DIGITAL REALTY TRUST INC

Previous wording

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this report and our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”). This report contains forward-looking statements within the meaning of the federal securities laws. In particular, statements pertaining to our capital resources, expected use of borrowings under our credit facilities, expected use of proceeds from our ATM equity program, litigation matters or legal proceedings, portfolio performance, leverage policy, acquisition and capital expenditure plans, capital recycling program, returns on invested capital, supply and demand for data center space, capitalization rates, rents to be received in future periods and expected rental rates on new or renewed data center space contain forward-looking statements. Likewise, all of our statements regarding anticipated market conditions, and results of operations are forward-looking statements. 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 which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and that we may not be able to realize. We do not guarantee that the transactions and events described will happen as described or that they will happen at all. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: reduced demand for data centers or decreases in information technology spending; decreased rental rates, increased operating costs or increased vacancy rates; increased competition or available supply of data center space; the suitability of our data centers and data center infrastructure, delays or disruptions in connectivity or availability of power, or failures or breaches of our physical and information security infrastructure or services; breaches of our obligations or restrictions under our contracts with our customers; our inability to successfully develop and lease new properties and development space, and delays or unexpected costs in development of properties; the impact of current global and local economic, credit and market conditions; global supply chain or procurement disruptions, or increased…

Excerpt shortened here; the source contains the full paragraph.

Current wording

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this report and our Annual Report on Form 10-K for the year ended December 31, 2023, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, each as filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”). This report contains forward-looking statements within the meaning of the federal securities laws. In particular, statements pertaining to our capital resources, expected use of borrowings under our credit facilities, expected use of proceeds from our ATM equity program, litigation matters or legal proceedings, portfolio performance, leverage policy, acquisition and capital expenditure plans, capital recycling program, returns on invested capital, supply and demand for data center space, capitalization rates, rents to be received in future periods and expected rental rates on new or renewed data center space contain forward-looking statements. Likewise, all of our statements regarding anticipated market conditions, and results of operations are forward-looking statements. 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 which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties, and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and that we may not be able to realize. We do not guarantee that the transactions and events described will happen as described or that they will happen at all. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: reduced demand for data centers or decreases in information technology spending; decreased rental rates, increased operating costs or increased vacancy rates; increased competition or available supply of data center space; the suitability of our data centers and data center infrastructure, delays or disruptions in connectivity or availability of power, or failures or breaches of our physical and information security infrastructure or services; breaches of our obligations or restrictions under our contracts with our customers; our inability to successfully develop and lease new properties and development space, and delays or unexpected costs in development of properties; the impact of current global and local economic, credit a…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We target high-quality, strategically located properties containing the physical and connectivity infrastructure that supports the applications and operations of data center and technology industry customers and properties that may be developed for such use. Most of our data center properties contain fully redundant electrical supply systems, multiple power feeds, above-standard cooling systems, raised floor areas, extensive in-building communications cabling and high-level security systems. Fundamentally, we bring together foundational real estate and innovative technology expertise around the world to deliver a comprehensive, dedicated product suite to meet customers’ data and connectivity needs. We represent an important part of the digital economy that we believe will benefit from powerful, long-term growth drivers.

Current wording

We target high-quality, strategically located properties containing the physical and connectivity infrastructure that supports the applications and operations of data center and technology industry customers and properties that may be developed for such use. Most of our data center properties contain fully redundant electrical supply systems, multiple power feeds, above-standard cooling systems, raised floor areas, extensive in-building communications cabling and high-level security systems. Fundamentally, we bring together foundational real estate and innovative technology

Previous wording

We completed the following significant activities during the three months ended March 31, 2024:

Current wording

We completed the following significant activities during the six months ended June 30, 2024:

Previous wording

Our ability to re-lease expiring space at rental rates equal to or in excess of current rental rates will impact our results of operations. The subsequent table summarizes our leasing activity in the three months ended March 31, 2024 (square feet in thousands):

Current wording

Our ability to re-lease expiring space at rental rates equal to or in excess of current rental rates will impact our results of operations. The subsequent table summarizes our leasing activity in the six months ended June 30, 2024 (square feet in thousands):

