EX-99.1 2 dex991.htm MATERIALS TO BE PRESENTED AT INVESTOR MEETINGS DURING SEPTEMBER 2007 Materials to be presented at investor meetings during September 2007
Investor Meetings
September 2007
Foundation of the Digital World
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
growth
in
the
Software
as
a
Service
(SaaS)
and
e-
commerce
market,
the
digital
communication
and
distribution
market,
and
the
data
storage
market,
online
advertising,
the
market
effects
of
regulatory
requirements,
the
disaster
recovery
market,
estimates
of
sufficiency
of
power
and
cooling
in
existing
datacenters,
the
replacement
cost
of
our
assets,
redevelopment
costs
in
our
buildings,
and
time
periods
to
stabilization
of
our
development
space,
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,
and
annualized
GAAP
rent.
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;
increased
interest
rates
and
operating
costs;
our
inability
to
manage
domestic
and
international
growth
effectively;
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;
increased
construction
costs;
decreased
rental
rates
or
increased
vacancy
rates;
difficulties
in
identifying
properties
to
acquire
and
completing
acquisitions
at
acceptable
return
levels;
our
failure
to
successfully
operate
acquired
properties
and
operations;
failure
of
acquired
properties
to
perform
as
expected;
our
failure
to
successfully
redevelop
properties
acquired
for
that
purpose
or
unexpected
costs
related
to
redevelopment;
our
failure
to
maintain
our
status
as
a
REIT;
possible
adverse
changes
to
tax
law;
environmental
uncertainties
and
risks
related
to
natural
disasters;
environmental
or
contamination
issues
at
our
buildings;
financial
market
fluctuations;
changes
in
foreign
currency
exchange
rates;
risks
of
operating
in
foreign
countries;
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,
2006
and
subsequent
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
66
properties
(1)
comprising
11.9
million rentable sq ft, which includes
1.8 million rentable sq ft of space held
for
redevelopment
(2)
Portfolio occupancy of 94.6% and
“same
store”
occupancy
of
93.9%
(3)
Assets strategically located in 26 top
technology markets throughout North
America and Europe
DLR is a leading institutional owner focused on mission critical
technology properties throughout North America and Europe.
11830 Webb Chapel Road
Dallas, TX
(1)
Excludes one property held in an unconsolidated joint venture.
(2)
Includes property acquisitions as of September 11, 2007.
(3)
Occupancy
is
as
of
June
30,
2007,
net
of
redevelopment
space.
Same
store
occupancy
includes
properties
acquired
before
December
31,
2005,
excluding
properties sold in 2006 and 2007.

3
DLR Investment Highlights
Specialized focus in dynamic and
growing sector
High quality portfolio that is difficult to
replicate
Proven track record of creating
shareholder value
Conservative and flexible capital
structure
Industry leading domestic and
international datacenter development
and critical facilities management
capabilities
2323 Bryan Street
Dallas, TX

4
DLR Properties Feature Advanced Technical Systems
Between $500 and $1000 psf typically invested in DLR buildings, creating a barrier to
exit for tenants and discouraging speculative new supply.
Power backup/redundancy
Power management/conversion
Precision air cooling/handling
Systems and security controls

5
DLR Presence in 26 Top Markets
11,895,000
87
66
Total
866,000
10
9
International
11,029,000
77
57
Domestic
Total Rentable
Square Feet
# of Buildings
# of Properties
(1)
(1)
Includes properties owned as of September 11, 2007, excluding one property held in an unconsolidated joint venture.

6
DLR Properties Serve a Variety of Industry Verticals
DLR offers corporate enterprise tenants, IT service providers, and network
carriers flexible, cost-effective and reliable datacenter solutions.
Technology
Internet
Enterprise
Communications
Manufacturing/
Energy
Financial

7
Communications
Services
29%
IT Services and
Internet Enterprise
43%
Professional &
Financial Services
9%
Other Technology
8%
Non-Technology
11%
DLR Tenant Distribution
(1)
(1) Calculation
based
on
average
annualized
GAAP
rents
using
in
place
leases
as
of
June
30,
2007,
excluding
one
property
held
in
an
unconsolidated
joint
venture.

