01—Abstract
Summary
Summary of the 10-K filed March 2, 2020. Cited figures are marked; the original filing is the authoritative source.
Digital Realty Trust, Inc. (DLR) reported its full-year 2019 results, demonstrating continued growth and a significant global footprint in the data center industry.
The company's strategy focuses on maximizing long-term growth in earnings and funds from operations, prudently allocating capital, and expanding its global reach. Key strategic initiatives include pursuing accretive investments, preserving balance sheet flexibility, leveraging technology for diverse product offerings, and driving operating efficiencies. The company's portfolio comprises 225 data centers across 36 major metropolitan areas on five continents, with a significant portion of revenue generated in key markets like Northern Virginia and Chicago.
DLR's customer base is diversified across various industry verticals, with no single customer accounting for a dominant share of revenue. The company is actively engaged in development projects, with substantial square footage under active development and held for future development, indicating a commitment to future growth. A significant event during the period was the announcement of the InterXion combination, an exchange offer expected to close in 2020, which will expand DLR's presence across Europe.
The company also made strategic moves to strengthen its portfolio through joint ventures and property sales, enhancing its financial flexibility and focus on core assets. Despite global economic uncertainties, DLR maintains a strong market position, supported by its extensive network, scale, and commitment to operational resilience and sustainability.
02—Key points
Key Highlights
- Digital Realty Trust, Inc. operated 225 data centers across 36 metropolitan areas on five continents as of December 31, 2019, with a total of approximately 36.6 million rentable square feet.
- The company's portfolio was leased to over 2,000 companies, with the top 20 customers representing approximately 53.2% of total annualized rent, indicating a diversified customer base.
- Total operating revenues for the year ended December 31, 2019, were $3.21 billion, an increase from $3.05 billion in 2018, driven by rental and other services.
- The company maintained a robust development pipeline with approximately 4.5 million square feet under active development and 1.8 million square feet held for future development.
- Digital Realty announced a significant strategic move with the InterXion combination, an exchange offer expected to close in 2020, aimed at expanding its European presence.
- The company's sustainability efforts were recognized, including receiving the Nareit 'Leader in the Light' award for data centers and issuing a green bond.
- Debt management remained a focus, with a target debt-to-adjusted EBITDA ratio at or below 5.5x and a commitment to preserving balance sheet flexibility.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2019filed March 2, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $3.21B$3.05B | +5.3% |
| Operating Expenses | $2.62B$2.50B | +4.7% |
| Operating Income | $594.22M$549.79M | +8.1% |
| Interest Expense | $353.06M$321.53M | +9.8% |
| Net Income | $579.76M$331.25M | +75.0% |
| EPS (Basic) | $2.37$1.21 | +95.9% |
| EPS (Diluted) | $2.35$1.21 | +94.2% |
| Shares Outstanding (Basic) | 208.33M206.04M | +1.1% |
| Shares Outstanding (Diluted) | 209.46M206.67M | +1.3% |
05—Questions
Frequently Asked Questions
What was Digital Realty's total operating revenue for 2019?
Digital Realty's total operating revenues for the year ended December 31, 2019, were $3.21 billion.
How diversified is Digital Realty's customer base?
Digital Realty serves over 2,000 customers across various industry verticals. The top 20 customers accounted for approximately 53.2% of the total annualized rent as of December 31, 2019, with no single customer representing more than 8.0% of the aggregate annualized rent, indicating a well-diversified customer base.
What is the status of Digital Realty's development pipeline?
As of December 31, 2019, Digital Realty had approximately 4.5 million square feet of space under active development and approximately 1.8 million square feet of space held for future development, indicating a significant pipeline for future growth and expansion.
What major strategic transactions were highlighted in the filing?
A key strategic event was the announcement of the InterXion combination, an exchange offer expected to close in 2020, which is intended to expand Digital Realty's presence across Europe. The company also completed a joint venture with Mapletree for three data centers and sold 10 Powered Base Building properties, demonstrating active portfolio management.
06—Continue