10-QPeriod: Q1 FY2011

DIGITAL REALTY TRUST, INC. Quarterly Report for Q1 Ended Mar 31, 2011

Filed May 9, 2011For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) reported a strong first quarter for 2011, with total operating revenues increasing by 30.7% year-over-year to $250.7 million, driven by significant property acquisitions and new leasing activity. The company's portfolio expanded to 96 properties comprising 16.9 million rentable square feet, reflecting a strategic growth initiative. Despite a challenging economic environment, DLR maintained a high occupancy rate of 93.5% (excluding space held for redevelopment), indicating the resilience of demand for its specialized technology-related real estate. Financially, DLR demonstrated robust operational performance with operating income increasing significantly. The company also managed its capital structure effectively, maintaining a debt-to-total enterprise value ratio of approximately 33%, well within its target of 60%. This financial discipline, coupled with consistent revenue growth and a well-occupied, expanding portfolio, positions DLR favorably for continued performance.

Financial Highlights

24 data points
Beta

Revenue

$250.74M

Net Income

$37.50M

15.0% Net Margin

EPS (Diluted)

$0.33

Cash & Equivalents

$44.37M

Free Cash Flow

$64.49M

Financial Statements
Beta
Revenue$250.74M
Operating Expenses$176.08M
Operating Income$74.67M
Interest Expense$36.08M
Net Income$37.50M
EPS (Basic)$0.34
EPS (Diluted)$0.33
Shares Outstanding (Basic)91.43M
Shares Outstanding (Diluted)92.60M

Key Highlights

  • 1Total operating revenues surged 30.7% to $250.7 million in Q1 2011 compared to Q1 2010.
  • 2The company's property portfolio grew to 96 properties with 16.9 million rentable square feet by March 31, 2011.
  • 3Occupancy rate remained strong at 93.5% (excluding space held for redevelopment).
  • 4Operating income saw a substantial increase, reflecting efficient operations and revenue growth.
  • 5Debt-to-total enterprise value ratio stood at approximately 33%, indicating prudent financial leverage.
  • 6The company successfully acquired 12 new properties within the twelve months leading up to March 31, 2011.
  • 7International operations contributed $25.7 million in operating revenues for the first quarter of 2011.

Frequently Asked Questions

DLR's revenue growth in the first quarter of 2011 was primarily driven by the acquisition of 12 new properties and strong leasing activity in its existing portfolio, which led to an increase in rental and tenant reimbursement revenues.

DLR is managing its debt prudently. As of March 31, 2011, its ratio of debt to total enterprise value was approximately 33%, which is well within its stated target of limiting indebtedness to 60% of total enterprise value. The company also has a significant portion of its debt as fixed-rate or hedged variable-rate debt, mitigating interest rate risk.

DLR highlighted several risks including global economic and credit conditions, decreases in IT spending, tenant bankruptcy or default, increased interest rates and operating costs, competition in the data center space, and challenges in acquiring and integrating new properties. Changes in climate change legislation and its potential impact on energy costs were also noted.

As of March 31, 2011, DLR had approximately 2.2 million square feet of space held for redevelopment. The company's strategy involves investing capital to develop this space into datacenter facilities, such as Turn-Key Datacenters®, Powered Base Buildings®, and build-to-suit options, aiming to lease it at favorable rates.