Cover and table of contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

​

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

​

For the quarterly period ended March 31, 2023

​

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

​

For the Transition Period From to .

​

Commission file number 001-32336 (Digital Realty Trust, Inc.)

000-54023 (Digital Realty Trust, L.P.)

DIGITAL REALTY TRUST, INC.

DIGITAL REALTY TRUST, L.P.

(Exact name of registrant as specified in its charter)

​

​	​	​	​
​	​	​	​
Maryland (Digital Realty Trust, Inc.)			26-0081711
Maryland (Digital Realty Trust, L.P.)		​	20-2402955
(State or other jurisdiction of		​	(IRS employer
incorporation or organization)		​	identification number)
​
5707 Southwest Parkway, Building 1, Suite 275
Austin**,** Texas 78735
(Address of principal executive offices)

​

(737) 281-0101

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

​

Title of each class		Trading symbol(s)		Name of each exchange on which registered	​
Common Stock	​	DLR	​	New York Stock Exchange	​
Series J Cumulative Redeemable Preferred Stock	​	DLR Pr J	​	New York Stock Exchange	​
Series K Cumulative Redeemable Preferred Stock	​	DLR Pr K	​	New York Stock Exchange	​
Series L Cumulative Redeemable Preferred Stock	​	DLR Pr L	​	New York Stock Exchange	​

​

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

​

​	​	​
Digital Realty Trust, Inc.		Yes ⌧ No ◻
Digital Realty Trust, L.P.	​	Yes ⌧ No ◻

​

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

​

​	​	​
Digital Realty Trust, Inc.		Yes ⌧ No ◻
Digital Realty Trust, L.P.	​	Yes ⌧ No ◻

​

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

​

Digital Realty Trust, Inc.:

​

​	​	​
Large accelerated filer ⌧		Accelerated filer ◻
​	​	​
Non-accelerated filer ◻	​	Smaller reporting company ☐
​	​	​
​	​	Emerging growth company ☐

​

Digital Realty Trust, L.P.:

​

​	​	​
Large accelerated filer ◻		Accelerated filer ◻
​	​	​
Non-accelerated filer ⌧	​	Smaller reporting company ☐
​	​	​
​	​	Emerging growth company ☐

​

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

​

​	​	​
Digital Realty Trust, Inc.		◻
Digital Realty Trust, L.P.	​	◻

​

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

​

​	​	​
Digital Realty Trust, Inc.		Yes ☐ No ⌧
Digital Realty Trust, L.P.	​	Yes ☐ No ⌧

​

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

​

Digital Realty Trust, Inc.:

​

​
​
Class		Outstanding at May 1, 2023
Common Stock, $.01 par value per share	​	291,347,088

​

​

​

​

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EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the quarter ended March 31, 2023 of Digital Realty Trust, Inc., a Maryland corporation, and Digital Realty Trust, L.P., a Maryland limited partnership, of which Digital Realty Trust, Inc. is the sole general partner. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “we,” “us,” “our,” “our Company”, or “the Company” refer to Digital Realty Trust, Inc. together with its consolidated subsidiaries, including Digital Realty Trust, L.P. In statements regarding qualification as a REIT, such terms refer solely to Digital Realty Trust, Inc. Unless otherwise indicated or unless the context requires otherwise, all references to the “Parent” refer to Digital Realty Trust, Inc., and all references to “our Operating Partnership,” “the Operating Partnership” or “the OP” refer to Digital Realty Trust, L.P. together with its consolidated subsidiaries.

The Parent is a real estate investment trust, or REIT, and the sole general partner of the OP. As of March 31, 2023, the Parent owned an approximate 97.8% common general partnership interest in Digital Realty Trust, L.P. The remaining approximate 2.2% of the common limited partnership interests of Digital Realty Trust, L.P. are owned by non-affiliated third parties and certain directors and officers of the Parent. As of March 31, 2023, the Parent owned all of the preferred limited partnership interests of Digital Realty Trust, L.P. As the sole general partner of Digital Realty Trust, L.P., the Parent has the full, exclusive and complete responsibility for the OP’s day-to-day management and control.

We believe combining the quarterly reports on Form 10-Q of the Parent and the OP into this single report results in the following benefits:

	●	enhancing investors’ understanding of the Parent and the OP by enabling investors to view the business as a whole in the same manner as management views and operates the business;

	●	eliminating duplicative disclosure and providing a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Parent and the OP; and

	●	creating time and cost efficiencies through the preparation of one combined report instead of two separate reports.

It is important to understand the few differences between the Parent and the OP in the context of how we operate the Company. The Parent does not conduct business itself, other than acting as the sole general partner of the OP and issuing public equity from time to time and guaranteeing certain unsecured debt of the OP and certain of its subsidiaries and affiliates. The OP holds substantially all the assets of the business, directly or indirectly. The OP conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from equity issuances by the Parent, which are generally contributed to the OP in exchange for partnership units, the OP generates capital required by the business through the OP’s operations, incurrence of indebtedness and issuance of partnership units to third parties.

The presentation of noncontrolling interests, stockholders’ equity and partners’ capital are the main areas of difference between the consolidated financial statements of the Parent and those of the OP. The differences in the presentations between stockholders’ equity and partners’ capital result from the differences in the equity and capital issuances in the Parent and in the OP.

To highlight the differences between the Parent and the OP, separate sections in this report, as applicable, individually discuss the Parent and the OP, including separate financial statements and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure of the Parent and the OP, this report refers to actions or holdings as being actions or holdings of the Company.

As general partner with control of the OP, the Parent consolidates the OP for financial reporting purposes, and it does not have significant assets other than its investment in the OP. Therefore, the assets and liabilities of the Parent and the OP are the same on their respective condensed consolidated financial statements. The separate discussions of the Parent and the OP in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company.

DIGITAL REALTY TRUST, INC. AND DIGITAL REALTY TRUST, L.P.

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2023

TABLE OF CONTENTS

​	​	Page Number
PART I.	FINANCIAL INFORMATION	​
​	​	​
ITEM 1.	Condensed Consolidated Financial Statements of Digital Realty Trust, Inc.:	​
​	​	​
​	Condensed Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022 (unaudited)	4
​	​	​
​	Condensed Consolidated Income Statements for the three months ended March 31, 2023 and 2022 (unaudited)	5
​	​	​
​	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2023 and 2022 (unaudited)	6
​	​	​
​	Condensed Consolidated Statement of Equity for the three months ended March 31, 2023 and 2022 (unaudited)	7
​	​	​
​	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022 (unaudited)	9
​	​	​
​	Condensed Consolidated Financial Statements of Digital Realty Trust, L.P.:	​
​	​	​
​	Condensed Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022 (unaudited)	10
​	​	​
​	Condensed Consolidated Income Statements for the three months ended March 31, 2023 and 2022 (unaudited)	11
​	​	​
​	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2023 and 2022 (unaudited)	12
​	​	​
​	Condensed Consolidated Statement of Capital for the three months ended March 31, 2023 and 2022 (unaudited)	13
​	​	​
​	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022 (unaudited)	15
​	​	​
​	Notes to Condensed Consolidated Financial Statements of Digital Realty Trust, Inc. and Digital Realty Trust, L.P. (unaudited)	16
​	​	​
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
​	​	​
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	54
​	​	​
ITEM 4.	Controls and Procedures (Digital Realty Trust, Inc.)	55
​	​	​
​	Controls and Procedures (Digital Realty Trust, L.P.)	56
​	​	​
PART II.	OTHER INFORMATION	57
​	​	​
ITEM 1.	Legal Proceedings	57
​	​	​
ITEM 1A.	Risk Factors	57
​	​	​
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
​	​	​
ITEM 3.	Defaults Upon Senior Securities	57
​	​	​
ITEM 4.	Mine Safety Disclosures	57
​	​	​
ITEM 5.	Other Information	57
​	​	​
ITEM 6.	Exhibits	58
​	​	​
​	Signatures	62

​

​

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except per share data)

​

​	​	​	​	​	​	​
​		March 31,			December 31,
​	​	2023		​	2022
ASSETS	​	​	​	​	​	​
Investments in real estate:	​	​	​	​	​	​
Investments in properties, net	​	$	24,209,605	​	$	23,774,662
Investments in unconsolidated entities	​		1,995,576	​		1,991,426
Net investments in real estate	​		26,205,181	​		25,766,088
Operating lease right-of-use assets, net	​	​	1,317,293	​	​	1,351,329
Cash and cash equivalents	​		131,406	​		141,773
Accounts and other receivables, net	​		1,070,066	​		969,292
Deferred rent, net	​		627,700	​		601,590
Goodwill	​		9,199,636	​		9,208,497
Customer relationship value, deferred leasing costs and intangibles, net	​		3,015,291	​	​	3,092,627
Other assets	​		386,494	​		353,802
Total assets	​	$	41,953,067	​	$	41,484,998
LIABILITIES AND EQUITY	​	​	​	​	​	​
Global revolving credit facilities, net	​	$	2,514,202	​	$	2,150,451
Unsecured term loans, net	​		1,542,275	​		797,449
Unsecured senior notes, net of discount	​		13,258,079	​		13,120,033
Secured and other debt, including premiums	​		560,955	​		528,870
Operating lease liabilities	​	​	1,443,994	​	​	1,471,044
Accounts payable and other accrued liabilities	​		1,923,819	​		1,868,885
Deferred tax liabilities, net	​	​	1,164,276	​	​	1,192,752
Accrued dividends and distributions	​		—	​		363,716
Security deposits and prepaid rents	​		392,021	​		369,654
Total liabilities	​		22,799,621	​		21,862,854
​	​	​	​	​	​	​
Redeemable noncontrolling interests		​	1,448,772		​	1,514,679
Commitments and contingencies	​	​	​	​	​	​
Equity:	​	​	​	​	​	​
Stockholders’ Equity:	​	​	​	​	​	​
Preferred Stock: $0.01 par value per share, 110,000 shares authorized; $755,000 liquidation preference ($25.00 per share), 30,200 shares issued and outstanding as of March 31, 2023 and December 31, 2022		​	731,690		​	731,690
Common Stock: $0.01 par value per share, 392,000 shares authorized; 291,299 and 291,148 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		​	2,888		​	2,887
Additional paid-in capital		​	22,126,379		​	22,142,868
Accumulated dividends in excess of earnings		​	(4,995,982)		​	(4,698,313)
Accumulated other comprehensive loss, net		​	(652,486)		​	(595,798)
Total stockholders’ equity		​	17,212,489		​	17,583,334
Noncontrolling interests		​	492,185		​	524,131
Total equity		​	17,704,674		​	18,107,465
Total liabilities and equity	​	$	41,953,067	​	$	41,484,998

​

​

See accompanying notes to the condensed consolidated financial statements.

