Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS


		Page No.
Management’s Reports on Internal Control over Financial Reporting		80
Reports of Independent Registered Public Accounting Firm (Auditor Firm ID: 185)		81
Consolidated Financial Statements of Digital Realty Trust, Inc.
Consolidated Balance Sheets as of December 31, 2021 and 2020		86
Consolidated Income Statements for each of the years in the three-year period ended December 31, 2021		87
Consolidated Statements of Comprehensive Income for each of the years in the three-year period ended December 31, 2021		88
Consolidated Statements of Equity for each of the years in the three-year period ended December 31, 2021		91
Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2021		92
Consolidated Financial Statements of Digital Realty Trust, L.P.
Consolidated Balance Sheets as of December 31, 2021 and 2020		93
Consolidated Income Statements for each of the years in the three-year period ended December 31, 2021		94
Consolidated Statements of Comprehensive Income for each of the years in the three-year period ended December 31, 2021		95
Consolidated Statements of Capital for each of the years in the three-year period ended December 31, 2021		96
Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2021		99
Consolidated Financial Statements of Digital Realty Trust, Inc. and Digital Realty Trust, L.P.
Notes to Consolidated Financial Statements		100
Supplemental Schedule—Schedule III—Properties and Accumulated Depreciation		146
Notes to Schedule III—Properties and Accumulated Depreciation		148

Index to Financial Statements

Management’s Report on Internal Control over Financial Reporting

The management of Digital Realty Trust, Inc. (the Company) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f). Our internal control system was designed to provide reasonable assurance to the Company’s management and board of directors regarding the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013). We acquired Interxion and subsidiaries during the year ended December 31, 2021. Based on our assessment, management concluded that as of December 31, 2021, the Company’s internal control over financial reporting was effective based on those criteria.

Our independent registered public accounting firm has issued an audit report on the Company’s internal control over financial reporting. This report appears on page 83.

Management’s Report on Internal Control over Financial Reporting

The management of Digital Realty Trust, L.P. (the Operating Partnership) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f). Our internal control system was designed to provide reasonable assurance to the Operating Partnership’s management regarding the preparation and fair presentation of published financial statements.

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of our general partner, we assessed the effectiveness of the Operating Partnership’s internal control over financial reporting as of December 31, 2021. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013). We acquired Interxion and subsidiaries during the year ended December 31, 2021. Based on our assessment, management concluded that as of December 31, 2021, the Operating Partnership’s internal control over financial reporting was effective based on those criteria.

Index to Financial Statements

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors Digital Realty Trust, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Digital Realty Trust, Inc. and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated income statements, and statements of comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes and financial statement schedule III, properties and accumulated depreciation (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 25, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Index to Financial Statements

Evaluation of lease revenue

As discussed in Note 2 to the consolidated financial statements, the Company records rental revenue on a straight-line basis if the Company determines on a lease-by-lease basis it is probable substantially all lease payments over the term of the lease will be collected. Whenever the results of that assessment indicate that it is not probable that the Company will be able to collect substantially all lease payments over the remaining term of the lease, the Company records a reduction to rental revenue equal to the then-current combined balance of the deferred rent and amounts contractually due but unpaid for the lease (rent receivable), and ceases recognizing rental revenue on a straight-line basis and commences recognizing rental revenue on a cash collected basis. Rental and other services revenue was $4.4 billion for the year ended December 31, 2021 and deferred rent and rent receivable, net was $547.4 million and $370.5 million, respectively, as of December 31, 2021.

We identified the evaluation of the probability of collection of lease payments as a critical audit matter. Evaluating the Company’s probability assessment of collection of substantially all the lease payments for its leases required significant auditor judgment because of the subjective nature of the evidence obtained. Specifically, evaluating the creditworthiness of the customer and any guarantors required significant auditor judgment.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s probability assessment of lease payment collection process, including controls related to the assessment of the creditworthiness of the customer and any guarantors. For a selection of the Company’s leases, we evaluated the Company’s determination of the collectibility of substantially all of the lease payments by: (i) comparing the legal name of customer and any guarantor to the underlying lease agreements and third-party credit rating report, (ii) evaluating the creditworthiness of the customer by assessing their credit rating, (iii) reading publicly available information, including the customer’s financial statements, analyst reports, recent public filings, and news articles, and (iv) inquiring of Company employees to obtain evidence regarding creditworthiness of the customers.

.
		/s/ KPMG LLP

We have served as the Company’s auditor since 2004.

San Francisco, California
February 25, 2022

Index to Financial Statements

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Digital Realty Trust, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Digital Realty Trust, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated income statements and consolidated statements of comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes and financial statement schedule III, properties and accumulated depreciation (collectively, the consolidated financial statements), and our report dated February 25, 2022 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


		/s/ KPMG LLP
San Francisco, California
February 25, 2022

Index to Financial Statements

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of the General Partner and Partners Digital Realty Trust, L.P.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Digital Realty Trust, L.P. and subsidiaries (the Operating Partnership) as of December 31, 2021 and 2020, the related consolidated income statements, and consolidated statements of comprehensive income, capital, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes and financial statement schedule III, properties and accumulated depreciation (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Operating Partnership as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Operating Partnership’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Operating Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Operating Partnership’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

Index to Financial Statements

Evaluation of lease revenue

As discussed in Note 2 to the consolidated financial statements, the Operating Partnership records rental revenue on a straight-line basis if the Operating Partnership determines on a lease-by-lease basis it is probable substantially all lease payments over the term of the lease will be collected. Whenever the results of that assessment indicate that it is not probable that the Operating Partnership will be able to collect substantially all lease payments over the remaining term of the lease, the Operating Partnership records a reduction to rental revenue equal to the then-current combined balance of the deferred rent and amounts contractually due but unpaid for the lease (rent receivable), and ceases recognizing rental revenue on a straight-line basis and commences recognizing rental revenue on a cash collected basis. Rental and other services revenue was $4.4 billion for the year ended December 31, 2021 and deferred rent and rent receivable, net was $547.4 million and $370.5 million, respectively, as of December 31, 2021.

We identified the evaluation of the probability of collection of lease payments as a critical audit matter. Evaluating the Operating Partnership’s probability assessment of collection of substantially all the lease payments for its leases required significant auditor judgment because of the subjective nature of the evidence obtained. Specifically, evaluating the creditworthiness of the customer and any guarantors required significant auditor judgment.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Operating Partnership’s probability assessment of lease payment collection process, including controls related to the assessment of the creditworthiness of the customer and any guarantors. For a selection of the Operating Partnership’s leases, we evaluated the Operating Partnership’s determination of the collectibility of substantially all of the lease payments by: (i) comparing the legal name of customer and any guarantor to the underlying lease agreements and third-party credit rating report, (ii) evaluating the creditworthiness of the customer by assessing their credit rating, (iii) reading publicly available information, including the customer’s financial statements, analyst reports, recent public filings, and news articles, and (iv) inquiring of Operating Partnership employees to obtain evidence regarding creditworthiness of the customers.


		/s/ KPMG LLP

We have served as the Operating Partnership’s auditor since 2004.

San Francisco, California
February 25, 2022

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)


	December 31,		December 31,
	2021		2020
ASSETS
Investments in real estate:
Investments in properties, net	$	20,762,241	$	20,582,954
Investments in unconsolidated entities		1,807,689		1,148,158
Net investments in real estate		22,569,930		21,731,112
Operating lease right-of-use assets, net		1,405,441		1,386,959
Cash and cash equivalents		142,698		108,501
Accounts and other receivables, net		671,721		603,111
Deferred rent, net		547,385		528,180
Goodwill		7,937,440		8,330,996
Customer relationship value, deferred leasing costs and intangibles, net		2,735,486		3,122,904
Other assets		359,459		264,528
Total assets	$	36,369,560	$	36,076,291
LIABILITIES AND EQUITY
Global revolving credit facilities, net	$	398,172	$	531,905
Unsecured term loans, net		—		536,580
Unsecured senior notes, net of discount		12,903,370		11,997,010
Secured and other debt, including premiums		146,668		239,222
Operating lease liabilities		1,512,187		1,468,712
Accounts payable and other accrued liabilities		1,543,623		1,420,162
Deferred tax liabilities, net		666,451		698,308
Accrued dividends and distributions		338,729		324,386
Security deposits and prepaid rents		336,578		371,659
Total liabilities		17,845,778		17,587,944

Redeemable noncontrolling interests		46,995		42,011
Commitments and contingencies
Equity:
Stockholders’ Equity:
Preferred Stock: $0.01 par value per share, 110,000,000 shares authorized; $755,000 and $956,250 liquidation preference ($25.00 per share), 30,200,000 and 38,250,000 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively		731,690		950,940
Common Stock: $0.01 par value per share, 392,000,000 shares authorized; 284,415,013 and 280,289,726 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively		2,824		2,788
Additional paid-in capital		21,075,863		20,626,897
Accumulated dividends in excess of earnings		(3,631,929)		(3,997,938)
Accumulated other comprehensive (loss) income, net		(173,880)		135,010
Total stockholders’ equity		18,004,568		17,717,697
Noncontrolling interests		472,219		728,639
Total equity		18,476,787		18,446,336
Total liabilities and equity	$	36,369,560	$	36,076,291

See accompanying notes to the consolidated financial statements.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

(in thousands, except share and per share data)


	Year Ended December 31,
	2021		2020		2019
Operating Revenues:
Rental and other services	$	4,395,039	$	3,886,546	$	3,196,356
Fee income and other		32,843		17,063		12,885
Total operating revenues		4,427,882		3,903,609		3,209,241
Operating Expenses:
Rental property operating and maintenance		1,570,506		1,331,493		1,020,578
Property taxes and insurance		207,814		182,623		172,183
Depreciation and amortization		1,486,632		1,366,379		1,163,774
General and administrative		400,654		351,369		211,097
Transactions and integration		47,426		106,662		27,925
Impairment of investments in real estate		18,291		6,482		5,351
Other		2,550		1,075		14,118
Total operating expenses		3,733,873		3,346,083		2,615,026
Operating income		694,009		557,526		594,215
Other Income (Expenses):
Equity in earnings (loss) of unconsolidated entities		62,283		(57,629)		8,067
Gain on disposition of properties, net		1,380,795		316,894		267,651
Gain on deconsolidation, net		—		—		67,497
Other (expenses) income, net		(4,358)		20,222		66,000
Interest expense		(293,846)		(333,021)		(353,057)
Loss from early extinguishment of debt		(18,672)		(103,215)		(39,157)
Income tax expense		(72,799)		(38,047)		(11,995)
Net income		1,747,412		362,730		599,221
Net income attributable to noncontrolling interests		(38,153)		(6,332)		(19,460)
Net income attributable to Digital Realty Trust, Inc.		1,709,259		356,398		579,761
Preferred stock dividends, including undeclared dividends		(45,761)		(76,536)		(74,990)
Gain (loss) on redemption of preferred stock		18,000		(16,520)		(11,760)
Net income available to common stockholders	$	1,681,498	$	263,342	$	493,011
Net income per share available to common stockholders:
Basic	$	5.95	$	1.01	$	2.37
Diluted	$	5.94	$	1.00	$	2.35
Weighted average common shares outstanding:
Basic		282,474,927		260,098,978		208,325,823
Diluted		283,221,968		262,522,508		209,462,247

See accompanying notes to the consolidated financial statements.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)


	Year Ended December 31,
	2021		2020		2019
Net income	$	1,747,412	$	362,730	$	599,221
Other comprehensive income (loss):
Foreign currency translation adjustments		(318,828)		230,340		23,975
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty		—		—		21,687
Increase (decrease) in fair value of interest rate swaps		1,279		(12,425)		(9,232)
Reclassification to interest expense from interest rate swaps		1,304		8,294		(7,446)
Other comprehensive income (loss)		(316,245)		226,209		28,984
Comprehensive income		1,431,167		588,939		628,205
Comprehensive income attributable to noncontrolling interests		(30,796)		(9,610)		(20,719)
Comprehensive income attributable to Digital Realty Trust, Inc.	$	1,400,371	$	579,329	$	607,486

See accompanying notes to the consolidated financial statements.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY (continued)

(in thousands, except share data)


												Accumulated
										Accumulated		Other
	Redeemable				Number of			Additional		Dividends in		Comprehensive		Total
	Noncontrolling		Preferred		Common	Common		Paid-in		Excess of		Loss,		Noncontrolling		Total
	Interests		Stock		Shares	Stock		Capital		Earnings		Net		Interests		Equity
Balance as of December 31, 2018	$	15,832	$	1,249,560	206,425,656	$	2,051	$	11,355,751	$	(2,633,071)	$	(115,647)	$	999,566	$	10,858,210
Conversion of common units to common stock		—		—	2,154,460		22		190,492		—		—		(190,514)		—
Issuance of unvested restricted stock, net of forfeitures		—		—	256,868		—		—		—		—		—		—
Common stock offering costs		—		—	—		—		(2,530)		—		—		—		(2,530)
Shares issued under employee stock purchase plan		—		—	63,774		—		5,462		—		—		—		5,462
Issuance of series K preferred stock, net of offering costs		—		203,264	—		—		—		—		—		—		203,264
Issuance of series L preferred stock, net of offering costs		—		334,886	—		—		—		—		—		—		334,886
Redemption of series H preferred stock		—		(353,290)	—		—		—		(11,760)		—		—		(365,050)
Amortization of unearned compensation on share-based awards		—		—	—		—		38,662		—		—		—		38,662
Reclassification of vested share-based awards		—		—	—		—		(8,458)		—		—		8,458		—
Adjustment to redeemable noncontrolling interests		25,937		—	—		—		(2,059)		—		—		(23,878)		(25,937)
Dividends declared on preferred stock		—		—	—		—		—		(74,990)		—		—		(74,990)
Dividends and distributions on common stock and common and incentive units		(676)		—	—		—		—		(900,201)		—		(38,278)		(938,479)
Contributions from noncontrolling interests in consolidated entities		—		—	—		—		—		—		—		63,173		63,173
Deconsolidation of consolidated entity		—		—	—		—		—		—		—		(110,086)		(110,086)
Cumulative effect adjustment from adoption of new accounting standard		—		—	—		—		—		(6,318)		—		—		(6,318)
Net income		372		—	—		—		—		579,761		—		19,088		598,849
Other comprehensive income—foreign currency translation adjustments		—		—	—		—		—		—		43,702		1,960		45,662
Other comprehensive loss—fair value of interest rate swaps		—		—	—		—		—		—		(8,839)		(393)		(9,232)
Other comprehensive loss—reclassification of accumulated other comprehensive income to interest expense		—		—	—		—		—		—		(7,138)		(308)		(7,446)
Balance as of December 31, 2019	$	41,465	$	1,434,420	208,900,758	$	2,073	$	11,577,320	$	(3,046,579)	$	(87,922)	$	728,788	$	10,608,100

See accompanying notes to the consolidated financial statements.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY (continued)

(in thousands, except share data)


												Accumulated
										Accumulated		Other
	Redeemable				Number of			Additional		Dividends in		Comprehensive		Total
	Noncontrolling		Preferred		Common	Common		Paid-in		Excess of		Income (Loss),		Noncontrolling		Total
	Interests		Stock		Shares	Stock		Capital		Earnings		Net		Interests		Equity
Balance as of December 31, 2019	$	41,465	$	1,434,420	208,900,758	$	2,073	$	11,577,320	$	(3,046,579)	$	(87,922)	$	728,788	$	10,608,100
Conversion of common units to common stock		—		—	1,070,014		10		92,543		—		—		(92,553)		—
Common stock and share-based awards issued in connection with business combinations		—		—	54,487,997		545		7,012,675		—		—		—		7,013,220
Issuance of common stock, net of costs		—		—	15,920,893		160		1,888,366		—		—		—		1,888,526
Shares issued under employee stock purchase plan		—		—	58,136		—		6,503		—		—		—		6,503
Shares repurchased and retired to satisfy tax withholding upon vesting		—		—	—		—		(8,570)		—		—		—		(8,570)
Amortization of share-based compensation		—		—	—		—		78,757		—		—		—		78,757
Vesting of restricted stock, net		—		—	(148,072)		—		—		—		—		—		—
Reclassification of vested share-based awards		—		—	—		—		(17,611)		—		—		17,611		—
Redemption of series G preferred stock		—		(241,468)	—		—		—		(8,532)		—		—		(250,000)
Redemption of series I preferred stock		—		(242,012)	—		—		—		(7,988)		—		—		(250,000)
Adjustment to redeemable noncontrolling interests		3,086		—	—		—		(3,086)		—		—		—		(3,086)
Dividends declared on preferred stock		—		—	—		—		—		(76,536)		—		—		(76,536)
Dividends and distributions on common stock and common and incentive units		(700)		—	—		—		—		(1,214,701)		—		(37,147)		(1,251,848)
Contributions from noncontrolling interests		2,089		—	—		—		—		—		—		97,914		97,914
Net income (loss)		(4,417)		—	—		—		—		356,398		—		10,749		367,147
Other comprehensive income—foreign currency translation adjustments		488		—	—		—		—		—		226,849		3,491		230,340
Other comprehensive loss—fair value of interest rate swaps		—		—	—		—		—		—		(11,980)		(445)		(12,425)
Other comprehensive income—reclassification of accumulated other comprehensive income to interest expense		—		—	—		—		—		—		8,063		231		8,294
Balance as of December 31, 2020	$	42,011	$	950,940	280,289,726	$	2,788	$	20,626,897	$	(3,997,938)	$	135,010	$	728,639	$	18,446,336

See accompanying notes to the consolidated financial statements.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY (continued)

(in thousands, except share data)


												Accumulated
										Accumulated		Other
	Redeemable				Number of			Additional		Dividends in		Comprehensive		Total
	Noncontrolling		Preferred		Common	Common		Paid-in		Excess of		Income (Loss),		Noncontrolling		Total
	Interests		Stock		Shares	Stock		Capital		Earnings		Net		Interests		Equity
Balance as of December 31, 2020	$	42,011	$	950,940	280,289,726	$	2,788	$	20,626,897	$	(3,997,938)	$	135,010	$	728,639	$	18,446,336
Conversion of common units to common stock		—		—	2,502,331		25		206,695		—		—		(206,720)		—
Issuance of common units in connection with acquisition		—		—	125,395		1		18,269		—		—		—		18,270
Issuance of common stock, net of costs		—		—	1,060,943		11		172,085		—		—		—		172,096
Shares issued under employee stock purchase plan		—		—	82,129		—		9,895		—		—		—		9,895
Redemption of series C preferred stock		—		(219,250)	—		—		—		18,000		—		—		(201,250)
Shares repurchased and retired to satisfy tax withholding upon vesting		—		—	—		(1)		(16,733)		—		—		—		(16,734)
Amortization of unearned compensation on share-based awards		—		—	—		—		88,414		—		—		—		88,414
Vesting of restricted stock, net		—		—	385,783		—		—		—		—		—		—
Reclassification of vested share-based awards		—		—	—		—		(23,829)		—		—		23,829		—
Adjustment to redeemable noncontrolling interests		5,830		—	—		—		(5,830)		—		—		—		(5,830)
Dividends declared on preferred stock		—		—	—		—		—		(45,761)		—		—		(45,761)
Dividends and distributions on common stock and common and incentive units		(724)		—	—		—		—		(1,315,489)		—		(31,567)		(1,347,056)
Contributions from (distributions to) noncontrolling interests		(1,052)		—	—		—		—		—		—		125,186		125,186
Deconsolidation of consolidated entities		—		—	—		—		—		—		—		(197,016)		(197,016)
Net income		930		—	—		—		—		1,709,259		—		37,223		1,746,482
Other comprehensive loss—foreign currency translation adjustments		—		—	—		—		—		—		(311,413)		(7,415)		(318,828)
Other comprehensive income—fair value of interest rate swaps		—		—	—		—		—		—		1,250		29		1,279
Other comprehensive income—reclassification of accumulated other comprehensive income to interest expense		—		—	—		—		—		—		1,273		31		1,304
Balance as of December 31, 2021	$	46,995	$	731,690	284,446,307	$	2,824	$	21,075,863	$	(3,631,929)	$	(173,880)	$	472,219	$	18,476,787

