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DLR Reports A Good Enough Q2-19

|About: Digital Realty Trust, Inc. (DLR)

Digital Realty Trust (DLR) reported FFO/share of 1.64 compared to 1.73 in Q1-19 and 1.66 compared to Q2-18. But this lower FFO met expectations and revenue failed to meet expectations. The consensus Revenue Estimate was $807.48 million while the actual was $800.464 million.

The good (or at least "better") news came in the change or improvements in one key credit metric. DLR called one of it preferred share offerings. The logical thing happened. Debt shrank - interest costs that include preferred costs shank. The fixed charge coverage ratio improved (where higher is a good thing). The Debt/EBITDA ratio increased (where higher is a bad thing).

My spreadsheets:

DLR Digital Realty Q2-19 Q1-19 Q4-18 Q3-18 Q2-18 Q1-18 Q4-17 Q3-17 Q2-17 Q1-17 Q4-16 Q3-16 Q2-16 Q1-16 Q4-15 Q3-15
Core FFO 357,254 375,682 361,399 349,945 357,031 349,652 333,290 263,758 253,335 247,932 232,171 218,413 212,587 212,626 205,937 183,093
Core FFO/share 1.64 1.73 1.68 1.63 1.66 1.63 1.55 1.51 1.54 1.52 1.43 1.44 1.42 1.42 1.38 1.32
AFFO 328,559 333,740 310,215 332,023 332,066 328,543 290,252 237,961 233,313 221,583 211,984 206,844 199,984 191,844 165,654 157,721
AFFO/share 1.50 1.53 1.44 1.54 1.55 1.53 1.35 1.37 1.42 1.36 1.31 1.36 1.33 1.28 1.11 1.13
Core FFO Guidance 6.65 6.72 6.65 6.60 6.60 6.55 6.53 6.05 6.03 6.03 6.00 5.70 5.70 5.60 5.53 5.15
LTM Core FFO 6.68 6.70 6.60 6.47 6.35 6.23 6.12 6.00 5.93 5.81 5.71 5.66 5.54 5.42 5.27 5.15
LTM AFFO 6.01 6.06 6.06 5.97 5.80 5.67 5.50 5.46 5.45 5.36 5.28 5.08 4.85 4.57 4.34 4.15
Share Count 218,497 217,756 215,417 214,937 214,895 214,803 206,185 174,170 164,027 162,600 162,060 151,765 150,211 149,915 149,100 139,192
Revenue 800,464 814,515 778,267 768,924 754,919 744,368 731,445 609,925 585,989 550,569 576,787 546,293 514,934 504,199 500,443 435,989
Revenue/share 3.66 3.74 3.61 3.58 3.51 3.46 3.55 3.50 3.57 3.39 3.56 3.60 3.43 3.36 3.36 3.13
CFFO/sh to Rev/share 44.8% 46.3% 46.5% 45.5% 47.3% 47.1% 43.7% 43.1% 43.1% 44.8% 40.2% 40.0% 41.4% 42.3% 41.1% 42.2%
Rev/Investments 16.71% 17.39% 16.52% 17.27% 17.20% 17.5% 17.3% 14.6% 19.2% 18.6% 20.0% 19.0% 18.8% 18.1% 18.3% 17.1%
Rev/Total Investments 12.80% 13.20% 11.82% 12.86% 12.71% 12.5% 12.5% 10.7% 16.2% 15.6% 16.7% 15.8% 16.3% 15.7% 15.8% 16.5%
Investments 19,162 18,736 18,840 17,811 17,555 17,361 16,916 16,429 12,182 11,869 11,558 11,512 10,981 11,103 10,915 10,177
Intangibles 2,500 2,581 3,144 2,734 2,823 2,929 2,999 3,052 1,494 1,502 1,522 1,527 1,331 1,368 1,392 405
Goodwill 3,354 3,358 4,348 3,373 3,378 3,405 3,390 3,384 779 757 753 780 331 331 331
Total Investments 25,016 24,675 26,332 23,918 23,756 23,695 23,305 22,865 14,455 14,128 13,833 13,819 12,643 12,802 12,638 10,582
Credit Facility 1,418 843 1,648 590 467 952 551 138 563 564 199 153 88 678 960 683
Term Loans 808 808 1,179 1,353 1,377 1,428 1,420 1,433 1,520 1,506 1,482 1,522 1,546 1,566 924 937
Senior Notes 8,512 8,523 7,589 7,131 7,156 6,661 6,571 6,806 4,351 4,128 4,154 4,238 4,253 3,663 3,713 2,795
Mort & Sec Debt 105 105 686 107 106 106 107 107 3 3 3 112 249 250 303 305
Debt from Pref 1,100 1,453 1,249 1,249 1,248 1,250 1,250 1,249 837 1,013 1,013 1,013 1,013 1,013 1,013 1,013
Total Debt 11,943 11,732 12,351 10,430 10,354 11,647 9,899 9,733 7,274 7,214 6,851 7,048 7,149 7,170 6,913 5,733
Debt/share 54.66 53.88 57.24 48.53 48.18 54.22 48.01 55.88 44.35 44.37 42.27 46.44 47.59 47.83 46.36 41.19
Interest Exp 86,051 101,552 84,883 80,851 78,810 76,985 73,989 71,621 57,582 55,450 56,226 63,084 59,909 57,261 61,717 48,138
Preferred Exp 16,670 20,943 20,329 20,329 20,329 20,329 20,329 16,575 14,505 17,393 17,393 21,530 22,424 22,424 24,056 18,456
Total Debt Exp 102,721 122,495 105,212 101,180 99,139 97,314 94,318 88,196 72,087 72,843 73,619 84,614 82,333 79,685 85,773 66,594
Debt Exp/Debt 3.44% 4.18% 3.41% 3.88% 3.83% 3.34% 3.81% 3.62% 3.96% 4.04% 4.30% 4.80% 4.61% 4.45% 4.96% 4.65%
CFFO/Investments 7.45% 8.02% 7.67% 7.85% 8.14% 8.05% 7.87% 6.42% 8.32% 8.36% 8.03% 7.59% 7.74% 7.66% 7.55% 7.20%
CFFO/Total Invests 5.71% 6.09% 5.49% 5.85% 6.01% 5.90% 5.83% 4.61% 7.01% 7.02% 6.71% 6.32% 6.72% 6.64% 6.52% 6.92%
Rpt Debt/EBITDA 6.1x 5.5x 5.0x 5.2x 5.2x 5.3x 5.2x 6.0x 5.1x 4.9x 4.8x 5.1x 5.2x 5.3x 5.2x 4.8x
Reported Fixed_Charge Coverage 4.2x 3.6x 4.8x 4.1x 4.3x 4.3x 4.2x 3.9x 4.3x 4.2x 3.9x 3.4x 3.9x 3.3x 4.6x 3.3x
On 10-10-18 DLR sold $400 million of 3.75% notes due 2030.
On 6-14-18 DLR sold $650 million of 4.45% notes due 2028.
On 8-02-17 DLR sold $350 million of 2.750% notes due 2023 and $1.0 billion of 3.700% notes due 2027.
On 8-02-17 DLR sold $200 million of 5.25% Series J Cumulative Redeemable Preferred Stock
Historical Core FFO: Q2-15 1.30 Q1-15 1.27 Q4-14 1.26
Historical AFFO: Q2-15 1.05 Q1-15 1.05 Q4-14 0.92
DLR has a BBB rating from S&P and Fitch and Baa2 from Moody's - Preferred Stocks DLRPRC, DLRPRG, DLRPRH (called), DLRPRI, DLRPRJ & DKRPRK are rated BB+

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.