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August 2017 digital realty company overview

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August 2017 digital realty company overview

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August 2017 digital realty company overview

  1. 1. HOME TO THE CLOUD COMPANY OVERVIEW AUGUST 2017 This document is not an offer to sell or solicitation to buy securities of Digital Realty Trust, Inc. Any offers to sell or solicitations to buy securities of Digital Realty Trust, Inc. shall be made only by means of a prospectus approved for that purpose. The merger with DuPont Fabros Technology, Inc. is expected to close later this year, subject to approval by the shareholders of both DuPont Fabros and Digital Realty and the satisfaction of other closing conditions. There can be no assurance that the merger with DuPont Fabros will be consummated on the anticipated schedule or at all. Please see the risks described under the heading “Risks Related to the Mergers” in the Current Report on Form 8-K filed by Digital Realty Trust, Inc. and Digital Realty Trust, L.P. on July 10, 2017.
  2. 2. 2 Business Highlights Positioned to Drive Shareholder Value 1 Digital Realty Overview Introduction 2 Introduction to Data Centers Data center 101 3 Global Platform Growing world-wide demand from a diversified customer base 4 Connected Campus Strategy Solving for the complete deployment; land and expand 5 Attractive Growth Prospects Organic growth combined with lease-up opportunity 6 Prudent Capital Allocation Disciplined investment criteria guided by Return On Invested Capital 7 Conservative Financial Strategy Committed to maintaining a flexible balance sheet 8 Merger of Dupont Fabros Merger announcement 9 Recent Results Second quarter 2017 highlights COMPANY OVERVIEW | AUGUST 2017
  3. 3. 3 DIGITAL REALTY OVERVIEW
  4. 4. 4 Digital Realty at a Glance (NYSE: DLR) Leading Global Data Center REIT High-Quality Customer Base, including Global Companies Across Various Industries $18 Bn $28 Bn 11th LARGEST PUBLICLY TRADED U.S. REIT (4) 2016 MAY ADDED TO THE S&P 500 INDEX EQUITY MARKET CAPITALIZATION (3) ENTERPRISE VALUE (3) 145PROPERTIES (1) Investment Management Approach Focused on Return on Invested Capital 23MILLION RENTABLE SQUARE FEET (2) 2,300+CUSTOMERS Investment Grade Ratings (5) BBB Baa2 BBB Positive Outlook 30+METROPOLITAN AREAS (1) Note: Data as of June 30, 2017 unless otherwise noted. 1) Includes investments in fourteen properties held in unconsolidated joint ventures. 2) Includes 1.2 million square feet of active development and 1.8 million square feet held for future development. 3) As of August 11, 2017, based on the closing stock price of $111.82. Includes Digital Realty’s pro rata share of unconsolidated joint venture debt. 4) U.S. REITs within the RMZ. Source: companies’ financials based on latest public filings. 5) These credit ratings may not reflect the potential impact of risks relating to the structure or trading of the Company’s securities and are provided solely for informational purposes. Credit ratings are not recommendations to buy, sell or hold any security, and may be revised or withdrawn at any time by the issuing organization in its sole discretion. The Company does not undertake any obligation to maintain the ratings or to advise of any change in ratings. Each agency’s rating should be evaluated independently of any other agency’s rating. An explanation of the significance of the ratings may be obtained from each of the rating agencies. COMPANY OVERVIEW | AUGUST 2017
  5. 5. 5 The Next Horizon Three-Year Guideposts SUPERIOR RETURNS PRODUCT OFFERINGSCAPITAL ALLOCATION 1 3 Our Focus Our philosophy is to deliver superior returns by capitalizing on our core competencies and tailoring them to meet our customers’ growing and evolving data center needs 2 OPERATING EFFICIENCIES 4 Expanded Colocation Footprint+30 bps IMPROVEMENT IN RETURN ON INVESTED CAPITAL (1) 57.3% ADJUSTED EBITDA MARGIN (1) $874 million EUROPEAN PORTFOLIO ACQUISITON 1) For the year ended December 31, 2016. Return on Invested Capital (ROIC) is calculated based on annualized cash net operating income, or cash NOI. For definitions of cash NOI and Adjusted EBITDA and reconciliations to their nearest GAAP equivalent, please see the appendix. COMPANY OVERVIEW | AUGUST 2017
  6. 6. 6 Meeting Our Customers’ Growing Data Center Needs Aligning Go-to-Market with Customer Buying Behavior GLOBAL, DIVERSE CUSTOMER BASE GLOBAL, DIVERSE CUSTOMER BASE CUSTOMER-CENTRIC ALIGNMENT CUSTOMER-CENTRIC ALIGNMENT Our Customers Global Solutions Enterprise Solutions Network Solutions Customers 2,300+ Comprehensive Product Offerings Global 33 Metro Areas Aligning our Go-to-Market strategy with our customers’ unique needs and the way they buy COMPANY OVERVIEW | AUGUST 2017
  7. 7. 7 Aligning Core Competencies with Customers Global Real Estate Reach, Complementary Product Mix Our Core Competencies Capitalizing on our competitive advantages that include large scale campuses, network-dense interconnection hubs and diversified product offering on a global basis REAL ESTATE EXPERTISE COMPLEMENTARY PRODUCT MIX EXPANSIVE GLOBAL REACH Critical part of customer supply chain that starts with the real estate Not going up the stack to compete or staffing to sell direct to broader enterprise customers Meet our target customers’ needs for large and growing footprints on a global basis Campus approach to land and grow our customers – Singapore, Ashburn, London and beyond Seamless delivery of a complementary product mix Scale, colocation and connectivity COMPANY OVERVIEW | AUGUST 2017
  8. 8. 8 Executing Against Strategic Plan Comprehensive Product Offering on a Global Scale ENHANCE PRODUCT & SERVICE OFFERINGS EXPAND GLOBAL FOOTPRINTESTABLISH REAL ESTATE FOUNDATION 3 2 1 EUROPE Colocation Partners & Alliances Program Interconnection Acquired October 2015 Spectrum of Diversified Data Center Offerings Across a Global Footprint ASIA PACIFIC 8 Data Center Portfolio Acquired July 2016 6 Acre Land Parcel in Frankfurt Acquired December 2015 100% Pre-Leased in Osaka (Phase I) 2016 Second Singapore Data Center Opening COMPANY OVERVIEW | AUGUST 2017
  9. 9. 9 Senior Leadership Team Established Deepening Our Bench, Strengthening Our Culture • Chris has over 20 years of experience in the technology industry, with an extensive background in developing technology strategies in global markets. • Chris has a deep knowledge of the data center sector and is well positioned to expand technical innovation at Digital Realty. CHRIS SHARP CHIEF TECHNOLOGY OFFICER • Michael facilitates the use of information and technology to unlock more value for Digital Realty’s employees, customers and shareholders. • Michael is responsible for all aspects of the company's IT infrastructure, including business intelligence, internal business applications, and information security. MICHAEL HENRY CHIEF INFORMATION OFFICER • Bill has served as Digital Realty’s Chief Executive Officer since November 2014 and as Chief Financial Officer from July 2004 until April 2015. • Prior to Digital Realty, Bill was with GI Partners, Digital Realty’s predecessor private equity fund. • Bill previously served as CFO of TriNet, a publicly traded triple net lease REIT. A. WILLIAM STEIN CHIEF EXECUTIVE OFFICER • Scott is responsible for overseeing the company’s capital allocation decision-making process as well as international operations and leasing. • Scott is a co-founder of the company and previously served as the company’s Chief Acquisitions Officer. • Prior to Digital Realty, Scott was a Managing Director of GI Partners. SCOTT PETERSON CHIEF INVESTMENT OFFICER ANDREW POWER CHIEF FINANCIAL OFFICER • Andy leverages his extensive capital markets expertise and relationships in the financial community to support our longer- term growth while prudently managing our balance sheet • Andy is responsible for the company’s financial functions (including capital markets, tax, investor relations, and financial planning and analysis) and the company’s global asset management operations COMPANY OVERVIEW | AUGUST 2017 • Dan oversees sales, leasing and marketing efforts across the organization • Prior to Digital Realty, Dan served as EVP for North America at Unify, formerly Siemens Networking Systems. Before joining Unify, Dan was with Westcon Group as SVP, Global Cloud and Data Center Services. Previously, he held senior leadership positions over a 27-year career with IBM DAN PAPES SVP, GLOBAL SALES & MARKETING
  10. 10. 10 INTRODUCTION TO DATA CENTERS
  11. 11. 11 Data Center 101 What is a Data Center? Data Centers Data centers are designed to house servers and network equipment. Data centers provide a highly reliable, secure environment with redundant mechanical, cooling, electrical power systems and network communication connections. Data Center Layout Servers Computer servers, which process and store data, are supplied and owned by customers. 1 Building Shell 2 Electrical Systems 3 HVAC / Mechanical Systems 4 Building Fit-Out / Site Work HVAC Generators Building Shell Batteries Mechanical Galleries Electrical Rooms (UPS, Switchboard, etc.) Power Distribution Unit (PDU) Shipping / Receiving Area Lobby / Entrance Meet-Me-Room Raised Floor Computer Servers Electrical Utility Service ( Not Shown in Image) COMPANY OVERVIEW | AUGUST 2017
  12. 12. 12 Data Center 101 What Goes into Building a Data Center? Note: Percentage costs for data center development shown are based on a sample Digital Realty data center build and are not necessarily representative of all development projects. ELECTRICAL SYSTEMS • Generator • Batteries • Power Distribution Unit (PDU) • Uninterruptible Power Supplies (UPS) BUILDING FIT-OUT / SITE WORK • Lobby / Entrance • Meet-Me-Room • Shipping / Receiving Area 2 HVAC / MECHANICAL SYSTEMS • Computer Room Air Conditioner (CRAC Unit) • Air Cooled Chillers • Central Chilled Water Plant BUILDING SHELL • Building Shell • Raised Floor 1 3 4 Electrical Systems 40% Building Fit Out / Site Work 21% HVAC / Mechanical Systems 17% Building Shell 22% Data Center Cost Distribution COMPANY OVERVIEW | AUGUST 2017
  13. 13. 13 Focused Pursuit Comprehensive Customer-Focused Product Suite COLOCATION CONNECTIVITY Connecting customers & partners inside the data center Connecting across data centers in the same metropolitan area Privately and securely connecting to cloud services Enabling Internet peering and multi- cloud access Enabling small (one cabinet) to medium (75 cabinets) data center deployments Provides agility to quickly deploy computing infrastructure in days, contract for 2-3 years Consistent designs and operational environment and consistent power expenses Leverage optional skilled remote hands and on-site customer support Solution to scale from a medium 300+ kW to very large compute deployments Can execute a solution for medium to large deployment in weeks, contracting for 5-10+ years Customize data center environment to specific deployment needs Due to size of deployments, customers sometimes opt to have their own on- site staff SCALE COMPANY OVERVIEW | AUGUST 2017