See accompanying notes to the consolidated financial statements.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Year Ended December 31,
	2021		2020		2019
Cash flows from operating activities:
Net income	$	1,747,412	$	362,730	$	599,221
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on disposition of properties, net		(1,380,795)		(316,894)		(335,148)
Equity in (earnings) loss of unconsolidated entities		(62,283)		57,629		(8,067)
Distributions from unconsolidated entities		66,232		39,878		44,293
Depreciation and amortization		1,486,632		1,366,379		1,163,774
Amortization of share-based compensation		84,083		74,577		34,905
Loss from early extinguishment of debt		18,672		103,215		39,157
Amortization of acquired above-market leases and acquired below-market leases, net		6,074		12,686		17,097
Amortization of deferred financing costs and debt discount / premium		18,694		19,202		15,622
Other items, net		27,341		(4,443)		(26,535)
Changes in assets and liabilities:
Increase in accounts receivable and other assets		(425,983)		(103,327)		(103,162)
Increase in accounts payable and other liabilities		116,149		94,909		72,660
Net cash provided by operating activities		1,702,228		1,706,541		1,513,817
Cash flows from investing activities:
Improvements to investments in real estate		(2,520,772)		(2,064,066)		(1,436,902)
Cash paid for business combinations and assets acquisition, net of cash and restricted cash acquired		(192,015)		(908,567)		(75,704)
Proceeds from (investment in) unconsolidated entities, net		2,665		(144,323)		1,296,699
Proceeds from sale of real estate		1,691,072		564,615		—
Other investing activities, net		(42,671)		(47,006)		(59,085)
Net cash used in investing activities		(1,061,721)		(2,599,347)		(274,992)
Cash flows from financing activities:
Net (payments on) proceeds from credit facilities	$	(89,554)	$	162,111	$	(1,412,388)
Borrowings on secured / unsecured debt		1,824,389		3,573,120		2,869,240
Repayments on secured / unsecured debt		(990,968)		(2,928,924)		(1,915,301)
Premium paid for early extinguishment of debt		(16,482)		(96,124)		(35,067)
Capital contributions from noncontrolling interests, net		124,134		102,285		63,173
Proceeds from issuance of common stock, net		172,096		1,879,957		535,620
Redemption of preferred stock		(201,250)		(500,000)		(365,050)
Payments of dividends and distributions		(1,379,198)		(1,239,318)		(996,766)
Other financing activities, net		(33,797)		(17,418)		(15,482)
Net cash (used in) provided by financing activities		(590,630)		935,689		(1,272,021)
Net increase (decrease) in cash, cash equivalents and restricted cash		49,877		42,883		(33,196)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(22,044)		(16,484)		(4,773)
Cash, cash equivalents and restricted cash at beginning of period		123,652		97,253		135,222
Cash, cash equivalents and restricted cash at end of period	$	151,485	$	123,652	$	97,253

See accompanying notes to the consolidated financial statements.

Index to Financial Statements

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except unit and per unit data)


	December 31,		December 31,
	2021		2020
ASSETS
Investments in real estate:
Investments in properties, net	$	20,762,241	$	20,582,954
Investments in unconsolidated entities		1,807,689		1,148,158
Net investments in real estate		22,569,930		21,731,112
Operating lease right-of-use assets, net		1,405,441		1,386,959
Cash and cash equivalents		142,698		108,501
Accounts and other receivables, net		671,721		603,111
Deferred rent, net		547,385		528,180
Goodwill		7,937,440		8,330,996
Customer relationship value, deferred leasing costs and intangibles, net		2,735,486		3,122,904
Other assets		359,459		264,528
Total assets	$	36,369,560	$	36,076,291
LIABILITIES AND CAPITAL
Global revolving credit facilities, net	$	398,172	$	531,905
Unsecured term loans, net		—		536,580
Unsecured senior notes, net		12,903,370		11,997,010
Secured and other debt, including premiums		146,668		239,222
Operating lease liabilities		1,512,187		1,468,712
Accounts payable and other accrued liabilities		1,543,623		1,420,162
Deferred tax liabilities, net		666,451		698,308
Accrued dividends and distributions		338,729		324,386
Security deposits and prepaid rents		336,578		371,659
Total liabilities		17,845,778		17,587,944

Redeemable noncontrolling interests		46,995		42,011
Commitments and contingencies
Capital:
Partners’ capital:
General Partner:
Preferred units, $755,000 and $956,250 liquidation preference ($25.00 per unit), 30,200,000 and 38,250,000 units issued and outstanding as of December 31, 2021 and December 31, 2020, respectively		731,690		950,940
Common units, 284,415,013 and 280,289,726 units issued and outstanding as of December 31, 2021 and December 31, 2020, respectively		17,446,758		16,631,747
Limited Partners, 5,931,771 and 8,046,267 units issued and outstanding as of December 31, 2021 and December 31, 2020, respectively		432,902		609,190
Accumulated other comprehensive (loss) income		(181,445)		134,800
Total partners’ capital		18,429,905		18,326,677
Noncontrolling interests in consolidated entities		46,882		119,659
Total capital		18,476,787		18,446,336
Total liabilities and capital	$	36,369,560	$	36,076,291

See accompanying notes to the consolidated financial statements.

Index to Financial Statements

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

(in thousands, except unit and per unit data)


	Year Ended December 31,
	2021		2020		2019
Operating Revenues:
Rental and other services	$	4,395,039	$	3,886,546	$	3,196,356
Fee income and other		32,843		17,063		12,885
Total operating revenues		4,427,882		3,903,609		3,209,241
Operating Expenses:
Rental property operating and maintenance		1,570,506		1,331,493		1,020,578
Property taxes and insurance		207,814		182,623		172,183
Depreciation and amortization		1,486,632		1,366,379		1,163,774
General and administrative		400,654		351,369		211,097
Transactions and integration		47,426		106,662		27,925
Impairment of investments in real estate		18,291		6,482		5,351
Other		2,550		1,075		14,118
Total operating expenses		3,733,873		3,346,083		2,615,026
Operating income		694,009		557,526		594,215
Other Income (Expenses):
Equity in earnings (loss) of unconsolidated entities		62,283		(57,629)		8,067
Gain on disposition of properties, net		1,380,795		316,894		267,651
Gain on deconsolidation, net		—		—		67,497
Other (expense) income, net		(4,358)		20,222		66,000
Interest expense		(293,846)		(333,021)		(353,057)
Loss from early extinguishment of debt		(18,672)		(103,215)		(39,157)
Income tax expense		(72,799)		(38,047)		(11,995)
Net income		1,747,412		362,730		599,221
Net loss attributable to noncontrolling interests		947		3,168		1,640
Net income attributable to Digital Realty Trust, L.P.		1,748,359		365,898		600,861
Preferred units distributions, including undeclared distributions		(45,761)		(76,536)		(74,990)
Gain (loss) on redemption of preferred units		18,000		(16,520)		(11,760)
Net income available to common unitholders	$	1,720,598	$	272,842	$	514,111
Net income per unit available to common unitholders:
Basic	$	5.95	$	1.02	$	2.37
Diluted	$	5.94	$	1.01	$	2.35
Weighted average common units outstanding:
Basic		289,165,448		268,072,983		217,284,755
Diluted		289,912,489		270,496,513		218,421,179

See accompanying notes to the consolidated financial statements.

Index to Financial Statements

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)


	Year Ended December 31,
	2021		2020		2019
Net income	$	1,747,412	$	362,730	$	599,221
Other comprehensive income (loss):
Foreign currency translation adjustments		(318,828)		230,340		23,975
Reclassification of foreign currency translation adjustment due to deconsolidation of Ascenty		—		—		21,687
Increase (decrease) in fair value of interest rate swaps		1,279		(12,425)		(9,232)
Reclassification to interest expense from interest rate swaps		1,304		8,294		(7,446)
Other comprehensive income (loss)		(316,245)		226,209		28,984
Comprehensive income attributable to Digital Realty Trust, L.P.	$	1,431,167	$	588,939	$	628,205
Comprehensive loss attributable to noncontrolling interests		947		3,168		1,640
Comprehensive income attributable to Digital Realty Trust, L.P.	$	1,432,114	$	592,107	$	629,845

See accompanying notes to the consolidated financial statements.

Index to Financial Statements

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CAPITAL (continued)

(in thousands, except unit data)


												Accumulated
	Redeemable		General Partner						Limited Partners			Other
	Noncontrolling		Preferred Units			Common Units			Common Units			Comprehensive		Noncontrolling
	Interests		Units	Amount		Units	Amount		Units	Amount		Loss		Interests		Total Capital
Balance as of December 31, 2018	$	15,832	50,650,000	$	1,249,560	206,425,656	$	8,724,731	10,580,884	$	911,256	$	(120,393)	$	93,056	$	10,858,210
Conversion of limited partner common units to general partner common units		—	—		—	2,154,460		190,514	(2,154,460)		(190,514)		—		—		—
Issuance of unvested restricted common units, net of forfeitures		—	—		—	256,868		—	—		—		—		—		—
Common unit offering costs		—	—		—	—		(2,530)	—		—		—		—		(2,530)
Issuance of common units, net of forfeitures		—	—		—	—		—	416,731		—		—		—		—
Units issued in connection with employee stock purchase plan		—	—		—	63,774		5,462	—		—		—		—		5,462
Issuance of series K preferred units, net of offering costs		—	8,400,000		203,264	—		—	—		—		—		—		203,264
Issuance of series L preferred units, net of offering costs		—	13,800,000		334,886	—		—	—		—		—		—		334,886
Redemption of series H preferred units		—	(14,600,000)		(353,290)	—		(11,760)	—		—		—		—		(365,050)
Amortization of unearned compensation on share-based awards		—	—		—	—		38,662	—		—		—		—		38,662
Reclassification of vested share-based awards		—	—		—	—		(8,458)	—		8,458		—		—		—
Adjustment to redeemable noncontrolling interests		25,937	—		—	—		(2,059)	—		—		—		(23,878)		(25,937)
Distributions		(676)	—		(74,990)	—		(900,201)	—		(38,278)		—		—		(1,013,469)
Contributions from noncontrolling interests in consolidated entities		—	—		—	—		—	—		—		—		63,173		63,173
Deconsolidation of consolidated entity		—	—		—	—		—	—		—		—		(110,086)		(110,086)
Cumulative effect adjustment from adoption of new accounting standard		—	—		—	—		(6,318)	—		—		—		—		(6,318)
Net income		372	—		74,990	—		504,771	—		20,728		—		(1,640)		598,849
Other comprehensive income - foreign currency translation adjustments		—	—		—	—		—	—		—		45,662		—		45,662
Other comprehensive loss - fair value of interest rate swaps		—	—		—	—		—	—		—		(9,232)		—		(9,232)
Other comprehensive loss – reclassification of accumulated other comprehensive income to interest expense		—	—		—	—		—	—		—		(7,446)		—		(7,446)
Balance as of December 31, 2019	$	41,465	58,250,000	$	1,434,420	208,900,758	$	8,532,814	8,843,155	$	711,650	$	(91,409)	$	20,625	$	10,608,100

See accompanying notes to the consolidated financial statements.

Index to Financial Statements

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CAPITAL (continued)

(in thousands, except unit data)


												Accumulated
	Redeemable		General Partner						Limited Partners			Other
	Noncontrolling		Preferred Units			Common Units			Common Units			Comprehensive		Noncontrolling
	Interests		Units	Amount		Units	Amount		Units	Amount		Income (Loss)		Interests		Total Capital
Balance as of December 31, 2019	$	41,465	58,250,000	$	1,434,420	208,900,758	$	8,532,814	8,843,155	$	711,650	$	(91,409)	$	20,625	$	10,608,100
Conversion of limited partner common units to general partner common units		—	—		—	1,070,014		92,553	(1,070,014)		(92,553)		—		—		—
Common units and share-based awards issued in connection with business combinations		—	—		—	54,487,997		7,013,220	—		—		—		—		7,013,220
Issuance of common units, net of offering costs		—	—		—	15,920,893		1,888,526	—		—		—		—		1,888,526
Issuance of common units, net of forfeitures		—	—		—	—		—	273,126		—		—		—		—
Units issued in connection with employee stock purchase plan		—	—		—	58,136		6,503	—		—		—		—		6,503
Units repurchased and retired to satisfy tax withholding upon vesting		—	—		—	—		(7,320)	—		—		—		—		(7,320)
Amortization of share-based compensation		—	—		—	—		77,507	—		—		—		—		77,507
Vesting of restricted common units, net		—	—		—	(148,072)		—	—		—		—		—		—
Reclassification of vested share-based awards		—	—		—	—		(17,611)	—		17,611		—		—		—
Redemption of series G preferred units		—	(10,000,000)		(241,468)	—		(8,532)	—		—		—		—		(250,000)
Redemption of series I preferred units		—	(10,000,000)		(242,012)	—		(7,988)	—		—		—		—		(250,000)
Adjustment to redeemable partnership units		3,086	—		—	—		(3,086)	—		—		—		—		(3,086)
Distributions		(700)	—		—	—		(1,214,701)	—		(37,147)		—		—		(1,251,848)
Contributions from noncontrolling interests in consolidated entities		2,089	—		—	—		—	—		—		—		97,914		97,914
Net income (loss)		(4,417)	—		—	—		279,862	—		9,629		—		1,120		290,611
Other comprehensive income—foreign currency translation adjustments		488	—		—	—		—	—		—		230,340		—		230,340
Other comprehensive loss—fair value of interest rate swaps		—	—		—	—		—	—		—		(12,425)		—		(12,425)
Other comprehensive income—reclassification of accumulated other comprehensive loss to interest expense		—	—		—	—		—	—		—		8,294		—		8,294
Balance as of December 31, 2020	$	42,011	38,250,000	$	950,940	280,289,726	$	16,631,747	8,046,267	$	609,190	$	134,800	$	119,659	$	18,446,336

See accompanying notes to the consolidated financial statements.

Index to Financial Statements

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CAPITAL (continued)

(in thousands, except unit data)


												Accumulated
	Redeemable		General Partner						Limited Partners			Other
	Noncontrolling		Preferred Units			Common Units			Common Units			Comprehensive		Noncontrolling
	Interests		Units	Amount		Units	Amount		Units	Amount		Income (Loss)		Interests		Total Capital
Balance as of December 31, 2020	$	42,011	38,250,000	$	950,940	280,289,726	$	16,631,747	8,046,267	$	609,190	$	134,800	$	119,659	$	18,446,336
Conversion of limited partner common units to general partner common units		—	—		—	2,502,331		206,720	(2,502,331)		(206,720)		—		—		—
Issuance of common units in connection with acquisition		—	—		—	125,395		18,270	—		—		—		—		18,270
Issuance of common stock, net offering costs		—	—		—	1,060,943		172,096	—		—		—		—		172,096
Issuance of common units, net of forfeitures		—	—		—	—		—	387,835		—		—		—		—
Units issued in connection with employee stock purchase plan		—	—		—	82,129		9,895	—		—		—		—		9,895
Shares repurchased and retired to satisfy tax withholding upon vesting		—	—		—	—		(16,734)	—		—		—		—		(16,734)
Amortization of unearned compensation regarding share-based awards		—	—		—	—		88,414	—		—		—		—		88,414
Vesting of restricted common units, net		—	—		—	354,489		—	—		—		—		—		—
Reclassification of vested share-based awards		—	—		—	—		(23,829)	—		23,829		—		—		—
Redemption of series C preferred units		—	(8,050,000)		(219,250)	—		18,000	—		—		—		—		(201,250)
Adjustment to redeemable partnership units		5,830	—		—	—		(5,830)	—		—		—		—		(5,830)
Distributions		(724)	—		(45,761)	—		(1,315,989)	—		(31,067)		—		—		(1,392,817)
Contribution from noncontrolling interests in consolidated entities		(1,052)	—		—	—		—	—		—		—		125,186		125,186
Deconsolidation of consolidated entities		—	—		—	—		—	—		—		—		(197,016)		(197,016)
Net income		930	—		45,761	—		1,663,998	—		37,670		—		(947)		1,746,482
Other comprehensive loss—foreign currency translation adjustments		—	—		—	—		—	—		—		(318,828)		—		(318,828)
Other comprehensive income—fair value of interest rate swaps		—	—		—	—		—	—		—		1,279		—		1,279
Other comprehensive income—reclassification of accumulated other comprehensive loss to interest expense		—	—		—	—		—	—		—		1,304		—		1,304
Balance as of December 31, 2021	$	46,995	30,200,000	$	731,690	284,415,013	$	17,446,758	5,931,771	$	432,902	$	(181,445)	$	46,882	$	18,476,787

See accompanying notes to the consolidated financial statements.

Index to Financial Statements

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Year Ended December 31,
	2021		2020		2019
Cash flows from operating activities:
Net income	$	1,747,412	$	362,730	$	599,221
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on disposition of properties, net		(1,380,795)		(316,894)		(335,148)
Equity in (earnings) loss of unconsolidated entities		(62,283)		57,629		(8,067)
Distributions from unconsolidated entities		66,232		39,878		44,293
Depreciation and amortization		1,486,632		1,366,379		1,163,774
Amortization of share-based compensation		84,083		74,577		34,905
Loss from early extinguishment of debt		18,672		103,215		39,157
Amortization of acquired above-market leases and acquired below-market leases, net		6,074		12,686		17,097
Amortization of deferred financing costs and debt discount / premium		18,694		19,202		15,622
Other items, net		27,341		(4,443)		(26,535)
Changes in assets and liabilities:		—		—		—
Increase in accounts receivable and other assets		(425,983)		(103,327)		(103,162)
Increase in accounts payable and other liabilities		116,149		94,909		72,660
Net cash provided by operating activities		1,702,228		1,706,541		1,513,817
Cash flows from investing activities:
Improvements to investments in real estate		(2,520,772)		(2,064,066)		(1,436,902)
Cash paid for business combinations and assets acquisition, net of cash and restricted cash acquired		(192,015)		(908,567)		(75,704)
Proceeds from (investment in) unconsolidated entities, net		2,665		(144,323)		1,296,699
Proceeds from sale of real estate		1,691,072		564,615		—
Other investing activities, net		(42,671)		(47,006)		(59,085)
Net cash used in investing activities	$	(1,061,721)	$	(2,599,347)		(274,992)
Cash flows from financing activities:
Net (payments on) proceeds from credit facilities		(89,554)		162,111		(1,412,388)
Borrowings on secured / unsecured debt		1,824,389		3,573,120		2,869,240
Repayments on secured / unsecured debt		(990,968)		(2,928,924)		(1,915,301)
Premium paid for early extinguishment of debt		(16,482)		(96,124)		(35,067)
Capital contributions from noncontrolling interests, net		124,134		102,285		63,173
General partner contributions		172,096		1,879,957		535,620
General partner distributions		(201,250)		(500,000)		(365,050)
Payments of dividends and distributions		(1,379,198)		(1,239,318)		(996,766)
Other financing activities, net		(33,797)		(17,418)		(15,482)
Net cash (used in) provided by financing activities		(590,630)		935,689		(1,272,021)
Net increase (decrease) in cash, cash equivalents and restricted cash		49,877		42,883		(33,196)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(22,044)		(16,484)		(4,773)
Cash, cash equivalents and restricted cash at beginning of period		123,652		97,253		135,222
Cash, cash equivalents and restricted cash at end of period	$	151,485	$	123,652	$	97,253

See accompanying notes to the consolidated financial statements.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-

December 31, 2021 and 2020

Organization and Description of Business

Digital Realty Trust, Inc. (the Parent), through its controlling interest in Digital Realty Trust, L.P. (the Operating Partnership or the OP) and the subsidiaries of the OP (collectively, we, our, us or the Company), is a leading global provider of data center (including colocation and interconnection) solutions for customers across a variety of industry verticals ranging from cloud and information technology services, social networking and communications to financial services, manufacturing, energy, healthcare, and consumer products. The OP, a Maryland limited partnership, is the entity through which the Parent, a Maryland corporation, conducts its business of owning, acquiring, developing and operating data centers. The Parent operates as a REIT for federal income tax purposes.

