Destination XL Group Inc
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Consumer Discretionary : Specialty Retail | Small Cap Blend
Company profile

Destination XL Group, Inc. is a specialty retailer of big and tall men's clothing with retail, wholesale and direct operations in the United States and Toronto, Canada. The Company operates under the trade names of Destination XL, DXL, DXL outlets, Casual Male XL and Casual Male XL outlets. It operates approximately 219 Destination XL stores, 16 DXL outlet stores, 32 Casual Male XL retail stores, 19 Casual Male XL outlet stores and a digital business, including an e-commerce site at dxl.com, a mobile site m.destinationXL.com and mobile application. The Company's segments include retail segment and wholesale business segment. Its retail segment operates store segment, which includes DXL Men’s Apparel stores, Casual Male XL retail stores, DXL outlet, and Casual Male XL outlet stores; and direct business segment, which includes online business, through its Website, application and third-party marketplace.

Closing Price
$5.42
Day's Change
-0.01 (-0.18%)
Bid
--
Ask
--
B/A Size
--
Day's High
5.51
Day's Low
5.11
Volume
(Heavy Day)
Volume:
2,670,631

10-day average volume:
881,117
2,670,631

DIGITAL REALTY REPORTS SECOND QUARTER 2022 RESULTS

4:32 pm ET July 28, 2022 (PR Newswire) Print

Digital Realty (NYSE: DLR), the largest global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions, announced today financial results for the second quarter of 2022. All per share results are presented on a fully diluted basis.

https://mma.prnewswire.com/media/483540/Digital_Realty_Trust_Logo.jpg

Highlights

-- Reported net income available to common stockholders of $0.19 per share in 2Q22, compared to $0.45 in 2Q21

-- Reported FFO per share of $1.55 in 2Q22, compared to $1.78 in 2Q21

-- Reported core FFO per share of $1.72 in 2Q22, compared to $1.54 in 2Q21

-- Signed total bookings during 2Q22 expected to generate $113 million of annualized GAAP rental revenue, including a $12 million contribution from interconnection

-- Updated 2022 core FFO per share outlook to $6.75 - $6.85; Reiterated 2022 constant-currency core FFO per share outlook of $6.95 - $7.05

Financial Results

Digital Realty reported revenues for the second quarter of 2022 of $1.1 billion, a 1% increase from the previous quarter and a 4% increase from the same quarter last year.

The company delivered second quarter of 2022 net income of $63.9 million, and net income available to common stockholders of $53.2 million, or $0.19 per diluted share, compared to $0.22 per diluted share in the previous quarter and $0.45 per diluted share in the same quarter last year.

Digital Realty generated second quarter of 2022 Adjusted EBITDA of $611 million, a 1% increase from the previous quarter and a 1% increase over the same quarter last year.

The company reported second quarter of 2022 funds from operations of $452 million, or $1.55 per share, compared to $1.60 per share in the previous quarter and $1.78 per share in the same quarter last year.

Excluding certain items that do not represent core expenses or revenue streams, Digital Realty delivered second quarter of 2022 core FFO per share of $1.72, compared to $1.67 per share in the previous quarter, and $1.54 per share in the same quarter last year.

Leasing Activity

In the second quarter, Digital Realty signed total bookings expected to generate $113 million of annualized GAAP rental revenue, including a $12 million contribution from interconnection.

"Demand for data center solutions continued to be strong through the second quarter, with healthy contributions from both hyperscale and enterprise segments," said Digital Realty Chief Executive Officer A. William Stein. "Customers are seeking to secure the capacity they require in advance of availability, as over half of our record development schedule is pre-leased, and tight conditions in many markets around the world are resulting in an improving pricing environment and rising occupancy."

The weighted-average lag between new leases signed during the second quarter of 2022 and the contractual commencement date was thirteen months.

In addition to new leases signed, Digital Realty also signed renewal leases representing $173 million of annualized GAAP rental revenue during the quarter. Rental rates on renewal leases signed during the second quarter of 2022 rolled up 3.4% on a cash basis and up 5.3% on a GAAP basis.

New leases signed during the second quarter of 2022 are summarized by region as follows:

                  Annualized GAAP
                  Base Rent                      GAAP Base Rent              GAAP Base Rent
The Americas      (in thousands)    Square Feet  per Square Foot  Megawatts  per Kilowatt
0-1 MW                    $15,583   63,303               $246     6.0                $217
> 1 MW                    15,537    137,937              113      14.1               92
Other (1)                 1,566     63,467               25       --                 --
Total                     $32,686   264,707              $123     20.1               $129
EMEA (2)
0-1 MW                    $18,301   71,568               $256     6.4                $238
> 1 MW                    43,760    347,280              126      34.0               107
Other (1)                 171       2,409                71       --                 --
Total                     $62,232   421,257              $148     40.4               $128
Asia Pacific (2)
0-1 MW                    $1,544    8,591                $180     0.4                $322
> 1 MW                    5,399     27,157               199      3.0                150
Other (1)                 25        327                  78       --                 --
Total                     $6,968    36,075               $193     3.4                $170
All Regions (2)
0-1 MW                    $35,428   143,461              $247     12.8               $231
> 1 MW                    64,695    512,374              126      51.1               105
Other (1)                 1,763     66,203               27       --                 --
Total                     $101,886  722,038              $141     63.9               $131
Interconnection           $11,515   N/A                  N/A      N/A                N/A
Grand Total               $113,401  722,038              $141     63.9               $131
Note:  Totals may not foot due to rounding differences.
(1)                         Other includes Powered Base Building(R) shell capacity as well as storage and office space within fully improved data center facilities.
(2)                         Based on quarterly average exchange rates during the three months ended June 30, 2022.

Investment Activity

During the second quarter, Digital Realty acquired an 8-acre parcel in Dublin for $6 million, which can support up to 40 megawatts of IT load. Digital Realty also acquired 2.4 acres in Barcelona for $11 million, which can support up to 15 megawatts of IT load. Lastly, Digital Realty acquired 34 acres in Frankfurt for $60 million, which can support up to 70 megawatts of IT load.

Also during the second quarter, Digital Realty announced a joint venture with Mivne Real Estate (K.D.) (TASE: MVNE) for entry into the Israeli market. The joint venture, which will operate under the brand name Digital Realty Mivne, will serve as a strategic partnership between Digital Realty and Mivne, a market-leading real estate developer, owner and operator that has developed many large-scale projects across Israel and has an extensive land bank. Digital Realty Mivne expects to develop a multi-tenant data center campus in Petah Tikvah, the primary connectivity hub in Israel. The data center campus will support the development of up to 20 megawatts of IT load. Delivery of the initial phase is anticipated in 2023, subject to customer demand.