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENTS

(unaudited, in thousands, except per share data)

​

​	​	​	​	​	​	​
​	​	Three Months Ended March 31,
​		2023			2022
Operating Revenues:	​	​	​	​	​	​
Rental and other services	​	$	1,329,968	​	$	1,121,550
Fee income and other	​		8,755	​		5,772
Total operating revenues	​		1,338,723	​		1,127,322
Operating Expenses:	​	​	​	​	​	​
Rental property operating and maintenance	​		571,225	​		435,593
Property taxes and insurance	​		44,779	​		50,224
Depreciation and amortization	​		421,198	​		382,132
General and administrative	​		111,920	​		98,513
Transactions and integration	​		12,267	​		11,968
Other	​		—	​		7,657
Total operating expenses	​		1,161,389	​		986,087
Operating income	​		177,334	​		141,235
Other Income (Expenses):	​	​	​	​	​	​
Equity in earnings of unconsolidated entities	​		14,897	​		60,958
Gain on disposition of properties, net	​	​	—	​	​	2,770
Other income, net	​		280	​		3,051
Interest expense	​		(102,220)	​		(66,725)
Loss from early extinguishment of debt	​		—	​		(51,135)
Income tax expense	​		(21,454)	​		(13,244)
Net income	​		68,837	​		76,910
Net income attributable to noncontrolling interests	​		(111)	​		(3,629)
Net income attributable to Digital Realty Trust, Inc.	​		68,726	​		73,281
Preferred stock dividends	​		(10,181)	​		(10,181)
Net income available to common stockholders	​	$	58,545	​	$	63,100
Net income per share available to common stockholders:	​	​	​	​	​	​
Basic	​	$	0.20	​	$	0.22
Diluted	​	$	0.20	​	$	0.22
Weighted average common shares outstanding:	​	​	​	​	​	​
Basic	​		291,219	​		284,526
Diluted	​		303,065	​		285,025

​

​

See accompanying notes to the condensed consolidated financial statements.

​

​

​

​

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in thousands)

​

​	​	​	​	​	​	​
​	​	Three Months Ended March 31,
​		2023			2022
Net income	​	$	68,837	​	$	76,910
Other comprehensive income (loss):	​	​	​	​	​	​
Foreign currency translation adjustments	​		(112,076)	​		(13,877)
Increase (decrease) in fair value of derivatives	​		572	​		(1,344)
Reclassification to interest expense from derivatives	​		(6,543)	​		(103)
Other comprehensive loss	​	​	(118,047)	​	​	(15,324)
Comprehensive (loss) income	​		(49,210)	​		61,586
Comprehensive loss (income) attributable to noncontrolling interests	​		62,087	​		(3,269)
Comprehensive income attributable to Digital Realty Trust, Inc.	​	$	12,877	​	$	58,317

​

​

See accompanying notes to the condensed consolidated financial statements.

​

​

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

​

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(unaudited, in thousands, except share data)

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	Accumulated		​	Accumulated		​	​	​	​	​	​
​	​	Redeemable		​	​	​	​	Number of	​	​	​	​	Additional		​	Dividends in		​	Other		​	​		​	​	​
​	​	Noncontrolling		​	Preferred		​	Common	​	Common		​	Paid-in		​	Excess of		​	Comprehensive		​	Noncontrolling		​	​	​
Three Months Ended March 31, 2023		Interests			Stock			Shares		Stock			Capital			Earnings			Loss, Net			Interests			Total Equity
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balance as of December 31, 2022		$	1,514,679	​	$	731,690		291,148,222	​	$	2,887	​	$	22,142,868	​	$	(4,698,313)	​	$	(595,798)	​	$	524,131	​	$	18,107,465
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Conversion of common units to common stock	​		—	​	​	—	​	6,201	​	​	—	​	​	474	​	​	—	​	​	—	​	​	(474)	​	​	—
Vesting of restricted stock, net	​		—	​	​	—	​	90,306	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
Common stock offering costs	​		—	​	​	—	​	—	​	​	—	​	​	(441)	​	​	—	​	​	—	​	​	—	​	​	(441)
Shares issued under equity plans, net of share settlement to satisfy tax withholding upon vesting	​		—	​	​	—	​	53,881	​	​	1	​	​	(1,613)	​	​	—	​	​	—	​	​	—	​	​	(1,612)
Amortization of unearned compensation regarding share based awards	​		—	​	​	—	​	—	​	​	—	​	​	17,502	​	​	—	​	​	—	​	​	—	​	​	17,502
Reclassification of vested share based awards	​		—	​	​	—	​	—	​	​	—	​	​	(33,556)	​	​	—	​	​	—	​	​	33,556	​	​	—
Adjustment to redeemable noncontrolling interests	​		(306)	​	​	—	​	—	​	​	—	​	​	306	​	​	—	​	​	—	​	​	—	​	​	306
Dividends declared on preferred stock	​	​	—	​	​	—	​	—	​	​	—	​	​	—	​	​	(10,181)	​	​	—	​	​	—	​	​	(10,181)
Dividends and distributions on common stock and common and incentive units	​	​	(190)	​	​	—	​	—	​	​	—	​	​	—	​	​	(356,214)	​	​	—	​	​	(7,675)	​	​	(363,889)
Contributions from (distributions to) noncontrolling interests	​		129	​	​	—	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	4,552	​	​	4,552
Deconsolidation of noncontrolling interests in consolidated entities	​	​	—	​	​	—	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	(65,358)	​	​	(65,358)
Net income	​	​	(2,288)	​	​	—	​	—	​	​	—	​	​	—	​	​	68,726	​	​	—	​	​	2,399	​	​	71,125
Other comprehensive income (loss)	​	​	(63,252)	​	​	—	​	—	​	​	—	​	​	839	​	​	—	​	​	(56,688)	​	​	1,054	​	​	(54,795)
Balance as of March 31, 2023		$	1,448,772	​	$	731,690		291,298,610	​	$	2,888	​	$	22,126,379	​	$	(4,995,982)	​	$	(652,486)	​	$	492,185	​	$	17,704,674

​

​

See accompanying notes to the condensed consolidated financial statements.

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

​

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(unaudited, in thousands, except share data)

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	Accumulated		​	Accumulated		​	​	​	​	​	​
​	​	Redeemable		​	​	​	​	Number of	​	​	​	​	Additional		​	Dividends in		​	Other		​	​		​	​	​
​	​	Noncontrolling		​	Preferred		​	Common	​	Common		​	Paid-in		​	Excess of		​	Comprehensive		​	Noncontrolling		​	​	​
Three Months Ended March 31, 2022		Interests			Stock			Shares		Stock			Capital			Earnings			Loss, Net			Interests			Total Equity
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balance as of December 31, 2021		$	46,995	​	$	731,690		284,415,013	​	$	2,824	​	$	21,075,863	​	$	(3,631,929)	​	$	(173,880)	​	$	472,219	​	$	18,476,787
Conversion of common units to common stock	​		—	​	​	—		14,861	​	​	—	​	​	1,258	​	​	—	​		—	​		(1,258)	​	​	—
Vesting of restricted stock, net	​		—	​	​	—		194,020	​	​	—	​	​	—	​	​	—	​		—	​		—	​	​	—
Payment of offering costs and other	​		—	​	​	—		—	​	​	—	​	​	(4,024)	​	​	—	​		—	​		—	​	​	(4,024)
Units issued under equity plans, net of unit settlement to satisfy tax withholding upon vesting	​		—	​	​	—		42,188	​	​	—	​	​	(1,193)	​	​	—	​		—	​		—	​	​	(1,193)
Amortization of unearned compensation on share-based awards	​	​	—	​	​	—		—	​	​	—	​	​	18,545	​	​	—	​		—	​		—	​	​	18,545
Reclassification of vested share-based awards	​	​	—	​	​	—		—	​	​	—	​	​	(26,531)	​	​	—	​		—	​		26,531	​	​	—
Adjustment to redeemable noncontrolling interests	​		(5,473)	​	​	—		—	​	​	—	​	​	5,473	​	​	—	​		—	​		—	​	​	5,473
Dividends declared on preferred stock	​	​	—	​	​	—	​	—	​	​	—	​	​	—	​	​	(10,181)	​	​	—	​	​	—	​	​	(10,181)
Dividends and distributions on common stock and common and incentive units	​	​	(190)	​	​	—	​	—	​	​	—	​	​	—	​	​	(348,025)	​	​	—	​	​	(7,786)	​	​	(355,811)
Contributions from noncontrolling interests	​		1,367	​	​	—		—	​	​	—	​	​	—	​	​	—	​		—	​		17,559	​	​	17,559
Net income	​		35	​	​	—		—	​	​	—	​	​	—	​	​	73,281	​		—	​		3,594	​	​	76,875
Other comprehensive income (loss)	​	​	—	​	​	—		—	​	​	—	​	​	—	​	​	—	​	​	(14,964)	​	​	(360)	​	​	(15,324)
Balance as of March 31, 2022		$	42,734	​	$	731,690		284,666,082	​	$	2,824	​	$	21,069,391	​	$	(3,916,854)	​	$	(188,844)	​	$	510,499	​	$	18,208,706

​

See accompanying notes to the condensed consolidated financial statements.

