Good afternoon, and welcome to the Digital Realty Third Quarter 2014 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to John Stewart, Senior Vice President of Investor Relations. Please go ahead.

Thank you. Hello, everyone, and welcome to the third quarter earnings conference call. The speakers on today's call will be Interim CEO, Bill Stein; Chief Investment Officer, Scott Peterson; SVP of Sales and Marketing, Matt Miszewski; and Vice President of Finance, Matt Mercier. In addition to our press release and supplemental, we've also 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. Before we begin, I'd like to remind everyone that 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. Such forward-looking statements include statements related to the company's future financial and other results, including 2014 guidance and the underlying assumptions. For a further discussion of the risks and uncertainties related to our business, see the company's Form 10-K for the year ended December 31, 2013, and subsequent filings with the SEC. Additionally, this call will contain non-GAAP financial information. Explanations of such non-GAAP items and reconciliations to net income are contained in the company's supplemental package furnished to the SEC and available on the website at digitalrealty.com. Management's prepared remarks will be followed by a Q&A session. [Operator Instructions] And now I'd like to turn the call over to Bill Stein.

Thank you, John. Good afternoon, and thank you, all, for joining us. I'd like to start today by providing a quick update on the progress that we've made toward the strategic initiatives we laid out 6 months ago. These are highlighted on Page 2 of our presentation. First, we made continued headway on leasing up our existing inventory during the third quarter. We have, likewise, made steady progress towards our top priority of driving improved return on invested capital, which is up 30 basis points over the last year. With respect to our capital recycling initiative, we took the first tangible steps towards pruning the portfolio to narrow our focus on the core. We also closed a significant turnkey data center joint venture transaction during the third quarter. Our capital recycling program is designed to refocus our geographic footprint and enhance the consistency of our product quality. This program will set the stage for a faster, more sustainable pace of growth in 2016 and beyond even if it does create somewhat of a headwind to earnings growth next year. If we have to choose between long-term value creation or near-term growth in FFO per share, we will choose the former. We plan to exit several secondary markets, but we've also identified a handful of select global markets, notably in Germany and Japan, where our customers would like us to have a presence. We plan to enter these markets with our customers over time. Scott Peterson will cover our capital recycling efforts in his remarks. But suffice to say that we believe capital is precious, and at current pricing, we view the equity embedded within our existing portfolio as a better source of capital than the public equity capital markets. In addition to refining our focus, we expect our capital recycling…

Thank you, Bill. As shown here on Page 4, we closed a $187.6 million joint venture during the third quarter with Griffin Capital Essential Asset REIT for a turnkey data center located in Ashburn, Virginia. We sold an 80% interest to Griffin Capital, and we retained a 20% interest in the joint venture. We will continue to manage the property and receive management fees. The transaction valued the property at a 7.05% cap rate or $20,600 per kilowatt. We're pleased with this transaction, as it provides meaningful price discovery for turnkey data centers and establishes a new capital partner relationship. On last quarter's call, we indicated we would begin marketing non-core assets for sale shortly after Labor Day. We have identified an initial pool of 9 properties for disposition. As detailed in our press release, we brought 5 of these assets to market, and we booked a $13 million impairment charge during the third quarter to write down 2 of those assets to their estimated fair market value. Leasing activity at the 4 remaining properties has picked up considerably over the past 90 days, and we are in the process of finalizing some new leases, which has affected the timing of bringing these properties to market. However, this should increase the value of these properties and maximize proceeds to our shareholders. In addition, several of these assets were encumbered by CMBS debt, which has -- which was paid off in September. These 9 assets represent roughly the first 1/3 of the properties under evaluation for the capital recycling program, which comprises roughly 5% to 10% of the portfolio. This initial portfolio has some winners and some losers but on balance, we expect to recognize a gain well in excess of any impairment charges or losses. We have been encouraged by the early indications of interest we have received, and we expect our capital recycling program will contribute to our objectives of narrowing our strategic focus, funding future capital requirements and driving improved return on invested capital. I'd now like to turn the call over to Matt Miszewski to discuss our current leasing momentum.