  14. 14. 14 Interconnection What is a Cross-Connect? CONTENT NETWORK INTERCONNECTION $233mm ANNUALIZED REVENUE (1) 71,600 CROSS CONNECTS CONNECTING PARTNERS AND NETWORKS A cross-connect is a physical layer network connection between two parties. The cross-connect is enabled by the installation of patch cord(s) between ports of the respective parties’ interconnection panels. CONNECTING TO END USERS By enabling companies to connect with their partners and network providers, such as AT&T and Verizon, these same companies can now deliver their content to billions of end users around the world. As of June 30, 2017. 1) Annualized revenue defined as Interconnection & Other Revenue as of 2Q17 multiplied by four. COMPANY OVERVIEW | AUGUST 2017
  15. 15. 15 PUBLIC CLOUD SOLUTIONS Service providers, many customers PRIVATE CLOUD SOLUTIONS Single organization, dedicated environment Home to the Hybrid Multi-Cloud Solution Customers’ Desired IT End State The majority of companies deploy some form of hybrid cloud solution to run and manage their IT needsThe majority of companies deploy some form of hybrid cloud solution to run and manage their IT needs HYBRID CLOUD SOLUTION Mix of public and private cloud, optimizes cost 6%PRIVATE ONLY(1) 18%PUBLIC ONLY(1) 71%HYBRID(1) Hybrid cloud architectures allow data center providers to: GROW WITH THEIR CUSTOMERS Though early stage companies use public cloud infrastructures to minimize capex, as they grow and scale, public cloud solutions become quite expensive and necessitate a migration to the private cloud for portions of their IT workload ENABLE CLOUD-BASED SOFTWARE APPLICATIONS A hybrid cloud solution allows companies to store their sensitive information on private servers while using cloud-based applications (Office 365, Salesforce) that reduce IT costs 2 1 Scale Only Colocation Only Connected Campus Infrastructure as a Service (IaaS) Software as a Service (SaaS) 1) Source: Rightscale 2016 State of the Cloud Report. Based on 95% of respondents that are using the cloud. COMPANY OVERVIEW | AUGUST 2017
  16. 16. 16 Levered to Long-Term Secular Demand Drivers Growth of the Internet, Video, Cloud and Mobile 1) Source: Cisco Visual Networking Index: Forecast and Methodology, 2016 – 2021, 2017. 2) Source: Cisco Global Cloud Index, 2016. Nearly 80% of Digital Realty’s 2014-2016 Leasing Activity Has Been in Support of this Digital Economy VIDEO (1) MOBILE (1)CLOUD (2) INTERNET (1) 27% CAGR (‘15 - ‘20) 31% CAGR (‘16 - ‘21) 24% CAGR (‘16 - ‘21) 46% CAGR (‘16 - ‘21) COMPANY OVERVIEW | AUGUST 2017
  17. 17. 17 GLOBAL PLATFORM
  18. 18. 18 Largely Owned Real Estate (2) NORTH AMERICA Primarily Unencumbered (2) Geographically Diversified (1) Geneva Manchester Amsterdam FrankfurtParis Singapore Hong Kong Osaka Sydney Melbourne EUROPEASIA PACIFIC Digital Realty Locations European Portfolio Acquisition Portland San Francisco Silicon Valley Sacramento Los Angeles Phoenix Austin Houston St. Louis Denver Chicago Minneapolis / St. Paul Toronto Northern Virginia Charlotte Atlanta New York Metro Dallas Seattle Miami Boston London Note: Represents consolidated portfolio and investments in our unconsolidated joint ventures. 1) Calculated based on annualized base rent which represents the monthly contractual base rent (defined as cash base rent before abatements) under existing leases as of June 30, 2017, multiplied by 12. 2) Based on Net Operating Income as of June 30, 2017. For a definition of Net Operating Income, please see the appendix. Covering the Waterfront 140+ Data Centers in More than 30 Metro Areas Dublin Encumbered 0.1% Unencumbered 99.9% Leased 10% Owned 90% COMPANY OVERVIEW | AUGUST 2017 Asia Pacific 7% Europe 17% North America 76%
  19. 19. 19 Customer Rank Locations % of ABR (1) 11 9 1.4% 12 15 1.4% 13 19 1.4% 14 Fortune 50 Software Company 6 1.4% 15 4 1.4% 16 18 1.2% 17 5 1.2% 18 14 1.1% 19 5 1.1% 20 2 0.9% Total Annualized Base Rent 43.9% Cloud 23.2% Network 20.0% Financial 15.0% Enterprise 10.8% Content 10.4% Information Technology 20.6% Non-Investment Grade 52% Investment Grade or Equivalent (3) 48% No Single Customer Accounts for > 8% of ABR Includes numerous high-quality, non-rated customers CUSTOMER TYPE (% by ABR) (1) High-Quality, Diversified Customer Base Numerous Customers with Multiple Locations Across the Portfolio Note: As of June 30, 2017. Represents consolidated portfolio plus our managed portfolio of unconsolidated joint ventures based on our ownership percentage. Our direct tenants may be the entities named in this table above or their subsidiaries or affiliates. 1) Calculation based on annualized base rents (monthly contractual cash base rent before abatements under existing leases as of June 30, 2017 multiplied by 12). 2) Credit ratings from S&P, Moody’s and Fitch reflect credit ratings of customer parent entity. There can be no assurance that a customer parent entity will satisfy the customer’s lease obligations upon such customer’s default. 3) Defined as investment grade rated customers and equivalent customers. Investment grade equivalent customers represent Facebook and Tata Communications. Customer Rank Locations % of ABR (1) 1 24 7.7% 2 20 4.8% 3 15 3.3% 4 21 3.2% 5 7 2.7% 6 46 2.4% 7 9 2.2% 8 16 1.9% 9 12 1.7% 10 54 1.5% TOP 20 CUSTOMERS CREDIT RATING (% by ABR) (1)(2) COMPANY OVERVIEW | AUGUST 2017
  20. 20. 20 Global Service Infrastructure Platform Deliver Basic Services, Enable Partners Digital Realty is Focused on Providing the Real Estate Foundation to Enable Customers & Partners to Service Thousands of Their Customers Funnel Approach Towards Customers CLOUD SERVICES IaaS SaaS PaaS MANAGED SERVICES Professional Services Managed Hosting Business Continuity REAL ESTATE FOUNDATION Scale Colocation Interconnection Thousands of Customers Customers & Partners Focused on Real Estate Foundation COMPANY OVERVIEW | AUGUST 2017
  21. 21. 21 Enabling Customers & Partners Strategic Alliances Bearing Fruit Network‐Enabled  Colocation Services • Complete solution with common  processes for contracting & support • Combined industry expertise • Simplified customer experience AT&T Colocation Services  from Digital Realty • Digital Realty colocation capacity  resold by AT&T providing wider  geographic coverage and  increased reach to enterprise  clients AT&T  Network • Global connectivity • Network technology leadership Strategic alliance for network-enabled colocation services AT&T will continue to resell Digital Realty colocation capacity + = COMPANY OVERVIEW | AUGUST 2017
  22. 22. 22 CONNECTED CAMPUS STRATEGY
  23. 23. 23 Multi-Tiered Cloud Architectures Solving for the Complete Deployment; Land and Expand Connected Campus COLO SCALE Network Access Nodes Higher Performance• High network requirements to efficiently distribute and aggregate traffic • Applications: network connectivity, network peering and WAN optimization • Primary networking gear installed (e.g., routers and switches) • 1-20 cabinets Service Aggregations Nodes • Mission-critical and latency-sensitive deployments • Applications: CDN infrastructure, cloud services • Servers, storage, load-balancers and cache infrastructure • 10-100 cabinets Server Farms Higher Capacity • Large-scale computing and storage deployments • Applications: back office, cloud and content infrastructure, data analytics and web hosting • 100+ cabinets COMPANY OVERVIEW | AUGUST 2017
  24. 24. 24 The Connected Campus Digital Ashburn Fiber Future Building Data Center AnalyticsSocial MobileFinancial ContentNetwork Cloud Sub-station Digital Loudoun Land Parcel Current Expansion Colocation Pod COMPANY OVERVIEW | AUGUST 2017
  25. 25. 25 Density at Scale and at Hubs Expand, Tether, and Densify Data Center Campuses Connect@Scale suites, Powered Base Building, Connect@Gateway colocation LONDON CAMPUSCHICAGO CAMPUS Connect@Scale suites, Powered Base Building, Connect@Gateway colocation 350 E. CERMAK350 E. CERMAK FRANKLIN PARKFRANKLIN PARK SOVEREIGN HOUSESOVEREIGN HOUSE WOKINGWOKING Connect@Scale suites, Powered Base Building, Connect@Gateway colocation NEW YORK CAMPUS PISCATAWAYPISCATAWAY DALLAS CAMPUS Connect@Scale suites, Powered Base Building, Connect@Gateway colocation 2323 BRYAN STREET2323 BRYAN STREET RICHARDSONRICHARDSON 111 8TH AVENUE111 8TH AVENUE COMPANY OVERVIEW | AUGUST 2017
  26. 26. 26 Diversifying Product Offerings Facilitating Secure Connections to Multiple Service Providers A software-defined network (SDN) that allows a customer to establish direct, private connections to multiple cloud service providers, other participants of the platform, and other data centers on the connected network from a single interface AT LAUNCH IN 2017 8 43 MARKETS ACROSS NORTH AMERICA DATA CENTERS 17 61 MARKETS 12 NORTH AMERICA 5 INTERNATIONAL DATA CENTERS Private Access to SaaS Applications $38Bn SaaS Market (1) 1) Source: Gartner. Represents estimated SaaS market size in 2016. COMPANY OVERVIEW | AUGUST 2017
  27. 27. 27 ATTRACTIVE GROWTH PROSPECTS
  28. 28. 28 40% 60% 80% 100% Historical Retention on Rentable Square Feet Data Center Data Center Average High Utilization Provides Downside Protection Significant Customer Investment Drives Stable Retention Note: As of June 30, 2017. 1) Excludes unconsolidated joint ventures. “Same-capital” properties are defined as properties owned as of December 31, 2015 with less than 5% of total rentable square feet under development and excludes properties that were undergoing, or were expected to undergo, development activities in 2016-2017, properties classified as held for sale, and properties sold or contributed to joint ventures for all periods presented. 2) Estimates provided by Align Communications – January 2017. 3) Represents trailing 12-month average. Same-Capital Occupancy (1) Migration to a new facility estimated to cost customers ~ $10 – $20 million (2) A new 1.125 MW data center deployment estimated to cost customers ~ $15 – $30 million (2) 2010 2011 2012 2013 2014 2015 2016 2017 YTD Historical Retention on Rentable Square Feet (3) COMPANY OVERVIEW | AUGUST 2017 94.7% 95.3% 93.8% 91.2% 93.5% 93.3% 92.0% 89.7% 25% 50% 75% 100% 2010 2011 2012 2013 2014 2015 2016 2017 YTD
  29. 29. 29 Evenly-Staggered Lease Expiration Schedule Consistent, Modest Roll-Over Exposure in Any One Year Note: As of June 30, 2017. 1) Excluding acquired leases, for which rent increases vary. 2) Represents consolidated portfolio plus our managed portfolio of unconsolidated joint ventures based on our ownership percentage. Annualized base rent represents the monthly contractual base rent (defined as cash base rent before abatements) under existing leases as of June 30, 2017 multiplied by 12. % of Lease Expirations by Annualized Base Rent (2) Weighted avg. original lease term 11.1 Years Weighted avg. remaining lease term 5.0 Years Our leases generally contain 2% - 4% annual cash rental rate increases (1) COMPANY OVERVIEW | AUGUST 2017 8.4% 16.4% 15.8% 12.5% 9.4% 8.9% 4.9% 5.2% 4.9% 3.0% 7.7% 0% 10% 20% 30% 40% 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 >2026 Scale Colocation Non-Technical
  30. 30. 30 Uninterrupted Growth throughout the Cycle Counter-Cyclical Performance Compares Favorably Eleven Consecutive Years of Positive Growth AVB: 6.6% BXP: 3.1% EQR: 2.9% PSA: 10.0% DLR: 12.7% (2) SPG: 6.9% KIM: (3.3)% 2006 – 2017E FFO / Share CAGR (1) Financial Crisis Sources: Company Filings and FactSet. 1) 11-year FFO per Share CAGR calculated using 2006 – 2016 actuals and 2017E per FactSet. Index value starts at 100 and increases or decreases by annual percent FFO per share growth. 2) Core FFO results are shown for 2009 to 2017. Prior years reflect reported FFO results. For reported FFO results for 2006 to 2016 please see the Appendix.
