Business Context and Reporting Period
Company: Digital Realty Trust, Inc. and Digital Realty Trust, L.P.
Filing Type: Form 8-K (Current Report)
Date of Report: September 14, 2010
Event: Regulation FD Disclosure regarding adjustments to conversion and exchange rates for preferred stock and senior debentures.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, debt levels, or liquidity metrics. The document focuses exclusively on the mechanics of dividend declarations and their impact on security conversion rates.
Material Changes
The filing details the following material changes effective September 13, 2010:
- Dividend Trigger: The company declared and paid common stock dividends in excess of the "reference dividend" for the quarters ended March 31, 2010, through September 30, 2010.
- Series C Preferred Stock Adjustment: The excess dividends triggered an adjustment to the conversion rate of the 4.375% Series C Cumulative Convertible Preferred Stock to 0.5290 shares of common stock per $25.00 liquidation preference.
- Notice to Debenture Holders: A Notice of Adjustment to Exchange Rate is being distributed to holders of the 5.50% Exchangeable Senior Debentures due 2029.
Current Conversion and Exchange Rates
As of September 13, 2010, the rates are as follows:
| Security | Rate |
|---|---|
| 4.375% Series C Cumulative Convertible Preferred Stock | 0.5290 shares per $25.00 liquidation preference |
| 5.500% Series D Cumulative Convertible Preferred Stock | 0.6030 shares per $25.00 liquidation preference |
| 4.125% Exchangeable Senior Debentures due 2026 | 31.4110 shares per $1,000 principal amount |
| 5.50% Exchangeable Senior Debentures due 2029 | 23.5360 shares per $1,000 principal amount |
Guidance, Outlook, and Risks
Management Commentary: The filing states that adjustments to conversion rates are not required until the adjustment would require a change of at least 1% of the conversion rate. Any adjustment not made is carried forward for future calculations.
Risks/Contingencies: The information is furnished pursuant to Item 7.01 and is not deemed "filed" for purposes of Section 18 of the Exchange Act. It shall not be incorporated by reference into other filings.
Investor Verification Checklist
- Verify the specific dividend amounts paid in the quarters ended March 31, 2010, through September 30, 2010, to confirm the calculation of the "reference dividend" excess.
- Confirm the updated conversion rate of 0.5290 shares for the Series C Preferred Stock in subsequent trading or proxy materials.
- Review the attached Exhibit 99.1 (Notice of Adjustment to Exchange Rate) for specific details regarding the 5.50% Exchangeable Senior Debentures due 2029.
- Monitor future filings for further adjustments if the 1% threshold is met again.