EX-99.1 2 dex991.htm MATERIAL TO BE PRESENTED BY DIGITAL REALTY TRUST, INC. Material to be presented by Digital Realty Trust, Inc.
December 2005 Road Show Presentation
Exhibit 99.1

1
Forward Looking Statements
The
information
included
in
this
presentation
contains
forward-looking
statements.
Such
statements
are
based
on
management’s
beliefs
and
assumptions
made
based
on
information
currently
available
to
management.
Such
forward
looking
statements
include
statements
and
projections
related
to
2005
and
2006
FFO,
growth
in
the
e-commerce
market,
the
digital
communication
and
distribution
market,
the
market
effects
of
regulatory
requirements,
the
disaster
recovery
market,
the
replacement
cost
of
our
assets,
capitalization
rates
for
our
properties
and
other
properties,
the
effect
new
leases
will
have
on
our
rental
revenues
and
results
of
operations,
lease
expiration
rates,
the
effect
of
leasing
and
acquisition
on
our
FFO,
FFO
payout
ratio
and
implied
cap
rates
and
our
implied
valuation
using
these
cap
rates
and
other
metrics.
Such
statements
are
subject
to
risks,
uncertainties
and
assumptions
and
are
not
guarantees
of
future
performance
and
may
be
affected
by
known
and
unknown
risks,
trends,
uncertainties
and
factors
that
are
beyond
our
control
that
may
cause
actual
results
to
vary
materially.
Some
of
the
risks
and
uncertainties
include,
among
others,
the
following:
adverse
economic
or
real
estate
developments
in
our
markets
or
the
technology
industry;
general
and
local
economic
conditions;
defaults
on
or
non-renewal
of
leases
by
tenants;
difficulty
acquiring
or
operating
properties
in
foreign
jurisdictions,
changes
in
foreign
laws
and
regulations,
including
those
related
to
taxation
and
real
estate
ownership
and
operation,
increased
interest
rates
and
operating
costs;
inability
to
acquire
new
properties
(including
those
we
are
in
the
process
of
acquiring);
our
failure
to
obtain
necessary
outside
financing;
decreased
rental
rates
or
increased
vacancy
rates;
difficulties
in
identifying
properties
to
acquire
and
completing
acquisitions;
our
failure
to
successfully
operate
acquired
properties
and
operations;
our
failure
to
maintain
our
status
as
a
REIT;
possible
adverse
changes
to
tax
law;
environmental
uncertainties
and
risks
related
to
natural
disasters;
financial
market
fluctuations;
changes
in
foreign
currency
exchange
rates;
and
changes
in
real
estate
and
zoning
laws
and
increases
in
real
property
tax
rates.
The
risks
described
above
are
not
exhaustive,
and
additional
factors
could
adversely
affect
our
business
and
financial
performance,
including
those
discussed
in
our
annual
report
on
Form
10-K
for
the
year
ended
December
31,
2004
and
other
filings
with
the
Securities
and
Exchange
Commission.
We
expressly
disclaim
any
responsibility
to
update
forward-looking
statements,
whether
as
a
result
of
new
information,
future
events
or
otherwise.

2
Digital Realty Trust Overview
•
Tenants consist of leading global
companies diversified across various
industries
•
Own 41 properties comprising 8.0
million rentable sq ft excluding
732,000 sq ft of additional space held
for redevelopment
•
Portfolio occupancy of 93.2%
(1)
•
Assets strategically located in top
technology markets in US and
Western Europe
DLR is a leading institutional owner focused on
mission critical technology properties in the US and Western Europe
Lakeside Tech Center
Chicago, IL
Note:
Unless
otherwise
indicated,
information
as
of
November
29,
2005.
(1)
Leasing
calculated
based
on
in
place
leases
as
of
September
30,
2005
and
excludes
approximately
732,000
square
feet
of
space
held
for
redevelopment.