8
DLR is Unique in its Focus on Technology Properties
Corporate Datacenters
–
Storage/server intensive buildings
–
Provide a secure 24x7 environment
for the storage and processing of
mission-critical electronic
information
–
Used to house primary IT
operations: transaction processing,
data storage, disaster recovery,
CRM and email
Internet Gateways
–
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) Calculation based on average annualized GAAP rents using in place leases as of June 30, 2007.
Portfolio Distribution
(1)
Internet Gateway
37%
Non-Technical
10%
Corporate Datacenter
53%

9
Strong Trends Drive Sustained Demand for DLR Space
Other Growth Drivers
By 2008, 50% of existing
corporate data centers will
have insufficient power and
cooling capacity to meet the
demands of high-density
equipment
(4)
Increased federal regulatory
and legislative requirements for
business continuity and
records retention
Disaster Recovery initiatives
prioritized as a result of
Hurricanes Katrina and Rita
HIPAA patient records security
and retention regulations
Significant growth in online
advertising: up 30% in 2006;
expected 19% increase in
2007
(5)
U.S. e-commerce spending
increased 24% during 2006
(6)
(1)
(2)
(3)
Primary Drivers –
Estimated Annual Growth Rates
(1) Gartner
(May
2006)
estimated
growth
in
Software
as
a
Service
(SaaS)
from
2006
to
2009.
(2) IDC estimate of US VOIP subscriber growth from 2005 to 2009.
(3) Wall Street Journal estimate of corporate data storage capacity growth, October 2005.
(4) Gartner
25th
Annual
Datacenter
Conference
2006.
(5) eMarketer.com, February 2007.
(6) comScore
Networks, 2007.
73%
60%
57%
20
40
60
80
SaaS
Digital
Communication
& Distribution
Data Storage
100%
0%

10
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1Q02
4Q02
3Q03
2Q04
1Q05
4Q05
3Q06
2Q07
$0
$100
$200
$300
$400
$500
$600
$700
Source:
Estimates
based
on
reported
cabinet
(net
sellable
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
June
30,
2007.
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)
$518 psf
Revenue PSF (Total)
$148 psf
Utilization Rate
29%
$628 psf
$558 psf
79%

11
DLR Offers Sustained Growth
Acquisitions
Leasing of Turn-Key
Datacenter™
and
Powered Base Building™
Space
Redevelopment Inventory
DLR growth is derived from three sources.

12
$847.2
$1,044.3
$1,137.4
$1,413.4
$1,508.5
$1,593.6
$1,648.2
$1,794.4
$2,066.2
$2,298.7
$2,457.5
$2,535.5
$750
$1,250
$1,750
$2,250
$2,750
9/30/2004
12/31/2004
3/31/2005
6/30/2005
9/30/2005
12/31/2005
3/31/2006
6/30/2006
9/30/2006
12/31/2006
3/31/2007
6/30/2007
Proven Track Record: Strong Acquisition Activity
Since its IPO, DLR has more than doubled its total assets through
property acquisitions.
Total Undepreciated
Assets
($000s)

13
2005 Through YTD 2007 Acquisitions
Acquired 45+ properties
(1)
totaling over $1.3 billion
Added approximately 7.3 million square feet to total portfolio, including
approximately 1.8 million square feet of redevelopment inventory
New markets include:
–
Philadelphia
–
St. Paul
–
Chicago
–
Charlotte
–
Amsterdam, Netherlands
–
Geneva, Switzerland
–
Northern Virginia
–
Austin
–
Dublin, Ireland
–
Toronto, Canada
–
Houston
–
Seattle
–
Paris, France
–
St. Louis
Chicago, Illinois
Paris, France
(1)
Includes
one
property
held
as
an
investment
in
an
unconsolidated
joint
venture.