Thank you, Scott. As you can see here on Page 5, we signed new leases totaling over $31 million of annualized GAAP rent during the third quarter. Our recent leasing activity has been remarkably consistent. You may recall that the $47 million we reported in the first quarter included a $12 million direct lease with a formal subtenant at a Powered Base Building in Santa Clara. Excluding that one lease, we have signed between $30 million and $35 million every quarter this year. Colocation revenue accounted for over 15% of our leasing activity, again, this quarter. Our mid-market segment has delivered a consistent contribution of between $4 million and $6 million in each of the past 3 quarters. This segment is representative of the steady pace we are seeing across our sales platform but has also been partially responsible for smoothing out some of the traditional lumpiness in our quarterly leasing activity just as we expected. Turning now to Page 6. Cloud, content and social media had been the major drivers of our recent leasing activity and accounted for nearly 75% of our lease signings in the third quarter. We believe this demand represents a secular trend rather than a onetime thrill, and we believe we are still in the very early innings. Cash rents on renewal leases rolled down by 6% as shown on Page 7. The primary driver was a large lease with a financial services tenant in Northern Virginia that was signed at peak rent, which we have highlighted on the last several calls. Needless to say, releasing spreads on Powered Base Building renewals remained quite healthy. The face rates on Turn-Key Flex leases signed shown here at the bottom of Page 8 were lower than last quarter albeit due to market mix, reflecting a concentration of…

Thank you, Matt. As Scott mentioned, we closed a $187.6 million turnkey joint venture during the third quarter, and proceeds were used to pay down $130 million of CMBS debt at 5.65%. Debt to EBITDA improved 1/10 of a turn to 5x, as you can see here on Page 14. We still have a U.S. dollar bond offering contemplated in our guidance for later this year. As shown here on Page 15 of the presentation, our credit spreads have tightened considerably over the course of the year, and we believe the current interest rate environment is attractive. We also believe it is prudent balance sheet management to finance long-lived assets with long-term capital, and we expect to tap the corporate bond market either later this year or early next year. Turning now to operating performance. Portfolio occupancy ticked up 20 basis points, the second consecutive improvement in occupancy. We expect to finish the year at or slightly above the current level of 93%. As Matt indicated in his presentation, cash releasing spreads were negative in the third quarter, driven by the large roll-down in Northern Virginia. We are not out of the rental rate roll-down woods quite yet, but we have worked our way through the worst of the above-market lease expirations within our portfolio with a few notable exceptions, particularly in 2016 rollovers in Northern New Jersey. As market rents continue to improve and as we address the remaining roll-downs, the mark-to-market should begin to approach 0 and turn consistently positive over the next couple of years. Same-capital cash NOI growth was 5.9% for the third quarter, above the high end of our guidance range, and we've raised our organic growth forecast for the full year by 50 basis points to between 4.5% to 5.5%. We've also whittled down…

Thank you, Matt. I'd like to wrap up by recapping the highlights from our third quarter results as outlined here on Page 17. We signed over $31 million of new leasing during the third quarter, including a $5 million mid-market contribution. We leased nearly 6 megawatts of finished inventory with 1 megawatt of positive net absorption. We registered a 20-basis-point sequential improvement in occupancy. We delivered 5.9% same-capital cash NOI growth and raised our organic growth forecast for the full year by 50 basis points. Our third quarter core FFO per share beat consensus by $0.02. And finally, we raised the low end of the range for 2014 core FFO per share guidance by $0.05. We believe these results demonstrate consistent execution on our strategic objectives. Our approach to capital recycling and disciplined leasing standards also demonstrate our renewed focus on generating long-term shareholder value in everything that we do. In closing, we are very pleased with our third quarter results, and I would like to thank our outstanding global team of employees without whose contributions, these results would not be possible. And now we are pleased to open up the call and take your questions. Operator?

[Operator Instructions] Our first question comes from Vance Edelson at Morgan Stanley.

I wanted to give you a chance to discuss outsourcing more. You mentioned that existing customers drove 90% of the growth, but you also added the 80 new logos. Is outsourcing still on the rise and that's what's supporting the 90% figure? And similarly, are the 80 new logos a sign that those companies are perhaps outsourcing for the first time?

