Digital Realty Reports Fourth Quarter 2023 Results

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Insights

Assessing the financial results of Digital Realty, the reported net income of $0.08 per share in 4Q23, up from a loss in the same quarter the previous year, indicates a positive turnaround in profitability. However, the slight decrease in Core FFO per share from $1.65 in 4Q22 to $1.63 in 4Q23 suggests a contraction in the company's core operations, which could raise concerns among investors regarding the sustainability of growth. It is important to consider the 2% decrease in quarterly revenue and whether this trend is due to cyclical factors or more systemic issues within the company or industry. The introduction of the 2024 Core FFO per share outlook of $6.60 - $6.75 provides a future earnings framework for stakeholders, but warrants scrutiny against industry benchmarks and macroeconomic conditions, particularly in the data center and cloud services sector.

The 9.9% 'Same-Capital' cash NOI growth in 4Q23 is a strong indicator of the company's ability to increase operational efficiency and maximize revenue from existing assets. This metric is particularly relevant for REITs like Digital Realty, as it reflects the underlying real estate performance stripped of the effects of acquisitions or dispositions. Additionally, the 8.2% rental rate increase on renewal leases on a cash basis signifies robust demand and pricing power in the data center market. Investors should consider how these figures compare to industry averages, as they could imply Digital Realty's competitive positioning. The leasing activity, with $110 million of expected annualized GAAP rental revenue, is a testament to the company's growth strategy and the increasing demand for data center space, fueled by trends such as the proliferation of AI and cloud computing.

The strategic moves made by Digital Realty, including the formation of new development joint ventures and the resolution of relationships with Cyxtera, highlight the company's proactive management and diversification of its capital sources. The joint ventures with Brookfield Infrastructure Partners L.P. and Blackstone Inc. are particularly noteworthy, as they represent significant external growth initiatives with a potential to add considerable scale and market presence. The development of hyperscale data center campuses in key regions like Frankfurt, Paris and Northern Virginia aligns with the increasing demand for large-scale infrastructure to support cloud services and big data analytics. The impact of these developments on the company's market share and revenue streams will be critical to evaluate, especially in the context of the competitive landscape and the potential for market saturation.

02/15/2024 - 04:05 PM

AUSTIN, Texas, Feb. 15, 2024 /PRNewswire/ -- Digital Realty (NYSE: DLR), the largest global provider of cloud- and carrier-neutral data center, colocation, and interconnection solutions, announced today financial results for the fourth quarter of 2023. All per share results are presented on a fully diluted basis.

Highlights

Reported net income available to common stockholders of $0.08 per share in 4Q23, compared to ($0.02) in 4Q22
Reported FFO per share of $1.53 in 4Q23, compared to $1.45 in 4Q22
Reported Core FFO per share of $1.63 in 4Q23, compared to $1.65 in 4Q22
Reported Constant-Currency Core FFO per share of $1.62 in 4Q23 and $6.57 per share for the twelve months ended December 31, 2023
Reported "Same-Capital" cash NOI growth of 9.9% in 4Q23
Reported rental rate increases on renewal leases of 8.2% on a cash basis in 4Q23
Signed total bookings during 4Q23 that are expected to generate $110 million of annualized GAAP rental revenue, including a $39 million contribution from the 0–1 megawatt category and $13 million contribution from interconnection
Introduced 2024 Core FFO per share outlook of $6.60 - $6.75

Financial Results

Digital Realty reported revenues of $1.4 billion in the fourth quarter of 2023, a 2% decrease from the previous quarter and an 11% increase from the same quarter last year.

The company delivered net income of $20 million in the fourth quarter of 2023, and net income available to common stockholders of $18 million, or $0.08 per diluted share, compared to $2.33 per diluted share in the previous quarter and ($0.02) per diluted share in the same quarter last year.

Digital Realty generated Adjusted EBITDA of $700 million in the fourth quarter of 2023, a 2% increase from the previous quarter and 9% increase over the same quarter last year.

The company reported Funds From Operations (FFO) of $484 million in the fourth quarter of 2023, or $1.53 per share, compared to $1.55 per share in the previous quarter and $1.45 per share in the same quarter last year.

Excluding certain items that do not represent core expenses or revenue streams, Digital Realty delivered Core FFO per share of $1.63 in the fourth quarter of 2023, compared to $1.62 per share in the previous quarter and $1.65 per share in the same quarter last year. Digital Realty delivered Constant-Currency Core FFO per share of $1.62 for the fourth quarter of 2023 and $6.57 per share for the twelve-month period ended December 31, 2023.

"Our fourth quarter results marked the culmination of a transformative year for Digital Realty. We delivered on our strategic priorities and positioned the company for the growing opportunity that lies ahead," said Digital Realty President & Chief Executive Officer Andy Power. "During the fourth quarter, we bolstered and diversified our capital sources through the formation of two new development joint ventures, while continuing to evolve our portfolio to capture the tremendous opportunities created by AI."

Leasing Activity

In the fourth quarter, Digital Realty signed total bookings that are expected to generate $110 million of annualized GAAP rental revenue, including a $39 million contribution from the 0–1 megawatt category and a $13 million contribution from interconnection.

The weighted-average lag between new leases signed during the fourth quarter of 2023 and the contractual commencement date was 16 months.

In addition to new leases signed, Digital Realty also signed renewal leases representing $210 million of annualized rental revenue during the quarter. Rental rates on renewal leases signed during the fourth quarter of 2023 increased 8.2% on a cash basis and 10.6% on a GAAP basis.