The Parent’s only material asset is its ownership of partnership interests of the OP. As a result, the Parent generally does not conduct business itself, other than acting as the sole general partner of the OP, issuing public securities from time to time and guaranteeing certain unsecured debt of the OP and certain of its subsidiaries and affiliates. The Parent has not issued any debt but guarantees the unsecured debt of the OP and certain of its subsidiaries and affiliates.

The OP holds substantially all the assets of the Company. The OP conducts the operations of the business and has no publicly traded equity. Except for net proceeds from public equity issuances by the Parent, which are generally contributed to the OP in exchange for partnership units, in general, the OP generates the capital required by the Company’s business primarily through the OP’s operations, by the OP’s or its affiliates’ direct or indirect incurrence of indebtedness or through the issuance of partnership units.

Summary of Significant Accounting Policies

Basis of Presentation. The accompanying consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and are presented in our reporting currency, the U.S. dollar. All of the accounts of the Parent, the OP, and the subsidiaries of the OP are included in the accompanying consolidated financial statements. Intercompany transactions with consolidated entities have been eliminated.

Consolidation. We consolidate all entities that are wholly owned as well as all partially-owned entities that we control. In addition, we consolidate any variable interest entities (“VIEs”) for which we are the primary beneficiary. We evaluate whether or not an entity is a VIE (and we are the primary beneficiary) through consideration of substantive terms in the arrangement to identify which enterprise has the power to direct the activities of the entity that most significantly impact the entity’s economic performance and the obligation to absorb losses/receive benefits from the entity.

For entities that do not meet the definition of VIEs, we first consider if we are the general partner or a limited partner (or the equivalent in investments not structured as partnerships). We consolidate entities in which we are the general partner and the limited partners do not have rights that would preclude control. For entities in which we are the general partner, but the limited partners hold substantive participating or kick-out rights that prohibit our ability to control the entity, we apply the equity method of accounting since, as the general partner, we have the ability to exercise significant influence over the operating and financial policies of the entities. For entities in which we are a limited partner, or that are not structured similar to a partnership, we consider factors such as ownership interest, voting control, authority to make decisions and contractual and substantive participating rights of the partners. When factors indicate we have a controlling financial interest in an entity, we consolidate the entity.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Management Estimates and Assumptions. U.S. GAAP requires that we make estimates and assumptions that affect reported amounts of revenue and expenses during the reporting period, reported amounts for assets and liabilities as of the date of the financial statements, and disclosures of contingent assets and liabilities as of the date of the financial statements. Although we believe the estimates and assumptions we made are reasonable and appropriate, as discussed in the applicable sections throughout the consolidated financial statements, different assumptions and estimates could materially impact our reported results. Actual results and outcomes may differ from our assumptions.

Foreign Operations and Foreign Currencies. The functional currency of each of our consolidated subsidiaries and unconsolidated entities operating in other countries is the principal currency in which each entity’s assets, liabilities, income and expenses are denominated, which may be different from the local currency of incorporation or the currency with which the entities conduct their operations. The primary functional currencies impacting our business include the Euro, Japanese yen, British pound sterling, Singapore dollar, and Brazilian real.

For our consolidated subsidiaries whose functional currency is not the U.S. dollar, we translate financial statements into U.S. dollars at the time we consolidate these subsidiaries’ financial statements. Generally, assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Certain balance sheet items, such as equity and capital-related accounts are reflected at historical exchange rates. Income statement accounts are generally translated at the average exchange rates for the reporting periods.

We and certain of our consolidated subsidiaries have intercompany and third-party debt that is not denominated in the functional currency of the entities. When debt is denominated in a currency other than the functional currency of an entity, a gain or loss can result. The associated adjustment is reflected in other (expenses) income, net, in the consolidated income statements, unless it is intercompany debt that is deemed to be long-term in nature or third-party debt that has been designated as a nonderivative net investment hedge – in which case the associated adjustments are reflected as a cumulative translation adjustments as a component of other comprehensive income. In the statement of cash flows, cash flows denominated in foreign currencies are translated using the exchange rates in effect at the time of the respective cash flows or at average exchange rates for the period, depending on the nature of the cash flow items.

Acquisition Accounting. We evaluate whether or not substantially all of the value of acquired assets is concentrated in a single identifiable asset or group of identifiable assets to determine whether a transaction is accounted for as an asset acquisition or a business combination. For asset acquisitions: (1) transaction costs are included in the total costs of the acquisition and are allocated on a pro-rata basis to the carrying value of the assets and liabilities acquired, (2) real estate assets acquired are measured based on their cost or total consideration exchanged with any excess consideration or bargain purchase amount allocated to real estate properties and their associated intangibles such as above and below-market leases, in-place leases, acquired ground leases, and customer relationship value and (3) all other assets and liabilities assumed, including any debt, are recorded at fair value. For business combinations: (1) transaction costs are expensed as incurred, (2) all acquired tangible and identifiable intangible assets are recognized at fair value, (3) the amount of any purchase consideration that exceeds the fair value of the tangible and identifiable intangible assets acquired is recognized as goodwill, and (4) to the extent the purchase consideration is less than the fair value of the tangible and identifiable intangible assets acquired, a gain on bargain purchase is recognized.

When we obtain control of an unconsolidated entity that we previously held as an equity method investment and the acquisition qualifies as a business combination, we remeasure our previously held interest in the unconsolidated entity at its acquisition-date fair value, derecognize the book value associated with that interest, and recognize any resulting gain or loss in earnings.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

We allocate purchase price primarily using Level 2 and Level 3 inputs (further defined in Fair Value Measurements) as follows:

Real Estate. The fair value of acquired land is determined based on relevant market data, such as comparable land sales. The fair value of acquired improvements is determined based on replacement cost as adjusted for any physical and/or market obsolescence. Operating properties are valued as if they are vacant (“as-if-vacant”) by applying an income approach methodology using either a discounted cash flow analysis or by applying a capitalization rate to the estimated Net Operating Income (“NOI”) of a property. As-if-vacant values consider estimated carrying costs during expected lease-up periods and costs to execute similar leases (based on current market conditions). Carrying costs during expected lease up periods include real estate taxes, insurance and other operating expenses as well as estimates of lost rental revenue during the expected lease-up periods. Costs to execute similar leases include lease commissions, tenant improvements, legal and other related costs.

Lease Intangibles. The portion of the purchase price related to acquired in-place leases is recorded as intangible assets and liabilities as follows:

	●	Above and below market leases: We use a discounted cash flow approach to determine the estimated present value of any difference between contractual rents for acquired in-place leases as compared to current market rents. If rents on acquired in-place leases are higher than current market rents, we record an intangible asset for the favorable rents. If rents on acquired in-place leases are lower than current market rents, we record a liability for the unfavorable rents. Favorable rent assets are amortized as a reduction to rental income over the remaining non-cancelable term of the lease. Unfavorable rent liabilities are amortized as an increase to rental income over the initial lease term plus any below-market fixed rate renewal periods.

	●	In-place lease value: Since the as-if-vacant model is used to determine the value of acquired operating properties, the value of such properties does not include the value associated with having existing tenants who are leasing space in the purchased properties. Having in-place tenants allows buyers to avoid costs associated with leasing the property as well as any rent losses and unreimbursed operating expenses during the lease-up period. An asset for such benefits is recorded separately as in-place lease value. In-place lease value is determined based on estimated carrying costs during hypothetical expected lease-up periods as well as costs to execute similar leases. We determine expected carrying costs and costs to execute similar leases in the same manner as described in the previous discussion of the valuation of operating properties using the as-if-vacant model. The value of in-place leases is amortized to expense over the remaining initial terms of the respective leases.

	●	Customer relationship value: In some transactions, customers acquired are expected to generate recurring revenues beyond existing in-place lease terms. We utilize the multi-period excess earnings method to determine value customer relationship value, if any. Key factors reflected in this approach include: (1) projected revenue growth from existing customers, (2) historical customer lease renewals and attrition rates, (3) rental renewal probabilities and related market terms, (4) estimated operating costs, and (5) discount rate. Customer relationship value is amortized to expense ratably over the anticipated life of substantially all of the acquired customer relationships that are expected to generate excess earnings.

Debt. We recognize the fair value of any acquired debt based on contractual future cash flows discounted using borrowing spreads and market interest rates that would be available to us for issuance of debt with similar terms and remaining maturities. If acquired debt is publicly-traded, we utilize available market data to determine fair value of the

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

debt. Any discount or premium on the principal is included in the carrying value of the debt and amortized to interest expense over the remaining term of the debt using the effective interest method.

Noncontrolling interests. The fair value of the ownership percentage of acquired entities held by third parties is determined based on the fair value of the consolidated net assets acquired – adjusted for any put or call options or other such features associated of the noncontrolling interests.

Other acquired assets and liabilities. The fair value of other acquired assets and liabilities is determined using the best information available. For working capital items that are short-term in nature, fair value is generally presumed to equal the seller’s carrying value, unless facts and circumstances suggest otherwise.

Fair Value Measurements. Fair value is intended to reflect the price that would be received for the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants at the measurement date (the exit price). We estimate fair value using available market information and valuation methods we believe to be appropriate for these purposes. Given the significant amount of judgement and subjectivity involved in the determination of fair value, estimated fair value is not necessarily indicative of amounts that would be realized on disposition. There are three levels in the fair value hierarchy under US GAAP, which are:

	●	Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that an entity can access at the measurement date.

	●	Level 2 – Inputs that are directly or indirectly observable for the associated asset or liability, but which do not qualify as Level 1 inputs.

	●	Level 3 – Unobservable inputs for the asset or liability.

In instances where inputs from multiple different levels of the fair value hierarchy are used to determine fair value, the lowest level input that is significant is used to determine the fair-value measurement in its entirety. Our assessment of the significance of a particular input to a fair-value measurement requires judgment and considers factors specific to the asset or liability. We utilize fair value measurements on a recurring basis to determine the fair value of: marketable equity securities, share-based compensation awards, derivative instruments, and outstanding debt. Such measurements are also regularly utilized in assessing whether or not impairments may exist on intangible assets (including goodwill). In addition, we utilize fair value measurements on a non-recurring basis to determine the fair value associated with assets held for sale, acquisitions of assets, and acquisitions of businesses.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Investments in Unconsolidated Entities. Investments in unconsolidated entities as reflected on the consolidated balance sheets includes all investments accounted for using the equity method. We use the equity method to account for these investments, because we have the ability to exercise significant influence over their operating and financial policies, but do not control them. Equity method investments are initially recognized at our cost. Transaction costs related to the formation of equity method investments are also capitalized. We subsequently adjust these balances to reflect: (1) our proportionate share of net earnings/losses of the entities and accumulated other comprehensive income or loss, (2) distributions received, (3) contributions made, (4) sales and redemptions of our investments, and (5) certain other adjustments, as appropriate. When circumstances indicate there may have been a reduction in the value of an equity method investment, we evaluate whether or not the loss in value is other than temporary. If we determine that a loss in value is other than temporary, we recognize an impairment charge to reflect the equity investment at fair value.

With regard to the cash flow classifications of distributions from unconsolidated entities, we have elected the nature of the distribution approach as the information is available to us to determine the nature of the underlying activity that generated the distributions. In accordance with this approach, cash flows generated from the operations of an unconsolidated entity are classified as a return on investment (cash inflow from operating activities) and cash flows that are generated from property sales, debt refinancing or sales and redemptions of our investments are classified as a return of investment (cash inflow from investing activities).

The Company has a negligible value of investments accounted for under the cost-method. These investments are included in Other Assets on the consolidated balance sheets.

Cash, Cash Equivalents and Restricted Cash. We consider all cash on hand, demand deposits with financial institutions, and short-term highly-liquid investments with original maturities of 90 days or less to be cash and cash equivalents. Our cash and cash equivalents are financial instruments exposed to concentrations of credit risk. We invest our cash with high-credit quality institutions. We may invest our cash balances in money market accounts that are not insured. We do not believe we are exposed to any significant credit risk associated with our cash and cash equivalents, and have not realized any losses associated with cash investments or accounts.

Restricted Cash**.** Cash that is held for a specific purpose and thus not available to us for immediate or general business use is categorized separately from cash and cash equivalents and is included in other assets on the consolidated balance sheet. Restricted cash primarily consists of contractual capital expenditures and other deposits.

Assets Held for Sale. We classify an asset as held for sale when the following criteria are met: 1). management that has the proper authority has approved and committed to a plan to sell, 2). the asset is available for immediate sale, 3). an active program to locate a buyer has commenced, 4). the sale of the asset is probable, and 5). transfer of the asset is expected to occur within one year. Assets classified as held for sale are recorded at the lower of carrying value or fair value less costs to sell and are no longer depreciated.

Investments in Real Estate. Investments in real estate are stated at cost, less accumulated depreciation and amortization. Land is not depreciated. Depreciation and amortization is recorded on a straight-line basis over the estimated useful lives of the respective assts. Depreciable lives of assets are stated below.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Investments in Real Estate. Investments in real estate are stated at cost, less accumulated depreciation and amortization. Land is not depreciated. Depreciation and amortization is recorded on a straight-line basis over the estimated useful lives of the respective assets. Depreciable lives of assets are stated below.
Acquired ground leases		Terms of the related lease
Buildings and improvements		5-39 years
Machinery and equipment		7-15 years
Furniture and fixtures		3-5 years
Leasehold improvements		Shorter of the estimated useful lives or the terms of the related leases
Tenant improvements		Shorter of the estimated useful lives or the terms of the related leases

Improvements and replacements are capitalized when they extend the useful life, increase capacity, or improve the efficiency of the asset. Repairs and maintenance are charged to expense as incurred.

Capitalization of Costs.

Development Costs - During the land development and construction periods of qualifying projects, we capitalize direct and indirect project costs that are clearly associated with the development of properties. Capitalized project costs include all costs associated with the development of a property. Such costs include the cost of: land and buildings, improvements and fixed equipment, design and engineering, other construction costs, interest, property taxes, insurance, legal fees, personnel working on the project, and corporate supervision. Capitalization of costs ceases when development projects are substantially complete and ready for their intended use. We generally consider development projects to be substantially complete and ready for intended use upon receipt of a certificate of occupancy.

Leasing commissions - Leasing commissions and other direct and indirect costs associated with the acquisition of tenants are capitalized and amortized on a straight-line basis over the terms of the related leases. During the years ended December 31, 2021, 2020 and 2019, we capitalized deferred leasing costs of approximately $42.8 million, $40.8 million and $30.8 million, respectively. Deferred leasing costs are included in customer relationship value, deferred leasing costs and intangibles on the consolidated balance sheet and amounted to approximately $249.3 million and $272.3 million, net of accumulated amortization of $453.0 million and $401.4 million, as of December 31, 2021 and 2020, respectively. Amortization expense on leasing costs was approximately $83.4 million, $76.0 million, and $75.3 million for the years

ended December 31, 2021, 2020 and 2019, respectively.

Recoverability of Real Estate Assets. We assess the carrying value of our properties whenever events or circumstances indicate carrying amounts of these assets may not be fully recoverable (“triggering events"). Triggering events typically relate to a change in the expected holding period of a property, an adverse change in expected future cash flows of the property, or a trend of past cash flow losses that is expected to continue in the future. If our assessment of triggering events indicates the carrying value of a property or asset group might not be recoverable, we estimate the future undiscounted net cash flows expected to be generated by the assets and compare that amount to the book value of the assets. If our future undiscounted net cash flow evaluation indicates we are unable to recover the carrying value of a property or asset group, we record an impairment loss to the extent the carrying value of the property or asset group exceeds fair value.

We generally estimate fair value of rental properties using a discounted cash flow analysis that includes projections of future revenues, expenses, and capital improvements that a market participant would use. In certain cases, we may supplement this analysis by obtaining outside broker opinions of value. When determining undiscounted future cash flows, we consider factors such as future operating income trends and prospects as well as the effects of leasing demand, competition and other factors.

Goodwill and Other Acquired Intangible Assets. Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination. Goodwill is not amortized. Goodwill is

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

evaluated for impairment at the reporting unit level. The Company has one reportable segment and one reporting unit. We evaluate goodwill for impairment whenever events or changes in circumstances occur that would more likely than not reduce the fair value of the reporting unit below its carrying value. In addition to monitoring for impactful events and circumstances, we perform an annual one-step quantitative test in which we compare the reporting unit’s carrying value to its fair value. We determine the fair value of the reporting unit based on quoted market prices of the Company’s publicly-traded shares. To the extent the fair value of the reporting unit is less than its carrying value, we would record an impairment charge equal to the amount by which the carrying value of the reporting unit exceeds its fair value. We have not recognized any goodwill impairments since our inception. Since a significant aspect of our goodwill is denominated in foreign currencies, changes to our goodwill balance can occur over time due to changes in foreign currency exchange rates.

Other acquired intangible assets consist primarily of customer relationship value and in-place lease value. All of our other acquired intangible assets have finite useful lives. If impairment indicators arise with respect to these finite-lived intangible assets, we evaluate for impairment by comparing the carrying amount of the assets to the estimated future undiscounted net cash flows expected to be generated by the assets. If estimated future undiscounted cash flows exceed the carrying value of the assets, we record an impairment charge equal to the amount by which the carrying value exceeds the estimated fair value of the assets. We have no indefinite-lived intangible assets other than goodwill.

Share-Based Compensation. The Company provides a variety of share-based compensation awards to employees and directors, including awards that contain: time-based vesting criteria and a combination of time-based and market-performance based criteria. The Company measures all share-based compensation awards at grant date fair value. The fair value of awards that include only a time-based service condition (“time-based awards”) is the closing price of the Company’s publicly-traded shares at the grant date – and is expensed over the requisite service period. The fair value of awards that include a combination of market performance based criteria and time-based vesting is measured using a Monte Carlo simulation method. The fair value of these awards is expensed over the requisite service period – and is not adjusted based on actual achievement of the market performance condition.

Derivative Instruments. As part of the Company’s risk management program, a variety of financial instruments, such as interest rate swaps and foreign exchange contracts, may be used to mitigate interest rate and foreign currency exposures. The Company utilizes derivative instruments to manage risks, and not for trading or speculative purposes. All derivatives are recorded at fair value. The majority of inputs used to value our derivatives fall within Level 2 of the fair value hierarchy. However, credit valuation adjustments utilize Level 3 inputs (such as estimates of current credit spreads). Based on the insignificance of credit valuation adjustments to the overall valuation of our derivatives, we have determined that valuation of our outstanding derivatives is properly categorized in Level 2 of the fair value hierarchy.

Changes in the fair value of derivatives are recognized periodically either in earnings or in other comprehensive income (loss), depending on whether the derivative financial instrument is undesignated or qualifies for hedge accounting, and if so, whether it represents a fair value, cash flow, or net investment hedge. Gains and losses on derivatives designated as cash flow hedges, to the extent they are included in the assessment of effectiveness, are recorded in other comprehensive income (loss) and subsequently reclassified to earnings to offset the impact of the hedged items when they occur. In the event it becomes probable the forecasted transaction to which a cash flow hedge relates will not occur, the derivative would be terminated and the amount in other comprehensive income (loss) would be recognized in earnings.