  31. 31. 31 Committed to a Secure and Growing Dividend Twelve Consecutive Years of Dividend Increases Cash Dividend / Share $1.00 $1.08 $1.17 $1.26 $1.47 $2.02 $2.72 $2.92 $3.12 $3.32 $3.40 $3.52 $3.72 $0.00 $1.00 $2.00 $3.00 $4.00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E • Raised the 2017 common dividend to $3.72 per share, or 5.7% over 2016 (1) • 12% compound annual dividend growth since 2005 • 3.3% dividend yield (2) compared to RMZ of 4.1% and data center peers of 2.9% (3) • Dividend Policy  Pay out a minimum of 100% of taxable income and maintain AFFO (4) payout ratio <90%  2016 dividends classified as 98% ordinary income and 2% capital gain  AFFO (4) payout ratio of 66.5% for FY16 1) Based on annualized 2Q17 declared dividend. 2) Dividend yield based on August 11, 2017 closing stock price of $111.82. and annualized 2Q17 announced dividend. 3) Data center peers include DFT, COR, CONE, EQIX and QTS. 4) AFFO is a non-GAAP financial measure. For a description of AFFO and a reconciliation to net income, see the Appendix. COMPANY OVERVIEW | AUGUST 2017
  32. 32. 32 (20.0%) (10.0%) 0.0% 10.0% 20.0% 30.0% 0 50 100 DLR (20.0%) (10.0%) 0.0% 10.0% 20.0% 30.0% 0 50 100 DLR Exceptional Risk-Adjusted Growth Track Record Strong Growth, Moderate Volatility (10-YearFFO/ShareCAGR) (10–YearDividend/ShareCAGR) 10-Year Dividend / Share Risk-Adjusted Growth (1)10-Year FFO / Share Risk-Adjusted Growth (1) Consistently Delivered Healthy Growth in FFO and Dividends per Share (Coefficient of Variation2) Above-average growth relative to volatility Below-average growth relative to volatility Below-average growth relative to volatility Source: SNL Financial 1) 10-year FFO and dividend per share CAGR calculated using 2Q17 and 2Q07 actuals. 2) Coefficient of variation is the standard deviation of quarterly observations divided by the mean. For the 10 years ended 2Q17. Above-average growth relative to volatility Increased Volatility MedianREIT (Coefficient of Variation2) Increased Volatility MedianREIT DIGITAL REALTY COMPANY OVERVIEW | AUGUST 2017
  33. 33. 33 PRUDENT CAPITAL ALLOCATION
  34. 34. 34 Stringent Acquisition Criteria Market Fundamentals, Accessibility, Stability and Risk    KEY INVESTMENT CRITERIA FOR EXPANSION Note: Telx was acquired in October 2015. European Portfolio Acquisition of eight data centers was completed in July 2016. STRATEGIC AND COMPLEMENTARY1 FINANCIALLY ACCRETIVE2 PRUDENTLY FINANCED3 Diversified Product Offering in Network-Dense U.S. Metro Areas Accretive to Financial Metrics $1.0 Bn Common + Preferred Equity and $1.0 Bn Bonds Raised    Premium Locations in Leading European Data Center Markets Accretive to Financial Metrics $1.4 Bn Common Equity Raised COMPANY OVERVIEW | AUGUST 2017
  35. 35. 35 Stringent Acquisition Criteria Market Fundamentals, Accessibility, Stability and Risk KEY ELEMENTS OF INVESTMENT UNDERWRITING Market Fundamentals  Core metro areas / major central business districts  Supply & demand dynamics  Customer verticals  Land availability  Construction costs  Utility rates  Financial projections Accessibility / Internet Proximity  Access to fiber  Access to power  Proximity to major airports  Broadband penetration  Subsea cable landings Business-Friendly / Stable Locations  Accommodative local utility providers  Ease of doing business  Reasonable entitlement approval process  Low natural disaster- prone areas  Respect for property rights and rule of law  Tax regime COMPANY OVERVIEW | AUGUST 2017
  36. 36. 36 CONSERVATIVE FINANCIAL STRATEGY
  37. 37. 37 Financial Strategy Prudent Financial Management, Positioning for Growth INVESTMENT GRADE BALANCE SHEET Consistently maintain balance sheet positioned for new investment opportunities ORGANIC GROWTH Focus on driving higher same-capital cash NOI growth RISK-ADJUSTED RETURNS Earn higher risk-adjusted returns on our traditional asset base BUILD AND EXPAND Continue to prudently build out campuses and expand our global footprint OPERATING EFFICIENCIES Capitalize on operating efficiencies derived from our scale and expertise STAKEHOLDER ALIGNMENT Align our team with stakeholders COMPANY OVERVIEW | AUGUST 2017
  38. 38. 38 Committed to Conservative Capital Structure Maximizing Capital Markets Options, Minimizing Cost Leverage Metrics 6/30/17 Net Debt / Adjusted EBITDA (2) 5.1x Fixed Charge Coverage Ratio (3) 4.3x Maintain Conservative Leverage • $1.9 Bn available under $2.0 Bn multi-currency revolving credit facility (1) • Increased Term Loan from $1 Bn to $1.55 Bn in 1Q16 Diversified Sources of Capital Ample and Growing Liquidity • In July, closed £250M 2.75% notes due 2024 and £350M 3.30% notes due 2029 • In August, closed Series J cumulative redeemable preferred stock, $350M 2.75% notes due 2023 and $1 Bn 3.70% notes due 2027 Risk Mitigation • Unsecured Debt / Total Debt: 99.9% – Target variable rate < 20% of total debt – Natural hedge of FX risk through non-USD financings – $3.0 Bn of non-USD debt outstanding Current Capital Structure (1) Note: As of June 30, 2017 except as noted. 1) Closing common stock price was $111.82 as of August 11, 2017. Includes Digital’s pro rata share of unconsolidated joint venture loans. Pro forma for July issuance of the £250M 2.75% notes due 2024 and £350M 3.30% notes due 2029 based upon an exchange rate of £1 to $1.3014 as of August 11, 2017. Pro forma for August issuance of the $350M 2.75% notes due 2023 and $1 billion 3.70% notes due 2027. Pro forma for the revolver balance of $137.7M as of August 14, 2017. 2) Calculated as total debt at balance sheet carrying value, plus capital lease obligations, plus our share of unconsolidated JV debt, less unrestricted cash and cash equivalents divided by the product of Adjusted EBITDA (inclusive of our share of JV EBITDA) multiplied by four. 3) Fixed charge coverage ratio is Adjusted EBITDA divided by total fixed charges. Total fixed charges include interest expenses, capitalized interest, scheduled debt principal payments and preferred dividends, excluding bridge facility fees for the quarter ended June 30, 2017. •Total Equity Capitalization: $18.4 billion (1) •Total Enterprise Value: $27.8 billion (1)
  39. 39. 39 Debt Maturity Schedule No Bar Too Tall; Nominal Near-Term Maturities Extended Global Unsecured Revolving Credit Facility and Term Loan Maturities to 2021 and 2023 ($ in billions) Line of Credit Capacity (3) $1.9 Bn Note: As of June 30, 2017 except as noted. 1) Represents Digital’s pro rata share of four unconsolidated joint venture loans. 2) Pro forma for the July issuance of £250M 2.75% notes due 2024 and £350M 3.30% notes due 2029 based upon an exchange rate of £1 to $1.3014 as of August 11, 2017. Pro forma for August issuance of the $350M 2.75% notes due 2023 and $1 billion 3.70% notes due 2027. 3) Pro forma for the revolver balance of $137.7M as of August 14, 2017. 4) Assumes exercise of extension options. Debt Profile (4) Weighted Average Debt Maturity 4.9 Yrs Weighted Average Coupon 3.425% % Unsecured Debt 99.9% No Material Maturities until 2020 (1) (2) (3) £ £€ € £ £
  40. 40. 40 Industry-Leading Sustainability Track Record and Commitment to Energy Efficiency Management and organizational commitment to sustainability • Full time REIT- sustainability expertise in-house • Senior executive with sustainability management responsibility • Integrated cross- functional teams Industry-leading clean energy solutions • 600 gigawatt-hours of renewable power sourced globally • #6 in EPA Green Power Partnership Tech and Telecom sector for renewable energy Award-winning data center designs with third party certification • 50 green building certifications globally • 5 new certifications in 2016 including Green Mark Platinum rating for 3 Loyang Way, Singapore Thought leadership and innovation in energy efficiency • US DoE Better Building’s Challenge for data centers participant; 20% energy savings by 2024 • The Green Grid board- level and technical committee leadership Track record of sustainable project investment • Successfully allocated $493 million of proceeds from data center industry’s first green bond • Signed long-term contract to purchase 100% renewable energy for US colocation business COMPANY OVERVIEW | AUGUST 2017
  41. 41. 41 6.1x 5.9x 5.7x 5.7x 5.6x 5.5x 5.1x 4.7x 4.7x 0x 2x 4x 6x 8x BXP FRT DLR HCP EQR KIM AVB SPG PLD 6.0x 5.9x 5.7x 5.6x 5.5x 5.1x 5.1x 4.7x 4.7x 0x 2x 4x 6x 8x BXP FRT HCP EQR KIM AVB DLR SPG PLD 7.8x 6.6x 6.1x 5.4x 5.3x 5.0x 4.3x 4.2x 3.9x 0x 2x 4x 6x 8x 10x PLD AVB SPG DLR FRT KIM BXP EQR HCP 6.1x 5.5x 4.6x 4.3x 3.5x 3.5x 3.4x 3.1x 2.8x 0x 2x 4x 6x 8x PLD SPG AVB DLR BXP KIM EQR HCP FRT Credit Metrics Compare Favorably to Blue Chip REITs Committed to a Conservative Capital Structure Interest Coverage (2) (4) Net Debt + Preferred / LQA Adjusted EBITDA (1) (4)Net Debt / LQA Adjusted EBITDA (1) (4) Fixed Charge Coverage (3) (4) Source: Company calculation based on 2Q17 data, unless otherwise indicated, peer metrics derived from public filings by FactSet and SNL Financial Data. Peers may calculate these or similar metrics differently. Please see Appendix for calculation of DLR ratios. 1) Adjusted EBITDA is a non-GAAP financial measure. For a description of Adjusted EBITDA, see the Appendix. 2) Based on GAAP interest expense plus capitalized interest for the quarter ended June 30, 2017. 3) Calculated as Adjusted EBITDA divided by fixed charges. Fixed charges consist of GAAP interest expense, capitalized interest, DLR share of unconsolidated joint venture debt, scheduled debt principal payments and preferred dividends for the quarter ended June 30, 2017. 4) Pro forma for the redemption of 7.3 million shares of 6.625% Series F Cumulative Redeemable Preferred Stock in April and settlement of 2.375 million share issuance subject to forward sale agreements in May. COMPANY OVERVIEW | AUGUST 2017
  42. 42. 42 MERGER WITH DUPONT FABROS TECHNOLOGY Note: The slides in this section were originally posted to the Company’s website on June 9, 2017 and have not been updated to reflect changes occurring after that date.