New leases signed during the fourth quarter of 2023 are summarized by region and product as follows:


	Annualized GAAP
	Base Rent		Square Feet	GAAP Base Rent			GAAP Base Rent
Americas	(in thousands)		(in thousands)	per Square Foot		Megawatts	per Kilowatt
0-1 MW		$13,068	57		$228	4.5		$241
> 1 MW		7,520	66		115	3.9		160
Other ⁽¹⁾		300	5		62	—		—
Total		$20,887	128		$163	8.4		$204

EMEA ⁽²⁾
0-1 MW		$17,189	87		$198	6.3		$226
> 1 MW		44,669	306		146	25.7		145
Other ⁽¹⁾		49	2		28	—		—
Total		$61,908	395		$157	32.0		$161

Asia Pacific ⁽²⁾
0-1 MW		$9,225	27		$343	2.8		$273
> 1 MW		4,453	28		158	3.0		124
Other ⁽¹⁾		128	4		30	—		—
Total		$13,806	59		$233	5.8		$196

All Regions ⁽²⁾
0-1 MW		$39,482	171		$231	13.7		$241
> 1 MW		56,642	400		142	32.6		145
Other ⁽¹⁾		477	11		44	—		—
Total		$96,601	582		$166	46.3		$173

Interconnection		$13,483	N/A		N/A	N/A		N/A

Grand Total		$110,084	582		$166	46.3		$173

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, 2023.

Investment Activity

During the fourth quarter, Digital Realty signed definitive agreements with Brookfield Infrastructure Partners L.P., Cyxtera Technologies and Digital Core REIT to successfully resolve the relationship with Cyxtera. These agreements were completed in conjunction with Brookfield's announced agreement to acquire Cyxtera, pursuant to its Plan of Reorganization under its Chapter 11 proceedings. As part of the agreements, Brookfield would acquire Digital Realty's interest in four data centers for approximately $275 million, Digital Realty would redeploy $55 million to buy out Cyxtera's leases in three Digital Realty data centers in Singapore and Frankfurt, Brookfield would grant Digital Realty a purchase option to acquire a data center outside of London, UK, Brookfield would assume the leases in three data centers previously leased to Cyxtera, and Brookfield would amend the leases in these three data centers in New Jersey and Los Angeles, accelerating the expiration date to September 2024. Subsequent to year end, Digital Realty closed on the transactions and exercised its purchase option to acquire the data center outside of London, UK, which is expected to close at the end of the first quarter.

As previously disclosed, in mid-November, Digital Realty and Realty Income Corporation established a joint venture to support the development of two build-to-suit data centers in Northern Virginia. Realty Income initially invested approximately $200 million to acquire an 80% equity interest in the venture, while Digital Realty maintains a 20% interest. Each partner will fund its pro rata share of the remaining development costs for the two facilities. The build-to-suit facilities are 100% pre-leased and are expected to generate a 6.9% initial cash lease yield upon lease commencement in mid-2024.

Also previously disclosed, in December, Digital Realty and Blackstone Inc. announced a $7 billion joint venture to develop four hyperscale data center campuses across Frankfurt, Paris and Northern Virginia. The campuses are planned to support the construction of 10 data centers with approximately 500 megawatts of potential IT load capacity. Blackstone will initially invest approximately $700 million to acquire an 80% equity interest in the joint venture, while Digital Realty maintains a 20% interest. Digital Realty will manage the development and day-to-day operations of the joint venture, for which it will receive customary fees. Subsequent to year end, the first phase of the joint venture closed on hyperscale data center campuses in Paris and Northern Virginia, while the second phase is scheduled to close later this year, upon obtaining the required regulatory approvals.

Additionally, Digital Realty completed the sale of an option maintained on a second parcel of land in Sydney, Australia with an area of 21 acres for approximately AU$29 million or $20 million.

Further during the fourth quarter, Digital Realty exercised its option to purchase approximately 19 acres of land (PAR 8 – 11) in Paris, France for approximately €70 million or $77 million. The parcel of land, previously leased to Digital Realty, is currently under development to support up to 77 megawatts of IT load. Subsequent to year end, Digital Realty closed on PAR 8 – 11.

In addition, during the fourth quarter, Digital Realty closed on the acquisition of approximately three acres adjacent to its existing campus near Athens, Greece for approximately €6 million or $6 million. This land can support the development of an additional data center (ATH5) with up to 15 megawatts of IT load.

Subsequent to year end, GI Partners executed its option to acquire an additional 15% interest in two stabilized hyperscale data center buildings in Chicago, increasing their interest from the 65% interest acquired in the third quarter to 80%. The top-up, completed at the same terms as the initial closing, resulted in approximately $68 million of gross proceeds to Digital Realty.

Balance Sheet

Digital Realty had approximately $17.4 billion of total debt outstanding as of December 31, 2023, comprised of $16.8 billion of unsecured debt and approximately $0.6 billion of secured debt and other. At the end of the fourth quarter of 2023, net debt-to-Adjusted EBITDA was 6.2x, debt-plus-preferred-to-total enterprise value was 29.8% and fixed charge coverage was 3.8x. Pro forma for the completion of the Blackstone development joint ventures announced in December 2023, the completion of asset sales, and the issuance of common stock subsequent to year end, net debt-to-Adjusted EBITDA was 5.8x.

During the quarter, Digital Realty sold 8.7 million shares of its common stock at a weighted average price of $133.21 per share through its ATM program, for net proceeds of approximately $1.1 billion. Subsequent to year end, the company sold 0.6 million shares of its common stock at a weighted average price of $133.43 per share for net proceeds of approximately $84 million.

Subsequent to year end, the company retired $240 million of the $740 million U.S. dollar term loan.