Gains and losses representing components excluded from the assessment of effectiveness for cash flow and fair value hedges are recognized in earnings on a straight-line basis in the same caption as the hedged item over the term of the hedge. Gains and losses representing components excluded from the assessment of effectiveness for net investment hedges are recognized in earnings on a straight-line basis over the term of the hedge.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Interest rate swaps – The Company uses interest rate swaps to add stability to interest expense and to manage our exposure to interest rate movements related to certain floating rate debt obligations. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. We record all interest rate swaps on the balance sheet at fair value. The fair value of interest rate swaps is determined using the market standard methodology of netting discounted future fixed cash receipts (or payments) and discounted expected variable cash payments (or receipts). Variable cash payments (or receipts) are based on expected future interest rates derived from observable market interest rate curves. We incorporate credit valuation adjustments to appropriately reflect nonperformance risk for the Company and for the respective counterparties. The counterparties of interest rate swaps are generally larger financial institutions engaged in providing a variety of financial services.

Interest rate derivatives are presented on a gross basis on the consolidated balance sheets – with interest rate swap assets presented in other assets, and interest rate swap liabilities presented in accounts payable and other accrued liabilities. As of December 31, 2021, there was no impact from netting arrangements, because the Company had no derivatives in liability positions. Net interest paid or received on interest rate swaps is recognized as interest expense. Gains and losses resulting from the early termination of interest rate swap agreements are deferred and amortized as adjustments to interest expense over the remaining period of the debt originally covered by the terminated swap.

Foreign currency contracts – The Company may, from time to time, enter into forward contracts pursuant to which we agree to sell an amount of one currency in exchange for an agreed-upon amount of another currency. These agreements are typically entered into to manage exposures related to transactions that are settled in currencies other than the functional currency of the legal entity that is party to the transactions. To the extent the Company does not designate such instruments as hedges, changes in the fair value of these instruments are reflected in earnings. The Company had no outstanding derivative foreign currency contracts as of December 31, 2021.

Hedge of Net Investment in Foreign Operations – The Company has no outstanding derivatives that function as hedges of net investments in foreign operations. However, notes denominated in the Swiss franc with a total outstanding principle balance of 545 million Swiss francs (“CHF”) issued by Digital Intrepid Holding B.V. (“DIH”, a wholly-owned subsidiary of the OP with Euro functional currency) are designated as non-derivative hedges of DIH’s net investment in certain of its subsidiaries that have CHF as the functional currency. Changes in the fair value of these hedges, to the extent they are included in the assessment of effectiveness, are reported in other comprehensive income (loss) and will be deferred until disposal of the underlying assets (which is currently not expected to occur). Any amounts excluded from the assessment of effectiveness are reflected as foreign-currency transaction gains/losses which are included as Other (expense) income, net in the consolidated income statements.

See Note 17. “Derivative Instruments” for further discussion on the Company’s outstanding derivative instruments.

Income Taxes. Digital Realty Trust, Inc. has elected to be treated as a real estate investment trust (a “REIT”) for federal income tax purposes. As a REIT, Digital Realty Trust, Inc. generally is not required to pay U.S. federal corporate income tax to the extent taxable income is currently distributed to its stockholders. If Digital Realty Trust, Inc. were to fail to qualify as a REIT in any taxable year, it would be subject to U.S. federal and state income taxes (including any applicable alternative minimum tax for taxable years prior to 2018) on its taxable income.

The Company is subject to foreign, state and local income taxes in the jurisdictions in which it conducts business. The Company’s taxable REIT subsidiaries are subject to federal, state, local and foreign income taxes to the extent there is

Index to Financial Statements

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

taxable income. Accordingly, the Company recognizes current and deferred income taxes for the Company and its taxable REIT subsidiaries, including for U.S. federal, state, local and foreign jurisdictions, as applicable.

We assess our significant tax positions in accordance with U.S. GAAP for all open tax years and determine whether we have any material unrecognized liabilities from uncertain tax benefits. If a tax position is not considered “more-likely-than-not” to be sustained solely on its technical merits, no benefits of the tax position are to be recognized (for financial statement purposes). As of December 31, 2021 and 2020, we have no assets or liabilities for uncertain tax positions. We classify interest and penalties from significant uncertain tax positions as interest expense and operating expense, respectively, in our consolidated income statements. For the years ended December 31, 2021, 2020 and 2019, we had no such interest or penalties. The tax year 2017 and thereafter remain open to examination by the major taxing jurisdictions with which the Company files tax returns.

See Note 13. “Income Taxes” for further discussion on income taxes.

Transactional-based Taxes. We account for transactional-based taxes, such as value added tax, or VAT, for our international properties on a net basis.

Noncontrolling Interests and Redeemable Noncontrolling Interests. Noncontrolling interests represent the share of consolidated entities owned by third parties. We recognize each noncontrolling holder’s share of the fair value of the respective entity’s net assets as noncontrolling interest on our consolidated balance sheets at the date of formation or acquisition. Noncontrolling interest balances are adjusted for the noncontrolling holder’s share of additional contributions, distributions, and net earnings or losses.

Partnership units which are contingently redeemable for cash are classified as redeemable noncontrolling interests and presented in the mezzanine section of the Company’s consolidated balance sheets between total liabilities and stockholder’s equity. Redeemable noncontrolling interests include amounts related to partnership units issued by consolidated subsidiaries of the Company in which redemption for equity is outside the control of the Company.

The amounts of consolidated net income attributable to noncontrolling interests and redeemable noncontrolling interests are presented on the Company’s consolidated income statements as income (or loss) attributable to noncontrolling interests.

Revenue Recognition.

Rental and other services revenue – We generate the majority of our revenue by leasing our properties to customers under operating lease agreements, which are accounted for under Accounting Standards Codification 842, Leases (“ASC 842”). We recognize the total minimum lease payments provided for under the leases on a straight-line basis over the lease term if we determine it is probable that substantially all of the lease payments will be collected over the lease term. We commence recognition of revenue from rentals at the date the property is ready for its intended use by the tenant and the tenant takes possession, or controls the physical use of the leased asset. The excess of rents recognized as revenue over amounts contractually due pursuant to the underlying leases is included in deferred rent. Rental payments received in excess of revenue recognized are classified as accounts payable and other accrued liabilities. Unpaid rents that are contractually due are included in accounts and other receivables.

We estimate the probability of collection of lease payments based on customer creditworthiness, outstanding accounts receivable balances, and historical bad debts – as well as current economic trends. If collection of substantially all lease payments over the lease term is not probable, rental revenue is recognized when payment is received, and we record a

Index to Financial Statements

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

full valuation allowance on the balance of any rent receivable, less the balance of any security deposits or letters of credit. If collection is subsequently determined to be probable, we: 1). resume recognizing rental revenue on a straight-line basis, 2). record incremental revenue such that the cumulative amount recognized is equal to the amount that would have been recorded on a straight-line basis since inception of the lease, and 3). reverse the allowance for bad debt recorded on outstanding receivables.

Generally, under the terms of our leases, the majority of our rental expenses, including common area maintenance, real estate taxes and insurance, are recovered from our customers. We record amounts reimbursable by customers (“tenant recoveries”) as revenue in the period the applicable expenses are incurred – which is generally on a ratable basis through the term of the lease. Tenant recoveries are recognized as revenue, because we are the primary obligor with respect to purchasing and selecting goods and services from third-party vendors and bear the associated credit risk.

We account for and present rental revenue and tenant recoveries as a single component under rental and other services as the timing of recognition is the same, the pattern with which we transfer the right of use of the property and related services to the lessee are both on a straight-line basis and our leases qualify as operating leases.

Interconnection services include port and cross-connect services generally provided on a month-to-month, one-year or multi-year term. We bill for these services on a monthly basis and recognizes the revenue over the period the service is provided. Revenue for cross-connect installations is generally recognized in the period the cross-connect is installed. Interconnection services that are not specific to a particular leased space are accounted for under Topic 606 and have terms that are generally one year or less.

Fee income and other – Fee income arises primarily from contractual management agreements with entities in which we have a noncontrolling interest. Management fees are recognized as earned under the respective agreements. The Company also provides property and construction management services. Depending on the nature of the agreements, revenue for these services is recognized either on a ratable monthly basis as the service is provided, or when certain performance milestones are met. Service revenues are typically recognized on an equal monthly basis based on the minimum fee to be earned. The monthly amounts could be adjusted depending on whether certain performance milestones are met.

We utilize the practical expedient in ASC 842 that allows us to account for lease and non-lease components associated with each lease as a single lease component recorded within rental and other services, instead of accounting for such items separately under Accounting Standards Codification 606, Revenue (“ASC 606”). We recognize revenue for items that do not qualify for revenue recognition under ASC 842 under ASC 606. Revenue recognized as a result of applying ASC 606 was approximately 6% of total operating revenue for the years ended December 31, 2021, 2020 and 2019.

Transaction and Integration Expense. Transaction expenses include closing costs, broker commissions and other

professional fees, including legal and accounting fees related to business combinations or acquisitions that were not

consummated. Integration costs include transition costs associated with organizational restructuring (such as severance

and retention payments and recruiting expenses), third-party consulting expenses directly related to the integration of

acquired companies (in areas such as cost savings and synergy realization, technology and systems work), and internal

costs such as training, travel and labor, reflecting time spent by Company personnel on integration activities and

projects. Recurring costs are recorded in general and administrative expense.

Gains on Disposition of Properties. We recognize gains on the disposition of real estate when the recognition criteria

have been met, generally at the time the risks and rewards and title have transferred, and we no longer have substantial

continuing involvement with the real estate sold. We recognize losses from the disposition of real estate when known.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

New Accounting Pronouncements.

Income Taxes. In December 2019, the Financial Accounting Standards Board (“FASB”) issued updated guidance that is intended to simplify the accounting for income taxes by removing several exceptions contained in existing guidance and amending other guidance to simplify several other income tax accounting matters. The Company adopted the updated guidance for the quarter ended March 31, 2021. The adoption of this guidance had no impact on the Company’s results of operations, financial position or liquidity.

Reference Rate Reform. The Financial Conduct Authority and other independent groups announced in July 2017, that beginning in 2021, they would stop requiring banks to submit rates for the calculation of the London Inter-bank Offered Rate (“LIBOR”). As a result, in the U.S. the Federal Reserve Board and the Federal Reserve Bank of New York identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative rate for USD LIBOR in debt and derivative financial instruments. Other global regulators have also undertaken reference rate reform initiatives to identify a preferred alternative rate for other interbank offered rates (“IBORs”). Both LIBOR and IBOR are herein referred to as “IBOR-indexed rate”. In November 2020, the Federal Reserve Board along with various independent groups announced the potential for certain USD LIBOR tenors to continue to be published until June 2023. This change would allow most legacy USD LIBOR contracts to mature before disruptions occur in the USD LIBOR market, without the need to transition these contracts to SOFR.

In March 2020, the FASB issued an Accounting Standard Update (“ASU”) that provided practical expedients to address existing guidance on contract modifications and hedge accounting due to the expected market transition from an IBOR-indexed rate to alternative reference rates, such as SOFR for LIBOR (“reference rate reform”).

The first practical expedient within the ASU allows companies to elect to not apply certain modification accounting requirements to debt, derivative, and lease contracts affected by reference rate reform if certain criteria are met. The second practical expedient allows companies to change the reference rate and other critical terms related to the reference rate reform in derivative hedge documentation without having to designate the hedging relationship – allowing companies to continue applying hedge accounting to existing cash flow and net investment hedges.

The ASU was effective on a prospective basis beginning January 1, 2020 and may be elected over time as reference rate reform activities occur. We have not modified any contracts to date, but will continue to evaluate debt, derivative, and lease contracts that are modified in the future to ensure they are eligible for modification relief and apply the available practical expedients as needed.

Business Combinations. In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers," which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, "Revenue from Contracts with Customers," as if the acquirer had originated the contracts. ASU 2021-08 is applicable on a prospective basis and is effective for fiscal years and interim reporting periods within those years beginning after December 15, 2022 (or in January 1, 2023 for the Company). Early adoption is permitted. The Company is currently evaluating the effect, if any, the adoption of this guidance will have on the Company’s results of operations, financial position and liquidity.

We determined that all other recently issued accounting pronouncements that have yet to be adopted by the Company will not have a material impact on our consolidated financial statements or do not apply to our operations.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Business Combinations

The acquisition of Interxion in 2020 is the only material business combination that was completed by the Company in any of the periods presented in the consolidated financial statements.

Interxion Combination in 2020

We acquired Interxion on March 9, 2020, completing the transaction on March 12, 2020 for total equity consideration of approximately $7.0 billion, including approximately $108.5 million of assumed cash and cash equivalents. The following table summarizes the acquired assets and liabilities recorded at their fair values as of the acquisition date (in thousands):


	Final
	Amounts
Land	$	190,970
Building and improvements		3,166,988
Construction in progress and space held for development		397,825
Operating lease right-of-use assets		553,987
Goodwill		4,338,711
Customer relationship value and other intangibles		1,052,811
Debt assumed		(1,662,276)
Finance lease obligations		(47,797)
Operating lease liabilities		(553,987)
Deferred tax liability, net		(535,990)
Working capital liabilities, net		(24,738)
Total purchase consideration		6,876,504
Assumed cash and cash equivalents		108,548
Total equity consideration	$	6,985,052

Goodwill recorded as part of this transaction is not expected to be deductible for local tax purposes. This transaction enabled the Company to strengthen its ability to provide solutions on a global basis using a diversified product offering of data center solutions for small and large footprint deployments as well as interconnection services. We believe this strategic benefit of the acquisition supports the balance of goodwill recorded.

Unaudited pro forma financial information based on our historical consolidated income statements adjusted to give effect to the Interxion Combination as if it occurred on January 1, 2019, is shown below. Pro forma adjustments primarily relate to merger expenses, depreciation expense on acquired buildings and improvements, amortization of acquired intangibles, and estimated interest expense related to financing transactions, the proceeds of which were used to fund the repayment of Interxion debt in connection with the Interxion Combination. Pro forma net income available to common stockholders/unitholders was adjusted to exclude $65.7 million of merger-related costs incurred by the Company during the year ended December 31, 2020 and to include these charges for the year ended December 31, 2019.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020


	Pro forma (unaudited, in thousands)
	Year Ended December 31,
Digital Realty Trust, Inc.	2020		2019
Total revenue	$	4,051,608	$	3,758,054
Net (loss) income available to common stockholders	$	323,889	$	267,600

Digital Realty Trust, L.P.
Total revenue	$	4,051,608	$	3,758,054
Net income available to common unitholders	$	333,389	$	288,700

Revenues of approximately $691.4 million and net income of approximately $59.4 million associated with the Interxion Combination are included in the consolidated income statement for the year ended December 31, 2020.

4. Leases

Lessor Accounting

We generate the majority of our revenue by leasing our operating properties to customers under operating lease agreements. The manner in which we recognize these transactions in our financial statements is described in the Revenue Recognition section of Footnote 1 to these consolidated financial statements.

A summary of minimum lease payments due from our customers under operating leases of land, prestabilized development properties, and operating properties with lease periods of greater than one year at December 31, 2021 (in thousands) is shown below. These amounts do not reflect future rental revenues from renewal or replacement of existing leases unless we are reasonably certain we will exercise the option or the lessee has the sole ability to exercise the option. Reimbursements of operating expenses and variable rent increases are excluded from the table below.


	Operating leases
2022	$	2,483,938
2023		1,859,306
2024		1,529,889
2025		1,218,396
2026		933,773
Thereafter		3,044,931
Total	$	11,070,233

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Lessee Accounting

We lease space and equipment at certain of our data centers from third parties under noncancelable lease agreements. Leases for our data centers expire on various dates through 2069. Certain of our data centers, primarily in Europe and Singapore, are subject to ground leases. As of December 31, 2021, the termination dates of these ground leases ranged from 2049 to 2108. In addition, our corporate headquarters along with several regional office locations are subject to leases with termination dates ranging from 2022 to 2028. The leases generally require us to make fixed rental payments that increase at defined intervals during the term of the lease plus pay our share of common area, real estate and utility expenses as incurred. The leases do not contain residual value guarantees and do not impose material restrictions or covenants on us. Further, the leases have been classified and accounted for as either operating or finance leases. Rent expense related to operating leases included in rental property operating and maintenance expense in the consolidated income statements amounted to approximately $143.8 million, $118.8 million and $83.8 million for the years ended December 31, 2021, 2020 and 2019, respectively.

As of December 31, 2021, the weighted average remaining lease term for our operating leases and finance leases was 13 years and 23 years, respectively. We do not include renewal options in the lease term for calculating the lease liability unless we are reasonably certain we will exercise the option or the lessor has the sole ability to exercise the option. The weighted average incremental borrowing rate was 2.7% for operating leases and 3.0% for finance leases at December 31, 2021. We assigned a collateralized interest rate to each lease based on the term of the lease and the currency in which the lease is denominated.

Maturities of lease liabilities as of December 31, 2021 were as follows (in thousands):


	Operating		Finance
	lease liabilities		lease liabilities
2022	$	158,331	$	12,608
2023		163,586		31,424
2024		165,467		11,648
2025		166,015		11,699
2026		161,199		11,750
Thereafter		963,874		225,541
Total undiscounted future cash flows		1,778,472		304,670
Less: Imputed interest		(266,285)		(86,080)
Present value of undiscounted future cash flows	$	1,512,187	$	218,590

5. Receivables

Refer to Note 2 “Summary of Significant Accounting Policies—Revenue Recognition” for discussion of our accounting policies related to accounts receivable, deferred rent and related allowances.

Accounts and Other Receivables, Net

Accounts and other receivables, net is primarily comprised of contractual rents and other lease-related obligations currently due from customers. These amounts are shown in the subsequent table as Accounts receivable – trade. Other receivables shown separately from Accounts receivable – trade, consist primarily of amounts that have not yet been billed to customers, such as for utility reimbursements and installation fees.

Index to Financial Statements

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DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020


	As of December 31,
(Amounts in thousands):	2021		2020
Accounts receivable – trade, net	$	399,029	$	355,727
Allowance for doubtful accounts		(28,574)		(18,825)
Accounts receivable, net		370,455		336,902

Accounts receivable – customer recoveries		131,538		93,224
Value-added tax receivables		104,036		88,633
Accounts receivable – installation fees		43,626		64,068
Other receivables		22,066		20,284
Accounts and other receivables, net	$	671,721	$	603,111

Deferred Rent

Deferred rent represents rental income that has been recognized as revenue under ASC 842, but which is not yet due from customers under their existing rental agreements. The Company recognizes an allowance against deferred rent receivables to the extent it becomes no longer probable that a customer or group of customers will be able to make substantially all of their required cash rental payments over the entirety of their respective lease terms.


	Balance as of		Balance as of
(Amounts in thousands):	December 31, 2021		December 31, 2020
Deferred rent receivables	$	556,251	$	538,040
Allowance for deferred rent receivables		(8,866)		(9,860)
Deferred rent receivables, net	$	547,385	$	528,180

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Investments in Properties

A summary of our investments in properties is below (in thousands):


Property Type	As of December 31, 2021		As of December 31, 2020
Land	$	1,019,723	$	1,106,392
Acquired ground lease		6,721		10,308
Buildings and improvements		21,914,091		21,335,396
Tenant improvements		684,915		690,892
		23,625,450		23,142,988
Accumulated depreciation and amortization		(6,210,281)		(5,555,221)
Investments in operating properties, net		17,415,169		17,587,767
Construction in progress and space held for development		3,213,389		2,768,325
Land held for future development		133,683		226,862
Investments in properties, net	$	20,762,241	$	20,582,954

Acquisitions and Dispositions of Properties

Acquisitions of Properties

For the years ended December 31, 2021, 2020 and 2019, acquisitions of properties that did not qualify as business combinations were immaterial to our financial statements – both individually and in the aggregate.

