Welcome to the Digital Realty Second Quarter 2015 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this call is being recorded. I would now like to turn the conference over to John Stewart, Senior Vice President of Investor Relations. Mr. Stewart, please go ahead.

Great. Thank you, Denise. The speakers on today's call will be CEO, Bill Stein; Chief Investment Officer, Scott Peterson; SVP of Sales and Marketing, Matt Miszewski; and Chief Financial Officer, Andy Power. Chief Operating Officer, Jarrett Appleby, is on the call as well and will be available for Q&A. We've posted a presentation to the Investors section of our website to accompany management's prepared remarks. You're welcome to download the presentation and follow along throughout the call. Management may make forward-looking statements on this call. Forward-looking statements are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual results to differ materially. Forward-looking statements include statements related to future financial and other results, including 2015 guidance and the underlying assumptions. For a further discussion of the risks and uncertainties related to our business, see Form 10-K for the year ended December 31, 2014 and subsequent filings with the SEC. This call will contain non-GAAP financial information. Explanations and reconciliations to net income are included in the supplemental package furnished to the SEC and available on our website at digitalrealty.com. Management's prepared remarks will be followed by a Q&A session. Questions will be limited to one plus a follow-up. And if you have additional questions, please feel free to jump back into the queue. Now, I'd like to turn the call over to Bill Stein.

Thanks John. Good afternoon and thank you all for joining us. I'm happy to report that Digital just completed another solid quarter, marked by strong execution against our core strategic objectives. I'd like to begin, as usual, with "The Way Forward" slide on page two of our earnings deck. We continued to make progress towards our top priority of driving improved return on invested capital. And we achieved a 20-basis-point pickup during the second quarter, building upon the 100-basis-point improvement we delivered over the previous five quarters. In terms of recycling capital, we realized a $77 million gain from the sale of one non-core property, and we are in active negotiations on several others. Scott Peterson will provide additional detail. As you know, we've put a great deal of effort into stabilizing the business and derisking the development pipeline over the past year and a half. With respect to inventory management, we have reduced our finished inventory by nearly half since our Investor Day in November 2013. And our $630 million pipeline of active data center development projects is over 80% pre-leased at stabilized cash yields, just below the high end of our 10% to 12% target range. From the current position, we believe we are in solid footing to pivot towards the next phases of growth for Digital Realty, particularly with the recent addition of several key executive-level hires, notably, including Andy Power, Jarrett Appleby and Michael Henry. I'm very pleased with the progress that the entire Digital team has made on each of the strategic objectives spelled out here. But today, I'd like to focus, and I'm sure most of you will too, on the red call-out box highlighting innovative product offerings, colocation and ecosystem initiatives. As you are all aware, just two weeks ago, we announced an…

Thank you, Bill. Picking up here on page five, I'd like to first highlight the attractive growth profile of this business. As you can see from this chart in the upper left quadrant, the top line has grown at over 20% compound annual growth rate and the interconnection business has grown even faster. The drivers have been volume growth along with pricing power as reflected in the charts on the bottom half of the page. We view the interconnection business as high growth and highly desirable with high barriers to entry. Top-line growth has also historically translated to growth in cash flow as demonstrated by the core EBITDA time series in the upper right quadrant. I'd like to pause for a moment to focus on the absolute numbers in this chart and to clarify a few points here. For starters, I can tell you that we underwrote projected EBITDA of $148 million in 2016, which represents 11% growth from the $133 million run rate core EBITDA as of the end of the first quarter. I would like to point out that core EBITDA excludes $22 million of non-cash deferred rent expense paid to third-party landlords in 2016. The rent that Telx previously paid to Digital will be an intercompany elimination going forward. We do intend to run Telx as a standalone line of business reporting to Jarrett Appleby. We also underwrote $15 million of cost synergies, primarily redundant corporate overhead, of which $10 million runs through the P&L and $5 million represents capitalized compensation costs. It is important to note that our $148 million of projected 2016 EBITDA does not include any cost synergies. We also have not factored any revenue synergies into our near-term underwriting expectations, although we believe the longer-term revenue synergies could be quite meaningful. The EBITDA…