Yes. Thanks for the question, Vance. We do see outsourcing to be a continued trend that we discussed with our customers on an ongoing basis, and we really see it in both of the segments that you identified. Existing customers, especially our large enterprise existing customers, continue to be on the road for outsourcing their IT as well as their business processes, and we're there to support them. Maybe surprisingly, the new logos that we signed in both the large enterprise segment as well as the mid-market segment have a similar interest in outsourcing maybe for different reasons. The mid-market companies simply don't want to get started behind an operationally expensive set of processes, and our large enterprise customers have found a need to preserve some of their capital and to invest in strategic initiatives. But for both of these segments, outsourcing remains incredibly important for Digital Realty.

Okay, great. And then as a related follow-up, could you describe the momentum that the mid-market segment has? It seems like a relatively new initiative and yet the new leases signed seem to have leveled off to some extent. Is that something we can expect to see growing in the coming quarters?

Yes. We see -- we're very pleased with the progress that we've seen in the mid-market since we announced its -- announced the initiative last year. We've seen that team really step up and consistently generate now between $4 million and $6 million in revenues over the past several quarters and a very large quarter in revenue production in Q4 of last year. So we couldn't be happier. Really, if you keep in mind that we basically grew a business that was producing between $1 million and $2 million of quarterly revenue, now we've increased that to $4 million to $6 million participation. So we're extremely excited about the progress that the mid-market team is making and the mid-market sales team combined with the operational team that supports that set of products.

The next question comes from Jonathan Atkin at RBC Capital Markets.

Yes. So kind of a related question to the previous one. The connectivity initiative, whether standard connection at your own sites or OPEN-IX, I wonder if you have an update on that. And then the colocation segments, as distinct from the mid-market initiative, it looks your colo rental rates increased, and I wonder what drove that. Was that deal size or geographic mix? And then another kind of observation, it looks like the Turn-Key rent dropped in Asia-Pac, and I wondered what drove that?

You managed to get a lot of questions in one question, but we'll try to address all of them. First of all, the connectivity initiative -- in terms of the connectivity initiative, we're extremely pleased with the progress that the operational team has made, and we moved the product ownership under the sales and marketing umbrella over this past quarter, 1.5 quarters as well. Connectivity has -- the network ecosystem project under connectivity, as you know, started in Europe and has moved its way throughout the United States. We've connected up major data centers in campuses within the United States, and we're in the process of doing the same thing in Asia Pacific. And so we're pleased to announce that we not only have completed most of that process but that we're starting to see the results as well. We measure the results of many of the partnerships that we do by the amount of GAAP rental revenue that they're able to influence. And the network ecosystem, in and of itself to date, has already influenced over $39 million of GAAP signings to date. Probably more important to that is that the network ecosystem really underlies our customers' desire to tap into the power of the hybrid cloud. This gets to the dual magnet metaphor that uses Bill uses from time to time when he talks about cloud service providers that exist within our data centers, in large numbers, the large portion of our revenue and how that attracts the large enterprises that are coming to our data centers and those large enterprises that we have also attracting additional cloud service providers. By combining that combination of great customers with the network ecosystem that we now have deployed, as well as the global cloud marketplace that we're looking to expand this fiscal year, it's important to realize that this is really the connectivity that was missing to enable the hybrid cloud for our customers. So we're extremely excited about that. I'm glad that you called out the colocation product and rental rates, in particular, for that individual product and that -- it's important to remember that, that product actually goes across multiple segments. So we do sell colocation into the mid-market segment as well as into the enterprise segment. And the increase in rental rates, I think, you've identified it already, really goes around the deal sizes that we landed within the quarter as well as the geographic diversity. Markets rates are different for colocation -- the colocation product in multiple markets, and we happen to be either lucky or smart enough to have landed them in the right markets this quarter. We'll see a slight bump in the rental rates. Was the third -- the third question, I believe, was on the TKF rental rates. Is that correct?

Correct.

So in particular, in Asia Pac, I think your question sort of focused in on the TKF rental rate numbers in Asia Pacific, and we did have -- we had to call out that we did have one large deal that we secured in Hong Kong, which we view as a onetime event, was a very strategic partner. We went into that deal for very specific reasons between the 2 partners, in particular, to open up some market opportunities that were closed off to us before. We believe we successfully completed that set of transactions and that this one lease is really a onetime event. It really highlights that we're able to make strategic decisions in concert with our greatest partners and our greatest customers throughout the world.

The next question is from Ross Nussbaum from UBS.

