Digital Realty Reports Fourth Quarter 2020 Results
AUSTIN, Texas, Feb. 11, 2021 /PRNewswire/ -- Digital Realty (NYSE: DLR), a leading global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions, announced today financial results for the fourth quarter of 2020. All per-share results are presented on a fully-diluted share and unit basis.
Highlights
-- Reported net income available to common stockholders of $0.16 per share
in 4Q20, compared to net income available to common stockholders of
$1.50 in 4Q19
-- Reported FFO per share of $1.45 in 4Q20, compared to $1.62 in 4Q19
-- Reported core FFO per share of $1.61 in 4Q20, compared to $1.62 in 4Q19
-- Signed total bookings during 4Q20 expected to generate $130 million of
annualized GAAP rental revenue, including a $12 million contribution
from interconnection
-- Introduced core FFO per share outlook from $6.40-$6.50
Financial Results
Digital Realty reported revenues for the fourth quarter of 2020 of $1.1 billion, a 4% increase from the previous quarter and a 35% increase from the same quarter last year.
The company delivered fourth quarter of 2020 net income of $60 million, and net income available to common stockholders of $44 million, or $0.16 per diluted share, compared to a net loss available to common stockholders of ($0.14) per diluted share in the previous quarter and net income available to common stockholders of $1.50 per diluted share in the same quarter last year.
Digital Realty generated fourth quarter of 2020 Adjusted EBITDA of $578 million, a 2% increase from the previous quarter and a 22% increase over the same quarter last year.
The company reported fourth quarter of 2020 funds from operations of $420 million, or $1.45 per share, compared to $1.19 per share in the previous quarter and $1.62 per share in the same quarter last year.
Excluding certain items that do not represent core expenses or revenue streams, Digital Realty delivered fourth quarter of 2020 core FFO per share of $1.61, a 5% increase from $1.54 per share in the previous quarter, and a 1% decrease from $1.62 per share in the same quarter last year.
Leasing Activity
In the fourth quarter, Digital Realty signed total bookings expected to generate $130 million of annualized GAAP rental revenue, including a $12 million contribution from interconnection.
"We closed 2020 with a strong finish, delivering record bookings for the full year," said Digital Realty Chief Executive Officer A. William Stein. "This tremendous achievement is a testament to the consistent execution and growth across our global platform. Our book of business outside the Americas has expanded meaningfully, while our colocation and interconnection business represents a rapidly growing share as we continue to gain traction with enterprise customers as well as service providers. We look forward to building upon this momentum into 2021 and beyond, and we remain confident that our global platform will continue to deliver sustainable growth for all stakeholders."
The weighted-average lag between leases signed during the fourth quarter of 2020 and the contractual commencement date was nine months.
In addition to new leases signed, Digital Realty also signed renewal leases representing $156 million of annualized GAAP rental revenue during the quarter. Rental rates on renewal leases signed during the fourth quarter of 2020 rolled up 1.0% on a cash basis and up 3.4% on a GAAP basis.
New leases signed during the fourth quarter of 2020 are summarized by region as follows:
Annualized GAAP
Base Rent GAAP Base Rent GAAP Base Rent
The Americas (in thousands)
Square Feet per Square Foot
Megawatts per Kilowatt
0-1 MW $11,787 47,661 $247 4.3 $226
> 1 MW 20,285 175,729 115 19.2 88
Other (1) 611 12,931 47
Total $32,683 236,321 $138 23.6 $113
EMEA (2)
0-1 MW $12,968 55,393 $234 3.9 $274
> 1 MW 51,718 439,791 118 38.6 112
Other (1) 74 753 98
Total $64,760 495,937 $131 42.5 $127
Asia Pacific (2)
0-1 MW $6,292 18,967 $332 1.0 $525
> 1 MW 9,820 86,105 114 8.7 94
Other (1) 4,678 135,178 35
Total $20,790 240,250 $87 9.7 $138
All Regions (2)
0-1 MW $31,047 122,021 $254 9.3 $279
> 1 MW 81,824 701,625 117 66.5 103
Other (1) 5,363 148,862 36
Total $118,234 972,507 $122 75.8 $124
Interconnection $12,110 N/A N/A N/A N/A
Grand Total $130,344 972,507 $122 75.8 $124
Note: Totals may not foot due to
rounding differences.
(1) Other includes Powered Base
Building shell capacity as
well as storage and office
space within fully
improved data center
facilities.
(2) Based on quarterly average
exchange rates during the
three months ended
December 31, 2020.
Investment Activity
During the fourth quarter of 2020, Digital Realty closed on the previously announced acquisition of Lamda Hellix, the largest carrier-neutral colocation and interconnection provider in Greece.