2024 Outlook

Digital Realty introduced its 2024 Core FFO per share and Constant-Currency Core FFO per share outlooks of $6.60 - $6.75. The assumptions underlying the outlook are summarized in the following table.


		As of
Top-Line and Cost Structure		February 15, 2024
Total revenue		$5.550 - $5.650 billion
Net non-cash rent adjustments (1)		($35 - $40 million)
Adjusted EBITDA		$2.800 - $2.900 billion
G&A		$450 - $460 million

Internal Growth
Rental rates on renewal leases
Cash basis		4.0% - 6.0%
GAAP basis		6.0% - 8.0%
Year-end portfolio occupancy		+100 - 200 bps
"Same-Capital" cash NOI growth (2)		2.0% - 3.0%

Foreign Exchange Rates
U.S. Dollar / Pound Sterling		$1.25 - $1.30
U.S. Dollar / Euro		$1.05 - $1.10

External Growth
Dispositions / Joint Venture Capital
Dollar volume		$1,000 - $1,500 million
Cap rate		6.0% - 8.0%
Development
CapEx (Net of Partner Contributions) (3)		$2,000 - $2,500 million
Average stabilized yields		10.0%+
Enhancements and other non-recurring CapEx (4)		$15 - $20 million
Recurring CapEx + capitalized leasing costs (5)		$260 - $275 million

Balance Sheet
Long-term debt issuance
Dollar amount		$0 - $1,000 million
Pricing		5.0% - 5.5%
Timing		Mid-Year

Net income per diluted share		$1.80 - $1.95
Real estate depreciation and (gain) / loss on sale		$4.40 - $4.40
Funds From Operations / share (NAREIT-Defined)		$6.20 - $6.35
Non-core expenses and revenue streams		$0.40 - $0.40
Core Funds From Operations / share		$6.60 - $6.75
Foreign currency translation adjustments		$0.00 - $0.00
Constant-Currency Core Funds From Operations / share		$6.60 - $6.75


(1)	Net non-cash rent adjustments represent the sum of straight-line rental revenue and straight-line rental expense, as well as the amortization of above- and below-market leases (i.e., ASC 805 adjustments).
(2)	The "Same-Capital" pool includes properties owned as of December 31, 2022 with less than 5% of total rentable square feet under development. It excludes properties that were undergoing, or were expected to undergo, development activities in 2023-2024, properties classified as held for sale, and properties sold or contributed to joint ventures for all periods presented.
(3)	Excludes land acquisitions and includes Digital Realty's share of JV contributions. Figure is net of JV partner contributions.
(4)	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.
(5)	Recurring CapEx represents non-incremental improvements required to maintain current revenues, including second-generation tenant improvements and leasing commissions.

Note: The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. Please see Non-GAAP Financial Measures in this document for further discussion.

Non-GAAP Financial Measures

This document contains non-GAAP financial measures, including FFO, Core FFO, Adjusted FFO, Net Operating Income (NOI), "Same-Capital" Cash NOI and Adjusted EBITDA. A reconciliation from U.S. GAAP net income available to common stockholders to FFO, a reconciliation from FFO to Core FFO, a reconciliation from Core FFO to Adjusted FFO, reconciliation from NOI to Cash NOI, and definitions of FFO, Core FFO, Adjusted FFO, NOI and "Same-Capital" Cash NOI 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.

The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and/or amount of various items that would impact net income attributable to common stockholders per diluted share, which is the most directly comparable forward-looking GAAP financial measure. This includes, for example, external growth factors, such as dispositions, and balance sheet items such as debt issuances, that have not yet occurred, are out of the Company's control and/or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.

Investor Conference Call

Prior to Digital Realty's investor conference call at 5:00 p.m. ET / 4:00 p.m. CT on February 15, 2024, 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 2023 financial results and operating performance. The conference call will feature President & Chief Executive Officer Andy Power and Chief Financial Officer Matt Mercier.

To participate in the live call, investors are invited to dial +1 (888) 317-6003 (for domestic callers) or +1 (412) 317-6061 (for international callers) and reference the conference ID# 0216634 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 15, 2024. The telephone replay can be accessed by dialing +1 (877) 344-7529 (for domestic callers) or +1 (412) 317-0088 (for international callers) and providing the conference ID# 4147003. The webcast replay can be accessed on Digital Realty's website.

About Digital Realty

Digital Realty brings companies and data together by delivering the full spectrum of data center, colocation, and interconnection solutions. PlatformDIGITAL®, the company's global data center platform, provides customers with a secure data meeting place and a proven Pervasive Datacenter Architecture (PDx®) solution methodology for powering innovation and efficiently managing Data Gravity challenges. Digital Realty gives its customers access to the connected data communities that matter to them with a global data center footprint of 300+ facilities in 50+ metros across 25+ countries on six continents. To learn more about Digital Realty, please visit digitalrealty.com or follow us on LinkedIn and X.