​

​

​

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

​

​	​	​	​	​	​	​
​	​	Three Months Ended March 31,
​		2023			2022
Cash flows from operating activities:	​	​			​	​
Net income	​	$	68,837	​	$	76,910
Adjustments to reconcile net income to net cash provided by operating activities:	​	​	​	​	​	​
Gain on disposition of properties, net	​		—	​		(2,770)
Equity in earnings of unconsolidated entities	​		(14,897)	​		(60,958)
Distributions from unconsolidated entities	​		28,904	​		14,419
Depreciation and amortization	​	​	421,198	​		382,132
Amortization of share-based compensation	​		17,502	​		18,545
Loss from early extinguishment of debt	​		—	​		51,135
Straight-lined rents and amortization of above and below market leases	​		(18,971)	​		(1,048)
Amortization of deferred financing costs and debt discount / premium	​	​	5,409	​		4,972
Other items, net	​	​	(3,880)	​		14,499
Changes in assets and liabilities:	​	​	​	​	​	—
Increase in accounts receivable and other assets	​	​	(141,958)	​		(168,789)
Decrease in accounts payable and other liabilities	​	​	(12,418)	​		(51,362)
Net cash provided by operating activities	​		349,726	​	​	277,685
Cash flows from investing activities:	​	​	​	​	​	​
Improvements to investments in real estate	​	​	(738,677)	​	​	(518,734)
Cash paid for business combination / asset acquisitions, net of cash acquired	​	​	(57,001)	​	​	(20,133)
Proceeds from (investment in) unconsolidated entities, net	​	​	52,991	​	​	(150,196)
Other investing activities, net	​	​	(6,320)	​	​	(30,029)
Net cash used in investing activities	​		(749,007)	​		(719,092)
Cash flows from financing activities:	​	​	​	​	​	​
Net proceeds from credit facilities	​	​	345,150	​	​	551,022
Borrowings on secured / unsecured debt	​	​	790,962	​	​	1,125,318
Repayments on secured / unsecured debt	​	​	(3,081)	​	​	(450,000)
Premium paid for early extinguishment of debt	​	​	—	​	​	(49,662)
Capital contributions from noncontrolling interests, net	​		4,681	​		18,926
Payments of dividends and distributions	​	​	(737,976)	​	​	(704,911)
Other financing activities, net	​	​	(8,828)	​	​	(12,397)
Net cash provided by financing activities	​		390,908	​		478,296
Net (decrease) increase in cash, cash equivalents and restricted cash	​		(8,373)	​		36,889
Effect of exchange rate changes on cash, cash equivalents and restricted cash	​		(693)	​		(20,035)
Cash, cash equivalents and restricted cash at beginning of period	​		150,696	​		151,485
Cash, cash equivalents and restricted cash at end of period	​	$	141,630	​	$	168,339

​

​

See accompanying notes to the condensed consolidated financial statements.

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except per unit data)

​

​	​	​	​	​	​	​
​		March 31,			December 31,
​	​	2023		​	2022
ASSETS	​		​	​		​
Investments in real estate:		​			​
Investments in properties, net	​	$	24,209,605	​	$	23,774,662
Investments in unconsolidated entities	​		1,995,576	​		1,991,426
Net investments in real estate	​		26,205,181	​		25,766,088
Operating lease right-of-use assets, net	​	​	1,317,293	​	​	1,351,329
Cash and cash equivalents	​		131,406	​		141,773
Accounts and other receivables, net	​		1,070,066	​		969,292
Deferred rent, net	​		627,700	​		601,590
Goodwill	​		9,199,636	​		9,208,497
Customer relationship value, deferred leasing costs and intangibles, net	​		3,015,291	​		3,092,627
Other assets	​		386,494	​		353,802
Total assets	​	$	41,953,067	​	$	41,484,998
LIABILITIES AND CAPITAL	​			​
Global revolving credit facilities, net	​	$	2,514,202	​	$	2,150,451
Unsecured term loans, net	​	​	1,542,275	​	​	797,449
Unsecured senior notes, net	​		13,258,079	​		13,120,033
Secured and other debt, including premiums	​	​	560,955	​	​	528,870
Operating lease liabilities	​	​	1,443,994	​	​	1,471,044
Accounts payable and other accrued liabilities	​		1,923,819	​		1,868,885
Deferred tax liabilities, net	​	​	1,164,276	​	​	1,192,752
Accrued dividends and distributions	​		—	​		363,716
Security deposits and prepaid rents	​		392,021	​		369,654
Total liabilities	​		22,799,621	​		21,862,854
​	​	​	​	​	​	​
Redeemable noncontrolling interests	​	​	1,448,772	​	​	1,514,679
Commitments and contingencies		​	​		​	​
Capital:		​			​
Partners’ capital:		​			​
General Partner:		​			​
Preferred units, $755,000 liquidation preference ($25.00 per unit), 30,200 units issued and outstanding as of March 31, 2023 and December 31, 2022		​	731,690		​	731,690
Common units, 291,299 and 291,148 units issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		​	17,133,285		​	17,447,442
Limited Partners, 6,462 and 6,289 units issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		​	463,817		​	436,942
Accumulated other comprehensive loss		​	(671,460)		​	(613,423)
Total partners’ capital		​	17,657,332		​	18,002,651
Noncontrolling interests in consolidated entities		​	47,342		​	104,814
Total capital		​	17,704,674		​	18,107,465
Total liabilities and capital	​	$	41,953,067	​	$	41,484,998

​

​

See accompanying notes to the condensed consolidated financial statements.

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENTS

(unaudited, in thousands, except per unit data)

​

​	​	​	​	​	​	​
​	​	Three Months Ended March 31,
​		2023			2022
Operating Revenues:		​			​
Rental and other services	​	$	1,329,968	​	$	1,121,550
Fee income and other	​		8,755	​		5,772
Total operating revenues	​		1,338,723	​		1,127,322
Operating Expenses:	​			​
Rental property operating and maintenance	​		571,225	​		435,593
Property taxes and insurance	​		44,779	​		50,224
Depreciation and amortization	​		421,198	​		382,132
General and administrative	​		111,920	​		98,513
Transactions and integration	​		12,267	​		11,968
Other	​		—	​		7,657
Total operating expenses	​		1,161,389	​		986,087
Operating income	​		177,334	​		141,235
Other Income (Expenses):	​		​	​	​	​
Equity in earnings (loss) of unconsolidated entities	​		14,897	​		60,958
Gain on disposition of properties, net	​	​	—	​	​	2,770
Other income, net	​		280	​		3,051
Interest expense	​		(102,220)	​		(66,725)
Loss from early extinguishment of debt	​	​	—	​	​	(51,135)
Income tax expense	​		(21,454)	​		(13,244)
Net income	​		68,837	​		76,910
Net (loss) income attributable to noncontrolling interests	​		1,389	​		(2,029)
Net income attributable to Digital Realty Trust, L.P.	​		70,226	​		74,881
Preferred units distributions	​		(10,181)	​		(10,181)
Net income available to common unitholders	​	$	60,045	​	$	64,700
Net income per unit available to common unitholders:	​			​
Basic	​	$	0.20	​	$	0.22
Diluted	​	$	0.20	​	$	0.22
Weighted average common units outstanding:	​			​
Basic	​		297,180	​		290,163
Diluted	​		309,026	​		290,662

​

​

See accompanying notes to the condensed consolidated financial statements.

​

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in thousands)

​

​	​	​	​	​	​	​
​	​	Three Months Ended March 31,
​		2023			2022
Net income	​	$	68,837	​	$	76,910
Other comprehensive income (loss):	​			​
Foreign currency translation adjustments	​		(112,076)	​		(13,877)
Increase (decrease) in fair value of derivatives	​		572	​		(1,344)
Reclassification to interest expense from derivatives	​		(6,543)	​		(103)
Other comprehensive loss	​	​	(118,047)	​	​	(15,324)
Comprehensive loss (income) income attributable to Digital Realty Trust, L.P.	​	$	(49,210)	​	$	61,586
Comprehensive loss (income) attributable to noncontrolling interests	​		62,238	​		(2,029)
Comprehensive income attributable to Digital Realty Trust, L.P.	​	$	13,028	​	$	59,557

​

​

See accompanying notes to the condensed consolidated financial statements.