Likewise during the fourth quarter of 2020, Digital Realty closed on the previously announced acquisition of the Neckerman expansion parcel within approximately one kilometer of the Hanauer Landstraße campus for EUR177 million, or approximately $217 million. The expansion parcel totals 107,000 square meters, will support the development of up to 180 megawatts of additional IT capacity and will be fully connected to the existing campus.
During the fourth quarter of 2020, Digital Realty acquired a building in Paris, France previously subject to a leasehold for a total purchase price of EUR6 million, or approximately $7 million. Digital Realty also sold a vacant building in Amsterdam, the Netherlands for EUR6 million, or approximately $7 million.
Balance Sheet
Digital Realty completed the following financing transactions during the fourth quarter of 2020.
-- In mid-October, Digital Realty redeemed all £300 million of its 4.750%
notes due 2023 and redeemed all $250 million of its 5.875% series G
preferred stock.
-- Subsequent to quarter-end, Digital Realty closed an offering of EUR1.0
billion, or approximately $1.2 billion, of 0.625% Euro bonds due 2031.
-- Also subsequent to quarter end, Digital Realty redeemed all $350 million
of its outstanding 2.75% notes due 2023 and repaid the entire $537
million outstanding balance on its unsecured term loan.
Digital Realty had approximately $13.3 billion of total debt outstanding as of December 31, 2020, comprised of $13.2 billion of unsecured debt and approximately $0.2 billion of secured debt. At the end of the fourth quarter of 2020, net debt-to-Adjusted EBITDA was 6.1x, debt plus-preferred-to-total enterprise value was 26.2% and fixed charge coverage was 5.1x.
COVID-19
Throughout the COVID-19 global pandemic, Digital Realty's data centers around the world have remained fully operational in accordance with business continuity and pandemic response plans, prioritizing the health and safety of employees, customers and partners while ensuring service levels are maintained. Digital Realty data centers have been deemed essential operations, allowing for critical personnel to remain in place and continue to provide services and support for customers. Construction activity has been somewhat delayed in a few markets due to government restrictions in certain locations and/or limited availability of labor. In some instances, these delays have impacted scheduled delivery dates. We are monitoring the situation closely and remain in frequent communication with customers, contractors and suppliers. We have proactively managed our supply chain, and we believe we have acquired the vast majority of the equipment needed to complete our 2021 development activities. We believe we have ample liquidity to fund our business needs, given the $109 million of cash on the balance sheet and $2.1 billion of availability under our global revolving credit facilities as of December 31, 2020. While we have not experienced any significant business disruptions from the COVID-19 pandemic to date, we cannot predict what impact the COVID-19 pandemic may have on our future financial condition, results of operations or cash flows due to numerous uncertainties.
2021 Outlook
Digital Realty introduced its 2021 core FFO per share outlook of $6.40-$6.50. The assumptions underlying the outlook are summarized in the following table.
As of
Top-Line and Cost Structure
February 11, 2021
Total revenue
$4.250 - $4.350 billion
Net non-cash rent adjustments (1)
($10) - ($15) million
Adjusted EBITDA
$2.300 - $2.350 billion
G&A
$365 - $375 million
Internal Growth
Rental rates on renewal leases
Cash basis
Slightly negative
GAAP basis
Slightly positive
Year-end portfolio occupancy (2) 84.0% - 85.0%
"Same-capital" cash NOI growth (3)
(2.5%) - (3.5%)
Foreign Exchange Rates
U.S. Dollar / Pound Sterling
$1.25 - $1.30
U.S. Dollar / Euro
$1.15 - $1.20
External Growth
Dispositions
Dollar volume
$0.6 - $1.0 billion
Cap rate 0.0% - 12.0%
Development
CapEx (4)
$2.0 - $2.3 billion
Average stabilized yields 9.0% - 15.0%
Enhancements and other non-recurring CapEx (5)
$5 - $10 million
Recurring CapEx + capitalized leasing costs (6)
$220 - $230 million
Balance Sheet
Long-term debt issuance
Dollar amount
$1.0 - $1.5 billion
Pricing 1.00%
Timing
Early-to-mid 2021
Net income per diluted share
$1.40 - $1.45
Real estate depreciation and (gain) / loss on sale
$4.90 - $4.90
Funds From Operations / share (NAREIT-Defined)
$6.30 - $6.35
Non-core expenses and revenue streams
$0.10 - $0.15
Core Funds From Operations / share
$6.40 - $6.50
(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., ASC 805
adjustments).
(2) Reflects inclusion of the Interxion
portfolio, which was approximately
75% occupied as of December 31,
2020.