Disposition of Properties to Digital Core REIT

On December 6, 2021, we completed the listing of Digital Core REIT as a standalone real estate investment trust publicly traded on the Singapore Exchange (“SGX”) under the ticker symbol: DCRU. Hereafter, Digital Core REIT and its associated subsidiaries are collectively referred to as the Singapore REIT (“SREIT”). In connection with the listing, the Company contributed a portfolio of 10 operating data center properties to the SREIT. The fair value of these properties was determined to be approximately $1.4 billion based on two separate third party appraisal reports . In exchange for the contribution of these properties, the Company received: 1). $919 million cash and 2). a 39.4% equity interest in the publicly-traded Digital Core REIT entity, while retaining a 10% direct interest in the operating properties that were contributed by the Company to the SREIT. In addition, the Company received approximately $13 million of acquisition fees paid to the Company by Digital Core REIT in the form of additional units in Digital Core REIT.

The Company determined the fair market value of its 10% retained investment in the properties contributed to the SREIT based on its retained ownership percentage applied to the appraised value of the properties. This approach was deemed appropriate because the Company determined that a discount for lack of marketability and/or lack of control associated with its 10% direct interest in the properties was not warranted.

As a result of this transaction, the Company recognized a gain on sale of assets of approximately $1.0 billion – which is summarized below (in millions).


Cash received	$	919.1
Fair market value of retained investment in SREIT		521.4
Acquisition fees paid in Digital Core REIT units		13.0

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Tax on acquisition fees			(3.0)
Net book value of assets contributed			(439.3)
Gain on disposition of properties		$	1,011.2

The Company provides property management and other services to the SREIT in exchange for contractual fees that are payable to the Company in cash or in additional units of the SREIT. The Company’s retained investment in the SREIT is accounted for as an equity method investment, based on the conclusion that the Company has significant influence over (but does not control) the SREIT.

The assets and liabilities sold to the SREIT were not representative of a significant component of our portfolio, nor did the sale represent a significant shift in our strategy.

Disposition of Other Properties

The Company sold the following other real estate properties during the years ended December 31, 2021, 2020 and 2019:


			Gross Proceeds / Fair Value		Gain on Sale / contribution
Location / Portfolio	Metro Area	Date Sold	(in millions)		(in millions)
European Portfolio	Various	Mar 16, 2021	$	680.0	$	332.0
Other	Various	2021		109.6		37.7
Naritaweg 52	Amsterdam	Dec 30, 2020		6.1		—
Liverpoolweg 10	Amsterdam	Jul 17, 2020		21.5		10.4
Mapletree portfolio	Various	Jan 14, 2020	$	557.0	$	306.5
Mapletree portfolio	Northern Virginia	Nov 1, 2019	$	996.6	$	266.0

European Portfolio - On March 16, 2021, we sold a portfolio of 11 data centers in Europe (four in the United Kingdom, three in the Netherlands, three in France and one in Switzerland) to Ascendas Reit, a CapitaLand sponsored REIT, for total consideration of approximately $680.0 million (subject to customary final adjustments for working capital and other items). The total gain recorded during the three months ended March 31, 2021 as a result of this sale was approximately $332.0 million. We are providing transitional property management services for one year from the closing date at a customary market rate. The assets and liabilities sold were not representative of a significant component of our portfolio, nor did the sale represent a significant shift in our strategy.

Mapletree portfolio - In January 2020, we closed on the sale of 10 Powered Base Building® properties, which comprise 12 data centers, in North America to Mapletree Investments Pte Ltd (“Mapletree Investments”) and Mapletree Industrial Trust (“MIT” and together with Mapletree Investments, “Mapletree”), at a purchase consideration of approximately $557.0 million, which resulted in a gain of approximately $306.5 million. The 12 data centers were not representative of a significant component of our portfolio, nor did the sale represent a significant shift in our strategy. We provided transitional property management services for one year from the closing date at a customary market rate. Prior to sale of the 10 Powered Base Building properties in January 2020, we contributed three data centers to the joint venture with Mapletree in November 2019 – total gain on contribution of these assets was $266.0 million.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

8. Investments in Unconsolidated Entities

As of December 31, 2021 and 2020, our investments in unconsolidated entities accounted for under the equity method presented in our consolidated balance sheets consist of the following (in thousands):


	Year	Metropolitan			Balance as of		Balance as of
Entity	Entity Formed	Area of Properties	% Ownership			December 31, 2021		December 31, 2020
Digital Core REIT	2021	U.S. / Canada	35	%	$	343,317	$	—
Direct interest in SREIT properties	2021	U.S. / Canada	10	%		144,050		—
Ascenty	2019	Brazil / Chile / Mexico	51	%		553,031		567,192
Mapletree	2019	Northern Virginia	20	%		172,465		184,890
Mitsubishi	Various	Osaka / Tokyo	50	%		401,509		278,947
Lumen	2012	Hong Kong	50	%		68,854		86,600
Other	Various	U.S. / India / Nigeria	Various			124,463		30,529
Total					$	1,807,689	$	1,148,158

SREIT – The Company’s ownership interest in the SREIT consists of units of the SREIT parent, Digital Core REIT (which is publicly-traded on the SGX under the ticker symbol: DCRU), as well as a direct interest in the operating properties. As of December 31, 2021, the Company held a 35% interest in the SREIT and separately owns a 10% direct retained interest in the underlying operating properties. The Company’s 35% interest in Digital Core REIT as of December 31, 2021 consists of 390 million units publicly-traded on the SGX under the ticker symbol DCRU. Based on the closing price per unit of $1.16, the fair value of the units the Company owns in DCRU was $453 million as of December 31, 2021. This value does not include the value of the Company’s 10% direct interest in the operating properties of the SREIT, because the associated ownership interests are not publicly-traded.

The Company accounts for its combined ownership interest in the SREIT as an equity method investment based on the significant influence it is able to exert on the SREIT (and not at fair value). A greenshoe option was included as a provision in the SREIT IPO underwriting agreement that granted underwriters the right to buy an additional amount of units from the Company at the same price as the initial offering price and sell those units to other parties. The greenshoe option was exercised on December 31, 2021 – reducing the Company’s share in Digital Core REIT down from the initial 39% interest (including the acquisition fee that was received in units) upon sale of the 10 operating properties on December 6, 2021 to 35% at December 31, 2021. No incremental gain or loss was recorded by the Company for the sale of units under the greenshoe option, because the units were sold at the initial offering price which was equal to the Company’s book basis in the units.

Pursuant to contractual agreements with the SREIT, the Company will earn fees for asset and property management services as well as fees for aiding the SREIT in future acquisition, disposition and development activities. Certain of these fees are payable to the Company in the form of additional units in the SREIT or in cash_._

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Ascenty – The Company’s ownership percentage in Ascenty includes an approximate 2% interest held by one of the Company’s non-controlling interest holders. This 2% interest had a carrying value of approximately $20.9 million and $21.9 million as of December 31, 2021 and December 31, 2020, respectively. Ascenty is a variable interest entity (“VIE”) and the Company’s maximum exposure to loss related to this VIE is limited to our equity investment in the entity.

PREI ® – In the third quarter of 2021, the existing unconsolidated partnership between the Company and PGIM Real Estate (the “PGIM Joint Venture”), completed the sale of a portfolio of 10 data centers in North America for $581 million. PGIM Real Estate owned an 80% interest and the Company owned a 20% interest in the partnership. We recognized a gain of approximately $64 million from the sale of the data centers. This gain is reflected in equity in earnings (loss) of unconsolidated entities in our condensed consolidated income statements. In addition, we received a promote in the amount of $19 million related to the partnership exceeding certain investor return thresholds over the life of the partnership, which is included in fee income and other in our consolidated income statements.

Summarized Financial Information of Investments in Unconsolidated Entities

SREIT

The SREIT is a separate publicly-traded entity on the Singapore Stock Exchange (“SGX”) with its own set of standalone financial statements that are made available to the public by the SREIT’s management team as part of its compliance with the rules of the SGX. The SREIT’s standalone results for the period subsequent to when the SREIT was listed on December 6, 2021 will not be made public by the SREIT until the first quarter of 2022. Consequently, we have utilized summarized financial information of the SREIT as of December 6, 2021 (which is the information that is publicly-available at this time). Actual balances at December 31, 2021 are not expected to materially differ from amounts shown herein.


SREIT Summarized Financial Information	(in millions)
Real estate properties appraised value	$	1,440.5
Debt		(350.0)
Net assets	$	1,090.5

All Other Investments in Unconsolidated Entities

The subsequent tables provide summarized financial information for all of our investments in unconsolidated entities accounted for using the equity method except for the investment in the SREIT which is discussed previously. Amounts are shown in thousands.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020


									Net		Net
	Total		Total						Operating		Income
December 31, 2021	Assets		Liabilities		Equity		Revenues		Income		(Loss)
Unconsolidated entities
Ascenty	$	2,079,401	$	1,046,079	$	1,033,322	$	204,696	$	128,827	$	(41,461)
Mitsubishi		1,376,763		537,581		839,182		168,203		88,462		31,125
Lumen		148,576		10,868		137,708		25,541		15,506		2,718
Mapletree		925,190		24,865		900,325		111,010		65,701		(9,825)
Other		440,694		190,996		249,698		59,881		36,427		233,298
Total Unconsolidated entities	$	4,970,624	$	1,810,389	$	3,160,235	$	569,331	$	334,923	$	215,855
Our investment in and share of equity in earnings of unconsolidated entities					$	1,807,689					$	62,283


									Net		Net
	Total		Total						Operating		Income
December 31, 2020	Assets		Liabilities		Equity		Revenues			Income	(Loss)
Unconsolidated entities
Ascenty	$	1,862,402	$	833,801	$	1,028,601	$	165,680	$	105,040	$	(191,161)
Mitsubishi		968,957		358,749		610,208		154,114		83,113		43,746
Lumen		181,464		8,264		173,200		25,006		14,765		5,581
Mapletree		985,900		38,140		947,760		106,966		66,062		(11,473)
Other		604,215		421,349		182,866		83,475		57,674		18,210
Total Unconsolidated entities	$	4,602,938	$	1,660,303	$	2,942,635	$	535,241	$	326,654	$	(135,097)
Our investment in and share of equity in loss of unconsolidated entities					$	1,148,158					$	(57,629)

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020


									Net		Net
	Total		Total		Equity /				Operating		Income
December 31, 2019	Assets		Liabilities		(Deficit)		Revenues			Income	(Loss)
Unconsolidated entities

Ascenty	$	2,178,663	$	764,603	$	1,414,060	$	112,052	$	71,802	$	(54,606)
Mitsubishi		753,743		303,130		450,613		84,344		45,044		18,751
Lumen		187,241		9,947		177,294		24,680		15,429		6,712
Mapletree		1,042,661		23,796		1,018,865		17,852		11,078		(1,872)
Other		715,442		579,470		135,972		140,672		93,104		39,372
Total Unconsolidated entities	$	4,877,750	$	1,680,946	$	3,196,804	$	379,600	$	236,457	$	8,357
Our investment in and share of equity in earnings of unconsolidated entities					$	1,287,109					$	8,067

The amounts reflected in the previous tables on this topic are based on the historical financial information of the respective individual entities and have not been adjusted to show only the portion that is owned by the Company. The debt of our unconsolidated entities generally is non-recourse to us, except for customary exceptions pertaining to such matters as intentional misuse of funds, environmental conditions, and material misrepresentations.

9. Goodwill

Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination. Changes in the value of goodwill at December 31, 2021 as compared to December 31, 2020 were immaterial and driven primarily by changes in exchange rates associated with goodwill balances denominated in foreign currencies.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Acquired Intangible Assets and Liabilities

The following summarizes our acquired intangible assets and intangible liabilities as of December 31, 2021 and 2020.


(Amounts in thousands)
	Balance as of
	December 31, 2021						December 31, 2020
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationship value	$	2,838,842	$	(721,983)	$	2,116,859	$	2,993,093	$	(570,886)	$	2,422,207
Acquired in-place lease value		1,278,012		(995,883)		282,129		1,382,563		(1,004,421)		378,142
Other		101,869		(14,688)		87,181		57,370		(7,107)		50,263
Acquired above-market leases		268,724		(247,135)		21,589		280,216		(236,923)		43,293
Acquired below-market leases		(351,052)		247,877		(103,175)		(401,539)		270,648		(130,891)

Amortization of customer relationship value, acquired in-place lease value and other intangibles (a component of depreciation and amortization expense) was approximately $262.9 million, $266.2 million and $271.4 million for the years ended December 31, 2021, 2020 and 2019, respectively. Amortization of acquired below-market leases, net of acquired above-market leases, resulted in a decrease in rental and other services revenue of $(3.6) million, $(10.5) million and $(17.1) million for the years ended December 31, 2021, 2020 and 2019, respectively. Estimated annual amortization for each of the five succeeding years and thereafter, commencing January 1, 2022 is as follows:


(Amounts in thousands)
		Customer relationship value		Acquired in-place lease value		Other (1)		Acquired above-market leases		Acquired below-market leases
2022	$	168,560	$	53,840	$	8,073	$	11,209	$	(14,190)
2023		167,891		43,769		1,458		4,759		(12,657)
2024		167,312		37,945		—		2,584		(11,364)
2025		166,809		34,846		—		1,452		(10,370)
2026		166,374		30,713		—		684		(8,728)
Thereafter		1,279,913		81,016		—		901		(45,866)
Total	$	2,116,859	$	282,129	$	9,531	$	21,589	$	(103,175)

Remaining Contractual Life (in years)		13.6		5.0				1.6		7.2

(1)	Excludes power grid rights in the amount of approximately $77.7 million that are currently not being amortized. Amortization of these assets will begin once the data centers associated with the power grid rights are placed into service.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Debt of the Operating Partnership

All debt is currently held by the OP or its consolidated subsidiaries, and the Parent is the guarantor or co-guarantor of such debt. A summary of outstanding indebtedness is as follows (in thousands):


	December 31, 2021				December 31, 2020
	Weighted-				Weighted-
	average		Amount		average		Amount
	interest rate		Outstanding		interest rate		Outstanding
Global revolving credit facilities	0.96	%	$	415,116	0.91	%	$	540,184
Unsecured term loans	—	%		—	1.20	%		537,470
Unsecured senior notes	2.26	%		13,000,042	2.49	%		12,096,029
Secured and other debt	3.47	%		147,082	2.92	%		239,330
Total	2.23	%	$	13,562,240	2.38	%	$	13,413,013

The weighted-average interest rates shown represent interest rates at the end of the periods for the debt outstanding and include the impact of designated interest rate swaps, which effectively fix the interest rates on certain variable rate debt.

We primarily borrow in the functional currencies of the countries where we invest. Included in the outstanding balances were borrowings denominated in the following currencies (in thousands, U.S. dollars):


	December 31, 2021				December 31, 2020
	Amount				Amount
Denomination of Draw	Outstanding		% of Total		Outstanding		% of Total
U.S. dollar ($)	$	3,141,951	23.2	%	$	3,629,000	27.1	%
British pound sterling (£)		2,117,758	15.6	%		2,166,695	16.2	%
Euro (€)		7,532,057	55.5	%		6,912,142	51.5	%
Other		770,474	5.7	%		705,176	5.2	%
Total	$	13,562,240			$	13,413,013

The table below summarizes our debt maturities and principal payments as of December 31, 2021 (in thousands):


	Global Revolving		Unsecured
	Credit Facilities(1)		Senior Notes		Secured and Other Debt		Total Debt
2022	$	—	$	682,200	$	336	$	682,536
2023		—		—		3,081		3,081
2024		—		1,020,500		—		1,020,500
2025		—		1,730,330		—		1,730,330
2026		415,116		1,523,694		3,870		1,942,680
Thereafter		—		8,043,318		139,794		8,183,112
Subtotal	$	415,116	$	13,000,042	$	147,082	$	13,562,240
Unamortized net discounts		—		(33,612)		—		(33,612)
Unamortized deferred financing costs		(16,944)		(63,060)		(414)		(80,418)
Total	$	398,172	$	12,903,370	$	146,668	$	13,448,210

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

(1)	Includes amounts outstanding for the Global Revolving Credit Facility and the Yen Revolving Credit Facility (together, we refer to as the “Global Revolving Credit Facilities”) – but are discussed separately in these footnotes given slightly different fees/terms.

Global Revolving Credit Facility

We have a global revolving senior credit facility (“global revolving credit facility”) under which we may draw up to $3.0 billion on a revolving basis (subject to currency fluctuations). The global revolving credit facility can be drawn in Australian dollars, British pounds sterling, Canadian dollars, Euros, Hong Kong dollars, Japanese yen, Singapore dollars, Indonesian rupiah, Swiss francs, Korean won and U.S. dollars (with the ability to add other currencies in the future).

We have the ability to increase the size of the global revolving credit facility by up to $1.5 billion, subject to the receipt of lender commitments and other conditions precedent. Other key terms of the global revolving credit facility are as follows:

	●	Maturity date: January 24, 2026, with two six-month extension options available. The bank group is obligated to grant the extension options provided we give proper notice, we make certain representations and warranties and no default exists under the global revolving credit facilities.

	●	Interest rate: the applicable index plus a margin which is based on the credit ratings of our long-term debt and is currently 85 basis points.

	●	Annual facility fee: based on the total commitment amount of the facility and the credit ratings of our long-term debt is currently 20 basis points and is payable quarterly.

	●	Sustainability-linked pricing component: pricing can increase by up to 5 basis points or decrease by up to 5 basis points depending on whether or not the OP or its subsidiaries meet certain sustainability performance targets.

Yen Revolving Credit Facility

In addition to the global revolving credit facility, we have a revolving credit facility that provides for borrowings in Japanese Yen of up to ¥33.3 billion (approximately $291.3 million based on the exchange rate on November 18, 2021), hereafter referred to as the “Yen revolving credit facility”). We have the ability from time to time to increase the size of the Yen revolving credit facility to up to ¥93.3 billion, subject to receipt of lender commitments and other conditions precedent. Other key terms of the Yen revolving credit facility are as follows:

	●	Maturity date: January 24, 2026, with two six-month extension options available. The bank group is obligated to grant the extension options provided we give proper notice, we make certain representations and warranties and no default exists under the global revolving credit facilities.

	●	Interest rate: the applicable index plus a margin which is based on the credit ratings of our long-term debt and is currently 50 basis points.

	●	Quarterly unused commitment fee: currently is 10 basis points, calculated using the average daily unused revolving credit commitment and is based on the credit ratings of our long-term debt

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

	●	Sustainability-linked pricing component: pricing can increase by up to 5 basis points or decrease by up to 5 basis points depending on whether or not the OP or its subsidiaries meet certain sustainability performance targets.

Restrictive Covenants in Global Revolving Credit Facility and Yen Revolving Credit Facility

The global revolving credit facility and the Yen revolving credit facility both contain various restrictive covenants, including limitations on our ability to incur additional indebtedness, make certain investments, or merge with another company. In addition, we are required to maintain financial coverage ratios, including with ratios respect to unencumbered assets. After the occurrence of and during the continuance of any event of default, these credit facilities restrict the Parent’s ability to make distributions to stockholders or redeem or otherwise repurchase shares of its capital stock, except in limited circumstances (such as those necessary to enable Digital Realty Trust, Inc. to maintain its qualification as a REIT and to minimize the payment of income or excise tax). As of December 31, 2021, we were in compliance with all of such covenants for both of these revolving credit facilities.

