EX-99.2 3 qts-20210803x8kexx992.htm EX-99.2 Document

Exhibit 99.2
image.jpg

qts-20200727xex99d2002.jpg
Table of Contents
1
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Forward Looking Statements

Some of the statements contained in this document constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In particular, statements pertaining to the COVID-19 pandemic, its impact on the Company and the Company’s response thereto, the pending acquisition of the Company and to the Company’s strategy, plans, intentions, capital resources, liquidity, portfolio performance, results of operations, anticipated growth in our funds from operations and anticipated market conditions contain forward-looking statements. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters.
The forward-looking statements contained in this document reflect the Company’s current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause actual results to differ significantly from those expressed in any forward-looking statement. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:
the ability of the Company to obtain stockholder approval required to consummate the proposed acquisition of the Company (the “transaction”); the satisfaction or waiver of other conditions to closing in the definitive agreement for the proposed transaction; unanticipated difficulties or expenditures relating to the proposed transaction; the response of customers and business partners to the announcement of the proposed transaction; potential difficulties in employee retention as a result of the proposed transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the proposed transaction; the outcome of legal proceedings instituted against the Company, its directors and others related to the proposed transaction; adverse economic or real estate developments in the Company’s markets or the technology industry; obsolescence or reduction in marketability of our infrastructure due to changing industry demands; global, national and local economic conditions; risks related to the COVID-19 pandemic, including, but not limited to, the risk of business and/or operational disruptions, disruption of the Company’s customers’ businesses that could affect their ability to make rental payments to the Company, supply chain disruptions and delays in the construction or development of the Company’s data centers; risks related to the Company’s international operations; difficulties in identifying properties to acquire and completing acquisitions; the Company’s failure to successfully develop, redevelop and operate acquired properties or lines of business; significant increases in construction and development costs; the increasingly competitive environment in which the Company operates; defaults on, or termination or non-renewal of, leases by customers; decreased rental rates or increased vacancy rates; increased interest rates and operating costs, including increased energy costs; financing risks, including the Company’s failure to obtain necessary outside financing; dependence on third parties to provide Internet, telecommunications and network connectivity to the Company’s data centers; the Company’s failure to qualify and maintain its qualification as a real estate investment trust; environmental uncertainties and risks related to natural disasters; financial market fluctuations; changes in real estate and zoning laws, revaluations for tax purposes and increases in real property tax rates; and limitations inherent in our current and any future joint venture investments, such as lack of sole decision-making authority and reliance on our partners’ financial condition.
While forward-looking statements reflect the Company’s good faith beliefs, they are not guarantees of future performance. Any forward-looking statement speaks only as of the date on which it was made. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the Company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, and other periodic reports the Company files with the Securities and Exchange Commission, many of which should be interpreted as being heightened as a result of the ongoing COVID-19 pandemic and the actions taken to contain the pandemic or mitigate its impact.


2
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Company Profile
image1.jpg
3
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg

Consolidated Balance Sheets
(unaudited and in thousands except share data)
June 30, 2021 (1)
December 31, 2020 (1)
ASSETS
Real Estate Assets
Land$175,348 $165,109 
Buildings, improvements and equipment3,138,583 2,839,261 
Less: Accumulated depreciation(789,192)(702,944)
2,524,739 2,301,426 
Construction in progress (2)
1,214,794 1,028,765 
Real Estate Assets, net3,739,533 3,330,191 
Investments in unconsolidated entity12,430 22,608 
Operating lease right-of-use assets, net48,342 51,342 
Cash and cash equivalents28,068 22,775 
Rents and other receivables, net134,870 107,563 
Acquired intangibles, net62,093 68,090 
Deferred costs, net (3)
69,133 63,689 
Prepaid expenses12,310 10,253 
Goodwill173,843 173,843 
Other assets, net (4)
53,967 48,218 
TOTAL ASSETS$4,334,589 $3,898,572 
LIABILITIES
Unsecured term loans and revolver, net (5)
$1,038,833 $1,335,241 
Senior notes, net of debt issuance costs (5)
493,016 492,534 
Finance leases42,395 41,718 
Operating lease liabilities54,629 58,005 
Accounts payable and accrued liabilities240,738 187,270 
Dividends and distributions payable45,248 39,373 
Advance rents, security deposits and other liabilities19,818 19,850 
Derivative liabilities35,173 53,722 
Deferred income taxes948 810 
Deferred income114,978 85,351 
TOTAL LIABILITIES2,085,776 2,313,874 
EQUITY
7.125% Series A cumulative redeemable perpetual preferred stock: $0.01 par value (liquidation preference $25.00 per share), 4,600,000 shares authorized, 4,280,000 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively (6)
103,212 103,212 
6.50% Series B cumulative convertible perpetual preferred stock: $0.01 par value (liquidation preference $100.00 per share), 3,162,500 shares authorized, issued and outstanding as of June 30, 2021 and December 31, 2020, respectively (7)
304,223 304,223 
Common stock: $0.01 par value, 450,133,000 shares authorized, 77,030,269 and 64,580,118 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively
770 646 
Additional paid-in capital2,305,032 1,622,857 
Accumulated other comprehensive loss(31,638)(50,451)
Accumulated dividends in excess of earnings(574,756)(504,313)
Total stockholders’ equity2,106,843 1,476,174 
Noncontrolling interests141,970 108,524 
TOTAL EQUITY2,248,813 1,584,698 
TOTAL LIABILITIES AND EQUITY$4,334,589 $3,898,572 
_______________________________________________________
(1)The balance sheets at June 30, 2021 and December 31, 2020, have been derived from the consolidated financial statements at that date, but do not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.
(2)As of June 30, 2021, construction in progress included $229.5 million related to land holdings for which the initiation of development activities has begun to prepare the property for its intended use.
(3)As of June 30, 2021 and December 31, 2020, deferred costs, net included $5.0 million and $6.0 million of deferred financing costs net of amortization, respectively, and $64.1 million and $57.7 million of deferred leasing costs net of amortization, respectively.
(4)As of June 30, 2021 and December 31, 2020, other assets, net included $47.4 million and $44.8 million of corporate fixed assets, respectively, primarily relating to corporate offices, leasehold improvements and product related assets.
(5)Debt issuance costs, net related to the senior notes and term loans aggregating to $13.3 million and $14.6 million at June 30, 2021 and December 31, 2020, respectively, have been netted against the related debt liability line items for both periods presented.
(6)As of June 30, 2021, the total liquidation preference of the Series A Preferred Stock was $107.0 million, calculated as $25.00 liquidation preference per share times 4,280,000 shares outstanding.
(7)As of June 30, 2021, the total liquidation preference of the Series B Preferred Stock was $316.3 million, calculated as $100.00 liquidation preference per share times 3,162,500 shares outstanding.
4
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Consolidated Statements of Operations
(unaudited and in thousands except share and per share data)
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
20212021202020212020
Revenues:
Rental (1)
$150,807 $144,308 $125,996 $295,115 $246,077 
Other (2)
4,413 4,424 5,644 8,837 11,855 
Total revenues155,220 148,732 131,640 303,952 257,932 
Operating expenses:
Property operating costs45,704 46,284 40,349 91,988 81,130 
Real estate taxes and insurance5,788 5,022 4,106 10,810 8,017 
Depreciation and amortization58,255 55,506 47,554 113,761 92,624 
General and administrative24,476 23,641 21,391 48,117 42,074 
Transaction and integration costs8,391 1,516 381 9,907 597 
Total operating expenses142,614 131,969 113,781 274,583 224,442 
Operating income12,606 16,763 17,859 29,369 33,490 
Other income and expense:
Interest income1 — 2 1 2 
Interest expense(7,452)(8,148)(6,924)(15,600)(14,086)
Other income— — — — 159 
Equity in net loss of unconsolidated entity(705)(559)(590)(1,264)(1,267)
Income before taxes4,450 8,056 10,347 12,506 18,298 
Tax benefit (expense)(251)(138)(138)(389)31 
Net income4,199 7,918 10,209 12,117 18,329 
Net (income) loss attributable to noncontrolling interests (3)
251 (79)(317)172 (427)
Net income attributable to QTS Realty Trust, Inc.$4,450 $7,839 $9,892 $12,289 $17,902 
Preferred stock dividends(7,045)(7,045)(7,045)(14,090)(14,090)
Net income (loss) attributable to common stockholders$(2,595)$794 $2,847 $(1,801)$3,812 
Net loss per share attributable to common shares
Basic (4)
$(0.08)$(0.07)$(0.05)$(0.15)$(0.06)
Diluted (4)
(0.08)(0.07)(0.05)(0.15)(0.06)
________________________________________________________
(1)Represents lease revenue, inclusive of recoveries from customers as well as straight-line rent. Recoveries from customers was $17.7 million, $16.1 million, and $12.5 million for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020, respectively, and $33.8 million and $24.8 million for the six months ended June 30, 2021 and 2020, respectively. Straight-line rent was $7.7 million, $7.4 million and $5.8 million for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and $15.1 million and $9.6 million for the six months ended June 30, 2021 and 2020, respectively.
(2)Includes revenue from managed services, sales of scrap metals and other unused materials, management fees, service fees, development fees and various other non-rental revenue items.
(3)The weighted average noncontrolling ownership interest of QualityTech, LP was 8.4%, 9.0% and 9.9% for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020, respectively, and 8.7% and 10.1% for the six months ended June 30, 2021 and 2020, respectively.
(4)Basic and diluted net loss per share were calculated using the two-class method.
5
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Consolidated Statements of Comprehensive Income (Loss)
(unaudited and in thousands)
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
20212021202020212020
Net income$4,199 $7,918 $10,209 $12,117 $18,329 
Other comprehensive income (loss):
Foreign currency translation adjustment gain (loss)54 (158)64 (104)(159)
Increase (decrease) in fair value of derivative contracts4,145 17,253 (3,641)21,398 (40,356)
Reclassification of other comprehensive income to utilities expense160 (66)410 94 764 
Reclassification of other comprehensive income to interest expense3,414 3,375 2,703 6,789 3,461 
Comprehensive income (loss)11,972 28,322 9,745 40,294 (17,961)
Comprehensive (income) loss attributable to noncontrolling interests(956)(2,558)(1,022)(3,514)1,809 
Comprehensive income (loss) attributable to QTS Realty Trust, Inc.$11,016 $25,764 $8,723 $36,780 $(16,152)
6
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Summary of Financial Data
(unaudited and in thousands, except operating portfolio statistics data and per share data)
This summary includes certain non-GAAP financial measures that management believes are helpful in understanding the Company’s business as further described in the Appendix. The Company does not, nor does it suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information or as an expectation of future performance of the Company’s business. The Company believes that the presentation of non-GAAP financial measures provides meaningful supplemental information to both management and investors that is indicative of the Company’s current operations and its business. The Company has included a reconciliation of this additional information to the most comparable GAAP measure in the summary financial information below.
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
Summary of Results20212021202020212020
Total revenue (1)
$155,220 $148,732 $131,640 $303,952 $257,932 
Net income$4,199 $7,918 $10,209 $12,117 $18,329 
Net income (loss) attributable to common stockholders$(2,595)$794 $2,847 $(1,801)$3,812 
Net loss per share attributable to basic common shares (2)
$(0.08)$(0.07)$(0.05)$(0.15)$(0.06)
Net loss per share attributable to diluted common shares (2)
$(0.08)$(0.07)$(0.05)$(0.15)$(0.06)
FFO available to common stockholders & OP unit holders (3)
$53,377 $54,518 $48,349 $107,895 $92,079 
Note: All metrics in the following tables include QTS’ pro rata share of results from the unconsolidated joint venture.
Three Months EndedSix Months Ended
Other Data (including QTS' pro rata share of the unconsolidated joint venture, excl. total revenue)June 30,March 31,June 30,June 30,
20212021202020212020
Total revenue (1)
$155,220 $148,732 $131,640 $303,952 $257,932 
MRR (at period end)$41,657 $39,809 $36,091 $41,657 $36,091 
NOI$104,843 $98,559 $88,112 $203,402 $170,556 
NOI as a % of revenue67.5 %66.3 %66.9 %66.9 %66.1 %
Adjusted EBITDA$87,663 $81,747 $72,800 $169,410 $139,570 
Adjusted EBITDA as a % of revenue56.5 %55.0 %55.3 %55.7 %54.1 %
Operating FFO available to common stockholders & OP unit holders$61,768 $56,034 $48,730 $117,802 $92,676 
Operating FFO per diluted share (4)
$0.78 $0.76 $0.70 $1.55 $1.36 
June 30,December 31,
Balance Sheet Data (including QTS' pro rata share of the unconsolidated joint venture) (5)
20212020
Total indebtedness, net of cash and cash equivalents $1,617,678 $1,905,889 
Indebtedness to last quarter annualized Adjusted EBITDA4.6x5.7x
Indebtedness to undepreciated real estate assets35.2 %46.5 %
Indebtedness to Implied Enterprise Value18.8 %27.8 %
________________________________________________________
(1)Excludes QTS’ pro rata share of the unconsolidated joint venture revenue. Total unconsolidated joint venture revenue at the joint venture’s 100% share was $4.7 million, $4.5 million and $3.5 million for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and $9.1 million and $6.5 million for the six months ended June 30, 2021 and 2020, respectively. QTS’ 50% pro rata share of unconsolidated joint venture revenue was $2.3 million, $2.2 million and $1.7 million for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and $4.6 million and $3.3 million for the six months ended June 30, 2021 and 2020, respectively.
(2)Basic and diluted net loss per share were calculated using the two-class method.
(3)Includes QTS’ pro rata share of results from its unconsolidated entity.
(4)Operating FFO per diluted share incorporates the effects of the Company’s Series B Convertible Preferred stock on an “as if” converted basis as the conversion was dilutive for the three and six months ended June 30, 2021.
(5)The Company has excluded associated debt issuance costs from the Total indebtedness line item for both periods presented; therefore, the total debt amount, as well as calculations based on the total debt amount, represents the full amount of debt that will be repaid less the amount of cash and cash equivalents on hand.

7
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Operating Portfolio Statistics
(including unconsolidated joint venture at the joint venture’s 100% share)
June 30,December 31,
20212020
Built out square footage:
Raised floor2,101,9061,957,825
Leasable raised floor1,702,3591,581,997
Leased raised floor1,579,0171,465,537
Data center % occupied92.8 %92.6 %
Total Raw Shell:
Total7,813,6187,813,618
Basis-of-design raised floor space (1)
3,542,3483,542,348
Data center properties2828
Basis of design raised floor % developed59.3 %55.3 %
Data center raised floor % owned (2)
97.1 %96.9 %
_________________________________________________
(1)See definition in Appendix.
(2)Includes the Santa Clara facility which is subject to a long-term ground lease, includes the unconsolidated joint venture property at the joint venture’s 100% share, and excludes facilities subject to finance lease obligations. Had the Santa Clara facility been excluded as an owned facility, the owned data center raised floor percentage would be 94.1% and 93.8% at June 30, 2021 and December 31, 2020, respectively.