14
(1)
Net rentable square feet figures excludes space held for redevelopment.
(2)
A leasehold interest consisting of two suites in 111 8th
Ave. (NY) acquired from NYC Connect.
(3)
Loudoun Exchange Portfolio consists of 43881, 43831 & 43791 Devin Shafron Drive (VA).
(4)
9.4 acre development site in suburban London, England with planning permission for a datacenter facility.
DLR has acquired approximately $1.3 billion in new properties since 2005.
2007 Acquisition Activity
Property
Metropolitan Area
Purchase Price
(in millions)
Total Rentable
Square Feet
Total Net
Rentable
Square Feet
Total Square
Feet Held for
Redevelopment
Percentage of
Net Rentable
Square Feet
Occupied
(1)
21110 Ridgetop
Northern Virginia
$17.0
135,513
            
135,513
       
-
                           
100%
3011 Lafayette Street
Silicon Valley
$13.6
90,780
              
-
                    
90,780
                
-
                       
444470 Chilum Place
Northern Virginia
$42.5
95,440
              
95,440
         
-
                           
100%
111 Eighth Avenue
(2)
New York City
$24.5
33,700
              
33,700
         
-
                           
91%
Devon Shafron Drive
(3)
Northern Virginia
$62.5
402,071
            
137,071
       
265,000
              
40%
Mundells Roundabout
(4)
London, England
$31.4
-
                         
-
                    
-
                           
-
                       
900 Walnut & 210 Tucker
St. Louis, MI
$53.0
310,400
            
249,003
       
61,397
                
100%
1 Savvis Parkway
St. Louis, MI
$27.7
156,000
            
156,000
       
-
                           
100%
1500 Space Park Drive
Silicon Valley
$4.5
50,000
              
-
                    
50,000
                
-
                       
YTD 2007
$276.7
1,273,904
806,727
467,177

15
Leasing Drives Internal Growth
DLR commenced 211 leases during 2006, contributing approximately
$30.0 million in annualized GAAP rent.
(1)
(1)
GAAP rental revenues include total rent for both renewals and expansions.
(2)
Excludes leases for parking garages and rooftops.
$22.2 million
$53.00
419,000
48
Total
$0.5 million
$19.00
27,000
14
Non Technical
(2)
$8.4 million
$27.50
304,000
8
Powered Base Building™
$13.3 million
$151.00
88,000
26
Turn-Key Datacenter™
Annualized
GAAP Rent
Annualized GAAP
Rent PSF
Total SF
Leased
# of
Leases
Type of Space
YTD through June 30, 2007, DLR signed leases for 359,000 sf of space,
including 114,600 sf of Turn-Key Datacenter™,
185,600 sf of Powered Base
Building™, and 58,800 sf feet of non technical space, representing annualized
GAAP rent of $26.6 million.
Leases Commenced YTD through June 30, 2007:

16
Same Store Growth
(1)
54,000
56,000
58,000
60,000
62,000
64,000
66,000
68,000
70,000
Jun-06
Sep-06
Dec-06
Mar-07
Jun-07
($000)
(1)
Same store properties were acquired before December 31, 2005, excluding properties sold in 2006 and 2007.
(2)
Quarterly operating revenue includes rental and tenant reimbursement revenue.
(3)
Calculation
based
on
reported
2Q07
operating
revenue
of
$68.8M
less
$4.3M
straight
line
rent
and
less
$0.7M
for
below/above
rent
amortization.
Second
quarter
2007
same
store
cash
revenue
was
$63.8
million
(3)
16%
Year
over
Year
Increase
in
Same
Store
Quarterly
Operating
Revenue
(2)

17
Case Studies:  DLR’s Value-add Leasing
(1)  Calculation based on IPO date of November 2004 and actual annualized net operating income (NOI) as of June 30, 2007. See page 30 for a discussion of NOI.
350 East Cermak Road
1100 Space Park Drive
200 Paul Avenue
300 Boulevard East
Property Name
Location
Acquisition / IPO
Date
% Change in NOI from later
of Acquisition or IPO
(1)
Run Rate NOI
200 Paul Avenue
San Francisco, CA
Nov-04
60.0%
16,991,253
$  
1100 Space Park Drive
Santa Clara, CA
Nov-04
95.1%
6,791,971
$    
350 East Cermak
Road
Chicago, IL
May-05
56.4%
20,025,157
$  
300 Boulevard East
Weehawken, NJ
Nov-04
92.5%
11,950,874
$  
600 West 7th Street
Los Angeles, CA
Nov-04
27.6%
9,548,871
$    