3
DLR investment highlights
•
Specialized focus in dynamic and
growing industries
•
High quality portfolio that is difficult
to replicate
•
Experienced industry consolidator
with proven ability to acquire assets
below replacement cost
•
Acquisition and leasing pace creates
potential for strong FFO growth
•
Uniquely positioned as both a value
and growth REIT
Univision Tower
Dallas, TX

4
DLR properties feature advanced technical systems
Power backup/redundancy
Power management/conversion
Precision air cooling/handling
Systems and security controls
Between
$500
and
$1,000
psf
typically
invested
in
DLR
buildings,
creating
a
barrier
to
exit
for
tenants
and
discouraging
speculative
new
supply

5
DLR is unique in its focus on technology properties
Data Centers (34%
(1)
)
Internet Gateways (43%
(1)
)
Financial
Health/Insurance
Communications
Internet Enterprise
•
Storage/server intensive buildings
•
Provide a secure 24 x 7
environment for the storage and
processing of mission-critical
electronic information
•
Used to house the primary IT
operations of leading companies,
transaction processing and
disaster recovery purposes
•
Internet and telecom network
intensive buildings
•
Serve as the hub for Internet and
data communications within and
between major metropolitan areas
•
Market-dominant position in their
respective MSAs
•
Frequently serve as a super-
regional connection point with
multiple anchor tenants
(1)  Calculated based on annualized rents using in place leases as of September 30, 2005.
IT Services

6
Strong trends drive sustained demand for DLR space
•
IDC predicts that US residential
VOIP subscribers will grow to
27M in 2009
from 3M in 2005 (73% growth per year)
•
Wall Street Journal reports corporate data storage capacity is
expanding 60% a year
•
SEC, NYSE, and NASD business continuity and records retention
rules require financial information for over six years, records
backup, etc.
•
Forrester Research expects US online
retail sales to increase to
$329B in 2010
from $172B in 2005 (14% growth per year)
Trends
E-Commerce
Digital
Communication
& Distribution
Regulatory
Requirements
Disaster
Recovery

7
0%
10%
20%
30%
40%
50%
60%
2002
2003
2004
3Q2005
$-
$100
$200
$300
$400
$500
$600
Source:
Estimated based on reported cabinet (available and billing), square feet and revenue data from Equinix and Savvis as per press releases, SEC filings, research
reports and internal DLR estimates as of October 28, 2005.  Assumes 35 sq ft per cabinet throughout period if square feet not reported. 
Equinix
and
Savvis,
two
leading
managed
service
providers
that
“resell”
space
leased
directly
from
DLR,
are
experiencing
strong
growth
in
revenues
and
utilization
Bill rates and utilization rates are escalating
Revenue PSF
Utilization Rate
Revenue PSF (Utilized)
Revenue PSF (Total)
Utilization Rate
$491 psf
$529 psf
$142 psf
$266 psf
29%
51%

8
•
Former General Manager of Critical Facilities for EDS
•
18+ years of technology infrastructure experience
Ted Martin
Director of Operations
•
Former Director of Sales, Nortel Networks
•
13+ years of technology business experience
Christopher Crosby
VP Sales & Tech Svcs
•
Former Head of GI Partners real estate acquisitions
•
17+ years of real estate experience
Scott Peterson
Sr. VP Acquisitions
•
Former President & CFO of TriNet
•
24+ years of finance and real estate experience
A. William Stein
CFO/CIO
•
Co-founder of Digital Realty Trust
•
25+ years of real estate and technology experience
Michael Foust
CEO
•
Co-founder of Digital Realty Trust
•
23+ years of real estate and technology experience
Richard Magnuson
Executive Chairman
Senior management leads a complete REIT team
•
Relevant
experience
•
Proven track
record
•
Public
markets
background
DLR is organized and managed to deliver growth
Management
is
supported
by
a
team
of
approximately
50
professionals
in
the
US
and
Europe
focused
on
executing
DLR’s
core
strategy