​

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CAPITAL

(unaudited, in thousands, except unit data)

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	Accumulated		​	​		​	​	​
​	​	Redeemable		​	General Partner									​	Limited Partners				​	Other		​	​		​	​	​
​	​	Noncontrolling		​	Preferred Units				​	Common Units				​	Common Units				​	Comprehensive		​	Noncontrolling		​	​	​
Three Months Ended March 31, 2023		Interests			Units		Amount			Units		Amount			Units		Amount			Loss, Net			Interests			Total Capital
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balance as of December 31, 2022		$	1,514,679	​	30,200,000	​		731,690	​	291,148,222	​		17,447,442		6,288,669	​		436,942	​		(613,423)	​		104,814	​		18,107,465
Conversion of limited partner common units to general partner common units	​		—	​	—	​		—	​	6,201	​		474		(6,201)	​		(474)	​		—	​		—	​		—
Vesting of restricted common units, net	​		—	​	—	​		—	​	90,306	​		—		—	​		—	​		—	​		—	​		—
Common unit offering costs	​	​	—	​	—	​		—	​	—	​		(440)		—	​		—	​		—	​		—	​		(440)
Issuance of limited partner common units, net	​		—	​	—	​		—	​	—	​		—		179,689	​		—	​		—	​		—	​		—
Units issued under equity plans, net of unit settlement to satisfy tax withholding upon vesting	​		—	​	—	​		—	​	53,881	​		(1,613)		—	​		—	​		—	​		—	​		(1,613)
Amortization of share-based compensation	​		—	​	—	​		—	​	—	​		17,502		—	​		—	​		—	​		—	​		17,502
Reclassification of vested share-based awards	​		—	​	—	​		—	​	—	​		(33,556)		—	​		33,556	​		—	​		—	​		—
Adjustment to redeemable partnership units	​		(306)	​	—	​		—	​	—	​		306		—	​		—	​		—	​		—	​		306
Distributions	​		(190)	​	—	​		(10,181)	​	—	​		(356,214)		—	​		(7,675)	​		—	​		—	​		(374,070)
Contributions from noncontrolling interests in consolidated entities	​	​	129	​	—	​		—	​	—	​		—		—	​		—	​		—	​		4,552	​		4,552
Deconsolidation of noncontrolling interests in consolidated entities	​		—	​	—	​		—	​	—	​		—		—	​		—	​		—	​		(65,358)	​		(65,358)
Net income	​		(2,288)	​	—	​		10,181	​	—	​		58,545		—	​		1,468	​		—	​		931	​		71,125
Other comprehensive income (loss)	​	​	(63,252)	​	—	​	​	—	​	—	​	​	839	​	—	​	​	—	​	​	(58,037)	​	​	2,403	​	​	(54,795)
Balance as of March 31, 2023		$	1,448,772	​	30,200,000	​	$	731,690	​	291,298,610	​	$	17,133,285		6,462,157	​	$	463,817	​	$	(671,460)	​	$	47,342	​	$	17,704,674

​

​

See accompanying notes to the condensed consolidated financial statements.

​

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CAPITAL

(unaudited, in thousands, except unit data)

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	Accumulated		​	​		​	​	​
​	​	Redeemable		​	General Partner									​	Limited Partners				​	Other		​	​		​	​	​
​	​	Noncontrolling		​	Preferred Units				​	Common Units				​	Common Units				​	Comprehensive		​	Noncontrolling		​	​	​
Three Months Ended March 31, 2022		Interests			Units		Amount			Units		Amount			Units		Amount			Loss, Net			Interests			Total Capital
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
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
Conversion of limited partner common units to general partner common units	​		—	​	—	​		—	​	14,861	​		1,258		(14,861)	​		(1,258)	​		—	​		—	​		—
Vesting of restricted common units, net	​		—	​	—	​		—	​	194,020	​		—		—	​		—	​		—	​		—	​		—
Payment of common unit offering costs and other	​		—	​	—	​		—	​	—	​		(4,024)		373,555	​		—	​		—	​		—	​		(4,024)
Units issued under equity plans, net of unit settlement to satisfy tax withholding upon vesting	​		—	​	—	​		—	​	42,188	​		(1,193)		—	​		—	​		—	​		—	​		(1,193)
Amortization of share-based compensation	​		—	​	—	​		—	​	—	​		18,545		—	​		—	​		—	​		—	​		18,545
Reclassification of vested share-based awards	​		—	​	—	​		—	​	—	​		(26,531)		—	​		26,531	​		—	​		—	​		—
Adjustment to redeemable partnership units	​		(5,473)	​	—	​		—	​	—	​		5,473		—	​		—	​		—	​		—	​		5,473
Distributions	​	​	(190)	​	—	​		—	​	—	​		(358,206)		—	​		(7,786)	​		—	​		—	​		(365,992)
Contributions from noncontrolling interests in consolidated entities	​		1,367	​	—	​	​	—	​	—	​	​	—	​	—	​	​	—	​	​	—	​	​	17,559	​	​	17,559
Net income	​		35	​	—	​		—	​	—	​		73,281		—	​		1,565	​		—	​		2,029	​		76,875
Other comprehensive income (loss)	​		—	​	—	​		—	​	—	​		—		—	​		—	​		(15,324)	​		—	​		(15,324)
Balance as of March 31, 2022		$	42,734	​	30,200,000	​	$	731,690	​	284,666,082	​	$	17,155,361	​	6,290,465	​	$	451,954	​	$	(196,769)	​	$	66,470	​	$	18,208,706

​

See accompanying notes to the condensed consolidated financial statements.

​

​

​

​

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

​

​	​	​	​	​	​	​
​	​	Three Months Ended March 31,
​	​	2023			2022
Cash flows from operating activities:	​	​			​
Net income	​	$	68,837	​	$	76,910
Adjustments to reconcile net income to net cash provided by operating activities:	​	​	​	​	​	​
Gain on disposition of properties, net	​		—	​		(2,770)
Equity in earnings of unconsolidated entities	​		(14,897)	​		(60,958)
Distributions from unconsolidated entities	​		28,904	​		14,419
Depreciation and amortization	​	​	421,198	​	​	382,132
Amortization of share-based compensation	​		17,502	​		18,545
Loss from early extinguishment of debt	​		—	​		51,135
Straight-lined rents and amortization of above and below market leases	​		(18,971)	​		(1,048)
Amortization of deferred financing costs and debt discount / premium	​	​	5,409	​	​	4,972
Other items, net	​	​	(3,880)	​	​	14,499
Changes in assets and liabilities:	​	​	​	​	​	—
Increase in accounts receivable and other assets	​	​	(141,958)	​	​	(168,789)
Decrease in accounts payable and other liabilities	​		(12,418)	​		(51,362)
Net cash provided by operating activities	​	​	349,726	​	​	277,685
Cash flows from investing activities:	​		​	​	​	​
Improvements to investments in real estate	​	​	(738,677)	​	​	(518,734)
Cash paid for business combination / asset acquisitions, net of cash acquired	​	​	(57,001)	​	​	(20,133)
Proceeds from (investment in) unconsolidated entities, net	​		52,991	​	​	(150,196)
Other investing activities, net	​	​	(6,320)	​	​	(30,029)
Net cash used in investing activities	​	​	(749,007)	​	​	(719,092)
Cash flows from financing activities:	​	​	​	​	​	​
Net proceeds from credit facilities	​	​	345,150	​	​	551,022
Borrowings on secured / unsecured debt	​	​	790,962	​	​	1,125,318
Repayments on secured / unsecured debt	​		(3,081)	​	​	(450,000)
Premium paid for early extinguishment of debt	​	​	—	​	​	(49,662)
Capital contributions from noncontrolling interests, net	​		4,681	​	​	18,926
Payments of dividends and distributions	​		(737,976)	​	​	(704,911)
Other financing activities, net	​		(8,828)	​	​	(12,397)
Net cash provided by financing activities	​		390,908	​		478,296
Net (decrease) increase in cash, cash equivalents and restricted cash	​		(8,373)	​		36,889
Effect of exchange rate changes on cash, cash equivalents and restricted cash	​	​	(693)	​		(20,035)
Cash, cash equivalents and restricted cash at beginning of period	​	​	150,696	​		151,485
Cash, cash equivalents and restricted cash at end of period	​	$	141,630	​	$	168,339

​

​

See accompanying notes to the condensed consolidated financial statements.

​

​

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

1. General

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 U.S. federal income tax purposes.

​

The Parent’s only material asset is its ownership of partnership interests of the OP. 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, the OP generally 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.

​

Accounting Principles and Basis of Presentation. The accompanying unaudited interim condensed consolidated financial statements and accompanying notes (the “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 Financial Statements. All material intercompany transactions with consolidated entities have been eliminated. In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair statement of the results for the interim periods presented. Interim results are not always indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”), as filed with the U.S. Securities and Exchange Commission (“SEC”) and other filings with the SEC.

​

Management Estimates and Assumptions. U.S. GAAP requires us to 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.

​

New Accounting Pronouncements. Recently issued accounting pronouncements that have yet to be adopted by the Company are not expected to have a material impact to the condensed consolidated financial statements.

​

​

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

2. Investments in Properties

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

​

​	​	​	​	​	​	​	​
Property Type	​	As of March 31, 2023		​	​	As of December 31, 2022
Land	​	$	1,096,898	​	​	$	1,061,408
Acquired ground lease	​	​	6,132	​	​	​	6,006
Buildings and improvements	​	​	25,154,186	​	​	​	24,287,103
Tenant improvements	​	​	794,806	​	​	​	781,540
​	​	​	27,052,022	​	​	​	26,136,057
Accumulated depreciation and amortization	​	​	(7,600,559)	​	​	​	(7,268,981)
Investments in operating properties, net	​	​	19,451,463	​	​	​	18,867,076
Construction in progress and space held for development	​	​	4,563,578	​	​	​	4,789,134
Land held for future development	​	​	194,564	​	​	​	118,452
Investments in properties, net	​	$	24,209,605	​	​	$	23,774,662

​

​

3. Business Combinations

On August 1, 2022, we completed the acquisition of a 61.1% indirect controlling interest in Teraco, a leading carrier-neutral data center and interconnection services provider in South Africa (the “Teraco Acquisition”). The total purchase price was $1.7 billion cash, funded by our global revolving credit facility and partial settlement of our forward equity sale agreements described under Note 11. “Equity and Capital—Forward Equity Sale.” Teraco controls (and consolidates) the Teraco Connect Trust (“the Trust”) that was created as part of the Broad Based Black Economic Empowerment Program in South Africa. The Trust owns a 12% interest in Teraco’s primary operating company, however, because Teraco (and the Company) controls the Trust, the Trust is consolidated by Teraco (and the Company). If the Trust was not consolidated by Teraco, the Company’s ownership interest in Teraco would be approximately 55%.

Goodwill — The purchase price of the Teraco Acquisition exceeded the fair value of net tangible and intangible assets acquired and liabilities assumed by $1.6 billion. This amount was recorded as goodwill. We believe the strategic benefits of the acquisition support the value of goodwill recorded. Specifically, Teraco has numerous cross-connects, cloud on-ramps and data centers in addition to direct access to multiple subsea cables. The acquisition of Teraco added South Africa to the Company’s existing markets on the continent, including in Kenya, Mozambique, and Nigeria. The strategic importance of these markets has been enhanced by the recent and ongoing implementation of new subsea cable networks encircling Africa. When combined with the Company’s highly connected facilities in Marseille, France, and across EMEA, our customers now have a range of strategic connectivity hubs from which to serve all corners of the African market.