Pending Acquisition by Blackstone

As previously announced, on June 7, 2021, the Company and QualityTech, LP, its operating partnership, entered into an agreement and plan of merger (“Merger Agreement”) with Volt Upper Holdings LLC, a Delaware limited liability company (“Parent”), Volt Lower Holdings LLC, a Delaware limited liability company (“Merger Sub I”), and Volt Acquisition LP, a Delaware limited partnership (“Merger Sub II”). Parent, Merger Sub I and Merger Sub II are affiliates of The Blackstone Group Inc. Pursuant to the Merger Agreement (i) Merger Sub II shall merge with and into the Operating Partnership (the “partnership merger”) with the Operating Partnership being the surviving entity and immediately following the consummation of the partnership merger (ii) the Company shall merge with and into Merger Sub I (the “Company merger”), with Merger Sub I being the surviving entity. Pursuant to the Merger Agreement (i) the outstanding shares of common stock of the Company will be acquired for $78 per share in an all-cash transaction, (ii) the outstanding shares of Series A Preferred Stock (other than shares owned by Parent, Merger Sub I or any subsidiary of Parent, the Company or Merger Sub I (such shares, “Excluded Shares”)) shall be automatically converted into the right to receive an amount in cash equal to $25.00 plus any accrued and unpaid dividends, without interest and (iii) the outstanding shares of Series B Preferred Stock (other than Excluded Shares) shall be automatically converted into one Series A preferred unit of Merger Sub I, which shall have terms materially the same as the Series B Preferred Stock and may be converted during the specified period following the partnership merger at the holder’s election in accordance with the terms of such securities.

The Company merger, partnership merger and the other transactions contemplated by the Merger Agreement (the “Merger Transactions”) are subject to customary closing conditions, including approval by the Company’s common stockholders at a special meeting to be held on August 26, 2021. The Merger Transactions are expected to close on the third business day after the conditions to closing are satisfied or waived, including approval of the Company’s stockholders of the merger and other transactions contemplated by the Merger Agreement. The Company can provide no assurances regarding whether the Merger Transactions will close as expected during the third quarter of 2021, or at all. The board of directors of the Company has unanimously approved the Merger Agreement, and has recommended approval of the merger, and the other transactions contemplated by the Merger Agreement, by the Company’s stockholders.
8
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Reconciliations of Return on Invested Capital (ROIC)
(unaudited and in thousands)
Return on Invested Capital (“ROIC”) is a non-GAAP measure that provides additional information to users of the financial statements. Management believes ROIC is a helpful metric for users of the financial statements to gauge the Company's performance of its business against the capital it has invested in the business.
ROIC (including QTS' pro rata share of the unconsolidated joint venture) Three Months Ended Six Months Ended
June 30,March 31,June 30,June 30,
20212021202020212020
NOI (1) (2)
$104,843$98,559$88,112$203,402$170,556
Annualized NOI 419,372394,236352,448406,804341,112
Average undepreciated real estate assets and other net fixed assets placed in service3,604,0393,448,0912,962,9953,531,1292,869,294
Annualized ROIC11.6 %11.4 %11.9 %11.5 %11.9 %
________________________________________________________
(1)Includes facility level general and administrative expense allocation charges of 4% of cash revenue for all facilities. These allocated charges aggregated to $5.7 million, $5.5 million and $4.8 million for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and $11.2 million and $9.5 million for the six months ended June 30, 2021 and 2020, respectively.
(2)NOI includes QTS’ pro rata share of NOI from the unconsolidated joint venture.
As ofAs of
Calculation of Average Undepreciated Real Estate Assets and Other Net Fixed Assets Placed in ServiceJune 30,March 31,June 30,June 30,
20212021202020212020
Real Estate Assets, net$3,739,533 $3,504,822 $2,988,744 $3,739,533 $2,988,744 
Less: Construction in progress(1,214,794)(1,119,749)(976,257)(1,214,794)(976,257)
Plus: Accumulated depreciation789,192 745,237 623,915 789,192 623,915 
Plus: Goodwill173,843 173,843 173,843 173,843 173,843 
Plus: Other fixed assets, net36,473 37,841 38,495 36,473 38,495 
Plus: Acquired intangibles, net (1)
51,912 54,617 63,925 51,912 63,925 
Plus: Leasing Commissions, net64,108 58,807 47,741 64,108 47,741 
Plus: Assets placed in service in unconsolidated joint venture (2)
56,937 55,455 51,678 56,937 51,678 
Total as of period end$3,697,204 $3,510,873 $3,012,084 $3,697,204 $3,012,084 
Average undepreciated real estate assets and other net fixed assets as of reporting period (3)
$3,604,039 $3,448,091 $2,962,995 $3,531,129 $2,869,294 
________________________________________________________
(1)Net of acquired intangible liabilities and deferred tax liabilities.
(2)Represents QTS’ basis in the assets in the joint venture which was $56.9 million as of June 30, 2021 (calculated as the cost basis of the assets contributed for in serviced phases of $125.8 million less the equity contribution of the joint venture partner and the joint venture partner’s portion of debt of $68.8 million), $55.5 million as of March 31, 2021 (calculated as the cost basis of the assets contributed for in serviced phases of $112.2 million less the equity contribution of the joint venture partner and the joint venture partner’s portion of debt of $56.7 million), and $51.7 million as of June 30, 2020 (calculated as the cost basis of the assets contributed for in serviced phases of $104.6 million less the equity contribution of the JV partner and the JV partner’s portion of debt of $52.9 million).
(3)Calculated by using average quarterly balance of each account.
9
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Implied Enterprise Value
Implied Enterprise Value as of June 30, 2021:Shares or Equivalents OutstandingMarket Price or Liquidation Value as of June 30, 2021Market Capitalization
(in thousands)
Class A Common Stock76,905,788 $77.30 $5,944,817 
Class B Common Stock124,481 77.30 9,622 
Total Shares Outstanding77,030,269 
Units of Limited Partnership Interest (1)
6,490,694 77.30 501,731 
Options to purchase Class A Common Stock and performance units (2)
1,542,383 77.30 119,226 
Fully Diluted Total Shares and Units of Limited Partnership Interest outstanding as of June 30, 2021:85,063,346 
Liquidation value of Series A Preferred Stock4,280,000 25.00 107,000 
Liquidation value of Series B Convertible Preferred Stock3,162,500 100.00 316,250 
Total Equity$6,998,646 
Total Indebtedness (3)
1,617,678 
Implied Enterprise Value$8,616,324 
________________________________________________________
(1)Includes 51,003 of operating partnership units representing the “in the money” value of Class O LTIP units on an “as if” converted basis as of June 30, 2021.
(2)Represents options to purchase shares of Class A Common Stock of QTS Realty Trust, Inc. representing the “in the money” value of options on an “as if” converted basis and the value of performance awards on an “as if” converted basis as of June 30, 2021.
(3)Excludes all debt issuance costs reflected as a reduction to liabilities at June 30, 2021 representing the full amount of debt that will be repaid, less the amount of cash and cash equivalents on hand. This also includes the Company’s pro rata share of unconsolidated joint venture debt, net of its pro rata share of cash on hand at the joint venture.
10
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg

Data Center Properties
The table below presents an overview of the portfolio of data center properties that the Company owns or leases, referred to herein as our data center properties, based on information as of June 30, 2021.
Net Rentable Square Feet (Operating NRSF) (1)
Properties
Year
Acquired (2)
Gross
Square
Feet (3)
Raised
Floor (4)
Office &
Other (5)
Supporting
Infrastructure (6)
Total
%
Occupied (7)
Annualized
Rent (8)
Available
Utility
Power
(MW) (9)
Basis of
Design
("BOD")
NRSF (10)
Current
Raised
Floor as a
% of BOD
Richmond, VA20101,318,353 140,398 51,093 153,449 344,940 83.5 %$32,562,651 110557,309 25 %
Atlanta, GA (DC - 1) 2006968,695 527,186 36,953 364,815 928,954 98.1 %123,084,878 72527,186 100 %
Irving, TX2013698,000 224,605 15,300 252,733 492,638 95.7 %57,374,515 140275,701 81 %
Princeton, NJ2014553,930 58,157 2,229 111,405 171,791 100.0 %10,558,271 22158,157 37 %
Atlanta, GA (DC - 2) 2020495,000 99,118 9,250 90,870 199,238 98.2 %27,076,030 100240,000 41 %
Chicago, IL2014474,979 127,222 4,931 125,595 257,748 91.1 %27,632,743 56215,855 59 %
Ashburn, VA (DC - 1) (11)
2018445,000 163,125 13,199 169,319 345,643 99.6 %24,842,959 50178,000 92 %
Suwanee, GA2005369,822 212,975 8,697 107,128 328,800 88.1 %59,776,332 36212,975 100 %
Piscataway, NJ2016360,000 118,263 19,243 116,289 253,795 95.0 %25,443,454 111176,000 67 %
Netherlands facilities (12)
2019312,114 38,632 — 47,367 85,999 81.7 %8,295,561 92158,000 24 %
Ashburn, VA (DC - 2) (13)
2021310,000 39,204 1,192 27,443 67,839 100.0 %— 50 169,664 23 %
Fort Worth, TX2016261,836 71,147 17,232 125,794 214,173 67.0 %10,107,749 5080,000 89 %
Hillsboro, OR2020158,000 23,563 1,000 20,240 44,803 81.3 %4,380,684 3085,000 28 %
Santa Clara, CA (14)
2007135,322 62,046 1,238 45,094 108,378 91.4 %25,944,154 1180,940 77 %
Sacramento, CA201292,644 54,595 2,794 23,916 81,305 59.1 %11,671,128 854,595 100 %
Dulles, VA (15)
201766,751 26,625 — 22,206 48,831 86.2 %13,267,724 1344,545 60 %
Leased facilities (16)
2006 & 2015187,706 59,065 18,650 41,901 119,616 84.0 %22,277,731 1079,717 74 %
Other (17)
Misc.147,435 22,380 98,674 30,074 151,128 79.8 %10,001,496 522,380 100 %
7,355,587 2,068,306 301,675 1,875,638 4,245,619 92.6 %$494,298,060 966 3,316,024 62 %
New Property Development
Manassas, VA (DC - 2) (18)
2021340,000 — — — — — %— — 160,000 — %
Unconsolidated Properties - at the Entity's 100% Share (19)
Manassas, VA (DC - 1)2018118,031 33,600 12,663 39,044 85,307 100.0 %11,164,640 135 66,324 51 %
Total Properties7,813,618 2,101,906 314,338 1,914,682 4,330,926 92.8 %$505,462,700 1,101 3,542,348 59 %
________________________________________________________
(1)Represents the total square feet of a building that is currently leased or available for lease plus developed supporting infrastructure, based on engineering drawings and estimates, but does not include space held for redevelopment or space used for our own office space.
(2)With respect to acquisitions, represents the year a property was acquired. With respect to properties under lease, represents the year our initial lease commenced for the property. With respect to new data center construction, represents the year the facility was opened or expected to be opened.
(3)With respect to our owned properties, gross square feet represents the entire building area. With respect to leased properties, gross square feet represents that portion of the gross square feet subject to our lease. Gross square feet includes 424,246 square feet of our office and support space, which is not included in operating NRSF.
(4)Represents management’s estimate of the portion of NRSF of the facility with available power and cooling capacity that is currently leased or readily available to be leased to customers as data center space based on engineering drawings.
(5)Represents the operating NRSF of the facility other than data center space (typically office and storage space) that is currently leased or available to be leased.
(6)Represents required data center support space, including mechanical, telecommunications and utility rooms, as well as building common areas.
(7)Calculated as data center raised floor that is subject to a signed lease for which billing has commenced divided by leasable raised floor based on the current configuration of the properties, expressed as a percentage.
(8)We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under executed contracts as of a particular date, which includes revenue from our rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from backlog contracts (as defined below) as of a particular date, unless otherwise specifically noted, nor does it reflect the accounting associated with any free rent, rent abatements or future scheduled rent increases.
(9)Represents installed utility power and transformation capacity that is available for use by the facility as of June 30, 2021.
(10)Represents the total sellable data center raised floor potential of the existing data center facility.
(11)This property was formerly known as “Ashburn, VA” but has been renamed “Ashburn, VA (DC - 1)” to distinguish between the existing data center and the recently developed data center shown as “Ashburn, VA (DC - 2).”
(12)Consists of two data centers located in Eemshaven, Netherlands and Groningen, Netherlands.
(13)Represents the recently developed data center in our Ashburn, VA market.
(14)Subject to long-term ground lease.
(15)Consists of one data center in Dulles, Virginia. The Dulles campus previously consisted of two data center buildings, however the Company relocated customers from the smaller and older facility to the new facility in order to optimize its operating cost structure.
(16)Includes 6 facilities. All facilities are leased, including one subject to a finance lease.
(17)Consists of Miami, FL; Lenexa, KS; and Overland Park, KS facilities.
(18)Represents the development of a new data center building at our Manassas, VA campus. The Manassas, VA (DC - 2) data center is 100% owned and consolidated by QTS and is separate from the Manassas, VA (DC - 1) data center that is owned by the unconsolidated entity.
(19)Represents our unconsolidated entity at 100% share. Our equity ownership of the unconsolidated entity is 50%.
11
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
NOI by Facility and Capital Expenditure Summary
(unaudited and in thousands)
The Company calculates net operating income, or NOI, as net income (loss) (computed in accordance with GAAP), excluding: interest expense, interest income, tax expense (benefit) of taxable REIT subsidiaries, depreciation and amortization, write-off of unamortized deferred financing costs, other (income) expense, debt restructuring costs, transaction and integration costs, gain (loss) on sale of real estate, restructuring costs, general and administrative expenses and similar adjustments for unconsolidated entities. The Company believes that NOI is another metric that is often utilized to evaluate returns on operating real estate from period to period and also, in part, to assess the value of the operating real estate.
The breakdown of NOI by facility is shown below:
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
20212021202020212020
Breakdown of NOI by facility:
Ashburn (DC - 1) data center$8,421 $6,502 $3,799 $14,923 $6,405 
Atlanta (DC - 1) data center26,954 26,721 26,843 53,675 52,944 
Atlanta (DC - 2) data center7,051 4,784 — 11,835 — 
Atlanta-Suwanee data center11,993 11,751 12,592 23,744 25,394 
Chicago data center5,850 4,848 4,460 10,698 8,351 
Dulles data center2,614 2,943 3,188 5,557 6,347 
Fort Worth data center2,928 2,923 2,296 5,851 3,618 
Hillsboro data center586 52 104 638 90 
Irving data center13,491 13,352 11,033 26,843 22,445 
Leased data centers (1)
2,117 1,909 1,818 4,026 3,701 
Netherlands data centers (2)
536 794 973 1,330 1,722 
Piscataway data center4,992 5,189 4,204 10,181 7,839 
Princeton data center2,543 2,591 2,476 5,134 4,982 
Richmond data center7,082 6,721 6,436 13,803 12,712 
Sacramento data center1,586 1,762 1,422 3,348 3,019 
Santa Clara data center2,301 2,409 2,391 4,710 4,986 
Other facilities (3)
2,683 2,175 3,150 4,858 4,230 
NOI from consolidated operations (4)
$103,728 $97,426 $87,185 $201,154 $168,785 
Pro rata share of NOI from unconsolidated entity (5)
1,115 1,133 927 2,248 1,771 
Total NOI$104,843 $98,559 $88,112 $203,402 $170,556 
________________________________________________________
(1)Includes 6 facilities. All facilities are leased, including one subject to a finance lease.
(2)Consists of two data centers located in Eemshaven, Netherlands and Groningen, Netherlands.
(3)Consists of Miami, FL; Lenexa, KS; and Overland Park, KS facilities.
(4)Includes facility level general and administrative allocation charges of 4% of cash revenue for all facilities. These allocated charges aggregated to $5.7 million, $5.5 million and $4.8 million for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and $11.2 million and $9.5 million the six months ended June 30, 2021 and 2020, respectively.
(5)QTS’ pro rata share of the unconsolidated joint venture is 50%.
12
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Our cash paid for capital expenditures is summarized as follows:
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
20212021202020212020
Development (1)
$213,918 $184,170 $187,824 $398,088 $332,304 
Acquisitions26,753 401 — 27,154 1,797 
Maintenance capital expenditures 2,337 1,704 4,220 4,041 5,882 
Other capital expenditures (2)
34,183 28,739 23,731 62,922 50,134 
$277,191 $215,014 $215,775 $492,205 $390,117 
________________________________________________________
(1)Includes customer specific capital as well as QTS’ pro rata share of capital expenditures associated with the unconsolidated joint venture. Total capital expenditures of the joint venture (at the joint venture’s 100% share) were approximately $13 million, $1 million, and $12 million for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and $14 million and $13 million the six months ended June 30, 2021 and 2020, respectively.
(2)Represents capital expenditures for capitalized interest, commissions, personal property, overhead costs and corporate fixed assets. Corporate fixed assets primarily relate to construction of corporate offices, leasehold improvements and product related assets.
13
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Leasing Statistics – Signed Leases
Incremental Annualized Rent, Net of Downgrades reflects net incremental MRR signed during the period for purposes of tracking incremental revenue contribution. The amounts below include renewals when there was a change in square footage rented, but exclude renewals where square footage remained consistent before and after renewal. (See renewal table on page 16 for such renewals). The amounts below include results of the consolidated business as well as QTS’ 50% pro rata share of the leasing activity attributable to the joint venture, if any.
During the quarter ended June 30, 2021, QTS entered into new and modified renewal leases aggregating to $26.7 million of incremental annualized rent. The Company’s second quarter leasing performance was driven by several multi-megawatt leases signed in its hyperscale product offering, combined with continued steady performance in its hybrid colocation product offering. Annualized rent per leased square foot for new and modified renewal leases during the second quarter was $277. Lower annualized rent per leased square foot in the second quarter relative to the prior four quarter average was primarily driven by a larger hyperscale lease which was structured as a triple-net lease, whereby certain QTS operating costs associated with the customer's deployment are recovered from the customer and not directly factored into the base rent. Excluding the impact of this lease, annualized rent per leased square foot during the second quarter would have been approximately $326.