Thank you, Scott. As shown on page 14, we signed new leases representing a little over $37 million of annualized GAAP rent during the second quarter. Social, mobile, analytics, cloud and content accounted for over 80% of our second quarter lease signings. Existing customers represented just over 90% of our second quarter leasing activity, and we added 16 new logos in the quarter, bringing the full-year total to 35. Our colocation segment contributed $3.7 million or 10% of our second quarter leasing activity. This was at the low end of the segment's recent quarterly run rate, largely reflecting the success we have had supporting the growth of existing colocation customers and some larger footprint requirements of greater than 300 kilowatts. You may recall that earlier this year, we revised our definition of colocation to less than 300 kilowatts, to better align our sales force with our customers. We haven't traditionally called out colocation re-leasing spreads in our earnings, but it is worth noting that the mark-to-market on colo renewal leases was up 10% on a cash basis during the quarter, and re-leasing spreads were positive on over 90% of the colocation deals we executed during the second quarter. We commenced leases totaling $65 million of annualized GAAP rent during the second quarter, a record high for lease commencements. The backlog came down by roughly $30 million as a result from $104 million last quarter to $73 million currently, which you can see reflected in the chart on the top half of page 15. The weighted average lag between signings and commencements also reached a record during the second quarter at 2.5 months, as shown in the chart on the bottom half of the page. Turning to page 16, cash re-leasing spreads were positive on Turn-Key as well as Powered Base…

Thank you, Matt. We reported 2Q 2015 core FFO per share of $1.30, $0.05 ahead of consensus estimates. The outperformance during the quarter was driven by a combination of several factors including: $0.02 from successful property tax appeal in the Central Region and the reversal of a property tax accrual due to the lapse of a statute of limitations in the West Region, $0.02 from the early commencement of several large leases upon completion of all landlord obligations and transfer to tenant control during the second quarter, and roughly $0.01 from delayed timing of property operating expenses, asset sales and a somewhat lighter foreign currency headwind. As shown on the next page, however, FX represented roughly a 300 basis points drag on the year-over-year growth in our reported results from the top line to the bottom line. In terms of operating performance, portfolio occupancy improved 140 basis points sequentially to 93.5% and same-capital occupancy ticked up 10 basis points sequentially to 94.8%. As a reminder, we do expect portfolio occupancy to dip in the third quarter due to a couple of known Powered Base Building move-outs in the Bay Area, before bouncing back to finish up slightly by the end of the year. As Matt noted in his remarks, cash re-leasing spreads were positive for both Turn-Key and Powered Base Building renewals during the second quarter. We've revised our full year forecast from slightly negative to slightly positive and we are encouraged by the gradual improvement in the mark-to-market across our portfolio. As shown on page 20, same-capital cash NOI was up 2.8% in the second quarter, squarely in the middle of our 2% to 4% guidance range. However, it is worth pointing out that on a constant currency basis, same-capital cash NOI would be up 5.5%. For the full…

Thank you. We will now begin the question-and-answer session. The first question will come from Vance Edelson of Morgan Stanley. Please go ahead. Vance Edelson - Morgan Stanley & Co. LLC: Great. Thanks. So I guess this is my first question, Bill, you mentioned the additional uptick in ROIC by 20 basis points after last quarter's more sizeable gain, which means we're probably pushing double-digits now. How should we think about the upside going forward and do you think this metric might plateau a bit from here?

Well, I think we're actually in the low 9%s with that. We were at 8% and I think we're now at – if my math is right in my head, about 9.2% – 9.5%. John's giving me the 9.5% sign here. Vance Edelson - Morgan Stanley & Co. LLC: So, pushing 10%.

Pushing 10%. That's right. And obviously, we think that the Telx deal will be [audio skip] (33:31) for the long haul. Vance Edelson - Morgan Stanley & Co. LLC: Okay. And then as my follow-up, I think there was mention of cycling through the peak vintage expirations now. Could you add any granularity there around the vintage of leases rolling off these days, how many are from the recession era and how might that play into the mark-to-mark pricing strength that you expect going forward?