Contact Information

Matt Mercier
Chief Financial Officer
Digital Realty
(737) 281-0101

Jordan Sadler / Jim Huseby
Investor Relations
Digital Realty
(737) 281-0101

Consolidated Quarterly Statements of Operations				Financial Supplement
Unaudited and in Thousands, Except Per Share Data				Fourth Quarter 2023

	Three Months Ended						Twelve Months Ended
	31-Dec-23	30-Sep-23	30-Jun-23		31-Mar-23	31-Dec-22		31-Dec-23	31-Dec-22
Rental revenues	$885,694	$886,960	$869,298		$870,975	$834,374		$3,512,926	$3,141,488
Tenant reimbursements - Utilities	316,634	335,477	330,416		317,148	247,725		1,299,676	941,891
Tenant reimbursements - Other	46,418	64,876	46,192		40,150	46,045		197,636	199,663
Interconnection & other	106,413	107,305	104,521		101,695	97,286		419,934	379,641
Fee income	14,330	7,819	14,908		7,868	7,508		44,926	24,506
Other	144	—	932		887	168		1,963	4,645
Total Operating Revenues	$1,369,633	$1,402,437	$1,366,267		$1,338,724	$1,233,108		$5,477,061	$4,691,834

Utilities	$366,083	$384,455	$374,934		$346,364	$268,561		$1,471,836	$1,005,070
Rental property operating	237,118	223,089	224,762		224,861	222,430		909,830	820,746
Property taxes	40,161	72,279	46,718		40,424	42,032		199,581	175,631
Insurance	3,794	4,289	4,385		4,355	4,578		16,823	16,114
Depreciation & amortization	420,475	420,613	432,573		421,198	430,130		1,694,859	1,577,933
General & administration	109,235	108,039	105,964		107,766	104,452		431,004	398,669
Severance, equity acceleration and legal expenses	7,565	2,682	3,652		4,155	15,980		18,054	23,498
Transaction and integration expenses	40,226	14,465	17,764		12,267	17,350		84,722	68,766
Provision for impairment	5,363	113,000	—		—	3,000		118,363	3,000
Other expenses	5,580	1,295	655		—	3,615		7,529	12,438
Total Operating Expenses	$1,235,598	$1,344,206	$1,211,407		$1,161,388	$1,112,127		$4,952,600	$4,101,865

Operating Income	$134,035	$58,231	$154,860		$177,335	$120,981		$524,461	$589,969

Equity in earnings / (loss) of unconsolidated joint ventures	(29,955)	(19,793)	5,059		14,897	(28,112)		(29,791)	(13,496)
Gain / (loss) on sale of investments	(103)	810,688	89,946		—	(6)		900,531	176,754
Interest and other income / (expense), net	50,269	24,812	(6,930)		280	(22,894)		68,431	8,918
Interest (expense)	(113,638)	(110,767)	(111,116)		(102,220)	(86,882)		(437,741)	(299,132)
Income tax benefit / (expense)	(20,724)	(17,228)	(16,173)		(21,454)	17,676		(75,579)	(31,551)
Loss from early extinguishment of debt	—	—	—		—	—		—	(51,135)
Net Income	$19,884	$745,941	$115,647		$68,839	$763		$950,311	$380,327

Net income / (loss) attributable to noncontrolling interests	8,419	(12,320)	2,538		(111)	3,326		(1,474)	(2,455)
Net Income Attributable to Digital Realty Trust, Inc.	$28,304	$733,621	$118,185		$68,728	$4,089		$948,838	$377,872

Preferred stock dividends	(10,181)	(10,181)	(10,181)		(10,181)	(10,181)		(40,725)	(40,725)
Net Income / (Loss) Available to Common Stockholders	$18,122	$723,440	$108,003		$58,547	($6,093)		$908,113	$337,147

Weighted-average shares outstanding - basic	305,781	301,827	295,390		291,219	289,365		298,603	286,334
Weighted-average shares outstanding - diluted	314,995	311,341	306,819		303,065	301,712		309,065	297,919
Weighted-average fully diluted shares and units	321,173	317,539	313,021		309,026	307,546		315,113	303,708

Net income / (loss) per share - basic	$0.06	$2.40	$0.37		$0.20	($0.02)		$3.04	$1.18
Net income / (loss) per share - diluted	$0.08	$2.33	$0.37		$0.19	($0.02)		$3.00	$1.13

Funds From Operations and Core Funds From Operations
Unaudited and in Thousands, Except Per Share Data

	Three Months Ended						Twelve Months Ended
Reconciliation of Net Income to Funds From Operations (FFO)		31-Dec-23	30-Sep-23	30-Jun-23	31-Mar-23	31-Dec-22		31-Dec-23	31-Dec-22

Net Income / (Loss) Available to Common Stockholders		$18,122	$723,440	$108,003	$58,547	($6,093)		$908,112	$337,147
Adjustments:
Non-controlling interest in operating partnership		410	16,300	2,500	1,500	(586)		20,710	7,914
Real estate related depreciation & amortization (1)		410,167	410,836	424,044	412,192	422,951		1,657,239	1,547,865
Reconciling items related to non-controlling interests		(15,377)	(14,569)	(14,144)	(13,388)	(13,856)		(57,477)	(22,110)
Unconsolidated JV real estate related depreciation & amortization		64,833	43,215	35,386	33,719	33,927		177,153	123,099
(Gain) / loss on real estate transactions		103	(810,688)	(89,946)	(7,825)	572		(908,356)	(177,332)
Provision for impairment		5,363	113,000	—	—	3,000		118,363	3,000
Funds From Operations		$483,621	$481,535	$465,844	$484,745	$439,915		$1,915,745	$1,819,583

Weighted-average shares and units outstanding - basic		311,960	308,024	301,593	297,180	295,199		304,651	292,123
Weighted-average shares and units outstanding - diluted (2)(3)		321,173	317,539	313,021	309,026	307,546		315,113	303,708

Funds From Operations per share - basic		$1.55	$1.56	$1.54	$1.63	$1.49		$6.29	$6.23

Funds From Operations per share - diluted (2)(3)		$1.53	$1.55	$1.52	$1.60	$1.45		$6.20	$6.03

	Three Months Ended						Twelve Months Ended
Reconciliation of FFO to Core FFO		31-Dec-23	30-Sep-23	30-Jun-23	31-Mar-23	31-Dec-22		31-Dec-23	31-Dec-22