Previous wording

A roll forward showing changes in the stabilized and non-stabilized portfolios for the three months ended March 31, 2024 as compared to December 31, 2023 is shown below (in thousands):

Current wording

A roll forward showing changes in the stabilized and non-stabilized portfolios for the six months ended June 30, 2024 as compared to December 31, 2023 is shown below (in thousands):

Previous wording

Comparison of the Results of Operations for the Three Months Ended March 31, 2024 to the Three Months Ended March 31, 2023

Current wording

Comparison of the Results of Operations for the Three and Six Months Ended June 30, 2024 to the Three and Six Months Ended June 30, 2023

Previous wording

Total operating revenues decreased by approximately $7.6 million in the three months ended March 31, 2024 compared to the same period in 2023.

Current wording

Total operating revenues decreased by approximately $9.5 million and $17.1 million in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023.

Previous wording

Stabilized rental and other services revenue decreased $7.3 million in the three months ended March 31, 2024 compared to the same period in 2023 primarily due to:

Current wording

Stabilized rental and other services revenue decreased $16.3 million and $23.5 million in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 primarily due to:

Previous wording

Non-stabilized rental and other services revenue decreased $5.4 million in the three months ended March 31, 2024 compared to the same period in 2023 driven primarily by:

Current wording

Non-stabilized rental and other services revenue increased $4.8 million in the three months ended June 30, 2024 and decreased $0.6 million in the six months ended June 30, 2024, compared to the same periods in 2023 primarily due to:

Previous wording

Total stabilized utilities expenses decreased by approximately $30.3 million in the three months ended March 31, 2024 compared to the same period in 2023 primarily due to lower power pricing at certain properties in the stabilized portfolio, primarily in EMEA and APAC.

Current wording

Total stabilized utilities expenses decreased by approximately $58.8 million and $90.3 million in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 primarily due to lower power pricing at certain properties in the stabilized portfolio, mainly in EMEA and APAC.

Previous wording

Total non-stabilized utilities expenses increased by approximately $8.5 million in the three months ended March 31, 2024 compared to the same period in 2023 primarily due to:

Current wording

Total non-stabilized utilities expenses decreased by approximately $0.9 million and increased by approximately $8.8 million in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 primarily due to:

Previous wording

Total non-stabilized rental property operating and maintenance expenses (excluding utilities) decreased by approximately $1.0 million in the three months ended March 31, 2024 compared to the same period in 2023 primarily due to a decrease in common area maintenance expense in Northern Virginia offset by an increase in data center labor expense throughout the portfolio.

Current wording

Total non-stabilized rental property operating and maintenance expenses (excluding utilities) decreased by approximately $5.9 million and $6.2 million in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 primarily due to a decrease in common area maintenance expense in Northern Virginia offset by an increase in data center labor expense throughout the portfolio.

Previous wording

Total stabilized property taxes and insurance increased by approximately $7.7 million in the three months ended March 31, 2024 compared to the same period in 2023 primarily due to a favorable property tax assessment at one of our North American properties realized in early 2023.

Current wording

Total stabilized property taxes and insurance increased by approximately $9.6 million and $17.3 million in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 primarily due to a favorable property tax assessment at one of our North American properties realized in early 2023.

Previous wording

Total non-stabilized property taxes and insurance decreased $8.6 million in the three months ended March 31, 2024 compared to the same period in 2023 primarily related to properties sold or contributed after March 31, 2023.

Current wording

Total non-stabilized property taxes and insurance decreased $6.3 million and $15.0 million in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 primarily related to properties sold or contributed after June 30, 2023.

Previous wording

Equity in earnings (loss) of unconsolidated entities decreased approximately $30.9 million compared to the same period in 2023. The foreign exchange remeasurement of debt associated with our unconsolidated Ascenty entity creates volatility in our equity in earnings and drove this fluctuation.

Current wording

The change in Equity in earnings (loss) of unconsolidated entities was approximately $46.5 million and $77.4 million in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. The foreign exchange remeasurement of debt associated with our unconsolidated Ascenty entity creates volatility in our equity in earnings and drove this fluctuation.

Previous wording

Gain on disposition of properties increased approximately $277.8 million for the three months ended March 31, 2024, as compared to the same period in 2023.

