QTS Realty Trust, Inc.

Transcription

1 QTS Realty Trust, Inc. Investor Presentation First Quarter 2019

2 QTS Realty Trust, Inc. 1 Forward Looking Statements Some of the statements contained in this presentation 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 our capital resources, 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. You can also identify forward-looking statements by discussions of strategy, plans or intentions. The forward-looking statements contained in this presentation reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). 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: adverse economic or real estate developments in our 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 our international operations; our ability to successfully execute our strategic growth plan and realize its expected benefits; difficulties in identifying properties to acquire and completing acquisitions; our 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 we operate; 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 our failure to obtain necessary outside financing; dependence on third parties to provide Internet, telecommunications and network connectivity to our data centers; our failure to qualify and maintain our qualification as a REIT; environmental uncertainties and risks related to natural disasters; financial market fluctuations; and changes in real estate and zoning laws, revaluations for tax purposes and increases in real property tax rates. While forward-looking statements reflect our 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. We disclaim 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 our future results to differ materially from any forward-looking statements, see the section entitled Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2017 ( 10-K ) and in the other periodic reports we file with the Securities and Exchange Commission. This presentation includes measures not derived in accordance with generally accepted accounting principles ( GAAP ), such as FFO, operating FFO, adjusted Operating FFO, EBITDA, adjusted EBITDA, NOI, ROIC and MRR. These measures should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP, and may also be inconsistent with similar measures presented by other companies. Reconciliation of these measures to the most closely comparable GAAP measures are presented in the attached pages. We refer you to the appendix of this presentation for reconciliations of these measures and to the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations--Non-GAAP Financial Measures" in our 10-K for further information regarding these measures..

3 Strategic Growth Acceleration Plan Execution Summary

4 QTS Realty Trust, Inc. 3 Strategic Growth Plan Execution Summary Q3 18 Accelerate Growth and Leasing $52M+ Annualized Rent Signed YTD* 14% Q3 Revenue Growth Y/Y* 20% Q3 Adj. EBITDA Growth Y/Y* Increase Profitability $ 51.2% Q3 Adj. EBITDA Margin* Highest YTD adjusted EBITDA margin achieved in QTS history Represents 250 basis points of margin expansion Y/Y Enhance Predictability 1.1% Q3 Rental Churn* Among the lowest churn rates in data center industry YTD churn of 3.0% in line with 2018 churn guidance of 3-5% Churn on track to be approx. half the churn QTS experienced in consolidated business in 2017 * Reflects results for Core business only

5 QTS Realty Trust, Inc. 4 QTS Growth Acceleration Plan on Track Accelerated Leasing Average Quarterly Incremental Rent Signed ($M) 1 Adjusted EBITDA Margin Expansion 1 MRR Churn 1 Reduction 8.4% 10.8M Avg % Avg. 51.2% 6.0% Avg % 45.8% 46.6% 5.6% 4.0% 4.0% YTD YTD YTD 2 Completed migration of non-core customers and services to GDT ahead of schedule with increased contribution to growth in 2019 Broad-based strength across hyperscale and hybrid colocation verticals, with hyperscale pipeline continuing to expand reflects results for the Core business only reflects results for consolidated business including Core and Non-Core 2.Reflects midpoint of 2018 annual churn guidance of 3-5%

6 QTS Realty Trust, Inc. 5 GDT Migration Positions QTS to Accelerate Core Growth QTS completed migration of non-core customers to GDT during Q3 18, with strong success and ahead of schedule Migration was completed ahead of schedule QTS retained approximately 85% of customers originally identified whose services and support would be migrated to GDT s platform Estimated core revenue contribution in 2019 from migration: $10M+ Represents an increase from expectation in Q2 of $8M+ and original stated assumption of $5M+ Completion of the customer migration derisks growth expectations for 2019 and positions QTS platform to accelerate into a growing opportunity within hyperscale and hybrid colocation

