse changes in our credit ratings or our breach of
        covenants or other terms contained in our loan facilities and
        agreements;
    --  our failure to obtain necessary debt and equity financing, and our
        dependence on external sources of capital;
    --  financial market fluctuations and changes in foreign currency exchange
        rates;
    --  adverse economic or real estate developments in our industry or the
        industry sectors that we sell to, including risks relating to decreasing
        real estate valuations and impairment charges and goodwill and other
        intangible asset impairment charges;
    --  our inability to manage our growth effectively;
    --  losses in excess of our insurance coverage;
    --  environmental liabilities and risks related to natural disasters;
    --  our inability to comply with rules and regulations applicable to our
        company;
    --  Digital Realty Trust, Inc.'s failure to maintain its status as a REIT
        for federal income tax purposes;
    --  Digital Realty Trust, L.P.'s failure to qualify as a partnership for
        federal income tax purposes;
    --  restrictions on our ability to engage in certain business activities;
        and
    --  changes in local, state, federal and international laws and regulations,
        including related to taxation, real estate and zoning laws, and
        increases in real property tax rates.

The risks included here are not exhaustive, and additional factors could adversely affect our business and financial performance. We discussed a number of additional material risks in our annual report on Form 10-K for the year ended December 31, 2018 and other filings with the Securities and Exchange Commission. Those risks continue to be relevant to our performance and financial condition. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We expressly disclaim any responsibility to update forward-looking statements, whether as a result of new information, future events or otherwise. Digital Realty, Digital Realty Trust, the Digital Realty logo, Turn-Key Flex and Powered Base Building are registered trademarks and service marks of Digital Realty Trust, Inc. in the United States and/or other countries.

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SOURCE Digital Realty