Current wording

Gain on disposition of properties increased approximately $83.8 million and $361.6 million for the three and six months ended June 30, 2024, as compared to the same periods in 2023.

Previous wording

In January 2024, we closed on the sale of our interest in four data centers to Brookfield Infrastructure Partners L.P., or Brookfield, for approximately $271 million. As a result of the sale, we recognized a total gain on disposition of approximately $201.3 million.

Current wording

In January 2024, we closed on the sale of our interest in four data centers to Brookfield Infrastructure Partners L.P., or Brookfield, for approximately $271 million. As a result of the sale, we recognized a total gain on disposition of approximately $194.2 million.

Previous wording

On January 9, 2024, we paid down $240 million on the U.S. term loan facility, leaving $500 million outstanding. The paydown resulted in an early extinguishment charge of approximately $1.1 million during the three months ended March 31, 2024.

Current wording

On January 9, 2024, we paid down $240 million on the U.S. term loan facility, leaving $500 million outstanding. The paydown resulted in an early extinguishment charge of approximately $1.1 million during the six months ended June 30, 2024.

Previous wording

Interest expense increased approximately $7.3 million in the three months ended March 31, 2024 compared to the same period in 2023 driven primarily by higher interest rates on our credit facilities and the non-swapped portion of our term loans.

Current wording

Interest expense increased approximately $3.6 million and $11.0 million in the three and six months ended June 30, 2024, respectively, as compared to the same periods in 2023 driven primarily by higher interest rates on our credit facilities and the non-swapped portion of our term loans.

Previous wording

Income tax expense increased by approximately $1.0 million in the three months ended March 31, 2024 as compared to the same period in 2023 due to increased profitability and jurisdictional rate mix in foreign jurisdictions. We carried out an analysis for the purposes of the Model GloBE Rules for Pillar Two and no material top-up tax is expected.

Current wording

Income tax expense decreased by approximately $1.2 million and $0.2 million in the three and six months ended June 30, 2024, respectively, as compared to the same periods in 2023 due to jurisdictional rate mix in foreign jurisdictions. We carried out an analysis for the purposes of the Model GloBE Rules for Pillar Two and no material top-up tax is expected.

Previous wording

Our Parent and our Operating Partnership were parties to an ATM Equity Offering SM Sales Agreement dated August 4, 2023 (the “2023 Sales Agreement”). Pursuant to the 2023 Sales Agreement, Digital Realty Trust, Inc. could issue and sell common stock having an aggregate offering price of up to $1.5 billion through various named agents from time to time. From January 1, 2024 through February 23, 2024, Digital Realty Trust, Inc. generated net proceeds of approximately $99 million from the issuance of approximately 0.6 million common shares under the 2023 Sales Agreement at an average price of $133.43 per share after payment of approximately $0.6 million of commissions to the agents. For the three months ended March 31, 2023, we had no sales under the ATM program.

Current wording

Our Parent and our Operating Partnership were parties to an ATM Equity Offering SM Sales Agreement dated August 4, 2023 (the “2023 Sales Agreement”). Pursuant to the 2023 Sales Agreement, Digital Realty Trust, Inc. could issue and sell common stock having an aggregate offering price of up to $1.5 billion through various named agents from time to time. From January 1, 2024 through February 23, 2024, Digital Realty Trust, Inc. generated net proceeds of approximately $99 million from the issuance of approximately 0.6 million common shares under the 2023 Sales Agreement at an average price of $133.43 per share after payment of approximately $0.6 million of commissions to the agents.

Previous wording

The sales of common stock made under the 2023 Sales Agreement will be made in “at the market” offerings as defined in Rule 415 of the Securities Act. Our Parent has used and intends to use the net proceeds from the program to temporarily repay borrowings under our Operating Partnership’s Global Revolving Credit Facilities, to acquire additional properties or businesses, to fund development opportunities and for working capital and other general corporate purposes, including potentially for the repayment of other debt or the repurchase, redemption or retirement of outstanding debt securities.