(3) The "same-capital" pool includes
properties owned as of December
31, 2019 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 2020-
2021, properties classified as
held for sale, and properties sold
or contributed to joint ventures
for all periods presented.
(4) Includes land acquisitions.
(5) 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.
(6) 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. EST / 2:30 p.m. PST on February 11, 2021, a presentation will be posted to the Investors section of the company's website at https://investor.digitalrealty.com/. The presentation is designed to accompany the discussion of the company's Fourth Quarter 2020 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# 4603911 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 https://investor.digitalrealty.com/.
Telephone and webcast replays will be available after the call until March 11, 2021. 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# 10150290. The webcast replay can be accessed on Digital Realty's website.
About Digital Realty
Digital Realty supports the world's leading enterprises and service providers by delivering the full spectrum of data center, colocation and interconnection solutions. PlatformDIGITAL®, the company's global data center platform, provides customers a trusted foundation and proven Pervasive Datacenter Architecture (PDx(TM)) solution methodology for scaling digital business and efficiently managing data gravity challenges. Digital Realty's global data center footprint gives customers access to the connected communities that matter to them with more than 290 facilities in 49 metros across 24 countries on six continents. To learn more about Digital Realty, please visit digitalrealty.com or follow us on LinkedIn and Twitter.
Contact Information
Andrew P. Power
Chief Financial Officer
Digital Realty
(415) 738-6500
John J. Stewart / Jim Huseby
Investor Relations
Digital Realty
(415) 738-6500
Consolidated Quarterly Statements of Operations
Unaudited and Dollars in Thousands, Except Per Share Data
Three Months Ended Twelve Months Ended
---
31-Dec-20
30-Sep-20
30-Jun-20
31-Mar-20
31-Dec-19
31-Dec-20
31-Dec-19
---
Rental revenues $754,422 $726,441 $698,041 $579,774 $549,733 $2,758,678 $2,266,058
Tenant reimbursements -
Utilities 154,937 155,111 141,576 113,520 107,518 565,144 431,215
Tenant reimbursements -
Other 62,084 53,654 62,630 56,943 59,641 235,311 235,795
Interconnection & other 86,424 85,725 85,428 69,835 65,576 327,412 263,288
Fee income 4,722 3,687 4,353 2,452 4,814 15,214 11,654
Other 20 50 967 813 181 1,850 1,231
Total Operating Revenues $1,062,609 $1,024,668 $992,995 $823,337 $787,463 $3,903,609 $3,209,241
Utilities $169,282 $177,925 $160,173 $129,526 $125,127 $636,905 $505,424
Rental property
operating 205,177 180,755 172,474 136,182 129,034 694,588 515,154
Property taxes 42,442 39,732 45,071 42,123 42,541 169,368 159,593
Insurance 3,410 2,926 3,370 3,547 3,055 13,253 12,590
Depreciation &
amortization 359,915 365,842 349,165 291,457 275,008 1,366,379 1,163,774
General & administration 101,582 90,431 90,649 62,266 53,540 344,928 207,696
Severance, equity
acceleration, and legal
expenses 606 920 3,642 1,272 1,130 6,440 3,401
Transaction and
integration expenses 19,290 14,953 15,618 56,801 17,106 106,662 27,925
Impairment of
investments in real
estate - 6,482 6,482 5,351
Other expenses 641 297 22 114 1,989 1,074 14,118
Total Operating Expenses $902,345 $880,263 $840,184 $723,288 $648,530 $3,346,079 $2,615,026
Operating Income $160,264 $144,405 $152,811 $100,049 $138,933 $557,530 $594,215
Equity in earnings
(loss) of
unconsolidated joint
ventures 31,055 (2,056) (7,632) (78,996) 11,157 (57,629) 8,067
Gain on sale /
deconsolidation 1,684 10,410 304,801 267,651 316,895 335,148
Interest and other
(expense) income, net (2,747) 4,348 22,163 (3,542) 10,734 20,222 66,000
Interest (expense) (77,848) (89,499) (79,874) (85,800) (80,880) (333,021) (353,057)
Income tax (expense)
benefit (3,322) (16,053) (11,490) (7,182) 1,731 (38,047) (11,995)
Loss from early
extinguishment of debt (49,576) (53,007) (632) (103,215) (39,157)
Net Income /(Loss) $59,510 ($1,452) $75,978 $228,698 $349,326 $362,735 $599,221
Net (income) loss
attributable to
noncontrolling
interests (1,818) 1,316 (1,147) (4,684) (13,042) (6,333) (19,460)
