Business Context and Reporting Period
Company: Digital Realty Trust, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: November 29, 2007
Subject: Reclassification of financial results for properties sold in March 2007 (4055 Valley View Lane and 100 Technology Center Drive) to "discontinued operations" in accordance with FAS 144. This filing revises the consolidated financial statements for the years ended December 31, 2006, 2005, and 2004 previously reported in the Form 10-K.
Key Financial Metrics (Discontinued Operations)
The following table summarizes the results of operations for the sold properties, now classified as discontinued operations (in thousands):
| Year Ended Dec 31 | 2006 | 2005 | 2004 |
|---|---|---|---|
| Total Revenues | $9,827 | $9,810 | $8,988 |
| Total Expenses | $9,165 | $8,926 | $8,003 |
| Income from Discontinued Operations (pre-minority interests) | $662 | $884 | $985 |
Note: This filing does not provide updated consolidated revenue, profit, cash flow, debt, or liquidity metrics for the company's continuing operations. It only details the specific adjustments for the discontinued properties.
Material Changes Versus Prior Period
- Accounting Reclassification: Results from 4055 Valley View Lane and 100 Technology Center Drive, sold in March 2007, have been moved from continuing operations to discontinued operations for the years 2004, 2005, and 2006.
- Document Updates: The Form 10-K for the year ended December 31, 2006, has been revised. Specifically, the Statements of Operations, Notes 1, 2, 7, 15, 16, and 17, Selected Financial Data (Part II, Item 6), and Management's Discussion and Analysis (Part II, Item 7) have been updated to reflect this change.
Guidance, Outlook, and Risks
Management Commentary: The filing states that, except for the reclassification described above, no other adjustments or updates are made to the information presented in the consolidated financial statements or elsewhere in the Form 10-K.
Guidance/Outlook: The filing text does not provide new forward-looking guidance or outlook.
Risks/Contingencies: No new risks or contingencies are disclosed in this specific 8-K filing beyond the accounting adjustment.
Investor Verification Checklist
- Verify the revised Consolidated and Combined Financial Statements filed as Exhibit 99.1.
- Review the updated Selected Financial Data in Exhibit 99.2 to ensure historical comparisons reflect the discontinued operations adjustment.
- Examine the updated Management's Discussion and Analysis (Exhibit 99.3) for context on how the reclassification impacts the interpretation of past performance.
- Confirm that the sale of 4055 Valley View Lane and 100 Technology Center Drive in March 2007 is fully accounted for in the discontinued operations section of the 2006 Form 10-K.