Current wording

The sales of common stock made under the 2024 Sales Agreement Amendment will be made in “at the market” offerings as defined in Rule 415 of the Securities Act. Our Parent has used and intends to use the net proceeds from the program to temporarily repay borrowings under our Operating Partnership’s Global Revolving Credit Facilities, to acquire additional properties or businesses, to fund development opportunities and for working capital and other general corporate purposes, including potentially for the repayment of other debt or the repurchase, redemption or retirement of outstanding debt securities.

Previous wording

Distributions out of our Parent’s current or accumulated earnings and profits are generally classified as ordinary income except to the extent that our Parent recognizes capital gains and declares a capital gains dividend, or that such amounts constitute “qualified dividend income” subject to a reduced rate of tax. Non-corporate stockholders, including individuals, generally may deduct up to 20% of dividends from a REIT, other than capital gain dividends and dividends treated as qualified dividend income, for taxable years beginning before January 1, 2026. Distributions in excess of our Parent’s current and accumulated earnings and profits, to the extent of a stockholder’s U.S. federal income tax basis in our Parent’s stock, are generally classified as a return of capital. Distributions in excess of our Parent’s current and accumulated earnings and profits and in excess of a stockholder’s U.S. federal income tax basis in our Parent’s stock are generally characterized as capital gain. Cash provided by operating activities has been generally sufficient to fund distributions on an annual basis. However, we may also need to utilize borrowings under the Global Revolving Credit Facility to fund distributions.

Current wording

Distributions out of our Parent’s current or accumulated earnings and profits are generally classified as ordinary income except to the extent that our Parent recognizes capital gains and declares a capital gains dividend, or that such amounts constitute “qualified dividend income” subject to a reduced rate of tax. Non-corporate stockholders, including individuals, generally may deduct up to 20% of dividends from a REIT, other than capital gain dividends and dividends treated as qualified dividend income, for taxable years beginning before January 1, 2026. Distributions in excess of our Parent’s current and accumulated earnings and profits are generally classified as a return of capital to the extent of a stockholder’s U.S. federal income tax basis in our Parent’s stock. Distributions in excess of our Parent’s current and accumulated earnings and profits and in excess of a stockholder’s U.S. federal income tax basis in our Parent’s stock are generally characterized as capital gain. Cash provided by operating activities has been generally sufficient to fund distributions on an annual basis. However, we may also need to utilize borrowings under the Global Revolving Credit Facility to fund distributions.

Previous wording

For additional information regarding dividends declared and paid by our Parent on its common and preferred stock for the three months ended March 31, 2024, see Note 10. “Equity and Capital” to our condensed consolidated financial statements contained herein.

Current wording

For additional information regarding dividends declared and paid by our Parent on its common and preferred stock for the six months ended June 30, 2024, see Note 10. “Equity and Capital” to our condensed consolidated financial statements contained herein.

Previous wording

As of March 31, 2024, we had $1,193.8 million of cash and cash equivalents, excluding $5.3 million of restricted cash. Restricted cash primarily consists of contractual capital expenditures plus other deposits. As circumstances warrant, our Operating Partnership may dispose of stabilized assets or enter into joint venture arrangements with institutional investors or strategic partners, on an opportunistic basis dependent upon market conditions. Our Operating Partnership may use the proceeds from such dispositions to acquire additional properties, to fund development opportunities and for general working capital purposes, including the repayment of indebtedness. Our liquidity requirements primarily consist of:

Current wording

As of June 30, 2024, we had $2,282.1 million of cash and cash equivalents, excluding $5.2 million of restricted cash. Restricted cash primarily consists of contractual capital expenditures plus other deposits. As circumstances warrant, our Operating Partnership may dispose of assets or enter into joint venture arrangements with institutional investors or strategic partners, on an opportunistic basis dependent upon market conditions. Our Operating Partnership may use the proceeds from such dispositions to acquire additional properties, to fund development opportunities and for general working capital purposes, including the repayment of indebtedness. Our liquidity requirements primarily consist of:

Previous wording

Our properties require periodic investments of capital for customer-related capital expenditures and for general capital improvements. Depending upon customer demand, we expect to incur significant improvement costs to build out and develop additional capacity. At March 31, 2024, we had open commitments, related to construction contracts of approximately $2.0 billion, including amounts reimbursable of approximately $75.6 million.