We would have to get back to you with that precise data. We don't have that right at hand.

And our next question will come from Jonathan Atkin of RBC Capital Markets. Please go ahead.

Slide 18 gives an interesting overview of the supply dynamic – supply-demand dynamic. And I wondered if you could qualitatively round out the picture of how you would characterize Europe as well as Asia-Pac. And then my follow-up is just related to the CapEx that you talked about associated with filling up the Telx inventory, the $15 million and the $25 million, I didn't quite understand what that consists of. Is that sales CapEx, meaning cabinets and cages or were there other factors in there? Thank you.

So, thanks Jonathan for the question. In terms of supply and demand dynamics in Europe and APAC, we're looking at supply and demand dynamics that are roughly equivalent to the report out that we gave last quarter in terms of the supply. The supply characteristics in London remain in balance for us. And we feel that we've got sufficient supply for us to hit the demand on both our Crawley campus in terms of land bank that we've got, as well as shell that we've got available to us in our Woking campus, as well. We continue to have significant supply available to us in land bank in Amsterdam in Europe. And in Asia-Pacific, as Scott mentioned, we recently closed on an acquisition in Asia-Pacific in Singapore, so we continue to have a considerable amount of supply to hit the needs for the demand in that region, as well.

And then on the CapEx side, Jonathan, yeah, that consists of cabinets, cages, installation expenses and commissions (36:08) those sorts of things.

Our next question will come from Jon Petersen of Jefferies. Please go ahead.

Great, thank you. I wanted to ask about the development pipeline, the size of it's down about $100ish million from where it was last quarter. Just curious about the conscious decision ahead of the Telx acquisition, just trying to kind of save capital, or whether that's you guys being more conservative than just a lack of opportunities for new development.

Hey John, this is Andy Power. I can speak to that a little bit. I don't think this was anything about saving capital. We kind of looked at funding the Telx acquisition on to itself and have laid out now the equity done and we'll look to go do preferred and bonds in the latter half of the year. Sitting on the Investment Committee over the last three months as a new participant, I think it's just been very focused on getting the timing of our investment as lined up as close to our – where we see demand. I don't think there was a purpose kind of preservation or capital there.

Yes, Jonathan, this is Matt. In terms of development pipeline that we've got, you'll notice that we've got about 80% pre-leased in terms of developments that are happening, and we've experienced a great amount of participation in terms of reacting to demand with our just-in-time development. So we think that's working well in our favor.

Okay. And then in terms of Telx, I'm kind of curious about the mechanics of integrating that portfolio with, I guess, some of your colocation properties is what makes the most sense. So I guess you could use maybe like 365 Main St as an example. I assume you'll be taking the Telx brand and infrastructure into a facility like that. And so, l guess, the process of doing that and realizing the revenue synergies, is it just buying dark fiber between that and the Telx facility? I'm just kind of – if you could just kind of explain how you go about integrating the Telx platform, kind of maybe you can quantify what the revenue synergies might be.

So, first of all, a great question. First of all, we're treating it as a line of business, both as an asset or a campus, tethered into our campuses, taking their interconnection hub and connecting it to our data center campuses. And because of the prior relationship as they were a client of ours, we have that already set up in most of the markets out there. So our first stage is connecting that. The second is we've looked at the assets as a combined entity, as a line of business for the product. So for colocation and interconnection products, we want to integrate that, all our legacy colocation properties into the portfolio and productize it. And then we're going to leverage the product expertise they have in colocation and go to market around that and the interconnection and networking services. So the first step is give them basically our capability, integrate it, and then we want to launch it as we were saying on a worldwide basis in the major markets where we can add colocation to their portfolio.

The next question will come from Jonathan Schildkraut of Evercore ISI.

All right. Good evening, thanks for taking the questions and also thanks for all of that additional disclosure on Telx in the presentation today. It was very helpful. I'd like to ask just about the progress really with your sort of top customers, certainly noticed that the top 20 customer list moved quite a bit, but really saw a lot of progress with some big names here, IBM, which has been sort of continued success story for you, but also LinkedIn and Oracle. I was wondering if you might provide some additional color as to what's going on with some of those big customers. Thanks.