Unsecured Senior Notes

The following table provides details of outstanding unsecured senior notes (balances in thousands):


	Aggregate Principal at Issuance					Balance as of
	Borrowing Currency		USD		Maturity Date		December 31, 2021		December 31, 2020
Floating rate notes due 2022	€	300,000	$	349,800	Sep 23, 2022	$	341,100	$	366,480
0.125% notes due 2022	€	300,000		332,760	Oct 15, 2022		341,100		366,480
2.750% notes due 2023	$	350,000		350,000	Feb 1, 2023		-		350,000
2.625% notes due 2024	€	600,000		677,040	Apr 15, 2024		682,200		732,960
2.750% notes due 2024	£	250,000		324,925	Jul 19, 2024		338,300		341,750
4.250% notes due 2025	£	400,000		634,480	Jan 17, 2025		541,280		546,800
0.625% notes due 2025	€	650,000		720,980	Jul 15, 2025		739,050		794,040
4.750% notes due 2025	$	450,000		450,000	Oct 1, 2025		450,000		450,000
2.500% notes due 2026	€	1,075,000		1,224,640	Jan 16, 2026		1,222,275		1,313,219
0.200% notes due 2026	CHF	275,000		298,404	Dec 15, 2026		301,419		-
3.700% notes due 2027	$	1,000,000		1,000,000	Aug 15, 2027		1,000,000		1,000,000
1.125% notes due 2028	€	500,000		548,550	Apr 09, 2028		568,500		610,800
4.450% notes due 2028	$	650,000		650,000	Jul 15, 2028		650,000		650,000
0.550% notes due 2029	CHF	270,000		292,478	Apr 16, 2029		295,938		-
3.300% notes due 2029	£	350,000		454,895	Jul 19, 2029		473,620		478,450
3.600% notes due 2029	$	900,000		900,000	Jul 01, 2029		900,000		900,000
1.500% notes due 2030	€	750,000		831,900	Mar 15, 2030		852,750		916,200
3.750% notes due 2030	£	550,000		719,825	Oct 17, 2030		744,260		751,850
1.250% notes due 2031	€	500,000		560,950	Feb 1, 2031		568,500		610,800
0.625% notes due 2031	€	1,000,000		1,220,700	Jul 15, 2031		1,137,000		-
1.000% notes due 2032	€	750,000		874,500	Jan 15, 2032		852,750		916,200
						$	13,000,042	$	12,096,029
Unamortized discounts, net of premiums							(33,612)		(34,988)
Deferred financing costs, net							(63,060)		(64,031)
Total unsecured senior notes, net of discount and deferred financing costs						$	12,903,370	$	11,997,010

On January 12, 2021, Digital Intrepid Holding B.V., an indirect wholly owned holding and finance subsidiary of the OP, issued and sold €1.0 billion aggregate principal amount of 0.625% Guaranteed Notes due 2031 (the “2031 Notes”). The 2031 Notes are senior unsecured obligations of Digital Intrepid Holding B.V. and are fully and unconditionally guaranteed by the Parent and the OP. Net proceeds from the offering were approximately €988.3 million (approximately $1,206.4 million based on the exchange rate on January 12, 2021) after deducting managers’ discounts and estimated offering expenses.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

On July 15, 2021, Digital Intrepid Holding B.V., an indirect wholly owned holding and finance subsidiary of the OP issued and sold CHF 275 million aggregate principal amount of 0.20% Guaranteed Notes due 2026 (the “2026 Notes”) and CHF 270 million aggregate principal amount of 0.55% Guaranteed Notes due 2029 (the “2029 Notes” and together with the 2026 Notes, the “Swiss Franc Notes”). The Swiss Franc Notes are senior unsecured obligations of Digital Intrepid Holding B.V. and are fully and unconditionally guaranteed by the Parent and the OP. Net proceeds from the offering of the Swiss Franc Notes were approximately CHF 542.3 million (approximately $590.9 million based on the exchange rate on July 15, 2021) after deducting the managers’ commissions and certain offering expenses.

See Note 22. “Subsequent Events” for additional information on the issuance of 1.375% Guaranteed Notes due 2032 on January 18, 2022 and the redemption of the 4.750% Notes due 2025, which occurred on February 3, 2022.

Restrictive Covenants in Unsecured Senior Notes

The indentures governing our senior notes contain certain covenants, including (1) a leverage ratio not to exceed 60%, (2) a secured debt leverage ratio not to exceed 40% and (3) an interest coverage ratio of greater than 1.50. The covenants also require us to maintain total unencumbered assets of not less than 150% of the aggregate principal amount of unsecured debt. At December 31, 2021, we were in compliance with each of these financial covenants.

Early Extinguishment of Unsecured Senior Notes

We recognized the following losses on early extinguishment of unsecured notes:

	●	During the year ended December 31, 2021: $18.7 million primarily due to redemption of the 2.750% Notes due 2023 in February 2021.

	●	During the year ended December 31, 2020: $103.2 million primarily due to redemption of:

	o	3.950% Notes due 2022 and 3.625% Notes due 2022 in August 2020; and

	o	4.750% Notes due 2023 in October 2020

	●	During the year ended December 31, 2019: $39.2 million, primarily due to costs associated with early tender offer and subsequent redemption of:

	o	5.875% Notes due 2020 in January and February 2019; and

	o	3.400% Notes due 2020 and 5.250% Notes due 2021 during June 2019

Secured and other debt – This amount consists of a variety of loans at fixed rates ranging from 1.11% to 11.65%. The largest component of the balance is a $135 million mortgage loan for the Company’s Westin building in Seattle – which bears interest at 3.29%. The loan bearing interest at 11.65% is an unsecured loan with a balance of less than $4 million.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Earnings per Common Share or Unit

The following is a summary of basic and diluted income per share/unit (in thousands, except share/unit and per share/unit amounts):

Digital Realty Trust, Inc. Earnings per Common Share


	Year Ended December 31,
	2021		2020		2019
Net income available to common stockholders	$	1,681,498	$	263,342	$	493,011
Weighted average shares outstanding—basic		282,474,927		260,098,978		208,325,823
Potentially dilutive common shares:
Unvested incentive units		253,344		120,775		165,185
Unvested restricted stock		191,541		177,244		—
Forward equity offering		—		1,596,476		813,073
Market performance-based awards		302,156		529,035		158,166
Weighted average shares outstanding—diluted		283,221,968		262,522,508		209,462,247
Income per share:
Basic	$	5.95	$	1.01	$	2.37
Diluted	$	5.94	$	1.00	$	2.35

Digital Realty Trust, L.P. Earnings per Unit


	Year Ended December 31,
	2021		2020		2019
Net income available to common unitholders	$	1,720,598	$	272,842	$	514,111
Weighted average units outstanding—basic		289,165,448		268,072,983		217,284,755
Potentially dilutive common units:
Unvested incentive units		253,344		120,775		165,185
Unvested restricted units		191,541		177,244		—
Forward equity offering		—		1,596,476		813,073
Market performance-based awards		302,156		529,035		158,166
Weighted average units outstanding—diluted		289,912,489		270,496,513		218,421,179
Income per unit:
Basic	$	5.95	$	1.02	$	2.37
Diluted	$	5.94	$	1.01	$	2.35

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

The below table shows the securities that would be antidilutive or not dilutive to the calculation of earnings per share and unit. Common units of the Operating Partnership not owned by Digital Realty Trust, Inc. were excluded only from the calculation of earnings per share as they are not applicable to the calculation of earnings per unit. All other securities shown below were excluded from the calculation of both earnings per share and earnings per unit.


	Year Ended December 31,
	2021	2020	2019
Shares of common stock subject to forward sale agreements	6,250,000	—	—
Weighted average of Operating Partnership common units not owned by Digital Realty Trust, Inc.	6,690,521	7,974,005	8,958,932
Potentially dilutive Series C Cumulative Redeemable Perpetual Preferred Stock	541,249	1,489,983	1,695,765
Potentially dilutive Series G Cumulative Redeemable Preferred Stock	—	1,452,809	2,102,655
Potentially dilutive Series H Cumulative Redeemable Preferred Stock	—	—	789,846
Potentially dilutive Series I Cumulative Redeemable Preferred Stock	—	1,269,035	2,105,116
Potentially dilutive Series J Cumulative Redeemable Preferred Stock	1,318,309	1,475,721	1,679,534
Potentially dilutive Series K Cumulative Redeemable Preferred Stock	1,386,274	1,551,801	1,334,691
Potentially dilutive Series L Cumulative Redeemable Preferred Stock	2,273,803	2,543,639	670,823
Total	18,460,156	17,756,993	19,337,362

Income Taxes

Digital Realty Trust, Inc. has elected to be treated and believes that it has been organized and has operated in a manner that has enabled it to qualify as a REIT for federal income tax purposes. As a REIT, Digital Realty Trust, Inc. is generally not subject to corporate level federal income taxes on taxable income distributed currently to its stockholders. Since inception, Digital Realty Trust, Inc. has distributed at least 100% of its taxable income annually. As such, no provision for federal income taxes has been included in the Company’s accompanying consolidated financial statements for the years ended December 31, 2021, 2020 and 2019.

The Operating Partnership is a partnership and is not required to pay federal income tax. Instead, taxable income is allocated to its partners, who include such amounts on their federal income tax returns. As such, no provision for federal income taxes has been included in the Operating Partnership’s accompanying consolidated financial statements.

We have elected taxable REIT subsidiary (“TRS”) status for some of our consolidated subsidiaries. In general, a TRS may provide services that would otherwise be considered impermissible for REITs to provide and may hold assets that REITs cannot hold directly. Income taxes for TRS entities were accrued, as necessary, for the years ended December 31, 2021, 2020 and 2019.

For our TRS entities and foreign subsidiaries that are subject to U.S. federal, state, local and foreign income taxes, deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance for deferred tax assets is provided if we believe it is more likely than not that the deferred tax asset may not be realized, based on available evidence at the time the determination is made. An increase or decrease in the valuation allowance that results from the change in circumstances that causes a change in our judgment about the realizability of the related deferred tax asset is included in the income statement. Deferred tax assets (net of valuation allowance) and liabilities for our TRS entities and foreign subsidiaries were accrued, as necessary, for the years ended December 31, 2021, 2020 and 2019. As of December 31, 2021 and 2020, we had deferred tax liabilities net of deferred

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

tax assets of approximately $658.8 million and $737.3 million, respectively, primarily related to our foreign properties, classified in accounts payable and other accrued expenses in the consolidated balance sheet. The majority of our net deferred tax liability relates to differences between foreign tax basis and book basis of the assets acquired in the Interxion Combination in March 2020, the European Portfolio Acquisition in July 2016 and the Sentrum portfolio acquisition in 2012. The valuation allowance against the deferred tax assets at December 31, 2021 and 2020 relate primarily to net operating loss carryforwards that we do not expect to utilize attributable to certain foreign jurisdictions.

Deferred income tax assets and liabilities as of December 31, 2021 and 2020 were as follows (in thousands):


	2021		2020
Gross deferred income tax assets:
Net operating loss carryforwards	$	155,152	$	164,294
Basis difference - real estate property		9,078		20,297
Basis difference - intangibles		2,357		2,369
Straight-line rent		8,097		1,121
Other - temporary differences		175,766		60,840
Total gross deferred income tax assets		350,450		248,921
Valuation allowance		(130,893)		(108,060)
Total deferred income tax assets, net of valuation allowance		219,557		140,861
Gross deferred income tax liabilities:
Basis difference - real estate property		798,640		610,499
Basis difference - equity investments		3,543		4,000
Basis difference - intangibles		63,222		246,950
Straight-line rent		10,942		6,884
Other - temporary differences		1,976		9,805
Total gross deferred income tax liabilities		878,323		878,138
Net deferred income tax liabilities	$	658,766	$	737,277

Equity and Capital

Equity Distribution Agreement

Digital Realty Trust, Inc. and Digital Realty Trust, L.P., are parties to an at-the-market (ATM) equity offering sales agreement dated January 4, 2019, as amended in 2020 (the “Sales Agreement”). Pursuant to the Sales Agreement, Digital Realty Trust, Inc. can issue and sell common stock having an aggregate offering price of up to $1.0 billion through various named agents from time to time. For the year ended December 31, 2021, Digital Realty Trust, Inc. issued approximately 1.1 million common shares under the Sales Agreement at an average price of $161.92 per share. For the year ended December 31, 2020, Digital Realty Trust, Inc. issued approximately 6.1 million common shares under the Sales Agreement at an average price of $146.89 per share. As of December 31, 2021, approximately $577.6 million remains available for future sales under the program.

Forward Equity Sale

On September 13, 2021, the Parent completed an underwritten public offering of 6,250,000 shares of its common stock, all of which were offered in connection with forward sale agreements it entered into with certain financial institutions

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

acting as forward purchasers. The forward purchasers borrowed and sold an aggregate of 6,250,000 shares of the Parent’s common stock in the public offering. The Parent did not receive any proceeds from the sale of common stock by the forward purchasers in the public offering. The Parent may receive gross proceeds of approximately $1.0 billion (based on the net offering price of $155.69 per share) upon full physical settlement of the forward sale agreements, which is to be no later than March 13, 2023.

Upon physical settlement of the forward sale agreements, the OP is expected to issue general partner common partnership units to the Parent in exchange for contribution of the net proceeds. The forward purchasers had also granted to the underwriters an option, exercisable until October 13, 2021, to purchase up to 937,500 additional shares at a price of $155.69, which represents the initial price to the public less the underwriting discount. The underwriters opted not to exercise their option within the specified time period.

We account for our forward equity sales agreements in accordance with the accounting guidance governing financial instruments and derivatives. As of December 31, 2021, none of our forward equity sales agreements were deemed to be liabilities as they did not embody obligations to repurchase our shares, nor did they embody obligations to issue a variable number of shares for which the monetary value was predominantly fixed, varied with something other than the fair value of our shares, or varied inversely in relation to our shares. We also evaluated whether the agreements met the derivatives and hedging guidance scope exception to be accounted for as equity instruments and concluded that the agreements could be classified as equity contracts based on the following assessment: (i) none of the agreements’ exercise contingencies were based on observable markets or indices besides those related to the market for our own stock price and operations; and (ii) none of the settlement provisions precluded the agreements from being indexed to our own stock.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Redeemable Preferred Stock

The Company has issued and outstanding the following series of cumulative redeemable preferred stock, which are governed by the articles supplementary for the applicable series of preferred stock as of December 31, 2021 and 2020.


				Total
				Liquidation		Annual		Shares Outstanding as of		Balance (in thousands, net of
	Date(s)	Initial Date to		Value (in		Dividend		December 31,		issuance costs) as of December 31,
Preferred Stock (1)	Issued	Redeem (2)	Share Cap (3)	thousands) (4)		Rate (5)		2021	2020	2021		2020
6.625% Series C Cumulative Redeemable Perpetual Preferred Stock	Sep 14, 2017	May 17, 2021	0.6389035	$	—	$	1.65625	—	8,050,000	$	—	$	219,250
5.250% Series J Cumulative Redeemable Preferred Stock	Aug 7, 2017	Aug 7, 2022	0.4252100		200,000		1.31250	8,000,000	8,000,000		193,540		193,540
5.850% Series K Cumulative Redeemable Preferred Stock	Mar 13, 2019	Mar 13, 2024	0.4361100		210,000		1.46250	8,400,000	8,400,000		203,264		203,264
5.200% Series L Cumulative Redeemable Preferred Stock	Oct 10, 2019	Oct 10, 2024	0.3851800		345,000		1.30000	13,800,000	13,800,000		334,886		334,886
				$	755,000			30,200,000	38,250,000	$	731,690	$	950,940

(1)

All series of preferred stock do not have a stated maturity date and are not subject to any sinking fund or mandatory redemption provisions. Upon liquidation, dissolution or winding up, each series of preferred stock will rank senior to Digital Realty Trust, Inc. common stock and on parity with the other series of preferred stock. Holders of each series of preferred stock generally have no voting rights except for limited voting rights if Digital Realty Trust, Inc. fails to pay dividends for six or more quarterly periods (whether or not consecutive) and in certain other circumstances.

(2)	Except in limited circumstances, reflects earliest date that Digital Realty Trust, Inc. may exercise its option to redeem the preferred stock, at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to but excluding the date of redemption.

(3)

Upon the occurrence of specified changes of control, as a result of which neither Digital Realty Trust, Inc.’s common stock nor the common securities of the acquiring or surviving entity (or American Depositary Receipts representing such securities) is listed on the New York Stock Exchange, the NYSE MKT, LLC or the NASDAQ Stock Market or listed or quoted on a successor exchange or quotation system, each holder of preferred stock will have the right (unless, prior to the change of control conversion date specified in the applicable Articles Supplementary governing the preferred stock, Digital Realty Trust, Inc. has provided or provides notice of its election to redeem the preferred stock) to convert some or all of the preferred stock held by it into a number of shares of Digital Realty Trust, Inc.’s common stock per share of preferred stock to be converted equal to the lesser of (i) the quotient obtained by dividing (a) the sum of the $25.00 liquidation preference plus the amount of any accrued and unpaid dividends to, but not including, the change of control conversion date (unless the change of control conversion date is after a record date for a preferred stock dividend payment and prior to the corresponding dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in this sum) by (b) the common stock price specified in the applicable Articles Supplementary governing the preferred stock; and (ii) the Share Cap, subject to certain adjustments; subject, in each case, to provisions for the receipt of alternative consideration as described in the applicable Articles Supplementary governing the preferred stock. Except in connection with specified change of control transactions, the preferred stock is not convertible into or exchangeable for any other property or securities of Digital Realty Trust, Inc.

(4)	Liquidation preference is $25.00 per share.

(5)	Dividends on preferred shares are cumulative and payable quarterly in arrears.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Noncontrolling Interests in Operating Partnership

Noncontrolling interests in the Operating Partnership relate to the proportion of entities consolidated by the Company that are owned by third parties. The following table shows the ownership interest in the Operating Partnership as of December 31, 2021 and 2020:


	December 31, 2021			December 31, 2020
	Number of	Percentage of		Number of	Percentage of
	units	total		units	total
Digital Realty Trust, Inc.	284,415,013	98.0	%	280,289,726	97.2	%
Noncontrolling interests consist of:
Common units held by third parties	4,389,384	1.5	%	6,212,369	2.2	%
Incentive units held by employees and directors (see Note 16. “Incentive Plan”)	1,542,387	0.5	%	1,833,898	0.6	%
	290,346,784	100.0	%	288,335,993	100.0	%

Limited partners have the right to require the Operating Partnership to redeem all or a portion of their common units for cash based on the fair market value of an equivalent number of shares of Digital Realty Trust, Inc. common stock at the time of redemption. Alternatively, Digital Realty Trust, Inc. may elect to acquire those common units in exchange for shares of its common stock on a one-for-one basis, subject to adjustment in the event of stock splits, stock dividends, issuance of stock rights, specified extraordinary distributions and similar events. The common units and incentive units of the Operating Partnership are classified within equity, except for certain common units issued to certain former DuPont Fabros Technology, L.P. unitholders in the Company’s acquisition of DuPont Fabros Technology, Inc., which are subject to certain restrictions and, accordingly, are not presented as permanent equity in the consolidated balance sheet.