The pricing on new and modified leases signed varies quarter to quarter based on the mix of deals leased, as hyperscale and hybrid colocation leases vary on a rate per square foot basis. Annualized rent per leased square foot is computed using the total rent associated with all new and modified leases for the respective periods.
PeriodNumber of Leases Annualized rent per leased sq ft
Incremental Annualized Rent, Net of Downgrades (1)
New/Modified Leases SignedQ2 2021468$277 
(3)
$26,730,104 
P4QA (2)
51942526,981,392
Q1 202151934520,605,393
Q4 202051945240,272,870
Q3 2020540390
(4)
26,002,722
Q2 202049954821,044,584
________________________________________________________
(1)Amounts include incremental MRR only, net of downgrades. Figures do not include cost recoveries.
(2)Average of prior four quarters.
(3)Pricing on new and modified renewal leases during the quarter reflects a larger hyperscale contract signed during the quarter which was structured as a triple-net lease. Excluding the impact of this lease, annualized rent per leased square foot during the second quarter would have been approximately $326.
(4)Pricing on new and modified renewal leases during the quarter reflects a larger hyperscale contract signed during the quarter which was structured as a triple-net lease. Excluding the impact of this lease, annualized rent per leased square foot during the third quarter would have been approximately $432.

14
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
The following tables outline the Company’s backlog (which represents MRR, excluding cost recoveries, for customer leases that have been signed but have not yet commenced as of period end) as of June 30, 2021, both on a GAAP rent and cash rent basis:
Backlog - GAAP rent (1)
20212022ThereafterTotal
MRR$2,995,732 $2,260,957 $2,200,005 $7,456,694 
Incremental revenue (2)
10,766,155 20,174,110 26,400,060 
Annualized revenue (3)
$35,948,784 $27,131,484 $26,400,060 $89,480,328 
Backlog - Cash rent (1)
20212022ThereafterTotal
MRR$5,007,779 $3,661,320 $4,514,350 $13,183,449 
Incremental revenue (2)
17,093,259 29,716,610 54,172,200 
Annualized revenue (3)
$60,093,348 $43,935,840 $54,172,200 $158,201,388 
________________________________________________________
(1)Includes the Company’s consolidated backlog balance in addition to the backlog associated with the unconsolidated joint venture at QTS’ pro rata share of the backlog revenue. Of the $89.5 million backlog of GAAP rent, approximately $3.1 million related to QTS’ pro rata share of backlog revenue associated with the unconsolidated joint venture. Of the $158.2 million backlog of cash rent, approximately $3.6 million related to QTS’ pro rata share of backlog revenue associated with the unconsolidated joint venture.
(2)Incremental revenue represents the expected amount of recognized MRR for the business in the period based on when the backlog leases commence throughout the period.
(3)Annualized revenue represents the backlog MRR multiplied by 12, demonstrating how much MRR might have been recognized if the leases commencing in the period were in place for an entire year.
The Company estimates the remaining cost to provide the space, power, connectivity and other services to the customer contracts within its backlog as of June 30, 2021 to be approximately $391 million. This estimate generally includes customers with newly contracted space of more than 3,300 square feet of raised floor space. The space, power and other services provided to customers that contract for smaller amounts of space is generally provided by existing space which was previously developed.
15
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Leasing Statistics – Renewed Leases and Rental Churn
The mix of leasing activity has a significant impact on quarterly rates, both within major product segments and for overall blended renewal rates. The Company’s rate performance will vary quarter to quarter based on the mix of deals leased as hyperscale and hybrid colocation vary on a rate per square foot basis.
Consistent with the Company’s strategy and business model, the renewal rates below reflect total MRR per square foot including all subscribed services. For comparability, the Company includes only those customers that have maintained consistent space footprints in the computations below. All customers with space changes are incorporated into new/modified leasing statistics and rates. The amounts below include results of the consolidated business as well as QTS’ 50% pro rata share of the renewal leasing activity attributable to the joint venture, if any.
The average rent per square foot for renewals signed in the second quarter of 2021 was 7.4% higher than the rates for those customers immediately prior to renewal. The increase in the renewal rate of 7.4% was primarily attributable to a large number of hybrid colocation renewals with power and connectivity increases upon renewal. The Company expects renewal rates will generally increase in the low to mid-single digit percentage range.
Rental Churn (which the Company defines as MRR lost in the period to a customer intending to fully exit the QTS platform in the near term compared to total MRR at the beginning of the period) was 0.5% for the second quarter of 2021 and 1.2% for the six months ended June 30, 2021.
PeriodNumber of Renewed LeasesAnnualized Rent per Leased Sq FtAnnualized Rent
Rent
Change (1)
Renewed LeasesQ2 2021113$946 $14,586,804 7.4%
P4Q avg (2)
10853719,885,3221.2%
Q1 202112850822,992,9122.2%
Q4 20209955322,462,764(1.5)%
(3)
Q3 20209160914,530,0201.8%
Q2 202011250919,555,5932.6%
________________________________________________________
(1)Calculated as the percentage change of the rent per square foot immediately before renewal when compared to the rent per square foot immediately after renewal.
(2)Average of prior four quarters.
(3)The decline in the renewal rate of 1.5% was largely due to a single customer renewal downgrade that occurred as part of a broader multi-site expansion plan. Excluding this customer lease from the renewal base, QTS’ renewal rates on a per square foot basis would have represented a 2.3% increase relative to pre-renewal rates.
16
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Lease Expirations
Hyperscale leases are typically 5-10 years with the majority of hyperscale lease expirations occurring in 2022 and beyond. Hybrid colocation leases are typically 3 years in duration, with the majority of hybrid colocation lease expirations occurring between 2021 and 2023. The following table sets forth a summary schedule of the lease expirations as of June 30, 2021. Unless otherwise stated in the footnotes, the information set forth in the table assumes that customers exercise no renewal options and all early termination rights are exercised.
Note: The table below includes the Company’s pro rata share of leases associated with the unconsolidated joint venture. QTS’ pro rata share of the joint venture is 50%.
Year of Lease Expiration
Number of Leases Expiring (1)
Total Raised Floor of Expiring Leases% of Portfolio Leased Raised Floor
Annualized Rent (2)
% of Portfolio Annualized RentHyperscale as % of Portfolio Annualized RentHybrid Colocation as % of Portfolio Annualized Rent
Month-to-Month (3)
415 3,802 — %$6,435,082 1 %— %1 %
20211,037 230,218 15 %89,597,343 18 %6 %12 %
20221,626 372,953 24 %140,383,672 28 %12 %16 %
20231,043 164,692 10 %79,474,679 16 %3 %13 %
2024580 204,760 13 %64,740,625 13 %7 %6 %
After 2024617 586,317 38 %119,248,979 24 %14 %10 %
Portfolio Total5,318 1,562,742 100 %$499,880,380 100 %42 %58 %
________________________________________________________
(1)Represents each agreement with a customer signed as of June 30, 2021 for which billing has commenced; a lease agreement could include multiple spaces and a customer could have multiple leases.
(2)The Company defines annualized rent as MRR multiplied by 12. The Company calculates MRR as monthly contractual revenue under executed contracts as of a particular date, but excludes customer recoveries, deferred set up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from backlog contracts as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments.
(3)Consists of customer leases whose original contract terms ended and have continued on a month-to-month basis.
17
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Largest Customers
As of June 30, 2021, the Company’s portfolio was leased to over 1,200 customers comprised of companies of all sizes representing an array of industries, each with unique and varied business models and needs. The following table sets forth information regarding the ten largest customers in the portfolio based on annualized rent as of June 30, 2021 (does not include rents or maturities associated with backlog customers or ramps for existing customers which have not yet commenced billing).
Note: The table below includes the Company’s pro rata share of leases associated with the unconsolidated joint venture. QTS’ pro rata share of the joint venture is 50%.
Principal Customer IndustryNumber of Locations
Annualized Rent (1)
% of Portfolio Annualized Rent
Weighted Average Remaining Lease Term (months) (2)
Content & Digital Media2$72,965,722 14.6 %46
Cloud & IT Services425,759,368 5.2 %48
Cloud & IT Services619,864,547 4.0 %62
Cloud & IT Services119,755,678 4.0 %9
Content & Digital Media416,201,373 3.2 %13
Cloud & IT Services915,136,885 3.0 %35
Cloud & IT Services314,297,565 2.9 %40
Cloud & IT Services210,217,496 2.0 %26
Cloud & IT Services19,670,200 1.9 %48
Network158,134,125 1.6 %47
Total / Weighted Average$212,002,959 42.4 %40
________________________________________________________
(1)Annualized rent is presented for leases commenced as of June 30, 2021. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from backlog leases (which represent customer leases that have been executed but for which lease payments have not commenced) as of a particular date. This amount reflects the annualized cash rental payments. It does not reflect any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.
(2)Weighted average based on customer’s percentage of total annualized rent expiring and is as of June 30, 2021.
18
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Product & Industry Diversification
The following table sets forth information relating to the distribution of leases at the properties, by type of product offering, as of June 30, 2021:
June 30, 2021December 31, 2020
Annualized Rent (1)
% of Portfolio
Annualized Rent (1)
% of Portfolio
Hyperscale$204,419,332 42 %$170,692,207 37 %
Hybrid Colocation295,461,048 58 %291,770,198 63 %
Portfolio Total$499,880,380 100 %$462,462,405 100 %
________________________________________________________
(1)Includes the Company’s pro rata share of leases associated with the unconsolidated joint venture. QTS’ pro rata share of the joint venture is 50%.
The following table sets forth information relating to the industry segmentation as a percentage of annualized rent of customers as of June 30, 2021:
chart-96eed3528e3b49b481f.jpg
1) Includes the Company’s pro rata share of leases associated with the unconsolidated joint venture. QTS’ pro rata share of the joint venture is 50%.