7 QTS Realty Trust, Inc. 6 Q Operating Performance Review Signed new/modified leases totaling $18.1M of core incremental annualized rent 20%+ above prior four quarter average leasing of $15.0M Strongest leasing volume through first three quarters of year in QTS history Booked-not-billed backlog increased to $59M of core annualized rent as of Q3 18 Core renewal rates up 2.1%, consistent with expectation for low to mid-single digit percent price increases Hybrid Colocation: Hybrid colocation business contributed approximately 2/3 of net leasing volume in Q3 Seeing uptick in hybrid colocation performance driven by: Increase in deal size Differentiation enabled by software-defined data center platform Positive enterprise demand backdrop Sales team productivity Hybrid colocation demand strength in Atlanta, Piscataway, and Richmond

8 QTS Realty Trust, Inc. 7 Momentum Building in Growing Hyperscale Opportunity Hyperscale: Hyperscale vertical contributed approximately 1/3 of net leasing volume in Q3 Q3 hyperscale leasing volume represented 7MW between two strategic customers Includes incremental 4MW expansion by leading SaaS customer in Manassas, VA Continue to expect customer to ramp into full 24MW deployment over approximately two year period Several larger potential opportunities in pipeline that QTS is actively pursuing with both new and existing customers Continue to anticipate signing at least one additional larger hyperscale transaction by the end of 2018 Manassas, VA

9 QTS Realty Trust, Inc. 8 Improving Credit Profile and Business Visibility Consolidated (Core + Non-Core) Q4 17 Core Business Only Q3 18 Weighted Average Remaining Customer Lease Term (Months) Weighted Average Remaining Top 10 Customer Lease Term (Months) Forward Two Year Lease Expirations as a % of Total Annualized MRR 1 60% 39% Signed Backlog as a % of Total Annualized MRR 12% 16% Annual Churn 2 8.4% 4.0% 1. Forward two year lease expirations as of Q4 17 reflects 2018 and 2019 for consolidated business. Forward two year lease expirations as of Q3 18 reflects 2019 and 2020 for core business. 2.Q4 17 reflects full-year 2017 reported results for consolidated business (core + non-core); Q3 18 reflects midpoint of 2018 annual churn guidance for core business of 3-5%

10 QTS Realty Trust, Inc. 9 Visibility Into Future Growth Remains Strong $59M Annualized Booked-Not-Billed Core MRR ($M) 1 $59.0 $59.0 $59.0 $59.0 $17.0 $31.6 $10.3 Highlights Annualized booked-notbilled core MRR from signed but not yet commenced leases was $59.0 million as of September 30, 2018 Of the $10.3 million in 2018, approximately $1.7 million is expected to be recognized in 2018 revenue Of the $31.6 million in 2019, approximately $21.9 million is expected to be recognized in 2019 revenue Q Represents annualized MRR associated with leases that have been signed but have not yet commenced; may not sum due to rounding

11 QTS Realty Trust, Inc. 10 Balance Sheet and Liquidity Summary Series B Preferred Stock Series A $316M Preferred Stock $107M Market Cap $2,484M 2 Capital Structure Senior Notes $400M $4.1B Enterprise Value Debt Maturities ($M) 3 $2 $1 $0 $81 Unsecured Credit Facility $781M 1 Capital Leases and Other $6M $350 $753 Highlights Net Debt to LQA consolidated adjusted EBITDA of 5.3x Approximately $750 million of liquidity, including cash and availability under revolving credit facility No significant debt maturities before 2022 $59M booked-not-billed backlog of annualized core revenue More than 75% of capital stack subject to a fixed rate Includes two term loans ($700 million in aggregate) and $81 million of borrowings on revolving credit facility as of September 30, Market Cap calculated as follows: total Class A and Class B common stock and OP units of 58.2 million, multiplied by the September 30, 2018 stock price of $42.67 per share. 3. May not sum due to rounding 4. Including Series A and Series B Preferred Stock