Current wording

Our properties require periodic investments of capital for customer-related capital expenditures and for general capital improvements. Depending upon customer demand, we expect to incur significant improvement costs to build out and develop additional capacity. At June 30, 2024, we had open commitments, related to construction contracts of approximately $1.9 billion, including amounts reimbursable of approximately $68.0 million.

Previous wording

We currently expect to incur approximately $1.4 billion to $1.9 billion of capital expenditures for our development programs during the remainder of 2024. This amount could go up or down, potentially materially, based on numerous factors, including changes in demand, leasing results and availability of debt or equity capital.

Current wording

We currently expect to incur approximately $0.9 billion to $1.4 billion of capital expenditures for our consolidated development programs during the remainder of 2024. This amount could go up or down, potentially materially, based on numerous factors, including changes in demand, leasing results and availability of debt or equity capital.

Previous wording

The table below summarizes our capital expenditure activity for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The table below summarizes our capital expenditure activity for the six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

Indirect costs, including interest, capitalized in the three months ended March 31, 2024 and 2023 were $54.4 million and $50.5 million, respectively. Capitalized interest comprised approximately $28.5 million and $26.8 million of the total indirect costs capitalized for the three months ended March 31, 2024 and 2023, respectively. Capitalized interest in the three months ended March 31, 2024 increased, compared to the same period in 2023, due to an increase in qualifying activities and higher interest rates.

Current wording

Indirect costs, including interest, capitalized in the six months ended June 30, 2024 and 2023 were $110.4 million and $102.1 million, respectively. Capitalized interest comprised approximately $56.1 million and $54.7 million of the total indirect costs capitalized for the six months ended June 30, 2024 and 2023, respectively. Capitalized interest in the six months ended June 30, 2024 increased, compared to the same period in 2023, due to an increase in qualifying activities and higher interest rates.

Previous wording

Excluding capitalized interest, indirect costs in the three months ended March 31, 2024 increased compared to the same period in 2023 due primarily to capitalized amounts relating to compensation expense of employees directly engaged in construction activities. See “Future Uses of Cash” for a discussion of the amount of capital expenditures we expect to incur during the year ending December 31, 2024.

Current wording

Excluding capitalized interest, indirect costs in the six months ended June 30, 2024 increased compared to the same period in 2023 due primarily to capitalized amounts relating to compensation expense of employees directly engaged in construction activities. See “Future Uses of Cash” for a discussion of the amount of capital expenditures we expect to incur during the year ending December 31, 2024.

Previous wording

December 31, 2024 will depend upon numerous factors, including customer demand, leasing results, availability of debt or equity capital and acquisition opportunities. Further, the growing acceptance by private institutional investors of the data center asset class has generally pushed capitalization rates lower, as such private investors may often have lower return expectations than us. As a result, we anticipate near-term single asset acquisitions activity to comprise a smaller percentage of our growth while this market dynamic persists.

Current wording

Consistent with our growth strategy, we actively pursue potential acquisition opportunities, with due diligence and negotiations often at different stages at different times. The dollar value of acquisitions for the year ending December 31, 2024 will depend upon numerous factors, including customer demand, leasing results, availability of debt or equity capital and acquisition opportunities. Further, the growing acceptance by private institutional investors of the data center asset class has generally pushed capitalization rates lower, as such private investors may often have lower return expectations than us. As a result, we anticipate near-term single asset acquisitions activity to comprise a smaller percentage of our growth while this market dynamic persists.

Previous wording

We expect to meet our short-term and long-term liquidity requirements, including payment of scheduled debt maturities and funding of acquisitions and non-recurring capital improvements, with net cash from operations, future long-term secured and unsecured indebtedness and the issuance of equity and debt securities and the proceeds of equity issuances by our Parent. We also may fund future short-term and long-term liquidity requirements, including acquisitions and non-recurring capital improvements, using our Global Revolving Credit Facilities pending permanent financing. As of May 1, 2024, we had approximately $2.0 billion of borrowings available under our Global Revolving Credit Facilities.