9
Since its IPO, DLR has outperformed its peers and the RMS
DLR is a top performing 2004 REIT IPO
Note: Total return as of November 25, 2005 assuming dividend reinvestment as per Factset. IPO date: October 29, 2004.
(1) Tech Real Estate composite includes ARE, BMR and GSL.
(2) Mixed Office / Industrial composite includes BED, GLB, MSW, PSB, KRC, HIW, LRY and DRE.
69.9%
33.5%
13.5%
8.1%
16.2%
24.3%
56.9%
93.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
DLR
        Tech Real Estate       
composite
RMS
Mixed Office/Industrial
composite
Total Return Since IPO
YTD Total Return
(2)
(1)

10
DLR is established in top technology markets
San Francisco
LA
Dallas
Atlanta
Chicago
NYC Metro
London
Amsterdam
Paris
Frankfurt
Top Tech Market
DLR Market
Source:
Top
technology
markets
based
on
TeleGeography
Colocation
2006
ranking
of
largest
colocation
markets
in
US
and
Europe.
Note:
Reflects
all
owned
assets
at
of
November
29,
2005.
Silicon Valley
Charlotte
St. Paul
Philadelphia
DC Metro
Phoenix
Denver
Seattle
Sacramento
Miami
Boston
Geneva
Düsseldorf

11
DLR is increasingly well diversified by sector
Industry Distribution
(1)
Communications
36%
IT Services
30%
Other
Technology
12%
Financial &
Professional
Services
19%
Non-Technology
3%
Top 10 Tenants
(1)
Calculated
based
on
annualized
rents
using
in
place
leases
as
of
September
30,
2005.
(2)
Pending
the
closing
of
the
IBM
Campus
(Mainz,
Germany)
acquisition.
(2)

12
Source:
Independent
study
by
CCG
Facilities
Integration
Inc.
based
on
data
center
projects
with
improvements
similar
to
DLR.
(1)
Infrastructure
only.
Does
not
include
electronic
equipment.
Assumes
60%
ratio
of
data
center
to
total
building
with
all
cost
allocated
to
raised
floor
area.
(2)
Reflects
all
owned
properties
and
properties
under
contract
as
of
October
28,
2005.
Replacement Cost Estimate
Replacement cost illustrates the value of DLR’s
portfolio
DLR
owns
over
3.3M
sq
ft
of
improved
data
center
space
(2)
Cost per Square Foot
Cost Components
Low
High
Land
$40
$70
Building Shell
60
150
Electrical Systems
$297
$396
Mechanical Systems (HVAC)
92
122
Fire Protection
21
29
Other Construction and Fees
130
173
Sub Total
$540
$720
Total Development Costs
$640
$940
Base Building
Data Center
Improvements
(1)

13
Source:
Press
releases,
company
reports
and
internal
estimates
as
of
October
28,
2005.
(1)
Reflects
all
owned
properties
and
properties
under
contract
as
of
October
28,
2005.
Recent data center sales support $750 psf in value
Indicative Recent Data Center Sales Comps
Announced
Total
Est Data
Implied $psf
Est Acq.
Property
Buyer
Location
Prior Tenant
Price ($M)
Sq Ft
Ctr Sq Ft
Data Ctr
Cap Rate
1350 Duane
Inland
Santa Clara, CA
Sprint/Equinix
$97.5
185,000
    
80,000
      
$1,219
7.8%
Kilroy (ex-MFN)
365 Main
El Segundo, CA
Vacant
$22.5
131,000
    
48,000
      
$469
N/A
Exodus
Equinix
El Segundo, CA
Vacant
$34.5
107,000
    
50,000
      
$690
N/A
Beaumeade Business Park
Equinix
Ashburn, VA
Equinix/Others
$53.0
461,700
    
N/A
N/A
6.5%
Exodus (Equinix) *
Undisc.
El Segundo, CA
Equinix
$38.7
107,000
    
50,000
      
$774
7.8%
Average
$788
7.0% - 7.5%
* Sale/leaseback of original purchase as per press release.  Transaction pending.
DLR
owns
over
3.3M
sq
ft
of
improved
data
center
space
(1)