Yeah, Jonathan, this is Matt. Thanks so much for the question. And my team in particular looks at moving amongst those top 20 with great interest as well. We're thrilled to have IBM at the top of the list and, in particular, with regard to the workloads that we're landing with them. I talked a little bit in my prepared statements about the continued persistence of the SMACC-oriented workloads and movement amongst the top 20 is really sort of testament to the ability of Digital's great operational team to be able to provide solutions that match the needs of those SMACC workloads. IBM is a great example of that. A good deal of those workloads happen to be soft layer-oriented public cloud. Oracle also was very happy to break itself into the top 20 this quarter with their public cloud offerings as well. And on the social side, we continued to expand our presence with LinkedIn. What's great about these particular types of clients, Jonathan, is not that we get one-time wins with them, but they have a tendency to be repeat hitters and continue to grow with us, not just in one location, but in all of our portfolio assets throughout the world. So it's a great win for Digital.

Great. And as a follow-up, I'd love for you to maybe give us a little sense as to how we could connect some of the big cloud players you have in terms of the Digital portfolio of customers into the Telx business. You know, one of the numbers that really jumped out was sort of the very limited penetration Telx has to-date in terms of the cloud vertical for their revenue base. I think it was 8%. So I'd be interested to hear how you can match up sort of the Telx asset and value proposition with some of the core customers that you have in your base.

Yeah, Jonathan. Great. It really was sort of, again, testament to the combination of these two organizations making a heck of a lot of sense. Our ability to connect the cloud workloads that we've got in terms of IC core with Telx interconnectivity is absolutely incredible. So if you look at the number, the number of customers that we'll now be able to work together with, over 1,200 customers, to take from Telx's facilities, connect them into our cloud workload, it sort of reminds folks of several of the things I've said on a number of the past earnings calls, which is the hybrid cloud environment and connecting those cloud instances with enterprises is the magic that Digital can bring. And now Digital can bring it faster and better with the combination of Telx.

And just a bit on two concrete examples of that. If you take their network strength, Jonathan, in markets like Ashburn and Dallas, where we traditionally have folks connecting through other locations into our sites, we're going to go directly and offer that product directly into our sites into the cloud compute engines. So you get the power of what we have in power and compute engines directly connecting into our sites.

The next question will come from Colby Synesael of Cowen & Company. Please go ahead. Colby A. Synesael - Cowen & Co. LLC: Great. Thank you. Two, if I may. So like Jonathan, just really appreciate the information you guys provided on Telx. Very helpful. I guess, to that point, seems like there's a lot of low-hanging fruit to simply increase the utilization rates within Telx's current facilities and then, perhaps, leveraging off of some of DLR's facilities in those same markets. But when do you think you'd be ready to actually expand the Telx presence internationally? It seems like that's a really big opportunity when you could actually bring it into some of the markets that you're already in, in areas like Europe and in Asia. And then my second question, just more to the guidance. I was wondering if you could just talk about the pacing of speculative leasing. I see that it obviously increased another $10 million in terms of what you're able to write off in the second quarter. But how does that compare to what your expectations were going into this year? Thanks.

Colby, I'll take the first one on global expansion. We are looking to expand globally really in early 2016. Some of the markets that we outlined there as Phase I, London and Singapore and Dublin, are low-hanging fruit for us. And we're doing development projects in other markets. In every single data center campus now, we're building our colocation and interconnection capabilities. So you'll see that expansion start in 2016.

Yeah. And, Colby, just really quick on your second one and I'll turn it over to Andy, too. Recall that we raised guidance on leasing last quarter, and we feel real good about the remainder of the year.

Not much more to add to that, Colby. We're on track.

Our next question will come from Dave Rodgers of Baird. Please go ahead. Dave B. Rodgers - Robert W. Baird & Co., Inc. (Broker): Yeah. Good evening, guys. Maybe to elaborate a little bit on the sales cycle, I think if I was reading through the release right, two and a half months maybe was the average commencement time between signings and actual commencement. So, I don't know if that was a mix issue or you're just seeing kind of greater demand coming through faster? Any color would be helpful.