Current wording

We expect to meet our short-term and long-term liquidity requirements, including payment of scheduled debt maturities and funding of acquisitions and non-recurring capital improvements, with net cash from operations, future long-term secured and unsecured indebtedness and the issuance of equity and debt securities and the proceeds of equity issuances by our Parent. We also may fund future short-term and long-term liquidity requirements, including acquisitions and non-recurring capital improvements, using our Global Revolving Credit Facilities pending permanent financing. As of July 31, 2024, we had approximately $1.8 billion of borrowings available under our Global Revolving Credit Facilities.

Previous wording

On July 13, 2023, we formed a joint venture with GI Partners, and GI Partners acquired a 65% interest in two stabilized hyperscale data center buildings in the Chicago metro area that we contributed. We retained a 35% interest in the joint venture. As a result of transferring control, we derecognized the data centers. In addition, GI Partners had a call option to increase their ownership interest in the joint venture from 65% to 80%. The call option top-up election notice was delivered to the Company on December 21, 2023. On January 12, 2024, GI Partners made an additional cash capital contribution in the amount of $68 million, resulting in an additional 15% ownership in the joint venture. Currently, GI Partners has an 80% interest in the joint venture, and we have retained a 20% interest.

Current wording

On July 13, 2023, we formed a joint venture with GI Partners, and GI Partners acquired a 65% interest in two stabilized hyperscale data center buildings in the Chicago metro area that we contributed. We retained a 35% interest in the joint venture. As a result of transferring control, we derecognized the data centers. In addition, GI Partners had a call option to increase their ownership interest in the joint venture from 65% to 80%. The call option top-up election notice was delivered to the Company on December 21, 2023. On January 12, 2024, GI Partners made an additional cash capital contribution, pursuant to the exercise of such call option, in the amount of $68 million, resulting in such additional 15% ownership in the joint venture. Currently, GI Partners has an 80% interest in the joint venture, and we have retained a 20% interest.

Previous wording

We also granted GI Partners an option to purchase an interest in the third facility on the same hyperscale data center campus in Chicago. On April 16, 2024, we expanded our existing joint venture with GI Partners with the sale to GI Partners of a 75% interest in this third facility. We received approximately $385 million of gross proceeds from the contribution of our data center to the joint venture and the associated financing and retained a 25% interest in the joint venture.

Current wording

We also granted GI Partners an option to purchase an interest in the third facility on the same hyperscale data center campus in Chicago. On April 16, 2024, we expanded our existing joint venture with GI Partners with the sale to GI Partners of a 75% interest in this third facility. We received approximately $386 million of net proceeds from the contribution of our data center to the joint venture and the associated financing and retained a 25% interest in the joint venture.

Previous wording

On January 11, 2024, we formed a joint venture with Blackstone Inc. to develop four hyperscale data center campuses across Frankfurt, Paris and Northern Virginia. The campuses are planned to support the construction of 10 data centers with approximately 500 megawatts of potential IT load capacity. The first phase of the joint venture closed on hyperscale data center campuses in Paris and Northern Virginia, while the second phase is scheduled to close later in 2024, upon obtaining the required approvals. We received approximately $231 million of net proceeds from the contribution of our data centers to the first phase of the joint venture and retained a 20% interest in the joint venture. Each partner will fund its pro rata share of the remaining $3.0 billion estimated development cost for the first phase of the joint venture, which is slated for completion in various stages, contingent on customer demand, which began in the first quarter of 2024.

Current wording

On January 11, 2024, we formed a joint venture with Blackstone Inc. to develop four hyperscale data center campuses across Frankfurt, Paris and Northern Virginia. The campuses are planned to support the construction of 10 data centers with approximately 500 megawatts of potential IT load capacity. The first phase of the joint venture closed on hyperscale data center campuses in Paris and Northern Virginia, while the second phase is scheduled to close later in 2024, subject to obtaining the required approvals. We received approximately $231 million of net proceeds from the contribution of our data centers to the first phase of the joint venture and retained a 20% interest in the joint venture. Each partner will fund its pro rata share of the remaining $3.0 billion estimated development cost for the first phase of the joint venture, which is slated for completion in various stages, contingent on customer demand, which began in the first quarter of 2024.

