Digital Realty Trust, Inc.

Good afternoon, and welcome to the Digital Realty First Quarter 2020 Earnings Call. Please note, this event is being recorded. During today's presentation, all parties will be in a listen-only mode. Following the presentation, we will conduct a question-and-answer session, and callers will be limited to one question plus a follow-up. Due to time constraints, we will conclude promptly at the hour. I would now like to turn the call over to Jon Stewart, Digital Realty's Senior Vice President of Investor Relations. John, please go ahead.

Thank you, Sean. The speakers on today's call are CEO Bill Stein and CFO Andy Power. Chief Investment Officer Greg Wright, Chief Technology Officer Chris Sharp, and EVP of Sales and Marketing Corey Dyer are also on the call and will be available for Q&A. Management may make forward-looking statements, including guidance and the underlying assumptions. Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. for a further discussion of risks related to our business, CR10-K, and subsequent filings with the SEC. This call will contain non-GAAP financial information. Reconciliations to net income are included in the supplemental package furnished to the SEC and available on our website. With that, I'd like to turn the call over to Bill.

Thank you, John. Good afternoon, and thank you all for joining us. The last 90 days have been unlike anything that we've experienced in our lifetime. and our hearts go out to all those who've been directly impacted by COVID-19, especially those who've lost loved ones. No one has been immune to this crisis, but the data center industry has been fortunate to remain open for business while huge portions of the global economy have been put on hold. As you probably know, data centers have been classified as critical infrastructure and essential businesses by government agencies around the world. Our top priority is, of course, the health and safety of our employees, customers, and partners. The entire data center industry has delivered a strong track record of operational excellence and uptime throughout this crisis. Digital reality has maintained 100% uptime, and while we have deferred preventative maintenance and have asked customers to limit site visits to critical activities, our doors have remained open and our data centers continue to provide the trusted foundation for the digital economy. Business continuity is our core competency. We have a full-fledged pandemic playbook to ensure that we maintain service levels while prioritizing the health and safety of our employees, customers, and partners. We have received very high marks from our customers for our professional protocol and proactive communication throughout the crisis. For this, we owe a debt of gratitude to our operations team and particularly our frontline employees in critical data center roles. Despite the challenging environment, they have continued coming to work so that industries, governments, and families can continue to connect, keep in touch, and keep commerce and information flowing. We are deeply appreciative of their efforts. Let's turn to our sustainable growth initiatives here on page four. In early January, we issued 1.4 billion euros of green euro bonds. This was our third green bond issuance, and we are now the largest U.S. REIT green bond issuer. Our green bond framework is aligned with the ICMA green bond principles, with a second-party opinion provided by Sustainalytics. In mid-January, we announced that we had achieved EPA Energy Star certification for an industry-leading 29 data centers last year. In early April, we were honored to be the first data center provider to receive an EPA Energy Star Partner of the Year Award for Energy Management. Finally, in late April, we announced a wind energy agreement to supply approximately 30% of our power needs in the Dallas, Texas area with renewable energy. On the social front, We are fortunate to be in a position to give back in the midst of this crisis. We have undertaken a comprehensive philanthropic initiative consisting of corporate contributions, employee matching gifts, and community outreach initiatives to help support organizations combating COVID-19 around the world. We are also waiving fees for expanded service exchange connectivity for the next six months to help customers in the government, medical, emergency services, and educational verticals keep critical services running. On the governance front, John Mandeville has joined the board of directors bolstering the additions of Alexis Bjornlund and Dash Jamison in January. John was previously chairman of the board at InterAction, and he has extensive experience in the technology and telecom sectors, having previously served as the CFO of Global Crossing and Singapore Technologies Telemedia, as well as president of APAC for British Telecom. We are pleased to welcome John to the board, and we look forward to benefiting from his leadership and expertise. On a more bittersweet note, we also have a departure to announce. Former chairman Dennis Singleton has reached mandatory retirement age and will not be standing for reelection at our annual meeting. Dennis had a distinguished career prior to joining our board, most notably as a founding partner of Speaker Properties. He has served as a digital realty director since our IPO in 2004, and he served as chairman of the board from 2012 to 2017. The company has grown nearly 50-fold since Dennis joined the board, and he has provided sound counsel and steady leadership through the most critical junctures in the company's history, including the strategic investments that have built the business as well as leadership changes at the Board and the C-Suite. He is a true gentleman, and his sage counsel and collegial bearing will be sorely missed. On behalf of the entire Board