Yeah. Dave, so in terms – we've had a focus on reducing the gap from book-to-bill for some time. And we certainly think we've gotten to a sweet spot. I think that the 2.5-months gap is a little bit of a mix of customers in this particular quarter. I wouldn't suggest that the 2.5 months will stay that way ongoing, but we should be in a sweet spot in that 2.5-month to three-month range. Dave B. Rodgers - Robert W. Baird & Co., Inc. (Broker): Okay. And then maybe Andy or Bill, maybe talk a little bit about leverage and the idea of – I know you issued the equity, but not taking leverage down a little further using the growth profile of Telx here as an excuse to maybe delever and move a little faster on that side of the equation. So thoughts about the asset sale plan and leverage overall would be helpful.

Sure, Dave, this is Andy speaking. We feel quite comfortable now that we've got the $700 million approximately of equity off, pro forma for the Telx acquisition, which will likely close later in the year, we are below our 5.5 times target. Based on some of the things we've already said, we do think we're buying a very attractive business with some embedded growth in it. So it spurs some of the EBITDA which will bring us down, as well. But we think the balance sheet remains positioned for growth pro forma for the equity we just raised.

The next question will come from Vincent Chao of Deutsche Bank. Please go ahead.

Hi. Good afternoon, everyone. I just want to go back to the accretion that you talk about for Telx, the 1% on FFO, 3% for AFFO. I just wanted to clarify because you talked about a lot of different ways you can check value here, but do those numbers include any of the synergies you talked about on the cost side, the $15 million, and that presumably doesn't include the revenue synergies, but just wanted to clarify on the cost side.

Sure, Vin. The synergies that we've underwritten, the 1% and 3% to FFO and AFFO respectively, they include roughly $15 million of expense synergies, of which roughly $10 million flows through our P&L. The other $5 million is really the capitalized items. They do not include any revenue synergies. While we think the revenue synergies could be quite significant as we've already discussed, we have not included them in our underwriting for 2016 financial impact.

Okay. Thanks. And then just as a follow-up, in terms of the sales force at Telx there, and I know there is going to be some folks leaving at the sort of the executive level. But since the deal has been announced, have you had discussions with some of the key sales guys there and have any sense about what the, you know, turnover might look like as a result of the deal?

This is Jarrett, they're a highly qualified team. They're very focused on their community, you know, 95% of it is in five vertical segments. Matt and I are totally aligned on, you know, going after and retaining the top talent and they seem very interested. We're going to give them a heck of a lot to sell. It's going to be a global platform and leveraging the relationships of 1,250 customers now worldwide and also giving them capabilities that only Digital can bring in that community. So, I think the leverage of the two is very, very [audio skip] (48:58).

Yeah. Vin, we've had a great relationship, as you know, with Telx as one of our major customers and with the leadership over there being so ingrained with ours over here, we had a great relationship in the past and we look forward to continuing that relationship a little more directly in the future.

The next question will come from Jordan Sadler of KeyBanc Capital Markets. Please go ahead.

Hi, thank you. Bill, one for you on this deal being a sizeable M&A transaction, particularly, the largest transaction you're overseeing since you're sitting in the CEO chair. It's easy to see the success we're seeing in the colocation and interconnection businesses in particular, and how sort of layering that up over the DLR platform would make sense intuitively. But you're also buying from a private equity smart seller, if you will. And my question is really how do you mitigate the downside? I mean, I want to straight-line the growth here up into the right, like everybody else. But I also want to understand how do you mitigate the downside risk in sort of the near-term to intermediate-term?

Well, that was obviously all part of the underwriting process. One of the things we looked at was the churn that Telx had. And it was – their customers are incredibly sticky at roughly 0.6%. And the average life of their customers is over nine years. So, while the contract duration is short compared to ours, their customers do stay with them, and that was an important piece of our underwriting in terms of looking at potential downside. We've also – I mean, Matt mentioned that the re-leasing spreads on our colo business were up 10% this last quarter, and that gives us some encouragement as well in terms of how to underwrite the rents on this business. We'd underwrite them as up 10%, I think we underwrote them – I'm looking at Scott here, probably flat. But – he's nodding. But the point is, we're seeing a lot of demand in the colo business and pressure on rents.