12 QTS Overview

13 QTS Realty Trust, Inc. 12 Differentiated Capability to Drive Success in Both Hyperscale and Hybrid Colocation Hyperscale Customers Need Hybrid Colocation Customers Need Scale Speed Economics Secure & Compliant Integrated Hybrid Solutions Seamless Connectivity Premium Customer Service Secure & Compliant QTS Solutions World-Class Infrastructure & Mega Data Centers Significant Growth Capacity 1.3M sq. ft. of powered shell capacity in top U.S. markets with ability to scale quickly and efficiently Operating and Build Cost Advantage Low basis focus & mega scale approach provide permanent cost advantage New Market Expansion in NoVA, Phoenix and Hillsboro Provides future growth capacity in markets where hyperscale customers want to be Premium Customer Experience and Service Delivery Software-defined platform and service delivery track record provide further differentiation for hyperscale customers QTS Solutions Hybrid Colocation Platform Software-Defined Data Center Platform Provides infrastructure visibility and dynamic control to customers Enhanced Hybrid Solutions through Integrated Partners Strategic partnerships with technology and IT services providers expand hybrid colocation opportunity Seamless Connectivity SDN-enabled universal connectivity to carriers, service providers and CSP s High-End Security and Compliance Dedicated team to help enterprises mitigate cybersecurity risks Premium Customer Experience Portfolio of managed services and industry-leading net promoter scores

14 QTS Realty Trust, Inc. 13 Uniquely Positioned Where CIOs Are Investing The Most Top Technology Areas Attracting New Spending What are the technology areas where your organization will be spending the highest amount of new or additional funding in 2018?* QTS is able to solve Enterprises top IT needs 1. Hybrid Cloud Solutions SOFTWARE-DEFINED DATA CENTER PLATFORM delivers flexibility and product capability to provide hybrid data center solutions 2. Data Center Infrastructure WORLD-CLASS MEGA DATA CENTERS provide visibility into significant future growth capacity 3. Cybersecurity INDUSTRY-LEADING SECURITY & COMPLIANCE capabilities enable QTS to be customers trusted partner to help manage risk *Reflects results from Gartner survey of 2,496 Enterprise CIOs published March 9, 2018 entitled, 2018 CIO Agenda: A U.S. Perspective.

15 QTS Realty Trust, Inc. 14 Broad Footprint Focused On Top Data Center Markets 2.7 million sq. ft. of raised floor capacity 1 and 670+ MW of available utility power 2 26 DATA CENTERS 14 MARKETS 95% WHOLLY-OWNED 3 1. Represents basis-of-design floor space as of September 30, The Company defines basis-of-design floor space as the total data center raised floor potential of its existing data center facilities. 2. Represents installed utility power and transformation capacity that is available for use by the facility as of September 30, Based on data center raised floor. Does not include data centers subject to capital lease obligations. Includes Santa Clara, CA which is subject to a long-term ground lease.

16 (Raised Floor NRSF in 000s) QTS Realty Trust, Inc. 15 Powered Shell Capacity Represents 5+ Years of Growth 1.3M Sq. Ft. Additional Capacity in Existing Powered Shell 2,744 2,744 1,805 54% currently built out 1,268 Capacity to nearly double raised floor in existing powered shell and current developments 41% built out 1,476 Full Capacity Able to approximately double raised floor capacity again through development on 600+ acres of adjacent, owned land and real estate 741 De-risks future growth path at known build costs and higher incremental returns As of IPO As of Q3 18 Full Buildout 1 1. Full Buildout reflects our Basis of Design NRSF at full buildout, including 66,324 basis-of-design square feet currently in development in Manassas, VA; does not include additional development which could take place on adjacent, owned land.