Net Income /(Loss)
Attributable to Digital
Realty Trust, Inc. $57,692 ($136) $74,831 $224,014 $336,284 $356,402 $579,761
Preferred stock
dividends, including
undeclared dividends (13,514) (20,712) (21,155) (21,155) (20,707) (76,536) (74,990)
Issuance costs
associated with
redeemed preferred
stock - (16,520) (16,520) (11,760)
Net Income /(Loss)
Available to Common
Stockholders $44,178 ($37,368) $53,676 $202,859 $315,577 $263,346 $493,011
Weighted-average shares
outstanding - basic 280,117,213 270,214,413 267,569,823 222,163,324 208,776,355 260,098,978 208,325,823
Weighted-average shares
outstanding - diluted 281,122,368 270,214,413 270,744,408 224,474,295 210,286,278 262,522,508 209,481,231
Weighted-average fully
diluted shares and
units 288,903,143 281,523,515 278,719,109 232,753,630 218,901,078 270,496,513 218,440,163
Net income /(loss) per
share -basic $0.16 ($0.14) $0.20 $0.91 $1.51 $1.01 $2.37
Net income /(loss) per
share -diluted $0.16 ($0.14) $0.20 $0.90 $1.50 $1.00 $2.35
Funds From Operations and Core Funds From Operations
Unaudited and in Thousands, Except Per Share Data
Three Months Ended
Year Ended
Reconciliation of Net Income to
Funds From Operations (FFO) 31-Dec-20 30-Sep-20 30-Jun-20 31-Mar-20 31-Dec-19 31-Dec-20 31-Dec-19
---
Net (Loss) /Income Available
to Common Stockholders $44,178 ($37,368) $53,676 $202,859 $315,577 $263,345 $493,011
Adjustments:
Non-controlling interest
operating partnership 1,300 (1,000) 1,400 7,800 13,100 9,500 21,100
Real estate related
depreciation & amortization
(1) 354,366 358,619 342,334 286,517 271,371 1,341,836 1,149,240
Unconsolidated JV real estate
related depreciation &
amortization 21,471 19,213 17,123 19,923 21,631 77,730 52,716
(Gain) on real estate
transactions (1,684) (10,410) (304,801) (267,651) (316,895) (267,651)
Impairment of investments in
real estate 6,482 6,482 5,351
Funds From Operations -diluted $419,631 $335,536 $414,533 $212,298 $354,028 $1,381,998 $1,453,767
Weighted-average shares and
units outstanding - basic 287,898 278,079 275,545 230,443 217,391 268,073 217,285
Weighted-average shares and
units outstanding - diluted
(2) 288,903 281,524 278,719 232,754 218,901 270,497 218,440
Funds From Operations per share
-basic $1.46 $1.21 $1.50 $0.92 $1.63 $5.16 $6.69
Funds From Operations per share
-diluted (2) $1.45 $1.19 $1.49 $0.91 $1.62 $5.11 $6.66
Three Months Ended
Year Ended
Reconciliation of FFO to Core
FFO 31-Dec-20 30-Sep-20 30-Jun-20 31-Mar-20 31-Dec-19 31-Dec-20 31-Dec-19
---
Funds From Operations -diluted $419,631 $335,536 $414,533 $212,298 $354,028 $1,381,998 $1,453,767
Termination fees and other non-
core revenues (3) (25) (5,713) (21,908) (2,425) (5,634) (30,071) (53,697)
Transaction and integration
expenses 19,290 14,953 15,618 56,801 17,106 106,662 27,925
Loss from early extinguishment
of debt 49,576 53,007 632 103,215 39,157
Issuance costs associated with
redeemed preferred stock 16,520 16,520 11,760
Severance, equity acceleration,
and legal expenses (4) 606 920 3,642 1,272 1,130 6,440 3,401
(Gain) /Loss on FX revaluation (27,190) 10,312 17,526 81,288 (10,422) 81,936 18,067
(Gain) on contribution to
unconsolidated JV, net of
related tax (58,497)
Other non-core expense
adjustments 3,353 6,697 22 5,509 (1,511) 15,581 10,618
Core Funds From Operations -
diluted $465,241 $432,232 $429,433 $355,375 $354,697 $1,682,281 $1,452,501
Weighted-average shares and
units outstanding - diluted
(2) 288,903 281,524 278,719 232,754 218,901 270,497 218,440
Core Funds From Operations per
share -diluted (2) $1.61 $1.54 $1.54 $1.53 $1.62 $6.22 $6.65
(1) Real Estate Related
Depreciation &
Amortization
Three Months Ended
Year Ended
31-Dec-20 30-Sep-20 30-Jun-20 31-Mar-20 31-Dec-19 31-Dec-20 31-Dec-19
Depreciation & amortization per
income statement $359,915 $365,842 $349,165 $291,457 $275,008 1,366,379 1,163,774
Non-real estate depreciation (5,549) (7,223) (6,831) (4,940) (3,637) (24,543) (14,534)
Real Estate Related
Depreciation & Amortization $354,366 $358,619 $342,334 $286,517 $271,371 $1,341,836 $1,149,240
(2) For all periods presented, we have
excluded the effect of dilutive
series C, series G, series H, series
I, series J, series K and series L
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, series K and series L
preferred stock, as applicable,
which we consider highly improbable.