14
DLR’s acquisitions team continues to deliver …
Note:
Reflects
2005
acquisitions
through
November
29,
2005.
Net
rentable
square
feet
figures
include
space
held
for
redevelopment.
DLR has acquired approximately $438M in new properties contributing
approximately $42M in projected NOI
Purchase
Net Rentable
In-place yr 1
Purchase
Occupancy
Property
Location
Price ($M)
Sq Ft
NOI Cap
Price PSF
(Net of Redev)
833 Chestnut
Philadelphia
$59.0
654,758
        
10.7%
$90
91%
MAPP
St. Paul
$15.6
88,134
          
9.7%
$177
100%
Lakeside Technology Center
Chicago
$141.6
1,133,391
     
9.0%
$125
89%
Denver Data Center
Denver
$16.5
82,229
          
9.2%
$201
100%
Savvis Data Centers
Los Angeles
$92.5
560,000
        
11.0%
$165
100%
Printer's Square
Chicago
$39.0
161,547
        
10.0%
$241
84%
Amsterdam Data Center
Amsterdam
$17.3
112,472
        
9.2%
$154
62%
Charlotte Internet Gateway
Charlotte
$17.2
95,490
          
9.5%
$180
73%
Boston Data Center
Waltham
$14.3
71,000
          
Vacant
$201
N/A
Geneva Data Center
Geneva
$12.1
59,191
          
9.1%
$204
100%
Looking Glass Building
Herndon, VA
$12.9
71,000
          
9.9%
$182
100%
YTD 2005 Acquisitions
$438.0
3,089,212
     
9.5%
$142

15
•
60 leases for technical space representing approx. 116,000 sq ft
•
Rent per square foot:  approx. $65.91 psf gross
•
Leasing costs per square foot:  approx. $19.22
(1)
•
40 leases for non-technical space representing approx. 216,000 sq ft
•
Rent per square foot:  approx. $19.34 psf gross
•
Leasing costs per square foot:  approx. $20.42
(1)
•
Excluding space held for redevelopment, portfolio is 93.2% leased
(2)
Note:
Based
on
new
leases
executed
YTD
2005
as
of
November
6,
2005.
Rents
are
annualized,
straight
line
GAAP
per
net
rentable
square
foot.
(1)
Leasing
costs
per
square
foot
are
a
one-time
cost.
Excludes
redevelopment
expense
associated
with
space
designated
as
space
held
for
redevelopment.
(2)
Calculated
based
on
in
place
leases
as
of
September
30,
2005.
Excludes
732,000
sq
ft
of
space
held
for
redevelopment.
…
with sales/leasing driving additional growth
DLR has executed 100 US leases (new and renewals) contributing
over $11.8M in incremental annual GAAP rental revenues
Indicative DLR leasing in 2005

16
Case studies: DLR’s value-add leasing
-
DLR invested
approx. $2.5M to
fully condition
10,000 sq. ft. on a
speculative basis
-
DLR invested
approx. $10 psf to
enhance space
DLR Action
-
Executed new 10,000 sq. ft. suite lease
with IT services company at approx. $100
psf for 10 yr term
-
Executed new 22,300 sq. ft. lease with
financial institution at approx. $69 psf for
2.5 yr term
-
35,000 sq. ft. previously
vacant
-
Prior rate approx. $25 psf
-
Executed new 10,000 sq. ft. lease with
international telecom at approx. $57 psf
for 10 yr term
-
Executed new 22,500 sq. ft. lease with
software company at approx. $62 psf for 3
yr term
-
40,000 sq. ft. suite
previously vacant
-
Space substantially
conditioned by prior
tenant for data center
operations
-
Prior rate approx. $36 psf
New Lease(s)
Prior Lease
Recent leasing illustrates effectiveness of DLR’s leasing and engineering team