Previous wording

On March 1, 2024, we formed a joint venture with Mitsubishi Corporation, or Mitsubishi, to support the development of two data centers in the Dallas metro area. The facilities were 100% pre-leased prior to construction. We contributed the two data center buildings at a contribution value of approximately $261 million. We received approximately $153 million of gross proceeds from the contribution of our data centers to the joint venture and retained a 35% interest in the joint venture. Mitsubishi contributed such cash in exchange for a 65% interest in the joint venture. Each partner will fund its pro rata share of the remaining $140 million estimated development cost for the first phase of the project, which is slated for completion in late 2024.

Current wording

On March 1, 2024, we formed a joint venture with Mitsubishi Corporation, or Mitsubishi, to support the development of two data centers in the Dallas metro area. The facilities were 100% pre-leased prior to construction. We contributed the two data center buildings at a contribution value of approximately $261 million. We received approximately $153 million of gross proceeds from the contribution of our data centers to the joint venture and retained a 35% interest in the joint venture. Mitsubishi contributed such cash in exchange for a 65% interest in the joint venture. Each partner will fund its pro rata share of the remaining $140 million estimated development cost for the first phase of the project, of which one project has been completed in June 2024 and another is slated for completion in late 2024.

Previous wording

All distributions on our units are at the discretion of our Parent’s Board of Directors. For additional information regarding distributions paid on our common and preferred units for the three months ended March 31, 2024, see Note 10. “Equity and Capital” to our condensed consolidated financial statements contained herein.

Current wording

All distributions on our units are at the discretion of our Parent’s Board of Directors. For additional information regarding distributions paid on our common and preferred units for the three and six months ended June 30, 2024, see Note 10. “Equity and Capital” to our condensed consolidated financial statements contained herein.

Previous wording

Our ratio of debt to total enterprise value was approximately 27% (based on the closing price of Digital Realty Trust, Inc.’s common stock on March 31, 2024 of $144.04). For this purpose, our total enterprise value is defined as the sum of the market value of Digital Realty Trust, Inc.’s outstanding common stock (which may decrease, thereby increasing our debt to total enterprise value ratio), plus the liquidation value of Digital Realty Trust, Inc.’s preferred stock, plus the aggregate value of Digital Realty Trust, L.P. units not held by Digital Realty Trust, Inc. (with the per unit value equal to the market value of one share of Digital Realty Trust, Inc.’s common stock and excluding long-term incentive units, Class C units and Class D units), plus the book value of our total consolidated indebtedness.

Current wording

Our ratio of debt to total enterprise value was approximately 24% (based on the closing price of Digital Realty Trust, Inc.’s common stock on June 30, 2024 of $152.05). For this purpose, our total enterprise value is defined as the sum of the market value of Digital Realty Trust, Inc.’s outstanding common stock (which may decrease, thereby increasing our debt to total enterprise value ratio), plus the liquidation value of Digital Realty Trust, Inc.’s preferred stock, plus the aggregate value of Digital Realty Trust, L.P. units not held by Digital Realty Trust, Inc. (with the per unit value equal to the market value of one share of Digital Realty Trust, Inc.’s common stock and excluding long-term incentive units, Class C units and Class D units), plus the book value of our total consolidated indebtedness.

Previous wording

The variable rate debt shown above bears interest based on various one-month SOFR, EURIBOR, BBR, HIBOR, TIBOR, SARON and Base CD Rate rates, depending on the respective agreement governing the debt, including our Global Revolving Credit Facilities and unsecured term loans. As of March 31, 2024, our debt had a weighted average term to initial maturity of approximately 3.9 years (or approximately 4.1 years assuming exercise of extension options).

Current wording

The variable rate debt shown above bears interest based on various one-month SOFR, EURIBOR, HIBOR, TIBOR, SARON and Base CD Rate rates, depending on the respective agreement governing the debt, including our Global Revolving Credit Facilities and unsecured term loans. As of June 30, 2024, our debt had a weighted average term to initial maturity of approximately 3.8 years (or approximately 4.0 years assuming exercise of extension options).

Previous wording

As of March 31, 2024, our pro-rata share of secured debt of unconsolidated entities was approximately $1,382.1 million.

Current wording

As of June 30, 2024, our pro-rata share of secured debt of unconsolidated entities was approximately $1,415.6 million.