18
DLR Redevelopment Inventory
Redevelopment inventory totals 1.8
million sf of vacant space with
potential for up to 1.1 million sf of
datacenter
(1)
:
–
Approximately 65% of inventory in
income-producing properties
–
Remaining 35% of inventory in 5
vacant buildings
Redevelopment costs vary by building
–
Base building power, structural
upgrades: $35 -
$50 per rsf
–
Custom datacenter:  $500 to $800
per rsf
(1)
(funding available through
DLR)
Growth Opportunity
(1)  Assumes datacenter foot print is 60% of overall rentable square footage.

19
Redevelopment Program Progress Report
Construction projects underway in 11 U.S. and European markets totaling over
404,000 rentable square feet of Turn-Key Datacenter™ , build-to-suit space and
new Powered Base Building™
shell construction
DLR’s Turn-Key Datacenters™
–
Move-in ready, physically secure facilities with redundant power and cooling
capabilities
–
Measuring 10,000 –
12,000 square feet of raised-floor featuring DLR’s    
POD Architecture™
Strong interest from existing and prospective tenants
Stabilized income projected over the next 36 months
Turn-Key Datacenter™
Built-to-suit

20
DLR’s Competitive Advantage: Dedicated Technical Professionals
Staff of over 65 DLR technical professionals:
–
IT sales team
Focus on end-user, IT professionals (CIO or CTO)
–
Datacenter sales engineers
Provide value engineering and custom design expertise
–
Design and construction experts
Disciplined approach to project management
Volume purchase agreements for equipment and services
Best-in-class engineering and contracting
–
Datacenter facilities management team
Best-in-class operating policies and procedures
Fully-integrated Building Automation Systems
Global preventative maintenance agreements
Operating scale and process-based approach result in significant cost
savings and added value for tenants
DLR possesses the necessary scale to support these specialized professionals

21
Source:  Independent study by CCG Facilities Integration Inc. based on datacenter projects with improvements similar to DLR.
(1)
Infrastructure only. Does not include electronic equipment. Assumes 60% ratio of datacenter to total building with all cost allocated to raised floor area.
(2)
DLR estimate based on Equinix press release dated September 19, 2006.
(3)
Reflects all owned properties as of September 11, 2007.
Replacement Cost Estimate
Replacement Cost Illustrates the Value of DLR’s Portfolio
DLR owns over 7.6 million sq ft of improved datacenter space.
(3)
Cost per Square Foot
Equinix
(2)
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
$1,250
Base Building
Data Center
Improvements
(1)

22
0.2%
4.1%
5.1%
8.0%
12.4%
5.6%
3.6%
5.4%
17.9%
7.9%
24.4%
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Thereafter
DLR’s Model Features Long-term, Stable Leases
The stability of our long-term leases complements our growth.
Note:
Excludes
vacant
square
footage
of
0.5
million
square
feet
and
1.7
million
square
feet
of
space
held
for
redevelopment
as
of
June
30,
2007.
Lease expiration as a percentage of net rentable square feet
9.4% in through 2009
The average lease term is approximately 12 years with 7 years remaining.
Leases typically contain 3% annual rent bumps.