17
2.50%
1.80%
3.50%
6.10%
12.10%
14.10%
1.60%
7.80%
6.60%
32.50%
2006
2007
2008
2009
2010
2011
2012
2013
2014
Thereafter
DLR’s model features long-term, stable leases
•
The average lease term is in excess of 12 years with over 7 years remaining
•
Leases typically contain 3% annual rent bumps
7.8% in next 3 yrs
The stability of our long-term leases complements our growth
Note:
Excludes
2005
lease
expirations
and
space
held
for
redevelopment
as
of
September
30,
2005.
Lease Expiration as a % of Net Rentable Square Feet

18
Lease-Up
(2)
200,000 sq ft of basic
commercial space (gross rent
$20 / sq ft)
o
130,000 sq ft leased
YTD at $19.60 / sq ft
45,000 -  50,000 sq ft of highly
improved tech space (gross rent
$60 / sq ft)
o
115,500 sq ft leased
YTD at $71.10 / sq ft
Acquisitions
$450 - $500 million at 8.75% -
9.25% cap rate
o
$520m acquired at
9.5% cap rate
(3)
DLR is re-affirming its 2005 forecast
Internal Growth 
2005 projected FFO Per Share Guidance
(1)
:
$1.35 -
$1.40
External Growth
(1)  As
per
Company
guidance
provided
on
August
9,
2005.
(2)  Based
on
new
leases
executed
YTD
2005
as
of
October
10,
2005.
(3)  Reflects
2005
acquisitions
and
properties
under
contract
as
of
September
30,
2005.
3 –
4%
FFO Per Share Growth
6 –
8%
FFO Per Share Growth
9 –
12%
Overall FFO Per Share Growth

19
DLR recently released its preliminary 2006 forecast
Internal Growth 
2006 projected FFO Per Share Guidance
(1)
:
$1.65 -
$1.75
External Growth
(1)  As per Company guidance provided on November 9, 2005.
10 –
14%
FFO Per Share Growth
10 –
14%
FFO Per Share Growth
20 –
28%
Overall FFO Per Share Growth
Lease-Up 
125,000 – 150,000 sq ft of basic
commercial space (gross rent
$19 / sq ft)
200,000 -  300,000 sq ft of highly
improved tech space (gross rent
$40 / sq ft)
Acquisitions
$200 - $400 million at 8.0% -
9.0% cap rate
 

20
DLR employs a conservative capital structure
•
Wtd
Average Cost of Debt: 6.0%
•
Approximately 75% fixed rate debt
•
Recently executed $350M credit facility
which reduced borrowing cost and
increased flexibility
•
$103.8M outstanding on the credit
facility at September 30, 2005
•
Periodically refinancing high cost debt
with lower rate, longer term, fixed rate
financing
•
No debt maturing through 2008
(assuming extensions)
Total Market
Capitalization
(4)
$1,918.0M
Note:
Based
on
September
30,
2005
financial
statements.
(1)
Based
on
most
recent
company
guidance
for
2006
FFO
per
share
($1.65
-
$1.75)
provided
on
November
9,
2005.
(2)
Adjusted
EBITDA
divided
by
Interest
Expense
at
September
30,
2005.
(3)
Adjusted
EBITDA
divided
by
Fixed
Charges
at
September
30,
2005.
Fixed
Charges
include
Interest
Expense,
Scheduled
Debt
Principal
Payments,
and
Preferred
Dividends.
(4)
Based
on
closing
price
of
DLR
common
stock
($18.00)
and
preferred
stock
as
of
September
30,
2005.
Dividend Yield / Rate:    5.9% / $1.06
Projected FFO Payout Ratio
(1)
:
60.6% -
64.2%
Debt Service Coverage Ratio
(2):
3.4x
Fixed Charge Coverage Ratio
(3):
2.2x
Fixed Rate Debt
$517.9M
Variable Rate
Debt $169.0M
Preferred Stock
(4)
$172.2M
Equity
(4)
$1,058.9M
27%
9%
55%
9%