See above for calculations of
diluted FFO and the share count
detail section that follows the
reconciliation of core FFO to AFFO
for calculations of weighted average
common stock and units outstanding.
For definitions and discussion of
FFO and core FFO, see the
definitions section.
(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
Year Ended
Reconciliation of Core FFO to AFFO 31-Dec-20 30-Sep-20 30-Jun-20 31-Mar-20 31-Dec-19 31-Dec-20 31-Dec-19
---
Core FFO available to common
stockholders and unitholders $465,241 $432,232 $429,433 $355,375 $354,697 $1,682,281 $1,452,501
Adjustments:
Non-real estate depreciation 5,549 7,223 6,831 4,940 3,637 24,543 14,534
Amortization of deferred financing
costs 3,709 3,655 3,661 4,260 3,064 15,285 13,362
Amortization of debt discount/
premium 1,033 987 1,011 943 612 3,974 2,353
Non-cash stock-based compensation
expense 16,315 15,969 15,060 12,153 8,937 59,497 34,903
Straight-line rental revenue (14,402) (10,017) (10,928) (15,404) (13,994) (50,751) (55,770)
Straight-line rental expense 3,629 3,934 7,373 1,460 (342) 16,396 1,002
Above- and below-market rent
amortization 3,239 2,360 3,794 3,294 4,109 12,687 17,097
Deferred tax (expense) benefit (4,226) 6,421 (150) (792) (998) 1,253 (18,792)
Leasing compensation & internal lease
commissions (1) 10,506 6,052 1,739 2,793 3,646 21,090 14,506
Recurring capital expenditures (2) (83,571) (53,683) (38,796) (34,677) (54,731) (210,727) (180,713)
AFFO available to common stockholders
and unitholders (3) $407,022 $415,133 $419,028 $334,345 $308,637 $1,575,528 $1,294,983
Weighted-average shares and units
outstanding - basic 287,898 278,079 275,545 230,443 217,391 268,073 217,285
Weighted-average shares and units
outstanding - diluted (4) 288,903 281,524 278,719 232,754 218,901 270,497 218,440
AFFO per share -diluted (4) $1.41 $1.47 $1.50 $1.44 $1.41 $5.82 $5.93
Dividends per share and common unit $1.12 $1.12 $1.12 $1.12 $1.08 $4.48 $4.32
Diluted AFFO Payout Ratio 79.5% 76.0% 74.5% 78.0% 76.6% 76.9% 72.9%
Three Months Ended
Year Ended
Share Count Detail 31-Dec-20 30-Sep-20 30-Jun-20 31-Mar-20 31-Dec-19 31-Dec-20 31-Dec-19
---
Weighted Average Common Stock and
Units Outstanding 287,898 278,079 275,545 230,443 217,391 268,073 217,285
Add: Effect of dilutive securities 1,005 3,445 3,174 2,311 1,510 2,424 1,155
Weighted Avg. Common Stock and Units
Outstanding -diluted 288,903 281,524 278,719 232,754 218,901 270,497 218,440
(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, series K and series L
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, series K and series L
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-Dec-20 30-Sep-20 30-Jun-20 31-Mar-20 31-Dec-19
---
Assets
Investments in real estate:
Real estate $23,142,988 $22,125,486 $20,843,273 $20,477,290 $16,886,592
Construction in progress 2,768,326 2,328,654 2,514,324 2,204,869 1,732,555
Land held for future development 226,862 198,536 175,209 137,447 147,597
Investments in real estate $26,138,175 $24,652,676 $23,532,806 $22,819,606 $18,766,744
Accumulated depreciation and
amortization (5,555,221) (5,250,140) (4,945,534) (4,694,713) (4,536,169)
Net Investments in Properties $20,582,954 $19,402,536 $18,587,272 $18,124,893 $14,230,575
Investment in unconsolidated joint
ventures 1,148,158 1,059,978 1,033,235 1,064,009 1,287,109
Net Investments in Real Estate $21,731,112 $20,462,514 $19,620,507 $19,188,902 $15,517,684
Cash and cash equivalents $108,501 $971,305 $505,174 $246,480 $89,817
Accounts and other receivables (1) 603,111 585,506 542,750 527,699 305,501
Deferred rent 528,180 510,627 496,684 484,179 478,744
Customer relationship value,
deferred leasing costs & other
intangibles, net 3,122,904 3,106,414 3,128,140 3,500,588 2,195,324
Acquired above-market leases, net 43,294 50,080 57,535 66,033 74,815
Goodwill 8,330,996 8,012,256 7,791,522 7,466,046 3,363,070