The redemption value of the noncontrolling Operating Partnership common units and the vested incentive units was approximately $1,074.7 million and $1,078.9 million based on the closing market price of Digital Realty Trust, Inc. common stock on December 31, 2021 and December 31, 2020, respectively.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

The following table shows activity for the noncontrolling interests in the Operating Partnership for the years ended December 31, 2021, 2020 and 2019:


	Common Units	Incentive Units	Total
As of December 31, 2018	8,636,146	1,944,738	10,580,884
Redemption of common units for shares of Digital Realty Trust, Inc. common stock (1)	(1,815,945)	—	(1,815,945)
Conversion of incentive units held by employees and directors for shares of Digital Realty Trust, Inc. common stock (1)	—	(338,515)	(338,515)
Incentive units issued upon achievement of market performance condition	—	319,279	319,279
Grant of incentive units to employees and directors	—	120,368	120,368
Cancellation / forfeitures of incentive units held by employees and directors	—	(22,916)	(22,916)
As of December 31, 2019	6,820,201	2,022,954	8,843,155
Redemption of common units for shares of Digital Realty Trust, Inc. common stock (1)	(607,832)	—	(607,832)
Conversion of incentive units held by employees and directors for shares of Digital Realty Trust, Inc. common stock (1)	—	(461,912)	(461,912)
Incentive units issued upon achievement of market performance condition	—	147,570	147,570
Grant of incentive units to employees and directors	—	128,049	128,049
Cancellation / forfeitures of incentive units held by employees and directors	—	(2,763)	(2,763)
As of December 31, 2020	6,212,369	1,833,898	8,046,267
Redemption of common units for shares of Digital Realty Trust, Inc. common stock (1)	(1,822,985)	—	(1,822,985)
Conversion of incentive units held by employees and directors for shares of Digital Realty Trust, Inc. common stock (1)	—	(679,346)	(679,346)
Incentive units issued upon achievement of market performance condition	—	238,618	238,618
Grant of incentive units to employees and directors	—	151,093	151,093
Cancellation / forfeitures of incentive units held by employees and directors	—	(1,876)	(1,876)
As of December 31, 2021	4,389,384	1,542,387	5,931,771

(1)	These redemptions and conversions were recorded as a reduction to noncontrolling interests in the Operating Partnership and an increase to common stock and additional paid in capital based on the book value per unit in the accompanying consolidated balance sheet of Digital Realty Trust, Inc.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Dividends and Distributions

Digital Realty Trust, Inc. Dividends

We have declared and paid the following dividends on our common and preferred stock for the years ended December 31, 2021, 2020 and 2019 (in thousands, except per share data):


		Series C			Series G			Series H			Series I			Series J		Series K			Series L
		Preferred			Preferred			Preferred			Preferred			Preferred		Preferred			Preferred			Common
Date dividend declared	Dividend payment date	Stock			Stock (1)			Stock			Stock			Stock		Stock			Stock			Stock
February 21, 2019	March 29, 2019	$	3,333		$	3,672		$	6,730		$	3,969		$	2,625	$	—		$	—		$	224,802	(3)
May 13, 2019	June 28, 2019		3,333			3,672			—	(1)		3,969			2,625		3,686	(2)		—			224,895	(3)
August 13, 2019	September 30, 2019		3,333			3,672			—			3,969			2,625		3,071			—			225,188	(3)
November 19, 2019	December 31, 2019 for Preferred Stock; January 15, 2020 for Common Stock		3,333			3,672			—			3,969			2,625		3,071			4,036	(4)		225,488	(3)
		$	13,332		$	14,688		$	6,730		$	15,876		$	10,500	$	9,828		$	4,036		$	900,373

February 26, 2020	March 31, 2020	$	3,333		$	3,672		$	—		$	3,969		$	2,625	$	3,071		$	4,485		$	295,630	(7)
May 12, 2020	June 30, 2020		3,333			3,672			—			3,969			2,625		3,071			4,485			301,005	(7)
August 11, 2020	September 30, 2020		3,333			3,672			—			—	(6)		2,625		3,071			4,485			303,006	(7)
November 10, 2020	December 31, 2020 for Preferred Stock; January 15, 2021 for Common Stock		3,333			—	(5)		—			—			2,625		3,071			4,485			314,280	(7)
		$	13,332		$	11,016		$	—		$	7,938		$	10,500	$	12,284		$	17,940		$	1,213,921

February 25, 2021	March 31, 2021	$	3,333		$	—		$	—		$	—		$	2,625	$	3,071		$	4,485		$	326,965	(9)
May 10, 2021	June 30, 2021		—	(8)		—			—			—			2,625		3,071			4,485			328,279	(9)
August 10, 2021	September 30, 2021		—			—			—			—			2,625		3,071			4,485			329,720	(9)
November 17, 2021	December 31, 2021 for Preferred Stock; January 14, 2022 for Common Stock		—			—			—			—			2,625		3,071			4,485			329,772	(9)
		$	3,333		$	—		$	—		$	—		$	10,500	$	12,284		$	17,940		$	1,314,736
Annual rate of dividend per share		$	1.65625		$	1.46875		$	1.84375		$	1.58750		$	1.31250	$	1.46250		$	1.30000		$	4.64000

(1)	Redeemed on April 1, 2019 for $25.00 per share, or a redemption price of $25.00 per share, plus accrued and unpaid dividends up to but not including the redemption date. In connection with the redemption, the previously incurred offering costs of approximately $11.8 million were recorded as a reduction to net income available to common stockholders.

(2)	Represents a pro rata dividend from and including the original issue date to and including June 30, 2019.

(3)	$4.320 annual rate of dividend per share.

(4)	Represents a pro rata dividend from and including the original issue date to and including December 31, 2019.

(5)	Redeemed on October 15, 2020 for $25.057118 per share, or a redemption price of $25.00 per share, plus accrued and unpaid dividends up to but not including the redemption date. In connection with the redemption, the previously incurred offering costs of approximately $8.2 million were recorded as a reduction to net income available to common stockholders.

(6)	Redeemed on September 8, 2020 for $25.29545 per share, or a redemption price of $25.00 per share, plus accrued and unpaid dividends up to but not including the redemption date. In connection with the redemption, the previously incurred offering costs of approximately $8.0 million were recorded as a reduction to net income available to common stockholders.

(7)	$4.480 annual rate of dividend per share.

(8)

Redeemed on May 17, 2021 for $ 25.211632 per share, or a redemption price of $25.00 per share, plus accrued and unpaid dividends up to but not including the redemption date. The transaction resulted in a gain on redemption of $18.0 million, measured as the difference between the cash consideration paid upon redemption, which was $201.3 million and the carrying value of the preferred stock at the time of the redemption, which was $219.3 million. This

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

	amount is reflected as gain on redemption of preferred stock which increased net income available to common stockholders.

(9)	$4.640 annual rate of dividend per share.

Digital Realty Trust, L.P. Distributions

All distributions on the Operating Partnership’s units are at the discretion of Digital Realty Trust, Inc.’s Board of Directors. The table below shows the distributions declared and paid by the Operating Partnership on its common and preferred units for the years ended December 31, 2021, 2020 and 2019 (in thousands, except for per unit data):


		Series C			Series G			Series H			Series I			Series J		Series K			Series L
		Preferred			Preferred			Preferred			Preferred			Preferred		Preferred			Preferred			Common
Date distribution declared	Distribution payment date	Units			Units (1)			Units			Units			Units		Units			Units			Units
February 21, 2019	March 29, 2019	$	3,333		$	3,672		$	6,730		$	3,969		$	2,625	$	—		$	—		$	235,256	(3)
May 13, 2019	June 28, 2019		3,333			3,672			—	(1)		3,969			2,625		3,686	(2)		—			235,142	(3)
August 13, 2019	September 30, 2019		3,333			3,672			—			3,969			2,625		3,071			—			235,164	(3)
November 19, 2019	December 31, 2019 for Preferred Units; January 15, 2020 for Common Units		3,333			3,672			—			3,969			2,625		3,071			4,036	(4)		235,154	(3)
		$	13,332		$	14,688		$	6,730		$	15,876		$	10,500	$	9,828		$	4,036		$	940,716

February 26, 2020	March 31, 2020	$	3,333		$	3,672		$	—		$	3,969		$	2,625	$	3,071		$	4,485		$	305,267	(7)
May 12, 2020	June 30, 2020		3,333			3,672			—			3,969			2,625		3,071			4,485			310,421	(7)
August 11, 2020	September 30, 2020		3,333			3,672			—			—	(6)		2,625		3,071			4,485			312,262	(7)
November 10, 2020	December 31, 2020 for Preferred Units; January 15, 2021 for Common Units		3,333			—	(5)		—			—			2,625		3,071			4,485			323,453	(7)
		$	13,332		$	11,016		$	—		$	7,938		$	10,500	$	12,284		$	17,940		$	1,251,403

February 25, 2021	March 31, 2021	$	3,333		$	—		$	—		$	—		$	2,625	$	3,071		$	4,485		$	336,041	(9)
May 10, 2021	June 30, 2021		—	(8)		—			—			—			2,625		3,071			4,485			336,543	(9)
August 10, 2021	September 30, 2021		—			—			—			—			2,625		3,071			4,485			337,447	(9)
November 17, 2021	December 31, 2021 for Preferred Units; January 14, 2022 for Common Units		—			—			—			—			2,625		3,071			4,485			337,476	(9)
		$	3,333		$	—		$	—		$	—		$	10,500	$	12,284		$	17,940		$	1,347,507
Annual rate of distribution per unit		$	1.65625		$	1.46875		$	1.84375		$	1.58750		$	1.31250	$	1.46250		$	1.30000		$	4.64000

(1)	Redeemed on April 1, 2019 for $25.00 per unit, or a redemption price of $25.00 per unit, plus accrued and unpaid distributions up to but not including the redemption date. In connection with the redemption, the previously incurred offering costs of approximately $11.8 million were recorded as a reduction to net income available to common unitholders.

(2)	Represents a pro rata distribution from and including the original issue date to and including June 30, 2019.

(3)	$4.320 annual rate of distribution per unit.

(4)	Represents a pro rata distribution from and including the original issue date to and including December 31, 2019.

(5)	Redeemed on October 15, 2020 for $25.057118 per unit, or a redemption price of $25.00 per unit, plus accrued and unpaid distributions up to but not including the redemption date. In connection with the redemption, the previously incurred offering costs of approximately $8.2 million were recorded as a reduction to net income available to common unitholders.

(6)	Redeemed on September 8, 2020 for $25.29545 per unit, or a redemption price of $25.00 per unit, plus accrued and unpaid distributions up to but not including the redemption date. In connection with the redemption, the previously incurred offering costs of approximately $8.0 million were recorded as a reduction to net income available to common unitholders.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

(7)	$4.480 annual rate of distribution per unit.

(8)

Redeemed on May 17, 2021 for $ 25.211632 per unit, or a redemption price of $25.00 per unit, plus accrued and unpaid distributions up to but not including the redemption date. The transaction resulted in a gain on redemption of $18.0 million, measured as the difference between the cash consideration paid upon redemption, which was $201.3 million and the carrying value of the preferred stock at the time of the redemption, which was $219.3 million. This amount is reflected as gain on redemption of preferred stock which increased net income available to common unitholders.

(9)	$4.640 annual rate of distribution per unit.

Distributions out of Digital Realty Trust, Inc.’s current or accumulated earnings and profits are generally classified as dividends whereas distributions in excess of its current and accumulated earnings and profits, to the extent of a stockholder’s U.S. federal income tax basis in Digital Realty Trust, Inc.’s stock, are generally classified as a return of capital. Distributions in excess of a stockholder’s U.S. federal income tax basis in Digital Realty Trust, Inc.’s stock are generally characterized as capital gain. Cash provided by operating activities has generally been sufficient to fund all distributions, however, in the future we may also need to utilize borrowings under the global revolving credit facility to fund all or a portion of distributions.

15. Accumulated Other Comprehensive Income (Loss), Net

The accumulated balances for each item within accumulated other comprehensive income (loss) are shown below (in thousands) for Digital Realty Trust, Inc. and separately for Digital Realty Trust, L.P:

Digital Realty Trust, Inc.


	Foreign currency		Cash flow		Foreign currency net		Accumulated other
	translation		hedge		investment hedge		comprehensive
	adjustments		adjustments		adjustments		income (loss), net
Balance as of December 31, 2019	$	(114,947)	$	1,287	$	25,738	$	(87,922)
Net current period change		213,707		(11,980)		13,142		214,869
Reclassification to interest expense from interest rate swaps		—		8,063		—		8,063
Balance as of December 31, 2020	$	98,760	$	(2,630)	$	38,880	$	135,010
Net current period change		(311,413)		1,250		—		(310,163)
Reclassification to interest expense from interest rate swaps		—		1,273		—		1,273
Balance as of December 31, 2021	$	(212,653)	$	(107)	$	38,880	$	(173,880)

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Digital Realty Trust, L.P.


	Foreign currency				Foreign currency net		Accumulated other
	translation		Cash flow hedge		investment hedge		comprehensive
	adjustments		adjustments		adjustments		income (loss)
Balance as of December 31, 2019	$	(117,869)	$	308	$	26,152	$	(91,409)
Net current period change		216,815		(12,425)		13,525		217,915
Reclassification to interest expense from interest rate swaps		—		8,294		—		8,294
Balance as of December 31, 2020	$	98,946	$	(3,823)	$	39,677	$	134,800
Net current period change		(318,828)		1,279		—		(317,549)
Reclassification to interest expense from interest rate swaps		—		1,304		—		1,304
Balance as of December 31, 2021	$	(219,882)	$	(1,240)	$	39,677	$	(181,445)

Incentive Plans

2014 Incentive Award Plan

The Company provides incentive awards in the form of common stock or awards convertible into common stock pursuant to the Digital Realty Trust, Inc., Digital Services, Inc. and Digital Realty Trust, L.P. 2014 Incentive Award Plan, as amended (the “Incentive Plan”). The Incentive Plan allows for the issuance of a variety of awards. The major categories of awards that can be issued under the Incentive Plan include:

Long-Term Incentive Units (“LTIP Units”)****: LTIP Units, in the form of profits interest units of the Operating Partnership, may be issued to eligible participants for the performance of services to or for the benefit of the Operating Partnership. LTIP Units (other than Class D units), whether vested or not, receive the same quarterly per-unit distributions as Operating Partnership common units. Initially, LTIP Units do not have full parity with common units with respect to liquidating distributions. However, if such parity is reached, vested LTIP Units may be converted into an equal number of common units of the Operating Partnership at any time. The awards generally vest over periods between two and four years.

Service-Based Restricted Stock Units**:** Service-based Restricted Stock Units, which vest over periods between two and four years, convert to shares of Digital Realty Trust, Inc.’s common stock upon vesting.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Market Performance-Based Awards (“the Performance Awards”)****: Market performance-based Class D units of the Operating Partnership and market performance-based Restricted Stock Units covering shares of Digital Realty Trust, Inc.’s common stock are eligible to be issued to officers and employees of the Company. The Performance Awards include market performance-based and time-based vesting criteria. The market performance-based criteria is the basis for determining the total number of units that qualify to be awarded (subject to time-based vesting). The market performance criterion compares the Company’s total shareholder return (“TSR”) relative to the MSCI US REIT Index (“RMS”) over a three-year period in order to determine the percentage of the total eligible pool of units that qualifies to be awarded. The awards then have a time-based vesting element that allows for 50% of the qualifying awards to vest in that same 3rd year and 50% of the qualifying awards in the subsequent year.

Vesting with respect to the market condition is measured based on the difference between Digital Realty Trust, Inc.’s TSR percentage and the TSR percentage of the RMS as is shown in the subsequent table.


			Market
	2019	2020 and 2021	Performance
	RMS Relative	RMS Relative	Vesting
Level	Market Performance	Market Performance	Percentage
Below Threshold Level	≤ -300 basis points	≤ -500 basis points	0	%
Threshold Level	-300 basis points	-500 basis points	25	%
Target Level	100 basis points	0 basis points	50	%
High Level	≥ 500 basis points	≥ 500 basis points	100	%

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

If the RMS Relative Market Performance falls between the levels specified in the prior table, the percentage of the award that will vest with respect to the market condition will be determined using straight-line linear interpolation between such levels.

Following the completion of the applicable Market Performance Period, the Compensation Committee made the following determinations regarding the vesting of these awards.

2019 Awards

	●	In January 2022, the RMS Relative Market Performance fell between the target and high level for the 2019 awards and accordingly, 239,436 Class D units and 70,721 Restricted Stock Units qualified for time-based vesting.

	●	The Class D units included 18,966 distribution equivalent units that immediately vested on December 31, 2021.

	●	On February 27, 2022, 50% of the 2019 awards will vest and the remaining 50% will vest on February 27, 2023, subject to continued employment through the applicable vesting date.

2018 Awards

	●	In January 2021, the high level of the performance metric was determined to have been achieved and, accordingly, 240,377 Class D units and 63,498 Restricted Stock Units qualified for time-based vesting.

	●	The Class D units included 20,725 distribution equivalent units that immediately vested on December 31, 2020.

	●	On February 27, 2021, 50% of the 2018 awards vested and the remaining 50% will vest on February 27, 2022, subject to continued employment through the applicable vesting date.

2017 Awards

	●	In January 2020, the RMS Relative Market Performance fell between the target and high level for the 2017 awards and, accordingly, 137,816 Class D units and 29,141 Restricted Stock Units qualified for time-based vesting.

	●	The Class D units included 10,971 distribution equivalent units that immediately vested on December 31, 2019.

	●	On February 27, 2020, 50% of the 2017 awards vested and the remaining 50% vested on February 27, 2021.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Fair Value of Market Performance-Based Awards

The fair values of the Performance Awards granted were measured using a Monte Carlo simulation to estimate the probability of the market vesting condition being satisfied. The Monte Carlo simulation is a probabilistic technique based on the underlying theory of the Black-Scholes formula, which was run for 100,000 trials to determine the fair value of the awards. For each trial, the payoff to an award is calculated at the settlement date and is then discounted to the grant date at a risk-free interest rate. The total expected value of the awards on the grant date was determined by multiplying the average value per award over all trials by the number of awards granted. Assumptions used in the valuations are summarized as follows:


	Expected Stock Price		Risk-Free Interest
Award Date	Volatility		Rate
January 1, 2019	23	%	2.44	%
February 21, 2019	23	%	2.48	%
February 19, 2020	22	%	1.39	%
February 20, 2020	22	%	1.35	%
January 1, 2021	27	%	0.17	%
February 25, 2021	26	%	0.31	%

The expected stock price volatility assumption is calculated based on our historical volatility, which is calculated over a period of time commensurate with the expected term of the awards being valued. The expected dividend yield assumption used in the Monte Carlo simulation represents the percent of return to a stock that is available to the holder of an award. Because the holders of the awards receive dividend equivalents, an expected dividend yield assumption of 0.00% was used in the valuation. These valuations were performed in a risk-neutral framework, and no assumption was made with respect to an equity risk premium.

The grant date fair value of the Class D unit and RSU awards was approximately $25.0 million, $17.2 million and $22.3 million for the years ended years ended December 31, 2021, 2020 and 2019, respectively. We will recognize compensation expense on a straight-line basis over the expected service period of approximately four years.

The aggregate intrinsic value of the Class D unit and RSU awards that vested in 2021, 2020 and 2019 was $28.6 million, $24.3 million and $32.7 million, respectively.

Other Items**:** In addition to the LTIP Units, service-based Restricted Stock Units and Performance Awards described above, one-time grants of time and/or performance-based Class D units and Restricted Stock Units were issued in connection with the Interxion Combination. These awards vest over a period of two and three years based on continued service and/or the attainment of performance metrics related to successful integration of the Interxion business.

As of December 31, 2021, approximately 5.6 million shares of common stock, including awards that can be converted to or exchanged for shares of common stock, remained available for future issuance under the Incentive Plan.

Each LTIP unit and each Class D unit issued under the Incentive Plan counts as one share of common stock for purposes of calculating the limit on shares that may be issued under the Incentive Plan and the individual award limits set forth therein.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Below is a summary of compensation expense and unearned compensation (in millions):


																	Expected
																	period to
	Deferred Compensation												Unearned Compensation				recognize
	Expensed						Capitalized						As of		As of		unearned
	Year Ended December 31,						Year Ended December 31,						December 31,		December 31,		compensation
Type of incentive award	2021		2020		2019		2021		2020		2019		2021		2020		(in years)
Long-term incentive units	$	15.4	$	12.8	$	8.7	$	0.2	$	0.2	$	0.2	$	19.8	$	15.1	2.5
Performance-based awards		23.9		24.8		13.0		0.7		0.6		0.8		39.2		34.4	1.1
Service-based restricted stock units		23.2		15.1		11.5		3.3		3.2		2.8		44.5		41.5	2.4
Interxion awards		17.7		19.7		—		—		—		—		8.5		27.2	1.8

The following table sets forth the weighted-average fair value of for each type of incentive award at the date of grant for the years ended December 31, 2021, 2020 and 2019:


	Weighted Average Fair Value at Date of Grant
Type of incentive award	2021		2020		2019
Long-term incentive units	$	132.66	$	134.55	$	116.22
Performance-based awards		137.69		159.34		114.97
Restricted stock		129.52		138.82		115.25
Interxion awards		—		120.67		—

Activity for LTIP Units and service-based Restricted Stock Units for the year ended December 31, 2021 is shown below.