  43. 43. 43 Supporting Our Customers’ Growth Full Spectrum of Data Center Solutions Across a Global Platform Note: Data as of March 31, 2017 unless otherwise noted. Figures combined to include DuPont Fabros. 1) Includes Digital Realty’s investments in fourteen properties held in unconsolidated joint ventures and includes DuPont Fabros’ ACC 9 Phase I, which was placed into service May 1, 2017. 2) Excludes 1.5 million square feet of active development and 1.7 million square feet held for future development at Digital Realty. Contribution from DuPont Fabros is based on a gross building area measurement of 3.5 million square feet and excludes 0.5 million square feet of current development projects, 0.3 million square feet of current development projects – shell only, 0.8 million square feet of future development projects/phases and 1.8 million square feet of land held for development. 157PROPERTIES (1) 33METROPOLITAN AREAS (1) 26MILLION RENTABLE SQ. FT. (1)(2) 12COUNTRIES (1) COLOCATIONCOLOCATION SCALESCALE HYPER-SCALEHYPER-SCALEINTERCONNECTIONINTERCONNECTION COMPANY OVERVIEW | AUGUST 2017
  44. 44. 44 HIGHLY STRATEGIC AND COMPLEMENTARY COMBINATION HIGHLY STRATEGIC AND COMPLEMENTARY COMBINATION Delivers Key Strategic and Financial Benefits Execution of M&A Game Plan FINANCIALLY ACCRETIVE • Expected to be accretive to financial metrics • Attractive pipeline of pre-leased deliveries and development opportunities FINANCIALLY ACCRETIVE • Expected to be accretive to financial metrics • Attractive pipeline of pre-leased deliveries and development opportunities PRUDENTLY FINANCED • 100% stock-for-stock acquisition  0.545x fixed exchange ratio  Combined ownership: ~77% Digital Realty / ~23% DuPont Fabros(1) • Improves balance sheet strength PRUDENTLY FINANCED • 100% stock-for-stock acquisition  0.545x fixed exchange ratio  Combined ownership: ~77% Digital Realty / ~23% DuPont Fabros(1) • Improves balance sheet strength Expected to close in the second half of 2017, subject to customary closing conditions, including DLR and DFT shareholder approvalsExpected to close in the second half of 2017, subject to customary closing conditions, including DLR and DFT shareholder approvals Enhances Ability to Meet Growing Demand for Hyper-Scale and Public Cloud Complementary Footprint in Top U.S. Metro Areas Expands Blue-Chip Customer Base Cost Efficiencies Expected to Yield $18 million in Annualized Overhead Synergies or $0.08 per Share (1) Increases Scale and Reach Enhanced Growth Prospects 1) Based on assumed combined share count of 213.3 million, which is 163.9 million shares for Digital Realty plus 49.4 million shares issued to DuPont Fabros shareholders (based on 90.7mm shares including the acceleration of equity awards at a 0.545x exchange ratio). COMPANY OVERVIEW | AUGUST 2017
  45. 45. 45 Transaction Overview Accretive Acquisition of Quality Assets in Strategic Locations Source: Based on Agreement and Plan of Merger as of June 8, 2017. Market data as of June 7, 2017. 1) Based on assumed combined share count of 213.3 million, which is 163.9 million shares for Digital Realty plus 49.4 million shares issued to DuPont Fabros shareholders (based on 90.7mm shares including the acceleration of equity awards at a 0.545x exchange ratio). Transaction Structure Transaction Structure Combined Ownership Shares Outstanding Combined Ownership Shares Outstanding Per Share Consideration Per Share Consideration Sources and Uses Sources and Uses Combined Board of Directors Combined Board of Directors Anticipated Annualized Overhead Synergies Anticipated Annualized Overhead Synergies Closing Conditions Closing Conditions • DuPont Fabros will be merged into a wholly-owned subsidiary of Digital Realty, which will be the surviving entity • DuPont Fabros’ Operating Partnership will be merged into a subsidiary of Digital Realty’s Operating Partnership, with the DuPont Fabros Operating Partnership being the surviving entity • DuPont Fabros will be merged into a wholly-owned subsidiary of Digital Realty, which will be the surviving entity • DuPont Fabros’ Operating Partnership will be merged into a subsidiary of Digital Realty’s Operating Partnership, with the DuPont Fabros Operating Partnership being the surviving entity • Digital Realty shareholders: ~77% • DuPont Fabros shareholders: ~23% • Approximately 213.3 fully diluted shares outstanding(1) • Digital Realty shareholders: ~77% • DuPont Fabros shareholders: ~23% • Approximately 213.3 fully diluted shares outstanding(1) • All stock merger at a fixed exchange ratio of 0.545x • Implied price per share of $64.32 (15.8% premium to share price of $55.54 as of June 7, 2017) • All stock merger at a fixed exchange ratio of 0.545x • Implied price per share of $64.32 (15.8% premium to share price of $55.54 as of June 7, 2017) Sources Equity Issued by Digital Realty: $5.8bn Assumed Preferred Equity: $0.2bn Debt and Cash Funding: $1.8bn Total: $7.8bn Uses Equity Consideration: $5.8bn Assumed Preferred Equity: $0.2bn Assumed / Repaid Debt and Transaction Costs: $1.8bn Total: $7.8bn Sources Equity Issued by Digital Realty: $5.8bn Assumed Preferred Equity: $0.2bn Debt and Cash Funding: $1.8bn Total: $7.8bn Uses Equity Consideration: $5.8bn Assumed Preferred Equity: $0.2bn Assumed / Repaid Debt and Transaction Costs: $1.8bn Total: $7.8bn • 10 existing directors from Digital Realty • 2 new directors joining from DuPont Fabros • 10 existing directors from Digital Realty • 2 new directors joining from DuPont Fabros • Approximately $18 million per year• Approximately $18 million per year • Digital Realty stockholder vote • DuPont Fabros stockholder vote • Other customary closing conditions • Digital Realty stockholder vote • DuPont Fabros stockholder vote • Other customary closing conditions COMPANY OVERVIEW | AUGUST 2017
  46. 46. 46 HIGH-QUALITY CUSTOMER BASE (4) GEOGRAPHIC PRESENCE DuPont Fabros Technology (NYSE: DFT) At-a-Glance A leading provider of Scale and Hyper-Scale data center offerings, servicing high-quality investment grade customers in top tier metro areas DATA CENTERS (1) 12 IT LOAD (MW) (1) 302 OCCUPANCY (Critical Load) (1)(2) 98%Source: DuPont Fabros public filings as of March 31, 2017, unless otherwise noted. 1) Includes 14.4MW at ACC9 Phase I, which was 70% pre-leased as of April 27, 2017 and placed into service May 1, 2017. 2) Occupancy on a critical load basis. 3) Based on current development projects as of June 2017. Excludes ACC9 Phase I, which was placed into service May 1, 2017. 4) Based on percentage of 1Q17 revenue by S&P credit ratings as of March 31, 2017. Based on sub lessee credit rating where applicable. 5) Includes investment grade customers and Facebook. Source: DuPont Fabros public filings as of March 31, 2017, unless otherwise noted. 1) Includes 14.4MW at ACC9 Phase I, which was 70% pre-leased as of April 27, 2017 and placed into service May 1, 2017. 2) Occupancy on a critical load basis. 3) Based on current development projects as of June 2017. Excludes ACC9 Phase I, which was placed into service May 1, 2017. 4) Based on percentage of 1Q17 revenue by S&P credit ratings as of March 31, 2017. Based on sub lessee credit rating where applicable. 5) Includes investment grade customers and Facebook. 1 2 9 Core Metros Expansion Metros Investment Grade or Equivalent 70% Non-Investment Grade 30% (5) DEVELOPMENTS (Properties / MW) (3) 6 / 79 COMPANY OVERVIEW | AUGUST 2017
  47. 47. 47 Extends Footprint in Top U.S. Metro Areas Enhanced Ability to Meet Customer Demand in Attractive Locations COMBINED DLR FOOTPRINT (1)(2)COMBINED DLR FOOTPRINT (1)(2)CURRENT DLR FOOTPRINT (1)CURRENT DLR FOOTPRINT (1)TOP TIER U.S. METRO AREASTOP TIER U.S. METRO AREAS Northern Virginia Northern Virginia ChicagoChicago Silicon Valley Silicon Valley 2.2mm Space (NRSF) 2.2mm Space (NRSF) 90 Power (MW) 90 Power (MW) 97%OCCUPANCY 17 DATA CENTERS 17 DATA CENTERS 1.7mm Space (NRSF) 1.7mm Space (NRSF) 52 Power (MW) 52 Power (MW) 91%OCCUPANCY 5 DATA CENTERS 5 DATA CENTERS 1.7mm Space (NRSF) 1.7mm Space (NRSF) 47 Power (MW) 47 Power (MW) 96%OCCUPANCY 15 DATA CENTERS 15 DATA CENTERS 4.4mm Space (NRSF) 4.4mm Space (NRSF) 292 Power (MW) 292 Power (MW) 97%OCCUPANCY(3) 26 DATA CENTERS 26 DATA CENTERS 2.5mm Space (NRSF) 2.5mm Space (NRSF) 116 Power (MW) 116 Power (MW) 94%OCCUPANCY(3) 7 DATA CENTERS 7 DATA CENTERS 2.1mm Space (NRSF) 2.1mm Space (NRSF) 84 Power (MW) 84 Power (MW) 96%OCCUPANCY(3) 16 DATA CENTERS 16 DATA CENTERS Note: Data as of March 31, 2017, unless otherwise noted. Includes 14.4MW at ACC9 Phase I, which was 70% pre-leased as of April 27, 2017 and placed into service May 1, 2017. 1) Excludes investments held in unconsolidated joint ventures and properties under active development and held for future development. 2) DuPont Fabros NRSF equal to company’s reported gross building area. Gross building area is the entire building area, including CRSF (the portion of gross building area where customers‘ computer servers are located), common areas, areas controlled by DuPont Fabros (such as the mechanical, telecommunications and utility rooms) and, in some facilities, individual office and storage space leased on an as-available basis to customers. 3) DuPont Fabros’ occupancy calculated as weighted average of DuPont Fabros’ gross building area and computer room square feet percent leased as of April 1, 2017. Digital Realty’s occupancy represents the weighted average of Digital Realty’s net rentable square foot and occupancy, which is calculated based on factors in addition to contractually leased square feet, including available power, required support space and common areas. COMPANY OVERVIEW | AUGUST 2017
  48. 48. 48 NORTHERN VIRGINIANORTHERN VIRGINIA CHICAGOCHICAGO SILICON VALLEYSILICON VALLEY Complementary Campus Strategy Close Proximity Allows for Synergies 2626 DATA CENTERS (1) DATA CENTERS (1) 2020 MILE RADIUS MILE RADIUS 77 DATA CENTERS (1) DATA CENTERS (1) 2525 MILE RADIUS MILE RADIUS 1616 DATA CENTERS (1) DATA CENTERS (1) 77 MILE RADIUS MILE RADIUS DIGITAL REALTY DUPONT FABROS Note: Data as of March 31, 2017, unless otherwise noted. Figures combined to include DuPont Fabros. Includes 14.4MW at ACC9 Phase I, which was 70% pre-leased as of April 27, 2017 and placed into service May 1, 2017. 1) Excludes investments held in unconsolidated joint ventures and properties under active development and held for future development. COMPANY OVERVIEW | AUGUST 2017