​

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

Redeemable Noncontrolling Interest (“Redeemable NCI”) — As part of the Teraco Acquisition, the Company and certain of its subsidiaries entered into a put/call agreement with the owners of the interest in Teraco that was not acquired by the Company (the “Put/Call Agreement”). The interest retained by these owners is hereafter referred to as the “Remaining Teraco Interest” and the owners of such interest are hereafter referred to as the “Rollover Shareholders”. Pursuant to the Put/Call Agreement, the Rollover Shareholders have the right to sell all or a portion of the Remaining Teraco Interest to the Company for a two-year period beginning on February 1, 2026, and the Company has the right to purchase all or a portion of the Remaining Teraco Interest from the Rollover Shareholders for a one-year period beginning on February 1, 2028. Per the terms of the agreement, the purchase price of the Remaining Teraco Interest for the put right and the call right can be settled by the Company with cash, shares in the Company, or a combination of cash and shares. In the event the Company elects to settle a put or call in whole or in part with shares of Digital Realty Trust, Inc.’s common stock, such shares will be issued in a private placement transaction with customary accompanying registration rights.

Since the Rollover Shareholders can redeem the put right at their discretion and such redemption, which could be in cash, is outside the Company’s control, the Company recorded the noncontrolling interest as Redeemable NCI and classified it in temporary equity within its condensed consolidated balance sheets. The Redeemable NCI was initially recorded at its acquisition-date fair value and will be adjusted each reporting period for income (or loss) attributable to the noncontrolling interest (a $2.3 million net loss for the three months ended March 31, 2023). If the contractual redemption value of the Redeemable NCI is greater than its carrying value, an adjustment is made to reflect Redeemable NCI at the higher of its contractual redemption value or its carrying value each reporting period. Changes to the redemption value are recognized immediately in the period the change occurs. If the redemption value of the Redeemable NCI is equal to or less than the fair market value of the Remaining Teraco Interest, the change in the redemption value will be adjusted through Additional Paid in Capital. If the redemption value is greater than the fair market value of the Remaining Teraco Interest, the change in redemption value will be adjusted through Retained Earnings. These adjustments are not reflected on the Company’s income statement, but are instead reflected as adjustments to the net income component of the Company’s earnings per share calculations. When calculating earnings per share attributable to Digital Realty Trust, Inc., the Company adjusts net income attributable to Digital Realty Trust, Inc. to the extent the redemption value exceeds the fair value of the Redeemable NCI on a cumulative basis. For the three months ended March 31, 2023, no such adjustment was required.

4. Leases

Lessor Accounting

We generate most of our revenue by leasing operating properties to customers under operating lease agreements. We recognize the total minimum lease payments provided for under the leases on a straight-line basis over the lease term if we determine that it is probable that substantially all of the lease payments will be collected over the lease term. Otherwise, rental revenue is recognized based on the amount contractually due. Generally, under the terms of our leases, some of our rental expenses, including common area maintenance, real estate taxes and insurance, are recovered from our customers. We record amounts reimbursed by customers in the period the applicable expenses are incurred, which is generally ratably throughout the term of the lease. Reimbursements are recognized in rental and other services revenue in the condensed consolidated income statements as we are the primary obligor with respect to purchasing and selecting goods and services from third-party vendors and bearing the associated credit risk.

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

Lessee Accounting

​

We lease space at certain of our data centers from third parties and certain equipment under noncancelable lease agreements. Leases for our data centers expire at various dates through 2069. As of March 31, 2023, certain of our data centers, primarily in Europe and Singapore, are subject to ground leases. As of March 31, 2023, the termination dates of these ground leases generally range from 2027 to 2108. In addition, our corporate headquarters along with several regional office locations are subject to leases with termination dates ranging from 2023 to 2041. 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 neither contain residual value guarantees nor 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 condensed consolidated income statements was approximately $38.4 million and $37.4 million for the three months ended March 31, 2023 and 2022, respectively.

​

5. Receivables

​

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 (net of an allowance for estimated uncollectible amounts) are shown in the subsequent table as Accounts receivable – trade, net. Other receivables shown separately from Accounts receivable – trade, net consist primarily of amounts that have not yet been billed to customers, such as for utility reimbursements and installation fees.

​

​	​	​	​	​	​	​
​	​	Balance as of		​	Balance as of
(Amounts in thousands):	​	March 31, 2023		​	December 31, 2022
Accounts receivable – trade	​	$	622,943	​	$	551,393
Allowance for doubtful accounts	​	​	(36,240)	​	​	(33,048)
Accounts receivable – trade, net	​	​	586,703	​	​	518,345
​	​	​	​	​	​	​
Accounts receivable – customer recoveries	​	​	216,854	​	​	170,012
Value-added tax receivables	​	​	143,048	​	​	167,459
Accounts receivable – installation fees	​	​	56,828	​	​	60,663
Other receivables	​	​	66,633	​	​	52,813
Accounts and other receivables, net	​	$	1,070,066	​	$	969,292

​

Deferred Rent Receivables

​

Deferred rent receivables represent 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):	​	March 31, 2023		​	December 31, 2022
Deferred rent receivables	​	$	638,416	​	$	612,439
Allowance for deferred rent receivables	​	​	(10,716)	​	​	(10,849)
Deferred rent receivables, net	​	$	627,700	​	$	601,590

​

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

6. Investments in Unconsolidated Entities

A summary of the Company’s investments in unconsolidated entities accounted for under the equity method of accounting is shown below (in thousands):

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Year	​	Metropolitan	​	​	​	​	Balance as of		​	Balance as of
Entity	​	Entity Formed	​	Area of Properties	​	% Ownership		​	​	March 31, 2023	​	​	December 31, 2022
Digital Core REIT (DCRU)	​	2021	​	U.S. / Toronto / Frankfurt	​	35	%	​	$	328,906	​	$	328,584
Ownership interest in DCRU operating properties	​	2021	​	U.S. / Toronto / Frankfurt	​	Various	​	​	​	135,789	​	​	136,431
Ascenty	​	2019	​	Brazil / Chile / Mexico	​	51	%	​	​	638,028	​	​	606,141
Mapletree	​	2019	​	Northern Virginia	​	20	%	​	​	156,780	​	​	160,200
Mitsubishi(1)	​	Various	​	Osaka / Tokyo	​	50	%	​		412,752	​		453,420
Lumen	​	2012	​	Hong Kong	​	50	%	​		69,352	​		68,821
Other	​	Various	​	U.S. / India / Nigeria	​	Various	​	​		253,969	​		237,829
Total	​	​	​		​		​	​	$	1,995,576	​	$	1,991,426

(1)

During the three months ended March 31, 2023, we derecognized all assets, liabilities and 50% noncontrolling interests related to a joint venture that was previously consolidated and recognized an equity method investment of approximately $61.9 million based on the value of our 50% noncontrolling interest in the joint venture. We had concluded that we would consolidate the joint venture during the development phase of the buildings because we had the power to direct activities that most significantly impacted the joint venture’s economic performance, however, upon the building’s completion and commencing the operational phase, we no longer have the power to direct the activities that most significantly impact the joint venture’s economic performance and deconsolidated the joint venture and recognized the investment under the equity method as we still retained significant influence.

​

DCREIT – Digital Core REIT is a standalone real estate investment trust formed under Singapore law, which is publicly-traded on the Singapore Exchange under the ticker symbol “DCRU”. Digital Core REIT owns 11 operating data center properties. The Company’s ownership interest in the units of DCRU, as well as its ownership interest in the operating properties of DCRU are collectively referred to as the Company’s investment in DCREIT.

​

As of March 31, 2023, the Company held 35% of the outstanding DCRU units and separately owned a 10% direct retained interest in the underlying North American operating properties and a 75% direct retained interest in the underlying German operating property.

​

The Company’s 35% interest in DCRU consisted of 399 million units and 396 million units as of March 31, 2023 and December 31, 2022, respectively. Based on the closing price per unit of $0.445 and $0.55 as of March 31, 2023 and December 31, 2022, respectively, the fair value of the units the Company owned in DCRU was approximately $178 million and $218 million as of March 31, 2023 and December 31, 2022, respectively.

​

These values do not include the value of the Company’s 10% interest in the North American operating properties and 75% interest in the German operating property of DCRU, because the associated ownership interests are not publicly traded. The Company accounts for its investment in DCREIT as an equity method investment (and not at fair value) based on the significant influence it is able to exert on DCREIT. The Company determined that the decline in fair value of the investment in DCRU as compared to the Company’s book basis as of March 31, 2023 was temporary in nature.

​

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

Pursuant to contractual agreements with DCRU and its operating properties, the Company will earn fees for asset and property management services as well as fees for aiding in future acquisition, disposition and development activities. Certain of these fees are payable to the Company in the form of additional units in DCRU or in cash. During the three months ended March 31, 2023 and 2022, the Company earned fees pursuant to these contractual agreements of approximately $2.3 million, which is recorded as fee income and other on the condensed consolidated income statement.

​

Ascenty – The Company’s ownership interest 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 $16 million and $18 million as of March 31, 2023 and December 31, 2022, 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.

​

Debt – The debt of our unconsolidated entities generally is non-recourse to us, except for customary exceptions pertaining to matters such as intentional misuse of funds, environmental conditions, and material misrepresentations.

​

7. 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 March 31, 2023 as compared to December 31, 2022 were primarily driven by changes in exchange rates associated with goodwill balances denominated in foreign currencies.