The following table sets forth information relating to the industry segmentation as a percentage of annualized rent of customers as of December 31, 2020:
chart-bc274165827047dcb5e.jpg
1) Includes the Company’s pro rata share of leases associated with the unconsolidated joint venture. QTS’ pro rata share of the joint venture is 50%.
19
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg

Debt Summary and Debt Maturities
(unaudited and in thousands)
The following tables set forth a summary of the Company’s debt instruments:
Weighted Average
Effective Interest Rate at
June 30, 2021 (1)
Outstanding Balance as of:
Maturity DateJune 30, 2021December 31, 2020
Unsecured Credit Facility (2)
     Revolving Credit Facility1.35%December 17, 2023$95,156 $392,337 
     Term Loan A3.26%December 17, 2024225,000 225,000 
     Term Loan B3.30%April 27, 2025225,000 225,000 
     Term Loan C3.46%October 18, 2026250,000 250,000 
Term Loan D (2)
1.45%January 15, 2026250,000 250,000 
2028 Senior Notes (2)
3.88%October 1, 2028500,000 500,000 
Finance Leases4.36%2031 - 204142,395 41,718 
Total consolidated debt3.12%1,587,551 1,884,055 
QTS’ Pro Rata Share of Unconsolidated Joint Venture Debt (2)
4.04%February 22, 202359,611 45,813 
Total consolidated and unconsolidated debt$1,647,162 $1,929,868 
________________________________________________________
(1)The coupon interest rates associated with Term Loan A, Term Loan B, Term Loan C and debt at the unconsolidated joint venture level incorporate the effects of interest rate swaps in effect as of June 30, 2021.
(2)Balances exclude debt issuance costs reflected as offsets to liabilities.


A summary of the Company’s fixed versus floating rate debt:
Outstanding Balance as of:
June 30, 2021 (1)
% of total
Outstanding Balance as of:
December 31, 2020 (1)
% of total
Fixed Rate Debt$1,302,006 79.0 %$1,287,531 66.7 %
Floating Rate Debt345,156 21.0 %642,337 33.3 %
$1,647,162 100.0 %$1,929,868 100.0 %
________________________________________________________
(1)As of June 30, 2021 and December 31, 2020, the entire balance of term loan debt associated with Term Loan A, Term Loan B, and Term Loan C, as well as debt at the joint venture, was swapped to a fixed rate.
Scheduled debt maturities as of June 30, 2021:

Debt instruments20212022202320242025ThereafterTotal
Unsecured Credit Facility (1)
$— $— $95,156 $225,000 $225,000 $250,000 $795,156 
Term Loan D (1)
— — — — — 250,000 250,000 
2028 Senior Notes (1)
— — — — — 500,000 500,000 
Finance Leases1,400 3,007 3,283 3,574 3,883 27,248 42,395 
Total consolidated debt1,400 3,007 98,439 228,574 228,883 1,027,248 1,587,551 
QTS’ Pro Rata Share of Unconsolidated Joint Venture Debt (1)
2 4 59,504 4 5 92 59,611 
Total consolidated and unconsolidated debt$1,402 $3,011 $157,943 $228,578 $228,888 $1,027,340 $1,647,162 
________________________________________________________
(1)Balances excludes debt issuance costs reflected as offsets to liabilities.

20
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Interest Summary
(unaudited and in thousands)
A summary of the Company’s interest expense is as follows:
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
20212021202020212020
Interest costs and fees$14,074 $14,062 $13,627 $28,136 $27,903 
Amortization of deferred financing costs1,129 1,130 991 2,259 1,978 
Capitalized interest (1)
(7,751)(7,044)(7,694)(14,795)(15,795)
Total consolidated interest expense7,452 8,148 6,924 15,600 14,086 
QTS’ pro rata share of unconsolidated joint venture interest expense627 648 526 1,275 1,067 
Total consolidated and unconsolidated interest expense$8,079 $8,796 $7,450 $16,875 $15,153 
________________________________________________________
(1)The weighted average interest rate, including the effects of interest rate swaps, for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020 was 3.25%, 3.13%, and 3.12%, respectively.
21
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Appendix
Non-GAAP Financial Measures
This document includes certain non-GAAP financial measures that management believes are helpful in understanding the Company’s business, as further described below.
The Company considers the following non-GAAP financial measures to be useful to investors as key supplemental measures of the Company’s performance: (1) FFO, Operating FFO and Adjusted Operating FFO; (2) MRR and Recognized MRR; (3) NOI; and (4) EBITDAre and Adjusted EBITDA. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss and cash flows from operating activities as a measure of the Company’s operating performance. FFO, Operating FFO, Adjusted Operating FFO, MRR, NOI, EBITDA and Adjusted EBITDA, as calculated by us may not be comparable to FFO, Operating FFO, Adjusted Operating FFO, MRR, NOI, EBITDA and Adjusted EBITDA as reported by other companies that do not use the same definition or implementation guidelines or interpret the standards differently from us.
Definitions
Backlog. The Company defines backlog as MRR, excluding cost recoveries, for customer leases that have been signed but have not yet commenced.