23
DLR Financial Overview
Strong
and
consistent
FFO
(1)
growth
–
$0.51 per diluted share and unit for 2Q07, +34% from 2Q06
and +2% from 1Q07
–
$1.63 per diluted share and unit for 2006, +19% from 2005
Increasing
NOI
(1)
–
$62.7 million in 2Q07, +7% from $58.8 million in 1Q07 and
+52% from $41.1 million in 2Q06
Well supported dividend
–
3.1%
yield
(2)
–
FFO
/
AFFO
(1)
payout
ratio
of
56%
/
77%
(3)
for
2Q07
–
Increased quarterly common dividend in 4Q06, +8%
(1)
FFO, AFFO and NOI are non GAAP financial measures. For a description of FFO, AFFO and NOI see page 30.
(2)
Based on most recent quarterly dividend annualized.  Dividend yield based on September 11, 2007 closing stock price of $37.27.
(3)
FFO
payout
ratio
is
dividend
declared
per
common
share
and
unit
divided
by
diluted
FFO
per
share
and
unit.
AFFO
payout
ratio
is
dividend
declared
per
common
share
and unit divided by diluted AFFO per share and unit. For a description of FFO and AFFO see page 30. For a reconciliation to net income see page 31.

24
DLR Capital Raising Activities
Proven access to capital
–
YTD 2007
Entered into enhanced $650 million revolving credit facility
–
Increased size from $500 million
–
Reduced applicable margin ranges by 12.5 to 25 basis points
–
Extended maturity to 2010
–
Modified covenants to enhance financial flexibility
Issued $175.0 million of 4.375% convertible preferred: 20% premium
Refinanced Joint Venture in Seattle: $20+ million net proceeds to DLR
Completed two mortgage financings totaling $121 million
Closed $70 million construction financing
Sold two non-core assets: estimated total gain on sale of $18.0 million
–
$900.2 million of capital raised in 2006
Amended prior credit facility from $350 to $500 million
Raised $172.5 million of 4.125% convertible debt: 18% premium
Completed 10 mortgage financings totaling $349.4 million
Raised $228.3 million in net proceeds from two common stock offerings
Increased float by 121.5% from 27.4 million as of January 1, 2006 to
60.7 million shares of common stock outstanding as of June 30, 2007

25
DLR 2007 Guidance
2007 projected funds from operations (FFO) per share guidance:
(1)(2)
$1.91 to $1.96
(1)
Based on second quarter 2007 earnings conference call dated August 8,2007.
(2)
FFO and AFFO are non GAAP financial measures. For a description of FFO and AFFO see page 30. For a reconciliation to net income see page 31.
Internal Growth 
11.2% to 13.0%
FFO
(2)
Per Share Growth
Leasing 
475,000 to  600,000 sq ft of turn-
key & redevelopment space
(gross rent $70 / sq ft)
100,000 to 125,000 sq ft of basic
commercial space (gross rent
$19 / sq ft)
Acquisitions
$300 - $400 million 
o
$110 million of vacant
for redevelopment
o
$190 to $290 million of
income producing at
an average cap rate of
8.25%
External Growth
6.0% to 7.0%
FFO Per Share Growth
17.2% to 20.0%
Overall FFO Per Share Growth
•
Capital Expenditure for redevelopment of $251 million
•
Total G&A of $34 million

26
Improving Overall Credit Quality of DLR Portfolio
+
=
+
=
Approximately $18 million of base rental income, or over 8% of overall income, has
experienced an improvement in credit quality.
(1)
In June 2007 Microsoft assumed 300,000 sf lease from Savvis at two DLR Santa Clara properties.
(2)
On June 30, 2006, SAVVIS completed the exchange of its Series A Preferred stock for 37.4 million shares of common stock.
(2)
(1)

27
6.0
12.0
$18.0
$0.6
$0.4
$1.8
$1.9
$0.7
$1.2
$2.2
$2.8
$16.3
$15.9
$10.6
$6.1
0.0
2.0
DLR’s top tenants have experienced a robust increase in equity capitalization
(1)
Significant Equity Capitalization Improvement in Top Tenants
(1) Increase in equity capitalization calculated as of September
11, 2007 from DLR IPO date of November 1, 2004.