​

​

8. Acquired Intangible Assets and Liabilities

The following table summarizes our acquired intangible assets and liabilities:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Balance as of
​	​	March 31, 2023								​	December 31, 2022
(Amounts in thousands)	​	​	Gross Carrying Amount	​	​	Accumulated Amortization	​	​	Net Carrying Amount	​	​	Gross Carrying Amount	​	​	Accumulated Amortization	​	​	Net Carrying Amount
Customer relationship value	​	$	3,320,752	​	$	(939,935)	​	$	2,380,817	​	$	3,327,765	​	$	(888,105)	​	$	2,439,660
Acquired in-place lease value	​	​	1,366,645	​	​	(1,059,555)	​	​	307,090	​	​	1,369,526	​	​	(1,041,631)	​	​	327,895
Other	​	​	102,463	​	​	(29,616)	​	​	72,847	​	​	94,829	​	​	(26,788)	​	​	68,041
Acquired above-market leases	​	​	264,701	​	​	(255,832)	​	​	8,869	​	​	264,071	​	$	(253,693)	​	​	10,378
Acquired below-market leases	​	​	(344,842)	​	​	259,572	​	​	(85,270)	​	​	(344,256)	​	​	255,821	​	​	(88,435)

​

Amortization of customer relationship value, acquired in-place lease value and other intangibles (a component of depreciation and amortization expense) was approximately $68.5 million and $61.6 million for the three months ended March 31, 2023 and 2022, respectively.

​

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in an increase in rental and other services revenue of $1.7 million and $0.2 million for the three months ended March 31, 2023 and 2022, respectively.

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

Estimated annual amortization for each of the five succeeding years and thereafter, commencing April 1, 2023 is as follows:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
(Amounts in thousands)	​	Customer relationship value	​	​	Acquired in-place lease value	​	​	Other (1)	​	​	Acquired above-market leases	​	​	Acquired below-market leases
2023	$	149,594	​	$	47,726	​	$	3,529	​	$	3,249	​	$	(9,263)
2024		198,879	​		58,810	​		4,705	​		2,584	​		(11,232)
2025		198,336	​		55,773	​		4,665	​		1,452	​		(10,242)
2026		197,698	​		51,704	​		4,462	​		684	​		(8,671)
2027		197,306	​		41,308	​		4,447	​		214	​		(8,010)
Thereafter		1,439,004	​		51,769	​		4,820	​		686	​		(37,852)
Total	$	2,380,817	​	$	307,090	​	$	26,628	​	$	8,869	​	$	(85,270)

(1)	Excludes power grid rights in the amount of approximately $46.2 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.

​

​

9. 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 the Global Revolving Credit Facility and the Yen Revolving Credit Facility (together, referred to as the “Global Revolving Credit Facilities”), the unsecured term loans and the unsecured senior notes. A summary of outstanding indebtedness is as follows (in thousands):

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​		March 31, 2023						December 31, 2022
​	​	Weighted-		​	​	​	​	Weighted-		​	​	​
​	​	average		​	Amount		​	average		​	Amount
​	​	interest rate		​	Outstanding		​	interest rate		​	Outstanding
Global revolving credit facilities	​	4.04	%	​	$	2,531,056	​	3.04	%	​	$	2,167,889
Unsecured term loans	​	4.44	%	​	​	1,552,925	​	2.49	%	​	​	802,875
Unsecured senior notes	​	2.24	%	​	​	13,357,299	​	2.44	%	​	​	13,220,961
Secured and other debt	​	7.60	%	​		563,856	​	7.12	%	​		532,130
Total	​	2.85	%	​	$	18,005,136		2.68	%	​	$	16,723,855

​

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, along with cross-currency interest rate swaps, which effectively convert a portion of our U.S. dollar-denominated fixed-rate debt to foreign currency-denominated fixed-rate debt in order to hedge the currency exposure associated with our net investment in foreign subsidiaries.

​

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):

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	March 31, 2023					​	December 31, 2022
​	​	Amount		​	​	​	​	Amount		​	​	​
Denomination of Draw		Outstanding			% of Total		​	Outstanding			% of Total
U.S. dollar ($)	​	$	4,732,822		26.3	%	​	$	3,855,903		23.1	%
British pound sterling (£)		​	1,987,491		11.0	%	​	​	1,929,051	​	11.5	%
Euro (€)	​	​	9,500,925	​	52.8	%	​	​	9,325,126	​	55.8	%
Other	​	​	1,783,898	​	9.9	%	​	​	1,613,775	​	9.6	%
Total	​	$	18,005,136		​	​	​	$	16,723,855		​	​

​

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

The table below summarizes debt maturities and principal payments as of March 31, 2023 (in thousands):

​

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Global Revolving		​	Unsecured		​	Unsecured		​	Secured and		​	​	​
​		Credit Facilities (1)(2)			Term Loans(3)			Senior Notes			Other Debt			Total Debt
2023	​	$	—	​	$	—	​	$	109,235	​	$	6,254	​	$	115,489
2024	​	​	—	​	​	—	​	​	958,765	​	​	9,381	​	​	968,146
2025	​	​	—	​	​	1,552,925	​	​	1,198,015	​	​	—	​	​	2,750,940
2026		​	2,531,056		​	—		​	1,465,590		​	55,744		​	4,052,390
2027		​	—		​	—		​	1,163,853		​	135,000		​	1,298,853
Thereafter		​	—		​	—		​	8,461,841		​	357,477		​	8,819,318
Subtotal	​	$	2,531,056	​	$	1,552,925	​	$	13,357,299	​	$	563,856	​	$	18,005,136
Unamortized net discounts	​		—	​		—	​		(36,410)	​		—	​		(36,410)
Unamortized deferred financing costs	​	​	(16,854)	​	​	(10,650)	​	​	(62,810)	​	​	(2,901)	​	​	(93,215)
Total	​	$	2,514,202	​	$	1,542,275	​	$	13,258,079	​	$	560,955	​	$	17,875,511

(1)	Includes amounts outstanding for the Global Revolving Credit Facilities.

(2)	The Global Revolving Credit Facilities are subject to two six-month extension options exercisable by us.

(3)	A €375.0 million senior unsecured term loan facility is subject to two maturity extension options of one year each. Our U.S. term loan facility of $740 million is subject to one twelve-month extension, provided that the Operating Partnership must pay a 0.1875% extension fee based on the then-outstanding principal amount of the term loans.

​

Unsecured Senior Notes

​

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

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Aggregate Principal Amount at Issuance					​	​	​	Balance as of
​	​	Borrowing Currency		​	USD		​	Maturity Date	​	March 31, 2023		​	December 31, 2022
0.600% notes due 2023	​	CHF	100,000	​	$	108,310	​	Oct 02, 2023	​	$	109,235	​	$	108,121
2.625% notes due 2024	​	€	600,000	​	​	677,040	​	Apr 15, 2024	​	​	650,340	​	​	642,300
2.750% notes due 2024	​	£	250,000	​	​	324,925	​	Jul 19, 2024	​	​	308,425	​	​	302,075
4.250% notes due 2025	​	£	400,000	​	​	634,480	​	Jan 17, 2025	​	​	493,480	​	​	483,320
0.625% notes due 2025	​	€	650,000	​	​	720,980	​	Jul 15, 2025	​	​	704,535	​	​	695,825
2.500% notes due 2026	​	€	1,075,000	​	​	1,224,640	​	Jan 16, 2026	​	​	1,165,193	​	​	1,150,788
0.200% notes due 2026	​	CHF	275,000	​	​	298,404	​	Dec 15, 2026	​	​	300,397	​	​	297,331
1.700% notes due 2027	​	CHF	150,000	​	​	162,465	​	Mar 30, 2027	​	​	163,853	​	​	162,181
3.700% notes due 2027(1)	​	$	1,000,000	​	​	1,000,000	​	Aug 15, 2027	​	​	1,000,000	​	​	1,000,000
5.550% notes due 2028(1)	​	$	900,000	​	​	900,000	​	Jan 15, 2028	​	​	900,000	​	​	900,000
1.125% notes due 2028	​	€	500,000	​	​	548,550	​	Apr 09, 2028	​	​	541,950	​	​	535,250
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	​	​	294,936	​	​	291,925
3.600% notes due 2029	​	$	900,000	​	​	900,000	​	Jul 01, 2029	​	​	900,000	​	​	900,000
3.300% notes due 2029	​	£	350,000	​	​	454,895	​	Jul 19, 2029	​	​	431,795	​	​	422,905
1.500% notes due 2030	​	€	750,000	​	​	831,900	​	Mar 15, 2030	​	​	812,925	​	​	802,875
3.750% notes due 2030	​	£	550,000	​	​	719,825	​	Oct 17, 2030	​	​	678,535	​	​	664,565
1.250% notes due 2031	​	€	500,000	​	​	560,950	​	Feb 01, 2031	​	​	541,950	​	​	535,250
0.625% notes due 2031	​	€	1,000,000	​	​	1,220,700	​	Jul 15, 2031	​	​	1,083,900	​	​	1,070,500
1.000% notes due 2032	​	€	750,000	​	​	874,500	​	Jan 15, 2032	​	​	812,925	​	​	802,875
1.375% notes due 2032	​	€	750,000	​	​	849,375	​	Jul 18, 2032	​	​	812,925	​	​	802,875
​									​	$	13,357,299	​	$	13,220,961
Unamortized discounts, net of premiums				​	​	​	​	​	​	​	(36,410)	​	​	(37,280)
Deferred financing costs, net				​	​	​	​	​	​	​	(62,810)	​	​	(63,648)
Total unsecured senior notes, net of discount and deferred financing costs									​	$	13,258,079	​	$	13,120,033

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

(1)	Subject to cross-currency swaps.

​

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 March 31, 2023, 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 three months ended March 31, 2022: $51.1 million primarily due to redemption of the 4.750% Notes due 2025 in February 2022.