		Weighted-Average		Weighted-Average		Aggregate
		Grant Date Fair		Remaining Contractual		Intrinsic Value
Unvested Long-term Incentive Units	Units	Value		Life (Years)		(in thousands)
Unvested, beginning of period	235,535	$	122.22
Granted	151,093		139.08
Vested	(134,284)		121.63
Cancelled or expired	(1,876)		128.38
Unvested, end of period	250,468	$	132.66		1.97	$	44,300

(1)	The intrinsic value is calculated based on the market value of our common stock as of December 31, 2021.

The grant date fair values, which equal the market price of Digital Realty Trust, Inc. common stock on the applicable grant date(s), are being expensed on a straight-line basis for service awards between two and four years, the current vesting periods of the long-term incentive units.

The aggregate intrinsic value of long-term incentive units that vested in 2021, 2020 and 2019 was $17.5 million, $11.6 million and $5.7 million, respectively. As of December 31, 2021, we had approximately 0.9 million long-term incentive units that were outstanding and exercisable with an aggregate intrinsic value of approximately $159.4 million (based on the market price of our common stock as of December 31, 2021).

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020


		Weighted-Average		Weighted-Average			Aggregate
		Grant Date Fair		Remaining Contractual			Intrinsic Value (1)
Unvested Restricted Stock	Shares	Value		Life (Years)			(in thousands)
Unvested, beginning of period	783,219	$	123.04
Granted	265,576		137.30
Vested	(475,702)		123.17
Cancelled or expired	(63,724)		129.62
Unvested, end of period	509,369	$	129.52		2.20	$	90,092

(1)	The intrinsic value is calculated based on the market value of our common stock as of December 31, 2021.

The grant date fair values, which equal the market price of Digital Realty Trust, Inc. common stock on the grant date, are expensed on a straight-line basis for service awards over the vesting period of the restricted stock, which is generally four years.

The aggregate intrinsic value of restricted stock that vested in 2021, 2020 and 2019 was $59.0 million, $53.4 million and $14.0 million, respectively.

Interxion Equity Plans

On March 9, 2020, in connection with the Interxion Combination, certain outstanding awards granted under various Interxion equity plans were assumed by Digital Realty Trust, Inc. and converted into adjusted equity-based awards of Digital Realty Trust, Inc. common stock in accordance with the terms of the Purchase Agreement for the Interxion Combination. All such awards will continue to be governed by the terms of the applicable Interxion equity plan and underlying award agreement evidencing the award. Approximately 0.6 million shares of Digital Realty Trust, Inc. common stock are registered and issuable pursuant to such awards. The impact of these plans is included in the tables above.

Defined Contribution Plans

We have a 401(k) plan whereby our U.S. employees may contribute a portion of their compensation to their respective retirement accounts, in an amount not to exceed the maximum allowed under the Code. The 401(k) plan complies with Internal Revenue Service requirements as a 401(k) safe harbor plan whereby matching contributions made by us are 100% vested. The aggregate cost of our contributions to the 401(k) plan was approximately $5.9 million, $5.5 million, and $5.2 million for the years ended December 31, 2021, 2020 and 2019, respectively. In addition, Interxion has a defined contribution pension plan for most of its employees. Contributions are made in accordance with the terms of such defined contribution pension plan and are expensed as incurred.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Derivative Instruments

We had no outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk as of December 31, 2021. The table below shows outstanding amounts as of December 31, 2020 (in thousands):


Notional Amount							Fair Value at Significant Other
As of							As of
December 31,			Type of	Strike	Effective	Expiration	December 31,
2020			Derivative	Rate	Date	Date	2020 (3)
$	104,000	(1)	Swap	1.435	Jan 15, 2016	Jan 15, 2023	$	(2,773)
	77,352	(2)	Swap	0.779	Jan 15, 2016	Jan 15, 2021		(9)
$	181,352						$	(2,782)

(1)	Represents debt which bears interest based on one-month U.S. LIBOR.

(2)	Represents debt which bears interest based on one-month CDOR. Translation to U.S. dollars is based on exchange rates of $0.79 to 1.00 CAD as of December 31, 2021 and $0.79 to 1.00 CAD as of December 31, 2020.

(3)	Balance recorded in other assets in the consolidated balance sheets if positive and recorded in accounts payable and other accrued liabilities in the consolidated balance sheets if negative.

On December 13, 2021, in connection with the paydown of our secured note due March 2023, we terminated interest rate swap agreements with notional amounts in the aggregate of $104.0 million and, as a result of the termination, the accumulated fair value of the interest rate swap will be ratably reclassified from accumulated other comprehensive income to interest expense on the accompanying consolidated income statement over the original term of the interest rate swap. On September 24, 2020, in connection with the paydown of our Term Loan maturing in 2023, we terminated interest rate swap agreements with notional amounts in the aggregate of $300.0 million, as a result of the termination, the accumulated fair value of the interest rate swap was reclassified from accumulated other comprehensive income to interest expense on the accompanying consolidated income statement, which resulted in a realized loss of approximately $6.4 million for the year ended December 31, 2020.

Amounts reported in accumulated other comprehensive loss related to interest rate swaps are reclassified to interest expense as interest payments are made on our debt. As of December 31, 2021, we had no interest rate swap agreements outstanding.

Credit-risk related contingent features – Upon entering into derivatives, we would have agreements with each of our derivative counterparties that contain a provision where we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to our default on the indebtedness. As of December 31, 2021, we did not have any derivatives outstanding.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Fair Value of Financial Instruments

We disclose fair value information for all financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practicable to estimate fair value. Considerable judgment is necessary to interpret market data in order to estimate the fair value of financial instruments. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts.

The carrying amounts for cash and cash equivalents, restricted cash, accounts and other receivables, accounts payable and other accrued liabilities, accrued dividends and distributions, security deposits and prepaid rents approximate fair value because of the short-term nature of these instruments. The carrying value of our global revolving credit facilities and unsecured term loans approximates estimated fair value, because these liabilities have variable interest rates and our credit ratings have remained stable. Differences between the carrying value and fair value of our unsecured senior notes and secured and other debt are caused by differences in interest rates or borrowing spreads that were available to us on December 31, 2021 and 2020 as compared to those in effect when the debt was issued or assumed. As described in Note 16. "Derivative Instruments", outstanding derivative contracts are recorded at fair value.

We calculate the fair value of our secured and other debt, unsecured term loans and unsecured senior notes based on currently available market rates assuming the loans are outstanding through maturity and considering the collateral and other loan terms. In determining the current market rate for fixed rate debt, a market spread is added to the quoted yields on federal government treasury securities with similar maturity dates to our debt.

The aggregate estimated fair value and carrying value of our global revolving credit facilities, unsecured term loans, unsecured senior notes and secured debt as of the respective periods is shown below (in thousands):


	Categorization	As of December 31, 2021				As of December 31, 2020
	under the fair value	Estimated Fair				Estimated Fair
	hierarchy	Value		Carrying Value		Value		Carrying Value
Global revolving credit facilities	Level 2	$	415,116	$	415,116	$	540,184	$	540,184
Unsecured term loans	Level 2		—		—		537,470		537,470
Unsecured senior notes (1)	Level 2		13,580,262		13,000,042		13,359,960		12,096,029
Secured and other debt (1)	Level 2		152,511		147,082		242,051		239,326
		$	14,147,889	$	13,562,240	$	14,679,665	$	13,413,009

(1)	Valuations for our unsecured senior notes and secured debt are determined based on the expected future payments discounted at risk-adjusted rates and quoted market prices.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020

Commitments and Contingencies

Construction Commitments – Our properties require periodic investments of capital for tenant-related capital

expenditures and for general capital improvements and from time to time in the normal course of our business, we

enter into various construction contracts with third parties that may obligate us to make payments. At

December 31, 2021, we had open commitments, including amounts reimbursable of approximately $37.8

million, related to construction contracts of approximately $1.3 billion.

Legal Proceedings – Although the Company is involved in legal proceedings arising in the ordinary course of business, as of December 31, 2021, the Company is not currently a party to any legal proceedings nor, to its knowledge, is any legal proceeding threatened against it that it believes would have a material adverse effect on its financial position, results of operations or liquidity_._

20. Supplemental Cash Flow Information

Cash, cash equivalents, and restricted cash balances as of December 31, 2021, 2020, and 2019:


	Balance as of
(Amounts in thousands)	December 31, 2021		December 31, 2020		December 31, 2019
Cash and cash equivalents	$	142,698	$	108,501	$	89,817
Restricted cash (included in other assets)		8,787		15,151		7,436
Total	$	151,485	$	123,652	$	97,253

We paid $274.7 million, $301.9 million and $312.8 million for interest, net of amounts capitalized, for the year ended December 31, 2021, 2020 and 2019, respectively. During the years ended December 31, 2021, 2020 and 2019, we capitalized interest of approximately $53.5 million, $47.3 million and $40.2 million, respectively. During the years ended December 31, 2021, 2020 and 2019, we capitalized amounts relating to compensation and other overhead expense of employees direct and incremental to construction activities of approximately $71.2 million, $53.7 million and $46.5 million, respectively.

We paid $29.9 million, $20.1 million and $14.6 million for income taxes, net of refunds, for the year ended December 31, 2021, 2020 and 2019, respectively.

Accrued construction related costs totaled $423.9 million, $358.7 million and $197.7 million as of December 31, 2021, 2020 and 2019, respectively.

21. Segment and Geographic Information

A majority of the Company’s largest customers are global entities that transact with the Company across multiple geographies worldwide. In order to better address the needs of these global customers, the Company manages critical decisions around development, operations, and leasing globally based on customer demand considerations. In this regard, the Company manages customer relationships on a global basis in order to achieve consistent sales and delivery experience of our products for our customers throughout the global portfolio. In order to best accommodate the needs of global customers (and customers that might one day become global), the Company manages its operations as a single global business – with one operating segment and therefore one reporting segment.

Index to Financial Statements

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

December 31, 2021 and 2020


	Operating Revenues									Investments in Real Estate
	Year Ended December 31,									As of December 31,
(Amounts in billions)	2021			2020			2019			2021		2020
Inside the United States	$	2.8		$	2.6		$	2.6		$	11.2	$	11.3
Outside the United States		1.7			1.3			0.6			9.6		9.3
Revenue Outside of US %		37.5	%		33.3	%		19.5	%

Net Assets in Foreign Operations										$	3.9	$	5.7

Subsequent Events

On January 18, 2022, Digital Intrepid Holding B.V., an indirect wholly owned holding and finance subsidiary of the Operating Partnership through which the Interxion business is held, issued and sold €750.0 million aggregate principal amount of 1.375% Guaranteed Notes due 2032 (the “2032 Notes”). The 2032 Notes are senior unsecured obligations of Digital Intrepid Holding B.V. and are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and the Operating Partnership. Net proceeds from the offering were approximately €737.5 million (approximately $835.3 million based on the exchange rate on January 18, 2022) after deducting managers’ discounts and estimated offering expenses.

On February 3, 2022 (the “Redemption Date”), the Operating Partnership redeemed the $450.0 million aggregate principal amount outstanding of its 4.750% Notes due 2025 (the “4.750% Notes”). The redemption price for the 4.750% Notes was equal to the sum of (a) $1,110.36 per $1,000 principal amount of the 4.750% Notes, or 111.036% of the aggregate principal amount of the 4.750% Notes, plus (b) accrued and unpaid interest to, but excluding, the Redemption Date equal to $16.097222 per $1,000 principal amount of the 4.750% Notes. The redemption will result in an early extinguishment charge of approximately $51.1 million during the three months ended March 31, 2022.

Index to Financial Statements

DIGITAL REALTY TRUST, INC.

DIGITAL REALTY TRUST, L.P.

SCHEDULE III

PROPERTIES AND ACCUMULATED DEPRECIATION

December 31, 2021

(In thousands)


						Costs capitalized
			Initial costs			subsequent to acquisition		Total costs				Accumulated	Date of
				Acquired					Acquired			depreciation	acquisition
	Data Center			ground	Buildings and		Carrying		ground	Buildings and		and	or
	Buildings	Encumbrances	Land	lease	improvements	Improvements	costs	Land	lease	improvements	Total	amortization	construction
North American Markets
Northern Virginia	22	—	167,482	—	1,505,807	2,425,628	—	169,594	—	3,929,324	4,098,917	(1,054,422)	2005 - 2019
Chicago	10	—	95,444	—	1,320,334	978,734	—	105,830	—	2,288,682	2,394,512	(713,781)	2005 - 2017
Dallas	21	—	66,489	—	338,284	1,029,363	—	58,900	—	1,375,236	1,434,136	(593,222)	2002 - 2015
Silicon Valley	15	—	129,702	—	842,693	460,102	—	128,467	—	1,304,030	1,432,497	(472,565)	2002 - 2018
New York	13	—	17,301	—	474,561	869,968	—	17,042	—	1,344,788	1,361,830	(642,992)	2002 - 2015
Phoenix	2	—	11,859	—	399,122	364,640	—	11,859	—	763,762	775,621	(358,072)	2006 - 2015
San Francisco	4	—	41,165	—	358,066	294,954	—	41,478	—	652,707	694,185	(248,208)	2004 - 2015
Seattle	1	135,000	43,110	—	329,283	11,518	—	43,110	—	340,801	383,911	(23,736)	2020
Toronto	2	—	26,600	—	116,863	234,412	—	21,059	—	356,816	377,875	(26,836)	2013 - 2017
Boston	3	—	17,826	—	253,711	97,041	—	16,600	—	351,977	368,578	(153,349)	2006 - 2011
Portland	2	—	1,689	—	3,131	360,909	—	6,058	—	359,671	365,729	(51,916)	2011 - 2015
Atlanta	4	—	6,537	—	264,948	72,563	—	6,552	—	337,495	344,048	(97,069)	2011 - 2017
Los Angeles	2	—	29,531	—	105,910	119,398	—	28,139	—	226,700	254,839	(122,663)	2004 - 2015
Houston	6	—	6,965	—	23,492	149,517	—	6,594	—	173,380	179,974	(101,507)	2006
Austin	1	—	1,177	—	4,877	71,557	—	1,177	—	76,433	77,611	(22,769)	2005
Miami	2	—	2,964	—	29,793	37,061	—	2,964	—	66,854	69,818	(31,421)	2002 - 2015
Minneapolis	1	—	10,190	—	20,054	3,191	—	10,190	—	23,245	33,435	(6,840)	2013
Charlotte	3	—	4,117	—	13,068	14,090	—	4,118	—	27,157	31,275	(16,140)	2005 - 2015
North America - Other	—	—	—	—	—	106,447	—	—	—	106,447	106,447	(30,821)
Total North America	114	135,000	680,148	—	6,403,997	7,701,094	—	679,732	—	14,105,506	14,785,239	(4,768,329)

EMEA Markets
London	16	—	101,397	7,355	1,423,194	494,928	—	55,252	6,627	1,964,995	2,026,874	(574,017)	2007 - 2020
Amsterdam	13	—	40,709	—	968,935	167,171	—	37,470	—	1,139,345	1,176,815	(142,010)	2005 - 2020
Frankfurt	27	—	31,260	—	876,342	758,004	—	84,739	—	1,580,867	1,665,606	(137,960)	2015 - 2020
Dublin	8	—	11,722	1,444	89,597	245,952	—	7,797	94	340,823	348,715	(107,260)	2006 - 2020
Paris	10	—	45,722	—	355,386	273,431	—	51,178	—	623,362	674,540	(34,628)	2012 - 2020
Marseille	4	—	1,121	—	220,737	184,558	—	1,113	—	405,303	406,417	(29,615)	2020
Vienna	2	—	14,159	—	364,949	(8,304)	—	13,497	—	357,306	370,803	(34,337)	2020
Zurich	3	—	20,605	—	48,325	164,248	—	21,638	—	211,540	233,178	(13,047)	2020
Stockholm	6	—	—	—	93,861	46,861	—	—	—	140,721	140,721	(13,305)	2020
Madrid	4	—	8,456	—	134,817	(1,281)	—	7,493	—	134,499	141,992	(12,277)	2020
Copenhagen	3	—	11,665	—	107,529	(45,398)	—	1,506	—	72,290	73,796	(8,567)	2020
Brussels	4	—	3,874	—	118,034	2,148	—	3,693	—	120,363	124,056	(10,410)	2020

Index to Financial Statements

DIGITAL REALTY TRUST, INC.

DIGITAL REALTY TRUST, L.P.

SCHEDULE III

PROPERTIES AND ACCUMULATED DEPRECIATION- (Continued)

December 31, 2021

(In thousands)

Dusseldorf	3	—	—	—	30,093	19,186	—	—	—	49,279	49,279	(4,088)	2020
Europe - Other	4	—	3,144	—	43,046	213,663	—	35,912	—	223,941	263,317	(18,079)	2020
Africa - Other	4	—	—	—	—	14,884	—	3,464	—	11,421	11,421	(791)	2020
Total EMEA	111	—	293,834	8,799	4,874,844	2,530,051	—	324,752	6,721	7,376,055	7,707,528	(1,140,393)

APAC Markets
Singapore	3	—	—	—	137,545	670,836	—	—	—	808,381	808,381	(218,953)	2010 - 2015
Sydney	4	—	18,285	—	3,868	117,478	—	12,056	—	127,575	139,631	(34,263)	2011 - 2012
Melbourne	2	—	4,467	—	—	107,597	—	3,183	—	108,881	112,064	(44,093)	2011
Hong Kong	1	—	—	—	—	56,822	—	—	—	56,822	56,822	(1)	2021
Asia Pacific - Other	2	—	—	—	—	15,785	—	—	—	15,785	15,785	(4,250)
Total APAC	12	—	22,752	—	141,413	968,518	—	15,239	—	1,117,445	1,132,683	(301,559)
Total Portfolio	237	135,000	996,734	8,799	11,420,254	11,199,663	—	1,019,723	6,721	22,599,006	23,625,450	(6,210,281)

Index to Financial Statements

DIGITAL REALTY TRUST, INC.

DIGITAL REALTY TRUST, L.P.

SCHEDULE III

PROPERTIES AND ACCUMULATED DEPRECIATION

December 31, 2021

(In thousands)

(1) Tax Cost

The aggregate gross cost of the Company’s properties for federal income tax purposes approximated $35.2 billion (unaudited) as of December 31, 2021.

(2) Historical Cost and Accumulated Depreciation and Amortization

The following table reconciles the historical cost of the Company’s properties for financial reporting purposes for each of the years in the three-year period ended December 31, 2021.


	Year Ended December 31,
	2021		2020		2019
Balance, beginning of year	$	23,142,988	$	16,886,592	$	17,055,016
Additions during period (acquisitions and improvements)		1,570,162		6,514,218		833,836
Deductions during period (dispositions, impairments and assets held for sale)		(1,087,700)		(257,822)		(1,002,260)
Balance, end of year	$	23,625,450	$	23,142,988	$	16,886,592

The following table reconciles accumulated depreciation and amortization of the Company’s properties for financial reporting purposes for each of the years in the three-year period ended December 31, 2021.


	Year Ended December 31,
	2021		2020		2019
Balance, beginning of year	$	5,555,221	$	4,536,169	$	3,935,267
Additions during period (depreciation and amortization expense)		1,042,011		1,029,863		805,916
Deductions during period (dispositions and assets held for sale)		(386,951)		(10,811)		(205,014)
Balance, end of year	$	6,210,281	$	5,555,221	$	4,536,169

Schedules other than those listed above are omitted because they are not applicable or the information required is included in the consolidated financial statements or the notes thereto.

Index to Financial Statements

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