And I think I would add to that, at a 68.5% utilization rate, all we have to do to protect the downside is maintain that. We have an awful lot of potential growth if we just fill up the space that's already built and available.

Yeah. And Jordan, we see our customers coming to us with a multiplicity of demands and now we're able to hit them together. So, I know it's been said before in M&A transactions, but combination of Telx and Digital is better together. We think that the value we are able to hit as one organization will increase the value to our customers and that we'll capture that value here at Digital.

And just as a follow-up to that, in terms of reporting structure, I think I heard that Jarrett, you'd be heading up the, I don't know, if with the integration or just heading up sort of the Telx within Digital. But does that include the sales effort or is that going to be managed by Matt?

Yeah, that will include the sales effort. Matt and I are coordinating how to support global accounts. He's got some tremendous relationships. We're working through that process right now. But it is a line of business, and we want to build out the product, keep a focus on those clients and keep serving them, and I think bringing in additional assets into that portfolio capability.

The next question will come from Emmanuel Korchman of Citi. Please go ahead.

Good evening guys. Scott, I think when we were going through the slide deck, you had mentioned that the numbers on page six had come down from when you had previously given them. Was there a specific driver that would bring those potential incremental revenue numbers down?

No, nothing changed. It was in the heat of pulling everything together quickly, there was an error in the sheet, and so it was just – it was a mistake in the numbers.

Got it. And then maybe more broadly on strategy, how do you manage the challenge of now offering extremely similar product to what a lot of your customers are offering, sort of a different position than this company has ever been in before?

Well, first, in terms of commitment, we are really focused on serving many of the same clients. We're very focused on the service provider community and strategic channel partners. What we didn't want to do is pivot our company in a heavy enterprise direct focus. So, we've aligned with Matt and the Telx team on really selling through and supporting their strategic channel partnerships. Colocation is very complementary to support the ecosystem, and folks need smaller footprint, so we needed the product and service capability there. But you won't see us getting in the line of business like others, moving into the managed service phase and competing with our customers.

Your next question will come from Ross Nussbaum of UBS. Please go ahead.

Hey, guys. Good afternoon. Is all of Telx's earnings going to be considered good REIT income, and are you planning on pursuing a private letter ruling to confirm what your beliefs are?

Hey, Ross, this is Andy. So, Telx has roughly 49% or 47% from colocation, equal parts from interconnection. The colocation is clear good REIT income, as is the interconnection, and we already have a private letter ruling for the interconnection. There's a small percentage of income, really fees paid on the installations that represents a couple percentages of the revenue that will have housing our TRS and offset by expenses at the TRS to minimize any tax leakage.

Okay. And then as a follow-up, I just wanted to confirm the financing. Your revised guidance in your supplemental talks about a $500 million to $1 billion unsecured debt deal in the second half of this year. Is that independent of the additional what, call it, upwards of $1 billion of bonds you were going to issue to help finance Telx?

Sure. So the page in our supplemental, that far right column, that is Digital-only, it has no capital or operating assumptions related to Telx. So essentially, we decided to increase our guidance by roughly $250 million at the midpoint. That incremental debt raised will be used to repay our revolver and hence we'll have a lower revolver balance and a higher percentage of fixed rate debt by the end of the year. As it relates to Telx, separate from what's on the page, the plan is the same. We've completed the roughly $700 million of equity that will close concurrent with the closing of the acquisition. The remainder will be funded with a combination of preferred equity and investment grade bonds.

The next question will come from John Bejjani of Green Street Advisors. Please go ahead.

Hi, guys. I don't know if I missed this in any of the disclosures you've already released. But for 111 8th Ave, are you able to share the terms of Telx's lease or leases with Google? How much remaining term do you have? How do you view your process of retaining that space long term?

I don't think we have that in the disclosure, but I believe with extensions in 111 8th Ave, it's roughly 10 years remaining.