17 QTS Realty Trust, Inc. 16 Best-in-Class Mega Data Centers Atlanta-Suwanee, GA 36MW Atlanta-Metro, GA 120MW 1 Richmond, VA 110MW 100% Built Out 205,608 Sq. Ft. 205,608 Sq. Ft. ROIC: 27.2% 2 Occupied: 94.1% 91% Built Out 477,986 Sq. Ft. 527,186 Sq. Ft. ROIC: 17.2% 2 Occupied: 97.6% 30% Built Out 167,309 Sq. Ft. 557,309 Sq. Ft. ROIC: 12.1% 2 Occupied: 72.4% Irving, TX 140MW Piscataway, NJ 111MW Chicago, IL 55MW 3 61% Built Out 168,160 Sq. Ft. 275,701 Sq. Ft. ROIC: 12.6% 2 Occupied: 97.4% 53% Built Out 93,820 Sq. Ft. 176,000 Sq. Ft. ROIC: 10.9% 2 Occupied: 83.2% 19% Built Out 40,000 Sq. Ft. 215,855 Sq. Ft. ROIC: 7.6% 2 Occupied: 64.0% Note: Square footage reflects current Raised Floor Operating Net Rentable Square Feet ( NRSF ) as of September 30, 2018 (red shaded bars) and Basis of Design Raised Floor NRSF at full buildout. MW denotes available utility power as of September 30, Occupied percentage as of September 30, Atlanta -Metro currently has 72 MW of available utility power based on current agreements with its utility provider but has transformer capacity for 120 MW. 2. ROIC calculated by dividing annualized core NOI for the quarter ended September 30, 2018 by the average total cost, less construction in progress for the quarters ended September 30, 2018 and June 30, MW available utility power as of September 30, 2018, with an additional 47 MW available upon QTS request.

18 QTS Realty Trust, Inc. 17 Mega Scale & Hybrid Colocation Platform Enable Premium ROIC Potential % OF CAPACITY BUILT OUT ROIC 7.6% Mega Data Center Lifecycle ROIC 10.9% ROIC 12.6% ROIC 12.1% ROIC 17.2% ROIC 27.2% 19% Built Out 53% Built Out 61% Built Out 30% Built Out 91% Built Out 100% Built Out Combination of operating leverage + higher Hybrid Colocation penetration over the life of a mega scale data center drives higher ROIC Chicago, IL 2 Years Piscataway, NJ 2 Years Irving, TX 4 Years Richmond, VA 7 Years Atlanta, GA 11 Years Suwanee, GA 12 Years Years in Operation Note: ROIC calculated by dividing annualized core NOI for the quarter ended September 30, 2018 by the average total cost, less construction in progress for the quarters ended September 30, 2018 and June 30, 2018.

19 QTS Realty Trust, Inc. 18 Strong Competitive Positioning in Atlanta Atlanta market strengthening Atlanta continues to build momentum as Tier 1 market based on low power cost, low natural disaster risk, fiber availability and concentration of corporate HQ s New legislation outlining tax incentives for data centers Georgia House Bill Culmination of four years of work by QTS, in coordination with Technology Association of Georgia - Further establishes Atlanta as destination for data center deployment - Will provide incremental economic incentives to QTS as well as existing and new customers In October 2018, QTS closed on the acquisition of 55 acres adjacent to existing Atlanta-Metro site - Enables QTS to expand downtown Atlanta campus by an incremental 150+ megawatts Incumbent competitive advantage with significant growth opportunity 670k sq. ft. of raised floor capacity built enables significant operating leverage Atlanta generating 20%+ average ROIC 540+ embedded customer base 120MW owned substation enables QTS to offer the lowest cost of power in Atlanta 2,000+ cross connects Capacity to expand to 733k sq. ft. of raised floor under existing powered shell 87 acres of adjacent owned land enables future growth capacity Atlanta-Metro site is one of the most strategic, interconnected in Southeast

20 QTS Realty Trust, Inc. 19 The QTS Hyperscale Advantage * JLL Global Data Center Outlook 2018

21 QTS Realty Trust, Inc. 20 QTS Software Defined Data Center Platform Service Delivery Platform provides QTS the first true Software Defined Data Center QTS building with our partners, taking neutral approach Over 15,000 SDP Users 15+ Integrated Partners 90M Data Points Collected Per Day