Subsequent to the close of the second quarter, Digital Realty acquired 38 acres in Paris for $11 million and 9 acres in Stockholm for $43 million.

Balance Sheet

Digital Realty had approximately $14.3 billion of total debt outstanding as of June 30, 2022, comprised of $14.1 billion of unsecured debt and approximately $0.2 billion of secured debt. At the end of the second quarter of 2022, net debt-to-Adjusted EBITDA was 6.2x, debt-plus-preferred-to-total enterprise value was 28.5% and fixed charge coverage was 6.0x. Pro forma for settlement of the $1 billion forward equity offering, net debt-to-adjusted EBITDA was 5.8x and fixed charge coverage was 6.2x.

During the second quarter of 2022, Digital Realty completed the following financing transactions:

-- Amended its Global Senior Credit Agreement to increase the size from $3.0 billion to $3.75 billion.

-- Entered into an at-the-market (ATM) equity offering agreement of up to $1.5 billion. The prior program, which had $577.6 million remaining, was terminated.

2022 Outlook

Digital Realty updated its 2022 core FFO per share outlook of $6.75-$6.85 and reiterated its 2022 constant-currency core FFO per share outlook of $6.95 - $7.05. The assumptions underlying the outlook are summarized in the following table.

                                                      As of                    As of                    As of
Top-Line and Cost Structure                           February 17, 2022        April 28, 2022           July 28, 2022
Total revenue                                         $4.700 - $4.800 billion  $4.700 - $4.800 billion  $4.650 - $4.750 billion
Net non-cash rent adjustments (1)                     ($35 - $40 million)      ($45 - $50 million)      ($50 - $55 million)
Adjusted EBITDA                                       $2.475 - $2.525 billion  $2.475 - $2.525 billion  $2.450 - $2.500 billion
G&A                                                   $410 - $420 million      $410 - $420 million      $405 - $415 million
Internal Growth
Rental rates on renewal leases
Cash basis                                            Flat                     Slightly Positive        Slightly Positive
GAAP basis                                            Slightly positive        Up low-single-digits     Up low-single-digits
Year-end portfolio occupancy                          83.0% - 84.0%            83.0% - 84.0%            83.0% - 84.0%
"Same-capital" cash NOI growth (2)                    (2.5% - 3.5%)            (2.5% - 3.5%)            (3.5% - 4.5%)
Foreign Exchange Rates
U.S. Dollar / Pound Sterling                          $1.30 - $1.38            $1.25 - $1.35            $1.15 - $1.25
U.S. Dollar / Euro                                    $1.10 - $1.15            $1.05 - $1.10            $1.00 - $1.05
External Growth
Dispositions
Dollar volume                                         $0.5 - $1.0 billion      $0.5 - $1.0 billion      $0.5 - $1.0 billion
Cap rate                                              0.0% - 10.0%             0.0% - 10.0%             0.0% - 10.0%
Development
CapEx (3)                                             $2.3 - $2.5 billion      $2.3 - $2.5 billion      $2.2 - $2.4 billion
Average stabilized yields                             9.0% - 15.0%             9.0% - 15.0%             9.0% - 15.0%
Enhancements and other non-recurring CapEx (4)        $5 - $10 million         $5 - $10 million         $5 - $10 million
Recurring CapEx + capitalized leasing costs (5)       $210 - $220 million      $200 - $210 million      $200 - $210 million
Balance Sheet
Long-term debt issuance
Dollar amount                                         $1.8 - $2.0 billion      $1.8 - $2.0 billion      $1.8 - $2.0 billion
Pricing                                               1.5% - 2.0%              1.5% - 2.0%              2.0% - 2.5%
Timing                                                Early & Late 2022        Early & Late 2022        Early & Late 2022
Net income per diluted share                          $1.05 - $1.10            $1.05 - $1.10            $1.00 - $1.05
Real estate depreciation and (gain) / loss on sale    $5.35 - $5.35            $5.35 - $5.35            $5.35 - $5.35
Funds From Operations / share (NAREIT-Defined)        $6.40 - $6.45            $6.40 - $6.45            $6.35 - $6.40
Non-core expenses and revenue streams                 $0.40 - $0.45            $0.40 - $0.45            $0.40 - $0.45
Core Funds From Operations / share                    $6.80 - $6.90            $6.80 - $6.90            $6.75 - $6.85
Foreign currency translation adjustments              $0.10 - $0.10            $0.15 - $0.15            $0.20 - $0.20
Constant-Currency Core Funds From Operations / share  $6.90 - $7.00            $6.95 - $7.05            $6.95 - $7.05
(1) Net non-cash rent adjustments represent the sum of straight-line rental revenue and straight-line rent expense, as well as the amortization of above- and below-market leases (i.e., ASC 805 adjustments).
(2) The "same-capital" pool includes properties owned as of December 31, 2020 with less than 5% of total rentable square feet under development.  It excludes properties that were undergoing, or were expected to undergo, development activities in 2021-2022, properties classified as held for sale, and properties sold or contributed to joint ventures for all periods presented.
(3) Includes land acquisitions.
(4) Other non-recurring CapEx represents costs incurred to enhance the capacity or marketability of operating properties, such as network fiber initiatives and software development costs.
(5) Recurring CapEx represents non-incremental improvements required to maintain current revenues, including second-generation tenant improvements and leasing commissions.

Non-GAAP Financial Measures

This document contains non-GAAP financial measures, including FFO, core FFO and Adjusted EBITDA. A reconciliation from U.S. GAAP net income available to common stockholders to FFO, a reconciliation from FFO to core FFO, and definitions of FFO and core FFO are included as an attachment to this document. A reconciliation from U.S. GAAP net income available to common stockholders to Adjusted EBITDA, a definition of Adjusted EBITDA and definitions of net debt-to-Adjusted EBITDA, debt-plus-preferred-to-total enterprise value, cash NOI, and fixed charge coverage ratio are included as an attachment to this document.

Investor Conference Call

Prior to Digital Realty's investor conference call at 5:30 p.m. EDT / 2:30 p.m. PDT on July 28, 2022, a presentation will be posted to the Investors section of the company's website at https://investor.digitalrealty.com/. The presentation is designed to accompany the discussion of the company's second quarter 2022 financial results and operating performance. The conference call will feature Chief Executive Officer A. William Stein and President & Chief Financial Officer Andrew P. Power.