Can you talk a little about your weighted average lease term? I noticed in the quarter, it was down to 6.3 years from 6.8 last quarter. Just maybe talk a little bit about why that number shifted so notably from Q2 to Q3.

So Ross, thanks for the question. The shorter lease terms, we need to understand in a context of the duration of those leases that are being signed as well as understanding that obviously it's an average. So we're still seeing some good lease terms come in. And -- but I understand that we're comfortable signing shorter-term leases in the marketplace where we really believe that the fundamentals inside that marketplace are improving, especially at the time of potential expiration. Also important for everyone to remember that our retention rates remain high. So we are comfortable with this shorter initial term. It's also become a little bit of a trend in the marketplace for folks who initially say they want a smaller term to actually go ahead and take their additional option earlier in that process. So maybe a tip box in terms of procurement, but we're seeing those people renew early in some cases or do must-takes early in some cases as well. In essence, what all this signals is that the fundamentals in this market are improving.

Ross, let me add to that, that we also see the same company that are doing shorter-term leases, putting significant investment into the premises even though they might be doing a 5-year lease.

As a follow-up, not really much related, but what is -- what should we all expect, Bill, on the timing for the, I guess, full CEO announcement. Is that happening before NAREIT, before year-end? What can you tell us at this point?

So Ross, we have bet here internally as to which question it would be, but...

I'm surprised to think we...

I am also.

So we have heard that question before. The answer to the question is that we fully expect that it will be before year-end. That's what we've said, really, since the transition was announced last March. And as we also indicated, the board back then and still is comfortable with the current leadership that's in place, but the focus remains finding the right candidate and that is unquestionably the priority. Fortunately, in the interim, the stock has performed well. We're up over 40% since March. We've outperformed the RMZ by 2,000 basis points, and we remain focused on executing our strategic vision. And thank you for the question.

The next question comes from Jonathan Schildkraut at Evercore.

Great. I guess, my first question is really about sort of your view on the global market. You guys have a great success in Asia Pac, and at a recent conference, your fastest-growing customer talked about going to dozens of new countries in the next few years. So I was just wondering what your perspective was in terms of expanding your footprint globally beyond the markets that you're currently operating in.

Yes. So Jonathan, we do. And I think as Bill said in his initial statements, we will certainly look at new opportunities with our great customers in tow. But important to also understand that our -- one of our focuses -- one of our strategic focuses within sales and marketing is targeting at the beginning as well as targeting expansion with companies that have a stated desire or already active in global expansion that matches our existing portfolio, where we happen to have existing inventory or shell available. So that alignment by us to sort of generating demand across companies that have a desire to grow globally matches our current footprint in terms of what we have existing inventory in pretty darn well. We also happen to find out that those customers stay with us longer. They're happy to give us longer lease terms, and they're much more easy to satisfy in terms of customers because their value expectation is aligned very well with the value that we provide. I think Bill mentioned in his opening statements 2 geographies that were of interest. Maybe I'll turn it over to Bill to see if he wants to talk a little bit more about future potential expansion.

And Jonathan, so I've mentioned Germany and Japan. But in addition, I mean, we -- if we have a -- I'm sure we both know the customer you're talking about. But if we have a strong customer that wants us to go to a certain market, and in this particular case, this customer is, they lease multiple megs from us at one time. So if we can get comfortable with the demand in that market, and we can get comfortable with other risks, so currency risk, political risk, we can structure ample lease term to mitigate risk. And we have a customer that's taking a significant percentage of a building, then we are -- will be more willing to look into a new market.

That makes a lot of sense. Just as my follow-up question, are there any markets that you're concerned with? There's a recent report out that the big 4 markets in Asia Pac are going to see something like a 40% inventory increase over the next 12 to 24 months. Are there any markets that you're concerned about in terms of inventory?

We haven't seen that in Asia at this point. We're seeing really good absorption in our 2 Australian markets. And in Singapore, we're basically full. And Hong Kong is filling rapidly, too. So we haven't seen the evidence of that. We -- there had been commentary about excess supply in North American markets in Silicon Valley and Virginia, in particular. But once again there, we've seen significant absorption of our inventory. In fact, we can't even keep up in Northern Virginia. I think basically, the difference to maybe the type of product that we're delivering to the market, and we do provide the 2-end solution, a dedicated infrastructure. And I suspect that if there's commentary about excess supply, it's probably the share in infrastructure product.