Funds From Operations		$483,621	$481,535	$465,844	$484,745	$439,915		$1,915,745	$1,819,583
Other non-core revenue adjustments		(146)	(27)	27,454	(887)	(3,786)		26,393	8,768
Transaction and integration expenses		40,226	14,465	17,764	12,267	17,350		84,722	68,766
Loss from early extinguishment of debt		—	—	—	—	—		—	51,135
Severance, equity acceleration and legal expenses (4)		7,565	2,682	3,652	4,155	15,980		18,054	23,498
(Gain) / Loss on FX revaluation		(24,804)	451	(7,868)	(6,778)	14,564		(39,000)	(24,694)
Other non-core expense adjustments		1,956	1,295	655	—	3,615		3,905	12,388
Core Funds From Operations		$508,417	$500,402	$507,501	$493,500	$487,638		$2,009,820	$1,959,444

Weighted-average shares and units outstanding - diluted (2)(3)		312,356	308,539	301,806	297,382	295,519		305,138	292,528

Core Funds From Operations per share - diluted (2)		$1.63	$1.62	$1.68	$1.66	$1.65		$6.59	$6.70

(1) Real Estate Related Depreciation & Amortization	Three Months Ended						Twelve Months Ended
		31-Dec-23	30-Sep-23	30-Jun-23	31-Mar-23	31-Dec-22		31-Dec-23	31-Dec-22

Depreciation & amortization per income statement		$420,475	$420,613	$432,573	$421,198	$430,130		$1,694,859	$1,577,933
Non-real estate depreciation		(10,308)	(9,777)	(8,529)	(9,006)	(7,179)		(37,619)	(30,068)
Real Estate Related Depreciation & Amortization		$410,167	$410,836	$424,044	$412,192	$422,951		$1,657,239	$1,547,865

(2)

Certain of Teraco's minority indirect shareholders have the right to put their shares in an upstream parent company of Teraco to Digital Realty in exchange for cash or the equivalent value of shares of Digital Realty common stock, or a combination thereof. US GAAP requires Digital Realty to assume the put right is settled in shares for purposes of calculating diluted EPS. This same approach was utilized to calculate FFO/share. The potential future dilutive impact associated with this put right will be excluded from Core FFO and AFFO until settlement occurs – causing diluted share count to be higher for FFO than for Core FFO and AFFO. When calculating diluted FFO, Teraco related minority interest is added back to the FFO numerator as the denominator assumes all shares have been put back to Digital Realty.

Three Months Ended

Twelve Months Ended

31-Dec-23

30-Sep-23

30-Jun-23

31-Mar-23

31-Dec-22

31-Dec-23

31-Dec-22

Teraco noncontrolling share of FFO

$7,135

$11,537

$9,645

$11,069

$7,213

$39,386

$11,919

Teraco related minority interest

$7,135

$11,537

$9,645

$11,069

$7,213

$39,386

$11,919


(3)	For all periods presented, we have excluded the effect of dilutive 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 J, series K and series L preferred stock, as applicable, which we consider highly improbable. See above for calculations of 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.
(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						Twelve Months Ended
Reconciliation of Core FFO to AFFO		31-Dec-23	30-Sep-23	30-Jun-23	31-Mar-23	31-Dec-22		31-Dec-23	31-Dec-22

Core FFO available to common stockholders and unitholders		$508,417	$500,402	$507,501	$493,500	$487,638		$2,009,820	$1,959,444
Adjustments:
Non-real estate depreciation		10,308	9,777	8,529	9,006	7,179		37,619	30,068
Amortization of deferred financing costs		5,744	5,776	5,984	4,072	3,753		21,575	13,987
Amortization of debt discount/premium		973	1,360	1,339	1,301	1,276		4,973	4,829
Non-cash stock-based compensation expense		9,226	14,062	13,893	13,056	16,042		50,238	62,242
Straight-line rental revenue		(21,992)	(14,080)	(16,151)	(16,194)	(29,392)		(68,417)	(83,604)
Straight-line rental expense		(4,999)	1,427	520	(515)	(208)		(3,567)	4,401
Above- and below-market rent amortization		(856)	(1,127)	(1,195)	(1,226)	(762)		(4,404)	(696)
Deferred tax (benefit) / expense		33,448	(8,539)	1,339	(9,795)	(4,885)		16,452	(12,491)
Leasing compensation & internal lease commissions		9,848	12,515	11,611	11,067	9,578		45,040	42,117
Recurring capital expenditures (1)		(142,808)	(90,251)	(53,498)	(40,465)	(109,999)		(327,022)	(266,466)

AFFO available to common stockholders and unitholders (2)		$407,306	$431,322	$479,873	$463,807	$380,220		$1,782,308	$1,753,831

Weighted-average shares and units outstanding - basic		311,960	308,024	301,593	297,180	295,199		304,651	292,123
Weighted-average shares and units outstanding - diluted (3)		312,356	308,539	301,806	297,382	295,519		305,138	292,528

AFFO per share - diluted (3)		$1.30	$1.40	$1.59	$1.56	$1.29		$5.84	$6.00

Dividends per share and common unit		$1.22	$1.22	$1.22	$1.22	$1.22		$4.88	$4.88

Diluted AFFO Payout Ratio		93.6 %	87.3 %	76.7 %	78.2 %	94.8 %		83.5 %	81.4 %

Three Months Ended

Twelve Months Ended

Share Count Detail

31-Dec-23

30-Sep-23

30-Jun-23

31-Mar-23

31-Dec-22

31-Dec-23

31-Dec-22

Weighted Average Common Stock and Units Outstanding

311,960

308,024

301,593

297,180

295,199

304,651

292,123

Add: Effect of dilutive securities

396

515

213

202

320

487

405

Weighted Avg. Common Stock and Units Outstanding - diluted

312,356

308,539

301,806

297,382

295,519

305,138

292,528


(1)	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.
(2)	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.
(3)	For all periods presented, we have excluded the effect of dilutive 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 J, series K and series L preferred stock, as applicable, which we consider highly improbable. See above for calculations of FFO and for calculations of weighted average common stock and units outstanding.