To participate in the live call, investors are invited to dial (888) 317-6003 (for domestic callers) or (412) 317-6061 (for international callers) and reference the conference ID# 6453950 at least five minutes prior to start time. A live webcast of the call will be available via the Investors section of Digital Realty's website at https://investor.digitalrealty.com/.

Telephone and webcast replays will be available after the call until August 28, 2022. The telephone replay can be accessed by dialing (877) 344-7529 (for domestic callers) or (412) 317-0088 (for international callers) and providing the conference ID# 1684177. The webcast replay can be accessed on Digital Realty's website.

About Digital Realty

Digital Realty brings companies and data together by delivering the full spectrum of data center, colocation and interconnection solutions. PlatformDIGITAL(R), the company's global data center platform, provides customers with a secure data "meeting place" and a proven Pervasive Datacenter Architecture (PDx(TM)) solution methodology for powering innovation and efficiently managing Data Gravity challenges. Digital Realty gives its customers access to the connected communities that matter to them with a global data center footprint of 290+ facilities in 50+ metros across 26 countries on six continents. To learn more about Digital Realty, please visit digitalrealty.com or follow us on LinkedIn and Twitter.

Contact Information

Andrew P. Power President & Chief Financial Officer Digital Realty (737) 281-0101

Jordan Sadler / Jim Huseby Investor Relations Digital Realty (737) 281-0101

Consolidated Quarterly Statements of Operations
Unaudited and Dollars in Thousands, Except Per Share Data
                                                                      Three Months Ended                                                    Six Months Ended
                                                                      30-Jun-22     31-Mar-22     31-Dec-21     30-Sep-21     30-Jun-21         30-Jun-22     30-Jun-21
Rental revenues                                                       $767,313      $751,962      $763,117      $773,195      $768,826          $1,519,275    $1,523,370
Tenant reimbursements - Utilities                                     218,198       224,547       195,340       189,060       169,743           442,745       354,716
Tenant reimbursements - Other                                         52,688        51,511        58,528        57,666        60,261            104,198       119,589
Interconnection & other                                               93,338        93,530        89,850        90,983        90,565            186,868       179,626
Fee income                                                            5,072         5,757         4,133         3,255         3,628             10,829        6,054
Other                                                                 2,713         15            200           18,977        165               2,728         224
Total Operating Revenues                                              $1,139,321    $1,127,323    $1,111,167    $1,133,135    $1,093,189        $2,266,644    $2,183,580
Utilities                                                             $223,426      $241,239      $213,933      $209,585      $185,010          $464,665      $361,057
Rental property operating                                             198,076       194,354       205,250       196,743       198,206           392,430       383,939
Property taxes                                                        47,213        46,526        42,673        55,915        42,795            93,738        91,800
Insurance                                                             3,836         3,698         3,507         4,718         5,703             7,534         9,201
Depreciation & amortization                                           376,967       382,132       378,883       369,035       368,981           759,099       738,714
General & administration                                              101,991       96,435        103,705       97,082        94,956            198,426       192,524
Severance, equity acceleration, and legal expenses                    3,786         2,077         1,003         1,377         2,536             5,863         4,963
Transaction and integration expenses                                  13,586        11,968        12,427        13,804        7,075             25,554        21,195
Impairment of investments in real estate                              --            --            18,291        --            --                --            --
Other expenses                                                        70            7,657         (1)           510           2,298             7,727         2,041
Total Operating Expenses                                              $968,950      $986,087      $979,669      $948,770      $907,561          $1,955,037    $1,805,433
Operating Income                                                      $170,371      $141,236      $131,498      $184,365      $185,627          $311,607      $378,146
Equity in earnings (loss) of unconsolidated joint ventures            (34,088)      60,958        (7,714)       40,884        52,143            26,870        29,112
Gain / (loss) on sale of investments                                  --            2,770         1,047,011     (635)         499               2,770         334,420
Interest and other income (expense), net                              13,008        3,051         (4,349)       (2,947)       10,124            16,059        2,938
Interest (expense)                                                    (69,023)      (66,725)      (71,762)      (71,417)      (75,014)          (135,748)     (150,667)
Income tax (expense)                                                  (16,406)      (13,244)      (3,961)       (13,709)      (47,582)          (29,650)      (55,129)
Loss from early extinguishment of debt                                --            (51,135)      (325)         --            --                (51,135)      (18,347)
Net Income                                                            $63,862       $76,911       $1,090,397    $136,541      $125,799          $140,773      $520,474
Net (income) attributable to noncontrolling interests                 (436)         (3,629)       (22,587)      (2,266)       (4,544)           (4,065)       (13,298)
Net Income Attributable to Digital Realty Trust, Inc.                 $63,426       $73,282       $1,067,811    $134,275      $121,255          $136,708      $507,177
Preferred stock dividends, including undeclared dividends             (10,181)      (10,181)      (10,181)      (10,181)      (11,885)          (20,363)      (25,399)
Gain on / (Issuance costs associated with) redeemed preferred stock   --            --            --            --            18,000            --            18,000
Net Income Available to Common Stockholders                           $53,245       $63,101       $1,057,630    $124,094      $127,371          $116,346      $499,777
Weighted-average shares outstanding - basic                           284,694,064   284,525,992   283,869,662   283,105,966   281,791,855       284,610,492   281,445,252
Weighted-average shares outstanding - diluted                         285,109,903   285,025,099   284,868,184   283,799,538   282,433,857       284,979,709   282,075,611
Weighted-average fully diluted shares and units                       290,944,163   290,662,421   290,893,110   290,228,785   289,484,805       290,716,197   289,218,609
Net income per share - basic                                          $0.19         $0.22         $3.73         $0.44         $0.45             $0.41         $1.78
Net income per share - diluted                                        $0.19         $0.22         $3.71         $0.44         $0.45             $0.41         $1.77
Funds From Operations and Core Funds From Operations
Unaudited and in Thousands, Except Per Share Data
                                                                     Three Months Ended                                               Six Months Ended
Reconciliation of Net Income to Funds From Operations (FFO)             30-Jun-22   31-Mar-22   31-Dec-21     30-Sep-21   30-Jun-21       30-Jun-22   30-Jun-21
Net Income Available to Common Stockholders                             $53,245     $63,101     $1,057,630    $124,094    $127,371        $116,346    $499,777
Adjustments:
Non-controlling interest in operating partnership                       1,500       1,600       23,100        3,000       3,200           3,100       13,000