22 QTS Realty Trust, Inc. 21 QTS Service Delivery Platform - Third Party Feedback On how they leverage SDP Today: SDP allowed us to review over and under-subscribed cabinets in real-time, enabling us to shift infrastructure or increase our density. VP of IT (Multi-National Bank) Customers and Partners On using SDP for their Customers: The Power Analytics App is a game-changer. Most of your competitors take 3 weeks to provide this data to our Customers. On how SDP drove the selection of QTS: There was not a close 2 nd in our evaluation. The innovation of SDP combined with Solution Portability and NPS made this an easy decision. IT Director (Clean Energy Automotive Manufacturer) Product Manager (Communications Service Provider Partner) Industry Analysts On QTS Power & Sensor Real-Time Analytics You are showing things that have been on my clients wish list for quite some time.mostly what they get from your competitors is a really limited subset of what you ve just shown Research Vice President, Infrastructure Strategies Group Industry Leading Research & Advisory Firm On QTS vision for Hybrid Colocation On how QTS SDP Platform Interacts with Customers You have cemented yourselves as the provider that is pushing the boundaries in development and service delivery. It s clear you are more than just a colo provider Research Vice President, Technology Service Provider Group Industry Leading Research & Advisory Firm The API and programmatic approach, being able to bridge into the physical world is very attractive. I see differentiation here Research Director, Cloud Service Provider Group Industry Leading Research & Advisory Firm

23 Appendix

24 QTS Realty Trust, Inc. 23 Seamless Connectivity to Hyperscale CSP s and Network Providers Access to 500+ carriers and all major public clouds ~13,000 cross connects Connectivity = 8% of revenue and growing 15%+ year-over-year Peering Exchanges On-Net Carriers On-Net Hyperscalers SD-WAN Providers

25 QTS Realty Trust, Inc. 24 Robust Security & Compliance Capabilities The cyber threat landscape continues to grow with an increasing number and severity of attacks 1 53% cyber attacks resulting in damages $500K+ Differentiated QTS Approach is an Advantage LOGICAL SECURITY Data: Encryption, policy enforcement and security intelligence. 55% companies managing public scrutiny of a BREACH 32% of companies reporting breaches affecting 50%+ OF SYSTEMS PHYSICAL SECURITY Site access and monitoring systems. Breadth of compliance certifications & security capabilities enables QTS to be a trusted partner to Enterprises and Government entities looking to manage increasing cyber risks against their critical systems and data Network: Best-of-breed network infrastructure. Host: Strict security policies, cutting-edge technology and premium support. 24x7x365 on-site security professionals Premium, state-of-the-art owned and operated data centers. Integrated compliance coverage over a breadth of regulations 1. Reflects results from the Cisco 2018 Annual Cybersecurity Report.

26 QTS Realty Trust, Inc. 25 NOI Reconciliation Three Months Ended September 30, 2018 June 30, 2018 September 30, 2017 $ in thousands Core Non-Core Total Core Non-Core Total Core Non-Core Total Net Operating Income (NOI) Net income (loss) $ 7,576 $ (14,468) $ (6,892) $ 5,397 $ (11,830) $ (6,433) $ 3,790 $ 3,604 $ 7,394 Interest income (66) (66) (25) (25) (65) (65) Interest expense 6, ,386 8, ,203 7, ,958 Depreciation and amortization 36,693 1,206 37,899 35,233 2,586 37,819 32,299 3,010 35,309 Tax expense (benefit) of taxable REIT subsidiaries (409) (571) (980) 178 (41) 137 (2,454) (2,454) Transaction, integration and impairment costs ,114 1,114 General and administrative expenses 17,732 2,191 19,923 18,004 3,028 21,032 16,076 5,576 21,652 Restructuring 13,737 13,737 11,430 11,430 NOI $ 68,811 $ 2,097 $ 70,908 $ 67,639 $ 5,177 $ 72,816 $ 58,706 $ 12,202 $ 70,908