Okay. Have you guys spoken to Google even for your own space, do they seem amenable to renewing those leases or is that a 10-year life there?

We haven't gone out and try to extend it as part of this process. We made sure we're good from an assumption basis. As we move closer to that expiration, we'll obviously have to evaluate that with Google. And I think Matt has something....

Yes. So Jon, we had had some conversations with Google when they had an interest in expanding their presence inside Manhattan. They've done that in an alternative way, so they may be a little bit more open to the conversation than they were, say, a year and a half ago.

And the next question will come from Stephen Douglas of Bank of America Merrill Lynch.

Great, thanks for taking the question. Maybe a follow-up to a previous question. But I'm interested in how you're thinking about the, I guess, the – how leverageable the existing Telx sales force is, as we think about expanding the focus to other Digital markets and how we should think about any sort of incremental sales investments there? And then second, maybe for Matt, I'm wondering if you could just talk about what the initial customer response has been to the Telx announcement and any kind of initial impact that's had on the pipeline so far, I guess, if at all. Thanks.

Yeah, happy to answer both of those, Stephen, and if Jarrett's got some extra color, he'd be happy to add that as well. Interesting, inside the sales force at Telx, while they've been primarily a domestic organization right now, they do have an awful lot of sellers with international experience. So, we're excited about that because our intention is to take the incredible assets that Telx has and expand them, expand them internationally. And so, it's good to have some more talent. The second thing is that their vertically oriented sales force is not a regionally – only a regionally experienced sales force, so we'll be able to take that vertical experience and apply it across multiple regions both in North America as well as worldwide. Customer reaction has been fantastic. And in fact we're trying hard to keep everyone calm as we're getting towards the actual closing of the deal because people are interested in having lots and lots of conversations that we're not having until the deal closes, but I can tell you that the customer response has been fantastic.

Our next question will come from Emmanuel Korchman of Citigroup. Please go ahead.

Bill, maybe we can follow up on the ROIC question from earlier. So, you're running at around, lets call it, 9% for phrase in (59:56) numbers, you're buying Telx at a 12 times or 13 times multiple. And I think your comment was that ROIC would actually go up on that? Maybe I'm just confused somewhere, but it doesn't seem like the math works.

Hey Manny, this is Andy. I can jump in and help on this. So, we're at 9.3% kind of our NOI, our cash NOI over our total gross investment book value, at first quarter, 9.5% second quarter, that's NOI, not EBITDA. When you look at our underwritten EBITDA, which we've kind of put out there of $148 million and you add back the G&A which you can get from looking at the pro forma that was in our filed 8-K, we see that investment closer to, I think, definitely north of where that 9.5%, so we see it slightly accretive to our existing return on investment. But, again, the other piece of it is we're not buying the stabilized portfolio as well, like when we deliver a development at 10% to 12%, and it's pretty much fully leased. We're buying a business which still have embedded growth and additional cash and upside to continue to grow that return on investment from the initial 20 assets in the portfolio.

Got it. Thanks, Andy.

That makes sense?

It does. Matt, just a quick question for you on backlog. So looks like you've had the numbers in 2016 and 2017 come down. Were those just commencing earlier? Why would the backlog numbers, especially in 2017, come down at this point in time?

Hey, Manny, this is Andy again. I'm getting a lot of points (1:01:38) handed off to me today, maybe this is my – because this is my first call. We had some – as part of the script, we had some early commencements. I think two tenants took – we've completed space, finished all of our landlord1 work, and we handed over the space and they took over possession early.

But I still love you, Manny.

The next question will come from Will Clayton of Macquarie. Please go ahead. Will Clayton - Macquarie Capital (USA), Inc.: Hi, guys, thanks for the question. I was wondering if you could run us through the puts and takes of the Telx EBITDA margin and where you see the most incremental cost synergies being unlocked and how we can think about that margin as you subsequently scale the business. And then I have one more after that.