Real estate related depreciation & amortization (1)                     369,327     374,162     372,447       362,728     363,640         743,489     728,336
Unconsolidated JV real estate related depreciation & amortization       29,022      29,320      24,146        21,293      20,983          58,341      40,361
(Gain) on real estate transactions (2)                                  (1,144)     (2,770)     (1,047,010)   (63,798)    (499)           (3,914)     (334,420)
Impairment of investments in real estate                                -           -           18,291        -           -               -           -
Funds From Operations - diluted                                         $451,949    $465,412    $448,602      $447,317    $514,695        $917,362    $947,055
Weighted-average shares and units outstanding - basic                   290,528     290,163     289,895       289,542     288,843         290,346     288,588
Weighted-average shares and units outstanding - diluted (3)             290,944     290,662     290,893       290,228     289,485         290,716     289,219
Funds From Operations per share - basic                                 $1.56       $1.60       $1.55         $1.54       $1.78           $3.16       $3.28
Funds From Operations per share - diluted (3)                           $1.55       $1.60       $1.54         $1.54       $1.78           $3.16       $3.27
                                                                     Three Months Ended                                               Six Months Ended
Reconciliation of FFO to Core FFO                                       30-Jun-22   31-Mar-22   31-Dec-21     30-Sep-21   30-Jun-21       30-Jun-22   30-Jun-21
Funds From Operations - diluted                                         $451,949    $465,412    $448,602      $447,317    $514,695        $917,362    $947,055
Other non-core revenue adjustments (4)                                  456         13,916      9,859         (18,066)    (11,122)        14,372      (11,181)
Transaction and integration expenses                                    13,586      11,968      12,427        13,804      7,075           25,554      21,195
Loss from early extinguishment of debt                                  -           51,135      325           -           -               51,135      18,347
(Gain on) / Issuance costs associated with redeemed preferred stock     -           -           -             -           (18,000)        -           (18,000)
Severance, equity acceleration, and legal expenses (5)                  3,786       2,077       1,003         1,377       2,536           5,863       4,963
(Gain) / Loss on FX revaluation                                         29,539      (67,676)    14,308        33,773      (51,649)        (38,137)    (17,577)
Other non-core expense adjustments                                      70          7,657       (1)           1,004       2,298           7,727       (16,942)
Core Funds From Operations - diluted                                    $499,386    $484,490    $486,525      $479,209    $445,833        $983,875    $927,859
Weighted-average shares and units outstanding - diluted (3)             290,944     290,662     290,893       290,228     289,485         290,716     289,219
Core Funds From Operations per share - diluted (3)                      $1.72       $1.67       $1.67         $1.65       $1.54           $3.38       $3.21
(1) Real Estate Related Depreciation & Amortization                  Three Months Ended                                               Six Months Ended
                                                                        30-Jun-22   31-Mar-22   31-Dec-21     30-Sep-21   30-Jun-21       30-Jun-22   30-Jun-21
Depreciation & amortization per income statement                        $376,967    $382,132    $378,883      $369,035    $368,981        759,099     738,714
Non-real estate depreciation                                            (7,640)     (7,970)     (6,436)       (6,307)     (5,341)         (15,610)    (10,377)
Real Estate Related Depreciation & Amortization                         $369,327    $374,162    $372,447      $362,728    $363,640        $743,489    $728,336
(2) For the fourth quarter 2021, the gain pertains to the contribution of 10 operating data center properties to Digital Core REIT in connection with the listing of Digital Core REIT as a standalone public company traded on the Singapore Exchange in December 2021.  For the third quarter 2021, the gain of $64 million represents Digital Realty's share of a gain recognized by an unconsolidated joint venture from the sale of a portfolio of assets owned by the entity and is included in equity in earnings of unconsolidated joint ventures in our consolidated income statement.
(3) For all periods presented, we have excluded the effect of dilutive series C, series J, series K and series L preferred stock, as applicable, that may be converted into common stock upon the occurrence of specified change in control transactions as described in the articles supplementary governing the series C, series J, series K and series L preferred stock, as applicable, which we consider highly improbable, and the effect of the physical settlement of our September 2021 forward sales agreements. See above for calculations of diluted FFO and the share count detail section that follows the reconciliation of core FFO to AFFO for calculations of weighted average common stock and units outstanding.  For definitions and discussion of FFO and core FFO, see the definitions section.
(4) Includes lease termination fees and certain other adjustments that are not core to our business. For the third quarter 2021, includes a $19 million promote received related to a sale of portfolio of assets within an unconsolidated joint venture. The promote is included in Other revenue in our consolidated income statement.
(5) Relates to severance and other charges related to the departure of company executives and integration-related severance.
Adjusted Funds From Operations (AFFO)
Unaudited and in Thousands, Except Per Share Data
                                                             Three Months Ended                                             Six Months Ended
Reconciliation of Core FFO to AFFO                              30-Jun-22   31-Mar-22   31-Dec-21   30-Sep-21   30-Jun-21       30-Jun-22   30-Jun-21
Core FFO available to common stockholders and unitholders       $499,386    $484,490    $486,525    $479,209    $445,833        $983,875    $927,859
Adjustments:
Non-real estate depreciation                                    7,640       7,970       6,436       6,307       5,341           15,610      10,377
Amortization of deferred financing costs                        3,330       3,634       3,515       3,625       3,718           6,964       7,256
Amortization of debt discount/premium                           1,193       1,214       1,107       1,138       1,166           2,407       2,300
Non-cash stock-based compensation expense                       15,799      14,453      15,097      15,082      15,578          30,253      31,675
Straight-line rental revenue                                    (17,278)    (18,810)    (16,497)    (11,969)    (16,139)        (36,089)    (34,631)
Straight-line rental expense                                    (2,237)     4,168       5,753       7,862       7,175           1,931       13,884
Above- and below-market rent amortization                       196         335         910         1,165       1,857           531         3,994
Deferred tax expense / (benefit)                                (769)       (1,604)     (13,731)    2,112       35,522          (2,372)     31,013
Leasing compensation & internal lease commissions               9,411       13,261      9,564       11,142      11,078          22,672      22,120
Recurring capital expenditures (1)                              (43,497)    (46,770)    (87,550)    (50,800)    (39,231)        (90,267)    (78,753)
AFFO available to common stockholders and unitholders (2)       $473,173    $462,341    $411,130    $464,872    $471,899        $935,514    $937,095
Weighted-average shares and units outstanding - basic           290,528     290,163     289,895     289,542     288,843         290,346     288,588
Weighted-average shares and units outstanding - diluted (3)     290,944     290,662     290,893     290,228     289,485         290,716     289,219
AFFO per share - diluted (3)                                    $1.63       $1.59       $1.41       $1.60       $1.63           $3.22       $3.24
