Digital Realty Trust(US:DLR)2022-08-04 16:00Acquisition and Investments - The company completed the acquisition of a majority stake in Teraco, valued at approximately $3.5 billion, on August 1, 2022[177]. - The company completed the acquisition of a 55% majority interest in Teraco for $1.7 billion, funded by its global revolving credit facility[243]. - The company’s investment in Ascenty, primarily located in Brazil, represents a significant portion of its equity in earnings of unconsolidated entities[197]. - The company plans to continue acquiring additional assets as part of its growth strategy[174]. - The company operates a joint venture with Mivne Real Estate to develop a multi-tenant data center campus in Israel[181]. Financial Performance - Total operating revenues increased by approximately $46.1 million (4.2%) and $83.1 million (3.8%) in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021[203]. - Non-stabilized rental and other services revenue increased by $66.6 million (33.0%) in the three months ended June 30, 2022, and by $120.2 million (30.2%) in the six months ended June 30, 2022, compared to the same periods in 2021[206]. - The company reported a decrease in stabilized rental and other services revenue of $24.5 million (2.8%) for the three months and $44.5 million (2.5%) for the six months ended June 30, 2022, primarily due to unfavorable foreign currency translation effects[204][205]. - The company reported a net income available to common stockholders of $116,346 for the six months ended June 30, 2022, down from $499,775 in 2021[275]. - Funds from Operations (FFO) available to common stockholders for the six months ended June 30, 2022, was $917,362, a decrease from $947,053 in the same period of 2021[275]. - Basic FFO per share for the six months ended June 30, 2022, was $3.16, down from $3.28 in the prior year[275]. Debt and Financing - The company issued €750 million of 1.375% Guaranteed Notes due 2032, with net proceeds of approximately $835.3 million[178]. - The company redeemed $450 million of 4.750% Notes due 2025, recording a $51.1 million loss on extinguishment of debt[179]. - The company issued CHF 100 million of 0.600% Guaranteed Notes due 2023 and CHF 150 million of 1.700% Guaranteed Notes due 2027, with net proceeds of approximately $269.2 million[180]. - The company’s total outstanding debt as of June 30, 2022, was $14.4 billion, with 87.6% being fixed-rate debt[262]. - The effective interest rate for fixed-rate debt, including hedged variable rate debt, was 2.19% as of June 30, 2022[262]. - The company’s ratio of debt to total enterprise value was approximately 27% as of June 30, 2022[259]. - The company has approximately $0.8 billion of borrowings available under its global revolving credit facilities as of August 3, 2022[254]. - The company anticipates that near-term single asset acquisitions will comprise a smaller percentage of growth due to market dynamics[252]. Operational Metrics - The consolidated portfolio includes 246 data center buildings with a total of 31,619,051 net rentable square feet and an occupancy rate of 82.8% as of June 30, 2022[184]. - The average remaining lease term for customers was approximately five years as of June 30, 2022[186]. - The total net rentable square feet increased to 31,619,051 as of June 30, 2022, from 30,681,914 as of December 31, 2021[201]. - The geographic concentration of annualized rent shows Northern Virginia at 18.7%, Chicago at 9.1%, and New York at 6.2% as of June 30, 2022[192]. - Rental rates for new leases signed for 0 — 1 MW space averaged $229.02 per rentable square foot, while rates for > 1 MW space averaged $136.60[189]. Expenses and Costs - Total property level expenses rose to $472.6 million in Q2 2022, an increase of $40.8 million (9.5%) from Q2 2021[218]. - Stabilized property operating and maintenance expenses increased by approximately $5.4 million (1.7%) in Q2 2022 compared to Q2 2021, primarily due to a $17.6 million increase in utility consumption[213]. - Non-stabilized property operating and maintenance expenses increased by $32.9 million (46.4%) in Q2 2022 compared to Q2 2021, driven by higher utility consumption in recently completed development sites[214]. - Depreciation and amortization expenses increased by $8.0 million (2.2%) in Q2 2022 compared to Q2 2021, totaling $377.0 million[218]. - Total operating expenses for the first half of 2022 were $1.96 billion, an increase of $149.6 million (8.3%) compared to the first half of 2021[218]. Cash Flow - Net cash provided by operating activities for the six months ended June 30, 2022, was $783,578, a decrease of $66,913 compared to $850,491 for the same period in 2021[266]. - Net cash used in investing activities increased by $869,187, totaling $(1,427,832) for the six months ended June 30, 2022, compared to $(558,645) in the prior year[266]. - Net cash provided by financing activities increased by $908,439, reaching $633,091 for the six months ended June 30, 2022, compared to $(275,348) in 2021[268]. Risk Management and Controls - The company is exposed to foreign currency exchange risks primarily related to the Euro, Japanese yen, British pound sterling, and Singapore dollar, which may impact future costs and cash flows[282]. - The company attempts to mitigate foreign exchange risks by financing investments in local currencies and may use foreign currency forwards or options for hedging[282]. - The company does not use derivatives for trading or speculative purposes, focusing instead on contracts with major financial institutions[280]. - The company recognizes that its disclosure controls may be limited for unconsolidated entities accounted for using the equity method[284][288]. - The company has not made any changes to its internal control over financial reporting that would materially affect its reporting during the most recent fiscal quarter[286][290]. - The company's management evaluated the effectiveness of its disclosure controls and procedures, concluding they were effective at the reasonable assurance level[285][289].