27 QTS Realty Trust, Inc. 26 EBITDAre & Adjusted EBITDA Reconciliation Three Months Ended September 30, 2018 June 30, 2018 September 30, 2017 $ in thousands Core Non-Core Total Core Non-Core Total Core Non-Core Total EBITDAre and Adjusted EBITDA Net income (loss) $ 7,576 $ (14,468) $ (6,892) $ 5,397 $ (11,830) $ (6,433) $ 3,790 $ 3,604 $ 7,394 Interest income (66) (66) (25) (25) (65) (65) Interest expense 6, ,386 8, ,203 7, ,958 Tax expense (benefit) of taxable REIT subsidiaries (409) (571) (980) 178 (41) 137 (2,454) (2,454) Depreciation and amortization 36,693 1,206 37,899 35,233 2,586 37,819 32,299 3,010 35,309 Loss on disposition of depreciated property and impairment write-downs of depreciated property 7,409 7,409 3,122 3,122 EBITDAre $ 50,178 $ (6,422) $ 43,756 $ 48,982 $ (6,159) $ 42,823 $ 41,516 $ 6,626 $ 48,142 Equity-based compensation expense 3,961 3,961 3,999 3,999 3, ,693 Restructuring costs 6,328 6,328 8,308 8,308 Transaction, integration and impairment costs ,114 1,114 Adjusted EBITDA $ 55,040 $ (94) $ 54,946 $ 53,634 $ 2,149 $ 55,783 $ 45,875 $ 7,074 $ 52,949

28 QTS Realty Trust, Inc. 27 FFO, Operating FFO and Adjusted Operating FFO Reconciliation Three Months Ended September 30, 2018 June 30, 2018 September 30, 2017 $ in thousands Core Non-Core Total Core Non-Core Total Core Non-Core Total FFO Net income (loss) $ 7,576 $ (14,468) $ (6,892) $ 5,397 $ (11,830) $ (6,433) $ 3,790 $ 3,604 $ 7,394 Real estate depreciation and amortization 34, ,579 33, ,843 30, ,237 FFO 41,599 (13,912) 27,687 38,490 (11,080) 27,410 34,175 4,456 38,631 Preferred stock dividends (7,045) (7,045) (2,248) (2,248) FFO available to common shareholders & OP unit holders 34,554 (13,912) 20,642 36,242 (11,080) 25,162 34,175 4,456 38,631 Debt restructuring costs Restructuring costs 13,737 13,737 11,430 11,430 Transaction, integration and impairment costs ,114 1,114 Tax benefit associated with restructuring, transaction and integration costs (571) (571) (41) (41) Operating FFO available to common shareholders & OP unit holders* 35,455 (746) 34,709 36, ,204 35,289 4,456 39,745 Maintenance Capex (1,660) (1,660) (2,612) (2,612) (2,194) (2,194) Leasing commissions paid (5,212) (249) (5,461) (7,600) (71) (7,671) (1,726) (3,866) (5,592) Amortization of deferred financing costs and bond discount Non real estate depreciation and amortization 2, ,320 2,140 1,836 3,976 1,914 2,158 4,072 Straight line rent revenue and expense and other (1,013) (54) (1,067) (1,300) 67 (1,233) (695) (454) (1,149) Tax expense (benefit) from operating results (409) (409) (2,454) (2,454) Equity-based compensation expense 3,961 3,961 3,999 3,999 3, ,693 Adjusted Operating FFO available to common shareholders & OP unit holders* $ 34,751 $ (399) $ 34,352 $ 32,661 $ 2,141 $ 34,802 $ 34,371 $ 2,742 $ 37,113 *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