21
15.4x
15.7x
16.0x
20.3x
14.8x
12.8x
13.9x
17.1x
4.5%
4.9%
5.6%
4.0%
10.0x
11.0x
12.0x
13.0x
14.0x
15.0x
16.0x
17.0x
18.0x
19.0x
20.0x
21.0x
RMS
DLR
Mixed Office / Industrial
Tech Real Estate Composite
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
2005E FFO Multiple
2006E FFO Multiple
Dividend Yield
(2)
FFO Multiple
(1)
Note:
Based
on
closing
price
of
DLR
common
stock
($21.86)
and
other
securities
as
of
November
25,
2005.
(1)
Based
on
First
Call
consensus
estimates
for
indicative
purposes.
DLR
does
not
endorse
the
First
Call
consensus
estimate.
DLR
guidance
for
2005
FFO
per
share
remains
$1.35
-
$1.40
as
provided
on
August
9,
2005.
DLR
guidance
for
2006
FFO
per
share
of
$1.65
-
$1.75
as
provided
on
November
9,
2005.
(2)
Tech
Real
Estate
composite
includes
ARE,
BMR
and
GSL.
(3)
Mixed
Office
/
Industrial
composite
includes
BED,
GLB,
MSW,
PSB,
KRC,
HIW,
LRY
and
DRE.
Dividend Yield
(3)
DLR trades at a discount to public peers
DLR’s FFO multiples remain at a discount

22
DLR is valued at a discount to prevailing RE metrics
Note:
Tech
RE
Composite
includes
ARE,
BMR
and
GSL.
Mixed
Office/Industrial
Composite
includes
BED,
GLB,
MSW,
PSB,
KRC,
HIW,
LRY
and
DRE.
(1)  Based on annualized NOI run rate for owned properties at September 30, 2005.
(2)
Based
on
market
price
of
DLR
common
stock
($18.00)
and
debt
balances
at
September
30,
2005.
(3)
Cap
rate
methodology
calculated
as
3Q
NOI
annualized
/
Total
Market
Capitalization
as
of
November
25,
2005.
(4)  Assumes $125 psf
value for pro forma space held for redevelopment (includes owned properties at September 30, 2005).
(5)
Includes
square
footage
associated
with
owned
properties
at
September
30,
2005.
An analysis by Cushman & Wakefield of 60+ recent sales of properties similar to
DLR’s portfolio indicates a current market cap rate range of 7.50% to 8.25%
All
figures
in
thousands
except
sq
ft,
%
and
psf
figures
Projected NOI ('000)
(1)
$154,873
Est
current total capitalization
(2)
$1,918,000
Implied cap rate
8.1%
Est
value -
Redev
Space @ $125 psf
('000)
(4)
$91,458
Implied value -
income producing
$1,826,542
Implied cap rate -
income producing
8.5%
Sq Ft (3Q including redevelopment)
(5)
8,596,423
Implied value psf
-
income producing
$212
DLR Implied Valuation
(3)
5.00%
Tech RE Composite (5.3%)
6.00%
7.00%
Office/Industrial Composite (6.7%)
C&W Mkt
Cap Rates
8.00%
DLR Total Cap (8.1%)
9.00%
DLR Cap -
Income Producing (9.1%)