Consolidated Balance Sheets
Unaudited and in Thousands, Except Per Share Data

	31-Dec-23		30-Sep-23		30-Jun-23		31-Mar-23		31-Dec-22
Assets
Investments in real estate:
Real estate		$27,306,369		$25,887,031		$27,087,769		$27,052,022		$26,136,057
Construction in progress		4,635,215		5,020,464		4,635,939		4,563,578		4,789,134
Land held for future development		118,190		179,959		193,936		194,564		118,452
Investments in Real Estate		$32,059,773		$31,087,453		$31,917,644		$31,810,164		$31,043,643
Accumulated depreciation and amortization		(7,823,685)		(7,489,193)		(7,739,462)		(7,600,559)		(7,268,981)
Net Investments in Properties		$24,236,089		$23,598,260		$24,178,182		$24,209,605		$23,774,662
Investment in unconsolidated joint ventures		2,295,889		2,180,313		2,040,452		1,995,576		1,991,426
Net Investments in Real Estate		$26,531,977		$25,778,573		$26,218,634		$26,205,180		$25,766,088

Operating lease right-of-use assets,net		$1,414,256		$1,274,410		$1,291,233		$1,317,293		$1,351,329
Cash and cash equivalents		1,625,495		1,062,050		124,519		131,406		141,773
Accounts and other receivables, net ⁽¹⁾		1,278,110		1,325,725		1,158,383		1,070,066		969,292
Deferred rent, net		624,427		586,418		613,796		627,700		601,590
Goodwill		9,239,871		8,998,074		9,148,603		9,199,636		9,208,497
Customer relationship value, deferred leasing costs & other intangibles, net		2,500,237		2,506,198		2,825,596		3,015,291		3,092,627
Assets held for sale		478,503		—		593,892		—		—
Other assets		420,382		401,068		414,078		386,495		353,802
Total Assets		$44,113,257		$41,932,515		$42,388,735		$41,953,068		$41,484,998

Liabilities and Equity
Global unsecured revolving credit facilities, net		$1,812,287		$1,698,780		$2,242,258		$2,514,202		$2,150,451
Unsecured term loans, net		1,560,305		1,524,663		1,548,780		1,542,275		797,449
Unsecured senior notes, net of discount		13,422,342		13,072,102		13,383,819		13,258,079		13,120,033
Secured and other debt, net of discount		630,973		574,231		554,594		560,955		528,870
Operating lease liabilities		1,542,094		1,404,510		1,420,239		1,443,994		1,471,044
Accounts payable and other accrued liabilities		2,168,983		2,147,103		2,214,820		1,923,819		1,868,884
Deferred tax liabilities, net		1,151,096		1,088,724		1,128,961		1,164,276		1,192,752
Accrued dividends and distributions		387,988		—		—		—		363,716
Security deposits and prepaid rents		401,867		385,521		417,693		392,021		369,654
Obligations associated with assets held for sale		39,001		—		4,990		—		—
Total Liabilities		$23,116,936		$21,895,634		$22,916,155		$22,799,620		$21,862,853

Redeemable non-controlling interests		1,394,814		1,360,308		1,367,422		1,448,772		1,514,680

Equity
Preferred Stock: $0.01 par value per share, 110,000 shares authorized:
Series J Cumulative Redeemable Preferred Stock ⁽²⁾		$193,540		$193,540		$193,540		$193,540		$193,540
Series K Cumulative Redeemable Preferred Stock ⁽³⁾		203,264		203,264		203,264		203,264		203,264
Series L Cumulative Redeemable Preferred Stock ⁽⁴⁾		334,886		334,886		334,886		334,886		334,886
Common Stock: $0.01 par value per share, 392,000 shares authorized ⁽⁵⁾		3,088		3,002		2,967		2,888		2,887
Additional paid-in capital		24,396,797		23,239,088		22,882,200		22,126,379		22,142,868
Dividends in excess of earnings		(5,262,648)		(4,900,757)		(5,253,915)		(4,995,982)		(4,698,313)
Accumulated other comprehensive (loss), net		(751,393)		(882,996)		(741,484)		(652,486)		(595,798)
Total Stockholders' Equity		$19,117,535		$18,190,026		$17,621,456		$17,212,490		$17,583,334

Noncontrolling Interests
Noncontrolling interest in operating partnership		$438,081		$441,366		$436,099		$444,843		$419,317
Noncontrolling interest in consolidated joint ventures		45,892		45,182		47,603		47,342		104,814

Total Noncontrolling Interests		$483,972		$486,547		$483,702		$492,185		$524,131

Total Equity		$19,601,507		$18,676,573		$18,105,158		$17,704,675		$18,107,465

Total Liabilities and Equity		$44,113,257		$41,932,515		$42,388,735		$41,953,068		$41,484,998