​

USD Term Loan Agreement

​

On October 25, 2022, the Company, the Operating Partnership, and certain of the Operating Partnership’s subsidiaries entered into an escrow agreement (the “Escrow Agreement”) with Bank of America, N.A., as administrative agent (the “Administrative Agent”), certain lenders (the “Lenders”), and Arnold & Porter Kaye Scholer LLP, as escrow agent (the “Escrow Agent”), pursuant to which the Operating Partnership, the Company, the Administrative Agent and the Lenders delivered executed signature pages to a new term loan agreement among the Operating Partnership, the Company, the Lenders and the Administrative Agent (the “Term Loan Agreement”) to be held in escrow by the Escrow Agent and released by the Escrow Agent upon satisfaction of the terms described in the Escrow Agreement. On January 9, 2023, the terms and conditions of the Escrow Agreement were satisfied, and, on such date, the Term Loan Agreement was deemed executed and became effective. The Term Loan Agreement provides for a $740 million senior unsecured term loan facility (the “Term Loan Facility”). The Term Loan Facility provides for borrowings in U.S. dollars. The Term Loan Facility will mature on March 31, 2025, subject to one twelve-month extension option at the Operating Partnership’s option; provided, that the Operating Partnership must pay a 0.1875% extension fee based on the then-outstanding principal amount of the term loans under the Term Loan Facility.

​

​

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

10. Earnings per Common Share or Unit

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

​

Digital Realty Trust, Inc. Earnings per Common Share

​	​	​	​	​	​	​
​	​	Three Months Ended March 31,
​		2023			2022
Numerator:	​	​	​	​	​	​
Net income available to common stockholders	​	$	58,545	​	$	63,100
Plus: Loss attributable to redeemable noncontrolling interest (1)	​	​	(2,320)	​	​	—
Net income available to common stockholders - diluted EPS	​	​	60,865	​	​	63,100
​	​	​	​	​	​	​
Denominator:	​	​	​	​	​	​
Weighted average shares outstanding—basic	​		291,219	​		284,526
Potentially dilutive common shares:	​			​		​
Unvested incentive units	​		176	​		348
Unvested restricted stock	​	​	27	​	​	91
Market performance-based awards	​		1	​		60
Redeemable noncontrolling interest shares (1)	​	​	11,644	​	​	—
Weighted average shares outstanding—diluted	​		303,065	​		285,025
Income per share:	​			​
Basic	​	$	0.20	​	$	0.22
Diluted	​	$	0.20	​	$	0.22

​

Digital Realty Trust, L.P. Earnings per Unit

​

​	​	​	​	​	​	​
​	​	Three Months Ended March 31,
​		2023			2022
Numerator:	​	​	​	​	​	​
Net income available to common unitholders	​	$	60,045	​	$	64,700
Plus: Loss attributable to redeemable noncontrolling interest (1)	​	​	(2,320)	​	​	—
Net income available to common unitholders - diluted EPS	​	​	62,365	​	​	64,700
​	​	​	​	​	​	​
Denominator:	​	​	​	​	​	​
Weighted average units outstanding—basic	​		297,180	​		290,163
Potentially dilutive common units:	​			​
Unvested incentive units	​		176	​		348
Unvested restricted units	​	​	27	​	​	91
Market performance-based awards	​		1	​		60
Redeemable noncontrolling interest shares (1)	​	​	11,644	​	​	—
Weighted average units outstanding—diluted	​		309,026	​		290,662
Income per unit:	​			​
Basic	​	$	0.20	​	$	0.22
Diluted	​	$	0.20	​	$	0.22

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

(1)

Pursuant to the Put/Call Agreement with the Rollover Shareholders who remained after the Teraco Acquisition, the Rollover Shareholders have a put right on the Remaining Interest of Teraco that can be settled by the Company in Digital Realty Trust, Inc. shares, in cash, or a combination of cash and shares. Under U.S. GAAP, diluted earnings per share must be reflected in a manner that assumes such put right was exercised at the beginning of the respective periods and settled entirely in shares. The amounts shown represent the redemption value of the Remaining Interest of Teraco divided by Digital Realty Trust, Inc.’s average share price for the respective periods. The put right is exercisable by the Rollover Shareholders for a two-year period commencing on February 1, 2026.

​

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 (in thousands).

​

​	​	​	​	​
​	​	Three Months Ended March 31,
​		2023		2022
Shares subject to Forward Equity Offering	​	—	​	6,250
Weighted average of Operating Partnership common units not owned by Digital Realty Trust, Inc.		5,961		7,552
Potentially dilutive Series J Cumulative Redeemable Preferred Stock		2,129		1,452
Potentially dilutive Series K Cumulative Redeemable Preferred Stock	​	2,239	​	1,527
Potentially dilutive Series L Cumulative Redeemable Preferred Stock	​	2,239	​	2,505
Total		12,568		19,286

​

​

11. Equity and Capital

Equity Distribution Agreement

Digital Realty Trust, Inc. and Digital Realty Trust, L.P. are parties to an ATM Equity OfferingSM Sales Agreement dated April 1, 2022, as amended by Amendment No. 1 to ATM Equity OfferingSM Sales Agreement dated March 16, 2023 (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 $1.5 billion through various named agents from time to time. For the three months ended March 31, 2023, we had no sales under the Sales Agreement and $1.5 billion is still available.

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 March 31, 2023 and December 31, 2022 (in thousands):

​

​	​	​	​	​	​	​	​	​	​	​
​	​	March 31, 2023				​	December 31, 2022
​	​	Number of	​	Percentage of		​	Number of	​	Percentage of
​		units		total		​	units		total
Digital Realty Trust, Inc.	​	291,299	​	97.8	%	​	291,148	​	97.9	%
Noncontrolling interests consist of:		​				​	​			​
Common units held by third parties		4,375		1.5	%	​	4,375		1.5	%
Incentive units held by employees and directors (see Note 13. "Incentive Plan")		2,087		0.7	%	​	1,914		0.6	%
​		297,761		100.0	%	​	297,437		100.0	%

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

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 condensed balance sheet.

The redemption value of the noncontrolling Operating Partnership common units and the vested incentive units was approximately $614.4 million and $591.2 million based on the closing market price of Digital Realty Trust, Inc. common stock on March 31, 2023 and December 31, 2022, respectively.

The following table shows activity for noncontrolling interests in the Operating Partnership for the three months ended March 31, 2023 (in thousands):

​	​	​	​	​	​	​
​ ​		Common Units		Incentive Units		Total
As of December 31, 2022		4,375		1,914		6,289
Conversion of incentive units held by employees and directors for shares of Digital Realty Trust, Inc. common stock (1)		—		(6)		(6)
Incentive units issued upon achievement of market performance condition		—		72		72
Grant of incentive units to employees and directors		—		142		142
Cancellation / forfeitures of incentive units held by employees and directors		—		(35)		(35)
As of March 31, 2023		4,375		2,087		6,462

(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.

​

Dividends and Distributions

Digital Realty Trust, Inc. Dividends

​

We have declared and paid the following dividends on our common and preferred stock for the three months ended March 31, 2023 (in thousands, except per share data):

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	Series J		​	Series K		​	Series L		​	​	​
​	​	​	​	Preferred		​	Preferred		​	Preferred		​	Common
Date dividend declared		Dividend payment date		Stock			Stock			Stock		​	Stock
February 22, 2023	​	March 31, 2023	​	$	2,625	​	$	3,071	​	$	4,485	​	$	356,214
Annual rate of dividend per share	​	​	​	$	1.31250	​	$	1.46250	​	$	1.30000	​	$	4.88000

​

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

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 three months ended March 31, 2023 (in thousands, except for per unit data):

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	Series J		​	Series K		​	Series L		​	​	​
​	​	​	​	Preferred		​	Preferred		​	Preferred		​	Common
Date distribution declared		Distribution payment date		Units			Units		​	Units		​	Units
February 22, 2023	​	March 31, 2023	​	$	2,625	​	$	3,071	​	$	4,485	​	$	364,204
Annual rate of distribution per unit	​	​	​	$	1.31250	​	$	1.46250	​	$	1.30000	​	$	4.88000

​

​

​

​

​

​

​

12. 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, 2022	​	$	(536,019)	​	$	(98,659)	​	$	38,880	​	$	(595,798)
Net current period change	​		(50,856)	​		559	​		—	​		(50,297)
Reclassification to interest expense from derivatives	​		—	​		(6,391)	​		—	​		(6,391)
Balance as of March 31, 2023	​	$	(586,875)	​	$	(104,491)	​	$	38,880	​	$	(652,486)

​

Digital Realty Trust, L.P.

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Foreign currency		​	Cash flow		​	Foreign currency net		​	Accumulated other
​	​	translation		​	hedge		​	investment hedge		​	comprehensive
​		adjustments			adjustments			adjustments			income (loss)
Balance as of December 31, 2022	​	$	(551,013)	​	$	(102,087)	​	$	39,677	​	$	(613,423)
Net current period change	​		(52,066)	​		572	​		—	​		(51,494)
Reclassification to interest expense from derivatives	​		—	​		(6,543)	​		—	​		(6,543)
Balance as of March 31, 2023	​	$	(603,079)	​	$	(108,058)	​	$	39,677	​	$	(671,460)

​

​

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

13. 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 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.

Performance-Based Awards (“the Performance Awards”): Performance-based Class D units of the Operating Partnership and performance-based Restricted Stock Units of Digital Realty Trust, Inc.’s common stock may be issued to officers and employees of the Company. The Performance Awards include performance-based and time-based vesting criteria. Depending on the type of award, the total number of units that qualify to fully vest is determined based on either a market performance criterion (“Market-Based Performance Awards”) or financial performance criterion (“Financial-Based Performance Awards”), in each case, subject to time-based vesting.

Market-Based Performance Awards.

The market performance criterion compares Digital Realty Trust, Inc.’s total shareholder return (“TSR”) relative to the MSCI US REIT Index (“RMS”) over a three-year performance period (“Market Performance Period”), subject to continued service, in order to determine the percentage of the total eligible pool of units that qualifies to be awarded. Following the completion of the Market Performance Period, the awards then have a time-based vesting element pursuant to which 50% of the performance-vested units fully vest in the February immediately following the end of the Market Performance Period and 50% of the performance-vested units fully vest in the subsequent February.