Dividends per share and common unit                             $1.22       $1.22       $1.16       $1.16       $1.16           $2.44       $2.32
Diluted AFFO Payout Ratio                                       75.0 %      76.7 %      82.1 %      72.4 %      71.2 %          75.8 %      71.6 %
                                                             Three Months Ended                                             Six Months Ended
Share Count Detail                                              30-Jun-22   31-Mar-22   31-Dec-21   30-Sep-21   30-Jun-21       30-Jun-22   30-Jun-21
Weighted Average Common Stock and Units Outstanding             290,528     290,163     289,895     289,542     288,843         290,346     288,588
Add: Effect of dilutive securities                              416         499         998         686         642             370         631
Weighted Avg. Common Stock and Units Outstanding - diluted      290,944     290,662     290,893     290,228     289,485         290,716     289,219
(1) Recurring capital expenditures represent non-incremental building improvements required to maintain current revenues, including second-generation tenant improvements and external leasing commissions.  Recurring capital expenditures do not include acquisition costs contemplated when underwriting the purchase of a building, costs which are incurred to bring a building up to Digital Realty's operating standards, or internal leasing commissions.
(2) For a definition and discussion of AFFO, see the definitions section.  For a reconciliation of net income available to common stockholders to FFO and core FFO, see above.
(3) For all periods presented, we have excluded the effect of dilutive series C, series J, series K and series L preferred stock, as applicable, that may be converted into common stock upon the occurrence of specified change in control transactions as described in the articles supplementary governing the series C, series J, series K and series L preferred stock, as applicable, which we consider highly improbable, and the effect of the physical settlement of our September 2021 forward sales agreements.  See above for calculations of diluted FFO available to common stockholders and unitholders and for calculations of weighted average common stock and units outstanding.
Consolidated Balance Sheets
Unaudited and in Thousands, Except Share and Per Share Data
                                                                              30-Jun-22         31-Mar-22         31-Dec-21         30-Sep-21         30-Jun-21
Assets
Investments in real estate:
Real estate                                                                        $24,065,933       $23,769,712       $23,625,451       $23,384,809       $23,287,853
Construction in progress                                                           3,362,114         3,523,484         3,213,387         3,238,388         3,270,570
Land held for future development                                                   37,460            107,003           133,683           118,091           143,575
Investments in real estate                                                         $27,465,507       $27,400,199       $26,972,522       $26,741,289       $26,701,998
Accumulated depreciation and amortization                                          (6,665,118)       (6,467,233)       (6,210,281)       (6,159,294)       (5,919,650)
Net Investments in Properties                                                      $20,800,389       $20,932,966       $20,762,241       $20,581,995       $20,782,348
Investment in unconsolidated joint ventures                                        1,942,549         2,044,074         1,807,689         1,292,325         1,119,026
Net Investments in Real Estate                                                     $22,742,937       $22,977,040       $22,569,930       $21,874,320       $21,901,374
Cash and cash equivalents                                                          $99,226           $157,964          $142,698          $116,002          $120,482
Accounts and other receivables (1)                                                 797,208           774,579           671,721           610,416           630,086
Deferred rent                                                                      554,016           545,666           547,385           552,850           539,379
Customer relationship value, deferred leasing costs & other intangibles, net       2,521,390         2,640,795         2,735,486         2,871,622         2,956,027
Goodwill                                                                           7,545,107         7,802,440         7,937,440         8,062,914         8,185,931
Operating lease right-of-use assets                                                1,310,970         1,361,942         1,405,441         1,442,661         1,452,633
Other assets                                                                       385,202           420,119           359,459           316,863           365,308
Total Assets                                                                       $35,956,057       $36,680,546       $36,369,560       $35,847,648       $36,151,220
Liabilities and Equity
Global unsecured revolving credit facilities                                       $1,440,040        $943,325          $398,172          $832,322          $1,026,368
Unsecured senior notes, net of discount                                            12,695,568        13,284,650        12,903,370        13,012,790        12,659,043
Secured debt and other, net of premiums                                            158,699           160,240           146,668           242,427           242,410
Operating lease liabilities                                                        1,418,540         1,472,510         1,512,187         1,543,231         1,545,689
Accounts payable and other accrued liabilities                                     1,619,222         1,572,359         1,543,623         1,341,866         1,367,240
Deferred tax liabilities, net                                                      611,582           649,112           666,451           725,955           742,127
Accrued dividends and distributions                                                --                --                338,729           --                --
Security deposits and prepaid rent                                                 341,140           346,911           336,578           341,778           362,606
Total Liabilities                                                                  $18,284,791       $18,429,107       $17,845,778       $18,040,369       $17,945,483
Redeemable non-controlling interests - operating partnership                       41,047            42,734            46,995            40,920            41,490
Equity
Preferred Stock:  $0.01 par value per share, 110,000,000 shares authorized:
Series J Cumulative Redeemable Preferred Stock (2)                                 $193,540          $193,540          $193,540          $193,540          $193,540
Series K Cumulative Redeemable Preferred Stock (3)                                 203,264           203,264           203,264           203,264           203,264
Series L Cumulative Redeemable Preferred Stock (4)                                 334,886           334,886           334,886           334,886           334,886
Common Stock: $0.01 par value per share, 392,000,000 shares authorized (5)         2,824             2,824             2,824             2,818             2,806
Additional paid-in capital                                                         21,091,364        21,069,391        21,075,863        21,010,202        20,844,834
Dividends in excess of earnings                                                    (4,211,685)       (3,916,854)       (3,631,929)       (4,359,033)       (4,153,407)
Accumulated other comprehensive income (loss), net                                 (475,561)         (188,844)         (173,880)         (111,560)         31,733
Total Stockholders' Equity                                                         $17,138,632       $17,698,207       $18,004,568       $17,274,117       $17,457,656
Noncontrolling Interests
Noncontrolling interest in operating partnership                                   $432,213          $444,029          $425,337          $459,918          $513,897
Noncontrolling interest in consolidated joint ventures                             59,374            66,470            46,882            32,324            192,694