28
Variable
Rate Debt
(3) 5.3%
Fixed Rate
Debt (2)(6)
26.4%
Preferred
(4) 8.1%
Equity (1)
60.2%
DLR Employs a Conservative Capital Structure
Wtd
average cost of debt:
5.99%
(5)
; approximately 83%
fixed rate debt
(6)
Coverage ratios
(7)
:
–
Debt service: 3.8x
–
Fixed charge: 2.6X
Periodically refinancing high
cost debt with lower rate,
longer term, fixed rate
financing
Total Enterprise Value
(1)
$4,209.2 million
Dividend Yield / Rate:    3.1% / $1.145
(1)
Based on closing price of $37.27 at September 11, 2007 and shares outstanding of DLR common stock at June 30, 2007.
(2)
Excludes $1.9 million of unamortized debt premium for 1125 Energy Park Drive & 731 East Trade Street.
(3)
Revolving credit facility as of September 11, 2007; fluctuates based on amount drawn on revolving credit facility.
(4)
Includes $175 million of 4.375% convertible preferred stock issued in April 2007.
(5)
Excluding the equity component of the convertible debt, the weighted average cost of debt is 5.84%.
(6)
Includes $172.5M of convertible debt and $251.4M of swapped floating rate debt.
(7)
As of 6/30/07; debt service coverage ratio is Adjusted EBITDA divided by cash interest expense; fixed charge coverage ratio is Adjusted EBITDA divided by fixed charges. 
See p. 30 for a description of Adjusted EBITDA and p. 31 for a reconciliation of Adjusted EBITDA, cash interest expense and fixed charge coverage ratio.

30
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.
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.
Adjusted
Funds
From
Operations
(AFFO)
We
present
adjusted
funds
from
operations,
or
AFFO,
as
a
supplemental
operating
measure
because,
when
compared
year
over
year,
it
assesses
our
ability
to
fund
dividend
and
distribution
requirements
from
our
operating
activities.
We
also
believe
that,
as
a
widely
recognized
measure
of
the
operations
of
REITs,
AFFO
will
be
used
by
investors
as
a
basis
to
assess
our
ability
to
fund
dividend
payments
in
comparison
to
other
REITs.
We
calculate
adjusted
funds
from
operations,
or
AFFO,
by
adding
to
or
subtracting
from
FFO
(i)
non-real
estate
depreciation,
(ii)
amortization
of
deferred
financing
costs
(iii)
non
cash
compensation
(iv)
loss
from
early
extinguishment
of
debt
(v)
straight
line
rents
(vi)
fair
value
of
lease
revenue
amortization
(vii)
capitalized
leasing
payroll
(viii)
recurring
tenant
improvements
and
(ix)
capitalized
leasing
commissions.
Other
equity
REITs
may
not
calculate
AFFO
in
a
consistent
manner.
Accordingly,
our
AFFO
may
not
be
comparable
to
other
equity
REITs’
AFFO.
AFFO
should
be
considered
only
as
a
supplement
to
net
income
computed
in
accordance
with
GAAP
as
a
measure
of
our
operations.
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.
Earnings
Before
Interest
Taxes
Depreciation
and
Amortization
(EBITDA)
We
present
Earnings
Before
Interest
Taxes
Depreciation
and
Amortization
or
EBITDA
as
a
supplemental
operating
measure
because,
because
in
excluding
interest,
taxes,
depreciation
and
amortization,
it
permits
investors
to
view
income
from
operations
without
the
impact
of
the
cost
of
debt,
non
cash
depreciation
and
amortization
and
taxes.
We
also
believe
that,
as
a
widely
recognized
measure
of
the
performance
of
other
companies
in
the
data
center
industry
that
will
be
used
by
investors
as
a
basis
to
compare
our
operating
performance
with
that
of
others
in
that
industry.
However,
because
EBITDA
excludes
interest,
taxes,
depreciation
and
amortization
and
captures
neither
the
changes
in
the
value
of
our
properties
that
result
from
use
or
market
conditions,
nor
the
current
level
of
capital
expenditures
and
other
capitalized
items,
all
of
which
have
real
economic
effect
and
could
materially
impact
our
results
from
operations,
the
utility
of
EBITDA
as
a
measure
of
our
performance
is
limited.
Accordingly,
EBITDA
should
be
considered
only
as
a
supplement
to
net
income
as
a
measure
of
our
performance.
Each
of
FFO
and
Adjusted
EBITDA
exclude
items
that
have
real
economic
effect
and
could
materially
impact
our
results
from
operations,
and
therefore
the
utility
of
FFO
and
Adjusted
EBTIDA
as
a
measure
of
our
performance
is
limited.
Nothing
contained
herein
is
intended
to
revise
or
confirm
the
earnings,
FFO
or
acquisition
guidance
we
confirmed
on
our
Earnings
Conference
Call
held
on
May
9,
2007
and
available
on
our
website
at
www.digitalrealtytrust.com.