23
Definition of Non-GAAP Financial Measures
This
presentation
includes
certain
non-GAAP
financial
measures
that
management
believes
are
helpful
in
understanding
our
business,
as
further
described
below.
Our
definition
and
calculation
of
non-GAAP
financial
measures
may
differ
from
those
of
other
REITs,
and,
therefore,
may
not
be
comparable.
The
non-GAAP
financial
measures
should
not
be
considered
an
alternative
to
net
income
or
any
other
GAAP
measurement
of
performance
and
should
not
be
considered
an
alternative
to
cash
flows
from
operating,
investing
or
financing
activities
as
a
measure
of
liquidity.
Net
Operating
Income
(NOI)
NOI
represents
rental
revenue
and
tenant
reimbursement
revenue
less
rental
property
operating
and
maintenance,
property
taxes
and
insurance
expenses
(as
reflected
in
statement
of
operations).
NOI
is
commonly
used
by
stockholders,
company
management
and
industry
analysts
as
a
measurement
of
operating
performance
of
the
company’s
rental
portfolio.
However,
because
NOI
excludes
depreciation
and
amortization
and
captures
neither
the
changes
in
the
value
of
our
properties
that
result
from
use
or
market
conditions,
nor
the
level
of
capital
expenditures
and
leasing
commissions
necessary
to
maintain
the
operating
performance
of
our
properties,
all
of
which
have
real
economic
effect
and
could
materially
impact
our
results
from
operations,
the
utility
of
NOI
as
a
measure
of
our
performance
is
limited.
Other
REITs
may
not
calculate
NOI
in
the
same
manner
we
do
and,
accordingly,
our
NOI
may
not
be
comparable
to
such
other
REITs’
NOI.
Accordingly,
NOI
should
be
considered
only
as
a
supplement
to
net
income
as
a
measure
of
our
performance.
Funds
from
Operations
(FFO)
We
calculate
Funds
from
Operations,
or
FFO,
in
accordance
with
the
standards
established
by
the
National
Association
of
Real
Estate
Investment
Trusts,
or
NAREIT.
FFO
represents
net
income
(loss)
(computed
in
accordance
with
GAAP),
excluding
gains
(or
losses)
from
sales
of
property,
real
estate
related
depreciation
and
amortization
(excluding
amortization
of
deferred
financing
costs)
and
after
adjustments
for
unconsolidated
partnerships
and
joint
ventures.
Management
uses
FFO
as
a
supplemental
performance
measure
because,
in
excluding
real
estate
related
depreciation
and
amortization
and
gains
and
losses
from
property
dispositions,
it
provides
a
performance
measure
that,
when
compared
year
over
year,
captures
trends
in
occupancy
rates,
rental
rates
and
operating
costs.
We
also
believe
that,
as
a
widely
recognized
measure
of
the
performance
of
REITs,
FFO
will
be
used
by
investors
as
a
basis
to
compare
our
operating
performance
with
that
of
other
REITs.
However,
because
FFO
excludes
depreciation
and
amortization
and
captures
neither
the
changes
in
the
value
of
our
properties
that
result
from
use
or
market
conditions,
nor
the
level
of
capital
expenditures
and
leasing
commissions
necessary
to
maintain
the
operating
performance
of
our
properties,
all
of
which
have
real
economic
effect
and
could
materially
impact
our
results
from
operations,
the
utility
of
FFO
as
a
measure
of
our
performance
is
limited.
Other
REITs
may
not
calculate
FFO
in
accordance
with
the
NAREIT
definition
and,
accordingly,
our
FFO
may
not
be
comparable
to
such
other
REITs’
FFO. 
Accordingly,
FFO
should
be
considered
only
as
a
supplement
to
net
income
as
a
measure
of
our
performance.