Total Noncontrolling Interests                                                     $491,587          $510,499          $472,219          $492,242          $706,591
Total Equity                                                                       $17,630,219       $18,208,706       $18,476,787       $17,766,359       $18,164,247
Total Liabilities and Equity                                                       $35,956,057       $36,680,546       $36,369,560       $35,847,648       $36,151,220
(1) Net of allowance for doubtful accounts of $37,799 and $28,574 as of June 30, 2022 and December 31, 2021, respectively.
(2) Series J Cumulative Redeemable Preferred Stock, 5.250%, $200,000 and $200,000 liquidation preference, respectively ($25.00 per share), 8,000,000 and 8,000,000 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively.
(3) Series K Cumulative Redeemable Preferred Stock, 5.850%, $210,000 and $210,000 liquidation preference, respectively ($25.00 per share), 8,400,000 and 8,400,000  shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively.
(4) Series L Cumulative Redeemable Preferred Stock, 5.200%, $345,000 and $345,000 liquidation preference, respectively ($25.00 per share), 13,800,000 and 13,800,000  shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively.
(5) Common Stock: 284,733,922 and 284,415,013 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively.
Reconciliation of Earnings Before Interest, Taxes, Depreciation & Amortization and Financial Ratios
Unaudited and Dollars in Thousands
                                                                                             Three Months Ended
Reconciliation of Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) (1)         30-Jun-22   31-Mar-22   31-Dec-21     30-Sep-21   30-Jun-21
Net Income Available to Common Stockholders                                                         $53,245     $63,101     $1,057,630    $124,094    $127,371
Interest                                                                                            69,023      66,725      71,762        71,417      75,014
Loss from early extinguishment of debt                                                              --          51,135      325           --          --
Income tax expense (benefit)                                                                        16,406      13,244      3,961         13,709      47,582
Depreciation & amortization                                                                         376,967     382,132     378,883       369,035     368,981
EBITDA                                                                                              $515,642    $576,337    $1,512,561    $578,255    $618,947
Unconsolidated JV real estate related depreciation & amortization                                   29,023      29,319      24,146        21,293      20,983
Unconsolidated JV interest expense and tax expense                                                  6,708       21,111      15,222        11,008      15,523
Severance, equity acceleration, and legal expenses                                                  3,786       2,077       1,003         1,377       2,536
Transaction and integration expenses                                                                13,586      11,968      12,427        13,804      7,075
(Gain) / loss on sale of investments                                                                --          (2,770)     (1,047,011)   635         (499)
Impairment of investments in real estate                                                            --          --          18,291        --          --
Other non-core adjustments, net                                                                     31,633      (48,858)    14,307        (28,745)    (60,308)
Non-controlling interests                                                                           436         3,629       22,587        2,266       4,544
Preferred stock dividends, including undeclared dividends                                           10,181      10,181      10,181        10,181      11,885
(Gain on) / Issuance costs associated with redeemed preferred stock                                 --          --          --            --          (18,000)
Adjusted EBITDA                                                                                     $610,994    $602,994    $583,713      $610,074    $602,686
(1) For definitions and discussion of EBITDA and Adjusted EBITDA, see the definitions section.
                                                                                             Three Months Ended
Financial Ratios                                                                                    30-Jun-22   31-Mar-22   31-Dec-21     30-Sep-21   30-Jun-21
Total GAAP interest expense                                                                         $69,023     $66,725     $71,762       $71,417     $75,014
Capitalized interest                                                                                14,131      14,751      15,328        15,142      11,558
Change in accrued interest and other non-cash amounts                                               (43,952)    52,324      (37,974)      17,820      (43,604)
Cash Interest Expense (2)                                                                           $39,202     $133,800    $49,116       $104,379    $42,968
Preferred dividends                                                                                 10,181      10,181      10,181        10,181      11,885
Total Fixed Charges (3)                                                                             $93,335     $91,657     $97,271       $96,740     $98,457
Coverage
Interest coverage ratio (4)                                                                         6.6x        6.1x        6.0x          6.5x        6.1x
Cash interest coverage ratio (5)                                                                    12.6x       4.0x        9.8x          5.4x        10.9x
Fixed charge coverage ratio (6)                                                                     6.0x        5.5x        5.4x          5.8x        5.4x
Cash fixed charge coverage ratio (7)                                                                10.4x       3.7x        8.3x          5.0x        9.0x
Leverage
Debt to total enterprise value (8) (9)                                                              27.1 %      25.5 %      20.5 %        24.8 %      23.9 %
Debt plus preferred stock to total enterprise value (10)                                            28.5 %      26.8 %      21.7 %        26.1 %      25.2 %
Pre-tax income to interest expense (11)                                                             1.9x        2.2x        16.2x         2.9x        2.7x
Net Debt to Adjusted EBITDA (12)                                                                    6.2x        6.3x        6.1x          6.0x        6.0x
(2)  Cash interest expense is interest expense less amortization of debt discount and deferred financing fees and includes interest that we capitalized. We consider cash interest expense to be a useful measure of interest as it excludes non-cash based interest expense.
(3)  Fixed charges consist of GAAP interest expense, capitalized interest,  and preferred dividends.
(4)  Adjusted EBITDA divided by GAAP interest expense plus capitalized interest (including our pro rata share of unconsolidated joint venture interest expense).
(5)  Adjusted EBITDA divided by cash interest expense (including our pro rata share of unconsolidated joint venture interest expense).
(6)  Adjusted EBITDA divided by fixed charges (including our pro rata share of unconsolidated joint venture fixed charges).
(7)  Adjusted EBITDA divided by the sum of cash interest expense, and preferred dividends (including our pro rata share of unconsolidated joint venture cash fixed charges).
(8)  Mortgage debt and other loans divided by market value of common equity plus debt plus preferred stock.
(9)  Total enterprise value defined as market value of common equity plus debt plus preferred stock.
(10) Same as (8), except numerator includes preferred stock.
(11) Calculated as net income plus interest expense divided by GAAP interest expense.
(12) Calculated as total debt at balance sheet carrying value, plus capital lease obligations, plus Digital Realty's pro rata share of unconsolidated of joint venture debt, less cash and cash equivalents (including Digital Realty's pro rata share of unconsolidated joint venture cash) divided by the product of Adjusted EBITDA (including Digital Realty's pro rata share of unconsolidated joint venture EBITDA), multiplied by four.

