Equity and Accumulated Other Comprehensive Income, Net

(a) Equity Distribution Agreements

Digital Realty Trust, Inc. entered into equity distribution agreements in June 2011, which we refer to as the 2011 Equity Distribution Agreements, with each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC, or the Agents, under which it can issue and sell shares of its common stock having an aggregate offering price of up to $400.0 million from time to time through, at its discretion, any of the Agents as its sales agents. The sales of common stock made under the 2011 Equity Distribution Agreements will be made in “at the market” offerings as defined in Rule 415 of the Securities Act. Cumulatively through September 30, 2015, Digital Realty Trust, Inc. has generated net proceeds of approximately $342.7 million from the issuance of approximately 5.7 million common shares under the 2011 Equity Distribution Agreements at an average price of $60.35 per share after payment of approximately $3.5 million of commissions to the sales agents and before offering expenses. No sales were made under the program during the nine months ended September 30, 2015 and 2014. As of September 30, 2015, shares of common stock having an aggregate offering price of $53.8 million remained available for offer and sale under the program.

(b) Forward Equity Sale

On July 20, 2015, Digital Realty Trust, Inc. completed an underwritten public offering of 10,500,000 shares of its common stock, all of which were offered in connection with forward sale agreements it entered into with certain financial institutions acting as forward purchasers. The forward purchasers borrowed and sold 10,500,000 shares of Digital Realty Trust, Inc.’s common stock in the public offering.

Digital Realty Trust, Inc. did not receive any proceeds from the sale of our common stock by the forward purchasers in the public offering. On October 8, 2015, Digital Realty Trust, Inc. physically settled in full the forward sale agreements by issuing an aggregate of 10,500,000 shares of its common stock to the forward counterparties in exchange for net proceeds of approximately $674.1 million. Digital Realty Trust, Inc. used the net proceeds from the physical settlement of the forward sale agreements to fund a portion of the Telx Acquisition.

6.350% Series I Cumulative Redeemable Preferred Stock

On August 24, 2015, Digital Realty Trust, Inc. issued 10,000,000 shares of its 6.350% series I cumulative redeemable preferred stock (the "Series I Preferred Stock") for net proceeds of approximately $241.7 million. We used the net proceeds from the offering to fund a portion of the aggregate purchase price for the Telx Acquisition. Prior to the closing of the Telx Acquisition, we loaned the net proceeds from the offering to the Operating Partnership. Dividends are cumulative on the Series I Preferred Stock from the date of original issuance in the amount of $1.5875 per share each year, which is equivalent to 6.350% of the $25.00 liquidation preference per share. Dividends on the Series I Preferred Stock are payable quarterly in arrears. The first dividend payable on the Series I Preferred Stock on December 31, 2015 will be a pro rata dividend from and including the original issue date to and including December 31, 2015 in the amount of $0.56003 per share. The Series I Preferred Stock does not have a stated maturity date and is not subject to any sinking fund or mandatory redemption provisions. Upon liquidation, dissolution or winding up, the Series I Preferred Stock will rank senior to Digital Realty Trust, Inc. common stock and rank on parity with Digital Realty Trust, Inc.’s series E cumulative redeemable preferred stock, series F cumulative redeemable preferred stock, series G cumulative redeemable preferred stock and series H cumulative redeemable preferred stock with respect to the payment of distributions and other amounts. Digital Realty Trust, Inc. is not allowed to redeem the Series I Preferred Stock before August 24, 2020, except in limited circumstances to preserve its status as a REIT. On or after August 24, 2020, Digital Realty Trust, Inc. may, at its option, redeem the Series I Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends on such Series I Preferred Stock up to but excluding the redemption date. Holders of the Series I Preferred Stock generally have no voting rights except for limited voting rights if Digital Realty Trust, Inc. fails to pay dividends for six or more quarterly periods (whether or not consecutive) and in certain other circumstances. Upon the occurrence of specified changes of control, as a result of which neither Digital Realty Trust, Inc.’s common stock nor the common securities of the acquiring or surviving entity (or American Depositary Receipts representing such securities) is listed on the New York Stock Exchange, the NYSE MKT, LLC or the NASDAQ Stock Market or listed or quoted on a successor exchange or quotation system, each holder of Series I Preferred Stock will have the right (unless, prior to the change of control conversion date specified in the Articles Supplementary governing the Series I Preferred Stock, Digital Realty Trust, Inc. has provided or provides notice of its election to redeem the Series I Preferred Stock) to convert some or all of the Series I Preferred Stock held by it into a number of shares of Digital Realty Trust, Inc.’s common stock per share of Series I Preferred Stock to be converted equal to the lesser of:



