8-KRegulation FD

DIGITAL REALTY TRUST, INC. 8-K Report, Regulation FD Disclosure (Mar 16, 2011)

Filed March 16, 2011For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

This 8-K filing from DIGITAL REALTY TRUST, INC. (DLR) on March 16, 2011, primarily serves as a Regulation FD disclosure regarding adjustments to the conversion rates of its Series C and Series D Cumulative Convertible Preferred Stock. These adjustments were triggered by dividend payments exceeding the "reference dividend" thresholds defined in the respective Articles Supplementary. The company has been paying, and expects to continue paying, dividends in excess of these reference amounts for the quarters ending December 31, 2010, and March 31, 2011. As a direct consequence of these higher dividend payments, the conversion rates for the Series C Preferred Stock have been adjusted to 0.5350 shares of common stock per $25.00 liquidation preference, and for the Series D Preferred Stock to 0.6120 shares of common stock per $25.00 liquidation preference, both effective March 11, 2011. These adjustments mean that preferred stockholders will now receive slightly more shares of DLR common stock if they choose to convert their preferred shares. The filing also lists the current conversion rates for exchangeable senior debentures.

Key Highlights

  • 1Adjusted conversion rates for Series C Cumulative Convertible Preferred Stock to 0.5350 shares of common stock per $25.00 liquidation preference.
  • 2Adjusted conversion rates for Series D Cumulative Convertible Preferred Stock to 0.6120 shares of common stock per $25.00 liquidation preference.
  • 3Conversion rate adjustments are effective as of March 11, 2011.
  • 4The adjustments were triggered by dividends paid exceeding the established "reference dividend" for both Series C and Series D preferred stock.
  • 5The company confirmed dividend payments in excess of reference amounts for the quarters ending December 31, 2010, and March 31, 2011.
  • 6Current conversion rates for Series C, Series D preferred stock, and exchangeable senior debentures are provided.

Frequently Asked Questions

The main purpose of this 8-K filing is to disclose adjustments to the conversion rates of Digital Realty Trust's Series C and Series D Cumulative Convertible Preferred Stock, as required by Regulation FD. These adjustments were necessitated by the company paying dividends in excess of the "reference dividend" set forth in the preferred stock's governing documents.

The conversion rates have been adjusted to reflect the higher dividend payments. For Series C preferred stock, the new rate is 0.5350 shares of common stock per $25.00 liquidation preference. For Series D preferred stock, it's 0.6120 shares of common stock per $25.00 liquidation preference. This means that if these preferred stockholders decide to convert their shares into common stock, they will receive a slightly higher number of common shares than before the adjustment.

The conversion rates changed because Digital Realty Trust has declared and paid dividends on its Series C and Series D Cumulative Convertible Preferred Stock that exceeded the "reference dividend" amounts specified in their respective Articles Supplementary. These provisions stipulate that exceeding the reference dividend triggers an adjustment to the conversion rate.

While the filing indicates the company is paying dividends above the reference amounts, which could be seen as a positive sign of cash flow, it's important to note that this filing is specifically about conversion rate adjustments. The company's overall financial health and future dividend policy should be assessed by reviewing their comprehensive financial statements and other disclosures, such as their annual reports and quarterly earnings releases. The filing does contain standard forward-looking statements and risk factors that should be considered.