29 QTS Realty Trust, Inc. 28 MRR Reconciliation Three Months Ended September 30, 2018 June 30, 2018 September 30, 2017 $ in thousands Core Non-Core Total Core Non-Core Total Core Non-Core Total Recognized MRR in the period Total period revenues $ 107,513 $ 4,700 $ 112,213 $ 102,549 $ 9,728 $ 112,277 $ 94,159 $ 19,608 $ 113,767 Less: Total period recoveries (11,800) (11,800) (10,444) (10,444) (9,690) (8) (9,698) Total period deferred setup fees (3,174) (101) (3,275) (3,073) (130) (3,203) (2,424) (235) (2,659) Total period straight line rent and other (1,701) (2,171) (3,872) (2,022) (2,304) (4,326) (5,222) (1,760) (6,982) Recognized MRR in the period 90,838 2,428 93,266 87,010 7,294 94,304 76,823 17,605 94,428 MRR at period end Total period revenues $ 107,513 $ 4,700 $ 112,213 $ 102,549 $ 9,728 $ 112,277 $ 94,159 $ 19,608 $ 113,767 Less: Total revenues excluding last month (71,443) (4,416) (75,859) (67,701) (6,861) (74,562) (63,840) (13,072) (76,912) Total revenues for last month of period 36, ,354 34,848 2,867 37,715 30,319 6,536 36,855 Less: Last month recoveries (3,896) (3,896) (3,597) (3,597) (2,626) (5) (2,631) Last month deferred setup fees (1,095) (1,095) (984) (99) (1,083) (736) (157) (893) Last month straight line rent and other (979) 356 (623) (745) (1,139) (1,884) (366) (1,338) (1,704) MRR at period end $ 30,100 $ 640 $ 30,740 $ 29,522 $ 1,629 $ 31,151 $ 26,591 $ 5,036 $ 31,627

30 QTS Realty Trust, Inc. 29 Core & Non-Core Reconciliation Three Months Ended Three Months Ended Three Months Ended $ in thousands except per share values September 30, 2018 June 30, 2018 September 30, 2017 Selected Income Statement Data Core Non-Core Total Core Non-Core Total Core Non-Core Total Total Revenues $ 107,513 $ 4,700 $ 112,213 $ 102,549 $ 9,728 $ 112,277 $ 94,159 $ 19,608 $ 113,767 Less: Operating costs 38,702 2,603 41,305 34,910 4,551 39,461 35,453 7,406 42,859 Net operating income 68,811 2,097 70,908 67,639 5,177 72,816 58,706 12,202 70,908 Less: General & administrative expenses (excluding equity-based compensation expense) 13,771 2,191 15,962 14,005 3,028 17,033 12,831 5,128 17,959 Adjusted EBITDA 55,040 (94) 54,946 53,634 2,149 55,783 45,875 7,074 52,949 Less: Equity-based compensation expense 3,961 3,961 3,999 3,999 3, ,693 Interest income (66) (66) (25) (25) (65) (65) Interest expense 6, ,386 8, ,203 7, ,958 Tax expense (benefit) from operating results (409) (409) (2,454) (2,454) Non real estate depreciation and amortization 2, ,320 2,140 1,836 3,976 1,914 2,158 4,072 Preferred stock dividends 7,045 7,045 2,248 2,248 Operating FFO available to common shareholders & OP unit holders 35,455 (746) 34,709 36, ,204 35,289 4,456 39,745 OFFO per share 0.61 (0.01) Fully diluted weighted average shares outstanding 58,251 58,251 58,251 58,080 58,080 58,080 56,833 56,833 56,833 Adjustments: Transaction, integration and impairment costs (901) (901) (653) (653) (1,114) (1,114) Restructuring costs (13,737) (13,737) (11,430) (11,430) Debt restructuring costs Tax benefit associated with restructuring, transaction and integration costs Real estate depreciation and amortization (34,023) (556) (34,579) (33,093) (750) (33,843) (30,385) (852) (31,237) Preferred stock dividends 7,045 7,045 2,248 2,248 Net income (loss) $ 7,576 $ (14,468) $ (6,892) $ 5,397 $ (11,830) $ (6,433) $ 3,790 $ 3,604 $ 7,394 Note: Per share values may not sum due to rounding