31
Reconciliation of non-GAAP items to their closest GAAP
2007 FFO  Reconciliation
(in millions, except per share and unit data)
Low end of
range
High end of
range
Net income before minority interest in operating partnership
$26.4
—
$28.9
Plus: Real estate related depreciation and amortization
126.9
—
128.0
Funds from operations
$153.3
—
$156.9
Less:  Preferred stock dividends
(19.3)
(19.3)
FFO available to common stockholders and unit holders
$134.0
—
$137.6
FFO per diluted share of common stock and unit outstanding
$1.91
—
$1.96
Funds from operations
(1)
Cash interest expense and fixed charges (including discontinued operations)
Q207
Q107
Q406
Q306
Q206
Q106
FY2006
FY2005
Q207
Q107
Q406
Q306
Q206
Q106
FY2006
FY2005
Net income available to common stockholders
$2,591
$18,641
$2,978
$11,342
$1,650
$1,642
$17,612
$6,087
Total GAAP interest expense (including
discontinued operations)
$15,142
$17,323
$14,569
$14,533
$12,181
$11,388
$52,671
$39,122
Capitalized interest
2,792
1,507
1,114
917
1,058
762
3,851
279
Minority interests in operating partnership including
discontinued operations
310
3,762
1,276
8,464
1,340
1,846
12,926
8,268
Change in accrued interest and other noncash
amounts
(3,575)
(948)
(3,206)
(2,590)
57
(1,906)
(7,645)
(4,345)
Real estate related depreciation and amortization
(2)
31,708
29,643
28,055
24,454
20,238
18,185
90,932
62,171
Cash interest expense
14,359
17,882
12,477
12,860
13,296
10,244
48,877
35,056
Real estate related depreciation and amortization related
to investment in unconsolidated joint venture
1,010
1,036
796
-
-
-
796
-
Scheduled debt principal payments and preferred
dividends
6,902
5,085
5,063
4,960
4,567
4,869
19,458
17,275
Gain on sale of assets
-
(18,049)
(80)
(18,016)
-
-
(18,096)
-
Total fixed charges
$21,261
$22,967
$17,540
$17,820
$17,863
$15,113
$68,335
$52,331
Funds from operations (FFO)
$35,619
$35,033
$33,025
$26,244
$23,228
$21,673
$104,170
$76,526
Funds from operations (FFO) per diluted share
$   0.51
$    0.50
$   0.48
$    0.41
$   0.38
$   0.36
$     1.63
$    1.37
Reconciliation of EBITDA
Net income per diluted share available to common
stockholders
$   0.04
$    0.32
$   0.06
$    0.30
$   0.05
$   0.06
$     0.47
$    0.25
Q207
Q107
Q406
Q306
Q206
Q106
FY2006
FY2005
Funds from operations (FFO)
$35,619
$35,033
$33,025
$26,244
$23,228
$21,673
$104,170
$76,526
Net income available to common stockholders
$2,591
$18,641
$2,978
$11,342
$1,650
$1,642
$17,612
$6,087
Non real estate depreciation
124
135
118
285
37
71
511
61
Amortization of deferred financing costs
1,321
1,389
1,115
916
937
795
3,763
2,965
Interest
15,142
17,323
14,569
14,533
12,181
11,388
52,671
39,122
Non cash compensation
836
507
491
430
435
431
1,787
481
Depreciation and amortization
31,832
29,778
28,173
24,739
20,275
18,256
91,443
62,232