  49. 49. 49 $15.2 $14.6 $14.0 $4.8 $3.6 Microsoft Amazon AWS IBM Cloud Oracle SAP 1Q17 Annualized Cloud Revenues (1) $ in billions $7.2 $7.5 $10.0 $16.5 $21.1 $21.1 $25.3 2010 2011 2012 2013 2014 2015 2016 HYPER-SCALE CLOUD CAPITAL EXPENDITURES (1) $ in billions Meeting Growing Demand for Hyper-Scale Strong Demand Across Major Cloud Service Providers Home to the Cloud Servicing a growing demand for cloud deployments CLOUD CUSTOMERS % of ABR (2) CURRENT 23% DUPONT (3) 42% COMBINED 26% Note: As of March 31, 2017, unless otherwise noted. Represents consolidated portfolio plus managed unconsolidated joint ventures based on ownership percentage. 1) Source: DuPont Fabros investor presentation dated June 2017. AMZN, MSFT, GOOGL, IBM, ORCL, SAP and BABA company documents. 2) Calculation based on annualized base rents (monthly contractual cash base rent before abatements under existing leases as of March 31, 2017 multiplied by 12). DuPont Fabros figures as of April 1, 2017. 3) Represents cloud customers as a percent of annualized base rent for top 15 tenants as of April 1, 2017. Cloud classification according to Digital Realty’s customer classification where applicable. Note: As of March 31, 2017, unless otherwise noted. Represents consolidated portfolio plus managed unconsolidated joint ventures based on ownership percentage. 1) Source: DuPont Fabros investor presentation dated June 2017. AMZN, MSFT, GOOGL, IBM, ORCL, SAP and BABA company documents. 2) Calculation based on annualized base rents (monthly contractual cash base rent before abatements under existing leases as of March 31, 2017 multiplied by 12). DuPont Fabros figures as of April 1, 2017. 3) Represents cloud customers as a percent of annualized base rent for top 15 tenants as of April 1, 2017. Cloud classification according to Digital Realty’s customer classification where applicable. COMPANY OVERVIEW | AUGUST 2017
  50. 50. 50 TOP 20 CUSTOMERS Combined (As of March 31, 2017) Expands Blue-Chip Customer Base High Credit Quality Cash Flows CUSTOMER TYPE Combined (% of ABR) (1) Cloud 26% Inform ation Techno logy 21% Content 16% Network 14% Financial 13% Enterprise 10% CREDIT RATING Combined (% of ABR) (1)(3) Customer Rank Locations % of ABR (1) 11 46 2.0% 12 (2) 4 1.7% 13 16 1.5% 14 53 1.2% 15 9 1.1% 16 9 1.1% 17 14 1.1% 18 18 1.0% 19 8 1.0% 20 5 0.9% 49.8% Customer Rank Locations % of ABR (1) 1 24 6.2% 2 15 6.0% 3 13 5.9% 4 49 4.6% 5 7 2.7% 6 20 2.7% 7 14 2.6% 8 6 2.4% 9 6 2.2% 10 6 2.0% TOP 20 ANNUALIZED BASE RENT Note: Represents consolidated portfolio plus managed portfolio of unconsolidated joint ventures based on ownership percentage. Includes DuPont Fabros on combined basis based on top 15 tenants as percent of annualized base rents as of April 1, 2017. Direct tenants may be the entities named in this table above or their subsidiaries or affiliates. 1) Calculation based on annualized base rents (monthly contractual cash base rent before abatements under existing leases as of March 31, 2017 multiplied by 12). Customer type classified to match Digital Realty’s classification where applicable. 2) Yahoo! is comprised of a lease at DuPont Fabros’ ACC4 that has been fully subleased to another DuPont Fabros customer. 3) Credit ratings from Moody’s Analytics and reflects credit ratings of customer parent entity. As of March 31, 2017. Figures combined to include DuPont Fabros portfolio. 4) Defined as investment grade rated customers and equivalent customers. Investment grade equivalent customers represents Facebook, LinkedIn and Tata Communications. Non- Invest ment Grade 49% Investment Grade or Equivalent 51% Fortune 50 Software Company Fortune 25 Investment Grade-Rated (4) Fortune 500 SaaS Provider COMPANY OVERVIEW | AUGUST 2017
  51. 51. 51 $42.9 $34.3 $6.8 $6.8 $5.9 $4.0 EQIX DLR Combined CONE DFT COR QTS Leading Data Center REIT Enterprise Value and Market Capitalization Comparison Note: Data as of June 7, 2017, unless otherwise noted. 1) Based on each company’s reported TEV as of March 31, 2017. TEV defined as Market Equity Value + Debt + Preferred Stock + Minority Interest - Cash and Equivalents. Includes subsequent events. 2) Based on inclusion in the MSCI U.S. REIT Index (RMZ). For market capitalization purposes, fully diluted shares include shares, units, options using the treasury method, and any convertible securities. LARGEST PUBLICLY TRADED U.S. REIT (2) $ in billions Equity Market Company Capitalization 1. Simon Property Group, Inc. $55.8 2. Public Storage, Inc. 36.8 3. Equinix, Inc. 34.9 4. ProLogis 31.4 5. Welltower, Inc. 27.9 6. AvalonBay Communities, Inc. 26.9 7. Equity Residential 25.7 8. Digital Realty Trust (Combined) 25.2 9. Ventas, Inc. 24.0 10. GGP Inc. 22.3 11. Boston Properties, Inc. 20.9 12. Vornado Realty Trust 18.7 13. Essex Property Trust, Inc. 18.0 14. Realty Income Corporation 15.3 15. HCP, Inc. 15.2 16. Host Hotels & Resorts, Inc. 13.5 17. Mid-America Apartment Communities, Inc. 12.6 18. UDR, Inc. 11.9 19. SL Green Realty Corp. 11.3 20. Alexandria Real Estate Equities, Inc. 10.9 21. Regency Centers Corporation 10.6 22. Duke Realty Corporation 10.4 23. Extra Space Storage, Inc. 10.2 24. Federal Realty Investment Trust 9.2 25. Iron Mountain, Inc. 9.0 DATA CENTER REITS BY TOTAL ENTERPRISE VALUE (1) $ in billions COMPANY OVERVIEW | AUGUST 2017
  52. 52. 52 157 20 43 25 179 35% 45% 55% 65% 10 70 130 190 # of Data Centers SIZE AND ADJUSTED EBITDA MARGIN As of March 31, 2017 Margin % 88% 70% 65% 48% 31% DLR Combined COR CONE QTS EQIX OWNED REAL ESTATE (2) As Measured by Number of Data Centers (As of March 31, 2017) Benefits of Size and Scale on Display Efficient Cost Structure Drives Industry-Leading Margins Most comprehensive product suite at the most efficient cost structure DLR EQIX CONE QTS COR Note: As of March 31, 2017. Number of data centers represents consolidated portfolio plus our managed portfolio of unconsolidated joint ventures based on our ownership percentage. Includes ACC9 Phase I, which was placed into service on May 1, 2017. Equinix includes recently completed acquisition of Verizon assets. 1) Based on Q1 2017 public filings and includes sales & marketing expenses. DLR Combined includes $18 million of annualized overhead synergies. 2) Percent of total number of data centers. DLR Combined figure excludes joint venture properties from both numerator and denominator. 5% 11% 14% 21% 33% DLR Combined COR CONE QTS EQIX G&A (% of Revenue)(1) As of March 31, 2017 The combined company will own 92% of its real estate based on NOI rather than the number of properties COMPANY OVERVIEW | AUGUST 2017
  53. 53. 53 Enhanced Growth Prospects Future-Proofing Supply Chain in Proven and New Locations INCREMENTAL CAPACITY CONTRIBUTED BY DUPONT IN HIGH-DEMAND METRO AREASINCREMENTAL CAPACITY CONTRIBUTED BY DUPONT IN HIGH-DEMAND METRO AREAS NEW METRO AREA WITH PROVEN DEMAND NEW METRO AREA WITH PROVEN DEMAND OPTIONALITY FOR LONG-TERM GROWTH METRO AREA OPTIONALITY FOR LONG-TERM GROWTH METRO AREA Space (NRSF) 1.5mm Power (MW) 96OREGONOREGON Space (NRSF) 711k Power (MW) 35TORONTOTORONTO Space (NRSF) 702k Power (MW) 68NORTHERN VIRGINIA NORTHERN VIRGINIA Includes 29MW currently under development and 12MW of shell Space (NRSF) 305k Power (MW) 27CHICAGOCHICAGO Includes 27MW currently under development Source: DuPont Fabros public filings as of March 31, 2017. DuPont Fabros NRSF equal to company’s reported gross building area. Does not include ACC9 Phase I, which was placed in service on May 1, 2017. Includes 6MW currently under development COMPANY OVERVIEW | AUGUST 2017
  54. 54. 54 Strong Combined Capitalization and Balance Sheet Enhanced Access and Overall Cost of Capital Accretive to financial metrics and expected to further improve balance sheet strengthAccretive to financial metrics and expected to further improve balance sheet strength Note: As of March 31, 2017, unless otherwise noted. 1) Total debt and cash includes development spend and cash flows subsequent to March 31, 2017. 2) Pro forma for settlement of 2.375 million forward shares for approximate proceeds of $211 million, which are used to redeem $183 million of Series F Cumulative Preferred Stock and repay $29 million on the revolver. 3) Includes assumed transaction expenses. 4) Based on Digital Realty and DuPont Fabros closing stock price as of June 7, 2017. 5) Includes capital leases. Combined metrics include $18mm of annualized overhead synergies. COMPANY OVERVIEW | AUGUST 2017
  55. 55. 55 Best Practices Governance Leadership Fully Aligned with Shareholders BOARD OF DIRECTORS COMPOSITION BOARD OF DIRECTORS COMPOSITION SHAREHOLDER-FRIENDLY GOVERNANCE PRACTICES  De-Staggered Board  Majority of our directors' compensation is paid in stock  Each director maintains a sizable investment in Digital Realty  The board and senior management are required to meet minimum stock ownership requirements  Since 2014, the substantial majority of management's long- term incentive compensation plan has been tied to relative total shareholder return SHAREHOLDER-FRIENDLY GOVERNANCE PRACTICES  De-Staggered Board  Majority of our directors' compensation is paid in stock  Each director maintains a sizable investment in Digital Realty  The board and senior management are required to meet minimum stock ownership requirements  Since 2014, the substantial majority of management's long- term incentive compensation plan has been tied to relative total shareholder return De-Staggered Board Majority of directors' compensation is paid in equity Each director maintains a sizable investment in Digital Realty The Board and senior management are required to meet minimum stock ownership requirements Substantial majority of management's long-term incentive compensation is tied to relative total shareholder return Currently 10 directors serving on the Board Laurence Chapman named Chairman of the Board in May Six of the ten directors joined in the past four years Three new directors added in the past year: Mary Hogan Preusse, Mark Patterson and Afshin Mohebbi As part of the proposed acquisition, the Board will consist of 12 directors (Digital Realty’s ten existing directors plus two directors to be designated by DuPont Fabros) COMPANY OVERVIEW | AUGUST 2017
  56. 56. 56 Leading Global Multi-Product Data Center Provider Extending Advantages for Our Customers  Unmatched Value Proposition  Strengthens Position in Strategic Metro Areas  Improves Customer Base with Creditworthy Tenants  Complementary Businesses with Significant Synergies  Expected to be Accretive to Financial Metrics and Growth  Proven Ability to Execute COMPANY OVERVIEW | AUGUST 2017
  57. 57. 57 RECENT RESULTS Note: The slides in this section were originally posted to the Company’s website on July 27, 2017 and have not been updated to reflect changes occurring after that date.