(1)	Net of allowance for doubtful accounts of $41,204 and $33,048 as of December 31, 2023 and December 31, 2022, respectively.
(2)	Series J Cumulative Redeemable Preferred Stock, 5.250%, $200,000 liquidation preference ($25.00 per share), 8,000 shares issued and outstanding as of December 31, 2023 and December 31, 2022.
(3)	Series K Cumulative Redeemable Preferred Stock, 5.850%, $210,000 liquidation preference ($25.00 per share), 8,400 shares issued and outstanding as of December 31, 2023 and December 31, 2022.
(4)	Series L Cumulative Redeemable Preferred Stock, 5.200%, $345,000 liquidation preference ($25.00 per share), 13,800 shares issued and outstanding as of December 31, 2023 and December 31, 2022.
(5)	Common Stock: 311,608 and 291,148 shares issued and outstanding as of December 31, 2023 and December 31, 2022, 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-23	30-Sep-23	30-Jun-23	31-Mar-23	31-Dec-22

Net Income / (Loss) Available to Common Stockholders		$18,122	$723,440	$108,003	$58,547	($6,093)
Interest		113,638	110,767	111,116	102,220	86,882
Income tax expense (benefit)		20,724	17,228	16,173	21,454	(17,676)
Depreciation & amortization		420,475	420,613	432,573	421,198	430,130
EBITDA		$572,958	$1,272,048	$667,866	$603,420	$493,243
Unconsolidated JV real estate related depreciation & amortization		64,833	43,214	35,386	33,719	33,927
Unconsolidated JV interest expense and tax expense		42,140	27,000	32,105	18,556	53,481
Severance, equity acceleration and legal expenses		7,565	2,682	3,652	4,155	15,980
Transaction and integration expenses		40,226	14,465	17,764	12,267	17,350
(Gain) / loss on sale of investments		103	(810,688)	(89,946)	—	6
Provision for impairment		5,363	113,000	—	—	3,000
Other non-core adjustments, net		(35,439)	1,719	22,132	(14,604)	15,127
Non-controlling interests		(8,419)	12,320	(2,538)	111	(3,326)
Preferred stock dividends		10,181	10,181	10,181	10,181	10,181
Adjusted EBITDA		$699,509	$685,943	$696,604	$667,804	$638,969


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

Three Months Ended

Financial Ratios

31-Dec-23

30-Sep-23

30-Jun-23

31-Mar-23

31-Dec-22

Total GAAP interest expense

$113,638

$110,767

$111,116

$102,220

$86,882

Capitalized interest

33,032

29,130

27,883

26,771

24,581

Change in accrued interest and other non-cash amounts

(66,013)

44,183

(60,612)

38,137

(67,909)

Cash Interest Expense ⁽²⁾

$80,657

$184,081

$78,387

$167,128

$43,554

Preferred stock dividends

10,181

Total Fixed Charges ⁽³⁾

$156,851

$150,079

$149,181

$139,172

$121,645

Coverage

Interest coverage ratio ⁽⁴⁾

4.0x

4.3x

4.5x

4.7x

5.3x

Cash interest coverage ratio ⁽⁵⁾

6.4x

3.4x

7.4x

3.7x

11.9x

Fixed charge coverage ratio ⁽⁶⁾

3.8x

4.1x

4.2x

4.4x

4.9x

Cash fixed charge coverage ratio ⁽⁷⁾

5.8x

3.2x

6.6x

3.5x

10.0x

Leverage

Debt to total enterprise value ⁽⁸⁾⁽⁹⁾

28.6 %

30.6 %

33.3 %

37.3 %

35.2 %

Debt-plus-preferred-stock-to-total-enterprise-value ^(9)(10)

29.8 %

32.0 %

34.7 %

38.9 %

36.8 %

Pre-tax income to interest expense ⁽¹¹⁾

1.2x

7.7x

2.0x

1.7x

1.0x

Net Debt-to-Adjusted EBITDA ⁽¹²⁾

6.2x

6.3x

6.8x

7.1x

6.9x


(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, and preferred stock 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 and preferred stock dividends (including our pro rata share of unconsolidated joint venture cash fixed charges).
(8)	Total debt 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 pro rata share of unconsolidated joint venture debt, less cash and cash equivalents (including Digital Realty's pro rata share of unconsolidated joint venture cash) divided by the product of Adjusted EBITDA (including Digital Realty's pro rata share of unconsolidated joint venture EBITDA), multiplied by four.

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 (i) gains (or losses) from real estate transactions, (ii) provision for impairment, real estate related depreciation and amortization (excluding amortization of deferred financing costs), (iii) unconsolidated JV real estate related depreciation & amortization, (iv) non-controlling interests in operating partnership, (v) depreciation related to non-controlling interests and (vi) 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) other non-core revenue adjustments, (ii) transaction and integration expenses, (iii) loss from early extinguishment of debt, (iv) gain on / issuance costs associated with redeemed preferred stock, (v) severance, equity acceleration and legal expenses, (vi) gain/loss on FX revaluation, 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 / (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, (i) unconsolidated joint venture real estate related depreciation & amortization, (ii) unconsolidated joint venture interest expense and tax, (iii) severance, equity acceleration and legal expenses, (iv) transaction and integration expenses, (v) gain (loss) on sale / deconsolidation, (vi) provision for impairment, (vii) other non-core adjustments, net, (viii) non-controlling interests, (ix) preferred stock dividends, and (x) issuance costs associated with redeemed preferred stock. Adjusted EBITDA is EBITDA excluding (i) unconsolidated joint venture real estate related depreciation & amortization, (ii) unconsolidated joint venture interest expense and tax, (iii) severance, equity acceleration and legal expenses, (iv) transaction and integration expenses, (v) gain (loss) on sale / deconsolidation, (vi) provision for impairment, (vii) other non-core adjustments, net, (vii) non-controlling interests, (ix) preferred stock dividends, and (x) gain on / 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. Same-Capital Cash NOI represents buildings owned as of December 31, 2021 of the prior year with less than 5% of total rentable square feet under development and excludes buildings that were undergoing, or were expected to undergo, development activities in 2022-2023, buildings classified as held for sale, and buildings sold or contributed to joint ventures for all periods presented (prior period numbers adjusted to reflect current same-capital pool). 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 as total debt at balance sheet carrying value, plus capital lease obligations, plus Digital Realty's pro rata share of unconsolidated joint venture debt, less cash and cash equivalents (including Digital Realty's pro rata share of unconsolidated joint venture cash) divided by the product of Adjusted EBITDA (including Digital Realty's pro rata share of unconsolidated joint venture EBITDA), multiplied by four.