Loss from early extinguishment of debt
-
-
6
40
425
57
528
1,021
Straight line rents
(5,770)
(5,111)
(5,810)
(3,856)
(4,233)
(3,843)
(17,742)
(13,023)
EBITDA
49,565
65,742
45,720
50,614
34,106
31,286
161,726
107,441
Above and below market rent amortization
(2,578)
(2,338)
(2,238)
(2,837)
(1,504)
(433)
(7,012)
(1,717)
Capitalized leasing compensation
(175)
(175)
(217)
(185)
(888)
(764)
(2,054)
(781)
Gain on sale of assets, net of minority interests
-
15,019
56
10,318
-
-
10,374
-
Recurring capital expenditures and tenant improvements
99
(393)
(2,574)
(344)
(338)
(904)
(4,160)
(2,897)
Capitalized leasing commissions
(3,836)
(439)
(3,716)
(1,523)
(1,682)
(265)
(7,186)
(3,051)
EBITDA, less effect of gain on sale of assets
$49,565
$50,723
$45,664
$40,296
$34,106
$31,286
$151,352
$107,441
Adjusted funds from operations
(1)
$25,640
$28,608
$20,200
$19,170
$16,417
$16,818
$72,605
$59,585
Reconciliation of Adjusted EBITDA
(2) Real estate depreciation and amortization was computed as follows:
Q207
Q107
Q406
Q306
Q206
Q106
FY2006
FY2005
EBITDA
$49,565
$65,742
$45,720
$50,614
$34,106
$31,286
$161,726
$107,441
Q207
Q107
Q406
Q306
Q206
Q106
FY2006
FY2005
Depreciation and amortization per income statement
$31,832
$29,399
$27,290
$23,768
$18,534
$16,537
$86,129
$59,616
Minority interests
310
3,762
1,276
8,464
1,340
1,846
12,926
8,268
Depreciation and amortization of discontinued operations
-
379
883
971
1,741
1,719
5,314
2,616
Preferred stock dividends
5,167
3,445
3,445
3,445
3,445
3,445
13,780
10,014
Non real estate depreciation
(124)
(135)
(118)
(285)
(37)
(71)
(511)
(61)
$31,708
$29,643
$28,055
$24,454
$20,238
$18,185
$90,932
$62,171
Adjusted EBITDA
55,042
72,949
50,441
62,523
38,891
36,577
188,432
125,723
Weighted-averageshares
outstanding
-
diluted
70,229
69,831
69,213
64,397
60,959
59,874
63,870
55,761
Gain on sale of assets
-
18,049
80
18,016
-
-
18,096
-
Adjusted EBITDA, less effect of gain on sale of
assets
$55,042
$54,900
$50,361
$44,507
$38,891
$36,577
$170,336
$107,441
Reconciliation of Net Operating Income (NOI)
Q207
Q107
Q406
Q306
Q206
Q106
FY2006
FY2005
Operating income
22,541
$
21,965
$
20,943
$
18,451
$
17,787
$
17,388
$
74,569
$ 
59,587
$ 
Less:
Other revenue
(247)
-
(197)
-
-
(168)
(365)
(5,829)
Add:
Depreciation and amortization
31,832
29,399
27,290
23,768
18,534
16,537
86,129
55,701
General and administrative
8,456
7,210
6,535
4,986
4,674
4,246
20,441
12,615
Other expenses
128
188
173
607
150
181
1,111
1,617
Net Operating Income
62,710
$
58,762
$
54,744
$
47,812
$
41,145
$
38,184
$
181,885
$
123,691
$
(1) Funds
from
operations
and
Adjusted
Funds
from
operations
for
all
periods
presented
above
includes
the
results
of
properties
sold in 2006 and 2007; 7979 East Tufts Avenue (July 2006), 100 Technology Center Drive (March 2007) and 4055 Valley View
Lane (March 2007).