  58. 58. 58 Firm Fundamentals Robust Demand, Rational Supply Source: Digital Realty internal estimates and datacenterHawk. 1) Market source: datacenterHawk. Excludes owner-occupied data centers. DLR includes only consolidated data centers. 2) Calculated as LTM metro area absorption divided by current data center construction. Demand Outpacing Supply in Top-Tier Data Center Metro AreasDemand Outpacing Supply in Top-Tier Data Center Metro Areas NORTHERN VIRGINIA DALLAS Major U.S. Metro Areas Healthy volumes of underway supply in U.S. major metro areas balanced by high leasing velocity Major U.S. Metro Areas Healthy volumes of underway supply in U.S. major metro areas balanced by high leasing velocity Healthy Occupancy Rates Tight vacancy across all three metro areas as new inventory is leased upon delivery or shortly thereafter Healthy Occupancy Rates Tight vacancy across all three metro areas as new inventory is leased upon delivery or shortly thereafter LTM Absorption Outpacing Construction (2) LTM metro area absorption = 1.5x current construction pipelines LTM Absorption Outpacing Construction (2) LTM metro area absorption = 1.5x current construction pipelines Occupancy Rate (2Q17) Market (1) 89% CHICAGO Megawatts Commissioned (1) DLR(1) 89% Market (1) 96% DLR(1) 94% Occupancy Rate (2Q17) Market (1) 93% DLR(1) 91% 1.6x 1.3x 1.4x Absorption-to- Construction (2) Absorption-to- Construction (2) Absorption-to- Construction (2) 21 MW 81% Leased LTM Digital Realty Deliveries 12 MW 100% Leased 6 MW 50% Leased LTM Digital Realty Deliveries Occupancy Rate (2Q17) Megawatts Commissioned (1) Megawatts Commissioned (1) LTM Digital Realty Deliveries 597 624 649 673 3Q16 4Q16 1Q17 2Q17 252 262 265 280 3Q16 4Q16 1Q17 2Q17 276 282 293 303 3Q16 4Q16 1Q17 2Q17 COMPANY OVERVIEW | AUGUST 2017
  59. 59. 59 1Q17 CALL CURRENT Better/ April 26, 2017 July 26, 2017 Worse 2017E 2018E Global GDP Growth Forecast (1) 2017E: 3.5% 2017E: 3.5%  3.5% 3.6% U.S. GDP Growth Forecast (1) 2017E: 2.3% 2017E: 2.1%  2.1% 2.1% U.S. Unemployment Rate (2) 4.5% 4.4%  4.4% 4.2% Inflation Rate – U.S. Annual CPI Index (2) 2.4% 1.6%  2.1% 2.1% Crude Oil ($/barrel)(3) $50  $49   $51  $55  Control of White House, Senate and HoR (4) R,R,R R,R,R  R,R,R R,R,R Three‐Month Libor (USD) (2) 1.2% 1.3%  1.6% 2.3% 10‐Yr U.S. Treasury Yield (2) 2.3% 2.3%  2.6% 3.1% GBP‐USD (2) 1.28 1.31  1.28 1.31 EUR‐USD(2) 1.09 1.17  1.14 1.15 S&P 500 (2) 2,387 (YTD 7.3%); P/E: 21.7x 2,478 (YTD 11.9%); P/E: 21.5x  19.0x 17.0x NASDAQ 100 (2) 5,541 (YTD 14.3%); P/E: 26.4x 5,951 (YTD 23.1%); P/E: 26.1x  21.7x 19.0x RMZ  (2)(5) 1,162 (YTD 2.4%); P/E: 16.0x 1,169 (YTD 4.0%); P/E: 16.3x  15.4x N/A IT Spending Growth Worldwide (6) 2017E: 3.3% 2017E: 3.3%  3.3% 3.3% Server Shipment Worldwide (7) 2017E: 4.6% 2017E: 4.0%  4.0% 3.2% Global Data Center to Data Center IP Traffic (8) CAGR 2015 ‐ 2020E: 32% CAGR 2015 ‐ 2020E: 32%  CAGR 2015 ‐ 2020E: 32% Global Cloud IP Traffic (8) CAGR 2015 ‐ 2020E: 30% CAGR 2015 ‐ 2020E: 30%  CAGR 2015 ‐ 2020E: 30% Broadly Supportive Economic Growth Outlook Long-Term Secular Data Center Demand Drivers Source: 1) IMF World Economic Outlook – April 2017 and July 2017. 2) Bloomberg. 3) Bloomberg, NY Mercantile Exchange WTI Crude Oil (Front Month). 4) Nate Silver FiveThirtyEight.com – April 2017. MACROECONOMICINTERESTRATES EQUITY MARKETS INDUSTRY 5) Citi Investment Research – April 2017 and July 2017. 6) Gartner: IT Spending, Worldwide (constant currency), March 2017 and July 2017. 7) Gartner: Servers Forecast Worldwide, April 2017 and July 2017. 8) Cisco Global Cloud Index: Forecast and Methodology, 2015-2020 – November 2016. COMPANY OVERVIEW | AUGUST 2017
  60. 60. 60 FINANCIAL RESULTS
  61. 61. 61 $0 $20 $40 $60 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Lumpy but Healthy Comprehensive Solutions Support Diverse Customer Base Note: Darker shading represents interconnection bookings. 1) Includes signings for new and re-leased space. 2) GAAP rental revenues include total rent for new leases and expansions. The timing between lease signing and lease commencement (and receipt of rents) may be significant. Historical Lease Signings Annualized GAAP Base Rent (2) $ in millions 2009 2010 2011 2012 2013 2014 2015 2016 2017 Product Type Total s.f. Signed (1) Annualized GAAP Base Rent / s.f. (2) Annualized GAAP Base Rent (2) Turn-Key Flex® 113,772 $160 $18.2 million Powered Base Building® - - $0.2 million Colocation 32,937 $233 $7.7 million Non-Technical 23,386 $29 $0.7 million Interconnection - - $7.6 million Total 170,095 $158 $34.4 million COMPANY OVERVIEW | AUGUST 2017
  62. 62. 62 $43 $11 $10 $64 2017 2018 2019+ Total Backlog Healthy Backlog Sets a Solid Foundation Front-End-Loaded Commencement Schedule $ in millions Backlog Roll-Forward + Commencement Timing Commencements Total BacklogCurrent Period Backlog Signings Note: Amounts shown represent GAAP annualized base rent from signed, but not yet commenced, leases and are based on current estimates of future lease commencement timing. Actual results may vary from current estimates. The lag between lease signing and lease commencement (and receipt of rents) may be significant. Expected commencement date at time of signing. $79 $27 $41 $64 $- $25 $50 $75 $100 $125 1Q17 Backlog Signings Commencements 2Q17 Backlog COMPANY OVERVIEW | AUGUST 2017
  63. 63. 63 PRODUCT TYPE RENEWALS 2Q17 RE-LEASING SPREADS Turn-Key Flex®  Renewed 70,473 square feet of Turn-Key Flex® data centers at a rental rate increase of 0.3% on a cash basis and a 4.3% increase on a GAAP basis Powered Base Building®  Renewed 375,631 square feet of Powered Base Building® data centers at a rental rate increase of 15.9% on a cash basis and a 24.5% increase on a GAAP basis Colocation  Renewed 121,136 square feet of colocation space at a rental rate increase of 4.9% on a cash basis and 5.0% a GAAP basis Total  Signed renewal leases representing $65 million of annualized GAAP rental revenue  Rental rates were up on a cash basis by 6.5% and increased by 9.3% on a GAAP basis Cycling Through Peak Vintage Renewals Positive Mark-to-Market Across All Property Types Note: Total represents Turn-Key Flex®, Powered Base Building®, Colocation, and Non-Tech leases signed during the quarter ended June 30, 2017. 0.3% CASH 4.3% GAAP 15.9% CASH 24.5% GAAP 4.9% CASH 5.0% GAAP 6.5% CASH 9.3% GAAP COMPANY OVERVIEW | AUGUST 2017
  64. 64. 64 U.S. Dollar Index Putting Exposure in Perspective Benefits of Scale and Diversification on Display 0.5% GBP +/- 10% 0.5% GBP +/- 10% 0.2% EUR +/- 10% 0.2% EUR +/- 10% 0.1% WTI +/- $10 per barrel 0.1% WTI +/- $10 per barrel 0.1% LIBOR +/- 100 bps 0.1% LIBOR +/- 100 bps EXPOSURE BY REVENUE USD CAD GBP EURO JPY HKD SGD AUD 78% 1% 12% 4% 0% 4% 0% 2% EXCHANGE RATES (2) U.S. DOLLAR / POUND STERLING 12%INCREASE U.S. DOLLAR / EURO 3%INCREASE Midpoint of Guidance $5.95 – $6.10 2017 EXPOSURE (1) Source: Bloomberg. 1) Based on the midpoint of 2017 core FFO per share guidance of $5.95 - $6.10. 2) Based on average exchange rates for the quarter ending June 30, 2017 compared to average exchange rates for the quarter ending June 30, 2016. Brexit U.S. Presidential Election 2Q16 2Q17 COMPANY OVERVIEW | AUGUST 2017
  65. 65. 65 9.9% 11.3% 10.8% 12.4% 3.1% 3.8% 8.5% 10.2% 5.3% 7.1% 0% 5% 10% 15% 1Q17 / 1Q16 Revenue Growth 1Q17 / 1Q16 Adj. EBITDA Growth 1Q17 / 1Q16 Same-Capital Cash NOI Growth 1Q17 / 1Q16 Core FFO/sh Growth 2017E / 2016 Core FFO/sh Growth Constant-Currency Growth FX Represents ~ 150 bps Drag on Reported Results Note: Constant-currency, Adjusted EBITDA, same-capital cash NOI and core FFO are non-GAAP financial measures. For a description of these measures, see the Appendix. 1) Net income for the quarter ended June 30, 2017 was $58 million. Net income for the quarter ended June 30, 2016 was $28 million. 2) The lighter shaded sections represent the core FFO and constant-currency core FFO per share guidance ranges. The midpoints of 2017 core FFO and constant-currency core FFO represent 5.3% and 7.1% growth over 2016 results, respectively. (1) (2)(1) (1) 4Q16 / 4Q15 Revenue Growth 2Q17 / 2Q16 Revenue Growth 2Q17 / 2Q16 Adj. EBITDA Growth (1) 2Q17 / 2Q16 Same-Capital Cash NOI Growth (1) 2Q17 / 2Q16 Core FFO/sh Growth (1) 2017E / 2016 Core FFO/sh Growth (2) As Reported Constant-Currency COMPANY OVERVIEW | AUGUST 2017
  66. 66. 66 Four Quarter Two-Step Beat, Dip, Shuffle, Bounce Series F Preferred Stock redemption in April 2017 Note: Based on management estimates; actual performance may differ materially. Core FFO is a non-GAAP financial measure. For a description and reconciliation to the closest GAAP equivalents, please see the Appendix. COMPANY OVERVIEW | AUGUST 2017
  67. 67. 67 Closing the GAAP on Straight-Line Rent Consistently Improving Quality of Earnings ($ in millions) $22.7 $21.3 $19.9 $17.6 $18.6 $13.4 $14.5 $13.6 $9.5 $7.4 $5.5 $6.0 $5.2 $4.1 $2.1 6.0% 5.5% 5.0% 4.3% 4.5% 3.3% 3.5% 3.1% 1.9% 1.5% 1.1% 1.1% 0.9% 0.7% 0.4% 0% 1% 2% 3% 4% 5% 6% $0 $5 $10 $15 $20 $25 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Straight-Line Rental Revenue Straight-Line Rent as % of Revenue COMPANY OVERVIEW | AUGUST 2017
  68. 68. 68 Recent Credit Events Bolstering the Balance Sheet 1) Plus all accrued and unpaid dividends up to, but not including the redemption date in an amount equal to $0.0184 per share, for a total payment of $25.0184 per share. April 5, 2017 Preferred Stock Redemption $182.5 million April 5, 2017 Preferred Stock Redemption $182.5 million 1 • Redeemed all 7.3 million outstanding shares of the 6.625% Series F Cumulative Redeemable Preferred Stock at par value of $25 per share (1) May 19, 2017 Forward Equity Settlement $211 million May 19, 2017 Forward Equity Settlement $211 million 2 • Settled remaining 2.375 million shares of the forward equity offering for proceeds of $211 million • Last remaining portion of the 14.375 million shares subject to forward sale agreements entered into in May 2016 in connection with the European Portfolio Acquisition May 22, 2017 Euro Note Private Placement €125 million May 22, 2017 Euro Note Private Placement €125 million 3 • Executed on a €125 million two-year FRN transaction on the back of a large reverse inquiry from a French fund manager • The interest rate on the notes is 3m€L + 50 bps (floor at 0.00%), representing an initial coupon of 0.169% (half the cost of DLR’s global revolving credit facility – 3m€L+100 bps) June 29, 2017 Joint Venture Secured Refinancing $135 million June 29, 2017 Joint Venture Secured Refinancing $135 million 4 • Property: Westin Building Exchange (50/50 joint venture with Clise Properties) • Amount: Upsized from $110 million to $135 million • Rate & Term: 3.29%, 10 years • Amortization: None; interest-only July 12, 2017 Sterling Two Tranche Notes £600 million July 12, 2017 Sterling Two Tranche Notes £600 million 5 • Executed on two series of pounds sterling-denominated Guaranteed Notes • £250 million aggregate principal amount of 2.750% due 2024 • £350 million aggregate principal amount of 3.300% due 2029 COMPANY OVERVIEW | AUGUST 2017
  69. 69. 69 $0.0 $0.1 $0.1 $1.0 $2.2 $0.8 $0.7 $0.7 $1.0 $0.1 $0.0 $1.0 $2.0 $3.0 2017 2018 2019 2020 2021 2022 2023 2024 2025 Thereafter Pro Rata Share of JV Debt Unsecured Term Loan Unsecured Senior Notes Unsecured Global Facility Unsecured Green Bonds Secured Mortgage Debt Well-Laddered Debt Maturity Schedule Nominal Near-Term Maturities; No Bar Too Tall Note: As of June 30, 2017. Includes Digital Realty's pro rata share of unconsolidated joint venture debt. 1) Based on DLR closing stock price of $112.44 on July 25, 2017. DEBT MATURITY SCHEDULE CURRENT CAPITAL STRUCTURE (1) ($ in billions) £ £ € € COMPANY OVERVIEW | AUGUST 2017
  70. 70. 70 Consistent Execution on Strategic Vision Delivering Current Results, Seeding Future Growth EXECUTING M&A GAME PLAN WITH DUPONT FABROS MERGER Strategic metros, complementary portfolio, immediately accretive, prudently financed  EXCEEDING EXPECTATIONS Beat consensus estimates by five cents  SUPPORTING BROAD-BASED CUSTOMER GROWTH Captured robust and diverse customer demand from leading service providers across multiple metros  Successful Second Quarter 2017 Initiatives STRENGTHENING THE BALANCE SHEET Settled forward equity, redeemed high-coupon preferred, raised low-cost, long-term debt  COMPANY OVERVIEW | AUGUST 2017
  71. 71. 71 APPENDIX