Sure. This is Andy. So, I think the best place to start -- you can look at our pro forma that has the incremental EBITDA or you can take the core EBITDA from the 8-K and divide it by the revenue start. Obviously, on paper, the margin is going to look better because part of leases associated with their space to us get eliminated upon the transaction closing. I think we have to think about increments to it. First piece is the underwriting expense synergies, $10 million of the $15 million will flow through the P&L, so that will obviously be incremental margin enhancement off the bat. We're underwriting to deliver those for a full-year 2016 impact, so we'll work through our execution on achieving that through the end of the year and have that in place for a full year by – come December. And then on top of that, I think that there will be pretty high flow-through revenue contribution as we lease up what we see as an underutilized portfolio that has a significant amount of recently delivered space, and also as we kind of put to work some of Digital's talented team assisting on some of the West Coast assets as well. I don't have a number for you right there because we really – we haven't, in our underwriting, put a firm revenue synergy, but I think that will have a contribution to the margin as well. Will Clayton - Macquarie Capital (USA), Inc.: Thank you for that color. And my second question was, can you provide some commentary surrounding the pace and the success of the capital recycling program to date? And more specifically, how we should think about the impact of capital recycling in the second half of 2015 versus 2016?

So, I think the pace has been on target. It's been a little slower in some areas because we've pursued some value-add opportunities on a number of these projects, which are now coming to fruition; we've seen a lot of benefit on that. The Kato Road building that we leased up 100% is a good example of that. And the lease extension that we just signed for the single-tenant office building is another great example of that. So, it's taken a little longer, but I think the benefit to our shareholders has been very significant. I think what you'll probably see is that the remainder of the assets will largely be executed by the end of the year from the sales perspective.

And our final question will come from John Bejjani of Green Street Advisors. Please go ahead.

Great. Thanks. To the extent that you guys looked at Telx on an asset-by-asset basis, are you able to share what kind of cap rate or EBITDA multiple you assigned to the portfolio's key assets, specifically 56 Marietta Street, 60 Hudson Street and 111 8th Avenue?

Yeah. We didn't really look at it. I mean, we do look at it on an asset-by-asset basis, but we don't really do a full valuation on an asset-by-asset basis. We do projections, rollups for every asset in terms of generating our revenue and EBITDA projects. But we didn't really do a full analysis on each one. I will tell you on Marietta, though, we did spend a little time thinking of what the potential value of that asset might be. And you can get a very interesting array of outcomes on that, and some of which are quite impressive, to be honest with you. And hey, Jon, by the way, I want to get back to you on the 111 8th Avenue lease for Telx. It has an expiration date of 2022 with two five-year renewal options on it. So that takes you out to 2032 there.

Great. Thanks.

And this will conclude our question-and-answer session. I would like to hand the conference back over to Bill Stein for his closing remarks.

Thanks, Denise. I'd like to wrap up our prepared remarks by recapping our second quarter 2015 highlights, as highlighted on page 23 of the deck. First and foremost, we picked up another 20 basis points of sequential improvement in our return on invested capital, following the 100 basis points we've delivered over the past five quarters. We tightened the commencement lag from 3.7 months in the first quarter to an exceptional two and a half months. The balance sheet remains positioned for growth with debt-to-EBITDA at five times. We beat the second quarter consensus estimates by $0.05, and we raised 2015 core FFO per share guidance from $5.03 to $5.13 range to $5.05 to $5.15. Finally, we made the exciting announcement entering into an agreement to acquire Telx, a leading provider of colocation, interconnection and cloud-enabling services. In short, we continue to consistently execute on our top priorities that we set forth early last year and have since updated as the way forward for our company in 2015. We believe we have a unique and competitive footprint that can be leveraged further to the benefit of our shareholders. I would like to thank the incredibly talented team of Digital Realty employees around the world who were responsible for delivering yet another solid quarter. Once again, I'd like to remind all of you to mark October 6 on your calendars for our upcoming Investor Day. Thank you all for taking the time to participate in today's call. That concludes our second quarter 2015 earnings call. Thank you for joining us.

Thank you, Mr. Stein. Ladies and gentlemen, the conference is now concluded. We thank you for attending today's presentation. You may now disconnect your lines.