Leasable raised floor. The Company defines leasable raised floor as the amount of raised floor square footage that the Company has leased plus the available capacity of raised floor square footage that is in a leasable format as of a particular date and according to a particular product configuration. The amount of leasable raised floor may change even without completion of new development projects due to changes in the Company’s configuration of product space.

Basis-of-design raised floor space. The Company defines basis-of-design raised floor space as the total data center raised floor potential of its existing data center facilities.

Operating NRSF. Represents the total square feet of a building that is currently leased or available for lease plus developed supporting infrastructure, based on engineering drawings and estimates, but does not include space held for development or space used for the Company’s own office space.

The Company. Refers to QTS Realty Trust, Inc., a Maryland corporation, together with its consolidated subsidiaries, including QualityTech, LP (the “Operating Partnership” or “OP”).

22
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
FFO, Operating FFO, and Adjusted Operating FFO
The Company considers funds from operations (“FFO”), to be a supplemental measure of its performance which should be considered along with, but not as an alternative to, net income (loss) and cash provided by operating activities as a measure of operating performance. The Company calculates FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”). FFO represents net income (loss) (computed in accordance with GAAP), adjusted to exclude gains (or losses) from sales of depreciable real estate related to its primary business, impairment write-downs of depreciable real estate related to its primary business, real estate-related depreciation and amortization and similar adjustments for unconsolidated entities. To the extent the Company incurs gains or losses from the sale of assets that are incidental to its primary business, or incurs impairment write-downs associated with assets that are incidental to its primary business, it includes such charges in its calculation of FFO. The Company’s management uses FFO as a supplemental operating performance measure because, in excluding real estate-related depreciation and amortization, impairment write-downs of depreciable real estate and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs.
Due to the volatility and nature of certain significant charges and gains recorded in the Company’s operating results that management believes are not reflective of its operating performance, management computes an adjusted measure of FFO, which the Company refers to as Operating funds from operations (“Operating FFO”). Operating FFO is a non-GAAP measure that is used as a supplemental operating measure and to provide additional information to users of the financial statements. The Company generally calculates Operating FFO as FFO excluding certain non-routine charges and gains and losses that management believes are not indicative of the results of the Company’s operating real estate portfolio. The Company believes that Operating FFO provides investors with another financial measure that may facilitate comparisons of operating performance between periods and, to the extent they calculate Operating FFO on a comparable basis, between REITs.
Adjusted Operating Funds From Operations (“Adjusted Operating FFO”) is a non-GAAP measure that is used as a supplemental operating measure and to provide additional information to users of the financial statements. The Company calculates Adjusted Operating FFO by adding or subtracting from Operating FFO items such as: maintenance capital investment, paid leasing commissions, amortization of deferred financing costs, non-real estate depreciation and amortization, straight line rent adjustments, income taxes, equity-based compensation and similar adjustments for unconsolidated entities.
The Company offers these measures because it recognizes that FFO, Operating FFO and Adjusted Operating FFO will be used by investors as a basis to compare its operating performance with that of other REITs. However, because FFO, Operating FFO and Adjusted Operating FFO exclude real estate depreciation and amortization and capture neither the changes in the value of the Company’s properties that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of its properties, all of which have real economic effect and could materially impact its financial condition, cash flows and results of operations, the utility of FFO, Operating FFO and Adjusted Operating FFO as measures of its operating performance is limited. The Company’s calculation of FFO may not be comparable to measures calculated by other companies who do not use the NAREIT definition of FFO or do not calculate FFO in accordance with NAREIT guidance. In addition, the Company’s calculations of FFO, Operating FFO and Adjusted Operating FFO are not necessarily comparable to FFO, Operating FFO and Adjusted Operating FFO as calculated by other REITs that do not use the same definition or implementation guidelines or interpret the standards differently from us. FFO, Operating FFO and Adjusted Operating FFO are non-GAAP measures and should not be considered a measure of the Company’s results of operations or liquidity or as a substitute for, or an alternative to, net income (loss), cash provided by operating activities or any other performance measure determined in accordance with GAAP, nor is it indicative of funds available to fund its cash needs, including its ability to make distributions to its stockholders.
23
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
A reconciliation of net income to FFO, Operating FFO and Adjusted Operating FFO is presented below (unaudited and in thousands):
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
20212021202020212020
FFO      
Net income$4,199 $7,918 $10,209 $12,117 $18,329 
Equity in net loss of unconsolidated entity705 559 590 1,264 1,267 
Real estate depreciation and amortization55,044 52,629 44,196 107,673 85,896 
Pro rata share of FFO from unconsolidated entity474 457 399 931 677 
FFO (1)
60,422 61,563 55,394 121,985 106,169 
Preferred stock dividends(7,045)(7,045)(7,045)(14,090)(14,090)
FFO available to common stockholders & OP unit holders53,377 54,518 48,349 107,895 92,079 
Transaction and integration costs8,391 1,516 381 9,907 597 
Operating FFO available to common stockholders & OP unit holders (2)
61,768 56,034 48,730 117,802 92,676 
Maintenance capital expenditures(2,337)(1,704)(4,220)(4,041)(5,882)
Leasing commissions paid(11,491)(9,460)(6,805)(20,951)(15,803)
Amortization of deferred financing costs1,129 1,130 991 2,259 1,978 
Non real estate depreciation and amortization3,212 2,876 3,358 6,088 6,728 
Straight-line rent revenue and expense and other(7,916)(7,609)(5,702)(15,525)(9,457)
Tax expense (benefit) from operating results251 138 138 389 (31)
Equity-based compensation expense7,311 6,856 6,082 14,167 10,957 
Adjustments for unconsolidated entity51 46 (88)97 (22)
Adjusted Operating FFO available to common stockholders & OP unit holders (2)
$51,978 $48,307 $42,484 $100,285 $81,144 
________________________________________________________
(1)No gains, losses or impairment write-downs associated with assets incidental to our primary business were incurred during the three and six months ended June 30, 2021 and 2020.
(2)The Company’s calculations of Operating FFO and Adjusted Operating FFO may not be comparable to Operating FFO and Adjusted Operating FFO as calculated by other REITs that do not use the same definition.
24
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Monthly Recurring Revenue (MRR) and Recognized MRR
The Company calculates MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from its rental and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR is also calculated to include the Company’s pro rata share of monthly contractual revenue under signed leases as of a particular date associated with unconsolidated entities, which includes revenue from the unconsolidated entity’s rental and managed services activities, but excludes the unconsolidated entity’s customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR reflects the annualized cash rental payments. It does not include the impact from backlog leases as of a particular date, unless otherwise specifically noted.
Separately, the Company calculates recognized MRR as the recurring revenue recognized during a given period, which includes revenue from its rental and managed services activities, but excludes customer recoveries, deferred set up fees, variable related revenues, non-cash revenues and other one-time revenues.
Management uses MRR and recognized MRR as supplemental performance measures because they provide useful measures of increases in contractual revenue from the Company’s customer leases and customer leases attributable to the Company’s business. MRR and recognized MRR should not be viewed by investors as alternatives to actual monthly revenue, as determined in accordance with GAAP. Other companies may not calculate MRR or recognized MRR in the same manner. Accordingly, the Company’s MRR and recognized MRR may not be comparable to other companies’ MRR and recognized MRR. MRR and recognized MRR should be considered only as supplements to total revenues as a measure of its performance. MRR and recognized MRR should not be used as measures of the Company’s results of operations or liquidity, nor is it indicative of funds available to meet its cash needs, including its ability to make distributions to its stockholders.
A reconciliation of total revenues to recognized MRR in the period and MRR at period-end is presented below (unaudited and in thousands):

Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
20212021202020212020
Recognized MRR in the period    
Total period revenues (GAAP basis)$155,220 $148,732 $131,640 $303,952 $257,932 
Less: Total period variable lease revenue from recoveries(17,692)(16,128)(12,528)(33,820)(24,803)
Total period deferred setup fees(7,241)(6,436)(4,520)(13,677)(8,444)
Total period straight-line rent and other(10,456)(11,623)(9,327)(22,079)(17,359)
Recognized MRR in the period119,831 114,545 105,265 234,376 207,326 
MRR at period end
Total period revenues (GAAP basis)$155,220 $148,732 $131,640 $303,952 $257,932 
Less: Total revenues excluding last month (102,328)(99,683)(87,538)(251,060)(213,830)
Total revenues for last month of period52,892 49,049 44,102 52,892 44,102 
Less: Last month variable lease revenue from recoveries(6,358)(5,163)(4,350)(6,358)(4,350)
Last month deferred setup fees(2,548)(2,179)(1,533)(2,548)(1,533)
Last month straight-line rent and other(2,794)(2,370)(2,480)(2,794)(2,480)
Add: Pro rata share of MRR at period end of unconsolidated entity465 472 352 465 352 
MRR at period end$41,657 $39,809 $36,091 $41,657 $36,091 
25
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre) and Adjusted EBITDA,
The Company calculates EBITDAre in accordance with the standards established by NAREIT. EBITDAre represents net income (loss) (computed in accordance with GAAP), adjusted to exclude gains (or losses) from sales of depreciated property related to its primary business, income tax expense (or benefit), interest expense, depreciation and amortization, impairments of depreciated property related to its primary business, and similar adjustments for unconsolidated entities. The Company’s management uses EBITDAre as a supplemental performance measure because it provides performance measures that, when compared year over year, captures the performance of the Company’s operations by removing the impact of capital structure (primarily interest expense) and asset-based charges (primarily depreciation and amortization) from its operating results.
Due to the volatility and nature of certain significant charges and gains recorded in the Company’s operating results that management believes are not reflective of its operating performance, management computes an adjusted measure of EBITDAre, which the Company refers to as Adjusted EBITDA. The Company generally calculates Adjusted EBITDA excluding certain non-routine charges, write off of unamortized deferred financing costs, gains (losses) on extinguishment of debt, restructuring costs, and transaction and integration costs, as well as the Company’s pro-rata share of each of those respective expenses associated with the unconsolidated entity aggregated into one line item categorized as “Adjustments for the unconsolidated entity.” In addition, the Company calculates Adjusted EBITDA excluding certain non-cash recurring costs such as equity-based compensation. The Company believes that Adjusted EBITDA provides investors with another financial measure that may facilitate comparisons of operating performance between periods and, to the extent other REITs calculate Adjusted EBITDA on a comparable basis, between REITs.
Management uses EBITDAre and Adjusted EBITDA as supplemental performance measures as they provide useful measures of assessing the Company’s operating results. Other companies may not calculate EBITDAre or Adjusted EBITDA in the same manner. Accordingly, the Company’s EBITDAre and Adjusted EBITDA may not be comparable to others. EBITDAre and Adjusted EBITDA should be considered only as supplements to net income (loss) as measures of the Company’s performance and should not be used as substitutes for net income (loss), as measures of its results of operations or liquidity or as an indication of funds available to meet its cash needs, including its ability to make distributions to its stockholders.
A reconciliation of net income to EBITDAre and Adjusted EBITDA is presented below (unaudited and in thousands):
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
20212021202020212020
EBITDAre and Adjusted EBITDA
Net income$4,199 $7,918 $10,209 $12,117 $18,329 
Equity in net loss of unconsolidated entity705 559 590 1,264 1,267 
Interest income(1)— (2)(1)(2)
Interest expense7,452 8,148 6,924 15,600 14,086 
Tax expense (benefit)251 138 138 389 (31)
Depreciation and amortization58,255 55,506 47,554 113,761 92,624 
Pro rata share of EBITDAre from unconsolidated entity1,100 1,106 924 2,206 1,743 
EBITDAre (1)
$71,961 $73,375 $66,337 $145,336 $128,016 
Equity-based compensation expense7,311 6,856 6,082 14,167 10,957 
Transaction, integration and implementation costs8,391 1,516 381 9,907 597 
Adjusted EBITDA$87,663 $81,747 $72,800 $169,410 $139,570 
________________________________________________________
(1)No gains, losses or impairment write-downs associated with assets incidental to our primary business were incurred during the three and six months ended June 30, 2021 and 2020.
26
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com
qts-20200727xex99d2002.jpg
Net Operating Income (NOI)
The Company calculates net operating income (“NOI”) as net income (loss) (computed in accordance with GAAP), excluding: interest expense, interest income, tax expense (benefit) of taxable REIT subsidiaries, depreciation and amortization, write off of unamortized deferred financing costs, other (income) expense, debt restructuring costs, transaction, integration and impairment costs, gain (loss) on sale of real estate, restructuring costs, general and administrative expenses and similar adjustments for unconsolidated entities. The Company allocates a management fee charge of 4% of cash revenues for all facilities as a property operating cost and a corresponding reduction to general and administrative expense to cover the day-to-day administrative costs to operate our data centers. The management fee charge is reflected as a reduction to net operating income.
Management uses NOI as a supplemental performance measure because it provides a useful measure of the operating results from its customer leases. In addition, management believes it is useful to investors in evaluating and comparing the operating performance of its properties and to compute the fair value of its properties. The Company’s NOI may not be comparable to other REITs’ NOI as other REITs may not calculate NOI in the same manner. NOI should be considered only as a supplement to net income as a measure of the Company’s performance and should not be used as a measure of results of operations or liquidity or as an indication of funds available to meet cash needs, including the ability to make distributions to stockholders. NOI is a measure of the operating performance of the Company’s properties and not of the Company’s performance as a whole. NOI is therefore not a substitute for net income (loss) as computed in accordance with GAAP.
A reconciliation of net income to NOI is presented below (unaudited and in thousands):
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
20212021202020212020
Net Operating Income (NOI)    
Net income$4,199 $7,918 $10,209 $12,117 $18,329 
Equity in net loss of unconsolidated entity705 559 590 1,264 1,267 
Interest income(1)— (2)(1)(2)
Interest expense7,452 8,148 6,924 15,600 14,086 
Depreciation and amortization58,255 55,506 47,554 113,761 92,624 
Other (income) expense— — — — (159)
Tax expense (benefit)251 138 138 389 (31)
Transaction and integration costs8,391 1,516 381 9,907 597 
General and administrative expenses24,476 23,641 21,391 48,117 42,074 
NOI from consolidated operations (1)
$103,728 $97,426 $87,185 $201,154 $168,785 
Pro rata share of NOI from unconsolidated entity (2)
1,115 1,133 927 2,248 1,771 
Total NOI (1)
$104,843 $98,559 $88,112 $203,402 $170,556 
________________________________________________________
(1)Includes facility level general and administrative allocation charges of 4% of cash revenue for all facilities. These allocated charges aggregated to $5.7 million, $5.5 million and $4.8 million for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020, respectively, and $11.2 million and $9.5 million the six months ended June 30, 2021 and 2020, respectively.
(2)QTS’ pro rata share of the unconsolidated joint venture is 50%.
27
QTS Q2 Earnings 2021
Contact: IR@qtsdatacenters.com