That's an important distinction, Jonathan, that Bill is making. As I look at our 12-month future pipeline, I see a good dominant part of that being the customers that regularly buy the dedicated solution from us here at Digital. That doesn't foreclose us from making sure we truly understand the customers' needs in the 4 big markets in Asia Pacific. But as opposed to our competition who is testing the waters, we've got a proven product that we're able to deploy and have successfully deployed over the past 5 years. We certainly will look at continuing to do that and then exploit any future opportunities that we see.

Thank you, Jonathan. Just to point out, in Hong Kong and Singapore, in particular, land is tight. So it really is hard to get sites there. I know there's one of our competitors is bringing on a site January 1, but I think that's really the only one that we'd be concerned about in Singapore.

The next question comes from Tayo Okusanya from Jefferies.

I just wanted to echo Jonathan's comments on great execution during the quarter. First question, Bill, you did discuss in your commentary about turning down quite a few deals with larger tenants because you weren't happy with the economics or the terms or what have you. Could you just kind of give us a sense of what some of those type of deals were that you turned down? And if whether you would have actually accepted those kind of deals a year to 2 years ago.

Well, I don't know that those deals would have existed a couple of years ago. But the -- I think that my biggest objection to these deals was the customer's attempt to transfer what I thought were the customer's business risks to us for a standard of conduct within the data center's four walls that was quite low, a simple negligence as opposed to gross negligence or willful misconduct. So what I'm referring to is indemnity clauses for basically mistakes or omissions inside a data center by the operator, what the right standard of conduct is. And we've held to a standard of willful misconduct, and we do not indemnify for consequential damages. And in this case, we have customers that are looking for a lower standard and a broader scope of indemnity.

So if it wasn't the case of the pricing on the deals or anything like that, it was more along some of the operational risks you would have to take if you actually accepted these deals.

Yes. Not so much, that's why I made the comment in my remarks about being focused on long-term value creation. And these were deals that would have been very beneficial to short-term FFO growth. But at the end of the day, we're focused on residual value as well and what types of risk we might be creating for the long term.

Great. And then just my second question, excluding the financial clients this quarter, could you give us a sense of what GAAP, as well as cash mark-to-market, would have looked like, excluding that large roll-down?

Yes. Tayo, this is Matt. I don't think we have that breakout at our fingertips, but we can follow up at a later date.

The next question comes from Vincent Chao with Deutsche Bank.

Just want to go back to the non-core dispositions with the 9 assets currently in market, guidance goes up to $400 million for the year in terms of the range. Just trying to get a sense of over the balance of this year as well as '15. I guess, the 9 represents about 1/3 of the non-core that you've identified. I mean, how much of that non-core do you think could go between now and the end of next year?

In the first group that we have, that will all likely transact between now and the end of this year in January, and that total volume's about $260 million in proceeds on that. And we expect to add -- I'll give you a little more information there. We think that will go at an average cap rate, overall, of about a little over a 6 cap rate on that. We then have 3 other -- then we have 2 other groupings of properties that we're looking at. The next grouping is a group of 6 assets that are more, rather than being non-core, these are more non-core data center assets. And we're going through the valuation process of those right now. So it's a little early to give you any indication. But we'd expect that the ones of those we do bring to market would be brought to market first quarter.

Okay. And then on the internal growth side, you obviously raised the same-capital outlook by 50 basis points. In past presentations, you've talked about sort of an ongoing business model that talks about sort of 4% to 5% growth. I guess, is there any reason to think that 2015 should stray significantly from what we saw here in 2014 and sort of relative to that longer-term outlook?

Yes. I mean, as we -- Vincent, as we said, we'll give specifics on 2015 guidance later this year, and we'll -- at that time, we'll break down all those components as we have -- as we've done the last several quarters, but we're not at a point where we can provide that detail at this time. But we'll definitely have it when we give formal guidance later this year.

The next question comes from Jordan Sadler at KeyBanc Capital Markets.