Assets associated with real estate
held for sale 10,981 229,934
Operating lease right-of-use
assets (2) 1,386,959 1,363,285 1,375,427 1,364,621 628,681
Other assets 221,234 373,346 333,916 268,752 184,561
Total Assets $36,076,291 $35,435,333 $33,862,636 $33,113,300 $23,068,131
Liabilities and Equity
Global unsecured revolving credit
facilities $531,905 $124,082 $64,492 $603,101 $234,105
Unsecured term loans 536,580 512,642 799,550 771,425 810,219
Unsecured senior notes, net of
discount 11,997,010 11,999,170 11,268,753 10,637,006 8,973,190
Secured debt, net of premiums 239,222 238,866 238,826 239,800 104,934
Operating lease liabilities (2) 1,468,712 1,444,060 1,451,152 1,431,292 693,539
Accounts payable and other accrued
liabilities 1,987,580 2,187,025 1,828,288 1,732,318 1,007,761
Accrued dividends and distributions 324,386 571 234,620
Acquired below-market leases 130,890 135,263 139,851 145,208 148,774
Security deposits and prepaid rent 371,659 353,902 348,253 336,583 208,724
Liabilities associated with assets
held for sale 238 2,700
Total Liabilities $17,587,944 $16,995,581 $16,139,403 $15,896,733 $12,418,566
Redeemable non-controlling
interests - operating partnership 42,011 41,265 40,584 40,027 41,465
Equity
Preferred Stock: $0.01 par value
per share, 110,000,000 shares
authorized:
Series C Cumulative Redeemable
Perpetual 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
Series I Cumulative Redeemable
Preferred Stock (5) 242,012 242,012 242,012
Series J Cumulative Redeemable
Preferred Stock (6) 193,540 193,540 193,540 193,540 193,540
Series K Cumulative Redeemable
Preferred Stock (7) 203,264 203,264 203,264 203,264 203,264
Series L Cumulative Redeemable
Preferred Stock (8) 334,886 334,886 334,886 334,886 334,886
Common Stock: $0.01 par value per
share, 392,000,000 shares
authorized (9) 2,788 2,784 2,670 2,622 2,073
Additional paid-in capital 20,626,897 20,566,645 19,292,311 18,606,766 11,577,320
Dividends in excess of earnings (3,997,938) (3,726,901) (3,386,525) (3,139,350) (3,046,579)
Accumulated other comprehensive
income (loss), net 135,010 (123,623) (358,349) (444,222) (87,922)
Total Stockholders' Equity $17,717,697 $17,669,845 $16,984,527 $16,460,236 $9,879,312
Noncontrolling Interests
Noncontrolling interest in
operating partnership $608,980 $620,676 $633,831 $656,266 $708,163
Noncontrolling interest in
consolidated joint ventures 119,659 107,966 64,291 60,038 20,625
Total Noncontrolling Interests $728,639 $728,642 $698,122 $716,304 $728,788
Total Equity $18,446,336 $18,398,487 $17,682,649 $17,176,540 $10,608,100
Total Liabilities and Equity $36,076,291 $35,435,333 $33,862,636 $33,113,300 $23,068,131
(1) Net of allowance for doubtful
accounts of $18,825 and $13,753
as of December 31, 2020 and
December 31, 2019,
respectively.
(2) Adoption of the new lease
accounting standard required
that we adjust the consolidated
balance sheet to include the
recognition of additional
right-of-use assets and lease
liabilities for operating
leases. See our quarterly
report on Form 10?Q filed on
May 10, 2019 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 December 31, 2020 and
December 31, 2019,
respectively.
(4) Series G Cumulative Redeemable
Preferred Stock, 5.875%, $0
(redeemed October 15, 2020,
reclassified to accounts
payable as of September 30,
2020 for accounting purposes)
and $250,000 liquidation
preference, respectively
($25.00 per share), 0 and
10,000,000 shares issued and
outstanding as of December 31,
2020 and December 31, 2019,
respectively.
(5) Series I Cumulative Redeemable
Preferred Stock, 6.350%, $0 and
$250,000 liquidation
preference, respectively
($25.00 per share), 0 and
10,000,000 shares issued and
outstanding as of December 31,
2020 and December 31, 2019,
respectively.
(6) 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 December 31, 2020 and
December 31, 2019,
respectively.