  72. 72. 72 $0 $20 $40 $60 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Robust Long-Term Demand, Lumpy Near-Term Signings Diverse Customer Base + Product Offerings Note: Darker shading represents interconnection signings. 1) Includes signings for new and re-leased space. 2) GAAP rental revenues include total rent for new lease and expansions. The timing between lease signing and lease commencement (and receipt of rents) may be significant. Historical Lease Signings Trailing Four-Quarter Average Annualized GAAP Base Rent (2) ($ in millions) 2009 2010 2011 2012 2013 2014 2015 2016 2017 Product Type Total s.f. Signed (1) Annualized GAAP Base Rent / s.f. (2) Annualized GAAP Base Rent (2) Turn-Key Flex® 164,060 $158 $25.9 million Powered Base Building® 5,115 $66 $0.3 million Colocation 30,512 $275 $8.4 million Non-Technical 24,853 $25 $0.6 million Interconnection – - $8.2 million Total 221,983 $195 $43.2 million COMPANY OVERVIEW | AUGUST 2017
  73. 73. 73 U.S. Major Metro Area Data Center Supply(1) Supply Largely Concentrated in Most Active Metro Areas 1) Reflects management’s estimates of available supply, including sub-lease availability. 2) Represents Digital Realty’s available finished data center space and available active data center construction. (in megawatts) 2Q17 1Q17 (in megawatts) 0 20 40 60 80 100 120 Boston Chicago Dallas Houston N Virgina NY Metro Phoenix Silicon Valley COMPANY OVERVIEW | AUGUST 2017
  74. 74. 74 Appendix Additional Information and Where You Can Find It Digital Realty Trust, Inc. (“Digital Realty”) and DuPont Fabros Technology, Inc. (“DuPont Fabros”) each filed a proxy statement/prospectus on July 10, 2017 in connection with the merger. Investors are urged to read carefully the applicable proxy statement/prospectus and other relevant materials because they contain important information about the merger. Investors may obtain free copies of these documents and other documents filed by Digital Realty or DuPont Fabros with the SEC through the web site maintained by the SEC at www.sec.gov. Investors may obtain free copies of the documents filed with the SEC by Digital Realty by going to Digital Realty’s corporate website at www.digitalrealty.com or by directing a written request to: Digital Realty Trust, Inc., Four Embarcadero Center, Suite 3200, San Francisco, CA 94111, Attention: Investor Relations. Investors may obtain free copies of documents filed with the SEC by DuPont Fabros by going to DuPont Fabros’ corporate website at www.dft.com or by directing a written request to: DuPont Fabros Technology, Inc., 401 9th St. NW, Suite 600, Washington, DC 20004, Attention: Investor Relations. Investors are urged to read the applicable proxy statement/prospectus and the other relevant materials before making any voting decision with respect to the merger. Digital Realty and its directors and executive officers and DuPont Fabros and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of each of Digital Realty and DuPont Fabros in connection with the merger. Information regarding the interests of these directors and executive officers in the merger will be included in the proxy statement/prospectus referred to above. Additional information regarding certain of these persons and their beneficial ownership of Digital Realty common stock is also set forth in the Definitive Proxy Statement for Digital Realty’s 2017 Annual Meeting of Stockholders, which has been filed with the SEC. Additional information regarding certain of these persons and their beneficial ownership of DuPont Fabros common stock is set forth in the Definitive Proxy Statement for DuPont Fabros’ 2017 Annual Meeting of Stockholders, which has been filed with the SEC. Digital Realty Trust, Inc. (“Digital Realty”) and DuPont Fabros Technology, Inc. (“DuPont Fabros”) each filed a proxy statement/prospectus on July 10, 2017 in connection with the merger. Investors are urged to read carefully the applicable proxy statement/prospectus and other relevant materials because they contain important information about the merger. Investors may obtain free copies of these documents and other documents filed by Digital Realty or DuPont Fabros with the SEC through the web site maintained by the SEC at www.sec.gov. Investors may obtain free copies of the documents filed with the SEC by Digital Realty by going to Digital Realty’s corporate website at www.digitalrealty.com or by directing a written request to: Digital Realty Trust, Inc., Four Embarcadero Center, Suite 3200, San Francisco, CA 94111, Attention: Investor Relations. Investors may obtain free copies of documents filed with the SEC by DuPont Fabros by going to DuPont Fabros’ corporate website at www.dft.com or by directing a written request to: DuPont Fabros Technology, Inc., 401 9th St. NW, Suite 600, Washington, DC 20004, Attention: Investor Relations. Investors are urged to read the applicable proxy statement/prospectus and the other relevant materials before making any voting decision with respect to the merger. Digital Realty and its directors and executive officers and DuPont Fabros and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of each of Digital Realty and DuPont Fabros in connection with the merger. Information regarding the interests of these directors and executive officers in the merger will be included in the proxy statement/prospectus referred to above. Additional information regarding certain of these persons and their beneficial ownership of Digital Realty common stock is also set forth in the Definitive Proxy Statement for Digital Realty’s 2017 Annual Meeting of Stockholders, which has been filed with the SEC. Additional information regarding certain of these persons and their beneficial ownership of DuPont Fabros common stock is set forth in the Definitive Proxy Statement for DuPont Fabros’ 2017 Annual Meeting of Stockholders, which has been filed with the SEC. COMPANY OVERVIEW | AUGUST 2017
  75. 75. 75 Appendix The information included in this presentation contains certain non-GAAP financial measures that management believes are helpful in understanding our business, as further described below. Our definition and calculation of non-GAAP financial measures may differ from those of other REITs, and, therefore, may not be comparable. The non-GAAP financial measures should not be considered an alternative to net income or any other GAAP measurement of performance and should not be considered an alternative to cash flows from operating, investing or financing activities as a measure of liquidity. 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. FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from real estate transactions, impairment charges, real estate related depreciation and amortization (excluding amortization of deferred financing costs), 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 properties 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 properties, 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 such other REITs’ FFO. Accordingly, 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) termination fees and other non-core revenues, (ii) transaction and integration expenses, (iii) loss from early extinguishment of debt, (iv) issuance costs associated with redeemed preferred stock, (v) severance, equity acceleration, and legal expenses, (vi) loss on currency forwards 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 not calculate core FFO in a consistent manner. 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. Constant-Currency Core Funds from Operations: We calculate constant-currency core funds from operations by adjusting the core funds from operations for foreign currency translations. 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 rent revenue, (vi) straight-line rent expense, (vii) above- and below-market rent amortization, (viii) deferred non-cash tax expense, (ix) capitalized leasing compensation, (x) recurring capital expenditures and (xi) capitalized internal leasing commissions. Other REITs may not calculate AFFO in a consistent manner. 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. COMPANY OVERVIEW | AUGUST 2017
  76. 76. 76 Appendix 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, severance-related expense, equity acceleration, and legal expenses, transaction and integration expenses, (gain) on real estate transactions, loss on currency forwards, other non-core expense adjustments, noncontrolling interests, preferred stock dividends and issuance costs associated with redeemed preferred stock. Adjusted EBITDA is EBITDA excluding severance-related expense, equity acceleration, and legal expenses, transaction and integration expenses, (gain) loss on real estate transactions, non-cash (gain) on lease termination, loss on currency forwards, other non-core expense adjustments, noncontrolling interests, preferred stock dividends and 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; accordingly, our EBITDA and Adjusted EBITDA may not be comparable to such 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 properties 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 properties, 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 not calculate NOI and cash NOI in the same manner we do and, accordingly, our NOI and cash NOI may not be comparable to such other REITs’ NOI and cash NOI. Accordingly, NOI and cash NOI should be considered only as supplements to net income computed in accordance with GAAP as measures of our performance. Same-Capital Cash NOI Same-capital Cash NOI is Cash NOI (as defined above) calculated for “Same-capital” properties. “Same-capital” properties are defined as properties owned as of December 31, 2015 with less than 5% of total rentable square feet under development and excludes properties that were undergoing, or were expected to undergo, development activities in 2016-2017, properties classified as held for sale, and properties sold or contributed to joint ventures for all periods presented. COMPANY OVERVIEW | AUGUST 2017
  77. 77. 77 Forward-Looking Statements The information included in this presentation contains forward-looking statements. Such statements are based on management’s beliefs and assumptions made based on information currently available to management. Such forward-looking statements include statements relating to: our economic outlook; the merger with DuPont Fabros Technology, Inc. and our expected benefits from the merger, opportunities and strategies, including ROIC, recycling assets and capital, and sources of growth; the expected timing, locations, benefits and product offerings for Service Exchange; the expected effect of foreign currency translation adjustments on our financials; business drivers; sources and uses; our expected development plans and completions, including timing, total square footage, IT capacity and raised floor space upon completion; expected availability for leasing efforts and colocation initiatives; organizational initiatives; our expected product offerings; our expected Go-to-Market strategy; joint venture opportunities; occupancy and total investment; our expected investment in our properties; our estimated time to stabilization and targeted returns at stabilization of our properties; our expected future acquisitions; acquisitions strategy; available inventory and development strategy; the signing and commencement of leases, and related rental revenue; lag between signing and commencement of leases; our expected same store portfolio growth; our expected growth and stabilization of development completions and acquisitions; our expected mark-to- market rates on lease expirations, lease rollovers and expected rental rate changes; our expected yields on investments; our expectations with respect to capital investments at lease expiration on existing Turn-Key Flex space; barriers to entry; competition; debt maturities; lease maturities; our expected returns on invested capital; estimated absorption rates; our other expected future financial and other results, and the assumptions underlying such results; our top investment geographies and market opportunities; our expected colocation expansions; our ability to access the capital markets; expected time and cost savings to our customers; our customers’ capital investments; our plans and intentions; future data center utilization, utilization rates, growth rates, trends, supply and demand, and demand drivers; datacenter outsourcing trends; datacenter expansion plans; estimated kW/MW requirements; growth in the overall Internet infrastructure sector and segments thereof; the replacement cost of our assets; the development costs of our buildings, and lead times; estimated costs for customers to deploy or migrate to a new data center; capital expenditures; the effect new leases and increases in rental rates will have on our rental revenues and results of operations; lease expiration rates; our ability to borrow funds under our credit facilities; estimates of the value of our development portfolio; our ability to meet our liquidity needs, including the ability to raise additional capital; the settlement of our forward sales agreements; credit ratings; capitalization rates, or cap rates, potential new locations; the expected impact of our global expansion; dividend payments and our dividend policy; projected financial information and covenant metrics; annualized; core FFO run-rate and NOI Growth; other forward-looking financial data; leasing expectations; our exposure to tenants in certain industries; our expectations and underlying assumptions regarding our sensitivity to fluctuations in foreign exchange rates and energy prices; and the sufficiency of our capital to fund future requirements. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and discussions which do not relate solely to historical matters. Such statements are subject to risks, uncertainties and assumptions, are not guarantees of future performance and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control that may cause actual results to vary materially. Some of the risks and uncertainties include, among others, the following: the impact of current global economic, credit and market conditions; current local economic conditions in the geographies in which we operate; decreases in information technology spending, including as a result of economic slowdowns or recession; 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); our dependence upon significant tenants; bankruptcy or insolvency of a major tenant or a significant number of smaller tenants; defaults on or non-renewal of leases by tenants; our failure to obtain necessary debt and equity financing; 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; financial market fluctuations; changes in foreign currency exchange rates; our inability to manage our growth effectively; difficulty acquiring or operating properties in foreign jurisdictions; our failure to successfully integrate and operate acquired or developed properties or businesses; the suitability for our properties and data center infrastructure, delays or disruptions in connectivity, failure of our physical or information system infrastructure or services or availability of power; risks related to joint venture investments, including as a result of our lack of control of such investments; delays or unexpected costs in development of properties; decreased rental rates, increased operating costs or increased vacancy rates; increased competition or available supply of data center space; our inability to successfully develop and lease new properties and development space; difficulties in identifying properties to acquire and completing acquisitions; our inability to acquire off-market properties; the impact of the United Kingdom’s referendum on withdrawal from the European Union on global financial markets and our business; our inability to comply with the rules and regulations applicable to reporting companies; our failure to maintain our status as a REIT; possible adverse changes to tax laws; restrictions on our ability to engage in certain business activities; environmental uncertainties and risks related to natural disasters; losses in excess of our insurance coverage; changes in foreign laws and regulations, including those related to taxation and real estate ownership and operation; and changes in local, state and federal regulatory requirements, including changes in real estate and zoning laws and increases in real property tax rates. The risks described above are not exhaustive, and additional factors could adversely affect our business and financial performance, including those discussed in our annual report on Form 10-K for the year ended December 31, 2016, and subsequent filings with the Securities and Exchange Commission. We expressly disclaim any responsibility to update forward-looking statements, whether as a result of new information, future events or otherwise. Digital Realty, Telx, Digital Realty Trust, the Digital Realty logo, Turn-Key Flex and Powered Base Building are registered trademarks and service marks of Digital Realty Trust, Inc. in the United States and/or other countries. All other product names, logos, and brands in this presentation are the property of their respective owners. All other company, product and service names and marks used in this presentation are for identification purposes only. Use of these names, logos, and brands does not imply endorsement. COMPANY OVERVIEW | AUGUST 2017
  78. 78. 78 Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Net income (loss) available to common stockholders 57,837$ 27,951$ 123,982$ 67,076$ Adjustments: Noncontrolling interests in operating partnership 807 457 1,711 1,120 Real estate related depreciation and amortization (1) 175,010 167,043 348,457 333,955 Real estate related depreciation and amortization related to investment in unconsolidated joint ventures 2,754 2,810 5,511 5,613 Impairment charge on Telx trade name - 6,122 - 6,122 (Gain) loss on sale of properties (380) - 142 (1,097) FFO available to common stockholders and unitholders 236,028$ 204,383$ 479,803$ 412,789$ Basic FFO per share and unit 1.45$ 1.37$ 2.96$ 2.77$ Diluted FFO per share and unit 1.44$ 1.36$ 2.94$ 2.75$ Weighted average common stock and units outstanding Basic 163,078 149,227 162,281 149,137 Diluted 164,027 150,211 163,271 149,859 (1) Real estate related depreciation and amortization was computed as follows: Depreciation and amortization per income statement 178,111 175,594 354,577 344,610 Impairment charge on Telx trade name - (6,122) - (6,122) Non-real estate depreciation (3,101) (2,429) (6,120) (4,533) 175,010$ 167,043$ 348,457$ 333,955$ Six Months Ended Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Net Income Available to Common Stockholders to Funds From Operations (FFO) (in thousands, except per share and unit data) (unaudited) Three Months Ended COMPANY OVERVIEW | AUGUST 2017
  79. 79. 79 Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 FFO available to common stockholders and unitholders -- basic and diluted 236,028$ 204,383$ 479,803$ 412,789$ Weighted average common stock and units outstanding 163,078 149,227 162,281 149,137 Add: Effect of dilutive securities 949 984 990 722 Weighted average common stock and units outstanding -- diluted 164,027 150,211 163,271 149,859 June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 FFO available to common stockholders and unitholders -- diluted 236,028$ 204,383$ 479,803$ 412,789$ Termination fees and other non-core revenues (1) (341) - (376) (91) Significant transaction expenses 14,235 3,615 17,558 5,515 Loss from early extinguishment of debt - - - 964 Costs on redemption of preferred stock 6,309 - 6,309 - Severance accrual and equity acceleration (2) 365 1,508 1,234 2,956 Equity in earnings adjustment for non-core items (3,285) - (3,285) - Loss on currency forwards - 3,082 - 3,082 Other non-core expense adjustments 24 - 24 (1) CFFO available to common stockholders and unitholders -- diluted 253,335$ 212,588$ 501,267$ 425,214$ Diluted CFFO per share and unit 1.54$ 1.42$ 3.07$ 2.84$ (1) Includes one-time fees, proceeds and certain other adjustments that are not core to our business. (2) Relates to severance charges related to the departure of company executives. (3) Includes reversal of accruals and certain other adjustments that are not core to our business. Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Funds From Operations (FFO) to Core Funds From Operations (CFFO) (in thousands, except per share and unit data) (unaudited) Three Months Ended Six Months Ended Three Months Ended Six Months Ended COMPANY OVERVIEW | AUGUST 2017
  80. 80. 80 Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Net income (loss) available to common stockholders 57,837$ 27,951$ 123,982$ 67,076$ Interest 57,582 59,909 113,032 117,170 Loss from early extinguishment of debt - - - 964 Taxes 2,639 2,252 4,862 4,361 Depreciation and amortization 178,111 175,594 354,577 344,610 EBITDA 296,169 265,706 596,453 534,181 Severance accrual and equity acceleration 365 1,508 1,234 2,956 Transactions 14,235 3,615 17,558 5,515 Gain on sale of properties (380) - 142 (1,097) Non-cash gain on lease termination - - - - Equity in earnings adjustment for non-core items (3,285) - (3,285) - Loss on currency forwards - 3,082 - 3,082 Other non-core expense adjustments 24 (1) 24 (1) Noncontrolling interests 920 569 1,945 1,353 Preferred stock dividends 14,505 22,424 31,898 44,848 Issuance costs associated with redeemed preferred stock 6,309 - 6,309 - Adjusted EBITDA 328,862$ 296,903$ 652,278$ 590,837$ Six Months EndedThree Months Ended Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Net Income Available to Common Stockholders to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA (in thousands) (unaudited) COMPANY OVERVIEW | AUGUST 2017
  81. 81. 81 Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Rental revenues 250,627$ 248,194$ 499,251$ 497,004$ Tenant reimbursements - Utilities 36,924 36,810 72,646 71,805 Tenant reimbursements - Other 16,615 17,778 33,785 35,314 Interconnection and other 49,470 44,286 98,620 87,298 Total Revenue 353,636 347,068 704,302 691,421 Utilities 47,746 46,212 92,234 89,906 Rental property operating 53,925 55,651 110,144 111,642 Property taxes 17,842 17,644 33,774 34,975 Insurance 2,045 1,822 4,021 3,689 Total Expenses 121,558 121,329 240,173 240,212 Net Operating Income 232,078$ 225,739$ 464,129$ 451,209$ Less: Stabilized straight-line rent (5,094)$ (4,345)$ (9,252)$ (7,627)$ Above and below market rent 2,088 2,153 4,208 4,559 Cash Net Operating Income 235,084$ 227,931$ 469,173$ 454,277$ Three Months Ended Six Months Ended Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Same Capital Cash Net Operating Income (in thousands) (unaudited) COMPANY OVERVIEW | AUGUST 2017
  82. 82. 82 Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries (in thousands, except per share and unit data) (unaudited) Year Ended December 31, 2016 Net income (loss) available to common stockholders 332,088$ Adjustments: Noncontrolling interests in operating partnership 5,298 Real estate related depreciation and amortization (1) 682,810 Real estate related depreciation and amortization related to investment in unconsolidated joint ventures 11,246 Impairment charge on Telx trade name 6,122 (Gain) loss on sale of properties (169,902) Gain on settlement of pre-existing relationships with Telx - FFO available to common stockholders and unitholders 867,662$ Basic FFO per share and unit 5.69$ Diluted FFO per share and unit 5.67$ Weighted average common stock and units outstanding Basic 152,360 Diluted 153,086 (1) Real estate related depreciation and amortization was computed as follows: Depreciation and amortization per income statement 699,324 Impairment charge on Telx trade name (6,122) Non-real estate depreciation (10,392) 682,810$ Reconciliation of Net Income Available to Common Stockholders to Funds From Operations (FFO) Digital Realty Trust, Inc. and Subsidiaries (in thousands, except per share and unit data) (unaudited) Year Ended December 31, 2016 FFO available to common stockholders and unitholders -- diluted 867,662$ Termination fees and other non-core revenues (3) (33,197) Significant transaction expenses 20,491 Loss from early extinguishment of debt 1,011 Costs on redemption of preferred stock 10,328 Change in fair value of contingent consideration (4) - Severance accrual and equity acceleration (5) 6,208 Loss on currency forwards 3,082 Bridge facility fees - Other non-core expense adjustments (6) 213 CFFO available to common stockholders and unitholders -- diluted 875,798$ Diluted CFFO per share and unit 5.72$ (3) Includes one-time fees, proceeds and certain other adjustments that are not core to our business. (4) Relates to earn-out contingency in connection with Sentrum Portfolio acquisition. (5) Relates to severance charges related to the departure of company executives. (6) Includes reversal of accruals and certain other adjustments that are not core to our business. Reconciliation of Funds From Operations (FFO) to Core Funds From Operations (CFFO) Year Ended December 31, 2016 FFO available to common stockholders and unitholders -- basic and diluted 867,662$ Weighted average common stock and units outstanding 152,360 Add: Effect of dilutive securities 726 Weighted average common stock and units outstanding -- diluted 153,086 COMPANY OVERVIEW | AUGUST 2017

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