Summary
Digital Realty Trust, Inc. (DLR) reported its third-quarter 2010 financial results, showing continued growth in total operating revenues, driven by both the acquisition of new properties and increased leasing activity in its existing portfolio. The company expanded its portfolio significantly, adding 17 properties in the twelve months leading up to September 30, 2010. Despite global economic uncertainties, DLR maintained a high occupancy rate of 95.0% (excluding space held for redevelopment) and demonstrated strong performance in its core business of investing in technology-related real estate. The company actively managed its capital structure, issuing new debt and equity to fund its growth initiatives and acquisitions. DLR also focused on optimizing its balance sheet, including the redemption of preferred stock. The company's robust acquisition pipeline and strategic focus on datacenter real estate position it for continued expansion, although it remains exposed to risks associated with economic conditions, interest rates, and tenant solvency.
Financial Highlights
22 data points| Revenue | $237.49M |
| Operating Expenses | $177.09M |
| Operating Income | $60.40M |
| Interest Expense | $36.74M |
| Net Income | $23.04M |
| EPS (Basic) | $0.11 |
| EPS (Diluted) | $0.11 |
| Shares Outstanding (Basic) | 87.91M |
| Shares Outstanding (Diluted) | 90.14M |
Key Highlights
- 1Total operating revenues increased by approximately 45% to $237.5 million for the three months ended September 30, 2010, compared to $163.2 million in the prior year period.
- 2The company's portfolio grew to 95 properties with 16.4 million rentable square feet, up from 78 properties and 13.8 million rentable square feet in the prior year.
- 3Occupancy rate remained strong at 95.0% as of September 30, 2010 (excluding 1.9 million square feet held for redevelopment).
- 4DLR actively raised capital through debt and equity offerings, including $500 million in 5.875% notes due 2020 and $375 million in 4.50% notes due 2015, to fund acquisitions and development.
- 5Interest expense increased significantly due to higher debt levels and new issuances, rising from $22.6 million to $36.7 million for the three-month period.
- 6The company redeemed all outstanding shares of its 8.50% Series A Cumulative Redeemable Preferred Stock, demonstrating proactive balance sheet management.
- 7Space held for redevelopment represented approximately 12% of the total rentable space, indicating ongoing investment in future growth opportunities.