(7) Series K Cumulative Redeemable
Preferred Stock, 5.850%,
$210,000 and $210,000
liquidation preference,
respectively ($25.00 per
share), 8,400,000 and 8,400,000
shares issued and outstanding
as of December 31, 2020 and
December 31, 2019,
respectively.
(8) Series L Cumulative Redeemable
Preferred Stock, 5.200%,
$345,000 and $345,000
liquidation preference,
respectively ($25.00 per
share), 13,800,000 and
13,800,000 shares issued and
outstanding as of December 31,
2020 and December 31, 2019,
respectively.
(9) Common Stock: 280,289,726 and
208,900,758 shares issued and
outstanding as of December 31,
2020 and December 31, 2019,
respectively.
Reconciliation of Earnings Before Interest, Taxes, Depreciation & Amortization and Financial Ratios
Unaudited and Dollars in Thousands
Three Months Ended
Reconciliation of Earnings
Before Interest, Taxes,
Depreciation & Amortization
(EBITDA) (1) 31-Dec-20 30-Sep-20 30-Jun-20 31-Mar-20 31-Dec-19
Net Income /(Loss) Available to
Common Stockholders $44,178 ($37,368) $53,676 $202,859 $315,577
Interest 77,848 89,499 79,874 85,800 80,880
Loss from early extinguishment
of debt 49,576 53,007 632
Income tax expense (benefit) 3,322 16,053 11,490 7,182 (1,731)
Depreciation & amortization 359,915 365,842 349,165 291,457 275,008
EBITDA $534,839 $487,033 $494,205 $587,930 $669,734
Unconsolidated JV real estate
related depreciation &
amortization 21,471 19,213 17,123 19,923 21,631
Unconsolidated JV interest
expense and tax expense 12,143 9,002 9,203 9,944 13,553
Severance, equity acceleration,
and legal expenses 606 920 3,642 1,272 1,130
Transaction and integration
expenses 19,290 14,953 15,618 56,801 17,106
(Gain) on sale /deconsolidation (1,684) (10,410) (304,801) (267,651)
Impairment of investments in
real estate 6,482
Other non-core adjustments, net (23,842) 4,945 (3,404) 85,185 (13,886)
Non-controlling interests 1,818 (1,316) 1,147 4,684 13,042
Preferred stock dividends,
including undeclared dividends 13,514 20,712 21,155 21,155 20,707
Issuance costs associated with
redeemed preferred stock 16,520
Adjusted EBITDA $578,156 $568,054 $558,690 $482,093 $475,366
(1) For definitions and
discussion of EBITDA and
Adjusted EBITDA, see the
definitions section.
Three Months Ended
---
Financial
Ratios 31-Dec-20 30-Sep-20 30-Jun-20 31-Mar-20 31-Dec-19
Total GAAP
interest
expense $77,848 $89,499 $79,874 $85,800 $80,880
Capitalized
interest 11,836 12,379 13,133 10,480 9,877
Change in
accrued
interest and
other non-
cash amounts (37,182) 19,718 (38,478) 24,321 (30,564)
Cash Interest
Expense (2) $52,502 $121,596 $54,529 $120,601 $60,193
Scheduled debt
principal
payments 57 125 210
Preferred
dividends 13,514 20,712 21,155 21,155 20,707
Total Fixed
Charges (3) $103,198 $122,590 $114,219 $117,560 $111,674
Coverage
Interest
coverage
ratio (4)
5.8x
5.2x
5.6x
4.6x
4.7x
---
Cash interest
coverage
ratio (5)
9.3x
4.4x
9.1x
3.7x
6.7x
---
Fixed charge
coverage
ratio (6)
5.1x
4.4x
4.6x
3.8x
3.9x
---
Cash fixed
charge
coverage
ratio (7)
7.7x
3.8x
6.8x
3.2x
5.2x
---
Leverage
Debt to total
enterprise
value (8) (9) 24.4% 22.8% 23.3% 23.8% 26.9%
---
Debt plus
preferred
stock to
total
enterprise
value (10) 26.2% 25.0% 26.0% 26.6% 30.8%
---
Pre-tax
income to
interest
expense (11)
1.8x
1.0x
2.0x
3.7x
5.3x
---
Net Debt to
Adjusted
EBITDA (12)
6.1x
5.6x
5.7x
6.6x
5.7x
---
(2) Cash interest expense is interest
expense less amortization of debt
discount and deferred financing fees
and includes interest that we
capitalized. We consider cash
interest expense to be a useful
measure of interest as it excludes
non-cash based interest expense.
(3) Fixed charges consist of GAAP
interest expense, capitalized
interest, scheduled debt principal
payments and preferred dividends.