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 (the “RMS Relative Market Performance”).

​

​	​	​	​	​
​	​	​	Market
​	​	​	Performance
​	RMS Relative	​	Vesting
Level	Market Performance	​	Percentage
Below Threshold Level	≤ -500 basis points	​	0	%
Threshold Level	-500 basis points	​	25	%
Target Level	0 basis points	​	50	%
High Level	≥ 500 basis points	​	100	%

​

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

If the RMS Relative Market Performance falls between the levels specified in the above 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.

​

2020 Awards

	●	In January 2023, the RMS Relative Market Performance fell between the threshold and target levels for the 2020 awards and, accordingly, 72,230 Class D units and 7,083 Restricted Stock Units performance vested and qualified for time-based vesting.

	●	The Class D units included 5,841 distribution equivalent units that immediately vested on December 31, 2022.

	●	On February 27, 2023, 50% of the 2020 awards vested and the remaining 50% will vest on February 27, 2024, subject to continued employment through the applicable vesting date. ​

The grant date fair value of the Market-Based Performance Awards was approximately $8.2 million and $12.3 million for the three months ended March 31, 2023 and 2022, respectively. This amount will be recognized as compensation expense on a straight-line basis over the expected service period of approximately four years.

​

Financial-Based Performance Awards.

​

On March 4, 2022, the Company granted Financial-Based Performance Awards, based on growth in core funds from operation (“Core FFO”) during the three-year period commencing on January 1, 2022. The awards have a time-based vesting element consistent with the Market-Based Performance Awards discussed above. For these awards, fair value is based on market value on the date of grant and compensation cost is recognized based on the probable achievement of the performance condition at each reporting period. The grant date fair value of these awards is $12.3 million, based on Digital Realty Trust, Inc.’s closing stock price at the grant date.

​

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 Company’s combination with InterXion Holding N.V. 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 March 31, 2023, approximately 4.3 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.

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

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

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	Expected
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​		​	​		period to
​	​	Deferred Compensation											​	Unearned Compensation						recognize
​	​	Expensed					​	Capitalized					​	As of		​	As of			unearned
​		Three Months Ended March 31,												March 31,		​	December 31,			compensation
Type of incentive award		2023			2022			2023			2022			2023			2022			(in years)
Long-term incentive units	​	$	2.8	​	$	5.2	​	$	—	​	$	—	​	$	25.0	​	$	20.7		2.7
Performance-based awards	​		4.1	​		5.0	​		0.1	​		0.2	​		27.2	​		30.3		2.5
Service-based restricted stock units	​		7.7	​		5.3	​		1.1	​		1.0	​		92.7	​		55.4		3.1
Interxion awards	​	​	0.7	​	​	0.9	​	​	—	​	​	—	​	​	1.1	​	​	1.9	​	0.5

​

Activity for LTIP Units and service-based Restricted Stock Units for the three months ended March 31, 2023 is shown below.

​

​	​	​	​	​	​
​		​		Weighted-Average
​	​	​		Grant Date Fair
Unvested LTIP Units	​	Units		Value
Unvested, beginning of period		279,258	​	$	146.37
Granted		142,987	​		104.08
Vested		(133,494)	​		136.98
Cancelled or expired		(35,110)	​		158.96
Unvested, end of period		253,641	​	$	125.73

​

​	​	​	​	​	​
​	​	​	​	Weighted-Average
​	​	​		Grant Date Fair
Unvested Restricted Stock Units		Shares		Value
Unvested, beginning of period		507,837	​	$	131.57
Granted		461,875	​		102.83
Vested		(90,035)	​		122.23
Cancelled or expired		(18,366)	​		139.24
Unvested, end of period		861,311	​	$	116.97

​

​

14. Derivative Instruments

Derivatives Designated as Hedging Instruments

​

Net Investment Hedges

​

In September 2022, we entered into cross-currency interest rate swaps, which effectively convert a portion of our U.S. dollar-denominated fixed-rate debt to foreign currency-denominated fixed-rate debt in order to hedge the currency exposure associated with our net investment in foreign subsidiaries. As of March 31, 2023, we had cross-currency interest rate swaps outstanding with notional amounts of $1.55 billion and maturity dates ranging through 2028.

​

The effect of these net investment hedges on accumulated other comprehensive income and the condensed consolidated income statements for the three months ended March 31, 2023 and 2022 was as follows (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	Three Months Ended March 31,
​		​	​	​	2023			2022
Cross-currency interest rate swaps (included component) (1)				​	$	14,365	​	$	—
Cross-currency interest rate swaps (excluded component) (2)				​	​	(9,478)	​	​	—
Total	​	​	​	​	$	4,887	​	$	—

​

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	Three Months Ended March 31,
​	​	​	Location of gain or (loss)	​	2023			2022
Cross-currency interest rate swaps (excluded component) (2)	​	​	Interest expense	​	$	5,589	​	$	—

(1)	Included component represents foreign exchange spot rates.

(2)	Excluded component represents cross-currency basis spread and interest rates.

​

Cash Flow Hedges

​

We had no material outstanding derivatives designated as cash flow hedges as of March 31, 2023. 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 March 31, 2023, we had no material interest rate swap agreements outstanding.

Fair Value of Derivative Instruments

​

The subsequent table presents the fair value of derivative instruments recognized in our condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022 (in thousands):

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	March 31, 2023					​	December 31, 2022
​		Assets (1)			Liabilities (2)			Assets (1)			Liabilities (2)
Cross-currency interest rate swaps	​	$	—	​	$	113,508	​	$	—	​	$	108,621
Interest rate swaps	​	​	9,274	​	​	2,034	​	​	9,036	​	​	252
​	​	$	9,274	​	$	115,542	​	$	9,036	​	$	108,873

(1)	As presented in our condensed consolidated balance sheets within other assets.

(2)	As presented in our condensed consolidated balance sheets within accounts payable and other accrued liabilities.

15. Fair Value of Financial Instruments

There have been no significant changes in our policy for fair value measurements from what was disclosed in our 2022 Form 10-K.

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 March 31, 2023 and December 31, 2022 as compared to those in effect when the debt was issued or assumed.

We calculate the fair value of our secured and other debt 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.

DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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The aggregate estimated fair value and carrying value of our Global Revolving Credit Facilities, unsecured term loans, unsecured senior notes and secured and other debt as of the respective periods is shown below (in thousands):

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​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Categorization	​	As of March 31, 2023					​	As of December 31, 2022
​	​	under the fair value	​	Estimated Fair		​	​	​	​	Estimated Fair		​	​	​
​		hierarchy		Value			Carrying Value			Value			Carrying Value
Global revolving credit facilities (1)		Level 2	​	$	2,531,056	​	$	2,531,056	​	$	2,167,889	​	$	2,167,889
Unsecured term loans (1)		Level 2	​	​	1,552,925	​	​	1,552,925	​	​	802,875	​	​	802,875
Unsecured senior notes (2)		Level 2	​	​	11,524,720	​	​	13,357,299	​		11,331,989	​		13,220,961
Secured and other debt (2)		Level 2	​	​	551,386	​	​	563,856	​		517,226	​		532,130
​	​	​	​	$	16,160,087	​	$	18,005,136	​	$	14,819,979	​	$	16,723,855

(1)	The carrying value of our unsecured term loans approximates estimated fair value, due to the variability of interest rates and the stability of our credit ratings.

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

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16. Commitments and Contingencies

Our properties require periodic investments of capital for tenant-related capital expenditures and for general capital improvements including ground up construction. 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 March 31, 2023, we had open commitments, including amounts reimbursable by customers of approximately $30.6 million, related to construction contracts of approximately $2.6 billion.

In the ordinary course of our business, we may become subject to various legal proceedings. As of March 31, 2023, we were not a party to any legal proceedings which we believe would have a material adverse effect on our operations or financial position.

17. Supplemental Cash Flow Information

Cash, cash equivalents, and restricted cash balances as of March 31, 2023, and December 31, 2022:

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DIGITAL REALTY TRUST, INC. AND SUBSIDIARIES

DIGITAL REALTY TRUST, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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​	​	​	​	​	​	​
​	​	Balance as of
(Amounts in thousands)		March 31, 2023			December 31, 2022
Cash and cash equivalents	​	$	131,406	​	$	141,773
Restricted cash (included in other assets)	​		10,224	​		8,923
Total	​	$	141,630	​	$	150,696

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We paid $140.4 million and $119.0 million for interest, net of amounts capitalized, for the three months ended March 31, 2023 and 2022, respectively.

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We paid $6.5 million and $7.6 million for income taxes, net of refunds, for the three months ended March 31, 2023 and 2022, respectively.

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Accrued construction related costs totaled $451.0 million and $417.3 million as of March 31, 2023 and 2022, respectively.

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18. Segment and Geographic Information

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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.

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​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Operating Revenues							​	Investments in Properties, net						​	Operating lease right-of-use assets, net
​	​	Three Months Ended March 31,							​	As of March 31,			​	As of December 31,		​	As of March 31,			​	As of December 31,
(Amounts in millions)	​	2023			​	2022			​	2023			​	2022		​	2023			​	2022
Inside the United States	​	$	712.5	​	​	$	665.2	​	​	$	11,687.2	​	​	$	11,517.3	​	$	631.3	​	​	$	647.0
Outside the United States	​	​	626.2	​	​	​	462.1	​	​	​	12,522.4	​	​	​	12,257.4	​	​	686.0	​	​	​	704.3
Revenue Outside of U.S. %	​	​	46.8	%	​	​	41.0	%	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net Assets in Foreign Operations	​	$	6,581.4	​	​	$	6,330.2	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​

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19. Subsequent Events

None.

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