Summary
Digital Realty Trust (DLR) reported continued growth in its data center portfolio during the second quarter of 2012, demonstrating resilience amidst a challenging global economic environment. The company expanded its property count and rental revenues, driven by both new acquisitions and strong leasing activity within its existing "same store" properties. While facing headwinds from macroeconomic concerns and interest rate sensitivity, DLR maintained a conservative leverage ratio of approximately 27% debt to total enterprise value, indicating financial prudence. The company's strategic focus on technology-related real estate appears to be paying off, with healthy occupancy rates and a pipeline of development and redevelopment projects poised to drive future growth. Investors should note the company's proactive capital management, including successful equity issuances to fund growth and manage its balance sheet. Operational performance highlights include a notable increase in total operating revenues, driven primarily by rental income and tenant reimbursements, underscoring demand for data center space. Despite rising operating expenses and a slight increase in construction management fees, DLR's operating income saw improvement. The company's liquidity position remains solid, supported by cash flow from operations and substantial availability under its global revolving credit facility. DLR continues to prioritize its REIT status by distributing dividends, which are funded through operating partnership distributions. The company's proactive approach to managing market risks, including interest rate and foreign currency fluctuations, provides a degree of stability in an uncertain economic landscape.
Financial Highlights
30 data points| Revenue | $303.70M |
| Operating Expenses | $215.25M |
| Operating Income | $88.45M |
| Interest Expense | $37.68M |
| Net Income | $52.33M |
| EPS (Basic) | $0.38 |
| EPS (Diluted) | $0.38 |
| Shares Outstanding (Basic) | 109.76M |
| Shares Outstanding (Diluted) | 110.17M |
Key Highlights
- 1Total operating revenues increased by $35.8 million (13.4%) to $303.7 million for the three months ended June 30, 2012, compared to $267.9 million for the same period in 2011.
- 2The company acquired nine new properties in the twelve months ended June 30, 2012, expanding its portfolio to 105 properties with 20.1 million net rentable square feet.
- 3Occupancy rate remained strong at 93.5% of net rentable square feet (excluding redevelopment space) as of June 30, 2012.
- 4Leverage remained conservative, with a debt-to-total enterprise value ratio of approximately 27% as of June 30, 2012.
- 5Digital Realty Trust successfully raised significant capital through equity offerings (ATM program and Series F preferred stock) and debt financings to fund acquisitions and development.
- 6The company reported a net income of $54.0 million for the three months ended June 30, 2012, an increase from $38.2 million in the prior year period.
- 7Rental rates on renewed space saw increases, with Turn-Key FlexSM space up 4.4% and Powered Base Building space up 22.1% on a GAAP basis compared to expiring rents for the six months ended June 30, 2012.