I think you touched on a little bit sort of post-quarter end leasing but curious more in terms of the seasonality that the portfolios historically experienced in the second half, particularly in the fourth quarter. Are you still expecting, maybe for Matt or for Bill, the same sort of historical seasonality? Or would that -- should that pick up in the fourth quarter? Or has that been somewhat muted as well by the mid-market strategy?

Yes. So the seasonality is interesting, given the launch last year of the mid-market strategy. In general, we're pleased with our sales and marketing team, Jordan being able to generate consistent results that are in line with our plan. We consider quarters like this to be successful quarters when they meet the plan. And you touched on one of the drivers, which, of course, is the mid-market initiative, which, if you remember, seems like way back. It wasn't that long ago when we announced the initiative. Part of the purpose of it was to smooth out the revenue lumpiness that came from the large enterprise segment. And I think we've been fairly successful at doing that. Unfortunately, one of the side effects of wiping out the lumpiness of the large enterprise segment is the perceived seasonality of the past may look a little less certain, and so we need to get a little -- a few more quarters under our belts before we can identify what the true seasonality is, given the new set of products and new set of markets that we're addressing. We do think that our -- the seasonality will reflect customer demand, which have relatively unique drivers. So inside an individual vertical, for instance, financial services, I'm having 2 sets of conversations, one with a company that has a large deployment that needs to go live in the first half of next year, and we're having that conversation. We'll strike a deal this quarter. And the other one, who wants to start the conversation in Q2 but will deliver the actual project in Q4. So unfortunately, seasonality is also at the call of our customers' internal calendars.

That's helpful. I guess, as a follow-up, maybe for Scott, on pricing and cap [ph] achieved. Obviously, the joint venture helped us sort of shed some light on pricing this quarter. I'm curious, do you think pricing achieved on this transaction is somewhat representative overall of the portfolio of assets, sort of excluding the platform value, especially, obviously, as it relates to Turn-Key?

Yes. Yes, just remember data centers are kind of complicated, but we happen to like this comp very much. This is a good cap rate, 7.05%. But also when you keep that in light of the price per foot and the price per kilowatt that this traded at, I think this is a very good comp. And it shows that the private demand and pricing continues to grow for these assets, and we're also very happy with these access to another source of capital for our program.

The next question come from Matthew Heinz at Stifel. Matthew S. Heinz - Stifel, Nicolaus & Company, Incorporated, Research Division: I'm interested to hear more about the Global Alliances Program, realizing it's still very early in the process. But I guess, just hoping to understand how receptive existing customers have been to these offerings, particularly within the enterprise segment and then maybe the balance of engagement between mid-market versus wholesale customers. And then as a follow-on to that, I'm hoping you could just collaborate on sort of how you view the cloud marketplace initiative, I suppose, in terms of whether you see it as a value enhancement to the existing service and connectivity offerings. Or is it more of an up-sell opportunity with sort of longer-term implications around ARPU?

So in terms of the Global Alliances Program, the program, when combined directly with the network initiative, has influenced an awful lot of the deals that are out there. But what's interesting is -- what we're trying to enable is something that we're not unfamiliar with. When we -- Scott started in this industry 10 to 12 years ago, we became a carrier-controlled data center provider because of our customers' perceived challenges with network operator-owned data centers. And so that shift in market dynamics allowed us to bring carrier-neutral data centers to the fray and allowed us to capture that market opportunity. We're seeing something similar here, and it sort of will answer both of your questions. The Global Alliances that we're striking are meant to give optionality to our customers that they're asking for. The wider array of that optionality is what we need to provide as data center providers. So that no matter what direction our customers want to go to enable their hybrid cloud ambition, they can do it within Digital Realty property. And so again, as I stated earlier on the hybrid cloud question, what we do here allows our customers to truly connect their services to data centers that they might have inside other Digital Realty data centers, but also they can connect to cloud providers outside of that venue, and they can connect to cloud providers that are not within Digital's own network services. So our network service partners can now securely connect those enterprise clients to all of their assets as well as to internal private clouds, and so what we're seeing is something very similar to the process that we came into a few years ago. So now instead of it being carrier neutrality, it really is cloud service provider neutrality, and part of our partnership efforts or Global Alliances efforts is to make sure that we're able to bring the right cloud service providers to the foray. That worked this quarter in VMWare as well as in Carpathia. Our providers that our customer said they wanted to connect to more directly within Digital's data centers, we're being able to provide that sort of connectivity to them, and we see that as the end in and of itself. If you think about the global cloud marketplace as well as the rest of the partnership ecosystem as an amenity that is now necessary in a modern data center as we move our customers from wanting simply to store data in a data center to want to actively exchange data within a data center and within multiple data centers, that's really the key that we're trying to provide to those customers. Matthew S. Heinz - Stifel, Nicolaus & Company, Incorporated, Research Division: And then just very quickly, is there -- do you see any potential for a special distribution of the gains from the joint venture?