Management Statements on Non-GAAP Measures Unaudited

Definitions

Funds From Operations (FFO): We calculate funds from operations, or FFO, in accordance with the standards established by the National Association of Real Estate Investment Trusts, or Nareit, in the Nareit Funds From Operations White Paper - 2018 Restatement. FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from real estate transactions, impairment of investment in real estate, real estate related depreciation and amortization (excluding amortization of deferred financing costs), unconsolidated JV real estate related depreciation & amortization, non-controlling interests in operating partnership and after adjustments for unconsolidated partnerships and joint ventures. Management uses FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization and gains and losses from property dispositions and after adjustments for unconsolidated partnerships and joint ventures, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our data centers that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our data centers, all of which have real economic effect and could materially impact our financial condition and results from operations, the utility of FFO as a measure of our performance is limited. Other REITs may not calculate FFO in accordance with the NAREIT definition and, accordingly, our FFO may not be comparable to other REITs' FFO. FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.

Core Funds from Operations (Core FFO): We present core funds from operations, or core FFO, as a supplemental operating measure because, in excluding certain items that do not reflect core revenue or expense streams, it provides a performance measure that, when compared year over year, captures trends in our core business operating performance. We calculate core FFO by adding to or subtracting from FFO (i) other non-core revenue adjustments, (ii) transaction and integration expenses, (iii) loss from early extinguishment of debt, (iv) gain on / issuance costs associated with redeemed preferred stock, (v) severance, equity acceleration, and legal expenses, (vi) gain/loss on FX revaluation, and (vii) other non-core expense adjustments. Because certain of these adjustments have a real economic impact on our financial condition and results from operations, the utility of core FFO as a measure of our performance is limited. Other REITs may calculate core FFO differently than we do and accordingly, our core FFO may not be comparable to other REITs' core FFO. Core FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.

Adjusted Funds from Operations (AFFO): We present adjusted funds from operations, or AFFO, as a supplemental operating measure because, when compared year over year, it assesses our ability to fund dividend and distribution requirements from our operating activities. We also believe that, as a widely recognized measure of the operations of REITs, AFFO will be used by investors as a basis to assess our ability to fund dividend payments in comparison to other REITs, including on a per share and unit basis. We calculate AFFO by adding to or subtracting from core FFO (i) non-real estate depreciation, (ii) amortization of deferred financing costs, (iii) amortization of debt discount/premium, (iv) non-cash stock-based compensation expense, (v) straight-line rental revenue, (vi) straight-line rental expense, (vii) above- and below-market rent amortization, (viii) deferred tax expense / (benefit), (ix) leasing compensation and internal lease commissions, and (x) recurring capital expenditures. Other REITs may calculate AFFO differently than we do and, accordingly, our AFFO may not be comparable to other REITs' AFFO. AFFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.

EBITDA and Adjusted EBITDA: We believe that earnings before interest, loss from early extinguishment of debt, income taxes, and depreciation and amortization, or EBITDA, and Adjusted EBITDA (as defined below), are useful supplemental performance measures because they allow investors to view our performance without the impact of non-cash depreciation and amortization or the cost of debt and, with respect to Adjusted EBITDA, unconsolidated joint venture real estate related depreciation & amortization, unconsolidated joint venture interest expense and tax, severance, equity acceleration, and legal expenses, transaction and integration expenses, gain on sale / deconsolidation, impairment of investments in real estate, other non-core adjustments, net, non-controlling interests, preferred stock dividends, including undeclared dividends, and issuance costs associated with redeemed preferred stock. Adjusted EBITDA is EBITDA excluding unconsolidated joint venture real estate related depreciation & amortization, unconsolidated joint venture interest expense and tax, severance, equity acceleration, and legal expenses, transaction and integration expenses, gain on sale / deconsolidation, impairment of investments in real estate, other non-core adjustments, net, non-controlling interests, preferred stock dividends, including undeclared dividends, and gain on / issuance costs associated with redeemed preferred stock. In addition, we believe EBITDA and Adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. Because EBITDA and Adjusted EBITDA are calculated before recurring cash charges including interest expense and income taxes, exclude capitalized costs, such as leasing commissions, and are not adjusted for capital expenditures or other recurring cash requirements of our business, their utility as a measure of our performance is limited. Other REITs may calculate EBITDA and Adjusted EBITDA differently than we do and, accordingly, our EBITDA and Adjusted EBITDA may not be comparable to other REITs' EBITDA and Adjusted EBITDA. Accordingly, EBITDA and Adjusted EBITDA should be considered only as supplements to net income computed in accordance with GAAP as a measure of our financial performance.

Net Operating Income (NOI) and Cash NOI: Net operating income, or NOI, represents rental revenue, tenant reimbursement revenue and interconnection revenue less utilities expense, rental property operating expenses, property taxes and insurance expenses (as reflected in the statement of operations). NOI is commonly used by stockholders, company management and industry analysts as a measurement of operating performance of the company's rental portfolio. Cash NOI is NOI less straight-line rents and above- and below-market rent amortization. Cash NOI is commonly used by stockholders, company management and industry analysts as a measure of property operating performance on a cash basis. However, because NOI and cash NOI exclude depreciation and amortization and capture neither the changes in the value of our data centers that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our data centers, all of which have real economic effect and could materially impact our results from operations, the utility of NOI and cash NOI as measures of our performance is limited. Other REITs may calculate NOI and cash NOI differently than we do and, accordingly, our NOI and cash NOI may not be comparable to other REITs' NOI and cash NOI. NOI and cash NOI should be considered only as supplements to net income computed in accordance with GAAP as measures of our performance.

Additional Definitions

Net debt-to-Adjusted EBITDA ratio is calculated using total debt at balance sheet carrying value, plus capital lease obligations, plus our share of unconsolidated JV debt, less unrestricted cash and cash equivalents (including our share of unconsolidated JV cash) divided by the product of Adjusted EBITDA (inclusive of our share of unconsolidated JV EBITDA) multiplied by four.

Debt-plus-preferred-to-total enterprise value is mortgage debt and other loans plus preferred stock divided by mortgage debt and other loans plus the liquidation value of preferred stock and the market value of outstanding Digital Realty Trust, Inc. common stock and Digital Realty Trust, L.P. units, assuming the redemption of Digital Realty Trust, L.P. units for shares of Digital Realty Trust, Inc. common stock.