(4) Adjusted EBITDA divided by GAAP
interest expense plus capitalized
interest (including our pro rata
share of unconsolidated joint
venture interest expense).
(5) Adjusted EBITDA divided by cash
interest expense (including our pro
rata share of unconsolidated joint
venture interest expense).
(6) Adjusted EBITDA divided by fixed
charges (including our pro rata
share of unconsolidated joint
venture fixed charges).
(7) Adjusted EBITDA divided by the sum of
cash interest expense, scheduled
debt principal payments and
preferred dividends (including our
pro rata share of unconsolidated
joint venture fixed charges).
(8) Mortgage debt and other loans divided
by market value of common equity
plus debt plus preferred stock.
(9) Total enterprise value defined as
market value of common equity plus
debt plus preferred stock.
(10) Same as (8), except numerator
includes preferred stock.
(11) Calculated as net income plus
interest expense divided by GAAP
interest expense.
(12) Calculated as total debt at balance
sheet carrying value, plus capital
lease obligations, plus Digital
Realty's share of joint venture
debt, less cash and cash equivalents
divided by the product of Adjusted
EBITDA (inclusive of our share of
joint venture EBITDA), multiplied by
four.
Management Statements on Non-GAAP Measures
Unaudited
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) issuance costs associated with redeemed preferred stock, (v) severance, equity acceleration, and legal expenses, (vi) gain/loss on FX revaluation, (vii) gain on contribution to unconsolidated joint venture, net of related tax, and (viii) 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) benefit, (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, unconsolidated joint venture real estate related depreciation & amortization, unconsolidated joint venture interest expense and tax, severance, equity acceleration, and legal expenses, transaction and integration expenses, gain on sale / deconsolidation, other non-core adjustments, net, non-controlling 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, unconsolidated joint venture interest expense and tax, 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, preferred stock dividends, including undeclared dividends, and issuance costs associated with redeemed preferred stock. 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 December 31, 2020, GAAP interest expense was $78 million, capitalized interest was $12 million and scheduled debt principal payments and preferred dividends was $14 million.
Reconciliation of Net
Operating Income
(NOI)
Three Months Ended
Year Ended
(in thousands) 31-Dec-20 30-Sep-20 31-Dec-19 31-Dec-20 31-Dec-19
---
Operating income $160,264 $144,405 $138,933 $557,530 $594,215
Fee income (4,722) (3,687) (4,814) (15,214) (11,654)
Other income (20) (50) (181) (1,850) (1,231)
Depreciation and
amortization 359,915 365,842 275,008 1,366,379 1,163,774
General and
administrative 101,582 90,431 53,540 344,928 207,696
Severance, equity
acceleration, and
legal expenses 606 920 1,130 6,440 3,401
Transaction expenses 19,290 14,953 17,106 106,662 27,925
Impairment in
investments in real
estate 6,482 6,482 5,351
Other expenses 641 297 1,989 1,074 14,118
Net Operating Income $637,556 $619,593 $482,711 $2,372,431 $2,003,595
Cash Net Operating
Income (Cash NOI)
Net Operating Income $637,556 $619,593 $482,711 $2,372,431 $2,003,595
Straight-line rental
revenue (15,451) (9,215) (6,385) (48,769) (48,595)
Straight-line rental
expense 3,758 3,674 (306) 16,223 1,075
Above- and below-
market rent
amortization 3,239 2,360 4,109 12,686 17,097
Cash Net Operating
Income $629,102 $616,412 $480,129 $2,352,571 $1,973,172
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: our expected investment and expansion activity, COVID-19, our liquidity, our joint ventures, 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, 2021 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, 2021 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;
-- increased competition or available supply of data center space;
-- decreased rental rates, increased operating costs or increased vacancy
rates;
-- 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;
-- our ability to attract and retain 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;
-- information security and data privacy breaches;
-- difficulty managing an international business and acquiring or operating
properties in foreign jurisdictions and unfamiliar metropolitan areas;
-- 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;
-- difficulties in identifying properties to acquire and completing
acquisitions;
-- risks related to joint venture investments, 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;
-- our inability to attract and retain talent;
-- impact on our operations and on the operations of our customers,
suppliers and business partners during a pandemic, such as COVID-19;
-- environmental liabilities, risks related to natural disasters and our
inability to achieve our sustainability goals;
-- 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;
-- 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; and
-- the impact of any financial, accounting, legal or regulatory issues or
litigation that may affect us.
The risks included here are not exhaustive, and additional factors could adversely affect our business and financial performance. Several additional material risks are discussed in our annual report on Form 10?K for the year ended December 31, 2019, our quarterly reports on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020 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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