24
Definition of Non-GAAP Financial Measures
(continued)
EBITDA
and
Adjusted
EBITDA
We
believe
that
earnings
before
interest,
income
taxes,
depreciation
and
amortization,
or
EBITDA
and
Adjusted
EBITDA
(as
defined
below),
are
useful
supplemental
performance
measures
because
they
allow
investors
to
view
our
performance
without
the
impact
of
noncash
depreciation
and
amortization
or
the
cost
of
debt
and
with
respect
to
Adjusted
EBITDA
preferred
dividends
and
minority
interests.
Adjusted
EBITDA
is
EBITDA
excluding
minority
interests
and
preferred
stock
dividends.
In
addition,
we
believe
EBITDA
and
adjusted
EBITDA
are
frequently
used
by
securities
analysts,
investors
and
other
interested
parties
in
the
evaluation
of
REITs.
Because
EBITDA
and
adjusted
EBITDA
are
calculated
before
recurring
cash
charges
including
interest
expense
and
income
taxes,
and
are
not
adjusted
for
capital
expenditures
or
other
recurring
cash
requirements
of
our
business,
their
utility
as
a
measure
of
our
performance
is
limited.
Accordingly,
EBITDA
and
Adjusted
EBITDA
should
be
considered
only
as
supplements
to
net
income
(computed
in
accordance
with
GAAP)
as
a
measure
of
our
financial
performance.
Other
equity
REITs
may
calculate
EBITDA
and
Adjusted
EBITDA
differently
than
we
do;
accordingly,
our
EBITDA
and
Adjusted
EBITDA
may
not
comparable
to
such
other
REITs’
EBITDA
and
Adjusted
EBITDA.
Each
of
FFO,NOI,
and
Adjusted
EBITDA
exclude
items
that
have
real
economic
effect
and
could
materially
impact
our
results
from
operations,
and
therefore
the
utility
of
FFO,
NOI,
and
Adjusted
EBTIDA
as
a
measure
of
our
performance
is
limited.
Unless
otherwise
indicated,
all
information
assumes
properties
purchased
and
closed
as
of
November
29,
2005.
Nothing
contained
herein
is
intended
to
revise
the
earnings,
FFO
or
acquisition
guidance
we
provided
in
a
press
release
dated
November
9,
2005
and
available
on
our
website
at
www.digitalrealtytrust.com.

25
Reconciliation of Non-GAAP Financial
Measures
Reconciliation of the range of 2005 projected net income to projected FFO     
Low End
High end
Net Income
$11.3
- -
$12.7
Add:
Minority interest in operating partnership
$13.5
- -
$15.2
$24.8
- -
$27.9
Add:
Real estate related depreciation and amortization
60.1
- -
60.1
Funds from operations (FFO)
$84.9
- -
$88.0
Less: Preferred stock dividends
(10.1)
- -
(10.1)
FFO available to common stock and unit holders
$74.8
- -
$77.9
FFO per share of common stock and unit outstanding
$1.35
- -
$1.40
55.5
- -
55.5
(in millions)
Net income before minority interest in operating partnership but after minority
interest in consolidated joint ventures
Weighted average number of shares of common stock and units outstanding

26
Reconciliation of Non-GAAP Financial
Measures (continued)
Reconciliation of the range of 2006 projected net income to projected FFO     
Low End
High end
Net Income
$23.2
- -
$24.9
Add:
Minority interest in operating partnership
$18.1
- -
$19.5
$41.3
- -
$44.4
Add:
Real estate related depreciation and amortization
69.8
- -
73.0
Funds from operations (FFO)
$111.1
- -
$117.4
Less: Preferred stock dividends
(13.8)
- -
(13.8)
FFO available to common stock and unit holders
$97.3
- -
$103.6
FFO per share of common stock and unit outstanding
$1.65
- -
$1.75
59.2
- -
59.2
(in millions)
Net income before minority interest in operating partnership but after minority
interest in consolidated joint ventures
Weighted average number of shares of common stock and units outstanding

27
Reconciliation of Non-GAAP Financial
Measures (continued)
Reconciliation of Earnings Before Interest Taxes and Depreciation and Amortization
9/30/2005
6/30/2005
3/31/2005
Net income available to common stockholders
1,326
$            
2,136
$            
1,468
$           
Add:
Interest
10,724
            
9,289
               
8,121
             
Depreciation and amortization
16,957
            
14,328
            
12,143
           
EBITDA
29,007
            
25,753
            
21,732
           
Minority interests
1,624
               
3,139
               
2,156
             
Dividends to preferred stockholders
3,099
               
2,199
               
1,271
             
Adjusted EBITDA
33,730
$          
31,091
$          
25,159
$         
Reconciliation of net income available to common stockholders to earnings before
interest, taxes and depreciation and amortization (EBITDA) and Adjusted EBITDA
Three Months Ended