Fixed charge coverage ratio is Adjusted EBITDA divided by the sum of GAAP interest expense, capitalized interest, scheduled debt principal payments and preferred dividends. For the quarter ended June 30, 2022, GAAP interest expense was $69 million, capitalized interest was $14 million and scheduled debt principal payments and preferred dividends was $10 million.

Reconciliation of Net Operating Income (NOI)        Three Months Ended                            Six Months Ended
(in thousands)                                      30-Jun-22      31-Mar-21      30-Jun-21       30-Jun-22        30-Jun-21
Operating income                                         $170,371       $141,236       $185,627        $311,607         $378,146
Fee income                                               (5,072)        (5,757)        (3,628)         (10,829)         (6,054)
Other income                                             (2,713)        (15)           (165)           (2,728)          (224)
Depreciation and amortization                            376,967        382,132        368,981         759,099          738,714
General and administrative                               101,991        96,435         94,956          198,426          192,524
Severance, equity acceleration, and legal expenses       3,786          2,077          2,536           5,863            4,963
Transaction expenses                                     13,586         11,968         7,075           25,554           21,195
Other expenses                                           70             7,657          2,298           7,727            2,041
Net Operating Income                                     $658,986       $635,734       $657,680        $1,294,720       $1,331,304
Cash Net Operating Income (Cash NOI)
Net Operating Income                                     $658,986       $635,734       $657,680        $1,294,720       $1,331,304
Straight-line rental revenue                             (14,105)       (6,530)        (17,127)        (20,635)         (35,734)
Straight-line rental expense                             (2,609)        3,646          7,069           1,037            13,819
Above- and below-market rent amortization                196            335            1,857           531              3,994
Cash Net Operating Income                                $642,468       $633,185       $649,480        $1,275,653       $1,313,383

Forward-Looking StatementsThis document contains forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Such forward-looking statements include statements relating to: our economic outlook, our expected investment and expansion activity, our expected physical settlement of the forward sale agreements and use of proceeds from any such settlement, our liquidity, our joint ventures, supply and demand for data center and colocation space, our acquisition and disposition activity, pricing and net effective leasing economics, market dynamics and data center fundamentals, our strategic priorities, our product offerings, available inventory rent from leases that have been signed but have not yet commenced and other contracted rent to be received in future periods, rental rates on future leases, lag between signing and commencement, cap rates and yields, investment activity, the company's FFO, core FFO and net income, 2022 outlook and underlying assumptions, information related to trends, our strategy and plans, leasing expectations, weighted average lease terms, the exercise of lease extensions, lease expirations, debt maturities, annualized rent at expiration of leases, the effect new leases and increases in rental rates will have on our rental revenue, our credit ratings, construction and development activity and plans, projected construction costs, estimated yields on investment, expected occupancy, expected square footage and IT load capacity upon completion of development projects, 2022 backlog NOI, NAV components, and other forward-looking financial data. Such statements are based on management's beliefs and assumptions made based on information currently available to management. Such statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Some of the risks and uncertainties that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:

-- reduced demand for data centers or decreases in information technology spending;

-- increased competition or available supply of data center space;

-- decreased rental rates, increased operating costs or increased vacancy rates;

-- the suitability of our data centers and data center infrastructure, delays or disruptions in connectivity or availability of power, or failures or breaches of our physical and information security infrastructure or services;

-- our dependence upon significant customers, bankruptcy or insolvency of a major customer or a significant number of smaller customers, or defaults on or non-renewal of leases by customers;

-- our ability to attract and retain customers;

-- breaches of our obligations or restrictions under our contracts with our customers;

-- our inability to successfully develop and lease new properties and development space, and delays or unexpected costs in development of properties;

-- the impact of current global and local economic, credit and market conditions;

-- our inability to retain data center space that we lease or sublease from third parties;

-- global supply chain or procurement disruptions, or increased supply chain costs;

-- information security and data privacy breaches;

-- difficulty managing an international business and acquiring or operating properties in foreign jurisdictions and unfamiliar metropolitan areas;

-- our failure to realize the intended benefits from, or disruptions to our plans and operations or unknown or contingent liabilities related to, our recent acquisitions;

-- our failure to successfully integrate and operate acquired or developed properties or businesses;

-- difficulties in identifying properties to acquire and completing acquisitions;

-- risks related to joint venture investments, including as a result of our lack of control of such investments;

-- risks associated with using debt to fund our business activities, including re-financing and interest rate risks, our failure to repay debt when due, adverse changes in our credit ratings or our breach of covenants or other terms contained in our loan facilities and agreements;

-- our failure to obtain necessary debt and equity financing, and our dependence on external sources of capital;

-- financial market fluctuations and changes in foreign currency exchange rates;

-- adverse economic or real estate developments in our industry or the industry sectors that we sell to, including risks relating to decreasing real estate valuations and impairment charges and goodwill and other intangible asset impairment charges;

-- our inability to manage our growth effectively;

-- losses in excess of our insurance coverage;

-- our inability to attract and retain talent;

-- impact on our operations and on the operations of our customers, suppliers and business partners during a pandemic, such as COVID-19;

-- environmental liabilities, risks related to natural disasters and our inability to achieve our sustainability goals;

-- our inability to comply with rules and regulations applicable to our company;

-- Digital Realty Trust, Inc.'s failure to maintain its status as a REIT for federal income tax purposes;

-- Digital Realty Trust, L.P.'s failure to qualify as a partnership for federal income tax purposes;

-- restrictions on our ability to engage in certain business activities;

-- changes in local, state, federal and international laws and regulations, including related to taxation, real estate and zoning laws, and increases in real property tax rates; and

-- the impact of any financial, accounting, legal or regulatory issues or litigation that may affect us.

The risks included here are not exhaustive, and additional factors could adversely affect our business and financial performance. Several additional material risks are discussed in our annual report on Form 10--K for the year ended December 31, 2021 and other filings with the U.S. Securities and Exchange Commission. Those risks continue to be relevant to our performance and financial condition. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We expressly disclaim any responsibility to update forward-looking statements, whether as a result of new information, future events or otherwise. Digital Realty, Digital Realty Trust, the Digital Realty logo, Interxion, Turn-Key Flex, Powered Base Building, and PlatformDIGITAL, Data Gravity Index and Data Gravity Index DGx are registered trademarks and service marks of Digital Realty Trust, Inc. in the United States and/or other countries. All other names, trademarks and service marks are the property of their respective owners.

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