So our board meets next week, and the board sets the dividend. So it's something that we're looking at. Basically, the trade-off is going to be a pullback of the first quarter dividend or special dividend, and we haven't decided on that. And even if we had decided on it, we wouldn't jump ahead of the board.

The next question comes from Emmanuel Korchman at Citi.

If I look at your lease rollover schedule, it looks like you still have a fair amount of PBB leasing to do this year, and those rates are well above average. Was wondering if you can give us some insight as to what that is and how that's going to get addressed.

Manny, it's Matt. Actually, that -- the vast majority that's already been released is actually renewal -- or a re-lease we signed back in the first quarter, and it's going to roll, I think, slightly either flat or slightly up on a cash basis. So that is -- that's already taken care of.

And great, and then maybe you can help me get one other piece of disclosure. On the market-by-market disclosure, it looks like the megawatts went up in Northern Virginia, but the rentable square footage to occupancy and the lease square footage all came down. I realize that, that might be tied to the most recent JV. But I was just wondering how those could go in different directions.

Yes. I mean, we'll have to -- I don't know. Obviously, as you know, Northern Virginia is probably one of our most active markets in terms of development. So I'm sure it has to do with the development activity that we're bringing online as well as the joint venture that came out. I don't have the specifics, but I'm sure it has something to do with those 2 interplays.

The next question comes from Stephen Douglas at Bank of America Merrill Lynch.

It's obviously been a while since we've seen Digital acquire in the space, and I'm wondering if you could maybe comment on how you're thinking about consolidation now, given the strength in your stock this year and maybe some of the criteria you look for in a target. And then second, you touched a little bit on the macro outlook, and I'm wondering if you could comment specifically on the leasing environment you're seeing in Europe and also maybe FX impact you saw in 3Q and expect for 4Q.

Yes. Stephen, it's Scott. To answer that, we're always in the market looking at M&A opportunities, and we keep abreast of everything, whether it's kind of near term or long term out there. There hasn't been anything very compelling lately. I think our primary focus is always how are we adding value to our shareholders when we look at these. I think there are many opportunities that we look at, which would give us the chance to get only larger and not better or more profitable for our shareholders. So I think our first and foremost goal on all those is to do something that's going to be compelling for our shareholders. And off late, we haven't really seen anything that fits that bill. But we are always -- we're always looking at opportunities, and we'll always pursue those to the extent we think we can do something positive.

Yes. And so on the lease, we'll do this in 3 parts, Stephen. On the leasing side in Europe, without divulging the large enterprise software maker's name, we did see some great activity with what we call a potential franchise account happening within continental Europe this quarter. And probably more important, as I look forward in the next 2 quarters as well as the 12 months looking forward, we see a very healthy pipeline for the properties that we currently have in Europe as well as some of the properties that we have looked to develop in the past.

Yes. And this is the other Matt. We -- on the FX issue, we're about 80% hedged in terms of our FX exposure, so it takes a pretty material movement to have a meaningful impact on our bottom line. If rates had remained unchanged versus last quarter, our FFO in Q3 would have been about $0.005 higher. And I think that speaks to the advantage of being an investment grade rated since it allows -- we can fund in multiple currencies, and as you know, we raised a pretty large sterling deal earlier this year, a long-term bond. And overall, I think we've raised over $1 billion in sterling since in the public market. So this goes to show what having a strong balance sheet can do for you in terms of hedging your risks.

And Stephen, let me just sort of pile on here. The -- if we were to find an acquisition that were attractive, public equity is now no longer our only source of equity, as we now have a -- of what I think is fairly reliable source of private capital as well for deals of that type.

This concludes the question-and-answer session and concludes the conference. Thank you for attending today's presentation. You may now disconnect.