			the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference plus the amount of any accrued and unpaid dividends to, but not including, the change of control conversion date (unless the change of control conversion date is after a record date for a Series I Preferred Stock dividend payment and prior to the corresponding Series I Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in this sum) by (ii) the common stock price specified in the Articles Supplementary governing the Series I Preferred Stock; and 0.76231, or the share cap, subject to certain adjustments;

subject, in each case, to provisions for the receipt of alternative consideration as described in the Articles Supplementary governing the Series I Preferred Stock. Except in connection with specified change of control transactions, the Series I Preferred Stock is not convertible into or exchangeable for any other property or securities of Digital Realty Trust, Inc.

(d) Noncontrolling Interests in Operating Partnership

Noncontrolling interests in the Operating Partnership relate to the interests that are not owned by Digital Realty Trust, Inc. The following table shows the ownership interests in the Operating Partnership as of September 30, 2015 and December 31, 2014:



	September 30, 2015			December 31, 2014
	Number of units	Percentage of total		Number of units	Percentage of total
Digital Realty Trust, Inc.	135,843,684	98.0	%	135,626,255	97.8	%
Noncontrolling interests consist of:
Common units held by third parties	1,421,314	1.0		1,463,814	1.1
Incentive units held by employees and directors (see Note 13)	1,414,299	1.0		1,549,847	1.1
	138,679,297	100.0	%	138,639,916	100.0	%

Limited partners have the right to require the Operating Partnership to redeem part or all 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 Digital Realty Trust, Inc. 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. Pursuant to authoritative accounting guidance, Digital Realty Trust, Inc. evaluated whether it controls the actions or events necessary to issue the maximum number of shares that could be required to be delivered under the share settlement of the noncontrolling Operating Partnership common and incentive units. Based on the results of this analysis, we concluded that the common and incentive Operating Partnership units met the criteria to be classified within equity.

The redemption value of the noncontrolling Operating Partnership common units and the vested incentive units was approximately $170.5 million and $179.0 million based on the closing market price of Digital Realty Trust, Inc. common stock on September 30, 2015 and December 31, 2014, respectively.

The following table shows activity for the noncontrolling interests in the Operating Partnership for the nine months ended September 30, 2015:



	Common Units		Incentive Units		Total
As of December 31, 2014	1,463,814		1,549,847		3,013,661
Redemption of common units for shares of Digital Realty Trust, Inc. common stock (1)	(42,500	)	—		(42,500	)
Conversion of incentive units held by employees and directors for shares of Digital Realty Trust, Inc. common stock (1)	—		(76,087	)	(76,087	)
Cancellation of incentive units held by employees and directors	—		(150,140	)	(150,140	)
Grant of incentive units to employees and directors	—		90,679		90,679
As of September 30, 2015	1,421,314		1,414,299		2,835,613


(1)	This redemption was 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 condensed consolidated balance sheet of Digital Realty Trust, Inc.

(e) Dividends

We have declared and paid the following dividends on our common and preferred stock for the nine months ended September 30, 2015 (in thousands, except per share data):



Date dividend declared	Dividend payment date	Series E Preferred Stock		Series F Preferred Stock		Series G Preferred Stock		Series H Preferred Stock		Common Stock
February 25, 2015	March 31, 2015	$	5,031	$	3,023	$	3,672	$	6,730	$	115,419
May 12, 2015	June 30, 2015	5,031		3,023		3,672		6,730		115,458
August 11, 2015	September 30, 2015	5,031		3,023		3,672		6,730		115,454
		$	15,093	$	9,069	$	11,016	$	20,190	$	346,331

Annual rate of dividend per share		$	1.750	$	1.656	$	1.469	$	1.844	$	3.400

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

(f) Accumulated Other Comprehensive Income, Net

The accumulated balances for each item within other comprehensive income, net are as follows (in thousands):



	Foreign currency translation adjustments				Cash flow hedge adjustments			Accumulated other comprehensive income (loss), net
Balance as of December 31, 2014	$	(39,567	)		$	(5,479	)	$	(45,046	)
Net current period change	(40,688		)	⁽¹⁾	(4,290		)	(44,978		)
Reclassification to interest expense from interest rate swaps	—				2,036			2,036
Balance as of September 30, 2015	$	(80,255	)		$	(7,733	)	$	(87,988	)

(1) During the first nine months of 2015, the U.S. dollar was generally stronger against the other currencies in which we transacted business, primarily the Euro and British pound sterling.