of Directors, I would like to thank Dennis for his more than 15 years of service to digital realty, and we wish him the very, very best. Let's turn to page five. Our first quarter investment activity showcased the breadth of our global platform, and crystallized the transformation of our business. The highlight of the quarter was, of course, our combination with interaction in a highly strategic and complementary transaction, creating a leading global provider of cloud and carrier-neutral data center solutions. We also closed the acquisition of a 49% interest in the Weston Building Exchange in Seattle. The Weston Building is one of the most densely interconnected facilities in North America, and is home to leading global cloud, content, and interconnection providers with over 150 carriers and more than 10,000 cross-connects. We closed on the sale of a portfolio of 10 North American data centers to Maple Tree in January, generating approximately $550 million of proceeds. We also launched our co-location product offering in Osaka, building upon the success of our hyperscale business in Japan. We opened a new data center in Dublin. The new Clonshaw facility supports the growth of Dublin's technology sector, which is projected to boom over the next decade. We acquired a small land parcel in Frankfurt adjacent to our existing Sossenheim campus to accelerate time to market and supply-constrained metro. Separately, InterAction has line of sight on a sizable land parcel expected to represent a strategic extension of its existing Frankfurt campus that would support the development of up to 180 megawatts of IT capacity, providing runway to support customer growth in key European metro for years to come. We announced that we turned the power on at SYN12, a 50 megawatt new development in Singapore, partially pre-leased to a major Singaporean bank and a leading global cloud provider. Finally, in April, Interaction announced it has broken ground on Interaction Paris Digital Park, a major expansion project in Paris with up to 85 megawatts of capacity. The first of four new data centers on this site will be Interaction's eighth in Paris, and the first phase is scheduled to open in late 2021. Let's turn to integration on page six. We believe our combination with interaction has the potential to change the global data center landscape. The combined organization is well-placed to meet the growing demand from cloud and content platforms, IT service providers, and enterprises seeking co-location, hybrid cloud, and hyperscale data center solutions. These are global long-term opportunities that we are ideally positioned to address. Integration is our top priority for 2020. The combined company offers a comprehensive global platform for our customers and gives us a runway for significant growth. We have obviously had to adapt to the current environment. The transaction closed on March 13 and we began sheltering in place the following week. Many of the initial meetings between teams that would have taken place in person have been virtual instead and that has obviously created some challenges but both teams have risen to the challenge. During that first week, we had to implement policies, procedures, and customer communications for operating in the midst of a global pandemic. As I mentioned earlier, I'm deeply grateful for the way both teams have come together to continue to serve our customers' needs throughout this crisis. Based on our work prior to closing and within just the past few weeks, we've made progress on our corporate integration efforts including finalizing our integration governance and combined EMEA leadership structure, which we will be rolling out in the coming weeks. There will be more to come over the next several quarters, but we are pleased with our progress to date. Let's turn to the macro environment on page seven. As we are all aware, the global economy has ground to a halt. As you've heard me say many times before, data center demand is not directly correlated to job growth, and we are fortunate to be operating in a business levered to secular demand drivers, both growing faster than global GDP growth and somewhat insulated from economic volatility. To put a finer point on the secular demand drivers underpinning our business, I'd like to draw your attention to page eight. McKinsey recently conducted a global survey of 3,600 B2B decision makers on their business outlook and priorities. The surveyed executive stated they value digital interactions with customers as two to three times more important than traditional interactions, reflecting continued need for digital infrastructure and capacity demand for data centers. According to the market intelligence firm Intricately, on average, enterprises utilize 27 cloud products deployed and consumed across eight points of presence globally. We are seeing indicators of this demand globally across our platform in the volume of new logos led by our enterprise vertical, as these firms shift their strategy to enable digital interactions for their customers. Digital Realty was recently named a worldwide leader in the IDC Marketscape Colocation and Interconnection Services Provider Assessment Report, noting Platform Digital provides a global scale platform to enable digital transformation in a consistent, modular fashion. We are honored by this strong validation of our platform and our unique positioning to capture the global data center demand opportunity. Given the resiliency of the demand drivers underpinning our business and the relevance of our portfolio to meet these needs, we believe we are well positioned to continue to deliver sustainable growth for customers, shareholders, and employees, whatever the macro environment may hold in store. With that, I'd like to turn the call over to Andy to take you through our financial results.