Debt-plus-preferred-to-total enterprise value is total debt plus preferred stock divided by total debt 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 and preferred stock dividends. For the quarter ended December 31, 2023, GAAP interest expense was $114 million, capitalized interest was $33 million and preferred stock dividends was $10 million.


Reconciliation of Net Operating Income (NOI)	Three Months Ended						Twelve Months Ended
(in thousands)	31-Dec-23		30-Sep-23		31-Dec-22		31-Dec-23		31-Dec-22

Operating income		$134,035		$58,231		$120,981		$524,461		$589,969

Fee income		(14,330)		(7,819)		(7,508)		(44,926)		(24,506)
Other income		(144)		—		(168)		(1,963)		(4,645)
Depreciation and amortization		420,475		420,613		430,130		1,694,859		1,577,933
General and administrative		109,235		108,039		104,452		431,004		398,669
Severance, equity acceleration and legal expenses		7,565		2,682		15,980		18,054		23,498
Transaction expenses		40,226		14,465		17,350		84,722		68,766
Provision for impairment		5,363		113,000		3,000		118,363		3,000
Other expenses		5,580		1,295		3,615		7,529		12,438

Net Operating Income		$708,003		$710,505		$687,831		$2,832,102		$2,645,122


Cash Net Operating Income (Cash NOI)

Net Operating Income		$708,003		$710,505		$687,831		$2,832,102		$2,645,122

Straight-line rental revenue		(22,085)		(14,185)		(32,226)		(40,480)		(69,998)
Straight-line rental expense		(4,745)		1,632		(680)		(2,901)		2,857
Above- and below-market rent amortization		(856)		(1,127)		(762)		(4,404)		(696)

Cash Net Operating Income		$680,317		$696,826		$654,164		$2,784,317		$2,577,283



Constant Currency CFFO Reconciliation	Three Months Ended						Twelve Months Ended
(in thousands, except per share data)	31-Dec-23		30-Sep-23		31-Dec-22		31-Dec-23		31-Dec-22

Core FFO ⁽¹⁾		$508,417				$487,638		$2,009,820		$1,959,444
Core FFO impact of holding '22 Exchange Rates Constant ⁽²⁾		(3,781)				—		(3,964)		—

Constant Currency Core FFO		$504,636				$487,638		$2,005,856		$1,959,444
Weighted-average shares and units outstanding - diluted		312,356				295,519		305,138		292,528
Constant Currency CFFO Per Share		$1.62				$1.65		$6.57		$6.70


1)	As reconciled to net income above.
2)	Adjustment calculated by holding currency translation rates for 2023 constant with average currency translation rates that were applicable to the same periods in 2022.

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 economic outlook, our expected investment and expansion activity, anticipated continued demand for our products and service, 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, our product offerings, available inventory, 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, constant currency Core FFO, adjusted FFO, and net income, 2024 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, 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;
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;
global supply chain or procurement disruptions, or increased supply chain costs;
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;
the expected operating performance of anticipated near-term acquisitions and descriptions relating to these expectations;
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, 2022, and other filings with the U.S. Securities and Exchange Commission. Those risks continue to be relevant to our performance and financial condition. Moreover, we operate in a 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, Interxion, Turn-Key Flex, Powered Base Building, ServiceFabric, AnyScale Colo, Pervasive Data Center Architecture, PlatformDIGITAL, PDx, Data Gravity Index and Data Gravity Index DGx are registered trademarks and service marks of Digital Realty Trust, Inc. in the United States and/or other countries. All other names, trademarks and service marks are the property of their respective owners.

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SOURCE Digital Realty Trust

FAQ

What was the net income available to common stockholders per share in Q4 2023?

Digital Realty reported net income available to common stockholders of $0.08 per share in Q4 2023.

What was the revenue reported by Digital Realty in Q4 2023?

Digital Realty reported revenues of $1.4 billion in the fourth quarter of 2023.

What was the Core FFO per share reported by Digital Realty in Q4 2023?

Excluding certain items, Digital Realty delivered Core FFO per share of $1.63 in Q4 2023.

What is the 2024 Core FFO per share outlook for Digital Realty?

Digital Realty introduced a 2024 Core FFO per share outlook of $6.60 - $6.75.

How much debt did Digital Realty have outstanding as of December 31, 2023?

Digital Realty had approximately $17.4 billion of total debt outstanding as of December 31, 2023.

What was the total revenue estimate for Digital Realty in the 2024 outlook?

The total revenue estimate for Digital Realty in the 2024 outlook is $5.550 - $5.650 billion.

Digital Realty Reports Fourth Quarter 2023 Results

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What was the net income available to common stockholders per share in Q4 2023?

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Digital Realty Reports Fourth Quarter 2023 Results

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What was the net income available to common stockholders per share in Q4 2023?

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